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February 26, 2005

Will the Real ****** Please Stand Up

Andy Grove, the founder and ex-chairman of Intel Corporation entitled his best selling book Only the Paranoid Survive.  In this book, written at the moment when Intel had achieved a dominant and seemingly unassailable position as a chip maker, Grove looked back at various junctures when the company he co-founded had to overcome challenges that might have proved fatal to Intel.  Grove called these critical milestones "Strategic Inflection Points", or points where the underlying basics have shifted tectonically; thus moments where radical action and change become a matter of survival.

Grove, of course, is taking liberty with the word paranoia, which technically describes a state of mental disease in which decisions about the real world can hardly be trusted to lead to any positive outcomes. But, of course, we all know what he really means: in a competitive world, you let your guard down at your own peril. Grove's great, if often ruthless business triumphs evolved into a business strategy that has forced Intel to constantly innovate and its main competitors into a perpetual catch up role, has been one of the driving force for the third industrial revolution, the now present Information Age.  What many, including most economists and lawmakers, have not understood is that in this Information Age, the universal currency has shifted from gold, to paper and now to "information" or better, to "intellectual property".

Last week the Supreme Court heard a case that deals with the rights of traditional real property wherein the city of New London Connecticut has tried to appropriate private residences not for the right of way of a highway, which eminent domain is usually reserved for, but for the purpose of turning them over to corporate commercial developers. What this means is that after more than 200 years in this country we still haven't figured out where private property rights begin and end.  At the end of March, the same court will hear a case --Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd-- which will have a major impact on the course of intellectual property rights in this country. Ever since the 1984 Sony Betamax ruling, a balance has been set in the fair use of intellectual property.  First in Sony Betamax, and again in the upcoming Grokster, Big Media has tried to outlaw the manufacturing and importation of electronic devices that could be used to copy the content they develop and distribute under license to the public. In Grokster, 28 large media corporations have brought suit against a company that provides peer-to-peer sharing technology that is widely used to exchange files across the Internet.  According to the Electronic Freedom Foundation "the case raises a question of critical importance at the border between copyright and innovation: When should the distributor of a multi-purpose tool be held liable for the infringements that may be committed by end-users of the tool?"

But the question of who owns information or intellectual property is far from the much simpler issues the Court is coping with in these cases: What's happened, to use Grove's terminology, it that we have come to a much graver "inflection point" in the Information Age.  How we work out these issues of content rights will define us as a civilization going forward and will greatly impact the course of our most dynamic industries.  As the Choicepoint scandal that broke into the public arena last week illustrates, there is a vast "content" business that is outside the bounds of traditional media. It is an information industry that thrives on the collection and manipulation of personal information.  At its unfettered extremes, it promises the world of Big Brother on one side, and the complete breakdown of electronic commerce on the other as the public quixotically tries on an individual level to staunch the hemorrhage of personal data.

As we learned from the Choicepoint debacle, anybody clever enough can buy the personal information trail that we now leave wherever we go and whatever we do.  Did you agree, in a hint to help you retrieve your password, to supply the name of your grammar school, your first pet's name, your favorite movie star, etc.?  How about the list of all the movies you have ever rented or bought from Blockbuster, Netflix or Amazon?  What about comments you made in a chat room or message board 10 years ago?  How about your mother's maiden name?  Never mind your social security number and date and place of birth;  how about that shopping slip at Safeway or the purchases you've made with your credit or debit card? 

Many people have just recently chosen to use Google's desktop offering to manage the data stored on their home personal computers, including, say their Quicken (complete financials) Contact and Calendar files containing information on personal and business contacts and meetings.  Others use Google's email service to manage their communications.  Google, the ultimate databank, of course, has promised to be the company that does no evil.  So what's to worry, you can always jump into your SUV and head for the hills.  Of course, along the way onboard computers monitor your speed and how many times you tap the brakes, GPS devices, your precise location and EZPass feeds location information to still other databases. We've begun to see a movement to embed remote readable RFID devices under the skin loaded with vital medical information.  There are seemingly no end and no limits.  After all, the Information Age has brought us infinite data storage capabilities and the cheap computing power that makes processing that information a piece of cake.

Identity theft occurs when someone substitutes themselves for another.  If I know all  your vital numbers and perhaps can answer some very personal questions and am smart enough to understand the safeguards that are being put into place, I can exploit your assets and credit leverage, even your security profile. It turns out that Choicepoint for one, there are other companies,  like LexisNexis, another large company also in this space, is in the business of selling that information to what they, and only they, consider to be legitimate commercial and government interests.  The FBI and CIA are big customers, as are media organizations, law firms, collection agencies, etc.

The answer on one side to security breaches is to put up another security layer. In the case of personal identity theft there are already calls for biometric databases, indelible markers like DNA, iris patterns, fingerprints, etc.; as if those schemes can't be circumvented as well.  Should we follow that path, individuals will no doubt find themselves in the almost impossible position of trying to prove they are actually themselves.  For, surely mistakes will be made or basic marker records will be purposely altered by the next group of ever savvier perpetrators. 

Highly unlikely, you say, well take the case of SAIC, the San Diego-based major government contractor that is often entrusted with the safeguarding of the government's most vital secrets. SAIC has hired over the years many leading government officials from the defense and intelligence communities with the highest security clearances.  In an ironic, thoroughly embarrassing and perhaps highly threatening incident, SAIC has had to admit that it's very own computers containing the personal data of its 45,000 present as well as former employees--including ex heads of the CIA and DIA-- were physically heisted from a company facility.  One can only imagine what a group of sophisticated operators could do with the data collected from the SAIC break in!  Surely, this incident makes the Choicepoint caper look like a shoplifting incident.

But SAIC could handle its break-in and limit press coverage.  There was no public announcement.  As for Choicepoint, they were required by a California statute to inform the victims of their mistake. Once again, we are relying on our lawmakers to come up with regulations regarding the management, distribution and commerce of personal data in an age when information is currency. By the way, these are the same lawmakers who have just spent billions fortifying their zone on Capitol Hill against truck bombs but who are unable to muster the political will to restrict the passage of basically unguarded toxic materials on train tracks that run less than a half mile from the Hill for fear of upsetting the transportation lobby.


Posted by dymaxion at 12:29 PM

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February 12, 2005

War of the Worlds

galaxy.jpg Did you ever wonder what the Internet looks like from deep inside the Beltway? And, to be perfectly reasonable, is there any reason why you should have?. This week at the State of the Net Conference sponsored by the bicameral Congressional Internet Caucus we got a chance to mix with staffers, Senators and Congressmen, industry (mostly lobbyists) and the odd media attendee. This was Washington meets K Street technology as only Washington can do it.

Luckily, having lived in the neighborhood for a while, we knew enough to doff a dark gray (or blue) suit, and select an equally conservative shirt and tie. And sure enough, among the 300 plus attendees we could spot nary a pair of chinos or a ponytail.  For a brief moment, even armed with our name card, we had the vague sense we had perhaps shown up a day too early or late.

Only coincidentally, the Conference took place on the same day that Carly Fiorina, who was once said to have national political aspirations, was ousted at Hewlett Packard.  Not too long ago, no one in Silicon Valley would have given a rat's backend for what anyone in Washington (or anywhere else except Seattle,) had to say about technology directions. Likewise, in the sea of dark suits in attendance at the Hyatt Regency Washington DC, it's safe to say that there was little more than a spittle of lip service given to the mainly libertarian, entrepreneurial, grassroots passions of the Valley.  Through Left Coast eyes, this Conference could have been held post a takeover from outer space.

Equally interesting none of the co-chairs, Senators Conrad Burns (R-MT) andPatrick Leahy (D-VT), and Congressmen Bob Goodlatte (R-VA) and Rick Boucher(D-VA) are from California. The Keynote speaker was Senator Ted Stevens (R-AK). 

More tellingly, and more than a little inconvenient for anyone hoping to do a live feed, was the lack of wireless connectivity for the event.  This Hyatt, located at the foot of Capitol Hill, does have wireless connectivity but not in the areas where the Conference was held.  For us, this meant shelling out $9.95 to have the privilege of going upstairs to the lobby between sessions.  Imagine sitting at a well funded   --the Planning Board included representatives from Microsoft, the RIAA, Verizon, Time Warner and Verisign --conference on the Internet in 2005 with no live audio or video Internet feed, no web access available and with hardly an attendee even sitting in front of an open laptop. Merge that with the dress code, and you could easily have looked up and thought the clock had been turned back to 1990.

These, of course, weren't the only oddities. The Panel on International Trends, second on the agenda, turned out to be made up entirely of UK Parliament members off on a junket.  Their talking points may not have even mentioned China, Japan and India!

So who's irrelevant, is it us and our readers interspersed in the various tech enclaves spread around the globe, who are hopefully getting a chuckle out of this description, or the black hole that Washington DC has become in 2005.  For that we have to take a closer look at the Conference's agenda and further out on the year's Congressional, Federal Agency and Supreme Court schedules. On the first day of the Year of the Rooster, panelists in the breakout sessions were discussing: Spyware, Spam, and Scams: How Are Consumers Coping?; DRM: How Will Content Be Delivered on the Internet?; Convergence and the Telecom Act; Cyber Security and Enabling the Next Round of Innovation on the Net; Intellectual Property and Innovation; Did the Internet Kill the Telecom Act?; Privacy, Trust, Security; Anticipating Grokster: A Betamax Standard for the Digital Age?; 100 mb by 2010: A Broadband Forecast or Fantasy?

Irrelevant? hardly, when it comes to influencing the flow of money and power, Washington sits like a black hole at the center of the galaxy.  Frighteningly, the five members of the (FCC) Federal Communications Commission will have more to say about how convergence plays out in the coming years than any combination of technology and communications companies.  And by the way, the Commissioner (Powell) and another member have just resigned.  Those slots will be filled by Presidential appointments with the assent of Congress. Decisions regarding the flow of information through the major pipes, the airwaves, and satellite will be made right here in Washington. For instance, do the cable companies and telcos have to share their lines into the house?  Should we be moving to IP6, how and when?  This is, of course, the year of the Grokster case; the Supreme Court will decide whether the landmark Sony-Betamax decision will stand as was affirmed by the much maligned San Francisco based 9th Circuit court of Appeals.  In case you don't recall, the Sony Betamax decision made it possible for VCR's to be sold against the wishes of the entertainment industry.  Once again, the same forces, fattened by the very profits the video industry spawned,  are trying to restrict the use of devices that only might be used to illegally  copy protected materials. Last summer the Senate narrowly pushed aside an attempt to legislate the same restrictions in something that came to be called the INDUCE Act.  INDUCE is sitting ready to be reintroduced and what the Supreme Court has to say in Grokster will greatly affect the outcome.  Washington could also have a say as to whether the states and municipalities can build out their own Wi-Fi networks.  It will be up to Washington to ultimately draw the lines on our rights to privacy on the Net, and on what can be kept out  of the public domain through extended copyright, patents or censorship.

But Washington isn't just the regulator of the spirals in the galaxy, it also molds the shapes of change through the force of its money spigots.  How fast the high speed internet gets built depends on government investment and incentives.  Investments in securing the network and users from fraudulent activities that threaten to bring it down are also mainly in the hands of Congress.

The ways of Washington are indeed strange.  At the post event reception held in the Dirksen Senate Office Building; there was a live IP video hook-up with the Marine base in Fallujah.  Two young marines, pallid and gray on the screen, patiently sat through the event.  All four of the co-chairs when they got to the mike directly addressed them;  it was clear that the war weighs heavy on the minds of the Members who have to deal with its death, displacement, human and fiscal costs on a daily basis. Equally clear, for the hundreds of staffers and guests at the reception, very few wandered over to the screen to say a few words to the two guys. Their gray,distant, slightly jerky presences were little more than a ghostly flicker in the end of the large room full of chatter, tinkling glasses and the swish of passing business cards.

Posted by dymaxion at 10:56 AM

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