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.


Square Wheel

by on November 27, 2006 · 4 comments

Another scathing Zune review, this one in the Chicao Sun-Times:

“Avoid,” is my general message. The Zune is a square wheel, a product that’s so absurd and so obviously immune to success that it evokes something akin to a sense of pity. The setup process stands among the very worst experiences I’ve ever had with digital music players. The installer app failed, and an hour into the ordeal, I found myself asking my office goldfish, “Has it really come to this? Am I really about to manually create and install a .dll file?” But there it was, right on the Zune’s tech support page. Is this really what parents want to be doing at 4 a.m. on Christmas morning? That might not be Zune’s fault. After about a year of operation, it’s almost as if a Windows machine develops some sort of antibodies that prevent it from recognizing new hardware. But what’s Microsoft’s excuse for everything else?

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I seem to have been unclear in my previous post about software firms as intermediaries. Don Marti objects:

Software developers have to eat, and the GPL is not just about “join us now and share the software”. Homo economicus writes GPL software, too. Besides acting as a “codification” of science-like norms on information sharing, the GPL is also about making the code itself a commodity in order to drive up the value of the services–support and maintenance programming–that are complements to it. Think of it as a bar: the code is just dry, salty free pretzels without the cold beer of maintenance and support. When a developer decides to release software under the GPL, he or she is typically making an economically rational decision to invest in himself or herself. I know people who spent several years of their lives, when they could afford it, as “starving hackers” contributing to GPL software, and who are now “Senior Architect” types at various big IT companies, paid the big bucks to support and continue development of software they invested a lot of time in, and that they’re uniquely qualified, technically and social-network-wise, to continue supporting. The incentive that the GPL provides for creating software value is a powerful alternative to the “will work for options” model.

I entirely agree. When I said that the GPL community is non-commercial, I didn’t in any sense mean that it’s anti-commercial. Certainly, many people participate in the Linux community because they expect it to pay off for them down the road, and that’s certainly not frowned on within the community.

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In a comment responding to my previous post, engima_foundary makes an excellent observation:

In a nutshell, I consider a Free Software company as a thin membrane, with their clients on one side and the developers and Free Software on the other. They mediate between the two wowrlds, and the value they bring to their clients consists of two things: (1) Service – which is their responsiveness to their costomers & (2) their reputation and integrity. Well, guess what-they just assinated their own integrity. So all they have left is service, and that means they are at a disadvantage to their competitors.

I think this is an excellent description of what a free software company does. Fundamentally, they create value by serving as an intermediary between two distinct communities that operate on somewhat different norms. On the one hand, you’ve got the free software community, which is organized on fundamentally non-commercial principles. The coin of the realm is code, not money. You gain a good reputation in that community by writing great code and making it available for others to build on, and by respecting the communities strong norms of reciprocity.

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Novell and Microsoft have been spending the last few days releasing dueling statements concerning the implications of their recent agreement. Novell insists that Linux doesn’t infringe any Microsoft patents, and that their patent agreement with Microsoft shouldn’t be interpreted as an admission to the contrary. Which raises the question of why you’d pay $40 million for superfluous protection. Microsoft says that they “have agreed to disagree” on the subject.

It’s not clear where this is going to end up, but one thing that’s absolutely clear is that this has become a PR nightmare for Novell. A lot of people in the Linux community seem to feel betrayed by Novell’s behavior. The agreement has already done damage that will take months for Novell to repair.

Braden asked on Monday how “a boycott would materially hurt Novell.” Below the fold, I’ll see if I can elaborate a bit more on why I think the open source community has so much leverage in this sort of situation.

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Patri Friedman has an interesting argument against “intellectual property”:

An argument by Milton Friedman about “consensual crimes”, however, pushes me more in the anti-IP camp. Libertarians, of course, decry such “crimes” for moral reasons, but his argument manages to be both consequentalist and general. He points out that consensual crimes have a naturally higher enforcement cost and worse effect on civil liberties. The reason is that for a normal crime, such as theft, there is someone actively trying to stop the crime, and with the interest to report it and help solve it. For a crime such as prostitution, neither the buyer nor the seller are being harmed. Hence neither will report it, and neither will help solve it. On the contrary, both have an interest in hiding it. So to catch someone at such a crime, you need to spy, to mole, to entrap – because the participants aren’t going to help. Regardless of your moral beliefs, anyone with a practical bent understands that enforcing laws has costs, and those costs must be measured against the benefits of stopping the bad activity. This argument adds some consequentalist punch to libertarian morality by suggesting that the class of activities we think should be legal (consensual ones) will naturally be more expensive to ban than the class we think should be illegal (nonconsensual ones). In the specific case of IP, the copier/user and the copied are engaging in consensual activities – as with prostitution, it is only some distant authority who wishes this activity to stop.

There’s clearly something to this. The recording industry’s war on file sharing does have some similarities to the war on drugs. But even if we were to conclude that it was hopeless and ought to be abandoned (which I’m not willing to do), I think the implications would be less sweeping that Friedman suggests.

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Via Jim Lippard (who’s a GC employee), here’s a story about Global Crossing’s criticism of the FCC’s decision to extend the 1994 Communications Assistance for Law Enforcement Act to IP-based networks:

The agency also plans to stand firm with the May 2007 deadline, he said. In fact, the days of “endless” extensions for achieving CALEA compliance are effectively over for any broadband or voice-over Internet protocol company, he said, because most deployed their equipment after October 1998, thereby exempting them from relief. Kouroupas and Global Crossing aren’t alone in balking at the mandate. A group of organizations and companies that included Sun Microsystems, Pulver.com, the American Association of Community Colleges, the Association of American Universities and the American Library Association lodged an appeal against the rules last fall. But a divided appeals court panel upheld the FCC’s rules, dismissing the group’s argument that Congress never intended CALEA to force broadband providers–and networks at corporations and universities–to build in surveillance hubs for the police.

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One of the most important lessons of politics in recent years is that language matters. The words we use to describe the policies we advocate have a profound effect on how we think about them. Our choice of language has powerful effects in framing how we think about a subject. Sometimes, this effect can be benign or even beneficial. As a libertarian, I like the political implications of the terms “death tax” and “undocumented worker.” I’m not so crazy about the terms “gun control” and “war on terrorism.”

I’ve become convinced that the phrase “intellectual property” is a particularly potent bit of framing. And, in my opinion, it has become a serious obstacle to thinking clearly about the legal regimes of copyrights, patents, trademarks, and trade secrets. There are often debates, on TLF and elsewhere, that are framed in terms of whether we should be “for” or “against” intellectual property. This, it seems to me, completely obscures the real issues in the “intellectual property” debate. No one (even Levine and Boldrin) is in favor of abolishing the trademark system. Likewise, no one is in favor of extending “intellectual property” into every conceivable area of our lives (consider David Friedman’s silly proposal to give people ownership of words). Everyone believes that “intellectual property” is appropriate for some areas of the economy, and inappropriate in others.

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The Community Shrugged

by on November 20, 2006 · 46 comments

Don Marti makes a good point about the enforcibility of the GPL in the face of deals like the Microsoft/Novell pact:

The GPL is not a top-down EULA. It’s a legal “codification” of a set of cooperation and information-sharing norms, which includes an agreed mutual defense policy on patents. So whether or not the Microsoft/Novell deal is a millimeter below or a millimeter above the letter of the law isn’t that big of a deal Siobhán O’Mahony wrote, “Informal enforcement of license terms draws upon the normative roots of the license and occurs primarily through on-line public forums. The GPL codifies a strong norm of reciprocity that has long been an important part of the programming culture…. In the eyes of both legal scholars and informants, the GPL’s strength stems not necessarily from its legality, but from the public collective opinion of community members.” Novell is holding an IRC meeting about the deal (via LWN.net). Novell’s “inner circle”, which negotiated the separate peace, has to sell the rest of its stakeholders on discarding the cooperation norms under which they had been working in favor of a “weasel words” interpretation of the letter of a license. I don’t see how they can pull this off.

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The DMCA in the American

by on November 20, 2006 · 14 comments

Today, AEI is launching a brand new magazine titled The American. It’s a bimonthly print magazine combined with a website at American.com. The website is edited by David Robinson, who TLF readers last encountered in July, when I quoted his musings over at Ed Felten’s blog. Robinson asked me to do an article on Zune and the DMCA as one of the inaugural articles on the website:

After the release of its Zune media player last Tuesday, Microsoft faces some awkward questions about compatibility. For the last two years, Microsoft has promoted a digital music format called “Plays for Sure,” which it licenses to other companies that want to build their own player devices or music stores. But Zune uses a brand new and incompatible system. Consumers who purchased music in the “Plays for Sure” format won’t be able to play it on their Zune devices. Microsoft may get extra flack for locking its own loyal customers out of a previous version of its product, but walls between digital music platforms have a long history. “Plays for Sure” music and the new Zune format have always been incompatible with Apple’s wildly popular iPod, and with the iTunes music store. Compatibility issues didn’t always plague the music industry. You might think those compatibility problems would represent a market opportunity for third-party software developers. But copyright law stands in the way. The Digital Millennium Copyright Act (DMCA), enacted in 1998, prohibits “circumvention” of copy protection such as that found in Microsoft and Apple’s music formats. The copy protection gets called digital rights management (DRM). Format-conversion software is, in most circumstances, illegal unless authorized by the company that created the format. Hence, the DMCA gives software companies a legal tool to bar competitors from building products compatible with their own, promoting the balkanization of the digital media marketplace into a cacophony of mutually incompatible formats. Not only does that inconvenience consumers, it also reduces intra-platform competition and effectively locks small entrepreneurs out of the market for media hardware and software.

I think the magazine itself sounds like an exciting project. As their about page describes it, The American is “a magazine of ideas for business leaders. Modeled on Henry Luce’s original vision for Fortune Magazine, it surveys the full scope of American life through the lens of business and economics.” Check it out.

Reader X. Trapnel appears to have a newly created blog, and he has a provocative and well-argued post arguing that copyright and patent are examples of Bastiat’s broken window fallacy. I made a much more limited version of this argument back in May, where I pointed out that it was a mistake to measure the worth of peer-produced projects like Wikipedia by the revenues they generate. But X. Trapnel goes much further and argues that the entire argument for patent and copyright law are examples of the fallacy:

Just as in the Bastiat story, you have the helpful onlooker who says “But everyone must live, and what would become of innovation if every innovator could have his insight copied by the first free-rider who came along?” Just as in the Bastiat story, this is wrong. What is seen is the way in which the protected firm uses his IPR to generate monopoly profits, some of which are then plowed back into R&D, generating a pleasant stream of innovation. What is not seen is what would happen in the absence of this protection: the innovator would have to keep innovating in order to maintain his market, leveraging his expertise into further productive developments, while newcomers would be able to experiment on their own with the knowledge produced by the first. Money that once went to monopoly rents would go instead to other, more productive things–including further innovation. The neo-Schumpeterian retort is that this is hopelessly naive: innovation requires large capital investment and the reasonable hope of monopoly rents to recoup it. But this is mere question-begging, and its plausibility lies, again, with the distinction between What Is Seen and What Is Not Seen: when we give innovators monopoly privileges of this sort, we thereby tilt the playing field dramatically towards heavily capitalized firms by jacking up the costs of the inputs (eg., prior innovations, a skilled legal team, insurance against lawsuits) to production. As a result, What Is Seen is capital-intensive innovation; What Is Not Seen is the less capital-intensive innovation that the legal regime has stamped out.

As I’ll explain below the fold, I think this argument has a certain plausibility (especially for patent law), but ultimately I don’t find it persuasive.

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