Content Companies Demand Subsidies From ISPs... While ISPs Demand Subsidies From Content Companies

from the regulatory-silliness dept

It's sometimes quite amusing to watch how various economic ecosystems grow, where multiple companies have symbiotic relationships, and then start to freak out when they think that other companies in the ecosystem are somehow earning "too much." That, of course, is at the heart of many recent battles we've seen -- from net neutrality (where the ISPs think Google is earning too much) to the music industry (where record labels think ISPs and Apple are earning too much). But sometimes it leads to rather amusing contrasts. For example, up in Canada, the entertainment industry is complaining that ISPs earn too much, and therefore are pushing for laws that would require broadband providers to pay money to the entertainment industry to develop new content.

But contrast that to the situation in the UK, where there's an ongoing push for content companies to pay extra to help subsidize the cost of broadband deployments. The argument there is that all the content that's being put online is creating a drain on broadband network resources. But, isn't that exactly what the content creators in Canada are saying is a "free ride" for the ISPs?

Basically, it's yet another situation where each side of the debate overvalues its own contribution. The ISPs think that it's the network that is the most important thing, and the content providers should be paying their way to use it. Meanwhile, the content companies think that it's their content that makes the networks valuable, so the ISPs should be paying extra to offer their content. In reality, they're both wrong. The two things work together just fine in a market where each side pays its own way and doesn't have to subsidize the other. Now, if we could just see such contrasting regulations proposed and passed in the same country, we could have an amusing situation where the cross-subsidies cancel each other out.

Filed Under: content companies, isps, regulations

EC's Latest Rules Govern Its Coffee Machines

from the politicians dept

The European government's penchant for regulation is well-documented: its generally fruitless battles against Google and Microsoft are but two examples. Now, though, it's taking on the really serious stuff: the quality of the espresso in the European Commission's offices. The NYT says the EC bought 21 high-tech coffee machines at 5,000 euros each for its headquarters, "as a perk to keep top officials and visiting dignitaries from having to line up in cafes on other floors of the star-shaped Berlaymont Building." The big bill attracted criticism as another example of wasteful spending, but a bigger problem emerged for Commission employees -- the coffee didn't taste good. The Italian company that made the machines plans to replace them with some modifications (apparently water softeners in the coffeemakers were partly to blame), and it will also train "coffee monitors" in "coffee tasting theory and sensorial techniques," "recipes and hints," and "ordinary machine maintenance procedures." I'm not sure if it's heartening or frustrating to learn that bureaucrats' penchant for wasting time, money and other resources is pretty much the same the world over.

Filed Under: coffee machines, europe, regulations

The Goldilocks Argument For Regulating Online Content In Canada

from the too-much,-too-little dept

The attempts by some Canadian TV writers and actors to get Canadian regulators to regulate internet content is seen by many as pretty ridiculous. The arguments make almost no sense, and seem to center on the idea that there's so much content online, that no one can find Canadian content unless (a) ISPs pay extra to fund it and (b) certain sites are forced to promote Canadian content. What's never explained is what's wrong with option (c): make good content that people want to see. That option would solve all the other issues.

That said, Rob Hyndman points us to a great analysis showing just how ridiculous it is to think that the CRTC needs to regulate online content:

Once upon a time there were only four or five television channels. Hardly anyone had the money to broadcast a television signal, and if anyone did, there were only so many spots available on the dial.

In such a world of "spectrum scarcity," it was argued, government regulation was essential to ensure a diversity of content--and, in Canada, to ensure that some of that content was Canadian. Or as the cultural nationalists had it, to make it possible for Canadians to "tell ourselves our own stories." This was the world in which the CRTC was born.

Flash forward 40 or 50 years, to a very different world. Not only are there now hundreds of conventional television channels catering to every conceivable taste, but with the advent of Internet broadcasting the constraints of cost and spectrum have disappeared. There are literally hundreds of thousands of Canadian websites, each of them, post-YouTube, potentially a broadcaster in its own right. It is now possible for any Canadian with a video camera and a laptop to transmit to every other Canadian. And the cultural nationalists' response? This just makes the case for more regulation.

It's a great point, and it's something I call the "goldilocks argument" for regulation. The original content regulations were because there was "too little" content that could be delivered over TV. Thus, there "needed" to be regulation to ensure that in that limited and scarce space, that some of it would be Canadian. But the argument now is the reverse. It's that there's "too much" content online, and thus it's hard to find good Canadian content (apparently, some people up north haven't discovered Google). So, the argument seems to be that the CRTC is needed to make sure the content is "just right" whether there's too little content or too much content available.

Filed Under: canada, colin mochrie, content, internet, regulations
Companies: crtc

Canadian TV Industry: Please, Regulators, Make The Internet More Like TV... And Have ISPs Give Us Money

from the how-to-break-the-internet-in-one-easy-step dept

Last week, we wrote about how the Writers Guild of Canada was pushing government regulators to force ISPs to fund content creation, with a specific focus on promoting Canadian content and trying to tone down or keep out non-Canadian content from online sources. This seemed pretty ridiculous, but the Canadian Radio-television Telecommunications Commission (CRTC) is in fact holding hearings on the issue.

Perhaps the most ridiculous is Canadian comedian Colin Mochrie, who is making pretty much a mockery of the whole thing by whining about how Canadian content will get buried if ISPs don't pay extra to create and "broadcast" Canadian content. Perhaps Mochrie hasn't noticed, but ISPs aren't like TV networks. They don't choose what content they air. They are the conduit. Mochrie's complaints get more and more silly the further he goes:

Unlike television, when you are broadcasting through new media, the space for content is practically endless. However, being endless, content can easily get lost. So how do we make sure Canadians can find our own content? How do we make sure Canadian content is featured and given "shelf space"?

How about by making the content good so people want to see it no matter where they're from? Or, if he wants to go fund a website that just highlights Canadian content, he's free to do so. It wouldn't even cost that much, thanks to the wonders of the internet. And that's before Mochrie just starts making stuff up:

Most of what we do on the Internet falls under the definition of "broadcasting" and that percentage grows daily as we turn to our laptops, iPods and mobile phones to watch our favourite programs.

No, actually. Most of what people do on the internet falls under the definition of "communications." A small amount falls under "broadcasting," but even then it tends to be a lot more interactive than traditional broadcasting. The broadcasting companies have jumped onto the internet bandwagon (much too late, of course), but they should learn to adapt to the platform -- not force the entire platform to become TV 2.0.

Mochrie goes on to make the argument that basically anyone offering content in Canada needs to be regulated -- meaning forcing them to show Canadian content, and that ISPs and wireless operators should be forced to fund this content? Why? Who needs reasons! It's for the good of Canadian culture or something.

In the meantime, while we agree with ISPs like Rogers, who are protesting any such move, it is worth pointing out how hypocritical they're being as well. Rogers is protesting any such rule by claiming "We're a dumb pipe" who can't be expected to "regulate" the content shown over their network. However, as Michael Geist points out, when it comes to traffic shaping, Rogers has no problem claiming it's "smart" enough to figure out what to shape and block. So which is it?

This whole debate is rather silly of course. Starting to regulate content on the internet would serve to severely damage internet services and culture in Canada -- bringing all of the disadvantages of protectionist cultural policies and knocking out most of the benefits of the internet. Hopefully the CRTC knows better than to follow folks like Colin Mochrie.

Filed Under: canada, colin mochrie, content, internet, regulations
Companies: crtc

Canadian Writers Guild Demanding ISPs Pay For Content Creation; Pissing Off Members

from the it-doesn't-work dept

Mark K. sent this in a week or so ago, but I'm just getting to it now. Apparently, Ryan Sohmer, an author of a popular webcomic called Least I Could Do, is pretty pissed off at the Writers' Guild of Canada, of which he's a member, which is supposed to be looking out for his best interests -- but is not. Specifically, it appears that the WGC is pushing for a proposal that would demand ISPs pay content creators for new content produced in Canada. It's sort of the equivalent of the recording industry's desire to put in place an ISP music tax, but for screenwriters for TV and movie content. On top of that, it has a nationalistic bent, that would limit certain foreign content from reaching Canadians in a ridiculous attempt to "promote" made-in-Canada content.

Sohmer points out why he felt forced to join the WGC against his better interest (he needed to in order to work on certain projects) and had mostly ignored them until they decided to push this dreadful idea for regulation. As he notes, what the WGC is trying to do is turn the internet into a version of television, with limited choices and strict regulation on content. He points out how disastrous this would be:

As someone who's been struggling with the television system for the last 3 years, I can tell you very explicitly: it simply doesn't work. It hampers talent, overpays "producers" while taking money out of the real talent budget and you inevitably end up with a watered down excuse for entertainment.

Why anyone would want to re-create the television industry is beyond me. That makes about as much sense as publishing a new newspaper these days, or putting together a new terrestrial radio station.

Say what you will about the web, and there is much to be said, it breeds innovation. The reason for that is because it's non-regulated, because an ass like me can produce whatever he likes, however he likes in an effort to entertain others. The majority of the things we try don't/won't/shouldn't work, but if 1 out of every 100 projects works, that's a success.

You simply can't do that in the traditional media system. It won't let you.

We see it time and time again. The organizations who benefited from the "way things used to be" will almost always work to force any new and innovative platform to be restricted, legally, to force a similar structure. Remember the laws that got passed when automobiles first came around that required people to walk in front of them waving red flags? Yup. The WGC's proposal seems pretty similar.

Filed Under: canada, isps, paying, regulations, writers guild

Another Accounting Law Designed To Increase Transparency Does The Opposite

from the unintended-consequences dept

With all of the financial mess out there, it's likely that we'll soon see calls for new regulations to help "protect" against fraud. However, before we rush into doing so, it's worth looking at how damaging previous attempts to do the same thing have been. We've already covered the massive amount of damage done by Sarbanes-Oxley, which basically made it extremely difficult for a private company to go public and significantly increased costs for any public company -- all while doing next to nothing to actually cut down on fraud.

And, now, FAS 157 has come into play -- a new rule impacting many venture capitalists, forcing them to figure out what the "fair market value" of their investments are, and provide that number to their investors. This has many different VCs complaining about what a stupid process this is. It raises similar questions as the legal change a few years ago that required companies to put stock option valuations on their books as well. The problem is that these things are impossible to accurately value. Not difficult, but impossible. You're asking people to value a totally illiquid asset as if it were liquid.

Even if the venture capitalists use a rigorous process, the result will be wrong. There's simply no way to accurately value something like a private startup until another transaction happens where the value is actually set. And, that's the way it should be for a private investment (it's also why not everyone is allowed to invest in such endeavors, because it is inherently more risky). But forcing companies to make up bogus (no matter how well meaning) valuations for companies has dangerous unintended consequences. No matter how bogus the numbers are, since they're there, people will use them as if they're real. And that will lead to more bad investing, rather than less. So, once again, we have a law designed to stop bad investing, which will most likely cause the opposite to occur.

Filed Under: accounting, fas 157, regulations, sarbanes oxley, unintended consequences

More Silly Restrictions Will Limit Team Obama's Ability To Communicate

from the don't-let-the-lawyers-govern dept

While there are some indications that newly inaugurated President Obama is going to be able to keep his Blackberry (or some other device) to communicate with the outside world, similar "restrictions" are being used to curtail his staff's ability to communicate. Specifically, staffers have been told they have to give up instant messaging. The reasoning, once again, comes down to the lawyers, and that records need to be kept of all written communications in the White House, according to the Presidential Records Act. However, it's seriously (and reasonably) pissing off Obama staffers who have come to rely on IM as a very efficient way to communicate and get stuff done.

It's really sad when efficiency is getting stifled by lawyers, though it happens all too often. Why not just make it clear to staffers to consider the fact that everything they instant message may be seen on CNN the next day, and tell them it's their responsibility to use the tools effectively? This is the federal gov't we're talking about. Why are they being treated like grade school kids? The purpose of the Presidential Records Act is to increase transparency in government. But, like so many unintended consequences of regulations, it's doing the opposite. It's driving people to use less efficient and less useful tools of communication to decrease transparency.

Filed Under: communication, instant messaging, obama, regulations, unintended consequences

Does ACTA Secrecy Violate European Law?

from the too-much-secrecy dept

One of the most problematic aspects of the negotiations around ACTA, the Anti-Counterfeiting Trade Agreement, is how the entire process has been shrouded in secrecy. Those involved in the process try to brush off this complaint by saying something along the lines of "but we always negotiate treaties this way!" but that's hardly a good reason to do so -- especially when the impact of ACTA could be wide ranging. Some of the documents that have leaked out from the process suggest a pretty massive shift in copyright law could be pushed through via ACTA. You would think that it would make sense for such a process to be done in public. In fact, according to some, this level of secrecy it may be illegal in Europe. The Foundation for a Free Information Infrastructure (FFII) has filed a complaint in Europe, noting that the secrecy goes against EU regulations. The group is demanding either that the documents involved in the negotiations be made public... or that the EU withdraw from the negotiations (which, of course, won't happen).

Filed Under: acta, europe, openness, regulations

UK Government To Force ISPs To Become Copyright Cops

from the whose-side-are-they-on? dept

Like other industry trade groups around the world, the British Phonographic Industry, that country's RIAA equivalent, has been pushing for British ISPs to become its copyright cops, something a number of ISPs have refused to do. After some threatening noises from British politicians, some ISPs relented, and now, the government is set go all the way by forcing the ISPs to play ball. The FT reports that a draft government report says that a new agency called the "Rights Agency" will be established, and it will oversee regulations forcing ISPs to inform customers who download copyrighted material that they're breaking the law, and keep tabs on their downloading activity, and turn these records over to record labels or other groups who get a court order for them. Apparently the government took these steps because the labels and ISPs couldn't come to an agreement on how to deal with file-sharing, and says its goal is to get the industries to share responsibility. It's not clear why the British government saw the need to intervene here, and when it says "share responsibility", it's not at all clear what it's asking the music business do to. To the contrary, all these regulations seem to do is put responsibility on ISPs to support the record labels' foundering business model. Will the British government take similar steps to protect all of the country's other failing businesses? Or do the record labels, for some reason, deserve this special treatment?

Filed Under: copyright, isps, piracy, regulations, uk

Behavioral Advertisers Try To Come Up With Code Of Conduct Before FTC Writes One For Them

from the self-regulation dept

While the US Congress came down hard on NebuAd for its "behavioral targeting" ad program that would be used by ISPs to track everywhere you surfed and toss up relevant ads based on overall surfing activity, the FTC was a lot more hands-off. Instead, it simply suggested that the industry figure out a way to self-regulate before the FTC felt the need to step in. So, of course, they're now trying to work out guidelines for behavioral advertising. While I tend to be against putting in place gov't regulation where there's no evidence that it's necessary, I always find industries claiming that they'll "self-regulate" amusing. It's hard to see them coming up with guidelines that will satisfy people who believe their privacy is being violated. About the only way to do that would be to make such a service entirely opt-in -- and that seems unlikely (at best).

Filed Under: behavioral ads, clickstream tracking, regulations