[JackSpratts]

Social Engineering 101: Mitnick and Other Hackers Show How it's Done
Elinor Mills

Kevin Mitnick knows that the weakest link in any security system is the person holding the information.

As a young fugitive hacker, he went to jail for breaking into computer networks, mostly by using his cunning and persuasion than his tech skills. He was an early master of the science of social engineering--manipulating people into doing what you want, such as giving out passwords and other information that unlocks sensitive information on networks.

Mitnick and a panel of other hackers discussed their social engineering pranks and gave live demonstrations at the Live HOPE (Hackers on Planet Earth) conference late on Saturday.

"Everything happened more than five years ago" and the statute of limitations has passed, he said. "I never said I didn't deserve to be punished, but it really went overboard putting me in solitary confinement" for eight months.

Mitnick, who was released in 2001 after serving five years in jail, announced that he has a contract to write his life story and showed a preview for a reality-based TV series in development in which he would test corporate networks by trying to break into them. As part of his plea agreement, he was banned from writing a tell-all until 2007. He also runs a security consulting firm and lectures.

Dubbed the "most dangerous hacker in the world," Mitnick was put in solitary confinement and prevented from using a phone after law enforcement officials convinced a judge that he had the ability to start a nuclear war by whistling into a pay phone, he said.

Mitnick didn't do any whistling on Saturday, but in his keynote following the panel he talked about how he listened in on FBI phone calls during the three years he evaded the FBI, left them doughnuts when he narrowly escaped raids and was chased down by a helicopter. He also demonstrated how to be able to see the phone numbers of callers on caller ID even when they have their number set to be blocked.
http://news.cnet.com/8301-1009_3-9995253-83.html





AFP Enlists Kids to Fight E-Crime
Charles Miranda

TEENS as young as 14 have been recruited by the Australian Federal Police to help fight online crime - recognition they are more net savvy than veteran agents.

Yesterday, 20 teenagers began working with the AFP in an Australian-first to develop strategies to catch cyber fraudsters, predators and even those grooming youths for acts of terrorism.

The move is part of a worldwide program, with children in the US, Canada, UK and 23 other countries being recruited and deputised to help fight e-crime.

The AFP said the move was not a gimmick or an experiment but recognition that evolving technology was truly only understood by those who used it as part of their everyday lives.

The young were also best placed to identify evolving crime, including cyber bullying and identity theft, as well as helping police develop strategies to warn parents.

AFP high tech crime centre head Kevin Zuccato said: "We realised the only way to do that effectively was to listen to digital natives, the young people of today and those born into the internet".

"It's almost programmed into their DNA how to use technology and how to navigate around the ocean that is the internet."

"For us 30-, 40-, 50-year-old police officers, policy makers and government officials, it's impossible - in my view - to develop appropriate effective strategies unless we listen to the people we're trying to protect."

Mr Zuccato said teens gave advice about chat room chatter, jargon and code used in mobile phone SMS.

"(The teens) can help us dissuade criminals, educate children to stay safe online, empower themselves to make the right decisions online and if we can provide policies with their information that means we minimise the number of victims," he said.

Twenty teenagers from Canberra were brought to the UK as part of a global strategy to use their knowledge to develop a charter for the UN.

One recruit, 15-year-old Ella, said she hoped what she knew and could pass on to police would help others.
http://www.australianit.news.com.au/...013044,00.html





San Francisco's Mayor Gets Back Keys to the Network

IT administrator Terry Childs is in jail for previously refusing to hand over the admin passwords to the city's multimillion dollar WAN
Robert McMillan and Paul Venezia

San Francisco Mayor Gavin Newsom met with jailed IT administrator Terry Childs Monday, convincing him to hand over the administrative passwords to the city's multimillion dollar wide area network.

Childs made headlines last week when he was arrested and charged with four counts of computer tampering, after he refused to give over passwords to the Cisco Systems switches and routers used on the city's FiberWAN network, which carries about 60 percent of the municipal government's network traffic. Childs, who managed the network before his arrest, has been locked up in the county jail since July 13.

On Monday afternoon, he handed the passwords over to Mayor Newsom, who was "the only person he felt he could trust," according to a declaration filed in court by his attorney, Erin Crane. Newsom is ultimately responsible for the Department of Telecommunications and Information Services (DTIS) where Childs worked for the past five years

Mayor Newsom secured the passwords without first telling DTIS about his meeting with Childs, according to DTIS chief administrative officer Ron Vinson, who added, "We're very happy the mayor embarked on his clandestine mission."

The department now has full administrative control of the network, he said in an interview Tuesday night.

It's likely that Childs had a lot to tell the mayor when the two met.

Childs' attorney has asked the judge to reduce Childs $5 million bail bond, describing her client as a man who felt himself surrounded by incompetents and supervised by a manager who he felt was undermining his work.

"None of the persons who requested the password information from Mr. Childs ... were qualified to have it," she said in a court filing.

Childs intends to disprove the charges against him but also "expose the utter mismanagement, negligence, and corruption at DTIS, which if left unchecked, will in fact place the City of San Francisco in danger," his motion reads.

Vinson dismissed the allegations. "In Terry Childs' mind, obviously he thinks the network is his, but it's not. It's the taxpayers'," he said. "The reason he's been sitting in jail is because he denied the department and others access to the system."

The court filings help explain just how this happened.

According to an affidavit from James Ramsey, an inspector with the San Francisco Police Department, he and other investigators discovered dial-up and DSL (digital subscriber line) modems that would allow an unauthorized connection to the FiberWAN. He also found that Childs had configured several of the Cisco devices with a command that would erase critical configuration data in the event that anyone tried to restore administrative access to the devices, something Ramsey saw as dangerous because no backup configuration files could be found.

This command, called a No Service Password Recovery is often used by engineers to add an extra level of security to networks, said Mike Chase, regional director of engineering with FusionStorm, an IT services provider that supports Cisco products.

But without access to either Childs' passwords or the backup configuration files, administrators would have to essentially re-configure their entire network, an error-prone and time-consuming possibility, Chase said. "It's basically like playing 3D chess," he said. "In that situation, you're stuck interviewing everybody at every site getting anecdotal stories of who's connected to what. And then you're guaranteed to miss something."

Without the passwords, the network would still continue to run, but it would be impossible to reconfigure the equipment. The only way to restore these devices to a manageable state would be to knock them offline and then reconfigure them, something that would take weeks or months to complete, disrupt service, and cost the city "hundreds of thousands, if not millions of dollars," Ramsey claims.

Crane argues that these monitoring devices were installed with management's permission and were critical to the smooth functioning of the network. They would page Childs when the system went down and allow him to remotely access the network from his personal computer in case of an emergency.

In interviews, current and former DTIS staffers describe Childs as a well respected co-worker who may have gone too far under the pressure of working in a department that had been demoralized and drastically cut as the city moved forward with plans to decentralize IT operations.

About 200 of the department's 350 IT positions had been cut since 2000, mostly to be relocated to other divisions within city government, said Richard Isen, IT chapter president with Childs' union, the International Federation of Professional and Technical Engineers, Local 21.

Despite his conflict with some in the department, Childs has a lot of support there, Isen said. "There is a lot of sympathy, only because there is a basic feeling that management misunderstand what we actually do and doesn't appreciate the complexity of the work."
http://www.infoworld.com/article/08/...network_1.html





Researchers Could Face Legal Risks for Network Snooping
Chris Soghoian

A group of researchers from the University of Colorado and University of Washington could face both civil and criminal penalties for a research project in which they snooped on users of the Tor anonymous proxy network. Should federal prosecutors take interest in the project, the researchers could also face up to 5 years in jail for violating the Wiretap Act.

The team of two graduate students and three professors neither sought legal review of the project, nor ran it past the Human Subjects Committee at their university, putting them in a particularly dangerous position.

The academic paper, "Shining Light in Dark Places: Understanding the Tor Network" (pdf) was presented at the Privacy Enhancing Technologies Symposium yesterday, in Leuven, Belgium. The authors are listed as: Damon McCoy, Kevin Bauer, Dr. Dirk Grunwald, Dr. Tadayoshi Kohno and Dr. Douglas Sicker.

The goal of the project was to learn what kind of traffic was flowing over Tor -- a free network providing anonymous web and other Internet services to hundreds of thousands of users world-wide. Some of Tor's users include pro-democracy dissidents, journalists and bloggers in countries like China, Egypt and Burma who would otherwise face arrest and torture for their work.

Tor relies on volunteers who donate computing power and bandwidth to run approximately 2500 publicly accessible proxy servers, which are then used by hundreds of thousands of people to hide their Internet traffic.

In order to study Tor, the researchers setup their own 'exit node' server on the University of Colorado's high-speed network. For 4 days in December 2007, they logged and stored the first 150 bytes of each network packet that crossed their network, thus revealing what kind of traffic was crossing the network, and the remote websites that Tor users were visiting. While the authors do not state how many sessions they snooped on, they do state that their server carried over 700GB of data.

In a second part of the study, the researchers ran an 'entry node' to the network for 15 days, which allowed them to determine the source IP address of a large number of Tor users. They used this to learn which countries use Tor more heavily than others. Note that in this second part of the study, the researchers did not have access to the destination site information, nor were they able to observe the kinds of traffic going through their server.

The researchers found that HTTP (web traffic) was responsible for 58% of their servers' bandwidth. They also found that the BitTorrent file-sharing protocol, while accounting for only 3% of the number of connections, was responsible for over 40% of the overall bandwidth. They also observed that German users were responsible for over 30% of the requests through their server.

No Legal Review Sought

In his presentation of the work at the PET Symposium yesterday, Kevin Bauer, one of the graduate students who wrote the paper shed some light on the limited amount of legal analysis performed on the project.

Bauer said that the researchers "spoke informally with one lawyer, who told us that that area of the law is ill defined" based on this, the researchers felt that it was "unnecessary to follow up with other lawyers."

The lawyer they spoke to was Professor Paul Ohm, who teaches at the University of Colorado Law School. Ohm has previously collaborated with two of the researchers on an earlier publication, which discussed the legal risks faced by academics engaged network monitoring research. Ohm, a former federal computer crimes prosecutor, has also been the subject of some media attention in recent months, after he publicly stated that ISP-level advertising and traffic-shaping systems may violate US wiretap laws .

In a response to questions by this blogger, Professor Ohm seemed to attempt to distance himself from the researchers, writing by email:

I met with the research team once before they had finished their research, although I don't know how far along they were at that point. At the meeting, I gave them a very brief sketch about federal Wiretap law and they gave me a very brief sketch of their research. They seemed to have put in place a number of controls to try to minimize the risk of liability. I haven't seen the final paper (as far as I can recall).

I'm not their lawyer, and I've never been their lawyer, and I haven't produced any official or unofficial legal advice about their research, but because I spoke with them about this, I don't think it would be appropriate for me to give you any opinions about the research other than this brief statement.

Legal Risks

The Electronic Frontier Foundation, which wrote a legal guide for operators of Tor servers, strongly advises server administrators against snooping on their users. A section in the legal guide makes this clear:

Should I snoop on the plaintext that exits through my Tor relay?

No. You may be technically capable of modifying the Tor source code or installing additional software to monitor or log plaintext that exits your node. However, Tor relay operators in the U.S. can create legal and possibly even criminal liability for themselves under state or federal wiretap laws if they affirmatively monitor, log, or disclose Tor users' communications .... Do not examine the contents of anyone's communications without first talking to a lawyer.

While state laws vary, one immediate concern would be the Wiretap Act, a federal law that broadly prohibits snooping by network operators and others. The core prohibition of the Wiretap Act is found at section 2511(1)(a), which prohibits any person from intentionally intercepting, or attempting to intercept, any wire, oral, or electronic communication." A violation of these rules is is a Class D felony, and can result in fines up to $250,000 and up to 5 years in jail.

It is this same law that groups such as the ACLU and EFF sued AT&T and other telecom companies for violating, when they shared customer communication with the US National Security Agency. AT&T was able to obtain retroactive immunity from the US Congress, but only after spending tens of millions of dollars on lobbyists.

In order to learn more about the legal issues at play, I spoke with Kevin Bankston, the EFF lawyer who wrote the Legal guide for Tor server operators, and who also lead the EFF's lawsuit against AT&T. Bankston told me that:

"I agree that their logging the content exiting their nodes would appear to constitute interceptions of those electronic (not wire) communications under the Wiretap Act, and I don't think they qualify for the narrow provider exceptions [18 USC 2511, 2 (a) I], so I still see the same potential civil and criminal liability that was noted in our FAQ."

No Human Subjects Committee Review

In addition to possible legal issues, the project also raises serious ethical concerns related to the study of users' communications without their consent.

During his presentation, Bauer revealed that the researchers did not seek the approval of their university's Institutional Review Board -- a body that reviews research projects that involve human subjects. He said that, "we were advised that it wasn't necessary," adding that the IRB review process is used "used more in medical and psychology research at our university," and was not generally consulted in computer science projects

Information listed on the website of the University of Colorado's Human Research Committee states that: "All research involving human participants that is conducted by UCB faculty, staff or students must receive some level of review by the Human Research Committee."

Of particular concern to all Institutional Review Boards is any research that involves the study of participants under the age off 18, and other at risk or vulnerable persons. Given that the users of the Tor network have gone out of their way to seek anonymity, and that in some cases, their discovery could lead to arrest or torture, it would seem that these users would almost certainly be considered to be vulnerable. Furthermore, it is quite likely that the snooped communications include at least a few users under the age of 18 -- something that the researchers did not address in their paper.

In a paper published earlier this year, Dr. Simson Garfinkel explored some of the common myths and pitfalls for computer security researchers that study real users and their behavior, and the need to submit their projects to an IRB review.

Dr Garfinkel specifically deals with one of the researcher's claims:

Myth: Because the Common Rule exempts research involving subjects that cannot be identified, IRB approval is not required when using anonymized data

Although this would certainly be convenient, most institutions only allow a determination of exemption to be made by the IRB itself.

A request for clarification on these issues left with the director of the University of Colorado Human Research Committee had not been returned by press time.

Other concerns

In addition to the issues surrounding US legal liability, and ethical concerns over human subject testing -- there is one other problem: International law.

While the researchers are Americans, and conducted their study on a server based in the US, there is certainly an international angle to their study. Users from around the world sent traffic through the researchers' server, and as such more strict Canadian and European intercept and data privacy laws may apply.

Furthermore, one of the strongest privacy protections inherent in the Tor system is the complete lack of logging. That is, if law enforcement agencies approach a Tor server administrator seeking information on a user of the system, the admin can truthfully reply that they have no logs, and thus have nothing that they can be compelled to produce.

Taking questions before their presentation, two of the authors told me that they still have a copy of the data that they collected, and admitted that it was not currently stored on an encrypted disk. They did stress that it was, however, being kept in a "secure" location.

What this means of course, is that law enforcement agencies could easily subpoena this data, thus legally compelling the researchers into handing over the data. This places the users of the Tor network at a significant risk, one that certainly violates the expected social norms of the system.

During the question and answer session after his presentation, Bauer stated that the researchers were still not sure what they were going to do with the data set, and were exploring possibilities for releasing it to researchers in an anonymized and non-personally identifiable way. This statement was met with boos from the audience, which was mainly made up of privacy researchers and activists, a number of whom run their own legitimate Tor servers.

Caveat Emptor

While the US government did not send officials to this annual meeting of privacy researchers, the Canadian government did. A representative for Dr. Ann Cavoukian, the Information and Privacy Commissioner of Ontario was in the audience during the presentation.

When asked for comment on the research project, and any potential impact for Canadian citizens who may have used the snooping Tor server, Cavoukian issued the following statement:

"Whether you run an ISP, a search engine, a Tor server node, or a research project, the principle of Data Minimization should rule. Universal privacy practices require that strong limits be placed on the processing and storage of personal data. In today's online world of constant data availability, privacy requires data minimization at every stage of the information life-cycle: If you don't need the data, don't collect it in the first place; if you don't need it any more, then destroy it securely -- don't keep it any longer than you need to. Full stop."

Wise words indeed.
http://news.cnet.com/8301-13739_3-9997273-46.html





Speculation Over Back Door in Skype

According to reports, there may be a back door built into Skype, which allows connections to be bugged. The company has declined to expressly deny the allegations. At a meeting with representatives of ISPs and the Austrian regulator on lawful interception of IP based services held on 25th June, high-ranking officials at the Austrian interior ministry revealed that it is not a problem for them to listen in on Skype conversations.

This has been confirmed to heise online by a number of the parties present at the meeting. Skype declined to give a detailed response to specific enquiries from heise online as to whether Skype contains a back door and whether specific clients allowing access to a system or a specific key for decrypting data streams exist. The response from the eBay subsidiary's press spokesman was brief, "Skype does not comment on media speculation. Skype has no further comment at this time." There have been rumours of the existence of a special listening device which Skype is reported to offer for sale to interested states.

There has long been speculation that Skype may contain a back door. Because the vendor has not revealed details of its proprietary Skype protocol or of how the client works, questions as to what else Skype is capable of and what risks are involved in deploying it in an enterprise environment remain open.

Last week, Austrian broadcaster ORF, citing minutes from the meeting, reported that the Austrian police are able to listen in on Skype connections. Interior ministry spokesman Rudolf Gollia declined to provide heise online with a comment on the matter. He did, however, offer general comments on the meeting, which were, however, contradicted by other attendees.

In contrast to statements from the interior ministry, the meeting was not attended solely by technical staff; those present included lawyers, regulatory experts and staff at the regulator. Neither were the ministry representatives mere technicians, rather they were high-ranking officials in management positions. They demanded from the ISP representatives present an "Austrian industry solution" for accessing data traffic. They called for ISPs to allow the interior ministry to install network bridges and Linux computers in their network centres. These would be used to copy and filter data traffic and forward it to the interior ministry via an encrypted connection. To facilitate filtering, ISPs should assign fixed IP addresses to customers being monitored.

it was made clear that should ISPs oppose these demands, monitoring legislation would be revised at some future time-point to prescribe the use of the ETSI ES 201 671 Version 3.1.1. monitoring standard. This would be legally binding and would require significantly more time and effort and be more expensive to implement. The reason given for not updating the legislation right away was that, in view of the present absence of terrorist activity, it would not currently be possible to mobilise political support for such a move. The officials are reported to have made clear that they were well aware that their monitoring plans would only catch the more gauche end of the criminal spectrum. Professionally organised criminals would utilise encryption algorithms that would not allow easy decryption.

It was also put about that two major ISPs had already succumbed to this pressure. The network bridges requested by the interior ministry have reportedly already been installed on their systems. This was confirmed by both companies, off the record. UPC/Inode was willing to "definitively deny" that a network bridge had been installed on its network and stated that there were also no plans to do so. Monitoring was carried out in individual cases only and only when instructed by a court order.

According to Mobilkom Austria, "the authorities have no access and will not be granted access." Likewise its fixed line affiliate Telekom Austria. Mobilkom has informed heise online, that, in response to a court order, on a single occasion it stored the total data traffic for one customer over a number of days and forwarded it to the police. In such cases, the interior ministry now wants to replace the use of physical media, with the inevitable delays this entails, with an encrypted connection. ISPs will, however, remain responsible for separating the monitored data stream from overall traffic.

For reasons of redundancy, Mobilkom's network does not have a central point from which all traffic can be accessed. Because the plan has now been made public, the money-saving idea of assigning fixed IP addresses to customers who are to be monitored is unlikely to be able to be implemented. More expensive solutions are likely to be required, though it remains unclear who will bear the ensuing costs.
http://www.heise.de/english/newsticker/news/113353





New Systems Keep a Close Eye on Online Students at Home
Andrea L. Foster

Tucked away in a 1,200-page bill now in Congress is a small paragraph that could lead distance-education institutions to require spy cameras in their students' homes.

It sounds Orwellian, but the paragraph — part of legislation renewing the Higher Education Act — is all but assured of becoming law by the fall. No one in Congress objects to it.

The paragraph is actually about clamping down on cheating. It says that an institution that offers an online program must prove that an enrolled student is the same person who does the work.

Already, the language is spurring some colleges to try technologies that authenticate online test takers by reading their fingerprints, watching them via Web cameras, or recording their keystrokes. Some colleges claim there are advantages for students: The devices allow them to take tests anytime, anywhere. Many students must now travel to distant locations so a proctor can watch them take exams on paper.

But some college officials are wary of the technologies, noting that they are run by third-party vendors that may not safeguard students' privacy. Among the information the vendors collect are students' fingerprints, and possibly even images from inside their homes.

"This is taking a step into a student's private life," said Rhonda M. Epper, co-executive director of Colorado Community Colleges Online. "I don't know if we want to extend our presence that far."

The officials also want flexibility to comply with the proposed law. They worry that the government will force them to use a particular method that could be too expensive or that would emphasize exams over other assessments. They also complain that the provision implies that cheating is more of a problem among students online than among students in a classroom.

Biometric Solutions

Three technologies, which vendors have been promoting at college conferences and which colleges are evaluating, illustrate the promises and pitfalls of this kind of monitoring.

Troy University, in Alabama, has been testing a gadget that features a mirrored sphere suspended above a small pedestal. Called Securexam Remote Proctor, it's about the size of a large paperweight and plugs into a standard port on a home computer. The pedestal includes a groove for scanning fingerprints, a tiny microphone, and a camera. The sphere reflects a 360-degree view around the test taker, which the camera picks up.

Students are recorded during exams, and anything suspicious — such as someone else's presence or voice in the room — is flagged.

To use the system, a student sits in front of a computer and places a finger on the pedestal. Securexam checks whether the digital fingerprint and the image of the student match those the student provided at registration. Then the test opens online via a course-management system. The student is prevented from viewing anything else online.

The system is not cheap. Students pay $150 for the device. Further, it works only with the Windows operating system and an Internet Explorer browser, creating a problem for students who have Macs, for instance.

Software Secure Inc., based in Cambridge, Mass., developed the device with $1.1-million in seed money from Troy. In return, the university gets the first 10,000 Securexams that the company produces. If it sells more than that, the university receives a share of the proceeds.

By the end of this fall, the university anticipates that about 800 of its 17,000 eCampus students from across the world will have used Securexam. Thousands more will begin using the device in January.

World Campus, the online arm of the Pennsylvania State University system, is testing another system called Webassessor. It uses proctors, Web cameras, and software that recognizes students' typing styles, such as their speed and whether they pause between certain letters. Students purchase the cameras for $50 to $80 apiece. They allow proctors to view a student's face, keyboard, and workspace.

The Phoenix-based provider of the system, Kryterion Inc., employs proctors who remotely observe and listen to as many as 50 students at a time. If the keystroke pattern of a student who is taking an exam does not match the one he or she provided at registration, or if the image of a student taking an exam does not match a digital photograph that the student provided at enrollment, then the student cannot start the exam. A proctor can also stop a student who is acting suspiciously from completing an exam. Students must have a broadband connection to use the service.

Kryterion charges institutions $20,000 to customize the software and for training. It also charges colleges each time students sit for an exam.

World Campus has been trying out Webassessor this summer on undergraduates in two courses. "At the moment, things look promising for a complete rollout," says Rick L. Shearer, interim director of World Campus.

Challenging Questions

Several other universities are forming partnerships with Acxiom Corporation. The company's system relies on test takers' answering detailed, personal "challenge" questions. Acxiom, based in Little Rock, Ark., gathers information from a variety of databases, including criminal files and property records. The company uses the data to ask students questions, such as streets they lived on, house numbers, and previous employers. If students answer the questions correctly, they proceed to the exams.

National American University Online is testing the system on its students, and the Colorado community-college consortium is also considering using it.

Jeffrey L. Bailie, dean of online instruction for National, says he anticipates that the system will be used on students when they take final exams or other high-stakes assessments. "We want to take just one added step to make sure that the person on the other end is who they're reporting to be," he says.

He declines to reveal how much the system costs. But Michael A. Jortberg, who is leading Acxiom's higher-education efforts, says it costs roughly $10 a student.

Unfair Burdens?

Despite the lure of these technologies, many college officials have decided to wait to test them on their students, noting the cost. Furthermore, officials say, it's unclear what requirements the Education Department would impose on institutions to comply with the proposed law.

"It's going to reduce access," says John F. Ebersole, president of Excelsior College, an online institution based in Albany, N.Y. "It's going to increase costs."

Other officials are disturbed that the proposed law singles out online education.

"We're feeling a little picked on," says Lori McNabb, assistant director of student and faculty services at the UT TeleCampus, the online arm of the University of Texas system.

She says there's no evidence that cheating or fraud happens more often with its students than with students in face-to-face classes.

How do professors know that a student enrolled in a large lecture class is the same one handing in an assignment or test, she asks?

She and others say online instructors rely more on discussions, writing assignments, quizzes, group work, and "capstone" projects to judge their students' performance, and less on big exams. Tests, when they are administered, are often randomized so students in the same class get different questions, which must be answered quickly, making it difficult for those unfamiliar with the material to take tests for students. Instructors become familiar with students' writing styles so they can spot fraudulent work, officials add.

Mr. Ebersole, despite his worries about reduced access for students, does see one upside to the proposed law. If the provision causes online colleges to document that their enrolled students are indeed the same ones completing course work, online education could garner more respect, he says.

"If it raises confidence and credibility in the eyes of regulators and traditional educators," says Mr. Ebersole, "it's worth it."
http://chronicle.com/free/v54/i46/46a00103.htm





Lock your inboxes

‘Spam King’ Escapes from Federal Prison
Ryan Naraine

Edward “Eddie” Davidson, a notorious e-mail spammer who was sentenced to jail time in April, has escaped from a federal prison camp in Florence, Colorado.

Davidson, also known as the “Spam King, made a run for it when his wife visited him last Sunday and is now officially listed in “escape” status, according to a statement from the U.S. Attorney’s Office. He was last seen in Lakewood, CO.

The FBI, IRS, and the Rocky Mountain Safe Streets Task Force are helping the U.S. Marshals in the search for Davidson.

Davidson was housed in a minimum security facility. Minimum security institutions, also known as Federal Prison Camps (FPCs), have dormitory housing, a relatively low staff-to-inmate ratio, and are work and program-oriented. FPCs are generally located adjacent to larger institutions, where inmates help serve the labor needs of the larger institution.

This from the Rocky Mountain News:

“He jumped in the car with his wife,” said Will Cochenour of the Lakewood police Tuesday. “When they were leaving, he forced her in the car, brought them home and left after a change in clothing. He’s still at large.”

On April 28, 2008, Davidson was sentenced by U.S. District Court Judge Marcia S. Krieger to serve 21 months (just under 2 years) in federal prison. Judge Krieger also ordered him to pay $714,139 in restitution to the IRS. As part of the restitution, Davis has agreed to forfeit property he purchased, including gold coins (which the IRS is selling today), with the ill gotten proceeds of his offense.
http://blogs.zdnet.com/security/?p=1543





Final message

Fugitive Spammer Dies in Murder-Suicide

Colorado officials say man, woman, 3-year-old dead; 2 survive ordeal

A convicted spammer and his wife, who were being sought after she helped him escape prison, were found slain along with their young daughter Thursday in an apparent murder-suicide, authorities said.

A teenage girl was shot in the neck and a baby was found unhurt in a car seat inside the vehicle where the three bodies were found, Arapahoe County undersheriff Mark Campbell said. The relationship between the girl, baby and the escaped convict wasn't immediately clear.

The bodies of "Spam King" Edward "Eddie" Davidson, his wife, and 3-year-old daughter were found in an SUV parked in a farmhouse driveway in a rural part of Bennett, about 25 miles east of Denver. Authorities said Davidson was the apparent gunman.

"What a nightmare, and such a coward," U.S. Attorney Troy Eid said. "Davidson imposed the 'death penalty' on family members for his own crime."

Authorities had been searching for them since Sunday, when the couple drove away from a minimum-security federal prison in Florence, 90 miles south of Denver.

Eid said that after Davidson escaped, he drove to the Denver suburb of Lakewood and got a change of clothes and cash. The house where the shooting occurred was not where the Davidsons lived, Campbell said.

Davidson, 35, was sentenced in April to 21 months in prison and ordered to pay $714,139 in restitution to the IRS after pleading guilty to falsifying header information to send spam e-mail, tax evasion and criminal forfeiture.

Campbell said deputies rushed to the farmhouse after receiving reports of shots fired.

They found Davidson on the driver's side of the SUV and a woman dead on the passenger side. A girl was found dead in the back of the car, and a 7- or 8-month-old boy was in a car seat uninjured.

Injured girl ran for help

Campbell said a teenage girl who was shot in the neck ran to a neighbor's house for help and has been hospitalized. He said the girl had serious injuries, but was coherent and talking when taken to the hospital.

Prosecutors said that from 2002 to 2005, Davidson's business, Power Promoters, and his subcontractors would spam people's inboxes with e-mails promoting items such as watches and perfume.

From 2005 through part of 2006, he sent thousands of e-mails from his home in Bennett, sometimes with false information, on behalf of a Houston company promoting a penny stock as an excellent investment, according to a plea agreement. His bank account deposits from 2003 to 2006 totaled $3.5 million, the plea agreement said.

Prosecutors said they also found about $380,000 that he had stashed in his girlfriend's bank account over three years, and purchases totaling $418,000 from a company that sells gold, platinum, palladium and silver coins.

Prosecutors did not identify the girlfriend in court documents.

When Davidson was sentenced, U.S. District Judge Marcia Krieger noted it was Davidson's first serious conviction, and that he was supporting three children, which documents did not identify. She noted Davidson had been diagnosed with attention deficit hyperactivity disorder. A condition of his sentence was that he undergo mental health counseling.

Michael Arvin, Davidson's attorney during his criminal trial, did not return a phone message left after business hours Thursday.
http://www.msnbc.msn.com/id/25840140





Google Blogger "Hosts 2% of World's Malware"
Barry Collins

Google's Blogger service is responsible for 2% of the world's malware hosted on the web, according to a new report from security firm Sophos.

The security firm claims hackers are setting up pages on the free blogging service to host malicious code, or simply posting links to infected websites in other bloggers' comments.

"Blogger accounts for around 2% of malware," according to Sophos's senior technology consultant, Graham Cluley. "It's head and shoulders above the rest [of the blogging services]."

Cluley says Blogger is worse than other blogging services because of its close ties with the search behemoth. "The attraction for the bad guys in targeting Blogger is that things pretty much get spidered instantly into Google, because it [Blogger] is part of Google," he says.

Sophos says it doesn't blame Google for the situation and that the company is proactive in weeding out malicious sites from its search results. It also claims pre-scanning blogs for malicious content simply wouldn't work. "The sheer weight of legitimate traffic makes that unworkable," claims Cluley. "We see 16,000 malicious web pages added every day - that's one every five seconds, and that's just little old Sophos. Google may see more than that."

"You could post a link into someone's blog and even if you checked that link at the time, it may be totally harmless. In 20 minutes time the hacker says 'OK, Google's now checked me, now I'll update the page'. So you have to continually scan all of the links on all of the blog pages to do this properly. Which basically is another whole new Google, re-spidering the web to check if there's something malicious there."

Google says its users mustn't be evil. "Google takes the security of our users very seriously, and we work hard to protect them from malware," a company statement reads. "Using Blogger, or any Google product, to serve or host malware is a violation of our product policies. We actively work to detect and remove sites that serve malware from our network."
http://www.pcpro.co.uk/news/214371/g...s-malware.html





Google Launched Knol to Challenge Wikipedia

Recently the number one search engine, Google, has unveiled to the public Knol, the company's website that allows experts to write, express ideas on their fields of expertise. The main difference between Knol and Wikipedia is the authorship. On Knol the public will have the actual names of the authors, whereas Wikipedia allows anyone to edit anonymously, just tracking the IP.

"We are deeply convinced that authorship - knowing who wrote what - helps readers trust the content," outlined Cedric DuPont, product manager for Google's Knol.

According to Mr DuPont, the entries on the public website, called knoll.google.com, are dubbed "knols".

The name "knoll" is a nice, very simple word to remember, and it’s part of knowledge," said Udi Manber, the head of search engineering at Google.

In December Google performed a limited test of its new service. It is interesting to note that the service has almost the same tools that single blog pages have. However, Knol encourages experts to reduce the amount of content on a topic to a single page, which is not updated chronologically.

"What we want to get away from is 'this last voice wins' model which is very difficult if you are a busy professional," said Mr DuPont.

The search engine looks forwards to rank entries by popularity in order to encourage competition. For a better understanding, let's check an example: this knol on lung cancer features lots of details on the topic, along with images and a glossary. If you check the upper right corner, you may notice the name of the author Jessica Donington, and her title, Thoracic Surgeon NYU School of Medicine. As other contributors publish on lung cancer, Google will rank related pages in accordance with user ratings, reviews and the number of people's references to certain pages.

Knol does not edit nor endorse the entries and those who visit a specific page will not be able to edit information without the permission of the author. In case readers consider any content objectionable, they can notify Google.

Knol uses the so-called "moderated collaboration", where any reader of a certain topic page may suggest edits to the author, who can choose whether to accept, reject or alter changes before publishing.

Google was able to reach an agreement Conde Nast's New Yorker magazine, allowing Knol's publishers to use one of the magazine's cartoons in each entry. In addition Google will allow writers to run ads on their articles and will share the income.

Mr DuPont mentioned that the primary goal of Knol is not to provide competition to Wikipedia but to serve as a main source of authoritative information that anyone can use to edit Wikipedia articles.

"Knols will fill gaps on what we have on the web today. That is what we hope," he added.
http://www.infoniac.com/hi-tech/goog...wikipedia.html





The Death of Google's Patents?
John F. Duffy

The Patent and Trademark Office has now made clear that its newly developed position on patentable subject matter will invalidate many and perhaps most software patents, including pioneering patent claims to such innovators as Google, Inc.

In a series of cases including In re Nuijten, In re Comiskey and In re Bilski, the Patent and Trademark Office has argued in favor of imposing new restrictions on the scope of patentable subject matter set forth by Congress in § 101 of the Patent Act. In the most recent of these three—the currently pending en banc Bilski appeal—the Office takes the position that process inventions generally are unpatentable unless they “result in a physical transformation of an article” or are “tied to a particular machine.”[1] Perhaps, the agency has conceded, some “new, unforeseen technology” might warrant an “exception” to this formalistic test, but in the agency’s view, no such technology has yet emerged so there is no reason currently to use a more inclusive standard.[2]

The Bilski en banc hearing attracted enormous attention, and yet there has remained a sense among many patent practitioners that the PTO’s attempts to curtail section 101 would affect only a few atypical patent claims. The vast bulk of patents on software, business and information technology are thought by some not to be threatened because those innovations are typically implemented on a machine—namely, a computer—and the tie to a machine would provide security against the agency’s contractions of § 101. Even if that view were right, the contraction of patent eligibility would be very troubling because the patent system is supposed to be designed to encourage the atypical, the unusual and the innovative. But that view is wrong.

The logic of the PTO’s positions in Nuijten, Comiskey and Bilski has always threatened to destabilize whole fields of patenting, most especially in the field of software patents. If the PTO’s test is followed, the crucial question for the vitality of patents on computer implemented inventions is whether a general purpose computer qualifies as a “particular” machine within the meaning of the agency’s test. In two recent decisions announced after the oral arguments in the Bilski case, Ex parte Langemyr (May 28, 2008) and Ex parte Wasynczuk (June 2, 2008),[3] the PTO Board of Patent Appeals and Interferences has now supplied an answer to that question: A general purpose computer is not a particular machine, and thus innovative software processes are unpatentable if they are tied only to a general purpose computer.

That stark answer should capture the attention of the many inventors and firms owning, or seeking to own, patents on innovative computer implemented processes, for the PTO’s new interpretation of patentable subject matter provides a clear avenue to reject patent applications and to invalid issued patents on all such innovations without regard to how meritorious or creative the innovation is. To understand the sweeping implications of this new position, we need only to consider how the PTO’s position applies to the patent on Google’s PageRank technology, which is surely one of the most famous and valuable of all modern software patents and which is now almost surely invalid under the agency’s position.

The Patent on Google’s PageRank Technology

Google has constructed its web search technology using a “technology for ranking web pages” that the company refers to as “PageRank.”[4] This patented technology was developed by Larry Page and Sergey Brin while they were attending Stanford University.[5] Stanford owns the patent, and Google holds a perpetual license on the technology that is exclusive through at least 2011.[6] The first claim of this important patent reads:

A computer implemented method of scoring a plurality of linked documents, comprising:

obtaining a plurality of documents, at least some of the documents being linked documents, at least some of the documents being linking documents, and at least some of the documents being both linked documents and linking documents, each of the linked documents being pointed to by a link in one or more of the linking documents;

assigning a score to each of the linked documents based on scores of the one or more linking documents; and

processing the linked documents according to their scores.

U.S. Pat. No. 6,285,999 (filed Jan. 9, 1998, issued Sept. 4, 2001).[7].

How does Google’s patent fare under the position advanced by the government in Bilski? The first part of the government’s test recognizes the patentable eligibility for processes that result in “a physical transformation of an article.” Google’s PageRank process seems to fail that part of the test, for the process merely generates a set of scores (which are merely numbers) that are then used to score or rank documents. The documents themselves probably do not qualify as physical articles under the government’s restrictive test, for the documents are typically virtual webpages. Moreover, even if the documents would count as physical articles, they are not transformed; the process merely ranks them. The total output from the Google patent is just a mass of intangible data, and worse still it is intangible data about intangible documents. Simply put, there’s no “physical,” no “transformation,” and no “article.” Indeed, Google’s process is even less physical than the process at issue in Bilski, which involved hedging the volatility in money flows. Dollars and cents seem real and physical enough for many people. If processes affecting money flows do not qualify as producing a physical transformation, it seems impossible to imagine that a process would qualify where it only scores virtual documents by virtual links to other virtual documents.

The second part of the PTO’s proposed eligibility test is thus crucial. Unlike the patent claim in Bilski, which was not limited to machine implemented hedges, Google’s PageRank patent claim expressly states that it is “computer implemented.” But the government’s test does not merely require a connection to a machine; it requires a tie to a particular machine.

On a recent panel held after the oral argument in Bilski, I raised the issue of Google’s patent claim with Ray Chen, the lawyer who represented the PTO in Bilski, and he asserted that, under the PTO’s position, the Google claim was probably still patentable.[8] But in light of the PTO’s subsequent decisions in Langemyr and Wasynczuk, it is increasingly hard to see how Google’s PageRank patent survives. Nor is that one patent an anomaly in Google’s portfolio.[9] Indeed, other patents owned by Google include claims that do not even include a formal limitation to a computer.[10] Google might have thought that the patent system would surely protect new technological developments that are highly creative and socially valuable. The PTO’s new position proves that view mistaken.

Langemyr and Wasynczuk

The patent claim at issue in Langemyr covers a “method executed in a computer apparatus” for producing a model of a physical system using a set of partial differential equations.[11] Even though Langemyr’s claimed invention is more closely tied to the physical world than Google’s PageRank technology is—Langemyr is, after all, modeling the physical systems rather than scoring virtual documents by their virtual links to other virtual documents—the PTO Board still had little difficulty finding that Langemyr’s claimed process does not contain a “physical transformation” and therefore does not qualify as patentable subject matter under the first part of the PTO’s test. The Board reasoned that the claimed process produced no “transformation of subject matter but merely an abstract mathematical expression that is created from the previous steps.”[12] The process, the Board noted, “does not require any physical output into the real world.”[13] Precisely the same can be said of Google’s patented process, which produces merely mathematical expressions—a set of ranks or scores—and lacks any physical output into the real world.

Thus for both Langemyr and Google, patent eligibility under the PTO’s test comes down to the interpretation of the second part of the PTO’s test. Both the Langemyr and Google patent claims are expressly limited to processes “executed” (Langemyr) or “implemented” (Google) on a general purpose computer, and the Langemyr decision holds that “the limitation that the method is ‘executed in a computer apparatus’ does not tie the method to a ‘particular machine.’”[14] The key flaw in Langemyr’s claim, the PTO Board reasoned, was its general applicability to all computer: “Any and all computing systems will suffice, indicating that the claim is not directed to the function of any particular machine. … Thus, the claimed method is not tied to ‘a particular machine,’ but rather is tied only to a general purpose computer.” [15]

In these crucial passages, the PTO Board has provided the foundation for rejecting and invalidating huge swaths of software patents, including not merely Langemyr’s claims, but those of Google, Microsoft, IBM and many other companies. If we want to evaluate the PTO’s ongoing attempts to constrict § 101, it does not seem an understatement to say that the constriction is truly breathtaking, given that the PTO’s position pushes outside the patent system Google’s PageRank patent, even though that patent covers one of the most widely known and commercially successful innovations of our era.

This is not, however, the end of the story. The PTO’s decision in Ex parte Wasynczuk provides one final twist so Kafkaesque as to strain credulity.

As in Langemyr, the invention at issue in Wasynczuk relates to a “computer-implemented” process for modeling physical systems.[16] As in Langemyr, the PTO Board in Wasynczuk holds the broadest claim in the application to be unpatentable subject matter because “the sole structural limitation recited is the ‘computer-implemented system’ of the preamble” and that limitation “is not any particular apparatus” because the computer could be “essentially any conventional apparatus that performs the claimed functions.”[17]

Yet unlike in Langemyr, the application in Wasynczuk also included a narrower claim in which “the first simulating step [of the claimed process] is performed on ‘a first physical computing device’ and the second simulating step is performed on ‘a second physical computing device.’”[18] The PTO Board holds that claim to be patentable subject matter. The Board concluded that the collection of the two “physical computing devices” operating together “is ‘a particular apparatus’ to which the process is tied, not simply a generic computing device for performing the steps.”[19] Distribution of the process over two general purpose computing devices quite clearly seems to be the key to patentability in the Board’s view, for the Board emphasized that the narrower claim covered only the embodiment in Wasynczuk’s specification that “uses two computing devices” not the embodiment that “uses a single computer.”[20] In sum, an innovative process is not patentable when operating on a single computer processor but is when operating on two processors, even though the Board recognizes that the process in the unpatentable claim “is essentially the method” set forth in the patentable claim.[21]

Google’s PageRank patent claim is of course not saved by the PTO’s caveat that two computer processors are better one when it comes to patentable subject matter. The PageRank claim requires only computer implementation and is thus invalid under both Langemyr and Wasynczuk. But the Wasynczuk definition of “particular machine” opens up vast possibilities for future litigation. In an age when even simple laptops often contain multiple processors, many patent claims could be written as functioning on multiple “physical computing devices.” Will such claims generally be patent eligible? Will dual core processors operating on a single chip (e.g., Intel’s Centrino Duo® chip) constitute a “particular machine”? Or will the processors have to be physically separate chips or physically separate computers? Will the patent claims have to specify that certain steps occur only on one processor while other steps occur solely on the other? Will the result be different if the processors share steps to some degree? All these and many more fascinating questions will provide ample billable hours for patent attorneys even as inventors look on with utter horror and disbelief at the crucial importance the legal system is placing on distinctions that are technologically meaningless to the innovations sought to be patented.

Requiem (?) for Google’s Patent

The apparent death of Google’s pioneering PageRank patent under the PTO’s new rule for patentable subject matter may be a cause for celebration among those who are philosophically opposed to property rights in innovation and are eager to confine the patent system’s ambit. It will surely be cause for mourning among those who believe that allowing patents on cutting edge technologies has served the country well for more than two centuries and that a radical departure from the traditional approach would be unwise. And it is likely to generate puzzlement among business people and innovators, who may wonder how agency decisions supposedly premised on the need for ensuring that “that the patent system be directed to protecting technological innovations”[22] have ended up rendering unpatentable innovations in search engine technology, computer modeling, bioinformatics and many other innovations in cutting edge fields related to software and information technology.

Undeniably, however, the pallor now cast upon Google’s patents and many other software patents highlight the stakes in the Federal Circuit’s pending en banc decision in Bilski. The PTO Board’s reasoning in Wasynczuk also reveals that the agency’s proposed new rule for patentable subject matter will not produce certainty but will instead open up software patents to new and previously unimagined litigation over the precise scope of the concept of a “particular machine.” Vast industries of modern innovation must now wait to see whether the courts will follow the agency’s lead.
http://www.patentlyo.com/patent/2008...ath-of-go.html





The F.T.C.’s Bully Pulpit on Privacy
Saul Hansell

I recently had a chance to sit down with Lydia B. Parnes, the director of the Federal Trade Commission’s bureau of consumer protection. She is the top government regulator who looks after Internet advertising and privacy issues, among many other concerns.

We spoke in her large office, piled high with stacks of paper, a few hours after she testified before the Senate Commerce Committee on the how advertising companies are trying to track the behavior of users online.

Interestingly, while Google and Microsoft called for new legislation to create national privacy standards, Ms. Parnes did not. She said the commission believed that its initiative to encourage online companies to regulate themselves is a better way. Here are some of her thoughts, and those of her colleague, Eileen Harrington, the deputy director of consumer protection, who joined us.

Why not pass a law on Internet Privacy?

Ms. Parnes was wary of a rush to legislation because too little is known, she argues, about what needs to be required and what should be banned. With a market that is changing as quickly as Internet advertising, there is danger, she said, in “taking a snapshot of the way the market works at a specific time.”

She added that “nobody is quite sure” what the harm is that might be prevented by a privacy law. When I pressed for what appears to be the emerging dangers from tracking on the Internet, she said pointed to the fact that sensitive information—such as a person’s medical or financial status—could be misused. Moreover, if data is not kept securely, people are at risk of identity theft.

What about the broader view that people simply don’t want to be watched as they move through their private lives? Ms. Parnes said that people’s views on this are not entirely consistent.

“A big question is how much consumers understand the connection between relevant advertising and tracking,” she said. “If you ask people whether they want to be trace when they are online they generally say they do not. But if you ask them whether they want a free Internet they say yes. And if you ask them if they want relevant advertising, they say yes.”

Nosey I.S.P.’s

I asked Ms. Parnes whether special rules are needed for Internet Service providers that want to monitor the surfing activities of their customers and sell the data to advertising companies. She had no answers, only questions.

“Do consumers have some different expectation of privacy, given their relationship with their I.S.P.?,” she asked. If they do, she said it is still an open question whether such monitoring should be banned outright or whether there should be a rule requiring the I.S.P.’s to get more explicit consent from their customers to use their surfing behavior.

The lesson of spam

Ms. Harrington pointed out it took several years for a consensus to emerge that legislation was needed to regulate junk e-mail or spam.

“Quite a lot was known about spam,” she said, including the specific harm that it caused: “It was know that it was clogging mailboxes.” Moreover, the commission, along with other law enforcement agencies, had taken legal action against various spammers under existing statutes, which exposed their limitations.

Ultimately Congress passed the Can-Spam Act in 2003. That law defines some standards that have been more or less adopted by legitimate companies, such as requiring commercial e-mail to have the physical address of the sender as well as a way to request to be removed from the e-mail list. It also defines a range of illegal e-mail practices that are routinely ignored in astoundingly high volume by spammers of the world.

How self-regulation works

As Ms. Parnes explained it, self-regulation at the Federal Trade Commission is a far different concept than at some other agencies, such as the Securities and Exchange Commission. The New York Stock Exchange, for example, operates as a self regulatory organization, governing the practices of its members, but it is also tightly supervised by the S.E.C. What is more, no one can trade stocks on the N.Y.S.E. without submitting to these rules.

To the F.T.C., self regulation is a much more voluntary proposition.

“We can say you really should do this,” Ms. Parnes said. “We don’t have the ability to say you are required to do it.” That is largely a function of the relatively weak powers that Congress has invested in the commission. It was formed out of the trust busting era at the beginning of the last century and now has a broad charter to fight anti-competitive, misleading and fraudulent business practices.

Ms. Parnes said that the commission has found that its suggestions can be very persuasive.

“When we come out and say we think people should follow these general principles, surprisingly at the end of the day industry steps up.”

Will nosey advertisers be like candy makers?

Ms. Parnes pointed to the commission’s call for food companies to restrain how they market food to kids, which resulted in an agreement with 10 big food companies in 2006. Now companies representing more than two-thirds of the food market participate, which Ms. Parnes defined as a major accomplishment.

I wondered about the rest of the companies who are having a field day pushing all manner of sugary and fatty treats to our obese children. And by extension, Iwhat if one-third of the advertising companies and Internet providers decided not to sign on to the commission’s preferred regulatory standards?

As it is, the current, relatively weak standards run by a group called the Network Advertising Initiative, is agreed to by the very biggest Internet advertising companies, like Microsoft and Google’s DoubleClick, but smaller players and even some big ones, like ValueClick, don’t submit to them.

Ms. Parnes said the agency has the ability to pressure more companies to participate. “I don’t think companies want to be seen as out of the mainstream, not doing things that 70 percent of the industry is doing.”

She harkened back to a phrase coined by Theodore Roosevelt, one of the original trustbusters.

“This is an area we can use the bully pulpit to encourage the best practices by the industry,” she said.
http://bits.blogs.nytimes.com/2008/0...acy/index.html





Web Ad Firm Learns People Don't Like Spying
Ray Everett-Church

The last couple of weeks have been pretty bad for the folks over at the behavioral targeting and advertising company NebuAd.

During some highly contentious hearings on Capitol Hill, it seems to have come as a shock and surprise to the executives at NebuAd that people might have a problem with having their Internet connection spied upon for advertising purposes.

NebuAd, a Redwood City, Calif.-based start-up has been raked over the coals on both sides of Capitol Hill in recent weeks for its business model, which is based upon the monitoring of consumer broadband connections to build activity profiles and to deliver better targeted advertisements.

Several members of Congress suggested that NebuAd's monitoring and analysis of consumers' Internet connections was only permissible if consumers gave affirmative consent and "opted-in" for the service.

There were no news reports that the skull of NebuAd's CEO, Robert Dykes, exploded at that suggestion. But it certainly could have, because Dykes knows just as well as anybody else that very few people would be willing to be spied upon without some real tangible benefit coming in return.

When I first read about NebuAd's plight, I could only roll my eyes and mutter, "here we go again!" Sure enough, the more I read about them, the more I realized that they were heading down an ugly road.

You see, this is a line of business that I know a thing or two about. Nearly a decade ago, I worked as the first Chief Privacy Officer for an Internet advertising start-up called AllAdvantage.

Even in those ancient times (when the Internet, in some places, still was little more than a 'series of tubes'), there were very few consumers begging to be spied upon in the vain hope that they'd get to see better targeted ads. The ranks of those suffering from too little advertising are even smaller today. Knowing this, at AllAdvantage we decided that the one way to get people to let us "spy" on them was to pay them for the privilege. So we built a system that rewarded people for the time they allowed us to look over their shoulder and build a data profile. In 18 short months, more than 10 million people around the world gave us permission, and in turn we paid out more than $100 million to them before the bottom fell out of the dotcom advertising market in early 2001.

The other thing we knew, and frankly it was the reason they hired me away from a law firm in Washington, DC, was that, even with a permission and compensation-based system, and even with the strongest privacy protections in place, politicians and policy-makers would not look kindly on a business that seemed to be built upon spying on people.

So even before I had moved into my office at AllAdvantage, I had a meeting with one of the best tech-industry lobbyists in Washington to feel him out about the best approaches to take in order to head off the inevitable firestorm.

Before AllAdvantage even had its name painted on its office door, our lobbyist Robb Watters was helping us to understand the lay of the land in terms of how Internet privacy was being viewed, and how to help shape the discussion so that our company was perceived to be driving efforts to protect consumers and not seen as trying to pull a fast one.

As a result of this strategy, AllAdvantage quickly became recognized as a thought-leader while many of our competitors would go on to be branded as 'spyware' companies and hounded out of business.

Unfortunately, NebuAd seems to be learning, a little too late, that when you set up shop squarely in the middle of a big bear trap, your business plan needs to include – from the outset – a strategy for when the trap starts to close around you.

Also unfortunate is the fact that NebuAd is no different than too many other companies in the Internet space in that they are so focused on the internals of their business that they fail to consider external factors like laws, regulations, and politics.

Perhaps it's because I grew up in Washington, worked as a lobbyist, and trained as a lawyer. But I still marvel at how, all too often, start-ups will rush headlong into their business with a blind spot so huge that it prevents them from seeing the entire United States government.

The irony of course is that with all the bloviating from various members of Congress about the sanctity of consumers' private communications, this same Congress caved into terrorism fear-mongering and voted to allow the government to do precisely what it frets about NebuAd doing. Luckily, such hypocrisy is well understood out here in Silicon Valley, and NebuAd may yet find a profitable exit from this mess.

I wonder how much Al-Qaida would pay for delivering ads to suspected terrorists found via illegal warrantless wiretaps?
http://itmanagement.earthweb.com/fea...ike+Spying.htm





Library Confrontation Points Up Privacy Dilemma
John Curran

Children's librarian Judith Flint was getting ready for the monthly book discussion group for 8- and 9-year-olds on "Love That Dog" when police showed up.

They weren't kidding around: Five state police detectives wanted to seize Kimball Public Library's public access computers as they frantically searched for a 12-year-old girl, acting on a tip that she sometimes used the terminals.

Flint demanded a search warrant, touching off a confrontation that pitted the privacy rights of library patrons against the rights of police on official business.

"It's one of the most difficult situations a library can face," said Deborah Caldwell-Stone, deputy director of intellectual freedom issues for the American Library Association.

Investigators did obtain a warrant about eight hours later, but the June 26 standoff in the 105-year-old, red brick library on Main Street frustrated police and had fellow librarians cheering Flint.

"What I observed when I came in were a bunch of very tall men encircling a very small woman," said the library's director, Amy Grasmick, who held fast to the need for a warrant after coming to the rescue of the 4-foot-10 Flint.

Library records and patron privacy have been hot topics since the passage of the U.S. Patriot Act after the Sept. 11, 2001, terror attacks. Library advocates have accused the government of using the anti-terrorism law to find out — without proper judicial oversight or after-the-fact reviews — what people research in libraries.

But the investigation of Brooke Bennett's disappearance wasn't a Patriot Act case.

"We had to balance out the fact that we had information that we thought was true that Brooke Bennett used those computers to communicate on her MySpace account," said Col. James Baker, director of the Vermont State Police. "We had to balance that out with protecting the civil liberties of everybody else, and this was not an easy decision to make."

Brooke, from Braintree, vanished the day before the June 26 confrontation in the children's section of the tiny library. Investigators went to the library chasing a lead that she had used the computers there to arrange a rendezvous.

Brooke was found dead July 2. An uncle, convicted sex offender Michael Jacques, has since been charged with kidnapping her. Authorities say Jacques had gotten into her MySpace account and altered postings to make investigators believe she had run off with someone she met online.

Flint was firm in her confrontation with the police.

"The lead detective said to me that they need to take the public computers and I said `OK, show me your warrant and that will be that,'" said Flint, 56. "He did say he didn't need any paper. I said `You do.' He said `I'm just trying to save a 12-year-old girl,' and I told him `Show me the paper.'"

Cybersecurity expert Fred H. Cate, a law professor at Indiana University, said the librarians acted appropriately.

"If you've told all your patrons `We won't hand over your records unless we're ordered to by a court,' and then you turn them over voluntarily, you're liable for anything that goes wrong," he said.

A new Vermont law that requires libraries to demand court orders in such situations took effect July 1, but it wasn't in place that June day. The library's policy was to require one.

The librarians did agree to shut down the computers so no one could tamper with them, which had been a concern to police.

Once in police hands, how broadly could police dig into the computer hard drives without violating the privacy of other library patrons?

Baker wouldn't discuss what information was gleaned from the computers or what state police did with information about other people, except to say the scope of the warrant was restricted to the missing girl investigation.

"The idea that they took all the computers, it's like data mining," said Caldwell-Stone. "Now, all of a sudden, since you used that computer, your information is exposed to law enforcement and can be used in ways that (it) wasn't intended.'"
http://www.ajc.com/services/content/...xsvc=1&cxcat=0





Stet
Virginia Heffernan

I am stumped by how to excerpt the language on message boards and blogs.

Take a passage signed by zipthwung, an astute online commenter: “pornography if for the ruling classes and their violent vulgar all consuming appetites. Or their slaves.”

Interesting. But so as not to distract you with the typos, should I have repunctuated it, adding commas and plunking a hyphen into “all-consuming”? Should I have turned that “if” to “is”?

Zipthwung — I can testify, as a longtime fan — is a poet and a mystic. Maybe he means “if.” Dude thinks that way. Oh, but there’s more. Before quoting him, should I have determined his real name? Gender? Profession? Home address?

Week after week, these questions dog me. Sometimes I opt to copy words and paste them into the text of a column — to quote verbatim. I treat message-board words as if they had been written in books, articles, brochures or press releases. Is that what zipthwung wants? Should I care?

Consider another example. To show that Web users are curious about human reproduction, I might quote kavya on Yahoo Answers, word for word: “How is babby formed? How girl get pragnent?”

But that makes kavya look like an idiot. Readers might miss the sweet earnestness of his question. Maybe he (or she) is 7 or a native speaker of Hungarian. I should cut the kid a typographical break; that’s not an easy question to ask. The cockamamie diction and syntax of Internet English is, possibly, only incidental to his inquiry. A reporter could paraphrase or revise his question — “How is a baby formed?” — lest readers get blinded to the intent of the question by moronizing typos.

But “How is babby formed?” is funny. And who wants to deny readers a chance to laugh and to get the full flavor of Internet-culture wackiness? It’s flat-out lying to pretend that everyone (or anyone) spells well online.

My problem with message-board language brings up a prior problem in journalism: the difficulty of translating spoken language into written language. The philosopher Jacques Derrida gained notoriety by dimming the bright line between what was known in strange pre-Internet lingo (French, was it?) as langue and parole. He thought the written-spoken distinction was suspect and by turns collapsed and reasserted itself in the merry game of signification.

Nothing works more Frenchly and merrily this way — shape-shifting at a rapid pace — than Internet language, which morphs from standard English (a dialect of which has become the Web’s lingua franca) to other languages and dialects to slang and emoticons and acronyms and phonetic miscellany. (Take “hey guys, i’m stoopid. DOH! meh. GAH. :O wth.” Can this communication be taken as an admission of some kind of error? Can it be faithfully paraphrased as “she admitted her mistake on a message board”?) I can’t tell how much of this keycap casserole belongs in ink on paper or how much of it makes sense there.

The Sanhedrins of style at newspapers are not so amused by the merry game of signification. (Derrida’s not big with real newspapermen.) Most of them seem to believe in standardizing spoken English — to a point. At The New York Times, using nonstandard spelling to reflect dialect — “he wuz a good friend” — is seen as a sketchy business, since no two writers do it the same way and since it can reflect bias. But rhetorical eccentricities ought to be preserved. “I’m friends with him 20 years,” for example, does not have to become, “I have been friends with him for 20 years.”

Some architects of Times style have proposed that communication on a message board should be treated like the text of a novel. As novels of sorts, message boards ought to be excerpted using the same protocols that newspaper critics use to quote from fiction. That is, we should go light on the academic sics, addition brackets and omission ellipses, which in a paper can come across as sneering, cluttered, pretentious or all three.

By contrast, when transcribing message-board posts, idiosyncrasies of language should be preserved as far as possible and taken as intentional, unless in context they are obviously evidence that the writer has innocently hit the wrong key (“teh,” “rihgt”). A “wuz” on the Internet remains “wuz” in the paper. In thorny cases, a critic or reporter can extenuate a passage outside of quotation marks. (“ ‘The soiled fish,’ writes Melville, conjuring an odd image with a ‘soiled’ where perhaps ‘coiled’ was intended.”)

Daniel Okrent, the first public editor for The Times, who is now at work on a book about the history of Prohibition, e-mailed me further thoughts: “The minute you start trying to replicate someone’s accent or diction, you run the risk of appearing to be patronizing or worse. When the Mississippi State football coach said something like, ‘There ain’t but one color that matters here,’ the paper was wrong to recast it as ‘There is only one color . . .’ — he didn’t say that.”

Okrent continued: “But if in reaching for the sound of his voice they had rendered it as ‘I ain’t gonna suspend mah players fer actin’ up on weekends,’ it would have been inappropriate. I say stick with the actual words the man uses and not with the way he says them.”

Dropping g’s, Mark Twain-style, does look supremely corny, though The Times once liberally clipped those g’s into apostrophes for folksy effect. In 1907, the paper published an article called “Mr. Devery Has Some Thoughts on the Way Things Is Goin’.” Devery, a former New York police chief, was what can only be called a colorful character, complete with colorful, g-free words and colorfully disagreeing subjects and verbs. “If things is run right,” Devery opined, in The Times’s rendition, “the chief of police ought to be nothin’ but a sort of foreman, a feller to carry out the orders of them above him. He ought to be a sort of — of — editor.”

Comes off kind of fakey today, don’t it? Certainly having one or two subjects in a news article say “goin’ ” or “gonna” or (come on) “gwine” when everyone else gets their participles standardized is unfair and misleading. On the other hand, Times readers of 100 years ago found Devery’s dialect funny, and writers and readers alike crave funny quotations. It may seem condescending or even racist to use the dialect conventions of “Pudd’nhead Wilson,” but it also seems like a crime against humor and the truth of Web language to adjust “How is babby formed? How girl get pragnent?” in the name of imagined fairness.

While Okrent took a hardline position about message-board posts — once going so far as to suggest a reporter shouldn’t quote them unless she has a real name and even an ID for the poster — I stand by my consumer-end experience of boards. Though an intrepid A-section reporter might be able to turn up names, ranks and serial numbers by pushing sources and insisting everything be said on the record, in proper English and for attribution, I’ll never accomplish all that with the crazy stuff on boards. Certainly not in a passage like this one, which showed up recently on a mothering site:

How many months into your relationships has ILY come out?
3ish
What are you, 16?
just curious
what is ily?
I love you
Idiot

And who would want all those names, professions, ages, locations — letters-section-of-The-New-York-Times kind of stuff? So I’ll go on treating message boards like novels until I am persuaded otherwise. Oh, dear Web, I love you, Idiot.
http://www.nytimes.com/2008/07/20/ma...l?ref=magazine





Crowd - Sourcing The E – Car

After the wikipedia, the wikicar.

"eCars - Now!" is a Finnish Internet community seeking to apply the collective approach taken by online collaborators like the authors of Wikipedia to start converting used petrol-fuelled cars to electric ones, with the first roll-out due this year.

The Finnish-language forum claims to be first of its kind in the world, and wants to provide an alternative to what its members perceive as foot-dragging in the oil and auto industries.

The group is working in the tradition of "open source" projects laid down by information technology -- like the Linux computer operating system which was started by a Finn and challenged Microsoft's dominance.

"If we succeed very well it will create similar projects across the world with whom we can share what we know," said project participant Jukka Jarvinen, adding that a similar scheme was launching in Denmark.

"We're hoping to create a global movement."

Electric cars have struggled to shake off a quirky image with tiny sales of often fantastical vehicles at prohibitive prices, or economy-sized "golf carts" with limited range.

But because they are charged from the power grid and make more efficient use of energy, they produce fewer emissions and are seen as a promising clean-air alternative to petrol-powered vehicles.

When it comes to promises, auto-makers are keen to capitalize on mounting consumer concern about high gasoline prices which is prompting trade-ins of gas-guzzling SUVs.

Chrysler LLC was one of the latest to say it plans to launch all-electric vehicles in the next three to five years.

General Motors is rushing to complete the design of its Chevy Volt, which is a plug-in hybrid, Mitsubishi Motors plans to launch its electric compact car "i-MiEV" in Japan in 2009, and in Europe Daimler's electric Smart and Mercedes models are touted for 2010.

But the Finnish group offers an outlet for fans who have so far been disappointed by the car industry. Some experts say it will still take 5-10 years for alternatives to petrol-fuelled cars to take root, given the capacity challenge for an auto industry that is adding 65 million new cars a year to a fleet of 1 billion.

Open Source

The group is starting small. It has identified demand for more than 500 electric conversions in Finland and its Web site aims to begin introducing potential buyers to sellers of suitable used cars and components, and mechanics who can make the conversion with an electric motor and lithium batteries.

Its first conversion model will be a Toyota Corolla -- it aims to produce a few dozen finished eCorollas this year -- which it says would have a range of 150 kilometers per charge and a top speed of 120 km/h.

This compares with Oslo-based specialist car producer Think's model City, which travels up to 180 kilometers with a top speed of 100 km/h.

The forum expects the used car and mechanics' work in total to cost roughly 25,000 euros ($38,000), close to the price of a new Corolla in Finland, and will make the conversions using commercially available components.

On the forum, participants feed ideas to the site's discussion boards and email lists, the best of which the non-profit community will put into use.

The community believes 500 orders would be sufficient for mass conversions: Think plans a batch of 8,000 electric cars next year at 20,000 euros each.

Its experts are volunteers who negotiate prices for the components and car conversions. End-users will pay for the car, the component costs and the mechanic.

"We are not trying to jealously build any sort of corporation out of this," Jarvinen said. "This kind of an unorganized organism that grows in small cells across the world cannot be bought out."

Obstacles

The old common problem of electric cars -- heavy batteries with a limited life-span -- has mostly been overcome with lithium battery technology, although limits to the range remain.

Infrastructure for power is a hurdle: there are few public spots where one can charge an electric car in Finland, but they can also be charged at home.

Renault and Nissan have signed a deal with Portugal to make the country one of the first to offer consumers the possibility of nationwide electric car charging stations. The two makers have also said they will mass-market electric cars in Israel and Denmark in 2011.

The e-group's intentions are good, says researcher Juhani Laurikko of the Technical Research Centre of Finland, but they are not yet approaching the issue in a sustainable way.

"Frankly, there is not much potential here, but these are moves in the right direction. Converting petrol-fuelled cars that are only a few years old is a waste of natural resources," he said.

"I would rather see conversions done on used cars older than 10 years with older petrol-engine technology."

The community says it is best for the electric car's image to start with new cars rather than tired models.

Finland's Vehicle Administration said the community's cars could be admitted to the roads in Finland.

"They may well be admitted, as long as they fulfil the legally set criteria," said Erik Asplund, senior officer at the vehicle inspection unit. "There are a few of these criteria but probably nothing that couldn't be overcome."

(http://www.sahkoautot.fi/)

(Additional reporting by Gerard Wynn in London; Editing by Sara Ledwith and Jon Boyle)
http://www.reuters.com/article/inter...70916120080723





Why Power Outages are Bad for Your Data

Table of Contents

1. Introduction
2. What happens hardware-wise
3. What happens software-wise
3.1. Disk cache
3.2. (Encrypted) file systems
3.3. (Linux software) RAID
3.4. Databases
4. Surge protection
5. Recommendation
5.1. Selecting a UPS

1. Introduction

You've taken every precaution against data loss. You do regular backups, which you've carefully planned (and even tested). But, what happens to your precious data when there is a power outage? Will your file system recover? Properly? Are you sure? Or, will you resort to your backup, just to be safe? Maybe you need a UPS. Then again, maybe not. This article will help you to make that decision.

2. What happens hardware-wise

When the power fails, no individual component gets a clean shutdown command; power is just removed. When this happens, some parts of the machine may last longer than other parts. One of the first things that will happen, is that the memory DIMMs will no longer be refreshed properly (DRAM needs to be refreshed constantly otherwise it will lose its data) and very rapidly, the memory will contain only garbage. The hard drives and DMA controller however, will run a bit longer; so if data is being written to disk, the DMA controller will keep reading data from memory, but it has no idea that this data is corrupted. Some file systems are more sensitive to this kind of failure, because of the different kinds of journaling they do.

There are certain machines which are protected against this type of data corruption, by having the power supply send an interrupt to the operating system when power fails, but ordinary class PC hardware does not.

3. What happens software-wise

3.1. Disk cache

Disk write cache is used to collect and delay transfers to the disks in favor of speed, because memory is faster than disks. When you shut down a machine when there is uncommitted data in the cache, you will lose this data, or corrupt it because only part of the cache is written. This can be illustrated very nicely by booting your Linux machine with the kernel parameter "init=/bin/bash". This will start a shell instead of the initialization procedure. You can then edit files, like /etc/shadow, should you want to reset your password. If you then press ctrl-alt-del without running the "sync" command to commit the disk cache first, your changes will not be committed to disk.

3.2. (Encrypted) file systems

Most people will think that because of journaling, file systems are protected against power failures. It's true that filesystems with journaling are more robust than those without, but it should be clear by now there are some things the file system cannot protect against.

Then of course, there different ways journaling can be done. Ext3 is more resillient against power failures then XFS and ReiserFS, because ext3 does physical block journaling.

According the Gentoo Wiki, you are even more susceptible to data loss in the event of a power failure when using an encrypted file system. I have to admit that I can't think of the reason why this would be so, because as I explained, after a power failure, everything that is written to disk is garbage anyway, whether it passes through some encryption pipeline or not. But, it's something you want to keep in mind.

3.3. (Linux software) RAID

Linux software RAID, and any RAID basically, needs to know if the disks of the array are still properly matched to eachother when the array is initialized. When power fails, or when you press reset, they will be in a "dirty" state, and the system may need to recreate the array. That is, if it can. I've never tried it, but I can imagine that a RAID0 can be completely destroyed by a power failure. But, don't take my word for that...

Modern Linux kernels (2.6.16 and newer) and raid tools (mdadm 2.4.1 and newer) luckily have a precaution against that, namely a write intent bitmap. When using Linux software RAID, I'd advise you to enable this. There are enough resources on the internet where you can find how, like the Gentoo Wiki.

3.4. Databases

Databases, like PostgreSQL or MySQL do a lot of internal work to keep the database in a clean state. When it is interrupted violently, this can be disastrous. The PostgreSQL mailinglist doesn't have "don't kill -9 the postmaster!" as a standard signature to list messages for nothing. Interrupting normal write operations and transactions is also a very bad idea, because that could leave the database in a incoherent state.

An added problem with databases is, that a lot of them write to the file system, so you have an extra layer of things that can go wrong. MySQL has the ability to write to the partition directly, which makes it more robust.

Applications like LDAP directories, source control management repositories, etc, are also potentially susceptible to the same kind of failures. Like I describe in my backup article, it's also important to make scheduled dumps of such applications, to make sure have a backup in a robust, self-contained archive.

4. Surge protection

UPSes also protect against surges on the mains power. However, only an online UPS (the expensive sort) does it properly, by always running the load from the battery. The offline variety merely uses MOVs, which is exactly the same thing as those ordinary power strips with surge protection. The effectiveness of those things can be questioned because of delay time, impedance (resistance) of the safety earth, longetivy of the MOVs because of frequent surges, etc. The internet is filled with information about the fallibility of MOV surge protection.

The surge protection on UPSes also often includes protection for ethernet and/or telephone networks. I really advice against using those. When there is a surge, the MOVs temporarily short the line containing the surge with the safety earth, but it will also connect the data networks to it. This safety earth, however, does not have infinitely low impedance, and therefore it's possible that some of the excess current will travel up the network, as opposed to down the safety earth. The exact details of this are more complex than this, but as always, the internet is your tool should you want to find out more.

5. Recommendation

It should come as no suprise that I would advise a UPS if your data is important to you, especially when the machine in question is heavily used data-wise (with a lot of writing to the disks), like an office file server, or when it uses a database of some sort. And even more so if you use XFS or ReiserFS. It's also convenient to have your external USB disk, router, cable modem, telephone switch, or similar devices on the UPS. The router and network switches is particularly neat, because then the machine can notify you (by e-mail or SMS) of the power failure, and possible connections from the internet (like your SSH shell...) will be maintained.

5.1. Selecting a UPS

In my experience, servers often use a lot less power than you'd think (at work, our dual core 1.8 GHz Intel with three disks only uses about 100W), so you don't really need a big UPS. I'd advice getting/borrowing a power/VA meter to gauge the power use of the machine in question, and size the UPS accordingly. When doing so, remember that it will use more power when the CPU is highly utilized.

Our 500 VA APC CS 500 can supply one server, one pentium-100 (internet router), phone switch and network switch for about 15 minutes. It's loaded at 40% under normal use.

I would not connect a CRT monitor to a UPS. When the degaussing coil of the picture tube is triggered (when the monitor is turned on for example), an enormous surge of current is drawn. When you're running on battery power, this is enough to make computers connected to it reboot. Should the connected devices ever start on battery power, each connected device will suffer a momentary power outage because of the high current drawn by the degaussing coil of the monitor. This kind of outage is not very good for your hardware. Besides, what use does it have to run the monitor off a UPS? The primary function of a UPS is to avoid data corruption because of an ugly shutdown, not because you are too lazy to save your work all the time...
http://www.halfgaar.net/why-power-fa...-for-your-data





Home Servers May Render CD Racks Obsolete

Converting to a fully digitized entertainment library is a good way to cut down on clutter in the house. So what replaces the CD rack once you do?

The 500 GB hard drive that comes standard on most home computers today? Soon, even that won't be big enough to store and organize the massive amount of digital music, video and photography that consumers are accumulating as part of the emerging "terabyte lifestyle."

That opens the door to a new market, one that for now remains a niche afterthought to most people: home servers.

Most digital media today is stored on an individual computer and then synched to one device or another or streamed through a home network to an entertainment system or other appliance. The drawback with such a system is that all files will be lost should the hard drive crash, and it's very difficult to synchronize files across multiple computers, devices and users without overlap.

By contrast, a home server acts as a central storage hub for all the content in the home, and multiple devices can link to it in order to stream or otherwise access music, video or other content. A home server will even automatically backup and reconcile content stored on any connected device. And servers are far less prone to crashes.

The home server market is currently all potential, with only an estimated 400,000 U.S. households employing one today, according to multiple analyst reports, dominated primarily by tech enthusiasts and IT pros installing them in their homes.

But Forrester Research projects the U.S. market will grow to more than 4.5 million households by 2012, while the Diffusion Group predicts it surging to as high as 21.5 million in all of North America by 2015.

Driving this growth, of course, is digital content. It's hard to measure just how much content is now stored on home computers, but based on reported activity, it's certainly on the rise. A Forrester Research survey shows that the number of people viewing or managing photos on their computers rose from 26% of survey respondents in 2002 to 47% in 2007. The percentage of those owning an MP3 player went from 3% to 36% during the same time frame.

"The digital assets that people have are clearly climbing, and with that comes the potential need for a home server," analyst J.P. Gownder says. Diffusion Group senior analyst Ted Theocheung notes that the average computer user will have up to 2 terabytes of content stored by 2010.

But increased storage capacity is not enough to jump-start the market. The real appeal of the home server is its synching, streaming and management capabilities. The more devices in the house that need access to the same content, the more need there is for a home server.

According to Forrester, the number of homes with multiple computers increased from 25.8 million in 2002 to 47.8 million last year. These computers are increasingly being connected via a home network, the penetration of which has doubled in the same time period from 12% to 24%. And that's not even including the proliferation of iPods, mobile phones and other portable devices that need access as well.

"There needs to be something beyond backup to make the home server story come alive for consumers," Gownder says. "The server category has to demonstrate application extensibility where it's projecting things you couldn't do previously rather than just being a source of backup and storage. It needs to proactively help people with their media."

Hewlett-Packard's Media-Smart Server line, for instance, allows users to store their entire iTunes library on a server, from which any computer in the home network can then stream music. French company LaCie offers its Ethernet Disc Mini Home Edition service that does much the same.

Microsoft, and its Windows Home Server software that it launched in January, is expected to rule the home server market for the next five years, during which PC-based servers will be the dominant solution. But Theocheung says the real spike in consumer adoption won't come until after consumer electronics companies begin building server-like functions into their entertainment system products, which will overtake the PC as the primary source of such store-and-synch capability. In particular, he expects cable operators to be leaders in this transition, doing for servers what they did for DVRs by including the functionality in set-top boxes.

"That changes the whole model," Theocheung says. "If you have to buy these yourself, the trend is going to be slower. But when service providers latch onto this and let you just add $5 to your $100 monthly cable bill, it's not a noticeable impact. Then you're going to see some action."

Perhaps when this market begins to expand, music subscription services like Rhapsody and Napster will place support for their technology on these home servers. Rhapsody in particular has been aggressive about making its service compatible with non-PC music appliances. Meanwhile, the move to digital rights management-free downloads for purchased content will also be a key step toward ensuring that digital music takes advantage of the coming media server boom.

Following are some home server options:

PC-Based

HP MediaSmart Server ($600): Five hundred GB of storage on a single hard drive; supports up to four additional drives; features a Gigabit Ethernet connection and four USB 2.0 ports.

Fujitsu Siemens SCALEO Home Server (Europe only): Choice of two 500 GB or two 750 GB of storage; includes a Gigabit local area network and four USB 2.0 ports.

Consumer Electronic

Seagate Mirra ($350): Five hundred GB of storage; provides network file backup to connected PCs; monitors any folders users choose to back up and synch via a LAN; includes remote access.

Apple Time Capsule ($300/$500): Choice of 500 GB or 1 terabyte of storage; integrated with Mac OS Leopard software for automatic file backup; offers built-in extension to the Airport Extreme Wi-Fi base station. LaCie Ethernet Disk Mini-Home Edition ($200): Five hundred GB of storage; doubles as a home networking hub; can stream to multiple devices and provide remote access to content via any Web browser; includes USB 2.0 ports and Gigabit Ethernet networking functions.

Combo

Sony HES-V1000 ($3,500): Five hundred GB of storage with 200-disc Blu-ray DVD changer; integrates with Sony PlayStation 3 and Sony TVs that include the XrossMediaBar, a multi-option, onscreen menu that offers access to content from home networked devices and Internet-based sources like online music and movie services.

Harman Kardon DMC 100 Digital Media Center ($3,500): Two hundred fifty GB of storage; delivers up to four streams of music, video and photos at the same time to up to four devices; automatically rips inserted CDs to the hard drive for digital backup; records and plays content from various media cards and USB devices.
http://www.reuters.com/article/techn...37031220080721





SanDisk: Windows Vista Not Optimized for Solid-State Drives
Brooke Crothers

SanDisk said Monday that Windows Vista is not optimized for solid-state drives, delaying the delivery of optimized drives until next year.

Solid-state drives (SSDs) are used instead of hard disk drives in select high-end notebook PCs today such as the Apple MacBook Air and Toshiba Portege R500.

The next generation of SSDs will use multilevel cell (MLC) technology, which will require a more sophisticated controller--a crucial component in solid-state drives. These drives will have capacities ranging up to 128GB, 160GB, and later, 256GB. MLC drives are expected to appear in a wider selection of notebooks later this year.

Speaking during SanDisk's second-quarter earnings conference call, Chairman and Chief Executive Officer Eli Harari said that Windows Vista will present a special challenge for solid-state drive makers. "As soon as you get into Vista applications in notebook and desktop, you start running into very demanding applications because Vista is not optimized for flash memory solid-state disk," he said.

This is due to Vista's design. "The next generation controllers need to basically compensate for Vista shortfalls," he said.

"Unfortunately, (SSDs) performance in the Vista environment falls short of what the market really needs and that is why we need to develop the next generation, which we'll start sampling end of this year, early next year," Harari said.

Harari said this challenge alone is putting SanDisk behind schedule. "We have very good internal controller technology, as you know...That said, I'd say that we are now behind because we did not fully understand, frankly, the limitations in the Vista environment," he added.

In the very low-end of the market, however, this is not an issue. "In very low-end, ultra low-cost PCs, existing controllers can get the job done for 8-, 16-, and 32-gigabyte storage because these are relatively unsophisticated...requirements," he said.

SanDisk has a production joint venture with Toshiba, which also makes solid- state drives.
http://news.cnet.com/8301-13924_3-99...=2547-1_3-0-20





Home Media Part 1: Why We Don’t Care About Blu Ray

The home media market is in a strange place right now. For awhile it seemed like the HD DVD vs Blu Ray battle would decide the future of personal entertainment but Blu Ray’s continuing slow sales figures now give a clearer indication of what consumers want and where the market is heading.

People aren’t switching from DVD to Blu Ray because they think dvd is good enough, the only added value HD DVD really offers is higher picture quality, and not many people seem to care. The precedent was set by the music industry; people are perfectly happy with 128kbps songs from itunes (a CD is 320kbps). Beyond a certain point higher image/sound quality are given diminishing ratios of importance by consumers. Sure we’d be happy to buy into better looking dvds for about £200, but the biggest problem with Blu Ray is that it doesn’t fit it’s only market.

If we want to ‘’go high-def’’ you’re going to need a Blu-Ray player (about £300) an ‘’HD Ready’’ (what a confusing, un-consumer friendly term) TV costing around £600, a high definition cable subscription plan, because you want your tv to be HD too (Sky HD costs £210 for set up and the box then +£10/month) and that's without considering the added cost of the more expensive discs. In total then over two years going HD will cost you around £1400 or $2800 more than sticking with SD, all that just to have better picture quality.

Unless you’re an audio/visual- ophile nut, or you’re mad rich, you’d actually have to be pretty crazy to spend that kind of money for a few more pixels. As with the CGI backlash, we’re seeing that really how something looks (in terms of pixels not visuals) isn’t that important. Cinema is a means to tell stories; it is primarily a narrative (like literature) and not a visual form of art (like paintings). The Week in Review is edited and published by Jack Spratts. As mentioned in Style of Gimmicks Part 2, the vast array of visual cues and camera techniques only work when used as the most effective way to convey the intended emotion/message otherwise they’re just showing off.

Blu Ray, at its current price point, is just another expensive gimmick. People want their media delivered easier and cheaper (why is bittorent so popular?) and don’t mind about the slight qualitative hit this entails. This is why digital downloads are the future, and this will form the topic of discussion in part 2.
http://www.thecollectiveshelf.com/20...dont-care.html





The Real Story of HDTV Standards—There Aren't Any: Buzzword

Sure, you're excited about next week's Shark Week and ComicCon's preview of the fall television lineup. But are you sure you're seeing every last tooth and Lost easter egg? In his biweekly digital trends column, PM's senior tech editor investigates the lawless lands of broadcast television, where the quality of the picture that ends up on your expensive hi-def set is determined by a bunch of fuzzy math.
By Glenn Derene

When you turn on a high-definition broadcast, you assume that your TV will come to life with the crispest, sharpest picture imaginable. But the fact is, hi-def doesn't always mean high quality.

The standards for what qualifies as HD—the ones that go into effect with the big digital TV changeover in February—were set by the Advanced Television Systems Committee (ATSC) back in the 1990s, and really only involved one major qualification: having a whole lot of pixels. In fact, there's no real regulation over high-definition picture quality at all—"none whatsoever," one industry consultant told me. And that's part of the reason why different HD stations often have wildly varying levels of picture quality that change from one moment to the next. Behind the scenes, content producers, broadcasters and cable and satellite providers are engaged in a constant tug-of-war over bandwidth and video quality, with no hard metrics to even define what looks acceptable. Even officials at HBO, where Generation Kill looks pretty fantastic on my TV, bemoaned the lack of a silver bullet ... for now.

In order to qualify as hi-def, a signal must have either 720 horizontal lines of progressively scanned pixels (720p), 1080 lines of interlaced pixels (1080i) or 1080 lines of progressively scanned pixels (1080p, which nobody even broadcasts yet.) But there's a whole lot more to the quality of digital television than the number of pixels present. After all, 1080 lines of poor-quality pixels may technically be "high-definition," but that doesn't mean it looks very good.

One of the most important factors in determining picture quality is bit rate, or how much video and audio data is being sent down the pipe for each program. The technology behind digital television relies heavily on digital compression, and the ATSC specifies that digital TV use the MPEG-2 compression standard, which is also utilized by DVDs, although some satellite broadcasters use the more efficient MPEG-4 advanced video coding (AVC) standard. These compression technologies are necessary in order to deliver a large number of channels to consumers. Without these codecs, an uncompressed HD video stream could require as much as 1 gigabit per second of data capacity—that's 52 times the capacity of the average broadcast channel. With compression, the same stream can be shrunk almost infinitely. But compression is often used overzealously, and picture quality suffers as a result.

Many people are already familiar with this data-size/fidelity tradeoff from their experiences with digital music: MP3 files with high levels of compression may take up less hard drive space, but they sound muffled and unsatisfying. The same is true for video. When an HD signal is over-compressed, it may have the same number of total pixels, ensuring it's still technically HD, but the picture is often tainted with blocky, pixelated noise and image artifacts.

Surprisingly, there is little regulatory control over compression. According to ATSC president Mark Richer, the ATSC standard does not require minimum bit rates for over-the-air broadcasters, and the FCC requires only that broadcasters provide at least one service that is equivalent to analog television. Each over-the-air channel has a bandwidth of 6 megahertz, which can handle a maximum bit-per-second throughput (also known as "payload") of 19.3 Mbps. But since each broadcaster only needs to provide a 480i digital signal, which typically demands 4 to 6 Mbps, that leaves plenty of space for other subchannels on the same channel's bandwidth. Even high-definition channels (which take up anywhere from 12 Mbps for a good-quality 720p broadcast to at least 15 Mbps for 1080i) should have enough leftover data space to broadcast a quality standard-definiction subchannel.

The math seems to work, but digital TV isn't generally broadcast at set bit rates. Instead, most broadcasters use a technology known as "statistical multiplexing" to dynamically allocate bandwidth to various programs based on the needs of each program, ensuring the most efficient use of the available bandwidth.

For example, an HD broadcast on NBC next month of a track-and-field event during the Olympics would have fast-paced movement requiring a lot of extra bits—in general, the more movement there is on screen, the more pixels need to update in each frame, so the less efficient the compression of the video stream becomes. But a newscast on an NBC sub-channel, with largely static talking heads, requires a lower bit rate for the same perceived quality. So the statistical multiplexer will shift a greater portion of the bits running down the broadcast pipe to a sporting event like the Olympics. "The bit rate for video is incredibly flexible," says television industry consultant Mark Schubin. "The range is enormous—there are broadcasters that have done HD in as little as 6 Mbps and as much as 18 Mbps."

And that's just in the broadcast realm, where only a few programs are potentially running on each channel. Cable and satellite services transmit hundreds of channels at a time, and there is literally no regulatory oversight at all when it comes to compression of HD content on those services. The only applicable language in FCC regulations is the "must carry" rule, which specifies that a cable company cannot down-convert a locally broadcast HD signal to an SD signal. For example, if ABC affiliate KTKA in Topeka, Kan., is sending out Desperate Housewives in 720p, Cox cable service cannot change it to 480i to save bandwidth. In order to keep cable and satellite companies from overcompressing their programs, many cable channels and major networks broker individual minimum-quality-of-service contracts with each provider. But even those are somewhat nebulous.

I asked Robert Zitter, HBO's chief technical officer, what his company's requirements were. "We do a contractual relationship with all of our distributors, and one of the items that's addressed in there is what they can and cannot do with our signal," he says. "But much of it cannot be quantified. There's not a device that's made that can look at a picture and say pass or fail. We all wish we had it—it would make the negotiations a lot easier. Ultimately, it winds up being more subjective than quantifiable."

HBO delivers its programming precompressed, explains Zitter, and does make demands about what other programming the company's content is multiplexed with onto the same channel (no sports channels, animated content or other high-bit-rate-demand content). But HBO is a content provider with plenty of negotiating clout that places a high priority on video quality. For many second-tier cable channels, their programs' compression is often left to the whims of the cable or satellite companies. And as more and more HD channels have ever-higher bit-rate demands, and as increased Internet usage puts more strain on overall cable bandwidth, the horse-trading between broadcasters over bits per second could easily get ugly.

In fact, according to Hugh Brydges, of the Society of Cable Telecommunications Engineers, there is a behind-the-scenes quasi-democracy of bandwidth going on with many cable networks, where major channels get assurances of quality, while certain low-viewership channels aren't really channels in the classic sense at all. Using a technology called "switched digital video," these channels are served up to viewers upon request like a video-on-demand movie. When nobody is watching, the channels take up no space at all.

For the future, the cable and satellite industries have a few tricks up their sleeves to free up some extra bandwidth for more HD programming. Satellite companies are already moving to the more efficient MPEG-4 AVC standard, which allows for more HD channels. The cable industry is moving more slowly to new compression standards and also hopes to phase out a lot of the analog channels that are currently clogging up much of its bandwidth. Interestingly, that puts them in a similar situation to the one many broadcasters are now dealing with because of the digital television conversion: Many customers with older, non-HDTVs will require new set-top boxes to view content. Alas, the only other option is to keep on squeezing that signal.
http://www.popularmechanics.com/tech...y/4275063.html





Netflix 2Q Profit Up 4 Pct, Beats Analyst Views
Michael Liedtke

Netflix Inc.'s second-quarter profit crept up 4 percent, beating analyst expectations as the online DVD rental leader signed up 168,000 new customers while spending less money to attract them to the service.

The Los Gatos, Calif.-based company said Friday that it earned $26.6 million, or 42 cents per share, from April through June, up from $25.6 million, or 37 cents per share, in the same period a year ago.

The average earnings estimate among analysts surveyed by Thomson Financial was 40 cents per share.

Revenue climbed 11 percent to $337.6 million to match analyst estimates.

Netflix shares gained 32 cents, 1.2 percent, to $27.05 in Friday morning trading.

The company ended June with 8.4 million subscribers, and probably would have had even more if it had advertised its service as vigorously as it usually does.

But management has decided to sacrifice some of its growth opportunities to ensure it keeps Wall Street happy with higher profits, Netflix Chief Executive Reed Hastings said during a Friday conference call.

As a result, Netflix trimmed its marketing expenses by $5 million, or 11 percent, from the same time last year.

Despite the cutback and a slowing economy, Netflix had far more success luring new subscribers than last year when it lost 55,000 customers during the spring — the only quarter that the company's service has shrunk during its nine-year history.

"We appear to be substantially unaffected by the negative economic climate," Hastings said.

Netflix could afford to spend less on advertising because its biggest rival, Blockbuster Inc., has been promoting its online rental service less aggressively during the past six months.

But some analysts believe that is about to change now that Blockbuster has abandoned a takeover bid for electronics retailer Circuit City Stores Inc. and is preparing to expand its Internet presence with a pay-per-view online video service acquired last year from Movielink. In a sign that it could be gearing up for more growth, Blockbuster hired a new chief marketing officer just a few weeks ago.

Hastings, though, said he doesn't expect Blockbuster to derail Netflix this year. Underscoring management's confidence, Netflix still expects to end the year with 9.1 million to 9.7 million subscribers — the same guidance issued three months ago.

The company also affirmed its previous profit projections for the year.

Holding the line on advertising costs will be important to Netflix because the company is spending more to develop a service that streams movies and TV shows over high-speed Internet connections.

Netflix still isn't charging more money for unlimited use of the streaming service, even though its costs for licensing movies are rising as the service becomes more appealing to subscribers because of a recently introduced $100 device that automatically shows the video on TV sets instead of computers.

Hastings declined to comment Friday on unconfirmed reports that nearly 100,000 of the TV streaming players made by Roku Inc. had been sold during their first two months on the market.

Microsoft Corp.'s video game console, Xbox 360, is scheduled to start streaming for Netflix this fall, a breakthrough that could increase the usage of the digital service even more dramatically.

Netflix also is facing higher costs to buy high-definition DVDs for subscribers with Blu-ray players, but the company has already decided to raise its prices for that luxury. Hastings said Netflix will begin testing different prices for Blu-ray DVDs during the current quarter.
http://ap.google.com/article/ALeqM5g...rWnGgD924ULOO1





MPAA Wants to Randomly Break Your Home Theater Depending on Which Channel You're Watching
Cory Doctorow

The MPAA is petitioning the FCC to lard cable television with "selectable output control," a DRM system that allows broadcasters to specify which of your TV devices can decode which shows. With selectable output control, parts of your home theater would go dark as you flipped up and down the dial: this show won't play through your Dolby, that one won't go to your PVR, this one won't go to your DVD recorder, that one won't work with your DTV set. It's the digital TV equivalent of one of those absurd Bond-villain world-domination schemes -- the idea that every device that can plug into a TV (including PCs, game consoles, etc) will be designed to shut itself off in the presence of a flag saying, "This device may not receive that program."

Previously, the FCC told the MPAA that this was a dumb idea and to get lost, but Hollywood is nothing if not persistent (as is amply demonstrated by the number of Police Academy sequels produced). The Electronic Frontier Foundation has filed some great comments in the docket:

Right now, your consumer electronics are designed by the consumer electronics industry, which reacts to consumer market demand in choosing how to innovate. That consumer-focused approach makes sense. But if the MPAA has its way, however, we'll be well on the way to a world in which every new feature to every home theater product has to be pre-approved by the content industry.

Link

http://www.boingboing.net/2008/07/22...to-random.html





MPAA Hacker Spied on The Pirate Bay
Ernesto

Court documents show that a hacker, hired by the MPAA, offered to reveal the identities of the Pirate Bay founders. The hacker, who also retrieved private information from TorrentSpy, was paid $15.000 for his efforts.

It turns out that the MPAA will do pretty much anything to obtain information about BitTorrent sites and its users. Back in 2006, they made a deal with a “hacker”, better known as Robert Anderson, to steal e-mail correspondence and trade secrets from TorrentSpy.

The hacker later admitted that this was indeed true, and in a surprising turn of events, he switched sides, and joined TorrentSpy. The court case between the MPAA and TorrentSpy eventually led to the downfall of TorrentSpy, but it turned out that the MPAA was also interested in intel on The Pirate Bay.

Cnet cites court documents showing that Anderson wrote to the MPAA: “We can provide the names, address, and phone (numbers) of the owners of Torrentspy.com and Thepiratebay.org — along with evidence, including correspondence between the two companies.”

In addition, the court documents reveal that MPAA’s Dean Garfield stated: “We were going to get information about the location and identity of the people who were running Torrentspy, as well as information related to a general conspiracy and relationship between Torrentspy and a number of other prominent services including ThePirateBay.”

I a response to the news, Pirate Bay co-founder Peter Sunde told TorrentFreak: “We’re very open with what we do. I think the e-mails between us and Justin would be something along the lines with “what’s up with the scraper that is going berserk” or “what the fuck is up with that filerights-shit?”.. I think it’s amazingly funny if the MPAA bought information like that, expensively, and against the US law. Only proves their stupidity and that they have no case.”

The Pirate Bay has always been one of the main targets of the MPAA. In 2006, John Malcolm, Executive Vice President of the MPAA wrote a letter to Sweden’s State Secretary in which he urged the authorities to take action against the site: “It is certainly not in Sweden’s best interests to earn a reputation among other nations and trading partners as a place where utter lawlessness with respect to intellectual property rights is tolerated.”

It is of course interesting to see that the MPAA is interested in the identities of the Pirate Bay founders, but they could have easily done a Google search, because that info is pretty much public information. I guess they rather use a hacker.

The Pirate Bay website is offline at the moment, unrelated to this news, as they are doing some server maintenance and site upgrades. They will be back soon.
http://torrentfreak.com/mpaa-hacker-...te-bay-080725/





The Pirate Bay Promotes “The Dark Knight” Leak
Ernesto

The Pirate Bay is messing with Hollywood again, as they’ve put up a new logo which links to pirated copies of the blockbuster movie “The Dark Knight”. Although Warner did all it can to protect the film from leaking, a Cam version leaked onto BitTorrent sites soon after it premiered.

The Dark Knight has been a huge success in theaters. In its first weekend, the film grossed a record breaking $158.4 million, and it’s currently on top of IMDB’s top 250 movies of all time with an average rating of 9.3.

The Pirate Bay now joins the hype, as the renamed their site into “The Pirate Bat“, and put up a new logo that links to a search for “The Dark Knight”.

A week ago the police arrested a man who tried to record the movie with a camcorder. However, they couldn’t stop all cammers, and it didn’t take long before a leak got onto various BitTorrent sites. Rlslog reported last week that a copy of “The Dark Knight”, was published by a release group called “TradingStandards”. As usual, reports say that the quality of the leak is pretty poor. There has since been a Telesync of the movie released, which means if nothing else, the sound will be better.

This is not the first time that The Pirate Bay has rebranded its site to piss off content owners. When Apple’s OSX x86 leaked. in July 2005, they renamed the site to the Pear Bay, and linked to the leaked torrent. Back in July 2005 The Pirate Bay put up a logo inspired on Grand Theft Auto for the release of their new website, the Grand Theft Bay. Apart from being creative with their logo’s TPB is known for their hilarious responses to copyright owners who request takedowns.
http://torrentfreak.com/the-pirate-b...t-leak-080725/





Steven Spielberg’s Director’s Cut
Brook Barnes

HOW did Hollywood lose Steven Spielberg?

Late last month, DreamWorks, the boutique movie studio that Mr. Spielberg co-founded in 1994, let it be known that it had found a way to exit its unhappy three-year marriage with Paramount Pictures. Reliance ADA Group, a Mumbai conglomerate, was nearing a deal to give the dream workers $550 million to form a new movie company.

That Mr. Spielberg and his business partner David Geffen had found an investor wasn’t surprising. Mr. Spielberg is a superstar. DreamWorks had made it clear for months — via public comments and private grousing fed into the Hollywood grapevine — that they hated being part of Paramount and were going elsewhere as soon as it was contractually allowed.

But there was still an element of shock: Hollywood could not come up with a rich enough deal for Mr. Spielberg, the most bankable director in the business and a “national treasure”? His last movie alone, “Indiana Jones and the Kingdom of the Crystal Skull,” has sold $743 million in tickets and is still playing in theaters around the world.

For that matter, there wasn’t anybody on Wall Street willing to write a blank check for the guy with “Jaws” and “Jurassic Park” on his résumé?

The pending deal with Reliance underscores some realities about Mr. Spielberg — mainly that he has become so expensive that few public companies can afford him. Mr. Spielberg’s standard deal, on par with other blue-chip talent, is 20 percent of a movie’s gross from the first ticket sold, although he agreed to a somewhat less aggressive paycheck on the latest “Indiana Jones” installment to offset its high budget.

And there’s another whisper coming from Hollywood’s highest echelons. It’s a sensitive topic — and one that Mr. Spielberg’s associates find hugely insulting — but one that bears consideration: How long before the A-list director, at 61, is a little, well, Jurassic?

SUCH talk is rooted in sour-grapes justifications for losing Mr. Spielberg to Reliance, his allies say, noting his huge list of projects on the horizon. Among them are potential blockbusters like “Transformers: Revenge of the Fallen,” which he will produce. He’s also pursuing more cerebral projects like an Abraham Lincoln film with a script written by the “Angels in America” playwright Tony Kushner.

Even so, Mr. Spielberg’s representatives had been talking with potential backers for months, said three people involved who requested anonymity for fear of angering the powerful director. The Spielbergians had casual chats with companies including Sony and the News Corporation. Hollywood-friendly banks like JPMorgan Chase and Goldman Sachs were also in the mix.

Hollywood’s seeming inability to close a deal with Mr. Spielberg highlights the shift toward a more corporate, buttoned-down movie business. Just a few years ago, bragging rights often drove business decisions. Steven Spielberg is available? Back up the money truck. We want that jewel in our crown no matter what the cost. And studio bosses could justify such ego-driven loss leaders: In the entertainment business, talent draws talent.

Associates of Mr. Spielberg say they have not seriously entertained any Hollywood overtures, something corroborated by Ron Meyer, the president of NBC Universal. “We have not been given the opening to be in business with DreamWorks,” said Mr. Meyer, adding that the studio would jump at the chance given “the opportunity and the right deal.”

But now that the big studios are all firmly embedded in big corporations, profit margins are the obsession. Add in skyrocketing star salaries and ballooning marketing costs, which have hammered margins, and pop go the sweetheart deals. “Big names don’t carry the same weight they used to,” said Harold L. Vogel, an independent media analyst.

DVDs also have a starring role in the reluctance to take on risk. After years of blistering growth, domestic DVD sales fell 3.2 percent last year to $15.9 billion, according to Adams Media Research, the first annual drop in the medium’s history. While DVDs are still a big business, any decline is cause for great concern, because DVD sales can account for as much as 70 percent of revenue for a new film.

When DVDs were soaring, studios had an incentive to own projects outright. Recently, they’ve been going the other way, trying to share ownership to protect themselves. Indeed, the DVD situation combined with other business challenges — the arrival of widespread Internet streaming being one of the thorniest — has studios so panicked that all their executives chatter about these days is mitigating risk. Hardly a time to double down on a fat deal with Mr. Spielberg.

Studios are also increasingly focused on out-of-the-park franchise films that sell overseas. The DreamWorks slate is a little patchy — namely because Mr. Spielberg and Stacey Snider, the company’s chief executive, believe in delivering a mix of prestige films and blockbusters. Along with “Norbit,” the sophomoric Eddie Murphy smash that sold $159 million in tickets, come films like “Things We Lost in the Fire,” a drama starring the Oscar-winner Halle Berry that sold about $8.4 million in tickets.

Chip Sullivan, a corporate spokesman for DreamWorks, declined to comment. He said Ms. Snider was on vacation and unavailable. Mr. Spielberg, via a spokesman, declined to comment. Bruce Ramer, the director’s longtime lawyer (Mr. Spielberg named the mechanical shark in “Jaws” after him), also declined to comment.

As for Wall Street, the firm belief in Hollywood is that the arrival of Reliance marks the end of the private equity and hedge fund boom that has propped up the industry. With the capital markets in turmoil, terms have tightened substantially for movie deals. Investors are demanding faster payback schedules, better guarantees and even a say in how movies are made and marketed.

None of that is acceptable to the DreamWorks team. Mr. Spielberg, who has directed more than 50 films, also wants to control his own destiny; at this point in his career, say friends, his accomplishments have earned him the right to have 100 percent control over his movies. Autonomy and ownership are paramount, and, at the moment, overseas investors are the most likely to allow Mr. Spielberg to write his own ticket, say studio executives.

In some ways, Reliance marks a return to the past. Studios have over the last decade tapped American investors — DreamWorks began with backing from Paul Allen, a founder of Microsoft — but foreign investors, notably Germans, were a big source before that.

THE deal with Reliance is not done. People involved in the talks, which are private, say that work is progressing but that no deal is likely to be signed for several weeks. In addition to the $550 million in equity — which may inch higher during negotiations — DreamWorks is seeking access to a $400 million line of debt financing.

And Hollywood will still have a chance to nab a piece of the storied director. After negotiations with Reliance wrap up — if they wrap up — Mr. Geffen and Mr. Spielberg will start looking for a distribution deal with one of the big studios, most likely Universal Pictures or 20th Century Fox.

Will Mr. Geffen and Mr. Spielberg see a bidding war? Probably, but it depends on what kind of terms they want.
http://www.nytimes.com/2008/07/27/bu...a/27scene.html





Ruling Reveals ID of Online Oscar Ticket Seller
Anthony McCartney

A judge's ruling has brought the organization that hosts the Academy Awards a step closer to discovering how tickets to this year's show got online.

An attorney for the Academy of Motion Pictures Arts and Sciences said Wednesday that the organization has learned the identity of a person who posted an ad on Craigslist, claiming to have two tickets available for this year's show.

The disclosure to the Academy comes a day after Los Angeles Superior Court Judge William Fahey ordered Craigslist, an online site where people can post free ads to sell everything from couches to concert tickets, had to disclose the identity of the person who posted the ad in February offering the tickets for $2,500 each.

The poster was identified only as "Daniel."

No one showed up on Craigslist's behalf at Tuesday's hearing.

The Academy sued several people and companies in March, accusing them of selling or brokering Oscar tickets. In court documents, it states that invitees to the Academy Awards show are explicitly told they cannot sell or give their tickets away.

David Quinto, an attorney working for the Academy, said the organization is trying to maintain the security of the Oscars, which each year honors Hollywood's top performers and moviemakers.

"If you don't know who's inside the theater, it's very difficult to provide security," Quinto said.

Attorneys for the Academy told Fahey that cases against several of the original parties named in the lawsuit have been dismissed. Attorneys said they plan to seek default judgments from two of the remaining defendants.

Quinto said Wednesday the Academy plans to add the Craigslist poster to the lawsuit in the hopes of learning who bought the tickets.

According to court documents, the Academy considers anyone who used someone else's Oscar's ticket to be a trespasser at the ceremony.
http://ap.google.com/article/ALeqM5g...pefOgD924512O0





Student Blogger Plans Libel Lawsuit
AP

An attorney for a high school student who brought a free speech lawsuit against her school district last year said he now plans to file a libel lawsuit against the principal.

Jon Schoenhorn, a Hartford attorney representing Avery Doninger, said he has served notice to Burlington, CT Lewis S. Mills High School Principal Karissa Niehoff of the impending lawsuit.

Doninger and her family have been at odds with the district since last year, when Doninger used offensive slang to refer to administrators on an Internet blog. School officials removed her as class secretary, which Doninger said was a violation of her constitutional rights.

The case went as far as the U.S. 2nd Circuit Court of Appeals in New York as Doninger sought an injunction to regain her spot as class secretary and speak at her class graduation in June. The court rejected that request, but her lawsuit is pending.

The threat of a new libel lawsuit stems from an e-mail exchange that Niehoff had with a Wisconsin man who read about the legal case in the New York Post.

School administrators said Niehoff improperly disclosed information about Doninger in the exchange, which the man forwarded to Doninger's family. Niehoff was suspended for two days without pay for the incident.

Schoenhorn said Thursday that Niehoff will be sued for libel "for the false things she said to people about Avery."

A formal lawsuit has yet to be filed, and Schoenhorn declined to give details about when and where the suit might be filed.

Niehoff's attorney, Christine Chinni, declined to comment, citing the pending litigation.

Doninger's mother, Lauren, said Niehoff was punished for making a comment and distributing it on the Internet, the same reason cited for the punishment of her daughter, she said.

"It's not a decision we made lightly," she said. "The irony is too overwhelming that Avery, at 16, made some ill-considered remarks and sent them into cyberspace, and she was punished relentlessly. The principal effectively does the same thing. Does she expect no consequences?"
http://www.newstimes.com/latestnews/ci_9997634





British Judge Rules Tabloid Report Tying Grand Prix Boss to ‘Orgy’ Violated Privacy
John F. Burns

In a ruling with potentially wide implications for press freedom in Britain, a judge ruled Thursday that a tabloid newspaper breached the privacy of Max Mosley, the overseer of grand prix motor racing, when it published an article in March claiming that he had participated in a sadomasochistic “orgy” with a Nazi theme.

The judge, Sir David Eady, awarded Mr. Mosley, 68, damages equivalent to about $120,000 and legal costs estimated to be at least $850,000 in his lawsuit against The News of the World.

The ruling upheld the central arguments by Mr. Mosley and his lawyers: that there had been no Nazi theme to the five-hour sex session in an apartment in the Chelsea district of London that was secretly filmed by the newspaper, and no issue of public interest in its decision to splash the article on its front page and post video on its Web site.

“I found that there was no evidence that the gathering of March 28, 2008, was intended to be an enactment of Nazi behavior or adoption of any of its attitudes,” the judge wrote.

He added that Mr. Mosley had a “reasonable expectation” of privacy for sexual activities that took place on private premises and that did not involve violations of the criminal law.

“There was no public interest or other justification for the clandestine recording, for the publication of the resulting information and still photographs, or for the placing of the video extracts on The News of the World Web site — all of this on a massive scale,” the judge said.

But he denied Mr. Mosley the “punitive damages” he had sought, which could have amounted to millions of dollars. The damage done to Mr. Mosley’s reputation by “the embarrassing personal information” disclosed by the newspaper “cannot be mitigated by simply adding a few noughts to the number first thought of,” the judge said.

Outside the court, Mr. Mosley said he was delighted with the ruling, which he described as “devastating” to The News of the World.

“It demonstrates that their Nazi lie was completely invented and had no justification,” he said. “It also shows that they had no right to go into private premises and take pictures and film of adults engaged in activities which are no one’s business but those of the people concerned.”

The ruling was one of several by Justice Eady and other judges in recent years in privacy cases against British newspapers under a provision of the European Convention on Human Rights. Some legal experts say the rulings have shifted the balance in Britain in favor of celebrity plaintiffs and against newspapers and other media organizations in invasion-of-privacy cases.

Justice Eady, in his finding, said his ruling should not be considered “a landmark case,” but rather “the application to rather unusual facts” in the Mosley case of privacy principles that had been developing in British court judgments in recent years. Still, the ruling caused a stir among lawyers fighting for press freedoms, some of whom said it was a bellwether for a new, more restrictive era of news media coverage of people in the public domain.

Other lawyers cautioned against alarmism, saying British courts would continue to weigh two competing provisions in the European rights convention — Article 8, establishing a right of privacy, and Article 10, protecting press freedoms — and that it was too early to know where the lasting balance would be struck.

“One lesson it teaches is that public figures can have a private life,” said Desmond Browne, a barrister who has represented some of the plaintiffs in headline-making privacy cases.

Editors of some of Britain’s more serious newspapers also were wary about drawing instant conclusions about where press law in Britain was headed.

Roger Alton, editor of The Independent, a newspaper known for the rigor of its investigative journalism, said he was not too troubled by the ruling.

“It’ll affect kiss-and-tell stories,” Mr. Alton told the British Broadcasting Corporation. “But it’s not a landmark. It’s not going to set things up in a completely different way.”

But Colin Myler, editor of The News of the World, said the judgment was based on precedents established by “judges in Strasbourg,” seat of the European Court of Human Rights, and that the issues involved had never been addressed by Britain’s Parliament. “As a result, our media are being strangled by stealth,” he said.

For Mr. Mosley, success in the case represented at least a partial vindication of what amounted to a gamble. Rather than resigning in shame, as have many well-known figures caught in sex scandals, Mr. Mosley chose another route. He admitted to a passion for sadomasochism, which he told the court had continued for 45 years, and discussed, from the witness box, details of what had occurred in the Chelsea apartment.

But the aspect of the article that he, and many of his detractors in the world of motor racing and beyond, considered the most damaging was the claim that the session involved a conscious effort to recreate the atmosphere of a Nazi death camp.

The potential damage to Mr. Mosley was linked, inevitably, to the fact that he is the son of Sir Oswald Mosley, leader of Britain’s National Union of Fascists in the 1930s, whose secret marriage to Mr. Mosley’s mother, Diana, took place at the home of the Nazi propaganda chief Joseph Goebbels in 1936, with Hitler as guest of honor.

In court, lawyers for The News of the World said they based their claim of a Nazi theme, in part, on the use of commands in guttural German or German-accented English by Mr. Mosley and the women involved. But Mr. Mosley and four of the five women involved maintained that what they intended in their role-playing was to recreate a generic prison scene, not a Nazi death camp.
http://www.nytimes.com/2008/07/25/wo.../25mosley.html





New York State Passes Video Game Labeling Law

Video games sold in New York state must clearly label ratings for violent content under a law signed on Tuesday, which rights groups criticized as likely unconstitutional.

The New York Civil Liberties Union said that it planned to mount a legal challenge against the law, signed on Tuesday by New York Gov. David Paterson, as it raised free speech concerns.

The group said that similar laws in California, Illinois, Michigan, Minnesota and Washington state have been thrown out as unconstitutional.

The U.S. video gaming industry submits to ratings on a voluntary basis, and the system is similar to movie ratings.

The new law says that is it compulsory for games that are already rated to be labeled and also requires that new video game consoles are installed with parent-controlled lockout features by 2010.

"This legislation will provide information and educate consumers to help them make better choices for their children," said state Sen. Andrew Lanza, a bill sponsor.

Robert Perry, the NYCLU's legislative director, said the new law was a "back-door" way of regulating video game content.

The law also establishes an advisory council to study "the connection between interactive media and real-life violence in minors exposed to such media" and to evaluate the ratings issued by the Entertainment Software Ratings Board.

(Reporting by Edith Honan, editing by Christine Kearney and Eric Beech)
http://news.yahoo.com/s/nm/20080723/...RvGw1BC8MjtBAF





Net Censorship Law Struck Down Again
Ryan Singel

A federal appeals court struck down as unconstitutional a Clinton-era law that would have forced websites with adult material to verify visitors' ages, dealing another blow to the government in a 10-year court battle over net censorship.

The 3rd U.S. Circurt Court of Appeals upheld on Tuesday a 2007 lower-court decision that the Child Online Protection Act violated the First Amendment since it was not the most effective way to keep children from visiting adult websites.

Both courts also found that the standards for material that had to be hidden from open browsing were so loosely defined that any content not suitable for a four-year-old would have been hidden behind a age-verification firewall.

"Unlike COPA, filters permit adults to determine if and when they want to use them and do not subject speakers to criminal or civil penalties," the court wrote.

The Justice Department has been defending COPA since its passage in 1998, when the ACLU and others filed suit against the censorship law and won an immediate injunction. Since then, the court battle has made its way twice to the Supreme Court, though the government has never won any clear battles in the dispute.

COPA makes it a crime to knowingly post material that is "harmful to minors" on the web for "commercial purposes" without having some method -- such as a credit card -- to verify a visitor's age.

Critics assailed the law for infantilizing the internet and requiring website operators -- including news sites -- to live in fear of prosecution if even a small part of their website contained adult material.

COPA was intended to be a narrower version of the 1996 Communications Decency Act, which would have catastrophically extended the rules of television 'decency' to the internet had the Supreme Court not emphatically rejected it in 1997.

In its ruling, however, the appeals court did not see much of a difference between the two laws.

"It is apparent that COPA, like the Communications Decency Act before it, 'effectively suppresses a large amount of speech that adults have a constitutional right to receive and to address to one another,' Reno, 521 U.S. at 874, 117 S.Ct. at 2346, and thus is overbroad. For this reason, COPA violates the First Amendment," the judges wrote. "These burdens would chill protected speech."

The ACLU's Chris Hansen, a First Amendment lawyer for the rights group, applauded the decision.

"For years the government has been trying to thwart freedom of speech on the Internet, and for years the courts have been finding the attempts unconstitutional," Hansen wrote in a statement. "The government has no more right to censor the internet than it does books and magazines."

The Justice Department is not pleased with the decision and is reviewing its options, according to spokesman Charles Miller.

"We are disappointed that the Third Circuit Court of Appeals struck down a Congressional statute designed to protect our children from exposure to sexually explicit material on the internet," Miller said.

The ACLU, suing on behalf of Salon magazine sexualhealth.com and the owner of the Urban Dictionary website, successfully argued that the law criminalizes constitutionally protected speech, would drive pornography sites to non-U.S. servers, and prevent the spread of health information due to people's unwillingness to register to read sensitive information.

They also argued the law would apply to anyone who wrote about mature subjects who also happened to have Google or Yahoo ads on their personal blog.

For its part, the government says the law was intended to apply to pornographic websites, not news sites. It also argues COPA's age restrictions would work with content filters.

The government is likely to appeal Tuesday's decision for a full hearing at the appeals court or to the Supreme Court.
http://blog.wired.com/27bstroke6/200...ensorship.html





FCC Surprised And Disappointed By Super Bowl Ruling
FMQB

FCC Chairman Kevin Martin has released a statement saying that he's "surprised" and "disappointed" by yesterday's appeals court ruling that said the FCC was wrong to fine CBS for Janet Jackson's "wardrobe malfunction" at the 2004 Super Bowl. The court found that the FCC "arbitrarily and capriciously departed from its prior policy" that exempted fleeting and unexpected broadcast material from being deemed an indecency violation. In the fall, the Supreme Court will hear a case involving fleeting and unscripted swear words that were uttered on television by Cher and Nicole Ritchie, among other celebrities. Martin said that yesterday's decision "highlights the importance of the Supreme Court’s consideration of our indecency rules this Fall."

"The Third U.S. Circuit Court of Appeals decided that the Janet Jackson incident during the Super Bowl Halftime show was not indecent and declared that the FCC was wrong to fine CBS for the broadcast," Martin said, according to the Wall Street Journal. "I am surprised by [the] decision and disappointed for families and parents. The Super Bowl is one of the most watched shows on television, aired during the hours when children are most likely to be in the audience. Hundreds of thousands of people complained about the show, and a unanimous Commission found that it was inappropriate for broadcast television. In fact, following this incident, Congress said we should be assessing greater fines – as much as 10 times the amount we actually fined CBS – for incidents like these in the future. I continue to believe that this incident was inappropriate, and this only highlights the importance of the Supreme Court’s consideration of our indecency rules this Fall."

The entire 102 page court ruling can be read, in PDF format, here.
http://fmqb.com/Article.asp?id=802804





Software Makers Threaten to Sue eBay Over Counterfeits
Holly Jackson

First it was fashion giant LVMH Moet Hennessy Louis Vuitton SA complaining about counterfeit fashion goods on eBay. Then it was Tiffany taking eBay to court.

Now it's the software industry telling eBay that it needs to do more to detect and delete listings for counterfeit goods--or else.

The Software and Information Industry Association, a Washington, D.C., trade association that counts companies such as Intuit, Sun Microsystems, and Red Hat as board members, said on Thursday that it's contemplating a lawsuit against eBay. Another option, the group said, would be lobbying Congress to rewrite the Digital Millennium Copyright Act and make online auctioneers liable for what's sold.

"Their refusal to work with us will only push us closer and closer to a lawsuit," Keith Kupferschmid, SIIA's senior vice president for intellectual property policy and enforcement, said in an interview.

Kupferschmid said the SIIA has offered at least 20 suggestions to eBay listing ways it can aid the software industry in curbing the sale of pirated software. Among the suggestions: not allowing the "Buy It Now" option on software; placing a notice in a user's feedback if they have been caught selling pirated software; adding a delay on software auctions so they can be reviewed; and permitting the SIIA to run a paid ad on the Web site telling eBay visitors about the risk of buying pirated software.

"They just say no," Kupferschmid said. "We've never been given any rationale."

Instead of taking legal aim at eBay--no suit has been filed so far--the SIIA has busy targeting individual pirates on the site.

It made a point of touting a federal prosecution in which Jeremiah Mondello, 23, of Eugene, Ore., was sentenced on Wednesday to four years in prison for selling $1 million worth of counterfeit software. Prosecutors said Mondello made more than $400,000 in profit from the sales, and included an aside in a press release saying that the SIAA provided "assistance to the investigation."

The SIIA has relied on civil cases filed against eBay users. This year it says it has filed 32 civil complaints, and Kuperfschmid said all previous cases have resulted in victories. The users convicted of copyright infringement were kicked off the site, and some also paid monetary damages at an average of $50,000.

But assailing only individuals isn't sufficient for the SIIA, who said it is considering suing eBay itself for copyright infringement.

"That's something that we have talked about with our members and talked about internally...we are certainly waiting to see if eBay will do more, or actually do anything to address the software piracy problem they have on their site," Kuperfschmid said.

It may be an uphill battle. In last week's decision, a federal judge in New York wrote that eBay cannot be forced to shoulder the burden of examining individual auction listings for possible counterfeits.

"The court is not unsympathetic to Tiffany and other rights holders who have invested enormous resources in developing their brands, only to see them illicitly and efficiently exploited by others on the Internet," U.S. District Judge Richard Sullivan wrote. "Nevertheless, the law is clear: it is the trademark owner's burden to police its mark."

For its part, eBay says it spends $5 million a year on maintaining its fraud search engine, which has 13,000 rules that are designed to identify counterfeit listings based on words such as "replica" or "knock-off." Listings flagged by the search engine are manually reviewed by customer service representatives. In addition, eBay offers a Verified Rights Owner ("VeRO") program that lets trademark owners report and remove infringing listings.

Making matters tricky is that it may (or may not) be legal to resell legitimately purchased software if the End User License Agreement, or EULA, says you can't. Courts in different states have reached different conclusions about whether the EULA contract can trump the generally recognized right, called the first sale doctrine, of customers to resell books, DVDs, or audio CDs.

"Counterfeits are very bad for our business--we don't want them on our site. People don't want to buy them and we don't want to sell them. But we can't be the expert," eBay spokesperson Nichola Sharpe said on Thursday. "We recognized very early on we need to partner and collaborate. We established the VeRO program in 1998 and we partner with 18,000 associations, including the SIIA."

Sharpe said the VeRO program allows a copyright owner to patrol the site and notify eBay to take down the listing. In addition, she said her employer takes extra steps to prevent illegal goods such as luxury goods and software from being listed, though it will not remove the "Buy It Now" option at SIIA's request.

SIIA's concern isn't exactly new: It launched a so-called auction litigation program in May 2006 and has been occasionally agitating against eBay ever since.

The SIIA said it had been waiting until the results of the counterfeit lawsuit brought by jewelry maker Tiffany were in.

Kuperfschmid thinks that any SIIA lawsuit would be taking a different approach, perhaps relying more on copyright law than trademark law, which had been Tiffany's strategy. (Tiffany's lawyers said last week that their client was likely to appeal.)

"The standards are somewhat different under copyright than trademark law," Kuperfschmid said. "If you look in the statute under the DMCA (Digital Millennium Copyright Act), it does have a standard for determining when eBay may or may not be liable," Kuperfschmid said.

And if courts eventually rule that the DMCA doesn't force eBay to be the kind of Net-cop that the SIIA might like, there's always one remaining option: rewrite the law.

"There may be a point where we decide to go up to Congress and ask for legislation that would make eBay and other similar sites required to take what I would call 'preemptive and proactive steps' to prevent infringement on parts of their sites," Kuperfschmid said. "And if they didn't, they could be liable."

CNET News' Declan McCullagh contributed to this report
http://news.cnet.com/8301-1023_3-9999429-93.html





BSkyB and Universal to Launch Digital Music Service
Mark Sweney

Amy Winehouse: one of the Universal Music artists whose tracks will be available as part of the link-up with BSkyB. Photograph: EPA

BSkyB is to break into the digital music market with a new business, launched in conjunction with Universal Music, that aims to take on Apple's iTunes in the UK.

The new as-yet-unnamed venture, in which BSkyB is the majority shareholder and Universal is an equity partner, aims to launch by the end of the year.

The service, which is likely to be Sky-branded, will offer a monthly subscription service as a counter to iTunes' track-by-track purchasing.

The subscription will give users unlimited access to streamed tracks plus a set number of download-to-own songs, initially to Universal Music's catalogue of hundreds of thousands of songs from artists including Amy Winehouse, U2, Kanye West, Duffy, Rihanna, Eminem, Elton John and Abba.

Downloaded tracks will work on any device that can play MP3s, including iPods and mobile phones.

BSkyB, which several years ago registered the brand name Sky Tunes, is in negotiations with other music companies to join the venture and to potentially take equity.

Pricing of the subscription packages, and the number of tracks that will be made available to download for each tier, will be revealed closer to the time of launch.

"We think that there is a considerable unmet and untapped demand in the digital music market," said the BSkyB chief operating officer, Mike Darcey. "There is a desire among consumers to consumer, discover and purchase music online."

He added that not all those needs were met by the current legal services and that some offerings were "not well-marketed".

"We have considerable expertise in customer-focused subscription services, content aggregation, packaging and marketing," he said. "We have strong broadband services and online assets and we have contact with one in three UK households. No one has brought that to bear."

The new service will compete against music download stores from companies including 7digital, HMV and, in the near future, Amazon UK.

Mark Mulligan, a vice-president at analysts JupiterResearch, said that the service would compete directly against existing subscription offerings from the likes of Napster and eMusic.

He added that music companies are keen to see a wider range of distribution services for their music and more competition for iTunes, which accounts for more than 70% of the UK digital music market.

"The music industry is still trying to knock Apple down to size," he said. "People are realising that people are not buying digital music in the numbers they should be. The decline in CD buying is greater than the rate people are buying digital music."

Mulligan said that BSkyB's announcement was the first of a "second coming" of music subscription services that failed to take off a few years ago.

"Sky is trying to be the first music service targeted at families. They have relationships with households, while offerings such as Apple have been more about young, tech-savvy one-to-one relationships."

He added that there was a political dimension for Sky, which runs an ISP service, supporting legal music services.

"It is very important for the music industry to help find legal solutions," said Darcey.
http://www.guardian.co.uk/media/2008...b.digitalmedia





DRM Still Sucks: Yahoo Music Going Dark, Taking Keys With It
Nate Anderson

The bad dream of DRM continues. Yahoo e-mailed its Yahoo! Music Store customers yesterday, telling them it will be closing for good—and the company will take its DRM license key servers offline on September 30, 2008. Sure, it's bad news and yet another example of the sheer lobotomized brain-deadness that has characterized music DRM, but the reaction of most music fans will be: "Yahoo had an online music store?"

If you think this sounds familiar, it's because this happened earlier this year with MSN Music, although Microsoft has since relented and will keep the DRM authorization servers up and running through 2011.

Once the Yahoo store goes down and the key servers go offline, existing tracks cannot be authorized to play on new computers. Instead, Yahoo recommends the old, lame, and lossy workaround of burning the files to CD, then reripping them onto the computer. Sure, you'll lose a bunch of blank CDs, sound quality, and all the metadata, but that's a small price to pay for the privilege of being able to listen to that music you lawfully acquired. Good thing you didn't download it illegally or just buy it on CD!

No, you were one of the digital pioneers, and in this brave new frontier world, a few people are just going to get malaria. Fact of life. And someone will step in a bear trap, and then it's time for the bite rag, the alcohol, and the saw. Just the price of progress. And yes, some poor group will get trapped in snowfall when crossing the pass, and cannibalism may or may not be involved by the time they stumble barefoot from the mountains next spring. No one can prevent such tragedies.

Well, except for everyone who saw this coming. Ars has been one of only many groups banging the anti-DRM drum for years. We're not pro-piracy, we're just not dumb as rocks. DRM makes things harder for legal users; it creates hassles that illegal users won't deal with; it (often) prevents cross-platform compatibility and movement between devices. In what possible world was that a good strategy for building up the nascent digital download market?

The only possible rationales could be 1) to control piracy (which, obviously, it has had no effect on, thanks to the CD and the fact that most DRM is broken) or 2) to nickel-and-dime consumers into accepting a new pay-for-use regime that sees moving tracks from CD to computer to MP3 player as a "privilege" to be monetized. What we really need to do is just—you know what? Why bother. We've been down this road so many times before that everyone knows their lines by heart.

No, it's not the end of the world; yes, we have bigger problems. But the Yahoo news is just another depressing reminder of all the wasted time and energy put into these schemes designed to create roadblocks for legal users. At least the music business has gotten the message, and all four major labels and most indies now sell DRM-free online.
http://arstechnica.com/news.ars/post...s-with-it.html





Apple Has Killed Audio Quality, Says Neil Young
Andre Yoskowitz

Rock star Neil Young made some interesting comments at the Fortune Brainstorm Tech Conference yesterday including his suggestion that music sound quality has been "dumbed down to Fisher-Price toy levels" since the inception of the iPod.

“Apple has taken a detour down the convenience highway,” Young said. “Quality has taken a complete backseat - if it even gets in the car at all.”

Young spoke out about the poor audio quality of the most popular audio codec, MP3, and also talked about his "long-term, multimedia archiving project of his entire career" which will be available as a series of Blu-ray discs. Young hopes his project will become the basis for an alternative digital platform with higher quality sound.

The artist spent most of his time expressing his feelings at the decline in audio standards and put the blame mainly on companies such as Apple who he feels have "an increasing focus on convenience versus quality."

“We have beautiful computers now but high-resolution music is one of the missing elements,” he said. “The ears are the windows to the soul.”
http://www.afterdawn.com/news/archive/14892.cfm





Apple Shares Beaten Late on Concerns Over CEO's Health, Guidance
Kasper Jade

Apple handily beat expectations for its fiscal third quarter Monday, but investors used a late trading session to punish shares of the Mac and iPhone maker after the company offered conservative forward-looking guidance and refused to comment on the health of chief executive Steve Jobs.

In a statement following the market's close, Apple said third-quarter profits rose more than 30 percent to $1.07 billion, or $1.19 per diluted share, on revenues of $7.46 billion, driven by record sales of nearly 2.5 million Macs and double-digit iPod growth to more than 11 million units.

However, the Cupertino-based company saw its shares tumble 10.75 percent, or nearly $18, to $148.42, as investors overwhelmingly rejected management's guidance of $1.00 in per share earnings on sales of $8.3 billion for the current fourth quarter. On average, analysts had been forecasting earnings of $1.23 per share on the same amount of revenue.

In a subsequent conference call, Apple chief financial officer Peter Oppenheimer also braced analysts for unwelcome declines in the company's gross margin going froward. He said an ongoing back-to-school promotion and an unspecified product transition during the current quarter will see gross margin fall sequentially by 330 basis points to 31.5 percent.

Oppenheimer told analysts to expect average gross margin for all of fiscal 2009 to come in even lower at 30 percent, as the company moves forward with a strategy that will see it introduce new "state of the art products" that will generate slimmer profits because they'll be offered at price points that can't be matched by rival electronics makers.

Also weighing on Apple shares late Monday were rejuvenated concerns over the health of chief executive Steve Jobs. Shares struggled in the red for most of the day after the New York Post reported that some hedge fund managers on Wall Street are finding it difficult to cope with the increasingly gaunt appearance of the company co-founder.

Jobs's physical health has been an on-again, off-again topic of concern ever since he was diagnosed with a rare form of pancreatic cancer four years ago, for which he underwent successful treatment. However, his overly haggard appearance at last month's Apple developer conference spooked a number of investors and company followers who wondered if his health had begun to relapse.

"Multiple sources who have met with - and in some cases even dined with - Jobs in the weeks surrounding the introduction of the iPhone 3G on July 11, said they came away troubled by his thin appearance," the Post reported.

When asked by an analyst about Jobs's condition on Apple's quarterly conference call Monday, Oppenheimer refused to provide any color, citing his boss's right to privacy.

"Steve loves Apple. He serves at the pleasure of Apple's board," he said. "He has no plans to leave Apple. Steve's health is a private matter."
http://www.appleinsider.com/articles...uidan ce.html





Apple’s Culture of Secrecy
Joe Nocera

“No one wants to die,” said Apple’s chief executive, Steven P. Jobs. “And yet death is the destination we all share. No one has ever escaped it.”

It was a little over three years ago that Mr. Jobs spoke those existential words, in a commencement address at Stanford. His thoughts about death came during a portion of his speech in which he publicly discussed — for the one and only time, so far as I can tell — his brush with pancreatic cancer.

He talked about how he had learned in 2004 that he had a tumor on his pancreas. How his doctors told him that he shouldn’t expect to live more than six months. How, after “living with that diagnosis all day,” he had a biopsy that showed that his was a rare form of pancreatic cancer, curable with surgery. “I had the surgery and I’m fine now,” Mr. Jobs told the Stanford graduates. He added, “Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose.”

It was an uplifting tale, and an inspiring message. It was also less than the whole truth. In fact, Mr. Jobs first discovered he had an islet cell neuroendocrine tumor — which is both rarer and less deadly than other forms of pancreatic cancer — in October 2003. This was a full nine months before he had the surgery to remove it. Why did he wait so long? Because, according to a Fortune magazine article published in May, Mr. Jobs was hoping to beat the cancer with a special diet.

The Apple directors who knew the gravity of the situation urged him to undergo surgery, according to the Fortune article. But it was only when Mr. Jobs realized that the tumor was growing that he finally agreed. And only after the surgery was successful did he inform employees that he had been sick, in an e-mail message in which he declared himself “cured.” That’s how Apple’s shareholders found out, too. The company has never spoken about his illness, citing his “privacy” concerns.

I bring this up because of what transpired on Tuesday afternoon, during Apple’s third-quarter conference call. In June, rumors began swirling that Steve Jobs was sick again. They had started during the company’s annual Worldwide Developers Conference, where Mr. Jobs looked unusually thin and haggard.

Although the Apple public relations machine quickly put out the word that Mr. Jobs had been struck by “a common bug,” few investors were buying it. Wall Street analysts were besieged with questions from clients, wanting to know about Mr. Jobs’s health. On Monday, The New York Post published an article citing “multiple sources” who, the paper said, had met with Mr. Jobs and were “troubled by his thin appearance.” So when the Apple conference call on Tuesday opened for questions, a Lehman Brothers analyst named Ben Reitzes gently asked the $64,000 question.

“A New York newspaper today called into question some issues around Steve and his health,” he said. “Would you mind addressing the situation?”

“Steve loves Apple,” replied Peter Oppenheimer, the company’s chief financial officer. “He serves as the C.E.O. at the pleasure of Apple’s board and has no plans to leave Apple. Steve’s health is a private matter.”

That was it. No insistence that he was cancer-free. No attempt to explain his gaunt condition. No nothing. When I spoke to Steve Dowling in Apple’s public relations department on Thursday, I got the same response. “Steve’s health is a private matter,” Mr. Dowling said. Then, just for good measure, he said it again. “Steve’s health is a private matter.”

But is it really?

•

There are no hard and fast rules about how and when companies need to disclose information about the health of their chief executives. In 1995, when Andrew S. Grove, then the chief executive of Intel, received a diagnosis of prostate cancer, he informed the company’s board and management. Intel. But he never told the company’s shareholders. Mr. Grove says now that because the cancer never impaired his ability to do his job, there was no reason to inform shareholders. (The world found out about Mr. Grove’s illness only when he wrote about it the following year.)

On the other hand, when Charles H. Bell received a diagnosis of colorectal cancer shortly after he became the chief executive of McDonald’s in 2004, the company quickly released the news. Mr. Bell resigned from the company that November, and died two months later.

“The question surrounding any kind of corporate disclosure always is: Is it material?” said Larry S. Gondelman, a lawyer with Powers Pyles Sutter & Verville. “And there is no bright line test in determining materiality.” A spokesman for the Securities and Exchange Commission said that the law defined materiality as information that “the reasonable investor needs to know in order to make an informed decision about his investment.”

No company has ever been held to account by the S.E.C. for failing to disclose information about its chief executive’s health, and I’m not suggesting that the S.E.C. should go after Apple for keeping mum about Mr. Jobs’s health. Indeed, I found plenty of people who felt he had every right to keep the information to himself. “As long as he is healthy, he doesn’t have to disclose,” said Charles R. Wolf, an analyst at Needham & Company. Roger McNamee, the well-known technology investor at Elevation Partners, said, “Because Steve Jobs has been appearing in public regularly, investors are getting a valuable form of disclosure.”

But if ever there was a chief executive who ought to feel some responsibility to tell shareholders about his health, it is Steve Jobs. First of all, he is not like other chief executives — he is, instead, the single most indispensable chief executive on the planet. As Mr. Wolf nicely put it, “Apple is Steve Jobs and Steve Jobs is Apple.” He added, “I think the stock would drop 25 percent or more if he were to leave the company unexpectedly.” When investors whisper about Mr. Jobs’s health, it’s not just gossip they are indulging in — his health really matters to Apple’s future.

Secondly, Mr. Jobs has had cancer, for crying out loud — and in the public mind, a particularly insidious kind. Although several doctors I spoke to say that the kind of cancer he had, and the kind of operation he underwent, give him a better-than-even chance of living a long and happy life, there are no guarantees with cancer. We all know that. Which is all the more reason why, at a minimum, Apple should flatten the rumor that his cancer has recurred — even if it won’t go further than that. “Not being able to provide a statement effectively dismissing the question is really unsatisfactory to most investors,” said A. M. Sacconaghi Jr., who follows the company for Sanford C. Bernstein.

The final reason, to be blunt about it, is that Apple simply can’t be trusted to tell truth about its chief executive. Under Mr. Jobs, Apple has created a culture of secrecy that has served it well in many ways — the speculation over which products Apple will unveil at the annual MacWorld conference has been one of the company’s best marketing tools. But that same culture poisons its corporate governance. Apple tells analysts far less about its operations than most companies do. It turns low-level decisions into state secrets. Directors are often left out of the loop. And it dissembles with impunity.

As, indeed, it has in this latest episode. On Wednesday, John Markoff reported in The New York Times that Mr. Jobs had had a surgical procedure earlier this year, the details of which remain unclear. I hear that he has had ongoing digestive difficulties, which have contributed to his weight loss — possibly a side effect of the surgery. And in the weeks leading up to the conference, he came down with an infection, which had a lot to do with why he looked so gaunt. It wasn’t cancer, thank goodness. But was more than a “common bug.” By claiming Mr. Jobs had a bug, Apple wasn’t just going dark on its shareholders. It was deceiving them.

It would be horrible if Mr. Jobs had a recurrence of cancer. I hope it never happens. At 53, he is in the prime of his life, the father of a young family. And for the rest of us, it’s exhilarating watching him work his magic in the marketplace. Steve Jobs has created more value and driven more innovation than just about anybody in business. Who doesn’t want to see what he’ll come up with next?

He also, though, needs to treat his shareholders with at least a modicum of respect. And telling them whether or not he is sick would be a good place to start.

On Thursday afternoon, several hours after I’d gotten my final “Steve’s health is a private matter” — and much to my amazement — Mr. Jobs called me. “This is Steve Jobs,” he began. “You think I’m an arrogant [expletive] who thinks he’s above the law, and I think you’re a slime bucket who gets most of his facts wrong.” After that rather arresting opening, he went on to say that he would give me some details about his recent health problems, but only if I would agree to keep them off the record. I tried to argue him out of it, but he said he wouldn’t talk if I insisted on an on-the-record conversation. So I agreed.

Because the conversation was off the record, I cannot disclose what Mr. Jobs told me. Suffice it to say that I didn’t hear anything that contradicted the reporting that John Markoff and I did this week. While his health problems amounted to a good deal more than “a common bug,” they weren’t life-threatening and he doesn’t have a recurrence of cancer. After he hung up the phone, it occurred to me that I had just been handed, by Mr. Jobs himself, the very information he was refusing to share with the shareholders who have entrusted him with their money.

You would think he’d want them to know before me. But apparently not.
http://www.nytimes.com/2008/07/26/bu.../26nocera.html





Killer rip

Citizen Woz – Proto-Pirate
Rick Auricchio

My first VCR was the JVC HR-6700U, which I bought in late 1979 or early 1980. At the time, an Apple colleague had a contact in the consumer-electronics industry. Several of us Apple guys bartered Apple equipment for VCRs. I also got some stereo speakers that way.

The 6700U had a fully-electronic tuner as opposed to the turn-knob ones common at the time. The user could therefore tune any of the 16 (20?) tuning buttons to any channel; you didn’t have to accept all existing channels, just the ones you cared about. Also, the tuning was by means of small knobs for each “slot.” We were able to tune the TV cable “mid-band” between channels 6 and 7, to pick up additional channels. Those channels were not normally available without paying for a fancier cable box.

The digital timer allowed two-week advance programming, but didn’t support “all-weekday” programs. You could do, e.g. every Thursday or all seven days, but not Mon-Fri.

Now here’s a funny anecdote. Andy Hertzfeld, later of Macintosh fame, was one of my colleagues at Apple at the time. His 6700U developed a clock problem: it ran exactly four times faster than real time. As engineers, we all knew that some divider chip had failed. But Andy didn’t want to part with the unit and wait for warranty service. Being a resourceful software engineer, he simply wrote a program on the Apple ][. He entered the date/time of the desired TV program, then the current clock reading—which could be almost any “random” day/hour/minute. The program then told him what to set for the recording, having computed where the VCR’s overspeed clock would be when the program aired.

Another anecdote. We used to line up a half-dozen of the VCRs and copy tapes. Just plop ‘em on an unused desk, cable ‘em all up, and push all the buttons. This was bad enough, but then Steve Wozniak wanted a tape of the newly-released “The Empire Strikes Back.” He bribed a San Diego projectionist to “borrow” the print from the cinema and drive it to Los Angeles in the dead of night. After several hours in a transfer facility, he had a 3/4″ U-Matic professional copy of the film print, and the projectionist high-tailed it back to the cinema to return the print. That tape also made its way into the copying chain. We were perhaps the first half-dozen people with videotape copies of the film. (I discarded my heavily-letterboxed copy years ago…)

Woz later mentioned that the 4000-foot film reels wouldn’t fit the 3000-foot tables on the transfer machine, so they spent extra time cutting the print into sections that would fit, then spliced it back into its original form. Film companies, however, are very cautious that nobody steals frames from a film, lest they be printed into illegal still photos. The prints were examined to detect frame-stealing. Woz never asked whether the splices got the projectionist into any trouble; an occasional splice could be due to a film break, but not several at regular intervals.
http://blog.modernmechanix.com/2008/...bs&Qis=XL#qdig
















Until next week,

- js.



















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