The Economic Consequences of Piracy

I've noted elsewhere that there is a major piece of FUD being put about by content producers: that piracy causes massive damage to a country's economy. But as that post explained with regard to the BSA's claims about the harm of software piracy, here's the reality:

Reducing software piracy will not magically conjure up those hundreds of billions of dollars of economic growth that the BSA invokes, or create huge numbers of new jobs: it will simply move the money around - in fact, it will send more of it outside local economies to the US, and reduce the local employment.

The basic idea is really pretty simple to understand. When people make unauthorised copies of content or software, they save money. But that doesn't mean they put it in a bank: human nature being what it is, that money is generally spent elsewhere in the local economy.

And yet despite the simplicity of this crucial idea, report after report seems to have difficulty grasping it. Here's another [.pdf], this time on film piracy, put together by UK Ipsos MediaCT and Oxford Economics for AFACT (the Australian Federation Against Copyright Theft). The top-line "results":

6,100 Full Time Equivalent (FTE) jobs were forgone across the entire economy (equivalent to more than six times the number of job cuts announced by Telstra in October 2010) including nearly 2,300 forgone directly by the movie industry and retailers. These impacts of piracy on employment persist as long as piracy persists.

Allowing for effects on other industries, some A$1,370m in Gross Output (Sales) was lost across the entire Australian economy.

This was equivalent to a loss of GDP of A$551m across the Australian economy – reducing national economic growth and Australia’s ability to invest in its future.

Tax losses are A$193m, representing money that government could employ for other social uses in areas such as education and healthcare.

What's sad is that the report does try to make reasonable assumptions about piracy:

We do not assume that every pirate version equates to a lost sale.

We do allow for ‘sampling’ - those who see an authorised version subsequent to the pirate version are not treated as contributing to lost revenue. In fact, we make the very cautious assumption that no lost revenue results from piracy if any authorised version is seen subsequently.

We do allow for ‘over-claim’ – we apply a ‘downweight’ to those claiming they would have paid for an authorised version (had the pirate version not been available).

But this laudable attempt at rigour is completely undermined by the fact that nowhere in the report is there any recognition that all this "lost" money does *not* disappear, but is simply channelled elsewhere in the Australian economy, where it might actually create more jobs than it would if spent on films (because of revenue outflows to the US, and the fact that local money would be spent on more labour-intensive industries like retailing or catering.) Similarly, it *does* produce tax revenue for the Australian government, just from different sources.

It would be far more conducive to producing an honest debate about the *real* effects of unauthorised copies on national economies if these key facts were included for a change; by continuing to ignore them, these misleading and one-sided reports amount to little more than industry propaganda.

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Why Extending the DNA Database is Dangerous

Part of the problem with extending the DNA database is that doing so increases the likelihood of this happening:

After a seven-day trial, Jama had been convicted of raping a 40-year-old woman in the toilets at a suburban nightclub.

The only evidence linking him to the crime was a DNA sample taken from the woman's rape kit.

...

Jama had steadfastly denied the charge of rape and said he had never been to that nightclub, not on that cold Melbourne night, not ever. He repeatedly stated he was with his critically ill father on the other side of Melbourne, reading him passages from the Koran.

But the judge and the jury did not buy his alibi, despite supporting evidence from his father, brother and friend. Instead, they believed the forensic scientist who testified there was a one in 800 billion chance that the DNA belonged to someone other than the accused man.

This week Jama gave the lie to that absurdly remote statistic. After prosecutors admitted human error in the DNA testing on which the case against Jama was built, his conviction was overturned.

Prosecutors said they could not rule out contamination of the DNA sample after it emerged the same forensic medical officer who used the rape kit had taken an earlier sample from Jama in an unrelated matter. They admitted a "serious miscarriage of justice".

DNA is an important forensic tool - when used properly. But it is not foolproof, not least because contamination can lead to false positives.

The more DNA profiles that are stored on a database, the more likely there will be a match found due to such false positives. And such is the belief in the infallibility of DNA testing - thanks to the impressive-sound "one in 800 billion chance that the DNA belonged to someone other than the accused man" - that it is likely to lead to more *innocent* people being convicted. The best solution is to keep the DNA database small, tight and useful.

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Australia Edges Us Towards the Digital Dark Ages

Last week, on my opendotdotdot blog, I was praising the Australian government for its moves to open up its data. I was rapidly – and rightly – taken to task in the comments for failing to mention that government's efforts to impose direct, low-level censorship on the country's Internet feed.

Although I was aware of these moves, I wasn't quite up to date on their progress. It seems that things have moved far and fast...

On Open Enterprise blog.

Declaration of Open Government by Australia

The Australian government is emerging as one of the leaders in the sphere of open government. It has now published a draft report of the Government 2.0 Taskforce, entitled "Engage: Getting on with Government 2.0" (hmm, not quite sure about that phraseology). Here's the central recommendation:

A Declaration of Open Government by the Australian Government

Accompanying the Government’s announcement of its policy response to this report, the Australian Government should make a Declaration on Open Government, stating that:

* Public sector information is a national resource and that releasing as much of it on as permissive terms as possible will maximise its economic, social value to Australians and reinforce its contribution to a healthy democracy;

* Using technology to increase collaboration in making policy and providing service will help achieve a more consultative, participatory and transparent government;

* Online engagement by public servants involving robust professional discussion, as part of their duties and/or as private citizens, benefits their agencies, their professional development, those with whom they are engaged and the Australian public. This engagement should be enabled and encouraged;

* The fulfilment of the above at all levels of government is integral to the Government’s objectives including public sector reform, innovation and utilising the national investment in broadband to achieve an informed, connected and democratic community.

What's interesting is that in addition to this strong central declaration in favour of openness, the draft report is peppered throughout with references to "open source"; indeed, the whole thing is permeated by its spirit - which is probably why it is such an inspiring document. Let's hope that other governments are indeed inspired by it, and come out with something similar themselves.

Update: As people in the comments have rightly reminded me, this plan to open up some data is rather negated by the Australian government's moves to censor massively the Internet. Interestingly this schizophrenia mirrors almost exactly that of the UK government.

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Of Government 2.0, Open Source and Open Data

Great to see this in Australian Senator Kate Lundy's big speech "Government 2.0: co-designing a better democracy":

Open source software as an example of another, often less thought of opportunity for open and transparent government is through the tools we choose to use. Software underpins almost everything we do, whether it be for work, play or creative endeavour. To be able to scrutinise software – to see the human readable instructions and trust it has, if you will – becomes almost a democratic issue, for many in the technology community.

...

So we consider that the time is now right to build on our record of fairness and achievement and to take further positive action to ensure that Open Source products are fully and fairly considered throughout government IT; to ensure that we specify our requirements and publish our data in terms of Open Standards; and that we seek the same degree of flexibility in our commercial relationships with proprietary software suppliers as are inherent in the open source world.

There's also good stuff on open data:

as has been evident in the US for many years, open access to government data can dramatically increase the value created from the data both socially and economically. This means the society as a whole benefits from access to the data.
Public sector information ought to be available in the public not just to facilitate innovation in the public and private spheres, but to enable individual citizens to make informed choices.

Just to be clear, I am not talking about personal information that we expect to be private and secure. I am talking about general information about the places we live, the environment we live in, the things we do as a society.
A general policy of openness in this area would create a culture of scrutiny and collaboration rather than a culture of secrecy.

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Of Open Source and Open Government

One of the key figures in the open government in Australia - and indeed globally, given the paucity of such people - is Kate Lundy. She's been speaking at the Free and Open Source Software for Geospatial Conference 2009. Understandably, her talk was mostly about geospatial data, but there was also this nice section:

FOSS is like a living blueprint – a map if you will – for trust, sustainability and interoperability in the implementation of Gov 2.0 principles. FOSS principles and methodologies are the best case studies you can find for tried and proven online collaboration with constructive outcomes. FOSS applications provide reference implementations for pretty much anything, which government can build upon and customise. We have a lot to learn from FOSS methods and practices, and I would ask all of you to assist us, in government, to understand.

Would that more politicians were so perspicacious.

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Pillars of Open Government

As you may have noticed, I'm writing more about open government these days, simply because there's more to write about - and that's great. Here's some clueful stuff from the other side of the globe. It's by Kate Lundy, a member of the Australian Senate, who really seems to get this openness thing:

For the Australian government, an opportunity to construct what I see as the three pillars of Open Government is presented. Each of these pillars assumes the basic principle of citizen engagement at every possible opportunity to both empower people, and to ensure the results are actually appropriate and useful.

The three pillars of open government.

* Citizen-centric services
* Open and transparent government
* Innovation facilitation

I particularly liked this one:

The second pillar is open and transparent government. This pillar builds on the principles that citizens have a right to the information they need to inform themselves about public and political affairs, and to participate in the democratic processes in an informed way. This second pillar is to ensure genuine means of engagement between citizens and the government in policy and decision-making. This is always harder than it sounds but it is essential to garner the wisdom of the crowd. It is vital that government engage with the broader community not just for a conversation, but in genuine partnership between political leaders and the people so we can as a society respond most effectively to the specific social and economic challenges communities confront. This localisation of policy solutions is essential to ensure relevance of government solutions to real situations, and essential to ensure a reasonable response time to new issues and emergencies. Open and transparent government will grow citizen trust and ultimately participation in policy development and government directions.

Great to see people all around the world working on this stuff. Pillars of open government, indeed.

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The New Crowdsourcing: Pubsourcing

Interesting development here:

The United States has unveiled an unlikely weapon in its battle against drugs gangs and illegal immigrants at the Texas-Mexico border - pub-goers in Australia.

The drinkers are the most far-flung of a sizeable army of hi-tech foot soldiers recruited to assist the border protection effort.

Anyone with an internet connection can now help to patrol the 1,254-mile frontier through a network of webcams set up to allow the public to monitor suspicious activity. Once logged in, the volunteers spend hours studying the landscape and are encouraged to email authorities when they see anyone on foot, in vehicles or aboard boats heading towards US territory from Mexico.

But the important point here is not just the quaint locale: it is the fact that the observers are completely disconnected from the observed. There is no human connection, so there would be no compunction in reporting anything required.

This is the perfect surveillance system: not where your neighbours keep an eye on you, but where total strangers the other side of the world do. (Via The Reg.)

Of Blacklists and Barbra Streisand

In the wake of news that Australia's blacklist has been leaked, I came across these interesting comments:

"Because this is a secret that has been leaked, everyone will be after it.”

“Every Australian will want to know what they were not they were considered so irresponsible to not leave alone.”

Guys said the leakage is proof that the list will be continually leaked if the Internet content filters are enforced, which he said will completely undermine its effectiveness.

Of course, the classic Streisand effect applied to blacklists: as soon as you create one, everyone wants to know whats on it, and some will manage to do so despite the blacklists - thus ensuring that those sites will get far more traffic than if no blacklist had been created.

So blacklists are actually one of the most foolish ways of trying to censor: wonder how long it will take the authorities to work this one out?

Lack of Open Access to Geodata Costing Lives?

Here's another great example of why we need open access to public data:

The refusal of the government in Victoria, Australia, to provide data for Google's bushfire map mashup limited its scope and highlighted glaring problems with Crown copyright provisions, the search giant's top Australian engineer said yesterday.

...

The search giant's search for data to plot fires on public lands--which are managed by the Victorian Department of Sustainability and Environment--produced an entirely different result. With no public feed of the fires' location and an explicit denial of permission to access its own internal data, the engineers were ultimately unable to plot that data on the map as well.

It's not hard to imagine that such mashups, provided in a timely fashion, could have saved lives, either directly or indirectly. It's a perfect examaple of why governments have a duty to share such basic data as widely as possible.

Give a Convicted Monopolist Enough Rope...

... it will hang you.

Maybe there's some kind of lesson here.

Australia: The New Commons Hero

One of the surprising - and heartening - recent developments in the environmental world has been the transformation of Australia into a real commons hero. Not just in terms of signing the Kyoto Protocol, but also in taking a very active part in revealing the reality of the scandalously callous and egotistical behaviour of the Japanese whalers.

The latest result of this new position is a truly shocking video that shows the death-throes of two Minke whales, almost certainly a mother and her calf. Be warned: this is literally revolting in its capture of the slow suffering inflicted by the Japanese.

But appalling as it is, it is a valuable document in the fight against this totally senseless slaughter and the Japanese government's cynical portrayal of such butchery as "science". The Australian government and people should be proud of their work in attempting to defend this fragile commons. (Via The Times.)

Those Altruistic Aussies

Despite frequent speculation that corporate financing is dangerous to the ethos of the open source software (OSS) community, most Australian open source developers don't see payment as a primary influence on their contributions, a straw poll of attendees at Linux.conf.au in Melbourne suggests.

During her conference keynote presentation, Stormy Peters, the director of community and partner programs for OpenLogic, asked how many audience members were currently working in a paid position to develop OSS projects. Around one-third raised their hands. Almost exactly the same number said they would continue to work on OSS even if they lost their current position.

No surprise there. (Via A Chaotic Flow of Open Source Ideas.)

Flickr: Happy Two Billionth!

Flickr has reached its two billionth picture: and that's just the beginning....

The Birth of Blognation

I was a big fan of the Vecosys blog - I even got used to its horrible name. And then it went away, only to emerge, phoenix-like, from the ashes, as something bigger and bolder: Blognation.

Blognation is certainly an ambitious”“Go Big or Go Home”” project, the aim being to report on the Web 2.0 startup ecosystem around the globe including, United Kingdom, Ireland, Belgium, Germany, France, Spain, Denmark Portugal, Italy, Iceland, Netherlands, Japan, China / Taiwan / Hong Kong, Australia, Brazil, South America, all with the help of 16+ blognation editors who are getting ready to start writing.

Today sees the launch of blognation UK and over the coming weeks and months all of the other aforementioned blogs will be launched. And proving that I certainly don’t lack ambition, I am currently speaking with a further 10 more prospective editors to cover Canada, Russia, India, South Africa, South Korea, South-East Asia, Poland, Czech Republic, Turkey and Greece.

Makes sense, but it depends critically on the quality of the blogger team that Sam Sethi has assembled. We shall see. At least the name is better than the previous one.

Easy Access to IPv6 at Last?

You probably don't realise it, but the Internet is a dinosaur. More specially, the Internet numbering system is palaeolithic, and needs sorting out. Ironically, the solution has been around for years (I first wrote about it nearly a decade ago). It's called IPv6, and instead of the measly 4 billion or so addresses that IPv4 allows (and which are allocated in a particularly arbitrary way), IPv6 will give us

340,282,366,920,938,463,463,374,607,431,768,211,456

of them, which should keep us going for a while.

And yet we hear little of IPv6 these days. So I was glad to see that down-under they are doing something on this front with the IPv6 for e-Business initiative. As well as scads of useful IPv6 resources, this site also has links to a highly-practical outcome of the Australian project, the memorably-named "Easy Access Device":

The Easy Access Device (EAD) has been developed with the purpose of providing a small businesses (leas than 50 employees) with a simple, easy to use IPv6 Internet access device. The system is designed as a small unit that would be installed in a small business, and connects directly into a DSL, cable or wireless broadband termination unit (typically a modem). The unit provides the basic network services normally required at a small office network boundary for both IPv6 and IPv4 networks.

Apparently it's a PC box running Ubuntu. Providing a cheap solution is probably as good a way as any of moving on from the poor old IPv4.

Cultivating the (Oz) Commons

Aside from its intrinsic interest, there is a good reason for observing closely what happens to content in Australia. Because of the Free Trade Act kit passed, Australia is imposing many of the US's most stupid legal instruments in this domain; how content fares under this regime could well serve as a warning for all those other countries contemplating similar moves.

The best place to find out about content down under is the book Open Content Licensing: Cultivating the Creative Commons, which brings together a couple of dozen papers from a conference that took place a couple of years ago (what took so long?). As well as the always-entertaining Lessig trot down copyright's memory lane, there's plenty about the particularities of Australian law and practice, as well as an unusual section on computer games and law. It's available as a free PDF.

Dastardly DRM Plans for Digital Video Broadcasting

Alas, not many people care enough about the threat posed by DRM. But I suspect that quite a few care about their TV viewing, and the traditional freedoms they enjoy in that sphere. So maybe this chilling news will wake up a few people from their digital slumbers:

Today, consumers can digitally record their favorite television shows, move recordings to portable video players, excerpt a small clip to include in a home video, and much more. The digital television transition promises innovation and competition in even more great gadgets that will give consumers unparalleled control over their media.

But an inter-industry organization that creates television and video specifications used in Europe, Australia, and much of Africa and Asia is laying the foundation for a far different future -- one in which major content providers get a veto over innovation and consumers face draconian digital rights management (DRM) restrictions on the use of TV content. At the behest of American movie and television studios, the Digital Video Broadcasting Project (DVB) is devising standards to ensure that digital television devices obey content providers' commands rather than consumers' desires. These restrictions will take away consumers' rights and abilities to use lawfully-acquired content so that each use can be sold back to them piecemeal.

Indonesia Hoards Bird 'Flu "Intellectual Property"

You had any doubts about whether intellectual monopolies were a good thing? Try this:

Indonesia is refusing to provide bird flu samples to other countries, companies and the World Health Organisation. Scientists and the WHO have expressed serious concerns about the ban, which they say hampers efforts to avoid a pandemic.

The move could set a precedent for international efforts to control the spread of viruses. Until now, countries have shared virus samples with the WHO, which then provides them to vaccine manufacturers.

In a highly unusual display of patriotism, the Health Minister, Siti Fadillah Supari, claimed Indonesia "owns" the bird flu strain which has spread across the nation, infecting tens of millions of chickens and killing at least 63 people.

Yesterday's announcement of a deal with the pharmaceutical company Baxter comes shortly after Indonesia condemned an Australian research breakthrough that could result in the production of a vaccine within months.

So as the cytokine storm kicks in, and you slowly drown in the fluid that was your lungs, hold on to this comforting thought: you and those you love may die, but the sacred IP virus will live on. (Via Technocrat.)

Virtual World, Real Lawyers

Lawyers thrive on complication and ambiguity. Things don't get more complicated or ambiguous than in cyberspace - it's no coincidence that Larry Lessig rose to prominence as one of the first to wield the machete of his fine legal mind on this thicket.

Things are even more complicated in virtual worlds, because they are inherently richer. Here's a nice round-up of some of the legal issues involved. Two paragraphs in particular caught my eye:

One complicating factor is jurisdiction. Linden currently operates under California and U.S. law. British IP attorney Cooper says that virtual worlds like Second Life need a form of international arbitration. "If I get ... an Australian operating a business in Second Life, asking me, a U.K. attorney, how he can best protect his business within Second Life, how do I answer him?" he says, citing one query that he has received. But Cooper sees a model in the uniform dispute resolution policy (UDRP) for Internet domain names. Created in 1999 by the Internet Corporation for Assigned Names and Numbers (ICANN) in cooperation with the World Intellectual Property Organization, the UDRP created an international solution to issues like cybersquatting of domain names that were difficult or impossible to resolve in regional courts.

Cooper, Lieberman and other interested avatars, including the Second Life Bar Association and many non-lawyers, are now working together to formalize online arbitration as a required first step to handle Second Life disputes, without resort to real courts and their costs. Together they are lobbying Linden to include arbitration in its terms of service agreement. Meanwhile, Lieberman's group is introducing its proposed arbitration into the virtual world, hoping that other users will try it out and find it fair and useful.

(Via Second Life Herald.)