SAN JOSE, February 26, 2007–AT&T Senior Vice President Jim Ciconni said Tuesday that the telecommunications world is fundamentally different from 1968, when the FCC required AT&T to allow competing telephones onto its network.
Speaking at the Technology Policy Summit here, Ciconni addressed the recent push for new wireless ‘Net Neutrality rules. “Unlike 1968, we have a pretty vibrant market out there,” he said.
The date refers to the year in which the agency allowed the Carterphone, which connected handheld radio conversations to telephone lines, onto AT&T’s network.
As a result, AT&T would reject any FCC requirement that put such rules in place on wireless carriers.
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At the risk of making TLF the “All Wu All the TIme” blog, I wanted to pass on Randy May’s just-released commentary on Tim Wu’s wireless paper. May–president of the Free State Foundation in Maryland–focuses particularly on Wu’s support of a “Carterfone” rule for wireless. May’s reaction to this? “Back to 1968, No Way!”. (Bringing to mind mental images of Chicago police rounding up protesting free-market economists on the street…)
May provides some valuable perspective, contrasting the static Bell System monopoly that spawned Carterfone and the constantly-changing wireless industry of today:
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The Government Accountability Office testified to the Senate Finance Committee today that investigators were easily able to pass through borders using fake documents. Indeed, sometimes documents were not checked at all.
“This vulnerability potentially allows terrorists or others involved in criminal activity to pass freely into the United States from Canada or Mexico with little or no chance of being detected.”
That’s true, but shoring up that vulnerability would add little security while devastating trade and commerce at the border.
Identity-based security works by comparing the identity of someone to their background and determining how to treat them based on that. To start, you need accurate identity information. That’s not easy to come by from people who are trying to defeat your identity system.
Here’s a schematic of how identification cards work from my book Identity Crisis.
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As promised in his welcome write-up of my book, Tim Lee has also picked a nit with it. Unsurprisingly, he homed in on an issue that others are likely to find difficult: terminology.
In researching the book, I found no end to the variety of uses given to words like “identification,” “authorization,” and especially “authentication.” I generally avoided the latter because it is so confusing.
So why don’t I review, and perhaps improve on, my treatment of terms in the book. I think Tim has gotten some of his thinking wrong in his comment. Because he does so after reading my book, the error is mine. I did not convey my thinking well enough to fully explain or persuade on the first shot.
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Score one for David Levine’s argument that complimentary goods would allow producers of expressive works to profit without copyright, part of his broader response to the infamous “King Kong question.”
Yesterday, I got Tool’s new CD 10,000 Days.
Instead of a jewel case, it comes in a sort of book with stereoscopic lenses built into it. As you ROCK to the first new album from them in years, you look through the lenses at these interesting and bizarre pictures that so typify the Tool aesthetic.
Meaning: You downloading wussies, sitting in your dorm rooms listening to the Tool song that you downloaded, you have no idea what the total Tool experience is like. You can’t download the Tool experience. Smoke all you want of the skank-weed you bought from that hustler and listen to your downloaded Tool. You don’t rock out to Tool the way I rock out to Tool. If you want to do that, you have to buy the CD. Downloader.
Ahem. Sorry. A little over-excited about the new Tool CD.
But you get the point. Consciously or not, Tool has linked its digital good to a tangible one and helped to lock in sales.
The album is good. I mean, . . . it’s Tool!
Who says there’s no broadband competition? While reading up on franchise reform, it occurred to me that I hadn’t tried the “threaten to switch and get a discount” tactic on my broadband provider, Charter. A 10-minute conversation with an extremely helpful gentleman cut my monthly bill nearly in half, from $52.99 to $29.99 in exchange for a one-year contract. And I only paid the $52.99/month for one month, because the first six month I was paying $26.99 in a 6-month introductory offer.
This was for “naked” broadband–I don’t watch TV and I’m cell phone-only. And it’s no doubt a result of AT&T’s aggressive $12.99 DSL offering. Cable Internet is considerably faster than DSL, so I’m happy to pay a moderately higher price for the faster speed. I remember paying over $50/month for a significantly slower DSL connection as recently as 2002.
Could things be even more competitive? Sure. But I think this illustrates that a duopoly is dramatically preferable to a monopoly. The best way to help the consumer is by cutting red tape for cable and telephone companies so they can continue undermining each others’ monopolies in voice, video, and data.
Oh, and if you aren’t currently getting some sort of discount from your broadband provider, give them a call and threaten to switch to the other team. Chances are you’ll get big savings on your monthly bill.
I think Jim DeLong underestimates the magnitude of the DRM challenge. He links to this article, about a new service called MovieBeam:
[I]s selling a $200 digital gadget prestocked with 100 movies–some in high definition–that you can rent at the click of a remote-control button for as little as $1.99. There’s no drive to the video store, no chance of a movie being out of stock, no monthly fee, no waiting for the mail. . . . The MovieBeam service doesn’t require a computer or Internet connection, and it operates independently of your cable or satellite provider. The MovieBeam box, which looks like a slim DVD player without a slot for DVDs, is basically a smart hard disk drive that connects to your TV and receives new films every week via a small, inconspicuous indoor antenna.
Why is this significant? DeLong tells us:
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In an earlier post, I made a normative criticism of the fact that the Rambo franchise transferred more than a billion dollars from consumers to producers. (And I will now kill myself for using the pretentiously scholarly word “normative.”)
My opinion is that creation of that character and associated entertainment was not worth a billion dollars. And I think it’s OK to have this opinion because the Constitution’s copyright/patent clause calls for policy judgments about the extent and scope of intellectual property protection.
I came across some discussion today about how much money the Mozilla foundation makes off the Firefox browser. The gossip is that they made $72 million dollars. It may be more; it’s probably less. And it’s interesting that Mozilla folks come across as defensive about making money. (That’s consistent with the IPCentral theme that open source and free culture people are anti-capitalist. OK. So what? Free to be wrong.)
So, while trying to avoid one, the Mozilla folks have stumbled into a new(ish) content business model, advertising-supported software. The difficulty with this business model is that a LOT of people have to like your product, and you don’t get paid Microsoftnormous amounts of money when they use it. Sounds suspiciously like life in a . . . competitive market.
Because Mozilla is not relying on copyright, I think they’re entitled to earn based on marginal value. But I see the income from the Firefox browser as potential evidence (among much more that is needed, and not itself definitive) going to where the copyright balance should be struck when we make that policy judgment.
A who’s who of the copyright industry have submitted comments in the Librarian of Congress’s triennial review of the DMCA’s anti-circumvention provisions. In it, they argue that the Librarian shouldn’t grant any exemptions to the anti-circumvention provisions because they have done such a splendid job of stimulating the production of creative works:
The “availability for use of copyrighted works” is perhaps the most important statutory factor to be considered when assessing the impactof § 1201. The Joint Reply Commenters believe that the undeniable success of the current digital marketplace, which has given consumers of copyrighted material more choices than ever before, should weigh heavily against the recognition of any exemption in this proceeding. When the Register and the Librarian “carefully balance the availability of works for use, the effect of the prohibition on particular uses and the effect of circumvention on copyrighted works,” it will become clear that the DMCA has come a long way toward achieving its goals without burdening noninfringing uses in any significant way.
It’s certainly true that there are a lot of copyrighted materials for sale today, and that’s great. But I don’t understand what the copyright industry thinks would have happened in the absence of the DMCA. Would Disney, Paramount, Universal, et al have cut back on the number of movies and albums they produced? Would they have liquidated their assets and returned the capital to their shareholders? Would they have refused to release any content in digital formats?
Of course not, and that’s not just speculation. We know exactly what the content industry would have done if DRM technology hadn’t been available: they would have continued to sell as much content as they could, just as they do now. How do I know that? Because to this day, the recording industry sells millions of copies of new music in the DRM-free CD format.
If the music industry really believed its line that content owners will only offer their content with DRM protections, then they would have stopped selling CDs the moment DRMed formats like iTunes became widely available. But of course they didn’t, because they don’t even believe their own spin. They know perfectly well that the vast majority of their customers are honest and wouldn’t steal their music even if they had the physical capability to do so. But if they admitted that they’d continue producing content with or without DRM, it would make it much harder to pretend that they support the DMCA for the benefit of consumers.
Supporters of telecom reform got an unexpected Christmas present yesterday as Sen. Jim DeMint, a Republican from South Carolina, introduced the “Digital Age Communication Act.” If the name sounds familiar, it should–DACA is the product of a year-long effort by the Progress and Freedom Foundation to develop a free-market framework for telecom reform. DeMint’s proposal takes the parts of the PFF plan completed to date–including proposals for regulation and for universal service subsidies–and puts them into legislation.
DACA represents the work of dozens of telecom experts from academia and the think-tank world, serving on working groups covering all aspects of telecommunications policy. (I was pleased to be able to serve on two of those groups). While not all of the groups have completed their work, the product so far provides a market-oriented, yet practical, framework for reform. The core of the plan is a new approach to regulation. Instead of defining regulation by type of service (what PFF’s Randy May calls “technocentric” regulation) rules are applied based on the presence or absence of competition, using an “unfair competition” test borrowed from the Federal Trade Commission Act. Other sections of DACA would replace current universal subsidies with block grants to the states, and limit state and local regulation of telecom and cable TV services.
No one will agree with all aspects of the plan. In many areas, it could have gone further. Rather than provide “unfair competition” authority to the FCC, I would have preferred to recognize that the FTC already has such rules, apply them to telecom, and send everybody home. That said, the DACA approach is the best entrant so far in Congress’ telecom sweepstakes, showing that free-market concepts can be incorporated into practical proposals. Kudos to PFF and Sen. DeMint for taking the telecom debate a big step forward.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.