As usual, we’ll kick off the new year by reviewing the predictions we made for the previous year. Here now, our 2009 predictions, in italics, with hindsight in ordinary type.

(1) DRM technology will still fail to prevent widespread infringement. In a related development, pigs will still fail to fly.

By tradition this is our first prediction, and it has always been accurate. Guess what our first 2010 prediction will be? Verdict: right.

(2) Patent reform legislation will come closer to passage in this Congress, but will ultimately fail as policymakers wait to determine the impact of the Bilski case’s apparent narrowing of business model patentability.

Everyone agrees that patent reform is needed, but no specific bill is close to passage, and everyone is waiting for the Supreme Court’s Bilski decision. Verdict: right.

(3) As lawful downloading of music and movies continues to grow, consumer satisfaction with lossy formats will decline, and higher-priced options that offer higher fidelity will begin to predominate. At least one major online music service will begin to offer music in a lossless format.

People seem to accept lossy formats. Verdict: wrong.

(4) The RIAA’s “graduated response” initiative will sputter and die because ISPs are unwilling to cut off users based on unrebutted accusations. Lawsuits against individual end-user infringers will quietly continue.

“Graduated response” has gotten lots of talk but hasn’t had much of a practical impact yet. Verdict: mostly right.

(5) The DOJ will bring criminal actions against big-time individual copyright infringers based on data culled from the server logs of a large “private” BitTorrent community.

I don’t think this happened. Verdict: wrong.

(6) Questions over the enforceability of free / open source software licenses will move closer to resolution.

Debate continued, but I don’t recall any major legal rulings on this issue. Verdict: mostly wrong.

(7) NebuAd and the regional ISPs recently sued for deploying NebuAd’s advertising system will settle with the class action plantiffs for an undisclosed sum. At least in part because of the lawsuit and settlement, no U.S. ISP will deploy a new NebuAd/Phorm-like system in 2009. Meanwhile, Phorm will continue to be successful with privacy regulators in the UK and will sign up reluctant ISPs there who are facing competitive pressure. Activists will raise strong objections to no avail.

NebuAd is now dead and Phorm appears to be in trouble. US ISPs steered clear of them after strong pushback from consumers and legislators. Phorm seemed to have some preliminary deals with ISPs in the UK, but it appears that they have not yet had a wide deployment there (since an early pilot program in 2007). Verdict: mostly right.

(8) The federal Court of Appeals for the Ninth Circuit will hear oral argument in the case of U.S. v. Lori Drew, the Megan Meier/MySpace prosecution. By year’s end, the Ninth Circuit panel still will not have issued a decision, although after oral argument, the pundits will predict a 3-0 or 2-1 reversal of the conviction.

The Drew case did not reach the Ninth Circuit, because the original trial judge set aside the jury’s guilty verdict. Verdict: wrong.

(9) As a result of the jury’s guilty verdict in U.S. v. Lori Drew, dozens of plaintiffs will file civil lawsuits in 2009 alleging violations of the federal Computer Fraud and Abuse Act premised on the theory that one can “exceed authorized access” or act “in excess of authorization” by violating Terms of Service. Thankfully, the Department of Justice won’t bring any other criminal cases premised on this theory, at least not until it sees how the Ninth Circuit rules.

Despite worries, we didn’t see many such lawsuits. The DoJ did not bring criminal cases. Verdict: mostly wrong.

(10) The Computer Fraud and Abuse Act (CFAA) will be the new DMCA. Many will argue that the law needs to be reformed, but this argument will struggle to gain traction with the lay public, notwithstanding the fact that lay users face potential liability for routine behaviors due to CFAA overbreadth.

This hasn’t happened, at least not yet. There are concerns about the CFAA, but the issue hasn’t gotten tracttion. Verdict: mostly wrong.

(11) An academic security researcher will face prosecution under the CFAA, anti wire tapping laws, or other computer intrusion statutes for violations that occurred in the process of research.

Thankfully, this didn’t happen. Verdict: wrong.

(12) An affirmative action lawsuit will be filed against a university, challenging the use of a software algorithm used in evaluating applicants.

Verdict: wrong.

(13) There will be lots of talk about net neutrality but no new legislation, as everyone waits to see how the Comcast/BitTorrent issue plays out in the courts.

There has been lots of talk but no legislation passed. The main action on net neutrality seems to be in the FCC. Verdict: right.

(14) The Obama administration will bring an atmosphere of antitrust enforcement to the IT industry, but no major cases will be brought in 2009.

The atmosphere is indeed more pro-enforcement. We almost made it to the end of the year without a major case being filed, but then the FTC brought a case against Intel in mid-December. Verdict: mostly right.

(15) The new administration will be seen as trying to “reboot” the FCC.

There are certainly changes at the FCC, but not a full-on reboot. Verdict: mostly wrong.

(16) One of the major American voting system manufacturers (Diebold/Premier, Sequoia, ES&S, or Hart InterCivic) will go out of business or be absorbed into one of its rivals.

ES&S bought Premier. This was one of our best calls. Verdict: correct.

(17) The federal voting machine certification regime will increasingly be seen as a failure. States will strengthen their own certification processes, and at least one major state will stop requiring federal certification. The failure of the federal process to certify systems or software patches in a timely fashion will be cited as a reason for this move.

Consensus is growing that the certification regime is expensive and ineffective. But not much has changed on the state level. Verdict: mostly wrong.

(18) Estonia and other countries will continue experimenting in real elections with online or mobile phone voting. They will claim that these trials are successful because “nothing went wrong.” Security analysts will continue to claim that these systems are fundamentally flawed and will continue to be ignored. Exactly the same thing will continue to happen with U.S. overseas and military voters.

Verdict: right.

(19) We’ll see the first clear-cut evidence of a malicious attack on a voting system fielded in a state or local election. This attack will exploit known flaws in a “toe in the water” test and vendors will say they fixed the flaw years ago and the new version is in the certification pipeline.

Thankfully, this didn’t happen. Verdict: wrong.

(20) U.S. federal government computers will suffer from at least one high-profile compromise by a foreign entity, leaking a substantial amount of classified or highly sensitive information abroad.

Such a breach probably happened — what are the odds that such a large number of computers could be secured continuously for a year — but I don’t recall a “high-profile” compromise. Verdict: mostly wrong.

(21) There will be one or more major Internet outages attributed to attacks on DNS, BGP, or other Internet plumbing that is immediately labeled an act of “cyber-warfare” or “cyber-terrorism.” The actual cause will be found to be the action of spammers or other professional Internet miscreants.

Thankfully, such attacks did not happen. Verdict: wrong.

(22) Present flaws in the web’s Certification Authority process, such as the MD5 issue or the leniency of some CAs in issuing certificates, will lead to regulation of the CA process. Among other things, there will be calls for restrictions on which CAs can issue certs for which Top Level Domains.

The CA process does have serious problems, but regulators have not stepped in. Verdict: mostly wrong.

(23) One or more major Internet services or top-tier network providers will experience prolonged failures and/or unrecoverable data severe enough that the company’s president ends up testifying before Congress about it.

The closest thing to this kind of failure was Danger’s loss of customer data. In the end, most of the data was recoverable; and no Congressional testimony occurred. Verdict: mostly wrong.

(24) Shortly after the start of the new administration, the TSA will quietly phase out the ban on flying with liquids or stop enforcing it in practice. The color-coded national caution levels (which have remained at “orange” forever) will be phased out.

Practical enforcement of the liquid ban became spotty. We still had to separate our liqud-baggie at the checkpoint, but in practice the TSA almost never complained about larger containers left in carry-ons. Of course, all this may have changed due to the attempted attack last week. The color-coded caution levels remained in place. Verdict: mostly wrong.

(25) All 20 of the top 20 U.S. newspapers by circulation will experience net reductions in their newsroom headcounts in 2009. At least 15 of the 20 will see weekday circulation decline by 15% or more over the course of the year. By the end of the year, at least one major U.S. city will lack a daily newspaper.

This one is tough to check exhaustively. Preliminary research shows headcount reductions at all major papers. Circulation fell at all of the top-20 papers that reported figures, but not by as much as we predicted. Half saw a 10% drop but only about a quarter saw a drop of 15% or more. We’re not sure if there’s a major U.S. city without a daily — it probably depends on what counts as “major”. On the whole, things were bad but not quite as bad as we predicted. Verdict: mostly right.

(26) Advertising spending in older media will plummet, but online ad spending will be roughly level, as advertisers warm to online ads whose performance is more easily measured. Traditional media will be forced to offer advertisers fire sale prices, and the ratio of content to advertising in many traditional media outlets will increase.

This one is hard to evaluate but is consistent with anecdotal reports. Verdict: mostly right.

(27) An embarrassing leak of personal data will emerge from one or more of the social networking firms (e.g., Facebook), leading Congress to consider legislation that probably won’t solve the problem and will never actually reach the floor for a vote.

We didn’t see an accidental leak, but Facebook’s privacy changes late in the year are a lesser version of what we predicted. It’s not clear yet what if anything Congress will do. Verdict: mostly wrong.

(28) Facebook will be sold for $4 billion and Mark Zuckerberg will step down as CEO.

Verdict: wrong.

(29) Web 2.0 startups will not be hammered by the economic downtown. In fact, web 2.0 innovation may prove to be countercyclical. Costs are controllable: today’s workstyles don’t require lavish office space, marketing can be viral, and pay-as-you-go computing services eliminate the need for big upfront investments in infrastructure. Laid off big-company workers and refugees from the financial world will keep skilled wages low. The surge in innovation will be real, but its effects will mostly be felt in future years.

It’s hard to judge this, but I think it was right. Innovation continued to be robust, even though investment capital was (relatively) scarce. Verdict: right.

(30) The Blu-ray format will increasingly be seen as a failure as customers rely more on online streaming.

Blu-ray growth has been disappointing, but streaming of movies has not shown as much growth as we predicted. Verdict: mostly right.

(31) Emboldened by Viacom’s example against Time Warner, TV network owners will increasingly demand higher payments from cable companies with the threat of moving content online instead. Cable companies will attempt to more heavily limit the content that network owners can host on Hulu and other sites.

Verdict: right.

(32) The present proliferation of incompatible set-top boxes that aim to connect your TV to the Internet will lead to the establishment of a huge industry consortium with players from three major interest groups (box builders, content providers, software providers), reminiscent of the now-defunct SDMI consortium, and with many of the same members. In 2009, they will generate a variety of press releases but will accomplish nothing.

An initiative called DECE tried to do exactly this, with the predicted results. Verdict: right.

(33) A hot Christmas item will be a cheap set-top box that allows normal people to download, organize, and view video and audio podcasts in their own living rooms. This product will work with all of the major free online sources of audio and video, and a few of the paid sources.

This prediction made a certain amount of market sense but, realistically, there would have been no way to negotiate the necessary permissions. Verdict: wrong.

(34) Internet Explorer’s usage share will fall below 50 percent for the first time in a decade, spurred by continued growth of Firefox and Safari and deals with OEMs to pre-load Google Chrome.

IE’s share is falling but is still above 60%. Chrome didn’t get many (any?) OEM deals. Verdict: mostly wrong.

(35) Somebody besides Apple will sell an iPod clone that’s a drop-in replacement for a real iPod, complete with support for iTunes DRM, video playback, and so forth. Apple will sue (or threaten to sue), but won’t be able to stop distribution of this product.

Verdict: wrong.

(36) Apple will release a netbook, which will be a souped-up iPhone with an 8″ screen and folding keyboard. It will sell for $899.

This didn’t happen. Instead, we will apparently get the long-rumored Apple tablet computer, a souped-up iPhone with a 8-10″ screen, selling for $800 or so. Verdict: wrong.

(37) No white space devices will be approved for use by the FCC. Submitted spectrum sensing devices will fare well in both laboratory and field tests, but approval will be delayed politically by the anti-white space lobby.

Verdict: right.

(38) More and more Internet traffic will encrypted, as concern grows about eavesdropping, content modification, filtering, and security attacks.

Concern about traffic modification is growing, but we haven’t seen much growth in encryption. Verdict: mostly wrong.

The bottom line: 9 right, 6 mostly right, 12 mostly wrong, 11 wrong. Our goal was to make bolder predictions than in previous years, and we did succeed in that respect. Our accuracy suffered accordingly. Interesting, provocative predictions are rarely safe, but still I would have preferred a higher success rate.

Stay tuned for our 2010 predictions.