The blotter: Week ending 21 August 2011

Business

Google is buying Motorola for US$12.5 billion. Corporate media, at least initially, mistakenly thought that Google is getting into the hardware business. By the second day, most had picked up the reasoning of the bloggers, recognizing but not acknowledging their error. This is all about defending itself from the patent trolls. For its US$12.5 billion, Google gets 25,000 patents and a handset vendor. More than anything, Google’s purchase should serve as a giant red flag that the US patent system is badly broken. Think about how many jobs — or how much innovation — that US$12.5 billion could have created if, as Jeff Jarvis notes, Google didn’t have to spend it on rat poison. Meanwhile, meet the new borg and wonder what will happen when it buys Sprint.

In a remarkable op-ed for the New York Times, Warren Buffett writes that it’s time to derail the super-rich gravy train. Buffett reveals that in his 21 person office, he pays the lowest tax rate, mostly because of the “carried interest” tax code loophole, allowing his income to be taxed at 15 percent. His tax rate (17.4 percent) was less than half that paid by his employees (36 percent). When the capital gains tax rate was 39.9 percent in the mid-1970s, Buffett continued to invest. Buffett proposes raising the tax rate on those with taxable income greater than US$1 million “… including, of course, dividends and capital gains.” And another tax rate increase on those making US$10 million or more.

Censorship

The Long Beach police have a policy whereby photographers are detained for taking pictures “with no apparent esthetic value.” So reports Greggory Moore, writing for the Long Beach Post.

Intellectual property

When US copyright law was revised in the mid-1970s, creators were granted termination rights whereby they could recover control of their works after 35 years, if they apply at least two years in advance. This means that recordings made in 1978 are eligible for these termination rights. Bob Dylan, Kris Kristofferson, Tom Waits, and other musicians and songwriters have filed their intent to regain control of their work. “In terms of all those big acts you name, the recording industry has made a gazillion dollars on those masters, more than the artists have,” Don Henley of the Eagles told Larry Rohter, writing for the New York Times. “So there’s an issue of parity here, of fairness. This is a bone of contention, and it’s going to get more contentious in the next couple of years.” Rohter reports that the four major recording labels — BMG, EMI, Sony, Universal, and Warners — and the Recording Industry Association of America (RIAA) will fight to retain the rights. The labels argue that they own the master recordings in perpetuity and that the musicians and songwriters made the recordings under work-for-hire arrangements. If that were true, the labels would hold the copyrights, not the artists and the artists would have never had to pay for the recordings to be made. Bob Marley’s heirs sued Universal to regain control of five recordings in 1981. Last September a New York federal district court ruled that “each of the agreements provided that the sound recordings were the ‘absolute property’” of Universal. That decision only applies to recordings created before 1978 and Marley’s heirs are appealing.

Internet

Google launched a music discovery service, Google Magnifier, in the guise of a blog this week. Google will apparently offer free music tracks from time to time that can be sideloaded into your Google music locker. The music can then be streamed to up to eight devices. The blog is edited by Tim Quirk, a former senior vice president at Rhapsody.

Law

For years I ran an open WiFi network. I closed it when local college students abused it and because I became worried about being held liable for something someone else did using my resources. Corynne McSherry, writing for the Electronic Frontier Foundation (EFF) addresses that last concern concisely: “… no court has ever found that anyone is liable simply because another user of his or her open wifi committed some legal wrong.”

Media

A four-year-old letter from Clive Goodman, a former correspondent for News of the World, reveals that top executives at the publication (and possibly top executives at parent company News Corporation) were indeed aware of widespread mobile phone hacking within the organization. Goodman asserts that the mobile phone hacking “was widely discussed at the daily editorial conference.” News Corporation should have known that it was in the deep weeds when it sent a heavily redacted version of the letter to the UK parliamentary committee investigating the issue while its law firm, Harbottle & Lewis, sent a clean copy to the same committee.

Politics

Dave Winer, in an article wondering aloud why US Representative Ron Paul (R-Texas) isn’t considered a front-runner for the Republican presidential nomination (Paul and Michele Bachmann were statistically tied in the Ames, IA straw poll), nails what’s wrong with modern American politics: “These are coin-operated candidates. Strictly actors serving as conduits for money that turns into ads.”

For some time I’ve been stymied trying to find a reason why lower middle class and working class individuals in the US support tax breaks for the rich, when even most of the rich acknowledge they should be paying more. Common wisdom says it’s aspirational; we all think we’re going to be rich someday. Now comes the Economist with a new explanation. It’s an updated version of the drawbridge syndrome (I’ve got mine, hurry up and raise the drawbridge so the heathens don’t get in to get theirs) with a new name: “last-place aversion.” “One paradoxical consequence of this ‘last-place aversion’ is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions.”

Privacy

Europeans have long enjoyed fairly strong personal privacy protections, as outlined under the European Union’s data protection directive. Simply stated, information collected for one purpose cannot be used for any other purpose. Additionally, European citizens enjoy what Natasha Singer, writing for the New York Times, calls the “right to be forgotten.” They can withdraw their permission for a company to keep their personal information at any time. In the US, on the other hand, information collected on individuals is generally — but not always — the property of the organization doing the collecting. And they can do pretty much whatever they like with the information. As the US Congress and various agencies of the federal government struggle to determine what minimal privacy protections should be available to the American citizenry, the Europeans are discussing even stronger protections.

Publishing

Amazon is finally starting to terminate accounts of publishers of “private label rights” ebooks in its Kindle Store. These are near-duplicate ebooks where the text — most often long-form spam — is sold by the original “author” for a flat fee and then “customized” and offered for sale by other publishers. It’s digital pollution and a pyramid scheme; Amazon has finally recognized this and has begun to filter and delete “undifferentiated or barely differentiated” ebooks.

Sustainability

Keystone XL is a pipeline that would carry tar sands oil from northern Alberta to the Gulf of Mexico. It’s a bad idea for all of the obvious reasons, as Bill McKibben explains in a Washington Post op-ed piece. McKibben believes it may turn into a defining moment of Barack Obama’s presidency. In order for the project to move forward, President Obama would have to sign a “certificate of national interest.” He could refuse. As McKibben notes, “WikiLeaks documents emerged recently showing US envoys conspiring with the oil industry to win favorable media coverage for tar sands oil. If you were a cynic, you’d say the fix was in.” Tar Sands Action reports that more than 50 people (including McKibben) were being detained by the US Park Police through the weekend for a peaceful sit-in at the White House.

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