TOC Connect the dots to find out what is a pronaocracy Your Turn

In a recent fillip (11/07), I have recalled the power of the traditional media. One of its most potent weapon is the campaign, during which successive contributions relentlessly hammer the same target or drive the same point home. After some of HP's highest executives made eprivacy redundant, we witnessed with some glee (9/12, 9/19, 10/03) how the Board of Hewlett-Packard trapped itself into a Grisham page turner. HP could not have given the media a better pretext.

We now applaud the "Stolen Lives" campaign waged since May by The New-York Times against ID theft (1). It happens that I have pursued the same goal for the same amount of time (see 5/30), albeit with slightly more modest means. Despite or maybe because of its vast resources, I feel however that the New-York Times is far too shy in its coverage and fails to present the big picture his readers fully deserve. Time to step in and connect the dots.

Highlighting the first dot, John Kay penned a column on the current debate on UK copyrights for music recordings (*). To put it succinctly UK record companies would like to extend such copyrights past their current 50 years duration. It is notorious that US movie companies already enjoys a more profitable 95 years thanks in particular to lobbying by the Walt Disney Company. One may sympathize with the fate of record companies or not (see 6/13). The fact is, their revenues have slumped with the rise of digital publishing and its illegitimate offshoot, copying.

Beyond movies and music industry, what's the idea as Plato would say? In today's world, think valuable data. Suppose someone originates data whose value is enjoyed for free by a user. If there is a copyright, the owner incurs a measurable financial loss. It amounts to the missing royalty payment. If there is no copyright, the owner has no measurable loss but why not ask the law to create one via a copyright extension?

Our second dot is a report filed by Brad Stone on a so-called data breach at UCLA, Los Angeles (**). A superficial observer could well wonder if this is not another campaign by the media. Indeed in the past two years we have been drowned in a flood of similar stories. One might as well suspect the weather section to be a campaign. Shower a few 100,000 IDs here and there. Add daily unreported drizzles of 10,000 IDs. Top it with major storms up to a few dozen million IDs. At this rate, every American's identity has probably been floated at least once (2) and people have come to expect ID precipitation reports from the media.

Again ask yourself what's the idea. Think inconvenience. Officials will educate people on the difference between a data breach, when ID's are made available for copying, and an actual ID theft, when an ID is used and the corresponding individual's credit suffers. So far most ID exposures do not lead to an ID theft. To the victims of a data breach, officials will simply "[recommend] to place a fraud alert on [one's] consumer credit reports".

The New-York Times campaign I saluted earlier provides the third dot with Eric Dash's analysis of how ID thefts affect credit report bureaus (***). Compare bureaus to banks. The former hold citizens' credit histories as the latter hold their money. Wouldn't you expect bureaus to suffer greatly from the present epidemic of credit theft? Eric Dash will set you straight. Credit bureaus continue as before to sell your credit report, adulterated or not, to anyone who asks. Now they also sell you credit monitoring. Since every "data breach" exposing ID's generates a free recommendation for such services, bureaus can save on marketing costs. Eric Dash shows us too how bureaus deliver a lousy service by avoiding to trace what use each report is put to, cutting implementation costs as well. As a result bureaus add almost a $1B in yearly revenues with margins I assume to be juicy.

Time to start connecting those dots. Eric Dash quotes a credit bureau spokesman as saying that when the monitoring service fails, "consumers are not harmed financially". This is the leitmotiv of the entire industry. So let us draw a parallel:

  • once their copyrights expire, movie and music companies are not "harmed financially" by citizens' free legal use of their valuable data. So they lobby for new laws to extend copyrights. They call it "fair play for musicians".
  • credit report bureaus, banks and retailers lobby against any new law which would protect ordinary citizens from theft of their valuable data. Citizens, they say, are not "harmed financially", only inconvenienced.
  • movie and music companies have quite successfully waged an all-out war in court against the financial harm they suffer from illegal copying of their valuable data under copyright protection.
  • credit report bureaus, banks and retailers have created the conditions of rampant ID theft. They now levy a $1B tax citizens would not have to pay were it not for ID theft. Yet they deny any "financial harm" is hurting citizens and fight any attempt to seek redress in the courts.
But wait here is a final dot, courtesy of Patti Waldmeier (****). Universal Music, the world's largest music company, is suing MySpace, the social networking Internet site recently bought by News Corp. Universal Music argues that MySpace users turn the site into a file sharing network to distribute bootlegged songs. The law (3) immunizes MySpace from any illegal activity by its users. Recent court cases which killed file sharing networks may perhaps give it some reasons to settle (4) though today's user-provided content sites are very different. My point is not about who is right. It is that a large corporation is put by another large corporation in a situation to defend millions of users in a matter of law because they act as its unpaid suppliers.

Whereas Patti Waldmeir invokes the power of markets to fix problems, I see the power of lobbies to fix markets. When elected representatives talk about decreasing taxes, I would rather have them check ever increasing election costs, financed by lobbies and indirectly paid by consumers through such levies as the $1B raised from credit monitoring. When, through intense lobbying, the law and the courts are used shamelessly by corporate interests to block the data rights of individual citizens unless another corporate interest happens to be threatened, I do not call it a democracy but a pronaocracy (5). The government of the people by the lobbyists for the corporate interests. Rome was once called a city for sale (6). I accuse the US Congress to be already sold.

The New-York Times has already published a series of in-depth analyses (see 10/03) on what I call ordinary, as distinct from criminal corruption. Why not connect the dots between the two campaigns, between ID theft and pronaocracy ?

Philippe Coueignoux

  • (*) ......Musicians' demands for copyright extension are off key, by John Kay (Financial Times) - December 12, 2006
  • (**).... 800,000 Affected by Data Breach, U.C.L.A. Says, by Brad Stone (New York Times) - December 13, 2006
  • (***) ..Protectors, Too, Gather Profits From ID Theft, by Eric Dash (New York Times) - December 12, 2006
  • (****) To punish MySpace is to stifle cyberspace, by Patti Waldmeir (Financial Times) - December 14, 2006
  • (1) see the New-York Times
  • (2) An Ominous Milestone: 100 Million Data Leaks, by Tom Zeller Jr. (New York Times) - December, 2006
  • (3) for more information, check Distributing Digital Information, in my lecture series, for the Communications Decency Act
  • (4) for more information, check Copying, in my lecture series, for the US Supreme Court Grokster decision
  • (5) with my apology for this neologism. Pronaos is an old Greek word for what we would today call a lobby.
  • (6) a quote from Jugurtha, whose insurgency against Rome was written by Sallust
December 2006
Copyright © 2006 ePrio Inc. All rights reserved.