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Old 14-12-06, 11:19 AM   #1
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Default Peer-To-Peer News - The Week In Review - December 16th, '06


































"In a legislative climate where lawmakers have proposed everything from jail time for p2p developers to letting the RIAA hack people's PCs for distributing copyrighted files, we should resist any kind of content-based blocking that would let them get their foot in the door. That includes even well-intentioned efforts like Cleanfeed." – Bennett Haselton


"Despite a Congress deeply in the pocket of telecom lobbyists, the public banded together to stop attacks on our free and open Internet." - Michael Kieschnick


"The people’s attention to the issue of Net Neutrality is more powerful than any legislation — and this year proves that." – Tim Wu


"As an activist and new media advocate, I am encouraged by our prospects in Congress for protecting the egalitarian spirit of the Internet and all people’s unfettered access to it." – Christopher Rabb


"Industry will be back with their money and phony grassroots groups. But next time around, with a public now well-informed of what’s at stake, we hope Congress will take up broadband policy that advances consumer — not just industry — needs." – Jeannine Kenney


"The potent combination of grassroots support and the facts stopped a bad bill, but the fight for Net Neutrality has only begun." – Mark Cooper


"Winny is built on such high-level technologies. It's a shame that it was condemned as a criminal tool. I think the verdict will leave a problem for the future." – Hisashi Sonoda


"Let me propose a corollary to the small penis rule. Call it the small man rule: If someone offers substantive criticism of an author, and the author responds by hitting below the belt, as it were, then he's conceding that the critic has won." – Michael Crowley


"I’m scoring the mating rituals for today’s society. You can call these parties whatever you want, but it’s really a WASP breeding party." – Tom Finn


"Nous sommes tous des Anne-Sophie Lainnemé!" – French blogger





































December 16th, '06






EU Withdraws Copyright Reform Plan
AP

The European Commission said Wednesday it had withdrawn plans that could end copyright levies on electronic equipment but denied it had done so under pressure from the French government.

Most European countries charge fees on music and video players and blank CDs to compensate artists and copyright holders for legal copying.

The Copyright Levies Reform Alliance - which represents companies from the technology and recording industries - said "outdated and unjust" levies should be phased out where alternative compensation exists, to bring the sector in line with EU copyright law.

The levies are collected by artists' rights groups who distribute them to music and film copyright holders, performers and record companies. In some countries, a portion of the money also supports cultural projects, from sponsoring festivals to paying scholarships. The fees do not cover illegal copies a CD owner makes for other people.

Manufacturers claim these levies unfairly raise the retail price of their products and are unnecessary as digital copyrights are rolled out.

The levies are charged and paid out to artists in 19 of the EU's 25 nations. None is charged in Britain, Ireland or Cyprus, and different plans exist in Greece, Luxembourg and Malta.

The group claims that the increasing use of digital rights management - or DRM - will not plug a gap as it will only cover the electronic version of a song. Artists lose that copyright protection the minute that track is copied onto a blank CD, it said.
http://hosted.ap.org/dynamic/stories...12-13-09-02-34





China Tightens Control Over Online Music
Joe McDonald

China is tightening control over its online music and game industries, ordering distributors to submit all imported products for approval by official censors, the government said Tuesday.

The moves come amid official efforts to step up control over the Internet and other media, both to shield Chinese companies from competition and to suppress material deemed politically sensitive, violent or sexually graphic.

The music controls are meant to encourage growth of a "civilized and healthy" Internet and to protect Chinese companies that have lost market share to foreign rivals, the Culture Ministry said on its Web site.

The rules apply to Web sites and mobile phone companies that distribute music, the ministry said. It said distributors of Chinese music must register but won't be required to submit products for approval.

The rules also ban the establishment of foreign-financed music distributors, the ministry said.

In online games, distributors must obtain approval to release imported titles and must file monthly reports confirming that operators haven't added forbidden content, the official Xinhua News Agency said. It cited a notice by the Press and Publication Administration.

China has 23 million online game players, up from 13.8 million in 2003, according to Xinhua. It said revenues this year are expected to reach $850 million.

The crackdown was prompted by "a rash of problems with imported online games, some of which contain sensitive religious material or refer to territorial disputes," Xinhua said. It said some were criticized as pornographic or too violent.

Regulators said distributors concealed the content of the games when applying for approval, and operators sometimes added improper content, Xinhua said.

It gave no details about the religious and territorial issues, but Beijing is sensitive to references to Islam and Taiwan, the self-ruled island that the mainland claims as its own territory.

Officials complain that the Internet and video games give Chinese children access to violent or sexual material and encourage them to waste time that should be spent on school work.

The government has restricted foreign content on television in recent years to protect Chinese production houses and to limit public exposure to political ideas and pop culture from abroad.

A regulator told The Financial Times in comments published last week that Beijing has imposed a moratorium on foreign investment in Chinese film and television production houses.

The government earlier imposed a similar temporary ban on new Chinese-foreign magazine joint ventures.
http://hosted.ap.org/dynamic/stories...12-12-15-18-16





Heh, women

Federal Judge: Making Files Available for Download = Distribution
Eric Bangeman

The RIAA's argument that making files available for download constitutes copyright infringement received an important boost from a federal judge. In an decision delivered in October and first reported over the weekend, Judge Ann Aiken found that making songs available for download via a P2P application such as Kazaa is equivalent to distributing the files and forms a sufficient basis for a claim of copyright infringement, the first time that a judge has made such a ruling in a file-sharing case.

The case in question, Elektra v. Perez, follows the pattern of the numerous other file-sharing lawsuits brought by the RIAA. After MediaSentry discovered a number of songs in a Kazaa user's download folder, the RIAA filed a "John Doe" lawsuit which was supplanted once the defendant, Dave Perez, was identified by his ISP as the owner of the account allegedly used to share music.

What constitutes distribution?

In his response, Perez denied the accusations of file sharing and said that even if he was responsible for the "perez@kazaa" account, merely making the files available in a shared folder for other Kazaa users falls short of infringement. The argument echoes that made in many other file-sharing cases, including Elektra v. Barker: distribution does not take place until someone actually downloads one of the songs from a Kazaa share, and that the RIAA would have to show that someone illegally downloaded the file in order to demonstrate that copyright infringement occurred. In the Elektra v. Barker case, the EFF filed an amicus brief outlining its position that sharing music files does not infringe the "distribution right" granted to copyright holders.

It's a difficult question, due in large part to the copyright law's predating the "digital age." As written, US copyright law explicitly says that in order to "distribute" a copyrighted work, an actual, physical exchange of a material object must take place. The EFF and other groups have urged the courts to define "distribution" as necessitating involving physical objects. Oddly enough, that position also embraces the pre-Internet concept of "distribution," even though most would agree that the iTunes Store and other online music services selling purely digital goods engage in the authorized distribution of copyrighted works.

Perez, the EFF, and others might use libraries to illustrate their arguments. A public library has a wide selection of copyrighted works available for patrons to use, read, watch, listen to, and even copy, within limits. However, the library is not responsible for what its patrons do once they borrow a book or DVD. In other words, its's not the collection itself and public access to it that causes infringement, it's the actions of those who use items in the collection. There are special provisions protecting libraries from the actions of their users, but online users may be responsible for what others do, should they even make it possible for others to get access to copyrighted materials.

Judge Aiken ruled in favor of the RIAA. In her order, the judge noted that in a copyright infringement case, the plaintiff needs to do two things: demonstrate ownership of the material and show that the party accused of infringement "violated at least one exclusive right granted to copyright holders under 17 U.S.C. § 106." Making songs available for download fulfills the second requirement, wrote Judge Aiken.

"[P]laintiffs' Amended Complaint refers to 'Exhibit B' attached to the complaint, which allegedly represents music files being shared by user 'perez@KaZaA' at the time plaintiffs' investigator conducted the investigation... I find that Exhibit B, in the context of the allegations in the Complaint, supports plaintiffs' allegation that defendant made copyrighted materials available for distribution," wrote Judge Aiken. "In sum, plaintiffs' amended complaint alleges the necessary elements of a copyright infringement action pursuant to the Copyright Act"

This appears to be the first instance in which a judge presiding over a file-sharing case has ruled that having a shared folder available on Kazaa constitutes copyright infringement. Although that particular argument has been widely used in other file-sharing cases, Judge Aiken's ruling may have little effect on those lawsuits, as the dismissal without prejudice significantly lessens the likelihood that the opinion will be precedent setting.

Judges have yet to rule on the other defenses still in play in file-sharing cases, including arguments that the settlement reached between the RIAA and Kazaa bars recovery of any additional damages from file-sharing defendants and that statutory damages should be capped at $2.80 per song. Just last week, another RIAA defendent sued Sharman Networks for deceptive marketing, saying that the Kazaa application made her music collection available for downloading without her knowledge.

Judge Aiken also denied Perez's request for attorney's fees. Three of his children who have reportedly admitted using Kazaa have been added to the original lawsuit as defendants.
http://arstechnica.com/news.ars/post/20061210-8393.html





Famous P2P User Fined in France
Nate Anderson

In the US, peer-to-peer file-swappers have had two choices when it comes to dealing with RIAA prosecutions: cough up a few thousand dollars to make the problem go away, or claim that IP numbers don't prove a thing and have your case dismissed. But what happens in, say, France? 29-year-old Anne-Sophie Lainnemé just found out.

Lainnemé was one of 50 consumers charged with copyright infringement back in 2004 for illicitly downloading hundreds of files using P2P networks. Instead of facing her trial quietly, Lainnemé became a poster girl for the P2P generation, appearing in magazines and newspapers to defend her actions.

She was still doing so at her trial in October of this year, according to France 2. Lainnemé told reporters, "I downloaded albums to discover new artists and to buy their albums or to go see them in concert," adding that she had no intention of causing harm.

Her lawyer, Bernard Lamon, claimed that his client's actions did not harm music companies. "Very serious studies have been done which demonstrate that downloading has no negative influence on the music industry," he said.

The court recently ruled that Lainnemé owed €2,225 (nearly $3,000) to two French rights organizations that sued her, but issued a deferred sentence for a €1200 fine. If she doesn't get in trouble again for the same offense, she won't have to pay. This was quite a moderate decision, considering the fines she could have been facing, but it's still a lot of money.

Lainnemé's case has attracted plenty of attention in France, where many young people are upset that she has been targeted for such a common activity. As one blog post put it, "Nous sommes tous des Anne-Sophie Lainnemé!" ("We are all Anne-Sophie Lainnemé!")

Such crackdowns happen less often in other countries than they do in the US, but they do still happen and, in some places, are poised to increase. In the UK, for instance, the newly-released Gowers Review report has concluded that the country needs stricter penalties for online infringement, along with a streamlined legal process for dealing with violations.
http://arstechnica.com/news.ars/post/20061206-8370.html





French Consumer Group Files Complaints Against HP
Jeremy Kirk

A French consumer group has filed three lawsuits against Hewlett-Packard Co. and two electronics retailers concerning the sale of computers with preloaded software.

HP's consumer PC offerings are sold with Microsoft Corp.'s Windows OS, said Alain Spitzmuller, legal affairs director for HP France.

The group, the Union Fédérale des Consommateurs-Que Choisir, (UFC) alleges consumers frequently lack the option of buying "bare" computers without software. UFC said it wants consumers to be able to choose the software for their machine and get reimbursed for purchasing an OS they did not want.

UFC contends the packaging of both hardware and software together violates a French law that prohibits linking the functionality of a product to another product.

HP, which this year overtook Dell Inc. as the world's top PC maker, disputes the claim. The company is not in violation of the law because the OS is an integral part of the PC, Spitzmuller said.

"The PC without an OS is not a product because it doesn't work," Spitzmuller said. "We believe the market is for products that work."

French courts have rejected two civil suits filed by individuals against HP that were founded on the same claim as UFC, Spitzmuller said.

Included in the complaints are retailers Auchan and Darty. The complaints were filed Thursday in courts in Paris, Bobigny and Nanterre, said Gaëlle Patetta, UFC legal director.

Spitzmuller said the judicial process will take months.
http://www.itworld.com/Comp/1214/061215frenchhp/





SanDisk Shrugs off Berlin Court Ruling in MP3 Spat

Memory card and MP3 music player producer SanDisk said on Thursday a legal battle with MP3 patent holders is ongoing, shrugging off a statement from a patent pool firm claiming a judicial victory.

The Societa Italiana per lo Sviluppo dell'Elettronica (Sisvel), which collects royalties for audio coding technology used in MP3 players and set-top boxes, has accused SanDisk of not paying for the technology.

SanDisk's MP3 players were seized by German law enforcement agencies at the IFA electronics trade show in Berlin in September. Sisvel said in a statement that a judge in the German regional criminal court of Berlin had ruled last week that the seizure had been legal and that there had been sufficient grounds for suspicion of deliberate patent infringement.

A Sisvel representative said the judge had only ruled on the legality of the seizure, and not on the infringement itself.

SanDisk said it uses different technology and believes it does not have to pay royalties to Sisvel and its partners. Sisvel also collects royalties on behalf of other firms like Philips Electronics of the Netherlands and France Telecom.

"In a litigation currently pending in the Mannheim District Court, SanDisk is showing that its MP3 players operate a technology which is completely different from a certain audio data transmission and reception technique that has been patented for Philips and others many years ago," SanDisk said in a statement.

"An expert opinion from one of the founders of MP3 digital-audio compression substantiates SanDisk's position. SanDisk is not infringing any patent in the pending litigation," it added.

A SanDisk representative in Europe said a ruling was expected in March or April next year.

SanDisk, which is a distant second to Apple in the digital-music player market, is the world's leading maker of flash memory data storage cards used in digital cameras and mobile phones as well as MP3 players.
http://news.com.com/SanDisk+shrugs+o...3-6143792.html





P2P Software Inventor Convicted
Harumi Ozawa

A JAPANESE court has convicted the inventor of popular file-swapping software for copyright violations but refused to jail the programmer.

Isamu Kaneko, 36, created the "peer-to-peer" Winny software, which lets users exchange files such as computer games and movies over the internet for free.

Kaneko, who was a research assistant at Tokyo University until his arrest in 2004, was ordered to pay a ¥1.5 million ($16,000) fine in Japan's first ruling on file-sharing software.

But the Kyoto District Court turned down a call from prosecutors for a one-year prison sentence for Kaneko, who pleaded not guilty.

Judge Makoto Himuro said in the ruling Wednesday that Kaneko "had realised the software would be widely used in its form to violate copyrights."

The judge said nearly 90 per cent of files swapped by Winny are illegally copied.

But he also showed leniency toward the programmer and said the defendant "had seen the necessity and possibility to construct a new business model as an engineer."

Kaneko, despite escaping jail, said he would appeal to a higher court.

"I'm disappointed in the verdict. It would hold back the drive to develop technology," he said.

Kaneko, who is said to have designed his first computer program while in elementary school, has become a cause celebre for Japanese internet buffs.

He is known in cyberspace as "47" - a reference to his posting on a message board declaring Winny's creation - and has amassed thousands of dollars in donations for his legal defense.

Winny, which can be obtained for free on the internet, is reportedly still used by up to 450,000 computers in Japan.

Unlike US-based Napster, the renegade service that amassed as many as 70 million members before being shut down by the courts in 2001 for copyright violations, Winny does not rely on internet servers.

It allows the anonymous exchange of files between two computers, facilitating the transfer of music and movie files - and obscene content.

But Winny has also been said to suffer programming flaws vulnerable to virus and has been the source of a series of information leaks, including from a number of computers belonging to government and company officials who used the software privately.

Prosecutors had argued that Kaneko intended to destroy the system of copyright protection by inventing and releasing the software.

The defense counsel countered that the programmer should not be responsible for the illegal acts committed by Winny's users.

Hisamichi Okamura, a lawyer who specialises in the IT industry, said the verdict gave a mixed assessment of Winny's legality.

"The sentence doesn't make it clear whether Winny is a technology like a kitchen knife - a tool that can be used either for cooking or killing - or a gun," Okamura said.

But Hisashi Sonoda, a professor at Konan Law School, expressed concern that the verdict would harm software development.

"Winny is built on such high-level technologies. It's a shame that it was condemned as a criminal tool," he said. "I think the verdict will leave a problem for the future."
http://australianit.news.com.au/arti...nbv%5E,00.html





Copyright Pirates Sentenced in Hong Kong, Japan

Defendants receive jail time and a fine for copyright infringement
Steven Schwankert

Defendants convicted in copyright infringement cases in Hong Kong and Japan were sentenced this week, resulting in jail time and a fine, respectively.

In Hong Kong, Chan Nai-ming lost an appeal in Tuen Mun Magistrates' Court, after he was convicted in November of illegally distributing copyrighted material using a peer-to-peer network (p-to-p), specifically BitTorrent's file sharing software. Chan began serving his three-month jail sentence on Dec. 12, the Motion Picture Association (MPA) said Wednesday.

Chan used BitTorrent software to distribute Hollywood movies, but did not use a BitTorrent-affiliated or operated network to do so. The case was the first of its kind, with a defendant tried and convicted for illegal distribution over a p-to-p network.

Originally the pirates' software of choice, BitTorrent is making itself into a legitimate competitor in the online content business. Late last month, the company announced free and fee-based content distribution deals with a number of major Hollywood film and television studios.

On Wednesday, the Kyoto District Court found Isamu Kaneko, the developer of the "Winny" p-to-p system popular in Japan, guilty of aiding and abetting the infringement of Japan's Copyright Law, the MPA said. Kaneko was fined ¥1.5 million ($12,832), the MPA said.

The MPA estimated that its member companies lost $6.1 billion worldwide in 2005 to illegal reproduction or downloading of movies. In Asia-Pacific, it lost $1.2 billion. The figures are based on what the MPA projects consumers would spend on cinema tickets, DVDs, and other film-viewing opportunities if pirated film products were not available.

The MPA is the international arm of the Motion Picture Association of America, the American film industry's lobbying group. It is comprised of Hollywood's largest film studios: Buena Vista International; Paramount Pictures; Metro-Goldwyn-Mayer; Twentieth Century Fox International; Sony Pictures Releasing International; Warner Brothers International Theatrical Distribution; and Universal International Films.
http://www.infoworld.com/article/06/...pirates_1.html





Man Gets 8 Years for Computer Sabotage
AP

A former UBS PaineWebber systems administrator was sentenced Wednesday to eight years and one month in prison for attempting to profit by detonating a "logic bomb" program that prosecutors said caused millions of dollars in damage to the brokerage's computer network in 2002.

Roger Duronio also was ordered to pay $3.1 million in restitution to his former employer, now known as UBS Financial Services Inc., part of the Swiss banking company UBS AG.

Duronio, 64, of Bogota was put under house arrest by U.S. District Judge Joseph A. Greenaway Jr. until he is assigned to a prison. He had been free on $1 million bond.

The term was the maximum under sentencing guidelines, which pleased U.S. Attorney Christopher J. Christie.

"This was a fitting, appropriately long sentence," Christie said. "Duronio acted out of misplaced vengeance and greed. He sought to do financial harm to a company and to profit from that, but he failed on both counts."

A message left for Duronio's lawyer, Christopher D. Adams, was not immediately returned.

A federal jury in July convicted Duronio on one count of securities fraud and one count of computer fraud, and acquitted him on two counts of mail fraud.

Prosecutors presented evidence that Duronio was angry with the company, where he had worked for nearly two years in Weehawken, because he expected an annual bonus of $50,000 but got $32,500.

Evidence showed Duronio ultimately lost $23,000 he invested in a stock market bet against UBS because the ploy failed to reduce the company's share price.

Duronio planted the logic bomb in some 1,000 of PaineWebber's approximately 1,500 networked computers in branch offices around the country and resigned from the company Feb. 22, 2002, prosecutors said.

That day, Duronio went to a broker and bought what are called "put options" for UBS stock, prosecutors said. Those give the purchaser the right to sell shares for a fixed per-share price, so the lower a stock falls the more valuable the option becomes.

Duronio placed his last trade on March 1, 2002, and the logic bomb attack took place three days later, deleting files on 1,000 computers, prosecutors said.
http://www.siliconvalley.com/mld/sil...l/16232101.htm





Mozart's Entire Musical Score Now Free on Internet
Michael Roddy

Mozart's year-long 250th birthday party is ending on a high note with the musical scores of his complete works available from Monday for the first time free on the Internet.

The International Mozart Foundation in Salzburg, Austria has put a scholarly edition of the bound volumes of Mozart's more than 600 works on a website.

The site allows visitors to find specific symphonies, arias or even single lines of text from some 24,000 pages of music.

"We had 45,000 hits in the first two hours...we would not have expected that," program director Ulrich Leisinger told Reuters in a telephone interview.

A user who types in "Pamina" from Mozart's opera "The Magic Flute" will see the music for all five arias she sings, as well as critical texts discussing those passages.

The version appearing on the Internet is a digitized copy of the "New Mozart Edition" published by Barenreiter, of Kassel, Germany.

It is considered the "gold standard" of Mozart editions and Leisinger said Barenreiter was paid $400,000 for the digital publication rights.

The financial backing came from the Packard Humanities Institute of Los Altos, California.

"We hope we will be able to convince other people besides us to present their original materials online as well," he said.
http://today.reuters.com/news/articl...SIC-MOZART.xml





P2P Traffic Streams to BitTorrent
Simon Aughton

BitTorrent is fast becoming the leading p2p network as video surpasses music as the most popularly shared content medium, according to a survey by iPoque.

Indeed figures from its analysis of German Internet usage show that BitTorrent has already usurped eDonkey in terms of the amount of data traffic that each protocol generates: BitTorrent 53 per cent and eDonkey 43 per cent. Statistics from the rest of Europe show eDonkey still slightly ahead, but the trend is towards torrents.

So dominant are the two networks, that others barely register: the third most popular, Gnutella, accounted for less than three per cent of traffic during the June to October 2006 period of the survey.

The rise of BitTorrent mirrors the increase in the sharing of movies and television shows, which torrents are better equipped to handle. Where p2p was once the preserve of music sharers (and pornographers), film and TV now make up more than a third of the number of files being shared on BitTorrent and 22 per cent on eDonkey. That said, there are still many more files available on eDonkey - and much more pornography - than there are on BitTorrent. The survey found 250,000 different eDonkey files as opposed to just 56,000 on BitTorrent.

While video is therefore the chief reason for the rise in the popularity of torrents, iPoque suggests it is not the only one. Many file sharers, it says, have mistakenly assumed that BitTorrent offers greater anonymity than eDonkey and therefore greater security and greater protection from probing music and movie industry software designed to locate sharers to subject to legal action. iPoque also notes that BitTorrent software has also improved, most notably in the form of the Azureus client, which, it says, provides similar usability to eMule, the most popular eDonkey software. And finally, there are far fewer fake torrents than there are fake files on eDonkey, some of which are mis-named to hide pornography and computer viruses and other malicious code.

'This is particularly common for current titles such as movies or audio CDs,' the report concludes. 'The search for titles is not an integral part of BitTorrent. Instead normal websites are used to offer and categorise titles. These repository sites often provide a rating scheme for the offered files, which significantly reduces the fake problem. It appears that the average quality of offered files is higher for BitTorrent than for eDonkey.'

But perhaps the most significant finding of the research is that p2p activity continues to increase. Between June and October the amount of p2p data traffic rose by 10 per cent, despite the PR and legal efforts of both the music and movie industries.

iPoque's survey was based on aggregated statistics on the traffic generated by P2P networks plus an analysis of the content of 30TB of files.
http://www.pcpro.co.uk/news/100089/p...ittorrent.html





Squeezing Money From the Music
Jeff Leeds

“Konvicted,” a new CD from Akon, promised to be one of the year’s big sellers when it appeared in record stores last month. Buoyed by two of the hottest singles in the country, Akon, a silky-voiced R&B singer, even had the most-viewed page among major label acts on MySpace.com.

Sure enough, the album opened big, but in a way that reflected the tenuous transitional state of the record business. “Konvicted” sold more than 283,000 copies in its first week — enough to start at No. 2 on the Billboard chart. On top of that were the album’s two singles, which at digital music services like iTunes together sold more than 244,000 copies that week. And a week later, snippets of the same songs captured two of the top three spots on a new chart tracking sales of ring tones, selling 269,000 of them combined.

As a recording that has sold modestly, but in an array of forms, Akon’s music illustrates the new definition of a hit in pop music — instead of racking up sales of half a million CD’s or more in the first week, it arrives with solid if less impressive sales, but with several revenue streams.

It is an example of the business model that the retrenching music industry is embracing as sales of the CD, its mainstay product for two decades, slowly decay.

As a result, the big record companies, whose fortunes are still overwhelmingly tied to CD sales, are taking a far more expansive view of how to carve out pieces of the music economy, which by some estimates runs as high as $75 billion, including recording sales, music publishing, concert ticket and merchandise sales and other sources of revenue.

Lately, the major labels have in effect tried to move into the talent management business by demanding that new artists seeking record contracts give their label a cut of concert earnings or T-shirt and merchandise revenue — areas that had once been outside the labels’ bailiwick.

“They’re all starting to ask for the same things,” said Theo Sedlmayr, an entertainment lawyer based in New York who represents acts like 50 Cent.

There has also been a scramble to squeeze revenue from other unconventional sources, including amateur videos posted to YouTube that incorporate copyrighted songs. Universal Music threatened to withhold its huge music catalog from Microsoft’s new digital music service unless it received a royalty of more than $1 on each sale of the technology giant’s Zune portable music player.

The labels are hoping that these moves will help put the industry back on track after a slide in overall sales in five of the last six years. But amid the holiday shopping season, which typically accounts for a third or more of the industry’s annual sales, many are not sure whether to be cheered or disenchanted by the new order of business.

With some holiday sales still to be made and tabulated, album sales are down almost 5 percent this year, according to Nielsen SoundScan data. Sales at digital music services like iTunes continue to rise, but the pace of the increase has slowed compared with last year.

Still, if every 10 individual tracks sold online are counted as albums, overall recorded music sales are off only about 0.7 percent this year. While that is far from last year’s 4 percent drop, it represents a decline from early summer, when overall sales were running ahead of last year.

All that indicates how sales of downloaded individual songs are eroding the underpinnings of the CD and remixing the industry’s economics. More and more, music companies are looking toward sales of bite-size units — individual songs typically sell for 99 cents — instead of full albums that may cost $15 at record shops. Barring a late surge in CD sales, more digital tracks than CD’s will be sold in the United States for the first time this year.

Sales of digital singles and ring tones now represent “more than a Band-Aid,” said Steve Rifkind, president of the SRC record label, which released Akon’s album through a partnership with Universal, a Vivendi company that is the industry’s largest. But “it’s not going to offset people taking music” through illicit file-sharing online or burning CD’s for friends, he said.

CD sales are still the single biggest source of revenue, and the picture there is mixed. The EMI Group of Britain, third largest of the four major record corporations, said in reporting its half-year results in November that recorded-music sales declined more than 5 percent, though a drop in CD sales and net prices had been “slightly” offset by digital revenue. The Warner Music Group, the No. 4 company, said that over all, recorded music sales for the fiscal year rose almost 3 percent, to $3 billion, and that digital revenue had more than offset the drop from CD’s.

Yet digital song sales are not fueling a recovery as quickly as some thought — in fact, sales have been sputtering. After rising 150 percent last year, sales of digital downloads have increased less than half as much this year.

Some executives suggest that early adopters of iPods and similar devices may have dabbled with paid downloads enough to drive sales initially, but now tend to fill them with music from their existing CD collections or copy from friends rather that stock up on new song purchases.

Still, investors appear to be valuing the big music companies more than they did in the first years of the slide. Doug Morris, Universal Music’s chairman, said “the big picture of digital music trumps the fears of piracy — that’s why the companies are becoming more valuable.”

Analysts, though, note that shifting toward a mostly digital — and potentially more profitable — business remains very tough. Richard Greenfield, who tracks music sales at Pali Research, projects the industry to be flat over all for the next two years.

This decline has been spurred by a series of factors, like illicit file-sharing online, CD burning, high prices and competition from products like DVD’s and video games. Many retailers and music executives also attribute the industry’s sluggishness to a lack of high-wattage talent.

The industry has “a lot of bands that people care about for five minutes and then move on,” said Joe Nardone Jr., owner of the Gallery of Sound chain, with 10 stores in northeastern Pennsylvania.

Consumer fickleness has become evident on the Billboard charts, where the old blockbuster album appears to be a dying breed. More songs have come and gone from the No. 1 place on the magazine’s national album sales chart this year than in any other year since the industry began computerized tracking of sales in 1991. Analysts say that reflects the lackluster staying power even among songs in demand.

Most recently, “Kingdom Come,” a hotly anticipated CD from the briefly retired rap superstar Jay-Z, sold a healthy 680,000 copies in its first week — then slid 79 percent last week, its second week on the charts. In recent weeks, acts including Diddy, Danity Kane and Ludacris briefly held sway at No. 1 before plummeting. In July, Johnny Cash reached the top place for the first time in 37 years, with a posthumous CD. It sold just 88,000 copies, the lowest total for a No. 1 debut in SoundScan history.

But as the sales of albums drop, the major labels are still adopting strategies to squeeze more revenue though that may mean settling for $2.50 ring tones instead of CD’s priced at six times that. Indeed, acts with towering singles regularly generate more money from downloads or ring tone sales than from their comparatively slow-selling CDs these days — as the rapper Jibbs did with “Chain Hang Low.”

Mr. Rifkind, the SRC executive, said, “I find myself, when I’m signing a record deal now, asking, ‘Can this sell as a ring tone?’ ”

But ring tones, which have been projected to generate $600 million in nationwide sales this year, are only part of the puzzle. Many executives are now betting that even more money can be generated with a wider range of individual products tied to the same recording, especially in digitally advanced markets. In Asia, where sales of music to mobile phones outpace CD sales in some places, labels may offer more than 400 different items in connection with a specific album, including ring-back tones — snippets of music that play to callers while they wait for their call to go through — or “color call” tones, background songs that play while someone talks on the phone.

To show the promise of digital sales for individual albums, Warner Music executives provided cost-analysis data from a successful hip-hop record released in the last 12 months. The information was disclosed on condition that the performer not be identified in The New York Times.

According to the data, sales of the CD accounted for roughly 74 percent of domestic revenue the company took in from the project, or roughly $17 million. But sales of an array of digital products added almost $6 million — about two-thirds of that came from ring tones of hit singles. The figure also included roughly $330,000 from mobile phone games related to the performer and $94,000 in sales of cellphone “wallpaper,” or screen backgrounds.

Yet the industry as a whole still remains uncertain — and in the meantime must try to promote digital sales at the same time it seeks to preserve the CD and brick-and-mortar retail shops.

Mr. Nardone, for one, said the industry must consider lowering CD prices to allow retailers to compete with Apple’s industry-leading iTunes service, where full-length digital albums typically sell for $9.99. That is less than his wholesale cost for CD’s. Sales at his chain are running about 9 percent behind last year, he said.

“Everybody’s still hoping for the best,” Mr. Nardone said. “But the best ain’t what it used to be.”
http://www.nytimes.com/2006/12/11/bu...a/11music.html





iTunes Sales 'Collapsing'
Andrew Orlowski

The leading DRM digital download service, Apple's iTunes, has experienced a collapse in sales revenues this year according to analyst company Forrester Research.

Secretive Apple doesn't break out revenues from iTunes, but Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good.

While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring's rebound wasn't repeated this year.

And it isn't just Apple's problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole.

Speaking to The Register, Forrester analyst Josh Bernoff warned against extrapolating too much from the figures.

It may reflect a seasonal bounce that hasn't yet manifested itself. However, it might not.

"There's no indication of enormous growth coming," he told us. "When you look at this alongside the SoundScan numbers, you may ask 'Where's the part were we're supposed to get excited?'."

The ominous trend comes despite healthy growth for digital music players - iPod sales quadrupled in the period monitored by Forrester - and Apple's growing inventory - the company has added videos and movies to its established inventory of music downloads and audiobooks.

Three times a year

Forrester revealed some fascinating details about iTunes purchasing habits. Some 3.2 per cent of online households (around 60 per cent of the wider population) bought at least one download, and these dabblers made on average 5.6 transactions, with the median household making just three a year. The median transaction was slightly under $3.

No one in music gets rich from a stampede of interest like this.

(The figures don't include gifts redeemed via the iTunes Store. While Apple can argue this does not reflect the volume of transactions taking place, it gives a more accurate picture of what customers are actually prepared to pay for.)

Bernoff makes a fascinating comparison between the public's appetite for buying CDs over the internet, and its lack of appetite for DRM songs. Online individuals (rather than households) bought 1.7 CDs over the internet per quarter.

"The comparatively modest iTunes numbers suggest that consumers are still spending the bulk of their music budget $14-at-a-time on shiny discs," he writes.

"iTunes sales are not cutting into CD sales," he elaborated to us, "they're an incremental purchase at best.

"There's a problem here. CD sales have fallen 20 per cent over five years. The message here is not that CD sales are coming back, the ability to obtain pirated music is now so widespread the DRM looks to consumers more like a problem than a benefit."

It may be slightly premature to declare the DRM-era dead. But the signs are that it may be entering its final days.

Forrester and Nielsen's figures merely confirm that what the industry is losing in falling CD sales, it isn't gaining in DRM downloads.

Forrester Bernoff's attributes some blame on the technological restrictions - iTunes' DRM songs only play on Apple's iPod player.

At the In The City music convention held in Manchester in October, Columbia UK boss Mike Smith predicted music would be DRM-free within 12 months. Sony BMG UK, which owns Columbia, has declined to elaborate on the comments - which were not widely reported at the time. Perhaps more significantly, recent personnel changes at Universal Music, the 800lb gorilla, also suggest a more pragmatic strategy.

So if not DRM, then what?

In the UK, the major labels, represented by the British Phonographic Institute (BPI), have joined discussions on a blanket license for digital downloads in the UK. Discussions are taking place under the Chatham House rule. Although much of the infrastructure for a blanket license has yet to fall into place - the counting mechanisms and collection agencies have yet to be agreed upon - the UK makes a potentially promising experiment for a digital music blanket model.

UK consumers can take up free broadband offers from Sky and Orange, among others. This potentially removes one of the key objections to a flat fee - the fact that it's a compulsory payment for broadband users. It's increasingly feasible that a blanket license would be absorbed by UK consumers at little or no extra charge - simply becoming part of a competitive monthly tariff, only allowing the consumer to share music freely, and not be sued for copyright violations.

And while Andrew Gowers, whose Treasury report on intellectual property was published last week, passed on giving the blanket license moves his specific endorsement - he said it was too early to judge - he certainly helped the cause in one important way. Gowers advocated the establishment of a database of copyright material. Such a database is essential to managing how the pot of money raised through a blanket license is eventually distributed.

Two years ago blanket license advocate Jim Griffin predicted that 99 cents per song was "both too high and too low".

"It's too low to pay for the burden of a developing artist, and it's too high to fill an iPod," he predicted; while the approach wouldn't catch on with the public, it would cause significant harm to the industry.

It's significant that so many music stakeholders are now discussing Jim's long-favoured approach - a bundle - rather than placing any more faith in a route that relies on technological counter-measures.

Peter Jenner, Billy Bragg's manager, recently reflected here on business models that would arise after a blanket license. It's well worth a read. (http://www.theregister.co.uk/2006/11/03/peter_jenner/)
http://www.theregister.co.uk/2006/12...oads_flatline/





Are iTunes Sales Up Or Down?

Market researcher ComScore refutes iTunes sales are down, saying they're up 84%.
Antone Gonsalves

Another market research firm is refuting media reports that Apple Computer's iTunes music store is in trouble, claiming that sales on the site have risen 84% compared to last year.

ComScore Networks issued its report Thursday, one day after Forrester Research said several media organizations had gotten the story wrong when they reported that iTunes sales had plummeted 65% in the first half of the year. Those reports were based on a recent Forrester study that the researcher says was misinterpreted.

But while Forrester claimed that iTunes sales were leveling off at roughly 20 songs per iPod, Apple's digital music player, ComScore's research showed that in the first three quarters of the year, revenue on iTunes soared by 84%. In addition, the number of transactions jumped 67%, and the amount spent per transaction was up 10%.

ComScore also found that the number of unique visitors to iTunes had increased 85% year-over-year in November to 20.8 million.

"The reason to put this out is to contrast our numbers with reports saying iTunes' death is pending," ComScore analyst Michael Rubin says. "Revenues grew a robust 84%, year over year, and that's pretty healthy growth."

While Forrester wouldn't argue about iTunes' general health—the site sells about $1 billion worth of songs a year—it would take issue with the growth estimates. Based on data pulled from credit-card transactions, Forrester found that Apple has sold about 20 songs per iPod since the digital music players went on sale.

The erroneous media reports were based on a sampling of transactions that showed a sales decline. Forrester, however, said the sample was too small to accurately determine performance.

ComScore based its findings on the transactions and browsing behavior of 1 million consumers who have given permission to be monitored. The sales findings were based on 8.5 million transactions.

ComScore pointed out that its findings aligned closely with a report from Gene Munster, analyst with investment banker Piper Jaffray. Munster says the number of songs sold per week on iTunes had risen 78% in the first nine months of the year, compared with the same period a year ago.

"Contrary to recent reports suggesting sales on iTunes are declining rapidly, our analysis of Apple company data shows strong growth year over year," Munster says. "With less than 5% of music purchased online, this market will go through massive growth in the next several years."

But Forrester was less confident about the state of online music, saying that as the largest online seller, Apple's leveling off of sales was an indication that even at 99 cents a track, most consumers still aren't sold on the value of digital music. Also, iTunes' annual sales don't nearly make up for the drop in CD sales in the United States alone, which are down $2.5 billion. Still, Forrester noted iTunes is meant as a complement to the players, with the players making the bulk of the money in the digital music business.
http://www.informationweek.com/news/...leID=196604330





Gates: Digital Locks Too Complex

Microsoft boss Bill Gates has told a group of influential bloggers that copy protection for digital music and video is too complex for consumers.

Mr Gates was speaking to an invited party of bloggers and web developers at Microsoft's Seattle headquarters.

Digital Rights Management (DRM), which is used to stop copying, is a big issue for some people who feel it limits what they can do with legally bought files.

"DRM is not where it should be," said Mr Gates, reported blogger Steve Rubel.

"In the end of the day incentive systems (for artists) make a difference," said Mr Gates.

"But we don't have the right thing here in terms of simplicity or interoperability," he added.

His comments were reported on the Micro Persuasion technology blog, and the visit was blogged by the other attendees.

Microsoft is one of the biggest exponents of DRM, which is used to protect music and video files on lots of different online services, including Napster and the Zune store.

Blogger Michael Arrington, of Techcrunch.com, said Bill Gates' short-term advice for people wanting to transfer songs from one system to another was to "buy a CD and rip it".

Most CDs do not have any copy protection and can be copied to a PC and to an MP3 player easily and, in the United States at least, legally.

DRM critics

In the UK it is illegal to make personal copies of CDs, although the music industry has made clear it will take no action against people copying their legally bought CDs to their computers or music players.

Critics of DRM argue that the tools limit the value of downloaded music or video files because of the restrictions imposed to try to prevent copying.

They say that DRM is routinely circumvented and that different competing standards cause confusion for consumers.

Suw Charman, of the Open Rights Group, said it was a "bit rich of Bill Gates to make his comments given how much DRM is stuffed into Windows Vista", the new operating system from Microsoft.

"The problem with DRM is that it is very anti-consumer," she said.

"It is bully-boy tactics by the media industry," she added.

But backers of DRM argue it gives artists an assurance that their work is being protected.

Ms Charman called for more information for consumers when they buy digital files and CDs.

"Often consumers do not know what restrictions have been imposed on CDs or digital music until after they have bought them," she said.

She added: "Apple have been known to change the rules after people have bought tracks."
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/6182657.stm





Microsoft Tries to Stop Vista Piracy Monster
Ina Fried

Microsoft has issued an update to Windows Vista that's intended to stop a piracy monster.

The software maker said Thursday that the update is aimed at thwarting a technique that was letting some people use pirated versions of the operating system without going through the software's built-in product activation. Microsoft has dubbed the approach "frankenbuild" because it works by combining test versions of Vista with the final code to create a hybrid version.

"Windows Vista will use the new Windows Update client to require only the 'frankenbuild' systems to go through a genuine validation check," Microsoft said on its Windows Genuine Advantage program blog. "These systems will fail that check because we have blocked the (product) keys for systems not authorized to use them."

Although Vista was only released to businesses last month--and won't hit retail shelves until late January--it has been making the rounds on the Internet, and there have been several reported hacks to bypass its built-in security mechanisms.

A second known issue, Microsoft said, involves using virtualization technology in conjunction with the mechanism Microsoft uses to allow large businesses to activate multiple copies of Vista.

"Piracy is evolving and has made the expected jump from Windows XP to Windows Vista," David Lazar, director of Genuine Windows, told CNET News.com. "We are already starting to see some workarounds to the Vista licensing requirements."

In a statement, the software company said it hoped the actions would help discourage people from trying to bypass its security mechanisms.

"Microsoft hopes that by taking this action now, we can send a message to counterfeiters and would-be counterfeiters, and help protect our legitimate customers from being victimized by further distribution of these tampered products," the company said.

Microsoft has been more aggressively targeting pirates over the past two years, including a stepped-up program for checking to make sure software is properly licensed. With Vista, software that doesn't pass such authentication will go into severely reduced functionality after 30 days. At that point, only the Web browser will work and then only for an hour at a time.

In addition to that reduced-functionality mode, users can also still boot into Windows "safe mode." That allows full access to data and applications, but offers limited screen resolution, fewer colors and prevents the use of most third-party software drivers.

While Thursday's update addresses only the "frankenbuild," Lazar said Microsoft is also working on a method to counteract the other hack, which uses virtualization and Microsoft's Key Management Service.

"The update that we are releasing today does not specifically address that, but we are working on an update that will specifically address the KMS workaround," Lazar said.

Vista represents Microsoft's strongest technical effort yet to build antipiracy features into its software. In addition to the activation requirements, some features within the operating system require the software to be validated as genuine. Those include the Windows Defender spyware fighter, Aero user interface and ReadyBoost, a technology that uses USB flash drives as added system memory.

"Vista is the hardest system to pirate that we have yet released," Lazar said.
http://news.com.com/Microsoft+tries+...3-6143823.html





'Digital Black Hole' Threatens Your Documents
Richard Thurston

The European Union is funding a project involving national libraries and digital preservation groups aimed at fighting off a looming "digital black hole."

The black hole in question is the potential future loss of data as file formats become obsolete and inaccessible.

The Planets consortium will develop a "sustainable framework" to maintain access to digital content after its original storage format has disappeared. ("Planets" is short for "preservation and long-term access project through networked services.)

It is estimated that 5 billion documents are produced every year within the EU, of which 2 percent--100 million--are seen as worth archiving. Two million of these documents are on formats at risk from disappearing into the digital black hole.

The consortium includes national libraries, archives, research institutes and technology specialists across Europe. The organizations taking part include the British Library; Microsoft Research in Cambridge, England; IBM Netherlands; the Austrian National Library; the Swiss Federal Archives; and Freiburg and Cologne universities in Germany.

The EU's Information Society Technologies R&D program is providing 8.6 million euros ($11.3 million) of the 14 million euros ($18.5 million) required to fund the project.

Adam Farquhar, head of e-architecture at the British Library, said that as computer hardware and software become obsolete, digital information reliant on this technology becomes increasingly hard to find, view, search and reuse.

"There is a growing consensus on the need to act now to avoid a gaping hole in our cultural and scientific record," he said.

Lynne Brindley, chief executive of the British Library, said European libraries and archives are uniquely positioned to lead this digital-preservation initiative, as they have the legal responsibility and the legislative framework to safeguard digital information.

Tim Ferguson of Silicon.com reported from London.
http://news.com.com/Digital+black+ho...3-6144084.html





Teen Music Now Taking a Back Seat on the Charts
Nekesa Mumbi Moody

Just a few years ago, when teens dominated the pop charts, to be a singer of a more senior age -- say, about 30 -- was something to be downplayed or outright omitted on one's musical resume.

Indeed, as the likes of 'N Sync, Britney Spears and Christina Aguilera posted hit after hit and sold millions and millions of albums, the most coveted part of a performer's act seemed to be his or her youth.

But these days, Justin Timberlake has graduated from 'N Sync to sexy adult club tracks, Aguilera is a married woman singing mature ballads and it no longer seems necessary to shave a few years off your age. While teen acts like JoJo, Rihanna and Chris Brown are still creating hits, they are no longer ruling the marketplace. Most of this year's top-selling artists were in their 20s or 30s, like Gnarls Barkley, Mary J. Blige, James Blunt, Nelly Furtado and Shakira. And oldsters like 60-year-old Barry Manilow and 65-year-old Bob Dylan also had strong sales.

"There has been more product that was clearly adult for the last five to 10 years," says Sean Ross, vice president of music and programming at Edison Media Research, which tracks radio trends.

"Thirty-five-year olds are going to a point where rap is O.K. and 18-year-olds want more mellow music. . . . It's more like there's nothing galvanizing in the center and that lets everybody see what's in the fringes."

Still, there may be the rumblings of a teen craze on the horizon. The year's biggest-selling album was the soundtrack to the Disney TV movie "High School Musical," although it was aimed at the tween set. And a graduate from that film, Vanessa Hudgens, is having some success on radio with her solo debut.

In addition, while there have been no monster albums from teens this year, there have been other radio successes with acts like 16-year-old singer Paula DeAnda ("Doing Too Much"), 15-year-old rappers Jibbs ("Chain Hang Low"), and 15-year-old JoJo, whose ballad "Too Little Too Late," was a top five Billboard pop hit.

"I think a lot of times it's been older people, but now the teenage group, the younger group, it's very youthful now," said DeAnda. "There's hot new artists out there. . . . It's a real big year for us."

"I think it's kind of happening," JoJo said of a possible teen resurgence on the charts. "But I don't think it's in the same way that it happened maybe seven years ago with the boy bands and Britney Spears and Christina Aguilera."

Back then, acts like Spears and Aguilera made blockbuster albums that sold millions of copies apiece during a music-industry boom.

But as the acts grew older along with the teens that once worshipped them, the craze began to fade, along with the decline of the music industry with the advent of Internet downloading.

"Teen stuff continues to sell, it's always going to sell, (but) it's not a craze like it (was)," says Rick Krim, executive vice president of music and talent relations at VH1. "I think a lot of the teen music tends to be disposable, and it's not the kind of music that stays with you for your lifetime."

A recent survey from the Recording Industry Association of America showed that from 1996 to 2005, the number of 15- to 19-year-olds purchasing music declined from 17.2 percent of music buyers to 11.9 percent. The percentage of buyers in the age groups between 20 and 44 either declined very slightly or remained about steady, but the biggest leap was in the over-45 group: They now represent 25.5 percent of music buyers, up from 15.1 percent in 1996.

Even though Manilow and Dylan had No. 1 debuts with their albums this year, it's not as if pop is no longer a music that appeals to the youth. After all, one of its biggest sensations, Beyonce, is a certified veteran at age 25.

But her boyfriend, 37-year-old Jay-Z, had one of the biggest sales debuts of the year with his album, "Kingdom Come." On it, he talks about being mature and seasoned and even has a song, "30 Something," bragging about his elder status.

"When you're 50-years-old, you still love hip-hop but you just can't relate to the music any more because the people making it as they grow, they're still trying to cater to a younger audience," he told The Associated Press in a recent interview. "I just felt it was very important for me to make a grown-up album and that's the tone of it, the whole album."'

Jay-Z isn't ruling out selling to the kids either. And it seems that these days, there's less of a distinction between the MTV set and the VH1 set.

"(Certain acts) start off appealing adult, but just because it's really great music ... it's appealing to other demos," said Krim, noting the success of acts like Blunt and the rock group Keane.

Daniel Powter, 36, had one of the year's biggest hits with "Bad Day," a sing-a-long piano track that first got popular when it was used as the sendoff song on "American Idol."

Powter credited his life experience for helping him to finally make a hit like "Bad Day."

"I think I've put a foundation in. I couldn't have written the music when I was 18," he told The AP earlier this year.

"I don't want to lie about how old I am. I still feel good. I still feel great. I love to play music."
http://www.newstimeslive.com/enter/story.php?id=1024853





CBS Launches Music Label, to Supply Songs to iTunes
Kenneth Li

CBS Corp. said on Friday it will revive its storied CBS Records music label to supply its television shows with less expensive music and to generate digital sales.

The company, home to the "CSI" crime drama franchise, inked a deal with Apple Computer Inc.'s iTunes online music service to sell the label's music and videos, which will also be available at www.cbsrecords.com.

The new CBS Records aims to tap unsigned musicians who write and perform their own songs that will be used and promoted on prime-time TV shows. The strategy helps CBS reduce licensing fees for using music from other labels on its shows.

Owning the music also makes negotiating Internet video deals for CBS shows less complicated and more profitable, as TV show producers seek to strike deals with online video services such as Google Inc.'s YouTube. CBS's online videos on the YouTube service were among the most popular in its first month of the deal.

"With more consumers choosing the online download model as the preferred way to purchase their favorite songs, we have an opportunity to use our unique and broad collection of media platforms to create a new music label paradigm for a small price of admission," CBS Chief Executive Leslie Moonves said in a statement.

The CBS Records brand dates back to 1938, when CBS acquired American Record Corp, which owned the Columbia brand in the United States. Columbia was one of the first companies to sell pre-recorded music and its roots go back to the late 188Os.

CBS Records has been home to top artists including Bob Dylan, Tony Bennett, Aerosmith, Frank Sinatra and Bruce Springsteen. CBS sold the label to Sony Corp. in the late 1980s for about $2 billion.

The new CBS Records will launch with no actual vinyl records and plans to sell conventional CDs through partnerships with outside companies.

At launch, the label has signed three acts, including 2007 Grammy Award nominee P.J. Olsson, rock band Senor Happy, whose album "I'm Sorry" will be released by CBS Records in January, and Will Dailey, whose song has been on CBS's "Jericho" show.

The strategy appears similar to CBS' approach to the movies industry. Moonves has said CBS may create a movie studio focused on financing small budget movies. Owning its own films could help it save on fees it currently pays to other studios to offer films on its cable channel Showtime.
http://today.reuters.com/news/articl...chnologyNews-3





Velvet Underground Rarity Sells on eBay
Verena Dobnik

Forty years after it was made, The Velvet Underground's first recording has become a financial hit - in cyberspace. Bought for 75 cents four years ago at a Manhattan flea market, the rare recording of music that ended up on the influential New York band's first album, "The Velvet Underground & Nico," sold on eBay for a closing bid of $155,401.

The buyer is a mystery, only identified by the eBay screen name: "mechadaddy."

But a greater mystery endures: How did the 12-inch, acetate LP end up buried in a box of records at a flea market?

Warren Hill, a collector from Montreal, bought the record in September 2002 at the flea market, according to an article written by his friend, Eric Isaacson of Mississippi Records in Portland, Ore. in the current issue of Goldmine Magazine.

Isaacson helped Hill decipher the nature of the lucky find.

"We cued it up and were stunned - the first song was not 'Sunday Morning' as on the 'Velvet Underground & Nico' Verve LP, but rather it was 'European Son' - the song that is last on that LP, and it was a version neither of us had ever heard before!" Isaacson wrote.

The recording turned out to be an in-studio acetate made during Velvet Underground's first recording over four days in April 1966 at New York's Scepter Studios. The record reportedly is only one of two in existence; the other is privately owned, with rumors circulating about the owner's identity. Columbia Records rejected the album.

"I immediately took the needle off the record, and realized that we had something special," Isaacson wrote. Hill and Isaacson photographed the album, made a digital backup copy of the music, and decided to put it up for auction. The first bids, which began Nov. 28, rose $20,000.

Velvet Underground left its musical stamp on hundreds of other bands.

The band, named after a book about edgy sex practices in the 1960s, was fueled by Moe Tucker's hard-driving drumming, John Cale's anxious viola, and lead singer Lou Reed, whose lyrics spoke of drug-induced beauty and gritty Lower East Side realities.

The first album featured Nico, the European model-actress-singer in a first and last recorded appearance with the band.
http://hosted.ap.org/dynamic/stories...12-10-02-06-15





Retail Sales Surge in November
AP

Consumers battered by a multitude of economic woes came roaring back in November, pushing retail sales up by the largest amount in four months.

The nation's retailers saw sales rise by 1 percent last month, following three straight months of lackluster performance. Sales were flat in August and had fallen in September and October.

The November gain, which was the best showing since a 1.4 percent increase in July, was coming at a critical time at the start of the holiday shopping season.

In other news, the amount of inventories held on shelves and backlots rose by 0.4 percent in October, after a 0.3 percent increase in September.

The increase in inventories was slightly below the 0.5 percent that economists had been expecting but followed the pattern of moderate increases as businesses have succeeded in keeping inventories under control even as the overall economy has slowed this year.

The November retail sales performance was ten times better than the tiny 0.1 percent rise that economists had been forecasting. Still, it was unclear whether the boom seen in November would carry over through the entire Christmas shopping season.

Some economists cautioned that the November jump could turn out to be a one-month blip rather than the start of a trend of stronger sales.

''We think it is very likely that sales will either be revised down or there will be a hefty drop in December,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

But other analysts said the rebound, while much stronger than expected, fit with their view that consumer spending this holiday season will post solid, if not spectacular, gains.

Many retail stores reported that customer traffic has not been as strong after a surge right after Thanksgiving when consumers were lured into stores to take advantage of attractive incentive deals.

Consumer spending slowed dramatically in the spring and summer as Americans were hit with surging gasoline prices, which left them with little to spend on other items. They also had to deal early in the year with rising interest rates, which made their credit card purchases more expensive, and with a cooling housing market, which made them feel less wealthy as the values of their homes slipped.

However, economists believe consumer spending is now stabilizing, reflecting in part the retreat in gasoline prices from the record highs above $3 per gallon set in the summer. Consumer spending is closely watched because it accounts for two-thirds of total economic activity.

The 1 percent November increase reflected widespread strength in a number of areas, led by a 4.6 percent surge at electronics and appliance stores as customers snapped up the latest flat-screen televisions for holiday gift giving.

Sales at auto stores posted a solid 0.9 percent increase, which followed a 1 percent rise in October.

Department stores and other general merchandise stores posted a 0.4 percent rise in November, a rebound after a 0.3 percent fall in October.

However, sales at specialty clothing stores were unchanged in November and sales at furniture stores edged down 0.1 percent after an even bigger 0.7 percent fall in October, weakness that reflected the big slowdown in home sales this year.

Sales at gasoline stations were up 2.3 percent in November following a 5.3 percent decline in October, a drop that reflected falling pump prices rather than a lower volume of sales.

Excluding autos, sales were still up a solid 0.9 percent in November.
http://www.nytimes.com/aponline/busi...P-Economy.html





TV Networks Reportedly Discussing YouTube Rival

News Corp.'s Fox, Viacom, CBS and NBC Universal are in talks about creating a video Web site to compete with Google's YouTube, the Wall Street Journal reported on Friday.

While a deal is still far off, the four media companies envision a jointly owned site that would be the primary Web source for videos from their television networks, the paper said in an online report on Wsj.com, citing people close to the situation.

The companies aim to cash in on the fast-growing market of Web video advertising and have also discussed building a Web video player that could play clips, the Journal said.

In less than two years, YouTube has grown from a Silicon Valley start-up to the most popular online video-sharing site that boasts more than 100 million daily views. It was acquired by Google in November for $1.65 billion in stock.

Many videos on YouTube are homemade clips uploaded by users but some of the most popular content is pirated TV shows. Some media companies have threatened to sue YouTube for copyright infringement while others, including CBS and General Electric's NBC, have struck licensing deals with the site.

The Journal said the four media companies have been discussing a YouTube rival since the start of the year, but the latest round of talks could still founder.

Walt Disney, owner of the ABC television network, is not joining in the talks, because it wants to rely on the strength of its own brands, the paper said.
http://news.com.com/TV+networks+repo...3-6142345.html





Philips Rolls Anti-Piracy Tech for Video
Alex Veiga

Philips Electronics is launching a service Thursday to help Web sites and online file-sharing networks filter out unauthorized copyright video files.

The service, dubbed MediaHedge, is the latest anti-piracy tool designed to help sift through the growing volume of online video files and give copyright holders more say over their content.

Online video sites that allow computer users to load videos, often clips culled from TV shows and music videos, are under pressure from the entertainment industry to filter out video content that users post without the copyright owners' permission.

Google Inc.'s wildly popular video-sharing site, YouTube, has said it is developing technology that will streamline the process by which copyright owners identify their content on the site and then determine whether they want to have it removed.

Philips did not name any customers who will be using the MediaHedge system, which works by checking the digital "fingerprint" or unique characteristics of video files and looking for a match in Philips' database of video content.

The service can spot a match even if the video file is degraded, altered or amounts to a small slice of the original video, according to Philips Content Identification, a unit of the Netherlands' Philips Electronics NV.

Copyright holders can specify in advance whether they want to allow videos containing their footage to be posted on sites running MediaHedge, or whether they should be blocked or otherwise restricted.
http://www.siliconvalley.com/mld/sil...l/16232331.htm





2006, Brought to You by You
Jon Pareles

IMAGINE paying $580 million for an ever-expanding heap of personal ads, random photos, private blathering, demo recordings and camcorder video clips. That’s what Rupert Murdoch did when his News Corporation bought MySpace in July. Then imagine paying $1.65 billion for a flood of grainy TV excerpts, snarkily edited film clips, homemade video diaries, amateur music videos and shots of people singing along with their stereos. That’s what Google got when it bought YouTube in October.

What these two highly strategic companies spent more than $2 billion on is a couple of empty vessels: brand-named, centralized repositories for whatever their members decide to contribute.

All that material is “user-generated content,” the paramount cultural buzz phrase of 2006. It’s a term that must appeal to the technocratic instincts of investors. I prefer something a little more old-fashioned: self-expression. Terminology aside, this will be remembered as the year that the old-line media mogul, the online media titan and millions of individual Web users agreed: It demands attention.

It’s on Web sites like YouTube, MySpace, Dailymotion, PureVolume, GarageBand and Metacafe. It’s homemade art independently distributed and inventively promoted. It’s borrowed art that has been warped, wrecked, mocked and sometimes improved. It’s blogs and open-source software and collaborative wikis and personal Web pages. It’s word of mouth that can reach the entire world.

It’s often inept, but every so often it’s inspired, or at least worth a mouse click. It has made stars, at least momentarily, of characters like the video diarist Lonelygirl (who turned out to be a fictional creation) and the power-pop band OK Go (whose treadmill choreography earned far more plays than its albums). And now that Web entrepreneurs have recognized the potential for profit, it’s also a sweet deal: amateurs, and some calculating professionals, supply the raw material free. Private individuals aren’t private anymore; everyone wants to preen.

All that free-flowing self-expression presents a grandly promising anarchy, an assault on established notions of professionalism, a legal morass and a technological remix of the processes of folk culture. And simply unleashing it could be the easy part. Now we have to figure out what to do with it: Ignore it? Sort it? Add more of our own? In utopian terms the great abundance of self-expression puts an end to the old, supposedly wrongheaded gatekeeping mechanisms: hit-driven recording companies, hidebound movie studios, timid broadcast radio stations, trend-seeking media coverage. But toss out those old obstacles to creativity and, lo and behold, people begin to crave a new set of filters.

TECH oracles predicted long ago that by making worldwide distribution instantaneous, the Web would democratize art as well as other discourse, at least for those who are connected. The virtual painting galleries, the free songs, the video blogs, the comedy clips, the online novels — all of them followed the rise of the Internet and the spread of broadband as inevitably as water spills through a crack in a dam. Why keep your creativity, or the lack of it, to yourself when you can invite the world to see?

Every so often the world notices. British rockers like the Arctic Monkeys and Lily Allen built huge followings at home and abroad by making their music available on MySpace, where bands can post full-length songs and video clips. When the Arctic Monkeys released their first album as 2006 began — full of songs that fans already had on their computers and iPods — it drew the highest initial sales of any debut in the history of the British charts. Both of them are exceptions, however; many musicians are still waiting for the first stranger to visit their MySpace page.

While some small percentage of the user-generated outpouring is a first glimpse of real talent, much of it is fledgling bands unveiling a song recorded last Thursday in a friend’s basement, or would-be directors showing the world their demo reels. There’s deadpan video vérité, raw club recordings, “gotcha” moments (like Michael Richards’s stand-up meltdown) and wiseguy edits, along with considerably more polished productions. And users generate all sorts of recombinant art: parodies, alternate video clips, mash-ups, juxtapositions, “Star Trek” scenes accompanied by U2 songs, George W. Bush rapping.

User-generated content — turning the audience into the auteur — isn’t exactly an online innovation. It’s as old as “America’s Funniest Home Videos,” or letters to the editor, or community sings, or Talmudic commentary, or graffiti. The difference is that in past eras most self-expression stayed close to home. Users generated traditional cultures and honed regional styles, concentrated by geographical isolation.

In the 20th century recording and broadcasting broke down that isolation. Yet those same technologies came to reinforce a different kind of separation: between professional artist and audience. A successful artist needed not only creativity and skill, but also access to the tools of production — studios, recorders, cameras — and outlets for mass distribution.

As the music and movie businesses grew, they flaunted their economic advantage. They could spend millions of dollars to make and market blockbuster hits, to place them in theaters or get them played on radio and MTV. They owned the factories that could press vinyl albums and make the first CDs, before the days of the home CD burner and MP3s. Independent types could, and did, release their own work, but they couldn’t match the scale of the established entertainment business.

They still are at a disadvantage. But they are gaining.

Low-budget recording and the Internet have handed production and distribution back to artists, and one-stop collections of user-generated content give audiences a chance to find their works. With gatekeepers out of the way, it’s possible to realize the do-it-yourself dreams of punk and hip-hop, to circle back to the kind of homemade art that existed long before media conglomerates and mass distribution. But that art doesn’t stay close to home. Online it moves breathtakingly fast and far.

Folk cultures often work incrementally, adding bits of individuality to a well-established tradition, with time and memory determining what will last. In the user-generated realm, tradition is anything prerecorded, and all existing works seem to be there for the taking, copyrights aside.

In the process, another thing users generate is back talk. Surfing YouTube can be a survey of individual reactions to pop culture: movie and television characters transplanted out of their original plots or synched to improbable songs, pop hits revamped as comedy or attached to new, unauthorized imagery. (Try searching for Justin Timberlake on YouTube to see all the variations, loving and snide, on his single “Sexyback.”)

Copyright holders might be incensed; since buying YouTube, Google is paying some of them and fielding lawsuits from others. But a truly shrewd marketer might find some larger value. Those parodies, collages, remakes and mismakes are unvarnished market research: a way to see what people really think of their product. They’re also advertising: a reminder of how enjoyable the official versions were.

The amateurs may seem irreverent, disrespectful and even parasitical as they help themselves to someone else’s hooks. But they’re confirming that the pros came up with something durable enough to demand a reply. Without icons, what would iconoclasts mock?

Some pros understand that they don’t need to have the last word on their work. Rappers like Jay-Z customarily release a cappella versions of their rhymes, a clear invitation for disc jockeys and producers to work up their own new tracks. Rockers like Nine Inch Nails have placed their raw multitrack recordings online, along with the software to remix them. Filmmakers have not been so forthcoming, but that hasn’t stopped viewers from, for instance, editing “The Big Lebowski” down to all the moments when its characters use a certain four-letter word. It’s a popular clip on YouTube.

Of course the notion of culture as something bestowed by creators and swallowed whole by audiences never had much to do with reality. Now fans can not only tell others about their responses to art — in the user-generated content of fan sites and discussion forums — but they can also demonstrate them directly.

IN the tsunami of self-expression, audiences have been forced to take on a much bigger job: sifting through the new stuff. For musicians, the Internet has become an incessant public audition. What once was winnowed down by A&R departments, and then culled again by radio stations and other media, is now online in all its hopeful profusion. A listener could spend the rest of her life listening to unreleased songs. Some people do just that to claim bragging rights, or blogging rights, for discovering the next indie sensation.

Individually the hopefuls can’t compete with a heavily promoted major-label star. Face it: Song for song, most of them just aren’t as good. But collectively they are stiff competition indeed: for time, for attention and, eventually, for cultural impact. The multiplying choices promise ever more diversity, ever more possibility for innovation and unexpected delight. But they also point toward an increasingly atomized audience, a popular culture composed of a zillion nonintersecting mini-cults. So much available self-expression can only accelerate what narrowing radio and cable formats had already begun: the separation of culture into ever-smaller niches.

That fragmentation is a problem for businesses, like recording companies and film studios, that are built on selling a few blockbusters to make up for a lot of flops. The music business in particular is going to have to remake itself with lower and more sustainable expectations, along the lines of how independent labels already work.

But let the business take care of itself; it’s the culture that matters. Fragmentation is difficult too for artists with populist intentions, who want to be heard beyond the confines of their core following. That kind of ambition isn’t only a mercenary one. It’s a challenge to preach to the unconverted, and an achievement to unite disparate audiences. Every so often it’s good to break through demographic categories and share some cultural reference. Popular culture has never been entirely monolithic — someone, somewhere, has no opinion on Michael Jackson or “Titanic” — but 21st-century stardom has less clout, less scope. It’s shrinking down to mere celebrity.

Yet there is a limit to how splintered a culture can become, one that’s as much psychological as aesthetic. Humans like to congregate and join a crowd, at least up to a point. One thing the Internet does superbly is to tabulate, and it’s no accident that sites featuring user-generated content prominently display their own most-viewed and most-played lists. Even if they take pride in ignoring the mass-market Top 10, users still want a little company, and perhaps they hope that the collective choices add up to some guidance.

Humans also like to share what they enjoy; hence all the user-generated playlists at sites like Amazon or eMusic, the inevitable lists of favorite bands and films on social networking sites and the proliferation of music blogs, like fluxblog.org or obscuresound.com, that gather hard-to-find songs for listeners to download directly. The songs on music blogs are chosen not by companies desperate for profit, but by individuals with time to spare, and if the choices often seem a little, well, geeky — indie rock, with a side of underground hip-hop, seems to be the overwhelming choice of music bloggers — who but a geek would be spending all that time at a computer?

Those geeks make life easier for the media moguls who bought into user-generated content this year. Selection, a time-consuming job, has been outsourced. What’s growing is the plentitude not just of user-generated content, but also of user-filtered content. (There are even sites like elbo.ws that tabulate songs found on music blogs, finding yet another Top 10.)

The open question is whether those new, quirky, homemade filters will find better art than the old, crassly commercial ones. The most-played songs from unsigned bands on MySpace — some played two million or three million times — tend to be as sappy as anything on the radio; the most-viewed videos on YouTube are novelty bits, and proudly dorky. Mouse-clicking individuals can be as tasteless, in the aggregate, as entertainment professionals.

Unlike the old media roadblocks, however, their filtering can easily be ignored. The promise of all the self-expression online is that genius will reach the public with fewer obstacles, bypassing the entrenched media. The reality is that genius has a bigger junk pile to climb out of than ever, one that requires just as much hustle and ingenuity as the old distribution system.

The entertainment business is already nostalgic for the days when it made and relied on big stars; parts of the public miss a sense of cultural unity that may never return. Instead both have to face the irrevocable fact of the Internet: There’s always another choice.
http://www.nytimes.com/2006/12/10/ar...ic/10pare.html





The Perfect Tree Awaits in the Field, or in the Computer
Elizabeth Olson

WHEN the holiday season rolled around three years ago, Joseph Kennedy found that the Christmas trees available near his new home in Jacksonville, Fla., weren’t like those he remembered from his years living in Boston.

“We looked and looked, but the trees were not as nice and too expensive,” Mr. Kennedy, 44, said, calling their needles “razor sharp.”

But Mr. Kennedy, a stay-at-home dad, and his wife, Sheena, were determined to have a real tree for their daughter, Catherine, who is now 5, so he took his brother’s advice and ordered an evergreen online. He has since bought a tree on the Internet each year including the 7½-foot Fraser fir that arrived at his door last week.

The point-and-click method is gaining popularity among holiday shoppers who want to shorten their annual searches for evergreen perfection. Usually, online buyers pay more because of the shipping costs, which can add $20 to $50 to the base price of a 6½- to 7-foot tree.

Last year, only 200,000 to 500,000 Christmas trees were bought online — a small share of the country’s nearly 33 million natural holiday trees, said Rick Dungey, public relations manager for the National Christmas Tree Association.

It may seem like a breach of tradition to buy a tree sight unseen, instead of trudging into the woods and cutting it down, or carefully selecting it at a tree lot, a store or a street corner. But growers say online sales will increase as more people realize that there is an alternative to hauling a 40- to 50-pound tree home.

Some growers, like the Rocks Christmas Tree Farm in Bethlehem, N.H. www.therocks.org have already expanded their online capacity, to move beyond their traditional local bases and to reach clients across the country.

“Last year we sold 30 percent more trees online than we did the year before,” said Nigel Manley, who manages the tree farm, which is in the White Mountains and is owned by the Society for the Protection of New Hampshire Forests. Families can also visit the farm and cut their own trees.

For years before buying its first computer in 2000, the Rocks farm sold trees through a toll-free telephone number. The phone and online business was slow at first, because “most people don’t realize you can mail a tree,” Mr. Manley said.

But sales have risen, prompting him to buy three more computers, and the farm has honed tree-shipping to a science. Mr. Manley and his crew first select trees suitable for shipping and mark them with ribbons. Trees are cut only after an order arrives.

Once the tree is cut, it is shaken to get rid of any debris and loose needles. Then it is baled and packed in a narrow box lined with wax paper to protect the needles, keep it fresh and seal in the woodsy smell. The trees are delivered by FedEx or United Parcel Service one to five days after boxing, depending on the distance.

When the tree arrives at a customer’s home, the bottom of the box can be cut away so the trunk can be placed directly in the holder. Once the tree is level, the rest of the box can be removed.

This method offers convenience — and prevents a lot of poked eyes, said Christopher Collins, who lives in the Chelsea neighborhood of Manhattan and has bought trees online for the last five years. Mr. Collins, a member of the Board of Standards and Appeals in New York City, switched to electronic ordering after a tree he bought on a nearby street corner began dropping its needles almost as soon as it crossed his apartment’s threshold.

“There was no way to tell how long ago it was cut,” he said. When a co-worker suggested an e-tree, Mr. Collins decided to try it. “The first year, the doorman called and said: ‘Your Christmas tree is here. Should I send it up?’ ” Mr. Collins recalled. “It was so easy. He brought it up the elevator, and I didn’t even have to put on gloves.”

In preparing the tree, buyers are advised to make a fresh cut on the trunk so it absorbs enough water. Mr. Collins had a saw in his tool kit, but many tree purveyors sell saws online (about $12 for a small version) to accompany their trees. Mr. Kennedy, for example, bought one when he ordered his first tree in 2003.

More tree farmers are adding the online option. The Web site of the growers association www.realchristmastrees.org lists some 60 growers and retailers across the country that sell through the Internet.

The Rocks Christmas Tree Farm charges $55 for a 6½- to 7-foot Fraser fir, and $42 for a balsam tree of the same size, not including a flat $25 for shipping.

Of the 6,000 trees it sells each season, it ships about 400, mostly to online buyers. Online tree sales account for $22,000, and shipped wreaths $17,500, of the season’s $211,000 in revenue, Mr. Manley said. He expects online orders for both trees and wreaths to increase 20 percent this season.

Smaller growers who were once limited to their local markets are also expanding. West End Wreaths www.westendwreaths.com in West Jefferson, N.C., now ships about 100 trees that are ordered online. Scott Ballard, a co-owner of West End Wreaths, says online demand has risen 25 percent every year for the last four years.

“You have to be on the Web these days,” he said. ”It’s where technology meets tradition.”

This season, Mr. Ballard advertised on a weather-related Web site, and he is thinking about creating a virtual tree selection site so shoppers can pan through his fields and electronically choose the tree that they would like to cut down — or have him cut down and send.

Even the smallest family enterprises, like Beckwith Family Christmas Trees & Wreaths in Hannibal, N.Y., say they cannot ignore the Web’s potential. Faye and Jack Beckwith started a Web site for the business www.beckwithfamilychristmastrees.com in 2002 and were soon contacted by customers as far away as California.

“It’s definitely catching on,” she said of the Internet orders. She said Beckwith doubled its tree shipments two years ago, when wreaths were added to the online choices.

The business ships about 100 trees annually; a tree that sells for $32 when bought directly from the field might go for $80 online, including shipping, she said.

Mrs. Beckwith has mixed emotions about Internet orders because, like many other farm owners, she likes families to visit and cut their own trees. The farm has wagon rides and a gift shop, which help the small operation’s bottom line.

And there are limitations to online trees, the most important being size. The most popular online tree is 6 to 7 feet tall and weighs 40 to 50 pounds. Occasionally, a customer wants a much bigger tree — Mrs. Beckwith said a Manhattanite once asked for a 22-foot Fraser fir — that may be too heavy to be shipped in a box.

Even a 7-foot blue spruce would be too heavy, she said. It is a sturdy tree with stiff needles but is not as resilient as the fragrant balsams or the hardy Fraser firs, which are among the half-dozen most-ordered evergreens. Other commonly shipped trees are noble and Douglas firs and the Virginia pine. Some Web sites show photographs of the various types.

GROWERS who sell trees online know that repeat business depends on getting it right the first time.

“We have one shot to get and keep a customer,” acknowledged Mr. Manley, so he selects premium trees, hand-shears wayward branches to give the trees that ideal conical shape and times the shipping so the tree is at its freshest.

But mistakes can happen, as Mr. Collins has found out. Two years ago, his e-tree began to shed its needles soon after it arrived.

Instead of fretting over another selection, he picked up the phone and called the Rocks Christmas Tree Farm. “They shipped another tree overnight express, and it had that wonderful fragrance and freshness, so I can’t complain,” he said.
http://www.nytimes.com/2006/12/10/bu...y/10trees.html





The Ambient Walkman
Jascha Hoffman

The popularity of the iPod has given new urgency to an old criticism of the portable music player: namely, that it isolates the listener by tuning out the world around him. As one response to this problem, Noah Vawter, a graduate student at the M.I.T. Media Lab, has created a pair of headphones that tunes the listener back in.

The device, which Vawter calls Ambient Addition, consists of two headphones with transparent earpieces, each equipped with a microphone and a speaker. The microphones sample the background noise in the immediate vicinity — wind blowing through the trees, traffic, a cellphone conversation. Then, with the help of a small digital signal-processing chip, the headphones make music from these sounds. For instance, percussive sounds like footsteps and coughs are sequenced into a stuttering pattern, and all the noises are tuned so that they fuse into a coherent, slowly changing set of harmonies.

The overall effect is a bit like listening to U2 with the vocals removed. Vawter is working on a version of the device that would rearrange the noises around the user to approximate any given pop song.
http://www.nytimes.com/2006/12/10/ma...ion1A.t-3.html





Disgruntled Dell Customer Finds Crafty Path to Lawsuit Settlement
Conrad Quilty-Harper

Pat Dori, a disgruntled Dell customer who found no resolution to the issue of a broken laptop after five long months and 19 wasted phone calls, decided to go legal and sue the company for failing to adequately address the problem. The method by which Mr. Dori initiated the claim is the juicy core of this story: instead of going through the normal process of sending the court papers to Dell's headquarters in Texas, Dori thought to have the papers delivered to a Dell shopping mall kiosk instead. Quite unsurprisingly, no-one from Dell turned up in court on the stipulated date, resulting in Dori winning a $3,000 default judgment and a ruling to allow bailiffs to close the kiosk and seize items if the judgment was not paid. Dell has now settled the case out of court for undisclosed terms, although the company would have appealed the decision -- had it actually turned up to court, that is. Mr. Dori, our latest hero for sticking it to the man in such a crafty manner, says that he thinks "any regular person can do this," as long as you "have the law on your side." Apparently the key is to "get their money" first, which will inevitably be followed by "[getting] their attention." It's gotta beat screaming down the phone, that's for sure.
http://www.engadget.com/2006/12/10/d...uit-settlemen/





Huge Victory for Real People as Telco Bill Dies

The gavel has fallen on the 109th Congress marking the demise of entrenched corporate efforts to legislate away our Internet freedoms — and a stunning victory for real people who want to retain control of the Internet.

The fate of Net Neutrality has now been passed to what appears to be a more Web-friendly Congress.

Our Coalition pledges to work with new Members to craft policies that ensure all Americans can access the Internet and enjoy the unlimited choices it has to offer.

The end of this Congress — and death of Sen. Ted Stevens’ bad bill — gives us the chance to have a long overdue public conversation about what the future of the Internet should look like. This will not only include ensuring Net Neutrality, but making the Internet faster, more affordable and accessible.

‘Huge Victory for Real People’

As the 109th comes to a close, Coalition members today praised our efforts in 2006 and discussed ways we can work towards a better Internet:

“This is a huge victory for real people and a clear signal to the next Congress that standing up for big bold ideas is a winning political proposition,” said Eli Pariser, executive director of MoveOn.org Civic Action.

Companies like AT&T, Verizon, BellSouth and Comcast spent more than $150 million to push Congress to gut Net Neutrality. But in the end, they couldn’t overcome widespread public opposition.

“The people’s attention to the issue of Net Neutrality is more powerful than any legislation — and this year proves that,” said Tim Wu, a professor at Columbia University Law School and author of Who Controls the Internet.

‘It’s About Fairness’

Network Neutrality has been part of the Internet since its inception, ensuring that the service providers who control the “pipes” don’t interfere with content based on its ownership or source. “Net neutrality is just about fairness and a level playing field,” said Craig Newmark, founder of craigslist. “It’s that simple.”

“Industry will be back with their money and phony grassroots groups,” said Jeannine Kenney, senior policy analyst at Consumers Union. “But next time around, with a public now well-informed of what’s at stake, we hope Congress will take up broadband policy that advances consumer — not just industry — needs.”

The more than 850 groups in the SavetheInternet.com Coalition also include the National Religious Broadcasters, the Service Employees International Union, the American Library Association, Educause, Gun Owners of America, Future of Music Coalition, Parents Television Council, the ACLU, and every major consumer group in the country. These are supported by a community of more than a million small businesspeople, bloggers, MySpacers, YouTubers, activists and citizens.

“As an activist and new media advocate, I am encouraged by our prospects in Congress for protecting the egalitarian spirit of the Internet and all people’s unfettered access to it,” said Christopher Rabb, founder of Afro-Netizen. “This fight has even greater impact on underserved communities, particularly among African-Americans, who rarely own or control the content we consume in mainstream media.”

‘The Fight for Net Neutrality Has only Begun’

While the defeat of HR 5252 is a major step forward, the future of the Internet remains in jeopardy until Congress passes meaningful, enforceable protections for Net Neutrality. Such legislation will be a top priority for members of the SavetheInternet.com Coalition when the legislators return in January.

“Despite a Congress deeply in the pocket of telecom lobbyists, the public banded together to stop attacks on our free and open Internet,” declared Michael Kieschnick, president of the Working Assets. “In 2007, we will continue the fight to preserve this precious public good by making Network Neutrality the law of the land.”

“The potent combination of grassroots support and the facts stopped a bad bill,” said Mark Cooper, director of research for the Consumer Federation of America. “But the fight for Net Neutrality has only begun.”
http://www.savetheinternet.com/blog/...s-on-the-vine/





Ma Bell Capitulates to Cable
Barrons

ATT announced that it would not need to build an expensive, all-fiber network to handle high-speed Internet and video traffic in the areas it operates in, to compete with cable.

We view this as a backing off of previous plans for [AT&T's Internet video service] U-Verse, and can be nothing but good for the cable companies. The telecoms don't really appear willing to take the risk of building an all-fiber network to compete with the incumbents.

This is a marked reversal of previous plans and we view as a sign that AT&T is backing off its original intentions to compete on a grand scale with the incumbent cable operators by building an expensive fiber network with no guarantee the capital required to deploy such a network will ultimately be justified.
We see AT&T backing off building an all-fiber solution for the deployment of video implies they are likely looking to the "satcasters" [satellite-broadcasters] to deploy video service instantly and ubiquitously as we mentioned in our last note on (LCAPA) , and why that company may be looking to acquire (DTV) .

Until recently, AT&T has been aggressive, as has (VZ) with its FiOS [Internet] service, upgrading networks with fiber for U-Verse. Unlike Verizon's service, however, now AT&T plans to use its existing legacy copper lines to deploy new services to save costs, claiming that the bandwidth they have to do so at this point in time is more than adequate.

We don't think this is the case but rather simply an excuse for AT&T's change in direction. An admission that at the moment, cable likely has the markets they serve.
In fact, the decision by AT&T is reminiscent of the days of telecom's "video dial tone" [television over phone lines] (which was never any good or really deployed) and in our opinion won't be an effective competitor to cable. We see the announcement as capitulation by AT&T, which is better than good for the cables, which should trade up materially as a result.

[Cable companies] are already entrenched, offer numerous services, have the franchises, and know how to deploy new services in a way telecoms don't. The only telecom advantage as we see it, is they have wireless, which is why we think ultimately the cables will buy what they built, namely (S) and split it up amongst themselves to offer the true quadruple play. At that point, from an advantage point of view, the telecoms would have nothing.
In a nutshell, we are convinced more and more that cable is where it's at, and soon public market multiples should make this clear.
-- David J. Brenner -- Robert G. Routh, CPA -- Meredith L. Fisher
http://www.marketwatch.com/News/Stor...214ed8bff92%7D





VoIP Subscribers Grow 18 Percent in 3Q
Bruce Meyerson

U.S. subscribers to Internet-based telephone services grew 18 percent to 8.2 million in the third quarter, but the growth rate slowed for a second straight quarter, according to the research firm TeleGeography.

The latest tally on the market for Voice over Internet Protocol, better known as VoIP, is more than double the total of a year ago.

VoIP revenues for the second quarter were up about two and a half times - $732 million across the United States, compared with a year-ago level of $298 million.

Vonage Holdings Corp. remained the biggest provider with 1.95 million subscribers, followed again by Time Warner Inc.'s cable TV business at 1.64 million. But Comcast Corp. moved into third place with 1.35 million, surpassing Cablevision Systems Corp.'s 1.10 million.

TeleGeography predicted the market would grow by roughly 1.5 million subscribers in the fourth quarter to end the year with 9.7 million, or about 8.7 percent of the nation's households. Revenues are expected to approach $2.6 billion for the year, or more than 2.5 times the 2005 total of just over $1 billion.
http://hosted.ap.org/dynamic/stories...12-08-17-16-11





Samsung Sued for Trademark Infringement
Bruce Meyerson

The maker of BlackBerry mobile devices is suing the maker of the new "BlackJack" smart phone, charging Samsung Electronics Co. Ltd. with trademark infringement.

The suit brought by Research in Motion Ltd. in U.S. Distinct Court for Central California alleges that "Samsung's use of the name `BlackJack' in connection with a smartphone" amounts to "unfair competition and trademark dilution."

The BlackJack was introduced last month in the United States by Cingular Wireless, which also happens to be the single largest purveyor of BlackBerry devices and e-mail service. Like a growing number of advanced cell phones, the BlackJack features a full "QWERTY" keyboard for thumb typing messages, a concept first popularized by the BlackBerry.

A Samsung spokesman said the Korean company does not comment on pending legal matters. Cingular also declined comment on the suit, saying only that it continues to sell both devices.

Samsung introduced a very similar device to the BlackJack earlier this year in Britain through Vodafone Group PLC under a different brand name, the i600.

In its suit, filed Friday, RIM suggested it was no accident that Samsung used a different name overseas, where BlackBerry is less popular, and then chose the BlackJack name for the market where BlackBerry is best known.

Though nearly identical in shape and size, there are differences between the i600 and the BlackJack: the i600, for example, is equipped with two built-in cameras, on the front and one on the back; the BlackJack has one.

"The BlackJack device was designed specifically for the U.S. market," said Kim Titus, a Samsung spokesman. "There is a device (overseas) that has a similar form factor but has different functionality."

RIM's suit also suggested that Samsung chose the BlackJack to take advantage of the recent launch a BlackBerry device called the Pearl that is similarly small and also black in color.

"The overall look of the BlackJack smartphone is highly similar to RIM's BlackBerry Pearl smartphone," the suit said, noting that the two devices are very close in weight and dimensions.

The suit also argues that Samsung approved a national Cingular ad campaign for the BlackJack that "capitalizes on the design similarities" and "has resulted in confusion" with the Pearl.
http://hosted.ap.org/dynamic/stories...12-12-17-16-16





Marrying the Cellphone to Cheap Internet Calling
Glenn Fleishman

MATTHEW MILLER wanted to cut the cost of his cellphone plan. He and his wife, Dayna, had regularly exceeded their 2,000-minute-per-month T-Mobile family plan, incurring extra-use charges that reached $60 some months.

With her home business and his daily commute of two and a half hours to his job in Seattle, they decided this year to move to the maximum 3,000-minute plan. They spend another $20 a month for unlimited long-distance calling on their landline.

Mr. Miller, a columnist for Geek.com and ZDNet in his spare time, was therefore not surprised when T-Mobile asked the couple to join an early local test of a service that combines the ubiquity of cellular networks with the flat pricing for unlimited calls available with some Internet-based phone services.

The new service, HotSpot@Home, allows a subscriber to place calls from a mobile phone using cellular and Wi-Fi networks, whether a home wireless network or a hot spot operated by T-Mobile.

In my own testing, I found the service a reasonable first draft of what could become a reliable alternative to both all-cellular networks and an emerging set of Wi-Fi-only phones. The marriage might even save money — for both T-Mobile and its subscribers. Carrying calls over Wi-Fi networks costs the company as little as 20 percent of the expense of calls handled on a cellular network.

All calls originating on a Wi-Fi network to numbers in the United States are included in a monthly fee of $20 for a primary phone and $5 for additional phones in a family plan. The Wi-Fi plan must be coupled with a traditional voice cellular service plan of at least $40 a month.

Although T-Mobile introduced the service in late October, after the tests in which the Millers took part, the company allows subscribers to sign up only in the Seattle-Tacoma region, and only at corporate stores. The service can be used nationwide, however.

The company, based in Bellevue, Wash., declined to comment for attribution for this story, citing its intention to keep interest in the service low until it is nationally available. I tested this service as a walk-up customer at a mall kiosk paying retail price.

The service is designed to pass calls in progress from a Wi-Fi network to the cellular network (or vice versa) when a signal drops in strength, in the same fashion that regular cellphones hand off among many cell towers. To a suitably equipped telephone, Wi-Fi is just another cell tower.

Providing calls over Wi-Fi also has the potential to improve voice quality in often hard-to-serve interior spaces in detached homes and apartment buildings.

While corporations have used telephone handsets or base stations that route calls exclusively over Wi-Fi, those networks require expensive server equipment to ensure call quality, roaming and capacity. Telephones for these networks typically cost at least $300 to $500.

T-Mobile’s service, by contrast, works over networks using much less expensive equipment, including existing home Wi-Fi gateways, as well as a router that T-Mobile offers for free to subscribers after a $50 mail-in rebate. Further, its subscribers bear the cost of the home network broadband connection.

Other Wi-Fi phones have appeared in great variety in recent months, with several models appearing that tie into Skype, the eBay-owned service that dominates free computer-to-computer calling worldwide. For a variety of per-minute and flat-rate fees, Skype also offers calling to and from the public switched-telephone network.

These Wi-Fi-only phones lack cellular radios, and often have difficulty in connecting to Wi-Fi networks that are not completely free and open, or are not operated by the phone’s owner. (Some smartphones feature both cellular and Wi-Fi radios, including several Nokia models sold primarily outside the United States, but carriers that support these phones do not offer hybrid calling plans.) For the T-Mobile service being offered in Seattle, with its dual Wi-Fi and cellular ability, the choice of phones is limited, although more are expected to appear throughout 2007. HotSpot@Home requires either the Nokia 6136 or the Samsung SGH-T709. Both are $30 after a $50 mail-in rebate.

The phones automatically connect to T-Mobile hotspots, and can scan and be configured to connect to any open Wi-Fi network or one secured with a home Wi-Fi security method.

Because the service uses an international standard (Unlicensed Mobile Access) focused on voice, the phones perversely cannot use Wi-Fi networks for data access, and laptop access to T-Mobile hotspots is also not included in the HotSpot@Home plan.

Information services offered with the phones, including a typical minimally featured Web browser, require T-Mobile’s low-speed GPRS or slightly faster EDGE cellular data network. Access to those networks adds $20 a month for unlimited use.

This also means that a free network that requires a button click to gain access is off limits to the service. I tried to test the phone on a commuter bus line through Seattle that has a trial Wi-Fi-based Internet connection on board. But I was stymied by the inability to click “I Accept.”

Nevertheless, I used a Nokia 6136 over a swath of Seattle, including inside homes and offices, and at hot spots run by T-Mobile and other providers. Call quality was excellent on all Wi-Fi networks tested, including full-duplexing — better described as the Robert Altman effect — in which both parties are speaking at the same time but can hear each other clearly.

Roaming, however, was far from acceptable. The cellular-to-Wi-Fi handoffs worked most of the time without interruption to a call in progress. But most Wi-Fi-to-cell transitions caused a dropped call as the hot spot signal ebbed with distance.

The Millers experienced regular call drops during calls placed on the Wi-Fi connection; they tried both the Samsung and Nokia models. Another user, Monica Paolini, a cellular and wireless industry analyst, has found her Samsung phone “sometimes ‘forgets’ about Wi-Fi and it needs to be rebooted.”

These rough edges in roaming and call continuity can be smoothed over time through software updates performed over-the-air to the phone — something cellular carriers already carry out on a regular basis for all their phones — and through tweaks to the handoff systems on the cellular network. T-Mobile is expected to make these improvements before expanding its potential subscriber base.

Ms. Paolini uses the phone with a D-Link Wi-Fi router sold by T-Mobile and with a second Wi-Fi network in her home. The D-Link router includes two features intended to improve call quality and battery life.

The first feature, WMM (Wireless Multimedia), can give higher priority to voice data — as well as streaming media — traveling over a Wi-Fi network to reduce the chance of stuttering or delays.

The second feature, a subset of WMM called Power Save, lets a handset reduce radio power whenever it is not actively transmitting or receiving.

This can increase battery life by 15 to 40 percent over standard Wi-Fi, according to the Wi-Fi Alliance, an industry trade group that provides WMM certification and device approval.

Mr. Miller said that after the several weeks of testing, he signed up for the commercial service from T-Mobile, only to drop it within the two-week cancellation period. He and his wife were unable to get consistent connections to the Wi-Fi router with either the Nokia or Samsung phone, and were unhappy with the limited battery life and the call dropping.

“If it wasn’t dropping calls and frustrating her from that aspect, we probably would have stuck with it,” he said. He would consider the service again if he was confident that it had improved.

T-Mobile may be eager to convert and retain customers like the Millers and me. When I canceled my service after testing, a store manager offered to pay $350 in cancellation fees my current provider would have charged, sweetened further with a $100 use credit after a year’s service.

While that offer is not unheard-of to lure a switcher — carriers can pay $300 or more in customer acquisition costs — it may show how eager the company is to further its trial program here before trying to sell the rest of the nation on Wi-Fi calling.
http://www.nytimes.com/2006/12/14/te.../14basics.html





Replacing Your Legacy Phone System With Trixbox
Sam Banks

Voice Over IP or VOIP seems to be the buzz word on everybody's lips at the moment and with good reason. Forwarding your calls over the internet instead of the phone lines can save you big money. As a communications consultant I have received many enquiries about VOIP as of late and as a Linux fan I have read much about the progress of the open-source Asterisk PBX project headed up by Digium. Utilizing the power and adaptability of Linux, one can build themselves an Asterisk based server on commodity hardware for a fraction of the price of a proprietary system. Installation and configuration can be very tricky however if you aren't blessed with Guru linux skills, enter Trixbox.

The Trixbox project, formerly known as Asterisk@home, is designed to make it possible for almost anyone to set up a fully functional Asterisk server in less than an hour using GUI configuration tools and a web browser. It is based on Centos and has just about every goody imaginable for a phone system and even comes bundled with the open source Sugar CRM, although we will not be testing this setup as it is outside the scope of this article and outside of the needs of most people. Personally, if I am building a phone system then I would prefer that it just concentrated resources on making and receiving calls, but it is a nice option none the less.

To test Trixbox I am using a custom built rig running a 3ghz Pentium 4 processor on an Intel motherboard with 512MB of Ram, I opted for the Intel board because I had read on the Asterisk message boards that Intel chipsets provided the best performance for Asterisk. The system it is replacing is a Siemens Hipath 3350, a fully featured mid-range PBX that is about four years old. I consulted the message boards again and opted for the Linksys SPA94, as my IP phone of choice, which a lot of people had reccomended. I would have preferred a phone running IAX, Asterisk's native protocol for communicating, but as the world seems to be converging on SIP as the de-facto standard, all the high quality phones appear to only support SIP.

The install is as painless as the Trixbox website claims and took my machine about thirty minutes in total, including the time and date configuration. I cant imagine anyone with reasonable PC skills having any trouble with it. Once you boot up the system it drops in to a console with the message "For access to the Trixbox web GUI use this url: http://192.168.0.82" although the IP address will be different depending on your situation. I jumped on to a neighbouring PC, on the same network, and fired up firefox with the IP address I was given and was greeted by the trixbox welcome screen. The welcome screen has links to the configuration pages for each application along with summarized descriptions, which make it very friendly for the intrepid novice. The Menus are as follows:

Voicemail and RecordingsThis is the Asterisk Recording Interface. It provides a user friendly web interface to voicemail and call monitor recordings. As well, it provides access to user settings in Asterisk.

Web MeetMeThis application helps you manage the web based conferencing ability of trixbox.

FOPSimilar to HUDlite, FOP is an operator and call-control software. FOP runs inside your web browser using Flash, vs. HUDlite which runs on your Windows XP, Mac or Linux desktop.

SugarCRMThis is an open source contact center software, great for managing your contacts online, scheduling and most importantly sales force automation.

These menus are designed so that anyone can access them which is handy for employees wanting to check their voicemail or change their message, switching from the user mode mode however opens up the password protected "Restricted Area" which is where all the fun happens. In the restricted area I set up a couple of phones without to much trouble and an SIP trunk that I purchased from 0064. There are many more options but I am initially just looking to replace the functionality of my current system which is basically to be able to make and receive calls and voicemail. One really nice touch wasthe ability to specify your own shortcut keys to mimic your old system, which means no staff training for me which is a huge bonus.

My SIP account came with some free credit which allowed me to make a couple of test calls so I plugged in my phones, called each other, which worked flawlessly, took a deep breath and dialled my cell phone. Much to my surprise it worked first time and the call quality wasn't half bad either. I called my partners cell phone and she couldn't even tell that I was calling from a different system until my free credit ran out.

All in all it took me less than a day to have a completely functional phone system that was now making calls over the internet at a fraction of the cost of our normal charges. The test was so successful in fact that it is now our only system and has been working solid for two weeks. The only issues I have come across have been related to our internet provider dropping rather than Trixbox itself. To combat this I have since installed an analogue line card from Digium to work as a backup, I would reccommend this to anyone shifting to VOIP for their business as the internet doesn't tend to be as reliable as the old copper phone lines. Aside from that Trixbox has saved our business hundreds of dollars already and was indeed as easy to install as claimed. This can only spell trouble for the Telcos as more people realise that they are paying far more than they need to for calls and shift to Linux based Asterisk solutions.
http://www.linuxforums.org/applicati...h_trixbox.html





The Hole Trick

How Skype & Co. Get Round Firewalls
Jürgen Schmidt

Peer-to-peer software applications are a network administrator's nightmare. In order to be able to exchange packets with their counterpart as directly as possible they use subtle tricks to punch holes in firewalls, which shouldn't actually be letting in packets from the outside world.

Increasingly, computers are positioned behind firewalls to protect systems from internet threats. Ideally, the firewall function will be performed by a router, which also translates the PC's local network address to the public IP address (Network Address Translation, or NAT). This means an attacker cannot directly adress the PC from the outside - connections have to be established from the inside.

This is of course a problem when two computers behind NAT firewalls require to talk directly to each other - if, for example, their users want to call each other using Voice over IP (VoIP). The dilemma is clear - whichever party calls the other, the recipient's firewall will decline the apparent attack and will simply discard the data packets. The telephone call doesn't happen. Or at least that's what a network administrator would expect.
Punched

But anyone who has used the popular internet telephony software Skype knows that it works as smoothly behind a NAT firewall as it does if the PC is connected directly to the internet. The reason for this is that the inventors of Skype and similar software have come up with a solution.

Naturally every firewall must also let packets through into the local network - after all the user wants to view websites, read e-mails, etc. The firewall must therefore forward the relevant data packets from outside, to the workstation computer on the LAN. However it only does so, when it is convinced that a packet represents the response to an outgoing data packet. A NAT router therefore keeps tables of which internal computer has communicated with which external computer and which ports the two have used.

The trick used by VoIP software consists of persuading the firewall that a connection has been established, to which it should allocate subsequent incoming data packets. The fact that audio data for VoIP is sent using the connectionless UDP protocol acts to Skype's advantage. In contrast to TCP, which includes additional connection information in each packet, with UDP, a firewall sees only the addresses and ports of the source and destination systems. If, for an incoming UDP packet, these match an NAT table entry, it will pass the packet on to an internal computer with a clear conscience.
Switching

The switching server, with which both ends of a call are in constant contact, plays an important role when establishing a connection using Skype. This occurs via a TCP connection, which the clients themselves establish. The Skype server therefore always knows under what address a Skype user is currently available on the internet. Where possible the actual telephone connections do not run via the Skype server; rather, the clients exchange data directly.

Let's assume that Alice wants to call her friend Bob. Her Skype client tells the Skype server that she wants to do so. The Skype server already knows a bit about Alice. From the incoming query it sees that Alice is currently registered at the IP address 1.1.1.1 and a quick test reveals that her audio data always comes from UDP port 1414. The Skype server passes this information on to Bob's Skype client, which, according to its database, is currently registered at the IP address 2.2.2.2 and which, by preference uses UDP port 2828.

Step 1: Alice tries to call Bob, which signals Skype.

Bob's Skype program then punches a hole in its own network firewall: It sends a UDP packet to 1.1.1.1 port 1414. This is discarded by Alice's firewall, but Bob's firewall doesn't know that. It now thinks that anything which comes from 1.1.1.1 port 1414 and is addressed to Bob's IP address 2.2.2.2 and port 2828 is legitimate - it must be the response to the query which has just been sent.

Step 2: Bob tries to reach Alice, which punches a hole through Bob's Firewall.

Now the Skype server passes Bob's coordinates on to Alice, whose Skype application attempts to contact Bob at 2.2.2.2:2828. Bob's firewall sees the recognised sender address and passes the apparent response on to Bob's PC - and his Skype phone rings.

Doing the rounds

This description is of course somewhat simplified - the details depend on the specific properties of the firewalls used. But it corresponds in principle to our observations of the process of establishing a connection between two Skype clients, each of which was behind a Linux firewall. The firewalls were configured with NAT for a LAN and permitted outgoing UDP traffic.

Linux' NAT functions have the VoIP friendly property of, at least initially, not changing the ports of outgoing packets. The NAT router merely replaces the private, local IP address with its own address - the UDP source port selected by Skype is retained. Only when multiple clients on the local network use the same source port does the NAT router stick its oar in and reset the port to a previously unused value. This is because each set of two IP addresses and ports must be able to be unambiguously assigned to a connection between two computers at all times. The router will subsequently have to reconstruct the internal IP address of the original sender from the response packet's destination port.

Other NAT routers will try to assign ports in a specific range, for example ports from 30,000 onwards, and translate UDP port 1414, if possible, to 31414. This is, of course, no problem for Skype - the procedure described above continues to work in a similar manner without limitations.

It becomes a little more complicated if a firewall simply assigns ports in sequence, like Check Point's FireWall-1: the first connection is assigned 30001, the next 30002, etc. The Skype server knows that Bob is talking to it from port 31234, but the connection to Alice will run via a different port. But even here Skype is able to outwit the firewall. It simply runs through the ports above 31234 in sequence, hoping at some point to stumble on the right one. But if this doesn't work first go, Skype doesn't give up. Bob's Skype opens a new connection to the Skype server, the source port of which is then used for a further sequence of probes.

Skype can do port scans. Here it suceeds on port 38901 and connects through the firewall.

Nevertheless, in very active networks Alice may not find the correct, open port. The same also applies for a particular type of firewall, which assigns every new connection to a random source port. The Skype server is then unable to tell Alice where to look for a suitable hole in Bob's firewall.

However, even then, Skype doesn't give up. In such cases a Skype server is then used as a relay. It accepts incoming connections from both Alice and Bob and relays the packets onwards. This solution is always possible, as long as the firewall permits outgoing UDP traffic. It involves, however, an additional load on the infrastructure, because all audio data has to run through Skype's servers. The extended packet transmission times can also result in an unpleasant delay.

Use of the procedure described above is not limited to Skype and is known as "UDP hole punching". Other network services such as the Hamachi gaming VPN application, which relies on peer-to-peer communication between computers behind firewalls, use similar procedures. A more developed form has even made it to the rank of a standard - RFC 3489 "Simple Traversal of UDP through NAT" (STUN) describes a protocol which with two STUN clients can get around the restrictions of NAT with the help of a STUN server in many cases. The draft Traversal Using Relay NAT (TURN) protocol describes a possible standard for relay servers.
DIY hole punching

With a few small utilities, you can try out UDP hole punching for yourself. The tools required, hping2 and netcat, can be found in most Linux distributions. Local is a computer behind a Linux firewall (local-fw) with a stateful firewall which only permits outgoing (UDP) connections. For simplicity, in our test the test computer remote was connected directly to the internet with no firewall.

Firstly start a UDP listener on UDP port 14141 on the local/1 console behind the firewall:

local/1# nc -u -l -p 14141

An external computer "remote" then attempts to contact it.

remote# echo "hello" | nc -p 53 -u local-fw 14141

However, as expected nothing is received on local/1 and, thanks to the firewall, nothing is returned to remote. Now on a second console, local/2, hping2, our universal tool for generating IP packets, punches a hole in the firewall:

local/2# hping2 -c 1 -2 -s 14141 -p 53 remote

As long as remote is behaving itself, it will send back a "port unreachable" response via ICMP - however this is of no consequence. On the second attempt

remote# echo "hello" | nc -p 53 -u local-fw 14141

the netcat listener on console local/1 then coughs up a "hello" - the UDP packet from outside has passed through the firewall and arrived at the computer behind it.

Network administrators who do not appreciate this sort of hole in their firewall and are worried about abuse, are left with only one option - they have to block outgoing UDP traffic, or limit it to essential individual cases. UDP is not required for normal internet communication anyway - the web, e-mail and suchlike all use TCP. Streaming protocols may, however, encounter problems, as they often use UDP because of the reduced overhead.

Astonishingly, hole punching also works with TCP. After an outgoing SYN packet the firewall / NAT router will forward incoming packets with suitable IP addresses and ports to the LAN even if they fail to confirm, or confirm the wrong sequence number (ACK). Linux firewalls at least, clearly fail to evaluate this information consistently. Establishing a TCP connection in this way is, however, not quite so simple, because Alice does not have the sequence number sent in Bob's first packet. The packet containing this information was discarded by her firewall.
http://www.heise-security.co.uk/articles/82481





Skype’s Free Phone Call Plan Will Soon Have Annual Fee
Matt Richtel

Skype, the Internet calling service owned by eBay, said Tuesday that as of Jan. 1 it would begin charging $30 a year for unlimited calls to landline and mobile phones within the United States and Canada. Those calls had been free since last spring.

The new annual fee for unlimited calling, while still nominal compared with other Internet calling plans, is part of a broader strategy by eBay to expand Skype’s product offerings and revenue.

EBay, the online auction giant, paid $2.5 billion for Skype in October 2005, prompting criticism from some analysts that it had overpaid for a start-up company focused on a different market and technology.

EBay executives assert that Skype can help it by allowing low-cost voice and video communication between its buyers and sellers. In addition, eBay wants to capitalize on Skype’s base of 136 million registered users.

As a promotion, Skype began allowing its users to place free domestic “SkypeOut” calls from their computers to traditional and mobile phones last May. At the time, the company said the promotion would extend only through year’s end. The company is offering a half-price subscription to those who sign up before Jan. 31. Calls from one computer to another have been and will continue to be free.

“We see a willingness by consumers to make SkypeOut calls that are well priced,” said Don Albert, Skype’s general manager for North America. He noted that the cost was still a fraction of the typical $25 monthly fee that other Internet phone providers charge for unlimited calls. Mr. Albert declined to predict the adoption rate for the plan or the revenue it could bring in.

Despite the relatively low cost of the service, industry analysts said Skype was not considered to be serious competition in the telecommunications business. Skype, unlike Vonage, the cable companies and other competitors, generally requires users to download software and to make calls from the device on which it is installed.

“Skype requires a behavioral change. Consumers have grown quite comfortable using their telephones,” said Jeffrey Halpern, a telecommunications services industry analyst with Sanford C. Bernstein & Company. “I don’t view Skype as a real threat to the telephone companies or even Vonage or the cable companies.”

Over all, the Internet calling business is booming. Mr. Halpern said that by the end of the third quarter, there were around 8 million subscribers to Internet calling plans in the United States, up from 6.5 million in the previous quarter. That figure did not include users of Skype.

Mr. Albert, a former eBay executive who joined Skype this year, said the new prices were part of a broader plan.

“We get put in a bucket of being a cheap way to make phone calls, but our vision is quite a bit more expansive than that,” he said.

The company has been developing and deploying technology that allows Skype to be used on other devices, including wireless phones and pocket computers.

But potentially more significant innovations are planned for next year, when Skype will introduce services with Yahoo and Google that will allow Web surfers to click a button and call a business they have found during a search.

Mr. Albert said the concept, known as “click to call,” was an important example of combining eBay’s expertise in online sales with Skype’s capacity to allow people to make inexpensive calls.

Industry analysts have mixed opinions about how successful such a program can be and whether it can help justify the hefty price eBay paid for Skype.

Tim Boyd, an analyst with Caris & Company who has a buy rating on eBay, said he saw click-to-call as a “tremendous opportunity” for eBay to generate revenue by charging businesses for the calls.

But Mr. Boyd and other analysts were less sanguine about eBay’s hopes that its own auction buyers and sellers would become heavy adopters of Skype.

EBay has projected that those buyers and sellers will use the service to iron out details and provide basic support during the sales process.

“Many of the folks selling do not put a telephone number on their listings,” said Derek Brown, an analyst with Cantor Fitzgerald & Company, who has a buy rating on eBay stock. “It’s not because telecom costs are too high. It’s because it costs too much to have people answering the phones.”

Mr. Brown said eBay had yet to demonstrate how it could integrate Skype into its business in a way that would justify the acquisition costs.

In the third quarter, Mr. Brown noted, Skype generated $50 million in revenue, a mere 3 percent of eBay’s $1.45 billion in total revenue.

“We get lots of questions of when eBay is going to be able to monetize Skype,” Mr. Albert conceded. But he said the new calling plan underscored the company’s effort to do so.

“If you ask, ‘Was this worth our investment,’ you’d get an enthusiastic triple-thumbs-up from Meg Whitman,” eBay’s chief executive, Mr. Albert said.
http://www.nytimes.com/2006/12/13/te...y/13skype.html





Disrupter Man Goes After TV This Time
Kevin Maney

Few entrepreneurs have truly disrupted a single industry. Niklas Zennstrom has done it to two — and he has his sights on a third.

Zennstrom and business partner Janus Friis founded file-sharing service Kazaa, which by 2001 became the world's favorite way to steal copyrighted music. Entertainment companies all over the world lined up to sue. Next came Skype, the first globally popular free Internet calling service, which crumbled international telecom company business models. EBay bought Skype last October for $2.6 billion, and Zennstrom is Skype's CEO.

Now Zennstrom and Friis have a side endeavor. They've co-founded a secretive Internet TV venture called The Venice Project, which analysts say could threaten the viability of network television.

"There's never been a secret sauce" to his disruptive success, Zennstrom says with apparent modesty while flashing a grin. He creases his 6-foot-4 frame into a stuffed chair in his hotel room and looks more like a rumpled high-school chemistry teacher than a high-powered executive. "It's just that our timing has always been good."

In part, he's right. Zennstrom and Friis have never been first with a technology: They've followed with the right thing at the right time. Still, Zennstrom has established himself as a man the tech industry watches carefully. Hence the attention paid to The Venice Project, even though hundreds of video sites already crowd the Internet.

"Niklas and Janus … are two of the most extraordinary people I have ever met," says Tim Draper of venture capital firm Draper Fisher Jurvetson, which helped fund Skype. "I think they will succeed again and again."

Zennstrom, who hails from Sweden and lives and works in London, rarely gives interviews. This one is happening on his first trip to the USA in five years. He stayed out of the country to avoid being served in Kazaa lawsuits, which were recently settled.

He is just 40. His take from selling Skype to eBay is estimated at more than $400 million. Investors stand ready to back him. Zennstrom says he pledges himself to Skype and eBay for three to four years, but probably no longer.

"Don't expect to interview me in 20 years and I'm still CEO of Skype," he says.

In other words, Zennstrom could be starting companies for a long time to come — probably with Friis. Zennstrom is 10 years older and more of the leader. Friis is the hacker and tinkerer who gets the technology off the ground.

The biggest question about Zennstrom is whether he's good only at launching disruptive companies, not at building them into substantive businesses. Tech analysts say they still don't understand why eBay paid so much for Skype when similar free Internet calling services are offered by everyone from AOL to start-ups like Jajah.

136 million and growing

In an hour-long interview, Zennstrom does not seem to have an outsized ego — until he talks about his ambitions for Skype. When he started it in 2003, he told Fortune, "There is multibillion dollars in potential in Skype. We're not here to try to make some small business."

"It's the same plan," he says now. "We have 136 million users. There aren't many telephone companies that have more customers. We are still in growth mode. In terms of revenue per user, Verizon gets much more, but they also have much higher costs."

Zennstrom met Friis, a Dane, while working for Swedish telecom company Tele2. They left in 1999 to start an Internet company together to build a fast, easy-to-use technology called FastTrack. It was peer-to-peer (P2P) technology. It had no central data center, borrowing all the users' computers on the network to store and forward files.

It's a technical challenge, but if done well, P2P can be a cheap, fast way to move large amounts of data around the Net.

On top of FastTrack, Zennstrom and Friis built Kazaa, which surfaced just as the music industry shut down Napster in 2001. Millions of Napster users had become addicted to free music and switched to Kazaa because it was easy to use. Zennstrom and Friis became the Recording Industry Association of America's chief target.

After years of cat-and-mouse legal games, Zennstrom, Friis and Kazaa settled with the music industry in July for $100 million. They've rid themselves of Kazaa ownership, selling pieces in a series of legal maneuvers.

Kazaa set the stage for Skype. While considering what to do after Kazaa, Zennstrom says he and Friis thought about how "any digital content should be delivered over the Internet because it's so much more efficient." They then thought about the high cost of international phone calls, which are just another form of digital content.

"I remember us saying (around 2002) that Internet telephony should work by now," Zennstrom says. "We certainly didn't invent Internet telephony, but it wasn't very good and was too hard to use."

They realized that P2P could do for phone calls what it had done for music files. "We learned a lot by doing Kazaa," Zennstrom says. But they had to create a more sophisticated P2P, because calls must reach the right person and work with good quality in real time.

Still, when Zennstrom and Friis started Skype, they were considered pirates and outliers. "It was difficult to hire and raise money," Zennstrom says. But then Draper, who has always had a penchant for funding tech renegades, chipped in $8.5 million. "I recall first meeting Niklas in London," Draper says. "I had set up a meeting for half an hour, and I stayed for two."

Skype became the fastest-growing start-up in history. After 12 months, it was on pace to grow five times faster in numbers of users than eBay did in its first years. Seeing that, in 2005 eBay came calling.

Learning from eBay

"We didn't plan to sell," Zennstrom says. "We started a conversation with (eBay CEO) Meg Whitman because we thought we should work with eBay." He actually thought eBay wouldn't like Skype because a Skype voice connection could be a way for sellers and buyers to cut deals that eBay couldn't track.

Whitman saw something else: a fast-growing business that might also help eBay users talk to each other and close transactions more easily, especially those that involve big-ticket items like cars. "We always seek to remove friction from e-commerce," Whitman told USA TODAY soon after the Skype deal. "It leads to a better experience and an increase of velocity of trades."

She also liked Zennstrom and Friis. "They are impressive entrepreneurs who will be a great cultural fit with eBay," she said.

Zennstrom got thinking, too. He didn't want Skype to do an IPO in the dot-com bust years. Based in Europe, which is not known for Silicon Valley-style start-ups, Skype had trouble hiring executives who had been part of hyper-growth tech companies. And while Skype was growing like mad in Asia and Europe, it had trouble penetrating North America.

"We realized if we partnered with eBay, they could help us," Zennstrom says.

Whitman has been criticized for the deal by analysts and investors. She has not clearly shown how Skype helps the eBay site — though, on the flip side, it's clear that eBay's marketing muscle has helped Skype grow 122% in North America in 2006.

"In general, they're not doing a bad job in the VOIP (voice over Internet protocol) space," says Mirabel Lopez, vice president of research at Forrester Research. She pegs Skype revenue at $200 million in 2006, up from $60 million in 2005. "Since most people use it because it's free, the fact that they're making money at all is a good thing."

Zennstrom insists he's happy with the marriage. "You never know how the chemistry will be, but it's been really great," he says. "Meg did not impose on us to do everything the eBay way." He says he's learning a lot about management from Whitman and other eBay executives. Several attempts to talk to Friis were unsuccessful.

Fixing TV

The Venice Project is the brainchild of Zennstrom and Friis, but they aren't running it. Friis, though, spends significant time working on the new entity. EBay says this is fine and within the boundaries of the eBay-Skype merger.

The service is not yet live, and details are under wraps. It's difficult to say why The Venice Project will be much different from YouTube or AOL TV, except that it will — like Kazaa and Skype — be based on P2P technology. That could make The Venice Project cheaper and more flexible than other Internet video services, which centrally host videos on server farms.

Zennstrom describes it this way: "We're trying to do the full TV experience by taking the good things from television and putting them together with the Internet and video sharing." A blog on theveniceproject.com says, "We're fixing TV, removing artificial limits such as the number of channels that your cable or the airwaves can carry, and then bringing it into the Internet age, adding community features, interactivity, etc."

Significantly, The Venice Project will be a secure, rights-protected service that intends to work with content producers such as film studios and sit-com creators, not against them. This is Zennstrom learning from past mistakes.

And it will be ad supported. Zennstrom insists that The Venice Project will work in ways that are familiar to TV viewers — as simple to use as iTunes or an on-screen TV grid.

Interactive features

So The Venice Project is intended to be a pipeline directly between content producers and consumers, with relevant ads inserted on the fly — the way Google plops ads onto websites. Interactive features will let viewers rate content and form social groups around videos and programs.

If it takes off, The Venice Project could be Zennstrom's third disruptor, because it stands to knock cable TV services like Comcast and network TV affiliates out of their middleman positions. Of course, taking on such powerhouse industries is a tall order, and The Venice Project could get squashed before it makes a dent.

A few years from now, maybe Zennstrom will take charge of The Venice Project, or maybe he'll move on to a new target.

"Three to four years seems like a good time frame to make commitments," he says. "That's what I told Meg. I'm here and committed for some time. I want to build the business and contribute to eBay as well."

But after that, time to tee up the next disruptor.
http://www.usatoday.com/tech/news/20...ernet-tv_x.htm





Azureus Secures $12 Million in Series B Venture Financing
Next-Generation Video Distribution Platform Goes Live
Press Release

Palo Alto, CA -- Azureus, the company behind the most popular peer-to-peer (P2P) application for the distribution of large files, today launches a new digital media platform code named Zudeo. The service enables content providers to easily publish, showcase and distribute high resolution, long-form content, including video and games in high definition or DVD quality over the Internet, at no cost. Published content is accessible at www.zudeo.com, as well as within the Zudeo application.

Boasting more than 130 million application downloads and an online community of users spanning 100 countries, award-winning Azureus commands the largest installed base of BitTorrent users in North America and Europe.

The latest version of the application (v3.0), code named Zudeo, offers many innovative features, including content discovery through search, browsing, channels and tagging, as well as easier integration with firewalls and a completely revamped, easy-to-use interface. Additional features, including P2P streaming, will be released in the near future.

“Today, content owners and publishers can use Zudeo to freely promote and distribute their digital creations, without length or quality limitations. Furthermore, content creators and publishers can use our social networking tools to expose their content throughout the Web, including blogs and social networks,” said Gilles BianRosa, CEO, Azureus. “Zudeo enables fans to access a growing catalog of high resolution media content, and to easily share it with their friends or the world. The service is designed to offer a broad spectrum of content, spanning movies, shorts, animation, documentaries, music videos and games.”

For content providers, Zudeo serves as an alternative, low-cost distribution and marketing platform to distribute compelling, high-definition content to a global audience. Both large and small content owners can promote their works to their fan base through comprehensive discovery tools, as well as gauge market interest in specific territories. In addition, the company will unveil a series of content partnerships with leading media companies over the coming weeks and months.

Jarl Mohn, current Chairman of the Board of CNET Networks, former CEO of Liberty Digital and an Azureus Board member, adds, “Media companies are embracing digital media distribution, and Zudeo provides an effective and secure P2P platform to distribute content to their audiences.”

The company also announced a Series B financing of $12 million led by Redpoint Ventures. The round also included: Greycroft Partners, Alan Patricof’s new fund; Jarl Mohn, Chairman, CNET, and former CEO of Liberty Digital and E! Entertainment Television; and existing investor, BV Capital.
http://www.americanventuremagazine.c...hp?newsid=2057





GE's Access Distribution Adds FaceTime Communications to Complement Its Emerging Technologies Portfolio
Resellers Gain Access to Internet Security and Web Filtering Solutions for Total Security and Control Over Internet Use

Press Release

Access Distribution, a General Electric company and a leading value-added distributor of complex computing solutions, and FaceTime Communications, a provider of solutions for securing and managing real-time Internet communication applications, today announced a distribution agreement under which Access Distribution will offer FaceTime's Internet Security Edition product suite to more than 600 authorized value- added resellers in North America.

FaceTime Internet Security Edition is purpose-built to enable the safe and productive use of Internet applications including Web, instant messaging (IM), Web conferencing, peer-to-peer file sharing, Skype(TM) and more than 100 greynet applications. Combined with industry-leading SmartFilter(TM) Web filtering, FaceTime Internet Security Edition empowers enterprises to manage employee use of all Internet channels-both greynets and the Web-with a single solution to prevent inbound threats, minimize information leakage and control employee Internet use.

"The type of Internet traffic on enterprise networks today is no longer just email and Web traffic," said Dan Phelan, vice president of North American sales for FaceTime Communications. "Most organizations want to empower their employees with real-time collaborative applications, but they also have a real need to control employee use with powerful policies to ensure security of the organization's network resources as well as its confidential data."

A recent survey, Employee Use of Greynets: 2nd Annual Survey of Trends, Attitudes and Impact, conducted for FaceTime by NewDilligence, identifies the cost and problems caused in the enterprise by greynet applications. The survey indicates that threats borne by greynet applications have a high cost to the enterprise. In fact, eighty one percent of IT managers reported security incidents due to instant messaging or other greynets, costing companies an estimated $130,000 per year on average.

"FaceTime is fulfilling a need in the enterprise for added security measures to address new threats by real-time communication applications," said Scott Zahl, vice president, Emerging Technologies, Access Distribution. "FaceTime's products complement our network security technologies making it easier for resellers to expand their current solutions to fulfill new revenue opportunities."

The addition of FaceTime Communications complements Access Distribution's new Emerging Technologies business, which is focused on identifying and working with companies that have up-and-coming technologies predicted to have a high impact on the market and outpace mature technologies in both growth and profitability.

About FaceTime Communications

FaceTime enables the safe and productive use of greynets like instant messaging, VoIP, Web conferencing and P2P file sharing in addition to Web traffic. FaceTime Security Labs delivers the industry's first IMPact Index, which assesses "point-in-time" risks posed by viruses, worms and other malware propagating through greynet applications. Ranked number one in Enterprise IM Management by IDC in 2006, FaceTime's award-winning solutions are used by more than 800 customers, among them nine of the ten largest U.S. banks. FaceTime supports and has strategic partnerships with all leading public and private IM network providers, including AOL, Google, Microsoft, Yahoo!, IBM, Reuters, Bloomberg, and Jabber. FaceTime is headquartered in Foster City, California. For more information visit http://www.facetime.com/ or call 888-349-FACE.

About Access Distribution

Access Distribution, a General Electric company and part of the Capital Solutions business, is a premier value-added distributor of information technology products, solutions and services. With headquarters in Westminster, Colo., the company's breadth of service and depth of expertise offers its vendor and reseller partners a distinct set of services and processes to leverage as they take complex computer solutions to market. Access Distribution provides innovative solutions to increase its partners' profitability and competitive advantage within mature and emerging technology market segments.

Access Distribution has service, logistics and sales offices throughout the U.S., Canada and Europe. For additional information and press announcements, please visit our web site at http://www.geaccess.com/ or, to contact us by phone, call (800) 733-9333.
http://sev.prnewswire.com/multimedia...6122006-1.html





BeInSync Wants You to Be In Control
Lauren Simonds

Anyone who uses multiple computers — say a notebook while traveling, the computer at the office and, occasionally, the PC at home — knows that keeping all the files synchronized can feel an awful lot like working in a three-ring circus.

BeInSync, a leading a peer-to-peer (P2P) file-sharing program, lets you create a secure, private network between your various computers so that you always have the latest version of each file and folder on every computer.

We last reviewed BeInSync when it first came out two years ago, but today, the company announced the latest version that, according to Adi Ruppin, the company's director of marketing, makes the program more flexible and gives customers more control over sharing files.

"BeInSync Pro Version 2.5 does not have the cost, storage limitations or privacy concerns that come from storing files on third-party servers. Your storage is limited only by the size of your computer hard drives, and BeInSync provides simple, private access to your data from anywhere without the cost or complexity of other solutions," said Ruppin.

Version 2.5 offers the following new features:

Group Share Roles
Lets you share folders with other people and define the roles and privileges of the participants sharing each folder. Set documents, photos or videos as "read-only" or allow full read and write privileges to individuals.

BeInSync Toolbar for Internet Explorer
Access any of your remote computers or shared folders over the Web; set account configuration.

Unread File Alerts
Receive notifications when a file has been recently updated or not yet accessed.

One-Click BeInSync Installation
Instantly download and install BeInSync from a customer's Web account to any computer.

External Drive/Network Drive Support
Place shared folders on external or network drives.

You can download version BeInSync Pro 2.5 for a 30-day free trial. The program sells for 59.95 per year or $99.95 for two years. The company offers a basic version for free, which limits the number of files you can transfer per day.
http://www.smallbusinesscomputing.co...le.php/3646971





Peer-to-Peer Pressure

Illegal downloading is changing the shape of our TV schedules, says Stephen Armstrong

There’s something strange about Heroes. NBC’s autumn hit in America has everything a drama needs to be tagged “the next Lost”: a gorgeous young cast, hyped-up moral issues, dead loved ones who need avenging and a confusing puzzle that must be solved to avert global catastrophe. On its first night, it pulled in 14.3m viewers, the highest rating for an NBC drama debut in five years and a notable performance in a season mired in failure. Its success wasn’t entirely suprising: superheroes always do well when America’s paranoia is at its greatest. Add to that characters such as a Texan cheerleader who can heal from any injury, a heroin-addicted New York artist who can paint the future and a smouldering Indian scientist, all facing off against a serial killer who plans to nuke New York, and you have sure-fire talk-about TV.

What’s strange about Heroes is that it’s not just the most talked-about show in America. It’s huge over here. In the chat rooms on the Internet Movie Database, almost half of the Heroes comments are posted from the UK. Our TV gossip sites are alive with conversation about plot twists in episode nine. Yet Heroes doesn’t reach our screens until next year. The Sci Fi channel launches it in February; BBC2 will screen it in the summer. The series is too new for a US DVD release, so how are all these people watching it? Have British youths developed their own mysterious superpower, the ability to watch American television across the ocean? Well, no. According to the online piracy analyst Envisional, our main superpower is nicking stuff off the internet.

Envisional’s report finds that Brits lead the world in illegal programme downloads — making 18% of all transactions on “peer-to-peer” websites such as SuperTorrents and TV Links, which connect downloaders to one another. It’s a barter-based economy: you go onto the site having recorded a programme on your state-of-the-art laptop or hard-disk recorder, and swap it for other programmes; most are available pretty much in real time. One episode of Six Feet Under was ready to view less than half an hour after transmission. The figures aren’t earth-shatteringly huge, but they are building: Envisional estimates that series four of 24, for instance, was downloaded roughly 95,000 times per episode.

We have been here before. Napster launched in 1999 as a music version of the above, and had at least 27m users two years later, when it was closed down by record-company lawsuits. “What we are concerned about is making the same mistake the music industry has made,” says Rod Henwood, new-business director at Channel 4. “It let the illegal sector grow, and that sector still commands almost 90% of online music consumption.” Henwood says the risks are high: in 2005, music-CD sales slipped by 3% as consumers migrated to the net, with teenagers moving fastest.

It looks as if the same thing is about to happen to the humble television set.

Channel 4’s forecasters estimate that between 10% and 30% of today’s viewers will end up watching most of their TV programmes as downloads on computers or iPods within the next few years. A new generation is on the way, one for which a TV set is just one way to access “product”.

It is already affecting broadcasters’ scheduling plans. In the United States, ABC starts the new segment of Lost on February 7. Although BSkyB refuses to confirm its start date, the industry expects it to air episodes within days of their American screening — in part to head off the peer-to-peer community. BSkyB is paying £975,000 per episode for Lost, and is relying on fans to take up subscriptions to make it pay; free file-sharing isn’t in the business plan.

British broadcasters are trying to get in there first. Channel 4 launched 4oD, a sort of TV iTunes, last week. It hopes that 4oD, with an archive of 500 programmes and two new shows per week to rent or purchase, will pull downloaders into the legal sector. In a trial on cable last month, 1.5m downloads were made in less than four weeks. BSkyB, BT and the BBC are considering similar services.

According to Edward Waller, editor of the TV trade bible C21, this may alter programming for ever. Trials of a 4oD-style service by the US network ABC found that scripted drama performed best, while reality shows were largely shunned. One downside is that, as viewers have to elect to watch the programmes, rather than perhaps stumbling on them, every show will live or die by ratings and off-screen marketing. Unfashionable areas such as news and documentaries are liable to suffer, as is the last great communal experience: chatting about yesterday’s telly with your colleagues.

One of the great triumphs of Saturday-evening television recently has been that shows such as The X Factor and Doctor Who have proved genuine family viewing. In many households, 5-7pm on Saturday is the only point in the week when everyone spends time in the same room. Downloading is likely to cut that last bond. The Heroes may save the planet, but they are helping to make the world a lonelier place.
http://www.timesonline.co.uk/article...488577,00.html





Internet Piracy the Long Term Threat to the Film Industry
Mike Ellis, Senior Vice President and Asia Pacific Regional Director, Motion Picture Association (MPA)

Today the films of members of the Motion Picture Association of America are shown in theaters in more than 150 countries. Tens of thousand s of their films are also sold or rented in home video format to consumers in nearly every country of the world.

The MPA works internationally – including within 14 countries and territories around the Asia Pacific region – to fight piracy and promote and protect intellectual property rights. This worldwide activity has one principal purpose: to develop and support the film industry worldwide. When we say “the film industry”, we do not mean simply America’s film industry. We mean the film businesses in all nations.

A recent global study examining the impact of motion picture piracy and consumer behavior underscored the importance of intellectual property to economic growth worldwide and revealed the extent of damage caused by copyright theft to creative industries all around the world. The study, undertaken by the independent research firm LEK Consulting on behalf of the MPA which represents major US motion picture companies, showed that Internet piracy cost the film industry globally US$7.1 billion of potential revenue in 2005.

It has been estimated that over 90 percent of traffic worldwide on peer-to-peer (P2P) computer networks illegally infringes the copyrights of movie, music and software businesses. P2P networks also play host to large-scale trafficking in pornography, including child pornography and provide opportunities for identity thieves to obtain personal and financial information from network users who in most cases have no idea that their data is vulnerable.

Internet piracy also includes what is known as auction piracy, the sale of pirated CD’s and DVD’s via Internet auction. In 2005 the MPA’s operations in the Asia Pacific region seized 3,362 optical disc burners, an increase of 220 percent over the preceding year.

The driver of this move to burner labs (from factory replication) has been both economic and a response to increased anti-piracy enforcement. Burner labs can contain dozens of low-cost burners and are often located in apartments and small retail premises, making them difficult to locate. Like replication factories, burner labs are capable of producing tens of millions of pirate DVD-Rs or CD-Rs per year, yet are inexpensive and easy to set up, and if raided, easily and quickly replaceable.

Governments and copyright owners employ a multi-pronged approach to fighting piracy, including educating people about the consequences of piracy, working to ensure movies are available legally using advanced technology and taking enforcement action against Internet thieves and optic disc pirates, rooting out pirate operations around the world.

The foundation of any campaign against unauthorized downloading must be education; people must be made to understand the cost – to businesses, to jobs, to national economies, to the development of national creative industries – of stealing intellectual property.

Education about Internet piracy is critical because many P2P users are unaware that P2P file sharing can open their computers to the Internet and to potentially millions of other Internet users, with very few controls. In many countries, individuals and organizations have seen valuable data uploaded from their computers without their knowledge resulting in significant damage.

All around the world, legislatures are trying to implement and update intellectual property protection laws to keep pace with technological development; Asia is no different and each country is at a different stage in terms of implementing and updating these laws.

The MPA is working every day, all around the Asia Pacific region and the world to help lawmakers better understand and protect copyright, to help law enforcement agencies and officers better identify and prosecute copyright theft and to help consumers understand that IP theft is no different than theft of physical property.

In addition, we maintain active litigation programs in many countries aimed at defending our member companies’ copyrights in the courts against unauthorized and illegal infringement. For the most part, our targets are not only shutting down their operations but also paying our member companies damages.

Because the Internet infrastructure is unevenly developed around the Asia Pacific region, in some countries the treat posed to the entertainment industry by Internet piracy is not seen as either imminent or particularly worrisome. That will change, more than likely at “internet speed”.

The industry must be prepared to address this threat. To develop a strategy and an action plan, cooperation will be required – not only within individual countries, but also with industry organizations and governments regionally and globally, where the threat from Internet piracy may be more advanced and where strategies may be already in place to address the threat.
http://movies.monstersandcritics.com..._film_industry





Would Jesus Get Music From P2P Networks?

Movie studios and record labels have tried a number of different approaches to fighting piracy: lawsuits, law changes, hacking, even setting up their own private police force -- just about everything except, you know, actually trying to compete against it. Movie studios have also tried to guilt people to stop downloading movies, by having ridiculously well-paid actors tell moviegoers that downloading hurts the movie industry's "little people", and now the Christian music industry is getting in on the act by trying to cast downloading and file-sharing as a moral issue. While apparently the RIAA and MPAA feel that the mere existence of piracy morally justifies their extreme actions, the president of a gospel music trade group says his organization "certainly" can address piracy as a moral issue and expects it to better resonate with his audience than the general public. Of course, just because they make religious music doesn't mean they're too different from the secular groups, as the guy says of downloading, "It's like stealing. You wouldn't walk into a Christian bookstore and steal a Bible off the shelf," when, of course, copyright infringment isn't theft at all. Apparently a lot of young Christian music fans see downloading as "helping spread the word" -- which, either in a promotional or religious sense, they're doing, since Christian music sales are growing strongly. So chalk up one more similarity to those Hollywood heathens: these religious music groups badly misunderstand the value of free music as a promotional tool, whether it's promoting other products or their religious message.
http://www.techdirt.com/article.php?...12/082659#c118





New GigaTribe software is now available for free download at www.gigatribe.com.
Press Release

GigaTribe is the new & improved version of what was previously released under the name of "TribalWeb". The name GigaTribe reflects the fact that very large files (hence the term "Giga" as in gigabyte) can easily be transferred between friends, family, or co-workers (hence the term "Tribe").

GigaTribe allows users to easily:

- Share folders on their computer with friends (or anyone else) located anywhere.
- Transfer huge files. Even if one user shuts down their computer, the download can resume with no loss of data the next time both users are online.
- Access folders on their computer from another location.

Previously, the most common way to transfer large files was with complicated FTP solutions, which don't offer any of the other folder-sharing features found in GigaTribe. GigaTribe is 100% safe (128 bit key blowfish encryption), so only people in a user's network can see the folders he or she is sharing. Best of all, it's free. Furthermore, files are downloaded at the maximum speed possible. Finally, GigaTribe is free from any adware, spyware, or pop-ups of any kind.

A premium version is also available for those users who wish to enjoy advanced features. This premium version of GigaTribe, available for a one-time fee of $20, includes:
- unlimited number of simultaneous downloads (free version only allows one download at a time),
- sharing of folders with specific groups of users (ie: access for friends group only, access for family group only, etc...),
- multi-source download (if a file a user wants is available on more than one other person on the network, it can be downloaded faster by downloading from multiple sources),
- upload bandwidth control (users can limit the speed at which others download items),
- password protection of specific folders,
- free updates of any newer versions.

For more information, or to download free GigaTribe software, please go to www.gigatribe.com.
http://www.gigatribe.com/tour/gigatribe_news1.php?lg=us





MySpace is Your Space Unless it's Really Someone Else's Space
Jon Healey

In a matter of months, this online phenomenon went from zero users to millions. It was hugely popular with media-loving teens and young adults, whose participation drew in even more people. And for many, it became a daily obsession.

In 1999, the phenomenon was called Napster, a service that allowed users to swap songs through the Internet. Two years later, a pair of competing file-sharing networks -- Morpheus and Kazaa -- enjoyed a similarly fantastic rise. In 2005, a new version arrived -- this time in the form of the social-networking site MySpace (and, in a more modest way, Facebook), which allowed people to post profiles to the Web and communicate with friends through them. This year's model is the video-sharing site YouTube.

As of October, MySpace had almost 50 million users, according to Nielsen/NetRatings, making it the runaway king of social networks. YouTube, meanwhile, had 30 million users, making it the most popular user-generated video site.

The two companies differ in fundamental ways from their file-sharing predecessors, but their popularity flows in part from the same source: a supply of free media contributed by users. On YouTube, it is video clips; on MySpace, it is clips (often provided through links to YouTube) and music. In fact, the two sites each show more videos than any Web site except Yahoo, according to a recent study by comScore Media Metrix, which tracks online activity.

And now, with both sites drawing flak from copyright holders, the question is whether they'll follow their predecessors' rapid path downward, too.

The descent of the file-sharing companies was fueled mainly by their inability to satisfy the demand for free downloads that they had stoked. When the courts ordered the original Napster to prevent users from downloading copyrighted songs, for instance, it lost more than 60 percent of its audience in five months, according to comScore Media Metrix. It never recovered.

MySpace and YouTube are in a different position legally and economically. They're Web sites, not software programs designed to copy digital files (so the companies can argue that they are protected from liability by special rules for Internet providers). And their owners -- News Corp. and Google, respectively -- have very deep pockets and can afford to fight any challenges.

Still, the communities they have created rely to a great extent on users' ability to express themselves through media, and frequently the copyrights to that media are owned by a major music company, TV network or studio. While arguing that they aren't liable for their users' infringements, the companies also have tried to placate copyright owners by striking deals to share revenue with them (e.g., YouTube's deals with Warner Music Group and Universal Music Group) or sell their content (e.g., MySpace's deal with Snocap to help sell songs from unsigned artists).

But the major labels and studios have not been mollified and have continued to press the companies to block copyrighted works from being posted on their sites unless specifically authorized. YouTube is developing technology to do just that.

Depending on how restrictive copyright owners decide to be, MySpace and YouTube could face a Hobson's choice. If they accede to the demands of Hollywood and the record labels and allow only a fraction of their works to be posted, users might be driven away because they can't express themselves the way they want to. And as their audiences thin, so will the glue that binds many users. It's the "network effect" in reverse: As users leave, the sites' breadth diminishes, prompting more people to go elsewhere.

Alternatively, MySpace and YouTube could refuse and continue letting users post whatever songs or clips they please, removing material only if the copyright holder complains. Some copyright specialists argue that MySpace and YouTube are shielded by the 1998 Digital Millennium Copyright Act, which exempts Internet service providers from liability as long as they remove infringing material when asked. But other experts disagree, saying the exemption doesn't apply to MySpace and YouTube. Universal Music Group, among others, doesn't believe it does; it sued MySpace and News Corp. for copyright infringement Nov. 17.

It's ironic to see News Corp., whose 20th Century Fox movie studio helped bring the lawsuits against Kazaa, Morpheus and numerous individual file sharers, on the defensive. At the same time, it's refreshing to see an important copyright-law case litigated by parties with comparable resources on both sides, rather than having the entertainment industry pound away at much smaller figures.

The best result would be for Universal and its entertainment brethren to work out a way with MySpace and YouTube to turn people's enthusiasm for posting songs and clips into a robust revenue stream -- assuming that the sites can gin up enough money to make everybody happy. In another parallel with the original Napster, MySpace and YouTube haven't found a way yet to generate much revenue from advertisers or users. And the longer that remains true, the greater the chance that the companies will meet the same fate.
http://sfgate.com/cgi-bin/article.cg...NG89MRRVR1.DTL





Bush 'Privacy Board' Just a Gag
Ryan Singel

The first public meeting of a Bush administration "civil liberties protection panel" had a surreal quality to it, as the five-member board refused to answer any questions from the press, and stonewalled privacy advocates and academics on key questions about domestic spying.

The Privacy and Civil Liberties Oversight Board, which met Tuesday, was created by Congress in 2004 on the recommendation of the 9/11 Commission, but is part of the White House, which handpicked all the members. Though mandated by law in late 2004, the board was not sworn in until March 2006, due to inaction on the part of the White House and Congress.

The three-hour meeting, held at Georgetown University, quickly established that the panel would be something less than a fierce watchdog of civil liberties. Instead, members all but said they view their job as helping Americans learn to relax and love warrantless surveillance.

"The question is, how much can the board share with the public about the protections incorporated in both the development and implementation of those policies?" said Alan Raul, a Washington D.C. lawyer who serves as vice chairman. "On the public side, I believe the board can help advance national security and the rights of American by helping explain how the government safeguards U.S. personal information."

Board members were briefed on the government's NSA-run warrantless wiretapping program last week, and said they were impressed by how the program handled information collected from American citizens' private phone calls and e-mail.

But the ACLU's Caroline Fredrickson was quick to ridicule the board's response to the administration's anti-terrorism policies, charging that the panel's private meetings to date largely consisted of phone calls with government insiders and agencies.

"When our government is torturing innocent people and spying on Americans without a warrant, the PCLOB should act -- indeed, should have acted long ago," Fredrickson said. "Clearly you've been fiddling while Rome burns. This board needs to bring a little sunshine. So far America is kept in the dark -- and this is the first public meeting you have had."

Lisa Graves, the deputy director of the Center for National Security Studies, asked the board two simple questions: Did they know how many Americans had been eavesdropped on by the warrantless wiretapping program, and, if so, how many?

Raul acknowledged in a roundabout way that the data existed, but said it was too sensitive to release. Graves then asked if the board had pushed to have that data made public, as the Justice Department is required to do with typical spy wiretaps.

Raul declined to say. "It is important for us to retain confidentiality on what recommendations we have and haven't made," he said.

Graves tried to push the issue of whether the board was going to be public or private, but chairwoman Carol Dinkins politely cut her off and ended the question-and-answer session.

Board member Lanny Davis, who had introduced himself by saying he grew up in a household where the ACLU was considered a "heroic organization," jumped in to explain why the nation's most prominent privacy board won't be transparent about whether it is urging more transparency.

"Congress put us in the office of the president, we didn't," Davis said. "Had Congress wanted us to be an incensement agency, it would have made us independent."

The sparsely attended meeting shaped up as a mostly one-way conversation, with attendees offering suggestions on how the board could transform itself into an effective organization by building on the work of earlier government privacy panels.

Fred Cate, a cybersecurity professor at Indiana University, stressed that anti-terrorism programs that collect and sift through data on Americans -- such as the no-fly list and the recently announced Automated Targeting Center that has been computing terrorism quotients for those flying in and out of the country for more than five years -- need to have a robust way for people to contest the scores and underlying data.

"Redress seems to be the foundation of any system," Cate said. "The only certainty in this entire field is that there will be false positives."

The committee members largely kept their views to themselves, and the press was barred from posing questions during the two short public question periods. Dinkins, the board's chairwoman, who is a partner at the same law firm where Attorney General Alberto Gonzales once worked, offered little beyond pleasantries. Another board member, Francis Taylor, never spoke.
http://www.wired.com/news/technology...tw=wn_index_28





Homeland Security Chief Defends Real ID Plan
Anne Broache

U.S. Department of Homeland Security Secretary Michael Chertoff on Thursday defended forthcoming national ID cards as vital for security and consistent with privacy rights.

Chertoff said one of his agency's top goals next year is to forge ahead with recommendations for the controversial documents established by a federal law called the Real ID Act in May 2005. By 2008, Americans may be required to present such federally approved cards--which must be electronically readable--to travel on an airplane, open a bank account or take advantage of myriad government services such as Social Security.

"I think this is an example (of) when security and privacy go hand in hand," the Homeland Security chief said in a half-hour speech at George Washington University here. "It is a win-win for both."

The importance of such documents was magnified by an announcement Wednesday, Chertoff said. Federal authorities reported that they had made more than 1,200 arrests related to immigration violations and unmasked criminal organizations stealing and trafficking in genuine birth certificates and Social Security cards belonging to U.S. citizens.

"Do you think your privacy is better protected if someone can walk around with phony docs with your name and your Social Security number, or is your privacy better protected if you have the confidence that the identification relied upon is in fact reliable and uniquely tied to a single individual?" Chertoff asked rhetorically.

The upcoming federally approved IDs are intended to be a secure, tamperproof means of protecting Americans' identities while keeping out terrorists and other wrongdoers, Chertoff said.

The Homeland Security chief, who is nearing his two-year mark with the agency, was likely trying to quell rampant skepticism about the IDs voiced by some privacy advocates, immigrants and other groups. Some have said they fear that the IDs are a stepping stone to a veritable police state, complete with ready surveillance of individuals.

Some have argued that the idea of creating more tamperproof IDs is only a marginally better way to screen out those intent on committing terrorist acts because ID cards don't even begin to tackle a core crime prevention challenge: determining a person's unspoken intentions.

State governments have also been critical of the 2008 deadline and what they have said amounts to an unfunded mandate to switch over their systems. A September study released by the National Governors Association, National Conference of State Legislatures and American Association of Motor Vehicle Administrators estimated that the overhaul of their identification systems (PDF) would cost states more than $11 billion over five years. The New Hampshire state legislature even considered passing a law earlier this year that would prohibit the state from complying with the federal Real ID law.

Homeland Security has yet to issue congressionally mandated recommendations for the cards, so it's unclear how, exactly, they would work. The cards must contain, at a minimum, a person's name, birth date, gender, ID number, digital portrait, address, "physical security features" to prevent tampering or counterfeiting and a "common machine-readable technology" specified by Homeland Security.

A recent draft report by a DHS advisory committee (PDF) advised against using radio frequency identification technology, or RFID, in tracking humans because of privacy concerns.

The purpose of Chertoff's Thursday morning speech was to reflect on the agency's work during the past year and to outline goals for 2007. For the past year, he focused on three major areas: immigration and border security, Hurricane Katrina recovery and a foiled terrorism plot originating from London in August.

Conspicuously absent was any mention of the department's cybersecurity plans. After more than a year of delay, Chertoff hired Gregory Garcia, who had been working as a vice president at the Information Technology Association of America lobby group, as the department's first assistant secretary for cybersecurity. That step came after the department had sustained repeated bashing of its efforts in that realm from members of Congress.
http://news.com.com/Homeland+Securit...3-6143862.html





U.S. Is Dropping Effort to Track if Visitors Leave
Rachel L. Swarns and Eric Lipton

In a major blow to the Bush administration’s efforts to secure borders, domestic security officials have for now given up on plans to develop a facial or fingerprint recognition system to determine whether a vast majority of foreign visitors leave the country, officials say.

Domestic security officials had described the system, known as U.S. Visit, as critical to security and important in efforts to curb illegal immigration. Similarly, one-third of the overall total of illegal immigrants are believed to have overstayed their visas, a Congressional report says.

Tracking visitors took on particular urgency after the Sept. 11 terrorist attacks, when it became clear that some of the hijackers had remained in the country after their visas had expired.

But in recent days, officials at the Homeland Security Department have conceded that they lack the financing and technology to meet their deadline to have exit-monitoring systems at the 50 busiest land border crossings by next December. A vast majority of foreign visitors enter and exit by land from Mexico and Canada, and the policy shift means that officials will remain unable to track the departures.

A report released on Thursday by the Government Accountability Office, the nonpartisan investigative arm of Congress, restated those findings, reporting that the administration believes that it will take 5 to 10 years to develop technology that might allow for a cost-effective departure system.

Domestic security officials, who have allocated $1.7 billion since the 2003 fiscal year to track arrivals and departures, argue that creating the program with the existing technology would be prohibitively expensive.

They say it would require additional employees, new buildings and roads at border crossings, and would probably hamper the vital flow of commerce across those borders.

Congress ordered the creation of such a system in 1996.

In an interview last week, the assistant secretary for homeland security policy, Stewart A. Baker, estimated that an exit system at the land borders would cost “tens of billions of dollars” and said the department had concluded that such a program was not feasible, at least for the time being.

“It is a pretty daunting set of costs, both for the U.S. government and the economy,” Mr. Stewart said. “Congress has said, ‘We want you to do it.’ We are not going to ignore what Congress has said. But the costs here are daunting.

“There are a lot of good ideas and things that would make the country safer. But when you have to sit down and compare all the good ideas people have developed against each other, with a limited budget, you have to make choices that are much harder.”

The news sent alarms to Congress, where some Republicans and Democrats warned that suspending the monitoring plan would leave the United States vulnerable.

Representative Dana Rohrabacher, a California Republican who is a departing subcommittee chairman on the House International Relations Committee, said the administration could not say it was protecting domestic security without creating a viable exit monitoring system.

“There will not be border security in this country until we have a knowledge of both entry and exit,” Mr. Rohrabacher said. “We have to make a choice. Do we want to act and control our borders or do we want to have tens of millions of illegals continuing to pour into our country?”

Representative Bennie Thompson, the Mississippi Democrat who is set to lead the Homeland Security Committee, also expressed concern.

“It is imperative that Congress work in partnership with the department to develop a comprehensive border security system that ensures we know who is entering and exiting this country and one that cannot be defeated by imposters, criminals and terrorists,” Mr. Thompson said in a statement Thursday.

In January 2004, domestic security officials began fingerprint scanning for arriving visitors. The program has screened more than 64 million travelers and prevented more than 1,300 criminals and immigration violators from entering, officials said.

Homeland Security Secretary Michael Chertoff and other officials often call the program a singular achievement in making the country safer. U.S. Visit fingerprints and photographs 2 percent of the people entering the country, because Americans and most Canadians and Mexicans are exempt.

Efforts to determine whether visitors actually leave have faltered. Departure monitoring would help officials hunt for foreigners who have not left, if necessary. Domestic security officials say, however, it would be too expensive to conduct fingerprint or facial recognition scans for land departures. Officials have experimented with less costly technologies, including a system that would monitor by radio data embedded in a travel form carried by foreigners as they depart by foot or in vehicles.

Tests of that technology, Radio Frequency Identification, found a high failure rate. At one border point, the system correctly identified 14 percent of the 166 vehicles carrying the embedded documents, the General Accountability Office reported.

The Congressional investigators noted the “numerous performance and reliability problems” with the technology and said it remained unclear how domestic security officials would be able to meet their legal obligation to create an exit program.

Some immigration analysts said stepping away from the program raised questions again about the commitment to enforce border security and immigration laws.

A senior policy analyst at the Center for Immigration Studies, Jessica Vaughn, said the government had long been too deferential to big businesses and travel groups that raised concerns that exit technology might disrupt travel and trade.

“I worry that the issue of cost is an excuse for not doing anything,” said Ms. Vaughn, whose group advocates curbing immigration. Domestic security officials said they still hoped to find a way to create an exit system at land borders. “We would to do more testing,” a spokesman for the department, Jarrod Agen, said. “We are evaluating the initial tests to determine how to move forward.”
http://www.nytimes.com/2006/12/15/wa... tner=homepage





U.S. Subpoena Is Seen as Bid to Stop Leaks
Adam Liptak

Federal prosecutors are trying to force the American Civil Liberties Union to turn over copies of a classified document it received from a source, using what legal experts called a new extension of the Bush administration’s efforts to protect national-security secrets.

The novelty in the government’s approach is in its broad use of a grand jury subpoena, which is typically a way to gather evidence, rather than to confiscate all traces of it. But the subpoena issued to the A.C.L.U. seeks “any and all copies” of a document e-mailed to it unsolicited in October, indicating that the government also wants to prevent further dissemination of the information in the document.

The subpoena was revealed in court papers unsealed in federal court in Manhattan yesterday. The subject of the grand jury’s investigation is not known, but the A.C.L.U. said that it had been told it was not a target of the investigation.

The subpoena, however, raised the possibility that the government had found a new tool to stop the dissemination of secrets, one that could avoid the all but absolute constitutional prohibition on prior restraints on publication.

The disputed document, according to the A.C.L.U., is three-and-a-half pages long and unremarkable, and its disclosure would be only mildly embarrassing to the government. It added that the document “has nothing to do with national defense.”

“The government may be wanting to have its cake and eat it, too,” said Rodney A. Smolla, the dean of the University of Richmond’s law school. “It may want to present this to the court as not carrying heavy First Amendment implications. But to the extent the government wants to prevent the A.C.L.U. from disclosing the content of the document by virtue of this subpoena, it is a prior restraint.”

John C. Eastman, a law professor at Chapman University, disagreed, saying that the subpoena was unusual but not improper and a sign of a moderate approach to a significant problem.

“Assuming it’s properly classified,” Professor Eastman said of the document, “I actually think the government is bending over backwards to accommodate the A.C.L.U. rather than pulling the trigger in prosecuting them.”

“I’m not troubled by the fact that when we’re dealing with classified documents there may be action taken to retrieve them,” he added.

The A.C.L.U. said the subpoena was an effort to chill speech about the Bush administration. “The government is involved in a very conscious effort to suppress its critics,” said Anthony D. Romero, the A.C.L.U.’s executive director.

Lauren McDonough, a spokeswoman for Michael J. Garcia, the United States attorney in Manhattan, declined to comment beyond acknowledging the A.C.L.U.’s filing.

In the past, the government has fired and prosecuted government officials who provided classified information to people not authorized to have it. It has also tried to force reporters and others to identify the government officials who leaked to them.

But the Supreme Court has drawn the line at efforts to restrain or punish the dissemination of truthful information about matters of public concern.

The Bush administration has been particularly vigilant in trying to keep its secrets. It has threatened, for instance, to prosecute reporters for publishing classified information.

The A.C.L.U.’s lawyers said in court papers filed Monday that such subpoenas, if upheld by the court, would pose a direct threat to journalists.

“Many of the most important news articles of the past year (such as those concerning N.S.A. eavesdropping, rendition of foreign prisoners of our nation to other nations, Defense Secretary Rumsfeld’s views on the deteriorating situation in Iraq, National Security Advisor Hadley’s assessment of Iraqi Prime Minister Maliki, and the report on the Iraq insurgency’s funding sources) have been based on classified documents leaked to reporters,” the group’s motion said.

Those articles, the motion continued, “could not be prepared and published as they have been were the government allowed to use subpoenas to confiscate ‘any and all’ copies of classified documents it learns are in the hands journalists and other public advocates and critics.”

Experts in First Amendment law said that political advocacy groups like the A.C.L.U. are entitled to the same constitutional free speech-protections that journalists receive.

“In this case,” said Floyd Abrams, a First Amendment lawyer, “the A.C.L.U.’s function is presslike” in that it collects, analyzes and disseminates information about the government.

In its motion to quash the subpoena, the A.C.L.U. said, “The document is nothing more than a policy, promulgated in December 2005.”

It added, “The document contains no information concerning matters such as troop movements, communications methods, intelligence sources or the like.”

The group’s lawyers have agreed for now not to disclose the contents of the document, but hyperlinks to the papers posted yesterday on its Web site include the word “torture.”

The identity of the source is known to both the A.C.L.U. and the government, the organization’s lawyers said. The A.C.L.U. declined to name the source.

In November, Jennifer G. Rodgers, a federal prosecutor, called the A.C.L.U. and demanded the return of the document and all copies, according to court documents. She knew the date on which it had been e-mailed to the group, court papers say.

A subpoena followed. The A.C.L.U. moved to quash it, and Judge Jed S. Rakoff of the Federal District Court in Manhattan yesterday ordered the unsealing of the organization’s filings and the subpoena itself. The judge will rule on the motion to quash shortly.

The Espionage Act makes it a crime for people who have unauthorized possession of some kinds of national security information to receive, retain, disseminate or refuse to turn it over to the government when asked. But A.C.L.U. lawyers say the document does not meet the statute’s definition and that, in any event, a subpoena is an improper way to enforce the law.

In its filing, the A.C.L.U. also argues that the government is misusing the grand jury that issued the subpoena.

“Despite extensive research,” the motion to quash says, “we have been unable to find a single reported decision even mentioning, much less enforcing, a subpoena purporting to preclude the subpoenaed party from retaining a copy of subpoenaed documents. There is no possible argument that there is an investigative purpose to such a subpoena.”
http://www.nytimes.com/2006/12/14/wa... tner=homepage





A Gag on Free Speech

The Bush administration is trampling on the First Amendment and well-established criminal law by trying to use a subpoena to force the American Civil Liberties Union to hand over a classified document in its possession. The dispute is shrouded in secrecy, and very little has been made public about the document, but we do not need to know what’s in it to know what’s at stake: if the government prevails, it will have engaged in prior restraint — almost always a serious infringement on free speech — and it could start using subpoenas to block reporting on matters of vital public concern.

Justice Department lawyers have issued a grand jury subpoena to the A.C.L.U. demanding that it hand over “any and all copies” of the three-and-a-half-page government document, which was recently leaked to the group. The A.C.L.U. is asking a Federal District Court judge in Manhattan to quash the subpoena.

There are at least two serious problems with the government’s action. It goes far beyond what the law recognizes as the legitimate purpose of a subpoena. Subpoenas are supposed to assist an investigation, but the government does not need access to the A.C.L.U.’s document for an investigation since it already has its own copy. It is instead trying to confiscate every available copy of the document to keep its contents secret. The A.C.L.U. says it knows of no other case in which a grand jury subpoena has been used this way.

The subpoena is also a prior restraint because the government is trying to stop the A.C.L.U. in advance from speaking about the document’s contents. The Supreme Court has held that prior restraints are almost always unconstitutional. The danger is too great that the government will overreach and use them to ban protected speech or interfere with free expression by forcing the media, and other speakers, to wait for their words to be cleared in advance. The correct way to deal with speech is to evaluate its legality after it has occurred.

The Supreme Court affirmed these vital principles in the Pentagon Papers case, when it rejected the Nixon administration’s attempts to stop The Times and The Washington Post from publishing government documents that reflected badly on its prosecution of the Vietnam War. If the Nixon administration had been able to use the technique that the Bush administration is trying now, it could have blocked publication simply by ordering the newspapers to hand over every copy they had of the papers.

If the A.C.L.U.’s description of its secret document is correct, there is no legitimate national defense issue. The document does not contain anything like intelligence sources or troop movements, the group says. It is merely a general statement of policy whose release “might perhaps be mildly embarrassing to the government.” Given this administration’s abysmal record on these issues, this case could set a disturbing and dangerous precedent. If the subpoena is enforced, the administration will have gained a powerful new tool for rolling back free-speech rights — one that could be used to deprive Americans of information they need to make informed judgments about their elected leaders’ policies and actions.
http://www.nytimes.com/2006/12/15/opinion/15fri1.html





Why Cell Phone Outage Reports Are Secret
Bob Sullivan

Consumers have no idea how reliable their cell phone service will be when they buy a phone and sign a long-term contract. The Federal Communications Commission could offer some guidance, but it won't. The agency refuses to make public a detailed database of cell phone provider outages that it has maintained since 2004.

A federal Freedom of Information Act request for the data, filed in August by MSNBC.com, has been rejected by the agency. The stated reasons: Release of the information could help terrorists plan attacks against the United States, and it would harm the companies involved.

Complaints about cell phone service are near the top of every list of consumer gripes. The Illinois attorney general’s office, for example, last year ranked cell phone complaints as the fourth-most-common complaint, trailing only gas prices, credit card firms and home improvement scams.

To find out if a cell phone carrier service will be reliable, consumers are forced to buy a phone, then use it at home and on their normal commuting routes. Callers generally get 30 days at most to return a phone if the service doesn’t work well enough.

But that test won’t reveal anything about carriers’ periodic outages.

The Federal Communications Commission does know something about outages, however. It has collected outage reports from telecommunications firms since the early 1990s. Any time a carrier has an outage that affects 900,000 caller minutes – say a 30-minute outage impacting 30,000 customers – it must report it to the Network Outage Reporting System.

In the beginning, the reports all were from “wire line” telephone providers and were available to the public. But in 2004, the commission ordered wireless firms to supply outage reports as well. But at the same time, it removed all outage reports from public view and exempted them from the Freedom of Information Act.

The FCC took the action at the urging of the Department of Homeland Security, which argued that publication of the reports would “jeopardize our security efforts.”

“The same outage data that can be so useful … to identify and remedy critical vulnerabilities and make the network infrastructure stronger can, in hostile hands, be used to exploit those vulnerabilities to undermine or attack networks,” DHS said.

'Corporate competition protection'

What use would wireless outage reports have to would-be terrorists? Not much, said NBC terrorism analyst Roger Cressey, the former chief of staff of the President’s Critical Infrastructure Protection Board.

“There is nothing mysterious behind it, it is corporate competition protection,” said Cressey, now a partner in Good Harbor Consulting. “The only reason for the government to not let these records get out is then one telco provider could run a full-page ad saying ‘the government says we’re more reliable.’”

Cressey added that he couldn’t imagine a scenario where the reports would be valuable to terrorists.

In October, MSNBC.com filed an administrative appeal of the FCC’s rejection of its FOIA request. The FCC has not yet responded to the appeal.

In its initial answer to MSNBC.com’s FOIA request, FCC officials cited only one reason for the denial: “competitive harm” to companies involved.

“NORS records are not available to the public,” the rejection letter said. “Given the competitive nature of many segments of the communications industry and the importance that outage information may have on the selection of a service provider or manufacturer, we conclude that there is a presumptive likelihood of substantial competitive harm from disclosure of information in outage reports.”

That’s likely true. A report that revealed which mobile phone company suffered the most outages in a given area would likely impact consumers’ choice of provider. Such information would be in the public interest, MSNBC.com believes.

“We believe that this is basic consumer information and we will continue to fight for your right to know it,” said MSNBC.com editor-in-chief Jennifer Sizemore.

Explanation doesn't measure up, expert says

The explanation also does not meet the bar set by the Freedom of Information Act for an agency to decline a request, according to an analysis by The Reporters Committee for Freedom of the Press.

The competitive harm exemption “requires fairly detailed explanations by the company involved as to how the release of information will put it at a substantial competitive disadvantage,” said analyst Nathan Winegar.

In a subsequent response to a reporter’s query, an FCC spokesman pointed toward the second reason for the public record request denial: The 2004 administrative order declaring the outage records off limits to the public. That order cited both competitive harm and national security.

Al Tompkins, a Freedom of Information Act expert at the Poynter Institute, a journalism think-tank, said release of the cell phone outage reports would be “a tremendous consumer tool,” and compared them to the Federal Aviation Administration’s publication of airline on-time records.

“It seems to me that while one could understand it might put one company at a competitive disadvantage, it would put another at a competitive advantage,” he said. “The airwaves are owned by the public. … The public has a need to know what’s reliable and what’s not.”

Not every mobile phone firm thought the database needed to be hidden from public view when the FCC decided to make it secret in 2004. Sprint argued that the commission could “scrub” the reports of sensitive material before they were made public and thus serve the “seemingly divergent needs for public access and protection of confidential information.”

The FCC chose the blunt instrument.

Another 'national security issue'

Tompkins said the blanket removal of the entire outage report system from public view was symptomatic of a larger trend in the Bush administration.

“Every time we turn around something else is a national security issue,” he said.

Furthermore, if some larger pattern of cell phone outages could be gleaned from the reports, he said, companies might “fix it, not bury it.”

“I can’t think of one problem that has gone away because it’s kept a secret,” he said.

The Freedom of Information Act, signed into law in 1966, provides specific procedures for U.S. citizens to gain access to government documents, through a procedure known as a FOIA request. The law was amended in the mid-1970s in reaction to the Watergate scandal, with time and fee limits imposed on government agencies to comply with requests. The law was amended again in 1986, but journalists continued to complain that federal agencies were still stonewalling. In response to those complaints, in October 1993 then-President Bill Clinton issued an administrative memo calling for federal agencies to “renew their commitment” to the spirit of the Freedom of information Act.

The law was originally intended to make government paper records available to the public, but gradually has been extended to apply to electronic records as well.

Anyone can file a FOIA request, but the procedure is most frequently used by journalists, lawyers and jail inmates seeking more information about their cases. Many agencies, including the FCC, now allow FOIA requests to be filed right from their Web sites.
http://redtape.msnbc.com/2006/12/why...ne_.html#posts





True Patriots Must Have Clogged Noses
Jeffrey A. Tucker

It begins with a runny nose, always in early December when the weather gets colder and nature emits strange particles. I'm speaking of the eternal menace of the winter cold, which, experience suggests, can be prevented from turning to flu or other yucky infections by keeping symptoms at bay.

Thus should the company that invented pseudoephedrine – a drug made from "yeast fermentation of dextrose in the presence of benzaldehyde," says Wikipedia – be heralded by one and all. I'm happy for those who need far-flung laser surgeries that such technologies exist, but, speaking from the point of view of self-interest, the company that can make a tiny pill to unclog my nose earns my deepest gratitude.

And how we have all taken it for granted. We stock up on those little red pills – red like Christmas – all season long, so that days are bright and nights are restful. Oh there's also the liquid form, which has a flavor you come to love as much as the finest liqueur made by French monks. Why aren't the pills sold in packages of 100, 1,000, or 5,000? Well, in any case they should be. They are our seasonal friend, as much a part of the calendar as Thanksgiving.

And yet this year, matters are different.

I can vaguely recall last year that there was more hassle than ever getting these wonders of modern medicine, which, incidentally are made for us by our capitalistic friends in India and China. This year, manufacturers are touting a replacement drug called phenylephrine. Hey, I'm glad to give anything a try but this replacement was not brought about by market forces. The government last year cracked down on pseudoephedrine, and the manufacturers were compelled to come up with something else. So of course I'm suspicious.

"Hey, is this new stuff as good as the old pseudoephedrine?" I asked the pharmacist.

He wrinkled his nose and shook his head. "No, I don't think so."

"Ah ok, well, how can I get the real stuff?" I asked. He then requested my drivers' license and reached behind him and handed me one package.

"Umm, can I please have ten?" I asked, explaining that this process is a pain and so I might as well stock up.

"I'm sorry, I can only sell you one."

"You mean I have to buy it, go outside and come back in, buy another, and so on until I reach ten?"

"No, you can't do that," he replied. "You can only buy one package per month."

What about the liquid form? Doesn't exist, he says. What about the liquid pills? Nope. Gone for good. My winter cocktail, abolished.

Now, I've always thought about this drug the way we think of milk or oranges or socks. If any of these items started to be limited in supply by government decree, what's the reaction? A slight bit of panic. I immediately began thinking of workarounds. So this means that I have to remember to buy from April to October when I don't usually need the stuff so I can be sure to have it.

But won't one package a month be enough? Maybe. Probably. But what if I share it with co-workers, as I often do? What if I leave it in a coat pocket that is dry cleaned or a pants pocket that is washed? Or what if I want to keep one package at home and one at work? What about large families with kids in their early teens? What will they do?

It's not so much that I will certainly need more. It's just that one would like to opportunity to buy more if one so desires. There's nothing like a step toward prohibition to cause a run on a product!

Maybe now is the time to try one of those online drug places of uncertain locale? Well, a quick check shows that most require the same ID as the drug store. What do I have to do? Find a dealer on the street?

In any case, what is the big deal here? Is this all to make sure that Americans must live with stuffy noses a few days a month? Is that what we pay these birds in Washington to do for us?

A close investigation turns out to reveal what most people probably already know: you can use this drug to make another drug called methamphetamine, which is a stimulant that causes euphoria of some sort. I read online that it was invented in the 19th century, and has been mainly used for recreational purposes and also as a stimulant for soldiers in wartime (when drug-induced euphoria is certainly valuable).

So apparently some stupid kids were cooking pseudoephedrine and turning into methamphetamine. The government doesn't want people to experience euphoria on a regular basis and decided to do something to stop it. But does meth cause death? This "deadliest drug" has apparently killed a few hundred people in the last six years, so far as anyone can tell. Also, so far as anyone can tell, the use of the drug peaked decades ago, according to Jack Shafer. In 1975, 16.2 percent of teens said that they had taken amphetamines, where as only 3.4 percent said that in 2004.

What about the process of making meth from nose medicine? This site gives the recipe as follows:

750 pills containing pseudoephedrine, five lithium batteries, two cans of lantern fuel, a bottle of drain cleaner, a bottle of un-iodized salt, a 10-pound block of dry ice, and various lab supplies: mason jars, coolers, coffee filters, a hose. Depending on the proclivities of the cook, there are substitutes for many of these ingredients. Instead of coffee filters, for instance, some cooks prefer linens. One recipe recommends Martha Stewart brand bedding because of its tight weave and low cost.

What strikes me here is not the crazy fuss that is involved here but the need for 750 pills. That's far more than I apparently have the right to purchase.

As for how much of a national epidemic this is, I have no firm data. Every published discussion of this that I could find only refers to the existence of a problem – how much of a problem is hard to say. In any case, from my point of view, if someone wants to go to all the above effort to fry his brain with meth, that's his own business. A general principle of a free society is that people are free to do stupid things to themselves, and so the government doesn't and shouldn't treat people like children.

Where did the legislation that makes it so difficult for me to unclog my nose come from in the first place? The intrigue continues. It was passed on March 6, 2006 – as an amendment to the Patriot Act! It was this that required the drug store to collect information from my driver's license so that the government can have a complete database of all Americans with clogged noses. It was this act that said that I may not buy more than a certain amount per month. State governments followed up with their own laws.

Patriots had better not dispute it. All Patriots must learn to live with clogged noses. And please report all people who seem to be breathing effortlessly to the authorities.

Finally, there should be a limit on the numbers of Martha Stewart bed sheets that people can buy (see the above recipe for meth). Maybe one set per year. Those who want more are probably up to no good.
http://www.lewrockwell.com/tucker/tucker76.html





Book Review

WAR BY OTHER MEANS
An Insider’s Account of the War on Terror.

By John Yoo.

292 pp. Atlantic Monthly Press. $24.

_____________________________________

BEFORE THE NEXT ATTACK
Preserving Civil Liberties in an Age of Terrorism.

By Bruce Ackerman.

227 pp. Yale University Press. $26.


The Enemy Within
Fareed Zakaria

Everyone accepts that “the rule of law” is the foundation of liberties in the Western world. But when did this hallowed tradition begin? Obviously there’s no exact moment, but one could reasonably point to the day in 1215 when, in a small borough outside London called Runnymede, King John was forced by his barons to sign Magna Carta. That document protected the rights of feudal lords, but in doing so it outlined — for the first time in history — legal procedures that even the king had to follow. These limitations are set out in Article 39 of the document, which states that “No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land.”

This writ — or written order — has developed over the years as the principal check on arbitrary state power, the original human right, allowing a person who has been arrested to challenge the legality of that detention. It is called the “great writ,” habeas corpus, or “produce the body so that it may be examined.” Habeas corpus was codified by the British Parliament in 1640 and 1679 and is one of a handful of common laws explicitly referred to and protected in the American Constitution. Alexander Hamilton, the most zealous exponent of executive power among the founding fathers, noted that habeas corpus provided “perhaps greater securities to liberty and republicanism” than any clause of the Constitution.

But as of Oct. 17 of this year, this great writ has been substantially weakened in the United States by the assent of both the presidency and Congress. The Military Commissions Act of 2006 eliminates habeas corpus for anyone defined as an “unlawful enemy combatant,” as well as all aliens, including permanent residents — green-card holders — of the United States. There remains a form of judicial review for “unlawful enemy combatants,” but it is one that the administration seems allowed to bypass (though the exact legal status of unlawful combatants remains unclear). In effect, federal courts appear to have been stripped of their historic role in assessing the legality of detentions if the executive branch claims that these arrests are part of the war on terror.

How did we come to this point? Do the dangers of terrorists and terrorism require so broad a shift in the balance of powers and such an outright challenge to the liberty of the Republic? What is the justification behind these moves? John Yoo has tried to answer these questions in “War by Other Means: An Insider’s Account of the War on Terror.” He is well placed to do so. He was a deputy assistant attorney general in the Justice Department from 2001 to 2003 and became one of the principal authors of the Bush administration’s policies regarding arrests, detentions, interrogations and the treatment of prisoners. Since 2003, as a professor at the University of California, Berkeley, Law School, Yoo has vigorously defended the Bush administration’s legal actions and approaches.

At the heart of Yoo’s argument is the notion that we are at war. “If, during the cold war,” he writes, “the Soviet Union had sent K.G.B. agents to drive airplanes through American skyscrapers, the United States would have retaliated, our nation would have gone on a war footing. ... Why should status as an international terrorist organization rather than a nation-state make a difference as to whether we are at war?”

Everything in Yoo’s analysis follows from this fundamental premise. Detaining operatives of Al Qaeda presents no constitutional problem because they are, in effect, prisoners of war. “Hundreds of thousands of enemy prisoners of war were captured in Vietnam, Korea and World Wars I or II, and their imprisonment was never reviewed by an American court.” Think of all the objections people have made to the Bush administration’s policies and ask yourself, “If we were in the middle of World War II and these were German soldiers, would it be permissible?” Yoo acknowledges, for example, that the administration chose Guantánamo as the prison camp for suspected Qaeda warriors precisely because it did not want federal courts to have any jurisdiction over the place. For Yoo, since we are at war, we need an aggressive interpretation of executive power — inherent in the president’s role as commander in chief — and one that bypasses Congress, the courts and peacetime protections like checks and balances.

But are we really at war? And if so, who are we at war against? Is it just Al Qaeda or more than that one organization? Is it, as the president has often said, a war on terror itself? Many experts have pointed out that you cannot declare war on a tactic (terrorism). As the international policy analyst Grenville Byford noted in Foreign Affairs, wars are more fruitfully declared against proper nouns (Germany, Japan) than common nouns (terror, poverty). If this is a war, moreover, when will it end? How will we know it has ended and whether we have won or lost? These questions do not have easy answers, as Yoo’s own analysis demonstrates. While arguing throughout the book that we are at war, he also insists that we should not apply the most well established rules of war, the Geneva Conventions, to Qaeda prisoners because, well, we are not at war. The conventions are meant to apply to uniformed soldiers captured in war, and that does not describe prisoners in the current conflict.

The practical problems in applying the war model reveal the complexity of our circumstances. During World War II, there was rarely any doubt whether captured German soldiers were in fact fighting for the enemy. But with many of those captured as part of the war on terror, it remains extremely unclear whether they are, in fact, enemies of the United States. Is it necessary to torture some of them in ways that peacetime laws might prohibit? Yoo tends to answer these questions with assertions like “Both Porter Goss, the past director of the C.I.A., and Vice President Cheney, who know far more than they can reveal publicly, have said that such operations are vital to protect the United States from attack.” Well, that settles it then.

Against this “trust us” doctrine we have Ron Suskind’s richly reported details in his recent book, “The One Percent Doctrine,” which reveal how many people have been wrongly arrested, how often torture produced bad information and how few real benefits have been derived from these aggressive interpretations of law and foreign policy. Yoo explains that torturing Abu Zubaydah — Al Qaeda’s No. 3 leader — was vital to uncovering new plots against America. The president described Zubaydah’s harsh interrogation as crucial to the war on terror. But Suskind actually talked to those who did the roughhousing, and they told him that Zubaydah was in fact unimportant, a man in charge of minor logistics for Al Qaeda like travel for wives and children. What’s more, he was mentally unstable. “The guy is insane, certifiable, split personality,” the F.B.I.’s top Qaeda analyst told Suskind. He provided no information of value whatsoever.

Another complication is that traditionally P.O.W.’s have been held without trial because they were usually released when hostilities ended. But does this model apply in a war of indefinite duration? As the administration has found, as a practical matter, it cannot detain hundreds of people in a legal black hole with no end in sight. Yoo argues that “indefinite” does not mean “forever” and that if prisoners can be returned to their home countries without fear that they will start up terrorist activities again, then they should be released. But, as with much of Yoo’s analysis, everything is left to the discretion of the commander in chief. We are at war, after all.

But it is abundantly clear that the “war on terror” is not a war in the traditional sense and that we do not have an enemy in the traditional sense. In “Before the Next Attack,” Bruce Ackerman, a Yale law professor, points out that the problem of terrorism is not one of a single overarching state that has attacked us and threatens our existence. In fact a key feature of the modern world is that the state has lost control over violence. “The root of our problem is not Islam or any ideology, but a fundamental change in the relationship between the state, the market and technologies of destruction,” Ackerman writes. “If the Middle East were magically transformed into a vast oasis of peace and democracy, fringe groups from other places would rise to fill the gap.” Ackerman’s argument could be put differently. We are facing a situation that is actually more revolutionary than the one portrayed by the Bush administration. It’s not that we’re at war. It’s that the nature of peace has been fundamentally altered. From now on, we will have to worry about small groups, without countries or uniforms, who can cause us serious harm.

Ackerman accepts that the law-enforcement model is not appropriate for the challenge of terrorism, since our aim is not to investigate the next terror attack but to prevent it, in fact to pre-empt it. But that is still a different problem from the threat of a full-scale invasion by a great power. Most important, what we now face is likely to be a permanent condition, and this means we need new rules. Ackerman proposes an emergency constitution that would take effect after a major terrorist attack and would include some of the restrictions of the Bush administration’s approach. But it would also expire periodically and could be renewed only by ever-increasing Congressional majorities. Additionally, courts would be able to review any revisions. Ackerman’s solution may or may not be practical, but at least he confronts the problem intelligently, and he is surely correct to say that it’s not a good idea to respond to particular crises with ad hoc changes to our laws. If we don’t think through the basic structure of rules, rights and protections we want, every new attack will produce creeping but permanent limits on freedom.

There is one aspect of our new condition that neither Yoo nor Ackerman addresses in much depth — the broader political context. The United States is fighting a strange war indeed, one that is, in some fundamental ways, an extended campaign of public diplomacy against ideologies of extremism and violence. This campaign is not simply a matter of battling on the air waves with Al Jazeera across the Arab world. It is a matter of reaching into communities. The best sources of intelligence on jihadi cells have tended to come from within localities and neighborhoods. This information has probably been more useful than any we have obtained from waterboarding or sleep deprivation.

Yoo frequently cites a famous case of Nazi agents — Germans and German-Americans — who landed secretly on Long Island in 1942, planning to destroy key elements of America’s industrial strength: power plants, factories and bridges. They were arrested by the F.B.I. and tried by a military tribunal. The case reached the Supreme Court, which upheld the Roosevelt administration’s actions. Many of the justices did so uneasily, but they felt they could not really overturn the administration’s decision in the midst of World War II. The more notable aspect of this story, however, is that these men were arrested not because of any emergency powers of the executive branch. One of them, who had lived for some years in the United States, turned out to have stronger feelings of affection for America than for Germany. Soon after the agents landed, he contacted the F.B.I., which dismissed his tale at first, but he persisted and, finally, the men were arrested.

In its campaign against terror groups, the United States must summon all the strength and skills it can muster. But perhaps our most potent weapons are the sense people around the world have had that the United States is an exemplar of rights and liberties and that it lives by those principles even under storm and stress. When we suspend the writ of habeas corpus, we cast aside these distinctive weapons and trade them for the traditional tools of dictatorships — arbitrary arrests, indefinite imprisonments and aggressive interrogations. Will this trade really help us prevail?
http://www.nytimes.com/2006/12/17/bo...Zakaria.t.html





Malaysia to Embed Car License Plates With Microchips to Combat Theft
AP

Malaysia's government, hoping to thwart car thieves, will embed license plates with microchips containing information about the vehicle and its owner, a news report said Saturday.

With the chips in use, officials can scan cars at roadblocks and identify stolen vehicles, the New Straits Times reported.

The "e-plate" chip system is the latest strategy to prevent car thieves from getting away with their crimes by merely changing the plates, the report said.

It said nearly 30 cars — mostly luxury vehicles — are stolen every day in Malaysia.

The Times quoted Road Transport Department Director-General Ahmad Mustapha as saying the system will be implemented next year in stages. New cars will be first, followed by those already on the road.

"The first thing thieves do after a car theft is change the registration plates," Ahmad was quoted as saying.

The microchips, using radio frequency identification technology, will be fixed into the number plates and can transmit data at a range of up to 100 meters (yards), the report said.

They will have a battery life of 10 years, it said.

Ahmad could not be immediately reached Saturday for comment on the report.
http://www.iht.com/articles/ap/2006/...Car_Thefts.php





El you dee, dee eye tee eee

School Shuns Tech, Teaches Fountain Pen
Ben McConville

In this age of cell phones, text messages and computer keyboards, one Scottish school has returned to basics. It's teaching youngsters the neglected art of writing with a fountain pen.

There is no clacking of keyboards in most classrooms at the Mary Erskine and Stewart's Melville Junior School, although there is a full range of facilities for computer lessons and technology isn't being ignored.

But the private school's principal believes the old-fashioned pens have helped boost the academic performance and self-esteem of his 1,200 pupils.

"The pens improve the quality of work because they force the children to take care, and better work improves self-esteem," principal Bryan Lewis said. "Proper handwriting is as relevant today as it ever has been."

Students as young as 7 have been instructed to forgo their ball point pens and get to grips with its more artful predecessor. By the time they reach grade five, at age 9, they are expected to write mainly with fountain pens.

At an English class recently, students worked at perfecting a skill that is under threat from the onset of e-mail - the art of writing a letter by hand. Each child's work was meticulous and clearly presented in the upright, graceful strokes of a fountain pen.

Ten-year-old Cailean Gall has been using fountain pens in class for two years. It took the keen soccer player one month to master the pen and, like all pupils at the school, still has regular handwriting lessons.

"At the start it was hard because I kept smudging, but you get used to it," he said. "I still have to use a pencil for maths, and now I find it strange using the pencils. I like it because it makes me concentrate much more on my work."

Cailean now uses his fountain pen even for non-school work, but classmate Katie Walker, 11, prefers to use ball point and pencil when not in class.

"I use it for schoolwork and homework only," she said. "It is quite easy using a fountain pen once you're used to it. My parents say it's improved my work enormously."

The children learn a handwriting style developed by teachers at the school, which charges $12,500 a year. New teachers are also put through a course on how to write with pens - as well as refresher courses on literacy and numeracy - before they are let loose in classes.

Lewis said the school's 7- and 8-year-olds use fountain pens for 80 percent to 90 percent of their work, reverting to pencils for such subjects as math.

"I don't see fountain pens as old-fashioned or outmoded. Modern fountain pens are beautiful to use; it's not like in the old days of broken nibs and smudging," Lewis said. "We have a particular writing style and we have developed it very carefully and found a way that allows left- and right-handed people to write without smudging."

Parent Susan Garlick supports the school and believes the use of fountain pens has improved the work of her daughter Elisabeth, an 11-year-old in grade 7.

"Her handwriting is beautiful," Garlick said.

Some people in wealthy nations argue that handwriting is becoming less important because of the growing use of cell phone text messaging and typing on computers, but the school disagrees.

In August, for example, examiners at the Scottish Qualifications Agency complained they had difficulty deciphering the scrawl of many students on exam papers used to determine admission to universities.

"We talk of the paperless office and the paperless world, but this is not true," Lewis said. "You still need to have proper handwriting skills."
http://hosted.ap.org/dynamic/stories...12-09-19-51-30





The Last of a Dying Breed
Tony Long

The Luddite

An old friend of mine died recently. Well, I mean he wasn't an "old friend." He was in his late 70s (which I think still qualifies as "old") and he was a friend, even though I was privileged to know him for only five or six years. Still, his passing leaves a pretty big gap in my life, and I think I know why.

John was a dabbler, a sort of Renaissance man, if you will. And you just don't see a whole lot those around anymore, not in this age of narrowly defined interests. He was a courtly man, a retired cab driver who thought of himself as an artist. He was an accomplished painter. He could sculpt. He wrote poetry, which wasn't very good, and prose, which was top notch. He played some classical guitar and fooled around with the piano. He was a lifelong scuba diver who hunted abalone up the coast and had once been a competitive swimmer. He traveled the world several times over. He spoke a couple of languages. He was married three or four times. (He never got the hang of domesticity apparently, but he always spoke fondly of his exes.)

He was one of those larger-than-life guys who always made you smile when he hove into view.

But he never learned how to use a computer. What's more, he never had any interest in learning. For John, life existed "out there," not on a screen. He never owned a cell phone, or any phone, for that matter. Didn't have a TV. Probably never heard of an iPod. But he was one of the most interesting people I've ever known.

I think what made John so interesting, beyond the adventures he had and the great stories he loved to tell, was that there was always momentum to his life. He could make a lot out of a little. His days were full and I'll wager that, after Viagra came along, his nights were pretty busy, too. He personified the active over the passive. He was a doer, not a watcher.

Which is probably the biggest reason John didn't care about computers. Yes, they're efficient and good for business, if business is what you care about. But sitting at a computer when you don't have to is to be cripplingly passive, even if you're playing the bloodiest, most maniacal shooter game ever. Sorry, podnah, but that doesn't make you Billy the Kid. You're just a couch potato with twitchy fingers.

Computers have changed the nature of the workplace, the nature of work itself. This is the information age so a lot of us are cubicle-bound and tethered to the screen, whether we like it or not. It's also the age of specialization. You gotta work to live so unless you've cultivated a rare skill -- like you can really hit a curveball or something -- there's a good chance you'll wind up behind a desk. And on that desk, inevitably, will be a computer.

Which makes it really important for your balance and well-being to get out into the world in your free time and do something -- anything -- that doesn't involve some kind of software.

The physical toll of computer overuse is well documented. And while I'm unaware of any statistical data supporting my thesis that sitting in front of a computer for more than a few hours a day is spiritually draining, anecdotal evidence abounds. You just have to look around you, at a society growing more dysfunctional, discourteous and disconnected every day. There are a lot of reasons for this, of course, but technology that discourages real human contact is certainly a prime contributor.

We are social animals. We are meant to see each other, speak with each other, touch each other, smell each other. "Connecting" online with people you never actually see face-to-face doesn't count. If that's what passes for "community" in the 21st century, well, poor us.

Should we be more like John? Sure, if you can swing it. If you're resourceful enough and not materialistic you might have a shot, but the world has changed since John was young. It's hard to poke around in the interesting corners of life when you're under the gun to make as much money as possible just to stay afloat.

Pity. We'd be so much better off.
http://www.wired.com/news/columns/1,72229-0.html





As Microsoft Looks Ahead, Will Vista be the End of an Era?
Rhys Blakely

'Bad guys' line up to test defences
Google presents biggest challenge

Opening windows

It is the engine behind the largest personal fortune ever amassed. All-conquering but largely unloved, it has changed the daily lives of hundreds of millions — but Microsoft Windows, the Genghis Khan of computer operating systems, faces an uncertain future.

Vista, the latest version of Windows, was released for businesses last month. The consumer version comes out next month. The revamp of its biggest cash cow is being billed as the most important event for Microsoft in a decade. Windows accounted for $10 billion (£5.1 billion) of the group’s $16.5 billion operating profit last year. Five years in the making, Vista’s 50 million lines of code have cost an estimated $7.5 billion to assemble.

Yet already the knives are out for Vista, a system that Microsoft executives admit will be the last of its kind, as their company finally gets to grips with the internet age. Vista is meant to be slicker and safer than its predecessors, but even after a two-year delay it is “not really ready”, Michael Silver, an analyst at Gartner, said. Companies hoping to switch in the past couple of weeks could not get hold of the additional software needed for it to work with their printers.

Security experts acknowledge that Vista is the most secure operating system that Microsoft has made, comparable to Apple’s latest version of its rival OSX system, but they also note that several flaws have already been uncovered and predict that Vista’s reach — 200 million people are expected to use it in a year’s time — will work to its disadvantage.

“The bad guys will always target the most popular systems,” Mikko Hypponen, of F-Secure, the security group, said. “Vista’s vulnerability to phishing attacks, hackers, viruses and other malicious software will increase quickly.”

The Vista security headache is not the only chink in Microsoft’s armour. Like all the Windows family, Vista traces its heritage back to the MS DOS system that Microsoft developed in 1981, when computers were standalone boxes. Vista is the most web-friendly Windows yet and Microsoft is placing a huge onus on its improved internet search engine, but industry observers suggest that Windows never really forgot its roots and has floundered since PCs became joined-up through the internet.

The fear is that rivals will use the web to kill Windows. Google, a child of the online era, is the No 1 threat.

“Microsoft is way behind Google when it comes to the internet,” Rupert Godwins, the technology editor at ZDNet, the industry website, said. “Building Vista, Microsoft is still doing things the old way at the same time as it undergoes a big shift to catch up.”

Rumours of an impending Google operating system, “GoogleOS”, have proven wide of the mark so far, but the Google Docs & Spreadsheets product does much of what Microsoft’s second-most important product, the Office suite of software, does. Google’s offering is a free, web-based service at docs.google.com. Microsoft’s Office Professional 2003 is much more sophisticated, but it costs as much as £460 and has to be installed on to the hard drive of a PC.

Crucially, the Google word processor and spreadsheet package does not need Vista.

Microsoft is retaliating with its own web-based services, dubbed Windows Live, but the strain of transition has shown inside the world’s largest software group. Jim Allchin, the 16-year Microsoft veteran who ran much of the Windows division and was dubbed the “Vista Godfather”, will leave the company in weeks. In the next 18 months Bill Gates, who became the world’s richest man, worth an estimated $53 billion, on the back of Windows licences, will drop out of the day-to-day running of the company that he co-founded 30 years ago. The changes have put an outsider, Ray Ozzie, the designer behind Lotus Notes and an internet expert, into the key role of chief software architect, Mr Gates’s former title.

Once installed in the post, Mr Ozzie wrote an internal company memo that mapped out the challenges that face Microsoft. The message was clear: get Google, get with the internet and wean Microsoft off Windows as we know it.

“Through Google’s focus they’ve gained a tremendously strong position,” he said. “[Microsoft] must respond quickly and decisively . . . It’s clear that if we fail to do so, our business as we know it is at risk.”
http://business.timesonline.co.uk/ar...494732,00.html





Craigslist Meets the Capitalists
Andrew Ross Sorkin

Jim Buckmaster, the chief executive of Craigslist, caused lots of head-scratching Thursday as he tried to explain to a bunch of Wall Street types why his company is not interested in “monetizing” his ridiculously popular Web operation. Appearing at the UBS global media conference in New York, Mr. Buckmaster took questions from the bemused audience, which apparently could not get its collective mind around the notion that Craigslist exists to help Web users find jobs, cars, apartments and dates — and not so much to make money.

Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

“I think a lot of people are catching their breath right now,” Mr. Schachter said in response.

The Tech Trader Daily blog ponders this question: “If YouTube was worth $1.65 billion, who knows what Craigslist would be worth if Jim and [site founder] Craig Newmark ever considred becoming — what’s the word? — capitalists.”

Craigslist charges money for job listings, but only in seven of the cities it serves ($75 in San Francisco; $35 in the others). And it charges for apartment listings in New York ($10 a pop). But that is just to pay expenses.

Mr. Schachter still did not seem to understand. How about running AdSense ads from Google? Craigslist has considered that, Mr. Buckmaster said. They even crunched the numbers, which were “quite staggering.” But users haven’t expressed an interest in seeing ads, so it is not going to happen.

Following the meeting, Mr. Schachter wrote a research note, flagged by Tech Trader Daily, which suggests that he still doesn’t quite get the concept of serving customers first, and worrying about revenues later, if at all (and nevermind profits). Craigslist, the analyst wrote, “does not fully monetize its traffic or services.”

Mr. Buckmaster said the company is doubling in size every year, as measured by page views and listings.

Larry Dignan, writing on Between the Lines blog at ZDNet, called Mr. Buckmaster “delightfully communist,” and described the audience as “confused capitalists wondering how a company can exist without the urge to maximize profits.”
http://dealbook.blogs.nytimes.com/20...italists/?8dpc





Papers Battle Online News Sites
David Reid

"All the news that's fit to print" was once the newspaper man's slogan. Now, with news-junkies turning increasingly to the net for their daily fix of world events, papers are beginning to feel the pinch.

Not since the internet began has there been so much free quality newspaper content on the web.

You will have to make the most of it because the current bonanza might not last forever.

Newspapers are still not sure what to do about the internet, no matter how determined they are to prove wrong the doomsayers who claim they are dead.

But Larry Killman of the World Association of Newspapers believes newspapers are "far from dead".

"People have been predicting their death for years, television was going to kill newspapers, for example," he said.

"I think there is no doubt that growth in electronic media is the future, but there is still a future for print."

Over the years newspapers have been pretty resilient; they managed to ride out the challenge from radio and toughed it out with TV.

Financial challenge

But those challenges were more about who would be first or best with the news. The internet, however, is hitting papers where it hurts, in their pockets.

"For more than 100 years journalism has been sustained by this virtuous circle in which the audience paid for their news, and the advertiser paid to reach that audience, and the publisher made a profit and paid his journalists and the society benefited into the bargain," said Michael Oreskes, executive editor of the International Herald Tribune.

"That whole circle breaks down on the internet. This requires wildly creative thinking on the part of media companies to preserve the base of support that's created quality journalism for all these years.

"And that's a subject that the whole of society needs to be interested in and not just those whose livelihood depends on it."

The big question facing major papers is how can they compete with free. News used to be a saleable commodity, now they seem to be giving it away.

Papers like Metro have borrowed the internet's business model and make money solely through advertising.

Given their fix of news, many people will not now fork out for a paper.

That is hurting papers like France's Libération. It has traditionally shunned advertising it deemed politically compromising and relied on its cover price for its income.

It is now in financial crisis: its doors threatening to close for good. The paper partly blames the internet.

Complimentary strategy

"I do think the internet is a problem, but it is also the solution," said Fabrice Rousselot, Libération's internet editor.

"The mistake I think for any kind of media today would be to think they could do anything without the internet.

"You have to integrate the internet as part of your business model."

Which leaves papers with the problem of what, out of the pile of content they produce, should they put on the web?

There is not much point, for example, putting exactly the same stuff on the website as they put in the paper.

"If you offer on your website the exact same content as in your newspaper, why would people buy the newspaper? It makes no sense economically," said Mr Rousselot.

"But if you show people that the content on the website is only made richer in the newspaper the next morning because what you have on the website in terms of news is becoming an analysis, is becoming a report from abroad, is becoming some kind of a huge interview on the newspaper, then there is a sense to it."

While web strategy is being bandied around as the sink or swim buzzword of the moment, newspapers freely admit that no-one really knows for sure whether what they are doing is going to pay off in the end.

Experimentation

The International Herald Tribune now sees itself as a media organisation rather than just a paper; their website features video stories and has taken the step of charging for premium content.

"Good journalism costs money and so we are trying to see what we can do to make sure we can continue to grow and support the business," said Meredith Artley, director of digital development at the International Herald Tribune.

"So far it is working. The advertising is growing at a huge rate and we are seeing, especially with mobile devices, that readers will pay for something they know that's valuable.

"They'll do it on the web too, but with mobiles it is a little bit different. People will download things, they will pay for them.

"So we are exploring that. It is still a little bit of experimentation, but that is what all this is about."

These are scary times for newspapers and a crucial time for society.

A fully functioning media needs more than fast reacting rolling news, it also needs newspapers which spend more time chewing over what the news actually means.

There is a problem with free: it often comes unpackaged and without the know-how to understand it.
http://news.bbc.co.uk/2/hi/programme...ne/6220424.stm





Family With Big Stake Seeks Part of Tribune
Andrew Ross Sorkin and Katharine Q. Seelye

The Chandler family, which long owned The Los Angeles Times, has begun holding talks with several private equity firms about forming a consortium to bid on part of the Tribune Company, people briefed on the discussions said yesterday.

The talks come six months after the Chandlers pressed to put the Tribune up for sale. The family, which became a large shareholder in Tribune when it sold Times Mirror to the company, has been critical of Tribune’s management and its slumping stock price.

When the Chandlers first clashed with Tribune management, the family had no interest in buying the company, people involved in the talks said.

Now, frustrated with the muted interest that the auction of Tribune has so far generated, the Chandlers are exploring the idea of leading a private equity consortium as a way to either create value in a leveraged buyout of the assets or to possibly start a bidding war.

Practically no newspaper companies, with the exception of the Gannett Company, have expressed interest in Tribune, which in addition to The Los Angeles Times owns The Chicago Tribune, Newsday and other newspapers, as well as two dozen television stations and the Chicago Cubs. A few private equity firms have submitted bids that were much lower than anticipated.

The advantage the Chandler family would have in the auction is its status as the owner of 20 percent of the Tribune Company. A deal could be structured with the Chandlers owning 51 percent of a Tribune unit and private equity firms the rest. For example, Tribune could decide to spin off its television unit and sell its newspaper unit to a Chandler-led group on a tax-advantaged basis. Such a consortium would not have to pay the enormous tax bill that an outside bidder would be faced with, an issue that has scared off some would-be suitors. And such a buyout structure, loaded with debt, would allow family members to cash out of Tribune to a degree, the people briefed on the discussions said.

The Chandler family’s first preference remains for the company to be sold in its entirety to an outside buyer, these people said.

Among Tribune’s early suitors were a group including Providence Equity Partners, Madison Dearborn Partners and Apollo Management. Other firms, the Texas Pacific Group, the Carlyle Group and Bain Capital, are considering whether to bid in the next round either separately or possibly together.

The tax considerations have been central to the family’s discussions about its Tribune stake.

In an article this year, The Los Angeles Times described the family this way: “The Chandlers have a long history of antipathy toward taxes, as do many people in their rarefied tax bracket. They also are known for structuring deals that give them maximum income.”

“When they have sold assets, such as the cable systems and TV stations that Times Mirror sold in the 1990s, they have pushed for aggressive tax advantages that have been challenged by other shareholders,” the article said.

Of course, the Chandlers’ interest could also be part of a plan to help create a competitive dynamic for Tribune. If its involvement helps propel a higher rival bid, the family would benefit, too.

Despite the Chandlers’ role in building The Los Angeles Times, the family’s interest in Tribune appears to be motivated strictly by economics, unlike that of the billionaire investors Eli Broad, Ron Burkle or David Geffen who have expressed interest in acquiring Tribune or some of its individual papers with plans to act as a benefactor.

A spokesman for the Chandler family declined to comment.

Shares of Tribune, which rose as high as $34 in September on hopes of a deal, have since retreated. The shares rose 14 cents, to close at $32.49 yesterday.

The Chandlers are descendants of the famous family, led by Gen. Harrison Gray Otis and his son-in-law, Harry Chandler, that exercised political and financial control over Southern California in the first half of the 20th century. They included the late Otis Chandler, a member of the fourth generation, who, as publisher of The Los Angeles Times from 1960 to 1980, expanded that paper’s ambition and reach. He also alienated more conservative members of his family, which today is a diffused clan of about 170 people.

In June, the Chandler family said publicly that the company’s financial performance was dismal and its strategic direction muddled, and it called on the company’s board to consider a breakup.

In September, the company’s board voted to explore ways of creating additional value for shareholders and also made a deal with the Chandlers, increasing their stake in the company to 20 percent, from 15 percent.

The family now has three representatives on the Tribune board: Jeffrey Chandler, one of California’s largest avocado growers; Roger Goodan, his cousin; and William Stinehart Jr., a family lawyer.

They are advised by Thomas Unterman, a lawyer and venture capitalist, who has worked for the family for years and has engineered a series of complex deals, most of them designed to help minimize taxes.
http://www.nytimes.com/2006/12/13/bu...rtner=homepage





Warning: May Cause Hunger
Jack

I hate to flog an ad (versary), but…

Microsoft’s latest commercial for it’s Zune line of personal stereos so evocatively captures the "sharing is wonderful" ethos of the P2P community that I have to pass it on. It also simultaneously illustrates why infinitely reproducible intellectual property is totally unlike the physical variety. Not bad for 60 seconds.

That this strange little ad comes from one of the largest abusers of IP law is not lost on me. I just like the spot.
http://www.p2p-zone.com/underground/...ad.php?t=23411





Times Sq. Ads Spread Via Tourists’ Cameras
Louise Story

Advertisers have long been drawn to Times Square as a valuable place to reach consumers, paying hundreds of thousands of dollars for space on billboards and blazing video screens.

But recently they have discovered that down on the ground, new technology has given low cost, face-to-face marketing campaigns something of a cutting edge as consumers spread their messages on the Internet.

Take the recent display of public toilets set up by Charmin bathroom tissue: Used by thousands in Times Square and viewed by 7,400 Web users on one site alone. Or Nascar’s recent display of racecars; videos of the event have been viewed on YouTube more than 1,800 times. More than 60 people wrote about the event on their blogs and 60 more spread the word — and pictures — on the Flickr Web site.

“The great thing about the digital world is you can capture these events,” said Christian McMahan, brand director for Smirnoff Ice, owned by Diageo. “People can see them whether they were there that day or 3,000 miles away.”

As a result of the growing popularity of consumer-generated pictures, videos and e-mail messages on Internet sites like YouTube and Myspace, advertisers are getting consumers to essentially do their jobs for them.

When Target, the discount store operator, suspended the magician David Blaine above Times Square for two days during the week of Thanksgiving, videos shot by viewers were posted on YouTube and viewed more than 19,300 times.

“Times Square is becoming, in a way, a publishing platform,” said Peter Stabler, director of communication strategy for Goodby, Silverstein and Partners, an advertising agency that is part of the Omnicom Group. “What happens in Times Square is no longer strictly the province of location. You can experience things that are happening there, even if you’re not there.”

On sites like YouTube, Flickr and MySpace, an army of tourists and residents are spreading advertisers’ messages well beyond Manhattan, using their cell phones and video cameras as they walk through the marketing crossroads of the world.

Consumer brand companies are taking advantage of that by hosting elaborate events, fully aware that those events are great fodder for footage. Hosting events in Times Square, advertisers said, is like buying product placement in a TV show or a movie — except the cameras are held by consumers and the placement is on the Internet.

Experiential marketing, as the ad industry calls such campaigns, is intended to give people something they can tryout and photograph. Companies are holding such events in cities around the world, but advertisers said Times Square was unparalleled in its reach. People around the world recognize Times Square in photos and videos online and are more likely to view them, marketers said.

Charmin’s bathrooms, which opened on Broadway near West 46th Street on Nov. 20, generated traditional coverage with more than 100 articles published about the fancy toilets. But consumer videos posted on YouTube alone have been viewed more than 7,400 times.

Hundreds of other people each week post photos and videos on their blogs and MySpace pages. One blog post last week, “Der New York Trip Part II”, written in German, shows a young couple posing with the Charmin bear. Charmin is a brand of Procter & Gamble.

Another post about the Charmin toilets last week on a Web design blog wondered, “Could this be too much marketing?” Christian Montoya, the site’s author, videotaped the bathrooms when he visited Times Square on Thanksgiving so that he could post the footage online for his roughly 700 daily readers. Though Mr. Montoya, a senior at Cornell University, said he was skeptical of marketing but thought the Charmin bathrooms were effective.

“It was more than a billboard because you could actually try the product,” Mr. Montoya said.

It is difficult to count exactly how many people pass through Times Square each day, but foot traffic by some measures has nearly doubled. In 1997, the Times Square Business Improvement District counted 8,702 people an hour passing through the most crowded parts of Times Square during the busiest times of year. This year, the Times Square Alliance found that nearly double that amount — about 15,000 people — passed the Virgin Megastore on Broadway during busy hours.

But, advocates of experiential marketing say headcounts in Times Square underestimate the district’s impact. Face-to-face interaction with customers is more powerful than traditional ads, they say.

“What people do is geometrically more powerful than what they are told,” said Brian Collins, chief creative officer of Ogilvy and Mather Brand Innovation Group, a part of the WPP Group. “Feeling something, picking it up in your hands, walking into an environment is a far more powerful brand promise than anything you are simply told through traditional media alone.”

On the day after Thanksgiving, Diageo’s Smirnoff Ice brand held a tongue-in-cheek rally featuring about 30 paid actors as “core protestors.” The theme was “save the mistletoe,” a slogan for a holiday campaign for Smirnoff Ice. Smirnoff estimates that 60,000 people passed by its four-hour rally.

“When you go into an arena that is so iconic like Times Square, people are looking to be entertained,” said Christian McMahan, brand director for Smirnoff Ice. “And they’re looking to be part of it.”

In April, General Electric rented nine digital billboards in Times Square and displayed photos of people passing by. People on the street photographed themselves standing below the billboards when their images appeared. Soon, those images were circulating online.

“It’s much more interactive,” said Judy Hu, the global executive director for advertising and branding at G.E. “You’ve got people who are e-mailing, sending messages, they’re involved with your brand personally as opposed to just viewing it.”

G.E. and other companies that hosted recent events would not divulge their costs, but they said the total came out surprisingly low compared with other forms of marketing.

The mayor’s office said permits to use Times Square areas started at $25,000 but often cost $50,000 or more for a day, and that 112 marketers had paid for permits this year.

The amount of marketers in Times Square has soared this year in large part because three traffic islands there were made available on a regular basis this year for the first time as part of Mayor Bloomberg’s broader initiative to attract more tourists to New York City.

In February, Walt Disney World sent Hans Florine, the X-games gold medal climber, scaling up a billboard to promote Expedition Everest, a new Animal Kingdom park ride. Mickey Mouse was also there, but he stayed on the ground.

In early December, MasterCard carolers sang holiday songs and passed out hot chocolate; street vendors sold coffee in Ann Taylor Loft paper cups; and a Sovereign Bank team rode red Segways passing out shopping bags and subway maps.

But some advertising executives wonder if it might be reaching the saturation point.

“It is now getting to the point,” said Lori Robinson, senior vice president of Hill and Knowlton, the WPP Group agency that helped produce one event, “where there just might be a little too much going on in Times Square.”
http://www.nytimes.com/2006/12/11/te...rtner=homepage





In Web Traffic Tallies, Intruders Can Say You Visited Them
Peter Edmonston

In late May, more than five million Web users vanished.

The disappearing act came when Nielsen/NetRatings, a leading company in measuring Internet traffic, sharply cut its previously reported statistics for the financial Web site Entrepreneur.com to 2 million unique visitors in April, from 7.6 million.

Why the change? For millions of Web surfers, Entrepreneur.com visited them — and not the other way around, the measurement company said.

As computer users visited other sites, new browser windows popped up containing articles from Entrepreneur.com, according to Scott Ross, senior product manager for Nielsen/NetRatings.

Pop-up windows appear all over the Internet, including the Web site of The New York Times. But they are typically used as advertising to pitch a product or a service.

Entrepreneur.com’s pop-ups were unusual because they contained news content, like articles on how to start a small business, making them hard to distinguish from an intentional visit to Entrepreneur.com’s site. This hailstorm of pop-ups more than tripled Entrepreneur’s reported traffic before it was detected and factored out a month later.

The technique of using pop-ups to gain readers underscores just how important sheer numbers have become in the online media business. Advertisers are shifting their marketing dollars to the Internet, but the rates they pay are low compared with traditional media.

Consequently, publishers who have struggled for years to find a way to make money online are taking aggressive steps to get their Web pages in front of as many eyes as possible.

Entrepreneur.com, owned by Entrepreneur Media in Irvine, Calif., did not return calls seeking comment. But it is not the only online publisher to use pop-ups, according to Benjamin G. Edelman, a Harvard doctoral student who has compiled a large database by installing on his computer many kinds of software, known as adware, that generates pop-ups.

(Mr. Edelman has also provided expert testimony on behalf of publishers, including The New York Times Company and other newspaper concerns, in a lawsuit involving adware. The publishers had sued to prevent pop-ups, by the Gator Corporation, from appearing on their Web sites. The suit was settled in 2003 under terms that were not disclosed.)

Other sites that appear to have used pop-ups for content in the last year include Concierge.com, the Web site of Condé Nast Traveler magazine; ForbesAutos.com, part of the Forbes financial publishing group; and Heavy.com, a popular humor site, Mr. Edelman said.

The concern over pop-up content goes beyond traffic numbers. Many advertisers pay premium prices to reach readers of certain Web sites. Through pop-ups, these advertisers may find their orders are being fulfilled with low-cost page views that users never requested and may never have seen.

This list of sites surprised Scott Symonds, vice president for media at Agency.com, who advises companies on where to spend their online advertising budgets. Pop-ups delivered by adware are usually seen as a “nuisance form of advertising,” and most mainstream publishers avoid them, he said.

“You would hope that publishers of high-quality content would use advertising techniques that were in keeping with that,” Mr. Symonds said. He added, though, that pop-ups could be a legitimate way to reach new viewers if the publisher took certain precautions, like not using pop-ups to inflate traffic or satisfy orders from advertisers.

There are legal issues as well. Many sellers of pop-up ads have been sued by regulators and consumers, who say the software to allow pop-ups is often installed without a users’ consent. The adware hitches a ride on another application, like a game or a screen saver, and the pop-up function can be buried in the fine print. Sometimes it is never disclosed.

“You can almost look at it like steroids,” Mr. Ross said of pop-up content, which his firm calls “non-user-requested” traffic. Others in the online media business call it “push traffic,” because Web pages are actively pushed to computer users who do not request them.

Used indiscriminately, push traffic is like printing extra copies of a magazine and tossing them onto doorsteps or, because pop-ups can be intentionally hidden behind other windows, simply dropping them in an alley.

Mr. Ross and executives at comScore, a rival measurement company, say they can usually detect such activity and remove it from their data. But both companies concede that they cannot catch everything.

“It is a cat-and-mouse game,” said Magid M. Abraham, comScore’s chief executive.

In the case of Concierge.com, which has articles on luxury resorts and expensive spas, the site recently bought pop-up services from Zango, one of the largest adware companies. In one case, Zango’s software caused a page featuring “Hot List Hotels 2006” and other travel articles (created by Concierge.com) to appear unexpectedly while Mr. Edelman was browsing other sites, he said.

Concierge.com declined to comment, but Zango has faced harsh criticism from the Federal Trade Commission. In early November, Zango agreed to pay a $3 million fine to settle the commission’s charges that it had used unfair and deceptive practices to install its software on personal computers and to make it difficult to remove.

“If consumers choose to receive pop-up ads, so be it,” Lydia B. Parnes, director of the commission’s Bureau of Consumer Protection, said in announcing the Nov. 3 settlement. “But it violates federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use.”

Zango, based in Bellevue, Wash., said that third-party affiliates were the source of the problems and that it had long since cut ties with them. Zango also said it had operated within the requirements of the F.T.C. settlement, including verifying computer users’ consent, since Jan. 1 and had hired an outside auditor to confirm its compliance.

Zango’s chief executive, Keith Smith, said he would not identify or discuss any of his company’s clients. Asked about Zango’s potential as a tool to inflate traffic numbers, he said that publishers and measurement companies need to work out the issue themselves. “The measurement piece is still evolving,” he said.

Zango is just one of the adware providers that work with online publishers. Until late last year, ForbesAutos.com, an auto-related offshoot of the financial site Forbes.com, was using the services of eXact Advertising, whose adware is sometimes bundled with free games and other applications.

Screen images from December 2005 show several cases in which eXact delivered unsolicited pages — in one instance, a review of a BMW Z4 coupe — from ForbesAutos.com. The pages were actually “pop-unders,” positioned so they were mostly obscured by the main browser window, to be revealed when that window was closed.

Forbes.com declined to say how long it used pop-ups or how many pages were generated that way, but Jim Spanfeller, Forbes.com’s chief executive, said they accounted for a “very small fraction” of its page views. He also said the site abandoned the practice last year.

“We decided in 2005 to stop using pop-ups of any sort, delivered by adware or otherwise, for site promotion after determining they were of less utility than other efforts,” Mr. Spanfeller said. A spokeswoman for eXact Advertising declined to comment.

Heavy.com, a site that tries to attract young men with its irreverent video clips and animation, is also a page popper, though the company says it has taken steps to avoid inflating traffic statistics or upsetting advertisers. Citing data from Hitwise, a traffic measurement company, Heavy.com said that in October it was the second-largest entertainment video site after YouTube.com. Rather than rely on videos alone, though, the site has also been using pop-ups to position its pages in front of users.

In a recent session, Mr. Edelman said he saw two Heavy.com pages appear on his screen within the space of a minute, each generated from a separate piece of adware. In one case, the Heavy.com home page appeared while he was browsing Netflix, the video rental service.

Some users seem to be bombarded by Heavy.com pop-ups. “HELP! tons of pop-ups from heavy.com and webcrawl.com!!” was the plea posted a few weeks ago in the forums of SpywareInfo.com, which offers advice on shedding unwanted software.

Heavy.com acknowledges using pop-ups, but Andy Morris, a spokesman for the company, said it did not use adware or condone its use. Instead, Heavy.com works with ad networks whose member sites initiate the pop-ups, a practice it calls an “effective marketing tool.”

Presented with Mr. Edelman’s pop-up examples, Mr. Morris said they were not generated at Heavy.com’s request. In some cases, he said, the site has been used by “unscrupulous third-party Web operators” that tried to use its videos as bait; in others, Heavy.com worked with ad networks that then violated the terms of their agreement by using adware.

“Quite simply, we’ve been ripped off,” Mr. Morris said.

Heavy.com said its advertisers were never charged for pop-up pages and that the pop-ups did not inflate its traffic because it flagged those pages so that comScore could exclude them from its statistics. ComScore confirmed this arrangement.

“They did the honorable thing,” Mr. Abraham said.

But Nielsen/NetRatings was unaware of Heavy.com’s pop-up campaign until recently, a NetRatings spokeswoman said. When it began excluding those pop-ups in October, Heavy.com’s traffic dropped 35 percent from the previous month, to 1.8 million, although NetRatings said it was unclear how much of the decline was related to removing the pop-ups. (ComScore reported 7.8 million visitors to Heavy.com in October, more than four times the NetRatings number and a large gap even in the inexact world of Web measurement.)

Heavy.com strongly disputes the accuracy of the NetRatings data. Among other things, it argues that the company does a poor job of tracking sites like Heavy.com that use Flash multimedia software throughout their pages. It also said that NetRatings had relatively few college students, who are a large part of Heavy.com’s audience, in its survey group.
http://www.nytimes.com/2006/12/11/te...gy/11push.html





Big Media Taps New Set of Digital Gurus
Seth Sutel

Media titans are still a long way from figuring out how to deliver their goods and engage with their audiences over the Internet, while still making a profit. As they enter 2007, many of these companies will be turning to newly installed executives to make it happen.

At TV and radio broadcaster CBS Corp., CEO Leslie Moonves recently tapped a veteran Silicon Valley dealmaker, Quincy Smith, to build up its interactive offerings. Smith said that part of his mission is to make sure CBS is "very approachable" by entrepreneurs with new ideas.

Another media stalwart, News Corp., is already moving out of entrepreneurial mode with MySpace, the social networking site it acquired 18 months ago, replacing its interactive chief Ross Levinsohn with a seasoned Fox television executive Peter Levinsohn, who happened to be a distant cousin.

"The feeling was that we were entering a stage when this was less about deals ... and more about maximizing what we have," News Corp.'s chief operating officer Peter Chernin told a recent meeting of investors. "Now our focus is how to we build out the asset."

For many media companies, a big question for 2007 will be how to grow their revenues from online and interactive sources, and whether to do it by buying businesses, building up ones they already have or coming up with new models from scratch.

Philippe Dauman, who took over as CEO of MTV owner Viacom Inc. in September, affirmed his goal of reaching $500 million in revenue from digital businesses in 2007, but acknowledged that the company needed to work harder at creating opportunities for advertisers online. "We could sell a lot more than we have," Dauman said at an investor conference.

Dauman came in after Viacom's chairman and controlling shareholder Sumner Redstone grew impatient with the company's lagging share price and what he saw as the apparent hesitation by former CEO Tom Freston to aggressively pursue Internet deals.

How aggressive Big Media will be in 2007 with deals, however, is far from certain. Media bigwigs watched with a mixture of fear and fascination this year as the video-sharing site YouTube became a cultural phenomenon, but few were ready to brave the copyright issues that would have come with buying it, let alone the $1.76 billion price tag that Google Inc. wound up paying for the upstart company, which had yet to make profits.

Media CEOs would love to make transformative deals - CBS' Moonves says he wants to find the "next" YouTube - but the big prizes may remain out of reach. "If your stock is at $500, most deals look pretty cheap," quipped News Corp.'s Chernin, referring to Google's lofty share price. "We don't have that luxury."

Tony Kern, head of the media and entertainment practice at Deloitte, a consulting and accounting firm based in New York, says 2007 will be a year of "reevaluation" for several of the recent deals to hit the media space, notably Google's deal for YouTube.

"There's a lot of money being spent, and while advertising is increasing dramatically across the Internet sites, I don't think it's increasing at a rate that will prove out the investment strategy," Kern said.

Online advertising continues to grow very quickly, but its share of the overall advertising pie remains relatively small. Last week, ZenithOptimedia forecast that global Internet advertising spending would grow 28.2 percent in 2007, compared to growth in other media of 3.9 percent.

However, the $24.4 billion spent on Internet advertising in 2006 is just 5.8 percent of global advertising spending of $423.8 billion, according to ZenithOptimedia. The Internet's share of global advertising is expected to rise to 7 percent next year.

Many expect smaller deals to continue as 2007 unfolds, a process that could result in even more Internet entrepreneurs coming into the fold of media companies, much as MTV Networks' new digital guru, Mika Salmi, came on board after MTV bought the company he founded, Atom Entertainment Inc.

Media companies also could find themselves on the receiving end of investor interest in 2007. With the stocks of many traditional media operators still out of favor on Wall Street, many expect an emerging wave of buyout deals by private equity firms to continue.

Already this year Readers Digest Association Inc., radio industry leader Clear Channel Communications Inc. and Univision Communications Inc., the nation's largest Spanish-language broadcaster, have all agreed to be bought out by private equity firms, and more deals could be on the way. Newspaper publisher Tribune Co. is considering a sale of all or part of the company, a process that should conclude early next year.

"There is a ton of capital in the market right now," says Brendan Buckley, the lead media analyst at Fitch Ratings Inc., a credit ratings agency. "We don't think anyone is immune in this particular market."
http://hosted.ap.org/dynamic/stories...12-11-18-04-35





AOL Executive Turnover Follows Hiring

Several senior executives at AOL have resigned since the hiring of a new chief executive at the Internet company owned by Time Warner.

Among those leaving by the end of the year are James P. Bankoff, executive vice president for programming and products, and Joe Redling, president for AOL mobile, customer management and paid services. The departures are part of an expected shuffle of executive positions by the new chairman and chief executive, Randy Falco. The internal reorganization is expected to be announced on Monday.

Mr. Falco, a longtime executive at NBC Universal, was named last month to succeed Jonathan F. Miller as the head of the Time Warner unit that has undergone change and turmoil in recent years.

The company is in the midst of a major strategy shift away from paid subscriptions for Internet hookups in favor of free Web services for broadband users. Last week, AOL laid off 450 employees under a previously announced restructuring plan.
http://www.nytimes.com/2006/12/16/technology/16aol.html





China Tightening Control of Online Games
AP

China is tightening controls on its booming online game industry, requiring distributors to closely monitor game contents after some were found that included forbidden religious or political material, a state news agency said Tuesday.

The announcement adds to government efforts to tighten controls over Chinese newspapers, television and other media.

Distributors must obtain approval to release new games and submit monthly monitoring reports confirming that operators haven't added forbidden content, the Xinhua News Agency said. It cited a notice by the Press and Publication Administration.

China has 23 million online game players, up from 13.8 million in 2003, according to Xinhua. It said revenues this year are expected to reach 7 billion yuan ($850 million).

The latest crackdown was prompted by "a rash of problems with imported online games, some of which contain sensitive religious material or refer to territorial disputes," Xinhua said. It said some were criticized as pornographic or too violent.

The report gave no details about the religious and territorial issues, but the government is sensitive to references to Islam and Taiwan, the self-ruled island that Beijing claims as its own territory.

Regulators said distributors concealed the content of the games when applying for approval, and operators sometimes upgraded games with improper content, Xinhua said.
http://hosted.ap.org/dynamic/stories...12-12-07-48-16
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