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Old 17-12-08, 09:06 AM   #1
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Default Peer-To-Peer News - The Week In Review - December 20th, '08

Since 2002

"As of now Firefox, Safari and Opera (and Chrome) play in a different league and expose IE8 as an old concept that is overrun by a new generation of browsers." – Andrew Isaak and Christian Zibreg

"We don't have lot of art in Danbury, and having it our school is kind of a privilege." – Boris Pena

"Wireless-only households are more likely to contain binge drinkers and smokers, compared with those having landline phones." – Kim Dixon

"I could have done that, I suppose. But then the mysterious sandbag falls on your head. I’m Italian. I know how this works." – Jay Leno

Why Copyright?

I watched this documentary earlier in the week after downloading the ISO torrent from Mininova and burning it to disc. It’s a co-production of law student Dan Albahary and law professor Michael Geist, both Canadian copyright activists. While technically proficient and of some interest (and for a 47 min vid curiously large as far as files go) I couldn't help thinking it wasn't going to change many of the minds of the very people it seems to be aimed at: those who hold the future of Canada's copyright laws in their pens. Yes, it reaffirms to some small extent what we in the (legally marginalized) P2P community have been writing for a decade and it certainly repeats many of the warnings raised by opponents of D igitally R estricted M edia schemes, and I suppose if one was agitated enough about this topic to actually take the time to download, burn and watch it - yet had somehow never heard nor seen anything beyond the one-sided corporate-media party line - it could be thought provoking...Ultimately however it doesn't make for effective advocacy, not the kind measured in how many politicians are moved from your column to mine, nor for that matter how many voters.

A major dilemma for many in the lawyer/professor copyright revolution is their own legal backgrounds and positions, which predictably and consistently results in glaring self censorship. They're really more lawyer than revolutionary, more staid officer of the court than fiery leader of guerillas. It’s hard to advocate effectively for activities that are at present assumed by many to be illegal if one spends so much time dryly repeating bromides against violating the laws…i.e. “While I can’t condone illegal file-sharing…” (Oh? And why is that exactly?) Their very arguments tend to become unfocused and diluted, and horror, subtly affirm the status quo. Thankfully this production spares us that particular embarrassment but if there are measured rehashes of long-term grievances here there are ultimately no shots against parliament's bow, no crise de Canadienne cœur, no up against the wall...no passion in this documentary. And if anything is going to get parliament, or congress, or those voters off their comfy chairs and onto an edgy new paradigm it's going to take something truly galvanizing. Delivering agit-prop electronically is a good start, but the amperage needs to be ramped up. Way up.



December 20th, 2008

Music Industry to Abandon Mass Suits
Sarah McBride and Ethan Smith

After years of suing thousands of people for allegedly stealing music via the Internet, the recording industry is set to drop its legal assault as it searches for more effective ways to combat online music piracy.

The decision represents an abrupt shift of strategy for the industry, which has opened legal proceedings against about 35,000 people since 2003. Critics say the legal offensive ultimately did little to stem the tide of illegally downloaded music. And it created a public-relations disaster for the industry, whose lawsuits targeted, among others, several single mothers, a dead person and a 13-year-old girl.

Instead, the Recording Industry Association of America said it plans to try an approach that relies on the cooperation of Internet-service providers. The trade group said it has hashed out preliminary agreements with major ISPs under which it will send an email to the provider when it finds a provider's customers making music available online for others to take.

Depending on the agreement, the ISP will either forward the note to customers, or alert customers that they appear to be uploading music illegally, and ask them to stop. If the customers continue the file-sharing, they will get one or two more emails, perhaps accompanied by slower service from the provider. Finally, the ISP may cut off their access altogether.

The RIAA said it has agreements in principle with some ISPs, but declined to say which ones. But ISPs, which are increasingly cutting content deals of their own with entertainment companies, may have more incentive to work with the music labels now than in previous years.

The new approach dispenses with one of the most contentious parts of the lawsuit strategy, which involved filing lawsuits requiring ISPs to disclose the identities of file sharers. Under the new strategy, the RIAA would forward its emails to the ISPs without demanding to know the customers' identity.

Though the industry group is reserving the right to sue people who are particularly heavy file sharers, or who ignore repeated warnings, it expects its lawsuits to decline to a trickle. The group stopped filing mass lawsuits early this fall.

It isn't clear that the new strategy will work or how effective the collaboration with the ISPs will be. "There isn't any silver-bullet anti-piracy solution," said Eric Garland, president of BigChampagne LLC, a piracy consulting company.

Mr. Garland said he likes the idea of a solution that works more with consumers. In the years since the RIAA began its mass legal action, "It has become abundantly clear that the carrot is far more important than the stick." Indeed, many in the music industry felt the lawsuits had outlived their usefulness.

"I'd give them credit for stopping what they've already been doing because it's been so destructive," said Brian Toder, who represents a Minnesota mother involved in a high-profile file-sharing case. But his client isn't off the hook. The RIAA said it plans to continue with outstanding lawsuits.

Over the summer, New York State Attorney General Andrew Cuomo began brokering an agreement between the recording industry and the ISPs that would address both sides' piracy concerns. "We wanted to end the litigation," said Steven Cohen, Mr. Cuomo's chief of staff. "It's not helpful."

As the RIAA worked to cut deals with individual ISPs, Mr. Cuomo's office started working on a broader plan under which major ISPs would agree to work to prevent illegal file-sharing.

The RIAA believes the new strategy will reach more people, which itself is a deterrent. "Part of the issue with infringement is for people to be aware that their actions are not anonymous," said Mitch Bainwol, the group's chairman.

Mr. Bainwol said that while he thought the litigation had been effective in some regards, new methods were now available to the industry. "Over the course of five years, the marketplace has changed," he said in an interview. Litigation, he said, was successful in raising the public's awareness that file-sharing is illegal, but now he wants to try a strategy he thinks could prove more successful.

The RIAA says piracy would have been even worse without the lawsuits. Citing data from consulting firm NPD Group Inc., the industry says the percentage of Internet users who download music over the Internet has remained fairly constant, hovering around 19% over the past few years. However, the volume of music files shared over the Internet has grown steadily.

Meanwhile, music sales continue to fall. In 2003, the industry sold 656 million albums. In 2007, the number fell to 500 million CDs and digital albums, plus 844 million paid individual song downloads -- hardly enough to make up the decline in album sales.
—Amol Sharma contributed to this article.

RIAA Seeking $1 Million in Damages from a Student for Sharing 7 Songs on Kazaa
Svetlana Gladkova

Today in Rhode Island federal court we are going to see yet another lawsuit with RIAA as one party and a person who seems to be randomly chosen to punish for abusing copyright of record labels. And while I myself usually support content producers everywhere I can, RIAA (Recording Industry Association of America) with the ridiculous lawsuits everywhere seems to forget about any common sense at all quite often.

Harvard Law School Professor Charles Nesson and his students will defend Rhode Island residents Arthur and Judie Tenenbaum from RIAA that is accusing their son Joel of sharing a total of 7 songs on Kazaa file sharing network. The damages Joel and his parents are facing could be more than $1 million.

At the time of alleged infringement Joel was a teenager and his sharing of songs, while illegal, is exactly what the majority of teenagers still do around the world. More than that, I am quite sure Joel was not the only person sharing music files in Kazaa at the time - yet he is the only one chosen by RIAA to sue. So I think it is quite obvious that the purpose behind this particular lawsuit is neither to punish this particular person, nor to compensate for the copyright infringement - instead they merely want to use Joel’s case as an example of what trouble you can get yourself into by sharing a handful of songs online.

An intriguing part about the story is that during the investigation the parents of the Harvard student were forced to provide their home computer for RIAA to find evidence of copyright violation using the machine - even despite of the fact that they did not even own this machine at the time when Joel lived with them before going to college.

This situation with the computer is viewed as a serious privacy violation by Professor Nesson and his students and they are going to fight “against the recording industry’s intimidation practices”. The hearing is scheduled to begin at 10 a.m. and everyone is welcome to support the counterclaim against RIAA or at least to subscribe to the blog dedicated to this event.

RIAA May Be Violating a Court Order In California

In one of its "ex parte" cases seeking the names and addresses of "John Does," this one targeting students at the University of Southern California, the RIAA obtained an order granting discovery — but with a wrinkle. The judge's order (PDF) specified that the information obtained could not be used for any purpose other than obtaining injunctions against the students. Apparently the RIAA lawyers have ignored, or failed to understand, that limitation, as an LA lawyer has reported that the RIAA is busy calling up the USC students and their families and demanding monetary settlements.

Sources: RIAA Budget Will Shrink Soon
Greg Sandoval

Friday's startling news that the trade group representing the four largest music labels has declared an end to a long-running legal campaign against file sharing will mean a reduced role for the RIAA, which is coming up on its yearly budget review, according to a source close to the group.

But in a climate where digital music sales are growing, though not fast enough to make up for the losses from shrinking CD sales, the trade organization was already headed toward likely cutbacks. One source said that one of the top four labels has already begun making noise about lowering its contribution to the organization.

An RIAA representative declined to comment.

The RIAA has seen budget cuts for the past several years, and both sources said the organization isn't going anywhere. The group still lobbies Congress on behalf of the music industry and artist rights.

Now, with a less litigious agenda, perhaps the RIAA will need one or two fewer lawyers.

Digital Music Gains, But CD Losses a Pain
Jonathan Skillings

Consumers are increasingly willing to pay for songs they acquire over the Internet, but declining interest in CDs is dragging down overall music consumption among Internet users.

During the third quarter, there was an increase both in the number of people buying digital downloads and in the number of tracks sold, according to market researcher NPD Group. Legal music downloads were up 29 percent from the same period last year, and sites such as iTunes and Amazon MP3 chalked up an additional 2.8 million music buyers, to a total of 15 percent of Internet users.

That jibes with reports from Warner Music Group and Universal Music Group. Both labels have recently seen vigorous growth in sales of digital music. Warner, for instance, said last month that in the third quarter, digital music sales rose 27 percent to $167 million.

Peer-to-peer sites, meanwhile, saw an increase in the overall volume of song files being shared, up 23 percent for the same quarter last year, though some of that increase was attributed to a greater number of downloads per user, according to NPD. The number of P2P sharers among Internet users, NPD reported, stayed flat at 14 percent.

Not surprisingly, teenagers were a big factor in the gains--they accounted for 34 percent more paid downloads than in the third quarter of 2007, and P2P downloading spiked 46 percent among 13- to 17-year-olds.

Also, credit popular video games such as Rock Band and Guitar Hero with spurring consumers to make a music purchase of some sort. In many cases, "gaming can help remind customers of the music they grew up with...and to re-engage with the artist," said Russ Crupnick, entertainment industry analyst for NPD.

But the music labels, knocked off their stride by the advent of the digital music era, still face challenges.

Among Internet users, according to NPD, overall music demand was down 2 percent year over year in the third quarter of 2008. That figure takes into account purchased CDs, purchased digital music downloads, files obtained via P2P sites, and music files borrowed to rip to a computer or burn to a CD.

Largely, that slippage is a result of the continuing drop in sales of CDs (down 19 percent in the third quarter), most notably among teens and young adults, but also including adults over the age of 36.

"The value of each music customer is declining," Crupnick said. But, he added, "anytime you can add 2 (million) to 3 million buyers year over year, that's very encouraging."

Music Stars' Digital Strategies Still in Flux
Antony Bruno

It's been more than five years since Apple's iTunes store changed music retail by introducing single-track digital downloads. But it wasn't until 2008 that most musicians and labels started to wonder out loud whether selling music by the track is good for their bottom lines.

Two of the year's biggest rock acts, AC/DC and Kid Rock, insist that their albums only be sold whole. And since Apple only rarely allows this, neither act allows iTunes to sell its albums in the United States.

Despite the fact that iTunes is the largest music retailer in the country, neither act seems to have suffered for this decision. As of early December, Kid Rock's "Rock N Roll Jesus" was the third-best-selling album of the year, according to Nielsen SoundScan. And it was sold only as a CD until almost a year after release, when Kid Rock granted Rhapsody the exclusive rights to sell it online in the States -- as a full album. So far, the album has sold only 3,000 digital copies.

AC/DC released its new album "Black Ice" exclusively at Wal-Mart and has sold 1.6 million copies without any digital sales at all; it's the fourth-best-selling album of the year.

Both of these success stories challenged the accepted gospel that iTunes is an essential part of music retail. Perhaps more surprising is that neither project appeared on file-sharing networks more frequently than most big albums, according to Eric Garland, CEO of the file-trading monitoring company BigChampagne.

"Check some of these artists that have hit singles versus their album sales, then compare it to what Kid Rock is doing," Ken Levitan, Kid Rock's manager, told the Wall Street Journal. He has called digital single sales the death knell of the music business.

Flip Side

But there's another side to the story. The year's best-selling album is Lil Wayne's "Tha Carter III," at 2.7 million copies. Digital stores played a big part in that success: His "Lollipop" single alone sold more than 3 million copies. The second-best-selling album is Coldplay's "Viva La Vida or Death and All His Friends," with 1.9 million units sold. More than half a million of those copies were sold on digital services.

Digital stores also helped Leona Lewis. The best-selling digital single of the year, according to Nielsen SoundScan, is Lewis' "Bleeding Love," which has sold 3.3 million tracks. The album it's on, "Spirit," is the eighth-best-selling album of the year, with 1.2 million copies sold, 140,000 of which came through digital channels. Counting every 10 tracks as an album, Lewis' sales jump to 1.5 million without factoring in the sales of any other singles from "Spirit." That's on par with Kid Rock and AC/DC.

These results suggest that it's possible to have a best-selling album either way. And the best approach may depend on the nature of the music itself.

"If there's a body of work that the public wants, they will engage with it and purchase it," says Universal Motown senior vice president of digital business development Cameo Carlson. "It's about the consumer you're going after and what story you're trying to tell."

Carlson is the executive behind the digital promotion of Lil Wayne's "Tha Carter III." She, too, was concerned that the popularity of "Lollipop" might harm Lil Wayne's album sales but decided to embrace iTunes rather than fight it. Besides "Lollipop," the label released five more tracks on iTunes before the album's June 10 release to make sure fans could hear other songs.

She also took advantage of iTunes' Complete My Album feature, which allows fans who buy a few songs from an album to purchase the remaining tracks at a prorated cost. It was one of the first times the feature was used in conjunction with such a massive prerelease campaign, and its success is striking: More than 10 percent of the album's first-week sales were digital, up from less than 1 percent for Lil Wayne's past titles. More than half of those digital sales came from fans using Complete My Album, making "Tha Carter III" the fourth-best-selling album on iTunes for the year.

Could Kid Rock and AC/DC have done the same?

"They're leaving money on the table by not offering track sales," Carlson says. "I don't think that creating an economy of scarcity works. There have been a couple of examples that have been successful ... people like to hope that part of the industry is still alive. But I personally think those two are anomalies."

Superstar Pull

Carlson and other label execs say that the main reason Kid Rock and AC/DC did so well selling albums is that they're established acts with loyal fan bases. That's the same reason Radiohead's "In Rainbows" sold well as a CD, even though it could be downloaded for free.

The results for emerging acts could look very different. Atlantic Records pulled from iTunes Estelle's album "Shine" after it and the single "American Boy" showed hit potential. The album spent 17 weeks on the Billboard 200, peaking at No. 38, while "American Boy" was a top 10 iTunes download. But sales dropped when Atlantic removed singles from iTunes, and the label changed its tactics soon after.

Other executives believe that other acts could follow Kid Rock and AC/DC's approach. "Kid Rock absolutely left transactions on the table by not being on iTunes," BigChampagne's Garland says. "But did he leave money on the table? I think that's a tough case to make. Singles-driven acts must be in iTunes. For album-oriented career superstar artists, it's a strategic question worth asking. But it's not an easy call."

Where iTunes fits into album sales strategies will almost certainly be one of the main topics of 2009 and beyond. "We're still at a stage that will require a lot of experimentation," says one major-label digital executive. "You're going to see us experiment with a bunch of different things. I don't think we've figured out exactly what approach we should take."

For U2, Live Nation Deal Rocks

Band's stock sale will cost company millions; Madonna can cash in, too
Ethan Smith

The Irish rock band U2 hasn't toured since 2006, but it stands to make $25 million in a sweetheart stock deal, according to SEC filings Wednesday and people familiar with the matter.

In March, the band struck a 12-year deal with Live Nation Inc., that called for the concert promotion giant to pay U2 partly with stock. Live Nation promised to pay tens of millions of dollars to high-profile artists in exchange for several years' worth of revenue from a broad range of their work, including concerts, online fan clubs and t-shirt sales. The idea was pitched as a novel way to make money in the ailing music business.

The company had held up the stock component of the U2 deal as evidence of the band's faith in Live Nation, as well as confidence in its new business model.

But that faith was shaken Wednesday when the band moved to sell the shares, forcing Live Nation to make up an estimated $19 million in losses.,

Live Nation had guaranteed that U2 would receive $25 million for 1.6 million shares. But the current market value was just $6.1 million at the close of trading Wednesday. That leaves Live Nation on the hook for the balance, which the company said Wednesday in a SEC filing it would pay with cash on hand or borrowed money.

There could be more bad news coming from another of the company's marquee acts: Madonna. In April, Madonna is eligible to sell $25 million of stock under the terms of her contract, even though the stock's market value has plunged 83% since she struck her deal in October 2007.

Live Nation Chief Executive Michael Rapino sought to play down the significance of the stock sales. "Madonna and U2 are the only two deals that did contain this provision," he said. "The Madonna business is great, and we look forward to monetizing our investment in U2 next year."

Madonna's current "Sticky & Sweet" world tour is the pop star's first outing since she signed her 10-year, $120 million deal with Live Nation.

Live Nation expects to start recouping its investment in U2 when the band begins a planned tour next year and releases its 12th album.

Reached in London, where U2 is wrapping up work on the forthcoming album, band manager Paul McGuinness said: "We're very much in business with [Live Nation] and we're planning to tour in 2009."

Madonna and U2 were the first of six superstar acts whom Live Nation has agreed to pay hundreds of millions of dollars each for several years' worth of revenues. Jay-Z, Nickelback and Shakira are among the other artists with whom Live Nation has deals.

Challenges Remain for Amazon Digital Music Service
Antony Bruno

After its first full year selling tracks from all four major labels, Amazon's digital music store has become the second-largest a la carte service, according to industry estimates.

But it's a very distant second to iTunes. Major-label sources say that they had hoped the company would have fared better than it did. Amazon has yet to release any sales figures for digital music, and it did not respond to interview requests for this story. But Piper Jaffray financial analyst Gene Munster estimates that Amazon will sell 130 million tracks this year -- a paltry sum compared with the 2.4 billion songs iTunes is expected to sell in 2008.

Those figures are skewed by the fact that iTunes operates in more than 20 countries, while Amazon just opened its first foreign store December 3 in the United Kingdom. But analyst estimates put Amazon's digital-music market share at about 8 percent, atop the "everybody else" category of services competing with iTunes. And that figure didn't go up as the year went on.

"The market share has remained relatively stable throughout the year," NPD Group analyst Russ Crupnick said. "I didn't see anything out there that would be a major game-changer. I'm not all that surprised."

Amazon took on major challenges. Entering a market dominated by an entrenched competitor isn't easy, and the company lacks a branded device to drive sales. Apple drives iTunes sales with its iPod, as the spike in downloads seen after the holidays suggests. And outside of a brief TV campaign supporting its Pepsi Stuff, which let consumers collect points redeemable for MP3s and other purchases, Amazon didn't do much marketing.

Amazon does have a few achievements to crow about, however. Its proportion of digital album to digital single sales is twice that of iTunes, according to the NPD Group. But its album sales are boosted by its weekly discounts, which offer catalog products for as little as 99 cents.

Luring New Buyers

Labels hope that Amazon will expand the digital music market by attracting new customers. According to NPD Group surveys, only 10 percent of the music fans who bought tracks from Amazon also reported getting them from iTunes. Amazon's customers are predominantly male -- 64 percent, compared with 44 percent for iTunes. The service is also stronger with older demographics: A third of Amazon buyers are 26-35, another third 36-50. Most iTunes users are younger.

If Amazon is to grow aggressively, though, it needs to start poaching customers from iTunes. "There's an increasingly difficult challenge in getting new digital users," Crupnick said. "It's becoming a bit of a mature market. The easy pickings aren't there so much. The biggest challenge is trying to convince the person in the iTunes ecosystem to get out of it."

The labels hope that Amazon can do that next year. Piper Jaffray's Munster projects that Amazon's sales will surge 60 percent in 2009 to 208 million downloads. But labels believe that there's even more potential in the company's integration with MySpace Music and other companies like it. If Amazon can become the provider of choice for social networks aiming to sell digital music, labels say it could have an easier time challenging iTunes.

"Amazon was particularly interested in creating a seamless experience within MySpace Music," said MySpace CEO Chris DeWolfe, who added that more layers of integration are pending as the service evolves. "It's going to become more and more seamless (because) they were very serious about creating this experience and invested in it."

Amazon also made small deals this year. One allowed gamers playing "Grand Theft Auto IV" to tag songs in the soundtrack for later purchase on Amazon. Users of Google's G1 phone also have one-click access to the company's MP3 store, including integration with the popular Shazam song identifier application. Developing more such deals in 2009 will determine whether Amazon remains the leader of the also-rans or emerges as a real challenger to iTunes.

Universal Music Seeing 'Tens of Millions' from YouTube
Greg Sandoval

YouTube's traffic machine may finally be turning into a cash machine.

For the first time, there are signs that YouTube is driving significant revenue for itself and some of the video site's partners. In an interview with CNET News this week, Rio Caraeff, executive vice president of Universal Music Group's eLabs, said the largest of the top recording companies is bringing in "tens of millions of dollars" from YouTube.

"(YouTube) is not like radio, where it's just promotional," said Caraeff, who heads up Universal's digital group. "It's a revenue stream, a commercial business. It's growing tremendously. It's up almost 80 percent for us year-over-year in the U.S. in terms of our revenue from this category."
"Doug Morris, Universal's CEO, has led the industry to set up videos as a revenue stream. Since 2005, Universal has gone from making zero dollars on music videos to nearly $100 million."

Universal, the home of such acts as Akon, the Black Eyed Peas, and U2, has a two-part licensing deal with YouTube, as do the other major labels. Under the deal, the recording companies post music videos on the site and share advertising revenue with YouTube. The two companies also share ad revenue for music posted to the site by users.

"YouTube is the ideal place for labels to promote music and for fans to discover new artists and old favorites," said Chris Maxcy, YouTube's partner development director. "We're committed to being a good partner to music labels and are pleased they're having success on the site."

Caraeff declined to give specifics on Universal's deal with YouTube, but a music industry source close to the label said Universal will likely book nearly $100 million in revenue from video streaming this year. That figure includes video-streaming money from all of the company's partners, such as iMeem, MTV, and MySpace. The source said, however, that most of the cash comes from YouTube.

Universal is starting to see some significant cash from its deal with the video-sharing site for two reasons: first, YouTube's recent efforts to find a business model are working. The other is that music, by far the strongest single segment on YouTube, has always been a major draw.

"It's really coming to fruition I think in part due to YouTube's recent focus on monetization," Caraeff said, "and really trying to drive revenue around premium content more so than they have in the history of their short existence. They have finally turned their spotlight on 'How do we turn this into a business?' And that's benefiting the entire ecosystem of content owners as well."

This year, Google CEO Eric Schmidt pledged to wring more profits out of YouTube. Google paid $1.65 billion for the video-sharing powerhouse in October 2006. In the two years since, YouTube appeared to take tentative steps toward generating revenue while trying to avoid alienating users with too many ads.

This year, the company has become more aggressive. Among the long list of changes was last month's announcement that YouTube would sell keyword search terms. To make the site more attractive to advertisers as well as video producers, YouTube has improved the quality of video and rolled out a test version of a wide-screen player. More importantly, YouTube has improved the quality of its filtering technology so unauthorized copies of television shows and films can be removed quickly by copyright owners.

But the big question is whether the growth in music-video revenue says more about the music industry than it does about YouTube.

Universal's YouTube channel is overwhelmingly the largest on the video site. The record label is the all-time most viewed channel, with nearly 3 billion views. Second-place Sony BMG, the second largest recording company, trails by more than 2 billion views with 485 million total views.

Of the top 10 channels on YouTube, 7 are music related. They include channels from Warner Bros. Records, Soulja Boy, and Disney's Hollywood Records.

Only a few years ago, the record labels saw music videos as promotional vehicles only. Some argue one of the music industry's biggest mistakes was giving videos away to MTV nearly 30 years ago. Doug Morris, Universal's CEO, has led the industry to set up videos as a revenue stream. Since 2005, Universal has gone from making zero dollars on music videos to nearly $100 million.

"Certainly, in the last year the rise of free to consumer ad-supported video has become a very significant part of our business coming from a variety of areas," Caraeff said. "YouTube is driving a very large quantity of that... We have a great relationship with YouTube, and the future for us will be more than with YouTube than we're doing today.

"We're working with them on a variety of new concepts and new businesses to take the groundwork we've done in the last year and half and do a lot more with it," he added. "I wouldn't expect to see us just do business with YouTube like we used to do."

Talks Break Down; Warner Music Pulls Videos from YouTube
Greg Sandoval

Negotiations between Warner Music Group and YouTube over renewing the licensing agreement for the record label's music videos broke down Friday. Early Saturday, Warner, the third largest record label, removed videos from the Google-owned video site.

The impasse comes at a time when all four major labels, including Universal Music Group, Sony Music, and EMI, are renegotiating their licensing deals with YouTube.

"We are working actively to find a resolution with YouTube that would enable the return of our artists' content to the site," Warner said in a statement. "Until then, we simply cannot accept terms that fail to appropriately and fairly compensate recording artists, songwriters, labels and publishers for the value they provide."

YouTube has become an important revenue stream for at least one of the top labels. This week, Rio Caraeff, Universal Music's digital chief, told CNET News that YouTube has generated "tens of millions" of dollars for the recording company this year, up 80 percent from last year.

Caraeff said that Universal and YouTube enjoy a strong relationship and that the companies are trying to expand their relationship beyond music videos. A source close to Universal said that the label will likely book nearly $100 million in video-streaming revenue--most of it from YouTube.

The blog All Things Digital reported this week that while the labels are starting to make money from the deal with YouTube, the video site is not. YouTube has to pay the labels each time someone views a clip, regardless of whether it's generating any revenue, according to the blog.

By pulling out of the deal with YouTube, Warner loses access to the Web's No. 1 video site, which topped 100 million visitors in October. The site has increasingly become one of the Internet's favorite ad-supported jukeboxes. Of the top 10 YouTube channels, 7 are music related. Warner Bros. Records is the 11th largest channel.

"If we can't reach acceptable business terms, we must part ways with successful partners," Google said Friday on its blog. "For example, you may notice videos that contain music owned by Warner Music Group being blocked from the site.

But YouTube's growing prominence in music could change if the site were void of music.

Some of Warner's most popular artists, who will no longer be available on YouTube, include Led Zeppelin, Madonna, TI, Eric Clapton, REM, Red Hot Chili Peppers, and the Grateful Dead.

In-the-Works Videogames Cater to Music Fans
Antony Bruno

With more than $1 billion in sales and 50 million tracks downloaded between them -- on a base of only about 350 songs -- the "Guitar Hero" and "Rock Band" videogame franchises emerged this year as serious moneymakers for the music industry. But are they bringing in enough per track?

During a quarterly earnings call in August, Warner Music Group chairman/CEO Edgar Bronfman Jr. said he wants more money from music games like Activision's "Guitar Hero" or he'll stop licensing music. Activision CEO Bobby Kotick fired back in an interview, suggesting that labels should pay his company for promoting their music.

Next year's big-money showdown is between "Guitar Hero" and MTV Games and EA's "Rock Band," but there's plenty of action on the undercard. Among the other titles competing for music industry support and gamers' dollars are Nintendo's "Wii Music," Disney's "Ultimate Band," Acclaim's "Rockfree" and XS Games' "PopStar Guitar."

The winner of this competition may be labels and artists, who will have opportunities to feature their music more prominently than they would be able to in the big two games. The Plain White T's scored an exclusive spot on "Ultimate Band," for example, while 3 Doors Down is a featured act on "PopStar Guitar."

The Partnership

Amazon teamed up with the makers of the hit game "Grand Theft Auto IV" to let players tag any song on the soundtrack with a virtual mobile phone used by the game's protagonist. Those who did received an e-mail with more information about the song and artist and accessed a custom playlist on Amazon where they could then purchase the track.

Almost 700,000 players tagged more than 2 million songs, according to "Grand Theft Auto IV" publisher Rockstar Games, although Amazon won't divulge how many resulted in sales. But it's the first time a console game has integrated digital music purchases, and it has given other developers plenty of ideas.

The Dark Horse

When Sierra Entertainment unveiled details of its "Brutal Legend," online gamer forums went crazy with excitement. But the reaction among music executives was tepid at best -- perhaps because the game isn't about music simulation but the story of a roadie sent back in time when heavy metal gods ruled the world.

Drawing heavily on Nordic mythology and metal imagery -- and featuring voice acting from the likes of actor/musician Jack Black, Motorhead's Lemmy Kilmister and heavy metal singer-songwriter Ronnie James Dio -- the game has the names and the potential soundtrack to win big among hardcore gamers and metal fans alike. The game remains in limbo, though, as Sierra Entertainment parent company Vivendi Games and Activision complete their merger.

The Beatles

They're not available on iTunes or any other digital music service. But the Fab Four made headlines when MTV announced that it would be making a videogame featuring the group's music, history, images and characters.

Exactly what the game will look like or do is under wraps until its release in 2009. But it's expected to be an interactive product similar to "Rock Band." And the development will lay the groundwork for ways that iconic artists like the Beatles can work with games to introduce their music to new fans and let older ones experience it in a new way.

Eric Burdon Loses Battle to be the Only Animal
Daniel Boffey

Their legendary song House Of The Rising Sun helped make The Animals famous in the Sixties, until the band broke up amid much acrimony.

Now, more than 40 years later, two original members of the band have resumed battle – in a bitter fight over who can still use the famous name.

Former lead singer Eric Burdon has been locked in a legal dispute with drummer John Steel over who has the right to make it their trademark.

Burdon, 67, argued he was a living personification of the band, adding that he still performed in the UK and around the world under the names The Animals and Eric Burdon And The Animals.

But after a three-year battle, a Government trademark adjudicator has made a ruling in favour of Steel.

And as he issued his judgment, he was devastating in his assessment of Burdon, saying: ‘[He] seems to contend that he is, at least in his own mind, a rock and roll legend whose mere existence serves to keep the goodwill in the original band alive. He is, I am afraid, mistaken.’

Burdon’s lawyer had argued that he was ‘the charismatic lead singer and songwriter who has captivated the hearts and imagination of generation upon generation of teenagers the world over’. And, in a direct blast at 67-year-old Steel, she added that ‘no one remembers the drummer’.

But in his no-nonsense ruling, George Salthouse, the adjudicator at the Intellectual Property Office, said: ‘As to the former, this was not borne out by the evidence provided, and, with regard to the latter, I trust that she does not encounter Ringo.’

The legal tussle began in 2005 when Burdon, who now lives in Joshua Tree, California, filed a ‘notice of opposition’ to Steel’s application a year earlier to register The Animals as his UK trademark.

Steel hoped to use the name to sell CDs and concert tickets. But Burdon argued that it was his name that was ‘to a very large extent, synonymous with that of The Animals’.

Burdon and Steel, both originally from Gateshead, first met in the late Fifties while they were studying at art college in Newcastle.

They formed The Animals in the early Sixties with keyboard player Alan Price, guitarist Hilton Valentine and bass player Bryan ‘Chas’ Chandler.

As well as House Of The Rising Sun – in which Burdon sang ‘Oh mother, tell your children not to do what I have done’ – the band had a hit with We Gotta Get Out Of This Place, then split in 1966.

Since then, Steel, who now lives in Newcastle, had played at various reunion gigs and on reunion albums.

In 1994, the original members were inducted into America’s Rock and Roll Hall of Fame.

However, the adjudicator said there was no evidence Burdon had sought to use The Animals name in the UK, and that all evidence of his activities since 1966 showed ‘an aversion to being associated as a member of The Animals group’, with the nearest he came being performances using the name Eric Burdon And The Animals.

Mr Salthouse added: ‘To my mind, the goodwill accrued by the band during the period 1963 to 1966 would have long dissipated by February 11, 2004, the date of the application, despite the minor top-ups provided by the half-hearted reunions, re-releasing the same song on two occasions, featuring on an advertisement and two films, and being inducted into a museum in the USA.’

Instead, Mr Salthouse said, the evidence clearly showed that Steel was a founder member of the band in 1963, played with them until very shortly before the split in 1966, and played at the subsequent reunion concerts and on the reunion albums.

He added: ‘[Steel] had been using the name, sporadically, for a period of 11 years and no one else had made use of the mark in the UK.’

Burdon was ordered to pay £5,932 towards Steel’s legal costs. Steel declined to comment.

Bruni Sues Over Use of Nude Image on Bags
Bernard Grollier

French first lady Carla Bruni-Sarkozy is suing a fashion chain for selling bags emblazoned with nude images of her in the latest legal action over the presidential couple's image.

At a court hearing on Monday in the French Indian Ocean island of Reunion, Bruni-Sarkozy's lawyer said the former model was demanding 125,000 euros ($168,300) in damages from local chain Pardon which sold the bags there for a few days.

"This little-known company is using the image of a famous person in a shocking way ... for media attention," Gesche Le Fur told the court in the island's capital, Saint Denis.

Bruni-Sarkozy, 40, rose to fame as a model before becoming a pop singer. Public interest in her has surged since her whirlwind romance with President Nicolas Sarkozy, whom she married in February less than three months after they met.

The couple have repeatedly gone to court over image issues, attracting criticism that they are too focused on trivial matters.

The founder and manager of the Pardon chain, which sells clothing and fashion accessories in Reunion but does not trade in mainland France, told the court he had withdrawn the bags from stores at the weekend.

Bruni-Sarkozy's lawyer said the damages demanded were based on what the first lady's image would be worth at current modeling rates, although she specified that her client no longer wished to market her image as a model.

The bags showed a picture of Bruni-Sarkozy taken in 1993, during her modeling days. It shows her standing in a pigeon-toed pose, covering her private parts with her hands. An original print of the black-and-white photo by Michel Comte fetched $91,000 at an auction in New York in April.

The bags were on sale last week for 3 euros each. Customers were given a free bag if they spent more than five euros.

The court is expected to deliver its ruling on Thursday.

Sarkozy himself went to court in October demanding a ban on sales of a voodoo doll representing him, sold with a manual encouraging buyers to stick pins in it. An appeals court said the doll was an "offence against the personal dignity" of Sarkozy, but it would be disproportionate to ban it.

The doll court case was widely ridiculed in the French media. Sarkozy was accused of double standards by critics who recalled that, in the name of freedom of expression, he had sided with a French newspaper that printed cartoons of the Prophet Mohammad that caused worldwide uproar in 2006.

The Sarkozys also sued Irish airline Ryanair over an advert featuring Carla musing that thanks to cheap flights, her Italian relatives would be able to attend her wedding to Sarkozy.

A French court ordered Ryanair to pay symbolic damages of one euro to Sarkozy and 60,000 euros to his wife.

(Writing by Estelle Shirbon; editing by Andrew Dobbie)

FCC Cancels Meeting at U.S. Lawmakers' Request

The U.S. Federal Communications Commission said on Saturday it was canceling a December 18 meeting in response to a request by Democratic lawmakers that it pay more attention to a smooth transition to digital television early next year.

Sen. Jay Rockefeller of West Virginia and Rep. Henry Waxman of California wrote FCC Chairman Kevin Martin on Friday asking him to hold off on other FCC business to focus on the mandatory switch to digital television signals due in February.

In a statement, FCC spokesman Robert Kenny said that "in light of the letter, it does not appear that there is consensus to move forward and the agenda meeting has been canceled."

Next week's meeting had been scheduled to consider a plan for auctioning a slice of the airwaves for free Internet and proposed rules to handle disputes between cable companies and content providers -- both potentially controversial matters.

Rockefeller and Waxman said it would be "counterproductive" for the FCC to take on such issues when there already were questions about how ready it was to handle the transition to digital television.

Many lawmakers fear that the digital switch, in which about 15 percent of U.S. households will lose their current mode of television, will be troublesome because it requires consumers to buy new converter boxes to ensure they keep television service.

Signals are being converted to digital to free up airwaves for public safety uses, especially in emergencies.

(Reporting by Kim Dixon and Glenn Somerville; Editing by John O'Callaghan)

FCC Cancels Meeting for Free Internet Vote
Jennifer Guevin

The Federal Communications Commission has canceled a meeting scheduled at which it planned to vote on a controversial free Internet plan.

The group has been considering whether it should auction off 25 megahertz of wireless spectrum in the 2155MHz to 2180MHz band. In exchange for using the spectrum, the FCC would require license holders to offer some free wireless broadband service, as a way to provide free Internet access to millions of Americans who either can't afford or don't want to pay for high-speed Internet access. That Web service would have been filtered for pornography and material deemed not suitable for children. People 18 and over would have the option to opt out of the filtered service.

The FCC was set to vote on the plan at a meeting on Thursday, December 18. But the plan has been met with opposition from several top officials, wireless providers, and even civil rights groups.

In a letter sent to FCC Chairman Kevin Martin on Wednesday, U.S. Commerce Secretary Carlos Gutierrez expressed the Bush administration's opposition to the idea of imposing requirements on spectrum buyers.

"The administration believes that the (airwaves) should be auctioned without price or product mandate," Gutierrez wrote, according to The Wall Street Journal. "The history of FCC spectrum auctions has shown that the potential for problems increases in instances where licensing is overly prescriptive or designed around unproven business models."

The element of Web filtering worried at least one privacy group. "It's very troubling," Marc Rotenberg, executive director of the Electronic Privacy Information Center, told the Los Angeles Times. "A government-mandated filter at the network level means the government can block anything it finds objectionable."

Existing wireless providers objected to the plan for entirely different issues. T-Mobile USA, which spent $4.2 billion in 2006 to acquire spectrum in an adjacent band, said that opening up this spectrum would cause interference and disrupt service, a claim the FCC says it disproved in October.

And other logistical questions--such as exactly how the service would be filtered for inappropriate content and how the age of people who opted out of the filtered service would be verified--remained unanswered.

The FCC has other problems as well. Earlier this week, the House Committee on Energy and Commerce released a report accusing Martin of ignoring his responsibilities and abusing his power as FCC chairman. A detailed report released on Tuesday and stemming from a bipartisan investigation in January claims Martin manipulated and withheld information from Congress and other FCC commissioners, and ignored evidence that certain national communications programs were being grossly mismanaged. The report describes a "climate of fear" that pervades the FCC and kept some people from testifying publicly.

Sen. John Rockefeller (D-W.Va.) and Rep. Henry Waxman, (D-Calif.) on Friday sent a letter to Martin asking him to not to take action on any controversial policy proposals, according to the Journal. And on Friday night, the FCC reported it would, in fact, cancel the upcoming meeting.

Flat-Panel TV Prices Plummet
Eric A. Taub

CONSUMER electronics sellers, like car dealers, tell us every year that this is the best year to buy a new television.

And in a sense, they — the consumer electronics people, that is — have been right. Each year has brought significantly lower prices and additional features to flat-panel sets, them into 40 million American homes, 34 percent of total households in the United States, according to a study done by the Leichtman Research Group.

Television prices, like gasoline in November, have plummeted. But the comparison ends there, because the price of TVs can be expected to stay that way and even go lower. Large-screen high-definition sets can now be found for considerably less than $1,000, putting the prices of some within parity or even below those of the similar-size tube models they are designed to replace.

Three years ago, a 36-inch HDTV tube set in the 4:3 aspect ratio cost $911. “Today you can get a 32-inch flat-panel wide-screen HDTV for $649 or less,” said Randy Waynick, senior vice president of marketing for Sony Electronics. “They can’t get much cheaper. People are giving them away.”

While Mr. Waynick may speak with a salesman’s enthusiasm, the fact is that prices are lower than many would have conceived possible even a year ago. A 40-inch LCD from Sony that sold for $1,600 a year ago is now $1,000. A 32-inch Sony LCD model available at Wal-Mart cost $1,100 last year; the suggested price of its successor model is $749.

Plasma televisions offer even better deals. While prices do vary almost daily, a Panasonic 50-inch plasma display with 720p resolution was $975 on Amazon.com recently; a Samsung of the same size was $900 at Sixth Avenue Electronics; and a 42-inch 1080p resolution Samsung model was $807 at Sixth Avenue Electronics. Three years ago, the Panasonic’s predecessor cost $3,000.

“It is nothing short of amazing that a customer can get a 50-inch set for under $1,000,” said Bob Perry, Panasonic’s senior vice president for marketing. “If you said that one year ago, people would think about locking you in a room with rubber walls.”

Thanks to increasing worldwide sales and economies of scale, a wide range of large-screen HDTVs are now available for three-figure prices. At Wal-Mart, for example, 42- to 50-inch plasma and LCD sets can be found for $600 to $925. Some lesser-known brands in a 32-inch screen size are around $400.

At Costco, a Sharp 19-inch LCD costs $269, a Samsung 24-inch is priced at $450 and a Sharp 32-inch is $650.

To attract the price-conscious, Sony introduced its “M” line of televisions, designed for big box stores that “want to buy Sony without all the bells and whistles,” Mr. Waynick said.

To cut costs, the company uses 720p resolution, rather than 1080p, and less sophisticated color processing, offering a lower contrast ratio than in its more expensive sets. “Our contrast ratio is on a par with the rest of the marketplace,” Mr. Waynick said. If price is your main consideration, here are several tips on how to keep costs down and still get the best television for your money.

720P VS. 1080P If you are considering a television that is 40 inches or smaller, a less-expensive 720p resolution set is likely to produce a picture that looks as good as one from a 1080p set.

A television that can display a higher resolution is more important in bigger screen sizes, where the difference can be seen at normal viewing distances. (Only Blu-ray players can actually deliver a 1080p signal. The set will “upconvert” other program sources, like television broadcasts, to near-1080p quality.)

“Below 40 inches, 1080p is a complete waste,” said Gary Merson, editor in chief of HDGuru.com, an HDTV Web site.

VIEWING ANGLE LCD televisions tend to have smaller viewing angles than plasma sets. So if your friends are over to watch the game, those sitting on the left and right of the screen will see an image with blacks that look gray; whites that are darker; reduced contrast; and colors that have shifted.

“It’s like, ‘who changed the tint control?’ ” Mr. Merson said.

To counter that effect, Mr. Merson said, consumers should look for LCD televisions that use I.P.S., or in-plane switching technology. I.P.S. is available on Hitachi and Panasonic sets; Samsung and Sony have a similar technology called S-PVA.

INPUTS HDMI is the gold standard for connecting components to the television. It cuts down clutter by combining audio and video into one cable. Also, HDMI is required to transmit a Blu-ray image to an HDTV.

Make sure that your set has at least two or three HDMI inputs: one for your cable or satellite box and the others for your DVD/Blu-ray player and a video game machine or a video download box, like Vudu.

AUDIO Many sets have built-in surround-sound systems, but you can save money by buying a set with rudimentary sound, and then purchasing a “home theater in a box” setup for a few hundred dollars.

A home theater kit includes a DVD player, five speakers and a subwoofer, to create a cinema surround-sound experience. Recently, on Amazon.com, an entry-level Philips model was available for $160.

ALL-IN-ONES Some manufacturers are offering HDTVs with built-in DVD or Blu-ray players. As always, these combo units remain a bad idea.

If the player breaks, you will need to buy another DVD unit, or you will need to send the unit out for repair, depriving you of a television while one component is being fixed.

LESSER KNOWN BRANDS When all televisions were analog, each company made its own components to its own specifications. With the rise of digital technology, many companies simply buy hardware from the same manufacturers. Differences in picture quality come from the techniques used by each company to process the signal.

“You would be surprised at the names of the top-tier brands being built by the same factories that build our TVs,” said Rey Roque, vice president for marketing at Westinghouse, a lower-priced brand.

If budget is your prime consideration, consider buying a less-well-known brand. But before you do, check its reliability on sites like Consumer Reports (consumerreports.org). Also, find out if the company will stand behind the television once the warranty expires; and find out if you need to ship the set back to the company if it stops working. While the best-known brands have historically been more expensive, that gap is closing fast.

DEALS A number of Web sites track the best prices for HDTVs and direct you to sites that offer them. Try CNet Reviews (reviews.cnet.com), Deal News (dealnews.com), Google Product Search (google.com/products) and Price Grabber (pricegrabber.com).

Sales Growth of Flat-Panel TVs Is Expected to Slow
Eric A. Taub

Sales of flat panel TVs are going flat.

In a reversal of fortune, television sales in the United States are predicted to drop in 2009, according to a new report from DisplaySearch, a market research firm. It would be the first sales decline in at least a decade, said DisplaySearch, and the first decline in revenue since 2000.

TV makers have long argued that TVs were recession-proof because Americans would continue to buy them as a cheap way to entertain their families. But consumers are now starting to shun the LCD and plasma sets, even as prices fall sharply.

In 2009, sales of all types of TVs in North America are predicted to decline by 4 percent. LCD TV sales are expected to increase in North America by 2 percent over 2008, a fraction of the 22 percent gain in 2008 and the 77 percent rise in 2007.

“There was an unnaturally high growth in sales due to the transition to digital TV and the replacement of picture tube TVs,” said Paul Semenza, a senior vice president at DisplaySearch. “You would expect a reversion to the mean, but this is beyond that.”

Mr. Semenza began to notice a rapid drop in production from August to November. By the fall, flat-panel manufacturers in Taiwan that supply to various brands began to cut back production as name brand manufacturers needed panels only from their own facilities.

The flat-panel factories are now running at 80 percent capacity, down from the 90 percent rate of just a few months earlier. A similar shift is now happening in Korea, Mr. Semenza said.

Worldwide, LCD shipments will continue to grow about 17 percent in 2009, the market researchers predict, but almost all of that growth will come from emerging markets, where few own flat-panel sets.

LCD revenue will drop by 16 percent, while revenue from all types of TVs will fall by 18 percent. In North America, revenue will decline by 24 percent.

None of this is good news for consumers. Mr. Semenza expects that prices for LCD sets 32 inches and smaller will remain fairly stable. Retail prices on TVs 42 inches and larger will not decline as fast as they have in years past.

Some makers of the flat panels for big-screen TVs are delaying the construction of factories that produce panels more efficiently and that allow them to undercut competitors with lower prices.

Flat-Screen TV Gas 'a Climate Time Bomb'

Booming demand for flat-screen televisions could have a greater impact on global warming than the world's largest coal-fired power stations, scientists warn.

A greenhouse gas called nitrogen trifluoride, used to make the TVs, is 17,000 times more potent than carbon dioxide, said Michael Prather, director of the environment institute at the University of California, Irvine.

But no one yet knows how much of it is being released into the atmosphere by industry, a report in Britain's The Guardian said.

Prather's research shows production of the gas, which remains in the atmosphere for 550 years, is "exploding".

It is expected to double by next year, from the current 4,000 tons produced annually.

But unlike other key greenhouse gases — such as carbon dioxide, sulphur hexafluoride (SF6) and perfluorocarbons (PFCs) — emissions of the gas are not restricted under the Kyoto protocol or similar agreements, The Guardian report said.

Prather and his colleague Juno Hsu — writing in the journal Geophysical Research Letters — said this year's production of nitrogen trifluoride is equivalent to 67 million tons of carbon dioxide.

That meant the gas has "a potential greenhouse impact larger than that of the industrialised nations' emissions of PFCs or SF6, or even that of the world's largest coal-fired power plants".

Air Products, which produces the gas for the electronics industry, told New Scientist that very little nitrogen trifluoride is released into the atmosphere.

But Prather raised concerns about companies being careless with the gas, given the lack of a regulatory framework.

Tom Cruise Says he was "Arrogant" in TV Interview

Tom Cruise called his behavior on NBC's "Today" show three years ago "arrogant" and said he learned a lesson from the interview in which he dismissed psychiatry as pseudoscience.

The actor has been ridiculed for over-the-top behavior in TV interviews and generated tabloid headlines over his love life and vocal support for the Church of Scientology, which is critical of the prescription of mind- and mood-altering drugs.

He was contrite in an interview with host Matt Lauer on Monday, his first appearance on the show since the 2005 incident.

"After looking at it I really thought it's not what I intended. I thought in looking at myself that I came across as arrogant," Cruise said.

"I absolutely could have handled that better," he said.

In the 2005 interview, Lauer brought up Cruise's public dismissal of psychiatry and asked Cruise whether it was possible that psychiatry had helped people.

"I've never agreed with psychiatry, ever. Before I was a Scientologist I never agreed with psychiatry," Cruise said back then.

He also scolded Lauer, saying, "You don't know the history of psychiatry. I do."

Cruise recently admitted to People magazine he could have "handled things better" in his TV appearances and joked about his antics on Oprah Winfrey's talk show, when he leapt onto a couch in front of millions of viewers and proclaimed his love for actress Katie Holmes, now his wife.

(Reporting by Daniel Trotta; Editing by Eric Beech)

Leno on the Front Burner
Bill Carter

Jay Leno, who has lived a life of comedy, knows the rules as well as anybody who has ever stood on a stage and told jokes. “The first rule of comedy is: Don’t create anything bigger than yourself,” Mr. Leno said in an interview in the green room of “The Tonight Show.” “The trick is to keep the water just below a rolling boil so it stays in the pot a little bit longer.”

But the truth is that the comedy pot where Mr. Leno and his many competitors live — late-night television — has been simmering ever since Mr. Leno stunned the television business in 2004 by agreeing to step down from the host role where he has thrived since 1992 to make room at “The Tonight Show” for NBC’s other late-night star, Conan O’Brien, currently the host of “Late Night.”

And until last week it seemed that the pot was about to spill over into a new round of overheated competition, with Mr. Leno moving toward accepting an offer from ABC to star in a show to challenge both Mr. O’Brien and David Letterman on CBS. The deal was close enough to coming to fruition that ABC affiliates were getting word to be ready for a change to Mr. Leno in January 2010, according to what NBC was hearing from its own affiliates.

Then Mr. Leno shocked the television world again by agreeing to stay at NBC to create a new version of his show, tentatively titled “The Jay Leno Show,” at 10 every weeknight starting next September, moving from late night to prime time.

The events were not of his making, of course, as he pointed out during the interview. “Ultimately, this was NBC’s idea,” Mr. Leno said, recalling how Jeff Zucker, the chief executive of NBC Universal, approached him in 2004 with the suggestion that he leave “Tonight” in 2009. The network at that point needed to find a way to keep Mr. O’Brien from leaving and repeating an unhappy chapter in NBC’s history, when it wound up losing a late-night star it had established, Mr. Letterman, and creating a competing late-night franchise at another network — all because only one host can sit at the “Tonight Show” desk at a time.

Mr. Leno agreed, setting in motion a slowly building storm that gathered around NBC’s corporate headquarters. What had NBC done? Yes, it had retained the prized Mr. O’Brien and kept Mr. Leno in the fold, but it had also set up a chain of events that would force the late-night leader, Mr. Leno, out the door in 2010, and most likely into the arms of a competitor.

Mr. Leno did not disclose how close he really was to relocating to ABC at 11:35 each weeknight. (Under his old contract he was prohibited from engaging in formal talks with outsiders until next November, though not forbidden from listening to what they had to say.) But for months he has made references on the air to what life might be like at ABC, and the issue with ABC was close enough that he took time last week to call Robert A. Iger, the president of ABC’s parent company, Walt Disney, to break the news that he was staying at NBC.

NBC is breathing easier, but many questions remain: What kind of show will he do, and what will it mean to the network, its affiliates and the late-night lineup now to be headlined by Mr. O’Brien at 11:35 and Jimmy Fallon at 12:35?

Mr. Leno is already thinking about how to reshape his show. “The second half is the tricky part,” he said. “We want to provide as strong a lead-in as we can.” He was referring to one big gamble NBC is taking: that with all its 10 p.m. dramas gone, Mr. Leno’s show will be strong enough to deliver good audiences to local newscasts at 11, as well as to NBC’s economically essential late-night lineup.

Mr. Leno’s new contract seems to be a concession that nobody is certain how this will work out. It is a reported four-year deal, but with a two-year option. (No financial terms have been disclosed.)

“It was a mutual thing,” Mr. Leno said. “I said, you know, they’re making a huge financial commitment. If something’s just not working, well, you don’t want to be there.”

Another potential trouble spot may be guest bookings. Both Mr. Leno’s new show and Mr. O’Brien’s “Tonight Show” will be based in Hollywood. Mr. Leno said that no pressure would ever be applied to guests not to do any other shows. But he said, “I think we will have an advantage saying to press agents, ‘It’s prime time; reach a wider audience.’ ”

Hosts he considers friends — Mr. O’Brien and ABC’s Jimmy Kimmel — will compete for the same guests, Mr. Leno said, making a comparison to baseball: “Your friend is pitching; are you going to try to hit a home run? Yeah! It’s what you do.”

Still, Mr. O’Brien at least won’t have to worry about a true nightmare booking scenario on his first night at “Tonight”: Jay Leno visiting David Letterman. Mr. Leno said the Letterman show had indeed invited him to be a guest that night (June 1). “I would leave the show on Friday and do Dave on Monday,” he said, relating a plan undoubtedly hatched at a time when the Letterman show expected Mr. Leno to be leaving NBC (perhaps in an eight-cylinder huff) for ABC.

Not that it was really going to happen. “It would look like an insult to Conan,” Mr. Leno said. “I would never do that.”

An appearance with Mr. Letterman “would be fun to do sometime,” Mr. Leno said. The relationship between the two late-night titans has often resembled a production of “Who’s Afraid of Virginia Woolf?” But Mr. Leno is feeling mellow about it these days. He said he had recently seen YouTube clips of some of his guest shots on Mr. Letterman’s old NBC show.

“Doing his show in the ’80s, going on and zinging back and forth, that was the most fun for me of anything I ever did in show business,” he said of their relationship.

The last few years were less fun for Mr. Leno, partly because the agreement to step away from “Tonight” led to comments about impending retirement that he found annoying. Performing frequently is part of Mr. Leno’s life; after the interview here, he headed to Las Vegas to dish out more laugh lines at the Mirage hotel.

So why did late night’s biggest star first agree to walk away from his dream job, where he still towered over his competitors, and then to step away from late night altogether? For Mr. Leno it seems to have been a case of he’d rather not fight or switch.

“I’ve never been one of those guys, when the girl says ‘I don’t think we should see each other anymore,’ I go, ‘Why? What can I do?’ No, I’m ‘O.K., babe, I’m gone.’ ” He added: “If they want you to step back, they want you to step back. You serve at the pleasure of the king.”

Of course, king is pretty much the title Mr. Leno has won for himself with his dominance of late night. Couldn’t he have turned his royal back on NBC’s proposition?

“I could have done that, I suppose,” he said. “But then the mysterious sandbag falls on your head. I’m Italian. I know how this works.” He added: “I didn’t want to go against Conan. It’s not so much Conan; well, it’s Conan and it’s everything I’ve worked for. You don’t want to be across the street.”

Some of this trepidation clearly sprang from Mr. Leno’s previous experience with late-night turnover, in 1992, when he took criticism from some quarters for supposedly getting the “Tonight” job at the expense of Mr. Letterman, and then had to twist as NBC reconsidered and almost tossed him out.

“It’s NBC: Never Believe your Contract! Remember that?” Mr. Leno said, resurrecting a line he used in 1993. “That was the first time they were getting rid of me. So this is not new.”

If anything, this drama has had a far bigger cast. “At the time, Conan would have gone to ABC,” Mr. Leno said. “I didn’t know what Dave was going to do, whether Jon Stewart would step in for Dave, and then with Conan you’re fighting two younger guys. And so I was, ‘O.K., what do you guys want to do? Is that what you want to do?’ ”

Mr. Zucker said that everything he proposed to Mr. Leno had one goal: “I didn’t want to lose Jay.” And he proposed a lot, starting with a half-hour show at 8 p.m. “That seemed way wrong,” Mr. Leno said.

Mr. Zucker then offered a prime-time slot every Sunday night. “Once a week is death,” Mr. Leno said.

So Mr. Zucker turned to another NBC Universal property, the USA cable network. Mr. Leno could have 11 p.m. (even though that would have cut into Mr. O’Brien’s “Tonight Show”). “That sort of seemed like living in the basement of your own house,” Mr. Leno said. “I’m still old enough to think network is the place.”

When Mr. Zucker finally offered 10 p.m. weeknights, “things moved pretty quickly,” Mr. Leno said. “Five years ago this wouldn’t have been a good idea, but more people — and younger people — are going to bed at 11 o’clock because they carpool or they have to get up at 6.”

There was also value in the familiar. “When you go someplace else, you don’t know the camera people; they don’t know you,” Mr. Leno said. “It takes a long time to get into that rhythm. And then you have the parade of white guys at 11:30 all doing essentially the same show.”

Mr. Leno will be out of that parade now, or more accurately leading it. “It’s just a different model,” he said. “So it’s either a great idea or ‘Oh my God, what was that?’ ”

Majel Roddenberry, Widow of 'Trek' Creator, Dies
Robert Jablon

Majel Barrett Roddenberry, "Star Trek" creator Gene Roddenberry's widow who nurtured the legacy of the seminal science fiction TV series after his death, has died. She was 76. Roddenberry died of leukemia Thursday morning at her home in Bel-Air, said Sean Rossall, a family spokesman.

At Roddenberry's side were family friends and her son, Eugene Roddenberry Jr.

Roddenberry was involved in the "Star Trek" universe for more than four decades. She played the dark-haired Number One in the original pilot but metamorphosed into the blond, miniskirted Nurse Christine Chapel in the original 1966-69 show. She had smaller roles in all five of its television successors and many of the "Star Trek" movie incarnations, although she had little involvement in the productions.

She frequently was the voice of the ship's computer, and about two weeks ago she completed the same role for the upcoming J.J. Abrams movie "Star Trek," Rossall said.

Roddenberry also helped keep the franchise alive by inspiring fans and attended a major "Star Trek" convention each year, Rossall said.

"I think `Star Trek' will always be her legacy," Rossall said.

"Star Trek" and its successors often focused on political and philosophical issues of the day. Roddenberry and her husband, who died in 1991, believed in creating "thoughtful entertainment" and were proud of the show and the passionate devotion of its fans, Rossall said.

"My mother truly acknowledged and appreciated the fact that `Star Trek' fans played a vital role in keeping the Roddenberry dream alive for the past 42 years. It was her love for the fans, and their love in return, that kept her going for so long after my father passed away," her son said in a statement on the official Roddenberry Web site.

Born Majel Lee Hudec on Feb. 23, 1932, in Cleveland, she began taking acting classes as a child. She had some stage roles, then in the late 1950s and 1960s had bit parts in a few movies and small roles in TV series, including "Leave It to Beaver" and "Bonanza."

She met her husband in 1964 during a guest role for a Marine Corps drama he produced called "The Lieutenant." That same year, she was cast in the pilot for the "Star Trek" series as the no-nonsense second-in-command. The pilot did not appeal to NBC executives and a second pilot was made, although parts of the original later showed up in a two-part episode called "The Menagerie."

The couple married in Japan in 1969 after "Star Trek" was canceled. After her husband's death, Roddenberry continued her involvement with the "Star Trek" franchise.

She also was the executive producer for two other TV science fiction series, "Andromeda" and "Earth: Final Conflict."

Student Uses Technology to Find Stolen Xbox
Geoff Pickle

A Missouri State student was able to recover his stolen Xbox 360 by use of the console's wireless technology, the student said.

The console unit's wireless controller was still registered to the specific console, allowing the stolen merchandise to be tracked down, said Ryan Ketsenburg, a sophomore construction management major.

Ketsenburg reported the incident to the Springfield Police Department on Nov. 21 at 5:48 a.m., according to a Springfield Police Department incident report.

According to the incident report, the suspect made entry into an unlocked door and stole the gaming console. As of yet, no suspect has been identified or named, according to the report.

Ketsenburg said he had just returned from a construction management trip and that both he and his roommate were tired, so they must have forgotten to lock the door.

During the night, someone entered the room and stole the Xbox while the roommates were sleeping, Ketsenburg said.

Ketsenburg, who lives in Hutchens House, said that after his Xbox was stolen, he turned on his wireless Xbox controller and found that it was still connecting to his Xbox. Based on this discovery, Ketsenburg said he realized that his Xbox must be nearby, he said.

The controller connected to the Xbox on the fourth, fifth and sixth floors of Hutchens but not on the third floor and seventh floor, so through process of elimination, Ketsenburg said he figured out that the stolen Xbox must be on the fifth floor.

Following the controller's signal, Ketsenburg said he was able to pinpoint the room where his Xbox was stolen.

The Xbox 360 wireless controller has a 30-foot range, according to the Xbox Web site. When looking for his Xbox, Ketsenburg said the light-emitting diodes of the controller flashed when he was out of range.

The 5th floor resident assistant checked the alleged room where the stolen Xbox was and was able to find the Xbox, Ketsenburg said.

The controller was able to prove that the Xbox belonged to Ketsenburg, because the controller was able to turn on the console unit, he said.

The resident assistant called the supervisor and told Ketsenburg that withif he provided sufficient proof that the Xbox was his, he would be able to take it back, he said. There was sufficient proof, so the Xbox was given back, he said.

Ketsenburg said that the Xbox's hard drive was formatted, erasing all of his data. Ketsenburg said he was upset about that.

Ketsenburg said that, overall, he was annoyed by the series of the events that transpired.

Ketsenburg will be prosecuting the offender, he said. The incident report confirms this.

"I'm going to try to prosecute to the fullest extent of the law, because I had to follow all the rules, so let's make sure it gets done right," Ketsenburg said.

As of the time of the interview with The Standard, the offender had not visited the room in question to realize that the Xbox had been recovered, Ketsenburg said.

Officer Terry Brant responded to Ketsenburg's police call, according to the incident report.

BBC Relies on ‘Pirate’ Audio To Bring Back Lost TV Show

Back in the 60’s, archive space at the BBC was hard to come by, forcing the broadcaster to delete some of its own material. Now, a TV show that fell victim to this regime has been resurrected, with the BBC using a pirate recording of the show’s audio to bring it back to life.

BBCLogoIn these Internet and file-sharing times, it seems unthinkable that we could ever be in the position of any media becoming ‘rare’ again. No matter where material appears, it always seems to end up on the Internet and, once there, it is copied time and time again to every corner of the globe. Losing a movie, song or TV show forever should be a thing of the past - but it hasn’t always been that way.

With today’s compression and hard drive technology, we can store hundreds of movies in a very small space indeed, but before the mainstream uptake of digital technology, storing video or music was a very expensive and resource-hungry task. Recent news from the BBC gives us a taster of how difficult things had become for them in the 1960’s, with the public broadcaster finding itself squeezed by lack of funds and lack of storage space, and even having to resort to erasing TV shows it had previously made.

One such TV show that suffered was Dad’s Army, a sitcom about the Home Guard in World War 2. The series ran for a huge 80 episodes on TV and made further appearances on radio, film and stage. The show pulled in 18 million viewers an episode during the 1970’s and still appears on TV today. Last night a very special episode aired on the BBC.

Room at the Bottom, an episode presumed lost by the BBC when it was erased to save space and money over thirty years ago, appeared on TV last night. The original show was in black and white (the color version was erased, along with the audio) but experts recreated the color version from the black and white source. But what about the lost audio?

Ed Doolan MBE is a presenter on BBC Radio WM, but back in 1969 before he worked for the BBC, he was a very naughty boy. Using a reel-to-reel tape recorder, Doolan recorded many shows, including the audio from the ‘lost’ episode when it first aired, and has kept the recording ever since. Today, far from hauling him over the coals, the BBC has used Doolan’s illicit copy to help bring the show back to life.

Last night, millions of Dad’s Army fans enjoyed the ‘lost’ episode of their beloved show and you can bet that not a single one would be calling for Doolan to be sued. In the end, the ‘good’ in his piracy leads to enjoyment for millions, and that can never be a bad thing.

It’s only when we lose something that we truly appreciate its full value and, thanks to file-sharing and the Internet, we are now in the enviable position of never having to apply the words ‘rare’ or ‘lost’ to any media ever again. And even though companies want to make media less accessible with their DRM, in the longer term, no-one will thank them for locking away history.

Nascar’s Sponsors, Hit by Sticker Shock
Susanna Hamner

AT the Indianapolis Motor Speedway last July, the parking lot was filled with excited Nascar fans chugging beer, roasting pigs and exchanging drivers’ statistics.

But in an office inside the racetrack, the scene was far from celebratory. Executives of the Big Three Detroit automakers told Brian France, the Nascar chief executive and chairman, that they planned to cut their investments in the sport sharply in the 2009 racing season.

Since then, Chevrolet has said it is cutting back on advertising and sponsorship deals with 12 tracks. Ford is trimming Nascar spending by 20 percent, and Chrysler by 30 percent.

The economic crisis is hitting industries around the globe, and the pain is beginning to filter down into professional sports. Many sports may face smaller crowds and shrinking player salaries, with, of course, exceptions for stars like the Yankees pitcher C. C. Sabathia.

General Motors said in September that it wouldn’t buy any advertising time for the Super Bowl in February; earlier this year, it withdrew Cadillac’s sponsorship of the Masters golf tournament. It has also terminated its $7 million-a-year endorsement deal with Tiger Woods.

The National Basketball Association and the National Football League recently announced staff layoffs, and the Dallas Cowboys and the New York Giants and Jets of the N.F.L. are still trying to find companies willing to pay to put their names on stadiums under construction. Honda said recently that it was dropping out of Formula One and selling its team.

“The economic crisis is going to hit all sports. Every team should operate under the worst-case-scenario assumption,” says Michael E. Rapkoch, founder of Sports Value Consulting, based in Dallas. “Many sponsors’ contracts that are up for renewal this year or next probably won’t be renewed. For the long-term contracts, I won’t be surprised if they try to get out of them through bankruptcy or some other way.”

Nascar, which relies on corporate sponsorships more than other sports, is particularly vulnerable. In the 2008 racing season, 400 companies put up more than $1.5 billion to sponsor races, cars and drivers. About a third of that was provided by auto companies, which are now struggling with the economic downturn, if not possible bankruptcy.

Automakers aren’t the only ones pulling out. Longtime sponsors — including Kodak, Texaco and Domino’s Pizza — are abandoning Nascar. Even Craftsman, the Sears brand that has been the title sponsor of the truck series since it started in 1995, is cutting its ties.

And this summer, Chip Ganassi Racing shut down the team of Dario Franchitti, the 2007 winner of the Indianapolis 500, after being unable to find a sponsor for his car following his switch to Nascar.

“Many of the major sponsors pulling back have been involved in our sport for decades,” Mr. France says. “They’re making cuts, and we’re affected.”

It’s a big comedown for Nascar, which has had sizzling growth over the past decade. A multibillion-dollar TV deal in 2001 helped propel it from a regional sport that drew most of its revenue from sales of tickets and merchandise into a popular franchise with a national following.

Its top-level Sprint Cup series of 36 races draws an average of 7.8 million television viewers a race, making Nascar the second-most-watched sport, behind professional football. It can attract crowds — more than 200,000 for the Daytona 500 and Talladega — that exceed those for a Super Bowl, a World Series game and an N.B.A. finals game combined. Over all, Nascar sanctions more than 1,200 races at 100 tracks in the United States and abroad.

This year, revenue was approximately $3 billion, a 50 percent increase from 2001. That’s better than the N.F.L., the N.B.A. and the National Hockey League in the same period. Only Major League Baseball grew faster. “If you go back to 1998, there is no question Nascar has shown the biggest growth,” says David Broughton, research director of SportsBusiness Journal.

But the sport will not see those kinds of impressive numbers next season.

TV viewership has slipped in the past year or so, and so has attendance. The truck series’ official sponsor is now Camping World, the largest retailer of recreational vehicle equipment. Nascar gave the retailer a substantial discount: Camping World will pay approximately $2 million a year, half of what Craftsman is estimated to have paid. While it is gaining as well as losing sponsors, Nascar expects its take from title sponsorships to drop 20 percent next year, to about $150 million.

“We told them what we could afford,” says Marcus Lemonis, chief executive of Camping World. “They were very sensitive to us and offered an appropriate price for the market conditions.”

This kind of cost-cutting has forced the three separate entities of the sport — teams, racetracks and the privately held Nascar company — to lay off about 600 employees. Storied teams with revered family names like Dale Earnhardt Inc. and Petty Enterprises have no choice but to merge with other teams. Some teams unable to land a season’s worth of sponsors, like Doug Yates and the Wood Brothers, can afford to participate in only a handful of races.

The boom years made drivers a little spoiled, with many flying in private planes and riding in luxury motor coaches, says the longtime racer Jeff Burton. But, he added, “this is our wake-up call.”

BRIAN FRANCE, the Nascar chairman, was not born in a car, but he might as well have been. His grandfather, Bill France Sr., known as Big Bill, founded Nascar in 1948. His father, Bill Jr., who took over in 1972, built the sport into a behemoth.

Bill Jr. took Brian to races when he was still in diapers. At 14, Brian shocked fans when he marched down the stairs of a race control tower to announce to the press that the driver Donnie Allison was the winner of that day’s race, seconds after his father had flagged Richard Petty the champion. After poring over the scorecards for several hours, officials ruled the teenager correct.

When Brian France began his first season as chairman and chief executive in February 2004, he faced many doubters inside and outside the sport. Fans viewed him as a Hollywood elitist who couldn’t relate to them, the polar opposite of his father, a “good old boy” who would hang out with drivers on the track.

But the number of skeptics dwindled after Mr. France, 46, transformed a sport once fueled by moonshine and bravado into a technologically sophisticated entertainment juggernaut.

DirecTV and Sirius Satellite Radio have channels that allow fans to watch or hear a race from the vantage point of a single driver. Fans can follow a race on their computers through TrackPass RaceView on Nascar.com, using an advanced 3-D feature that lets them track a car or change the perspective. At the track, Sprint FanView is a next-generation scanner offering live audio and video, as well as real-time stats. And Sprint Cup Mobile lets fans listen to the radio broadcast over the phone.

In 2007, Mr. France persuaded Toyota to compete in the Nationwide Series and the Sprint Cup. The move to bring in a big-spending foreign competitor was controversial at the time, but it could help Nascar weather the economic storm now that the Detroit Big Three are pulling back so many dollars.

Perhaps Mr. France’s greatest achievement occurred, when, as executive vice president, he persuaded track owners to consolidate their broadcast rights in 2001, striking a six-year, $2.4 billion deal with Fox and NBC. Viewers across the country could see the sport every week. In 2005, Mr. France reached a $4.48 billion, eight-year TV deal with ABC-ESPN, Fox, the Speed Channel and TNT.

Intent on keeping his sport blazing hot, he took a risk that may be contributing to the sport’s current woes. Determined to make Nascar mainstream, he promoted it in a way that may have alienated some of his core fans, industry experts say.

Rustic racetracks have been replaced with stadiums filled with skyboxes for the wealthy and corporate sponsors. The tough, good-old-boy personalities of the drivers Richard Petty and Dale Earnhardt have shifted to the clean-cut, movie-star-handsome images of drivers like Jimmie Johnson and Carl Edwards. In 2003 the legendary Winston Cup Series title was bought out by Nextel, now Sprint Nextel, ending 32 years of the tobacco brand’s sponsorship.

“Brian comes across as somebody who wants to be known as a great C.E.O., like a Paul Tagliabue or a David Stern,” says David Poole, a journalist and co-author of “Nascar Essential: Everything You Need to Know to Be a Real Fan.” “He wants to talk about the sport’s marketing successes. The sport needs leadership in that area, but among those who live with grease under their fingernails, that goes over poorly.” Perhaps that’s why, this year, Nascar announced an effort to go back to its roots, including allowing drivers to express themselves.

Yet, to keep the sport growing, Mr. France needed to garner a wider audience in different demographic groups. More than half of Nascar fans earn less than $50,000 a year. As the economy worsens, many fans could have a hard time justifying plopping down $92, on average, each race weekend.

Mr. France’s most radical change to the sport — the “Car of Tomorrow” — has backfired. Concerned with safety, Mr. France in 2000 required all teams to start developing vehicles with such strict safety standards that drivers could survive crashes that would once have been fatal. He required that all teams drive such models exclusively by this year.

The move to create safer vehicles gained momentum when Dale Earnhardt, father of Dale Earnhardt Jr., was bumped while rounding the final turn at the Daytona 500 in February, 2001; he slammed into a wall and was killed.

The Car of Tomorrow was also intended to cut costs and level the playing field financially by requiring all teams to drive variations of the same car. But since its introduction last year, the car has pushed up costs just when revenue has been going down.

Tracks have different lengths, grades, shapes and layouts; in the past, large teams had about 20 cars that were used for varying conditions. But the gradual introduction of the new car forced teams to maintain old fleets and crews on top of new ones.

Mr. France acknowledges that costs have risen for some teams, but says that the new car should save teams substantial money in the long run.

The worst problem, though, is that the Car of Tomorrow has made sponsors feel that their cars are indistinguishable. In the past, a Nascar Dodge did not look much like a Dodge on the street, but fans wouldn’t mistake it for a Ford Fusion. Now the cars look identical. Jimmie Johnson’s Chevy looks the same as Carl Edwards’s Ford, Kasey Kahne’s Dodge and Brian Vickers’s Toyota.

Car manufacturers say they are exploring ways to make their race cars look more like models in dealer showrooms.

WHEN the 2009 season starts in February, there are likely to be more empty seats in the stands, fewer cars on the tracks, blank spots on cars where logos used to flash, and smaller crews in the pits. Even Toyota is cutting its Nascar budget by 10 to 20 percent.

To avert a collapse of the sport, analysts say, Nascar must push through sweeping changes to its business model, like reducing sponsorship rates, cutting back the number of races and trimming the distances of some of them. For example, a handful of premier races would run the traditional 400 or 500 miles, but the rest would become 200- or 300-mile events.

Some analysts say Nascar should take cues from the N.F.L. and explore placing sponsor dollars in an official pool, with each team receiving an equal share. They also suggest a salary cap.

Mr. France has announced that there will be no preseason and in-season testing at its tracks next year, saving teams an estimated $1 million a car. He is also toying with the idea of cutting back the number of team members who can come to the races, which would save each team an additional $500,000.

In hindsight, Mr. France’s broadcast deal, which brings in about $500 million a year, may be the main thing that saves Nascar from ruin.

“We’ve got to work hard and be willing to sacrifice,” says Jeff Burton, the driver. “We’re going to definitely struggle next year and the following.”

Impoverished NKorea Gets New Mobile Network
Kelly Olsen

An Egyptian telecoms giant launched an advanced mobile phone network in North Korea on Monday, the latest attempt to introduce a global symbol of personal freedom into one of the world's most tightly controlled societies.

Orascom Telecom Chief Executive Naguib Sawiris and North Korean officials celebrated the start of the country's third generation mobile network in the capital Pyongyang, the Korean Central News Agency reported in a dispatch from Pyongyang.

Cairo-based Orascom Telecom Holding SAE has been building the network after announcing a $400 million deal in January. The company said Sunday it was officially launching the third generation mobile service.

Orascom runs networks in the Middle East, Africa and South Asia and has not shied from investing in places considered challenging and politically unpredictable, such as Zimbabwe.

It was not clear what controls, if any, would be imposed on the network, which will provide phone service and data capability in a country that has tested a nuclear device but, relies on international assistance to feed its people.

The KCNA report provided no details on the terms of service or who would be able to utilize it.

Broadcaster APTN showed footage of Orascom's Sawiris cutting a ribbon to applause by North Koreans at a ceremony and later being shown what appeared to be a control center by a North Korean official.

Sawiris said that the company's aim was for a "network that will accommodate the 22 million people" in North Korea, adding he was "surprised and astonished by the quality" and "advancement of the Korean people," APTN's footage showed.

Andrei Lankov, a Russian expert on North Korea at Kookmin University in Seoul, cautioned against reading too much into the new network, noting previous "optimistic predictions" that cell phone use heralded a loosening of controls.

"North Korea doesn't want its people to talk too much between themselves," he said.

Authorities restrict the population's access to all but officially sanctioned sources of information and Internet access is limited to top government and military officials.

North Korea has experimented with cell phones before and has a working mobile phone network, though not as advanced as what Orascom has built.

But visitors to the country say cell phone use by North Koreans has virtually disappeared since a mysterious train explosion in 2004 that killed an estimated 160 people. The blast was believed to have been sparked by a train laden with oil and chemicals that hit power lines.

Experts are divided about whether the crackdown on mobile phone use was related to the train explosion or was just an example of the regime getting nervous about losing control of its people.

In 2005, Thailand's then foreign minister Kantathi Suphamongkhon said North Korean officials said they believed mobile phones were used as a tool to gather intelligence by countries hostile to the hardline regime.

Orascom has said it intends to cover Pyongyang and most of the country's major cities during the first year of service. Subscriber fees had yet to be announced.

Paik Hak-soon, an expert on North Korea at South Korea's Sejong Institute, a policy think tank, said only elites will likely have access to the network, at least in the beginning.

"Government, party, military people are the big beneficiaries," he said.

Traders and people involved in the economy may also be allowed to use it, Paik said.

North Korea, where Paik estimates per capita gross domestic product is less than $500 a year, has taken some steps to liberalize its dilapidated economy in recent years and has courted foreign investment.

Despite its general impoverishment and trouble feeding itself without international assistance, the country has consistently emphasized the importance of science and technology in its development.

Most famously, it carried out an underground nuclear blast two years ago amid an international standoff with the United States and other countries trying to convince it to abandon atomic development. It also has an active missile program.

Despite the crackdown on cell phone use, North Koreans have found ways to make calls illicitly, such as using networks in neighboring China. North Korean defectors in South Korea say they can regularly contact relatives.

Orascom said it was the first foreign telecommunications company to be awarded a North Korean commercial telecommunications license and would have exclusive rights for four years.

The 25-year-license to operate in the reclusive state was granted to Orascom subsidiary CHEO Technology JV Co., which is 75 percent owned by the Egyptian firm. The remaining stake is held by state-owned Korea Post and Telecommunications Corp.


AP Business writer Tarek El-Tablawy in Cairo contributed to this report.

And Now for a World Government
Gideon Rachman

I have never believed that there is a secret United Nations plot to take over the US. I have never seen black helicopters hovering in the sky above Montana. But, for the first time in my life, I think the formation of some sort of world government is plausible.

A "world government" would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.

So could the European model go global? There are three reasons for thinking that it might.

First, it is increasingly clear that the most difficult issues facing national governments are international in nature: there is global warming, a global financial crisis and a "global war on terror".

Second, it could be done. The transport and communications revolutions have shrunk the world so that, as Geoffrey Blainey, an eminent Australian historian, has written: "For the first time in human history, world government of some sort is now possible." Mr Blainey foresees an attempt to form a world government at some point in the next two centuries, which is an unusually long time horizon for the average newspaper column.

But – the third point – a change in the political atmosphere suggests that "global governance" could come much sooner than that. The financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.

Barack Obama, America's president-in-waiting, does not share the Bush administration's disdain for international agreements and treaties. In his book, The Audacity of Hope, he argued that: "When the world's sole superpower willingly restrains its power and abides by internationally agreed-upon standards of conduct, it sends a message that these are rules worth following." The importance that Mr Obama attaches to the UN is shown by the fact that he has appointed Susan Rice, one of his closest aides, as America's ambassador to the UN, and given her a seat in the cabinet.

A taste of the ideas doing the rounds in Obama circles is offered by a recent report from the Managing Global Insecurity project, whose small US advisory group includes John Podesta, the man heading Mr Obama's transition team and Strobe Talbott, the president of the Brookings Institution, from which Ms Rice has just emerged.

The MGI report argues for the creation of a UN high commissioner for counter-terrorist activity, a legally binding climate-change agreement negotiated under the auspices of the UN and the creation of a 50,000-strong UN peacekeeping force. Once countries had pledged troops to this reserve army, the UN would have first call upon them.

These are the kind of ideas that get people reaching for their rifles in America's talk-radio heartland. Aware of the political sensitivity of its ideas, the MGI report opts for soothing language. It emphasises the need for American leadership and uses the term, "responsible sovereignty" – when calling for international co-operation – rather than the more radical-sounding phrase favoured in Europe, "shared sovereignty". It also talks about "global governance" rather than world government.

But some European thinkers think that they recognise what is going on. Jacques Attali, an adviser to President Nicolas Sarkozy of France, argues that: "Global governance is just a euphemism for global government." As far as he is concerned, some form of global government cannot come too soon. Mr Attali believes that the "core of the international financial crisis is that we have global financial markets and no global rule of law".

So, it seems, everything is in place. For the first time since homo sapiens began to doodle on cave walls, there is an argument, an opportunity and a means to make serious steps towards a world government.

But let us not get carried away. While it seems feasible that some sort of world government might emerge over the next century, any push for "global governance" in the here and now will be a painful, slow process.

There are good and bad reasons for this. The bad reason is a lack of will and determination on the part of national, political leaders who – while they might like to talk about "a planet in peril" – are ultimately still much more focused on their next election, at home.

But this "problem" also hints at a more welcome reason why making progress on global governance will be slow sledding. Even in the EU – the heartland of law-based international government – the idea remains unpopular. The EU has suffered a series of humiliating defeats in referendums, when plans for "ever closer union" have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic.

The world's most pressing political problems may indeed be international in nature, but the average citizen's political identity remains stubbornly local. Until somebody cracks this problem, that plan for world government may have to stay locked away in a safe at the UN.

Richard Topus, a Pigeon Trainer in World War II, Dies at 84
Margalit Fox

In January 1942, barely a month after Pearl Harbor, the United States War Department sounded a call to enlist. It wasn’t men they wanted — not this time. The Army was looking for pigeons.

To the thousands of American men and boys who raced homing pigeons, a popular sport in the early 20th century and afterward, the government’s message was clear: Uncle Sam Wants Your Birds.

Richard Topus was one of those boys. He had no birds of his own to give, but he had another, unassailable asset: he was from Brooklyn, where pigeon racing had long held the status of a secular religion. His already vast experience with pigeons — long, ardent hours spent tending and racing them after school and on weekends — qualified him, when he was still a teenager, to train American spies and other military personnel in the swift, silent use of the birds in wartime.

World War II saw the last wide-scale use of pigeons as agents of combat intelligence. Mr. Topus, just 18 when he enlisted in the Army, was among the last of the several thousand pigeoneers, as military handlers of the birds were known, who served the United States in the war.

A lifelong pigeon enthusiast who became a successful executive in the food industry, Mr. Topus died on Dec. 5 in Scottsdale, Ariz., at the age of 84. The cause was kidney failure, his son Andrew said.

Richard Topus was born in Brooklyn on March 15, 1924, the son of Russian Jewish immigrants. Growing up in Flatbush, he fell in love with the pigeons his neighbors kept on their rooftops in spacious coops known as lofts. His parents would not let him have a loft of his own — they feared it would interfere with schoolwork, Andrew Topus said — but he befriended several local men who taught him to handle their birds. Two of them had been pigeoneers in World War I, when the United States Army Pigeon Service was formally established.

Pigeons have been used as wartime messengers at least since antiquity. Before the advent of radio communications, the birds were routinely used as airborne couriers, carrying messages in tiny capsules strapped to their legs. A homing pigeon can find its way back to its loft from nearly a thousand miles away. Over short distances, it can fly a mile a minute. It can go where human couriers often cannot, flying over rough terrain and behind enemy lines.

By the early 20th century, advances in communications technology seemed to herald the end of combat pigeoneering. In 1903, a headline in The New York Times confidently declared, “No Further Need of Army Pigeons: They Have Been Superseded by the Adoption of Wireless Telegraph Systems.”

But technology, the Army discovered, has its drawbacks. Radio transmissions can be intercepted. Triangulated, they can reveal the sender’s location. In World War I, pigeons proved their continued usefulness in times of enforced radio silence. After the United States entered World War II, the Army put out the call for birds to racing clubs nationwide. Tens of thousands were donated.

In all, more than 50,000 pigeons served the United States in the war. Many were shot down. Others were set upon by falcons released by the Nazis to intercept them. (The British countered by releasing their own falcons to pursue German messenger pigeons. But since falcons found Allied and Axis birds equally delicious, their deployment as defensive weapons was soon abandoned by both sides.)

But many American pigeons did reach their destinations safely, relaying vital messages from soldiers in the field to Allied commanders. The information they carried — including reports on troop movements and tiny hand-sketched maps — has been widely credited with saving thousands of lives during the war.

Mr. Topus enlisted in early 1942 and was assigned to the Army Signal Corps, which included the Pigeon Service. He was eventually stationed at Camp Ritchie in Maryland, one of several installations around the country at which Army pigeons were raised and trained. There, he joined a small group of pigeoneers, not much bigger than a dozen men.

Camp Ritchie specialized in intelligence training, and Mr. Topus and his colleagues schooled men and birds in the art of war. They taught the men to feed and care for the birds; to fasten on the tiny capsules containing messages written on lightweight paper; to drop pigeons from airplanes; and to jump out of airplanes themselves, with pigeons tucked against their chests. The Army had the Maidenform Brassiere Company make paratroopers’ vests with special pigeon pockets.

The birds, for their part, were trained to fly back to lofts whose locations were changed constantly. This skill was crucial: once the pigeons were released by troops in Europe, the Pacific or another theater, they would need to fly back to mobile combat lofts in those places rather than light out for the United States. Mr. Topus and his colleagues also bred pigeons, seeking optimal combinations of speed and endurance.

After the war, Mr. Topus earned bachelor’s and master’s degrees in business from Hofstra University. While he was a student, he earned money selling eggs — chicken eggs — door to door and afterward started a wholesale egg business. In the late 1950s, Mr. Topus became the first salesman at Friendship Food Products, a dairy company then based in Maspeth, Queens; he retired as executive vice president for sales and marketing. (The company, today based in Jericho, N.Y. and a subsidiary of Dean Foods, is now known as Friendship Dairies.)

In the 1960s and early ’70s, Mr. Topus taught marketing at Hofstra; the C. W. Post campus of Long Island University; and the State University of New York, Farmingdale, where he started a management-training program for supermarket professionals. In later years, after retiring to Scottsdale, he taught at Arizona State University and was also a securities arbitrator, hearing disputes between stockbrokers and their clients.

Besides his son Andrew, of Chicago, Mr. Topus is survived by his wife, the former Jacqueline Buehler, whom he married in 1948; two other children, Nina Davis of Newton, Mass.; and David, of Atlanta; and four grandchildren.

Though the Army phased out pigeons in the late 1950s, Mr. Topus raced them avidly till nearly the end of his life. He left a covert, enduring legacy of his hobby at Friendship, for which he oversaw the design of the highly recognizable company logo, a graceful bird in flight, in the early 1960s.

From that day to this, the bird has adorned cartons of the company’s cottage cheese, sour cream, buttermilk and other products. To legions of unsuspecting consumers, Andrew Topus said last week, the bird looks like a dove. But to anyone who really knew his father, it is a pigeon, plain as day.

News About News, in 140 Characters
Jenna Wortham

With staff changes and reductions across the media industry, even a blog post can be too time-consuming a way to announce who is in and out of a job. That is why a public relations employee turned to the instant-blogging platform Twitter to create The Media Is Dying, a Twitter feed that documents media hirings and firings in one-sentence bursts of text.

“These sorts of layoffs are unheard-of,” said the stream’s founder, who spoke on the condition of anonymity to preserve his sources in the industry. “It’s gotten insane to keep up with who was moving around and changing beats.”

Initially, The Media Is Dying was accessible only to select Twitter members, as the feed was intended to help those in the P.R. industry stay on top of the revolving entries in their address books. But requests to be included flooded the founder, who decided to go public three weeks ago. Since then, the stream, maintained at twitter.com/themediaisdying by its founder and seven volunteers from the industry, has garnered more than 3,000 subscribers.

The stream tries to confirm the tips it receives; if something cannot be verified, it is posted and labeled as rumor.

Sites like MediaBistro, Gawker and The Poynter Institute’s Romenesko blog have long provided an overview of the comings and goings of the media industry. But since Twitter limits posts to 140 characters, The Media Is Dying sidesteps commentary to deliver the bare minimum — a recent post simply read: “Kim Masters has been let go at NPR.” The feed has even broken a few stories, with reports of layoffs at Adweek and Brandweek posted before they appeared on traditional media sites.

Jim Romenesko, an industry expert for media news, isn’t fazed by the new kid on the block. “The more the merrier,” he said. http://www.nytimes.com/2008/12/15/bu...15twitter.html

Colo. Teen Pleads Guilty in 'Mortal Kombat' Death

A Colorado man has pleaded guilty in connection with the death of his girlfriend's half-sister during an apparent imitation of the "Mortal Kombat" video game.

The Weld County prosecutor's office says 18-year-old Lamar Roberts pleaded guilty Monday to knowingly causing a death through child abuse.

Prosecutors say Roberts and 17-year-old Heather Trujillo were baby-sitting Zoe Garcia a year ago. They say they kicked, hit and slammed the girl to the floor.

Trujillo pleaded guilty in May to negligently causing a death through child abuse. She must complete six years in Colorado's youth offender system.

Sentencing for Roberts is set for January.

Murder Suspect Recites Hamlet in Film

American exchange student Amanda Knox, perhaps the most famous murder suspect in Italy, is featured in a prison movie reciting the famous "To be, or not to be" speech from Shakespeare's Hamlet, the director told Reuters.

The movie -- which has yet to be publicly screened -- features 12 female inmates including the 21-year-old Knox, who has been held in jail for over a year over the murder of her British flatmate Meredith Kercher in the university town of Perugia.

"This is one of the cultural activities that inmates get to do," said the director of the publicly-financed film, Claudio Carini, who in the past has also directed theater productions for female inmates.

Prosecutors say Knox, her boyfriend and a third suspect fatally stabbed Kercher in the neck in November last year after trying to force her into joining an orgy. The case has riveted Italians and received wide cover in British and American media.

The suspects all deny wrongdoing.

Carini estimated that Knox, a former student at University of Washington in Seattle, is on screen for just under 5 minutes of the 55-minute production, which he described as a non-linear "fantasy" film about the life of inmates.

During that time, Knox acts in both Italian and English, reciting the famous speech from Hamlet in which Shakespeare's character contemplates the pains of life and his fear of death.

"She does the 'to be or not to be' (speech)," Carini said.

The film, which could premiere next month, also features other foreign inmates, including jailed women from Eastern Europe and South America, and some Italians, he said.

(Reporting by Phil Stewart, editing by Paul Casciato)

Governments Line Up to Bail Out DRAM Makers

DRAM makers are facing one of the worst downturns in their history
Dan Nystedt

DRAM makers are facing one of the worst downturns in their history and governments around the world are lining up to help companies through the mess.

Taiwan, Germany and South Korea all appear poised to offer some assistance to their DRAM chip makers. The need could not be greater. Long before the global financial crisis hit, DRAM makers suffered steep sales declines due to a glut of their chips.

DRAM prices are now at rock bottom and companies are cutting back production instead of making more chips at such steep losses. The next few weeks will be the best time in years to buy new DRAM.

But for DRAM companies and governments, problems have worsened. A few of these heavily indebted chip makers are running out of cash, and whereas a company failure would help rivals by wiping out some excess production and boosting prices, it could also have broader economic repercussions for the banks and investors that supported them.

"This industry is going through a critical stage," said Ben Tseng, a vice president at Taiwanese DRAM maker ProMOS Technologies.

"DRAM is a very important part of the PC industry supply chain," he added. Every PC requires several of the chips to store programs and data as they're being used. More DRAM is made every year than any other kind of chip in the world, so much so that the chips are traded on global spot markets just like commodities such as oil and gold.

The chip makers' problems are indicative of global woes. Easy lending terms and a bright view of the future prompted them to build too many new DRAM factories. Much of the new output was aimed at Microsoft's Windows Vista OS. The OS requires more memory per PC than older OSs, and DRAM companies hoped Vista would be a blockbuster, sending people scurrying to buy new laptops and PCs or to upgrade memory in existing machines.

But those hopes faded as Vista sales failed to meet expectations. A new reality set in. Without strong PC sales to soak up all the excess DRAM pouring out of new factories, chip prices plummeted and companies started losing money.

The financial crisis has added to DRAM misery by making loans harder to come by and prompting some creditors to ask for early debt repayment. Now the situation appears to be further worsening because economic woes in many countries are causing consumers to rein in spending, particularly on PCs, where most DRAM chips end up.

"The first quarter is likely to be the worst first quarter for the PC in its history," said Jenny Lai, analyst at CLSA Asia Pacific Markets in Taipei. She estimates that unit PC shipments will likely decline 20 percent to 25 percent in the first quarter.
Such a decline would spell disaster for some DRAM makers.

Taiwanese DRAM companies have been posting losses since around the middle of last year. Total losses this year for the five biggest memory chip makers hit NT$94.8 billion (US$2.85 billion) as of the end of the third quarter.

Germany's Qimonda AG made a net loss of EUR1.48 billion (US$1.95 billion) in the nine months to June 30, and has delayed latest quarterly earnings report pending a hoped-for deal with the German state government of Saxony. The company will run out of cash in the first quarter of next year unless it finds new investors or a strategic partner, or the DRAM industry takes a turn for the better, it said.

There are no signs of a DRAM price upturn on the horizon.

DRAM makers globally have already shut down older factories, reduced production, and asked employees to take unpaid leave, early retirement or salary cuts to help stem losses.

The spot price of the most popular DRAM, 1G-bit DDR2 (double date rate, second generation) chips that run at 667MHz, had fallen to US$0.59 per chip on Friday, according to online clearinghouse DRAMeXchange Technology. The price is well below the estimated $1.30 to $1.50 it costs to make each chip.

"December is guaranteed to be even weaker as seasonal demand all but stops from the second week, and January 2009 will not be much of an improvement," said Gartner in its Semiconductor DQ Monday report this week.

In Taiwan, ProMOS faces the most severe cash crunch and on Wednesday said it had applied to the government for relief. The company is not alone. The government estimates that Taiwanese DRAM makers have borrowed NT$400 billion to NT$420 billion (US$12.18 billion to US$12.62 billion) from local banks to fund new factories.

The huge amount of loans has made DRAM an even bigger dilemma for Taipei. Allowing DRAM makers to fail could have serious consequences for banks on the island as well.

Taipei last month launched a task force headed by top government officials, including the vice president and premier, to figure out how best to deal with the problem. Direct cash injections have been ruled out in favor of low-interest loans and other forms of support.

"I would say there is more or less a near consensus," said ProMOS's Tseng, but he quickly added that his company is not asking for free money.

"We are asking for access to loans," he said. "This is not a handout. The government will get paid back."

Eric Tang, a vice president at Taiwan's largest DRAM maker, Powerchip Semiconductor, said a plan to defer payments on loan principal would be enough for his company, and added that "we welcome any financial assistance the government can provide."

South Korean memory chip maker Hynix Semiconductor faces a situation less dire than its Taiwanese and German counterparts, but needs cash nevertheless.

The company asked creditors for and received a pledge for additional loans of up to 800 billion Korean won (US$590.2 million). Failure to gain this injection may bring in direct government aid, South Korean Minister of Knowledge Economy Lee Youn-ho told reporters in Seoul.

The situation for Hynix is politically sensitive.

The company received a multi-billion dollar bailout in the form of loans from South Korean government-backed banks in 2001-2002 that led to anti-competition tariffs from the U.S., E.U. and Japan. The tariffs had little real impact on Hynix and have mostly been lifted, but many companies at the time grumbled that, had Hynix failed, the DRAM industry overall would have returned to health because, minus Hynix's output, DRAM prices might have rebounded.

Trade sanctions are less likely this time around because governments around the world are talking about bailouts for a variety of industries, such as the U.S. with its auto makers. But Hynix is proactively stating that the loans are coming from creditors, not the government. Creditors, though, include banks from the previous bailout.

The future of the DRAM industry, beyond bailouts, appears to be a sticking point, at least in Taiwan.

DRAM makers have already lost billions of dollars, yet with worsening global economic growth and slowing PC sales, it's not clear when the DRAM market will revive. Officials in Taipei say they're trying to determine how much money its companies will need and how long the funds will sustain them, assuming a bad economy. The government hopes to avoid putting money into a company that may end up failing anyway.

Analysts say that the failure of one or two DRAM makers could lift chip prices, but that prices may not make a sustainable recovery until PC demand revives. And a revival in PC demand in the current environment is seen as plain wishful thinking.

Toshiba to Launch First 512GB Solid State Drive (SSD)

Toshiba said Thursday that it will show off a new line up of NAND-flash-based solid state drives with the industry's first 2.5-inch 512GB SSD.

The drive is based on a 43 nanometer Multi-Level Cell NAND and claims to offer a high level of performance and endurance for use in notebooks as well as gaming and home entertainment systems.

"The solid state drive market is evolving rapidly, with higher performance drives to meet market requirements, and differentiated product families targeted for appropriate applications", said Toshiba Semiconductor VP Kiyoshi Kobayashi.

"This new 43nm SSD family balances value/performance characteristics for its targeted consumer applications, through use of MLC NAND and an advanced controller architecture."

It has a maximum sequential read speed of 240MB per second and maximum sequential write speed of 200MBps meaning faster boot and application loading times. The drive also offers AES data encryption to prevent unauthorized data access.

Samples of the second-gen drives will be available to during the first quarter of 2009 meaning that ultraportable SSD-packing computers, such as the MacBook Air or the Lenovo X300 may offer the larger capacity towards the end of the year but Toshiba doesn't expect to ramp up mass production until the second quarter.

Google Wants Its Own Fast Track on the Web
Vishesh Kumar and Christopher Rhoads

The celebrated openness of the Internet -- network providers are not supposed to give preferential treatment to any traffic -- is quietly losing powerful defenders.

Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.

At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same -- nobody is supposed to jump the line.

But phone and cable companies argue that Internet content providers should share in their network costs, particularly with Internet traffic growing by more than 50% annually, according to estimates. Carriers say that to keep up with surging traffic, driven mainly by the proliferation of online video, they need to boost revenue to upgrade their networks. Charging companies for fast lanes is one option.

One major cable operator in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality.

"If we did this, Washington would be on fire," says one executive at the cable company who is familiar with the talks, referring to the likely reaction of regulators and lawmakers.

Separately, Microsoft Corp. and Yahoo Inc. have withdrawn quietly from a coalition formed two years ago to protect network neutrality. Each company has forged partnerships with the phone and cable companies. In addition, prominent Internet scholars, some of whom have advised President-elect Barack Obama on technology issues, have softened their views on the subject.

The contentious issue has wide ramifications for the Internet as a platform for new businesses. If companies like Google succeed in negotiating preferential treatment, the Internet could become a place where wealthy companies get faster and easier access to the Web than less affluent ones, according to advocates of network neutrality. That could choke off competition, they say.

For computer users, it could mean that Web sites by companies not able to strike fast-lane deals will respond more slowly than those by companies able to pay. In the worst-case scenario, the Internet could become a medium where large companies, such as Comcast Corp. in cable television, would control both distribution and content -- and much of what users can access, according to neutrality advocates.

The developments could test Mr. Obama's professed commitment to network neutrality. "The Internet is perhaps the most open network in history, and we have to keep it that way," he told Google employees a year ago at the company's Mountain View, Calif., campus. "I will take a back seat to no one in my commitment to network neutrality."

But Lawrence Lessig, an Internet law professor at Stanford University and an influential proponent of network neutrality, recently shifted gears by saying at a conference that content providers should be able to pay for faster service. Mr. Lessig, who has known President-elect Barack Obama since their days teaching law at the University of Chicago, has been mentioned as a candidate to head the Federal Communications Commission, which regulates the telecommunications industry.

The shifting positions concern some purists. "What they're talking about is selling you the right to skip ahead in the line," says Ben Scott, policy director of Free Press, a Washington-based advocacy group. "It would mean the first part of your business plan would be a deal with AT&T to get into their super-tier -- that is anathema to a culture of innovation."

Advocates of network neutrality believe it has helped the Internet drive the technology revolution of the past two decades, creating hundreds of thousands of jobs.

The concept of network neutrality originated with the phone business. The nation's longtime telephone monopoly, nicknamed Ma Bell, and its regional successors were prohibited from giving any public phone call preference in how quickly it was connected. When the Internet first boomed in the 1990s, content largely traveled via telephone line, and the rule survived by default.


The carriers picked up the unflattering nickname "dumbpipes," underscoring their strict noninterference in the Internet traffic surging over their networks. The name heightened resentment among the carriers toward the soaring wealth of the content providers, such as Amazon.com Inc., that couldn't exist without the networks of the telecom and cable companies.

In August 2005, amid a deregulatory environment, the FCC weakened network neutrality to a set of four "guiding principles." The step had the effect of making the FCC's power to enforce network neutrality subject to interpretation, emboldening those looking for ways around it.

Stirring the waters further, major phone companies including AT&T and Verizon announced they intended to create new fast lanes on the Internet -- and would charge content companies a toll to use it. They claimed Internet companies had been getting a free ride.

That unleashed a firestorm of criticism. A diverse group including Internet companies Google, Microsoft and Amazon joined the likes of the Christian Coalition, the National Rifle Association and the pop singer Moby in what they characterized as a fight to "save the Internet." The coalition claimed such steps could endanger freedom of speech.

Advocates of network neutrality also claimed that dismantling the rule would be the first step toward distributors gaining control over content, since they could dictate traffic according to fees charged to content providers. The fortunes of a certain Web site, in other words, might depend on how much it could pay network providers, rather than on its popularity.

That concern would grow if the carriers themselves offer content, which some have tried, with mixed success. AT&T, the country's largest broadband provider, recently launched its own online video service, called VideoCrawler, to compete with YouTube and others.

"One way AT&T can win that competition is to give their own video service preferential treatment on their network," says Robert Topolski, a networking engineer based in Portland, Ore. An AT&T spokesman says the company has no plans to give VideoCrawler preferential treatment on its network.

Mr. Topolski discovered that Comcast was slowing a video file-sharing service called BitTorrent. That discovery eventually led to sanctions against Comcast by the FCC. Comcast has appealed the decision, arguing the FCC did not have the authority to make such a ruling.

In 2006, Microsoft felt strongly enough about the issue that it wrote Congress to declare that saving network neutrality "could dictate whether the U.S. will continue to lead the world in Internet-related technologies."

The debate eventually reached a stalemate. Legislation to codify network neutrality failed to pass, and carriers backed off their plans for a tiered Internet.

During his presidential campaign, Mr. Obama spoke frequently about the Internet, which was a critical tool in his grass-roots effort to reach new voters, and the importance of network neutrality. "Once providers start to give privilege to some Web sites and applications over others, then the smaller voices get squeezed out," he told Google employees a year ago when he campaigned at the company. "And then we all lose."

Obama Advisers

But some of those who advise the new president on technology have changed their view on network neutrality. Stanford's Mr. Lessig, for one, has softened his opposition to variable service tiers. At a conference, he argued that carriers won't become kingmakers so long as the faster service at a higher price is available to anyone willing to pay it.

"There are good reasons to be able to prioritize traffic," Mr. Lessig said later in an interview. "If everyone had to pay the same rates for postal service, than you wouldn't be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer."

Some telecom experts say that broadband is the most profitable service offered by phone and cable companies, and they are simply trying to offset declining revenue from their traditional phone business.

In the two years since Google, Microsoft, Amazon and other Internet companies lined up in favor of network neutrality, the landscape has changed. The Internet companies have formed partnerships with phone and cable companies, making them more dependent on one another.

Microsoft, which appealed to Congress to save network neutrality just two years ago, has changed its position completely. "Network neutrality is a policy avenue the company is no longer pursuing," Microsoft said in a statement. The Redmond, Wash., software giant now favors legislation to allow network operators to offer different tiers of service to content companies.

Microsoft has a deal to provide software for AT&T's Internet television service. A Microsoft spokesman declined to comment whether this arrangement affected the company's position on network neutrality.

Amazon's popular digital-reading device, called the Kindle, offers a dedicated, faster download service, an arrangement Amazon has with Sprint. That has prompted questions in the blogosphere about whether the service violates network neutrality.

"Amazon continues to support adoption of net neutrality rules to protect the longstanding, fundamental openness of the Internet," Amazon said in a statement. It declined to elaborate on its Kindle arrangement.

Amazon had withdrawn from the coalition of companies supporting net neutrality, but it recently was listed once again on the group's Web site. It declined to comment on whether carriers should be allowed to prioritize traffic.

Yahoo now has a digital subscriber-line partnership with AT&T. Some have speculated that the deal has caused Yahoo to go silent on the network-neutrality issue.

An AT&T spokesman said the company should be able to strike any deal it sees fit with content companies. Yahoo said in a statement that carriers and content companies "should find a consensus on how best to ensure that Americans have access to a world-class Internet."

Google Connections

Google, with its dominant market position and its perceived ties to the Obama team, may hold the most sway. One of President-elect Obama's most visible supporters during the campaign was Eric Schmidt, Google's chief executive officer. Mr. Schmidt remains an adviser during the transition.

Google's proposed arrangement with network providers, internally called OpenEdge, would place Google servers directly within the network of the service providers, according to documents reviewed by the Journal. The setup would accelerate Google's service for users. Google has asked the providers it has approached not to talk about the idea, according to people familiar with the plans.

Asked about OpenEdge, Google said only that other companies such as Yahoo and Microsoft could strike similar deals if they desired. But Google's move, if successful, would give it an advantage available to very few.

The matter could come to a head quickly. In approving AT&T's 2006 acquisition of Bell South, the FCC made AT&T agree to shelve plans for a fast lane for 30 months. That moratorium expires in the middle of next year. A Democratic lawmaker has already promised new network-neutrality legislation early in 2009. And a new chairman of the FCC could take a stricter position on forcing companies to comply with network neutrality.

Richard Whitt, Google's head of public affairs, denies the company's proposal would violate network neutrality. Nevertheless, he says he's unsure how committed President-elect Obama will remain to the principle.

"If you look at his plans," says Mr. Whitt, "they are much less specific than they were before."

Google Says It Still Stands by Net Neutrality

Google Inc. denied that it had reversed its stance on the issue of ''Net neutrality'' and dismissed a story in Monday's edition of The Wall Street Journal on the subject as ''confused.''

Citing undisclosed sources, the newspaper reported that Google had been in talks with major cable and phone companies about getting preferential treatment for traffic to and from its sites.

That would conflict with the principle of Net neutrality, under which carriers traditionally give the same treatment to traffic from different sites. The Federal Communications Commission has voiced support for the principle, and sanctioned Comcast Corp. this year for slowing some types of file-sharing traffic. Google has been a vocal supporter of Net neutrality.

Richard Whitt, Google's Washington-based telecom and media counsel, wrote in a blog post early Monday that the Journal's report is apparently based on a misunderstanding of the company's offer to place so-called ''edge servers'' within the networks of Internet service providers.

Such servers store Google content frequently requested by subscribers, such as YouTube videos. When subscribers request the content from Google, it can be transmitted from the local servers rather than from Google's central servers.

That approach cuts down on network traffic and speeds response times. It is already widely employed by other companies, like Akamai Technologies Inc. and Limelight Networks Inc., which act as ''edge servers for hire.'' Edge servers are not widely considered to violate Net neutrality.

''Google remains strongly committed to the principle of Net neutrality, and we will continue to work with policymakers in the years ahead to keep the Internet free and open,'' Whitt wrote on his blog.

Wall Street Journal spokesman Robert Christie said the paper stood by its story. The story's reporters did not return calls for comment.

Google Off List of 20 Most Trusted Companies
Deborah Gage

Facebook, Apple, Yahoo, Verizon and FedEx for the first time have made an annual ranking of the top 20 most trusted companies in the United States.

Google, however, dropped off the list, released today by the Ponemon Institute and TRUSTe in San Francisco, as did Countrywide Financial, Bank of America (which acquired Countrywide) and Weight Watchers.

Financial companies were tarred by the subprime mortgage crisis and the subsequent meltdown of investment banks on Wall Street, said Dr. Larry Ponemon, who conducted the survey, but not all financial companies were equally hit.

Nationwide retained its place as the ninth most trusted company, and U.S. Bank and eLoan managed to stay in the top 20, although both dropped a few places.

At No. 1, for the fourth year in a row, was American Express, followed by eBay, IBM, Amazon and Johnson & Johnson.

This is the fifth year the survey has been conducted.

The Ponemon Institute got 6,500 people - weighted by age, gender and household income to match the U.S. census - to name the five companies they trusted most and least.

Concern about privacy is higher than ever, the survey showed. Less than half of consumers - 45 percent - feel they have control over their personal information. That's down from 48 percent last year and 56 percent in 2006.

More than 60 percent said identity theft negatively affects how they think about a company, and more than half get concerned when a company sends notifications of data breaches.

"Consumers are getting more astute about" privacy, said Fran Maier, the CEO of TRUSTe, which evaluates online privacy practices.

Ponemon said some companies, like IBM, might be trusted because they have big brands; others, like Apple, because consumers like their products.

He speculated that people felt sorry for Yahoo because of its difficulties with Microsoft and Google, neither of which made the list.

"Google (and Microsoft) suffer from big company syndrome," Ponemon said. "People figure that if you're big and collecting data, there must be an issue."

In general, Ponemon said, companies that are seen by consumers as most trusted do tend to have good privacy practices.

Facebook's chief privacy officer, Chris Kelly, said the company has worked hard to earn people's trust by giving Facebook users more choices over what happens to their personal information.

"It shouldn't be binary, where you either reveal a piece of data to everyone on the Internet or Facebook or not at all," he said. "We think people want to share more information, but they want choices."

Half of the top 20 this year have won seals of approval by TRUSTe, which co-sponsored the survey but had nothing to do with conducting it.

At the top

These are the most trusted companies for privacy.2008 ranking 2007 ranking

1. American Express 1. American Express
2. eBay 2. Charles Schwab
3. IBM 3. IBM
4. Amazon 4. AOL
5. Johnson & Johnson 5. Amazon

6. Hewlett-Packard/U.S. Postal Service 6. Johnson & Johnson
7. Procter & Gamble 7 U.S. Postal Service
8. Apple 8. eBay
9. Nationwide 9. Procter & Gamble/Nationwide
10. Charles Schwab 10. Google

Source: The Ponemon Institute


Yahoo Limits Retention of Personal Data
Miguel Helft

Yahoo, the Internet search company, said Wednesday that it would limit the time it holds identifiable personal information related to searches to 90 days to address the growing concerns of privacy advocates and government regulators.

Yahoo’s new data retention policy is the most restrictive among major search engines in the United States and is certain to put pressure on rivals like Google and Microsoft to shorten the time they keep information about their users.

Previously, Yahoo kept search logs for 13 months. In September, Google began to strip out portions of the personally identifiable information related to searches after nine months. Microsoft keeps the information for 18 months.

European regulators had been asking major American Internet search engines to reduce the time they hold identifiable personal information to six months. Microsoft said recently that it would agree to such a standard if its rivals also went along.

Anne Toth, vice president for policy at Yahoo, said that the company chose an even shorter time period to “take the issue of the table.” Ms. Toth said she hoped that the new policy would make Yahoo more attractive to users who were concerned about privacy.

“We certainly hope that taking a leadership position in this will differentiate us even further,” Ms. Toth said.

But it is not clear that stronger privacy protections are enough of a selling point with consumers to make then switch search engines. Last year, Ask.com introduced a new feature called AskEraser, which allows users to search anonymously, and which the company said would help it increase its audience. However, Ask.com’s share of the search market has remained relatively stagnant. Google is the dominant search engine.

Under the new policy, Yahoo will delete the last eight digits of the numeric Internet Protocol address associated with a search query after 90 days. It will also alter so-called cookie data related to each search log and strip out any personal information, like a name, phone number, address or Social Security number, from the query. Yahoo also said that its new policy would extend to other types of data it collects, like page views, page clicks, ad views and ad clicks.

Major search engines have said they need to retain personal data, in part, to provide better services, like more customized ads and more personalized searches. Ms. Toth said Yahoo determined it could begin deleting certain data after 90 days without affecting the quality of services is provides to users, advertisers and publishers.

Privacy advocates said that the new policy was a step in the right direction and credited the change to pressure from European regulators.

“As much as the U.S. search firms talk about how they are improving their practices, I think they are really afraid that the Europeans are going to bring an enforcement action under European privacy laws,” said Marc Rotenberg, executive director of the Electronic Privacy and Information Center. “That’s where the push is really coming from.”

Mr. Rotenberg also said that stripping out eight digits from the I.P. address would not guarantee that queries would be anonymous. He compared it with stripping out the last two digits of a telephone number.

Under pressure from advocates and regulators, American search companies over the last 18 months have been gradually shortening the time they retain personal data. Still, they remain behind others. In the Netherlands, a small search engine called IXQuick has promised to delete I.P. addresses after 48 hours and was commended for doing so by European regulators.

Microsoft and Google could not immediately be reached for comment.

Australian Court Serves Documents Via Facebook

The big question about Facebook is does it have any valuable commercial application? Well it seems that the courts have found one.

Today in what appears to be a first in Australia and perhaps the world, Master Harper of the ACT Supreme Court ordered that a default judgement could be served on defendants by notification on Facebook.

A default judgement is given by the court where the defendant does not appear in court to defend the case. Once the plaintiff has been awarded the default judgement by the court, the plaintiff must then locate the defendant and serve the judgement on them.

Usually this is done by way of personal service or the mailing of the judgement to the defendant's home. However, service can be difficult where the defendant is not easily located.

Courts do allow service by way of email and in the recent Sonny Bill Williams and NRL matter, the court made an order for "substituted service" by allowing certain court documents to be served on Sonny Bill by text message to his mobile phone. But Facebook is a new one.

Master Harper ordered that the defendants in the case could be validly served by the plaintiff sending a message by computer to the Facebook pages of both defendants informing them of the entry of and the terms of the judgement.

Australian courts are regarded as being amongst the most technologically advanced in the world, and this innovation goes to further that claim.

The Great Porn War

Clive Hamilton is keen to establish he is not a wowser. He did, after all, strip naked at Jim Cairns's Down to Earth hippie festival in 1974 and fought the good '60s fight against "neurotic Victorian sexual mores" in his younger years. He even volunteers that he has no problem with non-violent erotica. "If it treats all parties in a non-objectified way, then tell me where I can get it."

But Hamilton, a prominent left-leaning intellectual, wants the Rudd Government to crack down on what he sees as the virtual Wild West - "a cowboy culture that thinks itself beyond the reach of normal social control".

After investigating internet porn with Michael Flood in 2003, a shocked Hamilton called for serious action to shield young people from the extreme and violent porn swirling around the internet. He may just be about to get what he wants.

Stephen Conroy, the Minister for Broadband, Communications and the Digital Economy, is pushing hard to introduce mandatory filtering at the internet service provider (ISP) level. A live pilot study into such a scheme's viability is under way.

The proposed filtering system would have two tiers. The first mandatory tier would block illegal material, chiefly child pornography. The second voluntary tier would block pornography that is legal but inappropriate for children.

The Rudd Government miscalculated if it thought public outrage over Bill Henson's photographs of nude children would help strip political downsides from a debate about making the internet a more child-friendly place - or that those opposed to filtering would be too intimidated to demur for fear of being labelled soft on pedophilia.

Several ISPs - including Australia's largest, Telstra - have declined to take part in the content filtering trial. The adult industry lobby group Eros, describing internet filtering as "the last straw", has launched the Australian Sex Party. The Greens and Liberals have stated they will almost certainly block any legislation to introduce mandatory filtering. And who knows how many netizens, incandescent with cyber-rage at the prospect of the Government deciding what they can and can't see, have mobilised on- and offline in ways not seen before?

The online activist network GetUp! was overwhelmed by protesting phone calls and emails. Eighty-five thousand people have signed an online anti-filtering petition and $40,000 has been donated to fund an online ad campaign against mandatory filtering.

Jerry Hutchinson, the national resources manager for the Digital Liberty Coalition, which organised public protests across capital cities last Saturday, says: "Grassroots organisations have sprung up all around the country over this."

Much of the debate has centred on effectiveness. Not only is the filter an act of censorship, say critics, but it won't work and, indeed, will make the internet less effective because it will slow it down. Critics claim it will inevitably block sites that shouldn't be blocked and fail to block sites that should be blocked.

Pro-filtering advocates such as the Family First senator, Stephen Fielding, aren't dissuaded by technical difficulties.

"We need to make sure we don't have a situation where the internet is so slow that no one uses it, but the other extreme is that we shouldn't filter anything. That's just ridiculous. This is material that is already illegal according to the classification board which, in any other medium, would automatically be blocked. Family First has been pushing for this for years.

"At least this Government is prepared to trial it and the technology over the coming years will get better and better."

This isn't ultimately a debate over whether a filtering system can or can't be made to work effectively. It's a power struggle, with profound social, political and economic implications, over whether the internet in Australia will remain far less lightly regulated by the state than preceding forms of media.

"It could go either way," says Colin Jacobs, the vice-chairman of Electronic Frontiers Australia, a group that has been promoting free speech on the internet since 1994. "Either this is the last gasp of government attempting to censor the internet - and it is going to run into the same sorts of technological and legal brick walls previous attempts have - or the Government will have succeeded in getting their hooks into the internet.

"And then you can be absolutely sure that every special interest group will be lining up to have their particular bugbear dealt with. The copyright lobby will be first in line to have file sharing websites banned. Then you've got two gentlemen with significant influence due to the balance of power in the Senate - Senator [Nick] Xenophon, who is against internet gambling, and Senator Fielding, who would be against all adult material on the internet. It's not panic mongering to say that; these people are on the record."

GetUp!'s Ed Coper agrees. "Part of the reason we got involved in this was defending our turf in terms of online freedoms. We are an online advocacy organisation and rely on an accessible, unimpeded internet to allow Australians to have their say on a range of important issues.

"Even before the testing began we heard talk of things like euthanasia, anorexia and online gambling websites being raised as bargaining chips between the key members of the Government and the Senate."

Hamilton regards as overreaction the often-levelled charge by bloggers that Australia is on a slippery slope to Chinese-style censorship. "I'm not saying there aren't some legitimate concerns but some of the claims are so over the top that it makes you wonder what is really going on with internet libertarians," he says.

Conroy, a socially conservative Catholic, and his urgers on the religious right may be doing some cost-benefit analysis, assessing the future electoral consequences of having so antagonised the nation's previously quiescent porn consumers.

Fiona Patten, chief executive of Eros, says 1500 people have signed up as members of the Australian Sex Party since its launch last month. "Most of them [are] under 30 and half of them [are] women.

"Four million Australians consume porn and we've got 1000 sex shops across the nation that we hope to set up as branches of the party. Community attitudes to sex have relaxed enormously but politicians' attitudes have if anything tightened. Well, we've learnt our lesson from Family First. We're going to be running candidates for federal and state upper houses and making sure our constituency's voice is heard."

There is also the question of whether Labor has needlessly wedged itself over filtering, upsetting its tech-savvy, educated, middle-class constituency over an issue that has so far barely registered with the Howard Battler mums and dads it was presumably hoping to impress.

"The ALP has got to be very careful about not alienating that [progressive] supporter base on these kinds of issues," GetUp's Coper observes. "What you might term the wet liberal voters are up for grabs. A lot of them walked away from the Howard government and will now be asking themselves, given the Rudd Government's social conservatism, where they have left to turn."

Censorship battles always generate strange alliances and unpredictable political dynamics. Many members of the business community, worried about degrading the effectiveness and speed of the internet, have lined up with the blogosphere and civil libertarians, as has Nick Minchin, Conroy's opposite number and the Coalition leader in the Senate.

"That's the problem with having this sort of highly centralised, Government-mandated nationwide filtering system," he recently told the Herald. "The argy-bargy that would result over what is in and what is out strikes me as being almost impossible to manage."

Minchin would be mindful of the ridicule heaped on his former colleague Richard Alston for boasting in 1999 that he had banned porn on the internet after making it illegal for Australian adult websites to be hosted inside this country. The websites simply arranged to be hosted overseas, illustrating the difficulties any national government faces in trying to control the World Wide Web.

So far, Conroy's public backers are mostly limited to conservative Christian organisations such as the Australian Christian Lobby and some child protection groups such as Child Wise. And Hamilton, who is frustrated he is the only significant figure on the Left currently arguing against the "unthinking libertarianism" unleashed in '60s and '70s.

In the past, Hamilton could have relied on anti-porn feminists lining up with him. When mass dissemination of the VCR enabled easy access to porn movies in the mid-'80s, feminists in and outside government successfully campaigned to severely restrict the legal availability of X-rated videos. Those restrictions remain in place, if little enforced, to this day.

Similarly, in 1992, Australia's censorship board, the Office of Film and Literature Classification, clamped down on porn magazines after a picture of a woman in what appeared to be a dog collar on the cover of People magazine prompted feminist uni students to protest in the streets. But as both sides of the argument acknowledge, gen Y women - born after 1980 - consider internet porn, by and large, as unremarkable and unobjectionable. Says Catharine Lumby, feminist academic and pornography researcher: "There's strong evidence the young generation of women are far more comfortable consuming non-violent sexual material. The figures suggest that around 25 per cent of porn consumers in the 18-30 age range are female." Hamilton concedes gen Y is "much less exercised about porn" than previous generations.

Which rather raises the question of whether the fight over internet censorship is an ironic restaging of the generational battles of the late '60s with Boomers now in the role of The Man.

Coper is not convinced that is the case, pointing out many of GetUp!'s members are baby boomers. "The internet has been very liberating because it is completely democratic; everyone can be equal online. There's a proliferation of voices, especially new, young voices, rather than just the few voices that have traditionally dominated society.

"That is by its very nature threatening to the established power structure," Coper says. "But society has a constant struggle in terms of governments responding to changing social norms and desires. In the '60s those battles were pitched in the streets. Now they're fought on the internet."

Conroy's office refused several Herald invitations to discuss the filtering system.

Telstra Kicked Out of NBN by Federal Government
Ry Crozier

Telstra’s controversial NBN ‘proposal’ has been formally excluded from the RFP process by the Federal Government in a sensational development that has fuelled speculation on whether or not the incumbent will be given a lifeline to bid.

In a hastily arranged briefing this morning, CEO Sol Trujillo informed analysts of the exclusion, but said that Telstra remained hopeful that either Senator Conroy or the Cabinet would allow the telco back to the negotiating table.

It has been widely speculated that Telstra submitted a proposal - rather than a full bid - to get a seat at that table, however the decision allegedly taken by the expert panel last night has effectively canned this strategy.

“The government has the power under the existing RFP process to keep Telstra in,” a Telstra spokesperson said.

“For that reason we assume they don’t wish to have us in there, and the expert panel will continue its work without Telstra’s involvement. It’s a matter for the government [whether they bring us back in].”

Trujillo added: “In our view this is all part of the process.

“If the Minister chooses to only take the recommendations of the panel then that’s a choice he has or he may choose to determine that the panel’s recommendations aren’t practical or doable and he may choose to re-engage with Telstra at that point.

“We don’t know - we’re not speculating - but in the meantime we’re getting on with what we need to do to compete,” said Trujillo.

According to Trujillo, Telstra was not given an opportunity to present its case to the NBN expert panel over the weekend. It had widely been tipped that presentations from the bidders were to begin this past weekend.

The reasoning allegedly given by the Commonwealth for the exclusion is that Telstra did not include a plan for how to involve small and medium enterprises (SMEs) in the building of the NBN when Telstra lodged its NBN proposal on 26 November.

Trujillo argued that Telstra ‘has fully complied with the RFP requirements which did not require a SME Plan to be lodged as part of the RFP Proposal itself and that the Commonwealth has used a peripheral issue to exclude Telstra’.

He said that Telstra had not had a chance to seek personal clarification from the Minister on why the proposal had been excluded.

“We just received notification [from the expert panel] last night,” said Trujillo.

“Theoretically we can’t have a conversation [with Conroy] because we’ve been under the gag process. We want a follow-up on their thinking, because we‘re a bit surprised they‘re seeking this course of action on a triviality,” he said.

Trujillo said Telstra had submitted an SME plan to the expert panel on December 4th.

Read on for more of Telstra's responseTrujillo is also banking on the alleged inexperience of some of the bidders to give Telstra a second chance at the network build.

“The panel and [Department of Communications] staff have decided to explore alternatives to Telstra in more detail and they can do that,” said Trujillo.

“We all need to be mindful that most of these alternative entities don’t have the staff, engineering capabilities or resources to get started and then to build a network of this magnitude. It’s a highly complex project that will be hotly contested.”

He continued: “The RFP process leads only to the minister getting a recommendation. The minister can talk to whoever he wants to after the expert panel submits their report. He can decide to take to cabinet any proposal he chooses.”

Trujillo said if Telstra was excluded from the NBN for good, that it had other plans and strategies in place that were in the interests of both shareholders and customers.

In particular, Telstra may be forced to rely on further development of its Next G network if the government not only excludes the incumbent from the process, but passes legislation to prevent them from building parallel infrastructure. However, Trujillo seemed fairly confident that this wouldn’t happen.

“If that were done it would put Australia in a unique category with North Korea and Cuba and put us in violation with WTO requirements,” said Trujillo.

“If it were to happen, though, wireless would be our primary broadband play.”

FBI Taps Cell Phone Mic as Eavesdropping Tool
Declan McCullagh and Anne Broache

The FBI appears to have begun using a novel form of electronic surveillance in criminal investigations: remotely activating a mobile phone's microphone and using it to eavesdrop on nearby conversations.

The technique is called a "roving bug," and was approved by top U.S. Department of Justice officials for use against members of a New York organized crime family who were wary of conventional surveillance techniques such as tailing a suspect or wiretapping him.

Nextel cell phones owned by two alleged mobsters, John Ardito and his attorney Peter Peluso, were used by the FBI to listen in on nearby conversations. The FBI views Ardito as one of the most powerful men in the Genovese family, a major part of the national Mafia.

The surveillance technique came to light in an opinion published this week by U.S. District Judge Lewis Kaplan. He ruled that the "roving bug" was legal because federal wiretapping law is broad enough to permit eavesdropping even of conversations that take place near a suspect's cell phone.

Kaplan's opinion said that the eavesdropping technique "functioned whether the phone was powered on or off." Some handsets can't be fully powered down without removing the battery; for instance, some Nokia models will wake up when turned off if an alarm is set.

While the Genovese crime family prosecution appears to be the first time a remote-eavesdropping mechanism has been used in a criminal case, the technique has been discussed in security circles for years.

The U.S. Commerce Department's security office warns that "a cellular telephone can be turned into a microphone and transmitter for the purpose of listening to conversations in the vicinity of the phone." An article in the Financial Times last year said mobile providers can "remotely install a piece of software on to any handset, without the owner's knowledge, which will activate the microphone even when its owner is not making a call."

Nextel and Samsung handsets and the Motorola Razr are especially vulnerable to software downloads that activate their microphones, said James Atkinson, a counter-surveillance consultant who has worked closely with government agencies. "They can be remotely accessed and made to transmit room audio all the time," he said. "You can do that without having physical access to the phone."

Because modern handsets are miniature computers, downloaded software could modify the usual interface that always displays when a call is in progress. The spyware could then place a call to the FBI and activate the microphone--all without the owner knowing it happened. (The FBI declined to comment on Friday.)

"If a phone has in fact been modified to act as a bug, the only way to counteract that is to either have a bugsweeper follow you around 24-7, which is not practical, or to peel the battery off the phone," Atkinson said. Security-conscious corporate executives routinely remove the batteries from their cell phones, he added.

FBI's physical bugs discovered

The FBI's Joint Organized Crime Task Force, which includes members of the New York police department, had little luck with conventional surveillance of the Genovese family. They did have a confidential source who reported the suspects met at restaurants including Brunello Trattoria in New Rochelle, N.Y., which the FBI then bugged.

But in July 2003, Ardito and his crew discovered bugs in three restaurants, and the FBI quietly removed the rest. Conversations recounted in FBI affidavits show the men were also highly suspicious of being tailed by police and avoided conversations on cell phones whenever possible.

That led the FBI to resort to "roving bugs," first of Ardito's Nextel handset and then of Peluso's. U.S. District Judge Barbara Jones approved them in a series of orders in 2003 and 2004, and said she expected to "be advised of the locations" of the suspects when their conversations were recorded.

Details of how the Nextel bugs worked are sketchy. Court documents, including an affidavit (p1) and (p2) prepared by Assistant U.S. Attorney Jonathan Kolodner in September 2003, refer to them as a "listening device placed in the cellular telephone." That phrase could refer to software or hardware.

One private investigator interviewed by CNET News.com, Skipp Porteous of Sherlock Investigations in New York, said he believed the FBI planted a physical bug somewhere in the Nextel handset and did not remotely activate the microphone.

"They had to have physical possession of the phone to do it," Porteous said. "There are several ways that they could have gotten physical possession. Then they monitored the bug from fairly near by."

But other experts thought microphone activation is the more likely scenario, mostly because the battery in a tiny bug would not have lasted a year and because court documents say the bug works anywhere "within the United States"--in other words, outside the range of a nearby FBI agent armed with a radio receiver.

In addition, a paranoid Mafioso likely would be suspicious of any ploy to get him to hand over a cell phone so a bug could be planted. And Kolodner's affidavit seeking a court order lists Ardito's phone number, his 15-digit International Mobile Subscriber Identifier, and lists Nextel Communications as the service provider, all of which would be unnecessary if a physical bug were being planted.

A BBC article from 2004 reported that intelligence agencies routinely employ the remote-activiation method. "A mobile sitting on the desk of a politician or businessman can act as a powerful, undetectable bug," the article said, "enabling them to be activated at a later date to pick up sounds even when the receiver is down."

For its part, Nextel said through spokesman Travis Sowders: "We're not aware of this investigation, and we weren't asked to participate."

Other mobile providers were reluctant to talk about this kind of surveillance. Verizon Wireless said only that it "works closely with law enforcement and public safety officials. When presented with legally authorized orders, we assist law enforcement in every way possible."

A Motorola representative said that "your best source in this case would be the FBI itself." Cingular, T-Mobile, and the CTIA trade association did not immediately respond to requests for comment.

Mobsters: The surveillance vanguard

This isn't the first time the federal government has pushed at the limits of electronic surveillance when investigating reputed mobsters.

In one case involving Nicodemo S. Scarfo, the alleged mastermind of a loan shark operation in New Jersey, the FBI found itself thwarted when Scarfo used Pretty Good Privacy software (PGP) to encode confidential business data.

So with a judge's approval, FBI agents repeatedly snuck into Scarfo's business to plant a keystroke logger and monitor its output.

Like Ardito's lawyers, Scarfo's defense attorneys argued that the then-novel technique was not legal and that the information gleaned through it could not be used. Also like Ardito, Scarfo's lawyers lost when a judge ruled in January 2002 that the evidence was admissible.

This week, Judge Kaplan in the southern district of New York concluded that the "roving bugs" were legally permitted to capture hundreds of hours of conversations because the FBI had obtained a court order and alternatives probably wouldn't work.

The FBI's "applications made a sufficient case for electronic surveillance," Kaplan wrote. "They indicated that alternative methods of investigation either had failed or were unlikely to produce results, in part because the subjects deliberately avoided government surveillance."

Bill Stollhans, president of the Private Investigators Association of Virginia, said such a technique would be legally reserved for police armed with court orders, not private investigators.

There is "no law that would allow me as a private investigator to use that type of technique," he said. "That is exclusively for law enforcement. It is not allowable or not legal in the private sector. No client of mine can ask me to overhear telephone or strictly oral conversations."

Surreptitious activation of built-in microphones by the FBI has been done before. A 2003 lawsuit revealed that the FBI was able to surreptitiously turn on the built-in microphones in automotive systems like General Motors' OnStar to snoop on passengers' conversations.

When FBI agents remotely activated the system and were listening in, passengers in the vehicle could not tell that their conversations were being monitored.

Malicious hackers have followed suit. A report last year said Spanish authorities had detained a man who write a Trojan horse that secretly activated a computer's video camera and forwarded him the recordings.

Pellicano Sentenced to 15 Years in Prison
Brooks Barnes

Anthony Pellicano, a private investigator whose client list once included many Hollywood stars, was sentenced on Monday to 15 years in prison for his role in an illegal wiretapping enterprise.

The sentence, from Judge Dale S. Fischer of Federal District Court, was in line with what prosecutors had recommended. Mr. Pellicano, 64, already in custody, was found guilty in two different trials earlier this year on 78 charges, including wiretapping, racketeering and wire fraud. He and his two co-defendants were also ordered to pay a fine of $2 million.

A court-appointed attorney for Mr. Pellicano sought leniency, citing in part a financial struggle by his client to provide for an autistic son as a cause for his behavior. “I have taken full and complete responsibility,” Mr. Pellicano said in the courtroom, standing in shackles.

The sentencing brings to a close the criminal chapter of a courtroom drama that has stretched on for two years. The investigation of Mr. Pellicano began when an entertainment journalist, Anita M. Busch, was threatened in June 2002 by an associate of the private investigator after she wrote damaging articles about Michael S. Ovitz, once a prominent talent agent.

The investigation into the threat, which uncovered Mr. Pellicano’s wiretapping, seized Hollywood’s imagination with courtroom testimony revealing stars like Chris Rock as the beneficiaries of Mr. Pellicano’s illicit trade and other stars like Sylvester Stallone the victims. Ultimately, however, few industry players were charged.

Mr. Pellicano still must contend with a number of civil lawsuits that were delayed during the criminal proceedings. Those cases largely involve victims of wiretapping seeking damages for incidents in which private conversations were recorded.

Ms. Busch spoke at the sentencing, bitterly outlining the suffering that she said Mr. Pellicano caused her. “I no longer had my career, my peace of mind,” she said.

Uh-oh: Gossip Site Buys Up Moguls' Dot-Com Names
Caroline McCarthy

In what's probably one part prank and one part ironic statement, New York society-pages site Cityfile announced Friday that over the past few months it has been quietly snapping up domain names corresponding to the people it covers.

You may not have heard of many of the people on the list: the obsessively name-dropping Cityfile's terrain is more focused on Gotham's business and media leaders than the likes of Britney and Paris. But among those on the list are Warner Music chief Edgar Bronfman Jr. (Cityfile now owns edgarbronfmanjr.com), Greycroft Partners' Alan Patricof, and Nerve.com founder Rufus Griscom.

Domain name speculation has been the subject of much debate for over a decade now, but the gossip site doesn't plan to simply hoard them (and there's no indication yet as to whether the site plans to sell them back to the notable people in question at a premium). The domain names now redirect to the celebrities' Cityfile-created profiles, which are rather comprehensive listings of all sorts of both savory and unsavory details pertaining to the person in question. That means more traffic--and ad revenue--for Cityfile itself. Quite shrewd of them. But there's also an ironic twist to it.

"Given the lengths to which prominent New Yorkers go to control their public profiles, you'd think they would have purchased their domain names by now," the site explained. "It's a $4 investment, which we're pretty sure billionaires like Jonathan Tisch, Steve Feinberg or Edgar Bronfman, Jr. can afford, even if this is the greatest depression ever."

Three words: Ha, ha, ha.

"Hobbit" Controversy Makes Top 100 Science Stories

The December 2008 issue of Discover magazine included in its top 100 science stories of the year studies that back the “new species” theory of the 18,000-year-old hominid found on the Indonesian island of Flores in 2004. The discovery of Homo floresiensis, nicknamed the “the hobbit” because of its diminutive size and strikingly large feet, remains controversial and could lead to rewriting the story of human evolution. Stony Brook University paleoanthropologists William Jungers, Ph.D., and Susan Larson, Ph.D., are among the researchers who suggest the hobbit represents a different species of human.

In the a section titled “Smackdown Over Ancient ‘Hobbit’ Continues” – number 85 in the top 100 – Discover cites the findings of “Hobbit” researchers. Regarding the work of Dr. Jungers, the section notes that he “studied the foot of the hobbit and found it, true to its namesake, strikingly large relative to the size of the body, with very short big toes. Jungers argues that this foot structure links the hobbit to earlier hominids.”

Commenting on the significance of the hobbit foot and its distinction as part of a top science story of the year as described by Discovery, Dr. Jungers adds that “the hobbits are not tiny pathological humans, and this implies that we shared the earth with other human-like creatures until very recently.” He further explains that “together with other skeletal parts, the foot evidence indicates that either island dwarfing produced the hobbits from Asian Homo erectus, or that there was an earlier ‘Out of Africa’ migration of an ancient ancestor that resembled australopithecines in many respects.

Drs. Jungers, Distinguished Teaching Professor and Chair of the Department of Anatomical Sciences, and Larson, Professor of Anatomical Sciences, continue their research on the hobbit. Their anatomical findings on the foot, wrist, and shoulder of the Hobbit have appeared in scientific journals such as Science and the Journal of Human Evolution. Most recently, they have undertaken descriptions of all the postcranial material known for H. floresiensis, which are now available online in the Journal of Human Evolution.

Discover is one of the world’s leading popular science magazines. The content of the magazine includes topics in health and medicine, technology, the living world, and human origins. The citation of the Hobbit as a top science story of 2008 is online at http://discovermagazine.com/2009/jan/085.

The Department of Anatomical Sciences is one of 25 departments within the Stony Brook University School of Medicine. The department includes graduate and doctoral programs in Anatomical Sciences. Fields of study include research on human evolutionary anatomy, morphology and vertebrate paleontology. Many faculty members in the department are also participants in an interdepartmental graduate program in anthropological sciences that is recognized worldwide for its faculty and research strengths in functional morphology and human evolution.

Civil Rights Laws Offer Hope for Cyber Attack Victims

Online threats and attacks in the virtual realm often have real consequences in the flesh-and-blood world, and Danielle Citron, JD, associate professor at the University of Maryland School of Law, says federal law must address this dangerous problem.

"We should think about these online attacks against largely women-but also racial, religious, and other minority groups-as a civil rights problem," says Citron, an expert in privacy and cyberspace law. Potential solutions, she adds, lie in amending the federal Violence Against Women Act to allow for civil remedies against online harassers, and in allowing courts to force Internet service providers to trace online harassers to their real-world sources.

Citron has been busy this fall speaking about the need to address the organized, targeted use of lies, threats of violence, and denial-of-service attacks that knock Web sites offline. Victims are frequently forced to at least mute their online speech or even alter their lives to protect their safety.

Though women who blog and have online discussions have been subjected to inflammatory responses that lead to problems including loss of career opportunities and threats of violence, Citron says too few mainstream voices believe that these attacks -- frequently perpetrated by anonymous "cyber mobs" -- are a genuine and widespread menace. But she believes graphic, violent, and slanderous online postings aimed at women are "like a cross burning on your lawn."

"We need to see this as a systemic problem," she says. Citron hopes to build momentum for nationwide reform. The robust, freewheeling exchanges that are characteristic of online communities are chilled when women and minorities are subjected to harassment, she says: "It's a less exciting Web if we don't have women and minorities and gays. It's less diverse."

Citron believes the court system can protect free speech while reducing Internet users' fear of harassment. But, she adds, "This is a long-term project."

Personalized Spam Rising Sharply, Study Finds
Jordan Robertson

Yes, guys, those spam e-mails for Viagra or baldness cream just might be directed to you personally. So, too, are many of the other crafty come-ons clogging inboxes, trying to lure us to fake Web sites so criminals can steal our personal information.

A new study by Cisco Systems Inc. found an alarming increase in the amount of personalized spam, which online identity thieves create using stolen lists of e-mail addresses or other poached data about their victims, such as where they went to school or which bank they use.

Unlike traditional spam, most of which is blocked by e-mail filters, personalized spam, known as "spear phishing" messages, often sail through unmolested. They're sent in smaller chunks, and often come from accounts the criminals have set up at reputable Web-based e-mail services. Some of the messages are expertly crafted, linking to beautifully designed Web sites that are bogus or immediately install malicious programs.

Cisco's annual security study found that spam is growing quickly--nearly 200 billion spam messages are now sent each day, double the volume in 2007--and that targeted attacks are also rising sharply.

More than 0.4 percent of all spam sent in September were targeted attacks, Cisco found. That might sound low, but since 90 percent of all e-mails sent worldwide are spam, this means 800 million messages a day are attempts are spear phishing. A year ago, targeted attacks with personalized messages were less than 0.1 percent of all spam.

The latest attacks include text-message spam, e-mails trying to trick business owners into coughing up credentials for their Google advertising accounts, or personalized "whaling" e-mails to executives claiming that their businesses are under investigation by the FBI or that there's a problem with their personal bank account.

As the world's largest maker of networking gear, Cisco is in a unique position to study the traffic flowing through its customers' networks, which include the biggest Internet providers and corporations. The latest study was based in part on the company's ability to monitor 30 percent of all Web and e-mail traffic through its hardware and software and a network of companies that contribute data.

Malware Madness and Spammers in the Slammer: The Year in Cybercrime

Underground botnet markets, high-profile spam cases headlined the year in tech crime
Brad Reed

One of the most disturbing cybercrime trends in 2008, many security analysts say, has been the emergence of a full-blown underground economy where credit card information, identity theft information, and spam and phishing software are all available for relatively low prices. View our slide show of 2008's biggest tech crime stories

Security software company Symantec became the latest company to raise red flags about what it called the "underground server" economy last month, when it issued a report estimating that roughly $276 million worth of goods and information is available on online black markets. Credit card data accounted for 59% of the information available for sale on underground servers, Symantec reported, with identity theft information (16%), server accounts (10%), financial accounts (8%) and spam and phishing programs (6%) trailing far behind.

What's even more unnerving than the availability of this information is its low price. According to Symantec, bank account credentials are selling for $10 to $1,000, while information about financial Web sites' vulnerabilities sell for an average $740. If all the stolen information available on the servers were exploited successfully, it would bring in about $5 billion, Symantec estimates.

One big reason this data is more widely available is that writing malicious code has grown from a hobby for many hackers into a full-time job where code writers make a living stealing information and selling it over underground server systems, says Dave Marcus, security research and communications manager at McAfee Avert Labs.

"Malware used to be written for bragging rights," Marcus says. "It was about who could write the fastest worm or the biggest virus. Now it's about making money, what kind of data or payload you can get from a machine, and what you can do with it."

As malware has become more sophisticated, it has increased its reach throughout the Internet. According to a report issued by Google earlier this year, about 1.25% of all Internet search results in February 2008 contained at least one malicious URL, a large increase from the 0.25% of Internet search results in April 2007 that contained at least one malicious URL.

This dramatic jump in malicious search results has coincided with several security firms reporting enormous jumps in malware instances in recent years. Between 2006 and 2007, for instance, Symantec reported that it detected roughly 712,000 new malicious code threats, a 468% increase from the 125,000 threats detected the previous year. Spanish security company Panda Security, meanwhile, reported that malware increased by 800% between 2006 and 2007, as the company detected an average of more than 3,000 types of malware per day in 2007.

The spread of malware and underground servers has produced some devastating results for some businesses so far: The U.S. Department of Justice revealed this summer that a group of hackers used a combination of wardriving, sniffer software and SQL injection attacks to steal more than 40 million credit and debit card numbers from TJX, OfficeMax, Barnes & Noble and other companies and store them on underground server systems in the United States, Latvia and Ukraine.

Spammers in the spotlight

2008 saw major developments in the cases against three major spammers in the United States. In one of the government's biggest victories in its undeclared war against spam, Robert Soloway was sentenced to 47 months in prison after he pleaded guilty in July to fraud, spamming and tax evasion.

Described as one of the world's 10 worst spammers at the time of his arrest by a Microsoft attorney, Soloway, 28, was first sued for spamming by Microsoft in 2003. Despite losing a $7 million civil judgment to Microsoft in 2005, he continued to send out massive spam until his arrest in May 2007. In addition to being sentenced to nearly four years in jail, he will have to serve three years of probation and perform 200 hours of community service.

In a setback for federal antispam efforts, however, the Virginia Supreme Court overturned a state antispam law and the 2004 conviction of Jeremy Jaynes, who had been sentenced to nine years in jail in 2004 for sending millions of unsolicited spam e-mails every day. Because the state's antispam law does not distinguish between commercial e-mails and political or religious e-mails, the court ruled that it "prohibits the anonymous transmission of all unsolicited bulk e-mails including those containing political, religious or other speech protected by the First Amendment." Some commentators, such as Network World columnist Michael Osterman, questioned the court's ruling, pointing out that the right to free speech should not be translated as a right to be heard by people who don't wish to listen.

"What the Virginia Supreme Court did, in essence, is to bind the right of free speech with the obligation to listen to or otherwise actively deal with that speech," Osterman wrote. "The Court, by ruling that a spammer has a right to send non-commercial e-mails to anyone, has also ruled implicitly that receivers of those communications have an obligation to receive them or otherwise deal with them actively by deleting the messages, spend money on spam filters and the like."

Finally, one spammer's saga ended in tragedy when fugitive Eddie Davidson took his own life and those of his wife and 3-year-old daughter this summer after walking away from a minimum-security federal prison camp in Colorado. Davidson had been sentenced to spend 21 months in prison and pay to pay $714,139 in restitution to the IRS after he was convicted of running a massive spam operation that sent large volumes of e-mail worldwide that promoted everything from perfumes to penny stocks. Davidson found that spamming on behalf of third-party companies was a lucrative career: He had earned well over $3.5 million for his spamming activities from 2002 to 2007, court papers showed.

Despite these spammers' legal troubles, however, spam levels unsurprisingly did not see a significant drop for most of the year. The only time spam levels saw a major decline this year was when McColo Corp., a company that has been described by some as a "rogue ISP" was disconnected by its primary Internet providers. In the wake of McColo's shutdown, spam messages declined by as much as 75% -- although spam is expected to climb back up to its normal levels as spammers search for alternative ways to access botnets.

Hackers 'Responsible' for £546m of Illegal Deforestation in the Amazon
Charlotte Cardingham

Hackers have accessed Brazilian government computer systems and helped 107 companies obtain permits that enabled them to fell over £546million ($833m) worth of timbre illegally.

In what has come as a shocking revelation, it appears that hi-tech hackers have played an instrumental role in the illegal deforestation of 1.7million cubic meters of the Amazon rain forest.

According to reports from environmental organization Greenpeace, the hackers were hired by at least 107 different companies to access and alter timber export records held by the Brazilian government. As a result, it’s estimated that an area of forest the size of 780 Olympic swimming pools has been cleared illegally.

The allegations centre on the Brazilian state of Para which uses a computer-only system to monitor deforestation and issue logging permits to local companies.

At the present time, any logging or charcoal company working in the state is allocated a maximum amount of timbre that it is allowed to fell in any one year, details of which are issued in the form of a series of permits. Once a company has fulfilled this annual quota, no further timbre transport permits will be issued by the local authorities. However, it is these records that the hackers have accessed and altered, allowing a vast amount of timbre to be felled illegally.

Federal prosecutor Daniel Avelino is currently mounting a law suit against the companies involved in the scam, with 202 individuals facing prosecution at this stage.

Working on behalf of the Brazilian government he intends to sue the subversive companies for a total of 2billion reais (£546million), the market value of the illegally felled timber.

Speaking on behalf of Greenpeace, André Muggiati, an environmental campaigner working in Manaus, commented. "We've pointed out before that this method of controlling the transport of timber was subject to fraud. And this is only the tip of the iceberg, because the same computer system is also used in two other Brazilian states.

"By hacking into the permit system, these companies have made their timber shipments appear legal and compliant with the forest management plans. But in reality, they're trading illegal timber which is making the problem of deforestation worse, and a lack of control and policing in the areas they're logging means they think they can get away with it."

Serious Security Flaw Found in IE

Users of Microsoft's Internet Explorer are being urged by experts to switch to a rival until a serious security flaw has been fixed.

The flaw in Microsoft's Internet Explorer could allow criminals to take control of people's computers and steal their passwords, internet experts say.

Microsoft urged people to be vigilant while it investigated and prepared an emergency patch to resolve it.

Internet Explorer is used by the vast majority of the world's computer users.

"Microsoft is continuing its investigation of public reports of attacks against a new vulnerability in Internet Explorer," said the firm in a security advisory alert about the flaw.

Microsoft says it has detected attacks against IE 7.0 but said the "underlying vulnerability" was present in all versions of the browser.

Other browsers, such as Firefox, Opera, Chrome, Safari, are not vulnerable to the flaw Microsoft has identified.

Browser bait

"In this case, hackers found the hole before Microsoft did," said Rick Ferguson, senior security advisor at Trend Micro. "This is never a good thing."

As many as 10,000 websites have been compromised since the vulnerability was discovered, he said.

"What we've seen from the exploit so far is it stealing game passwords, but it's inevitable that it will be adapted by criminals," he said. "It's just a question of modifying the payload the trojan installs."

Microsoft Security Advice:

• Change IE security settings to high (Look under Tools/Internet Options)
• Switch to a Windows user account with limited rights to change a PC's settings
• With IE7 or 8 on Vista turn on Protected Mode
• Ensure your PC is updated
• Keep anti-virus and anti-spyware software up to date

Said Mr Ferguson: "If users can find an alternative browser, then that's good mitigation against the threat."

But Microsoft counselled against taking such action.

"I cannot recommend people switch due to this one flaw," said John Curran, head of Microsoft UK's Windows group.

He added: "We're trying to get this resolved as soon as possible.

"At present, this exploit only seems to affect 0.02% of internet sites," said Mr Curran. "In terms of vulnerability, it only seems to be affecting IE7 users at the moment, but could well encompass other versions in time."

Richard Cox, chief information officer of anti-spam body The Spamhaus Project and an expert on privacy and cyber security, echoed Trend Micro's warning.

"It won't be long before someone reverse engineers this exploit for more fraudulent purposes. Trend Mico's advice [of switching to an alternative web browser] is very sensible," he said.

PC Pro magazine's security editor, Darien Graham-Smith, said that there was a virtual arms race going on, with hackers always on the look out for new vulnerabilities.

"The message needs to get out that this malicious code can be planted on any web site, so simple careful browsing isn't enough."

"It's a shame Microsoft have not been able to fix this more quickly, but letting people know about this flaw was the right thing to do. If you keep flaws like this quiet, people are put at risk without knowing it."

"Every browser is susceptible to vulnerabilities from time to time. It's fine to say 'don't use Internet Explorer' for now, but other browsers may well find themselves in a similar situation," he added.

Microsoft: Big Security Hole in All IE Versions
Brian Krebs

On Wednesday, Security Fix warned readers about a newly-discovered security hole in Internet Explorer 7. I'm posting this again because Microsoft now says the flaw affects all supported versions of IE, and because security experts are warning that a large number of sites are being compromised in an effort to exploit this vulnerability and install malware on vulnerable systems.

The SANS Internet Storm Center reports that hackers are breaking into legitimate Web sites and uploading code that could install data-stealing software on the machine of a user who visits the site using Internet Explorer. SANS's chief technology officer Johannes Ullrich estimates that thousands of sites have been seeded with this exploit to date.

For example, Web security firm Websense reports that hackers have compromised the Chinese Web site for ABIT, the maker of motherboards that power many home computers. So far, the exploits appear to be only stealing online gaming credentials, but SANS and others warn that attackers will likely use this exploit more deftly in the coming days and weeks.

According to Microsoft's revised security advisory, this flaw is present in every version of IE in use today, from IE5 all the way through to IE8 Beta 2.

Microsoft's advisory includes a host of recommendations for mitigating the threat from this vulnerability. Some of the company's suggestions did not work when I tried them on my Windows Vista system, or did not work without some tweaking that was not mentioned in the advisory.

For instance, Microsoft recommends enabling a feature called "data execution prevention," by clicking "Tools," "Internet Options," then "Advanced," and then checking the box next to that option. However, when I tried to make the changes in IE7 on Vista, I found that option grayed out. To make that change, I had to close out of IE completely, then right click on the IE icon, select "Run as Administrator," and then alter the setting.

Microsoft also suggests shifting IE's Internet and local Intranet security settings to "high." No problems changing that per Microsoft's instructions, except that few sites will load properly in IE because changing that setting disables active scripting, a feature that many Web sites use.

In addition, Microsoft says users can mitigate the threat from this flaw by de-registering the vulnerable component, a system file called "oledb32.dll". To do this, users need to run the Windows command prompt as administrator, and type or cut-and-paste the following command:

Regsvr32.exe /u "Program Files\Common Files\System\Ole DB\oledb32.dll"

This generated an error message on my Windows Vista machine, complaining that the action could not be performed. The command worked fine on my Windows XP system.

I would advise Windows users to consider browsing the Web with anything other than Internet Explorer, at least until Microsoft issues a patch to fix this vulnerability. It is not my intention to over-hype the situation, but as we have seen time and again, attackers are usually very quick to take advantage of flaws in IE because the program is the default browser for close to 80 percent of the planet.

And don't count on your anti-virus program to save you from these types of attacks. A scan of the exploit being served up by several of the hacked sites produced atrocious results: VirusTotal.com reported that only four out of the 32 anti-virus programs it used to scan the malware detected it as malicious or suspicious.

Microsoft Issuing Emergency Fix for Browser Flaw

Microsoft Corp. is taking the unusual step of issuing an emergency fix for a security hole in its Internet Explorer software that has exposed millions of users to having their computers taken over by hackers.

The ''zero-day'' vulnerability, which came to light last week, allows criminals to take over victims' machines simply by steering them to infected Web sites; users don't have to download anything for their computers to get infected, which makes the flaw in Internet Explorer's programming code so dangerous. Internet Explorer is the world's most widely used Web browser.

Microsoft said it plans to ship a security update, rated ''critical,'' for the browser on Wednesday. People with the Windows Update feature activated on their computers will get the patch automatically.

Thousands of Web sites already have been compromised by criminals looking to exploit the flaw. The bad guys have loaded malicious code onto those sites that automatically infect visitors' machines if they're using Internet Explorer and haven't employed a complicated series of workarounds that Microsoft has suggested.

Microsoft said it has seen attacks targeting the flaw only in Internet Explorer 7, the most widely used version, but has cautioned that all other current editions of the browser are vulnerable.

Microsoft rarely issues security fixes for its software outside of its regular monthly updates. The company last did it in October, and a year and half before that.


On the Net:

Microsoft's security advisory:


Exclusive: First look at Microsoft Internet Explorer 8 RC1
Andrew Isaak and Christian Zibreg

Microsoft quietly released the first update to its IE8 beta 2 to its closest partners last week. This new version is marked as “Release Candidate 1” and is expected to be the final IE8 pre-release update Microsoft intends to make available to the public sometime in the first quarter of 2009. TG Daily was able to take the browser for a first spin: We noticed that Microsoft made significant progress in some areas, but is standing still others. RC1, which is believed to be the first feature-complete version of the browser, will not match the JavaScript performance of all other major browsers.

The first update to Microsoft’s browser since IE 8 beta 2 was released to select Microsoft partners for testing last Wednesday. The company indicated in recent blog posts that it was delaying the browser for some time and that it may have a good reason to do so. A final public and feature-complete pre-release would become available in Q1 2009 and, of course, we were curious what may have canceled a 2008 release of the browser.

Will Microsoft shelve the browser engine? Will Microsoft follow through with its promise to make its browser much more compliant with web standards than previous versions were? We were lucky enough to get an early look at this final pre-release and now have a good idea how IE8 will look like. But, since this software is a partner release, it is more than likely that Microsoft will make one or the other change based on feedback until a public RC1 will surface. However, significant changes are rather unlikely.

Let’s cut to the chase right away.


The new version brings enhancements in private browsing, accessibility, overall reliability and speed. RC1 reaches a significant development milestone towards a browser that can compete on closer footing with Firefox, Safari, Chrome and Opera in terms of features. However, web standards support (especially CSS 3) and performance are still far behind the competition.

We tested the 32-bit version for Windows XP (64 bit and Vista versions were also made available), which carries the build number 8.0.6001.18343, which is up from the IE8 beta 2 build 8.0.6001.18241.

Privacy advocates will like the fact that add-ons are now disabled in InPrivate Browsing mode, a new “InPrivate Blocking” button has been added to turn the feature on and off, and group policies related to InPrivate Browsing mode have been added for administrative purposes.

According to the IE8 developer blog, accessibility has been improved as well for those with limited vision or mobility. We will spend more time on those features further down in this article. Also, minor changes were made to the favorites bar and compatibility view, and web developers will notice slight modifications to the developer tools, the Internet Explorer Administration Kit (IEAK) and AJAX (URL handling).

In terms of ease of use, new wizards have been added to import favorites from Firefox and Safari and to turn the suggested site feature on or off.

Performance and standards

Whether Microsoft likes it or not, speed and compatibility are the two most critical disciplines browser are measured against these days.

The company’s Internet Explorer has never been a speed monster, but even Microsoft has shown a motivation to tighten up the browser’s engine to squeeze more performance out of the aging code base. Back in March of this year, when IE8 beta 1 was released, Microsoft conceded that IE8 was still behind its rivals, but it was about twice as fast as IE7 in some benchmarks – and it was gaining ground on Firefox 3 beta 5 back then. IE8 beta 2 brought more performance again, but the competition - Firefox, Safari and Opera – have made even more dramatic speed gains in the mean time and widened the gap. And we aren’t even talking about Google’s Chrome, which is generally believed to be leading the pack at this time. So, can we expect progress with IE8 RC1 as well?

Our first impression is that IE8 has matured quite a bit, it feels more robust and seems to load pages slightly faster than IE8 beta 2. In support of this impression, the memory footprint of 70 MB with five open tabs is now less than the 80 MB in IE8 beta 2.

Measuring the actual performance of browsers is highly subjective and virtually impossible in real world conditions, due to the countless variables affecting load times and variables that are beyond our control. In addition to that, different hardware configurations will yield dramatically different results in benchmarks that are typically viewed as performance evaluation tools today. The published results have to be taken with a grain of salt and the actual numbers are almost meaningless. What counts is the gap between different browsers: The gap tends to be comparable across different platforms in terms of percentages.

Out of curiosity, we ran Google’s V8 JavaScript benchmark (yes, we know, it is a Chrome-biased benchmark, but the performance difference between browsers is nevertheless interesting.) Using a dual-core Pentium 2.8 GHz system, the new build of IE8 scored 27.1 on our test system. By comparison, Firefox 3.1 beta 2 scored 104 (higher is better) and Google Chrome scored a whopping 1401.

IE8 clearly comes in behind in this test, with a significant margin. The result got worse for Microsoft with a more advanced system - an Intel Core 2 Quad-based computer - in absolute numbers: IE8 RC1 scored 105, Firefox 3.1 beta 2 265 and Chrome 1.0 2991.

Notice the difference between Firefox and IE. IE consistently came in behind Firefox in our test runs and the more capable the hardware platform was the greater the distance (in absolute numbers) was. The strong performance of Chrome in a Google benchmark should be no surprise. The V8 benchmark suite covers Raytracing, Encryption/Decryption, OS Kernel simulation, constraint solving, and classic JavaScript benchmarks.

We also ran SunSpider, the open source JavaScript Benchmark of the WebKit project on Chrome, Firefox and IE 8. Chrome finished all test commands in 1860.0 ms, Firefox took 2475.0 ms and IE took 11,013.2 ms (less is better). Better hardware yielded better results in this benchmark as well: The quad-core system ran the test in 1046.1 ms for Chrome, 2184.5 ms for Firefox and 7489.3 ms for IE8.

Again, the actual numbers are not what we are looking at here. What stands out is that IE came in last again and the performance gap is significant.

Another disappointment is IE8’s Acid3 score. While Microsoft promised to make the browser more compatible with web standards, it trails every other browser in this major standards compatibility test by a substantial margin.

IE8 RC1 scores 12/100 (the same as IE8 beta 2), which clearly will disappoint web designers and developers that heavily use CSS. In comparison, Firefox 3.1 beta 2, officially released on December 8, scores 93/100, Firefox 3.0.4 scores 71/100, Google Chrome 1.0 comes in at 79/100 and Safari 3.1 scores 75/100. It is worth noting that Safari 4 beta as well as Opera 10 Alpha already scored 100/100.

For sake of reference, IE 7 scores 12/100 just like IE 8. To be fair, that number increases to 21/100 in IE8, if the window is left open for an extended period of time (several minutes).

While the browser did not crash during preliminary testing, this build is not meant for widespread public use and still contains several bugs. According to Microsoft, Facebook compatibility is still a known issue with the browser. Currently, the function “Add friend to list” causes IE8 to hang.

Noteworthy new features

It is apparent that all browser makers are much more active these days in rolling out new versions of their software. Mozilla and Opera recently released the second beta of Firefox 3.1 and the first alpha of Opera 10, respectively. Both browsers offer fresh new features paired with rendering platforms as well as much improved JavaScript engines that allow web applications to run more effectively.

Google has been particularly busy, having stamped out 15 Chrome updates in three months until the company suddenly proclaimed Chrome a finished 1.0 product yesterday, a move TG Daily deemed controversial, to say the least. So, what about key features in IE8?

Besides security features, Microsoft is emphasizing “accessibility”. JP Gonzalez-Castellan, accessibility program manager for IE8, said that Microsoft's goal is to make IE8 "the most accessible browser possible." He believes that the accessibility improvements in IE8 will benefit "one hundred percent" of users, stressing that improving the accessibility also improves the usability of the product.

He illustrated it vividly with public places like airports that have added wheelchair ramps after the Americans with Disabilities Act had been passed. Other passengers have soon started using ramps since it was easier to roll suitcases using the rams than picking it up over the ledge. "In much the same way," he said, "when you make software more accessible, everybody wins."

IE8 will support platform-oriented features like ARIA, IAccessibleEx and WinEvents, all of which will improve the accessibility of the browser. End-users may appreciate new accessibility-related features in the user interface areas, like caret browsing, a friendlier Find on Page feature, adaptive zoom and high DPI that scales the entire page content and several minor tweaks to how the browser behaves and reacts to user input.

Caret browsing: The power of keyboard shortcuts

Power users may especially enjoy keyboard shortcuts that will let them perform common mouse tasks with a keyboard, which will be a much faster or more efficient way to interact with software. A new feature dubbed "caret browsing," turned on and off by hitting F7, ditches the mouse entirely in favor of the keyboard and a cursor that moves within a web page in the same fashion as the cursor within the text of a Word document. Users can select and copy text down to a single character by holding the SHIFT key and pressing the arrow keys to highlight the text, in addition to selecting and copying non-text content like tables or images.

Caret browsing is especially useful in combination with context-sensitive menus also accessible on the keyboard. For example, you may select a piece of text or a single word, hit the context menu key on the keyboard positioned between the right ALT and right CTRL keys) to bring up the contextual menu with a list of Accelerators and choose to translate the selected text into another language, show a map, look up the term in online dictionaries, etc.

Enhanced Find feature

IE8 finally tweaks the Find on Page feature with a dedicated toolbar positioned below your tabs, instead of a floating dialog that obscures page content. The feature highlights search results on a page with a yellow background as soon as you start typing and shows the number of matches found in the Find on Page toolbar.

Adaptive Zoom and high DPI support

Other areas where regular users will benefit from accessibility features for low mobility and low vision users are the new Adaptive Zoom and high DPI support (which is actually an OS feature). The two work together to enable the browser to zoom all content in a page, not only text. Bitmap graphics are enlarged accordingly, as well as text and vector UI elements of the operating system that appear on pages, like drop-down lists, buttons, boxes, etc. Current versions of Opera and Firefox also have adaptive zoom features; Apple's Safari lacks adaptive zoom support.

Adaptive Zoom will not only help low vision users, but many others who squint their eyes when viewing pages on high-resolution monitors with high resolution settings. When a page is scaled on high DPI monitors, it not only looks bigger, but nicer since the software redraws the user interface elements with more pixels, resulting in a much more attractive display of content. Also, IE8 adjusts all elements on a page while zooming to avoid displaying horizontal scroll bars.

All three features are not limited to the RC1, but work in the current beta 2 as well. Besides the browser’s security improvements these three features may actually turn into the more noteworthy improvements and enjoy similar exposure such as tab-groups, for example. Microsoft still highlights web slices and activities, proprietary IE8 features designed to make information gathering about certain content more convenient.


With the new build of IE8, the Microsoft browser development team is well on the road for the release of a public RC1 in Q1 2009. The updated features address widespread privacy concerns that surfaced with IE 6 and 7 and show a certain willingness to narrow the gap in web standards support to rival browsers.

But, clearly, the improvements shown by IE8 may not be enough in some areas; in others, Microsoft may end up in a dead end.

IE8 RC1 cannot compete with Firefox, Chrome and Opera in terms of CSS 3 compatibility. But at least CSS 2.1 support has arrived, and new accessibility features will be heralded by those in need. We also believe that Microsoft has made a reasonable decision to single out privacy and security features with a separate toolbar icon.

If the RC1 seen by us essentially represents what the IE8 final will be, then Microsoft may not be able to slow the pace of IE market share decline. We are keeping our fingers crossed that there is still time to oil IE8’s rendering and JavaScript engines: As of now Firefox, Safari and Opera (and Chrome) play in a different league and expose IE8 as an old concept that is overrun by a new generation of browsers.
http://www.tgdaily.com/index2.php?op... 1&Itemid=140

FireTorrent Brings BitTorrent to Firefox

Firefox is the web browser of choice for many people, but unlike Opera, it can’t download .torrent files natively. With FireTorrent you can now add BitTorrent support to Firefox. The add-on makes it possible to download .torrent files in the browser, and integrates BitTorrent downloads into the existing download manager.

With FireTorrent, downloading torrents becomes as easy as downloading any other file inside your browser, no BitTorrent client needed. The add-on is currently in Alpha testing, but already fully functional.

FireTorrent can be especially useful for people who only use BitTorrent sporadically, those new to BitTorrent, or users who don’t need the advanced features most standalone clients offer. The add-on uses the popular libtorrent library and fully integrates into the native download manager of Firefox.

Since it’s an alpha release, there are no options or preferences to configure yet. The official release, however, will include adjustable download and upload limits and several other basic configurable settings. Completed downloads will currently be stored in the desktop folder, this can be changed in the beta release that will come out in a few weeks.

Firefox 3.0 or greater is required to get the add-on to work properly. At the moment, the upload speed is capped at 15kB/s. This is for the alpha release only, but since BitTorrent is based on ‘tit-for-tat’ sharing, it doesn’t really help to get the downloads up to full speed. That aside, the add-on works just fine, and download speeds on most connections are comparable to clients such as uTorrent and Vuze.

FireTorrent is also included with Wyzo, the BitTorrent browser (one of our sponsors) which is based on Firefox. A new alpha of Wyzo is also being tested at the moment, and will be released in the first week of January. FireTorrent is invite only at the moment, but there is an easy way to get around that, for those who want to give it a try.

Tight Economy Renews Interest in Used IT Equipment
Charlene O'Hanlon

Dealers in refurbished computer and networking gear are seeing business increase as solution providers and end users go bargain hunting for "slightly used" and "new to you" equipment.

Albert Einstein once said, “In the middle of every difficulty lies opportunity.”

In the middle of this difficult economy, the opportunities are less apparent for some solution providers. Others, however, see an opportunity in a dearth of new IT equipment purchase by corporations downsizing, closing offices and merging with other companies.

Solution providers who specialize in refurbished equipment are seeing signs of real growth in 2009, thanks to an abundance of nearly new IT equipment entering the product stream coupled with slashed IT budgets.

“This economic environment has changed the perception significantly,” said Mike Sheldon, president and CEO of Network Hardware Resale, a used networking equipment reseller based in Santa Barbara, Calif. “In the last 12 months we have been able to get basically every conceivable product out there. Many are brand new and most are less than a year old. Buyers can get some pretty good deals.”

Buying used IT equipment traditionally is somewhat stigmatized. At first thought, it can be a lot like buying a used car – once you drive it off the lot, it becomes your problem. But that’s not the case with slightly used IT equipment, used IT resellers say.

“If you look at a server, for example, the only things that move are fans and disk drives. Everything else is solid-state,” said Garry Seaber, president of Network Systems Resellers, Littleton, Colo. “Plus, the mean time is extremely long; otherwise, vendors would have a real image problem. Imagine how a customer would feel if they spent all this money on a new server only to have it fail a year later?”

Buying refurbished, he said, offers companies technology that is on track with or only slightly behind the technology innovation curve.

“We are a consumption-oriented country. We all want the latest cell phone, right? And that mode of thinking sometimes does come into play when IT execs are making the decisions,” Seaber said. “But if you look at the applications, they aren’t changing as fast as the hardware. Running a database on a dual-core or single-core can still provide the response time they need on that application; they don’t need a quad-core – it doesn’t make that much of a difference. It comes down to other architectural things on a server that impact the response time, like the disk drive, for example.”

Corey Donovan, vice president of operations at Minnetonka, Minn.-based Vibrant Technologies, agrees. “It’s a good opportunity for buyers now. Prices are lower than they have been since the dot-com implosion with a lot of up-to-date equipment.”

So if the price is right and the equipment is sound, is it a good idea for end users to rely on second-tier resellers? The answer depends a lot on what they’re looking for.

While many used IT equipment resellers offer configuration services, they don’t offer installation services. And most are not authorized resellers, so they don’t have the “touch” that partners do. However, equipment purchased from second-tier resellers does come with a warranty that is equal to, and in some cases better, than what the vendor offers with new equipment.

Network Hardware Resale, for example, offers a one-year warranty, which is “better than what they get from vendors or the channel,” Sheldon said. “We also offer an alternative to vendor maintenance that is much cheaper. We maintain equipment for its entire life – a lot of companies are holding on to equipment longer and delaying purchase of new equipment, and that’s where we begin to see that interest.”

Used IT equipment resellers also work in tandem with authorized resellers on many levels, from helping their customers procure branded equipment at a lower price to fit their budget to purchasing the customers’ excess inventory.

“There is a misconception that we compete with traditional VARs, because on one end I could be a competitor to VARs vs. them selling a new solution,” Seaber said. “Conversely, when a traditional VAR is bringing in a solution to an end-user client, they are bringing in a system that replaces an existing system or there is now excess equipment. A good VAR will look at the total needs of the client -- the customer will need to do something with that excess equipment. We can come in and partner with the VAR at the front end with a purchase agreement, and for the client many times the value of the old equipment can help them offset the cost of the new equipment. The smart VAR is wrapping that service in [by partnering with us] and helping the customer.

“If we develop the right strategic relationships, everybody wins,” he added.

Donovan and Sheldon both agree that their relationships with VARs are collaborative in nature, but sometimes they are in a competitive situation as well.

“It depends on the day and the deal. We do collaborate with a lot of partners both regionally and around the world and give their clients an option when there is no other,” Donovan said. “We actually think of our biggest competition as vendors or manufacturers themselves.”

“We have a lot of VARs who are good customers of ours. They have customers who come to them for end-of-life equipment or they don’t have the money and need the equipment,” Sheldon added. “I think in one sense it’s proactively very cooperative. On the flip side, when we’re selling to end user, we will often compete against another VAR. Generally, our customers are very supportive of purchasing from us, which mitigates a bit of the ire. Some split the difference, where they do some equipment and maintenance and we do some of the equipment and maintenance. It’s not ideal for them, but the VAR knows if they didn’t do that might not get the business.”

At the end of the day, all agree, it’s about saving the end user money.

“Companies are reducing their employees and budgets, but IT still has requirements that the board expects from them,” Seaber said. “They have to use more with less, and they’re to the point where they will buy refurbished equipment to do that. We’re already seeing that. This is a good time for our industry.”

Chinese Hybrid Car is Charging Into Weak Market

What reception is in store for a cellphone battery maker that's rolling out China's first mass-produced hybrid electric car?
Don Lee

With the Big Three automakers tottering and China's once go-go car market in reverse, this might seem a bad time for a relative unknown to be launching a new vehicle. Then again, BYD Co. isn't rolling out any ordinary car.

On Monday, the upstart company best known for making cellphone batteries will begin selling its F3DM -- China's first mass-produced hybrid electric vehicle. The car is expected to retail for around $20,000 in China and make its way to U.S. shores in 2011.

"For a long time, China's auto technology was undeveloped," BYD founder and President Wang Chuanfu, 42, said in an interview Friday at its hexagonal headquarters here. "But our [electric car] technology marks the first time we're standing as a leader on the world stage."

Whether that assessment is overblown -- Toyota, Honda and General Motors may certainly think so -- people familiar with Wang said they wouldn't underestimate him. Since starting the company in 1995, Wang has built BYD, short for Build Your Dream, into the world's leading producer of rechargeable batteries for mobile phones and laptops, among other products.

Combining its auto and hand-set parts businesses, BYD generated about $3 billion in revenue last year, a 64% increase from 2006, according to a filing with the Hong Kong stock exchange, where the company is listed.

Among those betting on BYD is Warren E. Buffett, who in September bought a 9.9% stake for $230 million. The billioniare investor apparently was impressed with BYD's green technology and Wang's record as a manager.

Wang said Buffett's investment would be of particular help as BYD prepares to enter the U.S. market in 2011 with its electric vehicles. GM plans to introduce its electric car, the Chevrolet Volt, in 2010.

Analysts don't doubt Wang's resolve or his company's technical capabilities; Wang is a metallurgical chemist by training, and BYD spent several years developing the ferrous battery technology for the car, giving it a quicker recharge time and price advantage over the lithium-ion battery used in Toyota's Prius.

But a better battery won't ensure marketplace success. And BYD doesn't have the experience in design, engineering, manufacturing and marketing of its world-class competitors.

"I have faith in [BYD's] technology," said Michael Dunne, the Shanghai-based managing director of J.D. Power in China. "What needs to be confirmed is whether they can build reliable, high-quality cars. That's their challenge."

BYD got into the car market in 2003, and the F3DM is a modified version of its gas-powered F3 model. The DM in the name stands for dual-mode, reflecting its ability to operate in both full-electric and gas-electric hybrid modes. The electric mode has a range of 60 miles on a single charge.

The conventional F3 sells for about $14,000 fully loaded, and its sales were up 36% this year through October. China's overall car sales have fallen in three of the last four months.

Toyota has sold only 748 Priuses in China from January to October. The F3DM could be a tough sell as well. "Most Chinese customers would feel that its initial investment is too high and that they won't start to see a return until after five to six years of use," said Che Junhong, editor of China Auto Market Report in Beijing.

BYD could, however, get a boost from the Chinese government, which is keen on developing cleaner energy as well as supporting domestic companies that could become powerful players in the world and lead the way in improving China's economy. Wang says he expects to sell 10,000 electric cars next year. The first batch will go to government entities, says Paul Lin, a marketing department manager at BYD's auto subsidiary.

In Shenzhen, Lin led a visitor through BYD's museum, where glass cases display phone casings, keypads, liquid crystal displays and other electronic components, while another hall shows car parts made at the company's 19-million-square-foot car factory.

That is a long way from Wuwei, a poor farming town in An Hui province where Wang was born and grew up with five brothers and two sisters.

In 1995, Wang borrowed about $300,000 from a cousin and opened a workshop in Shenzhen with 20 people to make cellphone batteries. Today, BYD managers say that one-third of all cellphones in the world are powered by its batteries. The company employs more than 130,000 people, including 10,000 engineers.

In recent months, BYD has taken its lumps with others because of the global financial crisis. Its stock price has fallen 75% from a year ago, and orders for batteries and other cellphone parts have fallen.

"Of course, nowadays we have a very big challenge in the market, but that's mainly for traditional vehicles," Wang said. "As a new energy car manufacturer, we believe we're going to create our own market."

Wang's goal: to be the world's largest car manufacturer by 2025.

U.S. Cell-Only Households Keep Climbing
Kim Dixon

Nearly 18 percent of households in the United States have no traditional telephone and rely on wireless services only, which is up several percentage points from a year earlier, the government said on Wednesday.

In the first half of 2008, 17.5 percent of households were wireless only, up from 13.6 percent a full year earlier, according to the U.S. Centers for Disease Control and Prevention.

The statistics have a margin of error of plus or minus 0.9 percentage point, according to the agency, which collected the data as part of project to determine if national health polls were being skewed by the trend.

Service providers such as Verizon Communications, AT&T Inc, Qwest Communications International and others have seen a steep increase in customers cutting the cord on their home phones.

Qwest said recently that the trend was exacerbated by the weak economy as some customers were disconnecting home phones to save money.

The percentage of households with a landline and a wireless phone declined slightly in the first half of 2008, at about 58.5 percent, compared with 58.9 percent a year earlier.

The figures come from national in-person interviews of approximately 30,000 households per year with at least one adult or child.

The agency concluded that polls were indeed being skewed because they have in the past only called those with traditional landlines. They and other organizations are moving toward incorporating wireless customers into their surveys.

For example, wireless-only households are more likely to contain binge drinkers and smokers, compared with those having landline phones.

Meantime, about 2.5 percent of U.S. households had no phone at all in the first half of the year, compared with about 1.9 percent in 2007, according to the agency.

(Editing by Maureen Bavdek)

Telecom Lobbyists Line Up for Piece of Obama Stimulus
Kim Dixon

President-elect Barack Obama's frequent use of the words "broadband" and "stimulus" in the same sentence has lobbyists lining up to get a piece of the expected largess in an economic stimulus plan.

Telecommunications companies are hoping to benefit from a variety of incentives under consideration, including a tax credit to target rural America, as lawmakers draft an economic recovery plan that could run about $600 billion.

Meanwhile, consumer groups want cheaper, more widely available high-speed, or broadband, networks as well as vouchers to help the poor buy laptops.

"We've heard from and spoken to virtually everyone involved in the industry including telecom, cable and satellite" companies, a congressional source working on the issue said.

Backers of expanded access to broadband, especially in rural and other under-served areas, are encouraged by Obama's view of the technology as a tool for economy recovery. The United States now ranks 15th among developed nations in broadband adoption, according to the Organization of Economic Cooperation and Development.

"We're behind Latvia and Lithuania," said California Rep. Anna Eshoo, a Democrat who is refining a plan she submitted to U.S. House of Representatives Speaker Nancy Pelosi before the election. "I'm very excited about the prospects that we will have in the stimulus package a plan for building out broadband."

Obama, who famously used the Internet to mobilize millions of voters and raise record-breaking amounts of money in the election, recently cited Internet expansion as one of several infrastructure priorities to create jobs.

"The goal is to revitalize rural America by bringing high-tech jobs to replace those lost in manufacturing," said Derek Turner, research director at Free Press, a reform group that introduced its own $44 billion investment plan this week.

The Free Press proposal includes a $15 billion broadband infrastructure fund overseen by the Federal Communications Commission and run by the states, and a $10 billion program to issue corporate bonds for broadband-related investment.

The key to any proposal is to prove it will create jobs.

"They (lawmakers) are looking at them through the lens of how many jobs will be created," said Jeff Campbell, senior director of technology and trade policy at Cisco Systems Inc., which makes network equipment.

Every one percentage point boost in broadband penetration per year is projected to increase jobs by 300,000, assuming the economy is not at full employment, according to a 2007 report by the Brookings Institution, a Washington think tank.

The Telecommunications Industry Association, which represents equipment makers such as Cisco, wants Congress to offer investment tax credits ranging from 10 percent to 40 percent to builders of broadband networks, depending on size and type.

Corporate Welfare Worry

Some consumer advocates fear money in the stimulus bill will be hijacked by the telecommunications industry and corporate interests.

Telephone companies such as AT&T Inc and cable companies like Comcast Corp could see big gains under proposals for tax credits, among others.

Consumers Union and the Consumer Federation of America want Congress to give direct grants to consumers to buy computers and Internet services, rather than "to corporations with a hope and a prayer that stimulus will trickle down to citizens."

Efforts to boost demand should not be overlooked said Tom Koutsky, resident scholar at the Phoenix Center, a non-profit research group. For example, where there is low computer literacy and ownership, "there is no point at subsidizing a broadband network at this point in time," he said.

Policymakers know they will need to rely on telecommunications companies because they own the infrastructure network.

"If you don't have the fiber optics, no matter what you place in somebody's lap it's not going to work," Rep. Eshoo said.

Turner of the Free Press acknowledged the risk of the effort turning into a corporate hand-out.

His group calls for incremental release of funds and for companies to submit specific proposals to Congress before getting tax incentives and other funds, for instance.

"This is obviously not meant to be a bailout," Turner said.

(Reporting by Kim Dixon; Editing by Derek Caney)

Free Broadband Plan Stirs Debate on Filtering
Joelle Tessler

M2Z Networks' proposal to build a free wireless broadband network is not the only controversial part of its business plan. Just as contentious is its intention to filter the content delivered over that network to block any material deemed inappropriate for children.

Free-speech advocates on the left and right have expressed alarm at M2Z's plans to build a family-friendly network that would weed out objectionable sites by blocking particular Internet domain names.

Federal Communications Commission Chairman Kevin Martin took up that idea in his proposal to auction off a chunk of spectrum that would be used in part to deliver a basic broadband service over the nation's airwaves. It would ultimately be up to the FCC to decide exactly how any filtering mandate would work, including whether the filters would be located on the network or on user devices.

M2Z co-founder John Muleta says any company that offers a free broadband service that is available to everyone must figure out how to protect children from illegal and unlawful material _ much as television networks must do with over-the-air TV broadcasts.

Yet this component of M2Z's plan has stirred a long-running debate about who should determine what constitutes "appropriate" content and about how effective content filters truly are. Critics say filters often make mistakes and block legitimate sites, including resources about health and sexual education.

John Morris, general counsel for the Center for Democracy & Technology, believes Martin's content-filtering rule would be unconstitutional because it would violate the First Amendment rights of people whose Web sites are blocked, and because parents already have access to a range of online tools to control what their children see on the Internet.

Indeed, the latter argument was one point cited by the Supreme Court in Reno v. American Civil Liberties Union, a landmark 1997 ruling that struck down a federal law regulating explicit material on the Internet.

To address these concerns, Martin's spectrum proposal would require the winning bidder to allow adults to opt out of content filtering.

But this raises a different problem, according to Berin Szoka, a fellow at the Progress & Freedom Foundation. That's because one benefit of a broadband service open to all is that it offers the potential for anonymity. The only way to allow adults to opt out of content filtering, however, would be to have users authenticate themselves, Szoka said. And that, he said, would sacrifice anonymity.

Free Wi-Fi Spreading Like a Virus
Mike Elgan

I've been predicting for years that Wi-Fi would get freer and freer until almost nobody could muster the gall to charge for it. Now, with the economy down and competition for scarce customers up, the trickle of free Wi-Fi hotspots is becoming a flood.

Fancy UK sandwich shop Pret A Manger announced that it will offer free Wi-Fi at about 170 of its stores across the UK starting today.

And while municipal Wi-Fi is dying an ugly, premature death in the United States, China is working on making the entire city of Beijing a giant free-Wi-Fi hotspot by 2011.

The airlines lately have been rolling out Wi-Fi that is the opposite of free: They charge way too much for it (there are few monopolies as perfect as the provision of wireless networking at 35,000 feet). However, Delta plans to start offering Wi-Fi on its puddle-jumper shuttle flights tomorrow. To promote the new service, they'll offer the Wi-Fi free for the next two weeks.

Free Wi-Fi is breaking out at gas stations, on buses and even on French "bullet" trains.

Meanwhile, an open source Wi-Fi service called WeFi now claims 10 million hotspots worldwide.

As more free Wi-Fi hotspots emerge, customers increasingly expect Wi-Fi to be free.

Of course, there's no such thing as a free hotspot. Somebody's got to pay for it. Increasingly, however, companies are folding in the costs of supporting a Wi-Fi network into the operations budget, and spreading the costs across all customers. I think this is a good thing.

My belief is that the demand for free Wi-Fi is driven at least as much by the hassle factor as it is the cost factor. People just want to fire up their laptops or iPhone and be online. As Wi-Fi devices, including the iPhone, BlackBerry Bold and ubiquitous netbooks go mainstream, the provision of free Wi-Fi just makes sense for business of all stripes.

Startup Banks on Making Money from Free Broadband

For the past three years, a startup called M2Z Networks has been figuring out a way to blanket the nation with a free wireless broadband network to ensure all Americans have access to basic high-speed Internet connections.

Along the way, the company has found support in powerful corners of Silicon Valley and Washington. It has attracted funding from several of the Valley's top venture capital firms. And it has captured the interest of Kevin Martin, the chairman of Federal Communications Commission, who is backing a plan essentially mirroring the M2Z proposal as a way to promote universal broadband.

Finally, this month, the company was nearing a breakthrough. Martin pushed for a full FCC vote on his plan, which would set the rules for auctioning off the slice of wireless spectrum that M2Z wants to put its ideas into action.

But opposition forces gathered steam, deferring M2Z's dreams for now.

Led by T-Mobile USA, the nation's wireless carriers have been lobbying to defeat Martin's proposal, which they say would interfere with their own services.

The Bush administration wasn't happy either: It urged the FCC not to proceed with an auction that would favor one company's business model. And some key Democrats on Capitol Hill called on the agency to hold off on controversial items - which would include the M2Z plan - until the Obama administration takes over.

Facing such objections, Martin canceled the Dec. 18 vote on the free broadband idea. The proposal remains in circulation at the FCC, and M2Z is suing the agency to gain access to the slices of the airwaves that it needs. But now it looks like the company will have to wait until next year to know its fate.

Although President-elect Barack Obama has not taken an official position on M2Z, he has said that wireless services could be one important channel for bringing broadband to all corners of the country. And that could yet be good news for M2Z.

What's at stake, insists M2Z co-founder Milo Medin, is a "lifeline" wireless broadband network that would provide basic connections for people who cannot afford the premium services offered by the big phone and cable companies or live in places where those services are unavailable.

"We Americans are creating a two-tier digital society," Medin said. "If you're not connected today, you're really at a disadvantage. But we can remove barriers that isolate people from the digital domain."

It's not clear exactly how many Americans have no access to broadband. According to a survey conducted in August by the Pew Internet & American Life Project, 57 percent of Americans subscribe to broadband at home. More people could get it, but choose not to buy it or can't afford it.

One major advantage of wireless technology is that it could bring broadband to rural areas that the big phone and cable companies have abandoned as too sparsely populated to justify the necessary network investments. That's because it costs less to blanket large areas with a wireless signal than to lay down wires.

Martin has proposed that the FCC auction a large chunk of airwaves to a company that would set aside 25 percent of the capacity for a free broadband service. Under his plan, the winning bidder would have to make that service available to 50 percent of the population within four years and 95 percent of the population within 10 years - or risk losing any remaining spectrum not yet being used.

The concept, explained John Muleta, M2Z's other co-founder, is modeled after over-the-air television, which is available for free to anyone with a TV set whether or not they subscribe to cable or another premium video service.

Founded in 2005, M2Z is a partnership between two broadband veterans.

Muleta, 43, has done two tours of duty at the FCC. Between 1994 and 1998, he worked in the section of the agency that regulates landline phone companies. And between 2003 and 2005, he headed the wireless telecommunications bureau, where he oversaw policies on consumer wireless services and public safety radio networks.

In between, Muleta held executive positions at PSINet, an early broadband provider that resold high-speed connections to corporate customers using facilities owned by the big phone companies.

Medin, 44, was co-founder and chief technology officer of another broadband pioneer - (At)Home, which partnered with some of the nation's biggest cable operators to create the cable Internet market. Before jumping to (At)Home, Medin was a project manager at the NASA Ames Research Center in Mountain View, Calif., where he helped manage some of the early government networks that evolved into today's Internet.

Although Muleta and Medin are based on opposite coasts - with Muleta in the Virginia suburbs of Washington, D.C., and Medin in Silicon Valley - they share a common experience. Both worked at early broadband companies that relied on established telecommunications giants to provide the so-called "last mile" of network infrastructure needed to reach customers. And both of their companies landed in bankruptcy when their relationships with the phone and cable companies became unworkable.

"The lesson learned is that you have to have the last mile in order to control your own destiny," Muleta said. "You need to have the direct relationship with the customer. Otherwise the company you rely on for that last mile will only let you survive only as long as it is in their interest."

And that is where M2Z - which stands for "move transport to zero" and is also a play on the names of the founders' children - comes in. The company would build its own nationwide wireless network to connect consumers to the Internet, bypassing phone and cable lines.

Muleta estimates it would cost $2 billion to $3 billion over a decade - plus the cost of the spectrum to be auctioned off - to build that network using new "spectrally efficient" technologies. Skeptics have questioned whether M2Z will be able to raise the money it needs - particularly in the current credit environment. The company has the backing of several prominent venture capital firms, including Kleiner Perkins Caufield & Byers, although it won't say how much funding it has amassed.

M2Z plans to deliver free wireless access with downstream speeds of 768 kilobits per second - roughly on par with a basic digital subscriber line (DSL) connection. To make money, M2Z would also offer a premium service with downstream speeds of 3 to 6 megabits per second for about $25 per month.

In addition, because the company's wireless base stations will know where its users are located, M2Z hopes to partner with search engines, Web portals and online advertising networks to target local ads.

One contentious component of M2Z's plan is its intention to offer a family-friendly network that would filter Web sites inappropriate for children - a proposal that has raised concerns among free speech advocates.

M2Z has also run into fierce resistance from the wireless industry. As Medin sees it, the industry is "really nervous about an outsider coming in and wrecking the place" - upending a lucrative market for mobile services with free broadband.

Officially, at least, much of the opposition is on technical grounds, especially from Deutsche Telekom's T-Mobile. In 2006, T-Mobile spent $4.2 billion for a large chunk of spectrum - including airwaves right next to the frequencies M2Z is eyeing - in order to build its own "third-generation" wireless broadband network. T-Mobile argues that M2Z's proposal would create interference for T-Mobile's customers.

Although a report by FCC engineers in October concluded that technical safeguards would prevent interference with other wireless services, T-Mobile insists there will be problems in restaurants, airports and other high-density areas where people congregate.

Chris Guttman-McCabe, vice president of regulatory affairs for CTIA-The Wireless Association, the industry's leading trade group, is also concerned that the FCC would essentially design an auction for a valuable chunk of airwaves around one company's business plan. As a result, he said, the auction would not attract nearly as many bidders - and would not raise nearly as much money for the Treasury - as a true, open competition.

Martin rejects this argument. The goal of the spectrum auction, he said, should not be just to raise as much money as possible for the government, but also to bring broadband to all Americans.

Despite falling just short of an FCC vote on the plan, Muleta insists M2Z will continue its campaign to gain access to the spectrum it needs - before and after the Obama administration takes over.

"I'm optimistic," he said, "because this idea that we need to change the way the broadband market is structured has received serious consideration."

Small ISPs to Offer Same Internet Speeds as Bell, Telus
Peter Nowak

Fresh off a loss in a battle with Bell Canada Inc. over the throttling of internet connections, small service providers have won a victory that will enable them to offer the same speeds as big phone companies.

The Canadian Radio-television and Telecommunications Commission on Thursday issued a decision ordering Canada's big phone companies, including Bell, Telus Corp., MTS Allstream Inc., SaskTel and Bell Aliant, to offer the same internet speeds to smaller wholesale customers as they themselves sell on a retail basis.

Under existing CRTC regulations, the big phone companies are required to rent out their networks to smaller service providers, who then sell internet access to their own customers. The rules boost the number of competitors selling internet access to the public, and thus keep prices down and service levels up. The regulations, however, have only applied to older infrastructure based in phone companies' centralized office buildings.

Recently, phone companies have been pushing their networks out of those buildings by putting new equipment into streetside cabinets in an effort to boost their customers' internet speeds. Smaller internet service providers haven't had regulated access to those cabinets, however, which means they have been limited to selling slower speeds than those offered by the big phone companies.

In Quebec, for example, Bell has been selling internet connections with download speeds around 16 megabits per second while small ISPs have topped out at less than half that.

Phone company arguments rejected

In its decision, the CRTC rejected arguments by the phone companies that speed parity would discourage them from investing in new infrastructure, and moved to fix the competitive discrepancy.

"Service speed is an important competitive attribute, with rates differing significantly by speed and speed often being a major differentiation point from a marketing standpoint," the CRTC ruled.

"The commission considers that absent a matching service speed requirement, the ability of competitors that rely on the mandated [access] to compete in the retail market would be significantly restricted, which would likely result in a substantial lessening or prevention of competition in the retail high-speed internet services market."

The decision came in response to a CRTC filing by Cybersurf Corp, an independent ISP based in Calgary, in June. Cybersurf had asked the regulator to force the phone companies to automatically offer matching speeds to small ISPs, a request the CRTC half-granted.

The phone companies will only be required to offer faster speeds to wholesale ISPs when they sell them on a retail basis in a given area. Smaller ISPs will therefore have to request the faster connections from the phone companies.

Hearings scheduled for this summer

Bell, Telus and the others have 45 days to file with the CRTC the proposed rates they intend to charge the small ISPs for faster services. The rates will have to represent the actual cost of the service, plus "a reasonable mark-up," the regulator said.

Small ISPs suffered a setback last month when the CRTC ruled against them and in favour of Bell in a dispute over the connections the company rents them. Earlier this year, Bell began slowing down certain internet uses of its retail and wholesale customers, which prompted a battle in front of the CRTC. Bell said it needed to "throttle" internet subscribers who were using peer-to-peer software such as BitTorrent because they were causing congestion on its network.

The small ISPs said Bell was breaking the Telecommunications Act by interfering with the service it was selling them, but the CRTC last month rejected the argument and allowed the company to continue its throttling practices.

As part of that ruling, however, the CRTC launched a larger inquiry into how much control large network owners such as Bell, Telus, Rogers Communications Inc. and Shaw Communications Inc., should have over the internet connections they sell to customers.

The inquiry is open to public submissions until February, followed by hearings this summer.

UK's 'Fastest Broadband' Service to Launch

The UK's fastest broadband service is due to be launched, as Virgin Media unveils a 50 Megabits per second (Mb) domestic service, more than twice that of the nearest competition.

It is said to be nine times the speed of average broadband in the UK, allowing users to download video and online TV faster than ever before.

Be Broadband currently offers a 24Mb facility, with Virgin's existing top speed being 20Mb.

The broadband speed denotes how quickly data can be accessed from the web.

It is not clear how many homes will have access to Virgin's new service, which will be rolled out throughout 2009 with Warrington reportedly the first place to be upgraded because of the density of Virgin customers in the area.

Users will be able to download an entire music album in as little as 11 seconds, a TV show in a minute and a movie in as little as 3.5 minutes.

Earlier this month broadband providers agreed to new rules ensuring that consumers are better informed about the actual speed of broadband they have bought.

Media watchdog Ofcom's code of practice has the backing of internet service providers (ISPs) to give more information about line speeds.

The code was drawn up after research found consumers were confused by companies advertising higher broadband speeds than they were able to receive.

Almost a quarter of people do not get the speed they expect, according to early results from Ofcom research due to be published next year.

Virgin Media to Throttle BitTorrent Users

In contrast to the US, net neutrality does not seem to be an issue in the UK as one after the other, British ISPs start to throttle BitTorrent users. Most recently, Virgin Media announced that it will target BitTorrent, which will render their newly released 50Mbit/s plan unusable for the people who really need it.

In the US, Comcast has been ordered to stop slowing down BitTorrent users, because this violates Net Neutrality. Across the pond, this does not seem to be an issue, as several ISPs have installed hardware to slow down BitTorrent users.

There haven’t been many reports of British ISPs throttling BitTorrent traffic, but this doesn’t mean that they don’t. Pipex, one of the largest ISPs in the UK, is notorious for its anti-BitTorrent measures. They actively throttle BitTorrent traffic, especially during peak times, and also throttle all encrypted traffic. Other UK ISPs that throttle BitTorrent traffic are BT Broadband, Eclipse, Plusnet, Freedom2Surf and TalkTalk. Virgin Media has not (openly) targeted BitTorrent traffic, but they will now follow suit.

Virgin Media’s CEO Neil Berkett told The Register that the company will start limiting BitTorrent traffic for all its customers. To some this might not really come as a surprise, as earlier this year Berkett said “This net neutrality thing is a load of bollocks.” Virgin’s BitTorrent throttling plans seem to back up this earlier statement. Which throttling methods Virgin will use has not been announced, but Berkett said that they will be implemented mid 2009.

ISPs have been messing with BitTorrent traffic for years, even when the traffic generated was just a tiny fraction of what it is today. When the first ISPs began throttling BitTorrent traffic, Azureus (now Vuze), BitComet and uTorrent introduced a countermeasure, namely, protocol header encryption. This worked well initially, but soon after encryption was introduced, ISPs started to use hardware that could detect encrypted traffic.

The degree of traffic shaping varies a lot between different ISPs. Some only limit BitTorrent traffic during certain times of the day or throttle in specific regions, others take a more aggressive approach and prevent their customers from seeding or even downloading .torrent files. The most used argument to justify their actions, is that all the BitTorrent traffic on their network slows down other customers’ connections.

Whether this is indeed the case can be debated. Nevertheless, instead of investing in their own network to solve these potential congestion issues, ISPs prefer to slow down customers who just happen to use the ‘wrong’ protocol, claiming problems with capacity. Which is interesting, since Virgin started offering an unlimited 50Mbit/s package this week, up from their old limit of 20Mbit/s. Maybe BitTorrent throttling helps make room for this new service.

The Mighty ShareReactor Returns - Now With Added Torrents

ShareReactor was one of the world’s biggest and most popular eDonkey indexing sites with over a quarter million members. The Swiss police shut down the site in 2004 but now, four years later, the file-sharing giant is set to make a full return. Supported by The Pirate Bay team, it’s adding BitTorrent to its arsenal.

Back in 2004, no-one would dispute that ShareReactor was a file-sharing force to be reckoned with. With roots stretching back to 2001, it had amassed over 250,000 members and was a truly huge site, providing eD2k (eDonkey) links for an ever-growing and wildly enthusiastic file-sharing community.

Compared to the next largest eD2k site ‘Filenexus’, ShareReactor was twice the size, with millions of pageviews pushed through its servers before The Pirate Bay and Suprnova had even registered their domains.

On March 10th 2004, the site was shut down by Swiss police, who seized the servers and detained the site owner, Christian Riesen, aka Simon Moon, for a day for questioning. Almost immediately the ShareReactor forum reappeared but without the popular eD2k links, and it took until September 2006 for the site to make a full return under new management. However, it wasn’t to last, and within a month the site was closed again.

Of course, there are few things that the file-sharing community love more than a big comeback, and today they aren’t going to be disappointed. ShareReactor, one of the original file-sharing giants, is to return, this time with completely new management team and some serious backing in the form of The Pirate Bay, who will assist with hosting and PR.

Episode 19, in a network far, far away a lone technician plugs in the final cable into an almost forgotten big machine complex, identified by a faded green label as ‘ShareReactor’. Everything hums and comes alive. The first input from the technician is ‘But what does it all mean?’, to which the machines in unison reply: 42!

For eDonkey fans - particularly those who used the site back in 2004 - the site will immediately provide some nostalgia. Although the site has been redesigned, the team has decided to keep the original spirit of 2004 alive with a familiar theme and graphics. Additionally, all of the eD2k links the site had in its database will return, making a truly impressive library, and these are being complemented with fresh links across the whole content spectrum.

Some will argue that BitTorrent is a crucial requirement for a successful P2P site in 2008, and this fact hasn’t eluded the new ShareReactor team. The site will now index both eD2k and .torrent links, offering the very best that the world’s major networks have to offer. Indeed, some 500 new releases have been added already, with some releases on the site offered in dual format - both BitTorrent and eD2k.

‘Utopat’, who leads the four man admin team consisting of ‘chaykin’, ‘DCJoeDog’ and ‘O-MEGA, told TorrentFreak that the site will be keeping up to date with the latest TV series, with links to these being posted promptly to the site. Furthermore, each release - no matter if it relates to a TV show, movie, software or game - will not have multiple versions.

“If it’s not a private torrent site, you see the same TV show episode 20 times, the same game 50 times and with applications you might see hundreds of copies of the same thing,” he told TorrentFreak. On ShareReactor there will be just one .torrent and eD2k link for each release and these will be moderated, ensuring an easy choice for the user and guaranteeing quality.

“There are so many viruses, fake torrents or simply not-working torrents, it’s hard for many users to find what they want. Sure, the seasoned users know how to spot the bad apples, but let’s face it, that’s not the majority,” Utopat told us. These problems won’t be appearing on ShareReactor.

The core of many file-sharing sites lies in the strength of its forum community, and ShareReactor will be no different. The site will have a dedicated standalone forum and for ex-members looking for immediate membership, all they have to do is enter their previous username and password, since they have all been retained. Anyone with a shorter memory or simply new to the site can create a new login with ease.

For those looking to make a few friends and maybe meet up with some faces from the past, ShareReactor has an IRC channel - #ShareReactor on EFNet.

UK Action Urged Over Illegal Downloads

Award-winning producers, directors and writers have called for action to tackle illegal downloads of films and TV shows which they say are threatening jobs.

Oscar nominated directors Sir Alan Parker, Mike Leigh and Kenneth Branagh are among the household names who have called on the Government to address the problem of peer-to-peer (P2P) file-sharing and the widespread availability of illegal, free content via the internet.

The group of more than 100 also includes Four Weddings and a Funeral screenwriter Richard Curtis, Billy Elliot director Stephen Daldry and The Fast Show writer Charlie Higson.

The group of more than 100 called for Internet Service Providers (ISPs) to assist rights owners in stamping out file-sharing over their networks.

The campaign is backed by the British Academy of Film and Television Arts (Bafta), the UK Film Council, the Cinema Exhibitors' Association, actors' union Equity, the Entertainment Retail Association, the Film Distributors' Association and the British Video Association.

Callum MacDougall, the producer of this year's James Bond blockbuster Quantum of Solace, said: "This call for action comes from some of the talent behind Britain's much-loved films, but we make it not for our own benefit but in the interests of those involved in the creative process whose losses from online theft are proportionately much greater - this includes the technicians, the staff on set, those who work in cinemas and those on the high street who bring the enjoyment of film to millions."

Stephen Garrett, producer of the hit drama Spooks and managing director of Kudos Productions, said: "There is never a right time to ignore anything that threatens jobs, but in an economic downturn it is somewhere between irresponsibility and insanity. The creative economy sustains more than 800,000 jobs, so it is critical that Government tackles illegal file-sharing now."

A Department for Business, Enterprise and Regulatory Reform (BERR) consultation on illicit P2P file-sharing finished at the end of October and it is due to report back soon.

A BERR spokesman said: "We completely agree that piracy is a very important issue, which is why in July this year the Government brought together the film and music industries with the main UK Internet Service Providers to sign a Memorandum of Understanding (MOU) pledging to crack down on unlawful file sharing."

The spokesman added: "We will also be publishing the interim Digital Britain Report early in the year which will also consider peer-to-peer file-sharing in the context of wider sectoral issues."

iiNet to Fight Piracy Claims
Asher Moses

In a landmark case set to rock the internet industry, iiNet has until early February to file its defense against claims by movie studios that it willingly permitted its customers to download movies illegally.

In the Federal Court this morning, Justice Dennis Cowdroy set the February 5 deadline and expressed his desire for the matter to "move along rapidly", with a hearing to potentially begin as early as March.

But lawyers for iiNet said that timetable was too ambitious, indicating a long, drawn out legal battle.

Last month, seven major movie studios and the Seven Network filed suit against iiNet for allegedly allowing its users to download pirated movies and TV shows.

The landmark case will determine the lengths to which an internet provider must go to prevent illegal downloading on its network. A loss for the movie industry could leave it no choice but to go after individual downloaders, as has occurred in the US.

The movie studios argue that iiNet had a responsibility to disconnect customers they had identified as illegal downloaders.

iiNet has vowed to vigorously defend the case, claiming it forwarded copyright infringement notices sent to it by the Australian Federation Against Copyright Theft on to police and it was up to them, not iiNet, to decide whether someone was guilty of copyright infringement.

ISPs argue that, like Australia Post with letters, they are just providing a service and should not be forced to become copyright police.

In today's directions hearing lawyers for iiNet began to frame its defense, saying the company "just provides the pipes".

Conversely, the TV and movie industry want ISPs to disconnect people it has identified as repeat infringers. There would be no involvement from police or the courts and the industry would simply provide the IP addresses of users they believe to be illegal downloaders.

The movie industry's lawyers said in court today they would reject iiNet's claims that it was not liable for the actions of its users due to safe harbour provisions introduced with the US free trade agreement.

The iiNet case is similar to the one the music industry brought against the Kazaa file sharing service in 2002, which ended in 2006 with Kazaa's owners handing over $100 million in damages.

Additionally, in 2005, Stephen Cooper, the owner of MP3s4free.net, and the website's host, E-Talk Communications, were successfully sued by the music industry for infringing copyright by publishing hyperlinks to sites that contained illegal music.

Both cases were referenced by lawyers representing the movie studios in court today.

But copyright law experts have said both cases were different because they showed a clear knowledge and encouragement of copyright infringement, whereas iiNet simply provides the internet connection and is in no way directly involved with illegal downloading.

The case returns to court for another directions hearing on February 6.

Culture Panel Seeks Download Ban
Kyodo News

The Cultural Council proposed Tuesday banning the downloading of "chaku-mero" ringing melodies for cell phones, moving images and other sound and visual content from the Internet without the author's permission.

The proposal is intended mainly to protect the music industry from rampant copyright violations via illegal Internet sites.

Uploading music and other content onto the Internet without the author's permission is prohibited under Japanese copyright law. But there is no law that bans downloading such content.

The council, an advisory body to the Agency for Cultural Affairs, explicitly called the downloading of content from the Net without copyright holder permission illegal, but it stopped short of proposing penalties.

China Blocks Access to The Times’s Web Site
Keith Bradsher

Chinese authorities have begun blocking access from mainland China to the Web site of The New York Times even while lifting some of the restrictions they had recently imposed on the Web sites of other media outlets.

When computer users in cities like Beijing, Shanghai and Guangzhou tried to connect on Friday morning to nytimes.com, they received a message that the site was not available; some users were cut off on Thursday as early as 8 p.m. The blocking was still in effect on Saturday morning.

But the Chinese-language Web sites of BBC, Voice of America and Asiaweek, all of which had been blocked earlier this week, were accessible by Friday. The Web site of Ming Pao, a Hong Kong newspaper, was blocked earlier this week and still restricted on Friday.

Chinese officials had few explanations for the restriction on The Times’s site. “Concerning your particular question, we’re not really familiar with the details,” said a spokesman for the Ministry of Foreign Affairs in Beijing, who declined to give his name. “Web site maintenance is not within the job purview of the Foreign Ministry.”

Tang Rui, an official with the government’s International Press Center in Beijing, said he also had no specific information. “It might be a technical problem,” he said, declining to elaborate.

Access to the Web site was not restricted on Friday in Hong Kong, which Britain returned to Chinese rule in 1997 but which still allows freedom of speech, including on the Internet. Internet users in Japan and the United States were also not experiencing difficulties on Friday in viewing the site.

A spokeswoman for The Times, Catherine J. Mathis, said there did not appear to be a technical issue.

Rebecca MacKinnon, a researcher at Hong Kong University who specializes in China’s Internet controls, said the reasons for the restrictions were mysterious. “All anybody can offer is speculation,” she said.

In the months leading up to the Olympics in Beijing, during the Games and immediately after, the Chinese government temporarily unblocked access to some Web sites and eased curbs on the ability of foreign correspondents to travel within China. It has not tightened the travel restrictions since then.

China Defends Latest Web Censorship
Jemima Kiss

Chinese government officials have defended their decision to block several foreign news websites, including the BBC, as the country moves away from its pledge for uncensored internet access during the Beijing Olympics.

The BBC, Voice of America, Hong Kong's Ming Pao News and Asiaweek have all had their websites blocked in China since early December. Restrictions had previously been lifted in August, when foreign journalists demanded full access during the Olympics.

China's foreign ministry said today that it was within its rights to block sites that showed content illegal under the country's law. A foreign ministry spokesman, Liu Jianchao, said the Chinese government "could not deny" that it had issues with some sites.

"For instance, if a website refers to 'two Chinas' or refers to mainland China and Taiwan as two independent regions, we believe that violates China's anti-secession law, as well as other laws," Liu added.

"We hope that the relevant websites can comply with China's concerns and not do things contrary to Chinese law. This will help establish good co-operation between China and the relevant countries, as well as China and the relevant websites."

China has previously blocked several high-profile websites but has not acknowledged an official ban, preferring to show users an error message for those sites instead.

Access to the BBC's English-language site was briefly lifted in March, although the Chinese-language site remained blocked.

A BBC spokeswoman said: "We are disappointed that Chinese-speaking audiences in China are not able to get access to the BBC's impartial and editorially independent news and information through BBCChinese.com. In the runup to the 2008 Beijing Olympics, Chinese residents were able to have some access to BBCChinese.com but now there seem to be more difficulties in viewing the site. We will endeavour to continue working with the Chinese authorities to improve access for our Chinese-speaking audiences in China."

Chinese authorities are understood to be far stricter with the Mandarin-language version of the BBC website at BBCChinese.com, which saw only slightly loosened restrictions during the Olympics. Both the BBC's Mandarin radio broadcasts and Mandarin-language site have been subject to restrictions, the latter for most of its 10-year existence.

Online content is understood to be filtered by subject to web users in China, so news about Tibet or Chinese politics is censored.

"We're not surprised at this behaviour from the Chinese government," said a spokesman for the press freedom group Reporters Sans Frontières. "The figures for Chinese control of the web are appalling. We were trying to raise awareness of this during the Olympics and even then it was very difficult to gain access to some sites, let alone for journalists travelling in China."

The Foreign Correspondents Club of China said it had recorded 177 cases of journalists being obstructed in their work since the start of 2008, including Christian Science Monitor reporter Peter Ford being arrested after covering a Protestant prayer meeting in Henan province.

RSF ranks China 167th out of the world's 173 countries for its record on press freedom. Only Vietnam, Cuba, Burma, Turkmenistan, North Korea and Eritrea rank lower.

China recently overtook the US as the world's biggest internet market with an estimated 253 million web users, according to Internet World Stats.

tor2web Brings Anonymous Tor Sites to the "Regular" Web
Jacqui Cheng

Regular web users can now access anonymously-published websites that are masked by Tor's hidden services thanks to a new tool called tor2web. The tool, created by former Reddit developer Aaron Swartz and WikiScanner creator Virgil Griffith, enables people to view these hidden websites (designated by the .onion domain suffix) without diving into Tor, which can be a pain for casual surfers. The creators hope that the existence of tor2web will encourage more organizations to publish content anonymously through Tor, now that such a heavy access restriction has been lifted.

The Tor project is most famous as a tool that allows Internet surfers to access websites privately and anonymously from within the "onion router." Put simply, it works by passing your requests to another node that acts as a middleman between you and a website, which in turn passes the request onto other nodes, and so on. Every step is encrypted except for the final exit node to the content server connection, and the network is run almost entirely by volunteers.

The tool is often recommended by privacy advocates and rights groups when educating users about how to gain free access to information from countries that restrict or censor Internet access, such as China, Saudi Arabia, and Iran. In fact, both the Electronic Frontier Foundation and Citizen Lab have endorsed the use of Tor so that users can retain their online privacy while surfing, although the network has gotten somewhat of a bad rap for allegedly enabling the trafficking of child porn and anonymous bomb threats. (The project was previously funded by the EFF but has since broken off.)

Tor's hidden services, however, allow web publishers to publish content anonymously so that law enforcement (and general snoopers) can't detect where the information is coming from. As you can guess, this is useful largely for illegal content, such as P2P file servers and porn of variable levels of creepiness (during the writing of this article, I was lucky enough to come across a site dedicated to non-nude videos and stories of young girls with a "wetting" problem). However, Tor's hidden services are also used by average—if not completely paranoid—Joes who want to keep the origins of their content a mystery. The only problem with publishing websites under Tor is that they can only be accessed from within Tor, meaning that the available audience at any given time is infinitesimally small compared to the overall Internet-using population. This is the problem that Swartz and Griffith hope to address with tor2web.

"There's all sorts of stuff people want to publish anonymously," Swartz told Threat Level. "The Tor tools have been really good for doing that. They're really secure and have been well-vetted. But they're kind of difficult to install and there's no way you're going to get everyone on the internet to install them. So the idea was to kind of produce this hybrid where people could publish stuff using Tor and make it so that anyone on the internet could view it."

For now, tor2web's services are not very useful aside from a casual click here and there from the services index page, as there are not many sites available through Tor's hidden services in the first place. Most of them are also near impossible to decipher from their URLs, making casual surfing somewhat of a chore (though Swartz indicated that he and Griffin hope to create more user-friendly directories so that people can find interesting content easier). And, of course, it's important to remember that as a regular, non-Tor-network-using Internet surfer, your visits to these sites are not protected as they would be if you were behind a node or three.

Still, tor2web is a positive step for those who want to publish anonymously without sacrificing the exposure of being available on the "regular" Internet. We just hope that more content makes it up soon, lest we be limited to reading about people's weird fetishes and attempts to start new communist revolutions.

Mass Internet Outages in Egypt After Cables Cut

Egypt's communications ministry says Internet cables in the Mediterranean Sea have been cut, causing massive Internet outages.

The ministry says three Internet cables were cut off the coast of Sicily on Friday morning. Throughout Egypt, the Internet is almost completely down or working sporadically.

The ministry says it will take ''several days'' for cables to be repaired and is trying to switch Egypt's Internet to an alternative route.

It was the second large-scale Internet outage in Egypt this year. Undersea cables were also damaged in January, causing outages in the Mideast and India.

Yemen and Sudan were also having phone and Internet difficulties Friday because of he cable cut.

New Anti-Terror Legislation

Journalists Worry 'Big Brother Law' Will Kill Press Freedom
Charles Hawley

A new law working its way toward passage in Germany has journalists worried. Certain provisions, they say, could eliminate the ability for reporters to protect their sources. Still, the measure is likely to go into effect early next year.

It has been called the "Big Brother" law in the German media due to its provisions allowing online and telephone surveillance. The Interior Ministry in Berlin describes it as a necessary step to protect the country from the dangers of international terrorism.

But journalists in Germany see the bill -- currently in the parliament's arbitration committee after having failed to get through the country's upper legislative chamber, the Bundesrat, in November -- in a different light. They are concerned the law would make it much easier for investigators to spy on reporters without their knowledge, giving the state access to both their computer files and their sources. That, they say, represents an unacceptable attack on freedom of the press in Germany. Publishers, journalists and media lawyers are up in arms.

German journalists may soon lose certain legal protections.

This law "is one in a series of so-called security laws that have one thing in common: They endanger the freedom of the press and especially investigative journalism," Wolfgang Krach, managing editor of the influential daily Süddeutsche Zeitung, told SPIEGEL. "This is not a case of a profession selfishly looking for extra privileges. Rather, journalists want to be conferred the rights guaranteed them by the constitution and to be able to fulfil their role unhindered."

The Right to Protect Sources

The law in question would significantly increase the investigative powers of Germany's Federal Criminal Police Office (BKA). Investigators would be allowed to tap the phones of terror suspects, film their homes, track their mobile phone signals and even send Trojan viruses to suspects' computers allowing investigators to install "Remote Forensic Software" and clandestinely search through hard drives.

More to the point, though, Paragraph 20 of the law would significantly weaken journalists' rights to protect their sources, say media professionals.

German law until now has lumped journalists together with doctors, lawyers, politicians and priests -- the secrecy of what they discuss with their sources, clients and flock, respectively, has been legally protected. The new law would break that group into two categories. Clergymen, politicians and defense attorneys would remain fully protected.

When it comes to journalists, doctors and lawyers, though, investigators would be allowed to monitor their phone calls and search through their computers if they saw a "public interest" in doing so. In other words, probable cause would no longer be necessary; the law would give German authorities the right to spy in the name of security.

'Democracy Needs Critical Journalism'

"Journalists' ability to protect the identity of their sources would be severely weakened if the law is passed as it is currently formulated," Hendrik Zörner, spokesman for the German Federation of Journalists, told SPIEGEL ONLINE. "Informants will no longer trust that their communication with journalists will remain secret and they won't pass along information anymore. That will result in less critical journalism -- and democracy needs critical journalism."

Germany's Interior Ministry, which has been pushing for the law as a necessary tool in the fight against terrorism, says the criticism of the law is misplaced. "The draft law is very narrowly focused on the defense against international terrorism," Markus Beyer, a ministry spokesman, told SPIEGEL ONLINE. "The authority granted by the law is already anchored in laws currently in place in German states."

Yet according to media law professionals, the draft law has serious implications for journalists. The law, media lawyer Johannes Weberling told SPIEGEL ONLINE, "would rock the very core of what journalism stands for." Because investigators would no longer need to show probable cause before initiating surveillance, Weberling says, the law would make sources think twice before speaking to the press.

"One of the media's roles is that of a watchdog," Weberling says. "The ladies and gentlemen in politics need to understand that there is a separation of powers in this country and that a free press is a vital component of that separation. It is incredibly irresponsible to destroy this watchdog function."

Just how to defend the country from a potential terror attack has been a topic of debate in Germany for some time. Interior Minister Wolfgang Schäuble, of Chancellor Angela Merkel's Christian Democrats (CDU), has long argued that Germany needs to intensify domestic security. Many of his proposals, including domestic deployment of the military and giving the air force the right to shoot down hijacked planes, have proven extremely controversial. His department's plan to secretly install spy software on suspects' computers using Trojan viruses likewise resulted in a nationwide furrowing of brows.

Still, the security package now under consideration has received widespread support from Merkel and the rest of her conservative party. After months of debate, Merkel's coalition partners from the center-left Social Democrats likewise signed on. In November, when the law went before the lower house of parliament, the Bundestag, it passed easily in a 375-168 vote. The upper house, though, rejected it on the strength of opposition from the business-friendly Free Democrats (FDP), the Greens and the Left Party. Some Social Democrats in the Bundesrat likewise voted to torpedo the law.

Muted Media

"Each instance in which a citizen no longer feels safe passing along information about a grievance to the press and thus the public, represents an erosion of democracy," the FDP said in a statement.

Nevertheless, the primary reason for the law's rejection had to do with a passage relating to whether courts had to give their approval for certain surveillance activities. The implications for press freedom were hardly mentioned. A compromise is expected on Wednesday with lawmakers hoping to pass the law by the Christmas break so it can go into effect in 2009. Most observers expect changes to be minor, and the parts related to journalists and their sources will likely remain untouched.

German media protests have been muted. Most papers have run back-page stories on the law's implication for press freedom and journalist associations have issued press statements condemning the law. The Federal Association of German Newspaper Publishers called the draft law "an affront to the press" and said it is "concerned by the climate created by the government in which freedom of the press plays only a subordinate role."

But despite the lack of coordinated protest, many see the law as the next step in the German state's confrontation with the press in the name of security. In April 2005, the monthly newsmagazine Cicero published a story on the Islamist terrorist Abu Musab al-Zarqawi in which it quoted from a top-secret report from the Federal Criminal Police Office. Soon thereafter, the authorities searched the magazine's editorial offices and the apartments of its editor in chief and of the story's writer, apparently trying to find out who leaked the report to Cicero. Germany's highest court later declared the search to have been unconstitutional.

The new law, though, could very well accomplish the same goal in a much less dramatic fashion: remote data mining instead of editorial office raids. Either way, say many of Germany's top journalists, the effects will be the same.

"There are many ways to prevent investigative journalism," Bascha Mika, editor in chief of the daily Die Tageszeitung, told SPIEGEL. "The easiest is to scare away informants. The planned law will certainly have that effect."

Media lawyer Weberling, who represented the writer of the Cicero story Bruno Schirra, says that he expects the new law, should it pass, to ultimately wind up in Germany's high court. "We will be looking for appropriate cases to challenge the constitutionality of the law if it goes through," he said.

With reporting by SPIEGEL staff

New York Times' NSA Whistleblower Reveals Himself
Kim Zetter

It's been three years since The New York Times first broke the news of the NSA's warrantless wiretapping program, based on information provided by an anonymous source.

Today the identity of the Times' Deep Throat is finally revealed to be a 56-year-old former prosecutor in the Justice Department named Thomas Tamm, whose "passion for justice" led him to make a fateful call to the Times one day in 2004 from a phone booth in a Washington, D.C., subway station.

The information is reported in a fascinating tale published not by the Times, but by Newsweek.

Newsweek describes how Tamm discovered the secret program and agonized about what to do before finally making the call to reporter Eric Lichtblau at the Times. It also details the depression and constant fear he's faced since then, knowing that he could be arrested any day and charged with a felony for revealing classified information.

Tamm was not the Times' only source, but was the first to come forward with news of the surveillance program. He was motivated by a need to do what was "right," and was stunned that someone higher up than him didn't speak up about the program. Tamm thought Congress and the public should know about the spying to debate its lawfulness. He was also motivated by anger over the administration's introduction of the controversial "enhanced" interrogation methods of prisoners at Guantanamo and elsewhere.

He hails from a family of high-ranking FBI officials (his father and uncle were top aides to former FBI leader J. Edgar Hoover; his brother was an FBI agent and investigator for the 9/11 Commission), and he held a Top Secret/SCI clearance at the Justice Department's Office of Intelligence Policy and Review, where he was tasked with processing national security wiretaps in cases targeting suspected spies and terrorists.

That's where he learned that some wiretap requests never made it to the Foreign Intelligence Surveillance Court for review and approval. Instead, he discovered, they went straight to Attorney General John Ashcroft and the FISA court's chief judge. These requests, he learned, related to something that people in his office called simply "the program."

Tamm told Times reporters Eric Lichtblau and James Risen about the program's existence, but provided no operational details because he didn't know how the program worked. Those details were provided to the Times by other sources.

Some revelations from the piece:

• The code name for the NSA's phone call and e-mail collection program was "Stellar Wind."
• The secret wiretap requests began in October 2001.
• Tamm tried to discuss the issue with a former colleague who worked for the Senate Judiciary Committee but was shut down by the colleague who didn't want to discuss anything related to government secrets.
• The secret wiretap requests went only to Ashcroft and the FISA court's chief judge, initially U.S. Judge Royce C. Lamberth but later Colleen Kollar-Kotelly, bypassing the other 10 judges on the court.
• Targets for surveillance were chosen based on data obtained from computers and cellphones seized from Al Qaeda members overseas:

If, for example, a Qaeda cell phone seized in Pakistan had dialed a phone number in the United States, the NSA would target the U.S. phone number--which would then lead agents to look at other numbers in the United States and abroad called by the targeted phone. Other parts of the program were far more sweeping. The NSA, with the secret cooperation of U.S. telecommunications companies, had begun collecting vast amounts of information about the phone and e-mail records of American citizens. Separately, the NSA was also able to access, for the first time, massive volumes of personal financial records--such as credit-card transactions, wire transfers and bank withdrawals--that were being reported to the Treasury Department by financial institutions. These included millions of "suspicious-activity reports," or SARS, according to two former Treasury officials who declined to be identified talking about sensitive programs. (It was one such report that tipped FBI agents to former New York governor Eliot Spitzer's use of prostitutes.) These records were fed into NSA supercomputers for the purpose of "data mining"--looking for links or patterns that might (or might not) suggest terrorist activity.
• Because intelligence obtained without a court order couldn't be used in criminal court, counterterrorism officials would examine the surveillance information already obtained without an order to find a reason for requesting a legitimate FISA warrant and cover their illegal tracks.
• When FISA Judge Royce C. Lamberth learned that information from warrantless surveillance was showing up in court-reviewed FISA warrant requests he warned Justice officials to keep the information out of the warrant requests or he'd force a showdown by ruling on whether the program was legal or not. In doing so, Lamberth allowed the Justice Department to continue the warrantless wiretapping without challenge.
• Tamm found nothing unique about the special wiretap requests to justify the runaround of the FISA court.
• In early 2004, the FISA court's chief judge, Kollar-Kotelly, grew concerned that data obtained through warrantless wiretapping was still be being "backdoored" into legitimate FISA warrant requests and raised objections. Tamm was told she wanted to put an end to the special requests.
• A handful of colleagues in the Justice Department expressed doubts to Tamm about the program being legal and one even ventured that Ashcroft could get indicted for it.

These days Tamm is self-employed as a sometimes-public defender, and is struggling with $30,000 in debt. He suffers from depression and waits in anguish to find out what will happen to him. A Justice Department prosecutor has told his lawyer that the department will wait to decide whether to prosecute him until the Obama administration takes office.

As Newsweek notes, the case presents a dilemma for Obama and his new attorney general, Eric Holder, since both condemned the warrantless wiretapping program when it came to light and now will have to decide whether Tamm is a hero or a traitor.

W. Mark Felt, Watergate Deep Throat, Dies at 95
Tim Weiner

W. Mark Felt, who was the No. 2 official at the F.B.I. when he helped bring down President Richard M. Nixon by resisting the Watergate cover-up and becoming Deep Throat, the most famous anonymous source in American history, died Thursday. He was 95 and lived in Santa Rosa, Calif.

His death was confirmed by Rob Jones, his grandson.

In 2005, Mr. Felt revealed that he was the one who had secretly supplied Bob Woodward of The Washington Post with crucial leads in the Watergate affair in the early 1970s. His decision to unmask himself, in an article in Vanity Fair, ended a guessing game that had gone on for more than 30 years.

The disclosure even surprised Mr. Woodward and his partner on the Watergate story, Carl Bernstein. They had kept their promise not to reveal his identity until after his death. Indeed, Mr. Woodward was so scrupulous about shielding Mr. Felt that he did not introduce him to Mr. Bernstein until this year, 36 years after they cracked the scandal. The three met for two hours one afternoon last month in Santa Rosa, where Mr. Felt had retired. The reporters likened it to a family reunion.

Mr. Felt played a dual role in the fall of Nixon. As a secret informant, he kept the story alive in the press. As associate director of the Federal Bureau of Investigation, he fought the president’s efforts to obstruct the F.B.I.’s investigation of the Watergate break-in.

Without Mr. Felt, there might not have been a Watergate — shorthand for the revealed abuses of presidential powers in the Nixon White House, including illegal wiretapping, burglaries and money laundering. Americans might never have seen a president as a criminal conspirator, or reporters as cultural heroes, or anonymous sources like Mr. Felt as a necessary if undesired tool in the pursuit of truth.

Like Nixon, Mr. Felt authorized illegal break-ins in the name of national security and then received the absolution of a presidential pardon. Their lives were intertwined in ways only they and a few others knew.

Nixon cursed his name when he learned early on that Mr. Felt was providing aid to the enemy in the wars of Watergate. The conversation was recorded in the Oval Office and later made public.

“We know what’s leaked, and we know who leaked it,” Nixon’s chief of staff, H. R. Haldeman, told the president on Oct. 19, 1972, four months after a team of washed-up Central Intelligence Agency personnel hired by the White House was caught trying to wiretap the Democratic Party’s national offices at the Watergate complex.

“Somebody in the F.B.I.?” Nixon asked.

“Yes, sir,” Mr. Haldeman replied. Who? the president asked. “Mark Felt,” Mr. Haldeman said. “Now why the hell would he do that?” the president asked in a wounded tone.

No one, including Mr. Felt, ever answered that question in full. Mr. Felt later said he believed that the president had been misusing the F.B.I. for political advantage. He knew that Nixon wanted the Watergate affair to vanish. He knew that the White House had ordered the C.I.A. to tell the bureau, on grounds of national security, to stand down in its felony investigation of the June 1972 break-in. He saw that order as an effort to obstruct justice, and he rejected it. That resistance led indirectly to Nixon’s resignation.

Mr. Felt had expected to be named to succeed J. Edgar Hoover, who had run the bureau for 48 years and died in May 1972. The president instead chose a politically loyal Justice Department official, L. Patrick Gray III, who later followed orders from the White House to destroy documents in the case.

The choice infuriated Mr. Felt. He later wrote that the president “wanted a politician in J. Edgar Hoover’s position who would convert the bureau into an adjunct of the White House machine.”

Hoover had sworn off break-ins without warrants — “black bag jobs,” he called them — in 1966, after carrying them out at the F.B.I. for four decades. The Nixon White House hired its own operatives to steal information, plant eavesdropping equipment and hunt down the sources of leaks. The Watergate break-in took place six weeks after Hoover died.

While Watergate was seething, Mr. Felt authorized nine illegal break-ins at the homes of friends and relatives of members of the Weather Underground, a violent left-wing splinter group. The people he chose as targets had committed no crimes. The F.B.I. had no search warrants. He later said he ordered the break-ins because national security required it.

In a criminal trial, Mr. Felt was convicted in November 1980 of conspiring to violate the constitutional rights of Americans. Nixon, who had denounced him in private for leaking Watergate secrets, testified on his behalf. Called by the prosecution, he told the jury that presidents and by extension their officers had an inherent right to conduct illegal searches in the name of national security.

“As Deep Throat, Felt helped establish the principle that our highest government officials are subject to the Constitution and the laws of the land,” the prosecutor, John W. Nields, wrote in The Washington Post in 2005. “Yet when it came to the Weather Underground bag jobs, he seems not to have been aware that this same principle applied to him.”

Seven months after the conviction, President Ronald Reagan pardoned Mr. Felt. Then 67, Mr. Felt celebrated the decision as one of great symbolic value. “This is going to be the biggest shot in the arm for the intelligence community for a long time,” he said. After the pardon, Nixon sent him a congratulatory bottle of Champagne.

Mr. Felt then disappeared from public view for a quarter of a century, denying unequivocally, time and again, that he had been Deep Throat. It was a lie he told to serve what he believed to be a higher truth.

William Mark Felt was born in Twin Falls, Idaho, on Aug. 17, 1913. After graduating from the University of Idaho, he was drawn to public service in Washington and went to work for Senator James P. Pope, a Democrat.

In 1938, he married his college sweetheart, Audrey Robinson, in Washington. They were wed by the chaplain of the House of Representatives. She died in 1984. The couple had a daughter, Joan, and a son, Mark. They and four grandsons survive Mr. Felt.

Days before Pearl Harbor, after earning a law degree in night classes at George Washington University, Mr. Felt applied to the F.B.I. and joined it in January 1942. He spent most of World War II hunting German spies.

After stints in Seattle, New Orleans and Los Angeles, Hoover named him special agent in charge of the Salt Lake City and Kansas City offices in the late 1950s. Rising to high positions at the headquarters in the 1960s, he oversaw the training of F.B.I. agents and conducted internal investigations as chief of the inspection division.

In early 1970, while waiting in an anteroom of the West Wing of the White House, Mr. Felt chanced to meet a Navy lieutenant delivering classified messages to the National Security Council staff. The young man in dress blues was Bob Woodward. By his own description fiercely ambitious and in need of adult guidance, Mr. Woodward tried to wring career counseling from his elder. He left the White House with the number to Mr. Felt’s direct line at the F.B.I.

On July 1, 1971, Hoover promoted Mr. Felt to deputy associate director, the third in command at the headquarters, beneath Hoover’s right-hand man and longtime companion, Clyde A. Tolson. With both of his superiors in poor health, Mr. Felt increasingly took effective command of the daily work of the F.B.I. When Mr. Hoover died and Mr. Tolson retired, he saw his path to power cleared.

But Nixon denied him, and he seethed with frustrated ambition in the summer of 1972.

One evening that summer, a few weeks after the Watergate break-in, Mr. Woodward, then a neophyte newspaperman, knocked on Mr. Felt’s door in pursuit of the story. Mr. Felt decided to co-operate with him and set up an elaborate system of espionage techniques for clandestine meetings with Mr. Woodward.

If Mr. Woodward needed to talk, he would move a flowerpot planted with a red flag on the balcony of his apartment on P Street in Washington. If Mr. Felt had a message, Mr. Woodward’s home-delivered New York Times would arrive with an inked circle on Page 20. Mr. Woodward would leave his apartment by the back alley that night and take one taxi to a downtown hotel, then a second to an underground parking garage in the Rosslyn section of Arlington, Va.

Within weeks, Mr. Felt steered The Post to a story establishing that the Watergate break-in was part of “a massive campaign of political spying and sabotage” directed by the White House. For the next eight months, he did his best to keep the newspaper on the trail, largely by providing, on “deep background,” anonymous confirmation of facts reporters had gathered from others. The Post’s managing editor, Howard Simons, gave him his famous pseudonym, taken from the pornographic movie then in vogue.

By June 1973, Mr. Felt was forced out of the F.B.I. Soon he came under investigation by some of the same agents he had supervised, suspected of leaking information not to The Post but to The New York Times. He spent much of the mid-1970s testifying in secret to Congress about abuses of power at the F.B.I. Millions of Americans knew him only as a shadowy figure in the 1976 movie made from the Watergate saga, “All the President’s Men,” which made “Woodward and Bernstein” legends of American journalism. In the movie, Deep Throat (Hal Holbrook) gives Mr. Woodward (Robert Redford) probably the most famous bit of free advice in the history of investigative journalism. It was a three-word road map to the heart of the matter: “Follow the money.”

Mr. Felt never said it. It was part of the myth that surrounded Deep Throat.

Hasbro Dropping Suit Against Makers of Facebook Game Scrabulous

Hasbro has dropped its lawsuit against the makers of a popular online version of board game Scrabble.

According to documents filed in U.S. District Court in New York, Hasbro dropped the lawsuit Friday.

Hasbro, which owns the North American rights to the word game, sued Jayant and Rajat Agarwalla, brothers from Calcutta, India, this summer. The brothers developed the unauthorized version, called Scrabulous, after they couldn't find an online version they liked.

The court documents did not specify a reason for the withdrawal of the case.

RJ Softwares, the Agarwalla brothers' company, said in a statement that it has agreed not to use the term "Scrabulous" and made changes to different versions of the game it created after the lawsuit was filed.

The changes to the Wordscrapper application found on online networking site Facebook and games at Lexulous.com help distinguish them from Scrabble, RJ Softwares said.

"The agreement provides people in the U.S. and Canada with a choice of different games and also avoids potentially lengthy and costly litigations," the statement said.

Hasbro and the Agarwalla brothers did not immediately return messages left seeking comment on Monday. A lawyer for Hasbro declined to comment and referred questions to the Pawtucket, R.I.-based company.

Scrabulous was highly popular on Facebook and became one of the online networking site's most popular activities until it was removed this summer.

Hasbro had asked Facebook to block the program in the U.S. and Canada, something the site initially resisted despite risks of losing immunity protection from copyright lawsuits. The game eventually was taken down, prompting people to form groups with names like "Save Scrabulous," which had more than 49,000 members still in it on Monday.

In early July, video game maker Electronic Arts released an official Scrabble version for American and Canadian Facebook users under a licensing deal with Hasbro. The authorized online Scrabble attracted only a fraction of the half-million users of Scrabulous.

Hasbro sued the brothers after EA's release, accusing them of violating Hasbro's copyright and trademarks. The lawsuit sought to end Scrabulous and asked for unspecified damages.

In late August, Facebook said it was forced to disable Scrabulous after another one of Scrabble's rights owners, Mattel, made a formal removal request and the developers of Scrabulous took no action themselves.

Mattel, which owns the rights to Scrabble outside of North America, filed a lawsuit against the brothers in India claiming violations of intellectual property.

It was not immediately clear what the status of that lawsuit is. Representatives at Mattel did not immediately return messages left seeking comment.

Copyright Law Amended
Chua Hian Hou

NEW changes to copyright laws will help the visually-handicapped and academics in film and media studies, but home users will be stopped from cracking old computer programs and games.

From Jan 1, the visually-disabled will be allowed to crack electronic books where the read-aloud function is disabled, so they can access the book's contents. The read-aloud function reads out the text of an electronic book.

Film and media lecturers will also be allowed to extract video clips from copy-protected movies for classroom use, where they were previously forced to use the original discs to stay within the law.

Movie discs are usually encrypted with copy-protection technology, although there are tools available that allow users to bypass this copy-protection.

The Copyright Act has also been amended to prohibit home users from cracking obsolete computer programs or video games for which they had lost the access codes, even if they originally bought the items.

From Jan 1, only libraries will be allowed to make copies of obsolete computer programs and video games for archival purposes.

The changes, said Intellectual Property Office of Singapore director-general Liew Woon Yin, 'have been carefully crafted to balance the concerns of copyright owners and the needs of users'.

It remains an infringement under the Singapore Copyright Act for other users to circumvent copy-protection measures.

For instance, users are still prohibited from using a password generator to generate access codes to play pirated video games or using software like DeCSS to make unauthorised copies of DVD movies. Those found guilty face fines of up to $20,000.

The change, said the Singapore Association of the Visually Handicapped's executive director, Mr Edmund Wan, is 'very good news' for the Republic's 3,000-plus visually-handicapped people, as it gives them a 'wider choice of materials'.

The Association, he said, 'had been very scared of doing this... of even accepting such materials from our foreign counterparts' for fear or breaking the law.

Psychiatrists Revise the Book of Human Troubles
Benedict Carey

The book is at least three years away from publication, but it is already stirring bitter debates over a new set of possible psychiatric disorders.

Is compulsive shopping a mental problem? Do children who continually recoil from sights and sounds suffer from sensory problems — or just need extra attention? Should a fetish be considered a mental disorder, as many now are?

Panels of psychiatrists are hashing out just such questions, and their answers — to be published in the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders — will have consequences for insurance reimbursement, research and individuals’ psychological identity for years to come.

The process has become such a contentious social and scientific exercise that for the first time the book’s publisher, the American Psychiatric Association, has required its contributors to sign a nondisclosure agreement.

The debate is particularly intense because the manual is both a medical guidebook and a cultural institution. It helps doctors make a diagnosis and provides insurance companies with diagnostic codes without which the insurers will not reimburse patients’ claims for treatment.

The manual — known by its initials and edition number, DSM-V — often organizes symptoms under an evocative name. Labels like obsessive-compulsive disorder have connotations in the wider culture and for an individual’s self-perception.

“This is not cardiology or nephrology, where the basic diseases are well known,” said Edward Shorter, a leading historian of psychiatry whose latest book, “Before Prozac,” is critical of the manual. “In psychiatry no one knows the causes of anything, so classification can be driven by all sorts of factors” — political, social and financial.

“What you have in the end,” Mr. Shorter said, “is this process of sorting the deck of symptoms into syndromes, and the outcome all depends on how the cards fall.”

Psychiatrists involved in preparing the new manual contend that it is too early to say for sure which cards will be added and which dropped.

The current edition of the manual, which was published in 2000, describes 283 disorders — about triple the number in the first edition, published in 1952.

The scientists updating the manual have been meeting in small groups focusing on categories like mood disorders and substance abuse — poring over the latest scientific studies to clarify what qualifies as a disorder and what might distinguish one disorder from another. They have much more work to do, members say, before providing recommendations to a 28-member panel that will gather in closed meetings to make the final editorial changes.

Experts say that some of the most crucial debates are likely to include gender identity, diagnoses of illness involving children, and addictions like shopping and eating.

“Many of these are going to involve huge fights, I expect,” said Dr. Michael First, a professor of psychiatry at Columbia who edited the fourth edition of the manual but is not involved in the fifth.

One example, Dr. First said, is binge eating, now in the manual’s appendix as a tentative category.

“A lot of people want that included in the manual,” Dr. First said, “and there’s some research out there, some evidence that drugs are helpful. But binge eating is also a normal behavior, and you run the risk of labeling up to 30 percent of people with a disorder they don’t really have.”

The debate over gender identity, characterized in the manual as “strong and persistent cross-gender identification,” is already burning hot among transgender people. Soon after the psychiatric association named the group of researchers working on sexual and gender identity, advocates circulated online petitions objecting to two members whose work they considered demeaning.

Transgender people are themselves divided about their place in the manual. Some transgender men and women want nothing to do with psychiatry and demand that the diagnosis be dropped. Others prefer that it remain, in some form, because a doctor’s written diagnosis is needed to obtain insurance coverage for treatment or surgery.

“The language needs to be reformed, at a minimum,” said Mara Keisling, executive director of the National Center for Transgender Equity. “Right now, the manual implies that you cannot be a happy transgender person, that you have to be a social wreck.”

Dr. Jack Drescher, a New York psychoanalyst and member of the sexual disorders work group, said that, in some ways, the gender identity debate echoed efforts to remove homosexuality from the manual in the 1970s.

After protests by gay activists provoked a scientific review, the “homosexuality” diagnosis was dropped in 1973. It was replaced by “sexual orientation disturbance” and then “ego-dystonic homosexuality” before being dropped in 1987.

“You had, in my opinion, what was a social issue, not a medical one; and, in some sense, psychiatry evolved through interaction with the wider culture,” Dr. Drescher said.

The American Psychiatric Association says the contributors’ nondisclosure agreement is meant to allow the revisions to begin without distraction and to prevent authors from making deals to write casebooks or engage in other projects based on the deliberations without working through the association.

In a phone interview, Dr. Darrel A. Regier, the psychiatric association’s research director, who with Dr. David Kupfer of the University of Pittsburgh is co-chairman of the task force, said that experts working on the manual had presented much of their work in scientific conferences.

“But you need to synthesize what you’re doing and make it coherent before having that discussion,” Dr. Regier said. “Nobody wants to put a rough draft or raw data up on the Web.”

Some critics, however, say the secrecy is inappropriate.

“When I first heard about this agreement, I just went bonkers,” said Dr. Robert Spitzer, a psychiatry professor at Columbia and the architect of the third edition of the manual. “Transparency is necessary if the document is to have credibility, and, in time, you’re going to have people complaining all over the place that they didn’t have the opportunity to challenge anything.”

Scientists who accepted the invitation to work on the new manual — a prestigious assignment — agreed to limit their income from drug makers and other sources to $10,000 a year for the duration of the job. “That’s more conservative” than the rules at many agencies and universities, Dr. Regier said.

This being the diagnostic manual, where virtually every sentence is likely to be scrutinized, critics have said that the policy is not strict enough. They have long suspected that pharmaceutical money subtly influences authors’ decisions.

Industry influence was questioned after a surge in diagnoses of bipolar disorder in young children. Once thought to affect only adults and adolescents, the disorder in children was recently promoted by psychiatrists on drug makers’ payrolls.

The team working on childhood disorders is expected to debate the merits of adding pediatric bipolar as a distinct diagnosis, experts say. It is also expected to discuss whether Asperger’s syndrome, a developmental disorder, should be merged with high-functioning autism. The two are virtually identical, but bear different social connotations.

The same team is likely to make a recommendation on so-called sensory processing disorder, a vague label for a poorly understood but disabling childhood behavior. Parent groups and some researchers want recognition in the manual in order to help raise money for research and obtain insurance coverage of expensive treatments.

“I know that some are pushing very hard to get that in,” Dr. First said, “and they believe they have been warmly received. But you just never know for sure, of course, until the thing is published.”

In all, it is a combination of suspense, mystery and prepublication controversy that many publishers would die for. The psychiatric association knows it has a corner on the market and a blockbuster series. The last two editions sold more than 830,000 copies each.

Admen 'Steal' Internet Viewers
Lara Sinclair

ONLINE publishers have accused unscrupulous advertisers and their agencies of stealing their audiences by using a new form of audience targeting technology.
A special investigation by The Australian has revealed the growing use of "retargeting" technology which enables advertisers to slash their internet advertising costs by tagging visitors to premium websites.

The practice involves advertisers serving ads embedded with cookies to a premium website. The cookie tags visitors to the website and that data is retained.

The advertiser or agency then moves its campaign to cheaper websites but the cookie ensures the advertiser matches its ads to the original audience.

One media agency said an advertiser could pay $50 to reach 1000 visitors on a premium website but might only pay $2 for the same audience using this technology.

"You could call it stealing," said Eric Beecher, publisher of Crikey.com.au and a shareholder in online business publisher Business Spectator, a site whose high-income audience is one of many at risk of being tagged without the publisher's knowledge.

Other sites considered at risk are classified sites, niche players such as CNET and the IT sections of major publishers, whose readers are very valuable to advertisers.

"How could you rort this?" said one informed source. "Take a high-value publisher such as CNET with a tech-focused AB (high-income) audience.

"You could buy the smallest ad unit that exists on every page and you could tag every single user they see for maybe $5000 a month. They could be selling their entire audience for $5000 to an ad network."

Most publishers contacted last week said they believed the practice was still rare.

But Media's investigatons have revealed this type of audience targeting has become common in Australia over the past year.

All the agencies contacted by Media said they used the retargeting technology to cut the cost of their clients' internet ads by following users to other sites.

OMD digital managing partner Leigh Terry said it was "almost direct response practice" in sectors such as finance and telecommunications where marketers were looking for conversions (such as sales).

"We do it," he said. "From an agency perspective it's deploying clients' monies in the most efficient and effective fashion. We're tasked to deliver a result (for our advertisers), not to deliver money to publishers."

Mr Terry, whose clients include Telstra, Visa and Intel, said OMD notified publishers when it tagged their audiences.

Universal McCann national digital director Travis Johnson, whose clients include Mastercard, Microsoft and AMP, said they often tagged audiences without publishers' knowledge.

"The publishers don't know because we do it through our ad-serving system so they can't do anything about it," Mr Johnson said.

"We don't need or want necessarily to tell either the publishers or the ad networks."

At PHD Australia, digital director Jonathan Axworthy said his agency had used the technology for its client Air New Zealand. It ran a campaign on News Digital Media, tagged the audience, and then retargeted them at a lower cost on Ninemsn's Hotmail site.

"(We said) let's cookie people who visit that section and when we see them across the web we served them a Business Premier (business class) ad rather than just a normal Air New Zealand ad," Mr Axworthy said.

"It's fantastic," he said. "It reduces wastage."

Most publishers contacted by Media said they were looking at ways to stop the practice.

News Digital Media commercial director Ed Smith said he was investigating the trend (NDM is owned by News Limited, publisher of The Australian). "It's new and it's weird and no one really has thought about it yet," he said. "It's not illegal. It's possibly immoral."

Mr Beecher said he regarded it as stealing an audience a publisher might have invested millions of dollars to attract.

"We would expect to look at it very closely," he said.

CBS Interactive managing director Wendy Hogan, whose sites include CNET, said her company was reviewing the practice globally.

"It could be (damaging) depending on the extent to which it's being used," she said. "We expect to have a firm stance on it early in the new year."

Ironically, Telstra appears to be both an audience-poacher, through OMD, and a gamekeeper.

The company's digital media sales arm MediaSmart, which sells ads across Telstra's Sensis classified sites such as Yellow Pages and The Trading Post as well as representing other third-party sites, rejects ads containing suspect code.

"We've had a number of occasions where we've gone back to the agency and asked them to reconfigure their tracking tags," said Rob Manning, general manager of advertising operations for MediaSmart.

For the performance networks -- which typically count both publishers and advertisers among their clients -- audience poaching is a fraught issue.

All of them say they do not allow the practice, but some agencies said some networks and ad-serving companies promoted it.

"They love it," Universal McCann's Travis Johnson said. "They certainly welcome the revenue."

Adconion Australia chief Alex Littlejohn said the practice verged on "unscrupulous" and his network "would only do it if the publishers were aware of it".

"I can't speak for the agencies as to how they do it using their third-party ad servers like Atlas and DoubleClick," he said.

Ad-serving companies DoubleClick and Facilitate could not be reached for comment.

Stephen Dolan, the head of Microsoft Advertising -- which includes the DrivePM performance network and the Atlas ad-serving business -- said both companies rejected campaigns if they found the tracking tags.

"If we know it's going on we reject the campaign," Mr Dolan said. "You're taking the publisher's asset and using it elsewhere without their permission." He said while the company could take apart an ad to see if it included tracking tags, it was not possible to do so every time and publishers should address the practice in their terms of trade.

"We've been quite forthright about even handing publishers them terms and conditions that they can include on their insertion orders," Mr Dolan said.

If publishers ban audience poaching, it could then become a legal issue if they identified an advertiser who breached those terms.

But some publishers contacted by Media said publishers who were already fighting hard for market share would be reluctant to reject ads that might contain tracking codes for fear of losing market share.

OMD's Leigh Terry said media owners in the digital space needed to prove that targeting their audience on their site could deliver better results than getting them on other sites.

"If one (site) says no but everybody else is doing it, somebody's going to take a bath," he said.

Court Rules Patriot Act's "National Security Letter" Gag Provisions Unconstitutional

ACLU Hails Victory In Challenge To Government's Power To Silence NSL Recipients
Press release

A federal appeals court today upheld, in part, a decision striking down provisions of the Patriot Act that prevent national security letter (NSL) recipients from speaking out about the secret records demands. The decision comes in an American Civil Liberties Union and New York Civil Liberties Union lawsuit challenging the FBI's authority to use NSLs to demand sensitive and private customer records from Internet Service Providers and then forbid them from discussing the requests. Siding with the ACLU, the U.S. Court of Appeals for the Second Circuit found that the statute's gag provisions violate the First Amendment.

"We are gratified that the appeals court found that the FBI cannot silence people with complete disregard for the First Amendment simply by saying the words 'national security,'" said Melissa Goodman, staff attorney with the ACLU National Security Project. "This is a major victory for the rule of law. The court recognized the need for judicial oversight of the government's dangerous gag power and rejected the Bush administration's position that the courts should just rubber-stamp these gag orders. By upholding the critical check of judicial review, the FBI can no longer use this incredible power to hide abuse of its intrusive Patriot Act surveillance powers and silence critics."

The appeals court invalidated parts of the statute that wrongly placed the burden on NSL recipients to initiate judicial review of gag orders, holding that the government has the burden to go to court and justify silencing NSL recipients. The appeals court also invalidated parts of the statute that narrowly limited judicial review of the gag orders – provisions that required the courts to treat the government's claims about the need for secrecy as conclusive and required the courts to defer entirely to the executive branch.

"The appellate panel correctly observed that the imposition of such a conclusive presumption ignored well-settled First Amendment standards and deprived the judiciary of its important function as a protector of fundamental rights," said Arthur Eisenberg, Legal Director for the New York Civil Liberties Union.

In this regard, the opinion stated: "The fiat of a governmental official, though senior in rank and doubtless honorable in the execution of official duties, cannot displace the judicial obligation to enforce constitutional requirements."

The court, therefore, also ruled that the government must now justify the gag on the John Doe NSL recipient in the case, a gag that has been in place for more than four years.

The ACLU and New York Civil Liberties Union filed this lawsuit in April 2004 on behalf of an Internet Service Provider (ISP) that received an NSL. Because the FBI imposed a gag order on the ISP, the lawsuit was filed under seal, and even today the ACLU is prohibited from disclosing its client's identity. The FBI continues to maintain the gag order even though the underlying investigation is more than four years old (and may well have ended), and even though the FBI abandoned its demand for records from the ISP over a year and a half ago.

In September 2004, Judge Victor Marrero of the U.S. District Court for the Southern District of New York struck down the NSL statute, ruling that the FBI could not constitutionally demand sensitive records without judicial review and that permanent gag orders violated the First Amendment guarantee of free speech. The government appealed the ruling, but Congress amended the NSL provision before the court issued a decision.

The ACLU brought a new challenge to the amended provision, and in September 2007, Judge Marrero again found the statute unconstitutional.

Bills aimed at bringing the NSL authority back in line with the Constitution were introduced last year in both the House and Senate after reports had confirmed and detailed the widespread abuse of the authority by federal law enforcement. Since the Patriot Act was passed in 2001, relaxing restrictions on the FBI's use of the power, the number of NSLs issued has seen an astronomical increase, to nearly 200,000 between 2003 and 2006. A March 2008 Office of Inspector General (OIG) report revealed that, among other abuses, the FBI misused NSLs to sidestep the authority of the Foreign Intelligence Surveillance Court (FISC). In one instance, the FBI issued NSLs to obtain information after the FISC twice refused its requests on First Amendment grounds. The OIG also found that the FBI continues to impose gag orders on about 97 percent of NSL recipients and that, in some cases, the FBI failed to sufficiently justify why the gag orders were imposed in the first place.

In addition to this case, the ACLU has challenged this Patriot Act statute multiple times. One case was brought on behalf of a group of Connecticut librarians and another case, called Internet Archive v. Mukasey, involved an NSL served on a digital library in California. In the latter case, the FBI withdrew the NSL and the gag as part of the settlement of a legal challenge brought by the ACLU and the Electronic Frontier Foundation.

Attorneys in Doe v. Mukasey are Jameel Jaffer, Goodman and L. Danielle Tully of the ACLU National Security Project and Eisenberg of the NYCLU.

Today's decision can be found online at: http://www.aclu.org/safefree/nsaspyi...l20081215.html

More information on Doe v. Mukasey and NSLs is available online at: www.aclu.org/nsl

It's Tom Hanks vs. Mel Gibson as SAG Splits Into Strike Camps
Natalie Finn

All work and no contract has made members of the Screen Actors Guild a surly bunch.

While support for an actors' strike was already running thin thanks to the industry-wide burnout still being felt from the 100-day writers' strike in 2007-08, the current state of the nation's economy—not to mention the just-underway awards season—has Hollywood up in arms over what could be another potentially disastrous work stoppage.

A select group of A-listers is in favor of authorizing a strike, should SAG leadership choose to go that route, but nearly 150 big-deal actors have now gone ahead and publicized their avowed opposition to such a move.

George Clooney, Tom Hanks, Alec Baldwin, Cameron Diaz, Steve Carell, Jennifer Garner, Charlize Theron, Matt Damon, Morgan Freeman and Eva Longoria Parker are among the boldfaced names found on a petition that was sent to SAG National President Alan Rosenberg asking the board to cancel a strike-authorization vote scheduled for Jan. 2.

"We feel very strongly that SAG members should not vote to authorize a strike at this time," the petition read. "We don't think that an authorization can be looked at as merely a bargaining tool. It must be looked at as what it is—an agreement to strike if negotiations fail.

"We support our union and we support the issues we're fighting for, but we do not believe in all good conscience that now is the time to be putting people out of work."

David Boreanaz, Ewan McGregor, Sally Field, Michael C. Hall, Felicity Huffman, Rob Lowe, Kevin Spacey, Josh Brolin, Pierce Brosnan, Glenn Close, Donald Sutherland, Billy Crystal, Ted Danson, Kelsey Grammer, Edward Norton, Tobey Maguire, Bradley Whitford and Helen Hunt also lent their signatures to the document.

Then again, plenty of A- and B-listers are in favor of authorizing a strike, having signed a "Statement of Support" for Rosenberg & Co.'s studio-fighting tactics.

Among the 30 prominent thesps who will stand by SAG if it chooses to play even harder ball are Mel Gibson, Ed Harris, Holly Hunter, Martin Sheen, Sandra Oh, Jerry O'Connell, Rob Morrow, Hal Holbrook, Dixie Carter, Ed Asner, Elliott Gould, Valerie Harper, Robert Hays, Justine Bateman, Scott Bakula and Diane Ladd.

SAG's contract with the studio-representing Alliance of Motion Picture and TV Producers expired June 30 and actors have been working under the terms of their own deal ever since.

As was the case with the Writers Guild of America, SAG continues to quibble over new-media residuals and other compensation-related issues.

The AMPTP's response to SAG's upcoming vote was as follows: "SAG members are going to be asked to bail out a failed negotiating strategy by going on strike during one of the worst economic crises in history. We hope that working actors will study our contract offer carefully and come to the conclusion that no strike can solve the problems that have been created by SAG's own failed negotiation strategy."

Madonna Settles Divorce for up to $92 Million

Madonna has paid her ex-husband British director Guy Ritchie up to 60 million pounds ($92 million) to settle their divorce after eight years of marriage, her spokeswoman said on Monday.

Liz Rosenberg said the singer, 50, had given Ritchie, 40, between 50 and 60 million pounds ($76 million and $92 million) as part of their divorce, which was granted by a British court on November 21.

She said that sum includes the couple's English country estate, Ashcombe, which is valued at about 20 million pounds ($30 million).

The couple's combined wealth has been estimated at about $525 million, but Madonna accounts for most of it.

Rosenberg said custody arrangements for the couple's children have not been finalized.

Madonna and Ritchie have an 8-year-old son, Rocco, and 3-year-old son David, adopted from Malawi. The singer also has a daughter Lourdes, born in 1996, from her relationship with fitness trainer Carlos Leon.

Madonna, one of the most successful singers of all time with estimated album sales of more than 200 million, was married once before, to actor Sean Penn, in the 1980s.

Madonna and Ritchie announced their split in October, nearly eight years after their fairytale wedding at Skibo Castle in Scotland.

Ritchie is a British film director who is making Hollywood blockbuster "Sherlock Holmes" starring Robert Downey Jr. as the Victorian-era super sleuth.

(Reporting by Michelle Nichols, Editing by Sandra Maler)

Jobs to Skip Apple Event at Macworld
Brad Stone

For the last 10 years, attending Steven P. Jobs’s annual keynote address at the Macworld Expo in San Francisco has been a sacred pilgrimage for Apple enthusiasts. That ritual has now ended.

Apple announced on Tuesday that Mr. Jobs would not appear at the Macworld conference in January and that the company’s presentation would instead be delivered by Philip W. Schiller, Apple’s senior vice president for worldwide product marketing. Apple also said it would withdraw from the conference after this year’s event.

The news unleashed a wave of speculation among Apple fans about what this portends for the computer maker’s lineup of products — and for Mr. Jobs’s health, which has been subjected to intense scrutiny in the last few years.

In a statement, Apple strove to undercut any downbeat interpretation of the news.

The company said that it was abandoning Macworld because it was able to unveil new products at its own events, like its Worldwide Developers Conference, held in June in San Francisco, and what has become an annual event each September at its campus in Cupertino, Calif., devoted to the iPod.

The company is also now in a position to broadcast those events online and in its growing network of 250 well-trafficked stores around the world, reaching a broader audience than it could inside any single convention hall.

“Phil is giving the keynote because this will be Apple’s last year at the show,” said Steve Dowling, an Apple spokesman. “It doesn’t make sense for us to make a major investment in a trade show we will no longer be attending.”

Despite that explanation, the news that Mr. Jobs would not be making his anticipated public appearance at Macworld struck the predictable chords of anxiety among those who follow Apple. As bloggers and analysts traded rumors and theories about what it all means, Apple investors also reacted to the news, sending Apple shares down as much as 6 percent in after-hours trading.

Mr. Jobs is a survivor of pancreatic cancer and has appeared unusually thin at recent appearances, though Apple says his health is fine.

Another explanation is that Apple’s slate of new product announcements in January is so unexciting that it does not require the considerable presentation talents of Mr. Jobs himself. In past years Mr. Jobs used the Macworld stage to unveil the iPhone and the thin MacBook Air.

The Apple rumor mill has predicted that for January’s show Apple is readying a new version of the Mac Mini, a boxy computer that is sold without a monitor, and a smaller version of the iPhone. If true, neither announcement would induce paroxysms of delight in the Apple faithful.

“Maybe they do have some surprising news and they are giving Phil Schiller a chance to introduce some exciting products,” said Gene Munster, an analyst at Piper Jaffray. “But the likelihood of that is low.”

Apple has appeared in recent months to be making an effort to shine the public spotlight on executives other than Mr. Jobs. Timothy D. Cook, Apple’s chief operating officer, delivered a presentation to press and analysts at the October introduction of new Macintosh laptops.

Apple executives have also said they have a succession plan, but they have not publicly discussed it.

Tuesday’s announcement was a clear blow to IDG, a technology media company based in Framingham, Mass., that has been staging Macworld since 1984. This year’s conference has already been hit by the news that several large companies, including Belkin, a computer accessories maker, and Adobe, the software publisher, would be scaling back their presence at the show for economic reasons.

Paul Kent, an IDG vice president and the general manager of the Macworld show, said he expected roughly the same number of exhibitors and attendees at the show in January as last January. He would not comment specifically about Apple’s news, but he affirmed IDG’s commitment to staging the show.

“We look forward to many successful years of Macworld to come,” Mr. Kent said, reading from a prepared statement.

How Apple Could Survive Without Steve Jobs
Justin Scheck and Nick Wingfield

Apple Inc. set off shock waves Tuesday by announcing Steve Jobs will not speak at what the company said would be its final appearance at the Macworld trade show. The news sent the company's stock downward, and raised questions about whether Mr. Jobs had new health problems or some new products were not ready.

But another question is likely to persist after the debate dies down: How well could Apple keep up the pace of new products without its iconic chief executive?

Speculation about the continued reign of Mr. Jobs -- which has popped up from time to time since his 2004 treatment for cancer -- underscore how closely Apple's fashion-setting products are identified with its co-founder. There is no sign of any change in his status; an Apple spokesman won't address the issue of his health, but said, "If Steve or the board decides that Steve is no longer capable of doing his job as CEO of Apple, I am sure they will let you know."

What if that situation does change? There is reason for optimism, based on the evolution of the team that develops Apple's hardware, software and services, some people familiar with the company's internal workings say. Some of them believe the group is now strong enough that, barring an exodus of top talent, the company could keep churning out innovative products without Mr. Jobs.

Mr. Jobs did not respond to a request for comment.

In one possible sign of confidence in the management team, an unprecedented number of executives presented during the company's press event to unveil its new MacBook lineup in October, though Mr. Jobs still dominated the event.

Mr. Jobs returned to Apple in 1997— he had left in 1985— and has since overseen the introduction of such ground-breaking products as the iMac, iPod and iPhone. He plays an unusually important role for a CEO in the gestation of such gadgets, agonizing over details that could impact users' experience.

Not that Mr. Jobs actually designs products himself. He serves more like an "editor in chief" in refining and improving ideas for Apple gadgets, according to former Apple executives.

"He didn't come up with the ideas, he just filtered them," says Bill Bull, a retired Apple engineer who worked for Mr. Jobs at Apple in the 1980s and again after Mr. Jobs returned.

The hands-on work of Apple's innovations depend more directly on subordinates such as Jonathan Ive, an Apple senior vice president who oversees the company's industrial design team. His group is primarily associated with the physical look and feel of products, such as the unusually slender Macbook Air.

Scott Forstall, another senior vice president, leads the team responsible for the iPhone's operating system and other software. In a sign of his growing importance at the company, Mr. Forstall was twice given the chance to speak at media and technical events earlier this year--and has shown some of the same showmanship that is Mr. Jobs' trademark.

Other crucial figures at Apple now include Ron Johnson, senior vice president of Apple retail, who has masterminded the success of Apple's stores, the hip electronics emporiums that have played a crucial role in the growth of the iPod and Macintosh in recent years.

One change to the team was the announcement in early November that Tony Fadell was stepping down as senior vice president of Apple's iPod division, which makes the innards of those popular gadgets carry out their products' slick features. He first conceived of the iPod, and convinced Mr. Jobs to support the idea despite skepticism from others in the company. Mr. Fadell said he will remain an adviser to Mr. Jobs; Mark Papermaster, a former International Business Machines Corp. executive, has been named to assume the iPod post.

For every design project in the pipeline, Mr. Jobs will hold meetings of two or three hours every week or two with key members of the product team. At those meetings, Mr. Jobs will critique the work in progress and also suggest adding or cutting features.
Glenn Reid, a software developer during Apple's early years who had another stint at the company that ended in 2003, recalls one such meeting just days before a photo-editing program was to go into production. Mr. Jobs decided at the last minute that an index feature on the software made the system unnecessarily complex, and decided to eliminate it, even though documentation for the product had already been printed. It was frustrating to Mr. Reid and his software team, "but it made the product better," Mr. Reid says.

Mr. Jobs's unwillingness to accept compromises – and the unquestioned authority that lets him issue last-minute edicts – have become a key to Apple's success in developing new products, Mr. Reid says. George Crow, an Apple engineer in the 1980s and again from 1998 to 2005, noted that the company struggled during the years when Mr. Jobs was not running Apple.

On the other hand, certain of Mr. Jobs's uncompromising principles with computers – such as wanting "to make the inside beautiful" – ran counter to more practical impulses. On the original Macintosh PC, Mr. Crow says, Mr. Jobs wanted the internal wiring to be in the colors of Apple's early rainbow logo (Mr. Crow says he eventually convinced Mr. Jobs it was an unnecessary expense). On another machine that Mr. Crow worked on for NeXT – the computer maker Mr. Jobs founded between Apple stints – he says Mr. Jobs insisted that the internal power supply be nickel plated, an expensive ornamentation that was eventually discontinued.

More recently, Mr. Crow says, he lobbied for the power supply on an Apple notebook PC to have a flexible rubber piece at the base of the power cord to keep it from pulling out. But designers working for Mr. Ive were set on a design without the piece of rubber, Mr. Crow says, since it looked sleeker. Eventually, a high rate of returns due to the cord pulling out led Apple to add the rubber piece, he says.

Michael Mace, who worked at Apple during Mr. Jobs's absence, argues that Apple should have a successor on the product side who's given a mandate to singlehandedly make key decisions, like Mr. Jobs does now. When Mr. Jobs was gone, Mr. Mace said, good ideas were often lost when committees of executives would compromise too much. "What they would choose was the safest design," he said, rather than the best one.

But Mr. Crow contends that Mr. Jobs has now hired or elevated enough people whose product vision mirrors his that the company could continue to thrive. Mr. Ive is particularly in tune with Mr. Jobs's thinking, he notes. Mr. Jobs's sensibilities are also so deeply ingrained in lower-ranking designers and engineers that "a lot of people there will say 'gee, what would Steve think about this,' when Steve really isn't thinking about it," Mr. Crow says.

Rick Devine, an executive recruiter in Silicon Valley with Devine Capital Partners, thinks Apple could continue to thrive in a post-Jobs world, predicting that the company will depend more on execution in the coming years than the kind of radical reshaping Mr. Jobs engineered over the past decade. Mr. Devine helped recruit Tim Cook, now Apple's chief operating officer, to the company more than a decade ago.

Mr. Cook, who briefly ran Apple during Mr. Jobs's cancer treatment four years ago, is widely expected to immediately pick up the reins again if that were to become necessary. But the choice of a permanent successor may be another question.

Apple won't discuss details of its succession plan. But Mr. Devine expects Apple to do something like what Walt Disney Co. did a few years ago in picking a CEO; the entertainment giant considered an internal candidate, Robert Iger, as well with outside executives such as eBay Inc.'s former CEO Meg Whitman.

He said corporate boards rarely disclose in advance of a formal CEO search who the most likely internal candidate is for the top job. "That's not healthy for the four or five people who would like to be considered for the role," Mr. Devine says.

Most observers believe that without Mr. Jobs -- whose on-stage product revelations have become major media events -- the "kind of excitement that comes out on a periodic basis would be far less," said Charlie Wolf, an analyst who follows Apple for Needham & Co.

There is little sign that Mr. Jobs is ready to give up the position of public pitchman, despite Apple's announcement Tuesday that said the keynote presentation at this year's Macworld show in early January will be given by Phillip Schiller, its marketing chief. Apple spokesman Steve Dowling traced the switch to its decision to stop using Macworld as a major forum.

Though Mr. Jobs's gaunt appearance at an event last June event set off jitters about his health, subsequent statements Mr. Jobs made to associates suggested little reason for concern, people familiar with the matter say. He told associates that he recovered from an infection that kept him bedridden for several days before the June event, and previously had surgery to correct a digestive problem that caused weight loss, these people say. Mr. Jobs also told people at that time that he was cancer-free.

Apple Sued Over Apple TV
Steven Musil

A maker of wireless set-top boxes has filed a patent infringement lawsuit against Apple, claiming that the Cupertino, Calif.-based company hired away three employees with knowledge of technology that would be included in Apple TV.

In a six-page complaint filed Tuesday with the Illinois Northern Federal District Court, EZ4Media claims that Apple TV, AirPort Express, and Macintosh computers infringe on patents owned by the set-top box maker. The patents--specifically 7,130,616, 7,142,934, 7,142,935, and 7,167,765--were obtained in March by EZ4Media from Universal Electronics, according to InformationWeek, which first reported the suit.

In its suit, Bannockburn, Ill.-based EZ4Media claims that Apple hired three former Universal Electronics employees-- Nick Kalayjian, Bruce Edwards, and Wendy Goh--during the development of Apple TV.

"Each of these employees had access to (Universal's) confidential and proprietary information, and left (Universal) for Apple within 30 days of each other in the second quarter of 2005," the complaint says. "Apple TV was commercially introduced in September 2006."

Kalayjian, who now works at Tesla Motors, told InformationWeek that he wasn't involved in the development of Apple TV and declined to comment further.

EZ4Media is seeking an injunction prohibiting Apple from further acts of infringement, as well as "damages adequate to compensate it for the infringement that has occurred, but in no event less than a reasonable royalty."

This is not the first lawsuit EZ4Media has filed over these patents. In June, the company filed two suits, the first against Logitech, Netgear, and D-Link, and the second against Samsung, Pioneer, Yamaha, D&M Holdings, and Denon. Samsung was dropped from the lawsuit after an undisclosed out-of-court settlement.

Apple representatives could not immediately be reached for comment.

Apple Loses Some Shine as Mac Sales Slow

Discounts are avoided even as rivals slash prices and consumers pull back; lower estimates for 2009
Yukari Iwatani Kane and Justin Scheck

Even Apple Inc. is beginning to suffer in this year's dismal holiday season, and worries are mounting the recession will weigh on its business next year.

Apple, which has outpaced the overall personal computer market this year despite its strategy of eschewing discounts, showed its first signs of weakness in November.

Sales of Macs in U.S. stores last month declined 1% from a year ago, while industry-wide PC sales rose 2%, according to research firm NPD Group Inc., which tracks retail sales.

NPD analyst Steve Baker blamed a 35% drop in sales of desktop Macs, noting growth in Apple's laptops still outpaced rivals.

The decline marks a sharp reversal for Apple, which has enjoyed robust demand this year for its Macs, even as spending on Windows-based PCs slowed along with sales of other electronics like flat-panel TVs. To drive sales of its iPhone, analysts expect Apple to begin selling it at Wal-Mart Stores Inc., possibly at a discount.

Some analysts are worried that sales will slow after the holidays as consumers pull back. On Monday, Goldman Sachs analyst David Bailey cut his estimate for Apple's 2009 profit, warning "some nicks have started to emerge." Mr. Bailey warned the company faces "a tougher environment" in the first two quarters of next year, when he believes consumer demand will further deteriorate.

Until last month, Apple's premium-pricing strategy seemed to be paying off, as the company boosted profit and gained market share from Windows-based PC rivals like Hewlett-Packard Co. and Dell Inc. at a steady rate. In October, for example, Apple shipments grew 28% from a year earlier-four times the growth rate of the overall market, according to NPD.

An Apple spokesman said the Cupertino, Calif., company doesn't comment on monthly sales. The company's shares, which were above $150 in September, closed Monday at $94.75, down 3.6% for the day.

The November data indicate that falling prices for Windows-based PCs, and the rise of low-priced computers like netbooks -- mini notebooks that cost as little as $300 -- have finally tripped Apple, said Gene Munster, an analyst at Piper Jaffray, who still expects Apple to continue outpacing the market over the next year. "What you're seeing in the numbers is price sensitivity with the consumer," he said.

Apple Chief Executive Steve Jobs told analysts in October the company wasn't cutting prices on Macs, which make up 46% of the company's revenue, because "we're not tremendously worried" the downturn will drive customers to cheaper PCs.

Apple has steered away from the low-margin netbook market in favor of higher-end computers. "We don't know how to make a $500 computer that's not a piece of junk," Mr. Jobs said in October when the company reported earnings.

Apple rivals like H-P and Dell offered discounts weeks earlier than usual this holiday season, dropping some prices by as much as 50%. Mr. Munster said since last December, the average Windows PC price is down 35% to 45%; in contrast, Apple has offered only modest discounts of 5% to 10% on its PCs, analysts said.

The strategy translates to a big bite into consumers' wallets. On Amazon.com last week, an H-P Pavilion laptop with a 14.1-inch screen was marked down from $1,074 to $760. In contrast, an Apple MacBook with a 13.3-inch screen, less memory and less storage capacity was $966, just $33 below its list price.

Apple has also held the line on its desktop iMac lineup, which starts at $1,199. Meanwhile, Dell's all-in-one XPS One desktop machines start at $899.

In October, Apple lowered the price of its entry-level white MacBook laptop to $999 from $1,099 and refreshed its main MacBook line by packing higher-end features -- like an aluminum frame and better graphics performance -- into models starting at $1,299.
NPD's data tracks in-store sales, including Apple's own outlets, but doesn't include data from Wal-Mart, which doesn't sell Macs. Retail sales account for at least 70% of consumer PC purchases, said Needham & Co. analyst Charlie Wolf.

The withering economy has weighed heavily on PC sales. Earlier this month, research firm IDC lowered its 2009 PC growth forecast, saying revenue would fall 5.3% from this year. Earlier, IDC had estimated 4.5% revenue growth.

Piper Jaffray's Mr. Munster said he expects the company to recover in coming months, and said he is maintaining his prediction that Apple next year will increase shipments by 10%, while the rest of the industry falls 5%.

Shaw Wu, an analyst at Kaufman Brothers, expects Apple to sell 2.7 million computers in the current quarter ending in late December, a 17% increase from a year ago. He expects industry-wide PC shipments this quarter to be about 85 million.

Despite short-term weakness, analysts expect Apple's products to remain more profitable than many rivals' computers. The MacBooks are forecast to deliver close to 20% profit margins, compared with 6% or less for competitors, said Toni Sacconaghi, an analyst at Sanford Bernstein & Co.

—Ben Charny contributed to this article.

Dell Trails Its Rivals in the Worst of Times
Ashlee Vance

Michael S. Dell has grown tired of discussing his company’s reinvention.

“It’s O.K. if everyone doesn’t understand what we’re doing,” Mr. Dell said in an interview at the headquarters of Dell, the computer maker.

He mocks suggestions that the company he founded takes more risks than in the past. With a grimace and a curt comment — “I don’t appreciate the tone of your reference” — he parries questions about how Dell’s culture has changed.

Mr. Dell’s weariness toward questions about what has gone wrong at the company, once the world’s largest PC vendor, is understandable. He was famous for gloating about Dell’s consistency and relentless growth, but its heralded direct-sales business model and cost-squeezing supply chain management no longer give Dell the advantages they once did. Mr. Dell has further cut costs and experimented with retail sales.

The company, based in this small town just north of Austin, needs to do more. It plans a run of acquisitions to restore growth. But it finds itself playing catch-up in one of the most difficult economic times in its history. Its strategy hinges just as much on big bets as precise execution.

“It appears they are boxed in on all sides,” said Ashok Kumar, a securities analyst with Collins Stewart. “I don’t know how they can possibly extricate themselves from the hole they are in.”

Analysts fear that after all of Dell’s revamping, the company will end up right where it is — largely dependent on the whims of businesses that buy PCs. In that case, Dell’s second act would look very much like its first, with the company remaining a distributor. Except this time, it will be fighting in a world that has moved on to favor well-rounded, more flexible rivals.

Fellow tech giants like Hewlett-Packard, EMC, Cisco Systems and Oracle have spent the last several years bulking up through a steady stream of acquisitions. H.P., for example, has increased its annual revenue to a projected $130 billion for the coming year, from $45 billion in 2001.

Oracle has doubled its annual revenue over a similar period to more than $22 billion. EMC traced 76 percent of its revenue to hardware in 2000, but it now derives 57 percent from software and services thanks to acquisitions.

These companies, along with Sun Microsystems and I.B.M., have scooped up many of the prized assets that either survived or thrived in the era after the dot-com bust, fattening their software and services arsenals.

Dell’s growth, to revenue of $56 billion in 2006 from $5.3 billion in 1996, has come from within. But company executives now concede that they need to make a large acquisition, or a series of them, to tap the repeating, higher-margin revenue streams that come from the software and services businesses.

But the company trails the major technology companies. Dell has $9 billion in cash, but a deflated share price, its unique culture and inexperience with absorbing a major acquisition raise serious questions about just how much change and breadth Dell can buy.

“It’s not a question of size,” said Brian T. Gladden, chief financial officer at Dell. “I think the question is more around diversifying our revenue base and becoming bigger in some things that are attractive for the long term.”

Dell executives point to any number of acquisition possibilities: servers and storage systems, software and services. “That is where we have to do an acquisition to become relevant,” Mr. Gladden said. “There is no question.”

Wall Street analysts speculate that Dell was gearing up to make the largest acquisition in company history. Dell spent close to $7 billion on share repurchases over the last year, while Mr. Dell has also spent his own money buying close to $200 million in Dell stock. With these gestures of confidence, Dell’s share price rose to more than $25 in late August from an eight-year low of $18.24 in April.

But Dell, like many of its peers in the tech industry, has been rocked by the overall slump in the stock market, and its shares closed last week at $11.48, a level investors have not seen since 1997. The shares closed at $11.13 on Monday.

Dell has also made relatively few acquisitions. The largest buy in its history was the November 2007 deal for the storage start-up company EqualLogic. Dell shelled out $1.4 billion for the company in a bid to outpace rivals in the market for an emerging type of storage technology called iSCSI.

This technology works well with the latest hot technology in corporate data centers, virtualization software, which is used to run many applications on a single server. Dell paid a premium for moving early; H.P. bought a company with similar technology a few months later for just $360 million.

Dell also bought small services-focused companies like Everdream and SilverBack, using their software as the backbone of a revamped services business. Here again, H.P. outshone them. It bought Electronic Data Systems, one of the world’s largest data services companies, for $13.9 billion.

H.P. has turned the process of acquiring companies and then cutting costs out of the operations into a science, while Dell is just experimenting with it. In addition, Dell must now learn to exploit and embrace purchased intellectual property after spending most of its history relying on partners’ software.

When asked about how critical a large purchase is for Dell’s long-term strategy, Mr. Dell would say only that the company has been making more buys than in the past.

“If you look at the first 22 years of the company’s life, we made basically zero acquisitions,” Mr. Dell said. “In the last two years, we made about nine acquisitions.”

Mr. Dell deflects discussions toward Dell’s internal growth, where consumer and some emerging markets sales grew by double-digits last quarter.

“We don’t have a problem of not enough opportunity,” Mr. Dell said.

Dell has responded to a changing market by investing heavily in design, and it offers some of the sleekest systems on the market. It also consults with companies in the cosmetics, medical and aerospace industries to create ever stranger products, including a proprietary bamboo sheath that wraps around a line of compact PCs.

While the consumer line drives the impression of Dell’s brand with both consumers and businesses, company executives complain that far too much attention is paid to its consumer operations, which account for just 20 percent of Dell’s $60 billion in annual revenue.

Dell executives prefer to talk about opportunities in corporate hardware and services.

Dell has applied some of the same design focus seen on consumer laptops to its server business. The company now makes server and storage parts out of metal rather than plastic, saying that customers respond well to the feel of metal handles and the firm clicking sounds of a fan or hard disk sliding into place. “You can make a cheaper product, but we’re trying to make a better product,” said Ken Musgrave, Dell’s director of industrial design.

Dell has also created a start-up within the company that makes custom hardware for large data centers run by Microsoft and Amazon.com. In just over two years, the division has grown to the point where it would be the fifth-largest server maker in the world if it were an independent company. As a result, Dell now sits at the heart of the next Internet build out.

Its services hopes are pinned on providing new automated tools for managing PCs in corporate offices and data centers. The company looks to undercut rivals like I.B.M. and H.P. with the software-based services push, while also opening up Dell-scale PC services to smaller companies, which have traditionally turned to local companies for help managing their equipment.

Today, Dell brings in about $7 billion a year from services and is banking on the businesses growing at pace in the coming years.

Wall Street analysts continue to question whether the sum of these measures will translate into a more well-rounded company.

Mr. Dell is dismissive of such doubts. He is particularly piqued by those who say Dell’s lateness to various markets was the result of deeper cultural issues.

“You mean by growing 10 times in a decade?” Mr. Dell asked. “Was that a mistake?”

Mr. Dell disagrees with suggestions that the company is taking more risks as a reaction to complacency.

“Here was a company that was manically focused on an approach to its business which caused an enormous amount of success,” Mr. Dell said, “and when it kind of realized that that wasn’t working as well as it did in earlier periods, decided to make a number of changes.”

Dell Mini 12 Gets XP, $499 Ubuntu Linux Options

Dell on Tuesday quietly expanded its options for the Inspiron Mini 12 with Linux and XP options. The new trim levels let the PC maker provide both an open-source alternative as well as offer a significantly better-performing alternative to the original, which was previously forced to use Windows Vista. The Linux version also lasts longer and runs for up to six hours despite using the same three-cell battery as the XP system.

Nearly all options are available on either configuration, including custom artwork. Only Windows XP models currently have access to 3G broadband.

Moving to the free Ubuntu install lowers the price of a Mini 12 $50 to $499 and gives it 1GB of memory, a 1.33GHz Atom processor and a 40GB hard drive. The XP option costs the standard $549 without changing features. Adding a six-cell battery and stepping up to a 1.6GHz Atom normally boosts the price by about $100 for each model but has been dropped to a $50 hike for each model.

Orders placed today for either system should ship by the end of December.

Joost: The Sequel
Caroline McCarthy

Not so long ago, Web video start-up Joost was looking a lot like the Waterworld of Web 2.0.

"We had a company and a product," the company CEO Mike Volpi said here in an interview at Joost's office, a brightly lit space a few blocks from Union Square that the company moved into several months ago. "It didn't work particularly well. We needed a new company, culturally, product-wise, target market wise."

Volpi now hopes that he can steer Joost's trajectory away from something like one of those big-budget movies that tanks at the box office, and turn it into the equivalent of a runaway DVD hit.

Built by Skype and Kazaa founders Janus Friis and Niklas Zennstrom and originally known under the shady codename "The Venice Project," Joost was buzzed about long before its launch as a potential "YouTube killer." It was pumped full of venture capital from both Silicon Valley firms and entertainment-industry stalwarts (including CBS, which now publishes CNET News) excited about the possibility for an online video hub free of the piracy issues that continue to plague YouTube. At its initial launch, Joost invite codes were traded around the blogosphere like currency.

But after high-profile content partnership announcements from CBS and Viacom, the big-name deals stopped rolling in and the limited selection became a target of criticism. Then, NBC Universal and News Corp. launched their joint venture, Hulu, and achieved a reaction opposite to Joost's--ridiculed and nicknamed "Clown Co." before its launch, the video portal was a surprise hit.

The Joost model--a downloadable peer-to-peer video client--became swiftly outdated as streaming video took off. "In Internet years, that was a long time ago," Volpi said of the company's decision to originally structure its software around a download."A lot of content owners were very concerned about basic Internet security. That was the reality two and a half years ago."

Joost then had to deal with some particularly negative press. Bloggers turned up the vitriol. A feature story in Portfolio magazine described the company's path as going from "from superhero to life support." Joost enjoyed a brief moment back in the spotlight, or at least on the desktops of bored office workers, when it streamed all of the NCAA's "March Madness" tournament games live, but it quickly fell off the radar again.

Volpi, a former high-profile executive at Cisco who was long rumored to be a potential successor to CEO John Chambers, joined the Joost in June 2007, shortly after its commercial launch. The buzz was fading, but the declarations of death hadn't yet set in.

In due time, the start-up ditched its peer-to-peer model altogether and started developing a Web-based version. "Three months after we launched, we got out of beta on the client app," Volpi said. "We shut it down and started developing the Web app."

Joost also quietly slimmed down its employee headcount from nearly 200 employees to just shy of 100. Its lofty international ambitions were trimmed back to focus on the U.S. market. Though Volpi is based in London, Joost's hub is now the 45-employee New York office. They're closer to the media and entertainment industries now, Volpi explained, as well as to the people they need to negotiate with regarding digital rights.

"As a company, internally, we finally turned the corner in the late summer," Volpi said. Now, several months later, he believes it's paying off.

Joost redux

In October, Volpi said, the site pulled in 600,000 unique visitors in the U.S. and 600,000 abroad. In November, that was up to 1.2 million in the U.S. and 1 million elsewhere. That's very small compared to YouTube's 100 million viewers or even Hulu's 23 million, according to the October numbers from traffic firm ComScore, but it shows that Joost indeed still has a pulse. There's enough funding to last "well into next year," Volpi added, and said that he hopes to make Joost profitable late in 2009.

It charges between $10 and $45 for advertising CPMs, not far off from the $25 to $35 reported for Hulu a few months ago.

The new Joost has an iPhone app, something that Hulu doesn't have yet. It also has Facebook Connect built in, as of last Friday, and Tuesday announced a deal with nine new independent music labels to bring more music videos and concert footage to the site. On that note, there's something else: new Joost, unlike the old Joost, has a target demographic. The average user is only 25 or 26 years old, viewers skew about 60 percent male, and advertisements have a clear bent toward the coveted 18 to 34 age bracket. Some of its biggest hits have been music videos and Japanese animation, Volpi said.

But even though things have been looking up, Joost's challenges are far from over. You can't simply scrub away bad press, and the recession will obviously make things even more difficult. There's also the fact that in addition to Hulu and YouTube, it now also faces competition from the likes of Sling.com, MTVMusic.com, and a host of others.

"Like all interesting markets there's a ton of people trying to do the same thing," Volpi said of the glut in online video. "(We're) less focused on the competition and more focused on trying to find the right answer."

So if he had to go back and change things, would he have gotten rid of the buzz? Volpi said he's not sure.

"It's a mixed bag. Being honest, had that hype not existed, I think the whole market would be in a different place," Volpi explained. "In some ways, obviously, it hurt us because it's an enormous challenge living up to those expectations."

"But you can't have your cake and eat it too," he concluded. "You've just got to live with that. That's a consequence we got as a result of the exposure in the early days."

Disclosure: CBS Corp., which publishes CNET News, is an investor in Joost.

New Sculpture Invites Guests to Abbott Tech

Newly unveiled sculpture by Arizona artist invites guests to Abbott Tech
Eileen FitzGerald

The pi symbol first was calculated by Archimedes more than 2,000 years ago to designate the ratio of the circumference of a circle to its diameter, and is recognizable to anyone who has taken math.

A new 20-foot sculptural rendering of pi by sculptor Barbara Grygutis of Arizona now serves as a gateway for students at Henry Abbott Technical High School.

The design took four months of four people working continually to complete and was trucked from Arizona and erected with a crane at the site last week. It's part of the school's $54 million renovation and expansion that added an 116,000-square-foot addition and renovated 84,000 square feet.

"It's what I call an environmental work of art. It's the idea of transparency, of a work of art taking in the environment," Grygutis said during an interview at the school Thursday. "That's a characteristic of my art."

The piece is made with perforated metal, a common industrial material that is transparent so the sculpture does not block anything, the artist said. It also has a programmable lighting system inside, which is one of the features in her work.

"The reason I used pi is that this is a technical school and pi is a universal symbol," Grygutis said. "It has a lot of meaning in mathematics and calculations and sort of represents the continuity of history. It also was to have something out there that students would relate to."

So far, the sculpture has fans as well as students ambivalent about its addition to the campus. But most, regardless of their feeling for the design, recognize the value of having public art there.

Renata Chaves, 19, from Danbury, who is completing her hairdressing program as a postgraduate, said she didn't understand the meaning of the sculpture until she was reminded of the meaning of pi.

"Now it makes sense because all the shops have math in their programs," she said.

She also appreciates how relevant art is to the school's shops. Drafting students draw, hairdressing students use the color wheels, digital graphic students draw on the computer and construction workers design plans for their work on houses.

"It kind of makes sense to have something like that," she said about the piece of art.

Shane Merrick, 15, a 10th-grader from Danbury, liked what Grygutis said during her talk to students Thursday about pi being an universal symbol.

"It adds a touch of sophistication to the school," Merrick said. "It sends a really good message. Any nation can identify with it because it's a universal symbol and we get a lot of different people here."

Having art available for the public to see is a good idea, he said. "Some kids don't want to go to museums but if they can see what beauty is in the real world maybe it will make them nicer people and open to more experiences."

Grygutis, 62, was born in Hartford and has done public art projects for sites in Europe, United States and Canada, but this is the first time she has made a piece for Connecticut.

She won the commission to do the sculpture in a competition the state held for its Art in Public Spaces Program. The decades-old program requires that one percent of the cost of construction or substantial renovation of publicly accessible state buildings be allocated for the commission or purchase of artwork for that site.

"It makes our public buildings much more beautiful and it also brings art to the masses," said Karen Senich, executive director of the Commission on Culture and Tourism.

"The whole idea of public art in a project like this is a wonderful concept," Abbott Tech Director Jerry Salese said Monday. "It's important. I think we need to find more ways to support the arts and what the state of Connecticut does is just outstanding."

Salese appreciated the artist talking about the process of making the sculpture to students and pointing out opportunities for them to get involved in this type of work.

Abbott Tech junior 16-year-old Boris Pena of Danbury said he likes the lights in the sculpture but is not crazy about the design.

"I think it would have been better to have an Abbott Tech symbol instead of pi," Pena said.

Maybe a pencil and shovel would have been more fitting, he said, though he knows the pi symbol is used in a lot of shops.

Anthony Ramirez, a 16-year-old junior from New Milford, agreed with his friend but both liked the idea of a sculpture on campus.

"To have a piece of public art has value. It makes the school more connected to the community and draws people here," Ramirez said.

"We don't have lot of art in Danbury," Pena said, "and having it our school is kind of a privilege."

Nude Models Brave Cold to Protest Low Pay
James Mackenzie

Artists' models in Paris stripped naked Monday, braving freezing temperatures to protest against a ban on tips and to demand better pay and recognition.

More than 20 male and female models, some posing nude while others were draped in a colorful array of shawls, sheets and fur coats, took part in the protest that had the backing of two of France's biggest labor unions.

The action was triggered by a recent decision by the Paris authorities to enforce a ban on artists' tips, known as "cornet" after the rolled-up cone of drawing paper in which painters traditionally dropped some money for their models.

"We're very badly paid and it's always been that way," said model Carole Kras, who joined others in the courtyard of a 16th century palace that houses the Paris cultural affairs offices.

"We've always had the 'cornet' to make up for some of that but now they want to get rid of it," she said, as shivering colleagues got dressed after briefly disrobing.

The demonstration was tiny compared with recent mass protests involving teachers, railway workers or public servants but in a city with such a long and rich artistic tradition, it carried extra resonance.

The models, who work for the city of Paris posing for students and professional artists, said the end of the "cornet" was the last straw.

"I don't really care about the cornet. What I want is to be better paid," said Kras, a full-time artists' model who has been doing the job for 15 years.

She said an average wage of 10 euros ($13) an hour for posing sessions that often lasted around three hours was inadequate. She added that models, classified officially as "special diverse personnel," wanted clearer professional recognition.

"It is a profession, it's tiring. Because it's physical, you need a lot of endurance and it's also expressive," she said.

"We're performers who play non-speaking roles, that's the way I always think of it."

Christophe Girard, an official responsible for cultural affairs at the Paris city hall, said authorities had no choice but to ban the cornet, which had been ruled illegal.

But he said he expected a solution would be found.

"We can talk about making up the shortfall in what they earn and we can see if the ministry would be prepared to consider recognizing this as a profession," he said.

(Editing by Katie Nguyen)

Carla Bruni Wins Damages for Nude Handbag

A French court awarded first lady Carla Bruni-Sarkozy 40,000 euros ($57,500) in damages from a company that sold bags emblazoned with a picture of her in the nude.

The case was the latest in a series of legal actions over the presidential couple's image, which have drawn accusations of frivolity from critics of the media-savvy Sarkozys.

The nude photo of Bruni-Sarkozy was taken in 1993, when she was a professional model. She had asked for 125,000 euros in damages from Pardon, a fashion chain in the French Indian Ocean island of La Reunion which used it without her permission.

"The unauthorized use of the image of Carla Bruni caused her moral and economic damage," a court in the island capital Saint Denis de la Reunion said on Thursday.

Bruni-Sarkozy's lawyers had indicated that she would donate any damages awarded to charity.

The founder and manager of the Pardon chain, Peter Mertes, said he would appeal because 40,000 euros seemed expensive to him for "a small blunder."

Mertes said 10,000 of the bags had been made and about half of those sold before Bruni-Sarkozy took legal action. He promised to dispose of the remaining stock. Pardon does not trade in mainland France.

Bruni-Sarkozy, 40, rose to fame as a model before becoming a successful pop singer. Public interest in her has surged since her whirlwind romance with President Nicolas Sarkozy, whom she married in February less than three months after they met.

The nude image printed on the Pardon bags was in the news earlier in the year, when an original black-and-white print of the Michel Comte photo fetched $91,000 at auction in New York.

It shows the young Bruni standing in a pigeon-toed pose, covering her private parts with her hands.

The Pardon bags were on sale last week for 3 euros each. Customers were given a free bag if they spent more than 5 euros. They are now banned from being sold on penalty of 100 euros per bag.

The Sarkozys have repeatedly gone to court over image issues and regularly grace the covers of glossy celebrity magazines, prompting endless satire from French critics who say they are too focused on trivial matters.

In the latest case to make headlines, Sarkozy went to court in October demanding a ban of sales of a voodoo doll representing him. An appeals court said the doll was an "offence against the personal dignity" of Sarkozy but it would be disproportionate to ban it.

(Reporting by Bertrand Grollier, writing by Estelle Shirbon)

Man Wins First Case vs China's "Human Flesh Search Engine"

A man who lost his job and was harassed by strangers after his infidelity to his late wife was detailed online has won China's first case against Internet vigilantism, the China Daily said on Friday.

A Beijing court ruled Wang Fei's reputation had been damaged by his late wife's university classmate, Zhang Leyi, who posted online the diary excerpts she wrote months before she killed herself, and by the internet company that hosted the comments.

"As Zhang was spreading the details of the affair, he also gave out details of Wang's real name, name of his company and even family addresses, which infringed the plaintiff's privacy rights," the chief judge said.

Zhang was ordered to pay Wang 5,000 yuan ($730) and the Beijing Lingyun Interactive Information and Technology Co Ltd, was ordered to pay 3,000 yuan ($440).

He said he began the website that carried the diary narrating (Wang's wife) Jiang's misery after discovering her husband's adultery two months earlier, to "commemorate Jiang's death and help bring her justice."

Internet users angered by the story mounted a cyber manhunt for the twenty-something Wang, mobilizing the phenomenon known in China as the "human flesh search engine."

Wang was reportedly forced to resign, and had trouble finding another job, after strangers tracked him down and contacted the companies where he and his lover worked, the paper said.

Expletives were painted on his parents' door, and his photos, addresses, and phone numbers were made public online.

China's 290 million-odd Internet users have claimed the scalps of several government officials through such disclosures in recent years.

Last month, China's transport ministry fired an official for manhandling an 11-year-old girl at a local restaurant, after Internet users posted images and his personal details online.

However the online mob's harassment of more mundane characters involved in domestic disputes has left academics bemoaning China's weak privacy laws.

(Reporting by Ian Ransom; Editing by Gillian Murdoch)

Defeating Bedlam
Olivia Judson

This week, I want to look at one of the unglamorous, but essential, parts of science: the problem of how to organize the information you have so that you know what you’ve got. For, like everything else in the digital age, the process of collecting and managing scientific information has been evolving. Fast.

Here’s what I used to do, way back, oh, seven years ago when I was writing a book about the sex lives of animals. When I wanted to do research on a topic, I would go to the university library — how quaint! — and photocopy the scientific papers I wanted to read. Papers such as “Homosexual rape and sexual selection in Acanthocephalan worms” from the journal Science. Or “Deformed sperm are probably not adaptive” from Animal Behaviour. If I was looking for something more obscure — say, “A review of tool use in insects” from Florida Entomologist — I sometimes had to go to a specialist library, like the one in London’s Natural History Museum.

Having collected the papers, I would take them back to my office, type the bibliographic details (authors, title, year published and so on) into my computer and put the photocopies into folders with other papers on the same general topic. In the case of the Acanthocephalan worms, it was a folder labeled “sabotage”; for the deformed sperm, it was “other sperm.” When the time came to write up my discoveries and thoughts on the subject of sperm evolution, or how males sabotage their rivals, I went to the relevant folder, read the papers, made notes on them and started writing.

As a system, it was a little clumsy — photocopying was a bore, and if I wanted to spend a couple of months writing somewhere other than my office, I had to take boxes of papers with me — but it worked. I knew what I had and where it was.

Then the scientific journals went digital. And my system collapsed.

On the good side, instead of hauling dusty volumes off shelves and standing over the photocopier, I sit comfortably in my office, downloading papers from journal Web sites.

On the bad side, this has produced informational bedlam.

The journal articles arrive with file names like 456330a.pdf or sd-article121.pdf. Keeping track of what these are, what I have, where I’ve put them, which other papers are related to them — hopeless. Attempting to replicate my old way of doing things, but on my computer — so, electronic versions of papers in electronic folders — didn’t work, I think because I couldn’t see what the papers actually were.

And so, absurdly, it became easier to re-research a subject each time I wanted to think about it, and to download the papers again. My hard drive has filled up with duplicates; my office, with stalagmites of paper. And it isn’t just that I have the organizational skills of a mosquito. Many of my colleagues have found the same thing. (Yes, we talk about it. Oh, they are lofty, the conversations in university common rooms.) In short, access to information is easier and faster than ever before (for a caveat, see the notes, below, but there’s been no obvious way to manage it once you’ve got it.

Several pieces of software are now being developed to address this problem. I want to look at two of them here. The first is called Zotero; the second, Papers. Both are in version 1 and are still a bit buggy; but each has the potential, I think, to become a valuable tool for research.

Zotero aims to let you build a library of useful books and articles that you encounter while surfing online. It’s an extension of the Web browser Firefox, and as you’d expect, it’s free to download and easy to install.

Once you’ve installed it, each time you visit a Web page that contains items — books, newspaper articles, soundtracks, films, etc. — with bibliographic information, it extracts that information and allows you to save it to your Zotero library if you want to.

So, suppose you’re interested in books about the psychology of war, and you go to Amazon and type “On Killing” into the search box. A list of books appears; Zotero collects the information for all of them and allows you to select the ones you want to keep. These are then put into your Zotero library. Once they’re there, you can make notes on them, put them into folders with other items that are related, and so on. If you ask it to, Zotero will see if it can find a given book in a local lending library. And, supposedly, you can also pull bibliographic information from Zotero into documents you’re writing, but I haven’t tried that part yet.

It’s a powerful piece of software with a lot of capabilities, though not all of them work as well as they could. For instance, it’s hit-or-miss with newspaper articles — sometimes it recognizes them, sometimes it doesn’t — and it can’t interpret information from, alas, my local lending library. It does, however, allow you to screen grab, so you can still collect such information if you want it. The screen grab also allows you to add interesting Web pages to your Zotero library. (This is different from storing the link to a Web site. The screen grab gives you the page as it was when you looked at it; clicking a link gives you a site as it is today.)

A minor quibble: if you use a small laptop, as I do, you may find the Zotero window occupies too much of the screen. But I shall certainly keep using it, though not, perhaps as its conceivers intended. For me, it’ll be a scrapbook of interesting stuff — books to buy later, press releases on subjects I think I might write about one day, magazine pieces about cities I’m thinking of visiting.

For the bulk of my researches, however, I shall use Papers. This software has been designed for the Macintosh by two avid fans who call themselves Mekentosj; it only works on the Macintosh platform. It’s not free, but it is quite cheap (20 pounds sterling; 40 U.S. dollars) and, for me, it’s been worth the money. For it solves the problem I started out describing — how to keep on top of scientific articles. How to know which ones you have, where they are, and what else you’ve got on the same subject.

The makers describe it as iTunes for .pdf files, and that’s broadly right. (For anyone who’s never encountered these things, a .pdf file is a type of document file that any computer can open using a free downloadable piece of software. This is the form electronic journal articles come in, and it means they look just as they would have done if you were reading the journal the old fashioned way. iTunes is a piece of music management software.) The Week in Review is edited and published by Jack Spratts. The idea is that, when you download an article, it goes into your Papers library. The bibliographic information immediately appears; so does, if you’re lucky, the “metadata” — like the abstract and the list of subjects that the authors thought their article touches on. (I say “if you’re lucky” because this doesn’t always happen automatically.) The document itself gets neatly filed in a folder on your hard drive, and renamed by authors and year. Gone are the days of 456330a.pdf and sd-article121.pdf. Hallelujah.

And that’s just the beginning. Not only can you read the papers, annotate them, find them and create folders of papers on related subjects, you can also use the software to search the big scientific databases like PubMed and the Web of Science. (Such databases are where you go to find out what’s already been published on the subject you’re interested in; it’s where most scientists find out about the papers they want to collect.) It doesn’t (yet) replace bibliographic software such as Endnote; but it can be used with it quite neatly.

Papers does have some teething problems. As I said, it’s still buggy, so not everything functions as it should. Moreover, the way it works is not always intuitive, and there’s no formal “help.” Instead, if you have a question, you have to wade through user forums to try to see if anyone else has had the same question before — and, more to the point, whether anyone has answered it. But after a couple of days of experimenting, I got it doing exactly what I need.

Organizing materials is always idiosyncratic. I have one friend who organizes the novels he owns by the year in which the books were published; another goes by the color of the spine. (The first accused the second of having the soul of an interior decorator.) But the important thing is not how you do it, but whether it works — whether you can find what you’re looking for. These bits of software open up possibilities; for some people they will be useful, for others they won’t. Some will use both, others neither. For me, well, a few days after discovering Papers, I put 20 sacks of real paper into the recycling bin. At last, I’m back to knowing what I have and where it is.

Bedlam has been defeated.

Carol Chomsky, 78, Linguist and Educator
Margalit Fox

Carol Chomsky, a linguist and education specialist whose work helped illuminate the ways in which language comes to children, died on Friday at her home in Lexington, Mass. She was 78.

The cause was cancer, her sister-in-law Judith Brown Chomsky said.

A nationally recognized authority on the acquisition of spoken and written language, Professor Chomsky was on the faculty of the Harvard Graduate School of Education from 1972 until her retirement in 1997. In retirement, she was a frequent traveling companion of her husband, the linguist and political activist Noam Chomsky, as he delivered his public lectures.

Carol Chomsky was perhaps best known for her book, “The Acquisition of Syntax in Children From 5 to 10” (M.I.T. Press), which was considered a landmark study in the field when it appeared in 1969. In it, she investigated children’s tacit, developing awareness of the grammatical structure of their native language, and their ability to use that awareness to extract meaning from increasingly complex sentences over time.

Young children, Professor Chomsky found, could distinguish no difference in meaning between superficially similar sentences like “John promised Bill to shovel the driveway” and “John told Bill to shovel the driveway” — they could not discern who did the shoveling in each case. Older children, she found, could do so automatically, without having been formally taught.

Where earlier investigators had concluded that the acquisition of syntax — the grammatical structure of sentences — is complete by the time a child is 5, Professor Chomsky demonstrated that when it came to syntactically complex constructions, at least, acquisition is far from finished at that age.

Professor Chomsky’s later research focused on children’s acquisition of the written word. In the late 1970s, she developed a technique for helping struggling readers attain greater fluency. She had the students silently read a passage while a tape recording of the passage played along. The process was repeated until the student could read the text fluently, without the tape. The technique, known as repeated reading, has been widely used in classrooms ever since.

Still later, Professor Chomsky turned her attention to educational technology, creating software that develops reading-comprehension skills.

Carol Doris Schatz was born in Philadelphia on July 1, 1930. She married Noam Chomsky, whom she had known since childhood, in 1949. In 1951, she earned a bachelor’s degree in French from the University of Pennsylvania.

In the 1960s, faced with the possibility that her husband would be jailed for his highly public opposition to the Vietnam War, Carol Chomsky resumed her education: a doctorate would be useful should she need to become the sole family breadwinner. Though that prospect did not materialize, she earned a Ph.D. in linguistics from Harvard in 1968.

Besides her husband, the Institute Professor and emeritus professor of linguistics at the Massachusetts Institute of Technology, Professor Chomsky is survived by their three children, Aviva Chomsky, a professor of Latin American history at Salem State College in Salem, Mass.; Diane Chomsky of Mexico City; and Harry Chomsky, of Albany, Calif.; a brother, J. Leonard Schatz of Burlington, Mass.; and five grandchildren.

In a 2001 interview with The Pennsylvania Gazette, the alumni magazine of the University of Pennsylvania, Carol Chomsky contrasted her brand of linguistics — practical, experimental, hands-on — with her husband’s abstract, quasi-mathematical approach:

“It’s a very different sort of ‘linguistics’ from Noam’s pursuits,” she said. “I always have to laugh when people talk about how interesting our dinner-table conversation must be since we’re in the same field.”

RIAA Claim of Stopping Suits "Months" Ago Is False

According to a report on Wired.com, the RIAA spokesman claimed that the RIAA has not filed any new lawsuits "for months," and according to the Wall Street Journal report discussed here yesterday, the RIAA stopped filing mass lawsuits "early this fall." Knowing that the RIAA has a problem with telling the truth, I did a little investigating, and found out that the RIAA had, in fact, commenced a wave of lawsuits just last week. Why would anyone believe anything their spokesperson says? This is an organization that has a tendency to misspeak a lot, if you know what I mean, even when under oath.

Copy of RIAA's New Enforcement Notice to ISPs
Greg Sandoval

The recording industry dropped some big news Friday, announcing that it will no longer take a broad approach to litigating against alleged filed sharers. The Recording Industry Association of America has enlisted the help of internet service providers to act as a sentry and help discourage customers from pirating music.

Below is a copy of the form letter the RIAA will send to ISPs to inform them one of their customers is accused of file sharing. The notification is similar to those the group has sent to college campuses for years and shows very clearly that the group retains the right to sue people for copyright violations.


Sir or Madam:

I am contacting you on behalf of the Recording Industry Association of America, Inc. (RIAA) and its member music companies. The RIAA is a trade association whose member companies create, manufacture, and distribute approximately ninety (90) percent of all legitimate music sold in the United States.

We believe a user on your network is offering an infringing sound recording for download through a peer to peer application. We have attached below the details of the infringing activity.

We have a good faith belief that this activity is not authorized by the copyright owner, its agent, or the law. We are asking for your immediate assistance in stopping this illegal activity. Specifically, we respectfully request that you remove or disable access to the unauthorized music.

We believe it is in everyone's interest for music consumers to be better educated about the copyright law and ways to legally enjoy music online. The major record companies have actively licensed their music to dozens of innovative services where fans can go to listen to and/or purchase their favorite songs. A list of many of these services is available at www.musicunited.org.

It should be made clear by this letter that downloading and distributing copyrighted songs via peer to peer networks is not an anonymous activity. Not only is distributing copyrighted works on a peer to peer network a public activity visible by other users on that network, an historic 2005 U.S. Supreme Court decision affirmed the unmistakable unlawfulness of uploading and downloading copyrighted works. The website www.musicunited.org contains valuable information about what is legal and what is not when it comes to copying music. In addition to taking steps to notify the network user at issue about the illegal nature of his/her activity, we strongly encourage you to refer him/her to this helpful site.

Please bear in mind that this letter serves as an official notice to you that this network user may be liable for the illegal activity occurring on your network. This letter does not constitute a waiver of our members' rights to recover or claim relief for damages incurred by this illegal activity, nor does it waive the right to bring legal action against the user at issue for engaging in music theft. We assert that the information in this notice is accurate, based upon the data available to us. Under penalty of perjury, we submit that the RIAA is authorized to act on behalf of its member companies in matters involving the infringement of their sound recordings, including enforcing their copyrights and common law rights on the Internet.

Thank you in advance for your prompt assistance in this matter. If you have any questions, please feel free to contact me via e-mail at antipiracy2@riaa.com, via telephone at *Phone Number*, or via mail at RIAA, 1025 F Street, NW, 10th Floor, Washington, D.C., 20004. Please reference *Case ID* in any response or communication regarding this matter.



List of infringing content
*Infringing Content*
Infringing Work : XXXXXX
Filename : XXXXXX
First found (UTC): XXXXXX
Last found (UTC): XXXXXX
Filesize : XXXXXX
Network: XXXXXX
Protocol: XXXXXX


Until next week,

- js.

Current Week In Review

Recent WiRs -

December 13th, December 6th, November 29th, November 22nd

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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