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  • Property vs Privacy

    Posted by Shannon Love on September 21st, 2004 (All posts by )

    Property and privacy are antithetical. Property is by definition a statement of who controls a particular resource. If an ultimately public linkage does not exist between an individual and a resource then that resource has no owner. The property system and the free-market that depends on it cannot function with anonymous ownership and anonymity arises from privacy.

    If we have an environment with a high degree of privacy, we automatically have an environment with a high degree of anonymity. With a high degree of anonymity we have weak property rights. With weak property rights we have a weak free-market mechanism

    This antithesis has extraordinary consequences in the Internet age.

    It is easy to think that you can own property anonymously. The presumption that “possession is nine tenths of the law” means that anything in your possession is presumed your property unless somebody can present positive evidence it is not. Most of us cannot easily prove we legally own most our possessions and the law in general does not require us to. As long as an item is on our person or within publicly recognized property like our homes or cars, the law presumes that we own it.

    This system works well for physical items because ownership of physical items is zero-sum. If one person is using the item then others cannot use it at the same time. A hundred people cannot read the same copy of a book at the same time. More importantly for presumptive property rights, if person A takes person B’s item then person B will notice and complain because they lost the use of that item. If nobody complains, the presumption is that all the property is where it is supposed to be.

    The presumption system fails utterly when applied to non-zero sum property. If person A and person B can use the same item without obstructing one another, indeed without each person even being aware of the other, then nobody can assume that anyone will complain if an item is not under the control of the legal owner. The legal owner may not even be aware that someone else is making use of their property without their permission.

    All digital media is non-zero sum property. Copying bits is the most fundamental computer operation. Before a digital computer can make any use of any data it must first copy it into memory. Right now, you are not reading this website, you are reading a copy of this website recreated on your local computer. With the right software, you could save that copy forever. Doing so would not interfere with the ability of others to read the website nor would I even know you had done so.

    The only way to establish that an individual legally owns an instance of digital media is to permanently maintain a data trail connecting the creator of the digital media to the individual. To enforce their rights, the creators will need the ability to inspect any data trail at anytime. Practically, this means using an automated system. All current and proposed Digital Rights Management (DRM) systems use this basic concept.

    The political problem is that people think of media as small physical items that they can purchase and own in near total anonymity. Until the Internet age, buying information meant buying the physical media it was embedded inside of. People think that when they buy a book they are buying the information in the book but what they really legally own only the physical paper of the book, not the unique pattern of information printed on the paper. The legal presumption of ownership is based on the physical possession of the paper, not the information on it. The physical paper is zero sum property. The information is non-zero sum.

    Increasingly, more and more information is created, distributed and consumed purely in digital form. It never, at any time, exists in a non-volatile physical medium. The consumer never has in hand any kind of physical, zero-sum property that the presumption of ownership can be based on. People want the law to treat an MP3 file on their hard drive the same way it treats a CD on their rack but the two are in no way functionally comparable. They strongly resist all attempts to treat digital media differently from physical media but realities of the two media so diverge that applying the physical rules to the digital causes a complete breakdown of property rights. The only way to preserve property rights in digital media is to destroy anonymity in the purchasing and holding of digital media.

    There are many valid concerns with the loss of anonymity in the consumption of information but without property rights the free-market will cease to operate in the creation and distribution of information.

    The economic, social and political implications of the extinction of free-market information are staggering.

    I will cover these implications in future postings.

     

    9 Responses to “Property vs Privacy”

    1. Fûz Says:

      >

      That data trail then becomes itself information. To make that information useful in protection of one’s property rights in the original information, one must share that data trail to > someone else’s. Who will have rights to that metadata, to assure its freedom of error, its legal accuracy? Can encryption be used, and trusted, as a “third party” testifying to the metadata’s validity?

      Some rights-holders are forcing some serious validation infrastructure (such as digital rights management) into every data client, just to support the operation of the DRM metadata. I don’t want a license from the RIAA to operate my computers.

      Must digital (“virtual”) property have physical representation of some kind in the physical, material world?

    2. Ken Says:

      There’s other ways to skin that cat.

      Portable computing devices are getting small enough and sophisticated enough that music, movies, and other goodies can be distributed in the form of executable code rather than in the form of easily interpretable (and crackable) data. In this scheme, you’d get a Java jar file (for instance) that checks to see if you’ve got a license key and, if so, starts decrypting and streaming out the music it’s got packed away as data inside the executable.

      This has several advantages. First, you don’t have to pass a law requiring all players to have DRM irrevocably installed, which brings all sorts of problems. Second, you’re not stuck with a single protection format; as hackers get better, your new stuff’s protection can get better as well, although old stuff isn’t going to spontaneously get harder to crack, of course. Happily, people are going to tend to crack the newest stuff more often than the older stuff, unless it’s older stuff that’s hard to find, and such stuff tends to be hard to find precisely because the owner isn’t all that interested in trying to sell it anymore. It’s not like DVD’s, where the decryption algorithm and all keys have to be publicly available at least to DVD player makers in order for the devices to work; as long as a device can run your executable, no one has to know any decryption keys in order for legitimate players to work.

    3. Shannon Love Says:

      Ken,

      The executable strategy has two problems.

      (1) If based on a key system, the keys can just be stolen, cracked or swapped.

      (2) Executable can be spoofed into thinking they are running on any arbitrary piece of hardware.

      Software publishers have tried various schemes to protect actual programs from piracy but they have all failed. Only hardware protection works in the least it can be bypassed as in (2) and you need a unique piece of hardware for every item you want to protect.

      I do not think there is a technological solution to this problem. Copying is to fundamental to operations of a digital computer.

    4. Shannon Love Says:

      Fuz,

      Physical property today is protected by 3rd party meta-data. Real estate for example is defined by publicly available titles and surveys. If the information about a property is not publicly available to everybody in a transparent fashion then ownership is not truly defined. Declarations of ownership must be public for property to function.

      ” I don’t want a license from the RIAA to operate my computers.”

      And that is the central problem. You want to operate you digital devices in privacy but the RIAA can’t enforce it’s property rights if you do so. Looking at the other way, you can’t prove you have a legal right to some piece of digital media without a public data trail linking you to its creator.

      This doesn’t seem to be a serious problem now but in the immediate future all information may be digital. Then what? How will anybody make money producing information products? Without property rights they won’t be able to.

    5. Ken Says:

      “Software publishers have tried various schemes to protect actual programs from piracy but they have all failed. Only hardware protection works in the least it can be bypassed as in (2) and you need a unique piece of hardware for every item you want to protect. ”

      I don’t know that it’s failed completely. There is a viable software industry based solely on selling executable software. Does it get pirated sometimes? Of course it does. Will other forms of intellectual property get pirated more than software? Not if we play our cards right.

      The point is, we want a system that works better than trying to pass, and enforce, a law that requires every piece of computing equipment to include undefeatable DRM limitations. That’ll end up working about as well as drug prohibition.

    6. Rob Read Says:

      Personally I think it highlights the fact that Intellectual property is an abstract nonsense hindering the proper development of markets.

      e.g. Pay to see the gig (a a physical venue), not listen to a recording of the band playing(which becomes legal after a bEUrocratically decided length of time.

    7. Shannon Love Says:

      Ken,

      “There is a viable software industry based solely on selling executable software.”

      Depends on how you define viable. It’s estimated that 80% of all money spent on software goes to Microsoft. Small companies have a very hard time getting paid for their work.

      I think it is largely conceded now that you cannot make any money in the application market these days. All the real development effort goes into internet based apps were you keep the software on your own server and just let the end user see the results. Even the game market is growing this way.

      Piracy started out as a small problem back in the floppy disk days. Now it is an industry killing one. As bandwidth grows it will just get worse.

    8. Ken Says:

      “Personally I think it highlights the fact that Intellectual property is an abstract nonsense hindering the proper development of markets.

      e.g. Pay to see the gig (a a physical venue), not listen to a recording of the band playing(which becomes legal after a bEUrocratically decided length of time.”

      I’d rather buy the music, and have artists be paid for the quality of the music itself rather than how well they can stage gigs. Not only that, but a good intellectual property foundation allows markets in autofactory blueprints down the road, making everything much cheaper than it is now.

      At any rate, let’s look at privacy expectations, and the copy protection techniques that are available given consumer expectations.

      First, suppose you download something off a website with a credit card. Clearly, once you are willing to do that, you have accepted the fact that the owner of the site might know that you bought the content, and indeed has your credit card number. This means that, given a suitable local sandbox, you won’t have a problem if your content phones home every once in a while. It sends up a unique key, sends up the current stored serial number, and gets a new serial number, with all of this stuff heavily encrypted; if it sends up a serial number the server’s gotten before (say, from another copy of your content), the server tells it so, and it refuses to run from then on. Of course you can always get another copy from the provider free of charge, if you give it a password that also provides access to your account settings.

      (Or, instead of phoning home, the server just encrypts the content with a key, and your credit card number is part of the key. That’ll align your interests with those of the content owner in a hurry!)

      If you buy it off of a CD, it can still phone home while protecting your privacy. In fact, your privacy is even more protected; the only thing that the server will be able to figure out based on what the content sends over is that somebody has the CD installed; no information identifying you can possibly be sent. (Although, of course, the sending IP address is available to the server, but that can be defeated several ways by people determined to defeat it. Most people clearly don’t care about that…)

      Any of this is preferable to having the hardware market restricted, or having everything go through the RIAA, or letting content owners legally hack into your machine, or any of the other ham-handed methods our fearless leaders sometimes propose. About the only thing I actually approve of is the lawsuits against music pirates that have gone through recently. Most people still got away with it, but it does have a deterrent effect against wrongdoing, which I guess in the end is all you can ask of the law.

    9. Fûz Says:

      Dammit I have to stop using angle brackets as quotation marks in stuff that will be rendered in html.

      Shannon, “Physical property today is protected by 3rd party meta-data. Real estate for example is defined by publicly available titles and surveys. ” Exactly what I was getting at. A third party such as the county courthouse fulfills this function for other forms of property data, charging a nominal fee to act as the repository for ownership data on property within its jurisdiction.

      Can a technological solution provide a comparable artificial “third party” (1) without legislation, and (2) allowing multiple venues or clearinghouses (or jurisdictions), so the free market can operate?

      Also, I take a position somewhere to the right of Rob Read’s, in that IP rights deserve protection, but not the duration and invasivenss of protection it enjoys today. I won’t support a complete abandonment of any protection of any IP, but I agree with the Lessig school of much shorter, fixed duration of IP protection and strict protection for fair use where applicable. That probably does not change the fundamental problem, as you pose it, that much, but it should drive the policy that seeks and promotes solutions.