Peer-To-Peer News - The Week In Review – October 14th, '06

[JackSpratts]

"We understand now that piracy is a business model." – Anne Sweeney


"They say the law is intended to stop piracy, but I am not a pirate. I support artists with legally purchased works, but I do not want to be forced to use a particular device to play them." – Jérôme Martinez


"If you believe it’s the future of television, it’s clearly worth $1.6 billion. If you believe something else, maybe it’s not worth much at all." – Steven A. Ballmer


"Since it was the `people' that made YouTube, why aren't they being paid billions?" – winofiend


"We cannot assume what we know about bulk-size substances applies to the nanotechnology-size substances." – Philippe Martin


"I would fall over in shock if we were to get those nuts back. I would be throttled." – Farmer Phippen


"We had 10,000 or 13,000 books in the store. Now we have maybe 1,500." – Gary Kleiman


"If Superman had done twice what it did, the whole summer would have looked different." – Jeff Robinov


"If it was today, the headline in Variety would have been 'When Harry Met Disaster.'" – Alan F. Horn


"I figure we got one good sequel and one bad sequel to this movie left in us. The key is to keep stomping on this grapefruit until it stops producing grapefruitade." – Jack Black






































October 14th, '06






A Growing Free-for-All

By approving the merger between AT&T and BellSouth unconditionally, the Bush administration has again abdicated responsibility for protecting consumers when huge companies combine.

Fierce competition between private companies is at the core of the nation’s economic strength. But government still has an important role to play as referee, making sure that the rough-and-tumble game of capitalism doesn’t become perversely uncompetitive through significant concentrations of market power in the hands of a few companies.

From the very start, the Bush administration’s approach to antitrust and merger policy has been much more hands-off than its predecessors’. In an era of rapid consolidation and deregulation, the Justice Department hasn’t brought a single major monopoly case under the Sherman Antitrust Act since the Clinton administration went after Microsoft for illegally defending its monopoly for the Windows operating system. The department settled that case during President Bush’s first year in office.

That set the tone for a merger policy that often appears to be little more than “anything goes.” One gets the impression at times that the referee has left the playing field.

Perhaps the clearest example came earlier this year when the department cleared Whirlpool’s $1.7 billion acquisition of Maytag, which gave the combined company up to three-quarters of the market for some home appliances. As Stephen Labaton reported in The Times shortly thereafter, that decision actually demoralized career officials in the department’s antitrust division.

Not only has the government failed to bring many significant cases, it is opposing one brought and won by a third party. The Supreme Court will hear a case in which a jury found that Weyerhaeuser monopolized a market for logs in the Pacific Northwest. The Bush administration filed a brief asking the court to reverse the decision, already upheld on appeal.

A federal district judge is reviewing the antitrust settlements that previously allowed SBC Communications to acquire AT&T and Verizon to buy MCI. But by approving the AT&T-BellSouth merger without a single condition, the Justice Department has allowed this one to avoid judicial review.

That leaves the Federal Communications Commission. The commission has scheduled a meeting to discuss the merger today. It should take a long, hard look at the deal, and the overall trend toward consolidation in the telecommunications industry. There are strong arguments that competition with cable companies and Internet phone services have changed the playing field. But the commissioners should pursue the question thoroughly rather than wielding a rubber stamp as the Justice Department sometimes appears to. They must think first about protecting consumers, while bearing in mind that bigger is not always better.
http://www.nytimes.com/2006/10/13/opinion/13fri1.html





Parallel Federal Political World of Environment and Copyright
Michael Geist

The environment has emerged as a mainstream political issue, and copyright is showing similar signs.

As the Conservatives prepare to roll out their policy plan for the environment, there is little doubt that environmental concerns have emerged as a major political issue. With polls consistently confirming public concern with environmental sustainability, each of Canada's major political parties is anxious to be known as the most environmentally friendly.

The focus on environmental issues is a relatively new phenomenon. A generation ago, if the environment was considered at all, it was viewed as a niche issue too complex to matter to the average voter. The complexity of environmental issues has not changed–most Canadians would be hard-pressed to explain carbon emissions, the details of climate change, or the substance of the Kyoto agreement–yet the essence of environmental policy as clean air, clean water, and sustainable natural resources is clearly understood.

The emergence of the environment as a mainstream political issue is worth noting because today there is another issue that shows similar signs of moving from the periphery to the mainstream–copyright.

The similarities start with language–environmental advocates speak of protecting the environment and sustainable resources, while copyright advocates focus on the need to protect the public domain and to sustain access to Canadian culture.

The two issues are also similarly complex. The average Canadian knows little about the intricacies of fair dealing or technological protection measures, yet the implications of copyright policies that hamper free speech, privacy, security, and consumer rights are far easier to appreciate. Indeed, recent developments both here and abroad suggest that the issue is beginning to garner increased attention from the general public.

Given the large number of vocal stakeholders, including copyright collectives, industry associations, broadcasters, as well as education and library groups, prior copyright reform initiatives were viewed as thorny political issues that attracted plenty of lobbyists. The reforms remained off the public's radar screen, however, generating limited public interest and enabling governments to broker compromises between a relatively small group of stakeholders.

The landscape began to change in the late 1990s, as millions of Canadians gravitated toward the Internet and began to purchase digital entertainment products such as CDs, DVDs, and video games. The changes in technology transformed millions of Canadians into creators who increasingly recognized that copyright could be used to limit their fundamental freedoms and to enjoy their consumer products. With the majority of Canadians now online, the public is now an active stakeholder and copyright has become one of their issues.

Moreover, copyright policy itself has begun to change. In recent years, the Supreme Court of Canada explicitly recognized the need for balance in copyright law, characterizing the law as a balance between creator and user rights. The substance of copyright policy also begun to shift away from its focus on creators toward distributors of copyright products, who seek legal protections for technologies that can be used to lock-down digital content.

It is those rules that have led to political repercussions in other jurisdictions. In the Nordic countries, officials are presently negotiating with Apple Computer about changes to its iPod and iTunes service following growing consumer unrest and complaints to elected officials.

In fact, Sweden is now home to the "Pirate Party," a political party focused primarily on copyright issues. Last month, the party garnered nearly 35,000 votes, enough to place tenth among 40 political parties running for a place in Swedish Parliament. While the total was less than one per cent of the national vote, the party's presence forced several larger parties to alter their positions on copyright.

Similar developments have occurred in France, where opposition parties have forced user-friendly copyright amendments through their Parliament. In Australia, the government has been struggling with its implementation of the U.S.-Australia Free Trade Agreement in light of public concern over the copyright provisions.

In Canada, copyright has begun to attract voter attention. Thousands of Canadians have signed petitions on copyright that have been presented in the House of Commons and during the last election campaign copyright played a role in the defeat of Liberal incumbent Sarmite Bulte in Parkdale-High Park, following criticism over her ties to copyright lobby groups. Grassroots organizations focused on copyright representing the interests of artists, musicians, and consumers have formed in recent months and obtained meetings with ministers and opposition critics.

Not surprisingly, political parties have begun to take note of these developments. Both the NDP and Green Party have adopted more user-focused policy positions and the door is now open to the Liberal Party to do the same.

The parallels between the environment and copyright are particularly relevant given the persistent reports that the Conservative government plans to introduce copyright reform legislation this fall. If, as expected, a U.S.-style approach is introduced, Canada will be ripe for the same opposition evidenced elsewhere as Canadians gradually learn of the proposal's damaging effects on fundamental freedoms, personal privacy, and consumer rights and Canada's opposition parties line up to court the "copyright vote."
http://www.thehilltimes.ca/html/inde...r/9/geist/&c=1





Skype Founder: Kazaa, Napster Help Music
Sarah Andrews

Kazaa, Napster Inc. and other creators of file-sharing applications have been good for the music industry, Niklas Zennstrom, founder of the now-defunct Kazaa and CEO of Skype, said Monday.

"Kazaa came five years too early, but without that and Napster we would never have seen the transformation we're seeing in the music industry," said Zennstrom at a gathering of technology experts at the European Technology Roundtable Exhibition held this week in Barcelona. "Record companies are seeing that the Internet is good for their business, and we made that possible."

Zennstrom has led a similar market transformation with his communications company, Skype, which handles about 7 percent of the world's international calls and is signing on new users at a rate of 58 percent per quarter. The company, founded in 2003, was bought last year by eBay Inc. for US$2.6 billion (euro2.06 billion).
http://hosted.ap.org/dynamic/stories...10-09-11-15-30





Disney Co-Chair Recognises 'Piracy is a Business Model'
Nicol Wistreich

Giving the Keynote address at Mipcom, Disney co-chair Anne Sweeney has broken with studio convention and recognised piracy as a business model to compete with, as opposed to simply an illegal threat to be battled. Sweeney's pragmatic conversion came after seing - within 15 minutes of the ABC network premiere of Despearate Housewives - a high-quality, ad-free version that had appeared on P2P networks.

“We understand now that piracy is a business model,” said Sweeney, twice voted Hollywood's most powerful woman by the Hollywood Reporter. “It exists to serve a need in the market for consumers who want TV content on demand. Pirates compete the same way we do - through quality, price and availability. We we don’t like the model but we realise it’s competitive enough to make it a major competitor going forward.”

In the year since the iTunes deal was first done with Apple, Disney has sold 12.8 million episodes via iTunes and 51 of the 272 TV series available on the service are Disney products.

As reported on PaidContent.org, Sweeney's address also pointed out:

- Eighty-four percent of those that used the on-demand service said that it was a “good deal” to get a free episode in return for watching an ad and, significantly for advertisers, 87 percent of those could recall the advertiser that sponsored the programme.

- Sweeney outlined Disney’s strategy as: being primarily about content because it drives everything else; being about maximising new platforms for both content and advertisers; and sharpening its brands, because consumers choose brands they know and trust.

- Partnership, she said, is critical because Disney needs “compatible brands” to focus on its core aims of: a quality user experience; growth on delivering consumer value; content valuation and protection; and a commitment to market products and services.
- “The digital revolution has unleashed a consumer coup. We have to not only make in-demand content but make it on-demand. This power shift changes the way we think about our business, industry and our viewers. We have to build our businesses around their behaviour and their interests.”

- “The most powerful creativity comes in response to a challenge - as long as you know who you are and where you want to go.”

- “All of us have to continually renew our business in order to renew our brands because audiences have upper hand and show no sign of giving it back.”
http://www.bizofshowbiz.com/2006/10/...ts_attack.html





MusicNet, Napster Agree Digital Royalties Deal

Digital music service providers MusicNet and Napster have agreed a three-year deal on royalty rates to pay songwriters and music publishers for digital downloads in Britain.

Under the deal, the composers, writers and music publishers will receive 8 percent of gross revenue, excluding VAT, when their music is offered by MusicNet and Napster.

MCPS-PRS Alliance, which represent the composers, songwriters and music publishers, agreed the same deal at the end of September with Apple's iTunes and mobile operators Vodafone, O2, France Telecom's Orange and Deutsche Telekom's T-Mobile.

The alliance said in a statement that both parties welcomed the agreement and were committed to working together to drive the on-going growth in the legitimate digital music market.

MusicNet provides the technology to run services for other brand name digital music providers. Napster became a legal download site in 2003 after having been forced to close by a series of legal battles over copyright infringement.
http://news.yahoo.com/s/nm/20061009/...4yBHNlYwNmYw--





Their Crime: Playing iTunes on Devices Not Named iPod
Thomas Crampton

It took more than 10 minutes to persuade the Paris police station’s highest-ranking officer that a crime might have taken place, but that did not deter Jérôme Martinez and his two companions.

After all, the three had marched halfway across the Latin Quarter one evening in late September, accompanied by about 40 fellow advocates, waving banners and handing out parking-ticket-style leaflets that claimed they had committed a number of offenses.

Among their crimes was listening to a song purchased from iTunes on a device not made by Apple Computer. The group, StopDRM, largely made up of young computer enthusiasts, was protesting the growing number of subtle restrictions used to limit the use of legally purchased songs and videos.

Protection measures, often called digital rights management, or DRM, are supposed to prevent piracy. But critics of the measures say they smack of Big Brother-style controls.

France, long concerned with expanding the diversity of global culture to make room for French offerings, has paid particular attention to digital controls. This summer, while updating copyright regulations, France enacted a law intended to force compatibility of digital music across all devices.

“France really pushed forward the debate over protection measures,” said Ted Shapiro, general counsel for Europe of the Motion Picture Association, the international arm of the Motion Picture Association of America.

In the end, the French law strengthened the hand of studios and record labels by prohibiting a person’s ability to circumvent protection measures; it never required songs to be transferred from one format to the others.

Similar regulations were laid out in the United States by the Digital Millennium Copyright Act of 1998.

In mounting their protest, members of the group in Paris saw themselves as foot soldiers of the digital generation battling against ever-tighter controls over songs, film and all digitized culture.

Greeted at the police station by almost as many armed riot police officers as there were protesters, they explained their infractions to passers-by.

“Not only did I not use an iPod to listen to an iTunes song, but I transferred the film ‘Blade Runner’ onto my hand-held movie player,” Mr. Martinez, 28, said. “I am willing to face the consequences of what they consider an offense.”

By his own calculation, Mr. Martinez could face a fine of as much as 41,250 euros, or about $52,000, and six months in prison.

Mr. Martinez patiently laid out the case he built against himself, offering details about his infractions, which included switching music from one format to another and transferring the DVD’s to different players.

“They say the law is intended to stop piracy, but I am not a pirate,” Mr. Martinez said. “I support artists with legally purchased works, but I do not want to be forced to use a particular device to play them.”

The process of switching the music from the Apple or Microsoft formats to the MP3 format removes all copying restrictions. Transferring the DVD also requires bypassing protection measures.

Mr. Martinez figured he could face fines of 3,750 euros ($4,663) for each transfer and 30,000 euros ($37,809) plus as much as to six months in prison for telling others how to do the same thing.

At that point a policeman, dressed in plain clothes, came out from behind the line of riot police to escort the three inside the station, where they could register their offenses.

While the impact of the law’s push for compatibility across devices remains unclear, Mr. Shapiro argued against legislating technical standards. “The studios do not want to control culture,” he said. “They want to get a return on investment.”

More than a week later, Mr. Martinez said, he took the additional step of sending registered letters to Microsoft and Apple informing them of his actions, but he still did not know whether a prosecution would take place.

“It is a complicated and new issue, so I am not surprised at the slow reaction,” he said. “Or maybe the police realize that there are more important things for the government than forcing me to use an iPod when listening to ‘Les Lacs du Connemara.’ ”
http://www.iht.com/articles/2006/10/...ss/steal09.php





It’s a living

Jury Awards $11.3M Over Defamatory Internet Posts
Laura Parker

A Florida woman has been awarded $11.3 million in a defamation lawsuit against a Louisiana woman who posted messages on the Internet accusing her of being a "crook," a "con artist" and a "fraud."

Legal analysts say the Sept. 19 award by a jury in Broward County, Fla. — first reported Friday by the Daily Business Review — represents the largest such judgment over postings on an Internet blog or message board. Lyrissa Lidsky, a University of Florida law professor who specializes in free-speech issues, calls the award "astonishing."

BEWARE OF BLOGS: Courts are asked to crack down on bloggers, websites

Lidsky says the case could represent a coming trend in court fights over online messages because the woman who won the damage award, Sue Scheff of Weston, Fla., pursued the case even though she knew the defendant, Carey Bock of Mandeville, La., has no hope of paying such an award. Bock, who had to leave her home for several months because of Hurricane Katrina, couldn't afford an attorney and didn't show up for the trial.

"What's interesting about this case is that (Scheff) was so vested in being vindicated, she was willing to pay court costs," Lidsky says. "They knew before trial that the defendant couldn't pay, so what's the point in going to the jury?"

Scheff says she wanted to make a point to those who unfairly criticize others on the Internet. "I'm sure (Bock) doesn't have $1 million, let alone $11 million, but the message is strong and clear," Scheff says. "People are using the Internet to destroy people they don't like, and you can't do that."

The dispute between the two women arose after Bock asked Scheff for help in withdrawing Bock's twin sons from a boarding school in Costa Rica. Bock had disagreed with her ex-husband over how to deal with the boys' behavior problems. Against Bock's wishes, he had sent the boys to the boarding school.

Scheff, who operates a referral service called Parents Universal Resource Experts, says she referred Bock to a consultant who helped Bock retrieve her sons. Afterward, Bock became critical of Scheff and posted negative messages about her on the Internet site Fornits.com, where parents with children in boarding schools for troubled teens confer with one another.

In 2003, Scheff sued Bock for defamation. Bock hired a lawyer, but he left the case when she no longer could afford to pay him.

When Katrina hit in August 2005, Bock's house was flooded and she moved temporarily to Texas before returning to Louisiana last June. Court papers that Scheff and her attorney David H. Pollack mailed to Bock were returned to Pollack's office in Miami.

After Bock didn't offer a defense, a Broward Circuit Court judge found in favor of Scheff. A jury then heard Scheff's arguments about damages. Pollack did not seek a specific amount for the harm he says Scheff's business suffered.

"Even with no opposing counsel and no defendant there, $11 million is a huge amount," says Pollack, adding that Scheff is considering whether to try to collect any money from Bock. "The jury determined this was a significant enough issue. It's not just somebody's feelings are hurt; it's somebody's reputation is ruined."

Bock says that when she moved back to her repaired house over the summer, she knew the trial was approaching but did not know the date. She says she doesn't have the money to pay the judgment or hire a lawyer to appeal it. She adds that if the goal of Scheff's lawsuit was to stifle what Bock says online, it worked.

"I don't feel like I can express my opinions," Bock says. "Only one side of the story was told in court. Nobody heard my side."
http://www.usatoday.com/news/nation/...ion-case_x.htm





RIAA Drops Wilke Case in Chicago

We have just learned that the RIAA has dropped the Wilke case in Chicago.

Stipulation of Dismissal with Prejudice*

This is the case in which Mr. Wilke moved for summary judgment, stating that:

1. He is not "Paule Wilke" which is the name he was sued under.
2. He has never possessed on his computer any of the songs listed in exhibit A [the list of songs the RIAA's investigator downloaded] He only had a few of the songs from exhibit B [the screenshot] on his computer, and those were from legally purchased CD's owned by Mr. Wilke.
3. He has never used any "online media distribution system" to download, distribute, or make available for distribution, any of plaintiffs' copyrighted recordings.

The RIAA's initial response to the summary judgment motion, prior to the dismissal, had been to cross-move for discovery, indicating that it did not have enough evidence with which to defeat Mr. Wilke's summary judgment motion.

Mr. Wilke was represented by Saper Law Offices of Chicago, Illinois.

In response to our question as to whether any money had changed hands in connection with the settlement, Mr. Wilke's attorneys responded: "Plaintiffs, the RIAA, and SBC worked cooperatively and amicably to resolve this dispute."
http://recordingindustryvspeople.blo...n-chicago.html





Who would’ve thought?

Report Says Nonprofits Sold Influence to Abramoff
James V. Grimaldi and Susan Schmidt

Five conservative nonprofit organizations, including one run by prominent Republican Grover Norquist, "appear to have perpetrated a fraud" on taxpayers by selling their clout to lobbyist Jack Abramoff, Senate investigators said in a report issued yesterday.

The report includes previously unreleased e-mails between the now-disgraced lobbyist and officers of the nonprofit groups, showing that Abramoff funneled money from his clients to the groups. In exchange, the groups, among other things, produced ostensibly independent newspaper op-ed columns or news releases that favored the clients' positions.

Officers of the groups "were generally available to carry out Mr. Abramoff's requests for help with his clients in exchange for cash payments," said the report, issued by the Senate Finance Committee. The report was written by the Democratic staff after a yearlong investigation and authorized by the Republican chairman, Sen. Charles E. Grassley (R-Iowa).

Abramoff has pleaded guilty to fraud and conspiracy and could go to prison as early as next month. Prosecution and defense lawyers jointly filed papers yesterday asking a judge to recommend that he be sent to a federal facility in Cumberland, Md., to make it easier for him to cooperate with the ongoing probe. The investigation has resulted in one conviction and seven guilty pleas -- including one from a lawmaker, Rep. Robert W. Ney (R-Ohio), who is to appear today before a federal judge in the District.

The Senate report released yesterday states that the nonprofit groups probably violated their tax-exempt status "by laundering payments and then disbursing funds at Mr. Abramoff's direction; taking payments in exchange for writing newspaper columns or press releases that put Mr. Abramoff's clients in a favorable light; introducing Mr. Abramoff's clients to government officials in exchange for payment; and agreeing to act as a front organization for congressional trips paid for by Mr. Abramoff's clients."

The report bolstered earlier revelations that Abramoff laundered money through the nonprofits to pay for congressional trips and paid Norquist to arrange meetings for Abramoff's clients with government officials including White House senior adviser Karl Rove.

The groups named in the report are Norquist's Americans for Tax Reform; the Council of Republicans for Environmental Advocacy, which was co-founded by Norquist and Gale Norton before she became secretary of the interior; Citizens Against Government Waste; the National Center for Public Policy Research, a spinoff of the Heritage Foundation; and Toward Tradition, a Seattle-based religious group founded by Rabbi Daniel Lapin.

E-mails released by the committee show that Abramoff, often with the knowledge of the groups' leaders, exploited the tax-exempt status and leveraged the stature of the organizations to build support among conservatives for legislation or government action sought by clients including Microsoft Corp., mutual fund company DH2 Inc., Primedia Inc.'s Channel One Network, and Brown-Forman, maker of Jack Daniel's whiskey.

A spokesman for Norquist, John Kartch, called the report "political nonsense" pushed by Democrats close to the midterm elections.

Norquist's attorney, Cleta Mitchell, had told the Senate panel that, as long as Americans for Tax Reform spends funds in keeping with its general purpose, "there is no 'abuse' of ATR's tax status." Officials with the Council of Republicans for Environmental Advocacy denied wrongdoing. Citizens Against Government Waste said the group did not abuse its tax status and always adhered to long-held positions.

Amy Ridenour of the National Center acknowledged in an interview with investigators that donations can have some sway with think tanks but denied that they were made in exchange for positions.

Sen. Max Baucus (Mont.), the Finance Committee's ranking Democrat, called on the IRS and the FBI to investigate. "These groups' dealings with Jack Abramoff certainly violated the spirit, and perhaps the letter, of the laws that give charitable and social welfare organizations a break for the good work they're supposed to do," Baucus said in a statement.

A spokeswoman for Grassley said the chairman did not co-write the report because he had hoped it would include a broader range of groups that he believes also breached their tax status. A Baucus aide said the Democratic staff did not object to a broader review.

The Abramoff scandal has bruised the image of Norquist, a friend of Abramoff's since their days in the College Republicans. Often consulted by Rove, Norquist for decades has convened a key Wednesday morning strategy session for conservative leaders, lobbyists and Republican lawmakers.

Abramoff traded on Norquist's cachet, at one point referring to him in an e-mail as a "hard-won asset" of his lobbying empire. In exchange for Norquist's opposition to taxes on Brown-Forman products, Norquist recommended that a $50,000 donation be made to Americans for Tax Reform, according to an Abramoff e-mail.

"What is most important, however, is that this matter is kept discreet," Abramoff wrote to a colleague at the Preston, Gates & Ellis law firm. "We do not want the opponents to think that we are trying to buy the taxpayer movement."

The e-mails show that Abramoff and Norquist explicitly discussed client donations to Norquist's group in exchange for Norquist's support. The group's advocacy "appears indistinguishable from lobbying undertaken by for-profit, taxable firms," the report said.

Among those who agreed to donate money for an opinion piece was DH2, which in 2004 pushed for tax breaks for its customers.

E-mails show that DH2 understood that Norquist's help came with a price tag. The tab was sent to DH2's managing director, Robert S. Rubin.

"I told Rubin he needs to round up some $$$ for ATR," wrote lobbyist Michael E. Williams to his boss, Abramoff.

"Get the money from Rubin in hand," Abramoff replied, "and then we'll call Grover."

How much, Williams asked.

"50K," Abramoff wrote.

Abramoff e-mailed Norquist on Feb. 10, 2004: "I have sent over a $50K contribution from DH2 (the mutual fund client). Any sense as to where we are on the op-ed placement?"

Replied Norquist: "The Wash Times told me they were running the piece. . . . I will nudge again."

The Washington Times has published about 50 Norquist op-eds since 1993 but apparently none on mutual funds. Norquist did write a letter in April 2004 to a congressman praising him for sponsoring "legislation that would finally allow mutual fund shareholders to defer their capital gains tax" and pledging that his group "is committed to helping you pass this legislation."

Norquist wrote an op-ed piece, published in the Washington Times, as part of an extensive Abramoff campaign for Channel One, which broadcasts educational programming and advertising into public school classrooms. An Abramoff e-mail to Norquist offered him $1,500 for an op-ed, and another e-mail exchange suggested up to $3,000 to buy an "economic analysis."

The Council for Republican Environmental Advocacy, founded by Norquist and Norton, who resigned as interior secretary earlier this year, also appeared to have been used "as an extension of Mr. Abramoff's lobbying organization," the report said.

Abramoff directed his client Indian tribes to donate a total of about $500,000 to the group, telling them that the donation was a way to cultivate Norton at the Interior Department, which oversees the tribes and their casinos. E-mails show that Abramoff told the tribes that they would be CREA's "trustees" and that Norton would "host" a series of CREA dinners. Interior Department documents obtained by The Washington Post suggest that Norton was an invited guest at a CREA dinner, not a host.

Research editor Alice Crites contributed to this report.
http://www.washingtonpost.com/wp-dyn...200889_pf.html





My patch has a patch on it

Microsoft Releases 6 Patches for Flaws
Allison Linn

Microsoft Corp. on Tuesday released six patches to fix software flaws that carry its highest threat rating, including three for defects that attackers were already trying to exploit.

The company said all six of the critical flaws could allow an attacker to obtain some access to other people's computers.

The Redmond software maker also released four other patches to fix vulnerabilities that the company deemed less severe.

Customers can download all the patches for free on Microsoft's security Web site and also can sign up to have them automatically delivered to their computers. The automatic update system went down for several hours Tuesday, but the problem was later resolved.

Microsoft said last month that it knew attackers were already trying to take advantage of defects in its Windows operating system, Microsoft Word software and PowerPoint presentation program.

Christopher Budd, a program manager with the Microsoft Security Resource Center, said that the company had seen limited attacks exploiting the flaws, but were nevertheless recommending that users apply those and other patches immediately.

Such vulnerabilities are rare. In most cases, security experts quietly provide Microsoft evidence of a security flaw, allowing the company to fix the problem in secret and release a patch before attackers can take advantage of it.

But recently, the company has been hit with a number of so-called "zero-day" attacks, in which flaws are targeted before Microsoft is aware of them or can release patches.

Such attacks have prompted some security researchers to release their own interim fixes. Microsoft also has occasionally taken the unusual step of releasing patches outside of its normal monthly fix schedule, so users can be safeguarded more quickly.

Budd said Microsoft isn't seeing any specific pattern to the burst of zero-day attacks. But he said the company is seeing more focus on attackers trying to infiltrate computers through applications - such as Word or PowerPoint - rather than the Windows operating system.

Microsoft software is a constant target of Internet attackers, in part because the company's products are so widely used.

Microsoft has yet to release a patch for one other publicly known flaw - one affecting the Internet Explorer browser that is part of its Windows operating system. Budd said the company was seeing very few attacks as a result of the flaw.
http://hosted.ap.org/dynamic/stories...10-11-18-53-27





YouTube Strikes Content Deals
Tony Avelar

YouTube Inc. struck deals with CBS and two major music labels Monday as the popular video-sharing Web site races to befriend content providers and avoid copyright-infringement lawsuits.

The separate agreements with CBS, Vivendi's Universal Music Group and Sony BMG Music Entertainment come less than a month after YouTube reached a deal with Warner Music Group Corp. On Friday, Google Inc. was reported to be in talks to acquire the video site for $1.6 billion.

CBS Corp. said it will provide short-form video content for a CBS "brand channel" on YouTube's site starting this month. It will include news, sports, Showtime and prime-time programming. Among the offerings CBS said it plans to offer are short clips from top programs including "Survivor," as well as mini-previews for new fall shows.

YouTube and CBS will share revenue from advertising sponsorships of CBS Videos, CBS said.

"We're now able to offer select entertainment, news and sports programming to a new significant audience, get paid for it, and learn a few things along the way," said Leslie Moonves, president and chief executive of CBS.

CBS will also test new YouTube technology that will help the network find copyrighted content on YouTube and remove it. CBS will also be allowed to leave that content on the site, and share revenue from advertising that appears next to the copyrighted video.

Separately, Vivendi's Universal Music Group said Monday it agreed to give YouTube viewers access to thousands of music videos. The company said it and its artists will be compensated not just for the official videos, but also for user-generated content that incorporates Universal's music.

Financial details of the deal were not disclosed.

Universal Music Group said it will also use technology to filter out copyrighted content not authorized to appear on the YouTube site.

Sony BMG Music Entertainment, a joint venture between Sony Corp. and Bertelsmann AG, also said Monday it will make video content available on YouTube - and will also let YouTube users include some catalog songs in their own amateur video uploads.

Sony BMG said it will share advertising revenue with YouTube for all music videos that incorporate audio or video works from the Sony BMG library.

"YouTube is committed to balancing the needs of the fan community with those of copyright holders," said Chad Hurley, chief executive of San Mateo, Calif.-based YouTube.

CBS shares fell 16 cents to $28.31 in morning trading on the New York Stock Exchange, and American Depositary Shares of Sony lost 26 cents at $37.52.
http://hosted.ap.org/dynamic/stories...10-09-10-33-45





Dot-Com Boom Echoed in Deal to Buy YouTube
Andrew Ross Sorkin

A profitless Web site started by three 20-somethings after a late-night dinner party is sold for more than a billion dollars, instantly turning dozens of its employees into paper millionaires. It sounds like a tale from the late 1990’s dot-com bubble, but it happened yesterday.

Google, the online search behemoth, agreed yesterday to pay $1.65 billion in stock for the Web site that came out of that party — YouTube, the video-sharing phenomenon that is the darling of an Internet resurgence known as Web 2.0.

YouTube had been coveted by virtually every big media and technology company, as they seek to tap into a generation of consumers who are viewing 100 million short videos on the site every day. Google is expected to try to make money from YouTube by integrating the site with its search technology and search-based advertising program.

But the purchase price has also invited comparisons to the mind-boggling valuations that were once given to dozens of Silicon Valley companies a decade ago. Like YouTube, those companies were once the Next Big Thing, but some soon folded.

Google, with a market value of $132 billion, can clearly afford to take a gamble with YouTube, but the question remains: How to put a price tag on an unproven business?

“If you believe it’s the future of television, it’s clearly worth $1.6 billion,” Steven A. Ballmer, Microsoft’s chief executive, said of YouTube. “If you believe something else, you could write down maybe it’s not worth much at all.”

In a conference call to announce the transaction yesterday, there were eerie echoes of the late 1990’s boom time. There was no mention of what measures Google used to arrive at the price it agreed to pay. At one point, Google’s vice president, David Drummond, gave a cryptic explanation: “We modeled this on a more or less synergistic kind of model. You can imagine this would be hard to do on a stand-alone basis.”

The price tag Google paid may simply have been the cost of beating its rivals — Yahoo, Viacom and the News Corporation — to take control of the most sought-after Web site of the moment. It was also perhaps the only price that two YouTube founders, Chad Hurley, 29, and Steven Chen, 28, and their big venture capital backer, Sequoia Capital Partners, were willing to accept, given that they most likely could have continued as an independent company. A third YouTube founder, Jawed Karim, left the company to pursue an advanced degree at Stanford.

The deal came together in a matter of days. After rebuffing a series of other overtures, YouTube’s founders decided to have lunch on Wednesday with Google’s co-founder, Larry Page, and its chief executive, Eric E. Schmidt. The idea of a deal had been broached a few days earlier. The setting was classic Silicon Valley start-up: a booth at Denny’s near YouTube’s headquarters in San Bruno, Calif. The Google executives threw out an offer of $1.6 billion and autonomy to continue running the business.

That set off a marathon of meetings and conference calls over the next two days, which kicked into even higher gear on Friday, when news of the talks began to circulate, putting pressure on Google to sign a deal before a rival bid emerged. In fact, the News Corporation sent a letter to YouTube seeking to start talks but never received a response.

“The Google-YouTube deal has to feel a little like the 1990’s, but it isn’t,” said Dmitry Shapiro, chief executive of Veoh, a YouTube competitor that is backed by Time Warner and Michael D. Eisner, the former chairman of Disney. Arguing that online video represents an entirely new medium, he said, “If you knew then what you know now and you had the chance to acquire Amazon or eBay — which weren’t making any money either — you would have bought them.”

Of course, YouTube has also been compared to Napster, whose music-sharing service was eventually shuttered after a series of lawsuits. While YouTube has made some deals with content providers, including one yesterday with CBS, its users have uploaded millions of copyrighted clips, leading some to question whether Google is inheriting a legal minefield. YouTube has said it is different from the old Napster service because it removes content when a copyright holder complains.

“There are some issues with YouTube,” Sumner M. Redstone, chairman of Viacom, said last week on “The Charlie Rose Show.” “They use other people’s products,” he said, alluding to pirated video. “The only way they avoid litigation now is they stop doing it if you call them.”

Mark Cuban, who founded Broadcast.com, an early audio and video site that was bought by Yahoo, is even more skeptical of Google’s legal position, writing on his blog: “I still think Google lawyers will be a busy, busy bunch. I don’t think you can sue Google into oblivion, but as others have mentioned, if Google gets nailed one single time for copyright violation, there are going to be more shareholder lawsuits than Doan’s has pills to go with the pile-on copyright suits that follow.”

Yet the deal with Google was announced hours after YouTube disclosed deals with entertainment companies that appeared to reduce the risk that it would become mired in copyright disputes.

YouTube is Google’s first big acquisition after making a series of much smaller deals for companies, including Pyra Labs, creator of Blogger. Google now joins the Internet’s establishment — Yahoo, eBay and Amazon.com, among others — which have all made giant acquisitions to expand their businesses beyond their traditional trade.

But those companies have had mixed results. Yahoo paid $3.6 billion in 1999 for Geocities, a company that allowed users to create their own Web sites; today, MySpace, a social networking site bought by Rupert Murdoch’s News Corporation last year for only $580 million, far eclipses it. EBay, on the other hand, acquired PayPal, a rapidly growing start-up that lets people make payments via e-mail, for $1.5 billion in 2002. It now represents more than a third of eBay’s revenue.

Rather than pursuing big acquisitions, Google has been known for plowing money into research and development, spending $483.98 million last year, an increase of more than 114 percent over the previous year.

The success of the YouTube acquisition will probably lie in embedding video advertising into the clips that millions of people watch everyday from their computers. So far, YouTube’s management has been reluctant to include advertising within clips, for fear of alienating users.

Yesterday, however, Mr. Hurley, one of YouTube’s founders, appeared more open to experimenting, saying that he was even considering testing what’s known as a pre-roll — a 15-second ad before a clip — something he had long derided as potentially ruining the user experience.

While more marketers have been eager to advertise against online video, some big consumer companies have been reluctant to fully embrace advertising against user-generated content because it is difficult to differentiate good content from offensive material. YouTube has created an assortment of tools for users and content creators to police its site.

YouTube said it had struck accords to license content from two of the four major music conglomerates — the Universal Music Group and Sony BMG Music Entertainment — and the CBS television network in exchange for a percentage of YouTube’s advertising revenue.

YouTube is also expected to use new technology to identify copyrighted material that users have uploaded to the site without permission, and to share ad revenue with media companies that own the video or music content. (YouTube made a similar pact with the Warner Music Group last month, and had a previous advertising deal with NBC in June).

The deals reflect how media companies are rethinking the distribution of their entertainment content online.

The deal with Universal, the world’s biggest music corporation, drew particular attention because the company had said it was contemplating a lawsuit against YouTube over copyright issues.

Phil Leigh, the president of Inside Digital Media, said the new arrangements represented “a strong endorsement that the major media companies are going to see YouTube as a legitimate business partner.”

Mr. Leigh said that also suggested a rethinking of the approach the companies took to Napster. “It shows that very important, erstwhile reluctant media companies have got religion,” he said.

The YouTube alliances also came the same day that Google announced separate deals to license music videos from Sony BMG and Warner.

Under the terms of the deal, YouTube, which has about 60 employees, will retain much of its identity and will keep its name and its office in San Bruno, more than 25 miles from Google’s headquarters in Mountain View.

The transaction was announced after the stock market closed. Earlier, Google shares rose 2 percent, to $429, after DealBook, a Web log published by nytimes.com, reported that a deal would be announced at the end of the market day.

Benjamin Schachter, a UBS analyst, wrote in a note to investors. “The price tag of about $1.6 billion is difficult to justify on a spreadsheet and may be somewhat of a throwback to the days of paying for eyeballs and page views, but this is a strategic bet that Google would be placing for a long-term objective: to be the technology and distribution partner for content owners and publishers.”

Jeff Leeds contributed reporting.
http://www.nytimes.com/2006/10/10/te...gy/10deal.html





YouTube Community Worried By Google Deal
Jake Coyle

After landing a $1.65 billion deal to sell their video sharing Web site to Google Inc., the co-founders of YouTube did the obvious: They posted a goofy, unrehearsed video, thanking the YouTube community for its support.

But the cameraman poses a question to Chad Hurley, 29, and Steve Chen, 27, that goes unanswered: "What does (the deal) mean for the user community?"

That's what thousands of YouTubers are wondering. Will YouTube 2.0 still have room for the bedroom video makers that created the site's billion-dollar identity? Or will the little guy be crowded out by advertising and corporate involvement?

"We could have never built this without the community. That is what we're fiercely protecting," Julie Supan, the senior director of marketing at YouTube, said Wednesday.

The YouTube community is also very protective - including Richard Stern, better known as LazyDork, a rapping, dancing, opinion-spewing defender of the site's grass-roots nature.

"The Wild West feel of YouTube is already slipping away, and within a few weeks it likely will be gone altogether," says Stern.

YouTube isn't as lawless as the old West, but it has served as the gateway to a new online frontier. Since its start in February 2005, YouTube has become the pre-eminent site for Internet video, drawing a worldwide audience of 72.1 million in August.

Though enormously expansive, YouTube nevertheless has a distinct community of users who communicate by video and posted comments. This motley crew is made up of bloggers, vloggers and other users, many of whom bristled when stars like Paris Hilton and Diddy attempted to promote albums with YouTube video channels.

Now, some are expecting other, larger entities to shake up the YouTube democracy, where amateurs stand on equal footing with the professionals. The pros are growing in number: YouTube has recently reached agreements with CBS Corp., Vivendi's Universal Music Group, Sony BMG Music Entertainment, NBC Universal and Warner Music Group Corp.

"What we've seen over the last year is, it doesn't matter if it's professional content or if it's user-generated content," says Supan. "What the community decides by is how entertaining is the content."

Hurley and Chen's thank-you video has been viewed by more than 1.3 million people and has a rating of 4 1/2 stars out of 5. It also has yielded the most discussion of any recent video by far. Many of the comments urge the founders well and congratulate them on their tremendous payday. Many, however, have voiced skepticism.

"Since it was the `people' that made YouTube, why aren't they being paid billions?" wrote a user named winofiend. "Good for you guys. Please don't let our community be destroyed!" wrote Pookieftw. "Preserve the freeness of this site. Please," wrote Poloinspace.

A frequent poster of videos named Renetto replied with sarcasm: "You actually learned how to post a video on your own Web site. This is breaking news."

Others have faith in Google, which is generally known for innovation and Internet savvy. A prominent figure of the YouTube community, boh3m3 said, "Come on, man. Google is good. If it had to be bought by any company, I have to say Google is a ... great choice."

"The community is very honest," says Supan, laughing at her understatement. "That's the beauty of the community - everyone has a voice."

As part of the deal, Hurley, Chen and the other 65 YouTube employees will continue to work independently at their new offices in San Bruno, Calif. Google is expected to give YouTube a considerable marketing boost, increasing the number of ads on the site.
Luke Barats, who with his comedy partner Joe Bereta has parlayed their popular YouTube sketch videos into a pilot deal with NBC, is happy for YouTube's creators. His concern, though, lies with increased advertising.

"If the advertising is kept as unobtrusive as possible, I doubt there will be much backlash from the YouTube community," says Barats. "The fact of the matter is that YouTube still offers a great product - a widely used embeddable player that works on both PC and Mac."

Stern fears an increase in advertising will take up precious space on YouTube's home page, which lists featured videos.

"In order to become widely popular on YouTube, it's almost imperative that you get featured on the front page," says Stern, 28. "YouTube has already begun selling off its top front page real estate to advertisers and Google, one of the top Internet advertising brokers, is not going to make matters any better."

Supan, though, says that pre-roll ads aren't going to be added to the front of videos, and notes that the video advertisement on YouTube's home page is participatory: you have to press play.

"(Advertisers) are very concerned with coming into this community in the right way," she says. "They don't want to come in and muck up the site. They want to do what fits with the environment."

The future of YouTube has been much speculated upon practically since its inception - and doomsayers have been a constant. In particular, Mark Cuban, the outspoken dot-com billionaire and owner of the Dallas Mavericks pro basketball team, has blogged that copyright issues will eventually ruin YouTube just as they did Napster.

Legal experts generally dispute that view since YouTube has consistently relied on the safe harbor provision of the Digital Millenium Copyright Act of 1998 as a shield against lawsuits. However, that doesn't mean individual users who post copyrighted material won't be sued. YouTube explicitly states that such users are liable.

"We may see fewer postings of copyrighted works, but only if the content providers start suing YouTube users," says Jennifer Rothman, an associate professor of law at Washington University in St. Louis. "And I suspect they may do that because they're not going to be able to go after YouTube direct."

Juggling the wants and needs of its user community with YouTube's rapid growth - be it ads propelled by Google or copyright concerns from media companies - will likely remain an ongoing dance for YouTube.

Barats' partner, Bereta, recalls that the comedy duo were certain to include as part of their deal with NBC the continued freedom to post videos on YouTube.

Echoing the sentiment suggested in Hurley and Chen's bare-bones video, Barats explains, "It's kind of that whole don't-forget-where-you-came-from thing."
http://hosted.ap.org/dynamic/stories...10-11-18-56-40





The Google Test
William Jolitz

(Editor’s note: Entrepreneur William Jolitz posits a contrarian view on YouTube, praising its expensive use of bandwidth as a key to its sucess. Read on about how YouTube meets the “Google Test.”)

I was over at Buck’s recently catching up and comparing notes with some of my colleagues running the gauntlet pitching to local investment firms. Even though we all have completely different startups, we found we’ve been asked the same questions about business model - in short, what did we deliver?

So I dropped by my old friend and mentor Marty Tenenbaum of Commerce.net, who’d led in helping me to get my first start-up funded years back. We took a closer look at YouTube’s return on a “million a month” in bandwidth costs. It all came clear. They pass “The Google Test”.

So what’s “the Google Test”?

Google consumes a fantastic amount of bandwidth, efficiently translated into revenue over many years. Long before Google was a “Big IPO”, I was a senior exec at a managed service provider. Wayne Rosing, then Google’s VP Engineering, asked me to bid out the lowest cost way for Google to ship a massive database update between coasts. I hadn’t the heart to mention that Jim Gray of Microsoft maintained the best solution was to UPS overnight disk drives. They use bandwidth like nobody else, and it’s a long-standing problem.

Yet even as Google’s bandwidth costs have risen, their revenues, success and prestige have multiplied. Think about it.

Sequoia has a thing for companies that squirt gigabytes to make gigadollars. Even Bill Gates paid homage to this last year, both in his discussion of a “sea change” towards Internet services, and in Microsoft’s partnership with AP over video news.

So in looking at Google and now YouTube, maybe the question isn’t one of obsessing over bandwidth costs - great engineers like Wayne get there eventually. Instead we should ask how can we drive revenue sources by driving tons of content like Google and YouTube do? How much you displace in the ad space (Google) or TV (YouTube) is more important than what you displace it with.

Driving bandwidth costs up means stealing the percentage share of the total audience from others. The higher the costs, the fewer can compete. It’s a bold strategy not for the timid businessman or investor. Like the oil barons of another age (where do you think we got Stanford University), getting the corner on the market is mostly keeping everyone else out of it.

Customer created or repurposed content is the linchpin of a bandwidth driven business model. Older mainline publishers just can’t compete with the plethera of “free” media appearing on Internet portals and are struggling to maintain their mindshare - simultaneously feeding these self-same portals with expensively generated “journalistic” stories that make the high percentage of amateurish video and slashdot-like rants bearable.

As the rush to grab more consumer content surges, tools and services to make this material better, faster, cheaper become valuable. Rapid content generation services like blogs for text stories and services for video content accelerate and lower new content creation costs and time, supplying the pipe at a fraction of the cost of traditional approaches.

Do bandwidth-driven business models have the winning edge, displacing Moore’s law models as an investment strategy? We’re too early in the game to know, but it’s a provocative question. News and publishing are moving to center stage as print moves to the Internet, causing a major business model disruption. As print value collapses with the flood of cheap electronic media, it is washed out — driven off what print/broadcast publishers would consider an excessive bandwidth investment. Content value collapses, creating an entirely new group of media moguls. Those too frugal to invest in a bandwidth-driven business model, waiting for someone else to “double the speed”, may find too little, too late.

Google and their backers showed us how to seize a market boldly. YouTube is attempting the same strategy with video. As the new publishing magnates rewrite the industry with embedded targetted advertising that floats up in value as it outcompetes the moribund print side, old world industries take note: Take a hard look at your online business and see if you pass “The Google Test”.
http://www.venturebeat.com/contribut...e-google-test/





Google Offering Free Software Package
AP

Google Inc. is making its word processing and spreadsheet programs available for free to all comers on its Web site, marking the Internet search leader's latest effort to provide an alternative to Microsoft Corp.'s dominant software applications.

The software package, expected to be available Wednesday, combines a spreadsheet application that Google introduced in June with a word processing program called Writely that the Mountain View-based company bought for an undisclosed amount in March.

As part of the expansion, the Writely name will disappear. The new package will be called Google Docs & Spreadsheets.

Google also had been limiting usage of both the word processing and spreadsheet programs, but the company now expects to be able to accommodate anyone who signs up, said product manager Jonathan Rochelle.

Wednesday's move continues Google's attempt to assemble a suite of software applications that are tethered to an Internet connection instead of a single computer's hard drive. That makes it easier for people to work on the same document from different locations, a convenience that is also meant to encourage more sharing among users with common interests or goals.
http://hosted.ap.org/dynamic/stories...10-11-01-19-57





Singapore Plans Free Wireless Internet
AP

Singapore's government said it plans to cover most of the island with public wireless Internet access by next year and offer nearly 10,000 subsidized computers to low-income students to offer digital opportunities to all its citizens.

The government will increase the number of public wireless "hot spots" from 900 to 5,000 by next year as part of the plan, Prime Minister Lee Hsien Loong told an audience late Tuesday evening while launching the Wireless@SG initiative marking 25 years of a drive to boost information technology in Singapore.

"We must create digital opportunities for all Singaporeans, and never allow a digital divide in our society," Prime Minister Lee Hsien Loong told the audience.

Lee said about 10,000 needy households with school-going children will qualify for subsidized computers, and efforts will be made to help the elderly and disabled use the Internet. The Straits Times newspaper reported that families that earn less than 2,000 Singapore dollars ($125) a month can purchase a computer for S$285 ($179)

The plan will offer free 512 kilobits per second wireless access for at least two years through telecom operators SingTel, iCell and QMax at public wireless hot spots across the city, said a press release from the government's Infocomm Development Authority, which is running Wireless@SG.

SingTel will offer the service free for three years; the others for two years.

"The three operators will bump up the number of Wireless@SG 'hotzones' in high-traffic, public areas ... to make wireless broadband a ubiquitous access mode by September 2007," the statement said.

The hot spots will be concentrated at town centers, business districts and shopping belts.

The development authority will pay up to 30 million Singapore dollars ($18.9 million) of the expected S$100 million ($63 million) cost for the wireless networks.
http://hosted.ap.org/dynamic/stories...10-11-05-49-48





Nokia Expects to Sell WiMAX Cell Phones in 2008

Nokia expects to start selling cell phones using the new WiMAX Internet technology in 2008, the world's top handset maker said on Wednesday while unveiling network technology for WiMAX.

For now, a computer can connect to a WiMAX fast wireless Internet connection only when it is stationary, but a new mobile version of WiMAX will be available this year, which is expected to be a breakthrough for the technology.

Intel, Nokia, Samsung and Motorola all support the open-standard WiMAX as an alternative wireless broadband Internet connection alongside third generation mobile telephony networks, on which Internet access can get squeezed if networks fill up with voice callers.

"WiMAX-capable Nokia mobile devices are expected to be available in 2008," Nokia said in a statement.

Nokia said its WiMAX base stations will be commercially available for broadband operators in the 2.5 gigahertz band at the end of 2007 and for 3.5 gigahertz in the first quarter of 2008.
http://today.reuters.com/news/articl...chnologyNews-2





Skype Lands Deal for Wi-Fi Access in Europe
David Meyer

Skype's Internet calling service will soon be accessible at The Cloud's Wi-Fi hot spots across Europe, the two companies announced on Tuesday.

Although normal online access to Skype's voice over Internet Protocol services is free to those connecting via PC, access to The Cloud's Wi-Fi network will require the use of a Skype-enabled phone from SMC Networks and payment of a 6.99-pound monthly service fee (about $13).

"We are delighted to partner with SMC Networks and extend the service we provide today with Skype to Wi-Fi-enabled handsets," Niall Murphy, The Cloud's chief technology officer, said on Tuesday.

"This agreement delivers on our commitment to provide the widest range of Wi-Fi services to customers across Europe," Murphy continued, adding that the deal "marks the start of a real low-cost alternative to traditional telecoms services."

The service will launch in the U.K. in October and spread to other European countries by the end of the year. The Cloud operates more than 8,500 hot spots around Europe.

At the moment, the only handset capable of being used in the service is the SMCWSKP100 model, which costs 150 pounds (about $277), but a spokesperson for The Cloud confirmed to ZDNet UK that it was "actively working with handset and other types of device providers to ensure these products work well in the public Wi-Fi environment."

Wi-Fi hot spots are available in a range of retail outlets, hotels and airports. The Cloud has also started to deploy outdoor hot spots in nine cities across the U.K.

David Meyer of ZDNet UK reported from London.
http://news.com.com/Skype+lands+deal...3-6124655.html





DOJ Approves AT&T-BellSouth Deal

The Justice Department approved AT&T's buyout of BellSouth Corp. on Wednesday, clearing a major hurdle for reuniting two modernized parts of the old Ma Bell phone monopoly that the government broke up in 1984.

The decision leaves the Federal Communications Commission as the final hurdle for a $78.5 billion deal to create the nation's biggest provider of phone, wireless and broadband Internet services.

The FCC is scheduled to vote on the matter Thursday, though there's been speculation the agency may hold off because of political pressures from Congress about the deal's possible impact on market competition.
http://www.businessweek.com/ap/finan.../D8KMFO1G0.htm





Classic Rock Driving Ringtone Growth
Antony Bruno

While hip-hop acts may rule today's ringtone charts, yesterday's stars are introducing the format to a broader audience and drive tomorrow's growth.

Only about 10 percent of wireless subscribers buy ringtones today, primarily young adults purchasing hip-hop and R and B-themed content. Record labels and wireless operators are keen to expand their market, particularly as the dominant format shifts from polyphonic ringtones to master recording clips. Exploiting the vast library of catalog music, they say, is emerging as a key strategy in that effort.

Acts like Devo, the B-52's, the Ramones, the Allman Brothers Band and Jimmy Buffett are generating healthy ringtone sales, and even Pink Floyd has found its way onto the mobile deck. Lynyrd Skynyrd's "Sweet Home Alabama" is one of the best-selling catalog ringtones of all time, with more than 1.2 million units sold, and became the first licensed track to appear in a mobile videogame.

Indeed, catalog-based ringtones are now the format's fastest-growing segment. Universal Music Group (UMG), for instance, says catalog ringtones sales are up 80% from last year and now represent 10 percent of all its ringtone sales.

"There is a growing audience that is interested in content that speaks to them, and it's not hip-hop," says David Dorn, senior VP of new-media strategy for Warner Music Group's Rhino Entertainment division. Carriers "have only featured hip-hop because that's all that sold. Well, that's because it's all they've featured. The only area of incremental growth for them is catalog. If all they do is focus on hip-hop, they just end up speaking to the same audience over and over."

Catalog music has been available in mobile form since ringtones first came onto the scene. But today labels and carriers are marketing catalog-based mobile content more aggressively.

Take Universal's September 26 deal with Verizon Wireless to bring the entire Jimi Hendrix catalog to mobile for the first time. Verizon won a short-term exclusive by agreeing to promote the Hendrix content heavily in print and online campaigns, as well as prominently feature the guitarist on its ringtone sales site.

It's the first time a wireless operator has applied a significant marketing push to a long-deceased catalog artist.

"Typically, operators have been focused on promoting Shakira, or Sean Paul, or Gwen Stefani or the Pussycat Dolls," says Rio Caraeff, GM of Universal Music Mobile. "Verizon felt (Hendrix) would help grow the marketplace and expose their service to more and different people than who would have seen it otherwise."

The Hendrix deal follows a yearlong music industry initiative, led by Rhino, to include a "Songs You Know" category featuring immediately recognizable classics from all major labels on carriers' ringtone sites. Sprint, Verizon, Cingular and Boost Mobile are among the carriers that now feature such a category.

Labels have responded by putting their own marketing dollars on the line. Rhino in the coming weeks will begin airing TV commercials supported by viral Internet ads promoting mobile content from the Doors -- currently its best-selling mobile catalog act -- as well as various '80s artists and old-school hip-hop tracks.

Dorn says new catalog content is making its way into mobile formats almost weekly. However, there are several challenges. First, labels are being more careful about which songs are selected to become ringtones or ringback tones from often massive catalogs.

"We have to identify what we feel are the best songs for mobile content," Dorn says. "This is not a Long Tail approach. That's how you approach iTunes -- you make really huge swaths of your catalog available and monazite those things that have been collecting dust. The business for ringtones is all about hits and instantly recognizable songs."

Second, and more significant, many major acts -- including Led Zeppelin, Bob Marley, the Beatles, Radiohead, Prince, the Eagles, Van Halen, Black Sabbath and Frank Sinatra -- remain noticeably absent in the ringtone world.

In many cases the label doesn't own the digital rights to the artist's work. In other cases, it owns digital rights to sell full tracks, but there's a "no edit" clause that prohibits the label from condensing the song into a clip needed for a ringtone.

Labels say they are in active negotiations to bring many of these holdouts around, and are close to finalizing several deals. However, some artists and their management are demanding significant upfront advances in return, while others simply don't want their work converted into a ringtone, or any digital form.

"There are always sensitivities depending on the artist," Caraeff says. "There are always challenges. You're navigating through lots of approvals. But ultimately we work through it."

He points to pending deals for Elvis Costello and Guns N' Roses in the near future.

"It's stuff like the Jimi Hendrix deal that will hopefully open the eyes of the holdouts," Dorn says. "Sometimes they just wait to see what other artists do and then they go, 'Why aren't we doing this?'"
http://today.reuters.com/news/articl...1_%5bFeed%5d-8





Retailers Pressure Studios on Web Deals
Gary Gentile

National retailers that control the lucrative DVD market are pressuring Hollywood studios to give them the same favorable deals being offered to Web-based download services such as Apple Computer Inc.'s iTunes.

The latest expression of concern from retailers was a letter sent to studios by the president of Target Corp.

The letter warned that Target might have to reconsider the amount of shelf space allocated for movies if studios undercut the wholesale price of DVDs by giving online services a better deal on digital offerings, said a studio executive who saw the letter but asked to remain anonymous because he was not authorized to publicly discuss its contents.

Similar concerns have been expressed by Wal-Mart Stores Inc. and other retailers.

"Clearly there is some concern that there is some erosion by downloading," Judith McCourt, market research director at Home Media Retailing, said Monday.

Target declined to provide a copy of the letter sent last month.

In a prepared statement Monday, Target called for "equity between the alternative means of delivering movies to consumers."

"Target does not object to competition, but we do expect a level playing field upon which to compete with the online services," the company said.

At issue is the low price some studios charge for films downloaded through such fledgling services as MovieLink, CinemaNow and Amazon.com's recently launched Unbox video store.

Retailers have been talking to studios for a year about such concerns. The issue came to a head with the decision last month by The Walt Disney Co. to sell digital downloads through Apple Computer Inc.'s iTunes store at a price that allows Apple to retail new releases for as low as $12.99.

The two-disc rerelease of Disney's "The Little Mermaid" now retails for $14.87 at Wal-Mart and $14.99 at Target. The movie can be bought for $12.99 on iTunes.

The iTunes version, however, does not include the special features contained on the second disc - one reason download services should be charged less for digital versions of films, studios have argued.

Disney is the only studio selling films on iTunes, and that could be the case for a while as other studios balk at Apple's inflexible pricing model and try to placate worried retailers.

The dispute comes amid strong DVD sales, most notably multi-disc packages of full TV seasons that command premium prices.

Overall DVD sales should grow in 2006, propelled by continuing demand for TV titles such as "Lost" and recent hit movies such as "X-Men: The Last Stand," according to Home Media Retailing magazine.

But sales could decline in 2007, according to industry analyst Richard Greenfield of Pali Research.

Online movie download services now account for less than 10 percent of movie sales, hardly a threat to retailers.

But retailers fear a shift in the future, when downloaded movies can be viewed on TVs as well as computer screens.

"I can see why Wal-Mart and Target are writing early on, but in terms of the immediacy of the threat, it's not there," McCourt said.
http://hosted.ap.org/dynamic/stories...10-09-18-06-10





Report: Libya to Buy Laptops For Kids
AP

The government of Libya has reached an agreement with an American nonprofit group to provide inexpensive laptop computers for all of the nation's 1.2 million schoolchildren, The New York Times reported Wednesday.

With the project scheduled to be completed by June 2008, Libya could become the first nation in which all school-age children are connected to the Internet through educational computers, Nicholas Negroponte, chairman of the One Laptop per Child project, told the newspaper.

The $250 million deal, reached Tuesday, would provide the nation with 1.2 million computers, a server in each school, a team of technical advisers, satellite internet service and other infrastructure.

The One Laptop per Child project, which has the support of the United Nations Development Program, aims to provide laptops to school-aged children worldwide - for about $100 each. It has reached tentative purchase agreements with Argentina, Brazil, Nigeria and Thailand.

Negroponte, a computer researcher at the Massachusetts Institute of Technology, said he had met with Moammar Gadhafi and the project appealed to the Libyan leader's political agenda of creating a more open Libya and becoming an African leader.

The two men discussed the possibility that Libya would also pay for laptops for poorer African nations like Chad, Niger and Rwanda, said Negroponte, who is the brother of U.S. National Intelligence Director John Negroponte.

Gadhafi surprised the world in late 2003 when he swore off terrorism and announced plans to dismantle his country's weapons of mass destruction programs. Libya was eager to end the international isolation and economic hardships from United Nations and U.S. sanctions. The U.S. has since opened an embassy in Tripoli.

A telephone call to that capital seeking comment from Libyan government spokesman Hassan al-Shawish went unanswered Wednesday.

Test models of the computers will be distributed to the participating countries in November, and mass production is expected to begin by July 2007, Negroponte said. They are to be produced by Taiwanese computer maker Quanta Computer Inc.

The machines are to be equipped with hand cranks or foot pedals, so that children can use them when electricity is too costly or not available. Expected to initially cost $150 and then be reduced in price, they will have wireless network access and run on an open-source operating system, such as Linux.

The project was inspired by Negroponte's experience giving Internet-connected laptops to children in Cambodia. He said the first English word spoken by those children was "Google."
http://hosted.ap.org/dynamic/stories...10-11-08-14-12





How Do You Secure 100 Million Laptops?
Ryan Naraine

If the plan is perfectly executed, Nicholas Negroponte's One Laptop Per Child project will deploy 100 million laptops in the first year. In one fell swoop, the nonprofit organization will create the largest computing monoculture in history.

Wary of the security risks associated with a computing monoculture—millions of machines with hardware and software of identical design—OLPC foundation officials are seeking help from the world's best hackers to review the full specifications of the $100 laptop's security model.

"This is an enormous challenge for us," said Ivan Krstić, director of the security and information platform efforts for the OLPC project in Cambridge, Mass. "Security for these machines is hands down the hardest thing I've ever worked on."

One Laptop Per Child's CTO explains how new display developments are bringing the $100 laptop closer to reality. Click here to read more.

Krstić has spent a large portion of 2006 slipping into security conferences around the world, schmoozing with hackers, trying to recruit computer security experts to look at the design and threat model and provide useful feedback.

"We want hackers to get in touch, look at the documentation, play with the machine, and try to break into it. We run the risk of getting parts of this wrong and that's not something we can afford," Krstić said in an interview with eWEEK.

A former director of research at the Medical Informatics Laboratory at Zagreb Children's Hospital, in Croatia, Krstić said he is well aware of the dangers of the monoculture. "If this succeeds, we'll have created the largest monoculture in the computer industry. To answer whether that's scary or not is a nontrivial question. The security implications are deeply frightening," he said.

The overall design goals have already been released to OLPC's security panel for review, and Krstić plans to publicly release the specs to generate feedback from the open-source community.

Krstić's team has already pinned down the security policy and threat model for the BIOS, the built-in software that runs when the machine is turned on. The machine, he said, will feature a completely secure BIOS solution that allows fully automatic upgrades without user intervention and fully protects against phishing and automated worm attacks.

"Many of these kids will have never seen a computer before; they won't have a clue about computer security. That means that a lot of mechanisms in computers today just won't work for them," Krstić said, stressing that everything on the laptop will be open by design and will not rely on passwords for authentication.

Four countries commit to buy 4 million OLPC laptops. Click here to read more.

"One of the main goals is to provide unobtrusive security," he added. "We're doing security in a way that doesn't depend on the user reading or responding to a prompt on the screen."

The key design goal, Krstić explained, is to avoid irreversible damage to the machines. The laptops will force applications to run in a "walled garden" that isolates files from certain sensitive locations like the kernel. Even if the computer is damaged, the security model calls for a trivial reinstall of the operating system to put the machine back into full functionality.

Despite the security fears, Krstić is optimistic OLPC has a few aces up its sleeve. "We don't have backward compatibility on our list of concerns. That's a huge advantage," he said. Without having to worry about existing applications, Krstić said OLPC can actually define the security policy for every piece of software built for the machine.

"We can tell people, 'If you're developing software, this is the policy,'" he said. "We don't have to worry about thousands of apps that will retroactively break. It gives us an enormous level of control."

Still, there are crucial security decisions that are still up in the air. For example, the group is still brainstorming about whether to include automatic updates by default. Krstić is leaning toward implementing automatic updates, but, ideally, if the security model holds up, he expects OLPC to have a level of isolation between the operating system, applications and user data that will reduce the need to issue lots and lots of updates.

"If we discover vulnerabilities, the security model must hold up enough that even a machine that is unpatched won't be easily exploitable. This gives us a bit of diversity to avoid the monoculture trap," he said.

Next Page: Automatic updates a "tricky" issue.

The issue of automatic updates, he said, remains "tricky" because of the difficulty in making strong assumptions about connectivity. The $100 laptops will feature built-in wireless mesh networking—allowing each laptop to connect to other laptops and work as a wireless mesh router when it is powered down—but the absence of strong connectivity to pull down updates could be awkward.

The $100 laptops should teach vendors a lesson. Click here to read Jim Rapoza's column.

"The focus of my work is to make sure that dependence on updates is as minimal as possible," Krstić added.

Dave Aitel, an open-source advocate and vulnerability researcher at Immunity, in Miami, said fears of an OLPC monoculture presenting a major security risk may be a bit overblown. "Who wants to [hack] these children anyway? These laptops are not Windows 95, and, in many ways, they're more advanced than [Microsoft's] Vista," Aitel said in an interview.

"It's a monoculture of hard targets," Aitel said, noting that the laptops will use a modern implementation of Linux hardened with ASLR (Address Space Layout Randomization) to handle code-scrambling diversity and Exec Shield, a security patch that flags data memory as nonexecutable and program memory as nonwritable.

Walter Bender, president of software and content at OLPC, said the foundation's long-term goal expressly encourages computing diversity and argued that the "monoculture" tab might be a bit strong.

"We're designing this machine as an open platform with the expectation that it's going to evolve," Bender said in an interview. "Even though we're launching a monoculture, experience has shown that these open platforms evolve and change. There's no reason to think this won't happen with these machines.

"We don't expect that a monoculture in the strict sense, where we're controlling everything, will last very long," he added.

Bender insists that the overall goal of OLPC is to encourage diversity. "In the short term, we're trying to launch something," he said. "We're a nonprofit, educational organization; we're not a laptop manufacturer. We're developing an ecosystem that people can expand and bring to kids. It's anything but a monoculture."

The OLPC foundation, which traces its roots to Massachusetts Institute of Technology, is sponsored by a roster of big-name companies, including Advanced Micro Devices, eBay, Google, News Corp., Nortel Networks and Red Hat.
http://www.eweek.com/article2/0,1895,2028779,00.asp





McAfee Fires President; CEO Retires After Options Probe

Antivirus and security software provider McAfee Inc. on Wednesday said it fired President Kevin Weiss, and announced that CEO and Chairman George Samenuk will retire after a stock options investigation found accounting problems that will require financial restatements.

The company said board member Dale Fuller will serve as interim CEO and president in the wake of the management shakeup. Fuller joined McAfee's board in January and has previously served as president and CEO of Borland Software Corp.

Its shares rose 97 cents, or almost 4 percent, to $26.76 in early trading on the New York Stock Exchange after the news.

McAfee said it determined it will need to restate certain financial results to record additional non-cash charges for stock-based compensation expense over a 10-year period. The charges are likely to range between $100 million and $150 million, the company said.

"I regret that some of the stock option problems identified by the special committee occurred on my watch," Samenuk said in a statement.

The company also named Charles J. Robel as non-executive chairman. Robel has been a board member since June.

McAfee said it has created a search subcommittee to find a permanent CEO and will look at both internal and external candidates.

Santa Clara-based McAfee disclosed in June that securities regulators had opened a formal investigation into the possible manipulation of the company's stock options

It is one of many companies to run into problems by backdating options to days when the company's stock price was lower, thus boosting executive payouts. At least 130 companies have disclosed SEC, Department of Justice or internal investigations into options practices, according to a review by The Associated Press.

Other top executives also have been ousted or left their positions as a result of the probes. Not long after McAfee announced its shakeup, San Francisco-based online publisher CNET Networks Inc. said Wednesday that co-founder and Chief Executive Officer Shelby Bonnie has resigned as chairman and CEO.

Mountain View, Calif.-based software maker Mercury Interactive Corp., one of the first companies to disclose problems with backdated options, last year dumped CEO Amnon Landan, as well as its chief financial officer and general counsel.

Perhaps the most famous executive caught up in the options scandal is Jacob "Kobi" Alexander, the fugitive former CEO of software company Comverse Technology Inc. He's in the southern African nation of Namibia, awaiting extradition to the United States to face charges of manipulating options.
http://sfgate.com/cgi-bin/article.cg...f055625D36.DTL





Thousands of Brits Fall Victim to Data Theft
Graeme Wearden

British law enforcement agents are trying to contact thousands of U.K. computer users who have fallen victim to a massive personal data heist.

The Metropolitan Police said on Tuesday that a computer seized in the U.S. had been found to contain personal information from around 2,300 PCs based in Britain. This included e-mail addresses, passwords, credit card numbers and details of online transactions.

According to the Metropolitan Police Computer Crime Unit, the data was stolen via a piece of malicious software that was secretly installed on the victims' machines.

"The information has been harvested from the computers by a type of malicious code known as a 'backdoor,'" a detective from the Computer Crime Unit said in a statement. "It is too early to establish at this early stage how the computers have been infected. However, there are thousands of computer users worldwide who have had their computers compromised and data stolen."

The Metropolitan Police would not say whether the information has been used to defraud victims. The 2,300 people whose data was found are being contacted by the police via e-mail. However, it appears that the warnings are often being ignored.

"We're appealing for anyone who's had an e-mail from the Met officers who work in the Computer Crime Unit to get in touch. There's a security measure that people have to go through when they ring, but people are ignoring the e-mails because they think they're a hoax," a Metropolitan Police representative said.

The Metropolitan Police also declined to reveal the circumstances behind the seizure of the U.S. computer, as the investigation is ongoing. They also declined to say which Internet service providers and banks are being alerted.

Graeme Wearden and Tom Espiner reported for ZDNet UK from London.
http://news.com.com/Thousands+of+Bri...3-6124342.html





As Farmers Reap More Almonds, Thieves Do, Too
Jesse McKinley

For Scott Phippen, a third-generation almond man, the hole in his fence was the first sign of trouble. And sure enough, a quick once-over confirmed the worst: two of Mr. Phippen’s trucks were missing.

But the thieves were not after vehicles. They were after almonds. And at Mr. Phippen’s farm here in the Central Valley, they had hit the mother lode: 88,000 pounds of the nuts, with a street value of some $260,000.

“You don’t just put that in your garage,” Mr. Phippen, 52, said with a smile. “You don’t move that at the local flea market.”

Mr. Phippen had become just another victim of what farmers and the authorities say is a rash of almond heists, with the latest reported last Sunday, when a truck containing more than 40,000 pounds was stolen from a shipping yard in Fresno.

No arrests have been made, but farmers say they think they are dealing with a sophisticated network of almond thieves — they call them “nut-nappers” — who combine old-fashioned cover-of-darkness robbery with computer skills, precision-planned escapes and advance buyers for their stolen goods.

Farm officials estimate the losses from all the robberies at $1.5 million, far and away the costliest current case of crop larceny in a state where avocado bandits, cattle rustlers and even hay-jackers are regularly on the loose.

“Dollar-wise, it’s a very significant theft,” said Cliff Emery, an agricultural crime specialist for the Action Project, a rural anticrime task force started by the Tulare County District Attorney’s Office in 1999. “For growers, it could be a very large portion of the overall profit margin for the year.”

Driving the crime wave is the surging popularity of almonds, which are high in vitamin E and antioxidants and have been linked by some medical studies to lower cholesterol levels and a reduced risk of heart disease.

Over the last decade, that reputation has helped push almonds into the Top 5 of California crops, with $2.2 billion worth grown in the 2004-5 season. This fall, farmers are expecting a harvest of more than one billion pounds, to be sold wholesale for about $3 a pound and shipped around the world.

“The Mideast likes big almonds, the Japanese like midsize,” Mr. Phippen said. “And the Europeans don’t care. They’ll eat anything.”

Almonds have become such a cash cow, in fact, that some California farmers have switched to them from other crops like apricots, cotton, olives, peaches and prunes, according to the California Farm Bureau. In California, which produces 80 percent of the world’s almonds, the acreage devoted to them has increased by 13 percent over the last five years, with some 580,000 acres planted this year.

Once planted, an almond tree can produce sellable fruit within three years, said Marsha Venable, the communications coordinator for the Almond Board of California, a marketing organization under the supervision of the federal Department of Agriculture.

Mr. Emery said that no one knew exactly what was happening with the almonds — which are packed in cratelike, metric-ton containers — but that they were certainly being resold in bulk, not just nibbled on. “Whether they are sold and the buyer knows or the buyer has no clue, we don’t know,” he said. “The chances are — and again, this is speculation — is that they’ve gone overseas, at which point it’s much easier to cloud the origin of the almonds.”

About 70 percent of the California crop is bound for foreign soil, according to the almond board. Between soil and sale is an elaborate process, involving growing, harvesting (using machines that shake the trees), gathering, dehulling, sorting, processing, packing and, finally, shipping.

The recent crimes, Mr. Emery said, have occurred after the nuts were processed, packed and sold, but not yet delivered.

All of which has made the spate of robberies even more vexing. In August, a group of law enforcement officials met with representatives from the almond industry and several insurance groups to discuss the problem and ways of safeguarding the crops, including not leaving packaged crops in trucks, installing motion detectors or hiring security guards.

But some in the business say that with farmers’ small profit margins, those are extravagances they cannot afford.

Agricultural crime is a problem statewide, according to the Action Project, which estimates losses at more than $100 million a year. Nearly $11 million in total losses was reported in eight counties in the Central Valley alone in 2005, a nearly 30 percent increase from 2004. Most of the thefts go unreported, however, and can involve anything left unattended on the farm: diesel out of fuel tanks, dairy calves from cattle pens and peaches off the tree.

The crime is tough to fight because of the immense acreage involved in California agriculture — the Central Valley, the state’s top farming region, is 400 miles long — and the relatively limited resources of many rural counties.

“You might have 14 cops in 10 city blocks, but you only have five deputies for a whole county,” Mr. Emery said. “If you’ve got a fuel tank in the middle of your property, five miles from anything, the bad guys can come and go pretty easily.”

Mr. Phippen said that he had his own theories about who broke into his facility here on July 1, and that it was not a typical smash-and-grab.

“They didn’t go snooping around trying to open up buildings,” he said. “They had to have at least two drivers on hand, plus someone to get them here. They cut the padlock and closed the gate behind them. They used our truck tractors to get them down the road and then switched to a bigger truck. This wasn’t a bunch of guys looking to steal tools and gas. They were pros.”

Mr. Phippen said his suspicions focused on someone who might have access to a computer tracking system anywhere on the shipping and delivery route. A simple search of a company’s container records, he said, could show a potential thief where containers are, and most important, what is inside.

Mr. Emery agrees that the thieves know a lot about shipping times and buyers. “Is it what you call an inside job kind of thing, where people in the industry are involved? That’s very possible,” Mr. Emery said.

Mr. Phippen found the two trucks stolen off his yard at a truck stop about two miles away; the thieves had apparently shifted the two containers of almonds to the type of bigger trucks that the law requires for freight hauled on major highways. Though he was insured for his almonds, he did have a $10,000 deductible.

As for getting his products back, however, he said that seemed unlikely.

“I would fall over in shock if we were to get those nuts back,” he said. “I would be throttled.”
http://www.nytimes.com/2006/10/08/us...rtner=homepage





Shape-Shifters With Microchips Walk the Runway
Cathy Horyn

The other day before the Hussein Chalayan show, I skipped over to the Monoprix, which is France’s answer to Kmart, to buy a box of hair color (now only you and my hairdresser know for sure) when I saw my friend Sarah, a British journalist, buying some underwear. Two babes in the Monoprix getting hooked up. Two hours later, we were watching Mr. Chalayan make dresses change shape with microchip technology.

I’m beginning to hate the word real. What’s real? We want things to exist in a safe world, in a safe house. We want leaders to lead; we want our children to call; we want to believe, at least some of us, that fashion houses can have clear, comprehensible identities. But I think that’s not what is happening.

Clothes are changing shape.

The French spring collections have the strength and holy terror of a riptide; they are pulling us away from a familiar shore. There have been powerful shows dealing with the future from Mr. Chalayan and Nicolas Ghesquiere of Balenciaga, and a dense, chaotic collection from Riccardo Tisci of Givenchy that suggested the provisional mentality of young people.

At the same time, merchants from Dallas to Tokyo want clothes that sell, and they, along with investors, are putting pressure on public fashion companies to perform like any other consumer brand, except with more sex appeal. For a versatile designer like Karl Lagerfeld, that’s no problem. His collection Friday for Chanel was sublimely effortless. And even if he didn’t work for a private company, he is too steeped in the convention of making wearable fashion to give his customers anything too extreme.

But other designers seem adrift, their methods of creative abstraction suddenly incompatible with the concrete demands of business. This change has happened so swiftly that you can scarcely process it, much less comment on it. Yet for that very reason the Paris shows have been exhilarating, by turns banal and visually compelling.

Mr. Chalayan’s collection was standout. As in the past, his idea was to make connections between past and present styles. There were lovely, soft dresses in geometric patterns with colors like moss and periwinkle, veiled in black. Some tops and dresses were attached to hats, which were a romantic blend of safari and Parisian couture.

The runway, though, was a crystal-pebbled moonscape, and for the finale, Mr. Chalayan created a series of dresses that changed shape when each model came to a halt. Mr. Chalayan said later that microchips were inserted in the corset or hat of each outfit and programmed to magically erase hems or lapels. The ribbon slats of one dress retracted like a Venetian blind and then dropped, transformed into mirrors. It took about seven seconds for a silk chemise to disappear into the rim of a picture hat, leaving the model naked. When the transformation was complete, a puff of steam rose from the crown of her hat.

“I’ve always been interested in the future,” Mr. Chalayan said. “But the challenge was to do something less predictable than Robocop that could be realized in fashion.” He made believers of his audience.

Since digital technology has given everyone a bird’s eye view of the cabine, or the model’s dressing area, Mr. Lagerfeld decided to make a game of it. He had a cabine built in the center of the Grand Palais with automated doors opening onto the runway. The effect was as charming as the clothes.

This season Mr. Lagerfeld went short and skimmy, with lightweight jackets over pale silk tops and spangled briefs (offered, I suppose, to suggest the shorter lengths). The collection was subtle, coherent and graphic, summed up by a trim black wool suit with stark white lapels and cuffs, and a wide multistrand chain belt. The bathing suits were also terrific — I mean, whoever notices the bathing suits? These were in creamy knits. Evening looks were mainly short, with panels or boleros of black sequins against matte-black georgette.

Maybe it was the Basque berets and smock-style dresses in Stefano Pilati’s show for Yves Saint Laurent, or the smell of earth from the violet-carpeted runway, but I kept of thinking of the movie version of “For Whom the Bell Tolls.” Beautiful Spanish people scrambling into the mountains.

Mr. Pilati seemed to be up to something else, though. The show was all mixed signals: terrific black gingham dresses, with jackets in red or purple twill, and then blossoming Turkish-style trousers and high-steppin’ fishnets. Mr. Pilati brings a lot of passion to Saint Laurent, as he should, and some of the sheer dresses were awfully pretty. But couldn’t things be simple, too? The models seemed tortured to have to keep their balance on a flower bed.

The strength of Riccardo Tisci is his exuberance and his collagelike approach to fashion; he sees wonderful, strange combinations, like spiraling rope and tiers of couture lace, and he goes for them. The weakness of Mr. Tisci is that he doesn’t know how to frame his creativity in a way that might do justice to it. He is all over the place. There were terrific sleeveless jackets with backs cut like a vest; paired with soft shorts and filmy tops, the look was briskly modern.

But then he does full-skirted black silk dresses with taut lace bodices and switches of glossy fringe. Or a total look, right down to the platform shoes in an African tribal print. It’s all interesting, but without some perspective the collection bleeds into a kind of diffuseness.

Driving from the Chalayan show to the Givenchy, I telephoned my son back in New York. I told him I had just seen a dress change shape on a runway.

“Really,” he said. “That’s incredible.”

He thought for a minute, then said: “I don’t know. Magic is really phony, and fashion is. ... ”

“Pretty borderline,” I said.

“Yeah. When are you coming home?”

“Soon,” said I.
http://www.nytimes.com/2006/10/07/fa...07FASHION.html





An Alternate Universe Where Beautiful People Have Repulsive Babies
Caryn James

WHEN word arrived that Brad Pitt and Angelina Jolie were expecting a child — news that set off an inescapable frenzy of anticipation for what would certainly be the most beautiful child ever — didn’t you have a sneaking thought that some recessive ugly genes could produce a baby who was “a little goofy looking,” as the artist known as 14 put it on her Web site? Sacrilege in the hype-driven world of movie-star news, that idea was the inspiration for great satire on 14’s Gallery of the Absurd, the best of many sites that skewer celebrity culture. She created an image of Brangelina and Child as the Holy Family, turning them into icons in the original Byzantine sense, complete with halos but with a child who looks a bit too much like Gollum from “Lord of the Rings.”

Smart celebrity satires are flourishing online — rarely anywhere else — and they do more than deflate the self-importance of stars. They also mock the gushing media that glorify them, and demonstrate that while taking tired potshots at stars is common (see any Britney-bashing episode of “Saturday Night Live” or “Mad TV”) satirizing TomKat or Brangelina so effectively that you expose the inane soul of celebrity culture itself is an art. In the form of artists’ blogs, fake news stories and tongue-in-cheek analyses of fame, together these sites function like an underground movement, subverting the cult of celebrity even as they feed off it.

In the last year or so that movement has gained in sophistication and has grown rapidly online, thriving there for some of the usual reasons: the Web is fast, cheap and plays to short attention spans, so it can afford inconsistent wit. More specifically, Web satire can be rude, with the freedom to address the most ludicrous rumors, the kind that make magazine editors and television producers (sometimes even the tabloid kind) skittish.

The fake articles on Postcards From the Pug Bus, which does for celebrity what “The Daily Show” does for politics, sound so authentic that Tom Cruise’s lawyer once demanded a retraction; his letter (reproduced on the site) insisted it was “false and defamatory” to say that Mr. Cruise “had a previous life, that he is old beyond reckoning, that he took his present form because ‘Bingodulla elected him to spread the gospel of Scientology.’ ”

Beneath such lunacy, these sites provide trenchant criticism of celebrity culture by turning the mainstream approach inside out. More than ever, stars have become the touchstones of everyday life, which accounts for the media obsession with their marriages and families. The reverent approach of People, Us Weekly and television infotainment like “Access Hollywood” and “Entertainment Tonight” depends on the illusion that the famous are Just Like Us (the title of a regular Us Weekly section, showing stars walking their dogs or eating ice cream cones).

Satirists recognize those starry images to be grotesque exaggerations of the ordinary. By making fun of the celebrities’ delusions, missteps and puffed-up attitudes (flying a Los Angeles obstetrician to Namibia?), they show how distant the famous are from everyday life.

The caricatures that 14 posts weekly on Gallery of the Absurd (galleryoftheabsurd.com) display the qualities that make celebrity satire work. Her inventive Tom Cruise valentine, which playfully attacks the star and his spin, exaggerates his love-besotted public displays, depicting him as a grinning little guy wearing silly platform shoes, surrounded by cute valentine hearts. And it exposes the distance between that calculated image and what so much of the public thinks by adding Devil’s horns and picking up on the widespread rumor of a TomKat legal agreement.

“BE MINE. ALL MINE!!!” the valentine reads, “But first you must sign this contract” (with a pen that has an alien’s head) and “become a Scientologist.” As the sardonic text accompanying the caricature reads, “Nothing says love like signing a $5 million contract agreement to pose as a loving companion to a tiny man with a very large ego.”

An artist in her late 30’s who uses her real name, Erin Norlin, in her day job as an illustrator, 14 started the site in May 2005. It now gets 17,000 to 20,000 hits a day, she says; a line of Gallery of the Absurd greeting cards, including the Cruise valentine, can be e-mailed from hipstercards.com. “When I look at Star magazine or at Us, it’s like looking at a comic book,” she said in a phone interview. “I’m interested in the characters that gossip turns these celebrities into.”

That attitude — rejecting even the illusion that these celebrity-figures are any more real than holograms — goes to the heart of why celebrity satire is trickier to pull off than political satire, which seems to be everywhere. Pug Bus (pugbus.net) began as a political satire blog after the 2004 election, said its founder, Phil Maggitti. A retired freelance writer and editor, at 63 he is as far from the typical Web demographic as you can get.

He stumbled into the celebrity niche after writing a fake news article about Brad Pitt. “I discovered that bashing the president didn’t get you as many hits,” he said. Although the site still has political satire, its traffic (5,500 visitors a day in September) is “almost entirely driven by celebrity,” he added.

Since it began, the site has expanded to include other writers, but its staff also includes several of Mr. Maggitti’s alter egos, like Biff Scuzzy and Chip Hilton (no relation to Paris). The mock-news articles begin close to reality, sometimes with facts themselves, then veer into territory so outlandish yet logical that the satire is both silly and scarily plausible.

“Anna Nicole Smith Selling Dead Son’s Personal Effects, Ashes,” reads the headline on a story that landed soon after Ms. Smith sold those hospital-bed photos of herself, her soon-to-be-dead 20-year-old son and her newborn baby to In Touch magazine and television. The story included an all-too-realistic fake quotation from an actual person, Howard K. Stern, Ms. Smith’s lawyer, who later announced on “Larry King Live” that he is the infant’s father. The fictional Stern asks the public “to respect Anna’s privacy at this difficult moment” as she decides on “a fair pricing structure for her son’s personal effects and remains.”

What the piece ultimately attacks is Ms. Smith’s icky complicity in her own media spectacle, a sophisticated criticism that sets Pug Bus apart from the plethora of sophomoric humor sites like Cracked (cracked.com) and College Humor (collegehumor.com).

Pug Bus and Gallery of the Absurd are also more consistently funny than the Onion (theonion.com), which, like many sites, is better at satirizing politics than celebrity. Addressing life-or-death stakes, political satire is often driven by anger and partisanship. Celebrity culture is more elusive. Its genuine appeal is that it offers the escapism of a demented fairy tale, playing to the public’s envy of wealth, beauty and fame, as well as to its schadenfreude about sham marriages, drug problems and other common blights of celebrity life.

Satire is even more difficult because celebrity news often arrives in the form of ready-made jokes. A celebrity news and gossip site like TMZ (tmz.com) can be funnier than any attempt at comic spin. “B-List Baby Pics — Who’s Cashing In?” read a droll headline on a story speculating about the amount that lesser celebrities like Sharon Stone and Heidi Klum might get paid if they chose to sell photos of their infants. The idea that there are B-list babies has the mad, slightly cruel plausibility of satire.

Celebrity culture’s built-in absurdity also explains why so many satiric Web sites are only intermittently clever. Among the wittier sites, Fametracker (fametracker.com) is an odd mix that at times wryly worships stars in a section called “Hey! It’s That Guy!” featuring minor actors whose faces are more familiar than their names. But at its irreverent best the site charts the stars’ fortunes in its Galaxy of Fame, where Harrison Ford is the sun, and the shifting cast of planets veers closer to or farther from his light.

Recently Adrien Brody became “Saturn — A Healthy Stroll” away from the center, as he wondered why every word written about his new film, “Hollywoodland,” had to mention Ben Affleck’s comeback. “What about my career?” the fake Brody asked. “I’ve done a lot to run it into the ground.” But weeks and months have elapsed between Galaxy updates; whole careers come and go faster.

The gentle tone of lesser sites also characterizes the television series devoted to celebrity satire, like “The Showbiz Show With David Spade,” just renewed for a third season on Comedy Central. Mr. Spade’s snarky persona is too grating and his humor too tired to endure for a half hour, even with features and interviews added to his signature fake celeb newscasts. In one typically lame joke he announced that Brangelina and family were coming home from Namibia, then whispered to the camera, “Let’s all pretend we didn’t even know they were gone.”

“Best Week Ever,” a weekly show on VH-1, may be even less creative, with comics making mocking comments after showing clips or photos of celebrity idiocy. That’s the definition of redundancy. The Best Week Ever Web site (bestweekever.tv) is just as obvious, although by trolling there you can find the occasional gem, like a video (originally from the television show) in which the real New York 1 reporter Pat Kiernan announces the breaking news that the police are searching for Matthew McConaughey’s missing shirt and displays a police artist’s rendering of the T-shirt; it’s the cleverest of many Web attempts to make fun of his constant display of abs.

Celebrity satire should work on television; when the creators of “South Park” go after Hollywood, they do it as fast and as brilliantly as anyone. There just hasn’t been the right alchemy — the mix of writers, sensibility and a star like Jon Stewart or Stephen Colbert — to make a brilliant celebrity satire series.

And there’s another major factor working against television satire: big money. The more expensive a form, the less it can afford to defy the mainstream. A glance at the Web reveals how easily an irreverent site can be co-opted. One of the funniest on-line celebrity satires is a video spoof on iFilm (ifilm.com) called “Mel Gibson’s Signs of Anti-Semitism.”

The video uses scenes of Mr. Gibson in M. Night Shyamalan’s movie “Signs,” but here the Gibson character finds Jews everywhere rather than extraterrestrials. He is horrified when he spots a Star of David in his field instead of alien crop circles. When he discovers an alien locked in a closet, what emerges is not a scary hand as in the film, but the sound of Adam Sandler singing his “Hanukkah Song.” Good luck finding anything else as clever on iFilm or YouTube (youtube.com), sites now loaded with movie trailers, clips from television shows and other big-business gambits.

There is no better reason that the little satiric Web sites have a value way out of proportion to their relatively tiny audiences. They prove that while celebrity culture is everywhere, it is not monolithic. Smart people pay attention too, if only to make the best jokes.
http://www.nytimes.com/2006/10/08/movies/08james.html





Jack Black Revisits the Glory Days Known as Tenacious D
Ross Johnson

JACK BLACK’S past is about to catch up with him in a big way. Mr. Black, the movie star known for films like “School of Rock,” “King Kong” and “Nacho Libre,” will meet Mr. Black, the would-be rock star and satirist of the duo Tenacious D. The convergence is set to occur in a film, “Tenacious D in ‘The Pick of Destiny,’ ” scheduled for release by New Line Cinema on Nov. 17. It will test Mr. Black’s ability to bridge past and present, while highlighting once again the risks, and potential rewards, of that Hollywood perennial, the passion project.

Occasionally a work of passion yields magnificent results. George Clooney’s devotion to “Good Night, and Good Luck” helped lead to a half-dozen Academy Award nominations, including two for Mr. Clooney as the film’s director and co-writer; Mel Gibson financed “The Passion of the Christ” and saw it draw more than $600 million worldwide. But many go awry, including John Travolta’s much-derided “Battlefield Earth” or Steve McQueen’s largely forgotten Ibsen turn in “An Enemy of the People.”

With the Tenacious D’ film, New Line is betting that Mr. Black’s celebrity and the cult following for his rock act will pay off for a relatively modest investment of less than $20 million in the film, and roughly twice that in marketing costs. For Mr. Black the risk lies in the difficulty of reviving the freshness of his pre-famous past now that he is, indeed, quite famous.

Mr. Black, 37, formed the musical comedy duo Tenacious D with Kyle Gass, 45, in 1994. Taking its name from the sportscaster Marv Albert’s description of strong defensive positioning on a basketball court — “They’re playing some tenacious dee” — the act quickly became a hit on the Los Angeles club circuit, portraying two hapless musicians trying to become the greatest band on earth, all the while creating sui generis music lampooning mystic metal groups like Black Sabbath and Iron Maiden.

The D, as Mr. Black and Mr. Gass refer to their act, wrote songs that were incredibly raunchy, and backed them up with credible performances. Mr. Gass, an accomplished guitar player, played the straight man perfectly to the manic Mr. Black, who would belt out rock lyrics with a precise, and wider, vocal range than many of the singers he was lampooning. By 2001 the duo had a series on HBO and a rabid following on college radio; an album they released would eventually sell two million copies.

“I knew we were funny after our first gig,” said Mr. Black in a recent telephone interview. “We got spoiled by glory pretty fast.”

As Mr. Black’s acting career took off after his starring role in “Shallow Hal” in 2001, he and Mr. Gass, who is now touring with a faux-rock band Trainwreck, stepped away from Tenacious D, except for occasional benefit performances.

The new movie — which is scheduled to open the same weekend as “Casino Royale,” the MGM-Columbia Pictures film introducing Daniel Craig as James Bond — portrays Mr. Black and Mr. Glass as two still-unspoiled musicians trying to win a nightclub talent contest and spending a whole lot of quality time together in a tiny apartment in Venice Beach.

New Line is counting on at least some of the fans who have flocked to Mr. Black’s recent hits, though films like “School of Rock” and “Nacho Libre” had the advantage of a PG-13 rating; for “Tenacious D,” which preserves the duo’s raunch, an R is expected. Among other things, the movie depicts the band members’ reliance on marijuana for creative inspiration and includes the kind of swearing found around the third or fourth drained keg at a frat party.

“The one thing you cannot do is alienate the core audience for a film,” Toby Emmerich, New Line’s production president, said, noting that “Tenacious D” had nothing in common with “School of Rock” except that both films “have guitars in them.” He added: “We’d love for it to do ‘School of Rock’ numbers, but ‘Tenacious’ doesn’t have to, because this film only cost $19 million to make.”

A key to getting the film made was Mr. Black’s agreement to reduce his current acting fee of about $12 million a film to a $1 million upfront fee, which was equally split with Mr. Gass. Should the film do well enough to cover its production and marketing costs, the two men will share 10 percent of the gross revenues the distributor earns. Mr. Black bristled when asked about the financial arrangements. “Who cares how much money I make?” he said. “What’s important is we got a movie about the D made, and we got to make it the way we wanted.”

Such fee cuts are essential to the calculus of a passion project. In exchange for Mr. Black’s discounted rate, he was given total creative control. Mr. Black produced and co-wrote the film with Mr. Gass and its director, Liam Lynch, their longtime video collaborator.

The project had been in development at the British production company Working Title but was put into turnaround before New Line acquired it. Mr. Lynch said that a breakthrough came when he told the frustrated Mr. Black to stop listening to earlier writers who had been hired when the project was at Working Title.

“Nobody knew what the D fans liked better than Jack did,” Mr. Lynch said.

Mr. Lynch, the director of last year’s comedy concert film, “Sarah Silverman: Jesus Is Magic,” and a creator of “The Sifl & Olly Show,” a sock-puppet series on MTV, said choices in “Tenacious D” that might look risky to an outsider were made for the sake of authenticity. When it was noted, for instance, that there were hardly any women in the film, much less a love interest, Mr. Lynch said, “The love story is between Kyle and Jack and their music.”

Referring to the many scenes of Mr. Black and Mr. Gass sitting in a small apartment fretting about their lack of a music career, Mr. Lynch said it was something to which many artists could relate. “Why would they leave their apartment?” he said, laughing. “They’ve got nowhere else to go.”

Mr. Black said he was aware that Tenacious D, previously a cult band, was facing drastically increased expectations with the release of a studio movie. But he said he was confident that the fan base, which will be treated to a soundtrack album to be released on Nov. 14 and a performance tour that begins on Nov. 18, will stay loyal.

“I figure we got one good sequel and one bad sequel to this movie left in us,” Mr. Black said. “The key is to keep stomping on this grapefruit until it stops producing grapefruitade.”
http://www.nytimes.com/2006/10/08/movies/08john.html





Dolan Family Offers $19 Billion in Bid to Take Cablevision Private
Andrew Ross Sorkin

One of New York’s most powerful families, the Dolans, made a $19.2 billion leveraged bid yesterday to buy out the public shareholders of its cable television empire, Cablevision Systems, which also includes Madison Square Garden, Radio City Music Hall, the New York Knicks and the New York Rangers.

The offer comes a year and a half after the Dolan family, a sometimes fractious dynasty whose feuds have often spilled into public view and who have used their cable systems to fuel their political interests, proposed breaking the company in two. The family wanted to take over the lucrative cable systems but was forced to withdraw the plan when it met resistance from an independent committee of the company’s directors.

The Dolans’ latest bid — worth almost 15 percent more than the previous offer — comes amid a sweeping trend among some of the nation’s biggest family-controlled companies to take themselves private. In July, HCA, the hospital company, agreed to be sold for $33 billion to a group led by the family of Bill Frist, the Senate majority leader. And in August, Kinder Morgan, the gas pipeline company, agreed to be sold for $15 billion to a group led by Richard D. Kinder, the company’s founder.

The move to become private is being driven by Wall Street’s willingness to finance billions of dollars in debt that are needed to back these huge leveraged buyouts. The trend is also a reaction, in part, by management and boards to increasing scrutiny from investors to meet quarterly expectations and to pass frequent regulatory examinations.

Last month, for example, Cablevision suffered the embarrassment of having to acknowledge that it had granted stock options to a vice chairman after he had died while making it appear as if they were granted when he was still alive.

In a letter to Cablevision’s board proposing the family’s takeover bid, Charles F. Dolan, the company’s 79-year-old founder, and his son, James L. Dolan, the chief executive of Cablevision, wrote: “We continue to feel that succeeding in this fiercely competitive environment requires a long-term, entrepreneurial management perspective that is not constrained by the public markets’ constant focus on short-term results.”

They added, “We are convinced that private ownership is highly desirable, and we are willing to assume the risks of full ownership.”

Just last year, the Dolans were feuding with one another in the boardroom, with James Dolan voting against his father over the fate of a satellite business that was ultimately sold. Now it appears that the Dolans are in agreement over the future of the company.

Since the Dolans already control the properties involved, the proposed transaction probably would not be felt in any immediate way by Cablevision subscribers or by fans of the Knicks and the Rangers. Nor would it be likely to make much difference to the fate of Madison Square Garden, which developers want to tear down and rebuild one block west, on Ninth Avenue; the Dolans have supported that plan. If anything, cable subscribers or ticket-buyers could possibly be asked to pay higher prices to offset the copious amount of money that the Dolan family plans to raise for the transaction.

Despite the increasing trend in management-led buyouts, some investors have become skeptical of them, questioning whether management is representing themselves or shareholders. Indeed, virtually every recent management-led buyout this year has drawn a series of shareholder lawsuits, with the plaintiffs wondering why executives felt they could not adequately wring out costs and create efficiencies until they were no longer doing so on behalf of shareholders. If the Dolans are successful, their actions will no doubt be subject to similar scrutiny.

At Cablevision, based in Bethpage, N.Y., a special committee of independent directors is expected to be formed to review the bid. And if last year’s showdown between the family and the directors over its prior takeover proposal is any indication, the independent directors will probably press the family to raise its bid.

The current bid differs substantially from its proposal last year, which sought to buy out the shareholders in the cable systems and put all of its other entertainment assets — Madison Square Garden, Radio City Music Hall, the Knicks, the Rangers and several cable channels — into a separate public company. People close to Cablevision’s board said that the board had been uncomfortable with the valuations and complexities of the two proposed entities and had sought a higher offer before the family withdrew the plan.

Since the Dolans withdrew their offer, shares of Cablevision have rallied, as have the stocks of competitors. Cablevision’s board also paid a $10 a share dividend to shareholders.

Under the new offer, the Dolans would pay $27 a share, which represents about a 17 percent premium over the average trading price for the past 10 days and a 11.3 percent premium on the 52-week high closing price of the stock. Of the $19.2 billion purchase price, the Dolans would pay $7.9 billion in cash and assume the rest as debt.

The previous offer was $21 a share for the Cablevision cable systems company and $12.50 a share for a stake in Rainbow Media Holdings, its cable networks company that includes American Movie Classics, Independent Film Channel and Women’s Entertainment, for a total bid of $33.50 a share. Today’s bid of $27 has an implied value of $37 after factoring in the $10 premium.

It is possible that the Dolans’ proposal could put Cablevision in play. The company has long been viewed as a takeover target for Time Warner because of the natural fit with that company’s cable business in and around New York. At the time of the Dolans’ last offer for Cablevision, James S. Chanos, whose fund, Kynikos Associates, bets on companies’ stocks declining, said, “It was never a serious offer; it was an attempt to flush out another buyer.”

Still, the Dolans own 22.5 percent of Cablevision and have 74 percent voting power, so they would have to consent to any takeover. And they made it very clear yesterday that they were not putting the company up for sale.
http://www.nytimes.com/2006/10/09/bu...rtner=homepage





I.B.M. Division Moves to China

I.B.M. has moved its global procurement headquarters to southern China from the suburbs of New York City to “capitalize on emerging market opportunities.”

I.B.M., based in Armonk, N.Y., spends 30 percent of its $40 billion annual procurement in Asia, the company said in a statement yesterday, confirming the move to Shenzhen that was first announced to suppliers in May. This is the first time that I.B.M., the world’s biggest computer services company, has moved the headquarters of one of its largest divisions to China.

Companies like I.B.M. and Microsoft are expanding in China to take advantage of lower costs and to gain market share in the world’s most populous nation.

The chief procurement officer for I.B.M., John Paterson, relocated from Somers, N.Y., and started work in Shenzhen yesterday, said Amanda Garland, an I.B.M. spokeswoman.

Demand for software and services across Asia is growing, and the company wants to develop new markets and suppliers to meet the demand, I.B.M. said.
http://www.nytimes.com/2006/10/13/te...gy/13blue.html





China Drafts Law to Boost Unions and End Labor Abuse
David Barboza

China is planning to adopt a new law that seeks to crack down on sweatshops and protect workers’ rights by giving labor unions real power for the first time since it introduced market forces in the 1980’s.

The move, which underscores the government’s growing concern about the widening income gap and threats of social unrest, is setting off a battle with American and other foreign corporations that have lobbied against it by hinting that they may build fewer factories here.

The proposed rules are being considered after the Chinese Communist Party endorsed a new doctrine that will put greater emphasis on tackling the severe side effects of the country’s remarkable growth.

Whether the foreign corporations will follow through on their warnings is unclear because of the many advantages of being in China — even with restrictions and higher costs that may stem from the new law. It could go into effect as early as next May.

It would apply to all companies in China, but its emphasis is on foreign-owned companies and the suppliers to those companies.

The conflict with the foreign corporations is significant partly because it comes at a time when labor, energy and land costs are rising in this country, all indications that doing business in China is likely to get much more expensive in the coming years.

But it is not clear how effectively such a new labor law would be carried out through this vast land because local officials have tended to ignore directives from the central government or seek ways around them.

China’s economy has become one of the most robust in the world since the emphasis on free markets in the 80’s encouraged millions of young workers to labor for low wages at companies that made cheap exports. As a result, foreign investment has poured into China.

Some of the world’s big companies have expressed concern that the new rules would revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany.

The Chinese government proposal, for example, would make it more difficult to lay off workers, a condition that some companies contend would be so onerous that they might slow their investments in China.

“This is really two steps backward after three steps forward,” said Kenneth Tung, Asia-Pacific director of legal affairs at the Goodyear Tire and Rubber Company in Hong Kong and a legal adviser to the American Chamber of Commerce here.

The proposed law is being debated after Wal-Mart Stores, the world’s biggest retailer, was forced to accept unions in its Chinese outlets.

State-controlled unions here have not wielded much power in the past, but after years of reports of worker abuse, the government seems determined to give its union new powers to negotiate worker contracts, safety protection and workplace ground rules.

Hoping to head off some of the rules, representatives of some American companies are waging an intense lobbying campaign to persuade the Chinese government to revise or abandon the proposed law.

The skirmish has pitted the American Chamber of Commerce — which represents corporations including Dell, Ford, General Electric, Microsoft and Nike — against labor activists and the All-China Federation of Trade Unions, the Communist Party’s official union organization.

The workers’ advocates say that the proposed labor rules — and more important, enforcement powers — are long overdue, and they accuse the American businesses of favoring a system that has led to widespread labor abuse.

On Friday, Global Labor Strategies, a group that supports labor rights policies, is expected to release a report in New York and Boston denouncing American corporations for opposing legislation that would give Chinese workers stronger rights.

“You have big corporations opposing basically modest reforms,” said Tim Costello, an official of the group and a longtime labor union advocate. “This flies in the face of the idea that globalization and corporations will raise standards around the world.”
China’s Labor Ministry declined to comment Thursday, saying the law is still in the drafting stages. Several American corporations also declined to comment on the case, saying it was a delicate matter and referring calls to the American Chamber of Commerce.

But Andreas Lauffs, a Hong Kong-based lawyer who runs the China employment-law practice at the international law firm of Baker & McKenzie, said some American companies considered the proposed rules too costly and restrictive.

Mr. Lauffs said the new rules would give unions collective-bargaining power and control over certain factory rules, and they would also make it difficult to fire employees for poor performance.

“You could hire a sales manager, give him a quota and he doesn’t sell anything, and you couldn’t get rid of him,” Mr. Lauffs said. “It’s not easy to get rid of someone now, but under these rules it would be impossible.”

It is not clear what the final law will look like, and only an updated draft is expected soon. But specialists say the trend suggests that there may be new challenges ahead for foreign companies doing business in this country.

Under China’s “iron rice bowl” system of the 1950’s and 60’s, all workers were protected by the government or by state-owned companies, which often supplied housing and local health coverage.

But by the 1980’s, when the old Maoist model had given way to economic restructuring and the beginning of an emphasis on market forces, China began eliminating many of those protections — giving rise to mass layoffs, unemployment, huge gaps in income and pervasive labor abuse.

The worst off have been migrant workers, most of them exiles from the poorest provinces who travel far from home to live in cramped company dormitories while working long hours under poor conditions.

Migrant workers in virtually every city complain about abuses like having their pay withheld or being forced to work without a contract.

“I don’t know about the labor law,” said Zhang Yin, an 18-year-old migrant who washes dishes in Shanghai. “During the three months I’ve been here, my boss has delayed the salary payment twice. I want to quit.”

Having grown increasingly concerned about the nation’s widening income gap and fearing social unrest, officials in Beijing now seem determined to improve worker protection. In recent years, more and more factory workers have gone to court or taken to the streets to protest poor working conditions and overdue pay.

“The government is concerned because social turmoil can happen at any moment,” says Liu Cheng, a professor of law at Shanghai Normal University and an adviser to the authorities on drafting the proposed law. “The government stresses social stability, so it needs to solve existing problems in the society.”

In a surprisingly democratic move, China asked for public comment on the draft law last spring and received more than 190,000 responses, mostly from labor activists. The American Chamber of Commerce sent in a lengthy response with objections to the proposals. The European Chamber of Commerce also responded.

The law would impose heavy fines on companies that do not comply. And the state-controlled union — the only legal union in China — would gain greater power through new collective-bargaining rights or pursuing worker grievances and establishing work rules. One provision in the proposed law reads, “Labor unions or employee representatives have the right, following bargaining conducted on an equal basis, to execute with employers collective contracts on such matters as labor compensation, working hours, rest, leave, work safety and hygiene, insurance, benefits, etc.”

If approved and strictly enforced, specialists say the new laws would strikingly alter the country’s vast labor market and significantly push up the wages of everyday workers.

“If you really abide by the Chinese labor laws,” said Anita Chan, an expert on labor issues in this country and a visiting fellow at the Australian National University, “migrant-worker wages would go up by 50 percent or more.”

Until now, though, existing Chinese labor laws have gone largely unenforced, which has further complicated the debate here. Opponents of the proposed law argue that enforcing existing labor laws would be enough to solve the country’s nagging problems. Advocates respond that adopting new laws would set the stage for stricter enforcement.

Even lawyers working for multinational corporations seem to agree that there is an epidemic of cheating.

Mr. Liu, the Shanghai lawyer who advised the government on the draft proposal, says many companies avoid existing laws by using employment agencies to hire workers. He says the new law will do more to protect workers from such abuse by holding companies accountable.

“The principle is not to raise the labor standard dramatically,” he said, “but to raise the cost of violating the law. The current labor law is a paper tiger and is a disadvantage to those who obey it. If you don’t obey the law, you won’t be punished.”
http://www.nytimes.com/2006/10/13/bu...47e&ei=5087%0A