Blog Ipsa Loquitur

I liked this piece by Ryan Knutson and Josh Dawsey in the Wall Street Journal, on New York City’s audit of Verizon’s stalled rollout of its fiber optic internet service. The situation is a little ridiculous: 75% of the 40,000 people on the waiting list for fiber optic service have been waiting for more than a year. (Although that’s a little misleading. I’ve been waiting for four.)

The city plans to release the audit on Thursday. It examines Verizon’s compliance with the franchise agreement that the company signed with the city in 2008, allowing it to deploy its fiber network FiOS. As part of the deal, Verizon agreed to string fiber wires past all city dwellings by 2014. Verizon says it has held up its end of the deal. The primary reason many buildings still don’t have service, the company said, is because it is struggling to get access from landlords.

Wow. The evil landlords in this city are keeping Verizon out of their buildings, in keeping with that tradition of underdeveloped real estate in New York City. For example, most of Staten Island’s homes didn’t have running water until the 1980s. It’s shameful, really. Why, I think the mayor should-

The audit says Verizon isn’t connecting some buildings because the carrier is holding out for an exclusive agreement with building owners to be the sole network provider. [A Verizon spokesperson] said the carrier does ask for exclusive agreements in some cases, but that isn’t not why [sic] buildings don’t have service.

Oh, I see. So Verizon says they’ve actually wired all the homes in New York City for FiOS, but Verizon won’t actually let anyone purchase that service until landlords help Verizon hold customers hostage. Verizon wants to be the only game in town, or they won’t play.

But again, note that they’ve already spent the money to play the game; the homes are ready for FiOS. Verizon’s problem is that, if they offer service in my building, Time Warner could theoretically lower its prices for service in my building. And then Verizon would have to lower its prices in turn, to attract customers.

This, of course, would quickly bankrupt both Verizon and Time Warner, which is why economists refer to this phenomenon as a “death spiral.”

Published on under This Doesn't Add Up

Ethan Smith in the Wall Street Journal on where the money comes from (and goes) at Spotify:

Even though free users outnumber paying subscribers by about three to one, the free tier generated only 9% of Spotify’s $1 billion-plus revenue last year; the rest came from subscription fees, according to a financial disclosure Spotify filed last month in Luxembourg.

The two tiers generate roughly the same amount of total listening in any given month, according to data shared with publishers. (Subscribers—who presumably want to get their money’s worth—tend to listen to a lot more music than free users.) In March, that amounted to over 4 billion streams each on Spotify Free and Spotify Premium in the U.S. alone, where online music companies have to share certain usage and royalty data with music publishers.

There’s quite a bit of fascinating math in the article, but it really boils down to those two paragraphs. Half of the songs played on Spotify result in just 9% of the revenue. That might sound a little crazy to you. This is the world’s most successful streaming music platform? Almost all the money comes from the streaming activity of a small number of users.

Well, compared to freemium games, that’s nothing. Last year, a report on monetization in mobile games found that the average freemium game makes half its revenue from 0.15% of all players. That’s not a typo. That’s a fraction of one percent providing half the revenue. Re/code’s Eric Johnson noted:

At a conference I attended last year, a representative of a gaming company — who declined to be named or interviewed for a story — claimed that his firm had worked with a Japanese game company with one player who spent about $10,000 per month on in-app purchases. The company, he said, had assigned an employee to cater just to that whale, to ensure that she was always satisfied with the game and therefore likely to keep coming back.

I’ve got it! Spotify just needs to introduce a $10,000 per month plan, for crazy rich folks. Bam. Problem solved. The world is saved, and Taylor Swift puts her music back on Spotify.

Published on under The Digital Age

You know what’s lousy about the male gaze? Everything. This article in Aeon explores a fun new twist on conventional masculinity; the Captain America body:

But who is doing the fetishising? Not women. In 2000, The American Journal of Psychiatry published a telling experiment led by Pope at Harvard. College-aged men in Austria, France and the US were asked to choose both their ideal male body and the body they believed women preferred. In all three countries, men picked an ideal on average 28 lb (12.7 kg) more muscular than their own – and they believed that women wanted a male body 30 lb (13.6 kg) more muscular. The men consistently overestimated the appeal of brawn, while women, when asked, preferred an ‘ordinary’ body without the added muscle.

Published on under It's a Man's World

Via Big Think, drug companies apparently illegally hide unfavorable results for their new drugs during clinical trials:

Shocking as it may seem, it is currently fairly standard practice for drugs companies to withhold clinical trials with negative results, allowing doctors to blindly prescribe drugs that don’t work or are even dangerous. In the United States, failing to publish clinical trials is punishable by a fine of $10,000 per day, but shockingly the fine has never actually been issued as Dr. Ben Goldacre explains in his editorial in PloS Medicine.

This is particularly unbelievable given that a recent study found that more than half of the clinical trials registered on clinicaltrials.gov within a given time period were never actually published (within the time period allowed by law). An earlier study, which found similar results, also demonstrated that even when the results are published, negative side effects and even serious adverse events are routinely missed out of the published version.

That’s pretty lousy. Also, if I’m a pharmaceutical company lawyer, I’m upping my medication if everyone else’s medication might be extra dangerous. That’s a lawsuit waiting to happen.

For an example of lawsuits that do happen when organizations don’t regulate and/or enforce misbehavior, look at my new favorite punching bag: police!

They get sued. A lot. They use fancy analytics to track and predict crime, and all the big data money can buy. But they apparently don’t turn their crystal ball inwards. Their own problems are a complete mystery to them:

For one study, Schwartz asked 140 law-enforcement agencies — including 70 of the biggest ones —  for information about police-misconduct cases. A common answer: We don’t know.

So, she asked the law departments, everybody. Which didn’t always help.

“Eighteen of the largest cities and counties,” she says, “and these are cities that include San Diego, New Orleans – counties like Harris County, Baltimore County – they reported that they had no records in any government agency or office reflecting how much they spent in lawsuits involving the police.”

Be sure to click through to the study for the explanation of how just a few cops get sued over and over but face no discipline despite costing taxpayers millions of dollars in civil lawsuit settlements. Thrilling!

Which in turn reminds me of the lack of institutional awareness around medical malpractice; the doctors who get repeatedly sued for malpractice completely misapprehend the reasons that they get sued.

The refrain in all three of those links is that you cannot manage what you cannot measure. The Food and Drug Administration is apparently not managing the mass abuse of clinical drug trials, which suggests they don’t keep track of companies. The police (and their attorneys) are not measuring how often they get sued, and so lawsuits about. Physicians aren’t managing their risks of malpractice because they don’t know why they get sued, which suggests a failure to … write it down and measure it.

Oh, and here’s a fourth one that deals with poor kids if you really want your heartstrings tugged upon.

Published on under We Can't Have Nice Things

Robert Graham of Errata Security on cracking iPhone PIN codes:

All the data (on the internal flash drive) is encrypted with a random AES key that nobody, not even the NSA, can crack. This random AES key is stored on the crypto-chip. Thus, if your phone is stolen, the robbers cannot steal the data from it – as long as your phone is locked properly. To unlock your phone, you type in a 4 digit passcode. This passcode gets sent to the crypto-chip, which verifies the code, then gives you the AES key needed to decrypt the flash drive. This is all invisible, of course, but that’s what’s going on underneath the scenes. Since the NSA can’t crack the AES key on the flash drive, they must instead get it from the crypto-chip.

Thus, unlocking the phone means guessing your 4 digit PIN. This seems easy. After all, it’s only 4 digits. However, offline cracking is impossible. The only way to unlock the phone is to send guesses to the crypto-chip (a form of online cracking). This can be done over the USB port, so they (the NSA) don’t need to sit there trying to type every possible combination – they can simply write a little script to send commands over USB.

To make this more difficult, the crypto-chip will slow things down. After 6 failed guesses, the iPhone temporarily disables itself for 1-minute. Thus, it’ll take the NSA a week (6.9 days), trying all 10,000 combinations, once per minute.

I really enjoy the Errata guys’ walkthroughs of these kinds of topics. This one is a little scarier than most, as the tools that the NSA and law enforcement use are readily available to the sufficiently motivated.

Published on under Scimitar Golems Have 10 Hit Dice

The number one cause of bankruptcy in America is medical bills. It’s been this way for a while, although that may be changing slowly. Frankly, it’s a little ridiculous when the rest of the developed world has solved the problem. Progress is progress, though.

Here’s a really great example of how medical bills get to be so bad for so many Americans. Researchers at Johns Hopkins have named the fifty hospitals in America where uninsured folks pay ten times the list price for services.

Now, sure, you’re allowed to make a profit. That’s all well and good; but a 90% markup is something out of the Apple playbook. It’s one thing to markup a luxury cell phone for people who insist on buying one. It’s another thing to mark up the treatment of an inflamed appendix for people who couldn’t afford insurance.

From the article:

“They are price-gouging because they can,” said Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, co-author of the study in Health Affairs. “They are marking up the prices because no one is telling them they can’t.”

He added: “These are the hospitals that have the highest markup of all 5,000 hospitals in the United States. This means, when it costs the hospital $100, they are going to charge you, on average, $1,000.”

Okay, that sounds bad. But come on. Everyone knows insurance is a good thing. With Obamacare, you actually pay extra in taxes if you don’t have insurance. So really, isn’t it just the corner-cutters who get screwed by this practice?

Well, no.

The researchers said other consumers who could face those high charges are patients whose hospitals are not in their insurance company’s preferred network of providers, patients using workers’ compensation and those covered by automobile insurance policies.

Carepoint Health-Bayonne Medical Center in Bayonne, N.J., for example, also charges rates 12.6 times the actual cost of patient care. […] By comparison, the researchers said, a typical U.S. hospital charges 3.4 times the cost of patient care.

As usual, the article gets a quote from hospital spokespersons, who say that yes, they have “set” prices for each procedure, but nobody actually pays the listed price. Insurance companies negotiate bulk discounts for their customers, and the uninsured get to bargain down to less-obscene prices. This isn’t price gouging, it’s just imaginary price gouging.

Look. In law school, we were taught how to bill our friends and family for legal work. Always make up a crazy hourly rate, put that on the invoice, but then discount it down to your actual rate that you can actually bill your friends with a straight face. It’s a little dishonest to make up a fake price and a fake discount to arrive at a “bargain” price you wanted to charge to begin with.

But, you know. Lawyers. Sociopathy is kind of expected.

In our case, the deception was to avoid putting strain on social relationships by haggling over the price of legal services. It’s a passive-aggressive power play to your friends and family.

In this case, the deception seems to be… to frighten the unwell and uninsured (and the out-of-network and the underinsured etc.) into submission, by showing them an imaginary price they can’t afford next to a smaller price that will probably be the reason they’re bankrupt.

Published on under The News