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We have a short piece on the Business Week web site today about things to consider before storing corporate data in “the cloud,” that is, using a service such as Google or Amazon to hold your files for you. The piece got edited in a way that is a bit disappointing, since it left out one of the crucial points we wanted to make:

Who would fight a subpoena? With your data in the cloud, the cloud’s lawyers, not yours, will decide whether to resist a court order to turn over your data.

It actually seems that they ran the version they gave us for review, without incorporating any of the suggestions we made in response — for example, we pointed out that the sentences identifying the authors are ungrammatical.

One of the points of contention in a variety of ongoing controversies about regulation of Internet Service Providers is whether they would ever abuse the power they hold over who sees what. In Blown to Bits we talk about the case of Verizon denying text messaging service to Naral, a pro-choice group, because it considered Naral’s agenda “controversial.”

Today we have a silly example, but one that drives home the point that ISPs have arbitrary and unlimited authority, and where there is little or no competition in broadband services, they have the power to control what the public knows. Verizon told one Dr. Libshitz, a retired radiologist of unquestioned reputation, that he could not have DSL service because he wanted to use an identifier — his name — that contained a word on Verizon’s no-no list. A helpful employee suggested to Dr. Libshitz that he change the spelling of his name to accommodate Verizon’s decency standards. After several more telephone calls, Dr. Libshitz got his DSL connection — but only after Verizon tracked down the guy in India who could override the automated name filters.

One of the basic bottom lines of Chapter 2 of Blown to Bits is that the Orwellian nightmare of constant government surveillance through advanced technology hasn’t worked out quite that way. The government is doing it, to be sure. But so are teenagers with their GPS systems and cameras in their cell phones. So are corporations, who can boost their profit margins at tad by keeping track of the digital fingerprints we leave everywhere without thinking about it. And so are jealous husbands and suspicious mothers, who install spyware on the computers that their family members are using.

The spyware business is going mainstream now, supported by the social movement toward flexible work hours, work-at-home arrangements, and the dispersal to domestic settings of jobs like answering 800 numbers. Those social trends are a boon to parents who need to work from home, and will doubtless become even more popular now that moving the employee to the office in a gas-guzzling automobile has become even more expensive, by comparison with moving the bits representing the workload to the worker’s home. Socially useful as work-at-home may be, it has always been tainted with an odor of unprofessionalism. How is anyone to know if the worker is really working?

Last Wednesday, July 30, Sue Schellenbarger of the the Wall Street Journal reported on the trend to install software on those workers’ computers which takes screen snapshots every ten minutes or so, and logs every keystroke and web site visited. Some even take periodic webcam photos and screen outsourced call centers using voice recognition, waiting for hot-button words or just tonal indications that the call-center employee is getting angry. (Sorry, no link; it’s the WSJ. I wonder if Mr. Murdoch will change that.) Mentioned in the story are oDesk.com¬†and Working Solutions. Some expect employees to time their bathroom breaks so the clock is not running while they pee.

If you’ve never seen Chaplin’s¬†Modern Times, you should. It’s hard not to think that there will eventually be some workplace standards for stay-at-home bits workers in the way there are for assembly line workers — developed either through legislation, collective organization, or competitive pressure, as certain businesses succeed by having happier and less stressed employees.

The Higher Education Act is now at the President’s desk and is certain to be signed. The full text can be viewed here. Like most such laws that update ones previously passed, it is almost unreadable, because it is really an edit log: “change this word to that, add this sentence at the end of that paragraph,” etc.

It includes many disclosure and reporting requirements (colleges will have to include textbook costs in their online catalogs, for example). While I am all in favor of more transparency, my guess is that this will mostly result in colleges adding more clerks to satisfy the requirements, or, for colleges unable to afford more hires, conversion of educational and student-service positions into bean-counting and bean-reporting positions.

A lot of recent interest in the bill has come because of the entertainment industry’s efforts to pressure Congress into making colleges copyright enforcers on its behalf. Colleges are in a unique position — their residential students have no choice of Internet Service Providers. All the bits that students get go through the college’s connections to the Internet. Monitor and choke off illegal activity there, and students have nowhere else to get their bits.

The problem, as I noted in the Commencement issue of the Harvard Crimson, is that colleges should be the last place where communications are monitored for anything without probable cause. Students who have come to college to have new worlds opened up to them, to explore ideas and works that would have caused them shame and shunning at home, should not have every bit they are reading screened for appropriateness. That’s what we expect of Chinese universities, not American universities. If the entertainment industry (which pays a lot of the bills for many congressional campaigns) can get filtering installed on college’s networks, they will likely use that as a precedent to pressure Congress to act against other ISPs. And if the government can compel colleges to exclude this particular kind of material, it can compel colleges to keep out other kinds of bits it deems bad for the young to be consuming.

The compromise version of the Act that is at the President’s desk doesn’t mandate that colleges filter all incoming bits, only to disclose what weapons they are using to help the entertainment industry’s anti-“theft” crusade. But Congress hands the entertainment industry a different huge gift. It mandates that colleges develop plans to buy music subscription services. Here is the relevant language:

`SEC. 494. CAMPUS-BASED DIGITAL THEFT PREVENTION.

• `(a) In General- Each eligible institution participating in any program under this title shall to the extent practicable–
  `(1) make publicly available to their students and employees, the policies and procedures related to the illegal downloading and distribution of copyrighted materials required to be disclosed under section 485(a)(1)(P); and

  `(2) develop a plan for offering alternatives to illegal downloading or peer-to-peer distribution of intellectual property as well as a plan to explore technology-based deterrents to prevent such illegal activity.

Is there another area of private industry from which Congress mandates that colleges plan to buy subscription services? This section goes on to promise grants to colleges who fight the good fight against piracy. The recording and movie studios are rubbing their hands and setting up their money-changing tables right now, waiting for the colleges to line up to negotiate with them as federal law will soon demand.

Here’s a suggestion. Let’s instead pass a law requiring colleges to inspect laptops at the border of their property, the way DHS inspects laptops at the U.S. border, without probable cause. Students arriving as freshmen will have their laptops searched as they are unloaded from their parents’ cars. Same after they come back from winter break, etc. Ipods too, of course.

The reason this won’t happen is that students and their families wouldn’t stand for it. There would be face to face confrontations of a kind not seen since the draft protests of my youth.

The problem with network monitoring, and what makes it a more plausible and acceptable alternative, is that no one would see it happening. We all tend to accept intrusions that are logically equivalent to physical searches, even if we know they are happening, if we don’t see them happening.

The entertainment industry is winning in its efforts to force public and other private institutions keep its anachronistic business models alive for a few years longer. As much money as they claim to be losing, they have plenty to lobby Congress to do their bidding.

I wrote last week about Yahoo’s shutdown of its Music Store Server, thereby stranding customers who had bought music controlled by the Music Store’s digital rights management. This week, Yahoo announced that it will compensate stranded customers with coupons for replacing music tacks from Real Network’s Rhapsody, whose music is free of DRM copying restrictions.

It’s good to see Yahoo showing concern for its customers, and even better to see them offering higher-value, i.e. non-DRM, replacements. As recently as February 2007, Warner Music’s CEO was deriding the idea of non-DRM music as “completely without logic or merit.” Now DRM-free is becoming the norm for on-line music, with the growing realization that DRM is bad deal for music, not only for customers but for publishers, and also, as explained in Blown to Bits, for innovation. I expect that we’ll see the same shift in attitudes toward DRM-free video within a couple of years.

Yahoo was wise to quickly make amends to its customers, because there’s a lot more at stake for the IT industry than lost music tracks. The basic phenomenon of Yahoo’s (and earlier, Microsoft’s) announcement about shutting down DRM servers was that of leading high-tech companies offering a product that entailed a long-term commitment to maintaining a customer service, and then abandoning that commitment when the economics went sour.

What does that mean for the industry’s growing emphasis on cloud computing? After all, if you can’t count on Yahoo to keep your music available for five years, how can you count on Microsoft, Google, IBM, and others to keep your company email and documents available for … do you need to have confidence for 10 years? 20? 50? I’d be viewing these server shutdowns nervously if I were a corporate CIO faced with the option of moving to cloud computing. And I’d be thinking hard about them if I were high-tech exec eager to get into the cloud business. After all, maintaining “long term” DRM servers seemed like a great business opportunity in 2004.

The Department of Homeland Security may take your laptop at the U.S. border and remove it to an off-site location for as long as it wants. Doesn’t matter if you are a U.S. citizen. There it may examine its contents and have any text it contains translated.

WITHOUT HAVING ANY REASON TO THINK YOU HAVE DONE ANYTHING WRONG.

I love Michael Chertoff’s explanation of why border guards won’t bother with the niceties of probable cause provided for in the Fourth Amendment: “As a practical matter, travelers only go to secondary [for a more thorough examination] when there is some level of suspicion. Yet legislation locking in a particular standard for searches would have a dangerous, chilling effect as officers’ often split-second assessments are second-guessed.”

He’s right, of course. The Bill of Rights has a chilling effect on the government. That’s what it’s there for!

Not to put too fine a point on it, the Chinese government has double-crossed the International Olympic Committee. Having agreed that journalists would be given the same electronic freedoms they enjoyed at previous Olympic games, the Chinese now say they just meant they’d be given free access to that part of the Web relevant to the games themselves. And the IOC, which presumably had a chance to stand for something about press freedoms, caved. An IOC spokesman says that the IOC and the Chinese agreed that “some sensitive sites would be blocked on the basis they were not considered Games related.”

If there is a showdown on this, it will have to come from the press. I am guessing that doesn’t happen. The media have enough problems; no one wants their reporters thrown in Chinese jails.

In the meantime, the Chinese have also announced that they would increase the level of monitoring of communications out of hotel rooms. A memo to the hotels says, “In order to ensure the smooth opening of Olympic in Beijing and the Expo in Shanghai in 2010, safeguard the security of Internet network and the information thereon in the hotels . . . it is required that your company install and run the Security Management System.” Ah yes, security. In addition to those two stories (from Reuters and the LA Times, which was the first to break it), there is a story today in the NYT.

So much for the cute panda bear logos and the long-heralded opening of the new China to the West.

A couple of hints for those actually going to China. Blackberries work, and because the communication is encrypted from your handheld to the Blackberry server, you should be able to get anything you want that way. Run Google from your Blackberry and you are really using Google US, but the bits that arrive at your device are undecipherable along the path to you and are only descrambled by your handheld.

If you have a corporate server to which you can establish a VPN connection, you should be able to get unfiltered information (and send and receive unfiltered email) that way.

And finally, there is a neat tool for transporting encrypted information on your laptop. By way of background, encrypted information is indecipherable (if the encryption algorithm is industry-strength). But the very fact that you are moving or carrying what seems to be piles of random bits may tip off an eavesdropper to the fact that you are conveying or receiving secrets. That’s the advantage of steganography (discussed in Chapter 3 of Blown to Bits) — steganographically encoded data doesn’t seem to be a message at all.

Truecrypt is free software for storing information on the hard disk of your laptop that is encrypted and also steganographically hidden. It doesn’t seem to be there at all; a look at the laptop’s file system, were you compelled to show your laptop at the border, would not reveal that your hidden files even existed.

UPDATE, August 2; According to the Guardian (UK), the ban has been lifted, and the entire Internet is viewable from Beijing. Doesn’t mean they aren’t keeping track of who goes where, of course ‚Ķ

The Massachusetts legislature is considering a bill that would require registration of prepaid cell phones. Here is the beginning of the text of H 4799:

(a) Any person making a retail sale of a prepaid cell phone shall, as a precondition to the sale, obtain and photograph or photocopy one or more documents identifying the purchaser by name and providing his address. The seller shall, for each retail sale, make and keep for a period of 2 years a record which shall include, but not be limited to, the following: (1) the serial number and manufacturer of the phone; (2) the phone number assigned to the cell phone; (3) the service supplier who will supply wireless service to the phone; and (4) a copy of all documents related to the identification of the purchaser.

And of course the retailer would have to turn that information over to the state.

People with bad credit pay cash for these throwaway phones. Immigrants who don’t have papers use throwaway phones. I’ll bet teenagers who don’t want their parents to know who they are talking to buy these phones.

And no doubt drug dealers use these phones. And that is the reason this bill is coming forward–as an aid to the police.

So this is a fairly standard liberty-security issue, of the non-terror variety. It would help the police get the bad guys if they knew they could get data on anyone, good or bad.

But if cell phones, why not email accounts, which you can get without showing ID (with Gmail for example, they are free and set up from the comfort of home)? Or postage stamps–wouldn’t it help the gumshoes if they could trace a cancelled stamp back to the identity of the person who mailed it?

It reminds me of Judge Richard Posner’s view of the FISA surveillance legislation, that it “retains value as a framework for monitoring the communications of known terrorists, but it is hopeless as a framework for detecting terrorists.” What you really want is not to be able to surveil the people you already suspect are terrorists. You want to be able to surveil everyone, and just pick out, from what you learn, the bad guys from the good.

The founding fathers had been through all that, and that’s why they wrote the Fourth Amendment, which guarantees no searches without “probable cause.” As usual with these bills, the people who would be obviously disadvantaged by the loss of privacy are not everyone’s favorites, and that’s the way these bills gain plausibility. Who cares if illegal immigrants can’t get cell phones, or 15-year-olds need their parents’ approval?

But this cell phone bill feels to me like one that trades too much privacy for too little security. I say keep the information out of the hands of the government; it’s none of their business if I want to buy one of these phones.

PS. Excellent opinion piece by Tim Wu in the NYT today about broadband deployment, summarizing, as it happens, the main argument of Chapter 8.

The Los Angeles Times has a lovely example today of the law changing at a slower pace than technology, a phenomenon familiar to readers of Blown to Bits. It turns out (who knew?) that if your business provides you a cell phone, you’re supposed to keep track of personal calls so the tax man can hit you for the value of the personal expense you are avoiding by using the business’s equipment. If you don’t do that, the business is liable. The University of California at Los Angeles had to pay the IRS $239,196 in penalties this year for exactly that reason.

This law was passed in 1989, when cell phones were an expensive rarity and Congress decided they should be treated like company cars. (I became dean of the College in 1995, and even then I was about the only kid on the Harvard block who had one.) The world has changed a bit in the intervening 19 years. The government doesn’t actually make much money this way, but it could if its enforcers got geared up. (And with the declining take on gas taxes as people drive less, who knows what other revenue sources they’ll be looking to?)

Happily, there are bills in Congress to repeal this provision of the tax code. In the meantime, though, what’s an employer supposed to do? Tell all the employees to log cell phone calls to their spouses, or hope the IRS doesn’t come knocking?

The progress of Moore’s law vs. the legislative speed of the U.S. Congress. There’s no match!

This fall, Ken and I will be teaching a course in the Harvard Extension School based on our book with Hal Abelson. The course is called Life, Liberty, and Happiness After the Digital Explosion (click on the title to go to the course web site). We’re teaching it in one two-hour class every Monday 5:30-7:30. It is also going to be available as a “distance course,” so anyone anywhere could take it.

We’ve already posted the syllabus on the course web site. The course will be a ton of fun to teach. We will cover the waterfront of social and legal issues that everyone should know about. No math, either — it’s not the same as the “Quantitative Reasoning” course called Bits we teach in the spring both in the College and by distance through the Extension School.

Comments and queries welcome, either on this site or directly by email to us.