Blown To Bits

Archive for April, 2010

The (North Carolina) Government Wants to Know What You Bought

Tuesday, April 20th, 2010 by Harry Lewis

Massachusetts has started to get a bit more insistent about collecting MA sales taxes on goods purchased out of state–including over the Internet. This year’s return invited me either to list the actual amount paid and pay the Massachusetts rate on the total, or to pay a “safe harbor” tax on my income. Pay the safe harbor rate and I am exempt from harassment for my out of state purchases, even if I get audited and it turns out I would have owed the state much more based on my actual purchases.

I found this annoying. But actually it seems to me correct. I don’t imagine people were paying those taxes until the safe harbor was introduced, and if I don’t like the safe harbor, I can keep track of all my Amazon purchases and whatnot and pay the 6.25% on those. I can object to the whole notion that stuff I buy out of state and bring or have shipped in state should be taxed, but until somebody changes the rules, that is the way the rules read.

Now the state of North Carolina has done Massachusetts one better and has handed its comparable tax collection problem to Big Brother. The state has demanded that Amazon turn over to its tax authorities detailed, itemized records of everything shipped to anybody in the state. (Amazon has no business address in North Carolina. Only customers are there.)

That’s a lot of data, but of course that’s not the problem. Amazon has it, not just for billing purposes but so it can pitch you different suggestions on rainy Tuesday nights if it notices that you particularly like ordering steamy romances on evenings like that. The granularity of the data is extremely fine, and the state wants it all. Amazon provided some anonymized information — not sure I am happy even with that, given how easily apparently anonymized data can be re-identified — but it doesn’t matter, because the state was not content with that. It wants names and addresses.

Amazon is resisting, thank goodness, on First Amendment grounds–citing individuals’ right to read anonymously. But aren’t there Fourth Amendment issues, too? Given constitutional guarantees of security against unreasonable searches, what possible justification could the government have for demanding to know the shoppings lists of ordinary citizens, not under suspicion of anything?

The Forces Align Against Anonymity

Saturday, April 17th, 2010 by Harry Lewis

Stories on successive days in the New York Times make me wonder if there is any hope of preserving anonymity on the Internet. The forces of security and commerce are lining up to end it, and I am not feeling a lot of pushback.

On Friday, there was some apparently happy news: At Internet Conference, Signs of Agreement Appear Between U.S. and Russia. It takes awhile to learn the nature of the common ground between American and Russian cybersecurity experts.

“Anonymity is an invitation to criminals,” General Miroshnikov said.

Mr. Baker agreed, saying, “Anonymity is the fundamental problem we face in cyberspace.”

And then today, there is a stunning report on refinements in the business of discount coupons. The coupons you print off the Internet look generic, but the bar code may have everything but your social security number in it — even including your IP# and the search terms you used to get to the site where you printed the coupon. This information enables aggregation of extremely fine-grained information about your shopping habits — and adjustment of what offers get extended to which customers.

“When someone joins a fan club, the user’s Facebook ID becomes visible to the merchandiser,” Jonathan Treiber, RevTrax’s co-founder, said. “We take that and embed it in a bar code or promotion code.”

“When the consumer redeems the offer in store, we can track it back, in this case, not to the Google search term but to the actual Facebook user ID that was signing up,” he said. Although Facebook does not signal that Amy Smith responded to a given ad, Filene’s could look up the user ID connected to the coupon and “do some more manual-type research — you could easily see your sex, your location and what you’re interested in,” Mr. Treiber said. (Mr. O’Neil said Filene’s did not do this at the moment.) …

“Over time,” Mr. Treiber said, “we’ll be able to do much better profiling around certain I.P. addresses, to say, hey, this I.P. address is showing a proclivity for printing clothing apparel coupons and is really only responding to coupons greater than 20 percent off.”

Is this the Internet we want?

Another Monkeywrench in the Google Books Settlement

Thursday, April 8th, 2010 by Harry Lewis

Representatives of photographers have filed suit against Google for digitizing their photos without permission, in the course of scanning books to create the Google Books library. For a long time, the photographers (and several other groups, whom I lump together as “the photographers”) have been annoyed that they aren’t getting any of the revenues from the settlement; they told the court that in no uncertain terms. The Authors and Publishers, in the course of working out their proposed settlement with Google, completely ignored them, and they are now following through on their threat to make trouble.

The interesting thing about this suit is that the complaint is not that the photographers are being deprived of revenues. In fact Google blacks out the copyrighted photos in the digitized books.

The photographers are complaining that the very act of scanning the books creates an illegal copy of the photographs, even if it is never displayed to a Google Books user. Kind of  logical, or would be in a looking glass world.

In its suit, p. 20, the photographers make quite modest demands:

Hmm. $150K per image, times how many images in how many books? You do the math.

James Grimmelmann has a quick analysis of the merits. Whither now the settlement?

The FCC Can’t Regulate the Internet

Tuesday, April 6th, 2010 by Harry Lewis

When the FCC landed on Comcast for slowing Bittorrent traffic to a crawl–in essence, discouraging people from watching Internet movies, and steering them to their Comcast Cable TV channels instead–Comcast took the FCC to court. Comcast protested on three grounds, but the basic ground was that the FCC had no authority to tell Comcast to do anything with its Internet service. A panel of three judges has unanimously ruled that Comcast is correct (and therefore didn’t bother with Comcast’s arguments #2 and #3). Public Knowledge has a good explanation of the decision and where it leaves us.

I am disappointed, but I can’t say I am surprised. Congress did not anticipate the Internet when it made telephone regulations, just at it didn’t anticipate the telephone or the radio when it made telegraph regulations. So if there is going to be net neutrality, it appears Congress will have to act. That was on Obama’s campaign agenda, but regulation of anything is not an easy sell in Washington.

Yet it is clear that monopolies are a bad idea, and the business community, except for Verizon, Comcast, and a few other biggies, should support the free flow of bits over the Internet pipes. My previous post is remarkably relevant on this point. Listen to Gardiner Hubbard’s description from 125 years ago of the fate of one small business bullied by the Western Union monopoly:

A few years ago a man started a news bureau in Cincinnati. A correspondent in New-York filed the market reports each morning and the Cincinnati gentleman sold the information to customers. The Western Union asked him to sell out to them and he refused; thereupon his messages were taken away from the “through” wire and sent by a “way” wire. The difference in time was an hour, and the man was ruined. (New York Times, February 8, 1883)

As far as I can see, there is no reason why Comcast couldn’t do exactly the same thing tomorrow. Plus ça change, plus c’est la même chose.

HWCKL #4: Carrier Monopolies

Saturday, April 3rd, 2010 by Harry Lewis

According to a recent Business Week story, government agencies are starting to get worried about the possibility that Comcast may buy NBC Universal.

At least five states are involved in the U.S. antitrust review of cable operator Comcast Corp.’s plan to acquire NBC Universal, two people with knowledge of the process said. Florida has started its own query.

Attorneys general in five states — New York, California, Florida, Oregon and Washington — have joined phone interviews led by U.S. Justice Department officials, said one person who participated and sought anonymity because the call was private.

As Susan Crawford explains, the FCC itself acknowledges that once the dust has settled on its 100-squared broadband plan, the number of broadband carriers serving most parts of the United States will be ONE. Information monopolies are never a good idea, and if it wasn’t bad enough to contemplate an unregulated industry that could control what information flows through the information pipes, think what it would be like if the same companies owned the content too.

Actually, you don’t have to imagine these scenarios. You can go back to this 1883 New York Times story to read how it worked when all the information had to flow through the Western Union telegraph wires. Western Union bullied those on whom it was dependent. This comes from a description of Gardiner G. Hubbard before Congress. Hubbard, whose daughter was deaf, would under-write Alexander Graham Bell’s development of the telephone — and became Bell’s father-in-law. The story sounds to me stunningly modern. An excerpt: