ICANN haz .cheezburger?

At its meeting in Singapore, the Board of ICANN today gave final approval to the most dramatic change to the Internet in four decades — allowing the expansion of new Top-Level Domains (TLDs).  This decision will allow companies to go beyond the typical .com nomenclature to allow them to turn their own brands into Internet domain extensions.  So prepare to see .coke, .addidas, as well as .car and .bank.  Now this isn’t going to be cheap; word is to buy a .brand will cost around one hundred eight-five grand per brand name with five grand of that being an up front fee.  Oh yeah, that name will also cost twenty five grand a year to maintain.  What cord do I pull to have the safe fall on my head? 

Of course, not everyone will necessarily be granted a top level domain name. Who gets lucky depends on what ICANN decides. Smaller brands, which are brands nonetheless, obviously won’t be able to afford the names. Who gets to have hot generic names like .money or .tickets will be decided, to my understanding, solely by ICANN.  What happens when two companies with the same trademark both decide they want the same top level domain remains to be seen. Who gets to be .giants — the San Francisco Giants baseball team or the New York Giants football team?  I guess that might depend on who writes the biggest check to ICANN.

Because, let’s face it, this is nothing but a money grab for ICANN.  Neither you nor I can afford to play this game; we are talking about high rollers here.  The losers in this are the cybersquatters, those folks who have purchased every conceivable spelling of every combination of words out there and are holding them ransom.  ICANN states that this really revolutionizes the web, but they were saying the same thing when they rolled out .mobi, .info and .biz

And those have really worked out well, haven’t they?

In Order to Have a Free Market, You Need to Have Choices

One of the great things about a “Free Market” is that if you don’t like the company you are getting services from, you can always go somewhere else. 

Well, except if you’re dealing with Internet Service Providers and live in North Carolina.  Then you’re pretty much screwed.  You see, Governor Bev Purdue says that she will neither sign nor veto H.129.  Now for those who do not know, H.129 is a bill that would put restrictions on cities that currently provide internet service to its citizens (Wilson, Salisbury, Morganton, Davidson, and Mooresville), and would significantly hinder any efforts by other cities to pursue their own municipal internet services. The obvious winners in this action are Time-Warner cable and AT&T, who have spent a lot of money improving their services, er, buying politicians, er, let’s just say, they’ve spent a lot of money over this. 

Some of the provisions in H.129 state that cities:

• Shall provide nondiscriminatory access to private communications service providers on a first-come, first-served basis to rights-of-way, poles, or conduits owned, leased, or operated by the city unless the facilities have insufficient capacity for the access and additional capacity cannot reasonably be added to the facilities.
• Shall not use city resources that are not allocated for cost accounting purposes to the city-owned communications service  to promote city-owned communications service in comparison to private services or, directly or indirectly, require city employees, officers, or contractors to purchase city services
• Shall not subsidize the provision of communications service with funds from any other noncommunications service, operation, or other revenue source, including any funds or revenue generated from electric, gas, water, sewer, or garbage services.
• Shall not price any communications service below the cost of providing the service, including any direct or indirect subsidies received by the city-owned communications service provider and allocation of costs associated with any shared use of buildings, equipment, vehicles, and personnel with other city departments.

The bill ensures that companies like Time Warner Cable and AT&T will continue to be the dominant players in most North Carolina markets, even with higher pricing and speeds that often lag far behind what cities themselves can provide for its residents.

Never mind the fact that these municipalities decided to vote to band together and provide its own municipal services.  And why did they do that?  Because the Internet service providers were dragging their feet and underserving the market.  The community did not have a choice that was fast and inexpensive, so they created one.  And because they are offering their community an alternative that is better, the telecoms run and pay off politicians to curtail it. Because as we all know, municipalities should not have an “unfair advantage” over the private sector.  In this case the unfair advantage is a service that is better, faster and cheaper.  You know, those same arguments that are used when a government decides to outsource a municipal service to a private company. 

Funny how that works.

Protecting IPs From Whom?

It may be summer soon, but there is a chill in the air.  Legislation known as the “Protect IP Act” has been introduced in Washington.  Basically it is the successor to the Combating Online Infringements and Counterfeits Act that made its way through congress back in November. 

This is how the bill would work.  The U.S. Department of Justice would receive the power to seek a court order against an allegedly infringing Web site, and then serve that order on search engines, certain Domain Name System providers, and Internet advertising firms–which would in turn be required to "expeditiously" make the target Web site invisible.

Needless to say, Google is not happy.  The bill would also make Google, which makes most of its profits from its online advertising products, stop serving ads or sponsored links to those sites deemed as infringing. To quote Executive Chairman Eric Schmidt on Wednesday:

"If there is a law that requires DNSs [domain name systems] to do X, and it’s passed by both houses of Congress and signed by the president of the United States and we disagree with it, then we would still fight it.”

…

"If it’s a request, the answer is we wouldn’t do it. If it’s a discussion, we wouldn’t do it”

…

"So, ‘let’s whack off the DNS.’ OK, that seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs.’ That country would be China.”

As my dad used to say, those are fightin’ words.  And in many ways he is correct, because the main thrust of this is not the Pirate Bay and similar sites, as one might suspect, but rather Wikileaks. 

You see, under this law, leaking information such as governmental cables or embarrassing and/or damaging bank information showing rampant fraud and the like is basically distributing copyrighted material, and therefore subject to the takedown.  See how that works? Do not think for a minute that any of that was lost upon the members of congress who see the site as something they would like to see go away, and soon.

Of course the MPAA had words to fire back, seeing that they basically wrote the bill for the esteemed members of congress.  Michael O’Leary, an executive vice president for MPAA, in a statement:

“Is Eric Schmidt really suggesting that if Congress passes a law and President Obama signs it, Google wouldn’t follow it? As an American company respected around the world, it’s unfortunate that, at least according to its executive chairman’s comments, Google seems to think it’s above America’s laws. And the notion that China would use a bipartisan, narrowly tailored bill as a pretext for censorship is laughable, as Google knows, China does what China does.”

That last part may be true.  But if China does it, does that mean that we must follow their example?

Skip Skype-ing Away

Well, Microsoft spent around 8 Billion (with a “B”) and bought internet voice company Skype last night. What is amazing is that while most people actually think that Skype and Microsoft is a better fit than Skype and Google or Skype and Facebook (the other two suitors), the deal was somehow the worst possible move that Microsoft could have done.  Doomed, I tell you.  Doomed.

I will give the fact that Microsoft’s acquisitions have not fared well.  How this is different from every other large company out there is beyond me, but let us forget that Google’s failure rate is fastly approaching that of AOL and that Apple has tasted the sour taste of failure as well.  This is about Microsoft, so we must go through the storyline that everything that Microsoft touches turns to lead.  Even when it doesn’t.

So what does Microsoft get for 8 billion dollars?  663 million total users, although most users are not active callers.  However, according to Paolo Pescatore, an analyst at CCS Insight in London. In voice services, “Skype has certainly set the benchmark and gained a lot of traction.”  Skype is a well known player.  It’s technology is fairly mature.  And unlike previous acquisitions where the question “What are you going to do with it now you have it?” was met with awkward pauses, the answers came fast and furious.  Skype on Windows Phone, Skype in Outlook, Skype in X-Box, and Skype with Lync, Microsoft’s corporate telephony services.  There are a lot of places in the Microsoft world where Skype could be used. 

Of course, analysts at Bloomberg couldn’t resist pointing out that “Microsoft’s backing of Skype may be seen as a threat by wireless carriers such as AT&T Inc. and Verizon Wireless because it could cut into voice revenue.”  Funny how the introduction of Apple’s Face Time wasn’t met with the same dire predictions.  After all, Apple is the market right now.  Microsoft is a far distant third.  One also tends to forget that Skype is available right now on Apple and Android products.  Yet the sky is falling only when Microsoft is in the room.  Funny, that. 

The question I have is the execution of the plan.  If this is going to work and really scare people, it will need to be done quickly.  No two years later-this will have to hit the ground running within the next six months.  Maybe not everything, but movement will need to be shown.  The good points are that Microsoft has now become the clear leader in video communication and that Skype’s leader, Tony Bates is staying along for the ride.  Microsoft says it will be exciting times ahead.  I certainly hope so. 

Hubris

As more and more details come out about this week’s security breakdown at Sony, one thing is becoming clear:  even if you think you’re safe, add a couple of more security layers.  Because you are not safe. 

According to the New York Times, the hackers made off with a database that included customer names, addresses, usernames, passwords and as many as 2.2 million credit card numbers.  Reuters is running a story that covers the number of class action lawsuits being filed on account of the breach.  The price Sony could eventually pay out in time, legal fees and lawyer costs are on the clock. 

Why? 

VentureBeat tracked down George Hotz, aka “GeoHot”, who recently settled a lawsuit with the company over hacking into the PlayStation 3’s hardware. While Sony may consider him as public enemy number one, Hotz relies that he had nothing to do with the attack.  Considering the fact that he recently settled with Sony rather than go through years of legal wrangling, (plus the fact Hotz’s main gig is hardware hacking, not database cracking), it would tend to exclude him from the line up.  But his reaction sums up what is going on nicely:

“The fault lies with the executives who declared a war on hackers, laughed at the idea of people penetrating the fortress that once was Sony, whined incessantly about piracy, and kept hiring more lawyers when they really needed to hire good security experts. Alienating the hacker community is not a good idea.”

And therein lies the point.   Companies feel it is easier to hire another lawyer rather than to fix the problem.  That the threat of lawsuits is a deterrent to hackers.  It isn’t.  You have a database with the names of customers and and their credit card numbers.  Threatening legal action with a room full of empty suits doesn’t matter, especially when the chance of catching the bad guys is slim. 

As Hotz points out, engaging the hacker community may be the best option.  Hackers are, for the most part, highly intelligent and creative people who are usually more than happy to point out the failures of your system. Make it a once a year game – give the money you would pay an overpriced lawyer to write nasty letters to the first person who can crack your system and show you where to fix it.  Admit you don’t have all the answers. 

After this fiasco, it might even be seen as a huge cost savings.

A Perfect Storm?

The outage at Amazon over the last two days now has been more than disconcerting. Many businesses have been sorely affected, and unfortunately at the time of this writing still are.  The social news site, Reddit has now been under “emergency read only” mode for over twenty four hours. Quora was hit hard yesterday, but seems to be slowly coming back.  All Things Digital has a list of companies that were hit, and opened up comments so that readers could add others they missed.  The list is impressive.

But unfortunately, the big question is still unanswered.  What is going on?  Amazon has been tweeting and posting as to the fixes and status, but no one has answered the basic question.  In fact, reading the messages coming from Amazon, it felt as if the public is hearing “Don’t Panic”, while all hell is breaking loose behind the closed door. As people have pointed out, it sounds more like damage control rather than a full blown explanation to their customers as to the real problem.  And for companies who are using AWS, a lack of a real explanation to what was going severely hampered their own disaster recovery efforts.  Roman Stanek, CEO of GoodData blogged:

My ops people were ready at 1:00 am PT to start our own disaster recovery, but status updates completely failed to indicate the severity of the situation. We relied on AWS to fix the problem. Had we had more information, we would have made a different choice.

The guest commentary in Geek Wire by Keith Smith, CEO of BigDoor, a Seattle startup that builds game mechanics into online publisher’s Web sites was precise about this.  BigDoor relies on Amazon Web Services for their business.  And Keith’s comments echoes the thoughts of every manager of every company hit by this outage.

There are a lot of really obvious and relatively easy things that any startup can do to avoid an all-out reliance on any single cloud provider, but those things take additional time and money – two of the most important things that every startup is constrained by.

We absolutely love AWS because of the pace of innovation and scale that it has allowed us to accomplish. But after today’s episode is over, we will have a big decision to make.

We can spend cycles designing and building technical belts and suspenders that will help us avoid a massive failure like this in the future, or we can continue to rely on a single huge partner and also continue our break-neck pace of iteration and product development.

I can’t tell you today which option we will choose. But I’m sure it will be the question on the mind of many startups across the country.

Amazon’s lack of transparency is remindful BP’s mishandling of the Gulf oil spill.  One reason why people were angered then was because officials within the company were not forthcoming about what was going on.  Companies using IaaS rely on technical communications written by technicians, not lawyers.  The idea of the internet is about transparency.  This is what happens when it isn’t. 

T-Mobile Bobsleds Into Facebook

If you’re T-Mobile, you can either sit and wait for the US Government to OK the sale between you and AT&T or you can actually do something big.  T-Mobile opted for Big.  As in Facebook’s 500 million users big.  And Skype may have taken the mortal hit because of it. 

You see, today, T-Mobile announced their new Facebook application, Bobsled.  Teamed with developer Vivox, Bobsled is a web-based voice chat app that runs in Facebook .  That’s right, this lets you start voice chats with your Facebook friends from within Facebook’s chat window. All you need is a mike and speakers. You can leave a voice message for your friends and family when they are not available. You do not need to have Bobsled in order to receive a voice message. Did I mention this was free? And since approximately 88 percent of Facebook users have said that voice chat is something they want, that’s a lot of users.

How does it work?  The app is natively integrated into Facebook’s chat system. When you pull up a Facebook chat window, you can see a phone icon. If you click on that, you can call your friend. It’s instantaneous. I’ve been playing with it this afternoon.  The call quality is OK. 

So what does this mean for Skype? A previously announced partnership between Facebook and Skype has left many people expecting the two would be taking care of intra-Facebook calls, which makes the announcement by T-Mobile all the more interesting.  Apparently, someone wasn’t moving fast enough.  A possible 500 million plus users, and you know that T-Mobile is going to expand into video chat, the ability to place VoIP calls to mobile and landline U.S. numbers, and apps on all devices.  T-Mobile appears to be getting aggressive and fast.  This does not bode well for Skype. 

But besides the business of business, this is a nice to have. 

The More You Know (And Shooting Star)

Time for the weekend wrap up.  And to start, let’s look at the law, shall we?  First the firm Righthaven appears to be in some hot water.  You see, Righthaven, that wonderful law firm that sues first and asks questions later, is a little perturbed over the judge’s ruling concerning their lawsuit over Brian D. Hill, an autistic blogger from North Carolina.  How perturbed?  Enough to defy the federal judge by refilling commentary the judge had stricken from the record.  Why would they do that?  To have the 58 other bogus lawsuits assigned to another judge.  If so, they better hope they do not get the federal judge in Las Vegas, who just unsealed the company’s heretofore confidential agreement with the Las Vegas Review-Journal in a related lawsuit against political blog Democratic Underground.  This is really the one everyone should watch, because if the Democratic Underground wins, it means that every other lawsuit Righthaven has brought in regards to the Las Vegas Review-Journal could be thrown out.  Grab some popcorn and stay tuned. 

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Staying with the law, The Supreme Court will hear Microsoft call to change patent law in a way that could help both the Windows developer and many other technology firms fend off patent troll lawsuits. The move is partly a self-interested one for Microsoft, which is hoping to use the change as a way of escaping its loss to i4i in a patent lawsuit over XML in Word. Microsoft had been found violating i4i’s patenting and unsuccessfully challenged the verdict in front of the Supreme Court. However, this has the support of some of the largest companies in the industry, including Apple, Cisco, eBay, Facebook, Google, Intel, and Verizon. 

Opponents have mostly included 3M and pharmaceutical companies that are worried their patents, on which they base most of their business, will be overturned. The Pharmaceutical Research and Manufacturers of America group argued the incentive to develop new drugs would be "substantially reduced."  Patent trolls will be watching this.

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And finally, a story of lawsuits would not be complete unless you had an outraged parent.  It seems like even after Apple included parental controls over in-app purchases on games for iPhones and iPads, some parents are saying that it isn’t enough.  Earlier this week, Garen Meguerian of Pennsylvania filed a lawsuit against Apple that says the company’s policy for in-app purchases doesn’t go far enough to prevent children from buying currency or points inside apps and games. The lawsuit, filed in the U.S. District Court for Northern California, requests class-action status and asks for unspecified damages and legal fees.

You see, Meguerian brought the suit after his nine year old daughter racked up a bill of $200 after buying virtual currency for the free games she had downloaded.  While Meguerian makes the point that even though Apple requires a password not only to in order to purchase anything within the app store, but also anything within an app, it is the same password.  To which all I can do is offer a pro-tip: You should become familiar with the product you just gave your child before you do so. This is Apple, not Fischer-Price.  Somewhere along the line, you need to be responsible. 

The Ballad of George and Sony

“Christ you know it ain’t easy,
You know how hard it can be.
The way things are going
They’re gonna crucify me.”

John Lennon, The Ballad of John and Yoko

George Francis Hotz is a highly regarded 21 year-old who first came onto the scene by jailbreaking iPhones, causing a great deal of hullaballoo amongst the population. 

In the end of 2009, Hotz announced his efforts to hack the Sony PlayStation 3, a console widely regarded as being the only fully locked and secure system of the seventh generation era. He blogged about his progress, announcing that he had successfully hacked the machine by enabling himself read and write access to the machine’s system memory and having hypervisor level access to the machine’s processor. Sony announced firmware updates; Hotz then announced plans of a custom firmware, similar to the custom firmware for the PlayStation Portable, to enable Linux and OtherOS support, while still retaining the features of newer firmwares.

I will take a step back here to say at this point, Hotz was simply a home-brew hacker showing off all this gee-whiz stuff to the public. This was not anything major, nor should it have been.  In fact, the pool of those people who would actually do such a thing within the entire pool of PS3 users could fill an auditorium.  A small auditorium.  Given the fact that this population is mainly dedicated enthusiasts, what happened next is a lesson in how not to run a business.

On January 2, 2011, George Hotz posted the root keys of the PlayStation 3 on his website. Sony immediately filed a lawsuit and demanded social media sites, including YouTube to hand over IP addresses of people who visited Geohot’s social pages/videos. Paypal granted access to Sony for them to view Geohot’s PayPal account. The judge of the case has given permission to Sony to view the IP addresses of everyone who visited geohot.com (George’s website).  Two things here.  Yes, Hotz was wrong to post the keys on his website.  But Sony forgot the one law of the internet: once it’s out there, it’s out there. Better to contact George and, I don’t know, hire the kid in order to make a better product.  After all, he’s doing more for the product than their engineers at that point. 

People were outraged over the heavy handedness of Sony’s lawsuit and contributed to George’s legal defense.  Then Anonymous (that band of merry internet pranksters, God love ‘em) got into the act, pronouncing

"Your corrupt business practices are indicative of a corporate philosophy that would deny consumers the right to use products they have paid for and rightfully own, in the manner of their choosing," continues the pronouncement. "Perhaps you should alert your customers to the fact that they are apparently only renting your products? In light of this assault on both rights and free expression, Anonymous, the notoriously handsome rulers of the internet, would like to inform you that you have only been ‘renting’ your web domains. Having trodden upon Anonymous’ rights, you must now be trodden on."

And then, as they say, it was on.  It really looked like this was going to be a real fight.  Add then this article from Ars Technica this morning:

“The legal action between Sony and George Hotz has come to a close, with both sides seemingly happy with the results. Sony has Hotz agreeing not to do bad things to its hardware, and Hotz gets to be left alone and continue with his life. Neither side has admitted any liability in the matter…”

What happened?  Two things.  This was going to be a legal Battle Royale. Could you see the next five to ten years of your life being consumed by this?  I can’t.  If you’re Sony, even though you have a room full of lawyers, you have just take a massive hit publicity-wise, right when you really did not need it.  Are you willing to throw what little reputation you have left on the altar over some smart kid showing you up?  Doubtful.  Is it better that both sides take a step back, and take a breath?

Yes and no. 

The fact is, while George can now go back to his life, some of the legal questions that needed answering will not be answered.  The fact is there are lawsuits of this nature every day. The non-fight only goes to show the world that Sony will spare no expense in suing anyone over their product.  But it points to a larger problem.

I still think the worst part of this is that the copyright owners come down on relatively law abiding citizens like a ton of bricks, while the real criminals remain free to pursue their criminal enterprises. Regardless of whether you think George’s actions were right or wrong, he’s basically a regular citizen – works, goes to school, pays taxes, etc. He was there for Sony to sue, operating under his real name and with real contact information available, and not living on the proceeds of illegal activity.

On the other hand, the guys who run illegal factories turning out millions of counterfeit games, DVDs, or whatever generally go free. What is worse is that these people are known to officials who claim to be protecting copyright.  Sony is pursuing regular people like Hotz, who almost surely lost money on this whole venture, while seemingly not even attempting to pursue the acutal criminal violators who are driving around in Bentleys.

That is the real criminal act here.

The More You Know (And Shooting Star)

While everyone was busy watching the budgetary hi-jinks in Washington this week, Google re-organized itself.  The reorganization is not like most in that Larry Page wants no committees and no managers between him and the people he can hold  accountable for each Google product.  Sound like Steve Jobs?  Oh yeah.  Here’s hoping it works out as reorganizations on this scale usually do not end well, as it requires a change in the culture as well as the org.

There is also a brilliant story from Reuters concerning what happened after Rupert met Myspace. For all those who didn’t read it, it boils down to Facebook.  Zuckerberg and his team were focused on product development and innovation while Myspace had become too concerned with revenue and meeting traffic targets of its Google deal.  A point which will be missed by many out there: focus on your product and the traffic will follow, not the other way around.

Oh, by the way, apparently Rupert’s other product, The Daily apparenly is not doing too well after the splashy launch on the iPad. In the words of Nieman Labs, “The Daily is losing audience over time rather than gaining it.”  How the numbers are arrived at are not necesarily the best, but if true, this would not be good news for the King of news.

And finally, while I like Pandora, knowing that via the Android app they are sending the user’s birth date, gender, Android ID, and GPS information to various advertising companies doesn’t make me very happy.  And apparently, the US Government is looking into this.  Pandora revealed that it had been subpoenaed by a federal grand jury to produce documents about its user data collection practices on Android and iOS devices. The company said that it believes the subpoena is part of an industry-wide investigation into popular applications on both platforms.

Well, that is if the government doesn’t shut down.  If so, then App makers can breathe a sigh of relief.  At least for the moment.