Monday, August 20, 2007

Is it Piracy if the Product is Free?

John Stottlemire posted code and instructions on the internet that lets people print as many coupons as they want from - despite the website only allowing two per product. Is this a case of piracy for which Stottlemire should be sued in court, or just a case of an individual sharing helpful information?

Here's the deal. To use these coupons, consumers must install Coupons Inc.'s proprietary software. The software assigns each user's computer a unique identifier, which the company uses to track and control the consumer's coupon-printing practices. We've all experienced spyware like this before - software which installs itself on your computer, slowing it down, and causing a myriad of other headaches - and the government has even promoted initiatives to prevent it. So as this Wired article asks, "How can a computer owner be prohibited from deleting files from his own computer?".

Stottlemire is being sued for violating the Digital Millennium Copyright Act (DMCA), and specifically for helping people circumvent anti-piracy measures. In essence, he is being treated as if he pirated music or movies and distributed them illegally on the internet.

But here's the wrinkle: He's accused of liberating something that is already free. already gives away their coupons for free to anyone who wants them, albeit in a controlled, limited quantity. If you're pirating something that's already legally available to the public at no cost, can it still be considered piracy?

Furthermore, it's outrageous to claim that offering people instructions and a software tool that deletes spyware from your computer is ILLEGAL. Stottlemire has defended himself by saying, "All I did was erase files or registry keys. Nothing was hacked. Nothing was decoded...". In this he is, in my opinion, exactly right. The DMCA's anti-circumvention provisions have been legally interpreted by the courts to mean that you cannot hack or decode software that protects copyrighted material. That's why it's illegal to decode and burn copies of encrypted DVDs from your local Blockbuster. However, Stottlemire hasn't hacked or decoded anything. He has simply shared information and created a software tool that deletes spyware files from users' computers. These are files that slow down computers' performance and collect information about the user, sending it across the internet, slowing down the connection speed, back to the private company to use for marketing purposes and selling it to spammers.

Regardless of Stottlemire's intentions, which may have admittedly not been of the most noble variety, the bottom line is that prosecuting him for pirating something that's already free and for creating a program that deletes spyware from users' computers would set a horrific legal precedent. In the Internet Age, people need to be able to protect themselves by maintaining control over what files reside on their machines. The real problem is with's misguided attempt to protect their product, now deemed so important, while still affording everybody the ability to circumvent those protections with nothing more than the "Delete" key.

Thursday, August 16, 2007

Regulating the Second Life Economy...

Second Life continues to amaze me in ways that set it light years apart from any other website on the internet. The SL economy is so robust that, as this Wired article reports, one of its banks, Ginko Financial, is going out of business and will be unable to repay the 200,000,000 Lindens (or $750,000 US dollars) to its customers who invested with them. If this were a real-world bank, the FDIC and other government institutions would protect people and their monetary assets through various insurance mechanisms and federal regulations, as they have done since the 1930s and the Great Depression. So the question is, "Should Second Life be regulated by the government in the same way?"

Here is a terrific case study about to be played out on Internet Governance. The case for regulation is the same as in real-space: help protect investors and, as a result, also the strength of the overall economy. One need only look at the success of federal regulation and the FDIC in preventing banking crises and another Great Depression over the past 70 years. However, the case against regulation is a standard mantra of cyberspace: government regulation does more harm than good to the economy by stifling innovation and creativity. Let the market run its course unimpeded by bureaucratic red tape.

Many of my loyal readers are probably wondering why this matters. It is, after all, only a bank that existed on some website that they've never even heard of before, so what's all the fuss about?

Here's why it matters. Second Life is a microcosm of cyber-economics which are increasingly relevant and part of the larger U.S. economy as a whole. Take a look at this financial data and be prepared to have your mind blown. The SL economy stakes claim to nearly 9 million residents, 2.6 billion Linden dollars in circulation (which are bought and sold for real-world U.S. dollars), land is bought, sold, and rented, businesses opened, goods and services sold, and even stocks traded on two SL-based stock exchanges, the International Stock Exchange and the SL Capital Exchange (formerly AVIX).

For all the differences between cyberspace and real-space, they are similar in that when financial institutions go out of business and people's assets are lost there are far-reaching consequences to the overall economy, both in Second Life and the U.S. In this case, individuals lost $750,000 dollars, but that number will undoubtedly increase the next time. That's less money for consumers to purchase other goods and services which increase sales, drive innovation, and generate jobs.

Obviously, some type of regulation or oversight is necessary. The question is what type. Will it be self-regulation or more federal intervention? Robert Bloomfield, accounting professor at Cornell University, says "residents are already responding by creating a variety of oversight institutions of their own, including companies that insure against fraud and homegrown regulatory institutions like the Second Life Exchange Commission, which is modeling itself on the SEC."

Government has thus far been wise to largely stay out of the various cyber-economies and let market forces run their course, which has fit well with the still prominent libertarian ideology of Internet users. It appears that all chances for self-governance will be afforded to the Second Life economy, and in that there is a tremendous opportunity to blaze the trail as a model for the entire Web. However, if they fail in their attempts to self-regulate, then you can expect the real-space authorities to stay out of the game for only so long.

Wednesday, August 15, 2007

Marketing .ORG Domain Names...

The New York Times has a feature this morning on how TIAA-CREF, which manages the retirement accounts of most teachers and researchers, is rolling out a new advertising campaign designed to highlight the fact that it is a .ORG, rather than a .COM.

If you're the average internet user, at this point you're probably assuming that the main difference is that .ORGs are non-profit organizations whereas .COMs are commercial for-profit companies. TIAA-CREF is hoping to capitalize on that assumption, running ads such as "How much more objective can you get than .o-r-g?", ".Org represents three of the most trusted letters on the Internet", or my personal favorite, "Ever hear of a .org crash?"

However, this is misleading the consumer as it is based on a false assumption. ICANN, which runs the domain name system, has no real guidelines nor enforcement mechanism for who qualifies for a .ORG. You emphatically do not need to be a non-profit organization in order to register for one. In fact, TIAA-CREF owns the rights to as well as .ORG, just as most for-profit .COM companies own the rights to their equivalent .ORG.

So consumers of financial services ought to be aware of the fact that TIAA-CREF's status as a .ORG really has no meaning - it is simply a marketing pitch aimed at capitalizing on consumers' ignorance on the subject. All of which is so ironic considering TIAA-CREF actually IS a non-profit!

Monday, August 13, 2007

Who Governs the Internet: Literature Review

Here is a public call to assist me in adding to this brief, but hopefully comprehensive, academic literature review on the question of "Who governs the Internet?". I don't need every citation or hyperlink known to man, only those representative of the different schools of thought on the subject. So in the spirit of Web 2.0 participation, please let me know if you're aware of something I have left out, and of course feel free to leave comments on your ideas.

The academic literature exposes several distinct arguments in answering how the Internet is being governed. Lawrence Lessig supports the notion that code governs cyberspace, meaning that software is programmed to set the rules for behavior, and therefore is the central authority. Goldsmith and Wu counter with the proposition that local and national governments increasingly govern cyberspace, as they have recently taken a more proactive role in formulating traditional public policies affecting cyberspatial content. Marcus Franda puts forth the argument that the Internet is governed by an international regime consisting of both the public and private sectors, as well as international consortium groups. Meanwhile, Web 2.0 proponents argue that the Web is increasingly governed and self-regulated by the masses of people, or netizens, who actively engage in cyberspatial activities and social networks. Milton Mueller takes a more narrow definition of internet governance, referring to the phrase only in terms of the functional operation of the internet, and therefore argues that ICANN and a small handful of semi-public international consortium groups comprised mostly of academics and engineers govern cyberspace, particularly through standards-setting processes, and uses the creation and administration of the domain name system (DNS) as the primary example.

Wednesday, August 08, 2007

Ending the NY Times Paywall...

As a long-time daily reader of the New York Times online, it has always been extremely frustrating that certain parts of the newspaper were not made available to the public. While anyone could read the news of the day for free on their website, readers had to pay subscription fees for TimesSelect content, which basically consists of the op-ed columns and older articles in their archives. Now, however, Holly M. Sanders is reporting that this TimesSelect paywall is coming to an end. This is a positive development for not only the public at large, who will get to read more news analysis by top-notch journalistic contributors, but also for the business of the NY Times, which can expect greater profits.

Welcome to Internet Age Economics. Most of the rest of the industry discovered long ago that creating a paywall for premium content was counter-productive - potential customers who actually wanted to read the newspaper were turned away by prohibitive costs, and so more of their market went to free alternatives.

Meanwhile, eliminating paywalls and sharing the full content of the newspaper for free actually leads to increased profits in the Internet Age. As any marketing executive will tell you these days, giving your product away for free on the Web enhances your visibility and readership, thereby marketing your product to great effect. In fact, research demonstrates that it actually increases sales of the physical product. Also, giving it away for free draws more eyeballs to the website, and for a brand as famous as the NY Times, greatly increases revenue from online advertising.

How the NY Times, Wall Street Journal, and other media entities expect to increase their readership and make more money by charging for content in a cyber space where nearly everything is free is beyond me. TimesSelect was a horrendous idea, as are all paywalls and other mechanisms that seek to restrict and control otherwise easily available information in an internet environment. They ought to stop obsessing over how to protect and control, and instead focus on how to take advantage of the new economic realities.

Good riddance.

Tuesday, August 07, 2007

A Blogger Union?

As this Wired article reports, a loose coalition of bloggers are attempting to form a union. Their thinking is that by banding together they can have more bargaining power in negotiating terms for health insurance, collective bargaining, and other goals of traditional labor movements. However, that seems to betray the point - blogging in cyberspace is anything but traditional, and any such notions of organizing labor must adjust dramatically to have any hope for success.

Bloggers are notorious for being fiercely independent, and the very notion of an organized union seems to contradict why many people started blogging in the first place. Furthermore, a union of "members" is, by definition, a relationship of exclusivity - either you're "one of us" or you're not. But there are no barriers to entry in the blogosphere since anybody with internet access can create one. There are no special sets of skills or really any defining common characteristics amongst the blogging community. Such a union, therefore, would really be between a completely random collection of individuals.

So what? Proponents of the unionization are quick to point out that many freelancers' labor unions that have existed for decades have also been exactly that. This might seem counter-intuitive to most people's concepts of what defines a labor union - after all, what's to stop the creation of other "unions" for MySpace users, Facebook users, AOL subscribers, or any other random association of individuals with practically nothing in common for the purpose of collective bargaining? Then again, come to think of it, that sounds a lot like democracy.

A more sensible (and palatable) approach might be to first increase the legitimacy of certain subsets of the blogging community. In other words, a union of all bloggers is too wishy-washy, but establishing a union for professional bloggers, another for political bloggers, another for for-hire bloggers, etc., could more reasonably address the issues of definition and exclusivity. Each association could establish standards and codes of conduct which would, as a consequence, define its membership and set minimum (and voluntary) rules for behavior that would act as a prerequisite for membership into a true union of like-minded individuals.

Monday, August 06, 2007

A Call for Open Social Networks...

"Damn the Facebooks and the MySpaces", begins a Wired News article by Scott Gilbertson. It's not yet another maniacal anti-MySpace or Facebook tirade, but a call to arms for programmers (and perhaps those companies themselves) to create an open standard for social networking websites. The Nerfherder says it's about time.

When entering data into Facebook, you're sending it on a one-way trip. Want to show somebody a video or a picture you posted to your profile? Unless they also have an account, they can't see it. Your pictures, videos and everything else is stranded in a walled garden, cut off from the rest of the web.

Like locked cell phones and copy-protected music, Facebook is on the wrong side of the open-network debate. Facebook is a sealed bubble. Facebook users are locked into Facebook, just as iTunes locks music fans to Apple's iPod.

This serves companies' business interests, but not the wider interests of consumers. AOL, Yahoo and Microsoft have their own, proprietary instant-messaging systems. They're all good, but they'd be better if they worked together. The iPhone would be better if it could also be used on Verizon's and Sprint's networks, and Facebook would be better if you could link to friends' pages on MySpace and Bebo. Social networking should be based on open standards, just like e-mail.

Friday, August 03, 2007

Blogging the Minneapolis Bridge Collapse...

By now you've all heard the details about the Minneapolis bridge collapse, but attention needs to be brought to the blogosphere, which is currently ripe with the best kind of "citizen journalism" - eyewitness accounts, photos, videos, testimonials, analysis, and more. Traditional newspapers and television stations have been terrific at delivering the facts of this tragedy to the public, but these blogs and other citizen journalists paint a more complete and emotional picture of what actually transpired.

Here are links to some amazing material that would never have been available before the Web.

Noah Kunin gives his firsthand account of how he saw the bridge collapse from his apartment window, and then raced to the scene to rescue survivors in the water.
Description of collapse: Surprisingly quiet, but my entire warehouse apt shook quite a bit. Bridge fell so very slowly - poof. Yelled and yelled but no one answered. Only a handful of ppl in water, all got out ok and then began to help as well. Ran into woman who thought school bus was trapped on east side in fold of highway. Couldn't confirm it or get to the other bank to help.

Blogger Sisyphus gives his eyewitness account from a river cruise he was on that had just gone under the bridge before it collapsed, and which then turned around to assist in the emergency.

Jayber provides a brief account of what he observed having ridden his bicycle over to the scene, including seeing "a bus full of school children that was sitting katywampus on the edge" of the river, and civilians stepping up to help direct traffic in the early stages of the emergency.

And, of course, tons of amateur photos and videos by people arriving on the scene.

Really, the blogosphere is filled with so much more coverage it's astonishing - including the rapid politicization of the bridge collapse, and scores of Minneapolis residents using their blogs as public message boards to notify their friends and family that they're OK.

Best wishes to the families of those lost and missing.

Thursday, August 02, 2007

Elton John Calls for Closing the Internet...

In the category of "Dumbest things ever said about the internet", Elton John may have just joined the Hall of Fame. In this Sun article, he makes several outrageous claims such as 1) the internet has stopped people from "creating stuff", and 2) the "whole internet" should be shut down for five years to see what happens; to see how much art is produced.

How can we read into these statements? Maybe Sir Elton has finally become so painfully old that he has less credibility than the senile grandparent that sleeps in a chair in the corner of the room drooling during family holidays. Or maybe he's so isolated and bitter from being super-rich that he's intentionally trying to alienate tens of millions of young consumers by showing just how out of touch he's become. Or maybe he's just a moron.

The facts are that there is not a single reasonable person alive who thinks the internet has stopped people from "creating stuff". The exact opposite is true. Never before has humanity seen original content production on such a mass scale, as demonstrated by the zillions of blogs, personal websites, MySpace pages, Flickr photos, YouTube videos, and, yes, even shared music files (which are legal from many bands who actually see the internet as a marketing tool). If anything, most people believe that too much stuff is being created. And as for Elton's brilliant notion that the whole internet should be shut down for five years to "see what happens", this already occurred. It was known as "all human history prior to 1994".

As the article points out, most success stories coming from the music industry these days - including his fellow Brits the Arctic Monkeys and Lily Allen - come from artists who actually encourage the use of the internet to kick-start their careers, build a name and fanbase for themselves, and increase sales of their music.

In order to prove he's not completely hypocritical, why doesn't Elton John stop selling his own songs on the Web? Does anyone truly believe that would be a wise business decision? Or, for that matter, does anyone agree that the world would be a better and more creative place without the internet?

Wednesday, August 01, 2007

Equal Opportunity via Cheap Laptops...

For quite a few years now there has been a new movement emerging whose mission is to create computers affordable enough to allow underprivileged children and adults to participate in the Digital Economy. Make no mistake, this is not a matter of some corporation seeking to reduce prices in order to sell more goods and make higher profits. It is a true movement intended to help the world's poor and empower them in the Internet Age.

Matthew Elliot reports that the cheapest laptop in the world has just been made available - the Medison Celebrity laptop costs only $150 and is available through online reseller And, yes, it's actually functional - an Intel 1.5 Ghz processor, 40 GB hard drive, 256 MB of RAM, etc. Heck that's better than the laptop I've been using for years to teach computer science! The reason it can be sold so cheaply is because it uses the free Linux operating system instead of Microsoft Windows. Along a similar vein, Nicholas Negroponte's OLPC sells for $175, and Intel's Classmate PC is expected to go for $200.

Furthermore, these laptops not only come WiFi-enabled, but in some cases a portion of the proceeds actually goes toward building a WiFi infrastructure in developing nations. I've also heard that when somebody from the developed world buys one of these machines, fully half of the proceeds actually go towards buying another machine for someone in the Third World. That's your classic 2-for-the-price-of-1 deal, only some African fellow gets your free one.

Sure, people in the Third World have more immediate concerns than obtaining a laptop - food, water, and shelter come to mind pretty quick - and skeptics are always plenty eager to point that out. Nevertheless, these programs are well-intentioned and should be commended for being as such. The equal opportunity that the Internet provides only exists for those who have access to it, after all.

Which raises two questions: 1) Why aren't we pursuing a universal broadband access program in the United States, to foster equal opportunity here as well?, and 2) If it's economically feasible to create a $150 laptop, then why hasn't some firm jumped at the chance to mass market them and gain a tremendous comparative advantage?