Archive for June, 2009

Netgear Open Source Router

Netgear Open Source Router (<- Hello Michael?)

I am trying to anticipate what I will need to have a wired gigabit network set up for a small office.  I can find gigabit switches, but gigabit routers don’t seem to be promoted.  Anyways, when looking I came across some stuff on Netgear’s site specifically advertising open source as a feature, notably the Open Source Router but also the “4-Port Web Safe Router with 10/100 Mbps Switch RP614“.   How nice to see mainstream vendors now selling open source as a benefit.   Now more glad I bought one of their switches yesterday.

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Lessig and Leveraging FLOSS For Ethical Copyright

Lessig and Leveraging FLOSS For Ethical Copyright

(Does the academy need a different approach?)

Brendan Scott

I went to the Copyright Future: Copyright Freedom Conference that QUT put on at the end of May at Old Parliament House.   The conference included a lot of interesting talks by a lot of academics in the copyright sphere, mainly concerned with the reform of copyright law.   Disappointingly, the technology infrastructure was not open and few (if any?) of the talks were presented using open tools (even the pdf of the the conference program has issues with openness[1])…

One of those giving a talk was Prof.  Lawrence Lessig.  His talk was very well polished.  He has clearly given it often (the slides were timed to  be synchronised to the word with what he was saying – many slides had literally one word on them and flashed up as he said that word mid-sentence).  The arc of the talk was that copyright prevents legitimate, amateur use of works – use which is not only sensible, but was historically permitted.  He noted that the copyright law effectively classifies our children as terrorists.  He compared copyright to prohibition, and noted not only that prohibition was a failed exercise, but that it had harmful effects on civil liberties (eg wire taps were legal without a warrant for several decades in the US).

Prof. Lessig’s key message was that, while copyright is bad, it should not be abolished, but should be reformed.  In his view, private amateur uses of works should be legalised, while public professional uses should continue to be regulated, with a middle ground for public amateur and private professional uses.

My main concern with his talk, and, indeed, with the whole of the conference, was that there was a presumption that academic criticism of copyright was capable of effecting change in the copyright law.   Having witnessed first hand the irrelevance of logical or economic arguments in the face of the immense power that copyright cartels have, this presumption is one in which I have little faith.   The problem is not one of law, but one of power – power that is out of control.   Prof. Lessig does seem to be aware of this, given his stated intention to work in the future on institutional corruption.

For similar reasons I have little faith in the presumption that the digital world will render copyright obsolete.   If that was the case copyright was obsolete ten, if not twenty, years ago when the VCR did the Boston Strangler on “the American film producer and the American public” (which, as victims, nevertheless seem to be in remarkably good shape).  Despite its obsolesence, and despite the enormous costs from its harmful effects on individual action and innovation, copyright has shown no signs of moderating.  On the contrary, it has become more virulent.  This virulence is driven by political power, and an ideological blindness to the overall harm that copyright causes to authors, property and democracy.

The main issue is not, therefore, pointing out the manifold unethical, uneconomic or plain stupid aspects of copyright law.  Such an endeavour could support an untold number of academic careers – and would have as much practical impact as has criticism over the past 200 years.    Moreover, there is an internal logic to any monopoly which permits the above market profits from the monopoly to be used to further increase the scope of the monopoly and therefore the monopoly profits.  In other words monopolies like the copyright monopoly are both self perpetuating and self expanding.  Any change to the copyright law to align with reasonable, ethical civil society will be short lived because of this internal logic.  Indeed, the period between 1980 and today was a period of extensive deregulation of almost every sector of the economy.  This period aligns closely with a period of extensive legislative monopolisation of the copyright sector.  During the precisely the same period in which, for example, telecommunications monopolies were being forced to provide access to competitors at long run incremental cost (or some variation), copyright monopolies were actively encouraged to exploit those monopolies and have been further insulated from legitimate competition.  As an unfortuanate by-product copyright has had an increasingly corrosive effect on democracy  and property law – the French Hadopi legislation is but the most recent affront.

Rather, the main issue is in how to moderate the overwhelming power that a handful of cartels have and exercise.   In my view a good candidate to effect this is by moderating their funding.   This can be achieved by moderating their market.   The free, libre and open source software movement provides a case study in how this could be achieved.  For the most part, FLOSS does not fight copyright law.  There are some issues, such as laws against interoperability and the DMCA related issues (which are non-copyright laws against freedom inserted into the copyright act), but by and large  FLOSS accepts the copyright law as it is, and tries to provide an overlay on the law to convert it from being an unethical and inefficient system into an efficient, more ethical one (and moreover, one which actually helps authors, creators and the economy).  Merely by providing a viable alternative, FLOSS brings competition into the market and thereby disciplines it.  As FLOSS grows its effects become more widespread and it becomes stronger at self-perpetuating.  In the long run the logic of the market is that FLOSS will dominate most market segments, even in the face of closed competition or closed, monopolist incumbents.[2]

In my opinion, much of FLOSS’s success can be put at the feet of the fact that it creates a property-like market for intellectual output.  This is to be contrasted with Old Copyright’s Feudal-like market.  This property-like market of FLOSS increases the rate at which innovations are produced (as it permits individual actors to pursue their own interest based on the information known to them) as well as the velocity at which innovations are communicated through, and implemented by the market.   This is to be contrasted with copyright’s Feudal structure – in which any actor must continually beg permission of an overlord before doing anything new.

Notes:

[1] Ie: Not accessible with Linux/FF (no flash).   I haven’t signed up for the site (why I should have to sign up in order to access a conference program is not clear to me) but maybe it might be more “open” if I did so.

[2] In theory FLOSS is at a disadvantage in niche markets – as there is a smaller contributor pool.  However, empirically it is those niche markets where FLOSS has succeeded, and has had a harder time in more general markets (probably because of the value of marketing and incumbency).   In general markets where FLOSS has succeeded (eg web servers, CMSs) it is difficult to see how any non-FLOSS entrant could displace the model, even with substantial loss leading or buying of market share (see graphs – note “Google” is FLOSS, as is the new entrant nginx).

“Just Drill a Hole”

“Just Drill a Hole”

Brendan Scott, June 09

I drilled a hole today (two in fact) to hang a picture over a mantlepiece.  It involved the following:

  1. select tools from the shed I think I’ll need;
  2. change the light bulb (which had blown) so I could see what I was doing – I have had 6 bulbs blow around the house in the last two or three weeks, three in the same room – of these two were fluourscent long life bulbs, and each lasted under two weeks :-/
  3. removing the dynabolt that the previous owners had left in middle of the chimney (protruding about 50 mm) (not easy because someone had damaged the threads, so removing the nut was hard, but not impossible [update: If you’re coming here from google ‘remove dynabolt’ – I did it by removing the nut, pushing the bolt and sleeves forward, then removing the sleeves, but it was somewhat easier for me because someone had made a right great hole in the wall trying to get it out earlier – see 4]);
  4. put some spakfiller into the enormous hole left by the dynabolt (enormous hole mostly already there, apparently from someone else’s previous attempt to remove it);
  5. go back to the shed maybe two or three times because I hadn’t taken enough tools (eg pliers to hold the dynabolt steady while removing the nut);
  6. measuring the picture and deciding to use two hooks, finding two hooks and two wall plugs in the shed;
  7. going to Bunnings to buy some pan headed screws sufficient to hold the picture (I have used 10g, this may be overkill);
  8. actually buying them somewhere else, because Bunnings only seems to have countersunk screws (countersunk would be adequate, I am just being a perfectionist here);
  9. measuring the picture – the back had two hook locations marked on the back in pencil from the last time I hung it, so I didn’t need to calculate where they ought to go;
  10. using the height of the picture estimating adequate clearance from the top of the mantlepiece;
  11. based on the desired height, finding the centre of the chimney, and marking (more or less) level two drill spots equidistant of that point each half the width between the hook marks on the back of the picture;
  12. removing all the palaver from the mantlepiece, and from in front of the fireplace so that I could gain access and not have dust fall on everything;
  13. realise (having removed the dynabolt), that the chimney was render to a significant depth (45mm?), so need a smaller drill bit for the plugs;
  14. go back to the shed to get the smaller drill bit;
  15. get an extension cord from the next room because the power point is too far away;
  16. go downstairs to get another extension cord, because the first was still not long enough;
  17. notice that the hooks would be above the picture rail which is already there (juts out about 20mm), so decide to cut some spacers for the hooks (subtask:);
    1. go down to the shed
    2. mark off two spacers in some wood and two drill holes
    3. take out saw horse, unfold legs, tighten wing nut to secure them
    4. clamp wood to saw horse
    5. drill holes through roughly the centre of each spacer
    6. saw off the two spacers
    7. unclamp wood, return clamps
    8. undo wing nuts on saw horse, fold legs, put away
  18. mark depth for drill bit based on length of plugs
  19. drill two holes in the wall (this step actually took under 3 minutes, maybe under 1 minute)
  20. bang in plugs;
  21. cut off about 8-9mm from each plug jutting from wall (because that’s where I hit the bricks under the render);
  22. screw the hooks through the wood and into the plugs in the wall (embedment about 30mm);
  23. hang the picture
  24. clean up bits of render thrown out when drilling the holes
  25. replace all the palaver I had to move earlier
  26. take tools back to shed.

Estimate of total time taken, excluding trips to Bunnings etc: 2-3 hours.

Next time someone asks you to ‘just drill a hole’, point them here.

Artists Should Pay Cafes

With news of the PPCA now seeking to extract unjustifiable amounts of money from cafe owners it is seems time to consider whether the approach taken by the Copyright Tribunal in setting rates is truly reflective of community attitudes, copyright law, and the benefit received by artists.  Quoting from the article:

Buoyed by the nightclub ruling, the PPCA is now targeting eateries. It wants to increase licensing fees in a 120-seat restaurant to $19,344 a year — up from $125. Small cafes would be slugged with a 4729 per cent yearly increase from $124 to $5860.

The Copyright Tribunal does not give due weight to the fact that artists get a benefit from the exposure of their works to a public.  This is especially the case where a cafe owner exercises no discretion in the selection of the material (eg they have the radio on allowing people to hear material selected by the operator of the radio station).  It is arguable that the performer in these cases is receiving more benefit from the exposure of the material than the cafe operator is.  Rather than increasing the amounts payable to cafe owners, it would perhaps be more equitable if the PPCA was paying cafe owners for this advertising.   If Google adwords is anything to go by, at the rate of a dollar or two each.

Rather than trying to place a dying model on life support (ironically, by making it uneconomical), the Copyright Tribunal needs to realise that the market price for content is zero or near zero, but the cost of advertising is not.   There needs to be more recognition of the cost currently incurred by platform providers (such as cafe) in subsidising artists through this free advertising.  A more just system would have the PPCA and similar entities begin remunerating platform providers for this advertising.

Of course, the main good thing to come when rates are set out of kilter with community values is that there is more incentive for existing platform providers to employ artists directly.

Update:

Rachel Polanskis offered this misquote from Hunter S Thompson:

“The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.”

Call for Tax Deductibility for Donating (to) FLOSS (AU)

Call for Tax Deductibility for Donating (to) FLOSS (AU)

Brendan Scott

May 2009

Summary

There is cause to believe that an entity could be established in such a way as to be a deductible gift recipient under the Australian Income Tax legislation and that donations of open source software to that entity would give rise to a tax deduction to the benefit of the donor while preserving public access to the software.  Such an arrangement would benefit individual FLOSS developers (who have an income against which a deduction can be claimed), including those whose FLOSS activities are pro bono at the moment.  There is no reason to think the same principles would not apply to other licensing schemes, such as open content.

Background

Some while ago Open Source Victoria (OSV) asked me to investigate some issues relating to the tax deductibility of donating FLOSS to charities as a means of promoting participation in FLOSS within Australia.  OSV agreed to partly fund the work, and I mapped out some options for them at the time.  I’ve recently spoken with OSV and they were happy for some aspects of work to be made public.

Who Benefits?

Policy makers too often overlook the fact that the whole of the community benefits whenever software is released under a FLOSS licence.   The intended beneficiary of such a scheme are therefore the community as a whole.  However, consistently with existing government policy to provide incentives for the creation of works, the donors of such FLOSS software would also benefit through a tax benefit in return for the donation.   Further, as businesses will likely be able to deduct the costs of development of software which is created in the course of their business, the donors most likely to benefit are those individual developers engaged in pro bono development.

That is, such a scheme would provide an incentive to individual developers to create and donate FLOSS.

Outline of the Arrangement

In some circumstances the donation of gifts to charities gives rise to a tax deduction to the value of the gift.  Such deductions are not available for all donations, but whether the gift is money or an asset does not remove its deductability.   Software is an asset, so it can be a gift.  The arrangement therefore involves establishing an entity which grants OSI compliant licences over software donated to it in such a way that the gift of copyright to the entity would give rise to an entitlement to claim a tax deduction for the value of that copyright.

Discussion

Eligibility for a Deduction

There are a number of things to be established in order for a donation to an entity to be tax deductible. These are:

  1. that the donation falls into one of a number of specific categories of things which can be gifts;
  2. that the recipient of the gift has a special character as a Deductible Gift Recipient (DGR). This involves both being entitled to endorsement as a DGR and actually receiving that endorsement;

  3. that any additional special conditions are satisfied. Special conditions can apply to gifts based on the character of the DGR and/or the circumstances of the donation; and

  4. that the donation has the character of a gift as defined by taxation law. This includes both the nature of the gift itself and the manner in which the gift is given.

Deductible Gift Recipient

The legislation does not make it particularly easy to become a DGR.  Indeed, it has a Byzantine structure which the unkind might think was specifically designed to prevent entities becoming DGRs.  The tax deductibility of gifts is dealt with in Division 30 of the Income Tax Assessment Act 1997.  Section 30-15 has a table which sets out the circumstances in which a gift will be deductible (Deductibility Table).  The Deductibility Table sets out not only the categories of gift recipient, but also links the gift recipient to specific categories of gift and/or special conditions on gifts and/or deductibility of gifts.  A gift recipient may appear in different rows of the table, indicating that the same recipient may receive different categories of gift or that different gifts are subject to different special conditions (or both).

From a review of all of these the following seemed promising:

“(1) A fund, authority or institution covered by an item in any of the tables in Subdivision 30‑B”;
“4(b) a public library in Australia”; and
“4(c) a public museum in Australia”.

The tables in Subdivision 30-B list a large number of funds, authorities and institutions.  Some of these are named specifically (eg item 2.2.19 “the Foundation for Gambling Studies”), while others are identified by category (eg item 2.1.1 “a public university”).  Of all the entities listed in Subdivision 30‑B, the only ones likely to be applicable in the proposed circumstances are:
(a)  4.1.1 a public benevolent institution;
(b)  12.1.2 a public library; and
(c)  12.1.3 a public museum.
In certain circumstances, there may be other categories which are appropriate – for example, certain research arms of universities are entitled to be DGRs.  In addition, there would be the possibility of having the entity specifically listed in the legislation – if a specific naming was possible it would be the easiest route home, but the least likely to be able to be achieved. Failing that, the most promising seem to be establishing a library or a museum.    The detail of what constitutes a public benevolent institution is rather stringent and would be difficult to qualify under.

Gifts

In addition to the entity being established as a DGR, the gifts themselves need to have the requisite character.  These requirements are set out in a number of court cases and include:
(a)  that there is a transfer of money or property;
(b)  the transfer is made voluntarily;
(c)  that there is no material benefit to the donor by way of return; and
(d)  it essentially arises from benefaction and proceeds from detached and disinterested generosity.

There is no reason why the donation of code could not qualify under this definition as a gift.

Anti-Avoidance

In addition to the provisions qualifying what is, or is not a gift, the Act also has “anti-avoidance”  provisions which are relevant.  These are intended to apply to invalidate gifts where a scheme or arrangement has been contrived to avoid the spirit of the deductible gift recipient provisions.  In essence a gift is not deductible where as a result of a gift:
(a)  the value of the gift to the recipient is reduced (including where the reduction is from an event that happens after the gift is given);
(b)  another fund other than the recipient becomes liable to another person;
(c)  the donor of the gift (or an associate) receives a benefit (other than the tax deduction); or
(d)  there is a requirement for the recipient or another fund to acquire other property from the donor.

There is no reason in principle why the anti-avoidance provisions should preclude software donations of the kind contemplated by these arrangements.

How Much of a Deduction?

In theory the whole value of the asset is deductible.  The Act has different rules for different categories of gift.  In some circumstances no deduction is available for the donation of assets worth less than $5,000.  However, it is plausible that a gift of software under the arrangements contemplated would not be subject to this $5,000 minimum.    There are specific procedures in the Act to establish a value of assets.  For the arrangement to work could require establishing software valuers approved by the relevant department.  Presumably the market value of the donation of a substantial project (Joomla? ) would be signficant.

What needs to be done?

From here there is still a fair bit of work to be done before such an entity could commence operation.   A start would be to establish the infrastructure for such an entity – eg finding people to run it, creating constituting documents which would be consistent with an open source donation, establishing a valuation procedure and making an application for deductible gift recipient status.

See also:

This post from Stormy Peters on GNOME foundation/KDE in the US

Lessig and Leveraging FLOSS For Ethical Copyright

It’s moved here: Lessig and Leveraging FLOSS For Ethical Copyright

Pirate Party Goes to Brussels

The Swedish Pirate Party has won one seat in the EU parliament, with 7% of the vote in Sweden (in elections for the EU parliament held on the weekend).  By way of comparison, the Green party won 10% of the vote.  Source SMH.  Politicians ignore this at their peril.


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