Market failure in a "capitalist democratic society"
TG Daily: You say that we're living in a "capitalist democratic society." Now, I would think that if we were more capitalist, we wouldn't have any choice; suddenly, we'd find these AACS-type measures inside our computers and our set-top boxes. If we were more democratic than capitalist, we would have the right to be able to unplug those things, or not to let those things enter our homes and offices to start with.
Schneier: You have the right. The question is, do you have the ability? In a capitalist democratic society, you only have the options that are presented to you. The market failure is the monopoly/oligopoly market failure, where the option to turn it off, or the option not to have it, isn't presented to you. Cell phones is a good example...I don't have the option to go with - even if it's more expensive - a better quality service provider. There isn't one. They all suck. They all suck, because they realize that competing on service doesn't make sense, and they're better off hiring Catherine Zeta-Jones to be in ads. That's the unfortunate truth.
You have a monopoly in operating systems, basically. If Microsoft and, I guess, Macintosh go along with saying, "Only these sorts of things will happen," by cutting out Linux - because who cares? - that's your only option. But the fear is, I have no choice but to buy a DRM-enabled computer, because there isn't anything else available, because it's all the market will give me. That's the fear.
This is a market failure. I'm always amazed at people who are big fans of the market, who don't understand what it looks like when a market fails, and what systems don't work in a market. This is an example of it. If there were hundreds of operating systems, and you could pick the best one, sure, there'd be one that didn't do DRM, and we'd all use it, and DRM would die. But all you need is Sony and the big media companies [working with] the two big operating system companies, and you're done. The choice is no longer there.
TG Daily: Okay, let's assume a worst-case scenario. Besides writing our congressman, how is the consumer going to react to this? What's the alternatives available?
Schneier: Well, Congress reacts to money. So I don't believe that petitioning government for redress really is going to work here. The alternative is what I do: to fight at every turn, try to keep it out.
TG Daily: How does one accomplish this? At least the way it's phrased in the press sometimes, it's phrased as a David-and-Goliath type battle. If this is a capitalist democratic society, then it's supposed to be a Goliath-and-Goliath [battle].
Schneier: Have you been following politics recently? Unfortunately, it's less about reasoned people making decisions on the issues, and more about, who has the money. Money fuels politics too much to have it be like it should be. I think politics is failing us. It's producing results that aren't in line with what people want, because the power structure [goes with] the money.
People don't want DRM. If somebody were to say, "Here, we're going to give you something for your computer that will make you use it less," no one would say yes.
TG Daily: Is there any possibility, then, that somebody could derive an alternative to this? In other words, the basic notion of having cryptography solutions in hardware is not, in and of itself, a bad thing....What if we could sell the original purpose again?
Schneier: That'd be fine. I think it's a really good security tool against bad things on your computer. Done right, it's a smart idea.
TG Daily: So could a small industry consortium mount a concerted effort to help swing TCM over to its original objective?
Schneier: Don't know. It isn't a technology problem. It's a political problem. I'm not sure what the solutions are...Computer security is bad, and no one wants to fix it. And fixing it is hard.
TG Daily: Suppose somebody were smart enough to bring this up. "You realize, guys, we're creating a system that, frankly, the consumers don't want, where a constant battlefield takes place inside our set-top boxes and PCs." Would you expect the representatives from the technology companies, Intel and Microsoft, the studios, the manufacturers, to stand up and say, "Yea, the consumers don't want it, but you know, [to heck with] 'em?"
Schneier: No, they're not going to say that. They're going to say, "This helps security." This is the same as my fear on all this Trusted Computing technology, that it's being sold stealthily as it will help you consumers, while in reality, it's not. That's why I think we have some subterfuge going on.
TG Daily: Will consumers not want this thing enough, in their cell phones or their set-top boxes or PCs, to not purchase it?
Schneier: Nope. TiVo just came out and said, in violation of every thing that's normal, that if you tape a show on your TiVo, and at some later time, the [content provider] company says, "We don't want that out there any more," the company will reach into your TiVo and delete it. This just, like, blows "fair use" completely to hell. Where's the outcry?
TG Daily: It's "fair use," but somebody else is doing the using.
Schneier: Right.
