RatcliffeBlog - Mitch Thinking Out Loud

California to Regulate VoIP

Following the lead of Minnesota and Wisconsin, the state of California is reportedly going to regulate voice over IP (VoIP) services, according to CNET.

"They sure look like a phone company in nearly every regard," said John Leutza, director of the California Public Utilities Commission's telecommunications division. "This will be California's policy going forward."

This would be a good example of why California is having trouble cultivating new innovative technology industries; the urgency to collect irrational regulatory fees drives away innovators.

What was the reason for regulating telephony? For almost a century, voice services were delivered on lines owned exclusively by one company whose rates had to be controlled in the public interest, later that had to be forced open to competitors. But VoIP is just another kind of data, even if the companies providing interconnections to the plain old telephone system do issue a bill that looks like a phone bill (VoIP services might have a number associated with them or they may not, but numeric services are certainly what will succeed, because there are a lot of old numeric phones around). Imposing an old model on a service that is indistinguishable from other data carried on an IP network does not make sense, since you should have to regulate all the data services in order to treat telephony equally. But we don't regulate streaming content, nor Excel files sent between coworkers. For some reason, VoIP traffic on the network is "different." Vonage may connect calls to the switched network, but it doesn't hold any monopoly position in the market and its user interface on the Web is oriented toward message management, just like email. So, what is the rational explanation for regulating VoIP other than "it looks like voice telephony"?

It seems that all California is doing is looking for state revenues to solve its budget crisis. There is no monopoly and prices for these services are already falling as new competitors bring VoIP applications and services to market.

By contrast, California does need to reregulate its energy industry in order to avoid collusion among competitors who are, in fact, not competitors, but who work together to keep the prices of electricity artificially high, which led to the California budget crisis in the first place. How about a little more success in that market before inflicting this stupidity on VoIP.

The Freedom To Listen?

"I think most people, though, came here to listen and I think the people who don't allow people to listen are infringing on their civil liberties."

--Deputy Secretary of Defense Paul Wolfowitz, responding to hecklers at the New Yorker Festival, defining a new responsibility in America, the obligation to shut up and listen.

Why Protect Reporter's Notes?

Dan Gillmor comments on reports that the Department of Justice is sending letters to journalists telling them to be prepared to hand over their notes for use in investigations: "This is wrong, pure and simple."

It is a short step from obliterating the First Amendment protection of a free press to wiping out freedom of speech completely. Everyone should be resisting these erosions of liberty in little bits every day. Start today by sending a letter to your Congressional delegation asking them to fight Ashcroft's trampling of the First Amendment. Here's a template letter:

Dear [Representative/Senator],

I am writing to urge you to introduce legislation that prevents the Department of Justice from demanding access to reporters' notes, email and source contact information for use in criminal investigations. This is a flagrant violation of the First Amendment and risks not only the freedom of the press but the right to free speech.

The Federal Bureau of Investigation has sent letters to a group of reporters who covered the case of Adrian Lamo, according to Mark Rasch, a writer for The Register, a British information technology Web site. "e letters warn them to expect subpoenas for all documents relating to the hacker, including, apparently, their own notes, e-mails, impressions, interviews with third parties, independent investigations, privileged conversations and communications, off the record statements, and expense and travel reports related to stories about Lamo."

While I do not approve of the computer intrusions Mr. Lamo is accused of undertaking, it is the tradition and law of the United States to protect the press from intrusions by police investigations -- the police, if they have not successfully built a case against an accused person have never had recourse to substitute the research conducted by journalists for their own investigative efforts. In other words, as a citizen of the United States, I appeal to you to re-establish the rule of law that has sustained our democracy for more than 210 years.

I urge you specifically to reverse all portions of the USA Patriot Act that contravene American political and social values in the interest of increased security. I am not willing to trade freedom for a modicum of comfort in my day to day life. The Congress has granted the Department of Justice, the Department of Homeland Security and other police and intelligence agencies substantially increased budgets since the attacks on the World Trade Center and Pentagon; please, require that these agencies do their jobs legally and with the greatest respect for liberty, starting with the freedom of the press.

I thank you for your attention to this matter and will be watching your actions attentively as we enter another election year.

Sincerely,

Is Technology Killing Jobs?

Joi Ito has a pointer to a Slashdot discussion about this O'Reilly article on the impact of computers on the work opportunities available for people today.

My personal opinion is that short term quarter-by-quarter capitalism can't possibly think long term enough to deal with many of the larger social issues. I don't think it's just about creating jobs. I think issues such as the environment, poverty, privacy, even computer architectures defy short term profits/gains thinking sometimes. I think it's a good idea for computer professionals to be socially responsible and think long term whenever possible. (See CPSR and EFF ).

I think the idea of creating jobs directly by writing software for small businesses is a bit complex. I think that "good jobs" come from innovation and new industries. Many old industries such as the restaurant business are rather zero-sum. I think that increasing the public domain and the commons (spectrum, computer software, creative content...) is the best way to allow people to innovate and be entrepreneurial without being shackled in the well-funded proprietary world. I think that focusing on creating and sharing intellectual wealth in the commons is the best way to create jobs.

Computers do eliminate some jobs every day, but that's been true of every technology along the way, since someone stopped carrying hay up a hill and, instead, the farmer got a cart to haul 10 times as much. But the question of what will people do with the time their replaced-labors create is an important one. I agree with Joi that quarter-by-quarter capitalism can't even deal with these questions. However, I think quarter-by-quarter capitalism does more to destroy jobs than any technology, because it is so shortsighted. Short-term changes in demand are often met with permanent reductions in employment, costing companies years worth of investment in individual workers and loyalty-building. We need a form of organization that keeps networks of contributors together (and lets them go where they want to go) even as the shape of business processes change.

Robert Scoble has a few thoughts on this today, as well:

The new world, though, will have more customers than our Windows XP-based one does today. It'll have people doing new things, and people building new worlds.

Anyway, one little sense that there's still immense opportunity out there: my son Patrick told me his school in Petaluma does not have a computer lab and the teachers there don't use computers or have one on their desks. That's in stark contrast to the private school that he attended in rich Los Altos. So, why is it important for "rich private" schools to have computers, but "public" schools don't?

Any question where the future leaders will come from? Any question why parents will shell out $6000 a year to send their kids to private schools?

See what I think about this issue in my previous posting about the Bush "economic policy," which amounts to gutting our ability to invest together in public resources, like schools.

Amidst the prosperity of the late 20th century, when the basic services available in advanced economies are sufficient to support widespread risk-taking, people are able to undertake entrepreneurial ventures as an alternative to regular employment. Yet, paradoxically, many families must undertake second or third jobs to provide a sufficient income. Both these trends point to the end of single-job workforces, a society where connections are forged by semi-free agent workers to bridge companies and industries through the exercise of plural talents. To attract and retain these liberated workers, companies will have to be heard and have a fulfilling role in corporate life and governance.

An organizational model that supports these new workers will combine the features of a partnership and a polity, an organized group under a consensual form of governance. It will also invite the customer into the governance of the companies that serve them, increasing dialogue with the market to provide vastly improved efficiency in reaching an optimal social outcome. This form of economic collaboration is sufficiently flexible to acknowledge a wider range of costs and benefits than a bottom-line oriented business. It allows investments to support social and economic goals based on a deliberative process, as evidenced by the appearance of social investing, collective ownership arrangements, and non-governmental organizations, which are treated as the equals of government in international venues. As companies expand beyond the borders of individual nations or as networks of independent workers form transnational partnerships, the emergent polity business model will facilitate an environment of dialogue and decision-making that incorporates broadly defined goals and criteria for success. The realization that society is information-dependent (as it has always been, though previous forms of critical information were mythical, religious or related to fungible resources) will radically alter the idea of the organization, forcing open the boundaries of the corporation to bring ideas and analysis to bear from many sources that cannot be permanently employed.

I don't understand Joi's comments about restaurant investment or other labor-intensive companies being "zero-sum," except as a general denigration of the value of labor itself, and I don't think that is what he means. Joi eats at too many good restaurants not to recognize the skill and art of food preparation and service. Code is one form of value, but so is an understanding of the interaction of spices and seafood, to name just one of the things people do that creates value in the economy that has very little or nothing to do with computing.

Ultimately, work will come from recognizing the value of individuals to the richness of our lives. Nerds contribute a lot, especially in the venues that Joi and others in this blogomowhatsit experience every day. That doesn't mean everyone will be cutting code in the future -- it would be like having a world made up of only auto mechanics.

Investing in creating systems of support and value distribution are perhaps even more powerful than writing software. Software that ties the individual contributor to the economy into global systems of value--software for small business--can have a huge impact. We just shouldn't make the mistake of measuring that impact only in the aggregate. If the individual is the basic measure of society, which I think is the case, we have to change lives one at a time with the tools and educational services facilitated by the Net.

Jobless Recovery, Lower Consumer Confidence

Here's the thing I've been warning about for a couple months come to pass. Consumer confidence cratered last month, reaching a ten year low after the third round of misguided tax cuts had their lingering effect on consumer spending. Having shoveled billions into unproductive manufacturing -- of bombs and things that, once you build them you have to pay to maintain -- while ignoring the larger issue of American competitiveness, education and trade-oriented production, consumers are seeing that their futures isn't what the Bush tax plans have at heart.

If we want not only to experience an economic recovery (a purely short-term issue), but also prepare the American people to compete in the 21st century, we have to do more to promote lasting employment in industries that export value to other economies. That means a recommitment to education at all ages, the ability for any worker to write off investments in learning, just as a company writes off capital expenses that will produce profits at a later date. Simply cutting taxes for investors, whose primary goal is return of capital, does nothing to promote growth, because they will put there money to work anywhere, not just in the United States. Since the U.S. is being gutted at every level of government, crippling the people's ability to work together through political organizing (since winning an election does nothing if the ability to tax and invest socially has been eliminated), the only option is a wholesale change in the American political process, starting with individuals banding together to invest in one another. We, all of us, not just the top one percent, will get out of this hole together or we will sink together, to paraphrase Ben Franklin.

This month, consumers showed that they see the Bush Administration is not in this economy with them, but against them. And what will the President do? Another tax cut, increasing the debt our children will pay off?

Interesting move from Disney

Disney is beginning direct distribution of movies to homes, through a device that catches data sent through existing broadcast sidebands. In other words, using space that's sitting vacant in TV spectrum, Disney will blast its movie catalog into homes and let people pay for what they want, storing only those titles on the devices, which has a capacity to hold 100 movies. The technology can be placed in a market for just $200,000 to $250,000, according to the Financial Times.

Dean's Truly Enlightened Internet Policy

Here is why I think Howard Dean would be a good president: He is comfortable with change.

Check out this Internet Policy from the Dean camp.

Dig this: Everyone should be connected; the Internet's value comes from its openness and that should be promoted; the Internet is a democracy of voices; and, most importantly, the Internet is not perfectible. This is a clear signal that he doesn't wish to dictate right and wrong, that Howard Dean believes Americans are capable of making their own choices -- the kind of stuff that my Republican grandparents believed, not because they were Republican but because they were confident about their fellow man's ability to think and reason for themself.

As A Citizen Let Me Just Say, I'd Like An Investigation

The Bush Administration refuses to cooperate with or ask for any independent investigation of the leaking of the name of a CIA operative, Virginia Plame, whose husband, former ambassador Joe Wilson, was critical of the Bush war stance.

We're not talking about a blow job in the Oval Office, which is not an actual crime, but actual disregard for the life of an American serving their country.

Revealing Plame's identity could very well be a felony punishable by up to 10 years in prison -- this is no petty crime or common adultery, it's a felony offense against an American who put their life at risk for their country. This is a reason to investigate if there ever was one and, after all the rhetorical bluster of the Republican party and the Bush Administration about its moral clarity, this refusal to at least look into who put this woman's life at risk is the height of hypocrisy.

How about if we just remove Condaleeza Rice to an undisclosed location and question her for six months without access to an attorney? That's fair, based on the civil liberties record of the Bush Administration -- after all, we wouldn't actually have to arrest her, but just detain her incommunicado, like the Bush Administration treats people.

Bushylvania is not the United States anymore, as our leaders can now accuse people of anything and detain them while simultaneously refusing to have their own actions in the public service scrutinized by an independent objective investigation when a felony has been committed by someone. Let's at least find out who committed the felony.

P2P: All Grown Up Now

The peer-to-peer software industry has its own trade group and P2P Industry Code of Conduct. Just what the downloadable music industry needs, another trade organization.

It reminds me of the line from the Pogo comic strip: "We have met the enemy and they is us."

Two Good Skype Ideas

Even if the company behind Skype is probably going to struggle for a viable business model and will see its technology replaced by a standards-compliant open soruce SIP-based VoIP service, Phil Wolff has two good ideas:

Record A Call Yes! I like this idea. I've had trouble keeping a Gentner working to record calls directly to disc and this would be a great tool.

Conference Calling This may not be possible for most Skype clients to support, since it requires multiple IP tunnels run simultaneously and that may overwhelm the processor or bandwidth available for many users. Since Skype is a peer-to-peer technology, the company could charge a modest fee for a Skype bridge that handled multiple callers. Say $5 a month or $2 a month for conferencing?

On another note, during a Skype call today, the sound faded in and out for both myself and the other call. It was strange, though, because it was not broken and static-sounding like packets were being dropped, but just seemed to fade in and out at one end or the other. Often, one of us could hear the other but could not be heard. It was as though each of our systems were losing their audio resources periodically, which isn't easily explained. Vonage, while it doesn't have the voice quality Skype offers, has not dropped calls on me or done one of these audio fade-outs (it's also nice to have a real phone number with Vonage). However, Vonage is definitely feeling the pressure of nascent VoIP competitors -- last week they cut my bill from $39.95 a month to $34.99 a month for unlimited calling.

There's a long way to go with VoIP. A long way.

Corporate Corruption At The White House

While former investment banker Frank Quattrone is on trial starting today for routing IPO shares to hedge funds that paid a premium price, Vice President Dick Cheney sits on value-accruing stock options from Halliburton that become more valuable every time the company wins a no-bid contract for the reconstruction of Iraq. The Nation has a solid screed on the question of Cheney's ethics, pointing to this exchange a couple weeks back on Meet The Press about Halliburton's $7 billion Iraq contract, which was awarded without competitive bidding:

TIM RUSSERT: Why is there no bidding?

VICE PRESIDENT CHENEY: I have no idea. Go ask the Corps of Engineers.

Considering Cheney has publicly stated he has no ties with Halliburton, yet receives deferred compensation and has the option to buy shares at a discount to their current price, he is no less corrupt than the corporate executives his government is prosecuting now.

Participatory Innovation

Good piece in the Times today about the pace of innovation and the cost of keeping up, even for large companies. A couple key quotes:

At the General Motors Corporation , research spending has stayed about the same in recent years, but Lawrence F. Burns, vice president for research and development and planning, said he has achieved better results by working with knowledgeable (and less expensive) researchers in China, India, Israel and Russia. Sharing is also a virtue, as in the research lab G.M. owns with the Boeing Company and the Raytheon Company .

Lucien P. Hughes, research director for the technology labs at Accenture , the consulting company, agreed that alliances in research are now the norm.

"The days of the large-scale insular lab - not talking to the rest of the world - I think are over for now," he said.

Finding the technology - either through internal ingenuity, outsourcing or acquisition - is only the beginning. For a time-honored company, breakthrough technologies can be as disruptive inside the company as they are externally. Too many companies are not structurally prepared to handle them, said Professor Roberts of M.I.T.

"It's not all a question of a willingness to spend," he said. "It's a willingness to participate."

Yes, it is a simple fact that you cannot employ most of the talent in the world. In fact, you can afford to employ only a fraction of the best talent, just as any baseball team can afford only a few stars. Amidst the prosperity of the late 20th century, when the basic services available in advanced economies are sufficient to support widespread risk-taking, people are able to undertake entrepreneurial ventures as an alternative to regular employment. Yet, paradoxically, many families must undertake second or third jobs to provide a sufficient income. Both these trends point to the end of single-job workforces, a society where connections are forged by semi-free agent workers to bridge companies and industries through the exercise of plural talents. To attract and retain these liberated workers, companies will have to be heard and have a fulfilling role in corporate life and governance.

An organizational model that supports these new workers will combine the features of a partnership and a polity, an organized group under a consensual form of governance. It will also invite the customer into the governance of the companies that serve them, increasing dialogue with the market to provide vastly improved efficiency in reaching an optimal social outcome. This form of economic collaboration is sufficiently flexible to acknowledge a wider range of costs and benefits than a bottom-line oriented business. It allows investments to support social and economic goals based on a deliberative process, as evidenced by the appearance of social investing, collective ownership arrangements, and non-governmental organizations, which are treated as the equals of government in international venues. As companies expand beyond the borders of individual nations or as networks of independent workers form transnational partnerships, the emergent polity business model will facilitate an environment of dialogue and decision-making that incorporates broadly defined goals and criteria for success. The realization that society is information-dependent (as it has always been, though previous forms of critical information were mythical, religious or related to fungible resources) will radically alter the idea of the organization, forcing open the boundaries the corporation to bring ideas and analysis to bear from many sources that cannot be permanently employed.

Knowing When To Fold 'Em

Baltimore Technologies launched last year and sold most of its assets this year, because, in the company's words:

Since the launch of the controlled sale process in May, Baltimore has believed that the Company lacks critical mass. During the course of the past two years the Company has succeeded in significantly reducing operational cash burn. However, Baltimore alone does not represent a platform on which to consolidate. The need for scale in today's infrastructure software market makes the disposal of Baltimore's core PKI business an obvious proposal.

I applaud their honesty. Instead of plowing more capital into a losing proposition, they did the right thing.

A Natural User Interface

Kai-Fu Lee, who worked on notable products at Apple including QuickTime and PlainTalk speech technology, is heading Microsoft's Natural Interactive Services Division, which is charged with developing a "natural user interface" for the upcoming (three years out) Longhorn operating system, according to Mary Jo Foley of Microsoft Watch.

"Our approach is not to replace the GUI (graphical user interface)," Lee told Foley. "It is to augment it. We want to find new places where natural language can add value." In other words, they don't want to recreate Microsoft BOB, the awful UI that Melinda Gates introduced around the time she was engaged to Bill Gates. BOB, which was supposed to stand for "best of both worlds (windows and a UI that looked like Bill Gates' house)" was truly the worst operating system UI ever trotted out by a major company, so Lee and his team are not making the mistake of focusing on specific physical metaphors for a "natural user interface."

But Lee is really only talking about adding voice commands, which have been available from Apple (the PlainTalk continuous speech technology, which he invented at Carnegie Mellon University) and IBM, among others, for many years. This is continuing proof that what Microsoft does, besides hiring people from other companies to catch up to those companies, is stick to a slow-and-steady approach to incremental improvements to lure customers. But if anyone has ever actually tried talking to their computer all day, especially in a crowded office, it isn't very natural. It's like talking to your car when stuck in traffic.

Economics For Emerging Economies Points To Emerging Polities

There is a passage at the end of a recent Economist article about the debt problems faced by developing economies that suggests a more flexible form of financing is possible not only for countries, but regions, industries and even individual businesses (including the self-employed individual):

"...the IMF finds that most of the recent increase in emerging-market government debt has been due not to bigger primary budget deficits, but to large swings in exchange rates and interest rates. Emerging economies need to reduce their reliance on foreign-currency and short-term debt to make interest payments less volatile. Another interesting idea suggested by the IMF economists is that governments could issue bonds on which the interest payments would be linked to a country's growth rate: the faster the rate of growth, the higher would be the interest rate paid in any year. If growth slowed, interest payments would fall, providing a useful cushion in times of economic stress. It is an idea well worth further consideration."

The International Monetary Fund report referenced is available as a PDF here, for free. The notion of a variable interest system based on growth rates could be applied across a wide variety of economic situations. Consider, for example, financing of college educations, in which the economic value of a chosen major were later applied to the interest rates of student loans -- if a student chose a very risky major and the jobs vanished due to obsolescence, loans could be forgiven completely to facilitate a return to college to study a different area. Business that strived to clean up polluted sites could be financed based on the risk and reward to society, with lower rates if the work was not as profitable (or at all profitable). Society, since it provides the capital used in banking, can set these kinds of priorities and, as a result, emergent polities, groups who invest together and in one another to accomplish some social goal, can become a viable economic entity in an environment in which the cost of money is variable based on other factors than simple bottom-line economics.

Two good books on this subject are:

Semiconductor Sales: Up, But A Mixed Picture

Global semiconductor sales grew by four percent month over month in August, totaling $13.42, according to the Semiconductor Industry Association, but U.S./Americas sales were down one-half of one percent year over year. This is the sixth consecutive month of growth and most of the growth is attributed to microprocessors and DRAM sales growth, which were up 7.8 percent and 11 percent respectively. Consumer device processors are also reported to be up 5.3 percent. See the detailed PDF for the regional numbers, which aren't as encouraging as the overall report.

This is happening for two reasons, but only one is clearly visible in the release: Christmas. Inventories for an expected stronger Christmas sales season are built today. This inventory surge happens every year, but the year-over-year sales in the United States are down, indicating that U.S. PC OEMs are not recovering while Asian and European OEMs may be. But, what is not visible in the report is the impact of defense spending, which has been accelerating for most of the year. I am not sure there is a legitimate recovery in electronics going on; it may be simply a matter of inventory build-up for a Christmas that could be worse than normal, based on declining consumer confidence and uncertainty about employment.

If You Can't Be There, Be There

Bloggercon will be Webcast. I'll be watching and IRC'ing.

I Want My Fish Phone?

Gotta wonder about the industrial design here. A fish-shaped cell phone with a high-rez screen and a truly unusual key arrangement, the Nokia 7600 will be available everywhere but the U.S. does video and audio capture but is designed specifically not to handle videoconferencing, which had been thought to be the key to 3G success. So, okay, no videophone, but it is fish shaped. Cool? I guess.

But if the phone isn't cool enough for you, check out imageware, jewelry that displays photos. This is the locket of the 21st century.

Jailing Spammers -- Maybe We Don't Need A War On Spam

Internet Advertising Report relates the content of a House Judiciary Committee move to enact the Criminal Spam Act of 2003. A second Senate Bill, the Can Spam Act of 2003, will likely be combined with the final House bill to make a final version of legislation that will put maximum penalties on fraudulent and deceptive spam deliver (that is, as far as I can tell, the sending of spam which claims you opted in when you didn't) at up five years in prison for repeat offenders. First-time spammers can get a year in prison.

Okay, now I know spam is a pain in the ass, but jail time for what amounts to the same thing that fills our postal mailboxes everyday? Can we think of a way to deal with spam--or anything--that doesn't involve jailing someone? Since a lot of spam originates overseas, what will the bill do to our actual ability to reduce spam? Seems like the answer is "nothing," unless we want to extradite spammers, which I seriously doubt falls in the scope of most extradition treaties.

Very steep financial penalties, which can be applied to foreign companies by restricting their U.S. bank accounts and transfers to their accounts overseas is certainly a more effective way to deal with unwanted email. Jail is just over the top, when the question is how to make the economics of sending spam so unattractive that most spammers will stop. Let's bankrupt these people, but not throw them in jail. Jeez, the jails are already full of a hundred other categories of non-violent offenders who are brutally abused by real violent offenders. www

Radio, Radio

I did an appearance this weekend on the WebTalkGuys, which I used to co-host. Rob and Dana wanted to talk politics, and I did -- you can listen here to a Real stream, here to a MP3 file (I am on the first half of the show, about 31 minutes).

So, this evening I got the following from Dana about the reaction to the show: "Thought you might be interested to know that we have been recieving nasty emails about the negative Bush comments. You know, the typical "move to Iraq...horrible, immoral ideas...won't ever listen again".  I've written everyone back so that now I pretty much use a templated apology and explanation. I think we've only received this kind of feedback on two other shows in five years - one when we interviewed PETA and one when you were talking about Bush back in 2000."

It is apparently unpatriotic to have an opinion not handed down from the White House, according to some people. The only good thing I can think of that would come out of a second Bush administration is that these anti-Americans who condemn free speech will probably be illiterate and unable to write their hate mail after Bush has gutted the educational system completely. You know what they say about people who can't take a joke? Right at you, dimwits.

Bush in 2004!

I got an email from ebsthompson@earthlink.net consisting in toto of: "Bush in 2004!"

Okay, so why? At least I and other bloggers, extremely conservative or among the vast radical middle, take the time to explain why we think a particular candidate or president is qualified or unqualified for office. Shouting a slogan doesn't add to the debate, it obscures it.

Why not Bush in 2004? The man has no sense of diplomacy. He genuinely seems to think that being President of the United States is akin to being the autocratic CEO of his father's generation. For all the economic reasons, read past postings or just consider these, albeit they are parodies:

or this:

Content or Communication, People are Paying More

Clay Shirky, Barry Parr and others are discussing the paid content numbers released by the Online Publishers Association, which I commented on the other day. Clay says most of the "content" that was paid for is actually "communication" and Barry says it is "advertising." I'd argue, having sat on the board of directors of Match.com for several years and watched how a mesh of messages formed into a substantial amount of the content of a successful service, that it is "advertorial" and that this is content, not communication.

Communication is a verb in the sense Clay means when he says the stuff being paid for is "social life." But what flows over a medium is content, the message, the massage, in short, a noun in contrast to the verb "communication" that conveys social life. When you describe what someone pays for, they pay for the delivery of something and for something that is delivered. It is often hard to make the kinds of distinctions Clay tosses off, like "The pattern you are describing is called lurking, and lurkers are part of the social fabric as much as the other participants." While the second clause of this sentence makes complete sense, the distinction between what is communicated and what is consumed, a different one than the idea that communication is not content or that it is somehow content free, does not hold up.

Clay says publishers are desperate to 'tell the Kontent is King story." I think the story is that people are paying for more stuff that can be experienced only through the Net. The same interactions in their face-to-face modes cost money, too. Dating happens in bars, where you pay a cover or for too many drinks to screw up the nerve to talk to someone. Hooking up for sex, when paid for and not conducted as the end result of a night in a bar, is legal only in Nevada. The fact is, though, if there is nothing on the Net, no one pays. They pay for the noun object in communication, what is said, the content of communication.

I would urge anyone thinking about this to see Jerry Michalski's excellent piece on social networking at Red Herring. He talks about two problems, the fact that services add complexity rather than reducing it and the problem of explicitness. It is the second, explicitness, that demonstrates that the content of communication becomes a thing apart from the channel communicating that information:

The second pragmatic design problem is explicitness. Making relationships explicit, available to any virtual passerby, creates subtle complications. Long ago, when SixDegrees was in full swing, I wrote its CEO, Andrew Weinreich, that people like me were unlikely to enter their important first-degree contacts, because those contacts would be exposed to solicitations from strangers pinging them, saying, "I'm five degrees from Andrew, so we should talk." I take care when I recommend people to one another; SixDegrees disrupts that process and devalues it completely.

Bizarre Turn: Hiding the Truth By Dismissing Moussaoui Charges

This is astonishing. The U.S. government has moved the dismissal of all charges against Zacarias Moussaoui, the alleged "20th hijacker," in order to stop him from questioning prisoners held at Guantanamo Bay. According to the DoJ:

"We believe that the Constitution does not require, and national security will not permit, the Government to allow Moussaoui, an avowed terrorist, to have direct access to his terrorist confederates who have been detained abroad as enemy combatants in the midst of a war. We believe there are other ways in which to assure Moussaoui the fundamentally fair trial that the Constitution does require. If the district court now dismisses the indictment -- which is the procedural step contemplated by both the earlier ruling of the Court of Appeals in this case and by the laws governing classified information -- the Government will be ensured its opportunity to obtain prompt appellate review of the direct access issue. The same procedures will ensure that Moussaoui stays detained pending appeal. We believe this will allow the Department of Justice to resolve the impediments to trial. We remain confident in the ability of our judicial system to try this case, and we look forward to bringing Moussaoui to justice."

This is astonishing. It also raises serious questions about what is going on at Guantanamo, since allowing a defendant to question detained persons hardly constitutes a risk to national security, since there is no way that communication could be conveyed to the leaders of al Queda to act upon. The recent charges of treason against to Muslims who worked at Guantanamo, too, should be examined to see if these men are being charged simply because they observed and were prepared to expose inhumane conditions at the base. If the government would drop capital charges against Moussaoui (while still detaining him as a terrorist -- violating habeus corpus, a foundational American right), then would it charge two soldiers with treason for blowing the whistle on unconstitutional treatment of prisoners?

The Constitution does not use the word "terrorist," but it did use the word "accused" and guaranteed the same rights to all persons accused of crimes in the United States. This bizarre twist, which, if carried to its logical conclusion, could result in the perpetual detention of Moussaoui because he cannot be tried fairly, is a clear indication that the time has come to demand open and fair trials for all persons accused in the "War on Terror" in the tradition of American courts and not those of tyrannies.

Segway pile up!

All Segways have been recalled. Ouch! Seems the auto-balancing scooters are just too hard for some people to ride. President Bush fell off when he tried. This is not a guy to be trifled with, because the Consumer Product Safety Commission answers to him.

Seems that when people ride their Segway after the battery runs low -- when they ignore the battery warning -- the scooter can crash. There's a software upgrade, but what it does isn't described. How much do you want to bet the upgrade simply stops the Segway when its batteries are too low to maintain its balance? So, now, you've got a scooter that stops when it's unsafe, which make sense and, compared to cars, which most folks drive with warning lights flashing sometimes, seem utterly impractical.

Yahoo IM stupidity

Yesterday, I noticed that Yahoo! IM was refusing my connection through Fire, the multi-protocol IM client I run on OS X. It seems Yahoo has decided to stop providing access to non-Yahoo client software. CNET says this affects Cerulean Studios Trillian IM client for Windows, but I can confirm it is also true of other non-Yahoo clients.

This is an incredibly dumb move. Raising walls to connectivity at a time when they are falling and anyone hoping to add value needs to address the larger IM world rather than just a small disconnected corner. When disconnected, networks die a bit.

Note to Yahoo: You've lost a customer for your IM services. If I represent any future revenue in your projections, strike it from the books, because closing the door to my Yahoo IM connectivity makes your portal less useful to me, too. Let me be clear how stupid this is: AT&T used to require people use its hardware on its telephone network. Look what happened to AT&T, and it all started with the 1968 Carter phone decision that broke the end-to-end Bell equipment monopoly. Yahoo just took a 35 year step backwards.

Kids Know They Aren't Pirates

Correspondences.org just began working with high school journalism programs to bring the voices of young people into the civic journalism project. Rob La Gatta of Redwood High School writes a piece that sums up the major issues in the digital rights management debate and demonstrates that young music fans are quite aware that their support of a band doesn't begin at the music store but comes at concerts and the souvenir stand.

Dave and NPR

I am not sure what sparked Dave Winer's comments about National Public Radio, but they are way off base. I've been close to an NPR station for a number of years and they simply do not "sell speaking spots." Furthermore, I have heard both national and local NPR broadcasts disclose potential conflicts, such as when reporting about the Bill and Melinda Gates Foundation's gifts to fight malaria the other day, when All Things Considered's anchor said something to the effect of "we are obliged to say that the Bill and Melinda Gates Foundation supports coverage of health issues on this program."

Dave recently discovered that potential conference sponsors want something for their money. Having produced a goodly number of conferences in my day, this is hardly news. This raises the question of what Dave's BloggerCon event will be, a discussion of "authenticity of voice" and "no shills" or a quasi-religious revival of Dave's definition of a blog. He assumes blogging is journalism, but that's like saying that all music is rock and roll. This thing I am typing into now is a tool that can be applied to various modes of expression, not just journalism. What I think Dave means is that we are increasingly living life on the record -- this is something that professional journalists, who do withhold comments made by sources in order to maintain relationships, have to understand. Even our sources can scoop us now, reaching a large audience at a very low cost compared to the cost of publishing, for instance, a newspaper.

What Dave is finding out is that money comes at a price, the reality that publishers and journalists have lived with for ages. The challenge is to find ways to articulate what value there is in what Dave describes as an "appropriate (unspecified) way to thank the sponsors for their contribution." NPR has a very clear way of thanking sponsors -- they do so by name at the top and bottom of the hour. That hardly makes NPR shills for corporate America -- what sometimes makes NPR seem to be shills for corporate America is the occasions when editorial judgment lapses and marketing messages become news. But, they are two different things, these acknowledgments and the lapses in judgment made by all people, not just journalists, occasionally.

This is the reason that there is an ethical code for journalism and that, when acting as a journalist a blogger needs to be aware of and acknowledge. Dave and I have agreed on this for a long time, but it isn't something that should define all blogging. Nothing and no one should define all blogging, nor any other medium. It should all be open to citizens to use to communicate, and as cost barriers fall because of digitization, they will increasingly be opened to novel use by individuals and companies.

Weblogs Inc. Follow-up

Jason McCabe Calcanis replied by email to my post about the launch of WeblogsInc.com. I suggested he post in the comments section of the posting and he said he would, but to save him time here is the thread:

Very insightful comments... thank you for taking the time, we're flattered. I've cced our CEO Brian Alvey on this if you don't mind. I think you've brought up a very important point about content ownership and something we have worked really hard on.
 

Granted, that sounds fair, but what if the partnership hasn't worked? Is the injured party, should some financial or ethical transgression have occurred, obliged to leave their work in the partnership?

Granted, that sounds fair, but what if the partnership hasn't worked? Is the injured party, should some financial or ethical transgression have occurred, obliged to leave their work in the partnership? There is something to be said for ownership (really, we're talking about control over our reputation) that allows us to refuse to be associated with another party if we've decided that the business relationship hasn't worked. If I feel the value of my contribution hasn't been honored and leave the partnership, why should what I was not compensatead for continue to be the property of another? Typically, partners separating agree on how to split the assets of the partnership. For the small business or the freelance journalist, the continuing control over the product of their labor is one of the few bits of leverage they have and it should not be forfeited lightly.

  Certainly if either party did something illegal the courts would be a way to remedy this (i.e. if we were to cook the books or if a writer were to plagiarize). Now, we don't think it would not come to this because a) we're not looking to do anything shady and our model is based upon having hundreds of happy partners. If they are not happy they go away. We both know that bloggers are not the silent types, word will spread instantly if we are jerks.   Also, I think/hope that the dual-license concept (I don't think that is a legal term, I just made it up) solve some of this issue. We're not saying we own it at all. Someone can take their content back and do whatever they want with it and we still have the historical archive so we don't build a house of cards in WeblogsInc that would collapse if, say, all our webloggers decided to go work for a similar concept at Google. The only reason I can see to take the content out of our system is because you were, as you allude to, angry at us.   Now, if our deal isn't acceptable to someone they can certainly a) do their own blog and do the business side themselves (which many will do, I'm sure) or b) partner with someone else (although I don't know of anyone out there offering a deal, certainly not with the terms spelled out on their website... I looked!).    Like you say our business is based on successful partnership. Some people will love this deal, others will hate it. We want to see where this collaborative model takes us with an open mind.   Either way we're going to give this our full effort and try to do something truly innovative.   best jason

Jason,

I understand the distinction you are making and it is a very natural one. Not sure it will work, but I am glad you are trying it.

Mitch

Look, Red Herring Is Back

A number of friends have been working to rebirth Red Herring, and here it is, back from the dead. Congrats to everyone over at the Herring, especially David and Florian.

In just one day, the founder of Silicon Alley Reporter launched WeblogsInc.com and Red Herring returns. Feels like, I don't know.... 2000 all over again?

Creating impetus for change

Seth Godin has launched WhoWillBeatBush.com, a way of wagering on the election that lets the person who correctly picks the winning Democratic candidate and the margin of victory (presumably in popular votes -- do they mean electoral votes, which have counted more in previous Bush elections?) Each entrant earns one cent toward a pot that will be awarded to the charity of the winner's choice. I like this idea, because it gives you just one more reason to go and vote -- sometimes just being able to hope you'll win the opportunity to give a large amount of money to a charity is enough for the liberal voter to get off his or her rump and go to the polls.

Thanks for the link to Joi Ito.

Microsoft Shutters IRC

I guess I can't blame Microsoft for shutting down its Internet Relay Chat (IRC) servers, because the company could have opened itself to liabilities based on the behavior of people using its servers to communicate. According to Geoff Sutton, Microsoft's general manager for Europe: "The straightforward truth of the matter is free unmoderated chat isn't safe." And where there is risk, a company with $49 billion in cash on its books can't afford to be.

Microsoft has had these problems for a long time. In 1997 and 1998, I was interim CEO of a company that policed Microsoft's NetMeeting servers for people who were dropping their pants. We literally had a group of "beat cops" who could boot a user who appeared nude. The curious thing, though, is that by making these beat cops a part of the communities they policed, we had huge support from users who appreciated not only the lowered chance of genitals being wagged about, but also the personalities and character of the people policing the room. We were very open about the role they played, but they also kept conversation going.

Is the threat of pedophiles in IRC real? Yes, but it's hardly the kind of "danger" the press makes it out to be. I also wouldn't let my kids into an IRC chat without sitting with them for a long while, to teach them what they need to do, what to watch out for and how much information about themselves they can share. I've explained to my 10-year-old, who just got his first IP connection in his room (and has had it taken away again for breaking the rules Mom and Dad laid down) that this is like getting a driver's license. He has to learn the rules of the road and he can get on the Net before he drives because there is a lot lower chance that he'll hurt someone else than behind the wheel of a car.

But is the Net a wild west of pedophiles and predators? I don't think so. It's not, as one story put it, "a signal that some of the joyful early days of the Internet have moved on a bit," according to Microsoft's Sutton, who went on to characterize the Net as a place of lost innocence. "Chat was one of those things that was a bit hippyish. It was free and open. But a small minority have changed that for everyone. It's very sad."

A Net that is free of risk is a Net without life. You prepare your kids for life, prepare them for the Net.

Daddy Like These Paid Content Numbers

Who knows how much paid content is actually porn-related (since these figures weren't broken out), but the Online Publishers Association reports that U.S. Net users spent $748 million on content in the first half of 2003. This InternetNews story reports growth is slowing, but that's really missing the point -- growth always slows as you move away from zero revenues.

The top three paid content categories - Personals/Dating, Business/Investment and Entertainment/Lifestyles - accounted for 65 percent of online content spending in the first half of 2003, up from 61 percent in 2002. Online Personals/Dating remained the leading paid content category, accounting for nearly 30 percent of all paid content spending. U.S. consumers spent $214.3 million on Personals/Dating content in the first half of 2003, up a robust 76 percent from the first two quarters of 2002. However, this percentage increase was eclipsed by the Personal Growth category, in which spending nearly doubled from $20.8 million in the first half of 2002 to $41.4 million in the same period this year.

In other words, Tony Robbins, Dr. Phil, Deepak Chopra and evangelicals are probably looking at the best growth opportunities.

Interesting to note that micro-payments (one-off payments in cents or a few dollars) are staying steady at eight percent of total spending, so there is still a long way to go before the micro-content market starts to take off. We want our information in subscription-sized chunks.

Internet Law By Mail

The Stanford Law School Center for Internet and Society has launched a cyberlaw newsletter, packets, which includes short news reports linked to source legal documents. Good stuff. Subscribe here.

See, Bowie has figured out how to earn a living despite piracy

Lisa Rein has posted a Daily Show excerpt about the RIAA settlement with a 12-year-old girl "pirate" in which David Bowie shares his opinion that "it's crazy, just crazy out there. Most industries out there are in decline at the moment." As Jon Stewart points out, Bowie seems to be doing a coffee commercial as he says this.

Years ago, at Digital World, the poet and NPR commentator Andre Codrescu was on a panel I moderated and said "Someday, people will just pay me to be me." Bowie figured that out years ago, but Codrescu was right in a larger sense (and, note, they both have Web sites today). As we change from an information-based to an information-dependent society, the people we rely on for filtering and insight into events will become more and more like the local priest, who was basically paid to read and translate Latin phrases into homilies that dealt with the death of a child or the recent outbreak of smallpox. And, you know, it's crazy, just crazy out there.

Now, in that context, is Jason Calcanis' new Weblogs Inc. the answer for business people who want to know what it all means? The mission statement on the site repeats what we know or, at least, tend to believe if we spend time blogging, that journalism is broken and that talent wants to be free and partnering is better than owning. This last idea, that partnering is better than owning, is actually an non-twist that means very little as partnership is shared ownership; the real question is how to provide a foundation for new thinking that is extensibly ownable, so that new participants can take shares of revenue for their added contributions to previous thoughts. The whole idea of the Creative Commons is that we can share ideas and, if we choose, through a Share and Share Alike non-commercial use license collect for any commercial re-use of original ideas while leaving them in the public domain for non-commerical use by others.

The end of the Weblogs Inc. pitch to would-be blogger-partners is this:

We also allow bloggers to leave our network at any time, for any reason, and take their content with them. The concept behind our agreement is that if you partner with us on a Weblog and leave a year later you can take all your content with you and do whatever you want with it. Our only condition is that we keep our copy of the content that is already in our archive. We think this is the fairest arrangement possible and that it promotes the kind of partnership we want to have with our bloggers.

Granted, that sounds fair, but what if the partnership hasn't worked? Is the injured party, should some financial or ethical transgression have occurred, obliged to leave their work in the partnership? There is something to be said for ownership (really, we're talking about control over our reputation) that allows us to refuse to be associated with another party if we've decided that the business relationship hasn't worked. If I feel the value of my contribution hasn't been honored and leave the partnership, why should what I was not compensated for continue to be the property of another? Typically, partners separating agree on how to split the assets of the partnership. For the small business or the freelance journalist, the continuing control over the product of their labor is one of the few bits of leverage they have and it should not be forfeited lightly.

I'm glad to see Weblogs Inc. says it "sincerely hope[s] to help this field mature," but it isn't clear how that will happen because they host a collection of blogs. Marketing is important, and Jason Calcanis has marketed successfully in the past. What can't be predicted is whether posting calls for bloggers, industry professional contributors and sponsors is going to provide the catalyst for a new type of trade publication, which is what the Weblogs Inc. mission statement seems to be getting at. It is certainly a nervy way to start, admitting upfront that without partners the company has nothing.

Taking Product Placement To The Limit

There is no limit how far broadcasters will go to turn a profit -- broadcasting is a profit-driven business. Two stories in the news today show some of the limits that can crop up. According to Editor and Publisher, unionized Wall Street Journal, Barron's and other Dow Jones publication writers are refusing to do on-air appearances on CNBC because they are not paid for the extra work, even though the company is paid. This is plainly unfair, since the company redefined the role of the writer to include performance and did not change the compensation for the job.

At the same time, Nokia is buying placement in a European reality show, Fashion House, in which teams of designers compete to create the most fashionable home, talking all the while on Nokia cell phones, with Nokia messaging in the show's titles, credits and bumpers at commercial breaks. This is the predictable track for product placement, but the Dow Jones practice of demanding print reporters go on-air is simple abuse of the power to hire and fire.

If Dow Jones doesn't compensate these writers, they'll be leaving and Dow Jones will either have to train up replacements, risking the editorial integrity of its publications in the meantime, or hire broadcast-trained reporters at broadcast reporter salaries. Either way, it's going to cost more than paying writers for the extra work they do for CNBC.

Consumers Ready For Net Video Subscriptions?

In-Stat/MDR says consumers are going to be spending $4.5 billion on subscription video services over the Net by 2007. I'm skeptical about the number, which represents a 460 percent increase in three years. Subscription services will require that the money come from somewhere else, given constricting consumer spending on media--complaints about the high cost of cable are a clear indicator that people are tired of paying more for content constantly. So, if consumers are going to be spending on video, it will probably come out of cable expenditures.

EFF urges the IEEE to back away from electronic voting standards

The Electronic Frontier Foundation is asking that the IEEE standards effort aimed at developing an electronic voting technology be slowed down and reconsidered. The would-be standard, IEEE 1583, is heavily influenced by the Department of Defense, which is providing the technology that will be used by a number of states in the 2004 election. Voters cannot verify their votes, eliminating any chance of auditing elections fairly.

"Members of the security community report that the current standard is flawed. P1583 is largely a design standard, describing how to configure current electronic voting machines, instead of a performance standard setting benchmarks and processes for testing the security, reliability, accessibility, and accuracy of these machines. "

As I reported at Correspondences.org on July 15, the Department of Defense is behind the technology that a dozen states will use in 2004, which is troubling in a number of dimensions. This story has been underreported by the press--the most politicized department of the Bush Administration should not be handling election technology.

Maven Media -- Narrative Expanded

I met Hilmi Ozguc when he was at Lotus and, later, Narrative Communications, one of the early Web marketing technology companies. Now he is back with Maven Networks, a DVD-quality video system currently targeted at online marketing companies. Interesting stuff, which Jeremy Allaire has been backing for some time.

It's very slick stuff, just a Narrative pushed the boundaries of earlier marketing. Narrative was acquired by @Home for $89 million in 1998. The new Russell Crowe flick from 20th Century Fox will be one of the first to use Maven's technology for online promotions. Jeremy has some useful notes about why he and General Catalyst Partners invested in Maven Networks.

The question is whether the stark difference between the jaggy quality of video on the Net with marketing surrounding or punctuating it at a much higher quality resolution will underscore exactly how crappy video on the Net is today. The technology is designed for marketing and repurposing network video and, based on the positioning, can be applied in a variety of markets to create advertorial content that, I believe, will attempt to play the part of real content on corporate-controlled networks. At some point, people tire of marketing and we need to move both original creative and editorial video technologies forward while making advances in marketing tools. I would expect that in the short term we'll see Maven introduce more tools for creators of content that lowers the production threshold, which would open the Net to a wider range of original content.

Candidate Camera?

David Hume Kennerly, a Pulitzer Prize winning photojournalist, is offering a digital camera to everyone running for governor of California so they can record their campaigns. I think we need to go much further. Photojournalism is a largely objective art, in that a camera can occasionally happen to be in the right place at the right time to capture an image of real truth. Photos taken by or of candidates are like home movies that only accidentally tell us something. We need to enable citizens to capture their experience of the candidates, which can tell us something about the issues and the people contending to lead the state. And the thing is, if the six million or so people watching CNN right now were to contribute $50 a year, a people's CNN could be launched and run in a radically new experiment in news capture and dissemination.