30 posts categorized "April 2011"

Key Lesson Learned in 20 Years of Representing Tech Startups

I'm speaking later today at the Ismaili Business Owners and Professionals (IBOP) Conference, being held at the Seattle Space Needle.

I'll be on a technology startup panel with startup founders Karim Meghji and Al Lalji and angel investor Charles Finkelstein. I'm looking forward to it!

Here are the slides I plan to present:


North Carolina's Internet

According to a piece in FierceTelecom, AT&T, Time Warner and CenturyLink all support a bill in North Carolina's legislature that would impede the ability of municipalities in that state to set up broadband networks.

Here's a link to the bill, which appears to have passed the North Carolina House of Representatives and is now in a committee of the North Carolina Senate.

The bill appears to be driven by fright and dismay at the prospect that a public, municipal communications service might be more efficient and cheaper than what a private cable company might provide.

Here are some of the requirements that the bill proposes be applied to municipalities in North Carolina that might want to set up a "communications service" (more on what that term means further below):

  • "Limit the provision of communications service to within the corporate limits of the city providing the communications service."
  • '[P]rovide nondiscriminatory  access to private communications service providers on a first-come, first-served basis to rights-of-way, poles, or conduits owned, leased, or operated by the  city unless the facilities have insufficient capacity for the access and additional capacity cannot reasonably be added to the facilities."
  • "[N]ot air advertisements or other promotions for the  city-owned communications service on a public, educational, or governmental access channel if the city requires another communications service provider to carry the channel."
  • "[N]ot subsidize the provision of communications service with funds from any other noncommunications service, operation, or other revenue source, including any funds or revenue generated from electric, gas, water, sewer, or garbage services."
  • "[N]ot price any communications service below the cost of providing the service . . . ."
  • "[A]nnually remit to the general fund of the city an amount equivalent to all taxes or fees a private communications service provider would be required to pay the city . . . ."

Now, the definition of "communications service" is pretty interesting. It means "[t]he provision of cable, video programming, telecommunications, broadband, or high-speed Internet access service to the public, or any sector of the public, for a fee, regardless of the technology used to deliver the service." So far, so straightforward. However, "[n]either the sharing of data or voice between governmental entities for internal governmental purposes nor the provision of free services to the public or a subset thereof shall be considered the provision of communications service." (Emphasis added.)

I'm too far removed from North Carolina to understand its politics, but the way "communications service" is defined in this bill suggests that a North Carolina municipality might yet be able to provide broadband to its citizens without charge - though presumably those citizens would need to tax themselves to pay for it.

That said, the North Carolina bill has the air of religious dogma about it. Regressive policy, selling short the local citizenry in order to favor out of state corporate interests, all slipped under cover of free market pablum.

Rural_electrificationHere's a very interesting opinion piece the Google found for me about this North Carolina bill, written by Mark Turner. Mr. Turner likens what municipalities in North Carolina are doing, by providing broadband to areas underserved by private carriers, to rural electrification brought by FDR's New Deal. "The Internet is no less transformational than electricity," he reasons.

Photo: "Rural Electrification Administration co-op office, Lafayette, Louisiana, 1939," by Peter Sakaer. Source: National Archives.


Big news yesterday was Tumblr's dumping of a user in favor a marketing company.

The domain zephoria.tumblr.com had belonged to Danah Boyd. On another blog, Ms. Boyd identifies herself as "a researcher at Microsoft Research New England and a Fellow at the Harvard Berkman Center for Internet and Society." She is an engaging writer and not someone you would think a hip microblogging site would want to alienate.

Tweet thread boyd Ms. Boyd's is a chilling story and unfortunately part of a general theme we'll see play out many times over the next decade.

I don't have an opinion on the trademark issues in the matter, if there are any, but Tumblr's terms of service couldn't be clearer about the unilateral right it reserves to play favorites with its domain space:

"Tumblr reserves the right to remove any Subscriber Content from the Site, suspend or terminate Subscriber’s right to use the Services at any time, or pursue any other remedy or relief available to Tumblr and/or the Site under equity or law, for any reason . . . or for no reason at all."

Bigger players take on more express responsibility to have some kind of process.

Here's what Facebook says about terminating users:

"If you violate the letter or spirit of this Statement, or otherwise create risk or possible legal exposure for us, we can stop providing all or part of Facebook to you."

Similarly, Facebook seems more upfront about the possibility that user's preferred domains or usernames may be sought by parties claiming trademark rights:

"If you select a username for your account we reserve the right to remove or reclaim it if we believe appropriate (such as when a trademark owner complains about a username that does not closely relate to a user's actual name)."

All in all, there's an implicit suggestion that Facebook will be "reasonable" or observe some process, or cite some reason, before kicking you off of Facebook or reassigning your identity to a corporate person late to the party.

Of course, Tumblr's position vis a vis Ms. Boyd may be that her use of the "zephoria" domain was violating trademark rights of a third party, so that what Tumblr did was for an actual reason. That doesn't seem all that clear on the tweet-thread, pictured in this post, at least so far.

What does Twitter say on this issue?

"We reserve the right to reclaim user names on behalf of businesses or individuals that hold legal claim or trademark on those user names."

Twitter also reserves a unilateral right to cut users off ("We reserve the right at all times (but will not have an obligation) to remove or refuse to distribute any Content on the Services and to terminate users or reclaim usernames"), but the overall context of Twitter's terms of service, plus a cross-reference to user rules, implies that such broad discretion will be used reasonably. "Reasonably" is a vague adverb but it is on the reasoned rather than the arbitrary half of the unilateral moon.

Image of the tweet-thread made possible by Aaron's Twitter Viewer.

Cloudy with a Chance of Web Services

All this news about Amazon's Elastic Compute Cloud (EC2) going down made me want to try being a customer of it myself.

So I signed up last night, following the step by step instructions of Dave Winer's "EC2 for Poets."

4309801312_1f26f9be21_oI won't pretend I understood the significance of all the fields I filled in or the radio buttons I clicked along the way - I just followed Dave's instructions - but I did get a virtual machine set up and running in Amazon's cloud. I'm writing this post from my Amazon server!

To up the ante, I'm going to need my son Dan's help. He's a busy guy, so the next step for me may be to have to figure out what to offer in barter . . .

But this was a start. I like how Dave describes the significance of taking the step:

"The important thing is that now EC2 is not a mystery. Its purpose is to give you access to ordinary computers in a place where they're easy to get at through the Internet. The easier it gets, for more people, the more interesting things we'll be able to do, together."

Image: "Clouds - White Pass, Kings River Canyon (Proposed as a national park)," California, 1936.

How Personal Is Your Smartphone?

Skip over the obvious stuff about the use of location data to interact with location based services, and check out the distinction that Apple makes between "personal information" and "non-personal information."

274391848_de8dcce255_b"Personal information," the iTunes Store Terms and Conditions reads, "is data that can be used to uniquely identify or contact a single person."

Non-personal information is "data in a form that does not permit direct association with any specific individual." This is an important category because Apple says that it "may collect, use, transfer, and disclose non-personal information for any purpose."

Non-personal information, according to Apple, includes "information such as occupation, language, zip code, area code, unique device identifier, location, and the time zone where an Apple product is used." (Emphasis added.)

Sensibly, Apple's Terms allow that non-personal information can be linked with other information in ways that make it possible to pinpoint someone: "If we do combine non-personal information with personal information the combined information will be treated as personal information for as long as it remains combined."

What interests me about Apple's Terms (okay, surprises me a bit; though it doesn't horrify or surprise me that Apple collects location information) is the placement of "unique device identifier" in the category of non-personal information.

And what about linking bits of non-personal information with other bits of non-personal information to arrive at information that can be used "to uniquely identify or contact a single person?"

Image: Cell phone happy face, by Mike Baehr.

Valuation and Supervoting

Been thinking further about Brian Rogers' comment on the post about supervoting shares:

"Why aren't these companies taking a valuation hit? Can a share of a company with permanently entrenched management really be worth as much as a share in the same company where management can be removed if their performance takes a nose-dive? Maybe this says something about the lack of shareholder power generally."

In the case of Zillow, the supervoting shares are (according to its filed S-1) to be held by Rich Barton and Lloyd Frink. In the case of LinkedIn, the supervoting shares are (according to its filed S-1) to be held by Reid Hoffman, as well as by VC funds managed by Sequoia, Benchmark and Bessemer.

352px-Chess_piece_-_Black_queenWhen the effect of the supervoting shares is to extend the influence and control of the visionary founders who lead the company, maybe the fact of them preserves, or actually enhances, the perceived future value of the company. Because it's plausible, or probable, or conventional wisdom, that the very greatest of CEOs are founders who grow into the role. (You can turn the owner of the product into a CEO but you can't turn a professional CEO into a product person, etc.)

Zillow might be following this rationale - or a permutation of it.

Zillow's CEO is Spencer Rascoff, and, if the filed S-1 is to be relied upon, Rascoff doesn't have supervoting shares. So the theory needs a permutation: the market must want a better-known power behind the throne. Or, to use a sports management metaphor, the market must want a general manager in the front office that can be trusted to put in the right head coach. Barton has a good record as a "GM" (I don't know as much about Frink).

The visionary leader rationale doesn't work at all to explain what LinkedIn is proposing.

Sure, Reid Hoffman is a co-founder and a former CEO, but he is not the current CEO and was made chair of the board only four months ago. Even if he is LinkedIn's answer to Barton in the role of "GM," that doesn't really wash as Hoffman's supervotes are to be overwhelmed by the supervotes of the VC managed funds, post-IPO.

Image: Michael Maggs. Licensed under the Creative Commons Attribution-Share Alike 2.5 Generic license.

Unpacking Apple's Trademark and Trade Dress Claims Against Samsung

I was a guest Friday on the netcast, This Week in Law with Denise Howell. The episode, "TWiL 108: The Other Pump Drops," is available this morning for replay.

Podcast_18_3I want to point out trademark lawyer Marty Schwimmer's analysis of the strengths and weaknesses of Apple's recent trademark and trade dress infringement claims against Samsung, beginning at around minute 9 of the show.

There are some really helpful, side by side graphics comparing the allegedly proprietary features of Apple touchscreen devices with Samsung's imitations.

And yes I use the word "imitations" deliberately, though I don't mean to prejudge Samsung.

There's a pejorative connotation to the word, but the point of a legal discussion is to foreground how some imitations aren't illegal. Marty's explication does a great job of this, serving both as a tutoral on trade dress basics and a provocative insight on how Apple's desire to reshape the consumer electronics industry may be somewhat at odds with its jealous instinct to claim proprietary rights to every innovation.

Picture 1For example, are the black borders at the top and bottom of the screen distinctive (and possibly proprietary), or part of necessary functionality of any device that is going to meet the new industry standard?

Around minute 20 of the show, I ask Marty a question about whether a metaphor and certain press coverage quoted in Apple's complaint might not really serve Apple's argument.

Apple's suit against Samsung includes patent claims, which we did not discuss. Denise plans to cover the patent infringement claims on next week's show, when patent lawyers will be among her guests.

This was my first time on This Week in Law and it was a thrill. Denise is terrific. It was also fun to "meet" Evan Brown, a TWiL regular I've known previously only through Twitter and his Internet Cases blog. The show is netcast live on Fridays beginning at 11am Pacific on the TWiT network. Then podcast versions are made available in video and audio.


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