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Old 07-09-06, 01:56 PM   #1
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Default Peer-To-Peer News - The Week In Review - September 9th, '06

"Machida said the sun could send enough energy to Earth in as little as an hour to provide for all the world's energy needs for one year." – Georgina Prodhan

"It may be perfectly secure, but my daughter is a minor and I understand that supposedly the kids have the option to not have their prints scanned, but that's not being articulated to my daughter." – Hal Storey

"The need to have media companies at all is disappearing. You can create and distribute music on your own, all the delivery systems are free, the networking is free—where do you need a media company? DRM is a way to close all these alternate systems down. All we’re trying to do is slow the adoption of DRM long enough to give these new models a chance." – Peter Brown

"The individual artist has been at the back of the line in terms of support in American funding over the last decade, so any new system designed to get support directly into the hand of working artists is important." – Philip Bither

"I still don’t think if I was making 'Pink Flamingos' today I would ever get a grant, no matter how liberal the organization." – John Waters

"These actions not only violated the privacy rights of our employee, but also the rights of all reporters to protect their confidential sources." – Sarah Cain

It’s Free!

So what’s it going to be? 99 cents at iTunes and a bunch of DRM or free from SpiralFrog and a bunch more DRM?

The tempest rages.

Let’s admit it, for most kids 99 cents can be hard to come by. A barrier must be high indeed to turn them off to free, at least until they’re old enough to covet the status that comes with owning an iPod or the future's trendy equivalent, and they gain the financial ability to indulge themselves. As our next generation of consumers gets used to grabbing tracks from RIAA-approved sources for nothing (there’s a shock), they may find it unreasonable to switch to paid models even when they have the money. For today’s grownups it’s a little murkier, but to insist as some have recently that adults won't put up with it simply because it has advertising is delusional, because they already are putting up with it, in droves, and it’s been happening forever. In the 1700's people went to live shows that were routinely interrupted by live ads. The lobbies had ads painted on them and so did the backdrops behind the performers and it continues today. Just last month a show on Broadway had a live commercial performed by the cast right on stage. Advertising subsidizes news and entertainment and it’s a very old symbiosis. Homer probably broke for spots.

So the ad industry is tailor-made for free downloads. It’s what it does. At bus stops and subways. On supermarket floors. On cereal boxes and in bathrooms. Ad models can handle music downloads with ease.

As to whether SpiralFrog in particular will thrive and whether P2P mavens will put up with it are other matters entirely. I probably won’t, but I don't watch much TV or listen to commercial radio either. Going by the numbers I’m in a (decidedly large) minority, but big media manages to stumble along without me all the same. If advertising can subsidize newspapers, theatrical shows, television, magazines, romance novels, websites, concerts, talk and music radio and an untold number of other products and services it can surely subsidize downloads.

In many ways this is the deal the record industry has waited 100 years for: the third party underwriter coming to the rescue. Like their pals in the TV and DVD business they can recoup production costs before the consumer shells out for product, and that alone makes it too hard to ignore.

It's the future but it's here right now. Leaving aside debates of purity and propriety and the huge editorial influence advertisers will have on content, the only thing we can expect from free ad-supported music - for better or worse - is that there will be a lot more of it in the years ahead.



September 9th, '06

SpiralFrog in Deal With EMI Music

SpiralFrog, a new online music service, said on Wednesday it had signed an agreement with EMI Music Publishing to authorize SpiralFrog's use of EMI's music catalog for legal downloading in the United States via SpiralFrog's advertising-supported service.

SpiralFrog said the agreement with EMI Music Publishing follows its deal with Universal Music Group, a unit of Vivendi, announced last week, which allows SpiralFrog to offer free downloads of Universal's songs.

"It is a very exciting concept which fuses advertising with music downloads and other services to recapture consumer demand which has been hijacked by online piracy," said Roger Faxon, Co-CEO of EMI Music Publishing.

"Anytime we can create a new revenue stream for our songwriters and combat online piracy, you will see EMI Music Publishing leading the charge."

The rights of EMI Music and Universal combined include artists such as Sting, Nelly Furtado, Jay Z and Kanye West.

The SpiralFrog service, to be launched in December, experiments with a new business model that is funded entirely by advertising, as opposed to the pay-per-song model of Apple Computer Inc.'s market-leading iTunes music store.
http://today.reuters.com/news/articl...S_techn ology

Four in Race for BMG Songs
Joshua Chaffin

At least four groups have submitted bids for Bertelsmann's BMG Music publishing division in an auction that could near $2bn, say people involved in the sale.

The bidders include two music companies, Universal Music and Warner Music Group.

The other contenders to make offers by the Thursday deadline were Viacom, which has partnered with Apollo, the private equity firm, and Charles Koppelman, an entertainment entrepreneur who has teamed with GTCR, the Chicago buyout firm. It was not clear on Friday whether EMI, which is the world's largest music publisher, had gone ahead with a bid.

The company had been working with Kohlberg Kravis Roberts. People involved in the auction said Sony Music, another early suitor, had dropped out.

Bertelsmann, which originally sent financial information to 15 interested parties, is expected to sort through the offers next week and whittle the list down to two or three finalists, according to people familiar with the matter. A final sale could be reached by the end of the month.

The BMG catalogue has gone on sale at a time when the music publishing business's steady revenues have become increasingly attractive to investors in an otherwise volatile industry.

In addition to price, the auction could also be determined by regulatory considerations – particularly in the wake of the European court's recent ruling against the Sony-BMG merger.

As a result, Bertelsmann is insisting that trade buyers shoulder the regulatory risk.

Vivendi to Buy BMG, Settle Napster Claims

Vivendi's Universal Music, the world's largest seller of recorded music, is vaulting to the top spot in music publishing, too, after agreeing to buy BMG Music Publishing for 1.63 billion euros ($2.1 billion).

German media conglomerate Bertelsmann, BMG Music Publishing's parent company, also said on Wednesday it would pay Vivendi $60 million to settle litigation related to financing it once provided to file-sharing service Napster.

Vivendi, the French media and telecommunications group, topped offers from six other bidders for BMG Music Publishing, which owns the rights to thousands of songs, including ones by Coldplay, Christina Aguilera and Barry Manilow.

It had been seen as a frontrunner in the auction since it was tipped off that Bertelsmann would sell BMG earlier this year. Other bidders included Warner Music Group and a team that included media conglomerate Viacom and private equity firm Apollo, sources familiar with the situation said.

Publishers have been increasingly coveted by investors because they are partly shielded by many of the piracy issues that have rattled the music industry. In addition to generating revenue when CDs or downloads are sold, music publishers make money by licensing songs to be performed live and for use in films and television shows.

"The acquisition of BMG Music Publishing is a unique opportunity to grow our music publishing business and enhance the value of Universal Music Group at a time when the music market is improving, supported by technological innovations and digital sales," Vivendi Chief Executive Jean-Bernard Levy said.

Vivendi's shares were down 0.2 percent to 27.10 euros in early trading on Wednesday. The company was advised by Merrill Lynch on the deal.

Bertelsmann, which is selling its music publishing arm to help fund the 4.5 billion euro buyback of a minority stake in the company, said the agreement would increase its net income by about 1 billion euros.

BMG, the world's third-largest music publishing company, had 2005 revenue of 371 million euros, accounting for about 2 percent of Bertelsmann's total.

The deal price represents about a 9.6 multiple on BMG's net publishers share (NPS) of 170 million euros. NPS, which measures the amount of royalties retained by a publisher, is the sector's most closely watched cashflow figure.

The multiple is lower than has been paid for other music publishers, although previous deals have been for much smaller companies such as Acuff-Rose and DreamWorks. Also, under copyright laws more songs are reverting back to songwriters or their heirs, reducing the future earnings of many catalogs.

The BMG deal has been approved by the boards of both companies and is likely to be reviewed by competition authorities in both the United States and Europe.

Strange aura
Bertelsmann, which was advised by Citigroup and J.P. Morgan, said it expected to be paid by the end of the year. It had said in July that it would not bear any antitrust risk from the sale, but declined to comment on the subject on Wednesday.

A European court this summer annulled 2004 EU approval of the merger that created Sony BMG, a recorded music joint venture between Sony Music and Bertelsmann's BMG, creating uncertainty about how much consolidation will be allowed in the industry.

"In the ordinary course of things there shouldn't be any competition concerns, but because it's music, the Commission has to look carefully at these cases," said another person familiar with the situation who asked not to be identified.

"There is a strange aura about this one," the source added. "This will be tricky."

A fresh review of the Sony BMG case by European competition authorities is also likely to run concurrently with the scrutiny of the BMG Music Publishing deal.

The EU said it would look carefully at the BMG Music Publishing deal if it was notified.

Meanwhile, the Napster settlement ends one piece of three-year-old litigation against Bertelsmann, which is being sued by various music companies for allegedly contributing to copyright infringements by granting loans to Napster, thus enabling it to survive longer than it otherwise would have.

After it launched in 1999 and became the first widely used peer-to-peer service, Napster almost single-handedly forced the music industry to revamp its business model when millions of consumers started swapping songs instead of paying for them.

It was eventually shut down by the courts, but was later reborn as a legal music service as the industry began to embrace the file-sharing technology behind Napster and others.

Bertelsmann said it was not admitting any liability as part of the settlement.

"We believe the resolution is a fair one to both parties," Bertelsmann Chief Financial Officer Thomas Rabe said.

DRM Roll

How corporations are about to drastically change the way you consume media, and how one local group is going to make them pay for it
Paul McMorrow

There’s a Catholic gift shop on Federal Street in Downtown Crossing. They’ve got devotional statues, prayer cards, rosaries, crucifixes, gazillions of Bibles—everything the suit-and-briefcase crowd might need to save their souls and score a quick miracle or two.

A couple floors above this storefront, inside the modest headquarters of the Free Software Foundation, a group of techies is trying to pull off a miracle of their own: mobilizing the American consumer around a campaign, steeped in tech minutiae, to thwart the country’s influential media and electronics lobby.

We’re at a critical juncture in human history, you see. Barbarians at the gates. Liberty and wallets hanging in the balance. The Free Software Foundation has nine months, maybe a year, to land a haymaker on the media/electronics cartel, or we’re all going to be screwed. The cartel wields an unfathomable amount of political and economic influence, and it doesn’t help that the average consumer can’t parse the ins and outs of the dreaded acronym, DRM, that’s at the center of this fight.

The FSF’s executive director, Peter Brown, is unfazed by the long odds. Sitting in the foundation’s offices, fiddling with his laptop and rocking a GNU/Linux T-shirt, Brown lays out a commonsense argument for toppling the cartel’s imposition of DRM that’s equal parts Thomas Paine and Bill Clinton: It’s the freedom, stupid.

Founded in 1985 by Richard Stallman, a former artificial intelligence researcher at MIT, the bulk of the FSF’s work has centered on distributing Stallman’s free software GNU operating system, publishing the General Public License that governs free and open source software, acting as a clearinghouse for free software projects, and lobbying government and business groups to adopt open-source standards. But recently, they’ve been butting heads with a new, particularly nasty foe: DRM (Digital Rights Management, in corporate parlance; Digital Restrictions Management, according to the FSF).

Essentially, DRM is code that dictates how devices and media function. It exists ostensibly to combat piracy, but increasingly it’s being used as a tool to let the Recording Industry Association of America and Motion Picture Association of America slither into consumers’ computers and living rooms. In its various incarnations, DRM can prevent CD and DVD copying; restrict the number of times iTunes songs can be burned or copied; block viewers from fast-forwarding through DVDs and DVR’ed TV commercials; and impair cross-brand operability, like when it prevents Napster songs from loading onto your iPod. And remember the Sony rootkit that spied on your computer, exposed your personal data to hackers and then fried your CD drive when you tried to uninstall it? That was DRM, too.

“DRM sets up a proprietary hellhole that’s very hard to escape from,” Brown says. “Freedom number one for free-software users is the freedom to change and modify their software, and still have it work. It’s the same as modding your car—you want to customize it, and still have it work. If you hack DRM software, it’ll no longer work; DRM is never compatible with the goals of free software.

“Even beyond free-software users, we can see [corporations] building the fences higher and higher; we want to stop DRM as a consumer issue. It affects anyone who watches movies or listens to music on their computer.”

As technology progresses, Brown fears that DRM will become increasingly intrusive. And as things stand, citizens have very few tools for combating whatever booby traps media and electronics companies bundle into their products.

When it passed the Digital Millennium Copyright Act (DMCA) in 1998, Congress banned devices and code that circumvent DRM—essentially giving consumers no recourse or escape from overly restrictive DRM measures, even when that DRM blocks uses, like making personal backup copies of media, that are legal under the fair use provisions of copyright law. The DMCA established a system in which consumers have only two choices: Either surrender all rights and discretion to distant corporations and their lobbyists, or reject devices and media containing DRM altogether.

The FSF’s Defective By Design campaign is attempting to steer people toward the latter. Last September, a Disney exec named Peter Lee got unusually honest with a reporter from The Economist, and that candor has haunted Lee’s industry ever since. “If consumers even know there’s a DRM, what it is, and how it works, we’ve already failed,” Lee said. For the anti-DRM set, Lee’s statement perfectly encapsulates the arrogance behind the restrictive technology.

“DRM changes a person’s relationship to media from one of ownership, where you can give media to a friend, or resell it when you’re tired of it, to one where you’re acquiring a series of revocable permissions to use the media, but you don’t own it,” says Gregory Heller, the campaign director for Defective By Design. “And with DRM, our computers could be reporting data back to companies without our knowledge.

“The technology makes the issue sound complex, but it’s easy to understand when you say you’ve got a device that only works the way corporations want it to work. People would be up in arms if, when you bought a car, the dealer said, ‘You can’t open up the hood, you can’t put different tires on, you can only use the gas we sell you, and that gas costs more.’ People would say, ‘I’m not going to buy that car!’”

“It’s about liberty,” Brown adds, emphatically.

Increasingly, Brown says, media companies are writing restrictive DRM directly into hardware. Under a bill being pushed right now by Alaska Senator Ted “Series of Tubes” Stevens, digital radio, television and media will include so-called broadcast flags that will tell recording devices that they’re not permitted to record programs. Manufacturers may be able to remotely switch off Blu-ray DVD players, and other digital devices will be able to monitor media and alert the authorities when impermissible activity occurs.

Why all the fascism? “The need to have media companies at all is disappearing,” argues Brown. “You can create and distribute music on your own, all the delivery systems are free, the networking is free—where do you need a media company? DRM is a way to close all these alternate systems down. All we’re trying to do is slow the adoption of DRM long enough to give these new models a chance.”

“All this stuff is being introduced in the hardware that’s coming this holiday season,” Brown warns. “The corporations are saying that all these technologies won’t be operable at first, but what they’re doing is getting us to take down our old devices, getting these DRM devices into our homes and then switching on the DRM over time.”

Because the DMCA prohibits consumers from fighting DRM with technology, Brown’s group must mobilize the American consumer into a massive boycott of DRM-enabled products. And because the first wave of truly evil DRM-enabled electronics will hit the shelves in time for Christmas, D-day for the FSF is right now.

The FSF’s campaign is designed to quickly raise awareness of a complex, shadowy issue that Heller, the campaign director, calls “a multi-headed, moving monster.” Defective By Design has been very successful at both keeping its message easily digestible and attracting attention to itself.

“Different aspects of it affect different peoples’ lives,” explains Heller. “We’re trying to link it all together so people don’t say, ‘I don’t like this type of DRM, but this type is OK.’ We say, ‘All DRM is DRM, and DRM is bad. You can’t abridge freedom.’”

You also can’t walk into an Apple store without passing a picket line of protesters in yellow hazmat suits, hearing them shout about how Apple uses DRM and DRM is evil, and pocketing some Defective By Design literature; FSF hazmat crews have been picketing Apple all summer. They recently staged a day-long call-in to the MPAA and a brilliantly stupid press stunt in which they called on Bono to oppose DRM.

“We don’t really care what he says—it’ll be news either way,” Brown says. “When we launched the drive, the story got picked up everywhere. We had DRM being described to people everywhere. When we deliver the petition, that’ll be another big story. And when you make a story, you make people aware.”

The visibility protests and press stunts will only get bigger. On October 3, the FSF is calling for a massive “Day Without DRM.” And as the holiday shopping season nears, prepare to see lots of anti-DRM stickers slapped all over this season’s hottest DRM-enabled gifts.

Brown argues that, with the way the FSF has structured its anti-DRM campaign, “We don’t need the man on the street to know. All we need is enough so that when these DRM products launch, they flop. We’re building an environment where the customer hates DRM. Companies won’t want to keep pushing DRM because they’ll have concerns about their business.”

“People who join the campaign are the campaign,” Brown explains. “They pledge direct action. Their actions are very clearly focused. Our 8,000 members have the power to influence their entire network of friends and family, and that’s more awareness than ad money can buy. A little eruption has occurred, and we’re now seeing the first wave of a tidal wave. When people are aware of DRM, DRM will lose—it’s just about making those connections.”

Quickest Patch Ever
Bruce Schneier

If you really want to see Microsoft scramble to patch a hole in its software, don't look to vulnerabilities that impact countless Internet Explorer users or give intruders control of thousands of Windows machines. Just crack Redmond's DRM.

Security patches used to be rare. Software vendors were happy to pretend that vulnerabilities in their products were illusory -- and then quietly fix the problem in the next software release.

That changed with the full disclosure movement. Independent security researchers started going public with the holes they found, making vulnerabilities impossible for vendors to ignore. Then worms became more common; patching -- and patching quickly -- became the norm.

But even now, no software vendor likes to issue patches. Every patch is a public admission that the company made a mistake. Moreover, the process diverts engineering resources from new development. Patches annoy users by making them update their software, and piss them off even more if the update doesn't work properly.

For the vendor, there's an economic balancing act: how much more will your users be annoyed by unpatched software than they will be by the patch, and is that reduction in annoyance worth the cost of patching?

Since 2003, Microsoft's strategy to balance these costs and benefits has been to batch patches: instead of issuing them one at a time, it's been issuing them all together on the second Tuesday of each month. This decreases Microsoft's development costs and increases the reliability of its patches.

The user pays for this strategy by remaining open to known vulnerabilities for up to a month. On the other hand, users benefit from a predictable schedule: Microsoft can test all the patches that are going out at the same time, which means that patches are more reliable and users are able to install them faster with more confidence.

In the absence of regulation, software liability, or some other mechanism to make unpatched software costly for the vendor, "Patch Tuesday" is the best users are likely to get.

Why? Because it makes near-term financial sense to Microsoft. The company is not a public charity, and if the internet suffers, or if computers are compromised en masse, the economic impact on Microsoft is still minimal.

Microsoft is in the business of making money, and keeping users secure by patching its software is only incidental to that goal.

There's no better example of this of this principle in action than Microsoft's behavior around the vulnerability in its digital rights management software PlaysForSure.

Last week, a hacker developed an application called FairUse4WM that strips the copy protection from Windows Media DRM 10 and 11 files.

Now, this isn't a "vulnerability" in the normal sense of the word: digital rights management is not a feature that users want. Being able to remove copy protection is a good thing for some users, and completely irrelevant for everyone else. No user is ever going to say: "Oh no. I can now play the music I bought for my PC on my Mac. I must install a patch so I can't do that anymore."

But to Microsoft, this vulnerability is a big deal. It affects the company's relationship with major record labels. It affects the company's product offerings. It affects the company's bottom line. Fixing this "vulnerability" is in the company's best interest; never mind the customer.

So Microsoft wasted no time; it issued a patch three days after learning about the hack. There's no month-long wait for copyright holders who rely on Microsoft's DRM.

This clearly demonstrates that economics is a much more powerful motivator than security.

It should surprise no one that the system didn't stay patched for long. FairUse4WM 1.2 gets around Microsoft's patch, and also circumvents the copy protection in Windows Media DRM 9 and 11beta2 files.

That was Saturday. Any guess on how long it will take Microsoft to patch Media Player once again? And then how long before the FairUse4WM people update their own software?

Certainly much less time than it will take Microsoft and the recording industry to realize they're playing a losing game, and that trying to make digital files uncopyable is like trying to make water not wet.

If Microsoft abandoned this Sisyphean effort and put the same development effort into building a fast and reliable patching system, the entire internet would benefit. But simple economics says it probably never will.

FairUse4WM Peeps Stay One Step Ahead of Microsoft
Paul Miller

Mere days after Microsoft started pushing a new IBX version for "protecting" PlaysForSure files from its users, the FairUse4WM guys have thrown down a new version that deals with that and other little DRM-circumvention obstacles. The new release -- version 1.2 -- knocks out DRMv1 files you've ripped yourself with protection, breaks down individualized WM9 files and has a workaround for WM11beta2. Of course, we're guessing it won't be long until Microsoft has another quick update to break FairUse4WM again, but it seems like a more drastic update might be in order to shut down this hack for good. We're sure you're well familiar with our stance on this whole issue, and hope that version 1.2 treats you right.

Ben Affleck Used Video iPod to Prepare for Latest Role

On last night's episode of The Tonight Show, actor Ben Affleck revealed that he used his video iPod to help him prepare for his role in the upcoming movie Hollywoodland. Portraying the late George Reeves who starred as the original Superman, Affleck put every episode of the original series to his video iPod to he could watch them repeatedly in order to get a feel for Reeves' mannerisms.

Since the original Superman series is unavaiable through the iTunes Music Store, is can likely be assumed that Affleck acquired DVDs of the series and used his computer to "rip" them into iPod-compatible format. This is in stark contrast with the movie studios' collective claim that the simple act of ripping a legally purchased DVD into a computer is a violation of the law.

While it's possible that the studio gave Affleck permission to rip the DVDs into his computer, the fact that a famous actor is apparently ripping DVDs into his iPod (in order to help him make a movie, no less) would appear to strengthen the argument made by those users who believe that ripping a purchased DVD into a computer falls under fair and normal use and is therefore legal.

Panasonic Notebook Batteries Recalled

Matsushita Electric Industrial Co. said Tuesday it has begun recalling 6,000 lithium-ion batteries used in Panasonic-brand notebook computers in Japan on concerns they might overheat.

The recall of the batteries for Let's Note CF-W4G notebook PCs only affects Japan, said company spokesman Akira Kadota.

Kadota said the batteries were not made by Sony Corp., whose faulty batteries were involved in far larger recalls by Dell Inc. and Apple Computer Inc. last month, but he declined to say who made the batteries, citing an agreement with the manufacturer.

Matsushita has started replacing batteries from the initial shipments of its Let's Note CF-W4G notebook PCs produced in April and May 2005 following two reported cases of trouble earlier this year, he said.

Kadota said that the problem stems from the battery cover, which could become loose. The batteries could produce heat and change shape if the battery cover is damaged due to the poor strength of the latch, he said.

The size of this recall is much smaller than last month's battery recalls by Dell and Apple, which cited concerns that the batteries could overheat and catch fire. Dell asked customers to return 4.1 million faulty laptop batteries, while Apple recalled 1.8 million batteries worldwide.

In both those cases, the problematic lithium-ion batteries were made by Sony Energy Devices Corp., a Japan-based subsidiary of Sony Corp.

RIAA Doesn't Like Independent Experts
Eric Bangeman

For the past few years, the Recording Industry Association of America has battled file sharing by threatening those it suspects of illegally downloading music with lawsuits. Many potential defendants opt for expensive settlements with the RIAA, others decide to fight it out in court.

In the case of Sony BMG et al. v. Kim Arellanes, the RIAA is using another tactic: strenuously arguing (PDF) against the defendant's request that a neutral, third-party perform a forensic search of the defendant's hard drive to find evidence that she engaged in activities frowned upon by the music industry. Claiming a right to rely on an expert of their own choosing, Sony BMG says that Arellanes "should be ordered to produce her computer hard drive for inspection subject to Plaintiff's proposed protective order."

As one might expect, Arellanes isn't too keen (PDF) on the idea of sending her hard drive to an RIAA star chamber for examination. Citing the RIAA's numerous missteps in its ill-conceived crusade against music fans, she requests that the court require a "neutral computer forensics expert and a protocol protective of non-relevant and privileged information" be used to conduct the examination.

Recently, RIAA target Delina Tschirhart found herself in a mess of hot water when she disobeyed a judge's orders and used a secure file deletion utility to wipe potentially incriminating files off her hard drive. In this case, the RIAA obtained a mirrored copy of her hard drive, on which its forensics expert found the incriminating evidence. The result was a default judgment in the RIAA's favor.

That case aside, the RIAA's history doesn't inspire much confidence in its ability to objectively examine what could be a piece of crucial evidence. Remember, this is an organization that has tried to skirt due process by trying to force ISPs to hand over subscriber information (e.g., names associated with IP addresses). A late 2003 ruling put an end to the practice, requiring the RIAA to look to the courts to compel ISPs to turn over the information. The organization has also sued the deceased along with those who don't even own computers.

Neither plaintiffs or defendants are objective parties in a legal dispute. That's all the more reason to have third parties involved in examining the evidence. When one of the parties has a history of bullying witnesses into perjury and is seemingly incapable of admitting they were wrong and clearing the names of those they wrongfully accused, it becomes even more crucial.

Too Much Sharing About File Sharing
Doug Lederman

When members of Congress think they may have a problem on their hands — or, more cynically, when they want to appear to be taking an issue seriously — they often turn to the Government Accountability Office. Congress’s investigative arm will then examine the situation broadly and report back to the senators or representatives who requested the study and, eventually, to the public. Legislative action sometimes follows, sometimes not, but in the meantime, they are (or at least appear to be) doing something.

That’s essentially what happened with a recent GAO study about illegal file sharing on campuses, but with a twist. A House of Representatives subcommittee has requested a survey of colleges’ policies and practices on networks that allow students and others to illegally share copyrighted video and audio files. But unlike most studies by the GAO, Congressional aides have insisted that the agency in this instance report not just on the file sharing landscape in the aggregate, but on how individual colleges responded to the survey.

Declining to promise confidentiality to the respondents, college officials predict, is likely to limit the number of participants and render the survey ineffective.

Like many a GAO survey, this one came to pass after higher education leaders fought off an attempt to impose legislative requirements. During last spring’s debate over the renewal of the Higher Education Act, Democrats in the House proposed an amendment that would have required colleges to take steps to crack down on illegal file sharing, which college leaders opposed as unnecessary federal regulation. (Many college officials insist that they are already doing plenty to deal with this issue, especially since the problem, some of them argue, is less severe among college students than among other segments of the population.)

The amendment failed, but the lawmakers who proposed it (led by Rep. Howard P. Berman of California, who is the senior Democrat on the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property) continued to pursue a GAO study of file sharing in higher education. College officials said they supported the idea of a study, which would help gauge the extent of the problem.

But as the investigative agency sent out the survey (a blank copy is available for viewing here) in recent days to more than 100 colleges, some college officials realized that the questionnaire and the accompanying cover note did not say, as such surveys almost always do, that the replies would be kept confidential.

When Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education, checked with officials at the GAO, he was told that that aides to the Judiciary subcommittee had insisted that the GAO collect and report back to the panel on the responses of individual institutions. (It isn’t clear whether the information about individual institutions would be made public, or if the eventual public report, like most GAO studies, would present information only in the aggregate.)

Paul Anderson, assistant director of the GAO, said Monday that agency policy prohibited him from discussing details about the nature of any of its active surveys, beyond basic information about who had requested the study and its scope. A spokesman for the Judiciary Committee said he would check into the matter but did not provide any details.

Mark A. Luker, vice president of Educause, higher education’s main technology association, said it was “unfortunate” that lawmakers and their staffs had adopted this approach. “Peer to peer file sharing is a legitimate issue, and colleges and universities are working to address it,” Luker said.

“A survey like this could be a valuable means of finding out the state of the environment,” Luker said. But the decision not to make the replies confidential “can hurt the survey by limiting the responses and participation,” he added, not because colleges necessarily have anything to hide, but because survey participants tend to be more responsive when their privacy is protected.

Luker said that Educause is alerting its members to the fact that their responses to the GAO survey will not be kept confidential, since the survey materials themselves don’t make that clear.

Education Ministers' Proposal in Need of a Rewrite
Michael Geist

As thousands of children across the province return to school tomorrow, nearly everyone will be asking "what did you do this summer?” If the question were posed to Education Minister Sandra Pupatello, her candid reply might be that she was working with her fellow Provincial Ministers of Education on reforms that will have damaging consequences on Internet use in Canada.

The Council of Ministers of Education, Canada (CMEC), which bills itself as the national voice for education in Canada, brings together the Ministers of Education from across Canada (with the exception of Quebec) to work on issues of mutual concern. At the moment, one such issue is the use of the Internet in the classroom, with CMEC lobbying for a special exception that would allow the education community to freely use any works that are publicly available on the Internet.

At first glance, such a proposal would appear to be a winner. Canada was the first country in the world to bring Internet connectivity to every school from coast to coast to coast and the logical next step is to leverage that connectivity to improve the educational experience.

Moreover, it is far better than a counter-proposal from Access Copyright that seeks to develop a new licensing system for the use of Internet-based content. According to documents obtained under the Access to Information Act, the copyright collective has asked the Ministry of Canadian Heritage for funding to become the Canadian collective for a new international standard that can be used to register any "textual work” from books to blogs. Armed with a collection of "registered" online text, Access Copyright will be positioned to create a new license for the use of Internet content.

In the run-up to the last federal election, the Conservatives appeared to side with CMEC on this issue. Over the past few months, there has been widespread speculation that the government plans to proceed with reforms that would largely grant the educators their cherished exception.

While the Ministers appear convinced that this benefits the education community, there are potentially several negative long-term effects. First, there is a strong argument that the exception is simply not needed for most educational uses. The Supreme Court of Canada has ruled that fair dealing - including the use of copyrighted works for research and private study purposes - is an integral part of the Copyright Act to be interpreted in a broad and liberal manner. The law therefore already permits many educational uses of Internet materials without compensation.

Second, the implication of the exception is that using publicly-available Internet materials is not permitted unless one has prior authorization or qualifies for the exception. This suggests that millions of Canadians outside the education system who use Internet-based materials are somehow violating the law. This is simply wrong - an enormous amount of online content is intended for public use or qualifies as fair dealing - and to imply otherwise sends the wrong message.

Third, the exception may violate international law. Several legal scholars have reviewed the CMEC proposal and concluded that it is not compliant with Canada’s existing obligations under the Berne Convention, the world's foremost international copyright treaty.

Fourth, rather than improving access, the exception will actually encourage people to take content offline or to erect barriers that limit access. Many website owners who may be entirely comfortable with non-commercial or limited educational use of their materials, may object to a new law that grants the education community unfettered (and uncompensated) usage rights. Accordingly, many sites may opt out of the exception by making their work unavailable to everyone.

Fifth, the educational exception comes at huge political cost. As a counterpoint to the exception, the government is likely to introduce tough new rules that support technological protection measures. These digital locks will cause particular harm to the education community, who may find that the price of virtually unlimited access to publicly-available Internet-based content is the loss of fair access to all other digitized content.

Not surprisingly, the issue is certain to leave everyone unhappy. It has caused a division within the education and library communities, with several groups, including the Canadian Federation of Students and the Canadian Library Association, de-emphasizing the issue. Moreover, creator groups are angry that their work may go uncompensated and the provinces may ultimately blame the Conservatives for brokering a bad deal.

The issue could be diffused, however, by striking a compromise. The Copyright Act's fair dealing provision is currently limited to research, private study, criticism, review, and news reporting. An expanded provision that treated those categories as illustrative rather than exhaustive would grant education much of the remaining classroom access it needs, while giving creators the fair compensation they crave.

The grade that Minister Pupatello, Industry Minister Maxime Bernier, and Canadian Heritage Minister Bev Oda receive on this issue will depend on their recognition that everyone is entitled to fair use of content on the Internet.

Microsoft, Nokia Have Work Cut Out to Rival iPod
Georgina Prodhan and Lucas van Grinsven

Almost any iPod owner will tell the same story: they wouldn't swap the iconic device for any alternative. But the battle is wide open for the hearts -- and pockets -- of the vast majority who still have no MP3 player.

The iPod commands an unusual loyalty among its fans. "I wouldn't swap it for anything," says Nina Becker, a 27-year-old student, jogging down a street with the iPod's familiar white wires trailing from her ear plugs.

"The design is super," says Claudio Topani, an Italian musician browsing for gadgets at the IFA consumer electronics fair in Berlin, which ends on Wednesday.

But many people balk at the iPod's high prices -- top models sell for up to $600 -- or would prefer the convenience of a portable music player integrated into a mobile phone.

And although the iPod still commands more than 75 percent of the U.S. digital music player market and more than 50 percent of the global market, according to research firm NPD, sales have begun to slide as the threat from rivals becomes more real.

The phenomenal success of the iPod has not only inspired an army of imitators, most notably SanDisk's Sansa, but has now goaded the mighty Microsoft into action.

Microsoft plans to launch its answer to the iPod, the "Zune", later this year -- five years after Apple's first iPod went on sale -- in an apparent capitulation.

Microsoft's founder, Bill Gates, had maintained for years that mobile phones with integrated MP3 players would render separate portable music players redundant.

The Zune, made by Japanese electronics group Toshiba Corp., will have a 30-gigabyte hard-disk drive, wireless connectivity and a three-inch (eight-centimeter) liquid crystal display screen.

Microsoft's entertainment and devices chief said on Tuesday that the company would heavily market the Zune's wireless possibilities, which enable shared music experiences, to try to dislodge the iPod -- which so far has no wireless capability.

The software giant says there is plenty of room for growth in the digital music player market. U.S.-based Jupiter Research estimates that MP3 penetration was 25 percent of U.S. households and 18 percent of European households in 2005.

"Certainly everyone's awaiting the challenge from Microsoft and the announcement of Zune has created quite a lot of buzz," says Nate Elliott, a London-based analyst for Jupiter who specialises in the digital home.

He said that Microsoft was in a better position than any of Apple's other rivals to build an "ecosystem" -- including online music store -- although he cautioned that in his opinion Microsoft's PlayForSure software was not quite up to scratch.

Mobile Phone Challenge

Another threat to the iPod comes from mobile phone makers who are furiously integrating MP3 players into their handsets.

Close to 100 million phones sold this year will have a built-in music player and that number will grow to almost 800 million units by 2010 according to Strategy Analytics analyst Peter King.

That compares with 8.11 million iPods sold in the April-June quarter, up 32 percent from a year earlier but down from 8.5 million in the January-March quarter.

Many visitors to IFA said they would prefer to have many functions combined in one gadget -- concurring with Bill Gates's argument that mobile phones would eventually win the battle for "share of pocket".

IT engineer Armin, who declined to give his last name, said: "I would rather take the mobile because I carry that already and do not want to carry around a second device."

And Kurt Boz, a salesman at a store of mobile operator E-Plus in Frankfurt, said handsets with integrated MP3 players as well as cameras -- such as Sony Ericsson's K800 -- were flying off the shelves.

"Customers are very keen on the features," he said.

But Jurgen Smit, sales manager at electronics retailer Polectro, said he was confident iPod could keep its share of the market because ever more consumer electronics groups are making docks and ports to connect directly to the device.

Luxury car makers like BMW have also started fitting their models with standard iPod sockets.

"As long as you see that happening, iPod is not going to lose market share," Smit said.

Jupiter's Elliott says that, quite simply, no one has yet produced a device that can rival the iPod in terms of ease of use, good design and easy connectivity to online music stores such as iTunes.

"The proof of the pudding is in the eating -- and so far no one else's pudding is very good," he says.

(Additional reporting by Marie-Louise Moller)

Bob Dylan Earns First No. 1 Album Since 1976
Katie Hasty

For the first time in 30 years, Bob Dylan topped the U.S. album charts Wednesday with "Modern Times," his third consecutive top-10 studio set.

The Columbia Records release sold 192,000 copies in the week ended September 3, according to Nielsen SoundScan data.

Not only is it the legendary songwriter's first album to reach the throne since "Desire" in 1976, it's also his highest debuting album and his best sales week since Nielsen SoundScan began tracking data in 1991.

Dylan's previous album, 2001's "Love & Theft" opened at No. 5 with 133,760 copies. Before that, he peaked at No. 10 with 1997's "Time Out of Mind," which opened with 101,600 units. Aside from "Desire" and "Modern Times," only two other Dylan albums assumed the plateau on the chart: 1974's "Planet Waves" and 1975's "Blood on the Tracks."

After crowning The Billboard 200 last week, MTV girl-band Danity Kane slipped to No. 2 with 117,000 copies, a sales hit of 50 percent.

Young Dro's major label debut, "Best Thang Smokin'," bowed at No. 3 with 104,000 copies. With help from his smash hit "Shoulder Lean" (featuring T.I.), the Grand Hustle/Atlantic release also overtook OutKast's soundtrack to "Idlewild" (LaFace) at No. 1 on the Hot R&B/Hip-Hop Albums chart.

Christina Aguilera's former chart-topper "Back to Basics" (RCA) fell one to No. 4 on the Billboard 200, with 101,000 copies. Jessica Simpson's "A Public Affair" (Epic) entered the chart at No. 5, selling only a couple hundred albums fewer than "Back to Basics" with 101,000. Her last album, 2003's "In This Skin," originally peaked at No. 10 but hit No. 2 after a 2004 re-release.

The Disney soundtrack to "The Cheetah Girls 2" fell one to9 No. 6 with 80,000, while "Idlewild" tumbled five to No. 7 with 78,000.

Rapper Method Man scored his fifth consecutive top 10 debut, as "4:21 ... The Day After" (Def Jam) landed at No. 8 with 62,000 units. Another Def Jam effort followed at No. 9 in the form of the Roots' "Game Theory," which moved 61,000.

In its 48th week on the chart, Canadian rock band Nickelback's "All the Right Reasons" (Roadrunner) moved up two to No. 10.

Other big debuts this week include Too Short's Jive release "Blow the Whistle" (No. 14, 40,000), Ray Lamontagne's sophomore RCA set, "Till the Sun Turns Black" (No. 28, 28,000), Crossfade's sophomore Columbia effort, "Falling Away" (No. 30, 28,000) and Hatebreed's first Roadrunner album, "Supremacy" (No. 31, 27,000).

The Toby Keith-led "Broken Bridges" soundtrack, released on his Show Dog label, opened at No. 36, followed by the Atlantic debut of reggaeton star Tego Calderon, "The Underdog/El Subestimado," at No. 43. Singer/songwriter Pete Yorn bowed at a disappointing No. 50 with the Columbia album "Nightcrawler"; its predecessor, 2003's "Day I Forgot," debuted at No. 18.

Indie veteran M. Ward made his Billboard 200 debut with the Merge album "Post-War" at No. 146.

At 9.39 million units, overall CD sales were down 1.5 percent from last week's count and down 10 percent compared to the same week a year ago. Sales for 2006 were down 6 percent compared to 2005 at 354 million units.

Sweden's Watergate
Via Slashdot

Sweden's ruling Social Democratic Party's internal network has been illegally accessed several hundred times over a period of several months. Party treasurer Tommy Ohlstroem describes the incident as "wide-scale and systematic." Computer security company Sentor's investigation has revealed intrusions originating from computers belonging to Sweden's Liberal Party, and with the upcoming election in only two weeks many commentators are already describing this as Sweden's Watergate (Swedish only). An employee of the Young Liberals has admitted to unauthorized access, but a series of mysterious coincidences in the form of exceptionally well timed public announcements by the Liberal Party suggests the involvement of more than one person.

Poll: Online Viewers Shun Lengthy Videos
Anick Jesdanun

Only one in five online video viewers has watched or downloaded a full-length movie or television show, according to a new AP-AOL Video poll.

Overall, more than half of Internet users have watched or downloaded video. News clips were the most popular, seen by 72 percent of online video viewers, followed by short movie and TV clips, music videos, sports highlights and user-generated amateur videos.

The poll's findings come as major Hollywood studios and television networks are increasingly making their old and current programs available online - free with commercials, or for $1.99 an episode through services like Apple Computer Inc.'s iTunes Music Store and Google Inc.'s video store. AOL announced deals with four studios last month to offer programs through its new video portal.

"Rome wasn't built in a day," said Benjamin Feingold, president of Sony Pictures Home Entertainment, which is selling programs and giving away ad-supported shows through AOL. "A lot of progress has been made in terms of the quality of video and audio on the Web. It's not the same as broadcast or DVD, but it's improving."

Kevin Conroy, executive vice president for AOL, said its users have been watching longer and longer clips as more programs become available - starting with music videos, moving to television and now adding movies. Viewership should improve, he said, as more portable gadgets and other devices support Internet video.

For now, full-length programs are good for frequent travelers who like to watch movies on laptops and for television fans who might have missed an episode of a serial drama like "Lost," said Rob Enderle, an industry analyst with the Enderle Group. Few PCs these days are hooked up to television sets, he said, making longer programs less of a draw.

Enderle and other analysts consider online video key to AOL's ability to increase traffic to ad-supported sites and offset declines in revenues expected as the company drops subscription fees for millions of high-speed customers. Last month, AOL launched a video portal it envisions as a television guide for video clips from around the Internet, including those at rival sites.

The Associated Press also has its sights on video. In March, the news cooperative launched a service with Microsoft Corp. allowing AP member Web sites to offer free video news clips and share in ad revenue. The AP Online Video Network uses Microsoft's MSN Video technology.

The major networks have free and premium subscription offerings on their sites, while ABC and NBC are also selling news clips through iTunes.

The new survey found that relatively few - 7 percent of video users - have paid to watch any video online. Nearly three-quarters of online video users prefer free videos with ads.

You won't find Vanita Butler sitting in front of her computer watching a full-length movie or television show, even though she's an avid viewer of video on the Internet.

The 43-year-old saleswoman from Newark, Ohio, said she sees the Internet as more of a tool - for catching a news story or highlights from a NASCAR race. When she has time for entertainment, she and her husband prefer the television set.

"It's a little bit more of an intimate environment," Butler said of watching television. "We can sit and do it together."

Cheryl Landers, 50, a retail manager in Dedham, Mass., said she finds amateur clips funny and entertaining, but with two foster kids, she can never spare more than five minutes at a time, let alone a whole hour to watch an entire television episode. She said she usually has the TV on as background noise.

"I'm pretty much against paying for stuff on the Internet," said P.J. Park, 25, of Mount Rainier, Md.

Men and younger people were more likely to have watched online video, although one in five Internet users 65 and older and nearly half of all online women have. Joyce Wade, 66, of Dover, Del., said she likes the fact that she can watch news clips from the British Broadcasting Corp. and avoid watching "the same thing over and over again" on TV.

Troy Richards, a businessman from Scottsdale, Ariz., likes the control the Internet offers.

"I don't like to watch the news because it's depressing, so I just go on the computer and pick the stories I want to see," Richards said.

He also likes to watch Arizona Diamondbacks games online when he is at his summer home in San Diego.

"The quality is not nearly as good, but it gets the job done," he said.

Among other findings:

- Users of online video are drawn to its convenience and accessibility, but the bulk of them say their television viewing habits remain unchanged.

- One-third of video viewers - higher among high-speed Internet users - say they watch more video on the Internet now than a year ago.

- Urbanites and suburbanites - who have high-speed connections at home in greater numbers than rural residents - are more likely to have watched video online.

- Forty-six percent of video watchers with high-speed service view video at least once a week, compared with 22 percent of dial-up users. Dial-up users also were more likely to complain about download times.

The AP-AOL Video poll of 3,003 adults, including 1,347 online video watchers, was taken by telephone July 27-Aug. 9. It has a margin of sampling error of plus or minus 2 percentage points for all adults and of 3 percentage points for online video watchers.


Associated Press Writer Will Lester, AP Manager of News Surveys Trevor Tompson and News Survey Specialist Dennis Junius in Washington contributed to this report.

Percentage Who Have Downloaded TV Shows Doubles, Yet Downloading TV Remains Early Adopter Activity
An Estimated 10 million Americans Have Downloaded A TV Show From The Internet

Recent Findings From The MOTION Digital Video Study Reveal Non-Traditional Video Consumption Poised For Growth

Press Release

Amid growing interest in user-generated video clips and increased experimentation with online movie distribution by the motion picture industry, a new study by global market research firm Ipsos indicates that an estimated 10 million Americans aged 12 and over have downloaded television shows from the Internet; seven million in the past 30 days.

New findings for MOTION—the company’s biannual study of digital video behaviors—reveal that younger Americans are driving growth in many digital video activities, including TV show downloading. Ten percent of young adults aged 18 to 34 (14% of 18- to 24-year-olds and 7% of 25- to 34-year-olds) have downloaded television programs from the Internet and seven percent have done so in the past month—nearly double the rate of television downloading overall.

This marks a significant increase in video downloads over the summer of 2005, when only two percent of Americans overall and five percent of 18- to 34-year-olds had ever downloaded video. Despite these gains, however, downloading larger video files such as full-length TV shows and movies remain firmly entrenched as an early adopter behavior online; it is less commonplace among the mainstream consumer traditional video channels currently serve.

Recent MOTION research also revealed some interesting diagnostic digital video behavior trends:

• Eighteen percent of Americans aged 12 and older have watched music videos streamed online (~41 million) and as many as 32 million have downloaded video games to their PCs (14%).
• Despite growing experimentation on behalf of the motion picture industry in distributing movies online, downloading full-length motion pictures is still a niche activity (just 3% of Americans have ever done this).
• Males continue to lead females in most digital video technology ownership and related behaviors, including downloading television.
• Overall, 27% of portable MP3 players have the ability to play video, a number that has been steadily increasing over the past year; 5% of MP3 player owners have paid to download television programs from the Internet versus only 1% of those who do not own MP3 players.
• Other activities are becoming more popular as well: one in ten Americans aged 12 and older has downloaded music videos (10%) and a similar proportion has downloaded movie trailers (9%).

“These findings underscore what many of us have guessed to be the case; namely, that the distribution of digital entertainment content—not just digital music—is a growing channel of entertainment consumption with exciting possibilities,” said Todd Board, Senior Vice President of the Ipsos Insight Technology & Communications practice and author of the study. “As we have witnessed with music, no single consumption method will necessarily dominate, while traditional media will continue to prosper for the foreseeable future. However, digital entertainment usage will continue to evolve based on shifting consumer choices and an increasing number of options.”

“Today, many consumers utilize the digital channel to access more ‘disposable’ video: content that is brief in nature and takes up little bandwidth, so it’s very easily consumed,” added Board. “This emerging genre of video is being driven by its growing availability on sites such as YouTube and MySpace, but also perpetuated by the ‘two-foot’ user interface of the PC, which is less than ideal for the larger, more involved genres such as the full-length movies dominant on the ‘ten-foot’ interface in consumers’ living rooms.”

Concluded Board, “Savvy product developers and marketers will need to cultivate a forward-looking view of the segments likely to emerge around unmet and under-met needs for video consumption. For digital music, the primary catalyst was the music enthusiast seeking individual song downloads that offered portability and ownership. For digital video, there are inherently more potential catalysts, including music videos, movie trailers, and increasingly, TV shows with intense audience involvement. Because of this variety in the drivers of digital video appeal, it’s critical to understand where digital entertainment aficionados have similar usage expectations for video as they currently have for music, and where they don’t.”

Data on music downloading behaviors was gathered from MOTION, a new biannual shared-cost program by Ipsos Insight tracking trends and shifts in traditional video entertainment viewing attitudes and behaviors among Americans aged 12 and older.

Data for general population statistics included with this release were collected between June 23 and July 4, 2006, via a nationally representative U.S. sample of 1,143 respondents aged 12 and over. With a total sample size of 1,143, one can say with 95% certainty that the results are accurate to within +/- 2.90%.

ShareReactor says Welcome back!

On behalf of the entire crew including the people working in the forum, we would like to welcome you back to ShareReactor.

As you browse the page you will notice that not much has changed. The categories are mostly the same, and a very large part of the old releases is still here. There are a few new revolutionary features though.

• First feature to mention is our sourcechecking system. Every file in our database is continuesly being checked for sources, in a way that does not overload the network. It is then being shown next to the filname as (F)ull/(P)artial sources. Notice that the number might not be 100% correct, but it will give a general idea about the amount of sources. NOTE: At the moment, files over 4GB are not being checked, and will always show as 0/0

• If a release is marked obsolete it means that there is a newer or better version available on ShareReactor. An example of this would be WinRAR 6.0 would be obsolete since WinRAR 8.0 is released on ShareReactor too. When a release is marked obsolete, a link will be clearly visible to the release that made it obsolete. NOTE: An obsolete release might be incomplete, although it does not have to be. Under all circumstances it is most of the time preferred to get the newer release.

• If a release is marked incomplete it means that one or more files in the release is unavailable on the network. Instead of deleting all the incomplete releases we decided to let them stay for historical reasons, and for the fact that altho episode 3 of your favourite TV show is not availible. the remaining 23 episodes might be.

At the moment the page may lack a little bit of functionallity, but all the important things are done, and you will be able to browse the page without any trouble. In case you are unable to find a link to our forums use this: ShareReactor forums

If you want to say "Hi, I'm back" or something, you can do it HERE

Enjoy your stay, and be sure to check back often! The administrators of the page have lots of neat things in the gobbiebag just waiting to be put online.

New Charity to Start Plan for $50,000 Artists’ Grants
Stephanie Strom

A new charity, United States Artists, will announce today an ambitious plan to provide support to working artists, starting with a grant program that will be one of the most generous in existence.

Fifty artists working in a wide variety of disciplines and at various career stages will receive $50,000 each, no strings attached. The first recipients will be announced on Dec. 4.

“The individual artist has been at the back of the line in terms of support in American funding over the last decade, so any new system designed to get support directly into the hand of working artists is important,” said Philip Bither, performing arts curator at the Walker Art Center in Minneapolis.

Panels of artists, critics, scholars and others in the arts are reviewing the applications of 300 artists who were nominated by 150 anonymous arts leaders around the country.

United States Artists declined to reveal any of the applicants’ names but said they range from an American Indian weaver who earns her living demonstrating her craft on the cruise ships that ply the Alaska coast to a Chinese-American photographer working in Minneapolis to a mariachi bandleader from Los Angeles.

“No one is a household name,” said Katharine DeShaw, the group’s executive director. “We want these awards to demonstrate the diversity of American art and the artists who create it.”

Four foundations — Ford, Rockefeller, Prudential and the Alaska-based Rasmuson— have put up a total of $20 million to create the organization and seed its initial operations, but the goal is for it to become a conduit between artists and individual donors.

“I believe there are individuals who would like to give to artists directly but worry they lack a system to help identify talent,” said Susan V. Berresford, president and chief executive of the Ford Foundation, which put $15 million into the project. “This creates a mechanism through which people can do that.”

This new charity plans to use gifts from individuals to build a permanent endowment to support and expand the grant program, but that, Ms. Berresford and others said, will be its biggest challenge.

United States Artists has attracted support from prominent national arts patrons like Agnes Gund and Eli and Edythe Broad.The hope is that these and other donors will eventually contribute $1 million each to endow a fellowship, much the same way that donors underwrite faculty chairs at universities, Ms. DeShaw said. “This could do for artists what the MacArthur Awards do for those recipients,” Mr. Broad said in a telephone interview, referring to the coveted “genius” grants that the MacArthur Foundation makes annually. Those grants total $500,000, paid out in $100,000 installments over five years.

This new charity was spurred in part by a 2003 Urban Institute study, “Investing in Creativity: A Study of the Support Structure for U.S. Artists,” that documented the plight of artists since the mid-1990’s, when the federal government abolished many of the grants that the National Endowment to the Arts had made to individual artists amid controversies over works involving nudity, sexuality and other provocative themes.

State and local financing of the arts had also declined, as had foundation support, trends that have started to reverse only in the last year or so.

In any case, most public money goes to arts institutions, not to artists directly. “The chance for an artist to get money through an individual grant is something extremely rare,” said Barbara Kruger, an artist working in New York, Los Angeles and, increasingly, abroad.

There is no precise measure of how many grant programs directly support artists. The New York Foundation for the Arts, which itself makes such grants, maintains a database of about 2,900 such programs. The Urban Institute study found that more than $91 million was available to artists, but that two-thirds of cash grants that could be quantified were of less than $5,000. Only 21 percent of grants were of $10,000 or more.

Ms. Gund said the grants from the new charity come at a critical time, when basic costs of living like health costs and rent are rising and public support continues to ebb. “It’s a myth that most artists make money,” she said. “Most of them don’t even get a chance to show, and even if they do, they don’t make enough with sales to meet their needs and still have to work teaching or waiting tables or at another kind of job.”

For Roxane Butterfly, a tap-dancer, the $33,000 she got from the Guggenheim Foundation this year allowed her to continue her work after an injury sidelined her. “It literally saved my artistic career,” she said in a telephone interview from her native France. “If you don’t dance, you just don’t eat.”

John Waters, the iconoclastic filmmaker, is one of the United States Artists nominators. “I nominated people who have been doing work for a long period with great critical success but are still struggling financially,” he said in an interview from Provincetown, Mass. “They’re very representative of most of the artists in this country.”

Mr. Waters said he had never applied for a grant. His films were made with loans from his father and friends or, later, through investment partnerships. “I still don’t think if I was making ‘Pink Flamingos’ today I would ever get a grant,” he said, “no matter how liberal the organization.”

Samsung Displays New Wireless Technology
Burt Herman

Samsung Electronics Co. showed off its vision for the future of mobile technology Thursday, sending data wirelessly at blazing speeds to a moving minibus.

The connection was robust enough to support live images - including a high-definition movie - beamed from a conference the South Korean company is hosting here on fourth-generation, or 4G, wireless.

In a key step toward making the technology truly mobile, the device aboard the minibus switched seamlessly between two base stations - meaning the signal won't be lost when users are on-the-go.

The current prototype allows data transfers of 100 megabits per second, about 30 times typical broadband Internet speeds. It works even when the receiver is moving as fast as 75 mph.

But the promise is still far off: Currently, Samsung's data receiver is the size of a compact refrigerator. It won't be until 2008 that the device can be shrunk to fit in a mobile phone, said Lee Ki-tae, head of the company's telecommunications division.

And even then, frequencies need to be allocated and standards set, meaning the devices aren't expected to be in consumers' hands until after 2010.

The promises of yet another new wireless technology are familiar.

Mobile phone companies are still feeling the burn from their much-hyped third-generation technology. That cost billions in license fees and is now being implemented worldwide, but so far has yet to make much profit.

Now again, engineers boast of providing the world with even higher-speed wireless connections that make information accessible anywhere at anytime, enabling phone calls, quick movie and music downloads, and fast Web-surfing.

Wireless companies realize consumers need a truly compelling reason to embrace the gadgets that seek to blend different functions.

"Convergence has to bring real value to customers, otherwise customers won't buy it," said Alberto Ciarniello, a vice president at Italy's Telecom Italia.

Several conference participants mentioned the hunt for a "killer application" - a feature that people can't live without that draws users to a new technology.

But experts this time are arguing that simply getting online wirelessly at speeds far faster than now possible with most wired broadband connections will be enough to get people to open their wallets.

"The killer application is mobile Internet," said Siavash Alamouti, chief technology officer for the mobile wireless division of Intel Corp.

Meanwhile, another wireless technology called WiMax that is now emerging aims to set up wireless networks that may not be quite as fast as the promised fourth-generation, but still much speedier than today's average broadband connection.

South Korea has become the first country to offer limited WiMax service and plans to blanket the capital, Seoul, with the technology by early 2007, said Hong Won-pyo, an executive vice president at Korea Telecom.

U.S.-based Sprint Nextel Corp. has said it aims to launch WiMax networks in some American markets by late 2007, partnering with Samsung, Motorola Inc. and Intel.

Already, mobile phone companies are seeing the rapidly growing hunger of customers to do much more than just talk on their phones.

Cingular Wireless has 57.3 million subscribers in the United States, of which some 27 million - or nearly half - actively use data services, said Kristin Rinne, the company's chief technology officer.

"We are just at the beginning of a significant explosion," she said.

In a TiVo World, Television Turns Marketing Efforts to New Media
Stuart Elliott

MUCH of the ferment that is remaking Madison Avenue is centered on the changes in television, still the largest and arguably most powerful advertising medium. Two deals that are scheduled to be announced today are indicative of the ways TV is headed in new directions to meet the new needs of marketers.

One deal involves CBS, part of the CBS Corporation, and TiVo, the leader in digital video recorder technology. The agreement is intended to make it easier for TiVo subscribers to sample the four new series on the CBS schedule this fall: “The Class,” “Jericho,” “Shark” and “Smith.”

For instance, for a week beginning Monday, TiVo will offer its 4.4 million subscribers a preview of the premiere episode of “The Class,” a sitcom that broadcasts Sept. 18 on CBS.

The agreement is the first time that TiVo, which is trying to change its image as being unfriendly to advertisers, and a broadcast network have teamed up for a sneak peak of a new series. Previous preview deals struck by the broadcasters have been off television, offering computer users a chance to watch streaming video on Web sites like msn.com and yahoo.com.

The other agreement involves ITN Networks, a media sales company in New York with estimated annual billings of $300 million. ITN assembles customized national TV networks for advertisers from the commercial time it buys from local broadcast stations. ITN clients include Burger King, Capital One, Clorox, GlaxoSmithKline, Johnson & Johnson, Pfizer, Sara Lee and Sears.

A group of media heavyweights — Sony Pictures Television, Veronis Suhler Stevenson and the Zelnick Media Corporation — is buying a majority stake in ITN, spending an estimated $200 million initially as part of plans to eventually invest up to $250 million. The group also intends to expand ITN beyond broadcast TV into other realms like cable and satellite TV, the Internet and video games.

For all the focus on new media, “people will not stop watching television anytime soon,” said Strauss Zelnick, chief executive at Zelnick Media in New York, who will take the new post of chairman at ITN.

The problem with television is that “for years, it’s been a one-size-fits-all medium, when advertisers want to reach targeted audiences more effectively,” Mr. Zelnick said. “We’re trying to look around the corner and benefit from where the media market is going in the future.”

• The agreement between CBS and TiVo was developed with Interpublic Media, part of the Interpublic Group of Companies. TiVo signed a multimillion-dollar advertising agreement with Interpublic last May, which was followed last week by a similar deal with the Omnicom Media Group division of the Omnicom Group.

“We now have comprehensive agreements with two of the top three advertising holding companies,” said Tom Rogers, chief executive at TiVo in Alviso, Calif. (The third is the WPP Group.)

“A year or more ago, TiVo was a real pariah in advertising circles,” Mr. Rogers said, because of fears it would enable viewers to more efficiently avoid commercials by zipping through or zapping them as they watched shows on their DVR’s.

Now, advertisers and agencies understand that spot-dodging “is a fact of modern television viewing behavior,” he added, “and how TiVo can be a force to make advertising more effective.” For example, a service called TiVo Product Watch gives viewers the option to download on demand commercials that are meant to be more creative and informative than conventional spots.

As part of the deal between TiVo and CBS, TiVo subscribers will be able, with one click of their remote controls, to record the premieres of all four CBS series newcomers when they are broadcast on Sept. 18 (“The Class”), Sept. 19 (“Smith”), Sept. 20 (“Jericho”) and Sept. 21 (“Shark”). It will be the first time that TiVo has grouped network shows to be recorded as a bundle.

The TiVo agreement is among various efforts by CBS to let consumers sample its prime-time series for the 2006-7 season. There will also be previews of “The Class” and “Shark” on 40,000 American Airlines flights this month and streaming video of “Jericho” on yahoo.com.

George F. Schweitzer, president at the CBS Marketing Group division of CBS, calls it part of an “outer-Net strategy” to attract viewers in a cluttered market. Other offbeat examples include advertising on eggs, postage stamps, water coolers, elevator doors and cruise ships.

“We’re in all the mainstream media, too,” Mr. Schweitzer said, “but we like being in the edgier places where our competitors are not.”

ITN, founded in 1983, is not an actual network like CBS, although it is included in the national Nielsen people meter ratings. Rather, ITN forms ad hoc networks on behalf of its clients based on viewer characteristics like age and sex. For instance, if Clorox wants to reach women ages 25 to 54 to sell them a new bleach, ITN buys commercial time on local TV stations in programs that appeal to those viewers.

The deal with the investment group “provides us with an opportunity to take the concept to a higher level,” said Todd Watson, president and chief operating officer at ITN, “and target viewers based on lifestyles and behaviors.”

One such effort is already under way, he said, which ITN calls the Mom’s Time Network, intended to help three marketers of packaged goods better aim their pitches at working women with children.

•The current managers of ITN will continue in their posts. In addition to Mr. Watson, they include Timothy J. Connors Jr., chief executive. Mr. Connors and Michael Kammerer have been the owners of ITN; they will retain a minority stake.

Zelnick Media also owns interests in Columbia Music Entertainment; National Lampoon; OTX, an online market research company; SkyMall, the in-flight catalog company; Time Life, the seller of recorded music; and UGO Networks, for online game players. ITN is its “second deal in the advertising space,” Mr. Zelnick said, after Naylor Publications, a trade publisher.

Executives from Veronis Suhler Stevenson and Sony Pictures Television will also join the ITN board, along with Mr. Zelnick. They include Kevin S. Waldman, managing director at Veronis Suhler Stevenson, an investment bank specializing in the media and information industries, and Steve Mosko, president at Sony Pictures Television.

Sony Pictures Television produces shows like “Days of Our Lives,” “Jeopardy,” “Rescue Me” and “Wheel of Fortune.” It is part of the Sony Pictures Entertainment division of the Sony Corporation of America, owned by the Sony Corporation of Japan.

Sci Fi Creates ‘Webisodes’ to Lure Viewers to TV
Jonathan D. Glater

Beginning tonight the television series “Battlestar Galactica” will travel from outer space into cyberspace. The Sci Fi Channel, which broadcasts the series, has created online mini-episodes, the first of which is scheduled to be posted at midnight.

The 10 Web segments, each just a few minutes long and viewable on devices ranging from iPods to laptops to desktops to full-size television sets, feature characters from the television show. And they have the same dark feel of broadcast episodes of “Galactica,” a post-apocalyptic survival tale of humans on the run after their home planets have been destroyed.

The mini-episodes will go online, one at a time, on Tuesday and Thursday nights until “Galactica’s” season premiere on Oct. 6. They focus on two soldiers in a new city built by humans fleeing Cylons, a race of machines that has wiped out human civilization elsewhere.

The two face difficult choices about how — or whether — to fight back against a new Cylon invasion, the climactic moment of last season. Their decisions will help explain their actions in future on-air episodes.

These Web segments are a bit of a gamble. Sci Fi executives are betting that people who are only glancingly familiar with the series — whose story line may be too complicated to follow for those who don’t know what happened in the first two seasons — will be able to follow the story told online.

The channel is hedging its bets by releasing a one-hour recap, called “The Story So Far,” summarizing the show to date. It will appear in September on several NBC Universal television channels (Sci Fi, USA, Sleuth, Bravo, Universal HD) and will be available free on the SciFi.com Web site, on iTunes, on YouTube.com, on Yahoo.com, on United Air Lines flights and at Universal theme parks.

Writing the story told in the Web segments posed a challenge because the episodes had to be short, lead up to the season premiere, be accessible to new viewers and look good on tiny screens. At the same time the shows had to be nonessential to the new season, so television viewers could follow the on-air series without having watched the Web content.

“It was challenging on several levels,” said Erik Storey, vice president of programming at Sci Fi. “Each of the Webisode chapters had to be close-ended, with a beginning, a middle and an end, and each of those chapters is going to be three minutes, four minutes. And there had to be a little cliffhanger ending for each one.”

To keep the Web segments viewable on tiny screens, “Battlestar” has used lots of close-ups of actors’ faces — plenty of emotion — and few sweeping vistas, Mr. Storey said.

“They’re very emotional, relatable conflicts that these guys are going through,” Mr. Storey said. “Because of that, we could really get in close with the camera.”

The “Galactica” segments are part of a broader effort by NBC Universal, which owns Sci Fi, to make new, original video and audio material — content — available on the Internet. David Eick, an executive producer, has a video-blog, or vlog, that shows steps in the making of the show, and another executive producer, Ronald D. Moore, keeps a blog and prepares a weekly podcast designed to be listened to while watching the show.

Sci Fi also has also posted podcasts of writers’ meetings to hash out the plots of episodes of the television series and made it possible to watch entire episodes online. Mr. Howe, executive vice president and general manager of Sci Fi, said the network plans to augment online offerings for other shows in the future too.

The channel bills the Web segments move as a promotion to drum up interest in the third season of the series. “This is a way to get people talking about the show a month before it airs,” said Craig E. Engler, general manager of SciFi.com. The Web segments, whose cost Sci Fi would not disclose, will be free, unsponsored and carry no advertisements.

The Web segments raise questions about how a show’s writers are compensated: Are Web segments the same as episodes, so “Galactica’s” writers and actors should be compensated at union rates? Or are they something else, for which networks can pay less?

“All of these new programming formats and media are causing a great deal of uncertainty and angst about whether fair compensation is going to be negotiated and paid,” said Christopher Murray, a lawyer at O’Melveny & Myers in Los Angeles, which in the past has worked for General Electric, which owns NBC Universal.

NBC Universal filed a complaint against the Writers Guild of America last month, charging that the union violated labor law by telling members not to cooperate in the production of Web segments. In a statement NBC Universal said it “has a contract in place with its TV series producers to create promotional, made-for-Internet content, which include ‘Webisodes.’ We’re asking our producers to fulfill their obligations in creating these materials and we’re taking appropriate legal action to discourage the WGA’s interference.”

Mona Mangan, executive director of the Writers Guild of America, East, said that the problem is the online segments do not fit so neatly into an existing category. “They’re trying to stretch the concept of promotion,” she said. “It doesn’t fit.”

It is not obvious how to measure the success of the online segments. Sci Fi executives said they would monitor how often the Webisodes are the subject of online discussions and of course would see how many people tune in to the season premiere.

“Never having done it, you’re never really sure what you’re going to get out of it,” Mr. Engler said. “Obviously if 50 million people watch them in the course of a week, that’s a great success.”

CBS Unit Launches Web Sports Channels
Anick Jesdanun

Football and other sporting events from dozens of colleges and universities will be available live over the Internet through a service launching Friday.

Notre Dame games will be free, while Navy, Stanford and other schools will charge $4.95 to $9.95 a month each for an "All-Access" broadband channel that includes live audio and video feeds of some games, news conferences, highlights, play-by-play animation and other features.

CBS Corp.'s CSTV Networks Inc., which is running the service, will also sell access to CSTV XXL, the entire package of more than 100 schools for $14.95 a month or $99.95 a year.

"Fans of large schools no longer have to wait for that single game on broadcast or cable," said Brian Bedol, chief executive of CSTV. "For millions of fans of smaller schools, they will have access to live sports for the first time no matter where they live."

CSTV joins companies like SportsCast Network LLC and Penn Atlantic LLC in helping colleges and universities bring games to the Internet. Many schools and some entire conferences are already showing football and other sports on their Web sites, and the CSTV offering expands the number of participants and games available online.

Schools initially participating range from the Air Force to Xavier, and from the University of Washington to the University of Miami. Most are Division I schools.

CSTV will have channels for all schools in the Mountain West and Conference USA. It will also have separate conference channels for those two, along with Big East, Big West, Pacific 10, Southland and West Coast.

CSTV and the schools will generally share revenues from subscriptions, advertising, merchandise and other sales.

The schools often produce the material already for broadcast, video scoreboards and other purposes, so getting footage online likely won't require a heavy investment by either the schools or CSTV.

Because of existing television contracts, however, live video of football and basketball games will initially be limited.

Notre Dame, for instance, promises audio only for every football and basketball game, but video will generally be limited to less-prominent sports, such as hockey, baseball and volleyball, Bedol said. Video highlights of football and basketball will be available.

Bedol said every school will have some live video, but only half will show some football games and up to two-thirds will carry basketball games. Audio is expected for most of the schools, primarily for football and basketball.

He also said more schools should be able to carry video as they re-negotiate deals with television rights holders. In some cases, he said, video could be restricted to viewers outside a broadcaster's coverage area, and a school might share online revenues with the rights holder.

The launch of the CSTV broadband channels, which require recent Windows 2000 or XP computers and Microsoft Corp.'s Internet Explorer 6 browser, come as video technology improves and availability of high-speed Internet access widens.

Currently, only a handful of games each week are chosen for national broadcast, primarily featuring Top 25 Division I-A teams, and contests shown regionally may not be available to fans and alumni who have moved far from their alma mater.

The online offerings from CSTV, which already shows some games on its cable television channel, expands access to the contests.

"It is not designed as a substitute for television," Bedol said. "This is really for the fans that either (don't) have access to a game on TV, or the sports or teams they follow don't get on TV."

EA Video Games To Carry Ads That Change
Matt Slagle

The upcoming video game "Need for Speed Carbon" will have more than just gleaming sports cars and streets to race on: Drivers also will be speeding past real-time advertisements for upcoming films, automobiles and other products.

Like many other games, previous versions of "Need for Speed" had static ads and product placements that cannot be changed once the game was packaged and sold on store shelves.

But with "Need for Speed Carbon," available in late October, players with PCs connected to the Internet or using Microsoft Corp.'s Xbox Live service will see ads that change over time.

In two deals announced Thursday, Electronic Arts Inc. said it will start bringing dynamic ads to its video games for the Xbox 360 and PC platforms this fall.
Redwood City, Calif.-based EA, the world's largest video game publisher, said it was partnering with Microsoft's Massive Inc. to deliver the ads to up to four games, including "Need for Speed Carbon." Separately, EA inked a deal with IGA Worldwide Inc. in New York to deliver ads in the upcoming sci-fi shooter "Battlefield 2142."

Financial terms were not disclosed.

For gamers, it means once-static billboards or posters in the game worlds might instead promote an upcoming film one day and a brand of soft drink the next.

The moves come as video games are increasingly seen as an important way for advertisers and marketers to reach the elusive 18- to 34-year-old demographic, a group in which many have switched off television in favor of games, Massive Chief Executive Mitch Davis said.

Chip Lange, EA's vice president of online commerce, said it was important that the ads don't disrupt a player's experience.

"In a racing game, advertising is not only nice to have, but it's an essential component to create the fiction of being there," he said. "This agreement with Massive allows us to vary what relevant ads are served to the game player."

The ads can even be tailored to target specific regions, such as the United States or Europe, company officials said.

Jeff Brown, an EA spokesman, said the company would use the system in additional games besides "Need for Speed," but he didn't say which ones. "Need for Speed" is one of EA's top franchises, along with the Madden football games.

Online Game, Made in U.S., Seizes the Globe
Seth Schiesel

SEOUL, South Korea — At 10:43 p.m. one recent Saturday, in a smoky basement gaming parlor under a bank in this sprawling city’s expensive Daechi neighborhood, Yoon Chang Joon, a 25-year-old orc hunter known online as Prodigy, led his troops into battle. “Move, move!” he barked into a microphone around his neck as a strike team of some 40 people seated at computer terminals tapped at keyboards and stormed the refuge of the evil plague lord Heigan, fingers flying.

As Mr. Yoon’s orders echoed from speakers around the room, Heigan reeled under an onslaught of spells and swords. In six minutes he lay dead. The online gaming guild called the Chosen had taken another step in World of Warcraft, the online fantasy game whose virtual, three-dimensional environment has become a global entertainment phenomenon among the cybersavvy and one of the most successful video games ever made.

Less than two years after its introduction, World of Warcraft, made by Blizzard Entertainment, based in Irvine, Calif., is on pace to generate more than $1 billion in revenue this year with almost seven million paying subscribers, who can log into the game and interact with other players. That makes it one of the most lucrative entertainment media properties of any kind. Almost every other subscription online game, including EverQuest II and Star Wars: Galaxies, measures its customers in hundreds of thousands or even just tens of thousands.

And while games stamped “Made in the U.S.A.” have often struggled abroad, especially in Asia, World of Warcraft has become the first truly global video-game hit since Pac-Man in the early 1980’s.

The game has more players in China, where it has engaged in co-promotions with major brands like Coca-Cola, than in the United States. (There are more than three million players in China, and slightly fewer than two million in the United States. And as with most video games, a clear majority of players worldwide are male.)

There is a rabid legion of fans here in South Korea, which has the world’s most fervent gaming culture, and more than a million people play in Europe. Most World of Warcraft players pay around $14 a month for access.

“World of Warcraft is an incredibly polished entertainment experience that appeals to more sorts of different players than any game I’ve seen,” said Rich Wickham, who heads Microsoft’s Windows games unit. “It’s fun for both casual players and for the hard-core players for whom the game is more just than a game: it’s a lifestyle. Just as important, Blizzard has made a game that has a broader global appeal than what we’ve seen before.”

Perhaps more than pop music or Hollywood blockbusters, even the top video games traditionally have been limited in their appeal to the specific regional culture that produced them. For example the well-known series Grand Theft Auto, with its scenes of glamorized urban American violence, has been tremendously popular in the United States but has largely failed to resonate in Asia and in many parts of Europe. Meanwhile many Japanese games, with their distinctively cutesy anime visual style, often fall flat in North America.

One of the main reasons Western software companies of all kinds have had difficulty in Asia is that piracy is still rampant across the region. Games like World of Warcraft circumvent that problem by giving the software away free and then charging for the game service, either hourly or monthly.

Since the game’s introduction in November 2004 the company has expanded to more than 1,800 employees from around 400. Almost all of the additions have been customer-service representatives to handle World of Warcraft players, helping them with both technical advice and billing concerns.

“Ultimately, what I’d like is for the user to feel like they are having a very polished entertainment experience,” said Mike Morhaime, 38, Blizzard’s president (and a gamer since he first encountered Pong in 1976). “We’d like players to associate our name with quality, so if they see a box on the shelf and it says Blizzard Entertainment, they don’t need to know anything more than that.”

The basic genre that World of Warcraft belongs to is called the massively-multiplayer online game, or M.M.O. The “massive” refers to the fact that in an M.M.O., thousands of players simultaneously occupy one vast virtual 3-D world. (In a more traditional online game like Quake or Counter-Strike, there are generally fewer than a dozen people in each arena.)

Blizzard runs hundreds of copies of the Worlds of Warcraft universe, known as servers, and there might be a few thousand players on any server at any given time. There are servers customized for six written languages: English, both simplified and traditional Chinese, Korean, German and French. Spanish is in development.

To begin, a player creates an avatar, or character, customizing its physical appearance as well as race and profession, each of which has different skills and abilities. An elf druid might specialize in healing, for example, while an orc rogue could be an expert in stealth and backstabbing. The player is then set loose in a huge colorful fantasy world with cities, plains, oceans, mountains, forests, rivers, jungles, deserts and of course dungeons.

The players can explore on their own or team up with others to conquer more imposing challenges. As a character completes quests and defeats monsters, it gains new abilities and collects more powerful magical equipment that in turn allow it to progress to the next set of challenges. Players can fight other players if they choose, but much of the focus is on teaming up with other users in guilds like the Chosen to battle automated foes.

There were massively-multiplayer games before World of Warcraft, just as there were MP3 players before Apple’s iPod. Like the iPod, World of Warcraft has essentially taken over and redefined an entire product category.

“I think the real key to WOW’s success has been the sheer variety and amount of things to do, and how easy it is to get into them,” said Kim Daejoong, 29, a doctor of traditional herbal medicine in Iksan, Korea, who had traveled to Seoul for one of the Chosen’s regular in-person sessions.

“Hard-core gamers will play anything, no matter how difficult it is,” Mr. Kim said. “But in order to be a mainstream game for the general public, it has to be easily accessible, and there have to be lots of things for you to do, even alone. What WOW has done better than other games is be able to appeal to both audiences — hard-core players and more casual players — all within one game and bring them together. That’s why you’ve seen people all over the world get into the game.”

Hours after the Chosen finished their raid in Seoul, a United States guild called Violent stormed Blackwing Lair, home of the black dragon Nefarian and his minions.

One of the players was Jason Pinsky, 33, the chief technology officer for an apparel company in Manhattan. Mr. Pinsky is not unusual among serious players in that he has logged more than 125 days (3,000 hours) on his main character, a hunter.

“I play this game six nights a week from 8 p.m. to midnight,” he said in a telephone interview. “When I say that to people, sometimes they look at me a little funny. But then I point out that most people watch TV at least that much, and television is a totally mindless experience.

“Instead of watching ‘The Lord of the Rings’ as a three-hour experience, I am now participating in the epic adventure.”

It is rare for guilds in North America and Europe to get together in real life, partly because of geographic distance and partly because of the social stigma often associated with gaming in the West.

In Asia, however, online players like those in the Chosen often want to meet in the flesh to put a real face on the digital characters they have been having fun with. Even in the United States, more and more players are coming to see online games as a way to preserve and build human connections, even if it is mostly through a keyboard or microphone.

“Think about it: I’m a 33-year-old guy with a 9-to-5 job, a wife and a baby on the way,” Mr. Pinsky said. “I can’t be going out all the time. So what opportunities do I have to not only meet people and make new friends but actually spend time with them on a nightly basis? In WOW I’ve made, like, 50 new friends, some of whom I’ve hung out with in person, and they are of all ages and from all over the place. You don’t get that sitting on the couch watching TV every night like most people.”

The Game Is on to Woo the Elusive Female Player
Doreen Carvajal

In one publicity photo, the Frag Dolls loll among soft pink pillows, gripping video game consoles with demure smiles and bright eyes riveted to a computer screen.

This is no slumber party. The stylish, fresh-faced girls are one of the latest weapons in the gaming industry’s effort to smash the stereotypical image of the gamer as a geeky teenage boy in a dark basement, battling aliens.

The French computer game giant Ubisoft is backing three teams of girl game players — one each in Britain, France and the United States, and each named Frag Dolls — on the competitive circuit, while the girls help Ubisoft promote computer play. Other companies are also intensifying efforts to tap the feminine side of computers in a $29 billion industry that is trying to cope with declining sales as consumers await the arrival of a new generation of consoles.

“The industry is starting to move, but it really needed a kick,” said Gabrielle Kent, a game developer and organizer of a recent conference on women in games in Britain. “It’s been a really slow process because the industry is so male-dominated.”

But things are starting to change in the gaming industry, where developers and engineers are typically guys with a penchant for creating action heroes and buxom female sidekicks. Today’s producers are starting to lay down their weapons and talk about the importance of video play infused with depth and emotion.

At the Edinburgh Entertainment Interactive Festival last month, one keynote address was about the need to recruit more women in the business.

“It’s a massively underserved and overlooked segment of the market,” said David P. Gardner, chief operating officer of Electronic Arts, the leading video game company.

“We don’t want to be just for the stereotypical spotty male teenager,” he said. The company’s philosophy was “not to make games for girls, but to make products that are more socially inclusive.”

The Entertainment Software Association has also tried to reach across the gender divide with tougher enforcement of exhibitor rules for the Electronic Entertainment Expo in Los Angeles last May. The association threatened $5,000 fines for the appearance in exhibition booths of bikini-clad women, representing female characters in games. Some women in the gaming industry heralded the change, arguing that the models discouraged girls from participating.

In Germany, where game sales rose less than 1 percent in the last six months, to 469 million euros, or $602 million, organizers of a game convention in Leipzig struck alliances with a magazines for teenage girls and a popular television show, “The Dome,” to produce a rock concert featuring female German pop stars and Lordi, the ghoulish heavy-metal winner of the Eurovision song contest.

“In Germany, we’re very traditional and it’s probably why the girls get the dolls and the boys get the Game Boys,” said Olaf Wolters, managing director of BIU, the German interactive game association. “That is why we have to work on the parents, so they bring in the girls.”

Convention organizers teamed up with the University of Leipzig to develop a family section with areas devoted to video games about singing stars, horses or “My Animal Hospital.”

Game developers are loath to create what they call “pink games” for girls and women. But they are aware that female players tend to scorn games of wanton destruction, preferring simulation games, which allow them to create worlds where the gameplay is more important than winning, or counting cadavers.

The best-selling example of that is a video game franchise called the Sims, published by Electronic Arts, which in the last six years has sold 70 million copies of its various titles, more than 60 percent of them to women or girls.

There is no goal or objective to the game other than controlling a hermetic suburb inhabited by Barbie-doll-like Sims who eat, work and decorate. They also carry on secret love affairs; victims of spectacular breakups are often consoled with shopping sprees.

Will Wright, the game’s designer, refers to this world as a “digital dollhouse.” He is now presiding over the development of a game called Spore, expected to be released next year, that will allow players to control the evolution of creatures, from the tidal pool to intergalactic civilization.

The Sims also reflects the evolution of the industry’s efforts to reach a mass audience that is looking for something more than an adrenaline boost. “I’ve moved away from the shooting games myself,” said Rod Humble, 40, executive producer of the Sims franchise. “There are certain games where you come away feeling kind of angry or at least excited. I’m not sure I want to be thrilled anymore.”

With a new generation of game consoles expected to arrive by Christmas from Microsoft, Sony and Nintendo, developers are already betting that they will attract a mass audience. Ubisoft, sponsor of the Frag Doll teams, is also working on games for the new consoles, using animation that will allow characters to better express their feelings through words and movements.

Mathilde Abgrall, 24, a player and coach on the Frag Doll team in France, still likes to destroy opponents in games like Counter-Strike or Rayman, but yearns for more of a tale.

“Girls want a good story, a good scenario,” she said. “They want to be able to identify themselves to the character they are playing. Somebody much more like them. Someone with more personality, more character and maybe a little more fat and less, uh, physical.”

Next year, Ubisoft will publish a game called Alive that features characters who rely on their instincts and each other to endure after an earthquake. It reflects the company’s focus on an “action plus” style, according to Yves Guillemot, chief executive of Ubisoft.

“It’s more oriented toward drama, more life in characters, more depth,” he said, adding, “It’s still about surviving, but you can’t resolve things by shooting only.”

I.B.M. to Build Supercomputer Powered by Video Game Chips
John Markoff

The Department of Energy said Wednesday that it had awarded I.B.M. a contract to build a supercomputer capable of 1,000 trillion calculations a second, using an array of 16,000 Cell processor chips that I.B.M. designed for the coming PlayStation 3 video game machine.

The initial phase of the contract will be for $35 million. There will be two more construction phases through the completion and installation of the system in 2008. The total cost is expected to be $110 million.

The choice of the Cell chip, which was initially designed with Sony and Toshiba for video game and animation applications, is indicative of how much the computer industry has been transformed in the last decade. It is now being driven largely by technologies originally intended for home and consumer applications.

The machine, called Roadrunner, will be installed at the Los Alamos National Laboratory in New Mexico, and it is intended to safeguard and sustain the nation’s nuclear weapons stockpile. The contract is one of several initiatives in response to Japan’s plans to build computers intended to break the so-called petaflop supercomputer barrier of 1,000 trillion calculations a second.

The Los Alamos system is one of five efforts in the United States to reach petaflop status by 2010.

The Roadrunner will use the Sony Cell Broadband Engine as a specialized processor, with a corresponding array of Advanced Micro Devices Opteron microprocessors. This kind of hybrid design is increasingly being used as designers scramble to reach ever-greater computing speeds.

“It’s like adding a turbo to a car engine,” said Steven J. Wallach, a supercomputer designer who is a consultant at Los Alamos. “Hybrid computing will become a standard way of enhancing the performance of off-the-shelf processors.”

But several computer scientists said that hybrid designs had not yet been proven for general-purpose supercomputing uses. “There are a number of risks involved,” said Jack Dongarra, a computer scientist at the University of Tennessee. “It will be a challenge and it’s still unknown how we get to that performance.”

New Name and Strategy for Chip Division at Philips
Steve Lohr

The semiconductor unit of Philips Electronics is adopting a new name, NXP, as it becomes a stand-alone company and pursues a strategy that relies heavily on supplying chips to the fast-growing consumer market for advanced electronics products.

NXP, being adopted today, stands for Next Experience, the company said. The new name is meant to suggest that the company will focus largely on chips to improve the performance of the next generation devices used by consumers, including digital televisions, multimedia cellphones, electronic passports and digital cash and identification systems.

Last month, Philips Electronics agreed to sell 80 percent of its semiconductor division to a group of private equity firms — Kohlberg Kravis Roberts & Company, Silver Lake Partners and AlpInvest Partners — for 3.4 billion euros ($4.35 billion). Two weeks ago, two other private equity firms, Bain Capital and Apax, joined the buyers’ group.

As part of the deal, expected to close in the fourth quarter, the investors will take on 4 billion euros ($5.12 billion) of the new company’s debt. The company will be based in Eindhoven, the Netherlands.

The new name and the strategy, analysts say, bear the clear imprint of the chief executive of the new company, Frans van Houten. He spent eight years as a senior executive in the consumer electronics division of Philips before assuming control of the semiconductor business in 2004.

Mr. van Houten’s experience in consumer electronics, analysts say, shaped his view that the best future for Philips’s semiconductor unit would be to make chips for what he refers to as “connected consumer devices”: products for entertainment, communication and commerce that typically can handle images and sound, and can share information with other devices.

The market for consumer device chips is growing faster than that of chips for the personal computer industry, which is maturing.

“Consumer technology was where the growth is, and van Houten has pushed the Philips semiconductor business in that direction,” said Tim Bajarin, president of Creative Strategies, a consulting firm. “And he was able to communicate the long-term opportunity in this connected consumer market to the investors.”

Mr. van Houten, 46, was often mentioned as the most likely successor to Gerard Kleisterlee, 59, the chief executive of Philips Electronics.

“Van Houten was crucial to the deal getting done — a C.E.O.-style guy with a broad background, someone the investors are comfortable with,” said Rob Enderle, an independent technology analyst in San Jose, Calif.

The Philips semiconductor business, analysts say, has been somewhat hamstrung inside the larger company. It was often trying to sell its chips to companies that compete with the consumer electronics business of the parent company, like Sony, Toshiba and Matsushita, which markets Panasonic products. These companies are understandably reluctant to forge close partnerships with a supplier that is an arm of a corporate rival.

As a separate company, NXP will no longer have to overcome that hurdle. Removing that barrier could lift sales by 25 percent or so over the next few years, estimates Richard Doherty, director of Envisioneering, a technology research firm.

With sales last year of 4.62 billion euros ($5.9 billion), the Philips semiconductor business was among the world’s top 10 chip makers. In the last two years, under Mr. van Houten, the business grew by 19 percent and moved from a loss to profitability, with a pretax profit of 307 million euros ($393 million) last year.

The semiconductor business requires sizable capital investments and in the past it has swung in unpredictable cycles. Mr. van Houten said he was intent on making the business less volatile, delivering steady growth and pretax profit margins in the range of 5 to 15 percent.

But the parent company decided it wanted to get out of the semiconductor business to focus on what it regards as its two core strengths: health care products, like medical imaging machines and defibrillators, and what it calls the lifestyle market, with offerings that range from electric shavers to flat-screen televisions.

Mr. Kleisterlee has said Philips plans to drop “Electronics” from its corporate name.

In using XP as corporate shorthand for “experience,” NXP is following the lead of another technology company, Microsoft. The version of its operating system introduced in 2001 is called Windows XP.

Plan at Intel May Include Many Layoffs
Laurie J. Flynn

Executives from Intel, the largest chip maker, are expected to reveal on Tuesday the results of a sweeping evaluation of the company’s internal operations that could include layoffs of thousands of employees.

The moves would be the culmination of what Paul S. Otellini, Intel’s chief executive, promised in April would be a broad review of operations to reduce costs and increase efficiency, after Intel’s announcement of disappointing financial results.

Mr. Otellini told Intel employees in an e-mail message sent Thursday that he would announce the results of the study to workers via a company Webcast on Tuesday, according to an Intel employee who requested anonymity.

Referring to Intel’s promise that it would announce results of the study by the end of September, Chuck Mulloy, a spokesman for Intel, said: “We said that we intend to disclose the results of the structure and efficiency study during the quarter and we’re on track to do that.” Mr. Mulloy declined to provide details or comment on the possibility of layoffs.

In April, Mr. Otellini told a meeting of financial analysts that the company would restructure to focus on reducing manufacturing costs and identifying weak business units. “You will see a leaner, more agile and more efficient Intel,” Mr. Otellini told analysts at the time. Wall Street analysts have been eager to see Intel reduce costs, and most have expected Intel to announce layoffs this fall.

Nathan Brookwood, a technology consultant, said he expected Intel to reduce its work force drastically, perhaps by eliminating redundant projects.

In July, Intel announced plans to sell parts of its communications business and to lay off 1,000 managers. Intel, based in Santa Clara, Calif., has about 100,000 employees.

FCC Wants to Reconsider Indecency Ruling on `NYPD Blue' and 3 Other Programs

Will reconsider rulings
Larry Neumeister

The Federal Communications Commission rushed to judgment in concluding that "NYPD Blue" and three other television programs violated rules governing the broadcast of indecent and profane material, an FCC lawyer said Tuesday.

The lawyer, Eric D. Miller, asked an appeals court to delay hearing a challenge to the FCC's findings for two months so its board can hear the opinions of the owners of the programs and reconsider its rulings, which carried no fines.

In court papers, the FCC said it skipped its usual process of soliciting responses from the broadcasters because it believed the orders responded to requests from broadcasters for guidance on what violates the FCC's new indecency and profanity rules.

The FCC said it acted faster than usual and did not propose fines for any of the programs, concluding only that the programs "apparently" violated the statutory and regulatory prohibitions on indecency and profanity.

Lawyers for several broadcasting companies told the 2nd U.S. Circuit Court of Appeals they ultimately want to challenge the rules, which they say have spoiled their First Amendment rights, exposing them to hefty fines for accidental broadcasts of isolated and fleeting expletives.

ABC Television Network, NBC Universal Inc., CBS Broadcasting Inc., Fox and their network affiliate associations challenged a March 15 FCC order resolving indecency complaints based on television programs that aired between February 2002 and 2004.

The broadcasters said the enforcement of federal indecency rules is inconsistently applied since the FCC in 2004 decided that virtually any use of certain expletives would be considered profane and indecent. Millions of dollars in fines have been levied based on those rules.

The appeals challenged the FCC's finding that profane language was used on the CBS program "The Early Show" in 2004, incidents involving Cher and Nicole Richie on the "Billboard Music Awards" shows broadcast by Fox in 2002 and 2003 and various episodes of the ABC show "NYPD Blue" that aired in 2003.

The FCC said it did not issue fines in those cases because the incidents occurred before the 2004 ruling.

While none of the cases involved NBC, the network filed a petition to intervene on behalf of the other networks and stations.

In an interview, attorney Carter G. Phillips, speaking on behalf of Fox Television Stations Inc., said the aim of the broadcasting companies was to have the appeals court declare that the March 15 orders regarding the four programs were unconstitutional.
He said the broadcasters want the FCC to return to the enforcement system that did not penalize accidental expletives.

In court papers, Phillips wrote that Fox's principal concern is that a word that triggers an FCC fine, such as one uttered during a baseball game by an unhappy player or manager, might be inadvertently broadcast.

"The prospect of such massive fines obviously forces Fox to steer far clear of even constitutionally protected speech," he wrote.

The appeals court reserved decision on whether to let the FCC take the case back.

Wi-Fire Extends Wireless Range to 1,000 Feet
Cyrus Farivar

A new Pennsylvania-based startup, hField Technologies, has just gotten FCC approval for their new supercharged WiFi antenna, the Wi-Fire. The USB antenna boosts reception of faint WiFi signals, extending the range of existing networks up to 1,000 feet. hField's founders, recent Lehigh University graduates, had originally built the product for a student entrepeneurial challenge, and won first place, including the prize of $2,500. Earlier this summer, hField also recieved $25,000 of funding from a state-funded development organization, and the rest, as they say, is history (waiting to happen). The Wi-Fire is now on sale through hField directly for $150, though unfortunately without Mac support for now, it seems -- although if you have a Windows computer, it's guaranteed to put as big of a smile on your face as this girl's, though not nearly as big as these dudes'.

Jail for Hate on Web Site

A judge handed a Two Hills man an 16-month sentence Friday for promoting hatred on his website in what is being called a groundbreaking Internet hate-crime case.

Reni Sentana-Ries was convicted last December by a jury on one count of promoting hatred through his site called Federation of Free Planets, which denies the Holocaust and says Jews created diseases such as AIDS and Ebola.

Court of Queen's Bench Justice Philip Clarke gave the 63-year-old jail time instead of a conditional sentence and prohibited him from using the Internet for 36 months. He also ordered the “appalling” website shut down. It still operates out of the United States.

The maximum sentence was two years.

“There is a complete absence of any mitigating circumstances except for the first time offence and an absence of remorse,” Clarke said.

“He sincerely believes the hate he has posted on his website.”

Crown prosecutor Steven Bilodeau said the case sets "a benchmark" for similar Internet hate cases.

Read Saturday’s Edmonton Journal for more details.

State Supreme Court To Hear Internet Libel Case

The California Supreme Court is set to hear arguments in San Francisco Tuesday on whether someone who posts a defamatory comment by another person on the Internet can be sued for libel.

Two civil liberties groups say the court’s eventual ruling, due in three months, could have far-reaching implications for free speech on the Internet.

While the case before the court concerns individuals—a Canadian doctor seeking to sue a women’s health activist for posting a third person’s comment about him—the court’s ruling could also determine whether Internet service providers can be held liable when they knowingly allow defamatory remarks to be posted.

Kurt Opsahl, a lawyer with the Electronic Frontier Foundation in San Francisco, said last week “it would be a disaster” if the state high court allows such lawsuits.

“The Internet would not be the rich and diverse place it is now,” Opsahl said.

The foundation joined with the American Civil Liberties Union in a friend-of-the-court brief urging the court to find that the federal Communications Decency Act protects individuals and Internet service providers from such lawsuits.

The two groups wrote in the brief, “Online forums are the modern soapboxes of our age, where the public can debate and comment on the issues of the day, allowing discourse on the widest range of topics and opinions.”

But Oakland attorney Christopher Grell, representing Canadian physician Terry Polevoy, argued in an opposing brief that prohibiting libel lawsuits would violate his client’s right to try to protect his good name.

Grell wrote that activist Ilena Rosenthal’s interpretation of the law “would leave virtually every Internet user or service provider free to post, republish or have published on their Web site whatever anyone wants to post or republish, no matter how libelous and no matter how much notice or proof of the libel is provided.”

In the case before the court, Polevoy sued Rosenthal in Alameda County Superior Court in 2001 for posting comments about Polevoy by another person, Timothy Bolen, on the Web sites of two alternative medicine newsgroups.

At the time, Rosenthal was a breast implant awareness activist in San Diego.

The message alleged that Polevoy, who opposed alternative medicine, had stalked a female radio announcer. The doctor claimed the stalking allegation was false and defamed him.

Rosenthal contends she is protected from the lawsuit by the 1996 Communications Decency Act, which shields Internet service providers and users from being sued for posting statements by third parties.

But Polevoy claims Rosenthal is not covered by the law because she is a “distributor” who publicized the statements rather than a user.

Superior Court Judge James Richman dismissed the case, but in 2003, a three-judge panel of the Court of Appeal in San Francisco reinstated the lawsuit.

The appeals court said the federal law doesn’t protect people who intentionally post a defamatory comment while knowing or having reason to know the statement is false.

Although the court did not rule directly on Internet service providers, the reasoning of the ruling suggested that service providers could be held liable as well.

Rosenthal then appealed to the state high court, which announced in 2004 that it would hear the case.

The hourlong arguments will be heard at 2 p.m. Tuesday in the panel’s courtroom at the state building in San Francisco. The seven-member court will then have 90 days to issue a ruling.

G’day, Cow! Farmers Say Animals Have Accents

Group of British herdsmen say they hear moos with different drawls

Cows have regional accents, a group of British farmers claims, and phonetics experts say the idea is not as far-fetched as it sounds.

Lloyd Green, from southwest England, was one of a group of farmers who first noticed the phenomenon.

“I spend a lot of time with my Friesians, and they definitely moo with a Somerset drawl,” he said, referring to the breed of dairy cow he owns.

“I’ve spoken to the other farmers in the West Country group and they have noticed a similar development in their own herds.

“I think it works the same as with dogs — the closer a farmer’s bond is with his animals, the easier it is for them to pick up his accent.”

Birds, too?
Dom Lane, spokesman for a group called the West Country Farmhouse Cheesemakers to which Green belongs, said it contacted John Wells, Professor of Phonetics at University College London, who said that a similar phenomenon had been found in birds.

“You find distinct chirping accents in the same species around the country. This could also be true of cows,” Wells said on the group’s Web site (www.farmhousecheesemakers.com).

According to Lane, accents among cows probably develop in a similar way as among humans, and resulted from spending time with farmers with differing accents.

“Apparently the biggest influence on accents is peer groups — on children in the playground, for example,” he said. “Herds are quite tight-knit communities and don’t tend to leave the area.”

He added that more scientific research was needed to prove what was just an anecdotal theory at this stage.

Texan Foils U.K. Burglary Via Beatles Webcam

Man watching over Internet spots crime in progress, alerts local police

An American helped foil a burglary in northern England while watching a Beatles-related Webcam, police said Friday.

The man from Dallas was using a live camera link to look at Mathew Street, an area of Liverpool synonymous with the Beatles and home to the Cavern Club, where the band regularly played.

He saw intruders apparently breaking into a sports store and alerted local police.

"We did get a call from someone in Dallas who was watching on a Webcam that looks into the tourist areas, of which Mathew Street is one because of all the Beatles stuff," a Merseyside Police spokeswoman said.

"He called directly through to police here." Officers were sent to the scene, and three suspects were arrested.

Local News

Toilet Bombs Keep ‘Prince Of Darknet’ In Jail

Judge denies bail for alleged Net pirate after portable toilet blast charges
John Christoffersen

NEW HAVEN, Conn. - A Weston man once called one of the Internet's most notorious pirates of music and movies is too dangerous to be released from prison following charges that he blew up several portable toilets, a federal judge ruled.

U.S. Magistrate Holly Fitzsimmons ordered Bruce Forest to undergo a medical evaluation and rejected efforts by his family to release him on bond.

Forest was charged in May with seven counts of using explosives to destroy property and seven counts of discharging a firearm in connection with the explosions from last October through March.

No one was injured.

"We're at a loss to explain why he was doing this, other than the excitement of blowing things up," Weston Police Chief Anthony Land said in March when Forest was arrested on state charges.

Most of the explosions occurred at night in isolated areas, but the last blast in Norwalk occurred during the day in a heavily populated area, authorities said. The explosives involved a mixture of chemicals, Land said.

Forest's family offered to secure a bond with two houses they valued at up to $5 million and proposed home confinement with electronic monitoring. But Fitzsimmons on Wednesday ordered him detained, saying that an arsenal of weapons was found at his home and the charges involved "an escalating pattern of destruction."

The judge also cited evidence that Forest was using drugs or medications illegally obtained over the Internet and told a neighbor he was working for the government and was responsible for repelling any terrorist attack on the neighborhood. Forest scared his wife, who described him as moody, depressed, paranoid and hostile toward her and their children, though not violent, Fitzsimmons said.

"Given the uncertainty concerning the defendant's physical and emotional health, the court cannot have any reasonable assurance that the proposed conditions will deter him from flight or protect the community," Fitzsimmons wrote.

She also ordered Forest to be examined within 30 days with recommendations for any treatment.

Forest was being treated for anxiety, depression and migraine headaches stemming from a fall that caused head trauma, according to a court-appointed social worker.

Forest was a notorious Internet pirate in the late 1990s, said J.D. Lasica, a San Francisco writer who dubbed Forest "Prince of the Darknet" in his 2005 book "Darknet: Hollywood's War Against the Digital Generation."

Liam Revelled In The Pirate's Life
Patrick Gower

His mates on the North Shore didn't call him "Crazy Liam" for nothing.

Take the time Liam Ashley stole a car from his father's work and went on a joyride, pulling a series of burnouts on a grass verge before its windows were smashed out.

But his fun with the car wasn't over yet - with some friends watching on, he drove it off a boat ramp and dumped it in the sea.

"His parents probably wouldn't want me telling you about that, but that was Liam," Daniel, one of his pallbearers, said yesterday.

"He would do anything for fun, and even though it could be totally crazy, he never meant anything bad by it. It is not like he would hurt anyone."

Liam's pursuit of fun ended in the back of a Chubb prison van nine days ago, when the 17-year-old was murdered, allegedly by an adult prisoner he was sharing a cage with in the vehicle.

His parents, exasperated by his latest antics that included the stealing of yet another car from his mother, had wanted him to experience first-hand the penalties for breaking the law if an adult. It was a last resort after a years of dealing with his Attention Deficit Hyperactive Disorder (ADHD).

Daniel, Liam and their mates led what they called the "Pirate Life", a slogan since emblazoned on the back of "Crazy Liam" T-shirts.

"Liam loved that saying," said Daniel, also 17, who did not want his last name used. "It was because we lived life like pirates, cruising around, doing what we wanted. Drinking rum and having fun."

They would hang out at the Birkenhead skate bowl, drinking, smoking cigarettes and weed. There was trouble with police, but "nothing major," said Daniel, "just disorderly behaviour and drinking in public".

Daniel was on bail when he spoke at Liam's funeral on Wednesday, on a minor theft charge for which he was given diversion when he appeared in court the following day.

However, he is adamant the boys were just "doing normal teenage stuff". Liam was a mischief man among mischief-makers.

"My parents didn't want me hanging around him, but they didn't understand. He was a victim of ADHD, his friends were everything to him.

"There are guys our age doing things a million times worse than Liam ever did. All the bad things he did, it was against his parents. And everything he ever did, he got snapped for."

The last time Daniel saw Liam it was in the Honda CRV jeep he had stolen from his mother that he was to be arrested for. He knew it was stolen; they always were.

Liam ended up in the North Shore District Court on 10 charges, seven of which he pleaded guilty to on the day of his death, all stemming from offending against his parents.

The next he heard of Liam was a phone call from his mother, Lorraine Ashley. "His mum rang up and said there was bad news. I thought, 'What has he done now?' Then she said he was dead."

Daniel, who first met Liam when they were about 6, is sure his mate would have been terrified in the Chubb van, despite his penchant for risk-taking. A 25-year-old man, who has name suppression, has been charged with Liam's murder.

Daniel said if there was a man Liam idolised it was his father Ian, who runs Milano International, a car importing company, where his son had recently been working. Daniel said Liam thought everything his father did was the best, "the best car, the best bike [a Harley Davidson], the best this, the best that".

And what were Liam's hopes for the future? He once said he wanted "to steal a Harley-Davidson," said Daniel.

"Liam didn't live in the future. He didn't live in the past. He lived in the now."

Father tells of son's struggles

By age 3 Liam Ashley was diagnosed with Attention Deficit Hyperactive Disorder (ADHD) and by age 5 he was prescribed Ritalin.

His father Ian revealed yesterday the family's struggle with Liam's ADHD, saying they had never heard of the disorder when Liam was diagnosed in 1992 and went in search of all the literature they could find. He described his wife Lorraine as "a true angel from heaven" for being Liam's full-time caregiver, and managing three other children's needs.

Liam lasted a short time at his first school before he was asked to leave.

He made progress with some specialised support at other schools but this was "taken away" and Liam went across Auckland to Waimokoia Special School in Half Moon Bay, a last-stop primary for the country's most difficult kids. Liam's return to mainstream education was a failure.

He was sent to board at Christchurch's Halswell Residential College for boys with intellectual and social difficulties, Although Liam flourished, Mr Ashley said he longed to be with his family and they reluctantly brought him back to the North Shore just before his 15th birthday. He lasted only a year and went to work cleaning cars at Mr Ashley's business.

Mr Ashley said Liam had begun to experiment with cars, alcohol, drugs and girls. It was not long before he started to take money or family possessions to trade and sell.

Mr Ashley said that despite the family trying all avenues of teenage support, the offending escalated and they decided to "entrust" Liam to the justice system to show him where he would end up once he turned 18.

"The rest has been well documented."

30 Teenagers, 7 Short Movies, 1 Dream of Peace
Matthew Hays

GALIANO ISLAND, British Columbia

THE organizers of this summer’s Peace It Together Camp here never expected it would be easy to bring together 10 Israeli, 10 Palestinian and 10 Canadian teenagers to make several short films in a spirit of dialogue and collaboration. But they also never expected to do so in a time of war.

The conflict erupted in Lebanon just two weeks before the youths arrived on this gulf island on Canada’s west coast. “There were some sleepless nights,” acknowledged Adri Hamael, co-executive director of this 18-day event, arranged by the Creative Peace Network. “Suddenly the Middle East looked like it was on fire. If bombs are dropping on people’s heads, they tend not to be in a very generous mood. When violence escalates, people become more polarized and skeptical about programs like this one. But I had faith that we would make it happen. Canceling really wasn’t an option.”

Gathering young Israelis and Palestinians in a safe environment as a means of breaking down barriers is not a new idea. Several charitable organizations undertake such efforts annually in North America, and one such meeting was captured in the Oscar-nominated 2001 feature-length documentary “Promises.”

But the Creative Peace Network, which had organized a previous peace camp in Vancouver, British Columbia, in 2004, decided to use filmmaking as a way to promote cross-cultural understanding and cooperation after being approached by the Gulf Island Film and Television School. In early August the 30 adolescents arrived from Israel, the Gaza Strip and the West Bank, and Canada to get to know one another while creating a series of short films. “Our point has always been to use dialogue and creativity as a means of breaking down barriers and changing lives,” Mr. Hamael said.

The students, all between 15 and 17, were chosen by regional coordinators. Thanks to private donations, their travel and living expenses were subsidized. A small tuition of $400 was required of each participant.

On arrival the students were broken down into seven groups to work in either animated, documentary or dramatic filmmaking. Each group was assigned an adult mentor to help with brainstorming sessions, screenwriting and technical matters. Each morning the teenagers met to exchange views about their lives and the Middle East conflict; in the afternoons they worked on their films. The idea was that the discussions would be enhanced by the collaborative effort of moviemaking.

Ala’a Abu Dawoud, a 17-year-old Palestinian from the northern Israeli town of Majd Al-Kurum, said the camp was an extremely difficult place to be at times. “Sometimes I feel like crying,” she said during an interview here. “Sometimes I feel I’ve done the wrong thing by coming here. Sometimes it’s hard to rethink the things we’ve been told and the things we see on the news every day. But I realized over time that I was having fun with the Jewish people who were here. And now we’ve become friends.”

For Ms. Dawoud and the others, the filmmaking process helped to bring them together. “I thought it would be so complicated,” she said. “But because we’re doing something I really love, and because we’re showing the conflict in a different way through our eyes, the act of making the film has been really fascinating.”

Not surprisingly, exchanges could occasionally prove acrimonious. “Some people might see this as a feel-good project, but it can be very intense,” Mr. Hamael said. “The youth who are here are a product of violence. They are born either under occupation or under the threat of violence. They come with emotional baggage.”

While the topics of the seven films were varied, they shared themes of promoting peace and conflct resolution. In the five-minute documentary “Sweet Like Chocolate,” several teenagers describe what they think peace would feel, sound and taste like. In the seven-minute drama “No Place for Dreamers,” a Palestinian man and an Israeli woman find it impossible to continue their budding romance because of a roadblock that a checkpoint places between them. In the film’s conclusion the despondent woman looks through a fence as Israeli soldiers tell the Palestinian man that he cannot pass through to the other side.

Part of the inspiration for “On the Line,” a combination of documentary and drama, came after one of the Israeli youths, Nir Ayalon, revealed to the other teenagers that he would serve in the Israeli military next year. “There were some faces made when I told them,” Mr. Ayalon, 17, acknowledged. “But I will not be serving in a combat capacity, so there’s no way I’m going to be shooting at anyone.”

The film depicts Mr. Ayalon’s friendship with one of the Palestinian teenagers at the camp, but concludes ambiguously with a fantasy sequence in which the two meet up again, in 2008, when Mr. Ayalon has become an Israeli soldier manning a checkpoint.

Alternately sweet and bitter, the films by the teenagers at times seem naïve, until one considers that the Israel and Palestinian youths face very real threats of violence, and that their scenarios are all rooted in that reality.

The camp’s organizers have said they hoped to screen the anthology of seven films on the film festival circuit. “I feel we have made an impact,” Mr. Hamael said. “Even if that is a limited impact, it is something nonetheless. Governments spend billions of dollars every year on the possibility of war. We are trying to spend something on the possibility of peace.”

David Ozier, a Vancouver filmmaker who worked as a mentor, said those who attended appeared to be affected by the experience. “Both the Palestinian and Israeli teenagers learned to work together and formed some very strong friendships,” Mr. Ozier said. “True to stereotype, the Canadian kids were often the ones who were filling a diplomatic role when there was conflict.”

Online Auctions Raise Value of Celebrities’ Charity Gifts
Stephanie Strom

It seems that committing $37 billion to charity was not enough for Warren E. Buffett.

Mr. Buffett, the famously frugal billionaire, has donated his 2001 Lincoln Town Car for an eBay auction starting Sept. 12 to raise money for Girls Inc., a youth organization his family has long championed. He is even throwing in his vanity license plate: THRIFTY.

“I don’t want to sound like a used-car salesman, but this car is a real cream puff,” Mr. Buffett said in a telephone interview from his office in Omaha. “You just have to get behind the wheel of this vehicle.”

Charities have long sold items owned by celebrities, but eBay and the Internet have pumped new life into this fund-raising technique, increasing returns exponentially.

Last year, a Harley-Davidson motorcycle autographed by guests on “The Tonight Show With Jay Leno” raised $760,095 for the American Red Cross to help it serve victims of the Asian tsunami, setting a record on eBay. In 2002, Tiger Woods auctioned off a round of golf with himself for four people and raised $425,000 for his foundation, which supports programs that serve underprivileged children.

The United Way of America used its own Web site to auction off the gift bag George Clooney received this year for his services as a presenter at the Academy Awards. The gift bag raised $45,100, which was $27,100 more than the value of the items in it.

“The Internet increases your reach, drawing people from around the country and even internationally,” said Sheila Consaul, a United Way spokeswoman.

(Nonetheless, Ms. Consaul said the United Way would think twice before accepting another gift bag because only 27 of the 68 items in it could be transferred to someone other than Mr. Clooney, who sits on the United Way’s board. “It was a little more challenging to pull off than it sounded,” she said.)

Since 2000, more than $81 million has been raised for charity on eBay from regular vendors committing a part of their sales to nonprofit groups and by charities selling items directly. On any given day, more than 8,000 such sales are going on.

Conventional sellers are charged standard fees that, under a policy effective Oct. 1, will be returned to them in direct proportion to the percentage of the final sales value they have pledged to donate. For example, if conventional sellers send 30 percent of their revenues to charity, eBay will return 30 percent of their fee. Nonprofits selling items on eBay via the Giving Works program pay no basic fees.

“Interest from nonprofits has been amazing,” said Kristin Cunningham, senior manager of Giving Works. “Among people who are always having to ask for a check, anything that puts a new spin on fund-raising can be exciting.”

Mr. Buffett has experience with that phenomenon. In 2000, he began donating a lunch with himself to the Glide Foundation, a charity providing help to the poor that is affiliated with the Glide Memorial United Methodist Church in San Francisco and was supported by Mr. Buffett’s late wife, Susan Thompson Buffett.

For the first three years, the lunch was auctioned off at Glide’s annual benefit, raising an average of about $27,000 each time, Mr. Buffett recalled. “Then they put it on eBay four years ago,” he said, “and the first year there, it went for $250,100, and I like those kinds of returns.”

This year, the lunch raised $620,100 for Glide, which has a budget of about $12 million. “That’s substantial for us,” said the Rev. Cecil Williams, the chief executive of Glide’s national and international ministries.

Mr. Buffett, who recently donated the bulk of his fortune to the Bill and Melinda Gates Foundation and other charities, said it had been his daughter’s idea to offer the Lincoln to Girls Inc. He said he had bought a Cadillac as a show of support for Rick Wagoner, the chief executive of General Motors, “and she asked me what I wanted to do with this car.”

“I told her she could do what she wanted with it,” he added, “and this is what she came up with.”

The Buffett family has a long history with Girls Inc. of Omaha, the local affiliate, said Roberta Wilhelm, the organization’s executive director. In 1975, Mrs. Buffett helped it find its first home, in a church basement in Omaha, and the Buffetts’ daughter, Susie, sits on the boards of the local and national organizations.

“It’s terrific,” Mr. Buffett said of the charity. “The girls, they come there after school and get help with homework, hot meals, access to computers, getting support and experiences they would not have otherwise. It evens the playing field a bit.”

Girls Inc. of Omaha was one of four youth organizations in the city to benefit from an annual golf tournament Mr. Buffett sponsored. And in 1999, he planted a stock tip inside his wallet and gave it to the charity to sell at auction.

The wallet sold for $210,000, but it raised much more for the charity. “The buyer said he would share the tip in it with others who gave money to us,” Ms. Wilhelm said, “and that generated a lot of other gifts.” She added that the tip paid off for the buyer, John Morgan.

Mr. Morgan, an Omaha native who lives in Minnesota, became a big supporter of Girls Inc. and once served on its national board.

“We got a lot of mileage out of that wallet,” Ms. Wilhelm said.

Mr. Buffett said he had never used the wallet much. “Kind of like my car,” he said. “I only put about 14,000 miles on it in four years, going to the office, which is about a mile from my house, and to the airport, which is about three miles away.”

Banksy Targets Paris Hilton

'Guerrilla artist' replaces heiress's CDs in shops with doctored versions
Claire Truscott and Martin Hodgson

He has smuggled fake artwork into Tate Britain, and sprayed a vision of paradise on the Palestinian side of Israel's "security wall".

Now, the "guerrilla graffiti" artist Banksy has taken aim at the cult of empty celebrity and its current poster child, Paris Hilton.

The secretive artist has smuggled 500 doctored copies of Paris Hilton's debut album into music stores throughout the UK, where they have sold without the shops' knowledge.

In place of Ms Hilton's bubble-gum pop songs, the CDs feature Banksy's own rudimentary compositions. On the cover of the doctored CD, Ms Hilton's dress has been digitally repositioned to reveal her bare breasts; on an inside photo, her head has been replaced with that of her dog.

On the back cover, the original song titles have been replaced with a list of questions: "Why am I famous?", "What have I done?" and "What am I for?"

Inside the accompanying booklet, a picture of the heiress emerging from a luxury car has been retouched to include a group of homeless people.

In another shot, Ms Hilton's head has been superimposed on a shop window mannequin beneath a banner reading: "Thou Shalt Not Worship False Icons."

Instead of Ms Hilton's own compositions, the replacement CD features 40 minutes of a basic rhythm track over which Banksy has dubbed Ms Hilton's catchphrase "That's hot!" and other extracts from her reality TV programme The Simple Life.

The record credits have been re-edited to include thanks to the artist for his "wonderful work".

The bogus CD is not the first time he has branched out beyond the stencil graffiti that made his name. In 2003, Banksy glued one of his paintings on to a wall in Tate Britain, where it went unnoticed by staff for hours. The following year he smuggled a display case with a stuffed rat wearing sunglasses and a backpack into the Natural History Museum. At New York's Museum of Modern Art, he placed an Andy Warhol-style print depicting a tin of Tesco Value soup. Last year, he sprayed paintings on the Israeli security wall around the West Bank.

MySpace Music Store Is New Challenge for Big Labels
Robert Levine

So far none of the companies that sell music online have emerged as serious competitors to the iTunes Music Store of Apple Computer. But not one of them has an audience like MySpace, which millions of teenage and twentysomething music fans visit every day.

For the music industry, which worries about Apple’s dominance of the online market, a MySpace music store could present difficulties of a different sort.

MySpace, the online community site owned by the News Corporation, said on Friday that it would sell music through a partnership with Snocap, a technology company started by the creator of Napster, Shawn Fanning. When the online store opens this fall, it will allow bands and labels of any size to sell songs online for whatever price they want.

For the independent-label bands and unsigned artists who have found MySpace to be an effective and inexpensive way to spread the word about their recordings and concerts, a store on the site will be an important outlet.

With more than three million pages devoted to a variety of performers, from unknown garage bands to Bob Dylan, MySpace is already an important online venue for musicians.

“Instead of going to iTunes and searching for music, which happens once in a while,” said Tom Anderson, president and co-founder of MySpace, “you can see the band and buy their music.”

But for the four major labels, which must approve each retailer that sells digital versions of their music, the new store could represent a challenge.

The MySpace store would let labels set their own prices for songs, which they have complained that iTunes does not let them do. And all of the major labels have put their catalogs into Snocap’s database, which uses an audio fingerprinting technology to prevent people from selling songs they do not own.

The MySpace store will sell music in the MP3 format, however, which allows them to be played on the Apple iPod but does not offer any copy protection. So far, the labels have been unwilling to sell music online in any format that does not allow them to restrict how many copies can be made.

At least one of the major labels, EMI, is in talks with MySpace, according to one person with knowledge of the negotiations who declined to be identified, citing the confidentiality of the discussions.

Chris DeWolfe, co-founder and chief executive of MySpace, said: “We’re hopeful that once we start getting adoption from smaller bands and labels, the major labels will want to participate. We’ll be talking to them continually, as will Snocap.”

Others are more skeptical.

“The majors aren’t going to distribute music unprotected on MP3,” said David Card, a senior analyst at Jupiter Research. Without their participation, he suggested, the appeal of such a store could be limited. Snocap has the ability to sell songs in other formats, but Apple has never let other companies sell iTunes files, and right now other restricted formats have little traction with consumers.

There is one other large online music store that sells songs in the MP3 format, eMusic. It offers a wide range of material from independent labels, but nothing from the four majors. As of July, it had almost 13 percent of the market for online music.

Snocap’s system can be used by anyone, which would let small labels and unsigned bands sell their music just as major labels do. Currently, iTunes sells music from most sizable independent labels, but many smaller ones go first through a digital distributor.

“It’s not that easy, if you’re an artist on the street, to get your music on iTunes,” Mr. DeWolfe said. “With Snocap you can upload your music, sign the contract and do everything online.”

For each track it sells, MySpace will charge a band or label a fixed fee of around 45 cents, which it will share with Snocap, according to Snocap’s chief executive, Rusty Rueff.

The iTunes store keeps about 35 cents from each purchase, according to Mr. Card, because Apple is willing to accept low profits from selling music to generate demand for the profitable iPod. MySpace, which currently brings in most of its revenue through advertising, views music sales as another source of profit. Its music store will accept PayPal, rather than credit cards, because the transaction fees are lower.

Potential customers will be able to buy music directly from the pages that bands have set up. “That’s consistent with MySpace’s mission to build a direct relationship with the audience,” said Luke Wood, a talent development executive at Interscope Records, which has a distribution deal with MySpace Records, a music label started by the site. MySpace will also let users link to a band’s storefront from their personal pages to recommend their favorite acts, which could drive consumers to buy music they might not otherwise.

With sites like MySpace becoming an important venue for music promotion, the labels may need to weigh risk of online piracy against the potential reach of a MySpace store.

“I think that kind of distributed retail could be really significant as a model,” said Eric Garland, chief executive of BigChampagne, an online media measurement firm. “More and more, we’re exposed to media by other people. If I learn about music from you, I should be buying it from you. I shouldn’t have to scribble it down in a note for when I go to Tower Records.”

Major Labels Embrace Mobile Technology

The music industry, searching for ever-expanding ways to promote acts and generate new revenue streams, is getting increasingly creative in its use of mobile technology.

With ringtones now a well-established product, record labels are turning to mobile games and video.

Warner Music Group recently introduced its first mobile videogame on T-Mobile and Verizon Wireless. The car-racing game features the likeness, voice and music of hip-hop sensation T.I. The company says it is developing additional mobile games from multiple artists spanning all genres. Similarly, Hudson Entertainment, a mobile-content aggregator, has produced mobile games that feature the likeness and music of such acts as hip-hop group D12 and (most recently) the late Bob Marley.

Meanwhile, Capitol Records is supporting the debut album by Dave Navarro's new band the Panic Channel with a first-of-its-kind mobile-TV promotion in conjunction with Sprint and GoTV. For the next three months, GoTV will air free behind-the-scenes footage, exclusive interviews and performances of the band. They will be refreshed every two weeks.

Partner Retail Entertainment & Design, which produces the content, says it is preparing a similar mobile-TV push behind the debut solo album from Fergie of the Black Eyed Peas.

``It's becoming popular and sort of a cachet to have a mobile presence, and that extends outside of ringtones,'' Hudson Entertainment COO Mike Samachisa says.

Of course, there's more to it than just being cool. Mobile TV and games have the potential to become big business in the near future. According to research group Infonetics, the global market for mobile-video services is set to reach $5.6 billion by 2009, from $46.2 million this year -- an increase of nearly 12,000%. An Informa forecast pegs the more mature global mobile-gaming industry at $7.2 billion by 2010, up from the $2.4 billion expected this year.

Big Names Needed

To reach these numbers, the mobile industry is relying heavily on recognized entertainment brands to capture attention and encourage more traffic to these fledgling formats. One of the reasons ringtones are so successful is that people have a pretty good idea what they are buying from the beginning because of their familiarity with the original song. The same cannot be said of mobile games or video.

``The only thing you have to go on is a name, a very short description and the price,'' Samachisa says. Content featuring recognizable names gets more sales. ``It's like why you put an artist in a movie. It's because you're trying to connect his music audience to a new platform.''

Record labels are taking advantage of this and beginning to publish and distribute this content directly to wireless carriers themselves, similar to what they do with ringtones now.

Warner Music and Sony BMG have developed their own mobile-game publishing divisions, rather than licensing the rights to existing game developers. Universal Music Group partners with sister company Vivendi Universal Games for the same. Sony BMG has even started publishing nonmusic-related mobile games, such as one called ``The Shroud'' -- a sort of real-life treasure hunt that utilizes GPS technology but no direct music element.

Additionally, labels are amassing a flood of video content that they expect to make available via mobile phones in the near future, incorporating mobile as the third screen to their existing TV and Internet video strategy. Not just music videos, but live performances, interviews and other footage created specifically for mobile phones are in development.

The ultimate goal is to release mobile content in conjunction with an artist's new release, preferably beforehand to generate excitement, but this remains a difficult goal.

``That's obviously the ideal,'' says George White, Warner Music's senior VP of strategy and product development. ``Getting a game completed, tested and ready to launch is even more of a challenge than getting a new hip-hop record recorded, mastered and ready to launch. But that's clearly where we want to be headed.''

Particularly frustrating is the fact that this content must be optimized for multiple mobile phones, many of which require different content in different formats.

Development issues aside, there's also the challenge of drawing attention to this bevy of new content. Mobile TV and games combined do not generate a fraction of the traffic that ringtones do. The key, White says, is to direct fans who buy a ringtone to other mobile content by the same artist.

``We're really excited about cross-marketing between these categories, driving traffic from a ringtone promotion to a game,'' he says. ``That's one of the things we feel we can bring to the category and is a theme that we've been working with carriers to do.''

Sharp Expects Solar Power Costs To Halve By 2010
Georgina Prodhan

Japan's Sharp Corp., the world's biggest maker of solar cells, expects the cost of generating solar power to halve by 2010 and to be comparable with that of nuclear power by 2030, Sharp's president said.

"By the year 2010 we'll be able to halve generation costs," Katsuhiko Machida said on Thursday.

"By 2020 we expect a further reduction - half of 2010 - and by 2030 we expect half the 2020 level.

"By 2030 the cost will be comparable to electricity produced by a nuclear power plant," said Machida, speaking on the fringes of the IFA trade fair in Berlin, the world's biggest consumer electronics fair.

Asked how the costs were likely to compare with those for producing electricity from fossil fuels such as coal, Machida replied: "Fossil fuel resources will be totally out by then."

Solar electricity currently costs about US$0.50 ($0.78) per kilowatt hour to produce, more than eight times as much as that produced from fossil fuel.

The market is growing at a rate of more than 30 per cent per year but solar power still produces just a small fraction of one per cent of the world's energy.

The solar industry in general expects the cost of producing solar power to fall by about 5 per cent per year, on average.

Machida said he expected that a shortage of solar-grade silicon, the raw material from which solar panels that harness the sun's energy are made, would ease by 2008 as silicon makers step up production to catch up with soaring demand.

"In the first half of 2007, supply capacity will be increased, so once we go into 2008, supply will be catching up," he said.

Sharp has also been moving towards producing more so-called thin-film solar panels, which use less silicon but are less efficient than traditional solar panels.

Machida said the cost to produce solar energy from thin film was still around one-and-a-half times as high as making it from the normal, multicrystalline type.

"The mainstream will still be multicrystalline," Machida said, but he added that demand for thin-film would also continue to increase, for example, for specialist varieties such as see-through panels for window glass.

Machida said the sun could send enough energy to Earth in as little as an hour to provide for all the world's energy needs for one year.

"We're wasting a lot of energy," he said.
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Porn Movie Plus Tinny for $35
Patrick Gower

DVD pirates and drug pushers have joined forces to bring their punters a $35 porn movie and cannabis combo deal.

In a brazen marketing twist offered through cannabis tinny houses, they are also selling cannabis and a regular DVD movie for $30.

The Weekend Herald has learned that the Mongrel Mob and rival gang Black Power are offering the identical deal in their tinny houses in different parts of the North Island.

A cannabis "tinny" or bullet containing a small amount of the drug wrapped in tinfoil usually sells for $20.

Tony Eaton, executive director of the New Zealand Federation Against Copyright Theft, confirmed that its investigations had found evidence of the DVD-cannabis deals and said his group had told the police.

He said investigations led the federation to one of the gangs doing the deal in Auckland and separately to the other doing it in part of the lower North Island. Police were yet to execute warrants on the addresses.

Mr Eaton would not name the gangs, but the Weekend Herald understands they are the Mongrel Mob and Black Power.

"They are selling them [DVDs] part-and-parcel with cannabis through their tinny houses. They're doing combo deals.

"This is a big worry for us. These gangs are organised and all they are doing is putting another item down their distribution channels. Unfortunately, they are looking at us."

Tinny houses are one of the main methods of cannabis distribution to young people and police have previously voiced concern that other drugs such as methamphetamine, known as P, have been pushed through their established channels.

The federation, which is the Motion Picture Association's piracy watchdog in New Zealand, has 12 private investigators contracted to it and is running 50 separate investigations into commercial DVD piracy.

In another investigation, Mr Eaton said the federation would be laying a complaint against a Christchurch woman allegedly caught recording a movie trailer before the screening of the animated film Cars.

Hoyts Cinema staff contacted management and the woman, who was sitting with her family, was approached and her camcorder seized.

Mr Eaton said no one had been charged in New Zealand for recording screenings, but police were investigating a similar case in the South Island.

This week, the federation revealed it had sued 14 New Zealanders who among them sold more than 10,000 pirated DVDs on NZ websites, including Trade Me. Mr Eaton said they had shut down the distribution of pirated DVDs at flea markets and had taken down 1700 pirate DVD sellers from the Trade Me site.

"We've shut down the markets, and now we are casting our net wider."

Worldwide, the Motion Picture Association estimates piracy cost the film industry US$6.1 billion ($9.9 billion) in potential revenue last year.

Mr Eaton said some New Zealand dealers were making thousands of dollars a week through pirated DVDs and it was believed there were up to 30 operations in South Auckland alone.

Although all types were attracted to the trade, Mr Eaton, a former police officer, said links between organised crime and DVD piracy in New Zealand were strong.

He had heard from police officers who had raided gang houses and found piles of DVDs and not acted because they were unaware that charges under the Copyright Act carried a maximum penalty of five years.


9/11 Spawned Tech-Security Market
Brian Bergstein

During the Cold War, Canada's National Optics Institute developed a system to detect which type of enemy tank or fighter jet was approaching. After the Soviet Union's demise, such threats were deemed less likely, and the technology sat on the shelf.

Until 2003, when entrepreneur Eric Bergeron toured the institute with Sept. 11 on his mind.

"The flash I had was that we no longer look for Russian planes in the sky, but we do look for bad things in luggage," Bergeron said.

The X-ray analysis company that emerged, Quebec-based Optosecurity Inc., is only on the verge of putting its devices in real-life checkpoints. But its hopes are emblematic of the massive homeland security technology industry spawned by Sept. 11.

Contrary to the promises from technologists that began almost immediately after the attacks, these five years have seen few dramatic security improvements. But the market remains a source of riches - real for some companies, still largely dreamed-of for others - primed with billions of dollars from the U.S. and international governments.

Spending on domestic security across all U.S. federal agencies is expected to reach $58 billion in fiscal 2007 - up from $16.8 billion in 2001, according to the Office of Management and Budget. States and cities are annually contributing $20 billion to $30 billion more, Gartner Inc. Vice President T. Jeff Vining estimates.

Much of it lands with large defense contractors and systems integrators with long government ties and the heft to tackle huge projects. For example, Unisys Corp. got a $1 billion contract to set up computers, cell phones, Web sites and other network technology for airport security staff. BearingPoint Inc. won a $104 million deal in August to provide secure identification cards to federal employees and contractors.

Still, a lot of no-names are angling for a piece. Even a tiny slice could be revolutionary for them.

When Salient Stills Inc. was spun out of the Massachusetts Institute of Technology, founder Laura Teodosio figured its software - which enhances the quality of frames captured from video, making them clearer to publish or analyze - would find its biggest success with media companies.

But after Sept. 11, the FBI became a user, and Salient Stills' customer focus shifted to law enforcement.

Today, revenue is less than $5 million, but it has increased every year. Teodosio credits the explosion in surveillance footage being captured by authorities and by regular people.

Optosecurity is at an earlier stage, having gotten only initial funding for upcoming trial deployments of its gear at North American airports.

Using the optical-recognition technology licensed from the Canadian institute, Optosecurity's devices attach to existing X-ray machines and are programmed to automatically spot weapons or their components. (Optosecurity will not say how many items it can recognize.)

"There is not a lot of money that has trickled down to startups," Bergeron conceded. "But the problem is that now (government customers) are running out of innovation. If you look at the checkpoint now, it is the same as the checkpoint 10 years ago, and the checkpoint 20 years ago."

Some measure of technology's limited impact since Sept. 11 can be gleaned from the Department of Homeland Security's budget request for 2007.

DHS cited 25 "key accomplishments" in the three years since it corralled 22 federal agencies, but most of the victories surrounded organizational changes or improved use of resources.

Only three items linked technology to better Sept. 11-style safety. One celebrated the rise of a data-sharing network that routes secret information among 56 federal sites.

The other two related to a single program, US-VISIT, which incorporates biometrics and machine-readable passports to tighten border control. DHS touted this about the program: Of the 44 million foreign visitors it had processed, US-VISIT had detected 950 people with criminal histories or immigration violations.

Requests for future technology initiatives, meanwhile, were more numerous. For example, DHS sought $692 million for explosive detection devices, $157 million for radiation monitors and $5 million to upgrade the satellite capabilities of the emergency alert system.

"The themes around much of the successes involving technology have been relatively basic at this point," said Greg Baroni, who heads the federal business for Unisys. "I see this as an emerging market. The large, advanced, state-of-the-art technologies are still being explored."

Even this basic phase has been pivotal for Unisys. Before Sept. 11, Unisys' federal business was so weak that the company was trying to sell it. Now the unit has doubled to nearly $1 billion a year, about $400 million of which comes from homeland security contracts. The group had 1,200 employees in 2001, but now has nearly 4,000.

Helena Wisniewski has worked in homeland security from multiple angles: At the CIA, the Pentagon's Defense Advanced Research Projects Agency, defense contractors and a biometrics company she founded. Now an administrator at the Stevens Institute of Technology, Wisniewski says innovations in the post-Sept. 11 tech market have been limited because of the pressures to get basic technologies in place quickly.

That environment also shoehorned some ideas into places they didn't work. Witness the rush to use facial-recognition biometrics to scan crowds for evildoers, even though the access-control technology was built for settings where people present themselves one at a time under good lighting.

"It's very difficult in a lot of circumstances to reduce a technology to practice in six months," she said. "We haven't really organized to sit back and look at an effective strategy for the longer term. I think we need an overall strategy, not just tactical solutions."

Gartner's Vining says the most successful security technologies so far have been improved communications systems and networks for information sharing. Police and intelligence agents have also benefited from new data-mining programs, he believes.

Several analysts expect the next wave to make more use of chemical, biological and radiological sensors, which figure to play a role in a $2 billion border security contract to be awarded shortly. Boeing Co., Lockheed Martin Corp., Northrop Grumman Corp., LM Ericsson and Raytheon Co. are seeking prime-contractor status on the deal.

Brian Ruttenbur, homeland security analyst for Morgan Keegan & Co., is also watching companies that help analyze intercepted communications and those that manage video surveillance.

Of course, even as technologies improve, none is likely to end the post-Sept. 11 era of hyper vigilance.

"We can't catch everything," Ruttenbur said. "I don't know of any single technology that can be right 100 percent of the time."

Study Finds Sharp Drop in the Number of Terrorism Cases Prosecuted
Eric Lichtblau

The number of terrorism cases brought by the Justice Department, which surged in the aftermath of the Sept. 11 terrorist attacks, has dropped sharply since 2002, and prosecutors are turning down hundreds of cases because of weak evidence and other legal problems, according to a study released Sunday.

The study, conducted by a private research group at Syracuse University, found that federal prosecutors have declined to prosecute two of every three international terrorism cases brought to them by the Federal Bureau of Investigation and other agencies since 2001.

The rejection rate was even higher for the first eight months of the current fiscal year, with 91 percent of the referred cases turned down for prosecution, the research group said. Among the most frequent explanations cited by prosecutors, the study found, were a lack of evidence of criminal intent by the suspect and “weak or insufficient” evidence.

The numbers brought differing interpretations from legal analysts, prosecutors and government officials, many of whom said they were surprised by the findings, and are likely to add to the debate over the administration’s legal tactics in prosecuting the fight against terrorism. The Justice Department immediately took issue with the study’s methodology and its conclusions.

The study “ignores the reality of how the war on terrorism is prosecuted in federal courts across the country and the value of early disruption of potential terrorist acts by proactive prosecution,” said Bryan Sierra, a Justice Department spokesman.

“The report presents misleading analysis of Department of Justice statistics to suggest the threat of terrorism may be inaccurate or exaggerated,” Mr. Sierra added. “The Department of Justice disagrees with this suggestion completely.”

Department officials declined to discuss any details of what they considered the flawed methodology.

Since the Sept. 11 attacks, the Bush administration has pursued a strategy of investigating and prosecuting terrorism suspects within the United States to “pre-empt” attacks, rather than waiting for them to unfold.

The strategy, which administration officials say helps explain the absence of any further attacks on American soil, has been seen in cases like the arrests of seven men in Miami in June in a plot that the F.B.I. said was “more aspirational than operational.”

The approach has led critics of the Bush administration to say that prosecutors are routinely bringing terrorism charges in cases that do not warrant them. But the data from the Syracuse group suggests that for every prosecution like the one in Miami, there are many other investigations that never become public because prosecutors conclude there is not enough evidence to take them to court.

The F.B.I. and other federal agencies bring what are known as referrals in cases in which the investigating agency recommends that federal charges be considered, often after investigations lasting months or years.

In 2001 and 2002, the Syracuse study found, federal prosecutors turned down only about 35 percent of the referrals brought to them in international terrorism cases. But that rate has climbed sharply over the last four years, with rejection rates of 77 percent in 2003, 65 percent in 2004, 82 percent last year and the 91 percent this year.

Last year, the Justice Department prosecuted 46 international terrorism cases — down from 355 in 2002 in the spike that followed the Sept. 11 attacks — but it declined to bring charges in 209 cases the F.B.I. or other agencies had referred, the study found.

The statistics “raise profound questions about how well the government is doing in dealing with this very difficult problem of terrorism,” said David Burnham, co-director of the Transactional Records Access Clearinghouse at Syracuse University, which conducted the study by obtaining hundreds of thousands of records through a lawsuit brought under the Freedom of Information Act.

“It is clear that the prosecutors are deciding that a lot of the investigations being recommended do not cut the mustard and do not meet their standards,’’ Mr. Burnham said.

In all, the study found that in nearly 6,500 cases treated by the Justice Department as “terrorism” investigations since the Sept. 11 attacks, about one in five defendants have now been convicted. The median sentence for those convicted in what were categorized as “international terrorism” cases — often involving lesser charges like immigration violations or fraud — was 20 to 28 days, and many received no jail time at all, the study found.

The Justice Department, which has tightened the way it defines terrorism cases over the last five years, cites a much higher rate of success. Examining only those cases in which someone was actually charged, it said in a report in June that it had secured convictions or guilty pleas against 261 of the 441 defendants accused in connection with terrorism since the Sept. 11 attacks.

Brian Levin, an associate professor at California State University, San Bernardino, who studies terrorism prosecutions, said the numbers clearly reflected the government’s efforts to swiftly halt any possible plot, including many that might prove unfounded.

“The data suggests that if there’s a whiff of suspicion, they will come down in any way possible against a suspect and sort the evidence out later,” Mr. Levin said. “They’re obviously casting a broad net but throwing a lot back into the sea.”

A federal terrorism prosecutor agreed with that assessment. “You have to chase dead ends a lot of times — it’s inherent in this business,” said the prosecutor, who spoke on condition of anonymity because he was not authorized to discuss the issue.

Moreover, in smaller-scale cases like identity theft or immigration fraud that may have some nexus to terrorism, the government may not have the time or resources to fully pursue a case, leading prosecutors to reject the filing of charges.

“The F.B.I.’s looking for bomb throwers,” the prosecutor said, “and we have a lot of small cases that there are no resources devoted to.”

Bush Admits CIA Has Held Terror Suspects
Steve Holland and Will Dunham

President George W. Bush acknowledged on Wednesday the CIA has run a secret detention program for terrorism suspects overseas and said 14 of those held have been transferred to the U.S. military prison at Guantanamo Bay.

With human rights organizations suspicious about a program that has remained in the shadows, Bush strongly defended the detention and questioning of terrorism suspects through this method and said the CIA treats them humanely and does not torture.

"Were it not for this program, our intelligence community believes that al Qaeda and its allies would have succeeded in launching another attack against the American homeland. By giving us information about terrorist plans we could not get anywhere else, this program has saved innocent lives," Bush said in a White House speech nearly five years after the September 11 attacks.

Bush announced that the 14 suspects held by the CIA have been transferred to Guantanamo Bay for prosecution by military commissions he hopes the U.S. Congress will establish.

His administration has been forced to come up with a new method to try foreign terrorist suspects after the Supreme Court in June rejected the military tribunal system set up by Washington to try Guantanamo prisoners, most of whom were captured in Afghanistan.

Among the 14, Bush said, are the alleged mastermind of the September 11 attacks, Khalid Sheik Mohammed and two other al Qaeda leaders, Ramzi Binalshibh and Abu Zubaydah.

"As soon as Congress acts to authorize the military commissions I have proposed, the men our intelligence officials believe orchestrated the deaths of nearly 3,000 Americans on September 11, 2001, can face justice," Bush said.

Secret Prisons

Senior administration officials said the CIA has held less than 100 suspects and after the transfer of the last 14 to Pentagon custody, the agency currently holds none.

Bush would not say where the CIA secret prisons have been located overseas but there have been reports of such facilities in Eastern Europe. The revelation of the secret prisons by The Washington Post last year sparked outrage among many European countries.

The United Nations committee against torture in May called on the United States to close any secret prisons abroad, but the senior administration officials said the program was essential and would remain open.

Bush's current focus on terrorism comes not only as the September 11 anniversary approaches but also as his Republican Party faces stiff challenges in the midterm elections in two months.

Facing a potential rebellion on Capitol Hill from some in his own party over the effort to create new tribunals, Bush said he would submit proposed legislation on Wednesday on how he believes the commissions should be set up.

Senate Armed Services Committee Chairman John Warner, a Virginia Republican, said on Tuesday he and Republican Sens. John McCain of Arizona and Lindsey Graham of South Carolina were circulating their version of the legislation.

Their bill adheres more to military court martial procedures, and Warner's spokesman, John Ullyot, said there were "some sticking points with the administration" on it.

McCain said lawmakers had not see the specifics of Bush's legislation but had been briefed on it. "We do have some differences which we are in discussions about and I do believe we can work those out."

Bush said his bill would insist that terrorism suspects cannot use Geneva Convention protections to file lawsuits against U.S. personnel in U.S. courts.

Bush said passing the legislation "ought to be the top priority" of Congress's abbreviated election-year schedule in coming weeks.

(Additional reporting by Tabassum Zakaria, Matt Spetalnick and Vicki Allen)

Kids Buy Lunches With Scans Of Fingers

The never-ending march of technology now means school children here can pay for their cafeteria sloppy joes with their fingers.

Rome City Schools is switching to a scanning system that lets students use their fingerprints to access their accounts. In the past, students had to punch in their pin numbers.

"The finger's better because all you've got to do is put your finger in, and you don't have to do the number and get mixed up," said Adrianna Harris, a second grader at Anna K. Davie Elementary School.

The new system speeds lunch lines, said city administrators. It's being phased in to Rome High School, Rome Middle School and all the city's elementary schools. The city hopes to have the system in use next month system-wide.

Some parents are uneasy with having their children's fingerprints scanned, and wonder about how well the information is secured.

"It may be perfectly secure, but my daughter is a minor and I understand that supposedly the kids have the option to not have their prints scanned, but that's not being articulated to my daughter," said Hal Storey, who's daughter is a 10th grader at Rome High.

HP Sought Director Records in Leak Probe

Investigators for Hewlett-Packard Co. sought private telephone records of board members while hunting for leaks to the media of confidential company information, the computer maker said in a regulatory filing Wednesday.

The company also disclosed that outside lawyers it hired to review the matter could not determine if the probe "complied in all respects with applicable law." And it said the state attorney general in California is examining techniques used in the investigation. HP said it would cooperate with the state probe.

The company made the disclosures in a Securities and Exchange Commission filing notifying investors that its board will refuse to nominate one director, George A. Keyworth II, for re-election because it determined he was a source of the leaks.

HP said outside legal counsel met with the company's directors early last year to try to determine how details of board meetings were continuously being leaked to the media without company approval. The meetings did not reveal the source of the leaks and the leaks continued.

Further investigation revealed that Keyworth was the source of the information, the company said. Keyworth was asked to resign on May 18 but refused, the HP filing said. HP said it won't nominate Keyworth for another term on the board.

Another director, Thomas J. Perkins, abruptly left the company on May 18, citing personal frustration with chairman's handling of the matter, the filing states. The chairman is not named in the SEC document, but Patricia Dunn, 52, who has been on the board for eight years, was chairman at the time.

In June, Perkins requested information from HP regarding the probe and said he consulted legal counsel regarding concerns over phone and e-mail communication that may have been improperly recorded. HP said no recording or eavesdropping had occurred. But pretexting for phone records, a method used by investigators to gather information by disguising their identity, was used, according to the filing.

Perkins asked that an investigation into the techniques requested that HP conduct an inquiry into the propriety of the investigation.

A high-ranking HP committee then hired an outside counsel to look into the matter. The counsel advised the company that the use of pretexting at the time "was not generally unlawful" but couldn't confirm that the techniques employed by the private investigator were completely legal.

Based upon its investigation, Hewlett-Packard said its nominating and governance committee has recommended that controls relating to investigations be strengthened and that management should be in a position to assure that all aspects of company probes comply with applicable laws and HP's code of ethics.

SEC corporate finance staff also is currently looking into whether or not HP properly disclosed circumstances surrounding Perkins' departure. At the time of Perkins' resignation, the company didn't file a 502-b form with the SEC, which would have indicated Perkins' leaving was related to an internal disagreement.

Hewlett-Packard shares fell 50 cents, or 1.4 percent, to $35.95 in early trading Wednesday on the New York Stock Exchange.

HP Director to be Pushed Out
Rachel Konrad

Hewlett-Packard Co.'s board will file a statement with the Securities and Exchange Commission, notifying investors that the computer maker's board will refuse to nominate one director for re-election because he leaked confidential information to the media.

HP board member George Keyworth, a physicist who served as science adviser to President Reagan from 1981 to 1986, will end his service on the HP board no later than March 2007, HP spokesman Ryan Donovan said.

"We believe that persons at all levels within the company - directors, officers and employees - must be held accountable and have the highest personal integrity," Donovan said Tuesday. "We've changed the culture of this company to one that's driven by accountability and meeting the needs of the customer. These changes have been painful, but we believe they're the right thing to do."

Keyworth's departure comes after a January article on CNET Inc.'s News.com, which included a quotation from an anonymous HP source who described a gathering of HP directors at a posh spa in Indian Wells. The source's comment wasn't inflammatory and didn't contain information about future products or restructuring plans.

"By the time the lectures were done at 10 p.m., we were pooped and went to bed," the source told News.com.

Nonetheless, the statement angered HP Chairwoman Patricia Dunn, 52, who has been on the board for eight years.

The non-executive chairwoman of the 11th largest company on the Fortune 500 oversaw the ouster of former HP CEO Carly Fiorina in February 2005 and the hiring of Mark Hurd as her successor - both high-profile moves that also were leaked to the media. Dunn, CEO of Barclays Global Investors from 1995 to 2002, has been on the HP board since 1998 and was elected chairwoman in February 2005.

Dunn oversaw an extensive investigation of leaks and, at a board meeting May 18, identified Keyworth as the source in the News.com article as well as other leaks dating back to early 2005. The board asked Keyworth, 66, to resign, but the former neutron physicist at New Mexico's Los Alamos National Laboratory refused to leave.

The investigation and attempted ouster of Keyworth riled another HP board member, Silicon Valley venture capitalist Tom Perkins, 74, a friend of Keyworth who immediately resigned and stormed out of the May meeting.

HP would not provide details of the investigation, but Donovan said the SEC filing on Wednesday would include a timeline and other information about the probe.

Within days of Perkins' departure, HP submitted a 502(a) filing to the SEC, standard practice when a board member resigns for relatively innocuous reasons. HP did not file a 502(b), required when a board member resigns because of a disagreement with the company.

In the months after his resignation, Perkins - co-founder of blue chip venture firm Kleiner Perkins Caufield & Byers - complained to other executives and to journalists about the investigation's potential ethical problems. He decried it as an invasion of privacy, noting that the investigation got details of phone calls to and from board members' homes.

Hewlett-Packard Spied on Writers in Leaks
Damon Darlin

The California attorney general’s investigation into the purloining of private phone records by agents of Hewlett-Packard has revealed that the monitoring effort began earlier than previously indicated and included journalists as targets.

The targets included nine journalists who have covered Hewlett-Packard, including one from The New York Times, the company said.

The company said this week that its board had hired private investigators to identify directors leaking information to the press and that those investigators had posed as board members — a technique known as pretexting — to gain access to their personal phone records.

In acknowledging Thursday that journalists’ records had also been obtained, the company said it was apologizing to each one. “H.P. is dismayed that the phone records of journalists were accessed without their knowledge,” a company spokesman, Michael Moeller, said.

In an interview Thursday about the state’s criminal investigation of the Hewlett-Packard matter, Attorney General Bill Lockyer said, “A crime was committed.” But he added: “It is unclear how strong the case is. Who is charged and for what is still an open question.”

Mr. Lockyer said search warrants would be issued to obtain the records of Internet service providers in an attempt to trace the identities of the imposters. He said Hewlett-Packard was cooperating with the investigation into what he said was the first California case of a major corporation using such methods to obtain phone records.

An investigator with direct knowledge of the state’s inquiry characterized the list of targets as “extensive,” though that person would not elaborate. It could contain people other than journalists or directors.

Travis Dodd, general attorney with AT&T Services in San Antonio, who is working with the California prosecutors, said the records of John Markoff, a reporter for The Times in San Francisco, were a “target of the pretexting” in 2005.

Two other news organizations, the online technology news service CNET and The Wall Street Journal, said they had learned that their reporters had also been targets.

A top Hewlett-Packard official indicated earlier this week that the effort to obtain phone records had begun in January 2006 after an article appeared on CNET with accounts of a Hewlett-Packard management meeting. Those revelations prompted H.P.’s chairwoman, Patricia C. Dunn, to order an investigation of leaks, and the company has conceded that subterfuge was used by a subcontractor to gain phone records in the investigation.

Hewlett-Packard has refused to publicly disclose the names of the consulting firm it hired or the subcontractor that was used to pretext the records. The company has said that the outside consulting firm was instructed to conduct its investigation according to law and that the firm had told H.P. that its techniques were legal.

In May, that investigation identified the board’s longest-serving member, George A. Keyworth II, as the source of the leak. He rebuffed a request to resign, but the company said he would not be renominated. Thomas J. Perkins, another board member, resigned in anger over the way the investigation was conducted. His efforts to get the company to acknowledge the reason for his departure led to this week’s disclosures.

There had been earlier concerns at the company about leaks around the time of Carleton S. Fiorina’s dismissal as chief executive in early 2005. An investigation at that time, however, was only known to have involved interviews of board members.

Viet D. Dinh, Mr. Perkins’s lawyer, said Thursday, “If it is true that the pretexting started before January 2006 and dated back to 2005, it would suggest a deeper and more troubling chain of events than the hiring of third-party pretexters and would reach much higher to persons responsible at H.P.”

By Mr. Perkins’s account, only the law firm of Wilson Sonsini Goodrich & Rosati, a powerful Silicon Valley law firm and outside counsel for Hewlett-Packard, conducted investigations into leaks in 2005.

A spokeswoman for the law firm, Courtney Dorman, said the firm “absolutely, definitely did not” use pretexting or hire anyone who did pretexting during the firm’s informal investigation of directors in 2005.

Mr. Moeller said Thursday that the company’s statements about the pretexting had never confined those events to 2006.

A lawyer for The New York Times, David McCraw, said on Thursday evening, “We are deeply concerned by reports that the rights of one of our reporters were violated.”

“To the extent that this is a criminal matter, we will cooperate with authorities to make sure any wrongdoing is prosecuted,” he said. “To the extent it is a civil matter, we will pursue whatever legal recourse is available. We expect as an initial step that H.P. will make a prompt and full disclosure of what took place in regards to our reporter.”

CNET said Thursday that phone records of two of its reporters, Dawn Kawamoto and Tom Krazit, had also been obtained. It said access to Ms. Kawamoto's records had been gained from the same Internet address used by the person who accessed the phone records of Mr. Perkins. A caller used the last four digits of her husband's Social Security number to establish an online account with AT&T to view the records. Access was gained on one date, in late January 2006, it said.

A CNET spokeswoman, Sarah Cain, said: "These actions not only violated the privacy rights of our employee, but also the rights of all reporters to protect their confidential sources."

An article in The Wall Street Journal said records of its reporter, Pui-Wing Tam, had also been a target of pretexting activity. A spokesman for Dow Jones, owner of The Wall Street Journal, declined to comment.

Investor reaction to the Hewlett-Packard board furor has been muted. The company’s stock closed Thursday at $35.42, down 2.85 percent from its close before news of the board’s turmoil was reported. Indeed, at a Citigroup investor conference where Mark V. Hurd, the chief executive, spoke and answered questions Wednesday, no securities analyst asked about the problems.

H.P. Chairwoman Aims Not to Be the Scapegoat
Damon Darlin

Patricia C. Dunn, Hewlett-Packard’s chairwoman, was known as a remarkable saleswoman as she rose to the top of the financial industry.

But on Sunday, she will have to sell her board on the idea that she should not be dumped as the scapegoat for the scandal rocking the company. While the agenda item is how the company handled an investigation of its own directors — and the possibly illegal techniques used to obtain their private phone records — the underlying theme is whether she should remain.

In a telephone interview Friday, Ms. Dunn moved to address some of the questions raised in the furor, defending her efforts to stop news leaks from the company’s boardroom while conceding that the methods had been “sloppy.”

Emphasizing that her actions had been taken with the board’s knowledge and approval, she said: “The chairman is not a unilateral power position. I am a servant to the board.”

While acknowledging calls from outside the company for her resignation, she said the criticism was unfair. “I fully intend to remain in these positions unless asked to vacate them by the board,” she said. “If they do ask me, I will step down.” But she is not lobbying or polling members. “This is not a job I asked for or a job that I particularly wanted,” she said.

Ms. Dunn, the former head of Barclays Global Investors, joined the Hewlett-Packard board in 1998 and took over as chairwoman after the ouster of Carleton S. Fiorina as chairwoman and chief executive early last year. Ms. Fiorina’s removal, after a hard-fought proxy battle over H. P.’s merger with Compaq Computer, supposedly brought an end to a fitful period for the board.

But while the business rebounded, boardroom tensions persisted, fueled by news leaks from within. The company ultimately hired private investigators to identify directors who disclosed information to the news media and those investigators posed as board members — a practice known as pretexting — to gain access to their personal phone records.

Those tactics have led to a criminal investigation by state prosecutors. “A crime was committed,” the California attorney general, Bill Lockyer, said Thursday, though “who is charged and for what is still an open question.”

The revelations emerged this week, set in motion by a former board member and pre-eminent Silicon Valley venture capitalist, Thomas J. Perkins, who resigned in anger over the investigation in May and then pressed the company to acknowledge his reasons for leaving.

Ms. Dunn said Friday that she felt that a personal dispute was at the center of the storm. “Tom is a powerful man with friends in powerful places,” she said. “This brouhaha is the result of his anger toward me. He is winning the p.r. war.”

“He was the most hawkish member of the board for finding the leaker,” she added. “He wanted us to bring in lie detectors.”

She said Mr. Perkins was initially upset with her because she revealed the name of the leaker to the full board rather than handling it quietly in private. “He wanted me to handle this behind closed doors, without even revealing the name of the leaker,” she said. “I could never agree to that.”

Mr. Perkins could not be reached for comment Friday, but his lawyer, Viet D. Dinh, a Georgetown University law professor, said, “When red flags go up, that’s when boards should ask questions.”

Ms. Dunn said an initial investigation of news leaks from the board began in April or May 2005. She said she had turned to the head of corporate security to handle it, since that person also handles investigations of misconduct by employees, including unauthorized leaks to the press. “The more gentlemanly methods that were used in the past didn’t work,” she said.

She said she was not able to supervise the investigation because, as a member of the board, she was herself a potential target.

The investigation faced another problem. Not only could the board not supervise it, but the company employees handling it were in the difficult position of investigating their bosses. So they turned it over to an outside consulting firm that H. P. still refuses to identify; that firm, in turn, gave the investigation over to a firm that used the pretexting techniques.

It is not clear how the inquiry was supervised, though the company said the outside consultants were told to follow “applicable law.”

But Ms. Dunn said Friday that “it looks like there was sloppy work along the way.”

The second investigation, in January 2006, was run by the office of H. P.’s general counsel, Ann Baskins. It also involved outside investigators, Ms. Dunn said, and private records were viewed in both investigations.

She said that the company investigated 10 leaks and that evidence in 7 of them pointed to George A. Keyworth II, who was asked to resign at a board meeting in May. He refused, but the company said this week that it would not nominate him for re-election.
Ms. Dunn said they never determined the source of the three other leaks. “Our board is happy to know that the leaker is caught,” she said. She said the leaks had been “longterm, persistent and intractable” with potential for ruining trust among board members. She termed the attempt to stop the leaks a “noble cause.”

She said that no one on the board “endorsed, understood or approved” of pretexting and that the company was putting new guidelines in place to prevent such practices in future investigations. “It wasn’t implemented well,” she said. “But I had no choice but to follow this violation. It fell to me to do it.”

Ms. Dunn, the daughter of a vaudeville actor and a Las Vegas showgirl, has generally avoided the limelight. She declined repeated requests for interviews until Friday.

With Hewlett-Packard’s board preparing to meet Sunday by telephone, Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, says Ms. Dunn may not have her job for long.

“I think it is going to be very hard for her to stay,” he said Friday. “This was a mess created in the boardroom itself and someone has to be ultimately responsible.”

The prospect of being investigated, he said, affects directors’ abilities to seek out information independent of management and makes it less likely others will come forward. “An investigation like that emasculates the board,” Mr. Elson said.

But Jeffrey A. Sonnenfeld, a professor at the Yale School of Management who has studied corporate governance, said that Ms. Dunn should not be blamed for the errors of the investigation and that she deserved credit for acting against boardroom cronyism by unmasking the leaker.

Were the board to act now to dismiss her, Mr. Sonnenfeld said, “It is showing nothing but cowardice.”

Ms. Dunn said she would write notes of apology to nine reporters whose records were also obtained through subterfuge by the investigators. She is also calling influential people involved in corporate governance for advice.

Nell Minow, co-founder of the Corporate Library, a corporate governance service company, said Ms. Dunn had told her that she had constantly consulted counsel and that she wanted it to be done legally.

“This is corporate America’s Star Jones situation,” said Ms. Minow, referring to the gossip that surrounded the firing of a member of the television program “The View,” which was portrayed as an amicable parting. “On the one hand you want to preserve everyone’s reputation and play nice, but on the other hand, there is a scorched-earth impulse here.”

Investors have seemed unfazed. Shares of H. P. closed at $36.17, up 2 percent, recovering nearly all of its losses since the disclosures began late Tuesday.

On Friday afternoon, the company’s chief executive, Mark V. Hurd, tried to raise the morale of employees through a videotaped and e-mail message. “Clearly things have happened here that are unacceptable,” he said. “Building a successful company means we will have our ups and downs, and issues will come up. We are dealing with an issue now. I am resolved that we will work through this and take the necessary action.”

Julie Creswell and Eric Dash contributed reporting from New York.

Intel Corp. to Cut 10,500 Jobs
Jordan Robertson

Shares of Intel Corp. fell in after-hours trading after the world's largest chip maker announced sweeping job cuts that some investors believed were not severe enough.

Intel shares fell 26 cents to $19.73 in after-hours trading Tuesday. Before the announcement, shares of Intel rose 11 cents to close at $19.99 Tuesday on the Nasdaq Stock Market.

Intel said Tuesday it will eliminate 10,500 jobs - about 10 percent of its work force - through layoffs, attrition and the sale of underperforming business groups as part of a massive restructuring.

The Santa Clara-based company said most of the job cuts this year will come from its management, marketing and information technology ranks, and will expand in 2007 to include manufacturing, design and other segments.

The cuts are expected to save the company $3 billion per year by 2008. Severance costs are expected to total $200 million.

Intel is fighting to reverse sinking profits and make it more efficient as it seeks to regain market share stolen by smaller rival Advanced Micro Devices Inc.

"These actions, while difficult, are essential to Intel becoming a more agile and efficient company, not just for this year or the next, but for years to come," Chief Executive Paul Otellini said in a statement.

About 5,000 of the affected positions have already been cut or will be eliminated this year through a previously announced management layoff, the pending sale of two businesses, and attrition, said Intel spokesman Chuck Mulloy.

The company plans to cut about 2,500 more jobs by the end of the year. The remainder will be shed in 2007, when Intel's head count will settle around 92,000, Mulloy said.

Many analysts and investors were expecting higher job cuts and a better-defined strategy for dealing with problem business units, said Nathan Brookwood, analyst with research firm Insight 64.

"This is not nearly as deep or as broad a cut as many had anticipated," he said. "They aren't talking about cutting back any substantial programs. They're saying, 'We can still do everything we were planning to do, but now we can do it with fewer people.' And I'm not certain that's a workable plan."

Intel has been under intense pressure to unload money-losing divisions and halt the encroachment of AMD on its lucrative core business making the microprocessors that act as the brains of computers.

Intel has been steadily losing profits and market share. Analysts have criticized it for reacting too slowly after AMD's 2003 launch of the critically acclaimed Opteron and Athlon 64 chips for servers and desktop PCs.

Speculation about massive job cuts has been rampant since Otellini announced in April the company was planning a broad overhaul targeting money-losing business groups in every aspect of its operations.

Intel, which had about 103,000 employees worldwide at the time, vowed to cut $1 billion in spending. It also launched the review of its business units.

The latest cuts come after three months of streamlining.

In June, the company said it planned to shed 1,400 jobs by selling a money-losing division that makes chips for cell phones and other handheld devices to Marvell Technology Group Ltd., which said it would absorb most of the workers in the $600 million deal.

The next month, Intel slashed 1,000 management jobs to reduce layers between top executives and supervisors. Five top executives were also reassigned to new positions, which the company said would simplify management and reduce the number of senior managers reporting to Otellini by two.

And earlier this month, Intel said it was selling its media and signaling business, which makes telecommunications motherboards and software. About 600 employees were expected to be acquired by the buyer, Eicon Networks Corp., which bought the business for an undisclosed sum.

Otellini said the current restructuring will be as expansive as the company's transformation in the mid-1980s, when it exited a business it helped create - making dynamic random access memory chips widely used to store information in computers - to focus on microprocessors.

That shift prompted one of Intel's largest rounds of layoffs ever, with the company eliminating more than 7,000 jobs, about 30 percent of its work force at the time.

Since then, Intel has avoided large-scale layoffs. But the dot-com crash did prompt the elimination of about 11,000 jobs - largely through attrition and buyouts - in less than two years.

Eric Ross, analyst with ThinkEquity Partners, said the estimated $3 billion savings from the cuts was higher than expected, and could help the company reverse its fortunes.

"They're going to lose a lot of share, the PC environment is tough, and they're bloated," he said. "But if they can cut costs enough, we're going to see a different company."

Shirt is Bush to a T

A US student who sued school officials after he was made to censor his T-shirt that labelled President George W. Bush "Chicken-Hawk-In-Chief" and a former alcohol and cocaine abuser won an appeal yesterday to wear the T-shirt to school.

Zachery Guiles claimed his free speech rights had been violated when school officials made him put duct tape over parts of his T-shirt that showed a Bush image surrounded by cocaine, a razor blade, a straw and a martini.

In 2004 Guiles wore the shirt to school in Vermont once a week for two months.

New Web Sites Seeking Profit in Wiki Model
Robert Levine

Every day, millions of people find answers on Wikipedia to questions both trivial and serious. Jack Herrick found his business model there.

In 2004, Mr. Herrick acquired the how-to guide eHow.com, which featured articles written by paid freelance writers. Although the business made a profit, he realized that the revenue brought in by selling advertising would not support the extensive site he had in mind. “If the page were about how to get a mortgage, it would work,” he said. “But the idea was to be the how-to guide to everything.”

So in January 2005 he started wikiHow, a how-to guide built on the same open-source software as Wikipedia, which lets anyone write and edit entries in a collaborative system. To his surprise he found that many of the entries generated by Internet users — free — were more informative than those written by freelancers.

“Wikipedia proved you could get there with another method,” Mr. Herrick said. Several months ago he sold eHow to focus on the new site, which now has 10,000 entries in English, Spanish and German.

Mr. Herrick is hardly the only entrepreneur inspired by the efficiency and low cost of what has become known as the wiki model. Although Wikipedia is operated by a nonprofit foundation, ideas for advertising-based wiki sites are beginning to take their place alongside blogs and social networking sites as a staple of Silicon Valley business plans.

In addition to Wikia, a site devoted to topics judged too esoteric for the online encyclopedia, there is ShopWiki, for product reviews, and Wikitravel, for tourism advice. Several start-ups allow users to operate their own wiki sites.

“Wikipedia is an encyclopedia and this is about the other 999,000 books in the library,” said Ben Elowitz, chief executive of Wetpaint, a start-your-own wiki site.

Others wonder how big that library can get. All of the companies making consumer-oriented wikis are privately held and do not release revenue figures. But so far not one of them has come close to the popularity of Wikipedia, according to Nielsen/NetRatings. WikiHow had 1.1 million visitors in July, Wikia had just over 270,000, and several other wiki sites had too small an audience to be measured by the Nielsen/NetRatings methodology.

Andrew Frank, a research director at the Gartner Group, a technology consulting firm, said that all of this interest in wikis might rest on some naïve assumptions.

“The assertion that these sites are cheap to run is questionable,” he said. For example, to sell a substantial amount of advertising, wiki sites might have to filter for objectionable content. And he says he believes that ads on wikis could be worth less per impression than those on sites that aim at a more specific audience.

“I think there’s going to be a lot of wikis,” Mr. Herrick said. “But I’m not sure how many of them will make money. “

Others are more optimistic. Last month John Gotts, an entrepreneur known for buying the rights to domain names, agreed to buy the site Wiki.com for $2.86 million.

“I would never have paid this much for any other domain,” Mr. Gotts said. “I can’t think of one that would be worth more.” He pointed out that the site Wiki.com drew traffic before he bought it, even though it had little content.

The wiki concept was invented in 1994 by Ward Cunningham, a computer scientist who created a program called WikiWikiWeb as a way to share programming techniques. He named his creation after the Hawaiian word for fast.

“The subject I had in mind was the knowledge necessary to write good computer code,” Mr. Cunningham said, “but I realized it would have broader implications. It’s a medium that allows people to collaborate more easily than they could in systems that are modeled after the precomputer world, like e-mail.”

Over the last few years, wikis have gained traction as tools in the business world, where companies run them on internal networks to foster collaboration on complex projects. The Gartner Group has predicted that half of all companies will use them internally in some fashion by 2009. There has also been at least one failed experiment with wikis in journalism: The Los Angeles Times tried online “wikitorials” but quickly abandoned the idea.

Even Jimmy Wales, who founded Wikipedia, is looking for ways to broaden — and profit from — the wiki concept. With financing from technology luminaries like Marc Andreessen and Mitchell Kapor, he and Angela Beesley started Wikia, which includes 1,500 separate wikis, from the Star Wars-focused Wookieepedia to user-generated pages on depression. Although Wikia is a for-profit company, it was founded with some of the communitarian idealism of Wikipedia, and its business plan calls for it to donate money to that foundation.

“It’s never going to be a billion-dollar-revenue business,” said Gil Penchina, the company’s chief executive. He said that the site currently made less than a dollar a page per month, although the site’s growing number of pages could make that significant.

“It feels to me like Craigslist,” he said. “It’s a small business, but it’s a good business and it makes a lot of people happy.”

If wikis become a big business, some of that idealism may fade — and consumers may begin to resent contributing to the sites free. So far, though, the sites are growing fast, thanks to dedicated volunteers.

Sondra Crane, a 75-year-old retiree who lives in Altamonte Springs, Fla., has written scores of entries for wikiHow on subjects both practical (how to make pot roast) and profound (how to get old without feeling old). “I’ve been writing all my life and I always wanted to have my name known,” she said. “I’d like to get paid — I put a lot of hours in. But it’s nice to know that people are being helped.”

Wikia and wikiHow operate much like Wikipedia: they let all users contribute and stipulate that any content they generate may be used freely, much as open-source software is. Other start-ups, including Wiki.com, are departing from the traditional collaborative spirit of the wiki model, in that they will let users decide who has permission to contribute to the wikis they start.

Mr. Gotts, who has been paying for Wiki.com in $10,000 installments with a final payment of about $2.8 million due within six months, said that he intended to share revenue with those who used his site to start wikis. “The main way we’re going to make money,” he said, “is to lead the trend for users to make money.”

He said that he would let users register Wiki.com subdomains free on topics of their own choosing — he suggested that might be anything from soccer.wiki.com to smokedsalmon.wiki.com — in the hope they would attract advertising or e-commerce.

But Ramit Sethi, co-founder of PBwiki, another make-your-own wiki site, said that it was still too early to determine what model would turn wikis into money-makers.

“Nobody has found the de facto business model for wikis,” said “It’s kind of the Wild West.”

Wired News Lets Users Write Wiki Article
Anick Jesdanun

Wired News readers are getting a chance to shape the news: For an article about wiki collaboration software, anyone may contribute using, what else?, a wiki.

The online news outlet challenged readers to edit a 1,059-word article just like an editor would. The writer, Ryan Singel, has even posted interview notes and conducted additional research in response to questions raised by the community.

Over the past week, the story has gone through more than 300 drafts, doubling in size as one reader conducted her own interview and added quotes, wiki vendors added references to their offerings and others contributed additional examples to support the premise.

Singel said the experiment has gone smoothly so far, devoid of the pranks and vandalism he had feared when Wired opened up the story to changes. With wikis, anyone may change, add or even delete passages, regardless of expertise.

But Singel doesn't believe the community can ever replace professional editors: Large groups can't easily agree on what parts to cut out, nor are they always careful about style.

"The original story had a bit more of a narrative flow, art to it," he said. "The additional information detracts from that a little bit. ... There are still portions that feel a little like a manual or a primer."

Wired editors plan to release a final version Thursday after editors vet the story for style and glaring errors, Singel said.

News organizations have tried collaborative articles before. Esquire magazine ran a similar experiment on a story about the open encyclopedia Wikipedia. The Los Angeles Times also briefly opened its editorials to public editing, but suspended it after being flooded with foul language and pornography.

Wal-Mart Finds an Ally in Conservatives
Michael Barbaro and Stephanie Strom

As Wal-Mart Stores struggles to rebut criticism from unions and Democratic leaders, the company has discovered a reliable ally: prominent conservative research groups like the American Enterprise Institute, the Heritage Foundation and the Manhattan Institute.

Top policy analysts at these groups have written newspaper opinion pieces around the country supporting Wal-Mart, defended the company in interviews with reporters and testified on its behalf before government committees in Washington.

But the groups — and their employees — have consistently failed to disclose a tie to the giant discount retailer: financing from the Walton Family Foundation, which is run by the Wal-Mart founder Sam Walton’s three children, who have a controlling stake in the company.

The groups said the donations from the foundation have no influence over their research, which is deliberately kept separate from their fund-raising activities. What’s more, the pro-business philosophies of these groups often dovetail with the interests of Wal-Mart.

But the financing, which totaled more than $2.5 million over the last six years, according to data compiled by GuideStar, a research organization, raises questions about what the research groups should disclose to newspaper editors, reporters or government officials. The Walton Family Foundation must disclose its annual donations in forms filed with the Internal Revenue Service, but research groups are under no such obligation.

Companies and such groups have long courted one another — one seeking influence, the other donations — and liberal policy groups receive significant financing from unions and left-leaning organizations without disclosing their financing.

But the Walton donations could prove risky for Wal-Mart, given its escalating public relations campaign. The company’s quiet outreach to bloggers, beginning last year, touched off a debate about what online writers should disclose to readers, and its financing to policy groups could do the same.

Asked about the donations yesterday, Mona Williams, a spokeswoman for Wal-Mart, said, “The fact is that editorial pages and prominent columnists of all stripes write favorably about our company because they recognize the value we provide to working families, the job opportunities we create and the contributions we make to the community we serve.”

At least five research and advocacy groups that have received Walton Family Foundation donations are vocal advocates of the company.

The American Enterprise Institute for Public Policy Research, for example, has received more than $100,000 from the foundation in the last three years, a fraction of the more than $24 million it raised in 2004 alone.

Richard Vedder, a visiting scholar at the institute, wrote an opinion article for The Washington Times last month, extolling Wal-Mart’s benefits to the American economy. “There is enormous economic evidence that Wal-Mart has helped poor and middle-class consumers, in fact more than anyone else,” Mr. Vedder wrote in the article, which prominently identified his ties to institute.

But neither Mr. Vedder nor the newspaper mentioned American Enterprise Institute’s financial links to the Waltons. Mr. Vedder, a professor at Ohio University, said he might have disclosed the relationship had the American Enterprise Institute told him of it. “I always assumed that A.E.I. had no relationship or a modest, distant relationship with the company,” said Mr. Vedder, who has written a forthcoming book about the company. The book, he said in an interview yesterday, would eventually contain a disclosure about the Walton donations to the institute.

A spokesman for the Walton Family Foundation, Jay Allen, said there was no organized campaign to build support for Wal-Mart among research groups. All of the foundation’s giving, he said, is directed toward a handful of philanthropic issues, including school reform, the environment and the economy in Northwest Arkansas, where Wal-Mart is based. “That is the spirit and purpose of their giving,” Mr. Allen said.

Mr. Allen said the foundation, which had assets of $608.7 million in 2004, the last year for which data is available, has never asked the research groups to disclose the donations because “the family leaves it up to the individual organization to decide.”
Those groups, for the most part, say they have decided not to share the information with their analysts or the public.

For example, Sally C. Pipes, the president of the Pacific Research Institute, a free-market policy advocate, has written several opinion articles defending Wal-Mart in The Miami Herald and The San Francisco Examiner.

A month after a federal judge in California certified a sex discrimination lawsuit against the company as a class action in 2004, Ms. Pipes wrote an article in The Examiner criticizing the lawyers and the women behind the suit. “The case against Wal-Mart,” she wrote, “follows the standard feminist stereotype of women as victims, men as villains and large corporations as inherently evil.”

The article did not disclose that the Walton Family Foundation gave Pacific Research $175,000 from 1999 to 2004. Ms. Pipes was aware of the contributions, but said the money was earmarked for an education reform project and did not influence her thinking about the lawsuit. Asked why she typically did not disclose the donations to newspapers, she said: “It never occurs to me to put that out front unless I am asked. If newspapers ask, I am completely open about it.”

The lack of disclosure highlights the absence of a consistent policy at the nation’s newspapers about whether contributors must tell editors of potential conflicts of interest.

Juan M. Vasquez, the deputy editorial page editor of The Miami Herald, which ran an opinion article praising Wal-Mart by Ms. Pipes of Pacific Research, said his staff researches organizations that write opinion articles, including their financing. But that does not always require asking if the organization has received money from the subject of an article, he said.

The New York Times has a policy of asking outside contributors to disclose any potential conflicts of interest, including the financing for research groups.

Several of the research groups noted that their mission is to be an advocate for free market policies and less government intrusion in business. “Those aims are pro-business, so it’s not surprising that companies would be supporters of our work,” said Khristine Brookes, a spokeswoman for the Heritage Foundation.

Last year, for instance, The Baltimore Sun published an op-ed article by Tim Kane, a research fellow at Heritage, in which he criticized Maryland’s efforts to require Wal-Mart to spend more on health care. He objected to the move on the grounds that it was undue government interference in the free market, a traditional concern of Heritage.

“The existence of Wal-Mart dented the rise in overall inflation so much that Jerry Hausman, an economist from the Massachusetts Institute of Technology, is calling on the federal government to change the way it measures prices,” Mr. Kane wrote. “Translation: Wal-Mart is fighting poverty faster than government accountants can keep track.”

Ms. Brookes pointed out that the $20,000 Heritage has received from the Walton Family Foundation since 2000 amounts to less than 1 percent of its $40 million budget.

Ms. Brookes said it was unlikely that researchers and analysts at Heritage were even aware of the foundation’s contributions. “Nobody here would know that unless they walked upstairs and asked someone in development,” she said. “It’s just never discussed.”

She said Heritage did not accept money for specific research. “The money from the Walton Family Foundation has always been earmarked for our general operations,” she said. “They’ve never given us any funds saying do this paper or that paper.”

A spokeswoman for the American Enterprise Institute said the group did not comment on its donors. The group’s focus on Wal-Mart has been notable. In June, the editor in chief then of the group’s magazine, The American Enterprise, wrote a long essay defending Wal-Mart against critics. The editor, Karl Zinsmeister, now the chief domestic policy adviser at the White House, said the campaign against the company was “run by a clutch of political hacks.”

Conservative groups are not the only ones weighing in on the Wal-Mart debate. Ms. Williams of Wal-Mart noted labor unions have financed organizations that have been critical of Wal-Mart, like the Economic Policy Institute, which received $2.5 million from unions in 2005.

In response, Chris Kofinis, communications director for WakeUpWalmart.com, an arm of the United Food and Commercial Workers Union that gives money to liberal research groups, said: "While we openly support the mission of economic justice, Wal-Mart and the Waltons put on a smiley face, hide the truth, all while supporting right-wing causes who are paid to defend Wal-Mart’s exploitative practices.”

The lack of a clear quid pro quo between research groups and corporations like Wal-Mart makes the issue murky, said Diana Aviv, chief executive of the Independent Sector, a trade organization representing nonprofits and foundations. “I don’t know how one proves what’s the chicken and what’s the egg,” she said.

Last year, the National Committee for Responsive Philanthropy, a research and watchdog group, published a report, “The Waltons and Wal-Mart: Self-Interested Philanthropy,” that warned of the potential influence their vast wealth gives them.

But Rick Cohen, executive director of the group, said he was more concerned about the role the Walton foundation’s money might play in shaping public policy in areas like public education, where it has supported charter schools and voucher systems.

“These are certainly not organizations created and controlled by the corporation or the family and promoted as somehow authentic when they aren’t,” Mr. Cohen said. “More important, I think, is the disclosure of the funding in whatever’s written, a sort of disclaimer.”

Australia’s ‘Crocodile Hunter’ Killed by Stingray

Steve Irwin, the hugely popular Australian television personality and conservationist known as the ''Crocodile Hunter,'' was killed Monday by a stingray while filming off the Great Barrier Reef. He was 44.

Irwin was at Batt Reef, off the remote coast of northeastern Queensland state, shooting a segment for a series called ''Ocean's Deadliest'' when he swam too close to one of the animals, which have a poisonous barb on their tails, his friend and colleague John Stainton said.

''He came on top of the stingray and the stingray's barb went up and into his chest and put a hole into his heart,'' said Stainton, who was on board Irwin's boat at the time.

Crew members aboard the boat, Croc One, called emergency services in the nearest city, Cairns, and administered CPR as they rushed the boat to nearby Low Isle to meet a rescue helicopter. Medical staff pronounced Irwin dead when they arrived a short time later, Stainton said.

Irwin was famous for his enthusiasm for wildlife and his catchword ''Crikey!'' in his television program ''Crocodile Hunter.'' First broadcast in Australia in 1992, the program was picked up by the Discovery network, catapulting Irwin to international celebrity.

He rode his image into a feature film, 2002's ''The Crocodile Hunters: Collision Course'' and developed the wildlife park that his parents opened, Australia Zoo, into a major tourist attraction.

''The world has lost a great wildlife icon, a passionate conservationist and one of the proudest dads on the planet,'' Stainton told reporters in Cairns. ''He died doing what he loved best and left this world in a happy and peaceful state of mind. He would have said, 'Crocs Rule!'''

Prime Minister John Howard, who hand-picked Irwin to attend a gala barbecue to honor President Bush when he visited in 2003, said he was ''shocked and distressed at Steve Irwin's sudden, untimely and freakish death.''

''It's a huge loss to Australia,'' Howard told reporters. ''He was a wonderful character. He was a passionate environmentalist. He brought joy and entertainment and excitement to millions of people.''

Irwin, who made a trademark of hovering dangerously close to untethered crocodiles and leaping on their backs, spoke in rapid-fire bursts with a thick Australian accent and was almost never seen without his uniform of khaki shorts and shirt and heavy boots.

Wild animal expert Jack Hanna, who frequently appears on TV with his subjects, offered praise for Irwin.

''Steve was one of these guys, we thought of him as invincible,'' Hanna, director emeritus of the Columbus (Ohio) Zoo and Aquarium, told ABC's ''Good Morning America'' Monday.

''The guy was incredible. His knowledge was incredible,'' Hanna said. ''Some people that are doing this stuff are actors and that type of thing, but Steve was truly a zoologist, so to speak, a person who knew what he was doing. Yes, he did things a lot of people wouldn't do. I think he knew what he was doing.''

Irwin's ebullience was infectious and Australian officials sought him out for photo opportunities and to promote Australia internationally.

His public image was dented, however, in 2004 when he caused an uproar by holding his infant son in one arm while feeding large crocodiles inside a zoo pen. Irwin claimed at the time there was no danger to the child, and authorities declined to charge Irwin with violating safety regulations.

Later that year, he was accused of getting too close to penguins, a seal and humpback whales in Antarctica while making a documentary. Irwin denied any wrongdoing, and an Australian Environment Department investigation recommended no action be taken against him.

Stingrays have a serrated, toxin-loaded barb, or spine, on the top of their tail. The barb, which can be up to 10 inches long, flexes if a ray is frightened. Stings usually occur to people when they step on or swim too close to a ray and can be excruciatingly painful but are rarely fatal, said University of Queensland marine neuroscientist Shaun Collin.

Collin said he suspected Irwin died because the barb pierced under his ribcage and directly into his heart.

''It was extraordinarily bad luck. It's not easy to get spined by a stingray and to be killed by one is very rare,'' Collin said.

News of Irwin's death spread quickly, and tributes flowed from all quarters of society.

At Australia Zoo at Beerwah, south Queensland, floral tributes were dropped at the entrance, where a huge fake crocodile gapes. Drivers honked their horns as they passed.

''Steve, from all God's creatures, thank you. Rest in peace,'' was written on a card with a bouquet of native flowers.

''We're all very shocked. I don't know what the zoo will do without him. He's done so much for us, the environment and it's a big loss,'' said Paula Kelly, a local resident and volunteer at the zoo, after dropping off a wreath at the gate.

Stainton said Irwin's American-born wife Terri, from Eugene, Ore., had been informed of his death, and had told their daughter Bindi Sue, 8, and son Bob, who will turn 3 in December.

The couple met when she went on vacation in Australia in 1991 and visited Irwin's Australia Zoo; they were married six months later. Sometimes referred to as the ''Crocodile Huntress,'' she costarred on her husband's television show and in his 2002 movie.
http://www.nytimes.com/aponline/arts... ner=homepage

The RIAA in Action

The Big Four Organized Music family has been victimizing its own customers since at least 2003. But instead of vigorously questioning the bizarre practice, the mainstream on- and offline print and electronic media support it, parroting floods of Big Four so-called press releases as though they're accurate reports from credible sources.

New York lawyer Ray Beckerman runs Recording Industry vs The People which among other things, high-lights some of the worst examples of how the music industry cartel persecutes men, women and even children. The site also carries links to court documents and lists lawyers who are currently defending Big Four victims.

The labels have numerous faux 'trade' units fronting for them and in the US, it's the mis-named RIAA (Recording Industry Association of America) owned by EMI (Great Britain), Vivendi Universal (France) Sony BMG (Japan and Germany) and, finally, Warner Music (US).

Here's Beckerman's latest on the RIAA in Action.

The RIAA lawsuits pit a small number of very large recording companies against individuals who have paid for an internet access account.

On the plaintiff's end, the owners of the underlying copyrights in the musical compositions are not involved in the case; neither are many smaller record companies.

As to the defendants, since no investigation is made to ascertain that the defendant is actually someone who engaged in peer to peer file sharing of copyrighted music without authorization, there are many defendants who have no idea why they are being sued and who did nothing even arguably violative of anyone's copyright. Defendants have included people who have never even used a computer, and many people who although they have used a computer, have never engaged in any peer to peer file sharing.

Sometimes the cases are misleadingly referred to as cases against 'downloaders'; in fact the RIAA knows nothing of any downloading when it commences suit, and in many instances no downloading ever took place.

It is more accurate to refer to the cases as cases against persons who paid for internet access which the RIAA has reason to believe was used by some person -- possibly the defendant, possibly someone else -- to engage in peer to peer file sharing.

Ex parte discovery cases.

At the core of the RIAA lawsuit process, is its initial lawsuit against a group of "John Does".

Here is how it works:

A lawsuit is brought against a group of "John Does". The location of the lawsuit is where the corporate headquarters of the internet service provider (ISP) is located.

All the RIAA knows about the people it is suing is that they are the people who paid for an internet access acount for a particular dynamic IP address.

The "John Does" may live -- and usually do live -- hundreds or thousands of miles away from the City where the lawsuit is pending, and are not even aware that they have been sued.

The RIAA is aware that most of the defendants do not live in the state, and are not subject to the jurisdiction of the Court, but bring the case anyway.

They are also aware that under the Federal Rules of Civil Procedure there is no basis for joining all these defendants in a single lawsuit, but do indeed join them in one case, sometimes as many as several hundred in a single "litigation".

The only "notice" the "John Does" get is a vague letter from their ISP, along with copies of an ex parte discovery order and a subpoena, indicating that an order has already been granted against them: i.e., instead of receiving notice that the RIAA is applying for an order, they instead are notified that they have already lost the motion, without ever even having known of its existence.[p2pnet emphasis]

They are not given copies of (i) the summons and complaint, (ii) the papers upon which the Court granted the ex parte discovery order, or (iii) the court rules needed to defend themselves. Most recipients of this "notice" do not even realize that it means that there is a lawsuit against them. None of the recipients of the "notice" have any idea what they are being sued for, or what basis the Court had for granting the ex parte discovery order and for allowing the RIAA to obtain a subpoena.

They are told they have a few days, or maybe a week or two, to make a motion to quash the subpoena. But if they were to talk to a lawyer they could not give the lawyer an iota of information as to what the case is about, what the basis for the subpoena is, or any other details that would permit a lawyer to make an informed decision as to whether a motion to quash the subpoena could, or could not, be made. What is more, the lawyer would have to be admitted to practice in the jurisdiction in which the ex parte case is pending, in order to do anything at all.

In other words, except for lawyers who are knowledgeable about the RIAA tactics, no lawyer could possibly have any suggestions that would enable "John Doe" to fight back.

So "John Doe" of course defaults. Then the John Doe "case" may drag on for months or even years, with the RIAA being the only party that has lawyers in court to talk to the judges and other judicial personnel.

The RIAA -- without notice to the defendants -- makes a motion for an "ex parte" order permitting immediate discovery. ("Ex parte" means that one side has communicated to the Court without the knowledge of the other parties to the suit. It is very rarely permitted, since the American system of justice is premised upon an open system in which, whenever one side wants to communicate with the Court, it has to give prior notice to the other side, so that they too will have an opportunity to be heard.).

The "ex parte" order would give the RIAA permission to take "immediate discovery" -- before the defendants have been served or given notice -- which authorizes the issuance of subpoenas to the ISP's asking for the names and addresses and other information about their subscribers, which is information that would otherwise be confidential.

In the United States the courts have been routinely granting these "ex parte" orders, it appears. (Not so in other countries. Both Canada and the Netherlands have found the RIAA's investigation too flimsy to warrant the invasion of subscriber privacy. Indeed the Netherlands court questioned the investigation's legality.).

Once the ex parte order is granted, the RIAA issues a subpoena to the ISP, and gets the subscriber's name and address.

The RIAA then discontinues its "John Doe" "ex parte" case, and sues the defendant in his own name in the district where he or she lives.

Thus, at the core of the whole process are:

(1) the mass lawsuit against a large number of "John Does";
(2) the "ex parte" order of discovery; and
(3) the subpoenas demanding the names and addresses of the "John Does".

This process has recently come under attack in 3 cases in Manhattan federal court: Atlantic v. Does 1-25 before Judge Swain, Motown v. Does 1-99 before Judge Buchwald, and Warner v. Does 1-149, before Judge Owen, in which "John Doe" defendants represented by Ray Beckerman and Ty Rogers brought motions to (a) vacate the ex parte discovery order on the ground that it had not been supported by competent evidence of a prima facie copyright infringment case, (b) quash the subpoena on that ground plus the additional ground that the complaint fails to state a claim for relief, and (c) sever and dismiss as to all defendants other than John Doe #1.

The moving parties were from Iowa, Texas, Long Island, and North Carolina -- i.e. not one of the John Does was someone who could properly be sued in Manhattan federal court.

All 3 motions have been denied.

The decisions are not appealable, since they are, theoretically, "interlocutory". However, it is the RIAA's usual practice to discontinue the "John Doe" cases, which means that there will never be a final judgment in the case, so the orders will never be brought to appellate scrutiny.

Settlement phase

After getting the name and address of the person who paid for the internet access account, they then send him or her a letter demanding a "settlement".

Their settlement is usually for $3750, non-negotiable, and contains numerous one-sided and unusual provisions, such as a representation that peer to peer file sharing of copyrighted music is a copyright infringement (a representation that is far too broad, undoubtedly there are 'sharing' behaviors with digital files, as there are with cd's, that are not copyright infringements). Even certain innocuous provisions, worded in a way to make them obligations of the defendant but not the RIAA, are deemed 'non-negotiable'. At bottom, the settlement is cold comfort to the defendant, because it does not speak for the other potential plaintiffs -- the owners of the copyrighted work, or the other record companies not represented by the RIAA litigation fund.

Litigations against named defendants

If there is no settlement, the RIAA then commences suit against the named defendant in the district in which he or she resides. A boilerplate complaint is used which accuses the defendant of "downloading, distributing, and/or making available for distribution" a list of songs. There are actually 2 lists, a long list (exhibit B) and a short list (exhibit A). The long list is a 'screen shot' of a list of file names which were allegedly in a shared files folder. The short list is allegedly a list of song which the RIAA's investigators were able to download.

No details as to how, when, or where the alleged "infringement" took place.

If the defendant defaults, plaintiffs apply for, and apparently usually obtain, a default judgement for $750 per Exhibit A song -- a number which is over 1000 times the 70-cent amount for which the license to the song could have been purchased. This measure of damages has been challenged on constitutional grounds in UMG v. Lindor and Maverick v. Goldshteyn, both in Brooklyn federal court.

There have been several challenges to the sufficiency of the boilerplate complaint, in the form of a motion to dismiss complaint, 3 in Texas, 1 in Minnesota, 1 in Arizona, and 3 in New York; my firm has been involved in the 3 New York motions.

In Elektra v. Santangelo, in Westchester, the motion was denied.

An unusal result occurred in Interscope v. Duty, in Arizona. The judge denied the defendant's dismissal motion, not because he agreed with the RIAA, but because he didn't feel he understood the technology well enough to rule on the case.

Then, in Waco, Texas, in Warner v. Payne, in Fonovisa v. Alvarez in Abilene, Texas, and in Maverick v. Goldshteyn in Brooklyn, New York, the judges followed the Interscope decision, declining to decide whether 'making available' is a copyright infringement, and upheld the complaint. The motion was also denied in Arista v. Greubel, in Dallas, Texasa.

In Elektra v. Barker in Manhattan, the motion is pending, and the RIAA has cited to the judge their victories in the other six (6) cases.

In Elektra v. Barker, amicus curiae briefs have been submitted by the Electronic Frontier Foundation, the Computer & Communications Industry Association, and the Internet Industry Association, in support of Ms. Barker's motion, and by the MPAA in opposition to it. Additionally the American Association of Publishers requested permission to file such a brief, and the United States Department of Justice submitted a "Statement of Interest" taking issue with an argument made by the Electronic Frontier Foundation. Briefing has now been completed, and the parties are awaiting either a decision from Judge Karas, or the setting of an oral argument date if the judge feels that oral argument is needed.

The Department of Justice also submitted a "Statement of Interest" in Fonovisa, also on the side of the RIAA, relating to the same limited issue.

A new dismissal motion motion is being made in Westchester, in Warner v. Cassin.

In cases where the sufficiency of the complaint is not being challenged, or has been accepted by the court, the RIAA serves a number of pretrial discovery requests, calling for examination of the hard drive and numerous other items, and discovery is being litigated. There have been interesting discovery rulings in Elektra v. Santangelo in White Plains, Atlantic v. Andersen in Oregon, Motown v. Nelson in Michigan, and in UMG v. Lindor.

In Lindor the magistrate ordered the record companies to produce evidence, if any, relating to their employees' use of p2p file sharing to send music files to radio stations, and to produce 'chain of title' documents for any copyrights as to which the name of the plaintiff is not the name on the copyright registration, or as to which there has ever been any dispute of copyright ownership. Additionally, he ordered that defendant can take pretrial discovery into the plaintiffs' analysis of the hard drive, and precluded plaintiffs from proving any actual damages at trial.

Some of the other discovery rulings in Lindor: (1) the record companies can't have a blanket advance confidentiality order for their deposition transcripts, but will have to move for a protective order as to sections they want to keep confidential, (2) if they want to assert a privilege as to their agreements with their investigators they will have to make a formal protective order motion and submit copies of the agreements "in camera" to the Judge (i.e. show them it to the judge, but not to the other side), (3) if they won't produce the witness for UMG in Brooklyn, where the court is located, they have to either reimburse Ms. Lindor up to $500 for her lawyer's travel expenses or they have to have a videoconference where both lawyers are participating only by videoconference; (4) Ms. Lindor is entitled to followup interrogatories on the subject of the plaintiffs' 'investigation' methods.

In Priority Records v. Brittany Chan, a Michigan case, the litigation was brought against a 14 year old girl who allegedly engaged in file sharing when she was 13. The RIAA made a motion to have a guardian ad litem appointed so that its case might proceed against the minor, but the Judge rejected the motion because it did not ensure payment of the guardian ad litem's fees. The judge thereafter dismissed the case when the RIAA ignored his instruction to submit a plan that would ensure payment of the guardian ad litem's fees.

In an earlier case against Brittany's mother, the RIAA refused to withdraw the case against the mother, but then changed its mind and did withdraw when faced with the mother's motion for summary judgment and attorneys fees.

A similar scenario occurred in Capitol v. Foster, in Oklahoma, where the RIAA withdrew only when faced with the mother's motion for summary judgment and attorneys fees. The judge let the RIAA drop its case, but held that the 'voluntary' withdrawal did not make the RIAA immune from legal fees, and indicated that he may award the mother her attorneys fees. Ms. Foster has made a motion for attorneys fees, and was supported in her motion by an amicus curiae brief submitted by the American Civil Liberties Union, the Electronic Frontier Foundation, the American Association of Law Libraries, Public Citizen, and the ACLU Foundation of Oklahoma. In their brief the 'friends of the court' told the judge that "the RIAA has wrought havoc in the lives of many innocent Americans" and that an award of attorneys fees is necessary to deter such conduct in the future. Meanwhile the RIAA has asked the judge not to accept the amicus brief.

In another Oklahoma City case, Warner v. Stubbs, the defendant -- represented by the same lawyer who represented Debbie Foster -- filed an answer and counterclaim saying that the RIAA's tactics amounted to extortion. The very next day the RIAA moved to withdraw its case.

In a Michigan case, Warner v. Scantlebury, after learning that the defendant died, the RIAA asked the Court for a 60-day stay to allow the family to "grieve", after which it said it intends to take depositions of the decedent's children. We have received unconfirmed reports that after a firestorm of controversy erupted over the internet, the RIAA now intends to withdraw the case against the deceased.

As of this writing, we are on the verge of seeing how defendants' summary judgment motions will fare in the courts. In February, 2006, Marie Lindor wrote a letter to Judge Trager asking for a premotion conference in connection with her planned summary judgment motion in UMG v. Lindor; the judge, however, referred the case to the Magistrate for pretrial discovery prior to summary judgment motion practice. After submitting to a deposition, and to an inspection of the hard drive of the computer in her apartment, after answering all of the RIAA's written discovery demands, and after arranging for her adult son and daughter to testify voluntarily at their depositions, she has now written to the Judge renewing her request for a summary judgment pre-motion conference and for a stay of discovery during the pendency of the motion. In August, 2006, a motion for summary judgment was made by the defendant, in Chicago, in Warner v. Wilke. The plaintiffs' opposition papers are due September 19th.

The Death of Privacy
Jeffrey Rothfeder

In privacy circles, a mostly forgotten incident from the end of the dot-com euphoria aptly illustrates the lack of regard most companies have toward protecting personal data, even if they make a point of promising to do so.

The episode occurred in mid-2000, when Toysmart.com Inc., a Web-based retailer, went out of business. Among the assets the company put on the block during bankruptcy proceedings was one that caught the eye of regulators at the Federal Trade Commission: the names, e-mail and mailing addresses, and shopping histories of 250,000 Toysmart customers. Toysmart was offering these records to the highest bidder, despite an online privacy policy that explicitly stated the company would never share customer data with any third party.

With the Web surging with an enormous amount of commercial activity and sensitive information, the FTC had recently beefed up its Internet consumer-protection efforts. Commission regulators decided that Toysmart's blatant disdain for its own privacy oath was just too contemptuous to be ignored. Backed by 44 state attorneys general, the FTC sued to block the Toysmart data auction, arguing that it constituted a "deceptive practice." In early 2001, an agreement was forged under which Toysmart investor, the Walt Disney Co., would buy the company's customer data for $50,000 and then promptly destroy it.

"The Toysmart case and others like it—among them Living.com and CraftShop .com—proves what some of us have suspected all along: Many companies don't really believe privacy is something to protect when there's money to be made from confidential data, or when safeguarding sensitive data gets in the way of making money," says Luis Salazar, an attorney in the privacy practice group at Miami-based law firm Greenberg Traurig LLP. Last year, at the request of Senator Patrick Leahy (D– Vt.), Salazar authored a provision for a new bankruptcy law that makes it illegal for insolvent companies to sell personally identifiable information if their privacy policies forbade such activities.

The general disinterest in doing little more than the bare minimum to shield consumer privacy extends well beyond companies that are closing up shop. The Canadian Internet Policy and Public Interest Clinic, at the University of Ottawa, recently conducted an in-depth study of 64 major online sites, including those of Amazon.com Inc., Citigroup Inc., Staples Inc., Best Buy Co. Inc. and eBay Inc. The study found that, in general, an alarming number of Web-based operations are sloppy, if not downright negligent, when it comes to privacy practices. According to the CIPPIC report, released in April, "While almost all companies we assessed had a privacy policy and were thus aware of the need to respect customer privacy, many failed to fulfill even basic statutory requirements such as providing contact information for their privacy officers, clearly stating what they do with consumers' personal information and responding to access-to-information requests."

CIPPIC investigators called customer-service numbers at online retailers and asked if the company had a privacy policy and, if so, who was responsible for it. At 68 percent of companies it took more than five minutes to answer the question, and at 22 percent it took more than ten minutes. Moreover, respondents at 56 percent of the companies contacted by phone could not provide the name of the person in charge of the organization's privacy issues.

These findings, while disturbing, should not be particularly surprising when measured against the number of high- and low-profile data breaches that have occurred in the past two years. The Privacy Rights Clearinghouse, based in San Diego, has been keeping a running total of the leaks of sensitive information, such as Social Security numbers, account numbers, and driver's license numbers, by companies and government agencies since data aggregator ChoicePoint Inc. sold 145,000 consumer files to identity thieves in February 2005. Scores of incidents are chronicled, as many as three dozen a month, some involving global brands such as Toyota Motor Corp., Chevron Corp., Allstate Corp. and Equifax Inc. In all, more than 90 million records containing confidential information about individuals—in large part, consumers, patients and employees—have been stolen from U.S. organizations in the past 18 months.

The pattern that emerges is not pretty. Most companies claim that privacy is a priority—chiefly because they believe consumers are more willing to do repeat business with them if personal information is carefully handled. But in reality, many companies are woefully inept at protecting privacy. Some companies view robust data protection as too expensive to consider seriously, so half-hearted steps are taken instead. Others see the penalty for data breaches and privacy failures as too low to generate much concern. In many instances, management of privacy policies is handed off to chief privacy officers who report to the corporate lawyers, not a C-level executive, and whose main responsibility is to make sure the company's data policies are in line with government regulations and industry benchmarks. In other words, privacy is regarded as a risk that must be mitigated, not a strategic imperative.

"It's only been recently, as privacy breaches occur and make the headlines, that it's becoming obvious to everybody that companies haven't been doing a good enough job," says Alex Fowler, co-leader of the privacy practice at PricewaterhouseCoopers. "As time goes by, we'll get an even clearer picture of the data-handling practices of companies. My guess is we're not going to like what we find out."

At its core, protecting privacy is an information management issue. With the cost of computer storage plummeting, companies are maintaining more and more data, for longer periods of time, at rock-bottom prices. Executives are driven by the idea that any morsel of information about customer purchases, browsing habits and preferences could someday be valuable, so they simply can't bring themselves to erase anything. Consequently, personal information and less sensitive details exist side-by-side in the same databases, often accessible by multiple programs throughout the organization, many of which have long been forgotten. Without a complete, up-to-date inventory of what data they possess and how it is being used, which data should be segregated and which can be freely shared, many companies are making privacy breaches a foregone conclusion.

Budgets and leadership also play roles. Technology managers say they are loath to ask for the hundreds of thousands of dollars it would cost to create a blueprint of company data and a system for keeping confidential information from being easily accessed, when management has shown little interest in spending discretionary money on an activity with such limited tangible return.

Encrypting networked information, for example, would "take care of 95 percent of the internal privacy intrusions," says George Toft, a veteran IT manager who has worked at American Express Co., Blue Cross and Blue Shield, the Department of Defense and IBM Corp., and who currently runs My IT Department, a small computer-services firm in Anthem, Az. Yet few companies are willing to pay for this safeguard. CIO Insight's own research indicates that only 41 percent of companies surveyed encrypt stored data and documents. And only 56 percent encrypt data in flight, or during transmission.

Why? The No. 1 issue was the potential for performance degradation; No. 2 was cost. This attitude reflects a serious lack of leadership on the part of executives, notes George Tillmann, former chief information officer at consultants Booz Allen Hamilton. "Companies will not take privacy seriously until management does. So far, most managers prefer to see it as a problem that does not rise to the strategic level," Tillmann says.

Tillmann, who is now retired, argues that CEOs must set stringent corporate information retention policies and processes that "state explicitly what data can be stored, where it can be stored (on PCs, laptops, PDAs, and the like) and how it should be stored (encrypted or not). The policies need to address all types of data—customer, employee and supplier records—not just financial information. They should include guidelines for reducing the amount of information stored by getting rid of it as soon as it is not needed," he adds.

CEOs and other executives may be neglecting privacy safeguards and rigid privacy policies because the cost of failing to protect data is not as high as is commonly believed. It is de rigueur for chief executives to publicly state that protecting customer data is critical, because trust is an essential part of the relationship businesses have with consumers. Yet a closer look at the price of an actual breach reveals that, while not insignificant, it can be relatively minimal. In a recent study of 14 lost-data incidents, encryption company PGP Corp. found that the average opportunity cost of a data breach, measured by the "loss of existing customers and the increased difficulty in recruiting new customers" was about $75 per lost customer record. For typical successful retailers or financial services firms with billions in annual earnings, that represents an acceptable hit to the bottom line.

Moreover, in most cases, companies can easily avoid legal penalties for a data breach. There are nearly three dozen state laws that require companies to notify consumers if their private information has been leaked and a risk of identity theft exists. As long as these procedures are followed, companies are free from criminal liability for the leak itself.

"While there's a general sense that it's embarrassing to be involved in a data breach, and it is true that a breach doesn't do anything for your reputation as a trusted business, privacy is a business decision that ultimately comes down to a risk calculation. And many companies believe—wrongfully, from my perspective—that the price of data loss simply isn't high enough," says Gary Lynch, business continuity management practice leader at Marsh Risk Consulting, a division of New York City-based Marsh Inc.

Most executives don't like to think of it this way, but, so far, companies have created strong privacy policies only when forced to by federal legislation with very specific data-protection provisions. For example, the Health Insurance Portability and Accountability Act of 1996, better known as HIPAA, and the Gramm-Leach-Bliley Act of 1999, require healthcare providers and financial services firms, respectively, to implement systems to protect the privacy of patient and customer information. Both bills have been criticized for being long on rhetoric and short on rigorous penalties, but few companies are prepared to ignore mandates from Washington, no matter how weak-kneed the law or how expensive it is to implement. Consequently, the privacy policies in the business sectors overseen by HIPAA and Gramm-Leach-Bliley are considerably more enlightened than in other industries.

These laws affect fewer than a quarter of U.S. companies, and as a result, their reach has been limited. Ironically, the European Union's privacy regulations have probably had a much more significant influence on the data-protection policies of a much wider group of U.S. companies.

The EU's data directive is the most stringent in the world. Passed in 1995, the legislation forbids companies in EU nations from using confidential information, which is quite broadly defined, for secondary purposes without the explicit approval of the consumer. That rule, and other restrictions allowing individuals access to companies' personal data and providing ways to correct errors, go well beyond the privacy protections practiced by almost every U.S. company. Consequently, with the adoption of the EU directive, U.S. companies with European operations and sales activities found themselves in danger of being legislated out of a lucrative market.

In 2000, after months of negotiations, the EU and the U.S. Commerce Department forged a safe-harbor agreement that allows U.S. companies to collect and share data in Europe in the course of doing business, as long as they promise to abide by a slightly watered-down version of the EU's data protection rules. Since then, hundreds of U.S. organizations have signed on to the accord.

Safe-harbor companies are required to follow the EU's austere data protection standards only when dealing with European consumers, or when managing subsidiary or affiliate businesses on the continent. The result: Most U.S. companies now have two sets of privacy rules—one for the European market, and another set of less rigid policies in the U.S. and other nations. However, a few companies were convinced that the EU approach served the consumer's appropriate expectation of privacy quite well. These companies saw safe harbor as an opportunity to create a single, strict data-protection regimen for the entire organization, wherever on the globe it operated.

In 2001, Eli Lilly & Co., the maker of Prozac, made the embarrassing mistake of sending out an e-mail to 600 users of the anti-depressant that contained the e-mail addresses of every recipient. In effect, Lilly had broadcast the names of Prozac patients to perfect strangers around the world. That incident resulted in a deal with the FTC under which Lilly agreed to improve its privacy practices, and coincided with Lilly's signing on to the EU's safe-harbor agreement. With these two activities on the front burner at the company, Lilly management, with the strong urging of Global Privacy Officer Stan Crosley, decided to make data protection a centerpiece of the company's strategic direction.

"Europe was a significant driver on privacy for Lilly," says Crosley. "It showed us that there was a different approach that could have a nice return for the company—not necessarily in dollars and cents, but in the gains a company can get from having good business practices. There is a distrust of large corporations among consumers. But we cannot survive in the pharmaceutical industry as a target of that distrust."

Lilly spent tens of millions of dollars over many months to develop a global data-protection system that contains a series of approval layers for accessing private information. Its information protocols are designed to ensure that the only people permitted to view discrete, confidential data are those who must access it to do their jobs. Furthermore, sensitive information is clearly marked and segregated from less classified data in order to make it difficult to inadvertently leak customer records.

"Information is valuable to us, and we realized that we would only be able to continue to collect it if we convinced consumers that we appreciated that things of value should be protected," Crosley adds.

Stories like Lilly's—particularly the role that the EU directive played in the company's conversion to a pro-privacy stance—bolster the notion that U.S. companies won't install comprehensive data-protection systems until government legislation forces them to. About a dozen bills have been introduced in the current Congress that tackle various aspects of data protection. The most expansive legislation is the Personal Data Privacy and Security Act, co-sponsored by Senator Arlen Specter (R–Pa.), chairman of the Judiciary Committee, and Senator Leahy, the committee's ranking member. Their proposal would require most companies with at least 10,000 digital files on individuals to adopt data-privacy procedures that protect against unauthorized access and use of personally identifiable information. Violators face fines and prosecution.

When it was introduced in mid-2005, the bipartisan legislation was expected to pass easily before the end of the year. But revelations about warrentless wiretapping of domestic phone calls by the National Security Agency and other terrorist-related law enforcement activities have preoccupied the committee since then, and the Specter-Leahy bill has yet to reach the Senate floor. None of the other data-privacy proposals have been voted on, in either house of Congress. Frustrated by the lack of action, Senator Leahy says that it signifies a general disinclination among lawmakers to tackle privacy problems. "The longer there is erosion of Americans' privacy rights, the more difficult it becomes to do something about it," says Leahy. "This Congress has not made a priority of privacy protection. I hope the next Congress will."

That can't come a moment too soon, says PwC's Fowler. As companies grapple with basic data-privacy concerns that should probably have been dealt with a decade ago, the issue is fast gaining in complexity. "Our notion of identity is going to change a lot in the new millennium. We're just scratching the surface now," Fowler says. "Which aspects of our data identity must be protected at all costs, which aspects of it are the most sensitive, is just beginning to come into shape even as the amount of data about us continues to expand. We need to step back and understand the dynamics of identity, and how it is shifting and putting pressure on businesses, government, regulators and policy makers from a social, political and cultural perspective. That is a discussion we are not having."

Facebook Feature Draws Privacy Concerns
Anick Jesdanun

The operators of the online hangout Facebook wanted to help users save time by highlighting changes their friends make to their personal profile pages. Instead, the new feature has drawn complaints from thousands of its users and even threats of a boycott.

The backlash is over Facebook's decision this week to deliver automated, customized alerts known as News Feeds about a user's closest friends, classmates and colleagues. Users who log on might instantly find out that someone they know has joined a new social group, posted more photos or begun dating their best friend.

"It's making it so much easier for people who want to do stalking to stalk," said Facebook user Igor Hiller, 17, a freshman at University of California, Santa Barbara. "Facebook users really think Facebook is becoming the Big Brother of the Internet recording every single move."

A protest group created on the site, Students against Facebook News Feeds, had more than 600,000 members by Thursday, and more than 80,000 people had electronically endorsed a petition against the feature. A Web journal has even been set up calling for users to boycott the site on Tuesday, a week after the feature's debut.

"Anytime you're confronted with new information about yourself in a public place, it's surprising," said Andrea Forte, 32, a Facebook user and Georgia Tech doctoral candidate who studies online communities. "My initial reaction was mild dismay."

Facebook has long prided itself on privacy.

A user's profile details, including contact information, relationship status and hobbies, are generally hidden from others unless they are already part of that user's network of friends or institution, such as a college.

In addition, users have the option of hiding specific details from certain users, even ones already designated as friends - choosing, for instance, to show photos to college buddies but not to co-workers.

To join, one must prove membership in an existing network using an e-mail address from a college, a high school or selected companies and organizations. As a result, Facebook has fewer than 10 million registered users, compared with some 108 million at News Corp.'s MySpace.

Facebook's chief executive, Mark Zuckerberg, said Thursday that privacy remains central to the site, but he acknowledged the company misstepped and "failed to communicate to our users actively what it actually meant for them."

All of the information presented had been available before, but a person had to visit a friend's profile page and make note of any changes - for example, noticing that the friend now has 103 friends instead of 102, and identifying which one got added.

Zuckerberg said people "can literally spend 10 to 20 minutes going through all the information in individual profiles." The new feature, he said, was meant to "surface the most interesting changes" made by a user's closest friends.

Chris Hughes, co-founder of the two-year-old, privately held company based in Palo Alto, Calif., said Facebook's software analyzes such factors as how often one communicates with a friend or views that friend's profile in determining whom a user deems most important.

He added that anything someone chose to hide to a specific person before would not suddenly appear in that person's feed.

Zuckerberg said Facebook was working on giving users additional privacy options.

The safeguards, expected as early as Friday, would let users block from feeds entire categories - such as changes to the groups they belong to - while still allowing people to observe such changes by visiting the profile page. Before, a user had to remove items one at a time from their personal feeds.

Facebook Changes After Privacy Protests
Anick Jesdanun

Users of the online hangout Facebook revolted and won as the site agreed Friday to let them turn off a new feature that drew privacy complaints because it lets others easily see changes made to their personal profile pages.

"We really messed this one up," Facebook's chief executive, Mark Zuckerberg, said in an open letter to users.

The backlash came over Facebook's decision Tuesday to deliver automated, customized alerts about a user's closest friends, classmates and colleagues. Users who log on might instantly find out that someone they know has joined a new social group, posted more photos or begun dating their best friend.

All of the information presented had been available before, but a person had to visit a friend's profile page and make note of any changes - for example, noticing that the friend now has 103 friends instead of 102, and identifying which one got added.

The feature was meant to help users save time. Instead, Facebook saw thousands of users joining protest groups on the site and signing online petitions. A Web journal was even set up calling for users to boycott the site next Tuesday.

The boycott was called off Friday, as was a protest Monday outside the company's headquarters in Palo Alto, Calif.

"We think it's a good compromise," said Facebook user Igor Hiller, 17, a University of California, Santa Barbara, freshman who had organized Monday's protest. "We're happy with what they've done."

Zuckerberg told The Associated Press on Thursday that Facebook was working on giving users additional privacy options. The safeguards let users block from feeds entire categories - such as changes to the groups they belong to - while still allowing people to observe such changes by visiting the profile page.

The options were started Friday and essentially let users block all types of feeds if they want. Zuckerberg said Friday such options should have been offered from the start.

"This was a big mistake on our part, and I'm sorry for it," he wrote users. "But apologizing isn't enough. I wanted to make sure we did something about it, and quickly. So we have been coding nonstop for two days to get you better privacy controls."

Facebook has long prided itself on privacy.

A user's profile details, including contact information, relationship status and hobbies, are generally hidden from others unless they are already part of that user's network of friends or institution, such as a college.

In addition, users have the option of hiding specific details from certain users, even ones already designated as friends - choosing, for instance, to show photos to college buddies but not to co-workers.

To join, one must prove membership in an existing network using an e-mail address from a college, a high school or selected companies and organizations. As a result, Facebook has fewer than 10 million registered users, compared with some 108 million at News Corp.'s MySpace.

Pollster Guilty of Fake Data Conspiracy
Michael P. Mayko

A polling company owner admitted participating in a conspiracy to falsify data in order to meet deadlines for clients, which included the campaigns of President Bush, U.S. Sen. Joe Lieberman, U.S. Rep. Rosa DeLauro and Mayor John M. Fabrizi.

Tracy Costin, 46, of Madison, admitted to U.S. District Judge Janet C. Hall that she participated in a conspiracy to commit wire fraud.

Costin, who owned and operated DataUSA, a survey and polling firm with offices in West Haven and Guilford, faces up to five years in prison when she is sentenced Nov. 30.

However a preliminary calculation of the federal sentencing guidelines call for Costin to receive a sentence ranging from 27 to 33 months in prison and a fine of $6,000 to $60,000.

As part of her plea agreement, Costin agreed to repay $82,732 to the clients of 11 jobs between June 2002 and May 2004. The clients were not identified.

However, court documents identify numerous political clients, as well as Metro-North Railroad, as customers of DataUSA, now known as Viewpoint USA.

Assistant U.S. Attorney Edward Chang said the firm's employees conducted telephone interviews using a scripted questionnaire.

But Chang said on several occasions when the company was running up against a deadline to complete a job, results were falsified. Sometimes, the respondent's gender or political affiliation were changed to meet a quota, other times all survey answers were fabricated.

FBI Special Agent Jeff Rovelli said 50 percent of information compiled by DataUSA and transmitted to Bush's campaign was falsified.

There was no indication that the Fabrizi campaign surveys were falsified.

Leonard Mastri, Costin's ex-husband, told the FBI the results for a Metro-North survey were fabricated.

Mastri, the former owner of Computer Guys and PM Consulting in Bridgeport, was arrested and convicted for selling computers stolen from Sikorsky Aircraft.

The FBI, along with agents from the Defense Criminal Investigative Service, investigated both cases.

Three From Clinton Administration Urge Disney to Cancel or Revise 9/11 Mini-Series
Jesse McKinley

Three members of the Clinton administration have written the chief executive of the Walt Disney Company, ABC’s parent, to complain that the network’s coming two-part miniseries “The Path to 9/11” is fraught with factual errors and fabrications.

The letters ask that the five-hour movie, scheduled for broadcast Sunday and Monday, be either edited for accuracy or canceled, and ABC gave a small indication yesterday that some changes might be made.

One of the officials, former Secretary of State Madeleine K. Albright, said in her letter to the Disney executive, Robert A. Iger, that although she had requested a copy of the film, ABC had not given her one. But, Ms. Albright said, she has been told by people who have seen it that it “depicts scenes that never happened, events that never took place, decisions that were never made and conversations that never occurred.”

“It asserts as fact things that are not fact,” she wrote.

The concerns of Ms. Albright, as well as those expressed in letters from Samuel R. Berger, former national security adviser, and Bruce R. Lindsey, a Clinton White House aide now with the Clinton Foundation, were echoed yesterday by several Democratic members of Congress.

ABC, meanwhile, continued to explain that the mini-series, though largely drawn from the report of the Sept. 11 commission, was a dramatization, not a documentary.

But the network appeared to be leaving the door open to last-minute changes in the film.

“It is common practice to continue to make edits to strengthen a project right up to the broadcast date,” said Hope Hartman, an ABC spokeswoman.

The series, which cost almost $40 million, is to be broadcast without commercials, but Ms. Hartman said this had been planned, as a public service, and had nothing to do with any pressure that might have been brought on prospective advertisers.

Ms. Hartman said she could not confirm that Ms. Albright, Mr. Berger or the Clinton Foundation had requested any advance copies of the movie. She said such copies had been provided to “accredited media and educational institutions,” including talk shows.
In their letters, dated Tuesday, both Mr. Berger and Ms. Albright object to scenes in which they are shown adding obstacles to efforts to capture or kill Osama bin Laden. In particular, Ms. Albright said a scene in which she refuses to support a cruise missile strike against Mr. bin Laden without first alerting the Pakistani government was untrue. Ms. Albright (played by Shirley Douglas) also said the suggestion that she had alerted the Pakistani military to an imminent strike was “false and defamatory.”

“Sept. 11 is not ‘entertainment,’ it is reality,” Ms. Albright wrote Mr. Iger. “Before you air your broadcast, I trust you will ensure you have the facts right.”

Mr. Berger (played by Kevin Dunn) said a scene in which he is shown refusing to authorize a strike to kill Mr. bin Laden in Afghanistan “flagrantly misrepresents my personal actions” and will serve “only to grossly misinform the American people.”

Mr. Berger’s character is also seen abruptly hanging up during a conversation with a C.I.A. officer at a critical moment of a military operation. In an interview yesterday with KRLA-AM in Los Angeles, Cyrus Nowrasteh, the mini-series’ screenwriter and one of its producers, said that moment had been improvised.

“Sandy Berger did not slam down the phone,” Mr. Nowrasteh said. “That is not in the report. That was not scripted. But you know when you’re making a movie, a lot of things happen on set that are unscripted. Accidents occur, spontaneous reactions of actors performing a role take place. It’s the job of the filmmaker to say, ‘You know, maybe we can use that.’ ”

The producers and writers of the movie have said the script was based not only on the commission report but also on two books — “The Cell,” by the former ABC newsman John Miller and Michael Stone, and “The Relentless Pursuit,” by Samuel M. Katz — as well as personal interviews. They also say the script was vetted by lawyers, terrorism experts and former Gov. Thomas H. Kean of New Jersey, the commission’s chairman, who is credited as a senior consultant to the mini-series.

Mr. Kean, whose report criticized both the Bush and Clinton administrations, said Tuesday that the miniseries, like the report, was balanced. “People in both administrations are not going to be happy if it’s portrayed accurately,” he said.

Political pressure against a television drama is not unprecedented. In 2003, CBS dropped a four-hour miniseries about Ronald and Nancy Reagan after a concerted campaign by Republican and conservative groups. That series, “The Reagans,” was later televised on the cable channel Showtime.

Marc Platt, the executive producer of “The Path to 9/11,” said he had known that turning a 600-page report into a five-hour drama would ruffle some feathers. “The challenge in any adaptation,” he said, “is how do you render it as dramatic as you can without exceeding the boundaries of what’s fair and accurate.”
http://www.nytimes.com/2006/09/07/wa... tner=homepage

ABC Said to Re-Edit Key Parts of 9/11 Show
Patrick Healy and Jesse McKinley

Under growing pressure from Democrats and aides to former President Bill Clinton, ABC is re-evaluating and in some cases re-editing crucial scenes in its new mini-series “The Path to 9/11” to soften its portrait of the Clinton administration’s pursuit of Osama bin Laden, according to people involved in the project.

Among the changes, ABC is altering one scene in which an actor playing Samuel R. Berger, the former national security adviser, abruptly hangs up on a C.I.A. officer during a critical moment in a military operation, according to Thomas H. Kean, a consultant on the ABC project and co-chairman of the federal Sept. 11 commission.

Mr. Berger has said that the scene is a fiction, and Mr. Kean, in an interview, said that he believed Mr. Berger was correct and that ABC was making appropriate changes.

The reassessment came as two Clinton aides mounted an unusual attack last night on the motives of Mr. Kean, a Republican and a former governor of New Jersey. In a letter to Mr. Kean, the two aides, Bruce R. Lindsey and Douglas Band, wrote that his defense of the mini-series “is destroying the bipartisan aura of the 9/11 Commission,” on whose findings the project is partly based. They asserted that Mr. Kean was driven by payments from ABC or his own partisan politics.

Mr. Kean, who called Mr. Clinton a good friend, said it was outrageous to suggest he was being swayed by money or politics, and added that any fee he received would be donated to charity. He said he stood by the film because he believed it would draw attention to the commission’s security recommendations, many of which have not been put into effect, and because the film did not pretend to be a documentary.

Yet Mr. Kean, as well as other members of the commission, did say they were concerned that their widely praised investigation of the Sept. 11 attacks might be diminished in some way by the mini-series.

“Mini-series often make things more dramatic by fictionalizing,” Mr. Kean said. “I don’t think the fictional moments reflect on the work of the commission, but I do hope that the controversy doesn’t tarnish it. ABC is trying to be as accurate as possible.”

Democrats and allies of Mr. Clinton unleashed full-throated appeals to ABC yesterday to cancel the broadcast, which is scheduled for Sunday and Monday nights. The Senate Democratic leadership sent a letter to Robert A. Iger, the chief executive of the Walt Disney Company, ABC’s parent, saying that broadcasting the film “would be a gross miscarriage of your corporate and civic responsibility.”

The national Democratic Party drew more than 100,000 signatures in 24 hours to a petition of complaint that it plans to give to ABC today.

Senator Hillary Rodham Clinton of New York, one of 10 senators at a news conference yesterday where the mini-series came up, left before she could be asked about it. A small throng of reporters who followed her out of the building toward her office were kept at bay by her aides.

The changes to the mini-series are still being made inside an editing suite in Los Angeles, with a variety of creative staff members and executives, including Marc Platt, the executive producer, who has been monitoring the editing from London, and David L. Cunningham, the director, who is being consulted at his home in Hawaii.

Mr. Kean said that two other parts of the film are also under review. One is a scene where an actress playing former Secretary of State Madeleine K. Albright is apparently obstructing efforts to capture Mr. bin Laden. The other part suggests that Mr. Clinton was too distracted by impeachment and his marital problems to fully focus on Mr. bin Laden.

Mr. Platt said that he could not offer specifics about what scenes were being examined, but that editing was going on and “will continue to, if needed until we broadcast.”

“From Day 1, we’ve examined any issue or question that’s arisen,” he said. “And we’ll continue to do so until the last possible moment.”

Mr. Kean said he was surprised by the outcry, since most of the critics have not seen the film. He said Mr. Clinton had spoken directly to Mr. Iger last Friday; Clinton aides declined to comment.

Several 9/11 commission members said yesterday that they respected Mr. Kean immensely but that they were concerned about the ABC project and his role in it. One of them, Timothy J. Roemer, a Democrat, said he called Mr. Kean yesterday to urge ABC to make changes. Another, Jamie S. Gorelick, a former Clinton administration official, wrote Mr. Iger yesterday that the nation and schoolchildren would be poorly served if they drew lessons from the mini-series that were inaccurate.

Scholastic, the children’s publishing company, which had been working with ABC to use “The Path to 9/11” as a teaching tool, said yesterday that it was removing materials related to the film from its Web site. A spokeswoman said a new study guide was being prepared that would explain the difference between a docudrama and a documentary.

Anne E. Kornblut contributed reporting from Washington.
http://www.nytimes.com/2006/09/08/wa... tner=homepage

When Film School Isn’t Enough, the EnterTech Age Dawns
Sharon Waxman

On a blinding, 104-degree day at Arizona State University, the heat outside was fairly matched inside the classroom by a fervid debate over the past, in a new course on the convergence of entertainment and technology.

Flitting across centuries and millenniums, students and professors argued the reasons for technological evolution, brandishing theories involving Andy Warhol, film sprockets, the Chinese invention of the handgun, the Hegelian dialectic and tsetse flies.

But the course, called Entertainment and Technology, part of the film and media studies program in the College of Liberal Arts and Sciences, is anything but an exercise in ivory tower esoterics.

Instead it is the start of a new program to grant an undergraduate certificate, and eventually a master’s degree, in the nascent field the university calls EnterTech — where entertainment meets technology — with the idea of preparing young professionals to work in the warp-speed world of a changing Hollywood.

“We know that the dominance of 35-millimeter film is over,” said Peter Lehman, the director of the film and media studies program, and one of two professors who teaches the course. “We’re in a period of massive change and uncertainty. We need a new kind of person in this industry who understands that entertainment and technology are converging, and who is fluent in the concepts and the language of both.”

Apparently Hollywood agrees. An advisory board of two dozen veterans — mainly producers, lawyers and studio executives — has signed on to help shape the curriculum and speak to students about the challenges facing the entertainment industry.

Hollywood urgently needs people who can think in those terms, said Gene Schwam, a longtime publicist who had little trouble putting together the panel of advisers after he agreed to help get the program going.

“The digital age, and that 800-pound distribution gorilla, the Internet, is changing everything,” he said. “The technical people and the creative people need to be able to work together, and there is no forum for that now.”

Established film programs like those at the University of Southern California or New York University have tried to integrate new technology into their curricula, as with U.S.C.’s Robert Zemeckis Center for Digital Arts, which gives students access to computer-graphic software for making their films.

But Arizona State, with a film school that is just one year old, is taking a very different approach, training people who for the most part are not aspiring to work in the entertainment industry’s conventional job categories. “We are not turning out people who are going to be editors, cinematographers, writers, directors,” said Dr. Lehman, who observed that there are too many such film schools already.

“Ideally we should be teaching students to think of film in relation to new media in a quite different model than we had in the past,” he continued. “It’s not as simple as, ‘We need content for a new delivery system.’ It’s more, ‘We need to understand the new technology and how it will shape entertainment.’ We’re creating a new industry job, as it were.”

The program at Arizona State comes at a particularly fraught time for Hollywood as the industry grapples with rapidly evolving technology that is changing consumers’ leisure habits, with uncertain implications for the future. Innovations now happen over months rather than years. No sooner do studios devise programming for cellphones that can stream video content than social-networking Web sites like MySpace become the latest, greatest platform.

Meanwhile, bedrock areas like movie production itself, intellectual property rights and the financing of entertainment are all being affected by the changing technology, even as traditional media, like movies, struggle to maintain their dominance.

In that environment Dr. Lehman, who had been working since 1999 on establishing the new film school, and Mr. Schwam, who had been bemoaning the status quo, had a meeting of the minds during a chance encounter last year, when Arizona State honored Blake Edwards, the creator of the “Pink Panther” series.

David A. Young, vice president and dean of the College of Liberal Arts and Sciences, said the university was moving in the direction of mixing disciplines. “We live in a trans-discipline world,” he said. “If you look at the big issues facing society, like curing cancer, it won’t be cured from a one-discipline approach.”

The EnterTech certificate follows on the heels of another new hybrid program, an earth- and space-exploration degree that combines engineering with science.

Dr. Young and Dr. Lehman pitched the EnterTech idea in the spring to a group of industry professionals at the Beverly Hilton Hotel in Los Angeles, but also listened to what Hollywood had to say.

“They’re saying, ‘We have a problem,’ ” Dr. Young recalled. “ ‘Convergence is happening, but we’re not turning out people who understand it.’ And all the production people were saying: ‘Don’t start another production program. That’s not what we need.’ ”

The approach also dovetailed with the work of Paul Privateer, an associate professor of both film studies and, separately, science policy. He has also done strategic consulting for computer companies like Apple, Sun Microsystems and Unisys Corporation.

“When I got here, I was interested in creating a coalition of traditional academic subjects and technology in the real world,” said Dr. Privateer, who teaches the new course with Dr. Lehman. He refers to the new film program as a “Frankenstein adventure.”

In the classroom, Dr. Privateer outlined the purpose of the program as a whole, pressing his 25 undergraduate and graduate students to think about the issues raised and how they relate to their future careers.

“What we’re doing here is radically different” from programs at universities like Carnegie-Mellon or U.S.C., which both teach entertainment and technology, he told the students.

“I’m not suggesting that there’s some inherent causality between entertainment and technology,” he continued. “We’re admitting: Whatever technology is, whatever entertainment is, that relationship is inherently complex. It’s a chaos model.”

Students taking the new course said they were excited by the ideas raised, even if they were not sure how they would apply what they had learned. The certificate is available to any discipline, and the class included students majoring in psychology or comparative literature, or getting master’s degrees in business.

“I didn’t know what to expect, but this is definitely interesting,” said Joey Eschrich, 20, a junior in film studies who intends to become an academic.

David Kilopack, 20, a finance major who is planning to go into real estate development but is considering a career as a movie producer, said: “If I were going to do whatever I wanted in entertainment, I would start here. I see this as the basis of whatever is going to come. I’m not sure what I want to do, but this is the right environment to be in to find out.”

Alex Baer, 35, had a clear idea of what he wanted from the program. He is an executive for a German software company that programs content for mobile media, and was taking the course to “find out what we need to know about the narrative form when presenting it on different screens,” he said.

Dr. Privateer is developing two other core courses for the certificate, one focusing on “the science of entertainment,” as he put it, seeking to forecast the future of popular culture, and the other on “the science of technological evolution,” which will seek a model for forecasting technological change. All the courses will be part of the master’s program, which needs to be approved by Arizona’s Board of Regents before it can be administered.

Forecasting, Dr. Privateer pointed out, is extremely hazardous. But Hollywood, still mired in the past, is using models based on obsolete statistics from the last century, he said.

The entertainment industry needs new approaches and more sophisticated models, he said, like chaos theory. He is thinking of starting a consulting company himself, with some of his students. “There is incredible potential here for knowledge workers,” Dr. Privateer said.

Mr. Schwam agreed. “ ‘Star Wars’ was great in its day,” he said. “But it’s old-fashioned compared to what’s going on today.”

Viacom CEO Ousted as Stock Price Falls
Geraldine Fabrikant

The chairman of Viacom, Sumner Redstone, said today that he was replacing his chief executive officer after a fall in the company’s stock price.

Mr. Redstone, who has been publicly unhappy with the performance of CEO Tom Freston, said this morning in a conference call that Viacom’s board had asked Mr. Freston to resign and appointed a team led by Philippe Dauman to take his place.

“The board was taking a look at our stock,” Mr. Redstone said, and how it had performed since Viacom and CBS were split earlier this year. “CBS was making new highs, and we were seven or eight points down from Viacom’s high. That comparison certainly influenced the board.”

Mr. Dauman will have the titles of president and chief executive. In addition, Thomas E. Dooley was appointed to the new role of senior executive vice president and chief administrative officer. The two men had long worked with Mr. Redstone before Viacom acquired CBS in 1999.

Although the company said today that Mr. Freston had resigned, Mr. Redstone, the 84-year-old controlling shareholder of Viacom, has been telling associates in Hollywood that he felt Mr. Freston was not a strong enough leader for the company, according to several people who have talked to Mr. Redstone but spoke on the condition of anonymity, saying they did not want to jeopardize relationships in Hollywood.

That discontent boiled over recently when Mr. Redstone indicated that he was displeased that Viacom had not severed its relationship with Tom Cruise’s production company. Mr. Redstone has told associates that Mr. Cruise’s behavior had cost the company lost revenue on Mission Impossible 3 and that Mr. Freston and his hand-picked head of Paramount Pictures, Brad Grey, were too slow to terminate Paramount’s agreement with Mr. Cruise.

Mr. Redstone credits Mr. Dauman and Mr. Dooley, with whom he had worked closely before Viacom acquired CBS and CBS’s chief Mel Karmazin effectively took over their posts, with a key role in the 300 percent increase in Viacom’s share price between 1996 and 2000.

But Wall Street had less confidence in the changes yesterday than Mr. Redstone did. Viacom’s stock immediately slid when the news was announced. By midday it was down 5 percent.

Michael Nathanson, a media analyst at Sanford Bernstein, said the “reasons for the change appear very short term and somewhat silly — the fact that Viacom has not performed well in the market for the seven months, while CBS has.”

Wall Street was also worried that Mr. Redstone is growing impatient with his company’s rate of investment in new media. “That worries investors that the company might spend irrationally,” Mr. Nathanson said.
http://www.nytimes.com/2006/09/05/bu... tner=homepage

MGM Expands Global TV, Plans 5 Movie Sequels
Bob Tourtellotte

Film and television studio Metro-Goldwyn-Mayer Inc on Wednesday said it is expanding global TV sales to reinvigorate operations, adding some 100 new employees and promoting a key executive to run the unit.

The venerable studio, which owns the rights to the James Bond movies, also said it will make five future movie sequels that will include comedy "Legally Blonde 3," based on the previous two "Legally Blonde" hits that starred Reese Witherspoon.

MGM executives touted the TV plans as a major strategic move to tap expanding foreign markets where communications companies are rapidly building new high-speed video delivery systems for broadband cable TV, satellite TV and the Internet.

"There is a tremendous expansion in the marketplace that is occurring now," said Chief Operating Officer Rick Sands. He added that in overseas markets there is "an appetite for more, quality product, and licensees are paying substantial money."

He declined to comment on the expansion's cost.

Sands and Chief Executive Harry Sloan took the reins of MGM less than one year ago and set about breathing new life into the studio after it was acquired in spring 2005 by a consortium of private equity firms and media companies.

They first pumped up film distribution by signing deals to release movies made by independent producers. They also continued making sequels to major titles like this November's Bond title, "Casino Royale," and December's "Rocky Balboa."

Wednesday's announcement included the unveiling of thrillers "Species 4," WarGames 2, "Into the Blue 2" and romance "Cutting Edge 3," along the "Legally Blonde" title which, Sands said, will not star Oscar winner Witherspoon.

In TV, rebuilding MGM's worldwide sales group -- which licenses rights to show U.S. movies and TV programs overseas -- leverages Sloan's experience in foreign TV markets where he built Europe's SBS Broadcasting into a major player.

MGM has a library of more than 4,000 movies and 10,000 TV shows that it can license to foreign distributors, along with the new titles "Casino Royale" and "Rocky Balboa."

The company placed executive Jim Packer at the head of the TV effort and gave him the title of president, MGM Worldwide Television Distribution Group.

Sands said MGM hired around 100 new employees for the TV expansion, and expects to operate "lean and mean" from offices in cities such as Hong Kong, London, and Rome, among others.

MGM's major owners are Providence Equity Partners, Texas Pacific Group, Sony Corp and Comcast Corp.

Time Warner’s Anxious Autumn
BRichard Siklos

WITH the fall comes the harvest. Or at least that’s what Richard D. Parsons and his top dogs at Time Warner have hoped for in autumns past. But regardless of how much the chief executive and his allies regroup, retool and reorganize their sprawling media empire, the stock market just yawns. Every morning when they look at Time Warner’s ticker, it’s Groundhog Day.

Carl C. Icahn seems to be the only investor with a modicum of enthusiasm for the stock. Last month, he disclosed plans to form a new fund to scoop up more Time Warner shares so he could add to the boatload he already owned. And, by the way, he basically wants to bust up the place.

For his part, Mr. Parsons spent last week vacationing on Block Island, R.I., no doubt aware of whispers that Time Warner, the world’s biggest media company, has a turbulent autumn ahead.

Here are just a few of the whispers: Will Mr. Parsons stick around as chief executive or pass the reins in the next few months to his No. 2, Jeffrey L. Bewkes? Will the latest strategy of its AOL business — offering its online service free to high-speed Internet users — take flight? Is the financial performance of its publishing unit, Time Inc., becoming a worrisome drag, and is it time to spin off its venerable fleet of magazines?

But are these or any other bold moves that Mr. Parsons might make, including a huge stock buyback, enough to lift Time Warner’s shares and to get Mr. Icahn off the company’s back? Let’s consider the rumors, and Mr. Parsons’ options, in sequence.

Nary a week goes by without speculation that Mr. Parsons, who is 58, is ready for a change of scenery — perhaps, à la New York magazine’s recent conjecture, to make a bid to be New York’s next mayor. Mr. Parsons has said that this is not his ambition, and confidants say he is far more interested in big-time federal jobs, like secretary of education — depending on who occupies the White House after the election in 2008, which happens to be the same year that his current Time Warner contract is up.

There is also the question of how long Mr. Bewkes, 54, will remain content to wait in the wings. Mr. Bewkes has shown no signs of impatience, and Mr. Parsons already gives him the broad mandate of a true partner, as illustrated by the recent AOL strategy shift he championed.

HERE’S what Edward I. Adler, Time Warner’s spokesman, told me last week: “Dick is working hard running Time Warner and is committed to continuing his current role at least until the end of his contract. He and Jeff Bewkes are making the tough decisions needed to move the company forward and create shareholder value.”

My read is that even if Mr. Parsons is enamored of public service, he wants to leave Time Warner on his own terms. Bowing to Mr. Icahn’s demands is clearly not part of that agenda. He can point to some bright spots, too: sweeping up the legal, regulatory and managerial debris that the Time Warner-AOL merger left behind, and efficiently presiding over some of the most profit-churning media brands, from Warner Brothers to HBO to People magazine to Time Warner Cable.

But going out on top probably means a stock price above $20 a share, a level the company has not hit since April 2002, the month before Mr. Parsons assumed the helm. On Friday, the shares closed at $16.76. If the stock doesn’t hit $20 by next year, it’s hard to imagine that Mr. Parsons will still be the chief executive. After all, media stocks are no longer uniformly in the doldrums: shares of Comcast, for instance, have risen 41 percent off their 52-week low, and the company now boasts a market capitalization of $74 billion, eclipsing Time Warner’s $68 billion.

(Such are the vicissitudes of the market: the News Corporation and Disney have also outperformed Time Warner of late. But if you owned Time Warner stock for at least a decade, it has actually wildly outperformed both of those companies and Comcast.)

In the near term, one possible financial lifeline is the planned public listing next year of Time Warner Cable. That unit is the cable industry’s second-largest player, after Comcast, and the flotation could serve to bottle the same lightning that has ignited Comcast stock.

But just as cable is gaining steam and AOL is on a new path, Time Inc. — the smallest of the company’s five major operating businesses — remains challenged. Time Inc.’s operating income dropped 11 percent, to $388 million, in the first half of the year, compared with the same period of 2005. Revenue was roughly flat, at $2.45 billion.

Mr. Parsons told me recently that an advertising slowdown at magazines favored by men and the rapid migration of ads from print to the Internet explained the drop-off in publishing profits.

Time Inc. has already undergone rounds of cost-lopping under its chief, Anne Moore, and moving Time magazine’s publication date to Friday from Monday is one small sign of how the division is trying to reinvigorate itself in the Internet era. Even so, Mr. Bewkes is seeking bigger structural changes at the division, according to several people close to the company. Mr. Bewkes has zeroed in on the fact that Time Inc. publishes some 145 magazines worldwide, yet its 10 biggest generate a vast majority of its revenue. Expect them to get the bulk of attention and resources while some smaller titles drop their print editions (as Teen People recently did) and others are sold.

It is unlikely, however that a whole-hog sale of Time Inc., or any other division, will happen on Mr. Parsons’ watch. He has steadfastly maintained — and Mr. Bewkes has concurred — that Time Warner still makes more sense intact than in pieces. They can point to the ho-hum results of splitting up Viacom and CBS as evidence. They may also feel a bit gun-shy, given that Warner Music, a division they sold to Edgar Bronfman Jr. and other investors in 2004 for $2.6 billion, now has a market capitalization of $3.7 billion.

The elephant in the room, of course, remains AOL. Is its new strategy to thrive on advertising revenue sound, or is it too late for AOL to muster the firepower needed to dominate on the Web, as it once did? If the answer to either question is no, you can’t help wondering if selling or merging AOL with another Web player is inevitable.

If it came to that, my money would be on Yahoo, which was rebuffed last winter when AOL was courting online partners.

AOL’s new business model resembles Yahoo’s more than that of any other company, and Yahoo’s chief executive, Terry S. Semel, was previously the co-head of the Warner Brothers film and TV studios. With Yahoo’s shares having fallen this year, there is less risk that Time Warner would deliver a repeat of the AOL merger fiasco by combining with another hyperinflated Internet company.

Finally, there is Mr. Icahn.

Mr. Parsons deftly handled Mr. Icahn’s well-publicized call for a breakup before the annual meeting earlier this year, getting the billionaire and his hedge fund partners to call off a proxy fight that was doomed. He could probably handle him again. But Mr. Icahn also learned some valuable lessons in his first run at Time Warner. He also takes pride in his ability to bide his time.

At the investor conference held by Mr. Icahn at the height of his campaign to dismember Time Warner last winter, he boasted that it took him years to persuade RJR Nabisco to split itself up. “I am a rite of spring. And every spring, we’d come and have a little proxy fight,” he recalled.

I asked him whether this meant that if he didn’t gain seats on Time Warner’s board, he’d simply come calling again. He replied that Time Warner was different from a food and tobacco company because the media industry was changing so rapidly: “I don’t think there’s a great deal more time if we miss this one.”

Yet here we are, a half-year later, and he is looking to buy more stock. A poor harvest this fall could lead to a bleak winter. And, with the spring, comes Mr. Icahn.

The Good Side of Diamonds, Before a Movie Shows the Bad
Maria Aspan

A new Web site about diamonds is intended to tell retailers and buyers positive things about the diamond industry. But the site’s real target may be potential moviegoers and fans of Leonardo DiCaprio.

The site, diamondfacts.org, will officially open on Wednesday, according to the World Diamond Council, a trade organization. The site comes on the heels of an announcement in June that the industry would mount a public relations campaign in response to “Blood Diamond,” starring Mr. DiCaprio, to be released in December by Warner Brothers. “Blood diamonds” and “conflict diamonds” are the names given to the gems that finance civil wars in certain African countries. The movie is set in Sierra Leone in the late 1990’s, according to Warner.

According to Eli Izhakoff, the president of the World Diamond Council, the Web site is the culmination of a long campaign to increase public awareness of reforms in the diamond trade, especially the institution of a certification process for legitimate, nonconflict diamonds since the time period depicted in the film. “We’ve intensified our efforts because of this upcoming movie,” Mr. Izhakoff said. “We wanted to make sure that retailers and consumers get the facts about the good things that diamonds do.”

This isn’t the first time an industry has mounted a media defense against Hollywood. Oil companies silently weathered criticism after movies like “Syriana,” but mobilized active defenses against documentaries, like “An Inconvenient Truth,” the film by Al Gore. When it opened in May, groups associated with the oil industry used TV and the Internet to counter its claims about global warming.

The Competitive Enterprise Institute, a group financed in part by Exxon Mobil, produced two TV commercials focusing on carbon dioxide. And a video on youtube.com, “Al Gore’s Penguin Army,” depicted a Gore-like figure blaming global warming for everything from Mideast conflicts to World Series results, while his penguin audience snored. According to The Wall Street Journal, the video was linked to a public relations firm serving Exxon.

There’s Money in Dirt, for Those Who Find Bits of Silicon
Ilan Greenberg

Sifting black earth inside her hole, 14-year-old Nurzada Meerim admits to breathing problems. “But here is money,” she said, holding up a crinkled silver flake.

Across a vast landfill just outside this tiny farming town in eastern Kyrgyzstan, the heads of girls continually pop up from narrowly constructed 10-foot shafts. Mothers and other female relatives wait on the rim, hands outstretched to take the flakes and gnarled pebbles of silicon that the girls have retrieved from the soil. There are some men, too, and they bark threats to outsiders who walk past their holes.

The landfill covers the garbage cast off from a shuttered factory that produced mostly trinkets and souvenirs from silicon-bearing rock, as well as waste sent from a nearby Soviet-era uranium mine. Flattened plastic bottles carpet the area.

Local environmentalists and doctors who have visited the landfill have warned the Kyrgyz government of the site’s health risks, especially from high levels of radiation. But few salvagers of silicon in Orlovka can afford to let health issues stop their unsanctioned digging.

Central Asia is a trove of gold, silver, copper, coal, nonferrous metals and uranium, in addition to oil and gas, and there are plans to transform the region into a vast economy of extraction. The world’s most voracious economy, next door in China, has created lucrative markets that have governments and villagers alike across Central Asia focusing more acutely on digging for minerals.

“Mining is now starting to become the government priority,” said Andrew Sasanov, vice president of governmental relations at Centerra Gold, a Toronto-based mining company that already contributes nearly 10 percent of Kyrgyzstan’s gross domestic product.

China’s need for Central Asian materials is not limited to what is under the ground. Along China’s snaking border with Kazakhstan, Kyrgyzstan and Tajikistan, anything made of metal is fair game. At night villagers steal hubcaps, roof tiles from houses, even manhole covers to sell in bazaars across the border.

It is China’s rapidly expanding computer chip industry that is fueling the rush for Orlovka silicon, which is sold by middlemen in the bazaars to Chinese traders in the Kyrgyz capital, Bishkek. “They are getting rich,” an older woman standing near one of the digging holes said of the traders. “They are protected. But I say we sell them everything. It is just the garbage left by Lenin.”

Most holes are family-run. Nurzada works her hole for about nine hours every day with her mother and 16-year old sister. Both daughters, the mother insisted, will attend school in the fall with textbooks bought with money earned from digging silicon. The family was initially lured by rumors earlier in the summer that silicon diggers were hitting jackpots: large rocks worth as much as $25,000 for their silicon content.

But girls from Orlovka, a bucolic settlement of potato farms and small cattle ranches, and the people from the other nearby villages who take to the holes typically earn $10 a day for the approximately 200 grams of silicon slivers they manage to separate from the garbage and soil.

It is an excellent income in a country where more than 40 percent of the population live under the poverty line and the gross domestic product, at official exchange rates, is just $266 per capita, according to the International Monetary Fund. The Central Intelligence Agency puts the figure at a still paltry $2,100, using what is perhaps a more realistic measure of purchasing power.

“It doesn’t feel like work,” Nurzada said disingenuously as she glanced toward her mother, her face a spider web of dark lines from the sun.

Nearby, a stooped woman wearing a smock swirled in purple and red, who insisted on being called only “Grandmother,” bundled her silicon pebbles and headed to a silicon bazaar. There, among vegetable sellers and old men who shuffled along selling tin foil, Chinese middlemen perched over rusty metal scales were doling out money for silicon.

“When this mine is finished I hope we can find another one,” she said. “Nobody cares about this region. We can all starve to death and nobody will notice our bodies.”

Outsiders are not welcome in Orlovka. Asked for directions to the mine, a local farmer replied, “Silicon Valley is in California.” The men among the silicon diggers are especially wary of visitors, encircling outsiders who get close to their holes, some brandishing their short shovels like weapons.

“Don’t say anything!” one woman screamed from inside her hole, warning the others away from a visiting reporter. “We will get shut down, and then I would like to know, where will you work?”

Chinese iPod Supplier Withdraws Lawsuit
Elaine Kurtenbach

A Chinese supplier of Apple Computer's iPod has withdrawn a defamation lawsuit it filed against two Chinese journalists over claims of labor mistreatment.

Foxconn Technology Group, Taiwan-based owner of the manufacturer Hongfujin Precision Industry Co. and the Chinese newspaper China Business News issued a joint statement saying the two sides had resolved the dispute after apologizing to each other "for the disturbances brought to both of them by the lawsuit."

The statement, posted on Foxconn's Web site, said each side had expressed respect for the other. Hongfujin said it recognized the right of media in overseeing corporate behavior, while the newspaper expressed its recognition of the company's contribution to China's economic development and competitiveness.

The two sides agreed to work together to protect workers' rights, it said.

The newspaper, which had said it would back its staff and their reporting regardless of the costs, ran the statement in its Monday edition.

Last week, amid a wave of bad publicity, Apple Computer Inc. announced it was trying to resolve a controversy over the lawsuit filed in a Shenzhen court by Hongfujin against two journalists who wrote a story criticizing treatment of workers on its iPod assembly lines.

Local and international media groups criticized Hongfujin's demand for 30 million yuan ($3.8 million) in damages as well as the local court's agreement to freeze the personal assets of the two journalists, China Business News reporter Wang You and editor Weng Bao.

Hongfujin subsequently reduced its demand for damages to a token 1 yuan (12 U.S. cents), and the local government announced it had ordered the company to set up a state-sanctioned labor union at the factory.

In a commentary Monday signed by China Business News' managing editor, Qin Shuo, the newspaper said it continued to back its employees but decided to compromise because the article in question had "weaknesses." Qin did not elaborate on what those weaknesses were.

"Even if we had won in court despite those weaknesses, it would not have been a true victory, nor would it have been fair to Foxconn," he wrote.

The allegations about Hongfujin's labor conditions first surfaced in an article in the British newspaper The Mail which reported in June that workers were being paid below minimum wages and forced to work 15-hour days making the iconic iPods.

Cupertino, California-based Apple responded by promising to immediately investigate conditions at the factory. It issued a report earlier this month saying that it found some violations of its stringent code of conduct but no serious labor abuses. It pledged to immediately redress some problems with overtime, employee accommodations and administrative issues.

The factory, which also supplies electronics components and accessories to other major companies such as Dell Inc. and Intel Corp., is a small city in its own right, with clinics, recreational facilities, buses and 13 restaurants serving its 200,000 workers, Apple's report said.

The report discounted allegations of forced overtime, noting that a chief complaint among workers was a shortage of overtime during slack periods.

Apple Sets Stage for Movies on iTunes
May Wong and Gary Gentile

Could the company that helped catapult the legal music download market with iPods and iTunes now kick-start the online movie market?

Rumors of Apple Computer Inc.'s plans to launch a movie download service gained momentum Tuesday after the company sent invitations to the media, saying "It's Showtime," next week.

The media event scheduled for Sept. 12 is set in San Francisco and coincides with the opening day of the Apple Expo in Paris.

Sources at several Hollywood studios confirmed Tuesday they were in talks to sell their films through iTunes. But substantial disagreements between studios and Apple remain to be resolved and Apple's movie service could launch with a limited number of films, according to two studio executives who asked to remain anonymous because talks were still ongoing.

Speculation of the iPod maker adding full-length feature films to its online iTunes Music Store have swirled for months. Already, the Cupertino, Calif.-based computer company has become a multimedia powerhouse with its song and TV show downloads. Analysts said it would only be a matter of time before Apple started distributing movies online.

Apple CEO Steve Jobs became a board member and the largest stockholder at The Walt Disney Co. earlier this year through its acquisition of Pixar Animation Studios Inc., which Jobs also headed. That connection provides a natural toehold for Disney to be among the first to sign a distribution deal.

Apple's first experiment with a full-length TV movie on iTunes was last March when it started offering the Disney Channel's original TV movie, "High School Musical," for $9.99.

Apple and Hollywood studio representatives refused to comment on the speculation of a movie licensing deal.

Also, analysts and industry observers expect Apple to soon introduce a new iPod player with a widescreen display - which would be better suited for viewing movies.

Several studios are balking at Apple's demands, including selling all films for one price and making all films available for download the same day they are released on DVD, according to studio sources.

Studios already sell films through other online services, including Movielink, CinemaNow and Guba. Those deals allow the studios to vary pricing and availability.

Studios also have some concerns about the digital protection offered by Apple. Other deals use Microsoft Corp.'s Windows Media software, which more tightly controls how many times films can be transferred to various devices.

Studios want to retain more control over their product, believing, as the mantra goes, that "content is king" and that Apple needs big studio fare to sell any new video player more than studios need to sell films through iTunes.

One studio executive said Tuesday that deals being struck for a similar download service planned by Amazon.com are more flexible and allow for higher profit margins.

But watching movies meant for the big screen on a small portable display is still not ideal. Neither is watching video on a computer screen.

An AP-AOL Video poll released Tuesday found that only one in five online video viewers have watched or downloaded a full-length movie or television show. And fledgling online movie services such as CinemaNow and MovieLink have acknowledged that one of their biggest challenges remains the difficulties consumers face if they were to try to hook up their televisions to play videos from their computers.

Apple, in the meantime, has been forging ahead to make its products the digital media hub for consumers. Its iconic iPod player is designed for music and video on-the-go, its iTunes store is a leading destination for getting digital content, and its Macintosh computers are touted for managing all the multimedia.

Josh Bernoff of Forrester Research is one of many analysts who expect Apple to enter the living room soon with a product designed to connect to televisions.

Bernoff predicted in a report in January that Apple was creating a new set-top box and will unveil video licensing deals. Such an integrated hardware and software package would rattle video distribution similar to how its iPod-iTunes franchise transformed the music industry, he said.

"If Apple is successful here, they will really open up the online movie market," said Rob Enderle, an analyst with the Enderle Group.

Analyst Tim Bajarin of Creative Strategies added that competitors are sure to be closely watching Apple's next move, including Microsoft, which has said it plans to introduce its own branded online store and Zune portable media player later this year.

Apple shares rose $3.10, or 4.5 percent, to close at $71.48 on the Nasdaq Stock Market.

Amazon.com Launches TV, Movie Service
Elizabeth M. Gillespie

Amazon.com Inc. launched a digital video downloading service Thursday, ending months of speculation that the Internet retailer would be getting into the online TV and movie business.

The service, dubbed Amazon Unbox, will offer thousands of television shows, movies and other videos from more than 30 studios and networks, the company said.

TV shows will cost $1.99 per episode, and most movies will go for $7.99 to $14.99; movies can also be rented for $3.99.

Amazon Unbox will offer shows from CBS, News Corp.'s Fox, MTV, Nickelodeon, PBS, BBC, A&E, Discovery Channel, Comedy Central and The History Channel, among others. General Electric Corp.'s NBC and Walt Disney Co.'s ABC were noticeably absent on the list of participating networks. MTV, Nickelodeon and Comedy Central are owned by Viacom Inc.

Seven major studios are participating in Amazon.com's service: Viacom's Paramount, News Corp.'s 20th Century Fox, Sony Corp.'s Sony Pictures, GE's Universal Studios, Time Warner Inc.'s Warner Bros., Lionsgate Entertainment Corp. and Metro-Goldwyn-Mayer, Inc.

Walt Disney Pictures is not participating. Apple Computer Inc. CEO Steve Jobs is the largest shareholder of Walt Disney Co., and the announcement of Amazon's service comes just days ahead of the expected launch of a movie download service at Apple's iTunes Music Store.

Details of the scope of Apple's expected offerings are unclear, but its pioneering success and market dominance with its iTunes music and TV show downloads as well as its iPod media players have already cast Apple as a leading competitor.

Craig Kornblau, president of Universal Studios Home Entertainment, said Amazon.com's entry into the digital distribution business will help jump-start the still nascent online movie business.

"We're going to have extensive, ubiquitous distribution from a variety of e-tailers," he said. "There are a lot of companies we're talking to."

Hollywood studios already sell films through other online services, such as Movielink, CinemaNow and Guba, but they haven't yet attracted a huge following.

Amazon.com's catalog of TV shows includes some of the same shows already available on iTunes and Google Inc.'s online video store, including CBS's "CSI" and Fox's "24."

Movies on Amazon Unbox include new releases like "V for Vendetta," "Inside Man," "Brokeback Mountain," "Walk the Line," and "Friends with Money," as well as classics such as "Ben Hur," "Chinatown" and "Poseidon Adventure."

Seattle-based Amazon.com said the service will work on any Internet-connected personal computer running Windows XP, the latest version of Microsoft Corp.'s operating system.

Bill Carr, Amazon.com's vice president of digital media, declined to comment on whether the company would later try to make the service work on machines running Apple's operating system, saying only: "It's our goal to reach as many customers as possible."
When customers download a show or movie, Amazon Unbox will automatically give them a second file that can be viewed on Windows Media-compatible portable digital players. Another service, called Unbox RemoteLoad, will allow customers to buy from one computer and download to another.

Movies often take an hour or more to download even with a solid, high-speed Internet connection. Unbox will use what's called a "progressive download," which will let people begin watching programs before they're fully downloaded - within five minutes of ordering for the typical cable broadband Internet user, Amazon.com said.

The downloads can be transferred onto DVDs for storage, and the DVDs can be used to play the movie on the computer with that downloaded the movie, but they cannot be played on a regular DVD player.

Benjamin Feingold, president of Sony Pictures Home Entertainment, said offering downloads to a computer or portable device is a good starting point, but the end goal is delivering content to a TV. "Every little step is a good thing, but ultimately, being able to have a playback in the living room on a larger screen enhances the experience," Feingold said.

Those who rent a movie from Amazon Unbox can keep it for 30 days, unless otherwise noted, but have just 24 hours to view the movie once they start watching it, before it expires.

Studios started renting films online several years ago in hopes of combating illegal downloads. Video downloads have grown more popular since iTunes started selling episodes of TV shows last year.

Earlier this week, Apple sent invitations to the media saying "It's Showtime," for a Sept. 12 event in San Francisco. Sources at several Hollywood studios confirmed they were in talks to sell their films through Apple's iTunes online store. The executives asked to remain anonymous because talks were still ongoing.

Apple secured landmark distribution deals with major record labels in 2003, jump-starting the legal music download market. It was also the first to introduce TV show downloads last October, for $1.99 apiece.

In June, Apple officials said iTunes had sold more than 30 million videos and was selling videos at a rate of roughly 1 million a week.

Amazon.com shares closed down $1.07 Thursday on the Nasdaq Stock Market, then inched up 17 cents to $29.90 in after-hours trading.


Editors: AP Business Writers May Wong in San Jose, Calif., and Gary Gentile in Los Angeles contributed to this report.

Marilyn in Paris, Revealing Herself
Alan Riding

Marilyn Monroe never visited France, and even at the height of her fame in the United States she might not have wowed Parisians. After all, with her dyed blond hair and splashy red lips, she seemed so American. And in the 1950’s and early 60’s, France had its own pouting sex kitten in the sultry form of Brigitte Bardot. But now, while Ms. Bardot is a largely forgotten figure who, at 71, devotes herself to promoting animal rights, Monroe has finally caught the French imagination, not as a sex symbol, not even as a symbol, but as a work of art: beautiful, tragic, forever 36 years old.

This summer she has been drawing reverent crowds to an exhibition of photographs taken by Bert Stern shortly before her death on Aug. 5, 1962. The show, “The Last Sitting,” which runs through Oct. 30 at the small Musée Maillol on the Left Bank, takes its name from the book first published by Mr. Stern in 1982 recording the star’s last photo session.

The 59 images on display here were selected by Mr. Stern in the early 1990’s from among the 2,500 he took of Monroe at the Hotel Bel-Air in Los Angeles in June and July 1962. These prints were later acquired by the New York collectors Leon and Michaela Constantiner, who included some of them in a larger Monroe show, “I Wanna Be Loved by You,” at the Brooklyn Museum in 2004.

But Olivier Lorquin, the Musée Maillol’s director, wanted to show Mr. Stern’s 59 photographs in isolation and give them their own catalog.

“It’s the first time a museum has shown just my pictures,” Mr. Stern, 77, said with evident pride in a telephone interview from his home in New York.

The results, at least here, complete Monroe’s transition from pinup girl to 20th-century Venus. In a catalog essay Mr. Lorquin’s brother, Bertrand, a curator at the museum, evokes the nudes of Botticelli, Rubens, Velázquez, Goya, Ingres and Manet to give Monroe’s sculptured curves a place in art history.

The photographs, which include some of the most explicit images taken of the actress, show her principally in three situations: naked on a bed, baring her shoulders, back and legs; holding a transparent chiffon scarf before her naked torso; and covering her breasts with paper flowers. In other images she wears black cocktail dresses or plays mischievously with necklaces.

Yet if some of these poses might once have been considered shocking (and were, in fact, not published until 20 years after her death), they seem tame today. So rather than being hypnotized by Monroe’s raw sexuality, visitors here are invited to study the pictures for what they reveal about her.

“She was going through a hard time with her health, her career and her men,” Mr. Stern said, recalling that she had just been fired from the set of George Cukor’s unfinished movie, “Something’s Got to Give.” “I thought the photo session would be uplifting for her.”

Mr. Stern was on assignment for Vogue, but he notes in the catalog that he had always hoped to photograph Monroe nude and brought only some chiffon scarves and jewelry as accessories. Monroe’s assistant told him to order three bottles of Dom Pérignon Champagne. Monroe arrived five hours late — Mr. Stern remembers the day as June 22 — and, he says, within 15 minutes she had agreed to pose “topless” with the scarves.

“We worked from about 4:30 p.m. to about 3 a.m.,” he said from New York. “But then Vogue decided the first session was too sexy, and they wanted me to go back two or three weeks later and do fashion. After a while, she said: ‘I’m tired of doing fashion. Can we go back to doing what we did the first day?’ That’s when we did the pictures of her on the bed. By then, she was pretty drunk.”

Vogue published eight pages of the fashion shoot the day after Monroe died; it ran 12 pages of the nude images only in 1982.

While the fashion images are inevitably formal, enlarged black-and-white contact sheets of Monroe playing with the chiffon scarves show her endlessly improvising her poses and expressions; two images in this series also carry thick ink crosses indicating that she vetoed them. The color photographs of her on the bed, in contrast, are both more sensual and less revealing: she consumes the camera with her eyes, but lies on her front or covers herself with a sheet.

Yet it is in some close-ups that Monroe suddenly looks vulnerable: thick black eyeliner and heavy red lipstick suggest insecurity; the hint of wrinkles beside her eyes underlines the passage of time. Still more striking is a fresh scar on her stomach, the legacy of a gallbladder operation a few weeks earlier. And in one black-and-white close-up of her asleep, the Marilyn of legend comes close to looking ordinary.

Writing in the Paris daily Libération, Edouard Waintrop remarked on “her magnificent look, exhausted by time and the disappointments of life.” In the Catholic newspaper La Croix, Emmanuelle Giuliani wrote of “a triumphant beauty threatened every moment by a tragic fragility.” And for Françoise Dargent, Le Figaro’s critic, in this show Monroe “incarnates all the heroines that art has tried to devour through painting, sculpture and now photography.”

Are 1,500 to 2,000 visitors being drawn daily to the Musée Maillol by the knowledge that Monroe would soon die tragically, that this was her last chance to seduce the lens, that these were, in her own way, her final words?

Perhaps. Yet many of the visitors also seem to be discovering her — not as a name, not as an image, but as a person — for the first time.

“Marilyn never came to Paris,” Mr. Lorquin, the museum’s director, said, “but now she seems almost alive here.”

Google to Offer Print-Archives Searches
John Markoff

Google plans to announce on Wednesday that it is offering a service that will permit Internet users to search through the archives of newspapers, magazines and other publications and uncover material that in some cases dates back more than 200 years.

The new feature, to be named Google News Archive Search, will direct Google searchers to both paid and free digital content on publishers’ Web sites, but will not directly generate revenue for Google.

Google would not state how many publishers were taking part in the new service, for which Google has independently indexed material from online databases and will display the results both as part of standard searches and through a new archive search page (news.google.com/archivesearch). However, it announced a number of partners including The Wall Street Journal, The New York Times, The Washington Post, Time, Guardian Unlimited, Factiva, Lexis-Nexis, HighBeam Research and Thomson Gale.

In contrast to Google’s book scanning project, which has led to legal skirmishes with some publishers over copyright issues, some of the partners involved with the new service said they had been pressing Google to offer access to their archives for several years.

The databases included in the service are part of what some have called the “dark Web” because they cannot be “spidered,” or indexed, by standard search engines and so have not been accessible through them.

“We have been asking Google and other search engines to please spider our content for some time,” said Patrick Spain, chief executive of HighBeam Research, a digital content library based in Chicago.

Some of HighBeam’s 3,300 publications and 40 million documents will be available free, while in other cases users will see just the headline and the first 600 characters of a document. To see the whole thing, users must be subscribers to the firm’s service, which costs either $20 a month or a $100 annual fee.

“This symbolizes a major moment,” said Allen Weiner, a research director at Gartner, a market research firm. Google has reached an accommodation with the content companies that will benefit both sides, he said.

In a number of cases the entire archive of publications like Time and The Washington Post will be reachable via a Google search. Time’s entire database is already freely available and supported by advertising. The magazine made its archive, consisting of 4,300 issues and 300,000 articles dating back to 1923, available free through www.time.com last month.

With some publications, including The New York Times and The Washington Post, searchers will be sent to Web sites where they will be able to buy individual articles.

Google executives said that the archive service would not generate revenue directly and that the company did not yet know how it would make money from it.

“We’re not focusing on monetization yet,” said Anurag Acharya, a distinguished engineer at Google who helped develop the service. “This is new territory for us.”

The new service is not encyclopedic, Mr. Acharya said, but instead presents users with a representative list of relevant articles that are arranged in a timeline fashion. The service tries to offer a pointer to the time period that is most relevant to the search query. For example, in the case of the search phrase “moon landing,” an arrow points the user to 1969.

Mr. Weiner of Gartner said he expected Google to link the archive service to its Google Checkout payment system. In the future, he said, video archives are almost certain to be added.

“They have to convince CBS News to make Edward R. Murrow available,” he said.

Silicon Valley to Receive Free Wi-Fi
Matt Richtel

A consortium of technology companies, including I.B.M. and Cisco Systems, announced plans Tuesday for a vast wireless network that would provide free Internet access to big portions of Silicon Valley and the surrounding region as early as next year.

The project is the largest of a new breed of wireless networks being built across the country. They are taking advantage of the falling cost of providing high-speed Internet access over radio waves as opposed to cable or telephone lines.

The project will cover 1,500 square miles in 38 cities in San Mateo, Santa Clara, Alameda and Santa Cruz Counties, an area of 2.4 million residents. Its builders, going by the name Silicon Valley Metro Connect, said the service would provide free basic wireless access at speeds up to 1 megabit a second — which is roughly comparable to broadband speeds by telephone — in outdoor areas. Special equipment, costing $80 to $120, will be needed to bolster the signal enough to bring it inside homes or offices.

The consortium will also offer a fee-based service, with higher speeds and technical support, and will allow other companies to sell premium services over the network as well.

Diana Hage, director of wireless services at I.B.M., said she expected the project to cost $75 million to $270 million. She said the project was meant to be a public service and, by showing the potential for the technology, to develop and promote the companies’ commercial interests.

I.B.M. is providing project management, and Cisco is providing equipment. They are joined in the project by Azulstar Networks, which plans to handle network operations, and SeaKay, a nonprofit group that focuses on providing Internet access to low-income areas.

The consortium was selected to provide access by the San Mateo County Telecommunications Authority, an agency made up of cities and counties across Silicon Valley. After requesting bids last April, the agency received seven proposals, and announced Tuesday that it had selected Silicon Valley Metro Connect. The deal is not exclusive, and the cities are free to invite potential rivals.

Toronto Goes Wireless In Downtown Core

Toronto Hydro rolled out the city's free Wi-Fi - or wireless Internet access - Wednesday morning. The service will be free for six months - and will allow people wireless access to the World Wide Web throughout the downtown rather than solely at pre-existing Wi-Fi hotspots, generally cafes and restaurants.

The project is the largest of its kind in North America, and Mayor David Miller is enthusiastic it'll be successful.

The signal will be available from Jarvis St. in the east to Spadina Ave. in the west, and from Front St. to the south, north as far as Bloor St. Customers will also be able to make phone calls over the Internet and, in time, watch video.

Toronto Hydro spokespersons insist the new initiative won't interfere with existing wireless hotspots in cafes and homes.

The rollout is happening a little later than first planned due to several delays relating to security concerns and public health worries.

The six-month grace period had raised fears among law enforcement officials that criminals would try to take advantage of the service. Users will now have to provide authentification using their cell phones.

There were also health concerns relating to exposure to electromagnetic fields - but Toronto Public Health is reportedly satisfied the network won't pose a safety risk.

For the New Face of CBS News, a Subdued Beginning
Alessandra Stanley

Katie Couric didn’t really need Walter Cronkite to introduce her yesterday at the opening of the newscast, saying with his familiar gravelly voice, “This is the ‘CBS Evening News With Katie Couric.’ ” The network’s new face handled her first day at the anchor desk — a shinier, lighter desk — calmly and competently.

The woman who stood out most last night was CBS’s chief foreign-affairs reporter, Lara Logan, an experienced and unusually pretty war correspondent who took a daring trip into Taliban-held territory in Afghanistan wrapped in a black chador.

“Am I allowed to smile?” Ms. Logan asked her surly mujahedeen escorts. She contrasted the Taliban’s ascendancy with old film from 2004, when she visited American troops in control of the same area and wore a flak jacket and Chanel sunglasses.

That segment displayed Ms. Couric’s commitment to covering foreign news as anchor and managing editor. But Ms. Logan’s arresting screen presence also helped deflect attention from Ms. Couric’s much scrutinized appearance (fitted white jacket over a black sheath dress).

Ms. Couric was subdued throughout the broadcast, perhaps a little spooked by all the fuss over her appointment. The network’s readiness campaign — the focus groups, the listening tour of America, the wardrobe questions — have prompted ample attention and some snickering. CBS executives have complained that Ms. Couric is being held to a cattier standard.

In an interview with Harry Smith on “The Early Show” on CBS yesterday, Ms. Couric delicately allowed that she was partly a victim of “residual sexism.” CBS, however, was perhaps the worst offender. The network recently doctored a publicity picture of Ms. Couric to make her appear longer and slimmer, something it did not do for Bob Schieffer.

American womanhood does not rise or fall on Ms. Couric’s success. She is the first woman to serve as the official solo anchor of a major network evening news broadcast, though plenty of women have filled in as solo anchors. Mostly, Ms. Couric is the first true celebrity to anchor a network news program.

Tom Brokaw was well known when he went from “Today” to the “NBC Nightly News,” as is Charles Gibson, who recently left “Good Morning America” to be the evening-news anchor on ABC. Neither is nearly as high wattage.

No other news figure, not even the glamorous Diane Sawyer, appears as often in People magazine or is stalked as relentlessly by gossip columnists and entertainment shows. And Ms. Couric revels in the show-business spotlight, whether as the focus of an episode of “E! True Hollywood Story” or making cameos on “Will and Grace” and in “Austin Powers in Goldmember.”

CBS is not paying her an estimated $15 million a year for being a woman — that is the cost of hiring the biggest star. And that star factor affects the “CBS Evening News” far more than a new format, new theme music or a redesigned set.

Ms. Couric greeted viewers informally with the words “Hi, everyone.” Her armchair-to-armchair interview with the New York Times columnist Thomas L. Friedman was a conflation of her new role and her old one at “Today,” but Ms. Couric said little, interjecting questions like, “How do you do that?” She was also humble about her closing line, asking viewers to write in with suggestions for a sign-off other than “that’s the way it is” or “courage.”

The first program was certainly a work in progress. Hard news was followed by the softest of features, including a first look at the cover of Vanity Fair showing Tom Cruise and Katie Holmes’s long-unseen baby, Suri (adorable). Perhaps worried that the segment would look too frivolous, Ms. Couric introduced it with a clip of a 1949 CBS newscast with Douglas Edwards showing a baby picture of Prince Charles, as if there were a grand tradition of baby pictures at the Tiffany network.

Infants must be in vogue, though. ABC also showed baby pictures to mark Chris Cuomo’s first day at the news desk of “Good Morning America,” alongside a new weatherman, Sam Champion.

Rosie O’Donnell made a far brasher debut on “The View” yesterday, taking the seat of Meredith Vieira at the head of a glass table on the program’s new, sleeker set (the recently deposed Star Jones Reynolds has been airbrushed from ABC history).

“My name is Meredith Vieira, and welcome to ‘The View,’ ” is how Ms. O’Donnell began, quickly seizing the alpha role. She told funny, sometimes ribald stories, interrupting at will and speaking often and openly about her lesbian relationship and four adopted children. It was a vivid contrast to Ellen DeGeneres, who never alludes to her sexuality on her talk show.

When Elisabeth Hasselbeck, the Zeppo Marx of the foursome, said she donned a bathing suit to take a bath with her baby daughter, Ms. O’Donnell went wide-eyed at her prudery and recalled that when she took a more natural bath with her daughter, the child asked, “When do I get my fur?”

Ms. O’Donnell announced a surprise gift for the audience, a two-day cruise on a Royal Caribbean liner, and then made fun of the sponsor’s lengthy promotional segment.

“You better give us something more than a two-day cruise for that hour-minute-long package,” she said. “The audience has cramps in their arms from clapping.”

Joy Behar tried to hold her own by making a joke at Ms. O’Donnell’s expense and was soundly pushed back. Ms. O’Donnell looked at the camera and said waggishly, “And you all thought I was going to have problems with Elisabeth.”

Ms. O’Donnell is the first boisterously gay host of a major daytime talk show, but that doesn’t make her a touchstone of tolerance. Ms. Couric’s ratings at CBS will not be a test of feminism; they will be a measure of viewers’ flexibility.

Exposure Draft - Copyright Amendment (Technological Protection Measures) Bill 2006
Press Release

Summary of exposure draft provisions on technological protection measures

What is a TPM?

Technological protection measures (TPMs) are technical locks copyright owners use to stop their copyright material from being copied or accessed (eg. passwords, encryption software and access codes).

TPMs are used by copyright owners to support business models for distributing materials such as films and music online and self-protect against increased piracy. The Copyright Act 1968 currently establishes liability for the manufacture and commercial supply of devices or services which circumvent TPMs. The Bill creates new offences for circumventing TPMs and new exceptions to those offences.

Why is the Government changing the law?

The Government is introducing a new TPM scheme to create a more secure environment for copyright owners to release their copyright materials. TPM protection plays an important role in assisting copyright owners to protect their works from piracy. This means more material will be made available digitally and through online distribution channels.

The Government is replacing the current TPM scheme to implement the Australia-United States Free Trade Agreement (AUSFTA). The new scheme also has a mechanism for creating additional exceptions that provides the flexibility necessary to respond to technological developments.

TPMs must be connected with copyright infringement

The scope of the scheme is limited to preventing circumvention of TPMs designed to stop copyright piracy. The scheme will not cover TPMs which are not designed to prevent or inhibit people from infringing copyright. The scheme will not apply to TPMs solely designed for other purposes, such as market segmentation (eg region coding) or the protection against competition in aftermarket goods (eg spare parts) where the TPM does not have a connection with copyright.

New offences

To help combat piracy the new scheme introduces civil remedies and criminal penalties where a person circumvents an access control TPM. It also builds on the existing scheme which already provides criminal penalties for dealing in circumvention devices and services. To discourage the dealing in these devices, the provisions will provide strong criminal penalties of five years imprisonment and/or fines of 550 penalty units (currently $60,500).

New exceptions

The Government recognises that some exceptions to liability are also appropriate where there is legitimate use of copyright material. The Copyright Act already includes a number of exceptions to copyright infringement in special cases. It is not intended that the new TPM scheme should shift this balance in the Copyright Act. The AUSFTA sets out specific exceptions and provides for the introduction of additional exceptions.

The specific exceptions to TPM liability are included in the exposure draft. The exceptions included in the Bill are for:

• interoperability between computer programs
• encryption research
• computer security testing
• online privacy
• law enforcement and national security, and
• acquisitions by libraries and other related institutions.

A number of additional exceptions were identified in the Review of Technological Protection Measures Exceptions by the House of Representatives Standing Committee on Legal and Constitutional Affairs. Some of these will be included in the Copyright Regulations. Including the exceptions in the Regulations provides greater flexibility and improves the responsiveness of the scheme to changes in technology. The Government proposes to introduce the following additional exceptions for:

• reproduction of computer programs to make interoperable products (as authorised by section 47D of the Copyright Act 1968 in so far as it applies to articles)
• the reproduction and communication of copyright material by educational and other institutions assisting people with disabilities (as authorised by Part VB, Divisions 1-3 of the Copyright Act 1968)
• the reproduction and communication of copyright material by libraries, archives and cultural institutions for certain purposes (as authorised by sections 49, 50, 51A, 110A and 110B of the Copyright Act 1968)
• the inclusion of sound recordings in broadcasts and the reproduction of sound recordings for broadcasting purposes (as authorised by sections 107 and 109 of the Copyright Act 1968)
• access where a TPM is obsolete, lost, damaged, defective, malfunctioning or unusable and a replacement TPM is not provided, and
• access where a TPM damages a product, or where circumvention is necessary to repair a product.

The scope of these exceptions will be clarified in the exposure draft of the Regulations which will be available for comment in the next month.

Further review of exceptions

The Attorney-General’s Department is commencing a further limited review of the following proposed additional exceptions and would appreciate your comments by 22 September 2006. The exceptions to be considered would allow circumvention to gain access for:

• making back-up copies of computer programs
• correcting errors in computer programs
• allowing institutions to assist people with an intellectual disability
• making copies of works for inclusion in broadcasts, and
• making copies of copyright material for criticism, review or news reporting by broadcasters.

If the need for these additional exceptions is substantiated in the review process the exceptions will be added to the Copyright Regulations.

Further information about this review is available in the 4 September 2006 ‘E-news on Copyright’ which can be found on at http://www.ag.gov.au/copyright.

Next steps

The exposure draft of the Bill is available for comment for the next three weeks. As the Bill is expected to be introduced into Parliament in mid October, comments on the exposure draft must be received by Friday 22 September.

Please note that submissions supporting additional exceptions contained in the further review of exceptions must be received by Monday 25 September.

An exposure draft of the amendments to the Regulations will be available for comment in the coming weeks, please check the Department’s website http://www.ag.gov.au for updates.

NZ Draws Line on DRM and Trusted Computing
Rob O'Neill

New Zealand’s lead state-sector authority has drawn a line in the sand to ensure government information security is not compromised by new "trusted computing" and digital rights management (DRM) technologies.

The policies, released by the New Zealand State Services Commission (SSC) today, are an acknowledgement of the risks posed by the trusted computing and DRM initiatives being driven by international IT vendors and media organisations.

They also call for new standards and features to be developed and included in trusted computing and DRM systems to meet the needs of international governments.

The policies are designed, the SSC says, "to ensure that the use of trusted computing and digital rights management technologies does not adversely affect the integrity (including availability and confidentiality) of government-held information or related government systems."

The policies are not New Zealand-specific, the SSC says, and other governments are invited to make use of and contribute to them.

"We believe that collaboration between governments is vital to ensure that these technologies develop in a way consistent with government requirements. By agreeing on a common set of principles and policies that reflect their requirements, governments can more effectively influence ICT product vendors to develop standards and features that will meet these requirements, for example a standard for disclosing the DRM restrictions associated with a computer file."

The policies outline basic principles that oppose externally imposed restrictions on access to government information except where government has given informed consent. Government must also have full control of any DRM encumbrance over the master copy of any information it owns.

They also call for a common set of rights definitions and proscribe the use of hardware or software that could modify or hinder access to information held by government. Such systems also cannot compromise information privacy. Agencies must have knowledge about the information flows into and out of such systems.

Trusted computing systems can, broadly, restrict access to information if the client system is not operating properly while DRM restricts access to protect intellectual property.

The SSC is inviting other government, vendors and interest groups wishing to collaborate on the project to visit its Web site.

The "Trusted Computing and Digital Rights Management Principles and Policies" have been developed over the last year by officials from central and local government with input from vendors such as IBM, Hewlett-Packard and Microsoft.

Google Comes to HP's Aid
Stefanie Olsen

Ever heard of bit rot?

Google engineers apparently have in their work reviving an old indexing engine developed and left to rust by Hewlett-Packard.

The search giant announced that it's helped fix software bugs in the 2-decades-old Tesseract, an optical character recognition (OCR) engine originally built by HP Labs and retired in 1995 before the company released the code to the open-source community in recent months.

Why is Google interested in OCR? According to the company, which posted the news Thursday on its code page:

"In a nutshell, we are all about making information available to users, and when this information is in a paper document, OCR is the process by which we can convert the pages of this document into text that can then be used for indexing."

The project dovetails with Google's overall goal to index and organize the world's information--everything from campy high school videos to academic papers that have yet to be digitized. With open-source technology like Tesseract, other engineers or institutions could help digitize more information in the form of papers.

Google helped with the project at the behest of engineers at the University of Nevada at Las Vegas, who have been working with HP to clear the dust off Tesseract in the last two years. UNLV turned to Google to help fix several bugs in the old software, which in its day was one of the most accurate character recognition engines.

Tesseract was judged to be highly accurate in reading paper documents in a UNLV contest in 1995, before HP retreated from the OCR business and put the software into storage.

"Fortunately some of our esteemed HP colleagues realized a year or two ago that rather than sit on this engine, it would be better for the world if they brought it back to life by open sourcing it," Google said.

For the record, bit rot is typically jargon in the computing world for a gradual decay of storage media or buggy software, according to Wikipedia. In literal terms, there's no rust involved.

Really Free Software
Matthew Rand

Mark Shuttleworth is rich enough to cause some havoc in the feel-good Linux community. In January 2000, at the peak of the dot-com bubble, Shuttleworth sold his South African security software firm, Thawte, to VeriSign for $700 million in stock. Shuttleworth cashed out almost immediately, walking away with the entire purchase price, just as VeriSign's stock began its rapid descent. “Life has been kind to me,” he says.

But the 32-year-old has no children and doesn’t feel much need to hang on to his money. He spent $20 million in 2002 to orbit the Earth for a week in a Russian Soyuz. “I don’t intend to create a dynasty,” he says.

Instead, Shuttleworth wants to give back, by offering universal access to a free operating system to run PCs and servers. The world already has several “free” versions of the open-source Linux operating system, but Shuttleworth’s version, called Ubuntu, undercuts them all on price--and works better, according to many respected sources.

Purveyors of supposedly “free” open-source software, Red Hat (nasdaq: RHAT - news - people ) and Novell (nasdaq: NOVL - news - people ), make their money charging support fees for every desktop or server using their software. You can’t get their software at all without paying something for support.

Support fees for Ubuntu (translation: “humanity to others” in a South African Bantu language) are comparable to Red Hat’s and Novell’s, but they’re completely voluntary. Some of Google's (nasdaq: GOOG - news - people ) developers use Ubuntu, for instance, but the company doesn't pay because it services its own machines. Other users might pay only to support those machines they deem crucial to operations.

“ Deutsche Bank could deploy 10,000 Ubuntu servers, and they would not have to pay us anything,” says Shuttleworth in a hypothetical example. “But my guess is for 1,000 of those servers, they would want a 24-by-7 support contract.”

Ubuntu now has 4 million users, half of which are governments, universities and a smattering of businesses. It adds new ones at a rate of 8% per month. After its public release in October 2004, Ubuntu quickly deposed Red Hat's Fedora as the most popular version of Linux on DistroWatch, a Web site that caters to Linux users. Ubuntu works in 22 languages, and Canonical, the company Shuttleworth set up to distribute his software, will send a free Ubuntu CD anywhere in the world. New users rave about the simple user interface, which has gained recent converts in a couple of well-known bloggers who switched from Apple Computer's (nasdaq: AAPL - news - people ) OS X.

In May, Sun Microsystems (nasdaq: SUNW - news - people ) announced plans to offer Ubuntu on Sun’s Niagara chips, which power its newer Sparc servers. While Sparc servers aren’t a particularly big market, the stunt made clear that Shuttleworth aims beyond home hobbyists.

Canonical has burned through $15 million of Shuttleworth's money in two and a half years. He says that it will take him at least another two years to even know whether it has a chance to become profitable, and that it may never return his investment. But that doesn't matter. He's paying all the bills either way, along with setting up a $10 million endowment for the Ubuntu Foundation that's earning interest for a day when his attentions may drift elsewhere. (Shuttleworth tried out in early 2005 for the Donald Trump role on a South African version of The Apprentice, but lost to a politically connected head of a mining company.)

Competitors Red Hat and Novell say that they’re not worried and that Ubuntu's a welcome competitor. Todd Barr, director of enterprise marketing at Red Hat, which has more than 80% of the commercial Linux market, says Ubuntu has done a great job of “energizing the community” around open-source software.

But if Ubuntu starts gaining users in the corporate market, Red Hat has a lot to lose. The Raleigh, N.C., company netted $80 million on $278 million in revenue in its last fiscal year. A price war could swallow that 28% profit margin quickly. But though Ubuntu has enjoyed surprisingly fast growth in emerging economies such as Poland, Lithuania and Brazil, it so far has found little support among corporations, admits Jane Silber, Canonical's head of operations.

Peter Yared, a former Sun engineer who now runs ActiveGrid, a company that services software built on Linux, says that for now his company and most other service vendors support only Red Hat Enterprise Linux and Novell's Suse Linux. What would it take for him to support Ubuntu? “Five customers asking for it,” he says.

The big score, of course, would be to steal users away from Microsoft (nasdaq: MSFT - news - people ), whose Windows Vista has been plagued by delays. “Until now, Linux has only transformed the proprietary Unix market,” says Shuttleworth. “Guys like HP, IBM and Sun, who made their own proprietary versions of Unix. That's pretty much been blown away over the last four years.”

For Shuttleworth, free software is an inevitable progression, whether it comes from his company or not. So he claims to be unafraid of whatever Microsoft might throw at him if it feels threatened. “We're a bit like one head of the hydra, right? If you lop us off, there's a bunch of others that'll spring up in our place.”

It's Not Just Linux: Open Source Has Arrived

Open-source true believers have been saying forever that open source is the way to develop software. It turns out they've convinced most programmers that they're right. According to a newly released IDC study, open source isn't just hype; it's now the way most developers make software.

The study, which analyzed IDC surveys from over 5,000 developers in 116 countries in the spring of 2006, found that developers worldwide are increasing their use of open source. IDC found that open source-software is being used by 71 percent of the developers in the world and is in production at 54 percent of their organizations. In addition, half of the global developers claim that the use of open source is increasing in their organizations.

The study, entitled "Open Source in Global Software: Market Impact, Disruption, and Business Models," wasn't just of open-source-friendly companies like IBM, Novell, Red Hat, and Sun. It also checked in on the open-source business models and developers of Microsoft, Oracle, SAP, CA, AOL, Amazon, and Perot Systems. The results? One way or the other, open-source methods and software are used almost everywhere.

Open source is so pervasive that IDC declares in this study that open-source software represents the most significant all-encompassing and long-term trend that the software industry has seen since the early 1980s. IDC analysts also believe that open source will eventually play a role in the life-cycle of every major software category, and will fundamentally change the value proposition of packaged software for customers.

Specifically, IDC predicts that over the next ten years, open source will lead to vicious software price competition. While end-users will see that effect, IDC's analysts think that the overall effect of open source on the entire life-cycle of software invention and innovation will be even more important.

IDC also believes that despite all the hullabaloo over GPL 2 vs. GPL 3 and other open-source licenses, business models are what are really going to matter in open source's future. For all practical purposes, there will be only three business models that matter: the software revenue model, such as in SugarCRM; the public collective model, such as in Ubuntu or Apache; and the service broker model, which Novell and Red Hat have adopted.

"The use of open source beyond Linux is pervasive, used by almost three-quarters of organizations and spanning hundreds of thousands of projects," said Dr. Anthony Picardi, IDC's senior vice president of global software research in a statement. "The real impact of open source is to sustain innovations in mature software markets, thus extending the useful life of software assets and saving customers money."

"As business requirements shift from acquiring new customers to sustaining existing ones, the competitive landscape will move towards costs savings and serving up sustaining innovations to savvy customers, along with providing mainstream software to new market segments that are willing to pay only a fraction of conventional software license fees," Picardi added. "Open source software is ultimately a resource for sustaining innovators."

Of course, open-source friends could have told them that long ago. Now, however, even corporate IT analysis has caught on to the fact that Linux and open source has fundamentally changed how software is both developed and sold.

That hasn't, however, stopped open-source enemies from doing their darnedest to throw roadblocks into its ways. A perfect example of that happened last week.

Microsoft Corporate VP Gerri Elliott, who oversees Microsoft's public sector business, also sits on the U.S. Secretary of Education's Commission on the Future of Higher Education. Elliott managed to strike from a recent report language that advocated incentives to promote the development of open-source and open-content projects at universities and colleges across the U.S. after the report had been voted on.

While Microsoft may have won its battle with a committee, however, IDC's results show that it's losing the programming war as more and more programmers are flocking to open source.

Free, as in Beer
Lawrence Lessig

Ever since the birth of the free software movement, its defenders have struggled to explain just what "free software" is. If it is free, how do coders eat? And how do businesses that support the software – IBM, Hewlett-Packard – make any money from it?

The standard answer has been a slogan: "Think free," the movement's founder, Richard Stallman puts it, "as in free speech, not free beer." You can charge whatever you want for free software. But what you can't do is lock up the knowledge that makes it run. Others must be allowed to learn from and tinker with it. No one is permitted a monopoly on the teaching that stands behind it.

A bunch of Danes, however, apparently didn't get the memo. In June, a Copenhagen artists' collective called Superflex released version 3.0 of a new beer called – you guessed it – Free Beer. "Free beer?" you ask. "Think free," Superflex members helpfully explained at the launch, "as in free software." Under the supervision of Birthe Skands, former chief of development at Carlsberg Beer, the brewery is now scaling up quickly to meet unexpectedly high demand. The first batch of 2,850 70-cl bottles (generous at about 24 ounces, so the natural tendency is to share) sold out practically overnight. Distribution deals are being negotiated with other breweries, especially overseas. And Superflex has now established a Free Beer Foundation to spread the profits to other like-minded projects.

What makes Free Beer free is the same thing that makes free software free: Its recipe is open and licensed freely. Anyone can make improvements. But anyone who distributes an improved version must release the changes as well. Superflex keeps a log of the updates at www.freebeer.org, and it will release a new version every six months. Skands is inviting the world to help her make better beer, and in exchange the brewery is keeping the knowledge free for everyone.

Copyright mavens will wonder if such a license could really work in the US (where recipes are not copyrightable). But that quibble has slowed neither this particular "open business" nor the movement of which it is a part. Indeed, we're seeing an explosion of open source businesses. Some are about developing software, like the Firefox browser. Others simply leverage the model of free software to forge a different kind of business, from the wildly popular Web-tagging tool del.icio.us and the blog-tracking search engine Technorati to the extraordinarily successful video site Revver, which embeds an ad bug into freely licensed user-generated videos, then pays the users as the clips spread. All of these businesses build upon the value created by their users, while keeping that value free for others to build upon as well.

When we begin to look at the range of examples – OpenBusiness.cc has a prominent collection – we might learn something from the pattern. Some have already seen enough to publish their insights. The short list of these books is led by MIT professor Eric von Hippel's Democratizing Innovation. Open source businesses, von Hippel explains, know that their customers are not idiots. These companies encourage customers to tinker with their products; they then learn from this tinkering how to make the products better. Yochai Benkler's The Wealth of Networks places this commercial practice in a larger and perhaps more significant social context: Although peer production is profitable for business, writes Benkler, "we are in the midst of a quite basic transformation in how we perceive the world around us and how we act, alone and in concert with others." What he calls nonmarket peer production is a critical part of this transformation. The trick is not making it happen, but making it flourish. And if my Wired boss, Chris Anderson, is right (and obviously, he must be) that we've entered the land of the long tail – where digital technology supports a massively more diverse range of products and models for production – then, as he puts it, making the consumer a producer is an excellent way to move a business up the long tail. In this model, free knowledge can drive a particular kind of free market – at least a kind that seems to flourish in a digital world.

Stallman is annoyed that Superflex calls its project "open source beer": "You should have called it 'free software beer,'" he said prior to the Free Beer launch. But he no doubt recognizes the potential of this hack. As thousands are surprised by the quality of this fantastic beer yet puzzled by its name, at least some will read the explanation prominently printed on its large and striking label. And a few of those may then think a bit more about what helps innovation flourish. It's not any magic word, like free or open. It is instead a practice that encourages the widest range of innovators. Superflex has inspired this practice with beer. And perhaps with much more as well.

How to Discover Your Real Power Supply Manufacturer
Gabriel Torres

More and more traditional companies from other segments are entering the PC power supply market. However, the majority of them actually don’t manufacture their products. In this short tutorial we will teach you how to find out who is the real manufacturer of a given power supply.

We can separate power supply companies into three groups: the ones that design and manufacture their own products (the minority), the ones that design their own products but hire another company to manufacture the products for them, and the ones that use OEM products, i.e. another company designs and manufactures their products, but adding the label, box and manual from the contracting company. Almost all well-known manufacturers that aren’t originally from the power supply business fall in this last category.

Is this bad? Maybe. As the quality of the power supply will not depend on the labeled brand but on the real manufacturer, a given brand can provide a terrific product line on their original business (memory, cooling or whatever) but a different quality level for their power supply line. But we strongly believe that manufacturers will choose other manufacturers with the same quality level or they would get burned pretty quickly.

We can also have the funny situation of two different brands providing exactly the same power supply, as many original manufacturers are providing products to more than one brand. In some situations you can also find the same power supply on the market under the real manufacturer brand.

Everything will depend on the agreement between the two companies, as this agreement will say if the original manufacturer can or cannot sell their products to other companies. Sometimes they will agree that products picked to be manufactured under “X” brand will be exclusive, but the other products can be sold to other companies. When this happens even if you won’t find two companies with the exact same product on the market, you may find very similar products being sold by two different companies. And this is happening a lot lately.

Keep in mind that a manufacturer can buy power supplies from more than one source. If you find out that model ABC from brand MNO was manufactured by company XYZ, this does not necessary mean that all other models from MNO will also be from XYZ.

So how can we find out who is the real manufacturer of a given power supply? On the label of almost all power supplies there is an Underwriters Laboratories (UL) record number, usually very small under a logo that looks like an “UR” seen in the mirror (we will show this logo on the pictures below, so you will know exactly how this logo looks like). With this number, you can go to UL’s website and check who is the owner of that record.

Click here to open UL’s website Online Certification Directory.

Click on the link above and enter it on “UL File Number” and then hit “Search”. Then you should see the real manufacturer name. After you found the real manufacturer name, you can see on our Power Supply Manufacturer List the manufacturer’s website address. You can try, for instance, locate your power supply real model.

JonnyGURU pointed out to us that sometimes the manufacturer will pay for getting an UL record under their name, even thought they don't really manufacture the product. So sometimes the UL record will list the brand under which the power supply is being sold, not the real manufacturer.

Unfortunately power supplies that aren’t targeted to be sold in the USA may not have an UL number.

Don’t Keep All Your Data in One Stash
Damon Darlin

If you put stock in a recent survey from Symantec, the company behind the Norton line of computer protection software, 57 percent of computer users who store personal data on their PC’s conscientiously back it up.

Those people can feel very good about themselves, because the same survey found that a quarter of computer users have lost computer data like documents, photos and music files, most commonly when the computer crashes.

For all those people who are feeling pretty good about themselves, here is something else to worry about: what happens to those beloved family photos or your extensive music collection if something should happen to your PC and your backup? A fire, flood or earthquake could destroy the backup sitting inches from the PC.

For years, big companies have been storing their backed-up data in multiple locations to protect it from disasters. The data of consumers also has value, and it is not always just an emotional value — like 99-cent iTunes music files, or videos downloaded at $10 a pop. It is not hard to accumulate a few hundred dollars’ worth of content that needs protection.

The recognition of the monetary value of data is one force driving the sales of external hard drives. The NPD Group, the market research firm based in Port Washington, N.Y., estimates that the market for external hard drives will grow 33 percent this year, to a $500 million category. That is largely because devices like the Western Digital My Book, Maxtor OneTouch or the Seagate Pushbutton Backup drives are easier to use and more stylish than past models.

Moreover, for about $150 you can get 160 gigabytes of storage, or about twice as much as you got for that price just three years ago.

Seagate, the leader of the hard-drive industry, is trying to solve the off-premises backup problem. It is pushing a device from its newly acquired Maxtor unit that allows consumers to back up data at home and off premises. The 500-gigabyte device, called Fusion, allows consumers to link the external drive to the home network so any computer on the network can grab content there.

Access is also possible from outside the home. The device comes with some elegant software created by Fabrik, a start-up company in San Mateo, Calif., that turns the hard drive into a personal version of Flickr or YouTube — you can invite others to view content. Some of the content on the drive can be designated public and the rest remains protected. The data can also be stored on Fabrik’s servers for 99 cents a month for one gigabyte of data and 49 cents for every gigabyte after that. One gigabyte is enough room to store 250,000 pages of text, 200 songs or about a thousand photos.

The network-attached storage category has not been as popular as regular hard drives, said Stephen Baker, vice president for industry analysis at NPD, because of privacy and trust issues. Consumers are wary about security once their data is stored or accessible remotely.

But the Maxtor Fusion may have other problems gaining acceptance. At about $700, it is nearly twice the price of other 500-gigabyte hard drives. Current Analysis, a San Diego market research firm, said consumers would pay only a $100 premium for this type of software and service.

The other problem comes after the box is taken home. The first part of setting up the storage device is a joy. Plug in the cables and turn it on. Run the software on the enclosed disc and within five minutes you can move data, photos, videos and music to the storage and to every device on your network. The second part, enabling the device to provide access to data from outside your home network is — well, let Maxtor’s user guide describe it: “This portion of the setup may prove challenging to complete.” Owners are faced with bewildering instructions about configuring the system to reroute dynamic D.N.S. addresses.

If you know what that means, then you won’t have a problem. For everyone else, be prepared to call Maxtor’s technical support to get it running. Better setup software could solve this problem.

(If you insist on knowing, computers seeking access to the home storage device from outside the home network have to know the address of the device. But because most Internet service providers do not assign a static address, an additional service has to be used to locate and route requests to whatever address your service provider has assigned to it.)

That said, the Fusion does what it promises. It is easy to store data and to designate what the public can see.

Mr. Baker predicts that the device will take some time to catch on. “It’s a next-year product,” he said. But David Tang, vice president for marketing at Fabrik, says it will appeal to the type of people using MySpace and to other creative types who want to share their content by streaming music or video to friends.

There are other solutions. Apple has been offering a backup service to Mac users who sign up for a .Mac account. It sells a one-year membership that entitles a user to one gigabyte of storage for $100. An additional three gigabytes costs $100 more.

There are several online backup services that work with the backup program on Microsoft’s XP operating system. For instance, Xdrive.com offers five gigabytes for $100 a year, and Backup.com offers the same amount for $500 a year.

It is worth shopping around for the best deal or considering a work-around. Google offers 2.7 gigabytes of storage space for anyone with a Gmail account. Although most people use it for archiving their e-mail messages, that is enough space to store 500 songs or 2,500 photos and a few spare Word files. You can do that by sending yourself an e-mail message with the files as attachments.

There’s an even easier way to take advantage of Google’s largess. Users of Internet Explorer can download a program called Gmail Drive. (A Google search for the term will point you to download sites.)

If you are using the Firefox browser, an even better downloadable add-on is Gspace. (You can find it at addons.mozilla.org/firefox/1593 or www.rjonna.com.) It puts a button on the toolbar of the browser that with a few clicks puts the file right into your Gmail account. Rahul Jonna, the Phoenix programmer who created it nine months ago, said the Gspace hack has been downloaded almost 500,000 times.

Its novelty may be limited. Google is considering a backup service called GDrive, and Microsoft says it will have a backup service called LiveDrive as part of its new operating system.

I.B.M. sees an opportunity in this consumer market for backup. It sells a consumer program named Tivoli that automates backup. Every time a file is changed, a copy is stored on the PC’s drive and a copy is sent to a backup device or a remote server. (That service is separate; you will not get to use I.B.M. servers.) The $35 program can be bought online only, in the “software downloads” sections of the Web sites of Circuit City, CompUSA, OfficeMax and Staples. I.B.M. is also selling the software to cable Internet providers, like Comcast, which will offer its customers automated backup to their servers.

Symantec, when it was done surveying the backup habits of users, decided it needed to jump in, too. Its new PC protection program for consumers, Norton 360, available in March, will include a function for backing up data online.

So there

Is It Over? Log on and See
Melena Ryzik

AT the end of a teary call last January, Louise Zervas hung up the phone and realized her five-month long-distance relationship was over. Then she did what many people her age do after they have broken up: She went online and updated her MySpace profile, changing her personal status from “In a relationship” to “Single.”

“I wanted a clean break,” said Ms. Zervas, 29, a marketing executive in San Francisco.

Her ex-boyfriend, James Kenler, 27, a record label owner in Chicago, did not know about the cleanup, though, until a friend alerted him to Ms. Zervas’s updated MySpace page.

“I got a frantic phone call from him the next day, saying, ‘I thought we were still talking through this but apparently you’ve made your mind up, because your MySpace status says single,’ ” she recalled. “I felt really bad because I wasn’t trying to hurt his feelings or be malicious. I just thought I was following protocol — that that’s what you’re supposed to do.”

Mr. Kenler disagreed. “There’s a waiting period,” he said, “before unleashing your profile on these sites.”

Breaking up gracefully is always hard to do. But in an age when young people practically define themselves by what is on their MySpace or Facebook profiles, properly noting your status — single, in a relationship, married, swinger — and dealing with other online mementoes has posed a host of new protocol challenges.

“It’s like this whole new etiquette,” said Ms. Zervas, who is now friendly with Mr. Kenler. “And nobody has really acknowledged the how-to’s because it’s not really formed yet.”

Unlike online dating networks, whose clientele is self-selected with a single goal (romance) in mind, the public sites air users’ dirty laundry to a broad interconnected audience of friends, family and colleagues. That has its benefits, especially when someone wants to broadcast a change of heart. Last month, for instance, Jenna Jameson, the porn star, became MySpace-single after separating from her husband.

For dumpees, though, the mouse-click announcement may be too quick and easy.

“It’s a tender time, and it just exacerbates it when you take it into a public forum with all your friends on it, and their friends on it, and everybody’s all linked up,” said Diane Mapes, author of the guidebook “How to Date in a Post-Dating World.”

“Emotions can be complex enough,” she added, “and every time you throw some new fabulous dating gizmo out there, and people try to figure out how to use it, it makes it more complicated. You need to learn a new set of rules.”

But what are the rules? How long are you supposed to wait to change your status after a breakup — or, for that matter, when a relationship begins? And beyond checking off status, what should you do with sexy comments a fling has posted? Or when do you downgrade an ex’s online avatar from your list of top friends?

Without a common understanding of how to approach those changes, there is a lot of room for confusion and heartache, say dating experts, therapists and people active on the sites.

“If you’re dating someone for a long time and they immediately change the status, it hurts more because you don’t want them to get over it that quickly,” said Elena Price, 20, a college student in Philadelphia.

Her last boyfriend, she said, “canceled” their relationship on Facebook a week after they broke up, and “it stung because it sort of shattered my last hope at getting back together,” she wrote in an e-mail message. Then she discovered that he had created a MySpace account listing himself as single even before he broke up with her. Ouch.

While some behavior is clearly caddish, much is open to interpretation. Even the sudden post-breakup switch from “relationship” to “single” may not be as cold as it seems.

“It could be a very painful and sad — ‘Oh, I can’t believe that I’m single’ — and then you’re painfully and reluctantly clicking the button,” said Alexander Cathcart Dobbs, 25, a graphic designer in Boston. “I did that. I was, like, crying, and readjusting my MySpace profile.”

Then again, some behavior is clearly meant to spite. One of Mr. Dobbs’s exes would frequently change her status to single — “to provoke me,” he said.

Manipulation like that is common, said Diane M. Berry, a clinical therapist in Manitowac, Wis., and the author of “Romancing the Web: A Therapist’s Guide to the Finer Points of Online Dating.” “So-and-so was my friend and we had an argument and she demoted me,” is a weekly refrain in Ms. Berry’s office. “It tends to cause hurt and anger,” she said.

To provide context for those swings, Ms. Mapes suggested that MySpace develop a new button.

“Instead of ‘single’ or ‘in a relationship,’ it should be, ‘We’re currently having a spat’ or ‘She doesn’t appreciate me,’” she said. “Since it is a gray area, we maybe need the gray-area button.”

Actually, in this case the technology is already there: On Facebook, which is geared toward college students, the categories are Single, Married, Engaged, In a relationship, and It’s complicated. The categories on MySpace, which skews older, are Single, In a relationship, Married, Divorced and Swinger.

But no matter how sensitively done, any tweak to a site could be upsetting. “Seeing that was like a kick in the stomach,” said Micaela Coady, 30, a health researcher from Brooklyn who was so affected by an ex’s status shift that she abandoned her Friendster account (she now blogs instead).

And the issues are no less complicated at the birth of a relationship.

After pressuring a guy she had been seeing into setting up a Friendster profile (back in 2004, when Friendster was cool), Shanta Thake, 26, a club booker in Manhattan, was alarmed to find that he had listed his status as “in a relationship.” Though they had been dating for several months, hers still said single because they hadn’t had ‘the talk’ yet, she said.

“I freaked out and called my best friend saying things like, ‘I don’t know if I’m ready for a relationship right now,’ ” she said.

By the time she had calmed down enough to amend her own profile, she found that her boyfriend — having presumably seen Ms. Thake’s status — had changed his back to single. They broke up shortly thereafter.

“I think the whole thing is so ridiculous,” Ms. Thake said. “Even when I was freaking out, I was thinking, is this really happening? Am I really going to decide this because I am unable to have a conversation with my boyfriend about our status, I have to look it up online? Has it really come to this?”

In a word, yes.

And so it requires a new etiquette, but even experts can’t agree about what that is. When it comes to breakups, some believe in a mourning period. (Wait a week, Ms. Mapes says: “You want to give it adequate time to make sure it is a breakup.”) But others advocate for quick removal, like a Band-Aid. “If it’s really over, you don’t want to hang on to it,” said Peggy Post, great-granddaughter-in-law of Emily Post and an etiquette expert.

Rules for other post-breakup issues, like deleting photos and comments, are also ambiguous: It depends upon what they are or how jealous your new boyfriend or girlfriend is, site users said. And demoting friends is never easy.

Still, declaring status can be illuminating.

“I thought it was sort of dramatic to go ahead and change the status,” Mr. Kenler said about Ms. Zervas’s clean break. But without that, “the relationship may have dragged on and been worse.

“The biggest problem in our relationship,” he added, “was miscommunication.”

Until next week,

- js.

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Old 07-09-06, 09:03 PM   #3
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Join Date: May 2001
Location: Moses Lake, Washington
Posts: 2,563

The sun could send enough energy to Earth in as little as an hour to provide for all the world's energy needs for one year.

We're wasting a lot of energy.
So to generate enough solar power for one day all we have to do is cover 22,481 square miles in solar panels. It's only .0114% of the earth's surface, so maybe it won't be a total ecological disaster when we cast an area the size of West Virginia into complete darkness. All those plants and animals that were puting that "wasted" energy to use would have to live somewhere else, I guess.

I'm being facetious, of course. Solar farms are distributed according to local power needs and weather patterns. I sometimes wonder if I put the unused space on my roof to better use by covering it with solar panels, if it would offset my energy bills enough to make them worth the cost. Colorado is sunny most of the time, but hail storms cause millions of dollars in roof damage every summer, and in the winter the snow sometimes takes days to melt away. I don't think I'd want the hassle of cleaning the panels every day and replacing them as they break.
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