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Old 27-01-16, 08:57 AM   #1
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Default Peer-To-Peer News - The Week In Review - January 30th, '16

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January 30th, 2016




How a DIY Network Plans to Subvert Time Warner Cable's NYC Internet Monopoly
Jason Koebler

In a warehouse basement in Brooklyn’s Red Hook neighborhood late last year, a handful of self-taught network engineers gathered to casually discuss how they might make Time Warner Cable irrelevant in their lives.

Toppling—or at least subverting—a telecom monopoly is the dream of many an American, who are fed up with bait-and-switch advertising campaigns, arbitrary data caps, attacks on net neutrality, overzealous political lobbying, lackluster customer service, and passive-aggressive service cancellation experiences that are a common experience of simply being a broadband internet customer these days. The folks at NYC Mesh are actually doing something about it.

Motherboard made a podcast about NYC Mesh earlier this month. You can subscribe to Radio Motherboard on iTunes.

On any given weekend, Brian Hall and his fellow organizers can be found around the city, installing directional wifi routers on rooftops. Anyone in the city who lives near another person on the network is welcome to join, and NYC Mesh volunteers will help you install a rooftop router.

“Two weeks ago, Jonathan decided he wanted to put a router in his backyard,” Hall told me, referring to one of his organizers. “We were initially going to put it on the top of a telegraph pole. But we couldn’t figure out how to get up there, so he started climbing a tree, it was so far up. There’s now a router at the top of a tree in Park Slope.”

The DIY network relies on “mesh” routing. The concept is quite simple. Your home wifi router provides internet to anyone with a wifi-capable device in your home. But routers also have the ability to connect to and talk to each other. By “meshing” them, or connecting them together, you are creating a larger wifi zone. As long as one of the routers is connected to the internet in some way, it’s possible for anyone within range of any of the routers to get onto the internet. You could, theoretically, connect many routers together to create a giant wifi hotspot that covers huge parts of New York City or any other geographical area.

Of course, it’s not quite that simple. Every time a connection “hops,” it slows down. If your router is connected to the internet but your neighbor’s is not, your internet speed will be faster than his or hers. The more hops, the more latency. This means that, for a mesh connection to be a viable alternative to a standard one, many of the routers must be connected to the internet.

Currently, NYC Mesh has about 40 “nodes,” or routers on the network (they are mostly smattered around Manhattan’s East Village and Williamsburg in Brooklyn), with more than 100 people waiting for an install. The network is also capable of “meshing” through the internet, meaning that if two routers are independently connected to the internet, they can also talk to each other to be part of the same network, which is why there are various pockets of meshes in the NYC network. NYC Mesh explains its mission in this presentation.

What NYC Mesh has accomplished so far is interesting. It’s a fun hobby project, a cool proof-of-concept, and an interesting experiment in what’s possible with the cooperation of a handful of strangers. But all of the nodes are eventually routed through a Time Warner Cable internet connection, which doesn’t do much good if you’re trying to create what could eventually be an alternative to Time Warner. It has to become more serious.

And so Hall has arranged agreements with two massive internet exchanges in New York City that will allow him to install two “super nodes” that have ranges of several miles in March of this year. Super nodes are essentially high-powered wireless transmitters that are connected to an internet exchange, which can be thought of as the “backbone of the internet.” In many cases, normal internet service providers buy or lease their bandwidth from these internet exchanges, which have names the layperson probably hasn’t heard of.

The first super node will be at the Sabey Data Center, which is on the Manhattan side of the Brooklyn Bridge. The second will be at 325 Hudson, which bills itself as a “carrier-neutral interconnection facility” that “offers direct access to transatlantic cables, major metro and regional fiber providers, and peering exchanges.”

“They would be connecting us directly into the backbone of the internet,” Hall said. “We’ve met a lot of helpful people in high places willing to donate bandwidth and to give us cheap space on a couple internet exchange places in downtown Manhattan. It’s quite exciting because we’ll get cheap internet and can broadcast it to Brooklyn and downtown Manhattan.”

The importance of these super nodes to the future of the network can’t really be understated: They have a range of several miles and are connected directly into the backbone of the internet, which allows NYC Mesh to become its own internet service provider. Routers can also connect directly to the super node, meaning that people who want to join it will no longer need to live within a few hundred feet of the nearest node. Instead, everyone who lives in lower Manhattan or along the Brooklyn waterfront should be able to connect directly to the network.

Hall says that routers connected to the super node will be able to get download speeds of more than 100 mbps, which is faster than many Time Warner Cable connection options. A $95 router on your rooftop would be able to connect to the super node, and Hall says he’s planning on charging people a modest maintenance fee (“we’re thinking like $10 a month or something”) to join. The super node will initially be funded by businesses in lower Manhattan who are hoping to create redundancies should their internet service go down during a storm, for instance.

There are still a lot of moving parts, and neither of the nodes has been installed yet, but experts tell me there’s no reason why NYC Mesh can’t succeed. Guifi.net is believed to be the largest mesh network in the world—it’s an autonomous, free, community-owned network that has roughly 30,000 nodes located all over Spain. In Cuba, an illegal mesh network called SNet has flourished, allowing people there to play games and exchange files on a local network (Cuba’s access to the “real” internet is severely limited by the government). Isaac Wilder and the Free Network Foundation, meanwhile, have open sourced tools to start small networks around the US.

Jinyang Li, a New York University professor who helped develop early mesh networking technology, told me there simply hasn’t been much interest in mesh networking in the United States so far.

“Mesh networks have been the only choice for people in a lot of developing economies,” Li said. “I think in the United States the infrastructure has been so good, so there hasn’t been incentive to build these networks, but there’s no reason it wouldn’t work.”

As people become more and more fed up with monopolistic ISPs, there’s growing sentiment that there must be another way.

“Everyone seems to hate Time Warner, that’s the thing that unifies the city,” Hall said. “It’s going to be a while before we replace Time Warner, but there’s some hope of it happening.”
https://motherboard.vice.com/read/ho...ernet-monopoly





1 in 3 Home Routers Will be Used as Public Wi-Fi Hotspots by 2017

Juniper Research predicts that at least 1 in 3 home routers will be used as public Wi-Fi hotspots by 2017, and that the total installed base of such dual-use routers will reach 366 million globally by the end of 2020.

The research noted that these so-called ‘homespot’ routers essentially create two wireless networks separated by a firewall: one network is for private use whilst the other is offered as a public Wi-Fi hotspot by the broadband operators.

Major broadband operators such as BT, UPC and Virgin Media in Europe and several of the biggest cable TV operators in the US such as Comcast and Cablevision have adopted the homespot model as a low-cost way of rapidly expanding their domestic Wi-Fi coverage.

The research pointed out that the rapid expansion of Wi-Fi in this way is also giving rise to a number of global Wi-Fi aggregators such as iPass, which leases its network on a wholesale basis to such as telcos, cable operators and corporate customers.

Security and privacy concerns

The research argued that broadband services were not necessarily making it clear to consumers that their home routers were in effect supporting public Wi-Fi initiatives. It cautioned that when consumers become aware of this dual-use, there was the real possibility of a backlash.

“While most operators now allow consumers to opt-out, if they so wish, most consumers simply have no idea that their routers are being used in this way,” said research author Gareth Owen. “Given the current concerns around privacy and data security, the realisation that home routers can be accessed by complete strangers is unlikely to be viewed in a positive light.”

Nevertheless, the research highlighted the consumer benefits that the policy offers, such as free or reduced-fee access to the operator’s homespot network.
http://www.net-security.org/secworld.php?id=19375





Kentucky to Build 3,400-Mile State-Owned Broadband Network – and a Fight is Brewing

Bonkers bluegrass broadband backbone battle brings bundled bluster, boisterous bickering
Shaun Nichols

Yet another US state is weighing up the idea of laying thousands of miles of cable to create its own broadband network.

The Lexington Herald-Leader reports that a group of telcos are pushing back against a proposed $324m network involving 3,400 miles of cabling, which would cover 120 counties in the state.

The construction phase of the project is tentatively set to be completed by the Fall of 2018, with a private company building and maintaining the state-owned network.

The Kentucky broadband plan would deliver a backbone network throughout the state, including the rural and mountainous regions that make up much of Kentucky's terrain. Known as KentuckyWired, the publicly owned network would operate as a "middle mile" network, with local ISPs linking up individual homes and offices.

Much like neighboring West Virginia, Kentucky hopes that operating a backbone at the state-level will help bring high-speed, reliable broadband service to numerous areas of the state where commercial carriers have been unwilling or unable to lay down the thousands of miles of cable across sparsely populated areas.

Also much-like the West Virginia plan, Kentucky's state-funded network effort is hitting stiff opposition from cable companies operating in the state. According to the Herald-Leader, the telcos have banded up with small-government advocacy groups to oppose the network, arguing the backbone is unnecessary and would create a state-funded agency that would directly compete with private companies who already offer service in the state.

The Kentucky debate is one of dozens taking place throughout the US over the construction of municipal broadband networks. While city and state governments argue that building their own networks is necessary to overcome sparse coverage and slow internet speeds, ISPs counter that state-run networks waste taxpayers' money and hamper the growth of private business.

The debate has even grown to ensnare the federal government, with the FCC finding itself in the middle of the debate over whether municipal network efforts supersede state competition laws.
http://www.theregister.co.uk/2016/01...etwork_debate/





Ignoring Cable Industry Protest, FCC Says it Will “Unlock the Set-Top Box”

Cable TV customers could save a lot of money on set-top box rental fees.
Jon Brodkin

Pay-TV providers would have to make video programming available to the makers of third-party devices and software under a proposal by Federal Communications Commission Chairman Tom Wheeler.

The FCC is planning for a software-based, cardless replacement for CableCard. Without needing a physical card that plugs into a third-party set-top box, consumers would be able to get TV channels on tablets, smart TVs, or set-top boxes that they can buy from other companies instead of renting a box from a cable company.

"Consumers should be able to choose how they access the Multichannel Video Programming Distributor’s (MVPDs)—cable, satellite, or telco companies—video services to which they subscribe," the FCC's summary of the proposal said. "For example, consumers should be able to have the choice of accessing programming through the MVPD-provided interface on a pay-TV set-top box or app, or through devices such as a tablet or smart TV using a competitive app or software. MVPDs and competitors should be able to differentiate themselves and compete based on the experience they offer users, including the quality of the user interface and additional features like suggested content, integration with home entertainment systems, caller ID and future innovations."

The proposal summary says the goal is to "unlock the set-top box."

As we previously reported, Comcast and other pay-TV providers wanted a far more restrictive framework that would involve cable companies building their own apps for third-party devices. Consumer advocates and device makers pushed a proposal to give third parties access to TV content and information, allowing them to build their own user interfaces that could be better than ones cable providers offer.

While Wheeler's plan hasn't been fully detailed, it appears to reject the cable companies' proposal and give consumer advocates and device makers most of what they asked for.

Customers would still have to buy TV service from a cable, telco, or satellite firm. But just as mobile broadband customers can choose from many smartphones to use on a wireless network, pay-TV customers should be able to choose what device they watch TV on, an FCC official said in a phone call with reporters. FCC officials say the software-based successor to CableCard should be more successful in giving consumers a choice.

Few choices for cable TV customers

Under the CableCard system, 99 percent of customers still rent set-top boxes directly from their providers and pay an average of $231.82 a year in rental fees, US senators found in a survey of TV providers last year. Lack of competition in the set-top box market has resulted in prices rising much faster than they do in other hardware markets, an FCC official said.

Wheeler wants TV providers to give third parties access to three main categories of information and content: information about what programming is available to consumers, including channel listings and video-on-demand; information about what a device is allowed to do with that content, such as recording; and the video content itself.

This would allow device makers or app makers to make each customer's TV programming available in new interfaces with innovative menus and comprehensive search functions. It could also help consumers avoid expensive set-top box rental fees. Potentially, devices like the Apple TV or Chromecast could provide traditional pay-TV content alongside online streaming video.

The FCC is not mandating a specific standard that pay-TV operators would have to use to make video information and content available. Instead, TV operators would be able to use "any published, transparent format that conforms to specifications set by an independent, open standards body." FCC officials chose not to require a specific standard because they expect technology will evolve, they said.

An FCC official denied a cable lobby claim that MVPDs will have to build new devices capable of distributing TV content to third-party devices in customers' homes. Cable companies also argued that open access to pay-TV content would let builders of third-party devices "rearrange, exile, or drop channels and overlay ads and drop apps and interactive elements that are parts of MVPD service."

Wheeler's proposal requires copyright protection and distribution agreements to be honored regardless of which device content is viewed on. Any device or software that presents pay-TV content must also follow rules on emergency alerts, privacy, and children's advertising restrictions, the FCC said.

FCC officials pointed out that consumers who like their existing set-top boxes can keep them and that TV providers don't have to make any changes to their own offerings. "The proposal does not change a company's ability to package and price its programming to its subscribers," the FCC said. Similarly, content distribution deals between MVPDs and programmers would not be affected by this plan. "MVPDs retain their customers and will still get a monthly fee for the subscription service that the MVPD provides," the FCC said. "The only change the FCC is proposing is to allow consumers alternative means of accessing the content they pay for."

Customers shouldn’t be “captive to bloated rental fees forever”

There's no word yet on when the FCC will vote on Wheeler's proposal.

The consumer advocates' proposal was more specific than Wheeler's in terms of what technologies should be supported, Public Knowledge Senior Staff Attorney John Bergmayer told Ars. But Public Knowledge is generally happy with Wheeler's proposal.

"The other side doesn't even want to have the FCC look at this issue, since their current practices are so unpopular," Bergmayer said.

US Sen. Edward Markey (D-Mass.) is also pleased. "I commend Chairman Wheeler for his proposal to help ensure that consumers are not captive to bloated rental fees forever," a Markey statement said. "Consumer choice should fuel the video box market, not cable company control. In the 21st century, consumers should be able to choose their set-top box the same way they choose their mobile phone.”
Opponents think this will violate the First Amendment somehow

Wheeler's proposal will face opposition from cable companies and advocacy groups that are sympathetic to the industry. Free State Foundation President Randolph May argued that the set-top box market is already competitive and that the FCC proposal would violate the First Amendment.

"It's clear that government prescription of navigation device content, which is what the FCC will do as it determines acceptable presentation and menu formats and the like, violates the First Amendment free speech guarantee," May claimed. "This won't likely concern the Commission, but it should concern all those who care about keeping the government from dictating speech content and who respect the First Amendment."
http://arstechnica.com/business/2016...on-any-device/





Aereo Founder Takes on ISPs with Millimeter Wave Wireless Internet

Starry aims to deliver broadband-level wireless internet to your home with tech used by the military.
Devindra Hardawar

Aereo dared to take on the broadcast industry by streaming over-the-air TV channels on the internet -- that is, until the Supreme Court ruled that its technology was illegal. Now that company's founder, Chet Kanojia, is taking on yet another established industry: Internet service providers. Today at a New York City launch event he unveiled Starry, the first consumer company to use millimeter wave technology to deliver wireless internet access. Up until now, that's been a technology mainly used by the military for radar and other purposes.

Kanojia claims Starry's network, which runs in the 38Ghz unlicensed wireless band, will be able to deliver gigabit speeds to homes wirelessly for far less than traditional broadband. There also won't be any data caps. It will start beta testing its network around Boston this summer.

The company's equivalent to cellular towers are active phase array devices it's calling Starry Beam. They can be installed on rooftops and other high vantage points, and they offer a range of between 0.6 and 1.2 miles (or one to two kilometers). Actual internet access will come from leased fiber connections from company's like Level 3. Accessing the network at your home requires a small device that sits right outside your window, dubbed Starry Point, which is like an over-the-air TV antenna.

The company's biggest challenge will be installing enough Beam devices to cover cities -- their range is affected by weather conditions, and their signals can't pass through walls or big obstacles (which is why the Starry Point sits outside your window). Update: When you sign up for Starry's service, you'll receive both a Starry Point and the company's router (more on that below). There's still no word on overall cost, and the company will likely let you continue using your current router if you wish.

"People have historically assumed fiber is the answer at all times," said Kanojia, who agreed fiber would be a great solution for future broadband rollouts if it was government sponsored. But without that, he believes Starry's technology is the best way to deploy scalable broadband to consumers.

Starry is targeting both traditional ISPs and cellular carriers when it comes to home broadband. During the launch event, Kanojia listed some familiar stats: 70 percent of Americans have no choice when it comes to their home ISP, while 20 percent don't have any access to broadband at all. Meanwhile in cellular land, there's plenty of competition, but pricing and data caps aren't feasible for dedicated home internet. By relying on high-frequency millimeter radio waves, Starry is able to deploy its network to far more easily than wired broadband providers and offer access at a much lower cost than wireless carriers.

The company plans to roll out a suite of products to connect to its future wireless network, all of which you'll be able to install on your own. The first is a stylish new touchscreen WiFi router, dubbed the Starry Station. Its pyramid-like design is a huge departure from typical router design (which Kanojia described as being like upside-down dead spiders), and it'll also give you details about your internet's health.

Starry Station offers 802.11ac WiFI as well as 802.15 support for Internet of Things products. You can order it for $350 on Starry's site and Amazon, and the company plans to start shipping it in March. There's also a WiFi extender, Starry Wing, planned for this summer.

Sure, Starry sounds amazing on paper, but there's still plenty we don't know about its service. We don't have any pricing details yet, and the company still needs to test large-scale deployments. The underlying technology behind Starry isn't new -- the military has been using it for decades -- but it's never been used for a widespread consumer product before. Starry has the potential to be as groundbreaking as Aereo, I'm just hoping it sticks around longer.
http://www.engadget.com/2016/01/27/a...less-internet/





Stanford Study: T-Mobile's Binge On is 'Likely Illegal'
James Vincent

The debate over the potential harm of T-Mobile's Binge On continues, with a new study from Stanford University claiming that the perk violates key net neutrality principles and is "likely illegal." Binge On lets T-Mobile subscribers watch videos from streaming services such as Netflix and Hulu without eating into their data plan. It's proved popular with users, with T-Mobile claiming video views on its network have "more than doubled" since the deal was introduced, but critics say it's creating a tiered internet service, with the Uncarrier given the unfair advantage of deciding who wins and who loses.

"T-Mobile’s Binge On is aptly named — it feels good in the short-term but harms consumers in the long run," says Barbara van Schewick, the net neutrality expert and law professor who authored the Stanford study. "The program limits user choice, distorts competition, stifles innovation, and harms free speech on the Internet. If more ISPs offer similar programs, these harms will only grow worse."

Schewick's paper collects together many of the primary arguments against Binge On, including the allegation that it constrains consumer choice, penalizing customers who want to use unsupported rival services. For example, Binge On supports Vevo TV for watching music videos, but doesn't make YouTube or Vimeo available; it supports Ustream for live-streaming video, but not Meerkat or Periscope. The study also suggests that technical requirements to sign up to Binge On are more complicated than T-Mobile claims, and that the carrier is tilting the playing field to the advantage of larger firms.

"Binge On allows some providers to join easily and creates lasting barriers for others, especially small players, non-commercial providers, and start-ups," writes Schewick. She says that if other ISPs and carriers start offering similar promotions and picking their own zero-rated services, it will "end the era" of "innovation without permission" online.

However, supporters of Binge On do have retorts available. For example, Schewick cites Amazon Prime Video as an example of a prominent video provider that isn't available on Binge On, but T-Mobile actually added the service just yesterday. It's only a single point in what is a wide-ranging and quite subtle debate, but T-Mobile's CEO John Legere would claim that examples like this show how Binge On can be good for everyone — consumers and companies alike.

What happens next, though, is up to the FCC. In 2015, the agency introduced its Open Internet order to protect net neutrality, but it's not clear whether T-Mobile's deal breaks these rules. This legislation includes three "bright-line" rules which companies cannot cross (they can't block content, create fast lanes, or throttle data — although T-Mobile is also accused of that), but the issue of zero-rating is treated more ambiguously, with the FCC saying it will evaluate complaints on a case-by-case basis. Evidence such as Schewick's will be crucial in deciding whether T-Mobile is at fault.
http://www.theverge.com/2016/1/29/10...likely-illegal





The Epic Fail of Hollywood’s Hottest Algorithm

When Ryan Kavanaugh wasn’t hanging out with Bradley Cooper, or leasing a horse for Kate Bosworth, or negotiating a Golden Globes shout-out from Christian Bale, or bringing a baby wolf to the office, he was talking up the sweetest game in Hollywood: the chance to invest in movies that seemed certain to succeed.
Benjamin Wallace

In an industry where no one knows anything, here, finally, was someone who seemed to know something: Ryan Kavanaugh, a spikily red-haired man-child with an impish grin and a uniform of jeans and Converse sneakers who had an uncanny ability to fill a room and an irresistible outlook on how to make money making movies. Not yet 30 when he founded Relativity Media in 2004, he very quickly became not only a power player in Hollywood but the man who might just save it. With a dwindling number of studios putting out ever fewer movies, other than ones featuring name-brand super#heroes, Kavanaugh became first a studio financier and then a fresh-faced buyer of textured, mid-budget films. To bankers, Kavanaugh appeared to have cracked the code, having come up with a way to forecast a famously unpredictable business by replacing the vagaries of intuition with the certainties of math.

Even Hollywood wasn’t used to a pitch this good. Kavanaugh alternately dazzled and baffled — talking fast, scrawling numbers and arrows and lines on whiteboards, projecting spreadsheets. “You get caught up in the enthusiasm,” a former colleague says of Kavanaugh’s powers of persuasion. “It’s like trying to analyze love. I know that sounds absurd. This guy’s charisma is really that good.”

Kavanaugh knew when to turn on the language of Wall Street, speaking of financial modeling and risk mitigance and calling films “widgets.” He also knew when to turn it off and shower East Coast bankers with the soft currencies of the movie business: the poolside tables at Chateau Marmont, proximity to celebrities. He was “the ringleader of having a good time,” in the words of one business partner, and his friendships with Bradley Cooper and Leonardo DiCaprio, his private-jet trips with actresses Kate Bosworth and Natalie Portman, his showstopping charity pledges and #restaurant-silencing tips — all of this became part of the sale, further proof of his success. Later, when Relativity’s fortunes turned, the helicopters and grand pronouncements and inclusion on the Forbes billionaires list became still more essential to perceptions of Kavanaugh, as much as they started to #suggest a departure from reality.

And even now, with Kavanaugh struggling to rescue Relativity from bankruptcy and increasingly resembling a false prophet, his disappointed followers as well as his most bilious antagonists allow that the studio mogul is one of the greatest salesmen Hollywood has ever known. “He’s unlike anything we’ve seen in a long time,” says Jon Schwartz, a former Relativity executive, who fondly recalls meeting with producer Al Ruddy about a remake of Cannonball Run: “At the end of the meeting, after Ryan leaves, Ruddy says: ‘I have no idea what just happened, but I feel really good about it.’ ”

Jim Wiatt, who at the time was the head of the William Morris agency, recalls the day around 2003 when Kavanaugh first revealed his big plans. “He told me the idea for Relativity,” says Wiatt, who later joined its board. “I remember saying, ‘Jeez, how are you going to pull that off?’ ”

Kavanaugh had spent his 20s building a venture-capital firm with his father in Los Angeles, an experience that was financially unsuccessful but taught him how to raise money and manage the egos of Hollywood potentates. His first act in the film business was to use that experience to broker deals between Wall Street and the studios: He teamed up with Lynwood Spinks, a former executive at the defunct independent studio Carolco whose wide network of industry contacts made up for Kavanaugh’s youth. It was Kavanaugh, though, who had a nose for the shifting demands of the moment. Studios, newly conglomeratized and recently bereft of a favored German tax shelter, were looking for fresh ways to fund movies and hedge risk. Meanwhile, Wall Street’s bubble was reinflating, and alternative asset classes —franchise rights to restaurants, royalties from drug patents — were the rage. In the market’s frothiness, Kavanaugh spied opportunity.

Because the performance of any one movie is unpredictable, studios have always managed risk by betting on an entire slate of films. But Kavanaugh presented banks with a couple of big ideas: Borrowing a tool from Wall Street, he touted his “Monte Carlo model,” a computer program that runs thousands of simulations, as a device that could predict a film’s success far more reliably than even a sophisticated studio executive. Better, Kavanaugh convinced several studios that he could raise more money for them if they gave him access to their guarded “ultimates” numbers showing the historical or projected performance of a film across all platforms (DVD, video-on-demand, etc.) over a number of years.

If, for instance, a studio was planning to make an Untouchables prequel starring Nicolas Cage and Gerard Butler and directed by Brian De Palma, Kavanaugh posited that he could evaluate the potential investment by plugging scores of historical-performance variables into his model, from Cage’s average global-box-office grosses in a particular genre to De Palma’s track record within a particular budget range. Applying this analysis across a studio’s entire slate, he could theoretically cherry-pick the winners and channel investors’ money into those alone.

Soon, glossy magazines were painting Kavanaugh as a nerdy math prodigy reigning over a “geek squad,” crunching numbers in “marathon overnight sessions” in which four linked computers would spit out hundreds of pages of analysis. And within a few years, he had funneled billions of dollars from banks and investment funds into Holly#wood. He brokered a $525 million revolving loan by Merrill Lynch to Marvel Entertainment and $264 million in co-financing by Wisconsin hedge fund Stark Investments for six Warner Bros. movies. For Kavanaugh’s first slate fund, Gun Hill 1, he raised $600 million through Deutsche Bank to co-finance 18 movies at Universal and Sony. Other slates followed.

Relativity was paid a fee of $1 million per film in each slate, and Kavanaugh shrewdly insisted that he receive an executive-producer credit for each of the dozens of films being financed, which gave Relativity the aura of a production company and Kavanaugh that of a producer. He nurtured this impression, referring to Sony’s The Social Network and Universal’s Atonement as “Relativity films.” And now that he was Hollywood’s favorite type of person — a check-writer, or at least a check-writer’s representative — producers started bringing individual movies to him in the hope that he could line up financing. One of the first of these, 3:10 to Yuma, was well reviewed and a box-office hit when it opened in September 2007. A Variety article published the next month reported that Gun Hill 1’s investors would initially make a 13 percent internal rate of return, which would rise over the next five years to 18 percent. Kavanaugh was already prepared to be generous with his success. At a Habitat for Humanity dinner that November, he revealed that he would donate $1 million and become chair of the organization’s fund-raising campaign.

Then Kavanaugh did what every person who has ever started out in Hollywood as a financial middleman does: He decided to make movies himself. And why not? Earning a $1 million fee for every film on someone else’s slate was solid business but hardly exciting. If he could harness the same algorithm that had predicted 3:10 to Yuma’s future — Russell Crowe + Christian Bale + sagebrush and six-shooters = No. 1 on opening weekend + 89 percent Rotten Tomatoes score? — to make Relativity’s own movies, and if he assembled his own studio around them, he could make real money. The studio system was broken, he liked to say, and he knew how to fix it: Where studios were fat, Relativity would be lean; where studios were obsessed with can’t-fail tentpoles, Relativity would gamble on quality movies. Relativity would hedge its risks elsewhere, by covering much of a film’s budget through foreign presales and shooting-location tax credits and aligning Relativity’s incentives with actors’.

Kavanaugh proved as effective at raising money to launch his own studio as he was at financing other studios’ movies. In fact, he landed as sophisticated an investor as anyone could imagine: Elliott Management, the hedge fund founded by Paul Singer, one of the Republican Party’s largest donors. Elliott had already taken a small position in Gun Hill 1, and a senior director at the firm, Chuck MacDonald, was impressed by Kavanaugh’s business model — in particular, the fees it took regardless of how the underlying assets performed. (In this sense, Relativity was operating like a hedge fund itself.) Elliott knew that Kavanaugh wanted to build out his own studio, but the firm was reassured that his proprietary methodology and risk-hedging model would ensure that the company delivered a steady stream of “singles and doubles.”

By the end of 2008, according to a source close to Elliott, the firm had paid $67 million for 49.5 percent of Relativity, and Kavanaugh quickly made a series of smart, opportunistic deals. He scooped up New Line’s long-term foreign-distribution arrangements, which meant as much as 50 percent of a Relativity film’s budget would be covered in advance. Relativity made a lucrative deal with Netflix and acquired Overture, a domestic theatrical-distribution company, for little more than its overhead. The studio launched TV and music divisions, and Elliott provided over $100 million in loans with which Relativity could fund individual movies. (These and other figures in this account are disputed by Relativity.)

For many who worked at Relativity, the excitement of being in Kavanaugh’s orbit outweighed the unusual tasks they were sometimes assigned. In 2010, after Relativity’s The Fighter was released, Kavanaugh was denied one of the three Producers Guild credits that entitle one to ascend the stage in the event of a Best Picture Oscar win. The credited producers argued on Kavanaugh’s behalf, but as he appealed the decision, former Relativity executives say that staff were also ordered to construct a phony paper trail, submitting notes on a rough cut of the film from president of production Robbie Brenner and a timeline of company #president Tucker Tooley’s set visits and production meetings as if they were #Kavanaugh’s. Though the appeal was denied, Kavanaugh was able to engineer a consolation prize on the night of the Golden Globes, where The Fighter had six nominations. As Christian Bale accepted the award for Best Supporting Actor, he said, between thank-yous, “Ryan,” pointing at Kavanaugh, who was sitting at a table near the stage. “That was a deal we just made,” Bale continued. “I’d announce him personally. Ryan from Relativity.”

The Fighter resonated with Kavanaugh. “I don’t know if you know my history,” he told Movieline, likening himself to Mark Wahlberg’s underdog boxer in the film, “but before Hollywood I was down and out and told, ‘You’ll never make it in this town.’ ”

Kavanaugh’s own story wasn’t quite the tale of an orphaned bootblack. His mother, Leslie, a graduate of Beverly Hills High, was a successful Realtor with Sotheby’s; his father, Jack, was a highly educated entrepreneur; and Ryan graduated from the Brentwood School. But in the Kavanaugh home, wealth mixed with anxious aspiration in a way that wouldn’t be out of place in the family albums of many Hollywood movers and shakers. Jack Konitz, the son of Holocaust survivors, had changed the family name to Kavanaugh and, in a bit of lily-gilding, named his firstborn son Ryan Colin Kavanaugh. Leslie was a redhead, and as Ryan grew into a freckly, ginger-haired child, the name fit.

Jack Kavanaugh cast a long shadow. He was quick to tell new acquaintances that he was fluent in nine languages, could bench-press 565 pounds, and had an IQ of 180. Having begun his career as a dentist, he later acquired both an M.B.A. and an M.D. Jack and Leslie were overtly proud of Matthew, Ryan’s tall and handsome younger brother, but “no matter how much Ryan did, it was never enough,” says someone who knew him in his younger days. The pressures at home bled into his school life. “Ryan was known for a few things,” a Brentwood classmate recalls. “He had major attendance issues. He had serious anxiety. And he had a reputation for being—a pathological liar is probably too strong a word. He was big into falsehoods.” Ryan briefly attended UC Santa Barbara before transferring to UCLA; he took part in the 1998 commencement ceremony and for years would call himself a graduate, but he did not receive his degree until 2012.

It would be with his father, however, that Ryan made his first big entrepreneurial gambit, parlaying tangential connections into a venture-capital business. Jack’s brother Russ had done construction work for the producer Jon Peters, and as a teenager, Ryan took to hanging out at Peters’s house and, later, day-trading for him. The nasdaq was rising, and Jack told at least one investor that he and Ryan had developed a computerized formula that would cap losses. Ryan worked hard to impress clients: Once, he considered renting a Ferrari before going to meet with a potential investor.

It worked. By the time Ryan was in his mid-20s, he and his father had managed, with the help of the then-powerful Peters, to persuade some of Hollywood’s most prominent figures, including Warner Bros. boss Terry Semel, Columbia/TriStar CEO Mark Canton, Batman producer Chuck Roven, and producer Jerry Bruckheimer, to invest what a colleague from that time estimates to have been $175 million in a variety of funds and start-up companies, including a prepaid-credit-card business named PreNet. Ryan was briefly married to Tracy Tanner, a makeup artist eight years his senior, and he bought a $3 million house in the Hollywood Hills.

After the dot-com deflation began in March 2000, Kavanaugh’s investors started asking for their money back, and Kavanaugh became hard to get ahold of. On 9/11, he phoned the office to say he was in Boston and lucky to be alive, having missed Flight 11 because of a medical emergency in his girlfriend’s family (an account the girlfriend confirms). A week later, at the Peninsula Hotel in Beverly Hills, more than 100 concerned shareholders gathered to hear from PreNet chairman John Chaney, who spoke of how the company never received millions of dollars Kavanaugh’s fund was supposed to invest in it. (This allegation was also included in an investor’s lawsuit against Kavanaugh that was later filed and settled out of court; it is disputed by Relativity.) Kavanaugh wasn’t there, but his parents were, and one lawyer who rose to speak addressed them directly: “You’re lucky your son isn’t walking around in striped pajamas.”

At least eight of the investors sued Kavanaugh, alleging fraud, and the cases were eventually resolved without trial. Michael Sitrick, a hard-nosed crisis-p.r. adviser who had put $6.2 million in a fund that Kavanaugh had assured him would own a diversified basket of public stocks, sued for negligence after learning that 50 percent of the fund was already invested in PreNet and another private company in which Kavanaugh had a controlling stake, and that case went to arbitration. The arbitrator noted in his ruling that Kavanaugh had been “clearly negligent” and had tried to deflect blame onto others, and awarded Sitrick $7.7 million against Kavanaugh personally. The award was confirmed by a court, but after Kavanaugh swore he had no more than $100,000 in assets, Sitrick agreed to release him from the judgment in return for Kavanaugh cooperating with Sitrick’s efforts to recoup his losses from his insurance company.

It isn’t easy to emerge from your late 20s with the mangled reputation Kavanaugh had among the Hollywood elite, and, by the time you are 30, be structuring financing deals for Section Eight, George Clooney and Steven Soderbergh’s now-defunct production company. Throughout Relativity’s early days, there were sporadic reminders that Kavanaugh’s posture as a prudent, numbers-minded outlier in Hollywood was recently assumed and that his talents lay more in sales than in operations. Some took the form of flashbacks, such as when Sitrick moved to reopen the settlement of the case, unsuccessfully alleging that Kavanaugh had concealed assets.

Other demonstrations played out in real time. Relativity actually did look at whether to finance that Untouchables prequel, Capone Rising, with Nicolas Cage and Gerard Butler attached to star and Brian De Palma to direct. The company ended up passing, but someone close to the financial modeling recalls doing a double take at the rosiness of the Relativity algorithm’s prediction. “I read the input log for it. I thought: What’s missing? I said, ‘Where’s Snake Eyes?’ ” — a Cage flop. “They said, ‘Uh, we’re leaving that out.’ ”

On the night of the Golden Globes in January 2011, #Kavanaugh beamed as he and Harvey Weinstein, whose Weinstein Company had co-financed The Fighter, threw what a former Relativity executive calls a “multimillion-dollar” after-party. As the Moët flowed in the tented garden of the Beverly Hilton, a Relativity employee noticed that Gordon Singer, a son of Elliott founder Paul Singer who was visiting from London, was alone in a corner at the party. “I know he’s paying for all this,” the employee recalls, “and I can’t for the life of me imagine why he’s being allowed to stand by himself. I go over and we have a drink. He says, ‘Let me ask you a question: Is all this necessary?’ ”

At first, the premise of Elliott’s investment had panned out: A steady stream of fee income continued to come in while Kavanaugh built his new studio. Kavanaugh became prone to claims about how big Relativity was: Elliott had put “$1 billion” into Relativity. Relativity had made “$2 billion” in revenues in both 2009 and 2010. There was an idiosyncratic logic to some of this math: If Relativity had brokered a $500 million investment between third parties, say, Kavanaugh would lump that $500 million into his tally of Relativity revenue. Or he would count extremely sunny projections as current revenue. He was also enabled by the trade press; Variety put him on its cover with the words billion dollar producer.

It didn’t hurt Elliott for one of its assets to appear larger than it was, and Elliott likewise tolerated the kerfuffles that would arise — like when, lobbying the Hollywood Foreign Press Association for a Golden Globe for Brothers, Kavanaugh ran afoul of its rules by trying to give its members Blu-ray players, or when he was arrested for the second time on a DUI charge (the first time, he had allegedly sideswiped a police cruiser in Malibu and fled the scene; after the #second, which was dropped as part of a plea deal, he took to using a driver).

Once Relativity started funding its own movies and was itself on the line for Kavanaugh’s talent at predicting successful movies, Elliott’s investment became a lot riskier. And most of Relativity’s movies, forgettable when not memorably bad, performed unimpressively at the box office. Remember The Spy Next Door? How about A Perfect Getaway? By early 2010, with a full year of films to assess, it was clear to Elliott that there was a significant mismatch between Kavanaugh’s model’s projections and the actual performance of the films. The bombs would continue. The Warrior’s Way, a martial-arts spaghetti Western that cost $42 million to make, brought in $5.7 million in U.S. theaters. Machine Gun Preacher, a passion project of Kavanaugh’s friend Gerard Butler, took in $539,000 domestically. Kavanaugh routinely said that “85 percent” of Relativity’s movies were profitable, but the bottom line, according to a source close to Elliott, was that these were “not movies that are making money.”

The slate funds didn’t do well either. Gun Hill 1 was a debacle for equity holders. (By the end of 2012, according to audited financial statements, the fund showed a net loss of $315 million.) One investor in Gun Hill 2 saw its stake of more than $50 million completely wiped out. A third slate, Beverly 1, was shut down early. Beverly 2, a fund established specifically for Elliott to co-finance Universal’s movies, fared disastrously. (Elliott would reportedly later go into arbitration with Universal over the studio’s accounting.)

Meanwhile, once-lean Relativity had packed on pounds. Every new asset required staff to run. Kavanaugh had three assistants, a private-jet habit, and also a penchant for making lavish gifts to actresses, including leasing a horse for Kate Bosworth for six months so they could ride together and buying a rare, $65,000 edition of The Diary of Anne Frank for Natalie Portman. A dining partner recalls a meal at Ago where Kavanaugh added, to the $3,500 bill, a $20,000 tip. (A Relativity spokesperson denies this.) Kavanaugh’s expenses, indulged in good times, were becoming harder to justify. By early 2010, Elliott had decided to exit the investment soon after bankrolling Relativity’s most expensive film to date: The Immortals.

Internally, Kavanaugh spun the Elliott divorce as a milestone. “It was put as: ‘We’re moving on,’ ’’ an executive recalls. But in fact, Relativity was in a corner. Kavanaugh had been crowing publicly about an imminent investment by JP Morgan Chase, but CEO Jamie Dimon told his bankers in Los Angeles that JP Morgan would never buy equity in Relativity given that it didn’t deem the studio creditworthy even for senior debt. In the end, Relativity only managed to release the films it already had in the can with the help of a lending fund at Colbeck Capital backed by investor Ron Burkle. And what appeared to be merely a change in backers glossed over a profound shift in Relativity’s financial health. To extract itself from Elliott, the #company had become saddled with hundreds of millions of dollars in high-interest loans. Now the studio needed its model to work not simply to generate attractive investor returns but to produce enough cash to avoid defaulting on its obligations.

After Immortals, Relativity put out a burst of films — Limitless, Act of Valor, Safe Haven — with relatively high grosses. But a growing number of powerful people in Holly#wood would no longer do business with Kavanaugh, who had developed a reputation among some producers for welshing on deals. Shortly before the Relativity movie Mirror Mirror went into production, Kavanaugh told Brett Ratner, who’d brought him the film and been promised a $1.5 million fee, that Relativity would pay him only half that amount. Ratner acquiesced after Kavanaugh told him Relativity would give him a $5 million overall consulting deal, but Ratner ended up not receiving the overall deal.

And Kavanaugh was increasingly distracted by matters not directly related to the running of Relativity. There was a quixotic campaign to build a $400 million film-production facility in Hawaii, which arose after Kavanaugh got red-tagged for unpermitted construction at his Maui vacation home and went to the #county’s mayor seeking to make a deal for the needed permits. In L.A., he had recently obtained his commercial-helicopter-pilot’s license (“faster than anyone else,” as he liked to say, to some passengers’ alarm), and taken to aero-commuting from his Malibu home. In the fall of 2010, according to several Relativity sources, he spent months fighting to preserve a deal he’d made with the Sofitel near Relativity’s offices to land his helicopter on its roof, which was normally reserved for emergency landings. His efforts included having Relativity take a long-term lease on a six-story billboard affixed to the side of the hotel, and Kavanaugh’s taking a suite there, before the California Department of Transportation finally banned the landings.

Kavanaugh wasn’t coming to the office on Beverly Boulevard as much, preferring a 20,000-square-foot hangar at Santa Monica Airport that Relativity paid the lease on. Besides it serving as Kavanaugh’s office, the hangar housed a luxury RV, huge sectional sofas facing big movie screens, exotic cars, old arcade video games, a boxing ring, a climbing wall, and an archery range.

The hangar was also convenient, as Kavanaugh now spent much of his time flying around the world seeking new investors to relieve Relativity’s debt burden. He announced a joint venture with a distributor in China, but he spent more time there looking for money. “He’d just live there, push himself like a crazy person, meet with everyone, keep the jet in China six, eight weeks,” a colleague recalls. “There wasn’t a hand in China he wouldn’t shake. The wining and dining was epic.”

In 2012, according to sources close to Relativity’s lenders, the company lost $85 million on $331 million in revenues. In 2013, it lost $135 million on revenues of $379 million. In 2014, it lost $118 million on revenues of $507 million. This was a difficult environment in which to raise money, but valuation was for Kavanaugh a creative medium. He would often offer a prospective investor some side deal, such as distribution rights in the investor’s territory, to get them to publicly buy into a high valuation. “Every deal came with some cherry on top,” an executive recalls. “We didn’t do clean equity deals, ’cause no one would do one.”

Some offers never sold, like a chance to join a $1 billion raise in what Kavanaugh called a “pre-IPO placement,” anticipating a near future when Relativity would be a public company valued at up to $10 billion. Kavanaugh’s aspirational arithmetic also put him in a bind when buyers did make genuine offers. The one solidly profitable part of Relativity was its mostly unscripted TV division. In 2014, Kavanaugh told investors he’d received several offers in excess of $100 million for the division, but he’d turned them down because he believed it to be worth several times that amount. (Also: Making the loan payments would have been all the more difficult without it.)

But the increased financial pressure did not temper Kavanaugh’s instinct for growth. Relativity kept launching new divisions — Relativity Digital Studios, Relativity Middle East, a “branded entertainment agency” called Madvine, Relativity Education (a high school). In the spring of 2014, Relativity made an unsuccessful “$1 billion” all-stock spoiler bid for Maker Studios, a network of YouTube channels that had already received a $500 million cash offer from Disney. “They all seemed like additional successful revenue streams that could potentially save the core business,” a film-division ex-employee says. “But if you don’t have your core business in line, nothing’s going to save it.”

Kavanaugh had an expanding view of his own place in Hollywood, too. Deepening his and Relativity’s philanthropic involvement, Kavanaugh was fêted by a number of charities and became chairman of the Art of Elysium, a nonprofit organization, popular among celebrities, that sends performers into hospitals to spend time with sick children. He also started giving more talks and keynotes. In a 2014 Variety profile, Kavanaugh likened himself to Mark Zuckerberg and Thomas Edison and again claimed that “85 to 90 percent of our movies have made a profit.” With increasing frequency, he articulated a “next-generation,” “360-degree content engine” vision of how the sum of Relativity added up to more than its parts.

Kavanaugh had, by this point, opened a “family office” called Knight Global, run by his brother, Matthew, out of the hangar, which took stakes in a miscellany of companies, including ones that made hangover patches and vapes. This expanded empire contributed to his landing on the Forbes billionaires list for the first time in 2013, with a purported net worth of $1 billion; two years later, the Los Angeles Business Journal would peg his wealth at $1.6 billion. In 2015, he announced that an investment in a biotech company formed by his father had turned into a $150 million windfall. Talking with Haute Living Los Angeles about his commitment to innovation and philanthropy, Kavanaugh mentioned he was enrolled in a Ph.D. program in physics at USC. (He is not, though the dean of the film school says Kavanaugh has expressed a keen interest in physics.)

Last March, a thicker, bearded #Kavanaugh was wed for the third time (he’d briefly been married to a dancer named Britta Lazenga), marrying a South African swimsuit model named Jessica Roffey in a small ceremony on the beach in Malibu. At the larger reception, attendees were required to wear all black, and they received samples of the hangover patch and the vape pen. Aerosmith’s Steven Tyler, a Maui neighbor of Kavanaugh’s, sang “I Don’t Want to Miss a Thing” for the first dance, and a barge offshore spangled the night sky with fireworks. Less than two months later, readers of “Page Six” learned that Ryan and Jessica Kavanaugh had a baby on the way, to be named after the Russell Crowe #character in Gladiator: Maximus.

To work at Relativity in the last several years was to live in the palace of a magical-realist king. Visitors to Kavanaugh’s private bathroom in the Beverly Hills office were often taken aback to find that his toilet paper featured the face of Barack Obama. Kavanaugh would zoom around the hallways on a Razor scooter and later on a Segway. Later still, a Segway with a two-way video screen mounted on it patrolled the halls; Kavanaugh could control it remotely to communicate with employees when he was away from the office. After Kavanaugh heard from Bradley Cooper about working with a capuchin monkey on The Hangover 2, Relativity staff were deployed to obtain one for Kavanaugh until research revealed that the animals are illegal to own in California. Eventually, Kavanaugh brought a baby wolf to the office instead. “That was the kind of thing he’d do. Bring a wolf around for a week,” says a former executive who, like most of the people interviewed for this article, would speak only on the condition of anonymity. (Relativity made employees sign nondisclosure agreements. During the reporting of this article, as I spoke to more than two dozen former and current executives and board members, several former executives received letters from the company reminding them of the penalties for violating these agreements.)

Sometimes those in Kavanaugh’s inner circle suspected that strategic business decisions were made for less obvious reasons. Multiple #executives believed, for instance, that the $1 billion spoiler bid for Maker Studios came out of a deal Kavanaugh had made with Danny Zappin, Maker’s ousted CEO. “Had anyone accepted that offer, Relativity couldn’t have made good on it, didn’t want it, wouldn’t have known what to do with it,” one of those executives explains. “But it allowed Danny to go to his former partners and say, ‘I can make it go away if you give me a reasonable settlement.’ Ryan agreed to help fuck up the Disney deal so this kid would get paid and make a Relativity investment. There was a lot of that.” Zappin and Relativity reject the implication of a quid pro quo, and Zappin insists that it was only after the Maker bid failed that he considered (and ultimately passed on) investing in Relativity.

There was also a constant churn of staff at Relativity, as successive waves of employees lost faith in Kavanaugh’s math. “It’s just ridiculous that anyone would even believe it,” says another former Relativity executive. “I can remember after one meeting, he talked so quickly, and he had the numbers and was selling some guy. And the guy left the room. I said, ‘Jesus, Ryan, that was amazing.’ He goes: ‘Wasn’t it?’ He’s a little kid. He’s very persuasive in the moment. But if you had a video and went through it in slow motion, you’d realize those numbers don’t add up.”

Relativity’s films’ performance did not improve. Paranoia, a $35 million–budget film starring Liam Hemsworth, Gary Oldman, and Harrison Ford, tanked with a $3.5 million opening weekend. Out of the Furnace, on a budget of $22 million, ultimately grossed just $11 million in U.S. theaters. Relativity could no longer afford to make enough movies to meet its distribution quotas, so it pivoted to acquiring more. It didn’t have enough money to compete seriously in the space, however, and Relativity’s distributors became increasingly disenchanted, as did people who worked in Relativity’s film division. “We realized there was nothing we can do,” a film executive recalls. “It got negative and dark, like, Why are we reading these scripts and taking pitch meetings?”

Kavanaugh was always on the verge of getting the money Relativity needed, and life at the company became a roller coaster of near misses and 11th-hour saves. Sometimes a cash infusion did arrive — IDG Capital became an investor, as did ex–Goldman Sachs banker Steven Mnuchin — but over and over, it didn’t. In one case, “the Chinese, they were signing agreements, doing ribbon-cutting ceremonies with the head of the bank, and then they never funded,” an executive says. “But they were Chinese. Who knows what they were saying?”

Kavanaugh expected his executives to back up what one refers to as Kavanaugh’s penchant for describing “what he wanted to be true or believed was about to be true.” As the company’s financial performance declined and Kavanaugh’s valuations rose, his executives cringed in silence. “We’ve all sat in the meeting where numbers were put out,” one says. “We’re like, ‘Sports is not worth $700 million.’ ” Kavanaugh’s presentation to investors came to include very particular “adjusted ebitda” numbers, which in this case meant earnings adjusted as if Relativity still owned the film library it had ceded to Elliott. “But they did give their library back,” an investor points out. “It’s like saying: ‘If I had wings, I could fly.’ ”

Essential to Kavanaugh’s pitch was a luster of success, one he worked hard to brighten. According to several people who inspected Relativity’s books, at least $16 million of the company’s $90 million in overhead was directly traceable to Kavanaugh, who in addition to receiving $11.7 million in compensation in 2014 incurred millions more in expenses. His private-jet reimbursements and hotel bills were legendary, like when, according to one former executive, he booked the most expensive suite at the Hotel du Cap-Eden-Roc for two weeks during the Cannes Film Festival, then never used it. Other expenses were less obvious. “For Ryan, expense reporting was an art form,” a former member of his team says. “He realized quickly that rookies charge a lot of stuff to the company.” His beach house in Malibu, during a period when he was trying to sell it, was rented to Relativity Sports to lodge visiting athletes. According to a former executive, Kavanaugh would lease a car for himself at a discounted long-term rate, drive it for six months, then “get bored, gift it to an executive, and charge it to Relativity. These were Ryan cars. Nobody even wanted them.” Tucker Tooley, given a McLaren, drove it for one day before turning it over to Sports for use by its clients. Robbie Brenner, the mother of two young children, received a two-seat Mercedes-Benz SLS.

Kavanaugh continued to pledge large charitable gifts, often billing the company for them later, according to former executives. Between July 2014 and June 2015, Relativity made more than $2 million in donations to 35 charities and foundations. In September 2014, after a spike in global anti-Semitism following Israel’s military action in Gaza, Kavanaugh put out a press release that he was making four $25,000 “personal donations” to four Jewish groups. At least three of these donations appear, from later court filings, to have been paid by Relativity. “Investors were begging him to stop in the final days,” says someone with knowledge of the conversations.

Estimates of Kavanaugh’s own wealth were undermined by his apparent liquidity issues. Staff at the Art of Elysium became frustrated by its chairman’s foot-dragging about honoring pledges he’d made to the organization, and Variety would later report that Kavanaugh had never made good on his $1 million pledge to Habitat for Humanity. (Relativity did ultimately make two donations totaling $35,000.) During a 2012 fraud trial in which a jury found Jack and Leslie Kavanaugh liable for selling a $2 million fake Picasso to a friend (Jack had taken an $800,000 kickback from the gallery dealer who commissioned the painting for $1,000), Jack testified that his son Ryan had recently stopped sending his parents hundreds of thousands of dollars a year.

Within Relativity, the company’s problems bubbled up in ways that became more and more difficult to ignore. In 2013 and 2014, promised year-end bonuses never materialized. Vendors increasingly complained about not getting paid. Most concerning, the film studio stopped making films. Employees noticed, during the production of Masterminds in the summer of 2014, that for the first time no new start dates were being added to Relativity’s production schedule. The company was running out of time. A $316 million debt bill was going to come due in May of 2015.

This past spring, Relativity imploded in slow motion. While the company continued to acquire movies — a lawsuit by one of its lenders would contend that it did so only to use them as collateral to raise marketing funds, which it then diverted to paying salaries — Kavanaugh announced a series of would-be saviors: hedge-fund money, Indian money, Chinese money, Russian money. Financial advisers whom Relativity’s lenders installed at the company to prepare Relativity for bankruptcy were admonished by a Kavanaugh deputy never to use the B-word in conversation with him. Another Relativity executive recalls Kavanaugh bringing a Chinese investor around: “Ryan said, ‘I’m telling you right now, we’re going to turn this company around.’ He was probably a believer until they filed for Chapter 11,” which Relativity did on July 30.

Since then, many of Relativity’s employees have been laid off or have left the company. The fashion division was shut down, the bankruptcy judge ordered the company to stop paying for the hangar, and Kavanaugh’s salary was dropped to $1. A number of Relativity movies scheduled for release, including Masterminds, starring Kristen Wiig, Owen Wilson, and Zack Galafianakis, were suddenly put on ice. When no bidders stepped forward to buy the whole company, a group of Relativity’s largest creditors, led by Anchorage Capital, acquired the television business, the company’s only widely desired asset, for $125 million.

To Hollywood’s more sophisticated power players, Relativity’s declaration of bankruptcy was less intriguing than how long Kavanaugh had been able to stave it off, reeling in money over and over again despite mountains of evidence that the product he was selling was not what he claimed it to be. “You have to give him credit for keeping it going as long as he did,” says an old hand at a major talent agency. “The people inside the system were in on the joke.” Adds a senior studio executive: “I was always amazed. His track record never would have dictated that he’d get that kind of money.”

On February 1, Relativity will ask a Bankruptcy Court judge in lower Manhattan to approve Kavanaugh’s reorganization plan to bring the film division and other surviving assets out of Chapter 11. When the plan was filed in November, it promised that Relativity would raise $100 million in new equity, as well as secure a $250 million loan to fund the release of the films that have been in limbo. To achieve this, Kavanaugh will need to have found investors unversed in his history of extreme optimism. Even if the judge approves the company’s exit from bankruptcy, Kavanaugh will face long odds of success. A post-bankruptcy Relativity will have to overpay, and pay up front, to attract A-list talent and vendors who got burned. On January 21, Netflix asked the bankruptcy court to release it from its deal with Relativity, which would deprive Kavanaugh’s studio of one of its most valuable assets. Kavanaugh may also find it difficult to convince the industry that his company’s recent trials have converted him to fiscal modesty and curbed his knack for self#sabotage: Days before Relativity laid off 75 employees last July, his wife Instragrammed a photo of a new Mercedes with a bow on it that Kavanaugh had just given her. Then, a month after Relativity entered bankruptcy, Kavanaugh got into another legal flap when, as he later explained to the police, he accidentally shot himself in the left calf as he prepared to oil a .44 caliber handgun he owns (a misdemeanor charge was later dismissed).

Which isn’t to say he couldn’t do it again. There is no story Hollywood loves selling as much as a story of reinvention, and no story it would rather watch than the return of a movie mogul with deep pockets. In a world where studios that used to make around 20 movies a year now make half that number, one man, even if his name is Kavanaugh, can change the equation of an industry. “He’s a young man with ambition who got knocked on his ass,” says Mark Canton, who was on Relativity’s board until a few months ago. “People are always happy to have another buyer.”

In early January, Relativity surprised Hollywood: Kevin Spacey and his producing partner Dana Brunetti had agreed to become chairman and president of the company. While Spacey and Brunetti, who announced the sale of their production company to Relativity as part of the deal, may have had a financial incentive, it was exactly the kind of bold development at which Kavanaugh excels — one which, at a desperate moment, might well help woo new investors. (Just weeks later, Relativity announced that Google’s Eric Schmidt’s TomorrowVentures fund was going to invest.) “It did the trick,” a former Kavanaugh colleague says of the Spacey news. “It got the town talking. Probably so Ryan can be invited to Oscar parties.”
http://www.vulture.com/2016/01/relat...ugh-c-v-r.html





Book Publishing Is Almost as White as the Oscars
Jonathon Sturgeon

If you work in book publishing, there is a good chance you are a white, able-bodied, straight woman. This according to a pioneering survey commissioned by Lee & Low Books, a minority-owned publisher of children’s books and Foreword’s 2014 Publisher of the Year.

The Diversity Baseline Survey (DBS), released Tuesday, seeks to establish a ground floor of “hard numbers” that measures the diversity of publishing staff. According to a description in its methodology, the survey was made available to 1,524 reviewer employees and 11,713 publishing employees across most major publishers and several independent presses — although it appears that HarperCollins and Simon & Schuster did not participate in the study. They survey’s response rate was 25.8%.

The impetus for the survey, according to its introduction, was the publisher’s belief that it could “illuminate a problem that can otherwise be dismissed or swept under the rug” and “measure whether or not initiatives to increase diversity among publishing staff were actually working.”

It seems that such initiatives are not working. The overall industry numbers point to staff makeup that is 79% white, 78% cis woman, 88% straight, and 92% not differently abled. A further breakdown shows an industry that is only 4% black, 7% Asian/Native Hawaiian or other Pacific Islander, and 6% Hispanic, Latino, or Mexican. And these dismal numbers are consistent across industry categories, with only a minor improvement, exclusively for Asian employees, in marketing.

One bright spot in the survey results is the publishing industry’s gender composition, which leans heavily away from men/cis men and toward women/cis women (again, the overall number is 78%). Still, all other categories (trans man, trans woman, intersex, and gender nonconforming) are at or less than 1%. And the numbers, though still strong, dip in the executive category, which is 40% male.

A missing category from the survey, one that could be implemented (however imperfectly) in the coming years, is socioeconomic and/or educational background. Without survey results, it is difficult to determine the number of publishing professionals who have never completed college, for example. The importance of this category was underscored recently by a new policy from Penguin Random House UK, one that removes the requirement that employees earn a college degree. No such policy has been implemented by Penguin Random House in the US, but Claire von Schilling, its Director of Corporate Communications, tells Flavorwire that although the company does have some job listings that require college degrees, it has “long been routinely hiring staff throughout our company who have not received college degrees, enabling us to employ many excellent professionals who have never completed certified higher-education schooling.”

The conclusion to the survey nods to similar problems in other media, and certainly the film industry’s reluctance to commit to producing or honoring black and non-white artists and staff comes immediately to mind. “Now that the Diversity Baseline Survey is completed,” the report concludes, “the real work toward changing the status quo begins”:

It is not going to be easy. Knowing where we stand and establishing a baseline was the first step. Knowing the baseline numbers gives us a way to measure progress going forward, but only our actions can change things for the better.

Although the relation between publishing’s overwhelming whiteness and the books it produces is not directly explored by the Diverse Baseline Survey, it’s probably a safe bet to assume that more books by non-white domestic and international writers would find their way to shelves if the industry decided to enact substantial change. The bare fact that we’re now woefully under-publishing black writers, to focus on a single category, is put into relief during an historical short-term period that has seen Marlon James’ A Brief History of Seven Killings, Claudia Rankine’s Citizen, and John Keene’s Counternarratives — to list just three books that sit at the highest point of their respective forms. What aren’t we reading?
http://flavorwire.com/558171/book-pu...-as-the-oscars





IAB Chief Blasts Adblock Plus as an 'Immoral, Mendacious Coven of Techie Wannabes'

Randall Rothenberg says foe is an 'extortion racket'
Christopher Heine

When Adblock Plus said it had been "disinvited" from this week's Interactive Advertising Bureau's Leadership Summit, it raised virtual eyebrows across the Web. Wasting little time and mincing no words, the IAB's leader kicked off the event by firing back.

"Now, you may be aware of a kerfuffle that began about 10 days ago, when an unethical, immoral, mendacious coven of techie wannabes at a for-profit German company called AdBlock-Plus took to the digisphere to complain over and over that IAB had 'disinvited' them to this convention," CEO Rothenberg told the audience in his opening keynote Monday. "That, of course, is as much a lie as the others they routinely try to tell the world."

Adblock Plus, a software company that lets consumers block digital promos, had touted its willingness to speak with its adversaries, holding a self-styled "Camp David" meeting late last year with major publishers. And it seemed to feel shunned when the IAB refunded its conference registration fee.

Rothenberg blasted Adblock Plus' depiction of the situation and called the group "an unethical, immoral, mendacious coven of techie wannabes."

"We had never invited them in the first place," he said in his keynote. "They registered for this event online. When we found out, we canceled the registration and reversed their credit card billing."

Eyeo GmbH-owned Adblock Plus' ticket was pulled, Rothenberg said, "for the simple reason that they are stealing from publishers, subverting freedom of the press, operating a business model predicated on censorship of content, and ultimately forcing consumers to pay more money for less—and less diverse—information. AdBlock Plus claims it wants to engage in dialogue. But its form of dialogue is an incessant monologue."

The IAB head went on to say that two publishers showed up at Adblock Plus' Camp David several weeks ago, but execs from those companies told Rothenberg that the software maker wasn't addressing the publishers' serious concerns. (Adweek reported back then that Jed Hartman, The Washington Post's chief revenue officer, was one publishing player who planned to attend.)

"Of course, none of this surprises me," he said. "This is what happens when your only motivation, your only metric, is money. For that is what AdBlock-Plus is: an old-fashioned extortion racket, gussied up in the flowery but false language of contemporary consumerism."

Publishers have been wary of AdBlock Plus' plan to grow an "Acceptable Ads" platform, which would let brands get around ad blocking if their promos met certain criteria and paid a submission fee. But it's not the only player trying to accomplish this goal, Rothenberg noted, while also naming startups such as Brave and Shine.

"But in fact, they are engaged in the techniques of The Big Lie," he said, "declaring themselves the friends of those whose livelihoods they would destroy, and allies to those whose freedoms they would subvert."

The IAB published the full text to Rothenberg's speech, which totals roughly 3,600 words and can be found here.

The drama between ad blockers and the IAB has been ongoing as of late.

On Oct. 15, the IAB seemed to pivot from its defiant position against ad blockers when Scott Cunningham, senior vp of technology and ad operations at the org, said the industry group should take some blame for the popularity of ad blockers. Cunningham explained that the IAB could have done a better job guiding publishers away from overloading consumers' web pages and smartphones with data-draining ads.

"We messed up," he said. "Looking back now, our scraping of dimes may have cost us dollars in consumer loyalty."

Meanwhile, the IAB Leadership Summit is being held in Palm Desert, Calif., though many marketers were unable to attend due to the blizzard conditions that shut down the East Coast over the weekend.
http://www.adweek.com/news/technolog...annabes-169194





Apple Can Still Read Your End-to-End Encrypted iMessages
Swati Khandelwal

If you are backing up your data using iCloud Backup, then you need you watch your steps NOW!

In government fight against encryption, Apple has positioned itself as a staunch defender of its user privacy by refusing the federal officials to provide encryption backdoors into its products.

When it comes to Apple's iMessage service, the company claims that it can't read messages sent between its devices because they use end-to-end encryption, which apparently means that only you and the intended recipient can read it.

Moreover, in case, if the federal authorities ask Apple to hand over messages related to any of its users, there is nothing with Apple to offer them.

"If the government laid a subpoena to get iMessages, we can't provide it," Apple CEO Tim Cook told Charlie Rose back in 2014. "It is encrypted, and we do not have a key."

But Wait!

There are still hundreds of Millions of Apple users whose data are stored on Apple's servers in plain text even after Apple's end-to-end encryption practice.

It turns out that Apple forgets to offer its so-called privacy benefits to users with iCloud Backup enabled.

If you have enabled iCloud Backup on your Apple devices, the copies of all your messages, photographs and every important data stored on your device, are encrypted on iCloud using a key controlled by the company, and not you.

This allows Apple, and hence anyone who breaks into your account, to see your personal and confidential data.

In past, we have seen incidents like The Fappening in which hackers broke into Apple's iCloud accounts to steal nude selfies of over hundred famous celebrities and thus circulated them on the Internet.

Apple allows you to switch off iCloud Backup whenever you want, but it doesn't offer a way to locally encrypt iCloud backups that would allow the company to store your personal data, including iMessage and SMS messages, on its servers but not access it.

Give the Encryption Keys in Hands of Users

Yes, it is possible to do encrypted non-cloud backups locally through iTunes, though it isn't always a so obvious choice to average users.

No doubt, Apple provides end-to-end encryption for your messages that even Apple can not access or read it, but only if you avoid the backup feature that it encourages its customers to use every time.

In fact, the company asks users to set up an iCloud account as soon as they activate their new iPhone or iPad.

However, Apple doesn't clearly states that by doing so, users otherwise 'unreadable' iMessages and other personal data become very much readable to the company as well as to anyone – whether it's law enforcement agents with a court order or hackers with access to your account.

Also Read: FBI Director Asks Tech Companies to At least Don't Offer End-to-End Encryption.

Although it's difficult to say how many Apple users are affected, the most recent estimation from Asymco indicates there were around 500 Million iCloud users in March of 2014.

However, the exact number of users actually using iCloud Backups isn't clear yet.

Motherboard reached out to the company, but neither Apple told the estimated percentage of people using iCloud backup, nor it gave a reason for not giving users the option to store cloud backups that are encrypted locally.

One reason could be:

By allowing such backups, Apple doesn't want that its users who forget the passcode could not decrypt their data.

How to Turn Off iCloud Backup on the iPhone

We know, there is a war against the federal authorities and Apple over encryption. The law enforcement agencies are not at all happy with Apple using stronger encryption in its devices that makes it impossible for them to collar criminals.

In this situation, if Apple ignores such critical loopholes in its products, it would be possible for the federal officials to force the company to hand over its users data citing law orders.

Also Read: Would Encryption Backdoor Stop Paris-like Terror Attacks?

For many users, the encryption offered by Apple is more than enough. However, if you do not want the company to access your data, the only solution is:

• Backup your personal data locally through Apple's iTunes.
• Turn off iCloud Backup. Go to Settings → iCloud → Storage & Backup → iCloud Backup.


Now, tap the OK button to confirm that your iPhone will no longer be backing up your data automatically to your iCloud storage.
https://thehackernews.com/2016/01/ap...imessages.html





Exposed HP LaserJet Printers Offer Anonymous FTP to the Public

Exposed printers are a soft target, researcher says
Steve Ragan

Networked HP LaserJet printers, which have been made available to the public by the organizations hosting them, offer potential attackers a ready-made Anonymous FTP server. At present, there are thousands of these devices online.

The exposed printers were the focus of a new blog post by Chris Vickery. Vickery has previously worked with Salted Hash on a number of stories – including database leaks that exposed class records at SNHU, 3.3 million Hello Kitty fans, 191 million voter records, and an additional 18 million voter records with targeted data.

He was also the researcher that exposed the configuration issues with an HIV dating app (which led to the app maker threatening to infect the owner of Databreaches.net), and the researcher who discovered 13 million MacKeeper records.

These days, when he isn't doing security research, he's working for MacKeeper directly, as the parent company Kromtech offered him a job shortly after CES.

On Monday, Vickery outlined the risks associated with the exposed printers, calling them a soft target in an email to Salted Hash. A quick search on Shodan to confirm his findings returned thousands of results.

The exposed printers are located all over the world. A majority of the devices are in the United States. They're hosted on IPs associated with Comcast, Verizon, and AT&T, as well as universities in Minnesota, Pennsylvania, Maryland, Hawaii, and the University of Southern California.

There are also printers exposed in China, South Korea, Taiwan, Canada, Spain, Germany, Poland, Russia, and the U.K.

As one would expect, these printers are active 24/7, but even in sleep mode they'll host files. Moreover, the odds of an internal audit actually examining the contents of a printer's hard drive are slim.

By targeting the exposed printers, an attacker can use them as a staging point to host scripts or tools that can be downloaded when required. They can also use the printers as a means to host malicious websites and direct victims to them directly.

"There are a few free, open source pieces of software that can be used to upload and interact with HP printer hard drives over port 9100. After uploading to a printer, the file can be accessed by visiting http://<Printer_IP_Address>/hp/device/<File_Name> with any web browser... It doesn’t take much creativity to realize that even highly illegal materials could be stored this way," Vickery wrote.

"Naturally, you may be wondering why I am highlighting this problem. Won’t it just help amateur hackers elevate their game? Disclosing vulnerabilities will always be a double-edged blade. Sure, some people will take advantage of the information, but it’s my sincere belief that anyone seeking tips on how to protect themselves should also be made aware," Vickery added.

Organizations that are concerned should ensure that access to port 9100 is restricted and that all networked printers are behind a firewall.

A Shodan report generated by Salted Hash on the exposed printers can be viewed here.
http://www.csoonline.com/article/302...he-public.html





Under Surveillance: Journalists Urged to Guard Their Data
Silkie Carlo

The two most important principles for great journalism go hand in hand: first, to hold power to account, and second, to protect sources.

However, both principles are becoming increasingly challenging in light of the UK government’s attack on Freedom of Information and the expansive surveillance powers laid out in the Draft Investigatory Powers Bill.

If the UK Home Office has its way, bulk collection of metadata and content, collation of ‘bulk personal datasets’ (including innocent people’s political opinions, medical conditions, ethnicity, sexuality) and even bulk hacking, will be exercised under the new legislation. This is despite the extreme breaches of human rights law and basic democratic principles.

Journalistic principles are more important than ever if the draft bill becomes law in the United Kingdom. Equally important is for journalists to offer real source protection and adopt good information security practices.

It is thanks to great journalism, and excellent information security, that we can even have an informed debate about the surveillance state today. I’m referring, of course, to the courageous work of Glenn Greenwald and other journalists. It was their reporting on thousands of classified documents from NSA whistleblower Edward Snowden – jigsaw pieces put together over the past two and a half years – that formed an unrecognisable and frankly dystopian picture of the Western democracies we thought we knew.

Whistleblowing and journalism has forced UK intelligence agencies and government to present comprehensive legislation to parliament in form of the draft bill to clearly define the powers that have been, and currently are, exercised with dubious legality. Few expected the worst of Snowden’s revelations to be proliferated and even extended, but they have been.

The UK government made a great deal of ‘journalist protections’ in the draft bill. I spent considerable time looking for them in the 300-page document. There aren’t any. There is a draft code of practice accompanying the bill, which recommends that police and spies have ‘consideration’ when gathering data on, or intercepting, journalist-source communications. But the bill gives police and intelligence agencies the power to spy on, intercept and even hack journalists’ communications. Since when is ‘consideration’ an effective safeguard to protect a critical pillar of a free society – a free press?

Journalists rarely know when they are being spied on. Authorities need not declare their target’s job; there is no obligation to inform those wrongfully spied on; and intercept evidence is banned from the courts. Despite the near impossibility of finding out you’ve been the target of surveillance, there are increasing examples of unjustified surveillance of journalists and their sources.

Journalists who want to be able to offer source protection; who want to do serious investigative work; who want to hold power to account, must adopt information security practices. Information security is source protection in the digital age, and journalists who show an awareness, willingness and ability to adopt digital security behaviours will attract valuable sources and stories.

My top tips for journalists on protecting their data:

• Don’t offer source protection unless you are confident you can provide it. It is important to give potential sources an honest and informed evaluation of the protection you can provide them and the safety of your communications. Their livelihoods, and in some countries their lives, could be at stake.
• Information you need to understand the risks and defend against them is widely available, including this free handbook from the Centre for Investigative Journalism.
• Use encryption to securely exchange emails and to safely share important source files. Encryption wraps communications in impenetrable code, so that the content is only accessible to the intended recipient/s. It is one of the very best ways we have of securing modern communications and technologies.
• Using the Centre for Investigative Journalism handbook you can learn some simple but highly effective ways to encrypt your emails, use encrypted instant messaging and store or exchange encrypted files.

http://newssafety.org/safety/advisor...heir-data-1685





James Murdoch, Who Quit in Phone-Hacking Scandal, Returns to Sky
Paul Sandle and Kate Holton

James Murdoch is to return as chairman of Sky (SKYB.L) four years after a phone-hacking scandal forced him out, potentially taking the Murdoch family a step closer to a deal for full ownership of the European pay-TV group.

Murdoch built Sky into a powerhouse in four years as chief executive officer and five as chairman, and was on the verge of selling it to U.S. media group 21st Century Fox (FOXA.O), owned by his father Rupert, before the scandal engulfed him.

His appointment, seven months after becoming chief executive of Fox, follows Rebekah Brooks' return to lead Rupert Murdoch's newspaper business last year after being cleared of charges over the scandal at the News of the World newspaper, where reporters hacked into phones to obtain stories while she was the editor.

Murdoch's return to a top job at Sky had seemed a remote possibility when he stood down in 2012, with politicians lining up to denounce the family for its domination of the British media and Prime Minister David Cameron acknowledging that politicians had got too close to his father Rupert.

"It's like Murdoch's getting the band back together, it's as if nothing ever happened at all," said a former executive from Murdoch's British arm.

The admission of phone hacking, including the mobile phone of a murdered schoolgirl, led to a criminal trial, a national inquiry into media standards and a political backlash that forced Fox to abandon its bid for Sky. Rupert Murdoch closed the News of the World in 2011.

In James Murdoch's absence, Sky bought Fox's German and Italian businesses, rolling Murdoch's European pay-TV assets into one company with 21 million customers and a London listing. It is 39 percent owned by the U.S. group.

Buying all of Sky, which reported a better-than-expected 12 percent rise in profit and a record number of new customers on Friday, would add Europe's biggest pay-TV group to a media empire that spans U.S. network TV, Asia's Star and one of the most famous production businesses in the world.

Recent results have shown that American TV networks are starting to struggle as viewers shift to online services such as Netflix (NFLX.O).

Sky's Chief Executive, Jeremy Darroch, said Murdoch, who was the only candidate put forward, was "without a doubt the right man for the job", underlining his deep knowledge of the international media industry and experience on the board.

He acknowledged there would be speculation about Fox's intentions, but said Sky's management would not be distracted.

"I can't speak for Fox but what I would read into James' acceptance of the role is that he and they continue to be passionate supporters for Sky's ongoing success," he told reporters.

FORCED OUT

The younger son of the media tycoon, now 43, quit as the chairman of the-then BSkyB in 2012, brought down by his link to the newspaper business which he was running at the time.

Having returned to New York, he rebuilt his career at Fox. He will replace Nick Ferguson, who has been chairman of Sky since 2012 and on the board for 12 years, at the end of April.

In his absence, Sky lost no momentum in Britain and Ireland, where its product innovation, slate of programming and marketing prowess have countered the threat from new rival BT (BT.L). [nL8N15C4GJ]

Operating profit hit 747 million pounds ($1.1 billion) for the six months to end-December, ahead of the 727 million pounds expected by analysts according to a company-supplied consensus.

It added 337,000 new customers in the second quarter, with strong growth in both TV and broadband and its highest numbers of new customers in its biggest UK and Ireland market for 10 years.

Shares in Sky were trading up 2.5 percent at 1,067 pence at 0933 GMT, valuing the group's equity at 18.35 billion pounds.

Jeff Li, co-fund manager of the New Capital fund at EFG Asset Management which is a Sky investor, said shareholders were likely to welcome Murdoch's return.

"We think he’s demonstrated enough skill over the years in management, plus the Murdochs have the knack of repeatedly creating value for shareholders to not do anything rash," he said. "As an investor in 21st Century Fox as well, we always consider it a real possibility for Fox to fully take over Sky at some point."

Another investor, Royal London Asset Management, described the appointment as inappropriate.

"Should Fox make a bid for Sky, investors need a strong independent chairman to protect the interests of minority shareholders and negotiate the best possible deal," said Ashley Hamilton Claxton, corporate governance manager at RLAM.

($1 = 0.6947 pounds)

(Additional reporting by Sinead Cruise, Editing by Timothy Heritage)
http://uk.reuters.com/article/uk-sky...-idUKKCN0V70KW





The Myth of the ISIS Encrypted Messaging App
Patrick Howell O'Neill

Despite widespread media reports to the contrary, an app created for Islamic State militants to send private encrypted messages does not exist, a Daily Dot investigation found.

On Jan. 12, Defense One reported that the Islamic State allegedly built a new Android app called Alrawi for exchanging encrypted messages, based on claims from self-proclaimed online counterterrorism outfit Ghost Security Group (GSG). The claim was quickly reprinted by Newsweek, Fortune, TechCrunch, and the Times of India—the largest English-language newspaper in the world—among many others.

However, it seems as though hype and fear, rather than concrete evidence of a genuine tool for orchestrating terrorists attacks, played the primary role in propagating word of its existence.

Encryption uses algorithms to scramble information so that only the intended sender and recipient can read the data. Web users benefit from encryption anytime they log into a website with an “HTTPS” connection, and Apple and Google both encrypt devices running their mobile operating systems when a user enables the locking feature.

The spotlight has been on encryption technology for well over a year now, and it’s only intensified since the November 2015 terrorist attacks in Paris and the December attack in San Bernardino, California.

Followers of ISIS, excited by the news of a custom encrypted messaging app, asked on forums and social media where they could find the app, but we found no instances of anyone able to share it. Western security experts wondered why they couldn’t find a copy on any of the official or unofficial ISIS channels.

All of the media articles on the Alrawi app showed screenshots of a different app entirely, one that is a glorified RSS reader with a totally different name. The Defense One journalist who first reported on GSG's claims about the app told the Daily Dot that he hadn't seen any version of Alrawi at all, and the subsequent reports on the app largely relied on Defense One's reporting. The Daily Dot was the first media outlet to receive, on Jan. 18, what GSG claimed was the Alrawi encryption app.

The app, “Alrawi.apk,” contained no ability to send or encrypt messages.

In fact, it contains very few abilities at all, according to analysis by Khalil Sehnaoui, a Middle East-based security specialist and founder of Krypton Security. The app was built in MIT’s App Inventor, a plug-and-play tool meant primarily for children. (A watermark-style line automatically inserted by App Inventor is in the code.) It appears to contain a simple Bluetooth file transfer button—with a range of about 30 feet, it’s a function virtually all smartphones have anyway—but there’s nothing to indicate encrypted messages were ever a part of the app's functionality.

During a phone interview with a GSG representative, the group said it was different version of Alrawi—not the one GSG sent to the Daily Dot when we requested to see the encryption app—that included encrypted messaging, though both versions were indeed built in the children’s App Inventor, the representative said, and likely by the same person.

GSG was unable to provide a version of Alrawi with encrypted communications, but they did point to a jihadist website offering custom-built software where GSG said they originally found the Alrawi encrypted messaging app.

The only messaging software available on this now-dormant jihadist website is known as “Amn Al-Mujahid,” which translates to “Security of the Jihadi [fighter].” Aside from having an entirely different name, it was built in 2013, not 2016. It was created by Al Qaeda, not the Islamic State. It’s very likely built by a different person than whoever built the Alrawi app, a fact we know because the Alrawi app creator did no personal coding on his product, according to Sehnaoui. And security experts say the custom-built Amn Al-Mujahid app likely helps U.S. intelligence efforts.

So, where is the Alrawi encryption app?

Multiple security researchers who closely follow the Islamic State’s online activity say that they haven’t seen the Alrawi app being discussed or shared in any of ISIS’s online channels. Nobody from ISIS seems to know anything about this app, based on extensive online conversations viewed by the Daily Dot and other ISIS observers.

“Basically, [it's] a lot of bullshit over nothing,” Sehnaoui said. “I think it is just a bad media mock-up to try and get some attention. There is nothing even remotely professional or functional about both these apps.”

Ghost Security Group, whose claims are regularly featured in the media, says that it has a working relationship with U.S. counterterrorism officials, and it appears the group passes along information in an informal capacity.

Beyond news of the Alrawi app, GSG has proven its power to generate headlines. In addition to the popular publications that covered the Alrawi app, the group and its associates have been spotlighted by outlets as high-profile and wide-reaching as CNN, BBC, and Fox News. In each report, connections to the U.S. government provide the foundation for the group’s authority.

In December, House Homeland Security Chairman Mike McCaul (R-Texas) was likely referring to a Ghost Security Group report when he went on CNN and claimed to Wolf Blitzer’s 550,000 viewers that the Islamic State built its own encrypted messaging mobile app. McCaul, whose Tom Clancy-esque new book Failure of Imagination explores potential threats to the U.S., provided no evidence supporting his claim.

A spokeswoman for McCaul could not confirm whether the congressman's statements on CNN were based on GSG's claims.
The Islamic State’s use of encryption technology has become a focal point of the encryption debate, commonly known as the Crypto Wars. FBI Director James Comey said in May that encryption played a role in the killing of two people during a shooting in Garland, Texas, in 2015. One of the shooters, Comey claimed, sent and received 109 encrypted messages with an “overseas terrorist.” Comey and other U.S. government authorities have since repeatedly claimed that encryption has allowed criminals and terrorists to evade law enforcement and intelligence agents, a phenomenon Comey calls “going dark.”

Following the attacks in Paris, McCaul partially blamed the deadly massacres on ISIS militants' use of Telegram, a group messaging app. Telegram has been used by ISIS, though experts say it provides weak encryption, and the company has since begun monitoring and deleting channels used by Islamic State operatives and supporters.

Earlier this week, the Islamic State’s media arm promoted a video in which they claimed to use PGP encryption, which is often used to secure email messages. Edward Snowden, who has become a vocal supporter of encryption and critic of the U.S. government since he leaked classified National Security Agency documents in 2013, argued the video was fake and possibly a scare tactic.

There’s no doubt that Islamic State supporters can use encryption technology. Myriad options are freely available to anyone with an Internet connection. But the Alrawi app is not among them.
http://www.dailydot.com/politics/isi...messaging-app/





Congress to Probe Juniper 'Back Door' Exposure, Possible U.S. Involvement
Joseph Menn

A U.S. congressional probe into the impact of a hack of Juniper Networks Inc software will examine the possibility that it was initially altered at the behest of the National Security Agency, a lawmaker said in an interview on Thursday.

The House Committee on Oversight and Government Reform this month sent letters asking some two dozen agencies to provide documents showing whether they used Juniper devices running ScreenOS software. The company said in December ScreenOS had been compromised by hackers using a so-called back door in the software.

Rep. Will Hurd, a Texas Republican who heads the committee's technology subcommittee and formerly worked for the Central Intelligence Agency, said his initial goal in pursuing the probe was to determine whether government agencies, many of which use Juniper gear, had been compromised by the hackers.

But Hurd, a key player in the investigation, said the committee would also probe the origins of the breach. If it turns out that a back door was included at a U.S. government agency's request, he said, that should help change the policy debate.

The earliest Juniper back door identified by researchers used a technique widely attributed to the NSA.

The NSA did not respond to a request for comment. Juniper declined to comment.

U.S. law enforcement and intelligence agencies have long lobbied in vain for legislation that would require technology companies to provide back doors in equipment that use encryption technology. They say they need such access to conduct authorized wiretaps and other types or surveillance.

The technology industry has fiercely opposed any such policy, arguing that back doors could be exploited by criminals or foreign intelligence services. The debate has heated up in the wake of recent attacks by Islamic militants, who make heavy use of digital communications networks.

"How do we understand the vulnerabilities that created this problem and ensure this kind of thing doesn't happen in the future?" Hurd said. "I don't think the government should be requesting anything that weakens the security of anything that is used by the federal government or American businesses."

Juniper said in December it had found two unauthorized pieces of code inserted into ScreenOS that would have allowed whoever planted them to read email sent over supposedly secure connections known as virtual private networks, or VPNs.

After outside researchers picked apart the software patches Juniper issued to fix the problem, they concluded that one back door had been inserted in 2014 and one in 2012. The 2012 version, though, merely changed the formulation of a piece of software known as a random number generator, which is part of most encryption products.

The random number generator used in the Juniper products, known as Dual Elliptic Curve, has long been suspected by security professionals of containing a back door engineered by the U.S. National Security Agency. Those suspicions were largely confirmed by leaks from former agency contractor Edward Snowden.

Juniper said this month it would remove Dual Elliptic Curve entirely in future versions of its products.

Juniper has not said how the code got there in the first place. It sells into defense and intelligence agencies, however, and major customers could have requested that the code be modified as part of a contract, former employees told Reuters this month. That is how Dual Elliptic Curve made it into a software kit distributed by security company RSA.

The NSA is a logical suspect for the 2008 code insertion, said security researcher Nicholas Weaver of the International Computer Science Institute, while the offenders in both 2012 and 2014 are more likely to have been other countries.

(Reporting by Joseph Menn; Editing by Jonathan Weber and Richard Chang)
http://www.reuters.com/article/us-ju...-idUSKCN0V708P





South America Takes to the Streets Against TPP

Chileans are to take to the streets in protest every month until their National Congress rejects the TPP treaty.

Citizens in Argentina, Chile and Peru took to the streets in droves Friday night to protest the Trans Pacific Partnership trade deal, which will affect 12 countries and has already seen major objection from citizens world wide.

“This march is informative, because this treaty was negotiated by countries in secret and behind our backs, the most affected,” said one of the leaders of the mobilization in Peru's capital Lima.

Veronika Mendoza, a congressperson from Peru's left wing Broad Front party, also attended the demonstration and reiterated the party's rejection of the treaty, saying that it would increase the price of medicines for citizens.

#Peru: Sikuri traditional musicians gather at protest against the #TPP @telesurenglish pic.twitter.com/QoSTohY6rq — Rael Mora (@RaelTeleSUR) January 23, 2016

#Peru: protest against #TPP gathered 2k+ people who denounced local media ignores the issue. @telesurenglish pic.twitter.com/JVBYoqdyHf — Rael Mora (@RaelTeleSUR) January 23, 2016

Mass crowds also gathered in cities across Chile, including Santiago, Concepcion, Valparaiso, Temuco, Puerto Montt and Iquique among others.

“From today, we have announced our intention to mobilize every month if necessary until congress rejects this treaty,” reads a communique by the protest organizers, which was handed to journalists in Chile's capital Santiago.

Argentina is not directly impacted by TPP – a trade deal that would grant transnational corporations a wealth of new powers – however, citizens took to the street to protest against the rising power of transnationals. The protesters were particularly targeting the agrochemical company Monsanto, which has made it illegal in several countries for farmers to save their own seeds for the next harvest, forcing them to buy Monsanto seeds each year.

Protests against the TPP also erupted outside of Latin America. Thousands also took to the streets of Malaysia's capital Kuala Lumpur to urge the government not to sign the trade deal, saying it will lead to higher prices of goods and may displace local businesses by favoring U.S. and other transnationals.

Leaders of the 12 participating countries – United States, Japan, Australia, New Zealand, Malaysia, Brunei, Singapore, Vietnam, Canada, Mexico, Peru and Chile – signed the agreement in October, and took the bill back to their respective parliaments to be discussed.

The leaders are now scheduled to meet again Feb. 4 in New Zealand to ratify the agreement.
http://www.telesurtv.net/english/new...0123-0017.html

















Until next week,

- js.



















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