Vol. 4 No. 10


May, 2005




iTOON on Packing Cellphones

FeedBackLoop: Tombstone Scramble

THE REAL NEWS * * * * *





The United States Supreme Court has before it two of the most important property rights cases to be decided in our lifetime. One deals with personal property. One deals with real property. Both cases have been argued and the world awaits a decision this summer.

The Grokster case is the off-shoot of the Napstermania. The question presented is the revisitation of the doctrines of personal property rights of a copy of a copyrighted work against the alleged infringing apparatus of technology. When one buys a physical copy of an album, it is yours to use as you see fit. You can listen to it. You can burn it. You can smash it into a new piece of sculpture. You can make personal copies of it for your own use. You can copy it to archive it. You can put it in a milk carton and sell it at a garage sale. You can give your album to a friend as a gift. You own your copy of the album. You can do what you want to with it.

When cassette tape recorders were hitched to turntables, the recording industry cried foul. Record collectors can make tapes of their favorite music instead of buying a duplicate album on tape. The industry also argued that dishonest people could make multiple tapes with their recorders, and give them away for free to friends . . . or worse, sell copies of the albums. The cassette recording manufacturers have unleashed illegal activities onto the world. The arguments were easily answered under existing copyright fundamentals. If one makes a tape of their album for non-commercial uses, there is no harm to the record industry. If one makes a tape of their album for commercial purposes, like selling bootleg copies, the record industry is harmed and copyright laws afford ample remedies. The cassette deck manufacturers are not liable for any illegal activities because their devices have a useful, legal purpose.

The record industry is back with the same arguments against Grokster, a peer to peer file sharing network. Instead of being classified as a cassette deck manufacturer, Grokster and its peers, are classified as internet pirate flea markets. The industry is claiming that the lone album copy is not being transferred hand-to-hand by friends like swapping tapes, but one song on a network playlist gets copied thousands of times. Copies thousands of times is just like distributing bootleg copies of the CDs. It has been unclear as to whether any commercial activity is really occurring in these file swaps; Grokster is not charging its members fees for swapping songs. Grokster claims it does not control what occurs in cyberspace or across its broadband corner of the network. It is akin to the public square, and the file swappers are people who congregate and share their life stories, music, etc. Without a commercial aspect of the case, the record industry cannot really say it has been harmed. It claims that such illegal bootlegging of songs is hurting record sales. It claims that people swapping for free hurts record sales. (It does not explain the success of other new music media such as the iPod and iTunes massive success.)

But the main point is that Grokster is a file sharing protocol. The whole internet is a file sharing protocol. Browsing the web is the capture and copying-reconstruction of HTML code, images and text from computer to computer. The concept of file sharing was the basis of the creation of the internet. The internet is legally sharing files every second of every day. Since it has a legal use, one cannot condemn the system because some illegal activity might result.

One can never predict how the Supreme Court will rule. If Grokster loses, then the court has opened a Pandora's box of companies claiming extra-copyright like damages and injunctive relief against technology developers, which will lead to the restrictive demise of innovation, the taking of personal property rights of individuals and legal uses of their music equipment.

The real property case is more alarming. America was founded by persons fleeing their countries for the opportunity to own land. Land ownership in Europe was a still a feudal concept where the government or noble controlled the means of land ownership, land profits and land values. When a person was given or purchased a land grant, it was his property to own in perpetuity, to farm, develop, sell or pass on to his descendants. Land ownership is the foundation for the American Dream.

Land ownership was governed strictly by local custom and practices. The general rule was that you could do anything on your land within its boundries, so long as your activities did not adversely affect your neighbors (for example, create drainage issues or flooding an adjacent neighbor). As urban centers developed, local governments began creating codes and restrictions under their state constitutional grants of regulation for the public health, safety and welfare of all its citizens. But in the past few decades, the exception of no government interference with the general personal ownership rights in land and its development had become the rule.

The Kelo case pits homeowners, some who have owned land for generations, against city officials who want to condemn their property and turn it over to developers under the argument that economic redevelopment is a legimate public purpose of government. Condemnation is the government's taking of private property. It can only occur if the government gives the property owner fair market value AND the property is then used for a public purpose. Public purpose has been defined in common sense, objective terms: building schools, building parks, constructing highways, widening roads. But condemning property by government to turn it over immediately to private developers is a new form of arbitrary feudalism. Local governments are supposed to serve the people, not developers. If the project was really economically feasible, a developer could negotiate and buy the property needed in order for the project to go forward. Let the free market control. That is or was the American way. But developers cannot deal with burdensome land acquistion issues, especially with certain holdouts who could block the whole project. So, by getting local city councils to declare an area blighted or underused, and then threaten to condemn a person's property unless it is sold to the developer, or to take the property then turn it over to a developer, the developer gets the property quicker and cheaper than running its normal course.

Developers have convinced city councils that the use of public bond money (under TIF, tax increment financing) will multiply the change of their communities. In essence, the city and developer become partners in private property redevelopment projects. However, the city shares none of the profits. (Most school districts feel the backlash of TIFs, where real estate taxes are frozen to tax bodies at the old rate until the public TIF bonds are paid back in 20-23 years. A massive increase in population from these dense residential projects immediately tax school districts without any increase in revenue base. Which leads to schools seeking more taxing authority from the other citizens in the district, increasing the overall tax burden on everyone.) What city councilmen get in these situations is a SimCity godlike power thrill of knocking down city blocks, and creating planned unit developments in which they approve everything from the architecture to the color of the window trim. It is an awesome power rush for a local politican. It can also lead to the aura of conflict of interest, campaign corruption, unethical behavior, and bullying conquest mentality against their own citizens.

The Kelo plaintiffs told their city, no we won't give up our houses so the city can turn it over to a private developer. We pay the real estate taxes. We have lived in the homes for generations. We don't want to move. We cannot afford to move. You should not be allowed to displace my family, my family home, and my family's land. If the Supreme Court does not uphold the homeowners property rights in this case, it will be open season by local governments to seize land without any true public purpose. Developers will be empowered to create projects which may not make any economic sense and lead to downtown redevelopments to be overbuilt, over-congested, over-valued, and on the road to urban white elephants a decade later.

There has been a constant erosion of personal property rights in this country. The constitution holds that all rights not set forth in the document were to be reserved to the people. Private property rights was the sacred principle which created the United States as a world superpower. But it is being chipped away one regulation at a time at the local level, the state level, and possibly at the national level.

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It has an Escape from New York vibe, where a President's cassette tape holds the key to global peace, when it was reported that President Bush works out with his personal iPod. What was on the President's music list?

Brown Eyed Girl by Van Morrison

Centerfield by John Fogerty

Circle Back by John Hiatt

(You're So Square) Baby, I Don't Care by Joni Mitchell

My Sharona by the Knack

Castanets by Alejandro Escovedo

Alive N Kickin by Kenny Loggins

Also country music songs by George Jones, Alan Jackson, and Kenny Chesney.

The mainstream media called the collection “Boomer Rock” which plain vanilla radio program consultants would call “Classic Rock” to the average music listener who would call the playlist “Country Fried Middle of the Rock Rural AM dial Tunes.”

Of the listed songs, I have only one in my collection. The Knack. On vinyl. The way garage bands used to get noticed: press an EP/LP and pray someone will listen.

This will probably lead to a huge backlash on Capitol Hill. “The president has an (escape) Pod?” some Congressman will deduce, “we should have an investigation on why I don't get an (escape) Pod!"

This will also lead to presidential wannabes (2008 is not that far away) to have to scramble to publish their own iPod playlists to get some cool karma vibes from the Entertainment magazines littering the grocery store check-out lanes.

This will also lead to the music magazines taking up way too much space on Celebrity iPod lists. It has started with music artists notating their top ten iPod songs as index page filler; but with the politicians, quasi celebs and the fringe cultural elitists getting into the mainstream consumerism, it is bound to go overboard. Who will care what Andy Rooney is sticking into his earplugs?

Since the news of the Bush playlist, there have been stories printed in the media about office workers asking/seeing what is on co-worker's MP3 players. Some are shocked to find out that the conservative, timid cubical-next-door colleague has an iPod containing heavy metal; or the cool, hip, urban young woman is loaded to bear with hard core country fiddle songs. People will now be judged by what they listen to? It sounds like junior high school peer pressure to fit into what the cool kids are into in order to validate one's self. Who needs to relive that experience?

Music taste is a personal manifestation of sound vibrations releasing an endorphin rush in the brain; a pounding bass to get the heart pumping harder; mental comfort food.

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Every month, there is a news story about the next killer tech-toy that will kill off a) the iPod, b) the record industry, c) the morals of the teen consumer, d) the next portable device that will kill off commercial radio, or e) all of the above. Some hype. Some vaporware. Some prototypes. Some new flavors on the old business model.

The latest music device killer is the alleged cellphone. Customers are shelling out $5 per month for having their favorite song's chorus line be their ringtone. The next phase of the telco-record label alliance is the dial-up, download mp3 via the cellphone. One has to scratch one's head over the prospect of having the cellphone sewn to the ear in order to listen to a song, an album or a playlist. There are phone addicts. I went into the local mall last month to visit the Apple Store. As I was entering, there were five teen girls sitting on a park bench, each talking on their cell. An hour later, I leave the mall and pass the same girls, each talking on their cells, to the same caller. (Either the teens have an unlimited allowance, or the telephone companies are losing a fortune on unlimited minute plans.)

The phone is for communication. It has historically had limited application for entertainment vehicles. Moviephone was really an informational service. Those 900 numbers were parainformational services. With the explosion of cable and the internet, the informational-entertainment portion of the telephone business faded away. Today's consumer oriented teen has access to cable, DVDs, credit card shopping, movies, internet cafes to meet their entertainment fix. A cellphone as a music player either needs a hard drive storage space, unless the whole purpose of the phone connection is to connect to a music library where the user will be charged like a juke box to hear a song.

The next music device killer is the hybrid platform. Sony's Playstation PSP is a portable movie, music and game player. It has a sleek design. It has the gamer keypads that that preschool children have learned before their A, B, Cs. Memory cards and proprietary high density miniDVD discs is what Sony is hoping will dent the current consumer loyalty to the iPod. But the PSP was marketed as first and foremost, a portable game player. From what we gather, it is a single use device; you can either play a game or listen to music, but not both at the same time. The interface for the music freak is not as seamless as the iPod and iTunes.

The rumor was that Motorola was to partner with Apple and create an iPhone, a combination cellphone and iPod device. But it was announced that Moto was really going back to its roots as an automobile radio manufacturer. It is creating iRadio, a proprietary mp3 player where you download your songs into a device that is inserted into auto-hardware/radio player. However, for $39, one can by an FM adapter to play their portable music player through their existing car radios. Again, the interface seems not as seamless as the iPod and iTunes.

Next week or next month there will be another press release proclaiming that a new device will hit the market and rule the digital music frontier. Until someone can generate the numbers, millions of iPod sales each quarter, the killer music app is the three letters of the frontrunner in consumer technology.





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