Microsoft Bans Chipped Xbox Users

The BBC just ran an article on Microsoft banning an estimated 600,000 Xbox users from its online gaming service Xbox Live for running “chipped” systems: systems that have had their hardware modified in some way. While some chipped systems allow for the use of pirated software, they have a variety of purposes. It’s unclear what fraction of these systems are actually engaged in piracy.

While the “moral” aspect of the move may seem clear, the economic implications are somewhat more cloudy. What is clear is that Microsoft has kicked off a large number of paying users of its Xbox live system, indicating a substantial hit to a continuous, monthly income stream. This represents millions in financial harm to Microsoft. It also represents a substantial public relations fiasco with Xbox live users.

The benefits to Microsoft are much less clear. First and foremost, the banning of users from Xbox live does nothing to prevent users of “pirate systems” from actually pirating Xbox games. It only keeps them from playing the games online, on Xbox live. This suggests that lost income from Xbox live subscriptions will not be made up by legitimate game sales. Also, as discussed above, it is unclear as to the actual fraction of Xboxes that were put to infringing use. This means a number of Xbox live account holders may not have been pirating in the first place.

It seems strange that Microsoft would trade a guaranteed, multimillion dollar income stream for an uncertain drop in piracy and certain anger from its customers.

 

ACTA: An Outrage

An excellent example of regulatory capture came up just recently. If you’re not aware, there are ongoing negotiations in Korea over an international copyright treaty known as ACTA (The Anti-Counterfeiting Trade Agreement). ACTA is allegedly an international treaty about preventing counterfeit products, and the Obama administration has defended the treaty’s terms as State Secrets. This treaty will be binding on member states that sign it, serving as a kind of meta-legislation. Thus, while United States consumers and likely Congressmen as well, may not know anything about this treaty, they will be bound to its terms.

Here is the shameful part. While American consumers are claimed to have no right to comment or even view the proposed terms, Techdirt claims that U.S. negotiators “have met with entertainment industry representatives multiple times, and there are indications that those representatives have contributed language and ideas to the treaty.” The language of the treaty itself, which has been recently leaked, appears to confirm these suspicions. EFF notes that the treaty allows for ISP’s to take safe harbor from copyright infringement ONLY IF they enact vicious “three strikes” policies that would kick people off of the internet if they violated copyright.

This is troubling for a number of reasons. First, the ACTA treaty represents an intention to bypass the American voter and the American legislature itself in order to force a legal obligation upon citizens. That the current administration is blocking debate on this treaty by claiming it is a state secret is shameful. The hallmark of American lawmaking has always been the freedom to openly debate the merits of the law. The First Amendment itself protects Americans from government restriction of speech. Branding the treaty as a state secret, the administration has hobbled debate on an important issue of American freedoms and enforced a vacuum of knowledge.

The second troubling aspect of ACTA is that it imposes an inexplicably harsh punishment for violation of copyright laws. As we know, the internet is ever-evolving, and always taking a greater role in the lives of people across the word. The internet functions as bank, as telephone, as stationery, as soap-box, and retailer of the world. Thus, its role as a necessity of modern life is unquestionable. Also, copyright violations are usually decided by civil, not criminal lawsuits. Currently, the outright ban of internet access is debated even in criminal cases, which require a much stronger burden of proof. Such bans, even when they are approved, are reserved for the most heinous of criminals, such as child molesters.

Under the ACTA treaty, the Electronic Frontier foundation notes that “ISPs would be required to automatically terminate a customer upon a rightsholders’ repeat allegation of copyright infringement at a particular IP address.” If we recall, the courts are split as to whether internet access should even be banned for heinous criminals. Even when courts conclude that internet access should be banned for an individual, they require that the person be convicted of a crime with evidence that establishes guilt beyond a reasonable doubt. By contrast, ACTA endorses banning internet access when you are merely alleged to infringe a copyright. No proof, whatsoever, is required.

Time to call your congressman.

 

One Journalist’s Capture and Escape from the Taliban

I just had the chance to read over New York Times Journalist David Rohde’s account of his capture, detainment, and eventual escape from Taliban forces in and around Afghanistan and Pakistan. His story is impressive and informative, and if you haven’t read it yet, you should definitely give it a chance. One interesting aspect of his story concerns the ability of his captors to hold numerous, conflicting viewpoints at the same time. In an instance of cognitive dissonance, they hated America because they claimed American attacks killed civilians, yet used suicide bombing tactics that were guaranteed to harm civilians themselves. It’s an interesting, and sad read. Definitely worth your time if you haven’t seen it yet.