September, 2009

The Washington Post's muddled view of net neutrality

The net neutrality debate, already heating up here in Washington since FCC chairman Julius Genachowski’s speech to the Brookings Institution last week, got additional fuel on Monday when the Washington Post weighed in with an oddly snide editorial opposing the chairman’s proposal to regulate the way ISPs manage their networks.

Federal Communications Commission Chairman Julius Genachowski promised that his agency’s plan for regulating Internet service providers (ISPs) will be “fair, transparent, fact-based and data-driven.”

That’s nice. But Mr. Genachowski failed to convincingly answer the most important question of all: Is this intervention necessary?Genachowski-Brookings


He and other proponents of federal involvement cite a handful of cases they say prove that, left to their own devices, ISPs such as Comcast Corp. and AT&T will choke the free flow of information and technology. One example alluded to by the chairman: Comcast’s blocking an application by BitTorrent that would allow peer-to-peer video sharing. Yet that conflict was ultimately resolved by the two companies — without FCC intervention — after Comcast’s alleged bad behavior was exposed by a blogger. Read More »

More to chew on over breakfast

As I noted in my last post, The Media Wonk will be hosting the first Digital Breakfast DC panel discussion on Oct. 1 on the topic of Technology and IP Enforcement, including the role of the White House IP Enforcement Coordinator, a new position created by the PRO-IP Act last year. Today, President Barack Obama named former head of Intellectual Property and Innovation at the Office of the U.S. Trade Representative Victoria Espinel to be the first to fill the new post.

victorial-espinel2The nomination, who must be approved by the Senate, drew praise from both sides of the IP aisle. “Today’s appointment is the welcome culmination of many months of work toward a more streamlined approach to intellectual property enforcement by the federal government,” the Copyright Alliance said in a statement. “This appointment and its locale within the Office of Management and Budget is a strong sign by the Administration that it believes in the importance of creators’ rights and seeing those rights are enforced here and abroad.”

Public Interest group Public Knowledge, which is often at odds with the Copyright Alliance over IP issues, said in a statement, ““We congratulate Victoria Espinel on her nomination to be the Intellectual Property Enforcement Coordinator. She is well qualified for the position, having served as the assistant U.S. Trade Representative for Intellectual Property and Innovation. We look forward to working with her upon confirmation by the Senate. We believe she will be fair in her approach to intellectual property enforcement issues.”

Discussion the appointment at the breakfast will be panelistsRick Cotton, general counsel of NBC Universal, Prof. Peter Jaszi of Washington College of Law at American University, Jon Baumgarten, partner with Proskauer Rose, Bill Rosenblatt of GiantSteps Media and entertainment attorney Chris Castle, who represents music artists and songwriters.

Those interested in attending can register here.

Join me at the first Digital Breakfast DC on Oct. 1

The Media Wonk will be hosting the first Digital Breakfast DC conference on Oct. 1 in, not surprisingly, Washington, DC. The topic for the panel is Using Tech to Safeguard Content and IP. Panelists include Rick Cotton, general counsel of NBC Universal, Prof. Peter Jaszi of Washington College of Law at American University, Jon Baumgarten, partner with Proskauer Rose, Bill Rosenblatt of GiantSteps Media and the irrepressible Chris Castle an entertainment attorney from LA who is appearing on behalf of Arts + Labs.

digital-breakfastDebating points will include the implications of the FCC’s net neutrality rulemaking for filtering and other online anti-piracy efforts, the French three-strikes law, Veoh’s recent court victory and its implications for UGC and the over/under line on when we’ll see the new White House IP Czar named. All packed into a fast-paced one hour. Plus bagels.

Click here to register today!

Could online ad exchanges work for news, too?

Last week, Google launched its long-expected bid to conquer the online display advertising business to complement its domination of the search ad market by unveiling the new, auction-based DoubleClick Ad Exchange, built on the ad-serving company it acquired in 2007 for $3.1 billion and has spent the two years since steering through the regulatory process. The new exchange will function a bit like a stock market, allowing web site publishers to put their display inventory up for auction, and advertisers to bid on placements in near-real time, much as they do with Google AdWords today.

Tokyo-stock-exchangeThe idea isn’t new. Both Yahoo and Microsoft already operate online ad exchanges. But byopening its new display ad exchange to the hundreds of thousands (millions?) of web sites that are already part of its AdSense network for  search ads Google will bring enormous new liquidity to what has been, up to now, a pretty small market. In principle, that should lead to more efficient price discovery for advertisers and higher inventory yields for publishers.

Even so, the DoubleClick Ad Exchange has a long way to go before it can dominate the online display ad business. Most online display ads are sold either directly by publishers or through proprietary ad networks–the largest of which is run by Yahoo–which syndicate ads to web sites on behalf of marketers. Only a small percentage of online display ads are currently sold through exchanges. Read More »

Blockbuster: Closed for renovation

It’s long been clear that there were too many video stores in America for anyone’s good. In the go-go years of the early 1990s, national chains like Blockbuster, Hollywood Video and Movie Gallery were adding stores at a clip of nearly one a day, each. Regional chains and independent operators expanded as well, until there were something like 10-15,000 video superstores in the country and probably twice that number of stores overall.

The numbers back then were compelling. Video stores were considered good tenants by strip-mall devlopers, stores ramped up quickly and threw off enough cash that much of the expansion could be financed internally. In addition to absolute growth in the market, the national chains could easily take share from incumbents when they entered a market, by virtue of their broader and deeper selection of titles, preferable locations and greater marketing clout. Read More »

Is MKV the MP3 of video?

The release of the Napster client in 1999 is seen by most in the music industry as a watershed event. It was the moment when millions of people began “trading” individual music tracks over the Internet and–in the received version of the story–stopped buying CDs. The industry’s response was, first, panic, then to attempt to get the genie back in the bottle by suing Napster and its creators Shawn Fanning and Sean Parker. That led to similar suits against Friendster, Aimster, Grokster,  and any other peer-to-peer network “operator” the RIAA could identify clearly enough to serve with papers.  

napster-logoWhat had really hit the music industry, however, wasn’t P2P technology so much as the MP3 codec. The first MP3 encoder was released in 1994, and by 1995 it was being used in commercial consumer software such as WinPlay, and later WinAmp. Using MP3 compression, WinPlay users could store tracks ripped from a CD on a hard drive in files that were a fraction of their original size (a critical issue at the time given the small size of most consumer hard drives), albeit with some loss of sound quality. All Fanning had really done was to figure out a practical way to tie those hard drives together into ad hoc networks so that compressed music files could be exchanged at the relatively slow bandwidth speeds then generally available. Read More »

E-book madness

For a market that amounted to only $113 million last year, e-books sure are attracting a lot of interest these days. Case in point: the DVD Forum Steering Committee, which administers the technical spec for the video disc format, recently considered a proposal to create a new specification for e-books based on the DVD format. The idea, I guess, was to use DVDs to store and distribute e-books, which seems a rather inelegant solution for a business already dominated by purely electronic delivery of content via high-speed wireless networks.

Apparently, some members of DVD Forum thought so, too, because the Steering Committee ultimately rejected the proposal, according to the minutes from its last meeting.

asus-ereaderStill, barely a week goes by, it seems, without word of a new e-book reader, either announced or rumored. This week’s haul includes reports of a double-truck reader from Asus, and the leak of an internal Time Inc. document indicating the publisher is at least considering introducing its own electronic reader, reversing its earlier position that it would stick to publishing content.

The proposed settlement in the Google Book Search case, meanwhile, has engaged the attention of technology giants like Microsoft and Yahoo, all three branches of the U.S. government, two foreign governments and the administrative arm of the European Union.

Pretty impressive for a business based on an immature technology, uncertain economics and unproven consumer demand.

Authors Guild doesn't like the sunrise, blames the rooster

The Authors Guild is not impressed with Amazon’s opposition to the Google Books settlement.

In a 49-page brief (pdf) filed with Judge Denny Chin on Tuesday, the Kindle-maker warned of the potentially anti-competitive effects both of the blanket license in the agreement for Google to scan and sell orphan works and of the price-fixing power of the proposed Book Rights Registry, which Amazon described as a “cartel of authors and publishers” operating with “virtually no restrictions on its actions.”

The Authors Guild fired back the next day in a statement on the group’s web site:

Amazon’s hypocrisy is breathtaking.  It dominates online bookselling and the fledgling e-book industry.  At this moment it’s trying to cement its control of the e-book industry by routinely selling e-books at a loss.  It won’t do that forever, of course.  Eventually, when enough readers are locked in to its Kindle, everyone in the industry expects Amazon to squeeze publishers and authors.  The results could be devastating for the economics of authorship.  

Amazon apparently fears that Google could upend its plans.  Amazon needn’t worry, really:  this agreement is about out-of-print books.  Its lock on the online distribution of in-print books, unfortunately, seems secure.

Well now.

While authors and publishers have ample reason to be wary of Amazon’s market power, as I’ve argued in previous posts, the Guild is drawing an apples and bananas comparison in this case. It’s not as if Amazon came by its market power through nefarious, or even non-transparent means. Read More »

Orphans in the storm

Pity Judge Denny Chin, the federal district court jurist in New York presiding over the Google Book Search case (The Authors Guild, et. al. v. Google, Inc.). Having steered the long, complex class action to within sight of the finish line he suddenly finds himself the object of an intense last-minute lobbying campaign from interests that were not party to the case and at the center of budding international incident.

google-books-imagen1In my previous post, I discussed the commercial interests that began lining up last week in support or opposition to the proposed settlement between Google and the class-action plaintiffs, including Amazon, Microsoft, Yahoo and Sony. Now, foreign nations, and perhaps whole continents, are throwing down markers.

On Tuesday, lawyers for the government of Germany filed a strongly worded brief (pdf) with the court declaring that the settlement, if approved, would “run afoul of the applicable German nationallaws,” “irrevocably alter the landscape of internationalal copyright law” and potentially violate U.S. treaty obligations.

Some European Union officials, meanwhile, have come out in favor of the settlement’s terms (if not its legal implications) and have suggested importing it to Europe. A meeting on the issue is scheduled for Sept. 14 in Brussels.

How did it come to this? Read More »