Download States, Regulation and Information • Relationships between owners

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States, Regulation and Information
Relationships between owners, producers, consumers, seekers, users of information.
What role should government have to intervene?
Protector of rights (negative) or Facilitator/creator (positive).
The ‘public interest’.
Types of Roles
REGULATOR: make rules about content, ownership, use, standards.
CENSOR: inhibit socially undesirable information.
FACILITATOR: incentives and subsidies(e.g. Canadian mags, artists, scholars).
PROVIDER: government information (collection and dissemination), state-owned
communications (StatsCan).
Some Examples
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National interest
• Global competition and harmonization.
National security
• Encryption exports, ‘big brother’ technologies.
Data protection
• Data mining, profiling, rights of data subjects.
Protection of culture
• Split-run magazines, Canadian content
Government and the Internet: What's the Problem?
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Traditional media --> licensing.
Now: split between delivery service and content.
Level playing field for 'bad guys'.
Web is global, laws are national.
What should we / can we do about…
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Child Pornography?
Hate groups?
Online gambling?
The price of freedom and openness?
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Some examples
Patriot Act and Service providers.
Yahoo France and Nazi Auctions (liability of ISP's).
Privacy protection US vs. EU.
Taxation of online commerce, gambling.
Online pharmacies in Canada.
Possible options
(Economist article)
Cross-border laws, treaties, standards.
Self-regulation instead of laws. (Internet Content Rating Association).
Allow networks, technologies to regulate and filter.
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Internet & Authoritarianism
Utopian myth: Internet à freedom and openness.
China, Saudi Arabia: filtered Internet.
Unholy alliance between Western surveillance companies and Chinese governments.
Tool of economic growth and political control.
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Examples of government-controlled Internet
Singapore: ‘intelligent’ island.
China, Saudi Arabia, filtered Internet.
Social consensus.
Authoritarian states and digital commerce.
– Surveillance and marketing.
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Familiar problems of Internet Economy
Not ad-supported. Problem of ‘attention’.
Granularity:
- No longer pay for aggregate packages, only relevant pieces (pay-per-view, timeshifting)
- Info targeted to specialized needs.
– allows smaller businesses to innovate.
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Good consequences.
Friction-free Capitalism. (Bill Gates)
Low transaction costs.
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Better relationship between buyers and sellers.
Informed buyer, relationship-oriented seller.
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Bad consequences
Split between basic and high-end (enhanced) services.
Corporations try to control ‘choke-points’ of the network.
Corporations try to control standards.
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Open Access and Communications regulation
TV: transmission path (pipes) and info service joined.
Dial-up Internet: packet neutrality (enforced by law). Uses of network to remain
open.
Broadband Internet: ‘tagged’ packets, preferential treatment.
Old Economy
Based on employment of capital and labor alone.
Value is produced through:
(1) high consumption of matter and energy: saving labor
(2) capital controlling labor through management and technology
Standardized products (consumers need little info).
Scarcity and Economics
Producing and distributing scarce things.
Efficiency depends on paying attention to marginal costs. (Electricity prices, caps and
subsidies)
Advantage of markets.
Disadvantage of markets. Unpriced costs.
Market ‘ideal’: produce right amount of each thing, satisfy the most preferences
overall.
Information not a normal market commodity
• Info products: Marginal costs approach zero.
• Information goods are non-rival, non-excludable.
• Information often benefits society more when shared.
• Free info exchange produces credibility, reputation or network effects.
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Examples of E-economy
Buying and selling on the Internet – ebay, product reviews, discussion forums
Discount e-brokers, trading stocks on-line
Medical information, information on demand.
Scarcity and Economics
Producing and distributing scarce things.
Efficiency depends on paying attention to marginal costs. (Electricity prices, caps and
subsidies, substitutes)
Advantage of markets:
• produce right amount of each thing, satisfy the most preferences overall.
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Market Failure
Unpriced costs & benefits. Externalities.
Negative externalities: subsidize producers or consumers.
Overproducing cars.
Pollution as classic case.
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Positive Externalities of Information, Knowledge & Research
Examples of PE’s: scientific discovery, neighbour’s tree, on-the-job training.
Why research, worker training is under-supplied in free market.
Solutions: Intellectual property, subsidies, public education.
Information not a normal market commodity
• Info products: Marginal costs approach zero.
• Information goods are non-rival, non-excludable. Public goods.
• Information often benefits society more when shared freely.
• Free info exchange produces credible brands, reputations, network effects.
Interdependency of markets and governments
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Public investment: Defense research helped create Internet.
Forced pooling of basic research results – to speed defense industry innovations.
Myth of free market as foundation of innovation
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Stock market boom.
Venture capitalists.
Business success stories (Apple computers)
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Non-market sources of innovation
Public science and basic research.
Subsidized education: England and Germany examples
Economic and technological advantages of social equality.
Ebay and free info (buyer/seller ratings, etc.)
Final Advice for Papers
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Plagiarism warning.
Citations and Reference lists.
Why didn’t I get the ‘A’ I paid for? (See Senate explanation of grading scale.)
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Evaluating Stickiness
Universal middleman. Amazon, Ebay, Microsoft.
Linked enhancements and services.
Stickiness: making ‘switching’ inconvenient.
Is stickiness good for consumers?
Microsoft’s monopoly
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Natural monopoly.
Stickiness and benefits of uniformity, etc.
Common experience, predictable environment.
Convenience or unfair stifling of competition and innovation?
Network effects: lock-in.
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More users à more value for the next user.
Most products: diminishing marginal returns.
Platform products: increasing marginal returns.
QWERTY keyboard, operating systems.
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First-mover advantage.
Arthur’s view
Prospects of lock-in: drives innovation.
Winner-take-all.
However: Need for more gov’t scrutiny.
Are monopolies all bad? Conflicting values within capitalism.
Means vs. End of capitalism:
• Rewarding winners
• Social progress
Microsoft’s ‘Anti-competitive’ Practices
Exclusionary licensing – “If you want Windows, you must…” (Compaq)
Bundling, integrated products. Browser wars.
Isn’t Internet Explorer free? Are consumers being hurt?
Secretive code.
Critical Perspectives
Corporations shouldn’t decide public values, society’s priorities.
Controlling the Internet means controlling much more.
Monopolies in ‘public interest’ areas require scrutiny.
What if MS tried to buy Google?
Good ‘stickiness’ and bad ‘stickiness’.
Proposed Remedies
Complainants wanted:
Break-up remedy.
Prohibition against bundling.
Regulation of practices (instead only complaints).
Settlement includes:
No compulsory bundling or ‘icons’. No coercion.
Reveal more code, improve compatibility.
Oversight team at MS headquarters.
Jamie Love, director, Consumer Project on Technology
From Salon Magazine:
http://www.salon.com/tech/feature/2001/09/06/breakup_reacts/index.html
“We'd like to see Microsoft be forced to open up Windows and really resolve the
compatibility issues as IBM did after its 1984 case. Right now you'd have to be crazy
to try to write a program for Windows; we'd like that to change.”
Second Point – Not in Proposed Settlement
“Second, we'd like to see compulsory licensing. We'd like to see it mandated that
Microsoft give out compulsory licenses; that forces them to provide
nondiscriminatory terms, so anyone could get Windows for the same price, the same
terms. It would mean that if you're Dell or Compaq, you can moon Bill Gates and still
get the same deal as the next guy. You can feature competitors' products without
worrying that the decision will affect what you pay for Microsoft's software.”
Sociology of Hacker Culture
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Not crackers.
Institutionally autonomous computer experts.
Joy of self-organizing networks.
Blending work, play and independence .
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Open Source / Free software movement (Castells)
Commitment to Unix. Modularity. Hardware-independence.
Openness of early Unix software.
Academic communityà Arpanet à open networksà common standards.
Cross-institutional virtual community.
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Next phase: 1980’s and 1990’s
Unix: Proprietary or non-proprietary?
Stallman and GNU (Free software movement).
Power of open code. Internet and peer production.
Principle of freedom.
Linus Torvalds and Linux.
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Linux development model
Adopted GPL (Stallman) – “copyleft”
Social contract – use, change, inspect, study, keep open.
“Scratching where it itches”
Open exchange and cooperation.
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Bazaar vs. Cathedral
Two Main Philosophies
1. OSS is about freedom.
2. OSS is about best way for technology to improve.
Both approaches: Belief that tech progress depends on a ‘commons’.