[JackSpratts]

Surveillance

Police Blotter: Patriot Act e-Mail Spying Approved
Declan McCullagh

"Police blotter" is a weekly report on the intersection of technology and the law.

What: The Justice Department asks a judge to approve Patriot Act e-mail monitoring without any evidence of criminal behavior.

When: Decided Feb. 2, 2006 by U.S. District Judge Thomas Hogan in Washington, D.C.

Outcome: E-mail surveillance approved.

What happened: As part of a grand jury investigation that's still secret, the Justice Department asked a federal magistrate judge to approve monitoring of an unnamed person's e-mail correspondents.

The request had a twist: Instead of asking to eavesdrop on the contents of the e-mail messages, which would require some evidence of wrongdoing, prosecutors instead requested the identities of the correspondents. Also included in the request was header information like date and time and Internet address--but not subject lines.

The federal magistrate judge balked and asked the Justice Department to submit an additional brief to demonstrate that such a request would be legal.

Instead, prosecutors asked Judge Hogan to step in. He reviewed the portion of federal law dealing with "pen register" and "trap and trace" devices-- terms originating in the world of telephone wiretapping--and concluded it "unambiguously" authorizes the e-mail surveillance request.

Though the language may be clumsy, Hogan said, the Patriot Act's amendments authorize that type of easily obtainable surveillance of e-mail. All that's required, he said, is that prosecutors claim the surveillance could conceivably be "relevant" to an investigation.

Excerpt from the court's opinion:
"In 2001, Congress enacted the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA Patriot Act"), Section 216 of which explicitly amended the authorities relating to pen registers and trap and trace devices...by expanding the definitions of these devices to include "processes" to obtain information about "electronic communication."

"Commenting on the very language that was finally enacted in Section 216 of the USA Patriot Act, several members of Congress highlighted the fact that the amendments would bring the state of the law in line with current technology by making pen registers and trap and trace devices applicable to the Internet and--more to the point--e-mail.

"For example, a section-by-section analysis of the bill that Representative John Conyers included in the record before the final House vote, which contains the same language that was finally enacted by Congress, states that Section 216 "extends the pen/trap provisions so they apply not just to telephone communications but also to Internet traffic."

"In addition, Senator Jon Kyl, who is currently Chairman of the United States Senate Judiciary Subcommittee on Terrorism, Technology & Homeland Security, noted that the same language in the Senate version of the bill "would codify current case law that holds that pen/trap orders apply to modern communication technologies such as e-mail and the Internet, in addition to traditional phone lines."

"The Congressional Research Service also published a legal analysis of the USA Patriot Act that states that the Act "permits pen register and trap and trace orders for electronic communications (e.g., e-mail)."

"The plain language of the statute makes clear that pen registers and trap and trace devices may be processes used to obtain information about e-mail communications. The statute's history confirms this interpretation and there is no support for a contrary result."
http://news.com.com/2100-1030_3-6037598.html





'Cyber Storm' Tests US Defences

Vital US infrastructure including power grids and banking systems have been put under simulated attack in a week-long security exercise called Cyber Storm.

The war game drew in 115 agencies from the FBI and CIA to the Red Cross, the Department of Homeland Security said.

IT companies and state and foreign governments also played a role in responding to the mock attacks.

The exercise had given the US "an excellent opportunity to enhance our nation's cyber security," the US said.

"Cyber security is critical to protecting our nation's infrastructure," George Foresman of the Department of Homeland Security added in a statement.

The US has been accused of being unprepared for a determined attack by hackers.

Cyber Storm reportedly not only tested against attacks by hackers, but also by bloggers - who deliberately spread misinformation in the exercise.

It was carried out on secure computers in the basement of the Secret Service in Washington DC.

There was no effect on the internet.

The exercise was the latest in a series of simulated attacks, including a gas attack on the New York subway.
http://news.bbc.co.uk/go/pr/fr/-/1/h...as/4706316.stm





U.S. Concludes 'Cyber Storm' Mock Attacks
Ted Bridis

The government concluded its "Cyber Storm" wargame Friday, its biggest-ever exercise to test how it would respond to devastating attacks over the Internet from anti-globalization activists, underground hackers and bloggers.

Bloggers?

Participants confirmed parts of the worldwide simulation challenged government officials and industry executives to respond to deliberate misinformation campaigns and activist calls by Internet bloggers, online diarists whose "Web logs" include political rantings and musings about current events.

The Internet survived, even against fictional abuses against the world's computers on a scale typical for Fox's popular "24" television series. Experts depicted hackers who shut down electricity in 10 states, failures in vital systems for online banking and retail sales, infected discs mistakenly distributed by commercial software companies and critical flaws discovered in core Internet technology.

Some mock attacks were aimed at causing a "significant cyber disruption" that could seriously damage energy, transportation and health care industries and undermine public confidence, said George Foresman, an undersecretary at the Homeland Security Department.

There was no impact on the real Internet during the weeklong exercise. Government officials from the United States, Canada, Australia and England and executives from Microsoft, Cisco, Verisign and others said they were careful to simulate attacks only using isolated computers, working from basement offices at the Secret Services headquarters in downtown Washington.

The Homeland Security Department promised a full report on results from the exercise by summer.

Foresman likened his agency's role during any Internet attack to an orchestra conductor, coordinating responses from law enforcement, intelligence agencies, the military and private firms. The government's goal is a "symphony of preparedness," Foresman said.

Homeland Security coordinated the exercise. More than 115 government agencies, companies and organizations participated. They included the White House National Security Council, Justice Department, Defense Department, State Department, National Security Agency and CIA, which conducted its own cybersecurity exercise called "Silent Horizon" last May.

An earlier cyberterrorism exercise called "Livewire" for Homeland Security and other federal agencies concluded there were serious questions over government's role during a cyberattack depending on who was identified as the culprit - terrorists, a foreign government or bored teenagers.

It also questioned whether the U.S. government would be able to detect the early stages of such an attack without significant help from private technology companies.
http://seattlepi.nwsource.com/nation...ber_Storm.html





Peppering the messenger

Inquiry Into Wiretapping Article Widens
David Johnston

Federal agents have interviewed officials at several of the country's law enforcement and national security agencies in a rapidly expanding criminal investigation into the circumstances surrounding a New York Times article published in December that disclosed the existence of a highly classified domestic eavesdropping program, according to government officials.

The investigation, which appears to cover the case from 2004, when the newspaper began reporting the story, is being closely coordinated with criminal prosecutors at the Justice Department, the officials said. People who have been interviewed and others in the government who have been briefed on the interviews said the investigation seemed to lay the groundwork for a grand jury inquiry that could lead to criminal charges.

The inquiry is progressing as a debate about the eavesdropping rages in Congress and elsewhere. President Bush has condemned the leak as a "shameful act." Others, like Porter J. Goss, the C.I.A. director, have expressed the hope that reporters will be summoned before a grand jury and asked to reveal the identities of those who provided them classified information.

Mr. Goss, speaking at a Senate intelligence committee hearing on Feb. 2, said: "It is my aim and it is my hope that we will witness a grand jury investigation with reporters present being asked to reveal who is leaking this information. I believe the safety of this nation and the people of this country deserve nothing less."

The case is viewed as potentially far reaching because it places on a collision course constitutional principles that each side regards as paramount. For the government, the investigation represents an effort to punish those responsible for a serious security breach and enforce legal sanctions against leaks of classified information at a time of heightened terrorist threats. For news organizations, the inquiry threatens the confidentiality of sources and the ability to report on controversial national security issues free of government interference.

Bill Keller, executive editor of The Times, said no one at the paper had been contacted in connection with the investigation, and he defended the paper's reporting.

"Before running the story we gave long and sober consideration to the administration's contention that disclosing the program would damage the country's counterterrorism efforts," Mr. Keller said. "We were not convinced then, and have not been convinced since, that our reporting compromised national security.

"What our reporting has done is set off an intense national debate about the proper balance between security and liberty — a debate that many government officials of both parties, and in all three branches of government, seem to regard as in the national interest."

Civil liberties groups and Democratic lawmakers as well as some Republicans have called for an inquiry into the eavesdropping program as an improper and possibly illegal intrusion on the privacy rights of innocent Americans. These critics have noted that the program appears to have circumvented the Foreign Intelligence Surveillance Act, which requires court approval for eavesdropping on American citizens.

Former Vice President Al Gore has called for a special prosecutor to investigate the government's use of the program, and at least one Democrat, Representative John Conyers Jr. of Michigan, has said the eavesdropping effort may amount to an impeachable offense.

At the same time, conservatives have attacked the disclosure of classified information as an illegal act, demanding a vigorous investigative effort to find and prosecute whoever disclosed classified information. An upcoming article in Commentary magazine suggests that the newspaper may be prosecuted for violations of the Espionage Act and says, "What The New York Times has done is nothing less than to compromise the centerpiece of our defensive efforts in the war on terrorism."

The Justice Department took the unusual step of announcing the opening of the investigation on Dec. 30, and since then, government officials said, investigators and prosecutors have worked quickly to assemble an investigative team and obtain a preliminary grasp of whether the leaking of the information violated the law. Among the statutes being reviewed by the investigators are espionage laws that prohibit the disclosure, dissemination or publication of national security information.

A Federal Bureau of Investigation team under the direction of the bureau's counterintelligence division at agency headquarters has questioned employees at the F.B.I., the National Security Agency, the Justice Department, the Central Intelligence Agency and the office of the Director of National Intelligence, the officials said. Prosecutors have also taken steps to activate a grand jury.

The interviews have focused initially on identifying government officials who have had contact with Times reporters, particularly those in the newspaper's Washington bureau. The interviews appeared to be initially intended to determine who in the government spoke with Times reporters about intelligence and counterterrorism matters.

In addition, investigators are trying to determine who in the government was authorized to know about the eavesdropping program. Several officials described the investigation as aggressive and fast-moving. The officials who described the interviews did so on condition of anonymity, citing the confidentiality of an ongoing criminal inquiry.

The administration's chief legal defender of the program is Attorney General Alberto R. Gonzales, who is also the senior official responsible for the leak investigation. At a Senate Judiciary Committee hearing on Feb. 6, Mr. Gonzales said: "I'm not going to get into specific laws that are being looked at. But, obviously, our prosecutors are going to look to see all the laws that have been violated. And if the evidence is there, they're going to prosecute those violations."

Mr. Bush and other senior officials have said that the electronic surveillance operation was authorized by what they call the president's wartime powers and a Congressional resolution authorizing the use of force against Al Qaeda passed in the days after the September 2001 terror attacks.

The government's increasing unwillingness to honor confidentiality pledges between journalists and their sources in national security cases has been evident in another case, involving the disclosure in 2003 of the identity of an undercover C.I.A. officer, Valerie Wilson. The special counsel in the case, Patrick J. Fitzgerald, demanded that several journalists disclose their conversations with their sources.

Judith Miller, at the time a reporter for The Times, went to jail for 85 days before agreeing to comply with a subpoena to testify about her conversations with I. Lewis Libby Jr., who was chief of staff to Vice President Dick Cheney. Mr. Libby has been indicted on charges of making false statements and obstruction of justice and has pleaded not guilty.

"An outgrowth of the Fitzgerald investigation is that the gloves are off in leak cases," said George J. Terwilliger III, former deputy attorney general in the administration of the first President Bush. "New rules apply."

How aggressively prosecutors pursue the new case involving the N.S.A. may depend on their assessment of the damage caused by the disclosure, Mr. Terwilliger said. "If the program is as sensitive and critical as it has been described, and leaking its existence could put the lives of innocent American people in jeopardy," he said, "that surely would have an effect on the exercise of prosecutorial discretion."

Recently, federal authorities have used espionage statutes to move beyond prosecutions of government officials who disclose classified information to indict private citizens who receive it. In the case of a former Pentagon analyst, Lawrence A. Franklin, who pleaded guilty to disclosing defense secrets, federal authorities have charged Steven J. Rosen and Keith Weissman, formerly representatives of the American Israel Public Affairs Committee, a pro-Israel lobbying group.

The two men have been indicted on charges of turning over information obtained from Mr. Franklin to a foreign government, which has been identified as Israel, and to journalists. At Mr. Franklin's sentencing hearing in Alexandria, Va., Judge T. S. Ellis III of Federal District Court said he believed that private citizens and government employees must obey laws against illegally disseminating classified information.

"Persons who have unauthorized possession, who come into unauthorized possession of classified information, must abide by the law," Judge Ellis said. "That applies to academics, lawyers, journalists, professors, whatever."

Some media lawyers believe that The Times has powerful legal arguments in defense of its reporting and in protecting its sources.

Theodore J. Boutrous Jr., who has represented publications like The Wall Street Journal and Time magazine, said: "There is a very strong argument that a federal common-law reporters' privilege exists and that privilege would protect confidential sources in this case. There is an extremely strong public interest in this information, and the public has the right to understand this controversial and possibly unconstitutional public policy."
http://www.nytimes.com/2006/02/12/po...12inquire.html





Detective's Employer Knew About His Sleuthing Device
David M. Halbfinger and Allison Hope Weiner

Throughout the three-year federal investigation of Anthony Pellicano, the celebrity detective at the center of a huge Hollywood wiretapping scandal, the top-tier entertainment lawyer Bert Fields and his firm have insisted that they never knew their go-to investigator was secretly recording his targets' phone calls.

But an indictment unsealed this week makes clear that Mr. Fields's firm, which frequently deployed Mr. Pellicano to dig up dirt on its legal opponents, also played a central role in his pursuit of a trademark for the very device the government says he was using to wiretap his targets: a combination of computer hardware and software he called, aptly enough, Telesleuth.

Brian Sun, a lawyer for Mr. Fields's firm, Greenberg, Glusker, Fields, Claman, Machtinger & Kinsella, said its lawyers believed that Mr. Pellicano intended to use Telesleuth on behalf of his many law-enforcement clients. Mr. Sun said the firm also believed that Telesleuth could not be used as a wiretapping device, although the participant in a call could use it to record a conversation.

"It would be ludicrous to suggest that the firm or any of its lawyers would ever have associated themselves with any wiretapping activity," Mr. Sun said.

Mr. Sun, who said he was speaking on Mr. Fields's behalf in this regard, said Mr. Fields may have brought Mr. Pellicano's request to the firm, but that he did not work on the trademark matters.

Mr. Pellicano pleaded not guilty to wiretapping and other charges on Monday.

Precisely what the firm knew about Mr. Pellicano's intentions for the Telesleuth device has been the subject of intense interest by prosecutors, however: a lawyer in the case confirmed that the government had subpoenaed documents arising from Mr. Pellicano's pursuit of the Telesleuth trademark, and that his lawyers had resisted handing over at least some of them.

By the mid-1990's, Mr. Pellicano, through one of his companies, Forensic Audio Labs, had become one of the nation's foremost expert witnesses in analyzing audiotapes, often for prosecutors in organized-crime cases involving court-ordered wiretaps.

But federal prosecutors here now say that in 1995, Mr. Pellicano sought to conduct his own wiretaps, without court orders. He quietly hired a self-taught computer programmer, Kevin Kachikian — who also pleaded not guilty to federal charges on Monday — to develop software for intercepting phone calls.

By the fall, Mr. Pellicano's idea had advanced as far as coming up with a brand name: Telesleuth. He wanted to trademark the name, so he turned to a law firm he knew well: Greenberg, Glusker. Its most famous partner, Mr. Fields, had already worked closely with Mr. Pellicano. On Nov. 6, 1995, a lawyer there, Jill A. Cossman, applied on Mr. Pellicano's behalf for a trademark with the United States Patent and Trademark Office.

According to prosecutors, Mr. Pellicano had engineering work done the following March to finish the hardware for Telesleuth, and in January 1997 he began bribing a phone company worker to help him. In May 1997, the two used Telesleuth to wiretap a Los Angeles real estate developer, Robert Maguire.

Two months later, Mr. Pellicano — this time using the Greenberg, Glusker lawyer Michael K. Grace, who left the firm in 1999 — applied for a second trademark, for a program called Forensic Audio Sleuth, also designed by Mr. Kachikian, that can play back and enhance the quality of audio recordings. On his Web site, Mr. Kachikian, whose lawyer did not return calls on Friday, boasts that Mr. Pellicano used it in the trial of Eric and Lyle Menendez, in 1993, and on behalf of Michael Jackson.

Mr. Pellicano successfully registered the Forensic Audio Sleuth trademark in January 2000. But his trademark application for Telesleuth was abandoned in February 2000, after Mr. Pellicano and his lawyers had received a fifth and final six-month extension from the trademark office. In order to register the Telesleuth trademark, experts say, they would have had to show that the mark was being used in ongoing commerce.

Although Mr. Pellicano never submitted evidence of his marketing of the Telesleuth name, the federal indictment and interviews show he was actively using the device. In September 1997, prosecutors say, he began using it to wiretap Mark R. Hughes, the founder of Herbalife, and he used Telesleuth in at least two other wiretaps over the next year.

But Mr. Pellicano and Mr. Kachikian may have encountered some glitches with Telesleuth early on. In 1999, Mr. Pellicano had Immuneal Manufacturing of Philadelphia make a container to shield Mr. Kachikian's printed circuit boards from electromagnetic fields. One expert on telephony suggested that those fields could be generated by power lines that run near telephone switch boxes. After some modifications, Mr. Pellicano ordered 24 more of those containers in July 2000, said Larry Maltin, the company's president.

Over the next 18 months, Mr. Pellicano's business boomed, and he installed at least nine more Telesleuth wiretaps, prosecutors say. In early 2002, Mr. Pellicano paid Mr. Kachikian $13,425 for his work on the project. And before Mr. Pellicano's work was interrupted by a federal raid on his Sunset Strip offices that November, he installed another two wiretaps — one on the actor Sylvester Stallone, another on a Los Angeles Times reporter, Anita Busch.

A month later, prosecutors say, Mr. Kachikian destroyed computer files, hardware and software relating to Telesleuth.

On his Web site, though, Mr. Kachikian still proudly lists his work on behalf of Mr. Pellicano. The Web site does not mention Telesleuth by name. But Mr. Kachikian's résumé does note that he designed a "telephony hardware interface and control software. "
http://www.nytimes.com/2006/02/12/na...gator.web.html





MPs Reject ID Card Costings Call

MPs have voted against making the government carry out a report on costs before introducing identity cards.

They decided by a majority of 53 to overturn an amendment made to the ID Cards Bill by peers last month.

But MPs called for a report on costs every six months for the first 10 years of the scheme being in place.

MPs also backed ministers in making it compulsory for people to be given cards - and put on a register - when they apply for passports.

Critics are concerned about the cost and civil liberty implications of the scheme and some commentators had predicted the votes would be closer.

ID card plans, opposed by Conservatives and Liberal Democrats, will now go back before the House of Lords.

Civil liberties

An amendment, put forward by former health secretary Frank Dobson, requiring the government to produce a report every six months, was approved without a vote.

MPs backed plans to put people applying for passports from 2008 on the ID cards register by a majority of 31. Around 20 Labour backbenchers rebelled against the government.

MPs also decided by a majority of 51 to ensure all passport applicants are given ID cards.

Earlier, MPs approved a government compromise requiring new legislation before ID cards are made compulsory for all.

Prime Minister Tony Blair was not able to attend the debate after his plane was grounded by engine troubles in South Africa.

Defeats

He told the BBC: "I think we've won the argument on it. People have this idea that there's a problem in civil liberties with people having an identity card and an identity registered today when across all walks of our life this is happening.

"And with the real problems people have today with identity fraud, which is a major, major issue; illegal immigration; organised crime: it's just the sensible thing to do."

Last month, peers voted for the scheme not to go ahead until the full costs were known and for more security provisions for stored personal data.

Home Secretary Charles Clarke had said a stand-alone ID card would cost £30, while one linked to a passport would cost £93.

But that figure has been disputed, most notably by a London School of Economics report estimating the cards could cost up to £300 each.

Demonstrations

Home Office minister Andy Burnham told BBC News that the vote showed support for the Bill was "solidifying".

"We think it gives the vote a very clear mandate going forward," he added.

"It's dispelled some of the doubts, the criticism, and we think the scheme can now move forward with confidence."

But shadow home secretary David Davis described the scheme as one of "creeping compulsion".

Lib Dem home affairs spokesman Alistair Carmichael said: "The government made a pledge at the election to introduce voluntary identity cards. Tonight they broke that pledge.

"The only way in which people will be able to opt out of the system is by giving up their right to travel abroad.

"The fight against compulsory ID cards will continue in the House of Lords, where we will hold the government to their manifesto commitment."

Before the debate got under way about 70 people were at a protest outside Parliament involving civil rights group Liberty and the No2ID pressure group.
http://news.bbc.co.uk/go/pr/fr/-/1/h...cs/4707608.stm





Video Surveillance Outfit Chips Workers
Jan Libbenga

A Cincinnati video surveillance company CityWatcher.com now requires employees to use Verichip (http://www.verichipcorp.com) human implantable microchips to enter a secure data centre. Until now, the employees entered the data centre with a VeriChip housed in a heart-shaped plastic casing that hangs from their keychain.

The VeriChip is a glass encapsulated RFID tag that is injected into the triceps area of the arm to uniquely identify individuals. The tag can be read by radio waves from a few inches away.

The news was reported by CASPIAN (http://www.nocards.org) (Consumers Against Supermarket Privacy Invasion and Numbering), a US organisation that opposes the use of surveillance RFID cards.

Although CityWatcher does not require its employees to take an implant to keep their jobs, they won't get in the data centre without it. CASPIAN’s Katherine Albrecht says chipping sets an unsettling precedent. "It's wrong to link a person's paycheck with getting an implant,” she says.

CityWatcher argues that chipping employees is a move to increase the layer of security, as present systems can be compromised. However, CASPIAN warns that this can happen to implantable chips too. Security researcher Jonathan Westhues - author of a chapter in a book titled Hacking the Prox Card - recently demonstrated how the VeriChip can be skimmed and cloned by a hacker. A cloned chip theoretically could duplicate an individual's VeriChip implant to access a secure area.
http://www.theregister.co.uk/2006/02...oyees_chipped/





RFID Hacks

Cellphone Could Crack RFID Tags, Says Cryptographer
Rick Merritt

A well known cryptographer has applied power analysis techniques to crack passwords for the most popular brand of RFID tags.

Adi Shamir, professor of computer science at the Weizmann Institute, reported his work in a high-profile panel discussion at the RSA Conference here. Separately, Ron Rivest, who co-developed the RSA algorithms with Shamir, used the stage of the annual panel to call for an industry effort to create a next- generation hashing algorithm to replace today’s SHA-1.

In recent weeks, Shamir used a directional antenna and digital oscilloscope to monitor power use by RFID tags while they were being read. Patterns in power use could be analyzed to determine when the tag received correct and incorrect password bits, he said.

"The reflected signals contain a lot of information," Shamir said. "We can see the point where the chip is unhappy if a wrong bit is sent and consumes more power from the environment…to write a note to RAM that it has received a bad bit and to ignore the rest of the string," he added.

"I haven’t tested all RFID tags, but we did test the biggest brand and it is totally unprotected," Shamir said. Using this approach, "a cellphone has all the ingredients you need to conduct an attack and compromise all the RFID tags in the vicinity," he added.

Shamir said the pressure to get tags down to five cents each has forced designers to eliminate any security features, a shortcoming that needs to be addressed in next-generation products.

Separately, cryptographers discussed the weaknesses in the fundamental SHA-1 hashing algorithm that were announced at the group’s panel in 2005. "That was a real wake up call for cryptographers," said Rivest, who is also professor of electrical engineering and computer science at MIT.

"I would like to see a process like the industry conducted for the AES algorithm to work on a new hash function that could be delivered by 2010," Rivest said. "We are skating too close to the edge with the hash functions we use now," he added.

The National Institute of Standards and Technology ran the program that resulted in AES, but complained last year it lacked the resources in the near term to develop a similar program for hash functions.

"My guess is they will get pushed into doing this again," said Rivest in an interview after the panel. "A four-year time frame is probably fine for a technology bake off. There’s no reason to panic," he added.

"If it was brought up by this panel, it will probably spark a fire and the NSA or someone will get something going," said Sheueling Chang, a distinguished engineer in cryptography at Sun Microsystems who attended the panel.
http://www.eetimes.com/news/semi/sho...leID=180201688





All pics on site

For Anything: Proxmarkii
Jonathan Westhues

My initial prox card ‘cloner’ did the job, but it was not very general. Because I use analog circuitry to demodulate the signal from the antenna, the hardware is capable of dealing with only a single modulation scheme—BPSK, with the modulating frequency and bit times that I chose to work with the Flexpass cards. It has to be like that; the PIC is not powerful enough to do it any other way.

Since then I have built a considerably more general device. My new device is capable of working with nearly any kind of 125 kHz card, and many types of 13.56 MHz cards. It is also capable of bidirectional communication, so that it can send data from the reader to the tag. This is necessary to work with most of the newer tags, including any cryptographic tag. (Note, of course, that a tag that uses cryptographic techniques can resist any practical attempts to clone it over the air; but I can still talk to the tag, and do anything that its reader could, even if I cannot clone the thing.)

The system is based around an ARM7 microprocessor. I chose an AT91 part from Atmel, for its ease of integration—it has adequate on-chip flash and SRAM—and for its wide range of peripherals. In particular, the AT91SAM7S64 has a USB slave peripheral. That makes it convenient to send large amounts of data from the device to a PC, very quickly; for example, I can do an ‘oscilloscope view’ of the signal from the tag, so that I can get some idea of what a tag is doing, without additional test equipment and before I write the code to demodulate that signal into bits.

A small amount of analog circuitry is used to fix the dynamic range of the signal from the antenna. This is the usual problem, that we receive the superposition of our transmitted carrier and the returned signal from the tag, and that we really just care about the latter. After that the signal goes straight into an A/D; all further processing is digital. To date I have tested against two different prox cards: a ‘Radionics’ card with no other markings, and an HID Prox Card II. This is a waveform from the Radionics card:

It is easy to see that this card uses ASK. The Prox Card II uses slow FSK:

Since these were all ID-only cards, there was no need to demodulate the signal in real time. I therefore just transfer the samples to my PC, and convert them into bits over there.

I can also read or simulate TI-type tags; these tags communicate with the reader in a somewhat different way, so that special hardware was required to deal with them. Still, they seem to work fine:

The trace is not the raw signal from the ADC; it is the difference between the output powers of matched filters for the two FSK tones, so that it is basically a plot of the soft decision on the bit.

I designed this device to be as flexible as possible. Certainly, I can read or simulate most kinds of tags. In addition to this, the device is capable of working in ‘snoop’ mode, in which it passively listens to signals from other RFID tags and readers. This is necessary to investigate ‘reader talks first’ bidirectional tags—it is necessary to start out by snooping, to find out what the reader is saying to the tags, so that you can duplicate it.

There is circuitry to modulate the transmitted carrier, in order to send data to the tag. This is also what I use for the ‘simulated tag’ modes. I use the synchronous serial port's data-out line as a sort of a 1-bit DAC. That allows me to queue up the desired pattern in a DMA buffer, and to send it from there to a serial port. The timing is therefore determined by the serial port, which is easily programmed, and not by processor cycle-counting, or something inconvenient like that.

The ARM7 at 48 MHz gives more than enough processing power. There is no need to be very efficient, so everything can be written in C. I used arm-elf-gcc, which generates more than good enough code. I wrote a bootrom, so that I can load new code over USB.

The hardware is not really that remarkable. It is a low-end RFID tag reader, with an interesting receive path, though with a curiously weak transmitter. The ‘simulated tag’ modes are the only thing that is unique. Still, I expect that it will take a lot of the drudgery out of cloning ID-only tags, and it is really the only practical way to experiment with the more advanced transponders.

A commercial RFID tag reader offers no possibility to manipulate the lower layers of the protocol over the air; it just gives you the ID, or the piece of information that you requested, and it doesn't tell you what it went through that get that. For ID-only tags (like most low-frequency prox cards), the ID is really all that there is to know. Modern tags are more complex, though; they do things like anti-collision, or crypto, or addressable memory on the tag. As these more interesting tags become more prevalent, it seems terrible not to be able to know this, and that is not possible without either (a) getting schematics and code for a suitable commercial reader, or (b) starting from scratch. Option (a) did not seem plausible; I therefore started from scratch.

The hardware works, but so far I have been unfortunately lazy. I have written code to read and clone a few types of ID-only cards, but that's about it. I can program rewritable TI-type tags, but that's pretty easy; they barely talk back when you do. As far as I can tell, the hardware is perfect. The A/D that I thought might be too slow turned out to be too slow; my fallback plan, which was to sample only every other or (for BPSK at 62.5 kHz, where every other breaks down) every third 125 kHz cycle, works just as well in practice. A fast sample-and-hold is really more important than a fast A/D....

I run it off a lithium-poly cell, which can be recharged when the device is plugged in to USB. The user interface is a bit spartan, just three LEDs and a pushbutton. The smaller size is nice; it's no larger than a business card. Certainly this is a much more fun device to carry; you can read people's cards, and look at the 'scope view on your laptop, and reverse-engineer the protocol in real time. I have yet to do anything with a not-ID-only tag, which is somewhat pathetic.

As far as I know, it is not possible to buy a device like the one that I have described above, and an instrument like this is practically essential for anyone experimenting with the latest generation of transponders. If anyone is interested in doing low-level work with RFID tags, then you could presumably save some time by starting with the platform that I have built. I do have many extra bare boards. At some point I intend to freely distribute the schematics, layout, and software, but there is a lot that must first be cleaned up. I will see.

As an example of the capabilities of this device, I go through the steps involved in cloning a Verichip. This is the same sort of process that would be required to clone any kind of ID-only tag. For a bidirectional (e.g multipage or anticollision) tag, the process would be similar but more complex.
http://cq.cx/proxmarkii.pl


Demo: Cloning a Verichip

In Brief: Verichip markets their product for access control. This means that you could have a chip implanted, and then your front door would unlock when your shoulder got close to the reader. Let us imagine that you did this; then, I could sit next to you on the subway, and read your chip's ID. At this point I can break in to your house, by replaying that ID. So now you have to change your ID; but as far as I know, you cannot do this without surgery.

All of this relates to an article that Annalee Newitz is writing for Wired. To me, this is yet another ID-only tag, and not very special to clone. Still, she had bothered to have one implanted, pretty much entirely for that purpose, and she was looking for someone who could do it. As we will discover, they are built with no security. It was therefore not that hard.

I went to the trouble of cloning her implanted tag, which seemed entirely unnecessary; the sample tags worked fine. She thought that it would be more impressive like that. Actually, she might have been right. The article comes out in May.

Also, before anyone else links to me using the phrase ‘claims to:’ of course I can clone it. It is really not difficult. If you are still unconvinced, and you live in or can travel to the greater Boston area, then contact me, and I will see what I can do about a demo.

* * *

I will briefly describe the steps that I went through to duplicate an ID-only RFID tag using my proxmarkii device. We will be cloning a Verichip, which should not rationally make any of this more interesting but does.

I have a reader and some tags. The first thing to do is to determine the frequency of operation. I could have used the proxmarkii, but I actually just used a coil of wire and my 'scope. I measured the voltage across the coil, energized the reader, and used cursors to measure the frequency of the signal received. These tags happen to work around 134 kHz.

TI's glass transponders work near that frequency, so my first thought was that the Verichip was basically one of them. I therefore tried to read my Verichip as a TI-type tag. That means that I excite it with a pulse a few dozen milliseconds long, and then turn off my carrier and listen for a response.

Clearly, this did not work. The Verichip is not a TI-type tag. That means that it's probably the continuously-illuminated kind. I actually could have determined this from the signal that the reader sends out, if I had paid more attention then. The proxmarkii device could read 134 kHz continuously-illuminated tags if I wrote the proper software for it. Instead I will be lazy and just try it at 125 kHz; the read range will suffer, but that isn't really critical.

So now I did a low-frequency read, and this time I got something. What is unfortunate is that it is a mess. I just want to duplicate the tag, so there is no particular reason to reverse- engineer the exact structure of the bits sent over the air. Still, it would be nice to know the fundamentals, like the period...

I do a quick autocorrelation to determine the period of the returned signal. We could save a trace and do it in MATLAB, but I prefer to do it in the proxmarkii software. MATLAB is nice for signal processing, but not so good for scrolling through long traces. The graph tool that I use is more like the user interface of a digital storage 'scope. It is obvious that the period is 2048 samples (which, sampling every other carrier clock, is 4096 carrier clocks).

Actually it looks like there's a little more structure to the signal, considering all those transitions for an ID that is mostly zeros. I would guess that it is Manchester-coded ASK, or something differential, or something weird. If we wanted to determine the mapping between the tag's ID and the signal sent over the air, then we would spend more time on this. For now it is not worth the bother.

If all that I want is to clone the tag, then it is arbitrary which point in the signal I designate as t=0. The ID just loops, so the signal over the air is unaffected. That feature between the cursors looked sort of like a sync pattern, though, and it occurs in both tags’ traces. For want of a better idea, I will write my demod code to correlate for that, and use that as its reference. Then I can demodulate the received signal to a bit string.

At this point it is only a matter of remodulating the received signal, and we're done. Then I can download that signal to my proxmarkii, put it in ‘simulate’ mode, and it should be indistinguishable from the legitimate tag. To be on the safe side, I read my ‘simulated tag’ using another proxmarkii device, to make sure that my simulated ID is correct. If that looks okay, then I am ready to check my work against the legitimate reader, and as we would hope, it reads:

(Notice that the demodulation and remodulation steps are in a sense unnecessary; I could have just replayed the exact signal that I received over the air, without demodulating and remodulating it. That means that you get twice as much noise, though, because the signal received from the tag never gets ‘cleaned up.’ If I wanted to make this very automatic, then I could write code for the proxmarkii that would automatically determine the period, read the ID many times, and average those together, lining them up at the points of maximum cross- correlation. That might be sort of cute, because it would be fully automatic for any modulation scheme, but it seems like a lot of trouble.)

This took me a couple of hours. I could have done it faster if I had not constantly been interrupting myself to take a screenshot or a picture. Of course it will take me some time if I want to build out the software to read them properly, at 134 kHz.

The screenshots and the photograph prove nothing. I therefore save the traces:

verichip-raw.tr: the raw signal from the tag, voltage versus time, one sample every other carrier clock
verichip-remod.tr: the remodulated (i.e., cleaned up) ID, ready for replay, one sample per carrier clock

These are for Annalee's Verichip, number 1022000000047063.

There is a curious aside: the Verichip that I read here is not supposed to have that ID, according to medical records; but the ID that I cloned is the ID that my legitimate reader reports. As to what this means—malpractice? sloppy record-keeping? that I have the special ‘reverse engineer's edition’ of the reader?—I haven't a clue.

Oh, and lest anyone get overly worried about drive-by Verichip identity theft: that is probably not a big deal. Their biggest security feature is the absurdly short read range, which is restricted by the tiny antenna. As long as the user stays at least a foot away from any unsecured person or thing, there is very little risk.
http://cq.cx/verichip.pl





Why The Net Should Stay Neutral
Bill Thompson

Is it time to let internet companies provide premium access to paying websites and services? No, says technology commentator Bill Thompson.
One of those loud and angry debates that seems to have nothing to do with the rest of the world is currently playing out in the US.

The Senate Committee on Commerce, Science and Transportation is considering making changes to the 1996 Telecommunications Act, and one of the ideas being floated is that network providers should be allowed to offer preferential service to some of their customers instead of providing a neutral data carrier service.

Back in 2004, Michael Powell, at the time chairman of the Federal Communications Commission, said that net service firms should support "network freedom" and ensure that their users could access all lawful content and attach whatever devices they want to their network connection without any discrimination.

Now some of the big telecoms companies want to be able to sell premium services for things like streaming video or voice over IP, and some people are worried that this will eventually lead to a segregated internet.

They include Lawrence Lessig, law professor at Stanford University, founder of the Creative Commons and one of the most significant and influential thinkers about the future of the network we have been building for the past 30 years.

It's a big issue.

After all, once we get away from the idea that the pipes just move bits around without really caring what data is being transmitted, it's a small step to discriminating against some forms of content and then targeting specific sites, services or users.

Instead of an "end-to-end" network, we would end up with something more like the phone network, along with a complicated array of charging schemes for "0800", "0845" and "0871" sites.

Those in favour of "network neutrality" and keeping the current model of the internet as just a data conduit include big hitters such as Google, eBay, Amazon and even Microsoft.

They know it will cost them more if they have to pay to get their video delivered to users.

The phone and cable companies want to be free to charge for new services and make more money, and they argue that it's not up to the government what they do with their networks.

Policy echo

This might not seem to matter to the rest of us, since the US no longer has the majority of network users, but of course business practices, technologies and even laws made over there tend to have a disproportionate impact on the rest of the world so we should pay attention.

We've already seen how the Digital Millennium Copyright Act, a US law designed to protect the interests of large media organisations, resulted in the appallingly restrictive EU Copyright Directive. We don't want anything like that to happen this time.

This debate is happening now largely thanks to the internet's astonishing success.

The earliest packet-switched network connections, the ones that made up the early Arpanet back in the late 1960s, used telephone lines to transmit data between university campuses in California and Ohio.

But they used the network in the way that canal boats use water. A canal has no idea what is being carried in the narrow boats, and it doesn't really care. Until the 1990's the phone companies didn't really know or care what data was going over the leased lines they sold.

When dial-up access started to take off, there was a flurry of activity and attempts at control, all of which failed.

However, now all the telcos run their own networks using internet technologies and internet protocols and they want a piece of the action.

Charging differently for different content is not the same as turning the net into a toll road, open to all for a fee.

We already have that: if you choose to pay more you can have a fast broadband connection to your home; if you choose to pay vast amounts of money you can stream large amounts of data like Google or the BBC does.

Justice call

What is being proposed is more like building two roads into every town and up to every house, one smooth and well-maintained tarmac and the other a dirt track, and then letting Tesco and Waitrose bid for the right to use the good road.

This issue just the latest round of a long-running debate about how much government - of whatever type, in whatever country - should be involved in the growth and development of the internet.

Some, mostly libertarian conservative thinkers like those at the Cato Institute, instinctively oppose any and all regulation and want the free market to determine what services are offered, at what price and to whom.

Even those who remember that the net emerged from a publicly-funded attempt to build a high-speed data network choose to claim that the days of subsidy are now over and that only deregulation can offer real benefits, both to companies and to the wider society.

For them, any attempt to restrict the telephone companies' freedom to offer preferential service is tantamount to state socialism and one step away from a communist revolution.

Of course they are wrong, and badly so.

I'm a market socialist, and I believe that regulated markets are the best way to create social value. I have also been using the net since 1985 and I have seen it evolve and grow thanks to the balance between regulation and market forces. That balance has to be maintained.

Social justice is best served by ensuring that public utilities, of which the network is surely one, are regulated in the public interest.

Markets fail, and they do so in ways that any humane society must address. Ensuring that network access is available to all and that the network itself carries all lawful traffic is the only way forward.

We must just hope that the US government recognises that this is the case, and sets a good example to the rest of the world.
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/4700430.stm





It's Like Lending to a Friend, Except You'll Get Interest
Bob Tedeschi

THE Internet has become a great place to track down friends — or friends of friends — for advice or for a date. Now you can ask them for money, too. Prosper.com, a start-up company based in San Francisco, started operations last week, offering a mixed brew of eBay, Friendster and the local bank.

Prosper's users lend money to and borrow money from other people on the site at what the company says are better interest rates than those available through traditional financial institutions and without some of the risk that comes from typical person-to-person loans.

"We looked at eBay and said, 'Why can't we do this for money?' " said Chris Larsen, Prosper's chief executive.

Mr. Larsen, who founded and led E-Loan, an online lender that was bought last year for $300 million by Popular Inc., says Prosper could save borrowers and lenders money because it was a leaner operation than traditional financial institutions. He noted that consumers make, at most, about 4 percent on their savings accounts, which banks then lend to credit card customers at 14 percent or more.

"That's just a huge spread," Mr. Larsen said. "We think if you allow people to participate directly, it's a more efficient marketplace. People can make a better return on their deposits, which then become the source of credit to others."

On Prosper.com, prospective borrowers register with the site and allow the company to review their credit history. Then borrowers post a loan request of up to $25,000, along with an upper limit for the amount of interest they are willing to pay. Loans are not secured by collateral and are paid off over three years at a fixed rate, with no prepayment penalty.

Lenders essentially deposit their money with Prosper — which holds it in an interest-bearing account with Wells Fargo— and either review the loan requests individually or fill out a form permitting Prosper to allocate money to borrowers who meet certain criteria.

Chief among those criteria is the borrower's rating from the credit reporting bureau Experian, but borrowers can also join or create groups with defined interests or characteristics that, they hope, will make them more attractive to some lenders.

Among the groups on Prosper are aficionados of the Porsche 914 model, associates and employees of a Berkeley cafe and Vietnamese-American students. Borrowers, who typically post their loan requests and any group affiliation, along with a description of who they are and why they need the money, then wait a maximum of two weeks for lenders to bid in ever-lower interest increments for the right to issue the loan.

To help lenders minimize risk, Prosper permits them to finance just part of a given loan, so a typical lender may offer, say, $100 at 6.5 percent interest toward a loan to someone with excellent credit.

Once the bidding is complete, and if enough lenders bid enough money to finance the loan at a single rate acceptable to the borrower, Prosper transfers the money to the borrower's account and establishes a monthly repayment system that withdraws money from the borrower's checking account. (Should a borrower default, Prosper hires a collection company on the lender's behalf and alerts credit bureaus.)

Prosper makes money by charging borrowers 1 percent of the loan amount, while lenders pay 0.5 percent of the loan's balance each year.

The community aspect of the site, Mr. Larsen said, is an important component. "It's satisfying to place money in little bits with people who have stories, and in groups that you know and trust and want to support," he said. "And if you're part of a group, the theory is that you'll perform better as a borrower than if it was some disconnected credit card company."

Some prominent venture capital firms, including Accel Partners and Benchmark Capital, have rallied around the idea. Jim Breyer, an Accel partner who serves on the board of Wal-Mart Stores, is a Prosper director, as is Bob Kagle, a general partner at Benchmark, who also serves on eBay's board.

Mr. Larsen said the site's two-month testing period went well, and as of last week, Prosper had attracted lenders with a total of about $750,000 to lend.

Although Prosper is among the first to try this business in the United States, the idea has a track record abroad. Zopa.com, which operates in Britain, introduced a similar service in March (also with backing from Benchmark Capital) and has attracted more than 50,000 registered users, said Richard Duvall, Zopa's chief executive. At any given time, he said, about 15 percent of the users are either lending or borrowing money.

Mr. Duvall would not disclose the privately held company's revenues, but said he was "very pleased with our numbers" — so much so that he planned to start a site in the United States to compete with Prosper this year. Mr. Duvall said Zopa would also soon let users affiliate in groups, as Prosper does.

According to Asaf Buchner, a financial services analyst with the Internet consultancy Jupiter Research, that component could be critical to these sites becoming profitable.

Mr. Buchner notes that Prosper's group leaders receive a commission on the group's lending and borrowing activities, which they sometimes share among the group.

"If the sites are able to recruit strong group leaders with strong affiliations, they shift the marketing burden to those people, who have the incentive to go after others to become part of the group," Mr. Buchner said.

The group approach enticed at least one of Prosper's lenders, Stephen Russell, who registered with the site during its testing phase, and who is the brother of a Prosper engineer. Mr. Russell, the chief executive of a San Francisco technology company, 3VR Security, has put up $25,000 to invest on the site. He has also started a group to lend money to people affiliated with the Climb High Foundation, which trains women in tourist destinations to become climbing and trekking guides.

"I'm not just optimizing the rate of return on my assets," Mr. Russell said. "It's also a way to facilitate lending that'll help women in developing countries. That takes the lending and borrowing process one step further."
http://www.nytimes.com/2006/02/13/te...gy/13ecom.html





PC Tax Could Replace TV Licence
John Leyden

The BBC licence fee could eventually be replaced by a tax on having a PC instead of owning a TV, according to a Green Paper delivered this week. The government plans to retain the license fee for at least ten years but ministers are looking ahead to a time when high-speed broadband connections routinely deliver digital television channels to the nation's homes. In that event a fee based on television ownership could become redundant and the government could look at other ways to raise revenue, from subscriptions to taxing other access devices.

In a statement (http://www.culture.gov.uk/global/pre.../archive_2005/ dcms_green_paper_statement.htm) to Parliament this week, Culture Secretary Tessa Jowell said that "the changes in TV technology that will soon result in a wholly digital Britain... perhaps the greatest challenge the BBC has ever faced." The Times reports that a legal loophole means consumers could watch television or listen to radio over the net without having to pay a license fee, leaving the BBC with a funding shortfall that could run into the millions.

A Department for Culture, Media and Sport Green Paper (http:// http://www.bbccharterreview.org.uk/h...aper_home.html) on the BBC's long-term future proposes an end of the traditional license fee and "either a compulsory levy on all households or even on ownership of PCs as well as TVs". It cautions that these fees might be tough to enforce. Ministers are also consulting about the possibility of introducing a subscription model.

The Government reckons changes to the license fee will not be needed until 2017, when the BBC's next royal charter expires. However unnamed sources at the Department for Culture told The Times that the government would act earlier if viewing TV on the net became a hit with consumers. In August 2004, the BBC broadcast video clips from the Olympic Games over the net as an experiment. Six million UK homes currently have broadband connections, a figure that can only grow over time, spurring demand for innovative service like broadcasting over the internet. The majority of UK households will be watching TV over the internet by 2012, regulator Ofcom predicts.
http://www.theregister.co.uk/2005/03/03/pc_tax/





RIAA Bans The Reselling Of iPods With Preloaded Music

Although it may seem like a feasible idea, the Recording Industry Association of America (RIAA) says that reselling an iPod or MP3 player with music already preloaded on it is illegal.

"Selling an iPod preloaded with music is no different than selling a DVD onto which you have burned your entire music collection," the RIAA said in a statement to MTV.com. "Either act is a clear violation of U.S. copyright law. The RIAA is monitoring this means of infringement. In short: seller beware." Many people have been selling their used iPods online with thousands of songs preloaded on them.

Andrew Bridges, a lawyer for eBay that specializes in copyright and trademark law, told MTV.com, "It really depends on individual circumstances. I'm not sure the law is settled. If I'm a college student and I want to supplement my income by buying 100 iPods and selling them at a significant premium, that's probably not going to fly. But if I've had my iPod Shuffle for two years and I'm tired of it and I go out and buy a 60 gig video iPod and want to sell my old Shuffle, but don't want to purge the music first, that's probably legal."

Bridges said that he is not aware of a legal case that deals with this issue, but the law does not have strict guidelines in this instance. "Normally, only a copyright holder has the right to distribute copies of a work," said Bridges. "There is a very clear provision in the statue that says if you are in possession of a copy that has been lawfully made, you can distribute that copy without violating the copyright holder's copyright. That seems to suggest that there shouldn't be a case against a casual user disposing of copies they made for personal use when one is getting rid of one's own iPod."

On the other hand, RIAA President Cary Sherman disagrees. "Both cases Andrew cites are different types of infringement, it's just that the damages are higher for someone engaged in it for commercial benefit versus someone who isn't," he told MTV.com. "Unlawful reproduction or distribution is infringement. There is no fair use when someone is getting a complete copy of a work, especially a creative work and especially when it could have an adverse impact on the marketplace for selling or licensing that work."

A seller who had video iPods on the eBay market preloaded with over 6000 songs has already been contacted by the RIAA. Moreover, the RIAA is reaching a system of agreement with eBay where people who try to sell loaded iPods will get a warning.

The RIAA also addressed the issue of brand new iPods being sold with preloaded content on them, like Boston's TvMyPod which sells video iPods preloaded with DVD content the customer has purchased. TvMyPod's owner, Vijay Raghavan, said that his business is not breaking the Millennium Copyright Act because the customer gets the original and the copy and the DVDs do not get decrypted in order to load them onto the iPod.

Sherman said that the RIAA's hands are tied in this case. He said that technically they are not allowed to do without a license, but there is no such license that exists.
http://www.fmqb.com/Article.asp?id=174065





RIAA Says Ripping CDs to Your iPod is NOT Fair Use
Fred von Lohmann

It is no secret that the entertainment oligopolists are not happy about space-shifting and format-shifting. But surely ripping your own CDs to your own iPod passes muster, right? In fact, didn't they admit as much in front of the Supreme Court during the MGM v. Grokster argument last year?

Apparently not.

As part of the on-going DMCA rule-making proceedings, the RIAA and other copyright industry associations submitted a filing that included this gem as part of their argument that space-shifting and format-shifting do not count as noninfringing uses, even when you are talking about making copies of your own CDs:

"Nor does the fact that permission to make a copy in particular circumstances is often or even routinely granted, necessarily establish that the copying is a fair use when the copyright owner withholds that authorization. In this regard, the statement attributed to counsel for copyright owners in the MGM v. Grokster case is simply a statement about authorization, not about fair use."

For those who may not remember, here's what Don Verrilli said to the Supreme Court last year:

"The record companies, my clients, have said, for some time now, and it's been on their website for some time now, that it's perfectly lawful to take a CD that you've purchased, upload it onto your computer, put it onto your iPod."

If I understand what the RIAA is saying, "perfectly lawful" means "lawful until we change our mind." So your ability to continue to make copies of your own CDs on your own iPod is entirely a matter of their sufferance. What about all the indie label CDs? Do you have to ask each of them for permission before ripping your CDs? And what about all the major label artists who control their own copyrights? Do we all need to ask them, as well?

P.S.: The same filing also had this to say: "Similarly, creating a back-up copy of a music CD is not a non-infringing use...."
http://www.eff.org/deeplinks/archives/004409.php



RIAA et al. Says CD Ripping, Backups Not Fair Use
Ken "Caesar" Fisher

If anyone has any doubts about the content industry's resolve to destroy fair use and usher in new ways of charging you for uses that were previously both free and fair, look no further. As part of the triennial review of the effectiveness of the DMCA, a number of content-related industries have filed a joint reply (PDF) with the government on the effectiveness of the DMCA and the challenges that lay ahead for copyright. As you might expect, the document is a celebration of the DMCA, and the industries are pushing for even more egregious abuses of technology to fatten up their bottom lines.

With regards to the argument that the DMCA is bad law because it prevents users from making backups, the joint reply dismissed such arguments as "uncompelling." First, they argue that there is no evidence that "any of the relevant media are 'unusually subject to damage in the ordinary course of their use.'" This "cart-before-the-horse" argument suggests that people do not need to backup anything that does not have a high failure rate—a view that fundamentally misunderstands the purpose of backups. Furthermore, they argue that the success of DVD sales vis-à-vis VHS demonstrates that whatever problem there might be, it's not big enough to matter to consumers, because DVD sales are skyrocketing while VHS isn't. Thus high sales volumes are indicators that the consumer are well served, which is an argument that we'll hope never takes hold in the pharmaceutical industry (Vioxx sure did sell well!).

Such are the lengths they will go through in order to keep the anti-circumvention provisions of the DMCA intact. But supporting the status quo isn't in their interest. No, the idea is to embrace and extend. To wit, the joint reply also argues that making backups of your CDs is also not fair use.

The [submitted arguments in favor of granting exemptions to the DMCA] provide no arguments or legal authority that making back up copies of CDs is a noninfringing use. In addition, the submissions provide no evidence that access controls are currently preventing them from making back up copies of CDs or that they are likely to do so in the future. Myriad online downloading services are available and offer varying types of digital rights management alternatives. For example, the Apple FairPlay technology allows users to make a limited number of copies for personal use. Presumably, consumers concerned with the ability to make back up copies would choose to purchase music from a service that allowed such copying. Even if CDs do become damaged, replacements are readily available at affordable prices. Similar to the motion picture industry, the recording industry has faced, in online piracy, a direct attack on its ability to enjoy its copyrights. (emphasis added)

As you can see, the argument is hinged partially on the cost of replacements. Why should you be allowed to make backups of CDs you've purchased when you can replace them? And why should CD backups be legal when users can already decided to purchase from (DRM-laden) services that do allow the limited copying of lossy music files? Here, again, we see the way in which the RIAA et al. would like to see contract law take over the domain of fair use. "Leave it up to DRM, you big dummies!"

But they're not done with that argument. The real kicker is buried in a footnote, where the joint reply suggests the unthinkable: that making copies of CDs for any purpose may, in fact, be infringement.

Nor does the fact that permission to make a copy in particular circumstances is often or even "routinely" granted, see C6 at 8, necessarily establish that the copying is a fair use when the copyright owner withholds that authorization. In this regard, the statement attributed to counsel for copyright holders in the Grokster case, is simply a statement about authorization, not about fair use.

Allow me to translate: just because people have been copying CDs in the past doesn't mean that that they had the authorization to do so, and a general trend does not override such explicit authorization. But as the EFF has picked up, the RIAA is engaging in a little historical revision. Their last comment about the Grokster case is attempting to change the substance of comments that were uttered by their own legal counsel. Why they would do this is abundantly clear when you see the statement in question:

"The record companies, my clients, have said, for some time now, and it's been on their website for some time now, that it's perfectly lawful to take a CD that you've purchased, upload it onto your computer, put it onto your iPod."

It looks like someone is having a change of heart.

In the world of the joint reply, if and when the RIAA and its member studios say that copying your CDs is not permitted, then it's not permitted. Forget fair use. Forget historical precedent. The joint reply here is arguing that copyright owners have the authority to deny what has become fair use—what their own lawyers have admitted is fair use in front of the Supreme Court of the United States. The upshot is that this argument suggests that the most common form of CD "copying"—namely ripping CDs for use on computers and portable players—is not necessarily fair use. The joint reply adds:

Similarly, creating a back-up copy of a music CD is not a non-infringing use, for reasons similar to those the Register canvassed in detail in her 2003 determination that back-up copying of DVDs cannot be treated as noninfringing. [Ed note: see above arguments.] While we recognize that access controls may in some circumstances affect copying, the fact remains that there is no general exception to the reproduction right to allow back-up copying (except the limited exception in § 117 for computer programs) and thus no justification for allowing circumvention of access controls for this purpose.

Inasmuch as the joint reply was grafted in defense of the DMCA, it remains unclear if the RIAA has any plans to take up this line of argument in front of legislators or the public. It does mark, however, yet another development in the erosion of fair use, and it demonstrates that the insidious notion of "customary historic use" stems from part of the industry's campaign to legislate new business models that fly in the face of fair use, the doctrine of first sale, and limited copyrights.
http://arstechnica.com/news.ars/post/20060215-6190.html





The Great HDCP Fiasco
Alan Dang

You want to know a secret? None of the current ATI or NVIDIA graphics cards will support the full capabilities of Windows Vista.

But let’s start from the beginning. This story starts with my upcoming LCD Monitor Round-Up. As you know, a good monitor should last several years and outlive every other component in your PC, other than perhaps a keyboard or a mouse. So, when it came time to do another review of LCD monitors, my attention turned towards “Windows Vista-ready” monitors: those with HDCP. After all, it makes no sense to recommend a monitor that will go obsolete in just a few months.

At the time I started my article, there were only 10 PC monitors with DVI/HDCP support (we’re reviewing 5 of them). I was disappointed, but what was surprising is that many of these monitor manufacturers weren’t advertising their HDCP support. For monitors, HDCP support is the most important feature for having a “future proof” solution.

What is HDCP?

HDCP stands for High-bandwidth Digital Content Protection and is an Intel-initiated program that was developed with Silicon Image. This content protection system is mandatory for high-definition playback of HD-DVD or Blu-Ray discs. If you want to watch movies at 1980x1080, your system will need to support HDCP. If you don’t have HDCP support, you’ll only get a quarter of the resolution. A 75% loss in pixel density is a pretty big deal – Wouldn’t you be angry if your car was advertised as doing 16 mpg, and you only got 4 mpg? Or if you bought a 2 GHz CPU and found out that it only ran at 500 MHz?

As part of the Windows-Vista Ready Monitor article, I was going to publish a list of all of the graphics cards that currently support HDCP. I mean, I remember GPUs dating as far back as the Radeon 8500 that had boasted of HDCP support.

Turns out, we were all deceived.

GPU Support for HDCP

Although ATI has had “HDCP support” in their GPUs since the Radeon 8500, and NVIDIA has had “HDCP support” in their GPUs since the GeForce FX5700, it turns out that things are more complicated -- just because the GPU itself supports HDCP doesn’t mean that the graphics card can output a DVI/HDCP compliant stream. There needs to be additional support at the board level, which includes licensing the HDCP decoding keys from the Digital Content Protection, LLC (a spin-off corporation within the walls of Intel).

After some investigation, Brandon and I determined that there is no shipping retail add-in board with HDCP decoding keys. Simply put, none of the AGP or PCI-E graphics cards that you can buy today support HDCP.

I did not believe this at first. Surely, I was misinterpreting the content of the emails I was receiving. After all, everyone is hyping up H.264 support and HD-DVD/Blu-Ray playback. When I go to http:// www.ati.com/products/RadeonX1900/specs.html I see HDCP support listed. Am I supposed to know that the board doesn’t support it because I can go to http://www.ati.com/products/radeonx1900/ radeonx1900xtx/specs.html and see that HDCP is omitted? If that’s the case, am I supposed to know that the board has “48 shader processors” when it’s only listed in the GPU specifications page?

What we’ve confirmed

We’ve been able to confirm that none of the Built-by-ATI Radeons support HDCP. If you’ve just spent $1000 on a pair of Radeon X1900 XT graphics cards expecting to be able to playback HD-DVD or Blu- Ray movies at 1920x1080 resolution in the future, you’ve just wasted your money.

NVIDIA, being a GPU manufacturer was unable to discuss the plans of board manufacturers. We contacted all six of NVIDIA’s Tier-1 board partners. None of the GeForce 6 or 7 video cards available on the market, including the most recently released GeForce 7800GS, have HDCP support. So if you just spent $1500 on a pair of 7800GTX 512MB GPUs expecting to be able to play 1920x1080 HD-DVD or Blu-Ray movies in the future, you’ve just wasted your money.

How can these companies be so oblivious? Playing Devil’s Advocate, I thought to myself that maybe, just maybe, by the time Windows Vista comes out, most people are going to upgrade their GPU. If the HDCP support was very expensive, then paying for the HDCP license now would be like paying for something you don’t use. So I dug around for HDCP licensing costs. Turns out, that the answer is available at the HDMI website. HDCP licensing requires a $15,000 annual fee and a per-device fee of $0.005, i.e. a fraction of a cent. That’s not too expensive. There goes that argument.

Upgrade path for HDCP?

Video cards are the only components in a PC that have gone up in price over time. Yet manufacturers are trying to sell video cards that don’t support HDCP? The technology has been around for years. Microsoft made it public in March 2005 that HDCP would be required for Windows Vista and reiterated it again in April 2005 – certainly the video card manufacturers were given this info before the public were. Moreover, what about companies who are already paying the $15,000 annual company fee because they produce HDCP-compliant products for televisions?

Despite my discovery that HDCP licensing is fairly cheap, I’m still trying to find an answer. There must be a silver lining somewhere. Maybe, just maybe, existing cards can be retrofitted for HDCP support. Maybe it’s simply a matter of a BIOS flash where each board gets its own serial number. If that were true, the worse case scenario would be that customers would pay a few bucks for the HDCP license.

Turns out that this was also wishful thinking.

An ATI representative said: “People will not be able to turn on HDCP through a software patch since the HDCP keys need to be present during the manufacturing. We are rolling out HDCP through OEMs at this time but we have not finalized our retail plans yet.”

As I pressed for more information about potential retail plans (i.e. trade-in programs, whether existing boards already have traces for the HDCP hardware where it can be plugged in), I got only a vague response:

“We cannot get into more detail at this time, as any further discussion would get into our trade secrets. However, we do promise to give you a full update on our retail plans once they are finalized.”

I’m not going to speculate on whether ATI’s reticence is because they’re trying to downplay a big fiasco, or if they’re trying to keep their super generous solution secret to throw off the competition. There’s actually no way to know.

Well, what about NVIDIA? They were actually very direct: “The boards themselves must be designed with an extra chip when the board is manufactured. The extra chip stores a crypto key, and you cannot retrofit an existing board after the board is produced.”

Wow. You can pick your favorite expletive.

The blame game

Blame Canada?

As ATI is a GPU and board manufacturer, I’m disappointed that Built-by-ATI video cards lack HDCP support. Think about it. The GPU engineers are smart enough to know that their GPUs need to support HDCP, but their board engineers aren’t? Is it even possible to build a GPU without thinking about the board that has to go along with it? ATI is extremely reticent to give us any more details about “Retail Plans.” Maybe ATI owners will get lucky, and ATI will have some sort of free upgrade program. Maybe ATI owners will get shafted, and buyers of X1900XT’s are going to find themselves with a video card that cannot play HD-DVD or Blu-Ray at 1920x1080. Who knows?

Blame Santa Clara?

What about NVIDIA? Personally, I think they have the least blood on their hand for two reasons. One, they aren’t a board manufacturer. That excuse alone wouldn’t be good enough for me though.

What really gets them off the hook is that NVIDIA has been offering their board manufacturing partners designs with HDCP support since May 2005. Likewise, NVIDIA has actually shipped HDCP-enabled GeForce 6200 and 6600’s in Sony Media Center PCs. Those boards just aren’t manufactured at retail. In retrospect, they did their part. It was the board manufacturers who failed us. I don’t need to name names, because they ALL failed us.

Blame the other Santa Clara company?

HDCP is the brain-child of Intel, and now belongs to a spin-off company, Digital Content Protection, LLC. They’re the ones who profit off all of the licensing fees. If HDCP licensing were cheaper, might we have seen more PC products with HDCP support? Possibly. It still seems to me that HDCP has relatively benign pricing when it comes to licensing. It's half a cent per item. If you compare that to licensing fees for HDMI, you'll see that while both have the same $15,000 annual fee, HDMI licensing is 4 cents/per unit (if you use the maximum discount as an example). Should we blame Intel for creating HDCP in the first place? I don’t think so. HDCP was a technology made in response to Hollywood’s requests. Blue laser technology can only go so far without content.

Blame Hollywood?

HDCP is an artificial requirement – there’s no reason why HD-DVD or Blu-Ray needs content protection. Although the movie industry is among the wealthiest of all industries, Hollywood has made things tougher in their paranoia of software piracy. Can we blame Hollywood for demanding HDCP? Maybe a little bit, but they’re not responsible for this current fiasco. Movie studios have done their fair part to make high-definition home video a possibility. From the get go, Hollywood made it clear that content protection was going to be necessary for high-definition video and they gave the electronics industry ample warning. HD-DVD and Blu-Ray are coming in 2006. Television manufacturers have been putting HDCP into HDTVs from as far back as 2002. While Hollywood is certainly responsible for pressuring Microsoft into requiring HDCP for Windows Vista, they set their ground rules early on.

Is it our fault?

Think about it. If consumers and reviewers didn’t use the terms GPU and graphics card interchangeably, this wouldn’t be a problem. When it was disclosed that Microsoft required HDCP for high-definition HD-DVD or Blu-Ray playback in Windows Vista, everyone turned their attention to monitors, assuming that GPUs would support it. We all know the what happens when you assume. Likewise, why didn’t reviewers investigate if features in a GPU actually made it to the board level? Most importantly, we as consumers never clamored for HDCP support.

So in a way, even consumers are at fault, right? No way. Only the truly twisted would claim that the victims brought it upon themselves. Do any of us “ask” for Direct3D or OpenGL support? It’s a given. Consumers never demanded HDCP support because it was already thought to be there.

Alan's thoughts

This is a tough situation. The PC world simply isn’t ready for high-definition video playback via HD-DVD or Blu-Ray. There failures occurred at so many different levels. I’ve probably burned a few bridges in this article, and I probably won’t be reviewing any video cards in the near future. Nonetheless, this was a train that had already left the station. Keeping quiet about the problem wouldn’t have stopped the customer outrage when Windows Vista was released. The solution to this problem isn’t technical. It’s political. I hope that board manufacturers will own up to the challenge and explain their actions to their customers. There's still time to come up with a solution.

Brandon’s thoughts

Without a doubt, this is huge, startling news. As much as ATI and NVIDIA have been promoting H.264 decoding with their latest GPUs, it’s pretty shocking to see that apparently none of the shipping retail cards on the market have been built to take advantage of it. To add insult to injury, it appears that a line of Sony GeForce 6200s and 6600s offer HDCP support, yet the latest high-end GeForce 7800 GTX cards don’t. How’s that for irony?

While some of you may not plan on upgrading to Vista at the end of this year, this is eventually going to affect you if you ever planned on watching hi-def movies on your PC in the future. Microsoft will eventually end support for Windows XP; already, their Games Division is planning Vista-exclusive titles such as Halo 2. It will only be a matter of time before other software developers follow suit, forcing anyone who’s remotely interested in gaming to upgrade to Windows Vista.

Anyone with a GeForce 6/7 or Radeon X1K card who was planning on buying a BD-ROM or HD-DVD drive later this year for their PC may want to hold off on that purchase. Quite frankly, this article should affect the purchasing decisions of potentially anyone in the market for a new PC or graphics card right now that’s even remotely interested in watching hi-def movies on their PC sometime in the future.
http://www.firingsquad.com/hardware/..._hdcp_support/





Google Video DRM: Why Is Hollywood More Important Than Users?
Cory Doctorow

With the introduction of its new copy-restriction video service, Google has diverged from its corporate ethos. For the first time in the company's history, it has released a product that is designed to fill the needs of someone other than Google's users.

Google Video is a new video-search and video-sales tool, through which users can download videos that have been uploaded by their creators or by others who have the rights to them, either because the videos are in the public domain, or because they are used in a way that satisfies the "fair use" defense in US copyright law.

Part of the Google Video offering is a store that sells videos. Some of these are delivered in a locked format of Google's devising that restricts how Google's users can play and use the videos they buy. This Digital Rights Management system (DRM) is like many of those used by Google's competitors in that it doesn't attempt to model any copyright system in the world, but rather reflects a one-sided vision of how copyright should work and imposes that unilaterally on Google's customers.

Here's how the Google Video DRM works: when you download a restricted video from Google, it locks that video to your account and software player. Every time you want to play the video, your player has to communicate with Google to determine whether you are currently permitted to play it; if the player doesn't get the answer it's looking for, it won't play the video. The specifics of how this works aren't available -- Google hasn't published any details of how the security is implemented, committing the cardinal sin of "security through obscurity."

The video is encrypted (scrambled), which means that it is unlawful for competitors of Google (or free/open source software authors) to make their own players for the video, even if they can figure out how to decrypt it. Other DRM vendors, like Apple, have threatened to sue competitors for making players that can play their proprietary file-formats.

Why Has Google Done This?
The question is, why has Google done this? There's no Google customer who woke up this morning looking for a way to do less with her video. There's no Google customer who lacked access to this video if he wanted it (here's a tip: enter the name of a show or movie into Google and add the word "torrent" to the search, and within seconds Google will have delivered to you a link through which you can download practically everything in the Google DRM catalog, for free, without DRM -- although it may be illegal for the person you get it from to send it to you).

That's not to say that there's nothing problematic about getting your video through Google this way. But the problems of the inability of the entertainment industry to adapt to the Internet are the entertainment industry's problems, not Google's. Google's really good at adapting to the Internet -- that's why it's capitalized at $100 billion while the whole of Hollywood only turns over $60 billion a year.

But once Google starts brokering the relationship between Hollywood and their audience, this becomes Google's problem too, which means that all the absurd, business-punishing avenues pursued by Hollywood are now Google's business, as well.

It appears that the main reason Google got involved in DRM was to compete with Microsoft and Yahoo, both of whom have created online video stores with movies and shows from major entertainment companies. These companies demand that their works be locked away in wrappers that restrict users in ways that have nothing to do with copyright law and so if you want a license from them, you've got to play ball, even though no customer wants this. You can't exactly put your offerings online under a banner that says, "Now with fewer features!"

This Time, Google's Users Don't Come First
This isn't the first time Google's had a major industry demand that it design a product in a way that didn't put Google's users front and center. As documented in John Battelle's excellent book The Search, there was a strong push on Google in the early days to adopt graphic advertising banners for the site. All of Google's competitors were doing it, making a fortune at it, and no one wanted to advertise via text-ads even though its users clearly found them them less invasive than graphic banners.

But Google hewed to a brilliant and successful strategy of never putting a supplier's need above its searchers' needs. This, more than Google's controversial "Don't be evil" motto is the true force driving its most successful offerings. Google refused to graphic ads and only accepted ads from suppliers who shared its view of how to deliver a quality service to its users.

Abandoning this is a terrible idea and one that's exacerbated by design decisions in Google's DRM technology. The outcome is a Google service that opens the company and its users to unprecedented new risk.

Google DRM and Copyright
Google's DRM has the potential to drastically re-shape the contours of copyright law, turning a few entertainment companies' wishful thinking about the way that copyright would work if they were running the show into de facto laws.

Some examples of user-rights that Google Video DRM takes away:

Under US copyright law, once you buy a video, you acquire a number of rights to it, including the right to re-sell it, loan it to a friend, donate it to your kid's school and so on. But with Google Video DRM, none of this is possible: your video is locked to your account and player.

Educators, archivists, academics, parodists and others have the right to excerpt, copy, archive and use any video in their work, under the US doctrine of fair use. However, Google's DRM tool stops them from doing this, and Google's video can't be played on anyone else's tool.

When I questioned Google Video's Peter Chane about this, he said that Google DRM is "user-friendly" -- but none of the user rights embodied in the US copyright law are accommodated by Google's DRM. Google's view of "user-friendly" only encompasses the design of the user-interface, not the rights that users enjoy under the law.

Revocation and Changing the Deal
Google DRM player can be "revoked" -- field updated without user permission or intervention. This isn't the standard in media players -- for example, iTunes requires that you explicitly grant permission to the application before it updates. Where auto-update prevails, the possibility for abuse is dramatic -- for example, a magistrate once tried to get ReplayTV to field-update the units it had sold to monitor its customers' use of the device as part of a dispute about the legality of one of its features. The idea was that the spyware would be implemented to gather the information required for the trial. The owners of ReplayTVs were the potential victims there, having products they'd purchased crippled after the fact (a judge overturned the magistrate's idea before it could be implemented, but other companies, such as AOL, have been forced to field-update their software to court order).

Google DRM auto-updating raises the possibility that some day the same thing might happen to them -- either because Google was ordered by a court to do so, or because one of Google's customers responds to news of Google's DRM being defeated (Chane and other DRM manufacturers universally acknowledge that all DRMs will eventually be subverted by their attackers) with a demand to "update" the software in a way that changes what few rights Google does give you when you buy your movies from them.

Google won't comment on whether they've entered into any arrangements with their suppliers that would require them to do this, and there lies the problem. Your ongoing enjoyment of the property you buy from Google is dependent on their ongoing relationship with their suppliers. If you buy a Warner Brothers DVD from Tower Records, it doesn't affect you in the least if Tower and Warners have an ugly dispute. You've bought it, it's yours. But with Google DRM, auto-update means that it's never really yours. Third parties always have the possibility of taking away the rights you bought, after you bought them.

Alternative Players
DRM systems are protected by the Digital Millennium Copyright Act (DMCA), a 1998 law that makes it illegal to break them. That means that where a DRM is in place, no competitor can reverse-engineer your player and make a compatible one -- something that is otherwise lawful.

DVDs were the first widely-released DRM media. The effect of DRM on DVDs was to deprive DVD owners of the fruits of an open market in players. In the ten years that DVDs have been in the marketplace, no new features have been introduced for the platform, robbing us of the dividends on our investment in DVDs. By contrast, DRM-free CDs ushered in the era of the MP3, home karaoke, time-shifting, media servers, iPods, mashups, MP3 CDs and all the rest of the value that has accumulated in our music collections, the dividend paid on our investment in the CD format.

But even DVDs are less restrictive than Google DRM. DVD players can at least be manufactured by anyone willing to enter into a restrictive contract with DVD-CCA, a licensing body that controls the keys and patents for DVDs.

Google has no licensing program at all, and no publicly disclosed plans for developing such a program. In other words, your Google movies only play on Google's player, and no one but Google gets to make a Google player.

This is particularly worrisome in the case of the Google DRM system because it requires that you have a live Internet connection to Google every time you want to play a movie. That means that every time you watch a Google DRM movie, they get a record of your viewing. What's more, if you're not on the Internet, or if Google's servers are unreachable, you can't watch your movies. Google competitors aren't anywhere near this onerous with their DRM -- Netflix doesn't know when you watch a DVD; even Microsoft doesn't gather this much information on your video-watching habits. TiVo erases all personal information before aggregating its viewer stats.

And if Google goes bankrupt (stranger things have happened -- just ask anyone who ever bought and loved a Commodore computer), that's it, game over. No authentication server to approve your video viewing, no alternative player that skips the authorization step, and no legal way to make such a player. (Google says that it's working on a version with offline viewing capability, but this isn't present in the current version of its DRM)

That said, it's a near certainty that alternative Google players will be developed -- though the legality of these players is unclear. Nevertheless, just as with DVDs and iTunes, players like VLC and converters like DVD X- Copy will surely emerge for Google DRM. Will Google sue the people who make these players?

The company won't say. They do say that they prefer to use their field- update capability to break the compatibility with these players, but one wonders whether this will be much better, from a user-centric point of view. After all, if you buy or download a tool that lets you enjoy your lawfully acquired movies in a lawful way, what business does Google have in reaching into your computer to take that away from you?

What Else Could Google Have Done?
Has it come to this? Has Google gone from being a company where the customer always comes first to a company where "what else could we have done?" is the order of business?

Of course, there are lots of things Google could have done. It could have digitized all the movies and shows that are presently in its store with DRM and simply indexed them with links to buy them on Amazon, just as it's done with millions of books through its astonishing and wonderful Google Book Search program.

It could have concentrated on indexing only videos that are found in the wild on the Internet, and selling only videos that come from rightsholders who don't want to shaft Google's customers -- repeat the strategy it pursued when it stuck to its text-ad guns and refused to go with graphic banners.

It could have delivered tools that you use, in your home, to index your personal video collection -- a Google toolbar for the media in your living room.

It could have done all or none of this. But by choosing to copy the mistakes of its competitors, Google has put its destiny in the hands of an industry where treating customers like criminals is the order of the day -- these are the companies that search cinema-goers and make them leave their cameraphones with the usher, after all.

These companies don't want Google to succeed at DRM. That would give Google too much bargaining power in licensing agreements (see how much power Apple has accumulated through the penetration of its lock-in DRM suite -- iTunes, iPods and iTunes music -- the music industry's attempts to change their licensing terms with Apple have been laughed out of the Cupertino board-rooms). The entertainment companies prefer consortia of battling companies that can't come out with a coherent bargaining position.

Take DVD Blu-Ray and DVD-HD: there we have two technology consortia warring to deliver the worst product they think they can sell. The format with the most restrictions has been promised the sweetest licensing deal for content. Blu-Ray recently announced that it would add region coding (locking DVDs to playback on players bought in the same country as the disc) to its final specification -- after years of insisting that region coding just frustrated honest users.

Google DRM doesn't come from a fragile consortium, so it isn't supposed to be a winner: it's supposed to be a strategic tool to weaken the power of Yahoo and Microsoft's DRM (also not supposed to be winners). The ultimate trajectory for DRM is in consortia like Coral, where all the losers in the DRM format-wars have been gathered together by the entertainment companies, who've promised them preferential treatment if they'll help overturn the Macrovisions, Microsofts and Apples of the DRM market.

There's no way Google can win the DRM wars. The end-game for the entertainment companies is to use the sweet lure of content to turn Google from an unmanageable giant into a biddable servant, dependent on long- term good relations with its licensors to preserve its customers' investment in its video.

The only way Google can win this game is not to play at all. The only way Google can win is to return to its customer-comes-first ethic and refuse any business-arrangement that subverts its customers' interests to serve some other industry's wishes.
http://www.boingboing.net/2006/02/14...o_drm_why.html





Hollywood vs.Your PC: Round 2

Legal options in digital entertainment are growing. But they come with restrictions that can hobble your ability to enjoy the content you've paid for--and even threaten your control over your system.
Dan Tynan

As we move to a world where all entertainment is delivered digitally, the battle over copyright protection is turning into a full-blown war. And consumer rights may end up being the biggest casualty as media companies hunker down and try to redefine what users can and can't do with the content they've paid for and the hardware they own.

From Apple's iTunes and Real Networks' Rhapsody music network to movie rental sites like CinemaNow and Starz' Vongo, legitimate digital media services are exploding. But each additional option brings a new battle, new restrictions, and even new dangers for unsuspecting users. Copy protection included in Sony BMG audio CDs allowed virus writers to co-opt the system and sneak onto users' PCs. Satellite and HD Radio, which promise higher-quality audio and more content, may become difficult for listeners to record if the music industry has its way. And TV fans are finding that cable stations are limiting their ability to time-shift shows; pending federal legislation may curtail their rights even more.

Worse, since we last looked at this battle in 2002, technology firms, which once struck a balance between the rights of content owners and the rights of users, have sided more and more with Hollywood as they strive to secure the content they believe will help sell their products.

We'll look at the multiple fronts of the digital wars--from file sharing to music to TV--and give you a hint of what's next.

Copyrights and Wrongs
Musical Discord
Digital TV Behind Gates
Vista Blurs High-Def
Playing Fair
Digital Media Faq

Copyrights and Wrongs

Peer-to-peer file sharing remains the bogeyman, driving entertainment companies toward ever- increasing control over content. Despite the U.S. Supreme Court decision holding Grokster liable for the actions of its copyright-defying users, and despite more than 13,000 lawsuits filed by the Recording Industry Association of America and the Motion Picture Association of America, file swapping is still growing. According to P-to-P research site Big Champagne, some 6.5 million U.S. users share files at any one time--up more than 30 percent from the year before.

Media companies have responded in two ways. Using their influence in Washington, D.C., they've pushed for laws friendlier to the rights of content owners. At the same time, Hollywood has threatened to withhold access to its libraries unless electronics manufacturers build devices with sufficient copy protection.

This is not the way the copyright process was supposed to work, according to Jessica Litman, author of Digital Copyright (Prometheus Books, 2001).

"Copyright law was intended to protect reading, viewing, and listening as much as creating and distributing," says Litman, a professor of copyright law at Wayne State University Law School. "Now it takes what people previously saw as their rights and treats them as loopholes the copyright owners will close, if they can."

Take books, for example. You can read a book anywhere you want, skip chapters at will, give the book away or sell it, quote portions of it on your blog, or scan it into your PC and print out a copy. And when the book eventually becomes part of the public domain, you can do anything you please with it--including printing copies and selling them at a profit.

Buy an electronic book, however, and your rights start to wither. You're now subject to the terms of an end-user license agreement. Depending on the EULA, you may be able to read the book on only a limited number of machines (usually just one), and you probably won't be allowed to sell it, lend it, or make backup copies.

As you move up the content spectrum to digital music, movies, radio, and TV, the rules can be just as restrictive.

"[Hollywood's] model is to make experiencing copyrighted material--reading a book, listening to music, or watching a movie--legally like going to a movie theater," Litman says. They want you to buy a ticket, watch ads, eat only their food, leave when they want you to, and pay for it all again each time you do it, she says.

Brad Hunt, senior vice president and chief technology officer for the MPAA, disagrees, arguing that content owners are seeking ways to offer users more options than they have with today's media. "Instead of saying 'here's the movie locked to a piece of plastic, take it or leave it,' content owners may make other rights available to you to do more with it," he explains.

Musical Discord

The primary battleground for digital content has long been music. To combat widespread file swapping, the record industry has attempted both copy protection for CDs--most notoriously in the form of Sony BMG's XCP rootkit (see "Copy Controls: How Far Will They Go?" for more)--and digital rights management schemes for online music. Each has made life more difficult for legal purchasers of music.

Usually, copy-protected CDs don't prevent you from making copies so much as they limit how many copies you can make and where you can make them. If you played a protected Sony CD on your PC, for example, you could rip three copies of the CD to your hard drive. If you then put this music into your Windows Media Player library, you could burn three other CDs. But Sony's XCP scheme prevented iPod fans from easily copying MP3s from the CD to their music libraries, though a workaround was available upon request.

Online music rules are even more complex. You can play music purchased from iTunes on up to five systems, for example, but if you want to add a sixth, you have to log on to one of the other machines and "de-authorize" it. You can burn a playlist to a CD, but no more than seven times. You can share tunes across five computers on a local network, but the other users can only listen to the music. Still more restrictive are the rules for iTunes' video downloads--there's no sharing at all.

Yet as DRM schemes go, iTunes' FairPlay system is fairly transparent, Jupiter senior analyst Joe Wilcox notes. "People know it's there only if they try to violate it," he says, adding that with Windows DRM, he's had problems with both legit music playback and the purchasing process.

Moreover, incompatible DRM schemes can lock users into a particular technology. If you purchase your music from iTunes, realistically you have two options: to buy iPods for the rest of your life--since iTunes music won't play on other players--or to ditch your library and start over. Players that support Windows Media Audio DRM are more plentiful, but similar restrictions apply to them.

Later this year, new DRM technologies may challenge the hegemony of FairPlay and WMA, says Bill Rosenblatt, president of GiantSteps Media Technology Strategies and editor of DRMwatch in New York. One approach, the Marlin DRM scheme, is based on personal identity: It would let you access content on a variety of portable devices according to who you are, not what device you're using. Another DRM platform, code-named Coral, would allow service providers to convert content from one DRM format to another, making it playable on a wider variety of devices. Both schemes are backed by two closely allied consortia whose members include 20th Century Fox, Hewlett-Packard, Philips, and Sony.

Navio, a small Silicon Valley startup, is taking yet another tack. Instead of buying digital files, users, in Navio's scheme, buy the rights to enjoy them. So when a user is at work but wants to hear a song that he downloaded at home, he can log in to Navio, which confirms that he has rights to the song and allows him to download or stream the song to a new device. Files can still use DRM technology to prevent unfettered file swapping, while consumers get many of the same freedoms they've grown used to with analog content.

"If the rights are properly defined and ubiquitous, they'll become more valuable to consumers than the actual files," says Navio CEO Stefan Roever. Then only people with no money and lots of time will fool around with file sharing, he adds.

Navio already enforces media rights for the Fox Sports and Fox Music Web sites, and at press time it was preparing to announce a deal with a major record label.

Meanwhile, another front is opening in the war over digital music: The RIAA is pushing for legislation that would prohibit listeners from recording or sharing individual songs broadcast via new digital radio services unless they paid a fee for each song. Nevertheless, the group favors being able to record digital radio in blocks of 30 minutes or longer.

"We support time-shifting," says RIAA spokesperson Jenni Engebretsen, but not "cherry-picking individual songs and storing them in a library on an MP3 player in a manner that substitutes for a sale."

According to Public Knowledge, a consumer rights group based in Washington, D.C., such rules would extinguish fair-use rights that listeners have enjoyed in the past--there are no such restrictions on the right to record personal copies of songs from traditional radio broadcasts.

Digital TV Behind Gates

The battle over rights in the digital TV arena is already well under way. By March 1, 2007, according to Federal Communications Commission rules, all new TV devices (tuners, VCRs, DVRs, and set-top boxes) for sale in the United States must be capable of receiving digital TV signals. For the past few years, media conglomerates have been scrambling to keep their expensively produced, highly profitable digital content from drifting all over the Net. But the protections they've devised may keep viewers from doing things they are accustomed to doing--such as recording, time- shifting, and sharing shows.

In 2003, the FCC ruled that over-the-air digital TV shows must carry an 8-bit "flag" that broadcasters could use to limit how viewers recorded such programs; all TV gear would have had to recognize this flag. But last May, a federal court struck down the broadcast flag, ruling that the FCC had exceeded its authority. Flag supporters have tried to persuade Congress to authorize the flag; that has yet to happen.

The MPAA's Hunt says such controls are necessary. "If content owners have no assurance there will be some form of protection from redistributing digital TV, that high-value content normally provided to broadcasters would move into the pay-TV world," he says. That could mean networks like ABC and NBC might no longer get the rights to show Star Wars or Harry Potter movies, for example.

Meanwhile, TiVo owners recently got a taste of what life under such a flag might be like. Last September the popular DVR service changed how it responded to the Macrovision copy protection built into pay-per-view and video-on-demand content. For the first time, content owners could prevent viewers from recording PPV and VOD shows on a DVR. They could also require deletion of shows from the recorder after a certain period. TiVo already prevented viewers from burning protected content to DVDs or using the TiVoToGo service to transfer it to a PC.

Fred von Lohman, senior staff attorney for the Electronic Frontier Foundation in San Francisco, says that this change is a classic case of content owners taking away features consumers have paid for.

"Two years ago the TiVo you bought did one thing, and now suddenly it does something different," he says. "Despite the fact we're buying more media than ever before, products are treating us more and more like pirates each day."

But TiVo VP of product marketing Jim Denney says the changes have had little impact on the vast majority of TiVo users.

More restrictions may be on the way for home recording. At press time, sponsors had just introduced the Digital Content Security Act (HR 4569) in the House. This bill would close the "analog hole" by requiring devices that allow users to make digital copies from analog sources to employ copy protection technology. If the analog hole were closed, protected shows could carry signals that prevented them from being copied by any device at all, or could limit copies and prohibit them from being digitally redistributed, or could restrict viewers' time-shifting abilities to within 90 minutes after a broadcast.

Next-generation home recording via high-capacity blue-laser DVD technology promises a little more freedom but also additional restrictions. Both Blu-ray and HD DVD discs (the two major blue-laser DVD formats) will carry a digital watermark that will let players identify illegally copied discs and prevent playback of the content. Backers of both Blu-ray and HD DVD formats have announced their support for "mandatory managed copies," which will allow home users to make a single copy of their high-definition discs and share them across a home network--something that consumers can't legally do with today's commercial DVDs.

Vista Blurs High-Def

If microsoft has its way, your digital entertainment options will be served via a PC in your living room. To fully enjoy the benefits of digital content, however, you may have to buy new hardware.

When Windows Vista appears later this year, it will allow playback of HD video--but it may do so only if your monitor or TV supports Intel's High- bandwidth Digital Content Protection scheme. Without a DVI or HDMI port that handles HDCP, your aging 42-inch plasma set could display the film at lower DVD-quality resolution, or not play it at all (for details, see "Most Monitors Won't Play HD Video,"). The same will likely be true of Blu-ray and HD DVD recorders, though final specs of the content protection scheme for those two formats were not available at press time.

The Vista DRM scheme puts playback decisions in the hands of content providers. But showing the content at a lower resolution is more likely than shutting it off, says Marcus Matthias, a product manager in Microsoft's Digital Media Division. "Frankly, we'd have zero interest in doing all this if it wasn't something [that content owners that Microsoft partners with] were interested in having," he admits.

Although HDTVs sold today typically support digital copy protection via their HDMI ports, many older models do not. According to Rhoda Alexander, director of monitor research for market research firm iSuppli in San Jose, California, the percentage of HDCP-compatible computer monitors was "in the low single digits" when she surveyed the market in 2005.

HDCP will make it more difficult for consumers to share HD content--and will keep them from making legal "fair use" copies--by preventing the capture of HD programs by unlicensed devices. But like most DRM schemes, it's unlikely to stop determined pirates. In 2001 researchers at Carnegie Mellon University uncovered several flaws in the scheme, long before it was developed for commercial purposes. German electronics company Spatz is already selling devices that it claims convert HDCP signals for non-HDCP displays.

Olin Sibert, a longtime DRM developer, believes that Vista's DRM, while technologically impressive, is unlikely to be effective in the long run. "Content that can be experienced can also be copied. You can place obstacles in the way, but you can't ensure content will never be copied."

Playing Fair

Only the most rabid BitTorrent users would want to live in a world where copyrights don't exist, but nobody wants one side to call all the shots either.

"Hollywood is speaking with one voice, holding the reins on the one thing everyone needs: content," says EFF's von Lohman. "In that kind of environment, consumers are going to get screwed."

But Microsoft's Matthias says that it's in everyone's best interest to find solutions that media firms and users can live with. "At the end of the day, if consumers don't see a value proposition for next-generation content, there are a lot of very big companies who've made some very big bets that aren't going to pan out," he notes.

As happened with the backlash against Sony BMG's copy protection technology, users must reject bad DRM schemes--not because they violate computer security, but because they punish the people who actually paid for the digital content, say consumer advocates.

"One approach [to piracy] is to make it as hard as possible to create and share illegal copies of digital content," writes Navio's Roever in his corporate blog. "Another is to make it as attractive and easy as possible to buy digital content. The more successful the industry becomes at achieving the latter, the less it will need to rely on the former."

Digital Media Faq
Music
Work with--and around--content protection on your digital music files.

How do I know whether my CD has copy protection on it? Copy-protected CDs often come with a label identifying them as such, though that's not legally required. Amazon.com clearly identifies CDs containing copy protection schemes, so searching there for the CD title may turn up the answer.

Ack! My CD has DRM all over it. What can I do? Not a lot. Most tools for bypassing DRM are illegal under the Digital Millennium Copyright Act, though low-tech workarounds exist. Some users have circumvented Sony BMG's copy protection by placing a strip of tape on the CD's outer edge where the data layer is, to stop the PC from reading it--but if the tape comes loose, it could gum up your CD drive. Other solutions involve drawing over the outside track with a black marker or disabling the computer's autorun feature--and thereby preventing the copy protection software from loading--by holding down the <Shift> key as the CD loads.

Can't I rip MP3s without a PC? If your MP3 player offers in-line recording, you can legally rip MP3 files directly to it from your stereo, bypassing your PC. Archos, Cowon, iRiver, and Samsung all make players with this feature. Video Without Boundaries' Flyboy portable video player can do the same with DVDs. Since this method relies on analog output and doesn't break digital encryption, it doesn't run afoul of the DMCA.

Video
Beware of viewing and recording pitfalls as you navigate the digital video waters.

My DVR has "flagged" a program I recorded and will delete it in a week. Is it still possible to keep a copy? Nope. If content owners use Macrovision's copy protection to flag a program, you can't burn a copy of that show to any other storage medium. But this affects only a small number of pay-per-view and video-on-demand programs, and it applies only to TiVo subscribers--so far. Other video recorders or TV service providers may have different rules; for example, the Dish satellite network lets you record pay-per-view programs but not its Dish on Demand movies.

I'm in the market for a new high-def display. Should I wait until the DRM dust settles before I buy? Not necessarily. Virtually all new HDTVs have an HDCP-compatible digital interface, which is the one new HD players will use. More and more PC monitors do, too; look for the term "HDCP-HDMI" in the product description as you shop.
http://www.pcworld.com/news/article/0,aid,124164,00.asp





Control
Bruce

Sony and Bertelsmann were once the prides of Japan and Germany. Having grown up to become world-spanning megacorporations, they spawned a reckless delinquent named Sony BMG. As children often do, the youngster is having a hard time finding its way in the world - selling music, in particular, as well as controlling the distribution of music it manages to sell. So Sony BMG resolved to turn your computer into a battleground.

The war, of course, is the struggle to control unauthorized duplication of copyrighted material. Music fans demand to make copies, and to its credit Sony tried to meet them halfway. But en route to the meeting place, the company turned down a path that leads to a dark future.

On at least 50 titles released last year, Sony BMG included software that allows users to make up to three copies. To count the number of duplicates made, the discs install programs on the user's computer. And to keep savvy customers from monkeying with the software, the company included a rootkit, secret code that makes itself and the copy-protection files invisible.

The ability to hide files is an invitation to every hacker with, well, something to hide. Miscreants use it to cloak programs designed to take control of the host computer. Players of online games use it to conceal cheats. But there was more to Sony BMG's rootkit. The code could also send information about the user's system back to the mothership.

Blogger Mark Russinovich wrote about the Sony BMG exploit in November, and music fans exploded in righteous fury. After much denial and obfuscation, Sony BMG provided an uninstall routine. It also stopped manufacturing rootkitted titles and recalled those it had shipped. But the damage had been done. More than 2 million discs were already in consumers' hands, ready to blast holes in the system of anybody unfortunate enough to pop one into a CD drive.

I'm not going to scold Sony BMG. The problem here is larger than one company's effort to own its customers' desktops and spy on their behavior. The real issue is the blurring of lines between blackhat hacking and legitimate business. It's one thing when Russian gangsters take over a few million computers to shake down online casinos. It's another when commercial enterprises adopt the same methods to protect their market. At that point, good corporate citizenship devolves into vigilantism and the implicit trust between supplier and customer unravels.

Sony BMG isn't the only company to have mistaken malicious exploits for mainstream business practices. The British software developer First 4 Internet, which licensed the rootkit to Sony BMG, built its product on techniques developed for creating viruses, and the company's programmers left a trail of newsgroup requests for information about hacks like crippling CD drives. Ironically, First 4 Internet appropriated parts of its music player from an app known as LAME - a bald infringement of the LAME copyright.

Imagine the mayhem if this kind of attitude were to become widespread: Coca-Cola would use your desktop to propagate spam about its latest bottle-cap sweepstakes. Vonage would keep Skype offers from reaching your inbox. Samsung would make sure that, when your browser tried to load Sony.com, it reached a fake Sony site where nothing worked. Companies would compile vast archives of customer data merely because they could, hoping they'd stumble on a revenue model.

It's time for lawmakers, trade groups, and public-interest organizations to get down to the hard work of hammering out standards for what businesses can and can't do to customers' computers. Such an effort will need to be international, because the Net knows no bounds. It will need to come up with simple, understandable language for end-user licensing agreements. It will need to draw red lines around unacceptably invasive hacks and map gray areas between spying and market research.

I'm not holding my breath, though. After all, we asked for this. We didn't want to ruffle the feathers of the goose that laid the golden egg of technological progress, so we allowed manufacturers to claim more and more control over the ways we use their products and what they can do with our information. It should come as no surprise that they're using that power as a cover for bigger, possibly more lucrative schemes.

You may not be interested in the digital rights war, but that doesn't mean you'll have the luxury of sitting on the sidelines. Because the other side is very, very interested in you.
http://www.wired.com/wired/archive/1...osts.html?pg=5





SonyBMG DRM

Heise Online is reporting about yet another example of the ever-warming relationship of copy protection and rootkit technologies. The affair started with the digital rights management system Sony BMG was using to protect audio CD's. Now, we can also confirm (thanks to Rüdiger from our German office!) that at least the German DVD release of the movie "Mr. & Mrs. Smith" contains a copy protection mechanism which uses rootkit-like cloaking technology .

The Settec Alpha-DISC copy protection system used on the DVD contains user-mode rootkit-like features to hide itself. The system will hide its own process, but does not appear to hide any files or registry entries. This makes the feature a bit less dangerous, as anti-virus products will still be able to scan all files on the disk. However, as we note in our article on rootkits, it's not that uncommon for real malware to only hide their processes.

Our message to software companies producing any software (not just copy protection products) is clear. You should always avoid hiding anything from the user, especially the administrator. It rarely serves the needs of the user, and in many cases it's very easy to create a security vulnerability this way.

If you suspect you have this copy protection system installed on your computer and you wish to remove it, the manufacturer is providing an uninstaller.

A note to our local readers: we can also confirm that the Finnish release "Mr. & Mrs. Smith" does not contain this particular copy protection technology.
http://www.f-secure.com/weblog/archi....html#00000810





New DVDs Already Sparking Copy-Protection Confusion
John Borland

When the first high-definition DVDs finally hit shelves this spring, a mad scramble may ensue--not for the discs themselves, but to figure out what computers and devices are actually able to play them in their full glory.

Unraveling the mystery won't be easy. Many, if not most, of today's top-of-the-line computers and monitors won't make the cut, even if next- generation Blu-ray or HD DVD drives are installed.

That's because strict content protection technologies may automatically degrade the DVDs' picture quality, or even block them from playing at all, if the right connections and digital protections aren't in place. Even the most expensive computers sold today mostly lack those features.

Acronym soup

A glossary of DVD and content-protection terms.

Blu-ray: The high-definition video format backed by Sony.
HD DVD: The high-definition DVD format backed by Toshiba.
HDMI: High-definition multimedia interface, a digital connection technology increasingly used for computers and HDTVs. Usually associated with HDCP.
DVI: Digital visual interface, a digital connection technology often used with computer monitors.
VGA: Video graphics array, the analog connection technology widely used for computer monitors today. Does not support content protection.
HDCP: High-bandwidth Digital Content Protection, an Intel- created technology that encrypts content as it passes from the computer to the monitor.
AACS: Advanced Access Content System, a set of content protection technologies that will be used on both kinds of next- generation DVDs.
Indeed, the consumer backlash has already begun. Graphics-chip makers such as ATI and Nvidia are drawing criticism online for marketing products that are "ready" for these new copy-protection tools but that nevertheless lack critical features needed to let the discs play at top quality.

"This is a sticky issue," said Richard Doherty, an analyst with the Envisioneering Group. "It's going to be very confusing for consumers, and it's going to be very daunting" for computer makers.

The copy-protection muddle stems from Hollywood studios' desire to avoid the film piracy that was born when tools for unlocking the encryption technology on today's DVDs began spreading online in late 1999.

Along with a picture quality upgrade, the new generation of DVDs will be shipped with new digital rights management controls, with strict computerized rules attached saying exactly when and how a movie can be played.

For people who buy standalone DVD players and HDTVs, this mostly won't be a concern, as the right plugs will generally already be built in.

But computer buyers will face a far more challenging landscape. The everyday analog plug that connects most computers to monitors today doesn't support copy protection, and so is viewed as unsafe by Hollywood studios. Movies playing on a computer over this ordinary analog connection will likely be downgraded to near-DVD quality.

Even worse is the so-called DVI plug that sends high-quality digital signals to a monitor but also doesn't support copy protection.

That offers an even greater risk of copying in Hollywood's eyes. Studios have persuaded Microsoft to add a feature in the upcoming Vista operating system that can shut down that connection altogether, unless the computer has an Intel-created encryption technology called HDCP, or High-bandwidth Digital Content Protection, turned on to guard the signal all the way to the monitor screen.

Put another way--if the DVD doesn't like your plug, your monitor may go black.

A newer connection technology called HDMI almost always comes with built-in encryption. If both the computer and the monitor have this installed, everything should work as planned.

Simple question--will it work?
Today, it's extraordinarily difficult to find information that explains whether a company's products will be compatible with the new DVDs.

Part of the problem is that the copy protection technology for the discs hasn't been officially announced, even though the new DVDs are supposed to hit shelves in just three months. A cross-industry group is working on a technology called the Advanced Access Content System, slated to protect both HD DVDs and Blu-ray discs, and is expected to release its work as soon as next week.

The HDCP technology has widely been expected to be a critical part of those rules, however. In an unusual step, Microsoft told computer makers last year, as part of a preview of its new Vista operating system, that they should start using the Intel-based technology in order to be ready for the high-definition video rules.

IBM engineer Don Leake, who works with the AACS group, confirmed Wednesday that Intel's HDCP would be approved under the new rights- management rules.

But this opens up a new set of potential land mines for consumers.

In one early example, graphics-card maker ATI has marketed some of its top products as "HDCP ready" and says that its newest "All-in-Wonder X1900" card "gives effortless playback of next-generation HD DVD."

However, it doesn't mention that "ready" probably won't be good enough to make the high-definition discs play at full quality. The graphics systems actually have to have the Intel technology turned on, which has to be done by the computer maker, or by ATI itself when it sells a graphics card at retail.

Nvidia, another big graphics-chip maker, says it too has built support for HDCP into its chip designs but that it's up to the computer makers to turn it on. Almost nobody has so far, and that's drawing bitter criticism from gamers and other hardware enthusiasts online, who call the situation a "nightmare."

"We certainly are concerned over end users, and we want to make sure there is no confusion," said Godfrey Cheng, ATI's director of marketing. "But we leave it in the hands of the board vendors and (computer makers) as to whether they want to put that in."

Much of what happens when discs are finally put into computer will ultimately depend on the movie studios themselves. On each disc, it's up to them to set the rules that make all of these alphabet-soup technologies swing into action.

For example, if studios are worried that consumers might be disappointed by degraded resolutions and blacked-out monitors, they could in theory relax those rules until the approved technologies are more widespread.

Backers of the new content protection tools say they're necessary to keep the high-definition discs at the cutting edge for years to come, however.

"What we're coming out with is something that's probably going to live for 15 years or more," IBM's Leake said. "HDCP, even though not well deployed today, will be well deployed in five years. We are planning for the future."
http://news.com.com/New+DVDs+already...3-6040261.html





HBO's Harrasment of PVR Owners
Thomas Hawk

Ouch! Bitten by DRM Well last week I wrote about Dave Zatz's report that HBO wanted to have their content coded as "Copy Never" for PVR users. In response to Dave's post I tried to clarify to people that HBO's DRM request to the FCC was not about DVR usage but about VOD usage, what I felt was an important distinction.

Well no sooner than this morning we now have a screen shot up at Ed Bott's Media Central about a "Restricted Content" error that he is receiving on his Media Center PC for an HBO show that he recorded. The message reads: Restricted Content, Restrictions set by the broadcaster and/or originator of the content prohibit playback of the program on this computer.

What's worse is that according to Ed, he is receiving this message on the computer that actually recorded the programming, not a second computer that he copied the file too.

Under the best case scenario, this message is yet another example of how DRM inadvertently gets in the way of legitimate and fair use. If content providers want to use DRM it is super important that they make it as seamless for the fair use consumer as possible.

Under the worse case scenario, of course, HBO is actually no longer letting you record their content on your PVR for personal use. While I doubt this is the case, the day that HBO does this I will call them up and cancel my account -- no matter how badly I want to watch the upcoming season of the Sopranos.

Either way this looks bad for HBO who is quickly building a reputation as one of the most consumer unfriendly broadcasters out there.

Update: Ed Bott is still trying to troubleshoot why HBO will not allow him to play back recorded content on his Media Center PC. This is a big problem. If Ed Bott, who is one of the top Windows Pros out there, is having trouble figuring this out, just imagine how stuck your average Joe out there is going to be when he runs across the same thing. Ed's headline today, HBO stops working with Media Center, is kind. If these kinds of bugs continue to threaten fair use get ready for bigger headlines that say things like, Yes, in Fact, Microsoft's DRM Does Truly Suck.

It may not be fair to generalize based on Ed's experience here but he is a pro and it is troubling to see this kind of interference for a legitmate fair use of content that he has purchased. He is paying for HBO afterall and he also is paying for his Media Center PC.

I posted a comment on Ed's blog about how I recently switched my email reader from Microsoft's Outlook to Mozilla Thunderbird. I actually like Outlook more but even with the actual original Outlook disk that I had purchased myself I could not get Microsoft's buggy authentication to work. After several hours of screwing around with it I just gave up and installed Thunderbird (which I'd highly recommend by the way). This was not my first problem with Microsoft authentication and if Microsoft hopes for consumers to take a middle ground position with regards to DRM then it will need to work a lot better than it is working for Ed right now.
http://thomashawk.com/2006/02/hbos-h...vr-owners.html





How to Value Ratings With DVR Delay?
Stuart Elliott

WOULD the opening greeting on "Saturday Night Live" sound as compelling if it began "Live plus 24 hours from New York" or "Live plus seven days from New York?"

That is the multibillion-dollar question being asked on Madison Avenue as agencies and advertisers consider the implications of new data from Nielsen Media Research on television viewing in households with TiVos and other types of digital video recorders.

Late in December, Nielsen, part of VNU, started distributing its ratings information in three versions: live, the traditional way television is watched; live plus 24 hours, counting how many people who own DVR's played back shows within a day of recording them; and live plus seven days, counting playback within a week of recording.

For some prime-time series, like the hit drama "Grey's Anatomy" on ABC, the so-called live-plus ratings show slight but noticeable gains compared with the live-only viewership. But it is estimated that 50 percent to 70 percent of viewers playing back shows zip through the commercials, casting doubt on their worth to advertisers.

Nielsen's adoption of the new methodology was spurred by the growing use of digital video recorders, which are already estimated to be in 7 percent of the nation's 110.2 million TV households. DVR's are among the technologies that are starting to remake the way people watch television, along with video iPods, video-on-demand and broadband connections for personal computers.

"This is all coming at us fairly quickly," said David F. Poltrack, chief research officer at the CBS Corporation in New York and president of its new research unit, CBS Vision, "so measurement of these new devices has to come fairly quickly."

CBS and the other big broadcasters have welcomed the ability to find out how many people are using digital video recorders to shift the time they view programs. By contrast, Nielsen has been unable to provide reliable ratings data to measure the playback of programs that were taped on videocassette recorders.

"For 20-something years, the metric has been live and VCR viewing, but the DVR allows for the measurement of playback that the VCR never did," said Michael Shaw, president for sales at the ABC Television Network in New York, part of the Walt Disney Company.

Mr. Shaw cited a statistic from Nielsen about the Jan. 15 episode of "Grey's Anatomy." The episode drew a rating of 8.5 among 18-to-49-year-old viewers who watched it live, he said, which means that 8.5 percent of television households in that group saw the episode as it was broadcast. When the data was expanded to include live plus seven days, Mr. Shaw said, the rating rose to 8.7.

To be sure, that was no huge gain. But when the media landscape is fragmenting as never before, with broadcasters losing viewers to cable TV, the Internet and video games, every tenth of a ratings point — and the advertising revenue it potentially represents — matters.

"You can't fault them for selling everyone their programs reach," said Bill McOwen, executive vice president and managing director at MPG in New York, a media agency that is part of Havas.

And research, he said, "shows there is a very desirable type of person who is prone to this technology — the younger, more affluent individual" who is particularly coveted by networks and marketers.

Still, Mr. McOwen said, for many advertisers, "one has to question whether any viewing after the date intended is worth anything to them." He gave as examples the kinds of marketers that prefer to buy commercial time on Thursday nights, like retailers, automakers and movie studios, all of them seeking to stimulate demand for the coming weekend.

"If you're a film studio, how can you consider live-plus-seven viewing?" Mr. McOwen asked, adding, "The movie's being pulled from theaters by then if it had a poor opening weekend."

Several major media agencies have published reports saying that they want only live ratings to count when they sit down to negotiate with the broadcasters to buy commercial time for the coming TV season. Those negotiations, for what is known as the upfront market, are expected to begin in May for 2006-7; last spring, before the start of the 2005-6 season, the broadcasters booked about $9 billion worth of commercials in advance.

The large media agencies that disdain live-plus ratings include Carat USA, part of the Aegis Group; Magna Global USA, a unit of the Interpublic Group of Companies; and Mediaedge:cia, part of the WPP Group. That attitude, well before the upfront negotiations get under way, upset Mr. Shaw of ABC, who told the trade publication Mediaweek that he would not work with agencies that insisted on live ratings only.

"It's not our intent to negotiate in a public forum," Mr. Shaw said in an interview last week. "But to say that zero percent of playback viewing counts is unreasonable. I don't think that's a fair position.

"If you waited to watch 'Grey's Anatomy' until Monday or Tuesday, all I'm saying is that it should count," Mr. Shaw added. He was alluding to the special episode of the series on Feb. 5, which ran after the Super Bowl postgame show.

Bruce Goerlich, executive vice president and strategic research director at ZenithOptimedia USA in New York, part of the ZenithOptimedia Group unit of the Publicis Groupe, said his agency was still developing a position on live-plus ratings.

"We're looking at very small numbers right now," Mr. Goerlich said of program playback, "and growth may not accelerate the way we expected it to." The reason, he said, is that several cable system operators once strongly promoting cable box-DVR combinations to customers "are stressing video-on-demand offerings instead."

Still, "we're not dismissing the DVR," Mr. Goerlich said, because use "might increase in the future."

Jon Mandel, chairman of MediaCom in New York, owned by WPP, said the dispute "is like fighting the last war."

"There is a small group of us working on something," Mr. Mandel said, "that will make television an even stronger partner in the marketing of goods and services."

Mr. Mandel, a member of the Media Policy Committee of the American Association of Advertising Agencies, declined to be more specific.

On Friday, a spokesman for the association, Kipp Cheng, said the opening general session of its annual conference, scheduled March 2 in Orlando, Fla., would feature a discussion of the issue by Jean Pool, chairwoman of the policy committee. Ms. Pool is also executive vice president and chief operating officer at Universal McCann in New York.

As they say on TV, stay tuned.
http://www.nytimes.com/2006/02/13/bu...a/13adcol.html





Big Air and Loud Tunes: In the Halfpipe, a Techno Cavalcade
Lee Jenkins

Only a member of the United States snowboarding team has the technological capacity to flip between songs on his iPod, answer a long-distance call from his agent and order some takeout, all while floating upside down 20 feet in the air.

Any American participating in the men's halfpipe competition at the Olympics on Sunday could well be wearing a multimedia entertainment system on his back. Among the team-issued jackets is a modern marvel that includes pockets for an iPod and a cellphone. The left sleeve features a removable control module with an LCD screen. The hood has two speakers set in the lining.

If the United States riders do not become weighed down, they may even add some medals to their ensemble.

Operating the jacket is relatively simple, if you are a teenager or a professional snowboarder. The halfpipe favorite Shaun White, who is both, could be listening to AC/ DC's "Back in Black," one of the songs on his iPod, when he hears a beep for call waiting. Perhaps a representative from his clothing line is trying to reach him.

With one push of a button on the control module, the music from the speakers is muted and White is free to chat. Thanks to Audex Down and Bluetooth technology, the hood acts like a fabric phone. White never needs to be out of touch, even if he is in the middle of the most important 30 seconds of his life. Imagine the conversations he could have. Mom, hold on a sec, I've got to nail this 1080 for the gold.

To think, American snowboarders did not want uniforms, fearing they would hamper individual expression. At the Olympics four years ago, all riders were required to wear uniforms made by Nike, a company that specializes in basketball more than snowboarding. "Seeing them wearing all those swooshes — it just felt kind of wrong," said Jake Burton, founder of Burton Snowboards.

In talking with its 10 sponsored riders, Burton Snowboards learned that the athletes cared as much about what a uniform did as how it looked. Riders wanted to listen to punk, hip-hop, country and rock, without having to wear headphones. They wanted to keep in touch with their families, their representatives and their buddies, from either a chairlift or a mountaintop. They wanted to be wired, in a wireless sort of way.

"What we got was a very smart jacket," the 2002 halfpipe gold medalist Kelly Clark said.

Burton has melded two snowboarding standbys — music and technology. Ever since the Beach Boys started recording surf songs and punk bands started marketing to skateboarders, music and extreme sports have been wedded. The most popular artists, like the most popular snowboarders, are young, creative and endlessly outgoing.

Technology is required to pump up. The halfpipe star Hannah Teter travels with two iPods, one for her room and one for her runs. The halfpiper Andy Finch, equally geared up, travels with three camcorders. Danny Kass came to Italy with an Xbox 360, bought the day before his trip so he could play video games in the Olympic Village.

"I guess you could say we're pretty tech," Kass said.

While most athletes like to streamline themselves for competition, snowboarders welcome distraction. They listen to their iPods as they compete, with the lyrics urging them on. To hear riders talk about what songs boosted them to victory, what songs contributed to their falls makes it seem as if their tunes are as important as their helmets.

The selections range from Finch's favorites (punk bands AFI and Flogging Molly) to Clark's mix (the Christian music singers Shawn McDonald and David Crowder). While Kass is still mulling which song to play at the Olympics, the halfpiper Elena Hight is finally close to a decision. She considered Outkast and 50 Cent but seems to be settling on "Ooh Aah," a song by the southern hip-hop duo Grits. "It's my new favorite," Hight said.

In addition to the material on their iPods, the riders request songs for an on-site D.J. to spin during their runs. While Olympic figure skaters generally choose classical music for their routines, Olympic snowboarders pick their sound with a stylist named D J Chainsaw. Residents of Bardonecchia will have D J Chainsaw to thank Sunday morning, when they are awoken by Cypress Hill and Black Eyed Peas, blaring through 24,000-watt Panasonic speakers.

"If it were only the music, people might cover their ears," said D J Chainsaw, whose real name is Micha Ruthardt. "But in the context of snowboarding, it works."

When riders are asked why they need a D.J. playing songs if they are listening to their iPod anyway, they dismiss the question as nonsensical.

A snowboarding contest is always part fashion show. The Americans are thrilled with their off-white uniforms that have red, white and blue pinstripes. They are not as pleased that rules prohibit them from keeping stickers on the bottom of their boards. In a subtle form of protest, some riders switched numbers during practice sessions.

Even if American riders lament the lack of nightlife and organic markets in Bardonecchia, they make their own fun. They pose for pictures on a snowplow. They flash hang loose signs at cameras. They show off their jackets to competitors from other countries. Here is the button to turn on the iPod. Here is the button to answer a call.

Whether all this gadgetry improves the medal count is uncertain. But it will surely allow American snowboarders to accomplish feats never seen before. The judges have to take note of a rider who can switch from the Ramones to the Beastie Boys, balance phone calls between friends and corporate partners, and still remember to stick the landing.
http://www.nytimes.com/2006/02/12/sp...wboarding.html





Film review

Bukkake Home Companion
Jen Collins

The house I live in has three apartments; mine is on the first floor. Anyone walking down the driveway might hear me talking on the phone, singing along to 24 Country Classics, or watching TV. This Saturday afternoon I watched American Bukkake 10 (2000, Jim Powers dir.), a video I received the other day as a gift from The Reverse Invisible Cowgirl. So because I like my neighbors and my mailman and don't want them to know I watch porns by myself during the day, I turned the radio volume up.

Scene I: Trinity Maxx; This American Life on KCRW

Trinity Maxx is the first person to speak in American Bukkake 10. "Waiting is the hardest part, I tell ya," she says to the camera, as a PA tells her "5 more minutes." They chat about how porn time is different than regular time, and she explains, again to the camera, "The plot thickens." I don't know what she meant. I do know she seems to have a bit of a Boston accent, she's white and very pretty. I wonder if she went to my high school.

Cut to Trinity's solo scene. She finds herself alone in a concrete room and decides it is the perfect place to strip off her silver two-piece and masturbate. So she does for a while, and then she's on a platform doing it more, but now in front of about 30 or 40 guys sitting crosslegged on the floor. I'm going to refer to these men as jerkoffs (the site for the video is jerkoffzone.com, so don't take it the wrong way). Someone claps from off-camera and the jerkoffs stand up. Another clap and they pull down their underwear. A third clap and they hold their underwear above their heads, and a final clap brings shouts of "Bukkake!" and the flinging of the underwear at Trinity, who laughs and throws a pair of black boxers into the air gleefully. This is supposed to replicate the ancient Japanese ritual of bukkake, probably, and it happens at the beginning of every scene.

Pretty much right after the underwear gets tossed, the jerking off gets going. Trinity leans against a trashbag-covered backrest. Lots of the noises she supposedly makes are overdubbed. Her lips are closed and still she aahs; her teeth are clenched and yet she oohs. That's the soundtrack, along with some instrumental music (I keep expecting it to stop for an operator to tell me that my call will be answered in the order in which it was received), the guys' heavy breathing and grunting, plus some loud cameras. She tries to look as if she is having a sensual and enjoyable experience but I don't believe her. Though I am trying not to say things like "She couldn't possibly enjoy having three dozen strangers beat off on her head!" In therapy, I've found myself making blanket statements about how people feel, and my therapist replies with a "why not?" or a "you think?" and I realize that I'm just being judgmental and stupid, because there's no telling what a person will do for love or money given the opportunity. Trinity says thank you to the jerkoffs sometimes, and she's sort of sweet to them.

The camera zooms in on a pubic hair in a puddle of semen on her boob. Every once in a while we see how the goblet is filling up. Goblet? Yes. She holds a plastic goblet under her chin the whole time. And more aahs from Trinity as she opens the valve on the cum-bong and chugs down the semen of however-many guys got theirs in the cup. Astonishingly, she does not vomit. She gags a little though. Three more guys wank on her as she puts the cum-bong down and the camera leaves her there, oohing and aahing and mmming on the cummy trashbags on the concrete floor.

I should say that the penises in American Bukkake 10 are diverse. Meaty ones, li'l pinkies; brown, peach, olive; rapid-fire pistons and dribbly limp-ons. Some of the guys are young, some aren't, and at least one is a real old Grampy, probably. He stands in the front row and flashes a naughty smile when he throws his shorts.

As Scene 1 ends, a Hindu woman on KCRW goes on and on about Catholicism and religious icons. I have a yucky thought about Apu offering someone a cum- squishee. I pause the TV, turn off the radio, and get up to make a peanut butter and jelly sandwich. Then I remember that KCRW plays one of my favorite shows on Saturday afternoons. I used to hate Garrison Keillor when I was a kid. I had a girlfriend whose parents were total fiends about listening to him and it bothered me. I think I'm growing up. His voice is soothing and... Midwestern.
http://kittybukkake.diaryland.com/021003_5.html





Sales Brisk For "Wal-Mart" Docu As Accusations Fly
Scott Roxborough

Berlin's European Film Market became the backdrop for yet another verbal battle between Wal-Mart and its filmmaker nemesis Robert Greenwald on

Tuesday. The Greenwald-directed film "Wal-Mart: The High Cost of Low Price" made for hot sales but heated words at the market.

The verbal clash followed a similar series of jousts in the U.S. when Greenwald's film came out last year utilizing grassroots distribution, promotion via the Internet and home screenings to rack up DVD sales of more than 110,000 units. Wal-Mart countered with a campaign decrying the movie and providing access to brothers Ron and Robert Galloway to produce a countermeasure movie titled "Why Wal-Mart Works: And Why That Drives Some People Crazy."

On Tuesday, Greenwald claimed that some buyers are worried that the retail giant might retaliate against them. A Wal-Mart spokesman dismissed those claims as "preposterous."

"We have experienced some scared theatrical distributors," Greenwald insisted after a "Wal-Mart" screening here. "They are afraid that their other movies will be pulled from the (retailer's) shelves if they distribute my film."

Wal-Mart spokesman Olan James countered in an interview: "To say that we'd retaliate against a distributor for carrying this film is simply preposterous. We've chosen not to carry either film in our stores -- the (Galloways') pro-Wal-Mart documentary or this anti-Wal-Mart film. But we're confident that the public will be able to spot the glaring inaccuracies throughout the (latter) film."

He was referring to the situation that arose in the U.S. last year with the release of "Why Wal-Mart Works." Lightning Entertainment's Richard Guardian said initially eager buyers from Brazil, Japan and Mexico, where Wal-Mart is a growing retail force, said they were worried that buying the film could have negative commercial repercussions for their DVD distribution business.

According to its own figures, Wal-Mart operates about 2,400 stores outside the U.S. In some territories, the retailer is a major player. In the U.K., for example, Wal-Mart is the second- largest retailer with its chain of ASDA-brand stores.

Lightning Entertainment said it has inked deals at the European Film Market for Germany, the U.K. and Australia/New Zealand. Guardian said he expects to close on Spain, Benelux and France this week and that several European pubcasters also are circling.

"The response here at the Berlinale has been unbelievable," Guardian said. "The film addresses global issues, and people are fascinated with the U.S. society and culture."

The docu's claims of runaway capitalism make it a natural for many European territories. Wal-Mart stories have been front-page news in such places as Germany, France and the U.K.
http://today.reuters.com/news/newsAr...IN-WALMART.xml





Giving gamers two windows to the Web: The Opera Browser for Nintendo DS™
Press Release

Opera Software today announced that it will deliver the World Wide Web to Nintendo DS users in Japan.

In Opera's agreement with Nintendo, Nintendo DS users will now be able to surf the full Internet from their systems using the Opera browser. The Opera browser for Nintendo DS will be sold as a DS card. Users simply insert the card into the Wi- Fi enabled Nintendo DS, connect to a network, and begin browsing on two screens.

Earlier this year, Nintendo reported that 13 million Nintendo DS systems were sold to consumers around the world within just 13 months of its debut in November 2004. Nintendo DS combines unique dual screens, touch screen, voice recognition and wireless and Wi-Fi communications capabilities. According to an independent market research company in Japan, Nintendo DS has become the fastest selling video games machine to top the six million sales mark in Japan in just over 14 months since its Japanese debut, breaking the old record held by Nintendo's Game Boy Advance.

"The incredibly popular Nintendo DS is already Wi-Fi enabled to support real time gaming, so adding Web browsing capabilities was a natural evolution for this device," says Scott Hedrick, Executive Vice President, Opera Software. "Gaming devices are growing more advanced and a great Web experience is becoming a product differentiator for gaming manufacturers. Opera is excited to work with Nintendo to deliver a unique dual screen, full Internet experience on Nintendo DS."

With an on-screen keypad and stylus, users can easily navigate the Web from their Nintendo DS with PDA-like functionality. Based on the same core as the Opera desktop browser, Opera delivers superior speed and rendering of Web pages on the Nintendo DS.

"Within just five seconds of turning on the system, the Nintendo DS is already fully operational. This makes it the ideal device to enable people to swiftly obtain the latest information from the internet, wherever they are," says Masaru Shimomura, Deputy General Manager of Nintendo's R & D Department. "Opera exceeded our expectations with its user friendly interface, quick access to all your favorite sites, ease of use and, most importantly, in making the best use of the Nintendo DS system's unique double screens and touch screen features. Opera is an important partner for Nintendo in our efforts to further expand the users of the Nintendo DS."

Nintendo Co., Ltd. held a presentation today in Tokyo, Japan, to announce updates for the Nintendo DS. Information on the availability of the Opera browser DS card has not yet been announced.
http://www.opera.com/pressreleases/en/2006/02/15/





Intel Ups Ante With 4-Core Chip

New microprocessor, due this year, will be faster, use less electricity
Matthew Yi

In an effort to regain market share that its smaller rival Advanced Micro Devices has aggressively taken in the past year, Intel Corp.'s chief technology officer
said Friday that the chip giant will start shipping microprocessors with four cores inside late this year.

To show the product is well on its way, Intel CTO Justin Rattner demonstrated a working server computer with a pair of the new microprocessors, code-named Clovertown.

The new chip will join Intel's line of server chips called Xeon, which has generated billions of dollars' worth of revenue for the Santa Clara company. That business, though, has been under pressure since Sunnyvale's AMD entered the segment with its microprocessor called the Opteron.

Chips with two cores have been the latest rage, with both Intel and AMD selling those microprocessors as their high-end offering. Apple Computer Inc.'s new iMac, which started selling last month, uses the dual-core chip.

Having multiple cores inside a chip is like having more than one engine under the hood of a car. The design allows chipmakers to keep improving performance of the microprocessor while holding in check the amount of electricity required to power it.

Not to be outdone, Randy Allen, AMD's corporate vice president of server and workstation division, said Friday that his firm is working its own quad-core processor for release next year.

Rattner said Intel's new chip will be faster than the Xeon server chips but use less electricity. He didn't elaborate on the new chip, saying those specifics will be made available at the chipmaker's developer forum in San Francisco next month.

Intel still commands the lion's share of the lower-end server computer market. AMD, it only major competitor, has been making strides with its Opteron microprocessors since they came out in April 2003.

According to data from Mercury Research, AMD's Opteron had 16.4 percent of the market in the most recent quarter. Intel's Xeon product line still leads by a wide margin.

AMD's gains are significant, considering its market share was virtually none only a year ago, said Martin Reynolds, an analyst at Gartner, a market research firm.

"Intel doesn't normally talk about this stuff, much less show it, this early," Reynolds said. "But with AMD's (rise) in the market, they want to make sure they don't leave any gaps for AMD to exploit. It's important from a credibility standpoint."

Apjit Walia, an analyst at RBC Capital Markets, agreed, noting that AMD is enjoying at least the perception that its products are better than Intel's chips.
http://sfgate.com/cgi-bin/article.cg...UGCOH6P2B1.DTL





Intel's Mantra: Let's Make A Deal
Tom Krazit

Would you avoid buying a PC with an Advanced Micro Devices chip inside because it wouldn't let you host an Internet conference call with six of your friends?

Chip giant Intel is betting that at least some people would. Last week, Intel cut a deal with voice over Internet Protocol provider Skype that calls for the VoIP company to provide advanced conference-calling features exclusively on PCs that run Intel chips. As long as the deal is in place, it could effectively keep customers who want to take advantage of multiperson conference calls from going with AMD-based machines.

Though few would argue that a niche feature like that is going to be a deal breaker for most PC buyers, the importance of the Skype-Intel alliance goes well beyond VoIP conferencing. Indeed, it's the latest, and certainly most prominent, example of Intel's new take on marketing: Lock in software partners as well as the PC makers.

Intel executives have talked at length over the past few years about moving past a marketing strategy that emphasizes chip speeds and power above all else. Paul Otellini, now Intel's chief executive, got the new effort rolling in 1999 when, as executive vice president and general manager of the Intel Architecture Group, he created operating groups that focused on developing software and finding new uses for Intel's products, said Bill Kircos, an Intel spokesman.

Expect more of these exclusive pacts as Intel takes a brass-knuckles approach to its long-running feud with AMD, particularly as Intel's Viiv platform strategy of bundling home-entertainment software with its chips shifts into high gear over the next few months.

Intel executives believe they can use their considerable software resources to improve the performance of processing-intensive applications such as VoIP and home entertainment by working with software application developers to help them understand how Intel's chips process data.

In the process, moves like the Skype deal, which will run for a limited but undisclosed period of time, are a way to block AMD from landing customers who want to use applications such as Skype's 10-user conferencing.

Not surprisingly, AMD is already crying foul. AMD officials claim this is just another example of Intel using its sheer size to decide where AMD is allowed to compete, reinforcing the notion that Intel doesn't play fair. AMD charged in a 2005 antitrust compliant that Intel uses its marketing programs in a selective manner to punish companies who have used AMD's chips, or to reward companies like Dell who have cut exclusive deals with Intel--claims Intel has strongly denied.

Performance in the eye of the beholder
In the past, Intel has set its products apart and improved the performance of applications such as games by adding new hardware instructions to its chips, said Kevin Krewell, editor in chief of The Microprocessor Report.

But there are no specific instructions in Intel's current Pentium D or Core Duo chips that enhance the performance of VoIP applications, an Intel representative said. Skype is using an operation called "Get CPU ID" to identify the type of processor running on the PC. The Skype software has been preset to only accept Intel's chips as having the performance necessary to host conference calls of more than five people, the representative said.

Almost all applications running on any PC perform the Get CPU ID operation as the system boots, said Dean McCarron, principal analyst with Mercury Research. That operation determines what type of processor is in the system and what performance features are available to the application, he said.

Critics contend that if there are no instructions dedicated to VoIP applications in Intel's chips, it's unlikely that Intel's dual-core chips are demonstrably more powerful than AMD's when it comes to hosting VoIP conference calls. In fact, third-party reviewers gave AMD dual-core chips an edge over Intel's last year, though Intel has closed the gap with the recent introduction of the Core Duo processor.

Henry Gomez, general manager of Skype North America, declined to comment on whether the company compared the performance of the two chips head-to-head on its software. A Skype representative later declined to comment on the company's relationship with AMD in general.

By the end of 2006, Intel is scheduled to release two PC chips, Merom and Conroe, that the company believes will tilt the performance balance back in its favor, Kircos said. For its part, AMD won't sit still in 2006; it's also planning to improve the performance of its chips. If there's no clear-cut winner on a performance basis, the product marketing strategy shifts to specific applications and content.

Viiv sets the stage
Viiv is a collection of dual-core processors, multimedia chipsets and software designed to enhance the performance of games, streaming movies and other home entertainment applications. Viiv PCs are rolling out from PC makers this year accompanied by links to special content, such as high-definition highlights of NBC's Olympics coverage, a lure announced by Intel earlier this year at the Consumer Electronics Show in Las Vegas.

That content is currently available to just about any PC, but Intel is extending the verification concept it advanced with the Centrino platform to Viiv. Intel verified that more than 90,000 hot spots worldwide would work reliably with Centrino laptops. It plans to do the same with Viiv, guaranteeing that certain content and home entertainment applications will run smoothly on Viiv PCs.

Given the Skype example, analysts say it wouldn't be a stretch for Intel to take the further step of using its marketing clout to secure exclusive content and software that will work only on Viiv PCs.

A similar strategy has worked very well for new Intel partner DirecTV, which has the exclusive rights to let football fans watch every National Football League game, under its NFL Sunday Ticket service. Any football fan with a television set can watch NFL games featuring their local teams, but those viewers can't watch games that feature cities outside of their designated geographic region unless they have a DirecTV satellite dish and pay extra for the Sunday Ticket. Intel and DirecTV plan to release a Viiv PC later this year that can accept content from DirecTV's satellites.

Savvy marketing or unfair competition?
AMD executives argue that any exclusivity clauses in Intel's partnerships are nothing more than an extension of its so-called market development funds, which provide PC makers with marketing money in exchange for displaying an Intel logo on their boxes, said Hal Speed, a marketing architect with AMD.

Intel's Kircos declined to comment on whether Skype was provided with marketing funds in exchange for making the multiperson conference calling feature exclusive to Intel under a similar program. But Intel's engineers did do the work needed to tweak Skype's software to accept Intel's chips as the default processor for those types of conference calls, he said.

Intel and Skype's deal is for a limited time only, Gomez said, after which AMD is expected to get a crack at opening up its chips to the advanced conference calling feature. But by moving first, Intel has seized the opportunity to paint itself as the preferred platform for Skype, much the same way gaming console makers fight to secure the initial release of sought-after games or cell phone providers pursue hot new phones.

"Grand Theft Auto: Vice City" was released in the U.S. on Sony's PlayStation 2 console in 2002 before making its way to the PC and Microsoft's Xbox in 2003. That limited exclusivity for one of the hottest video games ever released was a boon for PlayStation 2 sales, and Sony currently enjoys a dominant position in the console market, even though the Xbox and a standard PC are considered more powerful devices.

The same could soon be true for the PC market, which has always been about performance even as Intel has retreated from its strategy of emphasizing clock speed as the ultimate indicator of processing power. "If the technology is close enough that it becomes a wash in the consumer's mind, it could be the content that makes the buying decision clearer," Krewell said.
http://news.com.com/Intels+mantra+Le...3-6038282.html





A Wild Ride: The Digital Music Industry
Bryan Borzykowski

What happens when major players in an industry start suing their customers?

The advent of MP3 files, file-sharing technology and digital gadgetry such as the iPod means music lovers have more freedom to share music than ever before. But there's no consensus among industry executives on how to cash in on this brave new world.

For more than two years, the Recording Industry Association of America has brought suits against illegal file sharers, reasoning that downloading music for free is stealing. Legal digital sales are booming--the digital music industry had revenues of US$1.1 billion in 2005, up from US$380 million the year before. But the RIAA continues its strategy.

Last August, the RIAA targeted David Greubel, a Texas man accused of having 600 illegal songs on his computer. His daughter sent a protest e-mail to MC Lars, the rapper who wrote "Download This Song." The e- mail reached Terry McBride, CEO of Vancouver-based Nettwerk Music Group (who represents Lars). McBride is helping Greubel fight the suit.

"Litigating your fans, who are your best marketing and promotion people, is not the answer," says McBride. While most major label executives are staying quiet, he says they agree with his position.

Not Rob Brooks, vice-president of marketing for Toronto-based EMI. "Many countries have launched litigation," says Brooks. "In all cases, legal purchases increased once litigation started. If, following litigation, legal sales increased, that's the answer."

Increasing sales is important for an industry that's lost a lot of money in recent years. But, Nettwerk's McBride says, this decrease isn't a result of illegal file-sharing. He thinks it's to do with competition from other entertainment media, and the replacement cycle--CDs don't wear out. If anything, he says, digital downloading, which made Nettwerk more than US$300,000 last December, has started to offset losses.

McBride isn't the only industry exec to acknowledge that "digital is the future." According to Janis Nixon, senior marketing manager for Universal Music Canada's New Media department, "[Digital] is completely open to new possibilities." The industry was criticized for not reacting; Nixon says that's because labels "didn't have a partner we could sell legally through."

Now, the industry has hundreds of partners. There are more than 335 legal download sites--up 570% from two years ago. In Canada, consumers can choose between pay-per-download sites such as iTunes and Puretracks, or subscription/pay-per-download sites like Napster and iMesh, which use industry-sanctioned peer-to-peer file-sharing. Telecommunications companies such as Rogers and Bell also want to cash in. "You're going to see more convergence between music and wireless," says John Boynton, Rogers Wireless's senior vice-president and chief marketing officer. "A significant portion of new customers buy MP3 phones."

In Asia, the mobile-phone-related music market has exploded--cellphone downloads accounted for 96% of Japan's digital music revenues in the first nine months of 2005, and last May, SK Telecom, South Korea's largest cellphone operator, bought a controlling stake in a leading independent Korean record label. And in a report released January 2006, the International Federation of the Phonographic Industry, a global industry association, points out that, with more than 1.5 billion cellphone subscribers worldwide, "the sheer size of the mobile market presents the music industry with enormous opportunities." That, says Nettwerk's McBride, is music to his ears.
http://www.canadianbusiness.com/tech...13_74308_74308
















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