Remember the Internet kill switch that Senate leaders couldn’t get past enough of their cohorts to pass? It’s back! In the United States Senate, bad ideas don’t die, their proponents simply try a different ploy to sneak them into law. This time senate leadership is working to bury it in the bowels of another one of those 1500+ page bills that they never give members enough time to read.

The  culprits are Senators Thomas Carper, Joe Lieberman, Jay Rockefeller and Harry Reid. Lieberman recently provided a bit if insight into why the kill switch is “necessary”

Lieberman let slip his real thoughts on the Internet Kill Switch in an interview with CNN’s Candy Crowley when he said, “Right now China — the government — can disconnect parts of its Internet in a case of war. We need to have the ability to do that, too.” (Libertypulse)

Obviously Joe Lieberman has a strong case of commie envy. There are a number of things the Chinese government can do that even self important elites like Lieberman aren’t allowed to do in the still largely free nation of the United States. The biggest problem with giving the kill switch to the feds is that an out of control federal government can declare an emergency just about any time it wants to. So, if a rogue president, senator or any other power grabbing high level bureaucrat simply wanted to kill communication between the unwashed masses, all he or she would need to do is declare an emergency. In case you hadn’t noticed, just about every for of communication passes over the Internet now. For that reason, the kill switch is a tool no one in a free nation should have. Not even the almighty Senator Lieberman.

If you value your freedom it’s probably a good time to write to both of your senators.

It’s no secret politicians in general hate blogs. The great unwashed masses more likely to report unfavorable facts and rumors. Bloggers do not share the mainstream medias’ fear of losing access the political class since they don’t really have any to begin with. The city of brotherly love has no love for bloggers. It’s joined the growing list of government entities who are working to make life more difficult for the citizen publisher.

According to the Washington Examiner,  Philadelphia demanding bloggers pay a $300 licensing fee in addition to taxes on any income thya may generate. It would seem that blogs have been classified as a businesses without any provision for the average blogger. Most bloggers are hobbyists who may pick up enough revenue to offset only a portion of their costs. I wonder how that constitutes a business? And what of other casual online activities that may generate a little revenue from a hobby like arts and crafts, micro stock photography, or dare I say Ebay? While I’m sure this will result in fewer blog posts originating in Philadelphia, I doubt it will generate much revenue.

Both Dell and HP are reporting healthy gains due to a recent bump in IT spend. I’d love to paint a rosy picture about the end of the tech depression, but we’re still far from catching up to where we’ve already been. In fact, IT spend is yet to fully recover. It has been in free fall for the last 3 to 4 years, and many I know in the industry will argue budgets have been shrinking for a decade. If anything a bump had to come along soon just because stuff is wearing out or it’s become cheaper to replace  than maintain.

I don’t expect this will create a better job market the army of American IT workers who are unemployed and under employed. Much of the engineering, manufacture and support takes place elsewhere these days.  The current federal policy has been open hostile to all tech. That means new investment is likely to take place where policy, regulation and tax rates are friendlier.

While we’ve heard lots of rhetoric about new growth in “green tech jobs”. The reality is that they have been few and have only come with heavy government subsidies. In an of themselves, endless government subsidies are not sustainable.  Sustainable jobs are created by a competitive market and minimal government interference. We need to put some green back in peoples wallets with sustainable, non-subsidy dependent jobs, creating goods and services that have real market value and generate real profits. What we don’t need is more un-sustainable rhetoric.

Meanwhile, Dell and HP shareholders can rejoice. I’m betting many will take their profits this year before taxes go up.

Tom Silverman is a guy who has been in the music biz longer than I have been in IT. So he knows the trade and its tricks. It is refreshing to hear an insider to state that the current music model is broken —

One of the biggest problems with the old model, which has been going for 50 years, is thinking, “We’re the labels, they’re the artists, and we make money even if they don’t make money. We reduce our risk, they put their blood, sweat and tears into it, and we only give them money when we sign them and when they deliver a new album.”

In between, the only place where they get money is from their booking agent, because they’re touring. They all love their booking agent, because their booking agent gives them a check every month, or every week, and we only give them a check every year and a half when they deliver a new record — and most of that money goes to their lawyer, manager, the taxman, and making the record. Not much of it ever goes in their pocket, and that’s been true for 20 years. Unless they have a five million seller, most of that money goes into that project. Of course they don’t like the labels, because they’re not getting that reinforcement of regular cash flow. They see the labels making money, and them not making money on records.

He also considers the use of the Internet and social networking much a waste of time. Even though in this same article he admits that Susan Boyle broke thorugh on the basis of internet presence. –

No, I think you have to be out there. You have to spread the word to get exposure, but I think the problem is context. When you’re in a glutted environment, you need to differentiate yourself more than ever, so you need a great story. Story is context; it’s not content. The songs on Susan Boyle’s record are forgettable, and her performance is just okay. There are a million singers who can sing that well at least. It’s just the story that sold it. If people could learn from her, regardless of what kind of music they did — “How can I make my story so that when people hear it, they have to spread the word?” That would activate the medium more effectively than trying to get another 50,000 followers on Twitter, which doesn’t seem to do much at all.

Silverman also suggests a different management model. Using LLC’s and Silicon Valley type investment techniques. Oddly we suggested that very thing on this blog well over a year ago. And it is right.

But there are some pieces that Silverman I think is missing –

• The first is good talent is extremely common, and extreme talent is in good supply. Go into any good size church in the USA and there are probably 2 singers in the choir equal to or better than what is screamed out of Hollywood. Is that the case?

  Empirical evidence. Neil Sedaka held a contest with several radio stations as part of a record tour/sale 5-6 years ago. Thousands were screened by the radio stations. Sedaka was floored that several hundred were good enough to be considered by his measure of talent. Anecdotal I know, but good talent recognizes that in others.

  Value in many ways is a perception, especially when the goods are of a nonphysical nature. So when the perceived supply of the goods rises dramatically because consumers perceptions are altered by the sheer volume of good choice the cost curve must drop. Its supply and demand. There is a huge talent supply and only a finite consumer supply.

• The other is this one. Silverman sees it, calls it the ‘clutter the marketplace’. He is of course, right. $3k and you can foam a garage, buy mikes and stands, a 2yo PC and a midi/mixer card and have the equivalent of what a decade ago cost $500k. So anybody can be in it if they want it enough, such is modern technology.

  But again that is not the biggest issue as I see it. Look the big labels are soon to be gone. They are right now where the major studios were back in the 60’s. Then as now, every release had to be a mega blockbuster as that what the audience expected but the costs were beyond belief. The end game will be the same too. Fundamentals now are also different.

  A band, even if it does not break thru to the levels that Silverman expects which is 100k distribution as the floor. Well run the numbers at $10 per disc. $1m gross. Deduct 5% for production costs. (Yes that cheap.) Zero out distribution costs as most bands at this level would sell either direct over the internet or more likely direct at the concerts wher they make most of their money anyway So out of say $900k split 10 ways with band, light, stage men that is still $80-100k. No you won’t get overnight rich at those numbers, but that is a descent upper middle class income with unlimited upside you you do break thru.

To an extent Mr. Silverman’s lament recognized for what it is runs head long into supply chain economics. The Internet has eliminated the middle man in most cases. Producer and retailer become one. No industry is immune from it even music. And for a lack of a better analogy, iTunes IS WalMart in the music industry.

Linky

It’s no secret that anti-business policies can wreck an economy. The persistent recession is proof of that. The problem is, when you kill growth, you also kill tax revenues. When the revenue slides, government tends to look for new any new way to tax.

Rep. Bill Delahunt (D-Mass.) has teamed with four Democratic co-sponsors to introduce the Main Street Fairness Act, legislation that aims to put online retailers on a par with their brick-and-mortar counterparts regarding the collection of sales taxes.

Internet retailers typically only collect sales taxes in states where they have a physical presence, such as a corporate office, call center or distribution center, though some states have enacted laws to impose collection requirements on ecommerce companies that generate sales through referrals from affiliates.

Delahunt’s bill would authorize states that participate in a voluntary consortium that aims to harmonize the byzantine web of state and local tax rules across the country to require online retailers to collect and remit taxes on residents’ purchases. (Ecommerce Guide)

The current system of not requiring merchants with no presence in your state to collect tax from buyers in your state has been with us since the time your great grandfather mailed money orders to Sears. In that era there may have been some lack of parity, since mail order companies tended to be located in large population centers. States and localities were free to require payment of sales tax on residents out of state purchases, but needed to collect directly from the buyer in their state. Over time, most states have enacted laws requiring locals to pay sales tax on out of state purchases, but have only been able to force retailers with a local presence to be their unpaid tax collector. For all practical purposes, no sales tax collected on purchases from smaller concerns out of state.

With the advent of online commerce, the advantage enjoyed by the mega corporations has been diminished. A new level paying field benefits all states from online businesses who hire local people and pay local taxes.  The lure of not having tax added to purchases has helped small sellers woo buyers, but more as an offset to the disadvantage of added shipping charges.  The lack of accounting woes that playing bag man for 50+ taxing entities would create also allows the little guys to run an online shop with a smaller investment. With so many Americans starting businesses to support themselves when there are few jobs to be had, that’s important.

The dirty little secret Rep Delhunt and his cronies don’t want you to know is that the current sales tax system is working well. Even if tax is not collected from local buyers,  sales are also made to out of state buyers by local business, increasing the local tax base.  Every state benefits from small business selling online. If there is any advantage, it goes to the states who are friendly to small business over those who only offer special treatment to corporate giants.

Who really benefits from this proposed tax law? Mega retailers like Wal Mart. In fact, Wal Mart has lobbied long and hard for this type of legislation.  I have no doubt there are plenty of local government Luddites who do not understand the advantage of freeing small enterprise from the burden of playing tax collector for 50 different states. While they may back it  this legislation, if passed, I believe the new law will actually decrease revenues in most states as millions of marginal micro businesses will call it quits.   This is a full assault on small business and technology as a great equalizer for the little guy. That’s a bad idea in good times, and sheer stupidity in times like these.

I’ve been monitoring the chatter about a Senate panel that is pushing the Obama administration’s request for an internet kill switch. I had believed that such an ill conceived idea wouldn’t be with us for long after a little rational debate. Unfortunately, the legislation is advancing.  The bill’s front man, Senator Joe Lieberman, insists that the authority is needed and claims his panels legislation will actually impose more limits on the president.

Senator Joe Lieberman and other bill sponsors have refuted the charges that the Protecting Cyberspace as a National Asset Act gives the president an Internet “kill switch.” Instead, the bill puts limits on the powers the president already has to cause “the closing of any facility or stations for wire communication” in a time of war, as described in the Communications Act of 1934, they said in a breakdown of the bill published on the Senate Homeland Security and Governmental Affairs Committee website. (Techworld)

For me, there’s a contradiction in the senators claims. The act not only grants authority to seize control of non-telecom public networks (something it is not currently allowed to do), it also creates a new bureaucracy with limited accountability.

The bill, introduced earlier this month, would establish a White House Office for Cyberspace Policy and a National Center for Cybersecurity and Communications, which would work with private US companies to create cybersecurity requirements for the electrical grid, telecommunications networks and other critical infrastructure.

The bill also would allow the US president to take emergency actions to protect critical parts of the Internet, including ordering owners of critical infrastructure to implement emergency response plans, during a cyber-emergency. The president would need congressional approval to extend a national cyber-emergency beyond 120 days under an amendment to the legislation approved by the committee.

The legislation would give the US Department of Homeland Security authority that it does not now have to respond to cyber-attacks, Lieberman, a Connecticut independent, said earlier this month. (Techworld)

I’m sorry Joe, this is a very bad idea. I doubt you and the other bill sponsors even manage you own email, let alone possess even the most cursory knowledge on securing networks. In fact Joe, the federal government repeatedly under performs the free market in securing its own networks and systems. In other words you’re just not qualified to create best practices, let alone implement them.

As a very young infrastructure, the internet has been phenomenally resilient and secure. It’s no secret that private control has made the net as secure as it is today. Having said that, there is a need to harden all of our systems nationwide. We are under investing in security. One of the largest obstacles to increasing IT budgets to improve security has been the escalating costs of compliance with federal IT regulation. Most of these regulations come down from well meaning folks like Joe Lieberman and the bureaucracies they work tirelessly to create. Turning over control of critical networks to an under performing agency like  DHS is just insane. The agency can’t even effectively enforce something as simple as  a no fly list.

Joe, if you want to help, you should roll back the compliance load you have already placed on private IT and networks and encourage companies to invest some of that money in security. In the event of emergency, private network managers who are already up to the task will be able to respond much more quickly and effectively without the burden of complying with even more federal oversight.  If you really think the bureaucracy can do a better job of securing systems then start with the ones you are already responsible for. When you can prove that the feds really are up to hardening their internal systems  we can discuss that kill switch. Until you can get your own house in order, hands off ours please!

A discussion draft of proposals from FTC staffers shows how out of touch and dangerous these folks could be if given free reign. Seeming to believe that the news business is dying, many of these wunderkinds’ brainstorms nudge closely to the edge of proposing a state run media:

* Expanding copyright law and restricting the doctrine of fair comment to benefit legacy publishers.

* Granting antitrust exemptions to allow publishers to collude on pricing to consumers and to business partners.

* Giving news organizations tax exemptions.

* Subsidizing news organizations by increasing government funding to public broadcasting; establishing an AmeriCorps to pay reporters; giving news companies tax credits for employing journalists; creating a national fund for local news, and giving the press an increased postal subsidy.

To its credit, the FTC does ask how to pay for all this. So the staffers speculated about what I’ll dub the iPad tax — a 5 percent surcharge on consumer electronics to raise $4 billion for news. They also consider a tax on broadcast spectrum and even on advertising. (NY Post)

Anyone who can use a search engine will find no shortage of news. There are so many outlets and so much information that the devoted news junkie can go into overload 24×7 with a few clicks. Many news sites make a tidy profit, and many don’t. Not everyone reporting on events expects to profit.

Information has become abundant, because  reporting and publishing is now the business of anyone, not just a few elitists. When cars took over the roads, the horse shoe business died. Metal working did not. Old media can’t survive in it’s current format, but it can adapt. The FTC staff has no place in attempting to interfere in a robust and competitive news market. If the FTC really wants to make life easier for fledgling journalists, it would work to make broadband as cheap and pervasive as the news is .

While the vast majority of Americans enjoy a holiday, and the rest of the free world slows down for the weekend, I hope you’ll pause to remember the sacrifice the US armed forces have made and continue to make every day.

To those who have served and those who  serve today, the Thirdpipe and Tightwad Technica team applaud you. Most importantly, we honor our best and brightest who paid the ultimate price so we can be free to enjoy a day of leisure.

Facebook’s privacy gaffe is nothing new in the corporate world, but remaining in denial about it could only make things worse. In what reads like the idealistic musings of a CEO manchild, Mark Zukerberg’s attempt at polishing this turd comes across as very dark humor to the more savvy reader:

The challenge is how a network like ours facilitates sharing and innovation, offers control and choice, and makes this experience easy for everyone. These are issues we think about all the time. Whenever we make a change, we try to apply the lessons we’ve learned along the way. The biggest message we have heard recently is that people want easier control over their information. Simply put, many of you thought our controls were too complex. Our intention was to give you lots of granular controls; but that may not have been what many of you wanted. We just missed the mark.

We have heard the feedback. There needs to be a simpler way to control your information. In the coming weeks, we will add privacy controls that are much simpler to use. We will also give you an easy way to turn off all third-party services. We are working hard to make these changes available as soon as possible. We hope you’ll be pleased with the result of our work and, as always, we’ll be eager to get your feedback. (Washington Post)

I have a little advice for Mr. Zuckerberg and other CEO’s who have wreckless disregard for their customers privacy : If you insist on polishing these turds you pass of as user agreements with opt outs to protect privacy, then try using the correct tools*. Of course, it would make much more sense to dispose of all of these turds, and clear the air for good.  But CEO’s will be CEO’s , trying to monetize customers like they were herds of cattle, even if they like to portray themselves as an idealistic manchild.

Customer information should only be shared with prior informed and acknowledged consent, not with an opt out provision buried in the legal minutia of a user agreement.

* Correct tools and image courtesy Dr. Guff’s who has not compensated us in any way.

With the FCC’s broadband baseline set at a paltry 4MBPS, Europe’s recently announced 30MBPS standard should be sounding alarms.  There’s much more to the story than just the minimum acceptable broadband speed arbitrarily set by bureaucrats. The back story is competition and the role it plays.

European broadband has been lead by healthy competition in the most unlikely of places like France and the UK. That open market that includes last mile line sharing for  competition has raised the standard urban connections to some of the world’s most robust at some of the world’s lowest prices. Competition has forced the old school telcos to upgrade infrastructure and streamline operations. New networks cost considerably less to run. And ….. we hear no whining about the need to recover investment in decades old infrastructure.

With the sea change that has made free and accessible information and media the fuel of economic development critical to economic security, broadband competition should be a top priority. At the risk of bending Third Pipe editorial policy on political posts, I have a question for the Obama administration: While you are so eager to emulate all failed aspects of European socialism, why do you shy away from emulating what the Europeans are doing well?

The grand master plan for European broadband is out, and one target leaves the United States in the digital dust—a goal of 30 Mbps “or above” for all Europeans by 2020. So says the European Commission’s Digital Agenda for Europe, which also wants 50 percent of EU households subscribed to links of 100Mbps or more by that year.

….Needless to say, Europe isn’t jealously comparing itself to the United States, high-speed Internet-wise. Here our supposedly bold and fearless Federal Communications Commission thinks it’s cool by setting a pokey universal broadband goal of 4Mbps, sans fiber, which the agency says costs too much. (ARS Technica)