PeerFlow

Payola for the Duopoly

ISP meddling with net neutrality could unite indy musicians and record labels against the duopoly:

For the music business, the failure of net neutrality presents several big problems. Musicians are at the vanguard of digital distribution of music files, video files, and other space-gobbling content. Traffic throttling will almost certainly result in placing severe limitations on the amount and kind of content musicians can put out there — and it’s pretty likely that musicians will then be forced into partnering with businesses that have fewer limits and greater access, no doubt for a fee, to get their gear online. Another issue is that, as covered recently in this column, we are seeing a whole new universe of music-related business models, and we need to see some predictability in terms of licensing methods and how artists and copyright owners get paid. One of the most compelling proposals is that P2P music sharing should be rendered commercially viable and copyright-legal by the imposition of a blanket license that would be paid at the gate (i,e., through the ISPs). Institutionalized throttling would take this plan out at the knees.

Another problem is that record labels, distributors and retail chains who are already in desperate jeopardy can’t compete with ISPs and cellular providers who, having launched their own music stores, have all the incentive in the world to steer music consumers to their own services rather than open the pipe for folks to shop elsewhere.

— Net Neutrality, By Allison Outhit, Need to Know, June 2008

This observation comes from Canada, where current attempts by some to pass legislation similar to the U.S. Digital Millenium Copyright Act (DMCA) has suddenly gotten noticed as a path to something music lovers have seen before:

McKie is referring to proposed changes modelled on the American Digital Millennium Copyright Act (DMCA), which call for a much heavier-handed approach to interpreting what kind of content uses are protected by copyright. At the same time a Canadian DMCA would accord “safe harbour” status to service providers to shelter them from a potential onslaught of copyright litigation provided they act quickly to block infringing and illegal actions on their networks. A Canadian DMCA could impact net neutrality by putting police power in the hands of the networks, while providing ISPs with strong incentives to prefer privately-negotiated content distribution deals over the chaos of user-generated traffic. The bottom line is that musicians have come to rely on the net as their number one go-to distribution and marketing tool. The net got that way by being neutral to all comers. Whether you were a platinum seller on Universal, or a couple of unknown basement-dwellers, your video had an equal chance of going viral. Without net neutrality, all the good pipe will get eaten up by whoever has the power to make the deal. Which sounds a lot like the payola days all over again.

Yep, that's what we'll get if we don't have net neutrality: payola for the duopoly.

-jsq

NFL v. Comcast: Expect this on the Internet

This is what we can expect to see on the Internet if the duopoly is left to its own devices:

NFL Network is filing a complaint with the Federal Communications Commission against cable TV giant Comcast in the latest legal wrangling between the two.

The network announced Thursday it had served Comcast with the required 10-day notice of its intent to file a complaint. NFL Network is accusing the nation's largest cable operator of discriminatory and anticompetitive treatment in violation of the Cable Act of 1992.

The two sides have been feuding over Comcast's decision to place NFL Network on a premium sports tier that customers must pay extra to receive. NFL Network sued Comcast in October 2006 over the move.

— NFL Network filing complaint with FCC against Comcast AP, 17 April 2008

The NFL Channel and the Amazon Channel. Whatever the duopoly thinks it can milk for extra revenue by putting it on a premium channel, that's what they'll do.

Defenders of the duopoly may claim they're doing it to protect copyright, but note that in this case the content provider doesn't even want it.

-jsq

ISPs Escalate Ignoring FCC

Fox started the trend of ignoring the FCC when it does something they don't like. Now the duopoly has gotten up to the same trick:

Comcast, AT&T, Time Warner Cable, and cable research company CableLabs were all invited to participate several weeks ago, but declined, Martin said. The commission again reached out to Comcast after the announcement this week that it would develop a P2P bill of rights with Pando Networks, but they again sent their regrets, he said.

— ISPs Give FCC Cold Shoulder at Internet Hearing, by Chloe Albanesius, PCMag.com, 04.17.08

You may recall at the previous hearing, at Harvard, FCC chair Kevin Martin couldn't hear the difference between participant and consumer, while Comcast hired shills off the street to take up seats so people with things to say couldn't. Now the duopoly is painting the FCC as unduly critical of themselves, and the press is going along with that, including the hometown Silicon Valley newspaper, the San Jose Mercury News, which should know better:

Internet Freedom Policy Act

Rep. Ed Markey (D-MA) and Rep. Chip Pickering (R-MS) have introduced the Internet Freedom Preservation Act of 2008, which will amend Title I of the Communications Act of 1934 to say Internet freedom, commerce, innovation, participation, and speech are the policy of the United States. It's interesting what this bill does not say. It doesn't specify any regulations, so that those who oppose net neutrality don't have a leg to stand on when they say net neutrality is all about regulation. It doesn't say "net neutrality": it says "freedom", "marketplace", "innovation", and other positive benefits. (I think I'll take a cue from Commissioner Copps and start referring to Internet freedom.) It doesn't say "consumers" except a few times, including once where that word is immediately qualified by

(i) access, use, send, receive, or offer lawful content, applications, or services over broadband networks, including the Internet;

Let's see, if "consumers" can send their own content, applications, and service, they're not really consumers in the traditional sense, now are they?

This is all very nice, in that Markey and Pickering apparently get it about what Internet freedom is about. However, why does this bill have no teeth, unlike Markey's bill of last year or the Snowe-Durgan bill before that?

RIAA Against Filtering?

Well, no. But at least the RIAA is against mandatory filtering by ISPs:

The RIAA does not support this approach in the US, opting instead to back the tradeoffs of the DMCA. That law allows ISPs a "safe harbor" for the content passing through their networks so long as they respond to takedown notices and legal requests in a timely fashion.

— RIAA chief: We don't see a need for mandatory ISP filtering, By Nate Anderson, ars technica, Published: January 30, 2008 - 11:00PM CT

This puts RIAA on the same side as Verizon, leaving AT&T out there alone. Well, except for much of the U.S. government.

-jsq

Verizon Does Something Right: No Hollywood Policing

Verizon talks sense:

We see substantial increases in the volume of traffic. Generally we see that as a good thing. We have more customers paying for more services we provide.

—Tom Tauke, executive vice president for public affairs, Verizon, quoted in Verizon Rejects Hollywood’s Call to Aid Piracy Fight, By Saul Hansell, Bits, New York Times, February 5, 2008, 3:56 pm

He's specifically responding to requests from Hollywood to police copyright. Tauke lists at least three good reasons not to:

1. Slippery slope. What else? Pornography? Gambling?
2. Liability. Especially for a deep-pockets company like Verizon.
3. Privacy:

   Anything we do has to balance the need of copyright protection with the desire of customers for privacy.

A telco concerned with its customers' privacy? I'd call that a good thing!

There is, nonetheless, a downside.

Shades of NSFNet: EDUCAUSE Proposes 100Mbps Nationwide Broadband

Shades of NSF:

EDUCAUSE, the association whose mission is to advance higher education by promoting the intelligent use of information technology, today proposed bringing the federal government, state governments, and the private sector together as part of a new approach to making high-speed Internet services available across the country.

The group, whose membership includes information technology officials from more than 2,200 colleges, universities, and other educational organizations, said that a new "universal broadband fund" would be necessary so that "Big Broadband" — services of 100 mbps — could be made widely available.

— EDUCAUSE Proposes New Approach to Broadband Development, Wendy Wigen, Peter B. Deblois, EDUCAUSE, 29 Jan 2008

Back in the 1980s, in the time of standalone dialup Bulletin Board Systems (BBSes), the National Science Foundation (NSF) deployed a nationwide backbone network called NSFNet that eventually ran at the blazing fast for the times speed of 1.55Mbps. NSF also promoted development of NSFNet regional networks, many of which eventually figured in the commercialization of Internet that took off in 1991 when former dialup network UUNET started selling Internet connectivity and former personnel of an NSFNet regional formed PSINet and also started selling Internet connectivity.

Nowadays, when the fastest most people can get as so-called broadband is 1-3Mbps DSL from telcos or maybe 3-5Mbps from cablecos, maybe it's time to do it again. Is this a plan that would work?

AT&T Filtering: Has Tim Wu Not Been Paying Attention?

Katharine Graham by Diana Walker

Tim Wu asks in Slate: Has AT&T Lost Its Mind? It seems he's discovered that:

Chances are that as you read this article, it is passing over part of AT&T's network. That matters, because last week AT&T announced that it is seriously considering plans to examine all the traffic it carries for potential violations of U.S. intellectual property laws. The prospect of AT&T, already accused of spying on our telephone calls, now scanning every e-mail and download for outlawed content is way too totalitarian for my tastes. But the bizarre twist is that the proposal is such a bad idea that it would be not just a disservice to the public but probably a disaster for AT&T itself. If I were a shareholder, I'd want to know one thing: Has AT&T, after 122 years in business, simply lost its mind?

No one knows exactly what AT&T is proposing to build. But if the company means what it says, we're looking at the beginnings of a private police state. That may sound like hyperbole, but what else do you call a system designed to monitor millions of people's Internet consumption? That's not just Orwellian; that's Orwell.

— Has AT&T Lost Its Mind?A baffling proposal to filter the Internet. By Tim Wu, Slate, Posted Wednesday, Jan. 16, 2008, at 10:15 AM ET

Come now; what did you think they were up to?

Pirates of the Duopoly: AT&T Plans Anti-Piracy Content-Recognition

Yo ho:

Remember YouTube's content filtering system? AT&T is mulling setting one up across its whole network. BusinessWeek's reporting AT&T's in talks with NBC Universal and Disney to possibly use content-recognition tech developed by Vobile—a company they've all invested in—to block pirated material from being sent to and fro along its network.

— tips@gizmodo.com Net Neuterality: AT&T Considering Scary, Content-Recognizing Anti-Piracy Filter for Entire Network, Gizmodo, by Matt Buchanan, 8 Nov 2007

Perhaps Disney, NBC, and AT&T have forgotten that Disney has made pirates very popular.

Meanwhile, it's one thing for YouTube to do content filtering. It's quite another for AT&T, as one of the duopoly of Internet access in most of the U.S., to do the same. You know, the same AT&T that censored Pearl Jam and other bands for expressing political views.

I wonder how big a backlash there will be when AT&T's customers discover more false positives than fingerprints?

-jsq

SCO, Unix, and Net Neutrality

What does this have to do with net neutrality?

The Lindon-based SCO Group Inc. says it is planning to lay off 16 of its 123 employees and has asked a federal bankruptcy court to keep their identities secret because it fears they could be harassed.

SCO also is facing an effort to push ahead with a trial in federal court in Utah that could determine that SCO owes Novell as much as $35 million in licensing fees because of a ruling in a dispute over ownership of the Unix software program.

SCO filed for bankruptcy on Sept. 14, the result of a long court battle with Novell and IBM over ownership and use of the Unix computer operating system program. SCO claimed it, and not Novell, owned the copyright to Unix and that IBM had used parts of that code in developing the Linux operating system, whose code is open to the public and can be used or altered by individuals or companies for their own uses.

— Stricken SCO to lay off 16 workers, Lindon-based firm asks court to keep ex-employees ID secret, By Tom Harvey, The Salt Lake Tribune Article Last Updated: 10/15/2007 11:45:43 PM MDT

Unix was actually invented by a couple of researchers at AT&T Bell Labs, in an attic, in their spare time. AT&T never knew what to do with Unix, and eventually shuffled it off to Western Electric, whence it finally percolated over to SCO (I've probably omitted a few owners in between).

Meanwhile, Microsoft made billions out of an operating system (and clever legal ploys such as boot loader contracts). And Unix and its offshoots such as Linux underly everything from Apple's OS-X to mobile phones to Google.

This seems to me the archetypical example of why we shouldn't expect telephone companies to innovate, no matter how much of a monopoly they have. If we want innovation, we want net neutrality and competition.

-jsq

Why Amazon Won't Get Its Own Channel: Amazon MP3 Without DRM

Amazon has started a DRM-free music store:

Every song and album on Amazon MP3 is available exclusively in the MP3 format without digital rights management (DRM) software. This means that Amazon MP3 customers are free to enjoy their music downloads using any hardware device, including PCs, Macs™, iPods™, Zunes™, Zens™, iPhones™, RAZRs™, and BlackBerrys™; organize their music using any music management application such as iTunes™ or Windows Media Player™; and burn songs to CDs.

— Amazon.com Launches Public Beta of Amazon MP3, a Digital Music Store Offering Customers Earth’s Biggest Selection of a la Carte DRM-Free MP3 Music Downloads, Amazon.com, BusinessWire, 25 Sep 2007

Interesting how they didn't mention Linux or Unix or any other free software platform.

Still, this is probably enough to keep Amazon from getting its own channel on the telco and cableco-planned closed Internet.

PS: Seen on BoingBoing.

Content Protect v. Internet Freedom

Here's another view of what the telcos and cablecos have in mind for us, or, rather, what they want in our minds: approved content. This is substantially different from the Internet freedom we have today to look at whatever we want to and to publish our own content.

Remember:

AT&T Inc. has joined Hollywood studios and recording companies in trying to keep pirated films, music and other content off its network — the first major carrier of Internet traffic to do so.

Get ready for the Amazon Channel or settle for Internet Base Service.

Pearl Jam Censored by AT&T?

Photo: AP Photo/Magnus Johansson-MaanIm

Political censorship?

After concluding our Sunday night show at Lollapalooza, fans informed us that portions of that performance were missing and may have been censored by AT&T during the "Blue Room" Live Lollapalooza Webcast.

When asked about the missing performance, AT&T informed Lollapalooza that portions of the show were in fact missing from the webcast, and that their content monitor had made a mistake in cutting them.

— LOLLAPALOOZA WEBCAST: SPONSORED/CENSORED BY AT&T? News, PearlJam.com, 7 August 2007

So, "a mistake".

Uhuh.

But it gets better.

Crack Google?

Cringely gets anxious over Google's floor bid for 700Mhz. After pointing out that Verizon and AT&T coming around to Kevin Martin's leaked counterproposal of watered down "open access" rules, he says:

Look who Google is up against -- all the largest Internet service providers in the U.S. Google will not win this even if they win the auction, because the telcos and cable companies are far more skilled and cunning when it comes to lobbying and controlling politicians than Google can ever hope to be. The telcos have spent more than a century at this game and Google hasn't even been in it for a decade. And Google's pockets are no deeper than those of the other potential bidders.

— Is Google on Crack?: Eric Schmidt bets the ranch on wireless spectrum, Robert X. Cringely, Pulpit, 27 July 2007

Cringely is missing the point about who Google is up against. These outfits have not been the largest ISPs for more than a century. They've been telephone companies for more than a century. And being around for a long time isn't necessarily a sure win. Look at the Vatican; it's been around for two thousand years, and it's managed to lose most of its traditional heartland of Europe. Sure, Google is fragile, in some senses even more fragile than Microsoft, as Cringely points out. But even Microsoft is losing market share from IE to an open source browser, Firefox. Google, as a proponent of open source that actually understands it, has a fair chance here. The incumbent duopoly telcos aren't really in the Internet business; Google is.

Maybe Cringely's right that Google alone couldn't win the auction. But Google and Sprint possibly could. Sure, Sprint is a phone company, too. But that doesn't mean it's going to side with the rest if it scents profit. Maybe with a little help from Apple.

Let's hope that's what Google is really up to, rather than expecting to get Martin to change the rules and then wait for AT&T to deliver another striped bass.

I also don't think Cringely is taking into account the stakes here.

Education Entertainment

EDUCAUSE is up in arms about a proposed amendment to the Higher Education Reauthorization Act that the Senate is supposed to be considering today. It basically makes the Secretary of Education an arm of the MPAA and requires institutions of higher education to police file sharing. I think this is the most interesting part of the amendment, where it's saying it will:

(1) the 25 institutions of higher education participating in programs under this title, which have received during the previous calendar year the highest number of written notices fromm copyright owners, or persons authorized to act on behalf of copyright holders, alleging infringement of copyright by users of the institution's information technology systems, where such notices identify with specificity the works alleged to the infringed, or a representative list of works alleged to be infringed, the date and time of the alleged infringing conduct together with information sufficient to identify the infringing user, and information sufficient to contact the copyright owner or its authorized representative; and

— Text of Amendments, SA 2314, Congressional Record -- Senate, 17 July 2007

So universities are supposed to keep lists of allegations against their students (or staff or faculty) and those lists can be used to determine their funding. Allegations, mind you, not convictions. This is once again the entertainment industry tail wagging the dog, in this case higher education. Hm, I suppose that's a bad analogy, since the entertainment industry seems to only understand the big head, not the long tail....

And as if to demonstrate Republicans have no monopoly on horribly bad ideas, this amendment is proposed by the Senate Majority Leader, Democrat Harry Reid. Is the Internet really that hard to understand?

-jsq

Russian Music Contracts

Fergie notes that a Russian court ruled for contract over copyright:

After the IFPI [International Federation of the Phonographic Industry] pressured credit card companies not to process payments to AllOfMP3.com, the company sued in a Russian court, claiming that its credit card processing contract had been broken illegally. Now, despite the fact that AllOfMP3 is no more, the company behind the service has apparently won a judgment against Visa's Russian agent.

According to CNews, a Russian technology site, the backers of AllOfMP3 have just won their case against Rosbank, the Russian company that does much of Visa's processing in that country. The court ruled that Visa can only break its contracts with merchants are when they are found guilty of breaking the law; breaking those contracts after talking to business groups like the IFPI was ruled illegal.

The ruling means that Visa may be forced to start processing payments to sites like AllTunes.com and MP3sparks, the AllOfMP3 replacement site, and Visa apparently does not plan to appeal.

— Russian court rules that Visa must process payments for Allofmp3.com, By Nate Anderson, ars technica, Published: July 16, 2007 - 01:59PM CT

Will this last?

FTC: What, Me Worry?

The U.S. Federal Trade Commission (FTC) says there's no need for net neutrality:

FTC Chairwoman Deborah Platt Majoras said that without evidence of "market failure or demonstrated consumer harm, policy makers should be particularly hesitant to enact new regulation in this area."

So in a "market" where the average customer has at most two choices, we're supposed to wait for a market failure?

Dead Air

Today is the Day of Silence for Internet Radio:

If you’re accustomed to listening to streaming Internet radio or streaming music services such as Pandora, you may be surprised to discover that when you tune into your favorite streams today you’re greeted with silence. Many Internet broadcasters—including Yahoo!, Rhapsody, Live365 stations, MTV Online, AccuRadio, and KCRW (a popular public radio station in Santa Monica, CA)—have gone silent today in a Day of Silence protest over a change in the way they’ll be charged for their services. This change, which will levy fees based on the number of listeners tuned into a particular song rather than on a percent of the broadcaster’s revenue (as was the model in the past), will likely put most Internet broadcasters out of business.

— Day of Silence, By Christopher Breen, Playlist, 26 June 2007

It's sad that the music industry as we previously knew it is dying, but nuking Internet distribution of music isn't going to solve that problem, which the record industry largely brought on itself.

Framing Net Neutrality

Here's an interesting exercise in framing net neutrality:

On the one side are traditional media - phone and cable companies, the carriers - in rare agreement. They do not want to be regulated, and they want to preserve the profitability potential that protects their network upgrades. They are therefore joined by some hardware tech firms. On the other side is what might be called the internet-industrial complex - consisting of idealistic net community folks, small start-ups, large Silicon Valley corporations pretending to be both - and Hollywood, in another strange bed fellowship.

The US Congress is in the middle; by the latest count six bills are pending, and while none is likely to be passed for now, the process itself has been a boon.

— A third way for net neutrality, By Eli Noam, Financial Times, 29 August 2006

Note "internet-industrial complex", in analogy to Eisenhower's phrase, "military-industrial complex". Yet the cablecos and telcos are said to be "in rare agreement" when actually they have long been acting on the same side on this issue; after all, it's in both their (short-term) interests to keep the number of players down. With no competition, there's no real market, and thus no real competition (which long-term means they won't be competitive with their international competitors, which are already offering speeds ten times faster for similar prices).

AT&T Attacks Content

Copyright is not just for Internet radio anymore:

AT&T Inc. has joined Hollywood studios and recording companies in trying to keep pirated films, music and other content off its network — the first major carrier of Internet traffic to do so.

...

As AT&T has begun selling pay-television services, the company has realized that its interests are more closely aligned with Hollywood, Cicconi said in an interview Tuesday. The company's top leaders recently decided to help Hollywood protect the digital copyrights to that content.

"We do recognize that a lot of our future business depends on exciting and interesting content," he said.

— AT&T to target pirated content, It joins Hollywood in trying to keep bootleg material off its network. By James S. Granelli, L.A. Times, June 13, 2007

Now it's for Internet video. Which is what "James W. Cicconi, an AT&T senior vice president," meant by "exciting and interesting content." Nevermind participatory customer-generated content, or that customers might not want AT&T monitoring their content.

Postal Radio?

What's the point of a free press if it can't be delivered?

To the surprise of many independent publishers, in February the Postal Regulatory Commission (PRC), the body in charge of determining postal rates, rejected a rate-hike plan that was submitted by the U.S. Postal Service, the people in the business of delivering the mail for the past 215 years. This plan was widely understood to call for an approximate 12 percent increase that would have hit all publications more or less equally.

Instead the PRC adopted a revised version of an extremely complicated proposal submitted by media conglomerate Time Warner that included a number of possible discounts favoring the largest publishers.

— Postal Rates = Free Press, Rate hike pushed by media conglomerate Time Warner threaten small and medium-circulation publications, By Robert W. McChesney, In These Times May 17, 2007

Why Time Warner?

Has YOUR Free Speech Been Infringed?

As the law firm for an English soccer league puts it in a letter about their lawsuit against google:

"HAS YOUR COPYRIGHT BEEN INFRINGED BY YOUTUBE?"

— YouTube class action lawsuit: Has YOUR copyright been infringed?, by Donna Bogatin, Digital Markets, zdnet blogs, May 5th, 2007

Well, I write books, so I should be concerned about copyright.

What else do they say?

The Defendants (Google, YouTube) have willfully violated the intellectual property rights that were created and made valuable by the investment – sometimes the life-long investment – of creativity, time, talent, energy, and resources of content producers other than the Defendants. The complaint asserts several legal claims against the Defendants, including direct copyright infringement, contributory copyright infringement, and vicarious copyright infringement.

Well, who could argue with that?

The Other Regulatorium

I may have mentioned that the telcos and cablecos seem to like to game legal and regulatory systems in their favor. There's another group of companies doing the same thing:

If there was ever an example of why the DMCA needs to die, this is it. The idea that a sixteen-digit number is illegal to possess, to discuss in class, or to post on a news site is offensive to a country where free speech is the first order of the Constitution. The MPAA and RIAA are conspiring to unmake America, to turn this into a country where free expression, due process, and the rule of law take a back-seat to a perpetual set of governmental handouts intended to guarantee the long-term profitability of a small handful of corrupt companies.

—EFF explains the law on AACS keys, Cory Doctorow, boingboing, Wednesday, May 2, 2007

Why would the activities of the Motion Picture Association of America and the Recording Industry Association of America be worth such a polemic by Cory, who after all lives partly by copyright in his hat as a science fiction writer?

RIAA, Radio Star

As we've seen, RIAA has been pushing for Internet Radio DRM, limitations to the Fair Use Act, and apparently elimination of Internet radio. This may seem counter-productive. Doesn't the Recording Industry Association of America want to promote its recording artists? And isn't radio a traditional way of doing that? And doesn't Internet radio provide even wider reach of marketing for RIAA's artists' products?

Well, not really:

The answer is sales. The RIAA isn't pushing for every artist, it's pushing a few select products. One star selling a million records is worth a lot more than one hundred stars selling ten thousand records each, even if the end numbers seem to tally up the same.

— Can you hear me now? by Brett Thomas, bit-tech.net, Published: 21st April 2007

In other words, apparently RIAA is pushing the fat head and doesn't care about the long tail; much less about participation.