Keen on Media - Andrew Keen interviews Richard Bennett on Net Neutrality

Who isn't confused by the byzantine complexities of the network neutrality debate? Richard Bennett (bennett.com/), long time network maven and fellow of the Information Technology and Innovation Foundation (ITIF), is one of the few experts able to cut through confusion and present the net neutrality debate both accurately and simply. So we caught up with Bennett in Washington DC this week to get his take on where we are and where we are going with net neutrality.

 

Richard Bennett from andrewkeen on Vimeo.

Arts + Labs advisor Andrew Keen weighs in on the tug-o'-war between Amazon and Macmillan over e-book pricing:

"The problem, of course, is that both sides are wrong. There is no good and evil dog in this fight, no scripted, morally suitable ending. Rather than a movie, this is capitalism, an economic system that rewards the strong and punishes the weak. The truth is that Amazon and Macmillan are both way beyond good and evil. They are both smart companies trying to maximize their commercial power in the new digital economy by controlling the terms of trade in the e-book market."

Read the complete article here.

Arts + Labs advisor Andrew Keen talks about the ludicrous comparisons between the fight for Internet freedom and living under actual oppression, such as in China:

Free Press used -- or should I say, abused -- the speech to launch a ridiculous attack on American companies. Explicitly comparing American phone and cable corporations with repressive overseas regimes in Iran and China, Free Press Executive Director Josh Silver conflated the network neutrality debate in the U.S. to the struggle for human rights in the rest of the world.

"Our moral authority as a world leader stems from our vibrant democracy, which is predicated on the openness of civic communication. Network Neutrality means no corporate censorship and no government censorship," Silver said yesterday, echoing the neo-Marxist critique of mainstream media by Free Press co-founder Robert McChesney. "How can we encourage freedom abroad when it has not been defended in our own communications infrastructure? Without badly needed U.S. government action to maintain freedom on the Internet, our great democracy is at risk."

No, this isn't an early April Fool's joke. Silver really did argue that "our great democracy" is at risk because some American cable and telecom companies -- as well as many writers, filmmakers, musicians and other creative artists -- want the option of additional services. Yes, Silver really did conflate the bloody repression of anti-government individuals in Iran and China with the possibility that American access providers could give consumers more choices."

Read the complete article at The Hill

Arts+Labs advisor Andrew Keen comments on the opponents of "TV Everywhere", and explains that they are just writing another chapter in an ever-expanding book of conspiracy theories:

"Some people don't like TV Everywhere, Comcast's and Time Warner's plan to bring cable TV to the Web.  They are just paranoid.

Allow me to explain. In his 1964 Harper's Magazine essay "The Paranoid Style in American Politics", Columbia University historian Richard Hofstadter argued that American politics has often been a stage for excessively conspiratorial and suspicious minds from both the left and the right. What disturbed Hofstadter most of all was the sanity of the paranoid. "It is the use of paranoid modes of expression by more or less normal people that make the phenomenon significant," he explained. By infecting normal people, Hoftstadter worried, the paranoid style had made conspiratorial fantasy a troublingly recurrent feature of American political culture."

Read the entire article at TechCrunch

Rick Carnes, President of the Songwriters Guild of America, responds to Free Press over their reflexive opposition to new business models that allow creators to protect and sell their content.

In an article yesterday in the Washington Post (Monday, January 4, 2010), Free Press and other public advocacy groups called for an anti-trust probe into TV Everywhere.

For those who haven't heard, TV Everywhere is Time Warner's authentication system whereby certain premium content would be available to subscribers. In other words, you can take your home cable subscription online.

Consumers have been waiting a long time for this. Access to premium content whenever and wherever they want it has been a sort of digital Holy Grail.  To date, lack of access to some premium content has routinely been cited as an excuse for the fact that the vast amount of music and movie content is illegally downloaded using P2P services. With the advent of new and exciting services like Hulu, Vevo, and now, TV Everywhere, the chance to view and listen to the very best content legally is here. No more excuses.

That is why the protests by Free Press and others against TV Everywhere are so confounding to a Songwriter like myself. These groups allege "collusion" to "keep video content behind a subscription-based pay wall."

That 'Pay-Wall' always seems to be the problem for these groups. They want it all, they want it now, and they want it for free. But I've never written a free song. Every one cost me something: a couple of years without being able to heat my house; a future hanging by a guitar string; no health insurance; no pension; writer's block; and the occasional broken heart. I always kept coming back for more because I knew that if I put the right words and music together then I could get paid enough to make it all worthwhile.

Without that 'Pay Wall' I can't make enough to afford to keep writing. No one pays for a ticket when there are no 'Pay Walls' keeping them out of the concert. Creators should not have to ask permission to innovate and earn fair compensation by selling our work.

The public advocacy groups are so concerned about anyone becoming a content 'Gatekeeper' (even with their own content!) on the internet that they are willing to limit the freedom of creators in favor of an internet full of gate crashers.

On February 8, 2005 (commenting on the Grokster decision) in an interview for CNet, Gigi Sohn of Public Knowledge wrote, "Public Knowledge believes that online content stores that are easy to use, reasonably priced, permit flexible uses and have large catalogs will win consumers' hearts and pocketbooks, and prove once again that technological development is better left to the marketplace."

Five years later, TV Everywhere sounds a lot like an attempt to create that reasonably priced, flexible use, large catalog, content delivery system.

But it isn't free, so now the Public advocacy groups are against it.

Is that 'Pay Wall' the only real problem for these Groups? If not, then they need to stop giving mere lip-service to the idea that Creators need to be compensated and make some concrete, workable proposals about how that compensation system would work for those of us in the real world.

Just saying no to everything, or Everywhere TV, isn't helping to solve the problem.

The Arts+Labs New Media, New Networks policy forum is here. (Recorded Oct. 29th, 2009)

New Media, New Networks Presented by Arts + Labs and GSPM's Institute for Politics, Democracy and the Internet from GSPM on Vimeo.

By Arts+Labs Co-Chairs Mike McCurry & Mark McKinnon

Late yesterday, Google and Arts+Labs member Verizon issued a joint statement ("Finding Common Ground on an Open Internet") by Verizon Wireless CEO Lowell McAdam and Google CEO Eric Schmidt.  While significant policy differences remain, Verizon and Google agreed that there is much more that unites us than separates us. AT&T, another Arts+Labs member, echoed that sentiment this afternoon suggesting that the FCC has allayed a number of its concerns in its adoption of draft rules regarding the preservation of a free and open Internet, and expressing hope that the possibility of consensus within the Internet industry on key net neutrality issues will inform the FCC's rulemaking process going forward. There are many important points throughout the Google/Verizon joint statement, but we'll highlight the central areas of agreement.

After noting that the key factors driving innovation on the web are the common programming language and private investment to improve infrastructure, Google and Verizon list their areas of agreement.

1. "[U]sers should continue to have the final say about their web experience, from the networks and software they use, to the hardware they plug in to the Internet and the services they access online."
2. "[A]dvanced and open networks are essential to the future development of the Web", as are "Policies that continue to provide incentives for investment and innovation..."
3. [T]he FCC's existing wireline broadband principles make clear that users are in charge of all aspects of their Internet experience--from access to apps and content" and the FCC should "establish that these existing principles are enforceable, and implement them on a case-by-case basis."
4. "[F]lexibility in government policy is key" and we need to avoid "overly detailed rules" that attempt "to predict every possible scenario and address every possible concern" because it "can have unintended consequences."
5. "[B]roadband network providers should have the flexibility to manage their networks to deal with issues like traffic congestion, spam, "malware" and denial of service attacks, as well as other threats that may emerge in the future -- so long as they do it reasonably, consistent with their customers' preferences, and don't unreasonably discriminate in ways that either harm users or are anti-competitive. They should also be free to offer managed network services, such as IP television."
6. "[T]ransparency is a must. Chairman Genachowski has proposed adding this principle to the FCC's guidelines, and we both support this step. All providers of broadband access, services and applications should provide their customers with clear information about their offerings."
   

Arts+Labs is enouraged to see this sign of convergence around some of the central principles we have advocated. This is clear evidence that the rhetoric that FTC Chairman Jon Leobowitz referred to as "dystopian nightmares" is now fading and being replaced with a serious, rational policy discussion among stakeholders and policymakers. In fact, Chairman Leibowitz' May 2009 remarks now seem like a good description of where we are at today.

"We believe consumers need to have notice and consent about what they are getting. So it is very, very important that these providers tell consumers now about the speed that they are getting and whether they are making any types of management decisions in terms of the network."

He added that "broadband is a deregulated product. That's good.  We like deregulation generally."

We believe this recognition by Google that we all have a critically important role to play in developing the smart, sophisticated Internet of the future is a positive sign that the FCC's existing policy framework is solid and our focus going forward should be on defining transparency, managed services and the role of wireless networks.

Arts+Labs is hopeful that we continue to see this emerging consensus around FCC guidelines that enable everybody - network, application, service and content providers - to give consumers more choices and better products. Smarter networks enable content and application providers to deliver better products and services to consumers.  Better products and applications increase the demand for better, faster and smarter networks.  These outcomes work well for consumers, providers and the public interest.

The key will be flexibility in government policymaking, as at least 3 of the key stakeholders have noted in the past 24 hours.  Rigid rules and regulation will thwart the innovation and creativity that makes the Internet so vital.  We hope the FCC will move forward in that spirit, and we similarly hope that other participants in the debate will resist any new rules that would deprive operators of the flexibility necessary for reasonable and effective network management in order to meet users' needs.
 
The role of the FCC is not to limit our ability to innovate and evolve, but to facilitate our ability to innovate and evolve together.  We welcome policies that accomplish that goal.

- Mike McCurry and Mark McKinnon

In response to FCC Chairman Julius Genachowski's remarks on Net Neutrality today, Arts+Labs released the following statement.

Arts+Labs has long supported the FCC's four principles and is encouraged by FCC Chairman Genachowski's remarks today that any net neutrality principles will be well-crafted to ensure the flexibility of content owners, networks and application providers to improve the consumer's web experience rather than limiting it.

We applaud the Chairman's recognition of the importance of protecting against the unlawful distribution of copyrighted works and are likewise encouraged by his acknowledgement that managed network services can be an important part of an innovative and robust Internet ecosystem.

We look forward to working with the FCC in the months ahead as it crafts new principles that ensure the flexibility of all Internet players to explore new ways of delivering quality legal content to consumers.

I haven't been able to get my hands on a review copy of Chris Anderson's new book Free: The Future of a Radical Price, so I'll pass on making any commentary about its contents, but I do want to point something out that I found interesting in Mike Masnick's review of the book at Techdirt.

Mike discusses the various ways in which "free" can be sustainable, including bundling, cross-subsidizing, and other typical solutions to goods with a declining marginal cost.  But he also mentions non-monetary payment, which Anderson apparently talks about a bit in the book:

You can pay people to write -- just as Encyclopaedia Britannica does. Or you can get other people to write for non-monetary rewards -- as Wikipedia does. The latter is a lot more efficient a solution, and the difference in productivity and output is quite evident. It's not saying that there is no business in paying people to write, but it's a very different business than the indirect business model, and it's the economic efficiencies that come into play.

Money, at times, is a transactional lubricant. It helps us make transactions faster than bartering three pigs for two trees, a goat and a bushel of corn. At other times, though, money can be friction. It can limit transactional effectiveness by acting as a kind of crutch. That's where non-monetary benefits can suffice (or do a much better job) in rewarding people for their actions. In those scenarios money gets in the way and actually makes a transaction less efficient.

Fair enough.

But what I found interesting is that at the end of the post, Mike addresses the accusations of plagiarism that have swirled around the book and concludes, "If Chris can take the works of others and make it into something more valuable, aren't we all better off because of it?"  We very well may be.

But even if building on someone else's work is a net good and carries a price tag of $0.00, there is a customary form of non-monetary payment in formal writing --the kind of payment that is critical to Mike's and Anderson's arguments.  That payment is proper attribution.  Academics have standardized formats for attribution; bloggers offer "hat tips" to attribute sources and ideas; and twitterers "retweet" clever or insightful comments to credit the author: attribution is the "transactional lubricant" that rewards good ideas in written work.

Mike says he "would have preferred it if that such mistakes in attribution did not happen, mainly because it's a distraction, but the issue is a minor one." He also says, "I don't think it takes away from the quality of the overall work at all."

But the very opposite should be true if we accept the idea that non-monetary payment is the best way to compensate authors for the use of their words and ideas.  The book is certainly still valuable if for no other reason than that it sheds light on many of the difficult business decisions that face content creators, but it should definitely weigh in our assessment that the author doesn't recognize a real-world application of the very concept he espouses. 

What's the future of music distribution? The answer seems to be a resounding, "Who the heck knows?" But there is certainly a growing number of business models on the table, giving consumers unprecedented choice.

One of those options is the new Napster, which WebProNews' Bruce Houghton reviewed last week:

I've spent some time on the new Napster service over the last few days, and aside from a less than intuitive interface, I can't find much to dislike.  At just $5 a month for unlimited streaming of a deep catalog along with 5 mp3's monthly, the service is effectively free.  And if I'm in Napster previewing a track or album (and since they've already got my credit card), why not just buy it there instead of jumping over to Amazon or iTunes? Reports are that Napster got a special deal on streaming licenses from the labels in part because they tied listening so closely to purchase.

Houghton thinks "there's an audience for the new $5 model, particularly for those comfortable with the Napster and parent Best Buy brands."  But it isn't the only game in town.

Also last week, Saul Hansell at the New York Times' Bits Blog talked to Tom DeVesto, CEO of luxury radio maker Tivoli Audio.  DeVesto said that there's a substantial market for music consumers who don't want to fiddle around with gadgets or playlists:

Mr. DeVesto is building his products mainly around traditional radio stations that have online streams. I asked about custom radio services like Pandora. He said that Tivoli has talked to Pandora, but said they hadn't been able to work out an economic deal. The displays on Tivoli devices can't display advertising. And users, he argued, won't want to hear audio ads, nor will they pay a fee. "Pandora with commercials is not Pandora," he said.

Hansell says otherwise, that users might not mind the ads; but he also says, "This is the right debate. Most people are in fact looking for the easiest way to make music they like appear, just like they were switching on a radio."

Which leads to a third music distribution model: satellite radio.  Although XM/Sirius may have had a bit of a head start on some of the newer online options, the company will soon be facing a challenge: higher subscription rates, as royalty rates agreed upon in 2007 are set to rise in August.  This could spell big trouble for the company, especially given the proliferation of online options. Technologizer explains:

Worse yet, this fee will increase by .5% per year through 2012. Thus it will be at least $2.10 in 2010, $2.21 in 2011, and and $2.32 in 2012. So much for those rate freezes eh? This is really bad for Sirius XM. The Internets are flooded with consumer complaints about the service post-merger, and many are looking for a reason to drop sat radio like a rock. I don't see how the company doesn't lose more customers over this. The company better get more responsive to programming complaints or there may be big trouble in sat radio-land.

Who knows which of these models or companies--among the scores of other options out there--will prevail.  But one thing is for sure: consumers are in the drivers seat in the digital music market, and they aren't being shy about voicing their opinions.

UPDATE: Carl Longino at Techdirt also weighs in on the Internet radio aspect and ties in the troubles facing satellite radio.