|27-02-08, 11:28 AM||#1|
Join Date: May 2001
Location: New England
Peer-To-Peer News - The Week In Review - March 1st, '08
"What is going to stop people stealing content is not the law — these people already know it is illegal; what will stop people is a technical solution that adequately protects both people's rights and copyrighted material. But we do not have one." – Alex Brown
"It should also be noted that some of the most valuable and significant intellectual property and creative works can't be copyrighted. For example, Mickey Mouse is copyrighted, but E=MC2 could not have been. Which was truly the more significant creative work?" – Dallas Weaver
"We’re covering a candidate who’s lost 11 straight primaries. They’re covering a candidate who has won 11 straight primaries." – Mike Glover
"Maybe that’s just the reality of the world that we live in. When this genie gets out of the bottle, that’s it." – Judge White
"We will reinsert the DNS settings." – Wikileaks domain registrar Dynadot
Interesting things happening in the Connecticut courts like a judge who stands up to the copyright cartels.
Janet Bond Arterton, United States District Judge for the District of Connecticut, had the boldness to insist the RIAA show some files were actually swapped before they could sue somebody for actually swapping some files. Seems the least they should do, but it’s not the way things usually work with these robo suits. Believe it or not most judges accept screenshots of “share folders” as proof of violation – regardless if any sharing has truly occurred, or indeed if the so-called titles represented on screen relate in any fashion to material owned by the plaintiff. Sometimes neither is true so common sense scored a victory in New Haven this week.
There’s been an additional bit of undisguised optimism – mostly on the bulletin boards – that the judge was also saying distribution had to be active in order to rise to the level of infringement, that even if the files in the share folder were real, and the files had been downloaded, it wasn’t a copyright violation until an uploader actively pushed them out to a downloader, the equivalent say of going down to the post office and mailing a copy of a file to a friend. That without “active participation” one can’t be liable for distribution any more than one would be if after having left a music library unattended during a party, a guest wandered in and cloned some CDs. Sound judgment and years of legal precedent dictate responsibility lays with the one who did the copying, not the library owner, and while some file-sharing programs do allow the active sending of files, like WASTE for instance, most do not. A full reading of the judge’s order however shows her avoiding this aspect of the argument, but it will eventually come up for review and someday someone will rule on it. It may even be Arterton.
Still I think file-sharers might hold off popping the champagne corks, at least until a few more cases make it through the courts. The Elm City judge's concern was more about facts than philosophy, and whether or not so-called passive distribution breaches copyright law wasn’t directly at issue here. Instead her order was targeted at record companies who demand to sue swappers after merely presenting to the courts alleged screen shots of defendants’ share folders or other such ephemera. No small thing that but this cautious Connecticut jurist didn’t insist an upload had to be actively commenced in order for infringement to occur, she said that in this particular case at least the plaintiff hadn't shown that an upload occurred at all. That other judges routinely ignore such fundamental principals exposes a dangerous lack of essential legal competence, but it doesn’t offer insights about any particular aspect of the law. That’s one we’ll have to wait on.
March 1st, 2008
RIAA rip-off redux
Artists say they want their music site dough
Artist managers are girding for battle with their music overlords over when their clients are going to see some of the dough negotiated last year in copyright-infringement settlements with a host of Web sites.
Universal Music, Warner Music and EMI - either collectively or individually - settled claims with Napster, Kazaa and Bolt.com. Napster alone had to cough up $270 million.
The fourth major label, SonyBMG, was not part of the suit because Napster was owned by BMG parent company Bertelsmann.
All four struck separate deals with YouTube that included revenue participation.
A contingent of prominent artist managers claims that little to none of that money has trickled down to their clients. They are now considering legal action.
"Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for," said lawyer John Branca, who has represented Korn, Don Henley, and The Rolling Stones, among others.
"Some of them are even talking about filing lawsuits if they don't get paid soon."
Record label sources said corporate bosses are still deciding on how best to split the money. In determining the payout, they said not every artist is owed money and it must be calculated with regard to the level of copyright infringement for each artist.
What's more, these sources said that after the labels recouped their legal expenses, there wasn't much left to pass along to the artists.
But a source on the artists' side said that is an argument heard all too often in the music business.
Getting money out of the major labels is never easy, but given the industry's downward financial spiral it is exponentially more difficult now, the source said.
"The record labels are experts at transferring money around and putting the onus on artists managers to find it."
Irving Azoff, the legendary talent manager for The Eagles and Jewel, among others, echoed that sentiment.
"They will play hide and seek, but eventually will be forced to pay something," Azoff said. "The record companies have even tried to credit unrecouped accounts. It's never easy for an artist to get paid their fair share."
Reps for the three labels dispute the notion that they are withholding settlement money.
A spokeswoman for EMI said the label has started the process of "sharing proceeds from the Napster and Kazaa settlements with artists and writers whose work was infringed upon."
Warner Music's representative said the label "is sharing the Napster settlement with its recording artists and songwriters and at this stage nearly all settlement monies have been disbursed."
A Universal Music spokesman said the label's policy "is to share its portion of various settlements with its artists, regardless of whether their contracts require it."
Filesharing Law 'Unworkable'
The UK government's plan to fight online piracy is doomed to fail, according to experts
The BBC's iPlayer allows the legal download of programmes
Any move by the government to introduce legislation that forces the UK's broadband providers to police the internet by clamping down on illegal sharing of copyrighted music and movies would be technologically unworkable and create a legal minefield, experts have warned.
In a wide ranging review of the UK's £60bn creative industry, culture secretary Andy Burnham this week called on internet service providers (ISPs) to come up with a workable plan to stop music and movie piracy, or the government will bring in its own laws next year.
The industry's trade body, the ISPA, has spent months in discussions with music and movie companies about ways of preventing illegal filesharing, but buoyed by recent success in France, the major record labels and Hollywood studios have lobbied the government hard for faster action.
One senior internet industry executive, who did not wish to be named, said this intensive political lobbying has "given the government a completely false idea of what is possible with current technology".
Legal experts, meanwhile, pointed out that if the government does opt for new legislation it will need not only to rip up parts of the current legislation and amend data protection laws, but its plans could fall foul of wider human rights laws that entitle people to a degree of privacy in their communications.
"The big issue, frankly, is the impossibility of the internet service providers getting in amongst it and monitoring what goes on on their networks," warned Alex Brown, internet law specialist at Simmons & Simmons.
"Technically speaking, it's near impossible to do. The sheer volume of traffic means it just cannot be done fast enough. And this is a technical problem, not a legal problem. What is going to stop people stealing content is not the law — these people already know it is illegal; what will stop people is a technical solution that adequately protects both people's rights and copyrighted material. But we do not have one."
The sheer scale of online piracy in the UK has been highlighted by new research from price comparison site Moneysupermarket.com today, which shows that nearly one in five British internet users admit to having illegally downloaded copyright material.
Rob Barnes, head of broadband and mobiles at moneysupermarket.com, said many internet users do not actually know that the content they are downloading is illegal when they access it.
"The government is trying to prevent this growing problem, but it's clear people are not always aware they have infringed on copyright law," he said. "Perhaps the government should focus on educating people on the penalties of copyright [violation], as well as what actually constitutes piracy."
Among the 26 commitments made by the government to help the creative industries is a pledge to "promote better understanding of the value and importance of intellectual property" through school education programmes. It also wants to increase the fine that magistrates can impose on "pirates" from its current limit of £5,000.
The music and film industries welcomed the government's backing in the fight against piracy, which they claim lost them £460m in 2006, but the government's Creative Britain: New Talents for the New Economy document provided little detail of how the ISPs are supposed to stop the online pirates.
The music labels and Hollywood studios, however, believe recent plans announced in France could provide a blueprint for the UK market. Last year French president Nicolas Sarkozy backed an industry proposal that would see the country's ISPs monitor all their traffic for illegal filesharing.
British internet technology experts, however, believe the lack of detail in the French proposal shows the sheer complexity — and expense — of any system that requires service providers to check out every bit of data that travels across their networks.
Data traversing the internet is split into "packets", around which is wrapped information about where that piece of information is going. Like the address on an envelope, that data can easily be read, and initially it provided information to suggest the contents of the packet might be illegally copied copyrighted material. But peer-to-peer filesharing technology has evolved and now merely reading the so-called "packet header" will give no clue as to what's inside.
Inspecting the actual contents of the packet is much more difficult. It is also currently illegal. Under the Regulation of Investigatory Powers Act (RIPA) the UK's ISPs are not allowed to inspect the contents of packets without proper authority and only when such action is necessary and proportionate in the context of the issue being investigated.
These powers are used by the police to intercept and copy email and other traffic in terrorism investigations. Legal experts doubt that snooping on everyone's internet traffic just to protect the commercial interests of the music and film industries would be allowed under the current legislation. In addition, the police do not translate their intercepted material in "real time", as would be necessary in any UK-wide piracy clampdown.
Experts also warn that even if the technology evolved to make real-time, so-called "deep packet" monitoring — or "sniffing" — easy and cheap to do, the serious filesharers would simply start encrypting their content. As a result, only first-time or inexperienced filesharers would end up being caught.
Already there are several programs that use the popular bittorrent filesharing technology — such as Azureus, which can encrypt files so they are harder to spot.
One suggestion mooted by the music and film industry is for the ISPs to flag up as potential filesharers any customer with high data usage. But the booming popularity of legitimate broadband TV services such as the BBC's iPlayer and ITV.com, as well as the arrival of downloadable film rental services from sites such as Amazon, means that being a heavy consumer of bandwidth will increasingly be no indication of wrongdoing.
One voluntary way of dealing with major filesharers might be for the ISPs to prevent their users accessing the "tracker" websites that help filesharers set up the peer-to-peer connections they need in order to swap content.
A similar voluntary system of website blocking already exists for sites known to contain child pornography. But such a blacklist of sites risks wiping out all trackers, some of which do not signpost copyrighted material.
Forcing the ISPs to start monitoring what their customers do also ends their legal protection as a so-called mere conduit, leaving them open to lawsuits if they cut off a user who has not been doing anything illegal.
The ISPA warned today that any forced monitoring of internet traffic could lead to the collapse of many of the country's smaller ISPs.
Getting a workable system in France is easier as the country has less than a dozen ISPs. In the UK there are more than 140, and if they have to start spending millions of pounds installing new equipment, many of the smaller players could go bust without support from the hugely profitable music and film industry.
"Internet service providers are not law enforcement officers," said a spokesman for the ISPA. "And rights holders such as film and music companies already secure their rights in other formats, so it's only right for an industry to help pay to protect its intellectual property."
A spokesman for the Department for Business Enterprise and Regulatory Reform said: "We would of course prefer a voluntary solution and we are certainly not pretending it will be easy."
The government intends to consult the internet industry about possible steps it can take after Easter, but if the industry cannot come up with a solution then the government will look at legislative solutions in 2009.
Tennessee Eyes Bill to Make Colleges Stop Online File Sharing
Andrea L. Foster
The U.S. House of Representatives is not the only legislative group that is trying to force colleges to be aggressive in stopping students who swap music and video files illegally online. A bill introduced last month in the Tennessee State Senate, SB 3974, would force public colleges in the state to police their networks to prevent illegal file sharing.
The bill would require colleges to have a policy that prohibits infringement of copyrighted works via the institutions’ networks, and to analyze their networks to determine whether they are being used “to transmit copyrighted works.” The legislation would also demand that colleges either certify to the Tennessee Higher Education Commission that their networks are not used to transmit copyrighted material, or take steps to prevent the online infringement of such works. A companion bill has been introduced in the Tennessee House of Representatives.
The Senate Education Committee is scheduled to discuss the bill Wednesday.
Last year the Motion Picture Association of America and the Recording Industry Association of America named the University of Tennessee among the campuses with the worst records of online copyright infringement.
Update: Committee has deferred taking up the bill until March 5.
Filesharing is a Virtue
An entertainment industry that doesn't understand its audience is pushing illiberal, unworkable plans to monitor downloads
Filesharing is the favourite whipping-boy of an entertainment industry refusing to update its business models for the P2P generation.
The latest result of its pressure on the UK government is a Green Paper on the creative industries, published today, recommending internet service providers be required to take action against users suspected of downloading copyrighted material without permission. Should they fail to mend their ways, such users face termination of their internet access.
There's no mystery about how this will work. Bargain-basement host Tiscali have already been operating a similar scheme in co-operation with the British Phonographic Industry. The ISP has been monitoring filesharing "swarms" dedicated to a copyrighted work, and seeing how many in the swarm are their own customers. (Tiscali knows this because of the unique sets of IP numbers handed out to each ISP and passed on to all their users.) Embarrassingly for the government, the system is already in disarray over arguments about who should pay for sending written warnings and shutting down customers' access.
British citizens should object strongly to these proposals. In Europe, any database of electronic information traceable to individuals is properly regarded as a threat to the fundamental right to private life. A recent European Court ruling requires specifically that member states deciding to make ISPs disclose personal information about suspected file sharers should do so with due respect for privacy. In addition, there are two Europe-wide sets of standards applying to the kind of activity proposed here: Article 8 of the European Convention of Human Rights on private life and the Council of Europe's Convention 108 on Personal Data Processing. They require that the purpose of the interference with privacy be "legitimate" and "proportional".
"Proportional" means that a government wishing to force ISPs to take this kind of action has to be able to show it can achieve its stated purpose. These proposals are hopelessly inadequate in this respect, as any basic diligence should have shown. It is impossible to monitor even a small proportion of potentially infringing BitTorrent files available, and even then BitTorrent traffic is only one filesharing protocol among many. Moreover, those for whom downloading has become their primary way of consuming media will simply protect themselves by using other systems, or already available encryption. These proposals therefore represent, at best, a spectacularly expensive way of inflicting symbolic punishments on an unlucky few. Proportional they are not.
Language like "national security" and "public safety" is often used to describe what counts as "legitimate". Incursions on our privacy are permitted under EU law, but only in cases that "satisfy a pressing social need" - not, as is the case here, merely to comply with the wishes of a powerful business lobby. ISPs will resist this because they know that acquiescing will be expensive and expose their businesses to massive liability. We citizens must resist it on the grounds that is unacceptable to sell our privacy to support an outmoded industry. Enough of our civil liberties have been eroded under the shibboleth of terror - let's not have them further eroded under that of piracy.
With the government's proposals looking technically and legally suspect and increasingly expensive for ISPs, perhaps it is time to investigate new business models for the entertainment industries? P2P distribution represents an unprecedented opportunity for creators to distribute their work cheaply and efficiently to people who want it. All we need now is a progressive business model that can again recognise sharing as a virtue, not a vice.
Appeals Court Attorneys' Fees Ruling Could Impact P2P Suits
One of the risks involved in bringing a copyright infringement lawsuit is that you might be forced to pay the defendant's attorneys' fees if you decide to back out of the case and dismiss the lawsuit voluntarily. It has happened twice to the RIAA so far, but it may become more commonplace now that an Appeals Court has overturned a lower court's denial of attorneys' fees in a copyright infringement case.
Riviera Distributors v. Midwest Electronic Specialties involved a pair of companies that sell video poker machines. Riviera sued Midwest for copyright infringement in 2006, accusing its competitor of infringing its copyrights for software used in its Stars and Stripes video poker game.
Riviera eventually moved to dismiss the case without prejudice (meaning that it could be refiled at a future time) after concluding that it lacked sufficient evidence to win at trial, but still thought it might be able prove its case at a future point. The judge decided to dismiss the case with prejudice, making Midwest the prevailing party. Midwest subsequently asked for attorneys' fees, a request that the District Court denied.
In overturning the lower court's ruling, the Appeals Court judges cited a 2001 Supreme Court decision which says that a party prevails "when it obtains a 'material alteration of the legal relationship of the parties,'" not simply because the judge has sustained the position of one of the parties on the merits of the case. "Midwest obtained a favorable judgment. That this came about when Riviera threw in the towel does not make Midwest less the victor than it would have been had the judge granted summary judgment or a jury returned a verdict in its favor. Riviera sued; Midwest won; no more is required," wrote the judges in their opinion.
The Seventh Circuit opinion stands in contrast to one handed down by the Fifth Circuit last month involving a San Antonio resident sued by the RIAA for copyright infringement. Virgin Records v. Cliff Thompson was dismissed by the RIAA with prejudice after the defendant revealed that his adult daughter was responsible for the KaZaA account detected by MediaSentry. The RIAA then dismissed the case against him and sued his daughter.
Thompson requested an attorneys' fees award, but it was denied by the District Court and again on appeal with the Fifth Circuit Court of Appeals. The Fifth Circuit ruled that recovery of attorneys' fees is "not automatic," citing a 1997 Supreme Court ruling. "The Supreme Court listed several non-exclusive factors that a court may consider in exercising its discretion: 'frivolousness, motivation, objective unreasonableness... and the need in particular circumstances to advance considerations of compensation and deterrence," wrote the Fifth Circuit judges in their opinion.
They noted the lower court's finding that the RIAA's lawsuit was neither frivolous nor "objectively unreasonable," and the RIAA's efforts to contact Thompson to "resolve this matter for six months prior to filing this lawsuit."
With two appeals courts issuing contradictory decisions, the issue is likely headed to the Supreme Court, which usually steps in when appeals courts disagree on a matter of law. If the Seventh Circuit interpretation of the Copyright Act becomes the law of the land, the RIAA will face an increased risk of having to pay attorneys' fees in cases where it targets the wrong person—even if the person(s) responsible for the P2P activity live in the same household. Given the record industry's willingness to spend millions of dollars on legal fees, that may not prove to be much of a deterrent. Should the Fifth Circuit ruling prevail, then the decision would be left to the discretion of individual judges.
Lawyers For ‘Imposter’ P2P Software Threaten Open-Source Team
A company trying to pass itself off as vendors of the open-source file-sharing software Shareaza, has set the legal dogs on the real Shareaza forum. Discordia Ltd, who earlier turned Bearshare and iMesh into pay services, demanded action after a member of the real Shareaza forum suggested a DOS attack on the site.
When the news started to break in December last year, it looked bleak for the real Shareaza project. A company had somehow gained control of Shareaza.com, the domain name used previously for the real, open-source Shareaza P2P client, and was now passing its own pay service client off as the real thing. Something was seriously wrong, with many putting the pieces together into what could only be described as a conspiracy.
Now, lawyers for the “fake” or “imposter” Shareaza are threatening the real Shareaza team for a comment made by a user on their forum - things are getting out of hand. So how did this begin?
Last year a company associated with the French RIAA somehow obtained the Shareaza.com domain name from its owner, Mr Jonathan Nilson, who was given the domain in the belief he would keep it safe. Nilson would neither confirm nor deny that he had sold the domain, but speculation suggests that he may have sold it to avoid legal action. Others suggest the domain expired. Either way, the original owners of the domain (the Shareaza creators) don’t have it anymore.
Now the owners of the ‘fake’ Shareaza had control of the domain name previously associated with the real product (shareaza.com), it became easy to pretend to be them. There are two screenshots below - one is the ‘fake’ domain and one is the real thing. Can you spot the imposter?
The real, open source client is represented by the bottom graphic. The ‘fake‘ is at the top and according to Neglacio ;
Shareaza.com is offering a pay client that no file sharer wants, for many reasons, including keeping all hashes, downloaded files and chat logs in a database. We certainly don’t recommend it.
Those who prefer the real, free, open-source Shareaza experience should get along to Sourceforge or to this thread where all the genuine domains point.
On the one hand, The Pirate Bay lose a domain they bought legitimately because the IFPI doesn’t like it, but when a music industry outfit attempts the destruction of a completely legal piece of open source software by passing itself off as the real thing, no-one blinks. Sign of the times?
Judge Rejects RIAA 'Making Available' Theory
A federal judge in Connecticut has rejected the RIAA's "making available" theory, which is the basis of all of the RIAA's peer to peer file sharing cases. In Atlantic v. Brennan, in a 9-page opinion [PDF], Judge Janet Bond Arterton held that the RIAA needs to prove "actual distribution of copies", and cannot rely — as it was permitted to do in Capitol v. Thomas — upon the mere fact that there are song files on the defendant's computer and that they were "available". This is the same issue that has been the subject of extensive briefing in two contested cases in New York, Elektra v. Barker and Warner v. Cassin. Judge Arterton also held that the defendant had other possible defenses, such as the unconstitutionality of the RIAA's damages theory and possible copyright misuse flowing from the record companies' anticompetitive behavior.
Law Students Provide Counseling to Individuals Targeted by Recording Industry
The U.S. recording industry sends hundreds of letters each month to college students across the country accusing them of illegally downloading music from the Internet. The letters offer a simple option: settle for $3,000 or $4,000 or be sued for hundreds of thousands.
Professor Robert Talbot and students in the Internet and Intellectual Property Justice Project are providing research, writing, and counseling assistance in cases involving the Recording Industry Association of America's letters to college students concerning music piracy.
While many--if not most--of the students targeted by the Recording Industry Association of America's "pre-litigation settlement letters" may have in fact illegally downloaded music, not all are guilty. But frightened by the threatening letters and lacking the resources to obtain legal advice, most students opt to hand over their credit cards and settle.
A new undertaking by the Internet and Intellectual Property Justice Project at the USF School of Law aims to provide college students with the legal counseling they need to make an informed decision on how to respond to the RIAA letters. Law students in the class, led by Professor Robert Talbot, are available to counsel students accused of music piracy. They are also researching complex legal issues for attorneys including Ray Beckerman, a key player who represents individuals targeted by the RIAA.
"The RIAA is using heavy-handed tactics that some of the law students feel border on extortion," Talbot said. "The cases involve complex legal and technical issues. We can review a students' case, explain their rights, and determine whether they have a good defense or not."
There are many scenarios that can lead the RIAA to target the wrong person, said Jonathan Jaffe, a law student who also works in the technology industry.
"Many may not be guilty," Jaffe said. "Their roommates could be using their computer, or they could be connecting over a wireless network where it is hard to determine which user is downloading the files. The RIAA tactics seem like a racket."
In addition, a student could have made a simple mistake, it could be sabotage, or the RIAA could simply have the wrong person, Talbot said.
The class is currently assisting Beckerman on the case of a 60-year-old Haitian woman who speaks broken English, works six days a week for $8.50 an hour, and has never used a computer who is defending herself against charges that she is an "online media distributor."
"There are a great number of important legal issues of first impression being decided in these cases, the resolution of which will have enormous implications for the Internet, for our society," Beckerman said. "The opportunity for the law students to be a part of real world cases of first impression, working side-by-side with experienced practitioners motivated by principle rather than by money, on behalf of real life, suffering clients, is a priceless asset for the law school."
The Internet and Intellectual Property Justice Clinic was established by the USF School of Law to provide legal services to individuals who need assistance with a variety of intellectual property matters. The clinic is a partner of the Electric Frontier Foundation (EFF), assisting in domain name disputes. The Project is also a partner in "Chilling Effects," a joint project of the EFF and law school clinics at Harvard, Stanford, Berkeley, and Maine. Chilling effects helps the public understand the protections that the First Amendment and intellectual property laws provide for online activities.
For information on the USF School of Law's Internet and Intellectual Property Justice Clinic, call (415) 422-6752 or email email@example.com.
Chinese Music Industry Groups File Suit Against Baidu
Two industry groups representing China's local musicians and songwriters have filed a lawsuit against the country's Web search leader, Baidu.com Inc, accusing it of copyright violation.
The move signalled that domestic artists as well as international firms are disgruntled at the firm's free music search service.
Baidu, whose search engine allows users to listen to and search for song files for free, is taking advantage of China's relatively unsophisticated music industry to boost its advertising income, Music Copyright Society of China and digital music distributor R2G said in a statement.
The firms had filed a suit in Beijing in January, and are calling for Baidu to immediately halt copyright violations and offer compensation, the statement added but did not give further details.
"This lawsuit is just the beginning," the statement quoted Music Copyright Society executive Qu Jingming of China as saying.
A spokesperson for Baidu could not be reached for comment.
Baidu led China's 946.6 million yuan (67 million pound) search engine market in last year's fourth quarter with a 60.1 percent share, according to research firm Analysys International.
Google Inc came second with a 25.9 percent share, followed by Yahoo China with 9.6 percent.
Earlier this month, three global record companies have launched legal proceedings against Baidu, accusing it of violating copyright by giving access to music files.
Universal Music Ltd, Sony BMG Music Entertainment (Hong Kong) Ltd and Warner Music Hong Kong Ltd have asked a court to order Baidu to remove all links on its music delivery service to tracks that they own the rights to, the International Federation of the Phonographic Industry said.
IFPI has said that more than 99 percent of all music files distributed in China are pirated, and the country's total legitimate music market, at $76 million (38 million pounds), accounts for less than 1 percent of global recorded music sales.
(Reporting by Sophie Taylor; editing by Ken Wills)
Judge Makes Lawyers Pay for Frivolity
With the verdict overturned, two attorneys must pay the others' fees.
A federal judge recently got so infuriated by the conduct of two highly regarded trial attorneys that he overturned a jury's $51 million verdict, then ordered the lawyers to pay the fees and costs of the opposing lawyers, a sum that could total several million dollars.
U.S. District Senior Judge Richard P. Matsch sanctioned attorneys Terrance McMahon and Vera Elson of the firm McDermott, Will and Emery, of Chicago and San Francisco, for "cavalier and abusive" misconduct and for having a "what can I get away with?" attitude during a 13-day patent infringement trial in Denver.
He ruled that the entire trial was "frivolous" and the case filed solely to stifle competition rather than to protect a patent.
Neither McMahon nor Elson returned phone calls. But their firm defended them by stating it "believes in vigorous and ethical advocacy on behalf of our clients. While we respect Judge Matsch, we disagree with the conclusions of the opinion and believe that it will be reversed on appeal."
The U.S. 10th Circuit Court of Appeals saw it differently and affirmed Matsch's decision to overturn the verdict.
News of Matsch's ruling swept through the legal community.
"In 42 years of litigation, I've never seen a judge set aside a verdict, then award fees to opposing counsel," said local attorney Robert Miller, of Perkins Coie LLP. "There are times when a verdict is set aside, and times when lawyers are sanctioned. But I've never heard of them happening in one case.
"Judge Matsch does some things that are out there, but he's usually right. Very infrequently is he reversed on appeal."
The case began in 1999, when Medtronic Navigation Inc., a Minnesota-based firm with a manufacturing facility in Louisville, sued its competitor, BrainLab Inc., a multinational German company, claiming it had lost more than $100 million because of patent infringement. Both companies manufacture surgical instruments that guide a surgeon's scalpel very precisely in difficult situations such as the removal of a brain tumor. The guidance technology was the core of the case.
For three years, the two companies couldn't negotiate a settlement. Medtronics even tried to buy BrainLab but was rebuffed. So Medtronics fired its lawyers and hired McDermott, Will and Emery to take the case to trial.
After presiding over the 13-day trial, Matsch wrote that McDermott's lawyers not only disregarded his instructions during the trial but argued "with full awareness that their case was without merit."
BrainLab's lead attorney, Jay Campbell, said, "We're very pleased with the decision. The judge wrote eloquently about the improprieties, that they had litigated to end competition rather than to enforce the patent."
Campbell has until March 12 to present his bill.
EU Hits Microsoft with Record 899 Million Euro Antitrust Fine
EU competition regulators dealt a new blow to Microsoft on Wednesday, fining the US software giant a record 899 million euros for defying a landmark 2004 antitrust ruling.
The fine, worth 1.4 billion dollars, is the biggest ever levelled against a single company in an EU antitrust case and brings the total penalties against Microsoft to just shy of 1.7 billion euros.
"Microsoft was the first company in 50 years of EU competition policy that the commission has had to fine for failure to comply with an antitrust decision," EU Competition Commissioner Neelie Kroes said.
"I hope that today's decision closes a dark chapter in Microsoft's record of non-compliance with the commission's March 2004 decision," she added.
The European Commission, Europe's top competition watchdog, fined Microsoft 497 million euros in March 2004 and ordered the company to open some key software to rivals so they could make compatible products.
In July 2006, the commission fined the company a further 280 million euros after determining that it was not respecting its original ruling.
The commission hit Microsoft with the new penalty, the sum of daily fines running from June 21, 2006 to October 21, 2007, because it said Microsoft had failed to charge rivals reasonable prices for access to key information about its work-group or back-office servers in contravention of the 2004 ruling.
"Microsoft continued to abuse its powerful market position after the commission's March 2004 decision requiring it to change its practices," Kroes told journalists.
"Microsoft continued to stifle innovation by charging other companies prohibitive royalty rates for the essential information they needed to offer software products to computer users around the world," she added.
In reaction, Microsoft said it was "reviewing the commission's action" and highlighted that the latest EU action targeted "past issues."
"The commission announced in October 2007 that Microsoft was in full compliance with the 2004 decision, so these fines are about the past issues that have been resolved," the company said.
After a five-year investigation, the commission ruled then that Microsoft had abused its share of the market for operating systems running personal computers thanks to its ubiquitous Windows programme.
In particular, it accused Microsoft of using its stranglehold on PC operating systems to elbow rivals out of the more competitive markets for media players that play music and videos, and operating systems running back-office servers.
Microsoft fought the decision tooth-and-nail until last September when an EU court threw out the company's appeal against the ruling, significantly strengthening the commission's hand in the long-running standoff.
Despite the court ruling, Microsoft's troubles with EU competition regulators are far from over.
Since its court victory, the European Commission has launched a new investigation targeting the interoperability of a broad range of software, including Microsoft's popular Office package, with rival products.
Last week Microsoft said it was making "broad-reaching changes" to its technology and business practices to enhance the ease with which its software interacts with partners, customers, and competitors.
However the commission gave the move a lukewarm response, saying that it had seen similar promises from Microsoft in the past.
"As we demonstrated last week with our new interoperability principles and specific actions to increase the openness of our products, we are focusing on steps that will improve things for the future," Microsoft said.
Geek Wins Copyright Lawsuit Against Corporation
I work as a stock photographer/web developer. I saw a photo of mine used in Vilana Financial's full-page phone book ad. They wouldn't pay the licensing fee, and I wrote about it online. They sued me for defamation, producing a sales agreement signed by one "Michael Zubitskiy" (who they said took the photo and sold the rights to them). I sued them for copyright infringement, and they added claims against me for trademark infringement, deceptive trade practices, and tortuous interference. There was a trial I'll long remember on the 5th of November, and the judge recently issued her verdict. She ruled Vilana Financial forged the sales agreement and willfully infringed my photos, and awarded me $19,462. All claims against me were denied. I represented myself during the litigation.
Nuvio Sues Garmin Over Nuviphone
Internet telephone provider Nuvio Corp. said Wednesday it has sued navigational device marker Garmin Ltd. over the name of Garmin's new wireless phone.
Nuvio, which is based in Overland Park, Kan., filed suit Tuesday in U.S. District Court in Kansas, saying Garmin's proposed Nuviphone name infringes on its own Nuvio trademark.
"While we would have preferred to settle this without resorting to a lawsuit, we felt it was important to ensure that our customers and potential customers are not confused by someone abusing our legally protected trademark," said Jason P. Talley, the company's chief executive officer. "Our customers commonly refer to our service as the Nuvio phone."
Talley wouldn't disclose the number of customers that Nuvio has but said it generated between $5 million and $10 million in revenue in 2007.
Garmin, which is based in the Cayman Islands with operational headquarters in Olathe, said earlier this month it will introduce the Nuviphone by the end of the year. The phone would include many of the standard features of Garmin's Nuvi line of GPS devices now used in cars and trucks and help the company compete with wireless carriers now including navigation aids in their phones.
Besides preventing Garmin from using the Nuviphone name, Nuvio said it also wants to bar the company from using the Nuvi name on any of its regular GPS devices. It also has demanded damages from past infringement.
Garmin spokesman Ted Gartner said the company doesn't comment on pending litigation. He said Garmin first introduced the Nuvi line in North America in early 2006 and had sold Nuvi products in Europe before then.
Shares of the company, which have sold in a 52-week range of $50.01 to $125.68, lost 59 cents to close at $61.19 in trading Wednesday.
NY Subpoenas Comcast on Broadband
The New York attorney general's office has requested information from Comcast Corp. on the company's handling of Internet traffic.
Comcast, the nation's largest cable company, is the subject of several complaints to the Federal Communications Commission and has been sued by customers over its throttling of file-sharing traffic on its cable-modem service.
"We have requested information from the company via subpoena," Jeffrey Lerner, a spokesman for Attorney General Andrew Cuomo, said Tuesday.
Comcast said it was cooperating with the AG's office.
The Philadelphia-based company has repeatedly said that its traffic management practices are necessary to keep other Internet traffic, like Web content, flowing smoothly.
On Monday, the FCC held a public hearing on the issue in Cambridge, Mass. Commissioners signaled that they were looking for greater openness from Internet providers about their traffic management practices, and were ready to step in to enforce the agency's "open Internet" policies.
Comcast has a minimal presence in New York state, mostly along the Connecticut border. Less than half of one percent of its subscribers are in New York, spokeswoman Sena Fitzmaurice said.
Dow Jones Newswires reported on New York AG's investigation on Monday.
Grassroots Support? Or Astroturf?
Comcast acknowledges that it hired people to take up room at an F.C.C. hearing into its practices.
How big are the stakes in the so-called network neutrality debate now raging before Congress and federal regulators?
Consider this: One side in the debate actually went to the trouble of hiring people off the street to pack a Federal Communications Commission meeting yesterday—and effectively keep some of its opponents out of the room.
Broadband giant Comcast—the subject of the F.C.C. hearing on network neutrality at the Harvard Law School, in Cambridge, Massachusetts—acknowledged that it did exactly that.
Comcast spokeswoman Jennifer Khoury said that the company paid some people to arrive early and hold places in the queue for local Comcast employees who wanted to attend the hearing.
Some of those placeholders, however, did more than wait in line: They filled many of the seats at the meeting, according to eyewitnesses. As a result, scores of Comcast critics and other members of the public were denied entry because the room filled up well before the beginning of the hearing.
Khoury said that the company didn't intend to block anyone from attending the hearing. "Comcast informed our local employees about the hearing and invited them to attend," she said. "Some employees did attend, along with many members of the general public."
That was not enough to satisfy Comcast's critics.
Craig Aaron, a spokesman for Free Press, one of the groups that filed the complaint against Comcast, denounced the company's tactics.
"The sad thing about this is that literally hundreds of people who were not paid to stand in line, or paid by their employer to attend, were prevented from even entering the building," Aaron said.
Such tactics are not unheard of at congressional hearings in Washington, D.C., but Comcast's critics said that they were inappropriate for a public hearing on a college campus.
Free Press campaign director Timothy Karr said that he showed up at the hearing 90 minutes early, only to find the room "75 percent full."
"The only reason these people were in the room, it seemed to me, was to keep seats warm and exclude others," Karr said.
Some audience members appeared to sleep through the proceedings, according to photos taken during the hearing. Other applauded enthusiastically when Comcast executive vice president David L. Cohen delivered key points in his presentation.
A number of people in the audience wore yellow highlighter marking pens on their shirts or jackets; Karr said that was to identify them to Comcast employees coordinating the company's appearance at the event. Khoury acknowledged that Comcast coordinated the employees that it brought to the hearing.
The revelation that Comcast paid nonemployees to stand in line at the hearing comes against the backdrop of a bitter public relations war between Comcast and its critics, including the public interest groups Free Press and Public Knowledge.
"For the past week, Free Press has engaged in a much more extensive campaign to lobby people to attend the hearing on its behalf," Khoury said.
The hearing was held to address complaints leveled by Free Press, Public Knowledge, the web-video company Vuze, and others, that Comcast is trying to stifle competition by blocking the delivery of rival video-on-demand services over its cable system.
For weeks, Free Press had been trying to organize supporters to attend the hearing by issuing press releases and circulating flyers advertising the event.
Unlike Comcast, Free Press did not pay anyone to stand in line, Aaron said, nor did it provide transportation to any of its supporters.
McNealy: Telcos Falling Behind in Internet Race
Telecommunication companies need to go beyond just providing bandwidth and look into acquiring Internet destination sites that are heavily trafficked, Sun Chairman Scott McNealy said on Friday.
"I have explained to every telco that either you become a destination site, or the destination site will become a telco," McNealy said at a news conference at Sun's Worldwide Education and Research Conference in San Francisco on Wednesday.
Internet destination sites are already gaining on telecommunication companies, McNealy said, giving as examples eBay integrating Skype's VoIP technology and Google trying to buy wireless spectrum and help build cables across the Pacific Ocean. Microsoft's attempted acquisition of Yahoo would create another behemoth that could compete with carriers, such as by combining Microsoft's technology with Yahoo's existing VoIP and messaging services.
"I think the telcos have to make sure they don't get marginalized to being just bit providers and bandwidth providers," he said. On the other hand, carriers may be able to head off Internet sites by limiting the bandwidth available to them, so destination sites may need to affiliate with the carriers, he added.
While the future relationship between telecommunication providers and destination sites is unclear, both are looking at the Internet space to reach more users and generate advertising revenue, McNealy said. "There will be some very interesting challenges of who owns the subscriber and who owns the financial and advertising rights to those individuals."
"Stay tuned, the landscape's going to change enormously here in the next 10 years," McNealy said.
While a Microsoft acquisition of Yahoo would have an impact on the Internet and telecommunications industry, one thing it wouldn't affect is the open-source community, McNealy said.
"I'm not sure Yahoo is a great driver on open-source technology. Certainly Microsoft hasn't been on the leading edge of that, so I'm not sure that will impact open source," he said.
During a speech earlier in the day, McNealy slammed the U.S. government for not being interested in adopting open-source software. McNealy said the farther he goes from Washington, the more governments get interested in open source.
Sun on Wednesday signed a memorandum of understanding with China's Ministry of Education to give university students access to a set of open-source chip designs called OpenSparc. The OpenSparc designs are based on the company's UltraSparc server chips. Sun will provide the designs to universities including Peking University, Tsinghua University and Zhejiang University so those schools can develop teaching materials.
Sun is already incorporating OpenSparc in the curricula of U.S. universities including Carnegie Mellon and the University of Texas. Sun's efforts to promote open-source technology are succeeding, McNealy said, claiming there have been 50 million downloads of Sun's open-source Java Runtime Environment per month, McNealy said.
Researchers Transmit Optical Data at 16.4 Tbps
W. David Gardner
The goal of 100 Gbps Ethernet transmission is closer to reality with the announcement Wednesday that Alcatel-Lucent researchers have recorded an optical transmission record along with three photonic integrated circuits..
In papers presented at the Optical Fiber Communication Conference and Exposition/National Fiber Optic Engineers Conference (OFC/NFOEC), Alcatel-Lucent researchers disclosed research that they believe will likely pave the way to successful implementation of the very high speed transmissions. "Several new technologies were used," the firm said in a statement, "including a highly linear, balanced optoelectronic photoreceiver and an ultra-compact, temperature-insensitive coherent mixer."
Carried out by researchers in Bell Labs in Villarceaux, France, the successful transmission of 16.4 Tbps of optical data over 2,550 km was assisted by Alcatel's Thales' III-V Lab and Kylia, an optical solution company. The researchers utilized 164 wavelength-division multiplexed channels modulated at 100-Gbps in the effort.
Also accepted at the OFC/NFOEC conference were three papers from researchers at Bell Labs in Holmdel, N.J. The three papers describe the development of three photonic integrated circuits designed to achieve 100 Gbps with high spectral efficiency.
The three papers described the development of different components useful in achieving 100 Gbps, including an integrated high-speed receiver, a dual-polarization modulator, and another modulator used for systems with extremely high spectral efficiency.
"These breakthroughs highlight the depth and breadth of the work done by Bell Labs researchers in optical networking and physical technologies around the world, and show how they must constantly improve and innovate across various technical areas to pave the way to the future of communications," George Rittenhouse, Bell Labs research VP, said in a statement.
IBM Optical Chip Zips Huge Files Using Little Power
IBM today announced it had developed a prototype chip that could transmit up to 8 terabit/sec of information -- equivalent to about 5,000 high-definition video streams -- using the power of a single 100-watt lightbulb.
The applications for the technology IBM is calling its “green optical link” range from cell phones to supercomputers. The optically-enabled circuit boards, or "Optocards," employ an array of low-loss polymer optical waveguides to conduct light between transmitters and receivers, IBM said.
The complete databus constructed with these Optocards incorporates a large number of high-speed channels and closely packs them to achieve huge densities: each waveguide channel is smaller in size than a human hair, IBM said. In addition to the optical data bus, IBM said it developed a parallel optical transceiver module with a higher number of channels and an increased speed of operation: 24 transmitters and 24 receivers that each operate at 12.5 Gb/s.
The resulting total bi-directional data transfer rate is 300 Gb/s, nearly doubling the performance of a version IBM introduced last year. Compared to current commercial optical modules the transceiver provides 10-fold greater bandwidth in 1/10 the volume while consuming comparable power, IBM said.
Big Blue said perhaps the new optical technology’s most important benefit will be saving massive amounts of power in supercomputers. For a typical 328ft long link, the power consumed by the optical technology is 100 times less than today's electrical interconnects, and offers a power savings of 10 times over current commercial optical modules, IBM claims.
Other applications include:
• Video: This technology will enable widespread high definition video sharing and video on-demand by increasing the bandwidth of video servers. Web-serving sites that host videos could use the technology to access libraries with millions of high-definition movies and video clips in seconds, speeding up access for users. By incorporating an optical data port in laptops, HD video recorders, personal mp3 and video players, cell phones, or PDAs, HD video content could be stored and displayed on high-resolution screens.
• Healthcare: Physicians and researchers could send large files such as MRIs and heart scans for real-time analysis and 3-D visualization.
• Electronics: "Scaled-down" versions of the optical interconnect technology may find applications in cell phones, one chip could sit in the base of the phone and the other could sit in the display, letting large files, even high-definition content move from one to the other. The advantage is that optics eliminate wires.
This increased bandwidth is the result of two specific advances, Big Blue said. First, the new transceiver includes 24 channels for sending and receiving data compared to 16 such channels in the previous device. Second, the modulation rate of each of the transceiver's vertical cavity surface emitting lasers has been increased by 25% to 12.5 billion bits per second. In an effort to speed commercialization efforts, IBM has incorporated lasers and detectors that operate at the industry-standard wavelength of 850 nanometers (nm) instead of the proprietary 985-nn technology used in IBM’s earlier transceiver.
The device was produced as part of an ongoing Defense Advanced Research Projects Agency program to speed up chip-to-chip communications for supercomputers.
Global Consortium to Construct New Cable System Linking US and Japan to Meet Increasing Bandwidth Demands
Construction underway to build 10,000 km linear cable system with a capacity of up to 7.68 Tbps to enhance Trans–Pacific connectivity
TOKYO, Japan (February 26, 2008) – A consortium of six international companies announced they have executed agreements to build a high–bandwidth subsea fiber optic cable linking the United States and Japan. The construction of the new Trans–Pacific infrastructure will cost an estimated US$300 million.
The new cable system — named Unity — will address broadband demand by providing much needed capacity to sustain the unprecedented growth in data and Internet traffic between Asia and the United States. Unity is expected to initially increase Trans–Pacific lit cable capacity by about 20 percent, with the potential to add up to 7.68 Terabits per second (Tbps) of bandwidth across the Pacific.
According to the TeleGeography Global Bandwidth Report, 2007, Trans–Pacific bandwidth demand has grown at a compounded annual growth rate (CAGR) of 63.7 percent between 2002 and 2007. It is expected to continue to grow strongly from 2008 to 2013, with total demand for capacity doubling roughly every two years.
"The Unity cable system allows the members of the consortium to provide the increased capacity needed as more applications and services migrate online, giving users faster and more reliable connectivity,” said Unity spokesperson Jayne Stowell.
The Unity consortium is a joint effort by Bharti Airtel, Global Transit, Google, KDDI Corporation, Pacnet and SingTel. The name Unity was chosen to signify a new type of consortium, born out of potentially competing systems, to emerge as a system within a system, offering ownership and management of individual fiber pairs.
This new 10,000 kilometer (km) Trans–Pacific cable will provide connectivity between Chikura, located off the coast near Tokyo, to Los Angeles and other West Coast network points of presence. At Chikura, Unity will be seamlessly connected to other cable systems, further enhancing connectivity into Asia.
The Unity consortium selected NEC Corporation and Tyco Telecommunications to construct and install the system during a signing ceremony held in Tokyo on February 23, 2008. Construction will begin immediately, with initial capacity targeted to be available in the first quarter of 2010.
The new five fiber pair cable system can be expanded up to eight fiber pairs, with each fiber pair capable of carrying up to 960 Gigabits per second (Gbps). By having a high fiber count, Unity is able to offer more capacity at lower unit costs.
Cablevision Swings to Profit in 4Q
Cablevision Systems Corp. says it swung to a profit in the fourth quarter from a loss a year ago as it added more Internet and phone customers.
Cablevision earned $6.6 million in the quarter, or 2 cents per share, compared with a loss of $23.9 million, or 8 cents per share, a year ago.
Revenues rose 10.8 percent to $1.84 billion from $1.66 billion.
Operating income, a measure that excludes interest expenses from Cablevision's large debt load as well as gains and losses from investments, jumped 62.9 percent to $330.3 million from $202.8 million.
Lessig Decides Against Run for Congress at Internet Speed
Just like any good Web story, this one took just five days to go from tantalizing to nothing more than that. Silicon Valley will not be represented by an Internet icon in the House of Representatives, not for a couple of years anyway.
Lawrence Lessig announced today that he would not open a campaign for the seat formerly held by Representative Tom Lantos of California, who died earlier in the month.
The decision was explained not in a news release or appearance on a political talk show, but in an E-mailable, embeddable online video combining his remarks played over words and other illustrations.
The most pertinent phrase printed on the screen was “No possible way,” which was his conclusion based on problems that every politician faces:
– Political Unknown: He may be famous on the Web, but the district’s voters “never heard of me,” he said, citing recent polling.
– Message Problems: The voters were unfamiliar with his agenda, which was explained in another video last week. His political organization, Change Congress, seeks to fill Congress with those against lobbying and earmarks, and for public financing of elections.
– Popular Opponent: Within the district, the popularity of the leading candidate, Jackie Speier, made it certain “that we would lose this race in a big way,” he frankly told supporters. Ms. Speier spent years in the State Senate and was endorsed by Mr. Lantos. Her positive polling numbers “rank even above Barack Obama and Hillary Clinton,” he said.
All of the above was exacerbated by one more factor: An excruciatingly short campaign cycle. Mr. Lessig would have to complete the uphill climb by the April 8 special election.
“My running and losing big would do more harm than good” for his new political push, he said today in the video. Mr. Lessig raised the possibility of running on his personal blog last Wednesday, and he had until the end of the month to decide.
The rise and fall of Lessig ‘08 came at Internet speed, and with Internet snark. Of Ms. Speier, his would-have-been opponent, he offered compliment after compliment, with a bit of sarcasm for good measure. Her public service, he said, was “so extraordinary that she’s had a train named after her.”
On the Press Bus, Some Questions Over Favoritism
On the bus ferrying a group of reporters to an appearance by Senator Barack Obama at Ohio State University on Wednesday, Lee Cowan, the NBC reporter assigned to the campaign, was asked the media question of the week: Had journalists like himself been going easier on Mr. Obama than his opponent for the Democratic nomination, Senator Hillary Rodham Clinton?
“I don’t think that it’s kind treatment versus unkind treatment,” Mr. Cowan began, taking issue with the depiction of journalists fawning over Mr. Obama in a “Saturday Night Live” skit last Saturday, a characterization stoked nearly every day since by Mrs. Clinton and her aides.
And yet, Mr. Cowan then described several advantages that he saw Mr. Obama as having over his rival. “He hasn’t been around as long, so there isn’t as much to pick at,” Mr. Cowan said. “He plays everything very cool. He’s not as much of a lightning rod. His personality just doesn’t seem to draw that kind of coverage.”
“Even in the conversations we have as colleagues, there is a sense of trying especially hard not to drink the Kool-Aid,” Mr. Cowan added. “It’s so rapturous, everything around him. All these huge rallies.”
As the two Democratic candidates shuttled between Ohio and Texas this week before Tuesday’s potentially decisive nominating contests, questions over whether reporters were giving each candidate an equally fair shake were thrust into the center of the campaign itself. There were already indications that Mrs. Clinton and her surrogates were finding traction in casting the news media as a conflicted umpire, while also prompting some soul-searching among the reporters themselves.
The night after Mrs. Clinton reprimanded Tim Russert and Brian Williams during the Cleveland debate on MSNBC for asking her a disproportionate number of “first” questions, she appeared Wednesday at a rally in St. Clairsville, Ohio. When someone stood to castigate the news media for being unfair to her, the audience cheered, with some even turning to cast a collective evil eye on the reporters in the high school gymnasium.
In a New York Times/CBS News telephone poll conducted Feb. 20-24 and released Tuesday, nearly half of those respondents who described themselves as voters in Democratic primaries or caucuses said the news media had been “harder” on Mrs. Clinton than other candidates. (Only about 1 in 10 suggested the news media had been harder on Mr. Obama.)
Meanwhile, relations between the candidates and their chroniclers have shown signs of wear, as the Democratic contest has moved into its second year.
On Tuesday, Carrie Budoff Brown, a correspondent for the Web site Politico who has been covering the Obama campaign, posted an article in which she complained about the candidate’s setting aside little time for questions from the national press and about the metal barriers that now prevented reporters from mingling with spectators at rallies. (David Axelrod, a senior adviser to Mr. Obama, said the barriers were at the behest of the Secret Service.)
In an interview on the Obama campaign’s flight from Cleveland to Columbus, Ohio, Lynn Sweet, the Washington bureau chief of The Chicago Sun-Times, voiced a more basic lament: that the candidate’s aides omitted seemingly newsworthy gatherings from his publicly released schedule. As an example, she cited the lack of previous notice about a meeting he had with about 100 Jewish leaders in a Cleveland suburb last Sunday.
“The main issue is not whether he comes back here and shmoozes,” Ms. Sweet said of Mr. Obama, her hand tracing the middle and rear of the cabin. “First, tell me what you’re doing. Then we can argue if I can have access.”
Asked about Ms. Sweet’s concerns, Mr. Axelrod said that a transcript and video of the meeting had been released to her and others. “Occasionally, people in politics have private meetings,” he said.
Meanwhile, the Clinton campaign, which only a few weeks ago released a letter signed by Mrs. Clinton calling on MSNBC to fire a reporter who had made an off-color reference to her daughter, Chelsea, provided a letter to The Huffington Post this week taking issue with The Times. The letter, signed by 503 staff members and volunteers, disputed the central point in an article on Sunday’s front page: that the campaign was rapidly losing hope.
At the same time, as Mr. Obama racked up a string of victories in recent weeks, Mrs. Clinton has begun appearing more frequently in the press section of her plane for on-the-record conversations. On Valentine’s Day, she wandered back to call the girlfriends of several journalists, to apologize for keeping them on the campaign trail.
But to some reporters, those attempts at making nice have come late.
“Part of it is her campaign’s fault,” Andrea Mitchell, the longtime NBC political correspondent, said backstage at the MSNBC debate in Cleveland in Tuesday. “They started with this notion of inevitability. And they were very arrogant.”
It would be difficult to analyze systematically whether the mountain of articles, blog postings and video segments tilts toward one candidate or the other. But the Project for Excellence in Journalism, a research institute that compiles a weekly index of campaign coverage by 48 news outlets, said that by one measure Mr. Obama had outpaced Mrs. Clinton beginning in mid-February — prominent mentions in that coverage.
Some Clinton aides and even reporters pointed this week to articles that could, at least anecdotally and in isolation, be construed as favorable to Mr. Obama. Among those cited were a front-page article in The Times last June that focused on Mr. Obama’s pickup basketball prowess, and another Tuesday on the front of The Washington Post that extolled his oratorical virtues.
Others marshaled clippings indicating that Mr. Obama had been subject to more serious scrutiny than the Clintons would acknowledge. These include articles from Ms. Sweet of The Sun-Times examining Mr. Obama’s flights on corporate jets early in his Senate career and the literary license he took on his first memoir. They also noted articles in the Chicago papers (as well as in The Times, and others) about Mr. Obama’s relationship with Antoin Rezko, a former fund-raiser soon to be tried on federal charges of fraud and influence peddling.
Which is not to say that there is not much more scouring to be done.
“The number of questions that we don’t know the answers to about the relationship between Mr. Rezko and Mr. Obama is staggering,” Howard Wolfson, a top aide to Mrs. Clinton, said on a conference call with reporters on Friday.
Still, others have noted that with the exception of a mention by Mr. Russert in Tuesday’s debate, Mrs. Clinton has largely escaped serious journalistic vetting over matters like when or whether her campaign will release her tax returns or her calendar from her years as first lady, or detail the origins of the $5 million she has contributed to her own campaign.
Jonathan Alter, the veteran Newsweek columnist who traveled with the Obama campaign to Dallas on Wednesday, said that the attempt by the Clinton camp to weigh various stories represented a kind of “silly, even-Steven-itis.”
“People got it into their head that if you say something good about a candidate, you have to say something bad about him, and if you don’t, that’s not fair,” Mr. Alter said. “What the Clinton partisans wanted was for us to create a phony balance that was at odds with what our eyes were telling us. That’s not the job of a journalist.”
The most significant element of the coverage that has so rankled the Clinton campaign may be one that cannot responsibly be omitted: her recent win-loss record in nominating contests.
“My role model and mentor at The A.P. was Walter Mears, who recently retired, and he used to say that who wins is part of the story,” said Mike Glover, an Associated Press reporter, as he flew on Mrs. Clinton’s plane on Thursday from Hanging Rock, Ohio, to Houston. “We’re covering a candidate who’s lost 11 straight primaries. They’re covering a candidate who has won 11 straight primaries.”
Bush Aide Resigns Over Plagiarism
Sheryl Gay Stolberg
A longtime aide to President Bush who wrote occasional guest columns for his hometown newspaper resigned on Friday evening after admitting that he had repeatedly plagiarized from other writers.
The White House called his actions unacceptable.
The aide, Tim Goeglein, had worked for Mr. Bush since 2001, as a liaison to social and religious conservatives, an important component of the president’s political base. Mr. Goeglein was influential in decisions on a range of questions important to that constituency, including stem cell research, abortion and faith-based initiatives.
A blogger in Mr. Goeglein’s hometown, Fort Wayne, Ind., found the plagiarism.
“This is not acceptable, and we are disappointed in Tim’s actions,” a White House spokeswoman, Emily Lawrimore, said Friday morning, hours before Mr. Goeglein resigned. “He is offering no excuses, and he agrees it was wrong.”
Mr. Goeglein, 44, is little known outside Washington. He is a familiar figure to conservatives and evangelical Christians, who knew him as a spokesman for Gary L. Bauer, the conservative who ran for president in 2000.
When Mr. Bauer dropped out of the race, Mr. Goeglein signed on with Mr. Bush, eventually becoming a top aide to Karl Rove, the chief political strategist. He was the eyes and ears of the White House in the world of religious conservatives and an emissary to that world for Mr. Rove and the president.
Mr. Goeglein was often credited with turning out the evangelical vote that helped re-elect Mr. Bush in 2004.
With Mr. Bush traveling to his ranch in Crawford, Tex., for the weekend, the White House issued a statement late Friday saying that the president was disappointed and saddened for Mr. Goeglein and his family.
“He has long appreciated Tim’s service,” the statement said. “And he knows him to be a good person who is committed to his country.”
Mr. Goeglein had been publishing guest columns on the opinion page of The News-Sentinel in Fort Wayne for more than a decade, according to the paper’s editor, Kerry Hubartt.
Nancy Nall, a former columnist for the paper, often used her Web site, www.nancynall.com, to poke fun at his writings, which she called “drippy and awful.”
Ms. Nall said she was struck by Mr. Goeglein’s most recent column, on Thursday, which included a reference to a “notable professor of philosophy at Dartmouth,” Eugene Rosenstock-Hussey. Curious, she searched the Internet, and found that Mr. Goeglein had lifted major chunks of the column from an article published 10 years ago in The Dartmouth Review.
“It is true,” Mr. Goeglein wrote in an e-mail message to another Fort Wayne newspaper, The Journal-Gazette. “I am entirely at fault. It was wrong of me. There are no excuses.”
He said he had apologized to the author of The Dartmouth Review article.
By day’s end, more examples of plagiarism had turned up, including a column about John Wayne copied in part from an article in The New York Sun and passages from a column that tracked, almost verbatim, an article by Jonathan Yardley in The Washington Post.
A review by The News-Sentinel found that of the 38 columns Mr. Goeglein published since 2000, 19 included plagiarized material, according to Mr. Hubartt. He said the paper would no longer publish work by Mr. Goeglein, whom he described as “well respected here by a lot of people.”
“There was no reason for it that I can see,” Mr. Hubartt said, noting that Mr. Goeglein had submitted columns voluntarily and had no deadlines to meet. “He was not under any pressure.”
Judge is Asked to Rescind Shutdown of Website
Media and public interest organizations tell the jurist that his order violates constitutional provisions against prior restraint of free speech.
A coalition of media and public interest organizations went to federal court in San Francisco on Tuesday urging a judge to reconsider his order to shut down a muckraking website that publishes leaked documents from businesses and government agencies worldwide.
Lawyers for the Electronic Frontier Foundation, the American Civil Liberties Union, Public Citizen and several news organizations, told U.S. District Judge Jeffrey White that two orders he issued last week against wikileaks.org were prior restraints that violated the 1st Amendment.
Laura Handman, a Washington, D.C., attorney for the news organizations, said White's order was so expansive that the only way to describe it was as if a judge had shut down a newspaper because of controversy over one article.
"I can't think of another injunction that was so broad," said Matt Zimmerman of the Electronic Frontier Foundation, a civil rights group that focuses on digital issues.
White acted in response to a lawsuit filed Feb. 6 by Julius Baer & Co., a Zurich-based bank, alleging that a disgruntled former employee had posted internal documents alleging money-laundering and tax evasion schemes at its Cayman Islands branch.
Wikileaks.org specifically urges readers to post leaked documents in an effort to discourage "unethical behavior" by corporations and government agencies. Among the 1.2 million documents that Wikileaks says it has posted over the last several years is an operations manual for the controversial U.S. prison at Guantanamo Bay, Cuba.
Julius Baer, represented by the Century City firm Lavely & Singer, past lawyers for several celebrities in battles with news organizations, alleged that the postings violated privacy and bank secrecy laws of Switzerland and the Cayman Islands and posed a serious threat of identity theft.
Judge White issued a temporary restraining order, barring Wikileaks from posting the bank documents on the Internet. White has scheduled a Friday hearing on whether to make the injunction permanent.
White also issued a permanent injunction ordering Dynadot of San Mateo, Wikileak's domain name registrar, to disable the website's domain name.
That blocks access to the site through its principal entrance, although the content remains available on mirror sites and through its numerical address.
Dynadot did not contest the judge's actions. "The only agreement by Dynadot was to comply with the court's . . . order to preserve evidence," said the company's attorney, Garrett D. Murai.
Zimmerman, whose organization filed a motion seeking to intervene in the case, said he was disappointed in Dynadot's action. He said that a specific provision of the Communications Decency Act providing immunity for an "interactive computer service" protects the company against the bank's claims.
On a broader level, attorney Thomas Burke and colleagues Handman and Kelli Sager, representing 12 media groups that filed a friend-of-the-court brief, cited the 1971 Supreme Court decision in the Pentagon Papers dispute as authority for their position.
In that case, the Supreme Court rejected the Nixon administration's bid to bar publication of a secret government history of the Vietnam War.
"The 1st Amendment prohibits prior restraints in nearly every circumstance, even where national security may be at risk and even when the source unlawfully obtained the documents," said the attorneys, whose clients include the Reporters Committee for Freedom of the Press, the Society of Professional Journalists, The Times, Gannett Co. and Hearst.
Public Citizen and the California First Amendment Coalition filed a separate brief contending that the case did not come under U.S. jurisdiction because the parties include subjects of foreign states -- the Swiss bank and Wikileaks, many of whose members are abroad.
"In shutting down this website through an unlawful prior restraint, the court has muzzled a very important voice in the fight against corporate and government misdeeds," said Paul Levy, an attorney with Public Citizen.
Peter Lurie, deputy director of Public Citizen's health policy wing, filed a declaration saying that the organization frequently uses leaked government documents to bring attention to important public issues, such as the Food and Drug Administration's consideration of "a drug company plan to conduct research on its new drug in Latin America using a design that the agency acknowledged would be unacceptable in the United States." After the plan was exposed, the company redesigned its study, Lurie said.
"If Wikileaks is shut down," Lurie said, "the ability of Public Citizen and its members to access" information from whistle-blowers "will be significantly impaired."
Attorney William Briggs, who represents Julius Baer, said his firm was preparing a response to the briefs lodged Tuesday. "This is a case that presents a conflict between an individual's right of privacy versus the press' ability to publish private information about private individuals," he said.
"I think the individual privacy rights outweigh the right of the press to report that information because of reasons of identity theft. If financial industry customers do not think their information is protected, those institutions could go out of business."
Bank Drags Facebook into Wikileaks Case, Which Takes a Late-Day Turn for the Better
The Wikileaks outrage has just gotten ever more so ridiculous ... and at the same time deliciously ironic.
(Friday evening update: Looks like the judge has reconsidered and Wikileaks.org should be back soon. ... More detail here.)
If I'm reading these documents correctly - always a dicey proposition, given that I have a degree in journalism not law - it appears as though the Swiss bank that bamboozled a U.S. judge into pulling the plug on Wikileaks.org has dragged into this morass a human rights activist and Stanford graduate student who has no earthly connection to Wikileaks other than that he vetted some documents the whistleblower haven hosted (completely unrelated to the bank case) and also moderated a Facebook discussion group about the site - on Facebook.
The fellow, Daniel Mathews, tried explaining to attorneys for Bank Julius Baer that they were twisting an arm unattached to their target - to no avail - so Mathews actually had to lawyer up, which as Wikileaks notes in a press release "will likely be of keen interest to the very large Facebook community." ... Or anyone who contributes to any wiki or discussion board about any controversial topic.
From the Wikileaks release:
That's the ridiculous part.
Now for the delicious irony.
Mathews and his attorney, Joshua Kolten, have decided to make lemonade out of lemons: Since the bank insists Mathews has standing in the case, Mathews is asking the judge to consider the harm that the court's earlier injunction against Wikileaks has done to him; namely that it has prevented readers from accessing on Wikileaks the material he has written about subjects completely unrelated to the bank and its business.
Hopefully the judge will appreciate the point, get Wikileaks back online ... and let Mathews get back to Stanford and Facebook.
Judge Says Wikileaks Site Can Have Its Web Address Back
Jonathan D. Glater
A federal judge in San Francisco said on Friday that he would withdraw an order that shut down the Web address for Wikileaks.org, a site that allows anonymous posting of documents to assist “peoples of all countries who wish to reveal unethical behavior in their governments and corporations.”
At a hearing, United States District Judge Jeffrey S. White appeared at times visibly frustrated that technology might have outrun the law and that, as a result, the court might not be able to rein in information disclosed online.
“We live in an age when people can do some good things and people can do some terrible things without accountability necessarily in a court of law,” Judge White said.
The underlying case was brought by Bank Julius Baer & Co., a Swiss banking company, and its Cayman Islands subsidiary, charging that Wikileaks had posted confidential, personally identifiable information about some of the bank’s customers.
The judge in February signed an order requiring that a company called Dynadot, a domain registrar, disable the Wikileaks.org address, making it more difficult for people to reach the site. Registrars provide Web addresses to site operators for a monthly fee.
The judge’s action drew criticism – and court filings – from numerous organizations concerned that the order violated the First Amendment’s protection of free speech. And because Wikileaks maintains copies of its site at several other Web addresses, the documents were and still are widely available, both from the United States and elsewhere. The main site, which is housed on a server in Sweden, remains accessible to those who know its less human-friendly numerical address.
“There are serious concerns that the court has, and serious questions raised, about the effectiveness of any order that this court might issue given the current state of affairs,” Judge White said, lamenting the fact that constitutional law might not be able to keep up with technological change.
A lawyer for Dynadot, Garret D. Murai, said that within an hour after the judge issued a written order outlining his decision, the Wikileaks.org domain name would be re-enabled.
“We will reinsert the DNS settings,” Mr. Murai said, using the acronym for Domain Name System. “Once I see the order, the call goes in to the client.”
Wikileaks Ruling Leaves Big Questions Unanswered
Jonathan D. Glater
Free speech advocates immediately hailed as a victory the decision on Friday of a federal judge to withdraw a prior order turning off the Web address of the site Wikileaks.org. But the reasoning of United States District Judge Jeffrey S. White also means that the court may dodge having to grapple with some of the meaty First Amendment questions posed by the case and touched on repeatedly at a lengthy hearing in San Francisco.
The lawsuit, brought by a Swiss bank and its Cayman Islands subsidiary against Wikileaks and Dynadot, the San Mateo, Calif., company that is the registrar for the domain name Wikileaks.org, became a cause célèbre for organizations like the American Civil Liberties Union, Public Citizen and the Electronic Frontier Foundation. Such organizations responded with a barrage of court filings in the wake of an order signed by Judge White last month that required Dynadot to disable the Wikileaks.org address, making it more difficult – but far from impossible – for Internet users to get to materials published by Wikileaks.
The bank, Bank Julius Baer & Co., claimed that Wikileaks had displayed confidential, personally identifiable account information of its customers, as a result of possibly criminal actions by a former employee. Lawyers for the bank on Friday repeatedly told Judge White that Julius Baer clients had a right to keep their account information private and that there was no compelling interest to justify their disclosure. In this way lawyers for the bank set up a conflict between freedom of speech and the right to personal privacy.
“All of this is private info that is not newsworthy,” said William J. Briggs, one of the lawyers for the bank. If one of the affected customers had been Ken Lay, the late, disgraced former chief executive of Enron, then perhaps there would be news value, Mr. Briggs continued, but that was not the case here.
“Here there have been absolutely no targeted individuals identified,” Mr. Briggs said. “There’s just been wholesale leaking of private banking information.”
Judge White questioned lawyers about the possibility of redacting names from the documents. But Joshua Koltun, a lawyer for a graduate student whom the bank said was an “officer” of Wikileaks, warned that the names could prove to be essential information.
“That’s how you identify who’s been salting away money in accounts,” Mr. Koltun said, drawing laughter from reporters in the courtroom. (The laugher in turn drew a rebuke from Judge White, who said sternly, “I won’t tolerate that.”)
The judge and the lawyers also struggled mightily to define Wikileaks, which defines itself as an organization “founded by Chinese dissidents, journalists, mathematicians and startup company technologists, from the U.S., Taiwan, Europe, Australia and South Africa.”
Traditional entities, like companies and individuals, have citizenship status that can determine when they are subject to a particular court’s jurisdiction. But what is Wikileaks, which has not been represented by a lawyer throughout these proceedings?
“Whatever this entity is, it has not filed a response,” Judge White observed.
Paul Alan Levy, a lawyer for Public Citizen in Washington, argued that the bank had brought more publicity to the documents on Wikileaks than ever by filing its lawsuit and obtaining the order affecting the site’s domain name. Under such circumstances, Mr. Levy asked the judge, “Should you give them any relief to help them unring the bell?” The question implicitly was whether the victims of public disclosure on the Web have any shot at redress.
After hours of discussion that suggested the judge’s level of concern with reaching the correct outcome, Judge White looked unhappy that he could not think of a way to help the bank customers affected by the release of the documents. But he said that he feared the initial order suspending Wikileaks.org raised serious questions of unjustified prior restraint on free speech, and that in any event, once the documents were online, the court might well be powerless.
“Maybe that’s just the reality of the world that we live in,” Judge White said. “When this genie gets out of the bottle, that’s it.”
Mayor of Florence Sues Wikipedia
Leonardo Domenici and his assessor Graziano Cioni against web Encyclopedia: "There slander"
The mayor of Florence, Leonardo Domenici, and the municipal assessor Graziano Cioni gave mandate to sue for defamation and slander the web encyclopedia Wikipedia.
The accused - The reason is explained in a note, it's because the "voice" of Leonardo Domenici site charge to the first citizen and his junta some measures and decisions, so it says, "have provoked criticism from citizenship "citing in particular" the trust of citizens in the parking company "Florence parking" for the cda are part of the wives of Domenici and Cioni.
A glimpse of the "critical" to Domenici reported from Wikipedia: The third point is that "Florence Parking"
The INVESTIGATION - In the note, please note that this "slander." Had already circulated in the past and that in 2004 the Public Prosecutor of the Republic of Florence had opened an investigation which led to a conviction in a trial. The voice but (when reporting this story) has not changed and is still in the form contested by Domenici. Hence the decision to proceed with the lawsuit.
The above is a Google translation of an original article in Italian.
Studios Are Trying to Stop DVDs From Fading to Black
Brooks Barnes and Matt Richtel
A winner has finally been declared in Hollywood’s high-definition DVD war. So why isn’t there more cheering?
In the 1980s, the triumph of VHS over Betamax helped develop the lucrative home entertainment market. DVDs, introduced in the 1990s, turned into an even bigger gold mine, accounting for roughly 60 percent of studio profits in recent years, analysts say. The entertainment giants have positioned high-definition DVDs as yet another blockbuster business.
But the victory of Sony’s new Blu-ray high-definition disc over a rival format, Toshiba’s HD DVD, masks a problem facing the studios: the overall decline of the DVD market. Domestic DVD sales fell 3.2 percent last year to $15.9 billion, according to Adams Media Research, the first annual drop in the medium’s history. Adams projects another decline in 2008, to $15.4 billion, and a similar dip for 2009.
So instead of celebrating the Blu-ray format — which remains a nascent business — the studios are scrambling to introduce an array of initiatives aimed at propping up the broader market. Some efforts, like the addition of new interactive features and changes in how DVDs are packaged and promoted, are intended to prevent further market erosion while nurturing Blu-ray.
But media companies are also introducing technology that they hope will solve the more difficult tasks of generating growth and delaying the obsolescence of DVD altogether.
DVD sales are sagging for various reasons, including a flooded marketplace and competition for leisure time. But the Internet is perhaps the biggest enemy.
Technology companies have watered down the DVD market by aggressively pushing Internet downloads. Apple’s iTunes now offers downloads of 500 movies and last month started renting titles like “Spider-Man 3.” Meanwhile, telecommunications providers like Time Warner and Comcast are pushing their faster broadband lines by promoting them as capable of delivering fast downloads.
Movie studios are fighting back by taking a page from the Internet playbook. Indeed, the centerpiece of the market rejuvenation effort is something 20th Century Fox calls “digital copy.” Fox DVDs, starting last month, now come with an additional disc holding a digital file of the title. Consumers can download the file to a computer in about five minutes — far less time than via the Internet — and then watch the movie there or transfer it to their iPod.
“This puts the DVD at the center of the digital revolution and returns the business to a growth trajectory,” said Mike Dunn, the president of 20th Century Fox Home Entertainment. Sony Pictures Entertainment, Universal Studios, Walt Disney and Warner Brothers are all pursuing their own versions of the idea.
Most technology consultants, while not as optimistic about the DVD’s future as Mr. Dunn, are greeting studio efforts with enthusiasm. Tom Adams, the founder of Adams Media Research, said the packaging of digital files with standard DVDs “has the real potential to steal the thunder from the Internet delivery of movies.”
But John Freeman, an industry analyst, sees the effort as a stall tactic. Although digital copies are “a step forward,” he said, that step is tantamount to Hollywood admitting that its lucrative hard-goods business is growing obsolete. Today, digital files on discs; tomorrow, mass downloading straight from the Internet.
Troubles big and small started buffeting the DVD business in 2005. First, overall sales of television shows on disc started to slip as releases lost their freshness — New to DVD! “Murder She Wrote: The Complete Eighth Season” — and consumers realized they were devoting a lot of living room space to bulky boxed sets they never watched.
Next, prices started to plummet as overall demand weakened and retailers and grocery stores turned to DVDs as loss leaders. DVDs sold for an average retail price of $15.01 last year, compared with $21.95 in 2000, according to Adams.
“Wal-Mart has indicated it is getting bored with older library titles,” said Stephen Prough, the co-founder of Salem Partners, a small investment bank that specializes in film catalogs. “When there is little to no consumer demand at a $6 price point, you’ve got problems.”
And a lingering battle among various participants in DVD marketing — hardware makers, studios and retailers — over which of two competing high-definition technologies would replace standard DVDs left consumers in limbo, analysts say. Last week, Sony’s Blu-ray finally won the battle after Toshiba threw in the towel on HD DVD.
Media companies, aware of investor concerns about the future of their cash cow, say the problems are overblown. Their position in part: DVDs will continue as a giant profit center because the Internet — despite the “marketing hocus pocus” of the telecommunications industry, in the words of one Fox executive — will remain too slow for widespread downloading to catch on for the foreseeable future.
International DVD sales are still growing, studios add, and some players do not concede that domestic growth is over. Bob Chapek, president of the home entertainment unit of Walt Disney, said that blockbusters like “Pirates of the Caribbean: At World’s End” achieve large numbers even if lesser titles are struggling. He said sales of Blu-ray discs would contribute to “a vibrant growth pattern” for the category by decade’s end.
“There is nobody worried about the consumer suddenly fleeing,” said Ronald J. Sanders, president of Warner Home Video.
Blu-ray DVDs, which sell for a 25 percent premium, will without question restore momentum to the DVD market, but there is disagreement over how much and how soon. “There is still plenty of concern at Sony, Best Buy and Blockbuster that this isn’t going to achieve the same level of success that the DVD has,” said Robert Heiblim, an industry consultant with RH Associates.
Microsoft said this weekend it would stop making HD DVD players for its Xbox 360 game system. Toshiba, reflecting on its failure with HD DVD, said the industry might be overestimating interest in a new format. Jodi Sally, Toshiba America’s vice president for DVD marketing, said consumers en masse do not feel a nagging need to upgrade.
“Our biggest competitor was that consumers seem to be satisfied” with DVDs, she said.
Studio executives dismiss that view as sour grapes, pointing to their own research. Fox, for instance, estimates that sales of Blu-ray discs will soar to nearly $1 billion in 2008, from $170 million last year. “Blu-ray growth will more than replace losses from the mature business,” said Mr. Chapek of Disney.
Disney is leaving nothing to chance, mounting an aggressive campaign to persuade consumers to upgrade to Blu-ray. Among its efforts: a Blu-ray exhibit, built to look like the Sleeping Beauty Castle at Disneyland, that tours shopping malls; Blu-ray previews on its DVDs; and a $10 rebate when consumers buy certain Blu-ray movies.
Still, the studios are hedging their bets. Home video executives are racing to “refresh” the traditional DVD to raise sales.
Some, like Warner Brothers, are getting results through more marketing. Mr. Sanders said the studio was releasing more movies on DVD and on video-on-demand services at the same time; typically the two are separated to prevent undercutting either revenue stream. “By pairing up the marketing, V.O.D. and DVD both do a lot better,” he said.
Sony is trying to milk obscure titles from its library that it previously considered unsustainable on DVD, said David Bishop, president of Sony’s home entertainment unit. Last month, it said it would make certain niche movies available to consumers through Hewlett-Packard’s manufactured-on-demand service. “It allows us to sell some of the deeper catalog that retailers would not normally carry,” said Mr. Bishop.
Over-the-top packaging stunts are also helping buoy sales. “We are trying harder to create very handsome, collectible packaging that retailers are proud to put on their shelves,” said Ken Ross, general manager of CBS Home Entertainment. CBS and its distribution partner, Paramount, recently had success with a 34-disc set, priced at $199, of the entire run of “I Love Lucy.”
Mr. Ross sees no weakness in TV shows on DVD — CBS will release 15 percent more titles this year than last — but he said the company was trying to make exclusive agreements with retailers, like a recent deal with Borders for Showtime titles.
“This business certainly isn’t as easy as it used to be,” he said.
Blu-Ray Wins, the Internet Doesn't Care
Last week Toshiba, developer of the HD DVD format, finally acquiesced in the lengthy high definition format war. Sony, and its high definition Blu-Ray format, emerged victorious. Many heralded this event as not only a victory for Sony, but one for the consumer as well. The consumer, apparently befuddled by the multiple HD formats, can now rest easy as Blu-Ray is the heir apparent in the high definition war.
But those who survived the high definition format war will live only to face a new conflict, the war against online distribution.
Long before anyone knew the emerging party in the HD format war, both standard and high definition movies and TV shows were already traded online. Not too long after the advent of Napster, other P2P networks liberated their trading policies and allowed users to trade movies and TV shows. The earliest incarnations of these types of networks were Scour Exchange, iMesh, and Gnutella. Later protocols such as eMule and eventually BitTorrent took over the role of trading larger files.
Only recently, however, have high definition movies made their way online. The next generation of optical disc encryption failed to hold back individuals like Muslix64, who discovered a means to bypass the copy protection. Once this encryption was bypassed, it was only a matter of days before HD movies started showing up online. Because high definition content contains significantly more information than a standard XviD movie, many people were shocked to learn that a full length action movie might easily consume 25 gigabytes or more.
The difference in size has much to do with the actual definition of a movie file. True high definition is defined as 1,080 vertical lines of progressive scan resolution. Hybrid HD/computer monitors are slightly better than this standard, and have 1,200 lines of progressive scan resolution; however only PCs, Macs some game consoles can advantage of this higher definition format.
From there, the smaller the file size, the less “high def” the movie is. 1080i, or 1,080 vertical lines of interlaced resolution, is a lesser standard than 1080p. To save bandwidth, cable companies and TV stations interlace their broadcast. In other words, your TV or HD monitor only refreshes every other vertical line of resolution. The bandwidth hungry progressive scan format refreshes every line. Although the human eye generally can’t decipher interlace from progressive scan, it becomes more of an issue with larger screens. Interlacing is a short cut, and like a stretched HD image, small faults like this become magnified.
There’s a more manageable version of HD known as 720i and 720p. The resolution isn’t nearly a superb as 1080i/p, however it’s a dramatic step forward from standard definition television. In North America, NTSC standard definition is 320 lines of resolution. Most hour long HDTV shows are in the 720i format, which equates a file size between 1 and 2 gigabytes. This file size is generally small enough to make for a tolerable download time wise. Since Muslix64’s accomplishments, HD has become one of fastest growing facets of the file-sharing landscape. To gauge the growing popularity of HD sharing, one only needs to visit MiniNova’s statistics page to see that the NBC sci-fi drama “Heroes” in 720p HD format is the most downloaded torrent.
Remarkably enough, despite the lack of a standardized format and the astronomical price tag associated with Blu-Ray recording media, HD content delivery and trading has become an established niche in the file-sharing world. Like the digital music revolution, the activities of file-sharing community often predict the future of content distribution. In the late 90s, file-sharers renounced their dependency on the CD. Napster, and the P2P networks that came after it, forced the establishment of authorized music stores such as iTunes. Today, the importance of the CD is waning, and digital distribution is becoming the industry standard.
File-sharers today are predicting the future of HD content distribution as well. The ever useful USB flash drive is becoming the de facto transference method, and with their ample capacity, can store several 720i HDTV shows. The more expensive and capable flash drives can store 1080i/p content. However, not everything is cohesive and organized at the moment, as the technological limitations associated with USB and flash memory technology make these methods acceptable to only the more computer savvy crowd.
In fact, most people can’t take advantage of true HD content. With the average broadband speeds in the United States at a disgraceful 2 Mbits/sec, downloading and transferring HD content can take enormous periods of time. And worse yet, unless you’re running a dual core or quad core system, expecting that legacy Pentium 4 to play 1080p HD content is a pipe dream.
Technological limitations will, for now, keep the HD content revolution simmering. The average USB flash drive, broadband, and processor speed inventory is simply too slow to accommodate a market on the scale of iTunes or LimeWire. This is changing fast, and with the upcoming arrival of USB 3.0 with its fiber optic transfer rate of 4.5 Gbits/sec and dropping dual and quad core prices, consumer thirst for HD delivery will only expand.
The demand for HD content will accomplish many things. Perhaps most importantly, it will propel the US’ disgraceful broadband average from the depths of mediocrity and launch it into competition with the rest of the industrialized world. At an average speed of 2 MBits/sec, it would take at least overnight to download a 1080i/p movie - way beyond the patience of the average consumer. Until this improves, a stop-gap technology, in this instance Blu-Ray, is required in order to buy time.
The burgeoning HD content delivery mechanism is already having a noticeable impact on the consumer market. For perhaps the first time, the duration between format shifts (VHS to DVD, DVD to Blu-Ray, Blu-Ray to Internet/Flash Memory) has shrunk so much, the smart consumer can afford to wait on the sidelines. Many consumers, particularly the file-sharing community, already have the hardware infrastructure in place: a 1200p monitor, fast dual/quad core, and a fast broadband connection. This type of consumer placed little importance on the victor in the HD format war, and knows in the end, the Internet always wins.
Bank’s Suit May Hurt Deal for Clear Channel Unit
Andrew Ross Sorkin and Michael J. de la Merced
Another buyout is in danger of collapsing — but this time because one of the banks involved is suing its own client, the private equity firm trying to do the deal.
The deal in jeopardy is Clear Channel’s $1.2 billion sale of its television unit to Providence Equity Partners, a media-focused buyout firm. Providence began to balk at the price, citing deterioration in the business and the economy, prompting a lawsuit by Clear Channel. Yet by late last week, the two sides had struck a deal in principle to lower the price by $100 million.
But now comes a new bombshell. Wachovia, one of the three banks financing the deal, is now refusing to commit. It even sued its client, Providence, in a North Carolina state court on Friday, contending that the new agreement has voided its previous commitment. Goldman Sachs and UBS, the two other banks, have committed to finance the new transaction, which now calls for Providence to borrow less money at a higher interest rate.
The lawsuit offers a new peek inside the tense negotiations between corporate America, Wall Street banks and private equity firms as they try to cope with a worsening economy and stormy credit markets.
Wachovia has an unusual role in Clear Channel, which is based in San Antonio and is the largest owner of radio stations in the United States. Even as it seeks to sell its television unit, Clear Channel is busy trying to close an even larger $25 billion buyout of the rest of the company. Wachovia, based in Charlotte, N.C., had committed to financing both deals.
Wachovia’s jitteriness is not unique, as Wall Street banks fear worsening problems in loans to private equity firms. Over the last two years, banks including Wachovia had queued up to lend hundreds of billions of dollars for buyouts, reaping lucrative fees along the way.
But the near-freeze in the credit markets has made it almost impossible for banks to resell those loans, which now trade at about 85 cents on the dollar. Banks fear that they will have to take large write-downs if they are forced to keep those loans on their books, at a time when many have already taken sizable hits from their bets on subprime mortgages.
Still, while some lenders have refused to finance already announced deals — the buyout of the mortgage lender PHH fell through last month after JPMorgan Chase and Lehman Brothers backed away — it is rare to see a bank turn around and sue its own client.
In the case of the Providence deal, Wachovia has committed to loan $450 million of the $1.2 billion purchase price. If Wachovia causes the deal to collapse, it would be held responsible for a $45 million breakup fee.
Some people inside the deal speculate that Wachovia may be seeking to create an escape hatch from the larger buyout. But it is unclear how Wachovia will accomplish that: The $25 billion deal is not contingent on the sale of the television stations.
Wachovia runs a high risk by suing its own client and killing the television stations deal. As part of financing the larger $25 billion deal, it also agreed to help finance a bridge loan if the smaller deal fell apart.
It may also risk damage to its reputation by turning on its own client. Never one of the biggest players in the leveraged loan market, Wachovia may see its business dry up if potential clients see the bank as a potential turncoat when things go bad.
A hearing on the Wachovia lawsuit is scheduled on Tuesday. Wachovia has hired Robinson, Bradshaw & Hinson, a Charlotte, N.C. firm, as its legal counsel.
Providence and Clear Channel are still hoping to strike a new deal for the television stations as soon as Monday, with UBS and Goldman Sachs still providing financing. But it is unclear whether the deal can close without Wachovia’s support.
Judge on Privacy: Computer Code Trumps the Law
Australian High Court Judge Justice Kirby says computer code is more potent than the law--and that legislators are powerless to do anything about it.
Technology has outpaced the legal system's ability to regulate its use in matters of privacy and fair use rights, said Kirby, speaking Thursday night at an Internet Industry Association (IIA) event.
Kirby said the judicial system has faced difficulties in coping with changes the Internet and computing have brought.
While the soon-to-be-reviewed Privacy Act has incorporated key privacy principles such as "usage limitation"--which states that data collected about an individual cannot be used for other purposes, except by the approval of the law or the person's consent--Google and Yahoo have rendered that principle defunct, Kirby said.
"It was a good moral and ethical principle to keep people's control over the usage that was made of the information...And then along came Google and Yahoo," said Kirby.
"And when the new technology came, there was a massive capacity to range through vast amounts of information. The notion that you could control this was a conundrum," he said, adding that because the technology is considered so useful, privacy concerns have been cast aside.
The challenges that technology present continue to beat even the best legal minds in the world, Kirby said.
Despite this, lawmakers should attempt to implement checks and balances. Without them, corporations pose an even graver problem for humanity.
"To do nothing is to make a decision to let others go and take technology where they will. There are even more acute questions arising in biotechnology and informatics, such as the hybridization of the human species and other species. Points of no return can be reached," he said.
However, technology has already allowed corporations to beat the legal system, said Kirby, citing the case Sony brought against Australian businessman, Eddy Stevens, in 2005 for modifying Sony PlayStations.
Despite the High Court ruling in favor of Stevens, the decision was later overturned by the government after the U.S. government pressed it to make legislative amendments to protect Sony's right to restrict where consumers buy its software from.
"We are moving to a point in the world where more and more law will be expressed in its effective way, not in terms of statutes solidly enacted by the parliament...but in the technology itself--code," said Kirby.
Yahoo CEO Yang Seeks Release OF 2 Jailed Pro-Democracy Journalists
Yahoo Chief Executive Jerry Yang is asking Secretary of State Condoleezza Rice to help win the release of two jailed pro-democracy journalists who accused the Sunnyvale search giant of handing over e-mail records to Chinese authorities that led to their imprisonment.
In a letter to Rice, who is traveling to China next week, Yang asked that she "actively pursue" the freedom of Shi Tao, a business journalist who was arrested in November 2004, and Wang Xiaoning, an editor who was arrested in September 2002.
In his letter, dated Thursday, Yang wrote, "I am writing to urge your assistance in alleviating the plight of political dissidents who have expressed their views over the Internet in China, and in addressing the related challenges confronting U.S. companies like Yahoo that invest in global markets."
In November, Yahoo settled a lawsuit against it by the two imprisoned Chinese journalists, who were each given 10-year prison sentences. The company also said it would work to free the two. It set up a human rights fund that will provide humanitarian and legal aid to dissidents who have been arrested for expressing their views online.
Yang, who co-founded Yahoo but was not CEO at the time of the arrests of Shi and Wang, was personally involved with the settlement. He apologized to the journalists' families during a November congressional hearing, at which he and his company came under withering criticism.
"Yahoo deeply regrets the circumstances
that led to the imprisonment of individuals in China - including Mr. Shi Tao and Mr. Wang Xiaoning - simply due to the exercise of their right to free expression," the Taiwan-born Yang said in the letter.
Colin Maclay, managing director for the Berkman Center for Internet & Society at Harvard University, called Yang's letter "very genuine."
"They went to China early and didn't think it through," he said. Now, Maclay added, "I believe the CEO, and the organization, is committed to doing the right thing."
He and other academics, as well as human rights activists, are working with Yahoo, Microsoft, Google, United Kingdom-based mobile phone company Vodafone Group and investment groups to develop a code of conduct for operating in countries that censor Internet activity.
While Yang said Yahoo is talking with high-level Chinese officials, their influence can never approach that of the State Department, Maclay said.
"The U.S. government has a very big stick," he said.
EU May Begin Treating 'Net Censorship as a Trade Barrier
The European Parliament recently passed a proposal to treat Internet censorship by repressive regimes as a trade barrier. The proposal, submitted by Jules Maaten of the rightist Dutch VVD party, passed on a 571-38 vote. Maaten describes it as an "unusual, but effective way" to promote freedom of expression on the Internet.
The initiative targets countries that have enacted heavy restrictions what their citizens can do and see online. First and foremost on the list is China and its "great firewall." The Chinese government is well known for blocking certain phrases and web sites from view within its borders, and has also turned its attention to RSS feeds. The country also "encourages" bloggers to register with the government.
"The 'Great Chinese Firewall' should be seen as an international trade barrier," Maaten said according to Livre. "In addition to American companies like Google, Yahoo, and Microsoft, European Internet companies like Wanadoo, Telecom Italia, and France Telecom have to unwillingly censor their services in authoritarian states."
The American companies named by Maaten have been criticized for their willingness to go along with the Chinese government's censorship requirements. In early 2006, executives from those companies were hauled before Congress to answer questions about their business practices in China, while Yahoo has apologized for withholding information from congressional investigators looking into the company's disclosure of dissident e-mails. Amnesty International has also been critical of Google, Microsoft, and Yahoo's dealings in China.
If adopted, Maaten's proposal would require the EU to classify any Internet censorship as a barrier to trade, and would require that the issue be raised in any trade negotiations. Economic sanctions and trade restrictions have been used in the past as means of getting countries to change their policies, but this is one of the first proposals to tie trade to 'Net censorship.
The measure will now go to the European Council for consideration. The Council can either adopt the proposal as passed by Parliament or send it back with further amendments.
Teachers Strike Back at Students' Online Pranks
Students are increasingly facing lawsuits and expulsions for targeting their teachers online.
Tech-savvy teenagers are increasingly paying a heavy price – including criminal arrest – for parodying their teachers on the Internet.
Tired of fat jokes and false accusations of teacher-lounge partying or worse, teachers and principals are fighting back against digital ridicule and slander by their students – often with civil lawsuits and long-term suspensions or permanent expulsions.
A National School Boards Association (NSBA) study says that as many as one-third of American teens regularly post inappropriate language or manipulated images on the Web. Most online pranks deride other students. But a NSBA November 2006 survey reported 26 percent of teachers and principals being targeted.
"Kids have been pulling pranks on teachers and principals since there have been schools in the US, but now there's an edge to it – the tone and tenor of some of these attacks cross the line," says Nora Carr, a spokeswoman for Charlotte-Mecklenburg schools in North Carolina.
In the growing backlash against these cybergoofs, however, real-world norms of propriety are being pitted against the uncertain jurisdictions of the Digital Age. A new test may be emerging on how far online lampooning can go, say First Amendment experts – and to what extent schools can control off-campus pranks.
Cracking down on online bullying
Currently, 45 states have so-called cyberstalking laws and 11 prohibit cyberbullying. Until now, the concern has largely been for students, 80 percent of whom reported Internet bullying in 2006, according to NBTA.
After the suicide of a Missouri girl who was bullied online by an adult, even small towns have begun to crack down. Dardenne Prairie, Mo., where the girl lived, raised the penalty for cyberharassment to a misdemeanor – the highest municipal charge allowed by state law.
"[W]e're starting to look at [bullying] from a whole other angle," says Bob Menichino, a Dardennes Prairie alderman in a phone interview. "People can't just say, 'Sorry, it was a joke,' anymore."
But teachers can be particularly vulnerable to online attacks, too, because they are in positions of authority. Legally, they are not usually considered public persons, however, and are thus not fair game under US libel laws, says Regina Bartholomew, the general counsel for Charlotte-Mecklenburg schools.
Still, in many cases, "the damage is already done by the time the teacher hears about it," says Eddie Davis, president of the North Carolina teachers' association.
In the so-called "Teacher Sux" case in Pennsylvania, for example, a high school student put up a website about a teacher with threats and comments such as "she shows off her fat ... legs."
The lawsuit against the student said that after viewing the web page, the teacher felt unable "to go out of the house and mingle with crowds."
Few cities have gone as far as Charlotte, N.C., in cracking down on online attacks against teachers. Last August, Charlotte-Mecklenburg Schools hired cyber-crimes expert Det. Kenny Lynch to deal with the growing number of complaints.
In one case, a teacher reported receiving a large number of propositional phone calls and e-mails from gay men after a student posted the teacher's name and contact information on a gay website.
Another incident involved a parent filming a teacher's backside during a class skit and then posting the clip on the Internet to the strains of Van Halen's "Hot for Teacher." The site was removed and no charges were filed.
Last month, Charlotte became the second North Carolina school district to criminally charge a student for creating a website that accused a teacher of criminal behavior including pedophilia. Last year, Mooresville, N.C., authorities had arrested two students for making threats and racial slurs online about a principal.
"The days of girls keeping things in a diary are over," says Detective Lynch. "Do I think these kids had any intent to cause harm to the teacher? No, I don't think so. But there's been teachers that have left the profession or lost their jobs because of lies that have been told about them."
Laws may hurt free speech rights
North Carolina's cyberstalking law makes it illegal to electronically communicate false statements about "indecent conduct or criminal conduct ... with the intent to abuse, annoy, threaten, terrify, harass or embarrass."
Critics, however, contend that words like "annoy" and "embarrass" are too broad and may infringe upon First Amendment protections of parody.
"What I'm not seeing is school officials approaching this in an adult manner," says Vic Walczak, the legal director for the American Civil Liberties Union in Pennsylvania. "They're approaching it in an authoritarian fashion...."
Critics also note that courts have ruled that students are culpable for off-campus expression if it disrupts the teacher's ability to teach. In a Connecticut case where a disgruntled student council member called the principal a vulgarity on her blog, the student's speech may have offended, but showed no evidence of causing disruption at school, says Nancy Willard, author of "Cyber-bullying and Cyber Threats." Still, the principal barred the student from running the next year.
Sometimes, the students are "clearly engaging in irresponsible behavior, but other times it's pretty darn clear that they have either an incompetent staff member or a staff member who has been bullying them," says Ms. Willard.
Are schools overstepping legal bounds when they punish students for online pranks? "That's a difficult question that the US Supreme Court has never directly answered," says David Hudson, a scholar at the First Amendment Center in Washington, D.C.
The distinction is likely to become more important as state legislatures try to figure out how to protect students and teachers from cruel online buffoonery, while respecting free speech. Says Lamar Bailey, a research analyst with the National Conference of State Legislatures in Denver, "On the surface, it seems simple. But it can get a little dicey."
Photo Tech Complicates Child-Porn Cases
Each week, about 100,000 sexually explicit images of children arrive on CDs or portable disk drives at Michelle Collins' office.
They are sent by police and prosecutors who hope Collins and her 11 analysts at the National Center for Missing and Exploited Children can verify that the graphic pictures are real, not computer-generated. When they can't, officials sometimes turn to outside experts.
All this is being done - at an annual cost in the millions of dollars collectively in child-pornography cases alone - as software like Photoshop makes it easier to fake photos and as juries become more skeptical about what they see.
Although challenges to digital photos come in all types of criminal and civil cases, they are especially pronounced in child-pornography cases because of a 2002 U.S. Supreme Court decision striking down a ban on computer-generated child pornography. Defense attorneys are trying to use the ruling to introduce reasonable doubt in jurors' minds about the images' authenticity.
Prosecutors still generally prevail, but "this has certainly created an additional burden," said Thomas Kerle of the Massachusetts State Police. "I can say that unequivocally, it has made the prosecution of these types of cases more difficult. It takes ... resources I think could be better applied to investigating" more cases.
Drew Oosterbaan, who heads the U.S. Department of Justice's Child Exploitation and Obscenity Section, said prosecutors sometimes submit only photos they can easily verify because outside experts can be expensive - with travel, hotels and consulting fees, along with possible delays.
"This can affect the sentence the defendant gets," he said. "Before (the 2002 ruling) we would generally charge all the images."
Oosterbaan added that although defense lawyers have the right - and duty - to challenge evidence, they are doing so without "any shred of evidence there are wholly computer-generated images being generally circulated and passed off as real children out there."
And many law-enforcement officials worry that the time and money needed to withstand any challenges will only grow as technology improves and makes it more difficult to tell a computer-generated image from a real one.
"I feel that pretty much we can tell the difference right now," said Karl Youngblood of the Alabama Bureau of Investigation. "How much longer that's going to last, I don't know with the technology going at the rate it's going."
Of course, there's a cost to defendants as well - sometimes more so because federal law limits where and when the defense may review images to restrict their distribution, meaning experts must often travel with expensive equipment to a police lab in another city.
"If something becomes more difficult for the government to prove, so be it. They have the burden of proof," said First Amendment lawyer Louis Sirkin, lead counsel in the challenge that led to the 2002 Supreme Court ruling.
Child pornography is illegal in the United States, but the Supreme Court in 2002 struck down on free-speech grounds a 1996 federal ban on material that "appears to be" a child in a sexually explicit situation. That ruling covers computer-generated images, though morphing - such as the grafting of a child's school picture onto a naked body - remains illegal.
Collins' Child Victim Identification Program in Alexandria, Va., grew out of that ruling. After officials submit seized photos, the center uses software and visual inspections to look for matches. It can usually verify that children in some or all of the images are known and real.
The program, which costs about $1 million a year to run, now has about 1,300 children in its database, up from 20 in 2002. Staff grew from just Collins then to 11 full-time analysts who now work under her. The program reviewed 5 million images last year, up from about 450,000 in 2003, the program's first full year.
Because of the graphic nature of the images, a psychologist visits each week, and analysts must undergo counseling at least quarterly.
"Not everybody can do it," said Raymond Smith, a longtime investigator who oversees child-exploitation cases at the U.S. Postal Inspection Service. "You have to be able to come to grips with seeing children be victimized and abused. It can tear you up, (but) through your efforts you are identifying the people that hurt these children."
When the center cannot make a match, prosecutors can turn to outside experts. Sometimes, it's a pediatrician who can say a real child has characteristics matching those seen in the photo. Other times it's a computer expert who can talk about how difficult it is to produce images and video of that quality.
Hany Farid, a Dartmouth College professor who has testified for the prosecution in some cases, said he has been getting more inquiries about authenticity - not only for child-pornography cases but also civil lawsuits questioning medical images in malpractice cases or signatures in contract disputes. News organizations have also looking for ways to authenticate photos.
"Because so many people get photographic fakes in their (electronic) mailboxes, to the average juror it resonates," he said.
The challenges can be costly, even if a case never goes to trial - the majority end in plea agreements.
Farid said he charges up to $25,000 a year for software he produced to look for signs of tampering, such as inconsistencies in shadows. He also charges as much as tens of thousands of dollars to work on a case.
Even when there is a match and an expert isn't needed, a prosecutor must seek out the detective who initially identified a child for the center. That detective must often be flown in and be ready to testify if the defense raises a challenge. In one case in Portland, Maine, a Russian detective couldn't be reached, so the prosecutor had to spend $5,000 on an expert anyway. Trials get postponed if a key witness has a scheduling conflict.
Sam Guiberson, a defense attorney who specializes in technology and digital evidence, said challenges to evidence are to be expected, digital or not.
"Every good trial lawyer is always going to subject every part of his adversary's exhibits to that sort of scrutiny," Guiberson said.
Kebin Haller, deputy director of the Wyoming Division of Criminal Investigation, said that in most cases, a large quantity of images are seized such that enough hold up.
How much proof a prosecutor needs in child-pornography cases can vary from region to region and even from judge to judge. Recent federal appellate rulings have eased the burden on prosecutors, essentially saying that in lieu of definitive evidence, they can let jurors make up their own minds about whether an image is real or computer-generated.
Many prosecutors, though, don't want to take that chance and would rather submit proof.
"It's difficult to prove these are real children," said Mary Leary, a Catholic University law professor who previously worked on child-abuse and child-pornography cases. "Is the defense exploiting this? Absolutely they are."
Spot the 'Invisible' Men and Women in Artist's Amazing Photographs
In the natural world, the chameleon blends in perfectly with its background.
In the urban jungle, Desiree Palmen decided to attempt the same visual deception.
And as these pictures show, the effect is amazing.
Miss Palmen, a 44-year-old Dutch artist, uses a method that requires a huge amount of effort and attention to detail.
She makes cotton suits and paints the camouflage on by hand, painstakingly matching it to the chosen background. Either she or a model then poses in the suit in the chosen place.
The scenes are photographed and filmed and then put on display.
"People always react strongly when they see my work," she said.
"They have mixed reactions: confusion, surprise and interest."
She added: "Mostly people like the idea of wearing garments that make them invisible."
It takes hours for her to paint the suits. First she takes photographs of the scene then, back in the studio, she meticulously transfers the detail on to the cotton suit with acrylic paints.
The match of colour, texture, light and hue is extraordinarily accurate but the artist remains modest.
"It's never perfect," she said. "But when it works that's enough for me. I like the fact people can see it's a real person in a suit and not a fake digital image."
She regularly displays her works on the streets of Jerusalem, Rotterdam and Berlin.
She has produced exterior and interior shots - in the latter she blends in with a bookcase, a desk and a flight of stairs.
She got the idea for her unusual art from the increasing use of "Big Brother" surveillance.
She said: "I'd like people to consider what it means to let the government control our daily lives.
"When we are controlled we hand over our individual responsibilities to the state. I wanted to make a suit for the non-criminal citizen whose house is being watched 24 hours by street surveillance cameras. I'm also responding to a wish to disappear."
Miss Palmen, who studied sculpture at The Academy of Art in Maastricht, sells her pictures for around £1,500.
She has enjoyed success at dozens of exhibitions around Europe but has yet to bring her work to Britain.
She finds that children are often fascinated by her work.
"There was one little boy in Jerusalem who kept coming back to the camouflaged figure over and over again," she said.
Did Adolf Hitler Draw Disney Characters?
The director of a Norwegian museum claimed yesterday to have discovered cartoons drawn by Adolf Hitler during the Second World War.
William Hakvaag, the director of a war museum in northern Norway, said he found the drawings hidden in a painting signed "A. Hitler" that he bought at an auction in Germany.
He found coloured cartoons of the characters Bashful and Doc from the 1937 Disney film Snow White and the Seven Dwarfs, which were signed A.H., and an unsigned sketch of Pinocchio as he appeared in the 1940 Disney film.
Hitler tried to make a living as an artist before his rise to power. While there was no independent confirmation yesterday that the drawings were the work of the Nazi leader, Hitler is known to have owned a copy of Snow White, the classic animated adaptation of a German fairy tale, and to have viewed it in his private cinema.
Mr Hakvaag, who said he had performed tests on the paintings which suggested that they dated from 1940, said: "I am 100 per cent sure that these are drawings by Hitler. If one wanted to make a forgery, one would never hide it in the back of a picture, where it might never be discovered."
The initials on the sketches, and the signature on the painting, matched other copies of Hitler's handwriting, he claimed.
"Hitler had a copy of Snow White," he said. "He thought this was one of the best movies ever made."
Discoveries of Nazi-era memorabilia have repeatedly turned out to be mistaken or the result of a hoax. However, art attributed to Hitler continues to sell at auction, even if its provenance is far from complete.
Nineteen watercolours and two sketches said to be by Hitler were sold in Britain two years ago for a total of £118,000.
The auction firm Jefferys said the seller did everything possible to authenticate the works.
The pictures of cottages and rural scenes were found in a farmhouse in Belgium and were believed to have been painted while Hitler was a young soldier in the country during the First World War.
In Los Angeles, Oscar Statues Become a Popular Export
The morning after the Academy Awards dawned here with a realization: There will be a lot of gold leaving Los Angeles in the next few days.
Javier Bardem, Marion Cotillard, Daniel Day-Lewis and Tilda Swinton are each taking statues across the Atlantic. Oscars for art direction, makeup and costume design all went to people for whom the United States is a passport stamp.
And even some of the Americans were from far away: Joel and Ethan Coen, who generally come here only under duress, will be going back to their home in New York with three Oscars for their “No Country for Old Men,” which won for best picture, best director and best adapted screenplay. So will one of the movie’s producers, Scott Rudin, who joined them for his own victory lap onstage.
The libretto for Sunday night’s Academy Awards was written in many tongues, and even the melody that went with it carried a faraway tone. The lustrous industrial pedigree of Alan Mencken and Disney had three songs from “Enchanted” in the running, but all were trumped by a pair of footloose buskers, Glen Hansard and Marketa Irglova, one Irish, one Czech, for “Falling Slowly” from “Once,” an Irish film that was made on a budget that might pay the craft services bill on a studio picture for a week.
On Monday, as it watched all the loot leave town, the industry that bestows it could not be blamed for asking the same question that Butch Cassidy put to the Sundance Kid about their relentless pursuers: “Who are these guys?” It was a decent-to-good evening inside the Kodak Theater: the academy and Jon Stewart shook off the conflict of the writers’ strike and were game to put on a conservative show. But a huge, throbbing mechanism of Los Angeles agents, producers, and corner-office folk went mostly unthanked and unrewarded.
For the last couple of years, Hollywood has managed to fend off several attempted kidnappings. Two years ago it looked as if a posse of small movies from the East Coast would leave town with their hands full, but “Crash” passed them all on the freeway: a Hollywood movie about Angeleno concerns. Last year, same thing: “The Departed” did exactly what you’d expect of a movie with Big Stars and Big Box Office, winning four Oscars, including best picture.
Not so this year. For the first time since 1964, when Rex Harrison, Julie Andrews, Peter Ustinov and Lila Kedrova captured all four best actor slots, American actors couldn’t get a seat at their own table. In a more curious twist — from which Ms. Cotillard was exempt in her twirl as Édith Piaf in “La Vie en Rose” — foreigners were awarded for inhabiting particularly American archetypes. Mr. Day-Lewis did not portray just a rising titan in “There Will Be Blood,” after all: his role was early American capitalism itself. Ms. Swinton was more contemporary in “Michael Clayton,” but it was an equally dark-hearted version of same. And Mr. Bardem won for a role in a movie based on a novel by Cormac McCarthy, the Boswell of the American soul.
American actresses who were raised to think that impossible glamour and demure comportment were the surest routes to the top must have watched in amazement as Ms. Swinton was handed the crown. With a shock of spiky red hair; a rich, complicated private life; and a heavy dress that looked snipped from the stage curtain, Ms. Swinton, a consistently brilliant actress, seemed more like an ancient Druid than a movie star.
“It was a huge victory for the Celts,” she said, cradling her statue at the Governors Ball after the ceremony. “Spain, France, England, we all served as a reminder that it was Europeans that invented Hollywood in the first place.”
The Governors Ball after the Oscars ceremony is a gigantic industry tree house. No one comes for the food, although it was lavish and abundant. You show up, instead, to claim a place in the hierarchy and to check status. A quick walk around the room showed a democratic dispersal of hardware and congratulations given and received in all manner of accents and idioms.
Some of that international hegemony — or absence of parochialism, depending on your perspective — goes all the way to the top. Daniel Battsek, chief executive of Miramax, and Peter Rice, president of Fox Searchlight, are both British and both in the thick of things. This year Miramax had a piece of “No Country,” “There Will Be Blood,” and “Diving Bell and the Butterfly.” And Fox Searchlight may not have won the ultimate prize, but in each of the last two years it came up with movies — “Juno” and “Little Miss Sunshine” — that have made a lot of money and were also around for the Oscar dance.
At the Governors Ball, Sid Ganis, the president of the academy, seemed thrilled that he and his crew had acquitted themselves against the tough circumstance of a recently settled writers’ strike. He said he wasn’t about to overanalyze the results.
“It was a great reminder that we are an international organization, that we want to reflect the best in cinema from all over the world,” he said. “It would be nice to have a few Americans in there, but we are extremely proud of the academy’s choices.”
Which is interesting in itself. The academy has long been accused of a provincialism woven with leaden taste, but its members proved this year that they will vote for what they perceive to be great work, regardless of its lineage or commercial impact.
(Indeed, major studios really only hit it big in the tech categories, with “The Bourne Ultimatum” winning for sound editing and mixing, and film editing.)
The version of Hollywood that we all think of when we think of the Oscar show was mostly relegated to those who served as presenters. George Clooney — crown prince and class clown alike — was up for best actor but focused on his presenter duties, presenting 80 years of Oscar glory.
“I’m not going up there for an award today,” Mr. Clooney said on the red carpet before the show. “This is Daniel’s year.”
Pakistan Blocks YouTube for 'Blasphemous' Content: Officials
Pakistan has ordered all Internet service providers to block the YouTube website for containing "blasphemous" content and material considered offensive to Islam, officials said Sunday. An inter-ministerial committee has decided to block YouTube because it contained "blasphemous content, videos and documents," a government official told AFP.
"The site will remain blocked till further orders," he said.
Other officials said the site had been blocked because it contained controversial sketches of the Prophet Mohammed which were republished by Danish newspapers earlier this month.
One major service provider, Micronet, said in an email to subscribers that the Pakistan Telecommunications Authority had directed all ISPs to block access to YouTube "for containing blasphemous web content/movies."
"Meanwhile Internet users can write to YouTube.com to remove the objectionable web content/movies because this removal would enable the authorities to order un-blocking of this website," the email said.
At least 17 Danish newspapers republished the controversial drawing, vowing to defend freedom of expression a day after Danish police said they had foiled a plot to murder the cartoonist.
In the latest in a series of demonstrations over the cartoons in Pakistan, hundreds of hardline Islamists in the southern city of Karachi torched effigies of the Danish prime minister and the cartoonist on Sunday, witnesses said.
"Death to cartoonist," the demonstrators chanted before burning the effigies, as well as US and Danish flags, outside a mosque.
Supporters of cricketer-turned-politician Imran Khan's small opposition party also staged a small protest in Karachi.
In the southwestern city of Quetta, activists from a hardline Islamic organisation burned a Danish flag. Witnesses said they also demanded the government close Danish missions in Islamabad and end diplomatic relations.
"It is a deliberate attempt to malign Islam and hurt the feelings of Muslims," Habib Shah Kerani told the protesters from the Anjman-e-Islam (Organisation of Islam) group.
Some 12 cartoons published in September 2005 by the Danish Jyllands-Posten newspaper sparked bloody riots in the Islamic world.
Five people died in Pakistan in February 2006 during protests against the cartoons, while a Pakistani cleric offered a reward of one million dollars and a new car for anyone who killed any of the cartoonists.
Insecure Routing Redirects YouTube to Pakistan
Iljitsch van Beijnum
On Sunday, YouTube became unreachable from most, if not all, of the Internet. No "sorry we're down" or cutesy kitten-with-screwdriver page, nothing. What happened was that packets sent to YouTube were flowing to Pakistan. Which was curious, because the Pakistan government had just instituted a ban on the popular video sharing site. What apparently happened is that Pakistan Telecom routed the address block that YouTube's servers are into a "black hole" as a simple measure to filter access to the service. However, this routing information escaped from Pakistan Telecom to its ISP PCCW in Hong Kong, which propagated the route to the rest of the world. So any packets for YouTube would end up in Pakistan Telecom's black hole instead.
On the North American Network Operators Group (NANOG) mailing list, where many engineers in charge of Internet routing hang out, the consensus is that this was an accident. Only one or two people suggest that it may be a malicious act, possibly a trial of something bigger. So why was this incident so devastating to YouTube's reachability?
Originally, IP addressing was set up for three different classes of users: classes A, B, and C. Class A users, such as the original ARPANET, got an address block of 16777216 addresses so they could connect millions of systems to the Internet. Class B users, such as universities, got 65536 addresses. Class C users, such as businesses with only a small number of Internet-connected systems, got 256 addresses. Obviously, these classes often didn't fit well with the number of addresses needed, which led to a lot of waste. So in the early 1990s, a new system called Classless Inter-Domain Routing (CIDR) was created so that IP addresses could be used much more efficiently.
CIDR allows address blocks to be given out in power of two blocks, such as 256 (/24), 512 (/23), 1024 (/22), and so on. The number after the slash indicates how many of the 32 address bits are "network" bits, the remaining bits are used to number hosts. So /24 is 24 network bits and 8 bits to number hosts, which allows for 256 addresses. An interesting side effect of CIDR is that a particular IP address can now fall within multiple address ranges. For instance, a router could have both 10.0.0.0/8 and 10.10.0.0/16 in its routing table. Then, if a packet for 10.10.10.10 arrives, how should it be forwarded? The answer is: longest match first. The smallest address block, with the largest number after the slash, takes precedence.
In the case of YouTube and Pakistan Telecom, YouTube injected the address block 188.8.131.52/22 (184.108.40.206 - 220.127.116.11) in the Internet's routing tables, while Pakistan Telecom advertised the 18.104.22.168/24 (22.214.171.124 - 126.96.36.199) block. So even though YouTube's routing information was still there, packets would flow towards Pakistan Telecom because of the longest match first rule.
This vulnerability has been known for a long time, and smaller-scale accidents of this nature happen at regular intervals. But so far, efforts within the IETF to make the Border Gateway Protocol, which governs Internet routing, more robust against this type of accident (or attack) haven't produced any results yet. There are routing databases around the world where network operators can register their IP address blocks for the purpose of generating filters automatically, but since everyone has to register their own address blocks, and many people don't, the filters generated from these databases often do more harm than good. This means that the only thing that prevents things like this from happening are the filters that everyone sets up for their own address blocks, and filters that ISPs apply to their BGP-capable customers manually.
A likely result of this incident is that more network operators will start to announce their IP address blocks as a collection of /24 blocks. /24 is the smallest address range that is widely accepted between ISPs, so announcing the /24 yourself provides some protection against others doing the same. However, the problem with that is that it increases the routing tables in routers, which exacerbates problems from global routing table growth that already exist.
Pakistan Lifts Curbs on YouTube, Says 'Blasphemous' Video Clip has Been Removed
Pakistan's telecommunications regulator said Tuesday that it had lifted restrictions imposed on YouTube over an anti-Islamic video clip, but rejected blame for a cut in access to the Web site in many countries over the weekend.
The authority told Pakistani Internet service providers to restore access to the site on Tuesday afternoon after the removal of a video featuring a Dutch lawmaker who has said he plans to release a movie portraying Islam as fascist and prone to inciting violence against women and homosexuals.
Officials here have described the YouTube clip as "very blasphemous" and warned that it could fan religious fanaticism and hatred of the West in Pakistan, where the government already faces a growing Islamic insurgency.
But Pakistan says it did not want to interfere with access to YouTube outside Pakistan.
"We are not hackers. Why would we do that?" Shahzada Alam Malik, head of the Pakistan Telecommunication Authority, told AP Television News. YouTube's wider problem were likely caused by a "malfunction" elsewhere, he said.
The lawmaker said his film criticizing the Quran will be completed this week and criticized Pakistan for its moves to block the clip.
"It's far from a true democracy," the lawmaker, Geert Wilders, told The Associated Press. "A real democracy must be able to bear some criticism."
He said in a telephone interview with that his short film is in the final stages of
Telecommunication Authority spokeswoman Nabiha Mahmood said attempts to access the offending clip on Tuesday afternoon brought up only a message explaining that it had been removed on ethical grounds.
She said the telecom regulator had posted a complaint through the Web site - a facility open to any registered user - but had not been in contact with the administrators of YouTube.com, which is owned by Google, Inc.
The authority wanted to restrict the site only in Pakistan but the move inadvertently cut access for most of the world's Internet users for up to two hours on Sunday, highlighting the vulnerability of the Internet.
Spokesman Ricardo Reyes said YouTube was pleased to confirm that the site was again accessible in Pakistan. YouTube said Monday that the cut was caused by a network in Pakistan. Reyes would not comment further on the cause of the global outage, but said the company is continuing to look at ways to prevent recurrences.
Todd Underwood, a senior manager at Renesys Corp, a U.S. company that tracks the pathways of the Internet, said a Pakistani telecommunications company complied with the block by directing requests for YouTube videos to a "black hole."
The problem was that the company accidentally identified itself to Internet computers as the world's fastest route to YouTube, leading requests from across the Internet to same dead end, Underwood said.
"This I would say could be an accident, or could be some technical defect or malfunction," Malik said. "We never wanted to do that and I don't think our technical people have done it."
Pakistani officials want to prevent a repeat of the violent anti-Western protests in early 2006 after a Danish newspaper published cartoons of the Prophet Muhammad regarded by many Muslims as offensive.
The upper house of Pakistan's parliament on Tuesday passed a resolution condemning the reprinting of the cartoons this month in Danish newspapers.
On Tuesday, some 300 students rallied at a university in the central city of Multan, carrying banners denouncing Denmark, the United States and Pakistani President Pervez Musharraf - the latest in a series of small protests held by Islamic students in Pakistan.
While a raft of other videos featuring Wilders would remain visible to Pakistani Internet surfers, Mahmood said the one which was removed had been "totally anti-Quranic ... very blasphemous."
She said it promoted Wilders' upcoming movie, but provided no detail of its content.
Abdullah Riar, Pakistan's minister for information technology and telecommunications, said authorities worried that Islamic hard-liners would seize on the clip.
He said the cause of protecting free speech in Pakistan was better served by preventing confrontation between Muslims and the West than allowing the clip to be shown, despite the publicity generated by the temporary ban.
"We are already in the spotlight on the issue of intolerance and extremism and terrorism and this is something that somebody is doing by design to excite and insinuate Islamic sentiments," Riar said.
He said the unintended effects were "very unfortunate. We have nothing against the YouTube site itself."
Struggling to Squelch an Internet Rumor
Samuel G. Freedman
Prof. Jeremy D. Popkin returned to his office at the University of Kentucky on Feb. 19 after teaching a lesson about Vichy France in his course on the Holocaust. During its 30 years on the curriculum, the class has grown perpetually popular, with 60 applicants vying for half as many seats. The university has even created a Judaic Studies program.
Yet, when Professor Popkin opened his e-mail that day, he was informed that his class did not exist. “This week, the University of Kentucky removed the Holocaust from its school curriculum,” the message stated, “because it offended the Muslim population, which claims it never occurred.” All faculty members’ e-mail addresses from the history department were listed among the message’s recipients.
Over the past year, faculty members and administrators at the university’s main campus in Lexington have collectively received thousands of e-mail messages like this one, repeating the same baseless accusation — that pressure from Muslims had led the university to drop its Holocaust course. Like many who have sent these messages, the writer added her own preface to the one that appeared in Professor Popkin’s mailbox, writing in part: “I cannot see how you faculty can go to work each day and face a generation of young adults that will be lied to even more than my generation. What next? Are we going to rewrite the facts of 9/11 so that they fit the Middle Eastern beliefs? This is simply shameful, and I am disgusted by it.”
Any university trades on its reputation, and in recent years, Kentucky has been trying to improve its own. It has vigorously deepened its academic programs and added to its faculty, in hopes of raising its national standing and proving itself to be more than just a perennial basketball powerhouse. The last thing it needs, university officials say, is this smear on its good name.
“Initially, you get a couple of e-mails that on the face of it are ludicrous,” said Jay Blanton, executive director of public relations and marketing for the university. “We thought, surely people aren’t going to take this preposterous rumor seriously. And then you see it doesn’t die, it persists.”
The university’s president, Lee T. Todd Jr., expressed similar consternation.
“I understand quite well the power of the Internet,” he wrote in an e-mail message. “Information flows instantaneously without respect to somewhat arbitrary borders of geography or nation state. That’s a positive. In this instance, though, the University of Kentucky is experiencing the flip side of that power — the negative impact of an unfounded rumor that flows across a world seemingly without check. It’s disconcerting, although perhaps understandable in that context, that so many people would be the victim of a rumor so patently and obviously without merit.”
The false e-mail messages began in late April last year. A few weeks earlier, The Daily Telegraph in London had published an article online about a national commission in Britain recommending the best ways to teach difficult subject matter like the Holocaust. A subsequent article, also in The Telegraph, mentioned a school in Birmingham, England, that had dropped the Holocaust from study for fear that it would incite anti-Semitic comments from Muslim students.
As those news reports made the e-mail rounds, one or several or many readers apparently mistook the suffix for British e-mail addresses, “uk,” not to mean “United Kingdom,” but the “University of Kentucky.” The first version of the diatribe against the university began coursing through cyberspace, urging recipients to keep forwarding it until it reached “40 million people worldwide.” And the message began pouring into various computers at Kentucky, including those of the president, provost and dean of arts and sciences.
A rumor like this, said Kumble R. Subbaswamy, a physicist who is provost of the university, “can cause great problems.”
“You can’t put the genie back in the bottle,” he continued. “It’s Kafkaesque. Just when you think you’ve tamped it down, it shows up on another Listserv.”
THE initial deluge of e-mail messages subsided by early last summer. By November, however, a slightly different incarnation began arriving in ever greater numbers. At that point, Mr. Blanton drafted a press release refuting the rumor and sent it throughout the educational and general media, as well as to individuals who had sent in complaints.
A few significant media outlets did their own coverage of the rumor. Yet despite articles in The Jerusalem Post and The Minneapolis Star-Tribune and an especially thorough investigation by the Web site snopes.com — and even despite a statement of Kentucky’s innocence from the Anti-Defamation League — people kept on forwarding the message.
One can only speculate why. Mr. Blanton said he wondered if “people buy into stereotypes,” that Kentuckians are a bunch of ignorant hicks who would believe any rumor.
Professor Popkin suggested that the international visibility of Iran’s president, Mahmoud Ahmadinejad — who has called the Holocaust a “myth” and sponsored a conference of people who denied the mass extermination of Jews by the Nazi regime — may have somehow given undeserved authenticity to the idea that the university would stop teaching the course. And among some advocates of Jewish American causes, mostly but not entirely on the political right, there is a common view of universities as being inherently hostile to Israel and Jews, again making it seem possible that Kentucky would have dropped the class.
Meanwhile, the e-mail messages put blame for something that never happened on people like Yahya Ahmed, a senior at Kentucky and president of the school’s chapter of the Muslim Student Association. “Something of this nature is not in our nature,” he said. “We’ve tried to promote unity on this campus, and this is detrimental.”
Mr. Ahmed has not taken Professor Popkin’s course. Then again, he has found other ways to educate himself. Last month, he went on a study trip to Israel. While in Jerusalem, he visited Yad Vashem, the memorial museum of the Holocaust.
The Encyclopedia of Life, No Bookshelf Required
Imagine the Book of All Species: a single volume made up of one-page descriptions of every species known to science. On one page is the blue-footed booby. On another, the Douglas fir. Another, the oyster mushroom. If you owned the Book of All Species, you would need quite a bookshelf to hold it. Just to cover the 1.8 million known species, the book would have to be more than 300 feet long. And you’d have to be ready to expand the bookshelf strikingly, because scientists estimate there are 10 times more species waiting to be discovered.
It sounds surreal, and yet scientists are writing the Book of All Species. Or to be more precise, they are building a Web site called the Encyclopedia of Life (www.eol.org). On Thursday its authors, an international team of scientists, will introduce the first 30,000 pages, and within a decade, they predict, they will have the other 1.77 million.
While many of those pages may be sparse at first, the authors hope that the world’s scientific community will pool all of its knowledge on the pages. Unlike a page of paper, a page of the Encyclopedia of Life can hold as much information as scientists can upload. “It’s going to have everything known on it, and everything new is going to be added as we go along,” said Edward O. Wilson, the Harvard biologist who spearheaded the Encyclopedia of Life and now serves as its honorary chairman.
Other experts not involved in the project hail it as tremendously promising. “I certainly think it is a great idea,” said Jody Hey, a biologist at Rutgers University.
Yet a number of researchers wonder if it will reach its final goal. The encyclopedia is not the first attempt to catalog every species on the planet, and previous efforts have failed. “I have seen 20 years of good ideas go nowhere,” said Daniel Brooks, a University of Toronto biologist.
Dr. Wilson has been involved with some of those failed attempts. But in the past few years major advances in databases have made the goal more realistic. Today biologists can consult databases that hold DNA sequences from hundreds of thousands of species, for example. There are also more detailed databases about groups of species, like mammals, fungi and parasites. In 2003, Dr. Wilson wrote a paper in which he called for all that information to be available in one place.
He and his colleagues then persuaded the John D. and Catherine T. MacArthur Foundation to contribute money to a consortium of universities, museums and scientific institutions. The Alfred P. Sloan Foundation and some of the partners are adding money as well. The encyclopedia will have a budget of about $50 million in its first five years.
When Dr. Wilson and his colleagues announced the start of the Encyclopedia of Life last May, their site was little more than a few mocked-up pages. Behind the scenes, designers at the Marine Biological Laboratory in Woods Hole, Mass., were busy building a system for getting scientific information online fast.
“If we had sat down at a blank screen and started to write, word by word, preparing the encyclopedia would have been virtually impossible,” said James Edwards, the project’s executive director.
The designers wrote software that could automatically draw information — maps, DNA sequences, bird songs, photographs, evolutionary trees, and so on — from many sources and organize them in one place in one standard format. Ten of the biggest natural history libraries in the world are scanning millions of pages of scientific literature, which computers are text-mining to add more information to species pages.
“The actual development has astonished me,” Dr. Wilson said. “I thought we’d be talking about it and pushing it for a long time.”
The version of the encyclopedia to be introduced Thursday is far from the finished product, Dr. Edwards warned. “It’s going to be rough,” he said. “We’re releasing early to get feedback from people.”
The 30,000 species in the first version will come mainly from databases of fish, amphibians and plants. Experts also created 24 detailed “exemplar” pages, to show just how much information the encyclopedia can handle. Those pages include well-studied species like the yellow fever mosquito, the eastern white pine and the death-cap mushroom.
The researchers wanted to make the site useful to scientists and nonscientists, so they created a sliding button that readers can move to choose how much detail they want. They are also developing ways of manipulating the information to make it useful in many ways.
“You’ll be able to download a personalized field guide,” Dr. Edwards said. “You can say, ‘I’m going to go to this preserve in Thailand — what do we know about what might be there?’ ”
Scientists, meanwhile, will be able to use the Encyclopedia of Life to do original research. One team of scientists is already planning to compare how different species grow old in order to understand the biology of aging.
Experts on biodiversity are generally excited about the site. “The Encyclopedia of Life is a fantastic and long overdue project,” said Quentin D. Wheeler, the director of the International Institute for Species Exploration at Arizona State University. But, he said, “my concern is about the content, and where the content will come from.”
The ranks of taxonomists — the scientists who describe species and revise old descriptions — have been shrinking steadily for decades.
“We have not given enough thought to the people who provide the information on which the Encyclopedia of Life is built,” Dr. Edwards acknowledged. “We are looking into ways to keep that community going.”
Dr. Wilson hopes the Encyclopedia of Life will foster the growth of that group. For the past 60 years, he has been studying ants, and in May he and other ant experts will be meeting at Harvard to plan how they can take advantage of the Encyclopedia of Life.
The goal he would like them to set would be to add all 14,000 known species of ants to the encyclopedia, and then add all the unknown ones — perhaps an additional 15,000 to 25,000 species. “It’s going to be a fun adventure for the next few decades,” Dr. Wilson said.
Free! Why $0.00 Is the Future of Business
At the age of 40, King Gillette was a frustrated inventor, a bitter anticapitalist, and a salesman of cork-lined bottle caps. It was 1895, and despite ideas, energy, and wealthy parents, he had little to show for his work. He blamed the evils of market competition. Indeed, the previous year he had published a book, The Human Drift, which argued that all industry should be taken over by a single corporation owned by the public and that millions of Americans should live in a giant city called Metropolis powered by Niagara Falls. His boss at the bottle cap company, meanwhile, had just one piece of advice: Invent something people use and throw away.
One day, while he was shaving with a straight razor that was so worn it could no longer be sharpened, the idea came to him. What if the blade could be made of a thin metal strip? Rather than spending time maintaining the blades, men could simply discard them when they became dull. A few years of metallurgy experimentation later, the disposable-blade safety razor was born. But it didn't take off immediately. In its first year, 1903, Gillette sold a total of 51 razors and 168 blades. Over the next two decades, he tried every marketing gimmick he could think of. He put his own face on the package, making him both legendary and, some people believed, fictional. He sold millions of razors to the Army at a steep discount, hoping the habits soldiers developed at war would carry over to peacetime. He sold razors in bulk to banks so they could give them away with new deposits ("shave and save" campaigns). Razors were bundled with everything from Wrigley's gum to packets of coffee, tea, spices, and marshmallows. The freebies helped to sell those products, but the tactic helped Gillette even more. By giving away the razors, which were useless by themselves, he was creating demand for disposable blades. A few billion blades later, this business model is now the foundation of entire industries: Give away the cell phone, sell the monthly plan; make the videogame console cheap and sell expensive games; install fancy coffeemakers in offices at no charge so you can sell managers expensive coffee sachets.
Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything "free" was really just the result of what economists would call a cross-subsidy: You'd get one thing free if you bought another, or you'd get a product free only if you paid for a service.
Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It's as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)
You know this freaky land of free as the Web. A decade and a half into the great online experiment, the last debates over free versus pay online are ending. In 2007 The New York Times went free; this year, so will much of The Wall Street Journal. (The remaining fee-based parts, new owner Rupert Murdoch announced, will be "really special ... and, sorry to tell you, probably more expensive." This calls to mind one version of Stewart Brand's original aphorism from 1984: "Information wants to be free. Information also wants to be expensive ... That tension will not go away.")
Scenario 1: Low-cost digital distribution will make the summer blockbuster free. Theaters will make their money from concessions — and by selling the premium moviegoing experience at a high price.
Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.
The rise of "freeconomics" is being driven by the underlying technologies that power the Web. Just as Moore's law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero.
But tell that to the poor CIO who just shelled out six figures to buy another rack of servers. Technology sure doesn't feel free when you're buying it by the gross. Yet if you look at it from the other side of the fat pipe, the economics change. That expensive bank of hard drives (fixed costs) can serve tens of thousands of users (marginal costs). The Web is all about scale, finding ways to attract the most users for centralized resources, spreading those costs over larger and larger audiences as the technology gets more and more capable. It's not about the cost of the equipment in the racks at the data center; it's about what that equipment can do. And every year, like some sort of magic clockwork, it does more and more for less and less, bringing the marginal costs of technology in the units that we individuals consume closer to zero.
As much as we complain about how expensive things are getting, we're surrounded by forces that are making them cheaper. Forty years ago, the principal nutritional problem in America was hunger; now it's obesity, for which we have the Green Revolution to thank. Forty years ago, charity was dominated by clothing drives for the poor. Now you can get a T-shirt for less than the price of a cup of coffee, thanks to China and global sourcing. So too for toys, gadgets, and commodities of every sort. Even cocaine has pretty much never been cheaper (globalization works in mysterious ways).
Digital technology benefits from these dynamics and from something else even more powerful: the 20th-century shift from Newtonian to quantum machines. We're still just beginning to exploit atomic-scale effects in revolutionary new materials — semiconductors (processing power), ferromagnetic compounds (storage), and fiber optics (bandwidth). In the arc of history, all three substances are still new, and we have a lot to learn about them. We are just a few decades into the discovery of a new world.
What does this mean for the notion of free? Well, just take one example. Last year, Yahoo announced that Yahoo Mail, its free webmail service, would provide unlimited storage. Just in case that wasn't totally clear, that's "unlimited" as in "infinite." So the market price of online storage, at least for email, has now fallen to zero (see "Webmail Windfall"). And the stunning thing is that nobody was surprised; many had assumed infinite free storage was already the case.
For good reason: It's now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned. Storage now joins bandwidth (YouTube: free) and processing power (Google: free) in the race to the bottom. Basic economics tells us that in a competitive market, price falls to the marginal cost. There's never been a more competitive market than the Internet, and every day the marginal cost of digital information comes closer to nothing.
One of the old jokes from the late-'90s bubble was that there are only two numbers on the Internet: infinity and zero. The first, at least as it applied to stock market valuations, proved false. But the second is alive and well. The Web has become the land of the free.
The result is that we now have not one but two trends driving the spread of free business models across the economy. The first is the extension of King Gillette's cross-subsidy to more and more industries. Technology is giving companies greater flexibility in how broadly they can define their markets, allowing them more freedom to give away products or services to one set of customers while selling to another set. Ryanair, for instance, has disrupted its industry by defining itself more as a full-service travel agency than a seller of airline seats (see "How Can Air Travel Be Free?").
The second trend is simply that anything that touches digital networks quickly feels the effect of falling costs. There's nothing new about technology's deflationary force, but what is new is the speed at which industries of all sorts are becoming digital businesses and thus able to exploit those economics. When Google turned advertising into a software application, a classic services business formerly based on human economics (things get more expensive each year) switched to software economics (things get cheaper). So, too, for everything from banking to gambling. The moment a company's primary expenses become things based in silicon, free becomes not just an option but the inevitable destination.
WASTE AND WASTE AGAIN
Forty years ago, Caltech professor Carver Mead identified the corollary to Moore's law of ever-increasing computing power. Every 18 months, Mead observed, the price of a transistor would halve. And so it did, going from tens of dollars in the 1960s to approximately 0.000001 cent today for each of the transistors in Intel's latest quad-core. This, Mead realized, meant that we should start to "waste" transistors.
Scenario 2: Ads on the subway? That's so 20th century. By sponsoring the whole line and making trips free, the local merchants association brings grateful commuters to neighborhood shops.
Waste is a dirty word, and that was especially true in the IT world of the 1970s. An entire generation of computer professionals had been taught that their job was to dole out expensive computer resources sparingly. In the glass-walled facilities of the mainframe era, these systems operators exercised their power by choosing whose programs should be allowed to run on the costly computing machines. Their role was to conserve transistors, and they not only decided what was worthy but also encouraged programmers to make the most economical use of their computer time. As a result, early developers devoted as much code as possible to running their core algorithms efficiently and gave little thought to user interface. This was the era of the command line, and the only conceivable reason someone might have wanted to use a computer at home was to organize recipe files. In fact, the world's first personal computer, a stylish kitchen appliance offered by Honeywell in 1969, came with integrated counter space.
And here was Mead, telling programmers to embrace waste. They scratched their heads — how do you waste computer power? It took Alan Kay, an engineer working at Xerox's Palo Alto Research Center, to show them. Rather than conserve transistors for core processing functions, he developed a computer concept — the Dynabook — that would frivolously deploy silicon to do silly things: draw icons, windows, pointers, and even animations on the screen. The purpose of this profligate eye candy? Ease of use for regular folks, including children. Kay's work on the graphical user interface became the inspiration for the Xerox Alto, and then the Apple Macintosh, which changed the world by opening computing to the rest of us. (We, in turn, found no shortage of things to do with it; tellingly, organizing recipes was not high on the list.)
Of course, computers were not free then, and they are not free today. But what Mead and Kay understood was that the transistors in them — the atomic units of computation — would become so numerous that on an individual basis, they'd be close enough to costless that they might as well be free. That meant software writers, liberated from worrying about scarce computational resources like memory and CPU cycles, could become more and more ambitious, focusing on higher-order functions such as user interfaces and new markets such as entertainment. And that meant software of broader appeal, which brought in more users, who in turn found even more uses for computers. Thanks to that wasteful throwing of transistors against the wall, the world was changed.
What's interesting is that transistors (or storage, or bandwidth) don't have to be completely free to invoke this effect. At a certain point, they're cheap enough to be safely disregarded. The Greek philosopher Zeno wrestled with this concept in a slightly different context. In Zeno's dichotomy paradox, you run toward a wall. As you run, you halve the distance to the wall, then halve it again, and so on. But if you continue to subdivide space forever, how can you ever actually reach the wall? (The answer is that you can't: Once you're within a few nanometers, atomic repulsion forces become too strong for you to get any closer.)
In economics, the parallel is this: If the unitary cost of technology ("per megabyte" or "per megabit per second" or "per thousand floating-point operations per second") is halving every 18 months, when does it come close enough to zero to say that you've arrived and can safely round down to nothing? The answer: almost always sooner than you think.
What Mead understood is that a psychological switch should flip as things head toward zero. Even though they may never become entirely free, as the price drops there is great advantage to be had in treating them as if they were free. Not too cheap to meter, as Atomic Energy Commission chief Lewis Strauss said in a different context, but too cheap to matter. Indeed, the history of technological innovation has been marked by people spotting such price and performance trends and getting ahead of them.
From the consumer's perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you're in an entirely different business, one of clawing and scratching for every customer. The psychology of "free" is powerful indeed, as any marketer will tell you.
This difference between cheap and free is what venture capitalist Josh Kopelman calls the "penny gap." People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that's the difference between a great market and none at all.
The huge psychological gap between "almost zero" and "zero" is why micropayments failed. It's why Google doesn't show up on your credit card. It's why modern Web companies don't charge their users anything. And it's why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.
Traditionalists wring their hands about the "vaporization of value" and "demonetization" of entire industries. The success of craigslist's free listings, for instance, has hurt the newspaper classified ad business. But that lost newspaper revenue is certainly not ending up in the craigslist coffers. In 2006, the site earned an estimated $40 million from the few things it charges for. That's about 12 percent of the $326 million by which classified ad revenue declined that year.
But free is not quite as simple — or as stupid — as it sounds. Just because products are free doesn't mean that someone, somewhere, isn't making huge gobs of money. Google is the prime example of this. The monetary benefits of craigslist are enormous as well, but they're distributed among its tens of thousands of users rather than funneled straight to Craig Newmark Inc. To follow the money, you have to shift from a basic view of a market as a matching of two parties — buyers and sellers — to a broader sense of an ecosystem with many parties, only some of which exchange cash.
The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. Sound complicated? You're probably experiencing it right now. It's the basis of virtually all media.
In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along. Radio is "free to air," and so is much of television. Likewise, newspaper and magazine publishers don't charge readers anything close to the actual cost of creating, printing, and distributing their products. They're not selling papers and magazines to readers, they're selling readers to advertisers. It's a three-way market.
In a sense, what the Web represents is the extension of the media business model to industries of all sorts. This is not simply the notion that advertising will pay for everything. There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, "value-added" subscriptions, and direct ecommerce (see wired.com/extras for a complete list). Now an entire ecosystem of Web companies is growing up around the same set of models.
A TAXONOMY OF FREE
Between new ways companies have found to subsidize products and the falling cost of doing business in a digital age, the opportunities to adopt a free business model of some sort have never been greater. But which one? And how many are there? Probably hundreds, but the priceless economy can be broken down into six broad categories:
What's free: Web software and services, some content. Free to whom: users of the basic version.
This term, coined by venture capitalist Fred Wilson, is the basis of the subscription model of media and is one of the most common Web business models. It can take a range of forms: varying tiers of content, from free to expensive, or a premium "pro" version of some site or software with more features than the free version (think Flickr and the $25-a-year Flickr Pro).
Again, this sounds familiar. Isn't it just the free sample model found everywhere from perfume counters to street corners? Yes, but with a pretty significant twist. The traditional free sample is the promotional candy bar handout or the diapers mailed to a new mother. Since these samples have real costs, the manufacturer gives away only a tiny quantity — hoping to hook consumers and stimulate demand for many more.
But for digital products, this ratio of free to paid is reversed. A typical online site follows the 1 Percent Rule — 1 percent of users support all the rest. In the freemium model, that means for every user who pays for the premium version of the site, 99 others get the basic free version. The reason this works is that the cost of serving the 99 percent is close enough to zero to call it nothing.
What's free: content, services, software, and more. Free to whom: everyone.
Broadcast commercials and print display ads have given way to a blizzard of new Web-based ad formats: Yahoo's pay-per-pageview banners, Google's pay-per-click text ads, Amazon's pay-per-transaction "affiliate ads," and site sponsorships were just the start. Then came the next wave: paid inclusion in search results, paid listing in information services, and lead generation, where a third party pays for the names of people interested in a certain subject. Now companies are trying everything from product placement (PayPerPost) to pay-per-connection on social networks like Facebook. All of these approaches are based on the principle that free offerings build audiences with distinct interests and expressed needs that advertisers will pay to reach.
What's free: any product that entices you to pay for something else. Free to whom: everyone willing to pay eventually, one way or another.
Scenario 3: It's a free second-gen Wiii! But only if you buy the deluxe version of Rock Band.
When Wal-Mart charges $15 for a new hit DVD, it's a loss leader. The company is offering the DVD below cost to lure you into the store, where it hopes to sell you a washing machine at a profit. Expensive wine subsidizes food in a restaurant, and the original "free lunch" was a gratis meal for anyone who ordered at least one beer in San Francisco saloons in the late 1800s. In any package of products and services, from banking to mobile calling plans, the price of each individual component is often determined by psychology, not cost. Your cell phone company may not make money on your monthly minutes — it keeps that fee low because it knows that's the first thing you look at when picking a carrier — but your monthly voicemail fee is pure profit.
On a busy corner in São Paulo, Brazil, street vendors pitch the latest "tecnobrega" CDs, including one by a hot band called Banda Calypso. Like CDs from most street vendors, these did not come from a record label. But neither are they illicit. They came directly from the band. Calypso distributes masters of its CDs and CD liner art to street vendor networks in towns it plans to tour, with full agreement that the vendors will copy the CDs, sell them, and keep all the money. That's OK, because selling discs isn't Calypso's main source of income. The band is really in the performance business — and business is good. Traveling from town to town this way, preceded by a wave of supercheap CDs, Calypso has filled its shows and paid for a private jet.
The vendors generate literal street cred in each town Calypso visits, and its omnipresence in the urban soundscape means that it gets huge crowds to its rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.
• Zero marginal cost
What's free: things that can be distributed without an appreciable cost to anyone. Free to whom: everyone.
This describes nothing so well as online music. Between digital reproduction and peer-to-peer distribution, the real cost of distributing music has truly hit bottom. This is a case where the product has become free because of sheer economic gravity, with or without a business model. That force is so powerful that laws, guilt trips, DRM, and every other barrier to piracy the labels can think of have failed. Some artists give away their music online as a way of marketing concerts, merchandise, licensing, and other paid fare. But others have simply accepted that, for them, music is not a moneymaking business. It's something they do for other reasons, from fun to creative expression. Which, of course, has always been true for most musicians anyway.
• Labor exchange
What's free: Web sites and services. Free to whom: all users, since the act of using these sites and services actually creates something of value.
You can get free porn if you solve a few captchas, those scrambled text boxes used to block bots. What you're actually doing is giving answers to a bot used by spammers to gain access to other sites — which is worth more to them than the bandwidth you'll consume browsing images. Likewise for rating stories on Digg, voting on Yahoo Answers, or using Google's 411 service (see "How Can Directory Assistance Be Free?"). In each case, the act of using the service creates something of value, either improving the service itself or creating information that can be useful somewhere else.
• Gift economy
What's free: the whole enchilada, be it open source software or user-generated content. Free to whom: everyone.
From Freecycle (free secondhand goods for anyone who will take them away) to Wikipedia, we are discovering that money isn't the only motivator. Altruism has always existed, but the Web gives it a platform where the actions of individuals can have global impact. In a sense, zero-cost distribution has turned sharing into an industry. In the monetary economy it all looks free — indeed, in the monetary economy it looks like unfair competition — but that says more about our shortsighted ways of measuring value than it does about the worth of what's created.
THE ECONOMICS OF ABUNDANCE
Enabled by the miracle of abundance, digital economics has turned traditional economics upside down. Read your college textbook and it's likely to define economics as "the social science of choice under scarcity." The entire field is built on studying trade-offs and how they're made. Milton Friedman himself reminded us time and time again that "there's no such thing as a free lunch.
"But Friedman was wrong in two ways. First, a free lunch doesn't necessarily mean the food is being given away or that you'll pay for it later — it could just mean someone else is picking up the tab. Second, in the digital realm, as we've seen, the main feedstocks of the information economy — storage, processing power, and bandwidth — are getting cheaper by the day. Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It's as if the restaurant suddenly didn't have to pay any food or labor costs for that lunch.
Surely economics has something to say about that?
It does. The word is externalities, a concept that holds that money is not the only scarcity in the world. Chief among the others are your time and respect, two factors that we've always known about but have only recently been able to measure properly. The "attention economy" and "reputation economy" are too fuzzy to merit an academic department, but there's something real at the heart of both. Thanks to Google, we now have a handy way to convert from reputation (PageRank) to attention (traffic) to money (ads). Anything you can consistently convert to cash is a form of currency itself, and Google plays the role of central banker for these new economies.
There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.
FREE CHANGES EVERYTHING
Between digital economics and the wholesale embrace of King's Gillette's experiment in price shifting, we are entering an era when free will be seen as the norm, not an anomaly. How big a deal is that? Well, consider this analogy: In 1954, at the dawn of nuclear power, Lewis Strauss, head of the Atomic Energy Commission, promised that we were entering an age when electricity would be "too cheap to meter." Needless to say, that didn't happen, mostly because the risks of nuclear energy hugely increased its costs. But what if he'd been right? What if electricity had in fact become virtually free?The answer is that everything electricity touched — which is to say just about everything — would have been transformed. Rather than balance electricity against other energy sources, we'd use electricity for as many things as we could — we'd waste it, in fact, because it would be too cheap to worry about.
All buildings would be electrically heated, never mind the thermal conversion rate. We'd all be driving electric cars (free electricity would be incentive enough to develop the efficient battery technology to store it). Massive desalination plants would turn seawater into all the freshwater anyone could want, irrigating vast inland swaths and turning deserts into fertile acres, many of them making biofuels as a cheaper store of energy than batteries. Relative to free electrons, fossil fuels would be seen as ludicrously expensive and dirty, and so carbon emissions would plummet. The phrase "global warming" would have never entered the language.
Today it's digital technologies, not electricity, that have become too cheap to meter. It took decades to shake off the assumption that computing was supposed to be rationed for the few, and we're only now starting to liberate bandwidth and storage from the same poverty of imagination. But a generation raised on the free Web is coming of age, and they will find entirely new ways to embrace waste, transforming the world in the process. Because free is what you want — and free, increasingly, is what you're going to get.
Chris Anderson (firstname.lastname@example.org) is the editor in chief of Wired and author of The Long Tail. His next book, FREE, will be published in 2009 by Hyperion.
Democratic Bill Could Force Apple, AT&T to Unlock iPhone
When T-Mobile began selling Apple's iPhone in Germany last fall, a legal skirmish ensued, forcing the wireless carrier to sell it untethered to a contract--at $1,460, no less. T-Mobile eventually persuaded a court that the two-year contract was legal.
Now that same kind of European rule would be imported into the United States--meaning AT&T would be legally required to sell a contract-free iPhone--if a new Democratic proposal in the U.S. House of Representatives becomes law.
Sponsored by Rep. Ed Markey (D-Mass.), a congressman who serves as chairman of a House telecommunications and Internet panel, it's similar to but somewhat more sweeping than a bill proposed in the Senate last year. His subcommittee has scheduled a hearing on the plan for Wednesday morning.
The draft legislation says every mobile provider "shall offer to consumers the opportunity to purchase subsidy-free wireless customer equipment."
The emergence of the 27-page draft bill (PDF), called the Wireless Consumer Protection and Community Broadband Empowerment Act, underscores what is apparently growing concern among congressional Democrats during this session with what they seem to view as insufficiently flexible, forthcoming dealings among wireless carriers and their customers.
Both bills would direct the Federal Communications Commission to establish a number of new rules for wireless carriers. Among other things, those companies would have to give abundant disclosure to their customers about their rate plans in a "clear, plain, and conspicuous manner," breaking out the cost of everything from early termination fees to state and local taxes for the customer.
Carriers would also be obligated to devise more detailed maps of their network coverage areas. And they'd have to permit customers to cancel a contract for any reason without penalty within the first 30 days and to prorate any fees associated with leaving a contract early.
Unlike the Senate bill, Markey's proposal would also dictate that wireless carriers offer customers the choice of buying a wireless service plan with no early termination fee.
Wireless carriers say they charge early termination fees because they've subsidized the cost of the wireless handset used with it, but Markey's draft bill would also require them to offer consumers the ability to buy "subsidy-free" equipment without a long-term service plan--and at the same price as comparable service for a plan with subsidized equipment.
That's where the potential implications for the iPhone and similar devices come in. Right now, signing up for iPhone service is a two-year commitment on top of the price of the gadget itself. But, assuming that AT&T subsidizes at least some of the cost of the phone--one estimate says the subsidy is around $400--Markey's bill would apparently force AT&T to sell it at an unsubsidized price and for a contract length of the customer's choosing.
To be sure, such an option may not even be in some consumers' best financial interests. iPhone unlocking has become a popular pastime, with thousands of consumers buying them without pledging allegiance to AT&T in the first place. But Markey's bill, in the interest of consumer protection, would force carriers to offer such a choice anyway.
The wireless industry has long been lobbying for a uniform set of rules governing its operations from the federal level, complaining that states have imposed a patchwork of obligations for billing and other practices that don't mesh well with the national nature of wireless service. But if its less-than-enthusiastic reaction to the Senate bill is any indication, the House's prescriptive approach likely isn't what it had in mind.
A lobbyist for CTIA-The Wireless Association, which represents the major wireless carriers, is scheduled to speak about the bill at a hearing Wednesday, but the organization declined to speak further about the proposal beforehand.
"Generally, we're looking forward to the hearing and the opportunity to talk about the many consumer benefits that accompany a uniform set of standards for wireless policy in America," CTIA spokesman Joe Farren said Tuesday.
The wireless industry is likely to point out some of the steps it has already undertaken in the absence of regulations in an apparent effort to be more consumer-friendly. Most of the major carriers have announced plans to prorate the early termination fees for their contracts, for instance.
Markey's proposal doesn't stop at wireless issues. It also includes a section that would reserve the right of municipalities to offer their own broadband services--a trend that has encountered mixed success thus far. The bill says such networks "serve the public interest" and that states should not be allowed to make laws thwarting their creation.
Passing federal legislation to promote such offerings isn't new. The idea grew out of attempts by state legislatures, often pressured by major Internet service providers like Verizon and Comcast, to enact laws restricting city governments from getting into the same game. But so far, despite support in both chambers of Congress, no such measure has been made into law yet.
A group of major trade associations representing telephone companies both large and small said in a Tuesday letter to Markey that they're concerned his proposal will create "unintended consequences" that undermine his stated goal of getting affordable broadband to more places.
"We still believe federal municipal broadband legislation would chill private investment in existing and future broadband networks," wrote the association executives. "This ultimately leads to less, not more, broadband deployment as the investment risk for private entities is unnecessarily increased and private capital is displaced with public funds, needlessly burdening taxpayers."
'Beautiful Children' is Latest Novel Offered Free Online
Charles Bock's "Beautiful Children, a best-selling debut novel about characters adrift in Las Vegas, is the latest book to be offered for free online.
Starting Wednesday, Bock's novel can be downloaded from the Web site www.beautifulchildren.net/read. The free electronic edition will also be available from such leading retailers as Amazon.com. and Barnes & Noble.com.
"I want people to read the book," Bock said in a statement issued Tuesday by the Random House Publishing Group. "If that means giving it away for free online, great."
"The book really struck a chord with readers as bookstore sales have demonstrated," Avideh Bashirrad, deputy director of marketing for Random House, said in a statement. "We believe it has even more potential readers out there, and the best way to reach them is online, with this unrestricted access."
Publishers have worried about Internet piracy and whether online text could hurt traditional sales. But lately the trend has been to make more books available on the Internet and hope that interest in all formats will be increased.
HarperCollins recently announced that books by Paulo Coelho, Neil Gaiman and a handful of others would be posted online (although not for printing or downloading). In mid-February, financial advice writer Suze Orman said on Oprah Winfrey's television show that "Women &
Money," published in 2007, could be downloaded from Winfrey's Web site over a period of 33 hours. More than 1 million copies of the book were downloaded and the paper edition jumped into the top 10 on Amazon.com.
"We're willing to sacrifice a few sales in the expectation that a wider sampling opportunity will build consumer awareness and more business for our booksellers and our authors," said Stuart Applebaum, spokesman for Random House, Inc., which publishes both Orman and Bock.
"Historically, book publishers have relied on sampling and giveaways. Previously, we've had printouts of first chapters or sections of a book available. This takes the sample to a larger and more technologically sophisticated form."
The Wisdom of the Chaperones
Digg, Wikipedia, and the myth of Web 2.0 democracy.
It's getting harder to be a Wikipedia-hater. The user-generated and -edited online encyclopedia—which doesn't even require contributors to register—somehow holds its own against the Encyclopedia Britannica in accuracy, a Nature study concluded, and has many times more entries. But even though people are catching up to the idea that Wikipedia is a force for good, there are still huge misconceptions about what makes the encyclopedia tick. While Wikipedia does show the creative potential of online communities, it's a mistake to assume the site owes its success to the wisdom of the online crowd.
Social-media sites like Wikipedia and Digg are celebrated as shining examples of Web democracy, places built by millions of Web users who all act as writers, editors, and voters. In reality, a small number of people are running the show. According to researchers in Palo Alto, 1 percent of Wikipedia users are responsible for about half of the site's edits. The site also deploys bots—supervised by a special caste of devoted users—that help standardize format, prevent vandalism, and root out folks who flood the site with obscenities. This is not the wisdom of the crowd. This is the wisdom of the chaperones.
The same undemocratic underpinnings of Web 2.0 are on display at Digg.com. Digg is a social-bookmarking hub where people submit stories and rate others' submissions; the most popular links gravitate to the site's front page. The site's founders have never hidden that they use a "secret sauce"—a confidential algorithm that's tweaked regularly—to determine which submissions make it to the front page. Historically, this algorithm appears to have favored the site's most active participants. Last year, the top 100 Diggers submitted 44 percent of the site's top stories. In 2006, they were responsible for 56 percent.
It's hard to avoid the conclusion that Digg—a site meant to "collectively determine the value of content"—is largely run by 100 people. The influence of these members was particularly apparent last month. After Digg tweaked its secret sauce, top contributors noticed a decline in influence—fewer of their submissions became top stories. The super Diggers published an open letter of grievances and threatened to boycott the site. The changes in the algorithm, the Digg execs said, were meant to bring a more diverse set of stories to the site, and they begged for patience from the top Digg contributors. (Thus far, a shaky truce has endured.) The takeaway: Digg's brass believe that the site, which purports to be the product of a broad-based community, will cease to run smoothly if a microscopic percentage of its user base stops participating.
At both Digg and Wikipedia, small groups of users have outsized authority. In the case of Wikipedia, this authority is both organic and institutionalized. A small segment of highly active users author the majority of the site's content; there are also elected site administrators who have the power to protect pages, block the IP addresses of problem users, and otherwise regulate Wikipedia's operations. At Digg, active users have more of a de facto authority over the site's goings-on (though there are persistent rumors that the site has "secret moderators" who delete content). But officially speaking, while the site's algorithm seems to favor devoted users, no individual Digger has the power to unilaterally delete a post.
While both sites effectively function as oligarchies, they are still democratic in one important sense. Digg and Wikipedia's elite users aren't chosen by a corporate board of directors or by divine right. They're the people who participate the most. Despite the fairy tales about the participatory culture of Web 2.0, direct democracy isn't feasible at the scale on which these sites operate. Still, it's curious to note that these sites seem to have the hierarchical structure of the old-guard institutions they've sought to supplant.
This top-heavy structure of social-media sites isn't news to researchers and technophiles. Wikipedia co-founder Jimmy Wales has acknowledged that what he expected to be an "80-20" rule—a system where 20 percent of people control 80 percent of the resources—in fact understates the site's top-heaviness. Palo Alto Research Center's Ed Chi, the scientist who determined that 1 percent of Wikipedians author half of the content, told me he originally hypothesized that the site's most energetic editors were acting as custodians. Chi guessed that these users mostly cleaned up after the people who provided the bulk of the encyclopedia's facts. In reality, he found the opposite was true. People who've made more than 10,000 edits add nearly twice as many words to Wikipedia as they delete. By contrast, those who've made fewer than 100 edits are the only group that deletes more words than it adds. A small number of people are writing the articles, it seems, while less-frequent users are given the tasks of error correction and typo fixing.
This isn't the kind of people-working-together image that Digg and Wikipedia promote. Of course, Wikipedia requires some level of administration—otherwise, the site would crash under the weight of additions and deletions to the George W. Bush page. But that doesn't explain the kind of territorialism—the authorial domination by 1 percent of contributors—on the site's pages. Is this a necessary artifact of operating an open-access site? Or is it possible to build a clearinghouse for high-quality, user-generated content without giving too much power to elite users and secret sauces?
The moderation system at the tech blog Slashdot is perhaps the best example on the Web of a middle way. Slashdot, which draws on links submitted by readers, ordains active contributors with limited power to regulate comments and contributions from other users. Compared with Wikipedia, which requires supreme devotion from its smaller core of administrators, Slashdot makes it easy to become a moderator. Giving large numbers of people small chunks of responsibility has proven effective in eliminating trolls and flame wars in the comment section. Still, the authority any one moderator commands is small, and the site's official poobahs maintain control over which stories are featured at the top of the site. "These things are far from utopian," says founder Rob Malda, aka CmdrTaco. "Slashdot tends to have a lot of 'Microsoft does something bad' stories. If I let the community run the whole thing, we'd have a lot more. But I don't want Slashdot to be the 'Microsoft Sucks' page. It's just one of many subjects."
Another compelling model comes from Helium.com, a Wikipedia-like repository of articles and editorials. Its founder, Silicon Valley veteran Mark Ranalli, compares his site to a capitalist version of Wikipedia. On Helium, contributors compete to have the top-ranked article on a given subject. As soon as you write an article, you're invited to pick your favorite of two articles on a similar subject. Requiring someone to write before he or she rates creates a more stable system: Rather than create a caste of creators and a caste of peons, Helium encourages everyone to do everything.
Every model has its drawbacks. Unlike Wikipedia, Helium doesn't lend itself to comprehensive articles drawing on many sources. Nor is Slashdot free of moron commenters, though its quotient is significantly lower than on any unmoderated message board. It's refreshing, though, that these sites acknowledge that Web 2.0 isn't a fairy-tale democracy without letting themselves become dictatorships. Digg and Wikipedia would do well to stop pretending they're operated by the many and start thinking of ways to rein in the power of the few.
I Need a Virtual Break. No, Really.
I TOOK a real day off this weekend: computers shut down, cellphone left in my work bag, land-line ringer off. I was fully disconnected for 24 hours.
The reason for this change was a natural and predictable back-breaking straw. Flying home from Europe a few months ago, I swiped a credit card through the slot of the in-seat phone, checked my e-mail and robbed myself of one of my two last sanctuaries.
At that point, the only other place I could escape was in my sleep. Yet I had developed the habit of leaving a laptop next to my bed so I could check my e-mail, last thing and first thing. I had learned how to turn my P.D.A. into a modem, the better to access the Web from my laptop when on a train. Of course I also used that P.D.A. in conventional ways, attending to it when it buzzed me.
In short, my name is Mark, and I’m a techno-addict. But after my airplane experience, I decided to do something about it. Thus began my “secular Sabbath” — a term I found floating around on blogs — a day a week where I would be free of screens, bells and beeps. An old-fashioned day not only of rest but of relief.
Like many, though, I wondered whether breaking my habit would be entirely beneficial. I worried about the colleagues, friends, daughters, parents and so on who relied on me, the people who knew that whether I was home or away I would get back to them, if not instantly then certainly before the end of the day. What if something important was happening, something that couldn’t wait 24 hours?
Or was I just one of those Americans who’ve developed the latest in American problems, Internet addiction disorder?
As a baby boomer, I knew mine was no unique thought; we’ve always been part of some trend or other. And sure enough, as soon as I started looking I found others who felt the need to turn off, to take a stab at reconnecting to things real rather than virtual, a moderate but carefully observed vacation from ubiquitous marketing and the awesome burden of staying in touch.
Nor is this surprising, said David Levy, a professor in the information school at the University of Washington. “What’s going on now is insane,” he said, assuring me that he used the term intentionally. “Living a good life requires a kind of balance, a bit of quiet. There are questions about the limits of the brain and the body, and there are parallels here to the environmental movement.” (Dr. Levy coined the term “information environmentalism.”)
“Who,” he then asked, “would say you don’t need time to think, to reflect, to be successful and productive?”
THIS movement to unplug appears to be gaining traction everywhere, from the blogosphere, where wired types like Ariel Meadow Stallings (http://electrolicious.com/unplugged) brag about turning off the screen one day a week (and how many books they’ve read so far this year), to the corporate world.
For example, Nathan Zeldes, a principal engineer at Intel (employees there read or send three million e-mail messages daily), is running a couple of experiments, one in which people spend a morning a week at work but offline, another in which people consciously reduce their e-mail output. Though he’s not reporting results, he’s encouraged and he says people are participating.
“Even many corporate leaders now believe you need time to hear the voice of the new inside,” said Anne Dilenschneider, a spirituality consultant in Montara, Calif., a coastal town 17 miles south of San Francisco. “And this time need not be a day, or even a specific period, activity or lack of one. It doesn’t necessarily mean a Zen sit, just some time of solitude.”
Even without a Zen sit (enough to scare me away from anything) or a phrase like “the voice of the new,” I found that the secular Sabbath was not all that easy to maintain. Something as simple as turning off the electronics is easy, but try to make a habit of it.
On my first weekend last fall, I eagerly shut it all down on Friday night, then went to bed to read. (I chose Saturday because my rules include no television, and I had to watch the Giants on Sunday). I woke up nervous, eager for my laptop. That forbidden, I reached for the phone. No, not that either. Send a text message? No. I quickly realized that I was feeling the same way I do when the electricity goes out and, finding one appliance nonfunctional, I go immediately to the next. I was jumpy, twitchy, uneven.
I managed. I read the whole paper, without hyperlinks. I tried to let myself do nothing, which led to a long, MP3-free walk, a nap and some more reading, an actual novel. I drank herb tea (caffeine was not helpful) and stared out the window. I tried to allow myself to be less purposeful, not to care what was piling up in my personal cyberspace, and not to think about how busy I was going to be the next morning. I cooked, then went to bed, and read some more.
GRADUALLY, over this and the next couple of weekends — one of which stretched from Friday night until Monday morning, like the old days — I adapted.
But recidivism quickly followed; there were important things to do — deadlines, urgent communications. You know how it is. I called Andrea Bauer, an executive and career development coach in San Carlos, Calif. She assured me that, oddly enough, it takes work to stop working. “It takes different formats for different people, and you have to build up to it; you can’t run five miles if you’ve never run at all.” Increasingly, I realized that there is more to the secular Sabbath than an impulse, or even a day off from e-mail. And there are reasons that nonsecular Sabbaths — the holy days of Christians, Jews and Muslims — have rules that require discipline. Even for the nonreligious, those rules were once imposed: You need not be elderly to remember when we had no choice but to reduce activity on Sundays; stores and offices — even restaurants — were closed, there were certainly no electronics, and we were largely occupied by ourselves or our families.
Now it’s up to us, and, as Dr. Levy says, there’s little encouragement. “One of the problems with needing to slow down is that within the climate of our primary culture it sounds wishy-washy,” he said.
But what’s wishy-washy about taking time off? It didn’t seem to me that I had to collect Social Security before I realized that a 70-hour week was nearly as productive as an 80-hour one, and if I couldn’t get it all done in either, it certainly wasn’t because I was taking too much time off.
I went back to nonwork, diligently following my rules to do less one day a week. The walks, naps and reading became routine, and all as enjoyable as they were before I had to force myself into doing them. It’s been more than six months, and while I’m hardly a new man — no one has yet called me mellow — this achievement is unlike any other in my life. And nothing bad has happened while I’ve been offline; the e-mail and phone messages, RSS feeds, are all there waiting for me when I return to them.
I would no more make a new-agey call to find inner peace than I would encourage a return to the mimeograph. But I do believe that there has to be a way to regularly impose some thoughtfulness, or at least calm, into modern life — or at least my version. Once I moved beyond the fear of being unavailable and what it might cost me, I experienced what, if I wasn’t such a skeptic, I would call a lightness of being. I felt connected to myself rather than my computer. I had time to think, and distance from normal demands. I got to stop.
|27-02-08, 11:31 AM||#2|
Join Date: May 2001
Location: New England
Spammers Crack Gmail Captcha
Fresh fruit for rotting vegetables
Spammers, fresh from the success of cracking the Windows Live captcha used by Hotmail, have broken the equivalent system at Gmail.
Internet security firm Websense reports that miscreants have created bots which are capable of signing up and creating random Gmail accounts for spamming purposes, defeating Captcha-based defences in the process. It reckons the same group of spammers are behind both attacks.
Captcha (Completely Automated Public Turing test to tell Computers and Humans Apart) challenge-response systems, which are used to prevent accounts being created until a user correctly identifies letters in an image, are designed to ensure requests are made by a human rather than an automated program. The technique has been used to defeat automatic sign-ups to email accounts by services including Yahoo! Mail and Gmail for years, and hackers are increasingly successful in defeating the approach. For example, the HotLan Trojan has created more than 500,000 spam email accounts with Hotmail, Yahoo! and Gmail since its arrival back in July 2007.
Websense reckons the latest Gmail Captcha hack is the most sophisticated it has seen to date. Unlike Live Mail Captcha breaking, which involved just one zombie host doing the entire job, the Gmail breaking process involves two compromised hosts. Each of the two compromised hosts applies a slightly different technique to analysing Captcha, as explained in a posting by Websense.
Even using the two techniques, only one in every five Captcha-breaking requests are successful. It's a fairly low percentage, but one that's still more than workable in the case of automated attacks.
It sounds like a lot of effort, but gaining a working Gmail account has a number of advantages for spammers. As well as gaining access to Google's services in general, spammers gain a address whose domain is highly unlikely to be blacklisted, helping them defeat one aspect of anti-spam defences. Gmail also has the benefit of being free to use.
A wide range of Captcha-breaking services are hosted on a domain located in the US, Websense reports. The page includes a support page and payment advice along with an internal test page.
Teenage Hacker Is Blind, Brash and in the Crosshairs of the FBI
At 4 in the morning of May 1, 2005, deputies from the El Paso County Sheriff's Office converged on the suburban Colorado Springs home of Richard Gasper, a TSA screener at the local Colorado Springs Municipal Airport. They were expecting to find a desperate, suicidal gunman holding Gasper and his daughter hostage.
"I will shoot," the gravely voice had warned, in a phone call to police minutes earlier. "I'm not afraid. I will shoot, and then I will kill myself, because I don't care."
"I will shoot." Listen to the Colorado Springs hostage hoax.
But instead of a gunman, it was Gasper himself who stepped into the glare of police floodlights. Deputies ordered Gasper's hands up and held him for 90 minutes while searching the house. They found no armed intruder, no hostages bound in duct tape. Just Gasper's 18-year-old daughter and his baffled parents.
A federal Joint Terrorism Task Force would later conclude that Gasper had been the victim of a new type of nasty hoax, called "swatting," that was spreading across the United States. Pranksters were phoning police with fake murders and hostage crises, spoofing their caller IDs so the calls appear to be coming from inside the target's home. The result: police SWAT teams rolling to the scene, sometimes bursting into homes, guns drawn.
Now the FBI thinks it has identified the culprit in the Colorado swatting as a 17-year-old East Boston phone phreak known as "Li'l Hacker." Because he's underage, Wired.com is not reporting Li'l Hacker's last name. His first name is Matthew, and he poses a unique challenge to the federal justice system, because he is blind from birth.
If he's guilty, the attack is at once the least sophisticated and most malicious of a string of capers linked to Matt, who stumbled into the lingering remains of the decades-old subculture of phone phreaking when he was 14, and quickly rose to become one of the most skilled active phreakers alive.
"Who's the best out there?" says Jeff Daniels, a veteran phone hacker and an admitted mentor to Matt. "The little blind kid is one of the best. And that's a fact."
Innocent at first, Matt's worst instincts surfaced after he fell in with a gang of telephone ruffians -- men as old as 40 -- who eventually fingered the teenager when they were swept up in an FBI crackdown on swatters late last year. The government says the gang launched swatting attacks in over 60 cities, leaving hundreds of victims and chalking up over $250,000 in losses.
Interviews by Wired.com with Matt and his associates, and a review of court documents, FBI reports and audio recordings, paints a picture of a young man with an uncanny talent for quick telephone con jobs. Able to commit vast amounts of information to memory instantly, Matt has mastered the intricacies of telephone switching systems, while developing an innate understanding of human psychology and organization culture -- knowledge that he uses to manipulate his patsies and torment his foes.
The holes he's exploiting are in large part the same ones a previous generation of phreaks relied on. He's running variations of the same old scams. Daniels notices this as well. "He is nasty as the day is long because he knows a few tricks from the old days," he says.
It's as though the phone companies -- which enjoy notoriously close relations with the feds -- are so adept at getting their hackers arrested that they're little motivated to spend money securing their sprawling infrastructures. If malicious phone phreaks were the only threat to telecom customers, that might be a sound strategy. But as the pretexting scandals of 2006 showed, the same vulnerabilities make things easy for snoops and criminals of all stripes, and a report released this week tallying identity theft complaints ranks AT&T and Sprint customers as the second and third most victimized, respectively.
(Disclosure: The author is a one-time phone phreak.)
Matt appeared on the phone phreaking scene in late 2004, when a neighbor gave him the number of a telephone party line called the Boston Raven. Party lines are privately run telephone-conferencing facilities where people from around the country dial in and socialize, forming friendships, romances and, at times, bitter enemies.
While similar to online, text-based chat rooms, the party lines are actually an echo of a much older phenomenon that began in the early 1980s with home-brew phone conferences boasting anywhere from two to eight call-in lines. Today's computerized party lines offer virtually limitless capacity, and include features like multiple "rooms" for different groups to congregate.
Like those early conferences, modern party lines are also home to a small cohort of phone phreaks -- hackers who specialize in telephone systems. It's a subculture that immediately appealed to Matt.
"I've been interested in phones since I've been about 8," says Matt, who lives with his single mother, and older brother and younger sister in an East Boston apartment. "I talked to technicians when they came down here to do things on my phone."
Blind hackers were a part of the first generation of phone phreaks in the 1970s, and it's easy to see the draw. On the phone, Matt's handicap is irrelevant, and his gifts -- which include his ironclad memory, and vocal skills that can mimic a much older man, or masquerade as a woman -- make him an impresario. A party line denizen called "Lotus" remembers the first time he encountered Matt at a Boston conference. "He was sitting in the room beat-boxing. And I was like, who's playing the drums in here? And it was just Li'l Hacker."
Matt started asking questions about phone phreaking, learning a little. The party lines are a gladiator school of mischief, and Matt began challenging experienced phone hackers with the obscenity-laced bravado of a teenage boy feeling power for the first time.
"We're enemies at this time," says Daniels, a 36-year-old Alabama man who runs one of the party lines. "And he's telling me in this little 12-year-old sounding voice what he's going to do to me." He laughs. After Matt lost a phone war with Daniels, the elder phone phreak became Matt's closest friend and mentor, schooling him in the ins-and-outs of the phone system.
Perhaps grateful to have a worthy protégé to receive his knowledge, Daniels didn't give much thought to how Matt would use it. "I don't sit down and say, 'Hey Matt, I'm going to teach you how to infiltrate such-and-such,'" Daniels says. "The conversation starts with a discussion about how equipment operates."
Matt says he ordered phone company switch manuals off the internet and paid to have them translated into Braille. He became a regular caller to internal telephone company lines, where he'd masquerade as an employee to perform tricks like tracing telephone calls, getting free phone features, obtaining confidential customer information and disconnecting his rivals' phones.
It was, relatively speaking, mild stuff. The teen though, soon fell in with a bad crowd. The party lines were dominated by a gang of half-a-dozen miscreants who informally called themselves the "Wrecking Crew" and "The Cavalry." The group was led by a 40-year-old Cleveland ex-con named Stuart Rosoff, a.k.a. "Michael Knight," and Guadalupe Santana Martinez, Jr., a.k.a., "Wicked Wizard."
The gang specialized in serving up trouble to people who defied them on the party lines. Their most common tactic was swatting. Using a commercial caller ID spoofing service called SpoofCard, they'd call police departments around the country with false alarms, triggering tense confrontations between armed cops and the victims, at least two of whom have suffered injuries.
Matt's phone friends -- some of whom had being trying to get Rosoff and his associates arrested for years -- cautioned Matt to steer clear of the group. But the teen was cocky and arrogant, and was swept in by Rosoff's goading, even coming to believe he was invulnerable to prosecution. "They told him things like, 'You don't have to worry about this, you're a blind kid, you're a minor,'" says Lotus. "They would feed this kid this bullshit, and eventually he'd start to believe it."
That's when Danielle Gasper, then 18, met "Hacker Matt" on a party line in late April 2005.
Though Danielle doubted his claim that he was only 15, and blind (she thought he could be as old as 20), Hacker Matt seemed like a nice guy, she later told investigators. But as she spoke with him twice a day for about a week, he became less nice, and started pressing her for phone sex.
Their relationship soured for good when the family phone rang at 3 a.m. on May 1 of that year, a few hours before Richard Gasper was scheduled to start his shift as a screener at the Colorado Springs Municipal Airport. Hacker Matt asked for Danielle, who was asleep in the other room. "I want to have phone sex with her," the caller told Gasper.
Gasper called the man a pervert and hung up, perhaps thinking that ended the matter. But Hacker Matt was persistent. "What's the matter?" Gasper asked on the next call. "Can't you get sex from a real woman?" On the fourth call, the caller threatened to "knock the dimple off" Danielle's chin and to "blow up the fucking airport with (Gasper) in it."
Minutes after the Gaspers hung up on Hacker Matt for the fifth time, the phone rang at the Colorado Springs Police Department. A recording of the call was obtained by Wired.com.
"Now listen here," the caller growled. "I've got two people here held hostage, all right? Now you know what happens to people that are held hostage. It's not like on the movies or nothing, all right? You understand that?"
"OK," the female dispatcher replied calmly.
"One them here's name is Danielle, and her father."
Identifying himself as John Defanno, the caller claimed to be armed with a .22 caliber handgun, and said the hostages were duct-taped, and the father injured. "Defanno" warned dispatchers not to send armed police into the house. "I will shoot," he said. In an effective touch, he seemed to address someone in the room "Shut up!" he barked.
The Sheriffs Office responded quickly. They called Gasper's number, and Gasper told them about the phone calls and the bomb threat. But they didn't believe him. Shortly after 4 a.m., deputy sheriffs showed up at his house, ostensibly to take a report. When Gasper stepped outside to meet them, he was taken into custody while police stormed the house. His daughter and his parents were inside, but, of course, there was no gunman.
The next day, Gasper's phone was mysteriously forwarded to the FBI's office in Washington DC.
In the aftermath of the swatting, Karl Mai, a deputy sheriff detailed to the FBI's Joint Terrorism Task Force in Colorado Springs, started looking for Hacker Matt. Adam Panagia, the head of AT&T's fraud division, passed on a tip from an informant that Li'l Hacker had been heard bragging about the Gasper swatting. But the investigation petered out after two months.
In two phone interviews with Wired.com, Matt was evasive and taciturn. He spouted angrily about the crimes committed by other party liners, particularly Rosoff and Martinez, but declined to answer questions about his own activities. He denies making any swatting calls.
But Daniels says Matt, particularly in his younger days, was capable of unleashing hell on his perceived enemies. "You don't have a clue," says Daniels. "He was a raving lunatic ... He could decide he doesn't like you, and he could make your life a living hell, and there's nothing you could do about it."
"I give that guy props, but in some respects he's not smart enough for his own IQ," says Jered Morgan, a phone phreak known as Lucky225.
Unlike Rosoff and the others, though, Matt seemed to develop some restraint as he grew more skilled. Instead of sending police out to people's houses, or phoning Child Protective Services with false abuse reports, Matt spent more of his time calling internal phone company numbers and flexing his growing access to phone company systems.
According to the government, between August and October 2006 Matt logged more than 50 pretext phone calls to Verizon's provisioning center in Irving, Texas. He also told party liners that he could eavesdrop on calls on Verizon's network with the help of a credulous employee.
Verizon admits to suffering some breaches, but emphasizes that it was purely indirect. "No one has literally accessed a Verizon computer, but there has been social engineering taking place," says Verizon spokesman William Kula.
To hack AT&T, Matt boldly adopted the identity of a real phone company security agent named William Jones. In a series of undated recordings obtained by Wired.com, Matt is heard repeatedly phoning AT&T's internal help desk to get workers to disconnect the phone of Kenneth McComas, a party line rival who lives in Ohio.
"We're looking at a fraud account," he said in one call, affecting a confident baritone. "We're just gonna have to take that out of there." While the worker processed the order, Matt kept him engaged in jocular small talk thick with camaraderie.
His enthusiasm sometimes chaffed other hackers. At one point, Matt allegedly hacked into a Verizon recorded-announcement system that tells callers when a number has been disconnected or changed. Other hackers were exploiting the system for more subtle pranks, until Matt stomped over the recordings with his own voice. "If you called any number that was not in service, you would hear him say some weird shit," says Teli Brown, a former phone hacker known as "Gray Area." "It was funny, but it ruined it."
By then, Matt's reputation had taken on a life of its own, and tales of some of his hacks -- perhaps apocryphal -- are now legends. According to Daniels, he hacked his school's PBX so that every phone would ring at once. Another time, he took control of a hotel elevator, sending it up and down over and over again. One story has it that Matt phoned a telephone company frame room worker at home in the middle of the night, and persuaded him to get out of bed and return to work to disconnect someone's phone.
To Matt's family, the teen's interest in telephony seemed harmless. His 18-year-old brother would read him articles on hacking, according to Lotus. And while Matt was on the party lines, his mother, Amy Kahloul, could sometimes be heard in the background playfully imitating his frequent pose as an AT&T technician.
"I think that she has concerns," says a Boston phone phreak who was Matt's only real-life friend from the party lines. "She's like, 'Don't get yourself into trouble.' But I know that she also respects Matt's interest. She knows that it makes him happy, and she's proud of how much Matt's learned." (Kahloul could not be reached for comment, and the family's lawyer did not return repeated phone calls).
The Boston phone phreak, who spoke on condition of anonymity for fear of FBI attention, is the only party liner to meet Matt in person. In the summer of 2006, he showed up at Matt's home to intercede in a brewing confrontation between Matt and another Boston party liner.
The visitor chatted with Matt's family for a few minutes, before meeting Matt, a heavyset kid with a shaved head. The visit was a rare incursion into Matt's real life from the phone world, and Matt was shaking with nervousness. "I showed up unexpected, and he didn't know what was going on when I rang the bell," says the phone phreak. "But after a few minutes he calmed down."
On another day, the Boston phone phreak met up with Matt at an East Boston plaza while Matt's mother was shopping. Often brusque and abusive on the party lines, "in person, he's a very friendly guy," the phone phreak says. "Easy to get along with and have a conversation with." The friends hacked on a pay phone for an hour-and-a-half.
But the Boston phone phreak eventually distanced himself as Matt became more involved with Stuart Rosoff and the other swatters -- a relationship characterized by posturing and mutual harassment.
"Stuart E. Rosoff is going get on his knees and suck my pole, dude," Matt taunted one day, in a recorded party line conversation. "He cut my phone off three times today ... But I got it back on, three times."
"You won't get it back on any more," Rosoff responded, incorrectly.
Matt's roughhousing with the swatters alarmed his party line friends, who'd become protective of the sharp-tongued teen. When Rosoff began harassing Matt's mother, another phone phreak sent $800 to help the family move. Their new location didn't stay a secret for long, though. "He moved, literally, right around the block," says Lotus. "He had his phone all rigged so it was showing different locations, and they still tracked him down. They started to harass him again and sucked him back in."
But time was running out for the swatters. They'd gotten away with their harassment in large part because each individual swatting call was considered a minor, local offense -- a misdemeanor in some jurisdictions. No law enforcement agency had ever stitched them all together.
Then, on Oct. 1, 2006, Martinez staged a swatting attack against Stephanie Proulx, a female party line participant in Fort Worth, Texas. When police arrived, expecting to find a shooting in progress, a detective on the scene realized he'd already been to the apartment on an earlier false emergency call. He interviewed Proulx, who told him all about Rosoff, Martinez and other members of the gang. Martinez had even swatted her father in Cleburne, Texas. The detective called in the FBI.
Special agent Allyn Lynd, from the FBI's nine-person Dallas cyber-crime squad, began an investigation. A West Point graduate and a veteran of the Global Hell defacement gang prosecutions of the late 1990s, Lynd phoned up corporate security officers at Verizon and AT&T, who had been tracking the party liners for years.
Verizon sent Lynd their file on Li'l Hacker, complete with call logs showing Matt phoning a variety of internal Verizon offices, including RCMAC, an office responsible for entering commands directly into telephone switches. AT&T security agent Gary Beaulieu had a hotter tip: He told Lynd about Rosoff, who at that very moment was serving time for telephone harassment in a county jail in Cleveland.
Lynd booked a flight to Ohio. Before he left he ran a check through the FBI's computers for incidents similar to the Proulx case. He found the 2005 Colorado Springs case linked to "Hacker Matt," and contacted Karl Mai to see if he had any questions for Rosoff. Mai had a request, according to a task force report on the case. "Any information developed as to the real identity of Hacker Matt would be helpful."
On Nov. 21, 2006, Lynd and a partner interviewed Rosoff in jail. The details of the conversation are hard to come by, but court records indicate that on that day, Lynd obtained a new confidential informant. The informant provided ample details about the swatting incidents, naming Martinez, a New York man named Chad Ward, and Jason Trowbridge, a bill collector who'd used his access to a consumer database to get information on the gang's targets. The anonymous informant, Lynd admitted in an affidavit, "has been accused by members of the party lines as being engaged in telephone harassment."
The informant also gave Lynd something the FBI had been looking for since 2005: the real name of Little Hacker.
Two weeks later, the FBI held the first of several meetings with Matt in the East Boston apartment, while his worried mother looked on. The teenager proved to be a fount of information on Rosoff's and Martinez's actions, but he became evasive when the feds asked him about his own hacking. "They asked, hey, are you able to drop in on lines?" Matt recalls. "And I told them, I'd rather not talk about things like that."
Lynd began grooming Matt as a confidential informant, a path that would make it easy to let the teen emerge relatively unscathed from the looming swatting prosecutions. But the phone companies Matt so effortlessly manipulated were less forgiving of the blind teenager. AT&T investigator Gary Beaulieu began monitoring the phone numbers Matt called.
When Beaulieu saw Matt dial into a party line just a few days after the hacker made a deal with the FBI, the phone cop called in to listen. He heard another phone phreak describe a new way to forward somebody's phone without their knowledge using a particular AT&T facility. Matt's phone was soon seen calling the AT&T number.
Beaulieu passed the information onto Lynd, and Matt was in hot water again. Prosecutor Linda Groves called Matt's attorney, and warned that if Matt continued to hack the phone companies, he'd lose his status as a protected informant.
Matt agreed to record some phone calls with Rosoff's crew for the FBI, and in January he turned over four cassette tapes filled with calls. But he didn't stop hacking. By February, the FBI had formally revoked his status as a confidential informant, and began planning for his indictment. Lynd told Mai that Matt couldn't stop hacking for more than 72 hours.
Daniels agrees, but says his protégé can't help himself. His entire world is on the telephone.
"Instead of looking at him as some malicious kid who's out to do no good, maybe you should look at him as a 17-year-old blind kid with an addiction," says Daniels. "Maybe the adults should think about that."
The federal government has gone after juveniles in only a handful of computer crime cases. In the first one, in 1997, a hacker named "Jester" phoned into an unprotected Bell Atlantic (now Verizon) dialup and crashed a subscriber loop carrier system, killing phone service for Rutland, Massachusetts for six hours. He was sentenced to two years probation and 250 hours of community service.
In 2000, a 16-year-old Miami youth became the first juvenile to go to jail on federal computer crime charges, when he was sentenced to six months for hacking NASA. In 2005, a Boston phone hacker, who made a bomb threat against a Florida school, was sentenced to 11 months detention. In the most recent case, a teenage bot herder called "SoBe" pleaded guilty in February, and faces 12 to 18 months in jail.
Complicating matters in Matt's case is that there's no federal law against pretext phone calls. So in court filings in related cases, the feds have invented a novel legal theory just for the blind hacker. Matt, they argue, violated the Computer Fraud and Abuse Act by persuading phone company workers to access their computers on his behalf. He hacked by proxy, using his voice instead of a computer.
Prosecutors may not be eager to test that theory in court, though, and going after minors can be complicated. Former Dallas cyber-crime prosecutor Matthew Yarbrough, who worked with Lynd on the Global Hell prosecutions, says it's usually not worth the trouble. "Those 20 guys in Global Hell, I only ended up prosecuting three or four of them because most of them were minors," says Yarbrough. "I remember looking back and thinking this was just too much a pain to do this."
When the swatter indictments came in last June, Matt was spared. FBI agents in 11 cities swept in on the swatters and their associates, arresting five of them: Rosoff, Martinez, Ward, Trowbridge, and Trowbridge's girlfriend, Angela Robberson. All five have since pleaded guilty, and are scheduled for sentencing in March. All but Robberson are in custody. All of the swatters named Matt as a co-conspirator in their plea agreements, claiming he'd used his access to the phone companies to get information on swatting victims.
Rosoff agreed to cooperate against his associates. In exchange, Dallas assistant U.S. attorney Linda Groves, who declined to comment on the case to Wired.com, persuaded a Michigan prosecutor not to go after Rosoff for one of the nastier phone attacks -- a false report Rosoff allegedly made against a female party line user in which he claimed that she was abusing her child. Groves also promised to recommend a sentence below federal guidelines if Rosoff's cooperation was found to constitute "substantial assistance" to the government.
Matt was re-interviewed, but not charged. But the indictments didn't end the FBI's investigation. In the wake of the arrests, party liners in California, New York and Omaha, Nebraska. contacted Lynd to complain that they were being harassed by unindicted members of the conspiracy, who were pressuring them to stop providing information to the FBI, according to an October 2007, affidavit by Lynd.
The phone companies were also still on the case. Referring to Matt by his initials, because of his underage status, Lynd wrote, "I was contacted multiple times by employees of both AT&T and Verizon and was told that the illegal activity was continuing and was now being orchestrated by M.W. and other unindicted co-conspirators."
Then the FBI agent caught a remarkable break. In October, Lynd was tipped off that somebody was still using Chad Ward's SpoofCard account. He checked in with the company that runs the caller ID spoofing service, and learned that SpoofCard offers a special option: With the press of a touch-tone button, users can have SpoofCard record their spoofed calls. The recordings stay on SpoofCard's servers for retrieval.
Ward and the other swatters had used that option. Over the next two weeks, Lynd obtained recordings from 17 SpoofCard accounts in three search warrants. One warrant alone, targeting nine accounts, produced recordings of 98 calls, including two swatting attacks, countless harassing phone calls, a false report to Child Protective Services and a series of extortion threats. Court records don't indicate who was on the recordings.
With the recordings in hand, the FBI is preparing for another round of indictments. For his part, Matt denies trying to hush up any witnesses. "There's a lot of gossip about it, the investigation," Matt says. "A lot of gossip about when people are getting out of jail -- a lot of he-said, she-said. Nobody has to worry about me doing anything to anybody out there."
Matt's friends say he's the one who's worried. But he's also not stopping. Several phone phreaks and party liners told Wired.com that Matt is still on the party lines daily, openly bragging about his ongoing social engineering successes against the phone companies. He's also popping up on private, unpublished conference bridges, where phone hackers run their exploits live on three-way. If recent history is a guide, AT&T's security agents are also on the line, listening in.
Matt will turn 18 on April 7, and many expect him to be picked up by the FBI before the candles have gone out on his birthday cake. In truth, though, turning 18 doesn't affect Matt's federal exposure for actions committed as a minor.
But if Matt celebrates his birthday by disconnecting a party liner's phone, or wheedling someone's Social Security number out of a Verizon representative, or forwarding someone's line to the FBI's number in Washington … Then all bets are off. Nobody interviewed for this story believes that Li'l Hacker will stop. And he's not fooling anyone by using the pay phone down the street.
"One of the reasons he's so effective ... is because that's all he does," says Daniels, the veteran phone phreak. "All he knows is what he knows. He's completely consumed with telephone party lines all the day, all the time. It's depressing, but at the same time he has become quite a force."
"He doesn't understand what it took a long time for me to learn," Daniels adds. "Everything you think is another world is really the same old world."
FCC Hearing: Comcast Uses Hacker Techniques
Today is an important day for network neutrality, as the FCC’s Broadband Network management hearing has been discussing Comcast’s attempt to slow down BitTorrent traffic. One of the panelists said Comcast uses “hacker techniques” to manage their network.
When we first reported that Comcast was actively disconnecting BitTorrent seeds, we never expected that it would lead to a FCC hearing, but it did. Let’s hope it’s for the better.
The second half of today’s hearing started with a number of network and technological experts telling us about the Internet, its history, and its makeup. Of main contention was the line between acceptable, and unacceptable traffic management.
Wise things were said, and the panelists made some good points about the unfairness of the traffic management tools that Comcast uses. There was emphasis on the TCP reset, which means that a few seconds after you connect to someone in a BitTorrent swarm, a peer reset message (RST flag) is sent by Comcast and the upload immediately stops.
Richard Bennett (co-inventor of the twisted-pair system for ethernet, and its protocol, 1BASE5) targeted those opposed to any sort of traffic management in his opening statement saying, “if we can’t control network management, we’ll have to shut down the internet”. David Clark, of the MIT computer science lab, opened by saying that ISPs can either see enemies, or they can see partners, and suggesting that right now, they see the former. He, like almost all the panelists, called the current usage of Sandvine technology ‘troubling’, and said that the user should pick the Quality of Service (QoS) level, not an ISP.
Daniel Weitzner, Director of the Massachusetts Institute of Technology Decentralized Information Group summed up bad traffic management with: “Maybe it’s a bit like the old adage about pornography ‘I know it when I see it’. In this case I know what Comcast is doing is in the camp of unreasonable. These are techniques that hackers would use to deny service to any application on the web, very similar in that regard. It might be interesting to hold a panel of security experts to talk about those kind of mechanisms, I’m certainly not one. But, forging data on the internet is probably outside of the realm of reasonable, and any standards body would deem it to be.”
However, one of the most succinct criticisms of Comcast’s actions came from Prof. David Reed, of MIT’s Media Lab, who suggested that any ISP that didn’t follow the standard solutions evolved over the last 30 years should not advertise themselves as an Internet provider, but instead as a company “offering selective access to portions of the net only”, a description many of Comcast’s customers will probably agree with.
The FCC questioner continued the panel discussion, and pointed out that one of the problems might be that there is no actual data on how busy the network was, something that, from his point of view, would be helpful in determining whether the TCP resets are a unreasonable form of network management or not.
One of the panelists (sorry, they all sound the same) immediately replied to this by pointing out that congestion was not important. He compared the TCP reset to a conversation between two people where a third party - who pretends to be one of the persons engaged in the conversation - says “Stop, this conversation is over”. He added: “I find it uncomfortable that someone in the middle is creating a message to you that appears to come from me, I have a lot of trouble with that.”
At the beginning of the hearing FCC chairman Kevin Martin said that they were willing to step in if needed. Let’s hope they will. Feel free to file a comment if you want to let the FCC know what you think of Comcast’s haxxor skills. A video of the hearing will be available within two days.
F.C.C. to Act on Delaying of Broadband Traffic
The head of the Federal Communications Commission and other senior officials said on Monday that they were considering taking steps to discourage cable and telephone companies from discriminating against content providers as the broadband companies go about managing heavy Internet traffic that they say is clogging their networks.
The agency is considering new rules and enforcement decisions that would force the cable and telephone companies to more clearly disclose to consumers the circumstances in which they might delay some traffic. Comcast recently disclosed that the heavy use of video sharing applications has forced them to slow down some broadband traffic. Consumer groups have replied that such packet discrimination is both unnecessary and potentially threatens to undermine the freewheeling nature of the Internet.
“They must be conducted in an open and transparent way,” said Kevin J. Martin, chairman of the Federal Communications Commission, at a hearing on network neutrality and network management here Monday. “While networks may have reasonable practices, they obviously cannot operate without taking some reasonable steps but that does not mean they can arbitrarily block access to certain services.”
Michael J. Copps, a Democratic commissioner, said that until recently, the cable companies had been decided “in a black box that the American public could not peek into.” He expressed alarm that any cable companies might be degrading or slowing down network traffic.
“The time has come for a specific enforceable principle of nondiscrimination at the F.C.C.,” Mr. Copps said. “Our job is to figure out where you draw the line between unreasonable discrimination and reasonable network management.”
The hearing comes as the commission has been called to resolve a growing number of disputes between broadband providers and file-sharing companies over consumers using peer-to-peer protocol to upload larger video files. Cable companies say that the growing use by consumers of the Internet to get large video files is beginning to clog their networks.
But consumer groups say that efforts to manage the traffic may result in the cable companies favoring one content provider or file-sharing company over another. Comcast has recently acknowledged that it has delayed Internet traffic of BitTorrent, a file sharing service that makes it easier for consumers to upload video files.
The Commission has been considering complaints made by Vuze, BitTorent and several consumer groups that Comcast has violated a policy statement issued by the commission in 2005 that permits Internet service providers to engage in “reasonable network management.” The term has become a focal point in the revived debate over what is called network neutrality.
At the hearing, Gilles BianRosa, chief executive of Vuze, attacked Comcast’s decision to slow down Internet traffic. The company is a leading provider of high quality video to computer users, and has had more than 20 million downloads of its application.
He said the problem is that “the network operator is our competitor.”
“We compete with Comcast with delivery of content over the Internet,” Mr. BianRosa said. "What we have here is a horse race and in this contest, Comcast owns the race track, in fact, the only track in town. They also own a horse. We are being told they are only slowing down our horse by a few seconds.”
He said that Vuze has been waging a “cat and mouse” game with Comcast in an effort to find ways around Comcast’s decision to slow down broadband to heavy users of his service.
“We agree that network operators should be able to employ reasonable measures to manage their networks. We are against network management with no boundaries. It threatens the openness and freedom of the Internet.”
The hearing is being held all day Monday in the Ames courtroom at Harvard Law School, near the congressional district of Representative Edward J. Markey, a Democrat who as the head of a House telecommunications subcommittee recently introduced legislation intended to prevent cable and telephone companies from discriminating in the way they control broadband traffic. (The school is also the alma mater of Kevin J. Martin, the chairman of the commission.)
The legislation faces significant political obstacles and is unlikely to be adopted this year. But the debate over it has set off a fierce lobbying war.
In his written testimony, David L. Cohen, an executive vice president of Comcast, told the commissioners that the growing popularity of peer-to-peer applications was straining the network.
“Independent research has shown that it takes as few as 15 active BitTorrent users uploading content in a particular geographic area to create congestion sufficient to degrade the experience of the hundreds of other users in that area,” Mr. Cohen said. “Bandwidth-intensive activities not only degrade other less-intense uses, but also significantly interfere with thousands of Internet companies’ businesses.”
“Far from managing our network in a discriminatory way to benefit our own offerings — other than managing our network to make our high-speed Internet service faster and better — our limited network management practices ensure that everyone else’s applications and services, even those that may compete with our services and use P2P protocols, work,” Mr. Cohen said.
But Mr. Markey expressed concerns about Comcast’s practice, warning of “the transformation of BitTorrent into bit trickle.”
Network Neutrality: How the FCC Sees it (Part 1 of 2)
The mere announcement of an FCC hearing on "broadband network management practices" was a notch in the gun of network neutrality advocates. The achievement was reinforced by the line-up at Harvard University's law school today. The Comcasts and Verizons were outnumbered and outmaneuvered by the left wing of the network neutrality movement, which included such leading lights as Yochai Benkler, David P. Reed, and the honorary host of the event, Representative Edward Markey, who heads the House's Subcommittee on Telecommunications and the Internet.
Yet to a large extent, the panelists and speakers were like petitioners who are denied access to the king and can only bring their complaints to the gardeners who decorate the paths outside his gate. I believe that the FCC commissioners see distinct limits to what they can accomplish, and that their compromise will come out much closer to the current practices of the Comcasts and Verizons than to the more idealistic calls for an Internet that we should have had seven or eight years ago.
I feel a natural pull toward network neutrality, which I knew for many years in slightly different versions and different terms (common carriage, the layered protocol stack, the end-to-end principle, the stupid network) before the current buzzword emerged. But I soon realized that the subject was a thornbush from which it is hard to untangle a solution, and wrote a major analysis two years ago that I really think still stands as an accurate representation of the issues.
But where do industries, the public, and the government stand today? That's what I'll explain in this article. I'll drill down tomorrow in another article about some interesting details at the hearing.
Format of the event
Today's hearing was the first event in a stated policy by the FCC to get "outside the Beltway" and go before citizenry around the country. If bringing the FCC to us contributes less of a carbon footprint than bringing us to the FCC, I'm all for it, but I personally didn't get much more of thrill than when I saw a live webcast of the Senate's network neutrality hearings two years ago.
Still, I appreciate the commissioners' willingness to appear before an audience of hundreds, and I thank them along with the Harvard Law School and Markey's office for organizing this event. With my praise echoing in your ears, I have to note three missteps I think the organizers made.
The first was to hold the hearing in Harvard Law School's Ames auditorium instead of the FleetCenter sports arena, which would have been more suited to the size of the crowd as well as the emotional mood of the attendees.
The second misstep was to change the date at the last moment, which made it hard for people such as me (who arranged my schedule around the event) to attend the whole thing.
The third was the format. As I mentioned at the start, the line-up was slanted toward network neutrality advocates. It made me suspect that this public hearing was a sop to these idealists, and a counter-balance to the actual policy that the FCC will adopt.
But the line-up at any hearing is always a stunted representation of the range of creative ideas on a topic, just as presidential campaigns are. Benkler, for instance, has tremendous vision and gave a stunningly eloquent presentation of his view of the Internet's future, but he still represents just one branch of a very bushy movement that I'll categorize a bit later.
The Free Press (who also had a panelist) set up a studio in the Law School to take testimony from any and all comers. The results will no doubt be a YouTube of network neutrality. I'm sure there is much in the recordings that is insightful, heartfelt, and stimulating, but the gems will be hard to pick out and organize coherently. Isn't it time to use available technology to organize public input in some rational way that's more diverse and representative than hand-picked panelists but more useful than a barrel of impetuous commentary?
Broadband network management practices--the subject of today's hearings--have an impact far beyond the number of bits in the network mask used to route IP packets. Issues on which the hearings focused today included:
• The "four freedoms" of telecommunications, inspired by Richard M. Stallman's four software freedoms and enunciated by none other than Michael Powell, the chair who redirected the FCC along its current free-market path. Powell's freedoms are the right (within the limits of the law) to access any content of your choice, to use any applications of your choice, to attach any devices of your choice, and to understand the parameters of the network service you receive.
• The future of innovation in Internet applications, services, and protocols.
• The attainment of bandwidth that is ten or a hundred times the current standards, an increase we need for today's Internet applications and that are being achieved in several other developed nations.
• Open content, which can promote democracy and provide alternatives to an ever more concentrated mainstream media. In this regard, it is not irrelevant that the FCC has permitted far greater cross-ownership in the media than before, and that the NAACP organized a protest about the decreasing racial diversity of mainstream media at today's hearing. (On the other hand, Verizon is a corporate sponsor of the NAACP. You make your alliances where you have to.)
Within the parameters suggested by Powell's four freedoms (not to mention the 1996 Telecom Act), three different points of view have emerged in the network neutrality debate.
The large Internet providers, limited in the money they are willing or able to spend to increase bandwidth, want leeway to control traffic toward two ends: to balance out current bandwidth, and to generate extra revenue that they claim they will spend to add bandwidth.
Balancing out current bandwidth is the less noxious goal, and one companies would probably try to apply lightly in order to keep all customers as happy as possible. Comcast's infamous restrictions on peer-to-peer traffic, which many critics claim to be a monopolistic blow against video downloads that compete with Comcast's cable offerings, are probably an outlier case.
But such traffic shaping still has the unintended consequence of introducing distortions into the choices made by those who offer or consume network services. As law professor Timothy Wu pointed out on one of today's panels, investors would be reluctant to fund innovative Internet companies if their services could be choked off unexpectedly.
Generating extra revenue is even more alarming, because here the vendors are playing favorites. There is also no guarantee that they would actually use the money they skim off the top to fund higher bandwidth. (Why would they?)
On the other side of the debate, observers have actually gone beyond network neutrality. It is now seen as a stop-gap at best, and more often a distraction from the real goal of increased competition.
Some advocates want to nationalize the physical network or build out new networks with government funding; some want to leave the network in its current hands but strip the incumbent companies of all their higher-level services so they have no incentive to discriminate. And yet others want to amend interconnection rules and beef up enforcement of rules against discrimination so that new competitors arise naturally.
As I said before, this competitive, high-speed Internet is what we should have had seven or eight years ago, and I'll explore that in tomorrow's article.
But what we'll end up getting is the third stance, which FCC commissioner Michael J. Copps described in his opening comments: a formal endorsement of non-discrimination as a policy that Internet providers must follow, leading to continual FCC review of current practices by telecom and cable companies in order to build up, over time, a collection of case law that can ensure fair access without altering the basic ownership of the physical network.
Benkler argued strenuously against this continual fussing and fixing, but after years of actions in favor of the incumbent operators, the FCC can't do much more.
This is the essential message I took away today about the current state of Internet policy and the relative positions of the major players. To some extent, the rest is all rhetoric, but I'll go into that tomorrow.
House Bill Would Create Voluntary Seal of Approval for Internet Service Providers
ISPs Unlikely to Sign Up, Says XMission Founder
Utah Internet Service Providers could receive a seal of approval from the state Department of Commerce if they meet certain conditions, under a bill approved today by the House Government Operations Committee. The question is, would any providers be interested in signing up? The sponsor, Republican Representative Michael Morley from Spanish Fork, says the bill allows ISPs to show the public where they stand on pornography.
"Basically, it's a voluntary program for ISPs who are willing to say that they will not host pornography," he said. "It allows consumers to look at those kinds of products, when they're looking for an ISP, to support those who are making a statement that they're not willing to support pornography."
But that's not all providers would have to do to receive the seal of approval. They would also have to agree to turn over the records of users who have used their services for illegal activity to law enforcement. The bill would also fine participating ISPs $10,000 for violating the terms of the seal, although receiving the seal is voluntary to begin with.
XMission founder Pete Ashdown says he wouldn't sign up for this seal of approval.
"It would mandate that I hand over information about my customers without a court order to law enforcement, just on mere suspicion, and I still believe in the Fourth Amendment in this country," he said.
Ashdown also says in order to earn the seal of approval, he'd have to log more information about his customers, although the bill doesn't provide any means for him to do so. The XMission founder believes legislation likes this makes Utahns look ignorant about technology. XMission is a KCPW underwriter.
Net Filter at Test Phase
THE federal Government's plan to have internet service providers filter pornography and other internet content deemed inappropriate for children is going full-steam ahead.
Trials are to be conducted soon in a closed environment in Tasmania.
Today is the deadline for expressions of interest to Enex TestLab, the Melbourne company evaluating internet service provider content filters on behalf of the Australian Communications and Media Authority.
ISP-based filters will block inappropriate web pages at service provider level and automatically relay a clean feed to households.
To be exempted, users will have to individually contact their ISPs.
The trial will evaluate ISP-level internet content filters in a controlled environment while filtering content inappropriate for children, Enex said.
"We invite vendors of all types (hardware appliances, software - proprietary or open-source) of ISP-based internet content filters to participate.
"Vendors will be involved in the installation and configuration of their filters to ensure their correct deployment," Enex said in a newspaper advertisement.
The testing is slated for completion by July and will be followed by live field trials.
Enex was selected more than six months after ACMA closed a tender for an organisation to test ISP-based content filters.
"The contract has been let. It will be completed by June 30, as we originally planned," Communications Minister Stephen Conroy said at a Senate Estimates hearing last week.
"We have indicated that there will be a field test to follow."
The tender was awarded to Enex on January 16, ACMA spokesman Donald Robertson said.
The tender closed in July and evaluation was conducted late last year, but ACMA decided not to let the tender until after the federal election caretaker period, Mr Robertson said.
Privacy advocates have long argued that ISP-based filters are too onerous and web users should be free to choose what they want to access online.
They also say several measures, including PC-based filters, would be more effective in protecting children online.
The internet sector has consistently voiced concern about the Government's ISP filters.
Internet Industry Association chief executive Peter Coroneos has said any clean feed policy would have to be balanced against the likely financial and performance costs, and ACMA's first annual report to Senator Conroy confirmed his fears.
On the performance impact of filters, ACMA said: "In the case of personal computers the cost of upgrading processing power may be modest (although significant in terms of household income).
"However, for ISPs the cost of upgrading or augmenting the expensive hardware that they typically deploy may be substantial, particularly for small providers."
The report, released last week, also conceded that Web 2.0 technology poses the greatest threat to the younger generation.
"The risks to Australian youth are primarily those associated with Web 2.0 services - potential contact by sexual predators, cyber-bullying by peers and misuse of personal information," ACMA said.
The rise in popularity of social networking websites such as Facebook and MySpace, coupled with a dive in the use of email, has made it difficult to filter content.
"Filters are currently unable to sift the content of communication between users using instant messaging or chat services," ACMA said.
The agency concluded that education was the most effective way of addressing risks associated with illegal contact online.
How Dangerous Is the Internet for Children?
A few years ago, a parenting magazine asked me to write an article about the dangers that children face when they go online. As it turns out, I was the wrong author for the article they had in mind.
The editor was deeply disappointed by my initial draft. Its chief message was this: “Sure, there are dangers. But they’re hugely overhyped by the media. The tales of pedophiles luring children out of their homes are like plane crashes: they happen extremely rarely, but when they do, they make headlines everywhere. The Internet is just another facet of socialization for the new generation; as always, common sense and a level head are the best safeguards.”
My editor, however, was looking for something more sensational. He asked, for example, if I could dig up an opening anecdote about, say, an eight-year-old getting killed by a chat-room stalker. But after days of research—and yes, I actually looked at the Google results past the first page—I could not find a single example of a preteen getting abducted and murdered by an Internet predator.
So the editor sent me the contact information for several parents of young children with Internet horror stories, and suggested that I interview them. One woman, for example, told me that she became hysterical when her eight-year-old stumbled onto a pornographic photo. She told me that she literally dove for the computer, crashing over a chair, yanking out the power cord and then rushing her daughter outside.
You know what? I think that far more damage was done to that child by her mother’s reaction than by the dirty picture.
See, almost the same thing happened at our house. When my son was 7 years old, he was Googling “The Incredibles” on the computer that we keep in the kitchen. At some point, he pulled up a doctored picture of the Incredibles family, showing them naked.
“What…on… earth?” he said in surprise.
I walked over, saw what was going on, and closed the window. “Yeah, I know,” I told him. “Some people like pictures of naked people. The Internet is full of all kinds of things.” And life went on.
My thinking was this: a seven-year-old is so far from puberty, naked pictures don’t yet have any of the baggage that we adults associate with them. Sex has no meaning yet; the concept produces no emotional charge one way or another.
Today, not only is my son utterly unscarred by the event, I’m quite sure he has no memory of it whatsoever.
Now, I realize that not everybody shares my nonchalance. And again, it’s not hard to find scattered anecdotes about terrible things that happen online.
But if you live in terror of what the Internet will do to your children, I encourage you to watch this excellent hour long PBS “Frontline” documentary. (I learned about it in a recent column by Times media critic Virginia Heffernan).
It’s free, and it’s online in its entirety. The show surveys the current kids-online situation—thoroughly, open-mindedly and frankly.
Turns out I had it relatively easy writing about the dangers to children under age 12; this documentary focuses on teenagers, 90 percent of whom are online every single day. They are absolutely immersed in chat, Facebook, MySpace and the rest of the Web; it’s part of their ordinary social fabric to an extent that previous generations can’t even imagine.
The show carefully examines each danger of the Net. And as presented by the show, the sexual-predator thing is way, way overblown, just as I had suspected. Several interesting interview transcripts accompany the show online; the one with producer Rachel Dretzin goes like this:
“One of the biggest surprises in making this film was the discovery that the threat of online predators is misunderstood and overblown. The data shows that giving out personal information over the Internet makes absolutely no difference when it comes to a child's vulnerability to predation.” (That one blew my mind, because every single Internet-safety Web site and pamphlet hammers repeatedly on this point: never, ever give out your personal information online.)
“Also, the vast majority of kids who do end up having contact with a stranger they meet over the Internet are seeking out that contact,” Ms. Dretzin goes on. “Most importantly, all the kids we met, without exception, told us the same thing: They would never dream of meeting someone in person they'd met online.”
Several teenagers interviewed in the story make it clear that only an idiot would be lured unwittingly into a relationship with an online sicko: “If someone asks me where I live, I’ll delete the ‘friend.’ I mean, why do you want to know where I live at?” says one girl.
Fearmongers often cite the statistic, from a 2005 study by the Crimes Against Children Research Center, that 1 in 7 children have received sexual propositions while online. But David Finkelhor, author of that report, notes that many of these propositions don’t come from Internet predators at all. “Considerable numbers of them are undoubtedly coming from other kids, or just people who are acting weird online,” he says.
“Most of the sexual solicitations, they’re not that big a deal,” says another interview subject, Danah Boyd of Harvard’s Berkman Center for Internet and Society. “Most of it is the 19-year-old saying to the 17-year old, ‘Hey, baby.’ Is that really the image that we come to when we think about sexual solicitations? No. We have found kids who engage in risky behavior online. The fact is, they’ve engaged in a lot more risky behavior offline.”
As my own children approach middle school, my own fears align with the documentary’s findings in another way: that cyber-bullying is a far more realistic threat. Kids online experiment with different personas, and can be a lot nastier in the anonymous atmosphere of the Internet than they would ever be in person (just like grown-ups). And their mockery can be far more painful when it’s public, permanent and written than if they were just muttered in passing in the hallway.
In any case, watch the show. You’ll learn that some fears are overplayed, others are underplayed, and above all, that the Internet plays a huge part in adolescence now. Pining for simpler times is a waste of time; like it or not, this particular genie is out of the bottle.
My Wired Youth
Last month, a PBS documentary called “Growing Up Online” revealed that kids today create false Internet identities, contend with cyberbullies and visit Web sites that promote anorexia. To my surprise, I felt defensive: the scare phrase “growing up online” recalled nothing so much as my own shady adolescence 25 years ago, when, because of a quirk of early communications technology, a small group of New Hampshire girls, including me, came of age on a primitive computer network — the Internet before the Internet.
The way things worked out, Internet addiction nearly laid me to waste. At 11, I pretended I was 18 and tried to pass off Raquel Welch’s measurements as my own, having copied them from TV Guide. For years, I dated, studied, endured heartbreak and hazing and crossed and double-crossed everyone in a mysterious online netherworld called Xcaliber. By the time I turned 13, I was confident I knew every single person online. Xcaliber taught me to type, talk to adults, experiment with fantastic personas and new idioms, spot lechers by their online styles and avoid ideologues who post in all caps.
Xcaliber was early social-networking technology developed at Dartmouth College. In the heyday of Dungeons & Dragons, its vaguely Arthurian theme appealed to both hackers and preadolescents. But Xcaliber was actually intended as a convenience for the several academic and scientific institutions who shared Dartmouth’s mainframe computer — one of those big, heaving rhinos in a cage of bulletproof plexiglass. Every day a few hundred people dialed that mainframe for an alien signal — the then-unfamiliar squeal and crash of information transmission — and fit their receivers into acoustic couplers, like people in kayaks.
Having thereby turned “dumb terminals” into extremely slow personal computers, real mathematicians probably worked on impossible theorems using machine code. The rest of us did nothing but admire the many figures in pi and practice programming in Basic, the computer language invented by two local professors.
But on a fateful day in 1979, my friend Megan and I met some sysprogs: Dartmouth’s student system programmers, surprisingly cute hippie guys who developed the complex time-sharing system. One of them slipped us a password to Conference XYZ, a live-chat option on the network.
I remember that day by the keystrokes: joi xyz. Between the years 1979 and 1984, I typed that string thousands of times. The joi was short for “join” — commands could only be three letters long — and xyz was the name of the so-called “conference.” Conference XYZ amplified Xcaliber’s fantasy element: each convocation had levels and a self-anointed master who could banish chatters he disliked. Participants often communicated in an odd Led Zeppelin idiom or referred to damsels and steeds.
I assumed the ludicrous screen name Athena (my favorite sysprog called himself Apollo), while Megan’s handle was cooler: the doors. We then consorted — first with the sysprogs and each other, then with Dartmouth students, then with twisted weirdos, merchant marines and college students up and down the East Coast. We evolved a whole cutesy shtick that, in this text-only interface, chiefly meant giving up mixed cases. In the name of enhancing adorableness, we stuck to little letters and as few spaces as English semantics could bear. Our classic squinched-up opener was “hi-howre you?”
At 13, Megan and I introduced our friends to the conference, and as early adapters she and I felt obliged to play the pros and make the whole thing look ungeeky. When someone on the network asked me what I was up to, I replied — without fail — “music, sports and parties,” which was true, strictly speaking, though the parties were still make-your-own-sundae sleepovers, no boys allowed.
The result was attention, sweet nothings and mostly intimate or cerebral conversations — often about loneliness, the central preoccupation of people who stay up late and are drawn to anonymous forms of communication. Things rarely got more intense than “I’d really love to kiss you,” and when the conversations turned openly sexy, I’d beat it, a reaction echoed by the kids featured in “Growing Up Online,” who brag (as we used to) that they can always spot the creeps in their midst.
Which brings me to what nonplayers don’t get about online social-networking: it’s much less a walk on life’s wild side than it is a game like backgammon or — that ’70s favorite — Stratego. Successfully “playing the computer,” as we used to call it, requires a set of skills: social intuition, inventive self-presentation, speedy and clever writing, discretion, intricate etiquette, self-protection. Eventually you get a little finesse: you stop saying you’re 18, and you snub people who ask for measurements. You pride yourself on being able to find cool people, avoid jerks and not make dumb mistakes like disclosing too much, opening spam, talking to impostors and replying to all instead of to sender.
The best part of Conference XYZ was talking about adult stuff — etymology and lacrosse and Ronald Reagan — instead of being dismissed as too young. The worst part was the head games: the people who pretended they weren’t who they were and tried to make you say, “I’d love to kiss you,” so they could make fun of you. Your prowess as a player lay largely in how infrequently you were fooled, but everyone got fooled sometimes.
In 1983, I weathered jokes from my friends (“desperado!”) for going on a date with someone I met online. He was a freshman at Dartmouth, and I was 14, as he well knew, since we’d been talking frankly for months online. We met at a bonfire, wrapped in ski jackets and surrounded by my friends, who whispered to me that he seemed great. He kissed me that night, and we started dating, a little bit, no computers involved. Conference XYZ pretty much folded in 1986, but by then I was over it, like an easy game — tic-tac-toe or a search-a-word. Anyway, I’d been kissed, at last, which had never happened when I sat alone in front of a screen. Real life was apparently going to hold more excitement even than Xcaliber.
Network of TVs Talks to Cellphones and Trades Clips for Advertising
A LITTLE-KNOWN private company, Akoo International, is setting up a network of digital screens that can send and receive messages from cellphones. The company aims to transform mobile devices into universal remote controls that can select on-demand content from big-screen TVs in airports, bars and restaurants.
With Akoo’s network, named m-Venue, cellphone users can send a text-message request for a music video, sports clip or fashion show to be delivered to their phone or played on a nearby Akoo television screen, which would act much like a high-tech jukebox.
In return, companies can deliver digital coupons and promotions to the cellphones. For instance, a customer at a John Barleycorn restaurant in Chicago, part of the m-Venue network, might select a text message code displayed on a big screen — say, one that would deliver Gwen Stefani’s new music video.
The customer would then receive a text message to the effect of, “Thanks! Gwen Stefani will play shortly. Show this text to your server and get any appetizer for $1.”
Ads on cellphones and digital signs that can be activated by consumers are part of the rapidly expanding business of mobile marketing.
The Carmel Group, a research firm in Carmel-by-the-Sea, Calif., predicts that revenue in the United States from digital signs will grow to $2.6 billion by the end of 2010 from $1.5 billion in 2007.
While a handful of companies are using digital signs for one-way communication, like sending coupons to cellphones, Akoo (pronounced AH-koo) says its technology is different because it allows consumers to control content on digital advertising screens to see something they choose. “This is the only digital out-of-home billboard network that’s fully interactive with mobile phones,” said Andy Stankiewicz, vice president for marketing at Akoo.
The content for the system, he said, is being supplied through deals with the Universal Music Group, Sony BMG Music Entertainment and Fashion TV, which have collectively made more than two million clips available to m-Venue.
Advertisers are being lured to Akoo’s network by its potential customers, who tend to be young and hard to reach. Cellphone users can register online for the service and choose to receive offers. The system also interests marketers given its proximity to the cash register, where 70 percent of purchase decisions are said to be made.
“We can tie back a mobile phone user to the customer’s purchase history,” said Niko Drakoulis, the chief executive of Akoo, based in Chicago. This works partly by identifying a person’s location when they use the system.
Akoo, which was founded in 2001, has done some early trials with McDonald’s. At one Chicago store, Akoo said, a 14-day trial with the digital screens helped increase business 17 percent.
Ad agencies have shown both interest in and trepidation about cellphone-activated digital signs. The creative agency Leo Burnett and its nontraditional sister shop, Arc Worldwide, both part of the Publicis Groupe, have signed an alliance with Akoo. The digital agency Avenue A/Razorfish, which is owned by Microsoft, is also discussing trials.
Texas State University became the first college to become part of Akoo’s network after Akoo made a deal with the food provider Chartwells, which manages food services for 200 American universities and is part of the Compass Group.
Akoo’s other public partners are mainly in the Chicago area, including the restaurant chain Bob Chinn’s Crabhouse; the Cubby Bear, a Chicago sports bar with live music; and Ala Carte Entertainment, the owner of several bars and restaurants in the area. Mr. Stankiewicz declined to say how many display screens were in the network.
Other ad agencies, while not familiar with Akoo, say they see interesting possibilities for the marriage of mobile and digital signs. “I can’t see how marketers in today’s environment couldn’t look at something like this and say it completely makes sense,” says Ross Dobson, managing partner for digital, direct and analytics at the ad agency Mullen in Wenham, Mass., a part of the Interpublic Group of Companies. “I hope they’d embrace this before they embrace other disruptive advertising on mobile devices.”
Mr. Dobson said some clients had shied away from marketing with digital signs because of the potential for lawsuits that could result from the distraction posed by moving images.
Bill Reynolds, vice president and head of media for the Interpublic Group agency Erwin-Penland, said, “These installations initially attract consumer attention, but much of it is for the novelty effect. Many of these will wear out pretty quickly, so it will be a challenge to keep them fresh and engaging.”
Library of Congress Sells Itself Out to Microsoft for a Mere $3 Mil
Paul Jones of iBiblio tipped me off to some recent M&A activity by Microsoft, this time involving the Library of Congress.
This deal involves the donation of "technology, services and funding" (e.g., mostly not money) with a purported value of $3m from Microsoft to the Library of Congress. The Library, in turn, agrees to put kiosks running Vista in the library and to use Microsoft Silverlight to "help power the library's new Web site, www.myloc.gov."
The official blogger of the library, Matt Raymond, says "this is really a quantum leap for the library." Perhaps it is, but it sure smells like a whole lot of proprietary.
Publisher Purges Thousands of Unlicensed Fonts
Publishing giant Faber & Faber is wiping away the chance of costly lawsuits by using software to purge unlicensed fonts.
The London publishing house, which has printed classic authors from T.S. Eliot to W.H. Auden, found hundreds of thousands of unlicensed fonts on their machines using software from Monotype Imaging.
The haul could have cost hundreds of thousands if left unaddressed--a recent Business Software Alliance enquiry valued 11,000 unlicensed typefaces at another London publishing house as being worth 80,000 pounds ($156,000).
Faber said it was shocked at the number of unlicensed fonts it uncovered on 21 Apple Macs by Montotype's Fontwise software, nearly three times the initial estimate.
The company has now cleansed nearly all unlicensed fonts from 19 of the computers and has purchased the remaining licenses.
Work is continuing to flush unauthorized fonts off the remaining two computers.
Roy Smith, information systems manager at Faber, said rogue fonts had built up over time as demand grew for a wide range of fonts within the design department.
He said: "Alarm bells started ringing when we saw other publishers punished for breaching copyright. We were totally shocked to see a six-figure number of fonts across the 21 machines. But we now have the tools and the knowledge required to maintain legality indefinitely.
"We know how important our own intellectual property is for our business, so ethically there really isn't any other option. It wasn't the case that staff didn't care about font licensing. The problem was a general lack of awareness of the copyright laws surrounding fonts and the concept of fonts as intellectual property."
Fontwise gives a snapshot of which font is in which directory or drive across the company.
It also allows Faber to stop unlicensed fonts from creeping back onto systems by tracking any new additions and giving designers the option of buying the license if necessary.
Faber has also introduced policies restricting designers from freely downloading new fonts.
Technical problems in Faber's systems have dropped following the purge of rogue fonts.
List of Printers Which Do or Do Not Display Tracking Dots
This is a list in progress of color laser printer models that do or do not print yellow tracking dots on their output.
We are in the process of trying to interpret the information conveyed by these dots as part of our Machine Identification Code Technology Project.
Limitations of this information
A "no" simply means that we couldn't see yellow dots; it does not prove that there is no forensic watermarking present. (For example, the HP Color LaserJET 8500 series does not include any yellow tracking dots that we can see, but it may still include some kind of forensic marking, since the majority of other Color LaserJET models do. Other forensic marking techniques have been invented, and we do not yet know how to determine whether these techniques are used by a particular printer.)
A "yes" simply means that we (or another source, as noted) saw yellow dots that appeared anomalous to us. Until we decipher the marking schemes or receive other confirmation, this does not constitute proof that any particular kind of information is represented by these dots. In a very few cases, for example, they might be the result of a dithering technique, rather than a forensic mark, or they could be the result of a poorly calibrated printer. In most cases, we are confident that the arrangement of dots is intentional and is intended to track users.
Sources of information
We have employed three sources of information. We looked at printer output under a blue light and/or a computer microscope; we consulted press reports about printers (e.g. at Druckerchannel); we relied on printer manuals and other manufacturer statements. We welcome additional statements by manufacturers, resellers, or technicians.
Thanks to our friends at software firms and symphonies, public schools and physics labs, semiconductor fabs and ice cream parlors, in about a dozen countries around the world.
Table of printers
Manufacturer Model Dots? Comments
HL-2700CN yes volunteer test
HL-4200CN yes EFF test
CLC 1000 yes EFF test
CLC 2400 yes EFF test
CLC 3002 yes EFF test
CLC 4000 yes EFF test
CLC 5000+ yes EFF test
CLC-iR 3200-C1 yes EFF test
Color imageRUNNER C2570 yes EFF test
Color imageRUNNER C3100CN yes EFF test
Color imageRUNNER C3200 yes EFF test
Color imageRUNNER C3200N yes EFF test
Color imageRUNNER C3220 yes EFF test
Color Laser Copier 1150 yes EFF test
Imageclass MF8170C yes EFF test
LBP 2410 unclear faint dots; could be artifacts
3000CN yes EFF test
3100CN yes EFF test
5100CN yes EFF test
AcuLaser C900 yes EFF test
AcuLaser C1100 yes EFF test
AcuLaser C1500 yes EFF test
AcuLaser C1900 yes EFF test
AcuLaser C3000 yes EFF test
AcuLaser C4000 yes EFF test
Fuji: see Xerox
Color LaserJET 1550L yes EFF test
Color LaserJET 2250LN no (??) EFF test
Color LaserJET 2500 yes EFF test
Color LaserJET 2500N yes EFF test
Color LaserJET 2550 yes EFF test
Color LaserJET 2550L yes EFF test
Color LaserJET 2550N yes EFF test
Color LaserJET 2600N yes EFF test
Color LaserJET 2680 yes EFF test
Color LaserJET 2840 yes EFF test
Color LaserJET 3500 yes EFF test
Color LaserJET 3550 yes EFF test
Color LaserJET 3600DN yes EFF test
Color LaserJET 3700 yes EFF test
Color LaserJET 3700DN yes EFF test
Color LaserJET 3700N yes EFF test
Color LaserJET 4500 no EFF test
Color LaserJET 4500DN no EFF test
Color LaserJET 4500N no EFF test
Color LaserJET 4550 no EFF test
Color LaserJET 4550N no EFF test
Color LaserJET 4600 yes EFF test
Color LaserJET 4600DN yes EFF test
Color LaserJET 4600HDN yes EFF test
Color LaserJET 4600N yes EFF test
Color LaserJET 4650 yes EFF test
Color LaserJET 4650DN yes EFF test
Color LaserJET 4650DTN yes EFF test
Color LaserJET 4700DTN yes volunteer test
Color LaserJET 5M no EFF test
Color LaserJET 5100CN yes EFF test
Color LaserJET 5500 yes EFF test
Color LaserJET 5500ATN yes EFF test
Color LaserJET 5500DN yes EFF test
Color LaserJET 5500HDN yes EFF test
Color LaserJET 5550 yes EFF test
Color LaserJET 5550DN yes EFF test
Color LaserJET 5550DTN yes EFF test
Color LaserJET 8500 no EFF test
Color LaserJET 8500DN no EFF test
Color LaserJET 8550 no EFF test
Color LaserJET 8550DN no EFF test
Color LaserJET 8550GN no EFF test
Color LaserJET 9500 yes EFF test
Color LaserJET 9500HDN yes EFF test
Color LaserJET 9500MFP yes EFF test
Infoprint Color 1454 unclear dithering?
Infoprint Color 1464 PS3 yes dithering?
Bizhub C350 yes EFF test
Colorforce 1501 yes EFF test
Colorforce 8050 yes EFF test
DialtaColor CF 2001 unclear dithering?
DialtaColor CF 2002 unclear dithering?
Ikon CPP500E yes EFF test
Magicolor 2 Desklaser no EFF test
Magicolor 2200 DL yes EFF test
Magicolor 2210 yes EFF test
Magicolor 2300 DL yes EFF test
Magicolor 2300 W yes EFF test
Magicolor 2350 yes EFF test
Magicolor 2350 EN yes EFF test
Magicolor 2400 W yes EFF test
Magicolor 2430 DL yes EFF test
Magicolor 2450 yes EFF test
Magicolor 3100 yes EFF test
Magicolor 3300 yes EFF test
Magicolor 5450 yes EFF test
Magicolor 7300 yes EFF test
FS-C5016N yes EFF test
FS-C5030N yes EFF test
FS-C8008 yes EFF test
Mita KM-C2230 yes EFF test
LD238C yes EFF test
LP125CX/LP126CN yes EFF test
C510 yes EFF test
C720 unclear retest
C752 yes EFF test
C752N yes EFF test
C760 yes EFF test
C910 yes EFF test
C912 yes EFF test
Minolta: see Konica
C5100 no EFF test
C5150 no EFF test
C5150N no EFF test
C5200 no EFF test
C5300 no EFF test
C7200 no EFF test
C7350 no EFF test
C7400 no EFF test
C7400N no EFF test
C9200 no EFF test
C9300 no EFF test
C9400 no EFF test
MIP C5540 no EFF test
OkiLAN 8100E no EFF test
Workio KXCL-500 yes EFF test
(see also Savin)
Aficio 1224C yes EFF test
Aficio 1232C yes EFF test
Aficio CL 2000 yes press report
Aficio CL 3000 yes EFF test
Aficio CL 3000E yes EFF test
Aficio CL 6010 yes EFF test
Aficio CL 7000 yes EFF test
AP 206 yes EFF test
Infotec/Danka ISC 2838 yes EFF test
CLP-500 no EFF test
CLP-510 no EFF test
CLP-550 no EFF test
CLP-550N no EFF test
C3210 yes EFF test
CLP35 yes EFF test
Tektronix: see Xerox
eStudio 210c yes mfr. statement
eStudio 211c yes mfr. statement
eStudio 310c yes mfr. statement
eStudio 311c yes mfr. statement
eStudio 2100c yes mfr. statement
eStudio 3100c yes mfr. statement
eStudio 3511 yes EFF test
FC15 yes mfr. statement
FC15i yes mfr. statement
FC22 yes mfr. statement
FC22i yes mfr. statement
FC25P yes mfr. statement
FC25Pi yes mfr. statement
FC70 yes mfr. statement
DocuColor 12 yes EFF test
DocuColor 40 yes EFF test
DocuColor 1521 yes EFF test
DocuColor 1632 yes EFF test
DocuColor 2000 yes mfr. statement
DocuColor 2045 yes EFF test
DocuColor 2240 yes EFF test
DocuColor 3535 yes EFF test
DocuColor 6060 yes EFF test/mfr. statement
Phaser 560 no EFF test
Phaser 740 no EFF test
Phaser 750 (Z750V) no EFF test
Phaser 750P no EFF test
Phaser 790 yes EFF test
Phaser 850DP no EFF test
Phaser 860DP no EFF test
Phaser 1235 no EFF test
Phaser 6100 no EFF test
Phaser 6200 no EFF test
Phaser 6200DP no EFF test
Phaser 6250DP no EFF test
Phaser 6350DP no EFF test
Phaser 7300DN no EFF test
Phaser 7300DT no EFF test
Phaser 7700 no EFF test
Phaser 7750DN no EFF test
Phaser 8200DP no EFF test
Phaser 8200DX no EFF test
Phaser 8400 no dithering?
Phaser 8400B unclear dithering?
Phaser 8400DP unclear dithering?
Phaser 8400DX unclear dithering?
Phaser 8400N unclear dithering?
Phaser 8440DP unclear dithering?
Phaser 8550 no EFF test
Phaser 8550DP no EFF test
WorkCentre M24 yes EFF test
WorkCentre Pro (all models) yes mfr. Statement
Secret Service Inspector Admits Destroying Documents
A senior U.S. Secret Service inspector admitted today that she destroyed original evidence sought in a long-standing lawsuit alleging that the service routinely discriminates against African American agents.
The team of assistant U.S. attorneys representing the service told U.S. Magistrate Judge Deborah A. Robinson today that they did not know that the inspector had placed the documents in a “burn bag” for destruction just two days before she was scheduled to testify in the case.
Inspector Carrie Hunnicutt testified that she questioned more than 150 senior service officials under an order from Robinson about their search for all paper documents related to the promotion of black agents in a civil lawsuit filed in federal court eight years ago.
Nearly 60 African Americans allege in sworn statements that they were leapfrogged by white agents who scored lower on promotional exams and forced to endure the use of the word “nigger” on the job. They are seeking certification for a class-action lawsuit, but so far have not made it past the discovery stage.
Hunnicutt testified that she destroyed surveys from 50 high ranking officials; a statistical report; fax sheets and documents that showed who was contacted during the service’s search for paper documents in the case.
Hunnicutt said she placed the documents in a “burn bag” on Jan. 30, 2008, just two days before she was scheduled to testify about the the service’s efforts to comply with Robinson’s Dec. 21st court order to hunt for documents.
Today’s hearing was the 7th hearing held by Robinson to determine whether to sanction the service again for failing to produce credible testimony and evidence in the lawsuit. Robinson has already sanctioned the service three times. Legal experts say that is a highly unusual number especially against a government agency.
Robinson told the lawyers that she was “shocked” that a Secret Service agent would destroy documents. The Secret Service’s own counsel has ordered the agency’s employees to retain all documents relevant to the case.
Assistant U.S. Attorney Marina Utgoff Braswell told Robinson that she and the rest of the legal team did not learn about the extent of the destruction until Hunnicutt testified today.
“We are all learning for the first time what happened here,” Braswell said. Hunnicutt’s supervisor told the government lawyers on Tuesday that there were some “scraps of paper” that were destroyed but he did not elude to the destruction of the original surveys.
Braswell said her hands were tied to find out more information about the destroyed documents in advance of the hearing because of a court order forbidding Hunnicutt from talking to anyone about the case.
“We have certainly not been dilatory,” Braswell said.
The team of lawyers from Hogan & Hartson and Relman & Dane representing the plaintiffs in the lawsuit for free said the burning of the documents is an “outrageous act” and in defiance of the service’s own order to preserve all documents in the case.
“I am shocked and disappointed in the U.S. Secret Service and their inability to retain and produce evidence relevant to our claims,” said E. Desmond Hogan, a lawyer with Hogan & Hartson in Washington. “This is representative of a pattern of behavior in this case. It shows how they disrespect and mistreat the plaintiffs in the case.”
Under questioning by assistant U.S. attorney Michelle Johnson, Hunnicutt said she destroyed the documents because she wanted the most accurate ones to be sent to court.
Hunnicutt said she noticed that some of the surveys, about 50, were misnumbered in January. So she “transferred” the correct information to the newly numbered surveys.
But during the cross-examination, Hogan argued that by destroying the original documents, the court would have no way to independently verify her work as accurate.
Robinson had to intervene several times during the questioning to instruct Hunnicutt to answer Hogan’s question. Nearly every single objection was overruled by Robinson in favor of the plaintiffs.
Disturbing New Photos From Abu Ghraib
As an expert witness in the defense of an Abu Ghraib guard who was court-martialed, psychologist Philip Zimbardo had access to many of the images of abuse that were taken by the guards themselves. For a presentation at the TED conference in Monterey, California, Zimbardo assembled some of these pictures into a short video. Wired.com obtained the video from Zimbardo's talk, and is publishing some of the stills from that video here. Many of the images are explicit and gruesome, depicting nudity, degradation, simulated sex acts and guards posing with decaying corpses. Viewer discretion is advised.
Head of Guantanamo Trials Resigns
The Pentagon official overseeing the planned military trials of Canadian Omar Khadr and other terror suspects at Guantanamo Bay in Cuba resigned Monday - just days after a published report alleged he'd insisted there be no acquittals.
As General Counsel at the U.S. defence department, William J. Haynes was a leading architect of the military commission system U.S. President George. W. Bush ordered established in the wake of the September 11, 2001, attacks.
But his alleged backroom insistence the commission produce only convictions provoked a rush of commentary - much of charging it proved the trials will be a sham.
"I am sorry to see Jim leave the Pentagon," U.S. Defence Secretary Robert Gates said in Washington. "I have valued his legal advice and enjoyed working with him. Jim held this important post longer than anyone in history and he did so during one of America's most trying periods."
Haynes' alleged comments appeared in an interview Nation magazine conducted with Col. Morris Davis, who resigned last October as the commission's chief prosecutor, citing political interference.
"I said to (Haynes) that if we come up short and there are some acquittals in our cases, it will at least validate the process," Davis was quoted as saying about an August 2005 meeting the two men had.
"At which point, his eyes got wide and he said, 'Wait a minute, we can't have acquittals. If we've been holding these guys for so long, how can we explain letting them get off? . . . We've got to have convictions.'"
The Pentagon has disputed Davis's recollection of the conversation, and denied there is any connection between the Nation article and Haynes' resignation, which takes effect next month.
"Mr. Haynes discussed his interest in returning to the private sector with the Secretary of Defence some months ago," said spokeswoman Cynthia O. Smith. "Mr. Haynes was recently presented with an excellent opportunity and he and his family decided to take (it)."
Haynes' departure makes little difference for Khadr's prospects before the commission, his U.S. military lawyer, Navy Lt.-Cmdr. Bill Kuebler, told Canwest News Service.
"Whether or not Mr. Haynes is managing the commission, it is still the process he helped to create," Kuebler said.
"Consistent with his comments, it is designed to produce convictions of the presumptively guilty."
Kuebler spoke from Ottawa where, earlier in the day, he had joined opposition MPs in calling on Prime Minister Stephen Harper to intervene on behalf of Khadr.
"The Guantanamo Bay military commission process does not provide a fair trial. It is a political process," he said.
A military judge will rule soon on Kuebler's recent bid to have the charges against Khadr - who was 15 when U.S. forces seized him on an Afghan battlefield - dropped on grounds the commission isn't designed to try child soldiers.
"All (other) children taken to Guantanamo were ultimately released to be reintegrated back into the societies of their home countries - including a 14-year-old Afghani boy who was responsible for the death of a U.S. serviceman," Kuebler said.
Kuebler argued the United States has held onto Khadr on suspicion he has "intelligence value." Khadr's father, Ahmed Said Khadr, had been an al-Qaida operative close to Osama bin Laden before being killed in a U.S. air raid.
But Pentagon spokesman J.D. Gordon said the litany of charges against Khadr warrant his detention and eventual trial as an adult. He is accused in a grenade attack that left a U.S. serviceman dead.
"Omar Khadr is charged with murder, attempted murder, conspiracy and spying, all in violation of the Military Commissions Act," he said.
"Canadian law and U.S. law both provide that a person of Khadr's age alleged to have committed such offences can be tried as an adult . . . If Khadr is found guilty, however, age may be relevant at sentencing."
Barring a successful motion to dismiss, Khadr is scheduled to go on trial in May.
U.S. Designates Afghan Journalist Enemy Combatant
Military board says it has `credible information' to further detain media aide as danger to troops
An Afghan journalist working for CTV has been designated an "unlawful enemy combatant" by the U.S. military, after being held for four months without charge.
Jawed Ahmad, also known as Jojo Yazemi, went before an enemy combatant review board, which determined there was "credible information" to detain him further as a danger to foreign troops and the Afghan government, a U.S. spokesperson said yesterday. He is being held at Bagram, north of Kabul.
Maj. Chris Belcher, spokesperson for the U.S.-led coalition, told the Associated Press Ahmad was allowed to make a statement to the review board, and "was in no way targeted because of his work as a journalist."
It was unclear if he was represented by a lawyer.
CTV News president Robert Hurst said his company "continues to be deeply concerned about Ahmad's well-being. We are continuing to work all diplomatic channels available to find out additional information and get Jojo his due process."
Ahmad, who is in his early 20s, had also worked as a freelance fixer for the Star.
"It is distressing to hear allegations such as these without being shown a single piece of supporting evidence," said Star Europe bureau chief Mitch Potter, for whom Ahmad did freelance translation and field work in Kandahar in 2006.
Earlier this week, the New York-based Committee to Protect Journalists issued a statement asking U.S. authorities to disclose evidence and specify charges against Ahmad, after holding him since Oct. 26.
"We urge military officials to either charge (Ahmad) with a recognizable criminal offence, or if they have no intention of doing so, to release him immediately," said CPJ executive director Joe Simon.
Ahmad's brother, Siddique Ahmad, told reporters the military accused Jawed of having contact with local Taliban fighters. Journalists' organizations note that Afghan journalists often have contact with the Taliban, in order to get information for stories they are assigned.
Ahmad was detained in Kandahar, the southern area where Canadian troops are based – and one of the most Taliban-infiltrated areas. Potter described him as a "diminutive man who probably weighs 120 lbs. and could find it difficult to withstand a lot of pressure."
Human rights groups have protested reports of ill-treatment of prisoners at the Bagram base.
Ahmad is one of the latest local journalists to be detained by the U.S. in Afghanistan or Iraq. AP's Iraqi photographer Bilal Hussein has been held without charge in Iraq for 22 months.
Air Force Blocks Access to Many Blogs
The Air Force is tightening restrictions on which blogs its troops can read, cutting off access to just about any independent site with the word "blog" in its web address. It's the latest move in a larger struggle within the military over the value -- and hazards -- of the sites. At least one senior Air Force official calls the squeeze so "utterly stupid, it makes me want to scream."
Until recently, each major command of the Air Force had some control over what sites their troops could visit, the Air Force Times reports. Then the Air Force Network Operations Center, under the service's new "Cyber Command," took over.
He's joking, of course. But blogs and social networking sites have faced all sorts of restrictions on military networks, for all sorts of reasons. MySpace and YouTube are officially banned, for eating up too much bandwidth. Stringent regulations, read literally, require Army officers to review each and every item one of his soldiers puts online, in case they leak secrets. And in televised commercials, screensavers and fliers, troops are told that blogging is a major security risk -- even though official sites have proven to leak many, many more secrets. Now there's the Air Force's argument, that blogs aren't legitimate media outlets -- and therefore, shouldn't be read at work.
But this view isn't universally held in the military. Many believe blogs to be a valuable source of information -- and a way for ordinary troops to shape opinions, at home and abroad. Gen. David Petraeus, who heads the U.S. effort in Iraq, has commended military bloggers. Lt. Gen. William B. Caldwell IV, who replaced Petraeus as the head of the Combined Arms Center and Fort Leavenworth, recently wrote (in a blog post, no less) that soldiers should be encouraged to "get onto blogs and [s]end their YouTube videos to their friends and family."
Within the Air Force, there's also a strong contingent that wants to see open access to the sites -- and is mortified by the AFNOC's restrictions. "When I hear stuff this utterly stupid, it makes me want to scream.... Piles of torn out hair are accumulating around my desk as we speak," one senior Air Force official writes in an e-mail. "I'm certain that by blocking blogs for official use, our airmen will never, ever be able to read them on their own home computers, so we have indeed saved them from a contaminating influence. Sorry, didn't mean to drip sarcasm on your rug."
One of the blogs banned is In From the Cold, which examines military, intelligence and political affairs from a largely right-of-center perspective. It's written by "Nathan Hale," the pseudonym for a former journalist and Air Force intelligence officer, who spent more than two decades in the service. He tells Danger Room, "If knowledge and information are power -- and no one disputes that -- then why not trust your people and empower them to explore all sides of issues affecting the service, air power and national security?"
"The Air Force isn't getting the planes that they want because they are incapable of communicating their usefulness and applicability in this new war. Because Air Force officers talk more like corporate bureaucrats than cocky war fighters, no one is inspired or convinced of their pressing (and quite legitimate) need to modernize the force," he adds. "Air Force bloggers spoke the lingo of someone heavily invested in the fight, because they operate outside the survival-minded careerist world of public affairs, with many of them penning blog posts from theater."
Perhaps, says retired Air Force Col. Tom Ehrhard, who's now a Senior Fellow at the Center for Strategic and Budgetary Assessments. But there are legitimate security reasons why blogs need to be restricted. Adversaries may be using blogs to take advantage of airmen, he notes.
EFF Being Stymied in Effort to Explore Justice Department/Google Coziness
The Electronic Frontier Foundation wants to know all there is to know about contacts between Google and a Justice Department official involved in a highly charged 2006 government-snooping dispute that ensnared the search giant. That DoJ official, Jane Horvath, was subsequently hired by Google last year as senior privacy counsel.
The government has for six months refused Freedom of Information Act requests from EFF to see correspondence between Horvath and Google for the period the former was employed as the DoJ's first chief privacy and civil liberties officer (insert laugh track here), according to a suit filed yesterday by the EFF.
From the EFF press release:
"It's a request that we very well might have made under any circumstances -- the DOJ's chief privacy official's contacts with the world's largest private repository of info about online activity," he writes. "The fact that she ended up working for Google made it all the more intriguing to know what kinds of contacts there were. We're not after anything in particular, just a window into the relationship between these two powerful entities vis-à-vis privacy issues."
What requires no explanation is why the Justice Department has refused to comply with the EFF's request for what is clearly public information: the Bush Administration's fetish for secrecy and bedrock conviction that it operates above the law.
The Justice Department told Associated Press that it had no comment on the matter.
I've asked Google for a response. Don't expect anything meaningful.
Worker Snooping on Customer Data Common
Ryan J. Foley
A landlord snooped on tenants to find out information about their finances. A woman repeatedly accessed her ex-boyfriend's account after a difficult breakup. Another obtained her child's father's address so she could serve him court papers.
All worked for Wisconsin's largest utility, where employees routinely accessed confidential information about acquaintances, local celebrities and others from its massive customer database.
Documents obtained by The Associated Press in an employment case involving Milwaukee-based WE Energies shine a light on a common practice in the utilities, telecommunications and accounting industries, privacy experts say.
Vast computer databases give curious employees the ability to look up sensitive information on people with the click of a mouse. The WE Energies database includes credit and banking information, payment histories, Social Security numbers, addresses, phone numbers, and energy usage. In some cases, it even includes income and medical information.
Experts say some companies do little to stop such abuses even though they could lead to identity theft, stalking and other privacy invasions. And companies that uncover violations can keep them quiet because in many cases it is not illegal to snoop, only to use the data for crimes.
"The vast majority of companies are doing very little to stop this widespread practice of snooping," said Larry Ponemon, a privacy expert who founded The Ponemon Institute, a Traverse City, Mich.-based think tank.
Jim Owen, spokesman for the Edison Electric Institute, a lobbying association that represents utilities, disputed suggestions the problem was common in the industry.
"I am not aware of any other situation that has arisen in the utility sector," he said.
Companies generally avoid talking about snooping or any measures they've taken to prevent it.
Scott Reigstad, a spokesman for Madison, Wis.-based Alliant Energy, which has one million electric and 420,000 natural gas customers in Iowa, Wisconsin and Minnesota, said his company has safeguards in place to stop misuse but does not discuss them publicly.
"We haven't had any issues that we're aware of," he said.
Jay Foley, executive director of the Identity Theft Resources Center, said state regulators and lawmakers must step in if companies are not guarding their customer information responsibly.
"Something needs to be done at the state level to make sure this is illegal," he said.
He said more companies have to start using software that can track each customer account that employees access.
WE Energies says it has taken numerous steps to stop the problem but even so detecting misuse can be difficult. That's because it is hard to discern the legitimate access of customer information from employees looking for curiosity.
"People were looking at an incredible number of accounts," Joan Shafer, WE Energies' vice president of customer service, said during a sworn deposition last year. "Politicians, community leaders, board members, officers, family, friends. All over the place."
Her testimony came in a legal case involving an employee who was fired in 2006 for repeatedly accessing information about her ex-boyfriend and another friend. An arbitrator in November upheld the woman's firing. The AP reviewed testimony and documents made public as part of the case.
The misuse came to light in 2004 when an employee helped leak information to the media during a heated race for Milwaukee mayor that a candidate, acting Mayor Marvin Pratt, was often behind in paying his heating bills. Pratt lost to the current mayor, Tom Barrett.
Pratt said he's convinced the disclosure cost him votes and unfairly damaged his reputation. Pratt said he recently met with top company executives and was satisfied it has stopped the problem as much as possible. He said he has dropped earlier plans to explore a lawsuit.
"They caught this and they are making corrections to it, which they should. But it never should have happened in the first place. Not just to me, but to anyone. They gave their employees too much latitude to access files."
After the incident involving Pratt, the company fired the employee who leaked the information and vowed to crack down after finding others engaged in similar practices. But problems continued.
In all, the utility fired or disciplined at least 17 employees for breaking the policy between 2005 and 2007, according to testimony and company records. Another employee gained access to Pratt's account for no business purpose and was suspended in 2005 but kept her job.
Others looked up information on their bosses at WE Energies and local conservative radio host Mark Belling, who said he had never been told of the breach.
Ponemon said employees with access to vast amounts of customer information often see nothing wrong with looking up an individual out of curiosity, or in some cases, more sinister motives.
Governmental agencies have also struggled with the problem.
The IRS took 219 disciplinary actions, including firings and suspensions, against employees who browsed through confidential taxpayer information last year, according to the U.S. Treasury Inspector General for Tax Information. That was more than double the number the previous year.
Last month, the Minnesota Department of Public Safety said it disciplined two employees who accessed information on 400 residents from its driver's license database. The agency did not say what the discipline was because it continues to investigate. It said the employees were looking for their own entertainment, not any criminal motives.
WE Energies serves 1.1 million electric customers in Wisconsin and Michigan's Upper Peninsula and 1 million natural gas customers in Wisconsin.
Shafer said in an interview that the utility took steps to eliminate the practice and only one employee has been disciplined for violations in the last year.
After the 2004 incident, the company started checking who accessed high-profile customer accounts and requiring annual training on its policies.
Still, Shafer acknowledged in her deposition last year that it would be "difficult, if not impossible" to discover many instances of misuse.
Utility regulators in Michigan and Wisconsin said they had not been notified of the company's problems. They say they do not have any rules covering such misuse.
The head of the Wisconsin Citizens' Utility Board, which lobbies on behalf of utility customers, said he was "shocked and dismayed" to learn about the practice.
"The testimony is incredibly candid. I'm very surprised that utility employees were misusing this information," said executive director Charlie Higley. "We hope WE Energies has taken steps to ensure that information is treated privately."
German Court Limits Cyber Spying
Germany's highest court has restricted the right of the security services to spy on the computers of suspected criminals and terrorists.
Under the technique, software sent in an email enables the authorities to spy on a suspect's computer hard drive.
The Federal Constitutional Court in Karlsruhe said cyber spying violated individuals' right to privacy and could be used only in exceptional cases.
Civil liberties activists have warned of an unacceptable invasion of privacy.
The case - which began last year - was brought after the western state of North Rhine-Westphalia allowed officials to begin using the technique.
Court President Hans-Juergen Papier said that using such software contravened rights enshrined in Germany's constitution, adding that the decision would serve as a precedent across the country.
The ruling emphasised that cyber spying by the authorities would have to receive the permission of a judge.
The German government has described cyber spying as a vital tool in fighting terrorism.
Interior Minister Wolfgang Schauble welcomed the possibility of using the strategy and said it would be considered as part of plans to change the law.
"The court's decision must be carefully analysed and will be accounted for as the legislation is modified," he said.
Judicial approval is already required in Germany for a suspect's telephone to be tapped, and the interior ministry had been expecting the court to make a similar requirement for spying on computers.
During the case, Germany's independent privacy commissioner Peter Schaar argued that the measure would be a "further alarming step towards ever more sweeping surveillance".
Germany has uncovered a number of alleged terrorist plots in recent years.
In September 2007, the authorities arrested three men whom they claimed were planning bomb attacks around the country and belonged to militant Islamist group al-Qaeda.
The Most Spied Upon People in Europe
Germany's highest court has ruled that spying on personal computers violates privacy, but governments across Europe are under pressure to help their security services fight terrorism and organised crime.
Here, BBC reporters give a snapshot of the extent of surveillance across Europe.
Paul Kirby on Germany
Dominic Casciani on the UK
Emma Jane Kirby on France
David Willey on Italy
Malcolm Brabant on Greece
Julian Isherwood on Denmark
GERMANY - PAUL KIRBY
Germans have an historic fear of state intrusion, dating back to the Stasi secret police in the East and the Nazi-era Gestapo. But the threat of terrorism has forced the German government to take stricter measures.
During the 1970s, the West German authorities tightened legislation after a series of attacks by the left-wing Red Army Faction. The German government went further following revelations about Mohammed Atta, the head of the Hamburg cell involved in the 9/11 attacks on New York.
The most controversial changes have come since 2006, when police found explosives in a pair of suitcases left on two passenger trains in Koblenz and Dortmund in western Germany.
The bombs did not go off and, after surveillance camera video was posted on the internet, arrests were made.
Chancellor Angela Merkel said the use of video surveillance was clearly important and rail operator Deutsche Bahn stepped up its use of closed circuit television (CCTV) cameras.
When a laptop was found apparently containing plans, sketches and maps, the authorities then considered how to monitor suspects' computers so that plots could be prevented at an earlier stage.
The Federal Criminal Police Office (BKA) already had the ability to monitor suspects' emails and the websites and chat rooms they visited.
They could also tap phones with the consent of a judge.
Now they wanted to send emails that would infect a recipient's computer with spy software and relay information to police computers.
The threat was compounded by the discovery of 12 vats of hydrogen peroxide in September 2007 and an alleged plot to bomb US civil and military targets.
Three hundred police had been involved in a nine-month surveillance operation but had not been able to access the suspects' computers.
The Constitutional Court has now decided that the practice of cyber spying violates the right to privacy but would be acceptable in exceptional cases, under the auspices of a judge.
Faced with warnings from Germany's privacy commissioner of ever more sweeping surveillance - and protesters' T-shirts bearing the slogan "Stasi 2.0" - the government will have to tread carefully.
The police believe they will need to use spy software in perhaps 10 cases a year.
UNITED KINGDOM - DOMINIC CASCIANI
There is a big-budget sci-fi thriller running on BBC TV at the moment called The Last Enemy.
The hero is advising ministers on plans for a crime-fighting database to link all databases. And, unwittingly, he becomes a victim of the computer's all-seeing eyes.
So is it silly drama or the shape of things to come?
Privacy campaigners say the UK has some of the world's leading surveillance systems - and they argue there is now a real failure of sufficient oversight.
Take the millions of CCTV cameras, for example. They were rolled out to deter city centre crime.
But thanks to the internet and new software that can read number plates, text and, in certain circumstances, isolate specific human behaviour, their importance is increasing ten-fold.
The question in the UK is what would happen if you took camera data and married it to other sources, such as information on the location of mobile phones, swipe cards for urban transport and static databases about you, your family and life history. That would be a pretty effective surveillance system, say critics.
Ministers say this is completely fanciful - for a start there are no plans for a supercomputer to gather this information.
Secondly they argue two important laws govern the use of personal information and how the security services can use surveillance technology.
But the reality is they are now struggling politically to make reassurances stick.
The two main opposition parties oppose plans for full biometric identity cards on grounds of cost, oversight and, increasingly, fears of incompetence. The cards are almost certain to become a big issue at the next general election.
A string of controversies have buffeted ministers including the loss of a laptop containing information on armed services personnel and the disappearance of CDs holding family records. There has also been a row over the bugging of an MP.
While none of these rows seamlessly fit together, the jigsaw pieces are enough to make some people nervous.
So while the police-led DNA database - the largest in the world - has clear crime-fighting successes under its belt, no political party will back the calls of one highly respected judge to place everyone on it.
The Roman satirist Juvenal famously asked "Who watches the watchmen?" and that question is very much alive in British politics today.
FRANCE - EMMA JANE KIRBY
When you remember that the word "Liberty" is one of just three words enshrined in the French Republic's motto, you can guess that on the whole, the French are not big fans of surveillance equipment.
Too bad then that last year, the French Interior Minister, Michele Alliot-Marie, announced that the number of CCTV cameras in France would triple by 2009 in a bid to crack down on street crime and to fight terrorism.
Official estimates suggest there are already about 340,000 authorised surveillance cameras in France and this new move would see the number of cameras on Paris's public transport network hit 6,500 in the next two years - compared with a projected 9,000 on the London Underground in the same period.
Plans to deploy 4ft-long spy drones across French skies in an attempt to tackle the country's growing problem of gang violence were also unveiled.
The drones, with day-night vision, will be used to track suspects and should begin full operational testing this year. The plan has annoyed many local officials who doubt spy cameras are the answer - they would rather see neighbourhood police officers brought back.
Surveillance cameras are not just kept for the streets. Last year a company which manufactures GPS systems for cars launched Kiditel, a child-tracking device.
The games console-sized device slips into a child's pocket and allows parents to keep track of their child's movements via satellite images sent to their computers.
Many parents welcomed a product they believed would help their children keep safe, but psychologists like Jean Claude Guillemard were not so welcoming:
"The children who have this device will think of their parents as Big Brother" he said. "I think that scares me. I think it's dangerous for their mental health."
Similarly a French childminder caused a row last year when she became the first nanny to install an internet webcam in her creche so that parents could still look in on their children - and see that she was taking good care of them - even though they were at work.
The parents loved it, but local authorities and the National Federation of Maternal Assistants denounced the idea as undermining the relationship of trust between the parents and the child minder.
The eye in the sky may be keeping an ever closer watch on France - but the French are determined to keep their liberty.
ITALY - DAVID WILLEY
Italians are among the most spied upon people in the world. That's the conclusion of the authoritative German scientific think-tank, the Max Planck Institute, which reports that Italy leads the world with 76 intercepts per 100,000 people each year.
Although the Italian constitution guarantees privacy of information, and a national data protection authority was set up in 2003 with a communications ombudsman at its head, wiretapping and electronic eavesdropping are widely used not only by the secret services, but also by the judiciary, particularly in the fight against organised crime.
Prosecutors routinely order wiretaps as a result of police investigations, and the cost to the Italian state has become a heavy burden on the taxpayer.
Wiretaps are carried out with the help of the now privatised Italian Telecom, which has been frequently criticised in the media for working hand in glove with the secret services.
A former director of security at Telecom, Giuliano Tavaroli, who had close links with the secret services, was sent to prison together with his friend Marco Mancini, a former anti-terrorism chief, as a result of a wiretapping scandal.
Several recent high profile political scandals have revealed the extent to which the private conversations of politicians and public figures are being taped.
Although the bugging of MPs' phones is forbidden without the specific permission of parliament, prosecutors and judges routinely leak to journalists details of compromising conversations.
The former governor of the Bank of Italy, Antonio Fazio, was forced to resign as a result of a scandal which came to light in this way.
The outgoing government of Romano Prodi announced last year that it was going to introduce a law making it an offence punishable by up to three years imprisonment for journalists to publish information obtained through judicially authorised wiretapping leaks. But no such law was ever passed.
GREECE - MALCOLM BRABANT
In the run-up to the 2004 Athens Olympics, I met a man who was furious about the appearance of 350 cameras in the capital as part of a $1.5bn security programme to protect athletes and spectators.
"If I choose to have an affair with a woman who is not my wife, that is my fundamental human right, and I should be protected from being caught on camera," he said.
The man was walking in the suburb of Nikaia, where the local left-wing mayor, who disapproved of surveillance, had ordered workmen to daub black paint over the lenses.
That cameo encapsulates the desire of most Greeks to resist state attempts to spy on them and helps explain why Greece leads the European Union and the rest of the world in privacy protection for its citizens.
The other important contributory factor is the strength and moral independence of the nation's Data Protection Authority, which is resolute in its determination to uphold the following principles enshrined in the Greek constitution:
• Every person's home is a sanctuary
• The private and family life of the individual is inviolable
• Secrecy of letters and all other forms of free correspondence or communication shall be absolutely inviolable
The authority has real teeth. In December 2006 it fined mobile phone company Vodafone 76m euros for bugging more than 100 top Greek officials, including Prime Minister Costas Karamanlis, around the time of the Olympics.
Vodafone's network planning manager in Greece, Costas Tsalikides, was found hanged not long after he informed his superiors he had discovered that spying software had been secretly installed in the company's system.
Mr Tsalikides family has always suspected he was murdered.
Since January 18, 2008, the case has been officially closed. Vodafone Greece will appeal against the fine and says it has co-operated fully with all relevant authorities since the beginning of the case.
The Data Protection Authority has also frustrated the efforts of the Conservative government to extract some value from the Olympic security system.
When a left-wing group called Revolutionary Struggle fired a rocket into the office of the US ambassador in Athens, there was no video record because the security cameras were switched off.
The authority refused to allow the cameras to be used for anything other than traffic control.
In November 2007, a state prosecutor told the police that they would be allowed to use footage from the surveillance system to prosecute demonstrators who turned violent.
The new rules were first applied during the annual 17 November march to commemorate the dozens of students killed in 1973 when tanks of the right wing colonels' junta crushed an uprising at Athens Polytechnic.
"So many years after the dictatorship, Greece is very sensitive in the area of freedoms," said Panos Garganos, who was marching for the 33rd year in succession.
The use of the cameras to monitor the demonstration led to the resignation of the head of the Data Protection Authority.
Despite the fact that Greece has such strong constitutional protection against state-sponsored spying, some of my contacts refuse to have sensitive conversations on either land lines or mobile phones, because they assume that someone is listening.
DENMARK - JULIAN ISHERWOOD
In keeping with other European countries, Denmark has introduced anti-terrorist legislation that has provided the country's domestic security service PET with a raft of monitoring tools with which to carry out its counter-terrorism activities.
With the discovery over the past five years of terrorist cells, and particularly groups using Denmark as preparatory ground for activities elsewhere in Europe, Danish parliamentarians have been relatively unanimous in adopting counter-terrorism measures, with the broad support of the general public.
These have included the availability to the domestic security service of quite extensive monitoring measures, particularly in the areas of communication interception, data retention and the ability to monitor and geographically locate mobile and other telephone conversations.
Internet Service Providers are now by law required to keep all communication for at least one year. Access to all these monitoring activities however, although simplified in the latest counter-terrorism legislation, is not automatic and still requires a court order.
While previous legislation required the security service to substantiate and obtain a court order for each telephone number it wished to monitor, the new law provides for application for a court order to monitor a person's full communication activities - telephones and cyber-communication - but only in connection with cases falling under counter-terrorism legislation.
CCTV monitoring, while extensive in other parts of Europe, is not widespread in Denmark, although there are currently plans, and a public demand, to introduce monitoring in some crime-prone urban areas following several murders and disturbances in defined areas at night.
However, safeguards against general CCTV monitoring are strict, preventing the installation of CCTV cameras in public areas that would allow the identification of individuals or groups.
A Copenhagen kindergarten that recently suggested it would like to install CCTV monitoring around its premises gave up the idea following a public outcry.
Similarly, workplace monitoring is under strict control, preventing camera surveillance of employees, although the installation of CCTV in public areas of shops in particular is permitted.
Command and control - and more control
Unprepared to Fight Worldwide Cyber Crime
Patrick J. Dempsey
Although the Internet may be considered the greatest achievement of the past 50 years, the technology behind it has created a sanctuary for various types of computer criminals. The unfortunate and ugly truth is that the Web is providing a brand new “world” where international cyber criminals can thrive, and the world’s numerous criminal justice systems just aren’t ready to address these crimes in their entirety.
Cyber criminals don’t necessarily need to leave the comfort of their homes to commit their crimes. Today, for example, bank robberies can be committed in Southeast Asia via a computer that’s being controlled by an individual in Russia. Identity theft is achieved through a complex network of individuals residing in North America, Europe, and Africa, all effectively working together on the Internet to profit from shared information. And organized crime has ties to spam campaigns, identity theft, denial-of-service attacks, and organized hacking rings.
The fact is that Internet crimes are almost always international crimes. When you read about a bank system being hacked in order to steal 100,000 accounts, more than likely this crime was committed by perpetrators overseas, and there will almost definitely be a connection to organized crime. This part of the story is rarely conveyed to the everyday reader, but it is critical to understand this fact if we are going to fix the problem.
In the world of cyber crime, law enforcement officials in most countries have recognized that they must move much faster than the average investigator due to the fact that computer evidence can “disappear” rather quickly. These same cyber investigators realize they must be willing and ready to cooperate with law enforcement officials in other countries if they actually plan to capture the Internet criminals.
Laws, treaties, and conventions, such as the Convention on Cybercrime, have attempted to address the international cooperation issue. Although the Convention on Cybercrime is an outstanding step in the right direction, is not a “law” that applies to all countries. Regardless of whether the country is a member of this Convention, the punishments levied are based on the local laws of the land.
But the problem with investigating international cyber crimes and capturing criminals on the Internet is not necessarily due to lack of cooperation among international law enforcement bodies. The issue has much more to do with the fact that the legal systems throughout the world vary greatly and take a very long time to change. These two facts make it extremely difficult for law enforcement to cooperate, investigate, capture, and ultimately prosecute the cyber criminals today.
If we accept the fact that the greatest hurdle in arresting international cyber criminals is that various legal systems just aren’t prepared to address the speed at which these crimes occur or the various nuances that are unique to computer crimes, then the question is: What can we do to fix the problem?
It’s obvious that the Internet requires some type of governance. But it is just as obvious that trying to establish this governance through the numerous legal systems might not be practical. The other possibility for governing the Internet, and, more specifically, the criminal activity that occurs on the Internet, would be to change the structure of the Internet. Although I don’t support ideas like the “national firewalls” put in place by some countries, this type of solution does afford some level of control over Internet traffic flowing through said country.
However, knowing all the possibilities with disguising or “spoofing” one’s information on the Web, I’m not sure that there is a way to truly “protect our borders” when it comes to the Internet. The solution might be to establish two Internets -- the current Internet and a new, more secure Internet where users would be required to register prior to gaining access. Once again, though, we’re confronted with the issue of what would be the governing body that would manage the user registrations? Would it be an organization similar to the IANA (Internet Assigned Numbers Authority) or InterNIC that would manage user registrations on the “new” Internet, or do we need to establish an entirely new entity to manage a more secure Internet?
The fight against international cyber crime is going to take a concerted effort from large and small corporations, law enforcement in all countries, as well as the governments and legislative bodies of those same countries. Most importantly, the average end user will have to join the fight to bring about change on the Internet, or create a “new” Internet using the lessons we’ve learned.
Soon U.S. Citizens Must Ask for Government Permission to Fly or Travel
The Department of Homeland Security's Transportation Security Administration (TSA) is moving forward to institute a rule that would require all passengers to go through a government review process before boarding any airplane that takes off or lands anywhere with in the United States.
The U.S. government already requires international passengers to participate in the Advanced Passenger Information System, providing their full name, gender, date of birth, nationality, country of residence, and travel document type and number to the TSA before boarding. Under the proposed Secure Flight Program, this procedure would also be required on domestic flights.
Currently, individual airlines are responsible for checking the passenger manifests against the "no fly" and "enhanced screening" lists provided by the TSA. The new programs are part of a concerted effort to centralize this process, so that the TSA itself will check all supplied information against these lists, and then instruct the airline or airport staff as to how to proceed.
The Association of Corporate Travel Executives (ACTE) has criticized the new Secure Flight rules for their secrecy and lack of accountability. The association has expressed concern that there is no clear appeals process for passengers denied boarding or continually forced to undergo enhanced security screening.
"On the surface, the new Secure Flight program no longer relies on commercial databases and appears to have reduced the number of names on the 'No Fly' list," said ACTE Executive Director Susan Gurley. "It also seems that the responsibility for checking data is no longer abrogated to the airlines. While this is a step in the right direction, it prompts the industry to ask what was the origin of this new data, how is it stored, who has access to it, and how can it be corrected."
TSA Lab's New Concept in Airport Security: Tunnel of Truth
Futuristic vision of airport security would see passengers stand on a conveyor belt moving under an archway as different sensors scan them for weapons, bombs, and other prohibited items; no need to take the shoes off; by the time they step out of the tunnel, they have been thoroughly checked out
A smart mathemtics Ph.D. student may want to consider writing his or her dissertation on the direct correlation between, on the one hand, the importance of being on time for a pressing business meeting in another city and, on the other hand, the length of lines and slowness of the security screening process at the airport of origin. We may call it the Irritability Corollary. National Defense reports that Transportation Security Laboratory director Susan Hallowell would like to see the day when airline passengers no longer have to take their shoes off after standing in a long line at airport security checkpoints. Instead, she would like to combine the line and an array of sensors into what she calls a “tunnel of truth.”
The concept -- with the somewhat Orwellian name -- would have passengers stand on a conveyor belt moving under an archway as various sensors scan them for weapons, bombs or other prohibited items. By the time they step out of the tunnel, they have been thoroughly checked out, she said at a homeland security science and technology conference sponsored by the National Defense Industrial Association.
“You’re in line anyway … why not enclose that in a little glass thing and do your analysis there?” she asked.
The lab has given a grant to Penn State University to study the concept.
Greenpeace Activists Blatantly -- and Easily -- Breach Heathrow Security
Greenpeace activists, protesting plans to build a third runaway at Heathrow, manage to breach tight airport security and clamber atop a Boeing 777 on the tarmac; security authorities worry about airport security
The British security authorities are investigating how, exactly, did Greenpeace activists manage to climb on top of a British Airways Boeing 777 at Heathrow. The demonstrators walked through a set of double doors at Terminal 1 and succeeded in making their way across the tarmac without being challenged or stopped. The Telegraph's David Millward writes that the demonstrators did not cause disruption to other flights, but security experts are worried about the ability of the demonstrators to make their way through several layers of supposedly tight airport security and reach the plane. The Greenpeace activists' stunt is but the latest in a series of protests by climate change campaigners, who last summer staged a camp at Heathrow. Their ability to get onto the tarmac and then climb onto a plane without police or security staff intervening raises serious question about the ability of Heathrow security personnel and systems to protect aircraft and passengers at the busy airport.
The protest is tied to a soon-to-be-made government decision about whether to press ahead with the third runway at the airport. Heathrow is running out of space, so observers believe the government will endorse the plans despite opposition from environmentalists, London mayor Ken Livingstone, and local authorities across the capital. The aviation industry disagrees and Flying Matters, representing a coalition of companies and trade unions condemned the protest. "This action is misjudged and misdirected: aviation is responsible for two per cent of global carbon emissions and is growing at a slower global rate than power generation and industry," a spokesman said. "If they are serious about climate change they should engage in a proper debate about solutions that will make a real difference."
Laptop Sold on eBay Hid Confidential Home Office Disc
The Home Office has launched an investigation into how an optical disc holding confidential information was discovered hidden beneath the keyboard of a laptop bought on the online auction site eBay.
The disc was found by technicians when the computer was taken into a small IT repair company for service.
The laptop had been bought on eBay and taken to Leapfrog Computer repairs in Westhoughton, near Bolton, Greater Manchester, on Tuesday morning.
An engineer took the notebook apart and found a disc marked "Home Office Confidential" hidden beneath the keyboard. Lee Bevan, the managing director of LeapFrog Computers, said: "This seemed like just another IT repair ... the customer said he had bought it on eBay and seemed quite innocent. It was just an ordinary laptop and it was only when we opened up the keyboard that we found the disc - it had the words Home Office and Confidential written on it.
"The disc appeared to be hidden deliberately underneath the keyboard. We put the disc in the drive to see what it was, but it was encrypted.
"As soon as I saw it belonged to the Home Office I placed it in the company safe and called the police. Luckily, it has ended up in the right hands. The police were here most of the day examining the laptop and the disc."
A Home Office spokesman last night said that both the disc and the laptop were encrypted, suggesting that the computer also belonged to the department, although police have not confirmed this. He would not comment on how the laptop may have gone missing, nor on the type of information held on the disc.
The spokesman said: "We understand that encrypted IT equipment has been handed to Greater Manchester police. Both the laptop and the disc were encrypted, thus safeguarding any information that might be stored on them. Investigations are now under way. It would be inappropriate to comment further while they are ongoing."
A spokeswoman for Greater Manchester police said: "A laptop has been recovered. Inquiries are continuing."
The missing laptop and disc will be a further embarrassment to the government which has had to deal with a number of departments losing confidential information.
The personal details of 25 million child benefit claimants were lost when two compact discs containing the bank details and addresses of 9.5 million parents and the names, dates of birth and national insurance numbers of all 15.5 million children vanished after a junior employee of HM Revenue and Customs put them in the post, unrecorded and unregistered.
That was followed by the loss of thousands of learner drivers' details by a DVLA contractor, and at least 168,000 patients were affected by NHS trusts' loss of data.
Philharmonic Stirs Emotions in North Korea
Daniel J. Wakin
As the New York Philharmonic played the opening notes of “Arirang,” a beloved Korean folk song, a murmur rippled through the audience. Many in the audience perched forward in their seats.
The piccolo played a long, plaintive melody. Cymbals crashed, harp runs flew up, the violins soared. And tears began forming in the eyes of the staid audience, row upon row of men in dark suits, women in colorful high-waisted dresses called hanbok and all of them wearing pins with the likeness of Kim Il-sung, the nation’s founder.
And right there, the Philharmonic had them. The full-throated performance of a piece deeply resonant for both North and South Koreans ended the historic concert in this isolated nation on Tuesday in triumph.
On Wednesday, North Korea’s main state-controlled daily newspaper, Rodong Sinmun, gave a brief account of the concert, with a picture of the orchestra, on an inside page. Of Lorin Maazel, the Philharmonic’s music director, it said, “His performance was very sophisticated and sensitive.”
The audience applauded for more than five minutes, and orchestra members, some of them crying, waved. People in the seats cheered and waved back, reluctant to let the visitors leave.
“Was that an emotional experience!” said Jon Deak, a bass player, backstage moments after the concert had ended. “It’s an incredible joy and sadness and connection like I’ve never seen. They really opened their hearts to us.”
The “Arirang” rendition also proved moving for the orchestra’s eight members of Korean origin. “It brought tears to my eyes,” said Michelle Kim, a violinist whose parents moved from the North to Seoul, South Korea, during the Korean War.
The piece was part of a program carefully constructed to showcase the orchestra and its tradition. A State Department official who accompanied Zarin Mehta, the orchestra’s president, on a planning trip to Pyongyang, the North’s capital, last year suggested that “Arirang” be played, Mr. Mehta said.
The emotional setting took a turn away from the political theme that had dominated the visit, which began on Monday and ends on Wednesday, when the orchestra flies to Seoul.
It was the first time an American cultural organization had appeared here, and the largest contingent of United States citizens to appear since the Korean War. The trip has been suffused with political importance since North Korea’s invitation came to light last year. It was seen by some as an opening for warmer relations with the United States, which North Korea has long reviled.
The concert brought a “whole new dimension from what we expected,” Mr. Maazel told reporters afterward. “We just went out and did our thing, and we began to feel this warmth coming back.”
He suggested that there would be a bigger impact. “I think it’s going to do a great deal,” he said. “I was told 200 million people were watching. That’s important for the people who want relations to improve.” The concert was broadcast live in many nations, including in North Korea.
“If it does come to be seen in retrospect as a historical moment,” he added, “we will all be very proud.”
Still, there was little indication that the good will generated by the visit would affect a critical issue: North Korea’s nuclear program, and efforts to determine the extent of it. At a banquet following the concert, Song Sok-hwan, the vice-minister of culture, said: “All the members of the New York Philharmonic opened the hearts of the Korean people.” He called the concert “an important occasion to open a chapter of mutual understanding between the two countries.”
It did not appear that the country’s leader, Kim Jong-il, was present at the concert. High-ranking officials did attend, including the vice president of the Presidium of the Supreme People’s Assembly, the vice culture minister and the chairman of the Pyongyang People’s Committee, akin to mayor.
In Washington, on Tuesday, the White House played down the significance of the concert, while criticizing the North for failing to meet its commitments to disarm. Dana Perino, the White House press secretary, said the performance neither hurt nor helped American diplomatic efforts.
“At the end of the day, we consider this concert to be a concert,” Ms. Perino said, “and it’s not a diplomatic coup.”
At the outset, the sound of the American national anthem at the East Pyongyang Grand Theater was striking. The North Korean anthem came first, and the audience stood for both. The flags of both countries flanked the stage, which was separated from the audience by a bank of flowers. The players moved on to the prelude to Act III of Wagner’s “Lohengrin” and Dvorak’s “New World” Symphony.
Then Mr. Maazel introduced the next work, “American in Paris” by Gershwin. “Someday a composer may write a work titled ‘Americans in Pyongyang,’ ” he said. In Korean, he added, “Enjoy!” The audience, mostly stone-faced until then, grew slightly more animated.
For an encore, Mr. Maazel introduced the overture to “Candide” by Leonard Bernstein, which the orchestra played conductorless, in homage to Bernstein, a former Philharmonic music director.
The concert evoked other orchestra missions to repressive states, like the Boston Symphony Orchestra’s visit to the Soviet Union in 1956, followed soon after by a Philharmonic visit, and the Philadelphia Orchestra’s trip to China in 1973.
At a news conference earlier in the day, Mr. Maazel drew a distinction between Tuesday night’s concert and the Philharmonic’s visit to the Soviet Union.
“It showed Soviet citizens that they could have relations with foreign organizations and these organizations could come in the country freely,” he said. “But what the Soviets didn’t realize was this was a two-edged sword, because by doing so they allowed people from outside the country to interact with their own people, and to have an influence. It was so long lasting that eventually the people in power found themselves out of power” in a country that was a “global threat.”
“The Korean Peninsula is a very small area geographically,” Mr. Maazel said, “and has an entirely different role to play in the course of human events.” Drawing a parallel, he added, “would do a disservice to the people who live here and are trying to do their art and make a better world for themselves and all of us.”
Sheryl Gay Stolberg contributed reporting from Washington.
Station Says ‘60 Minutes’ Blackout Was Just Technical
A television station in Huntsville, Ala., offered viewers nothing but a black screen for 12 minutes Sunday night — at the exact time that the CBS News program “60 Minutes” was broadcasting a report about potential political skulduggery involving the former Bush administration official Karl Rove in the conviction of a former Democratic governor of the state.
The interruption raised suspicions among some viewers, especially Democratic backers of Don Siegelman, the former governor, that partisan political interests might be behind the blackout.
Even some CBS executives wondered initially about the reasons for the disruption, though the general manager of the station, WHNT-TV, denied any ulterior motives, and immediately offered the report in its entirety on the station’s newscasts Sunday and Monday nights, as well as on its Web site.
“We know what our license means to us,” said Stan Pylant, the chief executive at the station. “There were no political motives in this.”
Mr. Pylant blamed a signal receiver. “The receiver failed to pick up the video from CBS,” he said. The station had no problems picking up CBS for the half-hour before “60 Minutes” started. The network’s Sunday evening news was on. But Mr. Pylant said that as he watched at home he saw the signal break off just as “60 Minutes” started.
“I really hoped the Siegelman report would be the third one they aired,” he said. It was not. It was first. WHNT had promoted the report all week because of the obvious interest in Huntsville.
The report quoted political figures from both parties questioning the bribery conviction of Mr. Siegelman and specifically included a charge from a “Republican operative” in the state who said Mr. Rove had urged her to try to get compromising pictures of Mr. Siegelman.
The station is part of a group formerly owned by The New York Times Company, purchased last year by an investment company, Oak Hill Capital Partners. That firm is managed by Robert M. Bass, one of a group of wealthy brothers who have all been major contributors to George W. Bush.
The investment company does not manage the stations, however. That is done by a separate company, Local TV L.L.C. That company’s chief executive, Bobby Lawrence, has also been a substantial contributor to Republican political candidates, including Mr. Bush.
Mr. Pylant said no one in either company had said or done anything “to sabotage our signal.” He pointed out that Oak Hill owns and Local TV manages three other CBS stations — though not in Alabama — and nothing had gone wrong with “60 Minutes” at any of those stations.
“This was just a G.M.’s worst nightmare,” he said. “But we’re replaying it. We have had a crawl up telling people where they can see it.” He added, “Believe me, I can get higher ratings than by going to a black screen.”
Veteran CBS News Anchor Dan Rather Speaks Out on BBC Newsnight Tonight
The veteran CBS News anchor and reporter Dan Rather has for the first time attacked the climate of patriotism in the United States, saying it's stopping journalists asking tough questions. In an exclusive interview with BBC TWO's Newsnight tonight (Thursday 16 May), he admits he has held back from taking the Bush administration to task over the so-called war on terror.
Rather says: "It is an obscene comparison - you know I am not sure I like it - but you know there was a time in South Africa that people would put flaming tyres around people's necks if they dissented. And in some ways the fear is that you will be necklaced here, you will have a flaming tyre of lack of patriotism put around your neck. Now it is that fear that keeps journalists from asking the toughest of the tough questions, and to continue to bore in on the tough questions so often. And again, I am humbled to say, I do not except myself from this criticism."
Rather admits self-censorship: "What we are talking about here - whether one wants to recognise it or not, or call it by its proper name or not - is a form of self-censorship. It starts with a feeling of patriotism within oneself. It carries through with a certain knowledge that the country as a whole - and for all the right reasons - felt and continues to feel this surge of patriotism within themselves. And one finds oneself saying: 'I know the right question, but you know what? This is not exactly the right time to ask it'."
He tells Newsnight: "I worry that patriotism run amok will trample the very values that the country seeks to defend... In a constitutional republic, based on the principles of democracy such as ours, you simply cannot sustain warfare without the people at large understanding why we fight, how we fight, and have a sense of accountability to the very top."
He declares himself a patriot, but for him the essence of being American is being able to bring the government to account: "It's unpatriotic not to stand up, look them in the eye, and ask the questions they don't want to hear - they being those who have the responsibility, the ultimate responsibility in a society such as ours, of sending our sons and daughters, our husbands, wives, our blood, to face death, to take death. Now, in my position my view is not to ask the tough questions in this kind of environment is the height of lack of patriotism."
Rather is also stinging about the lack of access and information the Bush administration is giving news journalists over the war: "There has never been an American war, small or large, in which access has been so limited as this one.
"Limiting access, limiting information to cover the backsides of those who are in charge of the war, is extremely dangerous and cannot and should not be accepted. And I am sorry to say that up to and including the moment of this interview, that overwhelmingly it has been accepted by the American people. And the current administration revels in that, they relish that, and they take refuge in that.
"What's being done practically in real terms is in direct variance with the Pentagon's stated policy. The Pentagon stated policy is maximum access and maximum information consistent with national security."
Rather is dismissive about the new trend in American television - "militainment" - mass market reality shows about life in the military. The Pentagon has given unprecedented access to RJ Cutler to make Military Diaries for VH1, which airs later this month. It features service men and women talking personally about the music they listen to away from home, and includes exclusive footage of Operation Anaconda.
Rather says: "The belief runs so strong in both the political and military leadership of the current war effort that those who control the images will control public opinion. They realise what an entertainment-oriented society ours has become. Therefore one way of looking at it is quite natural, they would say to themselves: 'Hey, we've had the Hollywoodisation of the news, we have had the Hollywoodisation of almost everything else in society, why not the Hollywoodisation of the war?'
"And I want to say quietly but as forcefully as I can that I hope this doesn't go any further, it has gone too far already. I am appalled by it, I do think it is an outrage, this is a personal opinion."
RJ Cutler - the maker of the Oscar-nominated documentary, The War Room, on the 1992 Clinton campaign - responds: "I always think what we do is more real than conventional news coverage. I think that journalism has extraordinary merits and its place, but that the work of documentary filmmakers is really to get to the core of something both more dramatic and more human."
Other "militainment" TV shows include the upcoming Profiles From the Frontline by Jerry Bruckheimer for ABC and the CBS drama documentary JAG about life in the US Navy (which recently featured a military tribunal). CBS has already aired - and pulled - the reality TV show American Fighter Pilot.
Late-Night TV Satires Become Online Hits
The worst-kept secret in Hollywood on Oscar night was whom Jimmy Kimmel was sleeping with.
Nevertheless, a satiric video in which Mr. Kimmel, the host of the ABC late-night talk show “Jimmy Kimmel Live,” talks enthusiastically — jokingly, we are led to believe — about his sexual relationship with Ben Affleck, has been a huge hit online since it was first shown on Sunday during Mr. Kimmel’s post-Oscar broadcast.
As of Tuesday afternoon, the four-minute video had been viewed more than two million times on YouTube. It has also been prominently displayed on the broadcast network’s home page, ABC.com.
The “relationship” has not been a secret since at least Feb. 15, when The New York Post reported that Mr. Kimmel was preparing a star-studded video, reminiscent of “We Are the World,” as a reply to a similar video presented on his show last month by the comedian Sarah Silverman.
Ms. Silverman, who is Mr. Kimmel’s longtime girlfriend, unveiled her video, in which she confesses that she has been sleeping with Matt Damon, on Mr. Kimmel’s fifth-anniversary show on Jan. 31. Iterations of that video have been viewed more than eight million times on YouTube.
The Matt Damon angle originated from a joke that was introduced more than three years ago by Mr. Kimmel as a throwaway line. One night, discouraged by what he described as a sub-par show with guests who “weren’t what you would call A-list celebrities,” he signed off by telling the audience that he was sorry that he had run out of time and that Matt Damon would have to come back on another night.
After Ms. Silverman revealed that she was hooking up with Mr. Damon — everywhere, it seemed, and all the time — Mr. Kimmel vowed to take his revenge. “You take something I love from me,” he vowed, “I’m gonna take something you love from you.” Most of the lyrics of Mr. Kimmel’s and Ms. Silverman’s songs are too graphic to be repeated here. One vulgar word describing the coital relations between, on the one bed, Ms. Silverman and Mr. Damon, and on the other, Mr. Kimmel and Mr. Affleck, was repeatedly bleeped out for the broadcast of each video.
Several scenes from the videos also required pixelation.
In a telephone interview on Tuesday, Mr. Kimmel said that the most difficult part of the project was arranging the schedules of the stars featured in his video — they included, in addition to Mr. Affleck, Brad Pitt, Harrison Ford, Cameron Diaz, Don Cheadle, Robin Williams, Josh Groban and Huey Lewis.
“Every once in a while Hollywood rallies itself for a worthy cause,” Mr. Kimmel said. “We saw that with the ‘We Are the World’ video, with ‘USA for Africa’ and after 9/11. This is just the next natural step in that progression.”
(A number of the stars had ABC ties, which probably eased some of the logistics. Those included Christina Applegate, star of “Samantha Who?”; Rebecca Romijn, of “Ugly Betty”; and Dominic Monaghan of “Lost”; in addition to Mr. Ford, who is the longtime partner of Calista Flockhart, star of “Brothers & Sisters.”)
The gaggle of celebrities was wrangled by Jill Leiderman, an executive producer of “Jimmy Kimmel Live,” who also performed the not-insignificant task of explaining the premise of the enterprise to the various stars — who, while certainly regular viewers of Mr. Kimmel’s show, might have been at a Hollywood premiere or volunteering at a soup kitchen on the night Ms. Silverman’s video was first broadcast.
The music was written by Mr. Kimmel’s music director and bandleader, Cleto Escobedo III, Mr. Kimmel said. Also contributing to the song lyrics and the dramatic content were his brother, Jonathan Kimmel, who is a writer for “South Park,” as well as the writing staff of “Jimmy Kimmel Live.”
Ms. Silverman has said, and Mr. Kimmel confirmed, that her song and video were written before the beginning of the writers’ strike because it was planned for broadcast on his show on Nov. 13, his 40th birthday. But planning for that broadcast was interrupted by the strike, so the video was instead shown on his fifth-anniversary show in January.
Mr. Kimmel said his video was recorded last Wednesday and Thursday. Members of the Writers Guild of America voted on Feb. 12 to end the strike.
While the video was edited for presentation on a television show that is shown after midnight in most markets, it — and its not-too-disguised premise — is now prominently featured on ABC’s Internet home page. An unsuspecting visitor to the site will be introduced to the video’s not-too-subtle premise automatically, because the site begins showing video clips without prompting once the home page is loaded.
The video also includes pictures of Ms. Silverman with vulgar insults scrawled across them — again, words that cannot be reprinted here and, presumably, would not appear on most Web sites affiliated with ABC’s corporate parent, the Walt Disney Company.
Karen Hobson, a spokeswoman for ABC’s digital division, said that any material previously vetted through the network’s standards and practices department is automatically approved for use on the Web site. She said the Web site did not differentiate, however, between content approved for viewing on television after midnight and that intended to be shown in prime time, because the average age of users of the ABC Web site is over 30. Other networks have wrestled with the same issues. Ms. Hobson noted that NBC.com last year posted an unedited version of a vulgar parody music video featuring Justin Timberlake and Andy Samberg that, in edited form, appeared on “Saturday Night Live.”
Regarding ABC’s ties to Disney she said: “We’re not talking about Disney.com. This is a different brand.”
Suitors Are Set to Say to Leno, Long Live King
The Jay Leno chase is on.
Four years ago, NBC made the comedian the lame-duck host of “The Tonight Show,” announcing with fanfare that he would be succeeded by Conan O’Brien in 2009.
Today, Mr. Leno is still the champion of late-night ratings, with no apparent desire to do anything else but continue on top. “What I do,” he has said on several occasions to colleagues, “is tell jokes at 11:30 at night.”
And so, nearly two years before he can officially be courted, suitors including two networks, ABC and Fox, and at least one television studio, Sony Pictures Television, are beginning to circle, doing everything they legally can to make sure Mr. Leno knows that they will make it possible for him to continue doing just that.
Senior executives at ABC and Fox said that their networks had discreetly gotten the message to Mr. Leno that they were waiting eagerly for the time when they would be able to make official overtures. NBC Universal, meanwhile, has repeatedly expressed its intention to retain Mr. Leno with a still-undisclosed plan for a new program.
Sony Pictures Television has made an approach through intermediaries to let Mr. Leno and his representatives know that as soon as he is allowed to discuss his next move, the studio will make him a rich offer for a syndicated late-night show that would make him the highest-paid host in late-night television, put his name on a new theater on the Sony lot and give him a financial interest in Sony music artists who appear on his show.
Executives who have heard the details of the plan said the move was Sony’s effort to stake a flag in the ground, knowing how intense the pursuit of Mr. Leno was likely to be in coming months.
In a series of interviews here, executives on several sides of the courtship of Mr. Leno outlined possible plans for his future. They all asked to speak anonymously because they are not allowed to negotiate with Mr. Leno until November 2009, when a negotiating window will open up in Mr. Leno’s deal with NBC.
Executives who know the details of his contract said Mr. Leno would remain attached to NBC through the end of 2009 even though he probably would not be on the air for the last six months of the contract. Mr. Leno’s contract is estimated to pay him about $25 million a year — which is less than David Letterman’s, which pays him more than $30 million. “Jay will of course honor his contract obligations to NBC,” said Kenneth Ziffren, Mr. Leno’s lawyer. (Mr. Leno works without a formal deal with an agent or manager.) “Jay isn’t talking to anyone about anything and won’t be until it’s contractually proper,” Mr. Ziffren said.
In 2004, when they established a plan for the network’s late-night future, NBC executives most likely did not expect to find themselves facing the prospect of losing another incumbent late-night star to a competitor. That happened in the early 1990s when Mr. Letterman defected to CBS after Mr. Leno won the battle to succeed Johnny Carson.
Instead, the announcement of the five-year transition from Mr. Leno to Mr. O’Brien in 2009 cut off efforts by other networks to steal away Mr. O’Brien, whose “Late Night” appears on NBC after “Tonight,” and secured five more years with both Mr. Leno and Mr. O’Brien in the NBC fold.
But if the expectations at NBC had been that Mr. Leno, as he approached 60, would be showing signs of slackening in popularity, he has defied them, winning in the ratings virtually every night, even during the recent three-month writers’ strike. Mr. Leno’s ratings dominance even without writers was noted throughout the television business, and only heightened the already intense curiosity surrounding his next move.
Mr. Letterman is signed at CBS through 2010.
The terms of Mr. Leno’s contract, as well as the tentative plan for how and when Mr. O’Brien will step in to replace him on “Tonight,” have set up a sequence of events that will have both comedians off the air in 2009 for extended periods of time.
Executives close to the planning said the expectation now was that Mr. O’Brien would leave “Late Night” next January, allowing him five months to reshape his show for the transition from New York to Los Angeles and the earlier time period of “Tonight.”
NBC has begun construction on a new studio for “Tonight,” as well as offices for Mr. O’Brien’s staff, on its Universal lot here. Several executives predicted that NBC would use the months Mr. O’Brien will be off the air to introduce his successor, widely expected to be Jimmy Fallon, the former “Saturday Night Live” cast member. Mr. Fallon is the favorite of Lorne Michaels, the “Saturday Night Live” producer who had success in choosing the unknown Mr. O’Brien in 1993 to succeed Mr. Letterman and who will again be involved in the selection of the new host of “Late Night.” Moving into the show next February would mean Mr. Fallon could benefit from the lead-ins from Mr. Leno’s last months on “Tonight.”
But the terms of NBC’s contract also mean Mr. Leno could not return to the air anywhere else until January 2010. That would give Mr. O’Brien an extended period on “Tonight” without facing competition from Mr. Leno.
“The Tonight Show” earns an estimated $100 million a year. Mr. Leno, who turns 58 in April, has kept his intentions for his post-“Tonight” career to himself, declining any comment about what he might choose to do after his contract expires. His friends and associates have speculated that he could be looking for some way to make NBC regret asking him to make way for Mr. O’Brien — though Mr. Leno publicly has been nothing but supportive of Mr. O’Brien.
As a guest last month on another late-night show, “Jimmy Kimmel Live” on ABC, Mr. Leno declared his intention to go through with the move.
That comment countered what had become rampant speculation that NBC might reconsider at the last minute and ask Mr. Leno to stay on at “Tonight.” But NBC executives, including the chief executive of NBC Universal, Jeff Zucker, have reaffirmed their commitment to Mr. O’Brien. And if they did change their minds, they would owe Mr. O’Brien a penalty payment: an estimated $45 million.
One of Mr. Leno’s potential suitors said, “I expect money will play a secondary role to revenge and Jay will look to prove to everybody that NBC was wrong.”
Several of those trying to guess Mr. Leno’s next move suggested that motivation would be one of many reasons why ABC enjoys the best chance to land him. That network could abandon its “Nightline” news program at 11:35 p.m. to give Mr. Leno a show that could go directly against “Tonight.” Fox, in contrast, would offer him an 11 p.m. slot.
Executives at Fox, though, say that network’s pitch to Mr. Leno will use its recent prime-time dominance as a selling point. Executives at ABC, meanwhile, say the network will stress its lineup of prime-time hits as well as the lead-in power of the late local news on its stations.
“Another performer would find getting a jump at 11 an advantage,” one Fox executive said. “But probably not Jay, who will want to be head to head against NBC.”
If Mr. Leno prefers a face-to-face network battle with NBC, that could make it difficult for Sony Pictures Television or any other syndicator to win out over network offers, executives say. But those who have heard the details of Sony’s plan say that by 2010, when Mr. Leno would finally return to the studio, networks will be further diminished as viewers get their programming from a wider array of sources.
Sony also has the backing of its chief executive, Howard Stringer, who, when he held a similar position at CBS, was in the middle of the last late-night roundelay, wooing Mr. Leno with a vintage motorcycle, which led to NBC’s decision to commit to him over Mr. Letterman — which in turn led to Mr. Stringer’s landing Mr. Letterman for CBS.
The president of Sony Television, Steve Mosko, declined to comment. But executives who have heard some of the details of Sony’s plans said the studio intended to throw a kitchen sink of proposals at Mr. Leno.
“When he walks on the lot, there’ll be a Yellow Brick Road to the Jay Leno Theater, which will sit at the centerpiece of the Sony lot,” said an executive who has seen the plans.
Sony is expected to promise Mr. Leno $40 million a year or more — the top salary in late night. The studio would also give him ownership, not just of his own show, but also of a second hourlong late-night show designed to follow Mr. Leno’s — a construction that Mr. Letterman already enjoys at CBS, with his “Late Show” and “The Late Late Show With Craig Ferguson.” (Mr. Leno does not own “Tonight.”)
The terms are not likely to drive off the competition for Mr. Leno’s services. Referring to the executives with ultimate control over ABC and Fox, one NBC executive said, “Bob Iger and Peter Chernin are camped out at Leno’s garage.”
No matter how elaborate their charm offensive may be, Mr. Leno cannot sign with anyone else until very late next year, and cannot be on the air anywhere until January 2010. That is not a lot of time to prepare a new show.
But perhaps not for Mr. Leno. “He could hire an executive producer and staff up,” said one executive who has worked with him. “He’d probably be ready to go after a weekend.”
Oscars Draw Record Low TV Ratings
Films about psychopaths, greedy oilmen and corrupt lawyers failed to click with moviegoers, and they proved a turnoff to U.S. television viewers as this year's Oscars show hit record low ratings.
The 80th anniversary edition of the Academy Awards, dominated by European stars and films that played poorly at the box office, averaged 32 million viewers, entering the record books on Monday as the least watched Oscar telecast ever.
The national viewer tally reported by Nielsen Media Research for ABC's live, three-hour-plus telecast on Sunday was down about 1 million viewers from the previous record low, set in 2003 when the Oscars were presented just after the U.S.-led invasion of Iraq had begun.
The 2003 program was hosted by Steve Martin and featured the musical "Chicago" as best picture.
Sunday's broadcast, with comedian Jon Stewart making his second appearance as Oscar host, now ranks as the smallest U.S. TV audience for the Oscars since 1974, when actual viewer totals first became available.
The household rating, 18.7, also marks the lowest level by that measure going back to the first televised Oscars in 1953.
By contrast, the most watched Oscar broadcast on record was the 1998 show, when the box-office blockbuster "Titanic" sailed off with a record-tying 11 awards, including the prize for best picture. Some 55 million Americans tuned in that year.
Even that figure pales in comparison to the audience that tunes in annually to the National Football League championship Super Bowl game, which this year drew 97.5 million viewers.
"American Idol," the most popular U.S. series, averages 30 million viewers a week with its Tuesday night broadcast. It debuted this season with 33.5 million.
Low Ratings, No Surprise
The weak ratings for Sunday's Oscar broadcast came as no surprise given that many movies showcased this year -- "There Will Be Blood," "Michael Clayton," "Sweeney Todd: The Demon Barber of Fleet Street," -- generated little enthusiasm among moviegoers despite critical raves.
The night's big winner, the grim, violent crime drama "No Country For Old Men," which claimed four awards including best picture and best drama, grossed a modest $64 million at the North American box office.
Only one movie among the five nominated for best picture, breakout comedy "Juno," crossed the $100 million box office market domestically. That film managed just one win for best original screenplay.
The Oscar ratings likely also suffered from the fact that all four acting awards this year went to European performers whose names are fairly obscure for American audiences and who appeared in movies that relatively few moviegoers saw.
The Oscars generally have drawn a bigger U.S. television audience in years when the big crowd pleasers at the multiplex, like "Titanic" and "The Lord of the Rings: The Return of the King," figured prominently in the awards race.
Oscar producers already were bracing for low ratings due to an overall viewership slump in network TV this broadcast season, exacerbated by a glut of reruns and reality shows triggered by the recently settled Hollywood writers strike.
Still, the Academy Awards show ranks as the year's highest-rated entertainment special and a cash cow for Walt Disney Co.'s ABC, which raked in an average of $1.8 million for each 30-second spot, up 7 percent from a year ago.
(Editing by Bob Tourtellotte and Stuart Grudgings)
New Line’s 40 Years of Reaching Brows High and Low
A. O. Scott
Four years ago, on the night before the Academy Awards, I found myself at the Beverly Hills home of Bob Shaye, the founder and co-chairman of New Line Cinema.
The annual New Line party chez Shaye was a popular stop on the pre-Oscars festivity circuit, and to an outsider the scene seemed to fit every stereotype of Hollywood power and the aspiration to it. There was the blue-chip contemporary art on the walls (“Is that a real Francis Bacon?” I heard someone ask); the panoramic views of the Los Angeles basin and the San Fernando Valley; the Wolfgang Puck-catered dinner; the endless parade of agents, executives, movie stars and aspirants to influence and fame.
Wasn’t that Richard Parsons of Time Warner? Is she Paris Hilton? Is that the guy who used to be on that TV show? And that must be his agent. It was like something from “The Player,” speaking of New Line releases.
This impression, however, was a bit misleading. Yes, it’s true that in February 2004, New Line Cinema was on top of the world, and Mr. Shaye and his colleagues, including his co-chairman, Michael Lynne, were riding high. The night after the party, to no one’s particular surprise, “The Lord of the Rings: Return of the King” swept every category in which it was nominated, collecting 11 Oscars, among them best picture, best director and best adapted screenplay. But New Line was hardly a typical blockbuster factory, the “Lord of the Rings” trilogy was not a typical franchise, and Bob Shaye was far from a standard studio boss.
And that is why New Line — which ceased to operate as a full-fledged studio on Thursday, when Time Warner announced that it would be folded into Warner Brothers and Mr. Shaye and Mr. Lynne would depart — will be missed. New Line was not a specialty division or a genre label. It went highbrow and low, sometimes playing for the niches and sometimes for the mass audience. It was an oddity and an anomaly.
Last year, in commemoration of its 40th anniversary, New Line put together a DVD sampler of some of its more memorable productions. It was handsomely bound and presented, but the impression was less of a catalog of masterpieces than a collection of betting slips, a compendium of gambles, hunches and long shots. “The Lord of the Rings” was the most successful of these. (Others included “Elf,” “Blow” and the “Austin Powers” trilogy.)
No other studio was willing to sink several hundred million dollars into the simultaneous production of three movies directed by an obscure New Zealander named Peter Jackson. And when New Line did just that, there were a lot of smirks and raised eyebrows in Hollywood.
As perhaps there are now, since schadenfreude is as essential to the health of the Hollywood body politic as Diet Coke. The triumph of the “Rings” was followed by a long losing streak, exacerbated by messy litigation over the spoils and the future of the Tolkien franchise. Mr. Shaye decided to dabble in directing, turning out a ghastly kiddie- magic movie called “The Last Mimzy.” It began to seem as if New Line’s days were numbered.
It’s not for me to argue the merits of the decision to snuff out New Line’s independence. The dissolution of one corporate entity by another is rarely an occasion for sentiment, except perhaps among stockholders. But New Line Cinema was a link between the smooth, conglomerated present and a gamier, more entrepreneurial past. Mr. Shaye may live like Hollywood royalty, but his roots are in New York retail and in the nervy, disreputable world of grindhouses and exploitation pictures.
He was the man who made the 1930s drug-scare propaganda movie “Reefer Madness” into a staple of the late-’60s campus counterculture. He picked up, on the cheap, North American rights to Bruce Lee movies, and he helped turn John Waters’s “Pink Flamingos” into a cult classic. And let’s not forget Freddy Krueger of the “Nightmare on Elm Street” series, or the Teenage Mutant Ninja Turtles.
Not a bad art collection, after all.
Facebook Film Ad Pulled Over Violence
A controversial online marketing campaign for the Universal Pictures thriller Untraceable has been pulled from Facebook and the video community Seesmic after concerns about the violence of its content.
The interactive marketing company Picture Production Company set up a promotional page on Facebook called "Kill With Me" ahead of the film's UK launch this Friday.
Launched five days ago, the Kill With Me page has been gradually revealing more and more of a visceral torture scene from the Untraceable movie to Facebook members.
The Kill With Me Facebook profile included the following text: "This guy is going to die. You want to see his stinking flesh burn and bleed and blacken? Until he's some twisted dead thing? This is what you want. And I've filmed it especially for you. The more fans I get, the more I'll show ..."
PPC's head of interactive, Dan Light, admitted the company had expected the campaign to be pulled from the social networking site, so had "other things in place".
According to Facebook policy, groups must clearly label and apply age filters to content that is for over-18s so that younger users cannot access it. Facebook does not allow content that is "hateful, threatening, or obscene".
PPC's stunt on Seesmic, the video messaging community, caused more alarm when an actor planted on the service briefly disappeared, and was then filmed by a video camera being bound, gagged and seemingly executed.
The interactive marketing company had told Seesmic's management in advance that it would be using the service, but a moderator based at the video community site's HQ in San Francisco attempted to call the police over the stunt.
Light said that both the clip and the fake murder were very violent, but said the agency wanted to push the boundaries of what is acceptable in an online community with the Untraceable marketing campaign.
"There's that interesting question of whether people are desensitised to things on screen," he added. "They will watch these things, but won't say they watched them."
Users of social networking sites are often very protective of the spaces they create, which they see as intimate and personal areas for communication with their network.
The BBC recently clarified its internal policy on using photographs from social networking sites for news stories, and an earlier promotional stunt by the LonelyGirl15 project on YouTube angered some users who felt they had been misled.
"If we posted a trailer every hour we would be misusing it and would expect a backlash," said Light.
"But my view is that if you are entertaining or stimulating the user then you go some way towards earning the right for their attention."
MySpace Picks Harvard Scholars to Lead Task Force on Internet Safety
Leading Internet scholars at Harvard Law School will head a task force exploring the safety of users at MySpace and other popular online hangouts amid growing fears that youngsters have become targets of sexual predators.
The creation of the Internet Safety Technical Task Force is part of an agreement that MySpace, a unit of News Corp., reached with all attorneys general except Texas' in January.
Initial participants include leading Internet companies such as Google Inc., Microsoft Corp., Yahoo Inc., Time Warner Inc.'s AOL and MySpace rival Facebook, along with Internet access providers and nonprofit groups.
The group will have a broad mandate to explore technical ways to keep children safe - not only from sexual predators but also from online bullies and adult content. Procedures for verifying users' ages are expected to be among the task force's discussion.
Although MySpace was in charge of creating the group, naming its members and choosing Harvard's Berkman Center for Internet and Society to run it, the task force will be independent of MySpace effective Thursday, said John Palfrey, Berkman's executive director.
Sirius Posts Narrower Loss As Subscribers Surge
In light of a surge in subscriber numbers as well as lower costs, Sirius Satellite Radio narrowed its fourth-quarter loss in 2007. The satcaster is reporting a loss of $166.2 million, or 11 cents per share, compared with a loss of $245.6 million, or 17 cents per share, from the year before. Sirius also reported that it finished the quarter with 8.3 million subscribers, which is 2.3 million more than a year ago. Company revenue increased 29 percent to $249.8 million.
However, the matter of whether Sirius will be allowed to merge with XM still looms. Lingering uncertainty over the deal is likely to overshadow the better-than-expected fourth-quarter results, says Reuters, as the company's stock fell 2 percent in premarket trading.
"Unfortunately, we have not received our approval from the DOJ or the FCC," Sirius CEO Mel Karmazin said on a conference call, according to Reuters. "We are optimistic that we will hear favorable information from them in the near future." Karmazin added that Sirius will refrain from forecasting 2008 results until regulators approve the pending deal.
XM Satellite Radio Narrows Loss in 4Q
XM Satellite Radio Holdings Inc. said Thursday that it narrowed its fourth-quarter loss thanks to a 20 percent jump in revenue and a favorable comparison to last year, when the company took a significant write-down.
The Washington-based company reported a loss of $239 million, or 78 cents per share, compared with a loss of $263 million, or 90 cents per share, in the year-ago quarter.
The latest quarter included charges of 25 cents per share related to a legal settlement and costs associated with XM's pending acquisition by smaller rival Sirius Satellite Radio Inc.
Excluding those charges, results beat the average analyst estimate of a 63 cent-per-share loss, according to Thomson Financial.
Fourth-quarter results in 2006 were weighed down by a one-time charge of $57.6 million to reflect the declining value of XM's stake in Canadian Satellite Radio.
In morning trading, its shares dropped 7 cents to $12.37.
XM and Sirius announced plans to merge more than a year ago, and had hoped to have the $5 billion deal completed by the end of 2007. Shareholders have approved the merger, but regulators at the Justice Department and the Federal Communications Commission have not finished their reviews.
Opponents of the deal say it will create a monopoly in satellite radio service, but the companies argue they will still face brisk competition from other forms of audio entertainment, including free commercial radio.
XM's quarterly revenue jumped 20 percent to $307.7 million from $257.1 million, topping an analyst forecast of $303.8 million.
The company remains the largest satellite radio service, and it finished the year with 9.03 million subscribers. But subscriber growth slowed in 2007 compared to 2006, and Sirius continued to narrow the gap.
XM added 1.4 million net subscribers in 2007, compared with 1.7 million in 2006. Meanwhile, Sirius added 2.3 million subscribers in 2007, finishing the year with 8.3 million.
For the year, XM reported a loss of $682.3 million, or $2.22 a share. That's a 7 percent improvement over 2006, when XM lost $731.7 million, or $2.70 a share.
Annual revenue in 2007 was $1.14 billion, a 22 percent improvement over 2006 revenue of $933 million.
Sony Leery of the Eee PC?
As a computer, the Eee PC from Asus is intended to be the opposite of intimidating--it's made for children after all. But its potential as a market force is apparently giving chills to its larger industry peers.
Here at Sony's annual Open House event, the senior vice president of Sony's IT product division said the tiny $299 notebook could potentially shift the entire notebook industry.
"If (the Eee PC from) Asus starts to do well, we are all in trouble. That's just a race to the bottom," said Mike Abary.
He means that if mainstream PC buyers start to find their needs met by a lightweight, simply featured, inexpensive portable, it's likely to impel all of the major players in the industry to pile on by lowering their prices. And that's in an industry with already low margins for retailers and manufacturers.
If the Eee PC just catches on with Linux developers, enthusiasts, and the tech-savvy early adopter crowd, that's fine by him. "But if mainstream buyers buy it, then, whoa," Abary said.
So should Sony, Hewlett-Packard, Dell, and their ilk be frightened of Asus? So far, the version of the Eee PC in the U.S. only comes with Linux, but that will soon change. Japan got its Windows XP version last month, and the U.S. should be getting one in the next few weeks.
And even with just the open-source version available stateside, the numbers say it's striking a nerve: the company reported moving 350,000 units of the Eee in the first quarter it was available last fall.
Sony's not the only one taking notice. Acer is reportedly readying an Eee competitor, and the yet-to-be-officially-announced HP Compaq 2133 was developed with the Eee firmly in mind.
As for Sony, though it did start offering lower-priced notebooks last year in the $800 range, don't expect the company to go any lower just yet. Abary says so far the company is just "keeping an eye" on the Eee's activity.
Sony has always positioned itself as a premium brand, and will continue to do so, as was evident in the rest of its PC offerings on show here.
The company has been at the forefront of the uber-personalization trend that's taken over the notebook industry. By charging more, the company has more leeway with the options it can offer customers. It began doing colored laptops three years ago and is now branching out into personalized patterns, and--as suspected--textures.
People who buy their Vaio at the SonyStyle store online have as many as 36 different choices for personalizing their laptop. The Graphic Splash line has three different patterns and multiple color combinations, as well as a choice of font on the keyboard. "That's what consumers really, really want," Abary told a gathering of reporters earlier in the day.
Sony also said that Vaio as a brand sells particularly well with women, which could also explain Sony's increased emphasis on personalization. Though 80 percent of notebooks sold industrywide are owned by men, Abary estimated, Vaios' percentage ownership by men is in the low 70s, indicating a higher-than-average ownership rate by women.
But it's not all about appearances. Sony is also pushing its lineup of home theater PCs, which are not primary PCs, but still start at $1,699.
Though Sony had earlier indicated that its TP home theater PC (that white round one), didn't sell particularly well last year, it still decided to bring it back for Round 2. It's still round, but now it's got some high-definition guts. Sony beefed it up with a Blu-ray Disc player, Intel Penryn processors, and two Cable Card tuners. It's also now available in black for $1,699 to $3,000.
Though it was released in the fall, the all-in-one PC from Sony, the LT, is part of the same strategy. Again, though it's a PC like Gateway's One or Dell's XPS One, Sony positions the product as a TV with PC capability instead of the other way around. Doing so is likely to lure more high-end customers, with the LT's Bravia-like bezel echoing Sony's line of LCD TVs.
The Future Was Then
The times have caught up with that erstwhile icon of modernity, the Sharper Image
For all of its flaws as a business, nobody can accuse the Sharper Image of over-promising. The name explains precisely what it can do for you. Spend money here, it says, and we will improve the way you are perceived. You want an actual enhancement? Try the Greater Substance store, if one opens up. Until then, drop some money in this gleaming gadgetorium and bask in the regard of your awestruck friends.
Until last week, this seemed like a surprisingly durable premise. Then the company filed for Chapter 11 bankruptcy protection and announced it would close 90 of its roughly 180 stores "as soon as possible." Two days ago, it added to the air of doom by announcing that its shares, which were recently trading for a mere 45 cents, would be delisted from the Nasdaq.
But where will I kill time while my wife shops, you hear a few million husbands murmuring to themselves. Fair question. The company is likely to remain alive in some kind of dramatically altered shape, analysts say. (A few messages left at the company's headquarters in San Francisco were not returned.) But you don't need to stick the Grill/Fork Thermometer -- which "measures the internal temperature of chicken, beef, pork and fish" -- into the Sharper Image to grasp the obvious: The place, as we've known it, is done.
What are we losing? A world of luminescent safety leashes, hideaway gyms, telescoping ladders -- an entire chain dedicated to the idea of streamlining your life by .002 percent. The Sharper Image is a place that sells a lighted nose-hair trimmer, which is to say it targets men who already own a regular nose hair trimmer in the hopes they'll think it's worth $40 to get a better look up their nostrils. Bought a fine bottle of wine? Why throw it in a bucket of ice when for $99.95 you can treat yourself to a "professional wine chiller" with 33 built-in settings, and chill that Chablis to its optimum temperature.
This was a Sharper Image forte: taking the guesswork out of realms in which you never knew you were guessing. The ideal product is a contraption that stands this close to the realm of the purely inane. Which is to say that although the product mix now includes hair dryers and "miracle food storage" containers, it's basically a store for men. Especially men in desperate need of a gift, especially a gift for a man -- arguably the most desperate creature in all of giftdom. The store is filled with objects that say, "I had no idea what to get you, but I spent some real money."
Here's a NeatReceipts Scanalizer 3.0. Enjoy.
Of course, if you don't have your heart set on a Scanalizer, odds are good you won't actually use it. For countless Sharper Image products, there is the sad and inevitable migration that starts in the office, moves to a closet, then to the attic and finally, a year or two later, to the front lawn for a yard sale, where the $50 desktop power shredder is priced to move at $15. It waits next to an old adding machine and a red plaid thermos until a neighbor picks it up from a table ("Does this thing work?") and the journey starts all over again, at a different address, with a fresh set of batteries.
Given that the product mix hasn't changed much since the store debuted in 1977, why is the Sharper Image hurting now? Certainly, this is a lousy time to be in the luxury gizmo business. As market researcher Jack Plunkett put it in a phone interview: "If you're suffering economically, how important is it to run out and buy a $3,000 vibrating chair?"
The company also made a bunch of strategic missteps. It relied too heavily on blockbuster products, like the Razor scooter. It sold a ton of Ionic Breeze air purifiers, which Consumer Reports panned so viciously in 2002 that a class action lawsuit was filed against Sharper Image for refunds. (A judge's rejection of a settlement to that lawsuit -- she didn't like the $19 store coupon proposed for each Ionic owner -- seemed to precipitate the Chapter 11 filing.)
It doesn't help that so much of the stuff at Sharper Image is now sold all over the place, in Best Buys, through hundreds of online stores. Maybe there was a time when customers would spend $1,000 for a Panasonic camcorder that can be acquired through B&H Photo for $785. (Yes, that's a real, present-day example.) But not anymore.
The Sharper Image also has a well-funded rival in Brookstone, which was acquired three years ago by an Asian company that specializes in high-end massage chairs. Exactly how Brookstone is faring isn't clear, because Osim, its new owner, is privately held. But those massage chairs are a high-margin item.
"So in addition to other problems, the Sharper Image's biggest competitor is attacking one of their core categories," says Scott Tilghman of Soleil Securities-Hudson Square Research. "That hurt."
But even if the Sharper Image had sidestepped all of these bear traps, it was headed for trouble. Once, a visit to the store seemed like a trip to the future's very own showroom, or a museum exhibit called "What Is Next." Brushed aluminum was the surface of choice, back when only very cool stuff had a brushed aluminum surface. Staffers dressed in head-to-toe black and looked like they could serve drinks on the space station.
Well, they looked like that in 1984. Today, they could be baristas.
It's not just that the idea of the future as curated by the Sharper Image now seems hopelessly dated. (Although ask any 22-year-old about the store and get ready for an eye roll.) It's that the number of curators of the future has exploded. If you want to stoke your gadget lust, you head to Gizmodo or Engadget, two of roughly 74 million gadget blogs. Or you head to the Apple Store, or Circuit City.
Even for the chain that brought us the Equalizer Foot Pro Massager, it's hard to keep your image sharp in that much company.
MediaDefender Parent Company Facing Liquidation
After suffering humiliation at the hands of a hacker in 2007, the future of anti-piracy company MediaDefender is in serious doubt. Its parent company, ARTISTdirect, has called in a team of specialists to “assist in the exploration of strategic alternatives.” That’ll be alternatives to liquidation, then.
In early 2005, online music business ARTISTdirect saw its stock being traded at just a cent. Then in mid 2005, it paid MediaDefender founders, Randy Saaf and Octavio Herrera, $43m for their anti-piracy company and the stock rocketed to beyond $3.00. Smiles all round - but not for long.
In September 2007, disaster struck. MediaDefender had gathered many enemies due to their anti-p2p activities. One of them decided to teach the company a lesson by hacking into their systems and leaking their internal emails and closest secrets to the Internet. The effect on the company and its operations was dramatic.
Within days, seemingly everyone knew about the MediaDefender leak and inevitably, news started filtering through to MediaDefender’s customer base. With the company’s secrets out in the open, and its operations virtually shut down, people started asking if it was possible for the business to continue and if it did, how effective could it be? MediaDefender’s customers weren’t happy, and the company was forced to issue $600,000 in credits to them by way of compensation for a total lack of results in the 3 months following the leak. But this was just the beginning.
In a SEC filing, the financial damage started to become clear. As a result of the hacking, by November 2007 MediaDefender had lost a massive $825,000 - and growing. Before the email leak, stock was around the $2.25 mark. Three months later in December 2007, things were starting to look bleak as stock plummeted to $0.63.
With the stock sitting today at $0.51, ARTISTdirect needed to take some drastic action - and they have, calling in Los Angeles based financial services company, Salem Partners LLC, to try and sort out the mess. Salem Partners are to explore “strategic alternatives” for the business (which is currently $30m+ in debt), such as restructuring, merger or sale. For this service they will be rewarded well: Salem are on a $50,000 a month retainer for the first 4 months with numerous six and seven-figure bonuses woven in to the rates, dependent on the deals they manage to do.
They could decide to sell MediaDefender off as a separate entity, so it’s possible that Randy and Octavio would like to buy their old business back. One thing is certain - it won’t fetch anything near the $43m they sold it for. The pair currently pick up $350k a year each at MediaDefender so they’re not quite at rock-bottom yet, but would they even want it back after last year’s disaster? Time will tell.
Potential buyers will probably choose to wait a little. According to a source, ARTISTDirect’s current FORM 10-QSB financial statement is not online, but it should have been posted to SEC by Feb 14th 2007. Looks like the worst of the financial pain hasn’t even been reported yet.
US, Canadian Agencies Seize Counterfeit Gear
U.S. and Canadian law enforcement authorities have seized more than US$78 million worth of counterfeit Cisco Systems networking equipment in an ongoing investigation into imports from China, the U.S. Department of Justice and other agencies announced Friday.
The coordinated operation, begun in 2005, has resulted in more than 400 seizures of Cisco hardware and labels, the DOJ said in a news release. The operation targets the illegal importation and sale of counterfeit network hardware such as routers, switches and network cards. One of the operation's goals is to protect the public from network infrastructure failures associated with the counterfeits, the DOJ said.
"Counterfeit network hardware entering the marketplace raises significant public safety concerns and must be stopped," Assistant Attorney General Alice Fisher of the DOJ's Criminal Division, said in a statement. "It is critically important that network administrators in both private sector and government perform due diligence in order to prevent counterfeit hardware from being installed on their networks."
The agencies that worked together on the operation included the U.S. Federal Bureau of Investigation's Cyber Division, U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP) and the Royal Canadian Mounted Police (RCMP).
The FBI named its portion of this ongoing initiative Operation Cisco Raider, an investigation involving nine FBI field offices and help from several other agencies. Over the last two years, the FBI's operation has resulted in 36 search warrants that identified about 3,500 counterfeit network components with a retail value of more than $3.5 million, the DOJ said. The FBI's work has led to 10 convictions and $1.7 million in restitution.
ICE and CBP have opened 28 investigations in 17 field offices since 2005. ICE has conducted 115 seizures of counterfeit Cisco products, with an estimated retail value of $20.4 million. ICE's investigation have lead to six indictments and four felony convictions. CBP has made 373 seizures of counterfeit Cisco hardware since 2005, and 40 seizures of Cisco labels for counterfeit products.
ICE and CBP seized more than 74,000 counterfeit Cisco networking products and labels with a retail value of more than $73 million.
On Friday in Toronto, the RCMP charged two people and a company with distributing large quantities of counterfeit network components to companies in the U.S. through the Internet. The RCMP seized approximately 1,600 pieces of counterfeit network hardware with an estimated value of $2 million.
Other recent cases:
-- On Feb. 14, Todd Richard, 33, was sentenced to 36 months in prison and ordered to pay $208,440 in restitution to Cisco by the U.S. District Court for the Northern District of Georgia. From late 2003 to early 2007, Richard imported shipments of counterfeit Cisco computer components from China, and separate shipments of counterfeit Cisco labels. He then affixed the fake labels to the fake components and sold the products on eBay, the DOJ said.
Richard sold more $1 million worth of counterfeit Cisco products, the DOJ said.
--On Jan. 4, a grand jury in U.S. District Court for the Southern District of Texas indicted Michael Edman, 36, and his brother Robert Edman, 28, for trafficking in counterfeit Cisco products. The indictment alleges that the Edmans purchased and imported the counterfeit computer network hardware from an individual in China, then selling the products to retailers across the U.S. The Edmans shipped some of the counterfeit hardware directly to the U.S. Marine Corps, Air Force, Federal Aviation Administration, FBI, defense contractors, universities and financial institutions, according to the indictment. These organizations had purchased the product from a computer retailer serving as a middleman, which in turn purchased the products from the Edmans.
City Raids ‘Counterfeit Triangle,’ Shutting 32 Storefronts
Mayor Michael R. Bloomberg showed off a sign saying “Closed” as he stood amid piles of seized counterfeit goods inside Chinatown’s New Land shopping center after a news conference on Tuesday. (Photo: Bebeto Matthews/Associated Press)
City investigators raided dozens of storefronts on a triangular block in Chinatown this morning in what officials described as a major seizing of counterfeit goods — including fake Rolex, Coach, Prada and Gucci products — with an estimated street value of more than $1 million. Mayor Michael R. Bloomberg and Police Commissioner Raymond W. Kelly, who announced the raids, also said that the city had obtained a temporary restraining order to shut the storefronts.
In a strongly worded news release, the officials called the block, which is bounded by Canal Street, Walker Street and Centre Street, Counterfeit Triangle. The owner of the property, which has 32 separate storefronts, will be required “to replace the counterfeit vendors with legitimate businesses and pay a substantial fine to the city before the buildings can be reopened” under the terms of a court order obtained by the city against the owner.
“Each corner of this triangle flouted the law and lowered the quality of life in the area,” said Shari C. Hyman, director of the Mayor’s Office of Special Enforcement, which addresses quality-of-life issues like adult businesses, night clubs, counterfeiting bazaars and illegal conversions of apartment buildings into hotels. “Using nuisance abatement laws, we will make sure this activity is gone for good.”
The owner of the property was identified as the Vincent Terranova estate; its trustees were identified as Robert Becht, Edward T. Borg, George Terranova and Carl Terranova. The stores will be padlocked, and in addition to the stores selling counterfeit goods, an illegal massage parlor was closed today and illegal signs were removed, officials said. The order includes a $1,000-a-day fine dating to early January, when the violations were first reported.
In a statement, Terranova Properties, the managing agent for the property owner, said: “We have been working together with New York City and will continue to cooperate to the utmost degree with the New York City Police Department and the mayor’s office to remedy this situation on Canal Street.” The employee who read the statement, Leah Terranova, declined to answer further questions.
As part of the investigation, 42 undercover purchases were made in various storefronts. The investigation uncovered counterfeits of such brands as Coach, Gucci, Dolce & Gabbanna, Dior, Prada, Rolex, Fendi, Burberry, Calvin Klein, Dora the Explorer and Oakley. The building addresses in the “Counterfeit Triangle” that were raided today are 224–230 Canal Street; 232 Canal Street; 234–238 Canal Street; 106 Baxter Street; 112–116 Walker Street; 118 Walker Street; 120-124 Walker Street; and 152-156 Centre Street.
Several industry representatives applauded the raids.
“A tremendous thanks to Mayor Bloomberg and the Office of Special Enforcement for recognizing the pervasive crime of trademark counterfeiting and stepping up to the plate,” said Brian W. Brokate, a lawyer for Rolex. “Rolex applauds all of their efforts, particularly today’s raid and lawsuit.”
Julie Summersgill, a spokeswoman for NBC Universal, said in a statement: “This investigation should be a real wake up call to those selling counterfeit or pirated products that their illegal activity will not be ignored. Mayor Bloomberg, Commissioner Kelly and Special Enforcement Director Hyman have made a major commitment to shut down bootleggers. Counterfeiting and piracy has cost the New York City economy billions of dollars and thousands of good jobs, and we applaud the city for this bold action to curb the sale of illegal goods on the streets of New York.”
Christine Hauser contributed reporting.
Online Scrabble Craze Leaves Game Sellers at Loss for Words
The latest bane of office productivity is Scrabulous, a virtual knockoff of the Scrabble board game, with over 700,000 players a day and nearly three million registered users.
Fans of the game are obsessive. They play against friends, co-workers, family members and strangers, and many have several games going at once.
Everyone seems to love the online game — everyone, that is, except the companies that own the rights to Scrabble: Hasbro, which sells it in North America, and Mattel, which markets it everywhere else.
In January, they denounced Scrabulous as piracy and threatened legal action against its creators, two brothers in Calcutta named Rajat and Jayant Agarwalla who run a software development company. Both Hasbro and Mattel said they were hoping for a solution that would not force them to shut down the game.
Jayant Agarwalla, 21, said they did not create Scrabulous to make money, even though they now collect about $25,000 a month from online advertising. They just wanted to play Scrabble on their computers, and their favorite (unauthorized) site had started charging, he said.
“Our family has been playing the game for 50 years now,” he said, and received a set when the game first came out in India. His mother encouraged him and his 26-year-old brother, Rajat, to play as a learning tool, often with a dictionary by the board.
Scrabulous, which most users play on the Facebook social-networking site, has a board that looks just like Scrabble, and the same number of letter tiles with the same point values. Players can send invitations to others on Facebook or search for strangers to play with by posting messages.
There is no time limit for moves or games. Scrabulous keeps track of player statistics, and it does not allow fake words. It cannot, however, prevent players from cheating. One method is an unaffiliated online “helper” program, which generates a list of possible words based on the letters a user has.
Two game companies, RealNetworks of Seattle and Electronic Arts of Redwood City, Calif., say they have signed deals with Hasbro to create online versions of the company’s games. Both say their versions of Scrabble will be out shortly. But Scrabulous has already brought Scrabble a newfound virtual popularity that none of the game companies could have anticipated.
The threat of legal action has not gained the companies many admirers. Many Scrabulous fans, some of whom say they bought the board game for the first time after playing the online version on Facebook, call their approach heavy-handed and out of touch.
“The big thing that Hasbro is missing is that this is targeting a young audience that in general is not into board games,” said Venkat Koduru, the 15-year-old founder of the Facebook group “Save Scrabulous.”
Mr. Koduru had three Scrabulous games going as of Wednesday. He has gathered names of more than 1,000 people who have pledged to never buy a Scrabble board if Hasbro and Mattel shut down the online game.
Other groups devoted to saving the game have recently been created on Facebook, including “Please God, I Have So Little: Don’t Take Scrabulous Too.” Tens of thousands of fans have joined in, threatening to boycott Hasbro and Mattel products.
Iain Morgan, 34, a music producer in London who goes by the name Iain Easy, is playing 25 games of Scrabulous at the same time. The funny thing is, he said, he was never a fan of the original board game.
Mr. Morgan, who is the host of a Facebook group called “Help, I’m a Scrabulous Addict,” attributes the game’s popularity to “all these people who are bored at work in their office,” and added that the game keeps him in regular contact with his mother.
The legal questions concerning Scrabulous are complicated by the interests of the companies that own the rights to Scrabble.
Harold Zeitz, senior vice president for games at RealNetworks, said Friday that he was working closely with the Agarwalla brothers to bring the official Scrabble game to Facebook users.
Hasbro, meanwhile, said in a statement that Electronic Arts was planning to release an online version of Scrabble this spring. And Mattel, which signed a deal with RealNetworks last July, says that settling with the Agarwallas would set a bad precedent.
Neither Hasbro nor Mattel would disclose the number of Scrabble board games they have sold since Scrabulous started becoming popular last year. Hasbro estimates it sells one million to two million Scrabble boards a year in North America.
To some online marketing experts, Scrabulous represents a turning point for the board game industry, which has struggled for years to recreate itself as new generations turned alternatives like the Xbox and the GameBoy.
“If you’re Hasbro or Mattel, it isn’t in your interest to shut this down,” said Matt Mason, a consultant to the entertainment industry and author of “The Pirate’s Dilemma: How Youth Culture Is Reinventing Capitalism.”
The board game industry will be forced to adapt, Mr. Mason predicts, just as the music industry has adjusted to unauthorized downloads of songs. “If something’s already out there and proven, the companies should go with it,” he said.
For their part, Mattel and Hasbro are trying to protect their franchise as consumers turn increasingly to the Internet for entertainment. They say they consider Scrabble a crown jewel and are working on marketing campaigns for the game’s 60th anniversary this year. The plans include adding anniversary labels to Scrabble packaging and introducing a folding edition of the deluxe Scrabble board.
Scrabble began as Lexico in 1931, the creation of an out-of-work architect, Alfred Mosher Butts. He determined the frequency of each letter in the game and its value by reviewing the front page of The New York Times. His patent was denied, and it was 17 years before he found a manufacturer, which renamed the game Scrabble.
It took many more years before Scrabble became popular, thanks in part to a Macy’s chairman who was a fan, according to the game’s official history.
The Scrabble brand in North America was passed from manufacturer to manufacturer. It landed with Hasbro in 1989. The British game maker J. W. Spear & Sons owned the rights outside North America until the company was bought by Mattel in 1994.
The board game has had a core group of close-knit, intense fans for decades. They attend tournaments, refer to amateurs as “living room players,” and memorize lists of two-letter words.
Until Scrabulous landed on Facebook, no one could have mistaken the game, which had only a few thousand users, for a fast-growing phenomenon.
The Agarwallas introduced their first Scrabble knockoff Web site, bingobinge.com, in August 2005, and renamed it Scrabulous.com a year later. In May 2007, one of the site’s users suggested they adapt the game as a Facebook application, and it took off.
After 25 years with the National Scrabble Association, John D. Williams Jr., the executive director, said he had seen numerous copyright infringements of Scrabble, but the Scrabulous program on Facebook was the most “widespread and intense.”
Dozens of other Web sites offer unauthorized versions of Scrabble, but most force users to play in real time or require clunky downloads to play.
“People believe it to be in the public domain, like chess,” Mr. Williams said. “The idea that Scrabble belongs to a corporation is something that people don’t or are unwilling to accept.”
The Agarwalla brothers are avid players themselves — Jayant had 14 Scrabulous games going as of Saturday, and Rajat was playing 19.
Jayant, who is responsible for the game’s player interface and customer support, said, “People rarely find time to sit down anymore with their family and friends, to invite people over, to prepare the tea and biscuits.”
Even though it is easy to cheat at Scrabulous, he says he thinks few players actually do. “You may be doing it for personal glory, but it really takes the fun out of the game,” he said.
Intellectual Property’s Social Value May Trump Copyright Law.
Jon Healey correctly points out that the debate over intellectual-property theft is complex because we are often dealing with "non-real properties." These properties cost nearly nothing to produce, and an infinite number of people can use the same property at the same time. And yet, we still want to treat them as if they were "real" property.
Significantly, some of these non-real properties have major effects on human welfare. Take, for example, the formula for "oral rehydration therapy," a mixture of salt, sugar and water. Although it could potentially be copyrighted, it has saved more lives in the Third World than almost anything else. The world is lucky that this formula is in the public domain, not copyrighted and subject to use charges that people who need it couldn't afford.
The present system treats these copyrighted works as a funny kind of real property with no carrying costs, taxes or significant fees. Without carrying costs, copyrights remain in force almost forever - even though, over time, the demand for the copyrighted material can fall to almost nothing. As the demand decreases, the value may remain, but it becomes effectively unavailable to, as the Constitution puts it, "promote the progress of science and useful arts." Witness all the copyrighted books, scientific journals, audio works and visual works that are out of print or otherwise unavailable because copyright law prevents the new, low-cost methods of distribution from being utilized.
In the scientific field, this has devastating effects on the advancement of human knowledge - which is just the opposite of the intent of copyright law.
As a member of a scientific journal's editorial board - and as a senior citizen - I see reams of manuscripts that just reinvent the wheel. Because the whole scientific enterprise has become so complex that non-electronic research is effectively impossible, many young scientists don't know and can't find out what has already been done from older, copyrighted, paper-based literature. This results in a huge waste of resources. The same can be said for copyrights in creative areas such as music and writing, in which older works with limited distribution could be built upon to "promote the progress of science and useful arts."
A solution to determining which works are in the "Mickey Mouse" category of copyrights and which are in the more socially valuable "oral rehydration therapy" class of work is not feasible for a government bureaucracy. However, if all copyrights were taxed at a fixed (but significant) amount per year to maintain the copyright (all registered through the copyright office and searchable), there would be a significant carrying cost and most of the copyrighted material would revert to "public domain" and become available to "promote the progress of science and useful arts." The Week in Review is edited and published by Jack Spratts. As intellectual property and copyrights become an even more significant part of our economy, and as copyright holders (not necessarily the creators) make claims of "stealing" as though it is real property, it should be taxed. Relative to copyrights' significance in our economy, the amount of revenue from this source should be in the hundreds of billions of dollars per year.
With a proper tax system, publishers like the L.A. Times or scientific journals may maintain a copyright for only a year or so before letting the content revert to public domain and letting Google and everyone else utilize the material for its small, but socially significant, remaining value. The human enterprise could continue to build on itself in these creative, sustainable and non-resource-consuming ways, with copyrights only applying to a small subset of this enterprise.
It should also be noted that some of the most valuable and significant intellectual property and creative works can't be copyrighted. For example, Mickey Mouse is copyrighted, but E=MC2 could not have been. Which was truly the more significant creative work?
End Software Patents Project Comes Out Swinging
Four months after being announced, the End Software Patents project (ESP) is launching a new Web site with arguments for economists, computer scientists, lawyers, and lay people about why they should support the project. Prominent on the site is the publication of a report on the state of patents in the United States during 2006-07, and a scholarship contest that will award $10,000 for "for the best paper on the effects of the patentability of software and business methods under US law."
The project is being launched with initial funding of a quarter million dollars, supplied primarily by the Free Software Foundation (FSF). Under the directorship of Ben Klemens, a long-time advocate of software patent abolition best-known for the book Math You Can't Use: Patents, Copyright, and Software, the project is being supported by the FSF, the Public Patent Foundation, and the Software Freedom Law Center (SFLC).
One of ESP's goals is to enlist support from academics, software developers, legal experts, and business executives. Its initial supporters show that the project is already well on its way to building such a coalition.
"Software patents give the megacorporations a sort of dominion over the whole software field," says Richard Stallman, FSF president and founder, explaining his organization's support of ESP. "For all other software developers, and for the users of software, they are dangerous. We have to eliminate them." The FSF is committed to continuing to raise funds for ESP indefinitely until it achieves its goal of abolishing software patents.
At the SFLC, Chairman Eben Moglen expressed similar views, describing the present American software patent system as "a significant long-term nuisance and occasional long-term threat." Moglen notes that, as a nonprofit organization, the SFLC is limited in the political advocacy that it can undertake. However, he anticipates doing "what we can to provide intellectual material for legal activity that we are permitted [and] we will, if possible, assist our clients in the passing of legislation that is helpful in eliminating software patents." Moglen also expects the SFLC to assist in educating the legal community about the issues surrounding the campaign.
Another supporter of ESP is Brad Feld, founder and chair of Mobius Venture Capital. An opponent of software patents since he studied in the late 1980s under Eric von Hippel, the famous innovation expert at at the MIT Sloan School of Management, Feld describes software patents as "a gigantic waste of time and money," arguing that "you'll find very few sophisticated investors who invest in companies because of their software patent portfolios," except outright patent trolls.
Nor, contrary to what many believe, are patents an incentive for investment, according to Feld. He dismisses the idea of "spending money and time in an early stage company" to obtain patents, because "going through the patent process means waiting three or four years, when really what's more important is how you play out in the market. The actual cost of either asserting or defending a patent far outweighs the benefits."
To promote ESP, Feld plans to continue blogging on the subject of patents, as he has done for several years. He is also due to sit on an advisory board at the University of California at Berkeley with technology legal expert Pamela Richardson, and committed to funding a full-time researcher on software patents at the University of Colorado Law School.
Web site resources
As well as serving as a focus for the campaign, the ESP Web site is designed to educate people on the subject of American software patents. Several pages summarize the arguments against software patents for a variety of audiences. For those familiar with the subject, these pages have little new. They explain the vulnerability of everyone to patent infringement cases, and make several well-known arguments, such as that software patents stifle innovation, and that the idea of patenting mathematics or source code is fundamentally absurd. Instead, the site suggests, copyright would be a more suitable form of protection, and certainly a less wasteful one in terms of time and money. However, for those new to the subject, together these pages quickly make an academic case for the subject.
Perhaps the most original of these pages is the one aimed at lawyers, which describes the potentially important cases involving software patents today. Another page lists major cases and settlements.
Another major source of information on the site is the PDF report on the state of software patents over 2006-2007. Entitled "The current state of software and business method patents: 2008 edition," the report is obviously intended to be the first in an ongoing series.
Much of the report's 11 pages is devoted to summarizing the history of American patent law, as it moved from considering software unpatentable in the 1980s to allowing software patents in the mid-1990s, and created the increasingly untenable situation of the present. For those who need to be brought up to speed on the subject, the summary is an ideal resource.
The rest of the report is a miscellany of related information on current trends. For instance, the report estimates that, at an average of $4 million to litigate a mid-sized patent, some $11.4 billion is wasted per year on software patent litigation in the United States. The report also notes that, despite the general academic trend to accept software patents, three recent studies found no evidence that patents had any effect on innovation, while a fourth suggested that patents stifled innovation.
The report further suggests that, based on the tentative changes contained in The Patent Reform Act of 2008 (S.1145), a bill currently before Congress, reform is unlikely to improve the current situation. Although proposed changes such as a change from granting patents to the first to file to the first to invent, and a set scale for assessing damages, are welcome, the fact that US patent law does not treat software as a unique category makes extensive change almost impossible, according to the report.
The site offers ways to put this information to practical use. However, although one page is entitled "What can I do?" the main call to action is a call for papers prominently displayed at the top of the menu.
As well as the first prize of $10,000, the contest is also offering prizes of $4,000 and $1,000. "Papers may be from law, economics, management, computer science, or any other field." according to the contest page, and "may be empirical or qualitative." Despite the obvious perspective of ESP, the contest instructions include a warning that "bias and quality of scholarship tend to work against each other. Papers that let the facts and the data speak for themselves will fare better than papers that work from a foregone conclusion."
This comment echoes the general style of the site. For all the site's obvious bias, the general tone is one of reasoned academic discourse, with statements carefully supported by evidence and some attention paid to answering opposing arguments.
ESP's initial strategies
As the site suggest, one of ESP's primary concerns is education about patent issues. But the project also intends to assist corporations contesting patents, either in court or in the US Patent and Trademark Office -- although only "to the extent that the patent is a test case for questioning patents at large," Klemens says.
One area that ESP will not get involved in is attempts to reform existing software patent law. "There are on the order of 100,000 software patents out there today," says Klemens, and "we just don't have the bandwidth to re-examine all those patents." Besides, some patent reform is already happening, because of such cases as KSR v. Teleflex, which should make the filing of obvious patents harder. Advocacy groups for reform, such as the Electronic Frontier Foundation's Patent Busting Project, are already underway. And, ultimately, ESP's goal is abolition, not reform.
For now, at least, ESP seems to reject politics as its main battleground. Speaking of the bill now before Congress, Klemens says, "The Patent Reform Act could have made Senator [Patrick] Leahy a hero in computer geek circles. Instead, it isn't doing much that we in computing would be significantly concerned with."
By contrast, the courts seem a venue far more likely to get results. "The Patent Office has recently rejected a spate of patents," Klemens says, "and those rejections have gone to the Federal Circuit, which is taking some of them as a chance to seriously reconsider the scope of what is patentable."
Klemens is especially interested in In re Bilski, a case that centers on the question of what is patentable. In the last few months, Klemens has been looking for such a test case, and he believes that "the Federal Circuit simply handed us an agenda" by hearing this case.
Klemens is currently working on an intervention in the case. "I have been working like crazy on an amicus curiae brief for the ESP. We've been making an effort to coordinate with other organizations to make sure that all the bases are covered in one brief or another, have been searching for companies that would like to sign on to our briefs, and otherwise making sure that our team has a strong showing in this case."
But Klemens is too experienced to imagine that obtaining ESP's goals will be so simple. "Even if we win Bilski -- and we can only guess the odds of that -- the fight is not yet over. There are people who lobby Congress and the courts for monopolies on their products all the time, so we need to be vigilant that any gains we're making now are not simply reversed."
In other words, ESP is probably in for a prolonged fight. For now, though, it has made a promising start.
Buddy Miles, Hendrix Drummer, Dies
Buddy Miles, the drummer in Jimi Hendrix’s Band of Gypsys and a hitmaker under his own name with the song “Them Changes,” died on at his home in Austin, Tex. He was 60.
Mr. Miles suffered from congestive heat failure, his publicist, Duane Lee, said, according to Reuters. Mr. Lee said he did not know the official cause of death.
Mr. Miles played with a brisk, assertive, deeply funky attack that made him an apt partner for Hendrix. With his luxuriant Afro and his American-flag shirts, he was a prime mover in the psychedelic blues-rock of the late 1960’s, not only with Hendrix but also as a founder, drummer and occasional lead singer for the Electric Flag. During the 1980’s, he was widely heard as the lead voice of the California Raisins in television commercials
George Allen Miles Jr., whose aunt nicknamed him after the big-band drummer Buddy Rich, was born in Omaha and began playing drums as a child. He was 12 years old when he joined his father’s jazz group, the Bebops. As a teenager he also worked with soul and rhythm-and-blues acts, among them the Ink Spots, the Delfonics and Wilson Pickett. By 1967, he had moved to Chicago, where he was a founding member of the Electric Flag.
That band included a horn section and played blues, soul and rock; it made its debut at the Monterey Pop Festival in 1967 and released its first album in 1968. But the Electric Flag was short-lived. Mr. Miles formed the Buddy Miles Express, and its first album, “Electric Church,” was produced by Hendrix, whom he had met when both were sidemen on the rhythm-and-blues circuit. Mr. Miles appeared on two songs on the Hendrix album “Electric Ladyland.” When Hendrix disbanded the Jimi Hendrix Experience and replaced his trio’s British musicians with African-Americans, Mr. Miles joined him in the Band of Gypsys along with Billy Cox on bass.
On the last night of the 1960s, a New Year’s Eve show, they recorded “Band of Gypsys,” an album that included “Them Changes.” Mr. Miles also worked in the studio with Hendrix, and appears on “Cry of Love,” released after Hendrix died in 1970.
He re-recorded “Them Changes” with his own band, and it became a hit and a blues-rock staple; Eric Clapton and Steve Winwood performed it on Monday at Madison Square Garden. Through the 1970s, Mr. Miles made albums with his own bands. He also made a live album with Carlos Santana in 1972, and sang on the 1987 Santana album “Freedom.” During his career he appeared on more than 70 albums and worked with musicians including Stevie Wonder, David Bowie, Barry White and George Clinton.
He was imprisoned on drug-related convictions during the late 1970’s and early 1980’s, but when he emerged, advertising recharged his career. He sang the lead vocal for the California Raisins, whose Claymation commercials were so popular that they led to a string of albums by the fictional group. Two of them, “California Raisins” and “Meet the Raisins,” shipped a million copies. Mr. Miles also produced and performed commercials for Cadillac and Harley Davidson.
He and Mr. Cox recorded a live album, “The Band of Gypsys Return,” in 2004. Mr. Miles continued to perform even after suffering a stroke in 2005. Survivors include his partner, Sherrilae Chambers.
Music Exec: "Music 1.0 is Dead."
Five hundred top members of the music business gathered today in New York to hear that "music 1.0 is dead." Ted Cohen, a former EMI exec who used the phrase, opened the Digital Music Forum East by pleading with the industry to be wildly creative with new business models but not to "be desperate" during this transitional period. But what is music transitioning to? No one seemed quite sure, except to say that it won't look much like the music business of the last several decades.
Consider the statements that were made today without controversy:
• DRM on purchased music is dead
• A utility pricing model or flat-rate fee for music might be the way to go
• Ad-supported streaming music sites like iMeem are legitimate players
• Indie music accounts for upwards of 30 percent of music sales
• Napster isn't losing $70 million per quarter (and is breaking even)
• The music business is a bastion of creativity and experimentation
Only a few years ago, none of those statements would have been true, but perhaps none is more striking than the last. Panelists from every sector of the digital media marketplace were in agreement that the major labels, under the pressure of eroding profits, have been forced to become experimental in their business dealings and to do deals that would have been deemed too risky only months before.
Just within the last year, we've seen an array of experiments that include ad-supported streaming, "album cards" from labels like Sony BMG, and allowing Amazon to offer MP3s from all four majors. Some labels even allow user-generated content to make use of their music in return for a revenue share from sites like YouTube—unthinkable a few years ago to a business wedded to control over its music and marketing. YouTube's Glenn Otis Brown says that the labels now have less of a "standoff mentality" and are ready to deal.
That innovation has been paying off. Interscope now rakes in 40 percent of its total revenues from digital sales, while Sony BMG makes 30 percent (in the US), but this hasn't been nearly enough to offset the loss in revenue from plummeting CD sales. While the majors once held all the cards when it came to licensing music (and they used their power to negotiate revenue splits on the order of 85/15), they aren't quite so powerful any more. In fact, several audience members and panelists even questioned whether major music labels brought much to the table besides their back catalogs.
Who needs a label?
Ted Mico, the head of digital strategy at Interscope, defended the majors by saying that "anyone who has spent an hour or a day listening to demos understands the labels' place in the food chain"; that is, labels provide both filtering and then marketing of music. Without their help, promising artists would be lost in a sea of noise and would be almost impossible for music lovers to discover.
This attitude was deconstructed during the very next panel, where the CEO of social music recommendation site iLike pointed out that labels, in fact, don't actually need to spend their time listening to demos; customers have already done it for them. Social networking sites like MySpace show that it works. Do music labels still need expensive A&R staff when they can simply listen to works of any band with over 50,000 MySpace friends? The message, in other words, was "Music 2.0, welcome to Web 2.0."
The contrast between these two ways of looking at the world—one rooted in a more elitist and expensive model, the other open to the "wisdom of crowds" and its democratic ideals—underscored a broader theme that emerged from the first day of the conference: the music business is a complicated place. Internecine warfare was the order of the day, so much so that the disagreements from one panel of music luminaries drew an impassioned plea for the infighting to end.
David Del Beccaro, the president of Music Choice, laid out a clear case for change and for labels to focus more on building long-term partners than on short-term advances and profits, but he sees the music industry's fundamental transformation as taking ten to twenty years to complete. In a business changing this quickly, that could mean death.
Greg Scholl, boss of indie label The Orchard, pointed out that the music business is not just four companies, and that indie music's market share is now approaching one-third... and it's growing. Indies have also been more open, historically, to experiments such as selling music without DRM. If the major labels take more than a decade to turn the ship around, they risk running a ghost ship with little in its cargo hold but a valuable back catalog. The indies could instead become the place for fresh new music and even for established artists who want more control (we saw that last year with Paul McCartney, John Fogerty, and James Taylor, for instance).
But no one quite knows how it will all shake out at this point. As Sony BMG's Thomas Hesse put it, "the next big thing is a dozen things." That's a scary thought to labels that pursued only one thing—the sale of recorded music on pieces of plastic—for decades.
6 Music Industry Tricks That Must Die
If the music industry really wants to save itself, it could start by doing away with all the bullshit. What bullshit, you ask? Here are six underhanded tricks that we could live without, and that our kids probably will.
Kid Rock, Cher, Uncle Kracker, T-Pain
How it Caught On:
Frequently mistaken for a vocoder and more commonly known as "That Fucking Weird Computer Voice Thing," Auto-Tune is actually a brilliant piece of software. All you have to do is tell it which notes you're trying to hit while you're singing. When you fuck up, Auto-Tune makes the necessary adjustments so that you can pretend to be a good singer and a weird sounding robot at the same time. Obviously this has made it invaluable in the world of music.
Singers used to spend days trying to get their songs recorded perfectly, and studios charge by the hour. Some would record late at night when their vocal chords were more relaxed. Some (Rod Stewart) even gargled crew-members' love gravy to get that smooth, even tone (allegedly, but the kid who told us about it in high school also had the best weed, so it has to be true, right?). Auto-Tune has made it possible for performers to lower their recording budgets, get some rest, and sidestep such unfortunate homeopathic remedies.
Why it Must be Stopped:
Unfortunately, Auto-Tune has become the HGH of the recording industry. While we doubt that Kid Rock will be facing a grand jury for his blatant abuse of the software in the steaming turd of a song "Only God Knows Why," we can only hope that any future Rock and Roll Hall of Fame inductees who've received such a heaping dose of simulated talent will get an asterisk next to their names. Also, we hope that in the future, an asterisk will resemble a middle finger.
"That Fucking Weird Computer Voice Thing" has made it possible for every paparazzi sweetheart, pop culture freak of the week to record an album and assail our eardrums.
For too long, consumers had been duped into thinking that fame had some sort of direct correlation to talent. Auto-Tune provided yet another step down the road towards the inevitable day when Soldja Boi wins the Grammy in rap, R&B, adult contemporary and operatic solo.
Auto-Tune will be around as long as talented musicians and teenage girls who make men want to masturbate continue refusing to be the same person (allow us a moment to shake our fist at evolution). But rest assured that the current trend of making one's voice sound obviously computerized will not last much longer. Our guess is that, in time, That Fucking Weird Computer Thing will sound as dated as Jeopardy's Daily Double laser sound effect.
Scott Weiland, Britney Spears, Amy Winehouse
How it Caught On:
In 2007, Paula Abdul appeared on a morning TV talk show, stoned out of her mind on what we imagine was a combination of oxycontin, absinthe, and Drano. This, of course, got people talking, videos YouTubed, and ratings boosted. In the music industry, there's no such thing as a drug scandal because we expect our musicians to be on drugs. We'd be a little disappointed if we found out they weren't. The downside is that publicists have figured out that checking your client into rehab is actually the cheapest way to drum up publicity, assuming the price of street drugs remains lower than whatever Nickelback's manager pays to get them into Rollingstone.
We are a nation of voyeurs, and there's nothing we like to watch more than celebrity sex tapes. But embarrassing celebrity drug freakouts come in a close second. And since sex tapes require that people actually want to watch you have sex (clearly not the case for two of our three worst offenders) chemical dependency is a much easier go-to. It should be noted that it's not as good an idea to combine drugs and sex tapes, as when a cracked out Tom Sizemore played power bottom to a hooker with an elephant trunk-sized slab of rubber strapped to her pelvis.
Why it Must be Stopped:
Repeat offenders have made going to rehab a joke. While regular-ass people rehabilitate in facilities that are just a step up from county jail, Britney Spears spends an extended weekend in Malibu, then Antigua, then Malibu again. These celebrities are giving real addicts a bad name. We'll start taking their problems seriously as soon as we see Scott Weiland barefoot, hauling ass down Sunset Boulevard, clutching a stolen DVD player.
On the other hand, being a regular person in rehab with a celebrity might not be so bad. If that celebrity is Lindsay Lohan, she'll probably have sex with you if you're a dude with a passably functioning penis. This is preferable to having sex with Lindsay Lohan in the bathroom at a club, because in rehab there will be medical help readily available when you come down with a mean case of Hepatitis F.
#4. Songs About How California is Phony
Red Hot Chili Peppers, Madonna, System of a Down
How it Caught On:
Those who faithfully follow rock stars do so because they feel a genuine, personal connection through the music. "Here is someone who's just like me," they think, "only better looking, rich and more prone to wearing black leather pants."
When you're a struggling musician, your life isn't that far off from other people: you're unsure of yourself, you're hung over, you get dumped for guys with better jobs (when you're a struggling musician, this includes the guy at the mall who paints himself silver and pretends to be a statue for two hours). Thus the rock star is able to write lyrics that almost anyone can relate to. Your girlfriend dumped you? There's a song for that. You're broke? There's a song for that too. You're married and you just realized that you're gay? R. Kelly wrote twenty-two songs for that.
However, it can become difficult for a performer to relate to his fans when he reaches a certain level of success. Those songs of struggle and heartbreak don't come as easily when the swedish bikini team is wiping your ass with hundred dollar bills in the back of a stretch Hummer limo.
That screaming horde of fans still loves their rock star, though. So much so that they'd trade anything to live his life. With that last remaining connection, the rock star pretends to be down to earth one last time with a song (or in the case of the Chili Peppers, three straight albums) about how California ain't all it's cracked up to be.
Why it Must be Stopped:
Ever since the overrated, pretentious, and ponderous "Hotel California," rock bands have tried to duplicate the Eagles' success. They'll sing ironic lyrics about the glamorous life and it's ugly underbelly, completely missing the irony that they've become exactly the sort of asshole their girlfriend used to leave them for. This is inevitable. It is simply very difficult to examine your own existence while spackling a hotel room with evidence for your future paternity suit.
Many of these songs are passed off as some sort of public service. If too many people are exposed to these contrived and cliched cautionary tales though, they may never have their dreams crushed by Hollywood, leading to the greatest restaurant-staffing crisis California has ever seen.
Vince Neil complained that Hollywood "fat cats" were going to "take our money and flush it down the drain" in Motley Crue's "Fake." Five years later he was singing a cover of "If I Die Tomorrow," through a face full of collagen implants. Fake, indeed.
#3. Multiple Producers on One Album
Velvet Revolver, Every rapper ever
How it Caught On:
Hip hop is rarely a one-man show. Generally, someone makes the beats, and someone else delivers the vocals. In old school hip hop, the bringer of beats was designated as the DJ, such as: DJ Jazzy Jeff, DJ for the Fresh Prince; Terminator X, DJ for Public Enemy; or SW1, DJ for In Living Color. These days, we call this person the Producer, because beat creation is no longer limited to turntables and samplers.
Not all producers are created equal though, and as a result of supply and demand, the best producers come with the highest price tags. Not to mention that Dr. Dre and Timbaland just don't have the time to make beats for every up-and-coming MC. In an attempt to spread the wealth, and launch as many careers as possible, record labels spread the talent around.
Why it Must be Stopped:
Ever bought a CD and wondered why the only good songs are the ones you already hear on the radio all the time? Check the credits. Chances are, the two that you like were produced by the same person, and the 13 you hate were produced by the performer's cousin. You can't help but feel betrayed, wondering if you've been the victim of some sort of prank a la whopperfreakout.com.
Too many fans have been swindled by this bait-and-switch tactic, and we've definitely caught on to the grift. Album sales continue to plummet while digital track sales are climbing. Consumers are sending the message that if you can only crank out one or two good songs, we're only going to buy one or two songs from you. When rappers start looking for someone to blame when they're popping Korbel instead of Cristal, they'll have to look no further than the reflection in the chrome wheels on their Chevy Cavaliers.
#2. Featuring ...
T-Pain, Akon, Li'l Jon
How it Caught On:
So how is a new act supposed to get noticed in a music scene that's more crowded than Tokyo? Why, by piggy-backing on an established artist by being "featured" on one of his tracks.
Or, what if you're stuck being a producer, forever in the shadows? You can get yourself "featured" in a track by popping in with an occasional "uh huh" or "yayuh!" If not for this, the world may never have learned the names of producers like Li'l Jon, Timbaland, or Sean John (we're told that's what we're supposed to call him this week).
Why it Must be Stopped:
It has come to a point where songs feature so many artists that the consumer can't figure out whose album to buy. Faced with a stack of CDs that could possibly contain the song in question, often the consumer will opt instead to just steal the song on the internet. This could result in heavy fines, jail time, and the feds looking through all that embarrassing shit on your hard drive, all thanks to the Recording Industry Association of America. So whether you steal 'em or buy 'em, you end up broke. See? Evil.
Established, respected artists have found that lending their name to someone else's song can indeed damage their reputations. Redman's appearance in Christina Aguilera's "Dirty" stripped him of the credibility that even those deodorant commercials couldn't tarnish.
#1. Farewell Tours
KISS, The Rolling Stones, Cher, The Who
How it Caught On:
These days, concert ticket sales are only slightly less abysmal than album sales. It's hardly surprising when you consider that many artists need computers to sound good, other artists to give them credibility, and a team of producers to write their music. If an act is good enough to garner interest from their fans after all of that, there's still the risk that your tickets will become worthless when the lead singer checks into rehab. What's the point of going through all that hassle when you only know two or three of their songs?
There are still some surviving acts that have a universal appeal, but those artists have reached such a level of success that their concert tickets cost an arm, a leg, and whichever reproductive organs you posses (for nosebleed seats). The only way for an artist to guarantee themselves a packed house this time around is to assure their fans that this will be the last time around.
Why it Must be Stopped:
As soon as a band sees the paycheck from their first farewell tour, they apparently rethink that whole retiring business. The Who did a farewell tour in 1983. KISS did theirs in 2000, and it lasted two years. The Rolling Stones' farewell tour started in 2005, lasted two years, and raked in $437,000,000. All three bands are planning tour dates for 2008, and many fans have already refinanced their homes to pay for the tickets (plus service charges).
Nothing rocks less than a farewell tour. When bands break up for real, it's because their pilot was still drunk from the night before and flew their plane into the side of a mountain. Or maybe the band members hate each other so much that they go their separate ways after an attempted murder/suicide and record unlistenable solo albums. Or how about just a near-fatal drug overdose where a band member finds Jesus and starts an Armageddon cult?
Literally anything rocks more than a farewell tour, where they might as well open things up with a little honesty:
"Are you ready to rock? Actually, we got burnt playing the markets in the last recession, so instead of rocking, why don't you give us all of your money for our 401k plans and kindly go home. And please leave quietly, all your shouting is scaring the bassist."
More Teenagers Ignoring CDs, Report Says
48% of teenagers bought no CDs at all in 2007, up from 38% in 2006. Music downloads continue to grow, though, with iTunes leading the way.
Michelle Quinn and Andrea Chang
Going to the mall to buy music may no longer be a rite of passage for adolescents.
For the first time last year, nearly half of all teenagers bought no compact discs, a dramatic increase from 2006, when 38% of teens shunned such purchases, according to a new report released Tuesday.
The illegal sharing of music online continued to soar in 2007, but there was one sign of hope that legal downloading was picking up steam. In the last year, Apple Inc.'s iTunes store, which sells only digital downloads, jumped ahead of Best Buy Co. to become the No. 2 U.S. music seller, trailing Wal-Mart Stores Inc.
That could be hopeful news for the music industry, which has been scrambling in recent years to replace its rapidly disappearing CD sales with music sold online. The number of CDs sold in the U.S. fell 19% in 2007 from the previous year while sales of digital songs jumped 45%, Nielsen SoundScan said.
The number of people buying music legally from online music stores jumped 21% to 29 million last year from 24 million in 2006, according to the study by NPD Group, a market research firm in Port Washington, N.Y.
NPD declined to release figures on individual retailers' sales or their market shares, so it is impossible to know how close iTunes sales are to Wal-Mart's. The NPD market ranking of music retailers is based on a study of the music habits of Americans 13 and older over the last week.
The report, which involved 5,000 people who answered questions online, highlighted a generational split. The increase in legal online sales was driven by people 36 to 50, the report said, giving the music industry an opportunity to target these customers by tapping into its older catalogs.
That's not to say iTunes is not popular with the younger set. Mallory Portillo, 24, an executive assistant in Santa Monica, said she hadn't bought a CD in five years, but typically spent more than $100 a month buying music online. She will turn to illegal music sharing sites only if she can't find new releases or more obscure music on iTunes, she said.
Buying online saves her the step of having to load a CD onto her laptop so that she can then transfer the files to her iPod.
Her most recent purchase came two days ago, when she spent $19.99 on iTunes for Michael Jackson's 25th anniversary edition of "Thriller."
"Hopefully it doesn't come back to haunt me one day that my 'Thriller' CD is on my computer and therefore not a collector's item," she said.
The increase in online spending didn't offset the revenue lost from the drop in CD sales and from illegal downloading. Last year, about 1 million consumers stopped buying CDs, according to NPD.
There are several ways for consumers to expand a digital music collection. They can buy music at online stores such as iTunes and Amazon.com's MP3 store. They also can convert their CD collection into a digital format.
What concerns the music industry is illegal Internet file-sharing on websites where people pick up a digital song or album that others have uploaded. They can also do what is known as peer-to-peer file sharing, when people download music while temporarily opening up their computers to others to pick up music. The music industry says people who obtain music free online are breaking the law.
Rachel Rottman, 14, says she hasn't bought a CD in a year. The Santa Monica High School freshman says she downloads five or six songs a day, using paid services such as iTunes and social networking site MySpace, where bands post songs for free download. Rachel said she had about 2,600 songs stored on her computer.
Before getting a computer in the seventh grade, she always bought CDs. But now it's too much trouble, she said.
"You have to go to the store and then you have to pay -- I don't know how much, $12, I'm guessing? -- then you have to put it on your computer," Rachel said. "When you download it, it's right there."
Hunter Conrad, an eighth-grader at Lincoln Middle School in Santa Monica, says she downloads about 80% of her music from iTunes, "but when it's an artist I really like, I'll buy the original CD."
Out of her group of friends, she's "one of the few" who still buy CDs, she said. Most of her buddies download for the convenience, to save money and to get only the songs they like.
"Nobody really wants the other songs [on an album]," Hunter, 14, said. "They just want the hits."
In the last year, consumers paid for 42% of the music they obtained, the report said. That was down from 48% in 2006 and more than 50% in 2005.
"The trend is continuing but it will flatten because there are people who will always want the physical," said Ted Cohen, managing partner at TAG Strategic, a digital media advisory firm.
Over the last year, the music industry has pushed back. Some companies now permit online music stores to sell songs without copyright protections in hopes of making it easier for consumers to move digital music to different computers and devices, and thus remove the temptation to download it illegally.
Some music companies have thrown support behind Amazon's MP3 store, which competes with iTunes. The music industry has also sued fans to stop them from downloading and sharing music without paying for it.
The legal efforts may have had an effect. The report said that the portion of survey respondents who shared music on sites that facilitate illegal downloads was 19% in 2007, the same as 2006. But those who do it are doing it more. Some said they got more than 3,000 songs a year this way.
Two years ago, teenagers accounted for 15% of CD sales. In 2007, the figure was 10%. The digital music world has yet to completely capture the attentions of Isaac Kahn and his friend Charlie Williams, both 14. They buy music online but prefer to go to the Amoeba store on Sunset Boulevard in Hollywood and thumb through the CDs. "I like to look at CDs and see if there's anything else I might want to buy," Isaac said.
Charlie, who recently bought a device to transform his father's 300 records into digital files, said many teens download music illegally because they are on computers. But he doesn't have a computer. And besides, he said, "I'm a musician myself; I prefer to just buy it."
Until next week,
Current Week In Review
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Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved.
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