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New Congress, Same Old Issues

November 16, 2006 by

With control of the House and Senate about to switch parties, everybody is wondering how the new management will affect their pet policy issues. Cameron Wilson has a nice forecast for tech policy issues such as competitiveness, globalization, privacy, DRM, and e-voting.

Most of these don’t break down as partisan issues – differences are larger within each party than between the two parties. So the shift in control won’t necessarily lead to any big change. But there are two factors that may shake things up.

The first factor is the acceleration of change that happens in any organization when new leadership comes in. The new boss wants to show that he differs from the old boss, especially if the old boss was fired. And the new boss gets a short grace period in which to be bold. If a policy or practice was stale and needed to be changed but the institutional ice floes were just stuck, new management may loosen them.

The second factor has to do with the individuals who will run the various committees. If you’re not a government geek, you may not realize how much the agenda on particular issues is set by House and Senate committees, and particularly by the committee chairs. For example, any e-voting legislation must pass through the House Administration Committee, so the chair of that committee can effectively block such legislation. As long as Bob Ney was chair of the committee, e-voting reform was stymied – that’s why the Holt e-voting bill could have more than half of the House members as co-sponsors without even reaching a vote. But Mr. Ney’s Abramoff problem and the change in party control will put Juanita Millender-McDonald in charge of the committee. Suddenly Ms. Millender-McDonald’s opinion on e-voting has gotten much more important.

The bottom line is that on most tech issues we don’t know what will happen. On some issues, such as the broad telecom/media/Internet reform discussion, the situation is at least as cloudy as before. Let the battles begin.

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Next-Gen DVD Support Yanked from 32-Bit Vista

August 25, 2006 by

Microsoft has announced that the 32-bit version of its forthcoming Windows Vista operating system product won’t support playing commercially-produced next-generation DVDs (i.e., HD-DVD and Blu-Ray discs), according to Dan Warne’s story at APC. 32-bit Vista will be able to access the discs, reading and writing ordinary content, but they won’t be allowed to access DRM-encoded content such as major studio movies.

For those not up on the jargon, Vista is the next major version of Windows. There are different flavors of Vista for 32-bit processors and 64-bit processors. virtually all of the computers in use today, and most of the ones for sale in stores, use 32-bit processors, so they’ll run the 32-bit version of Vista – the one that won’t be able to play next-gen DVDs.

The reason, Microsoft says, is that the DVD cartel won’t license them the right to read DRMed content on 32-bit Vista. The problem is supposedly that 32-bit Vista allows the use of unsigned device drivers, while 64-bit Vista allows only signed drivers. To be signed, a device driver has to be approved by a special testing bureaucracy, according to criteria set up by Microsoft. (Device drivers are small programs that allow the system to interact with external devices or services.)

Optional signing of device drivers is a fine idea. Bad device drivers have caused many headaches for Windows users, so it’s good to give users more control over which drivers are on their systems. Users have to make choices about which drivers to install, and a Microsoft-sponsored stamp of approval, as provided by the signing process, helps users make that decision. All of this is helpful, as long as it is ultimately the user who decides what is safe to use on his computer.

But the reality is that lots of good and useful drivers are unsigned, because companies don’t want to subject themselves to the certification process. Competent users accept unsigned drivers all the time – my two-month-old Windows XP laptop has a few dozen unsigned drivers, many of which were pre-installed by the manufacturer.

In short, moving to 64-bit Vista, to get next-gen DVD playback with Windows, means giving up your current computer and some of your current peripherals and applications. You can be compatible with next-gen DVDs, or you can be compatible with the other stuff you use. Your choice.

Or you could just get one of the other Windows-compatible DVD player applications. According to an anonymous Microsoft source quoted at BoingBoing, Hollywood’s objection to next-gen DVDs on Vista-32 applies to Microsoft but not to third-party player applications like WinDVD and PowerDVD. Those apps will be allowed to play next-gen DVDs on Vista-32 and WinXP, even in the presence of unsigned drivers. If the goal is to stop piracy, this decision makes no technical sense. If unsigned drivers are a threat to DRM, it doesn’t matter whether those drivers are attacking a Microsoft-brand player application or a third-party application. So why did Hollywood refuse to license only Microsoft?

The BoingBoing source offers two hypotheses:

This leads folks at Microsoft to conclude either:

A) The studios don’t understand the technology enough to see these risks clearly, or

B) They just want to screw Microsoft

The studios all have tech consultants, and many of them are not fools, so A seems unlikely. B also doesn’t seem completely likely. It’s probably the usual: human stupidity rolled up in a big ball.

The stupidity-ball explanation is always a contender in cases like this, but I wouldn’t rule out A or B either. Yes, the studios have tech consultants, but they had equally good consultants when they chose the horribly misdesigned CSS as the encryption scheme for first-gen DVDs, which suggests that they don’t always listen to the consultants.

There’s an interesting connection to antitrust policy here. Microsoft’s business strategy is apparently to tie Media Player to Windows. Antitrust authorities, in Europe at least, didn’t like this, and so Microsoft is claiming that Media Player is an Integral Part of Windows and not just a nice application that is designed to work well with Windows. (Recall that they tried the same argument for Internet Explorer in the U.S. antitrust case, and the U.S. courts didn’t buy it.)

This may affect the DVD cartel’s decisionmaking in at least two ways. First, if they fell for the line that Media Player is not just another pretty app, they may have concluded that it made sense to hold Media Player accountable for the Windows “bug” of allowing unsigned drivers. This makes no sense from a content security standpoint, but remember that these are the same people who thought CSS was a good idea.

Another possibility is that the DVD cartel is implementing its own antitrust policy, encouraging competition in the market for Windows-compatible DVD players by neutralizing Microsoft’s tying strategy. Having acquired quasi-governmental power to regulate the design of DVD players and the structure of DVD-related markets, the cartel would naturally want to prevent any player vendor from accumulating market power.

All of this brings us back to Tim Wu’s paper about the drawbacks of putting one small group in charge of a whole economic sector. Markets may make good decisions – if they’re competitive – but there’s no guarantee that a single entity will make good decisions. That’s especially true if we put a small group of movie executives and lawyers in charge of technology design.

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Bill Gates: Is he an IP Maximalist, or an Open Access Advocate?

August 1, 2006 by

Maybe both. On July 20, the Wall Street Journal reported:

Frustrated that over two decades of research have failed to produce an AIDS vaccine, Microsoft Corp. Chairman Bill Gates is tying his foundation’s latest, biggest AIDS-vaccine grants to a radical concept: Those who get the money must first agree to share the results of their work in short order.

I can’t link to the full article because the Wall Street Journal – the only major American newspaper whose online operation is in the black – puts nearly all of its online content behind a paywall. But as it happens, there isn’t a great deal more to say on this topic because the Gates foundation has declined to specify the legal details of the sharing arrangement it will mandate.

Grant recipients and outside observers were unsure whether data-sharing requirements of the grants could pose potential legal or patent conflicts with Mr. Gates’s vow to respect intellectual property. Foundation officials said this week researchers would still be free to commercialize their discoveries, but they must develop access plans for people in the developing world.

The foundation declined to make its attorney available to address these concerns.

As David Bollier noted, the lack of detail from the Gates Foundation makes it difficult to know how the tradeoffs between sharing discoveries, on the one hand, and using IP to harness their value, on the other, will actually be made. But be that as it may, there seems to be a general question here about Mr. Gates’s views on intellectual property. As Mr. Bollier put it, it may appear that hell has frozen over: that Mr. Gates, whose business model depends on the IP regime he frequently and vigorously defends, is retreating from his support of extremely strong intellectual property rights.

But hell has (as usual) probably not frozen over. The appearance of an inherent conflict between support for strong intellectual property rights and support for open access is, in general, illusory. Why? Because the decision to be carefully selective in the exercise of one’s intellectual property rights is independent of the policy questions about exactly how far those rights should extend. If anything, the expansion of IP rights actually strengthens arguments for open access, creative commons licenses, and other approaches that carefully exercise a subset of the legally available rights.

If copyright, say, only extends to a specified handful of covered uses for the protected work, then an author or publisher may be well advised to reserve full control over all of those uses with an “all rights reserved” notice. But as the space of “reservable” rights, if you will, expands, the argument for reserving all of them necessarily weakens, since it depends on the case for reserving whichever right one happens to have the least reason to reserve.

And just as it is the case that stronger IP regimes strengthen the case for various forms of creative commons, open access and the like, the reverse is also true: The availability of these infrastructures and social norms for partial, selective “copyleft” strengthens the case for expansive IP regimes by reducing the frequency with which the inefficient reservations of rights made legally possible by such regimes will actually take place.

That, I think, may be Mr. Gates’s genius. By supporting open access (of some kind), he can show the way to a world in which stronger IP rights do not imply a horrifyingly inefficient “lockdown” of creativity and innovation.

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New Net Neutrality Paper

July 11, 2006 by

I just released a new paper on net neutrality, called Nuts and Bolts of Network Neutrality. It’s based on several of my earlier blog posts, with some new material.

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Why Do Innovation Clusters Form?

July 3, 2006 by

Recently I attended a very interesting conference about high-tech innovation and public policy, with experts in various fields. (Such a conference will be either boring or fascinating, depending on who exactly is invited. This one was great.)

One topic of discussion was how innovation clusters form. “Innovation cluster” is the rather awkward term for a place where high-tech companies are concentrated. Silicon Valley is the biggest and best-known example.

It’s easy to understand why innovative people and companies tend to cluster. Companies spin out of other companies. People who move to an area to work for one company can easily jump to another one that forms nearby. Support services develop, such as law firms that specialize in supporting start-up companies or certain industries. Nerds like to live near other nerds. So once a cluster gets going, it tends to grow.

But why do clusters form in certain places and not others? We can study existing clusters to see what makes them different. For example, we know that clusters have more patent lawyers and fewer bowling alleys, per capita, than other places. But that doesn’t answer the question. Thinking that patent lawyers cause innovation is like thinking that ants cause picnics. What we want to know is not how existing clusters look, but how the birth of a cluster looks.

So what causes clusters to be born? Various arguments have been advanced. Technical universities can be catalysts, like Stanford in Silicon Valley. Weather and quality of life matter. Cheap land helps. Some argue that goverment-funded technology companies can be a nucleus – and perhaps funding cuts force previously government-funded engineers to improvise. Cultural factors, such as a general tolerance for experimentation and failure, can make a difference.

Simple luck plays a role, too. Even if all else is equal, a cluster will start forming somewhere first. The feedback cycle will start there, pulling resources away from other places. And that one place will pull ahead, for no particular reason except that it happened to reach critical mass first.

We like to have explanations for everything that happens. So naturally we’ll find it easy to discount the role of luck, and give credit instead to other factors. But I suspect that luck is more important than most people think.

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