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 certaincompanies have thought that was a good idea. You can reach him by email at leex1008@umn.edu.
An insightful post by Don Marti on the economics of peer production:
Linux started as a peer production project in 1991, and got its first vendor-supported device driver in 1994 and its first full-time paid contributor (Leonard Zubkoff, VA Research) in 1997. Leonard started off writing SCSI drivers in his spare time, then got a job doing RAID support — so that VA could sell high-margin boxes with RAID, not just the commodity one-processor, one-drive machines they started with.
Today, there’s a flexible and socially connected interface between the kernel team and the hardware companies. A driver developer has to be part of both organizations. The payoffs for plugging into both your company’s management structure and a peer production project include that you get to eliminate a lot of duplication of effort by having other people help with the infrastructure that supports your driver, and you get free code reviews and developer training. Greg says that at one company, one person maintains the Linux driver, and 150 are needed to maintain the driver for a common proprietary OS.
Friend-of-a-friend Tom Lee offers another example of the evils of the unregulated cell phone market. Apparently, AT&T, Sprint, and Qwest are all blocking a free conference call service he uses, in order (Tom speculates) to twist his arm into switching to a paid conferencing service—the idea, presumably, to get them to sign up for one of those companies’ products.
Instead of punishing the companies that have screwed up, we’ll be forced to switch conferencing providers. Which, if the freeconference.com people are to be believed, is exactly what the networks are conspiring to accomplish.
Now compare the situation to my VoIP vendor. If I’m using an open protocol (and, since my home Asterisk server speaks SIP, I am), the decision to switch vendors is as simple as googling for a new provider, filling out a web form and altering a configuration file to match the credentials that will have been emailed to me. That’s how it ought to be: if Cingular starts screwing you over, forward your calls to the T-Mobile trial account you just set up — all it’d take is changing a few settings on your handset. If you like it, switch for good for whatever the current, reasonable number-portability fee is.
I find this a little bit puzzling because I would think that the FCC would already have some authority to deal with this sort of thing, since the PSTN is firmly under the commission’s control. I would think this would be a case where the FCC would have full authority to step in, as they did in the Madison River case, and tell them to knock it off. I wonder if one of the actions in the email is to call the relevant FCC commissioners’ offices.
But let me address Tom’s more general point about our collective skepticism about government regulation.
I’ve got a review of Wikinomics up over at The American. Here’s the meat of it:
If Wikinomics has one weakness, it’s that the authors fail to fully appreciate the extent to which market mechanisms lose their salience in the context of peer production. For example, they urge Yahoo! to set up a profit-sharing scheme within its Flickr photo-sharing site and its del.icio.us social bookmarking site, in which the creators of the most popular content would get paid for their contributions. This seems entirely unnecessary. The sites must already be offering users sufficient incentives to participate, or they never would have signed up in the first place.
Moreover, introducing payments could create new problems. Paying a handful of the most popular contributors could create feelings of envy and resentment among the vast majority of users who would continue to be unpaid. The lure of cash payments might also induce some users to attempt to game the system. Paying contributors would be highly inefficient, as there would be substantial overhead in locating, authenticating, and mailing (fairly small) checks to thousands of people. The money would be far better spent hiring more programmers to further improve the site, making it more valuable for all users.
This points to a more general principle: peer production succeeds largely because it eliminates the frictions that accompany commercial activities. Proprietary software companies face a variety of costs, including finding and hiring programmers, finding and hiring sales and support personnel, supervising and evaluating employees, negotiating contracts with other software companies, filing patent applications, renting office space, and so forth. Peer production eliminates most of these costs, as contributors self-select the parts of a project that interest them most (which will, more often than not, be the parts to which they’ll have the most to contribute) and contribute their changes directly to the project, without the substantial overhead that would be required to keep track of who contributed what and how much each contributor was owed. Introducing financial payments into the equation can often undermine the very efficiencies that make the system work in the first place.
Also, don’t miss the latest edition of The American’s new podcast, which features yours truly discussing the basics of peer production with managing editor David Robinson.
Although I think it make some good points, I think it gets a couple of things wrong. One is the point about “smart” networks. I’ve discussedthatindetailbefore, so I won’t belabor it here. The other thing that seemed off to me is this notion that we’ve got an “exaflood” on its way, and if we don’t have enough bandwidth, the Internet’s architecture won’t be able to “keep up” with the demand.
Don Marti fires back at our own Solveig Singleton and her post on “deconstructionism” and DRM:
“Fiddling with the language” won’t win the DRM debate, but getting the right terms into common use will help keep it from being harder than it has to be.
Framing does work. Archer Daniels Midland’s lobby groups help keep sugar quotas in force in the USA, even though they raise prices for sugar customers and hurt opportunities for mutually beneficial trade with sugar exporters. The winner? The corn syrup industry. Archer Daniels Midland can’t run its high-fructose corn syrup business at a profit unless the government puts heavy-handed restrictions on trade in sugar. And, no, this Decatur, Illinois company is not wasting its money on “deconstruction”.
We’ll be holding the third installment of our wildly successful Alcohol Liberation Front events on Monday, March 19. We’ll be meeting from 5:30-7 PM at Science Club. If you’d like to join us, please drop me an email so we know to look for you.
If you’ve got a Mac with an iSight camera, (like the one that came with my shiny new MacBook) what you’re looking at on the right there is your own face, rendered by Apple’s graphics system to look “painted.” I think that’s awfully damn cool.
Update: I got some reports that this was screwing up PC users, so I’ve moved it below the fold…
I’m pleased to announce that my employer, the Show-Me Institute, has a new blog. If you have any Missouri ties, or just want to read the brilliant thoughts of me and my esteemed colleagues, I encourage you to check it out.
Randy Picker has a great post on interoperability and the law:
In one classic case, Borland did this when it sold the spreadsheet Quattro Pro with an alternative interface that emulated that of Lotus 1-2-3, the dominant spreadsheet of the day. Lotus tried to rely on copyright law to defeat Borland and failed though do remember that the vote in the Supreme Court was 4-4 and ties go to the lower court winner, in this case Borland. When I switched my main browsing program from Internet Explorer to Firefox, Firefox looked on my hard disk to find the links that I had stored as IE Favorites, again reducing the transaction costs of switching.
But we see how design matters when we return to my tagged stories. I don’t know for sure—perhaps the computer savvy can tell me—but I don’t think much if any of my Google Reader info is stored locally on my machine. I have been using my wife’s laptop at home at night while my laptop has been dying and, once I have logged in, Reader works on her machine as it would if I were logged on my machine. I don’t think that there is any locally-stored info for FeedDemon to examine were I trying to switch over both my feeds list and my tagged stories. And the question is whether FeedDemon could write something that would burrow through my Google Reader “subscription”—that seems like a fair description—to extract my tagged stories. And these design issues are even more embedded than that suggests, as Nick Carr makes clear in his recent post on this.
The question posed by the Microsoft v. AT&T case, is whether that law should apply to situations where the only exported “component” in question is software written in the U.S. but copied and reinstalled in computers abroad. Interestingly enough, the near unanimous view in the software industry–judging from the briefs submitted by the parties I’ve listed above–is that it shouldn’t. (The specific facts of the case are these: Microsoft concedes that its Windows operating system infringes a U.S. patent belonging to AT&T (T) relating to coding and decoding human speech. It is willing to pay royalties on copies of Windows sold in the U.S., but contends that it shouldn’t have to pay for copies installed on computers abroad and sold there. AT&T, and the court below, say it should.)
In other words, all these parties with mighty software patent portfolios would rather, on balance, not be allowed to enforce those valuable assets abroad, so long as they could be assured that, in exchange, they also wouldn’t have to worry about being sued for infringing anyone else’s U.S. software patents abroad. That doesn’t sound like a ringing endorsement of the U.S. patent system, at least as it relates to software patents; it sounds like the opposite. (Patent law is supposed to benefit industry by spurring innovation; yet it sounds like the software industry regards it as a net drag on in its industry.)
I find this an intriguing argument, although I’m sure if I agree with it. What do y’all think?
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We’ll be holding the third installment of our 
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.