Tag Archives: policy

Customers, Companies, and Power – imbalances drive inequities

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I’ve been in the process of buying a house for the past month. It’s been a rocky process. Some of it has been on us, but a lot of it has been on the side of the lender. The first problem came when they basically started the process they day we were supposed to sign. This precipitated a series of events that as lead to the fact that it’s unlikely for us to actually fund the house on the last day we possibly could. Furthermore, they have been rather cavalier about the fact that we can just move closing dates without a problem. Essentially their poor processes have required us on multiple occassions to modify a private contract. We’ve been punished again and again because of their inability to meet their obligations. This strikes me as a serious inequity, especially since it’s not a big deal for them that we essentially lost out on a full month’s of rent from the seller. We have minimal to no recourse to address this loss.  On top of this, they still get paid. In my mind they’ve provided little to no value in this process and have in fact simply added a great deal of waste. They should no be paid and in fact should pay us the loss in rent we should have received from their inability to meet deadlines.

This sort of behavior is rampant in industries and companies that are essentially monopolies. Either their customers are fully locked in to a specific company because it is expensive or difficult to extract personal data or some other technical issue or the customers have no other option. In either case the company is able to act with a great deal of disregard for their customers. The goal of the business then becomes to extract maximum rents from their customers not to provide maximum value to the customer. This can create existential issues for a company that undergoes this transition, because many of the people that made that company great are pressured and have the quality of their employment decline without understanding why. Essentially these folks still try to do the right things and in many cases don’t agree with their corporate leadership. In many cases, such as with a Telecom, it’s likely they are exempt from the full rent seeking behavior of the company.

Thinking about these things have made me really frustrated the past few weeks. My job is to help my company deliver more value to the customer so seeing these actions is increasingly frustrating and counter productive to Lean principles. If companies aren’t adopting principles that improve value for end customers, then what can we do? Well, I think that in each of these cases the root cause comes from two totally different policy actions. First many of the issues we’re having are designed to protect customers so we enacted policies to that end. While the other problem, rent seeking behavior comes from the lack of policies to protect customers.

In each of these cases different government actions have lead to different actions for end customers. In actually these painful delays for our loan may for many other people, truly protect them. However, in our case, they aren’t. In the case of push deregulation on telecom the result has been monopolies and behavior designed to continually take more money from their customers. In each cases, these derive from two different philosophies around the value of government regulation. I think these situations highlight the nuances in this area.

In the end it’s important that we have real conversations about the underly reasons for different policy decisions. We need to understand that there are imbalances of power between customers and companies. In many cases those companies will exploit them to their best advantage. Unfortunately, these imbalances extend to the realms of politics as well. This of course is another area where we have issues and will continue to have issues. It is unclear how to address these imbalances, i’m not confident that we’re going to be able to do this in the next few years. If we cannot address these issues I believe they will continue to get worse as the economy remains flat in it’s growth.

Philanthropy, Private industry, and science

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Apparently I’m not too happy with the NYT magazine and their exposés of late. First there was the long article about millenials and how they don’t want to work for the “old guard” which is ahistoric and ignores a great deal of the similarities between the silicon valley of today and the past silicon valleys and other similar environs.

Now they are rushing about in concern over private scientific research. Apparently, it’s a new big problem. It’s neither new nor a problem. First of all some historical context. Scientific labs as we know them today were truly founded through industrial labs. These labs were initially in the dye industry back in Germany in the late 1800s, sure there were university labs, but they weren’t researching as big of thing as the industrial labs started. These labs had problems that couldn’t be solved in academic settings. The universities were training grounds for scientists, but in many cases the scientists actually did their doctoral research at Bayer or a similar type dye company. These dye companies almost all became pharmaceutical companies over time because of the similarity in chemistries between dyes and pharmaceuticals.

This was in the 1800s and really hasn’t abated. I’ve written about Bell Labs and Xerox in the past which are essentially the Bayer equivalent for telecom, semiconductors, and computers.

Science has always been a combination of public, private, and universities. In fact, research that I conducted through my master’s degree has shown that the INTERACTION between private industries and universities produces the most important work (in terms of citations). Our concern should not be if science is going private or not. Our concern should be if they are sharing with the broader scientific community. That’s the biggest risk. It’s one of the biggest problems with industrial scientific research – it never reaches the light of day even if it becomes a product.

Why doesn’t it? Well, simply because it’s better protection for some processes for the technique not to be patented. In the case where something is relatively easy to copy (an iPhone) it’s best to patent because you’re protected them. In the case where it’s very difficult to copy (a nitride layer on an Intel chip) it’s best to hide that process as deep as possible. In fact, it’s best if any technique that would uncover the underlying process to make that nitride layer from reverse engineering destroys the product. For Intel, this is the best result, for the rest of the world, it’s suboptimal as Global Foundries and TSMC will struggle for years to reverse engineer the layer if they ever can. This slows the innovation process as a whole, but we’re willing to suffer this inefficiency because Intel makes some nice chips.

Beyond this debate, the author is upset that someone would want to push scientific research in one direction that might only help white people or rich people. Unfortunately, this is capitalism. We may not like it in basic research that is going to be used to cure diseases, but we tolerate it with Intel so we need to be realistic and tolerate it in this case. Furthermore, I think that the author doesn’t understand that adjacencies in research in diseases will arise and we’ll learn more about all humans, not just them white folks. Ironically, at this point the author calls out a researcher that is working with an Oracle billionaire – that researcher works at Rockefeller University.

What are seen now as seminal research institutions in many cases started out through the very philanthropy the author is upset about. Carnegie Mellon University was the combination of two institutions in Pittsburgh started by an industrialist and a banker. It is one of the most respected research organizations in the world. These men were driven by the same desire to push scientific research as Bill Gates and the other (mostly) men on the list.

Is this a perfect system? Not by a long shot, however in the current political environment scientists are going to take money from whatever source they can. It’s merely practicality. A professor will typically have anywhere between 1-10 grad students. These students at the PhD level will likely be fully funded by the professor. If that professor does not get funding, those kids don’t get to keep working and either have to find another adviser or quit. Here’s the kicker in the case that professor does get money – a large proportion of that funding is taken and allocated to less profitable portions of the organization. At University of Texas, this meant that the EE department was probably funding part of the Chemistry Department. Some departments are like the Football team, while others are like the Swimming team. The swimming team might be winners, but are in a small market.

If we truly wanted change in the way we fund scientific research we need to increase the amount of public investment across multiple institutions. We need to increase funding across multiple types of research fields, specifically focusing on the intersections between academic fields. Push for collaboration between industry and universities as well as collaboration across national boundaries. All of these improve the citation rate and quality of the research. We can even work to partner public funds with private funds – we just need full disclosure.

The problem isn’t privatization. We’ve had an oscillation between really publicly funded (1960-70’s with NASA) and really privately funded. In all cases science has marched on – we just need to make sure it keeps on marching.

What’s the difference between Ma Bell and Comcast?

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If you were born in the 80’s or before you know that Ma Bell was the only phone company in town. Born any later than that you were born into a world without a single monopoly for telecommunication. That’s right, we’ve had a point in our collective history where there was only a single phone company. There are rules in place that prevent something similar from happening with Comcast, but we’ve been there before. However, I believe there are critical differences. AT&T knew they were a monopoly and they were a state sanctioned monopoly. They did everything in their power to keep prices down to prevent being broken up. AT&T actually had a broader monopoly than what Comcast could ever hope to have. They made the phones that worked on the line, they made all the telecom technology that made it work, and they designed the services that made it work. This is something called a natural monopoly, which I’ve written about before. A former founder of Comcast has declared Comcast a natural monopoly.

The biggest difference between Comcast and AT&T, back in the day, was that they did everything they could to keep the government happy. Was it perfect, no clearly not, there were shady business practices, but we as a society benefited greatly from Bell Labs. To this stay is still one of the greatest research facilities that ever existed. If it wasn’t for Bell Labs our current way of life would be very different. I highly suggest checking out the book on it.

Comcast claims to be pushing innovation with their X1 Xfinity platform, but that’s not really true, it’s simply a new operating system pushing content. Voice activation isn’t innovation and if that’s your main selling point then you’re in serious trouble. As I mentioned yesterday, the Netflix deal is a major concern, the Verge is saying the Internet is fucked and that we need to be contacting the FCC daily to un-fuck it.

I’m not entirely sure that the FCC can fix it. Congress has greatly hamstrung the FCC in dealing with internet companies, furthermore, their solution of calling the internet a Utility won’t work. If you aren’t aware we’ve had big pushes to deregulate the utility industry which unfortunately hasn’t really made rates better in many cases or in the long run. I think that it’s fair to say that in the telecom industry this is true as well. The impact of the AT&T break up has been this long term collection of conglomerates that continually increase price as well as “Fees” which similar to baggage fees are hidden from the “price” of the service. So, treating the internet like a utility isn’t going to work. What we need to do is treat it like a road.

Everyone that uses a car on the road is taxed based on use (Gasoline taxes) everyone pays for a portion of the maintenance based on other local taxes too. No, these aren’t perfect and are going to be under pressure based on hybrid and electric cars – and new models are being proposed. Of course one way to do this is through toll roads (which really never work) or through some sort of black box in the car to measure mileage (which no one wants).

Essentially it’s a pay for bandwidth consumed, so if you’re a high consumer of bandwidth you’d pay more, but the rates need to be realistic and the goal would be to cover expenses and continually improve service while making it cheaper. Which brings me back to AT&T – the president of Bell Labs had one mantra anything could be tested but only if it could lead to a “Better, cheaper or both” network. A public internet similar to a road that was paid to continually get cheaper, better, more secure, and faster is the only way to truly un-fuck the internet. It’s not likely to happen because it’s not a capitalist response. However, the internet these days is similar to public transpiration – it’s goal isn’t to make money, it’s goal is to enable economic activity. If think of it that way, then we can see the long term benefit of the whole economy rather than singular actors.

Failure of DMCA and TPP is going to be worse

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It should come as no surprise to many of my readers that I’m not really a big fan of DMCA. I believe that this law hinders innovation in the arts and sciences. I you are interested in a very nuanced and well articulated argument against Copyright, I suggest you download Lawrence Lessig‘s book Code 2.0 – it’s a law book, but it’s free and interesting. However, I have written about this topic before if you’re like a bit of a synopsis.

The DMCA is a law that requires companies to help copyright holders manage and protect their copyrighted material. This results in something called a Take Down Notice, where the company that receives the take down notice must remove the offending material. In many cases the copyright holders are requiring companies like Google to create tools to allow them to automatically search for offending material.

Growing number of Take Down requests

Growing number of Take Down requests accessed 1/5/2014

For a growing company like Twitch.TV which streams live video game broadcasts and services several hundred thousand viewers at once, may cripple them in the future. According to a recent George Mason University study, the DMCA take down notice process has been a complete failure. The law was never intended to function in the manner that it has been.

The take down notice was designed as a stop gap measure and compromise between copyright holders and the new technologists on the web. The DMCA was passed in 1998, most of the internet that we know and love didn’t exist then. It was likely that only a few people had even started using Google when the law was passed, YouTube was nothing more than a pipe dream, Napster and sites like it were the major driving force for this law.

Over the past few years we’ve had several attempts to expand on the DMCA and make matters significantly more restrictive on the Internet. For example we had the SOPA/PIPA, CISPA laws that the internet killed with a blackout. The blackout is an example of what Rebecca MacKinnon argued in her book “Consent of the Networked” where law makers need to look at the interconnectedness of the world and how these laws reach beyond our boarders and impact the broader world.

Unfortunately, these types of laws aren’t dead and DMCA isn’t going away despite what GMU recommends. Currently TPP is working it’s way through the “Fast Track Process” (fast track essentially allows the President to enter into trade agreements powers not authorized by the Constitution) and if it is successful there are copyright provisions that are very damaging for both Copyright Law and Patents. The copyright provisions are stronger than DMCA, similar to SOPA, and would force all signers to follow the rule of the trade agreement over their own established laws, including the US. If you are interested in reading TPP here’s the full agreement for download at Wikileaks.

What can we do to prevent TPP from making our copyright lives worse? Well, it appears there’s limited things we can do. Of course you can contact your representatives, however, Darrel Issa was already refused to see the agreement. However, more interest from the general population can only be a good thing. We’re going to have elections this year in the US, so it’s a good idea to get people thinking about this trade agreement now and stop it before it’s ratified.

The word "Terrorism" has jumped the Shark

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“You keep saying that word, I do not think it means what you think it means” – Princess Bride. Growing up terrorism meant something. It meant that someone out there could get to you in a very violent way designed to inspire fear in the general population. These events were rare, but horrifying. The first World Trade Center Bombing, Oklahoma City Bombing, The Unibomber, The Olympics bombing, the nerve gas in Tokyo Subway, etc… However, since 9/11 the word Terrorism has begun to change meaning. 9/11 of course was a terrorist attack and spawned may other attacks that were intended to cause damage and inspire fear in the populace. They worked, the US has spent billions of dollars in security measures that are ineffective at best, we’ve spent trillions of dollars on two wars, and who knows how many shadowy engagements using our special forces and drones.

It’s had many other consequences, the no fly lists, the removal of passengers for speaking Arabic or most recently Russian, hateful actions against both Muslims and the religiously unrelated Sikhs – they have turbans therefore must be a terrorist! – and of course more attacks. The disturbing trend however is the lack of even handedness in classifying an act as an act of terrorism. We’re seeing kids getting arrested and facing 20 years for making terrorist threats by posting rap lyrics on facebook. We have the Boston Bomber charged with terrorism (as he should be), but the guys with the guns in the movie theaters aren’t being charged with terrorism.

Most recently in the UK, there was an attack with a machete on a solider that’s being called Terrorism. Just yesterday there was an attack in France which happened in a similar fashion that’s also being called terrorism. Does terrorism mean any attack on non-Muslim by a Muslim? Why are these not politically motivated murders or even assassinations? That is what they are, is that terrorism? I don’t really think so. David Cameron is going to use these murders as an excuse to stamp out what he considers “hate speech” in the UK. Will this simply turn out to be an attack on Muslims in general?

Many of you out there are not fans of the blow back theory, where our actions in those regions are creating hostile agents that attempt to get revenge in any way possible. Initially, I was very skeptical of this stand point. However, as I’ve paid attention to the new more and expanded my sources of information, I completely accept this theory. I believe that there are clear parallels with the US response to hacking activities. The final piece of evidence I’ll provide in support of the theory is this great short read by Juan Cole:  “Who’s the Threat?” It’s a simple chart showing what countries have invaded each other since 1798 and the numbers killed by the “terrorist regions” or the west. Put in this larger context, hearing about drone strikes would be terrifying – especially since you have absolutely no recourse if your brother is “collateral damage” to a strike.

With that in mind, I think it’s paramount that we work to keep terrorism to mean an act of violence that’s more similar to the Boston Bombing than a brutal machete murder which was more of an attack directed against the state than the people of that state.