Archive for August, 2007

Regulatory Information Friction

Tuesday, August 7th, 2007

Information is the gold standard of an economic public good, but here we mean good as in trading-good rather than the black and white of good-vs-evil.  There are plenty of examples (personal information, credit card numbers, passwords, trade secrets) where the flow of information drifts quickly into the gray areas.  The physical world used to be a lot more helpful in keeping information flows in check; the clay tablets got broken, the papers could be burnt, the walls contained the whispers.

There is nothing inherently immoral about creating regulatory barriers to increase the friction of information flows.  We do this a lot: copyright, patent rights, privacy laws, gambling, pornography, restrictions on free speech, digital rights management.  Questions about what we want from such regulatory mechanisms do, of course, need to be balanced off against questions about what can be effectively implemented.

Recently in my town private emails between some town employees were publicly revealed.  Many people seem to feel that these emails are should be public record since government mail servers were involved in the exchanges.  My reaction: “Wait till it happens to you.”  This lack of sympathy for other people’s privacy seems widespread.   Along these same lines I’m quite quite sympathetic to the lame attempt of these workers to limit the extent that workplace monitoring has on their privacy.

The means they chose is bogus, since it’s not implementable; but I’m entirely comfortable with the idea what we need to find ways to limit the flows of this torrent of information we are creating which enables pervasive monitoring of our every moment and action.  I’m not terribly sanguine that we can find such regulatory frames; but we should be looking hard.  That each time somebody attempts to find one we all make fun of them isn’t really terribly helpful.

Early Patent Pooling

Sunday, August 5th, 2007

My recieved wisdom is that patent pooling was invented to solve a deadlock problem.  As I understand the story the sewing machine makers all acquired assorted patents during the early years.  Then in the 1850s they sued each other.  The courts forced them all to stop production bringing the entire industry to a halt. Shortly after they all all gathered together and invented the patent pool.  (This is a half a century before such activity would raise serious antitrust questions.)

Dan Cohen notes that the Shaker’s also pooled their patents.  Of course the two cases aren’t quite the same since those religious communities are not natural competitors while the sewing machine manufactures are.

I wonder which came first?  Certainly the idea that your theological kin form a club, with lower cost access to various club goods is very old.

The Fruit of the Small Government Movement

Sunday, August 5th, 2007

Dad: “In spite of my personal opinion, I’ll admit this one bridge collapse is not necessarily the fruit of the small Government movement.”

Son: “Wait, when all the bridges fall down then we will have some data.”

Payments? Check

Friday, August 3rd, 2007

Amazon appears to be the firm doing the most sophisticated job of engineering an instance of the new species of operating system. They just released the API for the payment component. This component weighs in at 260 pages.

Some of what they have put forward, e.g. the historical pricing or the access to Alexa data, are perfect examples of how these OS will leverage getting close to unique resources that the hub vendor has aggregated - i.e. these are vertical in the sense that they leverage unique supply side advantages.  Others like the storage and compute offerings are perfectly horizontal.  The payment’s offering, while principally horizontal, a bit of both.

Clearly some of these are more strategic than others.  I’d love to see their road map and to understand better the cross API synergy and lock-in.  I presume there are people at eBay/paypal, Google, Microsoft, and Yahoo thinking a lot about those.  If I were them I’d hope Walmart buys Amazon.
It is looking risky to be a hub vendor who just sell bandwidth, hosting, payments, what ever.  It is interesting how quickly these hubs are threatening each other’s survival.