News & Commentary: 2006-03-31

Spam, Spam, Bureaucracy and Spam -- That's not got much Spam in it.

At last an IT related story, rather than all those nasty political bits and pieces.

Spam. No one likes it, no one knows how to fix it but the Australian Communications and Media Authority wants to pretend they have control of the situation. OK, well maybe this is a political story, because politics gets into everything, especially IT.

Let's start with the concept of government interference and regulation...

Beliefs About Market Regulation

The Liberal Party of Australia believe in minimising government intervention.

We believe in the inalienable rights and freedoms of all peoples; and we work towards a lean government that minimises interference in our daily lives; and maximises individual and private sector initiative.

From the Australian Liberal Party's Federal Platform, we see that the Liberals believe in so called "personal responsibility".

WE BELIEVE

... later in the same document ...

Intrusive government has been demonstrated by history to be inefficient, cruel and discouraging to human achievement. Liberalism is a philosophy of strategic but limited government. The role of government is to set the framework of laws and other rules within which individuals and families can freely make decisions about their own lives and persue their goals with confidence. By both the laws it enacts and the taxation it exacts, government should interfere as little with the freedom of individuals as is consistent with the maintenance of a fair and open society.

All, excellent ideals, all of which I happen to agree with by the way. Why haven't I joined the Liberal Party? Because they don't practice what they preach and they cheat their own ideals. John Howard has never been a supported of individual liberty -- in fact, recent years have seen Liberty take a bashing from all sides of politics, all over the Western World and John Howard has been one of the foremost abusers.

The double-standard of singing about minimal government regulation while at the same time increasing bureaucracy, over regulating industries and destroying personal liberty has caught on with the Australian Labor Party as well. The federal ALP platform paper states:

Small Business: Creating Jobs and Wealth
111.

110. Labor recognises that small business plays a central role in the Australian economy. Through individual effort, small business owners provide employment for themselves and many thousands of employees. The dynamism of small business cannot be underestimated and should be encouraged. Its potential to further invigorate the Australian economy must be explored through active assistance from government.

Government Regulation
112.

To maximise the economic dynamism that flows from the personal enterprise of small business operators, the sector must be free from unnecessary government regulation and interference, provided that firms meet their social and industrial relations obligations by implementing fair and cooperative relationships with workers and their representatives.

In the case of the ALP, they aren't being dishonest to their fundamental ideals, they are merely being dishonest about their fundamental ideals. In fact, their policy paper is so long and comprehensive that nowhere on their website do the ALP actually document their fundamental ideals in a consise form. It is impossible to visualise what the ALP actually stand for because no human can hold 17 chapters (each of which contains about 100 points) of policy in their head -- after all the ALP can't even get basic stuff like paragraph numbering working on this tome of policy.

I'm all for the ALP providing detailed policy but they should also provide something a bit more pithy. Here's my humble suggestion:

We, the ALP, are an old-guard Socialist Workers party who have rather lost relevance in the modern world. Our champion Bob Hawke successfully restructured the labour unions of this nation to the point where they represented neither the interests of their constituent members, nor that of the national economy. John Howard exploited this and both union membership and Labour voters evaporated.

We are currently closed for philosophical and moral renovations during which time we will be searching for a purpose and considering all policy contributions based on their impact in marginal electorates.

Besides, everybody knows that politics has nothing to do with the ability to govern a nation. In reality it boils down to one thing only and that is our cronies versus their cronies. Our cronies might beat a few people up on a building site or behind the pub but John Howard's cronies will grab you in the middle of the night, fly you halfway round the world to a disused Russian prison and have you tortured for a year or two. In comparison to that, we are really nice guys.

And besides, when we blame our lies on mere incompetence, it sounds plausible.

If you have a policy suggestion, write it on the back of this disused union membership application form and add it to the stack.

Getting back to the matter at hand...

Helen Coonan (Federal Minister for Comms, IT and Art) has a few things to say about government regulation in the communications industry. This speech is about converting analog services over to digital and lifting restrictions on media ownership:

This changing landscape means it is timely for the Government to review its approach to media regulation and provides an opportunity to develop a strategic framework for media reform in Australia that truly brings us in to the digital era.

The challenges and opportunities of digital for the broadcasting sector, the plethora of new services emerging over new platforms,

the pervasive nature of the internet and the need to free the media industry from the shackles of an old-media style regulatory framework are all interrelated.

Analogue switch-off provides a natural start date for a range of reforms. It is only when we can reach analogue switch-off that the necessary spectrum will become available in congested markets for the full range of new digital services.

However there is scope for new services for Australian consumers now. We can encourage innovation and investment now, as the forerunner to the complete digital experience at switch-over.

We also have the opportunity to provide new services to balance any consolidations following the implementation of the Government's long-standing policy to reform Australia 's media ownership laws.

So when it comes to media ownership, regulation is supposedly bad. The "Market" will provide for us with an "efficient" system. Actually, the government are keeping an awful lot of restriction in place with regards to the number of licensed broadcasters, the broadcast methods that they are allowed to use, etc. They are removing some regulations but they don't explain what criteria makes makes some regulations necessary while others (such as media ownership) can be removed.

Now consider market regulation in the case of Telstra. The original idea of selling off Telstra was that a private company would always be more efficient than a government monopoly. Well, Telstra is half sold now and making record profits but they are not competing very well in the marketplace. More and more people are moving away from Telstra in the area of mobile phones, Internet and regular phone calls.

Solomon Trujillo was brought in to "save the day" for Telstra but then he got Helen Coonan's back up by complaining about too much regulation. Senator Coonan claims a "light touch" while the ACCC claim that Telstra is using its control of wholesale line rentals as leverage to increase costs for its competitiors.

"Telstra are yet to demonstrate what the current regulatory regime is restraining them from doing," Senator Coonan said.

"We are confident that none of the regulatory changes proposed will prevent Telstra from innovating and investing where it is in their commercial interest to do so."

The framework, expected to be introduced this year, includes price controls, consumer safeguards, rules to ensure new market entrants have access to essential services provided by the incumbent telco and regulations to prevent anti-competitive conduct.

It also compels Telstra to undergo operational separation to provide transparency between its wholesale and retail businesses.

I strongly suspect that if Telstra ever do separate their wholesale and retail businesses (with full accountability) then all it will demonstrate is how poorly they do compete on the retail side of things. To do it properly in a "Free Market" type way we would need to see two different types of Telstra shares (Telstra Wholesale, and Telstra Retail) but let's face it -- the chance of that happening is remote.

The Spam Problem and ISP Regulations

So in this climate of a government whose stated aim is to keep regulation is a minimum and a communications minister who believes she is using a "light touch"... how are we going about tackling the Spam problem?

With more regulations of course!

This article covers the basics of the issue.

But under the new code, ISPs will have to offer spam filtering options to subscribers and provide a system of handling complaints.

... and ...

They will also have to impose reasonable limits on the rate at which subscribers can send email.

So this article gives a bit of explanation as to why this is necessary.

"The phenomenon of spam...continues to materially impact on e-mail as a communications medium," states the conduct code document, released on Wednesday.

Yes it does, but the free market is supposed to be able to handle stuff like this. If spam filters are valuable then someone will set up shop selling spam filters and the market will determine a price based on their benefit and effectiveness.

"Since senders of spam require the services of service providers in order to send their spam, enlisting the support of those service providers has the potential of being an efficient and also a more proactive way of addressing the spam problem," according to the code document.

Spammers also provide the service of electricity providers in order to send their spam. They no doubt require air, water, food and all sorts of other things. I completely fail to see why this is an argument for regulation. Why not insist that every e-mail client be installed with a spam filter and make it the responsibility of the software manufacturer?

There's an excellent reason why they won't try to regulate the software manufacturers -- because they can't. The government can pass any laws they like and people will still run the software that they choose to run, and that's the way things should be: natural freedom for the individual, just like the Liberal Party claim to support.

There's a good reason why they won't try to eliminate Spam by attempting to regulate electricity distributers either -- the electricity distributers would claim that they don't know what the electricity is being used for.

As such, ISPs serving the Australian public must proactively scan traffic for open relays and botnets, networks of compromised PCs used for sending spam. In addition, spam filters must be offered and clearly advertised by each Australian ISP.

Somehow, the ISPs are the ones who are left holding the banana. They are somehow supposed to figure out what their clients are using the Internet for and then act as a policeman and decide who is allowed to do what. They already have service guarantee regulations to uphold, content filtering regulations, copyright takedown orders, government record keeping requirements, TIO compulsory membership and are charged an "investigation fee" for each and every complaint that anyone sends to the TIO (whether justified or not).

The communications industry is rapidly becoming one of the most regulated industries in Australia and the Internet Service Provider part of that probably has the majority of regulations applied to it. Now we have extra regulations regarding Spam.

Don't blame the culprit... blame the ISP instead.

This article outlines who got to design the regulation:

Australia – The Australian Communications and Media Authority has registered a code of practice for internet service providers and email service providers on countering spam. The code was developed in support of the Spam Act 2003 by the Internet Industry Association in conjunction with the internet associations from Western Australia and South Australia.

Taking a look at the Internet Industry Association membership, it tends to be large ISPs who welcome the regulation. Big business likes big govenment because they can cope with the regulation burdon more easily and it gives them an opportunity to drive their smaller competitors out of business. Big government is always willing to listen to big business and base its decisions around whatever big business finds desirable.

The standard itself is available for download (in PDF format).

Anticipated Costs to Industry

It is expected that service providers will incur initial and ongoing costs in relation to this code.

Which is hardly surprising. There used to be lots of small business ISPs but now the industry is being condensed steadily. This is a continuation of the basic process of big business getting help from the government (a government who pretend to support individual enterprise) and drive their smaller competitors out of business.

Where technically and commercially viable, operators of equipment (such as LNS or RAS hosts) which terminates user sessions with dynamically allocated addresses MUST cause such sessions' outgoing connections to be dropped where they are attempting to contact a remote host on TCP port 25.

And now they are making it impossible for home Internet users to run their own mail server too. Not because the mail server is proven to be doing the wrong thing but just as a precaution in case the mail server ever does the wrong thing -- presumption of guilt by any other name.

Individual Freedom and Personal Responsibility

When it comes to networks of "zombie" servers that have been invaded by trojan or virus attack. Who is really responsible for the spam that has been generated? Of course we blame the original culprit (the spammer). But, there's more to it than that.

If you leave your car unlocked with keys in the car and someone steals the car then you must take at least some responsibility. Similarly, the person who lets their machine get taken over and does nothing about it has to be at least partly responsible for the results. At the moment, the computer owner (i.e. the ISP's customer) is not in any way held responsible, nor is anyone proposing that the end user should pay any part of the costs of their mistake. Instead, the costs of all Internet service will increase and will be collectively carried by all computer owners (even those who are doing the right thing). This situation means there is no invencive whatsoever for a computer owner to care about what malware might accumulate in their system.

This is not just a spam problem, it is a security problem for everyone as distributed networks of robots are used to launch all sorts of other security attacks.

Then again, if Spam didn't get results, no one would use it so you can blame the people who are dumb enough to follow the links they find in spam mails too.

The chain of responsibility doesn't stop there... Microsoft have very belatedly taken an interest in the lack of Internet security in their products. They have yet to show that they can deliver the goods with Internet Explorer exhibiting still unpatched security flaws. If these crap products are going to be peddled on the streets and ignorant people are going to buy them and use them... why is it now the ISP who gets dumped with the chore of cleaning up and taking responsibility for a problem that they didn't cause?

Sure the Liberal Party give lip service to individual responsibility, but back here in the real world, they blame anyone else except the people who need to show responsibility.

Don't blame the culprits, blame the ISP instead...

Really Solving The Problem

What shits me most about this is that there are already some reasonably effective methods of solving the problem. There is no need to block port 25 on every home Internet account (although some providers, notably Telstra, already do this) because in order to be a proper email server, the IP number must be listed with a DNS record. Using the DNS record is a much better way of isolating the spammer because if there is no record available then you know the IP address is dodgy and if there is a record available then you have some traceability as to which mailserver you are talking to. In 90% of cases, someone who is driving a network of "spam zombie" machines will not have a correct DNS entry and this is detectable.

There are already various "blackhole" lists that track down open relays. Anyone can subscribe to these blackhole lists if they decide to do so, some are free, some cost money. If you think the cost brings additional benefit then you are welcome to pay -- that's a free market. All of this is happening quite nicely without requiring any government regulation. In fact, some of the black lists were threatened with legal action for distributing the IP addresses of known open relays and spammers (and some of them shut down). The Australian government could have done a lot more for freedom, individual liberty and the industry as a whole by merely passing a law that explicitly declared it was legal to maintain and distribute such lists... no burdon on the ISP and the industry sorts itself out.

In fact, the industry has already got onto a wide list of methods for sorting out Spam. Most of them work to some extent, none of them is perfect so people shop around and try a few ideas until they find something that suits them. By blocking port 25 and preventing Internet customers from running their own mailserver, people have fewer options and cannot experiment with alternative technical solutions to the problem. This actually makes it less likely that the problem will be solved.

It's really damned annoying that I fully support the stated principles of the Australian Liberal Party -- individual freedom and minimal government regulation. But I can't support John Howard or his government because they don't believe in their own principles. It's even more annoying when Internet Spam is one area where the market is finding solutions to the problem all on its own (and yes, I am in the business of selling spam-filtering firewalls, providing businesses with mailservers and other such tools) so the government has to start meddling for no good reason.

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