View my page on Bureaucrash Social

Bureaucrash, the activist arm of CEI, has started a new social network called, you guess it, Bureaucrash Social.  After only 30 hours we have nearly 250 members, which isn’t a bad start.  Facebook wasn’t built in a day and what some members are already calling “Libertarian Facebook” will continue to grow over the coming weeks.  I hope anyone who is interested in limited government and individual freedom joins today.

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Lately the good folks at Bureaucrash have really been giving us a lot of cool tech related podcasts. Last week they brought us an interview with Cory Doctorow. This week a guide to online privacy. Topics include:

• Email Encryption
• The Onion Router (TOR)
• KeePassX
• TrueCrypt
• Pidgin & OTR Plugin for Pidgin
• Adium
• Incognito

Listen to it at Bureaucrash.com.

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Britannica Concise Encyclopedia: def. monopoly

Exclusive possession of a market by a supplier of a product or service for which there is no substitute. In the absence of competition, the supplier usually restricts output and increases price in order to maximize profits.

How does this possibly apply to Google?  Google hasn’t decreased output, prices have not skyrocketed, and clearly there are plenty of substitutes.  Yet groups like the Association of National Advertisers are attacking Google, claiming Google has a monopoly because it “controls” 90% of search.

Okay. Google gets the lion’s share of search engine traffic. But controlling search doesn’t amount to controlling online advertising, not by a long shot.

We haven’t seen prices go up because the time people spend on search engines every day is minimal, amounting to only a handful of minutes. Google has successfully turned these few minutes a day into a machine that generates billions of dollars a year.  Yet despite its powerful position in the search market, competition from outside of search is forcing Google to keep its rates low.

Think of where the majority of our time online is spent.  Viewing content, not getting to it.  Facebook and MySpace hold their users attention for hours in some cases, offering advertisers great venues to reach key consumer demographics.  Popular news and entertainment sites bypass Google’s advertising auction system altogether by selling ads directly to advertisers.

But the biggest competitive threat to Google comes from the growing online video industry.

Americans spend several hours a day watching television, compare this to mere minutes of online searches. During an hour of watching television consumer typically view 18 minutes of advertising. That’s one of the reasons why half of all advertising dollars are spent on TV ads. It’s simply the biggest thing going.

As more video moves online, we’ll see the bulk of online advertising dollars move toward that content. Google has brought us the online equivalent of a newspaper ad, soon others will bring the 30-second spot to our computer screens.

Google is very vulnerable in this space. YouTube generates little for the company and its advertising model is unproven. Video veterans like the television networks have shown themselves to be much more adept in this space. Look no farther than Hulu. With the backing of giant companies like NBC/GE/Universal, this video viewing site has the potential to scoop up future billions in ad revenue.

We should think of Google as the leader in the first wave of bringing old media online—the text-based round. Other waves will follow and at the same time things that never existed offline, like social networking sites or oddities like Twitter, will also develop. More and more areas over which Google has little influence and in which they make no money.

But the ANA is the best opponent of its own cause. The ANA’s own efforts to trash Google is an admission that Google competes outside of online search as the ANA is made up of many old media media regimes that are seeing business taken away from them by Google. So, if Google competes in much larger market in search, then that 90% number is meaningless.

But can you blame the ANA? They’re just taking a page out of a very old Washington playbook. When you can’t beat them, sue them under antitrust law. When you do so, define a market by ridiculously narrow parameters.

Suggestion: NBC should sue CBS for its TOTAL MONOPOLY of “Two and a Half Men” and for controlling nearly 95% of Charlie Sheen’s career. See, anyone can define a market so narrowly it’s just plain silly.

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None other than Sci-Fi author, civil libertarian, blogger, activist, and TLF commenter Cory Doctorow drops in at the Bureaucrash Podcrash (that’s a podcast for “crashers”) to discuss his new book Little Brother.

Austin Grossman’s review of the book for the New York Times remarks:

An entertaining thriller and a thoughtful polemic on Internet-era civil rights, “Little Brother” is also a practical handbook of digital self-defense. Marcus’s guided tour through RFID cloners, cryptography and Bayesian math is one of the book’s principal delights. He spreads his message through a secure network engineered out of Xbox gaming consoles, to a tech-savvy youth underground (we are now post-nerd, I learned — hipsters and social networking experts have replaced the unwashed coders of yore).

We at TLF may disagree with Mr. Doctorow on a number of policy issues, but I must admit that he’s a talented writer. I bought Cory’s Overclocked: Stories of the Future Present, a collection of short stories, at Capital Books here in DC and read it cover to cover by the end of that weekend. A great read available free in digital form at Cory’s Craphound.

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“Buzz Out Loud,” one of my favorite podcasts, disappoints me from time to time, specifically when the good folks at CNET decide to bash broadband companies and call them “jerks” and “evil.”

So goes Episode 809 of Buzz Out Loud.  Molly Wood, Jason Howell, and guest host Don Reisinger declare AT&T’s decision to throttle U-Verse (as reported by Ars-Technica) to be just another dumb thing that stupid broadband companies do.

One of their reasons for saying so is that AT&T’s U-Verse is fiber, but that’s not true.  U-Verse uses fiber to feed VRADs, or Video Ready Access Devices, that take that fiber and feed its signal out over legacy copper wires, in a sort of DSL adapted-to-video hybrid.

When you get the facts wrong, your analysis is bound to be bad.

The BOL crews is right to say that at current demand for content it wouldn’t make sense to throttle fiber to the home.  It’s unlikely that networks composed entirely of fiber (as opposed to AT&T’s hybrid model) would have to be managed extensively or even at all given current content consumption levels.  But in the future, with demand growing, there may even be a need for management of fiber connections that go all the way down that last mile.

Hopefully by then someone has developed a technology that makes fiber look like phone lines.

Fiber isn’t the “be all, end all” as the folks at Buzz Out Loud describe, it’s just the best thing going right now.  AT&T doesn’t have the best pipes, so it’s managing the ones it has the best it can.  Calling them jerks or evil for doing so doesn’t help them be a better broadband company, it just gives ammunition to  regulators who can only slow down the progress of broadband development.

AT&T should be encouraged to compete with Verizon and Comcast, traffic management may be its best means of doing so.

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Yes, this is my second question mark-festooned post of the day, but it’s another title that calls for being phrased as a question, because it’s so unbelievable that anyone said it.

Turns out, a McCain adviser, Douglas Holtz-Eakin, was struggling to prove that McCain has what it takes to tackle our economic woes.  And here I thought it was the communists, not American war heroes, who believe in managing the economy.  Anyway, Holtz-Eakin reached for anything to prove McCain’s credentials and pointed to the Senator’s service on the Commerce Committee.

This line from a story at CNN.com provides the real kicker:

Pressed to provide an example of what McCain had accomplished on that committee, Holtz-Eakin said the senator did not have jurisdiction over financial markets, then he held up his Blackberry, telling reporters: “He did this.”

That’s right everyone, Al Gore may have created the Internet, but John McCain created the Blackberry.

The absurdity seemed to have no end as Holtz-Eakin seemed to convey that the Commerce Committee was responsible for all innovation.  The CNN story goes on:

“Telecommunications of the United States, the premiere innovation in the past 15 years, comes right through the Commerce Committee. So you’re looking at the miracle that John McCain helped create,” Holtz-Eakin said. “And that’s what he did. He both regulated and deregulated the industry.”

Sounds like McCain has got some real free-marketeers working for him!

Remember to thank your local government official for all the great gadgets and gizmos you use, because they wouldn’t be around without the help of government.  Right?

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The Washington Post reports today on a trend that I thought we all knew about, but one I’m glad the mainstream media is finally realizing.  It turns out that people who play video games are not just virginal teenage boys with acne problems.  No, even 20-something, attractive women play video games.

The Post’s Mike Musgrove reports on the mother and daughters of the Burguieres family of Bethesda, Maryland.  Of course in good journalist fashion Musgrove uses the Burguiereses to illustrate a larger point, he even points to the relevant stats:

It used to be that this all-woman crew wouldn’t fit the standard image of the video game consumer. But the perception of gamers as being mostly young guys isn’t so true anymore. Women and girls make up 40 percent of the gamer population, according to the Entertainment Software Association.

The most interesting point brought up in the article on this demographic trend—one that most gamers realize has been happening for quite some time—is Musgrove’s observation that women once were not naturally accepted members of the gaming community.  It’s a great point, but one that can be extended to tech community in general.

It’s not only cool for girls to play games on the Wii, more and more women and becoming full-fledged uber nerds.  Morgan Webb, Veronica Belmont, and Molly Wood have become big voices in the tech community—they’re serious commentators and understand the industry as well as their male counterparts.  Hopefully they’re inspiring more girls to get geeky.

As much as free market or libertarian types sometimes believe that culture is an irrelevant backdrop, it’s not.  Cultural norms matter.  Popularizing and making tech appealing amongst women is crucial.  If some of our best minds were deterred from tech in the past because Bill and the Steves were its most visible avatars, that hurts all of us.  What’s accepted socially can sometimes create a barrier to entry that’s as significant as what’s allowed legally.

Video games specifically have benefited tremendously by their more diverse audience.  Games aren’t just tailored to the desires of teenage boys, but are targeted at an older, more sophisticated audience.  Contemporary games show the value the market places on character development and storyline, along with the usually shoot ‘em up and gore.

Politicians were once able to demonize video-games as the opiates of the teen and twenty-something male masses.  These violence-soaked diversions were deviant behavior producing machines.  This misconception, thankfully, is no longer tolerated in Washington.  The gaming demographic not only includes more ladies, it includes more fogies.  As the Pong generation ages, we see more middle aged folks playing games—Adam can attest to this.  This helps safeguard video games from would-be First Amendment violators like Hillary Clinton, Sam Brownback, Fred Upton, Jack Thompson, and the many others who would uproot the ESRB system that works so well.

As much as Mosgrove may be late in catching this trend, it’s an important one to point out.  Everyone needs to feel accepted in the tech community.  A larger talent pool is never a bad thing, not to mention the bigger voting block.

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To follow-up on my post from this morning I should note that Google Chrome immediately asks you  which search engine you’d like to use upon installing, conveniently providing users with a chance to use something other than their default search engine and dodging potential complaints about the browser from Microsoft.

Speaking of Redmond, Ballmer and Co. may need to fear Chrome not as a browser, but as a new computing platform.  Michael Arrington writes on this at TechCrunch in a post which gets right to the heart of the matter.  Check out “Meet Chrome, Google’s Windows Killer” in which Arrington shows us how Chrome combined with Gears makes for a platform that can allows OS to fade into the background.

I for one am skeptical that we’re anywhere near cloud computing being practical for anything other than the lightest of tasks.  Google Docs simply doesn’t compare to Office, but I don’t think it’s trying to as many will claim.  I use the service, along with several other “cloud” computing programs, but I use them in addition to my local apps, not as a substitute for them.  See John C. Dvorak for more reasons why cloud applications stink.

The funny thing about all of this is that Microsoft might be losing its “monopoly” power in the OS market not from a competing OS like Apple’s OSX or even from some Linux-based windows clone, but instead from layering over the OS with something that takes advantages of the decentralized nature of the web.  Folks at the Department of Justice and the FTC should pause before they decide to fine and restrict a company like Microsoft because an innovation like Chrome—if it is what people like Arrington say it is—are simply inevitable and companies that become the majority platform, like Microsoft, eventually can’t keep up.

This shows that legal definitions of “markets” rarely make any sense. The OS market may be turned on its ear by a company that started out in search. This proves that competition doesn’t always come from head-on, but from odd angles as technologies converge and diverge.

That’s why competition is like a Velociraptor. If I may quote Dr. Alan Grant from Jurassic Park (the movie version):

But no, not Velociraptor. You stare at him, and he just stares right back. And that’s when the attack comes. Not from the front, but from the side, from the other two ‘raptors you didn’t even know were there.

Microsoft isn’t going to be attacked by Apple or Linux, but from the OS-killer it didn’t even know was there.

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Google is entering the browser wars today (if any such war still exists) with the launch of Chrome, its new web browser.  I’m glad to see more competition in browsers as I think—and I hope everyone else agrees with me—that Firefox is the only real game in town. I know that Internet Explorer is more popular, but that seems to only be because it is shipping with every Windows PC and because many enterprise web applications require IE’s non-standard browser. Firefox is preferred browser for anyone who works with the web regularly and has bothered to compare browsers.

One implication of this foray by Mountain View into the browser arena is that—should Chrome be at all successful—they will soon be accused of using their supposed search monopoly to squeeze out competition from IE and Firefox. That is assuming that anything in Chrome favors Google’s search, like making it the default search engine for the browser, which I’m sure it will be.

It’s funny to think that Microsoft, the poster-child from antitrust suits, could be the one launching such a suit. Just a few short years ago we saw Microsoft scoffing at the very notion of antitrust or monopoly power, arguing that it in no way used its market share to its own advantage. Now we see Redmond lashing out against Google as a monopolist. At a recent conference I had the unpleasant experience of watching a panel on online advertising devolve into a fight between the Microsoft and Google reps over whether Google was a search and advertising monopolist.

To be fair, Google has sued Microsoft over things as petty as Vista’s built-in MSN/Windows Live search.  They may soon regret this suit over built-in search as Microsoft could run a find/replace on that lawsuit and turn it into the “Chrome case.”

Both companies should put a leash on their legal teams and look at the implications of these lawsuits on the overall landscape of public policy. By constantly using antitrust against one another, both companies legitimize the underlying notions of antitrust, namely that a company can truly choke out competition by virtue of having a large market share.

But this isn’t true. Apple has made serious gains against Microsoft in the last two years, growing to roughly 10% market share.

Similarly, Google remains very vulnerable to technological change. Anyone who figures out a decent way to search the growing amount of audio and video content on the web will be on their way to blowing Google out of the water. Sure, it will take A LOT of money to catch-up to Google because of its tremendous infrastructure, but the right technology will find money, whether it be from venture funds or from a buy-out by Microsoft, Yahoo, or even relatively new players in online advertising like Newscorp.

We’ve seen with both companies use of antitrust for what it really is, and what antitrust always is, a way for companies to beat up on each other without actually competing in the marketplace. Instead of working on actually developing a superior or equal search program, sue Google. Instead of marketing your desktop search effectively so more people adopt it, sue Microsoft.

But again, both companies need to reconsider what they’re doing. Every time they endorse antitrust as a legitimate public policy tool, they lend credibility to the efforts of their competitors to sue them for antitrust violations. Instead, both companies ought to be touting the virtues of competition and explaining why their supposed monopolies are vulnerable to market competition just like any other business. It’s to their advantage, it’s better for the marketplace, and it’s the truth.

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Declan McCullagh has a great write-up on presumptive Democratic VP nominee Joe Biden over at CNET.  Some highlights:

• Biden was one of only four Senators invited to a champagne reception with Jack Valenti for his work on the DMCA
• Surveillance legislation by Biden inspired Phil Zimmermann to write PGP (Pretty Good Privacy), an encryption program
• Biden wrote an early precursor to the USA PATRIOT Act
• Posting the anarchist cookbook online is now a felony thanks to Biden, resulting in a single conviction of a 20 year-old webmaster
• Biden proposed spending $1 billion so cops could police P2P networks

Check out the post to read more about Biden’s spotty record on tech policy.

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