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Book: The Future of Ideas

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I've always been interested in Lawrence Lessig's writings on the web as well as his work with the Creative Commons, but I hadn't actually taken the time to read his books. Also, I forgetfully missed his PARC forum, but one of these days I will get around to watching the video. At long last, though, I've read The Future of Ideas, just in time for me to read Free Culture, which he has made available freely.

If you've been following the battles over DRM, open source, DMCA, etc... you've probably already heard many of the arguments that are presented by this book, but I appreciated the manner in which Lessig so clearly breaks apart issues, categorizing and framing them so that see them each more clearly. Also, much like introductory economics courses, he provides terminology (like "rivalrous" and "imperfectly excludable") for common sense notions, which aides in discussion.

Chapter 4, Commons Across the Wired

  • commons of code: open source
  • commons of knowledge: free exchange of knowledge about how the Net runs
  • commons of innovation: opportunity to use code+knowledge to innovate

Commons of code: * ALGOL/COBOL part of initial tradition of cross-platform * Unix initially "free" because AT&T not permitted to sell computers * Unix created a common platform across different computer systems * After AT&T broken up, Unix no longer free * GNU/Linux filled the void * Apache, BIND, and Sendmail are other prominent examples of free code creating a commons * HTML, because of human-readability, effectively opens up the Web by allowing others to copy and remix design. More open.

Microsoft and non-free code. Strategic decision making in order to protect its market share: * Tied people to MS-DOS by holding Window 3.0 over people's heads (back when Windows was a program, not an OS). Bridged people into Windows 95. * Tied people to IE using Windows 95 * Strategic decision making controls the pace of innovation. * Closed source enables this form of strategic decision making.

Open code cannot hold users hostage to unfixed bugs.

Open code cannot behave strategically. Users can unbundle or fork as necessary.

"Inverse commons": From Eric Raymond, the more people that graze on the grass, the taller it grows (as opposed to "tragedy of the commons")

IBM transitioned to Linux and is now sitting on top of a $3.4 product line of Linux-powered IBM servers. * IBM uses free software to sell non-free hardware and non-free services * IBM encouraged to release its modifications to open source, as the nature of code means that maintaining your own fork is costly * The notion of releasing your own contributions, from a business perspective, is not so backwards. Lessig notes that Starbucks cannot prevent others from using the idea of high-priced coffee shops, nor could Webvan prevent Peapod from competing. There is no such thing as * Rarely is there "perfect control" in a free market * An innovator cannot capture all the value of an innovation to itself

Chapter 5, Commons Wire-Less

Radio: initially free, after the Titanic sank, push to regulate spectrum

Initially commercial programming was only a small part of radio. Early radio resembled early Internet.

It is an iron law of modern democracy that when you create a regulator, you create a target for influence, and when you create a target for influence, those in the best position to influence will train their efforts upon that target.

Control of spectrum: * Government regulation: The government initially argued that it was the nature of the medium that required the government to regulate the airwaves, and it did so by controlling how the airwaves are portioned out. * Market regulation: Coase argued instead for a market system of spectrum allocation: allow innovation by allowing private innovators to purchase spectrum. * Third option: why control at all? Ethernet demonstrates how a wire can be used as a commons. Spread spectrum technology could potentially create a commons for wireless. Hendricks has demonstrated this in Tonga and on Native American reservations.

Opening up spectrum does not equate to no government regulation of spectrum, just a different type of regulation. Like highways, instead of regulating access to the roads, regulate the automobiles and require certain standards of them. Similarly, regulate/certify devices for use with open spectrum.

Chapter 6, Common Lessons

Three layers of the Internet: * Code/Transport layer: "innovation commons" arising end-to-end principles built-in to the Internet * Content layer: open source movement provides a commons that protects itself legally with its licenses (GPL) and technically b/c infrastructure is built around this software * Physical layer: currently private. Potential to become a new commons using technology like spread spectrum wireless over free airwaves

  • Innovator's Dilemma: existing firms will ignore new markets, favoring instead predictable expansion within their established market. This is not blindness; rather, it is rational decision optimizing the welfare of a single actor, rather than optimizing the welfare of society as a whole.
  • society should favor disruptive innovations

p. 94 generics Jefferson, 1813, letter to Isaac McPherson (numbers added by Lessig)

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of hte thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. [2] Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receieves instructions himself without lessening mine; as he who lites his taper at mine, receives light without darkening me. [3] That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement, or exclusive appropriation. [4] Inventions then cannot, in nature, be a subject of property.

p. 95-96

  • rivalrous resources: need to protect against depletion
  • nonrivalrous resources: need to encourage production
  • society should not necessarily use same system for protecting both
  1. If the resource is rivalrous, then a system of control is needed to assure that the resource is not depleted -- which means the system must assure the resource is both produced and not overused

  2. If the resource is nonrivalrous, then a system of control is needed simply to assure the resource is created -- a provisioning problem, as Professor Elinor Ostrom describes it. Once it is created, there is no danger that the resource will be depleted. By definition, a nonrivalrous resource cannot be used up.

What follows then is critical: The system of control that we erect for rivalrous resources (land, cars, computers) is not necessarily appropriate * for nonrivalrous resources (ideas, music, expression). Indeed, the *same system for boths kinds of resources may do real harm.

p. 97

Society benefits from resources that are free; but unless some system of control is implemented for resources that must be created, or for resources, once created, whose use is rivalrous, then no benfit will be received The key is to balance the free against control, so that the benefits of each can be achieved.

On the opposite end, innovation is also being undermined by advances in technology: * technology is now expanding the ability for content producers to control consumption beyond what was possibly pre-Internet * technology is overriding copyright law by giving producers more control than the law provides

Chapter 7, Creativity in Real Space

We shouldn't map protections that we use in real space into cyberspace, where physical constraints no longer exist: "The different physics of cyberspace means that the rules that govern that space may be different as well."

Creativity in the Arts in the 1970s: * "To author, or create requires some amount of content to being with, to which the author adds a creative component, which, for a few, is then published and distrusted" * Content layer: new content is often based on the old. Plays based on novels, history books use history, filmmakers retell. Copyright provides constitutionally limited control over works (limited time). * Scope has increased over time. Used to have to register copyrights, so only tiny part of creative content controlled. Now, nearly everything controlled. * Duration has increased over time, mainly to protect Mickey. * Piano rolls established the notion of "mechanical reproduction right," i.e. once a recording has been made, subsequent recordings can be made using a "compulsory licensing right" (this right was established by Congress, not the Courts) Cable TV followed in this tradition, with Congress similarly intervening when the Courts held that the cable TV companies didn't owe anything. * Physical layer: controlled by the market (film stock, paper), which is fine if the market remains competitive. * Code layer: constraints on production and distribution. This is the main constraint in the real space world of yore. * Commerce: coding constrained by centralized access to expensive machines. Markets constrained by geography.

The digital world is closer to the world of ideas than to the world of things * closer to Jefferson's quote on ideas * capacity and bandwidth to create rivalrous properties, but not sufficient for claiming that we should treat digital resources with the same constraints as real world resources

p. 117

Stats on media concentration: * 1947, 80% of daily newspapers independently owned, 1989: 20% * 1981: US's 11,000 magazines controlled mostly by 20 companies, 1988: three companies * 1998: seven firms dominate publishing industry * Five largest music groups account for 84% of US market * 132 out of 148 "widely distributed" films in 1997 were produced by companies with deals with one of the six major distribution companies * mid-1970s: foreign films had 10% of box office. Late 1990s: 0.5% * Despite more than 25,000 outlets in the US, 23 corporations control most of the business in daily newspapers, magazines, tv, books, and movies

Internet has potential to topple things in the distribution field. Less centralization, less control.

Chapter 8, Innovation from the Internet

Changes to real-world constraints in cyberspace

HTML books: Eldred and Project Gutenberg MP3 MP3.COM Napster P2P

  1. No system-wide cop. Commons at the code layer means that control is hard.
  2. Vast markets. Access to physical layer is cheap, allowing connectedness with many
  3. Easier to get data (because of the character of the code layer). Makes it easier to find/enter distribution channel.

"environmentalism in the Internet era" * have to protect against encroachment on Internet ecology. Internet has no fundamental "nature" to protect itself against change. * the leaders of the old can pollute the Internet space

Chapter 9, Old vs. New

Even in old Soviet system, when people knew things had failed, still unwilling to change, because even if society as a whole would be better off, people in power wouldn't necessarily be better off individually.

Ways of preventing change: * use law to stifle innovation * leverage market power to dissuade innovators from challenging them * use norms to stigmatize deviants

Chapter 10, Controlling the Wires (and Hence the Code Layer)

Average voice call: 3-5 minutes Average dialup call: 17-20 minutes

ATM network not end-to-end

Networks can be governed by laws, contract, or norms, forming the intelligence of the network * architectural enforcement: register with network * contract enforcement: have to register with admin * community norms: e.g. don't download mp3s on community line * pricing based on bandwidth usage

Cable TV networks given monopoly control by Congress. Argued that they needed to recover their investment in the cable lines, yet telephone companies, which have a similar infrastructure investment, do not get the same monopoly control over the content of their lines.

Cable networks needed to respond to challenge of satellite TV. Their response was to upgrade to two-way networks.

DOCSIS standard: standard for cable companies for two-way communication over cable networks

Cable vs. DSL: because DSL is Title II (Communication Services), it is required to be open. Because cable networks are Title VI (Cable services), they are allowed to have monopoly control over their lines.

Cable networks are threatening the e2e principles of the Net: (p. 156) * Video limits: limiting number of minutes can view streaming video * Server restrictions: directly or indirectly (dynamic IP) preventing users from running servers * Fixed backbone choice * Filtering * No home network

"This is not to say that no innovation will take place," Bar argues, "simply that only the technology trajectories that line up with their interest will be pursued."

p. 160

We've seen this lesson before, and we're at a point where we can state a general claim: Where a disruptive technology emerges, there may e good reason not to extend the power of existing interests into power over that technology. That doesn't mean the new technology should be allowed to defeat the old or, at least, defeat the old for free. For example, no doubt the customers who use the "two hundred new channels" technology on the cable system should have to pay something for this new capacity. But the price they pay should not necessarily be within the control of the dinosaurs. Instead, while compensation is justified, control is not required. Or, better, separating control from compensation may well be a way to induce more innovation.

DSL vs. cable = open vs. closed. While open is better overall for society, consumers may not be sufficiently motivated by the long term rewards of innovation; "the consumer does completely internalize the costs imposed by a closed system. And hence the pressure the consumer puts on closed systems to open themselves up is not equal to the costs that such systems imposed on innovation generally."

"The observation that never in the history of telecommunications has a network voluntarily been opened after being closed is another reason to be skeptical."

AOL: closed system. Control content and code running on network.

AT&T and AOL initially supported opening cable lines. Backed away once both started purchasing their own lines.

"Will broadband respect the principle of end-to-end as narrowband has? And if it doesn't, will the government do anything to resist the change?"

p. 168

Here, then, we hav ethe beginnings of a classic "tragedy of the commons." For if keeping the network as a commons provides a benefit to all, yet closing individual links in the network provides a benefit to individuals, then by the logic that Garrett Hardin describes in chapter 2 above, we should expect the network "naturally" to slide from dot.commons to dot.cntrol. We should expect these private incentives for control to displace the public benefit of neutrality.

e-Bay charging Bidder's Edge with trespass

NAT and firewall compromising end-to-end

p. 174

Not every increase in control is driven by a desire to lessen competition; not every increase will have the effect of undermining innovation.

Chapter 11, Controlling the Wired (and Hence the Content Layer)

parallel to chapter 4

Expanded Congressional protection of patents and copyright throwing off balance between individual and societal benefit.

Courts are patient regulating porn on Net while ensuring free speech (CDA and laws like it struck down), yet it is quickly protecting the rights of Hollywood without regards to the consequences. Furthermore, Congress is acting in an area where copyright owners have already expanded their control:

Content providers have been eager to deploy code to protect content; that much I and others expected. But now, not only Congress but also thte courts have been doubly eager to back up their protections with law.

p. 181

Well, in one sense, one ight say the change is quite dramatic. Now, rather that simply posting this ocntnet to a few friends who might pass through the dorm room, this student is making this content available to millions around the world. After all, pages on the World Wide Web are available anywhere in the world. Millions use the World Wide Web. Million can now, for ree, download the content that this student posted.

But there's a gap in this logic. There are millions who use the World Wide Web. But there are billions of Web pages. The chances that anyone will stumble across this student's page are quite slight. Search engines balance this point, though that depends upon what's on a particular page. Most Web pages are not even seen by the uthor's mother. The World Wide Web has amazing potential for publishing; but a potential is not a million-hit site.

Fox going after Simpsons fan sites

EMI going after OLGA

Mattel going after creators of CPHack (CyberPatrol Hack) on the grounds of copyright protection. Eventually just bought CPHack, and thus exercised copyright controls over CPHack (even though it was GPL'd)

DMCA

p. 188

If copyright law must protect fair use -- meaning the law cannot protect copyrighted material without leaving space for fair use -- then laws protecting code protecting copyrighted material should also leave room for fair use.

DeCSS: defendants weren't pirates, studios could show no monetary damages, use was to enable playback on other devices

iCraveTV: has established a pattern by which sites have to can be shutdown based on the laws of a foreign nation. By virtue of being connected to the Internet, one is now subject to the laws of every country connected to the Internet.

My.MP3.com: $110M in damages because music industry successfully argued that by copying the CDs to their own servers, there was a "willful" violation of copyright

Napster

Though the VCR was designed to steal, the Court concluded that it could not be banned as an infringing technology unless there was no "potential" for a "substantial noninfringing use."

Eldred and copyright extension: works due to be made available in 1999 extended until 2019. Went to the federal court. Court ruled that even if Congress were in effect creating perpetual copyrights on an installment plan, they were not constitutionally prevented from doing this so long as each extension was for a fixed term.

The Wind Done Gone: what benefit is there to preventing sequels to Gone With the Wind, and work that arguably should be part of the public domain as it is part of our culture now.

The reaction of Congress and courts to expand control in the Internet space so quickly is surprising considering that there is no evidence of harm: CD sales have risen

p. 200

...If the Net creates an initial imbalance, the response by Congress should not create an equal and opposite imbalance, where traditional rights are lost in the name of perfect control by content holders.

That was my argument in Code. But now we should add a second concern to that same story: The response by Congress should also not be such as to permit this concentrated industry of today to leverage its control from the old world into th new.

Seed money for digital music initiatives has dried up because new companies must have blessing of existing record industry, which is not interested in companies that might displace their power.

Model for Napster should have been the same that was used for cable tv, i.e. compulsory licensing, which equates to:

Compensation without control.

Kozinksi (p. 204):

"Private land... is far more useful if separated from other private land by public streets, roads, and highways. Public parks, utility right-of-way and sewers reduce the amount of land in private hands, but vastly enhance the value of the property that remains."

"Overprotecting intellectual property is as harmful as underprotecting it. Creativity is impossible without a rich public domain."

Patent law threat.

p. 205

...For some kinds of innovations, patents are extremely likely to induce more innovation. In particular, in thearoy, where innovation is independent, or noncumulative (meaning one invention is essentially separate from another), then economists predict that patents will clearly benefit innovation. Likewise, even where innovation is cumulative, if the use of the patent is clear, then in principle, the original patent holder will have a strong incentive to license a patent to follow-on innovators. but here, economists have an important qualification: If we don't know which direction an improvement is likely to take, then licensing may not occur, and patents here may actually do harm. Thus, for economists, at leat, the theory suggests contexts in which innovation will be helped by patents as well as contexts where it will be harmed.

The empirical evidence is less encouraging. The strongest conclusion one can draw is that whatever benefits patents provide (except in industries such as pharmaceutics),it is small.

In the 1980s, the USPTO decided to start granting software patents. Prior to that, software patents were considered to be like algorithms, which aren't traditionally protected. Now, software can be patented, and, furthermore, the inventor does not have to reveal the source code; others are not able to directly build on the invention. * Coders were not demanding software patents * Adobe didn't want software to be patentable * Oracle didn't want software to be patentable

In 1998, business processes became patentable. Previously, it was assumed that the return from using the business process would be sufficient incentive to invent.

"patents are monopolies; monopolies raise prices."

p. 214

Heller introduces the concept of an "anticommons." If a commons is a resource where everyone has a right to use the resource (and thereforce sometimes overuse the resource), an anticommons is a resource where many have the right to block the use of a resource by others (and therefore many more underuse the resource). Heller gives the example of the formerly state-owned buildings in post-Soviet Russia: Because of the many claims that could be made on them, the buildings were never developed. Too many bureaucrats could veto any project, and thus insufficient effort at innovating in the use of these buildings was made.

Chapter 12, Controlling Wire-less (and Hence the Physical Layer)

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