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August 24, 2012

Look and feel

Reading over the accounts of the deliberations in Apple vs Samsung, the voice I keep hearing in my head is that of Philippe Kahn, the former CEO of Borland, one of the very first personal computing software companies, founded in 1981. I hear younger folks scratching their heads at that and saying, "Who?" Until 1992 Borland was one of the top three PC software companies, dominant in areas like programming languages and compilers; it faltered when it tried to compete with Lotus (long since swallowed by IBM) and Microsoft in office suites. In 1995 Kahn was ousted, going on to found three other companies.

What Kahn's voice is saying is, "Yes, we copied."

The occasion was an interview I did with him in July 1994 for the now-defunct magazine Personal Computer World, then a monthly magazine the size of a phone book. (Oh - phone book. Let's call it two 12.1 inch laptops, stacked, OK?). Among the subjects we rambled through was the lawsuit between Borland and Lotus, one of the first to cover the question of whether and when reverse-engineering infringes copyright. After six years of litigation, the case was finally decided by the Supreme Court in 1996.

The issue was spreadsheet software; Lotus 1-2-3 was the first killer application that made people want - need - to buy PCs. When Borland released its competing Quattro Pro, the software included a mode that copied Lotus's menu structure and a function to run Lotus's macros (this was when you could still record a macro with a few easy keyboard strokes; it was only later that writing macros began to require programming skills). In the district court, Lotus successfully argued that this was copyright infringement. In contrast, Borland, which eventually won the case on appeal, argued that the menu structure constituted a system. Kahn felt so strongly about pursuing the case that he called it a crusade and the company spent tens of millions of dollars on it.

"We don't believe anyone ever organized menus because they were expressive, or because the looked good," Kahn said at the time. "Print is next to Load because of functional reasons." Expression can be copyrighted; functionality instead is patented. Secondly, he argued, "In software, innovation is driven fundamentally by compatibility and interoperability." And so companies reverse-engineer: someone goes in a room by themselves and deconstructs the software or hardware and from that produces a functional specification. The product developers then see only that specification and from it create their own implementation. I suppose a writer's equivalent might be if someone read a lot of books (or Joseph Campbell's Hero With a Thousand Faces), broke down the stories to their essential elements, and then handed out pieces of paper that specified, "Entertaining and successful story in English about an apparently ordinary guy who finds out he's special and is drawn into adventures that make him uncomfortable but change his life." Depending on whether the writer you hand that to is Neil Gaiman, JRR Tolkien, or JK Rowling, you get a completely different finished product.

The value to the public of the Lotus versus Borland decision is that it enabled standards. Imagine if every piece of software had to implement a different keystroke to summon online help, for example (or pay a license fee to use F1). Or think of the many identical commands shared among Internet Explorer, Firefox, Opera, and Chrome: would users really benefit if each browser had to be completely different, or if Mosaic had been able to copyright the lot and lock out all other comers? This was the argument that As the EFF made in its amicus brief, that allowing the first developer of a new type of software to copyright its interface could lock up that technology and its market or 75 years or more.

In the mid 1990s, Apple - in a case that, as Harvard Business Review highlights, was very similar to this one - sued Microsoft over the "look and feel" of Windows. (That took a particular kind of hubris, given that everyone knows that Apple copied what it saw at Xerox to make that interface in the first place.) Like that case (and unlike Lotus versus Borland), Apple versus Samsung revolves around patents (functionality) rather than copyright (expression). But the fundamental questions in all three cases are the same: what is a unique innovation, what builds on prior art, and what is dictated by such externalities as human anatomy and psychology and the expectations we have developed over decades of phone and computer use?

What matters to Apple and Samsung is who gets to sell what in which markets. We, however, have a lot more important skin in this game: what is the best way to foster innovation and serve consumers? In Apple's presentation on Samsung's copying, Apple makes the same tired argument as the music industry: that if others can come along and copy its work it won't have any incentive to spend five years coming up with stuff like the iPad. Really? As Allworth notes, is that what they did after losing the Microsoft case? If Apple had won then and owned the entire desktop market, do you think they'd have ever had the incentive to develop the iPad? We have to hope that copying wins.

Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.


March 30, 2012

The ghost of cash

"It's not enough to speak well of digital money," Geronimo Emili said on Wednesday. "You must also speak negatively of cash." Emili has a pretty legitimate gripe. In his home country, Italy, 30 percent of the economy is black and the gap between the amount of tax the government collects and the amount it's actually owed is €180 billion. Ouch.

This sets off a bit of inverted nationalist competition between him and the Greek lawyer Maria Giannakaki, there to explain a draft Greek law mandating direct payment of VAT from merchants' tills to eliminate fraud: which country is worse? Emili is sure it's Italy.

"We invented banks," he said. "But we love cash." Italy's cash habit costs the country €10 billion a year - and 40 percent of Europe's bank robberies.

This exchange took place at this year's Digital Money Forum, an annual event that pulls together people interested in everything from the latest mobile technology to the history of Anglo-Saxon coinage. Their shared common interest: what makes money work? If you, like most of this group, want to see physical cash eliminated, this is the key question.

Why Anglo-Saxon coinage? Rory Naismith explains that the 8th century began the shift from valuing coins merely for their metal content and assigning them a premium for their official status. It was the beginning of the abstraction of money: coins, paper, the elimination of the gold standard, numbers in cyberspace. Now, people like Emili and this event's convenor, David Birch, argue it's time to accept money's fully abstract nature and admit the truth: it's a collective hallucination, a "promise of a promise".

These are not just the ravings of hungry technology vendors: Birch, Emili, and others argue that the costs of cash fall disproportionately on the world's poor, and that cash is the key vector for crime and tax evasion. Our impressions of the costs are distorted because the costs of electronic payments, credit cards, and mobile wallets are transparent, while cash is free at the point of use.

When I say to Birch that eliminating cash also means eliminating the ability to transact anonymously, he says, "That's a different conversation." But it isn't, if eliminating crime and tax evasion are your drivers. In the two days only Bitcoin offers anonymity, but it's doomed to its niche market, for whatever reason. (I think it's too complicated; Dutch financial historian Simon Lelieveldt says it will fail because it has no central bank.)

I pause to be annoyed by the claim that cash is filthy and spreads disease. This is Microsoft-level FUD, and not worthy of smart people claiming to want to benefit the poor and eliminate crime. In fact, I got riled enough to offer to lick any currency (or coins; I'm not proud) presented. I performed as promised on a fiver and a Danish note. And you know, they *kept* that money?

In 1680, says Birch, "Pre-industrial money was failing to serve an industrial revolution." Now, he is convinced, "We are in the early part of the post-industrial revolution, and we're shoehorning industrial money in to fit it. It can't last." This is pretty much what John Perry Barlow said about copyright in 1993, and he was certainly right.

But is Birch right? What kind of medium is cash? Is it a medium of exchange, like newspapers, trading stored value instead of information, or is it a format, like video tape? If it's the former, why shouldn't cash survive, even if only as a niche market? Media rarely die altogether - but formats come and go with such speed that even the more extreme predictions at this event - such as Sandra Alzetta, who said that her company expects half its transactions to be mobile by 2020 -seem quite modest. Her company is Visa International, by the way.

I'd say cash is a medium of exchange, and today's coins and notes are its format. Past formats have included shells, feathers, gold coins, and goats; what about a format for tomorrow that printed or minted on demand, at ATMs? I ask the owner of the grocery shop around the corner if his life would be better if cash were eliminated, and he shrugs no. "I'd still have to go out and get the stuff."

What's needed is low-cost alternatives that fit in cultural contexts. Lydia Howland, whose organization IDEO works to create human-centered solutions to poverty, finds the same needs in parts of Britain that exist in countries like Kenya, where M-Pesa is succeeding in bringing access to banking and remote payments to people who have never had access to financial services before.

"Poor people are concerned about privacy," she said on Wednesday. "But they have so much anonymity in their lives that they pay a premium for every financial service." Also, because they do so much offline, there is little understanding of how they work or live. "We need to create a society where a much bigger base has a voice."

During a break, I try to sketch the characteristics of a perfect payment mechanism: convenient; transparent to the user; universally accepted; universally accessible and usable; resistant to tracking, theft, counterfeiting, and malware; and hard to steal on a large scale. We aren't there yet.

Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.

September 30, 2011

Trust exercise

When do we need our identity to be authenticated? Who should provide the service? Whom do we trust? And, to make it sustainable, what is the business model?

These questions have been debated ever since the early 1990s, when the Internet and the technology needed to enable the widespread use of strong cryptography arrived more or less simultaneously. Answering them is a genuinely hard problem (or it wouldn't be taking so long).

A key principle that emerged from the crypto-dominated discussions of the mid-1990s is that authentication mechanisms should be role-based and limited by "need to know"; information would be selectively unlocked and in the user's control. The policeman stopping my car at night needs to check my blood alcohol level and the validity of my driver's license, car registration, and insurance - but does not need to know where I live unless I'm in violation of one of those rules. Cryptography, properly deployed, can be used to protect my information, authenticate the policeman, and then authenticate the violation result that unlocks more data.

Today's stored-value cards - London's Oyster travel card, or Starbucks' payment/wifi cards - when used anonymously do capture some of what the crypto folks had in mind. But the crypto folks also imagined that anonymous digital cash or identification systems could be supported by selling standalone products people installed. This turned out to be wholly wrong: many tried, all failed. Which leads to today, where banks, telcos, and technology companies are all trying to figure out who can win the pool by becoming the gatekeeper - our proxy. We want convenience, security, and privacy, probably in that order; they want security and market acceptance, also probably in that order.

The assumption is we'll need that proxy because large institutions - banks, governments, companies - are still hung up on identity. So although the question should be whom do we - consumers and citizens - trust, the question that ultimately matters is whom do *they* trust? We know they don't trust *us*. So will it be mobile phones, those handy devices in everyone's pockets that are online all the time? Banks? Technology companies? Google has launched Google Wallet, and Facebook has grand aspirations for its single sign-on.

This was exactly the question Barclaycard's Tom Gregory asked at this week's Centre for the Study of Financial Innovation round-table discussion (PDF) . It was, of course, a trick, but he got the answer he wanted: out of banks, technology companies, and mobile network operators, most people picked banks. Immediate flashback.

The government representatives who attended Privacy International's 1997 Scrambling for Safety meeting assumed that people trusted banks and that therefore they should be the Trusted Third Parties providing key escrow. Brilliant! It was instantly clear that the people who attended those meetings didn't trust their banks as much as all that.

One key issue is that, as Simon Deane-Johns writes in his blog posting about the same event, "identity" is not a single, static thing; it is dynamic and shifts constantly as we add to the collection of behaviors and data representing it.

As long as we equate "identity" with "a person's name" we're in the same kind of trouble the travel security agencies are when they try to predict who will become a terrorist on a particular flight. Like the browser fingerprint, we are more uniquely identifiable by the collection of our behaviors than we are by our names, as detectives who search for missing persons know. The target changes his name, his jobs, his home, and his wife - but if his obsession is chasing after trout he's still got a fishing license. Even if a link between a Starbucks card and its holder's real-world name is never formed, the more data the card's use enters into the system the more clearly recognizable as an individual he will be. The exact tag really doesn't matter in terms of understanding his established identity.

What I like about Deane-Johns' idea -

the solution has to involve the capability to generate a unique and momentary proof of identity by reference to a broad array of data generated by our own activity, on the fly, which is then useless and can be safely discarded"

is two things. First, it has potential as a way to make impersonation and identity fraud much harder. Second is that implicit in it is the possibility of two-way authentication, something we've clearly needed for years. Every large organization still behaves as though its identity is beyond question whereas we - consumers, citizens, employees - need to be thoroughly checked. Any identity infrastructure that is going to be robust in the future must be built on the understanding that with today's technology anyone and anything can be impersonated.

As an aside, it was remarkable how many people at this week's meeting were more concerned about having their Gmail accounts hacked than their bank accounts. My reasoning is that the stakes are higher: I'd rather lose my email reputation than my house.. Their reasoning is that the banking industry is more responsive to customer problems than technology companies. That truly represents a shift from 1997, when technology companies were smaller and more responsive.

More to come on these discussions...


Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.

September 23, 2011

Your grandmother's phone

In my early 20s I had a friend who was an expert at driving cars with...let's call them quirks. If he had to turn the steering wheel 15 degrees to the right to keep the car going straight while peering between smears left by the windshield wipers and pressing just the exact right amount on the brake pedal, no problem. This is the beauty of humans: we are adaptable. That characteristic has made us the dominant species on the planet, since we can adapt to changes of habitat, food sources, climate (within reason), and cohorts. We also adapt to our tools, which is why technology designers get away with flaws like the iPhone's "death grip". We don't like it - but we can deal with it.

At least, we can deal with it when we know what's going on. At this week's Senior Market Mobile, the image that stuck in everyone's mind came early in the day, when Cambridge researchers Ian Hosking and Mike Bradley played a video clip of a 78-year-old woman trying to figure out how to get past an iPad's locked screen. Was it her fault that it seemed logical to her to hold it in one hand while jabbing at it in frustration? As Donald Norman wrote 20 years ago, for an interface to be intuitive it has to match the user's mental model of how it works.

That 78-year-old's difficulties, when compared with the glowing story of the 100-year-old who bonded instantly with her iPad, make another point: age is only one aspect of a person's existence - and one whose relevance they may reject. If you're having trouble reading small type or remembering the menu layout, pushing the buttons, or hearing a phone call what matters isn't that you're old but that you have vision impairment, cognitive difficulties, less dextrous fingers, or hearing loss. You don't have to be old to have any of those things - and not all old people have them.

For those reasons, the design decisions intended to aid seniors - who, my God, are defined as anyone over 55! - aid many other people too. All of these points were made with clarity by Mark Beasley, whose company specializes in marketing to seniors - you know, people who, unlike predominantly 30-something designers and marketers, don't think they're old and who resent being lumped together with a load of others with very different needs on the basis of age. And who think it's not uncool to be over 50. (How ironic, considering that when the Baby Boomers were 18 they minted the slogan, "Never trust anyone over 30.")

Besides physical attributes and capabilities, cultural aspects matter more in a target audience's than their age per se. We who learned to type on manual typewriters bash keyboards a lot harder than those who grew up with computers. Those who grew up with the phone grudgingly sited in the hallway, using it only for the briefest of conversations are less likely to be geared toward settling in for a long, loud intimate conversation on a public street.

Last year at this event, Mobile Industry Review editor Ewan McLeod lambasted the industry because even the iPhone did not effectively serve his parents' greatest need: an easy way to receive and enjoy pictures of their grandkids. This year, Stuart Arnott showed off a partial answer, Mindings, a free app for Android tablets that turns them into smart display frames. You can send them pictures or text messages or, in Arnott's example, a reminder to take medication that, when acknowledged by a touch goes on to display the picture or message the owner really wants to see.

Another project in progress, Threedom is an attempt to create an Android design with only three buttons that uses big icons and type to provide all the same functionality but very simply.

The problem with all of this - which Arnott seems to have grasped with Mindings - is that so much of these discussions focus on the mobile phone as a device in isolation. But that's not really learning the lesson of the iPod/iPhone/iPad, which is that what matters is the ecology surrounding the device. It is true that a proportion of today's elderly do not use computers or understand why they suddenly need a mobile phone. But tomorrow's elderly will be radically different. Depending on class and profession, people who are 60 now are likely to have spent many years of his working life using computers and mobile phones. When they reach 86, what will dictate their choice of phone will be only partly whatever impairments age may bring. A much bigger issue is going to be the legacy and other systems that the phone has to work with: implantable electronic medical devices, smart electrical meters, ancient software in use because it's familiar (and has too much data locked inside it), maybe even that smart house they keep telling us we're going to have one of these days. Those phones are going to have to do a lot more than just make it easy to call your son.

Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.

April 22, 2011

Applesauce

Modern life is full of so many moments when you see an apparently perfectly normal person doing something that not so long ago was the clear sign of a crazy person. They're walking down the street talking to themselves? They're *on the phone*. They think the inanimate objects in their lives are spying on them? They may be *right*.

Last week's net.wars ("The open zone") talked about the difficulty of finding the balance between usability, on the one hand, and giving users choice, flexibility, and control, on the other. And then, as if to prove this point, along comes Apple and the news that the iPhone has been storing users' location data, perhaps permanently.

The story emerged this week when two researchers presenting at O'Reilly's Where 2.0 conference presented an open-source utility they'd written to allow users to get a look at the data the iPhone was saving. But it really begins last year, when Alex Levinson discovered the stored location data as part of his research on Apple forensics. Based on his months of studying the matter, Levinson contends that it's incorrect to say that Apple is gathering this data: rather, the device is gathering the data, storing it, and backing it up when you sync your phone. Of course, if you sync your phone to Apple's servers, then the data is transferred to your account - and it is also migrated when you purchase a new iPhone or iPad.

So the news is not quite as bad as it first sounded: your device is spying on you, but it's not telling anybody. However: the data is held in unencrypted form and appears never to expire, and this raises a whole new set of risks about the devices that no one had really focused on until now.

A few minutes after the story broke, someone posted on Twitter that they wondered how many lawyers handling divorce cases were suddenly drafting subpoenas for copies of this file from their soon-to-be-exes' iPhones. Good question (although I'd have phrased it instead as how many script ideas the wonderful, tech-savvy writers of The Good Wife are pitching involving forensically recovered location data). That is definitely one sort of risk; another, ZDNet's Adrian Kingsley-Hughes points out is that the geolocation may be wildly inaccurate, creating a false picture that may still be very difficult to explain, either to a spouse or to law enforcement, who, as Declan McCullagh writes know about and are increasingly interested in accessing this data.

There are a bunch of other obvious privacy things to say about this, and Privacy International has helpfully said them in an open letter to Steve Jobs.

"Companies need openness and procedures," PI's executive director, Simon Davies, said yesterday, comparing Apple's position today to Google's a couple of months before the WiFi data-sniffing scandal.

The reason, I suspect, that so many iPhone users feel so shocked and betrayed is that Apple's attention to the details of glossy industrial design and easy-to-understand user interfaces leads consumers to cuddle up to Apple in a way they don't to Microsoft or Google. I doubt Google will get nearly as much anger directed at it for the news that Android phones also collect location data (the Android saves only the last 50 mobile masts and 200 WiFi networks). In either event, the key is transparency: when you post information on Twitter or Facebook about your location or turn on geo-tagging you know you're doing it. In this case, the choice is not clear enough for users to understand what they've agreed to.

The question is: how best can consumers be enabled to make informed decisions? Apple's current method - putting a note saying "Beware of the leopard" at the end of a 15,200-word set of terms and conditions (which are in any case drafted by the company's lawyer to protect the company, not to serve consumers) that users agree to when they sign up for iTunes - is clearly inadequate. It's been shown over and over again that consumers hate reading privacy policies, and you have only to look at Facebook's fumbling attempts to embed these choices in a comprehensible interface to realize that the task is genuinely difficult. This is especially true because, unlike the issue of user-unfriendly sysstems in the early 1990s, it's not particularly in any of these companies' interests to solve this intransigent and therefore expensive problem. Make it easy for consumers to opt out and they will, hardly an appetizing proposition for companies supported in whole or in part by advertising.

The answer to the question, therefore, is going to involve a number of prongs: user interface design, regulation, contract law, and industry standards, both technical and practical. The key notion, however, is that it should be feasible - even easy - for consumers to tell what information gathering they're consenting to. The most transparent way of handling that is to make opting out the default, so that consumers must take a positive action to turn these things on.

You can say - as many have - that this particular scandal is overblown. But we're going to keep seeing dust-ups like this until industry practice changes to reflect our expectations. Apple, so sensitive to the details of industrial design that will compel people to yearn to buy its products, will have to develop equal sensitivity for privacy by design.


Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.

July 9, 2010

The big button caper

There's a moment early in the second season of the TV series Mad Men when one of the Sterling Cooper advertising executives looks out the window and notices, in a tone of amazement, that young people are everywhere. What he was seeing was, of course, the effect of the baby boom. The world really *was* full of young people.

"I never noticed it," I said to a friend the next day.

"Well, of course not," he said. "You were one of them."

Something like this will happen to today's children - they're going to wake up one day and think the world is awash in old people. This is a fairly obvious consequence of the demographic bulge of the Baby Boomers, which author Ken Dychtwald has compared to "a pig going through a python".

You would think that mobile phone manufacturers and network operators would be all over this: carrying a mobile phone is an obvious safety measure for an older, perhaps infirm or cognitively confused person. But apparently the concept is more difficult to grasp than you'd expect, and so Simon Rockman, the founder and former publisher of What Mobile and now working for the GSM Association, convened a senior mobile market conference on Tuesday.

Rockman's pitch is that the senior market is a business opportunity: unlike other market sectors it's not saturated; older users are less likely to be expensive data users and more loyal. The margins are better, he argues, even if average revenue per user is low.

The question is, how do you appeal to this market? To a large extent, seniors are pretty much like everyone else: they want gadgets that are attractive, even cool. They don't want the phone equivalent of support stockings. Still, many older people do have difficulties with today's ultra-tiny buttons, icons, and screens, iffy sound quality, and complex menu structures. Don't we all?

It took Ewan MacLeod, the editor of Mobile Industry Review to point out the obvious. What is the killer app for most seniors in any device? Grandchildren, pictures of. MacLeod has a four-week-old son and a mother whose desire to see pictures apparently could only be fully satisfied by a 24-hour video feed. Industry inadequacy means that MacLeod is finding it necessary to write his own app to make sending and receiving pictures sufficiently simple and intuitive. This market, he pointed out, isn't even price-sensitive. Tell his mother she'll need to spend £60 on a device so she can see daily pictures of her grandkids, and she'll say, "OK." Tell her it will cost £500, and she'll say..."OK."

I bet you're thinking, "But the iPhone!" And to some extent you're right: the iPhone is sleek, sexy, modern, and appealing; it has a zoom function to enlarge its display fonts, and it is relatively easy to use. And so MacLeod got all the grandparents onto iPhones. But he's having to write his own app to easily organize and display the photos the phones receive: the available options are "Rubbish!"

But even the iPhone has problems (even if you're not left-handed). Ian Hosking, a senior research associate at the Cambridge Engineering Design Centre, overlaid his visual impairment simulation software so it was easy to see. Lack of contrast means the iPhone's white on black type disappears unreadably with only a small amount of vision loss. Enlarging the font only changes the text in some fields. And that zoom feature, ah, yes, wonderful - except that enabling it requires you to double-tap and then navigate with three fingers. "So the visual has improved, but the dexterity is terrible."

Oops.

In all this you may have noticed something: that good design is good design, and a phone design that accommodates older people will also most likely be a more usable phone for everyone else. These are principles that have not changed since Donald Norman formulated them in his classic 1998 book The Design of Everyday Things. To be sure there is some progress. Evelyne Pupeter-Fellner, co-founder of Emporia, for example, pointed out the elements of her company's designs that are quietly targeted at seniors: the emergency call system that automatically dials, in turn, a list of selected family members or friends until one answers; the ringing mechanism that lights up the button to press to answer. The radio you can insert the phone into that will turn itself down and answer the phone when it rings. The design that lets you attach it to a walker - or a bicycle. The single-function buttons. Similarly, the Doro was praised.

And yet it could all be so different - if we would only learn from Japan, where nearly 86 percent of seniors have - and use data on - mobile phones, according to Kei Shimada, founder of Infinita.

But in all the "beyond big buttons" discussion and David Doherty's proposition that health applications will be the second killer app, one omission niggled: the aging population is predominantly female, and the older the cohort the more that is true.

Who are least represented among technology designers and developers?

Older women.

I'd call that a pretty clear mismatch. Somewhere between we who design and they who consume is your problem.

Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.

July 2, 2010

Pay per view

There are journalists who make money, but not many and not often. Newspaper owners, however, have traditionally been in better shape, as the cynical, experienced reporter Richard Wagner observes in Tom Stoppard's 1978 play Night and Day, "We're working to keep richer men than us richer than us." (He is, of course, countered later in the play by the photographer George Guthrie, who marks his final exit with, "Information, in itself, about anything, is light.")

But we live in strange and disturbing times, and the question of how to stay richer than journalists has been exercising a lot of newspaper owners lately. With advertising revenues dropping, circulation dropping, classifieds vanishing online, and online readership proving less profitable, clearly something has to give. In October, the Evening Standard began giving away its print run, right around the same time that Rupert Murdoch announced he would begin charging online readers.

Well, today's the day: as of this morning The Times is behind a paywall. You can read the front page, but click on a story and you're asked to pay £1 for 24-hour access or pay £1 for a 30-day trial after which you pay £2 a week. The paper's articles have already been blocked from appearing on Google News for more than a month. The joint effect, as Search Engine Watch memorably says, is that Rupert Murdoch has turned The Times into a newsletter.

Based on the figures SEW cites from Hitwise and if the trend continues, that's about right.

Although paywalls - or, in Variety's case, a velvet rope - are the fashionable must-have for newspapers in 2010 that portals were to ISPs in 1995, they're not a new concept. People have been trying paywalls for years; they've been going up and down as often as the proverbial whore's knickers.

I think the first was either Slate (dropped after a year or few) or the New York Times, more than 15 years ago. The latter's paywall had a twist: the site was free to US residents but international readers had to pay - the justification was that advertisers weren't interested in paying to reach non-US readers. It came down with the rise of the search engines; a few years ago the paper tried charging for its star colunnists' output (thereby marginalizing them), and now plans a new paywall structure for next year, although people arriving at stories by following links from other sites will still have free access. Nieman Labs has an interesting game to let you try the effect on revenues of varying subscriber levels.

Long before Murdoch's acquisition, the Wall Street Journal was also an early paywall adopter - with some, unusual, success, although as time has gone on more and more of the paper has been freely accessible online.

Murdoch is likely to be about to discover that his newspapers are not exempt from what many other newspapers and weeklies have already found out: the subscriber numbers are, in general, awful to terrible.

The key contrast here is with the Guardian, which is willing - and able because of its ownership by a trust - to measure its success in influence as well as money. Editor Alan Rusbridger, outlined in January the extent to which the Internet has made the paper a global voice.

The answer to the question of what people will pay for seems to me straightforward: people will pay, even online, for publications that save them time, save them money, or provide information they have to have that they can't easily get elsewhere. People will not, particularly in this economic climate with so many other things clamoring for their limited financial resources, pay for things that are easily replaced with free content. It's unsurprising that the business and financial papers have had the longest and most successful paywall runs: their constituency had to read them (and could expense or tax-deduct them), and it took their subscribers a long time to recognize how much of their information had become directly available. In the 1980s, subscribing to Standard & Poor's quarterly reports on ten companies cost something like $250 a year; today, you can get more detailed information than that service provided daily for free.

In the US, what's happened to newspapers seems to me a direct consequence of chain ownership and Clear Channel thinking: dropping local news and commentary in favor of national wire service stories seems doomed to make your paper interchangeable with Google News. In the UK, the situation seems more simply one of changing business models, and in my view Rusbridger's entangle-yourself-in-the-Net approach is the preferable one, certainly so if you see journalism as a more than just a product.

But as much as I hate paywalls - and I think if they become widespread they will pose a serious problem for the economic viability of freelance writing - I have to hope that they succeed at least partially. Because if they don't, then the only sources of income for journalism will be advertising, sponsorship, and patronage (in which I'm including bloggers whose day jobs support their blogging habit). To get a full range of voices and stories you need a balance of financial and commercial pressures. And advertising support can be even more fragile than fickle consumers who abandon their newspapers for quick scans of Google News and their RSS feeds.


Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.

March 12, 2010

The cost of money

Everyone except James Allan scrabbled in the bag Joe DiVanna brought with him to the Digital Money Forum (my share: a well-rubbed 1908 copper penny). To be fair, Allan had already left by then. But even if he hadn't he'd have disdained the bag. I offered him my pocketful of medium-sized change and he looked as disgusted as if it were a handkerchief full of snot. That's what living without cash for two years will do to you.

Listen, buddy, like the great George Carlin said, your immune system needs practice.

People in developed countries talk a good game about doing away with cash in favor of credit cards, debit cards, and Oyster cards, but the reality, as Michael Salmony pointed out, is that 80 percent of payments in Europe are...cash. Cash seems free to consumers (where cards have clearer charges), but costs European banks €84 billion a year. Less visibly banks also benefit (when the shadow economy hoards high-value notes it's an interest-free loan), and governments profit from Seigniorage (when people buy but do not spend coins).

"Any survey about payment methods," Salmony said Wednesday, "reveals that in all categories cash is the preferred payment method." You can buy a carrot or a car; it costs you nothing directly; it's anonymous, fast, and efficient. "If you talk directly to supermarkets, they all agree that cash is brilliant - they have sorting machines, counting machines...It's optimized so well, much better than cards."

The "unbanked", of course, such as the London migrants Kavita Datta studies, have no other options. Talk about the digital divide, this is the digital money divide: the cashless society excludes people who can't show passports, can't prove their address, or are too poor to have anything to bank with.

"You can get a job without a visa, but not without a bank account," one migrant worker told her. Electronic payments, ain't they grand?

But go to Africa, Asia, or South America, and everything turns upside down. There, too, cash is king - but there, unlike here with banks and ATMs on every corner and a fully functioning system of credit cards and other substitutes, cash is a terrible burden. Of the 2.6 billion people living on less than $2 a day, said Ignacio Mas, fewer than 10 percent have access to formal financial services. Poor people do save, he said, but their lack of good options means they save in bad ways.

They may not have banks, but most do have mobile phones, and therefore digital money means no long multi-bus rides to pay bills. It means being able to send money home at low cost. It means saving money that can't be easily stolen. In Ghana 80 percent of the population have no access to financial services - but 80 percent are covered by MTN, which is partnering with the banks to fill the gap. In Pakistan, Tameer Microfinance Bank partnered with Telenor to launch Easy-Peisa, which did 150,000 transactions its first month and expects a million by December. One million people produce milk in Pakistan; Nestle pays them all painfully by check every month. The opportunity in these countries to leapfrog traditional banking and head into digital payments is staggering, and our banks won't even care. The average account balance of customers for Kenya's M-Pesa customers is...$3.

When we're not destroying our financial system, we have more choices. If we're going to replace cash, what do we replace it with and what do we need? Really smart people to figure out how to do it right - like Isaac Newton, said Thomas Levenson. (Really. Who knew Isaac Newton had a whole other life chasing counterfeiters?) Law and partnership protocols and banks to become service providers for peer-to-peer finance, said Chris Cook. "An iTunes moment," said Andrew Curry. The democratization of money, suggested conference organizer David Birch.

"If money is electronic and cashless, what difference does it make what currency we use?" Why not...kilowatt hours? You're always going to need to heat your house. Global warming doesn't mean never having to say you're cold.

Personally, I always thought that if our society completely collapsed, it would be an excellent idea to have a stash of cigarettes, chocolate, booze, and toilet paper. But these guys seemed more interested in the notion of Facebook units. Well, why not? A currency can be anything. Second Life has Linden dollars, and people sell virtual game world gold for real money on eBay.

I'd say for the same reason that most people still walk around with notes in their wallet and coins in their pocket: we need to take our increasing abstraction step by step. Many have failed with digital cash, despite excellent technology, because they asked people to put "real" money into strange units with no social meaning and no stored trust. Birch is right: storing value in an Oyster card is no different than storing value in Beenz. But if you say that money is now so abstract that it's a collective hallucination, then the corroborative details that give artistic verisimilitude to an otherwise bald and unconvincing currency really matter.

Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of the earlier columns in this series.

February 14, 2009

The Gattaca in Gossip Girl

Spotted: net.wars obsessing over Gossip Girl instead of diligently reading up on the state of the data retention directive's UK implementation.

It's the cell phones. The central conceit of the show and the books that inspired it is this: an unseen single-person Greek (voiced by Kristen Bell in a sort of cross between her character on Veronica Mars and Christina Ricci's cynical, manipulative trouble-maker in The Opposite of Sex) chorus of unknown identity publishes - to the Web and by blast to subscribers' cell phones - tips and rumors about "the scandalous lives of Manhattan's elite".

The Upper East Siders she? reports on are, of course, the private high school teens whose centrally planned destiny is to inherit their parents' wealth, power, social circles, and Ivy League educations. These are teens under acute pressure to perform as expected, and in between obsessing about whether they can get into Yale (played on-screen by Columbia), they blow off steam by throwing insanely expensive parties, drinking, sexing, and scheming. All, of course, in expensive designer clothes and bearing the most character and product-placement driven selection of phones ever seen on screen.

Most of the plots are, of course, nonsense. The New Yorker more or less hated it on sight. Also my first reaction: I went, not to the school the books' author, Cecily von Ziegesar, did, but to one in the same class 25 years earlier and then to an Ivy League school. One of my closest high school friends grew up in - and his parents still live at - the building the inhabited in the series by teen queen Blair Waldorf. So I can assess the show's unreality firsthand. So can lots of other New Yorkers who are equally obsessed with the show: the New York Magazine runs a hysterically funny reality index recap of each episode of "the Greatest Show of Our Time", followed by a recap of the many comments.

But we never had the phones! Pink and flip, slider and black, Blackberries, red, gold, and silver phones! Behind the trashy drama portraying the ultra rich as self-important, stressed-out, miserable, self-absorbed, and mean is a fictional exploration of what life is like under constant surveillance by your peers.

Over the year and a half of the show's run - SPOILER ALERT - all sorts of private secrets have been outed on Gossip Girl via importunate camera phone and text message. Serena is spotted buying a pregnancy test (causing panic in at least two households); four characters are revealed at a party full of agog subscribers to be linked by a half-sibling they didn't know they had until the blast went out; and of course everyone is photographed kissing (or worse) the wrong person at some point. Exposure via Gossip Girl is also handy for blackmail (Blair), pre-emption (Chuck), lovesick yearning (Dan), and outing his sister's gay boyfriend (Dan).

"If you're sending tips to Gossip Girl, you're in the game with the rest of us," Jenny tells Dan, who had assumed his own moral superiority.

A lot of privacy advocates express concern that today's "digital natives" don't care about privacy, or at least, don't understand the potential consequences to their future job and education prospects of the decisions they make when they post the intimate details of their lives online. In fact, when this generation grows up they'll all be in the same boat, exposure wise.. Both in reality and in this fiction, the case is as it's usually been, that teens don't fear each other; they collude as allies to exclude their parents. That trope, too, is perfectly played on the show when Blair (again!) gets rid of a sociopathic interloper by going over the garden wall and calling her parents. This is not the world of David Brin's The Transparent Society, after all; the teens surveille each other but catch adults only by accident, though they take full advantage when they do.

"Gossip Girl...is how we communicate," Blair says, trying to make one of her many vendettas seem normal.

Privacy advocates also often stress that surveillance chills spontaneous behaviour. Not here, or at least not yet. Instead, the characters manipulate and expose, then anguish when it happens to them. A few become inured.

Says Serena, trying to comfort Rachel Carr, the first teacher to be so exposed: "I've been on Gossip Girl plenty of times and for the worst things...eventually everyone forgets. The best thing to do with these things is nothing at all,"

Phones and Gossip Girl are not the only mechanisms by which the show's characters spy on and out each other. They use all the more traditional media, too - in-person interaction, mistaken identity (a masked ball!), rifling through each other's belongings, stolen phones, eavesdropping, accident, and, of course, the gossip pages of the New York press.

"It's anonymous, so no one really knows," Serena says, when asked who is behind the site. But she and all the others do know: the tips come from each other and from the nameless other students they ignore in the background. Gossip Girl merely forwards them, with commentary in her own style:

You know you love me.

XOXO,
Net.wars

Wendy M. Grossman's Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series. Readers are welcome to post here, at net.wars home, at her personal blog, or by email to netwars@skeptic.demon.co.uk (but please turn off HTML).

March 23, 2007

Double the networks, double the neutralities

Back in 1975, the Ithaca, New York apartment building I was living in had a fire in the basement, and by the time it was out so was my telephone line. The repairman's very first move was to disconnect the $3 30-foot cable I had bought at K-Mart and confiscate it. At the time, AT&T's similar cable cost $25.

In fact, by then AT&T had no right to control what equipment you attached to your phone line because of the Carterfone case, in which the FCC ruled against AT&T's argument that it had to own all the equipment in order to ensure that the network would function properly. But this is how the telco world worked; in Edinburgh in 1983 legally you could only buy a modem from British Telecom. I think it cost about £300 – for 300 baud. Expensive enough that I didn't get online until 1990.

Stories like this are part of why the Internet developed the way it did: the pioneers were determined to avoid a situation where the Internet was controlled like this. In the early 1980s, when the first backbone was being build in the US to connect the five NSF-funded regional computing centers, the feeling was mutual. John Connolly, who wrote the checks for a lot of that work, told me in an interview in 1993 that they had endless meetings with the telcos trying to get them interested, but those companies just couldn't see that there was any money in the Internet.
Well, now here we are, and the Internet is chewing up the telcos' business models and creating havoc for the cable companies who were supposed to be the beneficiaries, and so it's not surprising that the telcos' one wish is to transform the Internet into something more closely approximating the controlled world they used to love.

Which is how we arrived at the issue known as network neutrality. This particular debate has been percolating in the US for at least a year now, and some discussion is beginning in the UK. This week, at a forum held in Westminster on the subject, Ofcom and the DTI said the existing regulatory framework was sufficient.

The basic issue is, of course, money. The traditional telcos are not, of course, having a very good time of things, and it was inevitable that it would occur to some bright CEO – it turned out to be the head of Verizon – that there ought to be some way of "monetizing" all those millions of people going to Google, Yahoo!, and the other top sites. Why not charge a fee to give priority service? That this would also allow the telcos to discriminate against competitor VOIP services and the cablecos (chiefly Comcast) to discrminate against competing online video services is also a plus. These proposals are opposed not only by the big sites in question but by the usual collection of Net rights organization, who tend to believe all sites were created equal – or should be.
Ofcom – and others I've talked to – believes that the situation in the UK is different, in part because although most of the nation's DSL service is provided either directly or indirectly by BT that company has to be cooperative with its competitors or face the threat of regulation. The EU, however, is beginning to take a greater interest in these matters, and has begun legal proceedings against Germany over a law exempting Deutsche Telecom from opening the local loop of its new VDSL network to competitors.

But Timothy Wu, a law professor at Columbia and author of Who Controls the Internet: Illusions of a Borderless World, has pointed out that the current debates are ignoring an important sector of the market: wireless. The mobile market is not now, nor ever has been, neutral. It is less closed in Europe, where you can at least buy a phone and stick any SIM in it; but in the US most phones are hardware-locked to their networks, a situation that could hardly be less consumer-friendly. Apple's new iPod, for example, will be available through only one carrier, AT&T Wireless.

Wu's paper, along with the so-called "Carterfone" decision that forced AT&T to stop confiscating people's phone cords, is cited by Skype in a petition to get the FCC to require mobile phone operators to allow software applications open access. Skype's gripe is easy to comprehend: it can't get its service onto mobile phones. The operators' lack of interest in opening their networks is also easy to comprehend: what consumer is going to call on their expensive tariffs if they can use the Internet data connection to make cheap ones? Wu also documents other cases of features that are added or subtracted according to the network operators' demands: call timers (missing), wi-fi (largely absent), and Bluetooth (often crippled in the US).

The upshot is that because the two markets – wireless phones and the Internet – have developed from opposite directions, we have two network neutrality debates, not one. The wonder is that it took us so long to notice.

Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series. Readers are welcome to post here, at net.wars home, at her personal blog, or by email to netwars@skeptic.demon.co.uk (but please turn off HTML).

January 12, 2007

iPhone, schmiPhone

It's pretty. It's very pretty. But it isn't going to change the world, and worse, it has an ugly parent. Not Apple, *Cingular*.

Long-time readers of this column may remember the worst customer experience of my life as a prepaid customer of AT&T Wireless. That company was, sometime last year, subsumed into Cingular, which a few weeks ago announced we had to move to new Cingular accounts. And get new phones.

You could ask why: the old phones worked on GSM. Anyway, the good news was that the company was willing to transfer any outstanding account balance, which in my case was two refill cards I'd bought ("They'll always be good") on the advice of AT&T Wireless itself as a backup in case of refill troubles. I called them in. Balance never showed up. Phoned Cingular: "Those expired." She seemed surprised it didn't occur to me they would. The "special deal": $40 for the new phone and get some of it back as a rebate. If you want any other phone, you can pay "full retail".

"Can you see any reason why I shouldn't change supplier?" I asked the customer-we-don't-give-a-fuck representative. She told me to visit a corporate store and "maybe they can do something for you."
Cingular's parents, Bellsouth and AT&T, are getting married now – pieces of the pre-1984 AT&T are melting and running together like the frozen, shattered shards of the liquid metal man in Terminator 2. This time next year, Cingular will have been renamed…AT&T Wireless.

This is the company that Americans desiring to own an Apple iPhone (if it's called that, by then, given that within 24 hours Cisco had sued over the trademark) will have to sign up with for two years at a probable minimum of $80 a month. Ick. The US has gotten the consumer protection angle of the cell phone business half right by making phone numbers portable. It needs to do the other half to really open up the market: stop this silly business of locking customers and their phones to one service provider. (It's unknown how the iPhone will be marketed in Europe, where customers have more choice about which phone they want to use with which operator.)

So many mobile phones are sold every week that you don't need much of a percentage to sell a lot of units. But watching Jobs and the other demonstrators show off the new device makes you wonder about what demographic the idesigners were aiming at. At $599 for 8Gb with that two-year contract (more expensive than some widescreen laptops), it's expensive for anybody. Scrolling through contacts is likely to be too unwieldy for power users – it's quicker to type in a couple of letters once you get above a few hundred contacts. As Jack Schofield points out, many people prefer to operate their phones one-handed, which the iPhone doesn't seem designed for.

And what about text messaging? As bad as it is typing on a number pad, doing it on a soft keyboard on a touch screen with no tactile feedback has to be worse. The phone also looks useless without a headset and insufficiently protected against the abuse most phones go through. I also really wonder how the iPhone will hold up to the stickiness and mess that gets on people's fingers – it's one thing not to have to use a stylus, another not to have the option. CNet's Declan McCullough asked this same question and was told the screen is designed to be easy to clean and relatively resistant to smudges.

But these usability questions are essentially personal quibbles. People talk about the fashion consciousness that has Europeans changing phones every 18 months to get the latest, whizziest models (a market created, incidentally, by the fact that you can move your SIM to any unlocked phone at will). But they forget: underpinning that is the fact that the underlying technology has been changing so fast, in the last ten years going from analog to digital, adding GPRS, 3G, Bluetooth, audio, colour screens, memory, storage, cameras of increasing resolution, and wi-fi. People haven't been buying new phones just because this year's color is chartreuse. If there's a part of the market that's underserved, it's the people who want their phones to be just phones with buttons big enough for their fingers to push. The iPhone is too expensive to use for only 18 months; and yet it reportedly won't allow expansion to respond to new trends such as VoIP (perhaps a consequence of partnering with Cingular).

The bigger issue is the behind-the-scenes stuff that's much harder to demonstrate dramatically. Smartphones live and die by their ability to synchronize data; one of the most appealing factors about the Palm, even now, is that you can hook a blank device to your computer and five minutes later have all the data you had on your previous device. Similarly, the real innovation in the iPod was iTunes, the biggest differentiator between the iPod and the many perfectly adequate MP3 players that preceded it. From the sounds of it, the iPhone only rethinks the gadget, not the infrastructure. It isn't going to change the world. It isn't even, sadly, going to change AT&T-Cingular-AT&T.

Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series. Readers are welcome to post here, at net.wars home, at her personal blog, or by email to netwars@skeptic.demon.co.uk (but please turn off HTML).