[JackSpratts]

Since 2002


































"Revenue from worldwide theatrical rentals -- the bare bones money that returns to the major U.S. studios after the exhibitor's cut and distribution expenses -- soared 20.9% to $7.95 billion in 2006, setting a record for the six MPA companies." – Hy Hollinger


"Americans spent $166 million for the book in one day." – Motoko Rich


"File-sharing on Pownce would be difficult to police." – Jason Pontin


"It is a revolution. Now with all sorts of really very accessible, very straightforward tools, anybody can make maps. They can select data, they can add data, they can communicate it with others. It truly has moved the power of map production into a completely new arena." – Matthew H. Edney


"This has gone on long enough. It is time for a special counsel to investigate whether criminal charges should be brought." – Senator Russ Feingold, D-Wisconsin


































July 28th, 2007






A Social-Networking Service With a Velvet Rope
Jason Pontin

JUST now, the hottest startup in Silicon Valley — minutely examined by bloggers, panted after by investors — is Pownce, but only a chosen few can try out its Web site.

Kevin Rose, the co-founder and chief architect of Digg, a hugely popular news site, announced in late June the introduction of Pownce, a social-networking service that combines messaging with file-sharing. Mr. Rose immediately endowed his latest venture with some mystique by declaring that, for the time being, only those with invitations would be permitted to test his new site.

Within days, invitations were selling on eBay for as much as $10. Mr. Rose has declined all requests to be interviewed about the service, including my own. But as a consolation, he sent me a coveted invitation. I enjoyed the rare thrill of cyberhipness — and got to experiment with the site.

I learned you can send text messages to individual friends or groups of friends on Pownce as well as post microblogs, or short announcements, to the larger Pownce community. This function is very similar to messaging services like Twitter or Jaiku, and is found on social networks like Facebook and MySpace (although Pownce’s messages cannot, at least for now, be sent to mobile phones). You can also send your friends links, invitations to events, or files like photos, music or videos. Of course, you can already do that on a multitude of file-sharing Web sites. It is the combination of private messaging and file-sharing that makes Pownce so novel.

Om Malik, the author of the technology blog GigaOm, is an enthusiast. “I love it and use it constantly, ” he said in a message sent to me on Pownce. “I like it because it lets me share a lot of different things with the networks of people I really care about.”

Pownce was initially conceived by another founder, Leah Culver, a 24-year-old programmer who developed the site as an experiment. But its glamour derives from Mr. Rose’s reputation for creating digital-media companies that evoke passionate fandom among their youthful audiences. In addition to Digg, he co-founded Revision3, a video production and hosting company opened last September.

“He is super-smart, friendly, humble and a team-builder — a perfect combination for a great entrepreneur,” said Ron Conway, who has invested in Digg and Revision3 and was an early investor in Google. (A disclosure: Mr. Conway also invested in Red Herring Communications, a magazine and Web site I once edited.)

Mr. Rose, 30, dropped out of the University of Nevada at Las Vegas, where he was studying computer science, to pursue his fortune in San Francisco during the dot-com boom. Fortune eluded him then, but he achieved minor fame when, following the collapse of the technology market in 2002, he became a nerdy host on TechTV’s “The Screen Savers.”

The audience Mr. Rose attracted at TechTV was then drawn to Digg, which he began promoting on his show and in his blog when the site was introduced in December 2004. Digg combines social networking, blogging and online syndication to create a site where news stories are ranked by popularity. Today, 17 million people visit Digg every month, according to the company.

After Mr. Rose’s contract with G4, the successor to TechTV, expired, he started Revision3. Each week, 250,000 people go to the company’s Web site to view its most popular show, “Diggnation,” where Mr. Rose and his pal Alex Albrecht lounge on couches, drink beer and discuss the most popular stories on Digg.

Something of Mr. Rose’s concept of his latest venture can be discerned in how he described Digg to me in a recent interview. “For us, it’s really about creating the platform for people to share things with their friends,” he said.

Owen Thomas, the managing editor of the Silicon Valley gossip blog Valleywag, has chronicled the excitement Pownce aroused over the last month, but doesn’t like the service himself. At 35, “I’m kind of old; I’m habituated to e-mail,” Mr. Owen wrote in just such a message.

MY own experiences with Pownce were ambiguous. As with Twitter, I felt mildly repulsed by the banality and exhibitionism of microblogs. On the other hand, I enjoyed the privacy of the closed messaging system and the ease with which I could share things with nicely calibrated groups.

What struck me most was the site’s potential to be powerfully disruptive. Most file-sharing occurs on public sites, which can be monitored by media companies; if the users violate copyrights, the sites or the users themselves can be threatened into compliance or litigated out of existence (as happened with the original Napster). File-sharing on Pownce would be difficult to police.

If I were a media executive concerned about protecting my intellectual property, I would pounce on Pownce. It’s possibly no coincidence that the name Mr. Rose chose for his new venture suggests the Internet gamer’s jargon “pwn,” which means to take control of a system by exploiting some vulnerability.
http://www.nytimes.com/2007/07/29/bu.../29stream.html





UK Government Resists Music Industry Pressure, Caps Copyrights at 50 Years
Eric Bangeman

Music copyrights will remain fixed at 50 years after the British government decided against extending their term to as much as 95 years. In May, the Parliamentary Select Committee on Culture, Media, and Sport had recommended that the term be lengthened to bring it more in line with copyright terms in the rest of the world (95 years in the US).

The music industry had lobbied the government hard for a copyright extension, saying that it was necessary to protect the rights of musicians, especially groundbreaking acts whose older songs were about to hit the 50-year limit. Reuters notes that Cliff Richard will no longer receive royalties from his 1958 hit Move It! once the song hits the 50-year-old mark next year.

Criticism from the music industry has come fast and furious in the wake of the government's decision. "Thousands of musicians have no pensions and rely on royalties to support themselves," said Roger Daltry, lead singer of The Who. "These people helped to create one of Britain's most successful industries, poured money into the British economy and enriched people's lives. They are not asking for a handout, just a fair reward for their creative endeavors."

International Federation of the Phonographic Industry CEO John Kennedy joined in the criticism. "Some of the greatest works of British music will soon be taken away from the artists who performed them and the companies that invested in them," said Kennedy. "Extending copyright term would promote vital investment in young talent and new music, all of which will help to secure the UK's future as an exciting music market."

Critics of extended copyright protection point out that musicians already enjoy 50 years of royalties and that copyright laws attempt to balance the rights of artists with a desire to encourage new works and ensure a rich public domain for new artists to build on.

Although the Parliament committee supported extending the copyright term, a committee charged with examining the UK's IP laws said that expanding the copyright term was not a good idea. Former Financial Times head Andrew Gowers, who led the committee that produced the report, said earlier this year that his committee's work actually led them to conclude that the length of music copyrights should be reduced, not increased. Political realities made arguments for reducing copyright terms unworkable, he said. "I could have made a case for reducing it based on the economic arguments," said Gowers. "As it is, we left it in place rather than increasing it to 95 years as some of the music industry wanted and again, I think we steered a happy middle course rather than siding with one or other of the opposite poles of this debate."

The recording industry can still attempt to make its case to the European Union that copyright should be extended and made uniform throughout the EU, but it will not get the backing of the UK government in doing so.
http://arstechnica.com/news.ars/post...-50-years.html





The French Connections
Paul Krugman

There was a time when everyone thought that the Europeans and the Japanese were better at business than we were. In the early 1990s airport bookstores were full of volumes with samurai warriors on their covers, promising to teach you the secrets of Japanese business success. Lester Thurow’s 1992 book, “Head to Head: The Coming Economic Battle Among Japan, Europe and America,” which spent more than six months on the Times best-seller list, predicted that Europe would win.

Then it all changed, and American despondency turned into triumphalism. Partly this was because the Clinton boom contrasted so sharply with Europe’s slow growth and Japan’s decade-long slump. Above all, however, our new confidence reflected the rise of the Internet. Jacques Chirac complained that the Internet was an “Anglo-Saxon network,” and he had a point — France, like most of Europe except Scandinavia, lagged far behind the U.S. when it came to getting online.

What most Americans probably don’t know is that over the last few years the situation has totally reversed. As the Internet has evolved — in particular, as dial-up has given way to broadband connections using DSL, cable and other high-speed links — it’s the United States that has fallen behind.

The numbers are startling. As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did.

Even more striking is the fact that our “high speed” connections are painfully slow by other countries’ standards. According to the Information Technology and Innovation Foundation, French broadband connections are, on average, more than three times as fast as ours. Japanese connections are a dozen times faster. Oh, and access is much cheaper in both countries than it is here.

As a result, we’re lagging in new applications of the Internet that depend on high speed. France leads the world in the number of subscribers to Internet TV; the United States isn’t even in the top 10.

What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.

You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

America’s Internet flourished in the dial-up era because federal regulators didn’t let that happen — they forced local phone companies to act as common carriers, allowing competing service providers to use their lines. Clinton administration officials, including Al Gore and Reed Hundt, the chairman of the Federal Communications Commission, tried to ensure that this open competition would continue — but the telecommunications giants sabotaged their efforts, while The Wall Street Journal’s editorial page ridiculed them as people with the minds of French bureaucrats.

And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there’s little competition in U.S. broadband — if you’re lucky, you have a choice between the services offered by the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there’s nowhere else to go.

Meanwhile, as a recent article in Business Week explains, the real French bureaucrats used judicious regulation to promote competition. As a result, French consumers get to choose from a variety of service providers who offer reasonably priced Internet access that’s much faster than anything I can get, and comes with free voice calls, TV and Wi-Fi.

It’s too early to say how much harm the broadband lag will do to the U.S. economy as a whole. But it’s interesting to learn that health care isn’t the only area in which the French, who can take a pragmatic approach because they aren’t prisoners of free-market ideology, simply do things better.
http://select.nytimes.com/2007/07/23...tml?8ty&emc=ty





Africa, Offline: Waiting for the Web
Ron Nixon

ON a muggy day in Kigali in 2003, some of the highest-ranking officials in the Rwandan government, including President Paul Kagame, flanked an American businessman, Greg Wyler, as he boldly described how he could help turn their small country into a hub of Internet activity.

Mr. Wyler, an executive based in Boston who made his fortune during the tech boom, said he would lace Rwanda with fiber optic cables, connecting schools, government institutions and homes with low-cost, high-speed Internet service. Until that point, Mr. Wyler, 37, had never set foot in Africa — he was invited by a Rwandan government official he had met at a wedding. Mr. Wyler never expected to start a business there; he simply wanted to try to help the war-torn country.

Even so, Mr. Wyler’s company, Terracom, was granted a contract to connect 300 schools to the Internet. Later, the company would buy 99 percent of the shares in Rwandatel, the country’s national telecommunications company, for $20 million.

But after nearly four years, most of the benefits hailed by him and his company have failed to materialize, Rwandan officials say. “The bottom line is that he promised many things and didn’t deliver,” said Albert Butare, the country’s telecommunications minister.

Mr. Wyler says he sees things quite differently, and he and Rwandan officials will probably never agree on why their joint venture has been so slow to get off the ground. But Terracom’s tale is more than a story about a business dispute in Rwanda. It is also emblematic of what can happen when good intentions run into the technical, political and business realities of Africa.

Attempts to bring affordable high-speed Internet service to the masses have made little headway on the continent. Less than 4 percent of Africa’s population is connected to the Web; most subscribers are in North African countries and the republic of South Africa.

A lack of infrastructure is the biggest problem. In many countries, communications networks were destroyed during years of civil conflict, and continuing political instability deters governments or companies from investing in new systems. E-mail messages and phone calls sent from some African countries have to be routed through Britain, or even the United States, increasing expenses and delivery times. About 75 percent of African Internet traffic is routed this way and costs African countries billions of extra dollars each year that they would not incur if their infrastructure was up to speed.

“Most African governments haven’t paid much attention to their infrastructure,” said Vincent Oria, an associate professor of computer science at the New Jersey Institute of Technology and a native of the Ivory Coast. “In places where hunger, AIDS and poverty are rampant, they didn’t see it as critical until now.”

Africa’s only connection to the network of computers and fiber optic cables that are the Internet’s backbone is a $600 million undersea cable running from Portugal down the west coast of Africa. Built in 2002, the cable was supposed to provide cheaper and faster Web access, but so far that has not happened.

Prices remain high because the national telecommunications linked to the cable maintain a monopoly over access, squeezing out potential competitors. And plans for a fiber optic cable along the East African coast have stalled over similar access issues. Most countries in Eastern Africa, like Rwanda, depend on slower satellite technology for Internet service.

The result is that Africa remains the least connected region in the world, and the digital gap between it and the developed world is widening rapidly. “Unless you can offer Internet access that is the same as the rest of the world, Africa can’t be part of the global economy or academic environment,” said Lawrence H. Landweber, professor emeritus of computer science at the University of Wisconsin in Madison, who was also part of an early effort to bring the Web to Africa in the mid-1990s. “The benefits of the Internet age will bypass the continent.”

RWANDAN officials were especially interested in wiring primary and secondary schools, seeing information technology as crucial to modernizing the country’s rural economy. Some 90 percent of the country’s eight million people work in agriculture.

But as of mid-July, only one-third of the 300 schools covered in Terracom’s contract had high-speed Internet service. All 300 were supposed to have been connected by 2006.

Over all, less than 1 percent of the population is connected to the Internet. Rwandan officials say the company seems more interested in tapping the more lucrative cellphone market than in being an Internet service provider. (In November, Mr. Wyler stepped down as chief executive of Terracom, saying he wanted to spend more time with his family; he still serves on the board.)

In a telephone interview from his home in Boston, Mr. Wyler said he would not address the government’s criticism, saying he did not want to be quoted as saying anything negative. But he said there were some things he had not anticipated, particularly the technical challenges of linking Rwanda’s Internet network to the rest of the world. The only way to do it is to buy bandwidth capacity on satellites, but there are not enough satellites to meet demand.

Mr. Wyler also says he believes that Terracom suffers from unrealistic expectations. “Terracom has done everything it can, “ he said. “Because of the technical challenges, the Internet service is as good as it’s going to get. But given what we started from, I still think we have accomplished a lot. In the beginning there were a few people with Internet service; now there are thousands.”

The Rwandan government had hoped that the number of Web surfers would be much higher by now. Rwanda, which is about the size of Maryland, has little industry, and its infrastructure is still being rebuilt after being left in shambles by a 1994 genocide in which 800,000 to a million people were killed.

“We have almost no natural resources and no seaports in Rwanda, which leaves us only with trying to become a knowledge-based society,” said Romain Murenzi, the minister of science, technology and scientific research.

Officials saw Terracom’s investment as crucial to its transformation. Unlike many African governments, Rwanda’s was eager to privatize the national telecommunications company, which had outdated equipment, high prices and few subscribers.

But from the start, government officials say, there were problems with Terracom. Mr. Butare, the telecommunications minister, said the government had trouble getting basic information from the company.

Complicating the situation, Mr. Butare said, was that Mr. Wyler tried to run Terracom from the United States, visiting Rwanda just a few weeks at a time. He left day-to-day management to a poorly trained staff, Mr. Butare said.

“There were spots where they did some things here and there,” Mr. Butare said. “But over all they have failed to do what they promised.”

Internet rates have been lowered, from about $1,000 a month when Terracom arrived in 2003, but most people still can’t afford it. The average Rwandan makes about $220 a year, and a fixed-line Internet hookup costs about $90 a month. Basic wireless Internet is about $63 a month. Those rich enough to pay the fees complain about poor service.

Government officials say the company has spent more time marketing and signing up cellphone customers than on expanding Internet service. According to government figures, Terracom has 30,000 to 40,000 mobile phone subscribers and about 20,000 Internet customers.

The situation came to a head late last year, when government officials contended that Terracom secretly tried to trade its shares in the Rwandan telecom to GV Telecom, a regional African telecommunications company incorporated in the British Virgin Islands. Rwandan officials were furious, saying this was a violation of the contract signed by the two parties.

The plan was scrapped and Mr. Wyler was widely criticized. In June, the government fined Terracom nearly $400,000 for failing to comply with its licensing obligations, failing to provide information about its operations and failing to pay several fees.

“We decided to penalize Terracom after they failed to fulfill their obligations for a long time,” said Beatha Mukangabo, legal officer for the Rwanda Utilities Regulatory Agency. Terracom said it has paid the fines and is working with the government to meet all of its obligations.

Mr. Wyler said he has not been involved in Terracom for nearly 10 months and could not comment on its current operations.

Christopher Lundh, Terracom’s new chief executive and a former executive of Gateway Communications in London, has worked in several African countries. He now lives and works full time in Rwanda, and many government officials say Terracom’s performance has improved under his leadership.

Mr. Lundh acknowledged that there were problems with the company’s operations in the past. “The former management did make some promises that they were not able to keep,” he said. “That’s why I was brought in to professionalize things.” He also said that the company could have better handled the matter with GV Telecom but that he thinks the government overreacted.

He said the Rwandan government is to blame for some of the delays. “We would get to schools that don’t even have electricity or computers,” he said. “That is not our fault.” In addition, he said that many of the complaints about the company concerned things beyond its ability to control. Getting adequate bandwidth remains a constant challenge.

Like most telecommunications companies in eastern Africa, Terracom depends on satellites for Internet service. Satellite service is much slower than cable because of delays in the signals. Satellites also provide less bandwidth than cable.

Adding to the problem is that most of the satellites serving Africa were launched nearly 20 years ago and are aging or going out of commission. A satellite set to go into service last year blew up on the launching pad. Power is also an issue, as intermittent power failures in Rwanda hamper efforts to provide a steady electricity source.

DESPITE these limitations and earlier setbacks, Mr. Lundh says Terracom is moving ahead with plans to give Rwanda the most advanced Internet infrastructure in Africa. A nationwide wireless connection should begin operating near year-end, he said, about the time a nonprofit group, One Laptop Per Child, based in Boston, is to introduce a $100 laptop in the country.

And Terracom is continuing to lay fiber optic cables to connect Rwanda to several other African countries, eliminating a need for phone calls and Internet traffic to be routed via European or American networks.

The government, meanwhile, is moving forward with its own plans to build a fiber optic network. It also has granted Internet service licenses to South African companies and plans to issue several more. “We think we are going to have a healthier market pretty soon,” said Nkubito Bakuramutsa, director general of the Rwanda Information Technology Authority. “We have learned from past experience.”

Mr. Bakuramutsa said he hopes to bring the price of Internet service down to about $10 a month.

Mr. Lundh said his company welcomes the competition. But, he added, getting necessary bandwidth remains an issue and no matter what company supplies Internet service, speed will be a problem. “Eventually you reach a point of diminishing returns,” he said. “Unless there is a new undersea fiber optic cable built or a new satellite launched, it’s going to be difficult.”

Magnus K. Mazimpaka contributed reporting from Rwanda.
http://www.nytimes.com/2007/07/22/bu.../22rwanda.html





AT&T Reports Higher 2Q Income
Michelle Roberts

AT&T Inc. posted a 61 percent increase in second-quarter earnings on Tuesday, lifted primarily by its buyout of BellSouth Corp. but also aided by gains in wireless subscribers and revenue.

AT&T, the nation's largest provider of broadband Internet and land and wireless phone services, said net income rose to $2.9 billion, or 47 cents per share, from $1.81 billion, or 46 cents per share in the prior year's quarter. Wireless subscribers rose by 1.5 million to 63.7 million, AT&T said.

A fraction of that growth during the quarter was driven by the introduction of Apple Inc.'s iPhone, for which AT&T is the exclusive carrier. The device, which combines phone, media player and Web-surfing capabilities, went on sale less than two days before the end of the quarter, but in that time, 146,000 iPhones were activated, AT&T said.

More than 40 percent of the devices went to new AT&T subscribers, and sales continue to be strong in July, the company said.

Chairman and Chief Executive Officer Randall Stephenson, who took the helm in early June, has emphasized the mobile business as a key driver for the company. At his first board meeting as CEO, the company agreed to buy rural wireless provider Dobson Communications Corp. for $2.8 billion in cash.

Dobson, which does business as Cellular One in 17 states, has about 1.7 million subscribers.

For the second quarter, AT&T had earnings of 70 cents a share excluding costs for major acquisitions, up from 58 cents per share for the same three months last year and above the 67 cents average estimate of analysts polled by Thomson Financial.

Revenue for the quarter reached $29.5 billion, up from $15.8 billion in the year-earlier quarter.

Revenue growth continues to be driven by wireless data use for services like messaging, downloads and laptop connectivity. Revenue from that business was up 67 percent for the quarter to $1.7 billion.

The company also reported strong growth in the subscriber base for its U-verse television service, a premium service that uses a high-speed Internet connection for delivery. By the end of June, U-verse had 51,000 subscribers in the 23 cities in which it is available, up from the 13,000 users at the end of the first quarter.

AT&T is banking on U-verse to help combat competition from cable companies, which have been bundling high-speed Internet and land line phone service to lure customers away from tradition phone companies.

The company, which has grown aggressively through a string of acquisitions over the last several years, said cost savings from the integration of BellSouth reached $1.9 billion in the first six months of the year. The savings should reach $3 billion by year's end and $5 billion in 2008.
http://www.chron.com/disp/story.mpl/ap/fn/4993535.html





Corning Develops Ultra-Flexible Optical Fiber for High-Rise Homes
Ben Dobbin

Corning Inc. is finding its way around very tight corners to help high-speed Internet service reach high-rise apartments and condominiums.

The world's largest maker of optical fiber said Monday it has developed a new fiber that is at least 100 times more bendable than standard fiber, clearing a major hurdle for telecommunications carriers drawing fiber into homes.

"This is a game-changing technology for telecommunications applications," said Corning's president, Peter Volanakis. "We have developed an optical fiber cable that is as rugged as copper cable but with all of the bandwidth benefits of fiber."

Three Corning scientists invented low-loss optical fiber in the early 1970s. The gossamer-thin strands of ultra-pure glass delivering voice, video and data at the speed of light have replaced copper as the backbone of America's telephone and cable television networks and enabled the phenomenal growth of the Internet.

Current optical fiber doesn't carry light well when it is bent around corners and routed through a building, making it difficult and expensive to run fiber all the way to homes and businesses. The ultra-flexible technology allows the fiber to be bent with virtually no signal loss, Corning said.

Corning said the improvements will enable carriers to economically offer high-speed Internet, voice and high-definition TV service to virtually all high-rise buildings.

In standard fiber, the light signal leaks out at bends or turns and "with two 90-degree turns, the signal is lost," Corning spokesman Dan Collins said. "This design relies on nanostructures that serve as a mirror or a guardrail, and as the fiber is turned or bent, the light doesn't leak out. We have wrapped the fiber around a ball point pen and it retains its effectiveness."

Michael Render, a market researcher in Tulsa, Okla., said the new product "would be an important breakthrough" in fiber-to-the-home systems.

More than 1 percent of North American homes are now directly connected to fiber, but many of them are single-family dwellings, Render said.

"There obviously are a large number of people that live in multi-tenant buildings, and improvements in the way to get fiber to those individual living units could be very significant," he said.

Render said the technology would make it easier to bring fiber "all the way to each individual living room, for example, or at least to each floor," instead of taking it only to the basement and then using existing wiring to reach the living unit.

There are more than 25 million high-rise apartment homes in the United States and more than 680 million worldwide. "The high cost of installation and difficulty in delivering fiber to the home made this market unappealing to most providers," Volanakis said in a statement.

Corning formed a working team with New York-based Verizon Communications Inc. in February to tackle the problems of installing fiber in multiple-dwelling buildings. Verizon is the only major U.S. phone or cable company to aggressively draw fiber to existing homes.

"This fiber technology will enable us to bring faster Internet speeds, higher-quality high-definition content and more interactive capabilities than any other platform which exists today," said Paul Lacouture, a Verizon Telecom executive.
http://hosted.ap.org/dynamic/stories...EAST&TEMPLATE=





US Senators Call for Universal Internet Filtering
Adam Thomas

US senators today made a bipartisan call for the universal implementation of filtering and monitoring technologies on the Internet in order to protect children at the end of a Senate hearing for which civil liberties groups were not invited.

Commerce Committee Chairman Daniel K. Inouye (D-Hawaii) and Senate Commerce, Science, and Transportation Committee Vice Chairman Ted Stevens (R-Alaska) both argued that Internet was a dangerous place where parents alone will not be able to protect their children.

“While filtering and monitoring technologies help parents to screen out offensive content and to monitor their child’s online activities, the use of these technologies is far from universal and may not be fool-proof in keeping kids away from adult material," Sen. Inouye said. “In that context, we must evaluate our current efforts to combat child pornography and consider what further measures may be needed to stop the spread of such illegal material over high-speed broadband connections."

"Given the increasingly important role of the Internet in education and commerce, it differs from other media like TV and cable because parents cannot prevent their children from using the Internet altogether," Sen. Stevens said. "The headlines continue to tell us of children who are victimized online. While the issues are difficult, I believe Congress has an important role to play to ensure that the protections available in other parts of our society find their way to the Internet."

The measures they are calling for include directing the Federal Communications Commission to identify industry practices "that can limit the transmission of child pornography" and requiring the Federal Trade Commission to form a working group to identify blocking and filtering technologies in use and "identify, what, if anything could be done to improve the process and better enable parents to proactively protect their children online."

"In its zeal to protect kids from predators and potentially inappropriate content, Congress must not trample the First Amendment rights of Internet users," Center for Democracy and Technology said in a statement submitted to the Committee today.

They highlighted the finding of a report prepared by diverse group of people including individuals with expertise in constitutional law, law enforcement, libraries and library science, information retrieval and representation, developmental and social psychology, Internet and other information technologies, ethics, and education found that “public policy can go far beyond the creation of statutory punishment for violating some approved canon of behavior.”

"[T]he most important finding of the committee is that developing in children and youth an ethic of responsible choice and skills for appropriate behavior is foundational for all efforts to protect them—with respect to inappropriate sexually explicit material on the Internet as well as many other dangers on the Internet and in the physical world," the Thornburgh Committee concluded.
http://pressesc.com/news/78225072007...rnet-filtering





Congress: P2P Networks Harm National Security

Politicians charged on Tuesday that peer-to-peer networks can pose a "national security threat" because they enable federal employees to share sensitive or classified documents accidentally from their computers.

At a hearing on the topic, Government Reform Committee Chairman Henry Waxman (D-Calif.) said, without offering details, that he is considering new laws aimed at addressing the problem. He said he was troubled by the possibility that foreign governments, terrorists or organized crime could gain access to documents that reveal national secrets.

Also at the hearing, Mark Gorton, the chairman of Lime Wire, which makes the peer-to-peer software LimeWire, was assailed for allegedly harming national security through offering his product.

The documents at risk of exposure supposedly include classified government military orders, confidential corporate-accounting documents, localized terrorist threat assessments, as well as personal information such as federal workers' credit card numbers, bank statements, tax returns and medical records, according to recent studies by the U.S. House of Representatives Committee on Oversight and Government Reform, the U.S. Patent and Trademark Office, and private researchers.

Evidence that sensitive information is accessible through peer-to-peer networks illustrates "the importance of strengthening the laws and rules protecting personal information held by federal agencies" and other organizations, said Rep. Tom Davis (R-Va.), the committee's ranking member, who has sponsored a bill that would impose new requirements on government agencies that discover security breaches. "We need to do this quickly."

The politicians present Tuesday generally said they believe that there are benefits to peer-to-peer technology but that it will imperil national security, intrude on personal privacy and violate copyright law, if not properly restricted. Both Waxman and Rep. Paul Hodes (D-N.H.) dubbed P2P networks ongoing national security threats.

Congressional gripes about P2P networks are hardly new, and in the past, they have reinforced concerns raised by the Motion Picture Association of America and the Recording Industry Association of America. Four years ago, the same committee held a pair of hearings that condemned pornography sharing on P2P networks and also explored leaks of sensitive information. And throughout 2004, Congress considered multiple proposals that would have restricted--or effectively banned--many popular file-swapping networks. Waxman noted that he was not seeking to ban peer-to-peer networks this time around but rather to "achieve a balance that protects sensitive government, personal and corporate information and copyright laws."

To be sure, the kind of information leaks that alarmed politicians at Tuesday's hearing are most likely already against the law or federal policy. It is illegal for government employees to leak certain types of classified documents without approval, either electronically or through traditional paper means.

Mary Koelbel Engle, the associate director for advertising practices in the Federal Trade Commission's Bureau of Consumer Protection, said her agency has found in its studies of peer-to-peer network use that risks to sensitive information "stem largely from how individuals use the technology rather than being inherent in the technology itself."
http://news.zdnet.com/2100-1009_22-6...tml?tag=st.num





800,000 Stolen Social Security Numbers: a 22-Year-Old Scapegoat?
David Cassel

A 22-year-old intern said today he's the "scapegoat" for the loss of over 800,000 social security numbers.

A backup tape was stolen from his car last month containing at least 770,000 social security numbers (with the corresponding names) for Ohio taxpayers. It also contained the social security numbers for another 64,000 state employees. Today the intern issued a statement with his side of the story.

Four months ago 22-year-old Jared Ilovar — who's studying computers at DeVry University — started an internship with the state of Ohio. He said he'd sometimes take home a data tape to ensure there was an off-site version of the data. "The extent of my instructions on what to do after I removed the tapes from the tape drive and took the tapes out of the building was, 'bring these back tomorrow.'"

So on the night of the theft, over 800,000 social security numbers were on a tape in his car, parked outside his apartment. "It is my understanding that five or more cars were broken into the same night as my car was broken into…" he announced today, "and now I am the scapegoat for the State of Ohio."

It became the internship from hell — though from a security perspective, it was an undeniably sloppy procedure. A separate report Friday from Ohio's Inspector General noted that the intern "remembered to bring them into his apartment approximately 85% of the time," and that on those occassions, he'd put the data tapes "on top of his TV, so that he would remember to bring them back on the following day." After investigating more than a month, the Inspector General reported this had been the policy for over five years, and that for the last two years, it had been executed by interns. (One intern even described the continuing tradition proudly as "the passing of the torch.") Amazingly, the same policy had also been in effect at Ohio's Office of Management and Budget for the last eight years.

Their report also faults the chain of command, which was muddled by contractors. The Inspector General identified Jared Ilovar as "a 22-year-old, $10.50-an-hour employee" hired just three months earlier, who received his assignment from…another intern. The intern reported to a $125-an-hour consultant, who reported to another $200-an-hour consultant…

But the intern also says that when he reported the theft of the backup tapes, he was instructed not to notify the police. "Because of my following their instruction…I was looked upon as if I was the criminal. I was put through a grueling three hour polygraph test, numerous interviews with various investigators, and countless phone calls…" The Inspector General's reports that had a timely report been filed, the Highway Patrol could have been alerted — and nearby trash bins could've been searched in case the tapes had been discarded nearby.

And the internship from hell ended badly, too. In his statement today, he remembered that Friday, "I was called in to an office and handed a letter of resignation and told, 'sign this letter of resignation or you are fired.'" He asked for more than 10 minutes, so he could talk to his parents — and was refused. He later resigned — then spoke to his parents again, and rescinded his resignation. And then was fired.

The Inspector General's report shares a crucial recommendation from Gartner Inc and other security analysts: encrypt data before storing it off-site, and secure it like cash. (If not using armored transport, then electronically transmitting the data to off-site storage using a secure connection.) Though the State of Ohio is a $52-billion-a-year enterprise, they had instead authorized "a succession of interns" to take the unencrypted tapes home for the previous two years, with a friendly reminder to store them "in a safe place."

Using census data from 2000, it seems the stolen data includes social security numbers for 7.3% of the people in the entire state of Ohio. And the city police force has since offered a whopping $500 reward for the return of the data.

Looking at the incident, a technology worker in another state identified the real culprits as the policy makers for the state of Ohio.

"That is an unbelievable back-up plan!

"'Make Skippy do it!'"
http://tech.blorge.com/Structure:%20...old-scapegoat/





Congress and the Feds Should Clean Up Their Own Act
George Ou

Every once in a while you’ll get a political hearing on capitol hill where elected Government officials will grand stand and politicize issues that should have nothing to do with politics. This time it’s Government Reform Committee Chairman Henry Waxman who says he is considering new laws against P2P (Peer to Peer) software citing the possibility that P2P software may compromise National Security and can be used by organized crime. The problem is that Mr. Waxman hasn’t a clue what he’s talking about and this new round of political grandstanding is absurd.

The Federal Government should clean up their own security act because year after year they get failing or near failing grades. Mr. Waxman is slamming Lime Wire for producing software that may circumvent Federal Government security, but the real question is why are Federal Government IT departments allowing Federal employees to install Lime Wire or any other piece of software on Government computers? The mere fact that Government Employees have administrative access to install software on their computers let alone computers with access to sensitive information is absurd. If you can’t even keep employees from installing Lime Wire, you’re sure as hell not going to prevent them from installing root kits which are infinitely more destructive.

Why pick on Lime Wire? Sandy Berger stole secret documents from the National Archives by shoving the documents in to his socks so will Congressman Waxman propose a new law against socks? Will Congressman Waxman call the CEO of Fruit of the Loom to the hearings and grill him about the dangers of socks? If we’re afraid that Federal Employees with use P2P software to divulge national secrets, shouldn’t we be afraid they’ll use the fax machine too? Shouldn’t we be more worried about the type of employees we place in to sensitive positions? While we’re at it, why not make Malware illegal? Oh yeah, they’re already illegal but that hasn’t stopped them. The onus is on the IT organization to lock down their end points and network resources so that malicious software doesn’t get in to their infrastructure in the first place. The onus is on the Government or any organization to lock down their infrastructure from the physical layer to the application layer to the people working for them.
http://blogs.zdnet.com/Ou/?p=633





Showdown Over File Sharing
Scott Jaschik

College officials have been aware and wary of growing Congressional interest in student file sharing of music and videos — a practice many students consider normal and that the entertainment industry views as tantamount to theft. Colleges, generally feeling caught in the middle, have worried that Congress might try to impose an unworkable solution.

And that’s what they fear could happen this week — with the Senate majority leader (needless to say someone with whom colleges do not want to pick a fight) largely responsible. Sen. Harry Reid of Nevada announced his plan to prevent “campus based digital theft” through a series of requirements that he is expected to try to attach to the reauthorization of the Higher Education Act, when the Senate takes up that legislation, most likely in the next day or so. The Reid plan would require colleges to:

• Report annually to the U.S. Education Department on policies related to illegal downloading.
• Review their procedures to be sure that they are effective.
• “Provide evidence” to the Education Department that they have “developed a plan for implementing a technology-based deterrent to prevent the illegal downloading or peer-to-peer distribution of intellectual property.”

The measure would also require the education secretary to annually identify the 25 colleges and universities that have in the previous year received the most notices of copyright violations using institutional technology networks.

While those provisions are in the amendment Senator Reid unveiled last week, they could easily change today or tomorrow, and lobbyists following the situation described it as fluid.

Reporting requirements are already in the reauthorization bill, so they aren’t the reason colleges are upset. Mark Luker, vice president of Educause, said that the measure on “technology based” systems would force colleges to buy software or hardware to theoretically block file sharing when that technology hasn’t yet become effective. Some experts also question whether this technology in its current form would end up blocking file-sharing that does not violate anyone’s copyright and that supports teaching and research.

“These technologies do not work well,” Luker said. “They are really not ready for prime time and colleges should not be forced to install them.”

Luker also objected to the way the legislation makes colleges uniquely responsible for the problem when file sharing starts in middle school these days and doesn’t end with college graduation. “Colleges have been working very hard on this issue,” he said, trying to teach their students about copyright law, adding services that provide free or low cost music downloads, and adding new rules all the time to discourage illegal file sharing. The University of Kansas, for example, has just toughened punishments for those who use campus networks in violation of downloading bans.

It is unfair for Congress to expect colleges to prevent all file sharing while ignoring its prevalence elsewhere, Luker said. “Colleges get a new cohort of freshmen every year, so they can come in with these habits well established with their prior life,” he said.

Another problem with the Reid proposal, Luker said, is that the measure of copyright notice violations will end up implying that large institutions (which receive more of such notices by virtue of the size of their student bodies) ignore copyright law, when they are just large. Further, such notices are not necessarily legal findings, but are the opinions of the entertainment industry, he said.

“This is asking the education secretary to take actions based on information provided by the entertainment industry, and that’s inappropriate for the government and the entertainment industry,” Luker said.

Educause and other groups have started a lobbying campaign against the measure, stressing both their substantive opposition and complaints that there were never hearings on the proposal.

At the same time, the entertainment industry is lobbying for the amendment — and arguing that colleges need more of a prod from the government on the issue. Mitch Bainwol, chairman and CEO of the Recording Industry Association of America, on Friday sent a letter to Senator Reid praising his proposal.

In his letter, Bainwol said that more than half of college students engage in illegal file sharing or downloading. While he acknowledged “some progress” by colleges in recent years, he said that “much more can be done.” Bainwol noted that many campus networks are created with taxpayer funds and are intended for “academic and research purposes,” but end up, he said, giving students “a means to steal.”

The letter repeatedly made the case that colleges are directly responsible for the problem, which the letter maintained is hurting the economy. Wrote Bainwol: “Colleges have provided an ideal environment for online theft to thrive, producing a generation of citizens lacking an appreciation for the true value of copyrighted works.”
http://www.insidehighered.com/news/2007/07/23/fileshare





Reid Amendment Misrepresents Data
Kenneth C. Green

The comments by Mitch Bainwol, chairman and CEO of the Recording Industry Association of America, misrepresent the RIAA’s own data on who is engaged in illegal downloading and which (broadband) networks are being used for illegal downloading. Some examples: — only 4 percent (329) of the more than 8400 “John Doe” lawsuits filed by the RIAA in 2004-2005 involved college students; the rest were “civilians” using consumer broadband services. — a RIAA news release dated 28 Feb 07 states that “college students are the most avid music fans.” Yet data from the RIAA’s 2005 Consumer Profile reveal that consumers ages 18-24 (including but not limited to college students) account for approximately one-sixth (15-17 pct.) of the music buying population in the United States; in contrast, consumers ages 25 and older purchase two-thirds (66.9 pct.) of all recorded music.— “half” the nation’s more than 16 million college students ages 16-67 are NOT engaged in illegal downloading as claimed by Mr. Bainwol and others from the RIAA.

Directly related to the Reid amendment is testimony before the House Science and Technology Committee Hearing on Digital Piracy on 5 June 2007. All four expert witnesses invited by Chairman Gordon – including Vance Ikezoye, president of Audible Magic, a provider of IT tools intended to stem digital piracy – acknowledged that technology will not solve the digital piracy problem. In his testimony before Chairman Gordon, Mr. Ikezoye stated quite clearly that “technology will never be the entire solution to [P2P piracy].” At the same hearing, Dr. Adrian Sannier from Arizona State University reported that his campus recently spent $200,000 for a heavily discounted site license to use the Audible Magic technology. Dr. Sannier described campus spending on technology to stem P2P piracy as an unwinnable “arms race.”

Consumer broadband providers – telcos and cable companies – promote digital piracy by advertising that home broadband and wireless services provide faster access to “music, movies, and more,” without explaining who owns this content or how to purchase it. Moreover, unlike colleges and universities, consumer broadband providers generally fail to provide any user education about digital content and copyright issues when users establish new accounts. Yet neither the RIAA nor the Congress seems willing to discuss the role of consumer broadband providers in implicitly promoting — or at least condoning — digital piracy.

Reid’s amendment targeting Campus-based Digital Theft Prevention will only serve to force colleges and universities to spend significant sums for ineffective software while imposing additional and significant reporting and compliance costs. The only beneficiary will be the RIAA, which will then report to its members that it has worked with Congress to “do something” to address digital piracy on campus networks.

The RIAA’s almost exclusive focus on campuses ignores the broader and more costly problem of illegal P2P downloading involving consumer Internet service providers and the consumer market.

Ample evidence indicates that requiring colleges and universities to purchase a “technology-based deterrent “ to prevent illegal P2P downloading will be ineffective practice and bad public policy.
http://www.insidehighered.com/news/2007/07/23/fileshare





Universities Win Senate Fight Over Anti-P2P Proposal
Declan McCullagh

Senate Majority Leader Harry Reid has withdrawn anti-file sharing legislation that had drawn yowls of protest from universities this week.

Reid, without explanation, on Monday nixed his own amendment that would have required colleges and universities--in exchange for federal funding--to use technology to "prevent the illegal downloading or peer-to-peer distribution of intellectual property."

Instead, Reid replaced it with a diluted version merely instructing higher ed institutions to advise their students not to commit copyright infringement and tell students what actions they're taking to prevent "unauthorized distribution of copyrighted material" through campus networks. The revised version was tacked onto the Higher Education Reauthorization Act on Tuesday, a Reid spokesman said in a telephone conversation, which the Senate then approved by a 95-0 vote.

The original version, which had more teeth, alarmed lobbyists for universities, which tend to be delighted to accept federal largesse but rather dislike the government placing conditions on the cash.

Even worse, in their opinion, must have been the additional requirement (also now deleted) that the Department of Education annually identify the 25 colleges and universities receiving the "highest number of written" complaints from copyright owners.

Educause, a group that represents universities and related organizations, sent out an "URGENT CALL TO ACTION" on Friday that called Reid's original amendment "yet another attempt by the federal government to dictate the day-to-day operations of colleges and universities." It urged recipients to phone Congress immediately "and tell them how much higher education opposes this amendment."

It's unclear why the senator yanked his original anti-P2P amendment on Monday evening, but the most obvious explanation is that the last-minute pressure worked.

What's a little odd is that Reid offered a third version of the amendment earlier in the week. It said the Department of Education "shall not find any of the 25 institutions of higher education...to be ineligible for continued participation in a program authorized under this subchapter because of failure to comply with this section."

Translation: Universities could ignore the requirements of creating "a technology-based deterrent to prevent the illegal downloading or peer-to-peer distribution of intellectual property" without suffering any financial consequences. The only downside would be the potential for bad publicity, but even that appeared to prove worrisome enough.

The final version amends existing federal law that already deluges students with piles of paperwork they already never read on topics like faculty listings, special facilities for the handicapped, accreditation information, graduation rate statistics, campus crime reports, and so on. Now the piracy information will be added to the stack. ("Information required by this section shall be produced and be made readily available upon request, through appropriate publications, mailings, and electronic media, to an enrolled student and to any prospective student.")

We should note that by "final," in true Washington fashion, we don't actually mean final. It may be final at the moment, but because the broader bill includes controversial components like $17 billion more on taxpayer-subsizied student loans and debt forgiveness, it may not necessarily become law. The House of Representatives has approved a different version of the law, and the Bush administration has said either version could amount to an unacceptable increase in spending.

Still, the Motion Picture Association of America seems to have decided that even the diluted final amendment is better than the current state of the law, and put a good face on the outcome. In a press release on Tuesday afternoon, the MPAA called the Senate vote a "major step" to combat piracy on campus, and included its estimate that movie piracy among students accounts for "more than half a billion dollars loss to the U.S. industry annually."
http://news.com.com/8301-10784_3-9749071-7.html





Russian Prosecutors Seek Jail Time for Allofmp3.com Owner
Greg Sandoval

Prosecutors in Russia have demanded jail time for the operator of Allofmp3.com, according to published reports.

Denis Kvasov, the former owner of the popular Russia-based music site that sold unauthorized music downloads, is facing charges for massive copyright infringement, according to German newspaper, Deutsche Presseagentur.

The prosecutor in the case has asked the court to sentence Kvasov to three years in prison and ordered him to pay restitution to EMI, Warner and Universal in the amount of $590,000 (15 million rubles), Presseagentur reported.

Allofmp3.com closed last month after U.S. trade officials pressured Russia's government to crack down on copyright theft. The Recording Industry Association of America had long targeted the site. The U.S. had suggested that Russia might be barred from joining the World Trade Organization unless it complied.
Now on News.com
P2P networks called national security threat Credits roll for Facebook hearing Video: What's to like about TiVo HD Extra: Antique engines inspire nano chip

United States Trade Representative spokeswoman Gretchen Hamel, whose agency negotiates trade agreements with foreign governments, said earlier this month her group was pleased with Russia's actions to close the "notorious site" Allofmp3.com.

"This action follows months and years of the U.S. government, Congress, and industry urging Russia to step up its protection of intellectual property," Hamel said. "We are concerned that its piracy activities appear to have migrated to other Web sites based in Russia."

Within days of the closure of Allofmp3.com, a new site cropped up, Mp3sparks.com, which appeared operational on Tuesday. The new site is reportedly run by the former operators Allofmp3.com, although that fact could not be independently confirmed by CNET News.com.
http://news.com.com/Russian+prosecut...3-6198520.html





BitTorrent Sites Shut Down, Admins Arrested
Ernesto

In a renewed effort to put a halt to piracy, Spanish Police shut down two BitTorrent sites. Todotorrente.com and trackertdt.com were both taken offline and three administrators were arrested and accused of facilitating “copyright infringement”.

The main target, todotorrente.com, was one of the largest Spanish BitTorrent sites in Spain with tens of thousands active users. On the site we now read the following message (translated):

“Closed By Judicial Order”

According to the Police, todotorrente.com was responsible for more than 500,000 € in losses to copyright holders, while the site itself made more than 30,000 € in profits. Numbers that can’t be backed up by any evidence of course, but we’re used to that.

Todotorrente.com was not the only site affected by the raids. In addition, the police took down trackertdt.com, a sister site of todotorrente.com. Gamesfive.net, another sister site, now redirects to blackdivx.org.

This is not the first time that Spanish authorities take action against BitTorrent sites. Last year, 15 administrators of BitTorrent and eDonkey sites were arrested, in the largest P2P raid in Spanish history. Most of the sites that were shut down last year (17 in total) remain unavailable up until today, however, pctorrent.com now redirects to newpct.com, one of the largest BitTorrent sites in Spain.

A bittersweet week for Spanish pirates.
http://torrentfreak.com/bittorrent-s...mins-arrested/





Filtering Torrents: The Pirate Bay vs. Torrentspy & Isohunt
Ernesto

Torrentspy and Isohunt announced that they will give content owners a “carte blanche” to remove torrents from their BitTorrent search engines last month. The perfect solution for content owners and site admins says Torrentspy - a nightmare according to The Pirate Bay.

It all started when Torrentspy owner Justin launched a .torrent removal system called “FileRights” that content owners can use to take down “infringing” torrents. From now on, the FileRights system will be used on Torrentspy and Isohunt, two BitTorrent sites that were sued last year by the MPAA.

This basically means that the content owners such as the RIAA and the MPAA get complete control over the(ir) content on all the sites that use FileRights. They decide what torrents can stay and what torrents have to be filtered out. Pirate Bay admin Brokep thinks that the removal system is a step in the wrong direction and accuses Torrentspy of trying to make money by sleeping with both sides, “if you can’t take the heat, get out of the kitchen, don’t blow it up so nobody else can cook” he adds.

With FileRights, content owners can remove whatever they want and this raises the question how honest the content owners will be in the filtering process. As Brokep notes:

“Who checks that a copyright claim is correct? Who downloads all those files and checks them out to see if they are what they seem to be? What happens when the right holders start censoring other peoples content as well, maybe out of moral or maybe for a competing company? I’m afraid for how little people care about their own rights. Yes, the peoples rights, not the right holders rights.”

Isohunt’s owner Gary Fung clearly disagreed with this and started throwing mud back at Brokep by saying:

“You are either illiterate and don’t check the frontpage of sites you are pointing fingers at, or you are a communist. Or both. What makes you think you have rights to content you didn’t produce? People’s rights vs. copyright holders’ rights? Please. I will laugh at you when you are marked a terrorist and US armies hunt you down. Not that I like the whole anti-terrorist thing from the US but I digress.”

Justin from Torrentspy told TorrentFreak that he doesn’t understand all the commotion about FileRights.

“I dont believe FileRights is incompatible with what is going on now,” he says. “TorrentSpy processes DMCA requests and always has, so do Isohunt, Mininova, and many others. The idea for FileRights actually came from a file hash filtering system that TorrentSpy has been using for over two years. Many companies, such as Microsoft, the RIAA, the IFPI, Universal, and the Business Software Alliance have been using the system to remove their content from TorrentSpy for years already. FileRights just makes the process less time consuming for content owners and BitTorrent site admins.”

A noticeably upset Brokep, who was never a fan of either Torrentspy or Isohunt, turns it up a notch on his blog, and asks Torrentspy owner Justin:

“Or will you also in the next step of the system demand logs of the users that downloaded the content, so when a right holder puts up a torrent or hash he automatically gets the IPs that downloaded the same file? Maybe a good next step Justin”

It is clear that the admins clearly differ in their vision of the DMCA takedown process. The Pirate Bay chooses not to respond to DMCA takedown requests at all, while Torrentspy and Isohunt’s FileRights system makes it easier for content owners to take down infringing .torrent files.

So what do you think? Is the filtering system that Isohunt and Torrentspy use a necessary evil?
http://torrentfreak.com/filtering-to...ntspy-isohunt/





Get into Private BitTorrent Sites with Tracker Checker 2
enigmax

Constantly checking private trackers for open signups can be a drawn out task. Some open only briefly and by the time one gets a tipoff, all the places have gone and registrations are closed again. Tracker Checker 2 automatically checks chosen sites for open signups, getting you into those elusive private sites with a minimum of effort.

The Tracker Checker 2 installer is small at just under 130kb. Needing the .NET framework to run, it installs pain-free in seconds and with a click of the shortcut, it’s ready to find those elusive no-invitation-required open signups on private trackers.

The software has a clear interface and comes with around 20 trackers pre-configured and ready to check. It can sit in your system tray silently checking for open signups and alerting you when they become available.

By simply clicking on the site in the list you wish to signup to, followed by the globe icon, an instance of your web browser is launched and you are taken directly to the new account page and you are ready to signup.

Although it’ll take some time to exhaust the content available on the pre-configured trackers, it’s inevitable that at some point you’ll wish to add new sites for the software to check and fortunately, this is fairly straightforward. Clicking the ‘Add’ icon brings up a box where one can enter various details;

Simply enter the tracker name for reference, followed by the site’s signup URL (commonly http://www.sitename.com/signup.php) followed by a text search string. On certain sites where one signs up to a forum, ‘Desired Username’ appears on the page when signups are open, so entering this into the ‘Find String’ box produces the desired results when the ‘Positive’ match button is clicked.

If for example the signup page currently says “signups are closed’, by entering this same text into the ‘Find String’ section but selecting ‘Negative’ match, you will notified when this text does not appear - i.e when signups are open.

By using a modified trackers.xml such as that created by PyroniC, the number of trackers that can be checked is increased to around 70.

The public preview of Tracker Checker 2 is available for free download from stamcar.com. Don’t forget to leave some feedback for the author.
http://torrentfreak.com/get-into-pri...ker-checker-2/





µTorrent Mobile: A First Look
Thomas Mennecke

Remotely controlling a P2P application via the web is nothing new. eMule popularized the feature, while µTorrent and Azureus introduced the concept to the BitTorrent community. This technology allows the individual to log into their home machine from a remote location and, among many other things, add torrents, pause a download, or discontinue a download.

Sounds great if there's an internet cafe or lap top nearby. Unfortunately, these remote interfaces don't have the capacity to support mobile devices such as cell phones or PDAs - at least on the devices we've tested the concept on. But that's all changed. A new project called "µTorrent mUI" aims to bring mobile user interface compatibility to the µTorrent client. And it appears Sindre Sorhus, the developer behind the project, has done just that.

To review the latest iteration into the BitTorrent foray, we armed ourselves with a Palm TX PDA, the latest version of µTorrent, and a torrent of a “really.great.creative-commons.movie.avi”.

After downloading and setting up our creative-commons torrent, the first thing we do is head over to http://www.utorrentmui.com on the Palm TX. The Palm TX PDA is basically a small computer, which runs version 5.0 of the Palm Operating System. The Palm Treo and a few other major mobile phones use a similar operating system. Plam TX's default browser, known as "Blazer" is an adequate web surfing mechanism, and hopefully should be able to support µTorrent mUI.

Great success! We’re greeted by a basic login screen. Providing you’ve already set up your µTorrent to accommodate remote web access, simply enter your remote computer’s IP address, the correct username and password, then hit “Log In”.

BAM! There’s our really.great.creative-commons.movie torrent! The initial screen gives us a few options, especially useful if we have more than one torrent going. All available options are self explanatory. The “settings” link allows us to throttle our upload/download bandwidth. Now let’s click on the torrent link.

Oh Snap! From this link, we can check a lot of vital information on our torrent download, such as its size, ETA, and tracker information. We also have a few options at our disposal. Two other options that didn’t quite make the screen shot are “Remove” and “Delete”.

The bottom line

µTorrent mUI has all the basic features you could want in order to remotely control your µTorrent application. You can stop, start, pause, and resume a torrent, while also throttling bandwidth. The one big thing that µTorrent mUI lacks is the ability to add torrents, which the official µTorrent web interface does nicely. However Sindre informs us that this is a feature he greatly desires, and that he's actively working on for future versions. The complexity of doing so over a mobile device remains challenging, as no current BitTorrent trackers support such portables. However if Sindre was able to overcome the challenge of reverse engineering the undocumented µTorrent web API (Application Programming Interface), incorporating the ability to add torrent files shouldn’t be too far behind.

µTorrent mUI is a fascinating step forward in bringing file-sharing technology to mobile devices. It’s useful in that it allows the individual to remotely monitor a download, or kill a download that’s become idle. Sindre told Slyck.com that when the Mac µTorrent is eventually released, he’ll certainly make his application compatible.

µTorrent mUI is a work in progress, however should not be underestimated. The developer behind the project has demonstrated a degree of talent, and it’s likely the file-sharing community will be expecting great things. So for now, enjoy µTorrent mUI for what it is. If you’re out and about, and absolutely must know the status of your really.great.creative-commons.movie.avi.torrent, uTorrent mUI delivers the goods. And best of all, it's open source.
http://www.slyck.com/story1551_Torre...e_A_First_Look





uTorrent Relaunched as Official BitTorrent Client
Ernesto

BitTorrent Inc launched their rebranded version of uTorrent as BitTorrent 6.0. The good news is that uTorrent and its community will not be replaced. Not now, and not in the future.

The rebranded version of uTorrent looks just like the original uTorrent client, however, it now includes BitTorrent DNA. Another significant change is the absence of the built in search for sites like Mininova, Torrentz and The PirateBay. However, you can easily add those under options –> preferences.

Last year, when BitTorrent Inc acquired uTorrent, it was said that the client will continue to have its own website and community for a while. Many expected that the launch of the rebranded uTorrent client as the mainline BitTorrent client would be the end of uTorrent, but this is not the case. When we asked BitTorrent Inc CEO Ashwin Navin about the future of uTorrent and the uTorrent community he told us:

“utorrent.com and uTorrent community will exist indefinitely. It’s vibrant and growing, and we value the feedback provided in the forums a lot. It is not our plan to fold utorrent.com into bittorrent.com, but foster growth for both independently.”

Great news, but some (former) uTorrent users will always have their doubts. Ever since BitTorrent Inc took over, a lot of rumors started popping up, and uTorrent was even banned from several private BitTorrent trackers.

Most people were afraid that uTorrent was sending data to the MPAA or other anti-piracy outfits. These rumors were fueled by the fact that one of the uTorrent Beta releases was marked as a trojan by some anti-virus applications. Here at TorrentFreak we looked into the suspicious behavior reported by some of our readers, but up until now we did not find any hard evidence to support these claims. With Wireshark we tried to replicate the findings reported by some users several times, both on virtual machines and in use systems, but we didn’t find anything suspicious.

But I’m sure this won’t comfort the really paranoid people among us.
http://torrentfreak.com/utorrent-rel...orrent-client/





DRM-Free MP3s Coming to Yahoo, URGE
BetaNews Staff

MusicNet, the company that powers the song libraries of Yahoo! Music Unlimited and URGE, said Tuesday that it will make available over 1 million tracks in MP3 format without digital rights management. The move follows Apple offering DRM-free songs in its own AAC format through iTunes.

Like Apple, MusicNet will offer the song catalog of EMI -- the only top record label currently willing to drop DRM requirements -- as well as several leading independent labels including Righteous Babe, Nettwerk, Madacy, Nitro, and others. By using the MP3 format as opposed to Windows Media, MusicNet will enable customers of Yahoo and URGE to transfer their songs to practically any portable media player they choose. Pricing and a specific launch date for the MP3 option has not been set, but MusicNet said it will happen this quarter.
http://www.betanews.com/article/DRMF...RGE/1185300009





Legal and free

Labrador Summer Sampler 2007
WebBlurb

Well, putting the massive 68-track Labrador Summer Sampler 2007 on our server didn't work quite as smoothly as we'd hoped. I don't know if we overestimated our server or underestimated the need of good music this summer. Either way, it's been taken care of now.

> Download Labrador Summer Sampler 2007 from Piratebay here!

http://www.labrador.se/news.php3?lab=070719.080323





Pardon Me While I Boot Up My Stereo
Michel Marriott

Twenty-five years ago, the concept of personal computer as personal music box seemed almost as radical as a DeLorean DMC-12 automobile equipped with a flux capacitor. But times change. Technology and how we use it appear to change even faster.

The Consumer Electronics Association, an electronics industry trade group based in Arlington, Va., recently found that 72 percent of adults with Internet access are listening to their computers, making music the most universal type of content on PCs today.

In fact, some 77 percent of home PC audio listeners spend an average of nine hours a week listening to music on their computers, according to the CEA study, Computer-Sourced Audio Consumption in the Home.

Not surprising, most, 79 percent of listeners, connect a pair of speakers to their computers. But mostly to listen at their desks. Only 9 percent connected the computer to their home audio systems.

Mainly, people are using their computers as very expensive CD players. The study found that the physical media, like CDs, remain the primary source of content among home PC audio users, with digital files and downloaded audio next. The study found that audio and video subscription services remain “rare forms of computer-sourced content.”

And while 86 percent of home PC audio listeners said they were satisfied with their computer as music maker, more than one-third of the listeners said, in the study that was conducted in April and released this summer, that they would like better sound quality from their computers.

Duh.
http://bits.blogs.nytimes.com/2007/0...-up-my-stereo/





BBC iPlayer Beta Arrives; 10,000 People Complain to Gordon Brown
Nate Anderson

UK residents: the iPlayer beta is here. As it announced last month, the BBC launched a large-scale beta of its iPlayer catch-up software today. For such a compelling product, the iPlayer has certainly been dogged by its share of controversy; 12,000 people have already signed an e-petition to 10 Downing Street over the iPlayer's tie-in with Windows.

And it's not even tied to all versions of Windows. It only works, in fact, with Windows XP, leaving our own Peter Bright to punch the wall in impotent rage after making the switch to Vista some time ago. As for Linux and the Mac, both are right out—although the BBC says that a Mac-compatible version is coming this fall.

The BBC has been trying for months to mend fences over the public perception that it is endorsing Windows by meeting with open-source advocates and promising to rollout cross-platform versions of the software as soon as possible.

Those who do have XP can sign up for the beta and hope to receive an invite in the next several days. Invitations are limited, but the BBC will gradually expand the numbers over the next few months until the official launch later this year. Television shows can be downloaded freely up to seven days after they originally air, and can be stored for up to a month. Once a user begins to watch a program, he or she has seven days to finish watching. When the time period is up, DRM ensures that the programs go poof in order to protect future revenue streams for the shows' rights-holders.

Channel 4 already runs a similar service called 4oD (which also works only on XP) that allows users to catch-up on shows from the last seven days or pay to access older material from the archives.
http://arstechnica.com/news.ars/post...don-brown.html





China Breaks up $500 Million Piracy Ring

Chinese authorities and the FBI have shut down a syndicate thought to have counterfeited more than $2 billion worth of software
Jonathan Richards

Pirated software worth more than $500 million (£242 million) has been seized by authorities in China as part of a joint operation run by Chinese police and the FBI.

The syndicates targeted by the raids in the southern Chinese province of Guangdong are believed to have distributed more than $2 billion (£968 million) worth of counterfeit software to countries around the world, including the UK.

Chinese police arrested 25 people and shut down six manufacturing and retail facilities as part of the operation, which was described by officials in China as "an unprecedented co-operative effort" with the FBI.

More than 290,000 counterfeit software CDs were seized by the Chinese Public Security Bureau (PSB), including 47,000 which contained fake Microsoft products, such as the Windows Vista operating system and the Office suite.

Police were able to trace counterfeit software sold in 27 countries – including the US, Egypt, and Germany – to the syndicates using sophisticated forensic techniques, and by working with suppliers who had unwittingly bought fakes.

The investigation had been running for two years, with the arrests all coming in the past two weeks, authorities told a legal conference in Shenzen, southern China.

"The co-operation between the US and China is an important development, but we still have a long way to go," Steven Hendershot, the FBI's legal attache in Beijing, said.

Brad Smith, general counsel at Microsoft, said: "This case represents a milestone in the fight against software piracy, [with] governments, law enforcement agencies and private companies working together with customers and software resellers to break up a massive international counterfeiting ring."

China has long been targeted by American companies across a range of industries, including music, film and fashion, as a source of intellectual property violations.

As many as a third of UK businesses were unaware they were running counterfeit software in their organisation, Microsoft said.

Last year, piracy cost the software industry $40 billion worldwide, according to the Business Software Allliance.
http://technology.timesonline.co.uk/...cle2132310.ece





China Moves to Refurbish a Damaged Global Image
David Barboza

After years of being accused by Western nations of making only token gestures to fight fake goods and months of complaints about the safety of its exports, China is taking extraordinary steps to change its image.

Last week, Beijing unveiled new controls aimed at fighting counterfeit drugs and substandard exports. High-ranking officials and regulators vowed to strengthen China’s food safety system, tighten controls over chemical use by large seafood and meat producers, and create a system that holds producers more accountable for selling unsafe products.

The government also announced that it had broken up a series of criminal rings that operated huge manufacturing centers, producing goods as varied as pirated Microsoft software, fake Viagra and imitation Crest toothpaste.

Authorities here have also reached out to Ogilvy Public Relations, an international consultancy that advises on crisis management.

“This is a very concerted effort to show they are doing something,” said Russell Leigh Moses, a longtime political analyst based in Beijing. “They are using work groups, issuing directives and closing factories. They are rolling out the artillery.”

Spurred on by a sense of economic realpolitik, Beijing has grown particularly fearful that mounting international pressure could lead to sanctions or embargoes, and thereby hinder China’s booming economy.

Whether promising to overhaul China’s regulatory regime and stepping up enforcement will be enough to tame what some view as the Wild, Wild East of capitalism is unclear, analysts say, because some of the problems are so deeply rooted.

“There’s no quick fix,” says Henk Bekedam, the World Health Organization’s top representative in China. “China has perhaps been cutting some corners because the focus has been on growth. But they have 5,000 companies that produce medicine. That’s far too many.

“The government has a limited ability to enforce things,” he said. “They need to start with simple things: reduce the number of people you monitor.”

Still, even critics of China’s policies have been impressed with the catalog of recently announced changes.

The bold actions, experts say, are partly aimed at easing political pressure from the United States and the European Union, where regulators and politicians are pressing for assurances about the quality and safety of goods made here after a string of recalls involving goods like tainted pet food and toothpaste, defective tires and dangerous toys.

In Washington this month, President Bush created a panel of cabinet officials to make recommendations aimed at minimizing the dangers from imported foods or other products. The announcement coincided with Congressional hearings on food safety.

And in recent weeks, several Democrats in Congress have pressed for tougher measures against China, including trade sanctions and new money for American regulators to guard against unsafe goods entering the country, particularly from China.

Those issues will lead the agenda for the United States Treasury secretary, Henry M. Paulson Jr., as he arrives for talks with Chinese officials this weekend.

Europe is also concerned. Top European Union officials are planning to meet in Beijing next month to discuss food safety and other issues.

And on Wednesday, the head of the European Union’s consumer protection agency, Meglena Kuneva, pressed Chinese regulators to improve their standards during a tour of a government testing lab and a Chinese toy factory near the city of Nanjing.

Ms. Kuneva said that she was hopeful China would make progress, but she added that if its products continued to be a problem, the European Union would block market access.

“Toys like this can be in the hands of children, so do a good job,” Ms. Kuneva told a young inspector. “The good name of this country is in your hands.”

Many experts doubt whether China can follow through on its promises — some of which have been made before. And Chinese officials have not conceded that all the problems lie here. Regulators have repeatedly accused the international news media of exaggerating the number of problem Chinese goods.

Some Chinese businessmen say protectionists in the West are seizing on isolated cases to drum up support for trade sanctions, at a time when China is amassing a huge trade surplus.

China has also argued that the quality of the food it exports is no worse than the quality of American food entering China. After the United States Food and Drug Administration moved last month to block five types of Chinese seafood from entering the United States market, China responded by banning some imports of American frozen poultry and pork, insisting they were tainted by antibiotic residues.

Still, many experts say China has also become more candid about the challenges facing the country.

The government recently acknowledged that 20 percent of its consumer goods and 14 percent of the truck tires made here failed safety inspections.

And, most dramatically, just two weeks ago, China executed the former head of the State Food and Drug Administration, Zheng Xiaoyu, for accepting bribes and failing to police the marketplace. Days after he was executed, a top drug agency official admitted that the obstacles to repairing the regulatory systems were daunting.

The admissions were a surprising about-face for China, which has been slow to accept blame for shipping tainted products overseas.

But analysts say that as the evidence and bad news began to mount this year, China was forced to respond in a less adversarial way, particularly because the country’s booming economy is built on foreign investment and trade.

Recently, the government has even sought crisis management advice from Western consultants.

“They have not historically been advice takers,” said Scott Kronick, president of Ogilvy Public Relations Worldwide China, part of the WPP Group. “But they are reaching out in a genuine way to seek advice. I think they recognize everything doesn’t have to be rosy.”

Since then, officials from various regulatory agencies and ministries have held news conferences to announce new regulations or to brief the news media on successful crackdowns.

Last week, China’s quality inspectors promised to improve quarterly reports to the European Union about consumer product safety. And on Thursday, the government said it planned to offer large rewards to citizens who report on illegal practices in the food industry.

Many experts say the problem in China is not oversight but enforcement.

“The issue is not whether Chinese businesses are regulated; they are,” says Yasheng Huang, an associate professor at the Sloan School of Management at the Massachusetts Institute of Technology. “The issue is that the regulators themselves are unable to be impartial in the enforcement of the laws. Those laws are meaningless in a system that does not even pretend to have judicial independence, media freedom and legislative oversight.”

Some say regulators are susceptible to corruption and that local inspectors can easily be bought off or persuaded that cracking down on local companies hurts economic development and risks jobs.

That may explain why after years of promising to tackle piracy and counterfeiting, the practice continues to flourish in China, often in the open.

Last week, the United States’ Federal Bureau of Investigation and China’s Ministry of Public Security said they had broken up one of the biggest software piracy rings ever, arresting 25 people and closing six manufacturing facilities in China.

They also seized $500 million worth of pirated Microsoft and Symantec software. A day later, the government here said it had seized a ton of fake Viagra pills and closed counterfeit drug factories that produced Tamiflu, anti-malaria drugs and other products.

The seizures may be a sign of progress, but they are also an indication of how widespread the problem has been for China, experts say.

“The problem is these are campaigns and they tend to be turned off at some point,” says Mr. Moses, the analyst in Beijing.
http://www.nytimes.com/2007/07/29/wo...safety.html?hp





Open Library Goes Online with Public Domain Book Collection
Nate Anderson

After several years of scanning and archiving, the Internet Archive and the Open Content Alliance this week unveiled the Open Library, their attempt at bringing public domain books to the masses.

The Internet Archive has hosted texts for quite some time, but the Open Library makes fully-searchable, high-quality scans of books available, along with downloadable PDFs. It offers an experience designed to match paper: there's even a page-flipping animation as readers move forward and backward through the book.

Ben Vershbow of the Institute for the Future of the Book says that when it comes to presentation, "they already have Google beat, even with recent upgrades to the [Google Book Search] system including a plain text viewing option." Magnification isn't yet in place but is coming soon, apparently in time for the "official" launch later this year. The Open Library does have a neat trick up its sleeve: it allows the on-demand printing of any book through Lulu.com, allowing anyone in the world to order a printed copy of long out-of-print works.

The Open Content Alliance provided plenty of support for the project, drawing on the resources of companies like Yahoo, Adobe, MSN, and HP Labs. As Vershbow's comment above indicated, the new project looks like a direct competitor to many of the things that Google wants to do with Google Book Search, although the Open Library takes a different approach to handling copyrighted texts. Only public domain books will be scanned, and other publishers can opt-in to the system at some point; Google, by contrast, scans everything but only displays tiny snippets of information from copyrighted texts.

But the Open Library goes beyond Google Book Search in a couple of clever ways. For one, it will integrate with Librivox, a site that allows users to contribue home audio recordings of public domain books. Open Library users can already click the "Listen" button to hear Henry James' "An International Episode" in full and for free (and read surprisingly well).

The Internet Archive also partnered months ago with researchers at Carnegie Mellon to use their reCAPTCHA system to correct the results of optical character recognition. In essence, millions of users across the Internet are helping to make texts behind the Open Library more accurate even as they prove their own humanity to various blog comment systems.

The Open Library site is limited right now, allowing only for access to limited books and having no way to return to the main page (access to many other books is possible through the Internet Archive). Although the project is not nearly as developed as Google's, it's good to see some competition develop; Hopefully, the two projects will spur one another on to create a pair of truly compelling resources for readers.

Do we really need multiple projects like this, or would everyone be better off by pooling resources and building a single, massive database? The Internet Archive's Brewster Kahle recognizes that this question will arise, and he tackles it head-on in his vision statement for the Open Library. "Won't some of the big commercial digitization projects deliver this future?" he asks. "They are part of it, but if we go no further, we may have an expanded bookstore, or a single means of organizing the materials, but we may not be building on the open tradition of a library."
http://arstechnica.com/news.ars/post...-business.html





‘Farnsworth Invention’ Takes Shape
Campbell Robertson

Dates, cast and theater have been set for Aaron Sorkin’s new play, “The Farnsworth Invention,” about the legal battle over the invention of the television.

Hank Azaria will play David Sarnoff, the head of RCA, and Jimmi Simpson (“The Rainmaker”) will portray the inventor Philo T. Farnsworth. Des McAnuff will direct the production, opening on Broadway at the Music Box Theater on Nov. 14, with previews beginning on Oct. 15.
http://www.nytimes.com/2007/07/26/th...RTHIN_BRF.html





Dancing Toddler Video Yanked from Website Triggers Lawsuit

A mother is suing Universal Music Publishing Group for insisting a video of her toddler dancing to music by pop star Prince be yanked from YouTube on copyright violation grounds.

Electronic Frontier Foundation lawyers said they filed a lawsuit Tuesday asking a San Francisco federal court to protect the woman's fair use and free speech rights.

"Universal's takedown notice doesn't even pass the laugh test," said EFF attorney Corynne McSherry.

"Copyright holders should be held accountable when they undermine non-infringing, fair uses like this video."

The 29-second video shows Stephanie Lenz's young son wearing a red jumper and holding a toy stroller for balance as he bounces in place to Prince's song "Let's Go Crazy."

Lenz uploaded the home video to YouTube in February but was informed last month that it was deleted from the website after Universal complained use of the music violates the company's copyright.

"I was really surprised and angry when I learned my video was removed," said Lenz. "Universal should not be using legal threats to try to prevent people from sharing home videos of their kids with family and friends."

EFF lawyers contend Universal is abusing a Digital Millennium Copyright Act provision that calls on websites to remove copyrighted material at the behest of owners.

"Copyright abuse can shut down online artists, political analysts, or -- as in this case -- ordinary families who simply want to share snippets of their day-to-day lives," said EFF attorney Marcia Hofmann.

Lenz's "Let's Go Crazy #1" video has been re-posted on YouTube.

Universal did not return an AFP request for comment regarding the lawsuit.
http://www.physorg.com/news104564632.html





Google to Filter Copyright Videos by September
Greg Sandoval

YouTube will launch a system in September designed to prevent pirated material from going up on the site, a Google lawyer said in court on Friday.

Google, which acquired YouTube in October, plans to generate a library of digital video fingerprints that would be used by a computer system to screen clips being uploaded to YouTube, said Philip Beck, one of the attorneys representing Google and YouTube. Beck added that the screening process would take only a few minutes to determine whether a clip is copyright material.

Google, Viacom and the class of copyright holders that have filed suit against Google and YouTube within the past year, were in U.S. District Court for the Southern District of New York, for a scheduling hearing.

Beck's statement is significant because it would appear to be the first time that anyone from Google has set a firm launch date for a filtering-system roll out. The company has frustrated numerous media executives by promising to produce better copyright protections for YouTube but not delivering. Critics are quick to note that many of YouTube's competitors already screen content.

What may not go over well in Hollywood is that Google appeared to hedge once again when asked to respond to Beck's statement.

"We hope to have the testing completed and technology available by sometime in the Fall," said a Google spokesman in an e-mail. "But this is one of the most technologically complicated tasks that we have ever undertaken, and as always with cutting-edge technologies, it's difficult to forecast specific launch dates."

Louis Solomon, an attorney with Proskauer Rose, who along lawyers from the law firm Bernstein Litowitz, were appointed interim class counsel at the hearing. Solomon indicated that Google's filtering system would have little impact on the massive damages being claimed for past infringement.

In the class action suit filed in May by a group that included several European sports leagues, the plaintiffs have asked for billions of dollars in damages.

"If in fact Google puts this (system) in place, it is obviously way too late," Solomon said. "But we encourage Google to come forward and do what other companies have already done and treat all the content providers fairly. Not just the favorite few who have agreed to share advertising revenue with YouTube."

During the court proceeding, lawyers from both sides estimated that pre-trial discovery could take more than a year. That means there's a chance that YouTube's copyright issues may not be resolved until late next year.
http://news.com.com/8301-10784_3-9751232-7.html





eBay Can Continue Using ‘Buy It Now‘
2007/7

A federal judge Friday denied a request from a small Virginia company to stop the online auction powerhouse eBay Inc. from using a feature that allows shoppers to purchase items at a fixed price.

Last year, the U.S. Supreme Court ruled that although eBay infringed upon MercExchange‘s patent for the service, it was up to the lower court to decide whether eBay had to stop using it.

A federal jury found in 2003 that eBay had infringed on Great Falls-based MercExchange‘s patent and awarded the company $35 million. The amount later was reduced to $25 million.

"It was sort of good news, bad news for both sides," Stillman said. "I‘m sure eBay is relieved that they‘re not going to be enjoined, but on the other hand (Friedman) made it quite clear that they‘re going to have to pay for that right."

Friedman denied eBay‘s request to stay proceedings on the "Buy It Now" patent because the infringement suit already has been tried by a jury and a final verdict and damage award was affirmed by the federal circuit.

In the closely watched case, the high court ruled that judges have flexibility in deciding whether to issue court orders barring continued use of a technology after juries find a patent violation. The decision threw out a ruling by a federal appeals court that said injunctions should be automatic unless exceptional circumstances apply.
http://www.leadingthecharge.com/View...38466&source=2





The Net Gets Real on Copyrights

The Harry Potter ending is the latest example of how Web sites are more willing to take down copyrighted material and identify infringers
Catherine Holahan

Everyone knows it's hard to keep a secret when it comes to Harry Potter plotlines. So it's no wonder that copies of the highly anticipated last installment of the book series could be found floating around the Web before its July 21 release date. As is well known by most Potter fans, pictures of the ending were posted on sites such as News Corp.'s photo-sharing site Photobucket and Gaia Online, an Internet community site for teens, robbing incautious Web surfers of the surprise ending (see BusinessWeek.com, 7/18/07, "So, Does Harry Potter Live?").

What was a surprise, however, is how quickly many Web sites appeared to respond to requests to take down copyrighted material and hand over information regarding alleged copyright infringers. On July 16, Scholastic, which publishes the Harry Potter books in the U.S., filed a subpoena for information about the identity of a user who posted copies of the book on Gaiaonline.com. The company immediately supplied the information, took down the infringing material, and banned the user from the site for two weeks. "Gaia Online's terms of service prohibit the use of Gaia Online for any illegal purpose and requires all users to comply with its terms of service," the company said in a statement, explaining its swift compliance.

Court documents filed by Scholastic also say that copies of the book appeared to be on Photobucket. News Corp.'s Fox Interactive Media, which operates MySpace.com and Photobucket, declined comment, but the material is no longer on the site.

Changing IP Attitudes

Not long ago, such thorough compliance from sites that thrive on user-generated content might have been unthinkable. While many sites did immediately remove material in response to takedown notices, as is required by law, they did little to keep the same material from being uploaded moments later. Many sites have typically been adamant about ratting out users.

But attitudes toward copyright and intellectual property have changed. One reason is that the industry has matured. Sites that depend on users for content are no longer simply trying to prove their value by grabbing tons of Web traffic in any way possible. They are now trying to prove their mettle as legitimate businesses that can make money by working in concert with content providers and playing ball with marketers that are understandably wary of paying for ad space on sites they fear might get sued or, worse, shut down. "There are a lot of U.S.-based venture-backed businesses that are trying to be compliant," says Eric Garland, chief executive officer of BigChampagne, a technology and market research company that tracks illegal downloading of copyrighted material.

In some cases, the new emphasis on intellectual property has come as the sites have been purchased, or evaluated for acquisition, by large public companies such as News Corp. and Google, which respectively acquired social networking site MySpace and video-sharing site YouTube. Large companies, in general, have more to lose from a lawsuit and more respect to squander should the public perceive them as disrespectful of intellectual property (see BusinessWeek.com, 10/10/06, "YouTube's New Deep Pockets,"). "Sites that spring to mind like MySpace and YouTube are doing what they can to quickly remove infringing content from their sites," says Garland.

Large Players Helping to Stem Abuses

Make no mistake: Copyrighted material is still ending up on user-generated sites, even those owned by big companies. In March, Viacom (VIA) sued Google for the frequent appearance of its material on YouTube, despite multiple takedown requests (see BusinessWeek.com, 3/14/07, "Viacom's Suit Won't Snuff Out YouTube,").

Yet by and large, companies are doing far more to stem abuse, and allowing nowhere near the level of infringement in years past, piracy experts say. Google has worked with content identification companies such as Audible Magic to better keep copyrighted material from its site. "We are beginning tests on an automated system to identify and match specific videos," YouTube co-founder Steve Chen wrote in a June blog post. "We are working with some of the major media companies to test what we have developed."

In response to a January subpoena, Google and community site LiveDigital cooperated with News Corp.'s Fox network concerning the illegal leak of unaired episodes of the hit television show 24, as well as several episodes of The Simpsons (see BusinessWeek.com, 1/26/07, "Google and YouTube: A Catch-22,"). The information they gave on the alleged source of the leak led to a criminal complaint against a Chicago man by the Federal Bureau of Investigation. If convicted, the man could serve up to three years in jail.

Foreign Players Not as Respectful

The Justice Dept. has won more than 100 felony convictions for copyright infringement in the U.S. in the past five years, thanks in part to large-scale FBI operations and the increased cooperation of Web sites that turn over information on users who post illegal material. Last month, for example, it won a conviction against a Los Angeles man who uploaded the movie Walk the Line on the Internet before it was available for home viewing.

Despite evidence that content creators' hard-fought efforts to get U.S. businesses to respect intellectual property are working, copyright violations are still rampant on the Web. The reason, says Garland, is that there are still many non-U.S. businesses that don't have the same respect for intellectual property and many more technologies that allow people to share files but are not part of any business entity that can be held accountable. In fact, the amount of pirated material on the Web is growing, says Garland. For example, from June, 2006, to June, 2007, the number of users at any given moment on just one prominent peer-to-peer network that primarily handles illegally uploaded content grew 186%, to 1,246,705.

So what are content creators to do when there's no large company to sue? Garland says high-profile suits are a deterrent if done correctly, but they're unlikely to stem the problem. Another suggested tactic is to demand the Internet service providers to watch what their users do and terminate accounts that upload pirated material. However, such a move is unlikely, given that ISPs are reluctant to take steps that would be seen as an intrusion on their customers' privacy.

Once content is in the public domain, Garland says there is little that content creators can do to keep it from being uploaded to the Web. Their best hope may be to try to track it and make money from it by appending advertising. However, companies can do something about leaks such as the one that led to rampant online spoilers of the Harry Potter ending: Keep copies to a minimum and only give them to trusted executives with locked briefcases. Adds Garland: "Protect it the old fashioned way."
http://www.businessweek.com/technolo...eek+exclusives





Harry Potter Breaks Sales Records
AP

LONDON -- Harry Potter has cast a spell on British book buyers, who purchased more than 2.6 million copies of the boy wizard's final adventure in 24 hours, an industry data service said Monday.

Nielsen BookScan said 2,652,656 copies of "Harry Potter and the Deathly Hallows" were sold in Britain in the 24 hours after it went on sale in England at midnight London time (7:01 p.m. EDT Friday).

The company said the figure was provisional; full and final figures were due to be released Tuesday.

The figure breaks the previous record of just over 2 million copies held by the previous Potter volume, "Harry Potter and the Half-Blood Prince." It includes sales from bookstores, supermarkets other retailers and Internet sites, but excludes sales to libraries, schools and institutions.

"Deathly Hallows," the seventh and final volume of J.K. Rowling's all-conquering fantasy series, sold 8.3 million copies in its first 24 hours on sale in the United States, according to publisher Scholastic Inc.

The book was released around the world Saturday in a carefully orchestrated operation that saw midnight bookstore openings and long lines of Potter-maniacs. Its initial print run was 12 million in the United States alone.

The series has sold more than 325 million worldwide.
http://www.courant.com/sns-ap-harry-...,5667022.story





Potter’s Popularity Holds Up in First-Day Sales
Motoko Rich

In its first 24 hours on sale, “Harry Potter and the Deathly Hallows,” the seventh and final installment in the wildly popular series by J. K. Rowling that officially went on sale at 12:01 a.m. Saturday, sold 8.3 million copies in the United States, according to Scholastic Inc., the publisher.

That exceeded the 6.9 million copies that “Harry Potter and the Half-Blood Prince,” the sixth in the series, sold in its first 24 hours on sale two years ago.

The figures seemed to show that numerous leaks before the official release, including photos of every page of the book that circulated on Internet file-sharing services last week, had failed to dent the enormous pent-up demand for the book.

On Friday night, booksellers and fans threw parties to herald the book’s release, and at many outlets in New York and elsewhere, lines stretched around the block with shoppers waiting to be among the first to buy the book shortly after midnight.

“The excitement, anticipation, and just plain hysteria that came over the entire country this weekend was a bit like the Beatles’ first visit to the U.S.,” Lisa Holton, president of Scholastic’s trade and book fairs division, said in a statement.

The Arthur A. Levine imprint at Scholastic printed 12 million copies of “Deathly Hallows.” That brings the number of “Harry Potter” books in print in the United States to 133.5 million.

Before the publication of “Deathly Hallows,” the six other books in the series had sold about 325 million copies worldwide. The series is published by Bloomsbury in Britain.

Many of the books were sold at a substantial discount. Barnes & Noble, for example, was selling “Deathly Hallows” at 40 percent off the $34.99 cover price, or $20.99. Amazon.com was selling it for $17.99. The estimate of first-day sales indicates that at an average selling price of about $20, Americans spent $166 million for the book in one day. Many booksellers will make only slim profits on the book’s sales.

Separately, the Borders Group announced that it had sold about 1.2 million copies of the book globally in its more than 1,200 Borders and Waldenbooks stores on Saturday. Most of those stores held midnight parties, and Borders estimated that about 800,000 people attended them worldwide. The sales figure exceeded the 850,000 copies of “Half-Blood Prince” that Borders sold on the first day of its sales two years ago.
http://www.nytimes.com/2007/07/23/books/23potter.html





HPDH the Fastest-Selling Book of All Time
Matt

Bloomsbury, the UK publisher of the Harry Potter books, sold 2.7 million copies of Harry Potter and the Deathly Hallows in the first 24 hours that the book was on sale. Coupled with Scholastic's 8.3 million, that's 11 million copies of HPDH sold in just one day, making it the fastest-selling book of all time (Harry Potter and the Half-Blood Prince sold 9 million).
http://www.harrypotterfanzone.com/fu...ws.php?id=2037





Post-Potter Scholastic May Face Shareholder Exodus
Gillian Wee and Katie Hoffmann

After the final adventures of Harry, Hermione and Ron, Scholastic Corp. may face an exodus of shareholders if the company doesn't consider selling itself.

Investors including Mark Boyar of Boyar Asset Management Inc. say the New York-based publisher should be sold because Chief Executive Officer Richard Robinson, who has run Scholastic since 1975, hasn't used the windfall from ``Harry Potter,'' the biggest hit in books in the past decade, to build successful new businesses. Robinson said today he has no intention of selling.

As the seventh title in J.K. Rowling's series about the boy wizard makes its debut tomorrow, shares of Scholastic, the book's U.S. publisher, are trading at 0.66 times annual sales, compared with 1.04 times sales for rival U.S. book publishers. The shares would be worth more than $50 each, or 48 percent above their current price, if the company were to sell itself, Boyar and Stifel Nicolaus & Co. analyst Drew Crum said.

``This is a very, very valuable business, and it would be worth a lot more to a potential buyer,'' said Boyar, president of his New York-based firm, which owned 200,000 Scholastic shares as of March.

Scholastic shares have returned an average of 7.5 percent a year over the past 10 years through June 30, versus 13 percent for the S&P MidCap Index. They fell 41 cents to $33.80 at 4 p.m. New York time in Nasdaq Stock Market trading.

`Too Much Fun'

Robinson, whose father Maurice founded the company in 1920, ``is not a seller,'' Chief Financial Officer Maureen O'Connell said in an interview. Through its ownership of Class A shares, the Robinson family controls four-fifths of Scholastic's board.

``I don't think Dick's going anywhere,'' O'Connell said. ``He's having too much fun right now.''

Scholastic's latest stumble is in its direct-mail business, where subscriber delinquencies are rising. Yesterday, the company reported fourth-quarter profit of $40.4 million, or 93 cents a share, missing analysts' average estimate.

Robinson, 70, said yesterday he has a plan to cut the direct-mail unit's losses by about $20 million this fiscal year or exit the business.

``We have no intention of selling the company, and we don't believe our investors need us to sell the company to realize value,'' Robinson said today in an interview.

Scholastic had already cut its profit forecast in March. A year ago, the company said it would cut expenses by $40 million annually, including reducing promotional costs at its school book-club order program, where revenue growth had slowed.

``This company has a portfolio of assets that when they fix one, it seems like another one falls apart,'' said Cleveland- based Crum, who lowered his rating on Scholastic shares to ``hold'' from ``buy'' on July 16 and doesn't own any.

Higher Value

Scholastic's steady cash streams and opportunities to improve profit margins make the company attractive to private equity firms, Crum said.

Publishers typically sell for 1 to 1 1/2 times revenue, Crum said. ``Clearly, the private equity value of Scholastic is much greater than the public value.''

Crum declined to speculate on potential buyers. He said he doesn't think Robinson is willing to sell.

Scholastic wouldn't fit in as part of another publishing company because it is ``a real hybrid,'' said Jim Milliot, business and news director at Publishers Weekly in New York. ``They do a lot of publishing but they're also a really big distributing company.''

``Harry Potter,'' the biggest children's book series ever, has sold more than 325 million copies worldwide since 1997. It holds three slots among the 10 best-selling books in the U.S. since 2001, the year the first movie was released, according to Nielsen Co.

Family Run

Scholastic bought the U.S. rights from London-based Bloomsbury Publishing Plc in 1997. Both companies, among the few publicly held book publishers that remain independent, are family run. Each is faulted by investors for failing to use the revenue from Harry Potter books to develop new franchises.

The series, which has been translated into 63 languages, follows the life of student Harry Potter, a British boy and wizard, who attends the Hogwarts School of Witchcraft and Wizardry. He and his friends, Ron Weasley and Hermione Granger, use their magical powers to fight enemy Lord Voldemort, also known as ``He-Who-Must-Not-Be-Named,'' who killed Harry's parents.

The series brought in $800 million in revenue for Scholastic from the first title's U.S. publication in September 1998 through the fiscal year that ended this May, Crum said. That amounts to 4.7 percent of sales over nine fiscal years.

Crum predicts Scholastic will reap another $225 million this fiscal year, or 9.4 percent of $2.4 billion in sales, and 62 cents a share out of $2.79 in profit.

Sales Growth

``Most people think they can be more profitable,'' Milliot said. ``The CEO needs to get the different operations operating well at the same time.''

Sales at Scholastic rose from $1.06 billion in fiscal 1998 to $2.18 billion in fiscal 2007, an average of 8.4 percent a year, according to Bloomberg data. Without the $800 million Crum says the series contributed, sales would have grown 8.2 percent annually.

Scholastic plans to print a record 12 million copies of the final entry in the series, ``Harry Potter and the Deathly Hallows.''

While sales will decrease over time, Scholastic will still get about $10 million to $15 million annually from ``Harry Potter'' for the next three years, driven by special editions, the publicity of two more movies and paperback copies, Crum said.

Bloomsbury Expansion

Children's publishing provided 53 percent of Scholastic's sales last year. Robinson has expanded elsewhere, with programs that help children read and book fairs. A $200 million share buyback plan, aimed at repurchasing about 14 percent of the stock, boosted the price in June.

Publishing companies typically have lulls following hits, said Kara Cheseby, a Baltimore-based analyst with T. Rowe Price Associates Inc., Scholastic's largest shareholder with 3.84 million shares as of March.

``At times you have big hits and they supplement your business,'' Cheseby said. ``Harry Potter is just one part of the business.''

Finding another hit won't be easy. Scholastic's U.K. counterpart, Bloomsbury, saw 29 percent of its stock value vanish in December after a gamble on celebrity biographies and cookbooks for the Christmas season failed to pay off. The shares have dropped an additional 27 percent year-to-date.

``The future for the company without Harry Potter is looking dark,'' said Henk Potts, an equity strategist at Barclays Wealth in London who helps manage $185 billion. ``Bloomsbury looks set to return to being a small and rather boring publishing company.''

Scholastic faces similar challenges.

``What they should really be doing is putting the company up for sale,'' Boyar said.
http://www.bloomberg.com/apps/news?p...bKs&refer=news





The Once and Future Prince
Jon Pareles

I’VE got lots of money!” Prince exults in “The One U Wanna C,” a come-on from his new album, “Planet Earth” (Columbia). There’s no reason to disbelieve him. With a sponsorship deal here and an exclusive show there, worldwide television appearances and music given away, Prince has remade himself as a 21st-century pop star. As recording companies bemoan a crumbling market, Prince is demonstrating that charisma and the willingness to go out and perform are still bankable. He doesn’t have to go multiplatinum — he’s multiplatform.

Although Prince declined to be interviewed about “Planet Earth,” he has been highly visible lately. His career is heading into its third decade, and he could have long since become a nostalgia act. Instead he figured out early how to do what he wants in a 21st-century music business, and clearly what he wants is to make more music. Despite his flamboyant wardrobe and his fixation on the color purple, his career choices have been savvy ones, especially for someone so compulsively prolific.

Like most pop stars, he goes on major tours to coincide with album releases, which for Prince are frequent. But he also gets out and performs whenever he chooses. Last year he took over a club in Las Vegas and renamed it 3121, after his 2006 album “3121,” which briefly hit No. 1 and spawned multiple conflicting theories about the significance of the number. He started playing there twice a week for 900 people at $125 a ticket. In February he had an audience in the millions as the halftime entertainment for the Super Bowl. He has gone on to play well-publicized shows at the Roosevelt Hotel in Hollywood for a few hundred people paying $3,121 per couple, and another elite show last weekend in East Hampton for about $3,000 per person.

Meanwhile Verizon put Prince in commercials that use “Guitar,” another song from “Planet Earth,” as bait for its V Cast Song ID service, making the song a free download to certain cellphones. On July 7 Prince introduced a perfume, 3121, by performing at Macy’s in Minneapolis.

In Britain he infuriated retailers by agreeing to have a newspaper, The Mail on Sunday, include the complete “Planet Earth” CD in copies on July 15. (The album is due for American release this Tuesday.) Presumably The Mail paid him something in the range of what he could have earned, much more slowly, through album sales. British fans have remunerated him in other ways. On Aug. 1 he starts a string of no fewer than 21 sold-out arena concerts, 20,000 seats each, at the O2 (formerly the Millennium Dome) in London at the relatively low ticket price of £31.21, about $64. The O2 ticket price also includes a copy of the album; Prince did the same thing with his tour for “Musicology” in 2004. Those “Musicology” albums were counted toward the pop charts, which then changed their rules; the “Planet Earth” albums will not be. But fans will have the record.

Prince’s priorities are obvious. The main one is getting his music to an audience, whether it’s purchased or not. “Prince’s only aim is to get music direct to those that want to hear it,” his spokesman said when announcing that The Mail would include the CD. (After the newspaper giveaway was announced, Columbia Records’ corporate parent, Sony Music, chose not to release “Planet Earth” for retail sale in Britain.) Other musicians may think that their best chance at a livelihood is locking away their music — impossible as that is in the digital era — and demanding that fans buy everything they want to hear. But Prince is confident that his listeners will support him, if not through CD sales then at shows or through other deals.

This is how most pop stars operate now: as brand-name corporations taking in revenue streams from publishing, touring, merchandising, advertising, ringtones, fashion, satellite radio gigs or whatever else their advisers can come up with. Rare indeed are holdouts like Bruce Springsteen who simply perform and record. The usual rationale is that hearing a U2 song in an iPod commercial or seeing Shakira’s face on a cellphone billboard will get listeners interested in the albums that these artists release every few years after much painstaking effort.

But Prince is different. His way of working has nothing to do with scarcity. In the studio — he has his own recording complex, Paisley Park near Minneapolis — he is a torrent of new songs, while older, unreleased ones fill the archive he calls the Vault. Prince apparently has to hold himself back to release only one album a year. He’s equally indefatigable in concert. On the road he regularly follows full-tilt shows — singing, playing, dancing, sweating — with jam sessions that stretch into the night. It doesn’t hurt that at 49 he can still act like a sex symbol and that his stage shows are unpredictable.

Through it all he still aims for hit singles. Although he has delved into all sorts of music, his favorite form is clearly the four-minute pop tune full of hooks. But his career choices don’t revolve around squeezing the maximum return out of a few precious songs. They’re about letting the music flow.

Prince gravitated early to the Internet. Even in the days of dial-up he sought to make his music available online, first as a way of ordering albums and then through digital distribution. (He was also ahead of his time with another form of communication: text messaging abbreviations, having long ago traded “you” for “U.”) Where the Internet truism is that information wants to be free, Prince’s corollary is that music wants to be heard.

How much he makes from his various efforts is a closely guarded secret. But he’s not dependent on royalties trickling in from retail album sales after being filtered through major-label accounting procedures. Instead someone — a sponsor, a newspaper, a promoter — pays him upfront, making disc sales less important. Which is not to say that he’s doing badly on that front: “3121” sold about 520,000 copies, according to Nielsen SoundScan, and “Musicology,” with its concert giveaways, was certified multiplatinum.

Prince ended a two-decade contract with Warner Brothers Records in 1996 after a very public falling out with the label. During the mid-1990s he appeared with the word “Slave” painted on his face and said the label was holding back material he wanted to release. For a while he dropped the name Prince — which was under contract to Warner Brothers and Warner/Chappell Music — for an unpronounceable glyph; when the contracts ran out, he was Prince again. And since leaving Warner Brothers he has been independent. He owns his recordings himself, beginning with a three-CD set called “Emancipation” from 1996. He has released albums on his own NPG label and Web site or has licensed them, one by one, for distribution by major labels, presumably letting them compete for each title. Over the past decade he has had albums released through EMI, Arista, Universal and Sony.

The idea behind long-term recording contracts is that a label will invest in building a career. But Prince (in part because of Warner Brothers’ promotion) has been a full-fledged star since the ’80s. So now a label’s main job for him is to get the CDs into stores.

Prince also experimented with having fans subscribe directly to receive his music online, which turned out to be a better idea in theory than in execution. After five years he quietly shut down his NPG Music Club in 2006. Still, his Web site (which is now 3121.com) usually has a rare recording or two for streaming or downloading. Why not? There’s plenty more.

“Planet Earth” is a good but not great Prince album. Unlike “3121,” which built many of its tracks around zinging, programmed electronic sounds, “Planet Earth” sounds largely handmade, even retro. “In this digital age you could just page me,” Prince sings in “Somewhere Here on Earth,” a slow-motion falsetto ballad. “I know it’s the rage but it just don’t engage me like a face-to-face.”

Prince, as usual, is a one-man studio band — drums, keyboards, guitars, vocals — joined here and there by a horn section or a cooing female voice. This time he leans toward rock rather than funk. Serious songs begin and end the album. It starts with “Planet Earth,” an earnest environmental piano anthem with an orchestral buildup, and winds up with the devout “Lion of Judah” and with “Resolution,” an antiwar song. In between, Prince flirts a lot, playing hard-to-get as he rocks through “Guitar” (“I love you baby, but not like I love my guitar”) and promising sensual delights in the upbeat “One U Wanna C” and the slow-grinding “Mr. Goodnight.” There’s also a catchy, nutty song about a model, “Chelsea Rodgers,” who’s both hard-partying and erudite; Prince sings that she knows about how “Rome was chillin’ in Carthage in 33 B.C.E.”

Although Columbia probably thinks otherwise, how the album fares commercially is almost incidental. With or without the CD business, Prince gets to keep making music: in arenas, in clubs, in the studio. Fans buy concert tickets, companies rent his panache, pleasure is shared. It’s a party that can go on a long time.
http://www.nytimes.com/2007/07/22/ar....html?ref=arts





Oops! ...They Did It Again
Jeff Leeds

Barry Weiss, the president of the Zomba Label Group, had been chatting with a guest at his label’s recent party at the Ritual club here when he abruptly cut off conversation and strode toward the dance floor.

“That’s Right,” a song by one of the label’s artists, Ciara, had just begun to play at ear-splitting volume, and Mr. Weiss decided to conduct some impromptu market research.

Reaching for his glasses, he watched the partygoers dance as he stood off to one side of the darkened dance floor. “You can still get a feel” for how people will respond in clubs like this, Mr. Weiss said.

After more than 25 years in the music business, he has come to trust his instincts more than ever. It fell to Mr. Weiss to guide Zomba after the company’s creative mastermind, Clive Calder, sold it to Bertelsmann five years ago for $2.7 billion, cashing out just as the label’s slate of teen pop stars like ’N Sync waned.

Now, amid financial setbacks in the music industry, Zomba is on a hot streak again, with hits from performers like Justin Timberlake, R. Kelly and T-Pain, a rapper-turned-singer whose new CD surpassed Paul McCartney’s last month to enter the Billboard chart at No. 1.

It is quite a turnabout for Mr. Weiss, who was one of a handful of longtime Zomba executives to stay on at the company after 2002, even as critics crowed that the label would never again match its earlier success.

“We knew what people were thinking,” he said in a rare interview recently. “We weren’t like, ‘Oh, my God! What’s going to happen here?’ We were too busy trying to stay afloat and stick to our knitting.”

Since the sale, Zomba, which includes Jive Records and the gospel label Verity, has managed to defy the industry’s troubles by discovering new artists, like the R&B singer Chris Brown and the rockers Three Days Grace, while keeping costs down — a tough task in a field given to financial excess.

Johnny Wright, a talent manager overseeing acts including Mr. Timberlake and the Backstreet Boys, remarked, “They overanalyze every penny that’s spent to make sure it’s not just frivolous money being thrown away.”

He added: “As a manager of an artist, you want a $2 million video budget. Do you really need one? At the time that you’re involved in it, you’re feeling a little frustrated,” but “at the end of the day you’ve made a decent video, and you have an artist that’s actually getting a royalty check.”

There is little argument that the label’s sales and market share have slid sharply from their pinnacle during the teen pop sales surge; the industry itself has buckled under the weight of widespread piracy and other woes.

But if any of the corporate-owned labels can be described as succeeding these days, Mr. Weiss’s is one of the few. Zomba has increased its share of new-release sales almost 20 percent so far this year, even as sales of new albums industrywide have dropped 16.5 percent, according to Nielsen SoundScan data. It has remained consistently profitable, having generated more than $40 million in profit last year on well over $200 million in revenue, according to executives briefed on the label’s business.

Being part of a sprawling media empire has had certain advantages; a Bertelsmann reorganization three years ago shifted established stars like Usher and then-unknown artists like Ciara to Zomba’s roster. But side businesses, including a studio-equipment rental service, that once bolstered Zomba’s success have been sold.

What remains at the center is Mr. Weiss, 48, who exudes a feverish energy even when sitting. Since his appointment in 2002, he has taken pains to preserve the internal culture of the label; that has meant, in part, a preference for developing artists in-house rather than through ventures with outside talent finders.

Zomba has kept its home in a bare-bones office building in the Chelsea section of Manhattan, apart from the big suites of higher-volume labels in Midtown. It may face new challenges when it relocates to the Madison Avenue headquarters of its corporate parent these days, Sony BMG Music Entertainment, a move expected later this year.

“There’s very little ego,” said Max Martin, a Swedish producer behind hits for Ms. Spears and others. “When you meet a lot of other presidents,” he said, declining to specify anyone, “you see lots of big offices, you see a lot of ‘I’m the president of the record company.’ That’s the one thing I that I love about Barry and Jive in general, there’s very little of that thing. It’s a very tight group of people.”

The chairman of a competing record label, who spoke on condition of anonymity, said that Zomba’s reputation for frugality was sometimes overstated. Zomba may pour cash into important production and marketing expenses, though “they’re not going to send you a limousine just because you’re going to get an ASCAP award,” this executive said, referring to the American Society for Composers, Authors and Publishers, the industry professional group.

Mr. Weiss makes no apologies, and suggests that some rival labels have chosen to whack away at their overhead costs — resulting in hundreds of layoffs — rather than take on the potentially more difficult pruning of day-to-day production and marketing expenses.

“On the one hand,” he said, “they’re laying off all these people from these companies to the point where you’re cutting into the bone. But nobody’s focusing on the fact that that album that should’ve cost $800,000 cost $2 million. Or the video that the egotistical president of the company decided to scrap, for $400,000, because they didn’t like the color of the pants that the artist was wearing. Those things still kind of go on in the business.”

Mr. Weiss’s education in music had begun decades before — at the side of his father, Hy, a music entrepreneur who in the 1950’s built his own label, Old Town Records, which specialized in doo-wop, R&B and pop, recording hits by acts like the Solitaires.

In addition to working with his father, Mr. Weiss promoted songs to radio stations in upstate New York while attending Cornell. In 1982, Mr. Calder, a South African expatriate, hired him as one of the upstart label’s first employees in the United States, where he struck upon early success pushing acts including A Flock of Seagulls and Billy Ocean.

Mr. Weiss stoked Mr. Calder’s early interest in rap music at a time when major music labels largely dismissed the genre, and oversaw the signing of the rap act Whodini, one of a series of hit makers that also included KRS-One and Too Short.

By the time Mr. Weiss worked his way up to become Mr. Calder’s right-hand man, Zomba had expanded to become the biggest independent record label in the world, turning Ms. Spears, a former Mouseketeer, and The Backstreet Boys into superstars.

In 2002, Mr. Calder cashed in, exercising a contract option that required Bertelsmann to buy out his share of Zomba at a premium based on the success of the teen pop acts and other big discoveries. Then he all but vanished from the music landscape.

So, too, has the old way of doing business. In the jubilant days of 2000, ’N Sync shattered a record by selling 2.4 million copies of its “No Strings Attached” album in a single week — more than the combined sum of the top 50 titles on the current edition of Billboard’s weekly sales chart.

Now, labels are scrambling to offset plunging CD sales by cobbling profits from bite-size products like ring tones and digital downloads. Indeed, more than 40 percent of Zomba’s revenue from new releases through the first half of this year came from digital sales.

Mr. Weiss said that has made it all the more important for labels to sign artists with commercial potential; Jive has had a particular ear for street-savvy R&B that can attract mainstream pop fans.

“The margin for error has been greatly reduced,” he said, “and the winners don’t pay for the losers the way they used to.”

With the right songs, he added, the label can generate a profit even without a gold album. When the rap newcomer Huey released his first album last month, for example, it sold fewer than 29,000 copies the first week. But Huey’s hit single, “Pop, Lock & Drop It,” had already turned into a radio hit, fueling sales of more than two million downloads and ring tones, the latter typically costing as much as $2.50 each. By keeping costs low, the label was already in the black when the album reached shops, Zomba executives said.

Mr. Weiss’s talents as a manager were on display one recent night at the House of Blues in West Hollywood, where a group of Jive executives and he had gathered to watch a set by T-Pain. Stars from competing labels, Akon and Busta Rhymes, unexpectedly clambered onstage to join T-Pain, sending the already giddy crowd into bliss.

Upstairs, Mr. Weiss danced with colleagues and made no attempt to conceal his delight at the scene of screaming fans. “And the good news?” he said. “It didn’t cost us anything.”
http://www.nytimes.com/2007/07/23/bu...a/23music.html





Clear Channel Revises Airplay Agreement
FMQB

Earlier this week, the Future of Music Coalition filed a formal complaint with the FCC, accusing Clear Channel Radio of forcing musicians to give up their digital copyrights in order to get the airplay that is required under the payola consent decree. Now Clear Channel has altered the wording in its legal agreements, making sure that artists will not have to give up those rights.

The re-worded agreement (which can be found on CC stations' Web sites) now says, "In the instance when Clear Channel makes the decision to use the content for terrestrial broadcasting and, as a result, for simultaneous transmission through online streaming ... Clear Channel shall be subject to and pay for all applicable current and future statutory royalties as well as public performance royalties."

Last week, Senator Russ Feingold (D-WI) sent an open letter to the heads of CBS Radio, Citadel, Clear Channel and Entercom, questioning their commitment to ending payola in radio. The letter was prompted by the FMC's accusations against CC.
http://fmqb.com/Article.asp?id=443179





Cumulus Media Being Sold for $508M
AP

Radio station owner Cumulus Media Inc. has agreed to a $507.7 million cash buyout offer from a group of investors that includes the company's chief executive.

The investor group is being led by Chief Executive Lewis Dickey, who will remain in that role once the deal closes, and an affiliate of Merrill Lynch Global Private Equity.

Under the deal announced Monday, the buyers would pay $11.75 a share, a 40 percent premium over Friday's closing price, for each of the roughly 43.2 million shares of Cumulus stock outstanding.

The buyers would also assume debt that would boost the total value of the transaction to $1.3 billion, the Atlanta-based company said in a statement.

The news sent Cumulus shares soaring $2.75, or 32.9 percent, to close at $11.12 after briefly rising to a new 52-week high of $11.74. The stock previously traded between $8.36 and $11.68 over the past year.

Cumulus said the transaction will be financed through a combination of equity contributed by Dickey, his brother and fellow executive, other members of their family and Merrill Lynch Global Private Equity, and debt financing that has been committed by Merrill Lynch Capital Corp.

The Dickeys and stockholders affiliated with Banc of America Capital Investors have agreed to vote their shares of Cumulus stock in favor of the deal or any superior proposal approved by the Cumulus board.

After completing pending acquisitions and divestitures, Cumulus will own or operate 344 radio stations in 67 U.S. markets either directly and through its investment in Cumulus Media Partners. Cumulus had $334 million in revenues last year.

The deal is subject to shareholder and regulatory approval, and the company can solicit higher bids for 45 days.
http://origin.mercurynews.com/breakingnews/ci_6444335





Phone Mast Allergy 'in the Mind'
BBC

Mobile phone masts are not responsible for the symptoms of ill health some blame them for, a major UK study says.

Dozens of people who believed the masts triggered symptoms such as anxiety, nausea and tiredness could not detect if signals were on or off in trials.

However, the Environmental Health Perspectives study stressed people were nonetheless suffering "real symptoms".

Campaign group Mast Sanity said the results were skewed as 12 people in the trials dropped out because of illness.

In the trial, many of those who blame masts for their symptoms reported greater distress when they thought the signal was on, suggesting the problem has a psychological basis.

"Belief is a very powerful thing," said Professor Elaine Fox, of the University of Essex, who led the three-year study.

"If you really believe something is going to do you some harm, it will."

The study was funded by the Mobile Telecommunications and Health Research programme, a body which is itself funded by industry and government.

Modern appliances

It is unclear how many people in the UK suffer from "electro-sensitivity", an allergy they believe can be triggered by a range of modern day appliances from hair driers to mobile phone masts.

In 2005, the Health Protection Agency (HPA) said there was no scientific evidence to link their ill health with electrical equipment, while acknowledging sufferers could have real and unpleasant symptoms.

But the HPA research did not consider the effects of waves from phone masts, as most of the studies looking at electrical sensitivity were carried out before they were widely introduced.

A number of studies subsequently have looked at the mobile effect, but the Essex experiments are some of the largest and most detailed to date.

After 12 of the sufferers dropped out of the trial, researchers tested a total of 44 people with a history of symptoms against a control group of 114 people who had never reported ill effects from masts.

When the signal was being emitted, and they were told of this, sensitive individuals reported lower levels of well-being.

This was true for exposure to both forms of mobile systems - GSM and UMTS (3G).

However, when tests were carried out in which neither the experimenter or participant knew if the mast was on or off, the number of symptoms reported was not related to whether a signal was being emitted or not.

Chance finding

Two of the 44 sensitive individuals correctly judged if it was on or off in all six tests, as did five out of 114 control participants.

"This proportion is what is expected by chance," the researchers said.

The symptoms were real. As well as reporting feeling unwell, sensitive individuals had sweatier skin and higher blood pressure - both measures of a physiological response.

But this was regardless of whether the signal was on or off.

"Hence the range of symptoms and physiological response does not appear to be related to the presence of either GSM or 3G signals," the study concluded.

Other experts endorsed the study's findings.

Dr James Rubin, of the Mobile Phone Research Unit, King's College London, said the findings were in line with those from most other previous experiments.

"This should be reassuring news for anyone who is concerned about the possible short-term health effects of masts," he said.

But Mast Sanity declared "history has shown that many now commonly accepted physical conditions were initially dismissed as psychological".

"Isn't it time that the government woke up to the reality of electrosensitivity instead of attempting to persuade sufferers that it is all in their minds?" said spokeswoman Yasmin Skelt.

But another campaign group, Powerwatch, commended the research as "one of the best designed and executed studies to date" while stressing that the number of dropouts was unfortunate.

"So whilst it cannot be entirely ruled out that a small minority are truly sensitive, the proportions of any truly sensitive people are likely to be far lower than the 3-35% that has been quoted."
http://news.bbc.co.uk/go/pr/fr/-/2/h...th/6914492.stm





Sand, Sun and RFID?: The High-Tech, Networked Beach is Coming Soon
Layer 8

Ocean City, New Jersey is a nice, family-oriented beach that will apparently soon be the high-tech model for seashore lovers and now perhaps geeks everywhere. The city has on its plate a $3 million variety of public services on tap featuring Internet access and radio-frequency identification chips (RFID) and Wi-Fi wireless technology. A wireless network will let Ocean City expand economic development and control the cost of local services. Wireless allows the City to save on cell phone usage, T-1 lines, and it adds efficiency. By maximizing connectivity, there are a variety of ways to enhance education, library services, and emergency management services, city executives say on their Website.

The provider of the Ocean City wireless network has not been determined yet and the City meets this week to possibly select a service provider but it is on track to have wireless coverage by early 2008, according to the City’s Website. The wireless net would be free to resident and $6 a day for tourists. But that’s not all. The city is looking to replace its ubiquitous but mostly annoying beach tags – which indicate you paid to get on the beach $5 per day, $10 for a week, or $20 for the whole summer – with wristbands that contain an RFID chip. That way there’s be no more hassling with beach tag checkers as they can use handheld devices to see who has a tag and who doesn’t. Last year, Ocean City spent more than $282,000 to pay 170 badge checkers and with the new RFID wristband it will certainly reduce that number.

From an Asbury Park Press report:
…people wouldn't even think about trying to sneak onto the beach without paying: Five to 10% of people going to the beach either try to sneak on without paying, or lie offer excuses including that their badge is on a T-shirt on a beach chair near the water. (Ed aside: I know I did when I lived near the area)

Will McKinley, a badge checker stationed on boardwalk at the 19th Street beach, said the new system would make his job easier. "It will take the hassle out of going up to people and asking to see their badges," he said. "They're more OK with it up here. On the beach, they don't like to be hassled."

Yet another cool feature of the high-tech beach will be the ability to track beachgoers – an application that is being touted by parents. A mother going to the beach with three small children, for instance, could have her bracelet linked to those of her children. If one of them passes an electronic sensor at the entrance or exit to the boardwalk without the right adult, a text message would instantly be sent to her cell phone, the Asbury Press says. The RFID network would also let city officials know how many people are on the beach at a particular time and let them adjust police and emergency units where they might be needed most. And even the trash cans on this beach would be high-tech. Special solar-powered units would have sensors that, when the container is three-quarters full, would automatically send an e-mail to the public works department asking a worker to come empty them, according to the Asbury Park Press.

Is it all too Big brotherish? Some think so. Most seem positive. Nearly 20 coastal municipalities have wireless Internet systems, mostly in California and Florida, according to the Web site MuniWireless.com. Published reports say the network could net the city $12 million in five years or so.
http://www.networkworld.com/community/node/17841





Sprint, Google in Pact for WiMax Mobile Web

Sprint Nextel Corp. said on Thursday it would develop with Google Inc. a new mobile Internet portal using WiMax wireless technology to offer Web search and social networking.

Sprint's WiMax for high-speed wireless and its services for detecting location will be combined with Google tools including e-mail, chat and other applications.

Sprint announced earlier this month a plan to connect its WiMax high-speed services with those of Clearwire Corp to allow customers to move between their networks.

Sprint aims to use the emerging WiMax technology to better compete with rival wireless and wired broadband networks.

It plans to test the WiMax service in Chicago, Baltimore and Washington by the end of this year, with a goal of attaining coverage for 100 million people by the end of 2008.

WiMax offers Web access speeds that are five times faster than typical wireless networks, though they are still slower than wired broadband.

(Reporting by Michele Gershberg and Anthony Kurian in Bangalore)
http://www.reuters.com/article/techn...AS800420070726





When Mobile Phones Aren’t Truly Mobile
Randall Stross

WIRELESS carriers in the United States are spiritual descendants of dear Ma Bell: they view total control over customers as their inherited birthright.

The younger generation — Verizon Wireless, Sprint Nextel, T-Mobile and the namesake child AT&T — would make their hallowed matriarch proud. They do everything they can to keep power firmly in their own hands. It is entirely at the carriers’ discretion to permit, or disable, the features that a factory loads into the newest phones. They also decide which software can be installed and how it may be used. Many wireless subscribers have ruefully become acquainted with gotcha clauses in their contracts.

In most European and Asian countries, a customer can switch carriers in a few seconds by removing a smart card from a cellphone and inserting a different one from a new provider. In the United States, wireless carriers have deliberately hobbled their phones to make flight to a competitor difficult, if not impossible.

If you, the long-suffering subscriber, decide that you have had enough and wish to try your luck with another company, you’re free to pay your early-termination fee and go. But you most likely will have to abandon the phone you’ve already paid for, even when the technology is shared by the two carriers. (Sprint, for example, whose network is based on the CDMA standard, forbids the use of CDMA-based cellphones obtained from Verizon.) The odds are better than even that your cellphone is either locked by your incumbent carrier or forbidden for use on the network by your new one.

In the days when cellphones were inexpensive and could perform only one or two functions, they could be treated as disposable. When smart phones like the Palm Treo arrived, however, the cellphones became too pricey to abandon lightly when switching companies. Now the iPhone is here — if you’re willing to pony up $500 or $600. AT&T has received an exclusive contract from Apple, so iPhone buyers have no alternative carrier. But the lack of choices rankles and is drawing more scrutiny than ever.

Two weeks ago, Representative Edward J. Markey, Democrat of Massachusetts, led a House hearing on “wireless innovation and consumer protection” and held up an iPhone as Exhibit A in his assessment that the industry exerted “far too much control over the features, functions and applications that wireless gadget makers and content entrepreneurs can offer directly to consumers.” Why is it, he asked, that AT&T imposes a two-year contract with a $175 early-termination fee “even though the phone cost wasn’t subsidized and a consumer can’t even take it to use with another network provider?”

Wireless customers may soon have a few more options. In a coming auction for wireless spectrum that will be available in 2009, the Federal Communications Commission is preparing to set aside a third of the new capacity for bidders who agree to operate wireless services in a more open fashion.

Kevin J. Martin, the F.C.C. chairman, said in an interview last week that he had circulated a draft proposal among his fellow commissioners that would require the winning bidders to be receptive “to all kinds of devices and applications” provided by independent consumer electronics makers and third-party software providers.

Subscribers of the new services would even be permitted to take their phones with them, freely, from one carrier to another. Imagine: a genuinely mobile phone.

The pressure to provide consumers with more cellphone and software choices has been building for some time. In January, the F.C.C. took another step to loosen the exclusive grip of the cable operators’ control over the set-top box that feeds the cable signal to the TV, a move that showed that the commission is open to changes that give consumers more equipment choices.

Then, in February, Timothy Wu, a law professor at Columbia University, published an influential paper, “Wireless Net Neutrality,” which made a well-supported case that the government should compel wireless carriers to open their networks to equipment and software applications that the carriers did not control. Mr. Wu called his proposition a call for “Cellular Carterfone,” referring to the 1968 Carterfone ruling by the F.C.C. The Carterfone was a speakerphone-like gadget that permitted a phone sitting in a cradle to be connected with a two-way radio. Over the objections of AT&T, the F.C.C. ruled that consumers could plug it or any phone or accessory into the network so long as doing so did no harm to the network. The ruling set in motion the changes that provided consumers with a cornucopia of equipment choices like answering machines, fax machines, modems and cordless phones. Among Mr. Wu’s readers was Mr. Martin of the F.C.C.

The wireless carriers are fighting a cellular version of the Carterfone decision. They contend that they must exert control over all equipment used on their networks in order to protect the networks’ operations. AT&T says in an F.C.C. filing that only the carrier has the incentive to oversee “the integrity, security and efficient and economical use” of the network.

MR. WU’S paper, however, shows that the landline telephone industry used identical arguments, predicting dire consequences were its customers permitted to use equipment from unknown sources. In 1955, when AT&T was fighting to exclude a gadget called the Hush-A-Phone, the company solemnly argued, “It would be extremely difficult to furnish ‘good’ telephone service if telephone users were free to attach to the equipment, or use with it, all of the numerous kinds of foreign attachments, which are marketed by persons who have no responsibility for the quality of telephone service.”

As a postscript to the landline industry’s resistance to opening its networks, Mr. Wu said in an interview last week, “Things turned out not just O.K., but great.”

Companies like Google and Skype have called on the F.C.C. to open up more equipment and software options in the wireless industry. Google said on Friday that it would participate in the spectrum auction, committing a minimum of $4.6 billion, if the F.C.C. put into effect its "open access" proposals submitted earlier. Verizon Wireless, however, contended that Google’s proposals would open its network to phones that Verizon had not approved and “that cannot reliably communicate with law enforcement,” a grave problem “in an era of heightened national security concerns.”

In other words, stick with Verizon-certified phones, or the terrorists win.

The wireless industry is being dragged, ever so slowly and gently, into a scary new age — one that began in 1968 with Carterfone — that will require adjustment to reduced control. The industry can never credibly contend that its business practices foster competition and innovation as long as its customers are prevented from moving easily from one carrier to another. Last week, Representative Markey said: “How crazy is this? You can take your number with you, but you can’t take your new $500 phone with you.”
http://www.nytimes.com/2007/07/22/bu...ey/22digi.html





iPhone Flaw Lets Hackers Take Over, Security Firm Says
John Schwartz

A team of computer security consultants say they have found a flaw in Apple’s wildly popular iPhone that allows them to take control of the device.

The researchers, working for Independent Security Evaluators, a company that tests its clients’ computer security by hacking it, said that they could take control of iPhones through a WiFi connection or by tricking users into going to a Web site that contains malicious code. The hack, the first reported, allowed them to tap the wealth of personal information the phones contain.

Although Apple built considerable security measures into its device, said Charles A. Miller, the principal security analyst for the firm, “Once you did manage to find a hole, you were in complete control.” The firm, based in Baltimore, alerted Apple about the vulnerability this week and recommended a software patch that could solve the problem.

A spokeswoman for Apple, Lynn Fox, said, “Apple takes security very seriously and has a great track record of addressing potential vulnerabilities before they can affect users.”

“We’re looking into the report submitted by I.S.E. and always welcome feedback on how to improve our security,” she said.

There is no evidence that this flaw had been exploited or that users had been affected.

Dr. Miller, a former employee of the National Security Agency who has a doctorate in computer science, demonstrated the hack to a reporter by using his iPhone’s Web browser to visit a Web site of his own design.

Once he was there, the site injected a bit of code into the iPhone that then took over the phone. The phone promptly followed instructions to transmit a set of files to the attacking computer that included recent text messages — including one that had been sent to the reporter’s cellphone moments before — as well as telephone contacts and e-mail addresses.

“We can get any file we want,” he said. Potentially, he added, the attack could be used to program the phone to make calls, running up large bills or even turning it into a portable bugging device.

Steven M. Bellovin, a professor of computer science at Columbia University, said, “This looks like a very genuine hack.” Mr. Bellovin, who was for many years a computer security expert at AT&T Labs Research, said the vulnerability of the iPhone was an inevitable result of the long-anticipated convergence of computing and telephony.

“We’ve been hearing for a few years now that viruses and worms were going to be a problem on cellphones as they became a little more powerful, and we’re there,” he said. The iPhone is a full-fledged computer, he noted, “and sure enough, it’s got computer-grade problems.”

He said he suspected that phones based on the Windows mobile operating system would be similarly “attackable,” though he had not yet heard of any attacks.

“It’s not the end of the world; it’s not the end of the iPhone,” he said, any more than the regular revelations of vulnerabilities in computer browser software have killed off computing. “It is a sign that you cannot let down your guard. It is a sign that we need to build software and systems better.”

Details on the vulnerability, but not a step-by-step guide to hacking the phone, can be found at www.exploitingiphone.com, which the researchers said would be unveiled today.

Hackers around the world have been trying to unveil the secrets of the iPhone since its release last month; most have focused their efforts on unlocking the phone from its sole wireless provider, AT&T, and getting unauthorized programs to run on it. The iPhone is a closed system that cannot accept outside programs and can be used only with the AT&T wireless network.

Some of those hackers have posted bulletins of their progress on the Web. A posting went up on Friday that a hacker going by the name of “Nightwatch” had created and started an independent program on the phone.

The Independent Security Evaluators researchers were able to crack the phone’s software in a week, said Aviel D. Rubin, the firm’s founder and the technical director of the Information Security Institute at Johns Hopkins University. Mr. Rubin, who bought an iPhone the day after the cellphone was released, said in an interview that he had approached three colleagues, Dr. Miller, Joshua Mason and Jake Honoroff, and offered them an enticing prize if they would try to crack the iPhone. “I told the guys I would buy them iPhones.”

Dr. Miller had already been exploring weaknesses in the computer versions of Safari, Apple’s Web browser, and was planning to reveal that vulnerability, a relatively common kind of flaw known as a buffer overflow, at the Black Hat computer security conference next month. Dr. Miller instantly thought to see whether the phone, which uses a version of Safari, would be as vulnerable.

Mr. Rubin said the research was not intended to show that the iPhone was necessarily more vulnerable to hacking than other phones, or that Apple products were less secure than those from other companies. “Anything as complex as a computer — which is what this phone is — is going to have vulnerabilities,” he said.

There are far more viruses, worms and other malicious software affecting Windows systems than Apple systems. But Mr. Rubin said that Apple products have drawn fewer attacks because the computers have fewer users, and hackers reach for the greatest impact.

“Windows gets hacked all the time not because it is more insecure than Apple, but because 95 percent of computer users are on Windows,” he said. “The other 5 percent have enjoyed a honeymoon that will eventually come to an end.”

The iPhone is becoming a victim of its own success, he said. “The irony is that the more popular something is, the more insecure it becomes, because popularity paints a large target on its back.”

Mr. Rubin said his goal was to discover vulnerabilities and warn of them so that companies would strengthen their products and consumers would not be lulled into thinking that the technology they use was completely secure.

Mr. Rubin said, “I will think twice before getting on a random public WiFi network now,” but his overall opinion of the phone has not changed.

“You’d have to pry it out of my cold, dead hands to get it away from me,” he said.
http://www.nytimes.com/2007/07/23/te.../23iphone.html





Proof of concept

First Native Third-Party Applications Running on iPhone
Erik Kennedy

Late last week, one "Nightwatch," an anonymous hacker familiar with the ARM processor family, wrote a "Hello, World!" program and ran it. Ordinarily, that wouldn't really be sufficient fodder for an Infinite Loop post, but this particular program is Kind of a Big Deal™. It was run on an iPhone—the first known non-native application to do so.

According to the iPhone Dev Wiki at iphone.fiveforty.net, Nightwatch's ARM/mach-o toolchain kit has successfully compiled its first non-AJAX iPhone application, a significant step forward in unlocking the secrets of the device (if not the device itself). Granted, it's rather a messy process at the moment, involving multiple installations of various and sundry open-source bits and the binaries that, once compiled, don't have much access to little things like OS X header files or whatnot. But the major hurdle, knowing it can be done, is now out of the way. Just don't expect to see Pocket Quicken in the next couple of weeks or anything.

Follow the team's progress via the IRC channel #iphone at irc.osx86.hu. (Try not to be a jerk in the channel, there's enough noise-to-signal as it is already.)
http://arstechnica.com/journals/appl...ning-on-iphone





iPhone Can Now Serve Web Pages, Run Python, Open Source Apps

After the first Hello World application, hacker NerveGas and the people at #iphone-shell have built Apache, Python and other Open Source apps for the iPhone. Yes, your iPhone can now be a Web Server and do all sort of 1337 things. This also means that third-party applications for iPhone will happen no matter what. People, Doom could be just around the corner. [UPDATED 3:07AM EST: As a bonus, check their progress on the iPhone unlocking after the jump.]

The working installations, created using iPhone-hacking-genius Nightwatch's toolchain, include a working Apache installation, Pytho and "a growing binary kit including routing tools, vim, curl, and much more." The binaries can be downloaded from the iPhone Web Wiki web page, but keep in mind that these are only indicated for technical-oriented people, not consumers.

As for the unlocking progress, here's the latest update:
We have confirmation of the existence of some attempt counter for the unlock: with no unlock attempts +XLOCK returns: "PN",1,0,"PU",5,0,"PP",5,0,"PC",5,0,"PS",5,0 with unlock attempts +XLOCK returns: "PN",3,0,"PU",5,0,"PP",5,0,"PC",5,0,"PS",5,0

The unlock handler dies if the first number is >1 but we're still not sure of its exact meaning and how it is set due to some odd behaviour we observed.

Currently the semantic is believed to be:

0=Unknown, 1=Default/Locked, 2=Unknown, 3=Unknown (has to do with attempts), 4=Lockable, 5=Unlocked

While this could seem irrelevant, it probably means that they could try to control the unlocking attempts counter so they can start a full force attack on the total unlocking without making their iPhones useless. One step at time, but steady progress.

These guys are really amazing. If you know what you are doing and want to help, join the effort at the #iPhone IRC channel. If not, stay tuned for the ready-for-public-consumption versions of their applications.
http://gizmodo.com/gadgets/breaking/...pps-282139.php





Apple Slips, AT&T iPhone Activations Disappoint

Apple Inc. shares slipped about 2 percent before the market opened on Tuesday after AT&T Inc. reported initial data on activations for Apple's iPhone that were disappointing to some investors.

In electronic trading before the regular Nasdaq market session, Apple shares slid to $141 from their Monday close of $143.70.

"There is no upside surprise on the number," Shannon Cross, an analyst Cross Research, said of AT&T's initial iPhone activatations.

AT&T said Tuesday that it activated 146,000 iPhones in the first few days of its availability.
http://www.reuters.com/article/hotSt...41903120070724





Apple Posts Record Quarterly Profit
AP

Apple Inc.'s fiscal third-quarter profit soared more than 73 percent, fueled by demand for its Macintosh computers, the strength of its iPod media players and the sales of 270,000 iPhones in the first two days on the market.

For the quarter ended June 30, Apple's profit rose to $818 million, or 92 cents per share, up from $472 million, or 54 cents a share in the year-ago quarter.

Sales grew to $5.41 billion from $4.37 billion last year.

Analysts polled by Thomson Financial expected Apple to report earnings of 72 cents per share on sales of $5.28 billion while Apple itself had projected earnings of 66 cents per share on quarterly sales of $5.1 billion.

"We're thrilled to report the highest June quarter revenue and profit in Apple's history, along with the highest quarterly Mac sales ever," said Steve Jobs, Apple's CEO. "IPhone is off to a great start — we hope to sell our one-millionth iPhone by the end of its first full quarter of sales — and our new product pipeline is very strong."

The gadget maker's highly anticipated iPhone launched on June 29 and sold out within days. Wall Street analysts and investors have had lofty expectations for the multimedia cell phone, driving up Apple's stock more than 30 percent during the quarter.

Apple's silence on how many iPhones were available at launch added to the frenzy and analysts were hoping to gain some insight on the iPhone's initial sales impact and outlook when the Cupertino-based company was to discuss its quarterly earnings during a conference call late Wednesday.

Shares of Apple tumbled more than 6 percent Tuesday after AT&T Inc. — the iPhone's exclusive U.S. carrier — said it activated 146,000 iPhones on June 29 and 30, a number that disappointed investors following some analyst forecasts that Apple would sell 500,000 or more iPhones in its first weekend.

Apple shares rose $2.37, or 1.8 percent, to close at $137.26.
http://sfgate.com/cgi-bin/article.cg...f135543D85.DTL





In a Highly Complex World, Innovation From the Top Down
G. Pascal Zachary

USER-GENERATED content — from Wikipedia to YouTube to open-source software — is generating waves of excitement. But the opening of innovation to wider numbers of people obscures another trend: many of the most popular new products, like the iPod, are dominated by a top-down, elite innovation model that doesn’t allow for customization.

“New technologies are becoming so complex that many are beyond the possibility of democracy playing a role in their development,” said Thomas P. Hughes, a science and technology professor at the University of Pennsylvania.

Consider: Electronic implants into human bodies; gene-splicing as common as cosmetic surgery; computer networks mining vast databases to discern consumer preferences. All of these innovations are the result of corporate or government initiatives overseen by elites.

“The process of innovation leaves out a huge proportion of the population,” said Daniel Sarewitz, director of the Consortium for Science, Policy and Outcomes at Arizona State University.

To be sure, experts like Eric von Hippel, a management professor at the Massachusetts Institute of Technology, argue that the proliferation of “user-generated” designs signals the “democratizing” of innovation. Armed with inexpensive digital tools and networks, ordinary people, he says, can band together to push their own innovations. They also can hijack existing technologies, taking them in directions only dimly envisioned by the original creators.

One example is an electronic community called Instructables whose participants share methods for customizing standard products in unpredictable ways. The chief of Instructables, Eric J. Wilhelm, who earned his doctorate at M.I.T., where he was inspired by Mr. von Hippel, has posted a clever means of turning a white Asics Gel-Foundation 7 running shoe into a purple model. (The $90 official version comes only in a white-black-and-blue combination.)

Today’s Web-savvy consumers “expect innovations to meet their needs,” Mr. Wilhelm says. “If innovation isn’t tailored to them, they expect to be able to tailor it to themselves. That is a big change.”

But does this really mean that elites no longer sit at the top of the innovation food chain?

“Elites have a lot of leverage but less than they used to,” says Peter Leyden, director of the New Politics Institute in San Francisco. “More people are getting their voices heard.” Mr. Leyden sees an emergent American “republic of innovation,” where growing numbers of people influence what innovations are made and when.

Skeptics, however, say that the rosy scenario is exaggerated and that user-generated innovation is merely a kind of “democracy lite,” emphasizing high-end consumer products and services rather than innovations that broadly benefit society.

“Difficult questions are going unasked about who is participating in innovation and on what terms,” says James Wilsdon, director of the innovation program at Demos, a think tank in London.

In that scenario, needed innovations can be overlooked. For example, huge amounts of money are spent on improving Web search engines or MP3 players, while scant attention is given to alternative energy sources. Battling diseases like AIDS or Alzheimer’s — efforts that lobbying groups in wealthy countries help highlight — attract legions of well-financed innovators, while big global killers, like childhood diarrhea and sleeping sickness, are ignored.

Popular pressure to pursue certain innovations sometimes gets results, of course. In 2004, voters in California passed a law lavishly funding a stem-cell research institute — in a rebuke to the Bush administration, which has banned federal funding for such research. “This was a great example of a democratic adjudication of an innovation issue,” Mr. Sarewitz of Arizona State said. Even so, bureaucratic and legal delays have meant a slow start for the San Francisco lab, which has not yet received approval to spend any of the $3 billion in promised taxpayer funds.

The California example suggests that the balance between expert leadership and mass influence is hard to achieve. The underlying complexity of many innovations demands an ever-rising technological literacy from the public, and yet such an outcome “is a dream that will not likely come to pass,” insists Mr. Hughes, a visiting professor at M.I.T.

For all the hoopla over the power and promise of user-generated content, consumer-directed design and other hallmarks of our new golden era of democratized innovation, one of the iconic products of our times — the iPod — can’t be customized (no, I’m not counting putting on different-colored protective jackets). There is an unbroken line between Henry Ford (with his Model T) and Steve Jobs. The new iPhone similarly reflects the elite, corporate innovator’s drive to find one size that fits many.

The cliché that committees can’t create great ideas, or art, still seems to be true — though whether or not that is the best way to innovate remains an open question. Who knows how much longer?
http://www.nytimes.com/2007/07/29/bu...ey/29ping.html





For Architects, Personal Archives as Gold Mines
Robin Pogrebin

In reflecting on where a long career’s worth of architectural drawings and models will ultimately go, Frank Gehry is not focusing strictly on institutions that he feels close to — like the Guggenheim Museum, say, for which he designed a famous satellite branch in Bilbao, Spain. He’s trying to determine which place will pony up.

“I don’t want to give it away — it’s an asset,” Mr. Gehry said. “It’s the one thing in your life you build up, and you own it. And I’ve been spending a lot of rent to preserve it.”

Mr. Gehry, 78, is among a small but influential number of celebrity architects who are considering selling their archives — which can include tens of thousands of objects, from multiple large-scale models and reams of drawings to correspondence and other records — even as they continue to practice.

Barry Bergdoll, the chief curator of architecture and design at the Museum of Modern Art, said he had been approached about the Gehry archive and that the price range was “in multimillion dollars.” He declined to be more specific.

“There is a huge seismic shift,” Mr. Bergdoll said. “It used to be architects would be so grateful that there was someone interested in dedicating space to their work, and they would donate it. Now architects view their designs as a kind of profit center. Architects are getting valuations of them as though they were selling the studio of Picasso.”

The architect Peter Eisenman, 74, says he could not afford not to sell his archives, which he did for an undisclosed amount to the Canadian Center for Architecture in Montreal; the sale was made in pieces over the last 10 years. The goal was to provide for his children, he said.

“I’m not in a position to give it away,” said the architect, whose projects have included the Wexner Center for the Arts in Columbus, Ohio, and the Memorial to the Murdered Jews of Europe in Berlin. Currently he is negotiating with the Beinecke Library at Yale University over some of his collected books and magazines, which could go there partly as a donation.

The bargaining power of these architects is buttressed by the spike in popular appreciation for architecture as an art form. “Architecture is one of the many expressions of the culture of the time,” said Wim de Wit, the Getty Research Institute’s curator of architectural collections. “It is as important as a literary archive or the archives of artists.”

The archives of famous writers have been known to command large sums or to spur competitive bidding by individual collectors and institutions. But archives in this country are generally donated, not sold, experts say, because the institutions that covet them do not have large acquisition budgets and the priority for donors is usually simply to see that their material finds a suitable home.

“There is a relatively small number of repositories in the United States that have endowments that enable six- or seven-figure purchases,” said Mark A. Greene, vice president of the Society of American Archivists. “Most donors are gratified that their collections are of sufficient historical value that a repository wants to acquire it in the first place.”

Mary Jo Pugh, the editor of The American Archivist, the society’s journal, said that “the vast majority” of archives amassed across the nation are donated. “The exceptions are literary manuscripts,” she said. For example, the Harry Ransom Humanities Research Center at the University of Texas at Austin acquired Norman Mailer’s archives in 2005 for $2.5 million.

But while dozens of institutions collect authors papers, only a handful collect architectural material, scholars say. And not one of them can easily accommodate the archives of contemporary practitioners.

In 2005 the J. Paul Getty Museum acquired the archive of the Modernist architect Pierre Koenig (1925-2004) from his widow for an undisclosed amount. It consists of more than 3,000 objects, including drawings, models, photographs, slides and documents.

Robert A. M. Stern, the dean of the Yale School of Architecture, said that architects even preserve telephone logs of calls to and from contractors and clients because they can offer an enlightening window into the creative process. Mr. Stern has donated his archives to Yale, as have architects like Kevin Roche and Cesar Pelli. The Yale architecture school collects the work of architects connected with the university.

And some in the field suggest that all of their colleagues should donate their archives to institutions rather than demand a price.

The architect Charles Gwathmey said about selling archives: “I think it’s wrong. Archives are part of the record. How do you put a value on it even?”

And the tax benefits of donating archival material are limited; a 1969 law — seeking to bar former President Lyndon B. Johnson from reaping tax benefits from his private papers — abolished tax deductions for donations of archives.

Mr. Eisenman says he has received a number of queries from institutions about his archive, mentioning Princeton, Columbia, Harvard and Yale. The Museum of Modern Art was not among them.

Mr. Bergdoll of the Modern said that he would like to collect more architects’ archives — and that he gets many offers, often with “phenomenal” prices attached — but that MoMA can barely accommodate the one it has now: that of the pioneering Modernist Mies van der Rohe. “Things used primarily by researchers require all the staff one associates with a library so that they can be accessible and retrievable,” Mr. Bergdoll said. “It would require tripling the staff.”

Peter B. Lewis, the philanthropist and a longtime Gehry fan, commissioned a study two years ago on the value of Mr. Gehry’s archive — he declines to disclose the results — and he continues to evaluate possible homes for it. Jennifer Frutchy, Mr. Lewis’s philanthropic adviser, said that the archive may be in its own class in terms of size, consisting of about 30,000 square feet of models, a slide library, a digital archive and more than 5,000 drawings.

“Frank’s archive is a real beast,” Ms. Frutchy said. “It really serves as a basis not just for the 20th century, but for the 21st century and beyond. In terms of education and research, it is just a gold mine.” She added, “It’s incredible to see the process Frank went through.”

Mr. Bergdoll said of the Gehry archive: “It would be fantastic for anybody to take it. But they will not only need to raise the money to buy it, but to store it, process it and make it available. Otherwise it’s like a time capsule operation — bury it somewhere and at least it’s not destroyed.”

Mr. Gehry said the value of his collection was still being determined, but that a friend to whom he had given two of his drawings had recently sold them for $20,000 each. The Canadian Center offered Mr. Gehry $1.5 million for material related to the house he designed for Mr. Lewis, but Mr. Gehry declined to part with just one of his projects and said the center did not want all of it.

Many institutions agree that the value of such archives is diminished if the components are broken up. “We are not interested in having a few drawings, but the whole archive, because we think architecture is a much more complex process,” said Mirko Zardini, director of the Canadian Center for Architecture, whose collection includes the archives of Aldo Rossi, James Stirling, Cedric Price and John Hejduk.

To be sure, the archives of only the superstar architects are likely to be in wide demand. But others also accumulate plenty over the years.

In the Central Park South studio of Billie Tsien and Tod Williams, however, cardboard models gather dust in corners until they deteriorate or are thrown away. Ms. Tsien said she had no interest in her work being collected and studied one day.

“I was hoping for a funeral pyre,” she said. “The only thing we really care about existing beyond us is the buildings.”
http://www.nytimes.com/2007/07/23/ar...23arch.html?hp





With Tools on Web, Amateurs Reshape Mapmaking
Miguel Helft

On the Web, anyone can be a mapmaker.

With the help of simple tools introduced by Internet companies recently, millions of people are trying their hand at cartography, drawing on digital maps and annotating them with text, images, sound and videos.

In the process, they are reshaping the world of mapmaking and collectively creating a new kind of atlas that is likely to be both richer and messier than any other.

They are also turning the Web into a medium where maps will play a more central role in how information is organized and found.

Already there are maps of biodiesel fueling stations in New England, yarn stores in Illinois and hydrofoils around the world. Many maps depict current events, including the detours around a collapsed Bay Area freeway and the path of two whales that swam up the Sacramento River delta in May.

James Lamb of Federal Way, Wash., created an online map to illustrate the spread of graffiti in his town and asked other residents to contribute to it. “Any time you can take data and represent it visually, you can start to recognize patterns and see where you need to put resources,” said Mr. Lamb, whose map now pinpoints, often with photographs, nearly 100 sites that have been vandalized.

Increasingly, people will be able to point their favorite mapping service to a specific location and discover many layers of information about it: its hotels and watering holes, its crime statistics and school rankings, its weather and environmental conditions, the recent news events and the history that have shaped it. A good portion of this information is being contributed by ordinary Web users.

In aggregate, these maps are similar to Wikipedia, the online encyclopedia, in that they reflect the collective knowledge of millions of contributors.

“What is happening is the creation of this extremely detailed map of the world that is being created by all the people in the world,” said John V. Hanke, director of Google Maps and Google Earth. “The end result is that there will be a much richer description of the earth.”

This fast-growing GeoWeb, as industry insiders call it, is in part a byproduct of the Internet search wars involving Google, Microsoft, Yahoo and others. In the race to popularize their map services — and dominate the potentially lucrative market for local advertising on maps — these companies have created the tools that are allowing people with minimal technical skills to do what only professional mapmakers were able to do before.

“It is a revolution,” said Matthew H. Edney, director of the History of Cartography Project at the University of Wisconsin in Madison. “Now with all sorts of really very accessible, very straightforward tools, anybody can make maps. They can select data, they can add data, they can communicate it with others. It truly has moved the power of map production into a completely new arena.”

Online maps have provided driving directions and helped Web users find businesses for years. But the Web mapping revolution began in earnest two years ago, when leading Internet companies first allowed programmers to merge their maps with data from outside sources to make “mash-ups.” Since then, for example, more than 50,000 programmers have used Google Maps to create mash-ups for things like apartment rentals in San Francisco and the paths of airplanes in flight.

Yet that is nothing compared with the boom that is now under way. In April, Google unveiled a service called My Maps that makes it easy for users to create customized maps. Since then, users of the service have created more than four million maps of everything from where to find good cheap food in New York to summer festivals in Europe.

More than a million maps have been created with a service from Microsoft called Collections, and 40,000 with tools from Platial, a technology start-up. MotionBased, a Web site owned by Garmin, the navigation device maker, lets users upload data they record on the move with a Global Positioning System receiver. It has amassed more than 1.3 million maps of hikes, runs, mountain bike rides and other adventures.

On the Flickr photo-sharing service owned by Yahoo, users have “geotagged” more than 25 million pictures, providing location data that allows them to be viewed on a map or through 3-D visualization software like Google Earth.

The maps sketched by this new generation of cartographers range from the useful to the fanciful and from the simple to the elaborate. Their accuracy, as with much that is on the Web, cannot be taken for granted.

“Some people are potentially going to do really stupid things with these tools,” said Donald Cooke, chief scientist at Tele Atlas North America, a leading supplier of digital street maps. “But you can also go hiking with your G.P.S. unit, and you can create a more accurate depiction of a trail than on a U.S.G.S. map,” Mr. Cooke said, referring to the United States Geological Survey.

April Johnson, a Web developer from Nashville, has used a G.P.S. device to create dozens of maps, including many of endurance horse races — typically 25-to-50-mile treks through rural trails or parks.

“You can’t buy these maps, because no one has made them,” Ms. Johnson said.

Angie Fura used one of Ms. Johnson’s maps to help organize the Trace Tribute, an endurance ride on trails near Nashville, and distributed the map to dozens of other riders. “It gives riders an opportunity to understand what the race is like, and it allows them to condition their horses in accordance,” Ms. Fura said.

Until recently, most Web maps were separate islands that could be viewed only one at a time and were sometimes hard to find. But Google and Microsoft have developed tools that make it possible for multiple layers of data to be viewed on a single map. And Google is working to make it easier to search through all online maps.

Now, a tourist heading to, say, Maui can find the hotels and restaurants on the island and display them on a map that also superimposes photos from Flickr and users’ reviews of various beaches.

The same information is quickly moving from two-dimensional to three-dimensional renderings. Microsoft, for example, has created 3-D models of 100 cities worldwide and aims to have 500 models in the next year.

“You will have a digital replica of the world in true 3-D,” said Erik Jorgensen, general manager of Live Search at Microsoft.

For the Internet search companies, these efforts are part of a race to capture the expected advertising bonanza that will come as users browse through these maps in search of businesses and services.

In the process, they are creating technologies whose impact could be similar to those of desktop publishing software, which turned millions of computer users into publishers.

“The possibilities for doing amazing kinds of things, to tell stories or to help tell stories with maps, are just endless,” said Dan Gillmor, director of the Center for Citizen Media, a project affiliated with Harvard’s Berkman Center for Internet & Society and the journalism school at the University of California in Berkeley.

Some of Mr. Gillmor’s journalism students are working with a researcher at Dartmouth to add photographs, videos and interviews to a map-based project documenting the house-by-house reconstruction of a section of New Orleans. Mr. Gillmor wants local residents to contribute to the project, which uses Platial’s map service.

“The hope is that the community will tell the story of its own recovery with the map as the dashboard,” he said. “We have just seen the beginning of what people are going to do with this stuff.”
http://www.nytimes.com/2007/07/27/te...27maps.html?hp





A Family Meets Today to Hear the Complexities of a Bid for Dow Jones
Richard Pérez-Peña

As it assembles at the Boston Hilton today to consider selling Dow Jones & Company and its main prize, The Wall Street Journal, to Rupert Murdoch’s News Corporation, the controlling Bancroft clan faces some stark choices.

Financially — and journalistically — the stakes are high.

Before the bid became publicly known, the Bancrofts’ shares were worth less than $750 million. At $60 a share, the price tentatively agreed to with the News Corporation, their stake is worth more than $1.2 billion, a difference that could approach $500 million spread out among more than 30 family members.

“They are not so well off as to be able to scoff at Murdoch’s money,” said James H. Ottaway, a major shareholder and retired Dow Jones executive. He says Dow Jones would continue to thrive independently and he wants the Bancrofts to reject the offer. But he conceded, “it is asking them to give up quite a lot, at least in the short run.”

Money will not be the only issue on the table today, as the family considers its century-old legacy and the prospect of The Journal being in the hands of a company and an owner whose newspapering many members dislike.

The Bancrofts today will hear a briefing from their advisers on the takeover tentatively approved by the Dow Jones board last Tuesday, and then they will take several days to ponder the matter before their lawyers poll the adult family members.

Assuming that all the shareholders outside the Bancroft and Ottaway families favor selling, less than one-third of the Bancroft family’s vote is needed to gain majority approval for the deal.

Measuring factions within the private, deeply divided family is difficult, and members can change sides; people close to them say it could go either way. At least one board member, Christopher Bancroft, has said he is strongly opposed.

Over the long term, their decision picture is shaded by differing views of the prospects for Dow Jones if they don’t sell. The company has made some bold moves in recent years, but the newspaper industry is in a sharp downturn. Yet even the most optimistic executives have not talked about making the company worth nearly the value Mr. Murdoch has placed on it, and if the Bancrofts reject his offer, the stock could even fall below the $36.33 closing price the day prior to the offer.

There is another proposal, this one from Brad Greenspan, a founder of MySpace. Mr. Greenspan proposes to lend the Bancroft family between $400 million to $600 million to buy out members who wish to sell. But it isn’t known how seriously his offer is being considered.

The agreement negotiated with Mr. Murdoch provides that some shareholders can exchange some stock for News Corporation shares. But even if the Bancrofts took only cash and paid capital gains taxes, they would still have significantly more than they had in April.

Dow Jones stock pays $1 a year in dividends, or $20.6 million to the family. But the money from a sale to the News Corporation, invested elsewhere, could generate several times as much income.

The Bancrofts have sold millions of Dow Jones shares over the last two decades and made other investments, so that some parts of the family have become much less dependent on the company for their living.

The family’s dividends are spread among many people, primarily the eight members of the oldest living generation, and one person in the next generation, who collect most of the income, according to family members and people close to them, who were granted anonymity to discuss private matters. That works out to less than $2 million a year apiece.

Smaller amounts go to the more than two dozen children of the older generation, some of whom have adult children of their own.

Most of their Dow Jones stock is in dozens of trusts, typically with three trustees who must vote unanimously to sell. In most cases, a trust has one family member trustee, and two of the family’s lawyers or bankers.

The eight older generation members hold the major trusteeships. In some cases, their trusteeships give them voting rights over their own stock, that of their siblings, their children, even their cousins. In theory, the most powerful trustees could vote shares against their owners’ wishes, or the lawyers and bankers could defy family members.

“Honestly, all of that could happen or none of it — there’s no way to tell,” said a member of the next-oldest generation.

If the Bancrofts overwhelmingly reject the deal and it falls through, what happens next is unclear. Some analysts and bankers have predicted that the Dow Jones share price will plummet below where it was earlier this year. Others have said it will remain relatively high — though probably nowhere near $60 — as investors anticipate that Mr. Murdoch or someone else to make another run at the company.

A previous family meeting, held on May 23 at the Boston offices of Hemenway & Barnes, the law firm which oversees the trusts, was unusually frank and contentious for the Bancrofts. Several members of the older generation, opposed to entering into talks with the News Corporation, did not attend.

A pivotal figure in the decision could be Christopher Bancroft, who at times has spoken strongly against selling and, like his cousin Leslie Hill, has been looking for alternative investors to block Mr. Murdoch.

Mr. Bancroft seems to be the only person who is clearly the dominant player in one of the family’s three branches, while power is more diffuse in the other two. Family members and people close to them say his two siblings mostly eschew company business and defer to his judgment, though his brother, Hugh Bancroft III, is said to be open to selling.

In addition, Christopher Bancroft has voting power over most of his branch’s stock, as either trustee or owner — 14.5 percent of the total Dow Jones shareholder vote as of January. Only one other family had similar voting power, his cousin, Jane Cox MacElree, at 14.8 percent; no one else had more than 4.2 percent.

Mr. Bancroft is, like Ms. Hill, also one of three family members who sit on the Dow Jones board and have been involved in talks with the News Corporation.

Family members sometimes describe him as mercurial and dismissive, and some were piqued in May when he skipped a family gathering, and then wavered on whether to release a family statement agreeing to meet Mr. Murdoch.

But neighbors and associates in Texas describe Mr. Bancroft as affable and gracious, a man without airs who loves to talk business and donates to many charities, but is determined not to attract attention.

He heads an investment firm, Bancroft Operations, and lives in Argyle, a semi-rural enclave northwest of Dallas that is also home to Rex Tillerson, chief executive of Exxon Mobil, and Jeff Fegan, chief executive of Dallas/Fort Worth International Airport. Mr. Bancroft’s spacious home near the Denton Country Club, valued at more than $2 million, is smaller than others on his street.

“He’s been a very good advisor to me” on business, said Chris Curtis, who owns GoVision, a company that supplies giant video screens for special events. “He’s a smart guy, he’s witty,” Mr. Curtis said, but, “If you polled this community, very few people know about him.”

Mr. Bancroft and his wife, Sue, a former professional bassoonist, have three children. For many years, they have sponsored a series of free concerts by members of the Dallas Symphony Orchestra and the Dallas Opera’s orchestra.

Rogene Russell, artistic director of Fine-Arts Chamber Players, said she and others have wanted to nominate the Bancrofts for various honors, but that the Bancrofts discouraged such recognition. She said that when a local arts center flooded, Mr. Bancroft wrote a check, but asked the center not to publicize his gift.

Another love is Dow Jones. “I think that’s dear to his heart,” said a friend in Argyle, who requested anonymity because his employer had not authorized him to speak to the press. “He doesn’t want to sell, even as much money as Murdoch is throwing at him.”
Irvine O. Hockaday, Jr., a former Dow Jones board member, said, “My sense of Chris Bancroft is that he is understated, and therefore can be underestimated.”

“He is an individual who wants to do the right thing,” Mr. Hockaday said, “and he is trying to define what the right thing is.”

Gretel C. Kovach contributed reporting from Dallas and Clifford Krauss from Houston.
http://www.nytimes.com/2007/07/23/bu...3bancroft.html





I, Rupert, Will Not ... That Is, Until I Do
Richard Pérez-Peña

IMAGINE buying your dream car and signing a contract that says you will not drive it. The car comes with a driver, and you agree to keep him and never tell him where to go. You can get rid of the driver and hire a new one, but only if your neighbors approve.

Now imagine that you’ve made yourself famous, wealthy and powerful by spending half a century driving cars. How long before you reach for those keys? And how hard will anyone try to stop you?

In the media world, Rupert Murdoch is what you might call a motivated driver. He buys, or creates from scratch, newspapers, television networks and satellite systems, and his hands-on management style leaves no doubt as to who is in charge.

So as his News Corporation moves toward buying Dow Jones & Company and its centerpiece, The Wall Street Journal, and even as Mr. Murdoch agrees to a pact ostensibly intended to keep him from dictating what goes into The Journal, the question is not so much whether he will end up behind the wheel, but when.

It’s just a matter of time before operational control is handed over, say lawyers, media analysts and journalists, who cited plenty of reasons why the agreement on editorial independence would not prevent Mr. Murdoch from putting his stamp on the paper.

Dow Jones’s tentative deal with News Corporation provides that the current managing editors of The Journal and Dow Jones Newswires, and the editorial page editor, would remain in place and would have sole authority over content and news staffing.

News Corporation could remove any of those top editors, or appoint someone new to any of those posts, only with the consent of a special committee whose five original members would be chosen jointly by News Corporation and the Bancroft family, which currently holds a controlling stake in Dow Jones.

No editor or committee member will last forever, however, and the agreement gives News Corporation, and no one else, veto power over future committee members. Assuming that Mr. Murdoch, 76, enjoys longevity like that of his mother, who is 98, he has time to bring the whole system under his control. (And if he doesn’t, then presumably the heir to his empire will.)

Yet many experts also surmise that while Mr. Murdoch’s influence on the pages of The Journal is inevitable, it will matter less than people think, especially in the short run. His primary business strategy in buying Dow Jones is to use The Journal and the newswires as a source of content and credibility for the Fox Business Channel, which he plans to introduce in October.

“He’s saying, ‘I like this paper, I’ve paid a lot of money for it, I think The Journal and its brand are a valuable part of my global strategy,’ and he’s not going to mess that up,” said Anne K. Gordon, a partner at Dubilier & Company, a private investment firm, and a former managing editor of The Philadelphia Inquirer. She said people who predict that Mr. Murdoch would intervene aggressively, in damaging ways, “do not give him enough credit.”

Ken Doctor, a media analyst with Outsell, a business research firm, said that when it comes to changing The Journal, “I also think he’ll go slow, at least at first,” because Mr. Murdoch “doesn’t want to jeopardize the brand he’s buying.”

Even so, he said, “I find it just about impossible to imagine that if he really wants to make changes, any agreement will hold him back for very long.”

The tentative deal still must pass muster with the Bancrofts, some of whom have accused Mr. Murdoch of warping news coverage for political or business reasons. It is impossible to describe exactly how the controls will work, experts say, in part because they know of no real precedent for the structure it puts in place, in media companies or any other business.

“The agreement would be an obstacle to editorial interference,” said Louis Ureneck, chairman of the journalism department at Boston University, and a former deputy managing editor of The Philadelphia Inquirer. “But it’s not a firewall. The composition of the special committee would be the result of negotiation and compromise, since both parties need to agree to it, and that invites political compromise at the outset.”

Mr. Murdoch would also be able to set the editors’ budgets, and he has talked of pumping more money into the Journal’s news department, at a time when many newspapers are struggling and cutting their staffs. Under those circumstances, any owner would want some say in what kind of coverage is beefed up in the process.

The special committee would have legal standing to take News Corporation to court to stop newsroom meddling, and would be empowered to investigate the company’s handling of The Journal, but the committee itself would rely on News Corporation for its financing. What no one can guess — at least not until the committee is named — is how much stomach the group would have for challenging Mr. Murdoch, particularly if his perceived infractions are minor ones.

Mr. Murdoch has said he wants fewer long stories in The Journal on weekdays and more coverage of national affairs, hardly anyone’s idea of journalistic felonies. More troubling to people at the newspaper is his statement that he would like The Journal to be more of a counterweight to The New York Times, which he considers liberal.

As vacancies occur in the special committee, the committee itself would fill them, subject to the News Corporation veto. So eventually, people who have studied the agreement say, it will be Mr. Murdoch’s committee, and The Journal will be run by editors chosen by him.

“And what did we expect?” Ms. Gordon asked. “Murdoch would certainly not be the first owner to want things his way in the newsroom. And editors do what they’ve always done — they protest and the moment passes, they give in, or they quit.”
http://www.nytimes.com/2007/07/22/we...w/22perez.html





Ex-PM Spoke to Murdoch Before War
PA

Former Prime Minister Tony Blair spoke to media mogul Rupert Murdoch three times in the 10 days before the outbreak of the Iraq war - once on the eve of the US-led invasion - it has been disclosed.

The telephone conversations were among six calls between the two men detailed by the Cabinet Office in response to a Freedom of Information request from Liberal Democrat peer Lord Avebury.

The information was released on the day after Mr Blair handed over power to Gordon Brown last month, after a three-and-a-half year battle by the Lib Dem peer. Lord Avebury waited until now to publicise the release.

No details were released of what subjects Mr Blair and the News Corporation chairman discussed in the calls on March 11, 13 and 19 2003, ahead of the launch of US-led military action in Iraq on March 20. Further conversations took place on January 29, April 25 and October 3 2004.

The Cabinet Office response also listed meetings between Mr Blair and Express Newspapers publisher Richard Desmond on January 29 and September 3 2003 and February 23 2004. The release covered the PM's phone conversations and meetings with the two men between September 2002 and April 2005.

Lord Avebury initially asked for the dates of Mr Blair's phone calls and meetings with Mr Murdoch and Mr Desmond in October 2003. When this request was rebuffed by the then leader of the Lords, Baroness Amos, he made a complaint under Freedom of Information legislation.

In 2005, Downing Street responded that the information was exempt from disclosure because of the need for the Prime Minister to be able to undertake free and frank discussions. The Cabinet Office said that releasing the timing of the PM's contacts with individuals could be prejudicial to the effective conduct of public affairs because it might lead to the content of their discussions being disclosed.

Their arguments for secrecy were backed in a July 2006 ruling by Information Commissioner Richard Thomas, who said that the timing of any calls need only disclosed if they were official contacts, with civil servants taking minutes.

The peer lodged an appeal last August with the Information Tribunal. On June 28 this year, a day before evidence was due to be served on the parties to the case, the Cabinet Office made the surprise announcement that it would release the information.

Lord Avebury said: "This is a welcome blow for the cause of freedom of information, but it shouldn't have taken so much time and effort to extract information that was so clearly of great public interest. Rupert Murdoch has exerted his influence behind the scenes on a range of policies on which he is known to have strong views, including the regulation of broadcasting and the Iraq war. The public can now scrutinise the timing of his contacts with the former Prime Minister, to see whether they can be linked to events in the outside world."
http://www.guardian.co.uk/uklatest/s...788938,00.html





Congressman Denied Access To Post-Attack Continuity Plans
Jeff Kosseff

Constituents called Rep. Peter DeFazio's office, worried there was a conspiracy buried in the classified portion of a White House plan for operating the government after a terrorist attack.

As a member of the House Committee on Homeland Security, DeFazio, D-Ore., is permitted to enter a secure "bubbleroom'' in the Capitol and examine classified material. So he asked the White House to see the secret documents.

On Wednesday, DeFazio got his answer: DENIED.

"I just can't believe they're going to deny a member of Congress the right of reviewing how they plan to conduct the government of the United States after a significant terrorist attack,'' DeFazio said.

Homeland Security Committee staffers told his office that the White House initially approved his request, but it was later quashed. DeFazio doesn't know who did it or why.

"We're talking about the continuity of the government of the United States of America,'' DeFazio said. "I would think that would be relevant to any member of Congress, let alone a member of the Homeland Security Committee.''

Bush administration spokesman Trey Bohn declined to say why DeFazio was denied access: "We do not comment through the press on the process that this access entails. It is important to keep in mind that much of the information related to the continuity of government is highly sensitive.''

Norm Ornstein, a legal scholar who studies government continuity at the conservative American Enterprise Institute, said he ``cannot think of one good reason'' to deny access to a member of Congress who serves on the Homeland Security Committee.

"I find it inexplicable and probably reflective of the usual knee-jerk overextension of executive power that we see from this White House,'' Ornstein said.

This is the first time DeFazio has been denied access to documents. DeFazio has asked Homeland Security Committee Chairman Bennie Thompson, D-Miss., to help him access the documents.

"Maybe the people who think there's a conspiracy out there are right,'' DeFazio said.
http://www.newhouse.com/congressman-...ity-plans.html





Wikipedia and the Intelligence Services

Is the Net's popular encyclopedia marred by disinformation?
Ludwig De Braeckeleer

While researching my next article about the Lockerbie bombing, I witnessed an incident that made me wonder whether intelligence agents had infiltrated Wikipedia.

Anyone who knows the universal success of Wikipedia will immediately grasp the importance of the issue. The fact that most Internet search engines, such as Google, give Wikipedia articles top ranking only raises the stakes to a higher level.

The Incident

In the aftermath of the Lockerbie bombing in 1988, the finger of suspicion quickly pointed to a Syria-based Palestinian organization -- the Popular Front for the Liberation of Palestine, General Command (PFLP-GC) -- hired by Iran. The terrorist group was created by a former Syrian army captain, Ahmed Jibril, who broke away from the Popular Front for the Liberation of Palestine (PFLP) in 1968.

I had learned from a recently released U.S. National Archives file that Shin Bet, the Israeli Security Agency, had infiltrated the PFLP and helped the Entebbe hijackers (Israeli commandos rescued the hostages in Uganda in 1976), so I wanted to learn more about the link between the PFLP and the PFLP-GC. I also wanted to learn more about allegations made by David Colvin, the first secretary of the British Embassy in Paris, concerning the rather bizarre collaboration between the PFLP and the Shin Bet.

As I could not locate the article in which I had learned about the allegations, I consulted the article on the Entebbe Operation on Wikipedia, where I knew the story had been noted. To my surprise, I found that all references to the alleged collaboration between the PFLP and the Shin Bet had been suppressed. Moreover, it is no longer possible to edit the page.

A Long, Undistinguished History

Conducting false flag operations and planting disinformation in the mainstream media have long belonged to the craft of the spies. In the months preceding the 1953 overthrow of Iranian Prime Minister Mohammed Mossadegh, U.S. and U.K. intelligence agencies used both techniques abundantly.

A copy of the CIA's secret history of the coup surfaced in 2000. Written in 1954 by the Princeton professor who oversaw the operation, the story reveals that agents from the CIA and SIS (the American and British intelligence services) "directed a campaign of bombings by Iranians posing as members of the Communist Party, and planted articles and editorial cartoons in newspapers."

The section of the report concerning the media speaks volumes: "The CIA was apparently able to use contacts at the Associated Press to put on the newswire a statement from Tehran about royal decrees that the CIA itself had written. But mostly, the agency relied on less direct means to exploit the media.

"The Iran desk of the State Department was able to place a CIA study in Newsweek, using the normal channel of desk officer to journalist. The article was one of several planted press reports that, when reprinted in Tehran, fed the war of nerves against Iran's prime minister, Mohammed Mossadegh," the document said.

Half a century later, the technique of disinformation is as important as ever to intelligence agencies. In the aftermath of the attacks of Sept. 11, 2001, the Pentagon set up the Defense Department's Office of Strategic Influence with a mission "to provide news items and false information directly to foreign journalists and others to bolster U.S. policy and the war on terrorism."

The new office attracted so much criticism that the Bush administration eventually shut it down in February 2002. Even defense officials publicly denounced the dangers of such a program, which could have left the department without a shred of credibility.
"We shouldn't be in that business. Leave the propaganda leaks to the CIA, the spooks [secret agents]," a defense official said.

Is Wikipedia Harboring a Secret Agent?

According to clues accumulated by ordinary citizens around the world, it could be that the CIA and other intelligence agencies are riding the information wave and planting disinformation on Wikipedia. If so, tens of thousands of innocent and unwitting citizens around the world are translating and propagating their lies, providing these agencies with a universal news network.

The Salinger Investigation of the Pan Am 103 Bombing

Pierre Salinger was White House press secretary to Presidents John Kennedy and Lyndon Johnson. Salinger also served as U.S. Senator from California and a campaign manager for Robert Kennedy.

But Salinger is also famous for his investigative journalism. Hired by ABC News as its Paris bureau chief in 1978, he became the network's chief European correspondent in 1983.

During his distinguished career, Salinger broke important stories, such as the secret negotiations by the U.S. government with Iran to free American hostages in 1979-80 and the last meeting between U.S. Ambassador April Glaspie and Saddam Hussein in 1990, during which she led the Iraqi president to believe that the U.S. would not react to an invasion of Kuwait.

Salinger, who was based in London, spent a considerable amount of time and energy investigating the bombing of Pan Am 103 over Lockerbie. He and his collaborator, John Cooley, hired a young graduate, Linda Mack, to help in the investigation.

"I know that these two Libyans had nothing to do with it. I know who did it and I know exactly why it was done," Salinger said during his testimony at the Zeist trial, where one of the Libyans was convicted of murdering the 270 victims.

"That's all? You're not letting me tell the truth. Wait a minute; I know exactly who did it. I know how it was done," Salinger replied to the trial judge, Lord Sutherland, who simply asked him to leave the witness box.

"If you wish to make a point you may do so elsewhere, but I'm afraid you may not do so in this court," Lord Sutherland interrupted.

Searching for the True Identity of 'Slim Virgin'

Slim Virgin had been voted the most abusive administrator of Wikipedia. She upset so many editors that some of them decided to team up to research her real life identity.

Attempts to track her through Internet technology failed. This is suspicious in itself as the location of normal Internet users can easily be tracked. According to a team member, Slim Virgin "knows her way around the Internet and covered her tracks with care."

Daniel Brandt of the Wikipedia Review and founder of Wikipedia-Watch.org patiently assembled tiny clues about Slim Virgin and posted them on these Web sites. Eventually, two readers identified her. Slim Virgin was no other than Linda Mack, the young graduate Salinger hired.

John K. Cooley, the collaborator of Salinger in the Lockerbie investigation, posted the following letter to Brandt on Wikipedia Review, which has been set up to discuss specific editors and editing patterns and general efforts by editors to influence or direct content in ways that might not be in keeping with Wikipedia policy:

She claimed to have lost a friend/lover on pan103 and so was anxious to clear up the mystery. ABC News paid for her travel and expenses as well as a salary'

Once the two Libyan suspects were indicted, she seemed to try to point the investigation in the direction of Qaddafi [Libyan President Col. Muammar al-Qaddafi], although there was plenty of evidence, both before and after the trials of Megrahi and Fhimah in the Netherlands, that others were involved, probably with Iran the commissioning power. [In 2001, Abdelbaset Ali Mohmed Al Megrahi was convicted of murder and sentenced to life in prison; Lamin Khalifah Fhimah was acquitted.]

Salinger came to believe that [first name redacted but known to be Linda] was working for [name of intelligence agency redacted but known to be Britain's MI5] and had been from the beginning; assigned genuinely to investigate Pan Am 103, but also to infiltrate and monitor us.
Soon after Cooley wrote to Brandt, Linda Mack contacted him and asked him not to help Brandt in his efforts to expose her. All doubts about Slim Virgin's true identity had vanished. Today, Linda Mack is rumored to reside in Alberta, Canada, under the name of Sarah McEwan.
http://english.ohmynews.com/articlev...74006&rel_no=1





Malaysia Cracks Down on Bloggers
BBC

The Malaysian government has warned it could use tough anti-terrorism laws against bloggers who insult Islam or the country's king.

The move comes as one of Malaysia's leading online commentators has been questioned by police following a complaint by the main governing party.

The new rules would allow a suspect to be detained indefinitely, without being charged or put on trial.

But officials insist the law is not intended to strangle internet freedom.

Online critics

Deputy Prime Minister Najib Razak told The Straits Times that the move was aimed at getting some moderation in postings on the internet, especially on sensitive issues: "Some people feel that they have crossed the line, in making racist remarks," he said.

But the BBC's Jonathan Kent in Kuala Lumpur says the government also appears increasingly concerned about the growing online criticism of its record.

Raja Petra Kamarudin, the editor of one of Malaysia's most popular political websites, Malaysia Today, turned himself in to police on Wednesday, to answer allegations that he had mocked Islam and threatened racial harmony.

Raja Petra is known for his frequent criticism of Prime Minister Abdullah Ahmad Badawi and other government figures.

"I was alleged to have insulted the king, and also Islam and incite racial hatred, so I am going in there to reply to all these charges. I promise I'm going to give them a hell of a tough time," he told the BBC before he turned himself in.

He defended his website, saying: "Many people, especially the non-Malays in this country, do not have a forum to air their views."

"We should not deny these people a chance to vent their feelings," he said.

Malaysia Today is believed to attract around a quarter of a million visitors a day, giving it more readers than most Malaysian newspapers.

The BBC's correspondent says that with a general election on the horizon, the government seems keen to send a signal to its online critics that it will only tolerate so much.
http://news.bbc.co.uk/go/pr/fr/-/2/h...ic/6915002.stm





Most Vote Machines Lose Test to Hackers
John Wildermuth

State-sanctioned teams of computer hackers were able to break through the security of virtually every model of California's voting machines and change results or take control of some of the systems' electronic functions, according to a University of California study released Friday.

The researchers "were able to bypass physical and software security in every machine they tested,'' said Secretary of State Debra Bowen, who authorized the "top to bottom review" of every voting system certified by the state.

Neither Bowen nor the investigators were willing to say exactly how vulnerable California elections are to computer hackers, especially because the team of computer experts from the UC system had top-of-the-line security information plus more time and better access to the voting machines than would-be vote thieves likely would have.

"All information available to the secretary of state was made available to the testers,'' including operating manuals, software and source codes usually kept secret by the voting machine companies, said Matt Bishop, UC Davis computer science professor who led the "red team" hacking effort, said in his summary of the results.

The review included voting equipment from every company approved for use in the state, including Sequoia, whose systems are used in Alameda, Napa and Santa Clara counties; Hart InterCivic, used in San Mateo and Sonoma Counties; and Diebold, used in Marin County.

Election Systems and Software, which supplied equipment to San Francisco, Contra Costa, Solano and Los Angeles counties in last November's election, missed the deadline for submitting the equipment, Bowen said. While their equipment will be reviewed, Bowen warned that she has "the legal authority to impose any condition'' on its use.

Bowen said in a telephone news conference Friday that the report is only one piece of information she will use to decide which voting systems are secure enough to use in next February's presidential primary election.

If she is going to decertify any of the machines, she must do it by Friday, six months before the Feb. 5 vote.

A day-long hearing in Sacramento on Monday will give the UC investigators a chance to present their finding and allow the various voting machine companies to present a response. The hearing also will be open for comments from the public.

The study was designed to discover vulnerabilities in the technology of voting systems used in the state. It did not deal with any physical security measures that counties might take and "made no assumptions about constraints on the attackers,'' Bishop said.

"The testers did not evaluate the likelihood of any attack being feasible,'' he added.

Some county elections officials in the state were among the most critical of the study, saying they worry that they could be forced to junk millions of dollars in voting machines if Bowen decertifies them for the February election.

Letting the hackers have the source codes, operating manuals and unlimited access to the voting machines "is like giving a burglar the keys to your house,'' said Steve Weir, clerk-recorder of Contra Costa County and head of the state Association of Clerks and Election Officials.

The study also determined that many voting systems have flaws that make it difficult for blind voters and those with other disabilities to cast ballots.

During her election campaign last year, Bowen made it clear she had little confidence in the security of electronic voting machines and vowed to review their use in the state.

"Voting systems are tools of our democracy,'' she said Friday. "We want to ensure that the voting systems used in the state are secure, accurate, reliable and accessible to all. This (study result) is not a big deal to me. It's a big deal for everyone in the country.''

Vendors and other advocates of electronic voting machines have suggested that because of Bowen's well-publicized concerns, she has her thumb on the scale when it comes to reviewing the systems. But the secretary of state said she purposely avoided the scientists doing the study.

Bowen admitted that she's "enough of a geek" that she would have enjoyed working closely with the study, but "I've stayed out of the way ... It's not my review,'' she said. "I didn't want (the researchers) to be influenced by my questions.''

Weir said the UC study "is only a hologram of what could be done technically without considering the real-world mitigation,'' the locks, access cards and other physical security measures typically used.

The study found "absolutely no evidence of any malicious source code anywhere,'' he added. "They found nothing that could cast doubt on the results of elections.''

Bishop, however, said he was surprised by the weakness of the security measures, both physical and electronic, protecting the voting systems. His team of hackers found ways to get into the systems not only through the high-tech equipment in election headquarters but also through the machines in the polling places.

If the testers had had more time, they would have found more flaws, he added.

"The vendors appeared to have designed systems that were not high assurance (of security)," said Bishop, a recognized expert on computer security. "The security seems like it was added on.''
http://sfgate.com/cgi-bin/article.cg.../28/VOTING.TMP





Agreement Reached on Bill Banning Paperless Voting
Adam Thomas

Democrats and Republicans in the US House of Representatives agreed today on a compromise that will push through a bill banning paperless voting machines and requiring a voter-verified paper record for every vote in the country, after government sanctioned hackers showed how they could break into all three of the top voting systems used in California.

The agreement by Majority Leader Steny Hoyer and Rep. Rush Holt of New Jersey will advance H.R. 811, the "Voter Confidence and Increased Accessibility Act of 2007," (H.R. 811) which amends the Help America Vote Act of 2002 to require a voter-verified permanent paper ballot.

"Today's announcement gives Americans renewed hope that Congress will soon put an end to unaccountable, unverifiable, and inaccessible voting," said Ralph G. Neas, president of the advocacy group People For the American Way. "Millions of voters were disenfranchised in recent elections, and millions of others have wondered if their votes were correctly counted. That is intolerable. Given how much is at stake in the coming elections, passing this legislation should be the nation's top domestic legislative priority."

The amendment ensures that by the 2008 presidential elections there will be a paper record for all votes cast in federal elections, and makes the paper ballot the ballot of record for purposes of a recount and puts in place a system of mandatory random audits.

On technical aspects, the bill prohibits wireless devices in voting machines, and makes voting system source code subject to examination should discrepancies arise.

The agreement obligates the provision for emergency paper ballots should voting machines break down or fail in any way, mandates upgrades to provide durable paper records and enhanced accessible technology by 2012.
http://pressesc.com/news/79928072007...perless-voting





Bush Wants Terrorism Law Updated
Deb Riechmann

President Bush wants Congress to modernize a law that governs how intelligence agencies monitor the communications of suspected terrorists.

``This law is badly out of date,'' Bush said Saturday in his weekly radio address.

The Foreign Intelligence Surveillance Act, or FISA, provides a legal foundation that allows information about terrorists' communications to be collected without violating civil liberties.

Democrats want to ensure that any changes do not give the executive branch unfettered surveillance powers.

Bush noted that terrorists now use disposable cell phones and the Internet to communicate, recruit operatives and plan attacks; such tools were not available when FISA passed nearly 30 years ago. He also cited a recently released intelligence estimate that concluded al-Qaida is using its growing strength in the Middle East to plot attacks on U.S. soil.

``Our intelligence community warns that under the current statute, we are missing a significant amount of foreign intelligence that we should be collecting to protect our country,'' Bush said. ``Congress needs to act immediately to pass this bill, so that our national security professionals can close intelligence gaps and provide critical warning time for our country.''

The 1978 law set up a court that meets in secret to review applications from the FBI, the National Security Agency and other agencies for warrants to wiretap or search the homes of people in the United States in terrorist or espionage cases.

Shortly after the Sept. 11 attacks, Bush authorized the NSA to spy on calls between people in the U.S. and suspected terrorists abroad without FISA court warrants. The administration said it needed to act more quickly than the court could. It also said the president had inherent authority under the Constitution to order warrantless domestic spying.

After the program became public and was challenged in court, Bush put it under FISA court supervision this year.

The national intelligence director, in a letter Wednesday to the House intelligence committee, stressed the need to be able to collect intelligence about foreign terrorists overseas. Mike McConnell said intelligence agencies should be able to do that without requirements imposed by an ``out of date'' law.

``Simply put, in a significant number of cases, we are in the unfortunate position of having to obtain court orders to effectively collect foreign intelligence about foreign targets located overseas,'' he wrote the committee chairman, Rep. Silvestre Reyes, D-Texas.

Caroline Fredrickson, director of the Washington legislative office of the American Civil Liberties Union, contends the White House is asking for more power to conduct warrantless domestic and international surveillance.

``The administration claims the Foreign Intelligence Surveillance Act must be 'modernized.' Actually, it needs to be followed,'' she said. ``The reality is, their proposal would gut FISA.''

The ACLU said the legislation backed by the administration would give immunity from criminal prosecution and civil liability for the telecommunication companies that participate in the NSA program. The ACLU urged lawmakers to find out the full extent of current intelligence gathering under FISA before making changes.

``The only thing more outrageous than the administration's call for even more unfettered power is a Congress that would consider giving it to them,'' Frederickson said.

In a statement this past week, Reyes said: ``To date, our review has uncovered numerous inefficiencies in the current FISA system. It is not yet clear whether changes to the statute are necessary, but if they are required and justified, we will address them.''

The House Republican leader, Rep. John Boehner of Ohio, says Democrats on delaying necessary changes.

``Rather than learning the lessons of September 11 - that we need to break down the bureaucratic impediments to intelligence collection and analysis - Democrats have stonewalled Republican attempts to modernize FISA and close the terrorist loophole,'' he said Saturday.
http://www.guardian.co.uk/uslatest/s...812353,00.html





Mining of Data Prompted Fight Over Spying
Scott Shane and David Johnston

A 2004 dispute over the National Security Agency’s secret surveillance program that led top Justice Department officials to threaten resignation involved computer searches through massive electronic databases, according to current and former officials briefed on the program.

It is not known precisely why searching the databases, or data mining, raised such a furious legal debate. But such databases contain records of the phone calls and e-mail messages of millions of Americans, and their examination by the government would raise privacy issues.

The N.S.A.’s data mining has previously been reported. But the disclosure that concerns about it figured in the March 2004 debate helps to clarify the clash this week between Attorney General Alberto R. Gonzales and senators who accused him of misleading Congress and called for a perjury investigation.

The confrontation in 2004 led to a showdown in the hospital room of then Attorney General John Ashcroft, where Mr. Gonzales, the White House counsel at the time, and Andrew H. Card Jr., then the White House chief of staff, tried to get the ailing Mr. Ashcroft to reauthorize the N.S.A. program.

Mr. Gonzales insisted before the Senate this week that the 2004 dispute did not involve the Terrorist Surveillance Program “confirmed” by President Bush, who has acknowledged eavesdropping without warrants but has never acknowledged the data mining.

If the dispute chiefly involved data mining, rather than eavesdropping, Mr. Gonzales’ defenders may maintain that his narrowly crafted answers, while legalistic, were technically correct.

But members of the Senate Intelligence Committee, who have been briefed on the program, called the testimony deceptive.

“I’ve had the opportunity to review the classified matters at issue here, and I believe that his testimony was misleading at best,” said Senator Russ Feingold, Democrat of Wisconsin, joining three other Democrats in calling Thursday for a perjury investigation of Mr. Gonzales.

“This has gone on long enough,” Mr. Feingold said. “It is time for a special counsel to investigate whether criminal charges should be brought.”

The senators’ comments, along with those of other members of Congress briefed on the program, suggested that they considered the eavesdropping and data mining so closely tied that they were part of a single program. Both activities, which ordinarily require warrants, were started without court approval as the Bush administration intensified counterterrorism efforts soon after the Sept. 11 attacks.

A half-dozen officials and former officials interviewed for this article would speak only on the condition of anonymity, in part because unauthorized disclosures about the classified program are already the subject of a criminal investigation. Some of the officials said the 2004 dispute involved other issues in addition to the data mining, but would not provide details. They would not say whether the differences were over how the databases were searched or how the resulting information was used.

Nor would they explain what modifications to the surveillance program President Bush authorized to head off the threatened resignations by Justice Department officials.

An agency spokesman declined to comment on the data mining issue but referred a reporter to a statement issued earlier that Mr. Gonzales had testified truthfully.

The Justice Department announced in January that eavesdropping without warrants under the Terrorist Surveillance Program had been halted, and that a special intelligence court was again overseeing the wiretapping. The N.S.A., the nation’s largest intelligence agency, generally eavesdrops on communications in foreign countries. Since the 1978 passage of the Foreign Intelligence Surveillance Act, known as FISA, any eavesdropping to gather intelligence on American soil has required a warrant from the special court.

In addition, court approval is required for the N.S.A. to search the databases of telephone calls or e-mail records, usually compiled by American phone and Internet companies and including phone numbers or e-mail addresses, as well as dates, times and duration of calls and messages. Sometimes called metadata, such databases do not include the content of the calls and e-mail messages — the actual words spoken or written.

Government examination of the records, which allows intelligence analysts to trace relationships between callers and identify possible terrorist cells, is considered less intrusive than actual eavesdropping. But the N.S.A.’s eavesdropping targeted international calls and e-mail messages of people inside the United States, while the databases contain primarily domestic records. The conflict in 2004 appears to have turned on differing interpretations of the president’s power to bypass the FISA law and obtain access to the records.

President Bush has asserted that both his constitutional powers as commander in chief and the authorization for the use of military force passed by Congress after the Sept. 11 attacks gave him legal justification for skirting the warrant requirement. Critics have called the surveillance illegal because it does not comply with the FISA law.

The first known assertion by administration officials that there had been no serious disagreement within the government about the legality of the N.S.A. program came in talks with New York Times editors in 2004. In an effort to persuade the editors not to disclose the eavesdropping program, senior officials repeatedly cited the lack of dissent as evidence of the program’s lawfulness.

In December 2005, The Times published articles describing the program, the data mining and the internal legal debate. The newspaper reported that the N.S.A. had combed large volumes of telephone and Internet traffic in search of patterns that might point to terrorism suspects.

Civil liberties groups, Congressional Democrats and some Republicans reacted to the disclosures with outrage, accusing the administration of operating an illegal surveillance program inside the United States. The uproar grew when USA Today reported in May 2006 more details of the N.S.A.’s acquisition from telephone companies of the phone call databases. In response to the articles, Mr. Bush confirmed the eavesdropping, saying it was limited to communications in and out of the United States involving people suspected of ties to Al Qaeda. He did not, however, confirm the data mining, nor has any other official done so publicly.

Mr. Gonzales defended the surveillance in an appearance before the Senate Judiciary Committee in February 2006, saying there had been no internal dispute about its legality. He told the senators: “There has not been any serious disagreement about the program that the president has confirmed. There have been disagreements about other matters regarding operations, which I cannot get into.”

By limiting his remarks to “the program the president has confirmed,” Mr. Gonzales skirted any acknowledgment of the heated arguments over the data mining. He said the Justice Department had issued a legal analysis justifying the eavesdropping program.

Mr. Bush and other officials also have repeatedly cited Justice Department reviews as evidence of their care in overseeing the program, never mentioning the bitter conflict that unfolded behind the scenes.

Mr. Gonzales’s 2006 testimony went unchallenged publicly until May of this year, when James B. Comey, the former deputy attorney general, described the March 2004 confrontation to the Senate Judiciary Committee.

Mr. Comey had refused to sign a reauthorization for the N.S.A. program when he was standing in for Mr. Ashcroft, who was hospitalized for gall bladder surgery.

Mr. Comey described an intense fight that prompted the top leaders of the Justice Department to consider resigning in protest. Mr. Gonzales and Mr. Card visited the bedside of Mr. Ashcroft, who was in pain and under sedation, to seek his signature on the reauthorization.

Mr. Ashcroft refused to do so. Mr. Comey testified that he thought the White House officials were trying to take advantage of a sick man.

On Tuesday, to respond to Mr. Comey’s account, Mr. Gonzales testified in a Senate appearance that he went to the hospital only after meeting with Congressional leaders about the impending deadline for the reauthorization. He said the consensus was that the program should go on, so he felt he had no choice but to seek Mr. Ashcroft’s approval.

At the hearing, Mr. Gonzales faced harsh questioning about why he had not previously acknowledged the 2004 standoff. In response, he asserted once again that there had not been disagreements about the surveillance program, insisting that the dispute involved “other intelligence activities.”

After the hearing, Senator Patrick J. Leahy, Democrat of Vermont and chairman of the Judiciary Committee, sent Mr. Gonzales a transcript of his testimony with pointed instructions — to “correct, clarify or supplement your answers so that, consistent with your oath, they are the whole truth.”
http://www.nytimes.com/2007/07/29/washington/29nsa.html





Local news

Judge Rules Against Government In Warrantless Surveillance Cases
AP

A federal judge in California ruled Tuesday against the federal government's attempts to stop investigations in five states, including Connecticut, of President Bush's domestic spying program.

U.S. District Chief Judge Vaughn Walker last winter was assigned to hear arguments in the federal government's attempt to stop Maine regulators from forcing Verizon to say whether it provided customer call records to the government without a warrant. Similar cases in Missouri, New Jersey, Connecticut and Vermont were combined with the Maine case.

The Department of Justice was seeking to stop the investigations of phone records based on the Supremacy Clause of the U.S. Constitution, the foreign affairs power of the federal government and the state secrets privilege.

In a 35-page ruling, Walker dismissed the government's request to stop the investigations, ruling that neither the Supremacy Clause nor the foreign affairs power of the government prevented a state from asking about phone records.

The judge, however, did not rule on the state secrets' argument, instead reserving judgment until a federal court in California rules on a similar but separate case that is pending.

Maine Attorney General Steve Rowe said his office and the PUC will review the decision before deciding what steps to take next. But the ruling, he said, "goes a long way towards protecting the privacy of Maine people."

"In an era of data breaches and identity theft, states are working to protect citizens' sensitive personal information," he said. "The federal government should be a partner in this effort instead of throwing up barriers by filing lawsuits."

In Connecticut, commissioners at the state Department of Public Utility Control maintain they have authority to investigate the possible release of the records by Verizon and AT&T.
http://hosted.ap.org/dynamic/stories...07-24-18-49-39





MySpace Deletes 29,000 Sex Offenders

Popular Internet social network MySpace said on Tuesday it detected and deleted 29,000 convicted sex offenders on its service, more than four times the figure it had initially reported.

The company, owned by media conglomerate News Corp, said in May it had deleted about 7,000 user profiles that belonged to convicted offenders. MySpace attracts about 60 million unique visitors monthly in the United States.

The new information was first revealed by U.S. state authorities after MySpace turned over information on convicted sex offenders it had removed from the service.

"The exploding epidemic of sex offender profiles on MySpace -- 29,000 and counting -- screams for action," Connecticut Attorney General Richard Blumenthal said in a statement.

Blumenthal, who led a coalition of state authorities to lobby MySpace for more stringent safeguards for minors, and other state AGs have demanded the service begin verifying a user's age and require parental permission for minors.

The minimum age to register on MySpace is 14.

"We're pleased that we've successfully identified and removed registered sex offenders from our site and hope that other social networking sites follow our lead," MySpace Chief Security Officer Hemanshu Nigam said in a statement.

The service has come under attack over the past year after some of its young members fell prey to adult predators posing as minors. The families of several teenage girls sexually assaulted by MySpace members sued the service in January for failing to safeguard its young members.

Late last year, it struck a partnership with background verification company Sentinel Tech Holdings Corp. to co-develop the first U.S. national database of convicted sex offenders to make it easier to track offenders on the Internet.

Convicted sex offenders are required by law to register their contact information with local authorities. But the information has only been available on regional databases, making nationwide searches difficult.

As of May, there were about 600,000 registered sex offenders in the United States.
http://www.reuters.com/article/gover...24879820070724





Look for Criminals in Your Family Tree

You can find 18th century British convicts on site that calls them ‘family’

An ancestry Web site released online on Wednesday the records of tens of thousands of British convicts sent to Australia from the 18th century.

The site (www.ancestry.co.uk) features the records of 160,000 convicts who were transported to Australia between 1788 and 1868.

"We invite you to search this collection and discover your convict ancestors. After all, they're still family," the site said.

Some of the convicts were guilty of serious crimes like murder and assault but many were for minor offences.

The first cargo of 732 convicts were landed in Sydney Cove in January 1788 by 11 ships from the British First Fleet.
http://www.msnbc.msn.com/id/19956704/





Parents’ Ire Grows at Pedophile’s Unabashed Blog
Jennifer Steinhauer

The search for the self-described pedophile in the large-brimmed black hat commences nearly every day here, with findings posted on chat rooms frequented by mothers.

He was spotted at a fair in Santa Clarita. He recently emerged from the Social Security office on Olympic Boulevard. He tapped away on a computer at the library in Mar Vista. Warnings have gone out. Signs have been posted.

And yet unlike convicted sex offenders, who are required to stay away from places that cater to children, in this case the police can do next to nothing, because this man, Jack McClellan, who has had Web sites detailing how and where he likes to troll for children, appears to be doing nothing illegal.

But his mere presence in Los Angeles — coupled with Mr. McClellan’s commitment to exhibitionistic blogging about his thoughts on little girls — has set parents on edge. One group of mothers, whose members by and large have never met before, will soon band together in a coffee shop to hammer out plans to push lawmakers in Sacramento to legislate Mr. McClellan out of business.

“Just the idea that this person could get away with what he was doing and no one could press charges has made me angry,” said Jane Thompson, a stay-at-home mother in East Los Angeles who recently read Mr. McClellan’s comments about a festival in her neighborhood in which he seemed to be describing her child.

Ms. Thompson is part of a movement to make it illegal to post images of children of any type on Web sites with sexual content or themes. “It became what I call a minor obsession of mine for the next six weeks,” she said, “to get to know his crowd and the things they talk about.”

Two months ago, Mr. McClellan said, he was more or less run out of Washington State, where he lived off and on with his parents, after the news media there and various Web sites drew attention to his activities, making him worry about his safety and that of his family. He had been posting nonsexual pictures of children on a Web site intended to promote the acceptance of pedophiles, and to direct other pedophiles to events and places where children tended to gather.

So he moved to Los Angeles, where he was born, to try to live a Southern California version of his former life. The climate was one draw, said Mr. McClellan in an interview near this reporter’s office last week. But also “there are so many world-class children’s attractions here, Disneyland, festivals and whatnot.”

Mr. McClellan has refrained from posting pictures of children on his Web site, which was shut down by its host several weeks ago but which he intends to start again, he said, with a Dutch host. On the site, he has described fairs, festivals and other spots that he hits at least three days a week, all to the fury of parents.

It is both his actions and inactions that vex law enforcement officials here, who, while suggesting that they keep an eye on Mr. McClellan when they can, say they have no legal recourse against him.

“If you look at things he has posted, he clearly is a pedophile,” said Lt. Thomas Sirkel, who works in the Special Victim’s Unit of the Los Angeles County Sheriff’s Department.

“Has he acted on it? I can’t say,” Lieutenant Sirkel said. “But I’ve been in this business for 20 years, and I have never seen one who has not.”

Mr. McClellan, who is 45, refers to himself as a pedophile, but says he has never actually sexually touched a child, simply “embraced them in a nonsexual way, mostly in Latin American countries.” He says he has never been convicted of a sex crime, and law enforcement officials in Los Angeles say they know of no convictions.

A check of available public records yielded no criminal history for Mr. McClellan, including under another name he said he used. Mr. McClellan, who said he was adopted, said he changed his name to that of his birth mother several years ago.

Lieutenant Sirkel would not say whether his department had Mr. McClellan under surveillance.

“Why should I tell him about our tactics?” Lieutenant Sirkel said. But he added: “I’d like to know where he is at, what he is doing and watch him awhile. I think he is possibly a dangerous man. In my opinion, he is a threat to children in this community, and people in the community are real concerned about him.”

Two Web-based groups, Peachhead, which caters largely to mothers on the West Side of Los Angeles, and Booby Brigade, its counterpart across town, have been abuzz with chatter about “Jack” sightings, and some parents have taken to posting photos of him in parks, downloaded from the Web.

“This one really angered people,” said Linda Perry, who runs Peachhead, referring to Mr. McClellan.

Mr. McClellan has been somewhat elusive. He lives largely in his car, he said, although he says he occasionally rents rooms. Asked how he makes a living, he would say only that he lives off of “public assistance, the kind where you’re not allowed to work.”

The parental reactions somewhat mirror those in the novel and film “Little Children,” in which a community becomes enraged at the notion of a convicted sex offender living in their midst, and chase him down at every turn. Although Mr. McClellan is not similarly pursued, parents who recognize him at events often scream at him, he said, and he fears for his safety enough that he would not meet a reporter in a public place.

Law enforcement officials have clearly taken notice — one mother posted on PeachheadFamilies.com about her husband, a location scout for films, being asked to leave a park where he was using his camera. Mothers from Pasadena to Marina del Ray will soon gather to discuss possible legislative options, Ms. Thompson said.

Theirs will most likely be a difficult road. While posting pictures of children in sexual situations is a felony, posting them fully clothed in everyday situations is not, even in the context of sexualizing them by proxy, so to speak, First Amendment scholars said. Further, while inciting others to commit crimes can be illegal, it is unclear whether giving people links to children’s book fairs is criminal.

“It is an interesting case,” said Eugene Volokh, a law professor and First Amendment expert at the University of California, Los Angeles.

Professor Volokh cited a federal statute that bars the posting of bomb-making information on the Web, and suggested that a similar statute banning information that helps people find children to molest could be enacted, perhaps. But simply providing information about where children gather was not likely to constitute such a crime, he said.

In terms of children’s images, he said: “The general rule is pictures of people in public are free for people to publish. Now if it is without permission and the person is a child and he suggests the children are sexual targets, you can imagine a court saying this is a new First Amendment exception. But it would be an uphill battle.”

So for now, then, many Angelenos will continue to track and record Mr. McClellan’s every move. Ms. Perry of Peachhead noted that the city was full of convicted child molesters.

“At least we know who he is and what he looks like,” she said.

Alain Delaquérière contributed reporting from New York.
http://www.nytimes.com/2007/07/28/us/28pedophile.html





A Thaw in Investment Prospects for Sex-Related Businesses? Maybe
Matt Richtel

Except for the sexual twist, Friendfinder Inc. sounds like the quintessential investment prospect for venture capitalists. The company, based in Palo Alto, Calif., operates social networking sites that boast 140,000 new registrants a day, and $200 million in annual revenue.

But the company’s main site, Adult Friendfinder, helps people meet for purposes of having sexual liaisons. The content, including explicit photographs and language, has put off mainstream investors.

“Over the last 10 years, we’ve met with a dozen venture capitalists,” said the company’s founder, Andrew Conru, who holds a Ph.D. in engineering from Stanford. “The conversations end fairly quickly.”

Times and investment tastes may be changing. Mr. Conru said that in recent months he had received more sustained interest, and follow-up calls, from potential investors. More generally, mainstream venture capitalists and private equity funds are starting to show interest in companies that make and distribute pornographic entertainment and sexually related products and services.

Several former Wall Street investors are now specializing in marrying mainstream money with companies that offer such content or products. Separately, a handful of venture capitalists have already financed start-ups that receive a big chunk of revenue from making or distributing sexual content or products, and others are considering such investments.

Jimmyjane, a San Francisco company that sells sex-related consumer products including high-end vibrators (a gold-plated one sells for $250), has six venture capitalists among its investors. The company’s chief executive said he was close to completing a $3 million to $5 million round of financing with one or more funds — not merely individual venture capitalists but marquee funds.

“It will be a watershed,” said Jimmyjane’s chief executive, Ethan Imboden, formerly a design consultant to Nike, Motorola and other mainstream brands. He said the deal could be among the first major venture fund investments in an overtly sexually themed business.

The involvement of mainstream investors in such companies is still very much in its infancy, and even those with a vested interest in developing it say it may not evolve further. There are considerable hurdles, chiefly and simply the discomfort of many in being affiliated with products and services they consider immoral or that they think could tarnish their reputations.

In addition, investors are dubious that these companies can turn a sufficient profit to justify the risk. Pointedly, investors may find it tough to take sex-related companies public, or find big companies to acquire them, limiting their profit-making exit strategies. And the universities and endowments that invest in private equity funds and venture capitalists are not likely to approve deals they see as pornographic, investment bankers said.

But there are also some forces compelling greater interest, according to venture investors and investment bankers, like P. Holt Gardiner, a partner at Ackrell Capital, a boutique investment bank that focuses largely on the high-technology industries but has a growing practice in matching investors with makers and distributors of sex-themed content.

Mr. Gardiner said that investors were intrigued that the digital era is permitting a range of new distribution models — from the Internet to digital television — that are creating many opportunities to profit from making and delivering pornographic content. Those may include technical or payment infrastructure start-ups, like those that allow micropayments.

More broadly, Mr. Gardiner noted that there was an enormous flow of dollars into the venture and private equity business and that investors were looking for creative ways to put that money to work. He said sex entertainment companies could be purchased at a discount, because there was less competition from prospective investors driving up the price.

Investor reticence about the sex industry is changing notably, Mr. Gardiner said.

But he conceded that for the most part, the interest had yet to translate into many deals. He said that he had been involved in several discussions with venture capital firms that showed interest in a sex-themed company, did the due diligence, signed off on the deal, and then showed it to their limited partners (the foundations or wealthy individuals that invest through venture capitalists).

“Invariably, one of the limited partners balks,” Mr. Gardiner said. “It has happened four or five times.”

Mr. Gardiner said a key selling point in getting these deals done was to give the mainstream investors some public relations cover by repackaging the company in a more conventional way. For instance, he said, a company can still get a big chunk of revenue from the pornography industry but also branch out into mainstream business.

He cited as an example a company called Waat Media, which aggregates and distributes content to cellphones and has deals with several makers of explicit pornography, like Penthouse and the Vivid Entertainment Group. In September, Spark Capital, a mainstream venture capital firm, led a $12.5 million round of financing for Waat, but changed the company’s name to Twistbox Entertainment and packaged the company as a mobile content distributor.

Spark Capital declined to comment for this column, as did Twistbox, which remains the parent company of Waat Media.

Philip S. Schlein, a partner at US Venture Partners and among the venture capitalists who invested in Jimmyjane, has said that he believes investment in such enterprises will increase because society is becoming more open. Among Jimmyjane’s other venture investors is Timothy C. Draper, a partner at Draper Fisher Jurvetson. He did not return calls for comment.

Mr. Imboden, the chief executive of Jimmyjane, said what attracted venture capitalists was not anything unusual: the opportunity to finance innovative products that can change or take over markets. Their expertise can be valuable, Mr. Imboden said.

“They understand innovation in consumer products and branding,” he said.

Francis Koenig, a former hedge fund manager and now the chief executive of AdultVest, a small investment banking company in Beverly Hills focusing on the pornography industry, agrees that more investment dollars will appear thanks to the widespread availability of explicit content on the Internet.

“Accessibility breeds acceptance,” Mr. Koenig said. He has started two funds to invest in the industry, named the Bacchus and Priapus funds, but he declined to specify any deals his company had participated in.

Meanwhile, not everyone is convinced the interest among mainstream investors will make a long-term impact.

Paul Fishbein, president of AVN Media Network, a company that publishes information about the pornography trade, said the time was ripe for mainstream investment. But, he noted, the industry has historically attracted talk of mainstream investment that in the end has been mostly that — talk.

“For five years we’ve been talking mainstream, mainstream, mainstream,” Mr. Fishbein said of the pornography trade. “But it still sits on the periphery.”
http://www.nytimes.com/2007/07/27/bu...27venture.html





Site That Bills Itself as a Movie Reviewer Finds That Sex Sells
Andrew Adam Newman

In the movie “Knocked Up,” the character played by Seth Rogen has a get-rich scheme to start a Web site that features Hollywood nude scenes, but his plans are dashed when he learns that another site, MrSkin.com, beat him to the punch.

What’s bad news for the movie’s protagonist turns out to be good news for Mr. Skin, an actual site, which saw a 35 percent bump in new visitors in June, when the movie was released.

But “Knocked Up,” which had permission to feature the site, was not the first to notice it. Mr. Skin had revenue of $5.3 million last year, primarily though $29.95-a-month subscriptions. With more than 175,000 revealing pictures and video clips of about 15,000 actresses (yes, only actresses), the site drew 2.9 million unique visitors in June, according to comScore, the Web traffic tracker.

“We don’t care about cinematography or great acting or anything like that,” Jim McBride, who favors the title chief sexecutive officer, said on the phone from his company’s Chicago offices. “We’re concerned about the nudity — who’s naked, and what they show.”

Mr. McBride, 44, a former futures trader, made nude-scene compilations on VHS tapes as a hobby before starting the site in 1999. Today his privately held company has nearly 40 employees, and Mr. McBride, the majority owner, appears frequently on radio shows (including Howard Stern’s) to highlight the naughty bits on new theatrical and DVD releases.

Given that Mr. Skin is in the business of selling access to copyrighted material without permission, it might seem logical that the company would be mired in legal challenges, but it is not. Mr. Skin bills itself as a movie-review site — though one that assesses only starlet nudity — so Mr. McBride argues that the clips can be shown under the fair-use doctrine, which permits excerpting copyrighted material for the purpose of criticism.

That legal defense turns out to be moot, though, because the movie studios not only tolerate Mr. McBride but also court him by sending advance screeners of DVD releases.

“The movie companies aren’t stupid,” Mr. McBride said. “I’m a guest on radio shows at least 300 times a year as the expert on celebrity nudity in film. If I’m on the radio talking about a movie like ‘Ask the Dust,’ and telling guys, ‘You’ve got to check it out: Salma Hayek has a full-frontal at the 33-minute mark,’ it’s going to make guys want to rent or buy the movie.”

More than 75 movie companies — including Universal, Fox, Paramount and Lionsgate — regularly send advance DVDs to Mr. McBride’s company. And his subscribers buy hundreds of DVDs every day, said Brian Sokel, director of marketing at TLAvideo.com, which sells DVDs on the site. (He declined to provide precise figures.)

Mr. Sokel finds nothing untoward about selling a film solely on nudity.

“That’s why filmmakers and Hollywood put sex scenes in movies — because it sells,” Mr. Sokel said. “People have a problem with raw or open sexuality, but for our company and for Mr. Skin, it doesn’t have to be a demonized concept. This is normal; you’re not a freak for wanting to see a Hollywood star in a film be naked.”

Mr. McBride is the author of “Mr. Skin’s Skincyclopedia: The A-to-Z Guide to Finding Your Favorite Actresses Naked,” a 670-page book that includes (avert your pun-weary eyes) a “skindex.” Since its publication two years ago, it has sold 11,000 copies, according to Nielsen BookScan. “Mr. Skin’s Skintastic Video Guide: The 501 Greatest Movies for Sex & Nudity on DVD,” will appear in September.

Mr. McBride bristles at suggestions that his site is pornographic, since it features PG- and R-rated movies (and some NC-17 ones). That distinction helps it draw mainstream advertisers like film companies and National Lampoon.

The site’s membership is 98.4 percent men; members spend an average of 13 minutes at the site per visit.

“I’m sure there are many men checking it out only at work versus worrying about their wife seeing them view it at home,” said Mr. McBride. When he scanned subscribers’ e-mail addresses, “I see ‘.gov’ and ‘.edus’ all the time,” the e-mail domains for governmental agencies and post-secondary schools. “But it is an R-rated site, not a porn site, so hopefully men aren’t too embarrassed to tell their wives.”

Mr. McBride said his wife is copacetic with his livelihood. And he dedicated his first book to his baby daughter, writing: “I dread the day you figure out what Daddy actually does for a living.”
http://www.nytimes.com/2007/07/23/bu...ia/23skin.html





Barbie Gets Another Accessory: an MP3 Player and More Stuff on Her Web Site
Louise Story



First, Barbie had Ken. Now, Barbie has a docking station.

A new doll hitting retail shelves this week is familiar in many ways — she’s got outfits galore — but she also has some unusual features: this Barbie, who is smaller and less shapely than her standard namesake, functions as an MP3 music player.

And when her feet are plugged into the iPodesque docking station that she comes with, she unlocks pages and pages of games, virtual shops and online chatting functions on the BarbieGirls.com Web site.

The new doll is a roundabout way of charging for online content. Instead of asking young Web surfers to punch in their parents’ credit card numbers, BarbieGirls.com and other sites are sending customers to a real-world toy store first. Some of these sites (like the Barbie one) can be used in a limited way without purchasing merchandise — the better to whet young appetites — but others, like the popular Webkinz site, are of little or no use without a store-bought product or two (or three, or a dozen).

The trends that have brought about BarbieGirls, Webkinz and their ilk are clear: While sales of dolls, action figures and outdoor toys are down, electronics sales to children were up 16.6 percent over the last two years as of May, the latest month available from the NPD Group, a research firm that tracks retail trends. The total toy industry’s annual sales were up just 0.8 percent in May, compared with two years ago.

With children’s leisure-time habits shifting online, toy companies are responding with new products that can be construed as fun both online and offline. That Barbie in the docking station? Go to a physical store and buy her an extra outfit, and you get access to even more Web content.

Products like these represent a change not only in the design and function of toys, but also in how toy makers use their Web properties. Mattel, for instance, like many consumer goods companies, has until now treated Barbie.com, HotWheels.com and its 22 or so other Web sites as advertising forums, places to showcase toys with the hope that children will nag their parents for them. But now Mattel and others are trying to turn their sites into money-makers in their own right. Although BarbieGirls toys are just now hitting the market, Mattel has paved the way for them: about 3 million people have registered since April 27 on the BarbieGirls Web site, a virtual world where playing games can earn a visitor play money — “B Bucks” — that can be spent on the likes of miniskirts, tiaras or home accessories. And, that’s without Mattel advertising the BarbieGirls site, even on its Barbie.com home page.

Mattel’s new toy follows the success of Webkinz, a line of Web-savvy stuffed animals made by Ganz, which also sells various sigh-inducing (albeit unplugged) teddy bears. Each Webkinz comes with a number code that, once entered online, starts an “adoption” process and ushers the owner into a virtual world that amounts to a Second Life for the grade-school set.

More such products are on the way. This month Zizzle, the company that makes Pirates of the Caribbean toys (not to mention Lucky the Incredible Wonder Pup, perhaps the first stuffed Labradoodle) is introducing an online/offline toy. SpotzGirl.com is a bubblegum-pink Web site with games (that people can play free) plus a collection of girly images (pussycats, hearts) that can be made into round physical tokens.

How does one make them? With the help of the Spotz Maker, a new-age button-maker that will be available in stores for $24.99. Girls will be able to create jewelry, decorate picture frames and collect and trade their Spotz, which are sort of like charm bracelet tokens.

“Over the next few years, you’ll see a lot of companies finding ways to create products that are Web enabled,” said, Marc Rosenberg, chief marketing officer at Zizzle. “The monetization for us comes from the product, and not from the Web.”

The concept behind Web-connected toys is not new. In the late 1990s, a number of toy companies introduced physical goods that could be used to unlock online goodies.

One noteworthy attempt came from The Learning Company, an educational software company that was owned for a short time by Mattel. But concepts like physical telescopes that could zoom to far-away islands when aimed at an Internet-connected computer failed to take off, in large part because Internet connections were too slow.

But times have changed tremendously. “Kids look at video content or virtual content as their toys,” said Jessi Dunne, executive vice president of global toys for Disney. “There isn’t a distinction between — ‘That’s a toy’ and ‘That’s an online game.’ ”

These days stores routinely sell out of the $10 to $13 Webkinz — pandas, lions, hippos and other animals that unlock the online fun on “Webkinz World.” There, on the site, customers can play with avatars of their pets, shop for them using “KinzCash,” decorate their pets’ rooms, enter online tournaments and chat with their real-world friends.

“The Webkinz concept is still doing very well,” said Robert A. Eckert, Mattel’s chief executive, in the company’s second-quarter earnings conference call. “That phenomenon is real, and will continue to do well.”

So real, indeed, that the starter set for the BarbieGirls site — sold for $59.99 — will be one of this holiday season’s main Barbie products. Mattel plans to run some television ads for the product in the fall, but the site is expected to be the primarily driver of sales, said Chuck Scothon, general manager and senior vice president of girls, Mattel Brands.

“For girls to understand the level of detail, the level of content, truly the experience of BarbieGirls,” Mr. Scothon said, “we wanted to allow them to play on the site.”

Toy companies also may benefit from the Web by using it to provide add-ons to products. Toy makers could sell cheaper products with a base-level of features, then allow customers to log online to choose what custom functions they want to download, said John Rose, a senior partner and managing director at the Boston Consulting Group and leader of the firm’s Global Convergence Initiative.

Even as toy companies cash in, some media executives are wondering if they, too, might use physical products to generate new revenue for their Web sites. Neopets.com, for instance, a virtual world of whimsical creatures and games, draws more than 10 million visitors a month, according to Viacom, which owns it, and although T-shirts and other Neopet-related merchandise is for sale, it is not the main draw.

MTV, a Viacom subsidiary, has started marketing toys that relate to its Web content. Earlier this month, the network introduced a music video game, “Rock Band,” in partnership with Electronic Arts. The game allows up to four people to play along with various songs using physical instruments hooked into an Xbox 360 or PlayStation 3.

“We’re looking at it as more of an add-on. Can we do something a little bit extra or a little bit different?” said Mika Salmi, president of global digital media at MTV Networks, which includes MTV, Nickeolodeon, VH1 and other networks. “The idea of connecting experiences is very, very important to us, but the absolute model is not established.”

The Walt Disney Company, too, has gotten into the act. Last year, it introduced a digital camera that lets people download images of Disney characters from its Web site to their photos. Disney will introduce an analogous video camera this fall and has other online/offline toys in development, said Ms. Dunne of Disney.

“I think Disney’s a perfect example of where it will work,” she said. “We have an advantage as a media company because we have all this, where toy companies have to create content. That’s not necessarily their sweet spot.”
http://www.nytimes.com/2007/07/23/bu...23webtoys.html