On The Margins

Monday August 23, 2004

[ Society ] How many intelligence organizations?

Judge Richard Posner has written about breaking up the CIA.

The most important benefit of multiple intelligence organizations is a certain fault-resilience that they together introduce into the system. That fault resilience will be lost in a single organization.

If there's a single organization, and that single organization gets things wrong, lives could be ruined. Multiple organizations add ability to view facts from multiple angles and with different attitudes. They are also harder to subject to a single political force.

The problem of U.S. security is not one of organization but one that is caused by a global posture that breads enemies through the carnage it unleashes. (The intentions are almost irrelevant.) To minimize backlash, we need to reduce the asocial, conflictual attitude in dealing with the world and build an attitude based on "commerce" and "exchange."

East Asia and Europe seem to be the masters of that transformation.

2004-08-23 15:52:08.0 -- ; Permalink ; Trackback.

[ Economics ] Dying Culture

Richard Posner, the honorable guest at Lessig Blog, has written a short piece about the Eldred decision. He is correct that Lawrence Lessig has "from time to time" self-flagellated about losing the Eldred decision at the Supreme Court. (See chapter 13 and 14 of Lessig's Free Culture.)

Frankly, I don't see anything dishonorable in feeling shame. Particularly when something happens on your watch, and Eldred did happen on Lessig's watch, shame is a noble feeling. It may have been better not to argue the case at all, as Lessig notes himself in his most recent book. So, I applaud Lessig for flagellating himself on this, at least for a while. In any case, he has now recorded his feelings in his book and can move on to more interesting stuff.

Now, let's stick to the actual issue Posner has mentioned.

First, I don't think anyone would argue with Posner when it comes to the importance of propertization as an incentive to the owner to conserve and nurture his or her property. In fact, it has been argued by many economists, including Nobel Economics Laureate Douglass North that secure propertization is essential to economic progress. (See here.) This has been well established by him and other economists who have written since the Second World War. (North has also made some other interesting, general points about the role of technology in economic development.)

Second, Posner is right when it comes to a relativistic interpretation of the "for limited Times" term in the Progress Clause of the Constitution. However, Lessig has also realized that fact. In his book, he has noted that insisting on a reasonable interpretation of "for Limited Times" in his arguments was not a winning strategy before the Court. Lessig says that he should have argued from the "Free Culture" point of view. In other words, he should have said that extending limited terms is harmful to basic freedoms in our culture. However, I think even that argument has some flaws in it. First of all, no culture is truly free. We all live with and are rooted in our pasts. If any institution in the U.S. government knows that fact well, it should be the Supreme Court. So, emphasis on "free," instead of on "roots" might not always work with the Court.

Last but not least, copyright term extension beyond a certain point, as Lessig has analyzed so skillfully, promotes the death of culture much more efficiently than it stifles free culture. (That is why I think Lessig should have chosen a different title for his book but it could have become too dramatic. I don't know?)

Death of culture through repeated copyright extensions going well beyond three or four generations happens in several essential ways.

• Only "cultural" products for which current economic value can be extracted are protected and nurtured into prosperity.
• With continuing copyright term extension, many pieces of potentially valuable cultural works that are not currently and commercially active remain silent and could be lost to history because it costs more to clarify their copyright status than can be earned by making them available to public, either directly or through "mixing" in other cultural products.
• Continuing copyright term extensions also prevent active mixing of the past into the future. If copyrights are allowed to be extended beyond a certain point, going for more than three or four generations as the case may be, it becomes increasingly more problematic to do such cross-generational mixing of cultures beyond what is made available through commercially active culture. That's the true loss.

2004-08-23 15:10:38.0 -- ; Permalink ; Trackback.

[ Telecommunications ] Pricing Unbundled Network Elements

I wrote earlier about the Telecom Act of 1996, focusing on its provisions regarding unbundled network elements.

Pricing of such elements has been a point of contention between the FCC, the local exchange carriers and their competitors. The FCC has required the incumbent carriers to provide their elements at a discount, while the carriers prefer a pricing model that emphasizes current costs of maintaining the network.

This past Friday (August 20, 2004), the FCC forze prices incumbents charge to competitors for six months.

Some say this has been done at the request of the administration, to prevent price hikes prior to the upcoming presidential elections. The 3-2 vote was on party lines. Anne Marie Squeo of the WSJ reports that

Bell officials have repeatedly said their interpretation of the March appeals-court ruling, which went in their favor, is that they no longer have to lease all the various parts of their networks at discounted prices to rivals. The companies contend that the wholesale rates don't cover their costs for maintaining the networks. Rivals, who repackage the Bells' service and sell it to residential and business customers, have taken more than 19.5 million customers from the Bells through such arrangements during recent years.

The differences over the 1996 telecom act are sure to conintue. If the network operators are not allowed to charge real prices, they will not have the incentive to upgrade their networks with new equipment and will have to resort to increasing prices on their own direct customers. Unreal low pricing for one segment will lead to unreal high pricing for another segment of the market. This is a situation FCC has to deal with. However, institutional politics behind its decisions makes matters no easier.

2004-08-23 12:18:33.0 -- ; Permalink ; Trackback.