Sunday, February 26, 2006

Telcos & Google's Revenue

I haven't written about the recent remarks by telecomm executives about Google "stealing" revenue that is rightfully theirs. It strikes me that this really a case of P/E envy but let's take a look at the comments and what they really reflect about the problems that the RBOCs face.

Despite the billions they raked in during the dot com boom, the problem is that telcos mostly sell (phone service) which is complete commodity. While they also sell leased lines and data centers, their profit margins are almost entirely found in their residential phone service. Consumers are paying too much for far too little service. Let's take my provider Qwest. We have two lines from Qwest - a line for my office and one for the house. Despite various bundling options our phone bill is regularly between $125~$150 per month. We don't have voice mail, or three way calling or a whole host of other features regularly pushed upon us by Qwest's telemarketing reps. I spent a whole lot of time on the phone with Qwest to figure out why my bill was so high. During that conversation one thing really struck me. My expectations of service and Qwest's were completely at odds. When I noted to the rep that my phone situation was hardly complex, her response was "Sir most people don't have two lines. You have more services than most of our customers. You have a pretty complex phone set up."

The strange thing I thought the number of services I derive from the phone company completely at odds with the actual cost. For example my high speed wireless connection is far more valuable to me than my phone and provides far more value. I regularly run Skype for phone calls. In fact I recently called London on Skype, to find out where a check was. When I queried about the call quality, the woman on the other end of the phone was surprised not only I wasn't in London, when she found out it was an internet telephony call she was downright incredulous. I would hesitate to guess the cost of making that phone call with Qwest. Certainly far too much as I found out when making calls to Canada. I have stopped using my phone for all international calling.

The problem of course is that telcos haven't kept up with customer's expectations. They are simply providing a connection to what people find really valuable, namely the Internet and the content contained therein.

Who provides that connection is completely inconseqential to the user. They want the content. The connection is a means to an end. This is why the current telco posturing is in it's own way too funny to believe. They are the tail trying to wag the dog. Their threats to degrade access or (even cut off access) to Google or Yahoo are laughable. Let's say (Telco A)degrades access to Google because they want a slice of Google's revenue. Google's response is simple. They can simple re-direct that telco's customers to page saying, "Telco A has decided to degrade your access to Google. This despite being paid by you for internet access. Please let them know you want full access to the Internet at 1800 Pissed Customers.Or simply try Telco B for internet access."

The problem is that telco's see the revenue generated by Google and Yahoo and figure they deserve a slice. They no more deserve a slice of revenue from Google than they do the revenue from a direct mail company that uses phone lines to take orders.

Telcos seem to think (quite mistakenly) that because they own the connection the customer uses to access the internet, they own the customer. This is false. If they were to provide degraded service to those customers on a per site basis, they would cease being their customers, fleeing to telephony provider who will provide the access that customers want. I cannot imagine what stick (other than regulatory) the RBOCs have to enforce a payment from Google or Yahoo. By hurting their customers (who will certainly view it that way), cannot they expect to have some leverage.

The problem with RBOCs is that they simply lack the ability to quickly innovate. Instead they really prefer to roll out new services slowly and bill them accordingly. For example, Google launched in 1998. Why wasn't there a phone company version of Google already out there? It's because they saw the scope of such endeavors is a far too limited fashion. The RBOC search engines (such as Athand) saw themselves as online Yellow pages and NOTHING more. With this sort of innovative thinking it's no surprise that Athand and telco attempts at seartch were complete flops.

The attempt of a telco to retroactively exert a toll on the internet is doomed in any free market environment. Indeed Google is poised to leap frog all that copper the telco has spent billions stuffing into the ground. I can easily imagine Google with all that dark fiber it has bought, and wireless access to simply start offering free internet telephony, along with internet access. It will be interesting to watch what will happen in San Franicisco's free wireless environment.

Thursday, February 16, 2006

Microsoft's Temper Tantrum as Strategic Delay

Microsoft's Temper Tantrum as Strategic Delay

Microsoft despite it's size and maturity as a software company Microsoft is still capable of throwing quite a temper tantrum when it wants. While the change in administration from the Clinton Administration to the Bush administration in the United States meant that the anti-trust action by the Justice Department was quickly closed, in Europe the action is still on-going. And there Microsoft still continues to show it's ass, acting like a four year old forced to do something it doesn't want to do.

It's latest response just reflects poorly on the company. The EU wanted MS to DOCUMENT protocols and document various behaviors in the Microsoft operating system. Microsoft's response was to through the source code at the EU reps. They argued that the source code is the "ultimate documentation" and that the source code would be enough to allow their competitors to integrate with Windows to compete.

How do they know that? Well they queried various professionals and computer companies about the utility of the source code and they all agree it's enough. Of course Microsoft won't release the names of the companies or the professionals they cited.

Essentially Microsoft is saying,"We have discussed this with bunch of computer professionals and they all agree. The source code is enough."

The EU officials then asked,"Who are these people?"

To which Microsoft responded,"We cannot tell you."

It seems to me if you are going to quote an expert in a legal brief, people are going ask who that person is. To respond by claiming it's a trade secret is somewhat silly and very childish.

Look at the response to the documentation request. Microsoft responded to it by providing the source code, which ISN'T what the EU was asking for. They were asking for documentation in order to inter-operate with Windows various systems.

Microsoft dumped the source code as passive aggressive response. It's non responsive because source code (remember we are looking at 53,000,000 lines of code) doesn't actually respond to the request for DOCUMENTATION. This is an old corporate tactic called "Cover them with paper."

Microsoft knows anyone attempting to use the source code as a guide will spend more time attempting to decipher the source code than actually making a product to compete with Microsoft.

Keep in mind that the EU didn't ask for the source code. They asked for documentation of interfaces. In response to this Microsoft presented the Windows source code.

A set of documentation is more useful to developer seeking to develop a product for Microsoft Windows, especially a smaller development shop such as an open source development. The Windows source code is only truly useful for shops large enough to devote significant resources to it. By significant resources I mean more than a single individual - You will need a fairly good sized team (between 10-15 developers) solely devoted to making sense of the code.

In this regard providing the source code is an ideal response from Microsoft's perspective. It's a response that they can actually say is responsive (in a way) yet, it's not a response that open source developers can take advantage of in the same way that a set of clear documentation would be.

What I find almost amusing (if it wasn't so damn annoying) is why did Microsoft officials respond this way? The EU officials in Belgium don't change the way Washington changes. These bueaucrats aren't going anywhere. This particular delaying tactic only delays the eventual documentation that Microsoft is going to have to provide. The EU isn't the United States with a convienant election to completely shift the focus of the government.

Furthermore the EU is far too large a market for Microsoft to take it's ball and go home. Ballmer once actually threatened to do just that by leaving the European market. I suspect that MS is doing this because they are hoping that this will be enough and the Eueaucrats will leave them alone. The initial response however, that the Eueaucrats see the Microsoft ploy for just what it is a ploy and are likely to tag this response as a non-responsive.

It's also clear that MS understands the power of delay tactics. After the change of administration in 2001, MS quickly settled. They have continued to fight the EU for the past five years and will continue fight the EU until they have no choice. This means five-six years of preventing competitors actually launching products based the documentation that should have been provided years ago.

This strategic delay provides MS even more time to continue and extend their monopoly position in various software markets, increasing the barriers to entry for competition.

Thursday, February 09, 2006

Stallman, Commons, and the GPL3

Stallman, Babies, Bathwater and the GPL.

Why does Richard feel it necessary that if something doesn't fit his model of freedom, that it becomes necessary to throw the whole thing out? He has directed this latest conciption at the Creative Commons folks. Noting that the variety of licenses developed by them contains some pretty restrictive licenses. Some are pretty open, and are more open than the GPL. Instead of noting that some of the licenses are pretty restrictive, he thought it better simple to davvow the whole thing and that if he endorsed certain licenses, people would misunderstand that to mean a blanket endorsement of all the Commons licenses. I would call that copout in today's world. Communication is networked. People can quickly find out which licenses are FSF(Free Software Foundation) friendly by pulling up the browser Richard. There shouldn't be any confusion about which licenses you feel are appropriate.

However instead of actually suggesting which Creative Commons licenses are FSF friendly, Richard simply suggests that he actually can't be bothered with it. Instead he writes in a LinuxP2P article.


Some Creative Commons licenses are free licenses; most permit at least noncommercial verbatim copying. But some, such as the Sampling Licenses and Developing Countries Licenses, don't even permit that, which makes them unacceptable to use for any kind of work. All these licenses have in common is a label, but people regularly mistake that common label for something substantial.

I no longer endorse Creative Commons. I cannot endorse Creative Commons as a whole, because some of its licenses are unacceptable. It would be self-delusion to try to endorse just some of the Creative Commons licenses, because people lump them together; they will misconstrue any endorsement of some as a blanket endorsement of all. I therefore find myself constrained to reject Creative Commons entirely.


His suggestion? Why the GPL of course. He does note,

It may seem obvious, but it's not true. The GNU GPL is written primarily for software, but it can be used for any kind of work. However, its requirements are inconvenient for works that one might want to print and publish in a book, so I don't recommend using it for manuals, or for novels.


And actually Richard the GPL is nigh unto useless for any creative endeavor such as novels, stories, manuals, music etc.

Richard displays this same idiosyncractic nature in the proposed GPL3. Linus has thoughtfully pointed out the tactical error of fighting the DRM and commons war in the latest version of GPL, noting that providing copies of your private keys so others can copy your signed GPL application is a non starter since that completely undercuts the useful security features.

Richard is trying to make a point about DRM. However he is trying shoehorn it into a license where he doesn't belong. His recent turnaround on the Creative Commons is because he believes his way is the only way. He believes the GPL3 should be the single point of attack of securing both our rights as software users and content consumers.

Richard's stubborness is an admirable trait in an advocate. He has stood for the rights of programmers everywhere. But stubborness often leads you astray. The GNU project struggled for years attempting to complete a micro kernel. The HURD is still incomplete after 20 years of struggle. This means litterally hundreds of thousands of man hours spent on the project. It should have become apparent after the 5th year that this particular tree wasn't going to bear fruit. Yet Richard continued to encourage and focus on the hurd for ANOTHER 12 years.

Richard's stubborness (literally that it's his way or the highway) means that he is missing an essential component to the growth of the free software movement. It's the critical mass of people writing and using free software. For the new cultural commons to be built, it's going to take a large group of writers, producers, musicians, videographers, choreagraphers et al to develop it. The GPL is simply the WRONG tool to develop this new cultural commons. Yet he changed his mind about the Creative Commons licenses, after the introduction of the GPL3. I mean the highly restrictives licenses of the Creative Commons have always been there as part of the organization.

I hope Richard will give more thought to his decision that he can "no longer support the Creative Commons." The GPL3 isn't a broad enough tool to develop that Cultural Commons.

Sunday, February 05, 2006

Torvalds on GPL3

Linus Torvalds, creator and great guardian of the Linux kernel, has expressed an opinion on the the new GPL3. As posted in these following posts here, here and here at Slashdot. This Newsforg article on Linus' GPL3 covers pretty suscinctly why Linus dislikes the DRM components of GPL3.

Torvalds point is a simple one and one that after a little thought I agree with. The GPL isnt' the place to fight this battle. It's out of place here. From the Linux kernel mailing list,

If enough interesting content is licensed that way, DRM eventually becomes marginalized. Yes, it takes decades, but that's really no different at all from how the GPL works. The GPL has taken decades, and it hasn't "marginalized" commercial proprietary software yet, but it's gotten to the point where fewer people at least _worry_ about it.

As long as you expect Disney to feed your brain and just sit there on your couch, Disney & co will always be able to control the content you see. DRM is the smallest part of it - the crap we see and hear every day (regardless of any protection) is a much bigger issue.

The GPL already requires source code (ie non-protected content). So the GPL already _does_ have an anti-DRM clause as far as the _software_ is concerned. If you want to fight DRM on non-software fronts, you need to create non-software content, and fight it _there_.


In short Linus believes that the attempt to reassert the commons is largely lost. After thinking about it I agree. Copyright terms are going to be extend to infinity and in instead trying to shovel back the tide; an entire seperate ecosystem needs to develop exactly like the original GPL developed the free software ecosystem. I understand what Richard is trying to do here; the free software ecosystem is pretty important here. In that regard the Creative Commons licenses are the place to start. Given that the means of production of even features are beginning to drastically decrease given Moore's law, this ecosystem is growing richer over time. Only by developing our own commons can we break the cultural stranglehold.

Monday, January 23, 2006

GNU Thoughts

With the release of the GNU3 or threeGNUS as I like to call it we are seeing FSF take a square aim at one of the greatest threats that free software has - software patents. I have spent some time looking at the New GNU and have gathered some thoughts on the matter. Before I go any further I want to say right off I bat I am a big believer in property rights and understand the importance of various forms what is currently deemed "intellectual property." I use quotes because despite the efforts to treat these rights as property, they are not. To use the term property in regard to them is it confuse what the term property means.

Despite what many people think software has only be considered patentable in the last nine years. That's right, software patents have emerged relatively recently when the Patent Office issued their Final Computer Related Examination Guidelines. There are several implications of the relative newness of software patents.

Despite the mantra that patents are ALWAYS good. It's not entirely clear that most software patents are written in a way that is clearly implementable. Patents are mostly prepared by attorneys which instead of seeking of clarity of langauge in order to convey the method or idea seek to obfusticate the idea so that they will have more flexibility on interpreting the patent at trial.

This is quite different than previous patents where the clarity of language and thought is rewarded with a 20 year monopoly. Remember at one time the US Patent office required models to accompany patents, reflecting the utilitarian nature of the US patent office. No other patent office at the time required models so in a way the US patent office did.

This utility streak has long been a cultural aspect of the US patent office which with the addition of business process patents and software patents has taken a turn for the murky.

Because of the way that software patents are currently written, it nearly impossible to really understand what a software patent may do. This is because instead of being written in clear easy to understand code, imprecise language is used. Additionally almost all software patents lack an actual implementation of the patented idea. This is done because the people wanting to do the software patenting don't want to limited in the way they enforce the patent. Actual code would mean that the invention might be circumscribed (or at least accurately described).

Let's remember what a patent is for. It's a limited monopoly granted by the state. In return the inventor is supposed to accurately describe the invention. While patent infringement certainly has occurred often enough in business, the very inaccurately described nature of software means that patents are written for ambiguity, not clarity. Software is one of the few categories where accidental infringement is quite commonplace.

Because of the very nature of software patents and the way they are currently being implemented (no pseudo code for example or actual examples of the software), it is quite commonplace for a company to assert a patent covers something when it doesn't. For example British Telecom asserting that hyperlinks were a BT patented technology when they were demonstrated in 1968 and had been written about in the late forties.

Additionally the patent office currently still doesn't have the expertise to effectively judge whether a software patent is unique and non obvious. People with the familarity with patent law and software can find better paying jobs in the private sector.

So software patents as they are currently implemented have problems. The New GNU license takes aim at this by essentially requiring companies that use GNU software, to license their patents down stream. Let's take an example.

Company A produces routers. They also currently use a modified GNU library in the device. Thy comply with the GPL and release their changes publically. In the course of operations they have developed several software patents improving reliabilty of routing etc. Let's give them the benefit of the doubt and say these are non obvious, true inventions (I know this is the definition of a patentable idea. However after reading and writing several software patents, I know this is often not the case). The developer of this library has decided move to the GPL3 as his license.

At this point the company has a choice. They can continue to use the old library under the GNU Public License (which will probably entail more work and money as they will be supporting the project themselves with developers) or they can chose to accept the GPL3 terms. In accepting the GPL3 terms they then are licensing their patent portfolio to the GPL developer and downstream developers as a world wide royalty free license. Please note this license is only granted to those developers who comply with the the terms of the GPL3. They in no way give up their patent or their ability to enforce their patent against other companies.

As much as I hate quoting Tony Soprano in this context but it's simple. "You want get respect, you gotta give respect." In short don't take someone else's code and then sue him with a patent you derive from it.

I think Richard Stallman has done a great job of trying to tackle the problems with software patents. It effectively balances the rights of patent holders and the rights of GPL developers. It's going to be interesting to see how it will all play out over the next year as that's how long the comment period is.

BSD

Monday, January 16, 2006

Draft of GNU 3

GNU GENERAL PUBLIC LICENSE
Draft 1 of Version 3, 16 Jan 2006

THIS IS A DRAFT, NOT A PUBLISHED VERSION OF THE GNU GENERAL PUBLIC LICENSE.

Copyright (C) 2006 Free Software Foundation, Inc.
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No other additional conditions are permitted in your terms; therefore, no other conditions can be present on any work that uses this License. This License does not attempt to enforce your terms, or assert that they are valid or enforceable by you; it simply does not prohibit you from employing them.

When others modify the work, if they modify your parts of it, they may release such parts of their versions under this License without additional permissions, by including notice to that effect, or by deleting the notice that gives specific permissions in addition to this License. Then any broader permissions granted by your terms which are not granted by this License will not apply to their modifications, or to the modified versions of your parts resulting from their modifications. However, the specific requirements of your terms will still apply to whatever was derived from your added parts.

Unless the work also permits distribution under a previous version of this License, all the other terms included in the work under this section must be listed, together, in a central list in the work.

8.[4] Termination.

You may not propagate, modify or sublicense the Program except as expressly provided under this License. Any attempt otherwise to propagate, modify or sublicense the Program is void, and any copyright holder may terminate your rights under this License at any time after having notified you of the violation by any reasonable means within 60 days. However, parties who have received copies, or rights, from you under this License will not have their licenses terminated so long as they remain in full compliance.

9.[5] Not a Contract.
=20=20=20=20=20
You are not required to accept this License in order to receive a copy of the Program. However, nothing else grants you permission to propagate or modify the Program or any covered works. These actions infringe copyright if you do not accept this License. Therefore, by modifying or propagating the Program (or any covered work), you indicate your acceptance of this License to do so, and all its terms and conditions.

10.[7] Automatic Licensing of Downstream Users.

Each time you redistribute a covered work, the recipient automatically receives a license from the original licensors, to propagate and modify that work, subject to this License, including any additional terms introduced throughon 7. You may not impose any further restrictions on the recipients' exercise of the rights thus granted or affirmed, except (when modifying the work) in the limited ways permitted by section 7. You are not responsible for enforcing compliance by third parties to this License.

11. Licensing of Patents.

When you distribute a covered work, you grant a patent license to the recipient, and to anyone that receives any version of the work, permitting, for any and all versions of the covered work, all activities allowed or contemplated by this license, such as
installing, running and distributing versions of the work, and using their output. This patent license is nonexclusive, royalty-free and worldwide, and covers all patent claims you control or have the right to sublicense, at the time you distribute the covered work or in the future, that would be infringed or violated by the covered work or any reasonably contemplated use of the covered work.

If you distribute a covered work knowingly relying on a patent license, you must act to shield downstream users against the possible patent infringement claims from which your license protects you.

12.[7] Liberty or Death for the Program.

If conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute the Program, or other covered work, so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute it at all. For example, if a patent license would not permit royalty-free redistribution by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution.

It is not the purpose of this section to induce you to infringe any patents or other exclusive rights or to contest their legal validity. The sole purpose of this section is to protect the integrity of the free software distribution system. Many people have made generous contributions to the wide range of software distributed through that system in reliance on consistent application of that system; it is up to the author/donor to decide if he or she is willing to distribute software through any other system and a licensee cannot impose that choice.

[13.[8] Geographical Limitations.

If the distribution and/or use of the Program is restricted in certain countries either by patents or by copyrighted interfaces, the original copyright holder who places the Program under this License may add an explicit geographical distribution limitation excluding those countries, so that distribution is permitted only in or among countries not thus excluded. In such case, this License incorporates the limitation as if written in the body of this License.]

14.[9] Revised Versions of this License.

The Free Software Foundation may publish revised and/or new versions of the GNU General Public License from time to time. Such new versions will be similar in spirit to the present version, but may differ in detail to address new problems or concerns.

Each version is given a distinguishing version number. If the Program specifies that a certain numbered version of this License "or any later version" applies to it, you have the option of following the terms and conditions either of that numbered version or of any later version published by the Free Software Foundation. If the Program does not specify a version number of this License, you may choose any version ever published by the Free Software Foundation.

15.[10] Requesting Exceptions.

If you wish to incorporate parts of the Program into other free programs whose distribution conditions are different, write to the author to ask for permission. For software which is copyrighted by the Free Software Foundation, write to the Free Software Foundation; we sometimes make exceptions for this. Our decision will be goals of preserving the free status of all derivatives of our free software and of promoting the sharing and reuse of software generally.

NO WARRANTY

16.[11] There is no warranty for the Program, to the extent permitted by applicable law. Except when otherwise stated in writing the copyright holders and/or other parties provide the Program "as is" without warranty of any kind, either expressed or implied, including, but not limited to, the implied warranties of merchantability and fitness for a particular purpose. The entire risk as to the quality and performance of the Program is with you. Should the Program prove defective, you assume the cost of all necessary servicing, repair or correction.

17.[12] In no event unless required by applicable law or agreed to in wri=
ting will any copyright holder, or any other party who may modify and/or redistribute the Program as permitted above, be liable to you for damages, including any general, special, incidental or consequential damages arising out of the use or inability to use the Program (including but not limited to loss of data or data being rendered inaccurate or losses sustained by you or third parties or a failure of the Program to operate with any other programs), even if such holder or other party has been advised of the possibility of such damages.

18. Unless specifically stated, this software has not been tested for use in safety critical systems.

END OF TERMS AND CONDITIONS

How to Apply These Terms to Your New Programs

If you develop a new program, and you want it to be of the greatest possible use to the public, the best way to achieve this is to make it free software which everyone can redistribute and change under these terms.

To do so, attach the following notices to the program. It is safest to attach them to the start of each source file to most effectively convey the exclusion of warranty; and each file should have at least the "copyright" line and a pointer to where the full notice is found.


Copyright (C)
This program is free software; you can redistribute it and/or modify it under the terms of the GNU General Public License as published by the Free Software Foundation; either version 3 of the License, or (at your option) any later version.

This program is distributed in the hope that it will be useful but WITHOUT ANY WARRANTY; without even the implied warranty of MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the GNU General Public License for more details.

You should have received a copy of the GNU General Public License along with this program; if not, write to the Free Software Foundation, Inc., 51 Franklin Street, Fifth Floor, Boston, MA 02110-1301 USA


Also add information on how to contact you by electronic and paper mail.

If the program does terminal interaction, make it output a short notice like this when it starts in an interactive mode:

Gnomovision version 69, Copyright (C) year name of author Gnomovision comes with ABSOLUTELY NO WARRANTY; for details type `show w=
'.This is free software, and you are welcome to redistribute it under certain conditions; type `show c' for details.

The hypothetical commands `show w' and `show c' should show the appropriate parts of the General Public License. Of course, the commands you use may be called something other than `show w' and `show c'; for a GUI interface, you would use an "About box" instead.

You should also get your employer (if you work as a programmer) or your school, if any, to sign a "copyright disclaimer" for the program, if necessary. Here is a sample; alter the names:

Yoyodyne, Inc., hereby disclaims all copyright interest in the program `Gnomovision' (which makes passes at compilers) written by James Hacker.

, 1 April 1989 Ty Coon, President ofollow the GNU GPL, see http://www.gnu.org/licenses.

The GNU General Public License does not permit incorporating your program into proprietary programs. If your program is a subroutine library, you may consider it more useful to permit linking proprietary applications with the library. If this is what you want to do, use the GNU Lesser General Public License instead of this License.