Perhaps the next time Brad Smith heads to Brussels, it will be for a vacation.
After years of wrangling with Microsoft, the European Commission announced an accord with the software giant Wednesday on several fronts that seems poised to put an end to its antitrust concerns with Redmond.
Brad Smith
(Credit: Microsoft)In the wake of the announcement, I spoke to Smith, Microsoft's general counsel, about the decision, what it means for the future of Windows, and whether the company sees its spot on the antitrust hot seat now being taken up by other companies, including Google.
Here's an edited transcript of our conversation:
Q: Is this really it as far as Europe is concerned?
Smith: This is definitely a major milestone for Microsoft. Today's announcement reflects a broad set of agreements that really address a wide array of issues. At the same time, we obviously need to keep our eye on the ball. Antitrust issues will continue to be important for us, just as they are going to continue to be important for a number of other leaders in our industry. We're going to have to do an excellent job implementing these agreement. We are going to have to do an excellent job addressing any new issues that arise in the future. Having said all that, I also think it is fair to say, as Commissioner [Neelie] Kroes did when she spoke in Brussels, this does represent the closing of one chapter and gives us the opportunity to open a new chapter. We're definitely enthused about that opportunity and we're committed to ensuring the next chapter is a positive and constructive one.
One of the things that Steve Ballmer talks a lot about in terms of antitrust issues is getting legal clarity on what one can and can't do. Do you feel like you now have that understanding with the EU?
Smith: I think this gives us a great deal more clarity. I think it gives the industry as a whole more clarity. It's perhaps most helpful in the area of interoperability because it really implements a new framework. It applies to a broad array of Microsoft products--Windows, Windows Server, Exchange, SharePoint--and for all of these products it has certain principles that we have to adhere to. It addresses the way we implement file formats.
At the same time, no advance on any single day can ever answer all questions for all companies for all time.
Essentially the EU has said through its very objections that you can't put a media player in Windows and you can't put a browser in Windows. What do you feel Microsoft can include in future versions?
Smith: There are two things to think about. First is what gets included in Windows, and second, what's the right way to address something that is included.
Our basic approach is to include in Windows, software that has APIs (application programming interfaces) that will be beneficial for other applications to call on and use. The browser is definitely an example of that. It's quite probably even more important in that role today than it was, say, when the browser issues first arose in the 1990s. The media player plays a similar role in terms of some broad APIs that are used by a wide variety of other applications.
There are other things that we have put in Windows in the past that don't necessarily involve the same role. A good example of that is Windows Live Messenger. We had Windows Messenger in Windows XP. It's not in Windows Vista or Windows 7 We're trying to make thoughtful decisions about what is included.
Then the second question that arises is how do things get included. How do we document APIs that our browser is using so that other browsers can use them as well? That's part of the U.S. consent decree.
How do we ensure that [computer makers] have flexibility to offer competing choices? How do we ensure that consumers are aware of competing choices and can use them if they wish. That latter part is an area where different governments have chosen different approaches at different times. The U.S. Department of Justice chose one approach in its consent decree. The Korean Fair Trade Commission chose a second approach. The European Commission in the media player case in 2004 chose a third approach. Today's announcement on the browser reflects the European Commission choosing a fourth approach.
Some people have the opinion that as a result of these different antitrust issues, Microsoft really finds itself with one hand tied behind its back as it competes in the battles of today. Do you believe Microsoft in the current antitrust environment competes on an even footing with some of the other Internet giants?
Smith: I do believe it is very important for all technology leaders in our industry to follow the same laws and obey the same rules. The rules don't necessarily apply in the same way when a company has a small market share as it does when a company has a large market share. But there are a number of companies that have large market shares for very important products. We've taken a number of steps to get into line with new legal rules in this field. The law has evolved and we've needed to evolve to address these new obligations.
We do believe our competitors need to play by the same rules. They've often been at the forefront of asking regulators to evolve the law in new directions. Now that the regulators have done so, we believe they need to pay attention as well.
Do you anticipate a period of time over the next few years where Microsoft is more likely to be the subject of antitrust inquiries or the company on the other side of the table for a change?
Smith: I think that we have addressed a very wide array of issues. Perhaps, in part because we were the first company to have to go through these inquiries, at least since the dawn of the PC era. We've probably had to go farther and sooner than other companies have had to do. We're now in an era where a different company seems to be in the headlines for competition law issues, if not every day, at least every month.
I think that what we are going to see in the next decade is this field of law being applied to a wide number of technology leaders that have high market share. We're going to see that, not only in Washington and Brussels, but we're likely to see that in more countries around the world simply because the global economy has evolved.
Have you expressed concerns specifically to Europe or Washington, D.C., about some of Google's behaviors?
Smith: We were very transparent last year when Google entered into its agreement with Yahoo. We felt that that was an illegal agreement that Google had entered into for the sole purpose of preventing Microsoft from becoming a more successful competitor, together with Yahoo, in the search space.
It was only when the Department of Justice informed the parties that it was on the verge of filing suit that Google decided to drop that agreement. We have not been shy about raising concerns when we have them.
It was only a couple hours after you guys settled with Brussels that we heard from D.C. with regards to Intel. When you initially heard that the FTC was filing suit against Intel, did you have feelings of empathy toward what their lawyers are going through, or what were your initial reactions?
Smith: I obviously know from a lot of firsthand experience the challenges that arise when a company needs to address these kinds of issues. Our road was a long one and it had its share of difficult moments. Antitrust issues are never easy for company to address.
This isn't a case where Microsoft has taken a public stance or even voiced to the regulators a position, is it?
Smith: We have not taken any public or nonpublic positions on the issues.
Are you guys looking to reach an agreement with Plurk? You guys said that you used code you shouldn't have? I'm curious if you are trying to negotiate some sort of settlement with them?
Smith: I wouldn't want to say anything that goes beyond the public statement we put out.
It does seem when I look at any particular issue with regards to the Internet, Microsoft tends to have a much more cautious approach. It seems like it is tough to compete when others are bundling more than you.
Smith: I think our goal is to be thoughtful but also fast-moving. As we look at the Internet today, it is increasingly a regulated space. That wasn't the case a decade ago. I think a thoughtful company needs to really think through how its products and services are going to comply with the regulations that are going to be enforced or likely to be applied in many different countries around the world. At the same time, one cannot let that get in the way of moving forward quickly. I think it's striking that balance that is really quite important. One needs to move fast. One shouldn't move faster than speed of thought and yet one shouldn't be so thoughtful that one simply analyzes problems and fails to solve them.
Do you think Microsoft has erred a little too much on side of caution in recent years?
Smith: I don't know that we've erred too much on the side of caution, but I do think it's extremely important we move quickly. This is a very dynamic space it is certain to remain a very dynamic space. Customers are interested in deploying new products and services, whether it is on the client, on the server, or on the cloud. The real key is to develop the capability to be both thoughtful and fast moving.
MySQL co-founder Michael "Monty" Widenius is leading a chorus of voices expressing growing apprehension over the proposed Oracle-Sun merger.
In a statement posted on his blog on Monday, Widenius said the European Commission is "absolutely right to be concerned" about the $7.4 billion takeover of Sun by Oracle, and he urged Oracle to sell MySQL to clear up any antitrust issues.
Although the deal received the thumbs-up from the U.S. Department of Justice in August, the Commission opened a probe in early September, citing fear that Oracle's ownership of MySQL could pose a competitive threat.
In his blog, Widenius asked Oracle "to be constructive and commit to sell MySQL to a suitable third party, enabling an instant solution instead of letting Sun suffer much longer." The famed MySQL developer, who departed Sun earlier this year, said that he wishes Sun "all the best, but MySQL needs a different home than Oracle, a home where there will be no conflicts of interest concerning how, or if, MySQL should be developed further."
Another voice uneasy about the Oracle-Sun venture is Florian Mueller, an EU policy expert who is a former MySQL shareholder and adviser. Mueller had helped Widenius' new company, Monty Program, urge the EU to investigate the anticompetitive effects of a MySQL owned by Oracle.
"Letting Oracle have MySQL is worse than putting the fox in charge of the henhouse, because the hens are no threat to the fox, while MySQL makes Oracle lose customers and forces it to grant discounts to customers threatening to defect," Mueller said in a statement.
Monty Widenius
(Credit: MySQL/Sun Microsystems)"Every day that passes without Oracle excluding MySQL from the deal is further evidence that Oracle just wants to get rid of its open-source challenger, and that the EU's investigation is needed to safeguard innovation and customer choice," Mueller added. "This is highly critical because the entire knowledge-based economy is built on databases."
Though several analysts have questioned the EC's motivation for probing the deal, Mueller firmly backs the commission.
"It's inappropriately arrogant for some interested parties to suggest that the EC has yet to understand the case," he said. "The EC is really doing a great job under huge time pressure." In August, Mueller helped write a position paper (PDF) on MySQL that Widenius' Monty Program gave to the EC.
And in yet another condemnation, Richard Stallman, founder of the free-software movement, wrote an open letter to the EU on Monday opposing an Oracle-owned MySQL as a threat that would hinder its further development in the open-source community.
Other prominent names, though, disagree. Earlier this month, MySQL ex-CEO Marten Mickos urged the EU to OK the deal, arguing that by delaying the merger, the EU is hurting the very competitive atmosphere that it claims to want to protect.
Major database players, including HP and IBM, have already reportedly taken advantage of the delay to win over customers from Sun.
In the meantime, Sun continues its downward spiral. Late Tuesday, the company confirmed that it would lay off another 3,000 employees, about 10 percent of its total workforce, over the next year. This latest round is in addition to 6,000 jobs cuts announced almost a year ago as part of the company's restructuring plan.
On Oracle's part, CEO Larry Ellison said last month that despite the EU's probe, Oracle has no intention of spinning off MySQL.
Clarification at 9:35 a.m. PDT: Widenius is a co-founder of MySQL, the company.
Microsoft's top lawyer said that a tentative agreement with Brussels announced earlier Wednesday could potentially allow the software maker to move out of the regulatory crosshairs, perhaps paving the way for regulators to shift their attention elsewhere.
"It's important for us to get closure in Europe on issues that have obviously been controversial for over a decade," General Counsel Brad Smith said in an interview. "Today's decision takes us an important step closer to doing that."
Smith
(Credit: Microsoft)Microsoft initially took a much different approach to the European Commission's assertion that the inclusion of a browser in Windows violated antitrust law. The company had initially proposed just stripping out the browser from Windows 7 entirely, leaving users the prospect of trying to get a browser on their own. The software maker eventually backed down after indications that that approach was unlikely to fly.
While not final, Microsoft's moves would appear to resolve all of its outstanding regulatory issues with the Commission and were greeted warmly by regulators on Wednesday.
Although most of the early attention focused on the agreement around a browser "ballot screen," Microsoft also announced on Wednesday an agreement around product interoperability. Under that deal, a 10-year commitment by Microsoft, the software maker agrees to publish communication protocols and adopt certain standards as part of Windows, Windows Server, Office and other high market share products. Companies could also purchase for 5,000 euros a warranty that would subject Microsoft to court oversight and monetary penalties if it doesn't live up to its commitments.
Smith said that the approach Microsoft took with regard to interoperability was designed to adopt methods that Nellie Kroes, commissioner for competition, had outlined in a speech last year for how companies with high market share products should behave.
"I actually think this in effect implements the model that the Commission has been advocating," Smith said. Moreover, he said it is a model that other software companies should pay attention to, he said, noting that there are lots of companies that have high market share. He noted that Google has 78 percent of the paid search market and IBM has 100 percent of the mainframe market, while Adobe also has dominant positions in certain areas, such as Photoshop.
"It is important we believe to create a level legal and regulatory playing field," Smith said. "Everyone that has a high market share needs to respect the same set of rules. I think a number of these rules are likely to be applicable to other companies and other products."
Settling now with Brussels also could help Microsoft in its effort to win approval for its search deal with Yahoo, Smith said.
"This certainly isn't going to hurt when it comes to the Yahoo-Microsoft agreement," he said. "It's not necessarily going to make a huge difference. We didn't feel a particular step was needed to help it along."
Microsoft is in the process of trying to ascertain whether the deal needs approval from Brussels or from individual European antitrust authorities. It also needs approval from U.S. regulators, who have asked for more information on the deal.
Mozilla and Opera are both unhappy with Microsoft's proposed "ballot screen" to let Windows users in Europe select their default browser, according to a report in The Wall Street Journal.
Microsoft's proposed browser ballot screen is its attempt to satisfy the antitrust investigation from the European Union over Internet Explorer's dominance in Windows. The screen would present the user with a menu to install other browsers, including Firefox, Opera, Google Chrome, and Safari, and let the user pick one as the default.
Microsoft became open to the concept over the summer as an alternative to removing IE from Windows for the European market.
At the time, the idea appealed to Opera CEO Hakon Wium Lie, who declared, "It's a happy day for us. We certainly think the ballot is good news and think it will give users a genuine choice." But Mozilla Corp. CEO John Lilly adopted a more wait-and-see approach, saying he wanted to see the specifics before reacting.
EU officials asked rival browser makers among others for their input on Microsoft's proposal, sending them questionnaires over the summer, according to the report.
After checking out the ballot screen and the proposal from Microsoft, the European Union for Interoperable Systems (ECIS), which includes Opera Software ASA as one of its members, said it presents too many hurdles for the average user.
According to Sunday's Wall Street Journal (subscription required), ECIS and Opera attorney Thomas Vinje said that selecting another browser requires "the user to confirm and answer threatening and confusing warnings and questions. Microsoft has cunningly found a way to accept the Commission's suggestion of a ballot screen, but to do so in a way that will be entirely ineffective."
In response to an e-mail from CNET, Vinje said that Microsoft's current ballot screen falls short of having any effect on competition since it fails to offer users a seamless and unbiased choice of browser. However, he felt the problem could be fixed with some trivial changes.
He said that despite choosing an alternate browser through the ballot, Internet Explorer would remain turned on and that only an additional procedure would allow the user to deactivate IE. So the ballot screen is simply installing another browser in addition to IE rather than offering users a choice of a single browser.
Adding an alternative browser is unnecessarily complex, according to Vinje. The ballot screen, set up as a Web page in IE, requires many unnecessary clicks, displays threatening warnings, and poses confusing questions before another browser can be downloaded and set up. He believes users will be discouraged from selecting an alternative browser.
The ECIS feels that a powerful, yet trivial change to Microsoft's proposal is needed: the ballot screen must be designed to offer users a seamless choice in which a single click for an alternative browser is sufficient to download and install that browser, without warnings or questions, and without leaving Internet Explorer active and visible.
"Choosing an alternative browser must not be more cumbersome than choosing Internet Explorer," said Vinje, "which can only be accomplished in a real ballot screen application--not in a Web page."
Countering with suggestions
Mozilla has said that a ballot screen is a good step, but as currently proposed, it's not good enough. A blog written August 18 by Mozilla's general counsel, Harvey Anderson, examined Microsoft's specific language and functionality in the ballot screen proposals. Anderson addressed several concerns and countered with his own suggestions.
Anderson praised Microsoft's effort to not include links or shortcuts to IE inside Office 2007 but said it should be expanded to include all Microsoft software. "If Microsoft applications need to launch a browser, they should only launch the user's default browser," he wrote. "The proposal should be modified such that this provision applies to all Microsoft desktop software, and certainly to the already announced Office 2010."
Anderson also expressed concerns about the ballot screen itself, saying IE could automatically become the default browser in a number of scenarios. It could end up as the default if the user ignores the ballot or can't figure out how to use it. It could also wind up the default if the user runs into problems trying to install one of the other browsers. But in this case, his only suggestion was that the ballot require the user to make a choice.
Finally, Anderson said that the ballot doesn't educate the user as to what a Web browser is or how each browser differs. "The ballot should introduce the user to at least a simple definition of what a browser is before offering the user a choice in browsers," he wrote. "It should probably go one step further and explain that the different browsers compete for superiority in the areas of ease of use, security, and customizability. "
Other voices have chimed in to criticize the ballot screen. Mitchell Baker, chair of the nonprofit Mozilla Foundation, detailed her concerns in a blog on August 17. Despite the user's ability to choose a different default browser, Baker said she believes IE would still have the upper hand with a prominent position on the Windows desktop and Taskbar.
"Choosing another browser as a 'default' does NOT mean that the other browser takes the place of IE," stated Baker in her blog. "For example, the IE logo ("shortcut") still remains unchanged on the desktop. The shortcut/logo of the browser the user has selected does not replace this, it is added elsewhere. As a result, the familiar location remains IE, not the user's choice."
Baker also expressed concern that the average nontechnical user may have trouble navigating the different screens required to choose a different browser. She said she believes the ballot screen only helps users download alternative browsers and should be designed to help them install, open, and make other browsers the default. "As proposed, we expect to see many people who want other browsers get lost in the process before they actually succeed in making an alternative browser their main browsing tool," she wrote.
The EU had hoped to wrap up this final phase of its investigation into IE, especially since all parties have agreed at least in principal to the idea of a ballot screen. But the competition could stall final approval if Microsoft is forced to wrestle with the finer points of the complaints.
Vinje believes that Microsoft only superficially accepted the EU's suggested remedy and that the ballot screen as designed does not restore competition. He said the EU will be careful to make sure that any proposed solution would be effective. And in this case, the ECIS would be surprised if Microsoft's proposal were accepted without "significant modifications."
On Tuesday, Microsoft spokesman Kevin Kutz said: "In July, we made a new proposal to address EU competition law issues related to Internet Explorer and interoperability. The Commission welcomed our proposal and announced it would assess its effectiveness. We continue to look forward to the next steps in this process."
Requests for comments from Opera and Mozilla were not immediately returned.
Update 12:15 p.m. PDT: Added comments from attorney Thomas Vinje.
An adviser to the European Union has sided with Google in the company's battle with Louis Vuitton and others over alleged trademark infringement.
The search giant is fighting a lawsuit in the European courts against several companies that claim Google is infringing on their trademarks by allowing advertisers to buy keywords that match those trademarks.
Led by LVMH's Louis Vuitton, the companies are upset that makers of imitation items can buy those keywords through Google's AdWords, allowing their products to pop up in searches alongside the genuine article.
But in a statement released by the European Court of Justice on Tuesday, adviser and Advocate General Poiares Maduro said that "Google has not committed a trademark infringement by allowing advertisers to select, in AdWords, keywords corresponding to trademarks."
Maduro's opinion is that the use of trademarks is limited to the selection of keywords internal to AdWords and as such only concerns Google and its advertisers. When selecting keywords, no product or service is being sold to the public, therefore, neither Google nor its advertisers are infringing on any trademarks, said Maduro.
In response to the concern that makers of imitation products can grab certain keywords, the Advocate General put the responsibility firmly in the hands of consumers.
"The mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services," said Maduro in the statement. "Internet users are aware that not only the site of the trademark owner will appear as a result of a search in Google's search engine... These users will only make an assessment as to the origin of the goods or services advertised on the basis of the content of the ad and by visiting the advertised sites."
Maduro's opinion doesn't leave Google totally in the clear. Maduro said the company might be liable if found to feature content in AdWords that infringes on a trademark. But even in this case, the trademark owner would have to cite specific instances of damage to their trademarks in order to hold Google accountable.
Trademark issues over AdWords have plagued Google for years, both in the U.S. and especially in Europe where Louis Vuitton and others have taken the company in and out of court. French justice has generally found in favor of the trademark owners, usually ordering Google to pay a fine. But the issue has never been definitively settled.
In response to the latest round of legal squabbles, the French court has asked the European Court of Justice to now settle the issue.
The Advocate General's statement is not binding on the court, but the opinion is strongly considered. The court is now reviewing the case and will render its judgment at a later date.
In a reversal on Friday, Microsoft said it is now open to allowing users in Europe to select competing browsers in Windows 7.
Essentially, Microsoft is offering to put into Windows a way for consumers to easily install a rival to Internet Explorer. PC makers, as they can today, could still install a rival browser and could also disable Internet Explorer, if they choose.
"Under our new proposal, among other things, European consumers who buy a new Windows PC with Internet Explorer set as their default browser would be shown a 'ballot screen' from which they could, if they wished, easily install competing browsers from the Web," Microsoft general counsel Brad Smith said in a statement.
As first reported by CNET News earlier this month, Microsoft had hoped to comply with Europe's objections to the inclusion of a browser in Windows simply by removing the browser entirely from Windows 7. However, the European Union indicated that such a move might not satisfy its concerns.
"Under the proposal, Windows 7 would include Internet Explorer, but the proposal recognizes the principle that consumers should be given a free and effective choice of Web browser, and sets out a means--the ballot screen--by which Microsoft believes that can be achieved," the commission said in a statement. "In addition, (computer makers) would be able to install competing Web browsers, set those as default and disable Internet Explorer should they so wish. The Commission welcomes this proposal, and will now investigate its practical effectiveness in terms of ensuring genuine consumer choice."
For now--and until the EU accepts Microsoft's proposal--the software maker said it will continue to ship only the browserless "E" version in Europe.
Opera votes for the ballot
Hakon Wium Lie, who as CEO of Opera Software has been outspoken about the IE antitrust issue, was delighted with the proposal.
"It's a happy day for us," Lie said. "We certainly think the ballot is good news and think it will give users a genuine choice."
What's not yet clear is what browsers will appear on the ballot list. Naturally, Lie is concerned about that matter.
"The rules for getting onto the ballot will be something the EU will watch closely," Lie said. It wouldn't be a good idea "to limit it to only one or two, but exactly how many is a good question."
Mozilla, which oversees development of the open-source Firefox browser, was more cautious.
"We're interested in seeing the specifics of the proposal that Microsoft is making and until that point it's hard to have a definitive reaction," said Chief Executive John Lilly in a statement. "It is, of course, a good development that Microsoft will make changes to allow users to choose their own default Web browser, as today's browser mediates so much of our online experience."
Mozilla also had questions about criteria to be selected for the ballot, what terms Microsoft might impose to be part of it, and whether Microsoft will update versions of Windows already running with the ballot.
User headaches
The planned browserless version would create a number of headaches for users, including forcing them to try to download a competing browser without having Internet Explorer to do so, as well as making it more difficult to upgrade to Windows 7 than it would otherwise be. For example, moving from Vista to Windows 7 "E" would require a new installation of the operating system, while users elsewhere can just upgrade their existing Windows installation.
"While the Commission solicits public comment and considers this proposal, we are committed to ensuring that we are in full compliance with European law and our obligations under the 2007 Court of First Instance ruling," Smith said. "PCs manufacturers building machines for the European market will continue to be required to ship 'E' versions of Windows 7 until such time that the Commission fully reviews our proposals and determines whether they satisfy our obligations under European law.
Microsoft is also committing to "a public undertaking designed to promote interoperability between third party products and a number of Microsoft products, including Windows, Windows Server, Office, Exchange, and SharePoint."
The software maker faces a separate complaint over Office.
"Like the Internet Explorer proposal, the interoperability measures we are offering involve significant change by Microsoft," Smith said. "They build on the Interoperability Principles announced by Microsoft in February 2008, which were also based on extensive discussions with the Commission, and they include new steps including enforceable warranty commitments."
Microsoft has had "preliminary talks" with European Union officials with the hopes of settling several regulatory probes, according to a Bloomberg report.
According to the report, Microsoft is aiming to settle the matters before EU Competition Commissioner Neelie Kroes steps down at the end of the year. One issue is the EU's well-publicized concern over the bundling of Internet Explorer into Windows, while the other pertains to Office software, Bloomberg said.
The EU earlier this year issued a preliminary finding that the inclusion of a browser in the operating system violated European antitrust law and has been exploring a variety of potential remedies, including forcing Microsoft to distribute rival browsers with its operating system.
Last month, CNET News reported that Microsoft was planning to ship Windows 7 in Europe only in versions that had the browser feature removed, aiming to sidestep regulatory action. However, both the EU and rivals issued concern over that approach.
As for the Office inquiry, Microsoft has said it was opened in January 2008 and resulted from complaints filed by a trade association of Microsoft's competitors.
An EU spokesman did not immediately respond to a request for comment on the report of settlement talks and a Microsoft representative declined to comment. Both Microsoft and an EU spokesman declined to comment in the Bloomberg report.
WASHINGTON--The massive "stimulus" bill that's careening through the U.S. Congress spends billions of dollars in areas including green technology, energy research, and rural broadband.
Congressional leaders have made sure it comes with some strings attached. A "Buy American" requirement remains after the Senate failed to remove it by a 31-65 vote. Net neutrality rules for broadband spending is another condition that's been imposed.
But strikingly absent is one provision that unions would seem to naturally prefer: requirements that spending be directed at unionized firms, or at least focused on jobs with minimum hourly wages.
A report (PDF) released Thursday by labor groups called for any stimulus subsidies to include "wage requirements" and a "prevailing wage policy" as well as an end to the practice of giving contracts to the lowest bidder.
The report, commissioned by the the Sierra Club, Change to Win, the Laborers International Union of North America, and the International Brotherhood of Teamsters, said that new jobs created through spending on "green" technology wouldn't meet their standards. It argues that wages at some renewable energy facilities don't compare to those at other durable goods manufacturing facilities.
A representative of the United Steelworkers of America told CNET News: "The stimulus need not necessarily have any 'mandatory' labor requirements, per se. That said, we believe the Buy American provisions are the absolute cornerstone of revitalizing American manufacturing."
Technology industry representatives expressed skepticism on Wednesday that union-backed demands like the "Buy American" requirements were wise. In addition, AT&T, IBM, Intel, Microsoft, and others sent a letter to the Senate saying--in no uncertain terms--that the idea "will harm American workers."
Jared Bernstein, Vice President Joe Biden's economic policy adviser, said at a conference called Good Jobs Green Jobs that the economic package includes funding for the Green Jobs Act, which passed in 2007 without any appropriations, to provide "green" job training and apprenticeship programs. He said that such measures would "create a regime shift in the demand for jobs...potentially good jobs, union jobs, living wage employment."
However, while the House version of the "stimulus" bill included $500 million for the Green Jobs Act, the Senate version currently only includes $250 million.
"And it's probably under attack," said Chris Chafe, executive director of Change to Win, a coalition of various unions.
"To cut back on that means you're going to put taxpayer dollars into projects that will not create the best jobs for workers," he said. "It's great for the people in it for a couple years, but at the end of the day, if we don't have a career path attached to these jobs, we lose."
Chafe argued that training programs would not only give workers more stability but also make it easier for private firms to take over the "green" industry.
Some union leaders and venture capitalists said they'd like to find ways to work together. One benefit, according to two VCs on a panel, is that a well-trained, well-treated workforce creates a more authentically "green" company--and, subsequently, a better investment.
In labor-intensive infrastructure projects--which the VC firms said most of the green economy will consist of--"the cost of talent, the availability of talent is one of the unknowns," said Jeffrey King, the director of new product development for Pacific Crest Securities. "Investors, what they want more than anything else is information and predictability. Clearly, labor is one of the best sources of information."
"There's also a growing understanding of the power labor brings to the conversation," King said. "There are investors out there who do understand being at the table with labor in the policy conversation is going to be a lot more proactive than just complaining."
Innovation-based industries have not worked well with unions in the past. Of the brightest stars in the high-tech firmament--Google, Apple, Microsoft, Yahoo--not one is unionized.
CNET's Declan McCullagh contributed to this report.
A United Nations agency is quietly drafting technical standards, proposed by the Chinese government, to define methods of tracing the original source of Internet communications and potentially curbing the ability of users to remain anonymous.
The U.S. National Security Agency is also participating in the "IP Traceback" drafting group, named Q6/17, which is meeting next week in Geneva to work on the traceback proposal. Members of Q6/17 have declined to release key documents, and meetings are closed to the public.
The potential for eroding Internet users' right to remain anonymous, which is protected by law in the United States and recognized in international law by groups such as the Council of Europe, has alarmed some technologists and privacy advocates. Also affected may be services such as the Tor anonymizing network.
"What's distressing is that it doesn't appear that there's been any real consideration of how this type of capability could be misused," said Marc Rotenberg, director of the Electronic Privacy Information Center in Washington, D.C. "That's really a human rights concern."
Nearly everyone agrees that there are, at least in some circumstances, legitimate security reasons to uncover the source of Internet communications. The most common justification for tracebacks is to counter distributed denial of service, or DDoS, attacks.
But implementation details are important, and governments participating in the process -- organized by the International Telecommunication Union, a U.N. agency -- may have their own agendas. A document submitted by China this spring and obtained by CNET News said the "IP traceback mechanism is required to be adapted to various network environments, such as different addressing (IPv4 and IPv6), different access methods (wire and wireless) and different access technologies (ADSL, cable, Ethernet) and etc." It adds: "To ensure traceability, essential information of the originator should be logged."
The Chinese author of the document, Huirong Tian, did not respond to repeated interview requests. Neither did Jiayong Chen of China's state-owned ZTE Corporation, the vice chairman of the Q6/17's parent group who suggested in an April 2007 meeting that it address IP traceback.
A second, apparently leaked ITU document offers surveillance and monitoring justifications that seem well-suited to repressive regimes:
Steve Bellovin
(Credit: Declan McCullagh/mccullagh.org)
A political opponent to a government publishes articles putting the government in an unfavorable light. The government, having a law against any opposition, tries to identify the source of the negative articles but the articles having been published via a proxy server, is unable to do so protecting the anonymity of the author.
That document was provided to Steve Bellovin, a well-known Columbia University computer scientist, Internet Engineering Steering Group member, and Internet Engineering Task Force participant who wrote a traceback proposal eight years ago. Bellovin says he received the ITU document as part of a ZIP file from someone he knows and trusts, and subsequently confirmed its authenticity through a second source. (An ITU representative disputed its authenticity but refused to make public the Q6/17 documents, including a ZIP file describing traceback requirements posted on the agency's password-protected Web site.)
Bellovin said in a blog post this week that "institutionalizing a means for governments to quash their opposition is in direct contravention" of the U.N.'s own Universal Declaration of Human Rights. He said that traceback is no longer that useful a concept, on the grounds that few attacks use spoofed addresses, there are too many sources in a DDoS attack to be useful, and the source computer inevitably would prove to be hacked into anyway.
Another technologist, Jacob Appelbaum, one of the developers of the Tor anonymity system, also was alarmed. "The technical nature of this 'feature' is such a beast that it cannot and will not see the light of day on the Internet," Appelbaum said. "If such a system was deployed, it would be heavily abused by precisely those people that it would supposedly trace. No blackhat would ever be caught by this."
Jacob Appelbaum
(Credit: Declan McCullagh/mccullagh.org)Adding to speculation about where the U.N. agency is heading are indications that some members would like to curb Internet anonymity more broadly:
• An ITU network security meeting a few years ago concluded that anonymity should not be permitted. The summary said: "Anonymity was considered as an important problem on the Internet (may lead to criminality). Privacy is required but we should make sure that it is provided by pseudonymity rather than anonymity."
• A presentation in July from Korea's Heung-youl Youm said that groups such as the IETF should be "required to develop standards or guidelines" that could "facilitate tracing the source of an attacker including IP-level traceback, application-level traceback, user-level traceback." Another Korean proposal -- which has not been made public -- says all Internet providers "should have procedures to assist in the lawful traceback of security incidents."
• An early ITU proposal from RAD Data Communications in Israel said: "Traceability means that all future networks should enable source trace-back, while accountability signifies the responsibility of account providers to demand some reasonable form of identification before granting access to network resources (similar to what banks do before opening a bank accounts)."
Multinational push to curb anonymous speech
By itself, of course, the U.N. has no power to impose Internet standards on anyone. But U.N. and ITU officials have been lobbying for more influence over the way the Internet is managed, most prominently through the World Summit on the Information Society in Tunisia and a followup series of meetings.
The official charter of the ITU's Q6/17 group says that it will work "in collaboration" with the IETF and the U.S. Computer Emergency Response Team Coordination Center, which could provide a path toward widespread adoption -- especially if national governments end up embracing the idea.
Patrick Bomgardner, the NSA's chief of public and media affairs, told CNET News on Thursday that "we have no information to provide on this issue." He would not say why the NSA was participating in the process (and whether it was trying to fulfill its intelligence-gathering mission or its other role of advancing information security).
Toby Johnson, a communications officer with the ITU's Telecommunication Standardization Bureau in Geneva, also refused to discuss Q6/17. "It may be difficult for experts to comment on what state deliberations are in for fear of prejudicing the outcome," he said in an e-mail message on Thursday.
U.N. "IP traceback" documents
China's proposal obtained by CNET News says "to ensure traceability, essential information of the originator should be logged."
Leaked requirements document says governments may need "to identify the source of the negative articles" posted by political adversaries.
Korean presentation says standards bodies should be "required to develop standards or guidelines" to facilitate unmasking users.
Verisign executive's summary summarizes presentation saying protocols must have "a strong traceback capability, and establishing traceback considerations in developing any new standards."
When asked about the impact on Internet anonymity, Johnson replied: "I am not fully acquainted with this topic and therefore not qualified to provide an answer." He said that he expects that any final ITU standard would comport with the U.N.'s Universal Declaration of Human Rights.
It's unclear what happens next. For one thing, the traceback proposal isn't scheduled to be finished until 2009, and one industry source stressed that not all members of Q6/17 are in favor of it. The five "editors" are: NSA's Richard Brackney; Tian Huirong from China's telecommunications ministry; Korea's Youm Heung-Youl; Cisco's Gregg Schudel; and Craig Schultz, who works for a Japan-based network security provider. (In keeping with the NSA's penchant for secrecy, Brackney was the lone ITU participant in a 2006 working group who failed to provide biographical information.)
In response to a question about the eventual result, Schultz, one of the editors, replied: "The long answer is, as you can probably imagine, this subject can get a little 'tense.' The main issue is the protection of privacy as well as not having to rely on 'policy' as part of a process. A secondary issue is feasibility and cost versus benefit." He said a final recommendation is at least a year off.
Another participant is Tony Rutkowski, Verisign's vice president for regulatory affairs and longtime ITU attendee, who wrote a three-page summary for IP traceback and a related concept called "International Caller-ID Capability."
In a series of e-mail messages, Rutkowski defended the creation of the IP traceback "work item" at a meeting in April, and disputed the legitimacy of the document posted by Bellovin. "The political motivation text was not part of any known ITU-T proposal and certainly not the one which I helped facilitate," he wrote.
Rutkowski added in a separate message: "In public networks, the capability of knowing the source of traffic has been built into protocols and administration since 1850! It's widely viewed as essential for settlements, network management, and infrastructure protection purposes. The motivations are the same here. The OSI Internet protocols (IPv5) had the capabilities built-in. The ARPA Internet left them out because the infrastructure was a private DOD infrastructure."
Because the Internet Protocol was not designed to be traceable, it's possible to spoof addresses -- both for legitimate reasons, such as sharing a single address on a home network, and for malicious ones as well. In the early part of the decade, a flurry of academic research focused on ways to perform IP tracebacks, perhaps by embedding origin information in Internet communications, or Bellovin's suggestion of occasionally automatically forwarding those data in a separate message.
If network providers and the IETF adopted IP traceback on their own, perhaps on the grounds that security justifications outweighed the harm to privacy and anonymity, that would be one thing.
But in the United States, a formal legal requirement to adopt IP traceback would run up against the First Amendment. A series of court cases, including the 1995 decision in McIntyre v. Ohio Elections Commission, provides a powerful shield protecting the right to remain anonymous. In that case, the majority ruled: "Under our Constitution, anonymous pamphleteering is not a pernicious, fraudulent practice, but an honorable tradition of advocacy and of dissent. Anonymity is a shield from the tyranny of the majority."
More broadly, the ITU's own constitution talks about "ensuring the secrecy of international correspondence." And the Council of Europe's Declaration on Freedom of Communication on the Internet adopted in 2003 says nations "should respect the will of users of the Internet not to disclose their identity," while acknowledging law enforcement-related tracing is sometimes necessary.
"When NSA takes the lead on standard-setting, you have to ask yourself how much is about security and how much is about surveillance," said the Electronic Privacy Information Center's Rotenberg. "You would think (the ITU) would be a little more sensitive to spying on Internet users with the cooperation of the NSA and the Chinese government."
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