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This Week In Techdirt History: August 13th - 19th (Techdirt)

by Leigh Beadon

from the so-it-went dept on Saturday, August 19th, 2017 @ 12:00PM

Five Years Ago

This week in 2012, while Amazon was realizing it had little choice but to get in on the patent portfolio buying game, Google was launching a prior art finder to help stop bad patents — though some worried it might be used by trolls to find targets. Meanwhile, Google also made the controversial decision to start filtering searches based on DMCA notices received by the site, but of course even this wasn't enough to satisfy the RIAA and MPAA.

Also this week in 2012, we launched the Techdirt Insider Shop!

Ten Years Ago

This week in 2007, the proliferation of DVRs and digital video made us ask if the concept of a "TV channel" still made any sense. Of course, the digital video side was still struggling, with all the official offerings pretty much sucking in the eyes of consumers, and with Google Video shutting down and eliminating videos people thought they had bought, and the P2P networks continuing to strive to go legit under the weight of lawsuits,and Universal Music thinking it can still release CDs in different countries at different times (okay that last one is music not video, but still). Given how amazingly well the copyright regime was going for the entertainment industries, is it any wonder the Senate was looking to impose the same thing on the fashion industry?

Fifteen Years Ago

This week in 2002, we saw one reporter fired for having a blog and another fired after a congressman got mad about an email. Not great.

And now, a brief world tour: South Korea was facing the same tensions over music sharing as the US; Europe was implementing its own version of the DMCA; Indian telecoms were trying to get instant messaging banned; Norway was struggling to find a judge who was tech-savvy enough to try the creator of DeCSS software; and in a story that is rather appropriate given current events, Russia charged an FBI agent with hacking.

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Welcome To The Technological Incarceration Project, Where Prison Walls Are Replaced By Sensors, Algorithms, And AI ((Mis)Uses of Technology)

by Glyn Moody

from the shocking-new-approach dept on Friday, August 18th, 2017 @ 7:39PM

At heart, a prison is a place where freedom is taken away, and inmates are constrained in what they can do. Does that mean a prison has to consist of a special building with bars and prison guards? How about turning the home of a convicted criminal into a kind of virtual prison, where they are limited in their actions? That's what Dan Hunter, dean of Swinburne University's Law School in Melbourne, suggests, reported here by Australian Broadcast News:

Called the Technological Incarceration Project, the idea is to make not so much an internet of things as an internet of incarceration.

Professor Hunter's team is researching an advanced form of home detention, using artificial intelligence, machine-learning algorithms and lightweight electronic sensors to monitor convicted offenders on a 24-hour basis.

The idea is to go beyond today's electronic tagging systems, which provide a relatively crude and sometimes circumventable form of surveillance, to one that is pervasive, intelligent -- and shockingly painful:

Under his team's proposal, offenders would be fitted with an electronic bracelet or anklet capable of delivering an incapacitating shock if an algorithm detects that a new crime or violation is about to be committed.

That assessment would be made by a combination of biometric factors, such as voice recognition and facial analysis.

Leaving aside the obvious and important issue of how reliable the algorithms would be in judging when a violation was about to take place, there are a couple of other aspects of this approach worth noting. One is that it shifts the costs of incarceration from the state to the offender, who ends up paying for his or her upkeep in the virtual prison. That would obviously appeal to those who are concerned about the mounting cost to taxpayers of running expensive prisons. The virtual prison would also allow offenders to remain with their family, and thus offers the hope that they might be re-integrated into society more easily than when isolated in an unnatural prison setting. Irrespective of any possible financial benefits, that has to be a good reason to explore the option further.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

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The Dangerous Rise Of Unproductive Entrepreneurship (Business Models)

by Mike Masnick

from the this-is-bad-news dept on Friday, August 18th, 2017 @ 3:42PM

For many years now, we've talked about Andy Kessler's concept of political entrepreneurs vs. market entrepreneurs. In Kessler's telling, market entrepreneurs are the kind of entrepreneurs that people usually think about -- the ones creating startups and high growth companies and the like. While not everyone appreciates it, those entrepreneurs tend to provide a lot more to the world than they take away. They may get filthy rich in the process, but they tend to make the world a better place by creating lots of value. The "political entrepreneurs," on the other hand, are those who basically look to abuse the system to create monopoly rents and to limit competition. Those entrepreneurs may also get filthy rich, but they tend to do it by limiting value and locking it up so that only they can get it. Obviously, one of those is a lot better for society than the other.

Of course, this idea certainly didn't originate with Kessler, either. Just recently, we had James Allworth on our podcast where we talked about this issue in response to an excellent article he'd recently written about how prioritizing profit over democracy was actually damaging American entrepreneurship. In that article, he referred back to the work of William Baumol, who wrote a paper back in 1990, entitled: Entrepreneurship: Productive, Unproductive, and Destructive. As you can see, that one divides entrepreneurship into three categories. Productive loosely maps to "market entrepreneurs" in Kessler's world, while "Unproductive" loosely translates to "political entrepreneurs" as well. Baumol also includes destructive entrepreneurs, who are actively making the world worse -- and getting rich off of people's misery (think drug dealers, and such).

But part of the point of Allworth's article is that it feels like too many people are just focusing on "profit" as the end goal, and thus either unwilling or unconcerned with determining if the entrepreneurship that drives the profit is "productive" or "unproductive." And, now the Economist has weighed in on this issue as well, noting that we're seeing more and more unproductive entrepreneurship in America, and that's a problem. The article focuses on the work of two economists, Robert Litan and Ian Hathaway, who are building on Baumol's concepts and are concerned about where things are heading. One interesting thing: they find that the issue can't be neatly put into the category of "too much regulation" or "too little regulation," but rather find that both of those situations can create the same rise in unproductive entrepreneurship:

What explains this shift? One factor appears to be the success of various professional groups in convincing the government to tailor regulation to their needs, for instance by lobbying for occupational licensing. Jason Furman, then the chair of the Council of Economic Advisors, observed in 2015 that the share of the American workforce covered by state licensing laws grew from less than 5% in the 1950s to 25% by 2008, arguing that this deterred new competition.

The proliferation of occupational licensing might be seen as harmful overregulation. Other sectors are plagued by the opposite. Jeffrey Zhang, an economist at the Federal Reserve, argues that banking deregulation in the 1990s led to rapid bank concentration alongside “sub-optimally higher levels of risk-taking”. As a result, the salaries of senior bank employees grew rapidly. Zhang concludes that the rent-seeking enabled by financial deregulation played a sizeable role in the growth of income inequality: bankers were able to skew the system in their favour, to the detriment of everybody else.

Indeed, we see this in areas that we cover as well. Certainly it seems like letting the big cable and telco companies run free for a decade decreased competition, lowered the quality of service (massively) and allowed those companies to create massive monopoly rents for themselves. But in many other industries, we've pointed out the problems with excessive occupational licensing. I know not everyone agrees, but we think the rise of car hailing services and home sharing like Airbnb has been quite revolutionary (even if companies like Uber may have been run by some awful people). Similarly, we've discussed repeatedly how excess regulations in the drone space have really held back what could be a huge area of innovation.

The Economist article suggests that the ability of industries to steer regulations in a way they want is a big part of the issue:

The success of such lobbying depends on the government’s susceptibility. This does not appear to be in short supply in America. James E. Bessen, an economist at Boston University,links high profits through regulatory advantages to political factors including lobbying and campaign spending. The work of other economists reinforces his observation. Jeffrey R. Brown and Jiekun Huang, two researchers writing for the National Bureau of Economic Research, use data> from White House visitor logs during the Obama administration to show that corporate executives’ meetings with White House staff were associated with a bump in their company stock price, more government contracts and positive regulatory decisions. Firms that had better access to the Obama White House also experienced a large drop in stock prices when the 2016 election result was announced.

In the tech world, this is unfortunate. It used to be that tech companies didn't need to have a presence in DC, because they could just innovate, rather than having to deal constantly with policy pressure. But, nowadays that's increasingly difficult -- and not necessarily because everyone else is lobbying -- but rather because the political landscape has become something of a shakedown game. As we've discussed in the past, while many outside of DC view lobbyists as making all of this happen, those involved suggest the roles are reversed here. Politicians -- desperate to raise campaign cash -- are often the ones reaching out to companies and basically threatening them with certain regulations if they don't decide to step up and donate.

So what's the end result here? That's... not clear. Unfortunately, it appears that crony capitalism is on the rise, and with it, more and more unproductive entrepreneurship. The real problem, as James and I discussed in our podcast, is that this is unsustainable, and most likely will mean growing productive entrepreneurship happening elsewhere (and we're already seeing some evidence of that today). There certainly doesn't seem to be any real concerted effort to move away from unproductive entrepreneurship in the US -- but perhaps by making more people aware of it, people will start to recognize how big a problem it truly is.

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Contractor Exposes Personal Information Of 1.8 Million Chicago Voters On AWS (Privacy)

by Timothy Geigner

from the oops dept on Friday, August 18th, 2017 @ 1:39PM

At some point, it seems clear that if Chris Vickery comes a-callin', you've screwed up when it comes to keeping the private information of customers/voters secure. Vickery works for Upguard, a cyber-security consulting firm that regularly seeks out insecure sites and works with their owners to secure them. Vickery's fingerprints have been on discoveries such as Verizon's exposure of the personal information of 6 million of its customers and a firm contracted by the GOP exposing the personal data of roughly every American voter everywhere.

And now Vickery and Upguard have found that a contractor managing the city of Chicago's voter rolls appears to have exposed more personal information on an AWS server.

The acknowledgment came days after a data security researcher alerted officials to the existence of the unsecured files. The researcher found the files while conducting a search of items uploaded to Amazon Web Services, a cloud system that allows users to rent storage space and share files with certain people or the general public. The files had been uploaded by Election Systems & Software, a contractor that helps maintain Chicago's electronic poll books.

Election Systems said in a statement that the files "did not include any ballot information or vote totals and were not in any way connected to Chicago's voting or tabulation systems." The company said it had "promptly secured" the files on Saturday evening and had launched "a full investigation, with the assistance of a third-party firm, to perform thorough forensic analyses of the AWS server."

So, a couple of things to note here. First, while it's true no voting information was exposed, a good deal of personal information certainly was. Names, addresses, last four digits of social security numbers; you know, all of the things one would need to wreak havoc on a person using their identifying information. Second, it appears that "promptly securing" the files mostly had to do with actually having a password needed to access them. There was no hacking required for Vickery to get to these files, because there was no password protecting them. Great.

Now, where I will give ES&S credit is that they are working with Upguard, rather than trying to vilify it, as we've seen done to so many other security researchers. That's a good thing. Still, Chicago officials are pretty pissed off.

"We were deeply troubled to learn of this incident, and very relieved to have it contained quickly," Chicago Election Board Chairwoman Marisel A. Hernandez said in a statement. "We have been in steady contact with ES&S to order and review the steps that must be taken, including the investigation of ES&S' AWS server. We will continue reviewing our contract, policies and practices with ES&S. We are taking steps to make certain this can never happen again."

Allen added that the board is considering how to notify and potentially offer remedies to those whose information was exposed.

"The expense for that is going to be borne by ES&S," Allen said. "This was a violation of the contract terms that explicitly lay out the requirement to safeguard the voters' data."

It's a wonder to this writer that the constant calls for things like e-voting machines continue when those in charge of securing voter data can't even do that right.

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Because Of Course There Are Copyright Implications With Confederacy Monuments (Copyright)

by Cathy Gellis

from the copyright-makes-a-mess-of-everything-dept dept on Friday, August 18th, 2017 @ 11:55AM

There's no issue of public interest that copyright law cannot make worse. So let me ruin your day by pointing out there's a copyright angle to the monument controversy: the Visual Artists Rights Act (VARA), a 1990 addition to the copyright statute that allows certain artists to control what happens to their art long after they've created it and no longer own it. Techdirt has written about it a few times, and it was thrust into the spotlight this year during the controversy over the Fearless Girl statue.

Now, VARA may not be specifically applicable to the current controversy. For instance, it's possible that at least some of the Confederacy monuments in question are too old to be subject to VARA's reach, or, if not, that all the i's were dotted on the paperwork necessary to avoid it. (It’s also possible that neither is the case — VARA may still apply, and artists behind some of the monuments might try to block their removal.) But it would be naïve to believe that we'll never ever have monument controversies again. The one thing VARA gets right is an acknowledgement of the power of public art to be reflective and provocative. But how things are reflective and provocative to a society can change over time as the society evolves. As we see now, figuring out how to handle these changes can be difficult, but at least people in the community can make the choice, hard though it may sometimes be, about what art they want in their midst. VARA, however, takes away that discretion by giving it to someone else who can trump it (so to speak).

Of course, as with any law, the details matter: what art was it, whose art was it, where was it, who paid for it, when was it created, who created it, and is whoever created it dead yet… all these questions matter in any situation dealing with the removal of a public art installation because they affect whether and how VARA actually applies. But to some extent the details don't matter. While in some respects VARA is currently relatively limited, we know from experience that limited monopolies in the copyright space rarely stay so limited. What matters is that we created a law that is expressly designed in its effect to undermine the ability of a community with art in its midst to decide whether it wants to continue to have that art in its midst, and thought that was a good idea. Given the power of art to be a vehicle of expression, even political expression or outright propaganda, allowing any law to etch that expression in stone (as it were) is something we should really rethink.

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