Category: Web/Tech

A Reader’s Dilemma

A reader, who wishes to remain anonymous and whom I shall refer to only as Jedi Knight, writes with a difficult problem:

I love your Marginal Revolution blog enough to read it every day. In fact, I check back several times a day and I’m disappointed when I find no new entries.

However, I have told no one about it. Your blog makes me appear smart and full of interesting takes on the topics of the day. If I shared with people where I get my information, people would not be anywhere near as impressed with me.

So, I have a dilemma. I should hope that your blog stays popular enough to encourage you to keep up your publishing efforts, but I don’t want to be the one who spreads the word. I can only imagine that there are many others out there like me…

Dear Jedi Knight,

First, you imagine correctly. Many readers have come to us with exactly this dilemma. How can one keep a public good private? We at MR have puzzled over this and have several suggestions. Instead of telling your friends about MR try telling strangers. Sidle up to someone on the street and whisper “Pssst, want some good econ blog? Marginal Revolution is phat.” We have found that this works well. Also, as Cowen and Tabarrok (2000) discuss, there are two strategies in the arts. Sell to a lot of people at a low price or sell to a few cognoscenti at a high price. You, Jedi Knight, are among the cognoscenti! Send cash. Or at least shop at Amazon with the MR link /marginalrevol-20.

Is file-sharing dead?

The recent RIAA lawsuits have severely blunted the practice of file-sharing. The music industry has gone after the on-line users who share copyright-protected songs. The movie industry may someday follow suit. Although the number of people prosecuted has been small, the negative publicity has caused many people to shy away from Kazaa, Grokster, and other services.

I don’t know of any good estimates of how much file-sharing has gone down in recent times. All parties to the disputes have incentives to fudge the numbers. But based on conversations and anecdotal observations, combined with written sources, I find it plausible that file-sharing has declined by at least a third.

The days of file-sharing, however, are far from over. First, a judge just ruled that the RIAA cannot petition Verizon for the names of potential file-sharers. reported as follows:

…in a strongly worded ruling, the appeals court sided with Verizon, saying a 1998 copyright law does not give copyright holders the ability to subpoena customer names from Internet providers without filing a formal lawsuit.

This ruling should come as no surprise. After all, why should the RIAA have a special right to petition Verizon for the names of potential copyright infringers? I hold some copyrights too. I and many others could petition Verizon for the information concerning various account holders. Without any legal standard of proof privacy is meaningless. More significantly, Verizon would end up swamped under the requests. Imagine various hackers and cyberpunks flooding Verizon with identity requests just to make the reporting system unworkable.

Even if this ruling is reversed, or John Doe suits prove effective in generating the names, file-sharing is likely to return in force. Anonymous networks are becoming more popular rapidly. Read the analysis of Clay Shirky. Right now users are not sure whether these networks are useful or trustworthy. But that information will spread rapidly. Within a year, we will know whether the Palestinian file-sharing network is indeed reliable. If that source of files turns out to be crooked, something else will arise to take its place.

Consider the whole problem in terms of consumer option value. File-sharers have not given up on the idea. They are waiting to see when and how they can start sharing files again. When the proper time comes, they will return in full force.

Addendum: Here is a Washington Post article on the decision. Hit and Run links to the full decision.

Will the FCC regulate Internet phone calls?

Hearings start today, here is the full story. A month ago a Federal court ruled that state governments may not regulate such calls. And the FCC traditionally has left the Internet alone. Nonetheless long-distance service over the Internet costs only a fraction of most calling plans, which threatens both telecommunications companies and government revenues from long-distance calls.

The problem has arisen, in part, because of previous regulatory decisions, most specifically access fees:

Long-distance companies now pay local companies $25 billion a year in “access charges.” The fees cover the cost of connecting long-distance customers to the local network. The long-distance companies argue they should not have to pay access charges for calls that travel over the Internet.

In other words, Internet calling is cheaper in part because the calling services do not have to pay access fees to the long distance network. Over time we can expect such accees fees to fall apart, they will prove to be neither a political nor an economic equilibrium. Here is what one industry spokesman predicts:

Nortel Networks, the Canadian telecommunications equipment maker, estimates that local telephone companies could cut their costs of running a network by 30 percent by shifting to a Internet-based network. Nortel also contends that carriers can cut their capital investment costs by 50 percent. “The market is absolutely moving in the direction of the convergence of these networks,” said Martha Bejar, president of carrier solutions at Nortel.

The bottom line: Competition will become more intense, calling will continue to become cheaper, but the long-run problem of paying for the telecommunications network will become more severe.

Buy, Eye in the Sky

For those who have nearly everything and can afford more, you can now buy your own space mission (on Ebay naturally). The offer, from SpaceDev, a real firm that sells micro-satellites, does not appear to be a hoax. Although, like space tourism, this is obviously in the early stages and something of publicity stunt it is also another important step towards the private exploration of space. For more on the offer see this item in Wired News.

What is the fair use doctrine? offers this very brief and useful summary, thanks to for the pointer. This is the best simple statement I have seen of what “fair use” is all about. Note that the fair use doctrine will increase in importance, as companies put up tougher gates around their intellectual property. Bloggers must know about fair use as well, lest they quote too freely from copyrighted material and incur legal penalties.

For this economist, the courts aren’t nearly liberal enough in interpreting fair use. I think, for instance, that rappers should be able to sample songs without clearing copyright, at least provided they are doing more than simply copying large blocks of the song verbatim. Read Robert Christgau’s account of the famous Gilbert O’Sullivan case; O’Sullivan objected when rapper Biz Markie sampled his “Alone Again, Naturally,” a transformative use if I ever heard one. Will more sampling make rap better and cheaper? Yes. Will it diminish the supply of sample-ready material? Unlikely. So why not interpret fair use more liberally in this regard?

The new replacement for Google?

A news-gathering web site that tailors the stories selected to individual users is being tested by Microsoft. Once MSN Newsbot is fully functional, Microsoft says the site will personalise results within 10 minutes of a user starting to browse.

If successful, the site is likely to be a direct rival to the highly popular Google News, which clusters information from over 4000 news sources according to topics but does not customise results.

For the full story, read here.

How might such a service work? One possible algorithm follows the model, and compares the user to what previous like-minded users have been looking for. But if I could ask for one improvement, it would not be this. My searches are so wide-ranging, so strange, and so eclectic, I am perhaps immodest enough to think I have few useful doppelgaenger [“doubles,” roughly, from the German] in this regard. I would prefer the ability to type in questions, often of a conceptual or abstract nature, and receive a ranking of relevant web sites. In short, a better version of would be most likely to draw my loyalties away from google.

Game I, man vs. machine

It is a draw, here is one account, here is a link to the moves and other background. Kasparov had a clear edge, in my view, but was unable to convert his position into victory. The computer played its typical perfect defense and Kasparov’s advantage slipped away entirely. They then settled for a draw by perpetual check.

Bottom line: This has to be heartening to the computer fans. Kasparov can’t expect many better chances to win. Three more games to go, and now the computer has white.

Addendum: Here is an easier link to the moves, with quality analysis. I would have played 21. Q x c6, more resilient than it looks, instead of Kasparov’s 21. Ng3.

Microsoft hires bounty hunters

Microsoft has put up “two $250,000 rewards, a total of $500,000, for information that leads to the arrest of the writers of two nasty computer worms — the Blaster worm and SoBig.” I am all for this as those guys sure wasted some of my time. As regular readers will know, I am also a fan of bounty hunters (see my earlier post; and my econometric paper – finding that bounty hunters reduce failure to appear rates and bring back fugitives much more succesfully than the public police).

Don’t stop at Google

Here are thirty useful Internet search tips, as pointed out by Brad DeLong, channeling Elizabeth Lane Lawley, who is in turn channeling Mary Ellen Bates.

My favorite idea is number 17:

Use to identify experts’ sites, link-rich pages. (Look at “resources” section on results page; these are “link-rich” sites on your topic.)

And let’s not forget the last suggestion:

Some searches are simply not meant to be done online.

Lynne Kiesling has moved house

Here is her new blog address, the simpler Lynne is one of the smartest and most articulate bloggers out there. Her basic focuii are energy, electricity, environment, telecom, and infrastructure more generally, but she covers many areas of interest. Here is one of her recent posts about the FCC and media deregulation.

Speaking of the FCC, I was quite taken by this quotation from Clay Shirky:

Yesterday, the FCC adjusted the restrictions on media ownership, allowing newspapers to own TV stations, and raising the ownership limitations on broadcast TV networks by 10%, to 45% from 35%. It’s not clear whether the effects of the ruling will be catastrophic or relatively unimportant, and there are smart people on both sides of that question. It is also unclear what effect the internet had on the FCC’s ruling, or what role it will play now.

What is clear, however, is a lesson from the weblog world: inequality is a natural component of media. For people arguing about an ideal media landscape, the tradeoffs are clear: Diverse. Free. Equal. Pick two.

I’ll jettison equal. I’d rather have the chance to learn from Lynne’s blog, whether or not it has the drawing power of network television. And on the numerical comparison, well, we can only keep our fingers crossed.