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Old 11-10-17, 06:48 AM   #1
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Default Peer-To-Peer News - The Week In Review - October 14th, ’17

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October 14th, 2017




It's Illegal to Pirate Films in Iran, Unless You're the Government

Administrators of the Iranian movie site TinyMovies have been arrested.
Mahsa Alimardani

While legal "pirating" exists in Iran, six administrators of the Iranian pirate movie site TinyMoviez have been arrested by Iranian authorities. This was a website the Iranian national broadcaster had used to download and nationally air movies in the past.

The exact date of the arrests are unknown, but Tehran's Prosecutor General announced the arrests on September 26, 2017. The website is still online, but users haven't been able to download content from it since September 19, 2017. Now TinyMoviez administrators are finding themselves on the wrong side of Iran's odd and often pirating friendly copyright laws.

Iran's copyright law is a quagmire when it comes to understanding what rights exists for creators of an original piece of work, and what rights exist for those wanting to re-distribute original works, such as movies. Meanwhile, Article 8 gives the government broad powers to reproduce work that is not its own:

Public libraries, documentation centers, scientific institutions and educational establishments, which are noncommercial, may reproduce protected works by a photographic or similar process, in the numbers necessary, for the purposes of their activities, according to a decree to be issued by the Board of Ministers.

This means that the government is exempt from Article 23, which criminalizes the theft of another's work.

Whosoever publishes, distributes or broadcasts the whole or part of another person's work which is protected by this law, in his own name or in the name of the author without permission, or in the name of a person he knows to be other than that of the author, shall be condemned to corrective imprisonment for a period of time not less than six months and not more than three years.

Iran's copyright law does not protect authors outside of Iran either. While Iran is a member of the World Intellectual Property Organisation (WIPO), a specialized United Nations agency tasked with promoting the protection of global intellectual property, it has never signed the WIPO copyright treaty, nor any other international copyright agreements that would make infringing copyrights of foreigners unlawful.

In January 2016, Iranian viewers noted that the channel IRIB3, known for more youthful content from the government, was airing a TinyMoviez download of the 2013 Hong Kong film "Saving General Yang" with a clear watermark from the website.

These Iranian pirating movie websites, such as TinyMoviez and Ganool (a website now taken offline), have long been censored at various times in Iran because of distributed content that contains nudity.

Digiato, a technology website in Iran has said the move has been political on behalf of the government, influenced by TinyMoviez's competitors, who could not keep up. TinyMovies has about 300 to 400 new subscribers a month, with a $10 USD monthly fee, offering pirated foreign films with Persian subtitles or voiceovers.

According to an anonymous film distributor in Tehran that spoke to Centre for Human Rights in Iran (CHRI), a New York based human rights NGO, "In July and August [2017], there was a meeting between a number of Iranian start-up companies and [current Telecommunications Minister Mohammad Javad Azari] Jahromi, who was asked by film and TV series distributors as well as video game developers to help shut down and monitor unlicensed rivals.The start-ups made the request because they could not compete with a site like TinyMovies…"

The minister, Jahromi, would later deny any involvement.

In October 2016, the state broadcaster made a formal complaint against Aparat, what many call "the Iranian YouTube," for distributing IRIB materials without the government site's permission. They have since built a relationship with Aparat, granting them permission to stream certain pirated content, even going as far as giving the sole distribution rights within Iran on foreign productions (without the involvement of the original producers of the content).

Like many a vague and illogical laws in Iran, arbitrary rulings and arrests such as the TinyMovies one are likely to ensue.
https://motherboard.vice.com/en_us/a...the-government





Pirate Ad Revenues Halved by Anti-Piracy Efforts
Barney Dixon

Pirate advert revenues have been halved by anti-piracy efforts, according to a study from the Trustworthy Accountability Group (TAG).

The study found that digital ad revenue linked to infringing content hit an estimated $111 million last year, but that number could have doubled had the industry not taken “aggressive steps to reduce piracy”.

The figures represented a drop of between 48 and 61 percent in infringing ad revenues, which TAG described as a “notable progress against the $2.4 billion problem of infringing content”.

Mike Zaneis, CEO of TAG, said: “We have not won the war against ad-supported piracy, but the battle is joined, and we are making good progress.”

In 2014, TAG launched the Certified Against Piracy programme, a voluntary initiative designed to help advertisers and ad agencies avoid placing their ads on websites that distribute infringing content.

Sixteen companies, including 21st Century Fox, Kellogg’s and Disney have earned TAG’s ‘Certified Against Piracy Seal’, which provides an assurance that those companies’ anti-piracy services meet the industry requirements and best practices.

Efforts aren’t just limited to the TAG programme and the US, in June, the City of London Police’s Intellectual Property Crime Unit (PIPCU) noted an 87 percent drop in infringing ad revenue as a result of its Operation Creative, targetting licensed gambling operators who display adverts on illegal and copyright infringing websites.

Operation Creative gives gambling operators an up-to-date list of copyright infringing sites through PIPCU’s Infringing Websites List. Operators can use the list to become more aware of the types of sites their ads are appearing on and stop the cash flow.

Last year, the Gambling Commission made responsible ad placement a licensing condition for all gambling operators in the UK.

Zaneis said: “The collaborative efforts of hundreds of companies using TAG-validated providers of anti-piracy tools is cutting off the revenue for the criminals who profit from stolen content and reducing their incentive to distribute it.”

“Despite the advances made, there is more work to be done, as companies work together to protect their brands against the interrelated challenges of ad-supported piracy, fraud, malware, and lack of transparency.”

US Senator Orrin Hatch, co chair of the international creativity and theft-prevention caucus, said: “This critical study demonstrates the progress we have made in stopping the flow of ad revenue to pirating sites.”

“But it also shows that we still have much work to do. Online pirates plunder millions of dollars from American businesses each year, denying content creators the full benefits of their work.”

He added: “Blocking all ad revenue to pirating sites will reduce their prevalence by making their illicit activities less profitable. My friends in the online advertising community should take heart; this report shows that we are gaining ground in the battle against online piracy.”
http://www.ipprotheinternet.com/ippr...rticle_id=5662





Publishers Take ResearchGate to Court, Alleging Massive Copyright Infringement
Dalmeet Singh

Scholarly publishing giants Elsevier and the American Chemical Society (ACS) have filed a lawsuit in Germany against ResearchGate, a popular academic networking site, alleging copyright infringement on a mass scale. The move comes after a larger group of publishers became dissatisfied with ResearchGate’s response to a request to alter its article-sharing practices.

ResearchGate, a for-profit firm based in Berlin, Germany, which was founded in 2008, is one of the largest social networking sites aimed at the academic community. It claims more than 13 million users, who can use their personal pages to upload and share a wide range of material, including published papers, book chapters and meeting presentations. Science funders and investors have put substantial funds into the firm; it has raised more than $87 million from the Wellcome Trust charity, Goldman Sachs, and Bill Gates.

In recent years, journal publishers have become increasingly concerned about the millions of copyrighted papers – usually accessible only behind subscription paywalls – that are being shared by ResearchGate users. And on 15 September, the International Association of Scientific, Technical, and Medical Publishers wrote to ResearchGate on behalf of more than 140 publishers, expressing concerns about its article-sharing policies. Specifically, the organization proposed that ResearchGate implement a “seamless and easy” automated system that would help the site’s users determine if an article was protected by copyright and could be legally shared publicly or privately. The association asked for a response by 22 September, noting that its members could follow-up individually or collectively if ResearchGate failed to agree to its proposal. (AAAS, which publishes ScienceInsider, is a member of the association.)

Yesterday, a group of five publishers – ACS, Elsevier, Brill, Wiley and Wolters Kluwer – announced that ResearchGate had rejected the association’s proposal. Instead, the group, which calls itself the “Coalition for Responsible Sharing,” said in a 5 October statement that ResearchGate suggested publishers should send the company formal notices, called “takedown notices,” asking it to remove content that breaches copyright.

The five publishers will be sending takedown notices, according to the group. But the coalition also alleges that ResearchGate is illicitly making as many as 7 million copyrighted articles freely available, and that the company’s “business model depends on the distribution of these in-copyright articles to generate traffic to its site, which is then commercialised through the sale of targeted advertising.”

The coalition also states that sending millions of takedown notices “is not a viable long-term solution, given the current and future scale of infringement… Sending large numbers of takedown notices on an ongoing basis will prove highly disruptive to the research community.”

As a result, two coalition members – ACS and Elsevier – have opted to go to court to try to force ResearchGate’s hand. The lawsuit, filed in a German regional court, asks for “clarity and judgement” on the legality of posting such content, says James Milne, spokesperson for the Coalition for Responsible Sharing and senior vice president of ACS’ journals publishing group in Oxford, U.K.

“The underlying behavioral issue of ResearchGate is that it scrapes copyrighted material off the web, invites researchers to upload it to their portfolio and modifies articles,” he says. Milne says the group believes publishers should receive monetary damages, but are not seeking a fixed amount from ResearchGate.

Jon Tennant, communications director of professional research network ScienceOpen (also an STM member) in Berlin, believes ResearchGate will lose the court battle. “The consequences of this could be variable, from losing some of its data corpus -- the infringing articles -- to being asked to pay for damages,” he says.

ScienceInsider reached out to ResearchGate for comment, but did not hear back by press time.

It’s not the first time publishers are issuing takedown notices for papers: in 2013, Elsevier sent Academia.edu — another academic social network platform — 2,800 notices, but did not take the site to court.

Elsevier and ACS have also filed lawsuits against Sci-Hub, a pirate site illegally hosting millions of paywalled papers. In June, Elsevier was awarded $15 million in damages and ACS is seeking $4.8 million.
https://www.sciencemag.org/news/2017...t-infringement





A Small-Town Michigan Newspaper Said Goodbye. Then Readers Stepped in.
Jack Nissen

It was 7:10 a.m. on Aug. 5 when Saline residents learned they were losing their local newspaper.

The Saline Post, an online-only publication, had covered this small Washtenaw community like a soft, warm blanket for five years. It filled a void left when big media corporations no longer saw profit in reporting city council meetings and traffic accidents. But Tran Longmoore was exhausted. He had worked seven days a week for most of those years as a one-man media band. He could handle the hours, he said, but he couldn’t handle the bills that were piling up.

Early that morning, he typed a message to readers. “Hello friends,” he started. “I’m ceasing publication of The Saline Post after five years. For various reasons, I simply failed to generate the revenue I required to continue publishing.”

Sitting at his dining room table, he hit a button on his Acer laptop, posting the announcement on the newspaper website and social media.

Then, something unexpected happened.

Really, truly, Jimmy-Stewart-in-“It’s a Wonderful Life” unexpected.

“I started getting texts within 20 minutes,” Longmoore said.

“I got a call from someone telling me, ‘You can’t close your doors, ‘cause no one else is covering Saline.’” On Facebook, community members asked what they could do to keep the Post alive.

“Checks started coming in,” Longmoore said. “Five-dollar checks, ten-dollar checks…. it was overwhelming.”

In 24 hours, Longmoore had enough money to keep publishing. Saline’s community newspaper had been saved by, of all things, the community itself.

Longmore said he is more comfortable writing about the Friday night Saline Hornets football game than talking about the future of journalism. But the 46-year-old admits that what happened to his little newspaper may have implications beyond this Washtenaw County town of 9,000.

Communities around Michigan are losing their local newspapers, and industry leaders seem at a loss as to how to save them. Could the salvation of journalism come not from industry focus groups and page-view algorithms, but from readers themselves?
longmoore

It all seemed unlikely this summer, when The Saline Post found itself in the same financial straits as many newspapers. Newspaper circulation peaked in 1990 at 62 million papers sold daily across the country. Pew Research estimates that number has dropped by almost half in 2016—a little over 34 million.

Advertising revenue, which has always paid the bills at newspapers, hit its peak in the mid 2000s, but has since dropped by almost half—from $49 billion a year to just over $25 billion in 2012.

“It’s not exaggerating to say that all kinds of local reporting — from day-to-day city hall coverage to world-changing investigations like the one celebrated in the movie “Spotlight” — is faced with extinction,” media columnist Margaret Sullivan wrote in the Washington Post recently.

Like most towns, Saline had a traditional, hometown newspaper, The Saline Reporter. It closed up shop in 2014.

The website that was supposed to provide local news to that community survived just a year before it too was closed when its corporate owners said they were “exploring strategic alternatives.”

Longmoore, already a veteran of small-town Michigan newspapers in Milford and Blissfield, began publishing the Post in 2013. It’s not a glamorous life. Longmoore is the Saline Post’s only full-time employee, working about 55 hours a week. He writes most of the articles, edits all of the content that comes through, and runs the web traffic while managing the advertising.

He works in the guest bedroom of his home, at a local coffee shop, and even at a table near the front of Busch’s grocery store. “Anywhere there’s Wi-Fi, I’ll work,” Longmoore said. “There was a fire this morning,” Longmoore said during a recent interview. “A drunk driver drove through the park the other night. If anyone is going to have it, it’s going to be on my website.”

Often, he’s the only journalist at city council and school board meetings.

“When you see the metrics (indicating readership of an online story), you think, why bother?” Longmoore said. “But most journalists are civic-minded. What’s the old saying, about journalism being democracy’s oxygen? You have to provide the people who are interested in the information they need to decide who they’re going to vote for, or which city council members to call on certain issues.”

His presence at meetings hasn’t gone unnoticed.

“The reality is having a media presence, having someone who is not affiliated with the district able to ask the tough questions publicly and share that information, is important,” said Saline Area Schools Superintendent Scot Graden.

When it looked like that media presence was going to disappear, the community banded together to save it.

In his letter to readers in August, Longmoore said he needed commitments for an additional $1,000 a month in donations and advertising than he’d had previously, and $2,000 for immediate improvements to the paper’s equipment.

To Longmoore’s surprise, community members took action. “When you’re working by yourself, you don’t know what people think,” he said. “You don’t know if they value you.”

He soon found out.

“When he was close to going out of business, I suddenly thought, ‘How else would we know what’s going at city council meetings or the school district?’” said Lori Hall, who donates money monthly to the newspaper.

“It’s out of sight, out of mind,” said Jared Falkowski, a high school teacher and donor to the Saline Post. “You want to be able to consume the news of the day, but also you don’t concern yourself honestly with how this product is getting funded. And the people behind the scenes obviously have to make a living as well.

“Having a local publication or reporter in town, I personally just find it so important,” Falkowski said. “Obviously, it’s where people get a lot of their local news. But it’s a place where community members can voice concerns, too.”

Because of this sentiment, it may not be surprising to hear that advertisers rarely ask Longmoore how many people are reading his articles.

“No one ever asks when they buy an ad, ‘How much traffic do you get in a month?’ I think my advertisers are there because they want their ads next to the kids playing sports, next to the things going on downtown.”

“Advertising, in the long run, isn’t going to fund journalism,” Longmoore said. “It’s going to have to be readers of journalism, like it was in the old days when people subscribed to newspapers.”

The Saline Post is free, so “subscribers” have been replaced by “donors” who view local news not as a commodity, but a public service to support, like parks and streets. It’s a different mindset for the community, and for Longmoore.

“By covering all these meetings and the field hockey team and the school board, you’re showing the community you are standing by them. You’re not just there to make money off of clicks. You’re providing a community service.”

The Saline Post is going to make money when 2017 is over, Longmoore said, though he is uncertain how much. He’s planning a fundraiser for next August to build on donations already raised. If everything works out, the Post’s doors won’t be closing anytime soon.

“I used to think, it’s free, how much can you expect,” Longmoore said. “Now that people are putting their money in, I feel like I have to raise my standards. People are invested now.”
http://www.bridgemi.com/success/smal...eaders-stepped





Pirating Levels Worse than 'in Our Worst Dreams', Says Hansen

Cengage hopes to reap the benefit of its anti-counterfeiting work this autumn, its chief executive Michael Hansen has revealed.
Lisa Campbell

The Higher Education company reported a 10% drop in annual revenue earlier this year (to $1.5bn) and a 20% drop in EBITDA (to £353m). It recently signed up Barnes & Noble and Ingram, among others, to its Anti-Counterfeit Best Practices (ACBP), an industry standard to combat counterfeit textbooks. It was developed by the Educational Publishers Enforcement Group (EPEG), comprising Cengage, McGraw-Hill Education, Elsevier and Pearson.

Hansen said piracy costs Cengage $70m–$100m a year, with the problem worsening after a 2013 US court ruled in favour of student Supap Kirtsaeng (against publisher Wiley), decreeing that cheaper international versions of textbooks could be imported into the US. Hansen said: “We formed EPEG to figure out how big the problem was... [and it] is a much bigger level of counterfeiting than we had imagined in our worst dreams - much higher. For Cengage it was a $70m–$100m impact on an annual basis. Given the size of our business, that is a significant impact.”

He believes ACBP will “have a significant impact... I hope we will start to see the results soon - as early as this fall.”

Speaking about the impact of the current political climate on trade, Hansen said he hadn’t noticed a negative effect, but instead sensed an opportunity for Higher Education publishers to help “close the gap between the rich and the poor, which drives so much of this volatility right now. Without upskilling, that gap is going to become a bigger problem every year. We can significantly contribute to the closing of that gap. Many people understand that investment in education, whether by individuals or the government, is a massive investment in the future. As a business we are well- positioned [to invest] and we feel passionate about doing this. For that reason, it is an opportunity.”
https://www.thebookseller.com/news/p...-hansen-653431





WeTransfer’s Plan To Disrupt The Creative Process

“File-sharing” company no more–WeTransfer is aiming to become the pillar of creative communities.
Diana Budds

Enter your email address. Read the fine print. Sign up. Login. Exit out of the pop-up. Most digital services force you to take several steps before you can actually do what you came to the site to do. But at WeTransfer–a file-sharing service designed for creatives–the user experience has always been about getting out of the way. Now the company is growing into its next act to become a service that facilitates the entire creative process–by applying its UX philosophy to advertising, editorial, and a new mobile app.

“What we would like more than anything is to keep people in their work flow,” Damian Bradfield, U.S. president and chief marketing officer of WeTransfer, says. “Those who produce work know what it’s like to be in that moment of flow, when work is pouring out of you. There’s nothing worse than being pulled out of it or being disrupted. That’s what we wanted from a service. There’s no sign up, it’s a lean data policy, no intrusive advertising, no banners, no pop-ups, no irritation.”

When users send a file through the site, there’s no sign up necessary to use the free service. (But there is a premium version that charges a fee.) Every step in the file-transfer process happens in a compact box on the home page. The attractive background is a full-bleed image of either an ad (produced in house), an editorial (curated and authored by WeTransfer), or wallpaper. All share similar aesthetics. They’re eye-catching enough to get your attention, but so consistent in their sensibility, that you could gloss over them entirely if you wanted and go about business as usual, undistracted.

Earlier this week, WeTransfer launched a new, free mobile app that builds on this approach. Before, the company’s app was essentially a mobile version of the desktop site–a file-sharing tool. Now it’s Pinterest-like. Users can create mood boards and collect the links they read, photos they take, and music they hear all in one place.

Dutch creatives Bas Berens and Ronald Hans (who goes by the name Nalden) founded WeTransfer in 2009 with the idea of creating the file-sharing service they wanted, but didn’t exist. Today, it has 40 million active users; 75% of whom identify as creatives. Every month WeTransfer sends 1 billion files and its ads achieve a click-through rate that’s two-and-a-half times higher than the industry average–a rate the company believes it receives because its treats advertising like art. (You could argue this is a dark pattern because the ads look so similar to WeTransfer’s editorial and other wallpapers.)

Unlike most tech companies that take on venture funding early on, WeTransfer bootstrapped itself to profitability, which it reached in 2014. Without investor-added pressure to meet certain growth goals, the company had the freedom to focus on UX and crafting the brand it wanted. Proving that its approach found the audience it wanted, WeTransfer was able to get a $25 million dollar investment from Highland Capital in 2015. Now it’s in expansion mode. In December 2016, the company hired a new CEO, Gordon Willoughby, who was previously at Amazon.

“We don’t necessarily get that excited about the concept of mass storage and synchronization,” Bradfield says. “The future, and the things that will motivate us moving forward, is producing experiences that’s aren’t going upstream into cloud storage, but downstream and simplifying the web, decluttering, and creating more trust between us and the other experiences we have.”

From its outset, WeTransfer has been building goodwill with creatives and constructed its entire experience–from product to branding to marketing–with this audience in mind. It donated 30% of its wallpapers to artists–visual, performing, musical–and picked people to feature based on who its employees liked and were passionate about. (“The goal was to send so much traffic to their site, it would bring their site down,” Bradfield says of the artists they spotlighted.)

The company has steadily, and quietly, been expanding its properties under the leadership of its head of experiences, Nelly Ben Hayoun . There’s a chance you haven’t heard about most of them. (I use WeTransfer’s free service regularly–along with a host of other file sharing services–and didn’t know about most extras until researching this story, a testament to their unobtrusiveness.)

In 2016, the company formally branded the production arm of the company that creates content for artists as WeTransfer Studios. That same year it formally grouped its editorial as This Works, a blog and online magazine. Last year, it launched a browser extension so that users could be greeted with a WeTransfer-curated image upon opening Chrome.

The idea is that by producing good creative work, people who make good creative work themselves will recognize it and continue to turn to WeTransfer for whatever new vertical its creates.

“It’s a [Main] Street-store mentality,” Bradfield says. “The front door is always open. You can come in use our service and leave, and come back. We have the confidence that they will [return].”

The company also has a number of efforts outside of digital products that caters to its audience. It co-sponsors a free architecture school, donates free premium accounts to art students, and offered former SoundCloud employees $10,000 to fuel their creative pursuits instead of immediately jumping into a 9-5 post-layoff.

Since its launch, WeTransfer hasn’t been building a better file sharing service. That part of the company has remained relatively unchanged. But it’s been building an audience of creatives and keeping them in mind as they expand.

In 2015, WeTransfer had about 30 employees; now it’s up to 100. Bradfield says the company is experiencing double-digit revenue growth year on year. Speed of growth–in terms of user numbers–hasn’t been the goal; rather, retaining the audience along the way has. The company plans to keep this approach as it moves forward, always keeping in mind that its experience be centered around simplicity and making it easier for creatives to be creative.

While other file-sharing services, like Dropbox, are rebranding and trying to emulate WeTransfer’s punchy look, at their core they’re still cloud services and are competing with one another. But WeTransfer isn’t just competing against Dropbox and Hightail. It’s competing with Nowness, Dazed, and Dezeen for editorial; Vice for sponsored video production; and even Google (since the company also has an email service). When I ask Bradfield about one of the biggest challenges for growth, he says it’s maintaining credibility.

“We’re broad enough in our user base to move into different avenues, but we couldn’t do that if we didn’t have the creative community,” Bradfield says. “As long as we’re cautious and credible, we have many opportunities. It’s similar to Apple in that Apple isn’t a technology company–it’s a hardware company, a music company, it’s a retailer, it’s a space that the creative audience trusts.”
https://www.fastcodesign.com/9014620...eative-process





‘Blade Runner 2049’ Sputters at the Domestic Box Office

While turnout was disappointing in North America, overseas ticket sales for the expensive “Blade Runner 2049” were much better.
Brooks Barnes

The expensive science-fiction sequel “Blade Runner 2049” collapsed at the North American box office over the weekend, taking in $31.5 million, or roughly 30 percent less than analysts had expected, as younger audiences and women failed to materialize in sizable numbers.

“I’m disappointed,” said Jeff Goldstein, president of domestic distribution for Warner Bros., which released the independently produced movie in the United States and Canada. “The real trick now is to expand the audience past older men.” Warner said that 71 percent of opening-weekend ticket buyers were male.

Euphoric reviews and possible attention on Hollywood’s awards circuit could help “Blade Runner 2049” play longer and more successfully in theaters than would be typically expected. Denis Villeneuve, who directed the film, had that kind of luck with his last movie, “Arrival,” which had $24 million in initial ticket sales last fall and ultimately collected $100.5 million.

And “Blade Runner 2049” did better overseas, where Sony Pictures Entertainment has the distribution rights. Sony said that the movie took in $50.2 million in partial international release, with major countries like Japan, South Korea and China still to come.

Starring Ryan Gosling, Harrison Ford and Jared Leto, the dystopian, R-rated “Blade Runner 2049” is set 30 years after the first movie, which was directed by Ridley Scott and released in 1982. Mr. Scott’s film also had a shaky start at the box office. Ultimately, though, his “Blade Runner” became a cultural force through multiple DVD rereleases.

“Blade Runner 2049,” which cost at least $200 million to make and market in North America, may have struggled because of a running time — two hours and 43 minutes — that tested audience endurance and limited the number of screenings theaters could schedule. Analysts said that marketing materials did a good job of conveying the complicated film’s neo-noir vibe, but were less effective at conveying a clear plot.

Some studio executives also wondered if Major League Baseball playoff games hurt ticket sales and whether the massacre of concertgoers in Las Vegas kept Americans away from theaters.

Hollywood has been having a difficult time in general. Warner found a runaway hit last month with “It,” which cost $35 million to make and has now taken in $304.9 million at domestic theaters, for a worldwide total of $603.7 million, according to comScore. But most other movies have struggled, including Tom Cruise’s “American Made,” “Kingsman: The Golden Circle” and “The Lego Ninjago Movie.”

For the weekend, “Blade Runner 2049” was No. 1. Two other movies arrived in wide release, and ticket sales were light for each. “The Mountain Between Us” (20th Century Fox), a romantic thriller starring Idris Elba and Kate Winslet and costing about $35 million to make, collected about $10 million. “My Little Pony: The Movie,” produced by Hasbro for an unknown amount and distributed by Lionsgate, took in an estimated $8.8 million.

If “Blade Runner 2049” does not take off in the weeks ahead, the movie will be a blow to Alcon Entertainment, the small company that was primarily responsible for it, right down to calling marketing shots.

Alcon, founded in 1997 and financed by the FedEx founder Frederick W. Smith, rose to prominence in Hollywood in 2009, when “The Blind Side,” a modestly budgeted drama, became an unexpected hit. But Alcon’s efforts to expand into big-budget event films have been disappointing. Recent attempts have included a remake of “Point Break,” which cost more than $100 million to make and took in $29 million in North America in 2015, and “Transcendence,” which cost $100 million and took in $23 million in 2014.
https://www.nytimes.com/2017/10/08/m...ox-office.html





Disney’s Big Bet on Streaming Relies on Little-Known Tech Company
Brooks Barnes and John Koblin

For two days in late June, Disney’s board of directors gathered at Walt Disney World in Florida to wrestle with one topic: how technology was disrupting the company’s traditional movie, television and theme park businesses, and what to do about it?

The most startling presentation came from Disney’s biggest division — a $24 billion television operation anchored by ESPN and Disney Channel. Cord cutting was accelerating much faster than expected. Live viewing for some children’s programming was in free fall. At the same time, streaming services like Netflix were experiencing explosive growth.

With Disney’s board exhorting speedy action, Robert A. Iger, Disney’s chief executive and chairman, proposed a legacy-defining move. It was time for Disney to double down on streaming.

And that was how the Disney board, which includes Silicon Valley stars like Sheryl Sandberg of Facebook and Jack Dorsey of Twitter, came to bet the entertainment giant’s future on a wonky, little-known technology company housed in a former cookie factory: BamTech.

In August, Disney announced that it would introduce two subscription streaming services, both built by BamTech. One, focused on sports programming and made available through the ESPN app, would arrive in the spring. The other, centered on movies and television shows from Disney, Pixar, Marvel and Lucasfilm, would debut in late 2019.

“We’re going to launch big, and we’re going to launch hot,” Mr. Iger promised at a subsequent investor conference.

Disney had experimented with building a streaming platform on its own, to mixed results. It also toyed with the idea of buying Twitter.

But Mr. Iger was impressed with BamTech. Based in Manhattan’s Chelsea Market, a former factory for the National Biscuit Company, the 850-employee company has a strong track record — no serious glitches, even when delivering tens of millions of live streams at a time. BamTech also has impressive advertising technology (inserting ads in video based on viewer location) and a strong reputation for attracting and keeping viewers, not to mention billing them.

“BamTech really is as good as it gets,” said Mike Vorhaus, president of Magid Advisors, a media and technology consultant.

BamTech grew out of Major League Baseball Advanced Media, or Bam for short, which was founded in 2000 as a way to help teams create websites. By 2002, Bam was experimenting with streaming video as a way for out-of-town fans to watch games.

Soon, Bam developed technology that attracted outside clients, including the WWE, Fox Sports, PlayStation Vue and Hulu. HBO went to Bam in 2014 after failing to create a reliable stand-alone streaming service on its own. Could Bam get HBO up and running — in just a few months?

Bam built HBO Now for roughly $50 million, delivering it just in time for the Season 5 premiere of “Game of Thrones,” which went off flawlessly. “They were nothing short of herculean for us,” said Richard Plepler, HBO’s chief executive.

In 2015, Bam decided to spin off its streaming division, calling it BamTech. With an eye toward its own direct-to-consumer future, particularly with ESPN, Disney paid $1 billion in 2016 for a 33 percent stake and an option to buy a controlling interest in 2020. To run the stand-alone company, M.L.B. and Disney recruited Michael Paull, 46, from Amazon, where he oversaw Prime Video and the introduction of Amazon Channels.

Disney started talking about the inevitable shift toward streaming in 2006, according to Kevin Mayer, Disney’s chief strategy officer. But the world’s largest entertainment company had to be careful: It could not embrace a new business model at the expense of its still highly profitable existing one — at least not until it saw a tipping point.

So Disney, along with other television companies, first tried something called TV Everywhere. Introduced in 2010, it allowed people to watch television shows on mobile devices as long as they “authenticated” themselves as current cable or satellite subscribers. But that cable bundle-saving effort proved cumbersome and never completely caught on.

About three years ago, Disney started to look at streaming more aggressively. Disney experimented with going it alone, quietly developing an app called DisneyLife. Introduced in November 2015 in Britain, DisneyLife offered old Disney movies and television series, children’s e-books, games and music. Subscriptions cost about $13 a month.

The lesson from that was without new movies, or at least exclusive content, interest was limited. Disney soon cut the subscription price in half. After two years, analysts estimate that DisneyLife has only about 437,000 subscribers. (It was never introduced outside Britain.)

Disney also weighed a bid for Twitter. “We thought Twitter had global reach, a pretty interesting user interface and a compelling way that we might be able to present and sell the content that our company makes to the consumer,” Mr. Iger said at a Vanity Fair conference last Tuesday. Ultimately, though, Disney passed. Twitter’s growing reputation as a platform where hate speech can be disseminated would have posed a problem for the Disney brand.

So when Mr. Iger decided in June that the time had come to reposition Disney’s television division for growth by offering its sports, movies and television programming directly to consumers, he asked BamTech to accelerate Disney’s option to take a controlling interest. By early August, Disney had agreed to spend an additional $1.58 billion to bring its BamTech stake to 75 percent.

Most analysts cheered Disney’s streaming plans, but some investors seem to be taking a wait-and-see approach. One reason is cost.

Start-up expenses are unknown, but Disney has signaled that they will be huge. (Analysts estimate that marketing alone could easily run $150 million annually.) Disney has also not announced how much it will charge for subscriptions to the still-unnamed services. (Analysts are guessing $5 to $9 a month.) What is certain: To stock its own offerings, Disney plans to pull content from other services — Disney, Pixar, Marvel and Lucasfilm movies will eventually disappear from Netflix — eliminating an enormous, reliable revenue stream.

Michael Nathanson, a media analyst, estimates that Netflix, for instance, pays Disney $325 million annually to license those films. Also moving to one of the services will be reruns of Disney Channel shows, which generate roughly $500 million annually in third-party licensing fees, according to Doug Mitchelson, an analyst at UBS.

At the same time, Disney has pledged to make original movies and series for its nonsports service, easily adding $150 million in costs.

There has also been some sniping about how much Disney paid for BamTech. Speaking at a Goldman Sachs conference last month, Leslie Moonves, chief executive of CBS, boasted that his company’s All Access and Showtime streaming services had been built internally.

“We didn’t go buy BamTech for a zillion dollars,” he said.

Disney contends that a big part of BamTech’s value has been overlooked. Down the road, as other media companies move toward streaming, BamTech intends to sign them up as clients.

“That’s going to be a massive business, and BamTech is going to be a massive winner in it,” Mr. Mayer, Disney’s chief strategist, said in an interview.

Still, by the end of next year, BamTech will lose one important customer: HBO, which is moving to a global platform built by its own tech team. “They understood from the very beginning that eventually we would grow our way to independence,” Mr. Plepler said.

For some, Disney’s track record with digital acquisitions is the biggest concern.

Whenever the company has wandered away from content-related mega-purchases (Pixar, Marvel), results have been disappointing. Misfires include the social media-focused game maker Playdom, purchased for $563 million in 2010, and the online video network Maker, bought for $500 million in 2014.

Disney.com has also given the company headaches, with managers trying a series of redesigns and strategic retrenchments.

This time may well be different, in part because failing isn’t an option. And, in a contrast to those smaller acquisitions, Mr. Iger has pledged to devote much of his time over the next 21 months — he insists he will retire in July 2019 — to the twin streaming initiatives. BamTech’s remaining minority owners, M.L.B. and the National Hockey League, also have an interest in the effort succeeding.

Mr. Paull, a Harvard M.B.A. with experience at Sony Music, will report to Mr. Mayer, who joined Disney in 1993 before leaving in 2000 to run Playboy.com. He soon returned to Disney to work on Go.com, a web portal that eventually failed, and other Disney websites, including ESPN.com, before moving to strategic planning.

Though BamTech has proved its streaming bona fides, it still lacks the algorithms and the personalization skills that have helped propel Netflix to success. To fill that gap, Mr. Paull recently hired the former chief technology officer of the F.B.I. to be the head of analytics.

BamTech’s headquarters are a massive sprawl. Inside the darkened “transmission operations center” on a recent afternoon, walls of monitors displayed hundreds of live events — baseball, golf, hockey, boxing, a speech by President Trump — being streamed to somewhere at that moment.

Outside the operations room, in a series of alcoves, including one that used to house an oven where Oreos were baked, employees monitor games and are the first line of defense if something goes wrong with a stream. They’re nicknamed the Night’s Watch, from HBO’s “Game of Thrones.”

The level of engineering required for that enormous volume of content is no small matter. Each bit of streamable content has to be made to fit a dizzying number of requirements. Start with web browsers, ranging from Safari to Chrome or Explorer, all of which have slightly different demands. It also has to fit every iPhone and Android phone. And then there are connected living room devices like Apple TV.

“The complexity there is incredible,” Mr. Paull said during a tour. “It’s thousands and thousands of different applications we need to build to support that entire ecosystem. Then you add in international and the complexities of languages, currencies, payment mechanisms.”

He added, “That’s one of the big, big barriers to entry if you want to have a scaled digital video service.”
https://www.nytimes.com/2017/10/08/b...streaming.html





Hulu Drops Price of Entry-Level Plan to $5.99 Monthly for Limited Time
Todd Spangler

Hulu is now offering its cheapest streaming plan, which includes commercials, for $5.99 per month for the first year — a short-term promotion aimed at luring new subs with the kickoff of the fall television and Hulu’s expanded TV library lineup.

The move comes, coincidentally, as Netflix last week raised prices on its standard plan (to $10.99 per month) and the premium four-stream plan (to $13.99 per month) in the U.S. The Netflix “basic” one-stream, non-HD plan remains unchanged at $7.99.

Hulu’s special offer for the limited-commercials plan is available through Jan. 9, 2018, only to new or returning Hulu subs. After one year, the regular $7.99 monthly price will kick in. Hulu offers a commercial-free option for $12 per month, and a live TV service (which includes access to original series like Emmy-winning “The Handmaid’s Tale” and on-demand titles) for $40 monthly.

A Hulu rep said the company’s new promo is intended to draft off the fall 2017 TV season. Hulu is currently running an ad campaign featuring Anna Kendrick (the “Pitch Perfect” movies) as part of its marketing push.

As it looks for another original series on the order of “Handmaid’s Tale” — so far its only breakout hit — Hulu has inked deals to bring thousands of current and older TV shows to the platform to armor-up in its battle with rivals Netflix and Amazon Prime. That included a mammoth deal with 20th Century Fox for nearly 3,000 episodes from 26 recent and older comedy and drama series to the streaming service, including every episode of shows including “How I Met Your Mother,” “Burn Notice,” “Bones” “Glee,” “M*A*S*H” and “NYPD Blue” library. In addition, Hulu has licensed exclusive rights to series including NBC’s “Will & Grace” and “30 Rock”; Fox’s “Black-ish”; and ABC’s “Fresh Off the Boat.”

Hulu also has reincarnated ABC’s “TGIF” lineup from the 1990s, licensing a batch of shows comprising more than 1,200 episodes total. Those include original “Full House,” “Family Matters,” “Step By Step,” “Perfect Strangers,” “Hangin’ With Mr. Cooper,” “Boy Meets World” and “Dinosaurs.”

The company launched a similar offer a year ago, beginning in early October 2016 and running through mid-November, for the entry-level tier. Hulu ended its free, ad-supported version of the service in August 2016, entering into a distribution pact with Yahoo for free access to some shows.

Separately, earlier last month Hulu and Spotify rolled out a bundle priced at $4.99 per month for college students in the U.S. that includes access to Spotify Premium and Hulu’s limited-commercials SVOD service. The companies say they’re working on other bundle offers for a “broader market.”

Hulu is owned by Disney, Comcast and 21st Century Fox — which each hold 30% stakes — and Time Warner, which owns a 10% stake. The company last disclosed the size of its subscriber base in May 2016, when it said it had 12 million paying customers. This past May, Hulu said it had 47 million total unique viewers (32 million of whom were on the ad-supported service).
http://variety.com/2017/digital/news...an-1202584235/





Once Dominant, Netflix Faces An Increasing Number Of Video Challengers
Laura Sydell

All Things Considered, • Apple is about to close a deal with director Steven Spielberg to revive his Emmy award-winning series Amazing Stories for Apple TV. With it, Apple is entering a world in which Netflix has been a leader. But now, new competitors to Netflix are emerging at a surprising speed.

It was just 2013 when Netflix's House of Cards staring Kevin Spacey was the breakthrough in streaming TV. It was the first online-only series to get nominated for major Emmys. But at this year's Emmys, The Handmaid's Tale, produced by Hulu, beat out House of Cards and became the first streaming TV series to win the Emmy for best drama.

A year earlier, Netflix barely had to think about Hulu. Now, it's one of a growing list of competitors, says Mark Suster, who invests in video.

"You not only have Amazon, but you increasingly are gonna have Spotify, and you have Apple and you have Comcast," he says. "There are so many people that will be moving into this space."

This means a lot more content to watch for viewers and a lot more outlets for creators. But Netflix does have an edge since it was the first player in this market, says Sid Ganis. He's a film and TV producer and the former head of the Academy of Motion Picture Arts and Sciences, which gives out the Academy awards.

"Because they had a start on everybody else they're pretty much the Big Boppers today," he says. "They're still the ones that we think about first before we think about the others."

Ganis is talking about producers, creators — everyone who makes entertainment. But he also says there's frustration with how Netflix changed Hollywood's business model. Before Netflix, if you created a show or a film you got paid more if more people watched it.

But Ganis says since Netflix doesn't reveal how many people watched a film or show, it gives people an upfront fee and it doesn't matter if it's a hit. "The deals are different, meaning with the success of the movie, the remuneration for the artists, producers, writers," Ganis says.

Suster, the investor, says he's hearing a shift in how creators feel about Netflix. "As I understand it people were very happy with Netflix in the early days, but now Netflix has so much relative power that your ability to make money on the back end is reduced," he says.

Suster sees an opening for competitors with more money to grab the best talent. Netflix does not have the deepest pockets, even though it's got 100 million subscribers around the world paying monthly fees. On the other hand, Apple is the most valuable company on the planet. And it doesn't need big profits from entertainment because it's got the iPhone. Hulu is owned by Disney, Time Warner, Comcast and Fox.

But, Suster says, Netflix's biggest competitor is Amazon, which uses video to draw people to its retail store.

"In a world in which, because I'm making money from you in so many different ways, I don't have to make as much money on my video subscription," Suster says. "It's going to be very hard for Netflix to compete going forward with Amazon."

Netflix declined a request for an interview. But at the Code Conference in California, Netflix CEO Reed Hastings admitted that facing Amazon was a challenge. "What we can be is the emotional connection brand, like HBO," he said. "So think of it as they're trying to be Wal-Mart, we're trying to be Starbucks. So super-focused on one thing that people are very passionate about."

And while all this competition may not bode well for Netflix's bottom line, the fun has just begun for those who are enjoying the world of streaming entertainment.
http://www.npr.org/sections/alltechc...eo-challengers





The Frightful Five Want to Rule Entertainment. They Are Hitting Limits.
Farhad Manjoo

The tech giants are too big. Other than Donald J. Trump, that’s the defining story of 2017, the meta-narrative lurking beneath every other headline.

The companies I call the Frightful Five — Amazon, Apple, Facebook, Microsoft and Alphabet, Google’s parent company — have experienced astounding growth over the last few years, making them the world’s five most valuable public companies. Because they own the technology that will dominate much of life for the foreseeable future, they are also gaining vast social and political power over much of the world beyond tech.

Now that world is scrambling to figure out what to do about them. And it is discovering that the changes they are unleashing — in the economy, in civic and political life, in arts and entertainment, and in our tech-addled psyches — are not simple to comprehend, let alone to limit.

I’ve spent the last few years studying the rise of these giants. As tensions over their power reached a high boil this summer — Facebook and Russia, Google and sexism, Amazon and Whole Foods — I began thinking more about the nature and consequence of their power, and talking to everyone I could find about these companies. Among them were people in the tech industry, as well as many in other power centers: Washington, Hollywood, the media, the health care and automotive businesses, and other corners of society that may soon be ensnared by one or more of the Five.

This is the first of several columns in which I’ll take measure of the Five. Here, I assess their efforts to infiltrate entertainment — their plans to push deeper into the business of movies, TV and music, and the fears of cultural domination those moves have provoked.

Why start with the culture industries? The Five elicit worries of total social control. Many people fear the companies will be able to translate their hold on key digital platforms into wholesale ownership of adjacent industries that depend on those platforms, giving them wider economic and social power.

The entertainment industry is a good place to assess those claims because in different ways, the Five have spent years building platforms for the distribution of art, culture and media. Facebook runs the news; Google’s YouTube has videos and music; Microsoft’s Xbox has games; Amazon runs books, movies and TV (and, through its web-hosting service, AWS, hosts much else, including Netflix); and Apple has pretty much of the same, plus all those apps.

Yet in entertainment, we also see the limits of their efforts to push into new territory. Though their technologies have altered nearly everything about how we buy and experience popular culture, the Five themselves have not been the greatest beneficiaries of the changes.

They are pouring money into entertainment, but they have been cornered by nimbler start-ups like Netflix and Spotify. Amazon has struggled to make a hit show, while Apple’s plans for original TV are perpetually around the corner. (It has now struck a deal to revive “Amazing Stories,” the 1980s Steven Spielberg series; there’s no word on when it will air.) All of the Five have labored to create some killer position in the tumultuous new marketplaces their platforms have enabled.

Several times in conversations with people in Hollywood, I heard the tech people referred to as “dumb money” — the sort of outsiders (in the past, they came from oil, then from finance) who parade through town looking to call the shots. One Hollywood executive who has worked often with tech companies told me: “I wouldn’t say we’ve looked at them with fear, no.”

The Five’s struggles in entertainment, if they persist, suggest that they can be as clueless about the changes wrought by technology as the rest of us — that they do not quite understand, and haven’t yet begun to master, how to translate their technological power into wider cultural power.

Not long ago, this story looked a lot more open-and-shut. With the iPod and iTunes, Apple acquired dominance over a music industry that was struggling to respond to the digital age. Amazon eclipsed Barnes & Noble as the biggest boogeyman of the indie bookstore; for years, it fought bruising battles with the publishing industry over sales contracts that publishers said were too onerous. Through YouTube, Google gained control over not just funny cat videos, but also the modern replacement for radio. (People watch a lot of music videos on YouTube.) And Facebook has become the world’s most popular source of news, a position that has consumed its leaders over much of the last year.

There’s no doubt that technology has upended the economics of modern cultural businesses. In a recent polemic, “Move Fast and Break Things,” Jonathan Taplin, the director emeritus of the Annenberg Innovation Lab at the University of Southern California (and a former rock band manager and movie producer), points out that musicians could once make a decent living off their royalty checks.

Digital technology has now completely undercut that business. YouTube has made every song available online, and even though many artists are paid a cut of the ads placed on YouTube (the company said it paid out $1 billion last year), the money is nothing close to what artists got from selling records.

Mr. Taplin sees what has happened in music as a harbinger for much of the rest of culture. “The rise of the digital giants is directly connected to the fall of the creative industries in our country,” he wrote.

But there is another side to the story. As I’ve argued before, while musicians have had to find new sources of revenue, the rise of online subscriptions and a new consumer willingness to pay have led to an explosion of new cultural voices.

Meanwhile, some earlier doomsaying has not come true: Indie bookstores and print books are making a comeback, while publishers are enjoying record profits. And the tech giants’ eagerness to create entertainment marketplaces has led to a bonanza for some artists. To compete for new members, Apple, Tidal and other streaming services are paying out lavish bonuses; Apple paid Chance the Rapper $500,000 for two weeks of exclusive access to his latest album.

The tech-industry money train is making its biggest hauls in Hollywood. “There are so many new markets for talent and writers to go to, and the creators here love that,” said Marty Kaplan, a professor of entertainment, media and society at the U.S.C. Annenberg School for Communication and Journalism. “Instead of having seven buyers for your idea, there are now more like 20 — and that makes everybody happy.”

This story may sound puzzling. The tech giants are the most sophisticated media companies in the world, so why, after prying open their wallets, have they struggled to capture Hollywood?

It’s because technology is not all that matters. The Five acquired their power by mastering the tech industry. They achieved dominance in a field that’s won with information, data and precision.

But even though they now control valuable platforms, as they move to areas that require them to stretch their skills they are finding that they won’t be able to roll in and take over. Several people in Hollywood told me that many of the Five just didn’t seem to “get” the movie and TV business. They had brought Northern California’s tech ideas to Southern California’s entertainment party, and did not understand the value of imagination, talent and subjective inspiration.

This myopia is part of a pattern that will repeat itself often in this series. You see it in how Facebook got caught off guard by how it was used during the election, or in YouTube’s surprise that some of its biggest stars were pushing hateful ideas on its platform.

The tech giants have upended much of society, but even they have difficulty understanding and navigating the chaos of the new platforms they have built. It’s not quite clear, yet, that they have the future all wrapped up.
https://www.nytimes.com/2017/10/11/t...ng-limits.html





Google Fiber Scales Back TV Service To Focus Solely On High-Speed Internet
Brandon Hill

Google Fiber started off with a simple enough premise: providing lightning-fast internet and TV service to customers at reasonable prices. Given that many Americans have just one or two ISPs serving their area (usually, with just one of them offering serviceable internet speeds), the promise of gigabit internet from Google at $70/month was hard to pass up.

Last week, however, it was revealed that the TV portion of Google Fiber is being eliminated from future rollouts of the service. In a blog post, Google explained that in its newest markets, Louisville and San Antonio, it will not be providing optional TV service. "More and more people are moving away from traditional methods of viewing television content," said Google Fiber's Cathy Fogler. "Customers today want to control what, where, when, and how they get content.

"Whether it’s through YouTube TV, Hulu, Netflix, or more specific targeted services -- there are so many ways to watch what you want, when you want it."

Fogler goes on to add that Google Fiber allows customers to enjoy the aforementioned streaming services at the highest quality settings across multiple devices in your home. It's also quite possible that Google Fiber simply hasn't seen a high take rate for the TV add-on, which has probably drawn a watchful eye from parent company Alphabet. Louisville and San Antonio may be the first market to launch with a complementary TV service, but it also appears that Google is trying to push its existing TV subscribers off the train as well.

The Charlotte Observer reports that Google Fiber is raising the price of its Fiber 1000 + TV from $130/month to $150/month starting in December. In an email to customers, Google Fiber told Charlotte, NC residents “The cost of providing TV programming continues to rise" as an explanation for the cost hike.

However, the sticker shock will be even more for new subscribers to Fiber 1000 + TV service in Charlotte. They will have to pay $160 per month for the same service.

Google has slowly spread its gigabit internet service to major metropolitan areas across the United States over the past seven years. However, its announcement of new "Fiber Cities" has stalled for the past year due to difficulties in establishing the service in some regions, legal challenges from competitors like AT&T and Comcast, and the overall expense of building out its network. In the future, Google Fiber hopes to use wireless internet technology that it gained from its Webpass acquisition to further build out its network.
https://hothardware.com/news/google-...gabit-internet





AT&T Reports Fresh Signs of Cord Cutting, Rattling Pay-TV Stocks

As third-quarter earnings season approaches, AT&T echoes Comcast's recent guidance that more subscribers are fleeing traditional pay-TV.
Chris Nolter

AT&T (T) disclosure on Wednesday that it will lose more traditional video subscribers than expected in the third shook up the stocks of pay-TV providers on Thursday morning. Renewed signs of cord cutting come a month after Comcast (CMCSA) provided similar guidance about third-quarter video subscribers.

While its DirecTV Now streaming video service gained 300,000 subscribers in the third quarter, AT&T disclosed in a Wednesday filing with the Securities and Exchange Commission that it lost 390,000 subscribers to its traditional pay-TV video service.

"No one should have expected AT&T's video subscriber results to be good in Q3," Craig Moffett of MoffettNathanson wrote in a research note. "But we doubt anyone expected them to be this bad."

Shares of the Dallas telecom, which reports third-quarter earnings Oct. 24, dropped 3.5% to $36.82 Thursday morning. The telecom also said that hurricanes and earthquakes in Mexico would cut earnings by two cents per share.

Comcast, which said in early September that it expects to lose 100,000 to 150,000 video subscribers in the third quarter, dropped 2.4% to $36.50 following AT&T's disclosure. Comcast reports third-quarter results on Oct. 26.

Satellite TV company Dish (DISH) fell 3.2% to $50.00, while cable operator Charter (CHTR) dropped 2% to $357.68. Verizon (VZ) lost 0.8% to $48.45.

AT&T's streaming subscriptions help to offset lost traditional video subscribers, but will not fully replace the lost revenue. While DirecTV's satellite TV service goes for $50 per month, AT&T sells discounted DirecTV Now subscriptions for as little as $10 to unlimited wireless plan subscribers.

Despite the drop in total video subscribers, Wells Fargo analyst Marci Ryvicker had some positive takeaways from AT&T's guidance. DirecTV Now's gains of 300,000 streaming subscribers topped her forecasts of 200,000 subscriber gains. Despite the subscriber losses and damage from storms and earthquakes, she noted, AT&T maintained full-year guidance for 2017.
https://www.thestreet.com/story/1434...ing-signs.html





Pay-TV Companies Are in Crisis Mode
Scott Moritz and Gerry Smith

• 2017 on pace to have biggest pay-TV subscriber losses ever
• ‘The wheels are falling off of satellite TV’: Moffett

Investors in traditional TV providers are reeling as companies from AT&T Inc. to Viacom Inc. fail to stop the desertion of customers lured away by cheaper entertainment options such as Netflix and Snapchat.

AT&T, whose ownership of the DirecTV satellite service makes it the biggest U.S. pay-television provider, said late Wednesday it will report a third-quarter loss of 390,000 satellite and cable customers, echoing a similar warning weeks earlier from Comcast Corp. The same night, Viacom cautioned that its distribution deal with Charter Communications Inc., the second-biggest cable U.S. company, may lead to a blackout, potentially testing whether millions of viewers are willing to go without MTV and Nickelodeon.

Shares of both companies tanked Thursday, leading to a broader selloff in the sector. The S&P 500 Media Index, which includes Comcast and ESPN owner Walt Disney Co., slid as much as 2.2 percent to the lowest level since January.

After decades of steadily increasing bills and ever-bigger packages of channels, the pay-TV ecosystem is in full-blown crisis mode. AT&T, Dish Network Inc. and others are offering cheaper, online-only versions of cable to lure customers back, but that means having to accept thinner profit margins.

“Those salad days of fat bundles, automatic carriage renewals and customary affiliate steps ups are long gone,” Citigroup Inc. analyst Jason Bazinet wrote in a note this week. “Today, every media and cable firm is jockeying for self-preservation. And we suspect the next chapter in this new era means Charter will drop -- or significantly curtail -- distribution of Viacom’s content.”

Barring a major fourth-quarter comeback, 2017 is on course to be the worst year for conventional pay-TV subscriber losses in history, surpassing last year’s 1.7 million, according to Bloomberg Intelligence. That figure doesn’t include online services like DirecTV Now. Even including those digital plans, the five biggest TV providers are projected to have lost 469,000 customers in the third quarter.

AT&T sank as much as 4.6 percent, the most intraday since August 2015. Dish, which also provides satellite service, declined 5.6 percent. Viacom dropped as much as 7 percent while AMC Networks Inc. fell as much as 7.2 percent after Guggenheim Securities LLC downgraded the two stocks to neutral from buy.

Dallas-based AT&T is pushing headlong into TV programming by acquiring HBO and CNN owner Time Warner Inc. in an $85.4 billion deal. Chief Executive Officer Randall Stephenson has argued that the acquisition will let AT&T create compelling video packages for mobile subscribers and provide valuable targeting information for advertisers.

But with video subscriptions falling, Stephenson is also under pressure to prove he can keep people paying for TV in the first place.

“It is becoming increasingly clear that the wheels are falling off of satellite TV,” said Craig Moffett, an analyst at MoffettNathanson LLC, in a research note.
https://www.bloomberg.com/news/artic...or-at-t-viacom





Comcast Pressures Local Cable Firms to Curb Low-Cost TV Packages
Gerry Smith

• Seeks to protect subscriber base for regional sports channels
• Said to seek 15% cap on number of customers for cheapest deals

Comcast Corp. is trying to restrict cable operators’ sales of low-cost TV service to ensure its regional sports networks don’t lose too many subscribers, according to a trade group of about 750 smaller companies that have taken their complaint to regulators.

Comcast has tried to limit the availability of sports-free offerings in contract talks with pay-TV operators, according to the American Cable Association, whose members have about 7 million subscribers. In addition to being the largest U.S. cable provider, Comcast owns regional sports channels in markets such as Boston, Chicago and Philadelphia.

The claim shows programmers are fighting back as more consumers seek TV options that don’t include sports. Cable operators are trying to stem subscriber losses by offering a “basic” service with just a few channels and internet access for fans of Netflix or Amazon. Philadelphia-based Comcast, for instance, recently started selling Instant TV, a streaming service with mostly broadcast channels but not ESPN, for $18 a month.

In contract talks, Comcast has told small cable operators that if more than 15 percent of their subscribers get basic TV and internet service, they must include the regional sports networks in that bundle, according to a person familiar with the matter who asked not to be identified because the discussions are private.

That drives up the cost of the basic service and forces cable operators to suppress demand by raising prices, according to the cable group. The organization spelled out its concerns with Comcast in a letter Tuesday to the U.S. Federal Communications Commission. The agency regulates the industry and issues an annual report to Congress about competition among pay-TV operators.

Officials with Comcast, which also owns NBC and cable channels including USA Network and Bravo, didn’t respond to a request for comment.
Cable Burden

“Comcast, it seems, is standing in the way of ACA members that want to help their customers escape the burdens of the big and expensive expanded basic bundle of channels,” ACA Chief Executive Officer Matthew M. Polka said in a statement.

Cable operators are typically required in programming contracts to offer some channels to a minimum percentage of subscribers so those networks gain the widest distribution. “Basic” TV packages have long been excluded, the trade group said, allowing cable operators to offer regional sports channels in a separate, more expensive tier of service.

Sports channels are among the most expensive parts of the cable bundle. And as a cable operator, Comcast has drawn a hard line with some regional sports networks. The company dropped the YES Network, home to the New York Yankees, for more than a year starting in November 2015 in a contract dispute with channel owner 21st Century Fox Inc.
https://www.bloomberg.com/news/artic...st-tv-packages





Comcast Is Abandoning Customers in the Name of Free Speech
Susan Crawford

Two very American stories about high-speed internet access are colliding right now, and the dissonance is striking. One is like a five-minute Shakespearean tragedy, neatly telling the story of what a high-priced local cable monopoly does (and doesn’t do). The other is a hopeful narrative of intelligent, effective government intervention.

For the brief but evocative tragedy, you probably can guess who the high-priced local cable monopoly is: Comcast. In Vermont, this litigation-happy monolith is suing the state Public Utility Commission, claiming, among many other things, that its First Amendment rights have been violated (because the company is unhappy about the terms under which it is obliged to provide service there).

Comcast took in more than $200 million in Vermont last year. According to the state commission, it has “overall scale and ubiquitous presence” throughout Vermont. No other cable operator in the state reported more than $18 million in revenue in 2016, and only one reported making more than $8 million. That’s a nice summary of the situation in many places in the country: There’s usually just one very large cable operator.

We got into this mess of local cable monopolies throughout the country because Comcast and Time Warner Cable, the two giants, have grown by acquiring companies and swapping systems between themselves to ensure that they avoid competition in particular regions. And because they’re so big, they can spread their costs across zillions of customers, making it difficult for any new provider of service to do it more cheaply than they can.

Comcast’s history in Vermont is a case in point. In 2005 the company bought the now-defunct Adelphia Cable’s Vermont business. That was quite a deal—the Green Mountain State systems were a tiny part of a mega-arrangement that had Comcast and Time Warner Cable both buying up parts of Adelphia and trading millions of subscribers between themselves.

Take a deep breath before you decode this next sentence. Time Warner Cable got Adelphia’s systems in the Carolinas, and swapped its systems in Minneapolis, Memphis, and Jackson for Comcast’s holdings in Dallas, Los Angeles, and Cleveland. Time Warner became the largest cable provider in Los Angeles and New York City. Comcast got new customers in Washington, D.C. and Boston.

In the decade since the Adelphia deal and the swaps, both companies have gone from strength to strength: Comcast is the biggest ISP and pay-TV company in the country, as well as one of the handful of major US media content companies. Time Warner Cable, now branding itself as Spectrum after its acquisition by Charter, is similarly enormous.

Along the way, Comcast has continued to operate in the leafy, hilly, thinly populated, freezing cold state of Vermont. Adelphia hadn’t done a great job, and so as a condition of allowing Comcast to buy Adelphia’s systems, the state regulator required Comcast to fulfill Adelphia’s preexisting obligation to extend its lines to unserved areas of the state.

Now Comcast’s franchise in Vermont is up for renewal, and the state wants that line extension work—an obligation to which Comcast agreed when it bought Adelphia—to continue, with Comcast duty-bound to build out 550 additional miles of cable over the next 11 years. Comcast can choose where to do the work so that it’s most cost-effective for the company, but it has to keep that work going, bringing lines carrying high-speed internet access (as well as, if desired, pay TV) to people who don’t currently have it.

Comcast is spitting mad. It says what the regulator is doing is “arbitrary, unprecedented, and will ultimately harm local cable subscribers by resulting in millions of dollars in increased cable costs.” That’s perplexing to the utilities commission: All that’s going on is that obligations based on the Adelphia conditions, to which Comcast agreed in order to consummate that mega-deal a decade ago, are continuing in the franchise renewal. And Comcast’s costs and margins are within its control; whether or not it chooses to pass along higher costs to consumers in Vermont (where the public already sees Comcast prices as high and rising) is up to Comcast. (Which, by the way, is valued at more than $180 billion.)

Comcast says it’s a “recognized provider of protected speech under the First Amendment and, as such, may not be singled out for undue burdens that infringe on such rights.” What’s the singling out here? Well, the regulator is saying that Comcast is the biggest operator in the state and can afford to extend its lines, in areas the company chooses, over the next 11 years. There’s a “large number of currently unserved communities in Comcast’s service area,” the regulator says. Comcast’s response? It says, essentially, that being called “biggest” amounts to “singling out”—choosing a particular speaker whose speech the state wants to constrain. Wow.

Comcast wants to use its own internal “line extension policy,” and charge whatever it wants for lines running to particular houses. It is arguing that the commission has to show that any particular extension will pay for itself. But that’s not the state policy, or indeed the way that telecommunications ever works. There are always thinly populated areas where the high upfront costs of building infrastructure are cross-subsidized by more thickly populated regions of subscribers. That’s what you have to do if you want everyone to be served.

This litigation is going to go on for a while. It will be painful. Vermonters shouldn’t hold their breath. Comcast, which Wall Street knows is essentially an unregulated public utility for high-speed internet access in the areas it covers, has unlimited resources to fight off this public-spirited regulator. As Wall Street’s Craig Moffett puts it, “Cable operators are not media companies, they are infrastructure providers. Their infrastructure is still advantaged.” Although there are many efforts in Vermont to provide fiber (including ECFiber), they’re still small: Comcast isn’t feeling any pressure to upgrade its lines to fiber. And, as Moffett has reported, Comcast from now on will be growing through price hikes, not through building new lines. It’s done with building new lines.

The whole thing is dispiriting.

So for a little uplift, here’s my second American story. Take a look at how well we’ve done wiring up schools and libraries. Since the Obama administration announced in 2014 that every school and library should be connected to fiber, with a minimum of 100 Mbps of service for every student, we’ve now reached nearly 40 million students and 2.6 million teachers in tens of thousands of schools. About 97 percent of schools are now equipped for digital learning.

How did we do this? Federal subsidies, for one thing. But two other elements were crucial: All the subsidized wires had to be fiber optic, infinitely upgradeable into the future; and the prices charged by operators to schools had to be public. That price data broke the market open: Across the country, schools that used to be paying $22 per Mbps as recently as 2013 are now paying $4.90, just because they can pick up the phone and point out that other schools are paying less for the same services.

We’re not done. 6.5 million students still need these fiber connections. Prices in some areas are still unspeakably high. The Trump FCC is moving incredibly slowly on applications for funding. The money is available only until 2020, and, as reported by Government Technology, about half of schools haven't accessed funds yet. The risk is that the Ajit Pai FCC will undermine or destroy the program.

But our success with schools and libraries shows that industrial policy supporting a fiber upgrade is possible. A first, key step is getting granular service and price data out into the open, just as the schools and libraries did. Right now, that kind of information isn’t available to Americans. All parts of the country—every home and business, not just schools and libraries—should have the same supported freedom to get out from under their local cable monopolies (where these exist) or chart their own fiber-based futures.

This can be done without having the government directly involved in selling services. All the government has to do is subsidize and require unlit fiber connections running everywhere. We’re capable of great things, and a public fiber option could be one of them. We’re also capable of bad things—like letting Comcast run amok in the hills of Vermont.
https://www.wired.com/story/comcast-...f-free-speech/





Tom Wheeler to Ajit Pai: “Why the Silence” about Trump’s Media Threats?

Meanwhile, Trump continued attacks on NBC, media: "Sadly, they and others are Fake News."
David Kravets

Tom Wheeler, the former chairman of the Federal Communications Commission, implored his successor, Ajit Pai, to say something publicly about President Donald Trump's threats to take NBC and other networks off the air because of their news coverage of the chief executive.

"With all of the Fake News coming out of NBC and the Networks, at what point is it appropriate to challenge their License? Bad for country!" Trump tweeted on Wednesday. He later follow-up with another tweet: "Network news has become so partisan, distorted and fake that licenses must be challenged and, if appropriate, revoked. Not fair to public!"

Pai, who Trump appointed as FCC chariman, has remained silent as have his fellow Republicans on the regulatory agency. In a Friday essay on the Brookings Institution blog, Wheeler echoed a growing chorus of lawmakers, media organizations, and others calling for Pai and other GOP commissioners to end their two-day silence on the First Amendment issue.

The president may decide he can walk away from his oath of office, but the FCC commissioners have also sworn to uphold the Constitution. Despite this, they are AWOL. Why the silence from the Republicans at the FCC? The two Democratic commissioners, Mignon Clyburn and Jessica Rosenworcel, immediately spoke up on this constitutional affront.

But where are the Republicans? Chairman Ajit Pai and Commissioner Brendan Carr were both appointed by Donald Trump, and Commissioner Mike O’Rielly is a former Republican congressional staffer who prides himself on strict adherence to the law. Normally, they will tweet at the drop of a hat. Have they lost their Twitter handles?

Whether Trump's comments on the issue are political theater or not, it should be noted that the FCC doesn't issue broadcast licenses to networks. Instead, it licenses individual stations. Comcast-owned NBC owns, and operates, numerous stations in major markets, but NBC content also airs on many affiliate stations that are not owned by NBC.

It's not likely that the NBC stations could lose their licenses, as a First Amendment legal battle would commence if either Trump or the FCC moved to strip the licenses.

Trump's threat against NBC was in response to the network's report that the president was thinking about dramatically increasing the US nuclear arsenal. According to the NBC report, which cites anonymous sources:

According to the officials present, Trump’s advisers, among them the Joint Chiefs of Staff and Secretary of State Rex Tillerson, were surprised. Officials briefly explained the legal and practical impediments to a nuclear buildup and how the current military posture is stronger than it was at the height of the buildup. In interviews, they told NBC News that no such expansion is planned.

The July 20 meeting was described as a lengthy and sometimes tense review of worldwide U.S. forces and operations. It was soon after the meeting broke up that officials who remained behind heard Tillerson say that Trump is a "moron."

While the Republican commissioners on the FCC have remained silent, Trump kept up the pressure on NBC News on Friday.

The president retweeted former Fox News host Bill O'Reilly's statement that, "The President will not be able to impact licenses, but he is doing major damage to the @NBC brand." Trump added a statement of his own: "Sadly, they and others are Fake News, and the public is just beginning to figure it out!"

The FCC did not respond for comment.
https://arstechnica.com/tech-policy/...media-threats/





'Our Minds Can be Hijacked': the Tech Insiders Who Fear a Smartphone Dystopia

Google, Twitter and Facebook workers who helped make technology so addictive are disconnecting themselves from the internet. Paul Lewis reports on the Silicon Valley refuseniks alarmed by a race for human attention
Paul Lewis

Justin Rosenstein had tweaked his laptop’s operating system to block Reddit, banned himself from Snapchat, which he compares to heroin, and imposed limits on his use of Facebook. But even that wasn’t enough. In August, the 34-year-old tech executive took a more radical step to restrict his use of social media and other addictive technologies.

Rosenstein purchased a new iPhone and instructed his assistant to set up a parental-control feature to prevent him from downloading any apps.

He was particularly aware of the allure of Facebook “likes”, which he describes as “bright dings of pseudo-pleasure” that can be as hollow as they are seductive. And Rosenstein should know: he was the Facebook engineer who created the “like” button in the first place.

A decade after he stayed up all night coding a prototype of what was then called an “awesome” button, Rosenstein belongs to a small but growing band of Silicon Valley heretics who complain about the rise of the so-called “attention economy”: an internet shaped around the demands of an advertising economy.

These refuseniks are rarely founders or chief executives, who have little incentive to deviate from the mantra that their companies are making the world a better place. Instead, they tend to have worked a rung or two down the corporate ladder: designers, engineers and product managers who, like Rosenstein, several years ago put in place the building blocks of a digital world from which they are now trying to disentangle themselves. “It is very common,” Rosenstein says, “for humans to develop things with the best of intentions and for them to have unintended, negative consequences.”

Rosenstein, who also helped create Gchat during a stint at Google, and now leads a San Francisco-based company that improves office productivity, appears most concerned about the psychological effects on people who, research shows, touch, swipe or tap their phone 2,617 times a day.

There is growing concern that as well as addicting users, technology is contributing toward so-called “continuous partial attention”, severely limiting people’s ability to focus, and possibly lowering IQ. One recent study showed that the mere presence of smartphones damages cognitive capacity – even when the device is turned off. “Everyone is distracted,” Rosenstein says. “All of the time.”

But those concerns are trivial compared with the devastating impact upon the political system that some of Rosenstein’s peers believe can be attributed to the rise of social media and the attention-based market that drives it.

Drawing a straight line between addiction to social media and political earthquakes like Brexit and the rise of Donald Trump, they contend that digital forces have completely upended the political system and, left unchecked, could even render democracy as we know it obsolete.

In 2007, Rosenstein was one of a small group of Facebook employees who decided to create a path of least resistance – a single click – to “send little bits of positivity” across the platform. Facebook’s “like” feature was, Rosenstein says, “wildly” successful: engagement soared as people enjoyed the short-term boost they got from giving or receiving social affirmation, while Facebook harvested valuable data about the preferences of users that could be sold to advertisers. The idea was soon copied by Twitter, with its heart-shaped “likes” (previously star-shaped “favourites”), Instagram, and countless other apps and websites.

It was Rosenstein’s colleague, Leah Pearlman, then a product manager at Facebook and on the team that created the Facebook “like”, who announced the feature in a 2009 blogpost. Now 35 and an illustrator, Pearlman confirmed via email that she, too, has grown disaffected with Facebook “likes” and other addictive feedback loops. She has installed a web browser plug-in to eradicate her Facebook news feed, and hired a social media manager to monitor her Facebook page so that she doesn’t have to.

“One reason I think it is particularly important for us to talk about this now is that we may be the last generation that can remember life before,” Rosenstein says. It may or may not be relevant that Rosenstein, Pearlman and most of the tech insiders questioning today’s attention economy are in their 30s, members of the last generation that can remember a world in which telephones were plugged into walls.

It is revealing that many of these younger technologists are weaning themselves off their own products, sending their children to elite Silicon Valley schools where iPhones, iPads and even laptops are banned. They appear to be abiding by a Biggie Smalls lyric from their own youth about the perils of dealing crack cocaine: never get high on your own supply.

•••

One morning in April this year, designers, programmers and tech entrepreneurs from across the world gathered at a conference centre on the shore of the San Francisco Bay. They had each paid up to $1,700 to learn how to manipulate people into habitual use of their products, on a course curated by conference organiser Nir Eyal.

Eyal, 39, the author of Hooked: How to Build Habit-Forming Products, has spent several years consulting for the tech industry, teaching techniques he developed by closely studying how the Silicon Valley giants operate.

“The technologies we use have turned into compulsions, if not full-fledged addictions,” Eyal writes. “It’s the impulse to check a message notification. It’s the pull to visit YouTube, Facebook, or Twitter for just a few minutes, only to find yourself still tapping and scrolling an hour later.” None of this is an accident, he writes. It is all “just as their designers intended”.

He explains the subtle psychological tricks that can be used to make people develop habits, such as varying the rewards people receive to create “a craving”, or exploiting negative emotions that can act as “triggers”. “Feelings of boredom, loneliness, frustration, confusion and indecisiveness often instigate a slight pain or irritation and prompt an almost instantaneous and often mindless action to quell the negative sensation,” Eyal writes.

Attendees of the 2017 Habit Summit might have been surprised when Eyal walked on stage to announce that this year’s keynote speech was about “something a little different”. He wanted to address the growing concern that technological manipulation was somehow harmful or immoral. He told his audience that they should be careful not to abuse persuasive design, and wary of crossing a line into coercion.

But he was defensive of the techniques he teaches, and dismissive of those who compare tech addiction to drugs. “We’re not freebasing Facebook and injecting Instagram here,” he said. He flashed up a slide of a shelf filled with sugary baked goods. “Just as we shouldn’t blame the baker for making such delicious treats, we can’t blame tech makers for making their products so good we want to use them,” he said. “Of course that’s what tech companies will do. And frankly: do we want it any other way?”

Without irony, Eyal finished his talk with some personal tips for resisting the lure of technology. He told his audience he uses a Chrome extension, called DF YouTube, “which scrubs out a lot of those external triggers” he writes about in his book, and recommended an app called Pocket Points that “rewards you for staying off your phone when you need to focus”.

Finally, Eyal confided the lengths he goes to protect his own family. He has installed in his house an outlet timer connected to a router that cuts off access to the internet at a set time every day. “The idea is to remember that we are not powerless,” he said. “We are in control.”

But are we? If the people who built these technologies are taking such radical steps to wean themselves free, can the rest of us reasonably be expected to exercise our free will?

Not according to Tristan Harris, a 33-year-old former Google employee turned vocal critic of the tech industry. “All of us are jacked into this system,” he says. “All of our minds can be hijacked. Our choices are not as free as we think they are.”

Harris, who has been branded “the closest thing Silicon Valley has to a conscience”, insists that billions of people have little choice over whether they use these now ubiquitous technologies, and are largely unaware of the invisible ways in which a small number of people in Silicon Valley are shaping their lives.

A graduate of Stanford University, Harris studied under BJ Fogg, a behavioural psychologist revered in tech circles for mastering the ways technological design can be used to persuade people. Many of his students, including Eyal, have gone on to prosperous careers in Silicon Valley.

Harris is the student who went rogue; a whistleblower of sorts, he is lifting the curtain on the vast powers accumulated by technology companies and the ways they are using that influence. “A handful of people, working at a handful of technology companies, through their choices will steer what a billion people are thinking today,” he said at a recent TED talk in Vancouver.

“I don’t know a more urgent problem than this,” Harris says. “It’s changing our democracy, and it’s changing our ability to have the conversations and relationships that we want with each other.” Harris went public – giving talks, writing papers, meeting lawmakers and campaigning for reform after three years struggling to effect change inside Google’s Mountain View headquarters.

It all began in 2013, when he was working as a product manager at Google, and circulated a thought-provoking memo, A Call To Minimise Distraction & Respect Users’ Attention, to 10 close colleagues. It struck a chord, spreading to some 5,000 Google employees, including senior executives who rewarded Harris with an impressive-sounding new job: he was to be Google’s in-house design ethicist and product philosopher.

Looking back, Harris sees that he was promoted into a marginal role. “I didn’t have a social support structure at all,” he says. Still, he adds: “I got to sit in a corner and think and read and understand.”

He explored how LinkedIn exploits a need for social reciprocity to widen its network; how YouTube and Netflix autoplay videos and next episodes, depriving users of a choice about whether or not they want to keep watching; how Snapchat created its addictive Snapstreaks feature, encouraging near-constant communication between its mostly teenage users.

The techniques these companies use are not always generic: they can be algorithmically tailored to each person. An internal Facebook report leaked this year, for example, revealed that the company can identify when teens feel “insecure”, “worthless” and “need a confidence boost”. Such granular information, Harris adds, is “a perfect model of what buttons you can push in a particular person”.

Tech companies can exploit such vulnerabilities to keep people hooked; manipulating, for example, when people receive “likes” for their posts, ensuring they arrive when an individual is likely to feel vulnerable, or in need of approval, or maybe just bored. And the very same techniques can be sold to the highest bidder. “There’s no ethics,” he says. A company paying Facebook to use its levers of persuasion could be a car business targeting tailored advertisements to different types of users who want a new vehicle. Or it could be a Moscow-based troll farm seeking to turn voters in a swing county in Wisconsin.

Harris believes that tech companies never deliberately set out to make their products addictive. They were responding to the incentives of an advertising economy, experimenting with techniques that might capture people’s attention, even stumbling across highly effective design by accident.

A friend at Facebook told Harris that designers initially decided the notification icon, which alerts people to new activity such as “friend requests” or “likes”, should be blue. It fit Facebook’s style and, the thinking went, would appear “subtle and innocuous”. “But no one used it,” Harris says. “Then they switched it to red and of course everyone used it.”

That red icon is now everywhere. When smartphone users glance at their phones, dozens or hundreds of times a day, they are confronted with small red dots beside their apps, pleading to be tapped. “Red is a trigger colour,” Harris says. “That’s why it is used as an alarm signal.”

The most seductive design, Harris explains, exploits the same psychological susceptibility that makes gambling so compulsive: variable rewards. When we tap those apps with red icons, we don’t know whether we’ll discover an interesting email, an avalanche of “likes”, or nothing at all. It is the possibility of disappointment that makes it so compulsive.

It’s this that explains how the pull-to-refresh mechanism, whereby users swipe down, pause and wait to see what content appears, rapidly became one of the most addictive and ubiquitous design features in modern technology. “Each time you’re swiping down, it’s like a slot machine,” Harris says. “You don’t know what’s coming next. Sometimes it’s a beautiful photo. Sometimes it’s just an ad.”

•••

The designer who created the pull-to-refresh mechanism, first used to update Twitter feeds, is Loren Brichter, widely admired in the app-building community for his sleek and intuitive designs.

Now 32, Brichter says he never intended the design to be addictive – but would not dispute the slot machine comparison. “I agree 100%,” he says. “I have two kids now and I regret every minute that I’m not paying attention to them because my smartphone has sucked me in.”

Brichter created the feature in 2009 for Tweetie, his startup, mainly because he could not find anywhere to fit the “refresh” button on his app. Holding and dragging down the feed to update seemed at the time nothing more than a “cute and clever” fix. Twitter acquired Tweetie the following year, integrating pull-to-refresh into its own app.

Since then the design has become one of the most widely emulated features in apps; the downward-pull action is, for hundreds of millions of people, as intuitive as scratching an itch.

Brichter says he is puzzled by the longevity of the feature. In an era of push notification technology, apps can automatically update content without being nudged by the user. “It could easily retire,” he says. Instead it appears to serve a psychological function: after all, slot machines would be far less addictive if gamblers didn’t get to pull the lever themselves. Brichter prefers another comparison: that it is like the redundant “close door” button in some elevators with automatically closing doors. “People just like to push it.”

All of which has left Brichter, who has put his design work on the backburner while he focuses on building a house in New Jersey, questioning his legacy. “I’ve spent many hours and weeks and months and years thinking about whether anything I’ve done has made a net positive impact on society or humanity at all,” he says. He has blocked certain websites, turned off push notifications, restricted his use of the Telegram app to message only with his wife and two close friends, and tried to wean himself off Twitter. “I still waste time on it,” he confesses, “just reading stupid news I already know about.” He charges his phone in the kitchen, plugging it in at 7pm and not touching it until the next morning.

“Smartphones are useful tools,” he says. “But they’re addictive. Pull-to-refresh is addictive. Twitter is addictive. These are not good things. When I was working on them, it was not something I was mature enough to think about. I’m not saying I’m mature now, but I’m a little bit more mature, and I regret the downsides.”

Not everyone in his field appears racked with guilt. The two inventors listed on Apple’s patent for “managing notification connections and displaying icon badges” are Justin Santamaria and Chris Marcellino. Both were in their early 20s when they were hired by Apple to work on the iPhone. As engineers, they worked on the behind-the-scenes plumbing for push-notification technology, introduced in 2009 to enable real-time alerts and updates to hundreds of thousands of third-party app developers. It was a revolutionary change, providing the infrastructure for so many experiences that now form a part of people’s daily lives, from ordering an Uber to making a Skype call to receiving breaking news updates.

But notification technology also enabled a hundred unsolicited interruptions into millions of lives, accelerating the arms race for people’s attention. Santamaria, 36, who now runs a startup after a stint as the head of mobile at Airbnb, says the technology he developed at Apple was not “inherently good or bad”. “This is a larger discussion for society,” he says. “Is it OK to shut off my phone when I leave work? Is it OK if I don’t get right back to you? Is it OK that I’m not ‘liking’ everything that goes through my Instagram screen?”

His then colleague, Marcellino, agrees. “Honestly, at no point was I sitting there thinking: let’s hook people,” he says. “It was all about the positives: these apps connect people, they have all these uses – ESPN telling you the game has ended, or WhatsApp giving you a message for free from your family member in Iran who doesn’t have a message plan.”

A few years ago Marcellino, 33, left the Bay Area, and is now in the final stages of retraining to be a neurosurgeon. He stresses he is no expert on addiction, but says he has picked up enough in his medical training to know that technologies can affect the same neurological pathways as gambling and drug use. “These are the same circuits that make people seek out food, comfort, heat, sex,” he says.

All of it, he says, is reward-based behaviour that activates the brain’s dopamine pathways. He sometimes finds himself clicking on the red icons beside his apps “to make them go away”, but is conflicted about the ethics of exploiting people’s psychological vulnerabilities. “It is not inherently evil to bring people back to your product,” he says. “It’s capitalism.”

That, perhaps, is the problem. Roger McNamee, a venture capitalist who benefited from hugely profitable investments in Google and Facebook, has grown disenchanted with both companies, arguing that their early missions have been distorted by the fortunes they have been able to earn through advertising.

He identifies the advent of the smartphone as a turning point, raising the stakes in an arms race for people’s attention. “Facebook and Google assert with merit that they are giving users what they want,” McNamee says. “The same can be said about tobacco companies and drug dealers.”

That would be a remarkable assertion for any early investor in Silicon Valley’s most profitable behemoths. But McNamee, 61, is more than an arms-length money man. Once an adviser to Mark Zuckerberg, 10 years ago McNamee introduced the Facebook CEO to his friend, Sheryl Sandberg, then a Google executive who had overseen the company’s advertising efforts. Sandberg, of course, became chief operating officer at Facebook, transforming the social network into another advertising heavyweight.

McNamee chooses his words carefully. “The people who run Facebook and Google are good people, whose well-intentioned strategies have led to horrific unintended consequences,” he says. “The problem is that there is nothing the companies can do to address the harm unless they abandon their current advertising models.”

But how can Google and Facebook be forced to abandon the business models that have transformed them into two of the most profitable companies on the planet?

McNamee believes the companies he invested in should be subjected to greater regulation, including new anti-monopoly rules. In Washington, there is growing appetite, on both sides of the political divide, to rein in Silicon Valley. But McNamee worries the behemoths he helped build may already be too big to curtail. “The EU recently penalised Google $2.42bn for anti-monopoly violations, and Google’s shareholders just shrugged,” he says.

Rosenstein, the Facebook “like” co-creator, believes there may be a case for state regulation of “psychologically manipulative advertising”, saying the moral impetus is comparable to taking action against fossil fuel or tobacco companies. “If we only care about profit maximisation,” he says, “we will go rapidly into dystopia.”

•••

James Williams does not believe talk of dystopia is far-fetched. The ex-Google strategist who built the metrics system for the company’s global search advertising business, he has had a front-row view of an industry he describes as the “largest, most standardised and most centralised form of attentional control in human history”.

Williams, 35, left Google last year, and is on the cusp of completing a PhD at Oxford University exploring the ethics of persuasive design. It is a journey that has led him to question whether democracy can survive the new technological age.

He says his epiphany came a few years ago, when he noticed he was surrounded by technology that was inhibiting him from concentrating on the things he wanted to focus on. “It was that kind of individual, existential realisation: what’s going on?” he says. “Isn’t technology supposed to be doing the complete opposite of this?”

That discomfort was compounded during a moment at work, when he glanced at one of Google’s dashboards, a multicoloured display showing how much of people’s attention the company had commandeered for advertisers. “I realised: this is literally a million people that we’ve sort of nudged or persuaded to do this thing that they weren’t going to otherwise do,” he recalls.

He embarked on several years of independent research, much of it conducted while working part-time at Google. About 18 months in, he saw the Google memo circulated by Harris and the pair became allies, struggling to bring about change from within.

Williams and Harris left Google around the same time, and co-founded an advocacy group, Time Well Spent, that seeks to build public momentum for a change in the way big tech companies think about design. Williams finds it hard to comprehend why this issue is not “on the front page of every newspaper every day.

“Eighty-seven percent of people wake up and go to sleep with their smartphones,” he says. The entire world now has a new prism through which to understand politics, and Williams worries the consequences are profound.

The same forces that led tech firms to hook users with design tricks, he says, also encourage those companies to depict the world in a way that makes for compulsive, irresistible viewing. “The attention economy incentivises the design of technologies that grab our attention,” he says. “In so doing, it privileges our impulses over our intentions.”

That means privileging what is sensational over what is nuanced, appealing to emotion, anger and outrage. The news media is increasingly working in service to tech companies, Williams adds, and must play by the rules of the attention economy to “sensationalise, bait and entertain in order to survive”.

In the wake of Donald Trump’s stunning electoral victory, many were quick to question the role of so-called “fake news” on Facebook, Russian-created Twitter bots or the data-centric targeting efforts that companies such as Cambridge Analytica used to sway voters. But Williams sees those factors as symptoms of a deeper problem.

It is not just shady or bad actors who were exploiting the internet to change public opinion. The attention economy itself is set up to promote a phenomenon like Trump, who is masterly at grabbing and retaining the attention of supporters and critics alike, often by exploiting or creating outrage.

Williams was making this case before the president was elected. In a blog published a month before the US election, Williams sounded the alarm bell on an issue he argued was a “far more consequential question” than whether Trump reached the White House. The reality TV star’s campaign, he said, had heralded a watershed in which “the new, digitally supercharged dynamics of the attention economy have finally crossed a threshold and become manifest in the political realm”.

Williams saw a similar dynamic unfold months earlier, during the Brexit campaign, when the attention economy appeared to him biased in favour of the emotional, identity-based case for the UK leaving the European Union. He stresses these dynamics are by no means isolated to the political right: they also play a role, he believes, in the unexpected popularity of leftwing politicians such as Bernie Sanders and Jeremy Corbyn, and the frequent outbreaks of internet outrage over issues that ignite fury among progressives.

All of which, Williams says, is not only distorting the way we view politics but, over time, may be changing the way we think, making us less rational and more impulsive. “We’ve habituated ourselves into a perpetual cognitive style of outrage, by internalising the dynamics of the medium,” he says.

It is against this political backdrop that Williams argues the fixation in recent years with the surveillance state fictionalised by George Orwell may have been misplaced. It was another English science fiction writer, Aldous Huxley, who provided the more prescient observation when he warned that Orwellian-style coercion was less of a threat to democracy than the more subtle power of psychological manipulation, and “man’s almost infinite appetite for distractions”.

Since the US election, Williams has explored another dimension to today’s brave new world. If the attention economy erodes our ability to remember, to reason, to make decisions for ourselves – faculties that are essential to self-governance – what hope is there for democracy itself?

“The dynamics of the attention economy are structurally set up to undermine the human will,” he says. “If politics is an expression of our human will, on individual and collective levels, then the attention economy is directly undermining the assumptions that democracy rests on.” If Apple, Facebook, Google, Twitter, Instagram and Snapchat are gradually chipping away at our ability to control our own minds, could there come a point, I ask, at which democracy no longer functions?

“Will we be able to recognise it, if and when it happens?” Williams replies. “And if we can’t, then how do we know it hasn’t happened already?”
https://www.theguardian.com/technolo...alley-dystopia





Biometric ID Fairy: A Misguided Response to the Equifax Mess that Will Only Enrich Cybersecurity Grifters and Strengthen the Surveillance State
Jerri-Lynn Scofield

Former Equifax CEO Richard Smith is halfway through four days of testimony before various Congressional committees– and he is “deeply sorry” about the data breach that compromised the identities of more than 140 million Americans, as CNN reports.

The magnitude of the leak, the company’s cack-handed response, and the massive publicity that’s ensued has convinced the serious people that SOMETHING must be done.

Now, we might think that this might lead our Congress critters to a sober and sane assessment of cybersecurity defects, or the consequences of centralizing information collection without due care and oversight (whether it’s collected by a company, or a government agency).

Alternatively, dare we hope that the hack might spur a full rethink of the current regulatory realm– in which our personal financial data are available, 24/7, more or less for the asking, so that financial firms can grift us, safeguarded by firms such as Equifax who cannot be bothered to install a basic software patch to protect said data from being compromised.

(And, I might mention in passing, such personal financial data are often linked to other confidential personal data: e.g. medical records, purchasing history.)

Some members of Congress, such as Janet Schakowsky have proposed a radical break from the current system: shifting credit reporting from a universal system over which a consumer has no control, to one where you could opt out or even, have to opt in for companies to use your data.

Depending on how extensive the responses are, such a change would essentially trash the business models of the three major credit reporting agencies, by preventing them from selling your data without your consent. As Bloomberg reports in These Five Data-Security Ideas Emerged in the Equifax Hearing:

Schakowsky also said she’d like lawmakers to start a broader discussion about the role of credit-reporting firms. Consumers don’t have the ability to remove their information from Equifax’s databases because it’s furnished by banks and telecommunications companies. “Most Americans really don’t know how much information” the companies have, Schakowsky said. “I don’t want you to have my information anymore. I want to be in control of my information.”

Seems sensible, yes?

Which is why the serious people have to mount a full court press to make sure that something so sensible doesn’t get implemented.

Let no Crisis Go to Waste: Opportunity for Grifting

Rahm Emanuel once famously said, “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.”

Their response to the Equifax hack: replacing Social Security numbers with a system that might include a universal biometric identity system, plus further numeric verification, as Bloomberg reports in The White House and Equifax Agree: Social Security Numbers Should Go.

Big mistake. Although I admit, it would create ample opportunities for grifting.

First, Do No Harm: Biosecurity Fairy Delusion

One of the reasons put forward for replacing Social Security numbers is that these cannot be changed. So, once a data base is hacked– and a number is compromised– you’re still stuck with that number, and must cope with the consequences. As per Bloomberg, in The White House and Equifax Agree: Social Security Numbers Should Go:

The failure of the Social Security number is that there’s only one for each person, “once it’s compromised one time, you’re done,” Bob Stasio, a fellow at the Truman National Security Project and former chief of operations at the National Security Agency’s Cyber Operations Center.

Well, why’s that? These numbers are a man-made construct. They’re neither god given, tattooed into our foreheads, or embedded within us at birth– or at least not yet.

If problem is that once compromised the numbers cannot be changed, let’s change that. Rather than create an entirely new system, assuming that the form of the identifier solves the problem.

Stick with me as I lay out the alternative and point out the obvious– your biometric data: your DNA, your eyeball, your fingerprints. Now, that really cannot be changed. If those data are the means by which you’re known to a database and those are hacked or compromised, what would be your recourse? You can’t replace your eyes, or your fingers, or acquire completely different DNA.

Using a biometric system when the basic problem of securing and safeguarding data have yet to be solved will only worsen, not address, the hacking problem.

What we’re being asked to do is to turn over our biometric information, and then trust those to whom we do so to safeguard that data.

Given the current status of database security, corporate and governmental accountability, etc.: How do you think that is going to play out?

Especially as, Bloomberg quotes one of the principal advocates for change, Rob Joyce, special assistant to the president and White House cybersecurity coordinator, on what really concerns him:

“It’s really clear, there needs to be a change, but we’ll have to look at the details of what’s being proposed,” Joyce said. In the response to the Equifax hack, though, he said, “we need to be careful of Balkanizing the regulations. It’s really hard on companies today” facing local, state and federal regulators as well as international rules, he added.

Imagine that! In the face of this widespread data breach, what exercises Joyce is the regulatory burden companies must confront in securing your data. Is this for real?

Mangling Identification and Authentication

One basic problem is a confusion between the use of the identifier– whether it be a number, or biometric– for identification and authentication. Merely switching to a biometric system doesn’t address this, because if the database gets hacked, now the hackers have your biometric information too! Whereas currently, they only had access to numeric data.

Permit me to quote at length from an email from our own Naked Capitalism Richard Smith on this issue, as he understands these issues far better than I do. I do want to point out the spectacular opportunity for confusion in that our Richard shares a name with the former Equifax CEO.

So I want to underline that all quotations that follow are from the Naked Capitalism Richard Smith:

If one swaps an old number for a new:

the old compromised identifier is just as good for identifying a person as the new post hack one. The new number is redundant. Neither the old number nor the new number can authenticate and that is the nub of the issue.

In principle there are lots of ways to identify yourself to a computer system. but they all have to satisfy a uniqueness requirement. I assume the Social Security number does this in the US. Elsewhere one can do it by providing name address and date of birth. Admittedly this relies on there not being twins, triplets quads etc all with the same name and cohabiting, but AFAIK, so far so good.

So one way or another one has one’s unique identifier. All good. Uses can say who they are, and not get mixed up with someone else by the blind machine. But they still can’t prove that they are who they say they are. What a Social Security number or name/address/date of birth combo does not and cannot do, is prove that the person presenting the identification details is who he claims to be. Anyone can make up a name and address and even without data leaks or hacks, a genuine Social Security number can be fabricated. So it doesn’t matter if the Social Security number you produce is the original one or its post-hack replacement. Neither is trustworthy.

It’s particularly easy to fabricate ID if there’s no flesh and blood human in the loop. Since eliminating flesh and blood humans from the process is the whole name of the computing game, authentication is a big unsolved problem. Without authentication, there can be no trust. Without trust, the whole human social enterprise takes a fatal hit (see unauthenticated Twitterbots for a recently pervasive and obvious example). This is why people are saying ‘we need a whole new system’. They’re right, but until we build hackproof systems, it ain’t gonna happen. There now follows a shorter version of the previous sentence. It ain’t gonna happen.

Jerri-Lynn here: The basic problem with what the grifters propose to do is take your biometric information and use that to replace the Social Security number. But, does that really solve the authentication problem? And, if it does not, we end up in a worse situation than if we were to make the Social Security number system more robust and changeable (although admittedly, it would still not be perfec)t. Because biometrics, once hacked, cannot be changed.

Permit me to turn to Naked Capitalism’s Richard Smith again:

Biometrics illustrates the difficulty a different way. A biometric (fingerprint, retina scan or DNA sample) is also a unique identifier, but, (ignoring data breaches for a moment) it does two things at once:

It uniquely identifies you

It proves that you are who you say you are. An SSN or name/address/DoB cannot do this, not even in principle.

I should point out that even without data breaches, there are other ways to compromise biometric information– difficult, but doable, if the stakes are high enough. Steal a finger (or a fingerprint, for that matter), steal an eyeball, or supply someone else’s DNA swab to the unattended DNA scanner. The stuff of many gruesome scenes in recent action movies.

To be sure, not likely to be employed frequently, but the sort of thing that might come into play if the stakes are high enough.

But, here’s the key point, and I turn to Naked Capitalism’s Richard Smith again:

Unfortunately, as soon as you stop ‘ignoring data breaches for a moment’, and get real, this whole biometric idea dies miserably too. So it’s all a big waste of time until Internet-connected systems can be made verifiably hackerproof. And that is a ridiculously remote prospect.

Meaning that biometrics boils down to just a BS “solution”, which doesn’t solve the basic problem. In fact, one of the options discussed in the Bloomberg article would be to use biometrics and then provide you a super duper card with a fancy-sounding PIN:

Joseph Lorenzo Hall, chief technologist at the Center for Democracy and Technology in Washington, said one possibility could be giving individuals a private key, essentially a long cryptographic number that’s embedded in a “physical token” that then requires users to verify that the number belongs to them. It could work like the chip in a credit card that requires the owner to enter a pin allowing use. He pointed to Estonia where they have deployed such cards that people use to validate their identity.

“Your pin unlocks your ability to use that big number,” he said. The challenge is how to create the identifiers and how to distribute the keys. “It’s very promising” and “it’s possible to technically design something like this” but it could be expensive to design and disseminate such material to each American, he said. “This is a pretty big endeavor.”

So someone holds you up, gets your new, improved, super duper identity card, and makes you give them your PIN. Or hacks the database with the biometric ID and gets the info loaded onto your super duper card. Now they have your biometric info from a system that provides no greater security than if a more sophisticated Social Security number system were created, -reinforced by the same cryptographic PIN.

But the logical problems here aren’t the point.

Replacing Social Security numbers with a new biometric system would provide spectacular opportunities for grift.

And, as regular readers know, that’s almost certainly not a bug, but a feature.

Centralization Draws Hackers

It should be apparent that part of the problem is that the centralization of so much valuable information is what draws hackers. And the more we centralize, the more precious the prize will be. I’m not by any means conversant on the ins and outs of cybersecurity.

But as a starting point, maybe should rethink the whole impulse to centralize such data collection, for starters.

And, after such a thought experiment, then further focus on obvious measures to safeguard such information– such as installing regular software patches that have prevented the Equifax hack– should be the priority.

And, how about bringing back a concept in rather short supply in C-suites– that of accountability? Perhaps measures to increase that might be a better idea than gee whiz misdirected techno-wizardry.

Panopticon

Do we really want to move to a world where all personal data are collected, and can be surveilled? I know, we’re far further along that path than most of us as willing to admit. But at the moment, in the United States, biometric data haven’t been fully integrated into the mess. Shouldn’t we figure out better ways to secure databases before we consider shovelling even more information into them?

Aadhar is No Model

Let me close by discussing obvious and well-reported problems with a system that relies heavily on biometric identification– so we can see some of the practical problems that have emerged with this seeming panacea.

India has rolled out the Aadhar identity system, a unique 12 digit identification number, which also incorporates biometric data. One of the experts quoted by Bloomberg, Bruce Schneier, a fellow at Harvard’s Kennedy School of Government, mentioned this as a possible model:

He pointed to India’s wide-scale rollout of the Aadhaar card, a unique number provided to citizens after collecting their biometric information — fingerprints and an iris scan — along with demographic details, to almost 1.2 billion people. In the U.S., a more secure system could be designed, “but magic math costs money,” he said.

Not a great idea.

I’ll only discuss three points here. First, the move to make the Aadhar number a universal identifier means that when it is compromised (as has already occurred and I discuss further below), that kicks off considerable potential knock-on effects for the person whose identity has been hacked.

Just one example: SIM cards are more tightly controlled in India than many other places– in part due to concerns about terrorism– and the process for applying for a SIM is highly bureaucratic. A recent Indian court decision mandated mobile users link their mobile accounts to their Aadhar number. The more functions are loaded onto the Aadhar, the more things might need to change in the light of a potential data hack. So, say your Aadhar number is hacked– that means you may need to change your mobile too. Big bummer.

It also means that people who are not Indian citizens but spend considerable time in the country– resident foreigners, various categories of Indians who visit India but reside outside of the country– find it considerably more difficult to get access to services that require Aadhar identification.

Second, Aadhar information has already been hacked. Just a couple of examples to illustrate this is not just some imaginary scenario. As reported by the Economic Times in Reliance Jio data leak: Tech gets smarter but your safety gets dumber in July, “a website called ‘magicapk’ leaked details such as email addresses, names and Aadhar ID details (in some cases) of Reliance Jio smartphone users”.

And, another: a graduate of one prestigious Indian Institute of Technology (IIT) committed more serious and sustained hack, stealing Aadhar data to verify the identities of people who used his app. As reported in The Indian Express, in IIT Kharagpur graduate hacked Aadhaar data through Digital India app: Police, in August:

an IIT Kharagpur graduate who has been accused of hacking into the central identities data repository of the Unique Identification Development Authority of India’s (UIDAI) Aadhaar project gained access to the repository through the Digital India e-hospital initiative of the Ministry of Electronics and Information Technology, police investigation has revealed. Bengaluru Police on Thursday formally announced the arrest of Abhinav Srivastava — a 31-year-old hailing from Uttar Pradesh — in connection with a complaint of unauthorised access of the central identities data repository filed by the UIDAI on July 26.

The complaint to the police stated said that Srivastava had accessed UIDAI data without authorisation between January 1 and July 26 for an app called ‘eKYC Verification’. The app delivered demographic data like name, address, phone number of individuals from the central identities data depository of Aadhaar to authenticate unique identity numbers. It was placed on Google Play Store with the claim that it was developed by an entity called myGov linked to the start-up Qarth Technologies, which had been acquired by the taxi hailing service Ola in 2016.

And a final, particularly controversial Aadhar issue: Wikileaks last month released material related to Expresslane malware— suggesting that the CIA had hacked the Aadhar database (see, for example, CIA SPIES INDIA’S BIOMETRIC AADHAAR DATABASE IN REAL TIME in myhacker.net or Aadhaar security: WikiLeaks hints at CIA access to India’s national ID card database in DNA).

Now, to be fair, I should acknowledge that the in response to this Wikileaks claim– “In another tweet, they published an article that says “Aadhaar in the hand of spies”” DNA reported:

However, the official sources in India have denied any such claims, say media reports.

Earlier, defending its decision to make Aadhaar a necessary document for availing benefits of government schemes, the Union Law Minister Ravi Shankar Prasad informed the Supreme Court that the government has formed a high-level committee for Aadhaar data protection. However, the Supreme Court refused to pass any interim order against the Central government notification for making Aadhaar mandatory. The Supreme Court was hearing a petition that said making Aadhaar compulsory would violate the right to privacy of an individual.

I do wish to point out that concerns that security of the Aadhar database was compromised from the get go have long dogged the program, as reported in The Sunday Guardian.com, Foreign agencies can access Aadhar data:

The biometric and demographic data collected for Aadhar may be extremely vulnerable to access by foreign intelligence services, defence services and multinationals interested in the commercial use of the data.

The three private entities contracted by the Unique Identification Authority of India (UIDAI) for biometric solutions for Aadhar, have strong ties with the US and the French intelligence or defence establishments.

There are myriad other problems with the Aadhar system– which alas, I lack space to discuss here. I do want to emphasize that Aadhar is so riddled with problems that I think it’s a very poor model the US to follow.

Bottom Line

The Equifax hack has revealed the sad and sorry state of cybersecurity. But inviting the biometric ID fairy drop by and replace the existing Social Security number is not the solution.

It would only mean turning over your biometric information, as another source of data to be mined by corporations, and surveilled by those who want to do so. And it would ultimately not foil identity theft.

Let me close with a further snippet reported by Bloomberg on what the real target is here:

Joyce’s comments helped take some of the focus off Equifax’s blunders, analysts at Cowen Inc. said in a note Tuesday.

The “White House may be indirectly coming to Equifax’s rescue,” they wrote. “This reduces the risk of business-model-busting legislation such as a requirement that consumers opt-in to a credit bureau collecting their data.”

This research report thinks this sleight of hand is unintended. I don’t think so.
https://www.nakedcapitalism.com/2017...nce-state.html





How Israel Caught Russian Hackers Scouring the World for U.S. Secrets
Nicole Perlroth and Scott Shane

It was a case of spies watching spies watching spies: Israeli intelligence officers looked on in real time as Russian government hackers searched computers around the world for the code names of American intelligence programs.

What gave the Russian hacking, detected more than two years ago, such global reach was its improvised search tool — antivirus software made by a Russian company, Kaspersky Lab, that is used by 400 million people worldwide, including by officials at some two dozen American government agencies.

The Israeli officials who had hacked into Kaspersky’s own network alerted the United States to the broad Russian intrusion, which has not been previously reported, leading to a decision just last month to order Kaspersky software removed from government computers.

The Russian operation, described by multiple people who have been briefed on the matter, is known to have stolen classified documents from a National Security Agency employee who had improperly stored them on his home computer, on which Kaspersky’s antivirus software was installed. What additional American secrets the Russian hackers may have gleaned from multiple agencies, by turning the Kaspersky software into a sort of Google search for sensitive information, is not yet publicly known.

The current and former government officials who described the episode spoke about it on condition of anonymity because of classification rules.

Like most security software, Kaspersky Lab’s products require access to everything stored on a computer in order to scour it for viruses or other dangers. Its popular antivirus software scans for signatures of malicious software, or malware, then removes or neuters it before sending a report back to Kaspersky. That procedure, routine for such software, provided a perfect tool for Russian intelligence to exploit to survey the contents of computers and retrieve whatever they found of interest.

The National Security Agency and the White House declined to comment for this article. The Israeli Embassy declined to comment, and the Russian Embassy did not respond to requests for comment.

The Wall Street Journal reported last week that Russian hackers had stolen classified N.S.A. materials from a contractor using the Kaspersky software on his home computer. But the role of Israeli intelligence in uncovering that breach and the Russian hackers’ use of Kaspersky software in the broader search for American secrets have not previously been disclosed.

Kaspersky Lab denied any knowledge of, or involvement in, the Russian hacking. “Kaspersky Lab has never helped, nor will help, any government in the world with its cyberespionage efforts,” the company said in a statement Tuesday afternoon. Kaspersky Lab also said it “respectfully requests any relevant, verifiable information that would enable the company to begin an investigation at the earliest opportunity.”

The Kaspersky-related breach is only the latest bad news for the security of American intelligence secrets. It does not appear to be related to a devastating leak of N.S.A. hacking tools last year to a group, still unidentified, calling itself the Shadow Brokers, which has placed many of them online. Nor is it evidently connected to a parallel leak of hacking data from the C.I.A. to WikiLeaks, which has posted classified C.I.A. documents regularly under the name Vault7.

For years, there has been speculation that Kaspersky’s popular antivirus software might provide a back door for Russian intelligence. More than 60 percent, or $374 million, of the company’s $633 million in annual sales come from customers in the United States and Western Europe. Among them have been nearly two dozen American government agencies — including the State Department, the Department of Defense, Department of Energy, Justice Department, Treasury Department and the Army, Navy and Air Force.

The N.S.A. bans its analysts from using Kaspersky antivirus at the agency, in large part because the agency has exploited antivirus software for its own foreign hacking operations and knows the same technique is used by its adversaries.

“Antivirus is the ultimate back door,” Blake Darché, a former N.S.A. operator and co-founder of Area 1 Security. “It provides consistent, reliable and remote access that can be used for any purpose, from launching a destructive attack to conducting espionage on thousands or even millions of users.”

On Sept. 13, the Department of Homeland Security ordered all federal executive branch agencies to stop using Kaspersky products, giving agencies 90 days to remove the software. Acting Department of Homeland Security Secretary Elaine C. Duke cited the “information security risks” presented by Kaspersky and said the company’s antivirus and other software “provide broad access to files” and “can be exploited by malicious cyber actors to compromise” federal computer systems.

That directive, which some officials thought was long overdue, was based, in large part, on intelligence gleaned from Israel’s 2014 intrusion into Kaspersky’s corporate systems. It followed months of discussions among intelligence officials, which included a study of how Kaspersky’s software works and the company’s suspected ties with the Kremlin.

“The risk that the Russian government, whether acting on its own or in collaboration with Kaspersky,” D.H.S. said in its statement, “could capitalize on access provided by Kaspersky products to compromise federal information and information systems directly implicates U.S. national security.”

Kaspersky Lab did not discover the Israeli intrusion into its systems until mid-2015, when a Kaspersky engineer testing a new detection tool noticed unusual activity in the company’s network. The company investigated and detailed its findings in June 2015 in a public report.

The report did not name Israel as the intruder but noted that the breach bore striking similarities to a previous attack, known as “Duqu,” which researchers had attributed to the same nation states responsible for the infamous Stuxnet cyberweapon. Stuxnet was a joint American-Israeli operation that successfully infiltrated Iran’s Natanz nuclear facility, and used malicious code to destroy a fifth of Iran’s uranium centrifuges in 2010.

Kaspersky reported that its attackers had used the same algorithm and some of the same code as Duqu, but noted that in many ways it was even more sophisticated. So the company researchers named the new attack Duqu 2.0, noting that other victims of the attack were prime Israeli targets.

Among the targets Kaspersky uncovered were hotels and conference venues used for closed-door meetings by members of the United Nations Security Council to negotiate the terms of the Iran nuclear deal — negotiations from which Israel was excluded. Several targets were in the United States, which suggested that the operation was Israel’s alone, not a joint American-Israeli operation like Stuxnet.

Kaspersky’s researchers noted that attackers had managed to burrow deep into the company’s computers and evade detection for months. Investigators later discovered that the Israeli hackers had implanted multiple back doors into Kaspersky’s systems, employing sophisticated tools to steal passwords, take screenshots, and vacuum up emails and documents.

In its June 2015 report, Kaspersky noted that its attackers seemed primarily interested in the company’s work on nation-state attacks, particularly Kaspersky’s work on the “Equation Group” — its private industry term for the N.S.A. — and the “Regin” campaign, another industry term for a hacking unit inside the United Kingdom’s intelligence agency, the Government Communications Headquarters, or GCHQ.

Israeli intelligence officers informed the N.S.A. that in the course of their Kaspersky hack, they uncovered evidence that Russian government hackers were using Kaspersky’s access to aggressively scan for American government classified programs, and pulling any findings back to Russian intelligence systems. They provided their N.S.A. counterparts with solid evidence of the Kremlin campaign in the form of screenshots and other documentation, according to the people briefed on the events.

It is not clear whether, or to what degree, Eugene V. Kaspersky, the founder of Kaspersky Lab, and other company employees have been complicit in the hacking using their products. Technical experts say that at least in theory, Russian intelligence hackers could have exploited Kaspersky’s worldwide deployment of software and sensors without the company’s cooperation or knowledge. Another possibility is that Russian intelligence officers might have infiltrated the company without the knowledge of its executives.

But experts on Russia say that under President Vladimir V. Putin, a former K.G.B. officer, businesses asked for assistance by Russian spy agencies may feel they have no choice but to give it. To refuse might well invite hostile action from the government against the business or its leaders. Mr. Kaspersky, who attended an intelligence institute and served in Russia’s Ministry of Defense, would have few illusions about the cost of refusing a Kremlin request.

Steven L. Hall, a former chief of Russian operations at the C.I.A., said his former agency never used Kaspersky software, but other federal agencies did. By 2013, he said, Kaspersky officials were “trying to do damage control and convince the U.S. government that it was just another security company.”

He didn’t buy it, Mr. Hall said. “I had the gravest concerns about Kaspersky, and anyone who worked on Russia or in counterintelligence shared those concerns,” he said.
https://www.nytimes.com/2017/10/10/t...a-hacking.html





Russians in Silicon Valley Can’t Shake Hacking’s Shadow
Nellie Bowles

Pavel Cherkashin, a Russian investor based in this city, thought he had the perfect name for a Catholic church that he is spending $11.5 million converting into a tech palace. It would be called Hack Temple.

But that was before the nearly daily deluge of news about Russian efforts to influence the 2016 presidential election by hacking computers and using Facebook and Twitter to spread inflammatory messages and sow division.

“We had so many concerns from our investors saying this would be inappropriate and we should change it,” said Mr. Cherkashin, 44, who planned to officially open Hack Temple this fall. “A bunch of Russian guys opening a hacker temple in the middle of San Francisco at a time when Russian hackers are considered the most evil in the world. They say you can’t.”

With news of the hacking and influence campaigns escalating all year, the Russian immigrant community of Silicon Valley, which numbers in the tens of thousands, is in a strange new position. Some Russian venture capitalists said start-ups were more wary about taking their funding, while several Russian-born engineers said they were being treated differently socially and in their companies. Lawyers also said some tech firms were installing tighter security measures restricting what data foreign-born coders can see.

At the same time, many said that as Russia gained a reputation for its hackers, interest in hiring its tech talent was increasing.

The tension is new. Russian immigrants helped build the last generation of Silicon Valley behemoths: The Google co-founder Sergey Brin and the early Facebook investor Yuri Milner are both Russian-born.

Now when Mr. Cherkashin, a partner at GVA Capital, which is investing $120 million in start-ups, pitches companies on why they should take investments from him, he gets skeptical questions as soon as they hear his accent, he said.

“It feels like if you’re a politician and you fell into a sex scandal, and everybody knows you for this, and every time someone recognizes you they have this smile on their face, ‘So how’s your personal life doing?’ ” said Mr. Cherkashin, whose firm was incorporated in the United States.

“This is how I feel every time I meet with an investor and they hear my Russian accent,” he added. “They have this smile on their face.”

Prospective partners and start-ups invariably ask the same question, Mr. Cherkashin said: Is his money clean?

“This question comes up two or three times a day,” he said. “I don’t think people would ask this question to a manager from another region.”

Julian Zegelman, an entrepreneur and a lawyer who represents and invests in Russian-speaking founders, said potential local tech partners worried they would accidentally get into business with the Russian government.

“They don’t want to be invested or dealing with companies whose technical talent is captive in Russia,” he said.

Mr. Zegelman said he had noticed that some cybersecurity firms, big tech companies, government customers and large venture capital firms were the most wary about working with new Russian immigrants. Yet some start-ups and small investment firms are more interested in Russian talent now.

“If you would have asked 10 years ago what Russia was known for, it would be Putin, the oligarchs and oil,” he said, referring to Russia’s president, Vladimir V. Putin. “Now when you ask folks, ‘What do you think about Russia?’ you get things back like: ‘Oh, great cryptography.’ ‘Oh, it’s a lot of talented engineers.’”

Leonard Grayver, a lawyer specializing in start-ups who is on the board of the American Business Association of Russian-Speaking Professionals, said the hacking had put Russian tech talent at “the forefront.” His firm brokers technology deals between Russia and Silicon Valley, handling tech licensing and talent acquisitions, and he said the average size of a deal had risen to $4 million this year, from $1 million to $2 million last year.

And as companies staff up with Russian talent, he is getting a new question that he finds bizarre: “Are we letting the wolf in the henhouse? ” Some companies have asked him to help arrange for heightened internal security, he added.

“A lot of clients are trying to find ways to hire those Russian hackers and at the same time instituting heightened security protocols internally,” he said. “They’re isolating source code so you don’t have access to the main tree.”

When young Russian technologists first arrive in San Francisco, the person they often text is the investor Nicholas Davidov. Mr. Davidov, 30, said he was part of what he called the New Wave, which is a group of Russian founders and engineers who came over to Silicon Valley in the last few years. They gather at a Russian immigrant-owned bar in San Francisco, Rum & Sugar, and every Wednesday at a smoke shop in Redwood City, Calif., where they share stories.

Most of the comments that Mr. Davidov and his friends now get are couched as jokes, he said.

“Somebody announced me on one of the conferences where I was speaking and said, ‘I invited Nick because I wanted to collude with Russians,’ ” he said. “Just a lot of jokes.”

Mr. Davidov is an investor in Wallarm, a cybersecurity firm based in San Francisco. He attributes Wallarm’s double-digit growth this year directly to the peculiar reputation that has come from the election-influence campaign and the fact that the company’s founders are Russian.

Ivan Novikov, 29, a co-founder and the chief executive of Wallarm, was less enthusiastic about how news of Russian interference in the election has affected his life.

“Technically, any Russian who works in I.T. is a hacker, so we’re all ‘Russian hackers,’ and a lot of people like to mention it, but it’s not so funny when it’s 10 times per day or 10 times per party,” he said. “We definitely don’t like this hype about it.”

Some Russian-born entrepreneurs said they had noticed no change in how they were treated. Stanislav Shalunov, a co-founder of Open Garden, which develops peer-to-peer mesh networking software, said he hadn’t experienced anything different.

“With all this hacking news, I don’t think anyone alleges anyone from the Russian tech community in the U.S. is engaged in it,” he said. “And it’s pretty obvious that lots of people from Russia are getting hired.”

Back at what may only briefly be known as the Hack Temple (investors want a new name before it officially opens), two young Russian entrepreneurs made breakfast sandwiches in the rectory kitchen one morning last week. The building has eight bedrooms, some with bunks to fit up to four; a living room full of Midcentury Modern sofas; and a patio covered in artificial turf and often used for beer pong. Before Mr. Cherkashin bought the building in January 2016, it was Nuestra Señora de Guadalupe Church.

In the cavernous nave, the stained-glass saints were covered in gauzy panels to soften the religious feel. Volunteers have fixed the broken organ so it plays again, now for parties.

“If there would be a city in the world where you can go to church and a hackers’ house,” Mr. Cherkashin said, “it would only be this one.”

On the wall along one of the aisles, Evgeniy Lapchenko, the Ukrainian artist, has remade Hieronymus Bosch’s “Garden of Earthly Delights.” Among the twisted human figures are tech luminaries: the Apple co-founder Steve Jobs taking a selfie, revelers at Burning Man and Mr. Brin of Google in a self-driving car.

As for rebranding Hack Temple, Mr. Cherkashin hasn’t found a new name he likes.

“It can be called the Start-Up Temple,” he said. “But it’s just too boring.”
https://www.nytimes.com/2017/10/08/t...on-valley.html





Senior U.S. Legal Official Meeting UK Leaders to Tackle Online Security Issues
Eric Auchard

A top U.S. government legal official has given strong backing to Britain’s campaign to force Silicon Valley to compromise on encrypted communications, rebuking tech firms for failing to balance crime-fighting demands with privacy needs.

U.S. Deputy Attorney General Rod Rosenstein met with senior British government officials including interior minister Amber Rudd and the chief of MI5 intelligence agency on Thursday to discuss encryption. He plans to see the head of Britain’s GCHQ service on Friday, he told Reuters.

“At this point we are coordinating with our foreign partners as to what the challenges are,” Rosenstein said in response to a question from a reporter at the Global Cyber Security Summit, organized by Skytop Strategies.

Top officials in Prime Minister Theresa May’s government, including Rudd, have been trying to rein in encryption but have been met quiet resistance from tech leaders like Facebook (FB.O), Google (GOOGL.O) and Twitter (TWTR.N). Critics see the demands as a back door for government snooping.

In his speech, Rosenstein decried what he called “warrant-proof encryption that puts zero value on law enforcement”.

British and U.S. officials argue that default encryption settings on free messaging apps, such as Facebook’s WhatsApp, hinder authorities’ ability to collect evidence needed to pursue criminals, even with clear, court-ordered mandates.

“Increasingly, the tools we use to collect evidence run up against encryption tools which are designed to defeat them,” Rosenstein said.

Britain is trying to step up attempts to counter criminal activity online after a series of Islamist militant attacks this year but must ensure it balances the demands of state security with the freedoms of democratic societies.

Tech companies and many cyber security experts say that requiring law enforcement access be given access to encrypted products will broadly weaken security for everything from online banking to shopping to casual conversations among friends.

The U.S. deputy attorney general said he was not seeking to criticize technology firms but rather to lay out the trade-offs.

”In many ways the economic interests of technology companies align with law enforcement,“ Rosenstein said. ”But in one particular area - encryption - competitive forces drive technology companies to resist cooperating with governments.

“I wouldn’t describe my goal is to put pressure on the tech industry,” he said, adding “regulation is a potential option”.

But in a speech earlier this week Rosenstein accused Silicon Valley of being more willing to comply with foreign government demands for data than those made by their home country.

“The approach taken in the recent past - negotiating with technology companies and hoping that they eventually will assist law enforcement out of a sense of civic duty - is unlikely to work,” he said at the U.S. Naval Academy on Tuesday.

Reporting by Eric Auchard; Editing by Elisabeth O'Leary/Mark Heinrich
https://uk.reuters.com/article/us-br...-idUKKBN1CI0WN





Google’s Home Mini Needed a Software Patch to Stop Some of Them from Recording Everything
Dieter Bohn

Categorize this under “one of the worst possible PR nightmares for a Google smart speaker.” According to Artem Russakovskii at Android Police, the Google Home Mini he was reviewing was randomly and near-constantly recording sounds in his home and transmitting them to Google. The company acknowledged the problem and is issuing a software update to resolve the issue, which appears to boil down to a failure of the touch sensor on the top.

Smart speakers like the Google Home Mini are designed to only listen for a specific wake word — in this case it’s “Hey Google” or “Ok Google.” Only then do their microphones record what you’re saying it, transmit it to the cloud, and try to answer your question. But there is usually a way to just hit a button and ask the embedded assistant a question. On the Mini, it’s holding your finger down on the top of it.

That seems to be the rub (pardon the pun) with Russakovskii’s Mini: it thought that somebody was holding its finger down on the top and so was randomly activating and recording. The good news is that the lights turned on to indicate it was listening, but the bad news is that it didn’t make an audible tone, so it took a trip through the Home’s search history to discover the error.

To Google’s credit, it seems to have scrambled the engineering jets to figure out the issue and create a fix. The fix, though, is removing a feature from the Mini. Google has altered the software so a simple touch won’t activate the Assistant, you have to say the wake word instead. Here’s Google’s statement about the issue.

"We learned of an issue impacting a small number of Google Home Mini devices that could cause the touch mechanism to behave incorrectly. We rolled out an update on October 7 to mitigate the issue. If you're still having issues, please feel free to contact Google Support at 1-855-971-9121 to get a replacement Google Home Mini."

Google has also posted a help article about the issue, characterizing the affected units as “early release Google Home Mini device at recent Made by Google events” and noting that it won’t affect preordered units sold at retail.

I suppose the “small number” piece is good to hear, assuming it actually is a small number. Even so, it’s a very bad look for Google. People are already leery of speakers listening to them and transmitting info without permission, so the last thing you want is to reenforce that worry. Also, deserved or not, people are doubly worried about the amount of information Google is collecting about them.

Finally, Google apparently wasn’t able to figure out something as seemingly simple as a touchable button under fabric, which doesn’t instill much confidence in its hardware prowess. At least it was fixed before the official release date for the Mini, October 19th.
https://www.theverge.com/2017/10/10/...-recording-bug





Researcher Turns HDD Into Rudimentary Microphone
Catalin Cimpanu

Speaking at the Ekoparty security conference in Buenos Aires, Argentina, security researcher Alfredo Ortega has revealed that you can use your hard disk drive (HDD) as a rudimentary microphone to can pick up nearby sounds.

This is possible because of how hard drives are designed to work. Sounds or nearby vibrations are nothing more than mechanical waves that cause HDD platters to vibrate.

How it works

By design, a hard drive cannot read or write information to an HDD platter that moves under vibrations, so the hard drive must wait for the oscillation to stop before carrying out any actions.

Because modern operating systems come with utilities that measure HDD operations up to nanosecond accuracy, Ortega realized that he could use these tools to measure delays in HDD operations.

The longer the delay, the louder the sound or the intense the vibration that causes it. These read-write delays allowed the researcher to reconstruct sound or vibration waves picked up by the HDD platters.

Voice recovery may be possible

"It's not accurate yet to pick up conversations," Ortega told Bleeping Computer in a private conversation. "However, there is research that can recover voice data from very low-quality signals using pattern recognition."

"I didn't have time to replicate the pattern-recognition portion of that research into mine. However, it's certainly applicable. For that reason, I would not discard that additional data like voice could be recovered in the future," the researcher added.

Asked how he came up with the idea to turn his hard drive into a microphone, Ortega answered.

"It was known that sound will interfere with hard-disk operations. There are limits of vibration in the specs of many hard disks. That's why they are often mounted in vibration-proof enclosures made of rubber or other isolation material.

"From that, it was easy to deduce that they can be used to detect sound. I didn't expect that the delay response was proportional to the sound power, though. That made it a much better microphone that I expected."

Below is a video the expert recorded for his Ekoparty talk, showing how a hard drive picks up a song from a nearby speaker.

Sounds can disconnect or damage hard drives

But Ortega didn't limit his experiments to picking up sounds. The researcher also looked into how audio waves affect a hard drive's mode of operation.

The researcher says that an attacker can use sound waves to launch a resonance attack against an HDD. These types of attacks can result in the hard drive stopping any read-write operations (DOS — Denial of Service) or in physical damage to the device.

In another video the researcher recorded, he played a 130Hz tone to make an HDD stop responding to commands. "The Linux kernel disconnected it entirely after 120 seconds," Ortega said.

HDD resonance attacks happened in the real world

These types of attacks — or more exactly accidents — have happened in the real world. In September 2016, a fire drill that involved inert gas deployment caused ING Bank's main data center in Bucharest, Romania to go down for around ten hours.

The noise resembling a loud whistle caused by the inert gas deployment triggered an unexpected resonance attack that damaged data center hard drives and stopped the bank's operations across Romania — including ATM withdrawals, PoS payments, and web and mobile banking applications.

"I'm aware of the Romanian bank incident," Ortega told Bleeping. "The attack in my talk used resonance to amplify vibrations, so it only needs a very low volume to cause the same effect. However, with enough energy, any sound will interfere with a spinning hard-disk."

Similarly, we couldn't write this article without mentioning the infamous "Shouting in the Datacenter" video recorded in Sun's data center back in 2008, when Brendan Gregg showed the world for the first time that sound can cause read-write errors in HDDs.
The work Ortega did researching this topic will soon be included in a research paper the researcher plans to publish in the near future.
https://www.bleepingcomputer.com/new...ry-microphone/





Supreme Court Takes up Warrantless Cellphone Searches
Melissa Quinn

The U.S. Supreme Court has agreed to hear a case this term that experts are calling a "blockbuster" and could have significant implications on one's expectations of privacy.

The case, Carpenter v. U.S., raises the question of whether the federal government's search and seizure of cellphone records without a warrant violates the Fourth Amendment.

The case stems from a string of armed robberies in Ohio and Michigan in 2010 and 2011. During its investigation into the robberies, the federal government applied for and obtained court orders to access cellphone location records for several suspects, including Timothy Carpenter, the lead plaintiff in the case.

The government received several months of information, including the dates and times of calls, as well as "cell site information for the target telephones at call origination and at call termination for incoming and outgoing calls." Cell site information location is the information generated with a cellphone communicates with a nearby cell tower. According to the National Association of Criminal Defense Lawyers, that information from cell towers can mark that phone's location, allowing "law enforcement to piece together past events, 9 for example, by connecting a suspect to the location of a past crime."

The court order that addressed Carpenter was specifically directed toward MetroPCS, his cellphone provider, and the company handed over 127 days of cell-site information, or location records, which showed 12,898 separate points of location data.

Carpenter was ultimately convicted in part because of the cell site location information turned over to the federal government. He appealed to the U.S. Sixth Circuit Court of Appeals, arguing the federal government violated his Fourth Amendment rights, which protects Americans from unreasonable searches and seizures, when they obtained the records without a warrant. To obtain a warrant, the government must demonstrate probable cause, a higher burden for the government to meet. But to obtain the court order, the government need only demonstrate "reasonable grounds" to believe the cell location information is relevant to law enforcement's investigation.

The Sixth Circuit Court of Appeals disagreed, and said a warrant isn't required under the Fourth Amendment. The ACLU then petitioned the Supreme Court to hear the case.

Carpenter's case focuses specifically on cell-site location information, but experts say the case forces the court to confront whether a decades-old legal theory has become outdated in the digital age.

"When the Supreme Court decides a case like this, it has ripple effects throughout society. The real decision in this case is about what the third-party doctrine is going to look like in the 21st century," said Wesley Hottot, a lawyer with the Institute for Justice. "In the new world in which we live where companies have vast amounts of data, are we going to have a legal rule where the federal government can freely get all of that, or are we going to have a more nuanced approach that says the government can sometimes get that information based on certain protections?"

Under current law, the federal government isn't required to obtain a warrant to get cellphone location information under what's known as the "third-party doctrine," derived from two Supreme Court decisions from the 1970s.

The Supreme Court said when a customer gives information to a third-party, such as a phone company, the customer has lost the expectation of privacy by voluntarily handing it over to that third party. That party, the Supreme Court said, can then do whatever it wants with it, including giving it to the government.

The government has applied the third-party doctrine to other contexts, said Andrew Crocker, a staff attorney at the Electronic Frontier Foundation. That includes cell site cases, Internet searches, and records of emails sent.

But Crocker warned cell site location information, as the government obtained for Carpenter, reveals a lot about a person, and technological advancements will presumably enhance the location information collected by wireless companies.

"It's something that should concern everyone who uses a cellphone, which is everyone these days," he told the Washington Examiner. "We're all carrying these things around, and they have the capacity to paint a revealing portrait of our lives. The fact they can get that without a warrant is concerning."

In the Carpenter case, for example, location data showed on several Sundays, Carpenter made or received calls from the cell tower sectors located near a church, according to the ACLU, indicating he was at a place of worship those days.

"If you think about it, it's intuitive," Crocker said. "If I have a list of all the addresses you've been to, I can learn things about you — where you go for places of worship, what doctors you're visiting, where you sleep at night. There's a lot you can learn and infer from that."

In court filings, the federal government has argued cell site location information isn't very accurate, and said Carpenter "has no legitimate expectation to privacy in the business records his providers made of the cell towers used to route calls to and from his cellphone."

It's a claim echoed by the National District Attorneys Association, which said in a brief filed last week that cell site location information is "no more sensitive than other information that this Court has held [and] is outside the Fourth Amendment when relinquished to a third party for a business purpose."

Phone numbers dialed by a customer, the organization argued, reveal more than one's "presence somewhere within an area covering many dozens of city blocks."

But Hottot said technology is likely to evolve quickly, making it possible that one's location can be pinpointed more specifically than to "dozens of city blocks."

"The arch of this technology is such that in not too long, you're going to be able to place someone within a particular room in a house," he said. "That can reveal sensitive information such as whether me or my wife are having an argument, and I'm sleeping on the couch. … The government says don't worry about it, this isn't really that invasive, but we all know that technology changes in a way that we can't predict today."

In addition to raising concerns about the government's ability to obtain location information about citizens, Crocker also sounded the alarm on the legal arguments the government has used to obtain cell site location information, which he said can apply to a wide range of devices and services consumers use today.

"This Internet of Things has this vast range of devices you interact with and generate information," he said. "That kind of information, because you've exposed it to your Nest, your Fitbit or whatever, it currently isn't protected by the Fourth Amendment, so [the government] doesn't need a warrant to get it."

The Supreme Court's decision to hear the Carpenter case has brought together a diverse coalition of stakeholders, from tech organizations such as the Electronic Frontier Foundation to civil liberties groups such as the Institute for Justice to constitutional and technology scholars.

Fifteen tech companies, including Verizon, the nation's largest wireless provider, Facebook, Apple, and Google filed an amicus brief with the Supreme Court in August backing a requirement for law enforcement to obtain a warrant for cellphone data.

"[T]he court should refine the application of certain Fourth Amendment doctrines to ensure that the law realistically engages with Internet-based technologies and with people's expectations of privacy in their digital data," the companies wrote in the brief. "Doing so would reflect this Court's consistent recognition that Fourth Amendment protections, governed as they are by reasonable expectations of privacy, must respond to changes in technology that implicate privacy."

Both Hottot and Crocker said they believe the court is going to recognize the fast pace of technology, and said the justices are attuned to how the technological landscape has changed since the 1970s.

That shift, Crocker said, could indicate the justices will look at how the issue of warrantless searches impacts society more broadly.

"I think they recently have been pretty alert and aware of that problem, the increasing pace of technology," he said. "Cellphones are different than diaries. I think it's hard to predict, but I think the Supreme Court will pay attention to that problem."
http://www.washingtonexaminer.com/su...rticle/2636674





Judge Orders Limitations on Sweeping DreamHost Warrant Seeking Info on Anti-Trump Site
Kate Conger

A judge ordered the web hosting company DreamHost to redact identifying information about visitors to a website used to coordinate a protest during President Trump’s inauguration, imposing further limits on an extensive warrant obtained by the Justice Department that initially aimed to collect visitors’ IP addresses.

Chief Judge Robert E. Morin of the Superior Court of D.C. had previously ordered DreamHost to turn over information about the operators of the website, disruptj20.org. The Justice Department alleged that the site was used to privately communicate plans for a riot, and that it needed the IP addresses of the millions of visitors to the site in order to discover who had incited the violence. After resistance from DreamHost, the Justice Department narrowed the scope of its request.

In an order issued today, Morin said that the government would need to submit a report explaining the minimization procedures it would use when searching DreamHost’s data—in short the government would need to explain why it needs everything it needs. Only then would Morin allow the DoJ to review redacted data, and the government would again have to provide the court with its justification for removing any redactions.

“Because of the potential breadth of the government’s review in this case, the Warrant in its execution may implicate otherwise innocuous and constitutionally protected activity,” Morin wrote. “As the Court has previously stated, while the government has the right to execute its Warrant, it does not have the right to rummage through the information contained on DreamHost’s website and discover the identity of, or access communications by, individuals not participating in alleged criminal activity, particularly those persons who were engaging in protected First Amendment activities.”

DreamHost hailed Morin’s ruling as a win not only for visitors to the disruptj20 site that used its hosting services, but for internet users everywhere.

“We’re happy to see significant changes that will protect the constitutional rights of innocent internet users. Under this order, we can redact all identifying information and protect the identities of users who interacted with disruptj20.org,” DreamHost’s general counsel Christopher Ghazarian said in a statement. “The new order is a far cry from the original warrant we received in July. Absent a finding by the Court that probable cause of criminal activity exists, the government will not be able to uncover the identities of these users.”
https://gizmodo.com/judge-orders-lim...ant-1819332117





Cyberstalking Suspect Arrested After VPN Providers Shared Logs With the FBI
Catalin Cimpanu

VPN providers often advertise their products as a method of surfing the web anonymously, claiming they never store logs of user activity, but a recent criminal case shows that at least some, do store user activity logs.

The case in question is of Ryan Lin, a 24-year-old man from Newton, Massachusetts, arrested on Thursday, October 5, on charges of cyberstalking.

According to an FBI affidavit published by the US Department of Justice, Lin is accused of harassing and cyberstalking an unnamed 24-year-old woman — referred to under the generic name of Jennifer Smith — between April 2016 and up until his arrest.

It all started with a Craigslist ad

The two met after Lin answered a Craigslist ad and moved in with Smith and her two other roommates. The FBI says that soon after Lin moved in with Smith, she was the victim of multiple hacking, harassing, and cyberstalking incidents.

Investigators believe that Lin got access to passwords of some of Smith's online profiles because Smith didn't have a lock on her room door, and didn't password-protect her computer.

Authorities say that Lin allegedly accessed Smit's Apple iCloud account from where he downloaded personal photos, and also her Google Drive account from where he took her private journal.

Smith was the victim of a wide range of harassment campaigns

According to the affidavit, Lin is the prime suspect behind a multi-faceted and unyielding harassment campaign that spanned months. In no particular order, below are some of the FBI's accusations:

⧐ The suspect allegedly created a collage of Smith's personal photos and non-related sexually explicit images and sent it to Smith's friends, classmates, teachers, co-workers, roommates, and family friends (including a minor). The emails were spoofed to make them appear as coming from Smith's email address.
⧐ The suspect allegedly sent excerpts of Smith's private journal to other persons, revealing personal details such as a past medical, psychological, and sexual history.
⧐ The suspect allegedly created online accounts in Smith's name on adult portals asking people to show up at her house to enact BDSM, gangbang, rape, and other sexual fantasies. At least three people showed up.
⧐ The suspect allegedly harrassed Smith using SMS messages sent via an anonymous text messaging service (textnow.com).
⧐ The suspect allegedly spoofed Smith's identity to send bomb and other threats to nearby schools and lone individuals.
⧐ The suspect allegedly sent threatening communications to Smith's friends, associates, and family (including a minor), urging Smith to commit suicide, or threatening to kill and rape Smith and associates.
⧐ The suspect allegedly bombarded Smith with friend requests on Facebook, even after getting blocked.
⧐ The suspect allegedly hacked Smith Rover.com account (pet sitting service) and told pet owners that Smith intentionally killed one of their pets, resulting in the pet owners sending police officers to their house to deal with Smith.
⧐ The suspect brought up the fact that Smith had an abortion, even if the suspect did not tell anyone about it, and only recorded the event in her private journal.

Smith told authorities the abusive behavior began soon after Lin moved in, and continued even if she moved out two months later, scared by his actions.

Lin's abusive behavior was then redirected to the other two roommates, and following complaints to the landlord and police, Lin was kicked out from the shared apartment in August 2016. The cyberstalking and harassing behavior continued, again, mainly directed at Smith.

Suspect hid behind VPNs, Tor, ProtonMail

For all of these actions, the suspect used ProtonMail, VPN clients, and Tor to hide his identity. After local police investigated all the victim's complaints for almost a year, they called in the FBI to help.

The FBI found their first evidence at one of Lin's former employers. The company had reinstalled Lin's work computer after he left, but the FBI was able to find various artifacts in the hard drive's unallocated disk space. Evidence includes:

⧐ Google Chrome artifacts that Lin had read about the bomb threats against local schools.
⧐ Google Chrome artifacts that Lin had an account on textnow.com
⧐ Google Chrome artifacts that Lin had an account on ProtonMail
⧐ Google Chrome artifacts that Lin had visited Rover.com
⧐ Google Chrome artifacts that Lin had visited the Smith's Spotify profile, but also the profiles of Smith's brother and one of her best friends.
⧐ PureVPN artifacts suggesting Lin was using the company's VPN client.

VPN activity logs tie Lin to Smith's harassment

Yet, the most conclusive evidence came after the FBI managed to obtain logs from two VPN providers — PureVPN and WANSecurity.

The logs showed how within the span of minutes the same VPN IP address had logged into Lin's real Gmail address, another Gmail address used for some of the threats, and a Rover.com account Lin created to discover Smith's real phone number. PureVPN was later able to link the stalking activity with Lin's home and work IPs.

Ironically, FBI agents also found tweets in which Lin was warning other users that VPN providers store activity logs, advice he didn't follow himself.

Investigators became sure they identified the right man after they interviewed some of Lin's past classmates, who recounted a similar pattern of harassment and cyberstalking from a man they described as a computer "genius."

"As alleged, Mr. Lin orchestrated an extensive, multi-faceted campaign of computer hacking and online harassment that caused a huge amount of angst, alarm, and unnecessary expenditure of limited law enforcement resources," said FBI Special Agent in Charge Shaw.

"This kind of behavior is not a prank, and it isn’t harmless. He allegedly scared innocent people, and disrupted their daily lives, because he was blinded by his obsession," the agent added. "No one should feel unsafe in their own home, school, or workplace, and the FBI and our law enforcement partners hope today’s arrest will deter others from engaging in similar criminal conduct."
https://www.bleepingcomputer.com/new...-with-the-fbi/





Art for a Post-Surveillance Age
Megan O’Grady

‘‘Are we being watched?’’ I ask Trevor Paglen at his central Berlin studio. The prewar apartment was once surely the most surveilled place in the city, having formerly belonged to his friend Laura Poitras, the director who helped Edward Snowden go public. ‘‘We’re always being watched,’’ he replies. The space is filled with computers: Against one wall, an assistant writes code while another researches data used to train artificial intelligence. Opposite is a long credenza filled with art monographs and topped by a slightly sinister collection of objets: a Dungeons & Dragons-style dragon trophy with a shield and saber; a toy model of the stealth submarine U.S.S. Jimmy Carter; and ‘‘Black Ops’’ military patches, including some Paglen made himself. In one of them, dinosaurs of the future look up in wonder at the derelict satellites left behind by extinct humans.

There’s a certain irony in the artist and author being based in the former G.D.R., where citizens were once pressured into spying on one another for the Stasi, which left behind miles of documents when the wall fell in 1989. Fifteen years later, Paglen, who already had an M.F.A. from the School of the Art Institute of Chicago, was working on his doctorate in geography at the University of California, Berkeley, when he saw redacted portions of a map of the Mojave Desert and began photographing classified military installations, outfitting cameras with special lenses used in astrophotography. Ever since, he’s been documenting the ways in which humans have transformed the surface of the Earth, and how we, in turn, have been transformed by those changes. (A survey of his career will go on view at the Smithsonian next summer.) The resulting photographs are vertiginous and strange, illuminating the increasingly uneasy space between ourselves and our perceived world: a tiny, is-it-a-seagull-no-it’s-a-drone set against a Technicolor sunset; the dystopian white radomes of a surveillance station tucked into an English pastoral; a placid seascape, beneath which lies a key communications choke point. ‘‘People like to say that my work is about making the invisible visible, but that’s a misunderstanding,’’ Paglen says. ‘‘It’s about showing what invisibility looks like.’’

Paglen was already well known for his surveillance pieces when Snowden leaked a trove of NSA documents in 2013, but even he was stunned by the revelations — both their magnitude and their specificity. ‘‘I just sat, jaw dropped, for 14 hours straight, reading,’’ says the 42-year-old, who is both affable and ultra-intense, with blue eyes, close-shorn blond hair, motorcycle boots and a kind of native restlessness. His footage of NSA bases was included in ‘‘Citizenfour,’’ Poitras’s Academy Award-winning documentary about Snowden.

Paglen, who has lived in Berlin since 2015, travels frequently to give talks about the many ways in which secrecy ‘‘nourishes the worst excesses of power,’’ as he wrote in one of his six books. He is one of art’s more unusual figures, a kind of adventurer-philosopher whose work is often conceptual and highly technical, but can also be delightfully gonzo: He learned to scuba dive in order to photograph fiber-optic internet cables snaking across the ocean floor. After being questioned in Germany for shooting classified sites, he held a contest for the best photos of ‘‘landscapes of surveillance’’ in that country. He made a cube-shaped sculpture from irradiated glass sourced from Fukushima. He sent a time capsule into deep space of images etched on a silicon disc chronicling human history — from the Lascaux cave paintings to political protests. For a series he’s including in his show opening this month at Metro Pictures gallery in New York, Paglen is examining the automation of vision itself, and the way in which the kinds of technologies used in facial recognition software, self-driving cars and social media are creating an entirely new landscape of pictures we never see, whose judgments we can’t challenge. ‘‘I don’t have fantasy projects,’’ he tells me, ‘‘because I’m stupid enough to think that you can actually do this stuff.’’

Paglen is currently at work on his most radical project yet. This spring, he plans to send a satellite — a reflective, faceted Mylar inflatable — into low orbit, where it will be visible at night from Earth for eight weeks or so, literally twinkling like a diamond in the sky before it disintegrates in the atmosphere. If all goes according to plan, it will be the world’s first space sculpture, unprecedented in contemporary art.

The Orbital Reflector, as Paglen calls it, seems at first glance almost romantic, even deliberately naïve. It has no scientific purpose; it doesn’t even carry a camera. But under closer scrutiny, it can be seen as an elaboration of the artist’s ongoing thesis about art, technology and the impossibility of separating either from a specific moment in time. ‘‘It began as a thought experiment in which we imagined that spaceflight was the opposite of what it actually is,’’ he explains over lunch at Soho House, at a table overlooking the Berlin TV tower, with its iconic dome evoking Sputnik, Earth’s first satellite. In the American mind, space is a frontier: ‘‘We imagine going to the moon and planting a flag, going to an asteroid and mining, going to Mars and setting up a colony,’’ he says. ‘‘And I think that expansionist mentality is very self-destructive, especially given the kind of precarious relationship we now have to the ecosystem here on Earth, because it allows us to imagine that Earth is disposable.’’ Billionaire entrepreneurs may dream of colonizing Mars, but in fact, space is not going to save us. Aliens are not going to grant us absolution. ‘‘People expect this kind of profound cosmic altruism, which is very religious in a way. Space is completely wrapped up with this kind of stuff, which is what makes it interesting.’’

The Orbital Reflector draws a clear parallel between contemporary art and space exploration: the ideal of a purely visionary gesture, and the less starry reality. While the satellite — a small, five-kilogram box called a CubeSat, from which a 100-foot-long inflatable structure will deploy — has no commercial or military purpose, its success depends on the very systems of power Paglen has spent more than a decade critiquing. Built by an aerospace contractor called Global Western, it, likely along with a governmental reconnaissance satellite, will launch from California’s Vandenberg Air Force Base on a Space X rocket into low orbit. The project illustrates how unfeasible it would be to execute any other way: For all the talk of civilian spaceflight, it remains a thoroughly militarized domain.

Managing the project is Zia Oboodiyat, a retired engineer who ran large communications satellite programs for the San Francisco-based Space Systems/Loral. He first met Paglen in 2011 while the artist was working on the time capsule; Oboodiyat oversaw the construction of the satellite the disc was attached to and advocated for the project. When Paglen approached him about the Orbital Reflector, Oboodiyat immediately recognized its potential lyricism. ‘‘You don’t have to be rich to see it; you don’t have to be tall to see it,’’ he says. ‘‘You don’t have to be American. Anybody anywhere on Earth has equal opportunity to see something that gives humanity hope.’’

Paglen’s partner in the project, the Reno-based Center for Art + Environment at the Nevada Museum of Art, is fund-raising to cover the $1.3 million cost. The center’s collection includes extensive material from the giants of land art, including Walter de Maria and Michael Heizer. The Orbital Reflector places Paglen (for the moment, anyway) in this tradition — an artist defying the laws of nature and practicality in order to create a work larger than himself. ‘‘It is a high-risk proposition — rockets do explode; CubeSats sometimes fail to open,’’ says David Walker, the museum’s executive director. ‘‘But it’s exciting, too, because we see outer space as the ultimate mirror for human aspiration.’’ The Orbital Reflector is like the inevitable conclusion to the land art movement; Paglen’s work, like Heizer’s, may start in the desert, but will eventually leave the Earth entirely.

Paglen moved to Berlin partly for financial reasons — ‘‘I wanted to hire people, not spend $10,000 a month on a studio in Sunset Park’’ — but seems to have found a home amid the city’s young expat artists and WikiLeaks types. At a Vietnamese restaurant, he bumps into a hacktivist friend who looks all of 17. ‘‘These guys have guts,’’ Paglen notes, after saying hello. ‘‘He was way up the butthole of the F.B.I. I probably shouldn’t talk about it.’’

Paglen doesn’t describe himself as a dissident — ‘‘I’m as American as it gets, a product of these contradictions’’ — but it’s impossible not to connect the themes in his work to a childhood spent on military bases. His father was an Air Force ophthalmologist; his mother, one of the first female Episcopalian priests. In third grade, in the San Francisco Bay Area, Paglen got in trouble for skipping school to sneak into lectures on dinosaurs at Berkeley — the same lecture halls in which he’d later be working toward his doctorate. The family moved to Wiesbaden, Germany, when he was 12, and he spent two years in a German school in a nearby village, where, as a foreign student, he was ostracized. ‘‘When you’re not the beneficiary of privilege, suddenly you see it for what it is,’’ he says.

An ongoing theme in Paglen’s more satirical work is the puerile machismo of military culture’s symbology and nomenclature, ‘‘the collective unconscious of this world of secrecy and violence,’’ as he puts it. One afternoon, Hanna Mattes, who oversees Paglen’s studio and helps manage its external production, is consulting with the artist on one of the sculptures he’s making for the fall show: an enormous dragon inspired by the small trophy in his studio. The trophy, Paglen explains, is presented to members of the 315th Network Warfare Squadron upon retirement. Paglen’s version will be a 12-foot sculpture inscribed in fetishistic detail, like medieval armor for the cyber age. The best way to preserve the details, they conclude, will be to 3D-print the mold in four sections, lightly polishing them to remove any marks. Another concern is the weight: The finished dragon, cast in bronze, will weigh two tons. Paglen mentions a crane. Mattes looks at him. ‘‘Maybe we should just paint the form for the exhibition.’’

The dragon will be included in the 2018 Smithsonian exhibit. This year’s Metro Pictures exhibit will showcase Paglen’s ongoing work with different kinds of artificial intelligence technologies, taking viewers down a rabbit hole of imagery, from the now quaint-seeming pictures first made by humans in the early 1990s to train military facial recognition software, to the kind of ‘‘invisible images’’ computers hallucinate for themselves — say, when we post an image on Facebook — in order to make sense of the external world. ‘‘This is how an A.I. brain sees a shark,’’ Paglen says back in his studio, looking at a weirdly beautiful Abstract Expressionist-like swath of blues and grays that results from a computer creating a visual amalgam of thousands of images of the animal in water. The exhibit invites critical questions about the extent to which artificial intelligence algorithms, with their potential for programmed-in bias, are governing our reality. It’s also aesthetically provocative: ‘‘Man,’’ a distillation of figurative imagery, vaguely recalls a Francis Bacon portrait; ‘‘Rainbow’’ — a blend of cosmic-like rainbows — a Dali-esque dreamscape. ‘‘It’s like I’m relearning art history,’’ Paglen says.

So how does an artist who has devoted his career to empirical scrutiny of those things that will shape our future, from artificial intelligence to the annexation of space, respond rationally to a time in which reason itself — when it comes to political discourse, at least — seems to be increasingly endangered? ‘‘Those are foundational questions for me,’’ Paglen says. ‘‘Nothing that you make in the world exists in isolation from the social and political and ecological dimensions of it.’’ He hasn’t given up on art’s ability to spark the imagination — and to make us see the things we might prefer not to. The Orbital Reflector presented an opportunity to ‘‘get messy . . . to make something that’s beautiful, but also self-contradictory, and tries to challenge common sense.’’ It’s Carl Sagan meets Dada for a new millennium’s inhumanity.

As we talk, the sky darkens in Berlin, and the first blinking glimmerings appear. ‘‘For me, there’s something very romantic about going and looking at the stars and trying to photograph spy satellites,’’ Paglen says. ‘‘Ultimately, what it comes down to is looking at the sky and trying to understand something about one’s place in history. People have been doing this for tens of thousands of years. This is kind of a variation on that. What if we could imagine a sky that wasn’t out to get us, you know?’’
https://www.nytimes.com/2017/08/29/t...or-paglen.html





Seagate Releases Massive 12TB Hard Disk Drive for Storing Huge Files Like 4K Video

Definitely overkill for storing PDFs
Thuy Ong

Seagate has revealed a new hard disk drive that can hold a massive 12TB, so if you’re looking for a huge storage option, this is probably it. The BarraCuda Pro is designed for professional creatives who might want to store content with huge sizes like 4K videos and a large trove of RAW photo files. Seagate is also trying to sell its latest big hard drive by riding on the popularity of the AR, VR hype and casting it as a storage solution for these types of media content too. The hard disk drive has a spin speed of 7,200 rpm and features a 256MB cache size for faster loading times. Seagate also announced its new IronWolf 12TB hard drives, which, along with the BarraCuda, is a part of its Guardian Series for high capacity storage. The IronWolf allows multiple users to access the drive — with file sharing and remote access part of its selling points.

For the average user 12TB probably feels like overkill. The largest files I process are RAW files from my DSLR, so it’s not really aimed at everyday users who might just want to store basic pictures or PDF files. The Seagate BarraCuda 12TB Pro will reportedly cost $530 and come with a 5-year limited warranty.
https://www.theverge.com/circuitbrea...ase-date-price





Western Digital Stuns Storage Industry with MAMR Breakthrough for Next-Gen HDDs
Ganesh T S

Yesterday, Western Digital announced a breakthrough in microwave-assisted magnetic recording (MAMR) that completely took the storage industry by surprise. The takeaway was that Western Digital would be using MAMR instead of HAMR for driving up hard drive capacities over the next decade. Before going into the specifics, it is beneficial to have some background on the motivation behind MAMR.

Hard drives may be on the way out for client computing systems, but, they will continue to be the storage media of choice for datacenters. The Storage Networking Industry Association has the best resources for identifying trends in the hard drive industry. As recently as last year, heat-assisted magnetic recording (HAMR) was expected to be the technology update responsible for increasing hard drive capacities.

Mechanical Hard Drives are Here to Stay

One of the common misconceptions amongst readers focused on consumer technology relates to flash / SSDs rendering HDDs obsolete. While using SSDs over HDDs is definitely true in the client computing ecosystem, it is different for bulk storage. Bulk storage in the data center, as well as the consumer market, will continue to rely on mechanical hard drives for the foreseeable future.

The main reason lies in the 'Cost per GB' metric.

Home consumers are currently looking at drives to hold 10 TB+ of data, while datacenters are looking to optimize their 'Total Cost of Ownership' (TCO) by cramming as many petabytes as possible in a single rack. This is particularly prevalant for cold storage and archival purposes, but can also expand to content delivery networks. Western Digital had a couple of slides in their launch presentation yesterday that point towards hard drives continuing to enjoy this advantage, thanks to MAMR being cost-effective.

Despite new HDD technology, advancements in solid state memory technology are running at a faster pace. As a result SSD technology and NAND Flash have ensured that performance enterprise HDDs will make up only a very minor part of the total storage capacity each year in the enterprise segment.

The projections presented by any vendor's internal research team always need to be taken with a grain of salt, but given that SanDisk is now a part of Western Digital the above market share numbers for different storage types seem entirely plausible.

In the next section, we take a look at advancements in hard drive technology over the last couple of decades. This will provide further technical context to the MAMR announcement from Western Digital.

Scaling Hard Drive Capacities

Hard disk drives using magnetic recording have been around for 60+ years. Despite using the same underlying technology, the hard drives of today look nothing like the refrigerator-sized ones from the 1960s. The more interesting aspect in the story is the set of advancements that have happened since the turn of the century.

At a high level, hard disks are composed of circular magnetic plates or 'platters' on which data is recorded using magnetization and the patterns of magnetization represent the data stored. The patterns are laid out in terms of tracks. They are created, altered and recognized with the help of 'heads' mounted on an actuator that perform read and write operations. Modern hard disks have more than one platter in a stack, with each platter using its own individual 'head' to read and write.

There are additional hardware components - the motor, spindle, and electronics. The segment of interest from a capacity perspective are the platters and the heads. The slide below shows two ways to increase the capacity of a platter - increasing the number of tracks per inch (TPI) and/or increasing the number of bits per inch (BPI) in a single track. Together they yield a metric for areal density, which the industry gives as a value in bits per square inch, such as gigabits per square inch (Gb/in2) or terabits per square inch (Tb/in2).

Hard drives in the early 2000s primarily relied on longitudinal recording, with the data bits aligned horizontally in relation to the spinning platter - this is shown in the first half of the image below. One of the first major advancements after the turn of the century was the introduction of perpendicular magnetic recording (PMR) in 2005.

At the time PMR made its breakthrough, Hitachi commissioned an amusing video called 'Get Perpendicular', which was used to demonstrate this technology and reaching 230 gigabits per square inch. The video can be found here.

PMR was developed as a solution to the previous areal density limits of around 200 Gb/sq.in caused by the 'superparamagnetic effect' where the density of bits would cause the bits to flip magnetic orientation and corrupt data. PMR, by itself, can theoretically hit around 1.1 Tb/sq.in.

Alongside PMR, more technologies have come into play. The most recently launched hard drives (the Seagate 12TB ones) have an areal density of 923 Gb/sq.in. The industry came up with a number of solutions to keep increasing hard drive capacity while remaining within the theoretical areal density limits of PMR technology:

Helium-filled drives: One of the bottlenecks in modern drivers is the physical resistance on the heads by the air. Using Helium reduces that resistance, and requires sealed enclosures. The overall effect is improved head stability and a reduction in internal turbulence, allowing for a shorter distance between platters giving manufacturers the ability to stack up to seven platters in a single 3.5" drive rather than six. Helium drives were first introduced to the market in 2012 by HGST. The latest helium drives come with as many as eight platters.

Shingled magnetic recording (SMR): In this technology, the track layouts are modified to give overlaps, similar to how roof shingles are laid (hence the sname). While this creates challenges in rewriting over old data to ensure that old data is not overwritten, there are sub-technologies and methods to mitigate some of these issues. The challenges can be either solved on the host side or the drive side. Seagate was the first to ship drive-managed SMR drives in 2013.

Improvements in actuator technology: In the last few years, Western Digital has been shipping 'micro actuators' that allow for finer positioning and control compared to traditional actuator arms. This directly translates to drives with a higher bit density.

Improvements in head manufacturing: Traditionally, PMR heads have been manufactured using the Dry Pole process involving material deposition and ion milling. Recently, Western Digital has moved to the Damascene process that involves a etched pattern filled using electroplating. This offered a host of advantages including a higher bit density.

We had briefly mentioned PMR technology having theoretical limits earlier in this section. Traditional PMR can deliver up to 1.1 Tb/sq.in. with improved actuators and heads. Use of SMR and TDMR (Two Dimensional Magnetic Recording) can drive this up to 1.4 Tb/sq.in.

At those areal densities, the TPI and BPI need to be so high that the media grain pitch (the smallest size that the metallic elements that store individual bits can be) is around 7-8 nm. These small grains present a number of challenges, such as the head not being capable of creating a strong enough magnetic field for stable recording.

One solution to this would be to make it easier to write the data to the grain. Decreasing the resistance to magnetization (technically, lowering the coercivity), allows the head's field to modify the magnetic state of the grain. This requires extra energy, such as thermal energy, to be directly applied to the grain for the short amount of time that is needed to write a bit. This is the point where the 'energy-assist' aspect comes into the picture.

Over the last several years, a lot of focus has been on heat-assisted magnetic recording (HAMR), where the lowered resitance (coercivity) is achieved by locally heating the grains using a laser. This brings in a number of concerns that have prevented mass production of drives based on HAMR technology.

MAMR, on the other hand, uses microwaves to enable recording. A primary reason for MAMR not being considered as a viable technology by industry analysts so far was the complexity associated with designing a write head to include a microwave generator. In the next section, we take a look at how Western Digital was able to address this.

Microwave Assisted Magnetic Recording (MAMR)

The WD Breakthrough

Western Digital's Microwave Assisted Magnetic Recording (MAMR) drives use platters very similar to those in the current-generation PMR drives*. This means that the innovation to enable MAMR is mainly to do with the heads that perform read and write operations.

As part of the MAMR design, WD pointed out to its shift to the damascene process for building the bit grains as the key enabler for the MAMR breakthrough. The process allows them to fabricate a spin torque oscillator (STO) capable of creating precise energy fields without any additional overheads. The embedded oscillator in the head is tuned to generate microwaves with a frequency of 20-40 GHz, and this provides the 'energy-assist' to make it easier to write to the bits (technically it lowers the coercivity of the underlying recording media).

* Current drives use an aluminium substrate with a cobalt-platinum layer.

WD pointed out that MAMR requires absolutely no external heating of the media that could lead to reliability issues. The temperature profiles of MAMR HDDs (both platters and drive temperature itself) are expected to be similar to those of the current generation HDDs. It was indicated that the MAMR drives would meet all current data center reliability requirements.

Based on the description of the operation of MAMR, it is a no-brainer that HAMR has no future in its current form. Almost all hard drive industry players have a lot more patents on HAMR compared to MAMR. It remains to be seen if the intellectual property created on the HAMR side is put to use elsewhere.

Western Digital has talked about timeframes for the introduction of MAMR drives. They had working prototypes on display at the press and analyst event yesterday. WD's datacenter customers have their own four to six month qualification cycle, and MAMR drives for that purpose are expected to be out towards the middle of next year. Production-level HDDs based on MAMR technology are expected to start shipping in 2019.

Western Digital sees plenty of value in MAMR, and it is not hard to see why. MAMR technology allows for the bit densities of individual platters to scale to more than 4 Tb/sq.in. WD believes that it is well-positioned to bring 40TB drives by 2025 using MAMR alone.

Technologies such as SMR and TDMR are complementary to MAMR. Currently, WD does not use TDMR in any shipping enterprise drive, and SMR is restricted to a few host-managed models. It is possible that some MAMR drives will use those technologies to achieve higher capacity points compared to conventional drives. WD's working prototype on display was a helium drive (HelioSeal), but, WD again stressed that helium is not a compulsory requirement for MAMR drives. It was also confirmed that drives of 16TB and more would have to be MAMR-based.

In 2005, when the shift from longitudinal recording to PMR happened, most vendors managed to release drives based on the new technology within a few years of each other. The shift to helium in 2012, though expected by everyone in the industry, proved to be a big win for HGST - they had the markets that focus on high-capacity, or low-power, or low TCO to themselves for almost three years before Seagate eventually caught up. Toshiba is yet to release a helium drive publicly. It is going to be interesting to see how Seagate and Toshiba respond to this unexpected MAMR announcement from Western Digital.

The players in the hard drive industry have a robust cross-licensing program, and it is highly likely that other manufacturers will not face significant patent bottlenecks in bringing out MAMR drives on their own. WD stressed that the development is a multi-year effort, particularly if the heads are still being manufactured in the old dry pole process.

High-volume mature hard drives are often manufactured with the help of third-party suppliers - such as Showa Denko for the recording media and TDK for the heads. In the case of the MAMR drives, WD mentioned that all the components are being designed and manufactured in-house. It is possible for the competition to catch up faster if some of the third-party manufacturers are further along in their own R&D. In particular, TDK has been investing in MAMR R&D recently too. Toshiba has also shown interest in the same, but it is not clear how far along they are in the commercial development cycle. Currently, we believe WD has a clear lead in MAMR technology. It just remains to be seen how long it takes for the competition to catch up.
https://www.anandtech.com/show/11925...r-nextgen-hdds

















Until next week,

- js.



















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