Here are our predictions for 2010. These are based on input from Ari Feldman, Ed Felten, Alex Halderman, Joseph Lorenzo Hall, Tim Lee, Paul Ohm, David Robinson, Dan Wallach, Harlan Yu, and Bill Zeller. Please note that individual contributors (including me) don’t necessarily agree with all of these predictions.

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

(2) Federated DRM systems, such as DECE and KeyChest, will not catch on.

(3) Content providers will crack down on online sites that host unlicensed re-streaming of live sports programming. DMCA takedown notices will be followed by a lawsuit claiming actual knowledge of infringing materials and direct financial benefits.

(4) Major newspaper content will continue to be available online for free (with ads) despite cheerleading for paywalls by Rupert Murdoch and others.

(5) The Supreme Court will strike down pure business model patents in its Bilski opinion. The Court will establish a new test for patentability, rather than accepting the Federal Circuit’s test. The Court won’t go so far as to ban software patents, but the implications of the ruling for software patents will be unclear and will generate much debate.

(6) Patent reform legislation won’t pass in 2010. Calls for Congress to resolve the post-Bilski uncertainty will contribute to the delay.

(7) After the upcoming rulings in Quon (Supreme Court), Comprehensive Drug Testing (Ninth Circuit or Supreme Court) and Warshak (Sixth Circuit), 2010 will be remembered as the year the courts finally extended the full protection of the Fourth Amendment to the Internet.

(8) Fresh evidence will come to light of the extent of law enforcement access to mobile phone location-data, intensifying the debate about the status of mobile location data under the Fourth Amendment and electronic surveillance statutes. Civil libertarians will call for stronger oversight, but nothing will come of it by year’s end.

(9) The FTC will continue to threaten to do much more to punish online privacy violations, but it won’t do much to make good on the threats.

(10) The new Apple tablet will be gorgeous but expensive. It will be a huge hit only if it offers some kind of advance in the basic human interface, such as a really effective full-sized on-screen keyboard.

(11) The disadvantages of iTunes-style walled garden app stores will become increasingly evident. Apple will consider relaxing its restrictions on iPhone apps, but in the end will offer only rhetoric, not real change.

(12) Internet Explorer’s usage share will fall below 50 percent for the first time in a decade, spurred by continued growth of Firefox, Chrome, and Safari.

(13) Amazon and other online retailers will be forced to collect state sales tax in all 50 states. This will have little impact on the growth of their business, as they will continue to undercut local bricks-and-mortar stores on prices, but it will remove their incentive to build warehouses in odd places just to avoid having to collect sales tax.

(14) Mobile carriers will continue locking consumers in to long-term service contracts despite the best efforts of Google and the handset manufacturers to sell unlocked phones.

(15) Palm will die, or be absorbed by Research In Motion or Microsoft.

(16) In July, when all the iPhone 3G early adopters are coming off their two-year lock-in with AT&T, there will be a frenzy of Android and other smartphone devices competing for AT&T’s customers. Apple, no doubt offering yet another version of the iPhone at the time, will be forced to cut its prices, but will hang onto its centralized app store. Android will be the big winner in this battle, in terms of gained market share, but there will be all kinds of fragmentation, with different carriers offering slightly different and incompatible variants on Android.

(17) Hackers will quickly sort out how to install their own Android builds on locked-down Android phones from all the major vendors, leading to threatened or actual lawsuits but no successful legal action taken.

(18) Twitter will peak and begin its decline as a human-to-human communication medium.

(19) A politican or a candidate will commit a high-profile “macaca”-like moment via Twitter.

(20) Facebook customers will become increasingly disenchanted with the company, but won’t leave in large numbers because they’ll have too much information locked up in the site.

(21) The fashionable anti-Internet argument of 2010 will be that the Net has passed its prime, supplanting the (equally bogus) 2009 fad argument that the Internet is bad for literacy.

(22) One year after the release of the Obama Administration’s Open Government Directive, the effort will be seen as a measured success. Agencies will show eagerness to embrace data transparency but will find the mechanics of releasing datasets to be long and difficult. Privacy– how to deal with personal information available in public data– will be one major hurdle.

(23) The Open Government agenda will be the bright spot in the Administration’s tech policy, which will otherwise be seen as a business-as-usual continuation of past policies.

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.

In 1985, I got my very first home computer: a Commodore Amiga 1000. At the time, it was awesome: great graphics, great sound, “real” multitasking, and so forth. Never mind that you spent half your life shuffling floppy disks around. Never mind that I kept my head full of Epson escape codes to use with my word processing program to get what I wanted out of my printer. No, no, the Amiga was wonderful stuff.

Let’s look at the Amiga’s generation. Starting with the IBM PC in 1981, the PC industry was in the midst of the transition from 8-bit micros (Commodore 64, Apple 2, Atari 800, BBC Micro, TI 99/4a, etc.) to 16/32-bit micros (IBM PC, Apple Macintosh, Commodore Amiga, Atari ST, Acorn Archimedes, etc.). These new machines each ran completely unrelated operating systems, and there was no consensus as which would be the ultimate winner. In 1985, nobody would have declared the PC’s victory to have been inevitable. Regardless, we all know how it worked out: Apple developed a small but steady market share, PCs took over the world (sans IBM), and the other computers faded away. Why?

The standard argument is “network effects.” PCs (and to a lesser extent Macs) developed sufficient followings to make them attractive platforms for developers, which in turn made them attractive to new users, which created market share, which created resources for future hardware developments, and on it went. The Amiga, on the other hand, became popular only in specific market niches, such as video processing and editing. Another benefit on the PC side was that Microsoft enabled clone shops, from Compaq to Dell and onward, to battle each other with low prices on commodity hardware. Despite the superior usability of a Mac or the superior graphics and sound of an Amiga, the PC came away the winner.

What about cellular smartphones then? I’ve got an iPhone. I have friends with Windows Mobile, Android, and Blackberry devices. When the Palm Pre comes out, it should gain significant market share as well. I’m sure there are people out there who love their Symbian or OpenMoko phones. The level of competition, today, in the smartphone world bears more than a passing resemblance to the competition in the mid-80’s PC market. So who’s going to win?

If you believe that the PCs early lead and widespread adoption by business was essential to its rise, then you could expect the Blackberry to win out. If you believe that the software/hardware coming from separate vendors was essential, then you’d favor Windows Mobile or Android. If you’re looking for network effects, look no farther than the iPhone. If you’re looking for the latest, coolest thing, then the Palm Pre sure does look attractive.

I’ll argue that this time will be different, and it’s the cloud that’s going to win. Right now, what matters to me, with my iPhone, is that I can get my email anywhere, I can make phone calls, and I can do basic web surfing. I occasionally use the GPS maps, or even watch a show purchased from the iTunes Store, but if you took those away, it wouldn’t change my life much. I’ve got pages of obscure apps, but none of them really lock me into the platform. (Example: Shazam is remarkably good at recognizing songs that it hears, but the client side of it is a very simple app that they could trivially port to any other smartphone.) On the flip side, I’m an avid consumer of Google’s resources (Gmail, Reader, Calendar, etc.). I would never buy a phone that I couldn’t connect to Google. Others will insist on being able to connect to their Exchange Server.

At the end of the day, the question isn’t whether a given smartphone interoperates with your friend’s phones, but whether it interoperates with your cloud services. You don’t need an Android to get a good mobile experience with Google, and you don’t need a Windows Mobile phone to get a good mobile experience with Exchange. Leaving one smartphone and adopting another one is, if anything, easier than transitioning with a traditional not-smartphone, since you don’t have to monkey as much with moving your address book around. As such, I think it’s reasonable to predict, in ten years, that we’ll still have at least one smartphone vendor per major cellular carrier, and perhaps more.

If we have further consolidation in the carrier market, that would put pressure on the smartphone vendors to cut costs, which could well lead to consolidation of the smartphone vendors. We could certainly also imagine carriers pushing on the smartphone vendors to include or omit particular features. We see plenty of that already. (Example: can you tether your laptop to a Palm Pre via Bluetooth? The answer seems to be a moving target.) Historically, the U.S. carriers are somewhat infamous for going out of their way to restrict what phones can do. Now, that seems to be mostly fixed, and for that, at least, we can thank Apple.

Let a thousand smartphones bloom? I sure hope so.

In our last installment, I detailed the trials and tribulations of my attempt to integrate legal, Internet-sourced video into my home theater via a hacked AppleTV, running Boxee, getting its feed from Hulu.

One day later (!), Hulu announced it was all over.

Later this week, Hulu’s content will no longer be available through Boxee. While we never had a formal relationship with Boxee, we are under no illusions about the likely Boxee user response from this move. This has weighed heavily on the Hulu team, and we know it will weigh even more so on Boxee users.

Our content providers requested that we turn off access to our content via the Boxee product, and we are respecting their wishes. While we stubbornly believe in this brave new world of media convergence — bumps and all — we are also steadfast in our belief that the best way to achieve our ambitious, never-ending mission of making media easier for users is to work hand in hand with content owners. Without their content, none of what Hulu does would be possible, including providing you content via Hulu.com and our many distribution partner websites.

(emphasis mine)

On Boxee’s blog, they wrote:

two weeks ago Hulu called and told us their content partners were asking them to remove Hulu from boxee. we tried (many times) to plead the case for keeping Hulu on boxee, but on Friday of this week, in good faith, we will be removing it. you can see their blog post about the issues they are facing.

At least I’m not to blame. Clearly, those who own content are threatened by the ideas we discussed before. Why overpay for cable when you can get the three shows you care about from Hulu for free?

Also interesting to note is the acknowledgment that there was no formal relationship between Hulu and Boxee. That’s the power of open standards. Hulu was publishing bits. Boxee was consuming those bits. The result? An integrated system, good enough to seriously consider dropping your cable TV subscription. Huzzah.

Notable by its absence: Hulu content is also supported on the Xbox 360 or Playstation 3 via PlayOn, which serves pretty much the same niche as Boxee. Similarly, there’s an XBMC Hulu plugin (recall that Boxee is based on the open-source XBMC project). We don’t know whether Hulu will continue to work with these other platforms or not. Hulu seems to be taking the approach of asking Boxee nicely to walk away. Will they ask the other projects to pull their Hulu support as well? Will all of those projects actually agree to pull the plug or will Hulu be forced to go down the failed DRM road?

It’s safe to predict that it won’t be pretty. My AppleTV can run XBMC just as well as it can run Boxee, which naturally returns us to the question of the obsolescence of cable TV.

There’s a truism that, if your product is going to become obsolete, you should be the one who makes it obsolete. Example: hardwired home telephones are going away. In rich countries, people use their cell phone so much that they eventually notice that they don’t need the landline any more. In poor countries, the cost of running wires is too high, so it’s cheaper to deploy cellular phones. Still, guess who runs the cell phone networks? It’s pretty much the same companies who run the wired phone networks. They make out just fine (except, perhaps, with international calling, where Skype and friends provide great quality for effectively nil cost).

Based on what I’ve observed, it’s safe to predict that cable TV, satellite TV, and maybe even over-the-air TV, are absolutely, inevitably, going to be rendered obsolete by Internet TV. Perhaps they can stave off the inevitable by instituting a la carte pricing plans, so I could get the two cable channels I actually care about and ignore the rest. But if they did that, their whole business model would be smashed to bits.

For my prediction to pan out, we have to ask whether the Internet can handle all that bandwidth. As an existence proof, it’s worth pointing out that I can also get AT&T U-verse for a price competitive with my present Comcast service. AT&T bumps up your DSL to around 30Mb/sec, and you get an HD DVR that sucks your shows down over your DSL line. They’re presumably using some sort of content distribution network to keep their bandwidth load reasonable, and the emphasis is on real-time TV channel watching, which lowers their need to store bits in the CDN fabric. Still, it’s reasonable to see how U-verse could scale to support video on demand with Hulu or Netflix’s full library of titles.

U-verse does a good enough job of pretending to be just like cable that it’s completely uninteresting to me. But if their standards were open and free of DRM, then third parties, like TiVo or Boxee, could build compatible boxes and we’d really have something interesting. I’d drop my cable for that.

(One of my colleagues has U-verse, and he complains that, when his kids watch TV, he can feel the Internet running slower. “Hey you kids, can you turn off the TV? I’m trying to do a big download.” It’s the future.)