OT: Glad To See This Parallel Made

Even though I know that neither of them are trying to speak to me anyway: Iranian Leader, Evangelist Call Prime Minister’s Illness Deserved [pdf]

The television evangelist Pat Robertson and Iranian President Mahmoud Ahmadinejad may not agree on much, but both suggested yesterday that the severe illness of Israeli Prime Minister Ariel Sharon was deserved. Both men’s comments were immediately condemned by religious leaders.

See also Pat Robertson: God is punishing Ariel Sharon

A Tinfoil Hat Story Here

Just weird enough to enjoy on a Friday — even though the privacy question is probably moot, given that he’s buying with a credit card: Miffed man pays bank bill a penny at a time [pdf]

Unhappy when his Canadian bank began outsourcing some of its credit card processing to the United States, the man lodged his protest via the bank’s online payment system, jamming its computers by making dozens of tiny payments a day.

Don Rogers said he was worried that anti-terrorism laws in the United States could allow the U.S. government to access his data without his consent.

“I don’t want the CIA or George Bush to know how many cases of Viagra I bought last week, or what church or charities I donate to,” he told Reuters.

[…] Roger’s initial attempt at paying in pennies produced a statement over 32 feet long, according to media reports.

Music Retail Dynamics

Indie record stores doing slow fade out [pdf]

The causes of death for Rhino and Aron’s are numerous and unsurprising. Album sales are in decline, music consumers continue to migrate to music downloading and CD-burning. The loss-leader approach to CD sales at giant chains such as Wal-Mart and Best Buy have smothered mom-and-pop outfits. And when prerecorded CDs are sold, more and more often it’s through new-approach merchants that are as varied as Amazon.com and Starbucks. Closer to home and to the heart, a new competitor arose from within the indie ranks with the 2001 arrival in Hollywood of Amoeba Records, the Bay Area brand-name that opened a colossal indie store on Sunset Boulevard that siphons offbusiness from stores far and wide.

[…] “There will be more casualties, I’m sure,” [National Association of Recording Mechandisers Jim] Donio said. “There’s a conspiracy of market factors right now. It’s not just one thing … there were only two albums in 2005 that sold more than 4 million copies and there needs to be many, many more than that. In 2004 there was a small but encouraging growth in music sales after three years of decline. Then in 2005 the numbers were down again.”

Donio said the loss of singular shops such as Rhino are emotionally hard to take in an industry that puts a premium on free spirits and maverick successes.

Got The “Urge?”

Not me: Microsoft unveils entertainment strategy [pdf]

Using an appearance with Justin Timberlake, the Microsoft chairman debuted a new music service, Urge, to directly compete with the iTunes music store and interface. Urge launches with over 2 million tracks for purchase or as part of an all-you-can eat subscription, an option the iTunes music store doesn’t have. The offering will include exclusive material from MTV, though it will not be compatible with iPods, which are currently the most popular MP3 player.

SigmaTel: “We Own MP3″

So, pay up: Attack of the MP3 patent hoaders

Now, you will find no shortage of people who will argue that SigmaTel-style patent hoarding is a natural and admirable form of capitalism. The exploitation of intellectual property is a core part of the global economy and will only become more so. There are huge sums of money to be made licensing I.P., and the semiconductor industry is a pioneer in figuring out how to best do so.

But to others, patent hoarding and the ensuing litigation is little more than extortion, a parasitical kind of behavior that could hamper innovation in the industry in the long run. When companies end up spending more to defend themselves than they do on research and development, everyone may end up suffering. It’s a topic that “How the World Works” intends to follow closely, and tracking SigmaTel’s adventures in I.P. licensing looks like an awfully good hook for the narrative.

SigmaTel’s press release: SigmaTel Expands IP Licensing Program with Acquisition of Original MP3 Player Patents; Newly Expanded Global Licensing Strategy Targeted at MP3 Silicon and MP3 Player Manufacturers

Later: A reader chides me for not at least mentioning that there are codecs that are *not* legally encumbered, notably Ogg Vorbis which has seen usage at the Internet Archive, Magnatune as well as throughout the open source community. (On the downside, the BBC seems to have dropped their Ogg project.) Thanks!

Something Else From Legal Affairs

Probably an issue to pick up from the newsstands: Cool Tools for Tyrants

It is not surprising that an authoritarian regime would build powerful databases and snooping equipment and Internet-censoring devices to punish dissent and limit information. But China’s system is impressive for the sophistication of its technology, the precision of its reach, and the speed of its creation. More startling, the software and hardware for Golden Shield, Policenet, the Great Firewall, and other tools of this chillingly effective network were largely made in America.

THE UNITED STATES THRIVES ON A SYSTEM OF MARKET FREEDOM that encourages American companies to sell their legal products generally wherever and to whomever they choose. In China, few companies take advantage of market freedom more profitably than Cisco Systems of San Jose, Calif., one of the world’s most successful Internet companies, with revenues of $25 billion in 2005. Cisco makes Policenet, as well as the watchdog router that prevents Internet users in China from gaining access to banned websites. […]

Cisco has a lot of company from American firms that profit handsomely off Big Brother in China and dozens of other countries. […]

[…] Despite China’s five million bloggers, the Communist Party remains firmly in control of the nation and, for the most part, the Internet within its borders. Iran’s blogging community is perhaps the country’s liveliest political arena, yet the authoritarian Iranian government is stronger than ever, especially after a resounding victory in February 2004 elections. Contrary to the utopian view that the Internet evades local control, governments are proving adept at controlling the information that their citizens receive and share. Market freedom does not necessarily lead to personal freedom. We must at times limit the first to safeguard the second; the right to sell must sometimes yield to protect the right to speak….

For example, see Microsoft censors Chinese blogger

Questions still remain over why a site believed to be hosted in the United States has to comply with Chinese law. Microsoft responded to requests for more information on this issue by stating that “Microsoft is a multinational business and, as such, needs to manage the reality of operating in countries around the world.”

Responding to Mackinnon’s report, Microsoft’s own in-house blogger, Robert Scoble, said he was “depressed” by the news and offered Anti the opportunity to blog via his site.

“Guys over at MSN: Sorry, I don’t agree with your being used as a state-run thug,” he said. “It’s one thing to pull a list of words out of a blog using an algorithm. It’s another thing to become an agent of a government and censor an entire blogger’s work,” Scoble wrote.

Also Microsoft Shuts Blog’s Site After Complaints by Beijing

Later: Chinese bloggers take political satire offline [pdf]

Zittrain In Legal Affairs

With some familiar notions, as my PoET colleagues will recognize: Without A Net

A profoundly fortuitous convergence of historical factors has led us to today’s marvelous status quo, and many of us (with a few well-known exceptions like record company CEOs and cyber-stalkees) have enjoyed the benefits of the generative Internet/PC grid while being at most inconvenienced by its drawbacks. Unfortunately, this quasi-utopia can’t last. The explosive growth of the Internet, both in amount of usage and in the breadth of uses to which it can be put, means we now have plenty to lose if our connectivity goes seriously awry. The same generativity that fueled this growth poses the greatest threat to our connectivity. The remarkable speed with which new software from left field can achieve ubiquity means that well-crafted malware from left field can take down Net-connected PCs en masse. In short, our wonderful PCs are fundamentally vulnerable to a massive cyberattack.

[…] If the Internet—more precisely, the set of PCs attached to it—experiences a crisis of this sort, consumers may begin to clamor for the kind of reliability in PCs that they demand of nearly every other appliance, whether a coffeemaker, a television set, a Blackberry, or a mobile phone. This reliability can come only from a clamp on the ability of code to instantly run on PCs and spread to other computers, a clamp applied either by the network or by the PC itself. The infrastructure is already in place to apply such a clamp. Both Apple and Microsoft, recognizing that most PCs these days are Internet-connected, now configure their operating systems to be updated regularly by the companies. This stands to turn vendors of operating-system products into service-providing gatekeepers, possessing the potential to regulate what can and cannot run on a PC. So far, consumers have chafed at clamps that would limit their ability to copy digital books, music, and movies; they are likely to look very differently at those clamps when their PCs are crippled by a worm.

To be effective, a clamp must assume that nearly all executable code is suspect until the operating system manufacturer or some other trusted authority determines otherwise. This creates, in essence, a need for a license to code, one issued not by governments but by private gatekeepers. Like a driver’s license, which identifies and certifies its holder, a license to code could identify and certify software authors. It could be granted to a software author as a general form of certification, or it could be granted for individual software programs. Were a licensed software author to create a program that contained a virus, the author’s license would be revoked.

[…] The downside to licensing may not be obvious, but it is enormous. Clamps and licenses managed by self-interested operating-system makers would have a huge impact upon the ability of new applications to be widely disseminated. What might seem like a gated community—offering safety and stability to its residents, and a predictable landlord to complain to when something goes wrong—would actually be a prison, isolating its users and blocking their capacity to try out and adopt new applications. As a result, the true value of these applications would never be fully appreciated, since so few people would be able to use them. Techies using other operating systems would still be able to enjoy generative computing, but the public would no longer automatically be brought along for the ride.

[…] What is needed at this point, above all else, is a 21st century international Manhattan Project which brings together people of good faith in government, academia, and the private sector for the purpose of shoring up the miraculous information technology grid that is too easy to take for granted and whose seeming self-maintenance has led us into an undue complacence. The group’s charter would embrace the ethos of amateur innovation while being clear-eyed about the ways in which the research Internet and hobbyist PC of the 1970s and 1980s are straining under the pressures of serving as the world’s information backbone.

The transition to a networking infrastructure that is more secure yet roughly as dynamic as the current one will not be smooth. A decentralized and, more important, exuberantly anarchic Internet does not readily lend itself to collective action. But the danger is real and growing. We can act now to correct the vulnerabilities and ensure that those who wish to contribute to the global information grid can continue to do so without having to occupy the privileged perches of established firms or powerful governments, or conduct themselves outside the law.

Or we can wait for disaster to strike and, in the time it takes to replace today’s PCs with a 21st-century Mr. Coffee, lose the Internet as we know it.

The Joys of DRM (or the RIAA Slitting Its Throat)

From GRokLaw, a discussion of the ColdPlay DRM stink: More DRM Follies – The Coldplay Edition

Anyhow, I finally gave up. I was willing to pay money for Mozart; but I wanted to listen first, and I couldn’t. Now, no doubt my readers will find a place where I can listen, legally, and in fact, I hope they do. But the point is, I spent some time on this project, and I couldn’t find it. What should that tell the music industry? They keep shutting down and shutting down, until there is nothing left but their DRM nonsense, and no one in their right mind would agree to their terms, or at least I won’t, even if it means doing without music. I wonder if they have any idea how many people there are like me out here.

Some are already bypassing the Coldplay DRM, by such astounding feats as holding down the shift key when loading the CD. There’s more to it than that, but if I tell you, the RIAA will have to kill me, maybe by throwing me into the RIAA moat with the man-eating crocodiles, if I explain or link to it, so you’ll just have to wonder. Or Google. Oops. They’ll probably sue Google now.

Others, who bought the Coldplay CD only to find out how little it can do, are now leaving enraged comments. I saw one from a man in Canada, who said that it’s driving his family to Napster, which tells you it’s an older person writing that, because he doesn’t know the new Napster is a hobbled version of the real thing, thanks to the music industry. But it does raise two questions: 1) does it make sense for the music industry to offer customers *less* than they can get from file-sharing? and 2) what *will* play Coldplay’s CD?

The answer is: Microsoft and only Microsoft. [….]

Digital Currency: What To Do?

While the desire to be anonymous online is seen as a blow for freedom, here’s a story about what happens when anonymous cash transactions are no longer constrained by its physical bulk — a look at what the limits might be:

Gold Rush [pdf]

E-gold is a “digital currency.” Opening an account at www.e-gold.com takes only a few clicks of a mouse. Customers can use a false name if they like because no one checks. With a credit card or wire transfer, a user buys units of e-gold. Those units can then be transferred with a few more clicks to anyone else with an e-gold account. For the recipient, cashing out — changing e-gold back to regular money — is just as convenient and often just as anonymous.

E-gold appeals to “gold bugs”: people who invest in the precious metal and believe money ought to be anchored to it. E-gold boasts that its digital currency is backed by a stash of gold bars stored in London and Dubai. But e-gold also appeals to savvy online crooks who want to move money quickly and without detection. American banks and conventional cash transmitters like Western Union are legally required to monitor customers and report suspicious transactions to the government. E-gold seems to go out of its way to avoid such obligations. Its operations are in Florida, but in 2000, its principals registered the company in the lightly regulated Caribbean haven of Nevis.

Law enforcement officials worry that the little-known digital currency industry is becoming the money laundering machine of choice for cybercriminals. […]

[…] Federal officials reluctantly confirm this loophole: E-gold and other digital currencies don’t neatly fit the definition of financial institutions covered by existing self-monitoring rules established under the Bank Secrecy Act and USA Patriot Act. “It’s not like it’s regulated by someone else; it’s not regulated,” says Mark Rasch, senior vice-president of the Internet security firm Solutionary Inc. and former head of the Justice Dept.’s computer crime unit. The Treasury Dept.’s Financial Crimes Enforcement Network (FinCEN) is studying ways to close the regulatory gap. Meanwhile, U.S. officials say e-gold and similar companies should voluntarily do more to deter crime.