Wednesday, September 3, 2008

Covert channels in business models

I'm waiting until the usual privacy issues are protested and resolved before doing anything with Chrome. But the recent Information Week article describing Chrome's loading of popups even though it does not display them got me thinking about what conflicts of interest Google faces because web browsers are products that are nominally orthogonal to its business.

That is, while Mozilla makes a great Firefox browser because it is in the business of providing a web browser, and Apple makes very attractive and pleasing computers and electronics devices because it wants to lock people into its software, Google's business is in making and selling ads. Every (wonderful) service that Google has put out is motivated by a nexus with collecting information from web users to better target them with ads. A web browser does not directly promote this aim. This is similar to covert channels in information theory - where a communication is nominally conveying one form of information, but is actually a red herring concealing a second, critical piece of information. Chrome is ostensibly a web browser, but only exists as a way to funnel information on web users to Google's massive data farms.

As the Information Week article notes, features like hidden popup loading hurt Google's competitors because it makes their popup ads less effective. Since Google doesn't sell popups, it both doesn't have to sacrifice anything, and it can claim adherence to its "do not evil" mantra since most web users hate popups anyway.

The first CNET article to discuss Chrome pointed out an onerous copyright assigment clause, which thankfully has since been recanted [1]. But others, like storing all the information input into the browser, even when privacy-guarding Incognito mode is activated, are too close to Google's business model to be retracted. That is the golden egg that Chrome lays, and it's unfortunate: companies that use covert channels to derive revenue from services provided to customers generally have an unsavory character. Whenever a profit motive is tucked away, it makes it seem like the company is trying to get away with something that the consumer would not want to permit if we knew about it upfront. It certainly isn't the kind of thing that the customer would actively want, since if it was then it would be a selling point rather than buried in the fine print.

To truly be in the clear with this, Google should make the Incognito function fully anonymizing - that is, not store any information submitted to Google at all when this mode is active - or provide a user option to install plug-ins that perform this function for the user.

[1] Fun legal question: how can someone that already accepted the burdensome terms of use retroactively accept the newer terms of use, given that they already gave Google a "perpetual, irrevocable, worldwide, royalty-free, and non-exclusive license" to use that content?

Thursday, August 14, 2008

Open-Source Licenses Affirmed

The Federal Circuit issued its opinion in Jacobsen v. Katzen yesterday. The Court came out the way that it should have, finding that the conditions imposed by Open Source licenses are, in fact, "conditions" in the contract-law sense of the word. The relevance to the case is that if the terms were deemed "covenants," then there is no action in equity for enforcement - only damages. Since Open Source software is by its nature free, there are no damages recoverable, and Open Source licenses would be neutered.

There were several interesting things about this case. First, that the Federal Circuit had jurisdiction at all. While there was initially a declaratory judgment action in patent non-infringement by the plaintiff, it was not appealed. Therefore the main question on the table was interpretation of a contract under California law, with the ancillary question of copyright infringement. Both of these appellate areas are the bailiwick of the regional circuit courts, and the Federal Circuit applied Ninth Circuit law in this case. The Court's ruling on this point (per page 5 of the slip op) looks exactly right based on the relevant Congressional statutes, but it's a strange result.

Second, part II.A reads almost exactly like Ms. Hall's oral argument on the economic reasons for Open Source. While I think her arguments could have been phrased better for solid grounding in traditional economic terms, it's interesting that the Court was so receptive to these arguments.

All in all, an excellent result for fostering new economic models of software development and progression of the art.

Wednesday, May 7, 2008

Enforceability of Open Source click-licenses

Saw an interesting oral argument at the Federal Circuit today, in Jacobsen v. Katzer, on appeal from the District Court (which I assume to be of the Northern District) of California. The case presented was that petitioner open-source group posted a type of codec on a website, with a click-license that permission to copy was only given if a downloader agreed to be bound by one of four provisions of the license. Respondent software provider downloaded the code, made changes, and commercialized without following the terms. Those terms appear to be preserving the OSS copyright notice and attribution.

There was one main issue. Was the license binding, and if so, what were the terms of it. Specifically, were the four provisions "covenants" that were restrictions on behavior after formation of the contract, or were they "conditions precedent" such that no contract was performed unless they were accepted.

The reason this is interesting is that since the software was OSS, there were no damages that could be recovered. Therefore the only remedy that is available is an equitable injunction, but violation of a covenant does not give rise to equitable relief, only violation of a condition precedent.

Both lawyers did a pretty poor job of arguing. I was pretty sympathetic to the OSS advocate, but she got pushed against the wall too much by the insightful and aggressive questioning of Judge Hochberg (D. N.J., by designation). In particular, Judge Hochberg wanted to know from petitioners what economic interest of the copyright holder was protected, since copyright law protects the economic interests of the copyright holder.

Here petitioner missed the boat. She waxed on about how OSS produces better software faster than conventional methods, then listing the names of well-known OSS software, and then lists the companies that founded on the basis of OSS, and so on. But Judge Hochberg wasn't asking for the benefits to society as a whole, but to the copyright holder himself. This is particularly significant to me for this reason: the benefits of an OSS copyright holder's work goes to society whether the terms of any license are enforced or not. Indeed, there are more benefits that go to society if the OSS copyright holder's copyright is ignored, because then both the copyright holder's work and improvements made by people unwilling to be bound by OSS licensing will both produce, giving society more options.

I think the best correct answer is that the copyright holder offers his copyright in exchange for a quid pro quo. In exchange for giving license to edit and distribute his code, he demands in exchange the right to edit and distribute your code that improves on it. Therefore he has an interest in the fact that he will in the future have better code for free, which is an economic benefit flowing to him directly. Petitioner didn't say this, even though Judge Hochberg, very fairly, offered her several chances to say exactly that, and in one instance even prompted her with suggestions about what types of benefits there might be. So long as OSS is busy trying to both justify its unconventional economic approach and its unconventional philosophical approach, it will face similar struggles. Nail down the economic first, because it's right there. Judge Michel raised exactly this issue - if you're not looking for economic rights, it must be moral rights, and U.S. law simply isn't on board with those.

Respondents fared no better. They were placed in the very difficult position of having to justify their view of the contract which was pretty much unambiguous. At one point Judges Prost and Hochberg both asked, point blank: if this contract doesn't give rise to a condition that protects the OSS license, then what contract would? And respondents gave the types of unsatisfactory answers you'd expect from first round foundation-year moot court. "Well, if it said you had a license for 2 years and then it reverted back if you didn't comply with the terms of it...," to which Judge Michel replied - "well, if you never had the license in the first place, what would there be to revert?"

And just for procedural posture gravy, the panel noted that the respondent had already agreed to stop distribution, and agreed not to repeat in the future, so there was absolutely nothing for an injunction to be enforced against.

It almost makes it look like the case was set up as a softball for OSS to establish precedent for enforcement of its licenses.

Tuesday, April 22, 2008

TSA tackles tough issues of national security...

Keeping up with the recent regulations on what is and isn't permissible past the checkpoint can be pretty time consuming if you're not a regular flier. On my most recent trip I had to check (again) whether a can of shaving cream would mean I'd have to check my overnight bag. I still don't know the answer: it's a gel in the can, but it's a foam out of the can, and foams aren't regulated. It's like Schrödinger's Security - to observe that it's a gel you have to stop it from being a gel (NB, anticipating that this wouldn't tickle TSA quite the way it does me, I checked).

But I turned up the following interesting rules that, for one, make me glad that we have some of our top government minds addressing these touch issues of national security. From TSA: What To Know Before You Go (and I bet you didn't know this):

To ensure the health and welfare of certain air travelers, in the absence of suspicious activity or items, greater than 3 ounces of the following liquids, gels and aerosols are permitted through the security checkpoint in reasonable quantities for the duration of your itinerary (all exceptions must be presented to the security officer in front of the checkpoint):

...
Items used to augment the body for medical or cosmetic reasons such as mastectomy products, prosthetic breasts, bras or shells containing gels, saline solution, or other liquids; ...


(emphasis mine). There you have it. Probably based on some Echelon-type snooping of grand proportions, our government has found out that there are security risks in women exhibiting a different kind of grand proportion. My only real question here is, what are the guidelines that they give checkpoint staff for detecting these kinds of issues? What types of consequences are there for not declaring? Will they really confiscate a prosthetic breast from a mastectomied cancer survivor for failing to declare it? How does TSA even inspect a hermetically sealed gel-filled sack that is presumably well over 3.5 ounces? And for that matter, does the field guide have a heading for "suspicious busts"?

Friday, March 28, 2008

Careful which horse you tie your cart to...

Agree on all counts with this comment on Citysearch and bar codes.

Additional thought: astroturf is already endemic in Citysearch. Most people browsing on a phone while waiting outside a restaurant will likely not look at more than the first few posts, encouraging restaurants to plant favorable reviews. What's more, if reviews are negative, restaurants will just take down their sign. At most, this has exactly the same function as a magazine article in the window - I won't read it, if they have it up there it must be favorable, and I'll judge the restaurant based on the credibility of the source.

And Citysearch is exactly as credible as you'd expect an anonymous sponsorship-driven site to be.

Pandora's Box Problems

I'm a little mystified at the decision to turn off traffic cameras because of decreased revenues. I'm mystified because it seems like a kind of Pandora's Box situation, where municipalities "suffering" from decreased ticket violations can't cause behavior to be unlearned.

The article says that Dallas forecasted revenues of $15 million from its cameras. That estimate must have been based on an analysis of number of citations expected and revenue per citation in the places cameras were to be installed. The actual revenue forecast is $4 million, attributable to a decrease in the number of citations given out. Dallas' solution is to turn off the cameras.

In order for that to re-raise revenue, two things have to happen: first, people have to forget which intersections have cameras and start running red lights again. Second, Dallas has to put patrolmen in places where they'll catch those violators in the act.

I'm skeptical that the first will ever happen. At a bare minimum, the city would have to physically take down the cameras and any signs that advertise the presence of those cameras. But the deeper issue is one of ingrained habit. When I had a one-hour-plus one-way commute, every traffic violation I ever received was in one of two 3-mile stretches of road. Even today, years since I drove it on a daily basis, I scrupulously track the speed limit on those two stretches.

I'm also skeptical of the second part. I can't fathom that the cost to monitor traffic intersections with patrolmen is any less than the cost of operating the cameras. Since the article mentioned that Dallas was going to cease operating some cameras because the revenues for those camera were insufficient to even cover costs, it seems hard to justify re-placing police to monitor traffic there.

Bruce Schneier suggests raising the other side of equation, revenues per ticket, to cover the shortfall. The problem I see with that is that it will drive the disparity even further towards zero - the municipalities already have the goose that lays the golden eggs by the neck, and that would just be squeezing harder.

The nice part about moderate fines is that it has a fine granularity. Tickets are affordable enough that when they happen, they can be paid. Risk-prone individuals have tickets spread out over time so that their income can more readily absorb the cost, and risk-averse individuals that are occasionally caught in a lapse of judgment or attention won't be over-deterred.

The consequence of drastically increasing the fine is that after one violation, many people on both sides of the risk line would be forced to cease driving entirely. The revenue stream is not distributed across risk-prone and risk-averse, over a long period of time, the cost is more difficult to absorb. If the cost of a red-light violation in California were quadrupled, which appears to be the order of increase to cover it, you'd be looking at a $1,300 ticket for running a red light. This sudden, high-cost shock would force many individuals to stop driving entirely. Those individuals would be the ones that were paying fines in the first place, leaving only the good drivers.

This is the general problem I have with sin taxes, in which I also include loose driving. With all this rush to push tobacco taxes to schools, what happens when smoking education catches on and the addicts all die? By then schools and governments will be addicted to funding schools using these revenues, and will have to make up the shortfall from elsewhere in the fisc.

Tuesday, October 16, 2007

crafty circumlocutions

As part of the new fall associates starting in the office, we go to fancy welcome lunches. To greet my advisee, we went to lunch in an upscale international hotel downtown. Somehow when the appetizers came, instead of the Kobe beef "sliders" that I ordered, a butternut squash soup was placed in front of me. I pointed out to the waiter that this isn't what I ordered, but that the person next to me had ordered and didn't have his soup yet. He shuffled the soup to it's proper place and beat a hasty retreat to the kitchen to see where my burgers were.

Five minutes later he comes out with a bowl of the soup of the day (not even the butternut squash - a cream of celery laced with white truffle oil), and offered up his apologies:

"The chef did prepare your sliders, but regretfully felt that they were not up to his standards and so has declined to serve them. He would like to offer you this soup - complimentary, of course."

Of course, the odds are very long that a seasoned chef (a) doesn't have the recipe for a Kobe beef burger down pat, and (b) even if so, wouldn't send it out to let the customer judge for himself the quality of the preparation. This just looks and smells like a snow job.

The soup was fine, but not great. What grated most here is that I wasn't given the opportunity to ask for anything else. The soup of the day - which I'm sure was selected for me because it involved two seconds of ladling and a quarter second of love from the truffle oil squeeze bottle - was what I wanted least of all off the menu. But because of both the ceremonious presentation of the soup and the fact that I certainly wasn't going to make the poor service the centerpiece of this lunch left me little room to graciously request something - anything - else from the menu.

It drove home for me that what I enjoy most of trying new restaurants isn't that the food is necessarily novel, or innovative, or trendy, or anything else. It's that the staff make a real effort to understand what you, as the customer, want done to make the experience satisfying. This restaurant didn't understand that. They must have assumed that if they gave me something, for free, that it would make everything right. In fact it was the opposite: the lunch was paid for already, I'd much rather have the choice of dishes even if it must be paid for. Or even an earnest explanation of what happened so that I can take the high ground, rather than having it foisted on me.