Into Tech

To say that Windows Vista wasn’t a particularly successful upgrade for Microsoft would be an understatement.

It’s an operating system that’s been plagued with problems since release and among other things, just doesn’t offer enough genuine advantages over the now relatively stable and hardware friendly XP.

Although there’s nothing official from Microsoft, UK online retailers are jumping the gun by cutting the cost of the Xbox 360 console as a 60GB version waits in the wings to be launched next month. Microsoft announced US-only price cuts last week.

Play.com has reduced the cost of the 20GB Premium console to £169.99, a saving of £30 on the RRP, while Amazon UK is selling the same model for £179.99.

Microsoft however has denied that it has prompted the cuts, telling VG247:

There’s a somewhat bizarre and ethically questionable post up on the usually excellent Patently-O blog, hyping up the fact that Google may lose its patent on PageRank (which Google only holds a license to, since Stanford actually owns it). First off, this isn’t new or particularly surprising. It’s talking about the upcoming decision on the Bilski case, which we’ve discussed at length. The decision could impact all software patents, and the author is merely using the Google name to get extra attention.

Even worse, it’s misguided attention. Google is hardly a massive patent shop. It does get patents, but has rarely (if ever?) enforced them. And the idea that Google’s success is somehow predicated on its patents is pretty ludicrous. Independent studies have shown, repeatedly, that Yahoo and Microsoft’s search technology is just as good, if not better than Google’s. But people use Google because they trust Google and are comfortable using it. Google has built up a reputation — and that has nothing to do with its patents. If Google lost all of its patents today, it would have little to no impact on Google’s position in the market. If anything, it might help Google, as it would also probably end a bunch of the silly patent lawsuits that have been filed against Google.

Finally, the post is ethically questionable, as its author, John Duffy, was hired by a software company, RDC, to write an amicus brief in the Bilski case pushing for the position that software should remain patentable. This is not disclosed in the post. In other words, he’s clearly biased in favor of making sure that the end result of Bilski is that software patents remain in tact, and a little publicity campaign, stirred up by misleading claims that everyone’s beloved Google will somehow be harmed could help push public sentiment towards allowing software patents.

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A couple months ago, when the Business Software Alliance (BSA) released its latest stats on “piracy,” it’s VP of anti-piracy, Neil MacBride, gave me a call to discuss my earlier complaints about the organizations methodology. Needless to say, we did not see eye-to-eye, and the phone call did little to resolve our differences. I’m still hopeful that eventually the BSA will recognize that it’s doing more damage to its own position by publishing obviously bogus numbers. So, with the organization releasing another bogus stat today, it’s time to explain why it’s wrong and misleading.

Today’s report is an attempt to get the government involved in protecting BSA member companies’ business model, by claiming that the US is losing out on $1.7 billion in tax revenue due to “pirated” software. And, of course, it comes with a lovely quote from Mr. MacBride: “The most tragic aspect is that the lost revenues to tech companies and local governments could be supporting thousands of good jobs and much-needed social services in our communities.” And the BSA is even so kind as to quantify what that (not really) lost tax revenue could do: “For example, the lost tax revenues to state and local governments — an estimated $1.7 billion — would have been enough to build 100 middle schools or 10,831 affordable housing units; hire 24,395 experienced police officers; or purchase 6,335 propane-powered transit buses to reduce greenhouse gas emissions.”

Except that this is almost entirely incorrect and it’s relatively easy to show why:

1. The report counts every unauthorized piece of software as a lost sale. You have to dig through separate PDFs to find this info, but when you finally get to the methodology it states:
   

   
   The software losses are based on the piracy rate and equal the value of software installed not paid for.
   

   That’s a huge, and obviously incorrect assumption. Many of the folks using the software likely would not have paid for it otherwise, or would have used cheaper or open source options instead.

2. The report makes no effort to count the positive impact of unauthorized use of software in leading to future software sales. This is something that even Microsoft has admitted has helped the company grow over time. But according to the BSA’s report, this doesn’t matter.
3. The report also proudly notes: “Software piracy also has ripple effects in local communities.” However, “ripple effects” are easily disproved as double or triple counting the same dollar. Using ripple effects like that inflates the final number by two or three times. In the link here, Tim Lee explains this (in reference to an MPAA study done by IPI, but it applies here to the BSA study done by IDC as well):
   

   
   If a foreigner gives me $1, and I turn around and buy an apple from you for a dollar, and then you turn around and buy an orange from another friend for a dollar, we haven’t thereby increased our national wealth by $3. At the beginning of the sequence, we have an apple and an orange. At the end, we have an apple, an orange, and a dollar. Difference: one dollar. No matter how many times that dollar changes hands, there’s still only one dollar that wasn’t there before.

   Yet in IPI-land, when a movie studio makes $10 selling a DVD to a Canadian, and then gives $7 to the company that manufactured the DVD and $2 to the guy who shipped it to Canada, society has benefited by $10+$7+$2=$19. Yet some simple math shows that this is nonsense: the studio is $1 richer, the trucker is $2, and the manufacturer is $7. Shockingly enough, that adds up to $10. What each participant cares about is his profits, not his revenues.
   

   This is a huge fallacy that the BSA an IDC refuse to acknowledge. When I discussed it with them in May, they insisted that they only wanted to talk about piracy rates, not the loss number. I wonder why…

4. Next, if they’re going to count ripple effects in one direction, it’s only fair to also count them in the other direction. That is, they complain that:
   

   
   Lost revenue to technology companies also puts a strain on their ability to invest in new jobs and new technologies. For example, the $11.4 billion in piracy losses to software vendors and service providers in the eight states would have been enough to fund more than 54,000 tech industry jobs.
   

   But what they don’t acknowledge is the ripple effects in the other direction. That is, if (going by their assumption, remember) every company that uses an unauthorized copy of software had to pay for it, that would represent $11.4 billion in money that all of those other companies could not use to fund jobs at those companies. What about all of those jobs?

5. The BSA/IDC stat on lost tax revenue also miscounts on the point above, since it includes the lost income tax revenue from those 54,000 lost jobs, but does not count the equivalent income tax revenue from those other jobs. In fact, in the fine print, the report notes:
   

   
   “Employment losses are calculated from revenue losses, and only apply to employment in the IT industry, not IT professionals in end-user organizations. Tax revenue losses are calculated from revenue losses (VAT and corporate income tax) and employment losses (income and social taxes).”
   

   In other words, the income tax losses only count one side of the equation and totally ignore the lost income tax revenue from the lost jobs on the other side of the equation. Oops.

6. It seems likely that the eventual tax benefits of the unauthorized use of software is most likely to greatly outweigh the lost tax revenue elsewhere. That’s because the use of software within industries is a productivity tool that increases overall productivity and output, which would increase taxes beyond just the income taxes of the employees. The study, of course, ignores this point.
7. Worst of all, the report seems to assume that direct software sales are the only business model for the software industry, ignoring plenty of evidence from companies that have adopted business models that embrace free software — generating billions of dollars for the economy (and in taxes). And that’s what this really comes down to. It’s a business model issue. If others started adopting these business models as well, there wouldn’t be any “losses” at all.

Oh, and just for good measure, the report also falsely claims that: “What many don’t realize or don’t think about is that when you purchase software, you are actually purchasing a license to use it, not the actual software.” That’s not exactly true and goes directly against a recent court ruling that said the opposite and goes through a detailed explanation for why a piece of sold software is a sale with restrictions, rather than a license, using previous court precedents.

Most of these points have been made to the BSA and IDC in the past, and both organizations chose not to address them. The fact that they’re continuing to use these obviously false numbers and methodology to now push for the government to prop up an obsolete business model should be seen as troubling not just for the dishonesty of it, but for the negative impact it will have on the software industry and our economy as a whole.

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The last time we wrote about a small company called Gotuit Media, it was in 2003, when the company was suing TiVo for an excessively broad patent about recording TV while playing back TV concurrently. Apparently, the company is still in the business of suing other companies that are putting obvious ideas into practice. For example, it’s now suing Microsoft over its implementation of Silverlight-based videos for the Olympics on NBC’s website. Microsoft’s crime? Apparently the videos are going to include some metadata that will make them searchable, allowing users to search and find specific content. And, that, according to Gotuit, is patent infringement.

Of course, that’s ridiculous. If you were to tackle the problem of how to create a search engine for video, one of the first things just about any competent programmer would think of is adding text metadata to the video that would then be used for search. But, thanks to the patent system, apparently you can only do that if you’ve agreed to pay Gotuit a licensing fee.

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DNS fix zoned out

After reading articles about the net’s latest security problem, I made sure I installed the Microsoft update. Result: I could not access any web pages until I rolled my computer back, at which point everything was fine.
Jane Knight

JS: The bulk of this week’s mailbox came from Zone Alarm users who lost their internet access following last week’s Windows Update. The update was part of a netwide security effort led by Microsoft, Cisco and Sun to deal with a fundamental design flaw in the Domain Name System (DNS) discovered by Dan Kaminsky. The DNS translates memorable names (eg, doxpara.com) into the numbers used to route traffic (eg, 66.240.226.139). Anyone who can control that can send visitors to almost any site they like. Basically, hackers could take over the web.

The project involved patching or upgrading many of the net’s DNS servers and routers as well as server and PC operating systems, and it went astonishingly well. Zone Alarm seems to have been the only major failure, and the company quickly produced a patch. If you don’t have that, a workaround is to set Zone Alarm Internet Security to “medium”.

However, Zone Alarm users should uninstall Windows Update KB951748 from Windows XP, restart their PC, apply the Zone Alarm patch from
download.zonealarm.com then reinstall the update. KB951748 can be uninstalled using the Add or Remove Programs applet after ticking the box at the top that says “Show updates”.

The problem could affect products from more than 80 vendors and potentially all operating systems. Kaminsky has put a DNS checker on his website so that people can find out if their DNS server is vulnerable.

Replacing Zone Alarm

I’m concerned that Zone Alarm had all these problems while other firewalls seemed to cope OK. Are there any other free personal firewalls you can recommend?
Sally Taylor

JS: The DNS fix randomises the source port used for DNS queries: it seems the Zone Alarm firewall assumed they’d come from only one port. That may well be a one-off problem, and if you’re otherwise happy with the product, you may not gain anything by switching. This is particularly true if you have the paid-for version rather than the cut-down free version.

However, I prefer the Sunbelt-Kerio Personal Firewall for Windows XP. This starts as the full product but turns off its advanced features after 30 days, and nags you unless you pay for it. Comodo and Jetico also offer decent free firewalls. The final choice is partly a matter of taste.

Printer quest

I am looking for a very light portable printer to replace an old Canon BJC80 for conferences and fieldwork. Is there anything new out there cheaper than the new Canon Pixma iP100?
Dan Rigby

JS: Not that I know of. Sadly, all the Canon BJC ultraportable printers seem to be unavailable, and the Canon Pixma iP90v and iP100 look like the best alternatives. They’re about the same size as the BJC but heavier - it weighs 4lbs instead of 3lbs. HP has rivals such as the OfficeJet H470 Mobile Printer but at similar prices. Does anyone have any other suggestions?

Corporate iPhone?

I’d like to get an iPhone to access my work emails. Unfortunately the IT department only supports BlackBerrys.
Richard Hickson

JS: Try asking if they support anything besides BlackBerrys. If they support Microsoft Exchange “push email” and synchronisation features, then these work with devices that have ActiveSync This includes some Windows Mobile, Nokia and Palm Treo phones, and the new iPhone 3G. If they support non-BlackBerry devices via BlackBerry Connect, this works with some Windows Mobile, Nokia and other phones, but not the iPhone, at the moment. However, IT departments generally like to eliminate variations, because standardisation simplifies support and therefore saves money. If they only support BlackBerrys, it might not make financial sense to change to the system to support a single iPhone.

Backchat

· Jane McNicol wanted to move her iPod libraries to a new PC. On the Ask Jack blog (blogs.guardian.co.uk/askjack), Doctor reminded her that “if you do not intend to use your old PC, remember to de-authorise that machine as Apple will only allow you to have five machines authorised at any one time”. He also mentioned Xilisoft’s iPod Rip, “a brilliant piece of software that will transfer all your files from your iPod into your iTunes library” (xilisoft.com/ipod-rip.html).

Get your queries answered by Jack Schofield, our computer editor at jack.schofield@guardian.co.uk

We’ve covered some of the case against spammer Robert Soloway. He was arrested back in May of 2007 on criminal (rather than civil) charges. He’d already lost multimillion dollar civil lawsuits from Microsoft and an ISP. He hadn’t paid a dime of what he owed. Instead, he just kept on spamming. When he was arrested, of course, officials claimed that it would have an immediate impact on spam — but it doesn’t seem like spam has decreased at all. Earlier this year, Soloway pleaded guilty, and now the judge in the case is struggling over what the sentence should be, noting that there’s little to compare it to that may be appropriate (her closest approximation: a polluter).

Of course, Soloway is hardly the first spammer to receive a jail sentence. A few years back Jeremy Jaynes received nine years in jail for spamming. This certainly seemed excessive, no matter how much you hate spam. It seems like there would be better ways to punish spammers than give them sentences worse than some violent offenders. And, of course, for all the talk about how these long sentences would deter spammers, the only thing it seems to have deterred is their willingness to so openly brag about their achievements. There’s more spam than ever before and it’s harder than ever to track the spammers down. So, are there more creative ideas for how Soloway should be dealt with beyond just locking him up? Update In related news, another spammer has just been given 30 months in jail.

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If you were hoping that Microsoft would find it in their hearts to offer a Blu-ray drive to loyal Xbox users, it’s not good news I’m afraid.

Despite slashing the prices of its HD-DVD drives this year for anyone who’s hanging on to the dead format, Blu-ray will stay with the PS3 while Microsoft focuses on gaming and its Xbox Live service.

Back in February, we pointed out that Google was playing with fire in suggesting that a Microsoft-Yahoo merger would violate antitrust laws. It seemed fairly obvious that those statements would come back to haunt Google — a company many others have been accusing of antitrust violations. And, indeed, even with Microsoft still trying to buy Yahoo, Microsoft is now making nearly identical antitrust claims against Google concerning its ad deal with Yahoo. It’s all legal posturing, of course, in an attempt to get the government to annoy a competitor. As Declan McCullagh points out at the link above, if either company really believes that the other was violating antitrust laws, it’s perfectly free to file a private antitrust lawsuit. But, instead, both companies are playing a game in trying to get the government to be a pest for the other — and now they get to use each other’s scary monopoly language when tossing around accusations as well. So once again, might we suggest that both Microsoft and Google might be better off keeping their mouths zipped on anything involving antitrust violations from the other one?

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While the Xbox community waits with baited breath to see if Microsoft brings out a much-rumoured motion-sensing controller at E3, the company is hoping that throwing around a little bit of colour on some new 360 controllers will keep them happy.

It won’t of course but a few new colours can’t go amiss.