The Concept of "Sale" is Under Attack II

Adding fuel to the fire, TechDirt reports that: "Home Buyers Only Finding Out About Resale Fees When It's Too Late".  TechDirt writes that there is a "growing practice of adding a "resale fee" to homes, that give developers a copyright-like extended control over a piece of your house long after the house has been sold."

My daughter also sent me this very good quote from Mister Jalopy on the right of the consumer to do what they want with the products that they have bought.

Empowering consumers to be able to repair, rebuild, reuse and reinvent the products they invest in is at the core of Mr. J’s philosophy. As part of the Maker’s Bill of Rights (link) article in Make: Magazine, Jalopy declared, “if you can’t open it, you don’t own it.” Asserting that an individual should be able to open, repair and modify the products that they buy, the Maker’s Bill of Rights gave a clear voice to the Maker Movement’s frustration with increasingly disposable products that lock out consumers.

“Innovation does not stop at the end of the assembly line. Companies should think of customers as collaborators and reap the benefits of building a community of fierce advocates. There is significant economic incentive to connect with customers beyond consuming. Companies can create legendary brands that people care about and build products that customers will praise and defend,” states Jalopy. “Innovation should be shared.” (emphasis added)

I previously discussed how sellers are now increasingly using wording gimmicks such as "leasing" and "renting" as a means of depriving consumers of their right to owning the products that they have purchased in "The Concept of "Sale" is Under Attack".

Biased Testing

My daughter sent me a  humorous Onion video spoofing the "flaws" of testing claimed by special interest groups that the standardized tests are somehow biased against them.
In the Know: Are tests biased against students who ....?  Enjoy.

The Concept of "Sale" is Under Attack

For the past two years I have been pointing out that the concept of "sale" is being eroded. Basically, companies have been claiming that the products they "sell" you are really only licensed to you. Unfortunately, a recent court decision seems to have bolstered that concept. The court held in Vernor v. Autodesk (PDF) "that the terms of an end-user licensing agreement, or EULA, can change the sale of commercial software into a mere license, in this case a license that prohibits users from reselling their copy of the software".  Today, both CNET and the Technology Liberation Front carried the story: "The end of software ownership--and why to smile" by Larry Downes. Well, I am not smiling.

For a website that is ostensibly based on Libertarian principles, the appearance of this article is particularly disturbing.  Mr. Downes makes this very surprising and unbelievable assertion: "replacing the regime of ownership with one of rental.  And, perhaps more controversially still, I try to make the case that such a dramatic change is in fact not, as most commentators of the decision have concluded, a terrible loss for consumers but a liberating victory."  It would appear that Mr. Downes is asserting that the average citizen does not have a right to property.  With that in mind, why should I be grateful that my right to own something is being taken away by a corporation?  With this line of reasoning, I should also be grateful to the government should they pass a law that requires that I  must eat "healthy food" and that I can't buy a big Mac. Seems like Mr. Downes is advocating a "Nanny State".

Beyond the simple right to property, there are other concerns:

1. No mention is made in the "End of  Software Ownership" of the consumer as possessing any rights what-so-ever. When one rents an apartment, the landlord is obligated to keep it in a livable conditions. Existing EULA's basically say, if it doesn't work, too bad. Not only that but the EULA's also grant companies the ability to change the rules post-sale (after-the-fact). So you buy (rent) a product and the next day the cost just doubled as expressed in a new freshly posted EULA that you never saw. You don't accept, well your license is terminated.
2. The upgrade cycle. Companies can now reach into YOUR computer to "brick" or turn-off stuff at their whim. So if XYX company unilaterally declares a perfectly good program obsolete they can turn it off. The customer has virtually no recourse? Intuit is a good example of this strategy.  At least in the "old" days you could use your software until it really broke or became obsolete.
3. You pay for something, the company says Oops we've had a change of heart and they remove the content without your permission.  Remember the removal of Orwell books from the Kindle. Due process for the consumer, you must be joking.
4.  In the "End of  Software Ownership" the statement is made that software rapidly becomes worthless. Well, it that is true - why should a company care about retaining ownership? If a product is worthless to the consumer then it is also worthless to the company. If a product is worthless, companies shouldn't care who owns it. In fact, Mr. Downes should be advocating that it be in the public domain so that the user community can determine when a product is truly "obsolete". To state that companies determine when a product is "obsolete" is arrogant and counter to the concept of the free market. In the free market, a product is obsolete when the consumers no longer desire to use it.

In fact the "End of  Software Ownership" seems like a precursor to new form of Communism. Instead of the State owning all the property, only corporations will have the right to own property. Welcome to the new workers consumers paradise.

American Ingenuity - What it Costs Us

The news recently broke that the HDCP Master Key had been decoded. TechDirt writes today that "Intel Confirms HDCP Master Key Is Out". Freedom to Tinker came out with a companion piece: "Understanding the HDCP Master Key Leak". A question naturally arises concerning what breaking the HDCP means in terms of breaking HDCP American ingenuity. The simple answer, one person was innovative enough to either crack it or get a copy of it.

But there is a deeper question.  American industry loves to proclaim how ingenious it is, look we're giving you HDTV!!!  True, but examine the cost to the consumer. As a quick example, TechDirt wrote: "Avatar Blu-Ray Customers Not Enjoying Their DRM-Crippled Discs" which demonstrated one instance of the new innovative technology not working. In the case of Amazon.com the New York Times wrote: "Amazon Erases Orwell Books From Kindle". Which demonstrate the ability of a company post-sale to reach into your hardware and remove content at the company's whim. Thought you bought it; guess again.

The common theme? The implementation of American "innovation" is costing the American consumer their freedoms.  Furthermore, companies in their quest to pursue "innovation" have even gone to the Congressional supermarket to obtain laws that criminalize consumer activities that would not add to the corporate revenue stream.

Think of this, the content industry bought laws, they worked with many engineers to develop the HDCP standard, and they had to coerce manufactures worldwide to modify equipment to comply with and implement HDCP. The implementation of HDCP as an "innovative" technology took a long time, took a lot of effort, and cost a lot. So if American industry is innovative and can successfully deploy a universal DRM strategy world wide why won't it design a simple universal power adapter or a simple universal ink cartridge?  

Given time, every DRM scheme eventually fails. Now that HDCP has failed. The investment in time, money, and manpower in HDCP could have been invested in something productive such as universal power adapters and universal ink cartridges that would have been a win-win situation for both the companies and the consumer.  But it seems that companies are not interested in using innovation in a win-win manner.  Better to have an angry customer because Avatar won't play than to have a happy customer who can buy any printer cartridge. To bad.

Demise of the Free-Market?

Bluntly, Obama's economic policy is Bread and Circuses for the masses to buy votes.  There is a greater question concerning presidential economic policies that go back beyond beyond Obama. Specifically, are these policies distorting the free-market?  The answer is YES.

The old Soviet Union had a planned economy.  One of the criticisms of the planned economy for the USSR was that it overproduced certain items, underproduced other items, and did not really respond to consumer needs.

Obama recently gave a couple of speeches on his economic agenda.  Principally he speaks of "creating jobs". That is somewhat of an oxymoron in the sense that the President does not directly create jobs, that is the responsibility of the private sector.  So of course what he is really talking about are creating policies and favorable tax conditions that would encourage private industry to hire people.  But that really begs a very serious question, why would a company hire people if customers are not buying?  After all companies are not noted for altruism and the high unemployment rate is reflective of that.  Of course the argument goes that people hired will go out and buy. But what will they buy?

Recently CNBC had an interview with Michael Jackson the CEO of AutoNation and I believe the CEO of KB Homes, Jeff Mezger. Both CEOa noted that their respective companies had benefited from the "stimulus" programs to promote the buying of houses and cars. Now that the stimulus program has ended, sales have fallen.  Clearly continued sales were unsustainable, so the "stimulus" achieved was a short uptick in sales that cannibalized future sales. The collapse of the US housing market (2008) and the consequent near meltdown of our financial system are further indications that the free-market was not fully functional. While the US may not have a central bureaucrat defining production goals, we do have egregious programs that stimulate the production and sale of certain items that would not normally be bought, just like in the old USSR.

Like the infomercials, wait there is more! Obama's and Bush's economic policies were also flawed for another fundamental reason.  Note that virtually all the incentives are going to businesses to encourage them to do something. It may appear reasonable, but it neglects that the free-market is based on the consumer voting with their dollars. By voting with their dollars they determine what is produced.  Companies then respond by hiring people to full fill that consumption need. Therefore, if we are to have an operational free market, incentives which allow the consumer to retain more money - such as the elimination of payroll withholding - would be the appropriate form of incentivizing the economy.  (Please note that I am opposed to any subsidies and that this type of activity could be considered a subsidy.)

The  US economy is now planned similar to the old USSR.  One of the criticisms of a planned economy is that it overproduces certain items, underproduces other items, and does not really respond to consumer needs. Obama's so-called "stimulus" effort does nothing to encourage the consumer to go out and vote with their dollars.

Where is the ACLU on Intellectual Property?

For a long time I have wonder about the apparent silence of the ACLU on so-called intellectual property.  Recently, TechDirt noted that the ACLU joined in on a lawsuit: "ACLU Suing Homeland Security Over Laptop Searches... Even Though Other Cases Have All Failed".  Once again my interest was aroused, since it would seem that the deprivation of civil liberties by the content industry would be a no-brainier for an ACLU lawsuit. A quick look at the ACLU's Technology and Liberty issue webpage didn't disclose much.  Based on a casual review of their website it would seem that the ACLU is focused more on social justice for segments of society rather than the protection of civil liberties for every member of society.  Fortunately we have the Electronic Frontier Foundation. Nevertheless, it would be good if the ACLU were to recognize how patent/copyright law are being increasingly used as vehicles to deprive people of their civil liberties.