The DeCSS case and how to change a Big Business (BB) in today's world

I have watched this case of legal muscling and intimidation and just had to comment with an attitude of "What are the hackers doing here?" This is BB vs. scattered and unfocussed "hackers". Who do I think will win? BB of course! Just look at the situation: BB wants to establish that they will punish anyone they want by using legal bullying tactics. They pick a small entity (the "little guy", a son and his father) with a "potential" impact on BB's business. It doesn't matter that the "potential" adverse effect is not real or logical. The business is playing on their own field of expertise, where they know the rules and the hacker community doesn't even read the rule book. The media love it and BB plays it for all its worth. After all, BB has labeled the little guy a "criminal", a nerd and a foreigner, and the people who would complain are those other nerdy guys (Linux users - and what place do they really have in the world high technology order - just esoteric).

Why do I say that BB will win? Just look at the comments in Slashdot's talk-back to the initial indictment: You can characterize them as whiny, uninformed, and petulant. Suggestions are made that boycotting of BB and donations to the little guy are the ways to help. Give me a break! Boycotts don't work unless you have an established big organization (Green Peace, Sierra Club, NAACP, and the Christian Right come to mind). Donations from a few hundred (or 10's) of hackers don't merit any stories in any media (except in on-line talk-backs where they are buried by the high volume of ranting, raving, and novice legal opinions).

Let me call into question who wants to be called a hacker. Check out the L0pht's website and the definition they use. Their classic definition is the best and most rewarding: doing things (solving problems) in a way that was not intended or planned. For myself, I think you should "hack" life. Wozniak did it, Gates did it, the Internet originators did it, the guy who invented the spreadsheet did it, and the L0pht is doing it. Look at what they did - it was different and enjoyable, and with dedication, they made a difference. Yeah sure, one might get arrogant like Gates, but take a look at the others and the L0pht. They're in a different mold.

So, you have this case against reverse-engineering a trade secret and then showing everyone how to do it. Let's be brutally frank about it. The legal results are guaranteed: If you don't understand the game that is going to play out here, you're going to lose. Just slink away and let the legal people and BB play the game to get what they want. In my opinion, if I was a lawyer for BB I would be laughing at the ranting and raving going on by the "hackers", and the media's obvious siding with my client. I have a no lose situation. I can: Settle out of court before trial (BB wins and gags the "little guy"); settle after starting the trial (BB wins by getting publicity that they will pursue by legal bullying anything that THEY think might hurt their interests); let the court decide (if BB loses, they WIN with a spin-doctoring that says they only lost by a technicality in Norway - and man, have they punished the little guy with his costs). There you have it - end of episode - a clear case of flipping a coin with the bet: "Heads I WIN, tails you LOSE."

But wait a minute. Aren't you hackers? Can't you see that if you learn the game you can change the way things are done and get the outcome YOU want?

You CAN hack big business and surprise the hell out of the CEOs and lawyers. They have a soft underbelly. When a company presses legal claims they are playing a high stakes game. Usually, they do not play that game unless they are pretty confident they can WIN. But sometimes they go wrong by underestimating the resourcefulness of their opponent and being arrogant. That's a deadly combination.

A classic case comes from years ago when the telephone company sued a guy in California for extending his phone with a home-made system to connect all the buildings on his farm. They claimed that he was setting up an exchange and only the phone company wanted to be able to do that. The phone company was arrogant and wanted to set the precedent that they owned all phone systems. They didn't expect that as a ham-radio operator he would get the National HAM Radio Operator's Club to support and defend him. The phone company lost big-time and this set the precedent that the phone company owns ONLY up to your property or the box going into your house. Inside, you can do whatever you like, so long as it doesn't interfere with the phone company's operations. I bet the phone company wishes it had never sued that ham-radio operator.

So, this is how you can do the same thing today to the DVD Consortium:

Did you know that owning one (1) share of any public stock entitles you (or your proxy) to attend and vote at the Annual Stockholders Meeting of that publicly held big business? Did you know that you can actually make a few statements on the record at those meetings?

Do you know that Mutual Fund Managers have forced big businesses to merge, not to merge (see P&G and Warner-Lambert talks in January) or do other business things because the Fund Manager has proxy control of large amounts of the big business's stocks. Did you know that each time big business's stock drops and you find that a big business Officer sold his stock just before the drop, you can sue him? Yes, you can, and it happens a LOT - you just don't hear about it. Big business almost always settles out of court before a trial (think they want to go to court when they can get rid of the annoyance by paying off the complainer - it's almost legal extortion - but the complainer has to lose money in the first place for the suit to have teeth.)

The only kicker is: The fewer proxies, the less influence. Now, you don't have much clout with one share. But what if you, and people who think like you, combine your proxies and vote as a block. THIS is power! THIS is what will make Big Business's CEO and other company officers take notice. THIS is charging onto the playing field with a rule book in your hand and power in your pocket. You WILL be noticed! You should also realize that only a fraction of the stockholders in a company ever assigns their proxies to someone; usually BB asks the stockholders for their proxies to vote what BB wants. So the stockholders meeting attendees represent only a part of the total shares in the company. Your block of shares then has more clout than you think. If you can get enough opposition to the mainline BB view, the Meeting notice can even state them.

It doesn't have to stop there either. If you have a block of votes, then the media is going to take notice also. Just imagine the story: "Hackers, claiming ethical and economic reasons, plan to attend Annual Stockholders Meeting to voice opposition to BB's DVD policies." Imagine BB's CEO seeing that in his favorite media. That's delicious and legal.

OK, you say you can't get hackers to descend on BB at the right time (work schedules, travel, distances, costs). PLAY the game. Hack the rules. (Remember, this doesn't mean break the rules - just apply them in a different way that no one thought of before.) You have proxies - pool them! Find a well-respected and ethical organization and set up an account that holds stock owned by individuals. The sole purpose of the account is non-profit and to vote the proxies of that stock as a block. Have ONE person with those proxies show up at the meeting. Broadcast it. Call up the company and tell them what you plan to do (I smile when thinking of that phone call to the Investor Relations Department of BB). Remember, the Security and Exchange Commission, which allowed the company to raise a lot of money by going public, makes BB play by SEC rules. If you understand computers you can understand the SEC rules. (Ha! Think the lawyers, who study the SEC rules, know computers like a hacker does? No Way. The lawyers have to hire outside experts --- Hmmm, maybe friends of yours.)

The beauty of this is that each of you still owns your shares of stock. You aren't donating all that money to anyone! Later, you can have the stock sold and get almost all the money back.

Let's look at examples of costs to you: If the Holding Company sells it on-line, you might lose a few cents. Think of it this way: Honest (and savvy) Holding Company sells 1000 shares at $100/share through an on-line broker for < $10. If the 1000 shares came from 1000 people then the per person cost of the sale would be $0.01! Note that the transaction is $100,000 total, but Holding Company only expensed $10 total. One on-line broker lets you trade up to 5000 shares for <$10. (If you had 5000 shares of MSFT (~$100/share) that would be $500,000 traded for <$10.) Ahh, the beauty of on-line brokers! Do you feel that this cause is worth 1 cent? Now, I know that the Holding Company will have some operating expenses too, but that can be worked out to cover expenses with full disclosure guaranteed. This should be a cause, not a plan to make anyone money.

Here's another angle in the hack. Your holding company can sell all but a small number of the shares in BB #1 after the Stockholder's Meeting and buy a lot of BB #2 to get ready for BB #2's Stockholder's Meeting. You can rotate through a number of them. When you get what you want, you cash out. That's what big business would do. Gee, isn't that ironic, and a pretty good hack.

One noteworthy point at this juncture would be to highlight the fact that investment clubs are regulated - they are not just informal groups of investors. There is paperwork that needs to be filed. For help starting up your own investment club, The Motley Fool (http://www.fool.com/) has lots of resources that may be of assistance. In particular, the "Investment Club" section of the Motley Fool may be of interest.

Who knows, what you made the company do might please other stock investors and you might sell at a profit. But, what you've done could also hurt the company's image and cause the stock to go down. Ha! (This is where you've got to smile.) You will have BB's officers trying their hardest to not let the stock drop -- they're working in YOUR (a stockholder) best interests (actually they're trying to keep their stock options positive and they personally lose money if the stock drops). Isn't it funny, that while you fight for your cause, they can be fighting to not let you (a stockholder) lose any money! Now, that's justice!

Well, that's the plan. Play the game - Hack life. Use the media, don't let them always use you. Don't just vent your displeasure on the talk-back, on-line magazines. Make a difference!.