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TBTF for 1998-01-12: Immune response

Keith Dawson (dawson dot tbtf at gmail dot com )
Mon, 12 Jan 1998 11:27:52 -0400


Microsoft makes nice

Many voices debate the questions of monopolies and anti-trust in the information age

TBTF for 1997-12-24 [1]

With its contempt hearing coming up on Tuesday 1/13, Microsoft last week decided it was time to apply some salve to the wounds it had opened by treating the judiciary and the Justice Department in the same manner it treats competitors. The company sent top executives (but not Bill Gates) fanning across the country late last week giving interviews such as the one described here [2], in which COO Robert Herbold (as Eddie Haskell) said that both the company and the Justice Department may have made statements that were too strong. A Bloomberg story (not online) reported this exchange with Herbold during one of these damage-control sessions.

Asked how small software companies could compete on products
that Microsoft plans to fold into its operating system, Herbold
said smaller rivals had three possible paths: They could fight a
losing battle, they could produce a successful product and then
sell to Microsoft or another large company, or they could "not
go into business to begin with because, hey, if you're a betting
person, you know which way it's going to go."

The Justice Department, meanwhile, has filed a motion asking that Microsoft be assessed $1M / day in fines for contempt of Judge Jackson's Dec. 11 order [3].

To bolster its request for the removal of Special Master Lawrence Lessig, Microsoft published [4] what it called disparaging email notes [5] that Lessig had written last summer to an attorney at Netscape. Following a telephone conference on 1/6, Lessig refused to step down [6].

Here are a few other sidelights on the Microsoft-Justice dispute.

one A software entrepreneur, Rich Seidner, gives a blow-by-blow account [7] of the Microsoft takeover of a small corner of technology: "What I learned is exactly how Microsoft's competitive practices can do harm."

two Virginia Postel writes that it was Apple, not Microsoft, which has habitually behaved like a monopolist [8].

Note: See this TBTF Errautum for questions raised about the New Yorker piece cited below.

three Obtain if you can a copy of the 1998-01-12 issue of the New Yorker. (As far as I know the magazine does not have a Web presence, although it secured the domain name newyorker.com in 1993.) In this issue John Cassidy relates the gradual acceptance of the big idea of Stanford economist Brian Arthur: that conventional antitrust thinking is simply inapplicable to large parts of the modern economy, in particular to high tech and telecomms. These markets are characterized by "increasing returns" (this is Arthur's term -- other economists tend to say "network externalities"), and in such markets the value of a product increases along with the number of people who are already using it. Network externalities explain why the best choice for a consumer may not be the cheapest / most technologically advanced / etc. choice available. So inferior products can win out because of mere happenstance: small events, such as a misleading marketing campaign or a "vaporware" leak, can be magnified into large swings in sales. In this environment it is expectable that a few firms will establish lasting and lucrative monopolies, almost regardless of the merits of their products; and competition will not be restored without government intervention. These ideas were anathema to mainstream economists in 1984 when Arthur first tried to publish them; his paper "Competing Technologies and Lock-in by Historical Small Events" did not see print until 1989. Arthur's ideas have influenced, among many others, the economist Steven Salop (an advisor to the Justice Department on the Microsoft case) and the Silicon Valley lawyer Gary Reback, who works with Netscape against Microsoft.

Note added 1998-01-13: Three readers wrote within 15 minutes of Slate's publication of MIT economist Paul Krugman's article The Legend of Arthur; A tale of gullibility at The New Yorker [8a]. Brian Arthur was not the first economist to ponder the meaning of increasing returns, nor was he the first in print with the idea, not by 10 years. See Krugman's chronology at [8b]. Kevin Postelwaite <kpost at ssc dot upenn dot edu> points out that the sentence that initially read "Network externalities obviate the expectation that unfettered markets will select the best products and maximize benefit to the consumer" would better be phrased "Network externalities explain why the best choice for a consumer may not be the cheapest / most technologically advanced / etc. choice available." (Markets don't select, consumers do.)

[1] http://www.tbtf.com/archive/1997-12-24.html#s01
[2] http://www.news.com/News/Item/Textonly/0,25,17921,00.html?pfv
[3] http://www.techserver.com/newsroom/ntn/info/011198/info11_17086_noframes.html
[4] http://www.news.com/News/Item/Textonly/0,25,17800,00.html?pfv
[5] http://www.microsoft.com/CorpInfo/DOJ/1-5lessigltr.htm
[6] http://www.news.com/News/Item/Textonly/0,25,17867,00.html?pfv
[7] http://www.news.com/Perspectives/Soapbox/rs12_30_97a.html
[8] http://www.reason.com/9801/ed.vp.html
[8a] http://www.slate.com/Dismal/98-01-14/Dismal.asp
[8b] http://web.mit.edu/krugman/www/arthur.html.


The fringes of spam fighting

The Internet's immune system kicks into high gear

Two brothers in Chico, California, proprietors of several spam factories, threatened to post 5 million AOL email addresses on the Web for easy harvesting by their spamming brethren. This cheap and obvious PR trick -- a pebble in the building avalanche of organized spamming -- attracted an unholy quantity of press attention [9], [10] before the threat fizzled [11]. Techweb offers a glimpse at the teeming Net life swarming on the underside of the business of spam [12].

The Net's reactions against spam are escalating along with the problem. Here are some of the stronger immune responses I've seen in recent days.

One ISP has called for recognition that the trappings of spam are being used, without the intent to sell anything, to effect denial of service [13].

Another ISP has been billing spammers for the resources, time, and expertise squandered in dealing with their spew [14]. Since the spammers have not paid his invoices, he has turned the matter over to a traditional collection agency.

Finally, Paul Vixie runs a service called the MAPS RBL [15], the Mail Abuse Prevention System's Realtime Blackhole List. The RBL lists known spammers, or ISPs friendly or merely neutral to them, or "innocent by-sender" ISPs who aid spammers (perhaps unwittingly) by relaying their product, or the upstream backbone network providers who don't cooperate in tracking down the perpetrators. System managers can access the RBL in real-time to verify whether or not an IP address of unknown provenance is considered spam-friendly by Vixie, and can use that information to (for example) reject email from that address. System managers and ISPs more hostile to spam can peer with Vixie's network using multihop eBGP4 to forbid any IP connection to their network from the networks of spam-friendlies. Vixie requires all such peers to sign a license and indemnification agreement, and not to redistribute the RBL. These precautions assure that he can reverse the black-hole effect in a matter of seconds for any network that provably mends its spam-friendly ways.

[9] http://www.news.com/News/Item/Textonly/0,25,17742,00.html?pfv
[10] http://www.zdnet.com/zdnn/content/msnb/1231/267991.html
[11] http://www.news.com/News/Item/Textonly/0,25,17784,00.html?pfv
[12] http://www.techweb.com/news/story/TWB19980102S0001
[13] http://www.merit.edu/mail.archives/html/nanog/msg02942.html
[14] http://www.kclink.com/spam/
[15] http://maps.vix.com/rbl/


Chinese Internet regulations

You can't say "Tibet" and you can't say "Taiwan"

On 1997-12-30 the Chinese government promulgated final regulations governing the use of the Internet, replacing interim rules that had been in place since early in 1997. On the web site of the US Embassy in Beijing you can read an informal translation [16] of the regulations. Some excerpts:

Section Five -- No unit or individual may use the Internet to create, replicate, retrieve, or transmit the following kinds of information:

  • Inciting to resist or breaking the Constitution or laws or the implementation of administrative regulations;
  • Inciting to overthrow the government or the socialist system;
  • Inciting division of the country, harming national unification;
  • Inciting hatred or discrimination among nationalities or harming the unity of the nationalities;
  • Making falsehoods or distorting the truth, spreading rumors, destroying the order of society...

  • Of course many of these activities would be protected in the US as free (if perhaps impolite or ill-advised) speech.

    [16] http://www.redfish.com/usembassy-china/sandt/netreg.htm


    Why SGI should worry

    Digital Domain rendered visual f/x for Titanic on 160 Digital Alphas running Linux

    Like many high-end Hollywood creative houses, Digital Domain [17] relied on Silicon Graphics workstations for most of its creative and rendering work. When DD won the contract for the film Titanic, they knew they would need to bolster the complement of 350 SGI workstations to meet the volume and time constraints the project imposed. An article in Linux Journal [18] describes the outcome. DD purchased and installed 160 Alpha machines, pre-configured with a tinkered Red Hat Linux 4.1 distribution and individual names and IP addresses, on a 100-Mbps network, inside of two weeks. They found the compatibility, stability, and above all price/performance of the Alpha/Linux combination unbeatable. SGI should worry.

    [17] http://www.d2.com/
    [18] http://www.ssc.com/lj/issue46/2494.html


    A spy satellite of one's own

    Soon you'll be able to buy images from space that show the car in your driveway

    Spying on the earth from space was a monopoly of governments for its first two decades. In 1986 the French company SPOT IMAGE [19] began selling images from its SPOT satellite to all comers. At 10 meters minimum resolution, the images were sufficient to resolve objects the size of houses. Now a US company -- EarthWatch, of Longmont, Colorado -- has launched EarlyBird [20] atop a Russian booster [21]. For a few hundred dollars charged to your credit card you'll be able to order a 3-meter resolution photo of any place on earth. Visit this simulation to appreciate the difference between 3-meter and 10-meter resolution [22]. In 1999 EarthWatch plans to launch the first of two next-generation QuickBird satellites with a minimum resolution below 1 meter. That's just about sharp enough to resolve people from space [23]. Here are specs for the EarlyBird and QuickBird satellites [24]. Eyes in the sky with such acuity must begin to raise privacy concerns. The Freedom Forum offers some cautionary thoughts [25], [26] from technology director Adam Clayton Powell III.

    [19] http://www.spot.com/
    [20] http://www.digitalglobe.com/news/pr_eb1launch.html
    [21] http://www.sjmercury.com/breaking/headline2/080192.htm
    [22] http://www.hitachi.co.jp/Prod/remosen/eng/3mimage.htm
    [23] http://www.hitachi.co.jp/Prod/remosen/eng/1mimage.htm
    [24] http://www.digitalglobe.com/company/ewconstell.html
    [25] http://www.freedomforum.org/technology/1997/12/31satell.asp
    [26] http://www.freedomforum.org/technology/1997/12/05sputnik.asp


    Multilingual chat

    This simple technology demonstration harnesses the Babel fish for simultaneous translation

    Art Medlar <art at archive dot org> has made unauthorized use of the SYSTRAN / Alta Vista translation facility [27] to construct a multilingual, translating chat room [28]. (He posts a greeting on the top page for "Mr. AltaVista," from whom he expects a complaining visit.) You choose one of the six supported languages to write in, and another or the same to read, and you can chat with your friends around the globe, each reading and writing in his/her native language.

    [27] http://www.tbtf.com/archive/1997-12-24.html#s12
    [28] http://www.archive.org/~art/babelchat.html


    The view from Softpro

    Forget the hype, here's where it's really at

    This week TBTF introduces a new feature -- a look at the industry through the lens of sales patterns at an established bookstore for computer professionals. Rick Treitman and his brother Bob run Softpro [29] in Burlington, Massachusetts (founded 1983). (A third brother, Jim, runs Softpro in Denver, Colorado.) Rick writes:

    Our view of the industry is a bit different than most. We tend
    to see where the development action is -- as opposed to the
    marketing noise. Our customers are people who need to crank
    out code and who are generally trying to take advantage of the
    latest technical developments.

    Please let me know what you think of this feature; it could become a TBTF regular.

    [29] http://www.softpro.com/

    The View from Softpro

    by Rick Treitman <rick at softpro dot com>

    Softpro, 112 Mall Road, Burlington, MA 01803-5300
    v.781-273-2917 <> f.781-273-2499 <> www.softpro.com


    December's best seller was not a book, it was Red Hat Linux 5.0. We have observed the Linux phenomenon steadily gathering steam for a couple of years now. In 1997 Red Hat took the sales lead, by a wide margin, over all of the other Linux distributors (Yggdrasil, Debian, Caldera, & Infomagic). Even more compelling is the momentum Red Hat is building: release 5.0 has sold at twice the rate of the previous release, 4.2. What we're seeing represents a victory for garage-shop software development, in that Red Hat is able to compete successfully against well-financed companies ten times its size. Red Hat Linux is also considerably more popular than the long-established FreeBSD.

    Red Hat's popularity has not gone unnoticed. SCO, until now the high-priced Unix, just released through Prentice Hall Technical Publishing a professional version of SCO Unix, for $79.99. They have to be feeling the market heat of so much good free Unix.

    Red Hat has forged a couple of valuable alliances: with Applix, whose Applixware software suites Red Hat now offers (in a separate box), and with the Free Software Foundation, whose familiar "Gnu" logo graces the latest release of Red Hat Power Tools.


    We have now seen 345 Java titles -- of which 240 were active in 1997. We do not see interest in Java going away. It remains one of the strongest categories in the store. In 1997 we sold 9000 of 'em. Contrast this with C++ books -- roughly the same number of titles tracked and active, but 6000 sold. The pattern seems to be that students learn C++, while professionals buy books on Java.

    NT, 95, and what used to be

    The demand for NT books continues to grow beyond the publishers' abilities to keep up. Programmers and corporate customers need NT programming books; the admin side is over-published. Windows 95 gets much less attention. By contrast in the entire year we sold only 50 books on Novell -- and of those, 10 were on migrating to NT! We can't find even a single book on OS/2 to sell.

    Year 2000 -- does anybody care?

    Publishers think that books on the much-hyped Y2K crisis should be a big deal. In 1997 we saw 10 titles published on the topic, with minimal interest on the part of our customers. Either this is a problem most people think they have under control, or they already understand Y2K and don't need a book on it.

    Softpro http://www.softpro.com/
    Red Hat http://www.redhat.com/
    Yggdrasil http://www.yggdrasil.com/
    Debian http://www.debian.org/
    Caldera http://www.caldera.com/
    Infomagic http://www.infomagic.com/
    SCO http://www.sco.com/
    Applix http://www.applix.com/
    FSF http://www.fsf.org/


    bul For a complete list of TBTF's (mostly email) sources, see http://www.tbtf.com/sources.html.

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