THE SUPERNOVA REPORTProvided by Kevin Werbach and pulver.com.October 20, 2003RE-SENDING OF THIS NEWSLETTER TO ANY NUMBER OF COLLEAGUES ISENCOURAGED PROVIDED YOU CC: SUPERNOVA@PULVER.COM; IN RETURN, WE WILLPROVIDE RECIPIENTS WITH A SUBSCRIPTION. YOU CAN ALSO SEND "SUBSCRIBESUPERNOVA" TO <LISTSERV@LISTSERV.PULVER.COM> TO SUBSCRIBE. ANY OTHERUNAUTHORIZED RE-DISTRIBUTION IS A VIOLATION OF COPYRIGHT LAW.----------------------------------------------------------------------We're moving toward a series of showdowns over the future of theglobal information infrastructure.  None of the issues involved areparticularly new.  The essential challenges were on the table sixyears ago, even before the Internet bubble fully inflated.  Theyinvolve basic matters of Internet governance, network regulation, andbusiness models for digital content.  The important question now isnot whether government will leave the Net alone, but how will thesekey conflicts be resolved?In this issue, thoughts on five major Internet challenges now comingto a head.  Also, a pointer to my draft law review article proposing aradical new framework for wireless spectrum policy.-k-Kevin Werbach----------------------------------------------------------------------In this Issue:- Supercommons paper on spectrum policy- INFORMATION TECHNOLOGY: The coming digital ID battle- COMMUNICATIONS: Ducks, grandma, and sausage- INFORMATION TECHNOLOGY: The end of Internet openness?- MEDIA: The wrong solution for digital music distribution- INFORMATION TECHNOLOGY: What is Internet infrastructure?- LINKS OF THE MONTH----------------------------------------------------------------------SUPERCOMMONSIf you've followed my writings and commentary over the past two years,you know that I believe new technologies call for fundamental reformsin wireless regulation.  Changes in spectrum policy to allow more"unlicensed" communication, as scholars such as Yochai Benkler, DavidReed, and Lawrence Lessig advocate, would have myriad benefits forsociety and the economy.I've posted a draft law review article that goes into detail on whyspectrum reform is important, and what it should include.  The paperwill be published in the March 2004 issue of the Texas Law Review.I argue that we should no longer treat spectrum as a concrete physicalresource, because new communications technologies don't requireexclusive control of frequencies.  The implications are profound.There is an emerging communications space, the "supercommons," thatrepresents a vast opportunity to enhance capacity and open up accessto the airwaves.  To exploit it, a universal entry privilege should bethe policy baseline.  In other words, anyone could transmit anywhere,at any time, in any way, so long as they did not excessively burdenothers.  To resolve interference disputes, we could use backstops andsafe harbors drawn from tort and intellectual property law.If you're interested, the draft (warning, it's 92 pages long) isavailable below:http://werbach.com/research/supercommons.pdfhttp://werbach.com/research/supercommons.htmlIf you want something shorter, "The End of Spectrum" is a condensedversion of the argument in an article for The Feature:http://www.thefeature.com/article?articleid=100112----------------------------------------------------------------------INFORMATION TECHNOLOGYThe Coming Digital ID BattlePopular blogger Glenn "Instapundit" Reynolds recently moderated apanel about the future of the music industry.  An industry executivereportedly expressed a high-priority commitment to legislatingmandatory digital IDs for Internet users.  The idea is that the IDwould function like a driver's license, allowing users to be trackedand punished for downloading copyrighted material.  This shortly aftera New York Times column on file-sharing called for much the samesolution.Digital ID is bubbling up from several sources at once:    * The technologists are pushing it as a central element of the Web    services vision (via the Liberty Alliance and various Microsoft    initiatives).    * The businesspeople want it to enable efficient tracking of goods    and people (via RFID).    * The telcos want it to tie together legacy and IP communications    (via ENUM).    * Hardware vendors want it for security (via the Trusted Computing    Group).    * Governments want it as a tool to fight crime and terrorism.    * A host of others want it to address problems like spam.Add the music industry to the list.  All these digital ID systems aredifferent, and most of them aren't interoperable.  But it may be onlya matter of time before there is pressure to hook together whateverforms of identification do catch on. The lesson of the social securitynumber is that IDs for one purpose inevitably spill over to others.I'm not a cyber-anarchist.  The idea of digital ID itself doesn't giveme the willies.  I really have no problem with Amazon.com knowing alot about me, or airline ticket agents asking to see my driver'slicense.  What worries me is the possibility that we'll get digitalIDs to solve one problem, and they will be applied to somethingtotally different.  I'm sure many of the people who support someidentification mechanism to cut down on spam wouldn't want a similarmechanism to police music downloads... but it's the same technology.There's a restaurant we go to in South Philly.  Great Italian food.Packed every night.  Funny thing, though. They only take cash.  Andsupposedly, when they file their taxes, they never report a profit.Cash is anonymous and untraceable, which allows for abuse.  There aremany transactions where cash isn't accepted, or where it sets offscrutiny.  I'd hate to see cash go away, though, because there arecases where it's used improperly.  Just as I'd hate to lose theconvenience of credit cards, despite the privacy and security risksthey create.There will soon be significant battles over digital ID.  The danger isthat they won't be seen for what they are, but as isolated fightsspecific to a particular industry or situation.  The essentialobjective should be balance -- anonymity vs. identity, openness vs.control, unification vs. segmentation.  Too far in any direction, andwe'll suffer unintended consequences that far exceed the benefits.----------------------------------------------------------------------COMMUNICATIONSDucks, Grandma, and SausageWhen I was at the FCC, I used to do a presentation called "Ducks,Grandma, and Sausage."  The idea was that the Internet, and especiallyvoice-over-IP (VOIP), quacks like the duck of regulated communicationsservices.  The two look functionally identical.  Today, though, one isregulated and required to contribute to universal service subsidies,while the other isn't.  In the eyes of many influential parties,anything that undermines the existing subsidy system means grandmawon't be able to get decent phone service.  Changing the system meansgoing through the regulatory and legislative process, which is likesausage: you don't want to know what happens on the inside.  Thesituation was a recipe for confusion and gridlock.That was six years ago.I felt strongly at the time that the FCC should stay away fromregulatory questions surrounding VOIP, because raising them would opena Pandora's box.  Whatever the FCC decided, its actions would chillinvestment and innovation, at a time when VOIP had miniscule revenues.I helped draft the FCC's 1998 policy statement declining aCongressional invitation to take up VOIP regulation.That was then, this is now.  Continuing to avoid the VOIP issue andsimilar questions about the Internet and communications policy isbecoming dangerous.  We're starting to see negative consequences ofthe FCC's benign neglect. Other interests, like state regulators, arejumping into the vacuum and seeking regulation of VOIP on their ownterms. Courts are issuing poorly-reasoned opinions, like the recentdecision in Minnesota, based on those non-binding, "tentative" FCCstatements in 1998.It's time to for the FCC to take responsibility and bring someenlightened rationality to the debate. Otherwise, one of two thingswill happen. Either VOIP regulation will become a messy quagmiredriven by overblown political and lobbying interests, or it will be abattleground between big cable and phone monopolies.  Neither outcomeis good for innovative companies and for users.Need more proof?  Try to square the Minnesota VOIP decision with theNinth Circuit's "Brand X" opinion overturning the FCC classificationof cable modem offerings as unregulated "information services."  Yes,the two courts were looking at different services in very differentprocedural contexts.  But the implication is that, to quote JeffTaylor of Reason Magazine, "your cable modem is a phone, except whenyou use it as a phone. Then it is not a phone."If nothing else, Brand X adds further uncertainty to the legalenvironment surrounding broadband.  Wall Street has made it quiteclear that regulatory stability and predictability, more than anythingelse, are the essential precursors for further investment in telecom.And legal uncertainty can only delay cable operators deploying voiceover IP in a big way. Again, this doesn't mean either court decisionreached the wrong outcome.  It means we're in for more years ofconfusion and regulatory gamesmanship rather than real investment andmarket competition.There are really two core issues here.  The telecom industry as weknow it is doomed.  And the seven-year-old law governing that industrycompletely fails to recognize the situation.  We can and should comeout the other end with a new industry that is more vibrant,innovative, and user-focused than the one we've known.  This will onlyhappen, though, if the business executives and policy-makers confrontthe challenge with eyes open.I'm afraid the executives aren't doing much better than theregulators.  BusinessWeek ran an article this month about Microsoft'spresence at the mammoth ITU Telecom 2003 convention in Geneva.Microsoft has a brilliant solution for the telecom industry's woes:instead of selling dumb connectivity, sell value-added services.Earth to Microsoft: every carrier has been saying this for at leasttwenty years.  No one, with the possible exception of Level 3, wantsto be a "dumb pipe."  Yet the only "services" that have taken off sofar are ringtones, SMS messaging in Europe, and wireless data apps inJapan.This is yet another example of the conflict between edge and center.My new Handspring Treo smartphone has lots of great services likeVindigo that I willingly pay for.  I spent $400 on the device itself,and $150 more on an expansion memory card to play MP3s.  Yet hardlyany of that money goes to Sprint, the telecom operator.  And withVOIP, WiFi, and the inevitable unbundling of phones and wirelessnetworks, Sprint will get squeezed even more.The money today is in the apps on the edge, hardware, and of allthings, dumb connectivity.  The first one explains Microsoft'spresence at the ITU show; the second one explains the large Intel andHP booths at the same event; and the last one is what carriers don'twant to hear.  If you talk to US mobile phone subscribers, though, Ibet you'll hear far more complaints about coverage and network speedthan lack of services or high prices.  The first user-facing telecomcompany to execute the Dell/Wal-Mart model -- be the efficientcommodity provider -- will make a killing.  (Partly because they willkill their competitors.)  Not that this is an easy task.  Legacybilling systems and legacy culture are huge hurdles to overcome.  The"services" alternative, though, is a mirage.  The few exceptions likeNTT DoCoMo only prove the rule.My guess is that the straw that breaks the camel's back for theexisting telecom order will be widespread deployment of VOIP by cableTV operators.  Comcast CEO Brian Roberts announced at the end ofSeptember that he was "more bullish than at any time" about VOIP, andindicated that his company will begin significant trials in 2004.  By2005, Comcast and other major US cable operators will be deployingVOIP en masse.Why is this such a big deal?  Cable passes more than 90% of Americanhomes, and serves more than 70%.  Cable operators can afford to giveaway basic telephony as part of their service bundle.  Just thesavings on reduced churn from cable to DSL or satellite TV will morethan repay the incremental deployment costs.  The incumbent telcoswill have no choice but to fight fire with fire, and move quicklytoward VOIP themselves.  Broadband and VOIP will no longer be sexyadd-ons; they'll be the primary offerings of the largest serviceproviders.That is, unless everyone has to waste even more time in regulatorygamesmanship.  The only way to have clarity in 2005 and beyond is tostart clarifying things now.----------------------------------------------------------------------INFORMATION TECHNOLOGYThe End of Openness?There has been much chatter among the digerati lately about the spam-death of email as we know it.  Writer Clay Shirky even went so far asto assert that we may have seen the high-water mark of openness online(http://tinyurl.com/rmrg).  His argument is that open environmentslike email inevitably let in bad guys like spammers, who ruin theparty for the rest of us.Like Clay, I love email.  Use it incessantly.  Can't imagine how Iever lived without it.  Can't see myself ever using older (telephone)or newer (instant messaging, collaboration software, RSS syndicationfeeds) mechanisms with the same enthusiasm.On the other hand, like Ray Ozzie (http://www.ozzie.net/blog/2003/10/01.html), I've seen for some timethat email won't scale the way it increasingly needs to.  I wrote anissue of Release 1.0 two years ago describing collaborative bottom-upknowledge management solutions (including Ozzie's Groove) optimizedfor some of the business functions that email handles badly.  I wrotean article for Slate a year ago (http://slate.msn.com/id/2074042/)saying that spam and worms would kill off the open email we know andlove.  And I realized in August that the SoBig worm might be thebeginning of the end.And yet, and yet.  I can't bring myself to be a pessimist.  When myfriends like Clay and Larry Lessig point out how the glorious opennessof the Net is being snuffed out, I can't find any holes in theirarguments.  I reject the congenital optimism of people like GeorgeGilder who think technology will solve all our problems (as long asgovernment gets out of the way).  I just keep coming back to thepragmatic conviction that we will muddle through.  The question is howmuch time and money and effort will be wasted along the way.What gives me cause for hope, if you can call it that, is the power ofpervasive internetworking.  GM and Goodyear can't buy up and tear outthe Net like they did the LA trolley system, because the Net iseverywhere.  The content industries can delay the arrival of digitaldistribution and make a mess of things with poorly-considered digitalrights management schemes... but not forever.  Verisign can break thedomain name system for its financial gain... but it won't enduniversal IP connectivity, and that will ultimately make it irrelevantif it abuses its position of trust.Email will lose its glorious universality.  We won't expect thatanyone can send anything to anyone else.  But email won't necessarilygo the way of Usenet, which Clay uses as a cautionary example.  Usenetwas a subculture; email isn't.  For all the spammers and free-riders,there are more people and organizations that, often for their ownselfish reasons, want email to survive.Have we passed the high-water mark of openness?  Probably. But thegraph needn't look like a Bell Curve.  We can still have an Internetthat is the most open, dynamic communications medium in the world.And if we fight for them, there are other opportunities for trueopenness on the horizon, like unlicensed wireless.  What's otherchoice do we have?----------------------------------------------------------------------MEDIAThe Wrong Alternative for Digital MusicThe major P2P file-trading software companies have established a tradeassociation to advocate a compulsory license for digital music.  Inother words, Internet service providers would track how many songs areshared, and by which artists.  They would collect a flat monthly feefrom users and remit it to artists based on a statutory per-song rate.The Electronic Frontier Foundation and cyber-gurus like Don Tapscottspeak approvingly of the idea (http://tinyurl.com/rmtc).Let me get this straight.  To deal with the conflicts between recordcompanies and their customers over file-sharing, we should turn ISPsinto government-regulated collectors of a mandatory music tax.  Thisis an innovative new business model?Some sort of compulsory license makes sense for Internet radio, forthe same reason it works for conventional radio.   But radio is notthe same is my personal collection, even in a world where every pieceof music is instantly available from a hard drive in the sky.  One isbroadcasting, an inherently collective activity.  One is personal.  Itis reasonable to use statistical approximations to allocate broadcastrevenue flows, because that's the only way to tie them back toindividuals.  But my relationship with my content providers issomething different.  The endpoints of the transaction are easy toidentify; the problem is just the mechanism in the middle.Apple's iTunes and other second-generation licensed online musicservices are getting closer to a workable alternative for the majorityof users who are willing to pay for digital downloads if given areasonable price and experience.  A music tax would take all thepressure off the industry to deliver the product its customers want.It puts government in the position of guaranteeing the recordcompanies' current revenue stream, and ISPs in the position of taxcollectors.Anyone who thinks a "digital music surcharge" makes sense shouldconsider the effect of universal service charges intelecommunications.  Decades ago, these mechanisms did help people getphone service in rural areas.  For the past thirty years, though,universal service charges have been an albatross making true phonecompetition nearly impossible.  They created vested interests who willdo anything to keep the subsidy gravy train going.I'm all for creative thinking about how to restructure the musicindustry, but bad ideas are still bad ideas.----------------------------------------------------------------------INFORMATION TECHNOLOGYWhat is Internet Infrastructure?Verisign has been taking heat for its Site Finder service, whichredirects mistyped domain name requests to a search engine partner.Little of the debate so far addresses the real issue. Verisign CEOStratton Sclavos distilled the essence of the controversy in a CNetinterview (http://tinyurl.com/rmu7):	"The reason Site Finder became such a lightening rod	is that it goes to the question: Are we going to be in	a position to do innovation on this infrastructure, or	are we going to be locked into obsolete thinking that	the DNS was never intended to do anything other than	what it was originally supposed to do?"There is a subtle but essential misunderstanding here.  Innovation canand should happen in Internet infrastructure, but there are a handfulof core elements that must remain open and radically simple if theInternet is to remain, well, the Internet.  These include TCP/IP, UDP,SMTP, HTTP, BIND, BGP, and the DNS (especially the .com registry).Any change in these protocols should be very carefully vetted througha consensus-based process. They should evolve, but cautiously and withextensive notice and deliberation.The point that Stratton misses is that a few simple and non-proprietary core connectivity protocols make innovation possibleelsewhere.  Take Internet routing, for example.  Akamai and itscompetitors built content-delivery networks that fundamentally changedthe way a high percentage of Internet traffic moves through thenetwork.  But they did it on top of the core protocols, which remainunchanged.  Innovation took place, but without breaking thefundamental underpinnings of the open Internet.The debate about spam, where many people are proposing mandatoryauthentication as a solution, illustrates the same confusion.Breaking email to fix spam is like breaking the DNS to "fix" mistypeddomain names.  That's why I like Tim Bray's suggestion to use relayservers for spam prevention.  Like Akamai, it leaves the basicinfrastructure unchanged.Lack of innovation at one level promotes innovation at another level.As long as the global Internet community knows that SMTP, IP, and thedomain name system will remain stable, it can build wonderful newthings that leverage that base.  At the same time, the guardians ofthe core infrastructure, which includes large network owners,Verisign, and standards bodies, can focus their energies on ensuringthat the infrastructure can scale.  Because the DNS today does dosomething different than it was designed for: it supports a globalnetwork used by billions of people and facilitating billions ofdollars in economic activity.  And that's the greatest innovation ofall.----------------------------------------------------------------------INTERESTING LINKS FROM SEPTEMBER/OCTOBER 2003http://www.ritsumei.ac.jp/%7Eakitaoka/saishin-e.htmlAmazing optical illusions by Akiyoshi Kitaokahttp://tinyurl.com/rmv1FCC Commissioner Martin endorses VOIP universal service contributionshttp://www.tbray.org/ongoing/When/200x/2003/10/12/SpamPlan27Tim Bray proposes paid email relays to combat spamhttp://www.shirky.com/writings/file-sharing_social.htmlClay Shirky on file-sharing as social networkinghttp://www.marketingsherpa.com/sample.cfm?contentID=2464Nokia uses blogs for buzz marketing of mobile phoneshttp://dailywireless.org/modules.php?name=News&file=article&sid=1590Dartmouth to deploy voice over wireless LANhttp://www.paidcontent.org/stories/ashleyrts.shtmlRemarkable speech by BBC Director of New Media Ashley Highfieldhttp://www.georgewbush.com/blog/Bush/Cheney 2004 webloghttp://a.wholelottanothing.org/features.blah/entry/007472Matt Haughey on micropaymentshttp://tinyurl.com/rmv8Kevin Marks on live event DIY Webcastinghttp://www.silicon.com/opinion/500018/1/6057.htmlPeter Cochrane on the future of mobile networks via dense high-frequency unlicensed mesheshttp://www.chiariglione.org/manifesto/dmm.htmLeonardo Chiariglione: The Digital Media Manifestohttp://www.textually.org/picturephoning/archives/001810.htmComparison book shopping on Amazon via cameraphoneshttp://www.pacificavc.com/blog/2003/09/29.htmlKevin Laws on the real economics of the music businesshttp://www.forbes.com/2003/09/25/cx_dl_0925tentech.htmlForbes coverage of VOIP developmentshttp://www.redherring.com/ForumPage_092303-02.aspxJerry Michalski frets about new social networking serviceshttp://www.time.com/time/globalbusiness/printout/0,8816,485764,00.htmlTime Magazine discovers RFID tagshttp://www.denverpost.com/Stories/0,1413,36%7E78%7E1626541,00.htmlThe movie and music industries follow different pathshttp://www.thecrimson.com/article.aspx?ref=348733Shoshanna Zuboff on disruptive capitalismhttp://192.246.69.231/jeff/personal/archives/000118.htmlJeff Pulver on states threatening to regulate VOIPhttp://www.itudaily.com/home.asp?articleid=3101701DNS creator Paul Mockapetris on the coming identifier boomhttp://action.eff.org/action/index.asp?step=2&item=2801EFF campaign against FCC "broadcast flag" mandate----------------------------------------------------------------------If you are aware of others who would like to receive the SupernovaReport, please forward this email and copy supernova@pulver.com. Tounsubscribe, please send "SIGNOFF SUPERNOVA" in the body of an emailto listserv@listserv.pulver.com)Please send your comments and feedback regarding this issue of TheSupernova Report to: kevin@supernova2003.com.Kevin Werbach               Tel. +1 (877) 803-7101October, 2003            http://pulver.com/supernova/----------------------------------------------------------------------(c) 2003 Kevin Werbach and pulver.com. All Rights Reserved======================================================================