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Old 17-02-10, 09:07 AM   #1
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Default Peer-To-Peer News - The Week In Review - February 20th, '10

Since 2002

"[Rupert Murdoch] absolutely has no idea. If people really quite understood how little feeling he has for this business, they would fall down laughing – or crying." – Michael Woff

"Copyright staff get more than they give to authors and artists." – Luke Slattery

February 20th, 2010

Telstra Loses as Copyright Blowback Continues
Noric Dilanchian

Yet another Australian copyright decision, this one handed down on 10 February, has gone against the pro-copyright owner trend of recent decades.

Telstra and Sensis have lost in the Federal Court of Australia before Justice Michelle Gordon in seeking to protect claimed copyright in White Pages and Yellow Pages.

The defendants were Phone Directories Company Pty Ltd, its directors and others. The company has been competing against Telstra/Sensis since the mid-1990s. Cleverly, at least initially the business of Phone Directories Company Pty Ltd produced directories for regional areas, places where Telstra was not active or not greatly active.

I gave that phone directory company (based in Queensland) serious written legal advice in the mid-1990s. Today it won its defence against Telstra's case, both represented by their current large law firms.

The decision is a surprise because it went the other way to what is known as the Desktop Marketing case. That case began in 1999 and finally reached a conclusion in 2002. There too Telstra and its allies were the plaintiffs, ie those who started the fight. In that case Desktop Marketing Systems was a CD-ROM phone directory company based in Melbourne. It lost and subsequently went into liquidation.

My personal interest is that I spoke in the late 1990s a few times with the CEO of Desktop Marketing when he was hunting for legal advisers as Telstra was mounting its attack. I was not hopeful about his prospects.

The telephone directory case today is reported here: Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44.
Why did Telstra lose this case?
In my first scan reading three paragraphs of the 347 paragraph decision stood out. I've reproduced those paragraphs 44, 45 and 340 below, followed by brief observations.

44. Whether the Applicants [ie Telstra Corporation Ltd and Sensis Pty Ltd] could claim ownership in the intellectual property of the Works was an issue that arose throughout the course of the hearing. Copyright in a literary work made by an employee is ordinarily owned by the employer: s 35(6) of the Copyright Act. The Applicants had three responses. First, they submitted that any question of ownership was not relevant to the question of subsistence. Secondly, the Applicants submitted the question itself was “at the margins” as the evidence established that where there was any “gap” in ownership (such as where contractors who were not employees of Sensis were engaged to work on the production of the Works), that “gap” was of a relatively minor consequence. Finally, the Applicants submitted that if a person or entity other than one of the Applicants had contributed to one or more of the Works, then that person was simply a co-owner (regardless of whether that person or entity was capable of being identified) and, as a co-owner, the Applicants were entitled to move to protect the copyright without the consent of the other co-owner.

45. These submissions should be rejected. It would be absurd to assume that I am bound only to determine whether copyright subsists in the Works whilst ignoring any question of ownership. Copyright is a form of property created by statute for the benefit of the author or authors who, in the absence of some other arrangement, is the owner or are the owners of the work. Whether or not the Applicants are owners of the copyright (if any) in the Works is a matter to be determined by the evidence. The Applicants’ evidence on this issue comprised in excess of 91 affidavits. Simply accepting the Applicants’ assertion that their evidence demonstrates ownership of intellectual property and that the issue is “at the margins” is unhelpful. As I have said earlier, I am bound to determine the matter in accordance with the evidence presented. It is not a matter that can be ignored or be the subject of presumptions."

executive_fight_iStock[LIGHTBULB TAKE - It seems Justice Gordon is making what we might term a "classical" reading of copyright, ie before digital media was put under the legal umbrella of copyright law where it has since fit, sometimes uncomfortably, hence leading to a run towards patent coverage by those who can afford it. Justice Gordon is looking for the classical dots to be joined. She sees directory data compiled by by armies of Telstra/Sensis employees and contractors and she wants their names in evidence, she wants to see such creators assigning their copyright to Telstra, she wants more in those 91 affidavits than she finds. It seems Telstra did not have or did not include such a granular level of evidence.

Elsewhere in his judgement Justice Gordon drills down into the area which has indeed troubled copyright lawyers for more than two decades, the question of copyright in databases. Very broadly and simply stated, not every lawyer can see an easy or convincing analogy between traditional works of copyright versus WHAT forms a database and WHO forms it. Putting that another way, what forms a phone directory database and who writes it is not necessarily what the copyright law created for authors of recorded music was designed to protect. Moreover, Justice Gordon is recognising the change in law signalled by the High Court in IceTV Pty Limited v Nine Network Australia Pty Limited [2009] HCA 14; (2009) 254 ALR 386.

More broadly, Justice Gordon's decision puts Australian copyright law for telepone directories (and maybe other similar databases) in line with the U.S. position reached in the 1990s in the Feist decision made by none other than the US Supreme Court. Justice Gordon made no reference to that case. She does, however, quote in paragraph 29 the eminent UK copyright academic, Professor Cornish, on the reason for being of the Database Directive in the EU. In short, EU lawyers/parliaments thought they needed it as relational databases in their view did not neatly fit into classical notions about copyright subjectmatter and authorship. The Directive supports what lawyers call a "Sui generis right", in effect a right given for a specific species of property, here being relational databases.]


340. None of the Works were original. None of the people said to be authors of the Works exercised “independent intellectual effort” or “sufficient effort of a literary nature” in creating the Works. Further, if necessary, the creation of the Works did not involve some “creative spark” or the exercise of the requisite “skill and judgment”. I accept that production of the directories is a large enterprise populated by many contributors (ignoring for the moment the determinative difficulties with authorship outlined above). Many of the witnesses gave evidence that was direct and appropriate, and I accept that they work hard in their respective capacities."

[LIGHTBULB TAKE - Justice Gordon again taking a classical approach, and that is not a criticism.]

Finally, like all major court decision many more readings are necessarily to test the above and draw further from the decision, which on our bet is likely to be appealed.

Expert Warnings Over Super-Fast Broadband 'Game'
Richard Wray

BT's decision to throw allow its rivals to install their own broadband lines in its infrastructure was not the political victory being claimed by the Conservatives, according to experts - nor will it necessarily lead to any increased competition.

Earlier this week, BT chief executive Ian Livingston described himself
as "relaxed" about providing access to the company's millions of miles
of underground tubes that house its phone lines and called on rival
firms to open up their infrastructure.

The move was warmly welcomed by the Tories who had been pushing for the move and believe that promoting infrastructure competition will bring the next generation of super-fast broadband within the reach of more of the nation's homes.

"We welcome BT's announcement that they are preparing to open their underground ducts to other broadband providers," the party said
earlier this week. "This is something the Conservative Party has been
calling for for over a year and is a central part of our plans to roll out super fast broadband across the country."

Super-fast broadband services - offering speeds of up to 100Mb per
second - require the installation of fibre optic cabling.

Virgin Media has already upgraded its existing fibre network, which actually uses copper lines for the final connection to homes, so that it can offer 50Mbps now and speeds of over 100Mbps in future.

BT, on the other hand, is rolling out its own fibre network at the rate of 80,000 new premises per week. It is pushing fibre to roadside cabinets, using copper for the final connection and its BT Infinity service offers speeds of 40Mbps.

Meanwhile, BT's Openreach business is offering its fibre network to rival ISPs such as Zen Internet. Openreach was set up under a deal with regulator Ofcom in 2005, and controls BT's local network to ensure that any company can use it to offer services at regulated prices.

Prohibitive costs

Despite this investment, however, neither BT nor Virgin Media reckon that fibre will get beyond about 60% of the country because the costs are prohibitively high. The government has proposed levying a 50p a phone line tax to raise funds to extend coverage to 90% of households by 2017 but the Conservatives would rather use part of the BBC licence fee to pay for the extension of broadband into more rural areas.

The government has already earmarked that cash to ensure that everyone can get a basic broadband service by 2012.

Analysts are unconvinced that opening up ducts will make any great
difference to coverage, while some in the telecoms industry believe
BT's fiercest critics - TalkTalk and BSkyB - are actually dragging their feet in order to protect the hundreds of millions they have spent on existing infrastructure by putting their own equipment into BT's local telephone exchanges.

Duct sharing is already available in other countries, such as France,
where the incumbent has an even fiercer grip on the market than BT,
but there has not been significant take-up. Livingston himself said
duct sharing is "unlikely to be the silver bullet to get fibre to every home" but it might "help BT and others extend coverage".

In a note on the move, Cazenove's well-respected head of European telecoms and media research Paul Howard described BT's move as
"sensible and well thought through".

"It feels premature to be worried about competing fibre investment and (I) would highlight some 'game-theory' at play here," he added.

The European Commission, for example, is already on track to mandate access to ducts.

"The bigger question is whether the likes of Carphone and Sky really
want access to BT's ducts in order to invest in their own fibre and
what the practicalities of such access would be. It is hard to envisage duct access providing both Carphone and Sky with even half of their long-term provisioning requirements. In addition, we suspect investors in both TalkTalk and Sky would be very nervous regarding any planned fibre investments," he said.

Earlier this week Jeremy Hunt, shadow culture minister, told the Financial Times that he had talked to some of BT's rivals and "there is a willingness to invest substantial sums of money" in fibre.

No equivalents

Industry insiders, however, are unconvinced. Both companies have spent large sums putting their own equipment into about 1,000 of BT's 5,500 local telephone exchanges - essentially those exchanges in large metropolitan areas.

Taking part in the process of local loop unbundling has allowed them to stop buying BT's wholesale broadband service and instead merely 'rent' BT's local copper lines. It is a switch that has helped turn TalkTalk's broadband business into a major money-spinner that Carphone Warehouse is now looking to demerge from its retail operation.

But there is no equivalent 'local loop unbundling' process for BT's
fibre network and both firms risk seeing their investment superseded
by BT and Virgin's cable networks. TalkTalk was involved in BT's trial
of fibre technology in North London but has yet to sign up to Openreach's wholesale fibre product. Sky, meanwhile, has been very
quiet on its fibre plans.

Both companies have complained, however, that Openreach's wholesale fibre - or Generic Ethernet Access - offering is inadequate. They want more 'flexibility' so they can use BT's fibre to create their own products.

Cazenove's Howard reckons neither company is keen to put its own cash into building a brand new network and anyway, "having multiple fibre investments would represent a negative for the whole industry and (I) suggest the local loop should be considered a natural monopoly or at least a duopoly in urban areas given the cable industry."

"We believe regulation should focus more on achieving adequate
wholesale access to an incumbent's fibre network."

"The difficultly is that regulators across Europe have provided incumbents with certain regulatory freedom (for example no formal
price controls over BT's fibre network) in order to promote investment
in high speed networks," Howard added.

"Sky and Carphone are therefore forced to focus on the threat of alternative investments in order to persuade BT to tailor a more suitable wholesale product. We suspect Ofcom's current vision, which we suggest is one where BT Openreach deploys fibre on behalf of everyone and provides access at reasonable wholesale prices is still the most appropriate.

"However, we should expect a lot of noise and politics to cloudy the issue in the short to medium-term."

'Very odd'

Any regulation is only likely to fall on BT. Ofcom has not found that
Virgin Media has significant market power, which would bring it within
the regulatory framework. Any publicly-funded fibre roll-out
programme, meanwhile, would almost certainly come with 'open access' conditions attached and so BT is likely to be the only builder.

Over at Morgan Stanley, Nick Delfas has looked at the Conservative
Party's plans to ensure that speeds of up to 100Mbps are available to
half the population by 2017 and branded them "very odd".

"Virgin alone will shortly provide this much; Virgin is already at 50 Mbps but getting to 100 Mbps... is in the works. So this is a policy commitment to let what will naturally happen take its course."

"It is already EU policy to unbundle ducts," he added. "The French
have already concluded a huge project to map and price all the ducts
in the country. Even so, competitors say operationally it is difficult
to get access. In the UK we doubt there is a comprehensive map of the ducts; BT may even not know itself where they are or what exactly
there is in them. And then there is the issue of capital availability
for an operator to take advantage of them."

Livingston himself suggested as much when earlier this week he
stressed "duct access has been adopted in other countries but normally as the only way for companies to access an incumbent's network.

There are plenty of existing ways in which companies can access BT's network and so its impact may be less dramatic in the UK. We will only know for sure once they are opened. BT is taking a considerable degree of commercial risk by rolling out fibre and it will be interesting to see if others are willing to join us."

Mobile Data, the Next Generation: High Speeds But at What Cost?
Kevin J. O'Brien

The next great leap forward in wireless broadband networks, a superfast technology called Long Term Evolution, is being hailed as a breakthrough that will transform the world’s mobile operators into the lucrative gatekeepers of the on-the-go Internet.

But despite its theoretical potential to redefine the online experience — with download speeds many times faster than currently available — many of the world’s major carriers are holding back. They are wary of repeating the mistakes of a decade ago, when billions were spent on equipment and licenses for third-generation networks, the current standard, only to see consumers largely ignore the technology until Apple introduced the iPhone in 2007.

“Despite the benefits of the technology, many are wondering whether L.T.E. will be a sustainable business,” said Paul Gainham, director of service provider marketing at Juniper Networks, a maker of network routers and switches.

The problems start with the cost of new networks, which range from the hundreds of millions to the billions. Aircom International, a London research firm, estimated a U.S. operator would pay up to $1.8 billion for L.T.E. — in the first year alone. A European operator faces $880 million in costs.

There are also concerns over whether the network would deliver service that is that much better than that available, despite the potential speed. Some of the latest 3G networks, using a technology called HSPA+, can already deliver download speeds of up to 21 megabits a second, a vast improvement over the 2 to 3 megabits a second available in most home Internet connections, although not the 250 to 500 times L.T.E. promises.

Jean-Pierre Bienaimé, chairman of the UMTS Forum, a group of 3G operators, equipment makers and regulators, said the changeover to L.T.E. will be “more of an evolution, than a revolution.” L.T.E. will be successful, Mr. Bienaimé predicted, because it will attract many of the 500 million people now using 3G networks.

But that may not be enough help operators quickly recoup their investments, unless they can develop services that exploit L.T.E.’s potential. Because those have not yet materialized, L.T.E. is unlikely to significantly increase the number of people using mobile Internet or even help operators retain customers, according to Rewheel, an industry researcher in Espoo, Finland.

“It is unlikely that L.T.E. could fundamentally expand the addressable market of mobile broadband or justify substantially higher subscription fees,” Rewheel reported in January.

So far, 51 of the world’s largest operators have made nonbinding public “commitments” to L.T.E., according to the Global Suppliers Association, an industry group based in Sawbridgeworth, England, and 19 are expected to begin operating this year. At the Mobile World Congress, the industry’s largest convention, which is taking place here this week, network equipment makers said they sensed growing support for L.T.E.

Ericsson, the global market leader in networking equipment, plans to demonstrate an L.T.E. test with download speeds of one gigabit a second, 250 to 500 times faster than most home broadband connections. At a news conference Monday at the opening of the industry convention, which is expected to draw 47,000 visitors through Thursday, Johan Wibergh, a vice president in charge of Ericsson’s networks business, said he expected the number of computers, phones and other digital devices connected wirelessly to the Internet to reach 50 billion by 2020.

“The use of mobile broadband is growing quickly, driven by consumers powered with smartphones and connected laptops,” Mr. Wibergh said. “L.T.E. enables the fast transfer of huge amounts of data in an efficient and cost-effective way.”

TeliaSonera, the Swedish-Finnish operator, became the first carrier last December to sell L.T.E. service in Oslo and Stockholm. AT&T and Verizon Wireless in the United States, Telstra in Australia and NTT Docomo in Japan say they may introduce L.T.E. service this year or next.

To prepare for L.T.E.’s quantum leap in data transmission speed, operators are having to modernize the rest of their grids to eliminate bottlenecks in their so-called back-haul systems, the links that transmit data from cell base stations to an operator’s core network.

“All of the operators we are working with are upgrading their back-haul networks to get them L.T.E.-ready,” said Volker Bendzuweit, general manager of RAD Data Communications in Munich, a unit of an Israeli maker of back haul equipment for TeliaSonera, T-Mobile and SFR, a French operator. “That is the big move afoot in the industry.”

Beyond equipment costs, many operators are also grappling with purchasing new frequency spectrum for L.T.E., which initially will run in parallel to many existing 3G networks. The most desirable, lowest-cost frequencies are being used by TV broadcasters or, as in Russia, the military.

Technical glitches will also need to be ironed out. Testing TeliaSonera’s new L.T.E. service in January, a Stockholm research consultancy, Northstream, reported that download speeds varied greatly by location, ranging from 12 megabits a second indoors to 45 megabits outdoors.

But given the explosion of data traffic over wireless networks caused by streaming video, social networking and smartphones, mobile operators may have little choice but to invest in L.T.E., which, besides its faster speeds, will give operators vastly greater capacity to handle the traffic.

Data volumes on the world’s mobile networks will double this year from 2009 and continue to double each year through 2013, reaching over two exabytes, or two billion gigabytes, a month, according to a forecast by Cisco, the U.S. network equipment operator.

J.K. Shin, the head of the mobile business at Samsung, said consumers will eventually be won over to L.T.E. Samsung, he said, is planning to sell L.T.E. data cards, modems, phones and radio equipment within 18 months.

Comcast Offers Data Sharing, Backups
Hiawatha Bray

Even as it rebrands and upgrades its broadband products, Comcast Corp. is rolling out a new product that will allow subscribers to back up and share all of their data - pictures, files, video - on the Internet.

Comcast Secure Backup & Share will be powered by Mozy, a subsidiary of EMC Corp., the giant data storage company headquartered in Hopkinton. It will allow Comcast’s 16 million broadband customers to store their most precious data automatically on remote servers, as a defense against computer breakdowns or theft.

Mozy already sells a popular consumer service that backs up unlimited amounts of data from home computers for $4.95 a month per machine. The Comcast service won’t offer unlimited storage. Customers will get 50 gigabytes of storage for $4.99 a month, or 200 gigs for $9.99 a month.

But Comcast will provide something extra by letting users share some files with friends, business colleagues, or family members over the Internet. A subscriber will be able to create personalized Web addresses, where he or she can post links to photos, videos, and documents.

“You can have personalized, invitation-only sharing sites for each of those different audiences,’’ said Vance Checketts, Mozy’s vice president of operations.

Checketts said the service could become an alternative to popular photo-sharing sites like Flickr, used by millions to show photos to friends and relatives. But he added that Mozy hopes to cooperate with social-media sites like Flickr and Facebook. For instance, someone might use the Comcast-Mozy service to store photos, but run a piece of software to display the stored photos on Flickr. This would attract more data storage revenue for Mozy, while slashing Flickr’s data storage bill.

“We would take out a huge portion of their costs,’’ Checketts said.

“It’s an interesting concept,’’ said Lauren Whitehouse, senior analyst at Enterprise Strategy Group in Milford. “You do start to lose track of what you put out there. Knowing that it all exists in one place and you can share it with those other sites makes it easier to manage.’’

David Friend, chief executive of Carbonite Inc., of Boston - it’s Mozy’s leading rival in the online data backup business - said his company has a similar deal to resell its backup service to customers of Cablevision Systems Corp. But Friend said he has soured on making any more deals for Carbonite to resell its services under another company’s brand. “It’s slow, and it’s a big distraction,’’ Friend said. “More importantly, it doesn’t build our brand.’’

Friend said he’d only be interested in working with companies that would co-market data backup under the Carbonite label. He added that Carbonite plans to offer a file-sharing capability to match Mozy’s, but that the company is in no hurry. “It’s hard enough to get people to understand online backup right now,’’ he said.

The new Comcast-Mozy service is available immediately. It comes as Comcast is in the midst of a campaign to rebrand the company’s Internet, cable TV, and telephone services under the name Xfinity. Comcast is also upgrading its high-speed Internet service to offer residential customers speeds as high as 100 megabits per second.

Net Neutrality: A Simple Guide
Matt Hamblen

Google's recently announced plan to set up trial fiber optic networks in the US with ultra-high speed Internet connections puts the long running national debate over Net Neutrality back into high gear.

A hot topic of discussion and debate in government and telecom circles since at least 2003, Net Neutrality, actually involves a broad array of topics, technologies and players. Here's a primer for those looking to get up to speed fast:

What is Net Neutrality?

At its core, the Net Neutrality movement in the US refers to efforts to keep the Internet open, accessible and "neutral" to all users, application providers and network carriers. In theory, this means, for example, that one carrier would not be allowed to discriminate against an application written by a third party (such as Google Voice) by requiring its users to rely on the carrier's own proprietary voice applications. A carrier's walled-garden browser, which allows access to only certain websites, is also not seen as neutral by many neutrality proponents.

The term Net neutrality is clearly politically laden. It isn't used that much by the U.S. Federal Communications Commission (FCC) in its deliberations on the matter. (The FCC is weighing a national broadband policy it hopes to present to Congress next month.) Traditional carriers don't use the term that much either, since they often argue there is nothing wrong with the openness of the Internet, something Google and a variety of public interest groups dispute.

What is the FCC doing with Net Neutrality?

The FCC wears many hats, from auctioning off wireless spectrum to administering long distance telephone service to helping set long-term Internet policy. The Net neutrality issue is encapsulated by the FCC in a document issued last Oct. 22: the open Internet "Notice of Proposed Rulemaking".

That document has generated comments from many interested parties in the industry. The FCC said in its executive summary (Section 16) that it wanted comments on the "best means of preserving a free and open Internet, however it is accessed." The agency also lists six principles it hopes to codify in law, including four taken from an Internet Policy Statement first issued by the FCC in 2005. Those four principles are to allow users to: access lawful Internet content; run applications and use services of their choice; run devices of their choice that don't harm the network; and benefit from competition among carriers, content providers and application providers.

Two newer principles include one that would require service providers to treat all lawful Internet content applications and services in a non-discriminatory manner and another requiring them to disclose information about network management to users as well as content, application and other service providers.

Significantly, FCC Chairman Julius Genachjowski said in a video presentation in October that the proposed rules were "not about regulating the Internet," a comment that has led to continued debate about what he means.

In fact, the October written notice, in section 14, specifically said: "The rules we propose today address users' ability to ACCESS the Internet and are not intended to regulate the Internet itself...."

On March 17, the FCC is expected to deliver a formal report to Congress on its National Broadband Plan, which was required in the American Recovery and Reinvestment Act of 2009. Progress on the plan is outlined by the FCC at a separate website.

Who are the biggest players in the Net Neutrality debate?

One group of traditional cable, wireless and telecommunications providers has taken an active role in the debate: Netcompetition.org, which has posted a list of its members on its e-forum site. The site, which includes short papers on its positions, has one standing headline over a counting clock that reads, "What's the problem?" The clock notes that more than seven years has gone by "with no need for any Net neutrality mandate!"

The other big block of players is an array of citizen actions groups loosely aligned with Google and other companies that want to offer new and different uses for the web but don't generally run networks carrying Internet data. Google communicates mainly on its official blog, where it announced on February 10 its experimental fibre network. That blog entry includes links to Google's comments to the FCC from July 2009 where it promoted "open, ubiquitous broadband connectivity" as a means of improving American competitiveness.

Among various public interest groups active in Net neutrality issues is Free Press, a nonprofit group that praised Google's high-speed broadband experiment. It also said Google's announcement "follows a trail already blazed by Verizon's FiOS network, which has fiber optic cables capable of speeds comparable to what Google proposes."

What's next?

Congress will be the major battleground for Net Neutrality, even though it has already taken up bills in recent years that included the Internet Freedom Preservation Act of 2007 and measures to protect how various service providers work together in sharing applications and services.

The Internet Freedom Preservation Act of 2009, H.R. 3458, may be the broadest, and is now before the House Committee on Energy and Commerce. Sponsored by Rep. Edward Markey (D-Mass.), Anna Eshoo (D-Calif.) and 21 co-sponsors, it would amend the Communications Act of 1934, establish a national broadband policy, and safeguard consumer rights. Markey has called the FCC's non-discrimination principles a complement to the House bill.

FCC to Propose Faster Broadband Speeds
John Poirier

The U.S. Federal Communications Commission unveiled a plan on Tuesday that would require Internet providers to offer minimum home connection speeds by 2020, a proposal that some telecommunications companies panned as unrealistic.

The FCC wants service providers to offer home Internet data transmission speeds of 100 megabits per second (Mbps) to 100 million homes by a decade from now, Commission Chairman Julius Genachowski said.

Industry estimates generally put average U.S. Internet speeds at below 4 Mbps.

The proposal is part of the FCC's National Broadband Plan, due next month. It comes a week after Google Inc rattled Internet service providers with its plan to build a super-fast Internet network.

Some providers derided the FCC's plan.

"A 100 meg is just a dream," Qwest Communications International Inc Chief Executive Edward Mueller told Reuters. "We couldn't afford it."

"First, we don't think the customer wants that. Secondly, if (Google has) invented some technology, we'd love to partner with them," Mueller added.

AT&T, the top broadband provider among U.S. telecommunications carriers, said the FCC should resist calls for "extreme forms of regulation that would cripple, if not destroy, the very investments needed to realize its goal."

Verizon, the third-largest provider, and one that has a more advanced network than many competitors, said it has completed successful trials of 100 Mbps and higher through its fiber-optic FiOS network.

"(One gigabit per second) as discussed in current news reports is a lot of signal; typically enough for many massive business operations," Verizon said in a statement that referred to Google's plan to test a network with those speeds. "But we could make it happen over the FiOS network without much trouble, should a market for it develop."

Verizon said it offers speeds of up to 50 Mbps.

One analyst questioned whether the FCC's proposal could lead to a sustainable business model.

"In order to earn a return for investors, you have to be conscious of what consumers will pay. I don't know this is something consumers will pay for," Piper Jaffray analyst Christopher Larsen said. "It's a nice goal, but it's a little on the over ambitious side."

Genachowski said the FCC plan would set "ambitious but achievable goals" in remarks to the National Association of Regulatory Utility Commissioners conference.

He offered few details on the plan and how the FCC would get providers to reach the minimum speeds. He said the goal is to transform the United States into the world's largest market of very high-speed Internet users.

Need For Speed

Genachowski said speedier Internet service would help create jobs and economic growth.

"Despite significant private investment and some strong strides over the last decade, America's broadband ecosystem is not nearly as robust as it needs to be," he said.

The United States ranked 19th in broadband speed, trailing Japan, Korea and France, according to a 2008 study by the Organization for Economic Co-operation and Development.

Data shows that about 64 percent of U.S. households used a high-speed Internet service in 2009, the Commerce Department said on Tuesday. That is a 25 percent increase from 51 percent two years earlier.

Companies like network equipment maker Cisco Systems Inc, which makes routers and switches which support Internet traffic, would benefit from greater broadband investment.

"Cisco believes that a next generation Internet will enable economic growth and job creation, as well as improve the delivery of health care, education and energy," Jeff Campbell, Cisco's director of technology and trade policy, said in a statement.

Research in Motion Ltd, which makes the BlackBerry mobile device, said on Tuesday that smartphone manufacturers must start developing fewer bandwidth-guzzling products or risk choking already congested airwaves.

Genachowski lauded Google, the world's top Internet search company, for plans to offer its fast network to up to half a million people, and called on other companies to step up their broadband plans.

Google wants to demonstrate that a carrier could easily manage complex applications that use a lot of bandwidth without sacrificing performance.

"We should stretch beyond 100 megabits," Genachowski said. "The U.S. should lead the world in ultra high-speed testbeds as fast or faster than anywhere in the world."

The FCC also wants to use the universal service fund, a U.S. subsidy program for low-income families to gain access to phone service, to get more people high-speed Internet access.

(Additional reporting by Ritsuko Ando and Sinead Carew in New York, editing by Dave Zimmerman, Robert MacMillan, Tim Dobbyn)

Survey: 40 Percent in U.S. Have No Broadband
Lance Whitney

Many of us take broadband Internet access for granted. But a new government survey paints a different picture of the nation.

In a survey of more than 100,000 people in more than 50,000 households across the U.S., 40 percent reported no broadband or high-speed access to the Internet, while 30 percent said they have no Internet access at all.

Sponsored by the National Telecommunications and Information Administration (NTIA) and conducted by the Census Bureau, the survey found that most of those interviewed said they either don't need broadband or find it too expensive. Some said they have no computer, but many of those in rural areas reported that broadband is simply not available.

Released Tuesday, the survey report "Digital Nation: 21st Century America's Progress Toward Universal Broadband Internet Access", also revealed that disparities in Internet and broadband access vary by age, income, education, and race.

People with higher rates of broadband access tend to be younger, white or Asian, highly-educated, married, and with higher incomes, while those with no broadband are often seniors or minorities, less educated, and living in non-family households with lower incomes or unemployed.

Substantial differences also exist between urban and rural areas. For example, black and Hispanic individuals in urban locations have access to greater bandwidth than those in rural spots, the report notes. The gap between broadband access in rural and urban areas has lessened over the past few years, but still remains wide.

The report was compiled from data collected in October of last year through a special Internet Use Supplement, part of the Census Bureau's Current Population Survey. This marked the eighth Internet survey sponsored by the NTIA since the early 1990s. Information was collected from about 54,000 households and 129,000 citizens.

The NTIA said the U.S. Department of Commerce will offer a more detailed analysis of U.S. Internet access later this year as more data becomes available.

The Obama administration has been pushing universal broadband for all U.S. citizens as part of its national agenda. The FCC is due to submit a National Broadband Plan to Congress in March, unless another delay pushes that deadline back even further. But the road to national broadband faces several bumps, not the least of which is how to pay for it.

Verizon Wireless to Welcome Rival Skype Onto its Smartphones
Cecilia Kang

Verizon Wireless said Tuesday that it would add Skype's Internet phone application to some of its smartphones, signaling a possible shift in the wireless industry's stance against allowing customers to use competing technologies on its networks.

The companies said in a joint news conference at the Mobile World Congress in Barcelona that starting in late March, Verizon's 90 million customers will be able to download the free voice and videoconferencing software program onto nine smartphones offered by the carrier, including the BlackBerry Curve and Motorola Droid.

With the application, a Verizon cellphone user could call a fellow Skype subscriber for free anywhere in the world. Calls to any non-Skype user would be counted against the user's voice minutes. The application will incorporate instant messaging, social networking tools and eventually videoconferencing, the companies said. To use the software, Verizon customers would need to have a voice and data plan.

Analysts said the move reflects the wireless industry's growing recognition that Internet data plans will provide a significant source of revenue as more consumers buy smartphones, surf the Web and download applications. Wireless companies will increasingly seek to distinguish themselves by offering applications they once feared would erode their main business -- traditional voice services.

"Voice dollars are coming down, and you are seeing more competition from prepaid minutes-use like from Boost," said Tole Hart, an independent wireless analyst. "So companies want to be able to show they have additional applications that are most desirable for people to use."

Skype, which was launched in 2003 and has 500 million subscribers worldwide, aspires to become the dominant communications platform for the Internet, be it over cellphones, television sets or computers. The company has been partnering with television makers -- and now a communications service provider -- to expand its service beyond the PC.

"Customers want a lot more from us. They want Skype everywhere and seamlessly integrated," said Josh Silverman, Skype's chief executive.

The companies said their agreement is exclusive and will extend to other parts of Verizon Communications' business, including its broadband and television service, FiOs. The executives did not discuss financial aspects of the deal, including how revenue would be shared from Skype calls.

The deal marks a sharp contrast to a years-long regulatory battle between the companies over so-called net-neutrality rules that would prevent carriers from blocking certain Internet applications on their networks.

As the Federal Communications Commission attempts to craft those rules, Verizon is fighting against what it describes as over-regulation. Skype continues to be among the most vocal corporate proponents of the rules.

Skype in a Struggle to Be Heard on Mobile Phones
Kevin J. O'Brien

Josh Silverman, the chief executive of Skype, the voice-over-Internet phone service, could tick off the names of mobile phone operators that block his company’s service.

But for Mr. Silverman, a 41-year-old Michigan native, it is quicker to name those that allow it, no strings attached.

“The two operators that have really embraced us are 3 in Europe and Verizon Wireless in the United States,” Mr. Silverman said Wednesday at the Mobile World Congress, the industry’s annual convention, in Barcelona. “But we are making progress, and operators are beginning to change their attitudes.”

In a world where network neutrality has become a rallying cry for advocates of an unfettered Internet, Skype, the pioneer in low-cost and even free online calls, has become a prime example of the limits of wireless freedom.

In the United States, Skype is blocked on mobile networks, and the service is available only on the Apple iPhone over Wi-Fi. AT&T, the exclusive American carrier for the iPhone, has said that it would allow Skype and voice-over-Internet-protocol services to operate on its 3G network, but Skype has not made an application available.

In Europe, Skype is carried by the company 3 in Britain, Ireland, Austria, Denmark, Italy and Sweden. But many other cellular operators still block its calls, prohibit their customers from downloading Skype’s software or outlaw the use of VoIP service in standard sales contracts.

Some carriers are imposing fees to undermine Skype’s attraction. In Germany, customers of T-Mobile can place calls using Skype, but only if they pay an extra 10 euros, or $13.60, a month. German customers of the Vodafone Group can use the service for an extra 5 euros a month.

However, the barriers to Skype and similar Internet calling services, like Google Voice, are coming under increasing scrutiny as the Internet goes mobile. By 2013, the number of Internet-ready mobile phones will surpass the number of computers in the world for the first time, according to Gartner, a research firm.

“Such practices illustrate how operators’ business models based on control and discrimination of data flows really harm competition as well as the fundamental freedom of communication allowed by Internet,” said Jérémie Zimmermann, the director of La Quadrature du Net, a group in Paris that opposes efforts to control public access to the Internet.

Most operators and network equipment makers still perceive Skype and other Internet phone call providers to be potential freeloaders, stealing their customers while they invest billions of dollars to build out and upgrade mobile networks.

“VoIP is a great technology, but it is not a game-changer,” said Ben Verwaayen, chief executive of Alcatel-Lucent, a network equipment maker. “If everything is free, then operators will not be able to survive. The battle is not about technology but the business model.”

In the United States, last July the Federal Communications Commission asked Apple to explain why it had not approved Google Voice, an application that lets callers circumvent mobile network calling charges, for the iPhone. Apple told the F.C.C. that it was studying Google’s application.

Carriers in the United States could have more difficulty blocking VoIP services as they introduce 4G data networks, faster than 3G. The F.C.C. imposed no-discrimination rules on buyers of 700-megahertz spectrum, which is being converted from analog television use to cellular data.

In Europe, the new commissioner for digital issues, Neelie Kroes, has indicated she might put pressure on wireless operators to allow VoIP service on their networks. In a hearing on Jan. 14 before a European Parliament committee, Ms. Kroes said blocking VoIP violated network neutrality.

“It is imperative that VoIP can be done,” Ms. Kroes said before the Industry, Research and Energy panel. “That is another way of using the same infrastructure. We have to act and force those owners. There must be another argument against it other than: ‘It is against the rules.’”

Getting access to mobile networks is critical for Skype. The seven-year-old company, based in Luxembourg, has more than 500 million registered users, and they now generate 12 percent of all international calls, according to the research firm TeleGeography.

Founded in 2003 by Niklas Zennstrom and Janus Friis, Skype initially impressed technophiles but has so far largely failed to live up to its commercial potential. EBay paid $3.1 billion for Skype in 2005 but was unable to fit the service into its online auction business.

Last September, eBay sold control of Skype to a group of investors led by Silver Lake Partners, a Silicon Valley private equity firm, in a deal that valued Skype at $2.75 billion. EBay, which retained a 35 percent stake, said Skype made a $48 million profit in the third quarter of 2009 on $185 million in sales, the last results published before the company was sold.

Mr. Silverman, the former chief executive of Shopping.com, also owned by eBay, foresees regulators in the United States, Europe and elsewhere putting pressure on operators to permit VoIP services.

“Truth and justice are on our side,” Mr. Silverman said. “We think it is a ridiculous argument to say these are ones and zeroes we like and these are ones and zeroes we do not like.”

In some quarters, resistance to Skype is waning. Operators like Belgacom in Belgium experiment with the service without fanfare, to see if it attracts and retains customers.

Skype’s deal with Verizon Wireless, the largest United States carrier, may also make the service more available. In exchange for access to its 3G network, Verizon attached many conditions to its agreement with Skype.

Skype users will have to buy voice and data plans from Verizon Wireless and also one of nine smartphones sold by the operator. Also, any Skype calls placed to United States residents who do not have Skype accounts will be deducted from the caller’s package of Verizon voice minutes.

Calls placed outside the United States and domestic calls to Skype users will be free.

“The Skype-Verizon announcement demonstrates that mobile operators are beginning to change their attitude,” said Dario Talmesio, an analyst at Informa Telecoms and Media, a research concern based in London. “However, the majority of mobile operators have yet to make a firm decision. Blocking VoIP is a short-sighted strategy.”

Mr. Silverman said Skype would never pay to win access to mobile networks. “Being a free service is core to our value proposition,” he said. “We see no plans to change that.”

A Conference Keen on Finding Open Communication
Kevin J. O'Brien

In the world of mobile phone applications, Apple, Google, Nokia and their competitors seem to have only their differences in common.

Most mobile software works on only one type of device or the phones of one carrier. An iPhone application will not work on a Nokia phone, and neither would work on Google’s Android system or Microsoft’s new Windows Phone.

The state of play, experts say, is a cacophony of incompatible software that threatens to slow the growth of the mobile Internet. Companies in this field that are attending the Mobile World Congress here this week are holding sessions to educate software developers on the idiosyncrasies of designing apps for their phones.

“These are all proprietary systems,” said Michael O’Hara, chief marketing officer of the GSM Association, the London organizer of the Barcelona event. “We are creating islands of applications out there that can’t communicate with each other.”

The competition is similar to what happened in the earliest days of the personal computer industry, when a program bought for, say, a Commodore 64 would not work on a Texas Instruments PC.

Microsoft eventually came to dominate the market for PC operating systems, prompting armies of programmers to write software for Windows machines. But on the desktop, operating systems have become less important in recent years as more computing has moved to the Internet, which is built around open standards.

In the mobile world, the operating system market is fractured, and the mobile Web is not yet developed enough to handle many things people want to do on mobile devices. Meanwhile, Apple’s iPhone and its App Store have turned the once-obscure field of mobile applications into a lucrative market, prompting other companies to mimic that model.

Last year, $4.2 billion in mobile applications were sold, almost all of those iPhone applications, according to figures compiled by the research firm Gartner. After splitting the revenue with developers, Apple pocketed an estimated $1 billion in 2009.

With sales of mobile applications expected to rise 62 percent this year, to $6.8 billion, according to Gartner, Apple’s rivals are working to grab a piece of the pie.

Nokia, the leading cellphone maker, said consumers were downloading more than one million applications a day from its Ovi service. Google, Samsung, LG and Research In Motion, maker of the BlackBerry, have all reported strong traffic at their application stores.

Big network operators are also forging alliances to push their own standards for applications. But perhaps the most unlikely entrant in the field is Alcatel-Lucent, the maker of network equipment.

In December, Alcatel-Lucent, based in Paris and New Jersey, began hooking up network operators with software developers and retailers to build mobile applications for multiple networks and operating systems. More than 50 operators have expressed interest in the program, according to the company, and applications are in development.

In Barcelona on Tuesday, Alcatel-Lucent announced that it was expanding its role as an application broker by setting up a development laboratory based on cloud computing that it called a “sandbox in the sky” to speed development of broader applications.

The company also began an exchange to meld existing applications into new ones, drawing in third-party investors to help finance the creative process.

“We’re in this to help everyone in the application ecosystem make money,” said Johnson Agogbua, who is in charge of the application program at Alcatel-Lucent.

Mobile operators are also organizing among themselves, not content to leave the applications game to the phone makers. Last year four operators with a combined one billion customers — China Mobile, Verizon Wireless, Vodafone and SoftBank Mobile of Japan — formed the Joint Innovation Lab, or J.I.L., to develop applications for handsets on their networks. The group has published a specification for a mobile “widget,” a simple type of phone application that displays live updates of limited data, like the current temperature.

LG, Samsung, Research In Motion and Sharp are making phones using the lab’s widget format.

“We believe this will be good ultimately for the consumer because it will give them more choices,” said Peters Suh, the J.I.L. chief executive. “It is also an opportunity for operators to take back the initiative.”

But these alliances, which are proliferating, are also complicating matters.

On Monday, 20 operators, including AT&T, Sprint Nextel, Orange, Deutsche Telekom, América Móvil, NTT Docomo of Japan and Bharti Airtel of India, created the Wholesale Applications Community, another group with the aim of developing common standards. The four operators in J.I.L. also joined, but both efforts will continue to run in parallel, at least for now.

Some question whether close rivals in the United States, like Sprint and AT&T, which pay developers to create applications unique to their networks and phones, will end up using a common standard, which could allow customers to more easily change carriers.

“Most operators are selling the same phones for roughly the same price,” said Thomas Kaehler, the founder of Communology, a mobile application developer in Cologne, Germany. “They seek unique applications for differentiation, but it has fragmented the market.”

Besides joining the new operators’ alliance, Sprint is also participating in Alcatel-Lucent’s cross-platform effort.

Sprint was the first wireless provider in the United States to develop its own set of mobile applications, using a stable of independent software developers. But the demands of sustaining the solo effort became too great.

“We are now no longer a walled garden, but an open marketplace,” said Len Barlik, a Sprint Nextel vice president for product development. “We can’t do it all ourselves.”

DOJ Launches Intellectual-Property-Enforcement Task Force
Grant Gross

The U.S. Department of Justice has launched a new task force on intellectual property in an effort to crack down on a "growing number" of IP crimes in the U.S. and elsewhere, the agency announced.

The task force, announced Friday by U.S. Attorney General Eric Holder, will focus on working with state, local and international law enforcement agencies to "combat intellectual property crimes," the DOJ said in a press release.

The task force will work closely with the recently established White House Office of the Intellectual Property Enforcement Coordinator (IPEC), which has the responsibility of drafting a strategic plan on IP for President Barack Obama's administration. The task force will recommend ways to improve IP enforcement, the DOJ said.

"The rise in intellectual property crime in the United States and abroad threatens not only our public safety but also our economic well-being," Holder said in a statement. "The Department of Justice must confront this threat with a strong and coordinated response."

U.S. officials have suggested that the counterfeiting of pharmaceuticals, vehicle parts and electronics can endanger the public. In some cases, pirated products also finance large criminal operations, officials have said.

It's unclear what IP crimes the task force will focus on. A DOJ spokeswoman didn't respond to e-mailed questions about whether the task force would focus on software, music or other IP, or whether it would focus on digital trading of music and other copyright items or on physical copies of materials protected by IP law.

Public Knowledge, a digital rights group, called on the DOJ to focus on the mass illegal reproduction of CDs, DVDs and other physical materials.

"We believe it would be a mistake, and a misuse of government resources, for the department to pursue cases against noncommercial consumer activity," said Gigi Sohn, Public Knowledge's president.

The task force has been formed after a meeting between Vice President Joe Biden and IP industries.

"Most of the discussion was held behind closed doors with industry representatives," Sohn said in an e-mail. "We noted at the time that no consumer representatives were allowed to participate in that meeting, nor was anyone present who would speak for a balanced copyright policy. We look forward to the administration taking the time to examine both sides of these very contentious issues."

There are some indications that the DOJ may target peer-to-peer file sharers, however. The DOJ, under Obama, has hired five former lawyers for the Recording Industry Association of America, and the DOJ this year supported a US$675,000 file-sharing verdict in Massachusetts.

World's Leading Tech and Internet Companies: Don't Blame Canada on Copyright
Michael Geist

The Computer & Communications Industry Association, which includes a who's who of the tech world including Microsoft, Google, T-Mobile, Fujitsu, AMD, eBay, Intuit, Oracle, and Yahoo, have issued a strong defense of current Canadian copyright law, arguing that the U.S. is wrong to place Canada on the annual Special 301 list. The CCIA notes that including Canada undermines the credibility of the process, stating "Canada’s current copyright law and practice clearly satisfy the statutory 'adequate and effective' standard. Indeed, in a number respects, Canada's laws are more protective of creators than those of the United States."

The defense, which was submitted to the U.S. government, is precisely the kind of defense that Canadian officials should be making when confronted with fear-mongering from the usual suspects about the state of Canadian copyright law. That it is the world's leading technology companies speaking out should send a strong signal to Industry Minister Tony Clement and Canadian Heritage Minister James Moore about how Canadian law is actually viewed by leading companies as they craft copyright reforms and develop a national digital strategy.

The CCIA raises several issues in countering the claims that Canada belongs on the list.
With respect to the implementation of the WIPO Internet treaties, it notes:

watch-listing one nation for non-ratification of the WIPO Internet treaties would seem to require watch-listing all non-members of the WIPO Internet treaties. The European Union, for example, only just ratified the Internet treaties late in 2009, and by such logic was presumably as much a haven for pirates as Canada until that time. There is, therefore, no basis for USTR to conclude that any country does not provide adequate and effective protection based on non-ratification of any treaty: “adequate and effective protection” of intellectual property rights, by the plain, defined meaning of those terms, goes to the extent to which there is functional legal protection for particular rights under domestic law, not whether a country has taken action on a treaty.

The CCIA continues with specific analysis of the absence of anti-circumvention legislation, stating that "policy disagreements over implementation of protection for technological measures do not constitute inadequate or ineffective protection,""the lack of a right against circumventing TPMs used to prevent copying of copyrighted works cannot form the basis for a failure to provide adequate and effective rights," and "neither Canada nor any other country is required to implement any particular means of preventing copying, and most assuredly not a right once removed from copying: circumventing a technological lock."

The CCIA also address Canada's notice-and-notice system, countering claims that the U.S.-style notice-and-takedown is required:

The Special 301 process is not a vehicle to remake the world in the image of the DMCA, a world in which millions of automated cease-and-desist requests based on computer-generated allegations automatically trigger the blocking and take down of material, including of lawfully posted material, all without any due process or any judicial involvement. Concerns about unauthorized use of copyrighted works cannot be allowed to result in the sacrifice of fundamental values that are the hallmarks of civilized countries. Canada’s system of dealing with the online use and dissemination of material, including copyrighted material, is more than adequate and effective; it is a thoughtful, and in a number of cases, superior way of resolving disputes. Notice and notice cannot form the basis for invoking procedures in the Trade Act.

The submission concludes by noting that Canadian copyright law is more protective of creators in some respects, pointing specifically to the existence of moral rights and the limitations of fair dealing when compared to the U.S. fair use provision.

European ACTA Document Leaks With New Details on Mexico Talks and Future Meetings
Michael Geist

A brief report from the European Commission authored by Pedro Velasco Martins (an EU negotiator) on the most recent round of ACTA negotiations in Guadalajara, Mexico has leaked, providing new information on the substance of the talks, how countries are addressing the transparency concerns, and plans for future negotiations. The document (cover page, document) notes that the Mexico talks were a "long meeting with detailed technical discussions, which allowed progress, but parties not yet ready for major concessions. Due to lack of time, internet discussions could not be concluded."

Start first with plans for future talks. Round 8 of the ACTA negotiations, which will be held in Wellington, New Zealand, are apparently now scheduled for April 12 to 16th. Countries plan a five-day round - the longest yet - with detailed discussions on the Internet provisions, civil enforcement, border measures, and penal provisions. Moreover, Round 9 will take place in Geneva, possibly during the week of June 7th. This aggressive negotiation schedule - three rounds of talks in six months - points to the pressure to conclude ACTA in 2010.

Secondly, transparency. The leaked document reveals that the summary document on ACTA is currently being updated by Canada and Switzerland, with release likely in March. The new document will deny rumours about iPod searching border guards and mandatory three strikes policies. There is no agreement about releasing the ACTA text, however (though more European Union members states favour its release). New Zealand is considering a stakeholder meeting during the next round in April as part of the transparency effort.

Third, the substance of the talks. The three main areas of substantive discussion were civil enforcement, border measures (called customs by the EC), and the Internet provisions. The Commission document states:

1. The civil enforcement chapter was discussed very thoroughly. It was possible to agree additional language, but when entering into the detail of the different mechanisms (provisional measures, injunctions, calculation of damages) progress became slow due to the different technical concepts of each legal system.

2. The customs chapter was discussed in detail for the first time in more than one year. Good progress on items like exemptions for personal luggage (a sensitive issue in the public opinion). EU proposing a more organised and logical structure of the chapter, not always well understood by others.

3. The internet chapter was discussed for the first time on the basis of comments provided by most parties to US proposal. The second half of the text (technological protection measures) was not discussed due to lack of time. Discussions still focus on clarification of different technical concepts, therefore, there was not much progress in terms of common text. US and EU agreed to make presentations of their own systems at the next round, to clarify issues.

Leaving aside the more personal comments (ie. others do not understand the border measures chapter structure), the leaked document is precisely what the negotiating countries should be providing to the public in the absence of an actual text. Rather than the mundane meeting statement that says nothing, this brief report includes far more detail on the substance of the talks and the plans for the future.

Spanish Societies Reject Concerns Over Anti-Piracy Law
Howell Llewellyn

Four Spanish collecting societies have dismissed a report by the district attorney's office's advisory body, the Fiscal Council, which gives a damning assessment of the government's proposed anti-download legislation.

The Fiscal Council's non-binding report on Feb. 16 said the proposal to set up an administrative Intellectual Property Commission with the power to propose the closure of Web sites that offer download links to unauthorized content, "has an enormous potential to invade the sphere of fundamental rights."

In that sense, the Council shares the view of a growing number of business and Internet user groups, such as RedSOStenible.net, who argue that the proposed legislation to protect intellectual property infringes other basic rights.

Even culture minister Angeles Gonzalez-Sinde, who proposed the new legislation, commented that the Council report was "very valuable and constructive."

But the four collecting societies, who have created an organization called Ibercrea precisely to defend the proposed anti-piracy legislation, said Feb. 17 that "the evaluation on the degree of protection towards intellectual property rights is a mere opinion of the Fiscal Council."

Ibercrea said this "opinion... in our view collides with the protection of creation enshrined in the Spanish Constitution."

The Council's report said it was "doubtful" that protection of intellectual property "should be put at the same level" as fundamental rights such as freedom of expression, public security, national defense, public health or non-discrimination on grounds of race, sex or religion.

The report points out that the proposed legislation "is limited to cases where the service provider is established in Spain or in a State of the European Union."

This confirms warnings from RedSOStenible.net that when sites with a Spanish domain are closed, other identical sites would emerge in countries outside the EU, "for which reason the problem will not be solved."

The government is understood to be considering a way of prohibiting access to these future sites from Spain. Asked about this, the president of the Internet Users Association (AI), Victor Domingo, said "I hope they will not dare try that."

Meanwhile, Ibercrea has admitted that it held an unannounced meeting at the Madrid HQ of main opposition party, the right-wing Popular Party (PP), as part of preparations to present formally a new collecting society association to confront growing pressures to change the country's intellectual property law (LPI).

Ibercrea was created shortly before the Feb. 10 meeting, which was leaked by the daily La Razon. This in turn followed an unprecedented attack on Spain's eight collecting societies by the CNC national competition commission.

The CNC is dependent on the economy ministry, and its 100-page report accused the collecting societies of acting as a "monopoly" which charges "unfair and/or discriminatory tariffs and obstruct the activities of [Internet] users, both those that operate in traditional markets, as well as those that exploit online works". Ibercrea accused the CNC of defending "hidden interests."

In practice, the CNC has joined a growing chorus calling for a revision of the 1987 Intellectual Property Law. An intellectual property sub-commission is to advise the Congress (lower house) on whether a reform of the law is necessary, following meetings this month with collecting societies, gadget manufacturers, radio associations, hotel and restaurant groups, consumers' associations, and online services such as Google.

Google España director of institutional relations, Barbara Navarro, told the sub-commission that Spain needed "a consistent and strong intellectual property law with a vision of the future" which protects authors' rights, but also allows the development of new business models on Internet.

The existing LPI was first called into question after the government proposed, on Jan. 8, controversial anti-download legislation as part of a future Sustainable Economy Law. The legislation would allow a non-judicial intellectual property commission to propose the closure of Web sites that offered download links to unauthorized content.

Early criticism of the proposal also focused on the supposed dangers of allowing a non-judicial body of independent analysts to close Web sites or remove access to links, but the government has now said that the commission's proposals would have to be confirmed and executed by the country's High Court.

While the Sustainable Economy Law, which is set to be debated in Parliament later this year, offers a partial revision of the intellectual property law, many of those opposed to any limitation of "freedom" in Internet want a full revision of the law. This would include a new legal definition of the role of Spain's eight collecting societies.

"This is not a law against violations of intellectual property, it is a law against civil rights," said Fernando Berlin, creator of Web site RadioCable.net, and one of the promoters of RedSOStenible.net, which consists of bloggers, businessmen, and Internet user activist groups.

Julio Alonso, founder of Weblogs.net, said the creation of RedSOStenible.net was positive because "two things are necessary now - to make people aware that this is about civil liberties and not illegal downloads, and to create a pressure lobby."

Lawyer Javier de la Cueva said "it is abnormal that a commission dependent on the culture ministry should decide what is legal or illegal in Internet. That should de decided by the justice department, that is why it exists."

Any eventual law against piracy, illegal downloading or P2P file-sharing would be the first such legislation in Spain. Until now, courts have thrown out the few cases of piracy that have reached them, on the grounds that such practices are illegal only if there is a profit motive.

Copyright Staff Get More than They Give to Authors and Artists
Luke Slattery

THE body established to pay authors for the use of their copyright last year spent more on its own staff -- including more than $350,000 for a chief executive -- than it paid authors and artists directly.

The Copyright Agency Limited was formed in 1989 to raise money from institutions using copyrighted works, such as newspaper articles, photographs and book excerpts, to reward the creators of these works.

But the collection agency last year paid $9.4 million in salaries, compared with a $9.1m direct allocation for authors and artists.

Among the highest paid at CAL was its chief executive Jim Alexander, who earned more than $350,000 last year, while another senior staff member earned between $250,000 and $299,000, another between $200,000 and 249,000, and five others between $150,000 and $199,000. A further 21 staff earned between $100,000 and $149,000.

In addition, the agency spent more than $300,000 on travel for its top executives, including a trip for its three senior executives to an International Federation of Reproduction Rights Organisations conference in Barbados, and a trip for four employees and board members to the Beijing Writers Festival.

CAL supplements its direct payments to authors with a large allocation -- $76m last year -- to Australian and international publishers on the assumption that a proportion of this money will be returned to authors.

"While it is true that publishers may collect on behalf of their authors, at present once they receive funds from CAL there is no check that they do, in fact, carry out their legal obligation to pass on money," said Jeremy Fisher, former executive director of the Australian Society of Authors and Senior Lecturer in Writing at the University of New England. "Nor is it clear how much any one publisher receives from CAL."

Of about $114m raised by CAL through licensing fees last year, more than $80m came from schools, TAFE colleges and universities and is, in effect, public money.

The chief executive of Universities Australia, Glenn Withers, said Australian universities would be "very concerned" if authors were not fairly compensated from the more than $24m universities paid collectively each year to CAL. "Fair remuneration for rights holders is paramount," he said. "Equally, it is in the interests of copyright owners and creators, many of whom are our university staff and students, to minimise the operational costs of collection and distribution of monies paid by licence users."

In response to questions put to the agency by The Australian, CAL defended the proportion of its budget spent on salaries. "While licensing revenue grows, the complexity of CAL's business continues to require investment in systems and process improvements to achieve operational efficiencies and, in particular, to integrate with new international standards," Mr Alexander said. "Appointing and retaining key managerial staff to lead CAL through these system change projects is integral to its efficiency."

But Professor Tom Cochrane, Queensland University of Technology's deputy vice-chancellor, said concern within the university sector over the "very high level" of salary compensation in CAL was understandable.

Nielsen's Cheap Trick
Dave Frey

I am a manager. One of my clients is a band called Cheap Trick. They have been together for 35 years and basically play shows and make recordings.

Though the public is clearly buying singles and not CDs, they record songs in clusters. They can prepare/rehearse them, get good instrument sounds, and realize other savings through efficiency. Once a good drum sound is finally dialed in, why not record a group of songs?

Anyway the band self released a collection of songs on 8-track, LP, CD, and digitally, called "The Latest" last summer. And since then the biggest thing I've learned is the power, (and price), of the band's fan information.

For instance, Ticketmaster "owns" information on hundreds of thousands of Cheap Trick fans who have purchased their concert tickets. This is for sale. Amazon "owns" information relating to every Cheap Trick Amazon sale from day one. Their information is for sale. All Music “owns” a Cheap Trick "Artist Page" that propagates inaccurate out-of-date information. And many third party sites parrot their information, and that's for sale. Soundscan "owns" information concerning CD and digital sales. Their information is for sale.

So, every couple of years when the band releases a new CD we hustle, work, and pay to promote it. This activity always raises their profile. And like clockwork Cheap Trick's former record company(s) release repackaged budget Special Products to cannibalize the new release. Once they buy this information they can better target their predatory product.

So it was decided “The Latest” would not be registered with Soundscan. Maybe the former labels would have a harder time trying to trick the fans. But keeping information from Soundscan so that it can't be sold to competitors is impossible.

Today I called Tunecore, our distribution company, pissed-off because a radio station I spoke with bought the digital sales information. I wanted to see if TuneCore could help stop the digital stores from reporting our sales information to Soundscan.

It is common knowledge that Soundscan pays iTunes, Amazon, and others for information so that they can mark it up and resell it. Soundscan also acquires their information from the electronics chain, two bookstores, the coffee conglomerate, and the two big box discount warehouse(s) who still remain in the physical CD retail space.

So selling information to predators is how Nielsen/Soundscan hurts musicians and I don't appreciate Soundscan selling my client's information to anyone.

Similar to the 24/7 media that leaves no room for mystique, development, and nowhere to earn fans. Too much information in the wrong hands can kill. And when the light hits, it's often too soon, and like bugs under a magnifying glass everything's cooked.

Sweden Calls Time on Lifetime Artist Stipends

The Swedish government plans to end the practice of giving a select group of Swedish artists a lifetime income guarantee.

"The income guarantee covers 157 artists and leaves all the others outside. I want more than 157 to get the possibility to develop their art," said culture minister Lena Adelsohn Liljeroth when presenting the government's plan.

The income guarantee is administered by The Swedish Arts Grants Committee (Konstnärsnämnden) and amounted to 17 million kronor in 2009, which will now be re-allocated as five and ten year scholarships. Recipients currently enjoy a guaranteed 18,000 kronor ($2,500) per month.

"The income guarantee is one of the forms of support for professionally active artists...to expand their possibilities to work and develop their art," the committee explains on its website.

The committee's chairperson Ingrid Elam has previously expressed support for the proposal, according to the Svenska Dagbladet newspaper, and the committee has proposed further changes to the government over how the grants are calculated.

"It is not defensible that the state, for perhaps 30-40 more years, maintain a flawed system," Ingrid Elam wrote in a statement of the committee's assessment of the proposal.

In its eight-page advisory opinion, the committee also warns of problems for established artists when the new pension system comes into force.

Several organisations representing those active within the Swedish culture and arts sector have expressed opposition and outrage at the changes.

"The government should extend the lifetime income guarantees to 200," said Karin Wilén at The Swedish Artists' National Organization, according to Svenska Dagbladet.

Several artists have expressed their view of the changes in the media in recent days. Film director Roy Andersson told the Aftonbladet newspaper that his grant has been very important to him and that he would likely have fallen into penury "on several occasions" without it.

But there are also those that argue that any changes are met with vocal objections from some quarters.

"I can not understand the outrage. The money is not being taken away, just re-allocated - it is surely better for active artists to get a bigger slice of the cake," said arts and business advisor Susan Bolger to The Local on Wednesday.

The existing 157 artists included within the system, which provides a current guaranteed lifetime minimum salary of 18,000 per month, will not be affected by the changes and so the system is expected to exist for a while yet as the youngest recipient is 52-years-old.

Among the Swedish artists in receipt of a state income guarantee are included the clown Manne af Klintberg, author Jan Myrdal, film director Roy Andersson and the chess-player Ulf Andersson.

Man to Serve Two Years in Prison for Illegally Recording The Dark Knight

A Missouri man was sentenced Friday to two years in federal prison for illegally recording The Dark Knight in a theater and selling the movie on DVD.

U.S. District Judge Fernando J. Gaitan also ordered the defendant, Robert Henderson of Grandview, Missouri, to pay $24,738. The prison sentence will be followed by three years probation.

Henderson pleaded guilty to criminal copyright infringement for using a digital camera to record The Dark Knight on July 18, 2008 -- opening day for the Warner Bros. blockbuster. He was caught as part of an investigation by the Motion Picture Association of America.

“This is an appropriate sentence for a very serious crime, and we hope it will serve as a warning to would-be movie thieves that they will face severe consequences for engaging in these activities,” Mike Robinson, the MPAA's senior vice president of content protection, said in a press release.

In December, the FBI arrested a New York man suspected of uploading an unfinished edit of X-Men Origins: Wolverine to a file-sharing website for the film's release. Earlier this month 20th Century Fox filed six lawsuits against several dozen people the studio claims sold DVDs containing unfinished versions of the movie.

Pirate Bay Uploader Raided By Anti-Piracy Group

A Pirate Bay user in his 20’s who uploaded a screener copy of a movie has been tracked down and raided by the same anti-piracy group that recently shut down the EliteBits BitTorrent tracker. Although the man seems to have uploaded only four movies, the group is labeling him “a big fish”.

While conducting their usual monitoring of file-sharing networks, anti-piracy outfit Antipiratgruppen noticed that a user with a Danish IP address was uploading a screener copy of the Anders Matthesen movie ‘Black Balls’ via The Pirate Bay.

Antipiratgruppen collected evidence and asked a court to force TDC, the man’s ISP, to reveal his identity and home address. The court complied.

Armed with a warrant and a representative from the court, last week Antipiratgruppen carried out a raid on the man’s Herning home to gather evidence of his alleged offenses.

Maria Fredenslund, lawyer with Antipiratgruppen, was keen to emphasize the significance of the raid.

“We are waiting for the IT expert’s report on yesterday’s action, but there is no doubt that he is behind massive violations of copyright. We found and seized several hard drives, web server, etc. so it will take time to go through it all. The case is a good example of how a case which at first glance seemed modest, in fact, is about massive piracy. At least in Denmark,” she said in a statement.

Although Fredenslund said that they presume the man’s hard drives were filled with copyright content which made it a “very big case”, she also noted that the man in his 20’s had to her knowledge only violated movie copyrights online four or five times. A quick look at the user’s Pirate Bay account seems to confirm he has uploaded a handful of movies and a small number of music torrents.

Fredenslund told Danish media that Antipiratgruppen secured an injunction against the man so if he continues to share files he can be punished. Speaking of the man with DR.dk, she said that her group doesn’t intend to “sue him to hell” since they are “nice people”, but will need to see the volume of files traded in order to calculate the compensation required.

In November 2009, Antipiratgruppen announced that after losing several court cases they had largely given up on trying to get illegal file-sharers convicted, mainly due to their inability to gather solid evidence.

Indeed, the Danish courts have ruled several times that in terms of evidence, an IP-address alone is insufficient to prove guilt. However, the new tactic is to label people like this screener uploader and torrent site operators as “big fish” in order to get a warrant to seize physical evidence.

Fredenslund said that because this man was the first to make Black Balls available on the Internet, Antipiratgruppen had considered this as an aggravating factor which justified their action.

Equally, the recent raid on the operator of the EliteBits BitTorrent tracker was targeted at “traffickers”, she explained.

Police Raid Polish File-Sharing Forum

Police in Poland last Friday raided a number of homes believed to be related to the running of an Oink-style illegal file-sharing forum, arresting three people.

A 21 year old computer studies student and two teenagers, aged sixteen and seventeen, are suspected of operating the site. Three other locations, thought to be the homes of members of the forum, were searched as part of the raid, which was conducted in conjunction with the Foundation For The Protection Of Audiovisual Creativity.

Although police are yet to officially confirm the name of the site in question, TorrentFreak reports that it was Filmowisko, which boasted over 30,000 members and was taken offline around the time of the raid. As its name suggests, that community had a movie sharing bias. Six computers and 150 DVDs and CDs were reportedly seized during the raid.

The 21 year old and seventeen year old have now been released and face charges of copyright infringement, which carries a prison sentence of up to five years in Poland. The sixteen year old was apparently detained for longer, and will be dealt with by the family courts.

Internet Users Appeal to Medvedev Over Torrent.Ru Site Closure

A online letter to Russia's ruling tandem of Dmitry Medvedev and Vladimir Putin protesting the closure of the torrent.ru file-sharing website continued to attract signatures on Saturday.

The website, which has some 4 million users, had its domain name suspended on February 18 by the ru.center web-hosting site by request of Moscow prosecutors over a breach of intellectual property rights.

A statement later said that the decision to close the site while investigators carried out a "preliminary investigation" was due to the 26 January online illegal sale of the Autodesk AutoCAD program by a Moscow resident for 1,500 rubles (some $50).

The online letter claims that investigators acted in excess of their powers. It also denied that the site's owners were responsible for copyright breach, as files, both legal and illegal, are not actually located at torrent.ru.

Andrei Vorobyov, a spokesman for ru.center, said the case was the first example in Russia of a website being shut down over copyright infringement. He noted that sites had been closed in the past over the distribution of pornographic or extremist material.

The torrent.ru site has now switched to the rutracker.org, where it continues to operate as usual.

Torrents allow the quick transfer of large files by "seeding" the data among users.

Sweden's Pirate Bay, possibly the world's most famous file-sharing site, has been the subject of lawsuits across Europe.

The Secret World of Private BitTorrent Trackers
Adam Frucci

Somewhere on the web is the ultimate music site. It has virtually every album, EP and single ever released in a variety of high-quality formats with insanely fast download speeds. You're probably not allowed in.

The Pirate Bay is dead. So is TorrentSpy, MiniNova, Suprnova and many other public BitTorrent trackers. But the most savvy and obsessive file hoarders don't care about that stuff; they wouldn't be caught dead using public trackers.

People serious about downloading pirated music, movies, TV shows, software and other media aren't interested in getting a letter from their ISP or the RIAA/IFPI/MPAA/CRIA. They're also not interested in getting viruses or fake files, often seeded on public trackers by copyright enforcers looking to make piracy annoying. So they've built up hundreds of private sites that only trusted users can access.

A private BitTorrent tracker is a site that you can only gain access to via an invite from a current user. Some of them are very basic, featuring merely a searchable list of torrents people have uploaded. Many feature forums with the trackers for people to announce and discuss files that are available. The most sophisticated feature gigantic databases that organize the files like the greatest online downloading store ever built, but with no checkout.

There are huge private trackers that, like The Pirate Bay, offer up everything and anything that you could want. But there are many more smaller, more specialized trackers. There are sites for music, for movies, for HD Blu-ray movie rips, for both Mac and PC software, for porn, for comic books, for console games, for anime, for TV shows, for E-books and for sporting events. If you know where to look, you can find a site that specializes in exactly what you care about downloading the most.

But downloading media isn't the only thing going on at these sites. At some, they're software development communities, with large numbers of developers donating time to building the site together into something more than just a place to grab files and leave. And it's just this sort of development that gives these sites the ability to reappear in different forms if they get shut down. Because, when you're in the illegal file-swapping business, getting busted is a fact of life.

The RIAA told me that while both public and private trackers are "enormously damaging," they've handed the reins over to the IFPI (International Federation of the Phonographic Industry) to go after these sites. This is probably because many of these sites are hosted overseas. The IFPI told me that "it focuses resources on the top of the illegal supply chain of music, regardless of whether that is a public tracker, private tracker or other source."

OiNK was probably the biggest private music tracker on the web when it was shut down in 2007 by the IFPI. It was huge and well loved. Even Trent Reznor admitted he had an account:

I'll admit I had an account there and frequented it quite often. At the end of the day, what made OiNK a great place was that it was like the world's greatest record store. Pretty much anything you could ever imagine, it was there, and it was there in the format you wanted. If OiNK cost anything, I would certainly have paid, but there isn't the equivalent of that in the retail space right now.

OiNK was so well loved because, as Reznor said, it was amazing. If there was an album you were searching for, it was a couple of clicks away. And thanks to infamously strict bitrate requirements, it was available in a number of formats, all higher-quality than what iTunes was offering at the time.

Furthermore, OiNK had very strict ratio requirements, meaning that if you didn't upload as well as download, you'd be kicked off the site. This ensured that files were seeded for a long time and were continually available.

Last month, after a two-year legal ordeal, OiNK founder Allen Ellis was found not guilty and released in the UK. But immediately upon OiNK's demise, multiple other trackers popped up to replace it, built by former members of the OiNK community and following the same ratio and quality guidelines that made OiNK so popular. And those replacements offer even more functionality than OiNK did, continuing to grow and improve in the years since it was shut down.

One of them, let's call it Site X, has surpassed OiNK in terms of content and functionality. It's run like a business, with multiple staffers putting in many hours a week to code it, manage it and work on new features. I talked to the founder and lead SysOp of Site X, who said when the site first started he put in a full-time job's worth of hours. "Nowadays, a conservative estimate would be 15 hours," which is still no small amount. And he is one of three SysOps. There are also two administrators, one developer and 17 moderators on the Site X staff. That's a lot of manpower for something nobody is getting paid for.

And according to this head SysOp, all money made from user donations goes to maintaining the servers and not into any wallets. "I'd be too scared to touch it, even if I could dampen my sense of morality enough to reach my hand into the piggybank." (One of the main charges levied against OiNK founder Alan Ellis was that he made "hundred of thousands of pounds" from user donations.)

Site X's main feature is its huge database of torrents. All are organized by artist, so you can find everything someone has released in one place. Many releases are available in multiple file formats, ranging from lossless FLAC to various bitrates of MP3 to AAC to Ogg, for weirdos that really want their music to all be in Ogg. And for major releases with multiple versions available, you'll find every version, from the original to the vinyl to rereleases, available separately.

Pink Floyd's Dark Side of the Moon, for example, has 20 different versions available on Site X spread across 60 different download options (click the image to the left to see the entire crazy list). Sure, most people will go for the basic V0 MP3 of the standard issue recording, but if you really want to find the 1981 Mobile Fidelity Sound Lab master digitized from vinyl as FLACs, or the 1983 Japanese Black Triangle Pressing in 320 AAC, they're here. It's a completists' paradise.

But what about discovering new music? Site X has two features that help with that: collages and similar artist maps. Collages are basically user-made lists of albums. They can be something like Pitchfork's 100 Best Albums of the 70's or AllMusic 5 Star Albums or just one guy's favorite 90's ska records. At the bottom of every album page it lists what collages that album is a part of so you can explore other music that somehow relates to it.

Similar artist maps are visual guides that appear at the bottom of each artist page. Anyone can add an artist they feel is similar to an artist's page, and as those suggestions get voted up and down, they appear in various sizes in the visual guide at the bottom. Like a band? Simply check out other bands in the map to try something similar.

All of this is built on a system that's rooted in a community. There's an extensive forum here, as well as a Wiki full of information on everything from site rules to how to digitize a vinyl perfectly. And the community helps build the site, coding features that are added to the system and creating hundreds of custom CSS skins to change the appearance.

But what if Site X gets shut down like OiNK was? It has over 116,000 users as of this writing, a number far too large for it to escape the notice of the same people that shut down OiNK. The head SysOp admits that they've already gained some unwanted attention: "We've gotten multiple letters from the CRIA, but none in the past year and a half. It's been very quiet lately. They've either realized they can't do anything, or are busy launching an amazing assault." Won't all the work put into this system be for nothing if the latter is true?

Nope. Because the entire site was built as an open-source piece of software called Gazelle, one that's continually tweaked and updated. Gazelle runs the whole structure of the site, and they're currently working on writing an entirely original tracker from scratch for it. And so far, there are over 50 other private trackers running Gazelle. If one dies, another will pop up to replace it.

So does the existence of such a large network of meticulously-built private BitTorrent sites mean the IFPI and other trade organizations are losing the piracy battle? No, actually. These sites are very difficult to get into and just as difficult to stay in once you're there. They are most definitely not for laypeople, and they're also not at "the top of the supply chain." The days of Napster and Kazaa making piracy easy enough for your mom to do it are gone. It's actually harder to pirate media now than it was a few years ago thanks to the efforts of copyright holders.

Yes, these sites exist that are far, far better than any option has ever been before. But even a site as large and sophisticated as Site X has only 116,000 members. That's nothing compared to the millions of people who populated the large peer-to-peer file-sharing programs a few years ago.

So yes, piracy is indeed alive and well, more sophisticated than ever before. But it's been pushed to places that most people can't get to, and though that's an unlikely victory for the recording industry, I doubt they'd ever claim it as theirs.

5 Reasons You Should Be Scared of Apple
Robert Evans

Let's just say it: Nobody has changed the way we interact with technology like Apple has over the last 10 years. Even if the iPad turns out to be the disaster that many are anticipating, Steve Jobs will still be seen as the hero who turns top-end technology into friendly little gadgets even your grandma can use.

But recently, a faint chorus has been growing--thousands of tech geeks suggesting that if you look under Apple's shiny white veneer, you'll find some practices that are less than user friendly. In fact, some of the things Jobs and Apple are being accused of are so over the top, Lex Luthor would have to take off his hat ... and then use it to cover the dark stain spreading across the front of his pants.

#5. Apple versus Their Customers

When you buy Apple products, you don't just buy computers or gadgets. Apple sells iPods and iPhones that play music purchased in their iTunes store. It's all part of Jobs's sales pitch to people who pride themselves on individuality. Even before there were ads featuring the kid from Die Hard 4 bickering with John Hodgeman in heaven, the message was been the same: PCs are for those people who follow the herd, but you choose Mac because you think differently.

And the message seemed to take. In the court of public opinion, Apple is the hip, young underdog challenging his competition. Who have fared... less well.

But there's an unfortunate catch with Apple products. Even after you spend your hard earned money on fancy Jobsian wonder-toys, you still don't really own them. Turns out Jobs might have literally been speaking in the first person when he started slapping I's in front of everything he sold. As in, "I am Steve Jobs and I just sold you suckers a gadget that iDesigned, iControl and iBreak if you break my arbitrary rules."

Think we're exaggerating? Say you want to buy an iPhone. If your town isn't on one of the postcards Luke Wilson reads in the AT&T wireless commercials, you're going to have to "jailbreak" your new gadget. Don't worry; you won't need any digging spoons or defensive sodomy. Jailbreaking is just a term for modifying your iPhone in order to make it do what every other gadget on the market does: Whatever you tell it to. For instance, without jailbreaking you can't install unapproved third party applications, customize your user interface, or unlock your phone for use with another carrier.

Again, manufacturers of other cell phones and gadgets generally don't care what customers do once they've paid for their products with good, honest credit card debt. But Apple goes beyond complaining. They will actively break your shit for disobeying their arbitrary rules.

Yes, Apple has sent out updates specifically designed to disable phones that have been modified to work with carriers other than AT&T, or to run Microsoft Office. Seriously now, we'd be inventing new, fluorescent shades of berserk if, say, a PC manufacturer broke your computer for installing Linux.

So how come Apple gets away with it?

#4. Apple Versus The First Amendment

Jason O'Grady writes a column about Apple for the tech news website ZDNet. One day O'Grady came across some inside information about an Apple product. He posted it in his blog and then got back to whatever tech journalists spend their time doing. Masturbating while fondling digital cameras, probably.

Upon finding out about the leak, Apple could have taken the free publicity and ignored the whole thing or simply asked O'Grady to remove his article. Instead, they went absolutely batshit crazy and hulked out on some poor nerd who gives them free advertising for a living.

They subpoenaed his ISP, tried to get them to take down his website and source of employment, and also subpoenaed O'Grady himself in order to get the name of the source who leaked the information. Staring down the barrel of Apple's 14 billion dollar legal shotgun, Jason went to the Electronic Frontier Foundation for help, causing a legal cluster fuck that went all the way to the state appeals court before a judge finally convinced Apple and Jobs to act like a couple of Fonzies and be cool.

By now you're probably pretty curious to know just what sort of leak Apple thought was worth attempting to destroy O'Grady's career over. Was it a new iPod? Leaked code for an upcoming version of OS X? The iPhone?

Nope. It was a FireWire breakout box for GarageBand.

What's that? You have no fucking clue what a FireWire breakout box is? Neither do most people. It's a minor peripheral product. Sort of makes you terrified for the poor bastard who leaks something important like ...

#3. Apple Versus The Poor Bastard Who May or May Not Have Leaked an iPhone

Apple is famous across the world for having some fairly strict policies on information security. On the transparency spectrum, Apple's corporate policy makes the CIA look like one of those sliding glass doors toddlers always run into on YouTube. Beyond the usual security doors and guards, according to the New York Times, "Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them, and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful, [former employee] said." The article didn't outright say that Steve Jobs has been implanting his employees with psycho-receptive "pain chips" designed to inflict unbearable agony upon the disloyal, but it was pretty heavily implied.

So what's wrong with the secrecy? Absolutely nothing. Except when it indirectly leads to torture and suicide. Then it's probably time for management to throttle things back just a smidge. It was reported earlier this year, that Apple reached that point over a possible leak of an iPhone prototype.

Sun Danyong was a young engineer who worked at the Shenzhen factory of Chinese electronics manufacturer, Foxconn. His job had something to do with handling new iPhone prototypes, one of which was lost or stolen while in his care. Apple has a zero tolerance policy for corporate leaks from the companies it works with, so Foxconn knew Danyong's slip-up could potentially cost them tens of millions of dollars in future business once Apple dropped the hammer.

Caught between a rock and a hard place, Foxconn did the only thing a self-respecting sociopathic megacorporation could: torture the crap out of their employee. Facing another session over the missing iPhone prototype, Danyong leapt to his death from a 12th floor apartment building.

Apple didn't torture Danyong themselves, but their maddeningly intense security policies set the mood. Prototypes and specs of other company's next generation devices leak out all the time, and no one gets hauled into interrogation chambers by corporate police over it.

Employees being forced to work weekends and holidays without being allowed to tell their families; spy cameras inside of offices; engineers being forced to work under sheets... isn't this going a bit too far for consumer electronics? We expect this kind of security around, say, secret government bases and hidden volcano lairs, not from the makers of the Pippin.

#2. Apple Versus App Developers

To date, over three billion apps have been downloaded from the iPhone App Store. Of course, Calendars and RSS Readers and flashlights and other "useful" apps only account for part of the over 150,000 the store offers. With hundreds of apps being submitted every week, you'd think Apple would have its hands full rejecting all of the useless ones built to simulate farting, drinking beer, brandishing a light-saber, shaking a baby and everything in between.

Well, no. All that stuff gets through. Apple's main concern in policing the App Store seems to be stomping down on competition. Applications that duplicate Apple or AT&T apps (and do a better job of it) are likely to see the banhammer's vengeance visited upon them. MailWrangler, PodCaster and, most famously, Google Voice have all been banned for "duplicating functionality."

Take for instance, Apple's rejecting the Eucalyptus app for obscenity.

Ooooh! Eucalyptus. That's got to be slang for something kinky as all hell! Was this a social networking app for a very special subset of furries? A hook-up site for swinging Botanists? No, actually it was an Ebook app for public domain works. Since it provided access to a Victorian-era translation of the Kama Sutra, the app was deemed inappropriate. We asked Apple if they saw any irony in the fact that the iPhone's web browser provided access to a billion websites far filthier than an ancient translation of a religious text. Sadly, Apple's board of directors was too busy banning dancing in small Midwest towns to be reached.

Jilted developers and Google aren't the only people pissed off at Apple's App Store policies. The boys at the FCC are investigating the App Store for anti-competitive practices. Apple responded to the accusation, which kicked off yet another gigantic legal clusterfuck the results of which have yet to be decided, but are likely to be retarded.

#1. Apple Versus Absolutely Everyone: The Masterplan

You might be asking why any of this should matter to you. After all, most of Apple's dickery is aimed at a small, tech savvy minority. People who know how to hack their iPhones or program applications or work for a giant Apple subsidiary in China. Jobs has always known that the vast majority of people think technology is something to watch porn on. Lucky for him, he's fantastic at designing technology that those people intuitively understand how to use. Unlucky for the non-savvy majority, there are increasing signs that we're the eventual target of Apple's master plan.

If you're one of the tens of millions of people who have iTunes installed on their Windows machines, you might want to open up a search and see if Apple's "Safari" web browser has made its way onto your computer. No, you didn't download that on purpose and then forget about it. In March of 2008, Apple stuck a copy of Safari into a routine update for iTunes. They set the 22.65 MB file as part of the default download. Users who just skimmed over the update notice without reading it (IE: nearly everyone) soon found themselves with unwanted software.

Response from the media and major figures in the tech industry was immediate and powerfully negative. The CEO of Mozilla even wrote a big blog entry blasting Apple. As he saw it, this move of Apple's wasn't just annoying, it posed a risk to the security of the whole Internet.

In July of 2008, another iTunes update went out with a hidden program clinging to it like poop to a hairy ass. This time, the backlash was even more severe. Internet watchdog group Stopbadware.org accused Apple of spreading Malware. Bloggers again raised their flabby arms in protest. Apple quickly rescinded the update..

So they've obviously learned their lesson, right? Well, in October of 2009, a new application from Apple landed in the U.S. Patent Office. Apple's idea was to program devices to periodically interrupt users with unskippable ads. The ads would temporarily halt performance of the device in order to "compel attention." That on its own is pretty nightmarish but, innovators that they are, Apple found a way to crank it up to that hard-to-reach "Lovecraftian" level.

Their words:

"Apple can further determine whether a user pays attention to the advertisement. The determination can include performing, while the advertisement is presented, an operation that urges the user to respond; and detecting whether the user responds to the performed operation. If the response is inappropriate or nonexistent, the system will go into lock down mode in some form or other until the user complies. In the case of an iPod, the sound could be disconnected rendering it useless until compliance is met. For the iPhone, no calls will be able to be made or received."

Ho-lee shit.

And this isn't just some crazy, pie-in-the-sky idea some engineer at Apple had and decided to get patented. Steve fucking Jobs had his name attached to the application. Is this where the man who holds the reins to the entire Apple Corporation sees his product line going? A future where cheap, malware and prime-time TV-ad-riddled devices flood the market?

Unfortunately, most of us won't know until our porn is being interrupted by an ad for FreeCreditReport.com.

Any Use of this Article Without the NFL's Express Written Consent is Prohibited
Nate Anderson

With the Super Bowl just concluded and baseball's spring training only weeks away, a question occurred to us: whatever happened to the push for copyright holders to tone down their copyright notices?

We hear and see the warnings whenever a football or baseball game is televised, whenever we read books, whenever we watch a movie. These are the sort of warnings that make claims like, "Any other use of this telecast or any pictures, descriptions, or accounts of the game without the NFL's consent is prohibited," despite the apparent wrongheadedness of the statement.

Should copyright holders be held more accountable for inaccurate warnings? In 2007, two different efforts to provoke change on the issue tried to force the issue. Both ended without success, even as courts have cracked down on some of the worst copyright overreaching by the leagues.

Asking the government to act

In 2007, the Computer and Communications Industry Association decided to stir the pot a bit on such copyright notices. CCIA's in-house lawyer Matt Schruers drafted a complaint and sent it along to the Federal Trade Commission, arguing that over-broad copyright warnings violated Section 5 of the FTC Act by "misrepresenting consumers' rights to use copyrighted works and by threatening sanctions for lawful uses of those copyrighted works."

Groups representing 139,000 US libraries soon supported the complaint.

Those paid by big copyright holders to argue for their positions found CCIA's complaint unfounded. Patrick Ross, who heads the Copyright Alliance, went to the CCIA press conference announcing the complaint. His response: "CCIA President Ed Black ridiculed a number of copyright warnings—you know the type, they say unauthorized use could result in fines or jail. Ed says the warnings don’t stipulate fair use. Well, using the word 'unauthorized' would seem to address that, because fair use under Sec. 107 of the Copyright Act would be authorized."

This argument is true only in the broadest sense: that fair use is indeed written into copyright law. But fair use does not "authorize" particular uses of works and can only be decided on an after-the-fact basis by a judge. No permission in advance is even possible on fair use; the best one can get is good advice from a lawyer.

As the Copyright Office itself states, "the distinction between fair use and infringement may be unclear and not easily defined. There is no specific number of words, lines, or notes that may safely be taken without permission... The Copyright Office can neither determine if a certain use may be considered fair nor advise on possible copyright violations. If there is any doubt, it is advisable to consult an attorney."

More important, however, this argument doesn't even apply to some of the most common copyright notices. It applies to the "FBI warning" found on many movies, but the NFL's own notice is unambiguous: "This telecast is copyrighted by the NFL for the private use of our audience. Any other use of this telecast or any pictures, descriptions, or accounts of the game without the NFL's consent is prohibited."

Baseball is just as clear: "This copyrighted telecast is presented by authority of the Office of the Commissioner of Baseball. It may not be reproduced or retransmitted in any form, and the accounts and descriptions of this game may not be disseminated, without express written consent."

Both are quite obviously ridiculous—descriptions of baseball and football games may in fact be disseminated without written consent (and are every day around the water cooler and in newspapers and in Wikipedia).

And the less said about books, the better; many say things like, "no part of this publication may be reproduced or transmitted in any form or in any means... without permission in writing from the publisher." Again, not true.

While plenty of sites, including Ars, covered the CCIA complaint, it never went anywhere. What happened to it? We checked in with Schruers, who still works for CCIA, and he passed along the FTC's response from December 6, 2007.

In a six-page letter, the FTC declined to move forward on an investigation because it determined that the omissions in such warnings were not "material to consumers." (In comparison, Sony BMG's misguided decision to slap rootkit-style DRM on audio CDs and then not tell consumers was material, and it did result in an FTC consent order.)

In the agency's view, no one would see such warnings and actually believe them as complete statements of their own rights. "We do not have a sufficient basis to conclude that consumers would view those brief warnings as complete statements of their rights with respect to the works," the letter said.

Still, there was some comfort to CCIA. While FTC declined to act, they did "encourage" copyright owners to "be accurate in their characterizations of their rights." If they post misleading information for too long, Bad Things could happen:

"If consumers routinely confront exaggerated and inaccurate copyright warnings they may tend to disregard them altogether, to the detriment of consumers and copyright owners alike."

Our copyright notice is copyrighted

After watching the 2007 Super Bowl, legal professor Wendy Seltzer uploaded to YouTube a 33-second clip of the game's copyright notice, followed by a few moments of onscreen action. (Well, not "action," really; the Colts were preparing to kick off.)

Super Bowl copyright notice

It was Seltzer's first YouTube posting ever, and she did it to make a point. "I snipped the copyright warning out of the weekend’s Super Bowl broadcast as an example for my copyright class of how far copyright claimants exaggerate their rights," she wrote on her blog at the time. Would the NFL order the clip taken down?

Yes, it would—twice. Five days later, YouTube notified Seltzer that the video had been targeted by a Digital Millenium Copyright Act (DMCA) takedown notice from the NFL. If she did nothing, the video would remain down, though she could also choose to file a "counter-notice" swearing a "good faith belief" that the takedown was in error.

Seltzer filed the counter-notice, and YouTube put the video up within the 10-14 day "putback" period in the law. At this point, YouTube had done its legal duty and was now immunized in the dispute. If the NFL wanted to continue the matter, it could take Seltzer to court, but it could not hold YouTube liable for the video.

Instead, on March 18, the NFL sent another takedown notice to YouTube. Seltzer said that "sending a second notification that fails to acknowledge the fair use claims [made in her first counter-notice] instead puts NFL into the 512(f)(1) category of 'knowingly materially misrepresent[ing] … that material or activity is infringing.'" And that would open the door for Seltzer to sue the NFL for filing improper DMCA takedowns.

Instead, Seltzer just filed a second counter-notice. A couple weeks later, YouTube restored the video and no more was heard of the incident.

I checked in with Seltzer this week to see what, if anything, had happened. She tells me that after the second counter-notice, the NFL never sued her and never sent another takedown notice; the clip remains available on YouTube today. As for her own implicit threat to sue the NFL, Seltzer didn't act on it. "I probably would have if they had pulled the video again," she adds.

Seltzer says that the incident was an educational one, and it led her to post similar copyright notices from Major League Baseball games; no takedown letters were forthcoming from MLB, however.

Changes on the ground

Attempts to alter these copyright claims have yet to produce real change, but the sports leagues have been forced to alter some of their behavior relating to copyright. Major League Baseball, for instance, has long claimed that fantasy sports leagues must take out a license in order to use real player names and stats—despite the "fact" that facts aren't copyrightable.

A St. Louis company, CBC Distribution and Marketing, refused to do so and ran some Internet fantasy sports games using real MLB data. Baseball sued, and lost in 2006 at the District Court level. In 2007, baseball lost at the Appeals Court level. In 2008, the Supreme Court refused to hear a further appeal, and CBC was vindicated.

The news was big enough to inspire a New York Times op-ed, in which the paper said, "In recent years, corporations have been aggressively pushing the bounds of intellectual property—extending the length of copyrights to unreasonable lengths, for example, and patenting seeds. In the case of fantasy baseball, the courts have rightly cried foul. The biggest fantasy in this case was Major League Baseball’s claim that its fans should pay to talk about the game."

That decision was bolstered by a 2009 ruling in which broadcaster CBS brought a similar lawsuit against the NFL Players' Association. The judge in that case agreed with the earlier CBC ruling and concluded that such facts were in the public domain.

And the NFL's decision to go after churches for offering Super Bowl broadcasts on big-screen TVs generated so much bad press that Congress even threatened to step in. Sen. Arlen Specter (R-PA, now D-PA) introduced S. 2591, a bill which singled out "professional football contests" and allowed nonprofit groups to show the games on any size screen.

The bill went nowhere, but the NFL did call an audible. In late 2008, the league announced that it was changing its ways and would no longer go after churches simply for using a 55+ inch screen.

Baseball and football both remain tenacious about defending their copyrights and trademarks, but they have to do so within an increasingly IP-savvy environment. People care about such issues more than they did a decade ago, and when they think the NFL is overreaching, the public outcry can be deafening.

When the NFL cracked down on sales of "Who Dat" merchandise before the most recent Super Bowl, fans couldn't believe that the league was trying to horn in on their catchphrase. But, in this new media environment, the NFL also has some tools at its disposal. In this case, the league took to its own blog to explain that the NFL only cared about the phrase when it was used in conjunction with official Saints logos or other NFL trademarks.

What's the Easiest Way to Share Large Files and Media with Friends?
The How-to Geek

When you want to to share music, movies, photos, or other files online, you've got countless options. We've examined most, and for our money, one tool emerges on top of the heap for its ease of use, wide support, and all-around excellence.

Sharing files publicly has always been a subject of hot debate, but put aside any legal concerns for the moment and consider: What if you want to just share some home videos or music privately with a few friends rather than the internet at large? What's the easiest way to share large files?

The Answer: Opera Unite

For this writer and tech enthusiast's money, the easiest and best way to share large files of any kind with your friends and family is to simply install Opera Unite, walk through a couple of quick configuration screens, and then send them the URL and password to access your content from any browser.

Plenty of web sites let you send large files around, usually by uploading a file and then sending a link to the content, and BitTorrent is also great for sharing large files, but the problem with both of those is that you're unnecessarily putting your content out there online for others, and wasting bandwidth by sending it to third parties. (You could set up private torrents, but those still require an open tracking server, which aren't always reliable.) Opera Unite sets up a fast, direct connection to share your files, it's extremely easy to use, and best of all, it's free!

Update: Many commenters have pointed out that Dropbox is an excellent way to share files, and we wholeheartedly agree. However, Dropbox has a 2GB limit for free accounts, which is hardly enough space to share a collection of large files with your friends—plus, you have to wait for an upload to finish before you can share it. With Opera Unite, you can share large directories of any size instantly, for free.

Setting Up Unite is Easy

Since Unite is just a component of the Opera browser, all you have to do is download and install the latest version of Opera. Unite comes along for the ride automatically, but you'll need to activate it by opening up the sidebar, clicking the Unite icon, and going through the wizard to set up a free Unite account (see screenshot).

Note: You don't have to switch to the Opera browser to use Unite, so if you're a Firefox or Chrome loyalist, you can still choose to use Opera just for your file sharing needs.

Once you've set it up, you can right-click on Opera Unite Home and access the Properties, or you can select the File Sharing module and click the Start button to open up a short configuration wizard to help you share your files.

The Technical Bits

Internally, Opera Unite is nothing more than a web server that runs inside of your web browser, and uses the standard HTTP protocol so your friends and family can access your shared content from any browser. Your free Unite account gives you access to Opera's dynamic DNS service, which means you can share your content with an easy-to-remember, unique URL that you can send to anybody. Unite automatically hooks into your router using uPnP to dynamically open port 8840, but it can also use a Unite proxy server when you're behind a more restrictive firewall—though it will obviously be slower.

Everything is password protected, so even if you've set up file sharing and the URL is public, it doesn't mean that people will be able to see what you are sharing—only those that you've given both the public URL and the password to can access your files. You'll probably want to change the default passwords, though.

Share Files With Your Friends

Now that you've set up Unite, it's time to start sharing. Click on the Unite icon in the left-hand pane of Opera (it's the swirly-looking one), then double-click the File
Sharing module.

You'll be asked to choose the folder you wish to share. You can click the Advanced button and set up a few additional properties, but that's pretty much all you'll need to do to start sharing your files—a URL and password will be automatically generated for you so you can share those files quickly and easily.

After setting up your file share, the next time you double-click on the File Sharing module in the left-hand Opera panel you'll open up the administration page. Look over to the right-hand side, where you can see the URL and the automatically generated password. You can copy and paste those to your friends, and they'll be able to access the files immediately—but you should probably change the password to something slightly more difficult first.

Your unique Opera Unite URL will always be set to the [devicename].[username].operaunite.com address format, so you can actually have multiple devices set up on your network and easily share files with each one. If you would prefer to get a little more geeky, you can actually set up your own domain name for Opera Unite, but that's probably overkill for just sharing some files with friends.

Accessing the Shared Content

Once you've sent somebody the URL, they'll be prompted for a password to access the shared content, at which point they can browse through all the files you've shared and download them. Since Opera Unite usually enables port-forwarding on your router automatically with uPnP, the connection is surprisingly fast if you have a decent internet connection—it's going to be slower if it has to go through the Opera proxy server.

What makes this really great for sharing with your less tech-savvy friends is that they don't have to install any applications, or even install Opera—all of the content should work from any browser.

Taking Unite Beyond Simple File-Sharing

Since Opera Unite is nothing more than a web server, it also enables many downloadable modules to do any number of things that you could do with a full web server setup—like create your own streaming music server so you can access your content from anywhere. Just double-click on the media server module in the Unite panel, choose the location of your music folder, and then make sure to set a more difficult password. Just like that, you've enabled your entire music collection to be streamed from any browser anywhere, directly off your home PC. There's a player embedded directly in the page so you don't even need a media player installed on the other machine.

The fun doesn't stop with media serving—there are modules for a simple HTML web server, photo sharing, whiteboards, chatrooms, file sync, and more.

Opera Dragonfly Open for Business
David Storey

Since the inception of Opera Dragonfly, we planned for it to become an open source project. It has always been released under an open source BSD licence, but the source repositories were on Opera servers. Starting today, Opera Dragonfly is a fully open source project, hosted on BitBucket. Since the previous version of Opera Dragonfly, a lot of work has gone on behind the scenes replacing the existing architecture with a modern version of the Scope Protocol – STP-1. Opera Dragonfly has been rewritten to use this faster and more efficient version of Scope. Now that we believe that the underlying protocol is stable and performant, and a public desktop build has been released with this included, it is time to put Opera Dragonfly on a public Mercurial repository.

If you have a Mercurial client you can visit the Opera Dragonfly STP-1 repository and check out the source code. We have provided initial documentation in the Wiki to get you started. This is Opera’s first full open source project, so there will be a learning curve. We ask you to bear with us while we get everything up and running and policies in place. Coming from a closed source background there are some hurdles to overcome, such as the current bug tracking system being on a closed server. We hope to migrate to an open bug tracking system as the project gets on its feet.

As well as the current and previous versions of the Opera Dragonfly source code, we have released a couple of tools to help with Opera Dragonfly development. The first is Dragonkeeper. This is a standalone proxy, which translates STP (Scope Transport Protocol) to HTTP. This can also be useful for remote debugging. The second tool is Hob. Hob is a utility to create code from Protocol Buffer descriptions. Protocol Buffers are one of the formats Scope STP-1 supports along with JSON and XML.

The focus of the current release of Opera Dragonfly was stability and performance. As such you will not see a great deal of new features. We believe it was invaluable to build a strong foundation, so we can advance faster, with less issues in the future. Two new features you may notice since the previous desktop release are a new element highlight (first introduced in Opera Mobile), and a colour picker utility. The highlight has been optimised since the mobile release, and supports visualising the metrics of an element on the page, and multiple element selection. The colour picker is still in early development. It allows for the magnification and selection of colours from the Web page. The value of the colour is displayed in both HSL, RGB and hexadecimal formats. Work has also began behind the scenes to take advantage of HTML5 Web Storage to store users settings and preferences. This will eventually allow the application to be greatly customisable, and to remember layout and settings from a previous session. One of the biggest usability issues has also been solved, with inspect element being available from the Web page context menu. This reduces the steps needed to start debugging a Web page.

The current focus for the Scope protocol is improving the JavaScript debugger. This work is nearing completion on the Scope side, and will provide functionality such as the Firebug Console API.

We hope you enjoy this version of Opera Dragonfly, and that some of you will be inspired enough to help with the Opera Dragonfly project. If you like a challenge, this is a great place to start. Visit the Opera Dragonfly repository to find out more information.

Turmoil at MySpace Blamed on News Corporation

Departure of Owen Van Natta, the social networking site's chief executive, calls into question Rupert Murdoch's digital strategy
Bobbie Johnson

Days after MySpace, the struggling social network site, replaced its chief executive, a leading media pundit has said that interference from its owner, Rupert Murdoch, has left the business in a state of "total desperation".

Last week the site, which was bought by Murdoch's News Corporation in 2005, made the shock announcement that Owen Van Natta was stepping down as chief executive after less than a year in the job.

Since then, reports have suggested that his departure was the result of tension between Van Natta and Jonathan Miller, the former chief executive of AOL who now operates as the head of News Corp's digital businesses.

But Michael Wolff, author of The Man Who Owns the News, a biography of Murdoch, said that the roots of MySpace's problems were much deeper. "It certainly is not [Van Natta's] fault – he inherited a business in which you could only manage decline," he said.

Instead, he suggested, the reshuffle is indicative of a wider panic over the way in which News Corp deals with its online businesses.

"The thing that's going on at News Corp right now is total, total desperation over this digital stuff," he added. "Rupert is saying, 'What's going on with MySpace? What's happening? Why isn't this working?' It's impossible to explain to him that it's not working because it's over, because this is the way the technology business goes. Once it's past, it's really past. There is almost no way to get that back."

Five years ago, Murdoch surprised the media industry by spending $580m on MySpace, at that time an up-and-coming force in the rapidly expanding business of social networking. With the acquisition, News Corp believed it had acquired a significant lead in online media through a site that boasted a huge following and good relations with the music industry.

While the site has generated plenty of cash for News Corp – at one point, advertising on the home page alone was valued at $1m a day – a series of missteps has left it in turmoil, struggling for success and flailing in the wake of its rivals.

Competition has chiefly come from Facebook, which first overtook MySpace in popularity last summer and has gone on to significantly extend its lead since then.

Figures from comScore, the internet traffic analysts, suggest that MySpace has about 57 million users in the US, down from a peak of more than 75 million. Facebook, meanwhile, has experienced incredible expansion in the past 18 months and now boasts more than 400 million users worldwide.
Shift of power

While that shift of power has left the site looking like second–best, it has had other, material implications: last year Google chopped the value of a contract with MySpace to provide search services by $100m after the social network missed its traffic targets.

Faced with this growing litany of problems, Murdoch brought in Miller, who left AOL in 2006, to oversee MySpace and News Corp's other digital businesses. Once installed, Miller acted quickly, first removing the website's co-founder Chris DeWolfe as chief executive, then bringing in Van Natta – a former Facebook executive – to refocus the business.

With a new executive team in place, the company sold off a number of smaller properties that it had acquired and slashed more than 700 jobs worldwide, nearly half its total workforce.

One person familiar with Miller's approach is Jason Calacanis, who sold his online publishing company to AOL in 2005. He says that, under the circumstances, bringing in a new chief executive with a reputation for deal-making was a mistake, but that the company could still rebound.

"Jon is a really great manager of product people, and the people MySpace needs right now are product people," Calacanis said.

"It was probably, in hindsight, a misstep to put a deal person into a company that needs product leadership. But they took quick action to reverse that, which I give them credit for."

However, history is not on the side of MySpace. Social networking has been a graveyard for the media industry, with users happy to leave behind sites that fail to continue innovating, in favour of younger, faster rivals. Friends Reunited, bought by ITV in 2005 for £120m, was sold off last year for a mere £25m, while AOL is said to be looking to offload Bebo, which it bought for $850m in 2008.

Faced with struggles across News Corp's digital businesses, Murdoch and his lieutenants have begun taking an aggressive approach, calling for news sites to charge readers for content and labelling Google a #"parasite". He aims to put his newspapers, including the Times and the Sun, behind a paywall, something described by the co-founder of Twitter, Biz Stone, as a vain attempt to "put the genie back in the bottle".

Wolff said that this was a result of Murdoch's fundamental misunderstanding of the differences between the technology and media industries. While the 78-year-old mogul craves leadership in the digital world, Wolff suggested that a career spent building traditional media businesses has left Murdoch struggling to understand the speed and innovation required on the internet.

"He absolutely has no idea," he said. "If people really quite understood how little feeling he has for this business, they would fall down laughing – or crying."

Call 'to Block' BBC iPhone Apps

The BBC Trust has been urged to block the corporation's plans to launch phone apps for its news and sport content.

The Newspaper Publishers Association (NPA) said that the corporation would "damage the nascent market" for apps.

The group said that it would also raise the issues with the the Department of Culture, Media and Sport and MPs on the Media Select Committee.

The BBC has said it plans to launch its first news app on the iPhone in April, followed by one for its sport content.

It is also planning to develop more apps for its popular on-demand video iPlayer.

"Not for the first time, the BBC is preparing to muscle into a nascent market and trample over the aspirations of commercial news providers," said David Newell, director of the NPA.

He said that the market for iPhone news apps was "a unique and narrow commercial space" that would be "distorted" by the BBC apps.

"This is not, as the BBC argues, an extension of its existing online service, but an intrusion into a very tightly defined, separate market."

Several newspapers already offer iPhone apps, including the Independent and the Daily Telegraph - which are free - and the Guardian - which costs £2.39.

Football Focus

The BBC Trust, the body that regulates the BBC, said that the proposals to build the apps had not been referred to it for approval but it had been made aware of the plans.

"The BBC Executive has advised the Trust that it is satisfied that these plans to deliver BBC News, Sport and iPlayer content via smartphone apps fall within the terms of its existing BBC service licence and that the plans do not constitute a significant change to the service."

A spokesperson for the BBC said that its online service licence, granted by the BBC Trust, was "quite explicit in allowing the BBC to repurpose its online content for consumption on mobile devices".

The BBC news app, announced at the Mobile World Congress in Barcelona, will offer content from the BBC News website including written stories, correspondent blogs and video.

A sports app will be released before the World Cup, which starts in June, and will combine content from the BBC Sport website and 5 Live radio.

It will allow football fans to watch World Cup matches live on their phone.

The corporation said that it would initially focus on building applications for the iPhone but will then focus on developing similar software for Google's Android operating system and RIM (Blackberry).

The BBC's Erik Huggers said that the corporation's move was prompted by requests from licence fee payers.

"They tell us that they want to access the digital services that they have paid for at a time and place that suits them.

"We are catching up with our audiences, and the same content that we broadcast on television and make available online can now be better enjoyed on the move."

But Mr Newell said the development of apps "for a niche market does not sit comfortably with the BBC's mission to broadcast its content to a wide, general audience.

"We strongly urge the BBC Trust to block these damaging plans, which threaten to strangle an important new market for news and information."

Turf War at the New York Times: Who Will Control the iPad?
Ryan Tate

There's a heated turf war going on inside the New York Times over the iPad, pitting print die-hards against people focused on the Times' digital future. The outcome will determine pricing for some marquee content on Apple's tablet.

The internal fight might also determine how relevant — and profitable — the nation's most prominent newspaper can remain in the digital future. Which is probably why there's reportedly so much sniping over who gets to control the iPad edition internally.

On one side, a Times source explains, you have print circulation, which thinks it should control the iPad since it's just another way to distribute the paper. They'd like to charge $20 to $30 per month for the Times' forthcoming iPad app, basically the product already demonstrated on stage with Steve Jobs, the source said. Why so much? Because they're said to be afraid people will cancel the print paper if they can get the same thing on their iPad. Nevermind that iPad distribution comes with none of the paper or delivery costs associated with print, or that there's already a free electronic edition available to subscribers who cancel.

On the other side, you have the Times' digital operation, which is pushing to charge $10 per month for the iPad edition and is said to be up in arms over print circulation's pricing. The digital side will provide interactive content for the iPad no matter what happens, but does not want print circulation to have control of pricing, marketing and other facets of the product. It's something of an uphill battle since print circ has had control of other e-editions, for example for the Kindle, which are also seen on the digital side as overpriced.

The dispute has apparently escalated all the way to the top of the Times Building, and top executives — presumably the same ones who secretly dined with Apple CEO Steve Jobs — are now debating which way to go. Among those supporting the $20-30 per month print circulation side is, we're told, New York Times Media Group president Scott Heekin-Canedy.

Even by the standards of the old-fashioned Times, it would be shockingly retrograde to charge such a huge sum for internet content to protect the fading print edition. It would also be self defeating, exploding the paper's best chance yet to charge readers for its digital product. (Even at $10 per month, the iPad Times will have to compete with the free-through-2011 Web edition.)

But it's almost as shocking that the Times Company is having a discussion over this question at all. Really? You're going to ruin this little gift from Steve Jobs? You're still not sure if you're ready to commit to this internet thing? Sigh.

If you know more about this debate, or similar debates at other publishers, we'd love to hear from you.



In a number of business articles in The Times over the past year, and in posts on the DealBook blog on NYTimes.com, a Times reporter appears to have improperly appropriated wording and passages published by other news organizations.

The reporter, Zachery Kouwe, reused language from The Wall Street Journal, Reuters and other sources without attribution or acknowledgment.

The Times was alerted to the problem by editors at The Wall Street Journal. They pointed out extensive similarities between a Journal article, first published on The Journal’s Web site around 12:30 p.m. on Feb. 5, and a DealBook post published two hours later, as well as a related article published in The Times on Feb. 6.

Those articles described an agreement on an asset freeze for members of Bernard L. Madoff’s family, in a lawsuit filed by a court-appointed trustee. In the Times article and the DealBook post, several passages are repeated almost exactly from the Journal article.

A subsequent search by The Times found other cases of extensive overlap between passages in Mr. Kouwe’s articles and other news organizations’. (The search did not turn up any indications that the articles were inaccurate.)

Copying language directly from other news organizations without providing attribution — even if the facts are independently verified — is a serious violation of Times policy and basic journalistic standards. It should not have occurred. The matter remains under investigation by The Times, which will take appropriate action consistent with our standards to protect the integrity of our journalism.

Cheating Aided by Class File Sharing: Assignments Shared Online
Alison Loughman

Tech-savvy students may have more creative ways to cheat in class — but technology could also catch them in the act.

Stanford University recently found a trend toward cheating in computer science classes.

Though data for the University shows no overwhelming occurrence of cheating in one college, the Terry College of Business’s Management Information Systems department has seen sizeable numbers of honesty code violators over the past few years.

During the 2008-2009 school year, 16 MIST students were referred for possible dishonesty out of 39 from Terry.

However, many of these students were from the introductory MIST course required for all students in Terry. The cheating does not seem to come from that department, but the particular work done in the class — information systems created in computer programs that can be easily shared amongst students.

The reasons these infractions have been reported, however, may be because they are more easily noticed.

“The reason is it’s easier to detect in a technology course,” said Dale Goodhue, the department chair for MIST. “It becomes quite clear and very obvious and therefore a teacher or instructor can recognize it.”

It does not even take complicated algorithms to identify unauthorized file sharing amongst students.

“For example, a particular [file] that they’ve created was created at the exact same second as someone else’s,” Goodhue said. “That’s hard to believe.”

For teachers well-versed in technology, this is good news, but the technology gap between generations allows students to cheat in ways some professors may not consider.

Caroline Smith, a senior from Jonesboro who chairs the Student Academic Honesty Council, works to inform students about the consequences of cheating, but admits that even she does not understand newer technologies.

“When a student was explaining [an instance of cheating], I couldn’t even comprehend how they can do it,” Smith said. “It’s beyond my knowledge of technology. The younger generations know a lot more about technology.”

The temptation to copy and paste from the Internet and share information becomes greater as Internet access increases.

“We have Internet on our phones,” Smith said. “We have Internet on our laptops. We have the accessibility of Google, which you can search [for] anything and everything. It’s definitely an escape route, so instead of reading the entire book or the entire article, you can just go get the summary.”

The fight for academic honesty starts long before a violation is discovered. All students who apply to the University must agree to abide by the University’s academic honesty policies and the Student Academic Honesty Council reminds students about this during freshman orientation. Yet during crunch times, such as midterms and finals, ethics sometimes go out the window.

“People never think that they are going to get caught,” Smith said. “There’s a lot of pressure with the way that the economy is with students that want to keep HOPE and who want to keep their scholarship, that’s the only way they can.”

The Stanford study also found cheating allegations have doubled in the last decade. Although reports of academic dishonesty have also increased at the University in the past decade, Debbie Bell, the coordinator for academic honesty and student appeals, attributes this to the Student Academic Honesty Council’s policies and increased opportunities to check student work against databases of published work.

“The Georgia process is extremely good and a huge improvement over what most other universities have, which is basically an adversarial situation right off the bat,” Goodhue said.

Bell, in turn, praised MIST instructors and professors for being explicit with their students about academic ethics, which is especially important in larger lecture classes where students get less one-on-one time to ask questions.

“They really do a good job of explaining when it’s okay to talk about a problem, work it out with other people, and when you might be crossing a line as far as sitting down and completing your project,” Bell said.

SF Court: Use File Sharing Programs, Kiss Your Privacy Goodbye
Bay City News

Computer users who sign up for peer-to-peer file-sharing programs don't have a privacy right to be shielded from FBI probes, according to a federal appeals court ruling in San Francisco today.

The 9th U.S. Circuit Court of Appeals upheld the child pornography possession conviction of a Nevada man who was prosecuted after an FBI agent found he was sharing pornography files on the Internet.

The defendant, Charles Borowy, participated in LimeWire, a popular file-sharing program. LimeWire, established in New York 10 years ago, says it has 70 million users per month.
LimeWire has a privacy feature, but Borowy had not installed it.

An FBI agent who was monitoring child pornography trafficking in 2007 conducted a keyword search using the term "Lolitaguy," a phrase that according to the FBI is known to be associated with child pornography.

Agent Byron Mitchell downloaded four child pornography files from Borowy's Internet address.

Investigators then obtained a search warrant and found a total of more than 600 images and videos of child pornography on Borowy's laptop computer, CDs and floppy disks.

Borowy pleaded guilty to possession of child pornography and was sentenced to three years and nine months in prison, but reserved his right to claim in an appeal that the initial keyword search of his files without a warrant violated his constitutional rights.

But the appeals court, citing a similar ruling issued two years ago, said Borowy's expectation of privacy "could not survive his decision to install and use file-sharing software, thereby opening his computer to anyone else with the same freely available program."

A three-judge panel also rejected Borowy's argument that he intended to have privacy because he had bought LimeWire's privacy feature.

The panel noted that Borowy failed to engage that feature and said he "was clearly aware that LimeWire was a file-sharing program that would allow the public at large to access files in his shared folder until he took steps to avoid it."

Police Push for Warrantless Searches of Cell Phones
Declan McCullagh

When Christian Taylor stopped by the Sprint store in Daly City, Calif., last November, he was planning to buy around 30 BlackBerry handhelds.

But a Sprint employee on the lookout for fraud grew suspicious about the address and other details relating to Taylor's company, "Hype Univercity," and called the police. Taylor was arrested on charges of felony identity fraud, his car was impounded, and his iPhone was confiscated and searched by police without a warrant.

A San Mateo County judge is scheduled to hear testimony on Thursday morning in this case, which could set new ground rules for when police can conduct warrantless searches of iPhones, laptops, and similarly capacious electronic gadgets.

This is an important legal question that remains unresolved: as our gadgets store more and more information about us, including our appointments, correspondence, and personal photos and videos, what rules should police investigators be required to follow? The Obama administration and many local prosecutors' answer is that warrantless searches are perfectly constitutional during arrests.

"There are very, very few cases involving smartphones," Chris Feasel, deputy district attorney for San Mateo County, said in an interview on Wednesday. "The law has not necessarily caught up to the technology."

Feasel said the county's position is that a search of a handheld device that takes place soon after an arrest is lawful. "It's an interesting issue that may decide the future of how courts handle these kinds of cases, especially smartphones and iPhones," he said.

Attorneys for the Electronic Frontier Foundation, the San Francisco civil liberties group that's representing Taylor, have asked the court to suppress any evidence obtained from the search of his iPhone. They say the search was "unconstitutional" because it was done without a warrant--and they say it also may have violated a 1986 federal law designed to protect the privacy of e-mail messages.

Privacy advocates say that long-standing legal rules allowing police to search suspects during an arrest--including looking through their wallets and pockets--should not apply to smartphones because the amount of material they store is so much greater and the risks of intrusive searches are so much higher. A 32GB iPhone 3GS, for instance, can hold approximately 220,000 copies of the unabridged text of Lewis Carroll's Alice's Adventures in Wonderland.

"Neither the search of (Taylor's) vehicle nor the search of his iPhone was justified by any exception to the warrant requirement," the EFF and its co-counsel, San Francisco attorney Randall Garteiser wrote in a brief filed earlier this month.

Sex photos drew federal lawsuit

Concerns about privacy are not merely hypothetical. In March 2008, Nathan Newhard was arrested on suspicion of drunken driving in Culpeper, Va., and his cell phone was seized. In the pictures folder of the cell phone were multiple pictures of Newhard and his then-girlfriend, Jessie Casella, nude in sexually compromising positions.

Newhard and Casella--at that point no longer a couple--filed separate civil rights lawsuits against Sgt. Matt Borders, who they said alerted the rest of the police department on the radio "that the private pictures were available for their viewing and enjoyment." Newhard claimed that, as a result of the incident, he was nonrecommended for continued employment with the Culpeper school system, where he had worked before the arrest.

A federal judge in Virginia last year agreed that the police conduct was "irresponsible, unprofessional, and reprehensible" but said that Culpeper police officers could not be held legally responsible because they did not violate any clearly established constitutional rights. In addition, the court pointed out, the Fourth Circuit Court of Appeals had ruled that "officers may retrieve text messages and other information from cell phones and pagers seized incident to an arrest" to preserve evidence.

The problem for EFF and its co-counsel in the San Mateo County case is that, while the U.S. Supreme Court has not taken up the issue, a number of other courts have reached similar conclusions. In 2007, the Fifth Circuit concluded that police were permitted to conduct a warrantless search for call records and text messages during an arrest. So did the Seventh Circuit in a 1996 case dealing with information from numeric pagers ("It is imperative that law enforcement officers have the authority to immediately 'search' or retrieve, incident to a valid arrest, information from a pager in order to prevent its destruction as evidence.")

"There's a very good case that the police, as awful as it sounds, should be able to go through the contents of this phone," said Adam Gershowitz, a professor at the South Texas College of Law who has written a paper on the topic. "Courts for the most part have held that a phone is like a container, a wallet or a purse."

Then again, does an iPhone or Nexus One really have that much in common with a numeric pager? "The Fourth Amendment requires a search to be reasonable," Gershowitz said. "At a certain point it just becomes so excessive as to be unreasonable, and we may be getting close to that point."

From pagers to iPhones

The Fourth Amendment to the U.S. Constitution, of course, prohibits "unreasonable" searches and seizures.

Warrantless searches generally violate the Fourth Amendment. But the Supreme Court has allowed an exception permitting warrantless searches at the time that someone is being arrested, on the grounds that police should be allowed to look for weapons or items that could be linked to an alleged crime. A second exception to the warrant requirement is a "booking search" that allows police to establish an inventory of the defendant's possessions.

The examination of Taylor's iPhone by the Daly City police department was a two-step process. After Taylor was taken to the prisoner processing center, Daly City detective Joseph Bocci conducted what prosecutors describe as a "limited search of the iPhone." Then, armed with a search warrant, Bocci completed an analysis of the phone's contents.

Meanwhile, Taylor's business seems to be languishing. The HypeUOnline.com blog, created after his arrest, features only three test posts. And the linked Twitter account features only a series of messages titled "2,218 New Followers Within 7 Days" and "Make Money On Twitter" that include links to a non-existent Web page. (Prosecutors say Taylor has prior convictions for forgery, fraud, and identity theft.)

Another reason why a search of Taylor's phone was constitutional, said Feasel, the deputy district attorney, is because "of the transitory nature of that information, because iPhones do present interesting issues with regards to e-mails, and because the iPhone with the 3.0 operating system does have a feature known as a remote wipe."

"The potential for destruction of evidence by a defendant further bolsters our argument regarding limited search incident to arrest," Feasel said.

There is a dispute about whether the iPhone was protected with a password. San Mateo County said in court papers that there is no evidence "that the iPhone was locked." Feasel said that if there had been a password, "there would need to be a search warrant."

EFF, on the other hand, says its client is positive that Bocci, the detective, "bypassed the password" on the iPhone. Jennifer Granick, an EFF attorney, says she plans to ask the officer about it during Thursday's hearing.

There are guides online showing how to do just that, including one titled "Defeating the iPhone Passcode." The technique works on both jail-broken and unaltered iPhones and involves overwriting an iPhone file that stores the password. A $29.99 Windows application called QuickPWN reportedly does the trick.

"If the government can look at a paper appointment book, why can't they look at a contact list on an iPhone?" said Orin Kerr, a law professor at George Washington University who has written extensively about electronic investigations. "Where I think things get much more difficult is searching through the phone using keyword searches."

A 2007 decision by a San Francisco federal judge, which CNET reported at the time, noted that "the line between cell phones and personal computers has grown increasingly blurry" and that the U.S. Department of Justice "asserted that officers could lawfully seize and search an arrestee's laptop computer as a warrantless search incident to arrest." The Obama Justice Department, in a series of prosecutions including one in Nebraska involving a crack cocaine dealer, has taken the same position about warrantless searches of cell phones.

"I think eventually courts will probably have a new rule" for smartphone searches, said Kerr, the George Washington law professor. "The question is, what the limit will be? You can imagine different possibilities. Maybe there's a time limitation. We just don't know. It's too early."

French Net Filtering Plan Moves Forward

The National Assembly adopted the Loppsi II domestic security bill Tuesday; it now goes to the Senate for a final vote
Peter Sayer

French lawmakers voted Tuesday to approve a draft law to filter Internet traffic, a measure the government says is intended to catch child pornographers. The bill will now go on for a second and final reading.

Critics of the catch-all "Bill on direction and planning for the performance of domestic security" say that filtering won't stop the spread of child pornography -- but could allow the government to censor other materials.

The bill, known as Loppsi II in French, was approved by 312 votes to 214 in a vote in the National Assembly on Tuesday. The government has a large majority in the Assembly; two of its deputies abstained, with the others all voting in favor of the bill.

The Senate, where the government also has a majority, will soon give the bill a second reading. If the Senate makes no amendments to the text, that will also be its final reading, as the government has declared the bill "urgent," a procedural move that reduces the usual cycle of four readings to two. Any disagreements between the two parliamentary chambers will be reconciled by a commission appointed by the government.

The bill is a mishmash of unrelated measures, boosting the amount the police spend on "security," multiplying penalties for counterfeiting checks or credit cards, increasing use of CCTV cameras, extending access to the police national DNA database and authorizing the seizure of vehicles driven without a license.

Among the measures dealing with the Internet, it seeks to criminalize online identity theft, allow police to tap Internet connections as well as phone lines during investigations, and target child pornography by ordering ISPs to filter Internet connections.

ISPs will be required to block access to any Internet address the authorities consider necessary to prevent distribution of child pornography.

Critics of the bill, while opposing the distribution of child pornography, say filtering is the wrong way to go about it.

In a report analyzing the economics of the child pornography business, journalist Fabrice Epelboin warned that filtering URLs will have no effect, as distributors of such materials are already using encrypted peer-to-peer systems to deliver their wares.

During the debate, Deputy Lionel Tardy cited a report from the French Federation of Telecommunications that said filtering would cost up to €140 million (US$190 million) yet remain largely ineffective against the main distribution channels for child pornography.

As if that weren't enough, others say that blocking sites suspected of hosting child pornography is likely to affect blameless sites at the same IP (Internet protocol) address, so-called "collateral damage."

Opposition deputies tried unsuccessfully to amend the bill to require blocking only of specific URLs or documents to avoid this problem. They also wanted a judge to review the list of blocked URLs each month to ensure that sites were not needlessly blocked, and to make the filters a temporary measure until their effectiveness was proven, but those amendments too were rejected by the government majority.

Once the filter system is in place, say its opponents, it could be used to limit access to other Internet sites.

President Nicolas Sarkozy is already thinking along those lines. In a speech to members of the French music and publishing industries in January, Sarkozy said that authorities should experiment with filtering in order to automatically remove all forms of piracy from the Internet.

Indonesia Looks to Block Offensive Internet Pages
Presi Mandari

Indonesia is considering proposals to block Internet sites that are deemed to violate "public decency" and privacy, provoking a barrage of criticism from bloggers and web users.

Fresh from a round of film and book bans, the government of President Susilo Bambang Yudhoyono is now turning its sights on the Internet in what critics say is a throwback to general Suharto's "New Order" dictatorship.

"Our main objective is very simple. We want to minimise the negative effects of the Internet," communication and information technology ministry spokesman Gatot Dewabrata told AFP, without explaining what effects these were.

"There are myriad violations by Internet users in Indonesia. We don't have any intention to move backward... but we don't want people to think that the government ignores matters like pornography on the Internet."

Yudhoyono backed a controversial anti-pornography law adopted by parliament in 2008 which criminalises an array of traditions unique to Indonesia's multicultural society, such as certain regional dances and costumes.

That law, which was passed despite widespread protests, was backed by conservative Muslim groups including the powerful Prosperous Justice Party (PKS), which traces its origins back to Egypt's outlawed Muslim Brotherhood.

The PKS now controls the communications ministry in the rainbow coalition government that was sworn in late last year after voters in the mainly Muslim country re-elected Yudhoyono to a second five-year term.

Almost 8,000 people have joined a Facebook group opposed to the planned Internet restrictions. Under certain provisions of the draft regulations, Facebook users or Facebook itself could be blocked.

The new rules would make it illegal to distribute or provide access to pornography or gambling services, anything that spreads religious hatred or threats, and any news deemed "misleading."

Web content which "humiliates the physical condition or abilities... of other parties" also could be blocked, along with anything which violates privacy by, for example, disclosing someone's educational background.

Complaints would be handled by a 30-member team comprised of officials and independent experts.

The new regulations, which could be in force within months, will take the form of a decree from Communications Minister Tifatul Sembiring, the PKS leader, based on existing communications laws.

Facebook user Don Ivano wrote on the social networking site: "The draft is an inflexible, authoritarian legal product which imprisons democratic principles. It clearly means we will go back to the New Order regime".

Another Facebook user, Titiw Akmar, commented: "That's the impact of having a minister from the PKS".

Dewabrata dismissed concerns that freedoms of speech deemed fundamental to Indonesia's post-Suharto democratic reforms were being rolled back.

"It's not a censorship body. We'll only respond to public complaints and they'll go through a lengthy process before they're acted on," he said.

Indonesia's censorship board recently banned Australian movie "Balibo," which depicts alleged war crimes by Indonesian forces in East Timor, as well as several books dealing with sensitive historical and political subjects.

Its blasphemy law has been used by Muslim groups to silence critics and intimidate followers of minority faiths, while defamation remains a criminal offence instead of a civil one as it is in most democratic countries.

Yudhoyono recently hit back at protesters who stuck his picture on a water buffalo and led it through central Jakarta, saying he did not appreciate being told he was "big, slow and stupid like a buffalo".

"Do you think this is an expression of freedom?" he asked reporters.

Switzerland Pursues Violent Games Ban

Possibility of stricter measures after resolution passed restricting sale to minors
Ben Parfitt

With violent games currently causing a stir in Australia, closer to home it has emerged that Switzerland is now considering banning violent video games outright in the territory.

A resolution restricting the sale of mature games to minors has already been passed unopposed, according to Gamesmarkt, and will be now be presented in parliament.

It illegalises the purchase of any game not carrying a PEGI age rating and requires stricter rules on the requirements of ID, although both of these measures had previously been voluntarily introduced by retailers late last year.

However, more worrying is a second resolution that was passed – albeit with a split vote of nine-to-three – that could lead to an outright ban of violent and adult titles in the country.

The Swiss Law Commission is currently inviting input on the issue from retail and industry bodies before this also heads to government.

95 per cent of Swiss games retailers are in favour of a form of self-regulation and voluntary restrictions – but as has been seen elsewhere, it is expected that some will campaign for an outright ban.

Operation Titstorm Hits the Streets
Liz Tay

Operation Titstorm will hit the streets of Australian cities in a "peaceful protest" against mandatory internet censorship this Saturday.

Dubbed 'Project Freeweb', the protest is organised by members of hacker group Anonymous, which took credit for last week's prolonged DDoS attack on Australian Government websites.

Events are planned in Sydney, Melbourne, Perth, Brisbane, Adelaide, Newcastle and Canberra at various times on 20 February. More than ten members of Anonymous are expected to attend each event.

However, organisers expect that a majority of the protest will take place overseas. Anonymous members have been urged to lead protests at Australian embassies around the world.

"We wish to oppose this filter because we're not only representing Australia, but the world," a Project Freeweb organiser who goes by the alias 'Infinite' told iTnews.

"If passed, this legislation will set a disturbing precedent at an international level.

"The public, not the Government, should have the right to decide what is deemed appropriate for you or your family to be exposed to."

'Infinite' hoped that Project Freeweb would have more of a 'long term' effect on public perception of the filter than Operation Titstorm, which was criticised for harming more moderate efforts to campaign against internet censorship.

"Many of our number are productive, intelligent members of society," said Infinite, who is a Web designer.

"Some of the members of Anonymous, while feeling that the motivations behind Operation Titstorm were understandable and to a certain extent warranted, also felt that it cast a bad light upon the group as a whole."

Protesters have been instructed to study background information on Senator Conroy's filter plans and ACMA, and have been told not to wear masks.

While Anonymous members may be risking their post-Titstorm anonymity by appearing at the protests, 'Infinite' said that being involved in one event did not necessarily mean the individual was involved in the other.

Those involved in the DDoS attacks had taken precautions to ensure their anonymity, and many were not residents of Australia, he said.

To critics of Operation Titstorm, he said: "Anonymous understands their frustration, yet they fail to comprehend that one of the most important creations in the history of mankind is about to fall into the control of the government. And that must not happen.

"The internet must be protected at all costs. This is more than an opposition to the censorship of porn, this is the protection of our rights as human beings ... to have control over what we should be allowed to view and not have to fear a draconian censor."

ALIA Join Forces with Inspire Foundation, Google and Yahoo to Battle Senator Conroy's Internet Filter
Justin Robinson

Senator Conroy's internet filter has been the cause of much news and action from local residents and the world at large, most recently sparking attacks on government websites.

The filter itself seems mostly incomplete, and while it does filter bad websites it can also block access to content that is otherwise legal - but it doesn't block the worst material.

The Australian Library and Information Association (ALIA) have teamed with the Inspire Foundation and both large search engines Google and Yahoo!, who have jointly released a statement to Senator Conroy regarding the internet filter.

This is a great sign that large companies are standing up to take notice of the problem, and the following statement may actually get some positive attention:

We, the Australian Library and Information Association, Google, Inspire Foundation and Yahoo! agree that Australia needs to take effective action to ensure that internet users, and particularly children, have a safe experience online.

In December 2009, Minister Stephen Conroy announced the details of the government's proposals for mandatory filtering by ISPs of online content in the Refused Classification (RC) category. We welcome the Minister's invitation for consultations on the proposed policy.

Mandatory filtering of RC material is a significant Australian public policy proposal that should matter to every parent, young person, school and business. A discussion designed to achieve the balance between protecting children, preserving the benefits of internet access and treating adults like adults is welcome.

As a large proportion of child sexual abuse content is not found on public websites, but in chat-rooms or peer-to-peer networks, we know the proposed filtering regime will not effectively protect children from this objectionable material.

In fact, the policy may give parents a 'false sense of security' encouraging them to reduce their supervision.

We are concerned that the scope of content to be filtered is too wide. Filtering all RC material could block content with a strong social or educational value.

The implementation of mandatory filtering is a massive technical and logistical undertaking. We note with concern that the ISP filtering pilot/trials, and the related report from Enex Testlabs, both of which were relied on in the formulation of the filtering policy, by the government did not follow the Department of Broadband, Communications and the Digital Economy's own 2008 Technical Testing Framework.

The Enex report, and a separate report from Telstra, acknowledged that filtering systems would struggle to handle the filtering of high volume sites, with the Enex report stating: ".... in situations where there is a potential for very high traffic sites, such as YouTube, to have pages on the filtering list, this could result in significantly higher traffic rates passing through the filter, even though the specific pages being accessed are not those on the blacklist. This could cause additional load on the filtering infrastructure and subsequent performance bottlenecks".

According to a large body of peer-reviewed research on the matter the most effective way to protect our children on the internet is achieved by adopting a strategy containing the following three Core Principles:

Education: Properly funding a national comprehensive cyber-safety education program for children and parents on how to avoid inappropriate material and stay safe online. If any element of online safety is to be mandatory, it should be education.

Policing: Significantly increasing and funding the level of oversight by the government and federal police focused on the locations, such peer-to-peer, where child sexual abuse materials are disseminated.

Technical Measures: If the government and the broader political system are determined to implement technical measures as part of online safety efforts, then we believe Australia can learn from the approaches adopted in peer countries, particularly in Europe. The strong consensus internationally is for ISPs, police and government to work together in partnership targeting a clearly defined and narrow band of child sexual abuse material. Under this filtering regime:

* there would be little to no impact on the internet's performance or greatly increased costs to users;
* there would be an environment in which adults are able to choose whether to have their service filtered or not.

We urge further adjustments to the government's proposal in the interest improving online safety for young people and look forward to working with the government to that end.

Google Gives $2 Million to Wikipedia
Sarmad Ali

Wikimedia Foundation, owner of Wikipedia, said Wednesday that Google has donated $2 million to further develop the popular encyclopedia and other projects.

Jimmy Wales, Wikipedia’s founder, broke the news on Twitter Tuesday, followed by a formal announcement from the nonprofit organization.

Google co-founder Sergey Brin, in a statement, called Wikipedia “one of the greatest triumphs of the Internet…this vast repository of community-generated content is an invaluable resource to anyone who is online.”

The search giant’s funds will be used on technology projects to help Wikipedia handle its increasing bandwidth and multimedia needs.

Wikimedia currently relies on two data centers, one in Florida and another in Amsterdam, with bandwidth services donated by a Dutch company. “Considering the rise of server traffic from outside of Europe and the U.S., it’s become important for us to look at expanding our data centers in new locations,” said Jay Walsh, Wikimedia’s spokesman.

Mr. Walsh said that the grant could also help the foundation’s outreach activities, which are aimed at increasing contributions from subject-matter experts, students and academics, as well as developing better teaching and learning tools.

Wikimedia received more than $8 million in donations during a January fund-raiser, three-fourths of its revenue target for the fiscal year.

Turning Patents Into ‘Invention Capital’
Steve Lohr

Nathan Myhrvold wants to shake up the marketplace for ideas. His mission and the activities of the company he heads, Intellectual Ventures, a secretive $5 billion investment firm that has scooped up 30,000 patents, inspire admiration and angst.

Admirers of Mr. Myhrvold, the scientist who led Microsoft’s technology development in the 1990s, see an innovator seeking to elevate the economic role and financial rewards for inventors whose patented ideas are often used without compensation by big technology companies. His detractors see a cynical operator deploying his bulging patent trove as a powerful bargaining chip, along with the implied threat of costly litigation, to prod high-tech companies to pay him lucrative fees. They call his company “Intellectual Vultures.”

White hat or black hat, Intellectual Ventures is growing rapidly and becoming a major force in the marketplace for intellectual capital. Its rise comes as Congress is considering legislation, championed by large technology companies, that would make it more difficult for patent holders to win large damage awards in court — changes that Mr. Myhrvold has opposed in Congressional testimony and that his company has lobbied against.

Intellectual Ventures spent more than $1 million on lobbying last year, according to public filings compiled by OpenSecrets.org. In the three most recent election cycles — 2006, 2008 and 2010 — Intellectual Ventures executives, led by Mr. Myhrvold, have contributed more than $1 million to Democratic and Republican candidates and committees.

Mr. Myhrvold makes no apology for playing hard under the current patent system. If his company is going to help change things, it must be a force to be reckoned with. “We have to be successful,” he said.

The issues surrounding Intellectual Ventures, viewed broadly, are the ground rules and incentives for innovation. “How this plays out will be crucial to the American economy,” said Josh Lerner, an economist and patent expert at the Harvard Business School.

Mr. Myhrvold certainly thinks so. He says he is trying to build a robust, efficient market for “invention capital,” much as private equity and venture capital developed in recent decades. “They started from nothing, were deeply misunderstood and were trashed by people threatened by new business models,” he said in his offices here.

Mr. Myhrvold presents his case at length in a 7,000-word article published on Thursday in the Harvard Business Review. “If we and firms like us succeed,” he writes, “the invention capital system will turbocharge technological progress, create many more new businesses, and change the world for the better.”

In the article and in conversation, Mr. Myhrvold describes the patent world as a vastly underdeveloped market, starved for private capital and too dependent on federal financing for universities and government agencies, which is mainly aimed at scientific discovery anyway. Eventually, he foresees patents being valued as a separate asset class, like real estate or securities.

His antagonists, he says, are the “cozy oligarchy” of big technology companies like I.B.M., Hewlett-Packard and others that typically reach cross-licensing agreements with each other, and then refuse to deal with or acknowledge the work of inventors or smaller companies.

Ignoring the patents of others is “deeply ingrained in parts of certain industries,” he writes in the article, “most notably software, computing and other Internet-related sectors.”

Large technology companies complain about patent suits but, Mr. Myhrvold says, their actions often invite litigation. “The attitude of the big guys has been that unless you sue me or threaten to sue me, get lost,” he said in the interview. “I know, I was one of those guys.” Indeed, Mr. Myhrvold, 50, supplied his considerable brain power to Microsoft for 13 years, serving as chief technology officer until 2000.

Mr. Myhrvold personifies the term polymath. He is a prolific patent producer himself, with more than 100 held or applied for. He earned his Ph.D. in physics from Princeton and did postdoctorate research on quantum field theory under Stephen Hawking, before founding a start-up that Microsoft acquired.

He is an accomplished French chef, who has also won a national barbecue contest in Tennessee. He is an avid wildlife photographer, and he has dabbled in paleontology, working on research projects digging for dinosaur remains in the Rockies.

His Intellectual Ventures is not simply a patent hedge fund. Its 650 employees include scientists and engineers, and it has an in-house invention effort and lab that last year applied for 450 patents. To date, the company has paid $315 million to individual inventors.

He calls patents “the next software,” noting that software did not become a market on its own until the 1980s, spurred by innovators and the enforcement of intellectual property laws. “I’m trying to get inventions that kind of respect as an economic entity,” he said.

Yet while Mr. Myhrvold is saying one thing, his company’s main activity is quite another, according to Mark Bohannon, general counsel and senior vice president for public policy for the Software and Information Industry Association.

Intellectual Ventures, Mr. Bohannon says, is the largest of the category of firms that hold patents, but do not make products. Lawyers call such firms nonpracticing entities, NPEs, though they are often labeled as patent trolls. “Our concern is that it games the patent litigation system so it can extract licensing fees and investments from technology companies that create jobs, innovate and make products,” said Mr. Bohannon, whose trade association includes I.B.M., Google, Oracle, SAP and Adobe.

Several analysts say that Intellectual Ventures has been primarily a master practitioner of exploiting the current rules of the game to its advantage. Many companies in the patent field use shell companies to mask their activities, and Intellectual Ventures seems to employ them with uncommon frequency. A report last month by Avancept, an intellectual property consulting firm, said that up to 1,110 shell companies and affiliated entities appear to be linked to Intellectual Ventures. The secrecy, said Thomas Ewing, principal consultant for Avancept, makes it “far more difficult to confidently negotiate with Intellectual Ventures.”

Intellectual Ventures, founded in 2000, began operating in 2003. It says it has returned $1 billion to investors and collected more than $1 billion in license fees to date. Most of the revenue has apparently come from 16 so-called strategic investors — big companies that pay to license patent rights and get a stake in an Intellectual Ventures fund.

The companies must sign strict nondisclosure agreements to even talk with Intellectual Ventures. Only Microsoft has publicly stated that it is one of the group. In 2008, The Wall Street Journal reported that Verizon Communications had agreed to pay Intellectual Ventures $350 million. Other companies that have agreed to sizable payments to Intellectual Ventures include Intel, Nokia and Sony, according to people told of deals. And Intellectual Ventures has sought deals with others, including I.B.M. and Amazon, so far without success, say people informed of the talks.

Intellectual Ventures’ penchant for secrecy, Mr. Myhrvold says, is partly a legacy from its early days as an upstart when it did not want to tip its hand. Personally, he says he advocates not only the public disclosure of patents but also license agreements, but he will not give up the competitive edge of secrecy unilaterally. “If everybody in the industry does it, I’ll be right there,” Mr. Myhrvold said.

U.S., Israel Reach Intellectual Property Deal after 10 Years
Ora Coren

Israel has reached an agreement with the United States over intellectual property rights, after a decade of disagreement. Industry, Trade and Labor Minister Benjamin Ben-Eliezer said yesterday that the two countries have reached an understanding which will remove Israel from the blacklist of nations that violate intellectual property rights.

The agreement states that Israeli laws on pharmaceuticals will be changed - to the disadvantage of generic drug makers, such as Teva Pharmaceuticals. Among other changes, the generic firms will be denied access to information presented to the Health Ministry for licensing patented drugs in Israel. In practice, the changes will lengthen the patent protection for drugs by a year or two.

Once the legislative changes are made, the United States has committed itself to actively support Israel's acceptance into the Organization for Economic Co-operation and Development, as the issue was one of the major disputes holding up Israel's entry into the OECD.

"Avatar" Still Dominant at Overseas Box Office
Frank Segers

In its ninth round on the foreign circuit, "Avatar" defiantly stared down the overseas openings of three films from major studios, emerging as No. 1 for the weekend with $59 million.

Director James Cameron's blockbuster 3D feature pushed its record-setting overseas gross to $1.69 billion, and its unprecedented worldwide gross to $2.35 billion. The 20th Century Fox release, playing on 8,453 screens in 71 markets, was the sole holdover in the weekend's top five titles.

No. 2 for the weekend was Warner Bros.' "Valentine's Day," which kicked off its foreign run at 4,562 venues in 52 markets for a weekend tally of $30.4 million. The Garry Marshall-directed romantic comedy, with an ensemble cast including Ashton Kutcher and Jennifer Garner, opened strongest in Australia (No. 1 with $6.4 million from 373 sites), the U.K. (No. 2 with $4.7 million from 432 spots) and Germany ($2.5 million from 410 sites).

No. 3 was Fox's adventure fantasy "Percy Jackson & the Olympians: The Lightning Thief," director Chris Columbus' adaptation of the popular book series by Rick Riordan. Opening round produced $28 million from 5,800 venues in 40 territories.

Finishing fourth was Universal's "The Wolfman," which collected an estimated $21 million from 4,222 situations in 37 territories. Director Joe Johnston's update (starring Benicio Del Toro, Anthony Hopkins and Emily Blunt) of the classic 1941 Universal horror title (starring Lon Chaney Jr., Bela Lugosi and Maria Ouspenskaya) opened at No. 3 in the U.K. ($3.4 million) and No. 1 in Mexico ($3.2 million).

No. 5 was Fox's "My Name Is Khan," a 9/11-related drama about a Mumbai Muslim (played by Bollywood's Shah Rukh Khan) with Asperger's syndrome. The English-language and Hindi Indian production opened at No. 1 in India ($9.2 million from 1,450 screens) and generated an overall weekend tally of $14.2 million from 1,572 screens in seven markets.

Disney's "The Princes and the Frog" grossed an animated $11.3 million from 3,643 locations in 39 markets, hoisting its overseas total past the $100 million mark ($109 million).

How to Play HD Video on a Netbook

Netbooks aren’t famed for their high-definition video playing prowess, but if you’ve got about $10 and a few minutes going spare, there is a way to enjoy high-definition trailers and videos on your Atom-powered portable.

You’ll need two things: a copy of Media Player Classic Home Cinema, and CoreCodec’s CoreAVC codec which you can purchase for the princely sum of $9.95.

Actually, we lied, you’ll need three things. You’ll also need some HD videos encoded in AVC or h.264 formats too. We downloaded the free animation, Big Buck Bunny, for our testing. We downloaded the 1080P h.264 version - be warned though, it’s a hefty 692MB download, so you may want to go and have a cup of tea or five if your internet connection is on the slow side. Alternatively, any high-definition h.264 movie trailer lurking on the internet will do just fine.

Windows 7 might already have h.264 support built in as standard, but try playing back HD content in Media Player and it’s unwatchably jerky. If you’re on Windows XP you can try watching HD videos with Media Player Classic’s built-in h.264 codec, but it too struggles to keep the video playing back smoothly; the sound drifting out of sync with the on-screen action as the Atom processor struggles to keep up.

Bringing HD home

It doesn’t matter whether your netbook is running Windows XP Home or Windows 7, but first you’ll need to install CoreAVC. You can untick Haali’s Media Splitter during the install process, just the codec itself will do just fine.

Once CoreAVC is installed, go to the CoreCodec directory that’s appeared in your Start menu and select the Configure CoreAVC entry. Set Deblocking to Skip always, Deinterlacing to None and click OK.

The next step is to run Media Player Classic Home Cinema. Select Options from the View dropdown menu and click the External Filters tab. Click the Add Filter… button at the top right of the window and double-click CoreAVC Video Decoder from the list. Make sure the Prefer option is ticked.

Now select Output in the Options menu and make sure that the DirectShow Video is set to EVR. Click OK, and close Media Player Classic to make sure the settings are applied.

Open up the 1080P version of Big Buck Bunny now and, surprise surprise, you’ll find it’s watchable all the way through. There is the odd stutter here and there, and a little visual tearing where the Atom processor can’t quite keep the framerate perfectly smooth, but, crucially, the audio soundtrack doesn’t lose sync anymore. A netbook playing HD video? Well, we never thought we’d see the day.

Admittedly, though, even CoreAVC can’t turn a netbook into an HD devouring media beast. Several of our higher bitrate 1080P videos proved too much for the Atom processor, and more demanding scenes in 720P videos also suffered from a hint of stutter here and there. And, of course, CoreAVC can’t do anything about online HD content from Youtube and iPlayer. But all in all, we’re pretty impressed. HD or no HD, we know which we’d prefer!

And if you’re concerned what HD playback is going to do your netbook’s battery life, you might just be pleasantly surprised. We took one of the latest Pine Trail netbooks lying around the PC Pro office and with screen brightness set to maximum and 802.11n enabled, found that 90 minutes of looping a 720P trailer only sapped about 25% of our battery. Turn off wireless and drop the brightness a little and you’d probably be able to get through 3 or 4 movies before running out of juice: perfect for those boring, long-haul flights.

Local TV for Devices on the Move
Eric A. Taub

Who has time to sit on the couch and watch TV anymore? In the last 10 years, broadcasters have lost 25 percent of their audience. So to win back some viewers, the industry has a plan to grab their attention while they are on the move.

Beginning in April, eight television stations in Washington, D.C., will broadcast a signal for a new class of devices that can show programming, even in a car at high speed. In all, 30 stations in Atlanta, Chicago, Los Angeles, Seattle and Washington have installed the necessary equipment, at a cost of $75,000 to $150,000.

“Younger generations want programming on the go,” said Dennis Wharton, a spokesman for the National Association of Broadcasters. “To access TV on a cellphone, on a laptop or in the car is a game changer for local broadcasters. It will provide a renaissance for over-the-air broadcast TV.”

If enough people watch using the mobile TV technology, known, for lack of a more marketable name, as “ATSC Mobile DTV Standard,” local stations will be able to charge more for commercials and increase their revenue.

Getting a signal on a portable TV was not always a challenge. When analog television was the nation’s standard, a small set could pick up a signal at the ballpark, at the beach or in the car, though viewers often put up with a fuzzy, ghost-filled image.

But digital TV, the standard that went into effect last year, was developed for stationary televisions.

The mobile devices must catch a special signal, a slice of the broadcast frequency, and software processes it to display a clear picture on the go.

The technology will be used on new portable televisions with up to 10-inch screens, and smartphones and laptops with special adapters will also receive the signals. The devices must be within about 60 miles of a broadcast tower for a picture as clear as the television at home.

The first devices will become available in April. They include a $249 TV-DVD player from LG; a $120 device the size of a cigarette box from Valups, a Korean set-top box maker, that retransmits a mobile signal to an iPhone, iPod or BlackBerry over Wi-Fi; PC dongles and set-top boxes for automobiles from iMovee; and a $149 iPhone/iPod mobile TV cradle from Cydle.

Once the signals are switched on and the devices gain in popularity, broadcasters may add specialty channels like sports and weather, offering more revenue opportunities.

The Mobile DTV standard also allows for two-way communication. When viewing an ad, a viewer may push a button to see more information or have it sent by e-mail. The system can also be used for voting, polling and audience measurement.

Mobile TV devices with GPS function could also feed location-specific ads so that, for example, an ad for a restaurant would appear only to someone nearby.

If Mobile DTV proves popular, it could threaten FLO TV, a subscription service developed by Qualcomm that offers programming from the four major commercial broadcast networks and Comedy Central, ESPN and others. To watch, subscribers must buy a $200 receiver or a compatible smartphone and pay $150 for a year’s subscription, or $200 for two years.

“Free mobile digital TV will be devastating to what is already a very small market for FLO TV,” said Richard Doherty, an analyst with the Envisioneering Group.

But FLO TV does not see it that way. It expects to sell its services as a premium add-on, much the way that consumers watch free TV and pay for cable services.

“There could be a ‘Best of FLO TV Channel’ that we’d sell bundled with free digital channels,” said Alice Kim, the company’s senior vice president of strategy.

Because FLO is aimed at the smartphone market, the broadcasters behind the mobile DTV effort are eager to see their service developed for cellphones, too. Samsung Electronics, one of the world’s largest makers of cellphones, is testing mobile TV in a modified Moment cellphone model to learn if the technology is a good business opportunity for wireless carriers.

“People don’t want to carry a separate video player,” said John Godfrey, vice president for government and public affairs at Samsung Electronics. “A mobile phone is the one essential device for consumers.”

Eyes-On With TI's Amazing 3D Phone Display
Sascha Segan

If you're going to watch Avatar on the move, why not watch it in 3D?

At the Mobile World Congress on Wednesday, TI showed off a tablet-sized device with a 3D display that doesn't require glasses, running on an existing TI OMAP3 chipset. The company also promised high-def, 3D movies with its new OMAP4 chips.

The 3D demo showed images and video in 3D by using a standard 120-Hz LCD with a special overlay film from 3M that can direct images either towards your left or right eye. By flickering two images very quickly – running at 60 frames per second rather than the usual 30 – the display transmits a different picture to each eye, creating a simulated 3D image. Still images looked good to me, with some depth, though movies weren't quite as convincing.

The 3D picture can be created using a handheld with dual 3-megapixel cameras and an 800-MHz TI OMAP 3630 chipset, which are all components that are available today. At any time, the display can switch back to 2D. And it doesn't require glasses – though at the cost, clearly, of really convincing 3D video.

This is only the start of 3D for TI, OMAP platform marketing manager Brian Carlson said. The new OMAP4 chipset announced at this show supports "dual 720p," which lets you display real, high-def 3D movies and send them over an HDMI cable to a TV. With dual cameras on the front of OMAP4 phones, TI will be able to record 3D images as well.

If you want to watch an ordinary 2D image, you can do it in 1080p high definition resolution with OMAP4, Carlson said.

"Anything that comes out of Hollywood will end up on your mobile phone," Carlson said.

2010: The Year AACS and HDMI Kill Off Component Video
Clint DeBoer

Bye bye component video

Digital HD (high definition), like that enabled through HDMI and Blu-ray, is awesome. It offers amazing picture and audio quality. It allows you to conveniently connect one single cable to provide both picture and sound. It is royally going to screw up a lot of homes next year. Wait, what was that last part?

After December 31, 2010, manufacturers will not be "allowed" introduce new hardware with component video outputs supplying more than an SD resolution (480i or 576i). If the manufacturer has existing models in its line-up, it will be able to continue selling that model until the end of 2013.

The AACS licensing authority, in its "Final Adopter Agreement," plans to enforce a provision that forces consumer electronics companies that make Blu-ray players (and any other AACS devices) to eliminate analog video. This has been referred to as the “Analog Sunset,” where the analog ports on Blu-ray players will be phased out entirely. Should this go through as planned, it's going to disable or throw a wrench in a lot of existing custom installations as soon as the end of this year. To say that this is going to wreak havoc on the installation market is an understatement.

Lest you think that this won't affect existing players, note that after January 1, 2011, the manufacturers of Blu-ray discs will be able (at their option) to insert an Image Constraint Token into any Blu-ray disc. This is a sort of "digital flag" that will turn off the high-definition component video output in the player (effectively turning it into a low-resoluton 480i/576i output). The goal is to make sure that all high-definition video will only be made possible through "secure" digital connections like HDMI.

AACS is really hosing the legitimate consumer with this change. They will turn upside down those users who have earlier pre-HDMI custom installations, forcing them into alternative (and expensive) connectivity options or causing them other costs that they would otherwise have not needed to incur - just to get them back to where they were in 2010. Add to this the complete conundrum companies like Kaleidescape will face as they continue their MPAA-thwarted attempts to expand their business model. We've even read stories about Hollywood-based mastering engineers having to use Slysoft AnyDVD HD software in order to circumvent AACS and BD+ restrictions just to get their work done.

In short, the studios in Hollywood don't care about you, logic, or making money. Well, actually they care a LOT about making money, however they are too thick to read the signs presented by the music industry and therefore are missing some of the greatest opportunities to encourage actual sales of DVDs and Blu-ray discs. People want to be able to copy and stream their home movies legally. The trouble is, when a company like RealDVD comes along to present a solution, the studios pull out the lawyers and kill it.

Well, congratulations for at least keeping a perfect record... of short-sighted, poorly thought out business decisions.

Decoding the Actual AACS Provisions

The actual AACS provisions are fairly clear and understandable, leaving little wriggle room for those manufacturers facing these upcoming dates. The first (below) sets the end of 2010 as the final time period for producing (manufacturing) a player that has analogue outputs above interlaced standard definition. This isn't even 480p, they actually specified interlaced SD output. Analog Sunset – 2010. With the exception of Existing Models, any Licensed Player manufactured after December 31, 2010 shall limit analog video outputs for Decrypted AACS Content to SD Interlace Modes [composite video, s-video, 480i component video and 576i video] only.

The next provision is incrementally worse, since it completely does away with analogue outputs entirely. Analog Sunset – 2013. No Licensed Player that passes Decrypted AACS Content to analog video outputs may be manufactured or sold by Adopter after December 31, 2013.

We spoke with several manufacturers, who had differing opinions on what they would do when this sunset hit. One popular Blu-ray player manufacturer had this to say:

"We have not planned anything for the AACS sunset rules yet. Our current product development projects still have all analog video outputs - component, composite and S-Video. In case any new products do not make [it] into production in 2010, we will revise based on the then-current AACS rules. There are some rumors floating around that the deadline will be extended, but we are not betting on it. If the deadline stays, we probably will omit analog video altogether instead of limiting to SD interlaced. If all analog video outputs are omitted, at least we save the trouble and cost for analog copy protection."

What to Do If This Happens to You

For those who aren't using component video at all, this won't be a big deal. But if I were you I wouldn't sit on my laurels and laugh at those who are going to suffer this mandatory "upgrade". After all, they are ultimately keeping you, through similar restrictions, from legally copying content onto your portable devices except for the sanctioned procedures and files provided by some studios. Want to know why you can't (legally) rip and stream your Blu-ray discs over Sling? AACS and DRM are why.

In particular this is going to cause some serious growing pains for installers whose clients' systems are going to stop looking good overnight. And they'll hear about it - in spades. Many installers have, in the past, avoided HDMI because of technical issues associated with the format. It's unruly, more expensive to use, and downright clunky in terms of the speed of switching inputs and its reliability. If the installer did not take into account the possibility of a change in format, they may be facing a very unpleasant backlash from clients. Even those who did provide for HDMI will have to deal with clients who have been using the redundant component video connections simply because they were there.

If you are a consumer, or a custom installer who is dealing with a component-only wiring schema, you have several solutions at your disposal:

* Deploy a set of baluns, which use one or two Category 5e or 6 cables to carry HDMI over longer distances. These devices are typically capped by stand-alone boxes or wall plates which require power and convert to and from HDMI.
* As much as we hate to admit it, wireless HDMI may be a solution, if you can afford it, have no traffic going between the transmitter and receiver and the distance supports the limitations of the system. You're taking your life into your hands with these systems, but under controlled circumstances they can do just fine.
* Gefen, among other companies, also offers a system that uses coaxial cables and a hardware device on each end (baluns) to convert cable to and from coax. This can be done over a single coax (up to 1080i resolution) or over 5 coax cables for full resolution HDMI.

Keep your eyes peeled as manufacturers are trying very hard to combat the limitations of HDMI with solutions over power lines, coaxial cable, and even standard wireless networks. These may also provide solutions that will help alleviate a short-sighted or pre-HDMI installation.

Why This Sucks

We make no bones about calling out Hollywood studios on their ignorance, anti-market practices and general thick-headedness. These AACS rules are especially frustrating because they, like those FBI and anti-piracy warnings on discs, only affect users intending to legally copy software to a local hard drive. The AACS rules will have absolutely zero effect on actual piracy since the Blu-ray Disc's AACS/BD+ system has already been broken and spread far and wide across the Internet.

Anyone can copy a BD disc and play it back over analogue outputs.

You just can't do it legally. And there's the rub.

Sony Pulls Plug on OLED TV in Japan
Taiga Uranaka

Sony Corp has pulled the plug in Japan on sales of a next-generation flat TV due to sluggish demand, a setback for a product the company had trumpeted as a sign of its revival as an innovator.

Sony said it had stopped production of ultra-thin TVs using organic light-emitting diode (OLED) technology for Japan, just a little over 2 years since it launched its first set. It plans to keep selling the TVs in overseas markets, a spokesman said.

OLED displays use organic, or carbon-containing compounds that emit light when electricity is applied. They produce crisp images and do not need backlighting, making them slimmer and more energy-efficient than LCDs, the most popular type of flat TV.

Sony has aimed to become a leader in the technology and positioned the product as crucial in its drive to regain its reputation as an innovator after losing out to Apple Inc in portable music and Nintendo in video games.

"I want this world's first OLED TV to be the symbol of the revival of Sony's technological prowess. I want this to be the flag under which we charge forwards to turn the fortunes around," then president Ryoji Chubachi told a briefing in October 2007.

It is still technologically difficult to make large OLED panels and to produce them cheaply, limiting their potential as a mass-market product. Sony's only model is an 11-inch set sold for 200,000 yen ($2,222) in Japan, considerably smaller and more expensive than other flat TVs.

"As flat panel TVs are getting bigger and cheaper, hurdles for OLED models have become higher, at least in the short term," said Hisakazu Torii, vice president of Japanese TV market research at DisplaySearch.

Torii said the next big trend in the market will be 3D TVs and LCD TVs using light emitting diode backlights, and that mass adoption of TVs with OLED panels is some time off.

Sony said it would end sales of OLED TV in Japan when inventory runs out. It plans to continue putting money into research and development and production for North America, Europe and other overseas markets.

"We will continue to consider new products and applications including OLED TVs," Sony spokesman Shigenori Yoshida said.

Slow Shift

Sony was criticised for being slow in the industry's shift to flat panel displays from bulky cathode-ray tube sets a decade ago, and has been struggling to keep up with rivals in the race to develop ever bigger and cheaper flat TVs.

Competition will likely be just as tough in OLED TVs, analysts said.

OLED displays are used widely in mobile gadgets such as cell phone screens, and the top makers of those panels, which include South Korea's Samsung Mobile Display, will likely have some advantage in applying the technology to TVs.

"South Korean makers are aggressively working on small- and mid-sized OLED displays," said Kazuharu Miura, analyst at Daiwa Securities Capital Markets.

Sony did not disclose how many OLED TV sets it has sold. DisplaySearch said it estimates worldwide shipments of about 2,000 Sony OLED TVs in 2009.

Shares of Sony closed down 0.2 percent at 3,030 yen, underperforming a 0.2 percent rise in the benchmark Nikkei average.

(Reporting by Taiga Uranaka; Editing by Nathan Layne and Joseph Radford)

Lionel Jeffries, British Character Actor, Dies at 83
Bruce Weber

Edward Judd, Lionel Jeffries in First Men in the Moon, 1964

Lionel Jeffries, a mustachioed, bald-pated British character actor who excelled in rubber-faced comedic roles like Grandpa Potts in the musical fantasy adventure “Chitty Chitty Bang Bang,” and who directed “The Railway Children” and several other family-oriented films, died Friday. He was 83.

His agency, the Liz Hobbs Group, confirmed the death to The Associated Press without attributing a cause. The BBC said Mr. Jeffries died in a nursing home in Poole, in southern England.

Mr. Jeffries trained at the Royal Academy of Dramatic Arts and appeared in a number of stage roles, including Colonel Pickering in a 1987 Broadway production of “Pygmalion” that starred Peter O’Toole as Henry Higgins. But he is best known for his film work.

His specialties were ineptitude and exasperation; he played sputtering bumblers, impatient authority figures, Clouseau-like cops. He was an apoplectic ship’s captain in the Agatha Christie mystery “Murder Ahoy” (1964); he was a doofus of a secret agent in “The Spy With a Cold Nose” (1966); he was a bungling Scotland Yard inspector in “The Wrong Arm of the Law” (1963), with Peter Sellers; he was the amiably feckless King Pellinore in “Camelot” (1967). And though it was not a comic film, he used his facial flexibility and gift for hyperbolic expression as an especially seething and vengeful Marquis of Queensberry in “The Trials of Oscar Wilde” (1960).

Most indelibly, he played the loopy Grandpa Potts in “Chitty Chitty Bang Bang” (1968), the father of the eccentric inventor of the magical titular automobile, played by Dick Van Dyke, who was actually older than Mr. Jeffries. His signature moment is the singing of the traveling song “Posh!” while standing in an outhouse-size cabin that is being hauled over the ocean by a hot-air balloon.

Mr. Jeffries was known to abhor the turn in movies toward sexually permissive material after the 1950s, and the five films he directed were all family oriented. They included “The Amazing Mr. Blunden,” (1972), a ghost story involving time-traveling children; “Baxter!” (1973), about the breakdown of a teenage boy with a speech defect; “Wombling Free” (1977), a film version of an environmentally conscious children’s television show; and a partly animated fantasy, “The Water Babies” (1978).

His best-known and best-loved film, however, was his first, “The Railway Children” (1970), which he also wrote. An irresistibly heartwarming adaptation of the Edwardian children’s book by E. Nesbit, about a Yorkshire family living near a rail station in the early 20th century, it was ranked No. 66 by the British Film Institute on its list of the best British films of the 20th century.

Lionel Charles Jeffries was born in London on June 10, 1926. Before studying acting, he served in the military during World War II in Burma (now Myanmar), where the humidity, he said, was responsible for the loss of his hair. He was, he liked to say, the only bald student at the Royal Academy.

Mr. Jeffries’s survivors include his wife of 48 years, Eileen, and three children.

EMI Puts Abbey Road Studios Up for Sale
Bruce Orwall

Troubled music company EMI Group PLC is talking to potential buyers for Abbey Road Studios, the hallowed London facility where the Beatles did most of their recording, according to a person familiar with the matter.

The talks are the latest sign of distress at the world's No. 4 music business, which has floundered since being acquired in a 2007 leveraged buyout by private-equity firm Terra Firma Capital Partners Ltd.

Terra Firma is attempting to avoid default on a £950 million ($1.49 billion) loan backed by EMI Music, the company's struggling recorded-music business. It needs to raise more than £100 million from Terra Firma's investors to keep from defaulting on the Citigroup loan.

A sale of Abbey Road—which EMI hopes is worth tens of millions of pounds—wouldn't have any impact on that effort, a person familiar with the matter said. The transaction is too small to make a difference, and in any case wouldn't likely be completed in time to boost Terra Firma's latest fund-raising effort.

News of the potential sale was first reported by the Financial Times. A spokeswoman for EMI reached early Tuesday had no comment.

But the studio's sale would be interpreted as the latest sign of a fire-sale mentality at EMI. The studio was the home turf of EMI's most prominent act, the Beatles, who also used a crosswalk in front the site for its famous "Abbey Road" album cover—turning the studio into a tourist attraction that draws a steady flow of visitors each day. Dozens of other top acts, from Pink Floyd to Radiohead, have used the studio over the years.

The need for high-end recording studios has dropped off significantly in recent years as artists and producers have flocked to digital recording facilitated by computers. EMI believes much of the value at Abbey Road is in the studio's "brand," which it appears to be trying to exploit more vigorously. Abbey Road has recently been the setting for a television series featuring live performances from top acts. And the studio's Web site indicates that an online shop is launching soon.

Terra Firma's problems with EMI continue, meanwhile. In December, it sued Citigroup—which is owed more than £3 billion—over the bank's handling of the takeover deal. The suit was filed in U.S. District Court in New York City, but the two sides are now haggling over whether the case should be tried there or in London.

Court documents made public last week indicated that, as recently as three months ago,Terra Firma boss Guy Hands proposed a radical restructuring of the business that would have separated its volatile recorded-music arm from its stable music publishing business.

CBS Radio Blocks Streaming Outside Of U.S.

As of last Friday, CBS Radio has stopped streaming its terrestrial stations online outside of the U.S., presumably due to online royalty issues. All CBS stations, even News, Talk and Sports stations, are no longer available outside the States. If listeners outside the States attempt to listen online, they are given a message citing costs and regulations that now prevent the station from streaming.

CBS Radio VP of Communications Karen Mateo confirmed to FMQB that its stations are "not available outside of the U.S. at this time." Mateo added that "listeners outside the U.S. can access Last.fm where they can create endless personalized radio stations, watch videos, discover new artists, and learn more about their favorite musicians and events in their area."

New Free Music Sites Learn from Others' Mistakes
Ryan Nakashima

Two new companies are giving consumers a way to download songs for free by watching a few ads. The idea has been tried before but this time it appears it might work, because the startups have found advertisers that are willing to pay around $2 to have a moment of your time.

That means recording companies can get about as much compensation from the free services as they receive from a download on iTunes that costs the consumer $1.29.

"You pay for the song by paying attention to the advertiser," said Richard Nailling, CEO of FreeAllMusic.com, which launched an invitation-only test of its service in December. "It's a fair trade of attention for music."

Both Free All Music and another new free site, Guvera.com, have licensing deals with independent labels and two of the largest recording companies, Universal Music Group and EMI Group PLC. Fans of U2, Black Eyed Peas and Norah Jones should be happy. But admirers of Ke$ha or Sade, both with Sony Music labels, will be out of luck for now.

The new services come after years of falling CD sales. More people are consuming music online but spending far less for it.

In response, recording companies have been licensing songs to an array of Internet businesses that offer songs cheaply or for free - in the hope that these legitimate alternatives can keep people from turning to illegal downloads.

But some sites that allowed free listening on computers couldn't generate enough advertising revenue to cover their debts or pay royalties that were required every time someone played a song. One such site, imeem, was on the verge of collapse before it was bought last year by MySpace Music.

The new services have tried to come up with unique advertising packages so companies are willing to pay more. And they are putting the money toward offering downloads of songs that can be put on portable devices.

They also have made changes to deal with a problem that helped cause another free-download site, SpiralFrog, to croak last year. SpiralFrog irked users because its songs expired if people failed to log back on every few months to view more ads. Its songs also couldn't be played on iPods or iPhones.

Free All Music and Guvera let users play songs on any device. The users also don't have to deal with copy protection software that requires checking back in with the service. So-called digital rights management software is on the way out after Apple Inc. ditched the copy-protection technology in iTunes last April.

Free All Music and Guvera are privately funded and in a beta testing phase with just a few thousand users. Wannabe joiners must register and then clear a waiting list before getting invited. That lets the sites make sure there are enough advertisers to pay for the songs that will be downloaded.

The 46 advertisers that have signed up for Guvera's test in Australia are paying on average $4 per visitor, contributing $250,000 so far. As the service expands to the U.S. at the end of March, Guvera plans to add users in tandem with more advertisers.

"Everything's about a controlled, sort of old-school business model of: Build one product, find one customer, sell it. Then build two products, find two customers, and sell it," said Guvera's founder and CEO, Claes Loberg.

"If we have enough to support a million people, that's all we'll open the door to, even if we have 5 million sitting in the background waiting to get in."

Song royalties are paid per download, in the range of 70 percent of the retail price of a song. So advertising revenue should be able to cover what the track would have made if it were sold for $1.29 on iTunes.

"We are very satisfied with the business terms we've come to with both those companies," said David Ring, executive vice president of business development and business affairs for Universal Music Group's eLabs unit. "As long as there's fair compensation ... we ought to empower anybody with a good idea and a dynamic new service."

Free All Music is the easier to navigate of the two.

Users can type in search terms to find a song, or can pick one from a list of top hits by genre.

They then pick from a range of advertisers, including Coca-Cola Co. and Zappos.com, the shoe and apparel retailer now owned by Amazon.com Inc. Users watch one video ad featuring that brand. One click later, and the song downloads to the user's computer and can be transferred to a portable device. Users can download a maximum of five songs a week; the cap is reset every Tuesday.

Advertisers on Free All Music pay about $2 per song for the right to present users with one video ad. That's much higher than general ad rates online because the users have indicated they are inclined to hear from the company. Users must click again to start the download, and they're reminded who is providing the song.

Boston-based advertising agency Mullen, which is testing the Zappos ads on Free All Music, hopes the goodwill generated by paying for the music will carry over to the brand.

"We're giving them something they want," said a media planner at Mullen, Brenna Hanly. "Us giving that song can spark them to talk about it on Facebook and Twitter."

Anger Leads to Apology From Google About Buzz
Miguel Helft

Google moved quickly over the weekend to try to contain mounting criticism of Buzz, its social network, apologizing to users for features that were widely seen as endangering privacy and announcing product changes to address those concerns.

Todd Jackson, product manager for Gmail and Google Buzz, wrote in a blog post on Saturday that Google had decided to alter one of the most-criticized features in Buzz: the ready-made circle of friends the service provided to new users based on their most frequent e-mail and chat contacts in Gmail. Instead of automatically connecting people, Buzz will in the future merely suggest to new users a group of people they may want to follow or be followed by, he said.

Mr. Jackson, who said that the auto-follow feature had been intended to make it easy for people to get started on Buzz, acknowledged the criticism that was heaped on Google in the last few days.

“We’re very sorry for the concern we’ve caused and have been working hard ever since to improve things based on your feedback,” Mr. Jackson wrote. “We’ll continue to do so.”

The start-up process for Buzz, which Google introduced on Tuesday as its answer to Facebook and Twitter, drew angry responses on technology blogs and beyond, as users feared that the names of their e-mail correspondents would be publicly exposed. A first set of changes that Google announced on Thursday failed to quell the uproar.

Some critics said the latest modifications to Buzz, which is tightly coupled with Gmail, appeared to have addressed the most serious privacy concern.

“Turning off the auto-follow was a huge improvement,” Danny Sullivan, a longtime Google analyst and the editor of SearchEngineLand, said in an e-mail message.

But Marc Rotenberg, executive director of the Electronic Privacy Information Center, said his organization still intended to file a complaint with the Federal Trade Commission this week pending its review of Google’s changes.

“Even with these changes, there is still the concern that Gmail users are being driven into a social networking service that they didn’t sign up for,” Mr. Rotenberg said in an interview on Sunday.

The privacy concerns about Buzz, and Google’s rapid efforts to address its critics, echo episodes that have bedeviled other social networks, most notably Facebook. None of those events have slowed the growth of Facebook, which recently said it had reached more than 400 million users. Gmail has 176 million users, according to the research firm comScore.

“I think the privacy issues earlier this week with Buzz will blow over and not harm the product in the long term,” Mr. Sullivan said. But privacy will continue to haunt Google, he said, and many people will point to the release of Buzz as an overreach by Google and a reason that the company could not be trusted.

The change in the start-up process for new users of Buzz was the most significant of a series of modifications that Mr. Jackson announced on Saturday.

Google also said that it would create a new Buzz tab in Gmail’s settings page to allow users to hide Buzz from Gmail completely. The page gives users the option to disable Buzz, deleting their posts and removing their Google profile, which in many cases listed publicly their circle of contacts in Buzz. The new feature could address concerns that disabling Buzz and removing a public profile was a multistep process that confused many users and that some described as a game of whack-a-mole.

Google also will no longer automatically connect public Picasa albums and items shared on Google Reader, another feature that had been widely criticized by some users and privacy advocates.

In the next two weeks, existing Buzz users will be directed to the new start-up process to give them a “second chance to review and confirm” the people they are following, Mr. Jackson said.

The changes Google announced on Saturday will be carried out in the next few days.

While it is too early to gauge Buzz’s success, Google said tens of millions of people had tried the service in its first 48 hours.

Mr. Sullivan of SearchEngineLand said that the level of activity on Buzz appeared to be significant.

“I suspect Google might have a minor hit on its hands already,” he said.

Rogue PDFs Account for 80% of All Exploits, Says Researcher

Adobe's Reader wins 2009 hacker honors by a landslide, says ScanSafe
Gregg Keizer

Just hours before Adobe is slated to deliver the latest patches for its popular PDF viewer, a security firm announced that by its counting, malicious Reader documents made up 80% of all exploits at the end of 2009.

According to ScanSafe of San Bruno, Calif., vulnerabilities in Adobe's Reader and Acrobat applications were the most frequently targeted of any software during 2009, with hackers' PDF exploits growing throughout the year.

In the first quarter of 2009, malicious PDF files made up 56% of all exploits tracked by ScanSafe. That figure climbed above 60% in the second quarter, over 70% in the third and finished at 80% in the fourth quarter.

"PDF exploits are usually the first ones attempted by attackers," said Mary Landesman, a ScanSafe senior security researcher, referring to the multi-exploit hammering that hackers typically give visitors to malicious Web sites. "Attackers are choosing PDFs for a reason. It's not random. They're establishing a preference for Reader exploits."

Landesman, the author of ScanSafe's just-published annual threat report, said that attackers' preferences for PDF exploits were clearly demonstrated by the data. Exactly why hackers choose Adobe as their prime target is tougher to divine, however.

"Perhaps they are more successful," she said. "Or maybe it's because criminal attackers are human, too. We respond when we see a lot of people going after a particular product.... We all want to go after that product, too. In the attacker arena, they might be thinking, 'Gee, all these reports of Adobe Reader zero-days, maybe I should get in on them too.'"

She also called out the popularity of Reader as a big reason why hackers have pinned a bull's-eye on Adobe. "There's the ubiquitous factor," Landesman said. "PDF use is huge."

Contributing to Adobe's problem is a major increase in vulnerabilities. Landesman's searches of the Common Vulnerabilities and Exposures (CVE) database showed a rapid climb in reported bugs harbored within Adobe's products. In 2009, 107 Abode vulnerabilities were logged into CVE, nearly double the 58 added in 2008 and almost triple the 35 reported in 2006. "There's obviously a lot of activity [by researchers] trying to flush out vulnerabilities from Adobe's software," Landesman said.

"All of these things kind of converge," she added. "I'm not trying to bash Adobe.... Attackers are like electricity, they always follow the path of least resistance. For them, it's 'Tag, you're it,' and Adobe is the one now."

Just as Adobe has done many times itself, Landesman recommended that users disable JavasScript in Reader and Acrobat and steer clear of the Reader browser plug-in.

Later today, Adobe plans to patch several critical vulnerabilities in Reader and Acrobat for Windows, Mac and Linux.

As Landesman intimated, Adobe struggled to keep up with hackers last year. In 2009, Adobe patched four PDF vulnerabilities only after they had already been exploited; 2010 hasn't started out much better, with one PDF zero-day already on the books.

Virus has Breached 75,000 Computers: Study

A new type of computer virus is known to have breached almost 75,000 computers in 2,500 organizations around the world, including user accounts of popular social network websites, according Internet security firm NetWitness.

The latest virus -- known as "Kneber botnet" -- gathers login credentials to online financial systems, social networking sites and email systems from infested computers and reports the information back to hackers, NetWitness said in a statement.

A botnet is an army of infected computers that hackers can control from a central machine."

The company said the attack was first discovered in January during a routine deployment of NetWitness software.

Further investigation by the Herndon, Virginia-based software security firm revealed that many commercial and government systems were compromised, including 68,000 corporate login credentials and access to email systems, online banking sites, Yahoo, Hotmail and social networks such as Facebook.

"Conventional malware protection and signature-based intrusion detection systems are, by definition, inadequate for addressing Kneber or most other advanced threats," Chief Executive Amit Yoran said in a statement.

(Reporting by Sakthi Prasad in Bangalore; Editing by Eric Auchard in London)

‘Time Bomb’ May Have Destroyed 800 Norfolk City PCs
Brian Krebs

The City of Norfolk, Virginia is reeling from a massive computer meltdown in which an unidentified family of malicious code destroyed data on nearly 800 computers citywide. The incident is still under investigation, but city officials say the attack may have been the result of a computer time bomb planted in advance by an insider or employee and designed to trigger at a specific date.

Hap Cluff, director of the information technology department for the City of Norfolk, said the incident began on Feb. 9, and that the city has been working ever since to rebuild 784 PCs and laptops that were hit (the city manages roughly 4,500 systems total).

“We don’t believe it came in from the Internet. We don’t know how it got into our system,” Cluff said. “We speculate it could have been a ‘time bomb’ waiting until a date or time to trigger. Whatever it was, it essentially destroyed these machines.”

Cluff said the malicious software appears to have been designed to trash vital operating files in the Windows\System32 folder on the infected machines. Cluff said a healthy, functioning System32 directory weighs in at around 1.5GB, but the computers infected with this as-yet-unidentified malware had their System32 folders chopped down to around a third of that size, rendering them unbootable. Cluff added that city employees are urged to store their data on file servers, which were largely untouched by the attack, but he said employees who ignored that advice and stored important documents on affected desktop computers may have lost those files.

IT specialists for the city found that the system serving as the distribution point for the malware within the city’s network was a print server that handles printing jobs for Norfolk City Hall. However, an exact copy of the malware on that server may never be recovered, as city computer technicians quickly isolated and rebuilt the offending print server.

“Obviously, our first reaction was to shut it down and restore services, and at least initially we weren’t concerned about capturing [the malware] or setting it aside,” Cluff said.

Cluff said the city is treating the incident as a crime, and that it has notified the FBI. “We will be quarantining several PCs from various locations and tracking their chain of custody to assist in any forensics analysis,” he said.

Only those PCs that happen to have been “shut down” between 4:30 p.m. and 5:30 p.m. Tuesday, Feb. 9 were impacted by the attack, Cluff added. That’s in part because of the data destruction, but also because the malware also modified the “boot.ini” file, an essential file that tells the computer the location of the Windows operating system.

“This was the amount of time it took our network and security engineers from discovery to containment,” he said. “So all those employees who were being ‘green’….we now know who they are.’”

Probe Traces Google Attacks to 2 Chinese Schools: Report

Recent cyber attacks on Google and other American corporations have been traced to a top Chinese university as well as a school with ties to the Chinese military, the New York Times reported on Thursday, citing people involved in the investigation.

Those people told the Times that the Chinese schools involved are Shanghai Jiaotong University and the Lanxiang Vocational School. They said the attacks may have started as early as April 2009 -- earlier than previously thought.

According to the report, investigators believe there is evidence suggesting a link to a computer science class at the vocational school taught by a Ukrainian professor.

Google jolted U.S.-China ties with its January 12 announcement that it had faced a "highly sophisticated and targeted attack" in mid-December, allegedly from inside China.

More than 20 other companies were also targeted, though Google said a primary target was dissidents' email accounts.

Jill Hazelbaker, Google's director of corporate communications said that the company's investigation is ongoing, but otherwise declined to comment.

The Chinese schools were not immediately available for comment, but the Times said they had not heard that American investigators had traced the Google attacks to their campuses.

(Reporting by Michael Erman; Editing by Gary Hill)

Mock Cyber Attack Shows US Unpreparedness
Zeljka Zorz

During the simulated cyber attack that took place yesterday in Washington and was recorded by the CNN, one thing became clear: the US are still not ready to deflect or mitigate such an attack to an extent that would not affect considerably the everyday life of its citizens.

The ballroom of the Washington's Mandarin Oriental Hotel was for this event transformed into the the White House Situation Room, complete with three video screens displaying maps of the country, simulated updates and broadcasts by "GNN", an imaginary television network "covering" the crisis.

A bevy of former top US officials were given various roles to play:

* John Negroponte, the former Director of National Intelligence, as the Secretary of State
* Michael Chertoff, the ex DHS Secretary, as the National Security Adviser
* Fran Townsend, former White House Homeland Security Advisor, as the Secretary of DHS
* John McLaughlin, ex CIA deputy director, as the Director of National Intelligence
* Jamie Gorelick, former deputy attorney general, as attorney general
* Charles Wald, retired Air Force general, as the Secretary of Defense
* Stephen Friedman, former director of the National Economic Council, as the Treasury Secretary.

The entire scenario was thought up by Michael Hayden, the former CIA Director, and the faux attack began with malware masquerading as a free March Madness application for smartphones. Once activated, it spread fast and first incapacitated cellphone networks, then landlines, the Internet, and finally - aided by mock bombs exploding in a couple of gas pipelines and power stations and a hurricane hitting the Gulf Coast - brought the entire East Coast electrical power grid to its knees. Air traffic was thrown into disorder and commerce came to a standstill.

According to The Sydney Morning Herald, the group considered various maneuvers to put an end to the attack and mitigate the effects it had on national networks.

When the servers serving the malware were "discovered" to be located in Russia, "National Security Advisor" Chertoff immediately began inquiring about the possibility of shutting them down and the implications of such an action. "Would the Russians view that as an attack?" he wanted to know. "If the attacker is either a state actor or a terrorist group what are our options for responding or retaliating?"

Regarding a possible shutdown of the cell phone and Internet service to prevent a cascading effect, the group found out that federal agencies actually don't have the authority to do so, and that companies providing these services might be unwilling to do it when asked.

Another thing that might prove to be an issue is the Governors' reluctancy to put their power in the hands of the federal government, which would possibly lead to a nationalization of the National Guard.

Federal Times reports that "attorney general" Gorelick mused on the idea of introducing laws that would allow the government to seize broader power for the time it takes to suppress a nation-wide cyber attack.

When the "exercise" came to an end, the likelihood of such a scenario was discussed. "Secretary of State" Negroponte declared that the attack seemed very plausible to him. "I don't think we're as prepared as we should be," said "Secretary of Defense" Wald.

Joe Lockhart, the former press secretary during the Clinton administration, worries that the possibility of such an attack and the development of an effective response is still not high enough on the government priority list.

Will a real cyber attack of these proportions be required to wake the government up? Probably. In the meantime, war games such as these can start the ball rolling into the right direction.

Computer Jargon Baffles Users, Hinders Security
William Maclean

Computer jargon, a "tick box" culture and unimaginative advertising are discouraging Internet users from learning how to protect themselves online.

Faced with such gobbledegook, many of the world's nearly 2 billion Internet users conclude that security is for "experts" and fail to take responsibility for the security of their own patch of cyberspace -- a potentially costly mistake.

That was the message from cyber experts who met this week to work out how to protect computer users from the growing problem of online theft, fraud, vandalism, abuse and espionage.

"The malicious and criminal use of cyberspace today is stunning in its scope and innovation," said Dell Services President Peter Altabef.

One problem is that computer "geeks" use jargon to cloak their work in scholarly mystique, resulting in a lack of clarity in everything from instruction manuals and systems design to professional training, the experts said.

"If you don't demystify security, people become anxious about it and don't want to do it," former U.S. Homeland Security Secretary Michael Chertoff told Reuters on the sidelines of the EastWest Institute security meeting in Brussels.

"There are some people in the profession who to some degree enjoy the mystification of what they do, that it's not penetrable. It's almost a sense of superiority," he said.

Doctors and lawyers used to enjoy "a sense of mystified special knowledge," Chertoff said. "But ... once you empower people to understand what's going on, doctors do a better job. So with cybersecurity the task is to make the architecture more user-friendly -- and to teach people better."

The industry has made progress in educating users, but a huge and urgent task lies ahead in view of the growing criminal threat and the imminent arrival of billions more Internet users.

Use Simple Language

Plain language is vital, said Steve Purser, head of Technical Competence at the European Network and Information Security Agency, a European Union body.

"We use a lot of complex terminology where it's not needed. We don't encourage people to think enough," he said.

"We give people the impression ... that everything is about pushing the right button at the right time. But if someone is out to attack you, they are going to use their brain to do it. They are going to think how to get round the system."

Educating the individual customer has long been a top goal for an industry struggling to balance security against ease of use and the clamor for mobile communications.

Users may be advised to install security software, or create better, more complex passwords -- but few are told why in vivid terms. There is too much reliance on procedure, Purser said.

"If we try to teach standard messages such as 'always protect your password' the danger is that people will learn the recipe but not learn why this happens," Purser said. "It's more important to learn the why of doing something..."

Delegates said imaginative messages explaining the importance of online protection are needed, tailored to different age groups and audiences and posted on media ranging from TV advertising and schools curriculums to Youtube, Second Life, social network sites and video games.

"In an ideal world you would change your password every day. You would have 14 characters and no more than two would repeat themselves. No one can live with that," said Chertoff.

Curtis Siller, director of Standards at the Institute of Electrical and Electronics Engineers, said the industry had to do a better job of communicating the risks to various audiences.

With cars, "You watch TV news and see the consequences of not wearing a seatbelt," he said. But the risks of Internet use are less apparent, so a sense of responsibility does not take root.

(Editing by Tim Pearce)

Facebook Gripes Protected by Free Speech, Ruling Says
Rich Phillips

A former Florida high school student who was suspended by her principal after she set up a Facebook page to criticize her teacher is protected constitutionally under the First Amendment, a federal magistrate ruled.

U.S. Magistrate Barry Garber's ruling, in a case viewed as important by Internet watchers, denied the principal's motion to dismiss the case and allows a lawsuit by the student to move forward.

"We have constitutional values that will always need to be redefined due to changes in technology and society," said Ryan Calo, an attorney with Stanford Law School's Center for Internet and Society.

"The fact that students communicate on a semi-public platform creates new constitutional issues and the courts are sorting them out," Calo said.

Katherine Evans, now 19 and attending college, was suspended in 2007 from Pembroke Pines Charter High School after she used her home computer to create a Facebook page titled, "Ms. Sarah Phelps is the worst teacher I've ever met."

In his order, Garber found that the student had a constitutional right to express her views on the social networking site.

"Evans' speech falls under the wide umbrella of protected speech," he wrote. "It was an opinion of a student about a teacher, that was published off-campus ... was not lewd, vulgar, threatening, or advocating illegal or dangerous behavior."

Matthew Bavaro, an attorney with the American Civil Liberties Union who is representing Evans, was pleased with the ruling.

"The First Amendment provides protection for free speech regardless of the forum, being the Internet, the living room or a restaurant," he told CNN.

On the Facebook page created by Evans, which included a picture of her teacher, Evans wrote: "To those select students who have had the displeasure of having Ms. Sarah Phelps, or simply knowing her and her insane antics: Here is the place to express your feelings of hatred."

According to court documents, Phelps never saw the posting, which was made from a home computer after school hours.

After receiving three comments from people who criticized her and supported the teacher, Evans removed the page from Facebook.

School principal Peter Bayer suspended Evans, an honor student, for three days for disruptive behavior and cyberbullying of a staff member. Bayer also removed her from Advanced Placement classes and assigned her to regular classes.

Bavaro, Evans' attorney, is seeking to have the court find the school's suspension invalid and to have documents related to the suspension removed from her school file.

"It will eliminate any official public record and validate her rights, since her First Amendment rights were violated," he said.

Internet experts say the court got it right, and that the ruling shows the law evolving with society.

"It reassures Internet users and students that they can still speak their mind," Calo said. "Its not a security issue. Its personal opinion and gossip."

Calo believes high-profile campus shootings at Columbine and Virginia Tech have made schools more security conscious. But in this case, the principal went too far, he said.

"I think this is just an example of an overreaction on the part of an administrator to speech outside the classroom," he said.

"It used to be that principals wouldn't hear you talking about teachers outside the class. Social networks give principals the ability to see what students are saying about teachers and each other.

"It's one thing to use that information to identify illegal or dangerous conduct. It's quite another to punish opinion and speech outside the classroom that doesn't disrupt the activities of the classroom," he told CNN.

Bavaro said Evans is not granting media interviews at this time. He said she is not seeking to get rich from her lawsuit.

"We are only seeking nominal, token damages. Maybe $100. Some token amount to show that her rights were violated," he said. This case is not about money."

An attorney representing Bayer, the school principal, did not return CNN's calls for comment.

School Used Student Laptop Webcams to Spy on Them at School and Home
Cory Doctorow

According to the filings in Blake J Robbins v Lower Merion School District (PA) et al, the laptops issued to high-school students in the well-heeled Philly suburb have webcams that can be covertly activated by the schools' administrators, who have used this facility to spy on students and even their families. The issue came to light when the Robbins's child was disciplined for "improper behavior in his home" and the Vice Principal used a photo taken by the webcam as evidence. The suit is a class action, brought on behalf of all students issued with these machines.

If true, these allegations are about as creepy as they come. I don't know about you, but I often have the laptop in the room while I'm getting dressed, having private discussions with my family, and so on. The idea that a school district would not only spy on its students' clickstreams and emails (bad enough), but also use these machines as AV bugs is purely horrifying.

Schools are in an absolute panic about kids divulging too much online, worried about pedos and marketers and embarrassing photos that will haunt you when you run for office or apply for a job in 10 years. They tell kids to treat their personal details as though they were precious.

But when schools take that personal information, indiscriminately invading privacy (and, of course, punishing students who use proxies and other privacy tools to avoid official surveillance), they send a much more powerful message: your privacy is worthless and you shouldn't try to protect it.

Robbins v. Lower Merion School District (PDF) (Thanks, Roland!)

Gamers Scarier than Bikies: Michael Atkinson
Andrew Ramadge

MICHAEL Atkinson says his family is more at risk from angry video gamers than outlaw motorcycle gangs.

The South Australian Attorney-General revealed in an interview aired last night that a "threatening note from a gamer" was placed under his door early one morning.

"I feel that my family and I are more at risk from gamers than we are from the outlaw motorcycle gangs who also hate me and are running a candidate against me," he said on ABC TV's Good Game.

"The outlaw motorcycle gangs haven't been hanging around my doorstop at 2am. A gamer has."

Mr Atkinson was involved in introducing tough new laws to outlaw bikie gangs in South Australia several years ago.

At the time he said politicians and public officials had to put themselves "on the line" to take the gangs on.

The comment on Good Game is the latest volley in a war of words between Mr Atkinson and people who support the introduction of an R18+ rating for video games.

Australia is the only Western country without an adult rating for games. Mr Atkinson has been the most vocal opponent of introducing one and has the power to veto changes to the classification system.

Industry groups say an adult rating would help parents make better decisions about which games are appropriate for children, but Mr Atkinson disagrees. He has previously referred to the campaign as akin to saying: "Give us more cruel sex and extreme violence!"

However the attorney-general's famously colourful rhetoric hasn’t always hit the mark.

In 2004 Mr Atkinson told South Australian Parliament that bikies had used a park barbeque in his electorate to "cook a cat for human consumption".

He was later forced to apologise. The animal was not a cat, the incident happened at another location and bikies weren't involved.

On the record

Some of Mr Atkinson's more memorable quotes on video games:

"Like other parents in Australia, I want to keep the threshold very high to try to protect (children) from being able to access computer generated pornography and violence."

- Statement to The Advertiser newspaper, February 2008

"It was banned because in the course of the game, the player may use illegal performance-enhancing drugs for the members of his or her team."

- Explaining why Blitz: The League was banned in a speech to South Australian Parliament in March 2008

"This game was banned because it promotes breaking the law by vandalising public buildings with graffiti."

- Explaining why Getting Up: Contents Under Pressure was banned during the same speech

"I think you will find this issue has little traction with my constituents who are more concerned with real-life issues than home entertainment in imaginary worlds."

- Letter to a member of the public who wrote to Mr Atkinson in support of an R18+ rating in November 2009

"I understand the Wii console has been phenomenally successful for Nintendo and that system provides many games to challenge and develop skill, physically and intellectually, without depraved sex, gore and cruelty."

- From the same letter


Until next week,

- js.

Current Week In Review

Recent WiRs -

February 13th, February 6th January 30th, January 23rd

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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Old 21-02-10, 09:15 PM   #2
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Damn, Jack,
How is it you manage to get all this stuff up every week? I'm amazed, still.
My hat is off to you, sir, for the wonderful job you do each week with this thread.
I even noticed when I came online that there were 8 guests, 2 users (one was me, one was nicobie) and all of the guests were at this thread. Good work!
Finally got rid of that old sig :P
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Old 22-02-10, 08:06 AM   #3
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hey chefws, good to see you're around!

so i grab a few stories each day and presto, by wednesday a new issue is ready. i spend time formatting/arranging them but that's the process basically, repeated weekly. thanks for the compliment.

- js.
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