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Michael Geist's Blog

The Digital Road Leads Out of Rome

My weekly Law Bytes column (BBC version, homepage version) focuses on last week's OECD meeting on the future of the digital economy.  The column notes that the discussion pointed to two competing approaches for the distribution of content in the Internet era, one based on DRM and the other on user generated content.  I conclude that the conference ultimately sent a mixed message about the future of the digital economy.  The Internet has sparked a remarkable outpouring of new creativity and provided conventional content owners with exciting new marketplace opportunities, yet legislators may be forced to intervene to ensure that consumers are protected from onerous DRM restrictions and that ISPs are precluded from using their positions as Internet gatekeepers to harm innovation. 
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French Court Dismisses P2P Case

Last week I noted that following the international standard on copyright is complicated, since there are many countries that are moving ahead or already have reforms that better serve the interests of users.  Things just got a bit more interesting as a French court has dismissed a lawsuit against an alleged file sharer for both downloading and uploading.  Much like the federal court in Canada, the French court relied on the private copying system in reaching its conclusion that the alleged file sharing was not unlawful (arguments raised by a consumer group).  While CRIA has argued that Canada is in danger of becoming an "analogue island," it would appear that the island just got a bit more crowded.
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Two Perspectives on Copyright and Education

A pair of postings this morning provide an interesting, albeit discouraging, contrast between Canada and the United States on the role of the education community and copyright.  Howard Knopf highlights the dangers of "excess caution", pointing to Copyright Matters, a document produced by several Canadian education groups.  The document adopts an incredibly conservative approach to copyright with little of Supreme Court of Canada's enthusiasm for balance and user rights.  The document fails the education community by envisioning the role of educators as guardians of knowledge rather than as disseminators of our culture and heritage.

Compare that approach with a speech delivered to the Association of American Publishers yesterday by University of Michigan President Mary Sue Coleman defending her university's participation in the Google Book Search program.  Coleman argues that the program is "a legal, ethical, and noble endeavor that will transform our society." 

Read the full speech, if only to see the kind of leadership that Canada needs on this issue.
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Two-Tier Email

The NY Times reports that AOL and Yahoo! plan to implement a new email certification program that will ultimately force commercial emailers to pay a fraction of a cent per email to deliver their emails.  The program, discussed throughout the week in the trade press (here, here and here) envisions a multi-tiered approach to email:
  • email from an address within a user's address book would proceed directlly to the user's inbox
  • email that is certified (ie. paid for) would also proceed directly to the user's inbox
  • email that is not certified would pass through AOL's spam filters.  The NY Times reports that one in five legitimate commercial emails is blocked by the filters.  Moreover, the filters frequently strip links and images from the email.
AOL's defence of the program sounds much like the ISPs who defend a two-tiered Internet.  It argues that there are different classes of service with regular mail and that this program simply replicates that approach for email.  Marketers, many of whom opposed taking strong legislative measures against spam, now find themselves facing significant additional costs to getting their email delivered.

I see several problems here.  First, the new program has seemingly little to do with spam since we're dealing with legitimate email.  It appears that this is really about a new revenue stream for providers such as AOL and it may help push the ISPs toward further differentiation of quality of service. 

Second, should the revenues become significant, the program may ultimately create an incentive to limit the reliability of anti-spam filtering.  If this does generate millions of dollars (as the Times suggests), then AOL may find that it is profitable to have spam filters that block lots of legitimate content since that will encourage more senders to pay the certified email fees.  Indeed, the program flips the traditional incentives since the less reliable the traditional email systems, the more valuable the certified email programs.

Third, AOL plans to discontinue a program known as an "enhanced white list", which currently allows certain reliable email senders to get their email through without it facing the prospect of being blocked by spam filters.  AOL now says that it will eliminate the enhanced white list by the summer, forcing senders to sign up for its certified email service. 

Fourth, the new costs will hurt users (who will pay indirectly for these new charges) and many non-profits, activist groups, and smaller businesses, who simply won't be able to afford these new costs.

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Be Careful What You Wish For

As I read reports tonight that France has advanced plans to legalize P2P, I was reminded that during the copyright reform process, groups such as CRIA are often heard to say that Canada needs to follow the lead of the rest of the world.  In light of recent events, I suspect that many user groups might be inclined to agree.  We could follow:

With a new Conservative cabinet set to be named on Monday, it will be important to remind officials that international standards means much more than just deciding what to do about the WIPO Internet treaties.
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Sony Hit With Another Canadian Class Action Lawsuit

Sony Canada has been hit with another class action suit arising from last year's rootkit fiasco.  This suit is particularly interesting for a pair of reasons.  First, it contains new allegations about Sony's conduct in Canada.  In particular, it alleges:

  • Sony released at least 34 titles in Canada with sales of approximately 120,000 CDs
  • Sony waited two extra weeks to begin recalling CDs in Canada as compared to the United States
  • Sony did not do enough to remove the CDs from store shelves. One of the named complainants purchased the CD on Boxing Day, weeks after the recall was announced and the complaint alleges that the CDs are still being sold.
Second, the complaint includes considerable analysis of Sony's alleged violation of both consumer protection and national privacy legislation.  Given the analysis, the question that immediately comes to mind is whether the Privacy Commissioner of Canada and the Competition Bureau have launched investigations into the Sony rootkit incident.  If not, why not?
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Battle Lines

I'm just returning from participating in the OECD's Future of the Digital Economy conference in Rome. The conference attracted about 350 attendees with all expected companies, lobby groups, NGOs, and governments in attendance.  I may write more about the conference next week, but it is worth highlighting my major take-away, namely the clear divisions for what are likely to be the two big battles in this area in 2006 (and possibly beyond).

The first big battle again involves digital rights management (DRM) technologies.  While one might be forgiven for thinking that we're back in 1996 rather than 2006, but DRM came up at virtually every panel.  From my perspective, the news is that there is at least some acknowledgement of the problems involving DRM.  The privacy, security, innovation, etc. issues are still largely ignored, however, there is a tacit (and sometimes explicit) recognition that DRM has created consumer concerns.

The battle lines revolve around the source of these concerns.  For the content companies, the problem lies not with their DRM but rather with the interoperability problems engendered by DRM.  They argue that the problem therefore rests with the electronics companies, who insist on releasing devices that won't recognize all DRM, thus leaving consumers stuck with products that frequently can't be shifted from device to device.  This discussion reminded me of the recent headline during the Canadian election which ran along the lines of "Martin attacks Layton for not attacking Harper."  In this context, the not-particularly catchy headline would be "Content companies attack electronic makers for hurting their attack on consumers with their own attack on consumers."

Incredibly, this is described as a "neutrality" issue.  The content companies would like a device neutral world (except when they don't, such as with the broadcast flag) in which DRM will work on all devices. Indeed, there was some discussion about the need for government mandated interoperability.

Another recurring theme at the conference pointed to the other side in this debate.  It was remarkable to see the amount of discussion around the growing importance of user-generated content.  Although unfortunately tagged as the rise of the "amateur" (or marginally better "creative activation"), there were noteworthy presentations on Creative Commons, the BBC Creative Archive, Flickr, Google Book Search, and blogs (Technorati founder Jason Sifry reported that 75,000 new blogs are being created every day with Japanese emerging as the leading language for blog postings in January - less than 1/3 of blog postings were in English). 

Among this group not only is DRM not needed (which drew a response from Intel's representative who seemed genuinely puzzled at its absence), but it is harmful with negative effects for free expression, user acceptance, as well as privacy and security.  This again brought up the growing call for DRM consumer protection that would better protect against DRM misuse.

Given the "buy your senator an ipod" campaign in the U.S., I expect that this is where the battle will be fought.  Once everyone in the Senate has an iPod and experiences the limitations of DRM, the response from the content companies will be to blame the consumer electronics industry and to try to force changes to devices, not the DRM'd content itself.

The other big battle will be well known to readers of this blog - network neutrality.  The issue surfaced repeatedly in questions and comments as a serious threat to the digital economy.  That said, Verizon was on hand to present its IPTV, which looked a lot like a private Internet.  It isn't described as such of course, but we were told that the residents of Keeler, Texas are thrilled with the new high speed lines that permit transmission of high-definition television and other content.  Content companies also like it - so much so that Disney was delighted to strike a deal with Verizon to deliver its content in this way.  And it turns out that Disney gets more than just fast delivery of content in the bargain as Verizon has agreed to assist them with their IP enforcement efforts.

Ultimately, if the OECD's conference was unable to arrive at a consensus on the future of the digital economy, it succeeded in highlighting where the future battles will be fought.
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The Sound of Silence

The Canadian Press picks up on the story involving Nettwerk's backing of a defendant in an RIAA suit.  The story includes some additional comments and insights from Nettwerk's Terry McBride.  McBride says that he has the support of all the artists that he manages including Avril Lavigne, the Barenaked Ladies, and Sarah McLachlin.  In fact, he notes that he's received emails of support from several U.S. congressmen, a U.S. senator and some record label presidents.  Says McBride:

"It's time to step up and say 'This is crazy.' My hope is that this (Nettwerk's support) will create a positive concrete conversation between the artists, their managers and the record labels as to what the future is. . .  The fan is the future. Suing the fan is like shooting yourself in the foot."

Graham Henderson, the president of CRIA, was apparently unavailable for comment.

Update: The Toronto Star has coverage with yet more comments from Terry McBride, including "Avril would never sue a fan, so obviously the RIAA can't claim that they're doing this on Avril's behalf because she wouldn't be suing anyone. Their interests are very different than the interests of our artists."

Update II: Terry McBride, who clearly is not planning on remaining silent on this issue, is featured in this podcast that includes an interview with the Nettwerk CEO.

Update III: Graham Henderson speaks.

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Coming Soon: The Two-Tiered Internet in Canada

Several Canwest papers run a story this morning (Montreal Gazette, Edmonton Journal) on the move toward a two-tiered Internet in Canada.  I'm quoted expressing concern, but the most important part of the story comes from Telus, which not only confirms the move toward tieried pricing ("The industry has to move toward different charges for Internet customers with diverse needs"), but for the first time acknowledges that the company is considering matching the BellSouth approach of charging websites for access to their network ("The company is also thinking about charging large firms such as Google or eBay for access to its network, something that Bell South and AT&T are also proposing in the United States.")

Interestingly, the Toronto Star has a story today featuring an interview with CRTC Commissioner Kevin French who notes the concern with the two-tiered Internet but says "We're aware of the problem and believe we have the legal equipment to deal with it, but we don't have a case in front of us. Somebody has to file a complaint."

There is no need to wait.  With the Canadian telcos on record stating that this is where they are headed, the time for the CRTC and Competition Bureau to act is now.
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The Risks and Rewards of Data Retention

My weekly Law Bytes column (Toronto Star version, freely available version, BBC version) examines the U.S. Department of Justice's demand for search data from the world's leading search engines.  I argue that while much of the focus has been on the privacy implications of the USDOJ request, the story highlights a much bigger issue - the significant risks and rewards that arise from retaining enormous amounts of data. 

The authorities' initial data request was stunning for its sheer breadth.  The USDOJ requested all web addresses (URLs) contained in the Google database as well as a record of "all queries that have been entered into your company' s search engine between June 1, 2005 and July 31, 2005."  In other words, it wanted a list chronicling every website in Google database along with literally every search request over a two-month period. When it faced resistance, the USDOJ agreed to a narrower request that included a random sample of one million web addresses as well as a list of every search string during a one-week period.

Although none of this data relates to a specific individual - it covers hundreds of millions of Internet users - the request has still produced a chilling effect as many begin to question whether search requests thought to be anonymous could ultimately be tracked back to them. 

In a broader context, the demand also highlights the growing challenge associated with data retention.  All companies, particularly those operating online, recognize the value of retaining information about their users.  Some information is essential to providing customer service, while other data can be used to provide users with a customized experience by eliminating the need to re-enter passwords, automatically posting relevant content, or sending permission-based email marketing that accurately reflects the users' interests. The value of information extends beyond personal data.  Once aggregated, retailers can spot trends among demographic groups, ISPs can gauge usage patterns, and search engines can identify what is on the minds of the world' s Internet users.

Given its value, it comes as little surprise to find that companies retain such data for lengthy periods, using sophisticated data mining technologies to analyze the information. While these previous examples illustrate the rewards of data retention (which benefit both companies and their customers), significant risks also exist.

The same data can be mined for purposes that extend far beyond the reasons for which it was initially provided.  The Google case provides a classic illustration in this regard as mere search terms take on a new significance in the hands of Department of Justice lawyers. Some data is not consciously provided at all - it is simply gathered automatically with little thought given to its potential uses.  For example, private parties may demand ISP server logs that are generated automatically to assist with new defamation or copyright lawsuits. One of the biggest risks associated with data retention comes not from requests that proceed through the legal system, but from security vulnerabilities that puts sensitive data into the hands of hackers.  Last year, more than 50 million people in North America received notifications that their personal information had been placed at risk due to a security breach.

While Canadian privacy law establishes general obligations on data retention and destruction, there are few clear legal obligations to either retain or destroy information.  In light of recent events, it is time to search for some solutions. 
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