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JackSpratts 17-08-06 12:14 PM

Peer-To-Peer News - The Week In Review - August 19th, '06

"By holding that even the president is not above the law, the court has done its duty." – Ann Beeson

"Plaintiffs have prevailed, and the public interest is clear, in this matter. It is the upholding of our Constitution." – U.S. District Judge Anna Diggs Taylor

"When all is said and done . . . the residents of New Orleans are going to have a better network serving them than what they had before." – Bill Smith

"I came up with the idea of using hot dogs. You don’t get any protesters coming to your door." – Stephen Gass

"Now we can put our problems on the Web site, and then the government can't say, 'We didn't know'." – Ajaib Singh

"All my friends do it. It just seems like the natural thing to do." – Amy Thomas, 12 year old musician and file-sharer

The Bright And The Dark Of It

If the problem of sharing isn’t a moral one, and it isn’t for me – I’ve been taping, sharing and promoting since I was a small child, then in this era of intense and growing government scrutiny the problem is a tactical one, and several groups recently announced technical measures designed to address it.

There are essentially two ways to deny prying eyes access to your internet activities. You can simply hide so that they don’t know you exist, or you can camouflage your content so they can’t understand what you’re sharing. You can even do both. WASTE comes to mind whenever the issue arises. A so-called darknet in which trusted users share only with each other, it denies access to outside parties, operating under the theory that if they can’t see you they can’t see what you’re doing. It applies limited encryption, camouflaging some social aspects like chat, then disguises the unencrypted trading content by sending out storms of optional nonsense, or "chaff" to challenge any bit sniffers tapping your tube. It does have a reputation as a geek tool and whether that’s true or not it suffers some serious drawbacks, foremost being the inability of half the people trying it to actually get it going. The good news is there’s always someone to help with the installation and once up it’s nearly bulletproof, but there’s no denying there is room for improvement in several areas.

Now we can add two more systems to our arsenal, each specializing in one of the two strategies.

The Pirate Party has taken an industrial approach with their commercial hiding service. For a fee they will give you a dedicated pipe that layers another Internet Protocol (IP) address, from Sweden as it happens, on top of the one you already have. This way when you’re sending files, which is where you’re vulnerable, the content cops won’t see your real IP address, the one they’d use to track you down; they’ll see instead an IP from another country, one whose laws may be less strict than yours. The idea here is that the Swedes may be more able to turn back subpoenas, or even better, that the statute you may have violated at home won’t apply at all. As with any such service, much depends on the details, in particular the record keeping practices of the quasi-darknet or annonymising service itself (no records mean no searches) and the aggressiveness of local officials applying pressure on behalf of the companies or governments bringing action against you by proxy. So far at least Sweden’s track record leaves a lot to be desired. They rolled right over when Hollywood called, confiscating servers belonging to not only the world’s largest BitTorrent site, but also to banks, unrelated groups having nothing to do with file-sharing and even normally untouchable political parties, then refused to give them back until their legally ambiguous forensic examinations were complete. Caveat Emptor applies.

In something of a twist on the standard encryption scheme an open source American group has released what it cheerfully calls the world’s first "Brightnet." The "Owner-Free Filing" system (OFF) uses mathematical legerdemain to shape content that like Schrodinger's cat exists in multiple simultaneous states until one actually perceives it, at which time it instantly becomes a Britney Spears song, a tasty potato salad recipe or the U.S. Bill of Rights. The theory here is that if the file can be anything, it can be legally nothing, at least as far as copyright violations go, and so can remain safely visible to any and all. You can’t lose a suit to Britney if as far as you’re concerned (and can demonstrate) all you’re hosting is the annual girl scout picnic menu, regardless if other people hear Do It To Me One More Time every other time they peruse the file. It’s a great idea if it works and the courts buy it but in truth all digital content is nothing but meaningless ones and zeros until your intent is determined in the form of the organizational software you use to tease order out of chaos, and this hasn’t prevented judges from going about their business. Caveat Emptor applies here as well.

In the constant back and forth between cleverly ambitious users and an equally determined state, the state will always have the leverage, if only for the severe degree of punishment it can deliver. This isn’t to say its power is absolute. The easy availability of contraband in its various state-defined forms puts lie to that, but its power if limited nonetheless overwhelms. I for one appreciate a little looseness in a society, particularly when it comes to victimless crimes, and my definition of victimless is probably a little looser than many. It is a fact however that for us to win this battle we will have to redefine at the level of the state what it means to be a private person and what it means to forge law. That the courts this week found the President’s mass-wiretapping program unconstitutional is a lucky break for its citizens, and while I’ll take it whenever I can luck like a clever program - or a judge’s whim - is something we shouldn’t have to depend on. We must instead enshrine the right to share, and the right to be safe, secure and private in our persons, our papers and our files, and put that leverage back into those hands where it has always belonged. Ours.



August 19th, '06

Teenagers Don’t Think Copying CDs Is A Crime

The majority of young people — even those who refuse to download pirated media — see nothing wrong with making a copy of a CD or DVD to share with friends.

A new poll by the Los Angeles Times and Bloomberg News found that among teens ages 12 to 17, 69 percent said they believed it was legal to copy a CD from a friend who purchased the original.

By contrast, only 21 percent said it was legal to copy a CD if the friend got the content for free. Similarly, 58 percent thought it was legal to copy a friend’s purchased DVD or videotape, but only 19 percent thought copying was legal if the movie wasn’t purchased.

The survey results angered the Recording Industry Association of America and the Motion Picture Association of America. Both contend such sharing — they call it “schoolyard piracy” — is illegal and now a greater threat than peer-to-peer downloading.

Evan Collins, 15, expressed his view of the issue: “I think you’re allowed to make, like, two or three copies of a CD you bought and give them to friends,” Collins told the LA Times. “It’s only once you make five copies, or copy a CD of stolen music, that it’s illegal.”

Attorneys told the newspaper that copying a purchased CD for even a single friend can violate federal copyright law. However, the poll found Collins’ attitude pervasive among young people.

Even lawyers admitted the laws are confusing. Distributing free copies of a purchased CD or DVD is only a federal copyright crime if the value of the copied discs exceeds $1,000, Assistant U.S. Attorney Elena Duarte told the Times.

However, giving away even one copied CD or DVD may be a civil violation or break a state law, depending on where the act takes place.

The issue is at the center of huge battle between content owners and copyright activists. To date, courts have generally avoided staking out legal policy on the appropriateness of copying CDs for friends or how many friends constitutes a copyright violation.

However, the personal sharing of favorite media is a long tradition that’s ingrained in American culture. Some argue that such activity is what created the value of the media in the first place.

Sweden’s Pirate Party Partners with Commercial Provider to Offer "Anonymous File Sharing"
Press Release

Today, the Swedish Pirate Party launched a new Internet service that lets anybody send and receive files and information over the Internet without fear of being monitored or logged. In technical terms, such a network is called a "darknet". The service allows people to use an untraceable address in the darknet, where they cannot be personally identified.

"There are many legitimate reasons to want to be completely anonymous on the Internet," says Rickard Falkvinge, chairman of the Pirate Party. "If the government can check everything each citizen does, nobody can keep the government in check. The right to exchange information in private is fundamental to the democratic society. Without a safe and convenient way of accessing the Internet anonymously, this right is rendered null and void."

File sharing of music, films, and other forms of culture is where the surveillance of Internet addresses has attracted the most attention, largely because the entertainment industry has been so aggressive in suing Internet users for copyright infringement, suing college students and single mothers alike without concern.

"But there are much more fundamental values at stake here than copyright," Rickard Falkvinge says. "The new technology has brought society to a crossroads. The only way to enforce today's unbalanced copyright laws is to monitor all private communications over the Internet. Today's copyright regime cannot coexist with an open society that guarantees the right to private communication."

"Until we have changed the laws to ensure that citizens' right to privacy is respected, we have a moral obligation to protect the citizens from the effects of the current routine surveillance," Falkvinge continues. "This is our technical means to do just that."

The service is provided by the Swedish high-tech company Relakks, which offers a neutral IP on top of your existing ISP service through a strongly encrypted VPN connection. Basically, this gives users the advantage of a Swedish IP address from anywhere in the world.

The cost of the service is 5 euros per month, and it is available now at www.relakks.com. A portion of the subscription fees will go towards the Pirate Party's work in changing the copyright and privacy laws and making the service obsolete.

About the Pirate Party:
The Pirate Party is Sweden's largest political party outside Parliament. It was founded in January, 2006, and is running for office in this fall's general elections. The party only has three issues on its agenda: shared culture, free knowledge, and protected privacy.

About Relakks:
Relakks provides services to help individuals to assure the security and integrity of their information. Relakks' responsibility stems from the strong Swedish tradition of protecting the integrity of private life and all forms of communication between individuals. Relakks - broadband Swedish style

(This is a static page with the press release. We got Dugg pretty hard yesterday and Slashdot just turned up. Welcome! You're late. :-)
Our regular page can be found at www.piratpartiet.se and you can read more and sign up for the Relakks service at www.relakks.com.
One question we get is if this works in the US. Yes, it does. The payment service appears to accept Euros only, but there will be an automatic currency conversion (which your issuing bank may charge you a small fee for) so the amount deducted will be in the vicinity of $6.4USD for a month.)

http://www2.piratpartiet.se/nyheter/...ial_ darknet/

OFF System Development

Have Nothing. Pwn Everything.

Brightnets vs. Darknets

The Owner-Free Filing system has often been described as the first brightnet; A distributed system where no one breaks the law, so no one need hide in the dark.

OFF is a highly connected peer-to-peer distributed file system. The unique feature of this system is that it stores all of its internal data in a multi-use randomized block format. In other words there is not a one to one mapping between a stored block and its use in a retrieved file. Each stored block is simultaneously used as a part of many different files. Individually, however, each block is nothing but arbitrary digital white noise.

Owner-Free refers both to the fact that nobody owns the system as a whole and nobody can own any of the data blocks stored in the system. The latter claim is explained below and supported in the linked works.

Owner-less Data

It seems highly unlikely to most people that the same exact data can be used to represent several things at once. But indeed, the same digital representation can be, “both a floor wax and a dessert topping.”

The misperception is simply a relic of computer metaphors that obfuscate an important reality of the digital world. Traditional rules do not apply. Mathematics is the only law.

Curiously, mathematics says:

1. There are an infinite numbers of ways to digitally represent any given work.
2. Every digital representation can be used to perceive as an infinite number of works.

The OFF System simply chooses one of the infinite ways that is non-copyrightable. There must be at least one, or else every possible digital representation would already be copyrighted. It just so happens that the same representation is already being used for other things.

A simple description of the process is available on this site. http://offsystem.sourceforge.net/wordpress/?page_id=4 A more extensive treatment is done in the paper, “On copyrightable numbers with an application to the Gesetzklageproblem” http://offsystem.info/CopyNumbCJ.pdf


No creative works, copyrighted or not, are ever communicated between OFF peers. Only meaningless blocks of random data. No tangible copies of creative works are ever stored on OFF peers. It is completely unnecessary.

All retrieval of creative works is done exclusively on the users local machine. More importantly, no copies of a creative work ever NEED to be made. All works can be accessed in-place and on-demand by locally resident software in the same way that traditional file servers are used.

All storage of creative works is done exclusively on the users local machine. Uniquely, only a single virtual copy of the creative work is made directly into OFF virtual file system. That is all that is EVER needed. As with a traditional file server, that single copy is completely private. It is accessible only through the URL possessed by person who stored the work. Again this appears legally equivalent to making a single copy to your personal disk or server.

Should the person who stored the work want to allow access to others, he simply gives them the URL. The receiver can then access the work in-place without needing to make a copy. This is identical to the way that iTunes allows friends to play each others music via streaming without copying.

We call the OFF System a “Brightnet”. No secrecy is needed as nothing shady is going on.


Footnote: This work builds on previous technology pioneered by David Madore in his paper, “Method of free speech on the Internet: random pads”

Federal Judge Rules Warrantless Wiretapping Surveillance Program Unconstitutional
Sarah Karush

A federal judge ruled Thursday that the U.S. government's warrantless domestic eavesdropping program is unconstitutional and ordered an immediate halt to it.

U.S. District Judge Anna Diggs Taylor in Detroit became the first judge to strike down the National Security Agency's program, which she says violates the rights to free speech and privacy as well as the separation of powers enshrined in the Constitution.

"Plaintiffs have prevailed, and the public interest is clear, in this matter. It is the upholding of our Constitution," Taylor wrote in her 43-page opinion.

The American Civil Liberties Union filed the lawsuit on behalf of journalists, scholars and lawyers who say the program has made it difficult for them to do their jobs. They believe many of their overseas contacts are likely targets of the program, which involves secretly listening to conversations between people in the United States and people in other countries.

The government argued that the program is well within the president's authority, but said proving that would require revealing state secrets.

The ACLU said the state-secrets argument was irrelevant because the Bush administration had already publicly revealed enough information about the program for Taylor to rule on the case.

"By holding that even the president is not above the law, the court has done its duty," said Ann Beeson, the ACLU's associate legal director and the lead attorney for the plaintiffs.

The NSA had no immediate comment on the ruling.

Taylor dismissed a separate claim by the ACLU over data-mining of phone records by the NSA. She said not enough had been publicly revealed about that program to support the claim and further litigation could jeopardize state secrets.

iMesh Releases Legal BearShare
Carly Mayberry

iMesh is set to unveil on Thursday the latest version of BearShare, its recently acquired fellow peer-to-peer network.

The new and legal service, BearShare 6.0, will continue to offer the traditional benefits of a P2P file-sharing experience but with additional features, iMesh executive chairman Robert Summer said. Among these are a "ToGo" portable music-subscription service and social networking capabilities.

Subscriptions will be free for the next 30 days, after which the service will introduce an as-yet-undetermined monthly fee.

"Ours is a unique offering that addresses that massive audience of free music downloaders that the industry is trying to bring to heel," Summer said.

The existing iMesh service, which went live a year ago, will not be affected by the launch of BearShare 6.0. The two services will co-exist, and sometime this year members of each will be able to interact with members of the other service.

Both BearShare ToGo and iMeshToGo services can be used with most MP3 players and all Plays for Sure portable devices. They are not compatible with Apple Computer's iPods because those market-leading devices do not support subscription services.

Summer said BearShare 6.0 features include instant messaging, the ability to make playlists and manage music collections, advanced search capabilities and significantly improved music discovery tools. A special feature called BearShare People encourages users to express their identity by sharing their musical preferences with other users. The service also keeps a record of purchases and offers ringtones.

"In building in these features that were not fully present in our initial launch, we now have an entirely stable site," Summer said. "It's our expectation that it's going to be exponentially effective in causing free users to become buyers."

The available library consists of 15 million music tracks, among them 2.5 million songs licensed from the major labels.

Founded in 1999, the MusicLab subsidiary iMesh is one of the original P2P services to transition to a commercial model that guarantees payment to its copyright holders.

Dell to Recall 4 Million Batteries
Michael Kanellos

Dell and the U.S. Consumer Product Safety Commission plan to recall 4.1 million notebook batteries on Tuesday, a company representative confirmed Monday.

The recall affects certain Inspiron, Latitude and Precision mobile workstations and XPS units shipped between April 2004 and July 18, 2006. Sony manufactured the batteries that are being recalled, the representative said.

If they have one of the affected units, consumers are advised to eject the battery from the notebook after powering down and continue using the notebook with its AC power adapter, the CPSC said. Dell has so far received six reports of overheating units that caused property damage, but no injuries.

Dell has faced several issues this year related to exploding or flaming notebooks, and wants to ensure the safety of its customers, the representative said. The 4.1 million units is a subset of the 22 million units shipped during that time frame, he said. Dell said it doesn't expect the cost of the recall to materially affect its earnings. The company reports earnings for the previous quarter this Thursday.

At the moment, this looks like the largest battery recall in the history of the electronics industry, said Roger Kay, an analyst with Endpoint Technologies Associates. "The scale of it is phenomenal."

Customers will be able to go to a Dell Web site (http://www.dellbatteryprogram.com) to determine if they need a new battery. The Web site is expected to go live tomorrow. Dell also plans to launch a toll-free number, 1-866-342-0011, for people affected by the situation, IDC analyst Richard Shim said.
Models in the hot seat

Dell plans to announce a recall of 4.1 million batteries worldwide on Tuesday. Here's a list of the affected models.
D410, D500, D505, D510, D520, D600, D610, D620, D800, D810
6000, 8500, 8600, 9100, 9200, 9300, 500m, 510m, 600m, 6400, E1505, 700m, 710m, 9400, E1705
Dell Precision
M20, M60, M70 and M90 mobile workstations
XPS, XPS Gen2, XPS M170 and XPS M1710

Source: Consumer Product Safety Commission

"It's a huge deal," Shim said, particularly for Dell customers with employees in remote locations or traveling. "If you have people all over the field, then you're asking folks to send in the batteries and run off just AC (alternating current power) until they can get new batteries shipped out to them."

Dell had only six incidents over millions of units, Shim said, but it's "a dangerous situation."

Lithium ion batteries have two to three times the energy density of nickel-cadmium and nickel-metal hydride batteries and four times the energy density of lead-acid batteries. Higher energy density translates to longer battery life. Lithium ion batteries are used in consumer electronics and notebooks, which only require a limited amount of energy. Hybrid cars and power tools, however, generally use more traditional batteries, in part because of the risk of explosion.

What causes the problem?

The problems Dell is having stem from impurities within the anode and cathode of the battery, said Kay, who was briefed on the problems by Dell executives. Over time, those impurities, usually tiny pieces of metal, can work their way to the edge of the anode or cathode and rupture the isolator that sits between the two, he said. Once that happens, you get a short circuit and possibly a fire.

In cell phones, lithium ion batteries can overheat because of a short circuit. If the temperature rises slowly, the battery case may melt. If it rises rapidly, however, enough pressure may be generated to create a small explosion in a lithium ion battery. Consumers have suffered severe burns as a result of these failures. The chemical reaction that produces energy in a lithium-ion battery is considered quite violent.

Several companies, including Valence Technology and PowerGenix, are working on safer lithium ion batteries or batteries which rely on different chemicals.

"The timing of this does buy Dell goodwill with customers and potential customers," said Sam Bhavnani, an analyst with Current Analysis. The first pictures of exploding laptops were posted in June, and the company has moved fairly quickly to investigate whether or not the problems were isolated or more widespread, he said.

It's possible that other PC vendors are using the Sony batteries in their products, Kay said. Dell executives told Kay that the company was one of the first to begin using this type of battery, and that they think other problems will crop up down the road for other PC companies.

But even if two companies use the same batteries, they don't necessarily design the technology that connects the battery to the notebook in the same way, Kay said. For example, Lenovo's notebooks use software that's designed to shut down the battery if it notices a problem and they charge the batteries more slowly than others in the industry, a company representative said. A Dell representative was unable to comment on the specifc technology it uses to enclose its batteries.

A Lenovo representative said the company has not seen an unusual pattern of problems with its notebook batteries, although no PC company is immune to battery issues from time to time. Lynn Fox, an Apple Computer spokeswoman, said, "We are currently investigating whether batteries that have been supplied to Apple for our current and previous notebook lines meet our high standards for battery safety and performance." Representatives for Hewlett-Packard and Gateway were not immediately available to comment.

CNET News.com's Stephen Shankland contributed to this report.

Agency Reviewing All Sony Laptop Batteries
Philipp Gollner

Consumer safety officials said on Tuesday they are reviewing all Sony-made lithium-ion batteries in laptop computers for fire hazards after Dell Inc. <DELL.O> announced the largest electronics recall in the United States.

Dell, the No. 1 maker of personal computers, on Monday said it is recalling 4.1 million notebook batteries made by Sony Corp. <6758.T> because they could overheat and catch fire. A battery of the type involved in the recall was in a Dell laptop that erupted in flames in Japan earlier this year.

The Sony batteries are also used in laptops from Hewlett-Packard Co. <HPQ.N>, Apple Computer Inc. <AAPL.O> and Lenovo Group Ltd. <0992.HK>.

"We are looking at the complete scope of the batteries made by Sony to ensure that no other consumers are in harm's way," U.S. Consumer Product Safety Commission spokesman Scott Wolfson said. "We recognize that the batteries manufactured by Sony are not unique to just the Dell notebook computers."

Such batteries are also used in a wide array of gadgets including cellphones, digital cameras, camcorders and music players, and Wolfson added that the safety commission is encouraging companies and consumers to report potential defects in other devices using the battery cells but the focus for now was on laptops.

Dell's recall covers Sony laptop batteries sold from April 2004 through July 18 of this year, including 2.7 million units in the United States.

While no injuries have been tied to these products, Dell said it has received six reports of batteries overheating since December, causing damage to furniture and other items.

"It's probably not Dell-specific," said the president of market researcher Endpoint Technologies Associates, Roger Kay. "If they have the Sony cell, specifically the cell made between April 2004 and June 2006, they have the problem."

He estimated the recall could cost $200 million to $300 million, depending on how many customers participate.

Dell said it expected no "material" financial impact from the recall, while Sony said its cost from the recall has not yet been determined.

A Sony spokesman in Tokyo said on Tuesday the overheating problem is believed to be specific to batteries supplied to Dell, but recall decisions are up to each maker.

Hewlett-Packard, the world's No. 2 PC maker, said it was not affected by recall. "It's a Dell issue," spokesman Ryan Donovan said.

Apple Computer Inc. <AAPL.O> on Monday said it was looking into the matter.

A spokesman for Lenovo Group Ltd. <0992.HK>, the third-largest PC maker by market share, said the company was not recalling any batteries "at this time."

"While no make or model of battery is 100 percent immune from failures or overheating, to date we have not seen any unusual pattern of problems in our notebooks," said the spokesman, Bob Page.

Dell may pay a bigger cost in lost customers as its image takes a beating, Cindy Shaw, an analyst at Moors & Cabot Capital Markets, said in a research note.

"We also believe recall news could sway consumer purchase decisions away from Dell as back-to-school season gets under way ahead of the important holiday season," wrote Shaw, who has a "sell" rating on Dell shares.

The recall comes as Dell is investing $100 million and hiring 2,000 people this year to improve customer service after it was hit with complaints of inferior after-sales service.

Dell said consumers who bought its notebooks in the recall period should remove the batteries and contact Dell for a replacement. Customers can continue using an AC adapter and power cord with the computers, Dell said.

Microsoft Patch Can Cause IE Trouble
Joris Evers

Microsoft's security update from Aug. 8 to Internet Explorer is causing browser trouble for some systems.

After people apply the MS06-042 update, rated "critical" by Microsoft, IE may crash when certain Web sites are viewed, the company said in a notice on its customer support Web site. The problem affects IE 6 with Service Pack 1 on Windows XP and Windows 2000 systems, it said.

"Microsoft has identified an issue with the security update MS06-042," the company said in a statement Tuesday. It plans to re-release the bulletin and patch on Aug. 22 for all affected users.

The problem occurs when IE users view Web sites that use version 1.1 of HTTP alongside compression, according to Microsoft's notice. HTTP, or hypertext transfer protocol, is the standard protocol used to browse Web sites.

IE users on security mailing lists have reported browser crashes when using PeopleSoft applications that have Web-based interfaces. Others report running into problems when using other applications, including Microsoft's own customer relationship management, or CRM, tools.

"We are running PeopleSoft for administration systems, and our Windows 2000 SP4 and Windows XP SP1 running Internet Explorer 6.0 SP1 crash when they got into the PeopleSoft pages," Fred Dunn, a systems administrator at the University of Texas Health Science Center at San Antonio, said in an e-mail interview.

Dunn called Microsoft's product support service, which recommended disabling the use of HTTP 1.1 in IE's advanced settings menu. However, that's not a change that's easily done on all PCs in the university, Dunn said. "Our only workaround was to get the PeopleSoft programmers to turn off compression...which slows down the response," he said.

MS06-042 is an update for IE that addresses eight vulnerabilities in the popular browser. It is one of a dozen security updates that Microsoft released last week on Patch Tuesday.

Patches have caused trouble at times, on occasion prompting Microsoft to fix already released updates. In April, it released a second version of a Windows Explorer update because the original interfered with Hewlett-Packard software and Nvidia drivers. In June, it had to fix a patch that caused network connection trouble for some people.

Microsoft has a temporary fix available for the problems caused by MS06-042. However, this fix is not available for download; people have to call Microsoft's support line.

Banned Musician, Aged 12, Lays Siege to BPI HQ
Miffed miss is up in arms

12 YEAR-OLD singer-songwriter Amy Thomas staged a protest outside the headquarters of the British music industry yesterday, following a decision to ban her from a new school kids' music chart because of her views on downloading.

Amy and a "flash mob" of 50 children gathered outside of the office of the British Phonographic Industry (BPI) for 15 minutes holding balloons with messages of support for the young singer.

Amy had been chosen as one of ten young artists to feature on the My Music chart that launches in October across 1,400 UK schools.

But her inclusion was blocked by the BPI after its snoops discovered she is signed to Flowerburger Records, an independent record label which is running an online petition drumming up oposition to the BPI's policy of suing music fans who use p2p websites.

Amy gained a following of schoolies after posting details of her plight on kids' networking site Bebo. Its members are now encouraging each other to boycott the My Music chart in favour of Amy’s debut single, Just Smile, which is released the same week as the schools’ chart.

Holding a balloon with 'Just Smile' emblazoned across it, the publicity-seeking youngster said of the practice of downloading songs from P2P sites: "All my friends do it. It just seems like the natural thing to do."

Digitizing Video Signals Might Violate the DMCA
Nate Anderson

Could it become illegal to digitize analog signals? The District Court for the Southern District of New York has come perilously close to saying yes.

It started with a lawsuit. In June of 2005, Macrovision sued Sima Products under section 1210 of the DMCA, claiming that Sima's video processors provided an easy way to circumvent Macrovision's analog copy protection (ACP). Macrovision's best-known form of copy protection inserts noise into the vertical blanking interval found in analog video signals, like those from DVD players and VCRs. This noise is not displayed on a television set, but it does throw off the automatic gain control used by most VCRs, making recording difficult. Sima's products simply convert the analog signal to digital, which eliminates the noise in the blanking interval, then processes the signal and converts it back to analog. Presto—no more copy protection.

Macrovision objected to the devices, which remove its copy protection from both VCR and DVD signals, making it simple for a user to copy movies (though only in analog format). Earlier this year, the Court agreed and issued a preliminary injunction against Sima, which was upheld in June.

The Consumer Electronics Association, concerned about the precedent that the move could set, denounced the ruling. President Gary Shapiro said, "Consumers should be outraged by today's decision. The devices Sima Products manufactures simply allow consumers to use digital techniques to make up for viewing artifacts in analog material—some from age or distortion, and some caused as a result of the use of distortive copy protection techniques. The legislative history of the 1998 Digital Millennium Copyright Act (DMCA) is clear that passive analog measures that distort video signals are not 'technical protection measures.'"

Now the injunction is being considered by the Court of Appeals for the Federal Circuit, and an amicus brief has been filed in support of Sima by the American Library Association, the Consumer Electronics Association, the Home Recording Rights Coalition, and the Electronic Frontier Foundation, among others.

The brief makes the point that Congress has already addressed this issue quite explicitly in Section 1201(k) of the copyright code, which prevents analog VCR manufacturers from ignoring automatic gain control copy protection. The coalition notes that this only applies to analog products, and they quote Senator Orrin Hatch's comments to the same effect.

But the main argument is that ACP is not a technological measure that "effectively protects a right of the copyright owner" because ACP does not actually prevent making copies at all. It simply makes it difficult to get good copies. Furthermore, ACP is really a "flag," not a "measure," since it can be either read or ignored without problems. Finally, it is not an effective protection measure because it does nothing to stop digital copying (digital video signals do not require blanking intervals, so digital copies simply do not use the information in the blanking interval at all),

The brief also argues that Sima is not "circumventing" anything—the stripping of the ACP is just a necessary byproduct of digital conversion. "Circumventing" suggests a much more active process.

The case is a long way from a resolution, but it's an interesting one to watch. As the EFF puts it, "If Macrovision wins, digital video innovators will be stuck carrying the albatross of Macrovision's analog noise for years to come." We all know what happens to those who carry an albatross for too long—they start crashing weddings and regaling guests with stories about life at sea. And nobody wants more of that.

Movie Download Service Sued Over Spyware
Robert McMillan

The state of Washington has sued the owners of the Movieland.com, alleging that the company used spyware to strong-arm users into signing up for its paid movie download service.

Consumers who dowloaded Movieland.com's free three-day trial software would eventually be hit with frequent pop-up ads informing them that they were legally obliged to purchase the product, said Paula Selis, an assistant attorney general with the state. The tactics forced some consumers to give in and pay between $20 and $100 for the service, she said.

Washington State, and other organizations like the U.S. Federal Trade Commission and the Better Business Bureau have received thousands of consumer complaints about Movieland.com, dating back to the end of 2005, Selis added.

"We sued them because we were getting complaints from consumers who felt that they were being harassed and held over a barrel for payments that they didn't agree to make," she said.

Company, Two Officials Named

The suit was filed yesterday in King County Superior Court in Seattle. It charges Movieland.com's parent company, Digital Enterprises, of West Hills, California, with violating the state's antispyware and consumer protection laws. Two company officials are also named in the suit: Easton Herd, and Andrew Garroni, both of Los Angeles.

Garroni and Herd's companies operated a number of video download services, including Moviepass.tv and Popcorn.net, the Washington Attorney General's office said.

Though the company's free trial software does advise users that they will be obliged to purchase a monthly license if they do not cancel, this notice does not sufficiently explain what will happen if the software is installed, Selis said.

Movieland.com's Web site offers downloads saying, "No Spyware," "Virus Free," and "No Extra Charge."

The company did not return a call seeking comment for this story.

Movieland.com is the second company to be sued under Washington's 2005 Computer Spyware Act. In January the Attorney General's office sued Secure Computer of White Plains, New York, alleging that its Spyware Cleaner software failed to work as advertised. That litigation is ongoing, Selis said.

Altnet Hits StreamCast With Law Suit
Simon Hayes

MORPHEUS creator StreamCast Networks is facing yet another legal battle, with Australian-run software developer Altnet launching action over patent violation allegations.

Altnet, run by Australian expat entrepreneur Kevin Bermiester, filed action in the US District Court in Los Angeles today alleging StreamCast violated patents on a file identification technology it owns.

StreamCast is already battling the recording industry in a major music piracy case, and has launched a "RICO" (Racketeer Influenced and Corrupt Organisations) action against 21 well-known brands.

The patent suit alleges the company and its chief executive Michael Weiss violated three patents Altnet covering Altnet's TrueNames technology.

TrueNames generates unique numbers to identify music, video and text files on peer-to-peer networks.

The technology is used by file-sharing network Kazaa and is the basis of a recently-launched anti-piracy tool, Global File Registry, which Altnet is hoping will be adopted by major record companies to help them license music for distribution online.

"This technology underpins the business of Altnet, but just as importantly it is future-proof technology for a variety of peer-to-peer industries," said Altnet enforcement programs manager Michael Speck.

Comment was being sought from Streamcast.
http://australianit.news.com.au/arti...m=public _rss

TorrentSpy Users Beware - Something Fishy's Going On

TorrentSpy seems to have a suspicious amount of similar torrents for the PC game "Prey". A search for the game pulls 131 results. All of which have similar amounts of seeders. All of them posted anonymously. All of them having slightly varying titles. Anyone in the torrent scene should spot this. Be careful downloading.. it could be a trap.

EMI to Preload Music Videos on Microsoft's Zune
Yinka Adegoke

EMI Group Plc, the world's third-largest music company, said on Thursday it had signed a deal to provide preloaded music videos on Microsoft Corp.'s soon-to-launch Zune digital media player.

The London-based company said the deal would see artists, including American actor Jared Leto's alternative rock band 30 Seconds To Mars and English electro-pop band Hot Chip, featured on the player when it goes to market later this year.

The news dispels speculation in media reports this month that Microsoft would have to delay the introduction of Zune's video capability until after its launch, which is expected to be in time for the year-end holiday season.

Sources at record labels, who have seen the new player, say its wireless capability and a feature that allows some sharing of music between users are what differentiates Zune from Apple Computer Inc.'s market-leading iPod.

"Apple has been an important partner in building the digital music market but any well-funded serious entrant has got to be good news for the artists and industry," Jeff Kempler, executive vice president of EMI unit Virgin Records America, told Reuters.

The iPod has more than half of the digital media player market, according to research company NPD, while Apple's iTunes online music download service has a market share of more than 70 percent of U.S. digital music sales.

Microsoft, which was not immediately available for comment on Thursday, announced plans for Zune last month, in a move seen by industry analysts as a belated attempt to challenge Apple's dominance in both digital audio and video downloads.

EMI said it believes its artists' videos will be preloaded alongside those from other record companies, but declined to discuss the device in detail.

Universal Music, owned by France's Vivendi, said it is in discussions with Microsoft on Zune but would not give any details. Warner Music Group Corp. and SonyBMG Music could not be immediately reached for comment.

Terabyte Drive To Debut Later This Year
Michael Kanellos

If there's a storage fanatic in your family, a perfect gift could be coming for her or him toward the end of the year: 1-terabyte hard drives. Desktop hard drives holding 1 terabyte, or 1,000 gigabytes, of storage will likely be announced in 2006, said Bill Healy, senior vice president of product strategy and marketing at Hitachi Global Storage Technologies. These drives, which will have a 3.5-inch diameter, are expected to be incorporated into PCs and home servers. Healy wouldn’t say what companies would announce first. Sources at Seagate, however, said Seagate plans to come out with 1TB 3.5-inch drives by late 2006 or early 2007.

It's not that big of a stretch for some hard drive makers. Hitachi already sells a 500GB drive, while rival Seagate Technology started shipping a 750GB drive to desktop makers in April. Seagate also sells a home storage device with two 500GB drives to make up 1 terabyte. Drive density effectively doubles every two years and increases steadily over the two-year period; hence, a terabyte drive is on the horizon, Healy said.

Granted, few people really need 1 terabyte of storage. But it sounds cool--sort of like you could be running a ballistic missile tracking site in your den. Besides, humans continue to show that they can come up with ways to gobble up hard drive space. High-definition video is expected to greatly expand the need for storage.

These large drives also will get incorporated into televisions and personal video recorders. Hitachi, among others, already sells TVs with integrated hard drives in Japan and other markets.

While large drives start out expensive, the price drops relatively quickly. Computer makers pay something in the 30-cent range for a gigabyte when buying hard drives, Healy said. The price at retail is around 50 cents or less.

Happy birthday, hard drive

On Sept. 13, the hard drive will turn 50. Hitachi and others will be on hand to celebrate the achievement at the Computer History Museum.

It has been a wild half century. The first magnetic drive, the RAMAC created by IBM, weighed a ton and could hold 5MB of data on 50 24-inch circumference platters. Now people can get a one-inch drive that can be held in your hand that holds more than that.

"Twenty years from now, we could (potentially) squeeze a terabyte onto a one-inch drive," Healy said.

Satellite TV Providers Exit FCC Auction
Marguerite Reardon

Satellite TV providers DirecTV Group and EchoStar Communications on Wednesday pulled out of the Federal Communications Commission auction for licenses to deliver advanced wireless services.

The joint venture formed by the two companies, called Wireless DBS, was expected to be one of the hungriest bidders putting up $972.5 million for the auction. But early this week, Wireless DBS began scaling back its bids. Eventually, it withdrew altogether.

Roger Entner, a telecommunications analyst at Ovum Research, believes the price of the licenses was too steep for the satellite companies to swallow.

"When the bulls start fighting, the calves get hurt," he said. "In the first few rounds, when it didn't matter much, the satellite guys were king of the hill. But the moment they got out of the sandbox and into the larger playground, they were sent out financially."

Robert Mercer, a spokesman for DirecTV, declined to comment. EchoStar spokeswoman Kathie Gonzalez confirmed Wireless DBS had stopped bidding, but declined to comment.

Analysts speculated that the satellite TV providers were interested in the spectrum, which falls between 1.7GHz and 2.1GHz, so they could use the airwaves to build a wireless broadband network. Using a technology called WiMax, they could have provided a broadband service offering downloads between 2mbps and 4mbps.

Satellite TV companies, such as EchoStar and DirecTV, are fighting for survival as they face tougher competition from cable operators and now telephone companies, which are selling consumers bundles of services that include high-speed Internet access, telephony and TV service. Currently, satellite only offers TV service. EchoStar and DirecTV have separately partnered with phone companies Verizon Communications and AT&T. But as the phone companies roll out their own TV services, the relationship with satellite operators will likely fade.

For now, dreams of owning their own broadband network will have to wait. The satellite operators could bid on the 700MHz spectrum that will come up for auction by the FCC in 2008, but Entner said it's unlikely the satellite companies could afford this spectrum.

"If EchoStar and DirecTV thought the current spectrum was too expensive in this auction, wait until the 700MHz spectrum auction," he said. "The 700MHz spectrum is better-quality. It can penetrate walls better and propagate over longer distances."

The FCC had expected to raise up to $15 billion during the auction. So far, the sale of 1,122 licenses has raised almost $9.8 billion in 19 rounds of bidding.

T-Mobile and Verizon Wireless lead the bidding. T-Mobile, owned by Deutsche Telekom, is the fourth largest cell phone company in the U.S., and it has the least amount of spectrum. The company was expected to bid aggressively for licenses, so it can build a next-generation mobile network to compete against its rivals, Cingular Wireless, Sprint Nextel and Verizon Wireless.

The auction for the spectrum will continue until bidding stops, which means it could last for several more weeks.

FCC Probes 'Fake News' At U.S. TV Stations
CBC Arts

The U.S. Federal Communications Commission has begun an investigation of the use of video news releases, sometimes called "fake news," at U.S. television stations.

Video news releases are packaged stories paid for by businesses or interest groups. They use actors to portray reporters and use the same format as television news stories.

The FCC has mailed letters to at least 42 stations asking station managers about agreements between the station and the creators of the video news releases.

The action follows an April report on fake TV news by two media watchdog groups, the Center for Media Democracy in Wisconsin and Free Press in Northampton, Maryland. They recorded incidents where video news releases had been used at 77 stations in a study titled Fake TV News: Widespread and Undisclosed.

Of particular concern to the watchdogs were instances where the fake news items had run without informing viewers that they had been created by an outside group.

FCC rules demand that stations disclose "the nature, source and sponsorship of the material they are viewing" in video news releases.

"The public is misled by individuals who present themselves to be independent unbiased experts or reporters, but are actually shills promoting a prepackaged corporate agenda," FCC Commissioner Jonathan Adelstein said in a statement.

The FCC has asked stations whether any "consideration" was given to them in return for airing the material.

"You can't tell anymore the difference between what's propaganda and what's news," Adelstein said.

Among the video news releases uncovered were an item on ethanol plants aired on a Louisiana station that was created by a public relations firm on behalf of Siemens AG, a corporation with a financial stake in the construction of ethanol plants.

In another case, a Boston station edited and re-voiced a video segment produced by an outside company on behalf of Toshiba, Fisher-Price and Scholastic, whose kids' products were featured in it.

The item ran at Christmas, without any indication to viewers it had been created as a news release.

Diane Farsetta, senior researcher with the Center for Media and Democracy and co-author of the study, said stations did not appear to have been paid for airing the stories.

Instead, they aired them because they are free and fill air time.

"The main reason is economy. These are free stories that are given to stations that are continually under-resourced," she said.

The media watchdog group is recommending the FCC fine stations who have violated the rules. The federal regulator can levy fines of up to $32,500 US per violation.

The FCC has given the stations 60 days to respond to its letters.

Save the crank!

Thai Kids to Get Low-Cost Laptops

The ambitious project to provide low-cost laptop computers to poor children around the world is about to take a small step forward. More than 500 children in Thailand are expected to receive the machines in October and November for quality testing and debugging.

The One Laptop Per Child program, which began at the Massachusetts Institute of Technology's Media Lab and now is a separate nonprofit organization, hopes to deploy 5 million to 7 million machines in Thailand, Nigeria, Brazil and Argentina in 2007.

Thailand's government is expected to buy 1 million in the first year.

But Prime Minister Thaksin Shinawatra announced in a nationwide radio broadcast that "if this project is completed" it would reach all Thai elementary students. He said each student would get a free computer "instead of books, because books will be found and can be read on computers."

The creator of the laptop program, Nicholas Negroponte, has set a goal of making the laptops for about $100 each, though he expects the initial figure to be slightly higher and the long-term cost slightly lower.

The machines will use the free Linux operating system, include flash memory instead of a hard drive and run on electricity created by a hand or foot pump.

China and Egypt have also expressed interest, but at least one country initially expected to take part, India, has decided not to be in the first round.

Walter Bender, a Media Lab founder who serves as One Laptop Per Child's president of software and content, said the organization still is talking with Indian officials and non-governmental agencies.

"While India will not be part of the year-one launch, with 25 percent of the world's children, it is within our mission to work with India down the road," Bender said in an e-mail this week.

Indian Village Uploads Itself Onto Internet
Jonathan Allen

An Indian village has uploaded itself onto the Internet, giving the outside world a glimpse of life in rural India.

Visitors to Hansdehar village's Web site (www.smartvillages.org) can see the names, jobs and other details of its 1,753 residents, browse photographs of their shops and read detailed specifications about their drainage and electricity facilities.

Most of the residents can't yet surf the Hansdehar Web site as the village is not yet connected to the Internet.

But the villagers hope the site -- and their imminent first Internet connection -- will put them in touch with the world beyond the flooded rice fields surrounding Hansdehar, located in a rich agricultural belt in the northern state of Haryana.

"It will be a revolution," said farmer Ajaib Singh.

He and other villagers hope the connection with the outside world will help speed up improvements to Hansdehar's woeful infrastructure and services such as a lack of a pharmacy and unreliable electricity. The village has long been neglected by the Indian government, locals complain.

"Now we can put our problems on the Web site, and then the government can't say, 'We didn't know'," he said.

But younger villagers -- most of whom have yet to send their first e-mail -- plan to use the Internet to help hasten their exit by searching online for college places and jobs in big cities.

In preparation, Jasvir Singh, 21, has hired what is only the second computer in the village to learn to type. He says he can do 25 words a minute and is getting faster.

Singh wants to get into one of India's prestigious institutes of management and one day score a foreign posting.

Quietly spoken Nanki Devi, 21, says her future will be limited to employment as a housemaid if she stays in the village, whose women demurely veil themselves in the presence of unrelated men.

"Only in a city I can be independent," she explained as she looked shyly toward her feet.

These kinds of ambitions are exactly what Kanwal Singh hoped to stir when he set up the Web site for the village he was born in.

New Opportunities

There are few jobs available in Hansdehar beyond farming or running small shops supplying goods to farmers.

While the richest one or two households own cars, most have cows parked in their front yards. The dusty roads are almost completely empty of traffic, bar the occasional farmer chugging past atop a tractor, bhangra music blaring.

The village council -- or panchayat -- is pictured on the Web site holding a meeting about a missing bull. It was never found, villagers say, suspecting theft.

Kanwal Singh, who long ago left to work as a Web site developer for the local government in Chandigarh, said that until recently a lack of opportunities left villagers with few options beyond agriculture.

On a recent visit he gave a dozen or so villagers a mild scolding, telling some of them they lacked initiative. No one answered back.

"Some of the young people here have a lot of potential and they just aren't reaching it," he later told Reuters, visibly frustrated.

Which is why he set about convincing the village council of the benefits a Web site and an Internet connection would bring.

Few villagers had much of an idea about the Internet, but Singh was soon able to explain the fundamentals.

Pick any Bollywood actress, he told them in a slideshow presentation, and you can access hundreds of photographs of her.

But he was quick to highlight the net's other uses.

Now Hansdehar farmers hope they will be able to get better prices for their crops by trading online through the National Commodity & Derivatives Exchange Ltd., cutting out middlemen.

Carpenters and masons will tout their services online. Others will upload their resumes to job hunting Web sites when the village's first Internet point is hooked up in Kanwal Singh's mother's house in the coming weeks.

Hazoor Singh, a local math teacher, will have space on the Web site to publish his forthcoming paper, in which he describes parallels between the nature of God and mathematical set theory.

And at least one young bachelor said he would start browsing for a potential wife.

But the grand aim is to encourage more of India's 640,000 villages to upload themselves and unite in online networks to advance the cause of rural India, home to a tenth of humanity.

"We had to start somewhere, so why not here? Charity begins at home," says Kanwal Singh. "But now all the nearby villages are impressed and they say they want a site of their own."

Scandinavians to Meet Apple Over iTunes

Sweden's consumer rights agency on Wednesday said it and other rights groups in Scandinavia will meet Apple Computer to discuss their complaint that the U.S. company's popular iTunes service breaches consumer laws.

In June, consumer agencies in Sweden, Denmark and Norway jointly wrote to Apple alleging that customers had to waive fundamental rights, such as the free use of legally bought products, to download music from iTunes.

The U.S. computer maker has responded in writing, but wants a face-to-face discussion as well, Marianne Abyhammar, Sweden's acting consumer ombudsman, told Reuters.

"They (Apple) have asked to meet the authorities and explain their position," she said. "We will call such a meeting, to be held in Oslo, as soon as possible."

"The ambition is to arrange for a meeting at the beginning of September, but no date has been set yet."

Norway's consumer rights agency has said that one of its main concerns was that iTunes limited customers' right to freely use legally acquired products by implementing software to protect downloaded files from illegal copying and distribution.

The technology, known as Digital Rights Management (DRM), means no portable players other than Apple's own iPods can play files downloaded from iTunes.

In June, the French parliament pulled back from legislation that would have forced stores like iTunes to share their DRM code, effectively removing barriers that keep songs from being played on other companies' devices.

After complaints from Apple and other opponents that the French legislation would open the door to piracy and threatened the future of online music sales, the French parliament passed a watered-down version of the law that left online distributors with significant control over this code.

In its written response to the Scandinavian agencies' complaint, Apple said it might consider changing some of its practices, Abyhammar said.

"But not in those parts that deal with geographical specifications and limitations on other MP3 players than iPods," she said.

The Swedish and Norwegian consumer ombudsmen both said the agencies were not planning any immediate legal action.

"The issue in the first round is how we'll deal with the answer we got from iTunes and what to do about it," Norwegian Ombudsman Lars Helgesen said.

"We will not take legal action immediately...On the points were we disagree we will negotiate further and an eventual (legal) case will come further ahead in time."

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AOL Prepares To Dig For Gold _ Literally
Ted Bridis

Dig this: AOL believes a renegade Internet spammer buried gold and platinum on his parents' property in Massachusetts and wants to bring in bulldozers to search for the treasure and satisfy a $12.8 million judgment it won in federal court.

The family says it knows nothing about any buried treasure and will fight AOL's gold-digging plans.

AOL said Tuesday it intends to search for bars of gold and platinum that the company believes are hidden near the home of Davis Wolfgang Hawke's parents on two acres in Medfield, Mass.

AOL won a $12.8 million judgment against Hawke last year in U.S. District Court in Virginia but has been unable to contact him to collect any of the money he was ordered to pay. AOL accused Hawke of violating U.S. and Virginia anti-spam laws by sending massive amounts of unwanted e-mails to its subscribers. It won its case in a default judgment against Hawke, who didn't show up in court.

"I don't care if they dig up the entire yard. They're just going to make fools of themselves," said Peggy Greenbaum, Hawke's mother. "There's absolutely no reason for them to think that Davis Hawke would be stupid enough to bury gold on our property. My son is long gone."

At the height of Hawke's Internet activities, experts believe, Hawke and his partners earned more than $600,000 each month - much of it cash - by sending unwanted sales pitches over the Internet for loans, pornography, jewelry and prescription drugs.

"They were millionaires, if only briefly," said Brian McWilliams, a journalist who interviewed Hawke and wrote extensively about him in "Spam Kings," a 2004 book about e-mail spammers. McWilliams said Hawke lived a nomadic life as an adult, eschewed luxuries and described burying his valuables.

"Hawke lived like a pauper really," McWilliams said. "He drove a beater of a used car, an old cop car. He never owned a house or anything."

Greenbaum said her husband and father intend to challenge AOL's plans to dig on their property and search their two-story, 3,000-square-foot home in a wooded residential area of Medfield, a small town about 20 miles southwest of Boston. She said AOL's lawyer notified the family that the company intends to use bulldozers and geological teams to hunt for gold and platinum on their property.

Greenbaum said she has not talked with her son in more than a year and complained about the embarrassment and humiliation he brought to the family.

Greenbaum said the family believes Hawke buried gold in the White Mountains 130 miles north of Boston. She said he once confided to her that he used proceeds from sending Internet spam to buy gold - rather than expensive homes or cars - because it would be more difficult to seize in lawsuits.

"We don't know where is he," she said. "We certainly wouldn't allow him to put any gold on our property."

AOL defended its efforts.

The dig isn't something out of "Treasure Island," AOL spokesman Nicholas Graham said. "This is a court-directed, judge-approved legal process that is simply aimed at responsibly recovering hidden assets."

To win a judge's permission for the search, AOL submitted receipts reflecting large purchases by Hawke of gold and platinum bars, Graham said. The company indicated it believes Hawke buried the loot on his parents' property using a shovel.

AOL said it will try to accommodate Hawke's parents by not being too obtrusive.

A former U.S. prosecutor described AOL's efforts as highly unusual. Marc Zwillinger said his law firm has seized plasma televisions, jet skis and other gadgets in unrelated spam and piracy lawsuits.

"But I've never had a case digging up gold bars and bullion," Zwillinger said. "That's definitely unique."

Group Seeks FTC Inquiry Into AOL
Michael Liedtke

Hoping to trigger a federal investigation, a civil liberties group accused AOL of breaking a promise to protect its subscribers' privacy when the Time Warner Inc. subsidiary recently released millions of Internet search requests - data that touched upon everything from Social Security numbers to murder plots.

The Electronic Frontier Foundation filed a Federal Trade Commission complaint Monday, a week after AOL apologized for posting about 19 million search requests made by about 658,000 subscribers during a three-month period ending in May.

The files containing the search requests were publicly accessible for 10 days before AOL finally removed the information, giving people plenty of time to fetch copies that continue to circulate on the Internet.

In its 11-page complaint, the foundation asserts the AOL breach was serious enough to merit an FTC investigation in hopes of winning an order that would require AOL to provide more details about the gaffe. The San Francisco-based foundation also wants FTC to order AOL to notify all subscribers whose search requests were revealed and pay for a year's protection from a credit monitoring service.

The complaint alleges AOL's unauthorized release of the information, which included creepy search requests like "how to kill your wife," represents an unfair or deceptive trade practice.

The foundation said the released material also included 175 searches containing Social Security numbers, which can provide a stepping stone to identity theft.

While declining to comment on Monday's complaint, AOL spokesman Andrew Weinstein said the company doesn't have a list of the subscribers affected by the breach. The search requests were broken down into groups identified by numbers, with all names removed.

But AOL has acknowledged some of the search requests contained enough personal data to identify the people behind the queries.

"We are conducting our own internal investigation to make sure this kind of thing doesn't happen again," Weinstein said.

An FTC spokeswoman on Monday declined to say whether the agency intends to open an investigation. With few exceptions, the FTC doesn't confirm its investigations.

Another consumer rights group, the World Privacy Forum, plans to file an FTC complaint against AOL later this week, according to Pam Dixon, the group's executive director.

The calls for a federal inquiry threaten to make it more difficult for AOL to move past its self-described "screw up," just as management strives to attract more Web surfers to generate more advertising revenue.

You Are What You Search

AOL's data leak reveals the seven ways people search the Web.
Paul Boutin

AOL researchers recently published the search logs of about 650,000 members—a total of 36,389,629 individual searches. AOL's search nerds intended the files to be an academic resource but didn't consider that users might be peeved to see their private queries become a research tool. Last weekend, the Internet service provider tried to pull back the data, but by that point it had leaked all over the Web. If you've ever wanted to see what other people type into search boxes, now's your chance.

The search records don't include users' names, but each search is tagged with a number that's tied to a specific AOL account. The New York Times quickly sussed out that AOL Searcher No. 4417749 was 62-year-old Thelma Arnold. Indeed, Arnold has a "dog who urinate on everything," just as she'd typed into the search box. Valleywag has become one of many clearinghouses for funny, bizarre, and painful user profiles. The searches of AOL user No. 672368, for example, morphed over several weeks from "you're pregnant he doesn't want the baby" to "foods to eat when pregnant" to "abortion clinics charlotte nc" to "can christians be forgiven for abortion."

While these case studies are good voyeuristic fodder, snooping through one user's life barely scratches the surface of this data trove. The startup company I work for, Splunk, makes software to search computer-generated log files. AOL's 36 million log entries might look like an Orwellian nightmare to you, but for us it's a user transaction case study to die for. Using the third-party site splunkd.com, I've parsed the AOL data to create a typology of AOL Search users. Which of the seven types of searcher are you? (Click here for tips on how to do this yourself.)

The Pornhound. Big surprise, there are millions of searches for mind-bendingly kinky stuff. User No. 927 is already an Internet legend—click here if you're not faint of heart (and not at the office). When I clicked Splunk's "Show Events by Time" button, though, I found that porn searchers vary not only by what they search for, but when they search for it. Some users are on a quest for pornography at all hours, seeking little else from AOL. Another subgroup, including No. 927, search only within reliable time slots. The data doesn't list each user's time zone, but 11 p.m. Eastern and 11 p.m. Pacific appear to be prime time for porn on AOL's servers. My favorite plots show hours of G-rated searches before the user switches gears—what I call the Avenue Q Theory of Internet usage. User No. 190827 goes from "talking parrots jokes" and "poems about a red rose" before midnight to multiple clicks for "sexy dogs and hot girls" a half hour later. An important related discovery: Nobody knows how to spell "bestiality."

The Manhunter. The person who searches for other people. Again, I used Splunk's "Show Events by Time" function to plot name searches by date and time. Surprisingly, I didn't uncover many long-term stalkers. Most of the data showed bursts of searches for a specific name only once, all within an hour or a day, and then never again. Maybe these folks are background-checking job candidates, maybe they're looking up the new cutie at the office, or maybe they just miss old friends. Most of the names in AOL's logs are too ambiguous to pinpoint to a single person in the real world, so don't get too tweaked if you find your own name and hometown in there. I've got it much worse. There are 36 million searches here, but none of them are for me.

The Shopper. The user who hits "treo 700" 37 times in three days. Here, the data didn't confirm my biases. I'd expected to find window shoppers who searched for Porsche Cayman pages every weekend. But AOL's logs reveal that searches for "coupons" are a lot more common. My favorite specimen is the guy who mostly looked up food brands like Dole, Wendy's, Red Lobster, and Turkey Hill, with an occasional break for "asian movie stars." How much more American could America Online get?

The Obsessive. The guy who searches for the same thing over and over and over. Looking at the search words themselves can obfuscate a more general long-term pattern—A, A, A, A, B, A, A, C, A, D, A—that suggests a user who can't let go of one topic, whether it's Judaism, real estate, or Macs. Obsessives are most likely to craft advanced search terms like "craven randy fanfic -wes" and "pfeffern**sse."

The Omnivore. Many users aren't obsessive—they're just online a lot. My taxonomy fails them, because their search terms, while frequent, show little repetition or regularity. Still, I can spot a few subcategories. There are the trivia buffs who searched "imdb" hundreds of times in three months and the nostalgia surfers on the hunt for "pat benatar helter skelter lyrics."

The Newbie. They just figured out how to turn on the computer. User No. 12792510 is one of many who confuses AOL's search box with its browser address window—he keeps seaching for "www.google." Other AOLers type their searches without spaces between the words ("newcaddillacdeville") as if they were 1990s-era AOL keywords.

The Basket Case. In college I had to write a version of the classic ELIZA program, a pretend therapist who only responds to your problems ("I am sad") with more questions ("Why do you say you are sad?"). AOL Search, it seems, serves the same purpose for a lot of users. I stumbled across queries like "i hate my job" and "why am i so ugly." For me, one log entry stands above the rest: "i hurt when i think too much i love roadtrips i hate my weight i fear being alone for the rest of my life." Me too, 3696023. Me too.


If you want to try sifting through the AOL data, install the latest Firefox browser or use Internet Explorer 6. Then go to splunkd.com and click on one of the sites on the "Mirror List." If you're behind a firewall, the URLs with numbers in them ("www.ocs.net:8000") might not work. Once you click, wait a minute for the Splunk interface to load itself into your browser. You should see a search box at the top and something like "36,389,577 events indexed" below it.

To search AOL records, type something into the search box. As you type, a panel will appear that lists the number of possible results for what you've typed so far, such as "slate (2766)." That's a good way to quickly see how many searches for a particular word are in AOL's logs.

After typing a word or two, click the ">" button at the right to run your search. The results page looks like a cross between Google and a nuclear reactor console—a hip, stylish Web 2.0 reactor, of course. For help with the interface, click on "Cheat Sheet" at the upper right. You can also pop open the Splunk Assistant in the lower right corner for as-you-go hints. If all else fails, read the manual. Yes, "Splunk" is a pun on "spelunking," as in data mining.

The format of each search log entry is: user number, search term, time stamp. If the user clicked on one of their search results, there are two more fields: the results rank and the URL of the link they clicked. The results are easier to read if you find Splunk's Preferences menu and turn off Show Event Meta Data—you're not troubleshooting a denial of service attack.

Who Benefits from AOL's Released Search Logs?
Kate Greene

Last week, AOL's PR team cringed as the world learned that the company had publicly posted search terms from 650,000 AOL users. They posted the search log on a research site, and subsequently took it down after a flurry of coverage in the blogosphere. Nonetheless, a number of sites have reposted the log.

While specific names of AOL users weren't link directly to searched terms, there was no guarantee of anonymity: AOL had assigned each user a number, and often users searched their own names, and their hometowns. The New York Times was able to track down one AOL user who talked with a reporter about her searches for "numb fingers" and "dog that urinates on everything."

The data dissemination led privacy advocates to trumpet the dangers of search companies storing people's queries. At the same time, though, other people -- Internet researchers, statisticians, sociologists, and political scientists -- silently cheered.

Before the AOL release, all major search engines had kept their data from the public eye. This meant that researchers interested in the activities of users of search engines had to either rely on speculative data from open, infrequently used search engines, or make educated guesses. The AOL search log, which contains more than 30 million search terms, could thus provide some missing insight into how people use the Web, says Matt Hindman, a political scientist at the Arizona State University in Phoenix. A better understanding of Web dynamics has implications for political campaigns, education, and an entire economy built on advertising through Web searches. "For researchers like me," Hindman says, "that's exciting."

Shortly after AOL's goof, a site called AOL Stalker was created. Its main draw is that it allows people to search through the AOL database and view user searches as well as other search data. The author of the site has also posted the first in a series of basic data analyses. This initial number-crunching examines how well the rank of search results can predict a page's click-through rate -- in other words, it shows how well results match what people want to find. According the analysis, in 47 percent of searches, people didn't click on any of the presented results. While the revelation that nearly half of all AOL searches don't go anywhere isn't earth-shattering, further analysis could provide insight into how to make search engines more useful or guide advertisers in their ad placements.

As giddy as this sort of data makes statistics hounds, the creator of AOL Stalker, at least, still seems mindful of the sensitive nature of the information. The site's creator lets anyone request that certain information be hidden from the site's search engine if it's too revealing. As noted in the fine print: "If you find any data that actually makes it possible to identify a user, please let us know using the contact form, and we'll remove those references."

Marketers Trace Paths Users Leave on Internet
Saul Hansell

If you use Yahoo’s Web search engine to learn about hybrid cars, the site will quietly note that you fit into a group of users it calls “Consciously Cruising.”

If you click on ads for moving van companies, you will join the “Home Hopping” group. Shop for wedding cakes and reception halls and you might be tagged as a future bride or groom.

Earlier this year, Yahoo introduced a computer system that uses complex models to analyze records of what each of its 500 million users do on its site: what they search for, what pages they read, what ads they click on. It then tries to show them advertisements that speak directly to their interests and the events in their lives.

Yahoo and the many other companies building similar systems say the systems are benign because they typically do not collect personal information like names and addresses.

“We are much more conservative than we need to be” in using information about site visitors, said Usama Fayyad, chief data officer at Yahoo.

Still, just how personal even “anonymous” information can be was shown vividly last week as a list of three months of search queries from 657,000 AOL customers began circulating online. Collectively, a person’s Web searches, it turns out, can create an eerily intimate portrait — one that some privacy advocates say should never be assembled and stored in the first place.

Still, Web companies continue refining their techniques. Advertising on search engines is already a $14-billion-a-year business because the ads can be so closely tied to what people are looking for. Yahoo’s system is meant to use search queries and other actions to select ads people see while checking their e-mail and reading other pages.

AOL is working on a similar system to display ads for products related to a person’s Web search history. MSN from Microsoft just introduced technology to do the same. Other companies use systems that bring together information about users from across many sites. Internet companies call this behavioral targeting, and it is based on the insight that knowing what people do online can be more valuable to a marketer than knowing how old they are or what they do for a living.

“Search behavior is the closest thing we have to a window onto people’s intent,” said Jeff Marshall, a senior vice president of Starcom IP, an advertising agency. “When people are gathering information to make a choice, that means they are often going to spend money.”

Many Internet users have no idea that records of their actions are being collected and used. They might find out about these practices only if they read the fine print of Web site privacy policies.

But AOL’s release of search data has already led some privacy advocates and legislators to call for new limits on how Web sites and advertisers keep and use information about online behavior.

AOL has apologized for the release, saying that its research unit had not been authorized to publish the records. It removed the data from its site, but copies are still available online.

Not all of the behavioral marketing involves search engines. Technology from companies like DoubleClick and AOL’s Advertising.com unit allows marketing messages to follow people around the Web.

Starwood Hotels, for example, alerts members of its frequent-guest program to new promotions by placing ads that will be shown only to people who have previously visited its Web site. These ads can find customers in unlikely places, like the vast social networking site MySpace.

While most MySpace users are more likely to spend money on soda and sneakers, some of the site’s 100 million members do stay in Starwood’s Westin or Sheraton hotels and will see the ads.

Cingular Wireless uses a similar approach to advertise to people who have started shopping for a phone.

“You are no longer targeting people you think will be interested in your product,” said Les Kruger, a senior marketing manager at Cingular. “We know based on your behavior that you are in the market, and we can target you as you bounce around the Internet.”

Most of these marketing systems use cookies, unique numbers that a Web site can place on a computer to spot return visitors. Cookies are also used by companies like Advertising.com that place ads and track visitors across many sites.

Shopping sites like Amazon.com use cookies to greet returning customers by name. But many of the targeting systems try to avoid recording personally identifiable information, like a person’s name and address.

In the late 1990’s, an outcry about an earlier wave of marketing schemes led to some restrictions on how data is shared among sites and to rules that allow users to specify that they do not want to have some data collected about themselves. These options are rarely used.

Yahoo and most of the major Internet companies do not sell profile information to others, as magazine publishers and credit card companies often do. They want to profit directly from the information they gather.

But Web publishers do sometimes trade information among themselves — often simply what sites a particular computer has visited. For example, Seevast, an Internet advertising company, pays Web sites to place its cookies on the computers of users that visit them. That way, Seevast will know more about those users when it chooses which advertisements to display on sites in its network.

Mr. Fayyad of Yahoo said Internet companies were walking a fine line.

“If you get bombarded by ads for minivans on Yahoo, even if you are interested in minivans, it becomes creepy,” he said. “If you want to do this responsibly, you have to restrain yourself.”

For example, he said, Yahoo’s new system is based on monitoring for 300 types of behavior — some as detailed as having shopped for flowers in the last two days — but it does not keep records on more sensitive topics, like specific medical conditions.

Still, Mr. Fayyad argues that some level of targeting is necessary for Internet companies to avoid the fate of television networks.

“Every time I serve the wrong ad to the wrong person, I am training that person to tune out,” he said.

More immediately, Yahoo and many other sites see this sort of targeting as a way to increase advertising rates for material that otherwise would have little appeal to advertisers.

“We sell people, not pages,” said David Morgan, the chairman of Tacoda Systems, which sells technology for behavioral targeting to publishers including The New York Times Company. “The L.A. Times can target car buyers when they are surfing the local news.”

At first, Tacoda offered a service to allow companies to track behavior on their own sites. Now it runs a network across 3,500 sites, so Weather.com, for example, can show lucrative auto ads to its users who recently visited Car.com.

These systems can turn up some surprising results. Alamo Rent a Car, for example, found strong responses to its advertisements among people who had recently read obituaries on newspaper sites. That may have been because they were more likely to be taking a last-minute trip to a funeral, Mr. Morgan said.

Google, which runs both the largest search engine and largest advertising network, picks its targets more narrowly. When Google sells advertisements that appear on other Web sites, it selects the ad by analyzing the subject matter of the page the ads appear on. Those sites can send Google additional hints for use in ad targeting, like ZIP codes.

Google outbid its rivals last week when the News Corporation accepted its offer of $900 million for the right to sell advertising on MySpace and other sites; it helped that Google has sophisticated technology that can make inferences about what ads are best for a particular page.

So far, however, Google has not used information about the past behavior of searchers to target advertisements, even though the company keeps logs of all searches and its privacy policy allows it to use these for advertising. Google does not collect the names of most searchers, but it is doing so increasingly as it offers more personal services like e-mail.

“We have considered every potential targeting option, and we come back every time to the idea that the trust of the user is paramount,” said Tim Armstrong, Google’s vice president for advertising. After the initial outcry over Google’s Gmail service, which displays ads based on the content of individual e-mail messages, the company has been wary of taking actions that would raise privacy concerns.

Mr. Armstrong also challenged the idea that it was effective to show people advertisements based on what they searched for hours or days earlier: “Does a user want to see an ad on cars when they are planning their weekend vacation, or do they want to see an ad related to what they are looking at?”

Indeed, some argue that behavioral targeting may be more trouble than it is worth. Web publishers worry that it will lead clients to buy fewer ads. And advertisers question whether the higher prices the Web sites charge are worth it.

One believer is Panasonic, which has found that users do respond to such advertisements. It ran a series of ads for plasma televisions on entertainment and electronics Web sites. Then it used technology from Tacoda to show ads to people who had once visited those sites while they surfed elsewhere. The response to the ads increased when they were on a site unrelated to televisions.

“The ad is less expected and is playing to your subconscious,” said Lydia Snape, the director of online marketing at Renegade Marketing, Panasonic’s Internet advertising agency.

LendingTree, an online loan broker, has experimented with aiming ads at some of the 300 categories of users in Yahoo’s new system, like newlyweds and people who have just moved. It had by far the best results advertising to people who had searched for and read information about borrowing money.

“People aren’t in the market for loans all the time,” said Darren Beck, LendingTree’s vice president for online advertising. “These behavioral targeting models seem like the holy grail. We can find people exactly when they want a loan.”

Has The Time Finally Come To Stop Using Google?
Jack Schofield

Maybe it has, if you care about your privacy. There's no doubt that Google does care about your privacy, and aims to protect it. Earlier this year, for example, it refused to release anonymous search data demanded by the US government for a study, even though other search engines meekly handed it over. But rather than protecting such data, you might well think Google shouldn't collect it in the first place.

The question has risen to prominence over the past week, after a New York Times reporter phoned "Thelma Arnold, a 62-year-old widow who lives in Lilburn, Georgia" and revealed that he knew altogether too much about her.

Arnold was the first person to be publicly identified from the anonymous search data foolishly released by AOL (America Online). Ms Arnold was shocked: "My goodness, it's my whole personal life," she told the reporter. "I had no idea somebody was looking over my shoulder."

Anyone who has a complete record of your searches might be able to find you too. In fact, it could be easy if you have done any "ego surfing" or looked up things by post code. This could be worrying news if you have searched for child pornography, bomb-making instructions, or a variety of illnesses and afflictions including Aids and mental health issues. At least one person in the AOL data was searching for the best way to kill a wife.

But even if you are as blameless as Thelma Arnold, you'd have to wonder whether you really want Google to record such data forever. Once it exists, it might be released either deliberately or accidentally, it could be hacked, and perhaps even trawled by governments looking for terrorists (justification) or any malfeasance they can find.

The bad news is that Google - which supplies AOL's search results - has all that information and more. If you use Google's Gmail, address book, calendar, maps and other services, it could even tie your search data to things you are really doing. By the way, Google also knows which other websites you visit, if they use AdWords, and when.

Google's argument for collecting and storing all this invasive data is that it can provide better search results and, particularly, better targeted advertisements. The ads are how Google makes its billions. But trading privacy risks for better advertising sounds like a bad deal for users.

One answer is to delete the cookies that Google and other search engines (which are mostly as bad, or worse) put on your hard drive, and do searches via an anonymous proxy, so the search engine cannot tie them to your internet address. Another is to switch to search engines that say they don't record user data. Examples include ixquick (www.ixquick.com/) and Clusty (http://clusty.com).

The Alaskan oil spill from the Exxon Valdez tanker in 1989 spurred massive interest in environmental protection. US advocates have described AOL's data spill as a "Data Valdez" and hope it will make more people care about their privacy.

Keeping Your Identity on a Short Leash
Terry Cutler

The dangers of information and identity theft are many, but by following a few very simple rules, people can drastically lower their odds of being victimized.

Terry Cutler is a Canadian-based support engineer with Novell and a certified Ethical Hacker, and wants to get the news out to people on how they can and should protect their information and their identities from the many pitfalls of the Internet age. The following is a guide that he has provided to canada.com in order to inform our readers.

A new illegal enterprise is preying on our citizens, attracting the likes of criminals, gangs and illicit organizations. Crooks hack into company computers to steal the private information — and sometimes the full identities — of their customers.

And the fact is, many companies who have been hacked fail to inform their customers about what has — or might have — happened to such private information, and there is no law that forces them to do so.

Let’s face it: disclosing that kind of information could be bad for business. And while customers have a right to know what happens to their information, once it is given up to a company, they no longer control it.

It is therefore up to businesses to protect it, and prevent any unauthorized access to it — especially if they want to keep their customers happy.

Unfortunately, there is no way of completely ensuring that any given business or company is guarding your information with 100 per cent accuracy. However, there are steps you can take that will make your identity a little harder for the bad guys to steal.

Below are a few steps you can take to keep your personal information secure.

Watch what you carry

Open your wallet or purse and empty all its contents on a table to have a good look at what confidential and personal information you are actually carrying with you. The following items should stay at home in a safe location:

• Social insurance card
• Passport
• Birth certificate
• Any other cards with your social insurance number as an account number, such as a private health insurance card

Get rid of it the right way

If you want to throw away documents that contain account numbers or other personal information, shred them first. In fact, criminals could still piece together shredded documents if they are very eager, so consider purchasing a cross-cut shredder. While that might seem extreme, consider that over 60 per cent of a person’s identity can be found in his or her garbage can.

Worse yet, it is not illegal to venture into someone else’s trash if it is in a public area.

Keep your PIN private

According to a 2006 national Ipsos Reid poll, more than half (51 per cent) of Canadians are concerned about fraud at Automated Teller Machines (ATMs) after hearing news stories that feature ATM fraud.

A full 15 per cent of Canadians indicate that they are much more concerned than they were before hearing the stories. However, seven out of 10 people surveyed have no plans to change how often they use ATMs.

There are safe ways to use these machines. When you visit an ATM, always type in a bad personal identification number (PIN) first. Doing so will ensure PIN validation and that the machine is really hooked up to the banking service.

In recent years, card duplication has been on the rise — so, for instance, if at a gas station the card reader was switched out for a writer, your card could be copied. While the particle strip on the back of the card does not contain your PIN, the thieves could try to find a way to get it. In fact, the latest technology they are using is an ATM keypad with a keylogger built in that record your password.

To make it more convenient for these thieves, they’ve installed WiFi in the unit so they can access it from the parking lot and download the logs. When using a bank machine or debit card, be on the lookout for any potential cameras around you and try to cover the keypad as much as possible. Type the PIN using your index finger.

There is a plan to have all cards upgraded to a “Chip Card” by 2007. These are more secure because your bank, for example, will program your card with your fingerprint, so instead of just a PIN the chip card will be required when you want to use a bank machine. The card will auto-generate an encrypted certificate to be used for that session, making the card impossible to copy — at least until the criminals come up with a way to circumvent that as well.

Good things are not always what they seem

Ever heard of caller ID spoofing?

Using Vonage or any Voice over Internet Protocol (VoIP) service, criminals can use an open-source software program to have any number they want appear on a caller ID display.

This trick has already gotten into the hands of people who use this service for fraud. If you receive a call from a person claiming to be a telemarketer, trying to sell you something that seems too good to be true, ask for a number and call back before purchasing. Do not give out any personal information to someone over the phone before verifying his or her identity.

Don’t fall for the phish

Another common form of fraud is the “phishing scam.” Let’s say, for example, you receive an e-mail from eBay asking you to update your personal information. The link appears to be a valid eBay web address, but if you view the source, it is actually another IP address that looks exactly like the real eBay.

Other common phishing scams use e-mails that claim to be from banks, saying your account has been compromised. To avoid getting caught in these kinds of scams, type the web address manually into your browser instead of clicking the link.

Most large companies have an “abuse” e-mail address for customers’ convenience, so consider forwarding the suspicious e-mail to that address, such as "abuse@ebay.com."

Concerns about bank account security should warrant a call to the bank directly. If you’re suspicious about an e-mail you receive, you can also check it out with Hoax Slayer — www.hoax-slayer.com.

Shopper’s paradise

Sometimes we want to take advantage of “online only” specials, and look to make a purchase online. Having a credit card with a relatively small limit (say $250 to $500) instead of using your major card is a good way to protect yourself if the sale is too good
to be true. This ensures that if your information is captured by criminals, they won’t have access to too much money.

Otherwise, consider calling the company directly to give your credit card and personal information over the phone instead of over the Internet.

Keep tabs on your information

Canadians are able to order copies of their credit reports from Equifax and Trans Union Canada for about $15 to $20. These reports contain all the financial and credit history a person owns — including credit cards, loans, lines of credit — as well as phone numbers for the institutions that granted these.

Additionally, anyone who has ever called in and requested your credit history is listed in the reports, with the date and time. It’s a very important and worthwhile investment.

As criminals get savvier, consumers must get wiser. Be alert and pay attention to how you distribute your personal information — your identity depends on it.

Here are a few more tips to keep you, and your identity, safer:

• Your PIN is your electronic signature. Don't write it down — memorize it.
• When selecting a PIN, avoid the obvious — this would include your name, phone number, birthday, and address.
• Never disclose your PIN to anyone. No one but you is legally allowed to use it, including your spouse. No one from a legitimate financial institution, police service or business should ever ask for your PIN.
• Always conduct your ATM transactions when and where you feel most secure. If you are uncomfortable about using the machine for any reason, do it later, or go to another location.
• After completing a transaction, remember to take your bank card and your transaction record. Once you are done with the transaction paper, shred it.
• If your bank card is lost, stolen or retained by an ATM, notify your financial institution immediately. Most institutions have 1-800 numbers and/or 24-hour service for lost or stolen cards.
• Don’t carry too much identification in one place.
• Give your SIN only to those who are entitled by law to ask for it.
• Carefully check your bank and credit card statements monthly.
• Shred important papers before recycling them.

If you have become a victim of theft:

• File a police report.
• Contact all your creditors to advise them of the fraud and to halt all transactions.
• Contact the fraud units of the Credit Bureau as well as Equifax and Trans Union of Canada.

Resources for Canadian victims of identity theft:

PhoneBusters National Call Centre (PNCC)
Ontario Provincial Police Anti-Rackets
Toll Free: 1 888 495-8501
Toll Free Fax: 1 888 654-9426
Email: info@phonebusters.com
Web: www.phonebusters.com

Credit reporting Agencies:

Place fraud alerts on your credit reports by contacting the credit bureaus that operate in
• Equifax Canada

Report fraud:
1 800 465-7166
Web: www.equifax.com/EFX_Canada
• Trans Union Canada

Report fraud:
1 877 525-3823
Web: www.tuc.ca

For additional information:
The Office of the Privacy Commissioner of Canada
112 Kent Street
Ottawa, ON K1A 1H3
E-mail: info@privcom.gc.ca
Visit: http://www.privcom.gc.ca/fs-fi/02_05_d_10_e.asp

Open Source Project Adds "No Military Use" Clause to the GPL
Tina Gasperson

GPU is a Gnutella client that creates ad-hoc supercomputers by allowing individual PCs on the network to share CPU resources with each other. That's intriguing enough, but the really interesting thing about GPU is the license its developers have given it. They call it a "no military use" modified version of the GNU General Public License (GPL).

Tiziano Mengotti and Rene Tegel are the lead developers on the GPU project. Mengotti is the driving force behind the license "patch," which says "the program and its derivative work will neither be modified or executed to harm any human being nor through inaction permit any human being to be harmed."

Mengotti says the clause is specifically intended to prevent military use. "We are software developers who dedicate part of our free time to open source development. The fact is that open source is used by the military industry. Open source operating systems can steer warplanes and rockets. [This] patch should make clear to users of the software that this is definitely not allowed by the licenser."

He says some might think an attempt to prevent military use might be "too idealistic" and would not work in practice, but he references the world of ham radio, whose rules specify that the technology is not to be used commercially. "Surprisingly enough, this rule is respected by almost every ham operator."

The developers readily acknowledge that the "patch" contradicts the original intention of the GPL, to provide complete freedom for users of software and source code licensed under it. "This license collides with paragraph six of the Open Source Definition," is how they word it in the license preamble.

Richard Stallman, the founder of the Free Software movement and author of the GPL, says that while he doesn't support the philosophy of "open source," neither does he believe software developers or distributors have the right to try to control other people's activities through restricting the software they run. "Nonetheless, I don't think the requirement is entirely vacuous, so we cannot disregard it as legally void."

"As a pacifist, I sympathize with their goals," says Russ Nelson, president of the Open Source Initiative (OSI). "People who feel strongly about war will sometimes take actions which they realize are ineffectual, but make it clear that they are not willing to take action which directly supports war."

Tegel says he doesn't fully agree with the inclusion of the clause in GPU's license. "I see the point, and my personal opinion supports it, but I am not sure if it fits in a license," he says. "Like our Dutch military: I can say it is bad because it kills people and costs money. But on the other hand, we were taught by both our leftist and rightist teachers to enjoy our freedom due to the alliance freeing us from Nazis, a thing which I appreciate very much."

Both developers do agree about one aspect of their license clause. It is based on the first of science fiction writer Isaac Asimov's Three Law of Robotics, which states, "A robot may not harm a human being, or, through inaction, allow a human being to come to harm." That, they say, is a good thing, "because the guy was right," Tegel says, "and he showed the paradox that almost any technological development has to solve, whether it is software or an atom bomb. We must discuss now what ethical problems we may raise in the future."

US Satellite Plan 'Will Knock Out Pacific Radio Links'
Kent Atkinson

Pacific Island nations -- and airline pilots around the globe -- could lose high frequency radio links for up to a week if the US goes ahead with a plan to protect its satellite network, Otago University researchers said today.

They warned the Americans plan to protect its satellites from both natural radiation and "airbursts" of nuclear weapons posed a global communications threat.

The US Air Force and the US Defence Advanced Research Projects Agency (DARPA) have proposed using very low frequency radio waves to flush particles from radiation "belts" above Earth and dump them into the upper atmosphere over either one or several days.
This deluge of dumped charged particles would temporarily change the ionosphere from a "mirror" that bounced high frequency radio waves around the planet to a "sponge" that soaked them up, Dr Craig Rodger of Otago University's physics department, said today.

The ionosphere is one of the highest layers of the Earth's atmosphere, starting at about 70km and continuing out to about 640km, and contains ions created when solar radiation tears electrons off atoms in the atmosphere. It is important for reflection of some radio waves.

Dr Rodger, lead researcher on a multinational study also involving scientists from Finland and Britain, said plane pilots and ships would lose radio contact and some Pacific Island nations could be isolated for up to a week, depending on the system's design and how it was operated.

He said GPS services would also likely suffer large-scale disruptions, if signals between ground users and satellites were scrambled in the ionosphere.

The US "radiation belt remediation" was intended to protect hundreds of low earth-orbiting satellites from having their onboard electronics ruined by charged particles in unusually intense radiation belts "pumped up" by powerful solar storms -- or small nuclear weapons deliberately exploded in the atmosphere to disrupt communications.

"Earth's upper atmosphere would be dramatically affected by such a system, causing unusually intense high-frequency (radio) blackouts around most of the world," Dr Rodger said.

The researchers, whose work is published work in August edition of the international journal Annales Geophysicae, called for policymakers to carefully consider the implications of the US scheme.

"If the intense radiation belts resulted from a rogue state detonating a nuclear-tipped missile in the upper atmosphere, using such remediation technology would probably be acceptable to the international community," they said.

But the case for using the system to mitigate the lesser risk to satellites from charged particles injected by naturally-occurring solar storms needed to be considered more closely and weighed against the impact of the disruption to global communications.
Many developed countries use HF radio for communicating with aircraft and ships, international broadcasting, amateur radio, and fixed long-distance communications, and developing countries use it for domestic links - national broadcasters and both mobile and fixed point-to-point communications.

The researchers also considered whether the changes to atmospheric chemistry would harm the ozone layer, but found that ozone depletion would be short-lived.

Advanced Micro Is Updating Its Key Chips

Advanced Micro Devices, the maker of processors for personal computers, is updating the Opteron server chips that have driven the company’s market-share gains against Intel.

New versions of the Opteron will connect with a faster type of memory chip, have built-in access for management software and make computers easily upgraded with new chips out next year, said Brent Kerby, a product manager for the company.

Gains by the Opteron since its introduction in 2003 have helped Advanced Micro cut Intel’s share of the market for PC processors to less than 80 percent for the first time in four years. The upgrade of the Opteron comes a month after Intel released the first complete redesign of its Xeon server chip in more than six years. Companies use servers to run their networks and Web sites.

At the end of the second quarter, Advanced Micro, which is based in Sunnyvale, Calif., had 26 percent of the market for servers built on PC chips, more than double the share a year earlier, according to Mercury Research of Cave Creek, Ariz.

The new Opteron chips will have built-in support for so-called virtualization technology, which allows computers to run multiple operating systems, an ability that Intel’s Xeon chips have had since November.

Stalemate Seen In High-Definition DVD War

The battle between two hyped formats for high-definition DVD will confuse shoppers and turn many of them off the whole technology, a London-based research firm predicted on Friday.

Market research analyst Screen Digest also forecast that only $11 billion of the total $39 billion expected to be spent on video discs by 2010 in the United States, Europe and Japan will be generated by the competing high-definition formats, Sony-backed Blu-ray and Toshiba-supported HD DVD.

"The net result of the format war and the publicity it has generated will be to dampen consumer appetite for the whole high-definition disc category," Screen Digest analyst Ben Keen said.

The DVD format exploded into a multibillion-dollar global industry for movie and TV studios in part because the largely universal format delivered a more convenient way to own movies than its predecessor, the VHS videotape.

"This time both formats support similar features," said Graham Sharpless, who wrote the report.

The new formats are being introduced just as DVD sales level off, after consumers built up libraries of their favorite movies and TV shows at deeply discounted prices.

The specter of Betamax
Electronics retailers such as Best Buy and CompUSA are frustrated by the raging format war, fearful of another decade-long tussle similar to the one between VHS and Betamax. They have been predicting a lackluster Christmas selling season, expecting consumers to wait for one format to win out.

Screen Digest predicts that the two formats will co-exist until a combined solution becomes cost-effective, rather than taking the view that one will emerge victorious or that both will flop so badly as to be driven into extinction.

All of the Hollywood studios, except Universal, have said they will release movies on Blu-ray, with the first players and titles having launched earlier this year.

While only three of the major studios have said they will release movies in HD-DVD, Microsoft has thrown its weight behind the format, supporting it in the Windows Vista PC operating system and offering an external drive to connect to its Xbox 360 game console.

Sony is incorporating Blu-ray into its Playstation 3 video game console, due out later this year, to push its format into more homes.

Screen Digest expects that 430,000 standalone Blu-ray and HD-DVD players and recorders will be sold in 2006 and 1.35 million in 2007.

By 2010, it expects about 15 million U.S. households (21 percent of homes with high-definition TV sets), 10 million in Europe (17 percent) and 2.5 million (7.4 percent) in Japan will have bought a standalone unit, while 24 million, 23 million and 15 million high-definition-disc games consoles will have been sold.

As standalone units, a Samsung Blu-ray player sells for about $1,000 and a Toshiba HD-DVD player for about $500.

DVD Giveaways Signal Woes Of Once-Booming Format
Jeffrey Goldfarb

British newspapers are now giving away free as many DVDs as are being purchased in stores, revealing a stealth contributing factor to the decline of Hollywood's cash cow format.

The cover-mounted DVD giveaways, which have included "Star Wars" and "Donnie Darko", devalue the format in the eyes of consumers, one-quarter of whom said they would have bought the same title if they had seen it in shops for a reasonable price, according to a report released on Thursday.

In the first quarter of 2006, about 54 million DVDs were given away to British consumers who bought newspapers and magazines, about the same number as were sold by retailers over the same span, market research firm Screen Digest said, using data supplied by TNS and Ipsos.

That compares with 130 million DVDs that were given away in 2005 by the country's national newspapers, including the Daily Telegraph, the Times, The Sun and the Daily Express, and 211 million that were sold in shops.

Although most of the freebies are old and sometimes forgotten films, Screen Digest estimated that had they been bought the 2005 DVD giveaways would have represented 495 million pounds ($938.4 million) in retail sales.

In more realistic terms, if one-quarter of homes that received a free DVD each bought one additional disc a quarter at a deeply discounted 4 pounds each, additional UK spending on the format would have been about 50 million pounds.

That would have boosted DVD sales by 2.3 percent to 2.3 billion pounds, Screen Digest said, instead of the market staying flat for the first time in the nine-year history of the format.

"It's clear that that kind of quantity of free discs circulating in the market cannot help but have a dampening effect on the purchase of DVDs," said Helen Davis Jayalath, Screen Digest's senior home entertainment analyst.

Newspapers in other European countries, including Italy, France and Spain, also give away DVDs, but they typically charge an extra euro or two for the periodical when including one.

"Even though it's only a couple of euros, it helps maintain the value of the format in the eyes of consumers," Jayalath said.

There are other markets where DVD giveaways have caused controversy. In Greece, for example, retailers have appealed to the government to ban cover-mounts after one Sunday newspaper distributed the hit "Lord of the Rings" trilogy and two discs with extra material over a five-week span.

DVD sales came to a screeching halt across Europe last year, where they flattened at about 11.3 billion euros ($14.52 billion), after experiencing 41 percent growth in 2004 compared with 2003 and even more explosive growth earlier in the decade.

Deep price cuts have been the main culprit. The average price of a DVD in Britain fell 30 percent between 2000 and 2005.

Small gains in the United States and Japan helped lift global DVD sales in 2005 3.5 percent to $36.7 billion.

Although most of the major Hollywood studios oppose the newspaper giveaways, the smaller local distributors who have licensed the films are opportunistically doing deals with publishers for short-term gains that can generate as much as 250,000 pounds for a film.

"The argument in favor of this is that the majority of these films have reached the end of their commercial cycle," Jayalath said. "In many cases, they're no longer stocked because traditional retailers have a limited amount of space. For the rights holder, it can be the last bite of the cherry."

Pumping Power Onto The Grid From Your Basement
Martin LaMonica

In a 21st century twist on Microsoft's original "PC in every home" vision, a young company has created a home energy-storage appliance that connects to the power grid--and the Internet.

Called GridPoint, the 3-year-old company has developed "intelligent energy management" systems, which it claims can help people lower their electricity bills.

It makes two products: a storage appliance that works in conjunction with a renewable power source, such as solar electric panels, and a back-up power supply unit. Both refrigerator-size boxes are equipped with Net-connected PCs that collect and analyze data on power usage.

Using the company's software, people can lower their energy consumption by having the system shut off appliances at certain times. Or people can power their homes from their batteries on a schedule that makes best use of changing electricity tariffs, according to GridPoint.

The Washington, D.C.-based company is part of a wave of start-ups entering the clean technology sector and seeking to create business opportunities from higher energy prices. A handful of these clean tech companies, including GridPoint, are focusing on technologies that lower power costs, in part by shifting electricity usage to different times of the day.

"Energy shifters change the timing of when energy is drawn off the system--they don't necessarily reduce the use of energy overall," said Rob Day, an investor at Expansion Capital Partners. "They are betting on time-of-use (pricing) working its way more and more into the regulatory environment. That's probably a valid assumption."

In September, GridPoint plans to announce a partnership with a utility industry company to tap into the kilowatt-hours of storage sitting in people's basements, Chief Operating Officer Karl Lewis said.

The idea is that the utility will purchase and install the storage units in customers' homes in a certain region. To avoid potentially expensive spikes in demand, such as hot summer days that could cause blackouts, utilities will draw on the stored electricity in the GridPoint systems, Lewis said.

Having the storage units connected directly to the electricity grid allows the utility to pull the electricity from the disparate appliances, much like servers and PCs exchange data over the Internet.

"This supply-side technology can put elasticity into the electrical grid," said Lewis, adding that the deal involves a product designed specifically for utilities. "We can do that because we have a network operations center, so we can control a set of boxes in the field."

Peak shaving
Peak energy periods can be very costly to utilities, which may have to ramp up production by putting reserved power plants online or to expand capacity by building new power plants. With record heat in the U.S. this summer, for example, utilities in Northeastern states and California urged consumers to scale back use of air conditioning and other power-intensive activities.

Programs to lower energy consumption during the day have been around for some time by utilities interested in balancing energy demand, Lewis said. For example, people could agree to have their radio-equipped water heaters turned off or their air conditioner thermostats turned up during the day.

Lewis said these "negawatt" programs are aimed at smoothing out demand over the course of a day to avoid overtaxing the electrical grid. By contrast, GridPoint is trying to add more supply to the grid network. "It's discharging during periods of grid stress," he said.

The partnership calls for utilities to actually own the storage units and have a "service relationship" with the customer that includes the storage device, he added. But GridPoint also sells directly to consumers and is trying to develop partnerships with building companies that would pre-install storage devices.

The company sells its $10,500 back-up power unit, GridPoint Protect, as a cleaner alternative to diesel generators--which have become more common in places like Florida, as it has been hit with devastating hurricanes in the last few years. The devices, equipped with an Intel PC running Windows CE, can be monitored and serviced over the Internet.

The $11,000 GridPoint Connect, a separate unit, is sold more on the basis of the economic benefit, Lewis said. It acts as a turnkey system, with an inverter and either 7 kilowatt-hours or 10 kilowatt-hours of storage, to accompany a solar electric system. And its data-collecting tools help consumers shave money off their bills.

"The computers in these boxes are making decisions with regards to energy based on the value of energy at that point in time and the historical consumption of that residence," Lewis said, adding that part of the company's management team has a background in software and communications.

Electricity tariffs that change over the course of the day to reflect fluctuations in demand are still not commonplace for U.S. consumers. However, the Energy Policy Act of 2005 (click for PDF) calls on state utility regulatory bodies to explore "time-based metering and communications" next year, which would allow customers to participate in "time-based pricing rate schedules and other demand response programs."

Another company that is trying to capitalize on "peak shaving" or "peak shifting" is Ice Energy, which makes an air-conditioner add-on that freezes water in the evening to cool the refrigerant, rather than run the AC during heat of the day.

Ice Energy sells its units directly to businesses but is also investigating ties with utilities including those in California that are struggling with the costs associated with meeting peak demand.

Extremely high summer temperatures that tax the grid, such as those happening this summer in the U.S., are happening more frequently, according to Ice Energy CEO Frank Ramirez.

"Utilities used to plan for what they call one in 10 (extremely high temperature) events. Now they are finding they are becoming one in three or one in four events," he said.

"The occurrence of sustained high temperatures is wreaking havoc on the ability to maintain the integrity of the grid," Ramirez said.

Need for Battery Power Runs Into Basic Hurdles of Science
Damon Darlin and Barnaby J. Feder

It always seems to happen: Long before it is time to stow your tray table, your laptop battery gives out, and you spend the rest of your cross-country trip reading the SkyMall catalog.

In the information age, people want their electronics everywhere they go, and they want them to be on all the time. But they rely on batteries that have not improved as rapidly as the devices they power. Moore’s Law, which offers a yardstick for the exponential advances in computer chips, has no counterpart in the world of batteries.

Researchers are certainly trying to improve the situation, in part because there is money to be made. Portable rechargeable batteries are expected to be a $6.2 billion market this year, and more than one billion batteries will be made by some of the largest electronics companies in the world: Sony, Sanyo, Matsushita and Samsung.

But scientists are running into some basic hurdles of chemistry and physics. The more energy they store in a small package, the more volatile and dangerous that package becomes.

The volatility of batteries in laptops, and those powering millions of portable consumer devices from cellphones to power drills, was made apparent Monday with Dell’s recall of 4.1 million laptop batteries. Dell said the batteries, made by Sony, could catch fire because of a problem in the manufacturing process.

Though the chance of a flaming notebook is small, the number of incidents involving burning batteries is rising each year because there are so many more devices using small and powerful power sources.

There is another pressing reason for the quest for improvements: battery-powered cars. An electric car needs a power source that is 2,000 times as powerful as a laptop battery. “That size would be extremely dangerous,” said Sanjeev Mukerjee, a chemistry and chemical biology professor at Northeastern University. “This technology has a downside, and that is that it is very sensitive to how it is manufactured.”

The potential for fire in a lithium-ion battery is a result of its chemical composition. Contained in that small package are all the elements needed for a fierce blaze: carbon, oxygen and a flammable fluid. The battery is made of a thin layer of lithium cobalt oxide, which serves as the cathode, and a strip of graphite, the anode. These are separated by a porous insulator and surrounded by fluid, a lithium salt electrolyte that happens to be highly flammable.

When the battery is charged, lithium ions on the cathode migrate to the anode. As the battery is used, the ions migrate back to provide the energy. In the charged state, the cathode without most of its ions is highly unstable. If a spark occurs, the temperature of the cathode can exceed 275 degrees.

That is hot enough to cause the cathode to decompose and release oxygen. A fire starts, and as heat builds the battery begins what scientists call a “thermal runaway.” In the case of the Sony-made batteries recalled by Dell, a microscopic metal particle that contaminated the electrolyte during manufacturing caused the spark.

Scientists are looking for new battery chemistry that does not involve carbon, oxygen and fuel. One route is to make an electrolyte that is not flammable, said Jai Prakash, associate professor of chemical engineering at the Illinois Institute of Technology. But much of the work is concentrated on replacing the cobalt-based cathode with magnesium. Others want to get the carbon out of the system. Sony, for instance, has a new generation of batteries that use tin.

Valence Technology, a maker of alternatives to lithium-ion batteries in Austin, Tex., uses a phosphate-based cathode. “Consumers do a lot of bad things to battery packs,” said James R. Akridge, Valence’s chief executive. “These provide an extra measure of safety if they shake it or smack it.”

Valence products are used in Segway scooters and hospital diagnostic equipment. But the company has no intentions of competing against the large lithium-ion battery makers in the market for consumer devices. Mr. Akridge said the big companies dominate because they compete on price, and “price is determined by scale.”

As consumers demand more from notebooks and cellphones, the electronics industry may need a whole new way of thinking about power supplies. The most likely candidates are miniaturized versions of the fuel cells that are being developed for cars. Fuel cells use hydrogen, but because hydrogen is hard to store and handle, many microcells get hydrogen from fuels like methanol.

Microcells intrigue companies that make laptops, cellphones and other portable devices because they can store far more energy than comparably sized batteries. Methanol-based microcells, for instance, have roughly 10 times the energy density, creating the prospect of wireless laptops that could run all day without recharging, according to Rick Cooper, vice president for business development of PolyFuel Inc. The company, based in Mountain View, Calif., supplies components to several Asian manufacturers that have been working on such devices.

“The energy capacity of batteries is increasing 5 percent to 8 percent annually, but demand is increasing exponentially,” Mr. Cooper said.

The tweaking of materials and chemicals in the lithium-ion battery will extend its usefulness for at least another decade or more, said Gao Liu, a scientist at Lawrence Berkeley National Laboratory. He expects innovation to come slowly.

“We don’t see any new energy storage devices,” Mr. Liu said. The best bet for the future is probably fuel cells, he said, but it may be more than a decade before they start appearing in mass-market portable devices.

Microcells have been just over the industry’s horizon since Toshiba demonstrated a prototype at a trade show in 2003. Pulling together all of the components has proved more challenging than fuel cell advocates predicted.

Manufacturers of fuel cells have been looking to the military and niche markets like users of professional video cameras as their first customers.

Nanotechnology, the fast-developing field that involves manipulating materials at scales measured in billionths of a meter, is likely to play a significant role in the future of consumer batteries. One essential for further development of current battery designs is the ability to cram more energy into today’s packaging. Nanoscale processes could be used to make the surfaces of electrodes more porous, creating a larger surface area for chemical reactions.

Nanotechnology could also help improve the performance of competing technology like fuel cells. “Designer” molecules and films that could act as improved catalysts in fuel cells are a hot research area.

But to some nanotechnology companies, consumer batteries are too competitive to be a high priority. Altair Nanotechnologies, based in Reno, Nev., claims that its technology has safety advantages over lithium-ion batteries, but Altair executives say the difference would not be enough to win over makers of laptops and cellphones. Nor could Altair compete on cost.

“If you go into laptops, you are competing with well-entrenched companies that make millions of batteries and have been doing it for years,” said Alan J. Gotcher, Altair’s chief executive.

YouTube Fixes Stuff During Outage
Jon Swartz and Michelle Kessler

A database glitch plunged popular video-sharing website YouTube into darkness for at least five hours Tuesday, leaving millions of users without service.

Company officials did not return phone calls, offering only a brief statement.

"We are experiencing a temporary site outage due to a database-related issue," said Julie Supan, YouTube's senior marketing director, in a statement at noon PT. "Our engineering team expects the site to be up and running in the next few hours."

Keynote Systems, which tracks Internet performance, began fielding calls from YouTube users at 8 a.m.. By 1 p.m., the site had been restored.

In the morning, YouTube's site with video links was replaced with a cryptic note and diagram saying it was "putting out some new features, sweeping out the cobwebs and zapping a few gremlins."

By noon, the note had been changed: "OK. We admit it. We're fixing stuff, but we'll be up soon."

The abrupt outage sent YouTube's fervent users into a tizzy for several hours. "NOOOOOO," a blogger named Spartan_mc declared. "Youtube is down, the world is ending!!!!! Now how will (I) waste away the last hour and a half here at work."

"All over the world people are screaming at the top of their lungs," chimed in blogger Bezahlt.org.

Social-networking site MySpace.com and other popular Internet destinations routinely shut down sections of their services for a few minutes, usually at night, for maintenance. But they are rarely down for an extended period during normal business hours.

YouTube is among the fastest-growing websites. It logged 16 million unique visitors in the USA in July, according to researcher ComScore Media Metrix. That was the first time YouTube broke into ComScore's Top 50 list of most-popular websites. Among websites with video, Yahoo Video is tops, with 21.1 million unique viewers in the USA in July.

The outage occurred as YouTube faces competition from Yahoo, MySpace, Google, Microsoft MSN, AOL and a swarm of smaller sites, such as Revver. Google declined to say whether it gained viewers during the outage.

YouTube site specializes in short — typically 2-minute — homemade, comic videos created by users. YouTube serves as a quick entertainment break for viewers with broadband computer connections at work or home.

In June, 2.5 billion videos were watched on YouTube, the company said last month. More than 65,000 videos uploaded daily at that time to YouTube, up from around 50,000 in May.

'Digital Prohibition' Inhibits YouTube Culture

Legal obstacles holding back user generated content, warns Lawrence Lessig
Tom Sanders

Copyright restrictions are constraining the user generation content revolution and requires a revolution challenging to force a breakthrough, Stanford law professor Lawrence Lessig charged in an opening keynote at the Linuxworld conference in San Francisco.

Lessig is a founder of the Center for Internet and Society, co-created the Creative Commons license and is a known proponent of reduced legal restrictions on copyright, trademark and radio frequency spectrum, particularly in technology applications.

Copyright restrictions are designed for a world in which a small elite creates media for the masses, but such a structure is an historical anomaly, Lessig pointed out. Consumers were used to produce and create their own entertainment before the creation of mass media.

"Never before had a production been as concentrated and as professionalized, " Lessig noted.

Lessig described the original situation as a read-write structure, where individuals are able to both create and consume media. The copyright restrictions of the twentieth century however form the equivalent of a "read only" culture.

Examples of the "read-write" culture are commonly found on services like YouTube, where consumers mix and match existing media to create new media and express opinions, exercise criticism or propagate political views.

"The law as currently architected smothers this read write creativity," said Lessig.

He added that artist have a right to be compensated for their work, but charged that society needs to strike a balance between preventing piracy and the ability for individuals to "build and spread our culture".

Children today are already practicing the read-write culture, Lessig pointed out.

"We can't kill this, only criminalize it. We can't force them to become the same couch potatoes that we are. We can only make them pirates."

Lessig concluded that we are living in an "age of prohibition" and called upon open source developers to create technologies that challenge the notions around copyright. They have demonstrated an ability to challenge conventions before when they defeated the Windows monopoly, he argued.
Several artists for instance have released music under the creative commons license that Lessig co-created, promoting others to mix and use it to create new culture forms. He also referred to services such the Gnash free Flash initiative and the Ogg Vorbis open source audio encoding format.

Open culture isn't just an idealistic, left-wing project, Lessig stressed. It will also foster economic growth.

"Only you can teach that to those outside of your world," Lessig told delegates at Linuxworld. "Elsewhere too few of us get it."

News From The North

The TankGirl Diaries


First Verdicts in a Large Finnish Filesharing Case

A trial against two young Finnish filesharers in Lahti, a city of 100.000 inhabitants, started a long chain of trials stemming from the late 2004 raid of Finreactor, a popular Finnish torrent site with 10.000 registered members at the time of the raid. The site including a tracker was running on a rented server in Holland. The server was confiscated and delivered to the Finnish police who thus got access to the user information and could further identify the users. By studying the transfer logs from the ratio based tracker the prosecutors picked 60 people to be charged, including the site administrators and a selection of most active sharers.

The court in Lahti concluded that copyright infringement had taken place but decided not to punish the defendants due to their young age. However, the two boys were ordered to pay compensations to the copyright owners, 2.300 euros (2.830 USD) and 1.150 euros (1.415 USD) respectively. The applied criterion for the compensations was 10 % of the retail price of the shared items. The demand of the plaintiffs was 60.000 euros (74.000 USD) . The defendants announced in the court that they fail to see anything criminal in what they did.

Similar trials will continue in various Finnish cities throughout the autumn until all 60 defendants have got their verdicts. The total compensation demands of the copyright holders - including software, movie and music companies - from the 60 defendants are 3.5 million euros (4.3 million USD). The news from these Finreactor trials will contrast sharply the public filesharing debate going on in the neighbouring Sweden. There the political pressure to legalize private filesharing just keeps growing, and the Swedish Pirate Party is ready to take the fight for legal filesharing into the Swedish Parliament.


Wanna Bet?

NordicBet, the Scandinavian branch of betting company Betpoint Ltd, has Pirate Party's election result as one of its five political betting targets. The bet is on whether the Pirates will reach the 4 % vote threshold and make it to the Parliament. Yesterday the odds were 40:1 against Pirate Party making it, with wins limited to 100.000 crowns (13.800 USD) per bet. Seemingly there were quite a few gamblers willing to bet for the pirates with those odds, as today the odds had dropped to 25:1. Still a good chance to make big money with a fairly small bet in case the Pirates make it... :D


Hardline Justice Minister Softening Up

TV4.se reports how hardline Justice Minister Thomas Bodström - the main government proponent for stricter copyright laws and for the active harassment of filesharers - seems to be softening up. He has admitted what everybody already knows: that the new stricter copyright law has proven totally ineffective if not irrelevant to the Swedish filesharers. They keep sharing files whatever the law says.

Following Pirate Party-promoted launching of Relakks, a p2p-friendly anonymous proxy service, Bodström has come out with a press release where he calls for an evaluation of the new law. He also wants to hurry up the development of consumer-friendly legal alternatives to the highly popular pirate sources. Cecilia Renfors, the Director of the Swedish Broadcasting Commission, has been called as a 'neutral' party to study how the new law should be changed and how the 'legal alternatives' could be developed more rapidly. She has been given time to next May to come up with propositions.

Bodström thinks that there has been a positive development regarding the 'legal availability' of music and movies on Internet but things should move forward faster. "Both copyright owners and consumers should benefit from more and better legal alternatives becoming available", writes Bodström in his press release.


Pirates Back In The Media

With only a month to the Swedish parliamentary election, the Pirate Party is again very much in the headlines. Following the party-sponsored launching of the anonymizing service Relakks the visitor counts on party's website have skyrocketed, and the membership has started to grow rapidly again. With its 8168 members the party is clearly larger than the Greens (7249 members) and may well catch Moderata ungdomsförbundet (8503 members), the youth section of Moderaterna, the second largest party in Sweden.

Opinion polls give mixed messages about party's prospects in the election. On all online polls the pirates have been doing very well while more traditional polls based on phone calls to voters give almost insignificant support figures for them. One reason for this discrepancy may be the fact that the phone polls are still targeting only people with old fashion landline phone connections while virtually all younger and more modern Swedes have long ago switched to using cellular phones only. Should the pirates turn out to be succesful in the election, the polling institutes will seriously have to consider updaing their old fashioned sampling practices to avoid systematic errors. On September 17 we will know.

The NordicBet betting odds for the Pirate Party are 1:20 at the moment.


Jonas Birgersson, the Man Behind Relakks, Talks

Jonas Birgersson, the managing director of stock-listed company Labs2, is the man behind the new pirate service Relakks that makes possible anonymous filesharing. The service got world famous practically in a day with the special promotional help from the Swedish Pirates.

"As I see it, it is not filesharing that is important", says Birgersson in an interview to di.se, "but rather the access to the entire Internet without limitations on the information being accessed or software being used, and without fear of retaliation."

Jonas Birgersson sees three reasons why Relakks is needed.

First reason is that in countries like Iran and China the access to Internet is censored. With services like Relakks people can get access to all information on Internet.

Second reason is that in many countries, e.g. in USA, service providers block access to certain services on the net for commercial reasons. For example they may prevent their customers from using other IP-telephone operators.

Third reason are the cases of compromised privacy like AOL's recent misjudged releasing of log files that revealed surfing habits of individual customers. "Relakks opens the possibility to give a better service to Americans, with high security and the house in order", says Birgersson.

But is it not enough for service providers in China, Iran and USA just to block all traffic to Relakks servers and thereby prevent their customers from using the service? "We have checked this from the earlier providers of similar services, even if they offered only narrowband services, and we concluded that it is not so difficult to stay a step ahead of the censors."

There is already a lot of speculation on the net whether Relakks will evolve into a safe haven for serious criminals, terrorists and pedophiles. "Relakks nor any other Swedish Internet service is a free zone for serious criminality. Any crime punishable with minimum two years of jail gives the police access to traffic data from Relakks as from any other Swedish operator." Birgersson also wants to point out that there is already a block list in use in Sweden for child porn sites. All Swedish operators obey this list, and so does also Relakks.

As the service is prepaid, just like a prepaid phone card, Relakks is not allowed to collect any other information than what the customer has given. If the police requests for information about a specific customer, Relakks has nothing else to give but the information given by the customer herself.

When asked whether this is a calculated approach, so that there would be as little information to give as possible, Birgersson says: "No. When we started figuring out Relakks service, we opted for prepayment mainly to minimize credit risks. We also understand that there are users who are nervous to give out their social security numbers. And as we have customers from the entire world, there would be no way to control such numbers anyway."

And why the co-operation with Pirate Party?

"It is in our plans to create a partner program where we would reward anybody finding us new customers with a few crowns. Pirate Party was simply the first and the fastest partner to do that, but later on we will have also other partners from other directions."


Book review

Convergence Culture: Where Old and New Media Collide
author Henry Jenkins
pages 336
publisher New York University Press
rating 10
reviewer Ravi Purushotma
ISBN 0814742815
summary Convergence Culture offers numerous insights on how technology and media professionals can forge better relationships with their customers

In one example, he follows the progression of the Harry Potter franchise after Warner Brothers purchased the film rights. In the interest of protecting their trademark, the studio sent out cease-and-desist letters to an online network of pre/teen [largely] girls who had been writing and sharing stories about Harry Potter as a way of learning to improve their writing skills. Rather than desisting, they coordinated a global protest that became a major P.R. headache for Warner Brothers -- who ultimately had to back down. This is likened to the confused message LucasFilms sent its customers when its movie division attempted to litigate control of the Star Wars storyline away from fans, while at the same LucasArts was trying to encourage players of Star Wars Gallaxies to explore and expand the Star Wars universe.

By themselves, the case studies are perhaps not that dissimilar from the many other accounts of industry execs completely botching their community relations. However, as the director of the Comparative Media Studies program at MIT, Jenkins adds some insightful perspectives on thinking about technology and the structuring of new-media companies in response to internet communities. Contrasting the typical response of U.S. companies to technologies like filesharing, he looks at the attitudes of Japanese anime and manga producers -- outlining how their more open attitudes could have influenced the current popularity of Japanese-origin franchises within the United States. Similarly, he looks at the corporate structure behind the Matrix franchise (in particular the Enter The Matrix video game), demonstrating how elements of The Matrix design process could serve as a model for other industries.

The book also contains a second thread running through it looking at 'collective intelligence.' Basically, this can be thought of as a sort of Wisdom of Crowds view of what happens when customers become so tightly networked with one another that they can overpower media producers. One chapter looks at the tv series Survivor and how online spoiler teams shared satellite data, local knowledge and social networks to determine the show's conclusion before it aired. Rather than simply fighting efforts such as these as was done with Survivor, Jenkins outlines examples of how collective intelligence communities could be harnessed to advance products or causes. Using the extensive accomplishments of the 600,000 players in the popular Alternate Reality Game I Love Bees as a model for what is ultimately possible, he outlines how viral marketing, politics and other domains are changing in response to the increasing collaborative abilities of networked fans.

Having previously taken classes with Professor Jenkins, I had long been looking forward to the release of this book. Reading it, I was glad to find the same clear focus on real-world examples and practical applications that was emphasized in his classes. Overall, it reads far more similar to titles like Steven Johnson's Everything Bad is Good for You or Howard Rheingold's Smart Mobs than anything you'd expect from an academic professor.

As the subtitle "where old and new media collide" suggests, the book contains a pretty even split between traditional broadcast/cinematic media and web/video game/mobile media. Anyone interested only in a single media form probably won't find this book that different from any others on their topic. Rather, most of the more unique insights come from Jenkins's understanding of how these different media forms interact to re-enforce one another, and the ways in which consumers navigate between multiple media forms and online channels.

While most of the theories put forth in the book will likely remain relevant for years to come, a few of the case studies are already showing their age. For example, the Star Wars Gallaxies discussion appears to be written before the recent shakeup at Sony Online. This means readers will need to go beyond the book to remain fully up-to-date with some of the examples.

Overall, any reader should find Convergence Culture an extensively researched book using a conversational writing style that makes it truly engaging to read and clearly accessible. However, those in charge of managing community relations, online presence or designing media to cross multiple platforms would likely benefit from it the most.

Disclaimer Notice: The review author is a former MIT student who took classes taught by Henry Jenkins on this topic."

The Future of the Patents Battle, and the July 12th Hearing

The software patents battle will return this Winter. Nothing much is happening this week, so this isn't a call to arms. This entry is a quick review, a look at what's coming, and a late report from the European Commission's July 12th public hearing "Future Patent Policy in Europe"


(Note: the section links don't work in Planet syndications)
Background: European patent governance
The previous battle
The coming battle
What will be our difficulties
What factors are on our side
My 3-minute intervention on July 12th

I've gone into some length, but this is still a summary. If you think I've over-simplified or left anything out, leave a comment or email me at ciaran at fsfe dot org.
Background: European patent governance

There are three powers in the patent system:

1. The law makers - write the rules defining what is patentable
2. The patent office - read the law and approve/reject patent applications
3. The national courts - decide whether a patent is valid or not when litigation occurs

This conforms to the traditional European form of governance: there is a separation of the administrative/executive (patent offices), the legislative (law makers), and the judicial (the courts). The theory is that by seperating these powers, a failure in one power can be spotted and fixed by one or two of the others.

The current status of software patents is that the law says that software is not patentable, the patent offices are approving software patent applications, and the national courts are mostly ruling that software patents are invalid.

Side note: The administrative/executive branch of the patent system suffers from bad design. The EPO answers to no one. They can, if they choose, grant patents for absolutely anything. They are instructed to follow the European Patent Convention (EPC), but there is no one with the power review the practice of the EPO and to fix the EPO if the public, or the law makers, or the judiciary believes that the EPC is not being adhered to. Fixing this design flaw might be the path we eventually have to take to secure a swpat-free EU.

The previous battle

The last battle was about legislation. The law makers were asked to change the law to make software patentable. We countered by asking the law makers to clarify the law to a point where the patent office could no longer justify the granting of software patents.

In July 2005, the proposal to change the legislation was dropped entirely. So neither side won. We didn't win, but we did something very significant. We showed that we are a capable player in the legislative arena. Those in favour of software patents evaluated our ability and decided that the risk that we might win was too high, so they walked away.

The coming battle

Now, those in favour of software patent have decided to try modifying the judiciary power. They don't like that the national courts are dismissing cases where software patent holders try to litigate against people.

They've found two ways to get at the judiciary power. One is the "Community Patent", and the other is the EPLA (European Patent Litigation Agreement).

There are proposals, backed by those in favour of software patents, for either of these to put the European Patent Office (EPO) charge of the judiciary power. So instead of patent litigation cases being decided by the national courts, they would be decided by special patent courts with judges appointed by the EPO. ...and the EPO are the people who say that software is patentable. If this happens, software patents will exist in every measurable sense in the EU.

The argument for having this one court is that a single EU-wide court would be more cost effective and would create EU-wide precedent and prevent conflicting results between states. The argument for giving the EPO control over this court is that the court should be made of experts and the EPO are the experts.

What will be our difficulties

1. In the last battle, we proved ourselves to be particularly capable at working with the European Parliament (EP), but in the Community Patent, the EP have only an advisory role, and in the EPLA they have no influence.
2. The procedure is different. In the last battle, we expended a lot of expert-time in figuring out timetables and what power each body has at each stage and which milestones have effects on the end result that are irreversible or hard to reverse.
3. The media spotlight isn't one this issue anymore.
4. Many of us, the anti-swpat campaigners, have turned our attention to other things.

What factors are on our side

1. There are other factors involved which could greatly delay this. The Community Patent project began in 1968! So it could go on for a long time. The other side of this is that there are people who would love to see this get finished, so if it ever looks finishable, there will be a lot of people pushing to rush it to the finish line.
2. Both the Community Patent and the EPLA are aimed at fixing a perceived problem that patent litigation is too expensive and bureaucratic. This is good for us because it will be hard for anyone to argue simultaneously both that the patent system is very cumbersome and that it should be expanded.
3. The idea of giving the administrative/executive branch control over the judicial branch contradicts the European idea of democracy (and probably most or all regions's ideas of democracy). If this inappropriateness can be pointed out to the public and the media, it shold be easily understandable.

My 3-minute intervention on July 12th


Below is exactly what I said for my intervention at the hearing. Given more time, I could have done better, but there were limits to what anything I said could achieve, so it wouldn't have been worthwhile to spend much more time on it anyway. My aims were to register the FSFE does not support either current proposal, that democraticly questionable processes were not going unnoticed, and to remind those present that free software must be considered. I was limited to 3 minutes and I had to speak slowly to ensure that the translators could keep up.

My intervention

Last July, the European Parliament rejected a proposal to codify EPO practice with regards to software patents.

One year later, here we are in a room full of businesses and patent lawyers, discussing a proposal to codify EPO practice.

Without any directly elected representatives, and without journalists and the public, it's certainly quieter, but it is not very democratic.

Business is part of the EU, but there are also people.

I'm not fundamentally against a community-wide patent. The problem is in the implementation.

Separation of executive and judiciary is a cornerstone of European democracy.

The EPO is out of control, but instead of being reined in, it is being given control of the judiciary.

Software can be made and distributed like cars, but it can also be made and distributed in many other models. For this reason, patents affect software differently.

Patents are incompatible with many models used by software SMEs, as has been mentioned by some today.

Patents are also incompatible with many models used by Free Software. This is not just about cost, so it doesn't matter if the costs are doubled or halved.

Free Software is software which can be examined, modified, and re-published. Users of Free Software are enabled and free to help themselves and each other.

Software is an area prone to monopolies. This morning, the European Commission felt the need to fine one company 280 million euro. Software is the only sector that has required such intervention by the European Commission.

Free Software such as the GNU/Linux operating system should not be stiffled because a litigation problem was solved carelessly.

Man on a Mission
Charles J. Murray

Vindication arrived for Stephen Gass on the afternoon of June 28, 2006, when someone finally agreed with him. It had been nearly seven years since Gass invented his skin-sensing table saw, and in that time he’d begun to wonder if anyone would truly see the wisdom behind his device. Over the years, the responses he received from the power tool industry graduated from indifference to hostility. He’d gone from being a rejected outsider to a festering industry sore. And by 2006, Gass himself had considered quitting many times.

But on that June day, everything changed. Someone understood. Acting on a petition from Gass, engineers at the U.S. Consumer Product Safety Commission recommended that the government begin a “rulemaking process” that could result in mandatory safety standards for table saws. Days later, the agency’s commissioners shocked the power tool industry by concurring with the recommendation. They saw the wisdom in his petition. Suddenly, the ultimate outsider joined the game, and now he was holding a strong hand.

“Here we had an unbiased government agency saying these saws are unreasonably dangerous,” Gass says now. “So, yes, I did feel somewhat vindicated.”

To be sure, the decision could mean little for Gass’s tiny, barn-based business, known as SawStop LLC. Power tool makers undoubtedly will search for other ways to satisfy the Consumer Product Safety Commission, without using SawStop technology. But for Gass, it’s the biggest victory yet in what has been an uncertain, uphill battle. In many respects, his public clash has made Gass a poster child for all inventors who deal with the so-called “not invented here syndrome.” Moreover, Gass’s story adds another human dimension to such dramas, seeing as how it also deals with the very commonplace — and tragic — loss of human fingers. By sitting down in his barn one afternoon in 1999 and finding an innovative way to reduce the sudden amputation of fingers, Gass raised the level of discussion — as well as the level of emotion — in an industry that had long accepted a certain, brutal, status quo. That’s why he sees the Consumer Product Safety Commission’s decision as a form of recognition.
“I suspect that some of the executives at the major tool companies are going to be pretty unhappy about it,” he says.

Meager Beginnings

When Gass first dreamed up the concept for SawStop, he never imagined his relationship with the power tool industry would ultimately be an adversarial one. Gass, now 42, was puttering in his barn-based woodwork shop in 1999 when his “Eureka!” moment struck. A patent attorney with a lifelong passion for woodworking, he wondered if it would be possible to stop a spinning, 4,000-rpm saw blade fast enough to prevent serious injury after an inadvertent touch. Gass, who, in addition to being an attorney also holds a Ph.D. in physics from the University of California at San Diego, began to tick through possible sensing methods for such a project. Proximity sensors? Optical sensors to look for blood? Ultrasonic sensors to check for saw vibrations? After considering those possibilities and more for about 30 minutes, his mind began to settle on another method: electrical capacitance.

“Ultimately, it seemed like the most reliable technique would have to involve contact detection,” Gass recalls. “And because your body has an electrical capacitance, it offers the potential for that. I figured that if you put a voltage into the saw blade, your body could absorb some of that signal. Then the voltage in the saw blade would drop.”

Within a week, Gass formulated most of the idea’s details in his mind. Thirty days later, he completed his first working prototype. Initially, he tested the prototype by touching the side of the saw blade with a finger. And while that proved the saw could stop in a fraction of a second, he still didn’t know if it was quick enough to prevent serious injury. Gass wondered how deep a 4,000-rpm saw blade would cut into human flesh during the microseconds that it took to stop the blade. To answer that, he needed to touch the blade teeth.

“I came up with the idea of using hot dogs, and it worked pretty well,” Gass says. “It’s cheap, readily available, and you don’t get any protesters coming to your door.”

While doing the development work, Gass was still employed as a patent attorney. At the time, he planned to remain in his job, refining and patenting his new technology at night, ultimately licensing it to a table saw manufacturer for a healthy fee.

“I had no desire to start my own saw company, so I called a table saw manufacturer,” Gass remembers. Gass was surprised to find, however, that the table saw maker had no interest in licensing his technology. Undeterred, he partnered with two other lawyers in his firm and hired a consultant to refine the technology, making it look more like a production saw. The consultant, Function Engineering Inc., in Palo Alto, CA, built three new prototypes, which Gass took to the 2000 International Woodworking Machinery and Furniture Supply Fair (IWF), an industry trade show.

“We figured the public would see it and ask the manufacturers to put it on their saws, and then the manufacturers would license the technology from us,” Gass says.

And the public did see it. Despite the fact that Gass rented a tiny 10 × 10 ft booth in a remote third-floor location of the Atlanta-based convention center, crowds formed. They wanted to see the hot dog demonstration. They filled the booth, then spilled out into the aisle, anxious to see “the show,” which was scheduled every 30 minutes. One industry editor told Gass he’d never seen anything like it. “He told us it looked as if we were giving away hundred-dollar bills,” Gass says.

Battle Lines Drawn

Buoyed by the reaction at IWF, and by the prestigious receipt of a Chairman’s Safety Commendation from the U.S. Consumer Product Safety Commission in 2001, Gass and two colleagues from his law firm decided to pursue full-time product licensing. But within months they began to understand that the power tool industry wasn’t as excited about their technology as the attendees at the IWF show.

One CEO, traveling to Gass’s barn-based headquarters, expressed the industry’s position in terms that shocked Gass. “We sat around a little table and he said, ‘You guys have got to understand. Nobody in this industry likes you,’” Gass recalls. “‘You’ve created a huge problem here.’”

As an attorney, Gass is sympathetic with the industry position. The prospect of implementing a new technology like SawStop raises the potential of investing frightening amounts of capital to re-tool existing production lines.

“It’s not a simple issue for the manufacturers,” he explains. “They have whole product lines of saws. Once the genie is out of the bottle, there’s a huge product liability problem for any manufacturer who doesn’t have this. People will ask, ‘Why didn’t you have this on the saw you sold to us?’”

Product liability experts also hint at another reason for the industry’s lukewarm reaction to SawStop. Today’s saw manufacturers, they say, aren’t legally responsible for the horrific injuries associated with table saws. The unwritten rule applying to such situations is “use it at your own risk,” they say.

“Most of the time, legal cases are dismissed before they get to a jury because the judge agrees with the saw maker that this is an activity entered into by adults who have a general knowledge of the propensity of sharp edges to cut,” notes James T. O’Reilly, a professor of law and product liability expert at the University of Cincinnati College of Law.

Gass believes that the “use it at your risk” legal structure steals the motivation of saw manufacturers to adopt new safety technology. “What you have here is an economic disconnect,” Gass says. “The power tool companies are not paying for the injuries. You and I are paying in terms of medical premiums and workers’ comp. If the (power tool) industry had to pay, this technology would have been on those saws a long time ago.”

The power tool industry, however, has a very different view of the subject. Representatives cite a plethora of technical problems with SawStop technology, including too many “false positives” or “nuisance trips,” cost of replacement cartridges after the brake fires, and difficulties cutting conductive materials, such as moist wood. Moreover, they say, Gass is asking for an 8 percent royalty on each saw sold, a figure they describe as ridiculous.

With battle lines drawn on such issues, SawStop, LLC and the industry settled in for an adversarial relationship. In 2003, the industry, led by the Power Tool Institute, petitioned the U.S. Department of Justice’s Antitrust Division to be allowed to form a joint venture that would include Black & Decker Corp., Hitachi Koki U.S.A. Ltd., Robert Bosch Tools Corp. and others. Its goal: to develop technology for saw blade contact injury avoidance, with the possibility of creating its own skin sensing system.

Meanwhile, SawStop LLC raised the stakes again that same year, approaching the U.S. Consumer Product Safety Commission to initiate a federal mandate calling for table saws to incorporate new performance standards, which could potentially be satisfied by a technology like SawStop’s.

Opponents of SawStop’s technology — including the Power Tool Institute and Underwriters Laboratories — submitted lengthy comments to the Consumer Product Safety Commission, calling on the agency to reject SawStop’s petition. Many of the comments cited technical deficiencies and fear of a SawStop, LLC monopoly on such technology.

Changing the Status Quo

Following a contentious three-year process involving technical analysis and sometimes-heated public comment, however, the agency granted Gass’s petition in June, setting into motion a series of complex legal steps. Power tool industry members have reacted coolly to the apparent setback, predicting it will have little impact.

“From a legal standpoint, it means nothing to the industry at this point, and it doesn’t change anything,” notes Daniel Lanier, an attorney who handles product liability cases for the power tool industry. “It doesn’t mean that SawStop technology is going to be required on all future saws.”

Indeed, representatives of the U.S. Consumer Product Safety Commission state that the rulemaking process requires several complex steps and “can take years.” They add that it’s rare for the agency to mandate safety standards, preferring in all cases to have industries agree on voluntary standards. In essence, experts say, industry will do its best to help create voluntary standards that would obviate the need for SawStop.

While both sides await that rulemaking process, the big saw makers continue to develop new safety technology, which they hope will meet any new standards that may emerge. Through their joint venture — which has now been together for three years — they have reportedly created an improved mechanical guard, and a blade avoidance system “somewhat like SawStop’s,” a spokeswoman says.

Gass says the joint venture is just one more battle front in a large-scale assault that’s been leveled against him by the industry.

Still, he is encouraged by the recent U.S. Consumer Product Safety Commission decision in support of his petition. The decision, he says, sets the stage for change.

“It establishes the fact that the status quo won’t work,” Gass says. “The most likely practical ramification is that attorneys for people who’ve had their fingers cut off will use this as evidence to show that the saws are defective.”

In the meantime, however, table saw accidents continue. And many of those accidents cost money for employers, as well as insurance companies. Gerald Wheeler, a Little Rock-based cabinet door maker who has had one employee saved by SawStop, says he paid out $95,000 for two other employees who lost fingers before he bought the skin-sensing saw. By purchasing the higher-cost SawStop model, Wheeler says, he saves money by not having to having to pay accident claims.

Given such successes, Gass says he will continue to produce saws. Later this year, his company plans to roll out a contractor’s model. At some point, the company also says it will extend the skin-sensing technology to circular saws, band saws, and miter saws.

For Gass, his life’s work isn’t as lucrative as it was six years ago, when he worked as a patent attorney. He and his partners, he says, now draw salaries that are about one-third of what they made back then.

Still, they plan to forge ahead, building saws that will go head to head with those of the big manufacturers. Ultimately, the company’s founders hope that consumer demand for greater safety will help their company grow and simultaneously force the industry to adopt new safety measures.

“We’re not just doing this for the money,” Gass concludes. “We’re doing this because we feel good about it.”

Injuries from Bench and Table Saws

(Statistics from U.S. Consumer Product Safety Commission) A memorandum from the U.S. Consumer Product Safety Commission in June, 2006 states that “over a 10-15 year lifetime of a table saw, it would generate societal costs of $2,600 to $3,100” from blade contact injuries. Such saws typically have initial costs ranging from about $100 to $300.

The Thumb Was Still Attached

Even amidst the high-pitch whine of the spinning saw blade, Carl Seymour could hear the dreaded “ping.” He’d been hit. He felt the impact in his left thumb. A 12-year veteran of professional woodworking shops, Seymour knew what it meant and instinctively wrapped his good hand around the injured digit. He held tight and sprinted to the nearest bathroom, seized with all the panic-filled emotions of the moment.

“I stood there for about two or three minutes holding my thumb, praying that it wasn’t cut off,” Seymour recalls of the accident, which occurred last March. “I saw the blood dripping through my fingers, but when I opened my hand to check it, the thumb was still attached.”

To Seymour’s amazement, the thumb was not loosely attached. It was fully intact. No bones were showing. When he wiped away the blood, he discovered the wound was little more than a paper cut, not even requiring stitches to close up.

“As soon as he opened his hand and peeked in, he started jumping up and down and hollerin’ and whoopin’ with joy,” notes Gerald Wheeler, co-founder of Cabinet Door Shop (Little Rock, AR) where Seymour works. “The saw blade had barely gone through the first few layers of skin.”
Seymour’s thumb had been saved, however, not because of quick thinking or even good fortune, but because Cabinet Door Shop’s SawStop table saw sensed the difference between flesh and wood, stopped the spinning blade and retracting it back into its cabinet before the teeth could tear through Seymour’s ligaments, tendons and bones.

SawStop, LLC, developer of the technology, counts 52 such “saves,” but those 52 are minuscule when compared to the number of accidents that occur every year. The company currently has approximately 2,000 saws in the field, and hopes to sell about 3,000 in 2006.

“There’s no doubt that more people could be saved by this technology,” says Wheeler, who has seen other employees lose fingers in the past. “What’s so disheartening is that the technology is out there for the taking.” - CM

How SawStop Saves fingers

In developing SawStop, inventor Steve Gass faced two key challenges: sensing flesh and quickly stopping a spinning, 4,000-rpm blade.

To sense the touch of flesh, the unit employs a signal generator to induce a 500-KHz electrical sine wave current on the saw blade. When a woodworker touches the blade, that finger “becomes part of the blade,” Gass says. An electrode adjacent to the blade serves as a sensor and sends that signal back to electronic circuitry via a wire. In the circuitry, a Texas Instruments Digital Signal Processor (DSP) with an analog-to-digital converter then digitizes the analog signal. Every 6 µsec, the DSP samples the voltage at the blade, “looking” for a characteristic drop that would indicate a human body has drawn some current off the blade.
“That’s where we use our software algorithm, to look at the amplitude of the voltage as a function of time,” Gass explains.

One characteristic the algorithm looks for is a precipitous drop in the voltage as the teeth of the blade intermittently cut the skin and move through salty, wet tissue, which conducts electricity more effectively (as the conductivity rises, more current is drawn off the blade). By sensing the voltage as a function of time, the system infers electrical capacitance, and therefore determines if the blade is touching flesh.

Stopping the blade is another matter, made more difficult by the speed with which it must happen.

“You have to stop a 4,000-rpm blade in a few thousandths of a second, or it’s too late,” Gass says.

To do so, Gass employs a compressed spring, held back by a 10 thousandths of an inch fuse wire. When the DSP recognizes flesh, it signals a capacitor to send a surge of electrical current, vaporizing the fuse wire in approximately 15 millionths of a second. When the fuse wire vaporizes, it releases the spring brake, stopping the blade.

Gass says the blade typically stops in about three thousandths of a second.

“We have 52 saves,” he says. “And the vast majority of those walked away with nothing more than a tiny scratch.” - CM

Industry’s View

The following is an excerpt from a letter from the Power Tool Institute to the chairman of the U.S. Consumer Product Safety Commission on June 12, 2006.

“… The fact is that each manufacturer evaluated and assessed the technology, some more extensively than others, and each independently concluded that licensing the technology was not appropriate, particularly under the terms demanded by Mr. Gass. All of the table saw manufacturers identified significant problems associated with the technology, including such things as a propensity to inadvertently activate when cutting high moisture content wood. Additionally, at the time of each company’s evaluations, the technology was completely unproven and untested; only a prototype had been produced, and it had not been subject to any real world testing over time as would be necessary before any table saw manufacturer would introduce new technology such as this.” - CM

Read comments on SawStop technology through the Freedom of Information Act

Microsoft To Enable User-Created Xbox 360 Games

Talking on the eve of its Gamefest event in Seattle, Microsoft has revealed XNA Game Studio Express, a new product which will allow indie developers and students to develop simultaneously on Xbox 360 and PC, and share their games to others in a new Xbox 360 'Creators Club'.

The details of the new tech are as follows: XNA Game Studio Express will be available for free to anyone with a Windows XP-based PC, and will provide them with what's described as "Microsoft's next-generation platform for game development." In addition, by joining a "creators club" for an annual subscription fee of $99, users will be able to build, test and share their games on Xbox 360, as well as access a wealth of materials to help speed the game development progress.

[UPDATE - Further information on the new XNA product has been released by Microsoft as part of an official XNA FAQ, including plenty of specific details on how and when the service will debut, and what pre-requisites to game sharing and collaboration are included.]

In an official statement related to this major announcement, Microsoft suggested that the new product "...will democratize game development by delivering the necessary tools to hobbyists, students, indie developers and studios alike to help them bring their creative game ideas to life while nurturing game development talent, collaboration and sharing that will benefit the entire industry."

The games created with XNA Game Studio Express will not initially be available to regular Xbox 360 users, but a longer-term goal is to create a less restricted distribution market using Xbox Live - the company has commented that "Eventually, you’ll be able to distribute that code to other Xbox 360s, opening up a unique publishing avenue which will democratize game development on consoles."

In the meantime, a second XNA toolset named Game Studio Professional, originally scheduled tentatively for an early 2006 release, is now due in spring 2007, and is intended to cater more directly to professionals aiming for Windows and XBLA game releases.
Microsoft has enlisted the help of several partners for this major announcement - indie publisher/developer GarageGames, technology provider and creator of Marble Blast Ultra, has migrated both its Torque Shader Engine and new Torque Game Builder 2-D visual game designer over to the XNA Game Studio Express platform, and Autodesk announced that game developers and enthusiasts can now more easily incorporate content into XNA Game Studio Express via Autodesk's FBX file exchange format.

In addition, more than 10 universities and their game development schools — including University of Southern California, Georgia Tech College of Computing and Southern Methodist University Guildhall — have already pledged to integrate console game development and XNA Game Studio Express into their curricula for the first time, and Xbox 360 will be the only console at the center of all coursework.

The XNA Game Studio Express beta will be available Aug. 30, 2006, as a free download on Windows XP, for development on the Windows XP platform. The final version of XNA Game Studio Express will be available this holiday season.

Microsoft's general manager of the Game Developer Group, Chris Satchell, commented on this major announcement: "By unlocking retail Xbox 360 consoles for community-created games, we are ushering in a new era of cross-platform games based on the XNA platform. We are looking forward to the day when all the resulting talent-sharing and creativity transforms into a thriving community of user-created games on Xbox 360."

RIAA Attacks Vietnam Vet
p2pnet.net News Special

The US administration is in rigid lock-step with the corporate entertainment cartels as they use American tax-payer funded resources to further vested, hard-core commercial interests.

The Big Four record labels – Vivendi Universal (France), EMI (Great Britain), Sony BMG (Japan and Germany) and Warner Music (US) - started it, but the movie industry is now close behind and, using the willing mainstream media as their principal print and electronic outlets, the two sectors have successfully escalated a simple commercial concept, copyright infringement, to the level of major crime, ranking it with murder and rape.

At the same time, Dick Cheney and George W. Bush are prosecuting an immensely unpopular war in an oil-rich country far away from their own borders, using charges of 'terrorism' as their excuse.

With both of the above in mind, someone who stood up for his country in Iraq was Tyler Payne, a soldier who on his return to the US became a target of a different kind when he found himself on the Big Four's sue 'em all hit list.

But he isn't alone. Another man put his life on the line for America in another unpopular war and in return, his children are on notice that in 60 days they'll be victimized by RIAA lawyers.

Considering that RIAA stands for Recording Industry Association of America but only one of its owners, Warner Music, is American, that's particularly rich.

The man in question is Larry Scantlebury who flew for America in Vietnam.

Until his death, this June, Scantlebury was an Amazon reviewer. Here's his profile.

I served in Vietnam as a helicopter pilot in the early seventies. I was barely a man, if that at all. While that historical event has become twisted in the telling with self serving political rhetoric and apocryhpal movies, it had an enormous impact on those of us who served and the mothers and fathers and sisters and brothers who waited for us.

The cost was extraordinary in lives and pain, along with lost opportunity, hope and love. Not surprisingly, it changed my life.

I imagine that's what draws me to writers like DeMille, James Lee Burke, and Robert Crais. Their characters, Keith Landry, Dave Robicheaux and Joe Pike, successfully overcome a damaging adolescence and an indifferent public. But they still walk with a limp.

I like to write. I don't think you can write unless you read so to that end, I may read 100 books a year. I normally find something worthwhile in each of them. Rarely, say one book in 50, I'll give up on after 100 pages and write myself a note as to what was the impediment.

I have two novels completed, "Short Days, Long Nights" and "Ashes of our Fathers," but so far I only have dozens of rejection letters to show for the effort. Well, that's not entirely true. I can honestly say with pride while it would be nice I don't write to be published.

I think you have to take it all in stride. I mean everything. Like Bill Wilson wrote years ago, it really is 'one day at a time.'

I wrote this four years ago when I began writing reviews. Not much has changed. A few more grey hairs, a little thicker around the waist. I still have a lovely wife who puts up with my idiosyncratic behavior, and great sons. My oldest son, Colin, is a pilot with Southwest Airlines. I do have three gifted (of course) grandchildren, Sal, Bryant, and Vincent. You can see how the family divided along lines of heritage. My wife Deborah is an RN at a local hospital, looks great in scrubs and I am crazy about her.

I love music and am frequently torn between Ludwig Beethoven and Robert Plante. Someday I'll make a decision. But not today.

Favorite fiction? Probably Clavell's Shogun and Follet's Pillars. Non-fiction? Anything by Kearns, Charles Van Doren's Book of Knowledge, most of the prodigal Ambrose and Manchester. Oh yes. John Keegan. I find myself enjoying first time writers. William Landay and Michael Gruber come to mind.

30 days off? Hang out with Deborah on some island where there's no e-mail. My father taught me how to read books and be discerning with what I put in my head. The best gift he ever gave me. I miss him.

Larry Scantlebury; Ypsilanti, Michigan; 2005

And we're sure Larry's children miss their dad.

The people who run the record labels live in a very sick world, and in the meanwhile, p2pnet reader Rafael Venegas says in a comment post:

Pretending that heirs be made responsible for responding to a lawsuit against their father is a very interesting proposition. Some possible ramifications are...

How about sending to jail the children of criminals who die in jail without completing their sentences? The children would then complete the sentence, unless they prove their father was innocent. Surely some lawyer will make money on the new case.

How about suing a person who is dying or in an irreversible coma, so that the children would have the burden of defending their parent alleged actions?

Here we are deling with a new legal principle and a new low: Sue the dying old. You cannot loose.

But do not underestimate the legal system. A jurisprudence will be found to support the new principle. That is what jurisprudence is for.

If I were a descendant of Al Capone, I would move to another country, as they could send me to prision.

Meanwhile, Kimberly Arellanes, the wife of Frank Arellanes, another serving American soldier, is also in the RIAA's sights, and we're sure there are many more American service people among the 19,000 or so victims of the Big Four's twisted sue 'em all marketing campaign.

RIAA's "Abundance Of Sensitivity" Ends Harassment Of Grieving Family
Cory Doctorow

Last week, we posted about the family of a recently deceased defendant in a lawsuit by the RIAA being given 60 days to grieve before the RIAA went on to depose the dead man's children in a renewed suit against his estate. In the intervening days, the publicity about this despicable act -- suing the family of a dead man -- has mounted. Today, an RIAA spokesperson, Jonathan Lamy, contacted me today with this statement:
Our hearts go out to the Scantleberry family for their loss. We had decided to temporarily suspend the productive settlement discussions we were having with the family. Mr. Scantleberry had admitted that the infringer was his stepson, and we were in the process settling with him shortly before his passing. Out of an abundance of sensitivity, we have elected to drop this particular case.

I wrote back to ask him this followup question:
Where was the "abundance of sensitivity" when the RIAA failed to initially drop its case against the Scantleberry family following the death of the named defendant in the case? Given that this "abundance" only materialized within 24 hours of this story hitting several large news outlets and blogs isn't it fair to say that the RIAA is demonstrating sensitivity to its public image, and not its sensitivity to the Scantleberry family?
To which he declined to further comment.

This is par for the course with the RIAA. A year ago, the RIAA contacted me to say that a takedown notice sent on their behalf to RPG Films was a forgery. When I asked if they intended to sue RPG Films for real, and whether these forgeries were common, and whether the RIAA would investigate the forgery, RIAA Director of Communications Jenni Engebretsen promised me she'd get back to me with answers. After repeated emails and phone calls, I finally took the extraordinary step of calling her from a different, borrowed phone (suspecting that she was ducking my calls) and reached her -- only to be told that the RIAA had no further comment.

The RIAA's approach to PR is much like their approach to culture in general: read-only. The RIAA issues statements like the Pope emitting a bull, and we mortals may squabble over its meaning among ourselves, but they are not available to participate in any further discussion. This is reminiscent of the RIAA's approach to things like YouTube lipsynch videos: "our songs are released to be listened to and nothing more; should you dare to make them part of your life, we will use the copyright law we bought to break you."

Fox to Offer TV Downloads on MySpace
Greg Sandoval

A correction was made to this story. Read below for details.

Fox Entertainment Group is planning to distribute movies and TV shows to consumers from the company's network of Internet sites, including MySpace.com.

Fox, a division of News Corp., announced Monday that digital versions of TV shows such as "24" and "Prison Break," along with feature films, including "X-Men: The Last Stand," will eventually be available for download at Fox sites. Movies will go for $19.99, while TV episodes will cost $1.99.

The move is the latest sign that Hollywood studios are determined not to allow Apple Computer as much control over distribution digital content as the music industry handed over to Apple's music download site, iTunes. Apple has emerged as the gatekeeper when it comes to digital music, selling more songs than any other Web site. Movie and TV executives have said that they want a host of e-tailers offering their content.

Warner Bros. Entertainment has been among the most aggressive of the studios in the pursuit of such a strategy. In recent months, the company cut distribution deals with video-sharing site Guba and file-sharing system BitTorrent.

Apple already offers some Fox TV shows, but they can be watched only on Apple handheld products such as the iPod. In what Fox claims is an industry first, customers will be able to download a TV show or movie to two Windows-based computers, where each can then transfer the content to a single handheld device.

Fox's IGN Entertainment, which makes video games available for download, is providing the distribution platform for all of Fox's sites, and will also offer the first download, on the IGN's Direct2Drive Web site, sometime in October, Fox said in a statement.

The company did not disclose when its other sites will begin selling digital content.

CBS to Start Streaming Prime-Time Shows
Gary Gentile

CBS Television will begin showing episodes of several new and returning prime-time shows for free on the Internet, becoming the second network to do so.

CBS already sells downloads of episodes on Apple Computer Inc.'s iTunes Music Store and Google Inc.'s video store. In May, it launched an advertising-supported online channel called "innertube" to stream programming created just for the Web.

The network said Tuesday that starting next month it will begin streaming episodes of a new show, "Jericho," as well as returning shows "CSI: Crime Scene Investigation," "CSI: Miami," "CSI: NY," "NCIS," "Numbers" and "Survivor."

The shows will contain fewer ads than when they are shown on TV. The ads also will be shorter - typically 15 second to 30 seconds - and cannot be skipped, CBS said.

The shows will become available the day after they appear on TV. Episodes of "Jericho" and "Survivor" will remain available online for the entire season, while episodes of the other shows will be online for four weeks following their initial airing.

"Making our new and returning prime-time series available to our viewers is the next step in innertube's programming evolution," Larry Kramer, president of CBS Digital Media, said in a statement.

ABC began showing episodes of four prime-time shows, including "Lost" and "Desperate Housewives" for free online in May. The network was the first to sell episodes on iTunes last October.

ABC recently hailed the success of its later effort, saying that in May and June, the network's site showed 16 million video streams. The network is expected to expand its online offerings in the fall.

NBC does not yet offer prime-time ad-supported episodes online. The network has started a new Web site to stream the pilot episodes of two new shows, "Friday Night Lights" and "30 Rock."

The network also is offering DVDs of two other new shows "Studio 60" and "Kidnapped" through a partnership with Netflix Inc.

The Fox network has not yet begun showing episodes online, although it does sell episodes on iTunes.

YouTube Aims To Show Music Videos

Video sharing website YouTube is in talks with record labels about offering current and archive music videos.

YouTube co-founder Steve Chen told Reuters news agency it was hoped that within 18 months the site would "have every music video ever created".

The company said it planned to offer the videos free of charge.

YouTube hosts homemade videos, but pirated commercial clips can be found. It claims 60% of videos watched online in the US are viewed on YouTube.

The site plans to allow users to add the music videos to their own profiles and post reviews.

"Right now we're trying to very quickly determine how and what the model is to distribute this content and we're very aggressive in assisting the labels in trying to get the content on to YouTube," said Mr Chen.

Unauthorised videos

Warner Music Group and EMI confirmed to Reuters that they had been in discussions about the plan.

Earlier this year, YouTube agreed a deal with US broadcaster NBC to promote its autumn schedule on the website.

The broadcaster had previously had to ask YouTube to remove unauthorised footage of its shows posted by users.

The site was named one of Time magazine's 50 "coolest websites" of the year on Tuesday.

On the day of the announcement it suffered an unplanned breakdown lasting about six hours.

The outage was due to "database-related issue", YouTube spokeswoman Julie Supan said.

You Tube - Me Watch

Is the rapidly growing video hosting site in danger of being eclipsed by rapidly growing imitators?
Abram Sauer

Rapid growth, consumer control, hyper word-of-mouth promotion, hungry competitors. Welcome to YouTube's world.

For the uninitiated, YouTube is an online portal through which users can watch and share video content. Currently, it is not just a video site, it is the video site. It has achieved such status so rapidly that it seems fair to wonder where the service will go from here.

Founded in a garage in February 2005, YouTube officially launched to the world in December of that year. Popular media mentions helped the brand rocket to the upper echelons of online pronoun properties with names featuring "I," "Me," "My," and "You."

How high, how rapid? In the month of June, Nielsen/NetRatings data show that YouTube logged 19.6 million unique users; this represents a nearly 300 percent increase from January user-ship. And there appears to be no such thing as a summer lull. For the week of July 9, Nielsen reported 12.8 million unique viewers, up 75 percent from the previous week. That particular week, nearly half of all "Most Viewed" clips were of the 2006 World Cup Zidane "header." Some were recorded TV coverage, but many were user-created original videos such as Zidane head-butt compilation. (Warning: Clicking on the link may lead to countless wasted hours.)

User-created content is at the center of YouTube's web-2.0 pedigree: the idea that the "new" fluid Internet model will be based on user interaction and contribution. But, similar to blogs, copyrighted material is feeding YouTube's success. Copyrighted material for which YouTube does not own the rights. This puts YouTube in a tricky position for the possibility of selling out and compromises its ability to make money through advertising.

Buying out YouTube could put an established media (or other) investor at risk for lawsuits from competing media companies about hosting their content (currently not as big an issue given YouTube's neutrality.)

Advertising could be YouTube's means to profitability. Already, American television network NBC has inked a deal with the site to promote its shows (seen recently in advertising for the film "Pirates of the Caribbean"). But advertisers could seek to interfere with content when it runs counter to their own objectives. Currently it's not clear how much advertising the brand owners are willing to tolerate anyway. Earlier this year, YouTube co-founder Chad Hurley said in an interview with CNN Money, "We're going to sell sponsorships and direct advertisements. But we are building a community, and we don't want to bombard people with advertising."

This idea of "community," plus the site's reliance on copyrighted material, puts YouTube in a very interesting position as a brand. In the conventional sense, a brand is owned by two groups, the brand owner and the brand consumer. The "brand" is where the owner's desires and the users' perceptions meet. In YouTube's case, there are three brand owners. As in the conventional case, YouTube's actions and communications converge with the audience's perception to create the YouTube "brand." The third element is the copyright owners, who have realized that they can leverage YouTube to create interest in their properties, but are quick to pull content if it is not to their liking. YouTube has to manage its brand based on consumer perception, but it doesn't completely control its own product.

An added difficulty for YouTube is that it is lacking an emotional hook to differentiate itself from a pure functional service (think iPod). Users visit YouTube not based on any of the brand's perceived values, but on its ability to give them what they want, when and how they want it. The service offering can easily be replicated elsewhere, better. Online social network Friendster suffered from this and subsequently lost its dominance to MySpace.

YouTube's own challengers are advancing at a rapid rate. AOL is re-engineering its video site to mirror YouTube's success, and CNN is launching CNN Exchange, which will house user-contributed video features. Then there are sites like Eefoof.com, Panjea.com, Revver and Blip.TV, which share up to 50 percent of ad page revenue with the creator of the videos. Others like Dabble.com (currently in beta) sort through all video hosting sites (like YouTube and its competition) for search content, while specialty video sites like Pornotube concentrate on one point of interest.

If YouTube could be said to have a brand position, it might be one of selfless populism. Even if the site's ultimate goal is to make money, the user perception is that it is a power-to-the-people portal through which a community serves each other and the little guy can share and watch for free. Meanwhile, competitor Eefoof's tagline is "Make it. Post it. Profit!" The placement of the one exclamation mark sets a position that the contributor is motivated by more than just an altruistic sense of community.

With a potentially crippling copyright lawsuit on the horizon, it's almost impossible not to compare YouTube to Napster. It's easy to see a future in which YouTube will exist as a brand in recovery, scrapping for survival in a flooded marketplace it basically built. Its very name forever attached to a very short era.

Why You Can't Block Skype

"Talk is cheap and getting cheaper" proclaims a BBC article on VoIP and Skype. Not in the UAE it isn't, nor in other countries that ban internet telephony. But as users find myriad ways to get around the blocks, it's the short-sighted telcos who will ultimately lose out.

Who can forget these clever Chinese men who ran up US$1.25 million worth of calls in the UAE before being apprehended? They're an extreme example, but the reality is that in a heavily restricted, very expensive market, people will be attracted to piracy. Just look at P2P software, music and film piracy.

But when products start becoming affordable and accessible, such as with iTunes' music store, pirates evolve into paid customers. Skype itself isn't free if you want to call international landlines, but it's cheap and convenient enough that people are happy to pay those charges.

A failed ban

By trying to ban VoIP, Middle East telcos such as the UAE's Etisalat have effectively cut themselves out of the game. There are already tens of thousands of people using Skype and similar applications in the UAE alone. Skype.com is blocked, but people download the installer in the freezones. They get it from general software download sites. They get it via P2P. They get friends and family to email it to them. They get it on their laptop while overseas.

Despite the ban, the application works, because once installed, Skype is almost impossible to block. It uses encrypted tunnels, file transfers and instant messaging sessions, all of which are undetectable without filtering. AP Connections CTO Art Reisman set up a computer lab experiment to try and detect Skype traffic whizzing between two PCs. His analysis, according to an interview with Zdnet: "When examining the stream I failed to see any human discernible call set up, so without prior knowledge of a call being made I could never be certain if what I was seeing was a Skype call."

Despite promising to make VoIP legal since 2004, there's no real sign of voice telephony on the UAE horizon. Some predict a "ruling is expected" Q1 2007, but who really knows?

A futile block

The UAE has been so determined to protect the vast amounts of money that it earns from its overpriced telephony system that it doesn't just block Skype, it has removed the address from its DNS servers. People trying to access the page don't even get the regular: "This site has been blocked..."; instead a Network Error message appears. Google Skype blocked and the very first links refer to the block in the UAE.

Efonica, a VoIP company actually based in the UAE, is also blocked. So is the 100 million subscriber Vonage, as well as Net2phone, Webphone, DialPad, Babble, Go2Call, GizmoProject, IConnectHere, Lingo, MutualPhone, Netzero, Nikotel, Packet8, QuantumVoice, SipPhone, SunRocket, TeleSip, TerraCall, VoicePulse, and doubtless myriad others.

But plenty remain unblocked. MindSpring isn't yet blocked, nor is Jajah, VoipCheap, Wengo, BestNetCall, Glophone, StanaPhone, GnomeMeeting/Ekiga, Linphone, NetTelephone, STASoft, Adwell, Ageet or Yate (at least as of Monday 14th August 2006, when this article was published). Downloads.com lists 126 entries under "Web Phones". Google lists millions of pages for "net to phone calls", all of which have dozens of different ads for providers down the side.

Driving businesses away

Quite apart from being impossible to fully block, the ban on VoIP is foolish on so many levels. As well as losing Etisalat a share of the internet telephony pie, it's actively driving businesses away. Telco execs, such as British Telecom's Olivier Campenon, openly admit that there are international companies deciding not to set up in the UAE because of sky-high expensive and restricted communications costs.

It is difficult in cultures that are used to restrictiveness and social oppression to come to terms with an open, uncontrollable phenomenon like the internet. But there is no going back. The internet - and its users - will win every battle, circumvent every block, break every wall that governments, telcos and ISPs put up. The only answer is to embrace the net, and take advantage of the money that people are prepared to pay. And they are prepared to pay for VoIP, so trying to block it is just driving customers into the arms of other providers.

PGP Founder Phil Zimmermann and BorderWare Join Forces to Secure VoIP
Press Release

BorderWare is the First Enterprise Security Provider to License Zfone Technology

BorderWare Technologies Inc., and PGP (Pretty Good Privacy) founder Phil Zimmermann, industry leaders in IP communications security, privacy and compliance solutions, today announced an agreement to make BorderWare the first commercial licensee of Zfone, secure VoIP media encryption software, created by Zimmermann. This agreement tightly integrates Zfone with BorderWare's SIPassure VoIP Security Gateway, bringing a new level of security and ease of use to VoIP systems.

VoIP and related real-time communication applications, such as video conferencing and instant messaging, continue to attract considerable interest worldwide, with millions of active private and business VoIP users today. Carriers and enterprises are increasingly seeing the benefits of VoIP services that allow voice messaging and video conferencing to be conducted securely, like email, as communications are transferred freely over traditional phone networks and the Internet.

Together BorderWare and Phil Zimmermann have the security knowledge and IP expertise to provide secure VoIP solutions to the marketplace. BorderWare has a long standing history of being in the security industry for over 12 years protecting email, IM, web and VoIP, for the most demanding networks. Zimmerman has over 20 years experience specializing in cryptography and data security, and is the creator of Pretty Good Privacy, an email encryption software package that was originally made available on the Internet in 1991.

By integrating Zfone media encryption with SIPassure, BorderWare is extending the VoIP security provided to organizations from threats such as Spam to Denial-of-Service attacks to include eavesdropping, spying and wiretapping, while delivering the same level of security and convenience that organizations have come to expect from email.

"We're pleased to be the first security company to license Zfone, as it is poised to become the global standard for VoIP media encryption," said Tim Leisman, CEO of BorderWare. "Phil's reputation and proven track record in email and data encryption offer a very logical foundation for VoIP media encryption, and our vast experience in security makes an unbeatable and reputable combination to deliver VoIP security through the SIPassure offering."

"As VoIP grows into a replacement for the PSTN, we will absolutely need to protect it, or organized crime will be attacking it as intensively as they attack the rest of the Internet today," commented Phil Zimmerman. "VoIP is far more vulnerable to interception than the PSTN. Corporate VoIP calls can be captured and organized on disk for convenient point-and-click wiretapping by criminals half a world away. The combination of Zfone and BorderWare makes it easy to convert an entire installed base of office phones into secure phones in just one stroke, without having to replace them all with ZRTP-enabled phones."

Zfone is secure Voice over IP. It uses a new protocol called ZRTP, which is better than other approaches to secure VoIP because it achieves security without the reliance on a PKI (Public Key Infrastructure), key certification, trust models, certificate authorities or key management complexity that bedevils the email encryption world. It does not rely on SIP signaling for the key management, and in fact, does not rely on any servers at all. It performs its key agreements and key management in a pure peer-to-peer manner over the RTP packet stream. It interoperates with any standard SIP phone, but naturally only encrypts the call if you are calling another ZRTP enabled device or phone. This new protocol has been submitted to the IETF as a proposal for a public standard, to enable interoperability of SIP endpoints from different vendors.

SIPassure is the industries first VoIP Security Gateway - a new class of product that offers the best features of an enterprise firewall, an Application layer gateway (ALG) and a Session Border Controller (SBC) to take security for VoIP applications to the next level. SIPassure is designed to secure all Session Initiation Protocol (SIP) based applications including VoIP services, video conferencing and other messaging applications. SIPassure ensures that organizations using SIP-based applications are safe from abuse and service disruption from internal and external malicious attacks, interference spam and other related threats. SIPassure sets a new standard for price performance for both the enterprise and carrier markets.

Mozilla/Firefox Used by 68 Percent of UK Universities and Colleges

Mozilla-based programs and open source software in general are becoming increasingly accepted by UK universities and colleges, according to OSS Watch, a group that provides advice and guidance on free and open source software to UK educational institutions. The OSS Watch Survey 2006 reveals that 68% of the 114 institutions who responded to the survey have deployed Mozilla Firefox or the Mozilla Application Suite on at least some of their campus desktops (the exact term used by the survey was "Mozilla/Firefox browser", which most institutions would presumably infer to mean either Firefox or the Mozilla Application Suite).

The report notes that the 77% of higher education (degree and postgraduate) institutions and 64% of further education (post-16 secondary education) institutions that have deployed Mozilla/Firefox is a significant rise on the last survey in 2003, where these figures were just 44% and 32% respectively. Despite the rise in deployment, the report does note that very few institutions have installed Mozilla/Firefox on all desktops.

Nevertheless, other Mozilla-based products also fared well. 22% of institutions have Mozilla Thunderbird on their systems and 27% use Netscape (though some may be using versions that predate the first Mozilla-based release, Netscape 6). It appears, however, that Mozilla products are generally offered as alternatives rather than the default: every single university and college surveyed have Microsoft Internet Explorer installed on their systems. Microsoft Office also registered a 100% deployment rate.

JackSpratts 17-08-06 12:16 PM

Search Me?

Google Wants to Digitize Every Book. Publishers Say Read the Fine Print First.
Bob Thompson

STANFORD, Calif. If it is really true that Google is going to digitize the roughly 9 million books in the libraries of Stanford University, then you can be sure that the folks who brought you the world's most ambitious search engine will come, in due time, for call number E169 D3.

Google workers will pull Lillian Dean's 1950 travelogue "This Is Our Land" -- the story of one family's "pleasant and soul-satisfying auto journey across our continent" -- from a shelf in the second-floor stacks of the Cecil H. Green Library. They will place the slim blue volume on a book cart, wheel it into a Google truck backed up to the library's loading dock and whisk it a few miles southeast to the Googleplex, the $100 billion-plus company's sprawling, campuslike headquarters in Mountain View. There, at an undisclosed location, it will be scanned and added to the ever-expanding universe of digitally searchable knowledge.

Why undisclosed?

Because for one thing, in their race to assemble the greatest digital library the world has ever seen, Google's engineers have developed sophisticated technology they'd prefer their competitors not see.

And for another, perhaps -- though Google executives don't say so directly -- the library scanning program already has generated a little too much heat.

Last fall, the Authors Guild and a group of major publishing houses filed separate suits in U.S. District Court in Manhattan, charging Google with copyright infringement on a massive scale. Google argues that under the "fair use" provisions of copyright law, it has a perfect right to let its users search the text of copyrighted works -- as long as, once the search is complete, it only shows them what it calls "snippets" of those works. Nonsense, say the authors and publishers: In order to find and display those snippets, Google must first copy whole books without permission.

Books like E169 D3 -- which finds itself smack at the heart of this contested legal territory.

"Great example," says Andrew Herkovic, the communications and development director for Stanford's libraries, as he pauses to consider "This Is Our Land" during a Green Library tour.

There's a 10-1 chance, Herkovic estimates, that its copyright expired without being renewed, which would put it safely in the public domain.

But "if you were the corporate counsel for Stanford, Google or anybody else, is 10 to 1 good enough?"
California Dreamin'

To travel to Silicon Valley and consider the fate of E169 D3 -- along with the tens of millions of other volumes Google hopes to scan, from Stanford and a number of other major libraries -- is to open a window on the future of books in the digital age.

It's also to be swept up in the saga of Google itself: the seat-of-the-pants enterprise that computer science whizzes Sergey Brin and Larry Page moved out of their cramped quarters at Stanford in 1998 -- just eight years ago! -- and into Susan Wojcicki's garage.

Silicon Valley cliche to the contrary, Wojcicki -- who was a friend of a friend of Brin's with a new house and mortgage worries -- says she rented them more than just a garage. "They had the garage and three bedrooms and two bathrooms," she recalls, confirming and clarifying the Legend of the Google Guys. "Yes, they stored stuff in the garage and they had servers and they had meetings. But it was winter, so it was actually kind of cold."

Laughing, she continues:

"The washing machine was in the garage, too. That was considered a key asset at the time."

Wojcicki is now the company's vice president for product management. As such, she's been involved in the book-scanning project for years. She's talking, on this blue-sky California day, in a small conference room crammed with colorful beanbag chairs. Outside, the lunchtime barbecue is over -- Google is famous for its perpetually free food -- and people zip from building to building on bright yellow motorized scooters.

Digitizing all the world's books "was an idea of Sergey and Larry's from very early on," Wojcicki says. In fact, they were supposed to be working on a small library digitization project "when they wound up creating a search engine, which today we know as Google."

Brin and Page tried to "monetize" their brainchild by peddling it to established Internet companies. When that didn't work, they switched to an advertising strategy -- but one that differed fundamentally from most Web advertising at the time. Rather than intrusive banner ads or pop-ups, the pair went with text-only advertising tied to the key words Google searchers typed in.

Worked like a charm. In the summer of 2004, Google went public and the Google Guys became instant multibillionaires. Google employees and investors (Stanford prominent among them) got a lot richer as well.

You'd think building a company that "may supplant Microsoft as the most important -- and most profitable -- corporation ever created" (as journalist John Battelle put it in his 2005 book "The Search") would have kept the pair busy enough. But no: According to Wojcicki, they never lost sight of their digital library dream.

She first heard them talk about it in early 2000, when "we didn't have the resources even to do our core business." But Brin and Page did more than just talk, even then:

"They actually would do some of the math behind it," Wojcicki says, "and calculate, like, how many machines it would take, how many hours it would take. So they knew with certain assumptions that it was a doable project."

It got more doable as the bucks started pouring in.

Brin and Page set a team of engineers to work on scanning technology. Later, they asked Wojcicki and her people to start acquiring books to scan. The first move was to negotiate with publishers for access to their current books.

Product manager Adam Smith explains how these deals work. With the publisher's permission, Google scans the full texts and makes the books searchable by key word. Users can't download a whole book, Smith says, but they can see sample pages -- "publishers can set a dial in terms of how much" -- and Google offers links to sites where the books can be purchased.

"The partner program is really an online marketing tool to help publishers," says content partnerships director Jim Gerber, who works with Smith and Wojcicki. Most major houses have signed on.

So far, so good.

But as Googlers will tell you, over and over, the goal of Google Book Search -- the current name for the overall scanning program -- is "to create a comprehensive, full-text searchable database of all the world's books."

Not some. All.

"We're Google. We like doing things at scale," as Wojcicki puts it.

Problem was, fewer than 5 percent of "all the world's books" were in print and available from Google's publishing partners.

So where were the rest of them going to come from?
'The Final Encyclopedia'

Sometime in 2002, Stanford's head librarian, Michael Keller, got an invitation to an exclusive gathering that would change his professional life.

The host was Microsoft billionaire Paul Allen. The location was Allen's place in the San Juan Islands, near Seattle, where a dozen or so high-level information technologists convened with an agenda that grew out of Allen's fascination with a science fiction novel called "The Final Encyclopedia."

"You know that novel? Gordon Dickson?" Keller asks. "It informed Paul's thinking. His question was: Are we near the point where we can have every piece of information, every fact, every record of every opinion and attitude, every bit of criticism, all the history of all the world's decisions and so forth . . . in one giant database?"

Google's Page had been invited to the San Juans, too. He and Keller talked. In September 2003, Keller and Herkovic drove down to Mountain View to hear a proposition from Page and some other Googlers.

"It was a very short conversation," Keller says. "Basically they said, 'What do you think about digitizing every book in the library?' And we said, 'Yay!' "

Stanford's librarian scarcely needed convincing about what digitization could do. After the university digitized its card catalogue, he says, use of the collection jumped 50 percent -- simply because books were easier to find. Another successful Stanford venture, HighWire Press, offers access to digitized scholarly journal articles.

Meanwhile, the library has been scanning books itself for decades. A few years ago, it bought a Swiss-made robotic scanner and set it to work in the Green basement. With 50 such robots, Keller calculated -- at a capital cost of something like $75 million -- the university could digitize its library all by itself. He got a few foundations interested, but they backed off.

Small wonder that when the Google offer came along, Keller jumped at it.

Not without a lot of due diligence, however, mostly about the legality of including books like call number E169 D3.

"Copyright 1950, Vantage Press, Inc. All Rights Reserved" reads the notice in "This Is Our Land" -- a clear enough warning at the time, but what does it mean, more than half a century later? The book is not in print, a fact that is easily ascertained. But does Vantage Press even still exist? Was the copyright ever renewed, and if so, who owns it now: the publisher, the author or the author's heirs? These questions are not so easily answered.

Most important, perhaps, even assuming Dean's book is still under copyright, would it be "fair use" for Google to copy it anyway, allowing it to be searched but making only "snippets" of text available for public view? (Fair use is a section of U.S. copyright law that allows portions of a work to be reproduced without permission under certain circumstances -- for example, in criticism, news reporting and scholarship.)

Keller asked Stanford's general counsel to help him consider this question. He consulted Stanford law professors and outside copyright experts, too. "We end up having a big seance," he says. "We get lots of opinions."

He makes no bones about what he was really after. Having his library included in Google's searchable database will be a fine thing, he says, but the real benefit to Stanford will come from the newly digitized copies of its own books that the university will receive from Google as a quid pro quo.

Keller starts ticking off the reasons they'll be so important. One is preservation. "We don't have enough invested in this country," he says, "to assure that printed materials are going to persist." Another is the potential for truly complex search. There are far more sophisticated ways than Google's key word approach through which the library can help its users mine data.

A fully digitized library, Keller enthuses, will be an unbelievable new intellectual resource: a "test bed" in which everyone from anthropologists to zoologists can experiment with varieties of research impossible to imagine before.

Why not go for it?

When Google announced the library scanning project, in December 2004, it had four library partners besides Stanford. Two of them (Oxford University and the New York Public Library) took a legally cautious approach to digitization, permitting Google to copy only public domain works. A third, the University of Michigan, took the opposite view, asserting forcefully that Google could scan every one of its 7 million books. Harvard hedged its bets, initially agreeing only to a limited test program. Last week, the University of California signed on as a sixth Google partner. Its scanning program will include both public domain and copyrighted material.

Stanford, despite Keller's enthusiasm, is still hedging a bit. The librarian believes that scanning even in-print books would be legal. For the time being, however -- because who knows when those lawsuits will be resolved -- only out-of-print material is getting trucked down to Mountain View.

"But you've got to hear me talk about those two suits," Keller says. "I can't wait for them to come up."

He proceeds to explain, vehemently and at some length, why Google's use of copyrighted work is "transformative" (part of the legal definition of fair use) and why search doesn't hurt the marketplace for a book (another fair use criterion).

"Transforming all the words in the book into a giant index is wrong somehow? Give me a break," he says. "And someone's going to get paid for that? Give me a bigger break."

But getting paid is what it comes down to, he thinks -- and the lawsuits are a way to force the issue.

"If you look at what the publishers are asking," Keller says, "I think they're trying to get Google to negotiate."
Permission, Permission

If Allan Adler were in the same room with Keller, he'd likely be saying: Of course publishers want to negotiate! The whole problem is that Google won't!

Instead, the vice president for legal and government affairs for the Association of American Publishers sits in the trade association's offices at the foot of Capitol Hill, shaking his head at what he sees as the breathtaking arrogance of it all.

"In order to provide online searchability," Adler says, Google has to create "a proprietary database that in essence would be the world's largest digital library." Extremely impressive, way cool -- and clearly of enormous value, or the company wouldn't be spending so much to do it.

From New York, Authors Guild Executive Director Paul Aiken echoes Adler's incredulity. "It's an attempt to avoid licensing," Aiken says. "Without the ability to say no, a rights holder really has nothing to license."

All together now: What part of "we own the copyright" doesn't Google understand?

The Googlers certainly seemed to understand it, Adler says, when they negotiated with publishers for the right to copy and search their in-print books. Both sides were happy with that part of the Book Search program, which Google announced in October 2004.

Just two months later, the company announced its library deals.

It took a while for the publishers to react. Individual houses talked to Google, but it wasn't until the spring that they got concerned enough collectively to ask their trade association to intervene. In July, at the AAP's New York headquarters, Adler and other publishing representatives met with Smith, Gerber and Google CEO Eric Schmidt. The focus, Adler says, was on what to do with the millions of noncurrent titles that are not yet in the public domain.

"We were essentially told, 'Look, this is a problem of scalability,' " Adler says. Google was going to be "backing up trucks" to collect books for scanning. How could it puzzle out copyright status book by book?

Three weeks after the meeting, Google surprised the publishers with a unilateral move. The company had always said it would respect an author or publisher's request to "opt out" of the Book Search program after a book was scanned. Now it would accept opt-out requests in advance. To facilitate this, it declared a three-month scanning moratorium.

No, no, no, said the publishers. We should be in control here: You need us to opt in .

On Sept. 20, 2005, the Authors Guild filed a class action suit against Google, seeking statutory damages and an injunction to halt the scanning. A month later, five major publishers -- McGraw-Hill, Pearson Education, Penguin Group (USA), Simon & Schuster and John Wiley & Sons -- sued as well, with the support of the AAP. The publishers didn't ask for damages because they didn't want the focus to be on money.

Permission, permission is their refrain.

Listen long enough to both sides in this dispute and your head will spin with legal citations and passionate argument. But it's possible to isolate key points of contention. Among them:

• Copyright and fair use: As Google's Gerber puts it, the two sides obviously have a "fundamental difference about what is required to build an index of information." Because whole books or even whole pages are not displayed, Gerber and his colleagues argue, making copyrighted books searchable is the kind of "transformative use" permitted under copyright law. The publishers and the Authors Guild completely disagree, arguing that Google's unlicensed creation and retention of digital copies -- as well as its creation of additional copies for the libraries -- are illegal.

• Money and motivation: "Google would like the world to see this as a purely altruistic act on its part," says the AAP's Adler. Instead, he argues, searchable books are part of the company's "very brilliant economic strategy" for differentiating itself from competitive search engines. If you're worried that Yahoo, Microsoft or some unknown startup will scoop up lucrative market share, adding books to your database helps you stay ahead.

Google executives downplay this analysis but don't deny it. "The reason we're doing it," Wojcicki says, is that "making Google more comprehensive will yield a better search experience." Yes, that should lead -- eventually -- to more users and more revenue. But Book Search, she cautions, also represents a huge outlay of capital and isn't guaranteed to pay off anytime soon. It's a risk, as Gerber points out, you don't see publishers lining up to take.

• The Web search analogy: This gets a bit complicated, but it's crucial to understanding the dispute over Google's library scanning. Wojcicki, Smith, Gerber and Google attorney Alexander Macgillivray -- whom Smith calls "our thought leader" on intellectual property issues -- all insist that there's very little difference between the basic functioning of their Web search engine and Book Search.

The comparison goes like this:

To index the Web, Google first sends out software programs called "crawlers" that explore the online universe, link by link, making copies of every site they find -- just as Book Search makes a digital copy of every book it can lay its hands on. Web sites are protected by copyright, so if you don't want your site indexed by Google and its search brethren, you can "opt out," usually by employing a nifty technological watchdog (a file called robots.txt) that tells search engines to bug off.

Ditto for books, Google argues: Publishers and authors can opt out by informing Google that they don't want their books scanned and made searchable.

The analogy carries a risk for Google. Former Wired editor Kevin Kelly, one of the most influential journalists covering the digital revolution, sums it up this way: "If they capitulate on this with the publishers, they jeopardize their entire ability to search the Web."

Google executives don't sound worried. "No judge is going to rule that Web search is illegal," Macgillivray says. Still, they're on the horns of a dilemma. To use the Web analogy in court is on some level to bet the company, however favorable the odds.

No need to fret, say the publishers: The analogy fails in any case.

Most Web sites, they point out, are designed to be free. Books are not. As for the "opt out" requirement, as one high-ranking publishing executive explains it -- he doesn't want to be named; odds are he'll be dealing with Google in the future -- publishing houses have already installed a perfectly good, low-tech version of robots.txt.

"It's called a price," he says.

'Don't Be Evil'

Five years ago, Google's head of human resources rounded up a dozen or so early employees and asked them to try to identify the company's core values. As Battelle reports in "The Search," instead of the usual mush of corporate platitudes, a striking three-word slogan emerged: "Don't be evil."

As company mottos go, it was succinct, distinctive -- and just a tiny bit hard to live up to.

Eight years after Page and Brin incorporated Google and took over Wojcicki's garage, the company still retains some of its don't-be-evil halo. It offers a wonderfully efficient, free tool now used by countless millions around the globe. It does many things its own way, and a lot of them seem admirable: When it went public, for example, it insisted on a process that would circumvent Wall Street's usual insider cronyism and make Google stock equally available to anyone who could afford five shares.

But when you're suddenly richer than John D. Rockefeller and operating on a scale that invites Microsoft comparisons, can a backlash be far behind?

Both the APA's Adler and Kelly, the digital journalist, think it's already here. They cite, among other things, Google's morally questionable decision to abide by political restrictions placed on it by the Chinese government; the American public's dismay when it discovered just how much of its private online behavior gets filed away in Google computers; and the usual human reaction, as Kelly puts it, "to large success of every type."

Fair use or not, this might not be the ideal time for Google to claim the right to digitize every single book in the world.

The publishers' and authors' lawsuits are in the discovery phase, which likely will drag on for months. It's not clear when the court will hear the merits of the fair use argument; Adler's best guess is the spring or summer of 2007.

Unless the two sides end up negotiating after all.

And here's where the outcome of this legal battle and the future of the book may begin to merge.

Everyone involved agrees that search helps people discover books they want. Everyone also agrees that in an ideal world, once those books are found, there'd be a quick way for the finders to pay to access the actual text -- all of it or just part of it, whatever they need.

Under Google's copy-everything-without-permission plan, easy access to anything but "snippets" is denied for most copyrighted books. But with the right deal in place, copyright holders would get paid and Google could make Book Search a whole lot more useful.

When you ask Google executives directly whether they plan to offer some kind of print-on-demand service -- as Amazon.com, for instance, with publishers' permission, already does -- they can get a bit coy. "We don't really speculate about the future," Smith says, just minutes after he's noted -- in response to a more general question -- that "one of the interesting technologies to keep an eye on is print on demand."

But that's the future. Right now, five days a week, the Googlers are still backing trucks up to that Stanford loading dock.

It's anybody's guess when they'll get to the shelf where call number E169 D3 resides.

Google Sees Content Deals As Key to Long-Term Growth
Kevin J. Delaney

Google Inc. drew the ire of media and entertainment companies last year with audacious moves to search new information such as video and books. Now, in a reversal of those missteps, the Internet giant is bringing some of the biggest traditional content owners into its camp and sharing revenue with them.

Last Monday, the Mountain View, Calif., company announced a deal to distribute video from Viacom Inc.'s MTV Networks on the Web and a separate agreement with News Corp.'s Fox Interactive Media division to provide it with search technology and broker advertising. Google has pledged $900 million in minimum payments to Fox under the tie-up. Google also recently said it would license content from the Associated Press news agency as part of a new, unspecified service. And Google has said there are likely more such deals to come.

Google's improved relationships with media and entertainment companies reflects the confidence those companies have gained in online distribution in the past year, amid rapid growth in Americans' consumption of Web video and other Internet content.

But just as importantly, it illustrates a coming of age in Google's approach to the owners of content it wants to search. One key development: Google has recruited executives from the media and entertainment industries in the past year to negotiate with those companies. Led by David Eun, a Time Warner Inc. and NBC alum who joined Google in February, these teams are prowling for deals and courting potential content partners with visits to Google's Silicon Valley headquarters.

Now "we can approach them (the media and entertainment firms) in a way that we can actually do business together and not screw things up," said Google Chief Executive Eric Schmidt at a press conference Wednesday.

Making such tie-ups work is crucial to Google's long-term advertising revenue growth, providing the company with additional places to display lucrative ads, such as alongside video clips. It's also key to Google's mission of letting consumers search the world's information. For years, individuals could access billions of Web pages through Google, which the company indexed without their owners' explicit permission. Now the company is trying to extend that search to diverse sets of commercial information, including movies and books.

Google alienated some content owners as it intensified such efforts in 2005, and those concerns haven't totally subsided. Separate lawsuits filed last year by five major book publishers, an authors' trade association and the Agence France Presse news service alleging that Google is abusing their copyrights are still pending. Some content owners, wary of Google's power, are lining up with smaller advertising and distribution networks.

"The biggest challenge is explaining to them we're friend and not foe," says Mr. Eun, 39 years old, Google's vice president of content partnerships.

In one miscue, Google in late 2004 recorded TV programs on its computers with the intention of letting consumers do some limited searches of them. It did so without TV companies' permission, and only notified some of them days before the service's January 2005 launch. Executives at CBS and Warner Bros. television, a unit of Time Warner Inc., were among those who asked Google to back off, citing possible copyright violations.

Google "didn't show proper respect for us as potential partners," said Larry Kramer, president of digital media at CBS, last year. (CBS in January announced a deal to distribute episodes of several shows, including "CSI" and "Survivor," through Google Video. "We're quite happy with them," Mr. Kramer says now. "They have more people who have taken more time to understand the business of their partners.")

Google's program to digitize millions of books in university and public libraries, launched in late 2004, also triggered the lawsuits last year from publishers and authors. Those groups objected to Google's scanning of copyrighted works without permission. Google was "freeloading on the talent and property of authors and publishers," the Association of American Publishers trade group said in an October statement.

Google executives say they never intended to own content themselves or steamroll the owners of information.

Despite these missteps, partnerships with Google remained attractive to media and entertainment firms because of its reach to consumers and the numerous advertisers buying online ads through its system. Google has far outpaced Yahoo Inc. and other rivals in maximizing the revenue it generates each time it displays a search ad, partly by showing ads more likely to appeal to users based on how the ads performed in the past. That efficiency and its broad reach on the Web allow it to promise more money to content owners, with whom it shares the majority of revenue from ads its brokers. In December, Google beat out Microsoft Corp. for a search advertising and technology pact with Time Warner's AOL unit that included Google's paying $1 billion for a stake in AOL.
Importantly, Google has worked on offering commercial content free to consumers online financed by advertising, a model with high usage and remuneration potential. In one experiment, it provided free ad-supported access to full-length commercial videos consumers usually need to pay for, ranging from old cartoons to the Charlie Rose Show. Major content owners are growing more comfortable with such ad-supported distribution online.

Now Mr. Eun, a Harvard law school graduate who worked on Internet deals at NBC in the 1990s and more recently helped oversee Time Warner's Media and Communications Group, has launched a partnership offensive. He says his team is signing hundreds of content deals each quarter in the areas of video, books and other print publications, and local content such as maps and guides.

Mr. Eun uses his Old Media pedigree to reassure traditional media and entertainment companies. Specialized deal teams identify potential partners and bring them to Google's headquarters to meet with staff who explain how the company's business works.

In MTV's case, discussions leading to last week's deal got started after Michael Wolf, President and Chief Operating Officer of MTV Networks, contacted Mr. Schmidt earlier this year. Mr. Schmidt handed off the negotiations to Mr. Eun's group, which brought MTV's team to Google's headquarters for a daylong meeting. "Throughout the discussions we've had with Google they've been respectful of our brand, respectful of our content," says Mr.Wolf.

While Mr. Eun declines to specify his team's size, Google earlier this year hired executive recruiters Spencer Stuart to find two additional executives to report to him, says a person familiar with the matter. One executive is to focus on working with premium content providers such as TV networks and movie studios, and the other with owners of archival TV, radio and training film footage, this person says. Google recently filled the spots with Yahoo and NBC Universal alums, the person says.

In the books area, Google says it has recently recruited individuals from publishers Random House Inc., Reed Elsevier and Farrar, Straus and Giroux to cut deals and work with the publishers. Google last year also set up an advisory council of about a dozen senior publishing industry executives, with whom it meets roughly once a quarter. The company previews upcoming changes to its book search service with the group, and solicits their concerns.

"We see that they've listened and they've done what we've been talking about," says Gordon Tibbitts, U.S. President at scholarly publisher Blackwell Publishing Ltd. of Oxford.

Still, critics haven't gone away. "Everybody needs to be careful when dealing with somebody who has a different point of view from the mainstream" on copyright, says Joshua Kaufman, a lawyer representing the AFP in its suit against Google. Scott Bailey, a general manager for business operations at Time Warner's Turner Sports New Media unit, for one, says he wonders whether Google services will undermine some content owners' own. "There's a fine line between competitors and partners," Mr. Bailey says.

--Joann S. Lublin contributed to this article.

Google's Home Town to Get Web Access Free
Michael Liedtke

Google Inc. on Wednesday plans to offer free, high-speed Internet access to everyone in its Silicon Valley home town - a hospitable gesture that the online search leader hopes to see spread to other parts of the country.

The new wireless, or "Wi-Fi," network, is believed to establish Mountain View, Calif., as the largest U.S. city with totally free Internet access available throughout the entire community, according to both Google and city officials.

St. Cloud, Fla., a suburb of Orlando with a population of about 28,000, had claimed that mantle earlier this year after it launched a free Wi-Fi network.

About 72,000 people reside in Mountain View, an 11.5-square-mile city located about 35 miles south of San Francisco. As the home to major companies like Google and VeriSign Inc., Mountain View's daytime population can swell above 100,000.

"We aren't concerned about being able to handle the load," said Chris Sacca, a Google executive who oversaw the Mountain View project. "We think we have built a pretty cool, robust network."

Similar Wi-Fi networks are under development in many other cities, including Philadelphia and Chicago, but most of those envision charging for Internet access.

Small pockets of free Wi-Fi access - often called "hot spots" - have become increasingly common throughout the United States, often cropping up in downtown districts or by coffee shops and fast-foot restaurants hoping to lure in customers.

Google's community-wide network has had Mountain View buzzing in anticipation, said City Manager Kevin Duggan.

"There's a lot of excitement," he said. "It's something we could have never anticipated a few years ago when we were just excited to be able to pay for dial-up access to the Internet. Now our entire town is a hot spot."

Google invested about $1 million to build the Mountain View network and expects to have to spend far less than that each year to keep it running. The financial commitment represents a pittance for Google, which has nearly $10 billion in cash.

Powered by 380 radio antennae, the Mountain View network is supposed to surf the Web at speeds comparable to the Internet connections delivered by digital subscriber, or DSL lines. It will be slightly slower than a high-speed cable connection.

Still, Google believes the free service will be fast enough to prompt some Mountain View residents to stop paying DSL and cable providers for Internet access. People who take that step will probably want to spend $30 to $170 for a Wi-Fi modem to improve the connection to Google's free service, Sacca said.

Web surfers using the Google service will have to log on, but once they're connected they will be able to sign off without losing access, Sacca said. The network is "very naive," so it won't track people's online activities when they aren't on a Google site, Sacca said.

Like many Internet companies, Google has an incentive to ensure people have easy and cheap access to the Internet because its profits depend on Web surfers navigating through waves of online ads.

Toward that end, Google last year decided to help develop free Wi-Fi networks in Mountain View, the company's home since 1999, and San Francisco, where many of its employees live. Google doesn't expect to undertake similar projects elsewhere, partly because so many other companies are angling to build Wi-Fi networks in hundreds of other cities, Sacca said.

In contrast to the Mountain View network, Google decided to team up with another company, EarthLink Inc., to build San Francisco's Wi-Fi network. The San Francisco plan envisions EarthLink charging roughly $20 per month to surf at the top available speed while Google will offer a free service that transmits data at a much slower rate.

Negotiations on the San Francisco network still haven't been completed, making it unlikely it will be switched on until next year.

Google Says It Has No Plans for National Wi-Fi Service
John Markoff

Even as it rolls out a local wireless Internet service in the city where it is based, Google says it has no plans to position itself as a national provider of such services.

The free service in Mountain View, the company’s base in the heart of Silicon Valley, will become generally available on Wednesday after nine months of testing. Google has been selected by the city of San Francisco to install and operate a similar service there in partnership with Earthlink; the two companies are negotiating with the city over the terms.

There has been widespread speculation that Google might compete nationally as a wireless Internet provider, but an executive said Tuesday in a phone interview that Google had embarked on the Mountain View and San Francisco efforts with other objectives: to demonstrate the value of competition in providing Internet access, and to build systems that would allow the company to experiment with new business ideas.

Competitive Internet access has been a crucial issue for Google’s executives, who have jousted publicly with telephone and cable industry companies that have threatened to charge content providers for access to networks. The debate has extended to Washington, where Google and its allies have called for regulators and legislators to ensure what proponents call “Net neutrality.”

“I think there wouldn’t be a Net neutrality debate in this country if we really had a competitive environment for access,” said Chris Sacca, a Google executive who heads special initiatives for the company. “The Internet is not pervasive as it could be, or democratic.”

There are roughly 300 open contracts for municipal Wi-Fi services around the country, and Mr. Sacca noted that Google had not been an active bidder for any of the contracts, including a plan for a service covering the greater San Francisco Bay Area.

As for new business ideas, Google will now begin experimenting in Mountain View with new local services, including advertising, he said, noting that some of Google’s existing advertisers would be interested in reaching local audiences.

“There are probably advertisers we leave on the table” without a way to offer targeted local advertising, he said. The arrangement with Mountain View allows Google to keep any advertising revenue.

Google has deployed 380 lamppost-mounted Wi-Fi transceivers in Mountain View to make wireless Internet service available to anyone who has registered for a Google account, which is free. The company has invested a significant amount in promoting the benefits of wireless Internet access. It has held a series of tutorials, one of them drawing 750 residents.

Users will be limited to one-megabit data rates for both uploading and downloading information, somewhat slower than digital subscriber line (D.S.L.) service offered by phone companies. But Google has experimented with data rates above eight megabits, and Mr. Sacca said the company would consider increasing bandwidth after it had more experience with customer demand.

Making use of the service within a home in Mountain View typically requires a device called a Wi-Fi repeater, which costs $30 to $170. The repeater amplifies the wireless signal and relays it to individual computers equipped with a Wi-Fi card or Ethernet connection.

The installation, in a city of 72,000 residents, cost roughly $1 million, an amount that Mr. Sacca said demonstrated the low barriers to deploying such a service.

Citywide Wi-Fi Equipment Maker Boosts Speeds
Marguerite Reardon

Cities using gear from Tropos Networks to build their citywide networks could have more bandwidth capacity at their fingertips this fall, as the company introduces its next-generation wireless gear.

On Thursday, the company whose gear is being used to build citywide Wi-Fi networks in Philadelphia, San Francisco and New Orleans, will announce new equipment that will provide a 50 percent boost in capacity.

This boost could allow network operators such as EarthLink, which is already using the older generation Tropos gear in its deployments, to either increase bandwidth for individual users or increase the number of people it supports per wireless router.

The devices, called the Tropos 5320 outdoor MetroMesh router, use two radios instead of one to transmit signals. One radio operates at 5GHz. This radio will be used exclusively to link routers in the mesh. Because the 5GHz spectrum works at a higher frequency, it offers more bandwidth. But it also has more difficulty penetrating through walls or dense foliage. As a result, 5GHz spectrum is used mostly in line-of-sight applications.

The second radio in the new Tropos router will operate at 2.4GHz, just like the older generation of Tropos equipment. The 2.4GHz spectrum will be used to provide network access to users. And because it doesn't require line-of-sight it also can be used to link routers together when the 5GHz can't be used.

The next-generation equipment will be available in October. The company has not announced which customers are testing the products yet. The gear could increase the cost of building a Tropos network by about 30 percent, the company said. But company executives expect its customers will still use the older generation products as well.

"We expect customers to mix and match the new equipment with the older generation gear," said Bert Williams, director of marketing for Tropos. "San Francisco is a good example of how this could work. The new 5320 routers might be used to provide service in more densely populated regions, while the older 5210 routers could be used to offer service in less populated areas like near city parks."

Rural Wyo. City Eyes Fiber-Optic Network
Becky Bohrer

Hay and beans have fueled this rural economy for years. But it's fiber of another kind that city leaders believe is key to Powell's future.

Plans are under way to build a fiber-optic network capable of delivering ultrafast Internet, cable TV and telephone service to virtually every household and business in this community of about 5,300 people.

The goal of the $6 million project is to create another selling point for a community where quality of life issues - good schools and safe streets - are no longer enough of a draw to do business in a place where the nearest major city is 100 miles away in Billings, Mont.

"As a city administrator, I hear the term 'economic development' thrown around," said Zane Logan, the leading voice behind CityNet, which is opposed by local phone carrier Qwest Communications and cable provider Bresnan Communications. "I can't think of anything more economic-development minded than a fiber-optic network."

Powell is part of a growing phenomenon, fueled by dissatisfaction in sparsely populated areas where the local phone and cable providers are slower to invest in costly network upgrades that may not be profitable.

At least 40 municipalities and public utility districts around the nation already offer so-called "fiber to the home," according to market researcher Michael Render. These fiber networks are both more robust and costlier to build than the municipal wireless networks proposed in hundreds of cities, often sparking similar controversy.

The rise of community-backed projects has sparked debate about whether it's proper for government to compete with private enterprise, and whether broadband technology is a luxury or a virtual necessity that cities should provide, the way they do water or garbage service.

"Is it a commodity where you pay for what you use and leave it to the private sector? Or is it a utility, as important to today's lifestyle as water and electricity?" said John Anderson, a graduate student at the University of Illinois at Urbana-Champaign who has studied and written about the debate.

"A lot of communities feel it's in their interest to step in and offer it," he said.

That was the case in Windom, Minn. Before the city announced plans to build its fiber network, Internet options were limited to frustratingly slow dial-up or finding a wireless hot spot some 20 miles away, said Dan Olsen, operations manager with WindomNet, the farming community's telecommunications office.

Now, more than a year after Windom built its nearly $11 million network, Qwest also is in town offering competitive high-speed Internet connections, he said. About 1,700 customers subscribe to at least one of the three city services - Internet, phone or cable - and some take all three.

"If you're a small town out there and can't get a provider to provide services, what do you do? Give up or get the community involved?" Olsen asked. Windom's network isn't profitable yet, though Olsen said it wasn't expected to be so soon. "We've been constantly hooking up and growing and monitoring."

There are challenges: According to Joe Savage, president of the Fiber to the Home Council North America, up to 30 percent of households in a given community must subscribe to a fiber network for the system to begin making money. And it can be hard for budget-strapped municipalities to secure funding, requiring them to use tax money, borrow or partner with a for-profit investor.

However, Render, the market researcher, said he knows of no documented failures in what he considers a still-new phenomenon.

In Utah, the vitality of a network known as the UTOPIA project depends on its potential to grow and attract new customers, said Roger Black, the chief operating officer. Just six of the 14 communities behind the project are now being served by the superfast service, he said. The network must be built out for the others to be brought on, and Black said finding a lender delayed expansion plans by at least seven months. He expects construction can begin soon.

Typically, a municipality will own the infrastructure needed to run a fiber network, Render said. In some cases, a community will run its own system with customers paying the city directly. In other cases, a community essentially leases network space to a service provider that handles customer service and billing.

That's the approach Powell is pursuing. The city has entered an exclusive, six-year contract with regional carrier TCT of Basin, Wyo., to provide Internet, phone and cable over the network, City Administrator Zane Logan said. Now the city is seeking investors to buy $6 million in municipal bonds to build the network.

The dominant telecommunications providers in Powell argue this initiative is unfair and an example of government needlessly intruding in private enterprise: Representatives from both Qwest Communications International Inc. and Bresnan Communications say their companies already meet customers' demands with high-speed, high-quality services.

But Logan said the CityNet system would surpass the top speeds from those companies, offering 10 megabits per second for both uploads and downloads at an as-yet undermined price.

Bresnan recently increased its download speeds to 8 mbps for downloads in many of its markets across the Rocky Mountain region, but uploads remain as slow as 384 kilobits per second. That service costs $46 a month for Bresnan's cable customers, or can be bundled with phone and cable for $99 a month combined.

"There probably is some place in the country where it makes sense for a community to endeavor to do such a thing because there's a dearth of services there," said Jerold Lambert, associate general counsel for Bresnan. "It is hardly understandable or prudent for a community to do that where there's already an extended marketplace thriving in their community."

Lambert also suggested there may be "legal implications" related to the exclusive deal.

The city says both Qwest and Bresnan were invited to compete for the contract to run the system or, alternatively, to cut a deal to sell their own services over the new network.

Qwest and Bresnan each vow aggressive marketing in response to the city's planned network. Logan said he expects the Powell system "will be able to compete" for customers.

Construction of the network could begin this year if the necessary investors are lined up. The city isn't committing any money above the $125,000 it provided for a business plan, Logan said, and he expects the city will be reimbursed that cost.

Still, Logan is feeling the pressure: he said he brought the idea to build the network to the City Council late last year, and he's aggressively promoted it as a vital investment in Powell's future.

Potential customers seem interested. When businesses and prospective new residents call Sharon Earhardt at the local chamber of commerce, they often follow questions about schools and housing with questions about the city's Internet service: What does Powell have to offer? Is it fast?

Earhardt fills them in on the existing services and the fiber-optic plan. For people looking to relocate, she said, "technology will be our ticket."

Boeing to End Its Service for Using Internet Aloft
Thomas Crampton

Maybe it was the Internet bubble in the sky or perhaps it was just that the business plan could not fly.

Boeing announced on Thursday that it planned to scrap its in-flight Internet service, saying there was not enough demand.

That might upset the people who use it. According to the German airline Lufthansa, which has offered the service more extensively than any other carrier, passengers like the option of staying connected while flying.

“I will be extremely sad if this service ends,” said Marcel Reichart, a managing director for strategy in Munich at Hubert Burda Media who flies frequently and used the service nearly a dozen times while flying to the United States. “There is a stable connection that allows me to get a full day of work done while speaking over Skype, sending e-mails and everything.”

The service is much like that in a Web cafe, with passengers gaining access to the Internet through a high-speed wireless network. The system, which is also used by executive jets as well as oil rigs and vessels at sea, bounces the Internet connection off a series of satellites.

Boeing published a survey of 3,200 airline passengers in April that seemed to indicate that the airborne Internet would soar in popularity. The survey found that 83 percent said Internet availability would have an impact on their future travel plans and choice of airline. Of those who actually used the service, called Connexion, 92 percent said they would recommend it.

The problem, it seems, is that enthusiasm for the idea far exceeded the number of people who actually paid for the service.

In announcing the project in 2000, Boeing predicted that the market for in-flight Internet access would be worth $70 billion over 10 years. But the company said Thursday that the number of passengers using the service on the 156 aircraft with 12 airlines amounted to little more than “low single digits” a flight. Boeing declined to say how much it cost to run the service.

The cost to airline passengers is $9.95 an hour or $26.95 for an entire flight and revenue is shared between Boeing and the airlines.

Lufthansa, which operates 62 aircraft using the system, said that the maximum number of passengers ever connected at one time was about 40 a flight, usually on routes to North America and Asia.

“Given the usage level, we just didn’t see the kind of numbers that add up to a business,” said John Dern, a Boeing spokesman. “You could say it flew well technically, but it didn’t fly so well as a business.”

Mr. Dern said that the shutdown was unrelated to the airport security alert in Britain last week, when laptops were not allowed on flights. But the difficulties faced by airlines after 9/11 have not helped, he said.

Ken Dulaney at Gartner Research in San Jose, Calif., predicted that the system would rise again. “It seems clear to me there is a business there, just not the way Boeing built it,” he said. “There will be a fire sale of Boeing’s investments and then someone will take over this niche market.”

“The biggest problem right now is that airlines can barely afford a new tire, much less a service like this,” Mr. Dulaney said.

Airbus, Boeing’s biggest rival, seems to agree that Internet service on planes has a future.

“We are full speed ahead with deploying wireless Internet on board our aircraft,” said Justin Dubon, an Airbus spokesman.

Airbus plans to introduce its own Internet service with the delivery of the first of the giant A380’s to Singapore Airlines at the end of this year, Mr. Dubon said. The provider of the service, OnAir, is a joint venture of Airbus and SITA.

Lufthansa offers Internet on several Airbus aircraft, but uses the Boeing system.

Customers flying Airbus can expect the Internet to be a crucial part of their in-flight experience, Mr. Dubon said.

“The possibilities are really endless once you put Internet in an aircraft,” Mr. Dubon said. “Passengers might be able to download films or even send a message to someone they see across the aisle.”

For Lufthansa, Boeing’s imminent shutdown of the system is a problem.

“We really want to continue offering this service, but right now we just don’t know how we will,” said Michael Lamberty, a spokesman for Lufthansa. “Fortunately, Boeing said the service will continue for several months, so perhaps we can find a solution.”

Hell or High Water

With the hurricane season upon them, New Orleans businesses prepare for the worst.
Joanne Cummings

Editor's Note: Hurricane Katrina made landfall last Aug. 29, battering Gulf Coast areas in Mississippi, Alabama and Louisiana, killing more than 1,800 people and causing an estimated $75 billion in damage. New Orleans took the brunt of the storm's fury - once the levees gave way, 80% of the city flooded. To find out how the city is rebuilding its telecom infrastructure and revamping its disaster-recovery plans, we sent a team to New Orleans to report on the efforts of service providers, city officials and enterprises to prepare for the next Katrina.

Mission critical is one of those terms that gets thrown around a lot, but what takes place at Lockheed Martin's Michoud Assembly Facility in New Orleans is mission critical - the design and manufacture of external fuel tanks for NASA's Space Shuttle program.

Last August, engineers at Michoud had a pretty important project on their plates. "We had a shuttle flight with some debris falling off of it, and we were analyzing that," says Steve Stefancik, IS director at the company.

Then Katrina hit. While most employees evacuated, Stefancik kept a 37-man crew on site throughout the storm.

The crew was able to keep the water pumps going until the last minute, and after the storm passed, Michoud was one of the only enterprises in New Orleans that didn't flood out.

Unfortunately, the roof of the building sustained damage, and 57 of the plant's 100 servers suffered hard-drive damage. Lockheed Martin had replacement drives delivered to the plant by hitching a ride on a National Guard convoy, and Stefancik was able to bring the internal network up by Sept. 13.

But he still couldn't get connectivity to other sites around the country. "All of our communications going off-site went through a central switch down the road that flooded, and it took out all our wide-area network stuff," Stefancik says.

So Lockheed Martin arranged for another NASA site, the Ames Research Lab in California, to fly in via helicopter with satellite-based WAN connectivity. "It worked pretty well,'' Stefancik says, but the engineers in New Orleans needed to have some of their work processed at the Marshall Space Flight Center in Huntsville, Ala., and the satellite link didn't provide enough bandwidth.

Because of the urgency of the project, Lockheed Martin ended up relocating the engineers and the data to Huntsville.


Despite all of the disaster-recovery planning that businesses in New Orleans did, no one was quite prepared for the total loss of WAN connectivity.

For example, Phelps Dunbar, a New Orleans law firm, thought it had a solid disaster-recovery plan. The company, which has seven sites in the United States and one in London, had just put the finishing touches on its MPLS network shortly before Katrina struck. "That gave us any-to-any connectivity, allowing us to relocate and restore critical systems in New Orleans to our other offices," said Chris Rigamer, director of technology.

His disaster plan was to move the company's primary network and computing assets to its Jackson, Miss., office and recover from there. The Jackson computer room had been built three times larger than necessary so that servers and network equipment could be purchased and brought there if needed, duplicating the services in New Orleans.

And Rigamer specifically went out and added a second Internet link from a different ISP. Unfortunately, both ISPs went down when Katrina hit. "So we were doing a lot of stuff right and by the book, and we still got caught short,"he says.

Forced to improvise, he was able to take the link dedicated to the WestLaw legal research service and repurpose it for general Internet connectivity. "It was a tiny amount of bandwidth compared to what we needed, but it was a link," he says.

Since then, the company has added another Internet connection through the MPLS network.

Lockheed Martin also now makes sure its WAN links go through two separate exchanges. "We have duplicate OC-3 lines out of here now," Stefancik says. "If one of our exchanges goes down, the other one may not flood. We take different paths, so they're not going through the same exchange box."

Others say multiple carriers or dual pathing wouldn't have made much difference in the storm's aftermath. "With Katrina, it wouldn't have mattered what carrier you were with - everything was down," says Bret Jacobs, executive director of IT at Loyola University in New Orleans.

"Cell phones, local phone service, data, voice. Even the carriers lost power and ran out of diesel. Our Internet provider was forced to shut down and leave their building, because the building was commandeered. Plus every telephone pole was down, and every manhole and conduit underground was totally flooded. So there was no option really," he says.

The flooded conduits wreaked havoc on copper wiring, Jacobs says. He converted the T-1 link that fed the campus from copper to fiber. "We didn't get that until the end of the year," he says. And he is considering contracting with multiple ISPs in the future. "We are looking at it as an option," he adds.

No voice

Another major problem was that cell phone service was out, and land-line service was spotty at best, so people couldn't communicate with each other.

Stefancik, who also is chairman of the St. Tammany Parish council, says flooded towers knocked out cell service. "All cellular towers feed to a landline, and if the land exchange floods, you're wasting your time trying to work through a cell tower," he says.

His parish now requires cell towers to support larger fuel capacities, as well as the ability to switch to microwave communications in the event that the AT&T or BellSouth land facilities go down. "Those are new requirements," he says.

Because most enterprises were forced to evacuate from New Orleans as Katrina approached, many who planned to communicate via cell phones found it difficult to reach their scattered employees. "You could not dial a 985, 228 or 504 area code and get through," Stefancik says.

Realizing the problem, many organizations bought cell phones from unaffected areas and distributed them to key employees. "We communicated primarily through e-mail, because the cell phones did not work," Loyola's Jacobs says. "Even my New Orleans cell phone in Houston didn't work in Houston. My telecom director evacuated to Tampa, and I had him acquire a case of cell phones with Houston numbers. He overnighted them to me in Houston, and I distributed those to the administration so we could continue to communicate."

Phelps Dunbar also bought new cell phones. "We outfitted the New Orleans crew that had relocated to Jackson with some cell phones from a Jackson provider in that area code, and those worked," Rigamer says. "One of our partners just volunteered to go and get us a box of cell phones and get things going. It turned out to be very useful."

Lockheed Martin knew that cell phone and regular phone service would be questionable, so part of its successful disaster plan was to set up a series of conference calling stations at a sister site in Denver. Each employee was given a Denver phone number and a preset time to call before evacuating.

"So every day during the disaster, our execs call in at 3 p.m. and go through our processes and our status," Stefancik says. "That way, we can convey to people what needs to happen. Different departments have their own numbers, and they have people set up to call in at certain times. Everybody in this plant, wherever they relocate across the [United States], can also call into their number, and somebody will be on the line with them to give them some understanding of what's going on and provide direction for the future."

As a result of Katrina, many enterprises have made satellite phones a part of their future disaster-recovery plans. "We did not have satellite phones then, but we do now," Rigamer says. "That's a change we made - just for a couple of key personnel in firm management."

Jacobs says Loyola kept about seven people on campus during the storm, and they had one satellite phone. "But we'll probably add a couple more satellite phones for them," he says, noting that such phones have their limitations. "You basically have to go outside and get a signal, so that could be a little dangerous during the height of the storm."

No data

The heart of a typical disaster-recovery plan is moving data off-site so you can access it after the disaster is over. But what if you can't?

For example, the University of New Orleans (UNO) had stored backup tapes in two separate locations: the school's computer room and the campus security center 5 miles away. Access to the campus and the security center was impossible in the days after the storm. The school was offered space and extra server equipment by a sister school, Louisiana State University (LSU) in Baton Rouge, but getting to its data was problematic.

Eventually, school officials had to use a National Guard convoy to get back on campus and physically recover the tapes. "That's something we do differently now," says Jim Burgard, vice chancellor for university computing and communications at UNO. "We now store our tapes with Iron Mountain, which stores them well away from New Orleans and even beyond Baton Rouge."

Others were luckier. "We preshipped our tapes out of town on Saturday [before the storm], because we had concerns that if it were a big hit, our off-site tape-storage provider might not be able to get the tapes out of town on request," Loyola's Jacobs says. "We shipped the tapes early, and now that's part of our official plan. It was a very good call, because the facility where the tapes were stored survived, but we couldn't have gotten to it for weeks."

Tale of the tape

Similarly, the Innovation Group, a firm that consults on the entertainment and hospitality industry, ran into tape troubles. The company has offices in Colorado and New Jersey, and the plan was for employees to fly there and keep working. The company expected to lose use of its data center, but by taking copies of its backup tapes and CDs of its software and software licenses, planned to create a new data center in Colorado, according to Jeremiah Tangen, IT administrator at the firm.

On the Saturday before the storm, Tangen took the backup tapes, which had been refreshed the day before, and tried to evacuate to Jackson, Miss. But Jackson got hit, too, and he decided to drop the tapes off at Kinko's to be overnighted to Colorado.

Three days later the tapes hadn't arrived. He tracked them down, dry and safe at the Kinko's where clerks had failed to send them out before the storm. They sent them that day, and Tangen bought new server hardware to load his applications and data so employees could work remotely using laptops equipped with Cisco VPN gear.

He also hired Iron Mountain to store them outside New Orleans at a site from which they can be delivered to Innovation within four hours. "If we see a storm coming, we can have them ship the tapes to another archive center. It gives us a lot more flexibility," he says.

The Friday before Katrina struck, he had dropped off tapes at a safe deposit box in a bank just a half mile from Innovation Group's offices. The tapes he eventually used to build a new data store in Colorado were fresh copies made the following week. "If I hadn't taken those tapes with me, we wouldn't have had access to that data for three months," Tangen says. That's how long it took before the bank reopened.

New plans, new technologies

Living through a disaster like Katrina has helped enterprises in New Orleans improve their contingency plans. For example, Phelps Dunbar's Rigamer says it helped make him better aware that disaster recovery is "survival mode" and that getting critical systems back online is where he needs to devote resources.

He's also fast-tracked a plan to consolidate the servers from his seven domestic sites into one large vendor-operated data center and plans to make good use of server and storage virtualization technologies to take advantage of economies of scale, cut down on space and power needs, and make recovering from a similar disaster far easier.

"None of our offices are quite large enough to put in a storage-area network of any size or blade server technology. Of course, going into consolidation, that's exactly what we'll have," he says. "The only downside is that your dependency on the network is amplified. And with Katrina, that was a problem - everyone was hit."

To this end, Phelps Dunbar also is working on building a second, redundant WAN. "MPLS will be our WAN A, and we're going to have a WAN B with as much redundancy as possible," he says. "We're trying to engineer this to have as few common elements as possible," which is difficult, considering the different geographical areas where the sites are situated. He says he's considering using multiple technologies, including metropolitan Ethernet and DSL.

Lockheed Martin also is looking to address some of the larger citywide infrastructure problems it encountered during Katrina. For example, the company had no electrical power or water services from the city for months. The plant had its own large power generators on-site and had fuel stores to keep them running for as long as 60 days. "We decided to rewire our server rooms and LAN rooms to put them on the generators and get them up and running, and that worked well," Stefancik says. "We were up well before power was restored."

Lockheed also dug its own 600-foot well to provide water for its air-conditioning and server room chillers, and that is still used. "Even today, we provide our employees with bottled water for drinking water," he says. "We have yet to get good clearance on our water here, almost 11 months after the storm."

Stefancik says another change Lockheed is considering is constructing its own cell tower on the company's 834-acre campus.

And he says his revamped disaster-recovery plan addresses the need for high-end processing. Employees now are required to take their laptops and the data on them home each night. "And we've acquired some high-end workstations that we will now set up at different locations if in fact a hurricane approaches, anywhere in the Gulf," he says.

Others are considering moving to new network technologies to make them more disasterproof. For example, Burgard says UNO is looking at moving to HP blade servers to reduce the amount of space and wiring needed in LSU's Baton Rouge data center. Currently, LSU is letting UNO use about four server racks of space, but Burgard is wary of depending on this for the future.

He says the school, which relies on Cisco for most of its network gear, is also considering a move to VoIP. "In the end, our own network was restored before BellSouth's," he says. "If we had VoIP, we would have been able to restore our voice communications. It's something we're looking into."

Similarly, Loyola has invested in a hosted solution for a distance-learning network. Before Katrina, the school had a small distance-learning initiative in place, but has since contracted it out to Blackboard to make sure that the service is hosted away from New Orleans and remains up and running.

"We'll use that to continue instruction, should we have to evacuate again," Jacobs says. "That's a change and investment for us. God forbid we have another Katrina, but we'll probably have evacuations of three or five days. And we want to make sure that the kids can continue to receive instruction and stay connected with the school."

Rewiring New Orleans

Carriers build advanced telecom infrastructure; enterprises to benefit from new services.
Jim Duffy

Hurricane Katrina literally blew away the telecom infrastructure in New Orleans. Forget about telephone poles and lines going down, BellSouth, the incumbent local exchange carrier, lost 34 central offices, nine of which were destroyed.

On our visit, BellSouth senior network manager Jules Baumann took us to see Bell South's Lake St. Catherine central office. As we drove along Route 90 east of New Orleans, Baumann drove right past it, then turned around and swung back.

It was easy to see why he missed it the first time. The metal building was gone. All that remained was a flat spot where the building had stood and a hole in the ground from which shot an orange fiber-optic cable connected to a trailer crammed with phone equipment. A cable hung down from a utility pole to supply power to the new central office that serves parts of East New Orleans.

Fortunately, none of BellSouth's primary switching equipment was flooded, because it was on the upper floors of surviving BellSouth buildings. But emergency generators and transmission equipment, such as fiber-optic multiplexers on lower floors or in the basement, were damaged.

BellSouth responded quickly, replacing the flooded generators and fiber-optic multiplexers and moving the equipment to higher floors. Digital loop carriers in the field were raised onto platforms 6 to 8 feet above ground level. Some services came back within a few hours, and other functions took weeks, depending on the severity of damage, availability of replacement parts, and other factors, according to CTO Bill Smith.

We toured the Mid-City central office where floodwaters had filled the basement to within a few feet of the ceiling, rendering inoperable the enormous batteries that power the phone system for that area. Ten months later paint crews were just brushing away the high-water mark with a fresh coat of white paint. New batteries, occupying a fraction of the space of the old ones, had been installed upstairs in the three-story building, away from the potential damage of another storm.

BellSouth also has upgraded the switches in the office with compact new technology that leaves vast empty spaces where the older, larger gear once sat.

In all, BellSouth invested nearly $1 billion in a rebuilding effort that included replacing 100,000 copper cable pairs with fiber optics. Except for some heavily damaged neighborhoods where BellSouth is waiting to see whether people are going to move back, the major rebuilding effort has been completed.

For businesses, this new network could mean the availability of advanced telecom services. "That potential certainly exists, because any time you move fiber closer to the end user, you've got more opportunity, whether it's DSL on very short copper loops or potentially fiber-to-the-curb/fiber-to-the-home type of systems," Smith says. For example, Gigabit Ethernet will be more widely available to enterprises in New Orleans as a result of the new fiber, Smith says.

Verizon rebuilds and reroutes

Taking facilities out of New Orleans and away from the coast is an option carriers such as Verizon are embracing. The Verizon Business/MCI backbone suffered four optical fiber cuts when electrical transmission towers collapsed during the storm. Several regeneration facilities also were flooded.

Verizon Business decided to replace those fiber routes with aerial and buried routes north of the coast. The rebuild also prompted the carrier to accelerate its ultralong haul (ULH) project in New Orleans by 12 to 18 months.

ULH uses dense wavelength division multiplexing (DWDM) to deliver a fivefold increase to capacity on those fiber routes, and dual rails of parallel electronics for improved resiliency and latency, says Dick Price, director of business continuance and emergency management for Verizon Business.

ULH also allows for more flexibility in rerouting traffic and reduces the number of regeneration sites, Price says, cutting the number of points of failure and reducing maintenance costs. The SONET architecture that ULH replaces required signal regeneration every 25 miles; ULH requires it every 1,200 miles, according to Price.

"We were able to implement latest and greatest state-of-the-art ULH technology in there a little bit sooner than we had originally anticipated," he says. "We got the new service up and running away from the coast for better protection. At the same time, we were able to improve the overall technology in that area to provide better and more robust services."

AT&T speeds up Gulf region upgrades

AT&T came away from Katrina relatively unscathed. The carrier prepared for the storm by making sure its 162 sites in the Gulf region had plenty of backup power, and that the logistics for fueling and refueling generators was worked out in advance.

As a result, AT&T lost only one regeneration site to flooding, affecting only "a handful" of customers for no longer than 24 hours, says Robin Bienfait, senior vice president of global network operations for AT&T Business Services. The carrier logically rerouted its photonic mesh backbone around the site.

AT&T is continually enhancing the resiliency and reliability of the photonic mesh, Bienfait says, but Katrina and other hurricanes moved up the timetable for enhancing the resiliency of the Gulf region backbones by at least 12 months. "Because of Katrina, we had to look at where the bigger paths are, and Florida gets hit all the time," she says. "So a lot of people have benefited. I am building a stronger backbone through the area."

While no specific new services are being offered, Bienfait says the storm has made customers more aware of disaster-recovery planning and more likely to redesign their networks to take advantage of newer, available services. For example, customers might be more likely now to make the switch from legacy Layer 2 frame relay and ATM services to Layer 3 IP VPNs, Bienfait says.

"When you've had a catastrophe or disaster, it gives you the opportunity to rebuild," she says. "Sometimes the better option is not to rebuild and replace but rebuild and redesign."

Verizon Wireless adds redundancy

Verizon Wireless lost 20 cell sites in downtown New Orleans, but fortunately had relocated its switching facility north of New Orleans, to Covington, La., just before the storm. "That kept us whole on the brain of the cellular network," says Hans Leutenegger, vice president of network operations for Verizon Wireless' South Area. "Preparing ourselves for the storm long before it ever happened was probably our biggest strength."

In addition to relocating the switching center, Verizon Wireless put permanent, redundant generators in its cell sites that were fueled by natural gas. This alleviated the need to access each cell site manually to replenish the generators with diesel fuel, Leutenegger says.

Still, there were gaps to fill after the storm. Verizon Wireless did not anticipate the damage to the local carrier infrastructure and to alternate providers' networks, which it uses to reach its switching facility and the outside world.

"That's our Achilles' heel," Leutenegger says. "We relied on our vendors to provide that service and if they can't keep their network up we're no better off."

Verizon Wireless has now doubled the number of redundant fiber paths coming out of its switch from two to four. The operator also expanded its roster of alternate providers for those paths. "If one of those four paths stays up, we have full connectivity to the outside world without any kind of loss," Leutenegger says.

Verizon Wireless also built two licensed microwave networks - one from the Covington switch out to Baton Rouge, La., the other to Mississippi - for emergency backup backbone service to its cell sites.

In all, Verizon Wireless spent tens of millions of dollars to rebuild its data-optimized EV-DO network, Leutenegger says. Verizon Wireless is just beginning to implement EV-DO Revision A technology, which adds higher data rates and QoS to EV-DO, into its network for service initiative in 2007.

New Orleans will be one of the first cities to get it because of the needs arising from Hurricane Katrina. A survey conducted by Telephia states that monthly mobile use in New Orleans grew 41% between the first quarters of 2005 and 2006 - at least five times higher than the nationwide average increase.

"The usage we saw in New Orleans 30 days after [Katrina] was more than we see [monthly] in New York City," Leutenegger says. "The amount of traffic we saw for the month or two after was absolutely phenomenal," because of EV-DO's broadband data capabilities and its use by Federal Emergency Management Agency, insurance agencies and people replacing DSL lines lost to the storm, he says.

Because of that, Verizon Wireless increased the capacity of its EV-DO network in New Orleans to handle a 50% to 100% increase in traffic, Leutenegger says. And in addition to having EV-DO and making the top of the list for the upgrade to Revision A, New Orleans now has the most redundant wireless network in the country, Leutenegger says.

"It will have the most redundant network," he says. "It's got the building blocks, the foundation, for all future services we can put on there. New Orleans is right up there with anybody as far as technology implemented."

Cingular focuses on resiliency

Following Katrina, Cingular accelerated its timetable for integrating the Cingular network with that of the acquired AT&T Wireless in New Orleans, says Will Schutts, Cingular executive director of network operations for Alabama, Mississippi and Louisiana.This may also have moved up the schedule for upgrading Cingular's network in New Orleans from GSM/GPRS/EDGE to Universal Mobile Telecommunications System/high-speed downlink packet access, which would increase data rates from 135K to as much as 700Kbps, burstable to more than 1Mbps.

But like mother AT&T, which owns 60% of Cingular, the wireless operator is focused more on improving its network resiliency than offering advanced service. Cingular lost an undetermined number of cell sites from flooding, wind and power loss, but service was quickly restored using landline transport, microwave, spread spectrum microwave and satellite facilities, Schutts says.

Cingular built a new switching facility on the north shore of Lake Pontchartrain with redundant power and three switches, and expanded its number of portable generators from 1,200 to 4,500. It also is modifying its disaster-recovery and contingency plans, and installing additional spread spectrum, satellite and backhaul equipment.

"We've considerably expanded the scope of those facilities in light of Katrina," Schutts says, adding that Cingular spent $116 million last year to prepare for and recover from Katrina and other storms. The $165 million Cingular expects to spend on its Gulf region facilities this year will be on projects conceived from lessons learned during Katrina, he says.

Although the money is earmarked and service is up, there's no time for complacency. "I wouldn't say it's business as usual because we're spending a lot of time on modifying our disaster-recovery plans based on what we learned last year," Schutts says. "Also, we're expanding the network. We're seeing a lot of growth in [New Orleans] and surrounding areas right now [with] people working on [recovery] projects. We have a lot of projects going on in that area right now."


About 1.4 million of the 4.7 million lines in Louisiana, Mississippi and Alabama were affected by the storm.

Better than before, but not hurricaneproof

Disaster-recovery modification is first and foremost on Qwest's agenda following Katrina. The carrier lost one regional office in Claremont, Miss., knocking out power on a fiber route that ran beside railroad tracks along the coast.

Katrina displaced that fiber three blocks away but did not cut it, according to Chris Coon, Qwest vice president of network operations. Trailers were brought in to connect the fiber to a new site for power while Qwest rebuilt the destroyed regional office farther north of Claremont Harbor and the coast. In Qwest's case, the carrier is fixing what was broken during Katrina, not upgrading the network for new services, Coon says.

Whether it's in cutting-edge new services or just making repairs, carriers say the telecom infrastructure around New Orleans continues to improve, giving the city possibly the most resilient and redundant network in the country.

"When all is said and done . . . the residents of New Orleans are going to have a better network serving them than what they had before," BellSouth's Smith says. "There will be no question about that. Suffice it to say that the overall network in New Orleans will be a more advanced and more capable network now than it was before the storm.''

"There's always people that ask, 'Can you make your network hurricaneproof?'" Smith says. "The example I use is, if those massive concrete sections of the [Interstate] 10 bridge can just be tossed like matchsticks, it's almost inconceivable to say we can build a facility that is hurricaneproof."

Wi-Fi and WiMAX to the rescue

While restoration work was underway, New Orleans relied on a municipal Wi-Fi mesh network as a backup, even for voice. And BellSouth also began offering pre-WiMAX service to small businesses in New Orleans after Katrina hit.

Dispute Slows School/County Fiber-Optic Network
Lynn Moore

Debbie Brewer was puzzled when crews started erecting a power pole in front of her Muskegon home at the corner of Francis Avenue and Creston Street last spring.

Why, she thought, put up another one when there's an existing pole not 10 feet away on the same corner?

She wasn't too pleased when she learned the answer: Verizon Communications wouldn't allow a consortium of schools and government to use any of its poles to string fiber optics for a countywide improvement project.

"That I don't like," said Brewer, of 1391 Francis. "They should be able to put the lines up on the poles because they need them.

"But what can you do about it?"

The consortium, known as the Shoreline Fiber Network, decided the only thing it could do was erect its own power poles. The result is a crowd of power poles on streets like Creston and Shonat, where Verizon poles sometimes are within a few feet of the new ones.

Verizon's claim that state law prevents it from allowing use of its poles is the latest snag in the $3 million fiber project that is two years behind schedule.

Local officials are fuming about Verizon's actions, calling them "delay tactics" and "sabotage." The total cost of avoiding Verizon poles is estimated at more than $300,000, said officials with the Muskegon Area Intermediate School District, which spearheaded the fiber project.

"This is a classic case of a project that has been developed for the common good going up against corporate self-interest," said MAISD Superintendent Susan Meston.

But Verizon says it's only following state telecommunications law that officials claim doesn't allow "joint-use networks" involving government and education.

"If they were attached to our poles, we would be violating the laws we operate under," said John VanWyck, external communications director for Verizon.

But Verizon, the nation's second-largest telephone company, will lose business when the fiber project is complete. Muskegon County government intends to use the fiber to switch from Verizon phone service to "Voice over Internet Protocol" calling, and school districts also are eyeing the cost-saving option, officials said.

The fiber also will allow schools, 911 Central Dispatch and the county to stop leasing "T1 lines" from Verizon that cost $500 to $700 per month. Those are broadband lines that can handle large amounts of voice and data.

The leased T1 lines, which cost Muskegon County $72,000 per year, do not have the capacity to handle the sophisticated software, security requirements and large data loads the county needs, said Eduardo Bedoya, manager of information systems for the county.

"What we have now is inadequate," Bedoya said.

The Shoreline Fiber Network was initiated in 2003 by the MAISD as a way for schools to collaborate -- and save money -- on wiring that will allow for distance-learning projects, classroom-to-classroom hookups and greatly improved data processing.

Bedoya compared a T1 line to a 11/8-inch water pipe while the fiber-optic cable is like a 24-foot main.

To further reduce costs, and spread the benefits of fiber optics, the MAISD invited the county, Central Dispatch, Muskegon Community and Baker colleges and a nonprofit Internet-service provider to join the project, forming the Shoreline Fiber Network.

As a result, the cost of the project for schools dropped from about $20,000 per mile to $4,000 per mile, Meston said. In all, the network will reach 130 miles, though school districts pay only the amount to get the fiber from their locations to a central hub at MAISD.

Estimates from the county have placed its savings at $6 million over the next 10 years.

"It was a really ambitious undertaking," Meston said. "It was a heartfelt way to save taxpayers' money."

The fiber network will enable 911 to implement $4.4 million in dispatch improvements approved by voters in fall 2002, including enhanced information systems to assist first responders.

By law, Verizon must allow educational entities to use its power poles that are in public right-of-ways.

But there's a difference in opinion on how the law treats consortiums that include educational and government groups. Fiber network officials said telephone companies can let consortiums use their poles, though they admit the law needs to be clearer. But Verizon says they're expressly banned.

After meeting with the Michigan Public Service Commission, Shoreline Fiber Network officials set up a meeting last month with a PSC staff member and Verizon to try to settle differences. In the end, fiber network officials decided it would be quicker and cheaper to just skip the 125 poles owned by Verizon it had planned to use than the alternative of taking the phone company to court, network officials said.

That means fiber already strung on 60 Verizon poles in the Whitehall area will be removed and instead buried underground, at a cost of about $154,000, said Marios Demetriou, associate superintendent for the MAISD.

Elsewhere, new poles have or will be erected around Verizon poles -- the total number of new poles is uncertain, though in some cases it will take two or three to avoid a Verizon pole, Demetriou said.

"We have to (put new poles up) in front of people's houses," Demetriou said. "It creates an aesthetic issue. If I was a citizen ... I would be upset."

Figuring out which poles were Verizon's was a headache in itself. Both Verizon and Consumers Energy claimed ownership of 25 poles, while there were some that neither utility claimed. The fiber network ended up paying Verizon $7,500 to pinpoint its poles so they could be avoided, network officials said.

Verizon posed other obstacles for Central Dispatch's use of a Verizon conduit for the fiber in downtown Muskegon. Verizon has been insisting it have access to the fiber cables that use the conduit, but Central Dispatch officials have said data transmitted on the fiber -- including sensitive law-enforcement transmissions and personal medical information -- must be kept confidential.

Central Dispatch wound up finding a way to avoid the Verizon conduit, said David McCastle, executive director of Muskegon Central Dispatch.

"It makes me angry because somewhere along the line, I have to guess their stand has to be fiscally motivated," McCastle said. "In the name of their dollar bottom line, they want to do what they can to mess with people in Muskegon County.

"It's better if someone doesn't want to play to just take your ball and walk away from them."

The fiber project will allow police officers to tap into information about crimes and suspects from other law-enforcement agencies, thereby helping -- and even speeding up -- investigations, McCastle said. In addition, firefighters heading out on medical calls will receive computer printouts with detailed information about patients, including recent surgeries. That information currently isn't provided over fire radio scanners because it's often confidential and would tie up scanner frequencies that fire departments share, McCastle said.

The fiber project will connect 25 fires stations and 11 police agencies into one connected network, McCastle said.

In all, the fiber project will involve about 3,500 power poles, the vast majority owned by Consumers Energy. Early on, Consumers was blamed for causing delays, though fiber network officials say those difficulties have mostly been worked out.

The process of getting approval to string wire on thousands of Consumer poles proved much slower than expected. In addition, the fiber network was denied access to poles on Consumers Energy's B.C. Cobb generating plant property, forcing the fiber to be buried underground.

A North Muskegon city ordinance requiring burial of utility lines along Ruddiman Avenue was another obstacle faced by the fiber network. That was overcome by taking alternate routes to reach the fire department and school district offices, officials said.

Officials now say the fiber network should be completed by the end of this year. Several schools already are online and connected to the MAISD hub, including Muskegon Public Schools, Orchard View Pubic Schools, both colleges and the Muskegon Area Career Tech Center.

Back to School, With Cellphone and Laptop
Jeffrey Selingo

It used to be that getting ready for another school year meant buying a few new No. 2 pencils, spiral notebooks and a lunchbox. Not anymore. Young children and teenagers, as well as college students, are going to school with more electronic gadgets than ever.

“Tech-based products are so much less expensive that the price point now allows kids to nag their parents to buy a particular product or buy one themselves,” said Peter Grunwald, president of Grunwald Associates, a consulting firm in Bethesda, Md., focusing on school technology.

As a result, the back-to-school season is one of the busiest for electronic retailers like Circuit City or Best Buy, rivaling only Christmas. “Purchases are more necessity-based at this time of year,” said Stephanie Gooch, product process manager for Best Buy. At Christmas, purchases “tend to be more gaming, entertainment-based,” she said.

Another change is that the newest tech devices are not aimed at just older students anymore. While laptops are still most useful for those going off to college, Mr. Grunwald says that as prices drop on a wide variety of products once meant for an older crowd, younger students start using them as well. “Kids are aging up,” he said.

Elementary/Middle School

Preteenagers are increasingly asking for cellphones of their own. While cellphones give parents a sense of security and help them keep track of their children’s busy lives, adults often resist buying them, concerned that younger children will use them as their older siblings do: to talk to friends, send text messages and play games.

The LG Migo VX1000 from Verizon Wireless ($49.99 with a two-year contract) addresses most of those worries. It is a child-friendly, simple phone: no text messaging, no games and no camera. It is also very small and light, well suited for child-size hands. The Migo has only four numbered buttons, which can dial four preprogrammed phone numbers. Those numbers cannot be changed without a password. To place a call, the child simply presses one of the numbered keys and the talk button. In the middle of the phone pad is a large key for emergency calls.

One Migo feature attractive to parents is the Chaperone service offered by Verizon Wireless ($9.99 a month extra). Using the phone’s Global Positioning System receiver, parents can keep track of their children through a Web site or on their own Verizon phones. For an additional $10 charge, the Chaperone service comes with a feature called Child Zone, which notifies parents when a child arrives in or leaves the vicinity of a specified location, like school or a playground.

Catherine Poling, the assistant principal at Kemptown Elementary School, near Frederick, Md., suggests that students also get a flash drive for portable storage of their computer files. “With the volume of files that students work on, including video and images, it would be helpful if they all had a mass storage device to transport files between home and school,” Ms. Poling said. One inexpensive option is the 512-megabyte Lexar JumpDrive FireFly ($29.99).

High School

The Hewlett-Packard 39gs graphing calculator, which is to go on sale this fall ($79.99), is likely to appeal to image-conscious teenagers with its sleek silver-and-gray design. The calculator offers an infrared option to share data with other H.P. devices, a U.S.B. port to download files to a computer, and a double screen that allows users to see two sets of information at the same time.

Teenagers were among the early adopters of cellphone cameras. Now they have the option of using a better camera — cellphone not included — to take photos and share them quickly with their friends: the Nikon CoolPix P1 ($549.95 suggested retail price, but much lower prices can be found online). It has Wi-Fi capability, allowing users to transmit high-quality photos through a wireless network. That means users need to be within range of a wireless hot spot, which is not as easy — at least not yet — as snapping a photo on a cellphone and sending it to a friend. It also takes some time to set up the wireless connection, because the device is not able to join a network automatically, as laptops can.

Of course, photos can still be shared the old-fashioned way — through prints. An all-out price war among retailers and online companies on photo printing has meant that fewer people have favored doing it themselves at home in recent years. But high school students typically like to fiddle with the look of their photos before printing them.

The Hewlett-Packard Photosmart 3310 All-in-One Printer ($349.99 after rebate) not only allows users to manipulate images, but also lets them play digital video clips on the printer’s image display, freeze a favorite scene and print it. Like many other H.P. printers, the model contains six separate ink cartridges, which saves replacing a single color cartridge regularly.


“You can’t go to college without a computer, and anymore that means a laptop,” said Ms. Gooch, the Best Buy manager.

Among the popular options this year are laptops that flip around to turn into tablet PC’s, like the Gateway CX210X convertible notebook ($1,299). The stylus that comes with the laptop can be used like a pen. For those unfamiliar with tablet PC’s it can take a little time to become comfortable with the smooth display, however, and the screen is sometimes difficult to see under certain lighting conditions. But the laptop could prove to be a big timesaver for students putting together study guides. For example, students could download a professor’s lecture notes to the laptop, write their own notes in the margins using the tablet PC, then print out a set to study.

For the Apple crowd, all MacBook models (starting at $1,099) feature not only a 13-inch wide-screen display, but also a built-in iSight camera for video chats over the Internet. By simply starting the iChat software and clicking on an icon to turn on iSight, homesick college freshmen can see and talk with relatives and friends anywhere who either have the same software or AOL Instant Messenger. The best part for cash-starved college students is that iSight is free with a broadband Internet connection.

Mr. Grunwald, the education consultant, also suggests that college students going off to a new campus — and a new city — might find a portable Global Positioning System device useful. Several manufacturers make the devices for mounting on the dashboard of a car, but add-ons to hand-helds are the best bet for college students, Mr. Grunwald says, since many students may already have the devices.

Earthcomber offers free, downloadable maps and directories on the Internet at www.earthcomber.com. For users with a G.P.S. unit, Earthcomber provides maps and other information. Those without a G.P.S. must tell the hand-held device where they are located. The Web site provides access to a range of information based on location: about movie showtimes, bars, teller machines, Wi-Fi hot spots, restaurants, live music and more. Free maps are also available for every city and county in the United States.

With cellphones nearly everywhere on college campuses, several mobile providers have services that provide most of the features of a navigation system. Cingular, for instance, offers access to Mapquest for data-enabled phones (normal data charges apply).

While some high school students are accustomed to having their own rooms at home, as freshmen in college they often have roommates in tight quarters. To save on space with all the electronics that students bring with them these days, Ms. Gooch at Best Buy recommends the Insignia combination TV/computer monitor ($320). The 15-inch television is handy for small spaces because it also has a built-in PC input that lets users connect a computer.

Some Colleges Bypassing TV Sports Contracts In Favor Of The Web
Pat Eaton-Robb

When Yale football coach Jack Siedlecki goes on a national recruiting trip, he hears the same questions over and over from parents.

"They always want to know, 'Are you on TV? Can I get the games?' " Siedlecki said.

With the exception of the game against rival Harvard, the answer is usually, "No."

The big TV networks simply aren't interested in the little Ivy League.

But the Ivy League and other small conferences may have found a way around that - the Internet.

Many schools, and now some conferences, have begun showing football and other sports on their Web sites.

"We can produce our own television and reach, literally, the entire world on the Web, without having to go through the issues of, is there cable availability? Is there satellite availability? Is there advertising support?" said Jeff Orleans, commissioner of the Ivy League.

He expects most of the league's sporting events will be online within seven years.

Big Sky Conference's Northern Arizona offered webcasts of home football games last year. Using the four cameras already set up to provide replays on the stadium scoreboard, the school added audio from its radio broadcasts along with continually updated statistics.

"Our fans love it," said Steven Shaff, a spokesman for the school's athletic department. "We had people in Alaska, parents of students in Canada, watching our games last year."

This season, the entire nine-school Big Sky Conference will webcast all football, basketball and volleyball games, using technology from Salt Lake City-based SportsCast Network LLC.

Fans will be able to choose which team's audio feed to which to listen. Games will be archived and can be downloaded to portable devices like Apple Computer Inc.'s iPod.

"This is the future," Big Sky Commissioner Doug Fullerton said. "The fan will decide what they are going to watch and when they are going to watch it."

Contrast that with television, where only a handful of games each week are chosen for national broadcast, primarily featuring Top 25 Division I-A teams.

The financial setup is different from traditional television contracts, in which networks pay a flat fee for broadcast rights. In the Big Sky contract, the schools keep the rights and provide feeds to SportsCast, which processes the video for viewing online.

The schools sell advertising and charge a subscription fee - it's $60 to follow one Big Sky school all year. The schools share profits with SportsCast.

Until recently putting sports online had not been practical. Not enough people had high-speed Internet connections.

That's changed. According to the Pew Internet and American Life Project, 62 percent of U.S. Internet users now have broadband at home, compared with 21 percent just four years ago.

Online video technology also has improved, allowing for bigger, sharper pictures that take up much less bandwidth, said Michael Begley, the CEO and founder of SportsCast.

SportsCast isn't alone.

The NCAA last year contracted with Charleston, S.C.-based Penn Atlantic LLC to help show some of its Division II and III basketball championships. The Division III semifinal games last March had 49,000 people log on, said Jack Pennington, the chief executive of Penn Atlantic.

His company will be streaming 39 Western Athletic Conference football games this year.

Fans of larger schools will see more games as well.

This fall, ESPN's new online channel, ESPN 360, will show 30 football games, 10 of them, involving teams such as Virginia Tech, Purdue, Miami and Minnesota, exclusively on that Web site. The site, available to about 6 million homes, will also have such features as chat rooms, statistics and online polls.

"It truly is interactive television," said Tanya Van Court, ESPN's vice president and general manager of Broadband and Interactive Television. "It really gives you all the best things about the Internet, with all the best things about television."

For several years, ESPN also has offered games that are televised only regionally to cable and Internet viewers on a pay-per-view basis.

Van Court says the network is not concerned about losing revenue to schools that decide to produce their own broadcasts.

"Even with the number of networks that we have on television, we still don't have the capacity to put on every sporting event that we think our fans want to see," she said.

She said schools' willingness to show their own games online indicates demand not only for the games but also for the new platform.

The schools also don't see the Web replacing television. Major conferences make millions of dollars from their football and basketball television contracts, but many also plan to webcast other sports, such as volleyball or swimming.

The Big Ten Conference announced plans this summer create its own cable channel for minor sports. The Big Ten Channel also will be available through the Internet, iPods, cell phones and other technologies, the league said.

"There's still nothing like sitting in your chair and watching high-definition football on TV," said Jon Kasper, a spokesman for the Big Sky Conference. "But for our fans that don't have that option, this is the wave of the future. It's what everyone will be doing in two, three or five years."

AOL Buys Social-Networking Developer
Anick Jesdanun

AOL has purchased a developer of Web-based chat and other communications technologies as the company seeks to expand the reach of its popular AIM instant-messaging service and its ad-supported offerings like video clips.

Dating sites, chat services and other communities now using Userplane technology will have the option of integrating their users with AOL Instant Messenger. That means an AIM user would be able to contact a Userplane user directly, something not currently possible.

AOL's purchase of Userplane, announced Monday, also gives AOL the ability to lure the startup's users to its news articles, video clips and other content, just as it now does with AIM users.

That is important as AOL seeks to boost visits and thus advertising revenues to offset expected declines as it drops subscription fees for millions of high-speed users. Analysts have pointed to AOL's leverage of AIM and video as key to making its new strategy work.

AOL, already the leader in instant messaging, also can ultimately adopt some of Userplane's technology into AIM, although a key feature, the ability to conduct instant messaging over the Web without needing to install a separate program, already is available through AIM.com.

Financial terms of the deal were not disclosed.

Userplane, the operating name for Totekasche Holdings Inc., will become a subsidiary of AOL LLC, which is a unit of Time Warner Inc. The startup's 12 employees will remain in Southern California, though they may likely move to AOL's existing offices in Santa Monica, Calif.

AOL spokesman Nicholas Graham said most of Userplane's existing customers, which include News Corp.'s MySpace.com and IGN; Date.com and Friendster Inc., won't be affected. The exceptions, he said, are porn, gambling and other sites that violate AOL's policies.

Userplane now powers about 100,000 Web sites and online communities, each with a wide-ranging number of users.

The purchase of Userplane, which closed last week, follows acquisitions of video ad company Lightningcast Inc. in May and video search company Truveo Inc. in January.

Candidates Seek Youths at MySpace
Anick Jesdanun

Phil Angelides, California's Democratic candidate for governor, had nothing to do with creating a MySpace page under his name. His teenage daughter was the first to point out his presence on the popular online hangout.

But rather than kill a volunteer's unauthorized efforts, the campaign has embraced the youth-heavy site, using Angelides' personal profile page to post position papers and other announcements. It also scans the comments section to gauge what's on youths' minds, turning it into an informal focus group.

"We've come to embrace it as our own," campaign spokesman Brian Brokaw said. "It can help you reach an audience that otherwise might be more difficult to reach. Not as many young voters watch the evening news."

The campaign has also turned to video-sharing site YouTube.com to circulate campaign ads, speeches and other clips.

In many ways, these free, user-driven community sites are to this year's races what blogs were to campaigns two years ago. They are not replacements for traditional staples like TV ads and direct mailings, but they offer the latest venues for campaigns to reach younger voters and mobilize them to volunteer.

"If you're looking to find somebody who's going to spend 22 hours putting up signs for you, I'd go to MySpace," said Phil Noble, who runs the PoliticsOnline consulting firm.

Rod Shealy, a consultant for two Republican candidates in South Carolina, said several volunteers emerged after the campaigns blasted help requests to hundreds of MySpace supporters.

"It's (like) the soda fountains of the 50s," he said. "It's where young people hang out."

Supporters and opponents alike have even created profiles - unofficially - for the 2008 presidential race. One MySpace page for Sen. Hillary Rodham Clinton, for instance, declares her "The President of the United States of America."

Politicians join businesses, news organizations and others looking to exploit the growth in user-driven sites. Campaigns face greater headaches in controlling their message, but supporters say such sites offer more good than harm.

Driven largely by word of mouth, News Corp.'s MySpace has rapidly risen to become the second-busiest site in the United States, behind Yahoo Inc., according to comScore Media Metrix.

Its more than 100 million registered users can share messages, songs, photos and video on profile pages. They can designate other MySpace users as "friends," building a network that grows as friends link to more friends, and so on.

Angelides, currently California's treasurer, has more than 5,000 friends - and counting.

"It's almost like an endorsement list," said Steven Clift, editor of the Web site Democracies Online. "Pictures show up, and it gave me the impression that these are real people who support these people."

Ned Lamont, who defeated Democratic U.S. Sen. Joe Lieberman in last week's Connecticut primary, had more than 175 MySpace friends.

Although it's not possible to isolate MySpace's contribution to the win, its ability to mobilize friends and those friends' friends created "waves of support that Lamont was able to catch," Steve Schneider, a political science professor at the State University of New York Institute of Technology.

Many candidates, however, are sitting on the sidelines for now.

Although California Gov. Arnold Schwarzenegger's campaign has turned to YouTube to circulate critical information on Angelides, his MySpace profiles are all unauthorized, some even unflattering - Adolf Hitler is a friend at one. (MySpace will remove fake profiles after receiving complaints, but not all candidates bother, and some parodies are protected.)

Russ Kelly, spokesman for GOP gubernatorial candidate John Binkley in Alaska, questions how these efforts will translate into votes. He recalled how Democrat Howard Dean had embraced cutting-edge Internet tools during the 2004 presidential race, but "couldn't even get out of the primary."

Time spent on MySpace could divert resources, said Leonardo Alcivar, spokesman for Republican Lynn Swann's campaign for Pennsylvania governor. But Alcivar said the campaign wouldn't want to drive voters to an opponent simply for lack of a profile, so it will probably set one up this fall when students return to college.

And although congressional candidate Vernon Robinson got a flood of donations after an old TV ad began appearing on YouTube and elsewhere, the North Carolina Republican still plans to buy television time to reach actual voters. Sites like YouTube, he said, may be better at reaching a national audience.

MySpace, which says about 80 percent of its registered users are of voting age, is considering creating a section just for politicians and social activists.

Facebook Inc., where some college students have already set up unofficial campaign profiles, plans to offer reduced advertising rates for candidates and advocacy groups this fall, likely letting campaigns create mini-profiles.

Friendster Inc., where Democrat John Kerry had a profile in 2004, is lifting its 1,000-friends cap to accommodate campaigns and other groups.

YouTube Inc. has no specific political plans, but campaigns and critics alike have been using it to circulate television ads, parodies and clips of events.

Visitors to these sites can easily send friends links to a video or profile page they like - with the campaign doing very little or no work.

"The best recommendation we can get is word of mouth, from one friend or family member to another," said Isaac Baker, spokesman for Ohio Democrat Ted Strickland, whose gubernatorial campaign has profiles on MySpace, Facebook and Friendster.

These sites do carry some risks, however.

In South Carolina, GOP Lt. Gov. Andre Bauer's MySpace profile featured friends who had submitted scantily clad photos of themselves for display. The photos disappeared after local news outlets called attention to it.

Candidates also risk embarrassment should their friends advocate a position - bigotry or a stance on abortion, for instance - with which the candidate disagrees.

At many campaigns, volunteers got MySpace profiles or YouTube accounts started, generally unbeknown to the candidate. Some campaigns, fearing an inability to deliver a unified message and lacking staff to monitor such sites, reacted by seeking their removal.

But there can be a payoff when done right.

Jeff Mascott, managing director with the consultancy Rightclick Strategies, said that unlike campaign Web sites and blogs, both of which remain important but draw individuals already interested in politics, "you reach a wider group who may not necessarily come to you."

The Next Phase Of Instant Messaging

meebo could be a hit with the MySpace generation - and a boon for big businesses, too.
David Kirkpatrick

A tiny software company called meebo Wednesday opened a new channel of communication on the Web. Now, if you have a Web page your visitors can talk to you using instant messaging, even if you're away from your home computer. (That includes all you MySpace users.)

If this doesn't sound interesting, you are probably over the age of 25. The founders of meebo are, but just barely.

"Like Hotmail put e-mail into the Web, we put IM into the Web," says meebo CEO Seth Sternberg, who is 28.

meebo got its start when its three founders, Sternberg and Elaine Wherry, 27, and Sandy Jen, 25, were all meeting repeatedly at one another's houses in Silicon Valley trying to come up with ideas for a consumer Web company.

As a company history on meebo.com explains: "Sandy kept having this problem where she couldn't easily IM her friends from Seth's and Elaine's houses. Hence, meebo!"

That was meebo's first innovation - a very efficient and rapid Web-based IM service, which enables you to combine your AIM, ICQ, Yahoo or MSN instant message accounts in one place.

Meebo wasn't first to offer Web-based instant messaging - but it is, by most accounts, the most efficient and easiest.

It isn't the ability to consolidate accounts that gets users excited, according to Sternberg and Wherry, who I met with recently, but simply the fact that meebo works as well on the Web as an IM software client works on your PC. Now you can be in touch with your IM buddies from any computer.

Wednesday's innovation is to take that capability and insert it into any page on the Internet, private or commercial. Once your Web site has a meebo window, when you log into meebo you not only see your usual buddies. You also can see a special group on your buddy list that represents visitors to your Web page.
Not just for the MySpace generation

"This is going to be really big with the MySpace kids," says Sternberg. I think he's right. After you've displayed yourself to the world in all your tasteless glory, won't you want to find out who's looking at it all? (I'm assuming you're 18.) Won't you want to have the capability to talk to them?

But meebo could be used as readily on eBay or Fortune.com, or IBM.com for that matter. The company will let any site use its service, with the only caveat that past a certain level of usage they might ask you to pay something. Otherwise it's free.

To use this meebo capability, just go to its homepage and get an account. Then download the code for the meebo "widget" and insert it into your Web page.

The earnestness and enthusiasm of meebo's founders is as endearing as the simplicity and apparent usefulness of its service. In a reversal of the usual pattern, the top technologists are the two women. Sternberg is the front man and marketing guy.

The company's ethos is resolutely informal and silly. The founders' actual names don't even appear on the site. Identified only by their first names, the founders are listed as "Biz Guy," (Sternberg) "Server Chick" (Jen), and "AJAX Girl" (Wherry). (Ajax is a software technology for creating interactive web pages, which Wherry uses for creating the meebo user interface.)

But meebo's software code, by all appearances, is rock solid and serious. It's backers are serious, too. Sequoia Capital, the venture capital firm that backed YouTube, invested in January. Netscape co-founder Marc Andreessen is an investor and advisor.

meebo, founded in September 2005, already has 700,000 user logins per day, up 60,000 in the three weeks since I met with the founders. Each user stays on the service an average of 69 minutes. That's a lot of time to show advertisements, which meebo will almost certainly eventually do.

Sternberg and Wherry say there will be plenty of ways to make money from meebo, but in classic old-school Web fashion that hasn't been their focus just yet. They expect, aside from traffic-based charges for heavy users, to make money with subtle targeted ads as well as by charging for personalization features.

We may be more than a decade into the Web, but it's still a pleasure to find a tiny 12-person company with a great product, enthusiastic founders and the potential to change the world.

"Witch Hunt" in the Silicon Valley

Network Appliance CEO Daniel Warmenhoven says the government's search for backdated options among tech companies is going too far
Peter Burrows

At the start of this year, word began to spread around Silicon Valley that the Securities & Exchange Commission was on the prowl for companies that improperly accounted for stock options grants during the Internet boom. For a while, executives whispered about which companies were most at risk. But now, many executives are surprised by the breadth of the government's probe, which has resulted in SEC investigations into 80 companies and criminal indictments against former executives at Brocade Communications (BRCD ) and Comverse Technology (CMVT ). In the latest development, on Aug. 14, Sanmina-SCI (SANM ) and PMC-Sierra (PMCS ) revealed potential problems related to their stock option grants.

Already, most tech companies have launched their own investigations of their books, to spot irregularities before the feds or the press does it for them. But many tech executives are now beginning to use the phrase "witch hunt" to describe the growing scandal. While few doubt there were cases of outright fraud that should be punished, they fear that the widening probe has now reached a counterproductive level. Rather than just catching scofflaws, well-meaning companies and executives are being wrongly impugned by the scandal, in their view.

Speaking Out

This view is as common in Silicon Valley as startups and circuit boards, but few executives have expressed it publicly, given the legal exposure and intense political and media pressure. But Daniel Warmenhoven, who has been CEO of storage gear maker Network Appliance (NTAP ) for the past 12 years, agreed to speak publicly about his views—in large part because his company has already done a comprehensive review of its books. NetApp commissioned an independent investigation of its accounting to head off any problems. The SEC has asked for information on NetApp's options program, but has not expressed any concerns, he says. Here are edited excerpts from three recent phone interviews with Peter Burrows, the Computers editor in BusinessWeek's Silicon Valley bureau.

What's your overall sense of the stock options scandal?
I think it's become a witch hunt. I think the government is looking to find some egregious examples [of wrongdoing] and to publicly hang people for them. That's fine. But where does it stop? I'm not saying the past practices were all good. But I thought the SEC's role was to build investor confidence. What they're doing right now is destroying it, and I don't see the purpose.

They're penalizing today's shareholders for events that occurred five years ago. But who is this protecting, exactly? With Enron, every shareholder in the company lost money. The same with Qwest, and with MCI-Worldcom. But I don't know who the injured party is here.

The victim was the investor, who was not getting accurate information about the options their companies were doling out. And in the case of backdating (in which shares are granted at prices below the market price on the day of the grant, guaranteeing the recipient paper profits), insiders were getting a better deal on shares than the company's public investors could get.

First of all, backdating options wasn't illegal. You just had to make sure you disclosed it and properly expensed them. And the laws have changed since [then]. Now, [because new regulations compel companies to expense all options, not just special cases like backdated "in the money"options], the basic fraud issue has by definition gone away. And let's not forget that most companies' options vest over four years, so most of the guys who got these grants in 1999 and 2000 never got a chance to cash out anyway (since most tech stocks are trading far below even the backdated prices).

So backdating isn't illegal if it's fully disclosed to the public and properly accounted for. But an awful lot of tech companies are admitting now that they didn't properly disclose and account for them. Why was this so common?
This is going to sound weird, but what difference did it make [if the options expense was recorded on company's official financial records using generally accepted accounting principles, or GAAP]? It was going to be removed for the pro forma reports anyway, and that's all the investment community cared about. And there was no rigor around the enforcement of this [by the SEC]. I'm not trying to defend the practice. But [properly disclosing and expensing in-the-money options] just wasn't viewed as a high priority by anyone. It generally wasn't even audited by the audit firms. The view was that close enough is close enough, which is why some people crossed over the line.

So do you think we'll see lots of companies found guilty, and see executives go to jail?

I think so. It's pretty clear that the SEC wouldn't prosecute cases if they didn't think there were egregious actions at the most senior management levels that were tantamount to fraud. I think they will bring many cases, and probably prevail on many of them.

Putting aside cases of outright fraud, explain why so many other companies are getting caught up in this scandal.
I think it falls into three buckets. First, there were companies who were very aggressive about using options on the recruiting front, who used a very loose interpretation of the rules, and didn't pay attention to disclosure like they should have.

Then there were the opportunists, who would take advantage of the fact that they had information the public didn't have [to time grants ahead of good news so recipients would get an immediate bump in the value of the underlying shares]. For example, we used to grant options to executives on the day our compensation committee did the annual executive performance reviews. This meeting took place a week or so before we announced earnings. Now, if we knew we were going to stink it up that quarter, you could ask yourself: Should we wait two weeks [to grant the options, after the stock had crashed]? We never did this, but it would have been legal.

Finally, there were companies that made administrative mistakes. For example, we do an audit at the end of each quarter just to make sure all our options paperwork is complete. At the end of the April quarter in 2003, we found that we didn't have the faxed signature from one of the members of the compensation committee for a grant we'd made to one of our executives. The director said he had sent it, but we couldn't find the paperwork. So we got him to send a new signature, and we closed the books on the transaction the following quarter. Officially, there was no problem. We had obtained all the proper approvals from the compensation committee to grant the options. But then there's that last administrative step: getting the sign-off on the grant itself, and having the documentation to prove it. And that last step is where a lot of the SEC focus seems to be now, and it's where there was a lot less rigor on the administrative side back then.

What would you guess is the ratio between outright fraud and honest process mistakes like this one?
At the end of the day, I think you'll find almost every company has some impaired records like this. I'd bet there will be 10 cases of egregious behavior for every 1,000 cases of clerical mistakes.

Even if tech companies didn't think the price of an option was a big deal, it doesn't prove they were, in fact, being careful to make sure options programs didn't unfairly benefit insiders. If not price, what were you and your fellow CEOs focused on to make sure you did right by shareholders?

There was a lot more focus on the number of shares we granted than on the price. The number of shares is what creates dilution, and we manage the number of shares being granted every year within a dilution cap. Every year, I talked to my big shareholders and asked for their support [for the year's options program], and explained to them in great detail what the options will be used for—to attract new hires, for executives, whatever.

Many of the allegations in this scandal center on overaggressive use of options to hire and retain employees. To what extent can the trend be blamed not on corporate greed, but on the necessity to recruit talented employees in a very competitive market?
I never thought it was necessary to do those things to attract people. If someone we were trying to recruit said: 'I won't join unless you give me a discounted option', my answer was 'I don't think you belong here.' After all, our stock price back then was generally up and to the right. That little differential [between the price of the option a few days or weeks before, rather than on the person's hire date] shouldn't affect someone's decision to come and make a career with us.

Some executives I've spoken with say it's preposterous to think that so many executives were so focused on options accounting fraud—if only because there were so many more powerful legal ways to pump up their stocks.
Absolutely. Almost anything I did would have more impact on the company—calling on customers, driving down cost of goods sold to get the gross margins up, signing up a partner. Fiddling with stock options didn't return much in the way of a business result.

And stock options don't vest for at least a year, so we're talking about a form of long-term compensation. To take such a short-term view [such as cooking the books to avoid options-related expense] would have struck me as, well, like the millionaire that clips coupons. If I can't make the stock move more than that by the time the options vest, I'm not being very effective.

How is this scandal affecting you personally, and your friends who are executives? Does it make you want to retire sooner than you might have? This is one more straw on the camel's back, but not the one that would singularly cause someone to change their career path. A few years ago [before the options scandal], my CFO walked into my office and quit. He said "I'm just tired of being a CFO," and he's as pure as the driven snow. He said, "I'm tired of going to conferences and speaking with investors and always feeling like I'm guilty of something." He said all the fun was gone. So I put him on the board. He used to work for me. Now I work for him.

Are you resentful of the government's treatment of tech?
It's like this. Did you ever drive the speed limit on 280 (a highway in Silicon Valley where traffic typically moves along at 80 mph or more)? Of course not. Nobody does. Does that make you a bad person? That's what this feels like. It's like the police come to you in 2006 and say,"Hey, it turns out we have videotapes of everyone from 2000, and we have video of you speeding 18 times. Here are your tickets." On the other hand, I don't think [the SEC] has much of a choice. When academics start publishing their data (on all the companies that issued options at suspiciously low prices), what are they supposed to do? Ignore it? They have to do something with it. And the more rocks they turn over, the more snakes they find. The trouble is that there are people who I think have high integrity who are going to go through a period of duress. They're going to go through hell.

Are you surprised by anything else about this scandal so far?
I'm surprised that companies like Yahoo! (YHOO ) and Google (GOOG ) and eBay (EBAY ) haven't been mentioned. They were all really aggressive hirers at the time, but they haven't shown up in the press. Maybe [the SEC] hasn't gotten to the Y's yet, but they're past the E's.

What impact do you think the scandal is having on tech stocks?
The more airtime it gets, it creates real issues of investor confidence. We're all being tarred with the same brush right now. Tech stocks aren't just down because Dell (DELL ) or EMC (EMC ) or whoever missed a quarter. I really think there's something in the water. If you're an investor, what tech stock can you buy that you're sure won't be a target next week?

Agencies Are Watching as Ads Go Online
Julie Bosman

AMONG the teenage video diaries, pet tricks and rejected television pilots circulating on the online video site YouTube, there is another major category of clips: advertisements. But in this case, the companies advertised do not pay for the ads, and they cannot predict when they will appear, or in what form.

Some of the ads are delivered straight to the Web from television. These commercials are popular or clever enough to gain traction on YouTube, which allows its users to post and view hundreds of millions of videos.

Other ads are homemade and crude takeoffs on popular ads that can look like low-budget short films. Still others are combinations of real and fake ads, cobbled together by taking clips of real commercials and adding amateur video shot in the backyard, at work or in the basement laundry room.

It is the mock ads that are capturing the attention of ad agencies, which are slowly becoming used to having their work transformed from a slick, polished television spot into a mock ad reminiscent of a spoof from “Saturday Night Live.”

“I consider it the highest form of flattery to show up on YouTube,” said Matt Lindley, an executive creative director at Arnold Worldwide in Boston, an advertising agency that is owned by Havas.

•Arnold created a campaign for Vonage, the nation’s largest Internet phone provider, that has made its way to YouTube in relatively large numbers. The original campaign, titled “Stupid Things,” is a video homage to daredevil stunts like those seen on the MTV series “Jackass.”

Since then, the easily imitated ads have inspired knockoffs on YouTube. At least 100 mock Vonage videos are currently posted on the site, and many have been viewed at least 5,000 times.

Each original Vonage commercial featured a grainy clip of a stunt, which the agency culled from the Internet or “America’s Funniest Home Videos,” accompanied by the infectious song “Woo Hoo.” (After the video clip, white lettering over a bright orange background reads: “People do stupid things. Like pay too much for phone service. Switch to Vonage.”)

The homemade Vonage ads on YouTube show people falling off chairs and jumping out of moving vehicles, as well as on-camera gaffes by politicians and television anchors. One Vonage video that was posted to YouTube on Sunday opens with a teenage boy banging his head against a wall, then rubbing his forehead and grimacing. (A caption accompanying the video explains, “People do stupid things, and I did one just for the sake of the movie.”)

Adding to the virtual clearinghouse for popular advertising that YouTube has become, mock commercials for brands like Apple, Dr Pepper and Burger King have popped up on the site, along with relentless send-ups of the ubiquitous MasterCard “Priceless” campaign.

But sometimes a commercial spoof on YouTube can take on a harder edge. Some videos have pointed out supposed flaws in a company’s product, like a fake Apple ad on YouTube that runs more than three minutes, six times the length of a standard television spot.

“One of the coolest features of the Macintosh is it’s really easy to shut down,” the man in the video said sardonically. “All you have to do is be using a piece of software and then, poof! It goes away. It’s gone. It shut down. You didn’t push any buttons, you didn’t close, you didn’t even save. It’s just gone.”

A fake Volkswagen commercial that circulated on the Web last year showed a man detonate a car bomb in his Volkswagen in front of a busy sidewalk cafe — not exactly the image Volkswagen had in mind.

“To a degree, it’s like brand terrorism on the Internet,” said Jeff Benjamin, the interactive creative director for Crispin Porter & Bogusky, the advertising agency that holds the Volkswagen account. “You have absolutely no control over stuff like that.”

•If an agency does not like a video circulating on YouTube, there isn’t much that can be done to stop it, Mr. Benjamin conceded.

“It’s a tough situation because as a brand you don’t want to go out there and censor people,” he said. “You just have to let it happen sometimes and be brave enough with the brand to give room for the good stuff to happen.”

Still, ad agencies can’t resist trying to manipulate sites like YouTube and Google Video to their own advantage.

Many agencies post their newly created ads on the sites, hoping that visitors will view the videos and e-mail them around. Crispin made longer cuts of commercials for Burger King that the agency posted only on YouTube and Google Video.

Some of the ads on YouTube that parodied the Vonage commercials were good enough to make Mr. Lindley of Arnold consider his future employment prospects: “When they get better than the stuff I make, I’ll be out of a job.”

First Blu-Ray Disc Drive Won’t Play Blu-Ray Movies
Asher Moses

The first Blu-ray (BD) disc drive for desktop PCs is here, but be warned -- it won't play commercial BD movies.

Sony officially announced its BWU-100A product at its "Experience More 2006" event in Sydney yesterday, all the while acknowledging that there's significant room for improvement before the product is viable for integration into media centre PCs.

Vincent Bautista, Sony's product manager for data storage, told CNET.com.au that due to copy protection issues and lagging software development, the drive will only play user-recorded high-definition content from a digital camcorder, and not commercial movies released under the BD format.

Bautista says that one of two reasons for this is the fact that commercial content is encrypted with High-Bandwidth Digital Content Protection (HDCP), which can only be decrypted using a HDCP-compliant graphics card that offers DVI or HDMI connections. Since there are currently no PCs for sale offering graphics chips that support HDCP, this isn't yet possible.

The second reason, according to Bautista, is that BD playback software that can decrypt HDCP isn't "released as a saleable item yet". Today, the only HDCP-supporting BD playback application is the OEM version of Intervideo WinDVD BD that's bundled with Sony's VAIO VGN-AR18GP notebook. The AR18GP also offers an HDCP-compliant HDMI connector, which makes it capable of playing commercial movies without issue.

Bautista is optimistic that both issues will be resolved "soon", and says that despite not being able to play commercial content, the drive is still useful as a "storage device", particularly for those looking to create and distribute their own high-definition home movies on BD-R and BD-RE discs.

The Sony BWU100A has a write speed of 2x and will be available this month for AU$1399.

Editor's Note: CNET.com.au is targeted at the Australian market, so the stories published here only consider products available to Australian consumers at the time of publication.

HDTV Hardware Makers Fight Customer Confusion
Erica Ogg

Consumers are confused about high-definition television.

Most buyers and potential customers do not have a firm grasp on what exactly this whole HDTV thing is all about, according to Sony Electronics President Stan Glasgow and Panasonic North America Chief Technology Officer Paul Liao. But both executives say they'd like to help.

At the fourth annual DisplaySearch HDTV Conference on Wednesday, the two consumer electronics executives stressed the importance of educating both consumers and retailers about high-definition content, such as HDTV channel services and next-generation DVD formats, and hardware including TVs and HD DVD and Blu-ray Disc players.

"Some of us have confused ourselves as to what's going on. You can imagine how consumers are feeling," Glasgow told the audience here at the Beverly Hilton Hotel.

He cited a 2005 Consumer Electronics Association study that revealed 20 minutes is the average time consumers will fuss with a complicated product before giving in to frustration and returning it.

Panasonic's Liao said consumers routinely misunderstand the benefits and features of HDTV, such as improved resolution, color and brightness. According to a July survey by Panasonic, one-fourth of respondents thought the purchase of an HDTV automatically included high-definition picture on all channels (not true). About 30 percent who answered said they had no idea what to do with a new HDTV after opening up the packaging. They "really do need a lot of help," Liao said.

Glasgow said Sony has taken steps to combat misunderstanding over HDTV by investing in customer service on the company's Web site and working with retail partners and its own stores. For example, he said, the company allows customers to sample the product in the store before taking it home and figuring out they don't know how to operate it.

Panasonic is also aiming for what Liao calls "extreme customer satisfaction" by offering consumers help on how to better understand its products.

Anyone who buys a plasma display from Panasonic is automatically enrolled in the new Plasma Concierge program. It offers priority customer service appointments to members and over-the-phone consultations.

Liao said that level of personal service is going to be the company's hallmark. This "extreme" approach, he said, will boost the sales of plasma TVs and other Panasonic products.

Glasgow reiterated that their concern should be echoed by everyone in the business with a stake in HD. The best way to do this is to help potential buyers figure out exactly what they're purchasing so that the dreaded "R"-word can be avoided: returns.

"It's up to everybody in the industry to educate," Glasgow said. "In the end, consumers returning products hurts everybody."

Kodak, NCM Developing Digital Theater Software

Kodak Digital Cinema and National CineMedia LLC, a partnership of the three top U.S. movie theater chains, on Wednesday said they are developing theater management software to automate digital cinema systems now being installed at movie theaters worldwide.

Kodak's <EK.N> operating system has been used on about 2,000 screens in North America for the past two years to manage pre-show advertising, box offices and theater lighting and temperature from a central point in theaters.

The existing system will be modified to also handle digital feature film presentations, said Bob Mayson, general manager of Kodak Digital Motion Imaging.

Kodak's operating system is designed to operate with all digital projectors and playback systems, Mayson said.

"What we are talking about here is an operating system akin to how (Microsoft) Windows can drive applications on your computer," Mayson said.

The two companies plan to run trials with the new system later this year at 60 sites and to market it to the 15 chains that already use Kodak's operating system, Mayson said.

NCM partners AMC Entertainment Inc, Cinemark USA and Regal Entertainment Group <RGC.N> have not committed to installing the system on their 13,000 screens, Mayson said.

Kodak is hoping to install the systems on the partnership's 13,000 screens, he said.

New DVD’s: Eric Rohmer Collection
Dave Kehr


Eric Rohmer turned 86 this year, though his output hardly seems to have slowed. In the last two years he has released one important feature, “Triple Agent,” and one short film, “Le Canapé Rouge,” which with any luck will turn up in the United States one of these days. At the moment he is completing a new feature, “Les Amours d’Astrée et de Céladon,” for release in 2007.

Mr. Rohmer first found international fame almost 40 years ago, when his austere little comedy about a Roman Catholic intellectual (Jean-Louis Trintignant) struggling with the temptation represented by a sensual divorcée (Françoise Fabian) became a success on the art-house circuit. That film, “My Night at Maud’s,” seemed to represent something new: an unabashedly conversational cinema, in which the action was largely confined to a single, snowbound apartment. The camera work had a classical invisibility, and the dialogue emerged in fully wrought phrases, impeccably enunciated by stage-trained actors who seemed never to have heard of the mumblings of the Method.

“Maud,” it turned out, was the third episode in a series that Mr. Rohmer had titled “Six Moral Tales,” preceded by two short films and followed by three more features. The series has now been packaged by the Criterion Collection into a single box set, filled with a wealth of extras unusual even for that generous organization. Two books are included: a translation of the short stories Mr. Rohmer wrote to guide his films and a volume of essays that includes Mr. Rohmer’s own apologia, “For a Talking Cinema.”
Newly shot interviews appear throughout the six discs, including a conversation between Mr. Rohmer and one of his first producers (and incidental stars), Barbet Schroeder, as well as chats with Rohmer collaborators like the actors Jean-Claude Brialy, Béatrice Romand and Laurence de Monaghan, who appeared together in “Claire’s Knee.”

Best, there are several of the short films that Mr. Rohmer has continued to create throughout his career, including the exquisite and atypical “Nadja in Paris,” a gracefully romantic documentary portrait of Paris as seen through the eyes of an American exchange student.

An afterword is provided by the American writer and director Neil LaBute, whose work is not only a proud example of “a talking cinema” but also appears to have found unacknowledged inspiration in Mr. Rohmer’s films. The two earliest “Moral Tales” — “The Bakery Girl of Monceau” (1963) and “Suzanne’s Career” (1963) — display an appreciation for male cruelty and female passive-aggression that seems suggestively close to Mr. LaBute’s work (“In the Company of Men,” 1997), though Mr. Rohmer would go on to show greater compassion toward his conflicted, unconsciously destructive heroes.

The major works — “Maud,” “La Collectionneuse” (1967), “Claire’s Knee” (1970) and “Love in the Afternoon” (1972) — have never looked better than they do in these new transfers, which Mr. Rohmer supervised. And the movies themselves, of course, remain as seductive as ever: elegant minuets of mind and matter, spirit and body, love and sex, in which language itself, by the end of the series, carries an erotic charge. At $99.95, the set may not be a casual investment, but it is one that will pay off in years of pleasurable viewing. This is certainly one of the most significant DVD releases of the year. French with English subtitles. Not rated.

A New Film Documents One Town’s Automotive Version of Graffiti

Herb Swanson for The New York Times

David Carr

Deer Isle and the town of Stonington, at its southern tip, have long served as both muse and home for storied American artists. William and Emily Muir are the stuff of local legend for their work in a variety of mediums, and Stephen Pace has spent time depicting both the idyll and industry of life here.

Visitors to the island in recent seasons may have noticed that a new artist is making his mark as well: Chuggy, a k a Chuck Proper. That mark usually involves a long strip of angry-looking scalded rubber, which can be seen on many of the island’s twisting roads.

For years, those marks and similar ones have left some locals scratching their heads and visitors anxiously clenching the wheel. It turns out that they are a kind of rural car- and truck-made graffiti — a byproduct of a longtime island ritual that gives this central Maine town character and provides some rugged contrast to the pastoral life here.

And while the work of Chuggy and the native tribe of so-called burners may never hang in one of the dozens of galleries in and near Stonington, their handiwork is being memorialized in “Tire Tracks,” a 40-minute documentary.

The film, which will have its premiere here at the end of the month, was commissioned by Opera House Arts, the nonprofit organization that operates the Stonington Opera House. A landmark originally constructed to satisfy the opera needs of the Italian stone cutters who arrived in the 1890’s, the Opera House has since been refurbished and transformed into a cultural center that provides year-round programming.

John Steed, a house manager at the opera and a first-time filmmaker, was the director. The Maine Community Foundation’s Expansion Arts Fund came up with a $5,000 grant to pay for the project.

In the movie young people and some adults (Chuggy is 50), in tricked-out pickups and well-muscled cars with tweaked transmissions, lay rubber by standing on the brake and flooring the accelerator. Before you know it, the back tires are spinning, melting themselves into the pavement.

The drivers use a combination of technique and raw horsepower to lay down as much rubber as they can, often fishtailing in the process and creating undulating streaks of inky black on the road.

The act of making a mark, in the movie, looks more comic than menacing. Some kid, egged on by his peers, will light up his wheels and go tearing down the road, sometimes blowing up the tire or dropping a drivetrain in the process, which leads to huge gales of laughter among the onlookers.

It is a spectacle, sometimes generating enough smoke to obscure the vehicle and accompanied by enough noise that it can make a Nascar race sound like a chamber concert. It takes money to burn, according to Melvin Eaton, who owns Marvelous Motors in Deer Isle and says in the film that he once sold 16 pairs of tires to one burner in two months.

The burners themselves do not spend a great deal of time in the movie discussing, say, the artistic merits of the so-called J-stroke, the curved mark that occurs when drivers shift from reverse to drive. But there are a few who are willing to lay a bit of meta-analysis on the practice of burning.

“It’s about asserting your masculinity and marking your territory,” Lily Lyons, a young island resident who has grown up watching the ritual, says in the film.

Ron Watson, owner of gWatson Gallery on Main Street in Stonington, says the burners are conscious of their own handiwork: “The first time I saw it, I thought there had been a bad accident. I don’t think that there are aesthetic reasons behind it, but they admire what they have done, like graffiti artists.”

Mr. Steed agreed. “Much like early graffiti, it says, ‘This is mine,’ ” he said. “The significance of the mark can sometimes be measured by the fact that no one else burns in that spot out of respect. Like a good tag, it will stay up for a while.”

There are also class dimensions to burning; one man’s folk art is another’s rend in the social fabric.

Those who come here for the peace and quiet of a Maine seaside town are sometimes jolted back to reality when a young lobsterman celebrates a day of good fortune on the water by spinning a doughnut or two on the pier, filling the air with smoke and racket.

“One of the reasons that the film seemed worth doing is that it asks whose town it is and how it is being used,” said Mr. Steed, sitting in a theater chair at the Opera House before screening a rough cut of the documentary. “There are not a lot of doctors doing it.”

In a town where thousands of moneyed interlopers come to take in the bustle of the Stonington harbor, the burners serve as a reminder that part of what sets the place apart is that it is a real harbor town, with more than 200 boats heading out in search of lobster every day.

“This is a working town,” Richard Avery, the town manager, says in the documentary. “Come and enjoy it and participate in it, but don’t turn it into a town where dirt and grit and noise and smell are banned.”

The village, which was dry until last year, is a long way from other diversions, so young people tend to make their own fun.

“These are working guys, and they are very proud of their trucks,” said Linda Nelson, executive director of the Opera House and one of four people who restored and revived it. “It’s like one of the guys says in the film, if you have a woman you love, you dress her up and take her out and, you know, show her off.”

Last week a 300-foot stretch of Route 15A, a few miles northwest of town, looked as if de Kooning had spent time there, only working with a truck instead of a paintbrush. One group of marks set up a wave that others embellished, and the effect, especially at night as the marks loom up out of the darkness, can be striking, with ribbons of black unwinding in a weave of black-on-black patterns.

Stonington’s twin identities — as an idyllic retreat for artists and vacationers, and as a hardscrabble coastal town — have had a working truce for decades. Usually the two inhabit separate worlds, but every once in a while they come together in the same frame, making something new. You can see this in a well-known painting of Stonington by Jon Imber.

The Opera House is the formal centerpiece of the canvas, dominating the huge hill that leads out of town. But there, plain as day on the road, is a set of wavy tire marks.

"X-Men" vs. "Superman": Fox Has Hit, Warners Has Singer
Anne Thompson

As summer nears its end, "X-Men: The Last Stand," which nabbed middling reviews, seems to have exceeded expectations with a $441 million worldwide gross, while "Superman Returns" -- though it earned a strong, positive ranking of 76 percent on RottenTomatoes.com -- has yet to break the $200 million mark domestically.

Although "Superman" is still playing overseas with a $347 million worldwide gross to date, it has failed to return on its lofty expectations. The drama behind Bryan Singer's departure from 20th Century Fox's "X-Men" franchise to direct "Superman" for Warner Bros. Pictures left much Sturm und Drang in its wake. But who were the real winners and losers on this deal?

Warners was delighted to poach Singer -- a proven tentpole director with a canny understanding of the action-adventure universe -- from Fox. He was available because Fox Filmed Entertainment co-chairman Tom Rothman had been playing a game of chicken with him on his "Last Stand" deal: Singer wanted to cash in on the final installment of the "X-Men" saga.

When Warners lured Singer away with the chance to direct "Superman" and a top-dollar deal -- sources say it was $10 million versus 7 percent of the gross -- Rothman was livid. He promptly shut down Singer's Bad Hat Harry Prods. office on the Fox lot -- though Singer returned the next day to the Fox set of his TV series "House."

High Emotions

"We were in a heightened emotional state of mind," Fox president Hutch Parker says. "We believed that Bryan was going to do 'X-Men 3,' and when he made a different choice, it was scary and daunting to be losing someone so essential to the expression of the franchise. We had to rethink how to approach this. There was a lot of anxiety for everybody."

Rather than wait for Singer, Fox made the decision to go full steam ahead. "We needed the movie," Parker says, "and it was critical that it get made in that window. We were wary about where the comic movie would be in the larger cycle."

Fox first proceeded with director Matthew Vaughn and then with Brett Ratner to meet the tentpole's original May 26 release date. But it cost the studio to make that target. (According to sources close to the movie, "Last Stand" cost about $168 million after tax rebates.)

Producer Lauren Shuler Donner shouldered the burden of wrestling the movie into submission; the studio rushed two pricey screenwriters, Zak Penn and Simon Kinberg, to complete their scripts; and the studio paid dearly to get elaborate visual effects from about six special-effects houses, including Weta Digital, finished in time. In the short term, the studio clearly won the summer 2006 battle with Warners. But where is the "X-Men" franchise going forward?

Singer was the creative force behind the "X-Men" franchise, and now he's gone. Ratner is not in the picture; the sense in Hollywood is that Fox scored with "Last Stand" despite the director, not because of him. With its "X-Men" actors now too expensive to reassemble, Fox is proceeding with development on two "X-Men" spinoffs, starring Hugh Jackman as Wolverine (David Benioff and David Ayer have written drafts) and Ian McKellen as Magneto.

The bloom is definitely off the "X-Men" rose. One could argue that in the long term, the studio would have been better off paying Singer to keep him or waiting to get him back. (Rothman and Singer eventually buried the hatchet over lunch.)

Spending Spree

Freed from Fox's tough budget controls ("X-Men' cost $80 million and "X-Men 2" $120 million), Singer was ecstatic to be moving to a studio like Warners, which was willing to let him spend. But at the July 2005 Comic-Con International in San Diego, perhaps in a heady state of jet lag from his long flight from the "Superman" set in Australia, Singer launched the film's marketing campaign on a spectacularly wrong foot, happily proclaiming that the movie he was shooting was the studio's most expensive ever and might cost $250 million. From that moment on, Warners marketing tried to manage that number.

In fact, Warners failed to get out from behind that disastrous budget. The Internet ran rampant with reports that the movie was in the $300 million range. When the studio admitted to writing off about $60 million in costs from all the previous iterations of "Superman," some reporters added that to the studio's official $209 million budget -- a figure no one ever believed.

If Warners had convinced Singer from the start to make a movie closer to two hours, it might have saved some money and come out ahead, instead of leaving entire $10 million sequences on the cutting-room floor.

"'Superman Returns' will be profitable for us," says Warner Bros. production president Jeff Robinov. "We would have liked it to have made more money, but it reintroduced the character in a great way and was a good launching pad for the next picture. We believe in Bryan and the franchise. Clearly, this was the most emotional and realistic superhero movie ever made."

Superman Returns Again?

But what really mattered to Warners was the successful relaunch of its franchise, and to that end they wanted to keep their director happy -- even if it meant letting him deliver a two-hour, 40-minute movie. "If Warners goes ahead with the 'Superman Returns' sequel," says producer Don Murphy ("From Hell"), "then they've ended up well because they've gone from having a wannabe franchise to a real franchise."

Returning to Comic-Con in July, Singer announced that he and Warners are in discussions about doing the sequel for 2009. But Singer said he "had certain issues" with Warners' marketing campaign. He also acknowledged his film's competition. "Superman," he says "had a little 'Pirates' and a little 'Prada.' It is a chick flick to some degree; it is a love story."

As challenging as it was for Singer to re-establish "Superman" by building on Richard Donner's 1978 classic, he also was working with a decidedly retro hero from a bygone time. There was little that Warners marketing could do to make Superman seem less square, wholesome and, finally, old-fashioned. (The "X-Men" and "Pirates of the Caribbean" franchises do seem younger, hipper and more dangerous.) Choosing to reprise Lex Luthor might have been a too-familiar choice as well.

Upping The Sci-Fi Factor

"Bryan kicked ass," journalist Cheo Hodari Coker says. "But the principal argument does hold: Does the world really need Superman? Clark is a big blue Boy Scout. I wonder if this generation really has any heroes. Everyone is pushing in some way to be unheroic."

But Singer does know where he has to go with the sequel. He told Comic-Can fans that he would add more "scary sci-fi in the next movie." "We can now go to into the action realm."

While some "Superman Returns" viewers objected to the addition of an illegitimate child of Lois Lane and Superman (which never appeared in any of the comic books), Singer intends to proceed with that story arc.

"There's a lot of room to go with that character and his upbringing and human background and Krypton heritage," he says. "He's the genetic material of both parents. Superman doesn't have that. It's hard to write for Superman. He's a tough character to create insurmountable obstacles for. This one is unique and insurmountable." For the sequel, Singer will be able to expand and play around with what he's introduced, and "bring in more of the energy" of the contemporary comics, he promised.

Singer likely will do another movie before the sequel to "Superman Returns," according to sources, possibly Warner Independent's "The Mayor of Castro Street" or a remake of "Logan's Run" at the parent studio. Finally, though, Warners president Alan Horn and production chief Robinov want this tentpole director to be making movies on their lot -- and not Fox's. And that may, in the long run, be the real payoff to their "Superman Returns" investment.

Oliver Stone’s ‘World Trade Center’ Opens at No. 3
David M. Halbfinger

Oliver Stone’s “World Trade Center,” the 9/11 rescue drama from Paramount starring Nicolas Cage, placed an underwhelming No. 3 at the box office over the weekend, but its $19 million gross far exceeded the opening weekend of last spring’s “United 93,” the first Hollywood movie to tackle the events of Sept. 11, 2001.

“Everyone was wondering what the effect of the Heathrow incident would have on the grosses,” said Paul Dergarabedian, president of Exhibitor Relations Company, which tracks box-office results. “I think it may have helped, by making the movie that more relevant.”

“Talladega Nights: The Ballad of Ricky Bobby,” the Columbia Pictures comedy starring Will Ferrell as a Nascar racer, held on as the nation’s most popular movie through its second weekend, grossing $23 million, while the teenage dance romance “Step Up,” from Buena Vista Pictures, opened to $21.1 million.

Paramount executives said they had positioned “World Trade Center,” which opened on Wednesday, to benefit from strong word of mouth and a paucity of serious movies on the late-summer release schedule.

“Next week you have ‘Snakes on a Plane,’ which has a very targeted, specific audience, and other than that, you don’t have anything else vying for the attention of adults,” said Rob Moore, president for worldwide marketing, distribution and home entertainment at Paramount. “This is a very different, unique movie — the issues it deals with, how emotional it is — and when you play to an older audience, you really do have the luxury of time. I’d never tell you that with ‘Nacho Libre’ we had the luxury of time. That is why we picked the August release date, and why we picked the Wednesday opening.”

The $19 million total was Mr. Stone’s best three-day opening weekend, according to Exhibitor Relations. For the five-day period “World Trade Center” took in $26.8 million. By comparison, “United 93,” from Universal, which opened on April 28, took in $11.5 million on its opening weekend and grossed only $31.5 million domestically.

In New York, where Paramount treaded gingerly in marketing the film for obvious reasons, “World Trade Center” performed particularly well, Mr. Moore said: grosses from the New York metropolitan area exceeded the Los Angeles box office by 10 percent. By contrast, he said, Disney’s “Pirates of the Caribbean: Dead Man’s Chest” took in 52 percent more in Los Angeles than New York on its opening weekend, and “Talladega Nights” took in 40 percent more in Los Angeles.

“Everything that we hoped about the movie has started to happen, and now it’s about ‘Can you still in this day and age have a movie that can be propelled by word of mouth?’ ” Mr. Moore said. “You take the movie Oliver made, the initial turnout, the response of the audience and critics, and all of that feels, to us, that we should be able to play and not have a movie that falls 65 percent from Week 1 to 2 and then does all of its business in two weekends. This to us was always a movie that should have exceptional hold. We think it should play for a very long time.”

Mass Murder In The Skies: Was The Plot Feasible?
Thomas C Greene

Analysis The seventh angel poured out his bowl into the air;
And a loud voice came forth out of the temple of Heaven,
From the throne, saying, "It is done!"
--Revelation 16:17

Binary liquid explosives are a sexy staple of Hollywood thrillers. It would be tedious to enumerate the movie terrorists who've employed relatively harmless liquids that, when mixed, immediately rain destruction upon an innocent populace, like the seven angels of God's wrath pouring out their bowls full of pestilence and pain.

The funny thing about these movies is, we never learn just which two chemicals can be handled safely when separate, yet instantly blow us all to kingdom come when combined. Nevertheless, we maintain a great eagerness to believe in these substances, chiefly because action movies wouldn't be as much fun if we didn't.

Now we have news of the recent, supposedly real-world, terrorist plot to destroy commercial airplanes by smuggling onboard the benign precursors to a deadly explosive, and mixing up a batch of liquid death in the lavatories. So, The Register has got to ask, were these guys for real, or have they, and the counterterrorist officials supposedly protecting us, been watching too many action movies?

We're told that the suspects were planning to use TATP, or triacetone triperoxide, a high explosive that supposedly can be made from common household chemicals unlikely to be caught by airport screeners. A little hair dye, drain cleaner, and paint thinner - all easily concealed in drinks bottles - and the forces of evil have effectively smuggled a deadly bomb onboard your plane.

Or at least that's what we're hearing, and loudly, through the mainstream media and its legions of so-called "terrorism experts." But what do these experts know about chemistry? Less than they know about lobbying for Homeland Security pork, which is what most of them do for a living. But they've seen the same movies that you and I have seen, and so the myth of binary liquid explosives dies hard.

Better killing through chemistry

Making a quantity of TATP sufficient to bring down an airplane is not quite as simple as ducking into the toilet and mixing two harmless liquids together.

First, you've got to get adequately concentrated hydrogen peroxide. This is hard to come by, so a large quantity of the three per cent solution sold in pharmacies might have to be concentrated by boiling off the water. Only this is risky, and can lead to mission failure by means of burning down your makeshift lab before a single infidel has been harmed.

But let's assume that you can obtain it in the required concentration, or cook it from a dilute solution without ruining your operation. Fine. The remaining ingredients, acetone and sulfuric acid, are far easier to obtain, and we can assume that you've got them on hand.

Now for the fun part. Take your hydrogen peroxide, acetone, and sulfuric acid, measure them very carefully, and put them into drinks bottles for convenient smuggling onto a plane. It's all right to mix the peroxide and acetone in one container, so long as it remains cool. Don't forget to bring several frozen gel-packs (preferably in a Styrofoam chiller deceptively marked "perishable foods"), a thermometer, a large beaker, a stirring rod, and a medicine dropper. You're going to need them.

It's best to fly first class and order Champagne. The bucket full of ice water, which the airline ought to supply, might possibly be adequate - especially if you have those cold gel-packs handy to supplement the ice, and the Styrofoam chiller handy for insulation - to get you through the cookery without starting a fire in the lavvie.

Easy does it

Once the plane is over the ocean, very discreetly bring all of your gear into the toilet. You might need to make several trips to avoid drawing attention. Once your kit is in place, put a beaker containing the peroxide / acetone mixture into the ice water bath (Champagne bucket), and start adding the acid, drop by drop, while stirring constantly. Watch the reaction temperature carefully. The mixture will heat, and if it gets too hot, you'll end up with a weak explosive. In fact, if it gets really hot, you'll get a premature explosion possibly sufficient to kill you, but probably no one else.

After a few hours - assuming, by some miracle, that the fumes haven't overcome you or alerted passengers or the flight crew to your activities - you'll have a quantity of TATP with which to carry out your mission. Now all you need to do is dry it for an hour or two.

The genius of this scheme is that TATP is relatively easy to detonate. But you must make enough of it to crash the plane, and you must make it with care to assure potency. One needs quality stuff to commit "mass murder on an unimaginable scale," as Deputy Police Commissioner Paul Stephenson put it. While it's true that a slapdash concoction will explode, it's unlikely to do more than blow out a few windows. At best, an infidel or two might be killed by the blast, and one or two others by flying debris as the cabin suddenly depressurizes, but that's about all you're likely to manage under the most favorable conditions possible.

We believe this because a peer-reviewed 2004 study (http://www.technion.ac.il/~keinanj/pub/122.pdf) in the Journal of the American Chemical Society (JACS) entitled "Decomposition of Triacetone Triperoxide is an Entropic Explosion" tells us that the explosive force of TATP comes from the sudden decomposition of a solid into gasses. There's no rapid oxidizing of fuel, as there is with many other explosives: rather, the substance changes state suddenly through an entropic process, and quickly releases a respectable amount of energy when it does. (Thus the lack of ingredients typically associated with explosives makes TATP, a white crystalline powder resembling sugar, difficult to detect with conventional bomb sniffing gear.)

Mrs. Satan

By now you'll be asking why these jihadist wannabes didn't conspire simply to bring TATP onto planes, colored with a bit of vegetable dye, and disguised as, say, a powdered fruit-flavored drink. The reason is that they would be afraid of failing: TATP is notoriously sensitive and unstable. Mainstream journalists like to tell us that terrorists like to call it "the mother of Satan." (Whether this reputation is deserved, or is a consequence of homebrewing by unqualified hacks, remains open to debate.)

It's been claimed that the 7/7 bombers used it, but this has not been positively confirmed. Some sources claim that they used C-4, and others that they used RDX. Nevertheless, the belief that they used TATP has stuck with the media, although going about in a crowded city at rush hour with an unstable homebrew explosive in a backpack is not the brightest of all possible moves. It's surprising that none of the attackers enjoyed an unscheduled launch into Paradise.

So, assuming that the homebrew variety of TATP is highly sensitive and unstable - or at least that our inept jihadists would believe that - to avoid getting blown up in the taxi on the way to the airport, one might, if one were educated in terror tactics primarily by hollywood movies, prefer simply to dump the precursors into an airplane toilet bowl and let the mother of Satan work her magic. Indeed, the mixture will heat rapidly as TATP begins to form, and it will soon explode. But this won't happen with much force, because little TATP will have formed by the time the explosion occurs.

We asked University of Rhode Island Chemistry Professor Jimmie C. Oxley, who has actual, practical experience with TATP, if this is a reasonable assumption, and she tolds us that merely dumping the precursors together would create "a violent reaction," but not a detonation.

To release the energy needed to bring down a plane (far more difficult to do than many imagine, as Aloha Airlines Flight 243 (http://en.wikipedia.org/wiki/Aloha_Flight_243) neatly illustrates), it's necessary to synthesize a good amount of TATP with care.
Jack Bauer sense

So the fabled binary liquid explosive - that is, the sudden mixing of hydrogen peroxide and acetone with sulfuric acid to create a plane-killing explosion, is out of the question. Meanwhile, making TATP ahead of time carries a risk that the mission will fail due to premature detonation, although it is the only plausible approach.

Certainly, if we can imagine a group of jihadists smuggling the necessary chemicals and equipment on board, and cooking up TATP in the lavatory, then we've passed from the realm of action blockbusters to that of situation comedy.

It should be small comfort that the security establishments of the UK and the USA - and the "terrorism experts" who inform them and wheedle billions of dollars out of them for bomb puffers and face recognition gizmos and remote gait analyzers and similar hi-tech phrenology gear - have bought the Hollywood binary liquid explosive myth, and have even acted upon it.

We've given extraordinary credit to a collection of jihadist wannabes with an exceptionally poor grasp of the mechanics of attacking a plane, whose only hope of success would have been a pure accident. They would have had to succeed in spite of their own ignorance and incompetence, and in spite of being under police surveillance for a year.

But the Hollywood myth of binary liquid explosives now moves governments and drives public policy. We have reacted to a movie plot. Liquids are now banned in aircraft cabins (while crystalline white powders would be banned instead, if anyone in charge were serious about security). Nearly everything must now go into the hold, where adequate amounts of explosives can easily be detonated from the cabin with cell phones, which are generally not banned.

Action heroes

The al-Qaeda franchise will pour forth its bowl of pestilence and death. We know this because we've watched it countless times on TV and in the movies, just as our officials have done. Based on their behavior, it's reasonable to suspect that everything John Reid and Michael Chertoff know about counterterrorism, they learned watching the likes of Bruce Willis, Jean-Claude Van Damme, Vin Diesel, and The Rock (whose palpable homoerotic appeal it would be discourteous to emphasize).

It's a pity that our security rests in the hands of government officials who understand as little about terrorism as the Florida clowns who needed their informant to suggest attack scenarios, as the 21/7 London bombers who injured no one, as lunatic "shoe bomber" Richard Reid, as the Forest Gate nerve gas attackers who had no nerve gas, as the British nitwits who tried to acquire "red mercury," and as the recent binary liquid bomb attackers who had no binary liquid bombs.

For some real terror, picture twenty guys who understand op-sec, who are patient, realistic, clever, and willing to die, and who know what can be accomplished with a modest stash of dimethylmercury.

You won't hear about those fellows until it's too late. Our official protectors and deciders trumpet the fools they catch because they haven't got a handle on the people we should really be afraid of. They make policy based on foibles and follies, and Hollywood plots.

Meanwhile, the real thing draws ever closer.


Faces, Too, Are Searched at U.S. Airports
Eric Lipton

As the man approached the airport security checkpoint here on Wednesday, he kept picking up and putting down his backpack, touching his fingers to his chin, rubbing some object in his hands and finally reaching for his pack of cigarettes, even though smoking was not allowed.

Two Transportation Security Administration officers stood nearby, nearly motionless and silent, gazing straight at him. Then, with a nod, they moved in, chatting briefly with the man, and then swiftly pulled him aside for an intense search.

Another airline passenger had just made the acquaintance of the transportation agency’s “behavior detection officers.”

Taking a page from Israeli airport security, the transportation agency has been experimenting with this new squad, whose members do not look for bombs, guns or knives. Instead, the assignment is to find anyone with evil intent.

So far, these specially trained officers are working in only about a dozen airports nationwide, including Dulles International Airport here outside Washington, and they represent just a tiny percentage of the transportation agency’s 43,000 screeners.

But after the reported liquid bomb plot in Britain, agency officials say they want to have hundreds of behavior detection officers trained by the end of next year and deployed at most of the nation’s biggest airports.

“The observation of human behavior is probably the hardest thing to defeat,” said Waverly Cousin, a former police officer and checkpoint screener who is now the supervisor of the behavior detection unit at Dulles. “You just don’t know what I am going to see.”

Even in its infancy, the program has elicited some protests.

At one airport, passengers singled out solely because of their behavior have at times been threatened with detention if they did not cooperate, raising constitutional issues that are already being argued in court. Some civil liberties experts said that the program, if not run properly, could turn into another version of racial profiling.

Other concerns were raised this week by two of the foremost proponents of the techniques, a former Israeli security official and a behavioral psychologist who developed the system of observing involuntarily muscular reactions to gauge a person’s state of mind.

They said in interviews that the agency’s approach puts too little emphasis on the follow-up interview and relies on a behavior-scoring system that is not necessarily applicable to airports.

“It may be the best that can be done now, but it is not nearly good enough,” said Paul Ekman, a retired psychology professor from the University of California, San Francisco, who specializes in detecting lies and deceit, and has helped the T.S.A. set up its program. “We could do much better, and we should because it could save lives.”

Agency officials said they recognize that the program, which they call Screening Passengers by Observation Technique, or SPOT, may not yet be perfect. But they added that they were constantly making adjustments and that they were convinced that it was a valuable addition to their security tool chest.

“There are infinite ways to find things to use as a weapon and infinite ways to hide them,” said the director of the T.S.A., Kip Hawley, in an interview this week. “But if you can identify the individual, it is by far the better way to find the threat.”

The American version of the airport behavior observation program got its start in Boston, said Thomas G. Robbins, former commander of the Logan International Airport police.

After the Sept. 11 attacks in 2001, he said, state police officers there wondered whether a technique they had long used to try to identify drug couriers at the airport might also work for terrorists. The officers observed travelers’ facial expressions, body and eye movements, changes in vocal pitch and other indicators of stress or disorientation. If the officers’ suspicions were aroused, they began a casual conversation with the person, asking questions like “What did you see in Boston?” followed perhaps by “Oh, you’ve been sightseeing. What did you like best?”

The questions themselves are not significant, Mr. Robbins said. It is the way the person answers, particularly whether the person shows any sign of trying to conceal the truth.

The Transportation Security Administration, starting last December, decided to try out the approach at about a dozen airports, including Logan. At each airport, it used six officers who had once been routine screeners, had received an extra four days of classroom training in observation and questioning techniques, and had three days of field practice.

T.S.A. officers do not have law enforcement powers, so if they observe someone suspicious, they can chat with the person but cannot conduct a more formal interrogation. That leaves them with the option of requiring the passenger to go through a more intense checkpoint search, as they did with the man at Dulles on Wednesday. Or if the suspicion is serious enough, they call the local police assigned to the airport to take over the inquiry.

In nine months — a period in which about seven million people have flown out of Dulles — several hundred people have been referred for intense screening, and about 50 have been turned over to the police for follow-up questioning, said John F. Lenihan, the transportation agency’s security director at Dulles.

Of those, half a dozen have faced charges or other law enforcement follow-up, he said, because the behavior detection officials succeeded in picking out people who had a reason to be nervous, generally because of immigration matters, outstanding warrants or forged documents.

“It is an extra layer of security that is on top of what we have,” Mr. Hawley said of the program.

But Rafi Ron, the former director of security at Ben-Gurion International Airport in Tel Aviv, who was a consultant who helped train the officers at Logan Airport, said that the agency’s system, while a welcome improvement to airport security, was still flawed. Most importantly, he said, too few of the passengers pulled aside were more formally questioned as in the Israeli system, and when questioning was done, it was handled by local police officers who might not have had the necessary behavioral analysis skills.

He cited the case of Richard Reid, known as the shoe bomber, who aroused suspicion when he arrived at Charles de Gaulle International Airport outside Paris, but was ultimately allowed to board after the police had questioned him.

“If you don’t do the interviews properly, you are missing what is probably the most important and powerful part of the procedure,” he said.

Another concern was raised by Mr. Ekman, who developed some of the facial analysis tools that the T.S.A. screeners were being trained to use — for example, fear is manifested by eyebrows raised and drawn together, a raised upper eyelid and lips drawn back toward the ears. He said the point system that the T.S.A. had set up was based on facial reactions that occurred in sit-down interviews, not while people were standing in line at the airport.

“We have no basis other than the seat of our pants to know how many points should be given to any one thing,” he said.

The technique has already produced at least one lawsuit, filed in Boston. The state police at Logan Airport there happened to pick out, based on behavior observations, the national coordinator of the American Civil Liberties Union’s Campaign Against Racial Profiling.

The coordinator, King Downing, who is black, had just left a flight when he stopped to make a phone call and noticed that a police officer was listening in, the lawsuit says. When the call ended, the officer demanded Mr. Downing’s identification, asking again as he approached a taxi and then telling him he would be “going downtown” unless he provided it. Mr. Downing was let go after he showed his identification, but the encounter led to the lawsuit.

“There is a significant prospect this security method is going to be applied in a discriminatory manner,” said John Reinstein, an A.C.L.U. lawyer handling Mr. Downing’s case. “It introduces into the screening system a number of highly subjective elements left to the discretion of the individual officer.”

T.S.A. officials, who were not involved in the incident with Mr. Downing, said they recognized that people at airports were often agitated — they may be late for flights, taking an emergency trip or simply scared of flying.

They said they were committed to ensuring the program was not discriminatory and would be monitoring the work of the SPOT teams to ensure that the officers were acting upon the established indicators and not any racial or ethnic bias.

But they acknowledged that some entirely innocent parties, like the man at Dulles on Wednesday, would probably be pulled aside. That passenger, whom officials would not identify, was allowed to catch his flight after a thorough search.

“It is like throwing a big fishing net over the side of the boat: You catch what you catch,” said Carl Maccario, an agency official helping manage the SPOT teams. “But hopefully within that net is a terrorist.”

Plot Shows Need for More Passenger Data, Officials Say
Eric Lipton and Scott Shane

As British citizens, the 24 terror suspects arrested in England last week could have boarded planes bound for the United States without undergoing an American government background check or obtaining a visa, part of what federal officials say is a broader security gap that they are now trying to close.

Britain is among 27 countries whose citizens are not required to obtain visas before traveling to the United States, meaning that the American authorities do not have an opportunity to screen them in advance. Given this gap, the Department of Homeland Security has tried but failed to win broad approval for rules that would require airlines to share passenger information before flights depart for the United States.

Instead, under current rules, passenger data is sent in the first 15 minutes after a flight takes off. That system lets American authorities turn a flight away if a suspected terrorist is determined to be on board, but does not provide any margin of safety in the case of attempts to blow up a plane while in flight, as was alleged to have been the suspects’ plan in the trans-Atlantic plot.

Since Thursday, the day the plot was disclosed, Homeland Security officials have required that passenger data be provided before planes leave Britain for the United States, part of a widening of temporary security measures.

But because of airline concerns about flight delays and the difficulties of squaring the access to information with European privacy laws, the department’s efforts to permanently require advance information on all passengers of international flights are unresolved, industry and government officials said.

“It’s absolutely essential for aviation security for the U.S. government to have that information and match it against our watch lists in advance of departure,” said Jay Ahern, chief of field operations at Customs and Border Protection. Mr. Ahern said the department hoped new rules could take effect late this year or early next year. He said the rules proposed by the department would require information to be turned over an hour before takeoff, though information on anyone checking in late could be provided as little as 15 minutes before the flight.

About 87 million visitors to the United States each year arrive by air, according to government statistics. Travelers from most of the world must obtain visas before trying to enter the United States, requiring that they complete an application, provide a photograph and fingerprints, and submit to an interview.

But since 1988, the visa waiver program that now applies to citizens of Britain and 26 other countries, most of them in Europe, has left open what some members of Congress and counterterrorism experts now describe as an important vulnerability in American defenses, because so many suspected terrorists in recent years have been European Muslims.

In the plot last week, officials said, most of those arrested were British-born citizens of Pakistani descent and most, though not all, had obtained passports for foreign travel. They would have been prevented from traveling only because they were already under surveillance by British authorities.

Proposals after the Sept. 11 attacks to require visas for all foreign visitors were abandoned out of concerns that the demand would create an overwhelming bureaucratic workload, interfere with trade and tourism, and prompt Britain and other countries to impose the same requirement on Americans. Proposals pending in Congress would add Poland, South Korea and other countries to the waiver list.

Despite more than two years of negotiations, the department has been unable to reach an agreement with airlines to assure the delivery of passenger data before takeoff for all flights to the United States.

In an interview on Sunday, Michael Chertoff, the secretary of homeland security, said the vulnerabilities had existed too long. He said he hoped the British plot might persuade the airlines and European authorities to drop objections to his department’s proposal.

“I sure hope this is a great wake-up call,” Mr. Chertoff said.

Robert S. Leikin, who studies the security issues at the Nixon Center in Washington, said many suspected terrorists arrested in recent years were the children of Muslim immigrants to Europe. Their citizenship in nations with visa waivers makes improving the checks on air travelers critical, he said.

Government officials he has consulted on the threat “are pretty relaxed now about people coming from the Middle East because of the visa screening process,” Mr. Leikin said. “What they’re really concerned about is Europe.”

In the aftermath of the Sept. 11 attacks, federal officials proposed that airlines turn over data for passengers taking international flights to the United States an hour before takeoff, so they could compare the names, dates of birth and passport numbers to a “no fly” watch list.

Airlines are required to check the list on their own as passengers arrive at the airport. But the data they have is less complete and current than what is available to the federal government.

The airlines objected to the one-hour rule, saying it would force delays because passengers are often added to the manifest within minutes of departure, particularly if they are transferring from another flight. The requirement, the airlines complained, could force them to leave planes sitting on the ground for an hour, or to turn away passengers with tight connections. So final action on the rule was delayed.

Separately, United States officials asked for access to a much more comprehensive collection of passenger data than the airlines maintain. This database includes credit-card numbers, itineraries, who paid for a ticket and names of parties who are traveling together. Authorities using this data, for example, could demand that someone traveling with a person on the no-fly list also be removed from the flight.

But European officials, citing privacy laws, have objected to sharing the data with American authorities, placing restrictions on how it can be used, such as prohibiting reviews of who else has used the same credit card to buy a ticket. After the European Union’s highest court ruled in May that sharing that data was illegal, it ordered such sharing entirely cut off by October unless European and American authorities reach a new accord on its use.

U.K. police: Let Us Seize Encryption Keys
Graeme Wearden

Because British law enforcement officers don't have the authority to seize encryption keys, an increasing number of criminals are able to evade justice, a senior police officer said.

Suspected terrorists, pedophiles and burglars have all walked free because encrypted data couldn't be opened, Detective Chief Inspector Matt Sarti of the Metropolitan Police said Monday during a public meeting in London.

"There are more than 200 PCs sitting in property cupboards which contain encrypted data, for which we have considerable evidence that they contain data that relates to a serious crime," Sarti said. "Not one of those suspects has claimed that the files are business-related, and in many cases, the names of the files indicate that they are important to our investigations."

Earlier this summer, the British government announced that it plans to activate Part 3 of the Regulations of Investigatory Powers (RIP) Act, which will give the police the power, in some circumstances, to demand an encryption key from a suspect.

Part 3 of the RIP Act has been heavily criticized in the past by some security professionals and academics who believe that it is a dangerous and badly written piece of legislation that cannot be properly implemented.

Sarti was speaking at an open meeting to discuss the Home Office consultation about the draft code of practice for Part 3 of the RIP Act, which will govern how its powers can be used.

The meeting was organized by the Foundation for Information Policy Research.

Casper Bowden, a former director of the FIPR who led the fight against the introduction of the RIP Act several years ago, said during the meeting that Part 3 is flawed because defendants could be prosecuted for simply losing an encryption key.

"The burden of proof is on the suspect to prove that they don't have the key, and if they fail, they go to prison. But if they can give an explanation for not having the key, then the prosecution must prove beyond reasonable doubt that they are lying," Bowden said.

Bowden explained that in circumstances when the police suspected someone had encrypted incriminating data, officers could issue an order under Section 49 of the act, ordering the suspect to hand over the key. Failure to do so could lead to a prosecution under Section 53 of the Act.

Richard Clayton, an FIPR trustee and a computer security researcher at the University of Cambridge, said the code of practice also lacks clear powers against officials who were guilty of making "deliberate mistakes" in their use of the RIP Act to obtain private data. Clayton also argued that businesses may take their encryption keys out of U.K. jurisdiction so that they can't be seized.

But Simon Watkin of the Home Office, who drafted the code of practice, insisted that the time is right to activate Part 3 of the Act as the police are finding that their investigations are being thwarted by encryption.

"The police have come to us and said that they need powers to get hold of encrypted data off suspects," Watkin said. "We've got a law like this on the statute book, and we've been waiting for people like them to come and give us compelling reasons why they need it."

One police officer in the audience argued that in the case of alleged child abuse, it was vital to access all the files on a suspect's machine so that the victims could be identified.

But Duncan Campbell, an investigative journalist who has served as an expert witness in many computer-related trials, insisted that Part 3 of the RIP Act could not be justified.

"A person who rapes and damages a 12-year-old is going to get a bloody long sentence, and bloody good, too. What's the point in the police saying, 'We need a monstrous law so we can get to the rest of the data'?" Campbell asked.

The consultation on the draft code of practice will run until Aug. 31, and Watkin indicated that submissions received after that date will still be considered. You can see the code of practice on the Home Office Web site.

Graeme Wearden of ZDNet UK reported from London.

What's The Greatest Software Ever Written?

Witness the definitive, irrefutable, immutable ranking of the most brilliant software programs ever hacked.
Charles Babcock

Most red-blooded technologists will offer a quick opinion on what's the greatest software ever, but when you take the time to evaluate what makes software truly brilliant, the choices aren't so obvious.

One of the most significant pieces of programming I know wasn't even software. Before the British built the Colossus machine, which translated German teletype code during World War II, it took the Allies up to six hours to decode a message and a day or more to pore over intelligence, draw conclusions, and pass along information to military command. After Colossus, the Allies gained a picture of German military activity across the English Channel as the day unfolded--intelligence that gave Gen. Dwight Eisenhower the confidence to launch the D-Day invasion.

Colossus was built in 1944 to perform Boolean operations on a paper data tape that streamed through the machine at 30 miles an hour. Its logic was literally wired into the machine. It is, perhaps, the greatest software that never got written.

So where does that leave us? First, let's set criteria for what makes software great. Superior programming can be judged only within its historical context. It must represent a breakthrough, technical brilliance, something difficult that hadn't been done before. And it must be adopted in the real world. Colossus transformed a drawn-out mechanical process into electronics--it was an early computer--and provided a useful service by accelerating coded teletype translation. Colossus shaped history.

Another example of great programming was IBM's 360 system. The software was written as the first general-purpose computer operating system in 1964. Many of the truths we assume today about software--that simple designs are better than complicated ones, that a few skilled programmers will accomplish more than platoons of them--are captured in Frederick Brooks' book on the project, The Mythical Man-Month (Addison-Wesley Professional, 1995). Brooks already knew how many things could go wrong with big software projects before the 360 project began. In fact, he was a critic within IBM of carrying out the project at all; he thought it had too many potential points of failure. That's why IBM put him in charge of it, I suppose.

Wise that they did. The result was the first computer system capable of running different applications at the same time. It spawned the IBM line of mainframes, which evolved into the 370 Series and present zSeries. To this day, those systems remain backwardly compatible with Brooks' 360 operating system. Which leads me to another attribute of great software: It's got legs. It isn't easily superseded.

We Know Great

Everybody agrees the IBM 360 was one of the greatest pieces of software ever written. Greatness is easier to assess given a long historical perspective. The closer you get to the present, however, the harder it is to name the greatest software.

Well, damn the torpedoes. With great insight, I've assembled this, my list of the greatest software ever written, from Colossus to the present. I've consulted software
guru James Rumbaugh; Stuart Feldman, president of the Association of Computing Machinery; venture capitalists Ann Winblad and Gary Morgenthaler; Web site scripting software (PHP 3.0) authors Zeev Suraski and Andi Gutmans; and my little brother, Wally. The list remains my own, however. Those who find it full of wise and inspired choices can E-mail me at the address at the end of this story. For those who find it misguided, distasteful, or willfully ignorant, send your message to Wally, a 6-foot-3-inch former basketball star who still packs a wallop.

I've always been amazed at the Apollo spacecraft guidance system, built by the MIT Instrumentation Lab. In 1969, this software got Apollo 11 to the moon, detached the lunar module, landed it on the moon's surface, and brought three astronauts home. It had to function on the tiny amount of memory available in the onboard Raytheon computer--it carried 8 Kbytes, not enough for a printer driver these days. And there wouldn't be time to reboot in case of system failure when the craft made re-entry. It's just as well Windows wasn't available for the job.

The Apollo guidance system probably seems like routine software to technology sophisticates. Far more complex navigational systems are in operation today. The system's essentials were a few well-known algorithms based on proven logic. But to me, it's still rocket science. Great software dazzles us by virtue of what it does correctly in the face of everything that could go wrong.

IBM 360 had staying power

To those unimpressed by the relative simplicity of the Apollo space system, I ask this: Would you rather place your life in the hands of a more complex system for moving things? Take, for example, the BAE Automated Systems software that was supposed to handle baggage at the Denver International Airport. On its October 1993 launch date, it lost or misdirected so much luggage, or delivered so much of it into the jaws of the conveyor, that the city had to delay opening the airport for 16 months. The cost overrun for the city: $1.1 million per day.

For that matter, our lives already are in the hands of such software. The Federal Aviation Administration spent hundreds of millions of dollars, not once, but three times, trying to build an effective air traffic control system. It has thrown out about half of what it has created, technology valued at $144 million, while the other half periodically hiccups and stalls. Great software? I'll stick with the Apollo guidance system. For software to be considered a success, it has to be up to handling the job it was created to do.

That axiom certainly applies to VisiCalc, the first spreadsheet software. It's great because it demonstrated the power of personal computing. The software put the ability to analyze and manipulate huge amounts of data into the hands of every business. But VisiCalc itself, despite representing a breakthrough concept, wasn't great software. It was flawed and clunky, and couldn't do many things users wanted it to do. The great implementation of the spreadsheet was not VisiCalc or even Lotus 1-2-3 but Microsoft Excel, which extended the spreadsheet's power and gave businesspeople a variety of calculating tools. Microsoft's claims that it makes great software are open to dispute, but the Excel spreadsheet is here to stay. Nearly everyone is touched by it.

Search for Intelligence

There ought to be many examples of great software in the field of artificial intelligence. At one time, AI was going to produce a humanlike intelligence that could talk back to us, teach us things we didn't understand, and combine great reasoning power with command of endless data. What was the outcome for AI? Too much artifice, not enough intelligence.

Neural nets, which arose from AI research, produced automated fingerprint identification systems used worldwide. That's good pattern-matching, but is it actual intelligence? I don't see the logic.

Colossus: The greatest software never written

The AI application that produced the first real breakthrough was the inference engine, a system with a knowledge base of conditions and rules. Such a computer can match a condition, such as a 104-degree fever in a patient, to a rule, such as the fact that bacterial infections cause high fevers. One of the best, the Mycin medical diagnosis system, could correctly identify bacterial infections in people based on their symptoms 65% of the time. That's better than most nonspecialized physicians. But it never moved out of the lab into popular use. No one knew who to sue when it was wrong.

My favorite AI package was IBM's Deep Blue program, which defeated chess Grand Champion Garry Kasparov in a six-game match. Kasparov complained that Deep Blue had humans helping it behind the scenes, and he was right. IBM programmers were furiously revising Deep Blue between games to adjust it to Kasparov's playing style. That knocks Deep Blue off my list of candidates for great software. The IBM activity was within the rules but shouldn't have been. How was Kasparov supposed to compete? Rejigger his brain circuits?

AI software can be impressive, but all my examples fall short of being among the greatest.

I sometimes describe the browser as an emotionally handicapped dumb terminal. My brother, Wally, a research librarian, has convinced me that Mosaic, as the first graphical browser, "moved the Web out of the land of the tech weenies and into the world of ordinary humans." One predecessor, Gopher, is an example of a near miss, and then there was ViolaWWW, the first browser with buttons for moving backward and forward through Web pages.

But Mosaic's combination of address lines, mouse-based pointing and clicking, multimedia file displays, and hyperlinking in its window meant clients had finally found a perfect partnership with the information servers proliferating on the Internet. Mosaic combined elements for ease of use--the tool bar at the top and a set of pull-down menus--in a format that would be repeated in Netscape Navigator, Internet Explorer, and Firefox (in your Explorer window, select Help on the menu bar, click on About Internet Explorer, and a credit to Mosaic comes up). Technical brilliance? Not exactly, but a sorely needed, fresh technical synthesis. In other words, great software that opened the floodgates.

Can the same be said of the World Wide Web itself? Tim Berners-Lee produced a synthesis of hypertext linking, universal resource locator, and HTML page display that impacted our world, well, hugely. But the Web copied existing ideas, which are all dependent on the underlying TCP/IP network protocols and BIND (Berkeley Internet Domain) domain name servers--the close-to-the-metal software that makes routers work. Nope, the Web isn't great software. But it sure pushes the needle off the scale when it comes to popular impact.

User's Delight

Continuing into modern times, Google, in one aspect at least, represents great software. Search predated Google in the form of Lycos, Digital Equipment's AltaVista, and other engines. But Google incorporated a page-ranking structure into search results, assigning thousands of pages returned by the search engine a hierarchy reflecting their frequency of use. "The value of an academic paper is measured by the number of times it's mentioned in other papers and footnotes. Google adapted that convention to the Web," says Morgenthaler of Morgenthaler Ventures. It also moved a valuable information-structuring tool into the hands of millions of new users. That's great software.

I once thought of Sun's Java as a derivative language, a member of the C family that refined conventions already in existence. Upon reflection, I now know I was wrong. Java implemented the virtual machine on clients, allowing code to move over networks and run at a destination PC without knowing much about the machine itself. Java instituted the use of intermediate byte code, a form of source code that's been precompiled, which allows its translation to machine code just as it reaches the client. That equates to portability and performance. Java restricted the downloaded code to a sandbox, or set of boundaries--the client's hard drive, for example, was strictly off limits. The sandbox saved users from security exposures they had experienced with unrestricted Microsoft Active X controls.

With these network-oriented features, Java swept into the business world at the dawn of the Internet era. Microsoft copied all of Java's best ideas when it made Visual Studio .Net. For Java to be first bitterly opposed, then embraced and extended, now that's a sure sign of greatness.

What about software that's a little more user-focused, like desktop publishing? Desktop publishing was made possible by Adobe Systems' PostScript, which could digitally format type and images either at a computer or inside a laser printer. Adobe had simplified the professional typesetting system that came out of Xerox's Silicon Valley research facility, Xerox Palo Alto Research Center, achieving the right blend of simplicity and clean operation in PostScript. It made desktop publishing commonplace. Nicely done, but not enough of a technical breakthrough to be called great software.

Speaking of Xerox Parc, the Apple Macintosh was based on the Alto system built there. Alto included the first windowing interface, the first mouse, and first unified graphical user interface. But it never made it to market. It took an Apple redesign to give it impact. I can still remember the first time I sat down at a Macintosh at a hole-in-the-wall computer shop in Endicott, N.Y. I got that "rocket science" feeling: I could see what it was doing, but I couldn't believe it. The Mac incorporated the power of object-oriented computing into the user interface, and users have never looked back. The first Mac operating system was great software.

As The Worm Turns

Technology that infiltrates our daily lives and changes us qualifies as great. My next candidate meets that criterion, even if it's a loathsome piece of software. In 1988, the Morris worm raced around the Internet, infiltrating university servers and closing offices. Cornell student Robert Morris now says he made the worm so he could gauge the size of the Internet. Right.

Like most software, the worm theoretically could run in only one or two targeted environments, but it ended up illustrating something new about the Net. The worm could spread itself from server to server by exploiting a buffer overflow vulnerability in Sendmail. We didn't realize at the time how many back doors and defensive gaps lingered in Unix, Sendmail, Finger, and other systems. The worm also continuously queried servers and, in random cases, replicated itself. Morris said he added that feature to guarantee that his worm would spread. He succeeded.

As a piece of software, this intruder was a breakthrough, an eye-opening demonstration of what brilliant software might do on the anti-social side of the Internet. We were all starting to become interconnected; we all needed a wake-up call. Congratulations, Mr. Morris. The Great Worm proved an incontrovertible alarm and accurate forecaster. It was great software.

Was Sabre a winner because of science or bias--or both?

American Airlines' Sabre system was great, showing how software could evolve beyond the tactical needs of business and into the strategic. Sabre had the ability to match a customer's travel needs with the flights available at a travel agent's office. Its listings also included flights from American's competitors. The system saved American and travel agents time and money, and it helped the carrier steal market share. American found that by giving its own flights higher position on search screens, they were selected more frequently, so it corrupted Sabre's search mechanisms to give its own flights priority. American called it "screen science." The U.S. government called it "screen bias" and banned the practice. Sabre blazed a path on both counts: business strategy and business bias. With the advent of the Internet, searching for flights would reappear as Travelocity's customer self-service. And general-purpose search engines would implement pay-for-placement search results.

The Top Three

So how do I rank my candidates on a list from 1-12? In descending order, the greatest software ever written is:

12. The Morris worm
11. Google search rank
10. Apollo guidance system
9. Excel spreadsheet
8. Macintosh OS
7. Sabre system
6. Mosaic browser
5. Java language
4. IBM System 360 OS

That leaves my third, second, and top-most choices still to go. So here they are:

No. 3 is the gene-sequencing software at the Institute for Genomic Research. It isn't a mammoth software system, but "on sheer technical brilliance, it gets 10 out of 10," Morgenthaler says. The institute's sequencing system helped subdivide the task of understanding the DNA makeup of 20,000 human genes. Its breakthrough insights into the human genome and sequencing analysis, plus its ability to recombine subunits of analysis into the whole, "accelerated the science of genomics by at least a decade," Morgenthaler says. We now have the tools to begin tracing the paths of human migration out of Africa. The human genome reveals how minute the genetic differences are between ethnic groups at a time when such information is sorely needed. It gives a scientific basis for how humans can view each other as brothers at a time when we seem in danger of destroying one another. The software will be called on to perform many additional gene sequencing feats; the roots of many diseases and puzzles of heredity remain to be solved. Seldom have great research and great software been more closely intertwined.

My No. 2 choice is IBM's System R, a research project at the company's Almaden Research Lab in San Jose, Calif., that gave rise to the relational database. In the 1970s, Edgar Codd looked at the math of set theory and conceived a way to apply it to data storage and retrieval. Sets are related elements that together make up an abstract whole. The set of colors blue, white, and red, for example, are related elements that together make up the colors of the French flag. A relational database, using set theory, can keep elements related without storing them in a separate and clearly labeled bin. It also can find all the elements of a set on an impromptu basis while knowing only one unique identifier about the set.

System R and all that flowed from it--DB2, Oracle, Microsoft SQL Server, Sybase, PostgreSQL, MySQL, and others--will have an impact that we're still just beginning to feel. Relational databases can both store data sets about customers and search other sets of data to find how particular customers shop. The data is entered into the database as it's acquired; the database finds relationships hidden in the data. The relational database and its SQL access language let us do something the human mind has found almost impossible: locate a broad set of related data without remembering much about its content, where it's stored, or how it's related. All that's needed is one piece of information, a primary key that allows access to the set. I like System R for its incredible smoothness of operation, its scalability, and its overwhelming usefulness to those who deal with masses of data. It's software with a rare air of mathematical truth about it.
And now for The Greatest Software Ever Written--Unix.

Bell Labs often gets credit for creating the Unix operating system, but Bell never funded its development. In fact, the labs' management knew nothing about it. Bell Labs had committed developers to a multivendor project called Multics that made use of many new ideas for an operating system. But the project fell apart, and a Bell Labs participant, Ken Thompson, decided he wanted a personal version of Multics so he could write shoot-'em-up games, says Feldman (who was the No. 7 developer on the AT&T Unix project and is now president of the Association for Computing Machinery).

In the best tradition of software, Unix was an individual effort that took on a life of its own. Thompson crafted Unix on a Labs reject, a tiny DEC PDP 7 minicomputer with either 16 or 32 Kbytes of memory--Feldman isn't sure which. "Unix was written under great constraints," he says. "There was no memory and no CPU power. You'd be embarrassed today not to have more memory and CPU in your wristwatch."

Thompson designed his stripped-down operating system to move data in blocks or "pages" from a computer's random access memory onto disk, freeing up memory space. When they're needed again, the operating system knows to go to the disk and page them back into memory. This way, a big operating system can run on a small computer with a small amount of memory. His operating system also was a multiuser system. Even the mainframes of the day were limited to a single user, making computing time expensive. Thompson's Uniplexed Information and Computing System (Unics) would let two people use a computer at the same time.

The Computer Science Research Group at the Labs heard about Unics and wanted a copy. At the group's request, Thompson and a colleague, Dennis Ritchie, agreed they would add text formatting to their system, provided they were given a PDP 11/20, a larger machine. Thus, Unix text processing was born of barter. Unics became Unix; was recast in tighter, more portable C code; and was brought to market by AT&T as the Unix System III.

So Unix System III was the greatest piece of software--almost. Bear with me here.

A GNU Philosophy
System III represented an advance, but it lacked many things, such as a windowing system, a graphical user interface, and a method for dealing with distributed systems. In an attempt to loosen IBM's stranglehold on large computers, AT&T made Unix available to researchers and universities for a small fee. Some people think open source code began when software became freely downloadable over the Internet. They're wrong. In fact, open source has its roots in the early distributions of Unix. One of those distributions came from a figure working into the night to improve the University of California at Berkeley's version. Other researchers would hear of Bill Joy's additions and ask him to send them a copy. So the first open source code wasn't a digital file. It was a reel of magnetic tape that Joy dropped in the mail late at night after finishing other work, according to Eric Allman, a grad student with Joy at Berkeley and the author of Sendmail. In 1977, the compilation of Joy's and other grad students' additions became known as the Berkeley Software Distribution, or BSD.

Unix was designed as discrete modules of code, each relating to a part of the hardware system. That made it easier to revise than IBM's operating systems. The Berkeley grad students made swift changes. They added a clean, fast file system, reliable networking, and the powerful vi code editor. They added Berkeley Sockets API, making it as easy to send data to a location on the network as to a local disk.

Defense contractor Bolt Beranek & Newman was at that time the official implementer of TCP/IP networking for the Defense Advanced Research Projects Agency. In BSD 4.1a, the Berkeley grad students modified TCP/IP to suit their own tastes. In 1986, Darpa would test the TCP/IP in BSD 4.3 and decide it was better than BBN's.

Bill Joy left Berkeley in 1982 to co-found Sun Microsystems, using the Berkeley Software Distribution as the basis for SunOS and Solaris. Sun and AT&T collaborated on improving System V, producing a consolidated System V Release 4. They agreed it would be the standard Unix for the future. AT&T, wanting a return on its Unix investment, increased its fees for the software.

But the Berkeley students weren't so easily derailed. They rewrote BSD Unix, ridding it of AT&T files and creating a new distribution that could run on low-cost Intel hardware. With yet another version looking like it might run off with AT&T's profits, AT&T's Unix Systems Labs sued BSDi, the company distributing Berkeley Unix for Intel. Unix System Labs won an injunction against BSDi, tying up Intel-based Unix for years.

Meanwhile, high fees for Unix outraged Richard Stallman, a grad student who used it at the MIT artificial intelligence lab. Software, he decided, was an intellectual asset and should be free, like the published work of his fellow researchers. He set about building a set of tools called GNU that programmers could use to create their own software.

Those tools reached Linus Torvalds, a 21-year-old student in Helsinki, Finland, when he was looking for a version of Unix that would run on his Intel PC. He used them to develop the Linux kernel, and the rest is history. Linux became so popular that it displaced the Berkeley Software Distributions on Intel hardware. Today, Linux threatens to take over the high end of the market as well. But Linux is merely a clone of an incomplete GNU system and its BSD predecessors. They generated all the key concepts implemented in Linux. That's why Sendmail and BIND, building blocks of the Internet, were developed under Berkeley Unix, not System V. And that's why Microsoft, when it sought the best implementation of TCP/IP for Windows, took the one in BSD Unix. When Darpa wanted to build its Arpanet internetwork--or Internet--in 1983, it dropped its existing protocol and relied on BSD Unix TCP/IP.

So there you have it: The single Greatest Piece of Software Ever, with the broadest impact on the world, was BSD 4.3. Other Unixes were bigger commercial successes. But as the cumulative accomplishment of the BSD systems, 4.3 represented an unmatched peak of innovation. BSD 4.3 represents the single biggest theoretical undergirder of the Internet. Moreover, the passion that surrounds Linux and open source code is a direct offshoot of the ideas that created BSD: a love for the power of computing and a belief that it should be a freely available extension of man's intellectual powers--a force that changes his place in the universe.

Websites that Changed the World
John Naughton

Amazon used to be a large river in South America - but that was before the world wide web. This month the web is 15 years old and in that short time it has revolutionised the way we live, from shopping to booking flights, writing blogs to listening to music. Here, the Observer's Net specialist charts the web's remarkable early life and we tell the story of the 15 most influential websites to date. Tell us what you think of our choices here

Johannes Gutenberg took the idea of printing by moveable type and turned it into a publishing system. In doing so he changed the world. But he did not live to see the extent of the revolution he had brought about. If you'd told him in 1468 - the year he died - that the Bible he had published in 1455 would undermine the authority of the Catholic church, power the Renaissance and the Reformation, enable the Enlightenment and the rise of modern science, create new social classes and even change our concept of childhood, he would have looked at you blankly.

But there lives among us today a man who has done something similar, and survived to see the fruits of his work. He is Tim Berners-Lee, and he conceived a system for turning the internet into a publishing medium. Just over 15 years ago - on 6 August 1991, to be precise - he released the code for his invention on to the internet. He called it the World Wide Web, and had the inspired idea that it should be free so that anyone could use it.

And just about everyone did, with the result that the web grew exponentially. Today nobody really knows how big it is. At a recent conference, Yahoo's head of research and development put the size of the public web at 40 billion pages, but the size of the 'deep' web, the area where web pages are assembled on the fly and served up in response to clicked-upon links, is estimated to be between 400 and 750 times greater than the part that is indexed by search engines. Since you started reading this piece, thousands of pages have been added.

By any standards, the web represents a colossal change in our information environment. And the strange thing is that it has come about in just 15 years. Actually, most of it has happened in less than that, because the web only went mainstream in 1993, when the first graphical browsers - the computer programs we use to access the web - were released. So these are early days. We can no more envisage the long-term implications of what has happened than dear old Gutenberg could.

The strangest thing is how casually we have come to take it for granted. We buy books from Amazon, airline tickets from Easyjet and Ryanair, tickets for theatres and cinemas online, as if doing so were the most natural thing in the world. We check the opening times at the Louvre in Paris or the Museum of Modern Art in New York (or browse their collections) online. We check definitions (and spellings) in online dictionaries, look up stuff in Wikipedia, search for apartments to rent on Craigslist or a host of local lookalikes such as Daft.ie in Ireland. You can buy and sell just about anything (excluding body parts) on eBay. Children seeking pictures for school projects search for them on Google Images (and download them without undue concern for intellectual property rights). Holiday snaps escape from their shoeboxes and are published to the world on Flickr. Home movies likewise on YouTube. And of course anyone with doubts about a prospective blind date can do an exploratory check on Google before committing to an evening out with a total stranger.

All this we now take for granted. To get a handle on the scale of what has happened, think back to what the world was like 15 years ago. Amazon was a large river in South America. Ryanair was an Irish airline that flew to places nobody had ever heard of. eBay was a typo. Yahoo was a term from Gulliver's Travels. A googol was a very large number (one followed by a hundred zeroes). Classified ads were densely printed matter in newspapers. 'Encyclopedia' was a synonym for Encyclopedia Britannica. And if you wanted to read what your MP had said in the Commons yesterday you had to queue at the Stationery Office in London to buy Hansard. Oh, and there were quaint little shops in high streets called 'travel agents'.

To celebrate the 15th anniversary of the web we've assembled a list of sites that have become the virtual wallpaper of our lives. What the corresponding list will be like in 15 years' time is anyone's guess. As the man said, if you want to know the future, go buy a crystal ball. In the meantime, read on and wonder.

• John Naughton's history of the internet, A Brief History of the Future, is published by Phoenix at £7.99

1. eBay.com

Founded: Pierre Omidyar, 1995, US

Users: 168m

What is it? Auction and shopping site

You cannot buy fireworks, guns, franking machines, animals or lock-picking devices on eBay, the internet's premier auction site, but almost everything else is OK: sideburns, houses, used underwear and of course Pez dispensers.

Pez is where it is said to have all begun for eBay's ponytailed founder Pierre Omidyar when he responded to his fiancee's worries that she would no longer be able to expand her toy collection when they moved to Silicon Valley. Omidyar developed a car boot sale anyone could use wherever they were, and without the need for getting dressed. The name sprang from Echo Bay Technology Group, Omidyar's consultancy company, and the first sale was a broken laser pointer.

Things have moved on a little since then. We spend more time on eBay than any other internet site. There are more than 10 million users in the UK. And eBay is far from just a second-hand stall. New items are sold by global companies; many people have abandoned their jobs to eBay full time, and normally sane people fret about 'negative feedback' and being outbid by 'snipers'. eBay owns PayPal and Skype, making dealing almost effortless.
Simon Garfield

2. wikipedia.com

Founded: Jimmy Wales, 2001, US

Users: 912,000 visits per day

What is it? Online encyclopaedia

As a young boy growing up in Hunstville, Alabama, Jimmy Wales attended a one-room school, sharing his classes with only three other children. Here he spent 'many hours poring over encyclopaedias', and faced the familiar frustrations: their scope was conservative; they were hard to navigate and often out of date.

In January 2001 he created a solution. Wikipedia was a free online encyclopaedia and differed from its predecessors in one fundamental regard: it was open to everyone to read, and also to edit. If you had something to add - from a pedantic correction to an entire entry on your specialist subject - the Wiki template made this easy. The software enables entries to be updated within minutes of new developments. There is nothing you cannot find - how best to make glass, the use of the nappy in space exploration - and if something isn't there, you may wish to take matters into your own hands.

Like any fast-moving venture - the site attracts 2,000-plus page requests a second - it has not been slow to attract criticism. Occasionally a libellous article will lie undetected for months, as happened with an entry linking one of Robert Kennedy's aides with his assassination. But Wales says his creation is abused only rarely, and swiftly corrected by other users. 'Those who use Wikipedia a lot appreciate its true value and have learnt to trust it,' he says. 'Sometimes a prankster will substitute a picture of Hitler for George Bush, and within an hour someone would have changed it back.'

3. napster.com

Founded: Shawn Fanning, 1999, US

Users: 500,000 paying subscribers

What is it? File sharing site

Shawn Fanning created Napster in 1999 while studying at Boston's Northeastern University, as a means of sharing music files with his fellow students. Of course, it was entirely illegal (home taping kills music, remember) and was quickly attacked by a mainstream music industry already struggling to make profits on its money-guzzling artists. Its popularity reached a peak in 2000 with over 70 million registered users before Fanning's company was forced to pay millions of dollars in backdated royalties: a move which bankrupted the original, free-to-use Napster the following year. By then, however, the premature leaking and sharing of hotly anticipated albums by some of the major labels' most bankable artists had proved to be a stimulant, not a thief, of sales once the CD version was released. The new Napster - effectively a renamed version of a pay-to-download MP3 site owned by the original Napster company's buyers, the German giant Bertelsmann- has never recaptured its original cool, precisely because it is now legitimate. What it did in its brief period of illegal notoriety was popularise the notion that making music freely available on the internet - through MySpace, one-off downloads or artist-sanctioned 'leaks' - does artists no harm at all; indeed, it's helped to launch the careers of many.
Lynsey Hanley

4. youtube.com

Founded: Chad Hurley, Steve Chen and Jawed Karim, 2005, US

Users: 100m clips watched a day

What is it? Video sharing site

When Chad Hurley and Steve Chen began working out of a garage in San Mateo in late 2004 to figure out an easy way to upload and share funny videos they'd taken at a dinner party, they had no idea just how huge an impact their creation would make. The former PayPal employees launched the user-friendly site in February 2005 and it has since become one of the most popular sites on the net, with YouTube claiming that 100 million clips are watched every day. Through the grassroots power of the internet and good word-of-mouth, the site quickly went from a place where people shared homemade video clips to users posting long-lost TV and film gems such as bloopers from Seventies game shows to ancient music videos. It has also taken off as a place for amateur film-makers to show off their talents - take David Lehre, a teenager whose MySpace: The Movie became such a popular clip he's already fielded job offers from major movie studios.

Not all television studios immediately embraced the idea of their archived copyrighted footage being shared. 'We're not here to steal,' insists Chen. 'When [US television network] NBC asked us to take something down, we did.' In fact, NBC only last week announced plans to work alongside YouTube, airing exclusive clips and trailers and eventually hoping to post episodes of The Office and Saturday Night Live on it. The company has had several offers to be bought out, but the pair swear they will not sell out. They continue to work out of their San Mateo loft, overseeing 27 employees and developing ways to make the site easier to use while whirling lucrative deals with studios.
Gillian Telling

5. blogger.com

Founded: Evan Williams, 1999, US

Users: 18.5m unique visitors

What is it? Weblog publishing system

There weren't too many computers lying around in the cornfields of Nebraska in the 1970s when Evan Williams was growing up. But he was drawn to them when he found them. He was also drawn west, to California in the 1990s. Williams founded Pyra Labs with two friends. At first it made project-management software for companies. It was not glamorous. Then it made Blogger and changed the world.

'The funny thing was I actually hesitated before working on Blogger because I didn't see the commercial applications,' says Williams. 'We had started a company and we needed to make money. We didn't see how this little hobbyist activity was going to make anyone money.'

The little hobbyist activity was blogging, the art of keeping a weblog - of diarising, theorising, satirising, fictionalising your life and observations online. It had already taken off among the tech fraternity in the Nineties, but it required building and maintaining your own website; the luddites were excluded. Williams created a tool that made self-publishing online as user-friendly as word-processing. It is hard to exaggerate the importance of this innovation. It didn't just create a new form of creative expression, it turned the media upside down.

Content was once made by companies for passive consumption by people. After Blogger, people were the content. They wrote about and read about their friends, their opinions, their cats. (There was a lot about cats in the early blogs.) None had a huge audience but collectively they were massive. 'Now you see TV networks saying: "We've gotta get on the web because that's where the audience is,"' says Williams.

There is no accurate count of the number of blogs in existence now. There are millions. One is created every minute. The revolution might have been possible without Blogger but it would have taken everyone a lot longer.

'Something like it would have existed anyway,' says Williams. 'And lots of things like it do exist. It was a combination of helping push an idea as well as just being in the right place at the right time when the idea was right.'
Rafael Behr

6. friendsreunited.com

Founded: Steve and Julie Pankhurst, 1999, UK

Users: 15m

What is it? School reunion site

In July 2000, as the dreams of the internet boom crumbled around them, a husband-and-wife team were busy launching a rough and ready web phenomenon. Friends Reunited, which was sold to ITV for £120m last December, was Julie Pankhurst's brainchild. While pregnant, she became obsessed with finding out what her old friends had been up to since they left school. Her husband Steve, a computer programmer, had been brainstorming with his business partner Jason Porter for an original internet-based idea, and Julie suggested a website to cater for her newfound obsession. It took her some time to convince them. 'In the end,' says Steve, 'I designed Friends Reunited just to shut her up.'

The site took off slowly, getting half a dozen hits per day, but everything changed at the start of 2001 when its lone server collapsed. 'The Steve Wright show on Radio 2 had made us their website of the day. Tens of thousands of people had tried to access the site at the same time.' Within a month membership rose from 3,000 to 19,000; the couple were working 18-hour days. Friends Reunited quickly became a household name and membership soared into the millions.
Killian Fox

7. drudgereport.com

Founded: Matt Drudge, 1994, US

Users: 8-10m page views per day

What is it? News site

What began as a gossipy email newsletter has, since its first post in 1994, developed into one of the most powerful media outlets in American politics. Today the Drudge Report has evolved into a website, drudgereport.com, and its threadbare, no-frills design belies the scale of its influence. It received an estimated 3.5 billion hits in the last 12 months; visitors regard it as the first port of call for breaking news.

Fedora-wearing founder Matt Drudge monitors TV and the internet for rumours and stories which he posts as headlines on his site. For the most part these are direct links to traditional news sites, though occasionally Drudge writes the stories himself. In 1998 he was the first to break news of the Monica Lewinsky scandal.

Named this year as one of Time magazine's 100 most influential people, the 38-year-old regards himself as a maverick newsman working free from the demands of editors and advertisers. Others, particularly critics from the left, view his reportage as biased towards conservatives, careless, malicious and frequently prone to error.

A report in 1997, alleging that White House assistant Sidney Blumenthal physically abused his wife, generated a $30m lawsuit against Drudge, which was dropped in 2001. In June 2004, Drudge apologised for a February 'world exclusive' claiming that John Kerry had had an affair with an intern.

Drudge has been labelled a 'threat to democracy' and an 'idiot with a modem' as well as 'the kind of bold, entrepreneurial, free-wheeling, information-oriented outsider we need more of in this country' (by Camille Paglia); his importance in the US media is undisputed.

8. myspace.com

Founded: Tom Anderson and Chris DeWolfe, 2003, US

Users: 100m

What is it? Social networking site

When business-school alumnus Chris DeWolfe set up the social networking site MySpace with his partner, ex-band member and film studies graduate Tom Anderson, three years ago, there was little indication that the one-stop online friend-making shop would soon boast 100 million members and more page visits in Britain than the BBC. The pair envisaged a site that would bring together all the qualities of existing online communities such as Friendster, Tribe.net and LiveJournal, with added features including classified adverts and events planning.

They got the formula just right: the MySpace-opolis is growing by 240,000 a day, making it the fourth most-visited website in the world. DeWolfe believes that the key to the site's success is its founders' rapport with the people who use it. 'We looked at it from the point of view of how people live their lives,' he says.

One of those features is the ability to upload and listen to music, which has attracted 2.2 million new bands and artists to the site, some of whom - most famously Lily Allen and Arctic Monkeys - can attribute their chart success to having spread the word through MySpace.

MySpace's parent company, Intermix, was bought by Rupert Murdoch's NewsCorp last year for $580m, causing consternation among some of the music world's more politicised acts, but no large-scale boycott. The site is simply too valuable and effective - and ubiquitous - to ignore.

9. amazon.com

Founded: Jeff Bezos, 1994, US

Users: More than 35m customers in over 250 countries

What is it? Online retailer, primarily of books, CDs and DVDs

The earth's biggest bookstore was originally called Cadabra, but Jeff Bezos thought again after his lawyer misheard it as 'cadaver'. He chose Amazon as something large and unstoppable and so, with current annual revenues of $8bn, it has proved. It was just a trickle to begin with though: the first office was in a Seattle suburb with desks made out of old doors. But it quickly became the headline act of the dotcom miracle and Bezos was Time magazine's man of the year in 1999. Amazon's continued dominance rests on price-slashing that would make Wal-Mart wince, and a reputation for reliability. Though selling books (and now almost everything else) on a vast scale, it has tried never to forget the value of intimacy.
Tim Adams

10. slashdot.org

Founded: Rob Malda, 1997, US

Users: 5.5m per month

What is it? Technology news website and internet forum

'I'm just a geek that likes to poke around with hardware,' says Rob Malda. His site, Slashdot.org, hosts news and discussion for techies and is one of the most visited websites in the world. Time magazine included him in its top 100 innovators, stating: 'Malda has taken the idea of what news can be, hacked it open and rebuilt it for the internet age.'

Most of the site is written by users; posts include a short synopsis paragraph, a link to the original story and a lengthy discussion sometimes running to 10,000 comments a day. Slashdot pioneered this user-driven content, and influenced sites including Google News, Guardian Unlimited and Wikipedia. In 2002 the site leaked the ruling of a court case involving Microsoft before the verdict had even been delivered to Microsoft or the US government. There is also the Slashdot effect, where a site is swamped by heavy traffic from a Slashdot link and its server collapses.

In 1997, 21-year-old Malda started what we would now call a blog, hosted on his user account at university. As the site picked up users he divided his time between college, paid work and the site. 'It was a blur. There were many nights when I did not sleep.' Two years later Andover bought Slashdot for $5m, shared between Malda, co-founder Jeff 'Hemos' Bates and other partners. They also shared $7m in stock between them. In 2000 VA Linux (now VA Software) bought Andover for $900m. Slashdot now has 10 employees dedicated to maintaining the site, most of them based in California. Malda has remained in Michigan, where he grew up and went to college. He is director of Slashdot. He proposed to his wife Kathleen on the site in 2002.
Katie Toms

11. salon.com

Founded: David Talbot, 1995, US

Users: Between 2.5 and 3.5m unique visitors per month

What is it? Online magazine and media company Salon grew out of a strike. When the San Francisco Examiner was shut for a couple of weeks in 1994 a few of its journalists taught themselves HTML and had a go at doing a newspaper with new technology. They found the experience liberating, and David Talbot, the Examiner's arts editor, subsequently gave up his job and launched the kind of online paper he had always wanted to work for. Salon was originally a forum for discussing books, but the editors quickly realised it had to be more journalistic than that. They aimed at creating a 'smart tabloid', not afraid to be mischievous while maintaining a rigour with news. Talbot believes that online journalism came of age with the death of Princess Diana and the Lewinsky scandal. It proved with those events that it could be nimbler and more gossipy, it could update itself continually and, crucially, let readers join in. Salon's Table Talk forum established a new relationship between a news outfit and its audience, letting readers write themselves into the story.

Salon was not afraid of muck-raking. When Talbot decided to run a story about Henry Hyde, who was to sit in judgment of Bill Clinton after the Starr report, he was roundly criticised not just by the entrenched Washington media but also by some on his own staff. The story concerned Hyde's extramarital affair of 30 years before, and the more august sections of the American media, not to mention the right-wing impeachers of the President, thought this was beyond the pale. Talbot recalls how Salon 'got bomb threats, I received death threats... [but] I think if as a new organisation that comes into the world, a new media operation, you don't take risks with stories that no one else does, then what's the point?'

For all its journalistic success, Salon has always struggled financially. A couple of times the site has nearly gone under; on one occasion Talbot was forced to fire his wife who ran a women's page. A subscription system saved it, along with the growth in online advertising. These days Talbot sees Salon's competitors as the big news organisations, the New York Times and so on, who have strong online presence. Having shown a few of them how it's done, Salon now faces a daily battle to stay ahead of the game.

12. craigslist.org

Founded: Craig Newmark, 1995, US

Users: 4bn page views per month

What is it? A centralised network of online urban communities, featuring free classified advertisements and forums

Craigslist is one of the most deceptively simple websites on the internet. It is also one of the most powerful. It is - pretty much - simply a free noticeboard. But its astonishing popularity has given it immense power. Want to rent an apartment? Sell a car? Find a job? Meet someone to spend the night with? Craiglist will provide the answers. For free. It has revolutionised urban living in America. It has also undercut one of the main reasons for newspapers: classified advertising. As nearly all Craigslist's content is free, it rarely censors ads and its readers number in the millions, it is far more useful to post an advert on the site than in your local newspaper. Thus a huge decline in newspaper ads and revenue, triggering cost-cutting which will see reporters tossed on to the scrap heap... and the end of a free press and democracy as we know it (if the critics are to be believed).

The website was founded by Craig Newmark, an ubergeek with a hippyish mentality. It started as a simple email that he would send around listing various events going on in San Francisco. From such humble beginnings Craigslist has grown into a multi-million-dollar business. Yet Newmark refuses to sell his company or charge for every ad.

Why should you care? Craigslist is all over the world - and coming to your home town soon.
Paul Harris

13. google.com

Founded: Larry Page and Sergey Brin, 1998, US

Users: A billion search requests per day

What is it? Search engine and media corporation

Its name is listed as a verb in the Oxford English Dictionary. It commands the largest internet search engine in the world. It is the fastest-growing company in history and its founders are worth almost $13bn each.

The search method devised by Larry Page and Sergey Brin was instrumental to Goggle's success. Rather than ranking results according to how many times the search term appeared on a page, their system measured the frequency with which a website was referenced by other sites. Another key factor was the site's stripped-down design, which made it speedier and more accessible than its competitors.

From such plain foundations a gigantic empire has sprung and is branching out into email (with Gmail), news (Google News), price comparison (Froogle), cartography (Google Maps), literature (with the much contested Google Book Search), free telephony (Google Talk), and, most strikingly, Google Earth, an incredibly detailed virtual globe. Google styles itself as a laidback, hippyish organisation but its founding motto, 'Don't Be Evil', is already being tested: the compromise it reached with China over censorship has proved particularly contentious.

14. yahoo.com

Founded: David Filo and JerryYang, 1994, US

Users: 400m

What is it? Internet portal and media corporation

It receives an average of 3.4bn page hits a day, making it the single most visited website on the internet, but in recent years Yahoo! has been eclipsed by Google. Both companies were launched on a very small scale by Stanford University graduates and, very soon the portal that Jerry Yang and David Filo had started as a hobby was en route to becoming the most popular search engine on the web. On the back of its early success, Yahoo! (an acronym for 'Yet Another Hierarchical Officious Oracle') branched out into email, instant messaging, news, gaming, online shopping and an array of other services.

It also started buying up other companies such as Geocities, eGroups and the web radio company Broadcast.com. Yahoo! survived the internet collapse at the start of the decade and brought former Warner Bros chief exec Terry Semel on board in 2001 to navigate the difficult waters of the post-boom period. Semel began to address the challenge of making money out of the internet without relying on advertising revenue alone. Google notwithstanding, Yahoo! is still very much a contender.

15. easyjet.com

Founded: Stelios

Haji-Ioannou, 1995, UK

Users: 30m passengers last year

What is it?: Budget airline

It's easy to forget what it was like back in the old days, when we didn't just pay a tenner, pitch up at Luton and pop over to Rome for the weekend. We mini-breaked in Bournemouth. Travelling to Scotland was an all-day affair. Airlines issued quaint old-fashioned things such as meals. And tickets. And seats.

And then along came Stelios. That's Stelios as in Haji-Ioannou, although he now, alongside Delia and Jamie and Sven, belongs in that rare category - the surnameless celebrity. He's also that other elusive British beast - the celebrity entrepreneur. In 1995, after borrowing £30m from his dad, a shipping magnate, he leased two second-hand Boeings and began selling flights to Scotland for £29 each way.

EasyJet was the first low-cost British airline and, presciently, the first to start taking bookings over the internet, although, as Stelios admits, he wasn't won over straight away.

'We started off as something very obscure like 1145678.com. And I said: "This is never going to fill the planes. It's just for nerds." Then some time in 1997 we bought the domain easyjet.com for about £1,000 and put up a proper website. At that time we had the telephone number in big letters on the side of the plane. And we put a different telephone number on the website. Week after week I watched how quickly the numbers were growing and that gave me the confidence in April 1997 to launch a booking site.'

It was, he says, the neatest and simplest way: 'you outsource the work to the customer'. And it turned him into an internet evangelical. The first company he set up after easyJet was easyInternetcafe and all 15 companies in the easyGroup have some sort of web component.
Carole Cadwalladr

Secrets of the Pirate Bay
Quinn Norton

It's Saturday night and I'm lounging on a living room sofa surrounded by lanky twenty-somethings in shorts and deep tans. Across from me, a wire emerges from a green Xbox -- modified to stream movies from its hard drive -- and snakes past two dusty turntables and into a video projector, which is displaying a menu of movies that would make Blockbuster jealous.

Peter, this living room's owner, selects a title, and the text "For Your Consideration" fades onto the screen, marking this movie as a leaked screener from the Academy Awards: Someone in Hollywood ripped their review DVD copy of the film and uploaded it to the internet, where it eventually found its way to this hacked game console. Peter chuckles, others cheer.

And barely a month after Swedish police raided their server room and carted two administrators and their legal help off in handcuffs, the lanky co-operator of the Pirate Bay -- the most popular and hunted piracy site in the world -- settles back to watch a pirated copy of Spanglish.

Harbored by a country where 1.2 million out of 9 million citizens tell the census that they engage in file sharing, the Pirate Bay is as much a national symbol as it is a website. Protected by weak Swedish copyright laws, the Bay survived and grew as movie studio lawyers felled competing BitTorrent trackers one-by-one. Today it boasts an international user base and easily clears 1 million unique visitors a day. New movies sometimes appear at the top of the site's most-popular list before flickering onto a single theater screen.

With its worldwide following, many here see the Bay as the devil on Sweden's shoulder, legitimizing contempt for intellectual property rights and threatening to saddle the country with a lasting reputation for international lawlessness. "It's very difficult to make people act legal when they've been doing something for some time," says Marianne Levin, professor of private law and intellectual property at the University of Stockholm. "In Sweden the debate (on file sharing) came very late."

So when, on May 31, Swedish police finally arrived with a search warrant and carted off enough servers to fill three rental trucks, the entertainment industry was quick to proclaim victory. The Motion Picture Association of America issued a press release announcing a milestone. "The actions today taken in Sweden serve as a reminder to pirates all over the world that there are no safe harbors for internet copyright thieves," trumpeted MPAA chairman Dan Glickman.

But the three stewards of the site -- 27-year-old Peter; Fredrik Neij, 28; and Gottfrid Svartholm, 21 -- were already preparing their response.

Coordinating with volunteers around the world in an IRC chat room, the trio scrambled to relaunch the Bay at a new location. Peter -- a slim, dark haired, dark eyed geek -- didn't sleep in those first few days, fielding a stream of phone calls from the press while confronting the technical challenge of resurrecting a high-traffic site with a partial database and all-new hardware. "They stole most of our backups as well," he says. "I managed to get some backups out of the servers while the police were in the building." (Peter wasn't arrested with the others, and remains anonymous.)

They took the reconstructed data to temporary hosting in the Netherlands, and three days after the raid, the Pirate Bay reappeared on the internet.

So fast was the Bay's rebound that some news articles reporting the site's demise went to print after it was back up, recalls Peter. The resuscitated site had a few glitches, but the resurrection was remarkable in that it had never really happened before; when the major American rights holders take a website down, it stays down. The pirates delivered a victory message to the MPAA, and the Swedish equivalent, APB, through the site's reverse-DNS, which now read: hey.mpaa.and.apb.bite.my.shiny.metal.ass.thepiratebay.org.

Thanks to the press generated by the raid, the Pirate Bay instantly became more popular than ever. The Bay's T-shirt vendor alone now has four people working full time to fill orders for apparel sporting the site's pirate ship logo, and a skull-and-crossbones with a cassette tape as the skull. "They are behind something like 2,000," says Neij. "They are working day and night."

The pirates have since moved the Bay's hosting back to Sweden, where they've built technological bulwarks against another takedown, law-hardening the Bay's network architecture with a system of redundant servers that spans three nations. Shutting down the site in any single country will only cripple the Pirate Bay for as long as it takes for its fail-over scripts to execute, a gap measurable in minutes.

The various servers' locations are obscured behind a load balancer configured to lie, the crew says. Once the failsafe is triggered, a determined adversary with an international team of litigators might be able to track down the servers, but by that time -- according to the plan -- the pirates will have deployed mirrors in even more countries. In theory, the corporate lawyers will eventually tire of this game of international copyright Whack-A-Mole.

With all that in place, crew member Fredrik Neij says he welcomes the possibility of another raid. "I really want the pleasure of it being down three minutes, then up again."

Made in Mexico

The Pirate Bay was born in the late summer of 2003, in a plain motherboard box in Mexico with a slow radio uplink to the net.

Founder Gottfrid Svartholm was working as a programmer for a security consultancy on a one-year assignment in Mexico City, when he volunteered to help a Swedish file-sharing advocacy group called Piratbyran set up its own BitTorrent tracker. Svartholm's spare bit of caseless hardware wasn't meant to be extraordinary -- it was just meant to be a specifically Swedish site.

He chose the name Pirate Bay to make clear what the site was there for: no shame, no subtlety. These people were pirates. They believed the existing copyright regime was a broken artifact of a pre-digital age, the gristle of a rotting business model that poisoned culture and creativity. The Pirate Bay didn't respect intellectual property law, and they'd say it publicly.

It didn't take much for the nascent piracy site to saturate its 512-Kbps pipe, and for Svartholm's employers, the owners of the radio link, to start complaining. Fredrik Neij became involved in 2004 when Svartholm moved the tracker to Sweden and put it on a better connection. Peter joined soon after to help translate and grow the site.

For Peter, the project returned him to his formative years. As a child his mother took ill, and the responsibilities of caring for her took over most of his life. After he dropped out of school, he found the only place he could be a kid, and socialize as one, was Sweden's vibrant bulletin board and demo scene.

The modem was a lifeline for Peter, and he says he didn't understand for many years that much of what transpired on the boards -- swapping files, talk about hacking, and cracking copy-protected software -- were becoming serious crimes.

That his world of sharing and knowledge could be seen as prosecutable wrongdoing was a shock to his system, he says -- one that today informs his certitude that copyright enforcement is an assault on expression itself. "There is not a cause closer to my heart," Peter says. "This is my crusade."

As Peter worked to grow the site, Mikael Viborg became the Bay's legal adviser, explaining Swedish IP law to the crew over IRC. It was Viborg's legal advice that lead to the Bay's first defining feature: a gallery of threatening letters sent in by lawyers for movie studios, video-game makers and other rights holders, side-by-side with the crew's mocking replies. For Peter, that's when the Pirate Bay became part of a movement, and Neij is still obviously proud of the effort. "They are rude in a polite way," he says. "We are rude in a rude way back at them."

In the meantime, big media's method of polite rude was working in the rest of the world. The U.S. Supreme Court was reviewing the legality of file-sharing networks like Grokster and Morpheus, and would eventually rule against them. Challenges to copyright term extensions failed, the RIAA was suing file sharers by the thousands, and rights holders groups were pushing an aggressive public education campaign, equating file sharing to stealing. Impassioned pleas from movie makers and musical artists greeted a public that was increasingly getting the idea -- even if they didn't stop downloading, they were at least feeling guilty about it.

Against this backdrop, the Pirate Bay crested the world of file sharing through attrition. One by one, most of the peer-to-peer networks went away. (LimeWire, one of the few survivors, was sued by the RIAA last week.) BitTorrent tracker search engines fell next -- sites like Suprnova.org and Elite Torrents crumbled under legal threats and raids. The remaining few, including Isohunt and TorrentSpy, now have policies of removing torrents for infringing content upon request. They're being sued anyway.

That leaves the Pirate Bay as the lone civil dissenter. It neither operates in a black market nor lays claim to a loophole of international law. Like its progenitor organization, Piratbyran, the administrators of the Pirate Bay believe the law is wrong.

Political scandal, and the Pirate Bay's buried treasure

But the attention it's garnered as a surviving piracy hub has not always been good for the Pirate Bay or its opponents, and both sides have recently been dogged by scandal in the glare of Sweden's media spotlight, pulling the sympathies of Swedes back and forth.

The Pirate Bay's jaunty image was blemished when a July 5 article in the Swedish daily paper Svenska Dagbladet revealed the site's hidden financial life for the first time. Posing as an internet firm seeking advertising on the Bay, the paper phoned Eastpoint Media, which sells banner ads for the Pirate Bay in Scandinavia. Eastpoint revealed to the reporter that they place 600,000 Kr of ads per month -- about $84,000 U.S.

Eastpoint takes 50 percent of that off the top, and part of the remainder likely goes to Random Media, a Swiss company that directly manages all the Bay's ad placements. But the implication of the report was clear -- a website ostensibly dedicated to a selfless ideal, and which solicits donations, was turning a tidy profit.

"The general perception is that they are doing something good ... they've always had this image, very ideological," says Tobias Brandel, the reporter who broke the story. If the Pirate Bay turns out to be a collection of businessmen profiting off of piracy via porn ads and online poker, it would lose popular support in the moralistic Swedish society. And if the Pirate Bay's crew is eventually convicted of copyright crimes "they will have a much harder punishment," says Brandel.

Scandinavia accounts for around 35 percent of Pirate Bay traffic, according to Peter. It's unclear how much additional money the site makes on ads sold elsewhere. And no one is saying where the ad money goes. Donations and profits from T-shirt sales go to Piratbyran, but ad sales do not. Peter declines to say more, on advice of the Pirate Bay's defense counsel.

This month Eastpoint released a statement saying it's terminating its relationship with the Bay.

The Pirate Bay's enemies might rejoice over the national controversy, if some weren't embroiled in a scandal of their own, centered on U.S.-led lobbying efforts that preceded the Pirate Bay raid.

The Swedish constitution erects a legal wall between politicians and law enforcement: The politicians can tell police what issues to emphasize, but not what cases to pursue. So questions emerged in June when leaked documents appeared in the Swedish media that showed entertainment lobbyists with the MPA -- the MPAA's international arm -- had explicitly pushed for political interference.

"As we discussed during our meeting, it is certainly not in Sweden's best interests to earn a reputation among other nations and trading partners as a place where utter lawlessness with respect to intellectual property rights is tolerated," MPA's John Malcolm wrote in a letter to Dan Eliasson, state secretary to the minister for justice. "I would urge you once again to exercise your influence to urge law enforcement authorities in Sweden to take much-needed action against The Pirate Bay."

The minister's office denies that it acted on the MPA's request, which would constitute the Swedish crime of ministerstyre. Law enforcement officials have agreed that they weren't subject to political pressure. But the timing of the raid is raising eyebrows. The letter from Malcolm is dated March 17. Eliasson replied on April 11, and the Pirate Bay was raided on May 31.

Whether politically compelled or not, the raid was undeniably aggressive. Swedish prosecutor Hakan Roswall directed police to seize nearly 200 servers -- everything at three locations of Svartholm's and Neij's ISP business, prq.se. The forensic work required to get through the gigabytes of seized data isn't expected to be complete before December.

Once the evidence has been analyzed, the pirates will face an uphill court battle, predicts legal researcher Viveca Still, a faculty member at the Institute of International Economic Law in Helsinki. "Pirate Bay is likely to be held liable for secondary copyright infringement," she says. "A good indication is a recent court decision in Norway, according to which linking to illegal content was contributory infringement." (Swedish courts can site Norwegian precedent.)

But as the case unfolds, there is nothing preventing the Pirate Bay from continuing -- the raid was an evidence-gathering mission only, there's no court order against the site. That leaves it far from clear that the courts will shutter the Pirate Bay before the inevitable march of technology does the job itself. Once charges are filed, it could be many months before the trial starts. Appeals in the Swedish legal system aren't likely to be exhausted for three to five years after that.

By then, BitTorrent will no longer be the prime mover of pirated content online, says Neij. "The Pirate Bay will outlive its usefulness."

Study: Apple Leads Industry In Customer Satisfaction
Peter Cohen

Newly published data from the American Customer Satisfaction Index show that Apple leads other personal computer manufacturers, beating out Dell, HP and others.

On a 100 point scale, Apple merited a score of 83, according to the ACSI, a 2.5 percent year-over-year increase and a 7.8 percent increase from 1995, the first year the ACSI measured the PC industry.

The annual ACSI is sponsored by the American Society for Quality (ASQ) and University of Michigan’s M. Ross School of Business. It’s derived from phone interviews with customers contacted by using digital-dial telephone samples — more than 70,000 consumers are identified and interviewed annually.

Both Apple and Dell advanced this year — Dell moved up 5 percent to a score of 78, despite slipping market share and lower earnings. In fact, overall customer satisfaction in the PC industry increased 4 percent to 77, the highest score since the ACSI began tracking the industry. Every single PC maker showed improved satisfaction this past year, according to the ACSI results.

Apple: No Forced Labor at iPod Plant
Elaine Kurtenbach

Apple Computer Inc.'s investigation into claims of poor conditions at a Chinese iPod factory found no forced labor but revealed that workers were exceeding the company's limits on hours and days to be worked per week, the company said Friday.

The company said it was taking immediate steps to resolve that and other issues.

The probe by the Cupertino, Calif.-based company was in response to a recent report by a British newspaper, the Mail on Sunday, alleging that workers at the factory were paid as little as $50 a month and forced to work 15-hour shifts making the devices.

"The team reviewed personnel files and hiring practices and found no evidence whatsoever of the use of child labor or any form of forced labor," Apple said in a report on its Web site that summarized the findings of its audit of the facility.

However, the probe did find that in many cases workers were exceeding the company's limits for overtime, which specify a maximum of 60 hours or six days a week.

"We found no instances of forced overtime," the report said. But it said weekly limits were exceeded 35 percent of the time in a seven-month period and that employees worked more than six days in a row 25 percent of the time.

The company running the factory, which was not named in the report, was ordered to enforce Apple's overtime limits, it said.

Apple's iconic iPod players are made abroad, mainly in China. The company has sold more than 50 million iPods since its debut in 2001. The company responded vehemently to the allegations made by the British newspaper, saying it would not tolerate any violations of its code of conduct.

Apple said its inspection found that in at least two instances workers were made to stand at attention for disciplinary reasons.

"Apple has a zero tolerance policy for any instance, isolated or not, of any treatment of workers that could be interpreted as harsh," the report said. It said the factory has launched an "aggressive" manager and employee training program to prevent such behavior.

The probe found the workers assembling iPods were paid at least the minimum wage, with more than half earning more than minimum wage, excluding bonuses. Minimum wage for Shenzhen in southern China, where the factory is thought to be located, is about 800 yuan ($100) a month.

The factory, which supplies electronics components and accessories to other companies as well as Apple, is a small city in its own right, with clinics, recreational facilities, buses and 13 restaurants serving its 200,000 workers.

While conditions in the factories, cafeterias and most dormitories were good, the audit found overcrowded or unsuitable conditions at three offsite leased dormitories that were former factories. To address the problem, the contractor acquired more land and was building more dormitories on the factory premises, it said.

Apple has hired Verite, an international consultant on workplace standards, to continue monitoring conditions at the factory, it said.

"We are committed to ensuring compliance with our Code of Conduct and will complete audits of all final assembly suppliers of Mac and iPod products in 2006," the report said. It added that "in cases where a supplier's efforts in this area do not meet our expectations, their contracts will be terminated."

Dell Recall a Boon for Sony Rivals
Yuri Kageyama

Dell Inc.'s recall of 4.1 million laptop computer batteries came as embarrassing news to Sony, which supplied the problem batteries, but proved to be good news for rival Japanese electronics companies Sanyo and Matsushita, pushing the struggling company's shares higher Wednesday.

Sony, Sanyo and Matsushita, maker of Panasonic brand goods, are the three major Japanese producers of lithium-ion batteries, which are rechargeable and used in laptops, digital cameras, music players, cell phones and other gadgets.

Sony Corp. in Tokyo said it was still calculating how much the incident will cost but that it has promised to cooperate fully with Dell Inc. in the largest recall of electronics-related products in U.S. history. Worries about the cost burden sent Sony shares tumbling 1.15 percent in Tokyo to 5,150 yen ($44).

Sony has been trying to overhaul its electronics operations under Welsh-born Howard Stringer, the first foreigner to head the company - and fight doubts about whether the Tokyo-based manufacturer of the Walkman portable music player and PlayStation video-game machine will ever regain its former glory.

Goldman Sachs said the recall could hurt Sony's near-term earnings, although that would depend on how the cost of the recall is shared with Dell. In a report earlier this week, Goldman Sachs calculated the possible cost for Sony, using past sales data, at about 39.4 billion yen ($340 million).

John Yang, equity analyst at Standard & Poor's in Tokyo, said the battery mishap, although an embarrassment for its image, wasn't likely to be overly negative for Sony in the long run.

What would really hurt Sony would be a problem in its planned game machine upgrade, the PlayStation 3, set for worldwide sale in November, or a glitch in its booming flat-panel TV business.

"If we look at the big picture, it's not really Sony's core business," he said of the batteries, adding that the recall is adding to doubts about Sony's quality control.

Sony, based in Tokyo, recorded a 32.3 billion yen ($278 million) profit during the fiscal first quarter on the back of strong sales of flat-panel TVs and digital cameras - a big improvement on the 7.3 billion yen loss posted in the same period last year.

"We are proceeding immediately to support this recall," Sony spokesman Takashi Uehara said, adding that Sony batteries powering Sony's Vaio laptops don't have the same problems.

Getting a boost from Sony's woes was Sanyo Electric Co., a major Japanese battery-maker. Sanyo shares climbed 2.16 percent to 237 yen ($2).

Sanyo officials were not available for comment Wednesday because the company was closed for a summer break.

The boost will be welcome as Sanyo shares have been languishing - losing about 40 percent in recent months - as the money-losing manufacturer struggles to restructure and reduce production costs.

In January, Sanyo got a much-needed capital boost from a group of investors led by Goldman Sachs Group Inc., which became the company's top shareholder and took over the nine-member board.

Shares of another rival, Matsushita Electric Industrial Co., which makes Panasonic brand products, jumped 2.71 percent to 2,460 yen ($21; euro16.50).

Like other Japanese electronics makers, battered by competition from cheaper Asian rivals, Matsushita has been overhauling its operations, cutting costs and focusing on profitable sectors, such as semiconductors, flat-panel TVs, auto electronics and products for the network-linked home.

But lithium-ion batteries are also a potential growth area, said Matsushita spokesman Akira Kadota. He declined to say whether Matsushita supplies Dell with the batteries.

Fujitsu Ltd., based in Tokyo, does not make lithium-ion batteries and was still checking to see whether any of its computers use the recalled Sony batteries, said Fujitsu spokesman Masao Sakamoto.

David Gibson, senior analyst at Macquarie Research Equities, said the recall will likely cost Sony somewhere between 25 billion yen and 35 billion yen ($215 million and $300 million), assuming a replacement cost of $50 per unit.

Gibson told Dow Jones Newswires that the damage to Sony is likely to be limited because the batteries make up only a fraction of its massive business.

The problematic lithium-ion batteries could cause the Dell machines to overheat and even catch fire. Round Rock, Texas-based Dell, the world's largest PC maker, announced the recall Monday night.

Battery packs contain cells of rolled up metal strips. During production, crimping the rolls left tiny shards of metal loose in the cells, and some of those shards caused batteries to short-circuit, according to Sony.

The problem affecting the Dell computers lies in batteries manufactured by Sony Energy Devices Corp. based in Fukushima, north of Tokyo, Sony said.

Q & A

Versatility’s Limits on AirPort Express
By J.D. Biersdorfer

Versatility’s Limits

On AirPort Express

Q. Is it possible to connect an external hard drive full of digital music to the U.S.B. port on an AirPort Express base station so I can listen to music from the hard drive through my stereo’s speakers instead of having to play the songs in iTunes on my computer?

A. Apple Computer’s AirPort Express base station, for wireless networking, has three jacks on its underside: an Ethernet port to connect a broadband modem so you can share a high-speed Internet connection with the users on your wireless network, an audio jack and a U.S.B. port.

The audio jack allows you to connect the base station to a stereo system or set of powered speakers with a digital or analog audio cable. Once connected, you can stream music from the iTunes program on your Windows or Macintosh computer over the airwaves and play the songs through the connected audio system.

The U.S.B. port on the AirPort Express, however, is intended for use only with a compatible printer. An article in Apple’s technical database states that the U.S.B. ports on both its AirPort Extreme and AirPort Express base stations are “not for use with other U.S.B. devices, such as broadband modems, speakers, disk drives or keyboards.” The article also states that the U.S.B. port should be used with one printer at a time, and that it also works with the Keyspan Express remote for controlling the music streaming from iTunes.

There are, however, various ways to connect an external hard drive to an AirPort Express network to use for storing files. The AirPort Express discussion boards on Apple’s Web site (http://discussions.apple.com) offer advice from people who have found success with various hardware combinations and configurations on their own networks.

eBay Fuels Growth Of Sole Proprietorships
Leslie Taylor

Online storefronts like eBay have enabled more Americans to go into business for themselves, according to new Census Bureau statistics.

The number of self-employed Americans grew by 1 million, to 19.5 million, between 2003 and 2004. While that represents an increase of roughly 4.7 percent, the number of electronic shopping and mail-order businesses run by sole proprietors (http://www.inc.com/criticalnews/arti...0608/sole.html) increased by 12.7 percent over the same period.

"Our merchant base is mostly sole proprietors," said Amanda Pires, spokeswoman for PayPal (http://www.inc.com/criticalnews/arti...07/paypal.html) , an eBay-owned site that allows individuals and companies to accept and send credit card payments online.

"An individual working alone can create a global businesses using eBay," Pires added. "Sellers can turn over their inventory much faster. They get their money instantly so they can send goods immediately. They no longer have to wait to receive a check and the check to clear before they send their goods."

Online retail was not the only category to post significant gains, however. Other sectors experiencing an increase in self-employment ventures included building finishing contractors (up 22.5 percent), Internet service providers (up 18.7 percent) and nail salons (up 14.7 percent).

Currently, sole proprietorships account for 70 percent of all U.S. businesses and generate $887 billion in annual sales.

Big Musicians Flex Their Muscle With Record Labels

Talent agency The Firm encourages its musicians to cut out the middle man, make more money for themselves, writes Fortune's Devin Leonard.
Devin Leonard

Jeff Kwatinetz, CEO of the Beverly Hills management company known as the Firm, made the rounds to several major record companies with a proposition earlier this year. His client, the rapper-actor Ice Cube, was preparing to record his first album in six years. Did they want to put it out? How could any record company resist?

Ice Cube is a founding father of West Coast gangsta rap. His profanity-laden classics like Lethal Injection and Death Certificate sold millions in the early '90s. Sure, gangsta rap is old school. These days so-called crunk acts like Dem Franchize Boyz are the rage with hip-hop fans. More from FORTUNE

But Cube hasn't been lounging by the pool reading The Source. He's been producing and starring in movies like "Are We There Yet?" and "Barbershop 2: Back In Business." In short, Ice Cube has become a mass-market brand like Snoop Dogg, another Firm client.

There was a catch. Typically, music companies own the records their artists make. After all, they underwrite the costs of production, marketing, and distribution. But Kwatinetz explained that Ice Cube didn't want a traditional record label deal.

The OG (original gangsta) just wanted a music company to distribute his record. The rapper would personally write the check for his production and marketing costs. Since he was taking all the risk, Ice Cube felt it only fair that he own the music and reap all the profit from its sale in the U.S. Kwatinetz says Universal nearly did the deal, but backed out at the last minute. "They feared Ice Cube's success would show that superstar artists with big management firms wouldn't need record labels," he says. (A Universal spokesman says the discussions never got that far.)

In the end, Kwatinetz got EMI's (Charts) Virgin label to distribute Ice Cube's "Laugh Now, Cry Later." It was a big financial gamble for the rapper, but it paid off. "Laugh Now, Cry Later" debuted at No. 4 on the Billboard 200 in June, and it has sold nearly 500,000 copies worldwide. No, those aren't Lethal Injection numbers. But Ice Cube keeps all the U.S. profits. (EMI gets distribution fees and overseas licensing rights.)

Says Kwatinetz: "We have ring-tone checks coming in. We've licensed music to TV shows. We've licensed music to films. It all goes into his pocket."

The rules of the music business are changing fast in the Internet Age, and no manager is trying harder to exploit this than Kwatinetz. Record companies don't like deals like the one he cut for Ice Cube, and until recently they rarely needed to do them.
Direct-to-consumer distribution

The companies were the gatekeepers between the artists and the audience. If you wanted your video played on MTV, you needed a major label. If you wanted your CD displayed at Tower Records, you had to have a big record company. Sure, the company paid you a big advance. Then it would bill you for production, distribution, and marketing costs using accounting methods that would give people in Hollywood pause.

The record companies are no longer so powerful, because artists have more ways to get their music to fans. Garth Brooks sells his albums exclusively in Wal-Mart (Charts) stores and on the retailer's website.

Radiohead's contract with EMI's Capitol label has expired, and the band is in no rush to sign a new one. In July, Thom Yorke, Radiohead's lead singer, released a solo album, "The Eraser," on an independent label. It was promoted on the homepage of Apple's (Charts) iTunes Music Store and became the No. 2 record on the Billboard 200. Who needs a major label when you can do that?

The success of "Laugh Now, Cry Later" raises the same question. Ice Cube didn't need a record company to get radio play. He's Ice Cube, dammit! He personally courted DJs around the country. The rapper also expanded his fan base on the web.

Rob Stone, founder of Cornerstone Promotion, which Ice Cube and the Firm hired to push the album, says he got DJs to urge listeners to check out the rapper's singles on his MySpace page, and the number of Ice Cube's "friends" climbed from 2,000 to 150,000.

Kwatinetz, 41, is cutting other innovative deals for the Firm's music clients, who include American Idol veterans Kelly Clarkson and Taylor Hicks, Jennifer Lopez, and angst-ridden nu-metalists Korn and Linkin Park.

He was the driving force behind a deal in which EMI and Live Nation--the country's biggest concert promoter - paid Korn $27 million to create a separate corporation that oversees and shares in the profits from sales of the band's records, concert tickets, and merchandise.

Jonathan Davis, the band's dreadlocked lead singer, gets to sit at the table with his record company and his tour promoter and make decisions that increase the value of brand Korn. "It's pretty cool how Jeff rigged it all up," he says.

In July, Kwatinetz announced that the Firm was starting an "artist-friendly music company" that would release albums by clients such as actress-singer Mandy Moore and Army of Anyone, a group comprising the remnants of star '90s grunge acts Stone Temple Pilots and Filter.

The terms are similar to the Ice Cube deal. EMI is financing the venture and will distribute the records. The Firm will handle A&R, marketing, and promotion, and split profits evenly with the artists.

David Munns, vice chairman of EMI Music Worldwide, praises Kwatinetz: "He has a burning desire to reshape our industry." But other music-industry people dismiss Kwatinetz's talk about new business models. They say Ice Cube's record sales are nothing to brag about, and, yes, you still need a major label if you want to get anywhere in this business.

Kwatinetz also has a tendency to speak in grandiose terms about plans that don't always pan out. He says the Firm will be the successor to what he describes as "artist-friendly companies" like MCA, the legendary Hollywood talent agency.

He moved the Firm into the television and film businesses with the purchase in 2002 of Michael Ovitz's Artists Management Group for $12.7 million. That won him clients like Leonardo DiCaprio and Cameron Diaz. But the Firm had some tough financial times after the merger. It has also lost some high-profile acts like the Dixie Chicks. Kwatinetz says the Firm will soon be debt-free and is in "amazing" financial shape. But it's a long way from Lew Wasserman's fabled organization.

Kwatinetz, a Harvard-educated lawyer, says he is trying to diversify the Firm into a company that not only manages music clients but can produce and promote their records and oversee publishing, touring, and merchandising. He says this is what record companies did in the 1960s and '70s.

"The most enduring brands were created in that time," he explains. "Those are the brands that still sell concert tickets, that are still out there selling records, whether it is the Eagles, Pink Floyd, or even Chicago. The last time I saw them they had only two original members, and they were horn players."

Record sales became so profitable that the labels were willing to give up their revenue streams from ticket and T-shirt sales. That was great until Napster came along and CD sales plummeted. Kwatinetz argues that now these same companies are so focused on making their quarterly results from album sales that they can no longer build long-term careers for their artists.

"They are in a death spiral," he says. "The record business will shortly be extinct. But the music business, the business of creating music, will not be - because people love music."

All this raises an interesting question: Why is EMI acting as Kwatinetz's enabler, when he is out to show that big acts don't necessarily need big labels?

To get an answer, I visit David Munns at his office in the Capitol Records building on Hollywood Boulevard. The circular tower is a monument to the industry's glory days: Its hallways are decorated with iconic black-and-white photos of Capitol artists like Frank Sinatra, Duke Ellington, and Nat King Cole, many of whom recorded classic albums in the building. If you love music, this record factory is a wondrous place.

Munns tells me that EMI is making a minimal investment in Kwatinetz's record company. (A source familiar with the deal says EMI has committed up to $10 million, and that's only if the Firm meets certain "performance triggers.") "I believe in portfolio management, and that's what I'm doing here," he says. "I'm not going to start a third frontline label like Capitol or Virgin. It's a bet on Jeff Kwatinetz."

It's a risky bet. If Kwatinetz succeeds, who needs Capitol? Then again, the economy has not been kind to record companies. Could it hurt to be out front for once?

Thanks TG!

Has Bush v. Gore Become the Case That Must Not Be Named?
Adam Cohen

At a law school Supreme Court conference that I attended last fall, there was a panel on “The Rehnquist Court.” No one mentioned Bush v. Gore, the most historic case of William Rehnquist’s time as chief justice, and during the Q. and A. no one asked about it. When I asked a prominent law professor about this strange omission, he told me he had been invited to participate in another Rehnquist retrospective, and was told in advance that Bush v. Gore would not be discussed.

The ruling that stopped the Florida recount and handed the presidency to George W. Bush is disappearing down the legal world’s version of the memory hole, the slot where, in George Orwell’s “1984,” government workers disposed of politically inconvenient records. The Supreme Court has not cited it once since it was decided, and when Justice Antonin Scalia, who loves to hold forth on court precedents, was asked about it at a forum earlier this year, he snapped, “Come on, get over it.”

There is a legal argument for pushing Bush v. Gore aside. The majority opinion announced that the ruling was “limited to the present circumstances” and could not be cited as precedent. But many legal scholars insisted at the time that this assertion was itself dictum — the part of a legal opinion that is nonbinding — and illegitimate, because under the doctrine of stare decisis, courts cannot make rulings whose reasoning applies only to a single case.

Bush v. Gore’s lasting significance is being fought over right now by the Ohio-based United States Court of Appeals for the Sixth Circuit, whose judges disagree not only on what it stands for, but on whether it stands for anything at all. This debate, which has been quietly under way in the courts and academia since 2000, is important both because of what it says about the legitimacy of the courts and because of what Bush v. Gore could represent today. The majority reached its antidemocratic result by reading the equal protection clause in a very pro-democratic way. If Bush v. Gore’s equal protection analysis is integrated into constitutional law, it could make future elections considerably more fair.

The heart of Bush v. Gore’s analysis was its holding that the recount was unacceptable because the standards for vote counting varied from county to county. “Having once granted the right to vote on equal terms,” the court declared, “the state may not, by later arbitrary and disparate treatment, value one person’s vote over that of another.” If this equal protection principle is taken seriously, if it was not just a pretext to put a preferred candidate in the White House, it should mean that states cannot provide some voters better voting machines, shorter lines, or more lenient standards for when their provisional ballots get counted — precisely the system that exists across the country right now.

The first major judicial test of Bush v. Gore’s legacy came in California in 2003. The N.A.A.C.P., among others, argued that it violated equal protection to make nearly half the state’s voters use old punch-card machines, which, because of problems like dimpled chads, had a significantly higher error rate than more modern machines. A liberal three-judge panel of the United States Court of Appeals for the Ninth Circuit agreed. But that decision was quickly reconsidered en banc —that is, reheard by a larger group of judges on the same court — and reversed. The new panel dispensed with Bush v. Gore in three unilluminating sentences of analysis, clearly finding the whole subject distasteful.

The dispute in the Sixth Circuit is even sharper. Ohio voters are also challenging a disparity in voting machines, arguing that it violates what the plaintiffs’ lawyer, Daniel Tokaji, an Ohio State University law professor, calls Bush v. Gore’s “broad principle of equal dignity for each voter.” Two of the three judges who heard the case ruled that Ohio’s election system was unconstitutional. But the dissenting judge protested that “we should heed the Supreme Court’s own warning and limit the reach of Bush v. Gore to the peculiar and extraordinary facts of that case.”

The state of Ohio asked for a rehearing en banc, arguing that Bush v. Gore cannot be used as precedent, and the full Sixth Circuit granted the rehearing. It is likely that the panel decision applying Bush v. Gore to elections will, like the first California decision, soon be undone.

There are several problems with trying to airbrush Bush v. Gore from the law. It undermines the courts’ legitimacy when they depart sharply from the rules of precedent, and it gives support to those who have said that Bush v. Gore was not a legal decision but a raw assertion of power.

The courts should also stand by Bush v. Gore’s equal protection analysis for the simple reason that it was right (even if the remedy of stopping the recount was not). Elections that systematically make it less likely that some voters will get to cast a vote that is counted are a denial of equal protection of the law. The conservative justices may have been able to see this unfairness only when they looked at the problem from Mr. Bush’s perspective, but it is just as true when the N.A.A.C.P. and groups like it raise the objection.

There is a final reason Bush v. Gore should survive. In deciding cases, courts should be attentive not only to the Constitution and other laws, but to whether they are acting in ways that promote an overall sense of justice. The Supreme Court’s highly partisan resolution of the 2000 election was a severe blow to American democracy, and to the court’s own standing. The courts could start to undo the damage by deciding that, rather than disappearing down the memory hole, Bush v. Gore will stand for the principle that elections need to be as fair as we can possibly make them.

Until next week,

- js.

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