Gartner, a leading IT research firm, predicts that "by 2012, 80 percent of Fortune 1000 enterprises will pay for some cloud computing service, while 30 percent of them will pay for cloud computing infrastructure." But there's been far less progress in the public sector, according to recent report released by Vivek Kundra, Obama's Federal Chief Information Officer.

The Digital Millenium Copyright Act makes it a crime to circumvent digital rights management technologies but allows the Librarian of Congress to exempt certain classes of works from this prohibition.

The Copyright Office just released a new rulemaking on this issue in which it allows people to "unlock" their cell phones so they can be used on other networks and "jailbreak" closed mobile phone operating systems like the iOS operating system on Apple's iPhones so that they will run unapproved third-party software.

This is arguably good news for consumers: Those willing to void their warranties so they can teach their phone some new tricks no longer have to fear having their phone confiscated, being sued, or being imprisoned. (The civil and criminal penalties are described in 17 USC 1203 and 17 USC 1204.) Although the new exemption does not protect those who distribute unlocking and/or jailbreaking software (which would be classified under 17 USC 1201(b), and thus outside the exemption of 17 USC 1201(a)), the cases discussed below could mean that jailbreaking phones simply falls outside of the scope of all of the DMCA's anti-circumvention provisions.

Apple opposed this idea when it was initially proposed by the Electronic Frontier Foundation, arguing that legalizing jailbreaking constituted a forced restructuring of its business model that would result in "significant functional problems" for consumers that could include "security holes and malware, as well as possible physical damage." But who beyond a small number of geeks brave enough to give up their warranties and risk bricking their devices, is really going to attempt jailbreaking? One survey found that only 10% of iPhone users have jailbroken their phones, and the majority are in China, where the iPhone was not available legally until recently. Is it really likely that giving the tinkering minority the legal right to void their product warranties would cause any harm to the non-tinkering majority that will likely choose to instead remain within a manufacturer's "walled garden"? I don't think so. If, as a result of this ruling, large numbers of consumers jailbreak their phones and install pirated software, the Copyright Office can easily reconsider the exemption in its next Triennial Rulemaking.

Praise the Lord and pass the ammunition.

So goes the FCC's stacked "706 Report" on broadband this week, which said that Americans aren't getting broadband in a "reasonable and timely basis," the first negative conclusion since the report's inception.

Using the standard developed in the National Broadband Plan (NBP) - which recommends "that every household in America have access to affordable broadband service offering actual download (i.e., to the customer) speeds of at least 4 Mbps and actual upload (i.e., from the customer) speeds of at least 1 Mbps" - the Commission determined that by this benchmark "broadband remains unavailable to approximately 14 to 24 million Americans." (Not that 14 - 24 million Americans don't have high-speed access, as has erroneously been reported.)

The FCC is building its war chest so that it can justify Lilliputian Internet regulation of network providers. Through a number of recent proceedings, statements and reports - e.g., the Open Internet NPRM, Cellular Competition Report, and "Third Way" NOI - the 706 Report traffics in the same meme: network providers just aren't doing their job, so they must be coerced or shamed into proper "compliance."

Not uncharacteristically, The Free Press heralded the new, rather dour (and now redundant) broadband assessment. Said the lugubrious, special interest lobbyists - "Now that the FCC has taken the first step of acknowledging America's broadband problem, we hope that it will advance policies to reverse this decline though the promotion of real competition and true consumer choice."

And where are the clowns?
Quick, send in the clowns…
Don't bother—they're here.
—Judy Collins/Stephen Sondheim, Send in the Clowns

Recently, Nate Anderson of Ars Technica published File-sharing has weakened copyright—and helped society. This story's title summarizes the thesis of a "new" paper by those Grokster-loving, Free-Culture-Movement Professors, Felix Oberholzer-Gee and Coleman Strumpf (collectively, "OGS"). Their "new" paper is entitled File-Sharing and Copyright. Fortunately, their non-sequitur thesis does not follow from their clown-car collection of factual, legal, economic, and historical errors that poses as "scholarship."

Indeed, I just published a blog post and a longer paper to show that those who listen to the likes of Oberholzer-Gee merely end up accusing the Government Accountability Office of decades of wrongdoing by celebrating the "positive economic effects" of criminal racketeering. The blog post is entitled, Why Copyright Industry Costs-of-Piracy Studies Correctly Ignore the "Positive Economic Effects of Criminal Racketeering; the paper is entitled, Punk'd: GAO Celebrates the "Positive Economic Effects of Counterfeiting and Other Criminal Racketeering.

Perhaps the only spectacle more gratifying than the sight of rats deserting a sinking ship is the far-more-rare spectacle of the officers of a sinking pirate ship, sitting in the bilge, crying about their wet socks as they obliviously blast more holes into the remains of their hull.

Which brings me to LimeWire. In the aftermath of Judge Wood's Opinion holding Mark Gorton, the Lime Group, and LimeWire LLC liable for intentionally inducing mass piracy for a decade, all sorts of strange shenanigans have ensued. But none tops the campaign of self-destruction waged by the Lime Group's chatty CEO, Mark Gorton.

In court, Gorton's lawyers recently filed a Motion for Reconsideration informing Judge Wood that she misstated both the law and the facts when she held that Lime Group and Mark Gorton personally were both legally liable for the inducement of mass piracy perpetrated by LimeWire LLC, the company that distributed the LimeWire file-sharing program. In this motion, Gorton's lawyers make a mostly perfunctory and error-ridden attempt to argue that Judge Wood was just totally wrong to conclude that poor Mark Gorton should be personally liable for all those bad things done by those bad people at LimeWire LLC.

Meanwhile, back at Lime Group, Mark Gorton had another brilliant idea: While his lawyers argued in court that he was not really involved with LimeWire at all, he would argue the opposite case in the court of public opinion. The result was the aptly-titled New York Times piece, Idea Man of LimeWire at the Crossroads. In it, Gorton explains how he was always the driving vision behind the program that Judge Wood just held to have been a deliberately crafted piracy machine.

That may help further clarify the proper disposition of the Motion for Reconsideration arguing that the "Idea Man of LimeWire" had no idea what was going on in his corporate basement.

Meanwhile, back in the basement, LimeWire LLC CEO George Seale decided to find a friendly journalistic outlet to vent his own tale of woe. Naturally, he picked Billboard magazine. There, reporter Anthony Bruno broke with technology-journalist convention and asked some hard questions, including one that prompted the CEO of LimeWire LLC to explain that for the last ten years, neither he nor anyone else at LimeWire has had the slightest clue as to why people use their program:

Rather than address each point of evidence, let's focus on the most important one--that more than 98% of files requested on LimeWire infringe on copyrights.
LimeWire considers this an open issue still in litigation. I can't say that I agree with any of the expert reports that were submitted. Whatever the numbers of files authorized for sharing versus those that are not, LimeWire does not know those numbers. It did not in 2000 and it does not now. LimeWire's searching and sharing functions are entirely decentralized. After downloading and installing LimeWire on their computers, we currently have no visibility into what types of content users seek, send and receive with the software.

Matthew Yglesias is the "progressive" mind behind the modestly titled blog Yglesias. In three recent posts, he turned the vast erudition bestowed by his B.A. in Philosophy toward the analysis of the economics of music and intellectual property. Indeed, Mr. Yglesias did so with such profound, if baseless, confidence that he deigned to declare those who disagree with him "absolutely insane."

In The Futile Struggle Against Free Content, Intellectual Property is About Consumers, and Marginal Costs and Average Costs, Mr. Yglesias thus proved publicly a point that research and humility enabled me to discover privately: an Econ-101-level understanding of economics is woefully inadequate to understand almost any real-world market, much less the economics of music or intellectual property. As a result, Mr. Yglesias' posts are useful not because they provide useful insights--they don't--but because they nicely illustrate five fatal mistakes in the economic analysis of intellectual property often made by those whose self-esteem exceeds their self-edification.

A dumbfounding idea has been circulating on the Internet: If would-be pirate kings commit egregious acts in order to increase the costs of enforcing federal civil rights, like copyrights, then we should reward them by forcing copyright owners to spend more to enforce their rights.

I would have thought that almost anyone would realize that functional societies cannot let would-be-pirate kings use fraud or negligence to increase the cost of enforcing the federal civil rights that they usurp. But then I read the "scholarly" article Challenges and Directions for Monitoring P2P File Sharing Networks: Why My Printer Received a DMCA Takedown Notice, and the Ars Technica post Using faulty data to demand settlements from innocent surfers. Both assert that if BitTorrent tracker-site operators recklessly or deliberately accuse third parties of infringing copyrights, then the owners of the copyrights infringed must spend more money to enforce civil rights intended to empower a creative sector beholden to private audiences, not governments.

Fortunately, centuries of common-sense practice suggest a better solution: If BitTorrent tracker-site operators are falsely accusing third parties of infringing copyrights, then functional societies should stop those operators who do so recklessly, and prosecute those who do so deliberately.

I'm VERY impressed with my Droid, particularly its browser capabilities. I can even run the backend of Wordpress inside the browser ("Look, Ma, no app!") to blog! (The WPtoGo app helps, as there are a few things that don't work quite perfectly inside the browser.)

My Droid is a pretty darn good substitute for a desktop PC. In fact, since my desktop's motherboard died the other day, the Droid is all I have at home right now-and it satisfies most of my computing needs, at least for home use. So... that means every wireless carrier with a strong android/iphone-class device is a substitute, meaningfully, but of course not perfectly, for traditional ISP options like DSL, cable, fiber, etc. So why don't 3G networks get counted at all when assessing whether broadband markets are so uncompetitive that only net neutrality regulations can save us from corporate abuse?

Oh, and did I mention that, if my thumbs get tired, I will soon be able to tether my Droid to bring Verizon's data network to my PC?

One might have thought European Commission antitrust regulators had their hands full with harassing Microsoft about the "Browser Ballot" (our comments) and fining Intel, but apparently they're already looking for new targets so they can "stay busy": Sun disclosed on Monday that the EC had objected to the "combination of Sun's open source MySQL database product with Oracle's enterprise database products and its potential negative effects on competition in the market for database products."

It's difficult to see how Oracle's takeover of Sun would reduce competition in the intensely competitive database market. Since Sun's MySQL software is open source and uses the strongly "copyleft" GNU General Public License (GPL) v2, Oracle will have little control over its future evolution. If Oracle decided to stop updating MySQL tomorrow, anyone in the MySQL development community could simply "fork" the project. Oracle knows this. (Do the European regulators?) If anything, Oracle's proposed acquisition of Sun indicates that they are embracing the business model of commercial open source. In Sun's case, that has meant striving to lead the best collaborative project possible and making money on providing the best product support.

European antitrust regulators should be celebrating this deal, rather than obstructing it.

The European Commission is now designing software. And that software is Microsoft Windows...

Comments of Adam Marcus & Berin Szoka to the European Commission on the Matter of Microsoft's Browser Ballot Proposal, COMP/C-3/39.530 -- Microsoft (Tying)*

Submitted Nov. 9, 2009 [PDF of filing]

We applaud the Commission for not repeating its earlier approach to concerns about tie-ins to Microsoft Windows by ordering Microsoft to cripple the functionality of its operating system-- such as occurred with the Windows Media Player. While a "browser ballot" is certainly a less restrictive approach, we remain unconvinced that mandating such a ballot is necessary in this case, and concerned about the precedent that government intervention may set here for the future of the highly dynamic and innovative software sector. If, however, a ballot is to be required, we encourage the Commission to accept Microsoft's ballot as proposed.

A Browser Ballot Mandate Is Not Necessary

The European Community's Discussion Paper on exclusionary abuses recognizes that bundled discounts infringe Article 82 only when the discount is so large that "efficient competitors offering only some but not all of the components, cannot compete against the discounted bundle."[1] In this case, a number of alternative browser producers have successfully competed against Internet Explorer in the past--despite it being bundled with Microsoft's Windows operating system.