actafacts.com, a new pro-ACTA website, made the rounds earlier this month, along with a new report claiming ACTA would create billions of euros in growth and hundreds of thousands of new jobs. Glyn Moody was quick to pull the facts apart. FSF called it "3rd-rate astroturfing" and EDRI suspected "parody." This week actafacts.com resurfaced on fliers at the European Parliament and on the entrance door to the EU Trade committee, prior to an important vote on whether to recommend the European Parliament to reject or accept ACTA on July 4th. The flyer, displaying a majestic container ship plowing through a quiet sea, was as clear in its advocacy -- "A vote against ACTA would be a vote against Europe's economy. Get the facts at actafacts.com" -- as it was unclear about its origins (potentially violating EU rules). Oh, and the container ship image? Yeah, it's infringing according to Jeremie Zimmermann. This, and other last-minute-lobbying-attempts, seem to have had little impact. The trade committee voted down ACTA. However, it's interesting to analyze who's actually behind this now that the monster has reared it's head.

The registration info of actafacts.com is anonymized, but the the HTML source of the page points, rather clumsily, to the c: drive of a Mr. Jeff Hardy.

Jeff Hardy happens to be director of BASCAP, Business Action to Stop Counterfeiting and Piracy, which is a subdivision of the International Chamber of Commerce. The ICC describes itself as "the voice of world business," and is an immensely powerful lobbying group, promoting the specific interests of large member companies.

It's no surprise that American pro-ACTA lobbyists would pull thinly veiled stunts like these, though one would expect them to be able to hire better web designers (and check the HTML code for origin clues). What IS surprising is that the European Commission treats the group's "facts" as such.

One of the problems with the astronomical figures Trade Commissioner De Gucht has been using in defense of ACTA, is that they cover both supposed losses due to counterfeiting of tangible (physical) goods, and non-tangibles, ie. digital / Internet piracy all conflated together. While he can lean on credible, reasonably well-sourced numbers on physical counterfeiting from the OECD, there are none on Internet piracy. That's because, as OECD economist Danny Scorpecci explained to me, the data is simply too unreliable; too many factors need to be considered.  

So, I repeatedly asked De Gucht's office to provide numbers backing the claim that internet piracy hurts the EU economy, and causes job losses in the creative sector. His team returned with one report: Building a Digital Economy: The Importance of Saving Jobs in the EU's Creative Industries from TERA consultants, commissioned by -- you guessed it -- BASCAP, Jeff Hardy's team. The report "predicts losses due to [digital] piracy to reach as much as 1.2 million jobs and €240 billion in retail revenue by 2015 (...) assuming no significant policy changes." I asked whether the commissioner had taken into account the clearly biased and, according to the SSRC, misrepresentative nature of the report's claims.

John Clancy, EU Trade Spokesperson, rejected that criticism offhand, without actually responding to it: "such analysis does not suddenly make the report invalid and the information contained in it unfounded". Well, that depends. Joe Karaganis of the Social Science Research Council dismissed the TERA report entirely because of its use of "a methodology developed by Stephen Siwek in a series of papers commissioned by the MPA, RIAA, and ESA [aiming to] expand the debate about piracy beyond claims of losses to specific industries to losses to national economies, including especially lost jobs". Karaganis argues that the contrary may well be the case, and that the EU may well "realize a strong net welfare benefit from audiovisual and software piracy" because money is spent elsewhere, not lost, and because the supposed job losses would happen in the US, thus affecting the trade balance positively for the EU. Siwek's analysis does not even take into account this possibility.

When I spoke to Jeff Hardy in April about the report he defended the methodology and the use of Stephen Siwek as an advisor: "Our mission is to paint a picture with numbers. We try to be conservative, even though the numbers are gigantic. This is an illegal business. This is black market. We don't have all the numbers, but someone has to step up. We need to have an understanding of the magnitude of the problem, that this is a real, economic loss." And, apparently, the way to do so is not to address the facts, but to just make up numbers.

Hardy told me that the ICC hired TERA after their HADOPI report, which concluded that France would lose 10,000 jobs in the creative industry by 2012 unless France adopted the "3 strikes" law. This report uses the same methodology, dubbed "copyright math" by Rob Reid in his $8 billion iPod TED Talk. So, why, when everyone else -- even the US Government -- admits these inflated piracy numbers are bogus, does the EU Commission keep repeating them? This must be a successful turn of events, I asked Jeff Hardy? "Well, assuming our number is big enough, it's successful", he replied.

Yes, that's right, in a refreshing moment of candor, Hardy appears to be admitting that all he cared about was making sure the number was "big enough," not particularly "accurate." That seems like a "fact" worth keeping in mind when you judge these "actafacts."

Techdirt has always been sceptical about Nathan Myhrvold's business plan for Intellectual Ventures (IV) -- build up a huge portfolio of patents, simply so that it can then license them to those that will, and sue those that won't. Others, however, have been dazzled by Myhrvold's pedigree as an extremely wealthy ex-Microsoft manager, and by the fact that patents have undeniably become a central concern for the tech industries in recent years, which suggests that there is plenty of money to be made from them.

But there are signs that the IV magic is fading. Here, for example, is a report of Myhrvold's appearance at D: All Things Digital this year, under the headline "Nathan Myhrvold on Being the Most Unpopular Guy at D10":

Myhrvold made the case to the crowd, though probably unsuccessfully, that his company serves a purpose similar to that of venture capital or private equity in the process of aiding innovation.

Myhrvold also quoted his own past statement at an earlier D conference, saying, "If people don’t find what you are doing threatening, then it is probably not very important."

More recently, the attacks have been less personal, but in some ways more damaging:

Around 2008 Nathan Myhrvold, Microsoft’s former chief technology officer, raised $2.9 billion in two separate funds to invest in patents and inventions. More than four years later, those funds have returned very little cash back to their investors and the returns look lousier than ever.

The article in Forbes quoted above goes on to describe one of Intellectual Venture's more recent patent-buying funds as "a complete disaster." It also notes IV's reply to these criticisms:

the firm points out the answer is that the life cycle of the firm’s funds is longer than the ten-year period usually associated with private equity-type investments. The funds are linked to the 20-year lives of the patents the funds acquire or develop.

But there's a larger issue than what the real internal rate of return is, and that's the underlying viability of Myhrvold's model. There is no evidence that IV encourages innovation in any way, despite the company's claims that it "creates a market place" for patents.

Instead, it really seems no different from your common-or-garden troll, hoping to hit the jackpot by picking up a patent that a successful company later finds it simply must license or risk going out of business. Leaving aside the morality of such an approach, it's inherently risky: IV has to hope that enough other companies come up with the actual valuable innovations that its patents can then parasitize.

The comments above could be the first straws in the wind that business opinion is starting to turn against Myhrvold. It will be interesting to see if IV starts suing companies more aggressively in an attempt to get the money rolling in -- and what it does if that fails to deliver the kind of returns investors are presumably hoping for. That could well happen if those being sued sense that IV is under pressure, and decide as a result to opt for a long, hard -- and expensive -- fight in the courts to exploit that fact.

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Personal transportation is getting better and more convenient all the time -- just check out a bit of the history of the bicycle (or velocipedes). An early velocipede was even nicknamed the "boneshaker" for its uncomfortable ride. Here are just a few advances in the field of personal vehicles that look slightly more pleasant to ride.

• Common bicycles have messy, noisy, annoying chains to deal with, but the BMC UC01 city bike uses the Gates Carbon Drive system with a tough belt and nearly silent operation. Maybe it's not as hip as a fixie, but if you have $2K to spend on a cool bike, you probably don't care. [url]
• The Solowheel is an electric unicycle that charges up in 1-2 hours with a range of 10-20 miles. It can be ridden hands-free, but that doesn't mean you shouldn't be careful... [url]
• The YikeBike is a compact electric bicycle with anti-skid regenerative brakes that can fold up and be carried in a backpack. Two wheels makes it look a bit safer than the Solowheel, but it's only a matter of time before someone finds out for sure. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

Via Slashdot, we learn of a lawsuit filed by a "brand protection and anti-counterfeiting" law firm, Gioconda Law Group, against Arthur Wesley Kenzie -- a guy who apparently has been registering typo versions of company domain names (typosquatting) and then receiving the emails received at those domains -- possibly using them to pitch his own "security" help to the companies. He did this to Lockheed Martin, who chose to just get the domain transferred to them via the UDRP process, but Gioconda is suing for "trademark infringement and unlawful interception of a law firm's private electronic communications." The trademark claims may make sense -- since you could argue that there's a likelihood of confusion. And, clearly, what this guy was doing was sleazy. But is it really "unlawful interception of a law firm's private" emails? That's where it seems much trickier. After all, he didn't actually "intercept" anything. They were sent to him. The "problem" is that the senders chose the wrong address.

Gioconda seems to be claiming that because the emails didn't bounce, he was guilty of setting up special email boxes to intercept the law firm's emails:

"We discovered the cybersquatting and sent several test e-mail messages... to see if they were delivered to the misspelled e-mail addresses, and indeed, they were received by active mailboxes."

But, uh, plenty of domains are set up to allow any email to be received by an active (usually admin or default) account. So the fact that the emails went to a live account, rather than a bounced account doesn't automatically indicate "unlawful interception." That said, it does seem like what the guy did was pretty questionable, but it just seems dangerous to set a precedent that having someone send an email to the wrong address is somehow an illegal "interception."

Slashdot points us to an article about a new research report, commissioned by a biotech trade group that argues the evidence shows that patents spur innovation, rather than hinder it. However, as some quickly noticed, the report has severe methodological flaws, starting with the fact that it seems to use patent activity as a proxy for innovation. So, it argues that stronger patent law creates more patents (or more funding of patents or more sales/licensing of patents) -- and then claims that clearly there's more innovation. But we already knew that patent laws spur patents. The question -- not answered in the report -- is about the actual impact on innovation.

Just as an example, the report provides some case studies from different countries. In one of them, it talks about how Taiwan basically took the US' Bayh-Dole Act, which encourages the locking up of university research... and shows there was much more patenting afterwards. The report discusses how "impressive" this is:

A 2010 study of the effects of this legislation on university patenting activity provides a concrete and detailed example of the positive effect the introduction of technology transfer mechanisms can have. The study examines patents granted to 174 Taiwanese universities during the period of 2004 to 2009 and compares this to the period preceding it. Strikingly, the study finds a sharp and sustained increase in university’s patenting activity: patenting increased from 446 patents in 2004 to 1,581 by 2009. This is an impressive increase of 354%. As importantly, apart from a slight drop in 2007, this growth has been progressive and sustained year after year.

Yup. So patent laws that expand the coverage of what's patentable and provide incentives for more patents... increase the number patents. What does that say about innovation? Abso-freaking-lutely nothing. And, in fact, if you look at the actual research on the impact of Bayh-Dole in the US, while it similarly increased patent activity, it didn't increase research, and actually held it back. This is because university research is meant to be shared and meant to be discussed and to have others work on it. That's how great research is done: with lots of sharing of information and ideas to spark new thinking. But the Bayh-Dole Act basically told researchers to shut up, keep things secret, and patent the results. Because of that there are a lot more patents, but a lot fewer real breakthroughs, because you no longer have the same information sharing, discussion and openness that created true innovation in the past.

One of the earliest proposals for mass surveillance was the Panopticon:

a type of institutional building designed by English philosopher and social theorist Jeremy Bentham in the late eighteenth century. The concept of the design is to allow an observer to observe (-opticon) all (pan-) inmates of an institution without them being able to tell whether or not they are being watched.

The design consists of a circular structure with an "inspection house" at its centre, from which the managers or staff of the institution are able to watch the inmates, who are stationed around the perimeter. Bentham conceived the basic plan as being equally applicable to hospitals, schools, poorhouses, daycares, and madhouses, but he devoted most of his efforts to developing a design for a Panopticon prison, and it is his prison which is most widely understood by the term.

As the rest of the fascinating Wikipedia entry on the subject explains, Bentham never managed to build his Panopticon prison, despite being given relatively large sums of public money to do so. But his idea not only lives on, it has come ever closer to realization thanks to new technologies. Boing Boing points us to this latest approach, based around smartphones and crowdsourcing:

The Metropolitan Police is hoping to use crowd-sourcing to identify people suspected of committing crimes in last year's riots in London.

Officers are to upload up to 2,800 CCTV images taken during the disorder in August on to its smartphone app.

What's particularly striking about this scheme is the scale:

"My hope is that the two-thirds of Londoners who own smartphones will download this app, and help us identify people we still need to speak to.

We need Londoners to browse through the app every week or so as new images will appear regularly. This is a fantastic way for Londoners to help us to fight crime."

In the case of the London riots, the CCTV images may be relatively unequivocal about crimes being committed; but the new scheme is already being extended beyond those exceptional events:

The app will also include a further 2,000 images of people wanted by the police for offences not connected to the riots.

That's worrying because there is no way of knowing what these people are accused of -- they might, for example, be involved in legitimate street protests against the UK government, or against multinational corporations in the UK, both of which have been subject to controversial policing in the capital. That seems a real possibility, given what Facewatch, the company behind the scheme's technology, says about its service:

An online crime reporting system for businesses to report crime providing the full evidential package required by the police

A way for businesses to deter crime by instantly sharing images of suspects between group members

In addition:

All images from reported crimes are viewed by the police who will try to identify and match suspects using the information provided.

This raises the prospect not only of deterring crime, but of deterring protests, since participating companies will be able to pass photos of protesters who are alleged to have committed criminal acts to the police, who can then add the faces to all the others on their smartphone app. Londoners can then help identify them without concerning themselves about the legitimacy of the requests, since they will just be part of the constantly-updated stream of alleged criminals. Jeremy Bentham would have been proud of such an efficient, anonymous system of control.

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Privacy. Everybody talks about it. Grandstanding politicians make plenty of loud noises in the general direction of the internet, disparaging it for turning your perusal of Kim Kardashian-related articles into targeted ads for breast enhancement surgery and Kanye West tickets. Of course, while these politicians are making all this noise about your privacy, they're quietly signing off on efforts allowing them to sneak in the backdoor and raid your browser history.

Putting the government in charge of your privacy has never been a great idea. When HIPAA was enacted, its privacy requirements greatly affected the medical community. Like many regulatory acts, HIPAA both raised costs (additional paperwork and other compliance factors) and lowered quality (negatively affecting retrospective research and curtailing proactive follow up care).

The true cost of all this additional paperwork, regulation and privacy is now coming to light. Via The Volokh Conspiracy comes the news that HIPAA's privacy requirements may have hampered research efforts that could have prevented an estimated 90,000 unnecessary heart attacks and 25,000 deaths.

Vioxx, the non-steroidal anti-inflammatory drug once prescribed for arthritis, was on the market for over five years before it was withdrawn from the market in 2004. Though a group of small-scale studies had found a correlation between Vioxx and increased risk of heart attack, the FDA did not have convincing evidence until it completed its own analysis of 1.4 million Kaiser Permanente HMO members. By the time Vioxx was pulled, it had caused between 88,000 and 139,000 unnecessary heart attacks, and 27,000-55,000 avoidable deaths.

Even the government's own regulators were stymied by HIPAA's privacy requirements, as was pointed out by Dr. Richard Platt, a drug risk researcher for the FDA:

The Vioxx debacle is a haunting illustration of the importance of large-scale data research. If researchers had had access to 7 million longitudinal patient record, a statistically significant relationship between Vioxx and heart attack would have been revealed in under three years. If researchers had had access to 100 million longitudinal patient records, the relationship would have been discovered in just three months. Of course, if public health researchers did post-market studies that looked for everything all the time, many of the results that look significant would be the product of random noise. But even if it took six months or one year to become confident in the results from a nation-wide health research database, tens of thousands of deaths may have been averted.

At least as troubling as the fact that several thousand deaths could have been prevented if HIPAA's restrictions and terms had not been so limiting is the fact that the privacy stipulations were put into place based on a faulty premise and the Dept. of Health and Human Services' misplaced confidence in the erroneous results.

The premise, as demonstrated by Massachusetts graduate student Latayna Sweeney, was that patient reidentification was possible using only voter registration records and Massachusetts Group Insurance Commission's (GIC) anonymized records. Sweeney was able to reidentify Governor Weld using voter record information, including birth date, name, address, zip code and sex and cross-referencing it with GIC's data. But, as Info/Law points out, Sweeney made a couple of errors, not the least of which was conflating two different terms:

Latanya Sweeney used census data to estimate that 87% of the population has a unique combination of 5-digit zip code, birthdate, and gender, and implied that the same sort of attack, using voter registration records or other public files. Phillip Golle's replication corrected the figure to 63%, though that's hardly comforting. But these uniqueness statistics are rather misleading. There is an important difference between distinguishability and identifiability. Distinguishability is a necessary condition to conduct the sort of matching attack that Ohm describes, but it is not sufficient. Latanya Sweeney conflated the two when she suggested that a unique individual can be identified by linking the unique combination of attributes to public records-voter registration records, e.g.. But public records are never complete. We know, for example, that a significant portion of the population is not registered to vote. How was Sweeney so sure that there was not another man who shared Gov. Weld's birth date and zip code who was not registered to vote?

Not only was the data set incomplete, but it was overly simplistic and off by a large margin:

Daniel Barth-Jones has recently uploaded a fascinating new article that revisits the famous Gov. Weld reidentification. To start with, Sweeney's estimate of the Cambridge population is way off. There were nearly 100,000 people living in Cambridge at the time of the William Weld attack. This should have been the first hint that Sweeney's methodology was overly simple. She reported a population of 54,000 because that is the number of Cambridge residents who were registered to vote. Sweeney used these records as if they described the entire population.

By comparing Sweeney's count of Cambridge voter registrants with U.S. Census records, Barth-Jones confirmed that many voting-age adults in Cambridge (about 35%) were not registered to vote. In William Weld's case, the census data show that approximately 174 men living in Weld's zip code were Weld's age. We don't know their precise birth dates, but we can calculate that the chance another man living in Weld's zip code shared his birthdate was about 35%. This is quite important all on its own to illustrate the difference between identifiability and distinguishability. Most of those 174 men had a unique combination of birth date, gender, and zip code, but each one of them was quite likely-35% likely-to be non-unique.

Sweeney presumably used the voter registration records to rule out the possibility that some of these 174 Cambridge men shared Gov. Weld's birth date. But even if Sweeney did indeed confirm that no other registered voter shared Weld's gender, zip, and birth date, she could not have been sure about the 50 or so Cambridge residents who were Weld's age and were not registered to vote. Thus, at best, Weld's chance of having a unique birth date, zip code, and gender combination is 87%. Put differently, the chance that Latanya Sweeney's matching attack would have been wrong using these three variables alone was 13%- much worse than traditional 5% statistical confidence.

Despite these erroneous assumptions based on incomplete data, the Dept. of Health and Human Services stated the study had shown that "97 percent of the individuals in Cambridge whose data appeared in a database which contained only their nine digit ZIP code and birth date could be identified with certainty." This completely ignores the fact that over a third of the population wouldn't even show up on the list.

But bad data and faulty research have never stopped governmental "progress." The threat of reidentification is low and any attacks remain purely speculative. But while bad regulations have a tendency to be able to weather even the toughest criticism without making the slightest concessions, HIPAA has one thing most bad regulations don't, as Info/Law points out: "a body count."

While most of the attention on ACTA has been focused on the growing likelihood that Europe will reject the treaty, it appears that something similar is happening down under as well. The Australian Parliament's "Joint Standing Committee on Treaties" is now recommending that Australia reject ACTA as well.

“The Joint Standing Committee on Treaties has thoroughly examined the text, the arguments and the positions taken by other governments and sees the writing on the wall; there appears a very real possibility that ACTA will not be ratified by sufficient countries in order to come into existence,” said Senator Ludlam.

“The Greens would welcome ACTA being ruled out completely because the content of this treaty is fatally flawed and the process that brought it about was shamefully and unnecessarily secretive. While our government did hold consultations they were farcical because those being consulted did not have the secret text and therefore couldn’t provide advice and feedback.

“Australia’s parliamentary committee is not alone in its detailed criticism of this Agreement. No less than five European Parliament Committees have recommended it be rejected. Several EU countries have suspended consideration until further notice and the Dutch Lower house has recommended its rejection outright. Hundreds of thousands of people have come out in demonstrations against ACTA throughout Europe and the United States.

What struck me as most interesting in this was the fact that Australia is also one of the major parties involved in negotiating the TPP agreement -- which is even more secretive than ACTA. Indeed, Senator Ludlam spoke out about that as well, comparing the two agreements:

“ACTA may well go down if governments listen to their people and parliamentary committees, however, many of the interests that drove ACTA are currently driving the Trans-Pacific Partnership Agreement – the obligations of this Agreement being negotiated in secret will affect very similar areas such as affordable medicines, Australian content and digital copyright issues.”

If this keeps up, ACTA is going to end up being an agreement between the US and Morocco and that's about it...

I already posted the responses of a bunch of musicians and music industry folks to the whole David Lowery/Emily White kerfuffle, but there were two more responses that were so good and so thorough I wanted to cover them separately. The first is from Zac Shaw, a musician and indie label owner who argues that if there's any ethical argument at all, it's the one in favor of free culture.

Asking today’s music consumers to kindly start paying for recorded music again because it’s the ethical thing to do isn’t only unviable — it’s not the ethical thing to do anymore. Free Culture is an ethic, and I think I can speak for my generation when I say we believe it to be the high ground over the way the music industry used to be run.

Shaw talks about his own experiences as a musician, getting signed to a label, having a deal that was impossible to recoup, and then the realization that while they had a fanbase, it just wasn't big enough to keep the band going. Unlike Lowery, Shaw isn't upset about this. He notes that this is the reality of the market. But he looks around at what's available today and he sees all sorts of opportunity. As he notes the people who are complaining loudest all seem to be the folks who were some of the very, very, very few musicians who succeeded under the old system. They tend to ignore all those who failed, because they liked it when they had gatekeepers keeping out the competition and keeping prices artificially high. But that was all based on lies and questionable behavior by record labels to keep out most musicians:

I’m going to level with you. You and many other Free Culture detractors are people from social circles with musicians that did well in the past but whose revenue dropped dramatically along with industry profits. I think the driver behind this blithely unrealistic “let’s go back to the way things were in the 90s” movement is pretty straightforward — you tasted profits from a business model that is no longer sustainable. You want your industry back.

We don’t.

Consider for a moment how were the profits of the “old” music industry won: By subjecting listeners and musicians — and indeed, our very culture — to a laundry list of horrendous commercial exploitation. Price fixing, payola, unpaid royalties, market monopolies, ticket surcharges, obscenely exploitative record contracts, manufactured popularity, censorship, perpetual copyright and destruction of fair use and the public domain… the list goes on and on. In short, the old way of doing things sucked and we don’t care if a few of that era’s successful artists no longer get mailbox money for music they recorded decades ago. We certainly don’t care if the record industry, which enabled these injustices, dies a slow, public death.

Shaw points out that, if anything, this new generation actually has much greater respect for musicians. What they don't have time for are those labels that did all of those things to keep music away from the public and to keep musicians from getting paid in the past:

Today’s musicians are held in higher esteem by listeners than ever before, and it’s the industry that has lost their respect (and money), due to a history of unethical behavior.

And, in fact, the new tools of today are changing the balance of power, and enabling the artists who couldn't even get in the door before to now reach out directly to fans and to build support without having to hand everything over to the gatekeeper:

Free Culture opponents often suggest technology somehow caused our generation’s desire for compensating musicians to evaporate. But it was clearly the corruption and ineptitude of the industry itself that is to blame for this negative attitude toward paying for music. Digital music technology provided the opportunity musicians and listeners have been waiting decades for — to balance the industry’s unchecked power, and maybe eke out a more sustainable living in the process.

Fans formerly had no apparatus to directly compensate artists. Now that they have tools like Kickstarter and Bandcamp, we’re seeing millions of dollars pouring directly into musician’s pockets.

As Shaw points out, Lowery and his friends want the next generation to "fix" the industry -- but the only way they can think to do so is to try to go back in time and re-establish that old system. But they miss the fact that this generation is actually fixing the industry by providing the wonderful new tools and services to help musicians: helping them create, promote, distribute, connect and monetize. It's just that it's "different" than the old way:

That’s the thing about asking our generation to fix the record industry. We’re already doing it. We’re connecting artists directly to fans and bringing back patronage, a far less exploitative model that is emerging as the foundation of the new music career. We’re using crowdfunding to finance our work. We’re using digital tools to democratize distribution and licensing, with fairer publishing deals. Instead of basing our entire career on one album dropping or flopping huge, we’re ditching the LP in favor of a steady stream of singles, what fans really want. Apps are the new album. Production is going more lo-fi but is becoming more diverse and original in the process. These are the viable solutions I was talking about earlier. It’s all actually quite liberating because none of it involves being exploited by the music industry, and if it does, it’s certainly far less than in the past.

And yes, we’re selling T-shirts. I wouldn’t have to sell ‘em if I had a dollar for every time I heard, “your music is free, so what, you’re going to make a living selling T-shirts?” But the profit margin is good and they’re moving off the merch table like CDs used to. You have to realize that when the physical media that holds the music is no longer a profitable product, there are myriad replacements which tie the music to a physical product that can be profitably sold. The critical thing to realize here: the devaluation of the music recording increases the value of merch for the artist. Our fans are gonna spend $10 at our merch table anyway — should we sell them a T-shirt they will wear everywhere for a 150% markup, or should we sell them a CD they’ll burn and shelve for the statutory rate of 9.1 cents per song?

There's a lot more in Shaw's piece, and all of it is worth reading. Of all the responses to Lowery, Shaw's seems like the most comprehensive one I've seen and makes the point eloquently -- and shows how Lowery's distorted view of the world misses the bigger picture. Lowery is defending the 1%. The small group of musicians who were allowed through the gatekeeper system in the past, against what's actually best for the vast majority of musicians and fans. The new technologies and services that Lowery and his friends blame are actually enabling a great new world for all sorts of musicians who would have had no place in the world beforehand. Lowery's friends can insult those artists, and insinuate that a failure to go through the old system shows they're "untalented," but any real attempt to look around at the content being produced today would show you that's crazy. There's so much wonderful content being produced -- and much of it by artists who are embracing all of the amazing things that the internet allows.

The second post is by Dave Allen -- whom we've written about before. Allen, of course, was a member of one of the seminal post-punk bands, Gang of Four, and has been very involved in both the music and tech worlds for years. He's always fun to talk to, because he always makes me see the world differently than I did at the start of the conversation. So I knew I'd be interested in his take on the whole kerfuffle, and he does not disappoint. At all. Go read the whole thing, entitled: The Internet could care less about your mediocre band. In it, he makes a ton of good points, but it all comes back to two things: (1) the old system was horrible and corrupt and most artists never made much money at all and (2) the new system has tons and tons of opportunity, but not if you aren't very good or if you sit around complaining about people not buying music, rather than figuring out how to embrace all the amazing new opportunities. I know this post is already really long, but here are just a few snippets of Allen's writeup (though, again, read the whole damn thing):

I take issue with it in its entirety because Lowery is attempting to solve the wrong problem. He is attempting in the present to solve a problem of the past – lack of music sales; ergo, damage to musicians income levels or lack thereof since the advent of the Internet. (Oddly he doesn’t mention that the music industry is most likely the only industry to ever, ever, sue its own customers. An inconvenient truth.) He even lays out in fine detail how much Emily would owe if she’d paid for all of her music (most of which came from the labels as “promos”. Once again Lowery doesn’t mention how music writers and radio DJ’s sold those promos to record stores..just saying.) He then asks her to cough up the dough for starving musicians.

He also rather insensitively points out, while undermining his argument, that “the average income of a musician that files taxes is something like 35k a year w/o benefits.” That’s almost $10k more than the current US median wage. There are around 8 million unemployed people here in the USA, many without a place to call home, who would gladly take that income. I find him so condescending that I want to break something right now.

I also find it disgusting that Lowery conjoins the deaths by suicide of Vic Chesnutt and Mark Linkous to this topic. He knows very well that those two brave artists, much braver than he, suffered through circumstances that were extremely personal and difficult to control. Had they been musicians or not, had nothing to do with the incredibly unfortunate outcome of their lives. It only goes to show how shallow and specious his entire argument is if he has to pivot it on their deaths.

He goes on to point out the flawed premise with not just Lowery's rant, but the very basis of Lowery's blog:

In what may, or may not, have been a misstep, Lowery posted his rant to The Trichordist blog whose tag line, Artists For An Ethical Internet, says it all. In using that tag line they show in brilliant light how much they misunderstand what the Internet is. And by doing so they undermine the very validity of their presence on the Internet. They can yell at the Internet into infinity and it will never blink.

The Internet can not be ethical. Only users of the Internet can be said to be ethical, moral, or philosophical; they may be terrorists, kidnappers, racists, deviants; they could also be atheists, religious zealots or spiritualists; they might be gay, straight, bi, married, divorced; employed, destitute…the list goes on. Whoever they may be they are users. The Internet is its own thing. The Internet doesn’t give a damn about musicians or your mediocre band.

And finally there’s this – Lowery writes about “immoral and unethical business models.” And includes this – “..they are “legitimate” companies like Google.” What’s with the quotes around “legitimate” does Lowery think Google is not legitimate? No, he thinks Google is the problem (read Devil..) because Google in his mind owns the “Unethical Internet” because of its advertising prowess. And I quote – “Google is also selling ads in this neighborhood and sharing the revenue with everyone except the people who make the stuff being looted.” Looted! Unbelievable.

He then rambles on about the “cost” of free music downloading – the $1000 laptop, the costly iPhone or Tablet, as if people only use these products to download music! He also falls into the same trap that U2′s manager, the ISP bully Paul McGuinness, falls into – blame the ISP’s for allowing access to the Internet, where as we know, people only go to steal music.. McGuinness is so well informed about the Internet that in the Billboard article I linked to he talks about the Googles! And he also said this about Apple and Google – “They didn’t invent the MP3, they just made the best one.” Erm.., what?

Clearly this a fool’s errand. At least we know who the fools are. They are what the economist Paul Krugman calls “Very Serious People,” for only they know how to fix things.

While my response to Lowery's original post was that there wasn't anything new about it, since the same arguments have been debunked repeatedly in the past, the acceptance by many that Lowery actually knew what he was talking about has made it worthwhile to respond. Lowery's piece has inspired lots of interesting commentary on the difference between looking backwards and moving towards future opportunity -- and that is worth discussing. And I'm glad people like Dave Allen and Zac Shaw decided to do so.

Well this is very disappointing. My own Congressional Representative, has put forth a bill, HR 3140 to expand TSA info sharing capabilities to mass transit. Because that's just what we need. Even worse, in speaking about it, Speier doesn't seem to even recognize that there's a problem with the TSA at airports, and seems to assume that it's just obvious that everything's great with airport security:

"We have put in place through TSA a very elaborate system [in airports]. We all go through those metal detectors and those secondary searches. And we've put a lot of focus on the airlines for good reason. But we have neglected the mass transit components, generally speaking," she said.

Speier said 2 million people fly each day, compared with more than 5 million who ride the subway each day in New York City alone. She pointed out that the most recent terrorist attacks have been on mass transit. Also, when U.S. Special Forces raided Osama Bin Laden's compound last year, intelligence gathered revealed the next attack was intended for mass transit.

"The writing is on the wall. We need to be better prepared than we are right now," Speier said.

I'm all for keeping trains safe from terrorists. I ride on trains all the time -- including a Caltrain that has been named after Jackie Speier (I'm not joking). But any approach that suggests the current TSA efforts are somehow reasonable and should be expanded -- without even offering any evidence that this is true -- is a serious mistake.

So remember how we were just talking about WIPO passing a totally unnecessary new form of monopoly protection for Hollywood movie stars? The negotiations concluded with everyone -- including the US -- already "signing" the agreement, and now countries just need to ratify it. In a rather sickening display of cluelessness, the US Copyright Office put out an announcement about just how awesome it was that they were able to lock down some more culture to make a few Hollywood stars happy and able to block anyone from creating mashups or remixes of their work.

Copyright Office boss, Maria Pallante, who incorrectly believes that copyright is "for the author first and the nation second," was overjoyed at being able to give Hollywood actors more power to lock up content they performed in, over which they have no copyright interest:

“The Beijing Treaty is an important step forward in protecting the performances of television and film actors throughout the world," said Register of Copyrights Maria Pallante.

But, um, why do they need this? No one ever answers that question, because the answer is they don't need this. At all. It's just a way to lock up culture some more. It's sickening.

Not surprisingly, the Copyright Office's announcement plays up the fact that the MPAA was in Beijing to help the US negotiate. And, of course, Chris Dodd is just thrilled at how awesome this treaty is, and how it shows how "substantive" treaties can be created. Yeah, there's no regulatory capture going on here... none at all. And, um, who was there to represent the public's interest? Who was there to make sure that our culture wasn't locked up and that free speech and technology weren't stifled? No one. Pallante then says that:

"There was a renewed atmosphere of cooperation and collaboration among all of the delegations in attendance...."

Well, you know, that's what happens when you only invite your friends, and leave the public and the public interest out in the cold. She might as well have just been more honest and said what the truth is: "For the Hollywood stars first, and screw the nation."

And I thought after the SOPA/PIPA and ACTA debacles, Hollywood and the US government has promised no more backroom deals signed just to support Hollywood...

As the TPP negotiations progress, concern about the almost total lack of transparency (and the USTR's laughable statements to the contrary) is starting to gain significant attention. Most recently, we wrote about Rep. Darrell Issa's request to observe the next round of negotiations, and before that, Senator Ron Wyden's quizzing of Ron Kirk about transparency during a senate hearing. So far, the USTR has managed to brush this off by claiming everybody else in Congress was happy—but, like almost everything the USTR says about TPP, that too is blatantly untrue. Over 130 members of the House of Representatives have now chimed in by signing on to a much longer open letter addressed to USTR Ron Kirk, expressing specific concerns about the TPP process.

The letter strongly asserts Congress' required role in these kinds of negotiations, and then goes on to make several specific requests—while also once again underlining the fact that a few key interest groups are getting special treatment while everyone else is excluded, including Congress.

Under the trade advisory system, representatives from over 600 business interests have such access to both USTR negotiators and the negotiating text. However, American small business, civil society, and other interests who have a direct and long-term interest in the outcome of these negotiations have little meaningful input. In the past, most important U.S. trade agreement texts have not been made available until after they were signed and changes were all but impossible. If Congress and the public are not informed of the exact terms of the agreement until the conclusion of the process, then any opportunity for meaningful input is lost.

Given the laudable priority given to improved government transparency since the first day of the Obama Administration, we are troubled that there may be needless secrecy and over-classification of documents associated with the release of drafts of the pact’s various chapters, or even providing a summary of each of the Administration’s policies that they have proposed to other countries. Press reports and a recent USTR letter indicate that the negotiating parties signed a confidentiality agreement in 2010 imposing heightened secrecy for the process. Accordingly, we ask that you provide us with a copy of the confidentiality agreement and an explanation as to what role USTR or other governments played in crafting it.

Fortunately, there is precedent for greater openness which could bring needed daylight to this process. For example,

• a full draft text of the Free Trade Area of the Americas (FTAA) was released in 2001 during negotiations on that 34-nation pact;
• the World Trade Organization now posts composite negotiating texts on its website, including various texts during the Doha round negotiations; and
• a draft text of the recently-completed Anti-Counterfeiting Trade Agreement (ACTA) was released.

We would urge you to adopt a similar approach in the context of TPP FTA talks, especially now that there are draft texts with bracketed provisions for most chapters of the prospective pact. To the extent that secrecy provisions in the confidentiality agreement preclude the unilateral release of negotiating text, then we would urge you to work with our TPP negotiating partners to obtain their consent to do so and inform us if there are countries that are unwilling to cooperate.

With regard to U.S. proposals, we request that you provide us and the public with summaries of the proposals offered by the U.S. government, so we have a clearer idea of what positions are being advanced on behalf of the U.S. citizenry. Full U.S. proposal texts should be made available not only to Members of Congress, but also to their staffs. To the extent that classification of documents is required, then we would urge you to make them available to all staff with appropriate security clearances.

At this point, it should be clear to Ron Kirk that Congress knows he's trying to quietly negotiate the entirety of TPP behind closed doors, and they aren't happy. Whether or not that will have any impact on the straight-faced claims of "unprecedented transparency" coming from him and his office is less of a sure thing, but it seems like Congress is not prepared to let him get away with that forever.

We've written about the entertainment industry's overly aggressive legal campaign against the owners of SurfTheChannel -- a linking site -- before. Almost exactly three years ago, we wrote about how the private UK anti piracy group, FACT, had helped set up the raid on the offices of Scopelight, a startup creating search technologies. This wasn't a typical police raid: FACT (again, a private organization representing private companies) was allowed to come along for the raid. Scopelight built SurfTheChannel as a search engine that could find video. Some of that video was authorized, some of it was not. However, the two founders, a husband and wife team, Anton Benjamin Vickerman and Kelly-Anne Vickerman, were arrested after this raid and charged with "conspiracy to defraud." Note that they were not charged with copyright infringement. If "conspiracy to defraud" sounds familiar, it's the same vague law that was used against the owner of OiNK (unsuccessfully), against the owner of tv-links.co.uk (also unsuccessfully), and also against the creators of Mulve (don't know what happened to that case). Considering how this has failed in two key cases before, and it didn't look like SurfTheChannel was any different, it seemed unlikely to work here either. And, in fact, there were other serious problems with the case, including the issue that FACT itself (again: private organization) was given the Vickermans' computers.

Unfortunately, however, the court has found Anton guilty of "conspiracy to defraud" for which he faces 10 years in jail. 10 Years. His wife was found not guilty. Of course, FACT and other entertainment industry interests are cheering this on as a huge victory, and promising to use this to stifle all kinds of useful innovation... er, go after any other site they consider to be "pirate" sites, even if those sites have perfectly legitimate and non-infringing uses. The broadness of the law, and the vague and contradictory standards with which it has been applied in the UK should be exceptionally worrying to people -- especially those in the UK. It is no longer safe to try to create a useful service to help people find entertainment content, because you may get raided, private companies may get your computers and you may end up in jail. London has been building itself up as a tech/startup hub of Europe, but with rulings like these, don't be surprised to see entrepreneurs move elsewhere.

Early on, we pointed out that the legal theories behind the shutting down of Megaupload and the arrest of its founders were highly questionable. And since then, we've seen that it wasn't just the legal theories that were problematic, but nearly everything about the case, including a bunch of procedural issues. There's been lost evidence and plans to destroy evidence. There have been procedural errors that knocked out a restraining order for being improperly filed, as well as the failure to properly serve the company, which may lead the case against the company (but not the individuals) to be dropped entirely. On top of that, the US has been acting as this is all pretty straightforward, but have already been surprised to discover that the New Zealand government won't simply rubberstamp the extradition.

The latest update may create an even bigger headache for the US in its crusade against Kim Dotcom and Megaupload. High Court judge Helen Winkelmann has ruled that the search warrants used to seize Kim Dotcom's property... were illegal. Yeah, that's going to present a problem for the US. She also ruled that the FBI broke the law in taking data from Dotcom's computers out of the country. But the illegal warrants are the big deal here:

She said the search warrants were invalid because they were general warrants which lacked specificity about the offence and the scope of the items to be searched for.

Without a valid warrant, police were trespassing and exceeded what they were lawfully authorised to do.

Justice Winkelmann said no one had addressed whether police conduct also amounted to unreasonable search and seizure, but her preliminary view was that it did.

In other words, it's not only entirely possible that the government won't even be able to use anything from what they seized in a case, but they may, themselves, be in trouble for breaking the law and violating Dotcom's privacy rights.

The specific problem? The warrant did not actually state what US laws were supposedly broken -- which is kind of important, especially since this was about a case in the US and a person in New Zealand. If it's not made clear that the warrant is under US laws, then it "would no doubt cause confusion to the subjects of the searches...they would likely read the warrants as authorising a search for evidence of offences as defined by New Zealand law."

So not only do we have a weak case, the whole process in the case has been a complete joke and may mean that the US is unable to use much of the evidence it collected, can't extradite Dotcom and... has little actual basis to move forward with a lawsuit. Honestly, I'm somewhat amazed at the number of mistakes by the feds in such a case. It increasingly feels like they did this because they felt the need to "do something" right after the effort to pass SOPA and PIPA stalled out -- and in their rush to make Hollywood like them again, the feds didn't bother to actually pay much attention to the details. Sometimes it's "creative" to color outside the lines. At other times, it's called cooking up a case on trumped up charges for political reasons.