Paw Prints: Writings of the maddog

Dear Ambassador Kirk,

Recently it was reported in the Guardian, an on-line newspaper, that the International Intellectual Property Alliance (IIPA) is requesting that the United States Trade Representative put Indonesia, Brazil and India on the "Special 301 Watchlist" specifically because those countries advocate the use of Free and Open Source Software (FOSS) in their economies.

I have been in the software industry for over forty years, as a programmer, businessman, educator, author and entrepreneur. I have worked in some of the largest companies, both as a supplier of software and a customer of software.

I have traveled to two of these three countries, and while I have not been to Indonesia, I helped formulate the FOSS policies of Malaysia, have worked with the government of Brazil, and presented many times in India. I know their cultures and their way of doing business.

A section of a report that I saw said:

"The Indonesian government's policy... simply weakens the software industry and undermines its long-term competitiveness by creating an artificial preference for companies offering open source software and related services, even as it denies many legitimate companies access to the government market.

Rather than fostering a system that will allow users to benefit from the best solution available in the market, irrespective of the development model, it encourages a mindset that does not give due consideration to the value to intellectual creations.

As such, it fails to build respect for intellectual property rights and also limits the ability of government or public-sector customers (e.g., State-owned enterprise) to choose the best solutions. ”

If these statements reflect your concerns as the United States Trade Representative, I would like to comment on them.

First of all let me state that Free and Open Source Software (FOSS) is a perfectly legitimate way of developing, distributing, supporting and selling software. In this case the initial cost of the software may be very low, or even zero to the end user, but revenues are made in other ways. Many people in the FOSS world do indeed have "a due consideration to the value of intellectual creations" and "a respect for intellectual property rights". The companies that I deal with, such as IBM, Hewlett Packard, Red Hat Software, Canonical, and other FOSS companies respect these values and rights very highly.

The first paragraph of the above section somehow suggests that the purveyors of FOSS are not “legitimate companies”. The development of software has changed very greatly with the advent of the Internet and powerful, low-cost computers. No longer do you need a thirty or forty thousand dollar workstation to develop a unique piece of software, and no longer do you have to sequester yourself on a campus in Redmond, Washington or Silicon Valley. Sophisticated software today can be generated by highly distributed teams of individuals who make their living in other ways than charging for a product on a per-unit basis. Often this software, or services around this software, are offered legitimately by companies for profit.

This method of development being different, however, does not make it illegal, immoral or otherwise wrong. Both private and public sector companies and agencies inside of the United States have advocated the use of FOSS software. To admonish foreign powers for the same advocacy is hypocritical, to say the least, and for the IIPA to say that the use of FOSS "weakens the software industry" belies the fact that FOSS software is PART of the "software industry". I am sure that what the IIPA meant to say was that FOSS “weakens” one method of selling software, but that method is not the "software industry", and "weakening" that method is not a reason for the United States Trade Representative to request any type of sanction.

Most FOSS companies use a "service model", where service is what is sold to the customer, and the software is supplied "free of charge". The fact that some companies are not in the position to offer this particular business model should not be a reason to punish a foreign power.

Secondly, I will point out that from the memos that I have seen, these countries are not singling out software from the United States in their recommendation for using FOSS. They are stating that FOSS software in general is more desirable for use, than even closed source, proprietary software developed in their own countries. From my own experience, FOSS software is more flexible, and more easily supported within the economic realities of these countries. Therefore the value of FOSS is typically worth more than the value of the closed source solution to these people. FOSS in general is typically the “best solution” for them, and they have chosen that solution in general.

FOSS is easier for foreign countries to adapt to their needs, whether those needs be language, cultural or security oriented. With enough trained support people inside of their own country, FOSS protects a country against threat of economic embargo, a worry which, in my opinion, the "Watchlist" does nothing to help defuse.

While these benefits of FOSS and detriments of closed-source software are unfortunate for some of the software companies in the United States, it certainly is not a reason to sanction these countries for their preference for FOSS. What if the country's statements had been to "only buy software which is easy to change to our native language"? Would you still sanction them?

There is a major move in the United States towards "Software As A Service" (SaaS) and "Cloud Computing". These are practices that often make a certain amount of software functionality, CPU and disk available "for free", with the costs borne by advertising. Would the United States Trade Representative state that this method of delivering software functionality is also illegitimate simply because some U.S. company's business model is not aligned to this new type of marketing and deployment of software and services?

Third, there are FOSS-based companies such as project.net (www.project.net) that have taken closed-source, proprietary products and made them a FOSS product/service, and made even more money than when the product was "closed". Other companies have found that products that were on the verge of losing money due to high costs of ongoing maintenance by their engineering staff have found new revenues and profits by making large sections of their product "FOSS".

Fourth, there are very successful companies such as Red Hat Software, Novell's SuSE division, IBM, Hewlett Packard and many other companies that make profits from FOSS and its deployment. These companies use FOSS not only due to the lack of royalty that they owe on total solutions offered to their customers, but because as solution providers, the ability to act quickly integrating FOSS packages, changing the source code and not having to negotiate crossover fees delivers real value to the customer and to the company doing the integration.

If these are indeed legitimate software marketing and sales strategies, and the customers have a right to choose software based on legitimate software marketing and sales strategies, then by sanctioning these countries the United States Trade Representative is encouraging one method of legitimate development and sale of software over another for these countries and more importantly, viewed by the world as using coercion in this "encouragement".

Disrespect for copyright, on the other hand, is a legitimate concern. With closed source, proprietary software the piracy rate is very high, as you know. As a technology leader the United States shows nations that having computers and access to the Internet can lead to prosperity. Given the average wage in many countries around the world and the average cost of proprietary software on a personal computer, a person in those countries might have to work for an entire year to afford the software they need.

These people often feel they have to illegally copy software in order to survive economically. FOSS gives them a legitimate avenue to use computers and access the Internet, and has been shown to decrease the incidence of copyright infringement in these countries. Even the Business Software Alliance admits this fact in their latest studies.

In addition, most of these countries would also find it difficult to pay U.S. programmer wages to change and integrate software to meet their needs, but are much more able to find local programmers who can change FOSS to meet their needs, since they have both the access to FOSS source code and the right to change the FOSS source code.

As I have traveled around the world I have seen large U.S. companies use tactics such as offering almost non-functional pieces of software as "place holders" for proprietary products while insisting that legitimate FOSS products not be offered, knowing that the users of this "place holder" software will immediately place a full, unlicensed copy of their software on the user's system. This, of course, creates a copyright breach....one that I was actually told by one of the product managers of a large software company that they encourage copyright infringement "rather than have their customers use FOSS." It is disappointing to me that this U.S. company on one hand encourages copyright infringement, and on the other hand belongs to an organization that prosecutes copyright infringement.

I am also disappointed that major closed source software companies could do more to reduce copyright infringement, but they refuse to build into their software and make mandatory the anti-piracy technologies that they have already developed, preferring to have these customers illegally copy their software, then later punish them through audits and fines. I would encourage the US Trade Representative to ask these companies why they are not doing their best to fight copyright infringement.

I hope that this letter finds its way to you, and that you read it carefully. I am proud of my country, and as I travel around the world I want people to know that the United States treats people fairly, honorably and with respect for their needs without dictating to them which legal method of software acquisition they choose.

Warmest regards,

Jon A. Hall

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