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June 13, 2004

WOS, last day: Pre-shared keys + XAUTH, again.

I'm at WOS 3 in Berlin, now sitting in the Copyrights in Europe workshop at the Technical University's main building. After the main conference network behaved interestingly yesterday, people are now struggling with the TU's WLAN security setup. IPSEC with pre-shared keys and XAUTH over unencrypted WLAN, of course.

User names and passwords are distributed on tiny paper strips. Keys and software are distributed on CD-ROMs that can't be mounted properly by many people here. The key information, though, has now made it to one of the blackboards, after it was unscrambled.

WOS: Ross Anderson on DRM and Competition.

Ross Anderson speaks on DRM and Competition.

Economics of software: Value of a software company is accumulated switching cost of users -- if switching 100 seats to OpenOffice costs less than 50,000 , you don't pay 500 per seat for Microsoft Office. If it costs more, Microsoft charges more. What happens with new document/right management technologies Microsoft is about to supply, enabled by trustworthy computing? Need permission from senders to convert files to other technology. Switching costs explode.

Use TC to lock in users by locking up their data. Software startups to have lower probability ofsuccess. Software industry much less dynamic, much more like "normal" industry. Small number of big players, big entry costs, less jobs.

Playstation model: Subsidize hardware from software sales. TC computers cheaper. Later, maybe PC free, "Office plan" for monthly rent. Effect on free software when commercial software comes with free hardware? Internal Market? Talking services now, not products!

TC has nasty effects on competition policy. Twist anti-circumvention into anti-competitive tools. Need digital rights directive -- not just about consumers, but about markets. Not just about music, about everything -- because everything contains software in the near future.

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