March 3, 2006
Breaking News: RIM Settles Blackberry Patent Case With NTP
The Chicago Tribune is reporting that Research In Motion has settled its patent infringement case with NTP. No details of the settlement are available. The article contains commentary by analysts on what settlement means, and not much more.
The story is here (free, subscription required). More on this as details become available.
Update: The settlement is for $612.5 million. CNET has more on the terms.
DOJ Investigates Music Download Pricing
The Department of Justice is serving subpoenas to media companies over possible collusion of digital music pricing. This comes on the heels of New York Attorney General (and gubernatorial candidate) Eliot Spitzer's own investigation of the same issue. Here is one version of the story from the BBC.
Basically, there is concern that the labels could collude to set prices for digital downloads. Many a music executive laments the Apple deal where songs are prices at 99 cents or thereabouts. The regret is ceding pricing to Steve Jobs, who called the music industry "greedy" when they made noise about setting higher per-song prices. Apple recently sold it's billionth song on iTunes. More background context is that the contract between the industry players and Apple is up for renewal. A new wholesale pricing structure, however, affects all download and subscription services.
The music industry has a spotty record (no pun probably intended) when it comes to pricing. Predictions were some 10 or more years ago that CD pricing would converge with that of tapes to around $10 (See "CDS at 10: Altering music industry's track // Counting up the costs" USA Today, Tuesday, August 3, 1993). That was at a time when list price was $16.98 for new catalog single discs. Current catalog price is $18.98 for similar product. This upward pricing trend is blamed on costs of promotion and royalties, etc. But there was also the matters of colluding on CD prices when the industry was spanked by the FTC and the most recent payola scandal that his Sony (they of DRM debacle fame) and others. So why trust the industry when it comes to digital song pricing? Why, indeed.
Legal digital downloads has certainly changed music distribution and variable pricing may be in the future for consumers. But it should not come through cooperative marketing practices. Pity the industry on one count: through downloading they cannot make consumers by the same music over and over again by repackaging greatest hits compilations and re-shuffling tracks every couple of years. On the other hand, by tying downloaded music to hard drives, we may have to pay twice to replace music when a computer crashes. No wonder the pirate sites have a big following. Let the subpoenas go forth.
AOL To Give Non-Profits Free Access to Certified Mail System
AOL is saying that it will open up its premium email delivery service to non-profits free of charge. Details are here.
March 2, 2006
Congress Wants to Keep Your (And Their) Phone Records Private
In other congressional action, the Law Enforcement and Phone Privacy Protection Act is sailing through the House and Senate. This bill criminalizes falsely obtaining phone records and selling them on the web. The outrage is that consumers should not have to face this invasion of privacy, but one suspects that the speed at which this bill is being passed may have more to do with earlier reports of phone records of FBI agents and, gasp, political candidates (Gen. Wesley Clark) as being targets of this practice. No one, after all, wants to know how many times a lobbyist has called while sensitive legislation is in process. Still, it's hard to complain when the agendas of legislatures and their constituents coincide.
Congress To Consumer: Stop! Radio Thief
Representative Mike Ferguson and others are so concerned that you might hear a song on digital radio that you may want to record it rather than buy it. He's addressed that concern with a bill that would mandate a broadcast flag for both digital satellite radio and digital over the air radio. This is to protect intellectual property owners. The RIAA is thrilled saying the legislation is necessary to prevent Americans from assembling music libraries from broadcasts, and redistributing over the Internet and removable media.
CNET's report on this legislation suggests that the bill isn't necessarily headed for smooth sailing because some members of congress still remember a concept called "fair use." This bill would shift the definition of fair use to the industry rather than balance it between the industry and consumer.
Legislation Introduced to Enforce Net Neutrality
Congress has been busy with technological issues lately. TMCNet is reporting on a bill introduced by Senator Ron Wyden (D-Ore) that would guarantee net neutrality. This is in response to growing pressure from telecommunications companies complaining that companies such as Google and Amazon, among others, are getting a free ride on their networks. In reality, the telcos are looking to add new revenue streams by offering high bandwidth content and they would like to favor themselves in delivery to their subscribers.
Senator Wyden takes the position that net neutrality is what made the web successful, in that small mom and pop businesses have the same access to the web as the do Wal-Marts. Telcos have responded that there have been no egregious abuses of web traffic management, and in the few limited situations where it has occurred, the FCC has stepped in. Of course, there hasn't been any need to manage traffic when the telcos were not competing with content providers.
The bill would prohibit network operators from interfering with, blocking, degrading, altering, modifying or changing traffic on the Internet. This effectively precludes the two-tiers approach. The bill also establishes an appeal process to the FCC who would rule on complaints related to violation of the law (if passed). It also lets consumers connect any device to the Internet, provided it isn't harmful. This effectively keeps the Internet consumer hardware from being regulated by the carriers. The bill is likely to be opposed by the Telecom industry, but supported by consumer advocacy groups and the electronics industry. Form your PACs and get your lobbying dollars out.
Update: More materials on Sen. Wyden's Net Neutrality Bill are at ZDNet, and include a summary and links to text from the bill.
March 1, 2006
New Law and Technology Papers in the NELLCO Repository
From the NELLCO announcement:
The following papers in Law and Technology are authored by legal scholars at some of the leading law schools in the United States. These authors are posting their work in this and other subject areas to the NELLCO Legal Scholarship Repository, located at http://lsr.nellco.org . To access any of the papers in question - without charge - simply click on the links below.
Michael Suppappola, "The End of the World as We Know It? The State of Decentralized Peer-to-Peer Technologies in the Wake of Metro-Goldwin-Mayer Studios v. Grokster"
Link to abstract and full citation. Download the paper.
ABOUT THE NELLCO LEGAL SCHOLARSHIP REPOSITORY
The NELLCO Legal Scholarship Repository provides a free and persistent point of access for working papers, reports, lecture series, workshop presentations, and other scholarship emanating from NELLCO member institutions. Powered by Berkeley Electronic Press technology, the aim of the NELLCO Legal Scholarship Repository is to improve dissemination and visibility of a variety of scholarly materials throughout the academic and legal research communities.
Congress Eliminates 50% Rule for Online Education
The New York Times is reporting that Congress has removed a requirement for colleges that they must offer at least half of their courses on campus to qualify for federal student aid. The change was authored by Reps. John Boehner (R-OH) and Howard McKeon (R-CA) and attached as a rider to a budget bill. The rule was put in place in 1992 when studies showed that many online schools were set up just to get federal money.
The article points to a number of interesting developments in online education and the way business is done in Washington. The tools and technology to promote online learning have changed since 1992. Webcasting, interactive meeting software, classes conducted by chat, for example, are all possible with the commoditization of computers and software. Computers that cost several thousand dollars in 1992 can now be had in the $300-400 range. With the penetration of broadband into the average household (now around 64% for active Internet users in the United States), the delivery of educational media is viable with more or less stable strategies in place.
So what's the problem? The possibility of fraud prompted the original fifty percent rule. According to the story, the Department of Education's Inspector General was noted as saying that for-profit schools (such as those pushing online education) comprised 74 percent of his fraud cases. But countering that was aggressive lobbying combined with campaign cash donations given to Boehner, McKeon, and PACS that they control. Not hurting the effort was the hiring of A. Bradford Card, brother of Andy Card, former Transportation Secretary and current White House Chief of Staff. Lobbyist Card said he never contacted his brother about the issue, and congressional staff for Boehner and McKeon denied the changes in law were prompted by $313,000 in campaign contributions.
While this development opens up online education to more individuals, there is still the problem with accreditation and reputation. This has very real implications for the job market when someones credentials are from a school with a weak reputation. Perhaps that's where the real market shake out is going to take place. There is more detail in the article. You can find it here.
February 28, 2006
California Suit Pits Law Firm Confidentiality Against Whistle-blower Protections
One ugly case is brewing in Southern California. The Los Angeles Times is reporting about the case of Stephen Heller. He worked as a word processor for Jones Day who represented Diebold Systems. Heller copied internal documents from one attorney to another that discussed the use of uncertified voting systems in California, specifically noting that this violated election law and opened the company to lawsuits by Alameda County for breach of contract.
Diebold had been fighting lawsuits over the use of voting machines that had a turbulent history of failure. At one point, one model was banned by the California Secretary of State, although it was recertified for use in elections this year. There was also a civil suit which was settled over misrepresentations in the process of getting the vote machine contract with Alameda County.
The documents eventually wound up published on the web site of the Oakland Tribune. Hence the charges of felony access to computer data, commercial burglary, and receiving stolen property. Heller's attorney calls him a whistle-blower, but the Los Angeles District Attorney doesn't see it that way. Lots of ethical issues are going to be aired out in this one.
The L.A. Times Story is here. (free, subscription required.) While we're on the subject, check out this story in Wired News about how Diebold optical system voting equipment (and maybe those from other manufacturers) could be susceptible to a hack. That story is out of Florida.
February 27, 2006
DOJ Responds to Google Brief
The Department of Justice filed a response to Google on Friday in the case where the government is seeking search data. The government responds that Google has not identified the trade secrets Google seeks to protect, and that it is not seeking personally identifiable information. Philip B. Stark, the academic acting as a consultant for the government said the panned study involves running random samples of queries from the data in Google's search engine and categorizing the results.
PC Pro has the story.
February 26, 2006
Deutsche Telekon CEO Derides Internet Free Lunch
Deutsche Telekom AG CEO Kai-Uwe Ricke has joined the ranks of telecommunication executives calling for content providers such as Google and Yahoo to pay for using the Internet pipes DT provides. He joins John Thorne, senior vice president and deputy general counsel at Verizon Communications, Inc. and Ed Whitacre, CEO and Chairman of the old SBC and new AT&T in calling for a payment structure based on tiered service. They complain that major companies who do business on the Internet get a free ride on the high speed networks they provide.
Many of these companies have contemplated upgrading their networks to provide high speed video and other media to their customers. On on hand, they see the move as essential to open up another revenue stream from their customers. On the other, they would not like to share the benefits of their networks with competition who, in their view, piggy-back with "cheap servers" on their investments. On the mutant third hand is the tradition that the Internet is not owned by anyone.
There is intense lobbying going on in Washington over this issue as congress considers revisiting the Telecommunications Act of 1996. Certainly life has changed in 10 years as the net has become more advanced and services more sophisticated. Everyone is trying to make a buck from the web, to put it mildly. The telcos would love to go to the cell phone model where calls are paid for by the sender and receiver. The question is whether there is political will to resist these changes. Or if not, whether consumers will buy into this plan.
Where there's money to be made, though, you can bet that a lot of Internet money is going to wind up in the pockets of congress, all for legitimate campaign purposes without a doubt!
Mac World has details.