Pluralistic: 22 Feb 2022

Today's links

The MPAA's 'You Wouldn't Steal a Car' graphic; 'a Car' has been replaced with 'the Future.'

Podcasting Part III of "The Internet Heist" (permalink)

This week on my podcast, I read the final part of "The Internet Heist," my Medium series on the copyright wars' early days, when the entertainment and tech giants tried to leverage the digital TV transition into a veto over every part of our lives.

In Part I, I described the bizarre Broadcast Flag project, where Hollywood studios and Intel colluded with a corrupt congressman (later Phrma's top lobbyist) to ban any digital product unless it had DRM and blocked free/open source software:

In Part II, I recount the failure of the Broadcast Flag (killed by a unanimous Second Circuit decision), and how the studios pivoted to "plugging the Analog Hole": mandatory kill-switches for recorders to block recording of copyrighted works:

This week's installment describes the global efforts by the studios to seize the future by creating a bizarre DRM system for the DVB digital TV standard (called CPCM), which is used in most of the world (but not the US/Canada, Mexico, or South Korea).

The centerpiece of CPCM was the "Authorized Domain," a euphemism for "a family." The creators of CPCM wanted to develop a DRM that would let you share videos within your household, but not with the world. But of course, that meant that they had to define what a real family was and then turn that definition into a technical standard.

The group – an almost all-male, all-white group of wealthy executives from some of the largest corporations on Earth – had some very weird ideas about what a "family" looked like. For example, they spent a lot of time figuring out how to support an Authorized Domain that included seat-back videos in a luxury SUV and a PVR in an overseas vacation home. But when I asked if they could support, say, a family whose parents lived in the Philippines, with one kid working construction in Qatar, another nursing in San Francisco, and a third as home help in Toronto, they called it an "edge case." Obviously, there are a lot more families that look like that than have luxury SUVs and French chalets for weekends away.

It wasn't just poor people who got the shitty end of the stick in these standards meetings. One bizarre turn came when they contemplated how to support a joint-custody arrangement whereby a child changed households every week. The system was designed to limit how often a device could be severed from one "domain" and joined to another, to prevent "content laundering." This meant that a 12 year old who went from Mom's house to Dad's every week would find her devices locked out of one or both domains.

The solution to this came from an exec at a giant software company. They explained that when their own customers tripped a fraud-detection system when entering a license key into a new installation, they were prompted to call a toll-free number to get a bypass. If you had a good explanation for why you were reusing a license key (say, you were upgrading, or reinstalling after a malware infection), the customer service rep on the other end could override the system.

Let that sink in for a moment. If you're a 12 year old girl who's been locked out of your parents' digital system, all you need to do is call a strange adult in a distant land and explain the circumstances of your parents' divorce and the resulting custody arrangement. You have to do that once a month or so, until you attain adulthood or your parents get back together.

The thing is, European law (Article 6 of the EUCD) and US law (Sec 1201 of the DMCA) makes it a crime to bypass a DRM system like CPCM. That lets these cartels act as de facto legislators: if every device has DRM, and if DRM is illegal to bypass, then doing anything prohibited by the DRM is illegal.

This is how the map becomes the territory. Rather than having to design a standard that conforms to all the different kinds of households people form out there in the world, you define a "family" in a standard and then all the families have to conform to the standard. The computer says "no," and you can't say "no" back.

Thankfully, the bad publicity and natural enmity among the coconspirators turned CPCM into a historical footnote with little uptake. But in the intervening years, mergers in entertainment, broadcasting, sports and tech have made it easier than ever for industries to conspire to constrain the lives of billions of people by coming up with private agreements about how their tech will work.

Here are the podcast episodes:

Part I:

Part II:

Part III:

And here are direct links to the MP3s (hosting courtesy of the Internet Archive; they'll host your stuff for free, forever):

Part I:

Part II:

Part III:

And here's the RSS feed for my podcast:

A black and white drawing depicting a mechanic crouched in a workshop doorway, clutching a wrench, confronting a giant, menacing robot with an American flag over one side of its chest and an old AT&T 'Death Star' logo over the other.

China hamstrings its Big Tech (permalink)

The Chinese state is continuing its crackdown on its Big Tech giants, banning the use of machine learning to set per-customer prices, control search results, or filter content. As Will Knight and Jennifer Conrad write for Wired, the regulation covers "ride-hailing, ecommerce, streaming, and social media."

This is just the latest salvo in the Chinese state's war on its biggest businesses. From the start of the pandemic, Chinese regulators kept the Chinese finance sector on a tight leash, freezing debt payments and blocking penalties, foreclosures and seizures of assets used to secure commercial debt:

Likewise, the Chinese state has created sweeping regulations for its runaway property development market:

And the predatory practices of the private tutoring market, which created an arms race among parents and deprived kids of their childhood:

All of this is hard to make sense of, from a western perspective. After all, when regulators from wealthy nations train their sights on "our" giant companies, we're told that these firms are our "national champions," who will defend us from Chinese soft power projected around the world by its own Big Tech "national champions."

What does Xi Jinping know that Nick Clegg doesn't?

Xi, unlike Clegg, remembers the lessons of recent history (Clegg would doubtless like us to forget recent history, starting with his betrayal of the Libdem voters whom he sold out when he chose to go into coalition with the Tories and then capitulated on every campaign promise he'd made).

For example, Xi surely remembers the lesson of AT&T. AT&T was a regulated US monopoly, a company that enjoyed 69 years of business-as-usual between the first official government attempt to tame it and its eventual breakup in 1982.

AT&T was the original American high-tech national champion, a company whose every grotesque abuse was "punished" via measures that created powerful allies in the US military and policing apparatus, who thereafter went to bat for the company to protect it from antitrust regulators. These alliances were key to maintaining its privileged position: by the mid-1950s, the evidence of its abuses was so glaring that the DoJ nearly broke the company up. What saved AT&T? Intercession by the Pentagon, who insisted that the US would lose the Korean War if it didn't have AT&T as a "national champion" by its side.

The myth of the "national champion" kept AT&T intact for decades longer, and was deployed with increasing frenzy, right up to the moment the company was finally split up in 1982. In the early 1980s, AT&T's shills in the business and national security "communities" hoped that Yellow Peril scare stories would keep the regulator at bay again.

They warned that the entire US tech sector was imperiled by an Asian adversary, an authoritarian state whose economic aggression against the USA was a thinly disguised continuation of its military campaign. This ruthless Asian titan had a sneaky tactic: rather than creating its own tech sector, it would steal American inventions and clone them, flooding the US and the world with cheap knockoffs.

Sound familiar? Yeah. It's amazing how easily the anti-Japan rhetoric of the 1980s can be swapped for today's anti-Chinese rhetoric.

But racist dog-whistling is the tactic of large, abusive firms, not the goal. The goal is to forestall regulation by making monopolies synonymous with the national interest ("What's good for GM is good for America"), so regulators can be smeared as traitors.

Here, it's instructive to look back at the aftermath of the AT&T breakup and the impact that had on the US tech sector. AT&T, it turned out, wasn't the national champion, it was the national bully. It had been stamping on the face of US tech for decades, suppressing anything that threatened its ability to extract monopoly rents from US businesses and individuals.

In particular, AT&T had been waging war on modems and the idea that we might use its phone lines to connect businesses and individuals to "interactive services" that wouldn't give a veto over new products to Ma Bell. Breaking up AT&T paved the way for the demilitarization of the internet, the creation of the web, and created the conditions that today's US tech giants depended on to create their empires.

Today, US Big Tech crushes technological imaginations of American individuals and businesses just as surely as the Bell System crushed networked services in the 1980s. Investors call the whole set of services dominated by Big Tech – and the services adjacent to those – "the Kill Zone" and refuse to back companies that want to go up against them.

Monopolistic firms collude to steal from advertisers and publishers:

They use spyware to discover and neutralize promising competitors before they can grow to scale:

They structure entire markets and cream off the profits of all participants:

And they use their billions to block the passage of privacy laws:

The thing is, monopolies are profitable and powerful. When major firms stop competing with one another and start conspiring instead, they can divide up the market to maximize their profits, come to agreements on which policies they want to lobby for, and then spend their monopoly gains to make those policies a reality:

AT&T wasn't ever America's national champion – the only thing AT&T championed was AT&T.

That's what Xi understands and Clegg (claims he) doesn't understand. China's tech giants aren't China's national champions, they are the champions of Tencent and Alibaba and Baidu. To the extent that Xi wants to use them to project soft power around the world, he must keep them biddable – not set them loose to grow to such power and prominence that they can capture their regulators.

Monopolies are profitable. They are swimming in money. Money is power. Power lets you buy policies. Those policies increase profitability. Lather, rise, repeat:

As I wrote this week in my Medium column, "We Should Not Endure a King: Antitrust is a political cause, not an economic one," the point of competition law is to ensure that private firms can be supervised and disciplined when they act in their shareholders' interests to the detriment of the public interest:

Xi, it turns out, is an ardent trustbuster. The Chinese state is no paragon of democracy and human rights, but some of its interventions in its tech sector are squarely aimed at ensuring tech improves its peoples' lives. For example, rules that crack down on bad security practices and attacks on interoperability:

Of course, China's dominant tech policy for decades has been to ensure that the sector help it surveil and censor the population, enabling human rights abuses at scale. Sadly, this is the only part of the Chinese tech regulatory program that the west has adopted, from America's SESTA/FOSTA to the EU Terrorism Regulation.

It is a huge mistake for democratic states to turn their tech companies into arms of the military industrial complex, preserving their scale and dominance in hopes of using it to spy and censor. It's an even bigger mistake to cede the idea of regulating industry to autocracies in the name of creating "national champions."

Big Tech – and Big Finance, other monopolies – are not the champions of the countries that birthed them. They are parasites, working their way into the halls of power and capturing their regulators. The best time to fight monopolies is before they can form. The next best time is right now.

The "national champions" people have a point: we can't afford a world where only autocracies mobilize technology to serve their national interests. But the "national champions" people are dead wrong about how to make tech serve the people. For so long as tech is too big to regulate, it will place its own interests ahead of the public interest.

(Image: Leslie Illingworth/Punch Magazine, ca 1955 (modified))

This day in history (permalink)

#15yrsago What Steve Jobs’s DRM announcement means

#5yrsago What it’s like to be spied on by Android stalkerware marketed to suspicious spouses

#1yrago What Democrats need to do: Don't just stand there, govern!

Colophon (permalink)

Currently writing:

  • Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. Friday's progress: 500 words (64956 words total).

  • Vigilant, Little Brother short story about remote invigilation. Friday's progress: 281 words (1618 words total)

  • A Little Brother short story about DIY insulin PLANNING

  • Moral Hazard, a short story for MIT Tech Review's 12 Tomorrows. FIRST DRAFT COMPLETE, ACCEPTED FOR PUBLICATION

  • Spill, a Little Brother short story about pipeline protests. FINAL DRAFT COMPLETE

  • A post-GND utopian novel, "The Lost Cause." FINISHED

  • A cyberpunk noir thriller novel, "Red Team Blues." FINISHED

Currently reading: Analogia by George Dyson.

Latest podcast: The Internet Heist (Part II)
Upcoming appearances:

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Latest book:

Upcoming books:

  • Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin, nonfiction/business/politics, Beacon Press, September 2022

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