Kate Sullivan: Someday, we’ll smarten up, change some laws, and put you out of business.
Lawrence Garfield: You can change all the laws you want. You can’t stop the game. I’ll still be here. I adapt.
are not coupled with each other. Many competing companies are providing products or services for each of the components.
This open model resulted in huge innovation over the last two decades, and spawned a lot of competition in creating the websites, media formats, software and the devices, driving the price down and quality up. All this possibly at the expense of the content providers who have huge problems protecting their content, because, to be universally playable, all parts of the system need to be well documented and interoperable, with any kind of security and copy protection clumsily pasted on top of it all.
Apple Closing the Web?
Kindle, Nook and much of the Apple Store stuff signal a possible end of this model. But with music and videos is it a lot like putting the ghost back into the bottle. Any device can play an .mp3 and any website can sell it. Not to mention the P2P networks.
The last major media area where the digital has not taken over the material are newspapers and magazines. So if one could make a closely linked system between a website, a device, its software and the media format, one could offer something very special to the content owners: reliability that people will pay for content and that they will not be able to copy it. And that is worth trillions! Rumors are that Apple is doing just that:
The press will be the killer app for the device, but if the people had their wallets out, they will try to sell any other digital stuff as well.
Turning the tables
On the short run at least, this closed model is good for the content authors. Quite likely a lot of quality content will be exclusive to this device. It offers a sustainable business model, contrary to the advertising model (the Google model) which is not. Why? With the economy increasingly digital, advertising material stuff to support digital content will eventually bite its tail. More and more of the digital will have to be supported with ads for less and less material.
But the closed system can be disastrous for innovation everywhere else in the chain, and disastrous for the richness of the content that we read. We have seen Apple censoring the content of its on-line store. Asking a single company for an opportunity to distribute information is open society’s the worst nightmare. It will not be one US company indexing all (European) content, it will be a company deciding what (European) content can be available on-line.
(There is little incentive for those devices to offer access to free content. It would be like selling printers who could use free ink. But surprise me.)
Need for functional separation
Therefore, the regulators will have to look at this very carefully. In the chain of digital content production, distribution and consumption we will need what was called “functional separation of telecoms”. The latter is irrelevant today. But breaking links between Amazon and its reader, Barnes Nobe and its reader, iWhatever and Apple Store and iTunes … will be essential.
The news about Obama’s Nobel was broken to me on Friday morning via Twitter. In deep mistrust I followed the link to a page which looked quite professional, and had a link to a video from a news conference; live from Oslo, it said. An elderly man in a small room with a couple of reporters. Could be a hoax. Well done. But not impossible, given the trick they tried to pull.
Then the news started to come in from major agencies and news sites but I still could not believe it. With all due respect to the energy, passion and hope that president Obama brought into the global politics, where was the achievement worthy of a Nobel Prize? What was the deliverable? What was the results? Its impact? Some winners at least signed a peace of paper or made a good movie.
They do not give Oscars for promises of good movies or Nobel prize for physics for a promise of good research. Even president Obama’s supporters thought the award was premature. “If president Obama was half the man he made us think he is, he would have turned Nobel down” best captures my first reaction. Surely, president Obama we respect and indeed place a lot of hope into, cannot accept a prize given not for achievement, but for, apparently, good will, hope, and promises.
Lately it has kept us very busy. It’s called economy. Money could be made if one is able to convince other people about the promises on good future returns. The belief in the promises is inflating the bubbles, and the reward for this bubble building, for many, have been some quite good profits. At least before the crisis when the bubbles burst. It must have been this spirit of living on the future hopes that has guided not only the bankrupt economy, but the Nobel Committee as well.
There are deep theories as to why bubbles keep appearing in the business cycles, but to make a complicated story short, bubbles are inflated because people see no better real alternative into which they would invest for the future. In the absence of investment opportunities into new products or services they invest in existing stock or real estate which is therefore getting more and more expensive. This hurts the economy, because the money poured into the bubbles is not used for other, perhaps on the long run more sensible investments.
Yes there is. And it does not show a nice picture. Not of president Obama, but of the Nobel Committee and the society the committee is a part of. Nobel Prize for Obama is not so much a problem of a president that has yet to show results, it is a problem of a civilization, of the West, of Europe part of which is Norway, that lacks ideas and seeks a magic bullet to solve its mounting problems.
In choosing, that president Obama is the silver bullet, it is demonstrating a lack of self respect and total lack of confidence that the political, business and economic leaders in the West can sort out the economic, social, political and environmental mess in which we are. We invest our hopes in president Obama, because apparently we do not see any other investment opportunity. What makes matters worse is that Nobel Prize for Peace need not be about hope at all. The committee went an extra mile to make it that.
Bubbles burst, and bubbles of hope burst as well. There are no silver bullets, bubble economy is not sustainable and on the long run it is hard work and hard work alone that pays. We have plenty of hard work to do, from cleaning the environment down to improving social care for people. These are real problems that require real solutions, not good looking web-pages, blogs and nice speeches.
In our digital times, where the reflection on the internet is more important than the reality it reflects, where the image carries more weight than the real thing, and where a promise may be a substitute for delivery, the message of the Nobel Committee could not be more off the mark. This bubbly economy and this virtual media society could use a reminder that deeds, not words matter.
In January on this blog I criticized the idea of NASA’s Jim Hanson to tax carbon at the port of entry. Not only it would create trade wars and will be seen as an excuse for protectionism, it will make the economies of countries with such tax less competitive to economies without the tax. Exactly the same is the problem with carbon caps and emission trading schemes. Carbon intensive industries are “leaked” to countries where such measures do not exist.
Today I am reading about president Sarkozy’s proposal for a carbon tax. This is a step in the right direction, in particular if the taxation will indeed be the same for all sources of CO2. One wonders, for example, why an additional tax on vehicle fuels that already are heavily taxed. But this can be improved in the process.
The beauty of a properly constructed carbon tax is manyfold:
Carbon tax is a solution to many of the main problems of today. Because of its contribution to fighting climate change it comes from a moral high ground and carries the sense of urgency a new tax needs to fly with the voters. Besides, it would only make sense if Brussels would do the ugly job of directing it to member states.
Yes, it is a tax, and most will hate it for that, but it is fairer than just about any other tax. You live dirty, you pay! And the repayment of those deficits will have to come from somewhere. So it better come from where it can do more good than its moneys worth
]]>Yes, it was a big step for mankind. Are we still making steps or do we prefer sitting in the pub?
In June I visited the Smithsonian in Washington DC. Hollywood has this ability to show space travel, rockets, and shiny equipment as if they were out of this world. But in a museum you see the real stuff. A computer that has less capacity than the processor in my microwave. The knobs, the buttons, the wiring, the clothing and zippers, primitive even compered to my skiing outfit. It all looks so fragile and this makes the endeavor of NASA and the astronauts all that much grander. It was far from a sure thing. It was a gamble. But a controlled, engineering gamble where the odds were a matter of calculation. Done with a slide rules and gut feeling not by googling on MacBooks.
I felt the same when seeing the replica of Santa Maria a few years back. It is not a ship. It is, by today’s standards, a boat. But humanity dared to venture into the unknown with that. Had they asked Sancho Pansa then, I’m sure he would have opted for more farm subsidies, cheaper wine and better chairs at the local pub, instead of shipbuilding.
Today we do not get transmissions from the moon. If there was one, it would be competing with some 100 other TV channels and a zillion clips on YouTube that would make even the Brüno movie an example of decency, good taste and intelligent humor. What would our kids watch? I would not bet on the moon. They might follow it on Twitter, together with what cereal Judy had for breakfast.
And we, adults, are not reaching for the moon anymore either. Yes, we need to eradicate poverty, provide a good school to everyone and an opportunity to find a job or create a business. But is it really the only political priority that everyone has beer and sausage, soccer game and a week in Mallorca?
In the recent months I am listening to the discussions on the follow up to the Lisbon Strategy. Which was fairly benign and unambitious to begin with. If there was any reaching for the stars, it would quickly be taken with a large dose of good old Brussels cynicism. It would say “Europe, the most … whatever … in the world”, but not take it seriously. And the debates today are how to make it even more … well … close to the citizen and such that would not stick in anyone’s throat. Close to that citizen, that is in love with Michael Jackson and Lady Di. That citizen, that may still give us votes if we would use the word “sustainable” or “modern” but would punish the term “structural reform”.
What happened to the idea, that politics should lead the public opinion, and not vice-versa. Why do we have citizens and voters like that? What happened to addressing issues and problems head-on? Did we do a mistake down the road? I wish we could change the way politics can be done in Brussels. That a would-be barroso would stand up and say:
“Ladies and gentlemen we hava a crisis at hand, and some bumpy road in the decades ahead of us. There is no time to waste. We can’t live on 20th century savings and 19th century delusions of grandness. We need change. We need reform. Deep. Painful at first. Yes, you heard me right, structural reform. And a third industrial revolution. Not in order to be able to provide beer and sausages for everyone, but for Europe that gave birth to Columbus, von Braun, Shakespeare, Tesla and Eiffel to be great again. Europe, not this or that member state. Medicines in my reform proposal are not pleasant, but hey, lets make use of the fact that I do not have to be elected by the citizens. I can be the bad guy. I can do the right thing, not what the fans of Michael Jackson and Lady Di would love me for. If you want me for the job, appoint me now. Or I’m out of here! There is work to be done.”
I guess a guy like that would get a few raised eyebrows. A silent pause. Then they someone would say in a loud voice:
]]>NEXT!
Internet users who download films and music without paying for them would get three warnings before being cut off for up to a year. Until now action against illegal file sharing has been a matter for the French courts.
The debate in Europe is not if Internet piracy is legal or not, but whether we uphold the rule of law and make sure that a court has to decide to block a person off the internet, or this can be done by some other authority. Imagine that the highway toll collectors could ban people from using the highways if they though they are transporting fake Gucci bags:
Lawyers say France’s move to cut the courts out of the issue of internet access may contravene the European Convention of Human Rights and could spark conflict with Brussels. Long awaited reform of EU telecoms regulation has been held up by disagreements over whether the courts should be involved.
The bigger issue at stake here is are courts fit for the speed of the digital economy? The French obviously are not. And they are no exception. But the solution to circumvent them goes against more importnat principles of human rights and the rule of law. Besides, it would not hurt the economy if the courts would be more efficient on other matters as well.
]]>Kate Sullivan: Someday, we’ll smarten up, change some laws, and put you out of business.
Lawrence Garfield: You can change all the laws you want. You can’t stop the game. I’ll still be here. I adapt.
Businesses do open innovation, governments should do open government. It does not end with transparency, it is about how decision-making in a society would rely on as many good brains as possible. You do this by (a) letting people, individuals, not governments decide and (b) when government has to make decisions, it should do it in an open way - provide a platform for reaching decisions and agreements among stakegolders.
Governments must take steps to support this conceptual economy. They should (a) create, attract, retain and empower talent, (b) provide technical infrastructure (internet for all) such that does not stifle innovation and competition and (c) think what kind of intellectual property rights would be most appropriate in an economy that is increasingly de-materialized.
This is a brief summary of a talk I gave yesterday at the European Internet Foundation. Speaking notes are attached.
]]>If enough people think everyone else is doomed, eventually they’ll doom themselves.
How true. A Eurobarometer study reports the same story as the CNN survey. Note the huge discrepancy between the perceived financial situation of a household (64% at least rather good) and that of the economic situation in the World (only 20%), the EU (33%) and the home country (29% very good or rather good).
This crisis is a result of many different factors and it will not be resolved by a single silver bullet. Many things will have to be addressed, in a coordinated way. The general fear and pessimism is one of them.
]]>The European institutions are permanently looking for ways to present themselves useful and relevant to the citizen, so that he or she would eventually improve its attitude towards the European project and look up to Brussels with a similar admiration as when the idea of a common market helped the continent out of the ashes.
And there are plenty of ways being offered by all kinds of NGOs, pressure groups and lobbysts. A few days ago Euractiv reported on dangers of iPods:
Consumer groups have asked the Commission to “revise existing safety standards” to protect users of personal music players (PMPs), such as Apple’s iPod, from the risk of hearing damage.
And being afraid of missing an opportunity to do something good for the citizen …
Commissioner Meglena Kuneva did not rule out imposing stricter regulation on personal music players.
I think this is exactly the kind of proposal that should be ruled out. The EU does have better things to do. In fact I wish for an EU where the commission president could say “Look guys, these gadgets do have volume control” and still hope for re-election.
]]>Policies being discussed in national and international circles now, which focus on ‘goals’ for emission reduction and ‘cap and trade,’ have the same basic approach as the Kyoto Protocol. This approach is ineffectual and not commensurate with the climate threat. It could waste another decade, locking in disastrous consequences for our planet and humanity.
“Cap and trade” generates special interests, lobbyists, and trading schemes, yielding non productive millionaires, all at public expense. The public is fed up with such business.
The physics of the matter, together with empirical data, also define the need for a carbon tax. Alternatives such as emission reduction targets, cap and trade, cap and dividend, do not work, as proven by honest efforts of the ‘greenest’ countries to comply with the Kyoto Protocol
But the way a carbon tax is proposed is IMHO flawed:
The most effective way to achieve (decarbonisation of the economy) is a carbon tax (on oil, gas, and coal) at the well-head or port of entry. The tax will then appropriately affect all products and activities that use fossil fuels. The public’s near-term, mid-term, and long-term lifestyle choices will be affected by knowledge that the carbon tax rate will be rising. The public will support the tax if it is returned to them, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts.
What is nevertheless positive about this is, that it is neutral. The money collected as a tax is not spent by the government. It is given away to the people on a per capita basis (a nice touch of social demagogy). But the proposed system of taxing energy at the “port of entry” effectively increases the price of energy in a country thus making all its products and services less competitive vis-a-vis countries without such tax. So imported goods become even more competitive and carbon leakege and even greater problem.
Instead I proposed a gradual phasing out of the VAT and replacement with a tax on CO2 embedded in the products and services. Regardless whether domestic or imported. This would make carbon intensive products more expensive and others cheaper.
Countries need to tax something. Now they tax labour. They could just as well tax CO2. And if it turns out that the relation between man made CO2 and climate is not quite as strong as claims the current “scientific consensus”, not much harm to the local industry and jobs would be made.
]]>Policies being discussed in national and international circles now, which focus on ‘goals’ for emission reduction and ‘cap and trade,’ have the same basic approach as the Kyoto Protocol. This approach is ineffectual and not commensurate with the climate threat. It could waste another decade, locking in disastrous consequences for our planet and humanity.
“Cap and trade” generates special interests, lobbyists, and trading schemes, yielding non productive millionaires, all at public expense. The public is fed up with such business.
The physics of the matter, together with empirical data, also define the need for a carbon tax. Alternatives such as emission reduction targets, cap and trade, cap and dividend, do not work, as proven by honest efforts of the ‘greenest’ countries to comply with the Kyoto Protocol
But the way a carbon tax is proposed is IMHO flawed:
The most effective way to achieve (decarbonisation of the economy) is a carbon tax (on oil, gas, and coal) at the well-head or port of entry. The tax will then appropriately affect all products and activities that use fossil fuels. The public’s near-term, mid-term, and long-term lifestyle choices will be affected by knowledge that the carbon tax rate will be rising. The public will support the tax if it is returned to them, equal shares on a per capita basis (half shares for children up to a maximum of two child-shares per family), deposited monthly in bank accounts.
What is nevertheless positive about this is, that it is neutral. The money collected as a tax is not spent by the government. It is given away to the people on a per capita basis (a nice touch of social demagogy). But the proposed system of taxing energy at the “port of entry” effectively increases the price of energy in a country thus making all its products and services less competitive vis-a-vis countries without such tax. So imported goods become even more competitive and carbon leakege and even greater problem.
Instead I proposed a gradual phasing out of the VAT and replacement with a tax on CO2 embedded in the products and services. Regardless whether domestic or imported. This would make carbon intensive products more expensive and others cheaper.
Countries need to tax something. Now they tax labour. They could just as well tax CO2. And if it turns out that the relation between man made CO2 and climate is not quite as strong as claims the current “scientific consensus”, not much harm to the local industry and jobs would be made.
]]>