The article that The Atlantic wanted Thayer to repurpose was a long feature about how the relationship between North Korea and the U.S. revolves around basketball, pegged to a recent trip by American basketball star Dennis Rodman. Olga Khazan, a relatively recent addition to the Atlantic‘s editorial staff, sent an email asking Thayer to submit a shorter version for the magazine, and when the writer asked how much the Atlantic was prepared to pay, the editor said zero — but offered exposure as an inducement:

“We unfortunately can’t pay you for it, but we do reach 13 million readers a month. I understand if that’s not a workable arrangement for you, I just wanted to see if you were interested.”

The economics of writing have changed

Needless to say, Thayer was a little offended at this, as he describes on his blog (he also provided a somewhat more colorful response to New York magazine). For Thayer, and for many who responded both on his blog post and on Twitter, this was just another sign of how far the media have fallen, and how little people value good writing. Eventually, the Atlantic‘s editor-in-chief apologized for offending the writer, saying the case was “unusual,” and that all the editor was trying to do was help Thayer’s work find a larger audience.

Atlantic to freelancer: We'd like the milk and cow for free, please. bit.ly/WGApbv

—
david carr (@carr2n) March 05, 2013

Felix Salmon tried to analyze what happened to Thayer in a blog post at Reuters, and came to the conclusion that freelancing is a lot harder to make a living at than it used to be — in part because online media works in such a way that having staff writers is a lot more efficient than using outside contributors. But I think he missed the most important aspect of what Thayer’s treatment says about the practice of writing now, and the economics of digital media (writer and editor Jane Friedman has a good overview of the issues).

In some ways, it’s odd that the Atlantic would even bother to ask Thayer for permission to run a condensed version of his piece: many outlets would have simply excerpted large chunks of it with links back to Thayer’s original — the way that GlobalPost did — since that costs nothing and achieves virtually the exact same thing (Thayer even mentions this possibility in his blog post). Whether you believe this is right or wrong, it arguably serves a purpose in the media ecosystem. And we are more or less stuck with it, whether you like it or not.

Some will always be willing to work for free

As former YouTube staffer Hunter Walk pointed out on Twitter, and Matt Yglesias noted at Slate, there is no shortage of free writing out there — in fact, the supply of free writing is theoretically infinite, since there will always be people who want to write and are willing to be compensated in other ways: by broadening their reach, enhancing their reputation, etc. This is why new publishing platforms like Medium and Svbtle are having some success, not to mention the rapidly expanding LinkedIn “Influencers” program.

People write for free. Happens all the time. So if you run a magazine and you're *not* asking people to write for free you're doing it wrong

—
Farhad Manjoo (@fmanjoo) March 05, 2013

This same process was famously — or infamously — also the foundation of The Huffington Post, and sparked a huge amount of controversy about that company’s practice of not paying its bloggers. As a number of people pointed out at the time (including me), there will always be people who want to write for free, and that’s not necessarily a bad thing. Unless, of course, you are one of those writers who used to profit from the lack of marketplace competition.

When it comes to things like media, your real competition isn’t the product that is better than you, but the one that is good enough to satisfy your customers — and if readers are happy to patronize media outlets that use writing they got for free, or writing they have aggregated and excerpted, there is precious little that freelance writers or any of us can do about it. Our only option, as a number of commenters at Hacker News pointed out, is to make it clear that we want better quality writing by actually paying for and/or clicking on it.

The part that Thayer and his supporters aren’t talking about is how much easier it is for writers of all kinds to make a living if they want to — not by submitting their work to a handful of traditional outlets, but by turning it into e-books and Byliner singles and other formats, something that has expanded the field of writing more than just about anything since the printing press. Are there new economics for writing? Yes. Are they unrelentingly evil and negative? No.

Images courtesy of Shutterstock / patpitchaya and Poynter

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Tim O’Reilly, founder and CEO of O’Reilly Media, talked about the tensions between individuals wanting to monetize their work and the broader value they can create by making their content available to everyone.

“I think there’s an area of our economy that’s really not studied enough, or it’s not thought about enough. What happens when people give things to each other without getting paid? Think about the revolution with YouTube,” he said, pointing to children choosing between a Disney cartoon or a video created by another child that was uploaded to the site. “From the point of view of a director who wants to get paid, that’s a negative thing, but from the point of view of the consumer, that’s a positive thing.”

O’Reilly pointed out that some people might think that free material, once widely circulated, would make it hard for others to eventually make money, but that might not be the case:

“Businesses do arise. The world wide web and open source software turned into Google and Facebook and Apple building all this incredible technology that they were able to monetize. So I’m interested in this economic activity that comes from this open source and open sharing. What does it tell us about the possibility of new jobs?”

These issues are very much at play when looking at companies like Twitter, which started with a free product embraced by a geeky, early-adopter audience and is trying to become a mainstream media business. O’Reilly cited the idea that once an item becomes free something else becomes necessarily more valuable. But Jeremy Howard, president and chief scientist at Kaggle, said he thinks for most creative types, there doesn’t have to be high demand for a product to keep them going:

“I’ve been coding every day for 30 years,” he said. “The idea that unless you create scarcity around intellectual property or creators will stop creating, is just crazy.”

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It was the French government that put an end to it. According to a New York Times report of a press conference on Monday, the country’s digital economy minister Fleur Pellerin stepped in and told Free to restore full access to the web, ads and all.

“An internet service provider cannot unilaterally implement such blocking,” Pellerin was quoted as saying. “This kind of blocking is inconsistent with a free and open internet, to which I am very attached.”

Free’s move had of course alarmed publishers who rely on advertising for their revenues. There was more to it, though.

It seems it wasn’t purely coincidental that this happened at more-or-less the same time as French regulators began to delve into Free’s alleged degradation of YouTube traffic. An email sent to a journalist by Xavier Niel, founder of Free parent Iliad, strongly suggested that the ad-blocking was just a warning shot in an ongoing war with Google. Indeed, it appears that only Google ads were blocked.

So, with its ad-blocking turned off again, Free has done what it intended to do, namely to demonstrate to Google that it can hurt the company’s core activities in France. However, Free also managed to get the relevant government minister to come out in favor of net neutrality, which is precisely what the ISP is trying to do away with. In soccer terms, this was what you might call an own goal.

The case exposes a deep irony in the treatment Google has received in France. Bear in mind that, just months ago, the French government was siding with the nation’s publishers in a bid to get Google to pay licensing fees for reproducing snippets of text in Google News. As in Germany, opponents of that stance pointed out that publishers benefited from Google News, which sends traffic their way. Now the French government and publishers are effectively holding hands in defence of Google.

However, it would be premature for the U.S. firm to break out the champagne.

“What is the financial incentive for operators to invest billions in their networks without seeing any return?” Pellerin also asked. “We have to put in place a win-win system.”

If Pellerin is countenancing a system where Google would have to pay Free to carry all that YouTube traffic, that is “inconsistent with a free and open internet”, to borrow her own words. That would be doing away with net neutrality – and, by making content delivery even more of a big money game than it already is, it would also disadvantage smaller players that want to break in.

If the French government really wants to keep the internet open, and to give French startups an opportunity to take on the likes of YouTube, it should perhaps try to make its messaging around net neutrality a bit more considered and consistent.

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The update got pushed out on Wednesday, with one of its new features being a beta ad-blocker. And, according to multiple apoplectic sources, the ad-blocker is turned on by default, once the user resets their set-top box.

As the Rude Baguette blog has noted, savvy users can switch the whitelist-free ad-blocking service off through the online FreeBox management portal. Others have also pointed out that the ad-blocking doesn’t actually work very well, although it is partially effective (that’ll be why they call it a beta version then). There’s also the fact that many people already employ ad-blocking plugins on the client side.

Just to be as fair as possible to Free here, it’s not yet clear whether the ISP actually meant to have the feature turn itself on as a default – again, betas are buggy. I’ve also asked Free for comment, without success.

So, assuming that this was an intentional move… wow. The irony of the situation is just stunning. For this is the same Free that is being investigated by the French telecoms regulator over its alleged treatment of YouTube traffic.

If Free really is intentionally degrading or blocking YouTube – a matter for the regulator ARCEP to determine – then its actions are one of the clearest violations yet of the net neutrality principle. And why do ISPs violate net neutrality? Generally because they either want to throttle a competitor to their own services, or they want to use traffic degradation as leverage in their ongoing quest to get high-volume traffic sources to pay them money.

And how do high-volume traffic sources make money? Uh, advertising, which is still pretty much the lifeblood of the online content industry, at least for now. It’s too early to draw conclusions about what’s intended here, but the fallout of Free’s new beta feature should be quite entertaining to watch.

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As part of its investigation, the regulator is also probing three other unnamed companies. The perception is that ISPs in France are either under-investing in infrastructure or violating the spirit of network neutrality, the idea that ISPs should not discriminate on traffic traveling over their pipes. Yet, in France, it seems that at least some in the government are willing to make Google pay for the ability to guarantee that ISP customers can receive its bits, turning the internet into Gulliver in the land of the Lilliputians, with ISPs and governments tying it down. The question is, will what happens in France happen elsewhere?

The ARCEP investigation and user complaints

Early this year, communications regulator ARCEP will rule on an investigation it opened on November 22 following complaints that video streaming services including YouTube are often too slow to watch. Now three French senators are also calling on the country’s digital economy minister to take action.

ARCEP stepped up when a survey of over 16,000 ISP customers by French consumer group UFC Que Choisir found 83 percent of Free customers, 47 percent of Orange customers and 46 percent of SFR customers were unable to use YouTube properly.

Since the investigation began, many users have reportedly noted an improvement in connection quality, but connections remain patchy.

And this issue is not limited to Google. “The quality of connection is inadequate in almost all operators,” said UFC Que Choisir’s survey, which found that France’s native Dailymotion, ironically, is slowest to access through France Telecom’s own Orange ISP, which owns almost half of the YouTube rival. And 25 percent of consumers reported slow-downs while watching broadcaster TF1′s MyTF1 catchup service.

Is it under-investment or a desire to make content companies pay?

UFC Que Choisir says these symptoms may be caused by under-investment in infrastructure as well as commercial tensions between ISPs, which deliver web services to the end user but which don’t pay for the infrastructure. It has called on the government to define quality-of-access rules, in part by allowing the competition regulator ARCEP to build a quality-of-service observatory. Similarly, in the U.S., the Federal Communications Commission is also trying to figure out how to measure the quality of a broadband connection beyond just looking at speeds.

Inter-company tensions do appear to be at play. A case before another public agency — France’s competition regulator, the Autorité De La Concurrence — in September illustrates how ISPs eager for revenue from web content companies can hold the user experience hostage.

Cogent, which handles YouTube’s peering interconnections, had complained to the competition authority that Orange had refused its connections, wanting more money to add ports to connect Cogent traffic to its networks. Much of the interconnections between large ISPs, CDNs and web content companies are negotiated by private deals, so it’s rare to see the government get involved, or even to hear much about them publicly. In the U.S., when Level 3 and Comcast became embroiled in a public peering fight after Level 3 started sending Netflix traffic over its connections with Comcast, the FCC refused to get involved, and both parties settled the disagreement.

But in this case, the competition regulator said one ISP was within its rights to charge more money from services hoping to reach its subscribers. This so-called double-sided business model has been sought by ISPs who argue that companies such as Google are freeloaders making huge profits off the pipes of owned by the ISPs. In contract, Google and other content companies argue that their services are the reason customers upgrade to higher speeds and continue paying ISPs money.

And in France the ISP argument has gained at least one supporter in the Autorité De La Concurrence. The authority says France Telecom is offering interconnection prices significantly below market value, and it has accepted the telco’s undertakings to ensure transparency.

French policymakers generally are generally in the mood to extract more money from Google. They have already set such wheels in motion around taxation and copyright fees. Now infrastructure could be the next arena. But its unclear how far France will go.

It’s one thing to try to ensure that consumers have an acceptable connection to support online video, through implementing some kind of standards. It’s another to get between participants in peering disputes, and to possibly start setting rates.

The U.S. fight is bigger than France’s

But such fights are becoming more common as the stakes over the internet and web video get higher. ISPs are worried about the cost of delivering video traffic over their networks, while also losing out on the ability to charge users for pay TV packages that significantly boost their revenue. Meanwhile, consumers are demanding more video online because they can choose what to watch, when they want to watch it, on any device.

The French competition authority’s earlier investigation referred only to two individual companies at loggerheads in a specific peering fight. But the new inquiry by the communications regulator is much wider, looking at industry-wide practices around infrastructure and interconnection. And it comes following consumer outcry — identified in UFC Que Choisir’s survey — to which politicians may be keen to respond.

The outcome will be important because Google is already facing having to pay to re-use news content in some parts of Europe through both commercial agreements and possible new legislation that suggest excerpting is chargeable. That could set new precedents for the online content economy.

The French broadband outcome will be important because it will set up a precedent for other telecom regulators who are struggling with similar issues. Creating standards to ensure that customers have a quality online video experience is no simple task and may well require investment by ISPs, especially those on older technologies or oversubscribed networks.

As for the peering issues, if the government decides to step into the fray there, it could be setting the internet up for regulations that put governments in the role of determining who can connect to whom and how much they can charge. The OECD recently made a convincing argument that such regulations and government involvement would hurt the web and the economic development of companies dependent on the web. So what France does here might have influence far beyond its borders.

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There has been an interesting debate going on over the past week or so that gets to the heart of one of the deep-seated conflicts within the web-startup community: namely, whether apps and services are better when they are free or when users pay for them. Dalton Caldwell, the founder of Imeem, kicked things off by saying he is going to try to create a for-pay version of Twitter, and others cheered him on by saying that an advertising-based approach makes a lot of services less appealing than they could be. Venture capitalist Fred Wilson of Union Square Ventures, however, argued that free and ad-supported is actually the best model for consumer services that want to achieve a broad reach. So who is right? That depends.

As my colleague Ryan Kim has explained, Caldwell’s idea of turning an existing project of his — called App.net — into a kind of paid Twitter-style network grew out of an earlier post in which the entrepreneur lamented the fact that Twitter had given up on being a kind of real-time information utility with a rich and open API and decided instead to become an advertising-supported media company (something I have argued is a double-edged sword for traditional media companies). This post got so much support, Caldwell said, that he decided to turn App.net into the kind of network he wished Twitter had become.

Are we victims of an “ad-supported monoculture”?

In his posts, Caldwell rails against what he calls the “advertising-supported monoculture” that prevails in much of Silicon Valley, where apps and services are created that see users as content rather than partners — a model that is summed up by the popular phrase ”If you aren’t paying for it, then you are the product.” Massive networks like Facebook and Twitter, and Myspace before them, focused primarily on getting as much scale as possible and monetizing that user base later, and the most common method for doing so happens to be advertising. But Caldwell and his supporters argue this is bad. As he puts it:

All of these services are essentially in the same business: vying for the opportunity to sell you/your clickstream to advertisers . . . I have no interest in completely opting-out of the social web. But please, I want a real alternative to advertising hell. I would gladly pay for a service that treats me better.

Wilson, however, says that as irritating as advertising-driven services might be, a model that is free to users is the one that makes the most sense for social- and consumer-focused businesses, simply because that is the only model that is going to appeal to the greatest number of users. Although some argue this approach has so many flaws it is effectively going away — as Rags Srinivasan did in a recent GigaOM post — Wilson maintains that a free model is the only way to get the kind of network effects necessary for a large consumer business. He also argues charging users is contrary to the rationale behind such services, since the content being monetized is coming from those same users. As he puts it:

When scale matters, when network effects matter, when your users are creating the content and the value, free is the business model of choice. And I don’t think anything has changed to make that less true today. If anything, it is more true.

In a recent response to Fred’s post, Caldwell says the Union Square VC misunderstood his point. The point wasn’t that some web services couldn’t be free, argues Caldwell, but instead that large-scale platforms of the kind that Twitter and Facebook have built — which connect users together and also allow outside developers to add value through APIs — are better when they are paid for, because then they don’t have to worry about locking down their APIs (as Twitter has gotten criticism for doing) or controlling the experience in order to monetize it. The money comes from developers and users who contribute to the network, and they are the only customers who matter. Says Caldwell:

Web2.0 built a lot of really cool, shiny things, but the foundational aspects of them are built on what I am arguing is a flawed premise. I am not simply criticizing, I am saying we can do better.

Would users be better off, or just developers?

So would the App.net model, in which users would pay $50 per year for an account — money that would be shared with developers who built on the API, as Caldwell described in his latest post — be better than the way Twitter functions right now? As far as I can tell, that depends a lot on which vantage point you are looking at it from.

If you are a user, the main concern (I think) would be not just what kinds of cool apps you could use but also whether the rest of your social graph was using it. I have argued in the past that this built-in network effect is one of the biggest weapons Twitter has, as it is for Facebook and any other large-scale social service. Of course, App.net could integrate its network with Twitter’s, so that messages would flow through from one to the other (as they do from similar alternatives such as Identi.ca), but then all Twitter would have to do is kill its access to the API, the same way it did with a project launched by Bill Gross’s UberMedia.

The ones who would stand to benefit the most from Caldwell’s proposal are the developers and startups who currently feel like Twitter is beating up on them by restricting what they can and can’t do with the API. On a service like App.net, they would be co-owners in a sense, and therefore they would theoretically get treated more fairly. But even if they do get treated more fairly, the question of how broad such a network can get is still relevant to them. Who wants to be an equal partner in a business that has a tiny fraction of the number of users it could have?

I applaud Caldwell’s attempt to create an alternative model for a social network, and I think it will be interesting to watch and see how far it gets. But I think in the long run Wilson is more likely to be right: If users are supplying the majority of your content, it seems churlish at best to charge them for the privilege of doing so, and that seems to leave advertising as the only viable business model for such networks (although others continue to disagree).

Post and thumbnail images courtesy of Flickr users Quazie and Rosaura Ochoa

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Devicescape doesn’t own its network. Instead it uses crowdsourcing software embedded in millions of customers’ smartphones to identify and test the quality of open hotspots around the world. It then forms a virtual network around those free access points, which Devicescape customers automatically link to when in range. Last month, Devicescape announced a deal with Intel to add its virtual network capabilities to Intel-powered Ultrabooks and tablets.

Free Mobile and Bouygues’ Wi-Fi networks won’t have much overlap as they target different kinds of hotspots. Free’s network is built into the home broadband set-top boxes Iliad installs in residential customers’ homes. So its coverage is limited to areas where people live and is optimized primarily for indoor usage.

While Devicescape’s network does include some open residential access points, it also incorporates the free Wi-Fi offered by local governments, restaurants, coffee shops and retail businesses. If you’re in a public plaza, you’re probably much more likely to encounter a Devicescape connection than a Free Mobile connection. But Devicescape doesn’t have the sheer volume of nodes as Iliad. It offers 8 million hotspots, but only a fraction of them are in France (Devicescape doesn’t break down numbers by country). Bouygues customers, though, will have access to the full network when they leave France.

Since Free Mobile launched five months ago, it has shaken up the normally staid French mobile industry, setting off price wars with the big three carriers in France. In the first quarter, Free added 2.6 million customers – an unprecedented haul for a country the size of France – lured in by its ultra-cheap voice and data plans.

Free, however, may have some trouble keeping its revolution going. It’s leaning heavily of its competitor/network partner Orange to supply 3G coverage in the large portions of France Free’s HSPA+ network doesn’t cover. For every customer Free steals from Orange, it winds up paying the carrier back in roaming fees.

Free’s hotspot network only went live in April so it has yet to make an impact on Iliad’s financial statements. We’ll have to wait to see if Free can truly use that huge resource to manage its data costs and whether operators like Orange and Bouygues can overcome that advantage with their own Wi-Fi services.

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Sachin Katti of Stanford presented the OpenRadio idea at the Open Networking Summit held in Santa Clara, Calif. this week, and laid out a clear rationale for using a software-defined network to aggregate all the available wireless technologies together to deliver services. By layering the orchestration software on top of the networks, operators can easily write programs that can help them optimize their networks. For example, an operator could limit Netflix or YouTube traffic to only 40 percent of the LTE airwaves and save the remainder for other data traffic and voice.

Right now, operators have to buy expensive gear and make tweaks across their entire network to allocate their bandwidth for certain services. OpenFlow makes the network programmable and easy to tweak using higher-level programming languages. Katti says that by using programs to manage the flow of traffic across a pool of network resources, operators could alleviate the so-valled “spectrum crisis.” From a consumer perspective moving form a Wi-Fi to a cellular network would become seamless under the OpenRadio vision.

Katti’s ideas are compelling, especially for less traditional operators such as Republic Wireless or Free in France. Both operators offer mobile phone service that rely primarily on the Wi-Fi networks around a user and use the 3G networks as a last resort. Given the right hardware and the OpenRadio software they could make managing their networks easier for them and for their users. Katti is working with TI to build the silicon underpinnings for the base stations that would be needed to pool all the available wireless resources for carriers, and will have something available this year.

But for carriers, while this might address their spectrum worries it also is a threat to their business model, which is built around perceived scarcity. Verizon held off on including Wi-Fi in its phones for so long because it wanted to shunt consumers to its cellular network, where the costs per gigabyte of data used are higher. If OpenRadio takes off, it’s easy to envision companies trying to buy service from a wholesaler (maybe Sprint will step up) to create wireless networks out of Wi-Fi, white spaces or other airwaves. Enterprising carriers or hot spot operators might even set up roaming agreements that make such coverage global. I’d love to see OpenRadio make it out of Stanford into the real world.

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