Peer-To-Peer News - The Week In Review - November 26th, '11

[JackSpratts]

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"Citizens increasingly hear the word copyright and hate what is behind it. Sadly, many see the current system as a tool to punish and withhold, not a tool to recognize and reward." – Neelie Kroes



































November 26th, 2011




Publisher Drops Copyright Claim, Favors Fair Use
John P. Mello Jr.

If you've ever copied an excerpt from an online publication and pasted it in a public place on the Internet, you're a bit safer today from being sued for copyright infringement thanks to the Democratic Underground.

The liberal and progressive website won a victory yesterday for "Fair Use" of copyrighted material on the Internet when a media company in Las Vegas withdrew its opposition to dismissal of a lawsuit against the organization for copyright infringement.

"I knew the lawsuit was wrong from the start, and any self-respecting news publisher should have, too," Democratic Underground founder David Allen said in a statement. "I'm glad that they have finally admitted it."

In the case involving Stephens Media, publisher of the Las Vegas Review Journal, Democratic Underground asked a federal district court in Nevada to dismiss a lawsuit against the website claiming it had infringed on copyrighted material from the newspaper. The alleged infringement involved the posting to a forum at the progressive website of a five sentence excerpt from an article that appeared in the newspaper.

In its defense, Democratic Underground denied it had willfully supported copyright infringement by allowing the excerpt to be posted in the forum and that the "Fair Use" doctrine protects the organization from any claims of infringement. While initially disputing those claims by Democratic Underground, Stephens changed its mind and pleaded no mas in the case yesterday.

"Stephens Media does not contest the substantive arguments presented by [Democratic Underground] on the issues of volitional act and fair use as applied to the material facts of this case," the media company said in papers filed with the court.

Democratic Underground was originally dragged into its faceoff with Stephens when a firm, Righthaven, purporting to enforce the media company's copyrights sued the progressive website for infringement.

Righthaven has filed hundreds of similar actions and, in most of them, the defendants chose to settle their cases and get on with their businesses rather than get sucked into time- and money-consuming litigation. That wasn't the case with Democratic Underground, however. The organization, backed by the Electronic Frontier Foundation (EFF), the law firm of Fenwick & West, and attorney Chad Bowers, counter-sued and in the process pulled Stephens into the affair.

After ruling that Righthaven had no right to enforce copyrights that it didn't own, its lawsuit was tossed by the federal court, which slammed Righthaven and Stephens in the process. "Righthaven and Stephens Media have attempted to create a cottage industry of filing copyright claims, making large claims for damages and then settling claims for pennies on the dollar," the court declared.

While pleased with the outcome in the case, the EFF was still miffed by Stephens' overall actions. "Stephens Media never should have authorized Righthaven to file this suit in the first place, and should never have wasted our client's and the court's time with its attempts to keep Righthaven's frivolous claim alive for the last year," Senior Staff Attorney Kurt Opsahl says in a statement.

The Democratic Underground's triumph yesterday should send a chilling message to copyright trolls who use the legal system to make easy money on the net.

"This is a hard fought and important victory for free speech rights on the Internet," Fenwick & West partner Laurence Pulgram says in a statement. "Unless we respond to such efforts to intimidate, we'll end up with an Internet that is far less fertile for the cultivation and discussion of the important issues that affect us all."
https://www.pcworld.com/article/2443..._fair_use.html





Copyright Isn't Working, Says European Commission
David Meyer

People have come to see copyright as a tool of punishment, Europe's technology chief has said in her strongest-yet attack on the current copyright system.

Digital agenda commissioner Neelie Kroes said on Saturday that the creative industries had to embrace rather than resist new technological ways of distributing artistic works. She added that the existing copyright system was not rewarding the vast majority of artists.

"Is the current copyright system the right and only tool to achieve our objectives? Not really," Kroes said in a speech to the Forum D'Avignon thinktank. "Citizens increasingly hear the word copyright and hate what is behind it."

"Sadly, many see the current system as a tool to punish and withhold, not a tool to recognise and reward," Kroes added.

The commissioner said online distribution and cloud computing offered a "totally new way of purchasing, delivering and consuming cultural works", and suggested that the existing legal framework around copyright was not flexible enough to take advantage of this evolution.

Rights-holders have long complained about the damage done to their industry by online copyright infringement. Governments and courts in countries including the UK have responded by blocking access to websites that help people unlawfully share music, videos, games and software.

Some countries, such as New Zealand and France, also threaten repeat infringers with suspension or disconnection of their broadband services.

Kroes's speech was not the first time the creative industries have been taken to task for not sufficiently adapting to the digital age. The commissioner herself has said she intends to overcome the content industry's failure to agree pan-EU licensing deals, and the fact that countries such as the UK tax e-books more highly than they do physical books.

According to Kroes, in one large EU country 97.5 percent of artists earn less than €1,000 (£856) a month from the copyright system. "This is a devastatingly hard way to earn a living," she said.

The commissioner did not provide any definitive answers as to what should replace the current copyright system, apart from saying it those advocating new business models should get a fairer hearing than they do at present.

"In times of change, we need creativity, out-of-the-box thinking: creative art to overcome this difficult period and creative business models to monetise the art," Kroes said. "New ideas which could benefit artists are killed before they can show their merit, dead on arrival. This needs to change."
http://www.zdnet.co.uk/blogs/communi...sion-10024835/





Copyright is Failing, Who Feeds the Artists? Asks EU Commissioner
Ernesto

European Commissioner for Digital Agenda Neelie Kroes delivered an inspiring speech at the Forum d’Avignon this weekend. The Commissioner noted that the current path of increased enforcement as put forward by the copyright monopoly is not the right one. Copyright should protect artists instead of corporations, and technology is not something to restrict but to make use of, she argued.

European Commissioner for Digital Agenda Neelie Kroes has once again spoken out against the so-called copyright monopolies.

Last year at the Forum d’Avignon she noted that if media companies want to tackle piracy, they should look beyond “corporatist self-interest.”

During this year’s speech titled Who Feeds the Artists, Kroes went even further by admitting that the current path copyright is taking is the wrong one.

Kroes started by saying that it is essential that creativity is recognized and stimulated in Europe. She agreed that artists have to be rewarded financially for their efforts, but doubts whether the current copyright system is the right tool for that.

“Let’s ask ourselves, is the current copyright system the right and only tool to achieve our objectives? Not really, I’m afraid. We need to keep on fighting against piracy, but legal enforceability is becoming increasingly difficult; the millions of dollars invested trying to enforce copyright have not stemmed piracy,” Kroes said.

“Meanwhile citizens increasingly hear the word copyright and hate what is behind it. Sadly, many see the current system as a tool to punish and withhold, not a tool to recognize and reward.

“Speaking of economic reward: if that is the aim of our current copyright system, we’re failing here too.”

Kroes explained that most artists in Europe can’t make a decent living from what they do, and gave the example that 97.5 percent of German musicians earn less than 1000 euros a month. Implicitly, she hereby argues that the restrictive copyright system we have now is benefiting multi-million euro companies, but not necessarily the artists at large as recent examples illustrate.

The commissioner wants that to change.

“We need to go back to basics and put the artist at the centre, not only of copyright law, but of our whole policy on culture and growth. In times of change, we need creativity, out-of-the-box thinking: creative art to overcome this difficult period and creative business models to monetise the art,” she said.

“And for this we need flexibility in the system, not the straitjacket of a single model. The platforms, channels and business models by which content is produced, distributed and used can be as varied and innovative as the content itself.”

Being the Digital Chief of Europe, Kroes sees an important role for the technology sector in helping out artists to get the most out of their careers.

“ICT can help here. In all sorts of sectors, ICT can help artists connect with their audience, directly and cheaply. And it can help audiences find and enjoy material that suits their specific needs, interests and tastes,” she said.

“Look at Cloud computing: it presents a totally new way of purchasing, delivering and consuming cultural works – music, books, films – which will certainly raise new questions about how licensing should function in an optimal way.”

Aside from using technology to benefit, instead of repress, Kroes says the industry has to reconsider whether their old business models are still in tune with the present days and age. Licensing issues in the music industry and delaying the distribution of movies and TV-shows through windowing are two examples she highlights in this regard.

“A system of rewarding art, in all its dimensions, must be flexible and adaptable enough to cope with these new environments. Or else we will kill innovation and damage artists’ interests,” Kroes noted.

As a take-home message, Kroes says that the key issue is to provide all the tools to make sure that artists can flourish. In other words, do what is necessary to ensure that artists make a decent income, instead of protecting the revenues of major companies.

“So that’s my answer: it’s not all about copyright. It is certainly important, but we need to stop obsessing about that. The life of an artist is tough: the crisis has made it tougher. Let’s get back to basics, and deliver a system of recognition and reward that puts artists and creators at its heart.”
https://torrentfreak.com/copyright-i...sioner-111121/





Righthaven Still Kicking, Files Appeals Briefs
Steve Green

Even as creditors try to seize its assets for nonpayment of debts, Righthaven LLC showed Tuesday it was alive and kicking.

The Las-Vegas based company made its presence known by filing its first briefs in two rulings it has appealed to the 9th U.S. Circuit Court of Appeals in San Francisco.

Righthaven is the copyright lawsuit partner of the Las Vegas Review-Journal and formerly of the Denver Post.

Since March 2010, it has filed 275 no-warning lawsuits against parties it claims infringed on material from those newspapers by posting their content online without prior approval.

The litigation campaign stumbled when three lawsuits were dismissed on fair use grounds and six judges ruled Righthaven lacked standing to sue.

On the standing issue, five judges in Nevada and one in Colorado ruled that despite Righthaven’s claims of ownership, it lacked standing because the newspapers maintained control of the material Righthaven was suing over.

Righthaven hasn’t filed any new suits since July 13. It's hoping one or two of the Nevada judges who have not yet ruled on its standing to sue will revive that standing under Righthaven’s amended lawsuit contract with Stephens Media LLC, owner of the R-J.
Defendants who defeated Righthaven in court and won their attorney’s fees have complained that even as they haven’t been paid a total of $216,000, Righthaven continues to compensate outside attorneys to litigate other cases. One of these defendants, Wayne Hoehn, has asked that a receiver be appointed to auction Righthaven’s assets, though through Tuesday the court had not acted on that request.

Righthaven, in the meantime, continued to accumulate legal expenses on Tuesday as one of the outside attorneys, Shawn Mangano, filed briefs with the 9th Circuit in two of the seven cases Righthaven has appealed.

In one brief, Mangano said U.S. District Judge James Mahan in Las Vegas was wrong to find an Oregon nonprofit was protected by fair use in posting without authorization an entire R-J story on the relationship between immigrants and Las Vegas police.

A key factor in Mahan’s decision was that the defendant, the Center for Intercultural Organizing in Portland, couldn’t harm the market for a copyright to the story Righthaven obtained for lawsuit purposes from Stephens Media.

With Righthaven using the copyright for lawsuit purposes only, there was no market for the copyright and Righthaven’s litigation strategy “has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing to advance the Copyright Act’s purpose of promoting artistic creation,” Mahan found.

In one of his more controversial findings, Mahan ruled the 33-paragraph story involving multiple interviews was mainly “informational” as opposed to being “creative,” with creative works receiving greater copyright protection.

Mangano, in his brief, complained that Mahan took the “drastic” step of ruling without giving Righthaven a chance to investigate how the Oregon center was using the story to raise money from donors.

Mahan “found that because the work was a news article, the totality of its content was informational and permissible for productive use by others,” Mangano wrote in his brief. “In reaching this erroneous conclusion, the district court failed to accord any degree of creative effort to the work (story) whatsoever.”

In his second appeals brief, Mangano appeared to face an uphill challenge in arguing that Righthaven had standing to sue or should have been allowed to sue after amending its Stephens Media lawsuit contract to fix defects — assertions rejected so far by the five Nevada judges.

Mangano specifically asked the appeals court to reinstate its lawsuit against former federal prosecutor Thomas DiBiase, who has a public service website about murders in which the victims’ bodies have not been recovered and posted an entire R-J story about such a slaying.

Mangano argued that in dismissing the DiBiase lawsuit, U.S. District Judge Roger Hunt in Las Vegas had misinterpreted the Righthaven/Stephens Media lawsuit contract and misread the appeals court’s case law on the standing issue.

“The district court (Hunt) relied upon its erroneous interpretation of the SAA (lawsuit contract) and the (copyright) assignment as grounds for completely dismissing Righthaven’s request that it consider the parties’ intent when entering into these contractual agreements,” Righthaven’s brief said.

The DiBiase case was noteworthy because in that lawsuit Hunt threw out Righthaven’s standard lawsuit demand that defendants forfeit their website domain names to Righthaven — a demand critics said wasn’t authorized in the federal Copyright Act and was meant to coerce defendants into settling.

Righthaven had insisted the demand was proper, though that issue is not part of the DiBiase appeal.

The defendants in these cases have not yet filed their briefs, and it’s likely to be months before the appeals court hears arguments on the cases.

Absent from the appeal briefs was any mention of whether Dale Cendali, a prominent outside copyright attorney for Righthaven, had participated in writing them.

Cendali had been recruited earlier this year to assist Righthaven in some other high profile cases that remain open.

A request for comment on Cendali’s status was placed with Righthaven
http://www.vegasinc.com/news/2011/no...ppeals-briefs/





DRM Is A Complete Lie

Opinion It has never protected a single thing
Charlie Demerjian

DRM IS A LIE.

When an agenda driven DRM infection peddler gets on a soapbox and blathers about how it is necessary to protect the BMW payments of a producer who leeches off the talented, rest assured, they are lying to you. DRM has absolutely nothing to do with protecting content, it is about protecting the wallets of major corporations. The funny thing is they aren't protecting it from you, they are protecting it from each other.

Let's look at the shattering success of every DRM solution to date. Every single one has failed. The score card is hundreds if not thousands against, zero for. Name me one song, movie or software title that is DRM infected that has not found it's way to the net within a week of release, usually long before release. There are none. To protect content, DRM is an abject and total failure, and will continue to be.

It also hurts the user - there is no DRM infection that in any way benefits the consumer. It costs more to develop, costs to license, makes hardware more expensive and complex, and screws the user under legitimate uses. It has a negative value to the consumer.

So, it makes content less attractive, less playable, and is legally dubious, so why is the industry hell bent on infecting everything from your prophylactics to your computers? Simple, they want a bigger slice of the pie, and DRM is the way to get it. No, not bigger profit margins, the greedy bastards already do that with each format change, DRM infections are about edging each other out.

Here is the problem, every DRM infection is unique, patented, copyrighted, copywronged, and DMCAd ad nauseum, They protect their code in every way possible, and make it so you have to get their approval to use it. This is all done under the guise of protecting content, but that is a lie. If you are going to steal content, do you think violating another copyright on the DRM mechanism will make you lose more sleep? Not a chance.

If you are a rival company though, you can't really violate such things and get away with it for long, Sony, MS and most people swiping GPLd code are proof of that. So, you have to license it to play ball, or at least play music and movies. That is the true nature of DRM infections, to keep other big greedy companies out.

So, say you are a big immoral record company that see walking wallets, aka customers, as not giving you enough of their hard earned money, some have the gall to buy from other big greedy immoral companies. Bastards! What do you do? Make sure they have a hard time playing things from the other guys.

Let's take a good example of this, the first few generations of Sony's DRM infected failures of an almost MP3 player. Sony decided that its proprietary ATRAC format was better than MP3, and technically it could be, but that is irrelevant. They didn't support MP3s out of the box, but would do a one way conversion if you wanted to put your MP3s on the Walkman. Taking them off was a bit curious though.

Also, if you wanted to buy music, you could go to the wonderful (sarcasm people, sarcasm) Sony connect store, and buy almost anything that Sony licensed artists made. If you wanted a song by a Warner artist, well, tough. Stepping into the land of make believe for a minute, imagine that Time-Warner made digital music players, and lets pretend they have an encoding system and DRM infection called HURT-SCAM. You can buy a TW player and download any HURT-SCAM song, curiously this meant only titles from a Warner artist. If you have a Sony player, it doesn't support HURT-SCAM, and TW players don't support ATRAC.

Now, if this hypothetical TW player wanted to play ATRAC, they could reverse engineer it, and get bitten by the same DMCA laws they bought so many Congresspeople to implement, and the same is true for Sony wanting to implement HURT-SCAM. (Please note, I am not intoning that these companies buy government, remember this is make believe. The US governmental system is immune to such things, just ask them.). Basically, both sides have to license their bitter rivals before they can interoperate.

Now, lets step back into the land of reality. You have ATRAC, FairPlay (har har), Real, WMA, and a host of other DRM infections, and none can play any of the others. If you have a player that can do one, chances are that it can't do any of the others, almost like the license terms preclude it, but it would take someone much more cynical than I to say that. You have enough walled gardens to last a lifetime, and each one is filled with greedy execs trying to wrap their mind around how much money this will bring them. The stakes are high, they each want it all, and want all the others to go away, there is no middle ground.

The enforcement mechanism is quite simply the DRM infection Without DRM, the other guys could invade their garden and do thing that might benefit the user, I mean take away the profits they feel are rightfully theirs. In the mean time every piece of media thus 'protected' is available for download. DRM has done, is doing and will do nothing to stop piracy.

Basically, you and I are the innocent bystanders in this drive by shooting called DRM. The big companies are at war, and we are the casualties. So, they have to send their flying monkeys to sue single moms, 12 year olds and octogenarians to make it appear that they are doing what they say. Bull, they are lying. The sad part is that the public, and worse yet, the governments are listening to them.

The misinformation campaign seems to have sunk in, people don't even question that DRM is about protecting content any more, even though it has never done so. It hurts the users, and hurts the companies making it, but they have their eyes on the big prize. DRM infections are the only way to keep their rivals at bay, lobbing a few bullets at the users is a low price to pay for that.
http://www.theinquirer.net/inquirer/...m-complete-lie





UK Web Blacklist Blocks Access to File-Sharing Site Fileserve
Zack Whittaker

Summary: UK ISPs blocked access to Fileserve over the weekend, after the UK’s web blacklist filter blocked all downloads from the site after a reporting error.

The UK’s Internet Watch Foundation (IWF) has now lifted a block imposed on UK Internet service providers, after a specific link was thought to contain child abuse imagery.

But the IWF’s block restricted downloads from the file-sharing site Fileserve, restricting users from accessing their personal files, and downloading files uploaded by others. While users were pointed to purchasing premium accounts for faster downloads, UK premium users were still blocked from downloading content from the site.

Many had taken to their web providers’ support forums to complain about the move, with many believing their ISPs were blocking downloads. Subsequently, an updated message on the Fileserve site revealed the IWF “recently implemented changes that may affect your download ability on the site”.

Fileserve remains as one of the top most-visited sites on the web, allowing users to store files, documents, and sometimes copyright infringing material.

Working alongside consumer web services and broadband providers, the IWF maintains a blacklist of domains and websites to prevent users from seeing or being able to access child pornography. It is understood that the IWF initially blocked access to one file hosted by the site, but instead blocked access to all of the sites’ download servers.

In 2008, the IWF blacklisted a page on Wikipedia because it contained an album cover by the band Scorpions was deemed as child pornography. The organisation came under heavy fire from privacy groups who labelled the move as “censorship”, while some argued in the filtering systems’ defence.

In January 2009, Archive.org’s Wayback Machine, a site that allows access to carbon copies of 13 years of web history, was blocked by a UK web provider because the IWF blacklisted the domain because of a seemingly rogue file.

The IWF is a self-regulatory body and subscribed to by the major web providers in the UK. While the block has now been lifted, users are saying, it comes only a week after the web marked American Censorship Day in a bid to protest the move made by the U.S. government to implement the SOPA anti-piracy bill.
http://www.zdnet.com/blog/london/uk-...fileserve/1037





Aussie ISPs Propose Anti-FileSharing Warning Notice Scheme
enigmax

Five of Australia’s largest ISPs have today put forward a detailed proposal to deal with the issue of illicit file-sharing. The paper proposes the implementation of a warning letter process, but unlike the 3 strikes-style regime in neighboring New Zealand, would not include an Internet disconnection sanction. Instead, rightsholders would head back to the legal system to punish persistent infringers.

In common with many other countries around the world, in recent years Australia has struggled with the issue of unlawful file-sharing. The messy and still-unfinished legal battle between AFACT and ISP iiNet has further highlighted the rift between rightsholders, the Internet industry and its subscribers, and their often conflicting needs.

But now a joint proposal from the Communications Alliance and ISPs including Telstra Bigpond, iiNet, Optus, iPrimus and Internode, with collaboration from telecoms company AAPT, Ericsson Australia and the Internet Industry Association (IIA), lays out what the contributing parties believe is a workable middle-ground.

The 14-page proposal, titled ‘A Scheme to Address Online Copyright Infringement’, puts forth the framework for a “Notice Scheme” which aims to educate Internet subscribers when their connections are flagged as engaging in copyright infringement.

CommsAlliance

Unlike schemes elsewhere, particularly in neighboring New Zealand, there is no ‘graduated response’ being proposed by the ISPs for dealing with persistent infringers – that means no throttling, suspensions or disconnections. Instead, a warning notice scheme “with a strong emphasis on educating consumers” would be put in place, operating as follows:

The responsibility for monitoring file-sharing networks would fall at the feet of rightsholders who would only be able to do so using pre-approved and tested systems. Notices would have to be sent to ISPs within 14 days of an infringement being logged and ISPs would then have another 14 days to match the provided IP address with a customer account and send out an infringement notice.

Subscribers being contacted about a first instance of illicit file-sharing would receive an ‘Education Notice’ noting that an infringement had taken place on the account, but would not mention the content of the material that was shared. It is not clear why this omission was put in place, but one might imagine that those sharing pornography would be pleased at the inclusion of such a safeguard. The notice would also include information on where to obtain legal content.

After receiving an Education Notice, a 12 month period would then follow where if a subscriber was caught infringing again they would receive a ‘Copyright Infringement Notice’ (CIN). This time the content shared would be detailed in the notice.

When an account holder has been sent an Education Notice and three CINs, their ISP would then send a new notice called a ‘Discovery Notice’. These would note that the account holder has been unresponsive to previous notices, that rightsholders have been informed of this fact, and that further action could follow. It is at this point that the rightsholders would have to decide whether to get a court order to obtain the identity of the account holder in order to sue them under existing legislation.

At every step of the way, from Education, to Infringement to Discovery Notices, subscribers would be given opportunity to appeal.

Notice

“We believe the Notice Scheme can greatly reduce online copyright infringement in Australia, while protecting consumer rights, educating consumers about how to access legal online content and helping rights holders to protect their rights,” said Communications Alliance CEO, John Stanton.

“Equally important is the need for rights holders to ensure that consumers have access to legal and affordable content online, to reduce the motivation to source content in ways that might be illegal.”

Stanton notes that Australians have turned to illicit file-sharing because accessing material through official channels often means a wait of months compared with the release schedules of the rest of the world

“This difficulty, combined with a proliferation of access technologies, such as file-sharing software, has reportedly seen a growth in the frequency of unauthorised access to online content and breaches of copyright laws,” he notes.

The ISPs propose that the scheme runs for an 18 month trial to be followed by an independent evaluation on whether it has successfully influenced consumer behavior and if any changes should be made.

At this point some readers might be thinking that the proposals appear much more reasonable than those seen elsewhere, but it should be noted that while the ISPs may have thrown their ideas into the ring, they are just that – their ideas.

The other side of the debate – the rightsholders – aren’t mentioned as being party to these proposals even though the Communications Alliance statement says that the education-based Notice Scheme “flows” from discussions held during 2011 between ISPs, the government, and rightsholders.

And there are always problems. When one looks at the number of warnings the ISPs are offering to send out they are fairly limited. No ISP party to this proposal will be required to send out any more than 100 in a month, and all ISPs combined aren’t offering to send out any more than 10,000 total throughout the entire 18 month trial. Further, the thorny issue of apportioning costs is yet to be hammered out and they will be substantial.

It will be interesting to see what the likes of AFACT have to say about the proposal. On track record they will want any agreement balanced more in their favor and the above will be just the starting point for their negotiations.

Full details of the proposed scheme can be obtained here (pdf)





“Pirate Blogger” Law Student Raided By Police For File-Sharing Articles
enigmax

Anti-piracy group RettighedsAlliancen say they have been busy recently tracking down piracy ‘masterminds’. After busting who they claim is the leader of a huge movie piracy group, last week they had the police detain a less likely target – a 19-year-old law student who runs a file-sharing blog. RettighedsAlliancen say that guides on his site showed readers how to break the law, an act serious enough to involve the police.

On November 2nd, lawyers from RettighedsAlliancen, officials from the bailiff’s court and computer experts called at the home of an individual claimed to be a leading movie pirate.

The man, known online as Kefissos, stands accused of being connected to the ‘After Dark’ release group and responsible for the illegal uploading of hundreds of movies. Although it’s not certain they belong to the man, accounts in the name of Kefissos can be found on several leading torrent sites including The Pirate Bay, and many of the movies indexed have Danish connections.

But RettighedsAlliancen’s work this month had only just begun.

On Tuesday last week, as usual 19-year-old law student Halfdan Timm was studying at the University of Aarhus. Half a mile away the occupants of an unmarked Ford Mondeo car were unsuccessfully trying to track Halfdan down at his apartment. A little later during a break in his lectures Halfdan was confronted by police officers.

“I was given two options,” Halfdan explains. “Either I could go quietly with the two policemen, or I could be arrested and ‘do it the hard way’.”

Halfdan told TorrentFreak that he was under suspicion of “piratkopiering” (piracy-copying), and that the police had a search warrant for his apartment.

Not wanting to make life difficult, Halfdan chose the easy way and took the police to his home. Once there the police asked him if he had anything to show them in advance of their search. Halfdan pointed to his desktop computer containing downloaded songs and informed them that he had a collection of 50 downloaded movies burned on DVD.

“One policeman in rubber gloves then began a very careful examination. Sofa pillows, broom closet, refrigerator, my dirty underwear, the rest of my wardrobe, my entire bedroom, under my bed, toilet and even my roommate’s room – even though he has nothing to do with the case,” Halfdan adds.

Then the discussion moved on to the 40,000-member NextGen site, a private BitTorrent tracker founded in February 2010. NextGen is also home to Sublime, a group supplying local subtitles for all the latest Hollywood movies.

Nxtgen

“At first, they tried to figure out whether I was leading the tracker, searching for hidden equipment in the apartment, but when they realized that wasn’t the case, they tried to get as much information as possible about the actual owners.”

Halfdan doesn’t deny being a member of the site and admits he has downloaded movies and music, but according to comments made to Politiken by RettighedsAlliancen chief Maria Fredenslund, Halfdan is a file-sharing “mastermind”.

“By mastermind we mean one who stands behind file-sharing services,” she said. “We came across him in connection with our investigations and have notified the police.”

Halfdan puts the “mastermind” label down to simple stupidity but believes he may have been targeted for another reason – running a file-sharing related blog.

GratisFilm.info was founded by Halfdan in February 2011 and contains posts covering issues such as staying anonymous online (Halfdan notes the irony) and using seedboxes.

“It’s quite an idealistic cause for me, as I believe being anonymous online is (should be) a human right,” Halfdan told TorrentFreak.

“On the site, I guide on how to stay anonymous, gain access to The Pirate Bay even though it’s blocked in Denmark, but also about more ‘common’ subjects like new South Park episodes, the forthcoming Google Music, who Anonymous (the group) is and so on. Pretty much everything I find interesting. I believe using the police is [RettighedsAlliancen's] way of shutting me down.”

GratisFilm also carries reviews on a handful of BitTorrent sites, including NextGen. In early October, Halfdan interviewed the site’s owner, a fact he discussed with the police. This, he believes, has led some to believe he has a personal relationship with the site’s owner.

Halfdan’s assertion, that he was targeted because of his negativity towards anti-piracy companies, is rejected by RettighedsAlliancen, but they are clearly unimpressed with some of his articles.

“I was not aware that he criticized RettighedsAlliancen,” said Maria Fredenslund.

“But we can see that he teaches others to break the law and conceal themselves on the net. He is one of those who deliberately break the law. We believe that this was something that was so serious that it should be handled by the police.”

So are the police taking the matter seriously?

“The officers told me even they thought this was a waste of time, and that they could use their day better than driving around the whole day to pick up 50 movies and a computer,” Halfdan told us.

“I’m very surprised that the police went in on the case at all, but it does say quite a bit that they waited 3 months [after the initial complaint] to move, and that it’ll take at least 6 months before they start investigating my computer. This has a very, very low priority for them.”

Troels Møller, Piratgruppen spokesman and co-founder of internet think-tank Bitbureauet, is clearly outraged at this latest entertainment industry response to the file-sharing issue, describing it as completely disproportionate.

“Just as I thought Antipiratgruppen was becoming a bit more reasonable lately, they show their evil face from the old days again – the days of threat letters and blackmail,” he told TorrentFreak. “They were ransacking his apartment and searching through his dirty clothes! All this for copying some stuff on the internet? Where are the proportions? Is this really how the entertainment industry wants to treat its fans and customers?”

“What strikes me most about this case though, is that Maria Fredenslund apparently thinks that people should be arrested for teaching others how to use the internet anonymously. I would like to point out that this is not illegal! They don’t care about privacy or freedom of expression. In fact, they appear to be outright enemies of these fundamental rights.”

“Denmark is quickly becoming a frightening and shameful example to the rest of the world on how not to handle the filesharing ‘problem’,” Troels concludes.
https://torrentfreak.com/pirate-blog...ticles-111121/





Feds Seize 130+ Domain Names in Mass Crackdown
Ernesto

US authorities have initiated the largest round of domain name seizures yet as part of their continued crackdown on counterfeit and piracy-related websites. With just a few days to go until “Cyber Monday” more than 100 domain names have been taken over by the feds to protect the commercial interests of US companies. The seizures are disputable, as the SOPA bill which aims to specifically legitimize such actions is still pending in Congress.

seized The Department of Justice (DOJ) and Immigration and Customs Enforcement (ICE) have resumed “Operation In Our Sites”, the domain name seizing initiative designed to crack down on online piracy and counterfeiting.

The new round comes exactly a year after 82 domains, including Torrent-Finder, were taken over in 2010. At the time ICE labeled the actions “Cyber Monday crackdown,” referring to the Monday following Thanksgiving where consumers are persuaded to shop online.

TorrentFreak has identified more than 130 domains taken over by the government during the last 24 hours, which makes this the largest seizure round to date. The authorities have yet to comment via official channels, but we assume that they will use the same justification for the domain seizures as they did last year.

“Intellectual property crimes are not victimless,” said Attorney General Eric Holder at the time.

“The theft of ideas and the sale of counterfeit goods threaten economic opportunities and financial stability, suppress innovation and destroy jobs. The Justice Department, with the help of our law enforcement partners, is changing the perception that these crimes are risk-free with enforcement actions like the one announced today,” Holder added.

Compared to previous seizure rounds, there are also some notable differences to report. This time the action appears to be limited to sites that directly charge visitors for their services. Most of the domains are linked to the selling of counterfeit clothing (e.g. 17nflshop.com), and at least one (autocd.com) sold pirated auto software.

Last year several sites were taken down because they allowed their users to access free music and movie downloads, and these were followed by several streaming services a few months later. No similar sites have been reported in the current round.

After the November 2010 seizures were covered widely in the press, many torrent site owners began to work on backup plans in case they too become a target. A few dozen sites have switched over to alternative domains, and other torrent site operators have purchased additional backup domains just in case.

The need for a backup plan was only intensified when US lawmakers introduced legislation to make domain seizures common practice, such as the pending Protect IP and SOPA bills.

The fact that the authorities have once again launched a large crackdown on “rogue” websites begs the question why this legislation is needed in the first place. Apparently, the current system already allows for the seizure of domain names, without due process and all the other constitutional issues.

Perhaps the authorities will be able to answer this question when they officially announce the latest “Cyber Monday crackdown.” Meanwhile, a full list of the 131 seized domain names we have identified thus far is embedded below.

100jerseys.com100jerseys.net10nfl.com17nfljerseys.com17nflsh op.com2010-2011newlouisvuittonbags.com2010footballjerseys.com2010footba lljerseys.net2010nflshop.comautocd.comb2bjersey.comb2cjersey .combclike.combizjerseys.combootsforwomenonsaleonline.combuy jerseysworld.combuysonshop.comc2cjersey.comc2cjerseys.comc2c jerseystore.comcheap-louisvuitton-replica.comcheap-nflshop.comcheap-nflshop.netcheap-nhljersey.comcheap-nhljersey.netcheapestjerseysale.comcheapestjerseysworld.comc heapjerseysite.netcheapmlbjersey.comcheapmlbjersey.netcheapn fljerseyshop.comcheapnflnhlsell.comcheapnflshop.comcheapnfls hop.netcheapnflshops.comcheapnhljersey.comcheapnhljersey.net crazyjersey.comdhljerseys1.comdhlnfl.comdhlnfl.netdiscount-louisvuitton-handbag.comdiscount-uggboots-sale.comdiscount-uggboots-saleonline.comdiscountedjerseysale.comdvdsetonline.comdvdsho pdvd.comedgefans.comeejerseys.comemsnfl.comfinejerseys.comgg jersey.comggjerseys.comgolfsuno.comgooglejersey.comgooglenfl jerseys.comgroupsjerseys.comhandbags-eluxuryin.comhandbagslot.comjerseychannelone.com
jerseyget.comjerseygreatdeal.comjerseynfljersey.comjerseyons ale.comjerseyorder.comjerseyorder.netjerseysbyjerseys.comjer seysbyjerseys.netjerseyschannel.comjerseysroom.comjerseysusa .comjerseywholesaler.comlouisvuitton-bags-forcheap.comlouisvuittonun.comluxurysum.comluxuryum.comluxur yun.comlvsalehandbags.commlbjerseyswell.commyjerseyshop.comn fl01.comnflhere.comnfljerseyswhole.comnfljerseysworlds.comnf lnhlsell.comnflnhlshopping.comnflsearched.comnhljerseyswell. comnhlmore.comnhlnfljersey.comnhlwell.comofficialpumashop.co mokupsnfl.comonline-nflshop.comonline-nflshop.netpicknflshop.comprojerseysale.compumabig.compumaou tlets.netpumashoesoutlet.netpumasportshs.comreebokjerseys.ne treeboksite.comrejerseys.comrejerseys.netsaintsjerseysmart.c omshauntinsanitydvd.comshopsbag.comtexansjerseystore.comtntj erseys.comtntnfl.netuggbootsclearanceoutletstores.comujersey sale.comupsjers.comupsjerseys.comupsjerseys8.comupsnfl.comup snfljerseys.comupsnflshop.comusa-wholesalejerseys.com
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https://torrentfreak.com/feds-seize-...ckdown-111125/





John Wiley Expands Lawsuit Against File-Sharing ‘Dummies’
Jeff Roberts

Two weeks ago, publisher John Wiley made headlines by suing 27 internet users who were allegedly swapping editions of the popular “For Dummies” series online. The campaign appears to be working because John Wiley has now doubled-down on its effort by suing dozens more people. The prime targets this time include novice cooks and gardeners.

The litigation campaign reflects the fact that, in recent years, unauthorized file-sharing has become a problem for book publishers in the same way it has for the music and movie industry. In terms of file size, books are tiny compared to songs or videos and this makes it quick and easy for people to swap online copies. John Wiley claims that, since 2010, people have downloaded its “DOS for Dummies” title more than 74,000 times on the website demonoid.me

In a new lawsuit filed this week in New York federal court, John Wiley named more “John Doe” defendants and listed the titles they downloaded along with their location and IP address. Unlike a similar suit filed two weeks ago, the list of alleged offenders does not include many technology aficionados. Instead, the new list of miscreants is made up primarily of people from upstate New York towns like Rochester and Woodstock who shared “Cooking Basics For Dummies” and “Vegetable Gardening For Dummies.”

William Dunnegan, an attorney for John Wiley, said he could not comment on the litigation and would only confirm that it had been expanded to include 46 new “John Does.”

The decision to sue “John Does” reflects the fact that John Wiley cannot immediately identify the actual names of the file-sharers. The publisher is therefore using a procedural tactic that permits it to amend the complaint later on in order to add the defendants’ real names which it can obtain from internet service providers.

John Wiley’s goal with the litigation is likely to force the defendants to agree to a settlement rather than go to a full-blown trial. The publisher has considerable leverage because the Copyright Act provides draconian penalties of up to $150,000 per infringement, meaning many defendants could be willing to pay a few thousand dollars to end the matter.

This tactic of suing ‘John Does’ en masse has proved controversial with courts, however. As Ars Technica reported, a West Virginia lawyer this year partnered with a pornography studio in an attempt to extract payments from thousands of anonymous defendants—many of whom presumably pay to avoid embarrassment. Judges have halted the suits, saying the defendants should be sued one at a time, but this has led the lawyer to simply try again in different jurisdictions.

The John Wiley lawsuits suggest the book business is turning to the type of aggressive litigation long used by the music and movie industries. Many critics decry these tactics, claiming that copyright penalties are grossly disproportionate to the offense and that content industries should focus instead on developing new digital business models rather than suing people. Copyright owners believe that lawsuits are an effective deterrent and claim that piracy is making it impossible for them to invest in new content.

John Wiley launched the ‘For Dummies’ franchise in 1991 and has since sold more than 200 million copies in numerous languages.
http://paidcontent.org/article/419-j...aring-dummies/





Belgacom Can’t Be Told to Block File Sharing: EU
Stephanie Bodoni

Belgacom SA (BELG)’s Internet-service provider Scarlet can’t be forced by a national court to block users from illegally sharing music and video files, the European Union’s highest court said.

“EU law precludes the imposition of an injunction by a national court which requires an internet service provider to install a filtering system with a view to preventing the illegal downloading of files,” the EU Court of Justice in Luxembourg said in a statement after today’s ruling.

A Belgian court last year sought the EU top tribunal’s guidance on whether forcing an ISP to stop illegal file sharing on its network is in line with the 27-nation bloc’s rules. Belgian music-copyright group Sabam, which represents authors and musicians, started the legal fight over the use of so-called peer-to-peer software for file sharing.

Belgacom, the largest telephone company in Belgium, won antitrust approval to acquire Scarlet in 2008. Scarlet is appealing a June 2007 Belgian court order to “make it impossible” for users to violate copyright laws, saying it would entail breaching customers’ privacy rights.

The EU’s top court in 2008 ruled in a case involving Telefonica SA (TEF)’s Internet unit that ISPs may not have to reveal the identities of customers accused of illegal file sharing. The Belgian court said that ruling “was not sufficient” to settle Scarlet’s appeal.

Today’s case is: C-70/10, Scarlet Extended SA v. Societe Belge des auteurs, compositeurs et editeurs (SABAM).
http://www.bloomberg.com/news/2011-1...ourt-says.html





Google Blacklisting File-Sharing Sites The Pirate Bay, isoHunt, 4Shared and More
Paul Fang

Google has started blacklisting many of the top file-sharing websites on the Internet, including torrent site The Pirate Bay, as well as isoHunt, and 4Shared. According to file-sharing blog TorrentFreak, “the changes were quietly processed and appear to be broader than previous additions”. Google’s blacklist also evidently blocks the names of these websites in their Google Instant, auto-complete search services, while the webpages themselves remain indexed. Why? Possibly because the search giant most likely wants to be on good terms with copyright holders, such as major movie and music studios.

While there is no silver bullet for infringement online, this measure is one of several that we have implemented to curb copyright infringement online,” Google manager of global communications and public affairs Mistique Cano previously said to TorrentFreak. She also detailed that “this is something we looked at and thought we could make some narrow and relatively easy changes to our Autocomplete algorithm that could make a positive difference”.

isoHunt owner Gary Fung said told the blog in an interview, “It’s a lot more subtle than the censorship attempts made possible by the pending PROTECT IP and SOPA bills, but it’s still censorship and it starts small. Google is increasingly becoming a self-righteous Big Brother of the Web. So much for ‘Do no evil’”.

The searches “thepiratebay,” “the pirate bay,” “isohunt,” “torrentreactor,” “btjunkie,” “kickasstorrents,” “sumotorrent,” “btmon,” “extratorrent” and many others are now excluded from ‘Autocomplete‘ and ‘Instant‘, as well as “4shared,” “filesonic” and “fileserve.” We’ll see what Google’ll do in the future. And, by the way, this is from a company who’s motto is ‘Don’t be evil’. Just in case you didn’t know.
http://www.slashgear.com/google-blac...more-23197767/





Why Everyone But The Artist And The Music Fan Is Doomed
Jeff Price

Every business built on gatekeepers eventually fails. At some point some technology comes around, making the entire old school industry obsolete.

It’s a shortsighted model based on greed, ego and false perception of invulnerability.

Take the old school music industry: it was a ticking time bomb of self-destruction waiting to go off. It began with the birth of recorded music. The “artist gatekeepers” with the infrastructure and access to place music on retail shelves decided they would not just charge a fee for the service, but would also require a transference of copyright from the creator to the gatekeeper.

For the “consumer gatekeepers,” they could have chosen to allow more music to be exposed, but they went down the same path as the artist gatekeepers.

It did not need to be this way; the artists could have been allowed to keep their copyrights, and music fans could have had access to discover more music. Try as these two sets of gatekeepers might, their control would be broken. Their over-the-top, greedy mistakes were always on a path of tearing themselves down; it was not a matter of if, it was a matter of when.

Along the way there were lies, theft, piles of money traded, and unnecessary filtering, but the artist and music fan would win. It’s evolution.

The fall came hard and fast. It used to be that as a musician, you had to go to the “artist gatekeeper,” the label, and be one of the anointed few that got the privilege of transferring ownership of what you created to the label so your CDs could end up on store shelves.

In order to get heard, and then hopefully have your music cause a reaction, you had to be one of the even luckier few chosen by the “consumer gatekeepers” to have your music played on commercial radio or MTV, or get written about in Rolling Stone.

Did they think, even a moment, that this control would ever be taken from them?

When eMusic, the first on-line digital store, launched in 1998, the boulder began to careen down the mountain. Within ten years, the entire 80-year-old traditional gatekeeper model had been destroyed.

No longer did you need an A&R person deciding an artist was of “commercial value” to be let into the system.

No longer did you have a retail store buyer subjectively deciding which CDs had enough value to be placed on their shelves.

No longer did MTV have a lock on deciding which music videos got seen.

No longer did commercial radio limit what we all heard to the 15 to 20 songs that they decided to play.

No longer was the general population limited to reading what the editors of Rolling Stone, The New York Times, Spin and others decided to write about.

In the digital world, all artists can be on infinite digital shelves with infinite inventory waiting to be discovered, heard, shared and bought. The general population of the world can decide what does and does not have value, and can share thoughts and preferences in scales never before thought imaginable, networking to one another globally, via social outlets like Twitter, FaceBook, MySpace, and YouTube.

Digital radio stations now have millions of songs available to be programmed based on the listener’s preferences, likes and dislikes.

This entire old school system was based not on serving the artist, but on gatekeepers exploiting artists to let them in. And when you are a gatekeeper, when you think you are the only one with the keys to the kingdom (and only you will ever have them), you do stupid things, immoral things, and create a business where you’re simply a necessary evil.

This mentality extended beyond labels, distributors, retailers, radio stations, MTV and print magazines. It reached into every nook and cranny of the old industry, into entities like ASCAP: the gatekeepers for songwriters to get their money.

Just as it was in the old school industry, there was a time when these gatekeepers reigned supreme in what they did; they, and only they, had systems to track and collect money owed to songwriters for public performances. But then hubris crept in leading to their taking their songwriter members’ money to not only do the job they were hired to do, but also to pay the heads of these organizations exorbitant six and seven figure salaries, spend their members’ money on fleets of cars, expensive dinners, first class airplane tickets, luxury hotels, over the top decadent office space in the most expensive cities in the world (as well as many other travel and expense perks).

They were gatekeepers blocking songwriters from getting their money. Just like the major labels, they were the only ones with the infrastructure to provide the service; if you wanted your songwriter money, you had to go to them. They made their priority maintaining control, not serving. Had they kept this focus, they would now not be in trouble, they would have adapted.

The digital age has made the digital part of what ASCAP and others do a thing of the past. These organizations are not needed to track sales in iTunes or video streams in YouTube, and yet they are fighting and litigating to try to keep songwriters’ money going to themselves to stick in their pockets. They do not really give a damn that 98% of the world’s songwriters don’t get their cut of the money owed to them. There are other entities out in the world now, like TuneCore, that can get songwriters more money, more quickly, with transparency and an audit trail, and yet they fight against this efficiency.

It’s foolish, dumb and wrong.

As a member of ASCAP, we called and asked them for a list of entities that ASCAP licenses to, as well as the rates we should expect to get paid.

They called us up with two lawyers on the phone#–lawyers that ASCAP is able to pay from the money it collects from songwriters – and said they could not tell us the rates or whom they were in deals with as it would “violate anti-trust laws”. What I can’t understand is how they can state this while simultaneously issuing a press release about how they entered into a licensing agreement with Netflix.

Further, how can the people that hired them not get told what rates have been negotiated on their behalf? How would anyone know if they were doing their job?

It’s frustrating, but I keep this in mind, the end is inevitable; technology has rendered these entities moot, a thing of the past. The only thing keeping them propped up is that there are artists who do not understand how much money they are owed and where it is. As this information gets out, these organizations will use songwriters’ money in an attempt to sue, legislate and litigate, to stop these same songwriters from getting more of what they earned.

There should be no gatekeepers for musicians, or for anything. It all comes down to serving the musician. This is as it should be. Then entities like TuneCore must create products or services that are of true value to artists or get the hell out of the way.
http://blog.tunecore.com/2011/11/why...is-doomed.html





Streaming Music Companies: If The Artists Are Starving, Look To The Labels
Devin Coldewey

The distributive potential of the internet has done its part in disrupting the music industry, most visibly via iTunes. But iTunes was always a sort of simulacrum of a record store. Its icon was even a CD. They were providing, like Amazon, a digital abstraction of a physical store.

Where would we be if computers were just digital abstractions of desks full of paper? They were, of course, for a short time, but since then the potential of the home PC has pushed it further and further from the simple desk analogy. Why shouldn’t it be the same in music?

Many readers of this site are already happily signing up for the new music-streaming services of the net, but much of the world, including the music industry, is lagging far behind and blaming the new services when monetization doesn’t work how they expect. The streamers have responded: Hey, don’t look at us.

There are two simple misunderstandings, it seems. One is why the labels are getting any sympathy at all. They agreed to a licensing agreement, after all. And a proportionate amount of income is diverted to each label. That seems like a reasonable proposition, and it must have seemed so to the labels, which not only own part of the streaming companies but must have negotiated the terms. Why is it they get to cry about it now? Did they not understand the concept of streaming music?

It’s possible, actually, that the streaming music services are simply priced too low. $10, $15, $20 per month for unlimited music is a great deal. Should a service like this be a great deal, or should it be “fair”? After all, $0.99 per song wasn’t that revolutionary. Albums cost $12-18 and pricing ended up comparable. The fact that you could buy things song by song changed a lot, but as far as pricing went, it wasn’t actually a bargain. The improvement was in convenience.

But the streamers can’t just start jacking up prices. They’ve set a precedent with this $10 level, and the market likes it. Why wouldn’t they? But it doesn’t strike me as price-equivalent to what we’ve been paying, more or less, for years and years. Sure, prices change. But why they change is a complicated question with many moving parts, and I’m not entirely convinced that $10 for unlimited streaming is a price point that can be maintained.

Relevant to this is the second misunderstanding, which is the value of non-unit sales. Comparisons between income from album sales and income from streaming just don’t make sense. In a way, people are paying for nothing, because at the end of the month, if their subscription lapses, they have nothing to show for it. The labels and Spotify have something to show for it, though, and haven’t in fact given anything away. And people pay again and again for the same content. If I listen to a song this month and then again next month, I’ve paid twice, haven’t I? Or have I? The economics and philosophy of providing streams needs to be settled at an open table so everybody knows what they’re talking about, and things like Lady Gaga’s ridiculous allegations of microscopic payouts can be avoided.

But at the same time, it’s hard to deny that smaller bands, whose sales came largely from iTunes and low-overhead small-scale record sales, are going to be left out in the cold. Should they just tour more? Or should they be pushing for a different, more lucrative licensing agreement? Good luck without major-label clout.

The entire cost of producing music, in fact, needs to be reassessed honestly and openly. The basic price of goods has to do with the cost of producing those goods, and we’re using old numbers. How much would bananas cost if you didn’t have to pay for transport? A lot less, I’m guessing. How much less should music cost now that the costs involved in production have gone down enormously, and the costs of manufacturing and distribution have been, theoretically, almost totally eliminated? Again, probably a lot less.

Getting an honest assessment isn’t going to be easy. The RIAA isn’t exactly forthright on these matters, and naturally has an interest in keeping the perceived value of their product high. In the end, progress always ends up being a net opportunity, which is a nice way of saying that losses in ability or value may occur. The improvement caused by the internet has put thousands of retail and factory employees in the music industry out of work. The RIAA isn’t immune to the same action, the contraction of part of its market, and the sooner it acknowledges this and plans for the future, the better.
http://techcrunch.com/2011/11/22/str...to-the-labels/





Gabe Says Piracy Isn't About Price

Valve boss says service, not price, the big issue for consumers and publishers.
Colin Campbell

Here's Valve's co-founder and CEO Gabe Newell talking about piracy in the games industry. The man behind online retail service Steam tackles those who claim that lower prices for games will make piracy go away, and he takes on companies that seek to fight piracy by inconveniencing consumers.

"We think there is a fundamental misconception about piracy," Newell said. "Piracy is almost always a service problem and not a pricing problem. For example, if a pirate offers a product anywhere in the world, 24/7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country three months after the U.S. release and can only be purchased at a brick and mortar store, then the pirate's service is more valuable.

"Most DRM solutions diminish the value of the product by either directly restricting a customer's use or by creating uncertainty."

He adds, "Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company. For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.

"Our success comes from making sure that both customers and partners feel like they get a lot of value from those services. They can trust us not to take advantage of the relationship that we have with them."

"We usually think of ourselves as customer centric rather than production centric. Most of our decisions are based on the rapidly evolving opportunities to better serve our customers, and not on optimizing to be a better game company or digital distributor. The latter focus would be more of a straitjacket than conceptual aid."
http://games.ign.com/articles/121/1213357p1.html





Grooveshark Responds To Universal Music Lawsuit

As we reported on Monday, Universal Music Group has filed a new lawsuit alleging that the Grooveshark execs conspired to illegally upload more than 100,000 songs. UMG asked the court to shut Grooveshark down immediately and is seeking damages of $150,000 per infringement. Late Tuesday, Grooveshark responded:

"We have reviewed the Complaint that Universal Music Group filed last Friday against Grooveshark in U.S. District Court in Manhattan. Universal’s claims rest almost entirely on an anonymous, blatantly false internet blog comment and Universal's gross mischaracterization of information that Grooveshark itself provided to Universal. While Universal has deliberately engaged the media prior to serving a copy of the Complaint on Grooveshark, Grooveshark intends to fight this battle before the Court, not in the press. Grooveshark welcomes the opportunity to present the facts to the Court and has full confidence that it will prevail in the litigation."

Regards,
Marshall Custer
Grooveshark
General Counsel

The "anonymous, blatantly false internet blog comment" refers to a comment to a post on Digital Music News.
http://www.hypebot.com/hypebot/2011/...l-lawsuit.html





France to Tax the Internet to Pay for Music
BSOD

A new tax in France is aimed at ISPs. They want to tax isps to help pay for the CNM (Centre National de la Musique) which is an government organization that provides opportunities and funding for music and cultural events. Already in France there is a tax on tv, to pay for public access channels. Very similar to the tax in the United kingdom which pays for the BBC. This isp tax will also be similar to that, except towards publicly funded music. The Union des producteurs phonographiques francais independants (UPFI) praised the decision.

What's interesting is how Sarkozy has associated music to be sourced from the internet, and movies to be from tv. In a related comment he said:

“Globalization is now, and the giants of the internet earn lot of money on the French market. Good for them, but they do not pay a penny in tax to France.”

They bring up how the state funded the infrastructure necessary for the internet, and that the internet should give back to the state. But the internet is so much more than a music box. Why should someone who nowadays requires an internet connection to study in school, have to pay an increased ISP cost for music?
http://activepolitic.com:82/News/201...for_music.html





MPAA Costs Hollywood More Than US BitTorrent Piracy
Ernesto

During the last year Netflix managed to outgrow BitTorrent in terms of the amount of US Internet traffic it generates. A promising finding for Hollywood as it shows that there’s an overwhelming interest for the legal movie streaming service. At TorrentFreak we wondered what might happen if all US BitTorrent users made the switch to Netflix, and the results of this exploration are quite intriguing.

The movie industry claims that piracy is costing them billions of dollars a year.

Luckily for Hollywood, many Americans choose to consume their online media through legal services such as Netflix. In fact, there are now so many that the total Internet traffic generated by Netflix has outgrown that of BitTorrent.

This made us wonder – what would happen if all movie-downloading BitTorrent users made the switch to Netflix? What if movie piracy via BitTorrent disappeared?

Before we crunch some numbers we have to say that the model we use relies on a lot of assumptions. However, we try to keep these in favor of the movie industry to maximize their potential ‘profits’. We obviously chose Netflix as a BitTorrent replacement because it comes closest to what ‘pirates’ want.

What’s the ‘value’ of BitTorrent piracy?

What we’re going to do is determine the amount of Internet traffic movie and TV related BitTorrent downloads generate in the US. Since the file-sizes of Netflix and BitTorrent downloads are about the same, we then compare this traffic to what Netflix is generating now. Assuming a linear relation between revenue and traffic we can then “guess” how much extra money would come in if all BitTorrent users switched – and paid.

Step 1: How much BitTorrent traffic is movie/tv related?

The first assumption we’re going to make is that all BitTorrent traffic is unauthorized. This is of course not the case, but we’ll leave that debate for another time.

If we then take a look at one of the more recent reports on the BitTorrent ecosystem, often cited by the MPAA, we see that 35.2% of all torrents are movie related. Another 12.7% are TV-related. For the purpose of this thought experiment we are going to forget about Hulu and other free services and add TV to the ‘pirate traffic’ mix.

The total percentage of video torrents is then 47.9%.

Since we’re comparing traffic we have to adjust for the file-size of videos compared to all other content on BitTorrent and the actual popularity of the files. This is nearly impossible to estimate precisely , but several reports show that movie and video are downloaded the most by far. So we’re going to set the total amount of infringing BitTorrent video traffic at 85%, which is probably on the high end.

Step 2: How does BitTorrent traffic compare to Netflix traffic?

The next step is to see how much of total Internet traffic 85% of all BitTorrent traffic actually is.

A recent report from the Canadian company Sandvine shows that in the US 16.5% of total Internet traffic on an average day comes from BitTorrent. Since BitTorrent traffic goes both ways (upload and download), 8.75% of this is downstream traffic. This means that a little under 7.5% (85% of 8.75) of all Internet traffic in the US is video downloads over BitTorrent.

The same Sandvine report shows that 23.3% of total Internet traffic an average day comes from Netflix. More than 95% of this traffic is downstream, so we can set Netflix downloads at approximately 22.5% of all US Internet traffic, which is three times as much as BitTorrent’s video download traffic.

Step 3: How much revenue would these pirates generate on Netflix?

Here comes the interesting part. What would it mean in terms of revenue if ALL BitTorrent traffic moved to Netflix?

If we assume that BitTorrent and Netflix users consume roughly the same amount of content (again an assumption favoring the movie studios), then this is an easy calculation. Netflix would generate a third more revenue. Based on the shareholders report of the last quarter of 2010 (where most of the torrent stats in this article are based on) this translates into $198 million additional revenue for Netflix.

Based on more recent stats contained in Netflix’s third quarter filing of this year, the increase in revenue would be $266 million for that quarter.

Step 4: How rich would Hollywood become?

It’s clear that according to our (very unrealistic) calculations Netflix would greatly benefit from the sudden disappearance of BitTorrent piracy. The next step is to see how Hollywood would be impacted. Since most licensing deals are fixed and not based on usage, one could argue that the movie studios wouldn’t benefit at all. However, that’s not much fun.

So let’s look at the licensing deals that were in place already and determine Hollywood’s added profits based on that, assuming they would be more flexible.

In the whole of 2010, Netflix paid the movie studios $181 million in licensing fees according to the shareholder reports. If we add a third to that, Hollywood would have “made” roughly $60 million extra. Salient detail, the yearly budget of the MPAA is higher than that.

In recent months the movie studios have exponentially increased Netflix’s licensing costs, but still the added profits for the movie studios will be nowhere near a billion dollars. No, getting rid of ALL BitTorrent movie and TV piracy appears to have a ‘relatively’ small effect, even if all pirating BitTorrent users signed up for a Netflix account.

What does this mean?

Nothing. It’s a simplistic attempt to put a number on BitTorrent piracy in the US.

It shows that even when you assume that 90% of all US BitTorrent traffic is dedicated to video piracy, the added revenue for Hollywood in 2010 would have been less than the amount they paid to the MPAA. That is, if all BitTorrent users switched to Netflix.

The real added revenue if BitTorrent disappeared would of course be a fraction of this, as not everyone would start paying.

We don’t want to draw too many conclusions on this simple thought experiment, but it’s something to consider, especially when ISPs are expected to dedicate millions of dollars in resources to send BitTorrent users warning letters early next year. Not to mention the negative effect of the censorship bills that have been proposed recently.

Is it really worth all that?
https://torrentfreak.com/mpaa-costs-...piracy-111122/





Movie Rights Group Website Shut Down, VP Leaves
Renai LeMay

The website for controversial anti-piracy organisation Movie Rights Group has inexplicably vanished from the Internet and its vice president of sales and marketing has quit, leading to speculation that the organisation has been shut down for good.

MRG is a new organisation which was set up in Australia last year with the aim of protecting the copyright rights of content owners in the film industry. In mid-October it was revealed that MRG had approached every major Australian ISP seeking information on users who had allegedly infringed copyright online, initially seeking the details of some 9,000 Australians who it claimed had downloaded the film Kill the Irishman.

At that stage, the company’s then-vice president of sales and marketing Gordon Walker told Delimiter at the time, there were plans to broaden the company’s efforts to other films.

Unlike the other major Australian organisation representing the film industry, the Australian Federation Against Copyright Theft, Movie Rights Group had planned to take a different approach to piracy. Instead of legally targeting ISPs for the actions of their users, it was planning to seek to subpoena customer information from the ISPs and contact those who had allegedly infringed its copyright directly, looking to settle the matter out of court or through legal action.

The website had previously featured a prominent notice informing visitors that one of its chief services was settling lawsuits with Internet users who had allegedly infringed its clients’ copyright. However, Reddit users noted in the past several days that the organisation’s website had disappeared from the Internet.

In addition, Walker, who had acted as the company’s only known spokesperson, has updated his LinkedIn profile to note that he no longer works for the company as at November and was now a small to medium business development business consultant based in Brisbane. Walker has not responded to an emailed request for comment on the issue.

The disappearance of MRG’s website and Walker’s departure from the company have come after extensive press coverage on the company and its founders. In addition, national broadband provider Exetel has signalled it may modify its core business systems to make it more difficult for anti-piracy organisations such as Movie Rights Group to target its customers for allegedly illegally downloading content through platforms like BitTorrent.

Do I think Movie Rights Group has shut down permanently? I’m not sure. The situation is clouded at the moment. With no easy way to get in touch with the rest of the company’s owners or staff, and no real knowledge of what’s happened, I guess we’ll have to wait and see what chips may fall from this one. One thing I do know, however, is that websites don’t just disappear from the Internet for no reason.

If you do know what has occurred at Movie Rights Group, please feel free to use Delimiter’s anonymous tips line.
http://delimiter.com.au/2011/11/22/m...own-vp-leaves/





The True Intent of SOPA

The Great Firewall of China has been an inapt metaphor for the entirety of its existence. Its purpose is to keep its citizens in rather than to keep invaders out like the original Great Wall. Some will point to its exclusion of non-Chinese companies from the Chinese web space, but ultimately, the government was more than willing to play ball with those who were willing to compromise. The only thing the Great Firewall has in common with the Great Wall, is that they were both built to protect the builders.

Reasons Claimed by SOPA Proponents

The Great Firewall of America is no different. It is being built by the people who would benefit most from its construction. Just take a look at the witness list at the House hearing for the Stop Online Piracy Act (SOPA or H.R. 3261). 5 of the 6 witness list are outspoken advocates for SOPA. Most notable is Michael O’Leary, Senior Executive Vice President of Global Policy and External Affairs for the MPAA (Motion Picture Association of America). During the course of the hearings, O’Leary made multiple fallacious claims that googling names of movies such as “J. Edgar” or “The Grinch Who Stole Christmas” would return pirated versions of the movie. According to O’Leary, this link will show you lists of pirated versions of the movie. I’ll let you judge for yourself the veracity of his claim.

Many in support of the SOPA bill will claim that enforcement would be balanced and fair. They would claim that I am exaggerating the effects of the SOPA bill through hyperbole. During the course of the hearing, Michael O’Leary not only showed support for SOPA, but stated that “the Internet isn’t broken” in places like China and Iran. Wait. Isn’t China the home of some of the worst copyright infringement in the world? O’Leary’s statement must be made from either pure ignorance or to fallaciously support legislation that is not truly intended to protect against copyright infringement. When countries notorious for human rights abuse are held up as successful Internet models, it’s quite apparent that the Great Firewall of America is an apt name for the SOPA construct.

Let’s look at other potential motivations for SOPA. While the name of the bill certainly seems reasonable and desirable, how big of a problem is online piracy? The MPAA published this document about piracy in America. If you analyze their claim that there are $58 billion in losses per year from piracy and that 13% of all adults have pirated, you’ll find that the MPAA claims that your average downloader should be buying 200 more DVD’s a year. Lest we forget, the MPAA has a history of using hyperbole to defend its own interests. In his 1982 testimony, Jack Valenti, former President of the MPAA, stated the following to Congress,

“I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.”

Clearly the effects of the VCR on the media industry was poorly understood and greatly exaggerated by the MPAA. Videotape sales ended up being a significant new revenue stream for the MPAA for many years, even spawning the spinoff media rental industry which still exists today.

Failure to Understand the Internet as as Medium

During the hearing, it became painfully obvious that the proponents of SOPA simply do not understand the Internet as a medium. Representative Ben Quayle expressed concern that there were no successful business models that could survive without SOPA to prevent piracy. Yet services like iTunes, Netflix, and Amazon now represent some of the largest services in media representing billions in revenue every year. Furthermore, there have even recently been disruptive business models like Spotify which have been able to assert themselves in the environment that SOPA proponents claim is not possible to exist in.

It is apparent that proponents of SOPA like the MPAA are simply failing to adapt their business model as technology evolves. In the 1980′s, the MPAA fought against the VCR claiming concerns over about copyright violations. In the 2010′s, the MPAA is fighting against the Internet as a medium. The difference is, this time the stakes are much higher. SOPA’s scope extends far beyond alleged piracy. It creates a web environment almost identical to that of China that restricts internet access, which has recently been declared a human right by the United Nations.

The True Intent of SOPA

If the most recent hearing was any indication, the proponents of SOPA are not interested in working with the technology and Internet industries to find solutions to stem online piracy. When has a fair and balanced discussion ever been held when the debate is stacked 5 to 1? Supporters of SOPA clearly do not understand the Internet as a medium and are constructing a system in which the deck is stacked in their favor. As many tech giants have pointed out, SOPA is devastating to the technology and Internet industries. How long will we suffer the claims that media giants cannot make enough money, even as they are increasing their own compensation?

The Stop Online Piracy Act is being constructed to allow a stranglehold on the American Internet. Make no mistake. Its constructors are building it with this intent in mind. Just like the Great Firewall of China, the Stop Online Piracy Act is a misnomer. Hidden behind an innocuous name, the bill’s intent is not to stem piracy as its proponents suggest, its true intent is to control the Internet itself.
http://theagilepanda.com/2011/11/21/...ntent-of-sopa/





In a Reversal, Business Software Alliance Now Says the Proposed Anti-Piracy Law Overreaches.
Paul McDougall

A group that represents a number of major software developers, including Microsoft, Adobe, and CA, has withdrawn its support for the Stop Online Piracy Act (SOPA) bill, which would require Internet companies and other players in the tech ecosystem to deny services to suspected software pirates and copyright violators.

In a blog post, Business Software Alliance (BSA) president and CEO Robert Holleyman said that, while he believes the proposed SOPA legislation, (H.R. 3261) is well intended, it's too sweeping in its current form.

"As it now stands ... it could sweep in more than just truly egregious actors," Holleyman said. "To fix this problem, the definitions of who can be the subject of legal actions and what remedies are imposed must be tightened and narrowed."

Holleyman's stance marks a reversal for BSA, which originally supported the bill. In a press statement last month, Holleyman said the bill was "a good step" to "address the problem of online piracy."

Still, Holleyman said he hasn't given on up on SOPA, and believes it can be amended so that it helps stamp out Internet piracy without trampling on the rights of legitimate Internet companies. "BSA stands ready to work with (House Judiciary Committee) chairman Lamar Smith and his colleagues on the Judiciary Committee to resolve these issues," he said.

Smith (R-Texas), along with 12 co-sponsors, introduced SOPA in October. The bill is meant to prevent the theft of intellectual property that's online and in particular seeks to clamp down on foreign websites that steal content from American producers. Critics, however, say the bill amounts to Internet censorship.

Many of SOPA's provisions are aimed at foreign websites that stream or otherwise make available copyrighted content, such as movies and music, to U.S. audiences. SOPA allows the U.S. attorney general to seek a court order against such sites to block them, using technical means such as DNS filtering.

The bill would require online service providers, like ISPs, search engines, ad networks, and payment providers, to withhold services to websites that are deemed by a court to be infringing copyrights held by U.S. content producers. Further, ISPs must block U.S. Web users' access to such sites.

SOPA takes specific aim at purveyors of online pharmaceuticals that sell drugs to individuals without a prescription. It authorizes ISPs and other Web services providers to withhold services to such sites, many of which operate from India and Canada.

It also requires the secretary of state and secretary of commerce to appoint intellectual property attaches to all embassies in foreign countries. Part of the attaches' remit would be to work with local authorities to establish programs to cut down on intellectual property theft.

SOPA currently sits in the House Subcommittee on Intellectual Property, Competition, and the Internet. It has yet to be introduced to the floor for a vote.
http://informationweek.com/news/gove...licy/232200069





Cautious Optimism Follows SOPA Hearings: Don't Get Cocky
Joe Brockmeier

Crisis averted, so far. Last week's hearing on the Stop Online Piracy Act (SOPA) was stacked in favor of the Internet blacklist bill but we seem to have come out unscathed.

Public outcry against the bill rallied enough opposition to keep it from sailing through. Google testified against the bill, MasterCard voiced some objections, and tens of thousands of users lit up their representatives' phone lines thanks to Tumblr. But it's not over.

Following the proceedings, I spoke with Electronic Frontier Foundation activist Parker Higgins. "Considering the makeup of the meetings, and how expectations were, it went really well" says Higgins. "It remains to be seen what happens next, but given positive experience [at the hearing] and outpouring through the EFF and other groups, things look better today than they did earlier this week."

Damned by Faint Opposition

It's not surprising that Google opposed SOPA, but much was made of the fact that Linda Kirkpatrick of MasterCard raised objections to the bill. However, it's important not to read too much into this. Kirkpatrick's objections to SOPA were not against the bill in general, but mainly that the response periods in the act are too short and compliance costs are too high. While that's better than unabashed support for the bill, it's basically another way of saying MasterCard might support the bill if it were tweaked to make SOPA less onerous for MasterCard.

Kirkpatrick's testimony does highlight the fact that we don't need SOPA to combat copyright infringement online, however.

Katherine Oyama, copyright counsel for Google, had more concerns about SOPA, but still fell into the trap of suggesting "carefully crafted" legislation may be needed.

Down, Not Out

Here's the biggest problem with SOPA and its companion in the Senate, the PROTECT-IP act: It presumes that legislation is in any way needed. The entertainment industry is already legislatively over-served. Higgins says, "a lot of the complaints and issues raised [as a need for SOPA] are already addressed with existing laws."

The problem is that the RIAA, MPAA, BSA and other parties aren't satisfied with anything less than immediate gratification and ridiculous penalties for anyone that might infringe – however lightly – on their copyrighted material. Couple that with law enforcement and legislators all too happy to grab a bit more power, and you have a real problem.

This Congress isn't the first go-around for this type of legislation. Says Higgins, "this is really the third iteration – it was COICA [last year] – the PROTECT-IP, and it's not getting any better. They've responded to criticism each time by making it worse. They're not going in the right direction, and no Internet censorship bill is a good idea."

That's a phrase that needs to be emblazoned on the front door to the House and Senate: no Internet censorship bill is a good idea.

Indeed, after massive public outcry some in Congress have (finally) come forward against SOPA. Reps Darrell Issa and Nancy Pelosi showed a little bi-partisan common sense and opposed SOPA. Senator Ron Wyden has long been opposed to the Senate version, and offers to read your name during a fillibuster, should it come to that. But why is it so difficult to muster up opposition to a bill that should never have been drafted in the first place?

Money Talks

As Matt Cutts points out, Hollywood is outspending Silicon Valley by an enormous margin. Last count? Companies like Facebook, Amazon, Google and Yahoo that have opposed SOPA and other Internet-damaging legislation spent about $15.1 million this year to lobby Congress, and $14.2 million in 2010.

If you add up 2010 and 2011 contributions/lobbying from Silicon Valley, it barely puts a dent in the $185.5 million spent by the entertainment industry in 2010 alone. Time Warner, Comcast/NBC, RIAA, MPAA, Disney, News Corp, and others have also chipped in about $94 million so far this year.

Cutts is optimistic, saying that SOPA has brought us closer to a "critical mass" of digital natives who rose up to defend the Net. "SOPA galvanized the tech community, from start-ups to venture capitalists to the largest web companies. SOPA was an unexpected shock and a wake-up call. Well, guess what? Now the Internet is awake. And I don't think it's going back to sleep any time soon. We might need to rally again in the near future, but we can do that. The Internet learns fast."

Perhaps. The Internet forgets pretty quick, too. We won this time, at least for now, but don't get cocky.
https://www.readwriteweb.com/enterpr...llows-sopa.php





Wary Of SOPA, Reddit Users Aim To Build A New, Censorship-Free Internet

Users of the social news and community site Reddit don’t like the way the government seems to be muscling in on the Internet. So they plan to build a new one.

Redditors have flocked over the last week to a new subgroup on Reddit.com they’re calling the Darknet Plan–or sometimes Meshnet, as the name seems to still be in flux–with the aim of building a mesh-based version of the Internet that wouldn’t be subject to the control of any corporation or government, with a focus on anonymity, peer-to-peer architecture and strong resistance to censorship.

In the last few days, about 10,000 users have joined the group, and about 200,000 have visited, according to Chris Bresee, the 17-year old Vermonter who founded the project and goes by the name “Wolfeater” on the site. Bresee, a high school senior, created the Darknet Plan more than a year ago, but he attributes the sudden spike in interest to the Stop Online Piracy Act and the awareness of the possibilities of government censorship that the bill has created: If passed in its current form, SOPA would use Domain Name System filtering to effectively disappear infringing sites from the Internet. “I would say the Darknet Plan is driven almost in its entirety by fear of censorship coming out of Congress,” says Bresee, whose Vermont senator Patrick Leahy introduced the precursor to SOPA known as Protect-IP.”That’s what’s driven me, and I think that’s what’s driven the other ten thousand users to join.”

Mesh networks are designed to allow users to connect to one another directly instead of to a centralized Internet service provider. Universities like John Hopkins and Purdue have experimented with building mesh network technologies, and the State Department and the One Laptop Per Child program have both developed their own versions of mesh networks to either circumvent censorship in foreign regimes or, in OLPC’s case, connect users who don’t have access to Internet service providers.

That kind of peer-to-peer networking sounds plausible in a dense urban setting, but becomes vastly harder or impossible when users are miles apart. So Bresee says Meshnet would start by aiming to create local clusters of users and connect them with the traditional Internet. “We would piggyback on the current infrastructure to connect these islands of meshes,” he says. “But as the mesh networks grow, less and less dependence on the ISPs would be needed.”

To get a sense of Meshnetters’ distribution, one user created this map that allows participants to register where they’re located.

Reddit’s leaderless, crowdsourced approach lacks the organization of any university or government group, and for now is hardly more than an abstract cyber-libertarian dream. So far, it’s consisted mostly of engineers within the group passing around technical papers and arguing about what sort of architecture the network will use. But Bresee says Meshnet’s lack of organization is partly the point: to build a fundamentally grassroots system without any government interference or dependence on a university. ”The problem with government projects is that there’s a mistrust of the government,” he says. “We want to connect all these communities, create one network, build it into something that would be more owned by the people than any corporations or government. We want to create an Internet that’s not dependent on the whims of any one group at all.”

You can check out the Darknet Plan’s progress here.
http://www.forbes.com/sites/andygree...free-internet/

For information about the use of WASTE in private networks, please see my thread on The Zer0Share Project – Jack.





The Definitive Post On Why SOPA And Protect IP Are Bad, Bad Ideas
Mike Masnick

There's been plenty of talk (and a ton of posts here on Techdirt) discussing both SOPA (originally E-PARASITE) and PROTECT IP (aka PIPA), but it seemed like it would be useful to create a single, "definitive" post to highlight why both of these bills are extremely problematic and won't do much (if anything) to deal with the issues they're supposed to deal with, but will have massive unintended consequences. I also think it's important to highlight how PIPA is almost as bad as SOPA. Tragically, because SOPA was so bad, some in the entertainment industry have seen it as an opportunity to present PIPA as a "compromise." It is not. Both bills have tremendous problems, and they start with the fact that neither bill will help deal with the actual issues being raised.

That main issue, we're told over and over again, is "piracy" and specifically "rogue" websites. And, let's be clear: infringement is a problem. But the question is what kind of problem is it? Much of the evidence suggests that it's not an enforcement problem and it's not a legal problem. Decades of evidence from around the globe all show the same thing: making copyright law or enforcement stricter does not work. It does not decrease infringement at all -- and, quite frequently, leads to more infringement. That's because the reason that there's infringement in the first place is that consumers are being under-served. Historically, infringement has never been about "free," but about indicating where the business models have not kept up with the technology.

Thus, the real issue is that this is a business model problem. As we've seen over and over and over again, those who embrace what the internet enables, have found themselves to be much better off than they were before. They're able to build up larger fanbases, and to rely on various new platforms and services to make more money.

And, as we've seen with near perfect consistency, the best way, by far, to decrease infringement is to offer awesome new services that are convenient and useful. This doesn't mean just offering any old service -- and it certainly doesn't mean trying to limit what users can do with those services. And, most importantly, it doesn't mean treating consumers like they were criminals and "pirates." It means constantly improving the consumer experience. When that consumer experience is great, then people switch in droves. You can, absolutely, compete with free, and many do so. If more were able to without restriction, infringement would decrease. If you look at the two largest contributors to holding back "piracy" lately, it's been Netflix and Spotify. Those two services alone have been orders of magnitude more successful in decreasing infringement than any new copyright law. Because they compete by being more convenient and a better experience than infringement.

Finally, even if you disagree with all of that, and believe that the problem is enforcement, SOPA and PIPA, won't be effective in dealing with that. The internet always has a way of routing around "damage" no matter how hard people try to stop it, and the approach put forth by these bills is a joke. It's hard to find anyone with technology skills who thinks that they will be effective. Every "blockade" has an easy path around it, and the supposed "anti-circumvention" rule in SOPA will never deal with the more obvious paths around things like DNS blocking (use a different DNS or a perfectly legal foreign VPN system). The private right of action efforts are also mistargeted. They're based on the premise that infringement is done for monetary reasons. It's amusing that just a few years ago, these same industries insisted that music and movie fans never wanted to pay anything any more, but now they're claiming that these same people are paying for cyberlockers all the time? That's simply not credible. And if there's so much money to be made, the studios and labels would be opening their own cyberlockers. Either way, we've watched this game of Whac-a-mole for over a decade. It doesn't work. Every site that is shut down leads to half a dozen new ones that spring up. This is not how you tackle a problem: by making the same mistake made over and over again in the past.

So... SOPA & PIPA don't attack the real problem, do nothing to build up the services that do solve the problem, and won't work from a technological standpoint. And that's just if we look at the what these bills are supposed to do.

The real fear is the massive collateral damage these bills will have to jobs, the economy and innovation.

• The broad definitions in the bill create tremendous uncertainty for nearly every site online. This sounds like hyperbole, but it is not. Defenders of the bill like to claim that it is "narrowly focused" on foreign rogue infringing sites. Nothing could be further from the truth. While PIPA targets only foreign sites, the mechanism by which it does so is to put tremendous compliance and liability on third party service providers in the US. SOPA goes even further in expanding the private right of action to domestic sites as well. We've already seen how such laws can be abused by looking at how frequently false takedown claims are made under the existing DMCA. Of course, under the DMCA, just the content is blocked. Under SOPA all money to a site can be cut off. Under PIPA sites will just end up in court. Or, with both laws, an Attorney General can take action leading US companies to have to effectively act as network nannies trying to keep infringement from being accessible. None of this is good for anyone building a startup company these days. The massive uncertainty around this, combined with the need for a huge legal department sitting in "the garage" as a startup begins, will certainly slow down the pace of innovation in the US, while likely driving it elsewhere.

And the definitions are ridiculously broad. Under SOPA, you can be found "dedicated to the theft of US property" if the core functionality of your site "enables or facilitates" infringement. The core functionality of nearly every internet website that involves user generated content enables and facilitates infringement. The entire internet itself enables or facilitates infringement. Email enables or facilitates infringement. They have significant non-infringing uses as well, but the definition leaves that out entirely. Under SOPA, there's also a risk if you take "deliberate actions to avoid confirming a high probability" of infringement on a site. Of course, it's not at all clear how one takes deliberate actions to avoid taking action. The only way to read this clause from a tech company perspective is that it requires proactive monitoring, which is effectively impossible for a user generated content site. PROTECT IP's definitions are equally broad, again using the "enabling" or "facilitating" language.

• The risk of these broad definitions on perfectly legitimate companies is not theoretical: Defenders of both bills continue to insist that they're only meant to deal with the worst of the worst. If that were really true, the definitions would be a lot tighter and a lot more specific. Even if this is the intention of the authors of both bills, the simple fact is that the very broad definitions in the bill, mean that any entrepreneur today will need to take significant compliance costs just to avoid the possible appearance of fitting the criteria.

Defenders also like to brush off the idea that a bill like this would target something like YouTube. But we know that's not accurate since Viacom is still engaged in a huge lawsuit against YouTube, in which Viacom's claims certainly appear to cover the definitions found in these bills. While it seems unlikely that anyone would try to shut down YouTube completely, given the public outcry it would create, the real fear is what happens to the next YouTube, or just the fear that a rights holder could strike into any company by threatening them under the private rights of action in each bill. It becomes a form of legalized extortion. Threaten to bring action under these bills, and watch tech companies crumble.

And, already there are indications that companies are interested in bringing broad actions for infringement against organizations that most people would consider perfectly legal. Advertising giant GroupM recently asked its entertainment industry customers to compile a list of "sites dedicated to infringement," not unlike what's found under PROTECT IP. Universal Music, Warner Bros. and Paramount were three key providers to that list, which ended up covering a large number of perfectly legitimate sites including the famed Internet Archive (widely recognized as the library for the internet). It also included numerous innovative startups that are frequently used by content creators to get their works out, such as SoundCloud and Vimeo. Even more worrisome, it included a variety of publications and blogs, including Vibe Magazine, the quintessential hip hop and R&B magazine founded by Quincy Jones, as well as Complex, a popular lifestyle magazine recently recognized as one of the most valuable startups in New York.

Even worse, it appears that Universal Music also included the personal website of one of its own top artists, 50Cent. The hiphop star has a personal website as well as a website owned by Universal Music. The personal website is much more popular... and it appeared on the infringement list. Suddenly, you can see how letting companies declare what sites are dedicated to infringement can lead to them looking to stifle speech and competition.

Similarly, Monster Cable, who has stated its support for PROTECT IP, has put together its own list of "rogue sites" and it, rather stunningly, includes sites like eBay, Craigslist, Costco and Sears. It even includes consumer rights groups like Which? in the UK, and various popular shopping search engines like PriceGrabber.

These companies clearly take an expansive view of what constitutes "dedicated to infringement," and have no problem suggesting they would like to stop these sites. Internet companies and site owners have every right to be extremely afraid of what laws like PIPA and SOPA would do when they give much more power to these private companies to take actions that could shut down these sites, tie them up in court or merely cut off their funding and advertising.

• That uncertainty has very real and quantifiable effects on jobs in this country. President Obama has noted that the internet adds approximately $2 trillion to the annual GDP. The amount of jobs created by the tech industry are massive, and represent a large percentage of all new job creation today. IDC has predicted 7.1 million new jobs and 100,000 new businesses created in the next four years from the tech sector. An astounding 3.1 million people are employed thanks to internet advertising -- jobs that simply did not exist a decade ago.

And these jobs go way beyond just the jobs at tech companies themselves. The important thing in tech platforms is not in how many jobs are at those companies, but how many jobs they enable elsewhere. eBay has been said to have empowered 750,000 people to build their own small businesses. Facebook's app platform has, by itself, created somewhere around 200,000 new jobs. It's likely that Apple's iOS app platform has created significantly more than that, given how popular it is. Google's tools have been shown to create $64 billion (with a b) in additional economic activity.

Do we really want to stifle all of that growth and activity with regulations that will stifle innovation and jobs, even (as noted above) as the evidence shows that merely adapting and providing a better service makes everyone better off?

• That uncertainty has extreme and quantifiable effects on investment in new startups. A very detailed look at the uncertainty in the cloud computing space, prior to and after the decision in the Comedy Central v. Cablevision case, which effectively set the framework for the legality of cloud computing, showed much greater investment when the law was clarified to be in favor of letting these new services thrive. Take that away, and investment in this engine of growth likely would be much lower. Considering that politicians claim to be so concerned about the economy and jobs these days, the idea that they would push forth a bill that quantifiably would reduce investment in one of the only sectors creating new jobs is really stunning.

• Broadly expanding secondary liability is a dream for trial lawyers, but will be a disaster for business. There's been a move, associated with these bills to somehow demonize important concepts of safe harbors from secondary liability. The suggestion is that secondary liability somehow "allows" bad activity. Nothing is further from the truth. Illegal activity is still illegal. The point of safe harbors from secondary liability is blaming the party actually doing the action that breaks the law. We don't allow people to sue AT&T because the telephone was used in commission of a crime and we don't sue Ford because someone crashed their pickup truck into another car. Liability should be properly applied to the parties doing the action that breaks the law. The safe harbors have just made that clear -- and allowed innovation to flourish. Empirical studies have pointed out that "the rich informational ecosystem we know today... is a function of the 'breathing space' Internet intermediaries currently have under the law."

Other studies have shown that pulling back on such secondary liability safe harbors would mean that investors would need an astounding 13x to 20x return on investment to make the risk worthwhile. That triples or quadruples the standard risk level that most angel investors deal with.

The key way that both PIPA and SOPA function are to drastically scale back that breathing space, by attaching secondary liability and compliance costs to US companies, in an attempt to keep users from infringing via other sites. That would represent a massive shift in the legal framework that has allowed the internet to flourish, and yet no research or studies have been done to look at the possible impact of all of this.

• The technical measures described in both bills is tremendously problematic. Looking to use DNS blocking is just a bad move. It's why a group of core internet infrastructure experts spoke out very early on (about COICA, in the pre-PIPA days) to explain how DNS blocking would set back a decade or more's worth of work on online security standards, would make people less safe online, and has the risk of fragmenting the internet. It's why the founder of the world's largest independent DNS provider, OpenDNS, in charge of protecting one-third of all schools in the US, has noted that under these laws, he likely wouldn't have started the company, or might have started it in another country.

• Having a judge determine the best network architecture is a bad idea. SOPA's attempt to address the "DNS blocking doesn't work" argument by adding a vague standard in which courts can order sites to take "reasonable measures" to block even more is also not encouraging. Does anyone really think that we want some judges determining what are "reasonable measures" for managing how the internet works? Wouldn't it be better to trust the long line of experts, drop any thought of DNS blocking, and move on?

• Going down the slippery slope of censorship is fraught with peril, both domestically and abroad. Supporters of the law get angry any time people bring up censorship, but as law professor Derek Bambauer has made clear, any effort to block content is a form of censorship. What we can argue is whether or not this form of censorship makes sense or is a policy that people think makes sense. But no one should deny that bills that lead to blocking access to websites is a form of censorship.

There is reasonable debate as to whether or not this level of censorship goes violates the First Amendment. Constitutional scholar Laurence Tribe has argued that it does violate the First Amendment. Well over 100 of the country's top legal scholars have made the same argument. Arguing on the other side is well respected First Amendment lawyer Floyd Abrams... but even he admits that under SOPA and PIPA protected speech would get censored. He just deems that as acceptable collateral damage, as being merely "incidental." We can argue over whether or not it really is incidental, as we've already seen actions against sites under current law that seek to stifle large amounts of protected speech outside of any infringement.

• The functional setup of such site blocking -- via DNS blocking -- is effectively identical to how the Great Firewall of China works. While the intended purpose is obviously different, the actual mechanism for blocking is nearly identical. This creates significant cover for repressive regimes to resist any diplomatic efforts by the US to push back against attempts by the US to promote internet freedom. Furthermore, we have seen how countries, such as Russia, have used copyright law to censor political opposition, using the law to go against activists challenging the government. Even if the intended purpose of SOPA and PIPA are to protect against infringement, opening up the door to censorship for one purpose makes it nearly impossible to avoid it being used for other purposes. It also basically gives the perfect blueprint for repressive regimes. They merely need to claim that their Great Firewalls are designed to stomp out infringement, and then can use it to intimidate and block political opponents. Adding to that is the massive expansion of the diplomatic corp. pushing for greater enforcement, and it's almost as if we're begging countries to set up their own Great Firewalls that will certainly be abused.

• Countries abroad are watching us, and already noting the seeming hypocrisy concerning our statements. Media in other countries, who already are known for suppressing speech and censoring the internet, are already mocking the US for even considering such legislation at the same time as the US State Department claims to be promoting internet freedom. Talking about the importance of internet freedom on the one hand, while pushing countries to put in place the very tools that will be used to undermine internet freedom is not a particularly consistent message. This can be seen in VP Joe Biden's recent speech on internet freedom that presents all the arguments for why SOPA and PIPA should not be supported (in an unintended manner).

• Changing what counts as a felony for copyright, without understanding the implications or common usage of technology puts many at risk. This does not apply directly to PIPA, but its companion legislation in the Senate, S.978. Similar provisions are found in SOPA as well, making certain forms of "streaming" a felony. Supporters of these actions insist that they're merely harmonizing criminal and civil copyright laws, since the felony parts of the criminal copyright statute cover reproduction and distribution, but not performance. What they fail to recognize (or admit) is that there's a reason why performance rights were left out, and it's because it's pretty ridiculous to think of a felony performance in normal contexts. But it becomes even more troublesome in the online context, because "performance" is so vaguely defined in an era when streaming works via a simple one-line embed. To embed a video is no different -- from a technical standpoint -- from linking to a video. And most people would have significant problems with the idea that you could face five years in jail for merely linking to content you have no control over. Yet, the streaming portions of SOPA and of S.978 make that entirely possible. Merely putting a single line of code on a site, pointing to content on another server that you have no control over, potentially makes you a felon. This will have massive unintended consequences and puts at risk millions of Americans who embed videos all the time.

To be honest, there are many, many more problems hidden down within the specifics of the bill, but this post was already getting long enough. However, what we have is a bill that doesn't tackle the real problems at all, that won't solve the problem it thinks it's facing, and has massive unintended consequences. Why? Well, because the entertainment industry insists that it's in trouble. This is the same entertainment industry who has been claiming the same thing about every technological innovation ever. If they'd had their way in the past, there would be no radio, no cable TV, no VCR, no TiVo and no iPods. Do we really trust them now to create a "narrowly focused" law that will only target the really bad behaviors? We'll close it out with a few quotes from the entertainment industry over the last century discussing various technological innovations, and question why we're letting them drive PIPA and SOPA forward:

The Player Piano

“I foresee a marked deterioration in American Music…and a host of other injuries to music in its artistic manifestations by virtue – or rather by vice – of the multiplication of the various music reproducing machines” -- John Philips Sousa, 1906

The Video Cassette Recorder

"But now we are faced with a new and troubling assault on our fiscal security, on our very economic life, and we are facing it from a thing called the Video Cassette Recorder" -- MPAA President Jack Valenti in 1982

Cassette Tapes

"When the manufacturers hand the public a license to record at home...not only will the songwriter tie a noose around his neck, not only will there be no more records to tape, but the innocent public will be made accessory to the destruction of four industries" -- ASCAP, 1982

Digital Audio Tape

The Mp3 Player

“Diamond's product Rio was destined to undermine the creation of a legitimate digital distribution marketplace..." -- RIAA President Hillary Rosen in 1998

The Digital Video Recorder

"It's theft...Any time you skip a commercial or watch the button you're actually stealing the programming." Turner Broadcasting CEO Jaime Kellner in 2002
http://www.techdirt.com/articles/201...ad-ideas.shtml





Dutch Parliament Refuses ACTA Secrecy
Ante

On the same day that the European Parliament had its first secret meeting on ACTA (Anti-Counterfeiting Trade Agreement), the Dutch parliament decided it will not take ACTA into consideration unless all ACTA negotiation texts are published.

A few weeks ago, the Dutch House of Representatives’ committee of Economic Affairs, Agriculture and Innovation requested the ACTA negotiation texts (the earlier versions of ACTA). The minister of Economic Affairs, Agriculture and Innovation, Maxime Verhagen, sent the texts to parliament, adding a non disclosure obligation. In debates, Members of Parliament may not refer to the documents, nor quote from them.

Sunday, Bits of Freedom sent a letter to the committee, asking the committee not to accept the secrecy.

Committee member Kees Verhoeven (D66) proposed a message from the committee to the minister that no substantive treatment of any ACTA document can be made without publication of all relevant documents and above all that the committee can discus all documents in public. According to experts, the treaty has major implications for Dutch legislation (eg on copyright and Internet freedoms) and the House can’t at the moment consult experts nor can it inform the public about ACTA’s consequences, since ACTA is partly confidential. For this reason, the committee also requests the minister not to take irreversible steps, neither in Europe and nor in the Netherlands, in terms of ACTA. And towards the commission itself, the proposal to temporarily withdraw all ACTA related documents from the agenda until the minister discloses all documents.

Bits of Freedom reports a majority in the Dutch House of Representatives (D66, PVV, GroenLinks, SP and PvdA) adopted the proposal.

Meanwhile in Brussels, the European Parliament International Trade committee (INTA) held a highly controversial in-camera meeting to learn what the legal service of the European Parliament thinks of ACTA.

On 9 November, the FFII had send an open letter to the Chairman of the Committee on International Trade (INTA), in which the FFII objected to the planned in-camera meeting on the 23th. On 12 November the INTA chairman defended the secrecy in a letter to the FFII.

7 civil society groups asked for European Parliament transparency on ACTA on the 17th. On Friday the 18th, the Parliament refused to disclose the legal service’s opinion on ACTA, “disclosure would undermine the protection of the public interest as regards international relations”.

On Sunday, the FFII filed a confirmatory application for legal service’s opinion on ACTA. According to the FFII, the argument that disclosure of the opinion would undermine international relations is totally overstretched. The Parliament’s second reason violates the European Court of Justice case law (Turco case), and the third argument lacks substance.

On Monday 21th, sources in Parliament reported the meeting was postponed. But on Wednesday the 23th, the meeting was on.

Henrik Alexandersson, assistant to Christian Engstrom, reports on his blog:

- Controversial INTA meeting on ACTA held in camera today 23 November despite protests from Civil Society.
- Previous decision to postpone the meeting annulled yesterday night by INTA Coordinators.
- Vote on holding the meeting in public was denied.

After 4 European Parliament resolutions asking for ACTA transparency, the Parliament now took the decision to keep the legal service’s opinion confidential. And to meet in-camera.

This whole show will be repeated soon: the Legal Affairs Committee asked for a legal service’s opinion as well.

A partly secret ratification process… How deep do you want to sink?

The European Parliament should take a good look at the Dutch Parliament’s example.
http://acta.ffii.org/?p=924





The Internet Will Get a Peer Review Layer Next Year
Marshall Kirkpatrick

A project lead by some of the most-respected leaders of the Internet has secured $240,000 in funding to build a prototype system for both expert and peer review of all the content on the web, sentence by sentence. Called Hypothes.is, the project is lead by early search engine innovator and climate change activist Dan Whaley and backed by advisors from John Perry Barlow of the EFF to Garret Camp of StumbleUpon to Kaliya Hamlin of the Internet Identity Workshop to Nate Oostendorp of Slashdot, and many more.

We wrote about the Hypothes.is fundraising effort on Kickstarter last month. That effort succeeded, including with a large matching pledge by cleantech and web venture capitalist Sunil Paul. And so Hypothes.is will be built. What do people want out of it and does it stand a chance to change the web? Opinions differ.

Hypothes.is is planned as a peer review system to check, verify and critique content all over the Web - and beyond. "Improving the credibility of the information we consume is humanity's grandest challenge," Whaley says. I can't help but suspect that Whaley's work on climate issues, which are challenging to understand, deeply contentious and of the utmost importance to humanity's future, played a role in his coming to feel this way.

Topic experts will be enlisted in addition to crowdsourcing, a reputation system, browser plug-ins and APIs are on the roadmap and all the data will be stored at the Internet Archive.

It sounds like Google's ill-fated Sidewiki project and countless other startups that have sought to enable annotation of distributed web content, but it also sounds a lot more sophisticated.

Mark Surman, Executive Director of the Mozilla Foundation, is one of the project's advisors and it's not hard to imagine something like this shipping as an optional plug-in for every browser. Google acquired contextual-search plug-in Apture this month and said that functionality like that, highlight a word anywhere to learn a lot more about it, would be baked into the Chrome browser as soon as possible. Why not bake in something like Q&A site Quora, where answers to questions are voted up and down by users and topics are easy to track over time, into every browser regarding every sentence on every web page?

Topic experts could be invited to participate the way that Google did with that Wikipedia-killer project no one even remembers, Knol, but they could also be discovered Quora-like by tracking which users of Hypothes.is got answers voted up the most in reviewing content on a topic in multiple instances.

Expertise may be a subjective matter, though, and is often deeply swayed by persistent participation. Just showing up. Wikipedia, for example, is alleged by some not to be the world's finest, neutrally written encyclopedia, but rather a domain dominated by pushy know-it-all youngsters who bully their way into describing the world in a particular way.

Hypothes.is offers a list of twelve principles that indicate it's already looking out for concerns like this. Those principles include the following:


• Open source, open standards.To the extent practical.

• Work everywhere. Without consent.

• Non profit. Sustained by social enterprise.

• Neutral. Favor no ideological or political positions.

• 100% community moderated. Bottoms up, not top down.

• Merit based. Influence based on track record.

• Pseudonymous. Credibility without public identity.

• International. By design.

• Transparent and audit-able. In systems. In governance.

• Think long-term. Infrastructure for 100 years? Or longer?

• Many formats, many contexts. HTML, PDF, video, books. News, blogs scientific articles, legislation, regulations, Terms of Service, etc.

• Work with the best. Remain humble.

If this works, it sounds great. Imagine having a channel in StumbleUpon that just serves up pages from around the web that have been validated by experts in marine biology, for example.

I can't help but think there will be an enormous user experience challenges, too, though. Most people in the world don't know what a browser is, they Google for Facebook and they fall for phishing and spam often enough to make such tactics extremely profitable. Maybe something like Hypothes.is could help with all that, but it will probably be a challenge to get a critical mass of engagement, too, across the unbounded expanse of content on the web.

How will unpopular opinions fair? That's another question I've got.

None the less, I'm really excited to see how this project unfolds. I've reserved my Hypothes.is username already, so that my reviews of content can appear under my usual handle. Hypothes.is says it aims to have a prototype available early next year.
https://www.readwriteweb.com/archive...r_next_yea.php





Carrier IQ Tries to Censor Research With Baseless Legal Threat
Marcia Hofmann

Last week, security researcher Trevor Eckhart posted an analysis of software produced by Carrier IQ, which describes itself as "the world's leading provider of Mobile Service Intelligence solutions." Eckhart concluded that the software, which comes by default on many mobile devices and runs quietly in the background, logs extensive details about users' activities. Eckhart not only documented the functionality of the software, but learned even more about how it works through training materials posted on the Carrier IQ website. Fearing the company would take the files offline after he posted his analysis, he mirrored the training materials to let others independently verify his conclusions.

Eckhart was right: Carrier IQ immediately made the files unavailable, but it didn't stop there. Carrier IQ fired off a cease-and-desist letter (pdf) to Eckhart, claiming that he infringed its copyrights and made unspecified "false allegations" about its software. Among other things, the company demanded that Eckhart turn over contact information for every person who had obtained the files from him, and that he replace his analysis with a statement—written for him by Carrier IQ—disavowing his research.

Happily, Eckhart was not cowed by this ham-fisted effort to suppress his findings. Instead, he reached out to EFF. We're glad he did. As we explained in a letter (pdf) to Carrier IQ today, Eckhart's research is protected by fair use and the First Amendment right to free expression. He posted the training materials to teach the public about software that many consumers don't know about, even though it monitors their everyday activities and raises substantial privacy concerns. As the Copyright Act says, "the fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting . . . or research, is not an infringement of copyright." Furthermore, Eckhart's analysis is just the kind of speech that that the First Amendment is meant to protect—public commentary that will help consumers better understand the products they use and help researchers investigate those products.

Given the weakness of its legal position, we have to conclude that Carrier IQ's real goal is to suppress Eckhart’s research and prevent others from verifying his findings. But as we've long said, the best way to counter speech you don't like is more speech—not baseless legal threats to silence your critics. Carrier IQ didn't get the memo on this. (Nor, apparently, has it heard of the Streisand Effect.) Hopefully it has now.

Attached Documents
eckhart_c&d_response.pdf
eckhart_cease_desist_demand_redacted.pdf

https://www.eff.org/deeplinks/2011/1...s-legal-threat





Carrier IQ Drops Empty Legal Threat, Apologizes to Security Researcher
Marcia Hofmann

Today mobile software company Carrier IQ withdrew (pdf) a bogus legal threat to a security researcher who published an analysis of the company's software, as well as training materials on which he based his research.

Last week, Trevor Eckhart published a detailed article pointing out that Carrier IQ's software logs a great deal of information about users' activities without their knowledge. Attempting to suppress his research, Carrier IQ fired off a baseless cease-and-desist demand (pdf) claiming that Eckhart infringed the company's copyrights and made "false allegations" about their software.

Eckhart reached out to EFF for help, and we helped him push back against the unfounded threat. As EFF explained in a letter (pdf) to Carrier IQ on Monday, Eckhart's research and commentary is protected by fair use and the First Amendment right to free expression.

We're pleased that Eckhart gave us an opportunity to help him fend off this attempt to censor his findings and shut down public discussion about important privacy concerns. We also hope this incident will serve as an example to others who would misuse the law to squelch legitimate research and criticism.
Attached Documents
Marcia Hoffman Fax 11.23.11.pdf
https://www.eff.org/deeplinks/2011/1...ity-researcher





License Plate Scanners Logging Our Every Move

The Washington Post reported on Sunday that the District of Columbia is engaging in widespread tracking of citizen’s movements using automated license plate readers (ALPRs). According to the Post, the D.C. police:

• Are running more than one ALPR per square mile;
• Are planning on sharply increasing the density of these devices until they form a “comprehensive dragnet;”
• Retain the time/date/location/tag number even of innocent people for whom nothing is found to be wrong;
• Store that data in a database for three years.

It has now become clear that this technology, if we do not limit its use, will represent a significant step toward the creation of a surveillance society in the United States.

The first we heard of this technology was in a March 2002 piece in The Boston Globe with the headline “Parking Enforcement on a Roll.” At that time, the technology was being deployed to scan parking lots for licenses associated with unpaid parking tickets and other fines. As we said at the time as we began to get questions about the technology, we don’t have any fundamental objections to the technology itself — after all, a police officer could manually phone in all the tags in a parking lot to check for unpaid tickets, and this just did the same thing in a quicker, more efficient way. Sometimes the speed and efficiency of computers does fundamentally change the nature of surveillance compared to non-computerized equivalents — as with GPS tracking, for example. Quantity can change quality. But checking for unpaid tickets and stolen cars does not affect the innocent, so this did not seem to us to be a problem — as long, we said, as the police do not retain location data about innocent people where nothing is found to be wrong.

Our main concern was that the technology not grow into a means for the constant, routine tracking of Americans and their whereabouts. Sometimes when we say things like that, we’re accused of being paranoid. But I am always amazed by the speed and consistency with which our worst fears for these kinds of technologies turn into reality.

Clearly this technology is rapidly approaching the point where it could be used to reconstruct the entire movements of any individual vehicle. As we have argued in the context of GPS tracking (and as I said to the Post reporter) that level of intrusion on private life is something that the police should not be able to engage in without a warrant.

The Post article cites a number of examples in which the technology has proven useful to police. Of course, if the police track all of us all the time, there is no doubt that will help to solve some crimes — just as it would no doubt help solve some crimes if they could read everybody’s e-mail and install cameras in everybody’s homes. But in a free society, we don’t let the police watch over us just because we might do something wrong. That is not the balance struck by our Constitution and is not the balance we should strike in our policymaking.

Finally, technologies that have such significant implications for our privacy — and more broadly, what kind of society we want to live in — should not be put in place through what I call “procurement policymaking.” The police should not be able to run out and buy a new technology and put it in place before anybody realizes what’s going on — before society has a chance to discuss and debate it and consider where we want to draw the lines between police power and the freedom to live a private life. That decision is one that should be made through the full, open, democratic process — not quietly and unilaterally by police departments.
http://www.aclu.org/blog/technology-...our-every-move





Document Trove Exposes Surveillance Methods
Jennifer Valentino-Devries, Julia Angwin and Steve Stecklow

Documents obtained by The Wall Street Journal open a rare window into a new global market for the off-the-shelf surveillance technology that has arisen in the decade since the terrorist attacks of Sept. 11, 2001.

The techniques described in the trove of 200-plus marketing documents, spanning 36 companies, include hacking tools that enable governments to break into people's computers and cellphones, and "massive intercept" gear that can gather all Internet communications in a country. The papers were obtained from attendees of a secretive surveillance conference held near Washington, D.C., last month.

Stewart Baker, the former assistant secretary for Homeland Security, talks with WSJ's Julia Angwin about the need for balancing privacy rights with security concerns and explains why privacy may one day be a luxury available to the privileged and the rich.

Intelligence agencies in the U.S. and abroad have long conducted their own surveillance. But in recent years, a retail market for surveillance tools has sprung up from "nearly zero" in 2001 to about $5 billion a year, said Jerry Lucas, president of TeleStrategies Inc., the show's operator.

Critics say the market represents a new sort of arms trade supplying Western governments and repressive nations alike. "The Arab Spring countries all had more sophisticated surveillance capabilities than I would have guessed," said Andrew McLaughlin, who recently left his post as deputy chief technology officer in the White House, referring to the Middle Eastern and African nations racked by violent crackdowns on dissent.

The Journal this year uncovered an Internet surveillance center installed by a French firm in Libya and reported that software made by Britain's Gamma International UK Ltd., had been used in Egypt to intercept dissidents' Skype conversations. In October, a U.S. company that makes Internet-filtering gear acknowledged to the Journal that its devices were being used in Syria.

Companies making and selling this gear say it is intended to catch criminals and is available only to governments and law enforcement. They say they obey export laws and aren't responsible for how the tools are used.

Trade-show organizer Mr. Lucas added that his event isn't political. "We don't really get into asking, 'Is this in the public interest?'" he said.

TeleStrategies holds ISS World conferences world-wide. The one near Washington, D.C., caters mainly to U.S., Canadian, Caribbean and Latin American authorities. The annual conference in Dubai has long served as a chance for Middle Eastern nations to meet companies hawking surveillance gear.

The global market for off-the-shelf surveillance technology has taken off in the decade since 9/11. WSJ's Jennifer Valentino-DeVries explains some of the new methods governments and law enforcement are using to monitor people.

Many technologies at the Washington-area show related to "massive intercept" monitoring, which can capture vast amounts of data. Telesoft Technologies Ltd. of the U.K. touted its device in its documents as offering "targeted or mass capture of 10s of thousands of simultaneous conversations from fixed or cellular networks." Telesoft declined to comment.

California-based Net Optics Inc., whose tools make monitoring gear more efficient, presented at the show and offers a case study on its website that describes helping a "major mobile operator in China" conduct "real-time monitoring" of cellphone Internet content. The goal was to help "analyze criminal activity" as well as "detect and filter undesirable content," the case study says.

Net Optics' CEO, Bob Shaw, said his company follows "to the letter of the law" U.S. export regulations. "We make sure we're not shipping to any countries that are forbidden or on the embargo list," he said in an interview.

Among the most controversial technologies on display at the conference were essentially computer-hacking tools to enable government agents to break into people's computers and cellphones, log their keystrokes and access their data. Although hacking techniques are generally illegal in the U.S., law enforcement can use them with an appropriate warrant, said Orin Kerr, a professor at George Washington University Law School and former computer-crime attorney at the Justice Department.

The documents show that at least three companies—Vupen Security SA of France, HackingTeam SRL of Italy and Gamma's FinFisher—marketed their skill at the kinds of techniques often used in "malware," the software used by criminals trying to steal people's financial or personal details. The goal is to overcome the fact that most surveillance techniques are "useless against encryption and can't reach information that never leaves the device," Marco Valleri, offensive-security manager at HackingTeam, said in an interview. "We can defeat that."

Representatives of HackingTeam said they tailor their products to the laws of the country where they are being sold. The firm's products include an auditing system that aims to prevent misuse by officials. "An officer cannot use our product to spy on his wife, for example," Mr. Valleri said.

Mr. Valleri said HackingTeam asks government customers to sign a license in which they agree not to provide the technology to unauthorized countries.

Vupen, which gave a presentation at the conference on "exploiting computer and mobile vulnerabilities for electronic surveillance," said its tools take advantage of security holes in computers or cellphones that manufacturers aren't yet aware of. Vupen's marketing documents describe its researchers as "dedicated" to finding "unpatched vulnerabilities" in software created by Microsoft Corp., Apple Inc. and others. On its website, the company offered attendees a "free Vupen exploit sample" that relied on an already-patched security hole.

Vupen says it restricts its sales to Australia, New Zealand, members and partners of the North Atlantic Treaty Organization and the Association of Southeast Asian Nations. The company says it won't sell to countries subject to international embargoes, and that its research must be used for national-security purposes only and in accordance with ethical practices and applicable laws.

The documents for FinFisher, a Gamma product, say it works by "sending fake software updates for popular software." In one example, FinFisher says intelligence agents deployed its products "within the main Internet service provider of their country" and infected people's computers by "covertly injecting" FinFisher code on websites that people then visited.

The company also claims to have allowed an intelligence agency to trick users into downloading its software onto BlackBerry mobile phones "to monitor all communications, including [texts], email and BlackBerry Messenger." Its marketing documents say its programs enable spying using devices and software from Apple, Microsoft, and Google Inc., among others. FinFisher documents at the conference were offered in English, Arabic and other languages.

A Google spokesman declined to comment on FinFisher specifically, adding that Google doesn't "tolerate abuse of our services."

An Apple spokeswoman said the company works "to find and fix any issues that could compromise [users'] systems." Apple on Monday introduced a security update to iTunes that could stop an attack similar to the type FinFisher claims to use, namely offering bogus software updates that install spyware.

Microsoft and Research In Motion Ltd., which makes BlackBerry devices, declined to comment.

The documents discovered in Egypt earlier this year indicated that Gamma's Egyptian reseller was offering FinFisher systems there for about $560,000. Gamma's lawyer told the Journal in April that it never sold the products to Egypt's government.

Gamma didn't respond to requests for comment for this article. Like most companies interviewed, Gamma declined to disclose its buyers, citing confidentiality agreements.

Privacy advocates say manufacturers should be more transparent about their activities. Eric King of the U.K. nonprofit Privacy International said "the complex network of supply chains and subsidiaries involved in this trade allows one after the other to continually pass the buck and abdicate responsibility." Mr. King routinely attends surveillance-industry events to gather information on the trade.

At the Washington and Dubai trade conferences this year, which are generally closed to the public, Journal reporters were prevented by organizers from attending sessions or entering the exhibition halls. February's Dubai conference took place at a time of widespread unrest elsewhere in the region. Nearly 900 people showed up, down slightly because of the regional turmoil, according to an organizer.

Presentations in Dubai included how to intercept wireless Internet traffic, monitor social networks and track cellphone users. "All of the companies involved in lawful intercept are trying to sell to the Middle East," said Simone Benvenuti, of RCS SpA, an Italian company that sells monitoring centers and other "interception solutions," mostly to governments. He declined to identify any clients in the region.

In interviews in Dubai, executives at several companies said they were aware their products could be abused by authoritarian regimes but they can't control their use after a sale. "This is the dilemma," said Klaus Mochalski, co-founder of ipoque, a German company specializing in deep-packet inspection, a powerful technology that analyzes Internet traffic. "It's like a knife. You can always cut vegetables but you can also kill your neighbor." He referred to it as "a constant moral, ethical dilemma we have."
—Paul Sonne contributed to this article.
http://online.wsj.com/article/SB1000...607407780.html





Palantir, the War on Terror's Secret Weapon

A Silicon Valley startup that collates threats has quietly become indispensable to the U.S. intelligence community
Ashlee Vance and Brad Stone

In October, a foreign national named Mike Fikri purchased a one-way plane ticket from Cairo to Miami, where he rented a condo. Over the previous few weeks, he’d made a number of large withdrawals from a Russian bank account and placed repeated calls to a few people in Syria. More recently, he rented a truck, drove to Orlando, and visited Walt Disney World by himself. As numerous security videos indicate, he did not frolic at the happiest place on earth. He spent his day taking pictures of crowded plazas and gate areas.

None of Fikri’s individual actions would raise suspicions. Lots of people rent trucks or have relations in Syria, and no doubt there are harmless eccentrics out there fascinated by amusement park infrastructure. Taken together, though, they suggested that Fikri was up to something. And yet, until about four years ago, his pre-attack prep work would have gone unnoticed. A CIA analyst might have flagged the plane ticket purchase; an FBI agent might have seen the bank transfers. But there was nothing to connect the two. Lucky for counterterror agents, not to mention tourists in Orlando, the government now has software made by Palantir Technologies, a Silicon Valley company that’s become the darling of the intelligence and law enforcement communities.

The day Fikri drives to Orlando, he gets a speeding ticket, which triggers an alert in the CIA’s Palantir system. An analyst types Fikri’s name into a search box and up pops a wealth of information pulled from every database at the government’s disposal. There’s fingerprint and DNA evidence for Fikri gathered by a CIA operative in Cairo; video of him going to an ATM in Miami; shots of his rental truck’s license plate at a tollbooth; phone records; and a map pinpointing his movements across the globe. All this information is then displayed on a clearly designed graphical interface that looks like something Tom Cruise would use in a Mission: Impossible movie.

As the CIA analyst starts poking around on Fikri’s file inside of Palantir, a story emerges. A mouse click shows that Fikri has wired money to the people he had been calling in Syria. Another click brings up CIA field reports on the Syrians and reveals they have been under investigation for suspicious behavior and meeting together every day over the past two weeks. Click: The Syrians bought plane tickets to Miami one day after receiving the money from Fikri. To aid even the dullest analyst, the software brings up a map that has a pulsing red light tracing the flow of money from Cairo and Syria to Fikri’s Miami condo. That provides local cops with the last piece of information they need to move in on their prey before he strikes.

Fikri isn’t real—he’s the John Doe example Palantir uses in product demonstrations that lay out such hypothetical examples. The demos let the company show off its technology without revealing the sensitive work of its clients. Since its founding in 2004, the company has quietly developed an indispensable tool employed by the U.S. intelligence community in the war on terrorism. Palantir technology essentially solves the Sept. 11 intelligence problem. The Digital Revolution dumped oceans of data on the law enforcement establishment but provided feeble ways to make sense of it. In the months leading up to the 2001 attacks, the government had all the necessary clues to stop the al Qaeda perpetrators: They were from countries known to harbor terrorists, who entered the U.S. on temporary visas, had trained to fly civilian airliners, and purchased one-way airplane tickets on that terrible day.

An organization like the CIA or FBI can have thousands of different databases, each with its own quirks: financial records, DNA samples, sound samples, video clips, maps, floor plans, human intelligence reports from all over the world. Gluing all that into a coherent whole can take years. Even if that system comes together, it will struggle to handle different types of data—sales records on a spreadsheet, say, plus video surveillance images. What Palantir (pronounced Pal-an-TEER) does, says Avivah Litan, an analyst at Gartner, is “make it really easy to mine these big data sets.” The company’s software pulls off one of the great computer science feats of the era: It combs through all available databases, identifying related pieces of information, and puts everything together in one place.

Depending where you fall on the spectrum between civil liberties absolutism and homeland security lockdown, Palantir’s technology is either creepy or heroic. Judging by the company’s growth, opinion in Washington and elsewhere has veered toward the latter. Palantir has built a customer list that includes the U.S. Defense Dept., CIA, FBI, Army, Marines, Air Force, the police departments of New York and Los Angeles, and a growing number of financial institutions trying to detect bank fraud. These deals have turned the company into one of the quietest success stories in Silicon Valley—it’s on track to hit $250 million in sales this year—and a candidate for an initial public offering. Palantir has been used to find suspects in a case involving the murder of a U.S. Immigration and Customs Enforcement special agent, and to uncover bombing networks in Syria, Afghanistan, and Pakistan. “It’s like plugging into the Matrix,” says a Special Forces member stationed in Afghanistan who requested anonymity out of security concerns. “The first time I saw it, I was like, ‘Holy crap. Holy crap. Holy crap.’ ”

Palantir’s engineers fill the former headquarters of Facebook along University Avenue in the heart of Palo Alto’s main commercial district. Over the past few years, Palantir has expanded to four other nearby buildings as well. Its security people—who wear black gloves and Secret Service-style earpieces—often pop out of the office to grab their lunch, making downtown Palo Alto feel, at times, a bit like Langley.

Inside the offices, sweeping hand-drawn murals fill the walls, depicting tributes to Care Bears and the TV show Futurama. On one floor, a wooden swing hangs from the ceiling by metal chains, while Lord of the Rings knickknacks sit on desks. T-shirts with cutesy cartoon characters are everywhere, since the engineers design one for each new version of their software. Of late, they’ve run out of Care Bears to put on the shirts and moved on to My Little Ponies.

The origins of Palantir go back to PayPal, the online payments pioneer founded in 1998. A hit with consumers and businesses, PayPal also attracted criminals who used the service for money laundering and fraud. By 2000, PayPal looked like “it was just going to go out of business” because of the cost of keeping up with the bad guys, says Peter Thiel, a PayPal co-founder.

The antifraud tools of the time could not keep up with the crooks. PayPal’s engineers would train computers to look out for suspicious transfers—a number of large transactions between U.S. and Russian accounts, for example—and then have human analysts review each flagged deal. But each time PayPal cottoned to a new ploy, the criminals changed tactics. The computers would miss these shifts, and the humans were overwhelmed by the explosion of transactions the company handled.

PayPal’s computer scientists set to work building a software system that would treat each transaction as part of a pattern rather than just an entry in a database. They devised ways to get information about a person’s computer, the other people he did business with, and how all this fit into the history of transactions. These techniques let human analysts see networks of suspicious accounts and pick up on patterns missed by the computers. PayPal could start freezing dodgy payments before they were processed. “It saved hundreds of millions of dollars,” says Bob McGrew, a former PayPal engineer and the current director of engineering at Palantir.

After EBay acquired PayPal in 2002, Thiel left to start a hedge fund, Clarium Capital Management. He and Joe Lonsdale, a Clarium executive who’d been a PayPal intern, decided to turn PayPal’s fraud detection into a business by building a data analysis system that married artificial intelligence software with human skills. Washington, they guessed, would be a natural place to begin selling such technology. “We were watching the government spend tens of billions on information systems that were just horrible,” Lonsdale says. “Silicon Valley had gotten to be a lot more advanced than government contractors, because the government doesn’t have access to the best engineers.”

Thiel, Lonsdale, and a couple of former colleagues officially incorporated Palantir in 2004. Thiel originally wanted to hire a chief executive officer from Washington who could navigate the Byzantine halls of the military-industrial complex. His co-founders resisted and eventually asked Alex Karp, an American money manager living in Europe who had been helping raise money for Clarium, to join as temporary CEO.

It was an unlikely match. Before joining Palantir, Karp had spent years studying in Germany under Jürgen Habermas, the most prominent living representative of the Frankfurt School, the group of neo-Marxist philosophers and sociologists. After getting a PhD in philosophy from the University of Frankfurt—he also has a degree from Stanford Law School—Karp drifted from academia and dabbled in stocks. He proved so good at it that, with the backing of a handful of European billionaires, he set up a money management firm called the Caedmon Group. His intellect, and ability to solve a Rubik’s Cube in under a minute, commands an awed reverence around the Palantir offices, where he’s known as Dr. Karp.

In the early days, Palantir struggled to sell its message and budding technology to investors. Big-name venture capital firms such as Kleiner Perkins Caufield & Byers, Sequoia Capital, and Greylock Partners all passed. Lonsdale says one investor, whom he won’t name, actually started laughing on the phone at Karp’s nonbusiness academic credentials. Overlooked by the moneyed institutions on Sand Hill Road, Thiel put up the original funds before enticing In-Q-Tel, the investment arm of the CIA, to invest as well. Karp says the reason VC firms “passed was that enterprise technology was not hot. And the government was, and still is, anti-hot.”

Michael E. Leiter, the former head of the National Counterterrorism Center, recalls being skeptical when Karp arrived to sell Palantir’s system to the NCTC, created by President George W. Bush after the attacks. “There’s Karp with his hair and his outfit—he doesn’t look like me or the other people that work for me,” he says. But Leiter soon discovered that Palantir’s software cost a fraction of competing products and actually worked. Palantir not only made the connections between the data sets but also drew inferences based on the clues and empowered the analysts. Leiter is now a Palantir consultant.

At 44, Karp has a thin, sinewy physique—the result of a strict 1,200-calorie-a-day diet—and an angular face that gives way to curly brown, mad-scientist hair. On a November visit at Palantir’s headquarters, he’s wearing purple pants and a blue and orange athletic shirt. As he does every day, he walked to work. “I never learned to drive because I was busy reading, doing things, and talking to people,” he says. “And I’m coordinated enough to bike, but the problem is that I will start dreaming about the business and run into a tree.”

During the era of social networks, online games, and Web coupons, Karp and his engineers have hit on a grander mission. “Our primary motivation,” Karp says, “is executing against the world’s most important problems in this country and allied countries.” That’s an unusual pitch in Silicon Valley, where companies tend to want as little to do with Washington as possible and many of the best engineers flaunt their counterculture leanings.

Palantir’s name refers to the “seeing stones” in Lord of the Rings that provide a window into other parts of Middle-earth. They’re magical tools created by elves that can serve both good and evil. Bad wizards use them to keep in touch with the overlord in Mordor; good wizards can peer into them to check up on the peaceful, innocent Hobbits of the Shire. As Karp explains with a straight face, his company’s grand, patriotic mission is to “protect the Shire.”

Most of Palantir’s government work remains classified, but information on some cases has trickled out. In April 2010, security researchers in Canada used Palantir’s software to crack a spy operation dubbed Shadow Network that had, among other things, broken into the Indian Defense Ministry and infiltrated the Dalai Lama’s e-mail account. Palantir has also been used to unravel child abuse and abduction cases. Palantir “gives us the ability to do the kind of link-and-pattern analysis we need to build cases, identify perpetrators, and rescue children,” says Ernie Allen, CEO of the National Center for Missing and Exploited Children. The software recently helped NCMEC analysts link an attempted abduction with previous reports of the suspect to the center’s separate cyber-tip line—and plot that activity on a map. “We did it within 30 seconds,” Allen says. “It is absolutely a godsend for us.”

In Afghanistan, U.S. Special Operations Forces use Palantir to plan assaults. They type a village’s name into the system and a map of the village appears, detailing the locations of all reported shooting skirmishes and IED, or improvised explosive device, incidents. Using the timeline function, the soldiers can see where the most recent attacks originated and plot their takeover of the village accordingly. The Marines have spent years gathering fingerprint and DNA evidence from IEDs and tried to match that against a database of similar information collected from villagers. By the time the analysis results came back, the bombers would be long gone. Now field operatives are uploading the samples from villagers into Palantir and turning up matches from past attacks on the spot, says Samuel Reading, a former Marine who works in Afghanistan for NEK Advanced Securities Group, a U.S. military contractor. “It’s the combination of every analytical tool you could ever dream of,” Reading says. “You will know every single bad guy in your area.”

Palantir has found takers for its data mining system closer to home, too. Wall Street has been particularly receptive. Every year, the company holds a conference to promote its technology, and the headcount swelled from about 50 people at past events to 1,000 at the most recent event in October. “I saw bankers there that don’t go to any other conferences,” says Gartner’s Litan. The banks have set Palantir’s technology loose on their transaction databases, looking for fraudsters, trading insights, and even new ways to price mortgages. Guy Chiarello, chief information officer for JPMorgan Chase, says Palantir’s technology turns “data landfills into gold mines.” The bank has a Palantir system for fraud detection and plans to use the technology to better tailor marketing campaigns to consumers. “Google unlocked the Internet with its search engine,” Chiarello says. “I think Palantir is on the way to doing a similar thing inside the walls of corporate data.”

One of the world’s largest banks has used Palantir software to break up a popular scam called BustOut. Criminals will steal or purchase access to thousands of people’s online identities, break into their bank and credit-card accounts, then spend weeks watching. Once they spot a potential victim purchasing a plane ticket or heading out on a holiday, they siphon money out of the accounts as fast as they can while the mark is in transit. The criminals hide their trails by anonymizing their computing activity and disabling alert systems in the bank and credit-card accounts. When the bank picks up on a few compromised accounts, it uses Palantir to uncover the network of thousands of other accounts that have to be tapped.

A Palantir deal can run between $5 million and $100 million. The company asks for 20 percent of that money up front and the rest only if the customer is satisfied at the end of the project. Typically, it’s competing against the likes of Raytheon, Lockheed Martin, Northrop Grumman, and IBM, along with a scattering of less prominent data mining startups. “We can be up and running in a bank in eight weeks,” Karp says. “You will be getting results right away instead of waiting two to three years with our competitors.”

Palantir has been doubling headcount every year to keep up with business. To get a job at the company, an applicant must pass a gauntlet of brain teasers. An example: You have 25 horses and can race them in heats of 5. You know the order the horses finished in, but not their times. How many heats are necessary to find the fastest? First and second? First, second, and third? (Answers: six, seven, and seven.) If candidates are able to prove themselves as what Karp calls “a software artist,” they’re hired. The company gives new arrivals some reading material, including a guide to improvisational acting, a lecture by the entrepreneur Steve Blank on Silicon Valley’s secret history with the military, and the book The Looming Tower: Al-Qaeda and the Road to 9/11. They’re also rewarded with a low wage by Silicon Valley standards: Palantir caps salaries at $127,000.

Instead of traditional salespeople, Palantir has what it calls forward deployed engineers. These are the sometimes awkward computer scientists most companies avoid putting in front of customers. Karp figures that engineers will always tell the truth about the pros and cons of a product, know how to solve problems, and build up a strong reputation with customers over time. “If your life or your economic future is on the line,” he says, “and there is one company where people are maybe kind of suffering from Asperger’s syndrome, but they have always been accurate, you end up trusting them.”

The director of these forward deployed engineers is Shyam Sankar, a Palantir veteran. In his corner office there’s a Shamu stuffed animal, an antique Afghan rifle hanging overhead, and a 150-year-old bed frame decorated with a wild, multicolored comforter. The bed comes in handy during an annual team-building exercise: For one week, employees live in the Palantir offices; the bedless make shantytown houses out of cardboard boxes. Sankar celebrates Palantir’s mix of office frivolity and low salaries. “We will feed you, clothe you, let you have slumber parties, and nourish your soul,” he says. “But this is not a place to come to get cash compensation.”

Like many of the young engineers, Sankar recounts a personal tale that explains his patriotic zeal. When he was young, his parents moved from India to Nigeria, where Sankar’s father ran a pharmaceutical plant. One night, burglars broke into their home, pistol-whipped his dad, and stole some valuables. After that traumatic event, the family moved to Florida and started over, selling T-shirts to theme parks. “To come to a place and not have to worry about such bad things instilled a sense of being grateful to America,” Sankar says. “I know it sounds corny, but the idea here is to save the Shire.”

Karp acknowledges that to outsiders, Palantir’s Middle-earth-meets-National Security Agency culture can seem a bit much. “One of my investors asked me, ‘Is this a company or a cult?’ ” he says. “Well, I don’t seem to be living like a cult leader.” Then he begins a discourse on how Palantir’s unusual ways serve the business. “I tend to think the critiques are true,” Karp says. “To make something work, it cannot be about the money. I would like to believe we have built a culture that is about a higher purpose that takes the form of a company. I think the deep character anomalies of the company are the reasons why the numbers are so strong.”

Using Palantir technology, the FBI can now instantly compile thorough dossiers on U.S. citizens, tying together surveillance video outside a drugstore with credit-card transactions, cell-phone call records, e-mails, airplane travel records, and Web search information. Christopher Soghoian, a graduate fellow at the Center for Applied Cybersecurity in the School of Informatics and Computing at Indiana University, worries that Palantir will make these agencies ever hungrier consumers of every piece of personal data. “I don’t think Palantir the firm is evil,” he says. “I think their clients could be using it for evil things.”

Soghoian points out that Palantir’s senior legal adviser, Bryan Cunningham, authored an amicus brief three years ago supporting the Bush Administration’s position in the infamous warrantless wiretapping case and defended its monitoring domestic communication without search warrants. Another event that got critics exercised: A Palantir engineer, exposed by the hacker collective Anonymous earlier this year for participating in a plot to break into the PCs of WikiLeaks supporters, was quietly rehired by the company after being placed on leave.

Karp stresses that Palantir has developed some of the most sophisticated privacy protection technology on the market. Its software creates audit trails, detailing who has seen certain pieces of information and what they’ve done with it. Palantir also has a permission system to make sure that workers in agencies using its software can access only the data that their clearance levels allow. “In the pre-Palantir days, analysts could go into file cabinets and read whatever they want,” says former NCTC director Leiter. “Nobody had any idea what they had seen.” Soghoian scoffs at the privacy-protecting features Palantir builds into its software. “If you don’t think the NSA can disable the piece of auditing functionality, you have to be kidding me,” he says. “They can do whatever they want, so it’s ridiculous to assume that this audit trail is sufficient.”

Thiel, who sits on the board and is an avowed libertarian, says civil liberties advocates should welcome Palantir. “We cannot afford to have another 9/11 event in the U.S. or anything bigger than that,” he says. “That day opened the doors to all sorts of crazy abuses and draconian policies.” In his view, the best way to avoid such scenarios in the future would be to provide the government the most cutting-edge technology possible and build in policing systems to make sure investigators use it lawfully.

After Washington and Wall Street, Karp says the company may turn its attention to health care, retail, insurance, and biotech. The thinking is that Palantir’s technology can illuminate health insurance scams just as well as it might be able to trace the origin of a virus outbreak. Despite all this opportunity, and revenue that is tripling every year, Karp insists that Palantir will remain grounded. An IPO, while not out of the question, “dilutes nonmonetary motivation,” he says.

One higher purpose in the coming year will be rescuing strapped companies and government bodies from the brink of financial ruin. Karp lists fraud, Internet security issues, Europe’s financial woes, and privacy concerns as possible drivers for Palantir’s business. For anyone in peril, the message is clear: Give us a signal and a forward deployed engineer will be at your doorstep. “There are some people out there that don’t think to pick up the phone and call us,” Karp says. “By next year, many of those people will.”
http://www.businessweek.com/magazine...-11222011.html





Spyhunting US Pols to Crawl Up Huawei and ZTE's Ass

Ex-FBI congressman burnishes microscope
Brid-Aine Parnell

US lawmakers have launched an investigation into the threat of cyber espionage from Chinese telecoms firms operating in the US, singling out Huawei and ZTE.

The House of Representatives committee on intelligence said yesterday that it was focused on the threat to America's security and critical infrastructure coming from "the expansion of Chinese-owned telecommunications companies - including Huawei and ZTE - into our telecommunications infrastructure".

According to the committee, the probe will be looking at "the extent to which" the companies give the Chinese government the opportunity to spy on the US, whether for political or economic reasons and how much of a threat to critical infrastructure the firms are. Which doesn't seem to offer much chance of the investigation maybe finding that the companies aren't at all involved in spying.

“The fact that our critical infrastructure could be used against us is of serious concern,” Republican congressman and committee chairman Mike Rogers said in a canned statement. “We are looking at the overall infrastructure threat and Huawei happens to be the 800 pound gorilla in the room, but there are other companies that will be included in the investigation as well."

"As the formal investigation begins, I stand by my caution to the American business community about engaging Huawei technology until we can fully determine their motives,” he added.

The investigation comes shortly after an intelligence report presented to Congress alleged that Russia and China are using cyber espionage to steal US economic secrets, a charge China subsequently denied.

"Chinese actors are the world’s most active and persistent perpetrators of economic espionage. US private sector firms and cybersecurity specialists have reported an onslaught of computer network intrusions that have originated in China, but the intelligence community cannot confirm who was responsible," the Office of the National Counterintelligence Executive said in the report.

Following media coverage of the report, Chinese Foreign Ministry spokesman Hong Lei told a daily news briefing that accusing the country of cyber attacks without an investigation was "both unprofessional and irresponsible".

"I hope the international community can abandon prejudice and work hard with China to maintain online security," he added.

Rogers, who is a former FBI agent, said yesterday that the committee "already knows the Chinese are aggressively hacking into our nation's networks … and stealing secrets worth millions of dollars in intellectual property".

A Huawei spokesperson told The Register in an email that the integrity of its gear had been proven by deployment by 45 of the top 50 telecoms service providers around the world "without security incident".

"We acknowledge that network security concerns are very real and we welcome an open and fair investigation, whether by Congressional Committee or otherwise, focused on concerns raised by the interdependent global supply chain used by virtually every telecommunications equipment manufacturer providing solutions in the US and elsewhere," the firm said.

A ZTE statement said: "ZTE is wholly committed to transparency and will cooperate in addressing any inquiries regarding our business. Our company is publicly traded with operations in more than 140 countries and we are confident a fair review will further demonstrate that ZTE is a trustworthy and law-abiding partner for all US carriers and their customers."
http://www.theregister.co.uk/2011/11...e_telco_firms/





Confusion Center: Feds Now Say Hacker Didn’t Destroy Water Pump
Kim Zetter

A report from an Illinois intelligence fusion center saying that a water utility was hacked cannot be substantiated, according to an announcement released Tuesday by the Department of Homeland Security.

Additionally, the department disputes assertions in the fusion center report that an infrastructure-control software vendor was hacked prior to the water utility intrusion in order to obtain user names and passwords to break into the utility company and destroy a water pump.

The DHS notice, released late Tuesday, asserts that information released by the Illinois Statewide Terrorism and Intelligence Center earlier this month about the water pump was based on raw and unconfirmed data, implying that it should never have been made public.

But Joe Weiss, a control system expert who first reported the information from the fusion report, is skeptical of the new claim by the government that the report was all wrong.

“This smells to high holy heaven, because when you look at the Illinois report, nowhere was the word preliminary ever used,” Weiss said, noting that the fusion center — which is composed of Illinois state police, as well as representatives from the FBI and DHS — distributed the report to other critical infrastructure facilities in that state. “It was just laying out facts. How do the facts all of a sudden all fall apart?”

On Nov. 10 the Illinois fusion center released a report titled “Public Water District Cyber Intrusion” disclosing that someone had hacked into an unidentified water utility company, taken control of its Supervisory Control and Data Acquisition System (SCADA) and turned it on and off repeatedly, resulting in the burnout of a water pump.

The facility, later identified by reporters as the Curran-Gardner Township Public Water District, discovered the breach on Nov. 8. According to the unusually detailed fusion report, forensic evidence indicated that the hackers might have been in the system as early as September, and that they launched their attack from IP addresses based in Russia.

The report also asserted that the intruders gained access to the utility’s SCADA system by first hacking into the network of a software vendor that makes the SCADA system used by the utility. The hackers stole usernames and passwords that the vendor maintained for its customers, and then used those credentials to gain remote access to the utility’s network.

“It is unknown, at this time, the number of SCADA usernames and passwords acquired from the software company’s database and if any additional SCADA systems have been attacked as a result of this theft,” the report stated, according to Weiss, managing partner of Applied Control Solutions, who obtained a copy of the document and read it to reporters last week.

The fusion report also indicated that the hack into the utility system shared a similarity to a recent hack into an MIT server last June that was used to launch attacks on other systems. In both cases, the intrusions involved PHPMyAdmin, a front-end tool used to manage databases. The MIT server was used to search for systems that were using vulnerable versions of PHPMyAdmin that could then be attacked. In the case of the water utility in Illinois, the fusion report said that the company’s log files contained references to PHPMyAdmin, but didn’t elaborate.

But now the federal government says the fusion center was confused.

After detailed analysis, DHS and the FBI have found no evidence of a cyber intrusion into the SCADA system of the Curran-Gardner Public Water District in Springfield, Illinois.

There is no evidence to support claims made in the initial Fusion Center report — which was based on raw, unconfirmed data and subsequently leaked to the media — that any credentials were stolen, or that the vendor was involved in any malicious activity that led to a pump failure at the water plant. In addition, DHS and FBI have concluded that there was no malicious traffic from Russia or any foreign entities, as previously reported.

Analysis of the incident is ongoing and additional relevant information will be released as it becomes available.

Efforts to obtain comment from the fusion center in Illinois were unsuccessful. An analyst at the center said the center had no one in place to speak with reporters and referred inquiries to the FBI office in Springfield, Illinois. But FBI spokesman Bradley Ware said he could not speak for the fusion center, and referred calls back to the center. A second analyst at the center said he would pass questions to Master Sergeant Kelly Walter, who did not respond to the inquiry from Threat Level.

Weiss expressed frustration over the conflicting reports.

“There’s a lot of black and white stuff in that report,” he said. “Either there is or there isn’t a Russian IP address in there. It’s hard to miss that. This stuff about the vendor being hacked…. How can two government agencies be so at odds at what’s going on here? Did the fusion center screw up, or is the fusion center being thrown under the bus?”
http://www.wired.com/threatlevel/201...-report-wrong/





Apple Took 3+ Years to Fix FinFisher Trojan Hole
Brian Krebs

The Wall Street Journal this week ran an excellent series on government surveillance tools in the digital age. One story looked at FinFisher, a remote spying Trojan that was marketed to the governments of Egypt, Germany and other nations to permit surreptitious PC and mobile phone surveillance by law enforcement officials. The piece noted that FinFisher’s creators advertised the ability to deploy the Trojan disguised as an update for Apple’s iTunes media player, and that Apple last month fixed the vulnerability that the Trojan leveraged.

But the WSJ series and other media coverage of the story have overlooked one small but crucial detail: A prominent security researcher warned Apple about this dangerous vulnerability in mid-2008, yet the company waited more than 1,200 days to fix the flaw.

The disclosure raises questions about whether and when Apple knew about the Trojan offering, and its timing in choosing to sew up the security hole in this ubiquitous software title: According to Apple, as of June 2011, there were approximately a quarter billion installations of iTunes worldwide.

Apple did not respond to requests for comment. An email sent Wednesday morning to its press team produced an auto-response stating that employees were already on leave for the Thanksgiving holiday in the United States.

I first wrote about this vulnerability for The Washington Post in July 2008, after interviewing Argentinian security researcher Francisco Amato about “Evilgrade,” a devious new penetration testing tool he had developed. The toolkit was designed to let anyone send out bogus automatic update alerts to users of software titles that don’t sign their updates. I described the threat from this toolkit in greater detail:

Why is this a big deal? Imagine that you’re at an airport lounge, waiting to board your flight, and you pop open your laptop to see if you can hop on an open wireless network. Bear in mind that there are plenty of tools available that let miscreants create fake wireless access points for the purposes of routing your connection through their computer. You connect to that fake network, thinking you can check your favorite team’s sports scores. A few seconds later, some application on your system says there’s a software update available. You approve the update.

You’re hosed.

Or maybe you don’t approve the update. But that may not matter, because in some cases, auto-update features embedded in certain software titles will go ahead and download the update at that point, and keep nagging you until you agree to install it at a later date.

Evilgrade leveraged a flaw in the updater mechanism for iTunes that could be exploited on Windows systems. Amato described the vulnerability:

“The iTunes program checks that the binary is signed by Apple but we can inject content into the description as it opens a browser, with a malicious binary so that the user thinks its from Apple,” Amato said of his attack tool.

Emails shared with KrebsOnSecurity show that Amato contacted Apple’s security team on July 11, 2008, to warn them that the iTunes update functionality could be abused to push out malicious software. According to Amato, Apple acknowledged receipt of the report shortly thereafter, but it did not contact him about his findings until Oct. 28, 2011, when it sent an email to confirm his name and title for the purposes of crediting him with reporting the flaw in its iTunes 10.5.1 patch release details. Interestingly, Apple chose to continue to ignore the vulnerability even after Amato shipped a significant feature upgrade to Evilgrade in Oct. 2010.

The length of time Apple took to patch this significant security flaw is notable. In May 2006, I undertook a longitudinal study of how long it took Apple to ship security updates for its products. In that analysis, I looked at two years’ worth of patches issued to fix serious security bugs in Apple’s Mac OS X operating system, as well as other Apple software applications like iTunes. I found that on average, 91 days elapsed between the date that a security researcher alerted Apple to an unpatched flaw and the date Apple shipped a patch to fix the problem. In that study, I examined patch times for four dozen flaws, and the lengthiest patch time in that period was 245 days.

Amato said he’s not sure why Apple took so long to fix his bug, which he said should have been trivial to correct.

“Maybe they forgot about it, or it was just on the bottom of their to-do list,” he said.

Public attention to digital surveillance tools being marketed to law enforcement agencies worldwide is spurring discussion about whether antivirus companies are doing all they can to unmask these intruders. Mikko Hypponen, chief research officer for Finnish security firm F-Secure, first blogged about FinFisher in March 2011, when protesters in Egypt took over the headquarters of the Egyptian State Security and gained access to loads of confidential state documents, including those that appear to show the government purchased licenses for the program.

Hypponen said F-Secure has stated unequivocally that it will detect any malware that it knows about, regardless of whether the malware is being actively used by government authorities for surveillance. But he said not all antivirus companies have made similar public commitments.

“There is no real discussion or industry-wide agreement on it,” Hypponen said. “The way it goes down is that [antivirus] companies have no idea which Trojans they get are governmental Trojans or just the usual stuff. There must be many more governmental Trojans that we and others detect but don’t know are being used for government surveillance.”

As for the years that Apple took to patch the iTunes update flaw, Hypponen said he’s stumped, but inclined to give the company the benefit of the doubt.

“It is an unusually long time to patch anything, so it doesn’t make much sense,” he said.

For more details on FinFisher, see Der Spiegel’s fascinating coverage of how this surveillance Trojan was marketed.

One note of caution about upgrading your software that I hope is clear from this post: Staying up-to-date with the latest security patches is one of the surest ways to keep your system secure from malware and intruders. But whenever possible, try to do your updating from a network that you trust and control. Otherwise, you may be placing far too much trust in the security of the update mechanisms built into the software you use.

Update, 3:11 p.m. ET: An earlier version of this story incorrectly stated that Amato was able to exploit the iTunes update flaw on OS X systems. While Apple’s advisory states that this flaw is present on OS X systems that lack the iTunes 10.5.1 patch, Amato said he was unable to replicate the problem on OS X systems during his research.
https://krebsonsecurity.com/2011/11/...r-trojan-hole/





UC Davis: Official 'Spin' Crumbles in the Face of "Too Many Videos"
Zack Whittaker

Summary: UC Davis’ pepper-spray videos have gone viral around the web, proving citizen journalism can allow us to form our own views of raw footage collected in the thick of it.

1970: Kent State shootings: One iconic Pulitzer Prize-winning photograph taken by chance of a student killed by the unfathomable brutality of National Guard troops; some no older than the students they killed. One person, one camera.

1991: Rodney King arrest: An African-American man who was beaten relentlessly by police with batons, showing the cruel brutality of Los Angeles’ law enforcement and utter disregard of then societally-developing race relations. One person, one camera.

2011: UC Davis pepper-spray assault: Around fifty students at the California university sprayed at point-blank range by police, emphasising the disproportionate violence to what was a peaceful, orchestrated protest. One police officer, dozens of cameras.

In the run-up to last weekend, students at the University of California, Davis told the world through a deafening silence how to hold a peaceful, arguably beautiful protest. In so many cases, its underlying message can be drowned out by the rage of violence, disruption and civil disorder.

Students have long been portrayed in a particular way, as lay-about good-for-nothings, with little interest in anything beyond their own politics, causing disruption for anti-fur movements and sleeping in until late afternoon. Not to mention, these ‘leeches’ continue to put strain on the financial system they seem to complain about.

But the university students at UC Davis, disaffected by decisions made by the state, the university and those who they thought they could trust, taught the world one important, crucial lesson in post-modern principles of today’s reporting.

The truth will out.

On Friday afternoon, UC Davis students sat down along a pathway and linked arms, peacefully defiant in the face of law enforcement, in that they would not be intimidated and had a right to protest without causing disorder or committing violence.

The police were then called in to clear the student protesters, after the chancellor Linda Katehi claimed they were trespassing on university property. It was Katehi who ordered the UC David police to evict the protesters.

Then this happened.

Within hours of the — ‘incident’ seems to trivialise it — attack on the students, UC Davis police were forced to issue a press statement defending their actions.

“Students were given warnings to leave their tents [pitched on campus] by 3 p.m.”, it said. “The protest initially involved about 50 students”, Annette Spicuzza, UC Davis’ police chief said. “Some were wearing protective gear and some held batons”.

The final insult was when she said: “Officers were forced to use pepper spray when students surrounded them”, adding, “There was no way out of the circle”.

It makes one see there could have been at least two sides to the story. Perhaps the students were being unruly, or defiant, or armed and ready to commit violence. It was possible, and had been previously witnessed in England during the student protests.

But the statement was spin, and the spin doctor who wrote that statement was clearly unaware that citizens had recorded the event in full, and could in no way document the blasé attitude of the police officer, spraying the students at point-blank range with a thick fog of violent pepper-spray.

The video had been published to YouTube, where it has amassed nearly a million viewers in just over 24 hours, but clearly had not been seen by those who released the pro-police spin.

The next day at a news conference, describing the video images as “chilling”, Katehi said that a task-force would be set up to investigate the actions of the police during the clearly peaceful demonstration.

Katehi reportedly refused to leave the building she was in, after a large group of UC Davis students mobilised outside. Chanting, “we are peaceful” and “just walk home” in a bid to see their university’s leader, the students at least watched Katehi leave the building.

The students, as you will see, engaged again in protest fitting for the occasion.

It was not what you heard, but what you did not hear. A deafening silence of hushed voices but seething anger. The video was painfully awkward to watch as an outside observer, whilst equally inspiring and poignant. The contempt could be sliced through the air from the disgust felt by the students there.

The rise of citizen journalism has been a contentious issue amongst many. But as I call it, “@breakingnews culture”, based along the Twitter feed of the MSNBC Breaking News account, it gives citizens around the world chance to bring raw, unedited and unfettered truths to the masses. It uses citizen journalism through tweets and blog posts, mobile phone footage and other non traditionally-generated content to progress a ‘legitimate’ new-media news outlet.

What we see in any modern event, no matter how off the cuff or sporadic, is a sea of cameras. One report likened it to a panopticon society.

It is not 911 or 999 we call in an emergency. We do not think to engage with the situation. But what we do, as the Generation Y, is pull out our phones and start recording; documenting every second of the event for history’s benefit.

Instead of being reliant on information given to the public through media channels, we are now able to instigate our own broadcasts. Immediately connected to a global audience, two YouTube videos alone are prime examples of how witness reports to scenarios like this are no longer chained to censorship or secrecy.

This cultural shift allows people to see and feel themselves how it was in a situation like this. More than the printed word or carefully-trained television reporter, people have more freedom to make up their own minds and frame opinion around their own personal experiences.

In this case, and in so many more to come, the police and government — for all the money, tax revenue and intelligence that Western governments have at their disposal — seemingly cannot get their heads around a simple enough concept that wherever one is, someone is watching and recording.

For years, we have had to rely on information that is presented to us. Often, it would be from the sources that be, relayed to the middle-men and women of the media. But because we generate vast quantities of the media ourselves, and release it of our own volition and accord, we trust ourselves and our partners as members of the citizen journalism collective.

But as the masses collect vital citizen-based intelligence, it is the normal citizens of this world who use Facebook and Twitter, and other social media platforms and networks with our colleagues, friends and family, who make our own decisions about the news of the day.

As citizen journalism offers instant accountability to the actions made by those in authority, it gives us greater control over what we believe and consume as end-users of this world we live in.

Spin no longer works.
http://www.zdnet.com/blog/igeneratio...y-videos/13347





Google Co-Founder Sergey Brin Gives $500,000 to Help Wikipedia
Jolie O'Dell

The Wikimedia Foundation, which runs Wikipedia, has just received a $500,000 grant from the Brin Wojcicki Foundation, an organization started by Google co-founder Sergey Brin and his wife, 23andMe co-founder Anne Wojcicki.

The Wikimedia Foundation started its eighth annual fundraising drive this week. It is based in San Francisco and is an audited, 501(c)(3) charity funded primarily through donations and grants.

“This grant is an important endorsement of the Wikimedia Foundation and its work, and I hope it will send a signal as we kick off our annual fundraising campaign this week,” said Wikimedia Foundation executive director Sue Gardner in a release today.

“This is how Wikipedia works: people use it, they like it, and so they help pay for it, to keep it freely available for themselves and for everyone around the world. I am very grateful to Sergey Brin and Anne Wojcicki for supporting what we do.”

According to comScore, Wikipedia and the other Wikimedia Foundation sites see more than 477 million unique visitors each month. Together, the Wikimedia Foundation sites are the fifth largest property on the Internet.

Wikipedia is available in more than 280 languages and contains more than 20 million articles contributed by a global volunteer community of more than 100,000 people.

Still, the Wikimedia Foundation itself is small. “Google might have close to a million servers. Yahoo has something like 13,000 staff. We have 679 servers and 95 staff,” writes Wikipedia founder Jimmy Wales in a pledge drive appeal.

Wales and his staff have chosen to run the site without advertising revenue. “Wikipedia is something special,” he wrote. “It is like a library or a public park. It is like a temple for the mind. It is a place we can all go to think, to learn, to share our knowledge with others.”

Wikipedia also made headlines recently when protesters shut down the Italian-language version of the site.

The Wikipedia editors who orchestrated the takedown were protesting a proposed law that would force websites to remove any information identified as defamatory within 48 hours of a complaint and without the option for appeal. In a word, the law would allow the Italian government to censor any website.
http://venturebeat.com/2011/11/18/brin-wikipedia-grant/





Study: Half of Facebook Users Post Political Messages
Zoe Fox

Two-thirds (67%) of adult social media users in the U.S. voted for Barack Obama in the 2008 presidential race, although only a half (51%) would vote the same way if they knew what they know now. Market researcher Lab42 polled 500 social media users on all things politics.

The findings, presented in the infographic below, reveal top issues, candidates and news sources for social media users. When it comes to the 2012 election, almost half (46%) of respondents didn’t think it would be bad if most members of congress were defeated in the upcoming election.

While roughly half (51%) of social media users have posted political content to their Facebook walls, 36% have changed their opinions of someone based on political content posted to Facebook or Twitter.
http://mashable.com/2011/11/21/social-media-politics/





FCC Chief Seeks Added Review of AT&T/T-Mobile Deal
Jasmin Melvin

AT&T Inc was dealt a blow on Tuesday as the top U.S. communications regulator sought to have its planned $39 billion purchase of T-Mobile USA sent to an administrative law judge for review.

Federal Communications Commission Chairman Julius Genachowski sent a draft order to his fellow commissioners, citing FCC staff findings that the deal would significantly diminish competition and lead to massive job losses.

"The record clearly shows that -- in no uncertain terms -- this merger would result in a massive loss of U.S. jobs and investment," a senior FCC official said.

The agency also concluded that the merger would not result in significantly more buildout of next generation 4G wireless service than would occur absent the transaction.

AT&T argues the deal will accelerate its expansion of high-speed wireless service to nearly all Americans.

The U.S. Justice Department went to court in August to oppose AT&T's purchase of T-Mobile from Deutsche Telekom AG on antitrust grounds. A trial in that case is due to begin on February 13.

Any administrative hearing at the FCC, which is charged with evaluating the public interest merits of the deal, would begin after the antitrust trial, an FCC official said.

AT&T called the FCC action "disappointing" and disputed the agency's conclusion that its T-Mobile deal, with $8 billion in broadband investment and commitments on job preservation and enhancement, would result in the loss of jobs and investment.

The FCC recently said its $4.5 billion annual fund to promote broadband to underserved communities would create 500,00 jobs over the next six years.

"This notion, that when government spends money on broadband it creates jobs, but when a private company spends money it doesn't, is clearly wrong on its face," said Jim Cicconi, AT&T's top executive for external and legislative affairs.

Adding Length To Review

Mizuho analyst Michael Nelson said the move adds another hurdle to AT&T's prospects for closing the deal. "It's like the FCC is piling on to the DOJ's blocking of the deal," he said.

Analysts at Stifel Nicolaus added that "such an extended FCC review could put added pressure on T-Mobile to seek to exit the merger."

AT&T had hoped to close the deal by the first quarter of 2012.

Genachowski's order still requires approval by a majority of commissioners but an administrative hearing seems likely unless the antitrust case results in a permanent injunction against the transaction, making the FCC hearing irrelevant.

Genachowski is expected to get the support of his two fellow Democrats on the panel. The agency was left with only one Republican after Meredith Attwell Baker's departure in May.

Acquiring T-Mobile would vault No. 2 ranked AT&T into the leading position in the U.S. wireless market. The current industry leader is Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc.

Sprint Nextel Corp, the No. 3 U.S. carrier, and a regional competitor, C Spire, have also filed a lawsuit to stop AT&T's purchase of T-Mobile, the No. 4 U.S. operator.

The 2002 proposed merger of EchoStar and DirecTV was the last time the FCC sought an administrative hearing on a merger deal. In that case, the companies ultimately scrapped their deal.

Genachowski circulated a separate order on Tuesday to allow with conditions AT&T's proposed $1.9 billion purchase of spectrum from Qualcomm Inc, an FCC official said. The agency had no comment on any details of those conditions.

Qualcomm offered its unused spectrum after its FLO TV business, a mobile television service, failed to take off.

(Reporting by Jasmin Melvin in Washington D.C.; Editing by Tim Dobbyn)
http://www.reuters.com/article/2011/...7AL2IT20111123





AT&T to Offer Bigger Asset Sales to Save Takeover
Scott Moritz and Serena Saitto

Executives at AT&T attend a news conference where it was announced that AT&T Inc. will be buying its wireless rival T-Mobile USA from Deutsche Telekom AG for $39 billion in cash and stock on March 21, 2011 in New York City. Photographer: Spencer Platt/Getty Images

AT&T Inc. (T), with its T-Mobile USA takeover facing regulatory opposition, is preparing the biggest remedy proposal yet to the Justice Department to salvage the $39 billion deal, according to a person familiar with the plan.

The company is considering an offer to divest a significantly larger portion of assets than it had initially expected, said the person, who declined to be identified because the plan isn’t public. Though the exact size of the disposals hasn’t been determined, they could be as much as 40 percent of T-Mobile USA’s assets, the person said.

The asset sale is an attempt to address the concerns of the Justice Department, which sued to block the takeover on Aug. 31, saying the deal would “substantially lessen competition” in the wireless market. The acquisition was dealt another blow on Nov. 22, with the Federal Communications Commission signaling an attempt to block it.

“It’s going to be problematic for AT&T to find a successful divestiture solution,” said Kevin Smithen, an analyst with Macquarie Securities USA Inc. in New York. The pool of potential buyers isn’t very big and those that might be interested probably wouldn’t have a chance, Smithen said. “It’s unlikely that the DOJ would allow a big competitor like Verizon to purchase the assets,” Smithen said.

Customers Versus Spectrum

ATT’s proposal is likely to include the divestiture of a higher share of customers and lower percentage of spectrum, said the person familiar with the matter. The company needs more capacity to serve users as it adds customers and more of them adopt data-intensive smartphones.

AT&T, based in Dallas, fell 0.5 percent to $27.41 yesterday in New York and has lost 6.7 percent this year. T-Mobile owner Deutsche Telekom AG added 1.6 percent to 8.83 euros in Frankfurt and has declined 8.6 percent this year.

Brad Burns, an AT&T spokesman, and Andreas Fuchs, a Deutsche Telekom spokesman, declined to comment.

The asset-sale proposal, which could come as early as the next Justice Department hearing on Nov. 30, might be the only remaining option if the second-largest U.S. wireless operator wants to avoid a lengthy court battle in its bid to become the country’s top mobile carrier. The purchase may vault it past Verizon Wireless (VZ), depending on the size of the divestitures.

On Nov. 24, AT&T and Deutsche Telekom asked to pull their deal applications to the FCC so the companies could better focus on the Justice Department lawsuit. AT&T also said it would take a one-time charge of $4 billion to cover the breakup fee it will need to pay to Deutsche Telekom if the deal fails.

‘All or Nothing’

One approach is to propose a remedy that would lessen the market impact of losing the fourth-largest wireless service provider. AT&T has been in discussions with MetroPCS Communications Inc. (PCS) and Leap Wireless International Inc. (LEAP) to sell spectrum and customers as a way of propping up competition in the absence of T-Mobile.

The second approach is to fight the court case, which is scheduled to begin Feb. 13.

“If there were a last, best offer to be made, they would have made it a long time ago,” said Craig Moffett, a Sanford C. Bernstein & Co. analyst in New York, who has a “market perform” rating on AT&T shares. “It’s very hard to envision a solution that would satisfy the problems the DOJ found with the deal. Realistically, AT&T is going to take its chances in court in February. It’s all or nothing.”

According to a term in the agreement, AT&T would be able to pay less than the deal’s original $39 billion value if regulators demand asset sales that surpass 20 percent of that figure, or about $7.8 billion, three people with direct knowledge of the situation said Sept. 7.

AT&T could walk away from the deal and pay Deutsche Telekom a breakup fee if the concessions requested top 40 percent of that value, the people said. If the deal doesn’t happen there’s no way AT&T can avoid paying the breakup fee, the people said.
http://www.bloomberg.com/news/2011-1...-takeover.html





Apple May Have Won The PC War… By Losing The Windows Battle
MG Siegler

What exactly is a PC? That question is likely to become a hot topic over the next few years.

Originally, we thought of PCs as the Apple II or then the IBM PC. They were machines that had to sit on a desk because, while significantly smaller than a mainframe, they were still big and bulky. They had large monitors, boxy bases, and big keyboards. The original Macintosh attempted to make this footprint a bit smaller and the package more compact, but the IBM clones won the day. Windows won the day. PCs by Compaq and HP led to machines by Gateway and Dell. Boxy bases were joined by massive towers. Bigger seemed better. Small monitors were replaced by huge monitors. Then something changed.

While laptops had existed in various forms for years, by the mid 2000s, the prices, performance, and size made them viable “desktop replacements”. They were different enough from traditional PCs that they had their own name, and people thought of them differently. But eventually, as they started to dominate the market, people just began thinking of laptops as PCs as well. They were, after all, personal computers.

Now we’re in the midst of another new age. People are now carrying around computers in their pockets, called smartphones. But those aren’t considered PCs. Instead, they’re considered descendants of the original mobile phones. The truth is that they’re closer in just about every way to a personal computer — in fact, they may be the most personal computers ever. But they look more like phones, so we consider them phones — even as people make fewer and fewer actual phone calls on them.

And now this line is being further blurred by the rise of the tablet. Cosmetically, it’s almost like a PC screen merged with a smartphone. People have still been very hesitant to call this a PC. That included Steve Jobs, whose iPad dominates the market. Jobs instead thought of the iPad (and the iPhone) as ushering in the “Post-PC” era. He did not want to lump his new devices together with the PC world he had long since lost.

But is that right? Again, if anything, these machines seem more personal than the personal computers of yesteryear. To some, we’re simply arguing cosmetics. The iPad isn’t a PC because it doesn’t look like a typical computer. Of course, neither did a laptop to most people back in the day. Others argue that since devices like the iPad can’t do quite as much as a traditional computer, it’s not a PC. But it’s silly to think that this won’t change over time. The lines will continue to blur.

That’s why I agree with British research firm Canalys’ decision to include tablet sales alongside PC sales in their new report. That’s going to piss some people off because the combination has them projecting that Apple will become the top PC vendor by the middle of next year. If their data is right, Apple will unseat HP to take the crown.

That statement is amazing when you consider that just 15 years ago, Apple nearly went out of business. And just 5 to 10 years ago, they still had single digit market share in the PC space. But that may have actually helped them pull off this stunning comeback. Because they didn’t have the baggage that other PC makers had, they were free to re-invent the wheel — the personal computer — with their iOS devices. Because Apple lost the PC battle to Windows in the 1990s, they may end up winning the personal computing war.

Again, not everyone will agree over this classification of the iPad as a PC. But the whole classification system is really nothing more than marketing (which Jobs also clearly knew). Who cares what the computer looks like or what category it falls in? What matters is what it does and who is using it.

Other numbers released today by eMarketer are staggering. By 2014, they believe there will be close to 100 million U.S. tablet users (the vast majority using an iPad). Meanwhile, HP reported their quarterly earnings today. The traditional PC numbers continue to fall. Things are bleak enough that HP had said they were going to sell off their PC business entirely (though they ultimately decided against that after a CEO change).

Things are crazier still when you look at the numbers from a bottom-line perspective. Apple is the juggernaut making far more profit than anyone else in the industry. We’re arguing semantics about the meaning of the term “PC”, but doesn’t this matter more? Shouldn’t the most successful PC vendor be aligned with the most successful company in the space? Otherwise, who cares who is winning the “PC War”? Great, some guys losing money sold more desktop PCs than Apple last quarter. Does that mean anything of any significance other than showing that the traditional PC business is a shitty one to be in right now?

One high profile person who does believe that tablets should be labeled at PCs? Steve Ballmer, as Nick Wingfield reminds us on Bits today. But Ballmer wants us to buy that so he has a justification for putting Windows on these machines. He doesn’t seem to realize and/or care that by helping to unify the personal computing space, he’s eroding his company’s own dominance.

Apple is set to become the top personal computer maker in the world. They’ll never win the desktop PC battle, but who cares? That fight hasn’t mattered for years.
http://techcrunch.com/2011/11/22/a-t...-computer-too/





Headphones With Swagger (and Lots of Bass)
Andrew J. Martin

DR. DRE, the sonic architect of gangsta rap, is surrounded by a gaggle of slack-jawed journalists and micro-skirted cocktail waitresses. It’s not quite 5 in the afternoon, and already the scene is a testosterone fantasy of swaggering grooves and flowing vodka.

Dr. Dre, however, is here on business.

Born Andre Young, he was a founding member of N.W.A. and honed the sound of Snoop Dogg, Eminem and 50 Cent. But now what began as a sideline has turned into multimillion-dollar business.

Mr. Young is the pitchman for the hot new sound in — headphones. On this October day, he is headlining a media party in the Chelsea neighborhood of Manhattan for his creations, Beats by Dr. Dre.

To the surprise of almost everyone, except him and his partners, Beats have redefined the lowly headphone, as well as how much people are willing to pay for a pair of them. A typical pair of Beats sell for about $300 — nearly 10 times the price of ear buds that come with iPods. And, despite these lean economic times, they are selling surprisingly fast.

Whether Beats are worth the money is open to debate. Reviews are mixed, but many people love them. The headphones are sleekly Apple-esque, which is no surprise, since they were created by a former designer at Apple. Beats also offer a celebrity vibe and a lot of boom-a-chick-a-boom bass.

So much bass, in fact, that some audio experts say that Beats distort the sound of the music.

“In terms of sound performance, they are among the worst you can buy,” says Tyll Hertsens, editor in chief of InnerFidelity.com, a site for audiophiles. “They are absolutely, extraordinarily bad.”

Time was, manufacturers marketed high-priced audio equipment by emphasizing technical merits like frequency response, optimum impedance, ambient noise attenuation and so on. The audience was mostly a small cadre of audiophiles tuned to the finer points of sound quality.

But, three years ago, Beats by Dr. Dre set out to change all that by appealing to more primal desires: good looks, celebrity and bone-rattling bass. Annual sales are approaching $500 million, and Beats have transformed headphones into a fashion accessory.
This unlikely success has touched off a scramble in the industry. The rappers Ludacris and 50 Cent have backed their own headphone brands. Lawsuits are flying. Beats and its partner, Monster Cable, have sued some competitors, alleging patent infringement. The maker of Soul by Ludacris headphones, in turn, has sued Beats and Monster, contending that they are “attempting to use litigation threats to stifle legitimate competition.”

However the lawsuits play out, the entire industry is riding a wave. Sales of headphones in the United States nearly doubled in the year ended in August, to $2 billion, according to the NPD Group’s Retail Tracking Service.

Beats by Dr. Dre “set off a free-for-all among companies entering the category, many of which relied on celebrity endorsements or style, as opposed to focusing on audio quality per se,” said Ross Rubin, the executive director of industry analysis at NPD.

“What Beats did,” Mr. Rubin added, “was dramatically expand the market and make the price premium acceptable, as much as for the design and the brand as for the audio quality.”

Even old-line headphone makers have benefited, though they dismiss the rapper-backed headphones as more about marketing that audio quality.

Stefanie Reichert, vice president of strategic marketing for Sennheiser USA, said Beats was the first to market headphones as a lifestyle choice, rather than as a piece of audio equipment.

“Hats off to them, I have to say,” Ms. Reichert said.

JIMMY IOVINE, the chairman of Interscope Geffen A&M Records, has had a long, profitable relationship with Mr. Young and teamed up with him on Beats.

The two make an odd pair. With a smooth baritone, Mr. Young spun tales about gangs, sex and crack in South Central Los Angeles into multimillion-selling rap albums. In person, Mr. Young, a burly 46-year-old, says little and chooses his words carefully.

Mr. Iovine, 58, made his name as a record producer for the likes of John Lennon and Bruce Springsteen. He is also credited with helping to discover Lady Gaga and Eminem, whose demo tape he gave to Mr. Young. A slight, wiry and hyperactive Brooklyn native in blue-tinted glasses and a baseball cap, Mr. Iovine talks so much more than Mr. Young that he jokes, “I’m his Charlie McCarthy, I really am.”

Beats was a result of a chance meeting on a California beach several years ago, Mr. Iovine said. Mr. Young lamented that his lawyer wanted to peddle Dr. Dre-branded sneakers. Mr. Iovine responded: forget sneakers, sell speakers (although he used a different F-word).

His interest in getting into the headphone business was prompted by what he calls a steady decline in the quality of audio equipment and of recordings, as they have been compressed into digital files. That process allows more songs to be loaded onto a mobile device, but doing so eliminates some of the music’s complexity.

At that time, Mr. Iovine said headphones had become a commodity, and “everything that came out kept making the sound worse, and worse and worse.”

He continued: “You wouldn’t watch ‘Avatar’ on a small screen with a blurry picture, and yet people were consuming music like that. So we said: ‘You know, everything else out there looks like medical equipment right now. Let’s make it look cool and have a good vibe about it. But yet make it powerful.’ ”

The duo signed a deal with Monster Cable, which makes cables for audio and video components, and it spent several years perfecting a design, Mr. Iovine said. The first pair of Beats was released in the fall of 2008, about the time the slowing economy went into a tailspin. “Everyone told us it was impossible,” Mr. Iovine said. “We just went for it.”

He dismissed those who criticize the sound quality of Beats. Competitors use fancy equipment to determine how headphones should sound, he said, whereas he and Mr. Young simply know how they should sound.

“The way we hear music is almost the opposite of the way these sound companies hear music,” he said.

Many rave about the sound. Consumer Reports gave Beats’ Studio headphones among its highest rankings in a recent review.

“I don’t know what I’d do without Beats,” said Sequoia Hill, 24, a music producer from Brooklyn, who owns three pairs. “They are flawless.”

Other headphone manufacturers are hoping to cash in on the Beats’ success.

“We saw that Beats owned that urban rap, higher price point,” said Tim Hickman, who makes Fanny Wang headphones. He set out to create similar headphones that would appeal particularly to women.

As such, he said Fanny Wang’s “very youthful, urban-y sound” was different than that of Beats, too. In October, Beats and Monster settled their lawsuit against Fanny Wang, with no money being exchanged, Mr. Hickman said.

Meanwhile, 50 Cent, born Curtis Jackson, is selling headphones called Sync by 50. He says he got into the headphone business because he had “an interest in people hearing music the way I hear it in the studio.” He is focusing on top-quality wireless headphones that he says are superior to his competitors, including Beats.

Nonetheless, Mr. Jackson praised Beats and its owners. In fact, he said he would have happily joined forces with Beats, which has released versions of its headphones by Lady Gaga, P Diddy and Justin Bieber.

“Now it’s part of the culture. You are almost making a fashion statement,” Mr. Jackson said. “Because of the price, it says something about the guy who has it around his neck.”

Through a spokesman, Ludacris declined to comment about his Soul by Ludacris headphones. In its lawsuit, filed in June, Signeo USA, which makes them, said Beats and Monster were threatening litigation simply to undermine the success of Soul headphones.

EVEN the best headphones can’t improve a lousy recording.

Mr. Iovine acknowledged the challenge but said music still sounded better on Beats than on most other headphones. He said his goals extended well beyond headphones, to improving the quality of audio in cars, as well as on personal computers and other consumer electronics, in much the same way that high definition improved the visual quality of television.

Cellphones will be crucial, since they are the primary music player for a growing number of people. In August, Beats announced that the HTC Corporation, a mobile device maker based in Taiwan, had invested $300 million in the company, giving it a majority stake. Beats technology has already been incorporated into some HTC smartphones.

“We can’t be late to the phone like we were online,” Mr. Iovine says. “Remember, Napster was out of business for three years before our music became available legally on iTunes. That’s a disaster.”

He envisions offering music by subscription on cellphones — much as cable offers TV by subscription — with Beats providing the audio. The music industry, he said, has to make the transition to cellphones, and do it with style.

“It’s not sexy,” he said. “And it’s got to be sexy.”

For the time being, Beats will continue to deploy its marketing razzle-dazzle. It recently opened a pop-up store in SoHo where its headphones are displayed like works of art. Brian Miller, 26, of Queens, stopped by recently and bought a Beats T-shirt. He said he owns a pair of red Beats, which he produced from his backpack.

“They’re dope,” said Mr. Miller. He works at a Web site about the rap industry, RapRadar.com, and said he loved the sound quality but seemed less impressed with all the Beats pizazz — like the sight of men wearing Beats around their necks at clubs or while driving.

“I’m not a schmuck,” he said. “That’s like wearing sunglasses at night.”
https://www.nytimes.com/2011/11/20/b...ess-world.html





For Their Children, Many E-Book Fans Insist on Paper
Matt Richtel and Julie Bosman

Print books may be under siege from the rise of e-books, but they have a tenacious hold on a particular group: children and toddlers. Their parents are insisting this next generation of readers spend their early years with old-fashioned books.

This is the case even with parents who themselves are die-hard downloaders of books onto Kindles, iPads, laptops and phones. They freely acknowledge their digital double standard, saying they want their children to be surrounded by print books, to experience turning physical pages as they learn about shapes, colors and animals.

Parents also say they like cuddling up with their child and a book, and fear that a shiny gadget might get all the attention. Also, if little Joey is going to spit up, a book may be easier to clean than a tablet computer.

“It’s intimacy, the intimacy of reading and touching the world. It’s the wonderment of her reaching for a page with me,” said Leslie Van Every, 41, a loyal Kindle user in San Francisco whose husband, Eric, reads on his iPhone. But for their 2 1/2-year-old daughter, Georgia, dead-tree books, stacked and strewn around the house, are the lone option.

“She reads only print books,” Ms. Van Every said, adding with a laugh that she works for a digital company, CBS Interactive. “Oh, the shame.”

As the adult book world turns digital at a faster rate than publishers expected, sales of e-books for titles aimed at children under 8 have barely budged. They represent less than 5 percent of total annual sales of children’s books, several publishers estimated, compared with more than 25 percent in some categories of adult books.

Many print books are also bought as gifts, since the delights of an Amazon gift card are lost on most 6-year-olds.

Children’s books are also a bright spot for brick-and-mortar bookstores, since parents often want to flip through an entire book before buying it, something they usually cannot do with e-book browsing. A study commissioned by HarperCollins in 2010 found that books bought for 3- to 7-year-olds were frequently discovered at a local bookstore — 38 percent of the time.

And here is a question for a digital-era debate: is anything lost by taking a picture book and converting it to an e-book? Junko Yokota, a professor and director of the Center for Teaching Through Children’s Books at National Louis University in Chicago, thinks the answer is yes, because the shape and size of the book are often part of the reading experience. Wider pages might be used to convey broad landscapes, or a taller format might be chosen for stories about skyscrapers.

Size and shape “become part of the emotional experience, the intellectual experience. There’s a lot you can’t standardize and stick into an electronic format,” said Ms. Yokota, who has lectured on how to decide when a child’s book is best suited for digital or print format.

Publishers say they are gradually increasing the number of print picture books that they are converting to digital format, even though it is time-consuming and expensive, and developers have been busy creating interactive children’s book apps.

While the entry of new tablet devices from Barnes & Noble and Amazon this fall is expected to increase the demand for children’s e-books, several publishers said they suspected that many parents would still prefer the print versions.

“There’s definitely a predisposition to print,” said Jon Yaged, president and publisher of Macmillan Children’s Publishing Group, which released “The Pout-Pout Fish” by Deborah Diesen and “On the Night You Were Born” by Nancy Tillman.

“And the parents are the same folks who will have no qualms about buying an e-book for themselves,” he added.

That is the case in the home of Ari Wallach, a tech-obsessed New York entrepreneur who helps companies update their technology. He himself reads on Kindle, iPad and iPhone, but the room of his twin girls is packed with only print books.

“I know I’m a Luddite on this, but there’s something very personal about a book and not one of one thousand files on an iPad, something that’s connected and emotional, something I grew up with and that I want them to grow up with,” he said.

“I recognize that when they are my age, it’ll be difficult to find a ‘dead-tree book,’ ” he added. “That being said, I feel that learning with books is as important a rite of passage as learning to eat with utensils and being potty-trained.”

Some parents do not want to make the switch for even their school-age children. Alexandra Tyler and her husband read on Kindles, but for their son Wolfie, 7, it is print all the way.

“Somehow, I think it’s different,” she said. “When you read a book, a proper kid’s book, it engages all the senses. It’s teaching them to turn the page properly. You get the smell of paper, the touch.”

There are many software programs that profess to help children learn to read by, for example, saying aloud a highlighted word or picture. Not all parents buy in; Matthew Thomson, 38, an executive at Klout, a social media site, has tried such software for Finn, his 5-year-old. But he believes his son will learn to read faster from print. Plus the bells and whistles of an iPad become a distraction.

“When we go to bed and he knows it’s reading time, he says, ‘Let’s play Angry Birds a little bit,’ ” Mr. Thomson said. “If he’s going to pick up the iPad, he’s not going to read, he’s going to want to play a game. So reading concentration goes out the window.”
https://www.nytimes.com/2011/11/21/b...-on-paper.html





HDMI Type Cable Encryption Cracked Using $250 of Gear and a Lot of Talent
T.C. Sottek

It was big news last September when the High-bandwidth Digital Content Protection (HDCP) master key leaked out, but no one's done much with it — you'd need to build an entirely new chip to really use it. But researchers at Germany's Ruhr University took a different path and cracked the ubiquitous system with clever programming and just $250 of commercial gear. The researchers devised an ingenious "man-in-the-middle" attack using their own code and an off-the-shelf Digilent Atlys circuit board, allowing them to connect to any non-HDCP enabled monitor to an HDCP-protected source, lift secret encryption keys established during authentication, and decrypt video streams in real time.

HDCP has already been bypassed in other ways by pirates who can easily tap compressed HD content from receivers, but this attack directly intercepts uncompressed HDCP content. Lead researcher Tim Güneysu says the study was never about creating a way to make illegal copies, but instead to investigate the fundamental security of Intel's encryption. He says "the fact that we were able to achieve this in the context of a PhD thesis and using materials costing just €200 is not a ringing endorsement of the security of the current HDCP system." In the meantime, HDCP continues to bother only a single group of people: those who buy stuff legally.
http://www.theverge.com/2011/11/25/2...ans-crack-hdcp
















Until next week,

- js.



















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