Tax returns
Wendy Grossman asks if now is the time to revisit the debate on taxing internet sales
In 1994, when Jeff Bezos was looking for a place to put the online bookseller he intended to grow into the giant, multi-faceted online presence it is today, he began with a set of criteria that included, high up on the list, avoiding liability for sales tax as much as possible. That meant choosing a small state, so that the vast majority of the new site's customers would be elsewhere.
Bezos could make this choice because of the 1992 Supreme Court decision in Quill Corp v. North Dakota, blocking states from compelling distance sellers to collect sales tax from customers unless the seller had a substantial physical operation (a "nexus") in the customer's state. Why, the reasoning went, should a company be required to pay taxes in a state where it receives no benefit in the form of public services?
The decision helped fuel the growth of first mail-order sales and then ecommerce. And so throughout the growth of electronic commerce, Americans have gone along taking advantage of the relief from sales tax afforded by online sales. This is true despite the fact that many states have laws requiring their residents to declare and pay the sales tax on purchases over a certain amount.
Until the current online tax disputes blew up, few knew about these laws – I only learned of them from a reader email some years ago – and as far as I'm aware it isn't enforced. Doing so would require comprehensive surveillance of ecommerce sites. But this is the thing when something is new: those setting up businesses can take advantage of loopholes created for very different markets and conditions.
A similar situation applies in the UK with respect to DVD and CD sales. Fulfilled by subsidiaries or partners based in the Channel Islands, the DVD and CD sales of major retailers such as Amazon, Tesco, and others take advantage of tax relief rules intended to speed shipments of agricultural products. Basically, any package valued under £18 is exempt from VAT. For consumers, this represents substantial savings; for local shops, it represents a tough challenge.
Even before that, in the early 1990s, CompuServe and AOL, as US-based Internet service providers, were able to avoid charging VAT in the UK based on a rule making services taxable based on their point of origin. That gave those two companies a significant – 17.5 percent – advantage over native ISPs like Demon and Pipex. There were many objections to this situation, and eventually the loophole was closed and both CompuServe and AOL began charging VAT.
You can't really blame companies for taking advantage of the structures that are there. No one wants to pay more tax – or pay for more administration – than is required by law, and anyone running those companies would make the same decisions. But as the recession continues to bite and state, federal, and central governments are all scrambling to replace lost revenues from a tax base that's been dimishing, the calls to level the playing field by closing off these tax-advantage workarounds are getting louder.
This type of argument is as old as mail order. But in the beginning there was a general view – implemented also in the US as a moratorium on taxing internet services that was renewed as recently as 2007 – that exempting the internet from as many taxes as possible would help the new medium take root and flourish. There was definitely some truth to the idea that this type of encouragement helped; an early FCC proposal to surcharge users for transmitting data was dropped after 10,000 users sent letters of complaint.
Nonetheless, the FCC had to continue issuing denials for years as the dropped proposal continued to make the rounds as the "modem tax" hoax spam. The arguments for requiring out-of-state sellers to collect and remit sales taxes (or VAT) are fairly obvious. Local retailers, especially small independents, are operating at a price disadvantage (even though customers must pay shipping and delivery charges when they buy online).
Governments are losing one of their options for raising revenues to pay for public services. In addition, people buy online for many more reasons than saving money. Online shopping is convenient and offers greater choice. It is also true, though infrequently remembered, that the demographics of online shopping skew toward the wealthier members of our society - that is, the people who best afford to pay the tax. The arguments against largely boil down to the fact that collecting taxes in many jurisdictions is administratively burdensome.
There are some 8,000 different tax rates across the US's 50 states, and although there are many fewer VAT rates across Europe, once your business in a country has reached a certain threshold the rules and regulations governing each one can be byzantine and inconsistent. Creating a single, simple, and consistent tax rule to apply across the board to distance selling would answer these. No one likes paying taxes (least of all us).
But the fact that Amazon would apparently rather jettison the associates program that helped advertise and build its business than allow a state to claim those associates constitute a nexus exposing it to sales tax liability says volumes about how far we've come. And, therefore, how little the net's biggest businesses now need the help.
Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series
Image: CC-AT-NC-SA Flickr: Skinnyde
Copyright gone mad!
Milena Popova looks at the latest bizarre story to emerge as a result of overly protective copyright
Earlier this week, BoingBoing covered the story of Zazzle - an online merchandise company - taking down a badge which read “While you were reading Tolkien I was watching Evangelion”. The original story alleged that this was prompted by the Tolkien Estate claiming copyright infringement, though subsequently it has emerged that it was actually Zazzle acting on their own initiative who caused the withdrawal of the product.
While innocent in this particular case, the Tolkien Estate is notorious for a broad interpretation of copyright law. They have recently issued a cease and desist notice to the author of a novel which includes Tolkien as a character, and I have seen reports of similar actions on their part on at least two other occasions. Even more amusingly, back in 2004 the Estate and Warner Brothers claimed ownership of the word “shire”. (The Oxford English Dictionary, unsurprisingly, disagrees.)
The phenomenon of “professional descendants” is also well illustrated by this story of the Frank Herbert Estate going after the Dune roleplaying community in Second Life. One can see why this is a tempting lifestyle choice for the son or daughter of a successful dead writer. After all, they own the copyright to their parents work for 70 years after their death - they’re not only set up for life themselves, even their children can live in the security that they will benefit significantly from Grandpa or Grandma’s work.
J.R.R. Tolkien, for instance, died in 1973, which means the copyright on his work doesn’t expire until 2043. Tolkien’s youngest grandchild, Rachel, was born in 1971. She will have a claim to the copyright on her grandfather’s work until she is nearly 70 years old, despite probably not even being able to remember the man himself. Similarly, Brian Herbert - Frank’s son - would be 109 years old when the copyright on Dune expires.
I don’t know about you, but while the salary and benefits package that comes with my day job is generous, it does not guarantee the lifetime prosperity for two generations of my offspring. Last I checked, the intent of copyright was to encourage creativity - yet while Brian Herbert has at least written one or two original novels in addition to the vast output of Dune prequels and sequels, Christopher Tolkien has yet to create anything original.
Artists, musicians and writers are in an almost uniquely privileged position in our society in that, if successful, their work will continue to generate an income for their families long after their death, without those families having to lift a finger. There is only one other group this privileged: the nobility. Imagine going into a pay negotiation with your boss and stipulating that they will have to continue paying your salary to your children and grandchildren!
Professional descendants are, of course, a side effect of our inadequate copyright legislation which currently largely serves the interests of big corporations. This allows them to continue to milk the works of a select few writers, artists and musicians long beyond the timescale on which the average creative work loses its commercial value. Most copyrighted works exhaust their commercial viability within 5 to 15 years. Professional descendants like Brian Herbert and Christopher Tolkien only ride the wave of copyright extensions lobbied for by the likes of Disney. They are a very good illustration of why the system is absurd.
As a final thought, A.A. Milne died in 1956, so theoretically Winnie the Pooh should be out of copyright in about 15 years time. Given that the rights are currently indefinitely licensed to Disney, what do we think the chances are of us seeing another major push for term extension within the next decade or so?
Milena is an economics & politics graduate, an IT manager, and a campaigner for digital rights, electoral reform and women's rights. She tweets as @elmyra
Image: CC-AT-NC-SA Flickr: "00" a.k.a. |mingus| (Alessandro Carrozzo)
The threat to non-print archives
Emily Goodhand looks at the threat posed to our cultural heritage by potential restrictions on non-print archiving
Whilst the UK’s attention is drawn to the Hargreaves Review of the IP framework, a lesser-known statutory instrument is in the pipeline which could have a severe effect on legal deposit libraries if it is drafted into law.
The Department of Culture, Media and Sport (DCMS) consulted publishers and libraries on the legal requirement for publishers to provide non-print (electronic journal articles, e-books, tables, diagrams but not sound recordings or films) published items alongside print items to legal deposit libraries.
The consultation closed on the 11th January 2011, and a statutory instrument (SI) has been prepared with a view to being introduced into law. However, this SI is not satisfactory and has some incredibly restrictive clauses in it which would allow publishers to embargo access to the material within the libraries.
‘Legal deposit’ doesn’t tend to mean much to anyone apart from librarians and archivists. But in order to preserve the wealth of published knowledge in the UK, legal deposit is essential to ensure that there is always at least one copy of a published work in one place which can be accessed as and when necessary. Say, for example, 50 years later when the publisher has long gone out of business and the book is no longer in print. So publishers and distributors are required by law to submit one copy of every hard copy item that is published by them in the UK to the legal deposit libraries such as the British Library.
The biggest problems with the SI are:
- It doesn’t form part of the copyright review, and is being developed on the side without much input from the Intellectual Property Office, who really should be involved.
- The conditions of access to non-print material once placed in a legal deposit library are extremely restrictive:
- Non-print material must only be accessed from one display terminal at a time (equivalent to a single seat licence).
- Publishers can prevent access to their material INDEFINITELY by sending an email stating as much to the legal deposit library.
- There can be no fair dealing with the material if the users cannot access it in the first place – the SI only makes reference to research and private study, but the Copyright, Designs and Patents Act (CDPA) allows reproduction for criticism, review and news reporting.
- It is making subtle amendments to copyright law which are going unnoticed as they are couched in the terms of “The Legal Deposit Libraries Regulations”.
Consumer Focus and JISC have already responded to the consultation, highlighting the serious flaws in the regulations and recommending changes to the layout and wording which would enable legal deposit libraries to manage their non-print assets in the same capable manner as they manage their print ones.
Cultural heritage should not be subject to indefinite embargoes, and users should not be subject to an extra layer of restriction from copyright holders when legal deposit libraries are already strictly regulated by the CDPA. Libraries must have fair representation from the DCMS, and librarians should be aware that if this SI comes into force, they will be subject to a lot of extra restrictions which will create more work for them.
As yet, there has been no official response to the consultation by the minister, but concerned librarians in particular should be writing to the DCMS to make it known that they disagree with these draft regulations.
Emily Goodhand is Copyright Officer at the University of Reading. She takes a keen interest in copyright law and its implications for education, and tweets as @copyrightgirl
Image: CC-AT-SA Flickr: timetrax23
Selling the internet
Milena Popova looks at both sides of the net neutrality debate
One of the three things I learned from my economics & politics degree (I'll tell you the other two some other time) is neatly summarised by the following stat: out of said three-year degree, we spent one week learning how the free market worked, and the remaining time learning about all the ways in which it doesn't.
Having grown up in communist Bulgaria, I have a known for a long time that the state is just as unworthy of our trust as the market. I find the example of net neutrality illustrates both points beautifully, so here’s a little look at the economics and politics of net neutrality.
The story so far: net neutrality is the idea that internet service providers (ISPs) should treat all traffic equally, as zeroes and ones, rather than differentiate based on the content those zeroes and ones represent.
Proponents of net neutrality believe that all users should have equal access to the net, regardless of the type of content they are viewing, the sites they are visiting, the platform or device they are using. If I can install Linux on a badger and want to use it to indulge my kink for Hansard, then I should be able to do that, without interference from my ISP.
Opponents of net neutrality, on the other hand, believe that ISPs should be able to discriminate against or prioritise certain traffic based on content or other factors. This would allow ISPs, for instance, to prioritise traffic from certain content providers, or to sell different packages based on content (much, for instance, like Sky TV does).
They argue that the free market will work it all out in a way that is fair and efficient, that there is no need for regulation. My colleague @robcoh has a fun model for this. He calls it the RyanAir principle: if you don't have checked luggage, or use the toilet on the plane, why should you pay for it?
Equally, if there is a part of the internet you don't use, why should you pay your ISP for access to it? Rob would quite like a Sky-style internet access package. Other customers may have a need for other types of packages - demand and supply will sort all of that out.
Here are just a few reasons why I am firmly in the camp of net neutrality proponents. Firstly, ISPs aren't content providers. They are infrastructure providers. If you're an online gamer, an iTunes customer or a Netflix user, you are already paying the content provider.
ISPs implementing Rob's Sky TV/Ryan Air model would be a bit like the council (which maintains the roads) charging you extra for your road usage depending on whether you're going to the cinema or to the shopping mall.
Now, there are good reasons why that is an incredibly attractive thought for ISPs. Infrastructure is a commodity, and commodities don't exactly carry a lot of profit with them. Bandwidth from TalkTalk and bandwidth from BT are pretty much identical, so the lowest price wins. Content, on the other hand, is "value add" - you can differentiate your product based on content and therefore charge a premium.
Secondly, if your ISP drops net neutrality in order to give some companies preferential traffic, you are being ripped off. You are paying for your broadband. The content provider is also paying your ISP for the privilege of delivering their content to you faster. One of these payments is pure profit for the ISP. That is very far from the free market as defined by economists.
Thirdly, there are issues with anti-competitiveness here. Let's say Sky - which is both an ISP and a content provider - decides that its ISP arm will prioritise traffic from its content arm over other content. That is clearly anti-competitive - a bit like Microsoft bundling Internet Explorer in with Windows, for those of us old enough to remember.
In a more general case, it also creates barriers to entry and innovation. If the next-big-thing in Web 3.0 can't get off the ground because it can't afford to pay ISPs to prioritise its traffic, you have a serious issue that has negative impacts well beyond just that one service.
Now, there is a flip side to all this. Broadband, like infrastructure investment of any kind, doesn't come cheap. I am told by people who work in the industry that the major ISPs who put out for the actual physical infrastructure are still waiting to make their money back on investments from the 1980s. This is partly why they're so reluctant to lay any new cable and therefore means there are still large chunks of rural Britain on dial-up.
One of the major economic issues here is that there are massive positive externalities (a form of market failure) associated with having a proper broadband infrastructure. That is, lots of knock-on benefits for all kinds of people and society as a whole which are so indirect and dispersed that ISPs can't monetise them.
There are entire new industries which could not exist without that infrastructure, but it's difficult to make everyone who benefits just from the fact that broadband exists (rather than from their specific usage of it) pay for those benefits. So in some ways ISPs carry the cost, while the rest of us reap the rewards.
Finally, there's a public interest argument here too. Connectivity is rapidly becoming a utility, an essential part of our infrastructure, like water, electricity, gas and transportation. Some countries in Europe are actually going as far as legally defining internet access as a human right.
These days, the internet is a key tool for accessing education, employment, government services, and for participating in society and democracy. Compromising net neutrality would jeopardise all of those things. You can call me a communist if you want, but those are not things I'm prepared to just auction off to the highest bidder. Or would you think it's okay for the water company in an emergency to prioritise supply to those who can afford to pay more?
The recent events in Egypt in particular have for me further highlighted that threats to net neutrality don’t just come from commercial interests – they can come from the state too.
On January 25th, Egyptians took to the streets to protest against their government. On January 27th, seeing that protestors were using online communications to facilitate protests, Egypt shut down the Internet. Twitter, Facebook and BlackBerry users reported major disruptions, and the next day the disruptions extended to general Internet access and text messaging. The Internet did not come back up in Egypt until February 2nd.
The significance of the Egypt Internet shutdown is not be underestimated. China, Iran and Tunisia all have used different forms of restrictions, for example on the content users can view, or the speed of the connection. But for a week in late January and early February, Egypt joined North Korea on a very short list of countries completely cut off from the Internet.
This is not the kind of thing you want to put on your CV as a leader of a country. The cost is enormous: the internet enables and supports business models which are impossible to sustain without it. Near-instantaneous information exchange is fundamental for modern financial markets - one possible reason why the ISP hosting the Egyptian stock exchange stayed online slightly longer than the others.
But it’s not just lost productivity that contributes to the cost: the main fibre-optic cables which connect Europe to Asia run through Egypt, and while those services remained unaffected, the uncertainty and speculation generated by the shutdown of the rest of the Internet in the country were not cheap. Some analysts even believe that the downgrading of Egypt’s credit rating was partly prompted by the disconnection.
Looking at the economic arguments alone it would seem there is a good case for the state to step in and regulate access to the internet in some way, in order to deal with the market failures I’ve described above. Looking at the lessons from Egypt, on the other hand, in some ways you want the state as far away from regulation of the internet as possible.
I don’t have an answer to this dilemma – but I do believe we should start asking the questions. And while we’re at it, we should be looking for answers from as many varied sources as possible: networking and technology experts, economists, lawyers, law makers, and activists - the kinds of people in short whom ORG is so good at bringing together. That way, maybe we can build a Web 3.0 that is truly open, neutral and robust.
Milena is an economics & politics graduate, an IT manager, and a campaigner for digital rights, electoral reform and women's rights. She tweets as @elmyra
The wartime economy
A recent report claims that cybercrime is costing the UK economy £27 billion annually. But Wendy Grossman argues that the report may be over-stating the case
Everyone loves a good headline, and £27 billion always makes a *great* one. In this case, that was the sum that a report written by the security consultancy firm Detica, now part of BAE Systems and issued by the Office of Cyber Security and Information Assurance (PDF) estimates that cybercrime is costing the UK economy annually.
The claim was almost immediately questioned by ZDNet's Tom Espiner, who promptly checked it out with security experts. They complained that the report was full of "fake precision" (LSE professor Peter Sommer), "questionable calculations" (Harvard's Tyler Moore), and "nonsense" (Cambridge's Richard Clayton).
First, some comparisons. Twenty-seven billion pounds (approximately $40 billion) is slightly larger than a year's worth of the International Federation of the Phonographic Industry's estimate of the cumulative retail revenue lost to piracy by the European creative industries from 2008 to 2015 (PDF) (total €240 billion, about £203 million, eight years, £25.4 billion a year).
It is roughly the estimated cost of the BP oil spill, the amount some think Facebook will be worth at an IPO, and noticeably less than Apple's $51 billion cash hoard. It is also considerably smaller than the "£40 billion underworld" The Times attributed to British gangs in 2008.
Several things baffle about this report. The first is that so little information is given about the study's methodology. Who did the researchers talk to? What assumptions did they make and what statistical probabilities did they assign in creating the numbers and charts? How are they defining categories like "online scams" or "IP theft" (they're clear about one thing: they're not including file-sharing in that figure)? What is the "causal model" they developed?
We know one person they didn't talk to: Computer Weekly notes the omission of Detective superintendent Charlie McMurdie, head of the Metropolitan Police's Central e-Crime Unit. Surely he would be one of the first ports of call for understanding the on-the-ground experience.
One issue the report seems to gloss over is how very difficult it is to define and categorize cybercrime. Last year, the Oxford Internet Institute conducted a one-day forum on the subject, out of which came the report Mapping and Measuring Cybercrime (PDF), published in June 2010. Much of this report is given over to the difficulty of such definitions; Sommer, who participated in the forum, argued that we shouldn't worry about the means of commission – a crime is a crime.
More recently – perhaps a month ago – Sommer teamed up with the OII's Ian Brown to publish a report for an OECD project on future global shocks, Reducing Systemic Cybersecurity Risk (PDF). The authors' conclusion: "very few single cyber-related events have the capacity to cause a global shock". This report also includes considerable discussion of cybercrime in assessing whether "cyberwarfare" is a genuine global threat.
But the larger point about both these reports is that they disclose their methodology in detail. And as a result, they make much more modest and measured claims. This is one reason that critics have looked at the source of the OCSIA/Detica report – BAE – and argued that the numbers are inflated and the focus largely limited to things that fit BAE's business interests (that is, IP theft and espionage; the usual demon, abuse of children, is left untouched).
The big risk here is that this report will be used in determining how policing resources are allocated. "One of the most important things we can do is educate the public," says Sommer. "Not only about how to protect themselves but to ensure they don't leave their computers open to be formed into botnets. I am concerned that the effect of all these hugely military organizations lobbying for funding is that in the process things like Get Safe Online will suffer."
There's a broader point that begins with a personal nitpick. On page four, the report says this: "…the seeds of criminality planted by the first computer hackers 20 years ago." This ignores the even smaller nitpick that the *real*, original computer hackers, who built things and spent their enormous cleverness getting things to work, date to 40 and 50 years ago.
However it is utterly unfair to compare today's cybercrime to the (mostly) teenaged hackers of 1990, who spent their Saturday nights in their bedrooms war-dialling sites and trying out passwords. They were the computer equivalent of joy-riders, caused little harm, and were so disproportionately the targets of freaked-out, uncomprehending law enforcement that the Electronic Frontier Foundation was founded to spread some sanity on the situation.
Today's cybercrime underground is composed of professional criminals who operate in an organized and methodical way. There is no more valid comparison between the two than there is between Duke Nukem and al-Qaeda. One is not a gateway to the other – but the idea that criminals would learn computer techniques and organized crime would become active online was repeatedly used as justification for anti-society legislation from cryptographic key escrow to data retention and other surveillance.
The biggest risk of a report like this is that it will be used as justification for those wrong-headed policies rather than as it might more rightfully be, as evidence of the failure of no less than five British governments to plan ahead on our behalf.
Wendy M. Grossman’s Web site has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series
Fair use rights in the UK... it’s the 80s all over again
Feargal Sharkey describes fair use as “intellectual masturbation” and a blind alley that has triggered angst and insecurity ever since Cameron said it gave companies the breathing space to create new products and services. Saskia Walzel seeks to shed light on fair use
Prime Minster Cameron mentioned ‘fair use provisions’ when announcing a review of the UK’s copyright framework to make it more innovation friendly. The Independent Review of IP and Growth, led by Prof Ian Hargreaves, set out to investigate what the benefits of ‘fair use’ exceptions to copyright may be.
What has been termed fair use rights essentially allows the copying of copyrighted works without the permission of the copyright owner. While the UK has a number of fair use rights, called fair dealing, for things like research and news reporting, UK copyright law only provides consumers with the fair use right to time-shift broadcast. That is, to record broadcasts to watch/listen at a later time, and the back-up of software in certain circumstances.
Essentially it is illegal to copy copyrighted content for personal use under UK law: the back-up of music, film and e-books is currently illegal and so is format-shifting, for example copying music into different formats to listen to on different devices.
Fair use by consumers is legal in most other countries through a general fair use defence or private use exception, and technology companies develop products around these user rights. Format-shifting falls under the fair use defence in the US, and Apple has developed the iPod and iPlayer on the basis that consumers format-shift their CD collection into digital.
This leads to the absurd situation where UK consumers can buy hardware and software that is designed specifically for something that is illegal in this country. Most UK consumers are not even aware that format-shifting your CD is illegal: 85 percent of consumers think it is legal, and once told that it is actually not legal, 91 percent said that it should be legal.
So does it matter that fair use is largely illegal in the UK, and that thousands of consumers infringe copyright. Does it really matter that I infringe copyright on a grand scale when backing up my 1,000+ MP3s? Who cares if I illegally convert my pdf e-books into Kindle format? After all no consumer who has copied for personal use what they have bought has ever been sued for copyright infringement. And has this not all been done and argued out before?
In 1988, the High Court found Amstrad was not responsible for copyright infringement committed by consumers using Amstrad’s twin cassette deck and Thatcher updated copyright law for the home taping age by introducing the time-shifting exception into UK law.
The long term effects of introducing a fair use right for time-shifting into UK copyright law? Well, home taping did not kill music, TV got better, and Alan, who had made millions developing and manufacturing innovative consumer hardware, was made Lord Sugar.
Courtesy of Amstrad, BSkyB introduced consumers to the convenience of digital video recorders (DVRs). Relying on the time-shifting exception, consumers now store digital TV programmes on hard disk so that they can be replayed at a later time, making the most of their +box premium subscription service. Around nine million DVRs have been sold since 2000 and more than a quarter of UK households now own a DVR. BSkyB customers accomplish around 4.4 billion time-shifts per year and Ofcom have hailed DVRs as having had a profound effect on consumers TV viewing habits.
What if Cameron were to introduce a fair use right for consumers to copy, shift and back-up for their own personal use? Would it prompt UK companies developing new markets for consumers to enjoy music, film and books using the latest technology? Most likely, and they would not be sued into oblivion for trying.
There are good reasons why Alan decided to innovate within the time-shifting exception, rather than relying on his twin deck court victory. According to the court, Amstrad was not liable for copyright infringement by consumers only because its twin deck could be used for legitimate purposes.
But DVRs are sold for the sole purpose of time-shifting broadcast, and are marketed as such. Without the time-shifting exception Alan might have never become Lord Sugar and BSkyB’s +box subscription business model would have been just an idea that the in-house legal team quickly suffocated.
Hargreaves recently met the young entrepreneurs and start-ups congregating around the Silicon Roundabout. Basil Safwat from Minified apparently got a round of applause for standing up at the end saying that he was kind of annoyed he came tonight, because he realised that UK copyright can stop him from making “cool stuff”. That is especially true if cool stuff involves consumers copying to listen and watch what they have bought in different formats and numerous devices.
Twelve years after Thatcher made copyright law home taping friendly, it is about time copyright law is made digital innovation friendly. And then the Silicon Roundabout folks can get on with developing the next big thing.
Saskia Walzel is policy advocate at Consumer Focus. She tweets as SaskiaWalzel
If you would like to join the debate, come to the Consumer Focus/deapgg Event: The Government's IPR review and fair use rights 8 March, 6.30-8.30, House of Commons, Committee Room. RSVP: sophianpickles+deevents@gmail.com
Ogle it
Graham Armstrong wonders how internet giant Google, with a recent change of CEO and a legacy of wins and woes, will be approaching the future
“Don’t be evil,” is probably good advice for us all to live by; Google’s use of this mantra, however, certainly seems to have aided the development of its business. And whether it is for their morals or performance, Google is generally quite liked by the internet community at large – it's no coincidence that Google performs 34 thousand searches ever second. Its open attitude to free software and code has earned it the scorn of giants such as Microsoft, however, its freedom-for-all attitude has made them the most visited website on the entire world wide web.
It's an exciting time to be Google. With Larry Page replacing Eric Schmidt as CEO, it is seeking to move in a new direction. A recent mix of flops for the company such as Buzz and Wave, as well as the successful—albeit still developing—Android platform have prompted the nervous co-founders to consider the long term effects of these failures and address them to get work moving again. Google may not be able to simply sit back and continue watching its obscenely large profits roll in.
Given Google’s non-standard business model, perhaps we ought to expect these experimental products. And indeed, the innovative company is proving its worth, as Android recently overtook Symbian in mobile operating sales and its rapid growth is putting pressure on Apple’s iOS. Let us not forget that Google is, in essence, an advertising company – it is reliant upon the information it gathers from users' browsing habits in order to better target advertisements at them. This certainly has many benefits for their marketing strategies. It has also, however, landed the company in a spot of bother.
Google’s Streetview service was infamously lambasted by national authorities everywhere, following the disastrous revelation that it had collected data from unsecured WiFi networks. Even before that, Streetview had been a gripe of many a disgruntled citizen wishing to have their face or house removed, despite Eric Schmidt's less than appeasing suggestion that people “can just move”. Contrary to what Google may like us to believe, the Streetview debacle is hardly a blemish on a spotless record – more like a poisonous wart on top of necrotic tissue – Google’s record on privacy has been abysmal, as it was initially criticised for using tracking cookies with their search service, as well as a string of privacy flaws with its Gmail service. Controversy arose last year over its opt-out Google Buzz service which let people view the contacts of Gmail users.
But no issue in relation to Google will prove as controversial as its operations in China, though perhaps for quite different reasons. In early 2010, Google stopped co-operating with Chinese authorities and stopped censoring sore items in search results, the reason cited being that hackers from within China had attempted to breach Gmail accounts linked to human rights activists. Google had initially taken fire for enacting the censorship in the first place, but correcting this issue did seem to win back popular support for the company. Google enacted a Twitter proxy recently to aid Egyptians who’d been cut off from the internet, sending a clear message to the world that Google is fighting the good fight. So whilst Google's moral compass may be faithful in this case, its lax attitude to privacy is still going to attract criticism from many internet users.
So what will the future hold for Google? At the moment, we can only speculate. The return to leadership for Larry Page may see a strong emphasis on the grassroots search services which have given Google its good name. Android is being shown off at the Mobile World Congress and has been heralded as a major player in the tablet PC market, as well as that Google are still pushing forth with their WebM HTML5 video standard. Moreover, recent developments such as Google Weddings is an obvious—and delightful—sign that Google still has a few bizarre tricks up its sleeve.
Graham Armstrong is a computing student with a strong interest in free software, and the use of social media technology to aid transparency and democracy. He tweets as @LupusSLE
Torrent-head
Tom Hubbard-Green looks to Radiohead for a new business model for digital downloads
Earlier this week Radiohead announced that they were releasing their new album, The King of Limbs, on digital download on Saturday 19 February. Moving away from the pay-what-you-want pricing model of In Rainbows, they are offering their new album for £6 as well as £30 for a print copy with assorted goodies.
I really applaud what Radiohead are doing here. In the age of free access to millions of tracks, both illegally and increasingly legitimate, they know that the price for digital content had to be low. They also know that their fanbase is sufficiently rabid to swallow £30 for special artwork to help fill the band's coffers.
The problem, however, comes with their method of distribution. When it comes to handling thousands of payments and downloads on Saturday morning they might find they're without sufficient server capacity to handle it as happened with their release of 'In Rainbows' and the digital release of Saul Williams' last album.
The problem is that their website will not be the only place the download will be available on Saturday. Within seconds of the first downloads the album will be up on BitTorrent and people will be faced with the choice of a crippled official download server or a super speedy and, let us not forget, free BitTorrent download. Of course some will wait and pay but more will flock to torrent the album and that means lost revenue.
Perhaps I am not giving the band's digital team enough credit and they will nail the distribution by temporarily renting extra capacity at a data centre or even using BitTorrent itself to ease the pressure on servers; a method used to great success to distribute massive Linux ISOs.
That said I look forward to seeing how it all turns out on Saturday morning and, of course, listening to the tracks – but I wouldn't be at all surprised to find fans grabbing the torrent that’s quicker and easier to get hold of when it comes to crunch time.
Tom Hubbard-Green is the E-marketing and Social Media Manager at a not-for-profit and a freelance technology journalist. He tweets as @hubbs
*This article was modified on 17 February 2011
A double-edged sword
Digital activism has become a potent and politically charged manifestation of power - but activists aren't the only ones with access to Facebook, warns Courtney C. Radsch
In authoritarian regimes the spread of information is a subversive act. Throughout the Middle East, states control vast swaths of the media, usually including all terrestrial television stations, major newspapers and radio. Before the internet enabled self-publishing and dissemination, there was really no mass media through which youth and minority groups could get their message out. But through politically entrepreneurial uses of digital and social media, young Egyptians—including the April 6 Movement—and other cyberactivists helped bring down President Hosni Mubarak after 30 years in power.
Coverage of the revolts in Egypt and Tunisia have largely focused on the role of social media, both in western media and on Al Jazeera English. Pithy, reductionist labels like “Wiki Revolution” and “Twitter Revolution” attribute to technology what is, in fact, the reaction to broad disenfranchisement and economic despair, along with disgust over presidential corruption. .
Nonetheless, social media coupled with internet and mobile technology has proved to be a powerful challenge to the political status quo. Over the past month, activists in Tunisia and Egypt used these tools to successfully challenge the reign of authoritarian presidents whose decades in power had left little room for political participation and whose economic policies failed to provide for the needs of their people.
Throughout the MENA region (Middle East & North Africa), mass protests are organised via social media, including in Bahrain, Yemen, and Morocco. But when such efforts are not linked into the broader activist community or public they are bound to fail, like a Facebook protest for Syria that fizzled because it was inauthentic. China tried to block information about Egypt from its citizens by filtering out internet content about the uprisings, but with the fall of two regimes in less than a month this is a losing battle. Tunisia inspired Egyptians, and Egypt will inspire the world.
Tweet a revolution
While Egyptian authorities targeted professional journalists, citizen journalists, activists and the human rights and legal aid organisations that have helped protect and defend rights, social media became a powerful tool in the hands of those challenging the status quo. While it isn't a panacea to the political, economic and social problems plaguing the region, it certainly helps organising, mobilising, communicating and putting domestic issues on the international agenda.
Activists who helped propel the uprisings in Egypt and Tunisia used social media—especially Facebook, Twitter, YouTube, and Flikr—and digital tools as an integral part of their mobilisation strategies and as key communication forums. They circumvented censorship tools, attempts by Ben Ali and Mubarak to block Twitter, and even the entire shutdown of the internet in Egypt. Ensuring information continued to get out became an act of protest and agitation, and social media were essential tools for doing do.
With a population of about 80 million and a median age of 24, Egypt has nearly four million Facebook users, representing about 5% of the population. Facebook exploded in 2008 with the April 6 Youth protests and has doubled in the past year. Google, Facebook and YouTube are the three most visited sites in Egypt, and have been essential to digital activism in the region since Blogger became popular in 2005.
In 2008, the April 6 strike page garnered 70,000 followers in about 2 weeks. In the first 24 hours the Khaled Said Facebook page had 56,000 followers. Twitter hashtags #jan25, #Egypt and #Mubarak were all worldwide trending topics for the first several days of the protests. Becoming a trending topic helps generate media attention, even as it helps organise information. The power of social media to help shape the international news agenda is one of the ways in which they subvert state authority and power.
Excuse me, please
Capturing the attention of Western media is a key strategic goal for activists, who largely believe that western media attention offers some veneer of protection to them – though it can also highlight potential dissidents to the government. Sandmonkey wrote of April 6 strike in 2008, when the movement first emerged:
“If this spreads, then the regime will spare no expense to squash it, especially with the visible absence of the western media and their coverage. Without international cover, this won't survive, and the government will fucking air bomb the demonstrators if they truly became a threat to the regime.”
The same applies to the protests that rocked Egypt from 25 January until 11 February, when Mubarak’s resignation was finally announced. Mainstream media covered the Egyptian unrest far more quickly and pervasively than they did with Tunisia – although Al Jazeera far surpassed US and UK news media in the quality of coverage. Their correspondents got outside the capital, interviewed a broader swath of Egyptians and did a far better job of putting things in context, being less prone to attribute the uprisings to American-made technologies.
Most major broadcast media devoted round-the-clock coverage to the protests in Egypt whereas they woefully disregarded Tunisia until just before Ben Ali’s departure. In both cases, however, the social media angle was a lead story and figured prominently in statements by the White House.
Don't look now, but...
But social media is also a double-edged sword. On the one hand, it provides important tools for circumventing government dominance of the media sector and restrictive freedom of association laws that prohibit NGOs from operating or groups from gathering, thus helping to shift the balance of power away from authoritarian governments. But this media also facilitates state surveillance because of its public nature and most people’s lack of familiarity with basic security settings on their social profiles, much less digital encryption or counter-censorship tools.
For example, most Egyptians do not protect their Facebook profiles by restricting access to friends or networks only, meaning that those who joined the Khaled Said fan page that we now know was created by Google executive Wael Ghonim or anti-Mubarak pages (of which there are plenty) are very likely to be known to the regime. Egyptian Facebook users also tend to use the semi-private platform to make friends rather than to stay in touch with existing ones, as is more typical in the US, for example. The lack of high privacy settings coupled with the extensiveness of networks among Egyptian activists means that it is relatively easy for the government to track developments and planning on Facebook.
Twitter is similarly open and is also extremely popular among digital activists, who link it to their blogs and Facebook pages and are followed by journalists. I don’t know of digital activsits who restrict Tweets to only their followers – this defeats the point of such services in any case. The use of Arabic and English by many of the more savvy activists is one example of the concerted effort to ensure the western world is getting their information. Hence it is little surprise that Mubarak blocked Twitter before deciding to close off access to the internet for the entire country.
Tunisian authorities used phishing to access email accounts of activists and follow their activities in the year leading up to ouster of Ben Ali. In Sudan, authorities used faux protests publicised on social media to entrap activists and arrest them. Over the past several months, Blackberry-maker RIM caved to demands by the UAE, followed by Saudi Arabia, Egypt, India and others to make its encrypted data streams accessible to host governments. The UAE’s request came just days after youth attempted to organise a peaceful protest against rising oil prices using BB Messenger. And Egypt’s Internet shutdown also meant the government could not surveil and track digital activists
Gaining the upper hand
For the moment the scales are tipped in favor of activists because publicity and popularity provides a level of protection to many of the more outspoken and well-know digital activists, although it didn’t prevent authorities from raiding the offices of key rights groups like the Arabic Network for Human Rights Information and the Hisham Mubark Law Centre – both central resources for Egypt’s young digital activists.
Although their popularity puts them on the authorities’ radar, it also means that when these well-connected, highly-followed youth are arrested or prosecuted it activates transnational activist networks. Thus international human rights and journalist organizations such as Human Rights Watch, Amnesty International, Freedom House, the Committee to Protect Journalists and Reporters Sans Frontières have mobilized their resources to advocate for their release and draw attention to the abuses by security forces.
Countries like Egypt, Tunisia and the highly authoritarian but very wealthy Gulf states represent tantalising markets and the fact is, without access to technology, these countries would be unable to compete in the globalised world. Companies like Research in Motion should take a stand for the rights and values of the countries in which it started and grew. Without the benefits provided by the political and legal environments of Canada, it would never have been able to start up or grow into the innovative powerhouse it has become.
At least US companies like Google and Twitter have come out of the side of freedom by providing workarounds to enable people in Egypt to use social media and evade censorship even when internet and mobile services were cut, including providing international landline numbers for internet access, ‘speak2tweet’ enabling Twitter posting via voicemail, and cloud servers. These solutions were publicised by people around the world through social media and experienced digital activists, like Manal and Alaa, who posted detailed instructions on how to circumvent the near total censorial blackout on their blogs.
The digital blackout was a powerful reminder of the power of older technologies, and innovative solutions emerged to merge the best of both. Landlines continued to be available, people in Egypt were encouraged to leave their wireless connections unlocked, wireless internet relays to neighboring countries were created by stringing together access points. And while social media was important, it was the fact that protests and popular support transcended the digital forums that makes these recent uprisings monumental.
Courtney C. Radsch is Freedom of Expression officer at Freedom House and an internationally published author and journalist with more than 10 years of journalism and media affairs experience in the U.S. and the Middle East. She is writing a book on cyberactivism in Egypt based on her doctoral dissertation
Stuffed
The 21st century has presented us with digitised options which allow us declutter our bookshelves; Wendy M. Grossman says, “ick”
“You don't need this old math work,” said my eighth grade geography teacher, paging through my loose-leaf notebook while I watched resentfully. It was 1967, the math work was no more than a couple of months old, and she was ahead of her time. She was an early prototype of that strange, new species littering the media these days: the declutterer.
People like her – they say “professional organiser”, I say bully – seem to be everywhere. Their sudden visibility is probably due, at least in part, to the success of the US TV series Hoarders, in which mentally disordered people are forced to confront their pathological addiction to keeping and/or acquiring so much stuff that their houses are impassable, often hazardous. Of course, one person's pathological hoarder is another's more-or-less normal slob, packrat, serious collector, or disorganised procrastinator. Still, Newsweek's study of kids who are stuck with the clean-up after their hoarder parents die is decidedly sad.
But much of what I'm reading seems aimed at perfectly normal people who are being targeted with all the zealotry of an early riser insisting that late sleepers and insomniacs are lazy, immoral slugs who need to be reformed.
Some samples. LifeHacker profiles a book to help you estimate how much your clutter is costing you. The latest middle-class fear is that schools' obsession with art work will turn children into hoarders. The New York Times profiles a professional declutterer who has so little sympathy for attachment to stuff that she tosses out her children's party favours after 24 hours. At least she admits she's neurotic, and is just happy she's made it profitable to the tune of $150 an hour (well, Manhattan prices).
But take this comment from LifeHacker:
“For example, look in your bedroom and consider the cost of unworn clothes and shoes, unread books, unworn jewelry, or unused makeup.”
And this, from the Newsweek piece:
“While he’s thrown out, recycled, and donated years’ worth of clothing, costume jewelry, and obvious trash, he’s also kept a lot—including an envelope of clothing tags from items [his mother] bought him in 1972, hundreds of vinyl records, and an outdated tape recorder with corroded batteries leaking out the back.”
Okay, with her on the corroded batteries. (What does she mean, outdated? If it still functions for its intended purpose it's just old.) Little less sure about the clothing tags, which might evoke memories. But unread books? Unless you're talking 436 copies of The DaVinci Code, unread books aren't clutter. Unread books are mental food. They are promises of unknown worlds on a rainy day when the electricity goes bang. They are cultural heritage. Ditto vinyl records. Not all books and LPs are equally valuable, of course, but they should be presumed innocent until proven to be copies of Jeffrey Archer novels. Books are not shoeboxes marked “Pieces of string – too small to save”.
Leaving aside my natural defensiveness at the suggestion that thousands of books, CDs, DVDs, and vinyl LPs are “clutter”, it strikes me that one reason for this trend is that there is a generational shift taking place. Anyone born before about 1970 grew up knowing that the things they liked might become unavailable at any time. TV shows were broadcast once, books and records went out of print, and the sweater that sold out while you were saving up for it didn't reappear later on eBay. If you had any intellectual or artistic aspirations, building your own library was practically a necessity.
My generation also grew up making and fixing things: we have tools. (A couple of years ago I asked a pair of 20-somethings for a soldering iron; they stared as if I'd asked for a manual typewriter.) Plus, in the process of rebelling against our parents' largely cautious and thrifty lifestyles, Baby Boomers were the first to really exploit consumer credit. Put it together: endemic belief that the availability of any particular item was only temporary, unprecedented array of goods to choose from, extraordinary access to funding. The result: STUFF.
To today's economically stressed-out younger generation, raised on reruns and computer storage, the physical manifestations of intellectual property must seem peculiarly unnecessary. Why bother when you can just go online and click a button? One of my 50-something writer friends loves this new world; he gives away or sells books as soon as he's read them, and buys them back used from Amazon or Alibris if he needs to consult them again. Except for the “buying it used” part, this is a business model the copyright industries ought to love, because you can keep selling the same thing over and over again to the same people. Essentially, it's rental, which means it may eventually be an even better business than changing the media format every decade or two so that people have to buy new copies. When 3D printers really get going, I imagine there will be people arguing that you really don't need to keep furniture around – just print it when you need it. Then the truly modern home environment will be just a bare floor and walls. If you want to live like that, fine, but on behalf of my home libraries, I say: ick.
Wendy M. Grossman’s website has an extensive archive of her books, articles, and music, and an archive of all the earlier columns in this series.
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