Locking the Web Open: A Call for a Distributed Web

> it's difficult to assess the quality of information, particularly when disaggregated.

Do you mean that it's difficult in general, or in terms of "should I buy this"? I could see micropayments work similar to Kindle - a 24 hour no-questions, semi-automatic refund policy. Don't think that article was worth 50 cent? Just "unpay" for it.

Market mechanisms work best where goods are uniform (either individually or on aggregate average), their qualities are readily determined (or again tend to average out well), where the fixed costs of production are low and marginal costs of production high (relative to one another), and externalities, both positive and negative, are small relative to market price.

Information goods violate virtually all these assumptions.

● Quality is highly variable.

● Quality assessment is difficult, and often frustrated by other factors (e.g., pay-to-publish journals, "friendly" colleague peer reviews, discussed recently by Joerg Fliege at The Other Place).

● Quality isn't, and often cannot, be known in advance.

● Variance of individual instances is high enough that averages rarely suffice.

● Fixed costs of production are high, particularly for research, also to an extent for selection, review, and editing.

● Variable costs of production (e.g., publication) are low. In fact we're utilizing a system which was specifically created to reduce those costs still further, Tim Berners-Lee's World Wide Web, developed to transmit physics papers between CERN, SLAC, and other related facilities.

● Information goods typically have very high positive externalities -- they benefit those who don't directly consume them. Occasionally they have high negative externalities -- e.g., smallpox, "superflu", or weapons research.

There's the question of what does a content payment scheme provide? Of which the answer is, generally, "an incentive to create content". What matters isn't whether or not each individual information trasnfer is equitably priced, but whether, at some reasonable interval (e.g., at years' end) you've got sufficient compensation for authors, researchers, reporters, etc., to provide an adequate supply of information and entertainment.

When distribution was on physical media, printing and transactional sales were reasonably appropriate. With the price of reproduction* approaching zero, but nonzero fixed costs of production, there's an inherent conflict in the mechanisms which allow for price discovery in markets.

Granted most posts are crap, and also probably most of the stuff that's worth a quarter to some are not worth it to most. But publicatuon is free - if one million people doesn't pay for your book, that's fine if 5000 pays an average of 20 USD for it?

A: You must decide, for each piece of data or information you consume, whether and how much it is worth to you. I'll note that in this discussion, not only did you not pay to read a work, but you couldn't even be bothered to click a link to examine it. Which, actually, I applaud as a rational behavior: the odds of being rewarded with quality content by following an arbitrary link posted on an Internet discussion site by someone who's preferred description is "space alien cat" is fairly low.

But it also rather handily demonstrates the specific failure mode of micropayments.

B: Information is paid out of a general cultural tax, apportioned by wealth or income. You may access as much (or as little) of the availed information as you choose. Creators are paid according to the access and performance of their works, tracked by one or more monitoring services.

Under the first scheme, there are numerous issues: the rich and poor have vastly different information access, as do children. Researchers who might reference many works (though often only in brief fragments) would have tremendous data charges, as might musicians or authors or photographsers, who typically have large reference libraries of relevant works. Those who don't directly consume information but benefit by its effects on society as a whole pay nothing. Remixes of works would be difficult to arrange given complex rights negotiations.

Under the second scheme, there's no concern at the time of access whether or not the work is worth paying for (though in circumstances where you're accessing physical resources or premeses: a book, a recording, a performance venue) you would still typically pay. Children and the poor would have as much access as any other. Researchers and artists could reference works as needed without concern as to cost. Remixes of works would be straightforward. Payment would be made regularly throughout the year.

At first blush, scheme A describes what we have today, and scheme B is a utopian broadband tax / content syndication scheme. Actually, this is entirely backwards: scheme B is largely the system we have in place today, except that instead of a government-imposed tax, it's one based on advertisers and paid through higher prices for goods purchased regularly throughout the year. Total advertising spending in the United States is $181 billion per year -- $567 per person in 2014.[1] Artists are paid through either ratings-based metrics for music, or according to negotiated television contracts for actors, screenwriters, and such. There's one key difference though: under an advertising-based system, it's ultimately the advertiser who calls the shots on content, and content is geared to maximise advertising-based appeal. This shapes both the types of works produced and the topics covered.

A broadband tax approach changes one element of this: how revenues are collected. It's either through an access provider (your ISP, cable, or broadband service), or through a public tax imposed independently. Allocate some or all of the $567 per-person advertising cost presently collected, and it would be transferred directly to authors, composers, musicians, actors, reporters, researchers, etc. Without the advertising middleman.

Your micropayments scheme requires a middleman and payment processor, trusted by both crators and consumers, some way of providing for refunds, and the somewhat problematic issue that there are limited capabilities to suck out any information you might have acquired but decided after the fact that you weren't interested in actually paying for. At least, without inflicting possible brain damage. How do I keep you from copying my book, or music, or photos, or movie?

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Notes:

1. US Advertising!spend!statisics: http://galbithink.org/ad-spending.htm

http://carisesuatu.loomhost.com/cari/Annual_Advertising_Spen...

http://www.prnewswire.com/news-releases/the-united-states-to...