Bayosphere

I just received an e-mail from the press office of Virginia Governor Jim Gilmore, saying that UCITA, probably the most anti-consumer legislation in years in this nation, has passed and will become law in Virginia. It gives software and Internet companies the right to pretty much deny you all rights as a customer — and is a direct attack on open-source programming, among other things.

The magnitude of this disaster for consumers — and companies that do business with the software industry — is almost impossible to overstate. I’m depressed just thinking about it.

“Software Story Board” — A Solution to Bad Patents?

Jordan B. Pollack, professor of computer science at Brandeis University, has a fascinating proposal on how to deal with the abuse of the patent system by software and Internet companies.

The New Economy Captures the Old

Richard Li and his Pacific Century CyberWorks Ltd., a company with almost no customers but an ambitious business plan, won the bidding for Cable & Wireless HKT, the major Hong Kong telephone company. It’s the ultimate (so far) example of the new swallowing the old.

How could this happen? CyberWorks is the ultimate Internet stock play — a company that soars based on the idea that because it’s run by someone smart it must be worth mega-billions even without customers. This is nutty, folks, but it worked.

More in my Tuesday column.

America Online Pledges Open Access

America Online says it’ll open the cable data pipes it’s acquiring as part of the deal to buy Time Warner. AOL’s chief communications officer, Kathy Bushkin, sent me a copy of the “memorandum of understanding” between her company and Time Warner as proof.

The document is a good start, but it leaves some fairly large loopholes through which AOL may find ways to prevent the kind of open access it was demanding when it was on the outside looking in. I’m highly skeptical that AOL will give third-party Internet Service Providers the kind of access it gives itself. Let’s hope AOL proves my skepticism wrong.

Two reports over the weekend told stories of the so-called New Economy’s rise over the Old Economy. The former, you surely know, is the dot-com world. The latter is everything that came before, and the former seems to be overwhelming the latter at the moment for both sensible and absurd reasons.

The first report suggests that eBay or another dot-com company will buy troubled Sotheby’s (Mercury News), the famous auction house. eBay denied it, and the denial may well be true.

The other report was definitely true. News Corp. is teaming up with Singapore’s phone company (Associated Press), Singapore Telecommunications, to prevent one of Hong Kong’s most speculative ventures, Pacific Century CyberWorks, from buying Cable & Wireless HKT, a big Hong Kong telecommunications company.

UPDATE: Pacific Century CyberWorks appears to have won (AP) the bidding. Wow.

The wheeling and dealing is part of a revolution. New companies with skyrocketing market values are using stock to swallow established companies whose shares have been killed by Wall Street’s herd. America Online’s buyout of Time Warner has been by far the most prominent example, but if the market continues to go this way look for many more.

The herd is manic-depressive. The mania for all things Internet (which at last glance was taking a small breather today) has led investors to be depressed about all old companies. The resulting imbalance gives the new folks the currency they need to snap up the old.

It’s largely irrational, and simply amazing to watch.

Did Amazon Invent Affiliate Marketing on the Net?

E-mail from Daniel Gray, author of The Complete Guide to Associate and Affiliate Programs on the Net – Turning Clicks Into Cash

PC Flowers & Gifts stated that their affiliate program came online in October 1994. AutoWeb’s program came online in 1995.

A good number of programs–including CDNow–came out after Amazon’s program but before the patent filing.

SEE ALSO:

The contents of this post have not been recovered from the archives yet.

Tara Calishain let me know that Amazon, the online retailer, is turning into Exhibit A for the disfunctional patent system. She pointed to a TechWeb reports that Amazon has won a patent on affiliate programs.

The patent refers to “an Internet-based referral system that enables individuals and other business entities (‘associates’) to products, in return for a commission, that are sold from a merchant’s website.”

You’ll recall that Amazon got a patent for its “one-click checkout” system. This was outrageous enough. This is yet another another patent that should never have been granted, and it’s probably even worse.

DoubleClick Isn’t the Only Online Surveillance System

Even if federal and state investigations force DoubleClick do the right thing on the privacy front, other companies will be happy to step into the breach (Forbes.com story).

Search Engines Find More than Expected

If I ran a Web site and cared about security I would take a look at this report suggesting that sites are exposing much more information than they may intend.

None of the Above You’ll have that option on political ballots if voters approve Proposition 23 (Mercury News story) in California’s election March 7. It’s the brainchild of Al Shugart, the disk-drive enterpreneur and Silicon Valley’s trailblazer.

I’d support this initiative if it required that a new election be called when “None of the Above” beat all the other candidates in an election. But this doesn’t prevent bad candidates from winning. You’ll only be making a toothless statement, throwing away your vote.

The juxtaposition is delicious — and instructive.

The Register, a superb online technology news site based in London, reports that CeBIT, the huge German technology trade show, is treating online journalists as second-class citizens.

But it was The Smoking Gun, a Web site, that broke some major news — that the “groom” in the sleazy “Who Wants to Marry a Multi-Millionaire?” TV show had some nasty stuff in his background, namely a threat to kill an ex-girlfriend and a subsequent restraining order against him, according to court documents.

CeBIT does have a problem if it issues credentials to everyone calling himself or herself a journalist. Who’d pay to get into the show, after all?

Sports events have been banning online journalists from press boxes, meanwhile, for much the same reason.

The dilemma is real. But the issue won’t go away — and neither will online journalism. It’s here to stay folks, and some of it is very, very good.

See Wired News today. I’d quibble with the assertion that content is king on the Net, which has yet to be proved, but it’s a good piece otherwise.

More Bad News from the Privacy Front

I’ve been making it a point lately to test the privacy features of Web sites and other kinds of interactions I have with businesses. I do this both because I want to guard my own privacy, and to collect data for this journal.

The latest news is, I’m not surprised to say, the usual dismal stuff.

SkyMall’s Weasely Language

On a plane last week I saw an item in the SkyMall catalog that I wanted to buy. I ordered via the Web site, where the privacy statement says, in part:

If you have made a purchase at skymall.com, registered for one of our affiliated services or benefits programs, or signed up for another special offer or opportunity, we may occasionally update you via email of specific opportunities we feel may be of special interest to you, or we may supply your name to carefully screened companies who we feel may have products or services which will be of interest to you. If you would prefer not to receive notice of such opportunities, simply indicate this during the checkout process: simply make sure the box next to the statement “Please make my name available to carefully screened companies whose products and services may be of interest to me” is not checked.

No such box exists.

Now, there is a box at the beginning of the checkout process that says, “Yes! Please keep me up to date on skymall.com products and services which may be of interest to me.” A SkyMall spokeswoman, who seemed surprised to learn that the language in the “Privacy Statement” didn’t exist as a check-off option, told me that this other box was intended to cover all marketing situations — in other words, if I unchecked it I’d be removed from any third-party solicitations. Yet the actual box makes no mention whatever of third-party companies, a giant loophole that any lawyer could drive a truck through.

The spokeswoman said the site had just been upgraded — “It’s version 3.0,” she said proudly — and that there must have been a mistake somewhere. Uh, huh.

GTE Wireless and the Hoops Routine

I’m shopping for a new mobile phone service, and GTE Wireless seems to have the best deal for me. But when I called the company to inquire about the privacy of the information I was giving up, I got something between a stonewall and runaround.

First, in a GTE store, a salesperson said she could not give me any more information than was on the “standard” contract, which has the usual ambiguous and consumer-unfriendly language. Then I called the company, and was put on hold endlessly as customer-service folks called supervisors to try to get answers to my questions.

I asked how I could ensure that my personal information would not be used for any purpose other than internal record-keeping — that it would not be bartered, sold or otherwise find its way outside GTE. I was told that had to write a letter to a certain department, which would then mail me a form that I could fill out and fax back to be taken off marketing lists.

Okay, I said, just give me the fax number. I’ll fax a request for the form, and save the time of waiting for the Postal Service to deliver a letter that might get conveniently lost by the company. No way, said the “customer service” person — I had to write a letter, even though at some point I’d be faxing the form back to GTE.

It’s obvious that GTE’s system is designed to make people like me so weary of the hassle that we’ll just give up. Then GTE can go about its business of trading our personal information.

I’ll be calling GTE’s public-relations folks for a comment on this minor outrage, and will let you know what they say.

UPDATE:

Susan Asher, a spokeswoman for GTE Wireless in Atlanta, says I apparently got misinformation from the customer service department. I didn’t need to fill out a form, and I should have been given the fax number to which I could have simply written an opt-out letter.

That letter would have applied only to what she called internal GTE marketing, according to Asher. “We don’t sell customer information for any purpose,” she said.

I asked if the company hired third-party telemarketers to pitch GTE products or services. Sometimes, she said, but they get specific instructions on what they can do — and must not do — with that information.

But third-party telemarketers have been known to go beyond such instructions. That’s why I always opt out of this kind of thing when possible.

Oh, By the Way, Remember Auto-by-Tel?

Several years ago, Autobytel.com, the online auto sales outfit, violated its privacy statement with an unspecified number of users. I was one. I’d opted out of its third-party marketing stuff, and nonetheless got a credit-card solicitation.

What terrible mistake! said Autobytel.com’s PR person. She said I and others who’d been pitched despite our specific instructions not to be pitched would be getting letters of apology from the company.

I guess that letter got lost in the mail, after the dog ate it.

Microsoft’s Latest Violation

Wired News reports that Microsoft continues to be surprised by the capabilities of the software it writes and sells.

The personal computer marketplace is a collection of horizontal slices — CPU, OS, graphics hardware, apps, etc. Intel and Microsoft own many of those slices, but no company owns them all. This isn’t the way it was in the mainframe era, a vertical market dominated by IBM.

Vertical-market technology seems to be coming back, in the new information appliances. I explain what I mean by that in my Tuesday column in the San Jose Mercury News.

Microsoft and Justice Face Off Today — What Has Changed?

Our favorite monopolist squared off today (Mercury News story) against the U.S. Department of Justice, a bunch of state attorneys general and the District of Columbia. The occasion will be oral arguments in the antitrust case.

U.S. District Court Judge Thomas Penfield Jackson’s scathing “findings of fact” in the antitrust trial last fall were an obvious prelude to a verdict on the law — a verdict that almost certainly won’t come out in favor of Microsoft. The findings led Microsoft to launch a PR offensive. The idea was to convince the public that even if it was found guilty of wrongdoing — of course, the company continues to insist that day is night and night is day — the offenses didn’t justify any serious remedies.

Wrong, wrong, wrong. Microsoft is still by far the most powerful single force in the technology industry. The woe-is-Redmond chorus is a combination of wishful thinking and misinformation.

Anyone who thinks Microsoft’s clout is ebbing should read the March issue of Wired magazine. An article by John Heilemann tells how Silicon Valley’s most powerful executives showed all-too-typical cowardice late last year when it came to standing up to Microsoft. They cravenly ducked when the government asked for public support for stern antitrust remedies.

Since then, Microsoft has reported yet more massive earnings and revenue growth. It continues to generate cash at an accelerated rate despite going on a wild spending spree for new technology to complement Windows and its applications. Those investments guarantee Microsoft a strong position in whatever markets emerge in coming years. Investors have made Microsoft the most valuable company on Earth. This is not what happens to a pitiful, helpless giant.

The apologists for the H-1B visa program, which brings tens of thousands of high-tech workers into the U.S. each year, won’t be able to ignore this scathing investigative report in the Baltimore Sun.

Is MCI-Sprint Merger Anti-Competitive?

Of course it is, though the U.S. antitrust authorities are sleeping at their guard posts on this one. Luckily, the European Union monopoly watchers are looking hard (Reuters story) at the deal.

Last week in Silicon Valley, Microsoft launched Windows 2000 and Symbian, the mobile-phone companies’ operating system partnership, held a developers conference. These events were about platforms — the foundations from which technology empires are built.

Actually, I don’t much like the word platform in this context. I prefer “ecosystem” — it seems more apt.

More on this in my Sunday column, the first of two parts relating to this topic.

eBay Passwords — Beware

Richard Fromm at Berkeley says eBay doesn’t encrypt users’ passwords, and that the online auction site doesn’t seem especially interested in fixing the problem.

How Apple Compensates Steve Jobs

Apple’s CEO, Steve Jobs, got an airplane and a pile of stock options as compensation. Apple’s accountants and auditors played some interesting disclosure and accounting games. Read all about it in Jim Mitchell’s revealing analysis in today’s San Jose Mercury News.

Local Equals Long Distance

The Swedish telephone company, Telia, has told its customers to ignore the distinction between local and long distance calls originating on the company’s land lines. This is a major breakthrough in the world of telecommunications — or is it?

Actually, it isn’t. For the past several years I’ve been using a wireless phone service that also ignores the difference between local and long distance, and which doesn’t charge extra for roaming. The network doesn’t care whether I’m calling around the block or across the nation. Why should the billing department?

This is the future, folks, and it was predicted long ago by none other than Arthur C. Clarke, the great science fiction author. One of these days, it’ll cost the same to call my relatives in London as it does to call my neighbors. And that cost will approach zero.

UPDATE: Matts Olsson writes from Sweden:
I read your E-journal (as I frequently do) about Telia and their decision to ignore the distinction between local and long distance calls. The decision was only an response to Telias competitor Tele2. Who had made an exactly similar offer to its customers a couple of days earlier.

FBI Director Louis Freeh, who wants to restrict your right to use strong encryption that law enforcement can’t break, now thinks it’s a fine idea to apply federal racketeering laws (Register story) to hacking. Before you applaud, consider what this would mean.

The RICO statutes were originally aimed at so-called kingpins of organized crime, and then became a favored weapon in the War on Some Drugs. The laws invite abuse.

One of the biggest abuses has been in the area of forfeitures, where the government takes property allegedly used for illegal acts. The way the forfeiture laws work, however, is to give the government great incentive to take now and return never, even when the alleged criminal has done nothing wrong. That’s because the laws put the burden of proof on the person whose property has been taken — turning the Constitution on its head, but legally because, in the perverse logic accepted by our court, there’s no harm to the person. It’s legal theft, and law enforcement does it all the time.

But then, law enforcement would never target an innocent person, right? Just ask all the people who’ve been framed by the Los Angeles Police Department.

The Latest Ridiculous Patent?

NextCard, the credit-card company, says it’s nearing a patent (San Francisco Chronicle) on applying for credit online. If so, this would be yet another example the Patent and Trademark Office gone off its collective rocker.

If taking an application for credit isn’t obvious, nothing is. Patents are not supposed to be granted for obvious things, but they’re being granted all the time for things we do in the offline world, with the novelty being that the activity is now online.

Software and business method patents are a total scandal, but Congress and the Patent Office just lets the system keep rolling along. Consumers, and the free enterprise system, will be the ultimate losers in this foolish game.

Windows 2000 Bug Reports, Continued

Mary Jo Foley, the reporter who wrote of an internal Microsoft document discussing more than 60,000 possible bugs in Windows 2000, got the usual Microsoft treatment along the way. The company wouldn’t discuss the specifics when she asked for a comment before running her story. Then Microsoft denied the whole thing to everyone else, including me. Then it punished Foley, canceling interviews with senior executives at the Windows 2000 launch.

During the antitrust trial, Microsoft executives repeatedly told the court that internal documents didn’t mean what they plainly did mean. The judge didn’t believe a word of their testimony, as his findings of fact proved.

When it comes to believing what Microsoft says, extreme skepticism is always the best approach. See what Microsoft does.

Speaking of the Windows 2000 launch, it was incredibly depressing to see the actor Patrick Stewart shilling for Microsoft. I thought the man had more class.

Silicon Valley Light Rail — Not an Easy Commute

The other day I had to leave my car at home. I decided to take public transportation to my office. Not fun.

The trip, which takes 20-25 minutes by car, took 75 minutes by a combination of foot, light rail and taxicab. And I didn’t have wait more than two or three minutes at any stop for the next mode of transportation.

I would much rather take public transit than drive. But not when it takes three times as long to make the trip. That’s nuts.