Month: January 2008

Penny-slots and DRE voting machines

The recent debacle over allowing voting in casinos at the Nevada democratic primary brings to mind an earlier comparison between gambling and voting. During the height of the Diebold controversy, one of the computer scientists speaking at CFP 2004 pointed out that users of slot-machines have more confidence in the integrity of the machine that users of voting machines. The reason is that gaming commissions in gambling centers such as Las Vegas require the machines to be licensed and certified. This does not make the odds any better necessarily for the players but it means that the machine is designed to deliver exactly those odds posted consistently. No cheating by the house to skew bets, decrease probability of winning for larger amounts, different days of the week etc.

Until recently direct-recording electronic machines had very little oversight and the certification program only provided a cursory look. Case in point: Diebold was de-certified in California just in time for CFP2004 as the above parallel was being drawn.

Putting voting machines in the midst of slots is a fitting juxtaposition.

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Self-negating advice on privacy

This suggestion from LifeHacker is unlikely to work. First it’s not all clear that the DNS names in question are affiliated with Google. The mappings can change and sending search-queries to random third party is hardly conducive to privacy. Second the threat model assumed here is a lost cause. Most enterprises control the computing environment used by their employees, right down to the software for web browsing. That means web history can be ferreted out of the client side, without having to sift through proxy logs or network traces. (Home user vs. over-reaching ISP is a better example.)

But there is another reason for the overwhelming futility of the idea: even if it were useful against the current crop of Big-Brother-ware because of an oversight in the URLs it logs, publicizing that blind-spot only ensures that the next versions are likely to fix the problem.

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NYT on shoulder-surfing at Grand Central ATMs

Catching up to past Sunday papers; this one from the Metro section dated 1/12/2008: the Times reports on a series of ATM fraud incidents at Grand Central station. A series of unauthorized withdrawals are traced to individuals lingering around the bank of ATMs, shoulder-surfing for PIN numbers and then stepping over to the ATM when the legitimate owner walks away without ending the session.

Not surprisingly the root-cause is bad usability: it is not intutitive to the user when they have “logged out” of the ATM for lack of better expression. There are two main design options: In the first case the card is inserted and stays inside the ATM until the transaction is complete. End of the session is signaled by the machine spitting out the card, letting the customer know it is safe to walk away. (For quick withdrawals there is even an additional forcing factor to guide users: the ATM will first return the card and wait to dispense cash until the user has taken the card back.)  The Grand Central ATMs used a different model: the card is swiped and in order to end the session the user has to answer the question “Do you want another transaction?” The problem is that question stays up for 17 seconds according to the article, enough time for a crook to walk up to the ATM and dip into the other fellow’s funds. As for location, Grand Central is the perfect setting.  Chances are people are hurrying to get some place or catch a train, making it even more likely they will not notice the ATM asking a question after the primary task is complete.

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Netflix, Apple and movie distribution over the Internet

Couple of announcements on movie distribution made the headlines recently:

  • At CES 2008 in Vegas, Netflix announced a partnership with LG to build a set-top box for streaming movies to consumers over the Internet. Movies will be free to existing Netflix subscribers, the only additional cost being the hardware.
  • Not to be outdone, Apple took the opportunity and preaching-to-the-choir environment of MacWorld to make a splash with its own take-two attempt at movie distribution, iTunes Movie Rentals.
  • Not to be outdone Netflix announced it was removing existing limits on streaming for subscribers– Netflix already had boasted a “watch now” feature where subscribers

What to make of these developments?

For Netflix users, it’s business as usual. This blogger’s account had its streaming limits lifted before the announcement, at least if the Netflix web page was correct about describing the program. Streaming works fine on a decent broadband connection already,  although the image quality is sub-par when projected on a TV and the software requires a Windows operating system because of its dependence on the DRM platform. (Also worked fine under Parallels on this bloggers’s Macbook Pro with Tiger.) Long-term trends in increasing bandwidth as well as availability of new options such fiber-to-the home means that the quality may improve to the point of being competitive with existing high-definition content options. Given that an average PC or laptop can easily feed a high-quality digital via DVI interface today (and some even boast HDMI output) the set-top has questionable value. At best it may be an all-in-one solution for consumers who are not tech-savvy but it’s hard to argue that learning how to connect a DVI cable to the TV is not worth the $$$ for the device. In all likelihood the hardware will be subsidized by Netflix and given away for free in exchange for binding contracts on an extended Netflix subscription– similar to the cell-phone/wireless plan model.

The main challenge for Netflix is the limited selection. While the main catalog for physical DVD distribution boasts tens of thousands of titles and current new releases, the “Watch Now” option limits viewers to 6000 titles, most of them ancient. It’s as if a record label decided to experiment with DRM-free downloads and started with the Perry Komo collection.

As for Apple, this is the second foray into movie downloads. Jobs admitted that the first time around was not very successful:

“We learned what people wanted was movies, movies, movies. […] We weren’t delivering that, so we’re back with Apple TV, take two.”

iTunes will charge $4 for new releases and $3 for the euphemistically named “library titles”(translation: dated junk featuring washed out movie stars from the 1980s) As with Netflix everything comes with the inane DRM baggage. Apple gives viewers 24 hours to finish the movie once downloaded, terms comparable to XBox Live movie downloads. At 640×480 image quality is hardly stellar but again there is room for improvement with an eye toward HD-quality in the future. Another significant disadvantage: iTunes requires download of the entire movie before it can be played. Netflix solution allows for streaming with intelligent buffering.

Ultimately the choice comes down to pricing models: Netflix is flat fee for all-you-can-download over a limited catalog that is likely to work better for independent film, documentaries and rehashed TV-series, as well as shoring up gaps in movie background– in case there is a friend who has not yet seen “The Clockwork Orange.” As back-up there is always the DVD arriving in the mail. iTunes is optimized for instant gratification over a more updated selection and a correspondingly higher price tag.

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MSFT and One-Laptop-Per-Child

OLPC project is showing a pattern of tumultuous relationships with leading IT companies. In the wake of a widely publicized fall-out with Intel comes a disagreement with Microsoft over the meaning of “dual-boot laptops.” To recap:  news reports suggested that OLPC and MSFT were working on models of the XO that could run both the custom Linux operating system and garden-variety Windows. Later Microsoft firmly denied these rumors and suggested the company had a different vision than Negroponte for integrating the Windows platform into the XO system.

Hardly any surprises here because XO laptop and Windows are ultimately irreconcilable concepts. There is no question that earning the loyalty of future PC users in emerging markets is critical for the long-term success in the platform battle. It is important enough to justify giving away copies of an operating system at a loss or trying to co-exist in an open-source ecosystem. But this is going to be a difficult balancing act.

One-Laptop-Per-Child project started out with the goal of producing $100 devices at scale. Some SKUs of Vista cost more than that already. This is a glimpse into the  impending reality check for Windows: as the price of hardware drops and the licensing costs for the operating system begin to constitute ever increasing shares of that price, vendors and customers are increasingly motivated to search for alternatives. Cost is a huge factor for OLPC but so is energy consumption and CPU/memory resources– two things that Vista has a voracious appetite for. That’s good news for Intel, AMD and for that matter any company supplying PC components: as long as the software continues to peg capabilities of the hardware, improvements in hardware can make a meaningful impact on the overall user experience and justify the investment.  But the target audience for OLPC is not subject to the standard hardware upgrade cycles, nor expected to meet the minimum recommended specs for Vista.

Even if copies of a highly stripped down version of Windows could be made to run efficiently in the highly minimalist specs of the XO and given away for free (similar to the Starter Edition sold at a significant discount at emerging markets where even the basic SKUs are very expensive compared to standard earnings) it will not create a sustainable advantage. Converting those free copies into full-paying licenses down the road will be a challenge to the extent that the premium for a Windows PC over an open-source one is appreciable– exactly the situation guaranteed by Moore’s law and dropping hardware prices.

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From the digital media front

Starting the year on a positive note:

  • On the last day of 2007, New York Times published an article about the University of Oregon resisting RIAA’s subpoena requests. In the Fight Over Piracy, a Rare Stand for Privacy points to the opposition from Oregon state Attorney General’s to RIAA request for student information. RIAA has been aggressively going after P2P file-sharing in higher-education. Quoting the article:

The recording industry may not be selling as much music these days, but it has built a pretty impressive and innovative litigation subsidiary.

Oregon AG is not taking a stand on the principle that file sharing should be legalized in all forms– that more extreme position, while espoused by EFF is unlikely to hold sway with the courts. Instead this is a more focused, tactical battle against the questionable approach used by RIAA in going after suspected file-sharers by pressuring colleges to work around due-process and presumption of innocence.

  • More labels announced support for publishing their catalog without DRM. Sony/BMG is the last label to get on the bandwagon; still a long way for a company that once root-kitted user machines in the name of content protection.
  • Better technology can succeed in the market: Warner may just have delivered the fatal hit to HD-DVD by throwing its weight behind Blu-Ray format pioneered by Sony. This new alignment brings everyone one step closer to the anticipated end of the high-definition DVD format wars. The 3% decline in DVD sales for the past year was in part being attributed to consumer reluctance to buy into a new format until the dust settled. Some companies such as Samsung tried capitalizing on the confusion by building dual-mode HD/Blu-Ray players but consumers balked at the price. Sony may have its revenge for losing the VCR format with BetaMax, which provided a textbook example of how a better technology (similar to BluRay having more storage capacity than HD-DVD) does not necessarily succeed in the marketplace against savvy deal-making. It sounds like Sony learned the lesson and aggressively pursued studios with heavy incentives for exclusive commitment to its favored format this time around.

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Comcast: 350 is the magic number

Postscript to  a two part series on Comcast throttling upstream bandwidth [1, 2]: a quick email exchange and Google search suggests that other subscribers noticed similar problems. Trevin,  a former colleague at MSFT wrote in a private communication that when using a remote backup service in the cloud, bandwidth is also capped around ~350kbps. Aside from an isolated thread on Slingbox community forums, this does not appear to have been publicized widely.

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2007 in retrospect: bone-headed business moments

Business 2.0 (now with same parent company as Fortune magazine) continues its tradition of the yearly 101 Dumbest Moments in Business, a tradition going back to 2001. Highlights from this year’s vintage of distinguished entities:

  • Leading the pack at #1 is China. The debacle of recalled toxic toys highlighted the dependency of US consumer spending on Chinese imports. Just in time for the unfolding scandal, a Baton Rouge area journalist published a new book about her family’s experiment to live for one year without purchasing any goods made in China. (Note to Apple: adding “designed in California” after “made in China” on your products does not help.)
  • Diebold remains a perennial contender after suffering more embarassment over new trivial attacks against its touch-screen voting systems. Florida state officials add insult to injury by ordering 5000 new units.
  • Waggener-Edstrom (simply “Wag-Ed” inside MSFT) for emailing a Wired author his own dossier that the PR firm had compiled about him. J. Edgar Hoover would be proud.
  • Bear-Sterns analysis department for continued persistence in deluded thinking about the extent of sub-prime mess.
  • BestBuy for setting up ringer online websites for in-store comparison shopping. This one wins an honorable mention for truth-in-advertising.
  • Apple– not exactly known for business savvy after years of getting clobbered by MSFT/Intel– threatens to sue a 9-year old girl for writing a letter to Steve Jobs suggesting improvements to the iPod Nano.
  • Frank Gehry. In post-modern architecture form may not follow function but litigation always does. The architect is sued by MIT after the Stata Center develops serious leak and mold problems because of water collecting on the oddly shaped roof-lines.
  • Whole Foods. For spending years to craft an image as a customer friendly, eco-conscious and socially-responsible business, the enterprise manages to shoot it all down in flames after revelations that the CEO had been trashing competitors on online finance forums under pseudonyms.
  • Radiohead? The jury is out on this one, as Wired magazine hailed it as a successful experiment although one unlikely to transform the larger industry because few artists have comparable leverage. (But the band has not released detailed figures on how much fans were paying left to their own devices.)
  • OLPC: One Laptop Per Child project joins the club. Frequently penned by critics for being an expensive blunder, this time Business 2.0 contends that the computers had been put to unexpected uses by children in a pilot program in Nigeria. Shocking.
  • WikiScanner or more specifically, the people WikiScanner caught altering entries on Wikipedia with obvious conflicts of interest.

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