this next thing

Covert channels in business models

2008-09-03T15:45:00.000-07:00

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?

Open-Source Licenses Affirmed

2008-08-14T15:35:00.001-07:00

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.

Enforceability of Open Source click-licenses

2008-05-07T12:15:00.000-07:00

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.

TSA tackles tough issues of national security...

2008-04-22T10:56:00.000-07:00

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"?

Careful which horse you tie your cart to...

2008-03-28T16:23:00.000-07:00

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

2008-03-28T16:01:00.000-07:00

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.

crafty circumlocutions

2007-10-16T13:30:00.000-07:00

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.

On the spectrum auction...

2007-08-01T09:40:00.000-07:00

Came across this today:

While Internet access was part of the debate, questions about Europe's system were prominent in the spectrum talks. Europeans, with their wide-open system, enjoy better services because of greater competition, argued Columbia University law Prof. Tim Wu, who likened the U.S. wireless system to land lines in the 1950s, when customers had to lease their phones from AT&T.

Is this right? It sounds like a conflation of why mobile phone companies sell locked devices with why the U.S. has been a late adopter of mobile phone technology. The latter first:

My understanding of the situation was that European countries have better systems because the landline system under state monopolies was so atrocious there, that customers flocked to mobile systems as soon as they became available. By contrast, in the U.S., the breakup and regulation of services improved landline services enough that it took considerably longer for mobile phones to penetrate the market.

Not to mention that the U.S. has this problem with very low population density that makes it difficult to cost-effectively roll out new infrastructure for any kind of communication service. If mobile providers are spending billions pushing out mobile phone towers to cover small townships in the countryside, they can't very well direct that money to developing new services.

Now, the former, with a caveat: I'm a strong advocate for net neutrality, and having a mobile phone locked to a given provider is annoying, particularly when you want to travel internationally and buy and use minutes at the local rate instead of whatever your mobile phone company gouges from you.

But that just means I don't buy mobile phones that are locked. Any locked cell phone you can also buy unlocked, with no long-term contract requirement, from a thousand different online and offline stores. It costs more because it's not being subsidized by the mobile phone company. And I can use any GSM-enabled, unlocked phone on any other GSM network with no problem.

For a case-in-point, walk into any mobile phone store in Hong Kong, and jot down the prices on any phone you like. I'll wait.

Back? Okay, now look up the same phone with any U.S. carrier. Add the rebate they give you for signing up for a service plan back into that price. Compare. Every time I've done this, the prices are exactly the same.

If there's a problem, I don't think it's that the mobile phone companies sell locked phones. It's that U.S. consumers don't want to buy phones for their full retail price. There is already the choice to buy unlocked phones, and the additional choice to buy locked and subsidized phones. That looks like more choices, and the Free Marketeers love choices.

If the argument is that mobile service providers are locking their services so that you can't use even unlocked phones on them, that's a legitimate complaint. But I've never heard of a company doing such a thing. If the argument is that even paying full retail prices to a mobile phone company, you still get a locked phone, that's just a case of unsophisticated consumership. The options are out there, and they are really not hard to find.

One last point: is there really not enough competition in cell phone companies here? Assuming everything Wu says is right, there is still competition, only a less granular one: you can't change providers month-to-month, but you certainly can year-to-year. The fact that your phone is locked to a given provider is moot if 1) it was free and 2) after a year you can get another free phone from anyone you want. Right now I can go with T-Mobile, which has amazing customer service and well-priced packages, or with Verizon, which has amazing coverage, or with AT&T, which has the iPhone. Differentiated services despite the presence of locked devices.

Once it's outside, does it need to be "customers only"?

2007-03-20T15:19:00.000-07:00

Sign outside a Vietnamese restaurant up at Kearny x Washington. It wouldn't be funny if not tied to a bright orange bucket with a grimy residue at the bottom that you don't quite want to identify.

Do you know how your Keyguard works?

2007-03-16T16:05:00.000-07:00

The firm got whiff of a tasty opportunity, so an all-attorney email was sent out to see if we could capitalize on it:

-----Original Message-----
From: xxxxxxx, xxxxx
To: DC - All Attys; NY - All Attys.; FW - All Attys.
Sent: Mon Mar 12 11:44:48 2007
Subject: "World Bank lawyer" wanted for "Prize Capital Initiative" legal work--corporate

A client is interested in hiring a lawyer to represent his interests in setting up a fund and emerging company generator using World Bank and matching funds for technological innovations that will generate global health and environmental benefits and will spin off companies on the IP developed. Others involved are Paul Allen, Sergei Brin and Richard Branson. So it’s a potentially interesting engagement.

Please advise if we can identify such a World Bank person or identify a volunteer for that position please advise.

xxxxxx xxxxxx

Not 3 minutes later, an email from one of my distinguished junior colleagues:

-----Original Message-----
From: xxxxx, xxxx
Sent: Monday, March 12, 2007 10:11 AM
To: DC - All Attys; NY - All Attys.; FW - All Attys.
Subject: Re: "World Bank lawyer" wanted for "Prize Capital Initiative" legal work--corporate

LlllLlllllLllllLllllllLlLllllllllllllllLLlLLllllllllPlLlPlPlLlLlllLlPOPppoPPooooOOoooooooOOooooooOOOoPOOoiOOOOoOOOOOOooO

xxxx xxxxx

-------------------------
Sent from my BlackBerry Wireless Device

I have no commentary on this. I just pop open the email (and the Recall request that came 10 minutes later) whenever I need a good laugh.

Discount Camera is neither discount nor a camera - discuss.

2007-03-15T09:29:00.000-07:00

I stupidly forgot to order a UV filter for the 55mm f/1.4 Nikon lens I got yesterday, so I set out to some of the camera stores in the neighborhood to see if I could find one that would do the job. Discount Camera is 2 blocks from here, so even though the Yelp reviews are almost universally - and usefully - negative, I check it out anyway. It's a filter, not a lens or a memory card or a camera, how bad could it be?

I walk in, say I need a 52mm filter, and a half-second later I'm looking at a bill of sale. Umm, how much is it? "$19.99, I can get you into a high-end brand for $5 more." I squint at the packaging. I'm no photography expert, but filters I saw online started at about $9. And those were Tiffen or Hoya, not Sunpak. Why the price discrepancy? "These are glass. No cheap plastic ones here. We only sell high-quality." What about this $9 Tiffen one I see advertised everywhere? "Tiffen makes some glass filters, some plastic filters." Nice dodge. Introduce uncertainty into what it was I got the price quote on, exactly, without actually lying about anything. I have to think about it a little more... and like the Yelp reviewers say, the guy literally snatches the thing out of my hand, and makes a big show of ripping up the bill of sale and tossing it away.

I guess he already knew I won't come back after I do my homework.

Needless to say, on Amazon, the $19.99 and $24.99 filters comes in at $9.99 at Adorama, the Hoya $11.99. Over 100% markup. Like the Yelp reviewers, I'm happy to support local business. I pay a premium to do it, and in SF a premium is a premium. But the choice isn't between buying cheap online or buying expensive from rude jerks - that isn't a choice at all. It's between buying cheap online or buying expensive from people that are genuinely passionate about what they do and provide quality goods, or at least will be honest when you're sacrificing quality for cost.

The Killers 4/7/2007 at Bill Graham Civic

2007-03-14T14:51:00.000-07:00

They didn't last long, but tickets were re-released through LiveNation yesterday, and I managed to pick up 2 after I sat on my hands for the first release.

Now I actually have to listen to the rest of the album, and stop listening to the singles so I won't be sick of them by the time the concert comes around.

seven word movie review: 300

2007-03-14T14:37:00.000-07:00

Cheesiest possible dialogue, but severed limbs abound.

My first Nikon lens

2007-03-14T14:21:00.000-07:00

I'm a total punter at photography, but I picked up a D50 digital SLR for my bar trip to Asia last summer and haven't regretted it since. It's easy, it's fun, and the pictures come out looking amazing with very little effort.

So begins the slippery slope. I started out with a 18mm- 00mm Sigma f/3.5-5.6, which worked great for the trip but suffers in low light. The day I was at 西湖 in 杭州 it was terribly overcast and most of the pictures came out dim. Well I'm waiting to be able to afford some kind of f/2.8 superzoom, I decided to try and find something that'll get great pictures in low-light. And a bonus if it's an actual Nikon lens.

Enter my first real Nikon lens, a Nikon 55mm f/1.4D prime. After hunting around on Ebay for a few weeks, and seeing used lenses going for reputable sellers around $260 + shipping, I opted to spring the $20 extra it cost on Amazon (at the time - it since went up to $329) for a brand-spanking new one. I can't wait to get this thing out and see what it can do.