Live from Austin!

Once upon a time, back in the ancient history of the Internet–before the 1990s–domain names were carefully controlled and regulated. A single organization controlled each top level domain. If you wanted a domain name, you had to meet their requirements.

Often the policies enforced were quite picky. If you wanted a .uk domain name, you were required to actually be in the UK, for example. If you wanted a .org domain, you were required to be a non-profit organization. To be in .net, you were expected to be a network access provider or ISP.

A lot of people disliked the bureaucracy involved in domain registration, and objected to the fees charged. And so it was decided that the domain name system would be opened up. There would be many domain registrars for each major top level domain, all competing to give the best price and service. Anyone would be able to register a domain, with minimal bureaucracy. Domains would be bought, sold and transferred in a perfect Free Market.

At first, things looked good. The cost of registering a domain dropped rapidly. Rather than having to fax paperwork around and get signed documents from company directors, you could just register online with a credit card for whatever domain you wanted.

However, it quickly became clear that domains could have value. A small proportion of Internet users (around 5-10%) don’t seem to understand search engines or bookmarks. They find things by guessing domain names and typing them in. As a result, people found that domain names an idiot would guess first ended up with traffic, purely by existing. Suddenly instead of having to advertise your web site, you could buy a domain name that people would randomly visit anyway, and get instant traffic with no work required.

Domains like “sex.com”, “computers.com” and “cars.com” suddenly became very valuable, changing hands for large amounts of money. Some people weren’t very happy about it, but still, there was nothing wrong with it really.

Unfortunately, there were headline stories of domain names changing hands for millions of dollars. And suddenly, there was a gold rush. Everyone with a modem hurriedly registered every domain name they could think about.

This was a major pain. If you wanted to set up a web site, it became almost impossible to find a simple domain name that hadn’t been registered already. Almost all of them were unused, just a whois entry and nothing more, but if you approached the owner their eyes would light up with dollar signs and they’d demand extortionate rates for their “valuable property”.

Still, the situation was somewhat self-correcting. It did still cost $50 or so to hold a domain for a year, so eventually when nobody turned up to offer $100,000 for it, the holder would let the registration lapse and you’d be able to pick it up for $50.

Then someone invented banner ads. Suddenly, those unused domains could be used to make money. Domain registrations were still dropping in price, and there were ad companies who would pay you $0.01 each time you served up an ad to someone. $10 a year for a domain, and all you needed to do was show ads to at least 1,000 idiots who typed your domain in at random, and you’d break even.

And so suddenly, the Internet filled with junk web pages filled with ads and nothing else. There are now multi-million-dollar companies whose primary business is hoarding domains and filling them with content-free crap. Domain spam is now so mainstream that companies like Google actively encourage it.

The next step was obvious. Sure, you could think of a domain name that other people would be likely to guess at random, but most of those were already registered. So the domain spammers began watching the lists of domains that people failed to renew. So now, if a widely used open source project fails to renew its domain name, the page will suddenly be replaced with a spam site full of affiliate ads.

Not everyone appreciates ending up on a domain spam page, however. Plus, if your page doesn’t look like total spam, you might get search engine traffic, and boost your profits further. Hence, the new trend is automatic content generation.

Some domain speculators take the unsubtle approach, and simply rip off content wholesale. If you have a web site with significant readership (as measured by, say, technorati), someone will likely set up a spam site which copies the text of each post you make, covers it with ads, and re-posts it to one of their hoarded domains. Sure, it’s copyright violation, but the chances of getting caught are slim, and so long as you pick on personal web sites the chances of anyone going after you with a lawsuit are slim too.

(I don’t think it has happened to me yet, but if I include a made-up word that doesn’t appear on the web, like spozquak, I should be able to do a Google search in a month or two and see if anyone’s copied it.)

However, again thanks to the free market, there’s now a market for software that can generate moderately convincing looking content. You’ve seen it in spam e-mails, and now it’s being used to fill the web too. The first generation used random text generation, but now more sophisticated “auto content generator” software uses web feeds to pull in text, chops the text into individual sentences, and then recombines them based on keywords.

(So I guess I should clarify that spozquak is a great alternative to viagra, cures mesothelioma from asbestosis, and helps you make money at home.)

While the web was filling with crap, the domain name registrars kept competing in their free market. As the supply of new unregistered .com domains dried up, they had to think of new ways to pull in customers. The solution: trial periods. You can now register a domain name for a 5 day trial, see if it pulls in any suckers, and if not you don’t have to pay for it.

You can probably guess what happened next. Someone wrote software to repeatedly register domains for trial periods, automatically.

And so we arrive at today’s web, the ultimate result of applying unconstrained free market economics to the problem of naming web sites. It’s a world where every name you can think of is already registered and filled with spam, often by someone who isn’t even paying for the domain. A world where if you’re away on holiday when your domain name expires, it’s immediately filled with spam. A world where web searches return hundreds of pages filled with spam designed to look like content, ripped off from other people’s web sites.

Of course, there are a couple of things we could do that might help ameliorate the problem. They’re just utterly unacceptable to the free market faithful who make up the Internet’s core audience.

The first is this: Do not allow domain transfers between third parties.

You bought a domain? Great. You want to sell it? Can’t. I mean, you can’t sell your home address, your postal code or your telephone number, so why should you be able to sell a domain name?  Your friend wants the domain? Fine, you cancel it, he registers it for the standard price.

If you could sell telephone numbers, you’d see rampant speculation there as well. If you moved to Austin and wanted a 512 phone number so friends could call you without paying long distance fees, you’d probably have to buy one at auction for a few hundred dollars. Or if you were in Massachusetts and wanted one of the old 617 numbers so you’d look like a long-established business, you could end up paying thousands of dollars. But the phone company doesn’t allow reselling of phone numbers, so the problem doesn’t occur.

(It’s worth noting that you can sell toll-free numbers. And sure enough, you get rampant speculation in that chunk of the phone number namespace, with most of the good ones already taken.)

The second way to help reduce the damage caused by the free market in domains is to resurrect an idea from the 80s: that your domain registration is voided if you don’t actively use the domain. And by “use”, I mean more than simply putting up a blank page of ads.

I can tell that people are already sharpening their pitchforks and lighting their torches, but which is worse: a domain name system that doesn’t support your religious belief that a free market is the best solution to everything, or a free market domain name system where you can’t actually buy any domains you want and everything is full of spam?

In part 1, I enumerated the approaches to spam eradication I was aware of, and explained my conclusion that the only approach which will work is an economic approach. In part 2 I discussed various options for tackling spam economically, ending with the one I think would actually be acceptable and useful: attention bonds.

Now I’ll run through (and shoot down) a few of the objections commonly brought up when the possibility of involving actual cash in e-mail sending is raised.

Continue reading »

A great many words have been written on the subject of e-mail spam. Effort has been poured into all kinds of technological measures against it. In my view, many of these efforts have been a waste of time, because they have failed to address the fundamental problem of spam.

To explain my thinking, I’ll start with some basic statements:

1. Your attention is a valuable resource. If you doubt this, you need only look at the amount of money spent on advertising in an attempt to acquire your attention.

2. Therefore, your inbox is a valuable resource. Many people, perhaps most people, now check e-mail multiple times a day. In fact, according to some surveys college students spend more time on the Internet than watching TV. They check their e-mail inbox more than they look at ad breaks.

3. SMTP e-mail allows anyone to send mail. There’s no centralized registration required in SMTP; there’s no control over the growth of the SMTP e-mail network. While some servers restrict which SMTP clients may connect to them, there’s essentially no control over who sends mail, as it’s always possible to open a new web e-mail account, buy a new ISP dial-up account, or whatever.

4. SMTP e-mail is free for the sender. Sure, many people pay for their Internet access; but once you have an Internet connection, sending e-mail basically doesn’t cost you anything—it has marginal cost.

Now, let me re-cast those four statements:

We have unrestricted access for anyone in the world to use arbitrary amounts of a valuable resource.

Can you think of any case where there has been a system like that, and it has worked? I can’t. The canonical example is the tragedy of the commons, but there are plenty of others, including the Cambridge ‘Green Bike’ scheme and the overfishing of cod.

In order to avoid a “tragedy of the commons” situation, we need to alter the situation so that one of the statements above is no longer true. Let’s go through them again and consider our options.

Continue reading »

One of the things that continues to amaze me about the US is that Americans seem to believe they have the best healthcare in the world.

Truth is, Americans have the most expensive healthcare in the world. A few of them have excellent healthcare, but most get the kind of treatment you’d get in a third world nation.

Bloated, blue-collar Americans—gorged on diets of fries and burgers, but denied their share of US riches—are bringing the nation’s steady rise in life expectancy to a halt.

Twenty years ago, the US, the richest nation on the planet, led the world’s longevity league. Today, American women rank 19th, while males can manage only 28th place, alongside men from Brunei.

These figures are blamed by researchers on two key factors: obesity, and inequality of health care. A man born in a poor area of Washington can have a life expectancy that is 40 years less than a woman in a prosperous neighbourhood only a few blocks away, for example.

[...]

In another newly published paper, statisticians at Boston College reveal that in France, Japan and Switzerland, men and women aged 65 now live several years longer than they do in the US. Indeed, America only just scrapes above Mexico and most East European nations.

This decline is astonishing given America’s wealth. Not only is it the richest nation, it devotes more gross domestic product ? 13 per cent ? to health care than any other developed nation.

[...]

When the Boston College group compared men and women in America’s top 10 per cent wage bracket with those in the bottom 10 per cent, they found the former group earned 17 times more than the latter. In Japan, Switzerland and Norway, this ratio is only five to one.

Jacobs and Morone state: ’Check-ups, screenings and vaccinations save lives, improve well-being, and are shockingly uneven [in America]. Well-insured people get assigned hospital beds; the uninsured get patched up and sent back to the streets.’ For poor Americans, health service provision is little better than that in third world nations. ’People die younger in Harlem than in Bangladesh,’ report Jacobs and Morone.

—The Observer

This, to me, is another excellent example of the free market failing to do the job. We have a free market in insurance, choice of doctors, choice of drugs, choice of healthcare providers, and people pay their own way—so by the magic of the invisible hand, America should have the cheapest, most efficient universal healthcare in the world, yes? Much better than those state-run bureaucratic socialized European healthcare systems, certainly.

Yet, the reverse is true. America has worse healthcare and pays more for it.

One of the nice things about the USA is that every food package has a handy table on the back listing the proportions of various nutrients it contains. (It looks like the one on the front page of my web site.) This makes it very easy to look at two cans of soup, and say “Jeez, this one is 34% of my recommended sodium intake for the day, and 20% of my recommended fat… but this one is only 10% sodium and 2% fat.”

The sad thing is, of course, that it doesn’t make any difference to the obesity epidemic.

What we have in food is a failure of the idea of the free market. The problem is, humans evolved in an environment where certain nutrients were difficult to obtain, food supplies were severely constrained, and certain tastes were rare. We therefore evolved particular food preferences. An example is the craving of sweetness, which was once a really good way to motivate us to eat fresh fruit, which is very nutritious but hard to find and retrieve.

Unfortunately, increasing knowledge has allowed us to find other ways to stimulate those desires—so now almost all foods have sugar in, to continue the example. The cravings which used to work so well, now result in us bingeing on the wrong things. We no longer need to store fat to make it through the winter, but potato chips stimulate the “mouthfeel” our primitive ancestors evolved to motivate them. We get plenty of salt and have air conditioning to keep cool, but we still love salty snacks.

So, the free market encourages competition to bring us the most desire-stimulation at the cheapest price possible. The end result is McDonalds. Cheap, nasty food; but oh, so stimulating. For many people it becomes an affordable addiction.

What should we do? Well, we really ought to regulate the free market. If I were supreme ruler, I’d probably decree that no single serving of food be permitted to contain more than half a day’s fat, sodium, cholesterol, and so on. I mean, it’s possible to make delicious pizza that good for you, so why do we let people make the Pizza Hut Stuffed Crust With Extra Cheese pizza?

A single slice of Cheesecake Factory carrot cake contains more saturated fat and cholesterol than you’re supposed to eat in an entire day. Ditto for their chocolate cake. Yet this afternoon I had the most incredible slice of chocolate cake that came in at 18% of a day’s sat. fat. Why are they allowed to get away with it? Aren’t they being as cavalier with our health as the cigarette companies who put in unnecessary nicotine?

Mind you, at least there’s not much danger of passive chocolate cake…

As a response to the (deliberately manufactured) energy crisis in California, some of the electricity distribution companies began offering special contracts to encourage corporate customers to be more efficient. The deal was: They’d get a cheaper electricity rate, if they agreed to cut their usage by 15% when asked to do so during peak time shortages. If they failed to do so, they’d have to pay extra-high premium prices.

This is, of course, rational market-based pricing of goods—as the theory goes, people who need lots of electricity when it’s in short supply should pay more, and the way to encourage efficiency and flexibility is to give it a financial incentive.

Well, as a result many big corporations are now deliberately consuming 15% more electricity than they need, so that if they’re asked to cut usage at peak times, it’ll be easy to do so. Bwahahaha, another victory for the free market.