I wanted to flag a great post on why "open" business models have no monopoly on innovation, and why there is and can be lots of smart network innovation.

Don't miss Link Hoewing's thoughtful piece on the subject over at the Verizon Policy blog.

He does a good job explaining how innovation flourishes in a wide diversity of business and technology models.

Reports that Google's CEO Eric Schmidt sees no reason to step down from Apple's Board in the face of a public FTC antitrust investigation over it, is emblematic of Google's long pattern of disrespect for the rule of law in competition, privacy, and copyright/trademark matters.

Google's consistent pattern of behavior is to push the envelope of legality farther than any other entity is willing to, and then arbitrage that unique edge, for (anti-)competitive advantage as long as possible.

"All our information is being sucked into the cloud. Privacy is over." That was the bold declaration of Attorney Steve Masur at DCIA's P2P Media Summit per Washington Internet Daily.

• Wow. As stark an assessment that that is, what really disturbs me is the thought process and tech ethic that underlies this view.
• Mr. Masur is not alone, he is part of a growing publicacy mentality/movement that looks at privacy as:
  • A neandrethal expectation in the Internet Age,
  • Buzz-kill for Internet innovators, and
  • Road-kill for the cloud-computing bus speeding down the information super-highway.

My pushback here is the blind worship of technology or tech-determinism.

• I define tech-determinism to be:
  • if technology or innovation can do it, it must be good; and
  • if something stands in the way of technology and innovation, like privacy, it is in the way and should be terminated. 

Did it ever occur to the tech determinists that if there is no privacy in the cloud, many won't go there?

• Most users appreciate that technology should work for them, they don't work for technology.

Privacy isn't over. 

New evidence continues to spotlight the Open Internet's growing security problem. 

• The growing catalogue of evidence from mainstream sources is getting harder and harder to ignore. See previous parts of the series:  I, II, III, IV, V, VI, VII & VIII.

"Internet security threat report finds malicious activity continues to grow at a record pace -- Web based attacks evolve as hackers target end-user information; Underground economy continues to thrive." Symantec

First quarter financial results prove that the success of the broadband sector's facilities-based competition, is an exceptionally strong foundation on which to build a National Broadband Strategy.  (See 1Q09 results: AT&T, Verizon, Comcast and Time Warner Cable, companies are listed by revenue size.) The results show:

The DOJ investigation of the Google Book Settlement suggests that a broader antitrust spotlight may be returning to Google.

• Apparently the DOJ is investigating whether the Book Settlement sets a competitive or anti-competitive trajectory for the search of digitized books, and of "orphan works in particular.
  • Google argues the settlement is pro-competitive and increases access to books.
  • The DOJ's antitrust investigative scrutiny suggests otherwise. 
• Since little involving the Internet happens in a vacuum, this antitrust investigation may have much broader implications than most appreciate for:
  • The new Administration's overall antitrust approach;
  • The FTC's oversight of behavioral advertising, and
  • The FTC/Congress' focus on online privacy.   

To start however, it is important to get an update of important facts since antitrust is so fact-driven. Recent facts only confirm and bolster the DOJ's public assessment 11-05-08 that Google had monopoly market power in search advertising and search advertising syndication.

Cracks are appearing in the foundation of the Google Book Settlement, which suggests some of it may end up crumbling under the current harsh weather of public scrutiny.

The most recent crack to appear was the Court's quick rejection of Google's preemptory proposal to extend the opt-out notice period for authors for another sixty days, and quick approval of the request by a small coalition of rights holders for four more months until September 4th.  

• This suggests that the court was not impressed with Google's effort to date to notify potentially affected authors, a key component of good faith in the proposed settlement.

An ITIF forum on the Google Book Settlement at the Library of Congress last week exposed some other big cracks in the foundation of the settlement.

Even some strong proponents of net neutrality now apparently recognize:

• Bandwidth is not unlimited or free;
• The real need for reasonable network management; and that
• Internet networks can have legitimate economic reasons to -- limit bandwidth, block access, or offer slow/fast lanes -- that are not necessarily in violation of net neutrality or anticompetitive. 

An excellent New York Times article provides real world examples of the above points.

• One Internet Village, Divided: In Developing Countries, Web Grows Without Profit.

The article, which I recommend reading, explains that many Internet companies are coming to the realization that many users cost more to provide access to than an Internet advertising model can economically support.

Uneconomics appears to be a new economic school-of-thought struggling for some credibility in Washington. 

• FreePress, the well-known leading proponent for mandated net neutrality regulation, also appears to be the lead proponent of uneconomic thought -- as outlined in their recent letter to the House Energy and Commerce Committee on broadband consumption-based billing.

  Lessons in Uneconomic Thought as taught by FreePress:

  First, "We urge you to consider whether above-cost metered pricing for broadband constitutes an unfair business practice." (p. 3, 1st para)

High profile Internet security/safety/privacy problems continue to spotlight the Open Internet's growing security problem.

"Computer hacking attacks soar as gangs focus on financial data" -- FT

• "Computer hackers stole more sensitive records last year than in the previous four combined, with ATM cards and Pin information growing in popularity as targets, according to a study..."

"Computer Attackers target popular sites in quest for profit" IBD

• Symantec...  "found new varieties of malware rose 265% last year vs. 2007."
• "This is about fraud and theft — I don't think there's any doubt in anyone's mind," said Dean Turner, director of Symantec's global intelligence network unit. "Where this is headed is not good for anybody."

"Computer Spies Breach Fighter Jet Project" WSJ

• "...He spoke of his concerns about the vulnerability of U.S. air traffic control systems to cyber infiltration, adding "our networks are being mapped." He went on to warn of a potential situation where "a fighter pilot can't trust his radar."

"New Military Comand to Focus on Cybersecurity" WSJ