Archive for the 'policy' Category

Should Governments Specify Licence Conditions?

I have been made aware of a meme passing around Government purchasing circles to the effect that Government ought not to be dictating licence terms in the course of procurement.  This has two variants, a strong variant that Government ought not be specifying, for example, a class of licence that ought to apply to the procurement and a less strong variant to the effect that Government ought not be specifying particular licence terms. Of course, the underlying aim of this meme is that if a Government can’t dictate licence terms then it can’t require open source.

To argue these positions requires a complete lack of understanding of the role that a licence plays in an acquisition.  I will take software as an example, but any procurement involving a licence would serve as well.   When anyone “acquires” a piece of software they, primarily, acquire two things.  The first, is a copy of the software being acquired.  The second is a licence in relation to that software.  Neither is useful without the other.  A copy, even legitimately acquired, can’t be used* without a licence and a licence can’t be exercised without a copy.   However, of these two components – the licence and the copy, the licence is by far the more important because it demarcates the whole of the uses to which the copy can be put.  If your licence is good enough, you can dispense with the provision of a copy because you can acquire the copy from elsewhere.   The acquisition of the licence, and the terms of the licence are the greater part of the substance of the procurement.

To take a practical example, if I were to buy a copy of Office from Microsoft I can choose from Office Home and Student 2013 or Office Home and Business 2013.   Microsoft provides a comparison chart which discloses that the main difference between these two packages is that the first can only be used for “Home Use” while the second can be used for “Home or Business Use”.  Now, the purpose for which I might use Microsoft Office is not a function of the copy of the software I acquire.  It is wholly derived from the licence terms which apply to that copy.  To argue that the Government is not able to specify the characteristics of a licence is to literally prohibit Government from discriminating between a licence which permits only home use (which would be useless to the Government) and one which permits use in the course of business.

For a public servant to even entertain the possibility of a broad based limitation on specifying licence characteristics would be to demonstrate a total failure to understand the subject matter.  The licence is the substance of any software acquisition.  To not be able to specify licence characteristics is equivalent to not being able to include technical specifications in any other sort of acquisition.  It is a nonsense.

The only time where specifying a licence ought to be prohibited is where the licence terms effect an exclusionary dealing.  So, if the licence terms permitted use only by persons who had signed up for some form of online service being offered by a third party, that would be anticompetitive because it would require bidder’s  customers to be funneled through to the a third party.  Open source licences do not have these dependencies.

* technically, some uses may be permitted if they do not involve an infringement.  However, the scope of things which count as an infringement these days is so broad that in any practical scenario the use of software will involve performing an activity which would, in the absence of a licence, infringe copyright.


UK Cabinet Office releases Open Standards Principles

UK Cabinet Office releases Open Standards Principles

Following on from the earlier standards consultation process, the UK Government has now released open standards principles.  I have had a quick flick through and am still coming to terms with them.  On the plus side they say all the right things, and they seem to have rejected RAND/FRAND/RANDZ etc licensing requirements in their definition of a standard – “royalty free basis that is compatible with both open source and proprietary licensed solutions.  These rights should be irrevocable unless there is a breach of licence conditions.” which is good.

For my views on open standards in Government see the paper I prepared for Linux Australia.

iiNet and the Sinking of the NBN?

iiNet and the Sinking of the NBN?

There is a major problem with the recent report into the NBN, and, indeed, with all costings for the NBN that I  have seen.  They all ignore a major risk – regulatory risk.  Or, to be more specific, the impact of further changes to the Copyright Act.  There are currently a couple of proposals on the cards which will have a substantial effect on ISPs’ businesses.  The proposals are: ISP liability and the creation of a three strikes scheme for terminating copyright infringers’ internet access.

Liability for Innocent ISPs

In a recent case in the Federal Court, a variety of copyright interests ran the argument that innocent ISPs should be liable when their customers infringe copyright (otherwise known as the iiNet case).  The argument went that if a copyright litigant had sent enough notices to an innocent ISP over time alleging that its customers were infringing copyright and they don’t stop it well then, that was enough for the ISP to be liable.   Sort of like the RTA (ie traffic authority) telling the operator of the M4 (a toll road in Sydney) that cars using it are speeding.  If it happens enough, the argument seems to be, then the operator of the M4 ought to be liable.  Under Australian copyright law this argument is not as ridiculous as it ought to be – the University of NSW was found liable for copyright infringement by students because it put a photocopier in a library in the 1970s.  In the 90s, Telstra, a local telco, was found liable because its customers played music on hold over its network…

Nonetheless, the court at first instance downed the argument (quite extensively in fact).   That decision is now on appeal and whatever the outcome it will likely go to the High Court.    In the end ISPs will be held liable (see below).

This will either mean that ISPs will have to implement something like a three strikes arrangement as a “reasonable measure” to prevent infringement (see next section) or they will need to charge extra to pay off ‘the industry’.   How a pay off would be costed is hard to say, but presumably it would be similar to how cable TV is priced at the moment (perhaps less per person if the cost of infringers is amortised over the whole user base) – FetchTV’s pricing, once available, may give some indication (rumours are it is around $30 per month).   This will add a substantial component to the price of a month’s broadband access (guess = on the order of 20-30%).  In addition there is the possibility that an enormous pipe brings with it greatly increased infringement and therefore an even higher copyright tax.

I note also that ISP liability will, in practice, add ‘the industry’ as a gate keeper for all innovation on the network.  As a consequence ISPs will forego or delay new services if they are likely to have a copyright impact.   Moreover, ISPs will even be gun shy about their customer’s use of the services – because, hey, the ISP is liable after all.  The innovation that the NBN is supposed to unleash will be dampened.  That under-innovation will have a subsequent impact on uptake.  Why would someone, for example, pay extra to get the same old TV on digital rather than analogue transmitters (we should not forget that this issue delayed uptake of digital TV in Australia for years)?

Three Strikes

The other likely modification to hit the statute books in the next few years is extrajudicial punishment.  Under this regime if you thrice accuse someone of infringing copyright then an ISP will be forced to disconnect their internet service.  It may not be so abrupt initially, but that is certainly the destination  that  democratic legislatures are being ordered to go to.

Exactly how many people this would affect is not clear.  For example, it is difficult to get any reliable (<- note this word) data on what percentage of people infringe copyright through the use of an internet connection.   Apparently in Canada, “Throughout 2007 and 2008, copyright lobby groups were busted for making up statistics about Canadian piracy rates. The statistics went all over the board including 10%-20%, 20%-30%, 50%, 70%, 75%, 85%, and even 90%. An incredible margin of error of 80%.”  Let’s assume [1] that 20% of  users are infringing users (this is at the lower end of the scale for estimates given by ‘the industry’).

From here let’s try to map some impacts on the NBN.  First, we need to realise that infringing users will likely get more utility from the high speeds that will be offered by the NBN than other users.  So they are likely to be overrrepresented in any take-up figures for the NBN.  So, what happens to the NBN if they are all kicked off?  All of a sudden, the NBN’s take up will be down substantially so the rest of the subscribers will need to pick up the slack.  These remaining subscribers can either be charged a substantially higher rate to cover the build costs (which will mean that a further portion of them will choose not to take up the service…) or the horizon for amortizing NBN Co’s costs will need to be substantially pushed back.

You might argue that whatever percentage are infringing, as soon as a couple of people are disconnected, the rest of the infringers will stop.  That may well happen, however, if that’s the case why would they continue to take a premium priced broadband service?

The bottom line is, either three strikes will not have any substantive effect on copyright infringement, or the NBN’s costs will increase substantially.

The Legislation Will Change

So, what if the iiNet case makes it to the High Court and the argument is still downed?  Well, it seems like that won’t be the end of the matter.  Rather, the movie studios will simply be able to argue that they have exhausted common law avenues so a legislative response is now appropriate.  When asking the Australian Government to change the law they may well remind the Government of what the Minister is reported to have said on the topic in 2009:

“I saw iiNet’s defence in court under oath … they have no idea if their customers are downloading illegally music or movies,” he said today at the Commsday summit in Sydney. “Stunning defence, stunning defence,” he continued in what appeared to be a sarcastic comment.

“I thought a defence in terms of ‘we had no idea’ … belongs in a Yes Minister episode.”

That would be an interesting discussion….

In any event the Australian Government has a poor record of protecting each citizen’s rights against expansion of the Copyright Act.  When the first major case on copyright was decided in the mid 80s (which found that copying of object code for computer software was not an infringement under the Copyright Act) the then Labor Government took all of 6 months to ensure that the legislation was changed to bring it into line with the then US policy on the issue.   Indeed, the then Minister only took a handful of days from the decision (and before holding any inquiry) to give public assurances (to the US?) that the legislation would be changed to fix the decision.

I think it would be fair to say that whatever the US movie houses have asked for over the past 20 years or so they have gotten, and they have gotten it from both sides of politics, and they have gotten it despite reservations or outright opposition from parliamentary committees which have reported on whatever issue was up for discussion.   And, they’re asking for ISP liability and three strikes, so it’s coming and the NBN hasn’t been costed for it.

The NBN costing should include an allowance for this.  If they don’t the copyright amendment bills should have something in their economic impact statements.  They won’t, of course.


[1] The established procedure in this field seems to be choosing a number which suits, without any real basis or evidence for it.

Words in Copyright Act vs Time

Words in Copyright Act vs Time

I have run some numbers on how the size of the (Australian) Copyright Act has changed over the past century or so.  With one exception, these numbers were generated automatically from electronic versions of the legislation.   Before counting the words I stripped out the table of contents and everything from “The Schedule” on.  This is because a bigger Act automatically means a larger table of contents and an older Act means more notes about when sections came into force, were repealed etc.  The one exception is the Copyright Act of 1905, a word count for which was estimated by manually counting words on 3 pages, generating an average per page and multiplying by the number of pages. There are a couple of versions of the Act from between 1905 and the 1970s which are not plotted (as I don’t have access to a full copy of them) but everything I could find from 1970 on is there.

The Statute of Anne (1709) has about 2,500 words in it.  It took roughly 200 years to reach 7,500 (in our 1905 Act).  For your reference, the NSW Conveyancing Act 1919 No6 (which actually does deal with property) has about 82,000 words (ie about the number of words added to the Copyright Act in the last 10 years).  We might speculate whether there will be enough paper in the world to even print the Act in 20 years’ time.

Here is the period from 1992

And, for a laugh, the BSAA reported piracy rate (from the annual reports produced by IDC etc) overlaid.  I would not want to endorse the BSAA numbers as they don’t seem to me to be well founded and any variation in them can easily be explained by changes in IDC’s sampling procedures/calculation methods.  In addition, they are advocacy documents so need to be taken with a grain of salt.

It is hard to see any relationship between the amount of legislation and the reported rate of piracy (which seems to be in a long term, albeit slow, decline).  To the extent there is a relationship, the reported rate seems to lead changes in legislation.

Disgruntled Lego Customer

Disgruntled Lego Customer

The process of acquiring a Mindstorms robot kit has left an extremely bad taste in my mouth.  Lego apparently has something of a reputation for openness with the Mindstorms Kit (although the programming software is both closed and won’t run on Linux – and you’re not licensed to develop commercial applications with it).  However, they do not seem to have a reputation for free trade.  Pricing for the kit on Amazon equated to about AU$330 delivered (Amazon have just sent me an email suggesting I buy it from them based on my earlier searching – which has set off this post).  This compares very favourably to local pricing of AU$450 (not delivered).   Or, it would compare favourably if someone was willing to ship one to me from overseas.  While there are a couple of small places that will, they don’t have the volume, so shipping costs are very high.  Amazon claims “warranty issues” as the reason.  For a bunch of plastic which runs off AA batteries, and for which an identical product is sold here?  GMAB – I call baloney.  I can only assume that distributors have been heavied by Lego.  This reeks of market segmentation.

In rough terms,  for every two sets an Australian school can buy,  a US school can buy three.  Yet another example of how copyright hobbles innovation in this country.

Update: I’m not being particularly critical of Amazon (except perhaps for sending me an email asking me to buy a product that it has already refused to ship to me) because a number of suppliers wouldn’t ship it (including from Singapore and Hong Kong) – this might not have been obvious from the post.  It would be nice if this was all just a coincidence

How Copyright Ideology Costs the Country

How Copyright Ideology Costs the Country

Booktopia price for Beginning Game Development with Python and Pygame: From Novice to Professional (Paperback):  $67.50 + $6.50 shipping = AU$74 delivered

Amazon price US$21.12+US$9.98 = US$31.10 ~ AU$35.34 delivered (@AU$1=US$0.88)

US list price: US$39.99 (ie ~AU$45.44)


R18+ Games and Internet Censorship

R18+ Games and Internet Censorship

The Federal Government has decided to go ahead with Internet Censorship in Australia. At much the same time, the Government has also announced an intention to consult on whether an R18+ classification should be introduced for video games.  I would guess that these two are related, because the absence of an R18+ classification means that (to quote from the AG’s discussion paper on the R18+ classification):

Computer games that are unsuitable for a minor to see must be classified Refused Classification (RC).

Which would mean that a non trivial number of computer games available overseas would be classified RC in Australia (anything which would exceed an MA 15+ rating), so accessing them (or to websites selling them) will presumably become illegal (?)

It seems like an R18+ classification for games is already a done deal because its absence would cause terrible trouble for the proposed internet censorship regime.  Or maybe this is just co-incidence and access to your overseas computer game store might be suddenly cut off just before the next election.

Rene comments on a mailing list (click link for full email):

However, I don't agree with your conclusion that:
	"It seems like an R18+ classification for games is already a done deal 
because its absence would cause terrible trouble for the proposed internet 
censorship regime." 

Imo, it is not a done deal because there is no way SA A-G Atkinson is going 
to agree to R18+ for games just because the Cth wants to introduce 
mandatory blocking. 

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