Challenges

One of the messages that I have been attempting to communicate through this blog (successfully, I should hope) is that corporate behavior, while demonstrably rational, often lacks alignment with the public interest. This idea, which is not to be confused with the comparatively simplistic notion of corporate greed, is rooted in a genuine but ultimately reconcilable mismatch between the preferences of the public and those of private institutions. None of this is particularly surprising in an economic or political context; balancing market health with the public interest has traditionally been one of capitalism's greatest challanges. 

With whom does the responsibility lie for bridging this gap? Most would argue that it lies with the state, though there is considerable debate as to the extent of this responsibility. I doubt anyone would disagree that the  government should regulate or prohibit such undesirable (but potentially profitable) markets as child pornography, yet the government's role in issues such offshore oil drilling (or net neutrality, for that matter) is the subject of much debate. 

The two issues that I have discussed in this blog, DRM and net neutrality, represent radically different governmental approaches to the problem of balancing public and private interests. While net neutrality represents an attempt by the government to preserve the public interest, solutions to DRM related issues have signaled an almost complete alignment with the private sector. The logic behind these divergent policy decisions is beyond the scope of my discussion here, but hopefully I have demonstrated the influential role of the state in such conflicts. When we discuss new media, it's important that we maintain a sense of the ways in which this age-old issue can manifest itself on the electronic frontier. 

Net Neutrality, pt. III

You may recall that it was John Hodgman who pointed out that without net neutrality, internet service providers would be free to structure their service in such a way that they could exercise direct control over the flow of traffic. By prioritizing certain "packets" over others, these companies would be empowered to make some sites much more difficult (or easy) for end users to reach. This is disconcerting for two reasons: first, it gives corporations the de facto authority to censor speech.

In the absence of net neutrality, any site or blog critical of a particular ISP might suddenly find itself starved of bandwidth. For an ISP, this is just common sense; if it costs next to nothing to prevent what essentially constitutes negative advertising, why not do it? For bloggers, however,  it serves as a deterrent to voicing  complaints or saying negative things about a company for fear of being silenced. So not only could this type of deregulation censor existing speech, but it could shape future speech as well. There's also no reason to assume that this phenomenon would be limited to overt negativity about specific corporations; a site opposing a corporation's stance on an issue like environmental legislation might find itself similarly threatened.

The second, related concern is that deregulation would likely result in anticompetitive behavior by incentivizing exclusivity contracts and conglomeration. This is a common complaint about corporate culture in general, and it has been echoed in several sectors of society.

When the Iphone was released in early 2007, AT&T detractors (of which there are many) were disappointed to hear that the company had been given the exclusive right to sell contracts for the device. In effect, if you wanted to own an Iphone, you had to use AT&T as your carrier. Only now, four years later, is Apple beginning to allow consumers to purchase contracts with other providers. No doubt the deal was lucrative for both Apple and AT&T; but was it good for consumers? A primary fear of monopolies is that the inherent lack competition tends to result in artificially inflated prices, inferior products, and diminished innovation. And it's true that Iphone users have generally been overcharged for relatively spotty service.

If this principle were to be applied to online, the situation becomes much more grave. If Comcast and Amazon were to square off against AT&T and Buy.com, for example, who would win? Certainly not consumers, because Amazon and Buy.com would no longer need to compete with eachother's prices. If ISP's were allowed to prioritize one type of packet over another, this could become a very real possibility.

Don't Reproduce Me, Pt. II

While I hope that last week's post demonstrated the rationale behind DRM systems, there exist a number of technical limitations that, in my opinion, render its use unwise.

Perhaps the most important of these limitations is the analog hole. This phenomenon means that any media file, regardless of its type, must be preserved completely intact within an encryption. For practical purposes, this means that any software DRM protection is inherently vulnerable to circumvention. And thanks to numerous other vulnerabilities inherent to DRM systems, it's quite common for DRM on video games to be cracked the very day the game is released.

What does this mean for us? A number of things. First, it has ushered in the passage of particularly harsh anti-circumvention legislation. It is currently illegal in most cases for you to circumvent a DRM protection, even if  your reproduction of the file would otherwise be legal. Randall Munroe, the author of xkcd, puts it quite eloquently:

In other words, it would be illegal (under DMCA 1201) to "try to keep" music that you purchased legitimately because you would be cracking DRM protections. This glaring legislative oversight aside, the comic also brings up another interesting point: that DRM makes a product less appealing. 

Consider the plight of a gamer who wants to play Assassin's Creed II. Because of the flaws inherent to all DRM systems, there are unrestricted, free copies of the game readily available. If the consumer was to purchase a legitimate copy of the game, it would be laden with DRM. Never mind the $60 difference in price (which is by no means negligible); the requirement that players maintain a constant online connection in order to play the game has rendered the legitimate copy objectively inferior to the pirated version, which has no such limitation. Which way do the incentives point? 

This brings us about to my last point about DRM: that it creates far more problems for legitimate users than it does for pirates. As I stated above, pirates are capable of circumventing even the most advanced protections available. In a very real sense, people who choose to purchase a legitimate copy of Assassin's Creed II are being punished for crimes they did not commit. All the while, pirates everywhere are enjoying a superior version of the game. 

To be honest, this isn't much of an exaggeration 

Don't Reproduce Me, Pt. I

Given the nature of today's CAT 125 lecture (as well as the readings preceding it), I thought I might shift gears this week and discuss a topic even nearer and dearer to my heart than net neutrality: copyright. Copyright law is my chosen profession (at least for the time being), and  I always intended to have this blog expand to digital rights issues beyond net neutrality. Today's lecture presented an opportunity to do just that. 

Last March, the video game developer/publisher Ubisoft released a PC version of its critically acclaimed title Assassin's Creed II.

Embedded in its code was one of the more invasive forms of DRM (Digital Rights Management) protection yet conceived: "Always-on DRM." Players were required, even in single player mode, to maintain a constant connection to Ubisoft's servers; if their internet connection was interrupted or even sufficiently slowed, players would be immediately booted from their legitimately purchased game. The company reasoned that this could prevent piracy by remotely authenticating each and every copy of the title.

Some argue that this technology—a radical departure from the simple cd-checks of the past—places too many restrictions on legitimate users. Rather than focus on this particular measure, however, I'd like to discuss the logic underlying DRM as a whole. What lead to its implementation?

In many ways, it's as easy to understand the rationale behind Ubisoft's desire to control its product as it is to understand the rationale behind the opposition to net neutrality. In several respects, these positions are very similar and very rational. Any content producer must be primarily interested in collecting revenue from its content. They can't be expected to work for free, and every pirated copy of a game is one less copy that could have been sold. Given the exponential increases in the cost of game development over the past ten years, it's understandable that publishers are growing more protective of their margins.

Perhaps the biggest problem with DRM is that it's a fantastic idea...in theory. Given the ubiquity of copying technology, a perfect technical measure that could prevent unauthorized reproductions of a work would likely incentivize the production of new content. It would inhibit what many content producers consider to be stealing. The caveat is that no such system is perfect. It has been argued by some that the externalities associated with these measures have proven worse than the problems they were intended to prevent, and I intend to go over some of those issues next week.

Net Neutrality, pt. II

In my last post, I included an admittedly one-sided video explaining the basics of net neutrality. While I believe that Stewart and Hodgman make a strong case in favor this type of regulation, the exploration of such a complex issue demands a more thorough analysis of the costs and benefits associated with its implementation. Misconceptions aside, there are numerous valid arguments on both sides of the issue.

Stewart and Hodgman's points, while humorous and persuasive in their way, are not unassailable. Hodgman's joke that "it's as if the richer companies have no advantage at all" seems to indicate, albeit sarcastically, that his opposition is rooted in corporate greed. It begs the question: why do large corporations oppose net neutrality? 

The primary reason for this is that it is more costly for internet service providers, or ISP's, to route traffic to less well known sites. It would seem only reasonable that they should have a right to charge an additional fee for that traffic, or route it in a less expensive way. Some ISP's, such as AT&T, have actually paid for the physical infrastructure (such as phone lines) through which internet traffic travels. Shouldn't that ownership grant them a say in the way the infrastructure is used? 

These are powerful arguments, both philosophically and economically. If a company invests in a particular product, shouldn't it be their right to determine the particulars of that product? Otherwise it would compromise their ability to sell it, and consequently, deliver an inferior product to those who purchased it. Conversely, people who don't like that product have the option to "pick up and leave", or move to a seller with better terms or a more well-tailored product. In this context, corporations aren't behaving "greedily"; they're behaving the way they would be expected to behave under the circumstances. Even the most fleeting examination of their incentive structure would give strong indications as to why companies would prefer to be left to their own devices.  

Net Neutrality

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Net Neutrality Act
www.thedailyshow.com
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The preceding video, while somewhat one-sided, is quite possibly the most palatable explanation of net neutrality available. This is not because it serves a particular agenda (which it does), but because it provides a simple, straightforward contextual foundation for the issue. The internet is a frequently misunderstood phenomenon, after all, and apparently even the people responsible for its regulation are prone to the most egregious misconceptions about its structure. Stewart and Hodgman's "packets", while humorous, also provide us with a valuable conceptual model of which the larger portion of the American populace is likely unaware.

More than once, the more esoteric aspects of net neutrality have been seized, misrepresented, and thrust upon an unsuspecting public to serve political ends. A recent push by the FCC to enforce net neutrality was branded by several media outlets as an attempt to "regulate the internet".

Of course, this is not technically untrue; net neutrality does effectively impose regulations on the way in which the internet functions. But it's not difficult to see how such a characterization would be deceptive. First, the regulations in question sought to maintain the existing structure of the internet, rather than alter it. Second, net neutrality seeks primarily to regulate corporate behavior, and has little if anything to do with the behavior of individual users. The resulting outcry of fear that the FCC somehow sought to restrict or impede the free flow of ideas online was both misplaced and entirely avoidable. Ironically, one of the reasons net neutrality was first implemented was to prevent exactly what everybody became so afraid of.

The conception and implementation of any policy regime requires a firm understanding of the relevant issues, and Hodgman's arguments provide us with a step in the right direction.