On Fri, Jul 12, 2002 at 07:14:55PM +1200, Peter Gutmann wrote:

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From a purely economic perspectice, I can't see how this will fly. I'll pull a random figure of $5 out of thin air (well, I saw it mentioned somewhere but can't remember the source) as the additional manufacturing cost for the TCPA hardware components. Motherboard manufacturers go through redesigns in order to save cents in manufacturing costs, and they're expected to add $5 to their manufacturing cost just to help Microsoft manage its piracy problem?

Motherboard makers don't pay for it. Microsoft pays for it. Or, Microsoft and Vivendi and Sony and ... all chip in. Each pays a portion, and reaps the rewards. Ok, really Wave or their ilk reaps the rewards as well. This is what Wave's been trying to sell for years now. It hasn't flown, yet. MS, Sony et al. would rather the chip get paid for by someone else first so they can use it for free. But there's a likelyhood that eventually someone will see where they can make money from it and go with it. If not with Wave or TCPA, with some other deal.

Sounds a bit like the SET business model in which the issuing bank got to carry all the cost and liability and the aqcuiring bank got all the benfits.

What killed SET wasn't that Visa got greedy and arrogant, although that certainly didn't help. They didn't want it to succeed. It was a placeholder against Mondex, which looked like it was going ot take off in the mid 90s.. When Mondex didn't happen, SET got harder and harder to actually implement (with new fees for participating inthe "standards body" and new fees for compliance testing, etc. etc) Visa makes more money from the current SSL situation because they charge a hefty added fee for 'card not present' transactions. SET would have gotten rid of that, which would have been good if there was a competing payment system (Mondex), bad if there's a virtual monopoly (what actually happened). It took me a year or so of going to SET meetings before I figured out that they really wern't that incompetent at getting a standard organized, they were fscking it up on purpose. Eric