Topic: Telecom, Internet & Information Policy

More E-voting Security Flaws

There’s been a lot of e-voting news this week. A California research team released a report demonstrating serious security flaws in the touch-screen voting machines in use there. And a Florida study found that some of the previously-uncovered flaws in the voting machines in use there had not been fixed.

Meanwhile, on Capitol Hill, there have been intense negotiations under way on the Holt-Davis legislation, which would outlaw paperless voting machines and require random audits of voting results. Under the legislation, every voting system would be required to produce a voter-verified paper ballot that would be the official record in the case of a recount.

It’s far from a perfect bill. My preference would be to outlaw touch-screen voting entirely, with or without a paper trail. One of the biggest flaws in the legislation is that it will allow states to use touch-screen voting machines with cheap cash-register-style thermal printers in the 2008 and 2010. In my view, using cheap printers would be a serious mistake; thermal printers frequently jam, and the paper tapes they produce are brittle and hard to deal with. Using such cheap printers dramatically increases the danger that election officials won’t take the paper trail requirement seriously.

Crucially, the Holt-Davis bill doesn’t require states to use touch-screen voting machines at all. States may, and in my opinion should, return to using old-fashioned optical-scan paper ballots. States have been using optical-scan technology for decades, and it has far fewer security flaws than computerized voting machines.

But if states are going to have time to implement changes in time for the 2008 election, Congress needs to act quickly. It would be unfair to state officials to pass legislation in 2008, just months before the election. The Holt-Davis bill isn’t perfect, but as Lawrence Nordin and I argue in an op-ed in The Hill today, it’s a step in the right direction.

Is the NSA Above the Law?

As I report today in Ars Technica, a federal judge in California allowed continued investigations by five state regulators into allegations that AT&T has been collaborating with the National Security Agency in a massive warrantless wiretapping program.

However, the judge, Vaughn R. Walker, declined to rule on the government’s central argument, that the investigation could run afoul of the state secret privilege. On that issue, Judge Walker deferred to the Ninth Circuit, which is currently considering the case of Hepting v. AT&T, a class-action lawsuit alleging that AT&T has violated its customers’ rights by participating in the NSA program. The Electronic Frontier Foundation, which is representing the plaintiffs in the case, has secured a sworn statement from a former AT&T employee alleging that the company has allowed the NSA to build a secret facility inside its San Francisco office and diverted massive amounts of Internet and voice traffic through the room to allow the NSA to use the information as it wishes.

I’m not an expert on the legal minutia of the state secrets privilege, but the Bush administration is making what strikes me as an incredible claim: that the NSA program’s very existence (or non-existence) is a state secret, that it would be impossible to litigate such a case without revealing sensitive information about how such a program worked, and that therefore any case related to such a program must be dismissed immediately, before it reaches trial or even discovery.

It’s hard to see how this position can be reconciled with the rule of law. Americans have rights under the Fourth Amendment and the Foreign Intelligence Surveillance Act against indiscriminate domestic surveillance. But if the government can defeat all legal challenges to a program merely by designating it a state secret, it’s hard to see how those rights can ever be vindicated.

I suppose if the Bush administration can opt out of habeus corpus merely by declaring someone an enemy combatant, they can opt out of the Fourth Amendment by declaring their surveillance activities to be state secrets.

The New Face of Copyright Infringement?

Is this America’s youngest music pirate?

Under the 1998 Digital Millennium Copyright Act, copyright owners can issue so-called “takedown notices” to sites like YouTube seeking the removal of infringing material. (This is a different section of the act than the anti-circumvention provision I criticized in a policy analysis last year.) According to Ars Technica, Universal issued such a takedown notice in June against this clip because of the Prince song playing in the background.

Now Stephanie Lenz, the owner of the clip, with help from the Electronic Frontier Foundation, a digital civil liberties group, has filed a lawsuit against Universal demanding the recovery of attorney’s fees and a declaration that the file is fair use under copyright law.

I think that Lenz has an open-and-shut case that her use of the Prince song is fair, and therefore legal. But the question of whether Universal should be held responsible for issuing an erroneous takedown notice is more complicated. On the one hand, a takedown notice is a formal accusation of copyright infringement and it will often require seeking the advice of an attorney, which isn’t cheap. It’s not right for copyright holders to issue takedown notices too recklessly. On the other hand, it’s not hard to sympathize with Universal’s position. There are thousands of plainly infringing videos on YouTube, and so it’s not too surprising that in the process of issuing thousands of takedown notices they’d make a few mistakes.

This is an area that will continue to evolve rapidly, as policymakers struggle to balance the need to protect copyright against the desire not to squelch innovative new products. A site like YouTube probably couldn’t exist at all if the DMCA didn’t provide service providers a “safe harbor” against liability for the infringing activities of their customers. But some copyright holders complain that the “safe harbor” shifts too much of the burden of enforcing copyright law onto them, by requiring them to issue an individual takedown notice against every instance of copyright infringement. As we see in this case, companies sometimes make honest mistakes. Striking the appropriate balance will be an ongoing challenge for Congress and the courts.

Yochai Benkler and the Libertarian Center

If you haven’t been reading Cato Unbound this month, you should be. Brink Lindsey defends his notion of libertarian centrism from left, right, and, um, Julian.

I found Jonah Goldberg’s follow-up contribution particularly interesting. He points out that much of what was wrong with the progressive movement of the early 20th century was due to its infatuation with centralizing institutions that were ascendant at the time: the army, heavy industry, and later, large-scale scientific endeavors like the Manhattan Project. Bigness and centralization were in, and intellectuals believed that the entire country should be governed in a similarly hierarchical fashion.

Goldberg thinks liberals will just discard the economic argument for central planning and move on to another one: public health, the environment, whatever. But I wanted to point out that there are also some liberals who are adopting a more appropriately skeptical attitude toward central planning itself.

One reason to think the 21st century is going to be more libertarian than the 20th is that the defining technology of our generation, the Internet, is radically decentralizing. After a century in which our cultural and economic lives were dominated by large, vertically-integrated corporations, we’re entering an era in which decentralization and disintermediation are the dominant trends. Instead of producing components in house, they develop networks of independent suppliers, knit together by sophisticated supply chains. And instead of vertically-integrated media companies like the New York Times and NBC, we’re increasingly moving toward a world in which writers, musicians, and other creators can reach their audiences directly.

The left, which has always fancied itself the party of modernity, is already beginning to be affected by these cultural currents. No work typifies the shift better than Yochai Benkler’s The Wealth of Networks, a book about how the emergence of the Internet is reshaping the cultural landscape. What’s striking about the book is how much Benkler draws on the thought of libertarian thinkers like Smith, Hayek, and Coase in explaining how he envisions the media landscape of the 21st century. Indeed, on page 16 Benkler, who is not a libertarian by any stretch of the imagination, concedes:

My approach heavily emphasizes individual action in nonmarket relations. Much of the discussion revolves around the choice between markets and nonmarket social behavior. In much of it, the state plays no role, or is perceived as playing primarily a negative role, in a way that is alien to the progressive branches of liberal political thought. In this, it seems more of a libertarian or an anarchistic thesis than a liberal one. I do not completely discount the state, as I will explain. But I do suggest that what is special about our moment is the rising efficacy of individuals and loose, nonmarket affiliations as agents of political economy.

Benkler’s argument is too long to summarize in a blog post. You can get a taste for it in my review of Wikinomics, a book that draws heavily from Benkler’s insights. But I’ll just note the possibility that just as the technological developments of the early 20th century pushed progressive intellectuals in a socialist direction, so the emergence of decentralizing technologies like the Internet will push liberal intellectuals like Benkler in a libertarian direction.

An even more extreme example is Eben Moglen, the free software movement’s leading lawyer. He’s definitely a left-winger, and he has a lot of opinions that libertarians would not find congenial. But I find it striking how often he finds himself coming to libertarian conclusions almost despite himself. For example, check out this excerpt from a speech about the success of the free software movement:

People out there who had money to burn said: “Wait a minute. This software is good. We won’t have to burn money over it. And not only is this software good as software, these rules are good. Because they’re not about ambulance chasing. They’re not about a quick score. They’re not about holding up deep pockets. They’re about a real cooperation between people who have a lot and the people who have an idea. Why don’t we go in for that?” And within a very short period of time they had gone in for that. And that’s where we live now. In a world in which the resources of the wealthy came to us, not because we coerced them, not because we demanded, not because we taxed, but because we shared. Even with them, sharing worked better than suing or coercing. We were not afraid. We did not put up barbed wire, and so when they came to scoff, they remained to pray.

You may not share Moglen’s belief that proprietary software is inherently evil. I don’t. But as libertarians, we do have to respect the fact that he’s advanced his beliefs, and produced some great software, using entirely non-coercive means. In another era, Moglen might have been calling for the nationalization of the steel industry or the creation of a cradle-to-grave welfare state.

Instead, his policy agenda, to the extent he has one at all, is deregulatory. He believes that copyright and patent law are infringing on the freedom of programmers to do as they please with their computers, and so he wants to repeal the Digital Millennium Copyright Act and software patents. Not all libertarians would agree with those goals, but they’re a far cry from nationalizing the software industry.

Inside a Chinese Factory

Via Tom, here’s a fantastic series of posts by the guy who’s setting the Chinese supply chain to manufacture the Chumby, an Internet-enabled alarm clock. Here you can see videos of a Chinese factory floor, with workers assembling sneakers. Here is a story about the fanatical level of dedication he has seen among the workers at the factory—dozens of employees stayed at work until 3 AM while he debugged a flaw in the first run of devices, and then showed up again at 8 AM to resume assembly. And finally, here are some videos of Chinese workers doing extremely detailed work quickly and accurately.

Some peoples’ instinctive reaction to this story is no doubt to wring their hands about the exploitation of Chinese workers. It’s not hard to see why; wages are only about $0.60/hour, and the jobs are tedious. And indeed, when I was in college in the late 1990s, there were a lot of activists who did just that, agitating for the shutdown of “sweatshops” in China and elsewhere. But I think this suggests a better way to look at the situation:

The amazing part is that the Shenzhen factories were complaining that labor rates were way too high. Apparently, minimum wage for factories in other regions is much less, so they are seeing contracts migrate away from their factories and inland where labor is cheaper. Think about it–Americans complain about work going to Hong Kong, Hong Kongers complain about work going to Shenzhen, Shenzheners complain about work going inland China, and to Vietnam (apparently Vietnam is the new hotness for cheap skilled labor).

The low wages and tedious work of the early sweatshops were a temporary condition. The author reports that the minimum wage in Shenzhen has been increasing by about 30 percent per year in the last couple of years. As the workers in Shenzhen become more skilled and the companies develop better business relationships with Western companies, demand for the area’s manufacturing facilities rise. The companies expand their facilities and hire more workers, and the competition for workers then pushes up wages. And that, in turn, will lead companies to increasingly transition to more complex and lucrative activities. Firms in Shenzhen will specialize in manufacturing more and more complex products, and eventually some of them will begin designing and building their own products.

That’s what happened in postwar Japan, South Korea, and Taiwan, all of which have since achieved Western levels of affluence. The anti-globalization activists meant well, but in reality, the opportunity to become integrated with the global economy will do far more to help the average Chinese worker than anti-sweatshop laws could possibly have done.

Secrecy is Unsafe

The latest issue of Foreign Policy includes a commendable piece by Jacob Shapiro, “Strictly Confidential” (summarized; full article behind paywall).

Shapiro makes an intelligent case that opening government improves security. “When government officials curb access to information,” he writes, “they cut themselves off from the brain power and analytical skills of a huge community of scientists, engineers, and security experts who are often far better at identifying threats, weaknesses, and solutions than any government agency.” Shapiro provides a couple of examples where openness has improved security systems.

“Putting information behind lock and key does not make targets safe from attack. It leaves security analysts unable to find solutions to other weaknesses in the future. It also leaves government and industry less motivated to find safeguards of their own.”

Good stuff.

Toward Open Wireless Networks

One of the hottest issues in tech policy this year is the regulation of wireless networks. The transition to digital television is almost complete, and the FCC is planning to conduct an auction next year to determine who will get to use the old analog television spectrum once the television stations are done using it. Some scholars have argued that the FCC should impose a variety of regulations on the winner of that auction to promote competition in the market for wireless services.

I’m skeptical of this argument, but I do think the critics are right about one thing: in the long run, open networks (like the Internet) do tend to be more innovative than closed ones (like AOL). This is true for much the same reason that free markets are superior to central planning; open networks facilitate decentralized decision-making and low barriers to entry for entrepreneurs. The people who founded Netscape, Google, eBay, Yahoo, and dozens of other successful Internet businesses didn’t have to ask anyone’s permission to do so.

Right now, the wireless networks are not as open as many people in the technology industry would like. Someone wanting to create a new cell phone or a new wireless application or service has to go through a long and cumbersome negotiation process with each wireless carrier. There are good reasons to think this is slowing down the pace of innovation in the wireless market. However, the big debate is over what to do about this. Some people think the FCC should step in and mandate open access to wireless networks. For reasons I laid out in TechKnowledge last month, I think that’s a bad idea. My view is that the wireless industry is still in its infancy, and that market forces will drive carriers to gradually open their networks over time.

Last week, we saw two examples of how this might happen. First, Ed Felten, a computer science professor at Princeton, had a great post pointing out one way the iPhone could shake up the wireless marketplace:

An open system would provide more benefit overall, but most of that benefit would accrue to consumers. The carriers would rather get a big share of a small pie, than a small share of a big pie. In most markets, competition keeps this kind of thing from happening, by forcing producers to account for consumer preferences. You would expect competition to have forced the mobile networks open by now, whether the carriers liked it or not. But this hasn’t happened yet. The carriers have managed to keep control by locking customers in to long contracts and erecting barriers to the entry of new devices and applications. The system seemed to be stuck in an unstable equilibrium. All we needed was some kind of shock, to get the ball rolling downhill.

Only a company with marketing muscle, design mojo, and a world-historic Reality Distortion Field could provide the needed bump. Apple decided to try, in the hope of selling zillions of the new, more capable devices. The real significance of the iPhone, whether it succeeds or fails in the market, is that it will trigger the transition to more open networks. Once people see that a pretty good phone can be a pretty good mobile computer, they won’t settle for less anymore; and mobile networks will be pried open.

One of the issues that critics of the wireless carriers often cite is the fact that American carriers have refused to support cell phones with built-in WiFi connections, which could save consumers money by allowing them to save money on their calling plans by making free calls over the Internet. Critics charge that carriers refuse to allow that because they want to force you to make every call over their network, allowing them to soak you with per-minute usage fees. Today David Pogue has an article in the New York Times describing a new offering from T-Mobile that allows consumers to do just that: when the phone detects an Internet connection nearby, it will automatically route calls via the WiFi network, and the customer isn’t charged for the call. As Pogue points out, this is a direct result of T-Mobile’s desire to get a leg up on the competition:

Have T-Mobile’s accountants gone quietly mad? Why would they give away the farm like this?

Because T-Mobile benefits, too. Let’s face it: T-Mobile’s cellular network is not on par with, say, Verizon’s. But improving its network means spending millions of dollars on new cell towers. It’s far less expensive just to hand out free home routers.

Furthermore, every call you make via Wi-Fi is one less call clogging T-Mobile’s cellular network, further reducing the company’s need to spend on network upgrades.

T-Mobile has the smallest market share of the four national wireless carriers, so they have the least to lose and the most to gain from a shake-up of the market. As a result, they’ve proven most willing to take risks in order to gain market share. If this service proves to be a hit, as I suspect it will, it will force the larger carriers to follow suit or risk losing market share.

That’s how competition works–it steadily forces companies to offer more consumer-friendly products and services whether they like to or not. It’s frustratingly slow for people who are used to the rough-and-tumble of the promiscuously open Internet. But it’s moving in the right direction, and given the FCC’s poor track record when it comes to protecting consumers, I think it would be a mistake for Congress or federal regulators to try to “fix” it.