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January 30, 2009

Looking backward

Governments move slowly; technology moves fast. That's not a universal truth - witness Obama's first whirlwind week in office - but in the early days of the Net it was the kind of thing people said smugly when they wanted to claim that cyberspace was impervious to regulation. It worked well enough for, say, setting free strong cryptography over the objections of the State Department and ITAR.

This week had two perfect examples. First: Microsoft noted in its 10-Q that the EU may force it to do something about tying Internet Explorer to Windows - remove it, make it one of only several browsers consumers can choose from at setup, or randomly provide different browsers. Still fighting the browser wars? How 1995.

Second: the release of the interim Digital Britain report by the Department for Culture, Media, and Sport. Still proposing Digital Rights Management as a way of protecting rightsholders' interest in content? How 2005.

It probably says something about technology cycles that the DRM of 2005 is currently more quaint and dated than the browser wars of 1995-1998. The advent of cloud computing and Google's release of Chrome last year have reinvigorated the browser "market". After years of apparent stagnation it suddenly matters again that we should have choices and standards to keep the Internet from turning into a series of walled gardens (instead of a series of tubes).

DRM, of course, turns content into a series of walled gardens and causes a load of other problems we've all written about extensively. But the most alarming problem about its inclusion in the government's list of action items is that even the music industry that most wanted it is abandoning it. What year was this written in? Why is a report that isn't even finished proposing to adopt a technological approach that's already a market failure? What's next, a set of taxation rules designed for CompuServe?

The one bit of good, forwarding-thinking news - which came as a separate announcement from Intellectual Property Minister David Lammy, is that apparently the UK government is ready to abandon the "three strikes" idea for punishing file-sharers - it's too complicated (Yes, Minister rules!) to legislate. And sort of icky arresting teenagers in their bedrooms, even if the EU doesn't see anything wrong with that and the Irish have decided to go ahead with it.

The interim report bundles together issues concerning digital networks (broadband, wireless, infrastructure), digital television and radio, and digital content. It's the latter that's most contentious: the report proposes creating a Rights Agency intended to encourage good use (buying content) and discourage bad use (whatever infringes copyright law). The report seems to turn a blind eye to the many discussions of how copyright law should change. And then there's a bunch of stuff about whether Britain should have a second public service broadcaster to compete "for quality" with the BBC. How all these things cohere is muddy.

For a really scathing review of the interim report, see The Guardian , where Charles Arthur attacks not only the report's inclusion of DRM and a "rights agency" to collaborate on developing it, but its dirt path approach to broadband speed and its proposed approach to network neutrality (which it calls "net neutrality", should you want to search the report to find out what it says).

The interim report favors allowing the kind of thing Virgin has talked about: making deals with content providers in which they're paid for guaranteed service levels. That turns the problem of who will pay for high-speed fiber into a game of pass-the-parcel. Most likely, consumers will end up paying, whether that money goes to content providers or ISPs. If the BBC pays for the iPlayer, so do we, through the TV license. If ISPs pay, we pay in higher bandwidth charges. If we're going to pay for it anyway, why shouldn't we have the freedom of the Internet in return?

This is especially true because we do not know what's going to come next or how people will use it. When YouTube became the Next Big Thing, oh, say, three or four years ago, it was logical to assume that all subsequent Next Big Things were going to be bandwidth hogs. The next NBT turned out to be Twitter, which is pretty much your diametrical opposite. Now, everything is social media - but if there's one thing we know about the party on the Internet it's that it keeps on moving on.

There's plenty that's left out of this interim report. There's a discussion of spectrum licensing that doesn't encompass newer ideas about spectrum allocation. It talks about finding new business models for rightsholders without supporting obsolete ones and the "sea of unlawful activity in which they have to swim" and mentions ISPs - but leaves out consumers except as "customers" or illegal copiers. It nods at the notion that almost anyone can be a creator and find distribution, but still persists in talking of customers and rightsholders as if they were never the same people.

No one ever said predicting the future was easy, least of all Niels Bohr, but it does help if you start by noticing the present.

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 23, 2009

Will tweet for food

So we were at a thing in London this week where practically everyone was a Twitter user. Not surprising, since Twitter use has gone up nearly 1000 percent in the UK in the last year. As you do, we rehearsed various dissatisfactions with the service and wishes for feature improvements. Among them: people wished they could actually pay for the service so they could get it to do more of the stuff they want. There's something very odd about a company that people are so devoted to that they actually spend recreational time in a pub debating its business model. People were in love with Google in its early days, too, yet I don't remember pub chats about it.

That 1000 percent still makes Twitter tiny in context: it lags way behind Facebook, YouTube, Bebo, MySpace, and even Yahoo! Answers, as weirdly chaotic as that list is. YouTube compared with Twitter? As that article points out, the ecology of third-party software built around Twitter and automated feeds from Twitter into other sites like Facebook mean that many people use the service without ever accessing its Web site or even necessarily knowing they're reading a Twitter feed.

The existence of the third-party ecology is both a good and a bad sign. Good that people find the blogging-for-the-mobile-phone-generation platform so useful that they are willing to put in the effort. Bad, in the sense that it makes clear how utterly unusable Twitter is on its own. I've had an account for nearly two years, but left it mostly dormant until someone recommended Tweetdeck.

The whole conversation started because I was trying to find a tactful way of asking one of those present whether she could divide her Twitter feed into two: one for the really interesting work type stuff she does, and the other for the..."crap?" she said helpfully.

"It would be great if you could filter the feed by putting on "stop" words," someone said. Yes, and "go" words, too, so you could select what kind of thing you wanted to get when. You don't need many Twits on your list for the tweet stream to become unmanageable. Others have had this same thought and there is in fact something that does it.

Filtering would be a great thing because it's the lack of it that is the reason I've never dared turn on the switch that has Twitter send updates to my mobile phone. In the UK now, however, that element of the service is turned off. All to do with money, which mobile network operators tend to insist on and Internet users don't like to spend, leaving service providers squeezed in the middle.

"I'd pay for that," said one of the group. "The service is that useful to me."

"So would I," said someone else.

"Can't we make ask them?"

"Lots of people have tried."

Twitter's business model has in fact been the subject of some speculation even outside of pubs, and even ideas how to turn it into a billion-dollar company. It has, apparently, enough money to go on with from its funding rounds.

No one's actually sure exactly what Twitter's business model is, but it seems clear that charging for SMS updates isn't it. The site has no advertising (not even on its blog or home pages), and even if it did that ecology of desktop clients would render it moot anyway. It also seems that making life easy for third-party developers isn't necessarily it either. Twitter so far seems to be following in the footsteps of the early Web: if they come in sufficient numbers and you keep control a business model will present itself.

It worked for Google, the last successful company that fed a lot of similar speculation in its early days. Another parallel: those stories were written about Google in 2001-2002, just after the dot-com bust, when it was fashionable among Old Media to opine that New Media would never be able to grow up, move out, and make a living. Now, in this much worse economic crash, how will Twitter ever be able to leave home?

Some things clearly won't work. No matter how small, there is probably no number of ads that wouldn't send users fleeing to a Twitter competitor without them. Google locked in its users by being better than its competitors, by offering added services, and by acculturation: the more you learn about constructing good searches on Google the less you want to repeat the learning curve elsewhere. Social networks have proved in the long term to be more fungible: look at what happened to the well established discussion groups on early online services once everyone had access to the Internet.

More likely is the idea of marketing accounts, which is already happening anyway, built on the interests users indicate via their choices of whom to follow.

Our idea, which seemed logical in the pub: Twitter users start sending money to one of the company's email addresses using Paypal and force them to accept payment. Take control. Force a business model on them. Yeah!

It would be a great hack.

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 16, 2009

Health watch

We'll have to wait some months to find out what Steve Jobs' health situation really is, just as investors will have to wait to find out how well Apple is prepared to handle his absence. But that doesn't stop rampant speculation about both things, or discussion about whether Jobs owes it to the public to disclose his health problems.

As an individual, of course not. We write - probably too often for some people's tastes - about privacy with respect to health matters. But Jobs isn't just a private individual, and he isn't an average CEO. Like Warren Buffett, who saw his company's share price decline noticeably some years back during a scare over his health, Jobs's presence as CEO is a noticeable percentage of Apple's share price. That means that shareholders - and therefore by extension the Securities and Exchange Commission - have some legitimate public interest in his state of health.

That doesn't mean that all the speculation going on is a good thing. If Jobs is smart, he doesn't read news stories about himself; in normal times no one needs their sense of self-importance inflated that much, and in a health crisis the last thing you need is to read dozens of people speculating that you're on the way out. The pruriently curious may like to know that there is some speculation that the weight loss is the result of the Whipple procedure Jobs reportedly had in 2004 to treat his islet cell neuroendocrine tumor (a less aggressive type of pancreatic cancer); or that it's a thyroid disorder. No one wants to just write a post that says simply, "I don't know."

It would not matter if Jobs and Apple did not so conspicuously embrace the cult of personality. The downside of having a celebrity CEO is that when that CEO is put out of action the company struggles to keep its market credibility. The more the CEO takes credit - and Jobs is indelibly associated with each of Apple's current products - the less confidence people have in the company he runs.

To a large extent, it's absurd. No one - not even Jobs - can run a tech company the size of Apple by himself. Jobs may insist on signing off on every design detail, but let's face it, he's not the one working evenings and weekends to write the software code and run bug testing and run a final polishing cloth over the shinies before they hit the stores. Apple definitely lost his way during the period he wasn't at the helm - that much is history. But Jobs helped recruit John Sculley, the CEO who ran Apple during those lost years. And Jobs's next company, NeXT, was a glossy, well-designed, technically sophisticated market failure whose biggest success came when Apple bought it (and Jobs) and incorporated some of the company's technology into its products. Jobs had far more success with Pixar, now part of Disney; but accounts of the company's early history suggest was the company's founders who did the heavy lifting.

Unfortunately, if you're a public company you don't get to create public confidence by pointing out the obvious: that even with Jobs out of action there's a lot of company left for the managers he picked to run in the direction's he's chosen. Apple, whose relations with the press seem to be a dictionary definition of "arrogant", has apparently never cared to create a public image for itself that suggests it's a strong company with or without Jobs.

Compare and contrast to Buffett, who has been a rock star CEO for far longer than Jobs has. Buffett is 78, and Berkshire Hathaway's success is universally associated almost solely with him; yet every year he reminds shareholders that he has three or four candidates to succeed him who are chosen and primed and known to his board of directors. His annual shareholder's letters, too, are filled with praise for the managers and directors of the many subsidiaries Berkshire owns. Based on all that, it is clear that Buffett has an eye to ensuring that his company will retain its value and culture with or without him. That so many Berkshire Hathaway millionaires are his personal friends and neighbors, who staked money in the company decades ago at some personal risk, may have something to do with it.

Apple has not done anything like the same, which may have something to do with the personality of its CEO. Jobs's health troubles of 2004 should have been a wakeup call; if Buffett can understand that his age is a concern for shareholders, why can't Jobs understand that his health is, too? If he doesn't want people prying into his medical condition, that's understandable. But then the answer is to loosen his public identification with the company. As long as the perception is that Jobs is Apple and Apple is Jobs, the company's fortunes and share price will be inextricably linked to the fragility of his aging human body. Show that the company has a plan for succession, give its managers and product developers public credit, and identify others with its most visible products, and Jobs can go back to having some semblance of a private medical record.

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 9, 2009

All change

Every so often you wake up and discover the future is hitting you with both fists. The US media having such a moment. First, besides the usual reasons for the news being all bad - scare stories sell papers, the economic news really *is* all bad - journalists themselves are feeling the pinch. Newspapers in the US are in a dire state. And second, next month the US is due to switch off analog broadcast television, a change for which the country seems insufficiently prepared. (And think of the waste in dumping all those perfectly functional TV sets!)

Newspaper economics are all bad. The Atlantic thinks the New York Times will be dead by May (although writer Michael Hirschorn calls chances "slim"). In response, Poynter says nothing good about that HIrschorn's arithmetic or fact-checking.

But the far bigger risks are to more purely local papers. There are rumors that the venerable Hearst Corporation is going to put the 145-year-old Seattle Post-Intelligencer up for sale and may fold. The paper's disclaims all knowledge.. In one of the few other two-newspaper towns left, Detroit, the two rival papers print only three days a week.

Even more unnerving is the financial state of other local newspaper publishers. Lee Enterprises, which owns 49 local newspapers as well as more than 300 weekly newspapers, has seen its share price drop as low as 30 cents (though it's now more than double that), and its staff pared to the point of demoralization. McClatchy, owner of such well-known papers as the Miami Herald (home of columnist and novelist Carl Hiaasen) and the Raleigh News and Observer, has a share price of $1.87, $4.77 million in cash - and debt of $2.07 billion.

Meredith, which publishes Better Homes and Gardens and many other titles, looks good because it's only cut 250 jobs and closed a title for a one-time charge of $16 million.

You can track all this cheery information at - what else? - Newspaper Death Watch. What's happening isn't a simple matter of old media failing to adapt to new media. As Jack Shafer points out in Slate, many of these papers jumped on the Web quite early. The News and Observer, for example, had such a good Web site by 1995 that it drove Ben Rooney to persistently ask the why a small local paper in, of all places, North Carolina, was beating a large UK national. Result: the Electronic Telegraph.

Shafer's point is that once the newspapers tried the Web, they stopped innovating; Salon.com's Scott Rosenberg adds that by stagnating newspapers lost the experimentally inclined staff who should have guided them into new media. Likely true. Although, you have to point out that as lovable as Salon is, its financials don't look that great either: share price 35 cents and a $1.28 million quarterly loss on revenues of $1.98 million as of September 2008.

Salon isn't alone; Digg has a fine burn rate of nearly $5 million a year. And see this analysisof The Huffington Post, which puts its value at $2 million (instead of the $24 million it recently secured in venture capital) and its revenues at $302,000. And that's even though the site prides itself on not paying its writers and is being called out on stealing stories from other sites. Salon.com actually pays for its content, how quaintly old-fashioned of it. (ObDisclosure: I have written for Salon, though not recently.)

Three obvious things are killing the newspapers: the downturn in advertising due to the recession; the flight of classified ads to Craig's List and other Web services, which are so clearly a better medium; and the migration of readers to the Web, blogs, and other free services. Blogs in particular get some of the blame; while many blogs take the trouble to link readers back to the original site for the full story, adding to the originator's page views and therefore ad revenues, many more just republish in full. (See again the Huffington Post, whose behaviour as a commercial organization run by a media professional is truly shameful.) But the bigger problem seems unquestionably to be the amount of debt some of these companies took on during recent boom times, apparently convinced by the stories appearing on their own business pages. Newspaper Death Watch is right; but the story in many cases is hard-working local staff suffering for the sins of their corporate owners.

"Where," asks one of my American journalist friends, "are Americans going to get their news?"

Most, of course, get it even now from TV. And it's just too bad that the same groups - the elderly, the poor, the disabled - who rely on home newspaper delivery, which is going the way of the doctor's house call, are the same groups that will be left staring at a blank screen if Congress doesn't accede to Obama's request to delay the February 17 switch to digital, in part because there's a waiting list of 1 million for coupons to help consumers make the switch - and the program to supply those has run out of funds .

Government sponsorship to replace your TV? Seems very American, somehow. Life without newspapers? Uninformed. Life without television? Unthinkable.

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 2, 2009

No rest for 2009

It's been a quiet week, as you'd expect. But 2009 is likely to be a big year in terms of digital rights.

Both the US and the UK are looking to track non-citizens more closely. The UK has begun issuing foreigners with biometric ID cards. The US, which began collecting fingerprints from visiting tourists two years ago says it wants to do the same with green card holders. In other words, you can live in the US for decades, you can pay taxes, you can contribute to the US economy - but you're still not really one of us when you come home.

The ACLU's Barry Steinhardt has pointed out, however, that the original US-VISIT system actually isn't finished: there's supposed to be an exit portion that has yet to be built. The biometric system is therefore like a Roach Motel: people check in but they never leave.

That segues perfectly into the expansion of No2ID's "database state". The UK is proceeding with its plan for a giant shed to store all UK telecommunications traffic data. Building the data shed is a lot like saying we're having trouble finding a few needles in a bunch of haystacks so the answer is to build a lot bigger haystack.

Children in the UK can also look forward to ContactPoint (budget £22.4 million) going live at the end of January, only the first of several. The conservativers apparently have pledged to scrap ContactPoint in favor of a less expensive system that would track only children deemed to be at risk. If the conservatives don't get their chance to scrap it - probably even if they do - the current generation may be the last that doesn't get to grow up taking for granted that their every move is being tracked. Get 'em young, as the Catholic church used to say, and they're yours for life.

The other half of that is, of course, the National Identity Register. Little has been heard of the ID card in recent months; although the Home Office says 1,000 people have actually requested one. Since these have begun rolling out to foreigners, it's probably best to keep an eye on them.

On January 19, look for the EU to vote on copyright term extension in sound recordings. They have now: 50 years. They want: 95 years. The problem: all the independent reviewers agree it's a bad idea economically. Why does this proposal keep dogging us? Especially given that even the UK government accepts that recording contracts mean that little of the royalties will go to the musicians the law is supposedly trying to help, why is the European Parliament even considering it? Write your MEP. Meanwhile, the economic downturn reaches Cliff Richards; his earliest recordings begin entering the public domain...oh, look - yesterday, January 1, 2009.

Those interested in defending file-sharing technology, the public domain, or any other public interest in intellectual property will find themselves on the receiving end of a pack of new laws and initiatives out to get them.

The RIAA recently announced it would cease suing its customers in the US. It plans to "work with ISPs". Anyone who's been around the UK and France in recent months should smell the three-strikes policy that the Open Rights Group has been fighting against. ORG's going to find it a tougher battle, now that the govermment is considering a stick and carrot approach: make ISPs liable for their users' copyright infringement, but give them a slice of the action for legal downloads. One has to hope that even the most cash-strapped ISPs have more sense.

Last year's scare over the US's bald statement that customs authorities have the right to search and impound computers and other electronic equipment carried by travellers across the national borders will probably be followed up with lengthy protest over new rules known as the Anti-Counterfeiting Trade Agreement and being negotiated by the US, EU, Japan, and other countries. We don't know as much as we'd like about what the proposals actually are, though some information escaped last June. Negotiations are expected to continue in 2009.

The EU has said that it has no plans to search individual travellers, which is a relief; in fact, in most cases it would be impossible for a border guard to tell whether files on a computer were copyright violations. Nonetheless, it seems likely that this and other laws will make criminals of most of us; almost everyone who owns an MP3 player has music on it that technically infringes the copyright laws (particularly in the UK, where there is as yet no exemption for personal copying).

Meanwhile, Australia's new $44 million "great firewall" is going ahead despiteknown flaws in the technology. Nearer home, British Culture Secretary Andy Burnham would like to rate the Web, lest it frighten the children.

It's going to be a long year. But on the bright side, if you want to make some suggestions for the incoming Obama administration, head over to Change.org and add your voice to those assembling under "technology policy".

Happy new year!

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).