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.
Scott Kieff, a law professor who works just down the street from me at Wash U, makes a novel (to me anyway) argument about the purpose of patents:
When patents are enforced with clear and robust rules, and backed up by a strong right to exclude, they serve an essential coordinating role in facilitating the complex process of getting inventions commercialised. Patents help get inventions put to use broadly and rapidly.
Bringing an invention to market requires coordination among many complementary users of that technology, including capitalists, developers, managers, labourers, other technologists, manufacturers, marketers and distributors. Patents help this diverse group act in a coordinated fashion in at least two distinct ways.
First, the right to exclude associated with a published patent acts like a torch in a dark room in drawing to itself all those interested in the patented subject matter. This beacon effect gets all the diverse individuals to interact with each other and with the patentee.
Second, everyone’s expectation that the patent can be enforced against anyone is exactly what provides these individuals with the required incentive to strike deals with each other. This bargain effect falls apart if everyone knows the patent can’t be enforced.
The profit potential associated with an enforceable patent incentivises everyone in the commercialisation process. Not least of all, for example, the promise of financial payoffs is what brings the essential capital investments to start and sustain businesses.
This argument has a certain superficial plausibility, but as I’ll explain below the fold, it runs afoul of Ed Felten’s Pizzaright Principle.
We’ve written in the past about various problems brewing at Indian outsourcing firms that are increasingly facing talent shortages and competition from lower-cost competition. Om Malik has an interesting roundup of a fresh set of articles all pointing to continued troubles at these firms. The big problem continues to be the shortage of labor, which is the result of a few different factors. Many employees who got their start at one of these outsourcers are now going to business school, hoping to move up to higher value work. Furthermore, these jobs aren’t viewed as highly by college graduates as they used to be. Increasingly, talented coders have the opportunity to work directly for the likes of Google and other international tech firms. And there remains a shortage of top-quality education opportunities, preventing many from getting trained and choking off the overall pool of labor. None of this necessarily spells doom for these companies. One way they can cope is by moving up the food chain, offering services of higher value than simple outsourcing or call-center work. And, of course, they don’t have to limit themselves to Indian employees, they can hire talent from the US as well.
When the Lou Dobbses of the world complain about globalization, they like to paint a picture of an inexaustible supply of cheap labor overseas. This is bad for two reasons, we’re repeatedly told: it’s unfair to the overseas workers who are “forced” to work for low wages, and it’s unfair to American workers who can’t compete against foreign competition.
Self-determination and self-ownership are essential in a free society. Actual physical material such as tissue samples or actual genes taken from a person’s body should not be acquired or used without informed consent–that includes not using a patient’s tissue to develop and market cell lines or to develop and market medical therapies without the patient’s express consent. It is dishonest to provide patients with misleading consent forms. Some give the impression a patient’s tissue is medical waste that the hospital or doctor should be free to dispose of as necessary. Other consent forms acknowledge that a patient’s tissue may be used to gain knowledge but say nothing of the potential profits to be gained either from that knowledge or from the actual use of the tissue itself.
TLF contributor Jim Harper squares off with a national ID advocate on MSNBC:
I find Joan Messner’s argument baffling. “If the terrorists had not had drivers licenses, there probably would not have been an attack on 9/11,” she says. True enough. But what does that have to do with anything?
The point is that at the point when the 9/11 terrorist applied for drivers licenses, they hadn’t done anything illegal. They got their drivers licenses the same way the rest of us do: they went to the DMV and signed up for them. It’s not obvious on what basis we could or should have denied them licenses.
So Messner’s argument just seems like a non sequitur. I don’t see any way that a more secure drivers license would prevent another 9/11. Can anyone explain how this argument is supposed to work?
The House has passed legislation allowing judges to volunteer to receive special training in patent law, after which, other judges could voluntarily defer to those judges when patent cases come along.
Better trained judges are a good thing, right? Not so fast, says Mike Masnick:
I’ve got a write-up of Tim Wu’s paper over at Ars. Most of it’s a summary of Wu’s paper, but I do a bit of policy analysis near the end:
Surprisingly, Wu does not mention one reform that could alleviate what he identifies as the biggest barrier to entry in the wireless market: the high cost of spectrum. Various scholars have proposed that more spectrum be auctioned off to private firms for use in next-generation wireless services. That would make it feasible for more firms to enter the wireless marketplace, providing much-needed competition. Wu himself notes that the smallest of the national carriers, T-Mobile, also has the least restrictive policies. It is likely that if enough spectrum were made available to allow additional carriers to build nationwide networks, those carriers would tend to follow T-Mobile’s lead and build more open networks than the largest incumbents.
Wu also does not spend much time considering the feasibility of enforcing open access rules on wireless carriers. Although Carterfone is widely regarded as a success, some more recent attempts by the FCC to force incumbents to open their networks to competition have not been so successful. The FCC unsuccessfully attempted to force the Baby Bells to share their DSL lines with competitors during the Clinton administration, sparking nearly a decade of litigation that only concluded with Supreme Court’s 2005 Brand X decision. And the cable industry is fiercely resisting the FCC’s attempts to open up the market for cable boxes, a process that has has been raging for close to a decade with no end in sight. It is likely that the wireless industry would be equally resistent to any effort to forcibly open its network to new entrants.
With the debate over network neutrality regulations of wireline broadband providers sucking all the oxygen out of the room, it’s unlikely that Wu’s proposals will have an impact on the telecom debate during this session of Congress. But as wireless technologies become ever more ubiquitous, questions about whether and how to regulate the wireless industry will only become more frequent and more contentious.
I think the CableCard analogy would be particularly worth exploring in more detail. Wu actually cites it as a possible model for interoperability done right, but my reading of the situation is that so far, at least, it’s been less than a raging success. The first generation CableCard spec had an extremely limited feature set, and even more limited consumer interest. Approximately zero cable customers have actually requested CableCards from their cable companies. The FCC’s “integration ban” goes into effect this summer, which could enlarge the market for third-party CableCARD devices, but the jury is definitely still out, and it’s rather premature to be hailing it as a success. And remember that Congress first ordered the FCC to open up the set-top box market a decade ago.
Wow, we’ve really been piling on Tim Wu’s new paper. Having read it, I’m inclined to think that we didn’t quite give him enough credit.
With my libertarian hat on, I’m still far from convinced that regulations of the wireless market is either necessary or beneficial. But wearing my geek hat, I think it’s worth noting that Wu does an excellent job of documenting a real problem. Along some dimensions, the wireless marketplace is fiercely competitive and consumers are benefitting from lower prices and better service. But along other dimensions—especially next-generation data services—the current state of the market leaves much to be desired.
Admitting to the existence of these sorts of problems obviously puts us as libertarians in a bit of an awkward position. The argument for limited government is easiest to make when we can simply argue that whatever’s happening in the marketplace is working perfectly. So our first instinct is to just reflexively defend whatever the current incumbents are doing. But the reality is that even in a competitive market, the incumbents are far from perfect.
I haven’t had time to read Tim Wu’s new paper, but something struck me from reading Hance’s summary. Wu describes the wireless market as “a textbook oligopoly with four major players, premised on a bottleneck resource.” That didn’t strike me as being quite right, so I did a quick check on Wikipedia. Wu is right that the four largest carriers are AT&T, Verizon, Sprint, and T-Mobile. But these are not, as he implies, the only carriers. If Wikipedia is to be believed, at least, Alltel is #5 with 15 million customers in 36 states. U.S. Cellular is #6 with 5.7 million customers in 26 states. There are also a variety of smaller carriers. Most of them are Mobile virtual network operators piggy backing on networks owned by the big four, but you’ve also got Cellular South, Centennial Wireless, and SunCom, all of which appear to be non-trivial wireless carriers, although none of them come close to being national networks.
And then we must keep in mind that many customers still use landlines through their Baby Bell or cable company for their phone service. The Baby Bell option doesn’t add much competition since most people have either Verizon or AT&T for a Baby Bell. But most peoples’ cable companies are independent companies, and I don’t believe that Qwest owns any of the major wireless providers.
So depending on how you count, and what part of the country you’re in, the average consumer has between 5 and 8 choices for wireless phone service. Update: Oops, I meant to say “phone” here–including cable and Baby Bells as options
Now that’s obviously not as competitive as say, the PC industry. But it’s certainly comparable to a lot of industries we don’t generally think of as problematic. Your average metropolitan area only has 3 or 4 major supermarket chains, for example. Obviously, it’s always nice to have more competition, and we should be looking at policies that might open up the market to more players. But 5 to 8 major providers strikes me as a reasonably healthy industry by almost any standard.
Jane Ginsburg of Columbia Law School has a paper called “The Pros and Cons of Strengthening Intellectual Property Protection: Technological Protection Measures and Section 1201 of the US Copyright Act.” The paper paper is a thorough and readable survey of recent legal decisions regarding the DMCA’s anti-circumvention provisions.
The paper highlighted something that I hadn’t given a lot of thought to before: the DMCA ostensibly prohibits two separate kinds of circumvention. Section 1201(a) prohibits circumventing “technological measure that effectively controls access” to a protected work, as well as “trafficking” in devices for that purpose. Section 1201(b), in contrast, prohibits trafficking in devices that circumvent a “technological measure that effectively protects a right of a copyright owner.” Ginsburg discusses this distinction at some length.
Steve Jobs appears to have made a convert of the Economist on the merits of ditching DRM, which, as far as I’ve seen, has not come down firmly on the anti-DRM side previously:
The music giants are trying DRM-free downloads. Lots of smaller labels already sell music that way. Having seen which way the wind is blowing, Mr Jobs now wants to be seen not as DRM’s defender, but as a consumer champion who helped in its downfall. Wouldn’t it lead to a surge in piracy? No, because most music is still sold unprotected on CDs, people wishing to steal music already can do so. Indeed, scrapping DRM would probably increase online-music sales by reducing confusion and incompatibility. With the leading online store, Apple would benefit most. Mr Jobs’s argument, in short, is transparently self-serving. It also happens to be right.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology. Learn more about TLF →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.