Last month, we pointed out that the market for stolen credit card data was so saturated that prices were falling. Of course, that just inspired scammers to go looking for other types of data that was a bit harder to find: VoIP accounts. According to the BBC, scammers selling VoIP account info are now able to get higher prices than those selling credit card data. Of course, it's not at all clear how widespread this really is. The info seems to be coming from a company trying to sell a solution to deal with this -- which already makes it somewhat suspect. Also, you have to wonder how valuable VoIP account data really can be compared to credit card numbers which have much wider applicability. Either way, it will be interesting to see how the market deals with the "glut" of credit card data out there, and where else data scammers turn.

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I'm currently attending a workshop on "The Future of News" at Princeton's Center for IT Policy. One of the most interesting things about the conference is that it has proven to be a kind of "meeting of the minds" between the "old media" (the Wall Street Journal and the San Diego Union-Tribune are represented) and practitioners of Internet journalism. One of the frequent complaints we've heard from some of the newspaper folks is that they're losing business to aggregators like Google News. On the surface, this doesn't seem to make sense, because as we've pointed out before, aggregators drive traffic to news sites, and it's silly for an ad-driven website to complain about another site sending them traffic.

Yet complain they do. And indeed, the complaint seems so common that there has to be something behind it. It has become clear that incumbent media outlets hate aggregators because aggregators increase competition. Incumbent media outlets -- especially local newspapers -- grew accustomed to a cozy relationship with their readers in which their readers had few alternatives for their daily news. That meant they could maintain high circulation (and advertising rates) without worrying too much about the quality of their product. When newspapers migrated to the web, they expected to maintain this captive audience.

What aggregators do is make it a lot easier for readers to find new news sources. That's good for an up-and-coming site with a lot of great content, because aggregators enlarge the potential audience for the content. But it's not good for a mediocre site with a large readership based largely on inertia. The easier it is for readers to find news sources of news, the faster mediocre news sites will bleed readers. We tend to think of competition in terms of price, but competition is important even when a business is already giving its product away for free. More competition forces sites to create more and better content, have fewer and less intrusive ads, and offer content in formats that are convenient and appealing. The increased competition enabled by aggregators may be bad for some websites, but it's unambiguously good for consumers. Google News isn't a competitor to newspapers. Rather, Google News forces newspapers to compete with each other. And when newspapers compete, readers win.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

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Three years ago, reporter Tom Foremski tossed out his idea for how Microsoft could kill Google in an underhanded way: offer $100 million to whoever clicked on a random Google ad. The trick would be that no one (other than the person administering the prize at Microsoft) would know what the ad is. Foremski's theory was that this would lead to massive clickfraud and anger from Google advertisers. Of course, there are a lot of assumptions in there that likely wouldn't hold up in a real world test (with the biggest being that the whole deal would stop working the second someone "won"). However, now we've got Mark Cuban tossing out a suggestion for how to take down Google that seems to come from the same "wishful thinking" playbook. Cuban's idea is that Microsoft (with Yahoo) should offer to pay the top 100,000 sites in Google to get them to remove themselves from Google, and agree to be "exclusively" in the Yahoo/Microsoft listing. The idea is that the money would serve to pay for the lost traffic from Google -- but that's highly speculative.

If Microsoft actually tried this, it would be quite difficult for the Justice Department not to call an antitrust foul, first of all. But, at a more practical level, it just wouldn't work. It's based on the false premise that those top 100k sites are really the only sites that matter. If they all disappeared from Google's index, another 100k would quickly fill in to replace them. In fact, it would get more and more difficult to convince sites to leave Google's index, since the competition for clicks would get easier and easier as others did leave. On top of that, if this actually did happen, my guess is Google would continue to index those sites anyway forcing some sort of court battle over whether or not a site can actually block a search engine from spidering it entirely. These sorts of ideas are fun to think about, but once you think past the basic idea, it's not hard to recognize why the scams would never work. Beating Google is never going to be about a scam.

Now, I should add that I started writing up this post last night. This morning, the news came out that Cuban is included on the board slate that Carl Icahn has put up to try to force Yahoo to sell to Microsoft. The timing, obviously, is no coincidence. Cuban's blog post went up just hours before he was revealed to be a potential board member. However, just because this could, conceivably, put Cuban in a position to actually push Microsoft/Yahoo to implement such a plan, it doesn't make it any more viable. In fact, it makes it that much more questionable.

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Well, well, well. The RIAA is not having a particularly good week. In the Tanya Andersen case (where the RIAA sued an innocent person), the court has awarded Andersen $108,000 in legal fees from the RIAA. You may recall that the RIAA had protested having to pay legal fees, which the judge smacked down. Note that this is entirely separate from Andersen's racketeering case against the RIAA.

However, the much bigger news concerns the infamous Jammie Thomas case. As you'll recall, the RIAA won that case, even though it now admits that it said false things under oath. Much of that decision hinged on the fact that the court said that "making available" was infringement, which is the opposite of what many other courts have been saying. In fact, it turns out that it went against the binding precedent in a different case within the same circuit. The judge has now admitted that he may have committed a "manifest error of law" in his jury instructions, and it sounds like he's going to order a new trial.

This is a big deal. The RIAA has been holding up the Thomas case over and over again as proof that (a) "making available" is infringement and (b) that courts will award huge fines for those caught file sharing. If that decision gets tossed out (not even by an appeals court, but by the judge who ruled in the first place), it will suddenly make the RIAA's claims relating to that case disappear completely.

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Last month we wrote about how New York was changing a law to try to force Amazon to collect and pay sales tax in New York by defining any affiliate in the state as being an Amazon point of presence. This is a clear perversion of the intention of the law that only requires collecting sales tax if the company has a physical presence in the state. While Amazon is now fighting this law in court, others are taking more drastic measures. E-commerce site Overstock.com has declared that it will no longer allow New York affiliates in order to avoid having the state consider it to have a "physical presence" there. This would be an unintended consequence of such a law. In an effort to get e-commerce providers to cough up more in taxes, not only will Overstock not be paying those taxes, it just made life a lot more difficult for thousands of Overstock affiliates in New York.

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It's an ongoing theme around here, but ideas are everywhere. The real trick to making something great often has extremely little to do with the idea, and much more to do with the execution. That's where the real innovation occurs -- in taking an idea and trying to figure out how to make it useful. It's that process that's important, much more than the original idea. As nearly anyone who has brought a product from conception to market will tell you, what eventually succeeds in the market is almost always radically different than the original "idea." That's part of the reason why patents are so often harmful to innovation. The patent is for that core idea, which is rarely the key in making something successful. But by limiting who can innovate off of the idea (or just by making it much more expensive) you're limiting that process of innovation.

Some people disagree with this, but the failure of Cambrian House, once again seems to demonstrate the vast gap between ideas and execution. Cambrian House was a well-hyped company that tried to "crowdsource" new companies and products. I've paid attention to them for a while, since their business model had some similarities to what we do with the Techdirt Insight Community. However, as the founder of Cambrian House admitted in explaining the company's changing plans, it wasn't difficult to get people to come up with all sorts of interesting and exciting ideas -- but where the company failed was in getting anyone to actually execute on any of those ideas. Ideas are a starting point -- but it's high time that we stopped worshipping the idea, and started recognizing how much more important execution is in driving innovation.

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While the Patent Troll Tracker remains darkened, the world at large is definitely missing out on some of the more useful information he provided on his blog, shedding all sorts of light on some of the sneakier practices of various patent hoarding companies, who were often shell companies to hide the real identity of who was behind the lawsuits. Without much information to fight back against these shell companies demanding millions and millions of dollars, various large tech companies seem to have seen an opportunity to team up to fight back. Joe Mullin points out a new organization called PatentFreedom that is basically an association of large tech companies to share information privately on some of the patent hoarding firms that pop up and sue all too often. Mullin has some fascinating background on the organization, which is actually spinning out of another firm that (of all things) was co-founded by Nathan Myhrvold (the guy some folks now accuse of creating a huge patent trolling organization on his own). That existing firm helps companies both big and small in their patent litigation strategies -- but this spinout organization will focus on larger companies facing shell companies that don't produce any products.

While I think it's a good thing that the companies who are often on the receiving end of questionable patent lawsuits are trying to combat the information asymmetry concerning these lawsuits, it's a bit worrisome that this perpetuates the stereotype that this is really a battle between "big companies" and "small inventors." That's a false dichotomy that opponents to patent reform like to set up, because no politician wants to be seen as going against the "small inventor." The truth is that there are all sorts of problems with the patent system, and big companies are some of the worst abusers of the system. Focusing merely on the non-practicing entities, rather than the overall problems with the patent system, may be a necessity these days, but it's merely dealing with a symptom, rather than treating the actual problem.

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Last week, in writing about the Italian government's defense of its decision to put everyone's tax returns online for everyone else to see, we noted the bizarre statement by the official who made the decision: "In the USA, tax filings are already public, check any American TV-movie and you'll see." This totally false statement didn't get much play in the American press (someone in the comments suggested that maybe it seemed so unbelievable that the press thought he was joking). However, as if to make it painfully clear how false this statement actually is, five IRS employees have been charged for snooping on tax returns they were not authorized to look at. While it is a little troublesome that IRS employees were able to do this in the first place, it's at least somewhat comforting that the IRS's auditing system seems to be able to catch people doing this, even when they're only looking at a very small number of unauthorized returns (each worker only looked at one to four unauthorized returns).

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I recently bought a copy of the new book by professor Neil Netanel called Copyright's Paradox. From what I've heard and seen so far, it looks like a well-balanced book that explores what's good and what's bad about copyright. It's on the stack of books to read, so I haven't had a chance to dig into it yet (and might not for a few months at this rate). However, Netanel has been blogging a bit about the book over at The Volokh Conspiracy blog, and reader David Puglielli wrote in to ask if I had any thoughts on his latest post, where he discusses copyright as an "engine of free expression." This is half of the book's premise, and he promises to tackle the other half in a future post. Basically, the overall premise of the book (similar to what we've noted) is that any reasonable thinking person admits that intellectual property (in this case copyrights) has both benefits and costs at the societal level. The question is whether the downsides (the costs) outweigh the upsides (the benefits). In the post linked above, Netanel focuses on the benefit side of the equation -- which is the encouragement of free expression. Basically, expression is good and if there's monetary incentive then we should get more expression -- and that's a good thing.

However, as Netanel also notes, clearly copyright is not the sole driver of expression. He points to the internet as obvious proof that many people create content with no intention of ever enforcing a copyright -- and, in fact, noting that more content is being created than any person could reasonably consume. He then argues that copyright provides an additional value and benefit above and beyond what would be created without copyright, saying that he lays out the reasons why in the book. When I read the book I'll have to explore those in more detail, but there is one troubling point that I find in the blog post. In discussing that incentive to create, he notes:

"Many works require a material commitment of time and money to create. Examples include numerous full-length motion pictures, documentaries, television programs, books, products of investigative journalism, paintings, musical compositions, and highly orchestrated sound recordings constitute such sustained works of authorship. It is generally far too expensive and time-consuming to create such works, let alone create with the considerable skill, care, and high quality that the best of such works evince, to rely on volunteer authors. Nor are alternative, noncopyright business models necessarily more desirable than copyright. For example, we might not want our cultural expression to be populated with product placement advertising or devalued by treating it as a mere give-away for selling other products."

I'm hopeful that he at least challenges some of those assumptions more thoroughly in the book, because it seems to open on the assumption that content that is produced without copyright in mind doesn't necessarily require time and money to create. While I recognize that this is just a short blog post, it also simply brushes aside all alternative business models as not "necessarily more desirable than copyright." That's a big assertion that may not be true at all. It rests on the assumption that in the absence of gov't granted monopolies, the free market would be less efficient at figuring out how to allocate resources to create additional expression. You can make that case, but it should require some evidence, considering how rare it is for central planning to beat an open market in the long run (the short run is a different story).

Also, in picking out one example to make his point, he uses a very negative connotation concerning content used as advertising and suggests that any kind of give-away of content "devalues" the content. This is incorrect on both accounts. While most people don't think of it that way, content has always been advertising for something. So complaining about cultural expression being negatively impacted by it being advertising is inaccurate. It's always been that way. The question is really just about what it's advertising (and how upfront it is about what's being advertised). As for the question of "free" content devaluing the content, again, that's incorrect. Value and price are two separate things. Something given away can be quite valuable (especially if it makes another product worth paying a higher price). So while I agree that copyright acts as an incentive for certain types of content to be created, I think it's worth exploring in more detail whether copyright really functions better than other business models in creating the best incentives. Hopefully the book delves deeper into this (or he'll do so in a future blog post).

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Back in March, Bell Canada started traffic shaping the internet traffic that passed over its network without telling its reseller partners. This was a pretty big deal, as many of the ISPs who resell Bell Canada DSL promise to their customers that they don't do any kind of traffic shaping. Those resellers complained to Bell Canada, who responded by saying too bad, recognizing that those resellers had nowhere else to go. Some of the reseller ISPs complained to Canadian regulators who have now sided with Bell Canada, allowing the company to keep on traffic shaping. The regulators basically said that the ISPs have been unable to show how they're being harmed by this move, which is required for them to step in. One would think that a boatload of customer complaints and threats to move to any other internet connectivity (not that there are many choices) would be enough to show harm to the ISPs. Once again, it's nice to have near total control over your market, isn't it?

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