|19-01-11, 08:12 AM||#1|
Join Date: May 2001
Location: New England
Peer-To-Peer News - The Week In Review - January 22nd, '11
"For every 15 or so pirates, I received an extra sale." – Daniel Amitay
"I’ll be candid with you: This is an awful development for those of us who care about media consolidation. It will restrict your freedom of choice and raise your cable and Internet bills. And it could pave the way for even more media mergers and even less room for independent voices in the media." – Sen. Al Franken, D-MN
"We support legislation and federal regulations that ensure equal access to the Internet for all. True net neutrality is necessary for people to flourish in a democratic society." – Archbishop Timothy Dolan of New York, president of the United States Conference of Catholic Bishops
"This idea of Metallica or some rock n' roll singer being rich, that's not necessarily going to happen anymore. Because, as we enter into a new age, maybe art will be free. Maybe the students are right. They should be able to download music and movies. I'm going to be shot for saying this. But who said art has to cost money? And therefore, who says artists have to make money?" – Francis Ford Coppola
Two if by Land
This month Netflix, the movie-by-mail giant, revealed it spends about a dollar shipping a DVD through the post versus only a nickel to stream it. They point this out to buttress their argument that a planned migration away from their traditional mail distribution business to an Internet streaming model will save so much money they’ll easily be able to afford the skyrocketing fees for new content that are making investors edgy. It’s a theory that at first glance seems clear but on closer inspection loses focus.
Take this customer.
I have the $9.99/mo single disc at a time plus unlimited streaming plan at my place and I’m lucky - really lucky - if I turn around 2 discs per week. I must religiously watch every movie the day I get it and put it back in the mailbox the very next day - and have never-fail post office pick ups and drop offs as well. As you might think, it takes some perseverance and some weeks I manage it, most weeks not. I’ve done 8 when all the stars were aligned, but I probably average just 5 discs per month on this plan. Even so, Netflix says it is spending 5 bucks in postage on me, or half my subscription fee just to get the stuff to my door. No way they’re making rent on this. Now if they could somehow persuade me to quit discs and go for streaming, sending out those five flicks would only cost them a quarter! Big difference between 5 dollars and 25 cents for delivering the same content right? I can see why they want to push the streaming model.
Not so fast.
Until now, the real secret to Netflix’s success has been the fact that subscribers get lazy and eventually procrastinate finishing the movies they receive, vegging in front of the cable while the red envelopes gather dust for longer and longer periods, thus freeing the company from the expense of having to constantly mail fresh content, yet keeping the all important meter running.
While I may be able to work their system and squeeze one or two DVDs out of them each week, experience tells Netflix I’ll soon begin backsliding. There's no end however to how many shows I can sit and stream like a slob. It’s really only limited by how much junk I can stand consuming, and as far as TV watching goes, that’s never been much of a limiting factor. It’s not just me either. Ordinary families routinely zip through the equivalent of two or three movies a day. More even.
If as predicted internet TV begins to replicate typical American OTA and cable TV viewing habits of 5-6 hours per day then Netflix is looking at streaming 3-4 programs per person daily, yet they’re still getting behind this in a big way. I mean Netflix boasts they stream stuff to anything. To smartphones. To laptops at truck stops. It’s all the same to them. This will probably entail streaming 100 shows a month to individual viewers, bringing that twenty-five cent distribution charge up to five dollars - per household member - or the very same amount they're paying right now to service my entire household and its barely lucrative U.S. mail subscription.
When Netflix succeeds in turning lazy mailers into mindless streamers and becomes the one stop shop for slack jawed TV gaping, that "secret" model goes out the window and with it all those profits.
Looking down the road I have no doubt that within a few years their presently envious streaming costs will match their presently onerous postage costs, and that’s going to be a huge problem for them. At that point these worrisome licensing fees that are now partially offset by shrinking delivery charges will weigh them down like a rusty shipping container stuffed with old CRTs. I have to think they know this, even if they never seem to mention it to analysts.
They may even know they’ll soon look back on their present snail mail business with envy.
In the meantime I’m enjoying their optimism, or whatever they call it, partying with Emma Peel, Kojak and the Bowery Boys, whenever I feel like having them on.
Ah, Kojak can’t make it. They lost the license.
January 22nd, 2011
Lawdit Predicts End of Illegal UK Copyright ISP File Sharing Settlement Letters
A Southampton-based solicitors firm, Lawdit, has predicted that next week could signal the beginning of the end of "speculative invoicing", a tactic used by dubious law firms to threaten and make money out of broadband ISP customers whom are "suspected" of unlawful copyright infringement (P2P File Sharing) activity.
The firms typically track alleged piracy by monitoring the IP addresses of internet users, which is assigned to your computer each time you go online and made public on P2P networks. This is not an effective way of determining a person's true identity because, at best, it will only reveal the connection owner (i.e. could be a shared network or business).
An IP can also easily be faked, hijacked, redirected and generally abused or used in ways that the systems employed by such trackers cannot detect. Furthermore the data itself can end up being unreliable due to natural discrepancies or errors (dates, times etc.) between an ISPs log files and that of the law firms.
Michael Coyle, Lawdit's founder, said:
"Lawdit was also contacted by three foreign companies asking for their assistance in becoming involved. I declined of course smelling the potential trouble. Of course it was an attractive proposition. You enter in to a loose and contrary to the rules 'no win no fee' obtain the list of names via a court order and send out threatening letters. The key was pitching the sums just right ie "we demand £600" or "we go to court and costs will escalate to the tens of thousands". Most I presume pay up. You go to a solicitor and he will ask for £500 on account of costs.
You may have downloaded the item in question, you may not have. Someone in your house, your son, etc may have downloaded it. Your name was on the bill, you have been identified, you are guilty therefore pay. The lawyers sat back and waited for the money to roll in and I am sure it did. Remember this has got nothing to do with copyright protection or the rights of the holders. It has everything to do with bullying and intimidation; the evidence in their possession proved one thing only; it identifies the bill payer nothing more."
Recently a number of things have begun to occur and look set to finally change this dynamic, which many consumers feel to be a tactic that has more in common with blackmail than real law work. Firstly, some big UK ISPs ( BT , PlusNet ) have started to stand up by actually challenging Norwich Pharmacal Orders (NPO), which request the release of related customer data.
Secondly the Solicitors Regulatory Authority (SRA) has officially referred several related firms, including ACS:Law (Andrew Crossley) and Davenport Lyons UK, to a Solicitors Disciplinary Tribunal (SDT) over their threatening letters.
In the latest twist even courts have now started to wake up to the problem and appear to be growing less inclined to tolerate such firms. Next week this could all come to a head when Judge Birss QC tackles ACS:Law and intermediary MediaCAT head on about some of their tactics (here).
Michael Coyle added:
"It is difficult to guess how many letters were sent out over a three year period but I would presume over a hundred thousand. The Lawyers have made a fortune but it looks like its all coming to an end as the Courts have finally woken up and started to throw out the cases which I hope on Monday will mean the end of this whole debacle.
A black mark goes to the courts for taking such a long time to wake up to the injustice of the campaigns, the Information Commissioner who was frankly a waste of space and for those Solicitors who ought to know better. Our hourly rates for copyright work are in the region of £200-500+VAT but if you have to resort to this type of work you are either not very good or greedy but I suspect its a combination of the two.
It remains to be seen who will pick up the baton. If they are Solicitors a word of warning, you cannot run a campaign of intimidation and expect to get away with it for as long as the other two firms especially when the only evidence in your possession is the name of the person who pays the bill. If you decide to start a new campaign then my guess is you will be before the SRA within 12 months."
On top of all that there's also the 2010 Digital Economy Act (DEA) to consider, although this is currently subject to a Judicial Review (here and here) in the early spring and as a result it's unclear whether or not its final form will need some adjustment. The recent developments have also delayed Ofcom's construction of a code to go alongside the DEA. More next week.
ACS:Law Try To Drop File-Sharing Cases, Fail To Appear in Court
Today a judge-ordered hearing took place in the Patents Court to decide how to handle all cases filed by ACS:Law against alleged file-sharers. Despite claims by the law firm that they have no fears of going to court, last week all the cases were dropped and today, supported by claims of “an unfortunate family accident”, company owner Andrew Crossley failed to attend the hearing. All this as a new, mysterious and already controversial company appears to front the entire operation. And immediately backs out.
Last month ACS:Law made a messy attempt at achieving default judgments in the Patents County Court against 8 internet connection owners who the company claimed infringed or allowed others to infringe copyright.
Representing MediaCAT, a middle-man company for movie companies involved in so-called “pay up or else” schemes in the UK, ACS:Law made a number of errors in their presentation and all 8 defaults were denied.
Following a review of all outstanding ACS:Law cases, Judge Birss QC found a total of 27 had been filed, many of them displaying what he described as “unusual features”. In order to decide how these cases should be handled in future, he ordered a directions hearing to take place today at the Patents Court in London.
Despite ACS:Law previously stating that they have no fear of taking cases to court, last week the 27 defendants started receiving new letters, some of them arriving as late as Saturday. The letter informed them that their case had been dropped. For those who have followed the antics of ACS:Law and their clients for the past several years, the news came as absolutely no surprise.
Despite this last minute manoeuvring, the hearing ordered by Judge Birss QC would go ahead today as planned.
This morning at 10:30 GMT the hearing got under way, with the announcement that the Judge would at the moment be refusing to accept the discontinuation of the cases. Lawyers for some of the defendants present said they would be seeking costs.
MediaCAT then informed the Court they were unsure what to do now. Why? Because even at this late stage ACS:Law had managed to introduce yet another ‘unusual feature’ into these cases. Citing “an unfortunate family car accident at the weekend” as a reason, ACS owner Andrew Crossley failed to turn up in Court.
Journalists present in the Court said they intend to confirm the validity of Crossley’s claim.
After discussion about whether or not MediaCAT are even licensed to bring these claims to court on their own, the hearing was eventually adjourned until 24th January.
Tomorrow we will report in depth on the more technical points of today’s hearing.
A reporter from the Court told TorrentFreak: “Crossley looks in serious trouble, both defence barristers are seeking all costs, including ‘wasted costs’ and order to show ‘due cause’ both of which require serious misconduct in order to be awardable; prima facie case put forward on that basis.”
Crossley will now have one week to recover from the weekend’s mishaps in order to participate fully on the 24th and help the Court understand the tangled web he and MediaCAT have created.
But not before they’ve tangled it up just a little bit more for good measure.
Last week, continuing the well-worn theme of conducting their business in the most confusing and controversial way possible, the MediaCAT and ACS:Law circus threw out yet another curved ball.
People who had outstanding pay-up-or-else letters from ACS:Law were informed by post that the law firm is no longer instructed by MediaCAT to send out letters or to enter into correspondence in file-sharing cases. ACS:Law would only get involved if there was a need to take legal action against people who refuse to pay, or so the letter claimed.
The new kid on the block, a previously dormant company called GCB Limited – whose sphere of businesses is reported as ‘Transport via Railways’ – was introduced to letter recipients by ACS:Law with orders that people should send payments to them now, not ACS:Law or MediaCAT.
Enclosed with the letters were copies of misleading court rulings, one of which – in breach of copyright – was taken directly from the BBC website.
Adding to the confusion, the return mailing address is for a firm of accountants called McLean Reid who were originally responsible for registering GCB Limited as a company. TorrentFreak contacted Mclean Reid to find out how they fit into all this.
“We have no connection with ACS:Law or MediaCat and have never had,” they told us. “We were the registered office of GCB until we became aware of this matter when we terminated the relationship.”
A worrying notice quickly appeared on the McLean Reid website.
GCB Ltd was formed by us and appears to be being misused by some third party. We are taking urgent steps to ensure that our name is not in any way abused in this connection.
“GCB Ltd was a dormant company formed by us at the request of a client, we were the registered office for convenience,” McLean Reid said in a further statement.
“Our client thought he was helping out an ‘associate’ of his by allowing that ‘associate’ to use this dormant company for a business venture (which we knew nothing about). Neither we, nor our client, knew it was going to be used for this purpose.”
According to a report on Consumer Action Group today, GCB Limited has just moved to a new address and is being run by a Mr David Fisher.
While we wait for the new directions hearing, there will probably be people reading this article who are in receipt of a letter from GCB Limited and are wondering what to do now.
Today, TorrentFreak called the GCB Limited ‘Payment Center’ telephone number in the UK to ask a few questions. We were greeted by a recorded message which stated that the letters people had received should be disregarded as GCB Limited were “no longer pursuing the matter stated in the letter.”
So, the advice is simple.
Don’t worry. Ignore these letters but keep them safe somewhere. But most importantly don’t pay them or any subsequent companies or law firms a single penny, at least until Judge Birss QC gets to the bottom of this whole sorry episode on the 24th.
Tune in tomorrow for our report on the more technical points of today’s hearing.
Update: Mclean Reid have issued another statement in response to a question from TorrentFreak about what they intend to do with any payments they may receive for GCB Limited.
We will take legal advice, however our intention is to return any post to sender should we receive any.
We are advised that the Director has taken the decision stop further trading through GCB Ltd in respect of alleged copyright infringement. We believe that he has moved swiftly to minimise the damage to his name in taking this decisive action. We are further advised that he was unaware of the background involved in these claims or the precise nature of the claims.
To that end anyone receiving letters from or on behalf of GCB Ltd in respect of copyright infringement should ignore these letters. We have been assured that no further action will be taken.
ACS Law Quietly Collects File-Sharing Fines
Nicole Kobie and Barry Collins
Controversial legal firm ACS Law is discreetly using another company to collect payments from alleged file-sharers.
ACS Law has long acted on behalf of copyright holders, demanding hundreds of pounds from people accused of file-sharing or threatening them with the prospect of court action.
The law firm is currently being investigated by the Solicitors Disciplinary Tribunal, following accusations by consumer watchdog Which? that it had “bullied” people into making payments for infringements that they didn’t commit.
ACS Law was in court earlier this week, attempting to have 27 cases of alleged file-sharing dropped.
However, the judge refused to drop all but one of the cases, giving the legal teams of the defendants the chance to fight for punitive damages from rights holder MediaCAT – which has accused the defendants of illegally downloading pornographic films.
Our client has instructed agents, GCB Limited, to correspond with you directly... in place of ACS Law solicitors
However, it has now emerged that ACS Law has been sending out letters to alleged file-sharers since the middle of December, requesting that out-of-court settlements of £475 are sent to another company, called GCB Limited.
“In order to allow us to focus on the issuing of proceedings, our client has instructed agents, GCB Limited, to correspond with you directly in relation to the above [file-sharing] matter in place of ACS Law solicitors,” the letter states.
The letter lists GCB’s registered office as that of Kent-based chartered accountants McLean Reid, who claim they have nothing to do with GCB.
A statement on the McLean website reads: “GCB Limited was formed by us and appears to be being misused by some third party. We are taking urgent steps to ensure that our name is not in any way abused in this connection.”
When PC Pro spoke to McLean Reid partner John Champion, he told us that GCB had been registered at that address on behalf of one his clients, David Fisher.
Champion said that Fisher had lent his dormant company to an associate, who had been collecting the file-sharing money without his knowledge. “He just decided to help a friend out,” Champion said. “He wanted a dormant company, and he said ‘Oh I’ve got one that’s not doing anything, you can have that’.”
EFF Asks Judge to Quash Gangbang Filesharing Lawsuits
Porn outfits abuse the law
ELECTRONIC RIGHTS GROUP the Electronic Frontier Foundation (EFF) has asked an Illinois judge to quash subpoenas issued in some predatory lawsuits involving the alleged illegal downloading of pornography.
According to the EFF's briefs, the pornographers are abusing the law in order to force settlement payments, despite serious problems with the claims alleged by the plaintiffs.
The move comes on the back of the EFF's efforts to stop alliances of content owners and lawyers who team up to extract settlements from thousands of defendants at a time.
Currently the technique involves improperly tying cases together and filing a lawsuit in a court out of the defendants' reach.
Porn makers have the advantage that there is the added pressure of embarrassment associated with their content. People tend to just pay up rather than arguing the merits of their case in court.
EFF intellectual property director Corynne McSherry said that while copyright owners have a right to protect their works, they can't use shoddy and unfair legal tactics to do it.
"We're asking the court to protect the rights of each and every defendant, instead of allowing these copyright trolls to game the system," McSherry said.
FilmOn Founder Forming Class Action Suit Against CBS, CNET
Solicits copyright holders who have been harmed by the LimeWire file-sharing software over the years to join in a “class action lawsuit against CNET for distributing the software with malicious intent to infringe,” and that they could share in damages that will likely be in the “many billions of dollars.”
A few weeks ago I mentioned how FilmOn founder Alki David had accused CNET, a subsidiary of CBS, of distributing “illegal software” that allows users to circumvent DRM technology in violation of the Copyright Act as well as other software that lets users illegally stream and download copyrighted material.
The countersuit is in response to claims by CBS and other TV broadcasters that FilmOn illegally retransmits copyrighted programming.
David is know pushing forward with that effort in a new video that solicits copyright holders to join in the fray as part of a class action lawsuit with “all legal fees paid.”
“You are cordially invited,” he says,”to join this class action lawsuit against CNET for distributing the [LimeWire] software with malicious intent to infringe your copyright. The damages are in the many billions of dollars and you could be a part of that award.”
He shows court documents from the LimeWire injunction issued last November that say visitors to CNET’s Download.com site downloaded copies of the file-sharing program “more than 152 million times” as proof of the extensive damage its done to copyright holders over the years.
“There is nothing illegal about file-sharing software,” he adds,” but distributing it with the malicious intent to infringe on copyright is.”
He also includes video clips showing several CNET, and therefore “paid employees of CBS,” advocating the use of illegal DRM-circumvention software.
From the Copyright Act:
CBS seems to want to have it both ways. If you intend to sue people for illegally retransmitting copyrighted programming then why is it okay to offer software that allows users to do just that, even going the extra mile and selling advertising on the download pages?
“It’s not about being the morality police,” he adds in the video. “This is about a fight that CBS picked with me and FilmOn what i was doing was perfectly legitimate. CBS, the leader of the pack, has been relentless in trying to kill FilmOn.”
Is CBS for piracy only when it comes out ahead?
“The hypocrisy CBS displays is extraordinary,” says David.
I agree. Now it remains to be seen how many copyright holders line up to join David’s class action lawsuit, but I don’t see why it would be any different from the ones initiated against companies like Real Networks for distributing its RealDVD backup software?
File-Sharing Operators Hit With Big Fines, Jail Sentences
A man and woman who operated a 50TB capacity file-sharing hub have been found guilty of copyright infringement offenses. Despite arguing that their 2,600 member system was set up merely for discussion, the pair now face paying damages to the IFPI of more than $1 million and suspended jail sentences totalling 7 months.
Following a music industry investigation, in June 2007 police in Finland carried out house raids against the operators of a Direct Connect hub.
The hub, which in very basic terms operated a little like a BitTorrent tracker, directing traffic between other members of the network, was known as Sarah’s Secret Chamber. It had around 1,600 users and most of them were sharing large amounts of copyrighted material.
In normal circumstances, most members of this type of network will bring some of their own content to the party, pooling resources so that the hub has a library of material. Very often bringing large amount of content is a requirement for membership. Sarah’s Secret Chamber had a fairly large capacity – around 50 terabytes.
For the purposes of a trial the IFPI converted 50TB to “750,000 illegal albums” and to compensate for this ill-gotten booty, copyright holders demanded some $2.7 million in compensation.
Yesterday, in a district court in Tammisaari west of the capital Helsinki, two of the site’s admins were sentenced. Rejecting their claims that the hub was set up for the purposes of discussion, the court ruled that the pair would have been fully aware of what was happening with their users and that copyright violations were taking place.
The 35 year-old woman and a 21 year-old man received suspended jail sentences of four and three months respectively. The court ordered the pair to pay compensation to rightsholders of 800,000 euros ($1.08 million), the bulk of it going to the IFPI.
“It is a shame to see how a private organization has the power to chase after people and can not even show any significant loss of income or any other harm to anyone,” said Finnish Pirate Party chairman Pasi Palmulehto in a statement. “Even real crimes do not normally result in such large sums of compensation.”
The fine even exceeds that handed down to seven operators of the Finnish BitTorrent site Finreactor. Last year they were ordered to pay a total of 680,000 euros in damages to copyright holders.
BitTorrent Inventor Demos New P2P Live Streaming Protocol
Bram Cohen, the inventor of the BitTorrent protocol that revolutionized file-sharing, is finalizing the code for his new P2P-live streaming protocol. With his efforts he aims to develop a piece of code superior to all other streaming solutions on the market today. The release of the application is still a few months away, but Cohen has shown a demo exclusively to TorrentFreak.
BitTorrent was the first widely adopted technology that made it possible to download large videos online in a timely fashion. It’s needless to say that BitTorrent inventor Bram Cohen unleashed a small revolution here, even though he never envisioned the technology being used to swap video.
However, a key characteristic of the young Internet is that it constantly evolves, and in 2005 video streaming was brought to the mainstream thanks to YouTube. This online video streaming revolution has hugely increased the use of bandwidth by individual consumers. At the same time it’s also resulting in huge bandwidth bills for streaming sites.
So as we near the 10th anniversary of BitTorrent its inventor Bram Cohen is finalizing a new protocol, this time aimed at P2P-live streaming. Although P2P-live streaming is not something new per se, Cohen thinks that his implementation will set itself apart from competitors with both its efficiency and extremely low latency.
“Doing live properly is a hard problem, and while I could have a working thing relatively quickly, I’m doing everything the ‘right’ way,” Bram Cohen told TorrentFreak last year when he announced his plans. He further explained that the BitTorrent protocol had to be redone to make it compatible with live streams, “including ditching TCP and using congestion control algorithms different from the ones we’ve made for UTP”
In the months that followed Cohen figured out most of this complex puzzle and the technology is now mature enough to show to the public. Although there’s still a lot of secrecy around the technical details, the BitTorrent team agreed to show TorrentFreak a demo in anticipation of the official release later this year.
Although it’s fascinating to see BitTorrent’s inventor waving at a computer, it is impossible to see how this compares to competing technologies without the option of testing a working version and having more technical details.
Over the years we’ve already seen a few working implementations and adaptations of the BitTorrent protocol that allow for P2P live streaming. Most notable is the SwarmPlayer, which has proven to work well with low latencies in real live tests, but usually supported by high bandwidth ‘fall-back peers’.
“The main areas of innovation relate to techniques he is using to manage latency at an unprecedented low while controlling network congestion,” BitTorrent’s VP of Product Management Simon Morris told TorrentFreak in our quest for more information.
“As outlined in the academic literature on live P2P content delivery, the management of live p2p streaming on the open internet requires split second reconfigurations to reroute content delivery in the fewest possible round trips between peers in the event of network hiccups.”
“Bram’s methods to manage network reconfiguration wrap rerouting together with a novel approach to congestion control. Obviously we’ll be happy to share more technical details in due course, but only once the technology reaches a level of maturity that it makes sense to share.”
This means that the wait continues, and we were told that the official release will take at least a few more months. For some reason we think that it might take until July, which makes sense PR-wise because the BitTorrent protocol then officially celebrates its tenth anniversary.
Truly Decentralized BitTorrent Downloading Has Finally Arrived
BitTorrent is a great technology to share files both quickly and efficiently, but like most other P2P-technologies it has an Achilles’ heel. The download process relies in part on central servers that can crash or go offline for a variety of reasons. To address this vulnerability the first truly decentralized BitTorrent/P2P client has been developed, meaning that no central trackers, or even BitTorrent search engines are required to download movies, software and music.
BitTorrent is branded as a peer-to-peer technology, but despite this label the downloading process still relies heavily on central servers. In the first place there are the BitTorrent search engines and indexes such as The Pirate Bay and isoHunt. These are needed to search for content and to grab the .torrent file one needs to download a file.
Besides these torrent sites, most BitTorrent downloads are still managed by so-called trackers. These servers coordinate the download process and make sure that people can find others who are sharing the files they want to download. To a certain degree, trackers are no longer needed with ‘trackerless’ technology such as DHT, but even DHT often uses a central server to get a torrent started.
Finally central servers are used by moderators to help hunt spam and malware. All file sharing programs without such central checking have become practically useless over time.
In the last years these ‘central server’ vulnerabilities have caused a number of minor inconveniences for torrent users. When trackers go offline, downloads usually slow down or may stop entirely, and when a torrent search engine such as The Pirate Bay has technical issues, users have to search for alternatives.
To address these issues, ideally BitTorrent downloads should no longer require a central server. P2P technology should not only facilitate the downloading and sharing process, but also the searching and storage of torrent files. This may sound like a technology that might only become available in the distant future, but in reality it already exists.
The latest version of the Tribler BitTorrent client (Win, Mac and Linux), released only a few minutes ago, is capable of all the above and many more things that could be described as quite revolutionary. The client combines a ‘zero-server’ approach with features such as instant video streaming, advanced spam control and personalized content channels, all bundled into a single application.
The Tribler team has come a long way to reach the point they’re at now. We first reported on the ‘tax-payer-funded’ BitTorrent client in 2006, and in the years that followed tens of millions of dollars have been spent on the client’s development resulting in the latest 5.3 release.
Despite the fact that only a few thousand people are using Tribler on a monthly basis, in technological terms it is one of the most advanced clients. People who install the client will notice that there’s a search box at the top of the application, similar to that offered by other clients. However, when one does a search the results don’t come from a central index. Instead, they come from other peers.
In fact, Tribler’s search functionality even has an auto-suggest function which is also built to work based on P2P data instead of a central server. Remarkably enough the response times for the searches and the auto suggest are both pretty fast, under a second in 99% of cases.
As for the downloads themselves, if one clicks on a ‘torrent’ in the search result, the meta-data is pulled in from another peer and the download starts immediately. Tribler is based on the standard BitTorrent protocol and uses regular BitTorrent trackers to communicate with other peers. But, it can also continue downloading when a central tracker goes down.
Tribler users can choose if they want to play the downloading file directly (if it’s video) with the built in VLC player, or wait for it to finish first. In addition to searching for files, users can also create their own channels or subscribe to those of others. Again, this is all based on technology that doesn’t require a central server. Other new features are subtitle integration, support for magnet links and advanced spam controls.
Spam control in a P2P program that actually works is something not seen before. The Tribler spam mechanism revolves around user generated “channels”, which may contain several thousands of torrents.
When people like a channel they can indicate this with “mark as favorite”. When more people like a channel, the associated torrents get a boost in the search results.
The idea is that spam and malware will automatically be pushed down to non-existence in search results and the majority of users will favor the channels they love. In scientific terms, this is a classic case of survival of the fittest and group selection at work. Again, this is done without central servers.
With the combination of P2P-based search, torrent downloads and moderation, BitTorrent sites have been almost rendered obsolete. Although we don’t see torrent sites going away any time soon it’s ‘assuring’ to see that there are alternatives. Tribler’s cutting edge technology allows users to search for torrents and download files without the need for any central server. A revolution, not only for BitTorrent but for P2P in general.
As mentioned before, the Tribler project is funded by tax payers money, most of which comes from EU grants. However, according to Dr. Johan Pouwelse, leader of the Tribler project at Delft University of Technology, those who complain that spending all this money on the development of a BitTorrent client is a waste, are wrong.
“Tax payer money is going into Internet research, which happens to use a very powerful technology called BitTorrent. That’s different. On a wider scale a few hundred million euros of research money is being spent on making computer networks more robust and improving video streaming. I think that is money well spent,” Pouwelse told TorrentFreak.
Eventually, Pouwelse and his team hope to shape the future of Internet-based video delivery, and this won’t just be limited to PCs either. “Our architecture has unbounded scalability and in principle can work on all TVs, phones and other devices in the world simultaneously,” he said.
“22 scientists are working full time in the P2P research team i’m coordinating at Delft University of Technology. A lot of the algorithms and Open Source code we write ends up in Tribler. Roughly 6 other universities or organisations contribute code regularly to Tribler. It’s by far the largest science-driven P2P effort around,” Pouwelse added.
Aside from the fact that the technology itself is both exciting and fully operational in the real world, there are some issues that have to be overcome. Due to the low userbase of Tribler, the total number of torrents that are findable is relatively low. About 20,000, which is quite low compared to the millions of torrents most BitTorrent sites index.
This means that most of the popular content is available but that obscure files will be harder to find. The only way to really change this is when more people start to use the client, which might take a few more domain seizures than we’ve seen thus far.
Update: A message from Dr. Johan Pouwelse.
Many readers wonder why this is new compared to Kazaa, Exeem, LimeWire, Gnutella, eMule. Well, that explanation is a bit technical, here it goes. All these client either contain spam or use servers. For instance, Limewire Cooperation was sending out digitally signed instructions to block anti-piracy companies and spammers in general (157 pages of details).
Tribler does not use spam protection that originates exclusively from some cooperate headquarter or Swedish moderator server and does not use servers for search. After launching Tribler it quickly fills its integrated SQL light engine (pdf) with discovered content. It has a bias to talk to peers with the same download taste. Similar to how Google keeps out the Spammers using PageRank, Tribler uses a distributed reputation system (pdf).
Update: As pointed out by readers, there are other P2P-technologies that work fully decentralized, such as Kademlia. The decentralized “revolution” is limited to BitTorrent only.
US Probes Wikileaks' File Sharing; Wikileaks Denies Accusations
Rumors are circulating that Wikileaks may have used music- and image-sharing media networks to acquire classified documents. Bloomberg TV confirmed today that US government officials have probed Wikileaks' file sharing practices. Concerns were raised that Wikileaks has used file sharing for possible inappropriate purposes or inappropriate content (even pornographic).
A spokesperson for Wikileaks said that the accusations are unfounded. In an email, WikiLeaks' attorney Mark Stephens commented that the claims are “completely false in every regard."
The computer company that is alleged to have evidence of Wikileaks misconduct is Tiversa Inc., a company based in Pennsylvania.
Tiversa's Chief Executive Officer Robert Boback claimed that the US government is examining evidence that Tiversa obtained about Wikileaks. “WikiLeaks is doing searches themselves on file-sharing networks,” Boback said in an interview. “It would be highly unlikely that someone else from Sweden is issuing those same types of searches resulting in that same type of information.”
Earlier this week, Rudolf Elmer, a banker who gave customer information to Julian Assange, was arrested. His arrest is believed to be related to Wikileaks' inappropriate online file sharing practices.
This article may include mentions of rumors, chatter, or unconfirmed information. Readers should beware that unofficial information may change quickly based on increased speculation, clarification, or release of official news.
Better than TSA: Computer Scans More a Beneﬁt than a Violation
Editorial Board | The Daily Tar Heel
ITS and Network Access Control is now “scanning” UNC-network computers in residence halls in order to notify network users when they practice illegal media file sharing.
The positive ramifications of this new policy seem to trump any misplaced assertions of privacy infringement, especially considering that the only laptops under scrutiny are part of a University-run system, which reserves some right to monitor its users, particularly when their actions could reflect poorly upon the University and cost money.
The system will contact file-sharers via pop-up if it detects certain file sharing programs. The efforts of monitoring campus file-sharing are not intended to incriminate network users, and there are absolutely no legal repercussions upon receiving the notice.
This system of campus software monitoring certainly possesses an air of Orwellian “Big Brother” supervision. But it’s better that the University inform you of your file sharing before the recording industry does.
In today’s society, the lines of what constitutes privacy infringement seem to be growing increasingly blurry.
But the only goal of the policy is to inform users who may be unaware of the hazards and consequences of illegal file-sharing.
The pop-ups make the user additionally informed of the hazards of illegal file-sharing procedures. From there, the file-sharer has been granted fair warning and is left with their own liberty to continue downloading as they please.
Avid file-sharers may even be surprisingly satisfied with the new policy as it is likely to deter risk-averse file sharers and increase the network’s bandwidth.
So, after Tuesday, have no fear upon reception of this pop-up. It is meant to inform, not to incriminate. Use it as an opportunity to further educate yourself about file-sharing and form your own decisions about how to maximize enjoyment from your laptop.
Music Industry Working on Global Copyright Database
The music industry is working to create a global repertoire database to make it easier and faster for new online music services to come to market.
The industry estimates that 100 million euros each year could be saved in copyright administration fees and returned to song writers and the industry by simplifying the current system.
In recent years, music labels and publishers have worked hard to license their music on an array of platforms including mobile networks, mobile handsets, websites, Internet service providers and pay-TV groups.
The long, complex process makes it difficult for many new services to get off the ground, as a new offering has to sign licensing agreements with the many groups that hold the recording rights and the music publishing rights.
Within publishing -- the part of the business that makes money every time a song is played on the radio, in adverts, films or online -- payments have to go to all the song writers on each track. One song can have many writers and they are often all signed to different publishers.
A service that operates in different countries would also need to agree terms with the royalty collection societies of each country it operates in, making for a very tangled affair.
However there is currently no database or central point showing which publisher or song writer unequivocally owns which rights, meaning it is hard to know where to start.
Now, consultancy Deloitte is working to develop a global repertoire database (GRD) for the publishing industry following input from Universal Music Publishing and EMI Publishing, some of the major royalty collection societies and retailers such as Amazon and iTunes.
The groups were asked by the European Commission to look into the issue.
"As an industry there have been many false dawns over the years but at last we seem to have woken up to the fact that we have to change," Neil Gaffney, Executive Vice President at EMI Music Publishing UK told Reuters.
"This GRD is a game changer because for the first time we will have an assured, common, trusted view of what we represent, own and manage.
"One of the complexities for a new services is people say they didn't know who to pay. It gets rid of one of the fundamental issues and means we can turn our attention to those people who use music illegally."
Deloitte partner Neil Allcock said they hoped elements of the database would be up and running very quickly, and aim to be fully functional within 18 months to 2 years. A similar project is also being looked at for the recorded music business.
(Editing by David Cowell)
IRIS Distribution Targets File Sharing
An odd campaign by IRIS Distribution, a record label representative, is targetting children with the slogan “I share everything but my music.” The image of adorable woodland creatures depicting an “i’m totally ignoring you” rabbit wearing headphones and a confused looking raccoon attempting to share a ball with his rude buddy attempts to get at the problem of digital file sharing.
IRIS, who’s clients have included Chemikal Underground, EMI, Mint Records and Ninja Tune, is putting the illustration on t-shirts for children (teach them early?) and bundling it with a kids album by Kimya Dawson (who, ironically, shares several MP3s for free download on her site) on K Records.
I have my own opinions about how silly this is, and Carl Wilson over at Zoilus thinks it’s so ill conceived it “practicaly serves as an advertisement for the opposite attitude,” but I’ll let you draw your own conclusion.
Creating A Hit: 8 Hour Challenge
A young musical duo disenchanted with the state of pop music claim the product put out by record companies is such simplistic crap anyone can put together a top 40 track in 8 hours.
So they do.
In less time than that.
Universal and Sony Music Plan 'Instant Pop' to Beat Piracy
• New singles to go 'on air, on sale' simultaneously
• Record labels target X Factor generation
Ten years after piracy first began to ravage the music industry, Britain's two biggest record labels will finally try to play their part in stopping it, by making new singles available for sale on the day they first hit the airwaves.
Universal and Sony Music – home to Take That and Matt Cardle, respectively – hope the effort will encourage the impatient X Factor generation to buy songs they can listen to immediately rather than copying from radio broadcasts online.
David Joseph, the chief executive of Universal Music, said: "Wait is not a word in the vocabulary of the current generation. It's out of date to think that you can build up demand for a song by playing it for several weeks on radio in advance."
Songs used to receive up to six weeks radio airplay before they were released for sale – a practice known as "setting up" a record. But the success of selling the winner's single immediately after the X Factor final has made record bosses think again.
"What we were finding under the old system was the searches for songs on Google or iTunes were peaking two weeks before they actually became available to buy, meaning that the public was bored of – or had already pirated – new singles," Joseph added.
Sony, which will start the "on air, on sale" policy simultaneously with Universal next month, agreed that the old approach was no longer relevant in an age where, according to a spokesman for the music major, "people want instant gratification".
Cardle, who signed to Sony via an agreement with Simon Cowell, sold 439,000 copies of When we Collide when it made the Christmas number one, the track having gone on sale just as the X Factor final ended on television.
Industry insiders believe instant sales will make it easier for records to climb the charts as excitement about a new song builds, developing a trend first seen when download sales joined the mainstream.
In the past, heavy pre-release marketing had tended to mean a new single crash-landed at its peak position on its first week of release – making the top 40 a dull narrative of short-lived new entries leavened by falling songs and fading glamour.
Jessie J's Do it Like a Dude went on sale and on radio at the beginning of December, and the 22-year-old's R&B single climbed steadily to reach number 5 last week. As more singles follow suit, the charts will briefly become uneven as songs adopting the old and the new marketing policies mix.
Piracy remains a crippling problem for the British music business, where the overall market fell by nearly 6% in 2010 and album sales slumped 7%, despite the success surrounding Robbie Williams's rejoining Take That and Simon Cowell's television-fuelled hits factory.
Although pirating songs from the radio is as old as tape recorders, the record companies believe the move will show ministers that they are playing their part in fighting copyright theft.
Universal and Sony have both notified Ed Vaizey, the minister for culture and the creative industries, of their plans.
French Court Convicts Warner Head, Ex-Vivendi Boss
A French court, in a surprise ruling, on Friday convicted and fined Warner Music Group chairman and CEO Edgar Bronfman Jr. for insider trading and former high-flying Vivendi CEO Jean-Marie Messier for misusing company funds and misleading investors.
Bronfman, a former executive vice president of Vivendi Universal, was fined €5 million ($6.7 million) and given a 15-month suspended sentence for insider trading around the Vivendi media conglomerate when he was a top executive there. Messier was handed a three-year suspended prison sentence and a €150,000 fine.
The unexpected convictions came despite prosecutor Chantal de Leiris' recommendations that the two men and other ex-Vivendi executives be cleared of all charges for lack of evidence that they duped investors.
Bronfman and Messier said they would appeal the verdict, which deals a blow to the two men once considered masterminds of massive mergers in the media and telecommunications sectors.
In a statement, Messier called the decision "incomprehensible."
"I always managed this company with integrity, which is why this judgment is profoundly unjust," he said.
Messier was acquitted of charges that he manipulated Vivendi's stock price during his leadership of the company. His conviction for misusing company funds related to a €20 million severance package that he eventually renounced.
Three others on trial were acquitted.
The conviction came even though the prosecutor had recommended acquittal following the high-profile Vivendi trial last year. She said the executives did not have enough information themselves about the company's health.
Bronfman's lawyer, Thierry Marembert, said he is "disappointed" that the court did not follow the prosecutor's recommendations and said he would appeal the case and "continue to vigorously defend against this charge." Bronfman has denied wrongdoing.
The head of a small shareholders' group that was a party to the case, Didier Cornardeau of APPAC, called the verdict a "huge victory."
Messier was a star of the French business world during his 1996-2002 reign at Vivendi, when the company expanded from the water utility Generale des Eaux into a major media group.
However, Vivendi's shares lost more than 80 percent of their value as the company ran up billions of dollars of debt in making acquisitions, including the Universal film studios and music label in the United States.
By the time Messier left, Vivendi Universal was swamped under €35 billion in debt — prompting the company to sell many of its businesses, including Universal, to right itself.
Messier was sacked by Vivendi's board of directors in 2002, and the company underwent drastic restructuring.
In a similar trial, the U.S. District Court in Manhattan ruled a year ago against Vivendi SA and in favor of U.S. and European shareholders who said the media group had lied to the public about its shaky finances. The court ruled that Messier himself was not liable.
Warner Music Shares Surge on Deal Hopes
In one stroke Edgar Bronfman Jr. is more than $9 million richer, by another, he is nearly $7 million poorer.
Shares of Mr. Bronfman’s company, Warner Music Group, surged as much as 25 percent, to $5.91, in trading on Friday morning after DealBook broke the news that the company had hired Goldman Sachs to seek out potential buyers while it continues explore an acquisition of EMI.
Mr. Bronfman, the chairman and chief executive of Warner Music, owns 5.18 percent of the company, according to Thomson Reuters data, and the jump in the stock price has increased the value of his holdings on paper by more than $9 million.
Mr. Bronfman has more than the future of Warner Music to worry about, however. A French court found him guilty on Friday of insider trading during his time as vice chairman of Vivendi, from 2000 to 2003. He was fined 5 million euros, or $6.8 million.
Jean-Marie Messier, the former chief executive who masterminded Vivendi’s transformation from water company to media conglomerate, was also found guilty of misusing company money. Both men received suspended sentences and both said they would appeal.
Yet the legal setback will seem insignificant if Warner Music clinches a deal — and that could mean a big pay day for Mr. Bronfman.
If the stock continues to rise and reaches $7, that will trigger the vesting of shares to the chief executive, according to a securities filing made Wednesday.
Warner Music lowered the per-share hurdles in order for Mr. Bronfman’s shares of restricted stock to vest. If the company keeps its stock price at $7 or above over 60 consecutive trading days, Mr. Bronfman will get 825,000 shares. The initial price had previously been set at $10. An additional 825,000 shares will vest if the price reaches an $8-and-60-day plateau and another 1.1 million shares at $9 and $10.
The price hurdles for vesting were also lowered for Lyor Cohen, the company’s vice chairman.
“A sale might accelerate the vesting process,” Bank of America-Merrill Lynch analysts noted on Friday.
Sony v. Hotz: Sony Sends A Dangerous Message to Researchers -- and Its Customers
Co-authored by Corynne McSherry and Marcia Hofmann
For years, EFF has been warning that the anti-circumvention provisions of the Digital Millennium Copyright Act can be used to chill speech, particularly security research, because legitimate researchers will be afraid to publish their results lest they be accused of circumventing a technological protection measure. We've also been concerned that the Computer Fraud and Abuse Act could be abused to try to make alleged contract violations into crimes.
We've never been sorrier to be right. These two things are precisely what's happening in Sony v. Hotz. If you have missed this one, Sony has sued several security researchers for publishing information about security holes in Sony’s PlayStation 3. At first glance, it's hard to see why Sony is bothering — after all, the research was presented three weeks ago at the Chaos Communication Congress and promptly circulated around the world. The security flaws discovered by the researchers allow users to run Linux on their machines again — something Sony used to support but recently started trying to prevent. Paying lawyers to try to put the cat back in the bag is just throwing good money after bad. And even if they won — we'll save the legal analysis for another post — the defendants seem unlikely to be able to pay significant damages. So what's the point?
The real point, it appears, is to send a message to security researchers around the world: publish the details of our security flaws and we'll come after you with both barrels blazing. For example, Sony has asked the court to immediately impound all "circumvention devices" — which it defines to include not only the defendants' computers, but also all "instructions," i.e., their research and findings. Given that the research results Sony presumably cares about are available online, granting the order would mean that everyone except the researchers themselves would have access to their work.
Not content with the DMCA hammer, Sony is also bringing a slew of outrageous Computer Fraud and Abuse Act claims. The basic gist of Sony's argument is that the researchers accessed their own PlayStation 3 consoles in a way that violated the agreement that Sony imposes on users of its network (and supposedly enabled others to do the same). But the researchers don't seem to have used Sony's network in their research — they just used the consoles they bought with their own money. Simply put, Sony claims that it's illegal for users to access their own computers in a way that Sony doesn't like. Moreover, because the CFAA has criminal as well as civil penalties, Sony is actually saying that it's a crime for users to access their own computers in a way that Sony doesn't like.
That means Sony is sending another dangerous message: that it has rights in the computer it sells you even after you buy it, and therefore can decide whether your tinkering with that computer is legal or not. We disagree. Once you buy a computer, it's yours. It shouldn't be a crime for you to access your own computer, regardless of whether Sony or any other company likes what you're doing.
Big Content to ICANN: Make it Easier for Us to Challenge Domain Suffixes
A small battalion of music copyright trade associations have written to the global agency in charge of domains to express their displeasure with the group's latest Draft Application Guidebook for generic Top-Level Domains (gLTDs). Those are the domain suffixes that we've all come to know and possibly love, such as .com, .org, and .info.
"Our overriding concern is to ensure that any music themed gTLD is used productively and responsibly, and not as a means to facilitate copyright or trademark infringement," wrote Victoria Scheckler, Deputy General Council of the Recording Industry of America, to the Internet Corporation for Assigned Names and Numbers (ICANN) on January 5.
The latest draft guidebook (or "DAG" as the letter acronyms it) has "raised the bar dramatically for community objections," creating an "ultra high standard" for them. Thus, "it seems unlikely that any community objection will prevail," Scheckler insists. "Under the current proposed standard, we fear that we will have no realistic ability to object if a pirate chooses to hijack a music themed gTLD to enable wide scale copyright infringement of our works."
Then comes this barely veiled threat: "We strongly urge you to take these concerns seriously," the letter warns. "We prefer a practical solution to these issues, and hope to avoid the need to escalate the issue further."
Signed: RIAA, the National Academy of Recording Arts and Sciences, the Songwriters Guild of America, and 12 other groups.
What has ICANN proposed that so offends these organizations? Some background on the guidebook itself is in order. The document offers rules for how to apply for a gTLD, but it also explains how to object to another group's application for a gTLD like .music or .songs or .movies or such (these don't exist yet but there's talk of them).
The DAG is still a work-in progress, with various versions being vetted. The May 28, 2010 draft offered four grounds for objection.
1. String Confusion. The sought after gTLD is "confusingly similar to an existing one, or one making its way through the application stage.
2. Legal Rights. The applied-gTLD somehow "infringes" on the rights of the protesting group.
3. Morality and Public Order. The proposed gTLD is "contrary to generally accepted legal norms of morality." One guesses that the gTLDs '.extortion' or '.kickstraydogs' would fall under this rubric.
4. Community Objection. "There is substantial opposition to the gTLD application from a significant portion of the community to which the gTLD string may be explicitly or implicitly targeted." See '.lawyerssuck' or '.justinbieberfansmustdie.'
And as they are stipulated in legal disputes, the May edition offered standards for standing to object to a proposed gTLD. Here they are:
* String confusion: Existing TLD operator or gTLD applicant in current round
* Legal rights: Rightsholders
* Morality and Public Order: No limitations on who may file—however, subject to a 'quick look' designed for early conclusion of frivolous and/or abusive objections
* Community: Established institution associated with a clearly delineated community
The guidebook also included guidelines for "detriment"—that is, as in various kinds of lawsuits, the protestor has to show that she would really be harmed by this proposed gTLD. In the May draft the detriment section was introduced as follows:
"Detriment—The objector must prove that there is a likelihood of detriment to the rights or legitimate interests of its associated community."
But in the newer November draft, to which RIAA refers, another word, phrase, and sentence have been added, which we have italicized:
"The objector must prove that the application creates a likelihood of material detriment to the rights or legitimate interests of its associated community and the broader Internet community. An allegation of detriment that consists only of the applicant being delegated the string instead of the objector will not be sufficient for a finding of material detriment."
This is the addition to which RIAA particularly objects. "We do not believe this is appropriate, or in the interests of the global community," Scheckler's letter insists, "and respectfully request that the 'material detriment' standard revert back to the prior standard, and that the requirement to show material detriment to the broader Internet community be removed."
It seems odd to us that these signers, who ceaselessly characterize their calls for tougher intellectual property laws as crusades on behalf of consumers, would suddenly retreat from the challenge posed here. Their grievance might leave some with the impression that what RIAA and company really want is to dominate the rollout of music oriented gTLDs to discourage independent content sharing sites, even if they include a system for filtering out infringing materials, as do YouTube and RapidShare.
"We strongly urge you to take these concerns seriously," RIAA's letter concludes, "and expeditiously implement appropriate changes to the DAG to address these critical concerns."
Ballmer to Hu: 90% of Microsoft Customers in China Using Pirated Software
Microsoft CEO raises concerns to Chinese president about intellectual property protection
While Chinese President Hu Jintao knew he'd face some tough questions when he came to the United States this week, he probably figured most of them would come from Barack Obama and members of Congress. But you can add Microsoft CEO Steve Ballmer to that list.
Ballmer used Hu's official visit as an opportunity to point out that 90% of Microsoft software users in China didn't pay for it. The comments were part of a discussion about intellectual property protection.
While Chinese President Hu Jintao knew he'd face some tough questions when he came to the United States this week, he probably figured most of them would come from Barack Obama and members of Congress. But you can add Microsoft CEO Steve Ballmer to that list.
Ballmer used Hu's official visit as an opportunity to point out that 90% of Microsoft software users in China didn't pay for it. The comments were part of a discussion about intellectual property protection.
Ballmer's exact quotes were not released, but President Obama discussed Ballmer's concerns during a press conference.
According to a White House transcript, Obama said:
"We're making progress on making sure that the government procurement process in China is open and fair to American businesses. And we've made progress as a consequence of this state visit.
"Some of it has to do with intellectual property protection. So we were just in a meeting with business leaders, and Steve Ballmer of Microsoft pointed out that their estimate is that only 1 customer in every 10 of their products is actually paying for it in China. And so can we get better enforcement, since that is an area where America excels -- intellectual property and high-value added products and services."
Pirated copies of Windows and other Microsoft products are a financial threat the company fights on a regular basis, and as Ballmer's comments point out, the rate of software piracy is particularly high in China. One consequence of people using pirated software is that they fail to update their software to newer, safer versions. This perhaps explains why nearly half of Chinese Internet users still use the 10-year-old Internet Explorer 6, rather than more modern browsers.
A Microsoft spokesperson did not answer questions about how the company calculated the software piracy statistics, but pointed to a brief blog post published Wednesday on Microsoft's Technet site. The post says that "Microsoft CEO Steve Ballmer today joined a number of U.S. and Chinese business leaders for a meeting at the White House with President Barack Obama and Chinese President Hu Jintao. At the meeting, Ballmer highlighted the importance of intellectual property, or IP, to the future success and economic development of both countries, and noted the serious IP piracy problems that currently exist in China."
Obama didn't detail any specific measures the U.S. and China would take to help Microsoft and other vendors fighting software piracy. "The Chinese government has, to its credit, taken steps to better enforce intellectual property," Obama said. "We've got further agreement as a consequence of this state visit. And I think President Hu would acknowledge that more needs to be done."
Microsoft has long jealously guarded its patent portfolio, which is expanding all the time. Microsoft earned more than 3,000 new U.S. patents in 2010, behind only IBM and Samsung.
The Companies Who Support Censoring The Internet
A group of companies sent a letter to to Attorney General Eric Holder and ICE boss John Morton today (with cc's to VP Joe Biden, Homeland Security boss Janet Napolitano, IP Czar Victoria Espinel, Rep. Lamar Smith, Rep. John Conyers, Senator Patrick Leahy and Senator Charles Grassley), supporting the continued seizure of domain names they don't like, as well as the new COICA censorship bill, despite the serious Constitutional questions raised about how such seizures violate due process and free speech principles. While many reporting on this letter refused to actually post a copy of the full letter, kudos to Greg Sandoval over at News.com for doing so (full text also included after the jump on this post).
The companies try to present a united front that censoring the internet is a good thing. It includes the usual suspects of Viacom and NBC Universal on the content side and Louis Vuitton and Tiffany on the counterfeiting side, but there are a few other interesting names: such as Monster Cable (never met an IP law it didn't want to abuse, apparently), the NBA, MLB and NFL (sports leagues unite in censorship!) as well as Voltage Pictures, famous for suing thousands of fans for downloading Hurt Locker. Activison, which has become increasingly aggressive on IP issues lately is on the list as well, of course. Anyway, here's the full list of companies that support censoring the internet, because they're too lazy to compete in the marketplace or innovate when that market changes:
* Nike - Beaverton, OR
* Achushnet - Fairhaven, MA
* Curb Music Publishing - Nashville, TN
* NBC Universal - New York, NY
* Viacom - New York, NY
* Callaway - Carlsbad, CA
* Cleveland Golf - Huntington Beach, CA
* Rosetta Stone - Arlington, VA
* Activision - Santa Monica, CA
* Adidas Group - Portland, OR
* Xerox - Norwalk, CT
* Hastings Entertainment, Inc. - Amarillo, TX
* Fortune Brands - Deerfield, IL
* Coty Inc. - New York, NY
* EDGE Entertainment Distribution - Streetsboro, OH
* Oakley, Inc. - Foothill Ranch, CA
* PING - Phoenix, AZ
* Louis Vuitton - New York, NY
* D'Addario and Company - Farmingdale, NY
* Monster Cable Products, Inc. - Brisbane, CA
* Tiffany and Co. - New York, NY
* Farouk Systems, Inc. - Houston, TX
* Beam Global - Deerfield, IL
* Chanel USA - New York, NY
* True Religion Apparel, Inc. - Vernon, CA
* Concord Music Group - Beverly Hills, CA
* Village Roadshow Pictures - Beverly Hills, CA
* National Basketball Association - New York, NY
* National Football League - New York, NY
* The Collegiate Licensing Company/IMG College - Atlanta, GA
* Anderson Merchandisers - Amarillo, TX
* Trans World Entertainment Corporation - Albany, NY
* Timberland - Stratham, NH
* Major League Baseball - New York, NY
* Lightening Entertainment/Mainline Releasing - Santa Monica, CA
* Sierra Pictures - Beverly Hills, CA
* Voltage Pictures LLC - Los Angeles, CA
* Worldwide Film Entertainment LLC - Westchester, CA
* Nu Image, Inc. - Los Angeles, CA
* Burberry Limited - New York, NY
* Big Machine Records - Nashville, TN
* The Little Film Company - Studio City, CA
* Columbia Sportswear Company - Portland, OR
These companies are clearly trying to protect their own business interests, but it seems reasonable to let them know that you don't appreciate them seeking to censor the internet. If you haven't been following this story, and want to understand the details, we've discussed why COICA is all about censoring websites without due process and in violation of the First Amendment. We've also discussed how the ongoing (pre-COICA) domain name seizures were riddled with serious errors that appear to violate the law as well, including seizing the domains of blogs regularly used and recognized within the music industry based on evidence involving songs sent by the record labels themselves.
And, of course, none of this is to say that violating copyright or trademark laws should be allowed. But we have a system to deal with such things: you file a lawsuit, you have an adversarial hearing in a courtroom (i.e., due process) and you let both sides present their case. COICA and these domain seizures look to avoid all of that. And that's a big, big problem. That these companies would support such censorship and leapfrogging over due process suggests that they're companies not worth doing business with.
We run companies large and small that represent diverse aspects of America's intellectual property community. While our employees live in different regions of the country, and work to produce a variety of goods and services, they have several important things in common - they work hard, they are committed to quality and innovation and they welcome competition. However, allowing others to unfairly compete by stealing the ideas, innovations and intellectual property rights created by our employees cannot be tolerated. This theft diminishes our ability to keep and create jobs, and makes it far more difficult to attract the capital needed to invest in new products and services. In order to protect our free enterprise system, and the standard of living it has contributed to our nation, it is critical that we multiply our efforts to identify and punish the criminals who steal what we create and produce.
Thus, we appreciate the effort and energy behind Operation in Our Sites. The actions announced on November 29, 2010 once again demonstrated that, just as in the physical world, prosecutors and courts can judiciously assess evidence and distinguish between legitimate businesses and criminal enterprises that flout the law and profit from the ingenuity of others. We believe that the online marketplace can only work for consumers and creators if there is respect for property rights and the rule of law - and urge you to continue to act against the kinds of domains that you have targeted. Unfortunately, there are far too many sites stealing from our businesses but we believe that your efforts will drive consumers to the many legitimate online ventures and services that we have worked hard to foster and support.
We encourage you to work with your colleagues in the Administration and the Congress toward enactment of the principles central to S. 3804 - the Combating Online Infringement and Counterfeits Act. The legislation crafted by Senators Leahy and Hatch was unanimously approved by the Senate Judiciary Committee and will undoubtedly be reintroduced this congress. The proposal expounds upon the law enforcement techniques at the heart of "Operation In Our Sites" and will ensure that rogue sites cannot evade U.S. jurisdiction by escaping offshore to foreign-based registrars, registries and country codes in order to peddle stolen American intellectual property back into the U.S. market. In addition, the Leahy-Hatch proposal provides an entirely new level of protection for U.S. rights holders by establishing the legal framework necessary to disrupt the business models of the illicit, offshore sites by starving them of the financing, advertising and access to consumers upon which they depend. The carefully balanced measure would allow American law enforcement officials and U.S. courts to deny thieves the ability to use the Internet to enter the U.S. market and undermine our businesses while reaping financial gain for themselves.
We hope that you will continue dedicating resources to Operation in Our Sites and work toward the Obama Administration's endorsement of the Leahy-Hatch legislation.
Francis Ford Coppola On Art, Copying And File Sharing: We Want You To Take From Us
Paul Tamm points us to a really wonderful interview with filmmaker Francis Ford Coppola, which touches on a whole variety of different topics, but a couple of quotes are likely to be interesting to folks around here. For example, he's asked about copying works of other filmmakers and whether or not he tries to "veer away" from the masters of the craft to create his own style, and he responds brilliantly:
Immediately after this, he's asked about business models, and he notes:
More on OpenBSD IPsec
A little more on OpenBSD’s IPsec.
Theo confirms that Gregory Perry did work at NETSEC and that Jason Wright and Angelos Keromytis were funded by NETSEC as well. Theo says he wasn’t aware at the time that NETSEC was involved in backdoor or wiretapping projects.
Mickey, an OpenBSD developer from that time period has published a rambling memoir entitled how I stopped worrying and loved the backdoor (A reference to the film Dr. Strangelove) in which he confirms that both Jason and Angelos were funded by netsec. He also makes the point that this served to fund OpenBSD and Theo indirectly as well. Many of his claims are verifiable by looking at the OpenBSD CVS commit history and honestly I’d noticed some of it myself and thought it was odd. He describes encounters with agents of various TLAs.
Probably the most straightforward interpretation of Mickey’s story simply confirms what we already knew: funny stuff was going on in the source tree at that time and people crossing international borders sometimes receive some heavy arm-twisting by the US government, even if they are American citizens such as Jacob Appelbaum and Moxie Marlinspike. It’s not hard to imagine that pressure being applied to someone seeking to continue working or studying in the US.
I was planning to let this particular dog lie (well, at least until I had a working exploit :-), but suddenly a New York Times article drops a clue which adds another unbelievable twist to the plot. They report that it was a joint US-Israeli hacking effort which developed the Stuxnet attack on Iran’s uranium enrichment centrifuges. (For all the hyperbole surrounding Stuxnet, everyone agrees it is the most effective and sophisticated targeted attack on a nation’s specific industrial process.) For its part, it was the US’s Idaho National Laboratory which provided significant background research into the security properties of Siemens industrial control “SCADA” systems like the ones which run Iran’s centrifuges. The INL slide deck really says it all, with diagrams and photos of US government security researchers testing out attack models against racks of Siemens gear of the same sort used in Iran.
But I’d remembered seeing Idaho National Laboratory once before - in Jason Wright’s CV. He’d written a paper for the U.S. Department of Homeland Security National Cyber Security Division, Control Systems Security Program entitled Recommended Practice for Securing Control System Modems. This was in January 2008, about the time the Stuxnet project is believed to have gotten going. In 2009, he published Time Synchronization in Heirarchical TESLA Wireless Sensor Networks pdf at a conference on Resilient Control Systems.
When speaking at SecTor, a data security conference in Canada, Jason’s bio describes him as:
This guy sure seems to have a talent for coincidences.
Stuxnet Authors Made Several Basic Errors
There is a growing sentiment among security researchers that the programmers behind the Stuxnet attack may not have been the super-elite cadre of developers that they've been mythologized to be in the media. In fact, some experts say that Stuxnet could well have been far more effective and difficult to detect had the attackers not made a few elementary mistakes.
In a talk at the Black Hat DC conference here Tuesday, Tom Parker, a security consultant, presented a compelling case that Stuxnet may be the product of a collaboration between two disparate groups, perhaps a talented group of programmers that produced most of the code and exploits and a less sophisticated group that may have adapted the tool for its eventual use. Parker analyzed the code in Stuxnet and looked at both the quality of the code itself as well as how well it did what it was designed to do, and found several indications that the code itself is not very well done, but was still highly effective on some levels.
Parker wrote a tool that analyzed similarities between the Stuxnet code and the code of some other well-known worms and applications and found that the code was fairly low quality. However, he also said that there was very little chance that one person could have put the entire attack together alone.
"There are a lot of skills needed to write Stuxnet," he said. "Whoever did this needed to know WinCC programming, Step 7, they needed platform process knowledge, the ability to reverse engineer a number of file formats, kernel rootkit development and exploit development. That's a broad set of skills. Does anyone here think they could do all of that?"
That broad spectrum of abilities is what has led many analysts to conclude that Stuxnet could only be the work of a well-funded, highly skilled group such as an intelligence agency or other government group. However, Parker pointed out that there were a number of mistakes in the attack that one wouldn't expect to find if it was launched by such an elite group. For example, the command-and-control mechanism is poorly done and sends its traffic in the clear and the worm ended up propagating on the Internet, which was likely not the intent.
"This was probably not a western state. There were too many mistakes made. There's a lot that went wrong," he said. 'There's too much technical inconsistency. But, the bugs were unlikely to fail. They were all logic flaws with high reliability."
Parker said that Stuxnet may have been developed originally on contract and then once it was handed off to the end user, that group adapted it by adding the C&C infrastructure and perhaps one of the exploits, as well.
The mistakes weren't limited to the operational aspects of Stuxnet, either. Nate Lawson, a cryptographer and expert on the security of embedded systems, said in a blog post Monday that the Stuxnet authors were very naive in the methods they used to cloak the payload and target of the malware. Lawson said that the Stuxnet authors ignored a number of well-known techniques that could have been much more effective at hiding the worm's intentions.
"Rather than being proud of its stealth and targeting, the authors should be embarrassed at their amateur approach to hiding the payload. I really hope it wasn’t written by the USA because I’d like to think our elite cyberweapon developers at least know what Bulgarian teenagers did back in the early 90′s," Lawson said. "First, there appears to be no special obfuscation. Sure, there are your standard routines for hiding from AV tools, XOR masking, and installing a rootkit. But Stuxnet does no better at this than any other malware discovered last year. It does not use virtual machine-based obfuscation, novel techniques for anti-debugging, or anything else to make it different from the hundreds of malware samples found every day."
Lawson concludes that whoever wrote Stuxnet likely was constrained by time and didn't think there was enough of a return to justify the investment of more time in advanced cloaking techniques.
Your Employer Can Read Your Work Emails, Even to Your Lawyer
There are many, many reasons not to use your work email address for anything remotely personal. Here's one more: a California appellate court has ruled that even attorney-client confidentiality doesn't apply when the email is on company servers.
In a 3-0 decision, the Sacramento-based court ruled that a woman sending an email to her attorney, in a matter regarding plans to sue your employer, from your office was akin to "consulting her lawyer in her employer's conference room, in a loud voice, with the door open, so that any reasonable person would expect that their discussion of her complaints about her employer would be overheard."
As Wired writes, a New Jersey court had previously found that emails sent from a personal, web-based account, like Gmail, were private and confidential, due in part to the warnings and disclaimers on an attorney's email signatures (so, you see, they have their place). But if you're considering a jump from your job, or even further action, consider yourself warned.
Facebook's 3rd Biggest Advertiser is (Allegedly) a Bing Affiliate Scam
Matt Cutts is the head of Google's anti-webspam team and tonight he came across what looks like a huge trove of scammy, spammy spam - on Facebook. And it involves Microsoft. Advertising publication AdAge reported tonight on findings from advertising analysts that Facebook sold an estimated $1.86 billion in worldwide advertising for 2010, an amazing sum. Who's spending all that money on Facebook ads? A long, long tail of self-serve advertisers for sure - but near the head of the tail is someone that should have raised a whole lot of red flags.
At the end of the AdAge article is a passing mention that the 3rd largest advertiser across all of Facebook, after AT&T and Match.com, is a mysterious company listed as Make-my-baby.com. That site bought an estimated 1.75 million billion ad impressions in the third quarter alone. It doesn't seem like a very nice company. Note:Statements from Facebook and Microsoft are below.
Matt Cutts did something anyone could have done. He visited Make-my-baby.com - but be careful if you do the same.
Updates: AdAge's Edmund Lee confirmed by email that his use of the word million was a typo and it should have been billion. Thanks as always to our eagle eyed commenters. See also Danny Sullivan of SearchEngineLand, who used contacts at Bing to follow up on this story. It appears that Comscore is denying the report that it found Make-my-ugly-baby was the third largest advertiser, that Bing is making obtuse statements and that the website in question has now vanished from the internet. Interesting.
Microsoft also just sent us this response:
So Facebook says it's never heard of these people and Bing says it has decided to terminate its relationship with them. It may be relevant that Microsoft owns a meaningful amount of Facebook. Very interesting.
Conceivably, all those fabulous baby making ads might be the stand-out success of MySpace. Or Facebook is being fooled by a giant ad buyer.
How Does This Work?
Microsoft's Bing, like many other companies online, offers affiliate marketers a percentage commission for revenues they drive to the company.
When Zugo gets users to use Bing, those users will click on some number of search ads. Bing will charge advertisers for those clicks, then give Zugo a percentage of that revenue.
What is it? It's a paper-doll-type site that lets you put eyeglasses and mustaches on top of a funny looking baby's face. At least that appears to be what it is; before you can do anything the site says you have to install "a browser plug-in to present an enhanced experience." If you do so, according to the fine print, your browser's default search and home page will be switched to Bing. Once you do so, the affiliate company behind the toolbar, called Zugo, will capture a slice of the revenue whenever you click on a search ad.
Apparently the whole thing is working out pretty well for everyone involved. Zugo, or whatever company in a chain of affiliates it is that's behind this, has found a toolbar promotion strategy that converts very well. Enough people install this plug-in, and it captures enough downstream revenue, that it pays off for the company to buy more Facebook ads than any company on earth, except for AT&T and Match.com.
Cutts writes on Google Buzz tonight,
Either way, I think that prompting people to give access to their browser's settings under false pretense, and then changing their search provider and home page, is unethical.
It's pretty remarkable that even at the top of this giant success story of Facebook advertising, and perhaps near the top of the story of Bing's steady rise as a search engine, is a Web 1.0-style pulling the wool over the eyes of gullible internet users. Is that a sustainable monetization strategy? Maybe it is. There is, as they say, a sucker born every minute. There may well be a sucker found every minute too who wants to customize a baby picture on the internet.
Between the incredible growth of casual games that arguably do little for the collective human experience but consume a growing amount of it each day, and monetization like this, it's hard sometimes to take Facebook seriously when it says it wants to bring people together and make the world a better place.
Is no one minding the store? Or are they just minding the cash register and turning away from what the customers are up to? It's in the short-term economic interests of both Facebook and Microsoft to ignore what affiliates are doing. "It's entirely possible, even likely, that Facebook and Microsoft didn't realize this was going on," Cutts said tonight. "I wouldn't assume they were aware of what was going on."
It's notable that this came to light just hours after Facebook posted a late-night retraction of its controversial new feature that allowed 3rd party apps on the site to request the home addresses and phone numbers of users.
To be fair, it must be very, very challenging to run, grow and innovate with a company that serves 600 million people around the world with a radically new kind of technology (social networking).
Mysterious "Spy" Computer In Parliament Works Differently Than Being Reported, Tech Expert Says
An unmarked computer found in a spare room of parliament, and connected directly to parliament's internet system, was most certainly planted there, a computer expert told the Grapevine. However, he says, the media has a few misconceptions about the matter.
The computer in question was found in a spare room shared by the Independence Party and The Movement last February. It was apparently connected directly to parliament's internet system.
The computer was disconnected and taken to the police. Any identifying serial numbers had been erased from the machine, nor were any fingerprints found, and its origins have not yet been traced. The police believed that the matter was the work of professionals.
Morgunblašiš and other media outlets have reported that the computer was set up in such a way that disconnecting it would erase any files on the hard drive. But a computer expert The Grapevine spoke to said that this is highly unlikely.
Stephen Christian, a computer expert at Oxymap ehf, told the Grapevine that while it is possible police bungled the operation and did not clone the hard drive before disconnecting it, the idea of a "self-destruct" feature was out of the question. "Information written to disk can be recovered by experts even after being overwritten several times unless you let the computer run for a few hours constantly 'covering up' its information. Computer hackers know this. A professional would have written any acquired data to a public-key-encrypted disk that would only have been accessible to one who possessed the private key - like with Wikileaks 'insurance' file. Having a hacker program 'self-destruct' is something someone who has watched too many spy movies would claim. Not even an incompetent hacker would program something that way. This is much more likely a plant followed up by fairy-tale."
Members of parliament have expressed outrage that the matter was not brought to light sooner, even though the parliamentary offices knew about it.
Morgunblašiš implicated, through speculation, that Wikileaks may have been the culprit. To this, Wikileaks spokesman Kristinn Hrafnsson denied any involvement, telling Eyjan, "It isn't surprising that Morgunblašiš reproached Wikileaks in this matter, as they haven't really been known for great journalism lately."
Your Most Dangerous Possession? Your Smartphone
Forget what's in your wallet -- beware your smartphone. It's becoming one of your most dangerous possessions.
If your phone was stolen a few years ago, the thief could make prank calls and read your text messages. Today, that person can destroy your social life -- you said what on Facebook?! -- and wreak havoc on your finances.
Now that smartphones double as wallets and bank accounts -- allowing users to manage their finances, transfer money, make payments, deposit checks and swipe their phones as credit cards -- they are very lucrative scores for thieves. And with 30% of phone subscribers owning iPhones, BlackBerrys and Droids, there are a lot of people at risk.
"It's crazy the amount of information on that phone -- it's like carrying a mini-computer around with you, except that more people know the settings on their computer than they do on their phones at this point," said Nikki Junker, social media coordinator and victim advisor at Identity Theft Resource Center. "People are incredibly at risk as technology improves."
And mobile banking use is expected to soar by nearly 55% next year, according to recent data compiled by TowerGroup, a research firm for the financial services industry.
They found that while 17.8 million consumers used mobile banking last year, 27.4 million are expected to use it this year, and 53.1 million consumers are forecast to adopt it by 2013.
"We're now past the early adopters and starting to hit the early maturity phase," said George Peabody, director of emerging technologies at Mercator Advisory Group. "So much of our screen time is shifting from PCs to smartphones, and the banks want to be there and know they have to be there."
Google to power your mobile wallet?
In addition, the volume of mobile payments -- buying boots via Zappos iPhone app, for example, or paying bills -- is expected to climb to $214 billion by 2015, up from $16 billion in 2010, according to Aite Group, another financial services research firm.
And pay-by-phone is only going to get easier as our devices come embedded with Near Field Communication (NFC) devices that allow you to pay for your morning latte by waving your phone at the cash register.
Companies like Blaze Mobile and Bling Nation already let you pay major retailers by swiping your smartphone thanks to a sticker adhered to the outside of your phone. Meanwhile, an app created by mFoundry brings up an image of your Starbuck prepaid card barcode and lets you scan it in lieu of a credit card.
"A lot of players are now pushing to drive the contactless technology," said Gwenn Bezard, research director at Aite Group specializing in banking and payments. "While you're not going to wake up tomorrow and everyone is going to be using mobile payments, it's going to grow over the next years -- and from a very low base."
Watch your phone! Security attacks on smartphones climbed to an all-time high in 2010, according to AdaptiveMobile, an international mobile security firm. Specifically, attacks on Google's Android smartphones quadrupled, and smartphones running Java-based applications jumped 45%.
"Bad guys are following where the people are going -- and people are going to smartphones," said Peabody. "As smartphone prices continue to decline and even more people get them, that's definitely the new place for bad guys to go."
While storing a password and keeping your phone locked is a good start, it's not going to protect you from professional fraudsters.
"Don't think that having an initial password set on your phone can stop people from getting in there," said Junker. "It's a very low level of protection -- you can even find 30-second videos on how to crack smartphone passwords on YouTube."
Web: More dangerous than ever
If you use mobile banking or make online payments frequently, you should invest in anti-virus protection and check with your bank about any security or identity theft protection features that you can enable.
Most smartphones also offer remote wipe-out services -- like MobileMe for the iPhone -- that automatically erase the information on your phone if you claim it as lost or stolen.
If you bank with your phone by accessing its website rather than opening an app, be extra careful when typing in the address. Some identity thefts create domains with the same address as major banks with two letters switched in hopes a consumer will accidentally land on the site and enter their username and password, said Junker.
And make sure you immediately log out of any bank apps or sites where your financial information is stored as soon as you're finished. While your identity is still at risk if your phone is stolen, this will buy you time to wipe out your information as soon as you realize it's gone.
Why You Should Always Encrypt Your Smartphone
Last week, California's Supreme Court reached a controversial 5-2 decision in People v. Diaz, holding that police officers may lawfully search mobile phones found on arrested individuals' persons without first obtaining a search warrant. The court reasoned that mobile phones, like cigarette packs and wallets, fall under the search incident to arrest exception to the Fourth Amendment to the Constitution.
California's opinion in Diaz is the latest of several recent court rulings upholding warrantless searches of mobile phones incident to arrest. While this precedent is troubling for civil liberties, it's not a death knell for mobile phone privacy. If you follow a few basic guidelines, you can protect your mobile device from unreasonable search and seizure, even in the event of arrest. In this article, we will discuss the rationale for allowing police to conduct warrantless searches of arrestees, your right to remain silent during police interrogation, and the state of mobile phone security.
The Fourth Amendment's search incident to arrest exception
It has long been established under common law that law enforcement officers may conduct warrantless searches of criminal suspects upon arresting them. Courts have identified two exigencies that justify warrantless searches of suspects incident to arrest.
First, the government has a compelling interest in ensuring that detained suspects are not in possession of weapons or other dangerous items. Requiring that police obtain a warrant before determining whether an arrested individual is armed would subject officers to potentially life-threatening risks.
Second, the government has a compelling interest in preventing arrestees from destroying or tampering with evidence of criminal activity in their immediate possession at the time of arrest. Imposing a warrant requirement on police searches of arrestees would afford suspects an opportunity to destroy any incriminating evidence on their persons.
Unfortunately, courts have expanded the scope of this once-narrow exception to create a gaping hole in the Fourth Amendment. In 1973, the United States Supreme Court held in US v. Robinson that warrantless searches of arrestees’ persons are presumptively reasonable and require "no additional justification" to be lawful. In 1974, the Court further held in US v. Edwards that objects found in an arrestee's "immediate possession" may be subject to delayed warrantless search at any time proximate to the arrest—even absent exigent circumstances.
In 1977, the Supreme Court clarified the search incident to arrest exception in US v. Chadwick, holding that the warrantless search of a footlocker found in the possession of criminal suspects violated the Fourth Amendment because the search took place after the suspects had been put into custody and the footlocker had been secured by police. In Chadwick, the Court held that while warrantless searches of objects found on arrestees' persons are presumptively lawful due to the "reduced expectations of privacy caused by the arrest," closed containers that are not "immediately associated with" arrestees' persons are not subject to a delayed warrantless search, barring exigent circumstances.
Based on these precedents, California's Supreme Court held in Diaz that mobile phones found on arrestees' persons may be searched without a warrant, even where there is no risk of the suspect destroying evidence. Therefore, under Diaz, if you're arrested while carrying a mobile phone on your person, police are free to rifle through your text messages, images, and any other files stored locally on your phone. Any incriminating evidence found on your phone can be used against you in court.
On the other hand, if you are arrested with a mobile phone in your possession but not immediately associated with your person, police may not search your phone without a warrant once you’ve been taken into custody and your phone is under police control.
The takeaway from Diaz, therefore, is that you should store your mobile phone in your luggage, footlocker, or in some other closed container that's not on your person, particularly when driving an automobile. (For more on this subject, see our 2008 article summarizing the search incident to arrest exception in the context of mobile phones. Also see The iPhone Meets the Fourth Amendment, a 2008 UCLA Law Review article by law professor Adam Gershowitz.)
What about password-protected mobile phones?
While the search incident to arrest exception gives police free rein to search and seize mobile phones found on arrestees’ persons, police generally cannot lawfully compel suspects to disclose or enter their mobile phone passwords. That's because the Fifth Amendment's protection against self-incrimination bars the government from compelling an individual to divulge any information or engage in any action considered to be "testimonial"—that is, predicated on potentially incriminating knowledge contained solely within the suspect's mind.
Individuals can be forced to make an incriminating testimonial communication only when there is no possibility that it will be used against them (such as when prosecutors have granted them immunity) or when the incriminating nature of the information sought is a foregone conclusion. (For more on this subject, see this informative article forthcoming in the Iowa Law Review, also by Professor Gershowitz, which explores in great depth the uncharted legal territory surrounding password-protected mobile phones seized incident to arrest.)
As such, if you are arrested or detained by a law enforcement officer, you cannot lawfully be compelled to tell the officer anything other than your basic identifying information—even if the officer has not read you the Miranda warning. Exercising your right to remain silent cannot be held against you in a court of law, nor can it be used to establish probable cause for a search warrant.
However, if you voluntarily disclose or enter your mobile phone password in response to police interrogation, any evidence of illegal activity found on (or by way of) your phone is admissible in court, regardless of whether or not you've been Mirandized.
What if you're not a criminal and think you have nothing to hide? Why not simply cooperate with the police and hand over your password so that you can get on with your life?
For one thing, many Americans are criminals and they don't even know it. Due to the disturbing phenomenon known as "overcriminalization," it's very easy to break the law nowadays without realizing it. A May 2010 study from the conservative Heritage Foundation and the National Association of Criminal Defense Lawyers found that three out of every five new nonviolent criminal offenses don't require criminal intent. The Congressional Research Service can't even count the number of criminal offenses currently on the books in the United States, estimating the number to be in the "tens of thousands."
What's more, the US Supreme Court has held that police may arrest you for simple misdemeanors, such as driving without a seatbelt or having unpaid parking tickets. While police don't typically arrest individuals for such trivial infractions, all it takes is one unlucky police encounter and you could end up behind bars. If that happens, and your mobile phone is on your person, it may be subject to a warrantless search. If police dig up an incriminating text message, e-mail, or errant image file on your mobile device, it might be enough to convince a judge to issue a search warrant of your property—or, worse, lead to criminal charges being filed against you.
Getting the password, or getting past it
While police cannot force you to disclose your mobile phone password, once they've lawfully taken the phone off your person, they are free to try to crack the password by guessing it or by entering every possible combination (a brute-force attack). If police succeed in gaining access your mobile phone, they may make a copy of all information contained on the device for subsequent examination and analysis.
Exhaustive cell phone searches aren't exactly commonplace today, but they're growing more and more frequent as law enforcement begins to realize how much incriminating information modern smartphones tend to contain. The rapidly growing digital forensics industry already offers a range of tools to law enforcement designed for pulling data off of mobile phones, and entire books have been written on such topics as the forensic analysis of the iPhone operating system.
Alarmingly, in many cases, extracting data from a mobile device is possible even if the device password is not known. Such extraction techniques take advantage of widely known vulnerabilities that make it disturbingly simple to access data stored on a smartphone by merely plugging the device into a computer and running specialized forensics software. For instance, Android and iPhone devices are vulnerable to a range of exploits, some of which Ars documented in 2009.
Therefore, if you care about your privacy, password-protecting your smartphone should be a no-brainer. Better yet, you should ensure your smartphone supports a secure implementation of full-disk encryption. With this method of encryption, all user information is encrypted while the phone is at rest. While it isn't absolutely foolproof, full-disk encryption is the most reliable and practical method for safeguarding your smartphone data from the prying eyes of law enforcement officers (and from wrongdoers, like the guy who walks off with your phone after you accidentally leave it in a bar.)
Unfortunately, few consumer-grade smartphones support full device encryption. While there are numerous smartphone apps available for encrypting particular types of files, such as emails (i.e. NitroDesk TouchDown), voice calls (i.e. RedPhone), and text messages (i.e. Cypher), these "selective" encryption tools offer insufficient protection unless you're confident that no incriminating evidence exists anywhere on your smartphone outside of an encrypted container.
Despite the generally sorry state of mobile device security, a few options exist for privacy-conscious mobile phone owners. Research in Motion's BlackBerry, when configured properly, is still widely considered to be the most secure smartphone platform. In fact, BlackBerry's transport encryption is so robust that a few foreign governments have recently forced RIM to install backdoors for law enforcement purposes.
The iPhone 3GS, released in June 2009, marked Apple's first serious attempt to make the iPhone a contender in mobile security. The phone features full-disk encryption by default and can be remotely wiped in seconds. However, as forensics expert Jonathan Zdziarski has discussed, vulnerabilities make it trivially simple to bypass this encryption and extract an unencrypted disk image from the phone in a few minutes' time. As for the remote wipe capability, thieves or law enforcement officers can disable it by removing the iPhone's SIM card.
In June 2010, with the release of iOS 4, Apple took another stab at iPhone security by offering a new optional feature called "data protection," which encrypts certain types of user data when the phone is locked or turned off. While data protection appears to be secure, its use is currently limited to e-mails and to other specific types of user content linked to iPhone apps that take advantage of iOS 4's encryption API.
Google's Android, the world's fastest growing smartphone platform, doesn't natively support any sort of full-disk or device encryption. While Android supports Exchange e-mail, it doesn't support on-device Exchange e-mail encryption (although the feature is supported by several third-party e-mail applications available for Android). However, Motorola has stated that at least two of its Android smartphones—the Droid Pro and the Droid Bionic—will soon offer full encryption. How well these devices actually implement encryption remains to be seen, but even limited encryption will be a big step up for Android users.
Microsoft's newly launched Windows Phone 7 supports a range of robust encryption algorithms for both data-in-transit and data-at-rest, as Microsoft's Rob Tiffany has explained. However, in one important respect, Windows Phone 7 actually marked a step backward in terms of security. Whereas its predecessor, Windows Mobile, supported on-device Exchange e-mail encryption, Windows Phone 7 currently does not. Microsoft has stated that an upcoming patch will address this oversight, but it's not clear when it will be released.
For more on the state of mobile phone security, see this excellent InfoWorld article in which Galen Gruman assesses each major mobile platform's security strengths and weaknesses.
Are warrantless mobile phone searches headed to the US Supreme Court?
California's troubling Diaz ruling might not be the last word on the matter of warrantless mobile phone searches. In 2009, the Ohio Supreme Court heard a similar case (State v. Smith) involving the search of a mobile phone found on an arrestee's person, and reached a very different decision.
In Smith, the court held that mobile phones are distinct from "closed containers," which the US Supreme Court has defined as "any object capable of holding another object." Recognizing that mobile phones, like laptop computers, increasingly contain vast amounts of private information, the court determined that they merit greater privacy protections than other items we typically carry on our persons. Thus, the court held that once police have secured an arrestee's mobile phone, a search warrant must be obtained before the device may be searched.
The Ohio Supreme Court’s conclusion in Smith accords with the framers’ belief that our papers and effects should be protected from unreasonable searches. Indeed, of the many objects we routinely carry on our persons nowadays—including wallets, keys, cigarettes, access cards, pocketknives, and so forth—none tends to contain as much private information as our mobile phones. A typical modern smartphone contains hundreds, if not thousands, of text messages, emails, images, documents, and other kinds of private personal correspondence.
With the ascent of cloud computing, smartphones increasingly provide a window into our private lives, enabling us to access and store practically limitless amounts of sensitive personal data. As ultra-fast 4G wireless networks emerge, mobile devices will likely grow even more intertwined with our digital lives. Just as we have long stored our personal papers and effects in our desks or file cabinets at home, today we're just as likely to store such information in digital format on cloud services like Windows Live or Google. Thus, the Fourth Amendment demands that mobile phones—a primary gateway to our lives in the cloud—be treated as an extension of the home, rather than mere physical containers analogous to cigarette packs.
California Deputy Attorney General Victoria Wilson, who argued Diaz for the state, has told reporters that the matter of warrantless cell phone searches is ripe for resolution by the US Supreme Court. If that happens, let's hope the nation's high court sides with common sense and reaffirms its 2001 ruling in Kyllo v. US that the Fourth Amendment’s protections must adapt to safeguard our rights as technology evolves.
Smartphone Smudges Can Reveal Password, Study Finds
A clever feature of smartphones running Google's Android operating system is the gesture unlocking method, in which users choose a custom security pattern by selecting dots from a three-by-three grid entered via fingertip. But researchers recently showed how ordinary screen smudges that result from inputting the gesture can be used by a hacker to easily deduce the pattern.
"This is a known idea. Everyone really kind of knew something like this was possible, but we were really the first team to do a systematic analysis of how," said Adam J. Aviv, a doctoral candidate at the University of Pennsylvania, who presented the research at the Usenix Security Symposium in Washington last week.
"The more I used the [Android] phone, the more I noticed you could see my pattern. I'd go to bed in the evening, wake up, and you could see my smudge," Aviv said.
Aviv and his team decided to investigate what type of security risk the smudges might represent. In one test, they determined that 68 percent of password smudge patterns are fully detectable, and 92 percent are partially detectable.
With patience and good technique, a partial smudge is all that's needed for a determined hacker to unlock the phone.Close observation can even determine in which direction the smudges were marked.
Frequently cleaning an Android phone's screen, or using a clear plastic screen protector, are the obvious deterrents. Smudges could also be intentionally or inadvertently camouflaged by having an especially dirty screen, resulting in primitive steganography, Aviv joked. (Steganography is the concept of disguising secrets in plain sight.)
"The practice of entering sensitive information via touch screens needs careful analysis in light of our results. The Android password pattern, in particular, should be strengthened," his research paper states.
A spokesperson for Google, which controls the Android project, did not respond to questions about informing their customers of this weakness, or improving or eliminating the gesture lock feature.
It's possible that companies such as Corning, which makes smartphone screens for Android vendors Motorola and Samsung, could themselves find ways to reduce smudges.
"To date, there are no true anti-smudge technologies. There are a number of coatings that claim to be anti-smudge but in fact only facilitate easy removal of fingerprints," Corning spokeswoman Anna Giambrone told TechNewsDaily in an email. "Corning also has further research and development efforts underway to address this challenge."
Aviv notes that Android screen-smudge attacks are just one of several recently studied physical hacking tactics. Other researchers are examining ways to determine messages by listening to a dot-matrix printer's sound, and how to remotely alter vehicle settings by intercepting equipment sensor signals, he said.
For Android specifically, the heat signature left by a finger swiping a security pattern on a screen could also leave signs, although this would likely dissipate quicker than visible smudges.
Aviv's team includes doctoral candidate Katherine Gibson, undergraduate Evan Mossup, and professors Matthew Blaze and Jonathan Smith, also of the University of Pennsylvania.
Fake GSM Base Station Trick Targets iPhones
Demonstration given at Black Hat DC Conference
While his Black Hat DC Conference demonstration was not flawless, a University of Luxembourg student on Wednesday did show that it's possible to trick iPhone users into joining a fake GSM network.
Ralf-Philipp Weinmann showed how to cobble together a laptop using open-source software OpenBTS and other low-cost gear to create a fake GSM transmitter base station to locate iPhones in order to send their owners a message. A number of iPhone users in the room expressed surprise that they had gotten a message asking them to join the network.
While his Black Hat DC Conference demonstration was not flawless, a University of Luxembourg student on Wednesday did show that it's possible to trick iPhone users into joining a fake GSM network.
Ralf-Philipp Weinmann showed how to cobble together a laptop using open-source software OpenBTS and other low-cost gear to create a fake GSM transmitter base station to locate iPhones in order to send their owners a message. A number of iPhone users in the room expressed surprise that they had gotten a message asking them to join the network.
Weinmann, who is researching vulnerabilities in cellular networks, said that with the right equipment, the range for the rogue GSM station he built can be 35 kilometers.
"You want to get phones not just used by the teenage crowd but executives," said Weinmann, adding that it is possible to "have complete control of the phone." Part of the reason these fake GSM network attacks are possible is because the code base used in smartphones such as the iPhone, which is Infineon-based, goes back to the 1990s. A little sleuthing allowed Weinmann to discover vulnerabilities that can be exploited. For instance, he got help by finding that an Italian company that went bankrupt in the 1990s put up some code for GSM stacks in Sourceforge for four years before taking it down.
Weinmann's attack would allow him to take advantage of iPhones lured into his rogue base station to "enable and disable auto-answer on the iPhone" he said, or with an attack payload to record the audio on the iPhone, store it in RAM and then transmit the data that was sniffed.
Weinmann said he doesn't want to encourage data theft, but he does want to get carriers and vendors to improve security in the wireless networks. He adds that technology such as femtocells could be used to replace the OpenBTS software, which would only amplify the types of attacks he's investigating.
Android Trojan Captures Credit Card Details
A team of security researchers has created a proof-of-concept Trojan for Android handsets that is capable of listening out for credit card numbers - typed or spoken - and relaying them back to the application's creator.
The team, comprised of Roman Schlegel from the City University of Hong Kong and Kehuan Zhang, Xiaoyong Zhou, Mehool Intwala, Apu Kapadia, and Xiao Feng Wang from the Indiana University Bloomington, call their creation 'Soundminer' - and its implications are far-reaching.
Software released for Android devices has to request permissions for each system function it accesses - with apps commonly requesting access to the network, phone call functionality, internal and external storage devices, and miscellaneous hardware functions such as the backlight, LED, or microphone. These requests are grouped into categories and presented to the user at the point of installation - helping to minimise the chance of a Trojan slipping by.
Soundminer takes a novel approach to these restrictions, by only requesting access to 'Phone calls,' to read phone state and identity, 'Your personal information,' to read contact data, and 'Hardware controls' to record audio - none of which will ring alarm bells if the app is marketed as a voice recording tool.
Once installed, however, Soundminer sits in the background and waits for a call to be placed - hence the access to the 'Phone calls' category. When triggered by a call, the application listens out for the user entering credit card information or a PIN and silently records the information, performing the necessary analysis to turn it from a sound recording into a number.
The software works for both spoken numbers, as requested by some voice-activated IVR systems and by human operators, and numbers typed into the virtual dialpad on the phone - recognising the DTMF tones and translating them back into numbers again.
As Soundminer doesn't have access to the 'Network communication' category, it's unable to transmit the data it captures - relying on a second app, called Deliverer, which exists purely to relay the data to the attacker.
Predicting that this kind of attack could take place, Google has made it difficult for two applications to transfer data to each other without the user knowing about it. Working around this, the team found that if they used Soundminer to modify hardware settings such as backlight timeout and ring volume, the Deliverer app could read those settings back without arousing suspicion - a covert back-channel that makes fooling the user significantly easier.
In the team's research paper (PDF), they suggest a defence mechanism against Soundminer: an intermediary layer that analyses input from the microphone before passing it to an application, able to detect credit card numbers and prevent their transmission to Soundminer-like Trojans.
The researchers are due to present their findings at next month's Network & Distributed System Security Symposium in San Diego, but if that's too far away - geographically or temporally - you can check out a video of Soundminder in action below.
It's been a bad day for Android, as earlier we reported on an exploit that turns a handset running the OS into a USB snooping device.
6 Amazing Cell Phone Failures
Check out six schemes that never quite made it in the world of cell phones.
Check out six schemes that never quite made it in the world of cell phones.
The tech world is for dreamers, schemers, and sometimes, scammers. This week Israeli mobile-phone firm Modu shut its doors and Gizmodo slammed the door on possible scam Peep Wireless, showing that for every great new phone that hits the market, there's a shady promise that never gets realized.
In my years in the mobile industry, I've seen plenty of ambitious phones bite the dust, or never rise from it in the first place. I've picked out six of my favorites here, including a company with "particulated media" and inflatable cars, a company where every rep appeared to be ex-Israeli Special Forces, and a company with a $225,000 phone.
That's not even counting some of the other great failures I've seen—the Gizmondo gaming firm with its embezzlements and crashed cars, Hop-On's vaporware screenless, disposable cell phones or the alleged pump-and-dump scam that was Pegasus Wireless. Click through to see some of the best failed cell phone firms, and please add your own stories to the comments.
A Blaze of Failure
Emblaze First Else
The Claim: Emblaze is an Israeli mobile-phone firm that showed off a Linux-based cell phone with a radically new interface, backed by a super-hip Web site and marketing campaign.
The Character: Israeli mobile entrepreneurs are always entertaining. Emblaze had big personalities, threw flashy parties, and every rep I met had this special-forces look to him that made me feel he could break me in half.
The Outcome: Emblaze killed the project in June 2010 because "management was not able to confirm a deal on terms acceptable to Emblaze to proceed to the production of the device." They're trying to sell their software platform to other manufacturers.
The Claim: Modu produced a tiny "modular" phone that could be dressed in various "jackets" to give it new features. Planned jackets included one with stereo speakers, a digital picture frame, and a ruggedized jacket for kids.
The Character: Modu was much less insane than some of the other firms listed here. When I met with them they were enthusiastic and basically realistic; they just bit off more than they could chew.
The Story: Modu Mates Phones with Stereos, Picture Frames
The Outcome: Modu actually shipped phones in several countries, including Israel, El Salvador and the Philippines. But like many startup companies, their big dreams outstripped their resources, and Modu shut down this week.
Not a Peep of Sanity
The Claim: Hilariously incoherent, Peep Wireless claims to use phones to create a peer-to-peer, mesh network that would eliminate the need for wireless carriers. Sample phrase: "Our issued patents cover particulated media."
The Character: Scott Redmond, a serial entrepreneur of sorts with a track record of coming up with (and demanding funding for) insane schemes like inflatable electric cars. After our Jamie Lendino debunked that one, Redmond popped up in our comments section to attack him.
The Story: Peep Proposes Wireless P2P System
The Possible Scam: Redmond seems to try to use his ideas to get government grants or cash from venture capitalists.
The Outcome: Gizmodo basically dismantled Peep Wireless with a great blog post this week running through Redmond's past projects.
Verizon On Board With This One
The Claim: An Android smartphone using a super-duper new VOIP and video calling technology that would come out on Verizon Wireless's network.
The Character: Chad Sayers, whose previous business was a shopping-deals Web site. James Kendrick at GigaOm dug into his past.
The Story: Hands On With The Saygus VPhone
The Outcome: Saygus demonstrated their phone at trade shows last year, but then went underground. We haven't heard a word from Saygus since last March, and their Twitter feed and Web site haven't been updated in months. Calling them gave me an answering machine; I'll update this story if I hear from them.
A Short-Circuit to Distracted Driving
Cellular carriers, having spent years trying to blanket the nation with phone service, are now working on ways to stop people from getting calls and texts when they are behind the wheel.
The technology is aimed at curbing dangerous distractions by temporarily interrupting service, short-circuiting the temptation for people to respond to the chime of their phones.
T-Mobile announced a service this week that, for $4.99 a month, automatically disables rings and alerts and sends calls to voice mail when the phone is in a moving car. Sprint Nextel and AT&T said they were exploring the technology, while Verizon Wireless has been cooperating with small companies to offer a similar service on its network.
The services being tested and deployed are voluntary and can be overridden if a driver needs to use the phone for an emergency. They face real challenges in that the technology, for now, cannot distinguish whether a phone belongs to a driver or a passenger — or, for that matter, a bus rider.
Some safety advocates said it was not clear how widely consumers would adopt such technologies or whether they could work effectively. Many cellphone applications already are available from independent companies that claim to shut down a smartphone when it is moving quickly, but they have received tepid reviews from consumers and researchers.
Still, the safety advocates said the move by the major carriers to get involved is a critical, if overdue, step against distracted driving.
They say that the carriers, by testing this technology, integrating it into their phones and putting their marketing muscle behind it, could be forceful allies in a fight to help people resist what they say is the compulsive lure of mobile devices.
“There already is a simple technology that prevents people from using their phone while driving — the off switch. But people aren’t using it,” said John Ulczycki, a vice president at the National Safety Council, a nonprofit group that focuses on road safety issues.
Mr. Ulczycki said the biggest challenge is compulsive texting among teenage drivers. “They need a technology that protects them from themselves,” he said. The carrier involvement is “a very important step.”
Research shows that motorists talking on phones face a crash risk that is four times greater than that of motorists not on phones, while texting and driving is far more dangerous.
Studies also show that it can be difficult for people to ignore the ping of an incoming text or call — for psychological and physiological reasons. People may fear missing an important call from a friend or boss, or get excited by the prospect of receiving interesting news.
Physiologically, researchers say, the lure of mobile devices has addictive properties, in that people feel an adrenaline burst when a call or text comes in and get a rush when they answer.
An executive at T-Mobile said the company was introducing its new DriveSmart service at the request of customers who said they “need help while they’re driving.”
“There are people who know they get distracted while driving and feel responsible enough to themselves that they want help,” said the executive, Torrie Dorrell, vice president for apps, content and games at T-Mobile. She said the technology “negates those endorphins” that an incoming message can spark.
Ms. Dorrell also said T-Mobile was hearing from parents who “desperately want to keep their kid off the phone when he or she is driving.”
The DriveSmart service works by detecting when the phone is switching among cell towers. It then activates the phone’s GPS receiver to try to verify that the phone is moving quickly. After about 10 seconds of motion it will automatically send a call to voice mail or a text to the in-box without notifying the driver of its presence.
The service is available on just one Samsung cellphone. T-Mobile says more are on the way.
The system can be programmed to allow exceptions so that, for instance, parents can allow their calls to ring through or let it be used for applications like driving directions. It also can be turned off by the driver, but T-Mobile says that when that happens, parents can get a notice.
T-Mobile said it was exploring technology that could help determine whether a phone belonged to a driver rather than a passenger.
But the company said it had spent millions of dollars ensuring that the technology works seamlessly. There are existing apps that are often cheap or free, but are not customized for T-Mobile’s network or built with the company’s cooperation.
Researchers for the Insurance Institute for Highway Safety, a nonprofit group financed by insurance companies, tested some of these applications and concluded that they were “difficult to use, often unreliable, and easily overridden,” Russ Rader, a spokesman for the group, said.
Mr. Rader said that the carriers’ involvement may improve the effectiveness, and could allow corporations to install the technology across an employee base or among fleet drivers.
The emergence of the call-blocking technology is occurring amid changing business incentives for carriers, which once profited handsomely from people paying per-minute rates for calls in cars and elsewhere. But now, with many people buying their minutes in large bundles, the money is made from applications and services — like, in these cases, ones that actually stop people from talking behind the wheel.
Sprint has been working with Aegis Mobility, a company based in Vancouver, which works at the level of the carrier network by trying to intercept the call or text before it ever gets to the phone, according to Aegis’s chairman, Timothy Smith.
Mr. Smith said the technology could be ready for deployment by the end of the year. Crystal Davis, a spokeswoman for Sprint, said the company was “aggressively researching” the technology. But she declined to say when Sprint might deploy a service.
Tracy Van Fossen, a legal secretary in Anamosa, Iowa, and the mother of three sons, said the technology seemed promising. Last April, Ms. Van Fossen’s sister, Julie Davis, was killed while walking, hit by an 18-year-old driver on a cellphone.
Ms. Van Fossen said she would consider getting the technology for her 16-year-old, Alex, to ensure that he would not use his phone when driving to school. But she said she would like the technology to improve so that it could distinguish passengers from drivers.
“Once they work out the hiccups, it would be a very good thing to have,” Ms. Van Fossen said.
Motorola Employee Confirms Locked Bootloaders -- and Bad Attitude
It's the question many of us are asking -- will Motorola's upcoming phones have locked bootloaders? Based on Motorola's previous stance on the issue we all expected the answer to be yes, but there's no harm in asking again, right? New hardware (the Droid Bionic and Atrix 4G use a different CPU, that doesn't carry the e-Fuse technology) could mean a new protection scheme, and people are curious.
Someone got a bit curious in the comments of Motorola's YouTube video showcasing the Smart docks for the Atrix 4G and got hit with a stunner of a reply by a Motorola employee, and I quote:
@tdcrooks if you want to do custom roms, then buy elsewhere, we'll continue with our strategy that is working thanks.
Sounds like good advice to me, so I'll certainly be buying elsewhere.
Lock the phones up if you want to Motorola, but I think that money might be better spent training your PR folks how to field questions. It wasn't too long ago that most people were "buying elsewhere", and with that sort of attitude history could start to repeat itself. [YouTube via Android Central forums]
Update: As many have already seen and commented, Motorola has cleansed the comments at the YouTube video link. They must not realize that like diamonds, the Internet is forever.
One Out of Five Cellphones Sold is Unlicensed Copy: Nokia
One out of every five cellphones sold in the world are illegal or unlicensed copycats, hurting the position of producers like Nokia in emerging markets, the world top manufacturer by volume said on Friday.
"It is mostly China-originated, but it is global. It is not only in Asia, but also in Latin America and even in some parts of Europe," said Esko Aho, a member of Nokia's executive board.
Surging growth of no-brand manufacturers coupled with growing smartphone sales boosted third-quarter cellphone sales 35 percent, Research firm Gartner said in November. It raised its outlook for growth in 2010, which it forecast would top 30 percent.
Gartner estimated grey market share had increased to even above 20 percent, but many other market followers have doubted the estimate.
(Reporting by Tarmo Virki; Editing by Mike Nesbit)
Apple Tightens the Screws on iPhone 4: Sources
Apple Inc is giving a whole new meaning to locking your phone with its new screws.
In line with its infamous philosophy of maintaining absolute control over its products, sources said U.S. Apple stores are replacing screws on iPhone 4s brought for servicing with tamper-proof screws to prevent anyone else from opening the device.
Kyle Wiens, chief executive of iFixit, a prominent Apple repair and parts supplier, said the purpose of the new screws is to keep people out of the iPhone and prevent them from replacing the battery. He said he noticed in November that screws were being switched.
"If you took your car in for service and they welded your hood shut, you wouldn't be very happy"," he said, comparing it to shutting owners out of their iPhones.
IFixit, based in San Luis Obispo, California, has become famous in the technology world for performing "teardowns" of Apple devices, often within hours or minutes of a new product launch. The company promotes repair to cut down on electronic waste that goes to landfills.
According to two people with first-hand knowledge of the practice, when a customer brings an iPhone 4 into a U.S. Apple store for repair, tech staff swap out commonly-used Phillips screws, with which the device is shipped, and replace them with so-called "Pentalobe" screws.
Customers are not told about the switch, these people said.
It was not clear how widely used the replacement screws are, but one of these people said the screw swap was begun in the fall and is now standard practice at U.S. Apple stores. This person said the iPhone 4 shipped with Pentalobe screws in Japan.
Apple had no comment for this story, but it is well-known that Apple discourages individual modifications of its products.
The iPhone 4 went on sale last summer and became Apple's fastest-selling version of the iconic device, starting at $199 with a two-year wireless contract. More than 16 million iPhones sold in the quarter ending December.
Apple will replace iPhone batteries free if the device is under warranty, but otherwise charges $79.
Wiens said that with the old screws the iPhone 4 battery was easy to change although that was not known to many customers. "Apple wants to be in the business of selling you the new battery," Wiens said.
The world's largest technology company acts swiftly to protect its secrets. When an iPhone prototype was found by an outsider in a bar last year and sold to tech blog Gizmodo, Apple kicked up a furor and investigators raided a journalists' home.
Pentalobe screws require a screwdriver that is not commercially available, Wiens said. The screw is similar to a commonly used Torx screw, but has five points instead of six.
Wiens said iFixit, which sells repair kits for iPhones and other Apple products, searched everywhere for a Pentalobe screwdriver before specially commissioning a supplier to make one for them -- and even that is not a perfect match, he said.
The Pentalobe screw first appeared on the battery section of a Macbook Pro laptop in 2009, Wiens said. It also can be found on the exterior of Apple's new MacBook Air notebook.
(Editing by Edwin Chan, Kenneth Li and Richard Chang)
More than 60 Apps have been Downloaded for Every iOS Device Sold
The iTunes App Store is about to reach 10 billion downloads. That makes this a good time to revisit app growth metrics and compare them with the other digital media store that we have data for: the iTunes Music Store.
First, the download totals as time series:
Assuming that 10 billion will be reached this month, we see how the steepness of the app curve implies that apps will overtake songs within a few months. I suspect by March.
In September I made the prediction that total apps would overtake total songs sold by the end of 2010. That has not yet happened, but it’s close.
If we measure downloads as a function of the number of months since store launch, we can see that Apps reached 10 billion downloads in less than half the time it took songs (31 vs 67 months.)
I used polynomial curve fitting to draw the lines.
The other way to look at the data is by measuring the daily download rate. The data is more scattered, but the trend is still clear:
(The solid lines are linear trendlines. I added the known data from Nokia’s Ovi for comparison.)
The amazing story of this chart is not that apps are running at above 30 million download per day, but that the figure is growing. Growth like this is hard to get one’s mind around. Not only are downloads increasing, but the rate of increase is increasing.
There is one final piece to put in place on this puzzle. Some might argue that the reason these download rates are increasing is because the installed base of devices is increasing at the same rate. In other words, app consumption could be steady on a per user basis.
To answer this we need to divide the cumulative apps downloaded by the cumulative devices sold. Using a reliable estimate for iPod touch units sold, we can get a pretty clear picture:
The number of apps downloaded for iPhone/iPad/iPod touch is running at more than 60.
In the fall of 2008, there were about 10 apps downloaded for every iPhone/iPod touch. Two years later the rate was more than five times higher. There are significant implications for the network effects related to the iOS platform. End user investment in apps is even higher than end user investment in music which created a very tight lock for iPod users.
I draw three conclusions:
1. Apps overtaking digital music is a watershed event. Apps are a new medium: they will impact all other media.
2. As the number of apps attached to any single device continues to increase, apps create increasingly higher switching costs for users.
3. Apps consumption is increasing at a rate to overtake the PC software market.
1. The total apps does not include updates.
2. The attach rate is actually higher since the figures above assume all devices are still in use.
Apple's App Store Hits 10 Billion Downloads
Apple's App Store reached landmark 10 billion downloads on Saturday, further underlining the lead of the iPhone-maker in mobile online software battle, a counter on front page of the store showed.
Apple launched the iPhone store in mid-2008 and it proved to be an instant hit, driving sales of the smartphone and helping reshape the way mobile content is delivered.
The iPhone app store offers more than 300,000 programs, and there are also more than 40,000 apps available for the iPad.
Its closest rival is privately-held GetJar, which sells software for all platforms, and reached 1 billion downloads in June 2010.
Google's Android Market and Nokia's Ovi Store are among other larger mobile online stores.
(Reporting by Tarmo Virki)
65% of Apple’s Sales Came from iOS Powered Devices
Author Horace Dediu
The iPhone and iPad generated $15 billion of revenue last quarter. In addition, iPod touch generated about $2.3 billion, implying that iOS based devices were responsible for sales of $17.3 billion.
To put that in perspective I drew this chart which shows not only the sales by products but a rough representation of share of the two OS variants Apple uses to power its products.
iOS powered products (which did not exist three and a half years ago) generated 65% of all sales in the last quarter. OS X powered products generated 20% of sales. That’s a noteworthy combined total of 85%.
But software is even more important for Apple.
The sale of OSX software (both the operating system and applications for it) accounted for another $786 million or 3% of total. In addition, I’ve put forward some evidence to suggest that the proportion of sales due to Apps in the Music store is nearly half, or another $600 million (a bit more than 2%).
Therefore only 10% of Apple’s sales were for products not directly powered by its vengeful operating system. That speaks volumes not only for the importance of software to Apple but for the cohesion of an extensible, flexible architecture that allows it to inhabit a portfolio spanning from a music player and an enterprise server.
I recently answered a question on Quora on whether Apple is a Software, Hardware or Media company by saying it’s all three.
With 90% of sales dependent on a unique, proprietary operating system, perhaps the answer should have been different.
Special Report: Augmented Hype? Mobile's Next Big Thing
Maarten Lens-Fitzgerald signs off his messages with a little joke: "This email might have been written while cycling." It could be an apology for his spelling, an allusion to the fact he's Dutch or even a hint at his oddball imagination. Or perhaps, given Lens-Fitzgerald is the head of a company that wants to fuse the virtual and physical worlds, it could be taken literally.
The round-faced 39-year old is the founder of one of the hottest prospects in the mobile space, Layar. The Dutch company wants nothing less than to become the platform of choice for the burgeoning new medium of Augmented Reality (AR). Running on smartphones and tablet computers, AR overlays digital information - text, graphics, games -- on images of the world around us.
Some executives in the mobile industry think AR will be huge. While revenues from AR alone amount to no more than a few tens of millions of dollars, that number is set to double annually to reach $350 million in 2014, according to New York-based ABI Research. The impact across the broader mobile and computer industry could be much bigger, convincing consumers to use their mobile devices even more than they already do.
Samsung Electronics used Layar as the leading feature of many advertisements for its hit smartphone model Galaxy S, last year's top iPhone rival, which generated revenues of $5 billion.
In August 2009, when 'Wired' magazine claimed "If you're not seeing data, you're not seeing," AR was still more whimsy than real world. But in the past year, developers around the world have started launching applications that use AR and aim to make the virtual world an inherent part of our daily lives. Tech heavyweights including Adobe, Apple, Google, Intel, Nokia, Qualcomm and Samsung have noticed and are all developing AR strategies.
(Readers with an iPhone or Google Android smartphone or tablet can check out key AR companies, including firms interviewed for this story, by searching on Layar's browser for "AR by Reuters, '11.")
Informed by such sci-fi authors as William Gibson and Vernor Vinge, and Mitsuo Iso's anime TV series "Denno Coil" (Electronic Brain), Lens-Fitzgerald and a few fellow developers are at the forefront of this potential revolution. Intel's venture arm Intel Capital invested 10 million euros ($ 13.4 million ) in Layar in late 2010. "Other guys are about technology, while Layar is about usage, and that's the unique thing," says Marcos Battisti, regional director at Intel Capital. Then comes a big -- and familiar -- 'but'. "The numbers are very big, it is sticky," says Battisti. "The key is, how do they monetize it?"
Sitting around munching a sandwiches-and-milk lunch with colleagues in the company's open-plan office in Amsterdam's former docklands, Lens-Fitzgerald almost sounds like a Silicon Valley script from the late 1990s. Wearing a violet sweater hauled over an untucked shirt which lends him the air of a geeky scruff, he argues that the question of profit, while important, misses the point: "The promise is so big, we do not want to limit ourselves with a business plan."
Technology analysts Forrester also see potential for AR to become a force that fundamentally changes the way people behave. "In the years to come, it will be a disruptive technology that changes the way consumers interact with their environments," says Forrester's analyst Thomas Husson.
One thing is clear: if the hype around AR feels at times like Dotcom Boom 2, then the sequel will be in 3-D, if not in 4-D. Many of the apps so far depend on where you are, and what you see around you and are triggered by your movement within a space. "Location," tweeted Nokia sales chief Niklas Savander last October, "is the next big thing."
From Helmets To Layers
As a technology, AR is not new. Originally associated with the backpacks and helmets that nerds used to carry the equipment for techno games, the fusion of visible reality with computer-generated digital information has been under development for more than a decade. In its simplest everyday form today, you can see it in action in sports TV: in the line superimposed over footage of a race to show where it ends, or the pitch-side advertising banners that can change depending what market you're watching a game in.
What takes AR onto less familiar ground is the surging popularity of smartphones and tablet PCs. Smartphone sales grew more than 50 percent last year to 289 million handsets, and tablet sales grew from almost nothing to 55 million, according to research firm Gartner.
That growth, combined with the availability of good-quality location data via Global Positioning System (GPS) and faster data speeds, has opened up a plethora of new possibilities, which so far mostly revolve around ways of delivering information to handhelds as their users move through, look at and listen to the physical world.
"AR is a continuation of the map. It's at the core of the user interface," says Michael Halbherr, Nokia's chief of services products. "I think it's big."
For a basic example, take the story of Layar's first customer: an Amsterdam real estate broker which liked the idea of offering clients a real-life look at the properties on its books. Using Layar's technology, it built a smartphone app -- what the Layar team call a 'layer' -- to let users access details about apartments for sale in a building just by pointing their smartphones at it. That was in May 2009. "Then all hell broke loose," says Lens-Fitzgerald.
Today, Layar has more than 1 million active monthly users, and its technology -- which offers a platform or browser on which people can build their own apps rather than the end-products themselves -- has been installed on more than 10 million phones and tablets. So far, its system works only on iPhones, or those that run Google's Android or Samsung's bada. A version for Nokia's Symbian, the largest smartphone operating system, is due out soon. Of the 1,500 layers created so far, popular apps include a virtual Berlin Wall, which tourists can use to see what a neighborhood looked like when the Wall was still standing; the Beatles tour, which has a nifty 3-D model of the Fab Four crossing Abbey road; and the AR marketplace, eLay.
Geography Gets Cool
Others see the potential of AR and location-sensitive computing, and are working on projects that could help -- or hurt -- Layar's ambitions. A multitude of AR apps are currently under development for different handheld platforms. As was the case with the Web, AR backers aim to make the infrastructure platform-agnostic. That means that even if AR might be used as a weapon in the battle for market share among handhelds in the short term, the longer war will be less about hardware than the quality of content.
Global handset leader Nokia wants to make sure it's in the AR game. The Finnish firm has spent billions on a bet that adding real information to the services on phone and handheld screens will be a major reason people buy their phones and use their services in the future. In 2008, Nokia spent $8.1 billion on Navteq, the world's largest digital mapping firm, which makes most of its revenues from selling its database for use in navigational aids. As AR grows, this sort of rich data will likely grow in value.
That's why Mira Maki-Mantila can often be found patrolling the streets of Finland. Maki-Mantila is one of Navteq's 1,000 geographers and spends a lot of her days sitting beside a driver in a van topped with a futuristic video camera. As she made her way around the snowy streets of Helsinki late last year, she recorded the street layout in a monotone voice - crossroad, crossroad, restricted turn, crossroad. Occasionally she took out a touch screen PDA and scribbled some notes on it. "It's a dream job for a geographer," she says.
Back in her office, Maki-Mantila continues mapping the world -- transcribing the data from her journey, updating old maps, building new ones, and marrying the information with a videostream of the road. Navteq's digital maps are used by the auto and mobile industries offering navigation services. Its main rival is the mapping arm of Amsterdam-based TomTom, which also provides maps to Google.
But it's not only map-based apps. Location-focused social networks like New York-based Foursquare are also catching on. Foursquare allows consumers to use their mobile phones to keep track of their friends' whereabouts and earn rewards for visiting bricks-and-mortar businesses.
Poynt, a company in the Canadian city of Calgary, had just 10 users when it started out in June 2008. Now its offering -- the ability to hold up your phone and get information about the businesses, movies, restaurants and even people around you -- has 4.5 million users in North America and Europe. "We've got this tiger by the tail and are just trying to hang on," says its CEO Andrew Osis.
Facebook Gets Uncool
There's more. Israeli entrepreneur Noam Bardin may not have Navteq's geographer-army but he does understand the power of online social networks. His company Waze asks its 2 million users to send back data and information as they drive round the world. "The number-one feature people ask for is the chance to see other users," says Bardin. "When we allowed people to see other users, people just loved it."
Games, too, have started to make an impact. On Layar, Pacman-style ARcade lets players "eat" virtual goods around them, while on iPhone, Shadow Cities, a role-playing game in which players cast spells on each other in a territorial fight over their real-life neighborhoods, hit the top of download charts last year in Finland, and is now heading to the U.S. market. People are jumping on busses to go and battle for dominance of parts of a town, enthuses Ville Vesterinen, chief executive and co-founder of Grey Area Labs, the company behind Shadow Cities. "We call it drive-by spell-casting."
Outfits like Boston-based mobile social gaming startup SCVNGR (pronounced scavenger) are after a similarly interactive experience. The Google-backed group modestly says it wants to build a game-layer on top of the world. It aims to combine mobile gaming with real-world challenges that are relevant to education and work, adding to the basic check-in features of services like Foursquare. Doing things digitally, SCVNGR execs hope, will capture people's interest more than just relaying real-world experiences on Facebook and Twitter.
"We are not trying to build another social network plus location," says its founder, Seth Priebatsch, who is up there with Lens-Fitzgerald when it comes to hype-generation. "We think the decade of social networking is over. It's called Facebook."
Monetizing The Space
There's just one problem: so far, location services and AR are not making much money. "Nobody has figured out a killer application in location yet," says Rich Wong of venture firm Accel Partners. Andre Malm of Swedish wireless research firm Berg Insight notes that the players are pretty much fighting for a slice of the same pie -- companies' advertising budgets.
The mobile advertising market is worth a tiny sliver of total online ad spending: $6.9 billion or 1.6 percent of $444 billion, according to research firm Strategy Analytics. "What it comes down to is, is there enough advertising money to go around in mobile? There seems to be a clear upward trend, but even at high growth rate it would take many years to become substantial," Malm says.
People like Vesterinen, who are deeply into virtual reality games already, are certain the money can be made, and not just in advertising. For a start, he points to Activision's "World of Warcraft" which has more than 12 million subscribers, each paying $15 or more each month. Contrast that with the current price of a mobile phone-based game: most often a one-off fee of $0.99.
"We have seen it's really difficult to build a business based on $0.99 applications. Even when you sell in the tens of millions you cannot build a sustainable business out of it," Vesterinen says. Case in point: Rovio, the Finnish firm behind the game "Angry Birds". Though "Birds" is a top-seller at app stores, Rovio's 10 million euros in sales last year was roughly on a par with the sum "Warcraft" pulls in a day. With high-quality content and with enough sustained user-generated involvement, though, Vesterinen believes people will be prepared to pay more serious sums.
Few experts see a brave new media world anytime soon. "Augmented Reality is not realistic for the mass-market within three years," says Accel's Wong. Intel Capital's Battisti agrees. "Will it hit the high street in 2011? No, it will take time," he says.
Hype My Envelope
Layar's Lens-Fitzgerald isn't worried. By getting in so early, his company is well-placed to cash in as interest in AR grows, however slowly. Already multinationals are coming. Swedish furniture chain IKEA built an app allowing customers to virtually transport an item of furniture from its catalog into their homes, and Danish toymaker Lego made one that allows customers to point a phone at a box and see what the finished product will look like.
Lens-Fitzgerald calls all this "brochureware". The money it brings in means that Layar, unlike some Web startups in the 1990s, already has a small revenue stream. That cash, plus injections of cash from Intel Capital and other investors, offer the company a financial cushion to give it time to refine its business case. The company is hiring: staff numbers are expected to double to closer to 100 over the year. "What we definitely don't know is what's going to happen in two years," he says.
That doesn't stop him from giving good hype. "We want to be the first giant originated from mobile," he says. "We want to be the biggest platform of Augmented Reality, the YouTube of Augmented Reality."
Comparing AR's emergence to that of radio and TV, Lens-Fitzgerald likes to talk about the way those formats only developed as people grew to appreciate each medium's real potential. "When TV emerged, the first programs were radio shows on TV, just people talking in front of a curtain. A long way away from ... 'American Idol'," he says. In the same way, apps that are being produced now are like early ventures in cinema. "We are at the stage of the silent movie. We see the potential ... but first have to get the current version to be successful."
Standing in the Layar office, you can see how he and his colleagues think like this. Outside the windows are two reminders of old media milestones: the logo of "de Volkskrant", a newspaper founded in 1919, and the offices of SBS Broadcasting, one of the companies that helped bring the "Big Brother" reality shows to living rooms around the world. AR, Lens-Fitzgerald says, is the next great leap. Addressing Google's Zeitgeist forum for Europe last May, he spelled out the vision: "Medium-specific content is being created -- content that does not exist on the web -- that cannot be put in a magazine or on TV, it only exists in AR, and it really is in its own there. We believe the future Amazon, the future eBay, is being born amongst the developers of Augmented Reality."
Hype is, of course, part of any digital media venture. Lens-Fitzgerald and the friends with whom he founded the company -- Raimo van der Klein and Claire Boonstra -- acknowledged that, when they drew their own back-of-the-envelope version of the 'Hype Cycle' devised by tech analysis firm Gartner. The Gartner analysis shows the typical trajectory of a new tech business, starting with the "Technology Trigger", and passing through the "Peak of Inflated Expectations" and the "Trough of Disillusionment" before reaching the "Plateau of Productivity". Prominent on Layar's sketch, which they've posted to Flickr, is a bold arrow that continues to rise beyond the "Plateau of Productivity" phase.
Lens-Fitzgerald built his first website -- for Royal Dutch/Shell -- in 1994, and on his blog gives equal prominence to the year he went online (1993) as to the year of his birth. His tweets (handle: Dutchcowboy), and blog -- including a day-by-day account of his 2008 treatment for a tumor "the size of two fists" between his lungs -- display a lively irreverence. His blog landing page shows him in a schoolboy-scarf sticking his tongue out at the world.
He has a lot to get done. His cancer diagnosis -- he now calls himself "ex-patient 2.0" -- came just a couple of weeks before he was due to form the startup that paved the way for Layar. He actually signed the papers that founded the company on his way into hospital for his first session of chemo.
Despite his e-mail sign off, he's not actually likely to write mails on his bike. "When you cycle in Amsterdam," he says, "you have to watch out for trams and taxis." Even for the man who wants to build our next virtual world, some things are just too real to ignore.
(Editing by Sara Ledwith and Simon Robinson)
Blackberry Says Will Abide by Indonesia Porn Access Ban
Research In Motion, makers of the popular Blackberry telephone and messaging system, said on Monday they would comply with an Indonesian government order to block access to porn sites from its devices.
Communications and Information Minister Tiffatul Sembiring threatened RIM's Indonesian browser service if the Canadian firm failed to block porn access by January 21.
He said also that RIM should set up servers in Indonesia and employ more locals, while questioning why the government wasn't taxing the company's local operations.
"We're committed to the Indonesian market place to provide a solution that satisfies the requirements -- particularly by the ministry," said Gregory Wade, director of Asia Pacific for RIM, after a meeting with Indonesian government officials on Monday.
"We're very much focused on meeting the timelines and deadlines that have been discussed."
Sembiring, a firebrand Islamic conservative and savvy social media user, posted on Twitter last week that Indonesia has 3 million Blackberry users generating revenues of 2.27 trillion rupiah ($250.77 million), but yielding nothing for the state.
The figures could not be independently verified.
RIM gets an increasing share of its revenue from outside North America and Western Europe as it comes under pressure in its most established markets from Apple's iPhone and devices running Google's Android operating system.
But the firm has been hit by demands for access to its encrypted data from numerous countries worried about security and social mores -- including India, Saudi Arabia and the United Arab Emirates.
RIM says the location of its servers makes no difference to the ability to decrypt the data flow on its devices as well as giving access to for Indonesian legal investigators to tracking crimes.
RIM operates in about 175 countries across the globe and Indonesia is one of its fastest-growing markets.
Indonesia, an emerging market investor darling last year, is trying to encourage more foreign direct investment and lift corporate tax revenues to reduce reliance on volatile "hot money" flows and to stabilize its long-term finances.
The Indonesian investment board said on Wednesday it expected direct foreign and domestic investment in 2011 to grow 15 percent from last year to 230 trillion rupiah. Investors are interested in infrastructure, manufacturing and consumer demand.
Uncertain regulations, red tape and rampant graft have in the past often put off Western foreign direct investment.
(Reporting by Telly Nathalia; Editing by David Fox)
Vista Proven an Effective Net Filter by EC Tests
Microsoft's much-maligned operating system Vista has proven the third most effective PC tool available to parents to filter out inappropriate web content for children, according to tests by the European Commission.
But none of the 26 products tested by the EC achieved a perfect score when it came to filter capabilities.
All the tools tested by the Commission demonstrated an alarming underblocking rate – that is, the amount of harmful content missed by the filter – of greater than 20 percent.
Some of the tools tested were also able to be bypassed or uninstalled by users.
A common security weakness identified in the tools was allowing access to a prohibited page through translation sites or Google cache.
The three highest scoring products in the tests, on a scale of zero to four, were: Vise (3.5), CyberSieve (3.4) and Windows Vista (3.2).
All tools allowed parents the "possibility to block content according to categories based on topics", and almost 85 percent of the tools enabled parents to block access to certain websites.
However, the tested products were generally less efficient at filtering out social networking sites or blogs.
In addition, only a few products on the market are able to filter web content accessed via mobile phones or game consoles, at a time when one child out of four in Europe goes online in this fashion.
About 80 percent of the products tested offered parents at least a basic report on a child's web activity (visited websites or violations). Some also provided specific alerts with violations and more detailed reports.
Other key findings:
* Most tools provide a complete set of customisation functionalities (topic, URL and black/whitelists);
* Most tools enabled parents to create and manage different profiles for users with different needs;
* Most tools could block web-based streaming provided by YouTube, if not with a specific option then at least by adding the site to a blacklist;
* Many tools could block MSN Messenger but less than a half were able to block Skype.
* Filtering for contacts was still a rare capability.
Man Tunnels into GameStop, Steals Games
We mean literally tunnels, with a pick-axe
Computer game piracy is big business, but there are still those who prefer to get their games the old-fashioned way: by digging a tunnel into their local games shop and making off with as much stock as they can carry.
At least, that's the slightly bizarre approach taken by a man from Greeneville, Tennessee, who was arrested late last week after being caught tunnelling into his local GameStop store from an empty adjoining building.
The heist, which would perhaps have been more suited to robbing a bank than a games retailer, resulted in Steven Archer, 33, making off with almost $300 in cash and around $5,400 in games - hardly the scam of the century, but a pretty good haul nevertheless.
Sadly for Archer, he didn't have long to enjoy his ill-gotten gains: leaving a trail of evidence, the man was arrested by Detective Pat Hankins and charged with felony burglary, according to local paper The Greenville Sun.
While most people who don't want to pay for their games rely on digital methods such as peer-to-peer file sharing services and binary Usenet groups, it's refreshing to see that some still long for a simpler time when a pickaxe and patience was all you needed.
Do Video Games Fuel Mental Health Problems?
There might be trouble brewing behind the glassy eyes of kids who spend too much time and energy on video games, according to a controversial new study.
In the 2-year study of more than 3,000 school children in Singapore, researchers found nearly one in ten were video game "addicts," and most were stuck with the problem.
While these kids were more likely to have behavioral problems to begin with, excessive gaming appeared to cause additional mental woes.
"When children became addicted, their depression, anxiety, and social phobias got worse, and their grades dropped," said Douglas A. Gentile, who runs the Media Research Lab at Iowa State University in Ames and worked on the study.
"When they stopped being addicted, their depression, anxiety, and social phobias got better."
He said neither parents nor healthcare providers are paying enough attention to video games' effect on mental health.
"We tend to approach it as 'just' entertainment, or just a game, and forget that entertainment still affects us," he told Reuters Health in an e-mail. "In fact, if it doesn't affect us, we call it 'boring!'"
But an independent expert said the study had important flaws.
"My own research has shown that excessive video game play is not necessarily addictive play and that many video gamers can play for long periods without there being any negative detrimental effects," said Mark Griffiths, director of the International Gaming Research Unit at Nottingham Trent University in the UK.
"If nine percent of children were genuinely addicted to video games there would be video game addiction clinics in every major city!" he said in an e-mail, adding that the concept is not currently an accepted diagnosis among psychiatrists and psychologists.
Part of the problem, Griffiths argued, is that the new work may be measuring preoccupation instead of addiction.
In the study, teachers handed out questionnaires to students in the third, fourth, seventh and eighth grades, including questions about their gaming habits, social skills, school performance and depression.
The kids also answered ten questions to find out if they were addicted to gaming -- so-called "pathological" gamers. If they answered half in the positive, they got the label.
The questions included things like having neglected household chores to spend more time on video games, doing poorly on a school assignment or test as a result, or playing video games to escape from problems or bad feelings.
On average, the kids said they played about 20 hours a week. Between 9 and 12 percent of boys qualified as addicted in this study, compared to 3 to 5 percent of girls.
Of those children who started out as addicts, more than eight in 10 remained so during the study. "It's not simply a short-term problem for most children," Gentile said.
While the researchers didn't put a number on how many youngsters had mental problems, they did find that those who played longer hours, were more impulsive or had poorer social skills were at higher risk of getting "addicted" over the 2-year period.
Those who did become addicted reported increasing symptoms of depression, anxiety and social phobia.
Gentile said it appeared that unhealthy gaming habits were fueling the kids' mental problems, which then in turn might cause them to up their screen time and so forth. But he acknowledged his research didn't prove that point.
In an earlier U.S. study, he found that children who watched a lot of TV or played a lot of video games had slightly more problems concentrating on school work. However, that study couldn't prove that screen time was at the root of the narrowing attention span, either.
The American Academy of Pediatrics, which published the new study in its journal Pediatrics, recommends limiting children's time in front of computers or TVs to 2 hours daily.
"One thing we have to bear in mind is that children playing video games for 2 to 3 hours a day is normal. It's displaced activities like watching TV," Griffiths said.
Still, he said a small minority of kids probably do suffer from true video game addiction, just as some people are pathological gamblers.
In general, Griffith advises that parents try to give their kids educational games instead of violent ones, encourage playing in groups, and follow the directions from the manufacturers, such as sitting at least two feet from the screen and not playing when feeling tired.
"I have three kids, all of who are the archetypal 'screenagers' who spend a lot of time a day interacting with technology" said Griffiths. "Basically, even when playing a couple of hours most days it is not impinging negatively on their lives."
SOURCE: bit.ly/cxXOG Pediatrics, online January 17, 2011.
Mom Challenges Family to Unplug for 6 Months
No computer, TV, Internet and cell phones resulted in small pleasures, book deal
Beth J. Harpaz
Susan Maushart lived out every parent's fantasy: She unplugged her teenagers.
For six months, she took away the Internet, TV, iPods, cell phones and video games. The eerie glow of screens stopped lighting up the family room. Electronic devices no longer chirped through the night like "evil crickets." And she stopped carrying her iPhone into the bathroom.
The result of what she grandly calls "The Experiment" was more OMG than LOL — and nothing less than an immersion in RL (real life).
As Maushart explains in a book released in the U.S. this week called "The Winter of Our Disconnect" (Penguin, $16.95), she and her kids rediscovered small pleasures — like board games, books, lazy Sundays, old photos, family meals and listening to music together instead of everyone plugging into their own iPods.
Her son Bill, a videogame and TV addict, filled his newfound spare time playing saxophone. "He swapped Grand Theft Auto for the Charlie Parker songbook," Maushart wrote. Bill says The Experiment was merely a "trigger" and he would have found his way back to music eventually. Either way, he got so serious playing sax that when the gadget ban ended, he sold his game console and is now studying music in college.
Maushart's eldest, Anni, was less wired and more bookish than the others, so her transition in and out of The Experiment was the least dramatic. Her friends thought the ban was "cool." If she needed computers for schoolwork, she went to the library. Even now, she swears off Facebook from time to time, just for the heck of it.
Maushart's youngest daughter, Sussy, had the hardest time going off the grid. Maushart had decided to allow use of the Internet, TV and other electronics outside the home, and Sussy immediately took that option, taking her laptop and moving in with her dad — Maushart's ex-husband — for six weeks. Even after she returned to Maushart's home, she spent hours on a landline phone as a substitute for texts and Facebook.
But the electronic deprivation had an impact anyway: Sussy's grades improved substantially. Maushart wrote that her kids "awoke slowly from the state of cognitus interruptus that had characterized many of their waking hours to become more focused logical thinkers."
Maushart decided to unplug the family because the kids — ages 14, 15 and 18 when she started The Experiment — didn't just "use media," as she put it. They "inhabited" media. "They don't remember a time before e-mail, or instant messaging, or Google," she wrote.
Like so many teens, they couldn't do their homework without simultaneously listening to music, updating Facebook and trading instant messages. If they were amused, instead of laughing, they actually said "LOL" aloud. Her girls had become mere "accessories of their own social-networking profile, as if real life were simply a dress rehearsal (or more accurately, a photo op) for the next status update."
Maushart admits to being as addicted as the kids. A native New Yorker, she was living in Perth, Australia, near her ex-husband, while medicating her homesickness with podcasts from National Public Radio and The New York Times online. Her biggest challenge during The Experiment was "relinquishing the ostrichlike delusion that burying my head in information and entertainment from home was just as good as actually being there."
Maushart began The Experiment with a drastic measure: She turned off the electricity completely for a few weeks — candles instead of electric lights, no hot showers, food stored in a cooler of ice. When blackout boot camp ended, Maushart hoped the "electricity is awesome!" reaction would soften the kids' transition to life without Google and cell phones.
It was a strategy that would have made Maushart's muse, Henry David Thoreau, proud. She is a lifelong devotee of Thoreau's classic book "Walden," which chronicled Thoreau's sojourn in solitude and self-sufficiency in a small cabin on a pond in the mid-1800s. "Simplify, simplify!" Thoreau admonished himself and his readers, a sentiment Maushart echoes throughout the book.
As a result of The Experiment, Maushart made a major change in her own life. In December, she moved from Australia to Long Island in New York, with Sussy. Of course, the move merely perpetuated Maushart's need to live in two places at once: She kept her job as a columnist for an Australian newspaper and is "living on Skype" because her older children stayed Down Under to attend university. Ironically, the Internet eased the transition to America for Sussy, who used Facebook to befriend kids in her new high school before arriving.
Another change for Maushart: She's no longer reluctant to impose blackouts on Sussy's screentime. "Instead of angsting, 'Don't you think you're spending too much time on the computer? Don't you think you should do something else like reading?' I now just take the computer away when I think she's had enough," Maushart said in a phone interview. "And now that she's been on the other side and remembers what it's like, it's less of an issue."
Maushart realizes that living off the grid for six months is unrealistic for most people. (She also admits getting her kids to go along with it partly by bribing them with a cut of proceeds from the book, which she planned to write all along.)
But she encourages families to unplug periodically. "One way to do it is just to have that one screen-free day a week. Not as a punishment — not by saying, 'I've had enough!' — but by instituting it as a special thing," she said. "There isn't a kid on the planet who wouldn't really rather be playing a board game than sitting at the computer."
Text Messaging 'Improves Children's Spelling Skills'
Mobile phone text messaging can boost children’s spelling skills, according to new research.
The use of “textisms” can improve literacy among pupils by giving them extra exposure to word composition outside the school day, it was claimed.
The conclusions come despite fears that the use of abbreviations such as “CU L8R”, “Gr8” and “innit” can undermine children’s reading and writing.
Critics have suggested that text messaging can blur the boundaries between colloquialisms and standard English, with some teachers claiming that slang is now creeping into children’s school work.
But academics from Coventry University said there was “no evidence” that access to mobile phones harmed children’s literacy skills and could even have a positive impact on spelling.
In the latest study, researchers recruited 114 children aged nine and 10 from primary schools in the Midlands.
The pupils, who did not already use a mobile phone, were split into two groups.
Half were given a handset to use for texting over weekends and during the school holidays over a 10-week period. The remaining pupils formed a control group.
Academics then gave pupils a series of reading, spelling and phonological awareness tests before and after the study. Pupils’ reading and spelling was also monitored week-on-week.
The research, to be published in the Journal of Computer Assisted Learning next month, found evidence of a “significant contribution of textism use to the children’s spelling development during the study”.
This study, which took account of individual differences in IQ, found higher results in test scores recorded by children using mobile phones after 10 weeks compared with the start of the study.
According to the report, the association between spelling and text messaging may be explained by the “highly phonetic nature” of the abbreviations used by children and the alphabetic awareness required for successfully decoding the words.
“It is also possible that textism use adds value because of the indirect way in which mobile phone use may be increasing children’s exposure to print outside of school,” said the report, funded by Becta, the Government’s education technology agency.
Prof Clare Wood, senior lecturer in the university’s psychology department, said: “We are now starting to see consistent evidence that children’s use of text message abbreviations has a positive impact on their spelling skills.
“There is no evidence that children’s language play when using mobile phones is damaging literacy development.”
New Service Helps You Hire College Students to Run Your Errands
Name: Agent Anything
Quick Pitch: Agent Anything provides an affordable errand service by employing college students during their free time.
Genius Idea: Concierge, generally speaking, is a luxury service. Chicago-based Endeavor Concierge, for instance, charges $30 for an hour of services that include gift shopping, running errands or making reservations. For most people, it’s worth making time to pick up the dry cleaning themselves.
Agent Anything, however, has devised a way to make concierge affordable. Using its website, clients (as in, anyone who takes five minutes to set up an account) can sign up to have a college student complete any task at any price. Students select and accomplish these “missions” whenever they have free time. Today’s available tasks include posting items on eBay and finding an unemployed person for a firm that represents clients at unemployment hearings. One woman who had broken her arm once hired a college student to change a light bulb in her kitchen for $10.
Having college students sign up for these tasks is a brilliant move. They have random pockets of free time, don’t need full-time jobs with health benefits, and (thanks to the college admissions process) are generally not criminals. Employing them task-by-task brings the cost of the service down and makes it easier to trust.
Agent Anything’s service makes a lot of sense on both sides. It’s drastically cheaper than concierge and more organized and reliable than Craigslist, which doesn’t use the college admissions as a screening process. Harry Schiff, the company’s founder and president, says that since the New York City site launched in September, more than 1,000 clients have signed up to post missions and more than 1,300 college students have signed up to complete them.
The question is whether it will be able to survive long enough for the idea to catch on. The company’s sole source of revenue is a fee for posting tasks. For a $10 task, Agent Anything charges a client about $2.50. That’s a whole lot of missions that need to be accomplished before the startup, which is currently operating using seed funding, will be profitable.
The potential market — senior citizens, busy moms, workaholics, people who want to save a couple of bucks on something like help moving — is huge. Almost everyone could use some help with various errands once in a while. But few realize that they can get it affordably.
“The need is there, but the demand is not…yet,” Schiff says.
Whether demand does catch up is in the hands of the startup’s marketing efforts.
How Much Does a Single Search Cost Google?
Bill Warner's Blog
I was wondering how much it costs Google to perform a single search. So I searched in Google, and was not able to find any readily available data that looked reliable. So I used up the better part of Saturday morning working on creating my own number.
I was able to find some ComScore data on total searches from July 2009, and I got Google's financials from 2009 from the SEC site.
My calculation? I estimate that it costs Google .68 cents per search in July 2009 in direct costs, and another .50 cents in overall operating costs, or a total of 1.18 cents per search. That's considerably more than I would have expected. (Please check my math and sources!)
I also found that for 78 billion searches in the month of July 2009, Google needed 3.442 B of capital equipment to support those searches. (Excludes YouTube and other non-search capital). Thus each search performed that month needed 4.4 cents of capital equipment. I did notice on Google's later financials that their capital costs didn't go up that much, so their capital cost per search is likely dropping. (plummeting?)
I'm wondering if anyone has newer data or more accurate data that they could plug in? Please let me know in the comments section.
Here is the Apple Numbers Spreadsheet with all my source information. Please let me know if you find errors. Apple Numbers is nice because it lets you combine many spreadsheets on one "canvas."
Click here to download:
Google_Cost_Per_Search_Estimate.numbers (113 KB)
Where News Is Power, a Fight to Be Well-Armed
Bobby Maldonado has the morning routine of a well-trained marathoner.
With the help of three alarm clocks, he gets up at 4 a.m., is showered and out the door in less than an hour, and scans his BlackBerry almost constantly as he makes his pretimed 12- to 13-minute trek to the Red Line Metro stop where he catches the first train downtown.
He knows exactly where to stand so he can get into the car that deposits him just steps from the escalator at the Farragut North station. “It’s an efficiency thing,” he explained, “so I don’t get stuck behind people, so I hit the crosswalk at the right minute.”
Cutting diagonally across Farragut Square, he arrives at his office at the U.S. Chamber of Commerce on H Street just after 5:30 a.m. There, in a darkened cubicle, he scans the Internet for the day’s news and condenses it into a two-page memo that he shoots off to Thomas J. Donohue, the Chamber’s president, and other top executives before 8 a.m. He is never late.
Mr. Maldonado, 26, is one of the dozens of young aides throughout the city who rise before dawn to pore over the news to synthesize it, summarize it and spin it, so their bosses start the day well-prepared. Washington is a city that traffics in information, and as these 20-something staff members are learning, who knows what — and when they know it — can be the difference between professional advancement and barely scraping by.
“Information is the capital market of Washington, so you know something that other people don’t know and you know something earlier than other people know it is a formulation for increasing your status and power,” said David Perlmutter, the director of the School of Journalism and Mass Communication at the University of Iowa. “So any edge you can use to get stuff faster, earlier, better or exclusively is very important.”
For Mr. Maldonado, who said that “the information wars are won before work,” that means rising early to browse all of the major newspapers, new polling data, ideological Web sites and dozens of news alerts needed to equip his bosses with the best, most up-to-date nuggets.
“Our executives walk into meetings and they’re doing battles, whether it’s on health care or cap and trade, and information is power, and my job is to make sure they’re armed with the most powerful information,” he said. “It’s reading the 1,000 stories in the papers and Hill rags, and finding that one needle in the haystack that’s going to matter.”
No hard data exists on how many people spend the hours before breakfast rounding up news and e-mailing clips and quick summaries, and everyone’s routine varies slightly.
Andrew Bates, a media monitor in the White House communications office, is up by 4 a.m. to look over 30 to 40 Web sites and blogs, as well as watch the morning television news and talk shows, and send out relevant news clips to the top ranks of the Obama administration. He has even been known — with the help of Google Translator — to translate articles from other languages.
Mr. Bates could “give anyone in this town a run for their money on ‘Jeopardy!’ ” Jen Psaki, the deputy White House communications director, said jokingly.
Mr. Bates, 24, said his early-morning search was intended to harvest “something that’s very strong, that advances an argument well, or anything that could be jeopardizing or damaging, like criticism.”
Over at the Treasury Department, Megan Leary, a financial economist for the markets room, and six other analysts are each assigned one day a week to get to work at roughly 5 a.m. There, they monitor overnight shifts in the markets and put together a morning briefing for the Treasury secretary.
“I think a lot of why the markets room is valuable is because it’s very unfiltered,” Ms. Leary said. “It’s not like we write something and a week later it goes to the secretary or president. They get it that day.”
Ms. Leary is becoming a familiar customer to the drivers of the cab company she calls the night before to set up her predawn rides. “Sometimes I just get in a cab and I don’t need to say where I’m going,” she said. “He just goes.”
At the Chamber, Mr. Maldonado’s duties also include a morning phone call with Mr. Donohue, the president, who sometimes presses him for a more in-depth analysis on certain topics.
“I study three hours every day, and every now and then I go before the professor and answer questions,” Mr. Maldonado said. “I’m not a policy expert, but I’ll always try to know two or three questions he might ask.”
Getting up early is nothing new, but the lightning speed of news on the Internet and the proliferation of outlets like Politico, which place a premium on “winning” the day, has made the job more demanding and pushed the mornings ever earlier.
“There’s no news cycle anymore,” Dr. Perlmutter said. “You don’t want to be coming into the office at 8 a.m., and everyone is saying, ‘Oh, my God, can you believe what happened?’ And you’re going, ‘What happened?’ ”
Such a response is not likely to come from Mr. Bates, according to the White House communications director, Dan Pfeiffer, who said these jobs benefited employer and employee.
“Rapid response requires knowing that there is something that needs response,” Mr. Pfeiffer said. “For such a young guy, Andrew has a great ability to sniff out stories that need to be handled with dispatch. During our biggest fights, from health care to the Supreme Court confirmations, Andrew repeatedly spotted potential problems in the farthest reaches of the Internet before anyone else. That information was essential to our success.”
A Democratic National Committee spokeswoman, Brandi Hoffine, rises between 5 and 6 a.m. for what she affectionately calls “Breakfast with Brandi”— the time she begins sending out news articles she sees as favorable to the committee’s agenda to her e-mail list of 500 or so reporters.
“We all work in environments where a 24-hour news cycle can very quickly become a 24-minute news cycle,” Ms. Hoffine said. “Being in a reporter’s in-box first, even by a few minutes, can make a big difference.”
Most of those who work the predawn shift go on to put in a more-than-full day at the office, leaving in the evening like everyone else. The lack of sleep can make for a grind. But for Washington’s young and ambitious, it also provides a welcome opportunity to learn a department or an agency from the ground up and can often be a way to fast-track a career. In the White House, for instance, Dag Vega, the director of broadcast media, and Amy Brundage and Reid Cherlin, both administration press officers, all cut their teeth trolling for meaty early-morning news clips.
Until recently, when he was promoted to assistant communications director for Speaker John A. Boehner’s political office, Kevin Boland, 25, put together a 50-page national press briefing for Mr. Boehner and his House office. He recalled getting up around 5 a.m., and still in his pajamas, putting on some coffee, and reading Web sites and compiling his report from home. At 7 a.m. he would hit the “send” button on his computer, and walk over to the Capitol for the rest of his day.
“I found it helpful and valuable, and I have a much better appreciation for what the people in the office do,” Mr. Boland said, joking: “They at least have to know who I am if they want to junk me, or put me in the trash.”
For Magazines, a Bitter Pill in iPad
Jeremy W. Peters
The frustration that the country’s magazine and newspaper publishers feel toward Apple can sound a lot like a variation on the old relationship gripe, “can’t live with ’em, may get left behind without ’em.”
Since Apple introduced the iPad last year, publishers have poured millions of dollars into apps in the hopes that the device could revolutionize the industry by changing the way magazines are read and sold to consumers.
But at the same time, the industry is discovering a lesson already learned by music labels and Hollywood studios: Apple may offer new opportunities with its devices, but it exacts a heavy toll. Magazine publishers argue in particular that limiting magazine sales on the iPad to single issues (except in a handful of cases) has hamstrung publishers from fully capitalizing on a new and lucrative business model.
“If you look at the Apple store,” said David Carey, president of Hearst Magazines, which offers five publications on the iPad, “the most common reason that people give an app a low rating is that it lacks a subscription option. They want to subscribe, and they don’t like the idea of paying $4.99 a month.”
Many applications cost almost as much as a printed copy of a magazine, a difficult concept for consumers to get their heads around considering that a paper product is more expensive to assemble and distribute than an electronic version of a magazine. The New Yorker, for example, costs $4.99 an issue in Apple’s App Store but $5.99 on the newsstand. Esquire is also $4.99 an issue, the same as the cover price on the newsstand.
Subscriptions are another sticking point. A vast majority of magazines available on the iPad must be bought per copy. Customers cannot subscribe and have it delivered as they can with other publications available on the iPad like The Economist, The Wall Street Journal or The Daily, the News Corporation’s new iPad-only venture that is to begin within the next few weeks. That means if consumers want to receive the magazine regularly, they would have to pay far above normal subscription rates.
“Sheer highway robbery,” read one recent comment about The New Yorker in the App Store. “I’ll keep with my paper subscription. I will never pay $250 per year for an app.”
In addition to limiting magazine sales to single issues, Apple has declined to share consumer data, meaning the Hearsts, Condé Nasts and Time Incs. of the publishing world know nothing about the people who are buying their digital magazines.
While they are far from writing off the iPad, publishers are eagerly awaiting the development of new tablet technologies from Google, BlackBerry and others that could at least give them some leverage.
“I think that the new devices and the new Android-based devices will be as good or better than Apple long term,” said Bob Sauerberg, president of Condé Nast, which produces iPad versions of five of its magazines, including Vanity Fair, GQ and The New Yorker, but also sells content for the Amazon Kindle and the Barnes and Noble Nook Color and for Android-based devices.
“We feel strongly that it’s too early to pick a winner,” Mr. Sauerberg added. “The iPad is a great device with an early lead. We see a lot of other great devices.”
There is a similar thirst for more tablet competition at Condé Nast’s crosstown rivals Time Inc. and Hearst Magazines, which have developed applications across a variety of platforms that compete directly with Apple.
Hearst publishes Esquire, O: The Oprah Magazine, Popular Mechanics, Marie Claire and Seventeen on the iPad. But it sells all of its magazines through the Nook and Zinio, an application that allows consumers to buy and download versions of their magazines on a variety of devices, including iPads. Time Inc. sells iPad versions of People, Sports Illustrated and Time but also sells content for the Android system, BlackBerry and Kindle.
“I do believe that in the next year,” Mr. Carey added, “with all the new developments and all the new Android devices, that the industry will have a subscription option.”
One publisher that seems to have been granted favored-nation status is the News Corporation, which is developing The Daily, an original iPad newspaper. The Daily will be sold through Apple as a recurring subscription, meaning subscribers will be automatically billed a small fee — expected to be about $1 a week — to receive the publication on their iPads every day. The development of the subscription software was said to be the reason The Daily’s debut was pushed back.
The project is a top priority for Rupert Murdoch, chairman of the News Corporation. He has personally involved himself in its development and has been known to drop in on The Daily’s offices from time to time on the 26th floor of company’s Midtown Manhattan office tower.
It is expected that magazines will eventually have an arrangement similar to the one the News Corporation has with Apple that allows for iPad subscriptions. But no such deals have been struck yet with Condé Nast, Hearst or Time Inc., said people close to discussions with Apple that were intended to be private.
Magazine publishers — who are still stinging from the economic collapse of 2008 — want more than anything to settle on a business model that works on their terms. And what the tablet market finally provides is a viable digital business, something that eluded them with the rise of the Internet.
Tablets, they believe, offer magazines a do-over in digital form. The picture quality can be far better on a tablet than on a computer screen; the ability to create multimedia, interactive storytelling is greater; and there are more opportunities for advertisers to innovate.
“If I’m a magazine publisher, I have a new vehicle and a new environment which allows me richer content and more consumer friendly interaction,” said Andrew Swinand, president of the Starcom MediaVest Group, which works with advertisers to place their content in magazines.
Mr. Swinand said he had noticed magazines embracing tablets in a way they never did with the Internet. “There’s a whole other transition taking place with the death of the Internet and the birth of the app,” he added. “So instead of www.magazine.com, you actually have apps that allow you to create richer content experiences.”
Tablet applications also open up a business for magazines other than just selling their regular monthly or weekly issues. Stand-alone special editions that offer readers how-to tips on everything from travel to cooking to painting your house can be perennial sellers with no shelf life. For example, for $4.99 iPad users can download the new Condé Nast Traveler application on Italy or the Real Simple guide to cooking meals that take 40 minutes or less.
“You have a way to monetize your content in an evergreen environment,” said Mr. Swinand.
But there are many kinks that still need to be ironed out in this young business. Being able to sell subscriptions through the most popular tablet device on the market is no small matter for publishing companies, which have always relied on subscribers as the cornerstone of their business. With limited exceptions, most magazines rely not on newsstand sales, which are impulsive and irregular, but on subscriptions.
Consumers tend not to make magazine purchases in the App Store in the same way they do at retail newsstands, publishing executives said.
“This is not the same kind of impulse sale that’s offline at checkout,” said Steve Sachs, executive vice president for consumer marketing and sales at Time Inc. “That’s not the purchase behavior that we see in a digital newsstand or an app store. It’s not about a particular cover. It’s about wanting to read in general. So a subscription model makes sense.”
This year is when many publishers see the tablet business really taking off, with some estimates putting the number of devices to be sold near 50 million.
“We are still very much in the first inning of the game,” said John P. Loughlin, executive vice president of Hearst Magazines. “The second inning is presumably about to begin sometime this spring as manufacturers begin to aggressively populate the market with a lot more devices.”
Miguel Helft and Claire Cain Miller contributed reporting.
New York Times Paywall to Cost Less Than $20 a Month
Full access to the New York Times website will cost less than $20 a month, Bloomberg reports citing a source familiar with the matter.
This is significantly less than the $11.70 a week which is the price for the printed edition, and also less than $19.99 which is the price for a monthly subscription to NYT on Amazon’s Kindle.
However, Bloomberg‘s source claims that subscribers to the print version of NYT will get full access to the online service as well. Furthermore, president of the New York Times Scott Heekin-Canedy said last month that the price for access to the web edition would be comparable to the Kindle subscription, which probably means it will be just a tad lower than $20 a month.
The paywall, which was scheduled to go up this January, is a reversed approach from what NYT was doing so far: right now, it charges for archived and editorial content while the new content is free. With the paywall up, a set number of articles will remain free each month for non-subscribers, but anything over that number will require a monthly subscription.
Most publishers and experts agree that you cannot just go all-or-nothing and start charging for content that customers are used to getting for free. The NYT has been testing the waters for quite some time, releasing bits of information here and there and obviously trying to determine the right balance between the amount of content that should remain free for all and the amount of subscribers-only content as well as the right price for it.
Under Pay Model, Little Effect Seen on Papers’ Web Traffic
Jeremy W. Peters
While newspapers around the world are anxiously asking themselves what would happen if they started charging readers to view articles online, a few answers have started to emerge.
Steven Brill’s Journalism Online experiment, which developed a system that allows newspapers to charge their most regular online visitors, has analyzed its preliminary data and found on average that advertising revenue and overall traffic did not decline significantly despite predictions otherwise.
The sample size of Journalism Online’s data was small — about two dozen mostly small- and medium-size papers that had been charging readers for several months — so divining any potential pattern for large newspapers is difficult.
But the initial findings showed that newspapers found success with a pay model by setting a conservative limit for the number of articles visitors could read free each month, and by making clear that most readers would not be affected.
Journalism Online said monthly unique visits to the Web sites included in its study fell zero to 7 percent, while page views fell zero to 20 percent. No publishers reported a decline in advertising revenue.
Unlike a strict pay wall — which requires a subscription to view almost all editorial content — a model like the one Journalism Online employed does not choke off huge amounts of Web traffic.
“If you set this meter conservatively, which we urge people to do, it’s a nonevent for 85, 90, 95 percent of the people who come to your Web site,” Mr. Brill said.
Mr. Brill said most papers set a limit on the number of free articles readers could view from five to 20 each month. Papers charged a range of monthly subscription fees from around $3.95 to $10.95.
L. Gordon Crovitz, a former Wall Street Journal publisher who is helping run the project, said one lesson to be taken from the numbers so far is that readers were willing to pay for some, but not all, content online. Consumers “will pay for the few news brands they really rely on, if they use them a lot,” he said.
The newspapers using the Journalism Online venture were focused on local news and included The Columbus Dispatch in Mississippi and The York Daily Record in Pennsylvania.
With the exception of The Wall Street Journal, large American newspaper Web sites have so far remained free. The New York Times will become the largest American newspaper to employ a subscriber option for its Web site when it begins a system early this year to charge the heaviest users of NYTimes.com.
Tim Ruder, chief revenue officer of Perfect Market, a news media consultant, said that what worked for small papers would not necessarily work for large papers. But he added that since no larger national papers have switched from free to partial pay, it was difficult to make any guesses. “How well that success will translate to larger sites depends on many things, including the quality, nature and exclusivity of content,” he said.
Kindle Lending Club Is a Library of User-Contributed Kindle Ebooks
Instead of buying new content for your Kindle, Kindle Lending Club lets you search for users willing to lend their Kindle ebooks to anyone with the desire to read.
It's easy pulling a book off a shelf and lending it to a friend, but until recently it was much harder to lend an ebook. Thanks to Amazon's recent addition of Kindle lending, however, you can easily borrow or lend a book to family or friends for 14 days.
Kindle Lending Club is a great way to share books free with the largest community possible—the web. Users without Kindles should note it's not necessary for them to own a device in order to borrow an ebook since Amazon has provided Kindle applications for Windows/Mac, and OS/Android/BlackBerry/Windows Phone 7 owners.
Currently publishers have to enable lending, so not all ebooks are available to be shared. Hopefully we'll continue to see the quality and quantity of shared books rise, and the number of users willing to share them.
Send to Kindle: Any Web Page Text, with One Click, Using Chrome Browser.
Using a Google's Chrome browser extension to send a web article to your Kindle with one keypress, more or less.
While this blog has an earlier article on using Instapaper to send articles to the Kindle and a revision of Instapaper has made it even easier now, what's described here is a new feature possible via the Chrome browser.
With the new Send to Kindle option, you can specify that the text content of a webpage you're on be sent to your Kindle at [you]@free.kindle.com. This Kindle address avoids the 15 cents per megabyte charge for sending a personal document over 3G Whispernet instead. The [you]@free.kindle.com Kindle-address is designed for free delivery to the Kindle over WiFi.
(If you don't have the WiFi capability (older models) and don't want to get the article by computer and move it to the Kindle via the USB cable, the 3G cellular network capability of any Kindle can be chosen instead by using the [you]@kindle.com address but the delivery would cost 15 cents per megabyte [99 cents per megabyte for non-U.S. Kindle owners]).
See the earlier Kindleworld guide that explains how to use the no-cost [you]@free.kindle.com address for free delivery to your Kindle (UK: K3).
Essentially, to use the Send to Kindle feature, Kindle users need to:
1. open the feature's "Options" page and enter their Kindle's registered email ([you]@free.kindle.com) there, and
2. add the Chrome-extension sender, email@example.com, as an approved sender at Amazon's Kindle management page.
There is an automated option and a manual one. Remember that you can select what part of the page is sent to you or use the automated option and, in both cases, only text (not images) is sent.
Tip: To get the images accompanying a story, I highlight what I want and paste it all into a Microsoft Word document and then send the saved document to my free.kindle.com address.
Amazon converts it to Kindle format before sending it to the Kindle.
What Hollywood Execs Privately Say About Netflix
As the company plans to spend $1.2 billion in 2012, some express relief that they are buying content no one else wants such as ‘Pushing Daisies’
The following story appears in the current issue of The Hollywood Reporter on newsstands now. Subscribers can click here to read the issue online.
Disgusted that a video rental store raked him over the coals for returning a movie late, Reed Hastings created Netflix. Seventeen million subscribers later, some people probably wish a clerk would have just refunded the man his 40 bucks.
Topping the list would be about 12,000 who have lost jobs at Blockbuster during the past couple of years as Netflix and its subscription DVD business have run circles around stodgy bricks-and-mortar storefronts. Next in line are pay TV executives, who wonder whether Netflix’s streaming business will encourage consumers to cancel expensive cable and satellite services.
But its relationship with the rest of the entertainment ecosystem is becoming much more complicated. Everyone wants to be in business with them but no one fully trusts its motives. Meanwhile, Hastings has proclaimed that Netflix considers itself more a streaming company than a DVD concern — with an estimated 17,000 (and counting) movie and TV titles available — and electronics manufacturers are rushing to build Netflix buttons into remote controls. Hollywood has learned from the way Apple blindsided the music industry with iTunes and knows how much is at stake.
Time Warner CEO Jeff Bewkes is openly hostile, refusing to license premium HBO content to Netflix’s streaming service while questioning the virtue of dealing with a company that might erode the perceived value of content. Phil Kent, CEO of Turner Broadcasting Systems, a Time Warner company, has gone further, warning TV executives who might be thinking about selling Netflix streaming rights to their shows to think twice about the impact those deals might have on traditional syndication pacts.
"We’ve been telling our suppliers — the various studios that we buy from — that in the future, [Netflix streaming deals are] going to have a significant impact on what we’re going to be willing to pay for programming or even bid at all," Kent told investors Jan 5.
But despite those gripes, just about every major content creator now has a streaming deal with Netflix. The company secured streaming rights to 49 percent of the domestic box-office tally for 2010 and continues to sign up Hollywood partners. “Even though it has a detrimental effect on their business, everyone keeps feeding them content,” BTIG Research analyst Richard Greenfield says.
Why? Despite the risks, many in Hollywood welcome another market for content, especially one as hot as Netflix. During peak surfing times, for instance, the Netflix service accounts for a fifth of downstream traffic on U.S. broadband networks, and the company says 66 percent of its subscribers watched at least a portion of a TV show or movie streamed during the third quarter, up from 41 percent a year earlier.
"What’s not to like?" asks a Disney executive, speaking on the condition of anonymity. “They’re another buyer, even for stuff that others don’t consider terribly valuable.” That’s especially important in light of declining North American home video revenue, which according to PricewaterhouseCoopers peaked in 2007 at $28.4 billion (including sales and rentals). But with Netflix leading the way, the industry should surge past that in 2013 as streaming makes up for declining DVD revenue.
Netflix is “absolutely a friend to producers and distributors — they are found money that is monetizing library assets as DVD sales fall,” says Mark Cuban, whose investments include 2929 Entertainment, Landmark Theatres, HDTV and HDNet.
In fact, Netflix is most interested in library stuff, says chief content officer Ted Sarandos, who has been running around Hollywood striking streaming deals with any network, studio and producer who has content to sell. Netflix even likes serialized dramas that traditionally don’t sell for much in TV syndication because, unlike procedurals, they must be aired in order. “I don’t care about last night’s episode,” Sarandos says. “I do want all of last season’s episodes.”
In that regard, Netflix is different from perhaps its most similar competitor, Hulu Plus, which also delivers unlimited streaming movies and TV shows to subscribers who pay $7.99 a month (Netflix users who choose more expensive packages also get DVDs in the mail.)
If Bewkes and others in Hollywood are worried about Netflix devaluing content, Public Enemy No. 1 would be Starz, which struck a deal with Netflix in October 2008 that analysts say is worth $30 million a year — an amount that seems paltry in retrospect. If Netflix increases its subscriber base to 25 million before the pact expires in October, which seems doable, it will pay 10 cents a sub each month for Starz content — compared with the estimated $4 a sub Starz gets for its premium movie service from Comcast, DirecTV and other multisystem operators, according to Greenfield.
And the content — about 2,500 pieces, split evenly between TV and movies — is nearly identical, save for the MSOs’ ability to offer it in HD.
But before 2011 expires, Netflix will be back at the bargaining table to hammer out a new deal that should earn Starz a whole lot more money. The most bearish estimate has Netflix shelling out $100 million annually, and the most bullish, from Greenfield, predicts Starz will get $300 million — assuming Netflix doesn’t purchase Starz outright. That means that in Netflix’s world, streamed content would be as much as 10 times more valuable in 2011 than it was only three years ago.
Starz knows it, which is why CEO Chris Albrecht is “in no rush” to renew a deal, as he told reporters Jan. 7. “This is a deal that has ramifications in the media industry,” he said. “Netflix has been a great partner for us, and if the deal makes sense, they may continue to be.”
Starz was simply early to the party when it stuck its $30 million-a-year Netflix arrangement, because others are already reaping the rewards of a more generous Netflix. “I expect licensing costs to go up because we’re bigger and we have more money to spend,” Sarandos says.
A deal with Epix, for example, added 1,000 titles to Netflix’s streaming selection from Paramount, MGM and Lionsgate, each of which owns a stake in the pay TV channel. Insiders say Netflix is paying Epix $200 million annually for five years for those rights. Greenfield estimates that Showtime, before Epix was created as a competing channel, offered $175 million a year for the same content. If those figures are accurate — the parties won’t confirm or deny them — then the negotiations mark a sea change by which digital rights are perceived as more valuable than TV rights. “Groundbreaking” is the adjective Lionsgate CEO Jon Feltheimer used to describe Epix’s deal with Netflix. Epix CEO Mark Greenberg said at the time that it made the fledgling venture profitable. “There’s not many channels that, within 10 months on the air, can say that,” he said.
The Epix deal also creates what Sarandos calls a window separate from that of pay TV, given that movies won’t stream until 90 days after Epix first shows them on television. Sure beats waiting around until 2016, or whenever, for pay TV rights to run their course.
“We had to change the paradigm,” Sarandos says. “We had to turn what would be a competitor into a supplier.”
But the Epix deal has a downside, according to a studio executive who also spoke on the condition of anonymity. “Everybody knows that Netflix doesn’t have enough money to do deals that value content at anything comparable to what they paid Epix,” the executive says. “That Epix deal was actually a big problem for them. Now Starz wants a deal that’s worth 150 percent of what the Epix deal was worth.”
The Epix deal in August came a month after Netflix struck one with Relativity that also had people using the word “groundbreaking,” because it will allow movies like The Fighter to be streamed on computers and TV screens a few months after its DVD release — rather than years later, as would have been the case if rights went to Netflix and other digital services only after the pay TV window was exhausted.
Netflix’s most recent big streaming deal was with Disney, and insiders value it at $150 million-$200 million for a year’s worth of content. Lazard Capital Markets analyst Barton Crockett estimates the value at $183 million, and he breaks it down by title, with the TV show Lost being the most valuable asset.
Netflix is paying $45 million for access to all six seasons of the former ABC drama. Next is Scrubs, valued at $26 million, followed by Hannah Montana ($18 million) and Desperate Housewives and Wizards of Waverly Place ($12 million each). Least valuable are TV movies, Crockett figures, with even big hits such as High School Musical and Camp Rock worth less than $1 million a year.
"Disney squeezed the crap out of Netflix," Wedbush Securities analyst Michael Pachter says. “Disney had the balls to tell them, ‘Take it, or you get nothing,’ and Netflix decided it needed those anchor shows. Netflix is probably the best thing ever for studios.”
Says Crockett: “Netflix is a friend, as long as studios are smart about how much they charge for their content rights. Disney is smart to do a short-term deal so they can change course if that looks prudent.”
Crockett figures Netflix will spend $700 million for streaming rights in 2011 and $1.2 billion in 2012. Those high costs are one reason some on Wall Street are bearish on Netflix stock — though this position has been a losing one for a long time, considering Netflix shares have risen from $3 to $187.88 during the past eight years.
Hastings, who declined an interview request for this report, defended the surging cost of streaming rights in a blog post that served as a warning to those who might consider shorting Netflix stock. “It is true that we are paying more for any given piece of content than we were two years ago, and that in two years we’ll pay more than we pay today,” Hastings wrote. “Part of our goal as a business is to make money for content producers and to become one of their largest and best revenue sources.”
Bewkes isn’t convinced of Netflix’s altruism. He recently told Wall Street that Netflix was trying to buy in-season TV shows for a “measly” $70,000-$100,000 an episode. Time Warner, though, has no problem selling Netflix streaming rights to such canceled TV shows as Pushing Daisies and Terminator: The Sarah Connor Chronicles. Details were not disclosed, but insiders say all six seasons of Nip/Tuck, for example, went to Netflix for $20 million a year.“Hollywood used to give library content to Netflix cheap,” says a Time Warner executive. “That has stopped.”
And if Netflix intends to get its digital mitts on some of Time Warner’s most popular TV content, including HBO’s The Sopranos and Sex and the City it will cost plenty, if it’s even possible, given that HBO considers Netflix more a competitor than a potential partner. Episodes of Curb Your Enthusiasm and Entourage, for example, are typically sold into syndication years after they appear on HBO and are licensed for about $750,000 an episode, more than Netflix might be willing to pay.
“HBO believes in content exclusivity, especially for high-value content,” says Jeff Cusson, the channel’s senior vp corporate affairs. “That’s our rationale for not selling streaming rights to a competing subscription service.” While HBO licenses shows to such pay-as-you-go streaming services as iTunes and Amazon, it has “no intention of making its content available for streaming on Netflix,” he adds. A high-placed Time Warner executive says that if Netflix expects to get a meaningful amount of HBO content, it would have to raise the price of its streaming-only service from $7.99 a month to $20 before the economics made sense.
Netflix begs to differ.
“They make incredibly great product that is very expensive to produce,” Sarandos says. “But we’re buyers and they’re sellers, so we’ll figure out a deal that makes sense. If we don’t, then the service doesn’t have everything, and that’s OK too.”
Collecting rights is no easy task. Sarandos oversees a work force of 80 in Hollywood, including about a dozen that make up Netflix’s content-acquisition group, with one team handling DVD and another focusing on streaming. For all of the concern over falling DVD revenue, there’s a positive to consumers’ embrace of streaming. “Nothing is licensed in perpetuity, so everything is subject to renewal,” Sarandos says.
That means licensing fees can keep climbing as Netflix moves more of its business to streaming and away from DVDs. Sending a disc round-trip can cost as much as $1, and Netflix mails about 2 million DVDs a day, whereas streaming a movie costs the company about a nickel. “We’re direct to the consumer, so we don’t give half our money to a cable company,” Sarandos says. “Our money goes directly to the content providers.”
Some content comes and goes, as in the case with the Timothy Hutton vehicle Leverage, to which Netflix obtained streaming rights through executive producer Dean Devlin. That didn’t sit well with TNT, so when the channel renewed the show for a third season, it made sure to secure digital rights, leaving Netflix with streaming rights to some seasons but not others.
“But TNT had to pay a lot more to secure the rights from Dean — it’s exactly why Netflix is exciting for networks and studios,” Sarandos says. “We’re an exciting new buyer in this space. We bid up the price of content.”
Some executives still aren’t convinced that the net effect of Netflix bidding on TV shows is positive. Turner’s Kent has said that TBS didn’t outbid USA Network for syndication rights to ABC’s Modern Family because the show is “a little too prevalent” online. USA paid about $1.5 million an episode for those rights. Time Warner is so agitated by Netflix’s streaming that Kent has spoken of “freezing those rights” to maximize a show’s value on traditional TV. He even claims to be freezing rights retroactively for shows his cable networks have licensed.
Statistics suggest Americans in general aren’t as eager as Netflix users to make the shift to instant digital gratification and away from physical product and TV schedules. A study from Horizon Media indicates that in first-quarter 2010, Americans spent an average of 158 hours and 25 minutes watching TV and only three hours and 10 minutes watching video online (even though the same study indicates that consumers could ditch pay TV and use various outlets to save $360-$860 a year). While a tiny minority has cut its TV cord entirely, it is alarming especially given that the pay TV sector lost subscribers for the first time in second-quarter 2010.
Pay TV is fighting back, in part through the TV Everywhere initiative whereby subscribers get television content through myriad broadband devices. Cablers are also lobbying for the ability to charge consumers for Internet data, as well as suppliers like Netflix. Hastings acknowledges that such a scheme is “a valid concern over the long term.” As for the near term, expect Netflix to keep rolling along, using money from a rapidly increasing subscriber base (and a rumored price hike coming soon) to feed its appetite for streaming content while enriching rights holders.
What could derail the Netflix locomotive? Competition from very rich sources, according to Pachter. Amazon and others allegedly are working on subscription video services, and YouTube recently hired Malik Ducard, a former senior vp digital distribution at Paramount, to help acquire streaming rights to Hollywood content.
“Right now, there’s essentially one buyer and lots of sellers,” Pachter says. “But God save Netflix if Amazon, Google, Apple or Microsoft get in the subscription movie and TV business. Google has more money than God; if Netflix offers $100 million, expect Google to offer $500 million to get it exclusively for themselves.”
STREAMING: THE BIG DEALS
One analyst believes Netflix will spend $700 million in 2011 and $1.2 billion in 2012 to license Hollywood content for its streaming-video service. A sampling of how that money is being spent.
The Deal: The pay cable network offers about 2,500 movies and TV titles from Sony and Disney (though Disney has a separate deal for TV, which includes such hits as ABC’s Desperate Housewives and Lost and Disney Channel’s Phineas and Ferb, Hannah Montana and Camp Rock). The Starz deal has been valued at $30 million per year and expires at the end of 2011.
Content: Up, The Proposal, Alice in Wonderland, Cloudy With a Chance of Meatballs, Zombieland, 2012
The Deal: Expansion of an existing agreement gives rights to catalog movie titles and seasons of certain TV hits until end of 2011, but no HBO shows.
Content: Films Risky Business and National Lampoon’s Christmas Vacation; seasons of Nip/Tuck, Veronica Mars, Pushing Daisies, Terminator: The Sarah Connor Chronicles
The Deal: A recently expanded agreement includes hit shows produced by Twentieth Television.
Content: Lie to Me, Bones, Prison Break, 24, King of the Hill, Arrested Development, Buffy the Vampire Slayer
The Deal: The fledgling pay cable network has a deal through roughly 2016 to offer films from Lionsgate, MGM and Paramount 90 days after they debut on the channel. The deal was pricey: Some analysts have said Netflix will pay $200 million per year.
Content: Shutter Island, Iron Man, Precious, Dance Flick, The Spy Next Door, G.I. Joe: The Rise of Cobra
The Deal: The upstart distributor will provide up to 30 films annually during the pay TV window, through roughly 2015.
Content: The Fighter, Skyline, Season of the Witch, more as Relativity greenlights them
The Deal: More than 200 movies are available for six months to 18 months, depending on the title, then they are pulled from the service for another title. The TV deal includes past seasons of such popular streaming titles as 30 Rock and The Office.
Content: Hundreds of old episodes of “Saturday Night Live,” as well as day-after streaming of new episodes through 2012; Battlestar Galactica, Monk, Friday Night Lights, Law & Order: SVU
Netflix Enrages Subscribers By Limiting DVD Queue
Converting to a streaming-only business isn’t easy, as Netflix (NSDQ: NFLX) discovered Monday when the company’s blog was bombarded by complaints over its decision to remove the ability to add to DVD queues from connected devices.
Jamie O’Dell, director of product management at Netflix, may want to get an intern to start his car tomorrow after offering the following gem of corporate gobbledygook on the Netflix blog:
We’re doing this so we can concentrate on offering you the titles that are available to watch instantly. Further, providing the option to add a DVD to your Queue from a streaming device complicates the instant watching experience and ties up resources that are better used to improve the overall streaming functionality.
Though the ‘Add to DVD Queue’ option will still be available at Netflix.com, that didn’t stop hundreds from voicing considerable displeasure that they can’t use everything from their iPhone to their PS3 to manage their queue.
“With all sorts of streaming devices out there the computer is becoming more and more obsolete, this seems like a step backwards,” noted one concerned sub named Luke.
Raged another sub named Hal, “Sorry Netflix, I love you but this is idiotic. Hire some developers that know who has the premium accounts and who just has streaming access. It should all go by log in. This is a dumb move.”
What many subscribers called out Netflix on was its gradual dismantling of its disc business as more and more of its video delivery gets devoted to streaming. With its recently altered subscription model clearly steering customers toward digital-only delivery, Netflix is forced to undergo the painful process of alienating the core customer base that may still want to hang onto discs and don’t want to be weaned off. “When the optical media goes, so do I,” pledged Jason.
Netflix needs to proceed with great caution in how it unwinds its disc business or risk losing a chunk of the subscribers on which it built its booming empire. The company would have probably been better off figuring just what new functionality they were going to bestow on their subscribers once they “untied” resources, but it’s too late to un-ring that bell.
Amazon to Acquire LoveFilm, the ‘European Netflix’
LoveFilm has announced this morning that Amazon is to acquire the remaining shares in the movie rental and streaming service, which is similar to Netflix.
Amazon already has a significant minority shareholding in LoveFilm and deal has been rumoured for some time. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first quarter of 2011.
Exactly what this means in terms of the company being rebranded as an Amazon service is unclear at present, but the move gives the US retail giant a big foot in the European online video market. LoveFilm operates in the UK, Germany, Sweden, Norway and Denmark. Simon Calver, Chief Executive of LoveFilmInternational says in the company’s announcement, “With Amazon’s unequivocal support we can significantly enhance our members’ experience across Europe.”
In the US, Amazon operates a video-on-demand service offering HD movie rentals. It seems logical that LoveFilm will become the footing for a European expansion of that product. Like Netflix, LoveFilm started by offering DVD rentals by post before expanding to online streaming, first in the browser before expanding more recently to the Sony Playstation 3 and a range of Sony and Samsung TVs, Blur-Ray players and home theatre devices. We’ll be watching developments with this story closely.
Startup Offers Bands a Record Label Run by Fans
The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark. If you would like to have your startup considered for inclusion, please see the details here.
Quick Pitch: Crowdbands is a crowd sourcing platform that lets fans vote on a variety of band decisions — from album titles to tour dates to collaborations.
Genius Idea: Hot tip: Yelling “Your new guitarist is a talentless hack — you should have stuck with Marco!” in the middle of the set isn’t going to convince your favorite band to drop Johnny Six-Strings. If you persist in shouting, however, it will probably impel them to have you removed from the venue.
Music fans are an opinionated set — just check out the comments section of any music blog — but until recently, there haven’t been many forums in which fans can vent those opinions in a constructive way. Enter Crowdbands.
Remember how Devo crowd sourced their album, Something For Everybody, allowing fans to choose which tracks would appear on the disc? Well, Crowdbands is like that, but turned up to 11.
Fans can sign up for Crowdbands — it costs $25 per year — and thereby become involved in the decision-making processes of a variety of bands. In a sense, they become the band’s de facto record execs, while the site itself is the label.
Currently in Beta, Crowdbands kicking off with The Donnas, an all-female rock band that has been in the business for 17 years.
“We’ve exhausted pretty much every avenue when it comes to getting your record out there,” says Allison Robertson, the band’s guitarist. “Crowdbands falls under the newest category of forward-thinking multimedia organizations who are tossing out the old, tired ways of selling music and are interested in paving a new path for and with artists like us.”
“The ‘system’ as we know it, has collapsed,” adds vocalist Brett Anderson. “This sounds like a bad thing, but it’s actually great, because the playing field has been leveled, and less established companies and artists have a chance to play with the suits.”
Crowdbands, for its part, will only feature unsigned bands, according to Tom Sarig, co-founder of Crowdbands and current president of Esther Creative Group and a former senior A&R Executive at MCA Records, TVT Records, Arista, and A&M. Those bands don’t have to pay a fee to be included on the site (and they are remunerated for their time), but they do have to fit within a rather specific niche.
“We are most excited about working with artists that are the important cultural leading lights of the music world, established acts still in their creative prime and making incredible music, but somehow find themselves without a label,” Sarig says.
This decision could be a failing when it comes to building out a business, in our opinion, as bands of the nature that Sarig describes aren’t exactly tumbling out of trees.
It could benefit the service in the long run to include more lesser-known (though talented acts) that fans could then propel to stardom through their involvement on the site. That model has worked splendidly with Kickstarter, and we could see it flourishing on a dedicated site like Crowdbands as well.
So what does shelling out $25 to join Crowdbands get you, the fan? Well, in addition to interacting with bands and building out their careers by weighing in on issues both creative and business-oriented, users will also receive the band’s album, as well as exclusives like private performances and priority ticketing opportunities. When you add all that together, that’s a pretty good deal for 25 bucks.
And for those music purists out there, before you start wringing your hands over the disruption of the artistic process via fans meddling where they don’t belong — it’s not as if Joe Blow in Ontario is going to be producing guitar riffs for The Donnas (although that might actually be cool).
“We’ve already been writing for this album over the past year, and hopefully, the Crowdbands community will be signing on to help us put the last few nails in the coffin,” Robertson says.
“Once we’re done with the songs, we’ll be checking in with the fans on decisions like how many songs should be on the album, what type of producer would you like to see us work with, or other questions of that nature.”
“I don’t see this as a relinquishment of control, but as an invitation for input,” Anderson adds. “We’re letting people in on the process, to both see how decisions are made, and offer feedback. Our opinions are factored in as well, as we are the only people who really know what we can project with authentically, so it’s more of an opportunity than a risk.”
Since Crowdbands has only just launched, there aren’t a lot of decisions to vote on yet, but we think that it could really take off with music fans — with Donnas fans, at the very least. Music is an extremely personal thing, and the opportunity to engage with and contribute to an album is every music nerd’s dream.
Moreover, we think that this kind of engagement could really give a boost to artists when it comes to maintaining and growing their following (which, ahem, is why we would suggest widening the platform to lesser-known bands as well). “Members essentially also are a natural focus group, as well as a decentralized marketing team,” says Sarig.
Nielsen: Video Most Popular Source Of Online Music
Nielsen has released the second part of study in which the company examined music consumers and their digital behavior, and the study found that three times as many people watch music videos on their computers as those who download music legally. Over the past three months, about 60 percent of survey respondents declared they’d watched music videos on a computer, while less than 20 percent said they legally downloaded music. With multiple channels available to expose music and generate revenue, there are broad opportunities, and the fragmented market leads to complexity, says the study. Engagement level varies greatly based on demographic, and also on how music is accessed.
The survey shows that there is no single channel being used by even 60 percent of the global online audience, while nine channels of music consumption are each used by 20 percent or more of consumers. The most popular form of music consumption polled by Nielsen was the "watch" habit on site like YouTube, as 57 percent have watched music videos on computers in the last three months, followed by free downloading with nearly 50 percent. Streaming music on a computer got 26 percent of the vote, followed by streaming music on a mobile phone (21 percent), watching music video on mobile phones (23 percent) and downloading or using music apps (20 percent). Slightly less popular music consumption methods are digitally downloading a full album or a single track – neither reached 20 percent of the global online audience.
The study also declared that the younger end of the age scale remains the most active on the Internet. More than 50 percent (globally) have downloaded a song from the Internet for free in the last three months, and slightly more than 20 percent of respondents aged 34 and under have paid to download a music track to their computer in the last three months. From age 35 onwards, this percentage drops significantly. The "core" digital music audience is between 21 and 34, Nielsen says.
The study concludes that, "Unlike in the CD era, there is no one-size-fits-all music consumption channel... the opportunities are broader than ever, from one standpoint. But on the flip side, the very many opportunities of the industry are also its main challenges, a potential catch-22 situation." Nielsen said that given the consumer engagement covered in the report, "the various music exposure and consumption channels will be played together, with the view to optimize the marketing mix and the channel mix. At stake, it is not only about maximizing the share of ear, but also the share of wallet."
Nokia Pulls Plug on Free Music in Most Markets
The world's top cellphone maker, Nokia, is ending its bundling of free music downloads with cellphones in 27 countries, where it has gained little traction since its 2008 launch.
Nokia will continue to sell phones with 12-month subscription to free music downloads in China, India and Indonesia and with 6-month subscriptions in Brazil, Turkey and South Africa.
All four major labels -- Vivendi's Universal Music, EMI, Warner Music Group and the music arm of Sony -- signed up for the service, which was seen at start as a major challenger for Apple's iTunes.
Nokia unveiled the service in late 2008 in Britain -- seen as a test market for new mobile services in Europe -- but has lacked operator support and failed to attract many customers.
Reasons behind the lackluster performance include use of older supporting handsets for the product at its launch, digital rights management (DRM) software that tied downloaded music to the device and a difficult to understand product offering.
"The markets clearly want a DRM-free music service," said a spokesman for Nokia, adding the firm continues to offer DRM-free tracks through its music store in 38 countries.
DRM software limits sharing of songs between different devices.
Consumers with the free music bundle in the 27 countries where the sale of the service have stopped will continue to have access until their subscriptions run out.
(Editing by Louise Heavens)
The More People Steal My App, The More Money I Make
What were the stat changes?
- Period 2 had 38.6X more Pirates than Period 1
- Period 2 had 2.3X more Sales than Period 1
- (For every 15 or so Pirates, I received an extra Sale)
Why am I not extremely angry?
It’s pretty obvious why developers get upset about piracy: uh, it’s stealing. Aside from that, I’m pretty straightforward about the fact that decisions should be profit-driven. Throughout Punch ‘Em!’s paid lifetime, I couldn’t raise its sales count in the long term. So if thousands of users end up pirating my app, but hundreds buy it as a result of hearing about it from their pirate buddies, why should I cry?
My app has a sharing feature: if you like the app, you can email your friends about it. As a result of the increased amount of users, the people who are stealing my app are slowing telling others about it, increasing the amount of users who actually purchase the app from the app store.
Why don’t I put in code to try and convert these pirates?
Interesting thing, I had code in previous versions which did just this. It checked (through various means) if the IPA had been cracked, displayed a message asking that they purchase the app, and exited. My conversion rate was 0%. Beyond the conversion rate issue, my app was pirated very little--after all, my app quit almost immediately, so why share it at all?
Bottom line: people stealing my app has increased my sales.
The alternative for me is no pirates, but less sales.
Last Section: Why wasn’t it Christmas?
The Christmas push is the result of a simple concept: more new devices & gift cards leading to more paid sales. Because of this, most paid apps see proportional sales increases over the course of Dec 24 - Dec 26. Meaning:
1- The Christmas push only really effects a period of a few days
2- Most developers see very similar sales increases of approximately 2X
3- Despite the sales increase, apps don’t increase in rank (because everyone’s sales go up).
My sales increase extended well past Christmas, and is still stable.
My sales increase during Christmas was well beyond the standard 2X.
My app increased in rank over the period of time that my app was pirated.
10 Per Cent of Users Take 90 Per Cent of Mobile Data, Say Researchers
Video will take up to 60 per cent of all mobile data in 2011 thanks to a small minority, says new research
Just 10 per cent of all mobile phone users account for 90 per cent of all networks’ data traffic, researchers have found. The study, conducted for video traffic management firm Bytemobile, also suggests that in 2011 60 per cent of all traffic will be video.
The company also questioned whether new generation networks, such as LTE in America, will be able to keep pace with the increasing demands of smartphones and consumers who watch more videos on their mobile phones.
British networks have consistently warned that demand for data is outstripping their capacity to build it and have increased the cost of packages while also lowering the amount included. Earlier this month, T-Mobile cut its data tariffs to 500mb from up to 3gb per month. Operator Three, however, has bucked the trend by axing its data caps.
New data from comparison website Top10.com suggests that O2 and Vodafone currently offer the fastest 3G data speeds at 2.9mb and 2.82 mb. T-Mobile averaged just 1.46mb compared to an industry average of 2.28mb. As more users want to use data, capacity is being spread more thinly.
Harry Jones, Director of Top10.com said that “3G speeds will become increasingly important and so the networks will need to be on top of their games if they want to retain and grow market share."
Microsoft Explains Windows Phone 7 'Phantom Data'
Microsoft has confirmed that some handsets running its Windows Phone 7 software are sending and receiving "phantom data".
Earlier this year, users complained on net forums that their phones were automatically eating into their monthly data plans without their knowledge.
Microsoft said its investigation found that most problems were caused by a unnamed "third party" service.
However, it said it was still looking into other potential faults.
"We are in contact with the third party to assist them in making the necessary fixes," a spokesperson said.
The firm also said that it was looking into "potential workarounds" until the issue was solved.
"At this point in our investigation, we believe this is responsible for most of the reported incidents.
It said that the problem seemed to only affect "a small (low single-digit) percentage of Windows Phone customers".
The problem surfaced in early January with some owners of phones running Windows Phone 7, claiming that their phone was sending "between 30 and 50MB of data" every day; an amount that would eat into a 1GB allowance in 20 days.
Most complainants were based in the US.
"I received an e-mail from AT&T saying that I was close to my 2GB data limit which truly shocked me as I feel I do not use data that much," a phone owner called Julie told Paul Thurrott's supersite for Windows.
"I went and looked at my AT&T account online and noticed that my phone was sending huge chunks of data seemingly in patterns."
Another, writing on Howard Forums, said that they had noticed that the phone's "idle data usage is around 2-5MB per hour".
Microsoft has admitted that not all problems may have the same root cause and has said it was still "investigating" other potential reasons for the fault.
"We are continuing to investigate this issue and will update with additional information and guidance as it becomes available," the spokesperson said.
Windows Phone 7 was launched in October 2010 to acclaim by manufacturers and users.
It is considered the company's first credible challenge to rival operating systems from Apple, Google, Research in Motion and Nokia.
Canadian Firm Plans 78-Satellite Net Service
A Canadian satellite maker plans to launch a network of 78 small, relatively low-flying satellites designed to help relieve network congestion that's significantly dampening smartphone enthusiasm.
MSCI, which stands for Microsat Systems Canada Inc., is trying to be a bit of a maverick with its project, called CommStellation. The company said today that its approach of using small, inexpensive satellites in low orbit--about 620 miles above the Earth--means better coverage of the world's population, quicker launch, and better network capacity.
The company likes to spotlight its competition with the O3b, the Google-backed satellite project to improve Net access for the 3 billion people who live outside of wealthy, well-wired areas. But realistically, MSCI's greater competition probably is more down to Earth--fiber optic lines and perhaps femtocells built to ease network congestion.
Still, MSCI argues that its use of rugged but relatively ordinary terrestrial electronics means it can move fast enough to make entry into new satellite communications markets a "no-brainer."
"Until now, no one in the industry has been able to find the manufacturing cost and scheduling efficiencies and cost-effective microsatellite technology to enable an economically viable constellation of satellites to provide 100 percent global coverage," Justin Phillips, MSCI's vice president of marketing, said in a statement.
Specifically, the company is able to use more ordinary electronics with its lower-elevation satellites. Medium orbit satellites--about 5,000 miles above Earth--such as rival O3b need components with higher reliability in order to withstand the temperature and radiation rigors of space. MSCI's satellites are also relatively small, meaning that 14 can be packed into a single launch rocket compared with O3b's 4 satellites. And much less power is required to transmit data to and from the MSCI's satellites since they're closer to Earth.
This isn't the sort of thing that a person's phone will tie into directly. Rather, mobile phone base stations or other local network hubs will link to the satellites. The satellites in turn link to a network of 20 ground stations around Earth that link to the Internet, providing what's known as "back-haul" network capacity.
Back-haul constraints are a big problem today for network operators trying to balance consumers' demand for profitable but data-hogging smartphones with their own needs to keep their networks from being crushed by the data traffic.
Each MSCI satellite has a data-transfer capacity of 12 gigabits per second. The expected lifespan of each is 10 years, and they can be sent back into the atmosphere at the end of their lives to avoid more orbital clutter.
MSCI plans to launch 84 satellites into six orbital planes, each 30 degrees apart. Each orbital plane gets 13 primary satellites and one spare.
Each satellite will provide coverage to a circular area of about 7 million square miles, MSCI said. Because the satellites travel in a polar orbit, meaning that they orbit along a line of longitude crossing over the north and south poles, coverage improves in the higher latitude where the orbits draw closer.
The company hasn't yet selected a launch partner or announced investors or customers.
New Navy Jammer Could Invade Networks, Nuke Sites
When China’s stealth-fighter prototype took to the air two weeks ago, it intensified what was already a heated debate in Washington over which, and how many, new fighter planes to buy.
Lost in all this noise was the U.S. Navy’s real plan for winning any future air war with China or another big baddie. Rather than going toe-to-toe with J-20s and other enemy jets, the Navy is planning to attack its rivals where they’re most vulnerable: in the electromagnetic spectrum.
The frontline weapon for this electronic war is a new airborne jamming system currently in development. The Next Generation Jammer should allow the Navy to blind the enemy’s radars, disrupt its communications and slip malicious code into computer networks.
The new jammer, and its initial host airplane, the EA-18G Growler (pictured), have quickly become top Pentagon priorities. U.S. regional commanders opted in 2009 to buy more Growlers rather than continue production of the F-22 stealth dogfighter. Secretary of Defense Robert Gates announced this month that he would accelerate the NGJ’s current five-year-or-so development plan, using cash saved from shutting down redundant command staffs.
Four teams are vying for the jammer contract, including Northrop Grumman, BAE Systems, Raytheon and a pairing of Boeing and New York-based ITT. The Navy expects to gradually eliminate competitors until it’s got one supplier.
When all’s said and done, the resulting program could cost billions of dollars. The result should be what ITT vice president Ed Palacio calls a “highly modular, totally programmable” combination of antennas and processors that can be squeezed into the Growler’s underwing pods, as well as into the F-35 and future drones.
One goal is to simply replace the ancient EA-6B radar-jamming planes flown by the Navy and Marine Corps (with some Air Force exchange pilots). But that’s just the beginning for the NGJ. “Electronic attack system and concept of electronic attack has really evolved over years,” Palacio told Danger Room. “Initially, it primarily was a system to deal with enemy air defenses. But as you start going forward and realize the electromagnetic spectrum does many things … [so] if you build a system that can generate power and modulation over a very broad RF spectrum, it can be used not only in traditional roles, but in many different roles.”
Besides radar-jamming, the NGJ should allow the Navy to disable remotely detonated, improvised explosive devices — something the EA-6B already does — as well as insert viruses into command networks, a tactic Israel allegedly first used in combat during its 2007 air attacks on a suspected Syrian nuke site.
Hints that air-launched cyberattacks could shut down industrial (and nuclear) operations could explain why the Air Force has been flying stealthy RQ-170 drones near Iran. The NGJ could expand on that apparent capability.
Never mind the F-22 and its admittedly incredible dogfighting skills, or the purported versatility of the newer F-35 in its fighter-bomber role. With the EA-18G and other planes carrying the Next Generation Jammer, the U.S. military will have a weapon capable of doing more than just firing missiles and dropping bombs. Anything that works in the electromagnetic spectrum — and these days, that’s almost everything — will be fair game.
Ready for Cyberwar?
Amid all of the media and public fascination with threats like Stuxnet and weighty terms such as “cyberwar,” it’s easy to overlook the more humdrum and persistent security threats, such as Web site vulnerabilities. But none of these distractions should excuse U.S. military leaders from making sure their Web sites aren’t trivially hackable by script kiddies.
Security vendor Imperva today blogged about a hacker who claims to have access to and control over several top dot-gov, dot-mil and dot-edu Web sites. I’ve seen some of the back-end evidence of his hacks, so it doesn’t seem like he’s making this up. Perhaps out of deference to the federal government, the Imperva folks blocked out the best part of that screen shot — the actual names of the Web site domains that this hacker is selling. For example, the hacker is advertising full control and root access to cecom.army.mil, a site whose stated purpose is “to develop, acquire, provide and sustain world-class…systems and Battle Command capabilities for the joint warfighter.” It can be yours, for just $499 (sorry, no credit cards accepted; only the virtual currency Liberty Reserve).
According to Imperva, this enterprising hacker is also selling info personally identifiable information from hacked sites, for $20 per 1K records. The company mined this hacker’s postings on other forums, and found evidence that he was able to hijack the sites via SQL injection vulnerabilities, most likely with the help of an automated vulnerability scanner.
I find it ironic that one of these sites allegedly for sale is the Department of Defense Pharmacoeconomic Center, which is a DoD site tasked with “improving the clinical, economic, and humanistic outcomes of drug therapy in support of the…military health system.” In all likelihood, if access to this site is purchased, it will be by someone looking to plant links to rogue online pharmacies of the sort frequently advertised in junk e-mail. People who get paid to promote these rogue pharmacies typically do so by hacking legitimate Web sites and including links back to fly-by-night pharma sites, and they particularly like dot-mil, dot-gov and dot-edu sites because search engines tend to treat links coming from those domains with more authority than random .com sites.
By the way, that “Undetected Private Java Driveby Exploit” that this guy is selling is none other than the social engineering trick I blogged about last week here.
Risks of Cyber War 'Over-Hyped' Says OECD Study
The vast majority of hi-tech attacks described as acts of cyber war do not deserve the name, says a report.
The Organisation for Economic Cooperation and Development study is part of a series considering incidents that could cause global disruption.
While pandemics and financial instability could cause problems, cyber attacks are unlikely to, it says.
Instead, trouble caused by cyber attacks is likely to be localised and short-lived.
However, it warns that governments need to plan for how it could mitigate the effects of both accidental and deliberate events.
Attempts to quantify the potential damage that hi-tech attacks could cause and develop appropriate responses are not helped by the hyperbolic language used to describe these incidents, said the OECD report.
"We don't help ourselves using 'cyberwar' to describe espionage or hacktivist blockading or defacing of websites, as recently seen in reaction to WikiLeaks," said Professor Peter Sommer, visiting professor at LSE who co-wrote the report with Dr Ian Brown of the Oxford Internet Institute.
"Nor is it helpful to group trivially avoidable incidents like routine viruses and frauds with determined attempts to disrupt critical national infrastructure," added Prof Sommer.
The report acknowledged the risk of a catastrophic cyber incident, such as a solar flare that could knock out satellites, base stations and net hardware, but said that the vast majority of incidents seen today were almost trivial in comparison as they did not last long and only hit a few people or organisations.
Attempts to decide how to deal with the wide variety of potential attacks and attackers were being hampered because words used to describe incidents meant different things to different groups.
For instance, it said, an "attack" could mean phishing e-mails trying to steal passwords, a virus outbreak or a concerted stealthy attempt to break into a computer system.
"Rolling all these activities into a single statistic leads to grossly misleading conclusions," said the report. "There is even greater confusion in the ways in which losses are estimated."
The report also played down the risk of a conflict between nation states being played out over the net.
"It is unlikely that there will ever be a true cyberwar," said the report, most likely because no aggressor would stick to one class of weaponry. Also, it said, existing defences and the unpredictable effects of such an attack could limit its effectiveness.
However, it noted, that even if a cyberwar is unlikely to ever happen, there was no doubt that the weapons used in such a theatre of war were becoming ubiquitous and would likely be used in the future alongside conventional weapons as "force multipliers".
Under the heading of cyber weapons the report included viruses, worms, trojans, distributed-denial-of-service using botnets and unauthorised access to computers ie hacking.
Finally, it said, while the net may be a vector for attack it might also help in the event of a large-scale event.
"If appropriate contingency plans are in place, information systems can support the management of other systemic risks," it said.
"They can provide alternate means of delivering essential services and disseminate the latest news and advice on catastrophic events, reassuring citizens and hence dampening the potential for social discontent and unrest."
Russia's Own WikiLeaks Takes Off
RuLeaks is trying to expose the practices of goverment officials, similar to the concept behind WikiLeaks. Here, WikiLeaks founder Julian Assange meeting reporters Monday in London.
A new web site striving to become Russia's answer to WikiLeaks became an online hit this week with the publication of the first photographs of a luxury mansion linked to Prime Minister Vladimir Putin.
No proof exists that the mansion in the pictures is really Putin's, a residence that RuLeaks.net says was built on the Black Sea at a cost of $1 billion for the prime minister's personal use.
But RuLeaks' apparently exclusive photos have paid off handsomely for the team behind the web site, which refers to itself as "The Anonymous" but actually consists mainly of members of the Pirate Party of Russia, a group that opposes copyright laws.
Since the photos were released Tuesday, the site's traffic has soared by 10 times to about 80,000 hits per day, according to RuLeaks' own statistics.
The site's team promised that the mansion photos were only the beginning.
“Never keep quiet! Be afraid of nothing!” the team said in an e-mailed reply to questions from The Moscow Times. “In the time of total lies one word of truth can conquer the whole world. … History is happening before our eyes. An ocean of opportunities lies before us."
The web site, also available at викислив.рф, was launched last month to translate and mirror publications by the original WikiLeaks, but it quickly switched to original content.
The project differs from the handful of other Russian whistle-blowing sites by apparently not following a political agenda and focusing on original leaks, not media reprints. But analysts said it remains to be seen whether the site can keep up with the pace it has set for itself.
The team behind RuLeaks comprises a dozen young and ambitious souls who dream big — and have the support of many Internet activists in their 20s.
The team's members keep their names and locations secret. “Even our wives and children do not know we are The Anonymous,” they wrote in the e-mailed statement.
“Among us are the unemployed and students, office slaves and the laborers of the soil, mothers and fathers, sons and daughters, anonymous brothers and sisters of Planet Earth," the statement said. "Every day we get up and protect the freedom of information."
RuLeaks' domain name is registered under the name of Gregory Engels, a resident of Germany and a co-chairman of the Pirate Parties International movement.
Most RuLeaks editors are activists of the group's local spinoff, the Pirate Party of Russia, party chairman Pavel Rassudov said Thursday.
The web site will help “clean up the state,” Rassudov said.
He would not say where RuLeaks had acquired the photos of the mansion linked to Putin.
The story of the mansion was first broken by businessman Sergei Kolesnikov, who published an open letter to President Dmitry Medvedev on his web site CorruptionFreeRussia.com in December.
The country already has a number of whistle-blowing web sites, and the most well-known are Compromat.ru and Anticompromat.org. Some bloggers are also active anti-corruption activists, including lawyer Alexei Navalny, who leaked a report last year implicating Transneft in a $4 billion fraud case.
But RuLeaks differs from the other sites in the mechanism for submitting — or leaking — information, Rassudov said.
Virtually any document can be leaked to WikiLeaks at present because the Internet makes the process safe and easy, Rassudov said. “You can stop by a McDonald's and use their Wi-Fi to leak it and then just carry on with your day,” he said.
To ensure the safety of its potential whistle-blowers, RuLeaks suggests using privacy-protecting services such as The Onion Router network or the Privacy Box.
But while the software is free and easy to use, it may not be as safe as the RuLeaks team paints it to be. Tracking down a whistle-blower's IP address and location is difficult, but it is not impossible, said Vladimir Degtyaryov, chairman of Internet service provider Demos. “One thing is clear: If a resource is located in Russia, there is no guarantee,” he said by e-mail.
Rassudov predicted that leaks would be on the rise this spring with the beginning of regional parliamentary elections in March followed by the State Duma vote in December.
“Everybody will be leaking dirt on everybody,” Rassudov said.
Vladimir Pribylovsky, the man behind Anticompromat.org, also accepts online submissions, but mostly relies on a few trusted sources who prefer to call first and then arrange a meeting.
Pribylovsky, who also heads the independent Panorama think tank, said RuLeaks might be the only web site to expose dirty political laundry without a political agenda.
Anticompromat.ru, he said, is opposition politics. “I pre-select what I find interesting and don't hide my bias,” he said.
Compromat.ru, reported in July to have been bought by private investor Andrei Rutberg, is profit-driven, Pribylovsky said.
Both web sites have accumulated substantial archives but primarily offer information that was first published elsewhere.
Pribylovsky said RuLeaks has done well so far but has yet to prove its independence and lack of bias.
Big companies, meanwhile, do not seem to be particularly worried about RuLeaks. “We would only be happy with the launch of a web site like this,” said Igor Dyomin, a spokesman for Transneft.
Some experts worried that RuLeaks might become a web site for disgruntled criticism of the government rather than a tool for democratic development.
Yet RuLeaks may also serve as an example for regional journalists, bloggers and youth.
Small teams of 20-somethings made a difference last summer when central Russia was overwhelmed by wildfires and smog, prompting volunteers to team up using local web forums to help firefighting efforts.
One of those forums, Wyksa.ru, operated by half a dozen activists, faced a hacker attack shortly after it started posted daily updates on the situation in burning villages in the Nizhny Novgorod region. No perpetrator was found, but some blamed the attack on the local administration, whose shortcomings in dealing with the fires were exposed by the site.
The original WikiLeaks is also building up ties with Russia, as it has teamed up with Russian Reporter magazine and Novaya Gazeta.
Putin has spoken up in support of WikiLeaks founder Julian Assange, who faces sex charges in Sweden. What he thinks of RuLeaks and its publication of the mansion photos this week remains unclear. Putin's press office had made no comment about the photos of the palace.
Pirates Seized Record 1,181 Hostages in 2010
'The continued increase in these numbers is alarming,' maritime watchdog says
Pirates took a record 1,181 hostages in 2010 as ship hijackings in waters off Somalia escalated, a global maritime watchdog said Tuesday.
Attackers seized 53 vessels worldwide last year — all but four off the coast of Somalia — according to the International Maritime Bureau's piracy reporting center in Kuala Lumpur.
The number of hostages and vessels taken "are the highest we have ever seen" since the center began monitoring attacks in 1991, its director, Pottengal Mukundan, said in a statement.
"The continued increase in these numbers is alarming," he said.
The Somali attacks accounted for 1,016 hostages held for ransom, the center said.
The number of attacks in the Gulf of Aden, which along with adjacent seas links Europe to Asia, dropped by half because of better patrolling.
However, while the naval patrols foiled many attacks, the Somali pirates had moved farther offshore to boost their chance of success in hijackings, the piracy reporting center said.
"All measures taken at sea to limit the activities of the pirates are undermined because of a lack of responsible authority back in Somalia from where the pirates begin their voyages," said Mukundan.
Overall, there were 445 pirate attacks worldwide last year, a 10 percent rise from 2009, the center said. Eight crew members died — all attributed to Somali pirates.
Violent attacks and armed robberies were also notable in Indonesian waters, where 30 vessels were boarded.
Bangladesh had 21 vessels boarded, mainly by attackers armed with knives at the port of Chittagong, while Nigeria had 13, mostly near the port of Lagos.
The number of attacks in the South China Sea, which links to a key shipping lane for world trade, more than doubled to 31 in 2010, the IMB said.
On Monday, Somali pirates hijacked a Greek-owned bulk carrier, the MV Eagle, after releasing a Greek-owned tanker Sunday, the European Union Naval Force said.
The cargo ship was taken by pirates who had fired small arms and grenades, according to a press statement from the EU Naval Force. There were 24 Filipino crew onboard, it said.
The attack occurred in the Gulf of Aden, 490 miles southwest of Salaam, Oman. The EU said there had been no contact with the ship since the attack.
On Sunday, the MV Motivator and its crew of 18 Filipinos were released from pirate control, another press statement said. The ship was taken on July 4.
An EU ship had assisted the crew, and "according to the ship's Greek owners, the crew are reported to be as well as could be expected given the circumstances."
The Associated Press and Reuters contributed to this report.
The Fall of Wintel and the Rise of Armdroid
Many people are complaining that this year's Consumer Electronics Show was a bore, but blogger Horace Dediu has a much more interesting spin on it.
This year's show, Dediu argues, marks the end of the PC-era: it's finally being disrupted. The basic concept of disruption is that a low-end offering (in this case, tablets) emerges to displace existing solution (PCs). The reason this takes place is that the current solution has improved to such an extent that it provides more performance than a majority of users able to usefully employ.
This means that the iPad and its many clones were not really the main story of the show. The main story — which almost nobody covered — was that this year's CES marks the beginning of the end for Microsoft and Intel.
This transition has been a long time coming in the PC industry. Ironically enough, both of these two big players have seen the writing on the wall for almost a decade. But as is so often the case, incumbents find it immensely hard to disrupt themselves.
Even more so than Intel, Microsoft has known the tablet was on the way. In 2001, Bill Gates stood up at Comdex and introduced Microsoft's first attempt at a Tablet PC to the world. But they just couldn't get it right — the company has rarely been able to bring innovations to market without seeing someone else do it first, and this instance was no different. They tried jamming a PC into a smaller form factor, which entirely missed the point. Their tablet should have been about disrupting the PC market with something light, cheap and simple. Instead, Microsoft tried to make it do everything.
Intel has also struggled to find a way to profitably build processors that can power these handheld devices. Their latest financial results seem extremely healthy. But dig a little deeper — the only line of business that is barely growing is the Atom, Intel's mobile processor. They managed 8% revenue growth last year and no growth at all last quarter. This is in a year when tablets and smartphones exploded. If Intel had got it right, the Atom would be booming as all these smartphones and tablets come online. It would pick up the slack as the desktop processor business declined. Instead, so far, Atom has been a failure. Intel could only push it down as far as a few netbooks, but these are going to be the first to be crushed by the wave of tablets.
Both Microsoft and Intel have suffered from the same problem that most successful companies face when dealing with disruption. They cannot find a way to profitably invest in low-end offerings. Think about it from Microsoft's point of view: now that Windows 7 has been developed, to sell another copy, they don't have to do a single thing. Because of this, it becomes very hard for any executive to advocate the complete development of a low cost OS that will run on tablets: not only would it cost Microsoft a lot to develop, but it would result in cannibalization of its core product sales. Intel has the exact same issue. Why focus on Atom, or an even lower-end chip, when there is so much more margin to be made by focusing on its multi-core desktop processors?
This would be fine — except for the coming extinction of the PC.
The wheels are just starting to fall off. At CES, for the first time, almost all of Microsoft's OEM partners abandoned Microsoft exclusivity; and Microsoft's next-generation operating system has abandoned Intel exclusively for the first time. There's no reason to believe that either of the two companies are going to be able to turn this around. On one hand, ARM processors are perfect for powering these handheld devices. Manufacturers can customize to their heart's content. And Android is on track to dominate the operating system space (though maybe not profitably). Both ARM and Android — Armdroid — are providing everything that tablet manufacturers need, and doing it more effectively and at a lower cost than Microsoft and Intel are able to.
We will be able to look back and say that this was the CES that saw Wintel fall and Armdroid rise up.
UK Government to Offer PCs for £98, Internet for £9
The UK government wants to offer low-cost computers as part of a 12-month trial during Race Online 2012. The scheme, which aims to reach out to the 9.2 million adults that are not yet online, 4 million of whom are considered socially and economically disadvantaged, aims to "make the UK the first nation in the world where everyone can use the web."
Prices will start at £98 ($156.01) for a refurbished PC, with subsidized Internet connections available for as little as £9 ($14.33) a month or £18 ($28.65) for three months. The cheap computers will run open-source software (think Linux) and will include a flat-screen monitor, keyboard, mouse, dedicated telephone helpline, delivery, and even a warranty. The cheap Internet packages will use a mobile dongle to help people access the web.
"Motivation and inspiration are still two of the biggest barriers [to using the internet], but clearly perception of price is another big deal for people," Martha Lane Fox, the UK's digital champion, told the Financial Times. "A good price point is certainly part of what helps people get online."
The packages will be sold through 60 UK online centers which offer IT training and distributor Remploy, an organization that specializes in helping disabled and disadvantaged people find work. Remploy hopes to sell 8,000 machines in the next 12 months. The company's research has shown that going online can save people around £560 a year and that thousands of jobs are offered exclusively online, but the cost of owning a computer and Internet connection is often seen as a deterrent.
F.C.C. Approves Comcast-NBC Deal
Brian Stelter and Tim Arango
The proposed combination of Comcast and NBC Universal was approved by the Federal Communications Commission Tuesday, smoothing the way for the deal to close by the end of January.
The other government agency that is reviewing the deal, the Justice Department, is also expected to approve the deal, with conditions, on Tuesday.
The combination of Comcast’s cable systems and NBC Universal’s channels will create a media powerhouse, and it will represent the first time that a cable company will control a major broadcast network.
The approval has been expected for at least the last few weeks. It has been the subject of intense lobbying both by Comcast and by opponents of the deal, who fear that Comcast will restrict access to NBC programming. Comcast says the deal will help achieve its vision of anytime, anywhere access to content.
The F.C.C. approved the combination by a vote of 4 to 1, with the senior Democratic commissioner, Michael J. Copps, casting the dissenting vote. Mr. Copps, who had expressed doubt in the past about whether the combination would benefit consumers, said in a statement Tuesday that it “confers too much power in one company’s hands.”
Mr. Copps also said, “The Comcast-NBCU joint venture opens the door to the cable-ization of the open Internet. The potential for walled gardens, toll booths, content prioritization, access fees to reach end users, and a stake in the heart of independent content production is now very real.”
The F.C.C. was expected to impose a long list of conditions on the deal.
In the complicated transaction, Comcast is buying a majority stake in NBC Universal from General Electric. Over time, Comcast will have the option to buy a larger share of NBC.
In the nearly two years since Comcast began negotiating to buy NBC — the deal was hatched in the spring of 2009 — the media marketplace has shifted considerably as online video viewing has grown in popularity, even as television advertising has rebounded from its recessionary lows.
One result of the consumer tilt towards online video has been the rise of Netflix, which has pivoted from its beginnings as a DVD-by-mail business to a streaming video company. The success of Netflix in changing consumer behavior has raised fears that the heart of Comcast’s business — selling cable subscriptions — could be in jeopardy. To that end, the deal to acquire NBC Universal will give Comcast a significant role in the future of online television viewing. Through NBC, Comcast is also acquiring a minority stake in Hulu, the premiere online TV Web site.
The conditions, as outlined by government officials, will try to ensure that Comcast plays fair when dealing with rival programmers, cable providers and broadband Internet providers. Many of the conditions are intended to remain in place for seven years, an unusually long period of time.
The conditions set up an arbitration process when disputes arise between Comcast and other cable providers over access to any of NBC Universal’s cable channels.
The F.C.C. acknowledged Tuesday that the deal could create risks “to the development of innovative online video distribution services.”
So, in certain cases, Comcast may be required to distribute certain programming on the Internet — if one of its rivals does so. “While you probably can’t make them be first, you probably can make them be second,” said a person familiar with the conditions. The person requested anonymity because the conditions had not been made public by the government.
Comcast will not formally gain control of NBC Universal until after the end of the company’s next pay cycle, which is Jan. 28.
Bill Carter contributed reporting from New York.
Al Franken - U.S. Senator, Minnesota
A big disappointment today: The FCC and the Department of Justice have signed off on the Comcast/NBC merger, paving the way for a single enormous media conglomerate to obtain unprecedented control over the flow of information in our country.
I’ll be candid with you: This is an awful development for those of us who care about media consolidation. It will restrict your freedom of choice and raise your cable and Internet bills. And it could pave the way for even more media mergers and even less room for independent voices in the media.
But the fight’s not over. We’re building a grassroots movement to stand up to the special interests and stand up for middle class consumers. And every time an American learns more about what’s at stake in this fight, our movement grows stronger.
Help to strengthen our grassroots movement -- share this message on FACEBOOK and TWITTER!
I know that these corporate elites have all the money and lots of influence -- even, it appears, with President Obama’s Department of Justice and an FCC chaired by one of his appointees.
And I know that this decision only validates their efforts to silence critics and punish dissenters.
But I’ve also seen how hard many of you worked to raise our collective voices and warn of the danger posed by corporate control of the media. And I’m confident that, if we take today’s setback as a cue to work even harder, we’ll win in the end and keep our media free.
I’ll be in touch soon to talk about next steps.
Thanks for standing with me,
P.S. -- Remember, we can only stand up to the financial power of the corporate special interests with people power. So please share this message on Facebook and Twitter!
January 14, 2011
Dear Member of Congress,
As a new Congress begins, I write to congratulate you and to outline principles and priorities that guide the public policy efforts of the United States Conference of Catholic Bishops (USCCB). As President of the Bishops’ Conference, I assure you of our prayers and hopes that this newly elected Congress will advance the common good and defend the life and dignity of all, especially vulnerable and poor persons whose needs are critical in this time of difficult economic and policy choices. We continue to seek ways to work constructively with the Administration and the new Congress and others of good will to pursue policies which respect the dignity of all human life and bring greater justice to our nation and peace to our world.
As bishops, of course we approach public policy not as politicians but as pastors and teachers. Our moral principles have always guided our everyday experience in caring for the hungry and homeless, offering health care and housing, educating children and reaching out to those in need. We lead the largest community of faith in the United States, one that serves every part of our nation and is present in almost every place on earth. From our experience and our tradition, we offer a distinctive, constructive and principled contribution to the national dialogue on how to defend human life and dignity, promote and protect marriage and family life, lift up those who experience economic turmoil and suffering, and promote peace in a world troubled by war and violence.
Most fundamentally, we will work to protect the lives of the most vulnerable and voiceless members of the human family, especially unborn children and those who are disabled or terminally ill. We will consistently defend the fundamental right to life from conception to natural death. Opposed to abortion as the direct killing of innocent human life, we will encourage one and all to seek common ground, reducing the number of abortions by providing compassionate and morally sound care for pregnant women and their unborn children. We will oppose legislative and other measures to expand abortion. We will work to retain essential, widely supported policies which show respect for unborn life, protect the conscience rights of health care providers and other Americans, and prevent government funding and promotion of abortion. The Hyde amendment and other provisions which for many years have prevented federal funding of abortion have a proven record of reducing abortions, and should be codified in permanent law. Efforts to force Americans to fund abortions with their tax dollars pose a serious moral challenge, and Congress should act to ensure that health care reform does not become a vehicle for such funding.
In close connection with our defense of all human life and particularly the most vulnerable among us, we stand firm in our support for marriage which is and can only be a faithful, exclusive, lifelong union of one man and one woman. There is good reason why the law has always recognized this, and why it should continue to do so. In a manner unlike any other relationship, marriage makes a unique and irreplaceable contribution to the common good of society, especially through the procreation and education of children. Children need, deserve and yearn for a mother and a father. All human societies in every era of history, differing greatly among themselves in many other ways, have understood this simple wisdom. No other kinds of personal relationships can be justly made equivalent or analogous to the commitment of a husband and a wife in marriage, because no other relationship can connect children to the two people who brought them into the world. For this reason, we will continue to vigorously support the Defense of Marriage Act (DOMA) and strongly oppose legislative or executive measures that seek to redefine or erode the meaning of marriage. We suggest Congressional oversight of executive actions that have the effect of undermining DOMA, such as the expansion of spousal benefits to two persons of the same sex, and the weak defense of DOMA in court against constitutional challenge. We will seek to reflect respect for the family in every policy and program, to protect the rights of children, and to uphold the rights and responsibilities of mothers and fathers to care for their children. We will also continue to monitor legislation and federal regulations that protect our children and families from the destructive repercussions of pornography, which degrades human sexuality and marital commitment.
Our nation faces continuing economic challenges with serious human consequences and significant moral dimensions. We will work with the Administration and Congress for budget, tax and entitlement policies that reflect the moral imperative to protect poor and vulnerable people. We advocate a clear priority for poor families and vulnerable workers in the development and implementation of economic recovery measures, including appropriate new investments, finding ways to offer opportunity and strengthening the national safety net. Poor families and low-income and jobless workers have been hurt most of all in the economic crisis. The difficult choices ahead on how to balance needs and resources, and how to proportionately allocate the burdens and sacrifices need to take into account the vulnerability and capacity of all, especially those most affected by poverty, joblessness and economic injustice. We urge the Administration and Congress to seek the common good of our nation and people above partisan politics and the demands of powerful or narrow interests.
With regard to the education of children, we call for a return to the equitable participation of students and teachers in private schools in programs funded through the Elementary and Secondary Education Act. When students in private schools are counted in order to determine the total amount of federal education funds a public school district receives, the funds generated by these students should benefit them and their teachers, not be used for programs in which only public school students and personnel can participate. We also continue to support initiatives, such as tax credits and scholarship programs, which provide resources for all parents, especially those of modest means, to choose education which best addresses the needs of their children.
We welcome continuing commitments to empower faith-based groups as effective partners in overcoming poverty and other threats to human dignity. We will continue to work with the Administration and Congress to strengthen these partnerships in ways that do not encourage government to abandon its responsibilities, and do not require religious groups to abandon their identity or mission.
As the Internet continues to grow in its influence and prominence in Americans’ lives, we support legislation and federal regulations that ensure equal access to the Internet for all, including religious and non-profit agencies, as well as those in more sparsely populated or economically distressed areas. True net neutrality is necessary for people to flourish in a democratic society.
The Catholic Bishops of the United States have worked for nearly a century to assure health care for all, insisting that access to health care is a basic human right and a requirement of human dignity. Basic health care for all is a moral imperative, not yet completely achieved. We remain committed to our three moral criteria: 1) Ensure access to quality, affordable, life-giving health care for all; 2) Retain longstanding requirements that federal funds not be used for elective abortions or plans that include them, and effectively protect conscience rights; and 3) Protect the access to health care that immigrants currently have and remove current barriers to access. We will continue to devote our efforts to improving and correcting serious moral problems in the current law, so health care reform can truly be universal and life-affirming.
We will work with the Administration and the new Congress to fix a broken immigration system which harms both immigrants and our entire nation. Comprehensive reform is needed to deal with the economic and human realities of millions of immigrants in our midst. We realize that reform must be based on respect for and implementation of the law and for the legitimate and timely question of national security. Equally, however, it must defend the rights and dignity of all peoples, recognizing that human dignity comes from God and does not depend on where people were born or how they came to our nation. Truly comprehensive immigration reform will include a path to earned citizenship, with attention to the fact that international trade and development policies influence economic opportunities in the countries from which immigrants come. It also must foster family reunification, the bedrock principle upon which our national immigration system has been based for decades. Immigration enforcement policies should honor basic human rights and uphold basic due process protections.
On international affairs, we will work with our leaders to seek responsible transitions to end the wars in Iraq and Afghanistan and promote religious freedom for all, acting against religious repression of our fellow Christians and others. The recent attacks against Christians in Egypt, Iraq and Nigeria and the assassination of a Pakistani governor who opposed blasphemy laws highlight an appalling trend of increased violence aimed at vulnerable minority communities. In all foreign policy deliberations, we urge a greater emphasis on human rights, especially religious freedom, which we view as an essential good so intricately tied to other human rights and to the promotion of peace. We especially urge continued and persistent leadership to bring a just peace to the Holy Land, to promote peaceful change in Sudan, and to rebuild Haiti. We will continue to support essential U.S. investments to overcome global poverty, hunger and disease through increased and reformed international assistance. Continued U.S. leadership in the fight against HIV-AIDS and other diseases in ways that are both effective and morally appropriate have our enthusiastic backing. Recognizing the complexity of climate change, we wish to be a voice for the poor and vulnerable in our country and around the world who will be the most adversely affected by threats to the environment.
This outline of USCCB policies and priorities is not complete. There are many other areas of concern and advocacy for the Church and the USCCB. For a more detailed description of our concerns please see Forming Consciences for Faithful Citizenship (USCCB 2007), pages 19-30.
Nonetheless, we offer this outline as an agenda for dialogue and action. We hope to offer a constructive and principled contribution to national discussion about the values and policies that will shape our nation's future. We seek to work together with our nation's leaders to advance the common good of our society, while disagreeing respectfully and civilly where necessary in order to preserve that common good. I am enclosing a brochure from our Office of Government Relations, directed by Nancy Wisdo, for your future contacts with the Conference.
In closing, I thank you for responding to the noble call of public service and I renew our expression of hope and our offer of cooperation as you begin this new period of service to our nation in these challenging times. We promise our prayers for all of you, and in a special way for your colleague Gabrielle Giffords and all those killed or injured in the horrific attack in Tucson. We hope that the days ahead will be a time of renewal and progress for our nation as we defend human life and dignity, seek greater justice for all God’s children, and bring peace to a suffering world.
With prayerful best wishes, I am
Faithfully and respectfully yours,
Most Reverend Timothy M. Dolan
Archbishop of New York
Verizon Challenges FCC's New Internet Rules
Jasmin Melvin and Sinead Carew
Verizon Communications took the Federal Communications Commission to court on Thursday over its new Internet traffic rules, arguing the regulator had overstepped its authority.
The filing with the U.S. Court of Appeals for the District of Columbia fulfilled the predictions of many industry analysts that the FCC's split vote last month to impose the rules would be swiftly challenged.
Medley Global Advisors analyst Jeffrey Silva said there was a "reasonable chance" the court would strike down the rules that prevent network operators from blocking lawful content but still let them ration access to their networks.
At stake is ensuring consumer access to content such as huge movie files while letting Internet providers manage their networks to prevent congestion.
The same court ruled last year that the FCC lacked the authority to stop Comcast Corp from blocking bandwidth-hogging applications on its broadband network, spurring the agency's most recent rulemaking effort.
"They've a history of backing the Bells," said Stifel Nicolaus analyst Rebecca Arbogast, referring to the court's tendency to side with large communications companies over the
Verizon said it was concerned by the FCC's assertion of broad authority to make new regulations on broadband Internet networks.
"We believe this assertion of authority goes well beyond any authority provided by Congress, and creates uncertainty for the communications industry, innovators, investors and consumers," Verizon deputy general counsel Michael Glover said in a statement.
A senior FCC official said Verizon appeared to be premature in making its filing since the rules have not even been published yet in the Federal Register.
The agency is confident its order is legally sound, added the FCC official, who spoke on condition he was not named.
In its 3-2 vote on December 21, the FCC gave wireless service providers more leeway in managing their networks but still forbade them from blocking access to websites or competing voice and video applications.
The action highlighted a huge divide between those who say the Internet should flourish without regulation and those who say the power of high-speed Internet providers to discriminate against competitors needs to be restrained.
Even though the FCC's Internet rules have not been formally published yet, a step that would put them into effect, Verizon's appeal argued that the rules would modify wireless airwave licenses it holds.
Verizon is majority owner of Verizon Wireless, the biggest U.S. mobile service.
Arbogast said other companies or public interest groups who support the Internet rules might file a challenge in another court in a bid to shift to a venue more sympathetic to the FCC. She predicted it would take 18 months to resolve the issue in the courts.
Free Press, a public interest group that had argued for even tougher rules, said Verizon was unhappy even with the watered down measure that was meant to appease it.
"It's now clear that it will settle for nothing less than total deregulation and a toothless FCC," said Aparna Sridhar, policy counsel for Free Press.
(Reporting by Sinead Carew in New York and Jasmin Melvin in Washington D.C.; Editing by Tim Dobbyn)
Unsecured IP Cameras Accessible to Everyone
In the last couple of decades, we have become so accustomed to the idea that the public portion of our everyday life is watched and recorded - in stores, on the street, in institutions - that we often don't even notice the cameras anymore.
Some of us don't mind the practice, others are unnerved by it, but whether you are part of the first or the second group, it is good to be aware of the consequences that unsecured surveillance systems can lead to.
It used to be that surveillance systems consisted of analog cameras physically wired to a central recording system. It was a both money- and time-consuming process, that has finally been made considerably easier and cheaper by the development and use of IP cameras.
As Tom Connor of ars technica explains, these new cameras have their own IP addresses and stream video directly onto a network - there is no more need for a digital video recorder or a control platform. Instead, a network video recorder does all the managing of the cameras and recording.
So, as a cheaper and easier alternative to their analog counterparts, the IP cameras have been gaining market share at a fast pace and will likely continue to do so in the future.
But, the main issue that remains to be addressed is that of security. Analog surveillance systems were difficult to hack into by people who lacked the adequate knowledge, but IP cameras - having their own IPs - can be quite easily physically located and their stream watched in real-time by anyone who has a modicum of computer knowledge and knows what to search for on Google.
"Once an IP camera is installed and online, users can access it using its own individual internal or external IP address, or by connecting to its NVR (or both)," explains Connor. "In either case, users need only load a simple browser-based applet (typically Flash, Java, or ActiveX) to view live or recorded video, control cameras, or check their settings."
Camera names and model numbers matched with specific search tags such as “intitle,” “inurl,” “intext,” and many others, can yield links to cameras' remote viewing pages. Search combinations such as “intext:’MOBOTIX M10’ intext:’Open Menu’” and “intitle: ‘Live View / - AXIS 206M’” proved effective for Connor.
And he is not the only one. According to him, there are entire online communities of people interested in finding unsecured IP cameras and in discussing their interest on forums. They have also been known to provide large lists of search strings that work on Google Search and they are there for the taking for all those people who don't know where to start.
And Connor did just that - he armed himself with a list and started to copy and paste it into the search engine. He found unsecured cameras all over the world. Among other things, he watched snow-capped villages, college campuses, public squares, doctor's offices, aquarium tanks and retail stores.
Some of these cameras were obviously unsecured because there was no need to do that, but he fears that others - especially those in stores - can provide invaluable information to someone intent on breaking in and stealing, or any other kind of mischief.
He also managed to access three red-light cameras in a town in Texas, and while he didn't change any settings, he could have. And if he could have, anyone else could, too. A scary thought, don't you think?
Luckily for all of us who have the need for such a surveillance setup, securing these cameras can be done easily and fast by following instructions in the manual. They - and the DVRs and NVRs - come equipped with onboard security settings that take only a few minutes to configure and effectively lock out anyone who shouldn't have access. Also, a simple step like changing the default username and password can do wonders.
Dating Site Creates Profiles from Public Records
Non-registered individuals get dating profiles in the US.
Online dating company Gotham Dating Partners has announced plans to create profiles for non-registered individuals based on publicly available information on social networking sites.
The company operates several dating sites, including: Dons and Divas, Faithful Lover, Marry Me First, Prison Hookup, and Ugly People Date. Incorporated in New York in January 2010 by Aaron Fraser, it is the parent of online footwear startup LeBron Jordan, which came under fire from Nike this month for potential trademark infringement.
According to the company's marketing vice president Damon Jordan, the dating service had about 6.5 million members in the US and elsewhere, including Australia.
But that figure was set to rise exponentially in the coming weeks.
Jordan said the site would soon host some 340 million profiles after scraping information from social networking sites, e-mail registries, mailing lists, marketing surveys, government census records, real estate listings and business websites to create new dating profiles.
Gotham Dating Partners hoped to position itself as a dating service as well as a "public information source" for individuals and corporations needing accurate information on US citizens, Jordan said.
The site announced that the changes would "in no way affect our international clients". But Jordan said any online, public information - including information about Australians - would be used.
Jordan did not expect to face any privacy issues by aggregating publicly available information, stating: "If the information is public, there are no privacy issues."
"For example, if you open a Facebook account and your setting are not set to private, all of that information is in the public domain, it is free for the taking," he told iTnews.
"Wherever we can extract information about you, we will, as long as it's in the public domain.
"In essence, all Australians who have a Facebook page, whose profiles are set to public, will be on our registry."
Jordan said the company hoped to improve public safety by ensuring members' profiles were accurate.
"This is actually a protective measure to ensure that the information posted by our members are indeed accurate," he said. "It must mesh with what is already out there about them."
The only way for an individual to be excluded from the database would be to log in, submit their information and then delete their profile, he said.
Best check your privacy settings
Australian Privacy Commissioner Timothy Pilgram warned that the automatic creation of identifiable profiles of individuals without their knowledge was "not good privacy practice".
"Organisations covered under the Privacy Act 1988 are generally required to provide individuals with notice that their information is being collected," he told iTnews.
"These organisations should also only use the information for the purpose for which it was collected, must store the information securely, and must delete it when it is no longer needed for that purpose.
"These obligations apply even when the personal information is publicly available."
Pilgrim advised individuals to read websites' privacy policies to ensure they are aware of how their personal information would be used.
A Racy Show With Teenagers Steps Back From a Boundary
In recent days, executives at the cable channel became concerned that some scenes from the provocative new show “Skins” may violate federal child pornography statutes.
The executives ordered the producers to make changes to tone down some of the most explicit content.
They are particularly concerned about the third episode of the series, which is to be broadcast Jan. 31. In an early version, a naked 17-year-old actor is shown from behind as he runs down a street. The actor, Jesse Carere, plays Chris, a high school student whose erection — assisted by erectile dysfunction pills — is a punch line throughout the episode.
The planned changes indicate that MTV, which has been pushing the envelope for decades, may be concerned that it pushed too far this time.
“Skins” is a calculated risk by MTV which is eager to get into the scripted programming business. The channel, a unit of Viacom, has long tested American standards for sexuality and obscenity on television with shows like “The Real World” and “Jersey Shore.”
Those reality shows have generally involved adults, but for “Skins,” the producers purposefully cast actors ages 15 to 19, most of whom had never acted before.
MTV’s president and other executives declined interview requests on Wednesday. An MTV spokeswoman, Jeannie Kedas, insisted that the future episodes of “Skins” were still works in progress. She would not confirm that MTV executives were fearful of running afoul of child pornography laws.
“ ‘Skins’ is a show that addresses real-world issues confronting teens in a frank way,” she said in a statement. “We review all of our shows and work with all of our producers on an ongoing basis to ensure our shows comply with laws and community standards. We are confident that the episodes of ‘Skins’ will not only comply with all applicable legal requirements, but also with our responsibilities to our viewers.”
Child pornography is defined by the United States as any visual depiction of a minor engaged in sexually explicit conduct. In some cases, “a picture of a naked child may constitute illegal child pornography if it is sufficiently sexually suggestive,” according to the Justice Department’s legal guidance. Anyone younger than 18 is considered to be a minor.
The youngest cast member on “Skins” is 15.
“Skins” is an import from Britain, a country that has historically displayed a higher tolerance for TV eroticism than the United States. The episodes for MTV, including the third one, which was shared with TV critics, are virtually identical to the source material.
The remade episodes, like the ones in Britain, included simulated masturbation, implied sexual assault, and teenagers disrobing and getting into bed together.
With ads that feature groups of barely clothed teenagers, “Skins” is surely one of the most sexually charged programs that MTV has featured. Before it even had its premiere, the Parents Television Council, a TV watchdog group, labeled “Skins” the “most dangerous program that has ever been foisted on your children.” The group objected to the gratuitous scenes of drug and alcohol use, violence and sexual acts.
Of course, those scenes may be what attract young viewers in the first place. Jessica Bennett, a senior writer for Newsweek, wrote last week, “ ‘Skins’ may be the most realistic show on television.”
The show is off to a running start. It attracted 3.3 million to its premiere on Monday night and set a new first-episode record for the channel among viewers ages 12 to 34.
Episodes of “Skins” are rated TV-MA, indicating that the content may be unsuitable for viewers younger than 17. MTV states in news releases that it is “specifically designed to be viewed by adults.” However, many of MTV’s viewers are in middle and high school. According to the Nielsen Company, the first episode drew 1.2 million people younger than 18.
MTV noted that the episodes were being shown only at or after 10 p.m. Eastern, and said in the statement, “We also have taken numerous steps to alert viewers to the strong subject matter so that they can choose for themselves whether it is appropriate.”
It is unclear when MTV first realized that the show may be vulnerable to child pornography charges. On Tuesday, a flurry of meetings took place at the network’s headquarters in New York, according to an executive who attended some of the meetings and spoke only on the condition of anonymity. In one of the meetings, the executives wondered aloud who could possibly face criminal prosecution and jail time if the episodes were broadcast without changes.
Days earlier, MTV held a premiere party for the series in Manhattan. Ensconced there in the V.I.P. perch, the actors huddled around one another and stared in awe at the youthful party that was under way — while unable to partake in the free alcohol that was flowing in the 21-and-older area. By midnight, several of the actors appeared to have headed home with their parents.
Referring to the largely unknown actors, Bryan Elsley, an executive producer of “Skins,” said in a letter to critics last month, “They’re making the characters their own and demanding that their voices be heard.”
Mr. Elsley and his producing partners did not respond to interview requests on Wednesday, but MTV executives were known to be worried about how the producers would react to the planned changes. The channel intends for the editing to obscure some of the sexual content in the third episode and others.
There are, of course, innumerable examples of youthful sexuality being packaged by the media. Amy M. Adler, a professor of law at New York University who specializes in free speech, art and pornography, pointed to the teenage singer Miley Cyrus’s revealing photo shoots and the CW network’s use of condemnations by the Parents Television Council of the risqué drama “Gossip Girl” to promote the show.
“There are times when I look at mainstream culture and think it is skirting up against the edge of child pornography law,” she said.
Wiretaps of Berlusconi’s Teenage Friend Emerge
A tabloid tidal wave washed over Italy on Tuesday as newspapers published eye-popping wiretapped conversations from a nightclub dancer who said she had dallied with Prime Minister Silvio Berlusconi as a minor, but whether it would sweep the wily prime minister out to sea was still anyone’s guess.
The wiretaps emerged days after prosecutors opened an investigation into Mr. Berlusconi on charges he compensated Moroccan-born Karima el-Mahroug, nicknamed “Ruby Rubacuori,” or “Ruby Heart-Stealer,” for sex at his villa outside Milan when she was a minor. In wiretaps, Ms. Mahroug said she had been attending parties at Mr. Berlusconi’s villa since she was 16.
Mr. Berlusconi, 74, who denies all wrongdoing and says he did not know Ms. Mahroug was a minor, is also accused of helping spring her from police custody when she was detained for theft last spring. Now 18, she said she had asked Mr. Berlusconi for 5 million euros ($6.7 million) to keep quiet, according to wiretaps published Tuesday in the Italian press.
But Ms. Mahroug is apparently only a face in the crowd. Prosecutors said this week that “a significant number” of young women had prostituted themselves to the prime minister, obtaining cash or rent-free housing in exchange for sex. In Italy, where a facade of Roman Catholic morality masks a high tolerance for illicit romance, Mr. Berlusconi has weathered scandals for years. But this time, with the prime minister facing possible criminal charges and with wiretaps presenting a picture of a sordid world of orgies and of blackmail by call girls, things are beginning to look different.
Above all, Italians are increasingly alarmed by the divide between the country’s ills and the prime minister’s priorities.
“It’s not important what he does privately, but what he doesn’t do as a head of government,” said Simone Calvarese, 41, a bus driver in downtown Rome, who said he had voted for Mr. Berlusconi in the past but like many Italians had lost patience.
On Tuesday, the president of Italy, Giorgio Napolitano, expressed “grave concern” over the scandal and called on Mr. Berlusconi to clarify things, while the newspaper of the Italian bishops’ conference, Avvenire, published a rare front-page editorial that decried a crude culture of "power, sex and money," implicitly criticizing Mr. Berlusconi’s behavior, and called prostitution “morally indefensible.”
Last week, Italy’s highest court removed the prime minister’s automatic immunity from prosecution, and he is holding onto his parliamentary majority by a thread.
But it remains to be seen if the government will collapse. On Tuesday, the opposition stepped up calls for Mr. Berlusconi to resign, but he can fall only if he loses his parliamentary majority, and for now his party loyalists are sticking with him.
“With Berlusconi, the rules from any other place or government don’t apply,” said Mario Calabresi, the editor of the Turin daily La Stampa. “It’s hard to know if this will really be the last scandal that makes Berlusconi fall, because for him to fall, someone has to bring him down.”
In the meantime, the wiretapped conversations have gripped Italy. Culled from a range of women, lawyers and associates, the wiretaps show the intersection of politics and the kind of reality-television culture that Mr. Berlusconi has helped create in his decades as Italy’s largest private broadcaster.
The scandal has a cast of characters that would fill an entire soap opera season. Also under investigation are Emilio Fede, 79, one of Mr. Berlusconi’s oldest friends and the director of a news program owned by his company, Mediaset; and Lele Mora, 55, an agent for television personalities. The authorities are also investigating Nicole Minetti, 25, a former dental hygienist and now a politician for Mr. Berlusconi’s party in Lombardy, who is accused of helping manage the young women in Mr. Berlusconi’s orbit, including intervening with the local police when Ms. Mahroug was questioned about a theft last May.
Prosecutors say the three helped procure attractive young women for parties at Mr. Berlusconi’s villas, many of whom had appeared on the reality television shows that have been a staple on Mr. Berlusconi’s television channels for years.
A parliamentary committee is expected to begin discussion Wednesday on a request by prosecutors to search some of Mr. Berlusconi’s properties, including offices near Milan that they say could contain documents indicating that some women were given rent-free apartments in a complex owned by Mr. Berlusconi in exchange for sex.
The wiretaps published Tuesday seriously damage the superman image that Mr. Berlusconi helped cultivate.
In a conversation published in Corriere della Sera, one young woman named by prosecutors in the prostitution inquiry complained about the prime minister’s looks, saying: “He’s more dead than alive. He’s even become ugly. He should just give up. I hope he’s more generous.”
In another transcript published in Corriere della Serra, Ms. Mahroug compared herself with Noemi Letizia, a woman whose 18th birthday party Mr. Berlusconi attended in the spring of 2009, weeks before his wife filed for divorce, who said she called him Daddy. “I call him Daddy, too, but she was his little darling, I’m his culo,” Ms. Mahroug said, using an Italian term suggesting sex partner.
Other wiretapped conversations told of parties in which Mr. Berlusconi, Mr. Fede and Mr. Mora would spend evenings with dozens of women, who would strip down to their underwear while the men watched.
In a televised address on Sunday, a tense-looking Mr. Berlusconi, his face plastered with pancake makeup, attacked the magistrates investigating him, defended his right to privacy and denied that he had ever paid for sex.
For the first time since his wife filed for divorce, Mr. Berlusconi also said he had a steady girlfriend — prompting a wave of speculation over her identity. Italian bookmakers put the best odds on her being a member of Parliament, but a former Miss Piedmont also appeared to be a contender.
Sitting against a backdrop of family photos and a small statuette of a bucking horse, Mr. Berlusconi added that his parties were all conducted with “the most absolute elegance, decorum and calm.”
Gaia Pianigiani contributed reporting.
How to Keep Your Ex from Popping Up All Over Facebook
You can hide people from your Facebook News Feed, but that won't stop Facebook from popping up elsewhere, constantly recommending that you view photos of your ex and his/her new flame. Here's how to completely hide someone from Facebook.
When Facebook first implemented some of its new recommendation features, a lot of people found their ex's photo albums, profiles, and other updates ended up in that sidebar more often than not. This makes sense, since for a while they were probably your most contacted Facebook friend—but after a breakup, it isn't exactly what you want to see on every page. Facebook's since edited these photo boxes to avoid exes, but it only works if you were listed as in a relationship with that person on Facebook—so it doesn't help if you want to completely hide the secret exes, random hookups, or people that just bug the hell out of you.
Google Chrome extension Eternal Sunshine hides anyone you choose from nearly every corner of Facebook, including your news feed, profile updates, photo updates, suggested photo albums, and Facebook Chat (both the list and mosaic). It's a nice way to keep them out of your face without outright unfriending or blocking them. You'll still be able to visit their profile if you search for them, which is nice—after all, you still need to know how crappy their life is without you—Facebook just won't be dangling their profile in front of your face all the time.
Just hit the link to install the Chrome extension, then visit the profile of the person you want to hide. Grab their username or user ID number from the URL of their profile page (it will only display one or the other), and paste it into Eternal Sunshine. Once you hit Enter, the extension will start hiding them from Facebook.
How to Keep Your Ex from Popping Up All Over FacebookIt isn't quite perfect; I've still run into one or two instances of hidden friends while I was testing it, but jarring ex updates showed up far less often than it had before. And, of course, you're still going to see all their comments or tagged photos if they appear in your friends' albums. If you want to truly remove every trace of them, you'll have to block them, but this is a good way to keep them out of your way without starting any drama ("I thought we were going to handle this maturely. Why did you unfriend me?"). Plus, it's quite a bit better than Facebook's built-in "Hide" option. Give it a shot if you can think of a few people you'd like to see less of.
Eternal Sunshine is a free download, works wherever Google Chrome does.
Senator Who Opposes Antipiracy Bill Under Pressure?
Supporters of an antipiracy bill introduced into the Senate last year appear ready to put some pressure on one of the legislation's chief opponents.
Sen. Ron Wyden, a Democrat from Oregon, was instrumental in blocking the Combating Online Infringement and Counterfeits Act (COICA) late last year. COICA was introduced by Sen. Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee, and passed in that committee unanimously. But it was derailed when Wyden opposed it. Individual senators can place holds on pending legislation.
Since the legislation was introduced very late in the prior congressional session, Wyden's opposition forced supporters to wait until Congress reconvened. Now that Congress is back to work, Leahy has said he will again try to get COICA passed. The bill already has the backing of the major Hollywood film studios and record labels, but a mostly new group of supporters sent a letter today to U.S. Attorney General Eric Holder, praising him for past antipiracy efforts and asking for his support in getting COICA passed.
Among the companies that signed the letter, Nike, one of Oregon's largest and most influential companies, was at the top of the list. A little lower was Adidas, another large company with operations in Oregon.
Maybe it was a coincidence that Nike was so conspicuous, but either way, COICA backers are sending a message that the bill has heavyweight support. In addition to Nike, some of the other companies or groups that signed the letter included Viacom, NBC Universal, the National Basketball Association, the National Football League, Voltage Pictures (makers of the Oscar-winning film "The Hurt Locker"), Chanel, Burberry Limited, and Major League Baseball.
Copyright owners appear to really want COICA and for good reason. They have battled illegal file sharing for years with little success. They have argued that Internet piracy harms the U.S. economy and kills jobs here. While the studies done on the economic impacts caused by illegal file sharing were questioned by the Government Accountability Office last year, there is some growing support that entertainment companies are ailing. Music sales are down, and last week Sony Corp. announced it will shut down a CD-manufacturing plant in Pitman, N.J. About 300 people will be laid off. Sony once operated three CD-making operations in the United States. It now has one.
COICA would give the government sweeping power to shut down domain names belonging to U.S.-based pirate sites as well as the authority to order Internet service providers to cut off access to similar sites overseas.
The Department of Justice would also have the authority to order credit card companies to stop processing transactions from suspected Web sites and order online advertising services, such as Google, to boot the sites off their ad networks and sever financial ties. One of the underlying themes of COICA is to choke off money-making abilities of pirate sites.
Opponents say the legislation is censorship. This afternoon, Wyden's office released this statement to CNET:
"Senator Wyden has long worked with U.S. industry on combating the trafficking of counterfeit goods like fake shoes and apparel. But going after trade in real merchandise can be done in a variety of effective ways, like inspecting shipping containers at American ports of entry to identify and seize fake merchandise.
"Unfortunately, the content industry has piggybacked on the legitimate efforts of apparel designers to combat counterfeit goods and now threaten the integrity of the Internet as a means to combat intellectual property infringement. The Internet is too important to our economy and to advancing American values to be inappropriately regulated and censored under the guise of protecting IP, which is why Congress and the Administration should be as cautious as it is surgical when it aims its sights on the Internet."
Below is the text of the letter dated January 18, 2011 and addressed to Eric Holder, attorney general, and John Morton, from U.S Immigration & Customs Enforcement.
Until next week,
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