Peer-To-Peer News - The Week In Review - June 7th, '08

[JackSpratts]

Since 2002


































"If your email crosses our border, we tap it." – Sweden


"We intend to vigorously defend ourselves against this shake down attempt by the major label cabal." – Pablo Soto


"Honestly, it's becoming clearer and clearer that the entertainment industry is an existential threat to the idea of free speech, open tools, and an open communications network." – Cory Doctorow


"I slept in my clothes, because the last time they came [to bust me], I was in my underwear with my dong hanging out and shit. I wish I was a minor right now because this is going to be really bad." – Comcast hacker Defiant


"If he wasn't such a prick, he could have avoided all of that. I wasn't even really thinking. Plus, I'm just so mad at Comcast. I'm tired of their shitty service." – Comcast hacker EBK


"Comcast is just a huge corporation, and we wanted to take them out, and we did." – Defiant


"There will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form." – Steve Balmer


"The average 14-year-old can hear more music in a month than someone would have heard in an entire lifetime just 300 years ago." – Dan Levitin


"Google vice president Sukhinder Singh Cassidy predicts that in seven years, every song ever recorded in the world will fit into our pockets." – Karla Starr


"Let today be the pirates independence day! Today we celebrate the victories we’ve had and the victories that will come. Today we celebrate that we’re united in our efforts. Keep on seeding." – The Pirate Bay team


"I'm not going to make Nelson Mandela a white guy." – Clint Eastwood




































June 14th, 2008




Op-Ed Columnist

Bits, Bands and Books
Paul Krugman

Do you remember what it was like back in the old days when we had a New Economy? In the 1990s, jobs were abundant, oil was cheap and information technology was about to change everything.

Then the technology bubble popped. Many highly touted New Economy companies, it turned out, were better at promoting their images than at making money — although some of them did pioneer new forms of accounting fraud. After that came the oil shock and the food shock, grim reminders that we’re still living in a material world.

So much, then, for the digital revolution? Not so fast. The predictions of ’90s technology gurus are coming true more slowly than enthusiasts expected — but the future they envisioned is still on the march.

In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.”

For example, she described how some software companies gave their product away but earned fees for installation and servicing. But her most compelling illustration of how you can make money by giving stuff away was that of the Grateful Dead, who encouraged people to tape live performances because “enough of the people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.”

Indeed, it turns out that the Dead were business pioneers. Rolling Stone recently published an article titled “Rock’s New Economy: Making Money When CDs Don’t Sell.” Downloads are steadily undermining record sales — but today’s rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through “publishing, touring, merchandising and licensing.”

What other creative activities will become mainly ways to promote side businesses? How about writing books?

According to a report in The Times, the buzz at this year’s BookExpo America was all about electronic books. Now, e-books have been the coming, but somehow not yet arrived, thing for a very long time. (There’s an old Brazilian joke: “Brazil is the country of the future — and always will be.” E-books have been like that.) But we may finally have reached the point at which e-books are about to become a widely used alternative to paper and ink.

That’s certainly my impression after a couple of months’ experience with the device feeding the buzz, the Amazon Kindle. Basically, the Kindle’s lightness and reflective display mean that it offers a reading experience almost comparable to that of reading a traditional book. This leaves the user free to appreciate the convenience factor: the Kindle can store the text of many books, and when you order a new book, it’s literally in your hands within a couple of minutes.

It’s a good enough package that my guess is that digital readers will soon become common, perhaps even the usual way we read books.

How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won’t last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.

Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.

Now, the strategy of giving intellectual property away so that people will buy your paraphernalia won’t work equally well for everything. To take the obvious, painful example: news organizations, very much including this one, have spent years trying to turn large online readership into an adequately paying proposition, with limited success.

But they’ll have to find a way. Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we’ll have to find business and economic models that take this reality into account.

It won’t all happen immediately. But in the long run, we are all the Grateful Dead.
http://www.nytimes.com/2008/06/06/op...06krugman.html





British Police Confirm Six OiNK Users Arrested
enigmax

British Police have just confirmed that several users of BitTorrent site OiNK were arrested recently. TorrentFreak broke the news last Friday after sitting on the story for a while but the mainstream press have been holding back over the weekend, waiting for confirmation. Just seconds ago, confirmation came.

Last week TorrentFreak reported that Cleveland Police had arrested a user of OiNK, who was questioned and later released on police bail.

We also discovered that other people had been arrested and deduced from our sources that this police action was taken against alleged pre-release uploaders - those that share before the retail date.

A few minutes ago in an email to TorrentFreak, Cleveland Police confirmed that a total of six individuals were arrested, all in connection with the uploading of pre-release music.

Three of the arrests were made on Friday 23rd May and three more on Wednesday 28th May. The arrested individuals are five men aged between 19 and 33, and a 28-year-old woman.

Suspects were taken to their local police station for questioning and required to provide DNA samples and fingerprints. According to our sources, they were arrested on suspicion of “Conspiracy to Defraud the Music Industry” although this hasn’t yet been confirmed by the police.

We can confirm that at least two of the arrests are for the alleged uploading of a single album. All have been bailed pending further enquiries.

Update: The Register contacted the BPI who gave this statement:

The BPI and IFPI worked with the police in order to close down the OiNK tracker site last October. The illegal online distribution of music, particularly pre-release, is hugely damaging, and as OiNK was the biggest source for pre-releases at the time we moved to shut it down. We provided the information to assist this investigation, but this is now a police matter and we are unable to comment further at this stage.
http://torrentfreak.com/british-poli...rrests-080602/





Tories Eye $500 Fine for Illegal Downloads
David George-Cosh

The federal Conservatives are set to introduce new copyright legislation as soon as this week that will include provisions to target users with a $500 fine for all illegal files transferred online, a move that legal experts say could see Canadians sued for hundreds of thousands of dollars if found guilty of infringement.

Multiple sources familiar with the matter have told the National Post that one of the provisions in the government's updated Copyright Act of Canada will include a fine for each "personal use download" found to be shared online through peer-to-peer software programs.

Other provisions in the bill, which is said to be tabled to the House of Commons tomorrow afternoon, will include measures to make it illegal to unlock cellphones or copy music from protected CDs to iPods as well as making it illegal to copy "time shifted" shows onto personal video recorders if flagged by broadcasters.

The current Copyright Act charges a maximum $20,000 fine for each infringed material, but experts say the act was designed primarily for commercial cases and not to accommodate how digital copyrighted files are handled by individuals.

The push to update the Copyright Act to reflect the current digital climate has been an eventful -- yet slow -- campaign. It has not been amended since 1997 although prior attempts to draw it in line following the ratification of the 1996 World Intellectual Property Organization Performances and Phonograms Treaty have failed. Another attempt by the Conservative government to introduce updated copyright legislation this past December failed following an outpouring of protest by grassroots organizations across Canada over fears the bill would fall in line with harsh U.S. copyright laws.

"The core really is a desire to satisfy U.S. pressure by enacting something very close to the U.S. Digital Millenium Copyright Act," said University of Ottawa law professor Michael Geist, an expert in Internet commerce issues.

"The irony here is that while file sharing could be held up as the prime rationale for new legislation, the reality is that individual Canadians and the everyday products they purchase are going to be most deeply affected," he said, citing CDs and DVDs as examples of items that will likely have restrictions placed on their usage.

Critics have said the U.S. copyright bill is ineffective in enforcing infringement and sends the wrong message to consumers. The bill was cast in a prominent light following a civil case in Minnesota that ruled a single mother had to pay the Recording Industry Association of America a $222,000 fine for 24 cases of copyright infringement.

To date, Canadians have not been sued for sharing illegal digital material following a ruling by the Federal Court of Appeal in 2004, which denied a request from the Canadian Recording Industry Association to force Internet service providers to subpoena its customers suspected of sharing infringed material based on weak evidence and privacy concerns.

Although it is unclear how the government will enforce the new legislation, Mr. Geist said a new bill would create an "open invitation" for lawsuits to be filed against illegal file sharers.

David Zitzerman, an entertainment lawyer with Goodmans LLP, said the legal protection for technology protection measures in Canada has been a "real lightning rod" of debate between consumers and content producers.

"On one hand you have the rights owners that feel that for e-commerce to really flourish on the Internet they need these protection measures," Mr. Zitzerman said. "But you also have consumer groups and others who feel it will affect free speech [or] will curtail the rights that people feel they are entitled to as owners of the materials."

A source with direct knowledge of the government's planned bill said the act was written with the consultation of a number of stakeholders to soften the impact the controversial legislation's release will have on the Canadian public.

"They have a sense that no one's going to be happy; they can't make everyone happy, but I think it's a balanced approach," the source said.

"[Industry Canada] has really taken account of everything from people that come up with ideas on their blogs right up to musicians. The spectrum is really broad."

The source said the new act is being finalized by the Prime Minister's Office. Industry Canada declined to provide a date for the controversial bill's introduction to Parliament.

"Minister Prentice has said we will introduce legislation when he and Heritage Minister [Josée] Verner are satisfied that the bill has struck the appropriate balance between the rights of consumers and those of creators," an Industry Canada spokeswoman said in an e-mail.
http://www.nationalpost.com/news/story.html?id=558674





Major Record Labels Sue Spanish P2P Pioneer Pablo Soto, MP2P Technologies, Suit Seeks $20mm USD

Lawsuit, Believed to be Unprecedented, Claims "Unfair Competition"
Press release

Madrid, Spain (PRWEB) June 5, 2008 -- MP2P Technologies (http://www.mp2p.net/) announced today that it has been served with a lawsuit from what remains of the four major record labels. The lawsuit, WARNER MUSIC SPAIN S.A., UNIVERSAL MUSIC SPAIN, S.A., EMI MUSIC SPAIN, S.A., SONY BMG MUSIC ENTERTAINMENT, S.A., PRODUCTORES DE MUSICA EN ESPANA (PROMUSICAE) v. PABLO SOTO BRAVO, OPTISOFT, S.L., PIOLET NETWORKS, S.L., MP2P TECHNOLOGIES, S.A. (filed in Madrid, Administracion de Justica, # 2807910001898), seeks $20mm in alleged damages from the technology upstart.

"We intend to vigorously defend ourselves against this shake down attempt by the major label cabal," said Pablo Soto, founder and CEO of MP2P Technologies. "Rather than embracing technology, they have chosen a path that will ultimately lead to their own demise, as evidenced by the label's consistent decline over the past decade. Litigation is in itself not a valid business model for them, however, it has been a dogged and futile pursuit of theirs since the advent of P2P."
http://extralaw.blogspot.com/2008/06...anish-p2p.html





The Inexact Science Behind DMCA Takedown Notices
Brad Stone

A new study from the University of Washington suggests that media industry trade groups are using flawed tactics in their investigations of users who violate copyrights on peer-to-peer file sharing networks.

Those trade groups, including the Motion Picture Association of America (M.P.A.A.) Entertainment Software Association (E.S.A.) and Recording Industry Association of America (R.I.A.A.), send universities and other network operators an increasing number of takedown notices each year, alleging that their intellectual property rights have been violated under the Digital Millennium Copyright Act.

Many universities pass those letters directly on to students without questioning the veracity of the allegations. The R.I.A.A. in particular follows up some of those notices by threatening legal action and forcing alleged file-sharers into a financial settlement.

But the study, released today by Tadayoshi Kohno, an assistant professor, Michael Piatek a graduate student, and Arvind Krishnamurthy, a research assistant professor, all at the University of Washington, argues that perhaps those takedown notices should be viewed more skeptically.

The paper finds that there is a serious flaw in how these trade groups finger alleged file-sharers. It also suggests that some people might be getting improperly accused of sharing copyrighted content, and could even be purposely framed by other users.

In two separate studies in August of 2007 and May of this year, the researchers set out to examine who was participating in BitTorrent file-sharing networks and what they were sharing. The researchers introduced software agents into these networks to monitor their traffic. Even though those software agents did not download any files, the researchers say they received over 400 take-down requests accusing them of participating in the downloads.

The researchers concluded that enforcement agencies are looking only at I.P. addresses of participants on these peer-to-peer networks, and not what files are actually downloaded or uploaded—a more resource-intensive process that would nevertheless yield more conclusive information.

In their report, the researchers also demonstrate a way to manipulate I.P. addresses so that another user appears responsible for the file-sharing.

An inanimate object could also get the blame. The researchers rigged the software agents to implicate three laserjet printers, which were then accused in takedown letters by the M.P.A.A. of downloading copies of “Iron Man” and the latest Indiana Jones film.

“Because current enforcement techniques are weak, it is possible that anyone, regardless of sharing content or using BitTorrent, could get a D.M.C.A. takedown notice claiming they were committing copyright infringement,” said Mr. Piatek.

In their paper, the researchers argue for greater transparency and public review of Big Media’s intellectual property enforcement actions.

“Our study scientifically shows that flaws exists,” said Mr. Kohno, an assistant professor in the university’s Computer Science and Engineering department. “It’s impossible to prove that other flaws don’t exist, especially since current industry practices are so shrouded in mystery. Ultimately, we think that our results should provide a wake-up call for more openness on the parts of content enforcers.”
http://bits.blogs.nytimes.com/2008/0...edown-notices/





Secret Super-Copyright Treaty Leaked
Cory Doctorow

Wikileaks has the full text of the dread Anti-Counterfeiting Trade Agreement, a draft treaty that does away with those pesky public trade-negotiations at the United Nations (with participation from citizens' groups and public interest groups) in favor of secret, closed-door meetings where entertainment industry giants get to give marching orders to governments in private.

It's some pretty crazy reading -- among other things, ACTA will outlaw P2P (even when used to share works that are legally available, like my books), and crack down on things like region-free DVD players. All of this is taking place out of the public eye, presumably with the intention of presenting it as a fait accompli just as the ink is drying on the treaty.

Honestly, it's becoming clearer and clearer that the entertainment industry is an existential threat to the idea of free speech, open tools, and an open communications network.

Who is really behind ACTA? Follow the money:

Rep. Howard Berman (D-CA)[4]

Top four campaign contributions for 2006:
Time Warner $21,000
News Corp $15,000
Sony Corp of America $14,000
Walt Disney Co $13,550

Top two Industries:
TV/Movies/Music $181,050
Lawyers/Law Firms $114,200

Other politicians listed also show significant contributions from IP industries.
Link (Thanks, Espen!)
http://www.boingboing.net/2008/06/06...rcopyrigh.html





Consumer Groups Voice Concern Over Potential Digital Copyright Bill

New U.S.-style legislation could impose serious penalties for illegal downloading
CBC News

A coalition of consumer groups has waded into the copyright reform debate, calling on the federal government to avoid introducing legislation that will limit consumer rights.

In a letter sent Thursday to Minister of Industry Jim Prentice and Minister of Heritage Josée Verner, the groups said "adapting copyright laws to the modern world and to modern technologies should in no way limit or undermine existing consumer rights or constrain common consumer practices."

They also said technologies that undermine existing consumer rights should be illegal.

The coalition includes members from the Union des consommateurs, Option consommateurs, Consumers Council of Canada, Public Interest Advocacy Centre (PIAC), the Canadian Internet Policy and Public Interest Clinic (CIPPIC) and Online Rights Canada (OnlineRights.ca).

Their letter comes in response to speculation the government may be close to introducing a bill that could impose serious penalties for illegal downloading.

Critics say the bill will likely mirror the U.S. Digital Millennium Copyright Act, which has drawn considerable criticism south of the border, primarily for opening the door to huge lawsuits by record labels against people who have downloaded music illegally.

The bill was also expected to contain provisions that would have made it illegal to time shift television shows using a Personal Video Recorder, or copy files to CDs and MP3 players.

After reports suggested the updated copyright bill would be introduced this week, Prentice told the House of Commons in Ottawa on Wednesday he would not introduce legislation until he is satisfied it takes into account the rights of both consumers and copyright holders.

But the coalition said that while government has consulted with industry groups, consumer groups have yet to be given a chance to voice their opinion.

Michael Geist, the Canada research chair of internet and e-commerce law at the University of Ottawa and a frequent critic of many of the provisions expected to be introduced, wrote in his blog Thursday that the coalition's letter shows that consumer groups are being left out of the process.

"The letter confirms what has been widely feared — the recording industry may have received assurances of a bill, yet Industry Minister Jim Prentice has still not consulted with Canadian consumer groups," he wrote.

Prentice delayed plans to introduce the bill in December after a chorus of opposition sprang up to provisions the legislation reportedly contained. At the time, more than 20,000 people signed up to a protest group on social networking site Facebook, which has since doubled to more than 40,000 members.

A number of prominent Canadian artists including the Barenaked Ladies, Sarah McLachlan and Avril Lavigne opposed restrictive copyright reform through the Canadian Music Creators Coalition, which was at odds with the Alliance of Canadian Cinema, Television and Radio Artists, the official union for Canada's English-language performers. ACTRA has urged Prentice to speed up reformed legislation.

The Business Coalition for Balanced Copyright, a group that includes Google, Yahoo, Rogers, Telus, the Canadian Association of Broadcasters and the Retail Council of Canada, among others, also announced its opposition to a U.S.-style digital copyright act in February.
http://www.cbc.ca/technology/story/2...-consumer.html





High-Speed Internet: Ofcom to Introduce Code for Broadband Adverts
Bobbie Johnson

Connection speeds decline the farther customers are from their nearest telephone exchange

Broadband providers are being asked to sign up to a new code of conduct in order to prevent consumers being missold high-speed internet packages.

Media regulator Ofcom announced today that it would be introducing a new voluntary code of practice for ISPs in an attempt to prevent confusion over high-speed connections.

Broadband advertising has been controversial because ISPs often promote the theoretical maximum speeds achievable, rather than the typical speeds most customers can reach.

The code will introduce a number of measures to help customers, including better information on realistic speeds, support for those who discover that advertised speeds are not available in their area and wish to move to a lower speed package, and better training for sales staff.

Earlier this year a survey by the website Broadband Expert found that actual speeds were often less than half those advertised, leading Ofcom to warn that it was prepared to enforce regulation if the industry did not fall into line.

"Broadband is a thriving market in the UK," said Ed Richards, Ofcom's chief executive. "We want to encourage real clarity for consumers about the actual broadband speeds they can receive. This voluntary code is a significant step in this direction."

More than 30 ISPs have already signed up to the code, which was drafted in conjunction with the industry body the ISPA.

In a statement the organisation said that it would "support the principle" behind the code, but reiterated its argument that measuring internet speeds remained problematic.

"Consumers must also understand that every single broadband connection's speed will be different," it said. "Even neighbouring houses supplied by the same provider can receive different speeds."

The regulator is also set to undertake a comprehensive survey of broadband speeds across Britain as part of an attempt to determine how accurate advertising has been. A survey earlier this week found that there were large discrepancies between speeds in large cities such as London and other parts of the country.
http://www.guardian.co.uk/technology...nd.advertising





New Filings Reveal Extent, Damage of Bell Canada Throttling
Nate Anderson

Just how bad it is Bell Canada's P2P traffic filtering? Not bad at all, so long as you're happy having your 5Mbps DSL link operate at half the speed of a dial-up modem. That's the assertion of a group of small Canadian ISPs that are asking Canada's telecoms regulator to intervene and force Bell to call off its deep packet inspection dogs.

The Canadian Association Internet Providers (CAIP) represents smaller firms that generally purchase wholesale capacity from Bell Canada and resell it under their own brand. When Bell applied its filtering system to this wholesale traffic earlier this year, the operators were outraged, especially as several of them explicitly offered "no throttle" guarantees to customers that they now could not keep.

In documents filed late last week with the Canadian Radio-television and Telecommunications Commission (CRTC), CAIP provided evidence showing that the traffic-shaping system used by Bell limits downstream P2P rates to around 30Kbps during peak times. But those "peak times" aren't just a couple of hours in the evening; they extend from 4:30 PM until 2 AM every day, or 9.5 hours out of each 24.

As CAIP dryly notes, the speed limit "represents a tiny fraction of the 5Mbps downstream data transfer rate" advertised by Bell.

Bell's system appears to be nothing if not effective, though. A look at the graph above shows what happens to BitTorrent bandwidth at exactly 2 AM. The image comes courtesy of a TDCNet employee who was downloading a legal copy of Fedora during that time and who saw his bandwidth surge immediately to 450Kbps once Bell Canada let up on the throttle.

CAIP concludes, "It is fair to say that, in general, for up to 10 hours a day, every single day, customers using applications or accessing content that are targeted (either intentionally or collaterally) by Bell's traffic shaping measures are substantially restricted from enjoying the full benefit of the service for which they have contracted."

The reference to collateral damage is further explained in another filing in which CAIP says that Bell Canada's DPI system is far too aggressive and often filters non-P2P protocols. According to CAIP's research, users that start P2P clients are "flagged" for throttling, and once the flag is set, it actually affects everything from SSH to VoIP.

One unnamed CAIP member did an experiment, showing a 500Kbps download speed on SSH transfers and 4.5Mbps downstream using VoIP speed test software. After firing up a P2P client during the peak hours, then shutting it back down, the member found that SSH speed was now reduced to 30Kbps, as was VoIP. The member concluded that this fit with what he had heard, namely that "once a connection has been flagged as a P2P user, all traffic that is not white-listed is throttled."

Bell: We're saving hundreds of thousands from congestion

Not surprisingly, Bell Canada insists that its system is highly accurate, only throttles P2P, and that all complaints it has seen can be chalked up to other network problems. Its comments largely focus on the need for a DPI-based throttling solution, and the company claims that a full 700,000 users would experience congestion problems by next year if Bell did not roll out its solution.

To prove the point, Bell filed a chart showing the history of "network cell loss" on its ATM-based DSL network (the company is currently building a fiber-to-the-node DSL network, but most of its customers still use the older, more expensive ATM technology). Packets are broken up into cells for routing on an ATM network, and when capacity limits are reached and buffers are exceeded, cells will start to be dropped. When this happens, the entire packet becomes unusable and has to be retransmitted. Since 2002, as usage has soared, these loss events have also increased dramatically.

In laying out its plans for dealing with congestion problems, Bell described a three-pronged approach that includes capacity building, usage-based pricing, and traffic shaping in combination to keep the network operational. "The most logical solution to the congestion problem is to invest the money in expanding the capacity of the network," wrote the company in a CRTC filing. It pointed out that, since 2001, it has spent more than CAN$3 billion in upgrading its infrastructure, and it plans to spend another CAN$500 million in 2008.

But Bell insists that there is no way to build enough capacity to address the issue. Just as highway builders have found that increasing the number of lanes does not translate in the long term into less congestion (because the bigger roads encourage more use), Bell argues that "the nature of the growth of Internet traffic is that as network capacity expands, new user applications invariably also grow to utilize that capacity."

The company certainly could address the problem through buildouts by creating a network that can handle the peak load being advertised to each customer. No network company builds its systems this way, however, due to the cost and the fact that much of the time, this capacity would simply go unused.

Or, translated into highway analogies once more, Bell's Mirko Bibic told the CBC, "If you have a two-lane highway and you have congestion at rush hour, you're not going to build 20 lanes because those 18 other lanes just won't be needed during non-rush periods. So what do you do? You build a couple of extra lanes for one, you expand infrastructure. As well, you do things like a bus lanes that allow buses, taxis, and cars with more than three passengers to travel on them so that they get faster service ban if you choose to drive your Escalade and you're alone on the highway."

Bell claims it is doing the best job it can, though it does admit that it should have given more notification to the ISPs before throttling their users. In bureaucratic speak, this takes the form of saying, "The Company acknowledges the frustration of some of the Applicants' members and has apologized to its wholesale GAS customers." In the future, Bell will give notice of such changes "on the day of implementation, at the latest."

Much of the good stuff, including many specific numbers, was filed confidentially with the CRTC, but at least the regulator now has far more detailed information with which to make a judgment. That judgment, about whether the government should get involved in the entire P2P throttling debate, will likely be made by the end of the summer, but Bell certainly could not have helped its assertion that congestion is a huge problem by opening its own (non-P2P) video download store last week.
http://arstechnica.com/news.ars/post...hrottling.html





Time Warner Cable Tries Metering Internet Use
Peter Svensson

You're used to paying extra if you use up your cell phone minutes, but will you be willing to pay extra if your home computer goes over its Internet allowance?

Time Warner Cable Inc. customers — and, later, others — may have to, if the company's test of metered Internet access is successful.

On Thursday, new Time Warner Cable Internet subscribers in Beaumont, Texas, will have monthly allowances for the amount of data they upload and download. Those who go over will be charged $1 per gigabyte, a Time Warner Cable executive told the Associated Press.

Metered billing is an attempt to deal fairly with Internet usage, which is very uneven among Time Warner Cable's subscribers, said Kevin Leddy, Time Warner Cable's executive vice president of advanced technology.

Just 5 percent of the company's subscribers take up half of the capacity on local cable lines, Leddy said. Other cable Internet service providers report a similar distribution.

"We think it's the fairest way to finance the needed investment in the infrastructure," Leddy said.

Metered usage is common overseas, and other U.S. cable providers are looking at ways to rein in heavy users. Most have download caps, but some keep the caps secret so as not to alarm the majority of users, who come nowhere close to the limits. Time Warner Cable appears to be the first major ISP to charge for going over the limit: Other companies warn, then suspend, those who go over.

Phone companies are less concerned about congestion and are unlikely to impose metered usage on DSL customers, because their networks are structured differently.

Time Warner Cable had said in January that it was planning to conduct the trial in Beaumont, but did not give any details. On Monday, Leddy said its tiers will range from $29.95 a month for relatively slow service at 768 kilobits per second and a 5-gigabyte monthly cap to $54.90 per month for fast downloads at 15 megabits per second and a 40-gigabyte cap. Those prices cover the Internet portion of subscription bundles that include video or phone services. Both downloads and uploads will count toward the monthly cap.

A possible stumbling block for Time Warner Cable is that customers have had little reason so far to pay attention to how much they download from the Internet, or know much traffic makes up a gigabyte. That uncertainty could scare off new subscribers.

Those who mainly do Web surfing or e-mail have little reason to pay attention to the traffic caps: a gigabyte is about 3,000 Web pages, or 15,000 e-mails without attachments. But those who download movies or TV shows will want to pay attention. A standard-definition movie can take up 1.5 gigabytes, and a high-definition movie can be 6 to 8 gigabytes.

Time Warner Cable subscribers will be able to check out their data consumption on a "gas gauge" on the company's Web page.

The company won't apply the gigabyte surcharges for the first two months. It has 90,000 customers in the trial area, but only new subscribers will be part of the trial.

Billing by the hour was common for dial-up service in the U.S. until AOL introduced an unlimited-usage plan in 1996. Flat-rate, unlimited-usage plans have been credited with encouraging consumer Internet use by making billing easy to understand.

"The metered Internet has been tried and tested and rejected by the consumers overwhelmingly since the days of AOL," information-technology consultant George Ou told the Federal Communications Commission at a hearing on ISP practices in April.

Metered billing could also put a crimp in the plans of services like Apple Inc.'s iTunes that use the Internet to deliver video. DVD-by-mail pioneer Netflix Inc. just launched a TV set-top box that receives an unlimited stream of Internet video for as little as $8.99 per month.

Comcast Corp., the country's largest cable company, has suggested that it may cap usage at 250 gigabytes per month. Bend Cable Communications in Bend, Ore., used to have multitier bandwidth allowances, like the ones Time Warner Cable will test, but it abandoned them in favor of an across-the-board 100-gigabyte cap. Bend charges $1.50 per extra gigabyte consumed in a month.
http://news.yahoo.com/s/ap/20080602/...iLx4HOis 0NUE





AT&T Embraces BitTorrent, May Consider Usage-Based Pricing
Dylan Tweney

AT&T's new chief technical officer, John Donovan, wants you to know that his company does not, under any circumstances, slow down BitTorrent users or throw other monkey wrenches in the operation of specific applications.

"No. Never have. No interest in it. It's never been our policy," Donovan told Wired.com when asked if AT&T engaged in packet shaping (the process of slowing down or blocking certain applications' data packets to render them less efficient).

The statement stands in contrast to other ISPs, such as Comcast, which has, a lawsuit alleges, blocked BitTorrent traffic. Comcast has stated that it does not block any websites, applications or peer-to-peer services. Other ISPs, such as Canada-based Rogers, have been observed injecting their own content into internet data, in order to modify the appearance of Google's homepage, for instance.

Donovan did, however, indicate that AT&T will begin testing usage-based pricing starting this Fall. That's driven by the economics of building network capacity, he says, not by an attempt to make more money. According to Donovan, one percent of the company's customers account for 20 percent of the network usage; the top five percent account for 40 percent of the usage. Because the network must be able to accommodate peak traffic loads, AT&T -- like other network providers -- finds itself building far more capacity than most users need, just support the most prolific users.

"It's almost a taxation issue," Donovan said, comparing the overhead required to support the top 1 percent with the annual taxes the corporation must pay. "Traffic on our backbone is growing 60 percent per year, but our revenue is not," he said.

Usage-based pricing trials will be, he says, an attempt to encourage greater efficiency in the way customers use capacity.

"I don't view any of our customers, under any circumstances, as pirates -- I view them as users," Donovan said. "A heavy user is not a bad customer." What he wants to do is gently encourage more efficient usage of his network, and usage-based pricing may be one of the ways that happens.

Such measures may not even be necessary, as Donovan admits that users self-adjust their habits to take advantage of off-peak times. For instance, he said, BitTorrent on the company's network peaks around 4 a.m., when other traffic is at an ebb. Overall P2P traffic accounts for about 20 percent of the network's usage, Donovan said.

But really, he'd rather talk about the massive increase in bandwidth that the company is planning.

On the wireless front, AT&T is currently in the midst of a 3-G upgrade, based on HSPA technology, that will take over-the-air download speeds from 1.7 Mbps now to 7 Mbps in the next phase and, finally, to 11 Mbps. (The company did not provide specifics on when these speeds would be in effect.) Starting in 2012 or 2013, the company will begin its deployment of fourth-generation "Long-Term Evolution" (LTE) technology, which promises speeds of up to 100 Mbps.

For wired internet access, Donovan boasted of a recently-upgrade backbone that's now capable of 40 Mbps, and stated that the company is in the process of deploying fiber optic networks to people's homes, starting with all new housing developments.

It's not just about fat pipes, either: AT&T also wants to bring you content and applications. Top of the list is internet video, with new interfaces that will let you watch any video content online -- not just cable TV channels -- on your television.

"We should be able to radically reshape the interface for TV," Donovan said. "The remote will be dead. The channels will be dead. If all the historical video is available online there's no reason we can't organize that for you."

Even though it aspires to become a content provider, the company is also open to allowing other companies to offer competitive content and applications over AT&T's data lines, Donovan said.

Donovan did not address questions relating to the company's alleged data connections with the National Security Administration. Wired.com reported in 2006 that the company provided NSA officials with full access to customers' phone calls and internet traffic via a secret monitoring closet, a claim that the company has not confirmed nor denied.

AT&T officials insisted that anything related to the company's involvement with the NSA was off the table, as a precondition of the meeting with Wired.com.

Also, Donovan did not offer any specifics on the company's possible plans to monitor network traffic for copyright violations, as public policy chief James Cicconi suggested it might. Donovan said such monitoring was technically possible, and could be targeted either at specific applications or at specific copyrighted content, via deep packet inspection. However, he said the company was not currently monitoring such usage on an individual customer level.
http://blog.wired.com/business/2008/...braces-bi.html





Comcast Beginning 'Net Neutrality' Testing
David Kravets

Comcast will begin testing what the cable concern has described as a "protocol agnostic" approach to managing bandwidth traffic during high-peak periods, Comcast said Tuesday.

Selected customers in Chambersburg, Pennsylvania, and Warrenton, Virginia, are expected to receive e-mails on Wednesday highlighting the program. The 30-day tests are expected to begin Thursday.

"Unless you are an extremely heavy user of internet resources (which is not likely) you will not notice any change to your internet experience during this test," Mitch Bowling, general manager of Comcast online services says in the e-mail. "At the busiest times of the day on our network (which could occur at any time), those very few disproportionately heavy users, who are doing things like conducting numerous or continuous large file transfers, may experience slightly longer response times for some online activities, until the period of network congestion ends."

The move is designed to set aside complaints that the Philadelphia-based company has been throttling BitTorrent data and other peer-to-peer traffic to manage congestion. Comcast's practices have been the subject of hearings before the Federal Communications Commission, which is set to announce new rules concerning the concept of net neutrality.

Comcast announced in March it was switching to a new network management technique by the end of the year for managing bandwidth use and congestion. The company said it was partnering with BitTorrent Inc. of San Francisco, to develop a neutral traffic-management protocol.

Given that peer-to-peer users are the biggest users of bandwidth, it remains to be seen who in practice the new tests would disrupt during congestion periods. For now, rules by the FCC give ISPs broad authority to manage traffic flows, although that might soon change.

Comcast's testing follows the announcement by rival Time Warner Cable, which is to begin tests with customers on Thursday with metered access to bandwidth under a plan in which bigger users would pay more. Comcast has also publicly endorsed a metering plan, but has not roled out one.

Comcast has come under the ire of many digital rights groups for its network management practices. And last week, hackers took out their revenge against Comcast and redirected the Comcast.net homepage for several hours. The FBI is probing the incident. No arrests have been made.
http://blog.wired.com/27bstroke6/200...t-beginni.html





Comcast Tests a New Bandwidth Black List
Saul Hansell

Some Comcast customers who actively download software and video files may soon find one set of unexplained delays replaced with a different sort of equally cryptic slowdowns.

Comcast is starting to test new approaches to protecting its network from what it describes as congestion caused by a handful of customers who use far far more bandwidth than everyone else. Until now, Comcast has been using devices that interfered with the BitTorrent protocol—the most common method for downloading large files from computers of other users. BitTorrent is often used by people exchanging pornography and illegal copies of movies, but creators of video and software also choose to use BitTorrent as an inexpensive way to distribute their creations.

It will test new devices that will keep track of Comcast users and assemble a blacklist of heavy users. Those on the blacklist will find that all of their online activities may slow down at peak times: from downloading movies to checking e-mail.

For now, these restrictions are just as mysterious as the secret blocking of BitTorrent. Charlie Douglas, a Comcast spokesman, said the company would not disclose what sort of usage it takes to get on the black list, how long someone stays on it and if there is any way to get off. Most significantly, Comcast won’t even tell users if they are on the black list.

Comcast, which was criticized for not being forthright about its restrictions on BitTorrent, has promised to find a new approach that will block heavy users of bandwidth regardless of what content or communication protocol they are using.

It is starting three 30-day tests, each of a different sort of hardware that it might use as the traffic cop for its new restrictions. On Thursday, it will start tests in Chambersburg, Penn., and Warrenton, Va. Later in the summer it will conduct another test in Colorado Springs, Colo.

Mr. Douglas said that the test is meant to pick hardware vendor and test different configurations of rules. He points out that the vast majority of users won’t see any changes to their service at all.

“When we roll this out nationally by the end of the year, all those types of questions will be answered,” he said. “We are trying to figure out what do customers want, what techniques need to be in place to create the best user experience.”

Still, how the company can test the effect on its customers without explaining the rules to them and giving them visibility into their own usage remains to be seen. Until that happens, I suspect Comcast will stay on the black list of at least the heaviest users.
http://bits.blogs.nytimes.com/2008/0...ist/index.html





Comcast and Time Warner's New Network Management Techniques Are Neutral…For Now
Mehan Jayasuriya

When discussing Net Neutrality, a phrase that often gets bandied about is “reasonable network management”. Just what, exactly, constitutes “reasonable” network management? While ISPs like Comcast and AT&T would have you believe that packet-spoofing and content filtering are reasonable practices, we here at Public Knowledge disagree. In accordance with the core principles of Net Neutrality, we believe that a reasonable network management technology is one that does not privilege, degrade or prioritize traffic based on the content, applications or services that it is associated with. But what would such a technology look like? This week, Comcast and Time Warner both begin testing network management techniques that don’t seem to violate the aforementioned guidelines. While these technologies are a step in the right direction, they also come bundled with a unique set of challenges.

Clearly, if ten percent of Internet users suck up 80 percent of the available bandwidth on broadband networks, as has been suggested, ISPs should be allowed employ some form of network management to ensure that a few bandwidth hogs don’t ruin the Internet for the rest of us. But how can a provider discourage users from overindulging in high-bandwidth activities without targeting specific applications? Time Warner thinks it has the answer: by doling out a monthly allotment of bandwidth to each user. In the company’s new pilot program, users who stay under their limit will pay the same set fee every month. Users who exceed their limit, however, will be charged for the additional bandwidth used—just like with a monthly allotment of mobile phone minutes.

Starting today, Time Warner subscribers in Beaumont, Texas will be able to choose from a number of different Internet service packages, ranging from a 768Kbps connection with a 5GB cap ($29.95 per month) up to a 15MBps connection with a 40GB cap ($54.90 per month). Any additional bandwidth used (either upstream or downstream) will be billed to the user at a rate of $1 per Gigabyte.

On the surface, these limitations seem somewhat reasonable. However, when you consider that Sprint lets users eat up to 5GB/month on its wireless data network, that 5GB doesn’t seem quite as generous for a wireline connection. And even the “high end” 40GB data cap could prove inadequate. As Ars Technica duly notes, “The Internet is increasingly being used as a vector for distributing software and digital video content and also facilitates multiplayer gaming, video conferencing, real-time collaboration, interactive remote desktop access, file backups, and many other bandwidth intensive activities.” Despite what you think, that 5GB might disappear fast—especially if you have video game consoles, video streaming appliances and online backup services hooked up to your network—as an increasing number of us do.

So, might there be another way to regulate traffic by punishing only the heaviest users while leaving the rest of us to stream video in peace? Comcast seems to think so. In the wake of the controversy caused by the company’s Bit Torrent blockade, Comcast has begun testing a new method of network management that identifies which users are eating up the most bandwidth and temporarily imposes limits on those users during times of network strain. According to a FAQ published by Comcast, “the technique measures only aggregate bandwidth consumption, not the protocol or content being used by customers.” During times of network congestion, the technology “manages [the bandwidth usage of users] until their usage falls below established bandwidth usage thresholds or until network congestion ends.”

In theory, this method sounds a whole lot better than the techniques that are currently being employed by Comcast. However, given the fact that the company previously promised that it only managed traffic during times of congestion, only to have those claims disproved, we might have to take the term “network congestion” with a grain of salt. Also unsettling is the fact that the company hasn’t revealed any further details about what constitutes a high-bandwidth user and how limited those users will be during times of congestion. If Comcast chooses to roll out this type of technology, it will have to be upfront with its customers about what the exact limitations are. And given the company’s secrecy throughout the Bit Torrent fiasco, I wouldn’t hold my breath for that kind of transparency.

So, we’ve established that while technically “neutral,” both Time Warner and Comcast’s new network management techniques are not without their share of issues. There is still, however, one very large elephant left in the room: the fact that both Comcast and Time Warner are cable television providers. And as we all know, despite the industry’s constant invocation of the P2P bogeyman, at present, the largest bandwidth hog is actually streaming video. Clearly, the emergence of online video is something that cable video providers find very threatening and by capping off bandwidth usage, they’re effectively killing two birds with one stone; discouraging users from using their Internet connections for video while increasing the efficiency of the network. Is this anti-competitive? It sure seems like it. But is it anti-neutral? Technically, no. While Time Warner and Comcast both deliver video and Internet service via the same pipe, the two services live on separate networks.

Even that could change, however, depending on how well the cable industry responds to the coming threat of IPTV. While unlikely, it’s possible that both Time Warner and Comcast will branch out into video over IP in the coming years, if such a move is dictated by market pressures. And then what? Will Time Warner count videos streamed using its service when calculating your monthly bandwidth usage? Will Comcast penalize you for purchasing its video content online? If the answer to these questions is ‘no,’ then the two companies will be prioritizing their own video content over video content from other providers on the same network. In which case, we’ll find ourselves back at square one.

SOME
Submitted by barry payne-eco... on June 5, 2008 - 7:27pm.

SOME CLARIFICATIONS

Bandwidth capacity is a measure of momentary (instant) flow use of Gigabits and should not be confused with Gegabyte use over time. Reducing congestion in peak periods is about reducing coincident Gigabit use which may come from large or small Gegabyte users who contribute to congestion on the same per Megabit basis, regardless of their total Gegabyte use over time.

If Comcast restricts only “heavy Gegabyte users” in peak congested periods, then small peak users are getting subsidized by “heavy users” on a per Megabit basis because both are causing the same amount of congestion on that basis.

If Comcast insists on centralized non-price rationing methods to reduce peak congestion for the artificial shortages it has created, at least bandwidth should be reduced for all peak users on some proportionate basis - most likely in proportion to their maximum connection rating. Otherwise, it’s not neutral management of congestion in terms of reduced use based on causality - in conflict with its newly claimed “agnostic protocol management”.

Otherwise, the term “bandwidth hog” is a misnomer, arising both from propaganda to undermine net neutrality as well as the practice of overselling bandwidth in terms of the Gegabytes produced by a connection, then declaring large users as over the line - while simultaneously refusing to draw lines - until now with metered Gegabytes, which is a crude method of rationing bandwidth since off-peak use does not affect congestion.

By continuing to cherry pick away at “heavy users”, the network providers put their market power and strategic pricing control front and center with selective congestion controls and absurd low limits on Gegabyte use with sharp overage penalities. Any competitive market would have a full range of available Gegabytes and bandwidth tiers in Megabits along with multiple levels of service quality and peak/off-peak pricing plans.

Meanwhile, the term “bandwidth hog” should to be challenged everywhere it appears - it represents the essential justification for establishing fast lanes for selective, high-price content versus everything else that gets dumped into the slower bus lanes, the whole grand design touted to “alleviate congestion from the coming exaflood”. What it really means is higher prices will be assessed to escape the artificial shortage, existing service will be degraded and much produced content will be denied access to the fast lane.

There are no “bandwidth hogs” - there are users of different amounts of available maximum Megabits in designated bandwidth tiers, and when they use (acquire) more bandwidth, they pay more and vice versa as explicitly provisioned in the business model of network providers.

Because network providers were caught flatfooted by the increased use of Megabits per connection that they explicity marketed and sold, is not a reason to blame the outcome on “hog” customers, particularly given the intentional underinvestment - it was easy enough to downgrade the connection capacity instead, to be consistent with an uncongested network, but they refused and kept overselling it.

Now that they’ve created the perfect storm of a congestion problem that must be solved by means other than investment or appropriate pricing, the only thing standing in the way of course, is … net neutrality.
http://www.publicknowledge.org/node/1598





Teens Await Arrest after Comcast Attack
Elinor Mills

Updated at 12:15 p.m. PDT to clarify that Comcast wasn't technically hacked, but that its domain and Web site were hijacked.

Two teenagers who say they hijacked Comcast's Web portal on Thursday also say they expect to be arrested for their actions.

"I wish I was a minor right now because this is going to be really bad," 19-year-old "Defiant" told Wired's Kevin Poulsen, who managed to get a one-hour phone interview with Defiant and his 18-year-old cohort "EBK."

"I slept in my clothes, because the last time they came, I was in my underwear with my dong hanging out and shit," Defiant said of a past raid.

On Thursday, Comcast's portal was defaced, leaving some e-mail subscribers without service. On the site, the hackers referenced their group: "KRYOGENICS Defiant and EBK RoXed Comcast."

The teens say that after they initially managed to take control of Comcast's registrar account at Network Solutions, they called the company's technical contact to tell him, but he dismissed their claim and hung up on them.

That response angered EBK, who says he then decided to redirect traffic from Comcast's site to other servers. "I wasn't even really thinking," he said. "Plus, I'm just so mad at Comcast. I'm tired of their shitty service."

Meanwhile, the teens say they did not grab user names and passwords during the hack, even though they could have.
http://news.cnet.com/8301-10784_3-99...tag=ne.fd.mnbc





Comcast Hijackers Say They Warned the Company First
Kevin Poulsen

The computer attackers who took down Comcast's homepage and webmail service for more than five hours Thursday say they didn't know what they were getting themselves into.

In an hour-long telephone conference call with Threat Level, the hackers known as "Defiant" and "EBK" expressed astonishment over the attention their DNS hijacking has garnered. In the call, the pair bounded freely between jubilant excitement over the impact of their attack, and fatalism that they would soon be arrested for it.

"The situation has kind of blown up here, a lot bigger than I thought it would," says Defiant, a 19-year-old man whose first name is James. "I wish I was a minor right now because this is going to be really bad."

The two hackers are members of the underground group Kryogeniks. The interview was arranged by Mike "Virus" Nieves, an 18-year-old New Yorker who pleaded guilty as a minor last year to hacking AOL. Neives, who was on the call, is also a member of Kryogeniks, though he and his compatriots say he's stopped hacking.

Nieves vouched for the identities of the hackers. Threat Level also confirmed Defiant's identity over AOL instant messenger, on a handle that's known to belong to Defiant.

Neither hacker would identify their full names or locations. Defiant's MySpace profile lists him in Cashville, Tennessee, but he says that's incorrect. His girlfriend lists herself in New York. Threat Level expects both hackers' names and locations will emerge soon.

The hackers say the attack began Tuesday, when the pair used a combination of social engineering and a technical hack to get into Comcast's domain management console at Network Solutions. They declined to detail their technique, but said it relied on a flaw at the Virginia-based domain registrar.

Network Solutions spokeswoman Susan Wade disputes the hackers' account. "We now know that it was nothing on our end," she says. "There was no breach in our system or social engineering situation on our end."

However they got in, the intrusion gave the pair control of over 200 domain names owned by Comcast. They changed the contact information for one of them, Comcast.net, to Defiant's e-mail address; for the street address, they used the "Dildo Room" at "69 Dick Tard Lane."

Comcast, they said, noticed the administrative transfer and wrested back control, forcing the hackers to repeat the exploit to regain ownership of the domain. Then, they say, they contacted Comcast's original technical contact at his home number to tell him what they'd done.

When the Comcast manager scoffed at their claim and hung up on them, 18-year-old EBK decided to take the more drastic measure of redirecting the site's traffic to servers under their control. (Comcast would neither confirm nor deny the warning phone call.)

"If he wasn't such a prick, he could have avoided all of that," says EBK. "I wasn't even really thinking. Plus, I'm just so mad at Comcast. I'm tired of their shitty service."

"They called me back five minutes later and said, 'We got Comcast'," recalls Nieves.

The defacement message was short and simple: "KRYOGENICS Defiant and EBK RoXed Comcast," it read. "sHouTz to VIRUS Warlock elul21 coll1er seven."

Comcast boasts 14 million subscribers nationwide, and handling the massive traffic aimed at Comcast.net was no easy task. The hackers stayed up most of the night opening new webhosting accounts, and constantly moving the DNS to follow them. In all, they claim, they burned through 50 different hosts to keep their defacement alive. "You know how hard it is to find hosting handling that kind of traffic?" says EBK "The first one went in two minutes."

The attack began at around 11:00 p.m. Eastern time, and the hackers owned Comcast.net until 4 or 5 a.m. Even when Comcast regained control, it took hours longer for the change to fully propagate through the DNS, leaving some customers without webmail access as late as 11:30 Thursday morning.

EBK slept for an hour Wednesday night; Defiant for 20 minutes. Even as the attack was in progress, the hackers began to feel the weight of their actions. Both say they've been raided by law enforcement before. "I slept in my clothes, because the last time they came, I was in my underwear with my dong hanging out and shit," says Defiant.

"I feel like he did it for the publicity," says Luis "Auto" Alicea, a former member of Kryogeniks, who runs a website hosting screenshots of hacks in progress. "The fame."

Defiant began hacking about three years ago, when he was kicked out of high school for possession of narcotics at the age of 16. "I wound up assaulting the school resource office," he says. He entered a home schooling program, but didn't take to it, and gravitated to the internet. There he "bumped into the wrong people."

EBK, too, says he dropped out of high school.

Thursday, the pair were dealing with their newfound fame, laughing over the press coverage with a mix of glee and nervous excitement. Some reports have speculated that the hackers were retaliating for Comcast's recent sabotage of BitTorrent traffic; Defiant and EBK say that's false: they just hate Comcast in general. "I'm sure they hate us too," says Defiant.

"Comcast is just a huge corporation, and we wanted to take them out, and we did," he says.

Fellow hackers, relying on press reports claiming that customer data may have been compromised, are hitting up the duo for passwords to Comcast e-mail accounts, which they say they don't have. "Nobody was listening in on the ports to try and get usernames and password," says Defiant. "We could have, but we didn't." (On this point, Comcast and the hackers agree).

The hackers say the flaw they exploited still exists, and that other large websites are equally vulnerable. Asked if they plan to attack anyone else, EBK says, "Who knows. Only Kryogeniks knows"

The elder hacker in the team says he was reluctant to use his access to take over Comcast.net, and emphasizes that the pair tried to warn Comcast about the flaw.

"I was trying to say we shouldn't do this the whole damn time," says Defiant.

"But once we were in," adds EBK, "it was, like, fuck it."

(David Kravets contributed to this report)
http://blog.wired.com/27bstroke6/200...t-hijacke.html





Congress Urged to Investigate ISPs Over User Tracking
John Timmer

Last month, we reported that Charter Communications, a major ISP and cable provider, was testing a system that tracked the surfing habits of its subscribers, with the goal of sending them targeted ads. Charter made the system opt-out, meaning that users had to both be aware of it happening, and then find a form on Charter's web site to avoid being profiled. That opt-out feature immediately attracted the attention of Congress, and a coalition of privacy groups are now calling for a full investigation.

Charter's program appears to involve deep packet inspection (DPI), in which hardware scans the actual content of traffic flowing across the ISP's network. In this case, users at a given IP address would have a profile assigned to them based not only on the sites they visited, but also the content of the pages viewed at that site. That profile would be fed to ad agency NebuAd, which would use it to feed its partners ads that it predicts a given individual would be interested in viewing.

The privacy implications here are pretty obvious, and the news of Charter's program spurred a rapid Congressional response. Less than a week after the news broke, the ranking members of the House Telecommunications Subcommittee, Edward Markey (D-MA) and Joe Barton (R-TX), sent a letter (PDF) to Charter's president, asking that the program be stopped until Congress had the opportunity to evaluate it. The letter cites Section 631 of the Communications Act, which requires that any program of this nature requires "prior written or electronic assent of the subscriber."

Clearly, an opt-out service doesn't fit meet this standard. As Markey stated, "Simply providing a method for users to opt-out of the program is not the same has asking users to affirmatively agree to participate in the program."

A coalition of privacy groups has now published an open letter (PDF) to Markey and Barton, voicing its support for their efforts. The 15-member coalition includes the Center for Digital Democracy, Electronic Frontier Foundation, Free Press, and Public Knowledge. Its letter recognizes that reports have surfaced of other ISPs using similar technology, and suggests a wider inquiry is in order. "We are concerned that such ISP wiretapping schemes may violate multiple privacy laws and policies," it reads. "These practices should clearly be investigated."

The letter stresses the urgency of the situation. Terming it a "major new privacy threat," Jeff Chester of the Center for Digital Democracy said in a statement that, "Congress must swiftly act to protect the public." Ari Schwartz from the Center for Democracy & Technology noted, "Congress needs to weigh in now before the practice becomes standard operating procedure for the ISPs."

Beyond the privacy implications, the experience of British Telecom with a similar form of snooping suggests that basic incompetence of the ad agency can have a negative impact on users. Wired found an internal British Telecom document (PDF) on Wikileaks that describes that company's experiment with a JavaScript-based tracking technology. Apparently, the injected code caused strange browser behavior, and snippets of code would sporadically appear in text areas of web forms. This caused some users to suspect their machines had a malware infection, a fear that undoubtedly cost them time and money.

Even when working properly, these programs appear to be illegal if Markey and Barton's analysis is correct. Given that the user snooping program is already in progress, quick Congressional action appears to be essential.
The full list of organizations signing the letter:

Center for Democracy and Technology, Center for Digital Democracy, Consumer Action, Consumer Federation of America, Consumers Union, Electronic Frontier Foundation, Electronic Privacy Information Center, Free Press, Media Access Project, Privacy Activism, Privacy Rights Clearinghouse, Public Knowledge, US Public Interest Research Group, World Privacy Forum, Canadian Internet Policy and Public Interest Clinic
http://arstechnica.com/news.ars/post...-tracking.html





Pirates Slowly Killing MediaDefender
Ernesto

It has been a rough year for MediaDefender and their parent company ArtistDirect. Last September a database of internal emails leaked, and last week they received more bad press for DDoSsing Revision3. Unsurprisingly, MediaDefender’s revenue has dropped significantly as a result.

This is not the first time we have reported on MediaDefender’s poor financial situation, now it’s looking like the company has lost the last bit of goodwill they had left.

Surprisingly, however, MediaDefender - best known for spreading fake files on BitTorrent - does not blame itself for their losses, but the music labels. In their latest quarterly report the company explains the huge drop in revenue as follows:

“Revenues related to MediaDefender’s anti-piracy activities declined in 2007 as compared to 2006 and management anticipates a further decline in 2008. The largest source of this decline is due to reduced spending on the part of the major music labels due to a significant reduction in their sales and profitability.”

So, MediaDefender argues that the music labels are spending less money because their revenue is going down. This is a strange argument, if you consider that the music labels blame piracy for the decrease in sales. MediaDefender’s purpose is to decrease piracy, so either they are not doing their job very well, or there might be another explanation that the labels stopped hiring MediaDefender.

Could it be that the bad press that resulted from the security breach at MediaDefender has something to do with it? Some of the emails that leaked at the time revealed some unique insight into the inner workings of these labels and i’m sure they weren’t too happy about that.

In the quarterly report last year’s email leaks aren’t mentioned at all, even though it could very well be one of the major causes of the decreased revenue. By November 2007 MediaDefender had already lost a massive $825,000 due to the leaks, and more financial damage was to be expected.

Before the email leak, stock was around the $2.25 mark, but this has dropped to less than $0.50. Last week we learned that MediaDefender is not only going after trackers from BitTorrent search engines, but that they’re also targeting businesses like Revision3. This wont do their image any good either, and might bring the company down even further.

So, what will happen now? Revision3’s CEO Jim Louderback said on Twit that they wont pursue the company in court after all. Nevertheless, I’m quite convinced that the company has the ability to walk the plank to bankruptcy, all by itself.
http://torrentfreak.com/pirates-slow...fender-080603/





MediaDefender Defends Revision3 SYN Attack
David Kravets

When MediaDefender rained down an attack of some 8,000 SYN packets a second on an open BitTorrent tracker that pointed the way to hundreds of thousands of copyrighted movies for the taking, it had no idea it was shuttering a legitimate San Francisco media company.

Revision3, the San Francisco-based site the produces and distributes the popular DiggNation show and others via the BitTorrent protocol, went offline over the Memorial Day weekend after its servers buckled under the attack. Revision3's distribution tracker was open, and was pointing the way for pirates to download copyrighted movies unbeknownst to Revision3.

MediaDefender is paid by the recording and motion picture industries to seed fake files to illicit torrent tracking services. When Revision3 closed the tracker during the holiday weekend, the result was a denial of service attack by MediaDefender, which had been seeding the tracker with fake torrents.

"Our systems were targeting a tracker not even knowing it was Revision3's tracker," Randy Saaf, Media Defender's CEO, said in an interview. "They were using the tracker as the tracker for their legitimate content. It had been open for years."

At Fenopy.com, Revision3's tracker was used for 296,000 downloads, mostly of unauthorized copyrighted movies, Saaf said.

Jim Louderback, Revision3's CEO, said the attack shut down the company's internet site, RSS server and internal corporate e-mail.

It's an open debate whether MediaDefender's actions were lawful, even when it targets illicit torrent-tracking sites pointing the way to unauthorized, copyrighted material. The FBI is examining the Revision3 affair.

One bureau source told THREAT LEVEL that it was a "gray" area in federal computer security law.

Then there's the area of corporate responsibility. Louderback said in an interview that Revision3 closed the hole in its tracker over the Memorial Day weekend and subsequently got slammed by MediaDefender.

"That's when MediaDefender went into overdrive and started pummeling us," Louderback said. "If a tracker was previously open and suddenly shut, their systems are automatically configured to put them out of business."

Saaf said MediaDefender had been seeding the tracker with fake torrents for some time. Fake files corrupt BitTorrent downloads.

"We saw an open BitTorrent tracker with a lot of pirated content on it. We had been posting fake files to their tracker. Over Memorial Day weekend, Revision3 changed some configurations," Saaf said.

MediaDefender, of Santa Monica, Calif., holds some 2,000 servers with a 9GBps dedicated connection.

Louderback said if MediaDefender was "concerned that we were tracking copyrighted material, they should have called us."

He wondered aloud over what tragedy may have happened had Revision3 "been an airport using BitTorrent to distribute approaches to the runaway?"
http://blog.wired.com/27bstroke6/200...?cid=117123750





The Pirate Bay: Two Years After the Raid
Ernesto

Today, exactly two years have passed since The Pirate Bay was raided by the Swedish police. Unlike Hollywood would have wanted, the worlds largest BitTorrent tracker now more popular than ever, and they are here to stay.

The raid on the Pirate Bay took down the site, but not for long. Within three days the site was back online, and much to the dislike of anti-piracy outfits, its traffic had doubled thanks to all the media attention.

At the time, the Swedish police confiscated 180 servers, most of which had nothing to do with The Pirate Bay. Last December the investigation finally came to an end, resulting in 4,000 pages of legal paperwork. Prosecutor Håkan Roswall later announced that four individuals involved with The Pirate Bay are being charged with “assisting copyright infringement” of 4 software applications, 9 films and 22 music tracks.

After the raid, it became clear that the US had threatened to put Sweden on WTO’s black list if they refused to deal with the Pirate Bay problem. Even the MPAA was involved, as John Malcolm, Executive Vice President of the MPAA wrote a letter to Sweden’s State Secretary in which he stated, “It is certainly not in Sweden’s best interests to earn a reputation among other nations and trading partners as a place where utter lawlessness with respect to intellectual property rights is tolerated.”

The users of the site don’t have to worry that the site will be taken offline though, no matter what the court decides. “In case we lose the pending trial (yeah right) there will still not be any changes to the site. The Pirate Bay will keep operating just as always. We’ve been here for years and we will be here many more,” Sunde said earlier.

In a blog post, The Pirate Bay team now suggests to make May 31st a day of celebration for pirates: “Let today be the pirates independence day! Today we celebrate the victories we’ve had and the victories that will come. Today we celebrate that we’re united in our efforts. Keep on seeding!”

Happy Pirates independence day!
http://torrentfreak.com/the-pirate-b...e-raid-080531/





Will BitTorrent Sites Become Obsolete?
Ernesto

Researchers from several Universities are currently working on a search technology that could make BitTorrent sites obsolete. While the idea of a completely decentralized filesharing network is not new, there are some downsides that are often overlooked.

BitTorrent may be decentralized, but a large part of the BitTorrent community still relies on centralized websites and trackers. These trackers and torrent sites are considered to be the Achilles heel of the BitTorrent hydra.

At the moment, the top three BitTorrent sites host are handling the majority of all BitTorrent users, and even worse, The Pirate Bay tracks well over 50% of all public torrent files. BitTorrent has welcomed many new users over the past three years, and we are now in the uncomfortable situation where the downtime of one of the larger sites may cause problem for the others, simply because they can’t handle the traffic.

This is exactly what happened last month when Mininova was offline for a day due to a hardware problem. Mininova has well over three million visitors a day, these people went to other sites while Mininova was down, and this increase in traffic got some sites in serious trouble. The question is: Is there an alternative?

The answer to this question is yes and no. A solution to the tracker problem that works pretty well is DHT, or “trackerless torrents”. With DHT you can still connect to other people who are downloading the same file, even when the tracker for that torent is not working properly. Thanks to DHT, people were able to download torrents that were tracked by Demonoid.com, up to six months after the tracker went down. The downside of DHT (the mainline version) is that not all clients support it, and that it is maintained by one company, BitTorrent Inc.

Replacing BitTorrent sites is even more complex. How do you find torrents when there are no BitTorrent search engines that store them? A possible solution to this problem comes from researchers of Cornell University, who developed an Azureus plugin named Cubit. The Cubit plugin allows you to find torrents, and doesn’t require a centralized server as BitTorrent sites do. You basically search for torrent files among other peers, similar to Kazaa and Limewire. An interesting concept, but unfortunately, this also has a lot of downsides.

Cubit opens the gates for floods of spam, because it misses one key feature: moderation. Since BitTorrent has become so popular, anti-piracy organizations like MediaDefender and BayTSP are constantly uploading fake files, and scammers are uploading malware and spyware, often wrapped in fake media players.

To most people is goes unnoticed, but sites like Mininova and The Pirate Bay have a dedicated team of moderators that remove hundreds of fake and scammy torrents a day. Together these moderators remove more than a thousand torrents per site, day in and day out. In addition, most BitTorrent sites also use IP-filters to prevent known scammers and anti-piracy outfits from uploading their content again.

So, for now, Cubit is not yet going to replace BitTorrent sites, as they need to address the lack of moderation first. Tribler, another application that is developing a BitTorrent site replacement that seems to be far ahead of Cubit, already implemented such moderation features and spam filtering. Branded as the “social” BitTorrent client, is also has community features that many people appreciate.

In sum, I think it is safe to conclude that BitTorrent as it is has some weak spots that could cause problems in the future. The Pirate Bay, Mininova and isoHunt - the top three BitTorrent sites - are all involved in a court case. Depending on the outcome of these cases, the need for alternative search technologies may become more apparent. For now, however, we need BitTorrent sites, and in particular their moderators.
http://torrentfreak.com/will-bittorr...solete-080530/





Radiohead to Prince: Unblock 'Creep' Cover Videos
Jake Coyle

After word spread that Prince covered Radiohead's "Creep" at Coachella, the tens of thousands who couldn't be there ran to YouTube for a peek. Everyone was quickly denied — even Radiohead.

All videos of Prince's unique rendition of Radiohead's early hit were quickly taken down, leaving only a message that his label, NPG Records, had removed the clips, claiming a copyright violation. But the posted videos were shot by fans and, obviously, the song isn't Prince's.

In a recent interview, Thom Yorke said he heard about Prince's performance from a text message and thought it was "hilarious." Yorke laughed when his bandmate, guitarist Ed O'Brien, said the blocking had prevented him from seeing Prince's version of their song.

"Really? He's blocked it?" asked Yorke, who figured it was their song to block or not. "Surely we should block it. Hang on a moment."

Yorke added: "Well, tell him to unblock it. It's our ... song."

YouTube prohibits the posting of copyrighted material. If the site receives a complaint from a copyright owner, it will in most cases remove the video(s). Whether the same could be done for a company not holding a copyright is less clear, but Yorke's argument would seem to bear some credence according to YouTube's policies. YouTube, which is owned by Google, declined to comment.

Prince also did not immediately respond to a request for comment Thursday.

The dispute was an interesting twist in debates over digital ownership, held between two major acts with differing views on music and the Internet. Radiohead famously released their most recent album, "In Rainbows," as a digital download with optional pricing. They also have a channel on YouTube.

When Prince performed at the Coachella Valley Music and Arts Festival in Indio, Calif., on April 26, he prohibited the standard arrangement of allowing photographers to shoot near the stage during the first three songs of his set. Instead, he had a camera crew filming his performance.

Prince, who founded NPG Records in 1993, has been innovative when it comes to music distribution, too. He released his 1997 album, "Crystal Ball," on the Internet and in 2006 was awarded a lifetime achievement award by the Webbys. In 2007, he gave away copies of his disc "Planet Earth" in a British Sunday newspaper.

But the Purple One has also shut down his official Web site and in September of last year said he would sue YouTube and eBay for not filtering unauthorized content.

Prince fans have organized to urge him to relent in his legal fights to control images and photographs of himself. As of Thursday, the most popular YouTube clip about Prince playing "Creep" is an expletive-laden rant from Sam Conti Jr., who describes himself as a "former Prince fan."
http://news.yahoo.com/s/ap/20080530/...diohead_prince





Facebook Settlement of Code-Theft Suit May Fold

Connectu claims it has unearthed 'smoking-gun' computer evidence
Erik Larson and Janelle Lawrence

Facebook, owner of the social-networking Web site valued last year at $15 billion, is struggling to enforce a settlement of a copyright lawsuit accusing founder Mark Zuckerberg of stealing computer code.

Founders of ConnectU in February settled claims that Zuckerberg took their business idea in 2003 while they were students at Harvard University. ConnectU's lawyers said yesterday that the company wants out of the deal, citing what they called new "smoking-gun" evidence allegedly found by a forensic expert on Facebook's computers.

"If we are forced into a settlement, the next step is going to be a fraud claim," ConnectU's attorney, John Hornick, told U.S. District Judge Douglas Woodlock at a hearing Tuesday in Boston. ConnectU said the new evidence stems from electronic instant messages found on Facebook's computers.

Closely held Facebook, the world's second-biggest social-networking site, is seeking to enforce the settlement as it expands its reach and challenges News Corp.'s MySpace, the industry leader.

Woodlock declined to elaborate on the new evidence, criticizing Cambridge, Mass.-based ConnectU for signing a settlement before all documents in the case had been turned over. The judge compared the situation to "buyer's remorse."

"The parties chose to do what they did based on imperfect knowledge of what the outcome of the case might be," Woodlock said. "You knew at the time you entered into the agreement it wasn't complete."

The settlement must ultimately be approved by U.S. District Judge James Ware in San Jose, where a related case between the companies is pending. Ware has scheduled a June 23 hearing on the accord.

ConnectU's founders, brothers Cameron and Tyler Winklevoss, originally hired Zuckerberg to help build a dating Web site for Harvard students. They now accuse him of delaying the ConnectU project while secretly building Facebook. The claims include copyright infringement and theft of trade secrets.

The instant messages were discovered by forensic expert Jeff Parmet, hired by ConnectU to scan Facebook's hard drives following a September court order for new discovery, ConnectU's lawyers said. Parmet was prohibited from discussing with ConnectU anything he found that wasn't computer code.

"Parmet had, nevertheless, obliquely given ConnectU's attorneys reason to believe that there were documents, other than produced program code, on the Facebook hard drives relevant to the case which had not been disclosed," Woodlock said in an order Tuesday.

Facebook spokeswoman Erin Zeitler and Hornick didn't immediately return calls seeking comment.
http://www.siliconvalley.com/news/ci_9486529





Facebook, the Princess Phone and a Mattress for Sergey and Eric
John C Abell

Facebook CEO Mark Zuckerberg and Sheryl Sandberg presented interviewer Kara Swisher with a pink phone before they sat down for the interview at the All Things Digital conference.

"We learned this morning from Barry Diller that we are the Princess Phone of our generation," says Sheryl Sandberg, the COO of Facebook. "We didn't know what that was so we went out and bought one."

The 5-year-old company, valued at more than $15 billion, is all about connecting people. Its open development platform makes the program even more appealing to its more than 70 million users.

Zuckerberg said he started to think about his own site as he hacked AOL while he was in high school. He launched the site during a summer off from Harvard and didn't go back. Zuckerberg likes to use the expression that people are sharing themselves on his site.

Zuckerberg says he's met with Sergey Brin and Eric Schmidt from Google. "They came over to my apartment and I think there was just a mattress on the floor," he said -- a memory confirmed by Sandberg, a former Google officer.

He admires Google, but says he plans to keep his own business.

Facebook is growing and the end goal isn't selling the company and bailing, they said. "We're no where near the end of this trend," Zuckerberg says. "We're only four years in so there's a lot left for us to go."

They spend a lot of time watching how people use the site, the two say.

"All conversations come down to the user." Sandberg says. "Everything should come back to what the user wants."

What does the user want? Not Beacon, Zuckerberg says. He called the data-mining program launched in November a failure in the bluntest possible way.

What would he like to see built on those platforms?

"Something for sports would be really interesting, maybe something more for politics, maybe something more for religion," Zuckerberg.

What they've seen is that people aren't looking so much for another Office program. They want to "share themselves" in bursts.

"The trend is towards much smaller, more frequent updates," Zuckerberg says. The future seems to be about tweaking.

"If you look at the original platform, it was very focused on building these boxes for the profiles," Zuckerberg says. "We want to make sure the developers are incentivized to build applications that are engaging to users and trustworthy to users."

Apps that are more engaging will get more play, he says.

"You give people control and they'll share more of themselves, they'll share more info about themselves."
http://blog.wired.com/business/2008/...ok-the-pr.html





College Alumni Magazines Struggle to Compete With Facebook
Cate Doty

Most people read their college alumni magazines for the class notes, immediately flipping to the back to see who was married, had a baby or was promoted to an envy-inducing job. The columns tend to be meatiest at this time of year — class reunion season.

The advent of social networking on the Internet has created a quandary for these magazines, which want to maintain a conversation with alumni but have been slow to embrace the Web. Most schools have set up password-protected sites where graduates can change their contact information, drop a class note or donate money.

But younger alumni, accustomed to second-by-second updates from friends and classmates, are exchanging information in real time on Facebook and MySpace. Why wait for your alma mater to churn out a quarterly journal when you can Twitter all day?

“Certainly as people do more Facebook-ing and MySpace-ing, how they do these things changes and evolves,” said John Rosenberg, editor of Harvard Magazine.

Harvard’s alumni notes are all online and password-protected because of privacy concerns, Mr. Rosenberg said. While some notes do appear in the magazine, they run alongside ads that direct readers to the Web site.

“Until a few years ago, the more electronic stuff there was, the more print we had,” Mr. Rosenberg said. “We’ve had steady growth in class notes pages, but that’s probably leveled off some now.”

While Harvard has taken a hybrid approach, universities like the University of California, Los Angeles, have rid themselves of their printed class notes to save space for other content. Stanford has adopted a zoning system, so that each graduate gets a magazine with class-specific notes.

"There is definitely a different audience online, and it’s younger," said Jack Feuer, the editorial director of U.C.L.A. Magazine. The class notes went online in 2006, and the response from readers has been largely positive, he said.

The online version of Colgate’s alumni magazine is a blog, so people can leave comments about articles and one another, said Charlie Melichar, a spokesman for the university. “Alumni overwhelmingly are the ones making comments on stories, about faculty, to congratulate a team on victory,” he said. “Alumni are certainly not just heavy users — they’re heavy engagers.”

Alumni magazines serve many purposes. They highlight the news and research at their institutions, and serve as prettied-up fund-raising vehicles. But their main appeal — as dormitory common rooms for grown-ups — has increasingly been usurped by Facebook and similar Web sites.

“Over all, universities have been reluctant to embrace social media as a communications channel because they fear a lack of control,” said Sam Huleatt, a Johns Hopkins alumnus. “Most schools now understand that they must establish some presence if they wish to remain relevant in the lives of their graduates.”

Johns Hopkins recently adopted InCircle, a Facebook-like application only open to students and alumni, Mr. Huleatt said.

The details that people include in class notes has evolved over the years, perhaps reflecting a younger generation’s tendency to share more. While some alumni magazines cling to the milestones of marriages, moves, births and deaths, others let people vent about personal issues, often in a way that is well-suited to online conversations.

“They’re talking about everything from their latest career move and how they’re managing it, to raising children with disabilities, taking care of elderly parents,” said John MacMillan, editor of the Smith Alumnae Quarterly.

The management of class notes is an important issue, since fund-raising efforts hinge on making graduates feel connected to their schools.

“While the affinity to the university certainly helps, you can’t just expect that to carry the day,” said Robert Viccellio, the editor of the University of Virginia magazine, which has a circulation of 210,000 and a budget of $1.5 million that is mostly provided by the alumni association. Last year, the magazine introduced a channel on YouTube with Web-only videos that attempt to evoke the spirit of the campus.

Most alumni publications depend at least in part on advertising. For instance, a third of the $1.1 million budget for California, the magazine for the University of California, Berkeley, comes from advertising, said Kerry Tremain, the magazine’s editor.

“Alumni magazines have been for quite a long time one of the more undervalued properties in terms of advertising,” Mr. Tremain said. “They’ve been sort of ghettoized as a kind of organizational newsletter, and not taken seriously.”

One challenge for these magazines is to foster online what readers look for in print — nostalgia for a specific atmosphere.

“What turns someone on at Cornell would leave someone at Dartmouth completely slack-jawed,” said Mr. Rosenberg of Harvard Magazine.
http://www.nytimes.com/2008/06/02/bu.../02alumni.html





Disney and Pixar: The Power of the Prenup
Brooks Barnes

IN April, the Walt Disney Company summoned movie theater executives for a rare audience before its reigning king of animation, John Lasseter. A co-founder of Pixar and director of “Toy Story,” Mr. Lasseter was unveiling the roster of films that an aligned Pixar and Walt Disney Animation Studios planned to release over the next four years.

Walking onstage wearing one of his trademark Hawaiian shirts — this one with yellow and green palm trees — Mr. Lasseter was greeted by giggles and pointing from a smattering of audience members.

“What did you think I’d wear?” he asked amid the titters. A business suit and a pair of mouse ears, most likely.

When Disney bought its rival, Pixar, in 2006 for $7.4 billion, many people assumed the deal would play out like most big media takeovers: abysmally. The worries were twofold: that either Disney would trample Pixar’s esprit de corps (turning Mr. Lasseter into a drone, chanting “Hi Ho” en route to Mickey’s animation mines) or that Pixar animators would act like spoiled brats and rebuke their new owner.

Both companies had a history of acrimony, and Robert A. Iger, the new chief executive of Disney, was a mystery. Could he manage the megawatt personalities Pixar would bring into Disney’s fold? Some analysts, investors and media pundits also questioned the hefty price Disney paid for a small studio that released only one movie a year.

But two years into the integration of Pixar — and as the company rolls out “Wall-E,” a risky love story about robots that is estimated to cost at least $180 million — the merger is notable for how well it’s faring. Indeed, in an industry where corporate marriages often create internal warfare (Paramount and DreamWorks SKG are the most prominent example) Disney and Pixar have found a way to make it work.

“Most acquisitions, particularly in media, are value-destroying as opposed to value-creating, and that certainly has not turned out to be the case here,” said David A. Price, author of a newly published book from Knopf, “The Pixar Touch: The Making of a Company.”

The smooth ride — so far, at least — also seems to be pleasing Wall Street, where grumbling about Pixar’s price tag has died down. Disney’s stock has climbed 28 percent since its 52-week low on Jan. 22, in large part because of investor confidence that the company can overcome a difficult economy by leveraging Pixar’s computer-generated characters across its vast empire. In recent months, Disney’s shares have significantly outperformed those of most of its competitors.

“Cars” tells the story. The film was regarded by some critics as one of Pixar’s weaker storytelling efforts, and it generated soft foreign sales when compared with hits like “Finding Nemo.” But “Cars” has pumped billions in profit into Disney via a wide range of ancillary businesses.

The film racked up over $460 million in global ticket sales and has sold 27 million DVDs. Related retail products have generated $5 billion in sales. A “Cars” virtual world is opening on the Internet, a “Cars” ice-skating show will begin touring the nation in September, and work is under way to bring an entire “Cars” experience to the Disneyland Resort in California.

“You can accomplish a lot more as one company than you can as part of a joint venture,” Mr. Iger said in an interview. “It makes a big difference when everyone is working for the same set of shareholders.”

IN a subtle but important shift, Pixar has matured, allowing its strategic thinking to evolve inside a sprawling corporation. For instance, some of the studio’s executives once resisted sequels and direct-to-DVD efforts, arguing that quality and the brand could suffer. While sequels were not out of the question, they said Pixar’s hot streak hinged on pushing boundaries with original material.

But at Mr. Lasseter’s presentation in April, Disney’s first such event in 10 years, he announced “Cars 2,” a 2012 sequel that will take Lightning McQueen and his pals on a tour of foreign countries. Also in the works are four direct-to-DVD movies built around Tinker Bell.

“We are definitely planning on doing more sequels, just as we are more originals,” Mr. Lasseter said in an interview. “We talk with Bob Iger about which ones make sense to do from a business perspective. But each movie has to be absolutely great or you will snuff out a franchise.”

And the Pixar team, which also has oversight of Walt Disney Animation Studios and the DVD-focused DisneyToon Studios, decided that it was O.K. to outsource some direct-to-DVD animation to an Indian company, a departure from its rigid stance that outside animators could not deliver the necessary quality. (Mr. Lasseter will still closely monitor the efforts, however.)

For the first time, Pixar is also scheduled to deliver two movies in a single year: “Newt,” the story of a salamander’s search for love, and “The Bear and the Bow,” an action-adventure starring an imperious Scottish princess; both films will arrive in multiplexes in 2011.

How Disney and Pixar are making the integration work holds lessons for other executives faced with the delicate task of uniting two cultures. Tactics that have served the companies well include the obvious, like effectively communicating changes to employees. Other decisions, including drawing up an explicit map of what elements of Pixar would not change, have been more unusual.

“None of this has been easy,” said Richard Cook, chairman of Walt Disney Studios, “but it helps when everyone has tremendous respect both professionally and personally for one another.”

Mutual respect was scarce at the two companies just three years ago.

Pixar, based in Emeryville, Calif., and Disney, with its headquarters in Burbank, Calif., had a notoriously strained relationship. Pixar’s chairman and chief executive, Steven P. Jobs, abruptly called off talks to continue a lucrative partnership with Disney, which had helped to finance and distributed such Pixar films as “Monsters, Inc.”

Mr. Jobs, also the chief executive of Apple, had bitterly clashed with Michael D. Eisner, who was then running Disney. The rift encompassed many issues, not the least of which was basic trust. In one incident, Mr. Eisner disparaged an Apple advertising slogan before a Congressional committee and then claimed that he hadn’t — even though his testimony had been transcribed.

The end result was that Mr. Jobs and others at Pixar didn’t place much faith in what their Disney counterparts told them.

After Mr. Iger took the reins at Disney, he restarted acquisition talks and won some early support at Pixar by talking candidly and clearly about the lessons he learned when his previous employer, the ABC television network, endured two takeovers. Pixar executives recall Mr. Iger joking that if he ever decided to write a book, it would be titled “I’ve Been Bought,” because the two merger experiences were so formative for him.

Edwin Catmull, the president of Pixar who was also put in charge of Walt Disney Animation Studios, said, “It became very clear to us that Bob Iger had been through mergers before, both positive and negative.”

Mr. Iger also agreed to an explicit list of guidelines for protecting Pixar’s creative culture. For instance, Pixar employees were able to keep their relatively plentiful health benefits and weren’t forced to sign employment contracts. Mr. Iger even stipulated that the sign on Pixar’s front gate would remain unchanged.

Still, Mr. Catmull concedes that trust didn’t come easily, especially in an age when some companies promise one thing before a merger and then seem to do another once the deal is done.

“It took about a year before there was a collective letting down the guard,” he said. “Initially people were thinking, ‘Is something going to happen?’ ”

Regarding Disney’s list of promises, Mr. Catmull said: “We’ve never had to go back and look at it. Everything they’ve said they would do they have lived up to.”

Mr. Jobs, who became Disney’s largest shareholder and a board member as a result of the transaction, did not respond to interview requests.

In most acquisitions, the conqueror typically reigns supreme. When NBC bought Universal Studios, executives at the movie studio in Los Angeles were — overnight — required to start commuting to New York for grueling financial planning meetings at the behest of NBC’s owner, General Electric.

Employees were also startled to wake up on the morning after the acquisition announcement to find that their e-mail addresses had already been altered to “nbcuni.”

An NBC Universal spokeswoman declined to comment. Although analysts generally think that Universal Pictures has been well served by the G.E. takeover, they cited the company’s aggressive handling of the merger as one reason the studio’s respected chairwoman, Stacey Snider, quit the company.

But in the Pixar acquisition, Disney, despite its legendary corporate identity and strong will, held back. Pixar kept its e-mail system. Nobody was shipped to Walt Disney World in Florida to work a shift, part of the initiation that other executives must endure. No switchboard operators at Pixar were asked to end telephone calls with the words “Have a magical day,” as they do elsewhere in the company.

And, of course, Mr. Lasseter continued to wear whatever he wanted, Hawaiian shirts and all.

In fact, a deep Disney “introduction and visit” didn’t come until this spring, when a random selection of 200 of Pixar’s 800 employees spent the day in Burbank touring the live-action studio and consumer products division.

“There is an assumption in the corporate world that you need to integrate swiftly,” Mr. Iger said. “My philosophy is exactly the opposite. You need to be respectful and patient.”

Key to the successful integration, analysts say, has been Mr. Iger’s decision to give incoming talent added duties. Instead of just buying Pixar and moving on, Mr. Iger understood what made the acquisition valuable, said Mr. Price, the author. “If you are acquiring expertise,” he said, “then dispatch your newly purchased experts into other parts of the company and let them stretch their muscles.”

In Disney’s case, Pixar was assigned the difficult task of turning around a storied animation department that had fallen into disrepair as it struggled to find its footing in a new world of computer-generated pictures. At a low point, the 2002 film “Treasure Planet” flopped so badly that Disney was forced to take a $98 million write-down.

A window into how the rebuilding effort is going will come on Nov. 26, with the release of “Bolt,” the tale of a Hollywood dog star who becomes lost in New York and has to make his way back to California. Mr. Lasseter and his team have heavily reworked the project, including playing up a wickedly funny side character, a hamster.

Although some bloodletting has been involved in Pixar’s efforts to rebuild the studio — the original director of “Bolt” was replaced, resulting in some hurt feelings — Mr. Lasseter said he was pleased with the way the transformation was progressing. “We were very nervous coming in, but to see the change has been amazing,” he said. “Disney has become a filmmaker-led studio and not an executive-led studio. We are very proud of that.”

The relationship could still sour, of course, and big tests loom.

Still very much a work in progress is the turnaround of Walt Disney Animation Studios, where it has taken Mr. Catmull and Mr. Lasseter longer than investors anticipated to sort through the pipeline of existing projects and begin green-lighting new ones.

Disney’s plans for hand-drawn animation are unclear, with only one project currently announced: “The Princess and the Frog,” a musical set in New Orleans that is scheduled to have its premiere in December 2009. A Disney spokeswoman said animators were deeply immersed in marrying older hand-drawn techniques with new technology for future movies, adding that plans for a new headquarters for Disney’s Burbank animators were slowly progressing.

PIXAR’S list of coming movies includes some with unusual concepts that might not lend themselves to the kind of merchandising tie-ins that have made “Cars” a juggernaut. “Up,” the next big Pixar film after “Wall-E,” is a comedy about a cranky, cane-wielding 78-year-old who transports his home to exotic locales by attaching hundreds of helium-filled balloons.

With the exception of “Up,” which is being directed by Pete Docter (“Monsters, Inc.”), Pixar is placing some of its biggest new projects in relatively untested hands. Brenda Chapman, the director of Pixar’s first fairy tale, “The Bear and the Bow,” served as a story supervisor on modern classics like “The Lion King” but has only one previous directing job under her belt, for “The Prince of Egypt.”

Of course, Mr. Lasseter will be helping to guide the way, but he must cope with extreme demands for his time. Aside from overseeing an ambitious slate of movies, Mr. Lasseter, who now shuttles between Burbank, near Los Angeles, and Emeryville, outside San Francisco, is involved in everything from approving special effects for the coming “Cars” ice tour to helping design theme-park attractions.

He also has new corporate responsibilities, from schmoozing with important investors to helping to push Disney’s efforts with high-definition Blu-ray DVDs. All of this juggling, some people say, has made him somewhat inaccessible. One Pixar insider, who requested anonymity because he was not authorized by the company to speak, joked that scheduling a meeting with Mr. Lasseter has become harder than “lining up a chat with the pope.”

Mr. Lasseter, speaking by cellphone during a commute home, said: “The toughest part of my job is probably just managing my schedule. But I think everything is going pretty well.” He added that there have been times in the past — such as when he was directing “Cars” — that his walk — around time at Pixar was limited. “It ebbs and flows,” he said.

FOR now, attention is focused on “Wall-E.” Directed and written by Andrew Stanton, the creative force behind “Finding Nemo,” the picture tells the story of a cuddly trash-compacting robot who lives on an abandoned, heavily polluted Earth 700 years in the future. His sidekick is a perky cockroach named Hal.

“Wall-E,” which features long sequences without dialogue, is under extra pressure to perform at the box office because of soft initial receipts for a recent Disney film, “The Chronicles of Narnia: Prince Caspian.” Adding to the weight are Pixar’s last three films; though all were blockbusters, they have gradually trended downward at the domestic box office. A reversal would quiet critics who say the studio’s best days are behind it. (Disney notes that an increase in foreign box office sales has offset the slide.)

As with “Cars,” Disney is counting on “Wall-E,” set for release on June 27, to take off with a tough crowd: little boys. It has prepared a collection of 300 robot-themed consumer products that will arrive on store shelves over the next month.

“There are some great toys, and we are working on a variety of potential applications for our parks,” said Mr. Iger in a conference call with analysts on May 6. “So we are poised to take advantage of broad and deep success when it comes.”

(He added that he has particularly high hopes for a “Wall-E” remote-controlled robot. “Having played with it, I think it’s going to be a hot seller for Christmas,” he said.)

Wall Street, which closely monitors major animated movies because of their huge cost, is not yet sold on the robot, which was been criticized by some as looking too much like the star of the corny 1986 film “Short Circuit.”

“I can see how it could work and be huge and I can see how it could not,” said Richard Greenfield, an analyst at Pali Research.

By contrast, the competing DreamWorks Animation has received applause for its coming “Kung Fu Panda,” featuring the vocal talents of Jack Black and Angelina Jolie. Ingrid Chung, a media analyst at Goldman Sachs, said recently that she found the film’s concept and execution “strong enough to create a franchise.” When it came to Pixar, Ms. Chung declined to comment.

Detractors might recall that Road Runner and Wile E. Coyote, two of the most beloved cartoon characters of all time, never uttered a word to each other. And movie theater executives, typically tough to please, reacted with robust laughter and applause during a 30-minute peek at “Wall-E” in April.

“It’s some of the best work I’ve ever seen,” said Mr. Catmull, standing in the aisle of the theater afterward as confetti sprinkled from the ceiling. “I am confident it will be the next success story for Disney and Pixar.”
http://www.nytimes.com/2008/06/01/bu...a/01pixar.html





That License to Kill Is Unexpired
Charles McGrath

IAN FLEMING, had he lived, would have celebrated his 100th birthday on Wednesday. James Bond, his greatest invention, is probably a bit younger, strictly speaking (the evidence in the books is a little contradictory) — except that Bond, of course, is ageless and immortal. Never mind those three packs a day; he has wind to spare. His liver, astoundingly, is still holding up. He has survived not only Fleming but Kingsley Amis and John Gardner, who, among others, kept on publishing Bond novels in Fleming’s stead. With a new Bond book just out — “Devil May Care” by Sebastian Faulks — there are now, in addition to the 12 Bond novels that Fleming actually wrote, almost twice as many that he didn’t.

In the movies, whenever a Bond shows the least sign of faltering, he is immediately unplugged and a new one wheeled in. Sean Connery was unforgettable in the role, and Daniel Craig has yet to wear himself out. His second Bond picture, the 22nd in the saga, called “Quantum of Solace,” whatever that means, is scheduled for release in November. But who any longer remembers poor George Lazenby, even though his sole Bond film, “On Her Majesty’s Secret Service,” was actually one of the best, or Timothy Dalton, whose two Bond flicks were among the worst? As for Roger Moore and Pierce Brosnan, they blend in memory into a sleek, somewhat ironic Bond — a little weary, you feel, from carrying all that history around.

Mr. Faulks’s new book, on the other hand, featuring a slightly weary Bond, improbably injects new life into the formula.

“Devil May Care” is in many ways a stronger novel than any that Fleming wrote, both because it’s better written and because it has all the Bond lore to draw upon. It’s a satisfying thriller in its own right, set in the early ’60s and beginning in Paris — very satisfactorily — with a man getting his tongue pulled out with pliers, then traveling to Iran and Russia.

But it’s also a fond and at times funny homage to all the other books in the series. Felix Leiter, Bond’s old American friend, turns up, only now without an arm and a leg after being tossed into a shark tank in “Live and Let Die.” The villain has one hand that resembles a hairy monkey’s paw, and his sidekick, an Oddjob-like character named Chagrin, has to wear a kepi because after an operation to render him a psychopath, his skull plate no longer fits. And the plot is full of little nods in the direction of famous Bond landmarks: there’s a crooked tennis game, for example, reminiscent of Le Chiffre as a cardsharp in “Casino Royale” and of Goldfinger as a cheater at golf.

At a certain level all the Bond stories are the same story. There’s the villain, the girl (in “Devil May Care,” the appealing and surprising Scarlett Papava) and the plot that threatens the end of civilization. Bond thwarts the first, sleeps with the second, gets beaten or tortured, and then reunites with the girl, often while still in his wet suit.

The movies are even more similar, and almost invariably include set pieces like the opening sequence with the gun barrel and the inevitable, flirty interview with Miss Moneypenny. What varies is mostly the escalating gimmickry of the gadgets, the special effects and the sexiness of the actresses. Ursula Andress, emerging from the waves in a bikini in the first Bond pic, “Dr. No” (1962), set the bar very high, and in some ways viewers have been jaded ever since.

But to a considerable extent it’s the series of Bond movies, one of the most successful franchises in film history, that have kept the books going, after a fashion, and not the other way around. In recent years neither the Fleming originals nor the knockoffs have sold particularly well, though Doubleday has high hopes for the new one and is printing an initial 250,000 copies.

Fleming lived long enough to see only the first two Bond movies, “Dr. No” and “From Russia With Love,” which happen to be the most faithful to his texts. Many of the others have little in common with what he wrote other than a title, and the Bond most of us think we know — suave, debonair, unflappable and, in his later incarnations, a little bland — is more nearly the movie character than the one Fleming invented.

Albert R. Broccoli, a producer of the first 17 Bond films, could be said to be a co-creator of this other, meta-Bond. It was he or his writers who made a trademark of the “Bond. James Bond” line, for example, and who insisted on the “shaken, not stirred” business. Fleming’s Bond is not nearly so fussy about what he drinks, as long as there is plenty of it. He’s as apt to slug down bourbon as a martini. This Bond is also much more fetishistic about smoking than he is about drinking and makes a point of ordering his cigarettes (with three gold bands on the filter) from Morlands of Grosvenor Street. (In a pinch, though, he’ll also smoke Chesterfield kings by the carton, and it’s little short of miraculous that he can climb a flight of stairs, let alone swim for miles, as he so often does.) He likes fast automobiles but hates gizmos, except for the odd concealed knife, and wouldn’t get caught dead with the laser watches, ejector seats, tricked-out cars and exploding key chains the movie Bond has been kitted out with, not to mention that embarrassing jet pack.

Fleming’s Bond also has a dark streak of world-weariness and melancholy we never get to see on screen. He’s casually racist (in “Live and Let Die” especially), misogynistic (giving women the vote encourages their lesbian tendencies, he believes) and anti-Semitic in a way that would never be permitted in the movies. And he’s far kinkier sexually than any of his movie incarnations. Good sex for Bond is sex that has “the sweet tang of rape”; when he first goes to bed with Vesper Lynde, in “Casino Royale,” we’re told, he “wanted to see tears and desire in her remote blue eyes and to take the ropes of her black hair in his hands and bend her long body back under his.” And in a surprising number of incidents Bond is beaten or burned around the genitals — most famously by Le Chiffre in “Casino Royale’ but also by Blofeld in “You Only Live Twice” — to the point where his potency is in question.

In all these respects Bond bears a more than passing resemblance to his creator, except that Fleming was a far nastier piece of work. He was born in Mayfair, London, in 1908, the second son of a well-to-do member of Parliament. Like Bond (whose offense was “trouble with one of the boys’ maids”), he was kicked out of Eton, and he dropped out of Sandhurst. He subsequently failed as a journalist and a stockbroker, and the war was his salvation. With few other qualifications than knowing the right people, he became assistant to the director of naval intelligence and eventually rose to the rank of commander (same as Bond), in charge of his own special operations unit.

After the war he returned, half-heartedly, to journalism and more enthusiastically to his main interest: womanizing. In 1952 he married Lady Anne Rothmere, with whom he had been carrying on during her two previous marriages. Their relationship was intense but not particularly faithful on either side, and it was based on a shared taste for what the French call le vice anglais. “I am the chosen instrument of the Holy Man to whip some of the devil out of you,” he wrote to her once, “and I must do my duty however much pain it causes me. So be prepared to drink your cocktails standing for a few days.”

Fleming died in 1964, a premature wreck done in by Bondian habits: 70 cigarettes and a bottle of gin a day. By then he looked, friends said, like a bloodhound who had been out in the sun too long. But the novels, which some of his writer friends, like Evelyn Waugh and Cyril Connolly, delighted in poking fun at, brought him satisfaction and a sense of purpose, not to mention a very nice stream of income. He wrote the first, “Casino Royale,” in just four weeks in 1952, and once he hit on the formula he never deviated, publishing a Bond novel a year until he died. There are better Bond books, and worse ones, but they don’t really evolve, any more than Bond himself does.

At a certain level the Bond books are cold war fantasies, celebrating material comfort and diplomatic importance at a time when Britain didn’t have a great deal of either. When Fleming began writing, British families were still using ration cards and the Empire was mostly a memory. So the books were really wish fulfillments; they took British readers to places, like Jamaica and Haiti, where most of them could never imagine going, and on Bond they projected an image of competence and worldly wisdom.

The plots run as efficiently as Bond’s 4.5-liter Bentley, with scarcely a wasted word, but the books are also extravagant, with their over-the-top villains — Hugo Drax, Emilio Largo, Goldfinger, Ernst Blofeld and his creepy consort, Irma Bunt — and their parade of barely clad heroines so absurdly named they sound like lingerie brands: Solitaire, Tiffany Case, Honeychile Rider, Kissy Suzuki. You get the sense that Fleming — bored, cynical and out of sorts — wrote them to entertain himself as much as the reader. All of them were knocked off at Goldeneye, his estate in Jamaica (now a boutique hotel), with time out for cocktails and snorkeling.

The formula seems easy to imitate, but most of the Bond knockoffs are pretty disappointing. The dozen or so by Mr. Gardner are particularly bad; they’re clumsily written and manifest a regrettable politically correct tendency, giving Bond low-tar cigarettes to smoke, for example, and a Saab to drive. But even Mr. Amis’s Bond novel, “Colonel Sun,” which was published in 1968 under the name Robert Markham, is a little stiff and joyless. Mr. Amis, who also wrote “The Book of Bond, or Every Man His Own 007,” loved the Bond novels and wasn’t slumming when he agreed to try one.

If anything, he took the project too seriously. “Colonel Sun” is fussily written, without Fleming’s flair for sweeping generalizations, and the plot — a Communist Chinese scheme to wreak havoc on the Middle East — is literal and overly complicated. Even worse, the girl, a Greek partisan named Ariadne, and the villain, Colonel Sun, are dull and uninspired. The latter’s evilness seems to consist mostly of just being Chinese, or “a yellow slug,” as M., Bond’s superior, calls him. Mr. Amis doesn’t even do much with the sex scenes, which are of the “they had become one creature with a single will” variety, though he does manage a nice torture sequence, with the colonel, who scorns genital assault as “too unsophisticated,” preferring to drive a skewer through his victim’s eardrum.

Mr. Faulks is not a thriller writer but a highly regarded writer of literary fiction, probably best known for “Birdsong,” set in World War I, and “Charlotte Gray,” set in World War II. Both feature a certain amount of spying, though not of the Bondian sort. His last book, “Engleby,” is about a journalist who becomes a psychopath.

When Mr. Faulks was first approached by the Fleming estate, he “thought it was pretty droll, actually,” he said in a recent phone interview from London, where he lives. “I thought I was a very odd choice indeed, and I was amused by the whole idea.” But Mr. Faulks was between books at the time, so he agreed to reread the Bond novels, which he hadn’t looked at since he was a teenager. “They were quite a lot better than I thought they would be,” he said. “I wouldn’t say I was on the edge of my seat, but I did enjoy them, and I thought they were pretty well written, in a journalistic way — free of cliché. There are some very silly things, like the plot of ‘Goldfinger,’ and some of the names of people are just ridiculous. But on the whole my reservations rather evaporated.”

One key to a successful knockoff, he decided, was finding the right story, and eventually he came up with one that involved both the catastrophic cold war ominousness that Fleming so loved and the kind of specific crime plot that energizes the best of the Bond novels. In “Devil May Care” the villain is trying to undermine Western civilization by addicting everyone to cheap drugs. A subplot involves a rogue C.I.A. operative who wants to drag Britain into Vietnam.

“Mostly I just had fun,” Mr. Faulks said. “I wrote the book the way Fleming did — 2,000 words a day, except I left out the cocktails and the snorkeling.”

“Tuning into the style was the difficult thing,” he continued. “You have to hear the tone. That applies to your own book as well as to anyone else’s. And so finding that style, that pitch, was all-important. With Fleming, once I’d got his voice I developed a sentence structure that was about 20 percent mine and 80 percent his — plenty of verbs, not many adverbs or adjectives. The real danger was getting too close and then winding up in parody territory.”

He added: “I didn’t anguish, and I didn’t feel Fleming looking over my shoulder. The only difficulty I had was when I wanted to slow the story down, to allow a page or two for something significant to sink in. I thought that I could draw a little on Bond’s inner life, but I found that Bond doesn’t really have an inner life.”
http://www.nytimes.com/2008/06/01/movies/01mcgr.html





Michelangelo for Readers With Deep Pockets
Elisabetta Povoledo

The gala presentation of “Michelangelo: La Dotta Mano” (“Michelangelo: The Wise Hand”), a volume of photographs of this Renaissance master’s sculptures, may well have been the most lavish book debut in history.

With Piazza Maggiore, Bologna’s main square, as the backdrop, a short video depiction of the volume, which can be seen on www.fmronline.it, was followed on Thursday night by an hourlong spectacle that included dozens of costumed dancers, a string quartet playing from a stage suspended in midair, suckling pigs roasted over a pit, a fake snowfall and a foppishly dressed acrobat walking Spiderman-style up the facade of San Petronio, the city’s cathedral.

But then, this is no ordinary book, starting with its retail price of 100,000 euros, or around $155,000, at Friday’s exchange rate.

Included in the price of what its publishers are calling “the most beautiful book in the world” is a sleek black case, its own stand and a 500-year guarantee.

“This isn’t an appliance,” Marilena Ferrari, chairman of the book’s publisher, Gruppo FMR, told Bologna’s mayor and guests at the book’s official presentation in a grand salon in City Hall on Thursday morning. “That’s the amount of time we feel we can guarantee the materials we used to craft it.”

Using the high standards of the privately published books in the 19th century — an ideal known as the “book beautiful” — as a starting point, FMR sought expert artisans from various fields to create something Ms. Ferrari described as “a work of art in itself.”

Aurelio Amendola’s black-and-white photographs were printed on paper made exclusively for the project. There are detachable reproductions of Michelangelo drawings on handmade folios created according to centuries-old traditions. And then there’s the cover: a scale reproduction in marble of the “Madonna della Scala” (“Madonna of the Steps”), a bas-relief of the Virgin and Child sculptured by Michelangelo when he was still in his teens. The original is housed in the Casa Buonarroti in Florence.

It took two white-gloved attendants to lug around the 46.2-pound book at its City Hall debut.

The marble cover was the trickiest aspect of production.

“It was difficult to find the right depth,” said Nanni Tamar, the project’s production manager. Six sculptors of marble are working on the first 33 copies in a limited edition of 99. “We broke a lot of slabs along the way,” Mr. Tamar said.

This isn’t the most expensive book ever made. There are books incorporating precious metals or gemstones that increase the price, like that of the entrepreneur Roger Shashoua, whose memoir, “Dancing With the Bear,” according to its Web site, dancingwiththebear.com, comes in a diamond-encrusted “special oligarch” edition that ranges in price from $1 million to $6 million.

Luxury publishing in general seems to be on the upswing. “From my experience, it’s growing,” said Ovais Naqvi, chief executive of Gloria, a new luxury publisher that this year came out with a book about New York City that sells at $2,500 to $15,000.

“There are a certain amount of people who are testing how far the market can be pushed,” Mr. Naqvi said.

Because production of the Michelangelo book is so labor-intensive (Ms. Ferrari likened the process to a Renaissance workshop), aspiring buyers can expect a six-month wait, the same as for a Ferrari (the car), said Pietro Tomassini, FMR’s commercial director.

“We think it will sell out in a very short time,” he said. Customers in the United States, Europe and Russia have already reserved copies, he added, though he declined to say how many.

Cristiano Collari, the book specialist for Christie’s auction house in Milan, was a little taken aback by the price, which he said was comparable to that of good copies of rare ancient texts like the “Hypnerotomachia Poliphili” (1499), which he described as the “bibliophile’s prime fetish.” But even contemporary art books can turn out to be good investments, Mr. Collari said, though the market is always hard to predict.

For this first title in its “Book Wonderful” series — apart from a forthcoming book about Catherine de Medici, the rest are top secret — FMR chose to pay homage to Michelangelo and to time its publication to coincide with the 500th anniversary of the first painted stroke on the Sistine Chapel ceiling in the Vatican, which took place in May 1508.

The question remains, who would pay so much for such a book?

Franco Negretto, a financial consultant here who was awed by Thursday night’s spectacle — “I’ve seen a lot of shows in this square, but this was one of the best” — said he’d been sold by FMR’s pitch, despite the price tag.

“I’ll do everything I can to buy it,” he said solemnly.
http://www.nytimes.com/2008/05/31/ar.../31michel.html





Electronic Device Stirs Unease at Book Fair
Edward Wyatt

Is the electronic book approaching the tipping point?

That topic both energized and unnerved people attending BookExpo America, the publishing and bookselling industry’s annual trade show, which ended at the convention center here on Sunday.

Much of the talk was focused on the Kindle, Amazon’s electronic reader, which has gained widespread acclaim for its ease of use. Jeffrey P. Bezos, the founder and chief executive of Amazon, spent much of a packed session on Friday evangelizing about the Kindle, which he said already accounts for 6 percent of his company’s unit sales of books that are available in both paper and electronic formats.

But excitement about the Kindle, which was introduced in November, also worries some publishing executives, who fear Amazon’s still-growing power as a bookseller. Those executives note that Amazon currently sells most of its Kindle books to customers for a price well below what it pays publishers, and they anticipate that it will not be long before Amazon begins using the Kindle’s popularity as a lever to demand that publishers cut prices.

Overall, traffic at the book fair seemed lower than in past years, a reflecting perhaps that some editors did not make the long trip west from Manhattan, as well as the fact that the growth in the book business has slowed.

While authors including William Shatner, Andre Dubus III and Ty Pennington drew big crowds of booksellers seeking autographs, several books by little-known authors scheduled for publication were being pushed hard by publishers. Those include two that use witches, of a sort, as their protagonists and one whose author is in shaman training.

One, “The Heretic’s Daughter,” is a novel about Martha Carrier, the first woman to be accused, tried and hanged as a witch in Salem, Mass. The author, Kathleen Kent, is a 10th-generation descendant of Carrier (though not a witch herself, said Reagan Arthur, an editor at the book’s publisher, Little, Brown). Another, “The Lace Reader,” by Brunonia Barry, is set in modern-day Salem, where the narrator hails from a family of women who can read the future in a pattern of lace. The novel, being published by William Morrow in July, was previously self-published by the author.

Kira Salak, the author of the third novel, “The White Mary,” draws on her travels across Papua New Guinea for an account of a journalist searching for a missing reporter who is thought to have committed suicide but might still be alive. According to Sarah Knight, an editor at Henry Holt, the author has undergone shaman training in Peru.

Booksellers, who make up the other major group attending the publishing convention, are also concerned that electronic books could become more than a passing fancy for an electronically savvy subset of customers. “It certainly does feel like a threat,” said Charles Stillwagon, the events manager at the Tattered Cover Book Store, a large independent bookseller in Denver.

Nearly all publishers say their sales of electronic books are growing exponentially. Carolyn K. Reidy, the chief executive of Simon & Schuster, said its sales of electronic books will more than double this year compared to last year, after growing 40 percent in 2007 from 2006. David Shanks, the chief executive of Penguin Group USA, said his company sold more electronic books in the first four months of 2008 than in all of last year.

The numbers are still small, which helps to account for the rapid growth. Ms. Reidy said that electronic book sales last year totaled about $1 million, a sliver of its annual sales of roughly $1 billion. During the convention, Simon & Schuster said it would convert an additional 5,000 titles to electronic format this year, more than doubling its number of electronic books and making available many of the best-selling books on the company’s backlist of consistent sellers.

Electronic books have been available since 1968 and have gained broader attention at least since 2000, when Stephen King sold 600,000 copies of “Riding the Bullet,” an electronic-only thriller, in two days. Now, however, “we’re finally at the tipping point,” Ms. Reidy said.

Much of the expected growth in electronic books can be tied to the Kindle. When Amazon introduced the product, it sold out of the machines on the first day. The company needed months to adjust its manufacturing capacity and supply chain to be able to keep Kindles in stock, which Mr. Bezos said it has now accomplished.

The chief competitor to the Kindle is the Sony Reader, which has been on the market since 2006 and has also helped boost sales of electronic books. Some technology critics have given the early advantage to the Kindle, however, which downloads books, daily newspapers and magazines wirelessly; the Sony Reader downloads content via a wired connection.

Even Mr. Bezos said he does not expect electronic books to replace bound paper versions anytime soon. “Anything that lasts 500 years is not easily improved upon,” Mr. Bezos said. “Books are so good you can’t out-book the book.”

But he also claimed that Kindle users are buying more books, not simply exchanging one format for another. He said that after buying a Kindle, Amazon customers purchase just as many physical books and two and a half times as many books overall, or three electronic books for every two physical copies.

Some publishing executives dispute that claim. “We don’t see people buying both versions,” Mr. Shanks said. “I think there is almost a one-to-one cannibalization.”

But neither Amazon nor Sony will say how many of their products they have sold, making it impossible for publishers to assess the size of the market or for bookstore owners to evaluate the threat.

One publisher estimated that Amazon had sold roughly 10,000 Kindles, while another estimated that as many as 50,000 electronic-book readers of all types are in general circulation. But both publishers, who spoke on the condition of anonymity, said that those figures were little more than educated guesses.

Amazon sells most Kindle books for $9.99 or less. Publishers say that they generally sell electronic books to Amazon for the same price as physical books, or about 45 percent to 50 percent of the cover price. For a hardcover best seller like Scott McClellan’s “What Happened,” the former press secretary’s account of his years in the Bush White House, that would mean that Amazon appears to be selling the selling the book for about 25 percent below its cost.

(Mr. Bezos probably did not endear himself to people in the publishing industry fearful about his company’s power when, in response to a question after his speech, he waxed enthusiastic about how his “lottery ticket” wealth from the success of Amazon is allowing him to invest in a project to provide commercial travel to suborbital space.)

Electronic readers have nevertheless gained many fans in the publishing industry. Random House and Penguin, among others, have equipped their entire sales force with electronic-book readers, allowing them to avoid having to lug around as many preview editions of books. Editors at many of the larger publishing houses also use the devices to read manuscripts submitted by agents and authors.

A big advantage of the products is that bookstores never sell out of copies of an electronic book, something Mr. Bezos demonstrated by downloading and reading from “What Happened,” which in hardcover format has sold out in many stores. Amazon itself expects to be unable to ship new copies until June 21, according to its Web site. Barnesandnoble.com says it expects the book to be available June 6. That too makes bookstore owners nervous about the future of electronic books. “We’re always concerned with any competition,” Mr. Stillwagon, of Tattered Cover, said. “The technology has progressed, and people are embracing it. For us, every book sale counts.”
http://www.nytimes.com/2008/06/02/books/02bea.html





I’m my own grandpa

RepRap - Open Source Machine 'Prints' 3-D Objects, Including Copies Of Itself

Dr Adrian Bowyer, a senior lecturer in engineering in the Faculty of Engineering & Design at the University of Bath, has created RepRap, an open source prototype machine that has succeeded in making a duplicate of itself - by printing its own parts and building a clone.

RepRap is short for replicating rapid-prototyper. RepRap employs a technique called ‘additive fabrication’. The machine works a bit like a printer, but rather than squirting ink onto paper, it puts down thin layers of molten plastic which solidify. These layers are built up to make useful three-dimensional (3D) objects.

RepRap has, so far, been capable of making every day plastic goods such as door handles, sandals and coat hooks. Now, the machine has also succeeded in copying all its own 3D-printed parts.

These parts have been printed and assembled by RepRap team member Vik Olliver in Auckland, New Zealand, into a new RepRap machine that can replicate the same set of parts for yet another RepRap machine and so on ad infinitum. While 3D printers have been available commercially for about 25 years, RepRap is the first that can essentially print itself.

The machine will be exhibited publicly at the Cheltenham Science Festival (4-8 June 2008).

Dr Bowyer said: “These days, most people in the developed world run a professional-quality print works, photographic lab and CD-pressing plant in their own house, all courtesy of their home PC. Why shouldn't they also run their own desktop factory capable of making many of the things they presently buy in shops, too?

“The possibilities are endless. Now, people can make exactly what they want. If the design of an existing object does not quite suit their needs, they can easily redesign it on their PC and print that out, instead of making do with a mass-produced second-best design from the shops. They can also print out extra RepRap printers to give to their friends. Then those friends can make what they want too.”

Recently, Chris DiBona, Open Source Programs Manage at Google Inc, encouraged people to: "Think of RepRap as a China on your desktop."

Sir James Dyson, Chief Executive of the Dyson Group, said: “RepRap is a different, revolutionary way of approaching invention. It could allow people to change the ergonomics of a design to their own specific needs.”

Dr Bowyer hopes people will come to the Cheltenham Science Festival and see both the 'parent' and the 'child' RepRap machines in action for the first time together.

"RepRap is the most enjoyable research project I've ever run," he said. "And without the many talented and selfless volunteers the RepRap project has all round the world, it would have never succeeded so quickly."

Complete plans for the prototype RepRap 3D printer and detailed tutorials to aid motivated amateurs (and professionals) in assembling one are available to everyone free at the RepRap website (details below). The materials, plus the minority of parts that the machine cannot print, cost about £300. All those non-printed parts can be bought at hardware shops or from online stores.

Adrian and several of the other Reprap team members will be available to answer questions and exhibit the parent and child Darwin printers in operation at the Cheltenham Science Festival on 4 – 8 June 2008.
http://www.scientificblogging.com/ne... es_of_itself





Windows 7: The Story So Far
Gregg Keizer

This week, Microsoft Corp. went on a 24-hour marketing blitz to talk up the next version of Windows, simply called "Windows 7" for now.

Although some of what Microsoft's executives and spokespeople had to say was how much they weren't going to say and why, a few informational dribs and drabs have worked loose from Redmond.

What, exactly, do we know about Windows 7, the successor to Vista -- the operating system that if not troubled then at least, as Gartner analyst Michael Silver puts it, carrying " a lot of perception issues?"

Not a lot. Certainly not nearly enough for some of those constituencies thirstiest for details. But here's what we do know, or at least know because Microsoft's said it's so.

When will Windows 7 be released? Depends on who's talking, apparently. Early Tuesday, two Microsoft executives, Chris Flores, a director with the Windows Client communications team, and Steve Sinofsky, the senior vice president who heads Windows development, both pegged the release of the Vista follow-on as early 2010.

"We're happy to report that we're still on track to ship approximately three years after the general availability of Windows Vista," said Flores in an entry on a company blog.

"[We] will continue to say that the next release of Windows, Windows 7, is about three years after the general availability of Windows Vista," Sinofsky told News.com that same morning.

Tuesday night, however, another company executive -- the one who heads the org chart, in fact -- said different. At the Wall Street Journal 's All Things Digital conference, Steve Ballmer , Microsoft's CEO, put Windows 7's ship date as "late 2009."

The spread between early 2010, which would be the "three years after the general availability of Vista" -- that OS went into general distribution at the end of January 2007 -- and "late 2009" may not sound significant, but only a few months separated Vista's actual release from an earlier date that would have meant the operating system made it into computers in time for those PCs to sell during the 2006 holiday season.

What will Windows 7 be like? Under the hood, a lot like Vista, according to the tidbits that Microsoft tossed out this week.

Flores was almost expansive on the subject, and noted that Windows 7 would "carry forward" the "long-term architectural investments" made in Vista. "Windows Vista established a very solid foundation, particularly on subsystems such as graphics, audio, and storage. Windows Server 2008 was built on that foundation and Windows 7 will be as well," he said.

In fact, Sinofsky and Flores confirmed other like-Vista aspects of Windows 7, including the fact that the new OS will be released in both 32- and 64-bit versions -- there was some speculation earlier that it would be a 64-bit operating system only -- and would, as Flores said, run on the same hardware as recommended for Vista.

Has Microsoft said anything about specific features it plans to ship in Windows 7? A little, but only that. Tuesday night, Microsoft demonstrated a touch-screen feature that the company said would be integrated into Windows 7.

The feature, which incorporates technology Microsoft debuted last year as its Surface project, appears similar to the gesture-based multi-touch tools built into Apple Inc.'s iPhone and MacBook Air, though on the latter the touch is limited to a larger-than-normal trackpad, not the entire screen.

Nothing else? The sessions list for the upcoming Professional Developers Conference , scheduled to run Oct. 26-30, has a couple of clues.

One session, says the current list, will focus on battery life -- presumably batteries in notebooks first of all, but also for other mobile devices Microsoft hopes to get Windows 7 into.

"Windows 7 provides advances for building energy-efficient applications," says the write-up. "In this session we will discuss how to leverage new Windows infrastructure to reduce application power consumption and efficiently schedule background tasks and services."

Other sessions at the conference will tackle such Windows 7 topics as "Graphics Advances," "Touch Computing" (but we already knew that), and "Web Services in Native Code." That last sounds intriguing, considering Microsoft's push-push-push on its "Software + Services" concept.

The OS, says Microsoft, will include a new networking API (application programming interface) to support building SOAP-based Web services in native code. "This session will discuss the programming model, interoperability aspects with other implementations of WS-* protocols and demonstrate various services and applications built using this API."

Will Windows 7 sport a new kernel? Nope.

Last October, a Microsoft engineer revealed that the company had 200 programmers working on slimming down the Windows kernel for Windows 7; he dubbed it "MinWin" and said it would sport a memory footprint less than one-sixth that of Windows Vista's kernel.

Last week, though, Flores and Sinofsky both said Windows 7 won't sport a new kernel. "Contrary to some speculation, Microsoft is not creating a new kernel for Windows 7," Flores said.

Sinofsky put it differently. "The key there is that the kernel in Windows Server 2008 is an evolution of the kernel in Windows Vista, and then Windows 7 will be a further evolution of that kernel as well," he said.

Will Windows 7 be a major or a minor release? The parsing of these adjectives is important because post-Vista, Microsoft said it was planning to update its operating systems on an alternating major-minor basis, with the major upgrades -- think XP to Vista -- every four years, with minor ones in between. A good example of a minor upgrade would be Windows XP SP2, which though called a "Service Pack," was unlike any other SP in the new features and capabilities it added to the previous OS.

Trouble is, Windows 7 sounds like a minor upgrade, but Flores and Sinofsky called it the opposite. "Another question we often get asked is whether Windows 7 is a major release," said Flores. "The answer is 'yes'."

Sinofsky used the adjective "major" six times during the interview with News.com, as in "major undertaking," "major release," and "major and significant release."

Another clue: Windows 7 will use the same device driver model as Vista. That OS, remember, required new drivers for all hardware -- a disruption that even company executives struggled with, as some said in internal e-mails released earlier this year as part of a class-action lawsuit against Microsoft.

The mixed message -- is it major or is it minor? -- confused at least one analyst. Michael Cherry of Directions on Microsoft. "To me, a 'major' update means major changes to the core functionality of the operating system." With Microsoft saying it was going to build atop Vista, not start from scratch, Cherry said he wasn't getting the impression that core functional would significantly change.

Why is Microsoft playing it so close to the vest on Windows 7? Good question.

Microsoft essentially said it learned a lesson from Vista, when it promised features -- such as a retooled storage subsystem called WinFS -- that it ended up yanking from the operating system as development dragged and deadlines grew near.

"We can significantly impact our partners and our customers if we broadly share information that later changes," said Flores in a separate entry on a Microsoft blog Tuesday.

Analysts, including Directions' Cherry and Gartner's Silver, said much the same. "They talked more publicly about Vista, but in the end that didn't make them a lot of friends," noted Silver earlier this week.

So, is Microsoft dumping Vista? No. Company executives, including its CEO, came to praise Windows Vista, not bury it, even as they touted its replacement.

Steve Ballmer defended Vista Tuesday when he talked at the All Things Digital conference. "Vista is not a failure, and it's not a mistake" Ballmer said in response to a question. Nor is Microsoft throwing in the Vista towel. "Are there things that we will continue to modify and improve going forward? Sure," Ballmer added.

Flores, meanwhile, trumpeted Vista's sales numbers. "As of March 31, we had sold more than 140 million Windows Vista licenses," he said.
http://www.pcworld.com/businesscente...ry_so_far.html





The Confessions of Barry Diller

The media mogul almost lost it all in an epic battle with partner John Malone. Now he talks about what went wrong—and how he plans to reinvent himself one more time.
Duff McDonald

It's a few weeks before Barry Diller almost lost everything, and he is in his element, at the Four Seasons restaurant in midtown Manhattan. Movie producer Harvey Weinstein is here, as is activist investor Carl Icahn. Diller, uncharacteristically, is sharing the spotlight with CBS chief Les Moonves in a panel discussion about the future of media.

Eventually, the subject turns to Diller himself, whose future at this moment looks precarious. For once, a man who has made a career of micromanaging his own myth is scriptless. The following week, a state court judge in Delaware will hear a lawsuit between Diller and John Malone, the media executive and erstwhile Diller ally who is threatening to strip Diller of everything: his control of IAC/InterActiveCorp, the internet company the two have been bickering over; Diller’s perch inside the Frank Gehry-designed IAC building, on Manhattan’s West Side; his reputation as one of the last of the badass brawlers in the media world; and perhaps most important, his peerless—and until now nearly flawless—ability to craft and maintain his own legend, even if IAC’s performance of late hasn’t exactly seemed to warrant it. (View slideshow.)

“It’s very odd that two people who don’t want to give up control of anything are giving control to a judge in Delaware," Diller says. “It’s unfortunate.”

Within a few weeks, Diller was vindicated. In late March, the judge ruled in his favor, Malone was forced to give up his fight, and an embarrassing public showdown ended. But Malone and his colleagues at Liberty Media had managed to use the trial to get to the heart of the Diller myth. With testimony and evidence that seemed relevant only in its capacity to embarrass the mogul, Diller’s adversaries made an issue of his huge paycheck and lavish lifestyle, as contrasted with the subpar performance of IAC, which has recently been an unqualified disappointment. (View an interactive feature explaining the ups and downs of Diller’s career.)

A few weeks after the court’s ruling, in a conference room just outside his spacious office in the IAC building, Diller still has the air of someone who has just survived a car crash. Instead of dismissing every third or fourth question with his trademark disdain, he is displaying an un-Dillerlike mellowness. “It was absolutely not something we sought,” he says somewhat quietly when I ask about the trial. “The only thing that remains is that it’s over.”

Diller then proceeds to make an astonishing admission: After all this time spent selling the world on his idea of an internet conglomerate, he now realizes that he was wrong from the start. Diller says he’s utterly committed to the idea of an anticonglomerate, blowing up IAC and leaving the company’s disparate parts to operate on their own. “We decided, ‘Enough of this integrated-conglomerate pretension.’ We were kidding ourselves if we thought we could pull off an integrated conglomerate that acts like G.E. or P&G in anything less than 10, 20, or 30 years. It took them 100 years to get there.” (Read Lloyd Grove's interview with Diller, here.)

If Diller were running for president, his rivals would label him a flip-flopper, and they would be right. But Diller is no politician, despite a personal magnetism that is reminiscent of Bill Clinton’s. Nor is he a typical businessman. Rather, he is a bundle of contradictions. He is a onetime internet visionary now accused of being a has-been. He is a Hollywood showman out of context in the nerd’s world of the internet. He is a dealmaker masquerading as a day-to-day executive. And more recently, he has become a man whose outsize legend has seemed increasingly at odds with his ability to deliver the goods.

But now, at the age of 66, he has a new plan—to dismantle his 13-year-old company and create five separate units. The part Diller himself will continue to run will be made up of a number of relatively small entities. With so few pieces to keep track of, this so-called new IAC will be a model of transparency compared with the old one.

Diller is forthright in saying that his strategy for IAC over the years has been guided as much by curiosity as by anything that might constitute an actual business plan. This is a novel approach for the leader of a publicly traded company. The only others who practice it so openly are Larry Page and Sergey Brin, at Google. But their curiosity has been justified by wealth creation to the tune of $170 billion, a far cry from Diller’s own. Yet as George Mair wrote in his 1997 book, The Barry Diller Story, “Diller is one of the few executives in the entertainment business who can raise billions of dollars with just his name and vision as collateral.”

IAC’s roots trace back to 1995, when Diller, recently fired from home-shopping network QVC, hooked up with Malone at a broadcasting company called Silver King, which the two later merged with the Home Shopping Network, QVC’s main rival. From there, HSN embarked on a dizzying series of acquisitions, shifting its focus from shopping to entertainment and eventually to the internet. A number of Diller’s moves were particularly well-timed. In 1997, he bought the USA Network and a passel of other entertainment properties from Seagram, sold them at a profit to Vivendi, and secured himself a $275 million gig as a part-time executive in the process. In doing so, he also extracted a concession from Malone about his future autonomy that proved to be his ace in the hole in March.

His early Web moves were prescient. Deals of note include nabbing 50 percent of Ticketmaster from Microsoft co-founder Paul Allen in 1997 in exchange for 17 percent of HSN, snatching up Hotels.com and Match.com in 1999, and paying $1.5 billion for 51 percent of travel website Expedia in 2002. In mid-2003, investors were cheering him on from the sidelines, and the market valued IAC at about $60 billion.

But since then, Diller has seemed less a visionary and more a spastic dealmaker. He has missed some big acquisition opportunities, including MySpace, which was snapped up by News Corp. for a fraction of what it’s worth today, and ticket broker StubHub, which would have folded in nicely with Ticketmaster. Instead, Diller went in for questionable deals, such as the 2005 purchase of the old-media catalog company Cornerstone Brands, an acquisition he has described as a mistake, and the 2006 purchase of ShoeBuy.com, a distant also-ran behind market leader Zappos.com.

His once-vaunted theme of interactivity, which had a sexy sheen 10 years ago, now seems stodgy, akin to making “We sell things” your corporate mantra.

His costliest misstep has been holding onto mortgage middleman LendingTree, which he purchased for $726 million in 2003. Diller could have made a fortune for IAC if he had sold LendingTree at the height of the housing boom in 2005, which is the kind of move you’d expect a master dealmaker to pull off. Instead, he held on, and he now admits that the unit is worth “vastly less” than what he paid for it. IAC wrote down the value of LendingTree by $475.7 million in 2007. Expect more where that came from.

While Diller may be perceived as a titan, Cowen & Co. analyst Jim Friedland says the value he’s created in the recent past has been puny. “Give or take, the return on invested capital has roughly been between 4 and 5 percent over the past several years,” Friedland says, “which is about the same return you could have received if you’d bought a Treasury bond.” If IAC’s cost of capital is 10 percent, which is Friedland’s estimate, Diller and his curiosity have been destroying value to the tune of about 5 percent a year since 2004.

Of course, the most relevant measure of the value of a publicly traded company is the price of its stock. From December 31, 2004, through April 25 of this year, IAC stock was down 63.3 percent, while the Nasdaq composite index had gained 11.4 percent. The company has pretty much been going through one wrenching transition after another for the past several years, and the stock has performed poorly over much of that time. The synergy that Diller so desperately sought among the more than 60 individual brands IAC owns has failed to materialize in any meaningful fashion. Diller nevertheless points out that IAC stock is up 237 percent since the company’s creation in 1995, even as the S&P 500 has risen only 138 percent.

"The best asset they have is Diller, who is running an internet company the same way you'd run a media conglomerate," says senior analyst Jeffrey Lindsay of Sanford Bernstein. “He had a good run for a few years, when the assets were firing on all cylinders. The mark of a very good business, though, is how well it can ride out a downturn. At this minute, it doesn’t seem to be doing it that well.”

The Gehry-designed IAC building is a monument to Diller himself. It’s a flashy, shape-shifting wonder at the edge of New York’s hottest neighborhood. Getting to Diller starts with walking through a lobby that seems designed for a catered cocktail party. A massive video screen showing the traffic on various IAC websites sits behind the reception desk.

The inner sanctum is dead quiet. The offices of just five executives—each with its own balcony—take up the entire sixth floor. It’s hard not to be intimidated. Indeed, many people who have crossed paths with Diller in recent years warned me not to take it personally if he came across as belittling. In fact, he is disarmingly polite, almost soft-spoken. He is smaller than you would expect but gives off an air of bottled intensity.

The Diller legend has been laboriously constructed, put together piece by piece. There were the nights at Studio 54 in New York 30 years ago, when he hung out with Warren Beatty, Calvin Klein, and Mike Nichols. He was named ABC’s programming chief at the age of 26. At 32, he was offered the chairmanship of Paramount. From there he went on to launch the Fox network. The lasting impression is that for a while, Diller was the ultimate Hollywood mogul. “In the flesh, he was power incarnate,” producer Dawn Steel wrote in her book They Can Kill You but They Can’t Eat You. “He was the sexiest man I’d ever met. He handled power differently from anyone I’d ever known, in this very complex, sexual way.... You couldn’t not look at him.” (VIDEO: Watch Diller explain how he broke into the entertainment industry with no college degree.)

Diller was always a hybrid, equal parts business guy and showman. Like his old friend David Geffen, with whom he worked in the mailroom at the William Morris Agency, he is addicted to the deal. At Paramount, he cooked up tax-advantaged deals structured in ways that other moguls couldn’t understand. He’s bought and sold more companies than Rupert Murdoch himself.

More than that, he was making the connections and building the reputation that would last him throughout his career. Some of the most powerful executives in Hollywood in the past 20 years—Michael Eisner, Jeffrey Katzenberg, Dawn Steel, and producer Don Simpson—worked for him at Paramount, where they became known as the Killer Dillers. At Fox, he teamed up with Murdoch, who remains a close friend. When Murdoch sealed the deal to buy the parent company of the Wall Street Journal in August, Diller hosted a party for him on a yacht anchored off Manhattan.

“Sure, he’s a bundle of contradictions. But most people—most people I like, anyhow—are,” says Kurt Andersen, a media veteran who has done business with Diller over the years—including, most recently, the launch of the website VeryShortList.com. “If you’re famous, your public persona can often be reduced to a noncontradictory cartoon. But with Barry, his contradictions are just more vividly apparent than most.”

Diller has also consistently cultivated strong relationships with the media, providing financial support for The Charlie Rose Show, for example. As a result, he’s been a repeat guest on the program. He’s also bankrolling a news-aggregation website headed by former New Yorker and Vanity Fair editor Tina Brown. “He expresses himself better than anyone I know in business,” Brown says.

“Take him on at your peril,” warns Howard Stringer, the chairman of Sony. “People in the press are afraid to ask him a stupid question because the entire world will know in 30 seconds how stupid it is.”

Diller has used his formidable social and media networks to help wall off his public persona from his business one, an invaluable trick in tough times. Social chronicler Dominick Dunne—who sat at the same table as Diller at an awards ceremony only weeks before Diller’s trial was set to begin—makes that clear. “You never would have had a clue from his conversation or his speech that he was dealing with big problems in his life,” Dunne says, referring to the fight with Malone. “I admire him for that.”

Diller crafts his private persona as carefully as his public image. The social life on display is that of a bon vivant who swans around New York and Hollywood with his wife of seven years, fashion designer Diane von Furstenberg. Diller owns one of the world’s largest private yachts, the 305-foot-long Eos, and hosts a lavish pre-Oscars party at his home in Beverly Hills’ Coldwater Canyon. But in fact, Diller is a fiercely private man who spends much of his time while in New York at the Carlyle Hotel. Few know, for instance, that his brother was murdered in California in 1975 after a number of run-ins with the law. And though speculation about Diller’s sexuality has swirled for years, he has never addressed the topic.

There's no denying that Diller is an extremely smart man. He speaks in well-constructed paragraphs. It's received wisdom in media circles that you don’t tangle with him. There’s the story about the time he threw a videocassette at someone’s head and the one about his making a senior executive cry. While his supporters go to great lengths to cast his prickliness in a positive light, the truth is that the guy can be ruthless. “He’s got elephant balls,” David Geffen once told a reporter.

John Malone surely knew this, which is probably why he hired technology executive Greg Maffei as C.E.O. of Liberty Media in 2002. If, as has been speculated, Malone was about to set Liberty on a collision course with IAC—and by extension, Diller—he might as well have a fall guy in the event the strategy failed. While Maffei had an impressive résumé, with senior-executive stints at Microsoft and Oracle, what he also had was a contentious history with Diller. Maffei had been chairman of Expedia when it was acquired by IAC in 2002, and according to his own testimony, somewhere in the confusion, he lost track of some $28 million in options that subsequently expired and became worthless. Maffei appealed to Expedia C.E.O. Dara Khosrowshahi to reinstate the options, but Khosrowshahi refused. Diller testified at the trial that when Maffei asked Khosrowshahi to change the option dates of his agreement, Khosrowshahi told him, “I’m not going to jail for you.”

While to billionaires like Malone and Diller, the loss of $28 million might not mean much, it rankled Maffei. In Delaware, when Malone was asked whether Maffei had a grudge against Diller, Malone understatedly responded, “We knew that there had been a history.” Maffei would proceed to build on that history, spending the next few years slowly ratcheting up the pressure on Diller, who contends that Maffei openly criticized him with growing frequency.

Maffei’s public remarks led Diller to confront him during one of media banker Herb Allen’s Sun Valley, Idaho, retreats, accusing Maffei of acting a little “high school” and asking that they find a way to change the tone. He says that Maffei agreed. But Maffei only redoubled his efforts, inviting a Wall Street Journal reporter to accompany him in the fall of 2007 on the company jet from New York to Colorado, where the reporter met with Malone. That flight eventually led to a front-page hit job that Malone himself participated in but later disavowed.

It’s hard to believe that Malone didn’t see what was coming, especially considering the numerous zingers he offered up to the reporter. On ownership of IAC: “The hook is set. It is our company. Barry ain’t going to be able to spit the hook.” On Wall Street’s view of Diller: “There was a time when there was, I think, a 20 percent Barry premium. Today you could argue there is a Barry discount.” Last, Malone said, “It is a little uncomfortable for Barry. Right now we are the shadow that walks around behind him.”

When I tell Diller that I don’t quite believe his testimony that he was “hurt” by the Journal article, he doesn’t pause for a second. “You’re wrong,” he says. “I was. But I wasn’t hurt by Greg Maffei. Greg Maffei can’t hurt me. But John Malone, with whom I have had a very long relationship? What he did absolutely hurt me.” Diller nevertheless hopes to patch things up with Malone. “Malone was the only credible witness they had,” he says.

While the trial itself was mind-numbing at times, the subtext was riveting: John Malone, slayer of moguls, was looking to destroy the reputation of a man whose myth he had helped create. News coverage of the trial failed to adequately convey this aspect, given the dailies’ need to cover the incremental developments.

The gist of the dispute is this: Diller decided that in the process of splitting IAC into five pieces, he would also strip Liberty of its supervoting rights in four of IAC’s five companies. Liberty owns some 30 percent of IAC’s stock but 62 percent of the votes through its ownership of supervoting shares.

In 1995, Diller made it clear that his motives in joining forces with Malone were to be his own boss and to have a serious piece of the action. The two men agreed that Diller would vote Liberty’s stake in the company through a proxy agreement. But Diller soon found himself in the very situation he’d hoped to avoid. Major shareholders blocked his efforts to buy NBC and then nearly derailed his purchase of Expedia.

As a result, Diller told Malone that unless he could shake off the restrictions, he was out. Malone acquiesced. The question in Delaware was whether Diller had the right to split his own company if he desired. Judge Stephen Lamb decided that he did.

Diller says he had no choice but to bring things to a head. “Because of that article, I thought, one, that we would never be able to make a deal with them, and, two, that I didn’t want to negotiate with them anyway. That was personal. They were really out for the throat of the company.”

During the trial, Maffei seemed to enjoy his moment in the spotlight, smiling and laughing with Liberty’s lawyers during breaks. It helped that he was paid $19.2 million for his efforts in 2007—more than triple his 2006 pay of $5.7 million. Malone, whose natural expression seems almost a scowl, showed practically no emotion, while his neatly combed hair suggested a boy on his way to Sunday school. Diller was confidence incarnate in a blue pinstripe suit. It’s an amazing thing to see charisma on display: Malone, who has almost none, barely attracted a sidelong glance from the gallery. But when Diller walked into the room, it seemed for an instant that no one could look away.

Almost from the start, Maffei and Malone sought to make the trial a referendum on the performance of IAC’s stock and Diller’s pay, even though neither issue was legally relevant. When I asked Maffei about the motivation for Liberty’s lawsuit, he stuck to the company line: “First and foremost, this isn’t about the performance of IAC, or stock performance, or vanity buildings, or anything else like that. This is about the fact that Barry Diller sued us and made a proposal where he would steal our votes.”

Since taking the helm of IAC in 1995, Diller has pulled down $1.1 billion for his efforts. Virtually all of that money came from a few early option grants approved by Malone himself.

Diller is tired of answering questions about his pay but insists that he is not defensive about it. “Look, when you’re dealing with amounts of money this large, none of it is justifiable,” he says. “There is no moral right to any of this. But I earned this money over 10-plus years, not in one single year. And while it’s a genuine waste of time for me to try and explain this yet again, I want you to imagine that you’re a shareholder and you could go back 14 years, when you’re talking about a company that was technically bankrupt, a company that had lost $70 million the previous year. Would you have any problem granting me those options if you knew that 14 years later, even in a depressed market, that company would be worth $13 billion? What would your vote be?”

When I ask Diller how he feels about being called a relic of Web 1.0, he laughs. “I don’t pay too much attention to moments in time. I’ve had too many of them.” He goes on to say that if being labeled Web 1.0 means he owns a handful of internet properties that actually generate revenue and profit, then he’s guilty.

“That’s true of some of our businesses,” he says. “But thank God for that, because they produce the revenue that lets us innovate and create brand-new businesses.” He points to his firm’s initiatives in the online gaming space as an example. GarageGames.com is a site for developers of online games, and InstantAction.com is where those games will live. “That’s $50 million we’ve laid on the table on an idea,” Diller says.

Yet with only a handful of companies to work with, it is unlikely that his greatest skill—using highly complex deals to shift money around—will be of much use. Consider one of his new properties: FiLife.com, a financial site that’s a joint venture with Dow Jones. FiLife—which hired Dave Kansas, a former editor for TheStreet.com and the Wall Street Journal, to great fanfare—seems like it may be a dead man walking. Staffers are bailing, and word is that the site may never enjoy an official launch.

Of course, Diller will continue to experiment with public shareholders’ money, critics be damned. IAC president of programming Michael Jackson, who has worked with Diller on and off for the better part of a decade, says this of the company’s media strategy: “Barry says, ‘We all know there’s something going on here. We don’t quite know what we’re going to do, but we will start, put one foot in front of the other, and find our way. Not everything is going to succeed. Unless you’re out punting, though, you can’t really know what the audience will engage in.’ ”

Diller’s ultimate challenge is to guide IAC to a place where it’s once more earning the respect of the stock market, bringing the reputation of the company and the man in sync. For a minute there, during the panel discussion at the Four Seasons, the world was privy to that rarest of moments: Barry Diller gave us a glimpse of vulnerability. Don’t expect to see that again anytime soon.
http://www.portfolio.com/executives/...Diller-Profile





Malone on the Ropes?

Looking back on the Battle of the Moguls in Delaware Chancery Court, Liberty Media may have failed to make its case.
Karen Donovan

John Malone and Barry Diller did not disappoint as they played out a soap opera of sorts in Delaware Chancery Court last week.

Their lawyers were at work on final briefs due today at the chambers of Vice Chancellor Stephen Lamb. He has asked for information on two matters:

Did Diller violate his contract with Malone's Liberty Media in his plan to spin off four IAC/Interactive business units into separate companies?

And was Liberty too hasty in suing, given that the board at Diller's IAC has not yet voted on the spinoffs?

At a hearing last Friday, Lamb said he would rule on the contract claims by March 28.

IAC Share Price

It's a fair bet that Liberty Media will have an uphill battle in winning the judge on the claims: For all the star power of Diller and Malone offering their own versions of the disintegration of their business marriage, the case may come down to how their lawyers interpreted a single clause in the governance agreement for their arrangement.

The two moguls, who have worked together for 13 years, each had a star turn at the trial.

Malone, appearing icy and aloof, called Diller's spinoff plan—which would, coincidentally, dilute Liberty Media's voting stake in the various businesses from about 62 percent to 30 percent—a "breach of faith" under a proxy agreement. (That agreement, by the way, does explicitly allow Diller to vote the Liberty Media shares—even against Liberty's own best interest, apparently.)

For his part, Diller, as method actor, "projected" during his time on the stand, at one point recounting an icy meeting with his fellow mogul after the Wall Street Journal published a front-page story in which Malone criticized Diller at great length.

But how did each executive score on the key contract point: What kind of latitude does Diller have to vote Liberty Media's shares in IAC after Liberty gave him its proxy?

Since 1995, Liberty Media has had a veto right over Diller's voting proxy on certain matters. Diller and his legal team from Wachtell, Lipton, Rosen & Katz have portrayed this provision as bowing to Liberty's concerns about Federal Communications Commission rules against cross-ownership of broadcasters.

Liberty, on the other hand, has characterized the veto power much more broadly.

The case could come down to a "he said/she said" match between two key lawyers for Liberty Media and IAC over how the veto provision has evolved over the years. It was last revised in 2001, when IAC merged the USA Network with Vivendi Universal.

Testimony from the lawyers who negotiated that deal differed on what kind of veto power Liberty Media retained.

Frederick "Buzz" McGrath, a partner with the New York office of Baker & Botts, who has represented Malone since 1992, testified that the veto clause was a "catchall protection" for Liberty.

But he could not provide evidence to support that recollection when pressed by Lamb.

"Is there anything in the writing from 1995 that confirms that testimony?" the judge asked.

"No, I don't believe so," McGrath responded.

"Did you communicate it to anyone at Wachtell, Lipton in 1995?" the judge then asked, referring to the law firm representing Diller's IAC.

"Not that I recall," McGrath replied. In fact, McGrath repeatedly admitted that there was no written communication confirming the catchall nature of Liberty's right to veto Diller's proxy.

The Diller response to Liberty is that the veto related only to "regulatory" matters, fundamentally the Federal Communications Commission's cross-ownership restrictions.

On this point, Liberty's lawyer, Pamela Seymon of Wachtell, was quite forceful. She testified that "alarm bells would have gone off in my head" had the "contingent matters" provision been a catchall in the 2001 negotiations.

Seymon also agreed that it was "fair" to characterize the veto provision as one that related to regulatory matters. "It's my interpretation," she said.

On Diller's right to exercise the proxy to vote in favor of spinoffs with a single-tier voting structure, Seymon was clear: "As a contractual matter, he can," she testified. "Remember that there is a board of directors here as well."

Seymon has a point: The IAC board last considered the spinoff at a January 16 meeting. Diller gave a speech at the time and Martin Lipton of Wachtell explained the board's liability, or lack thereof, if they voted in favor of the plan. The board has yet to act.

Malone testified that he left the legal details to his lawyers, while Diller was adamant that a veto provision that would have given Liberty Media a catchall would have set off "alarm bells" for him because "a fundamental purpose" of the Vivendi transaction was to "remove the consent rights" that Liberty previously held.

Stay tuned.
http://www.portfolio.com/news-market...iller-Over-IAC





Fire Destroys Buildings At Universal Studios In LA
Sue Zeidler

A fire roared through part of Universal Studios film and TV studio on Sunday, damaging well-known movie sets and a popular "King Kong" attraction before being brought largely under control after 12 hours, fire officials said.

Universal, one of the world's six major film studios, had to close its popular theme park for the day because of the fire but it did not interfere with Sunday's taping of the popular MTV Movie Awards at the adjacent Gibson Amphitheater.

About 500 firefighters from several Los Angeles-area fire departments battled the blaze, which caused no fatalities but injured nine firefighters and a deputy sheriff, said Los Angeles County Fire Inspector Ron Haralson.

By late afternoon he said the backlot fire was contained to a single structure -- the "King Kong" exhibit -- as firefighters used bulldozers to move burning videotapes and other flaming debris.

The blaze destroyed about five structures within a faux New York set used in various movies and television shows, including one sound stage. Also damaged was the "King Kong" attraction, an alley from "The Sting" and a set from "Back to the Future."

Sunday's fire burned some of the same back-lot areas destroyed by a blaze in 1990, which whipped through the New York Street and a set used for "Ben Hur." It took years to rebuild at an estimated cost of $50 million.

Universal is operated by NBC Universal Inc., which is 80 percent owned by General Electric Co and 20 percent by French communications and utility company Vivendi.

Universal said it would resume its normal business hours Monday at 10 a.m., when all rides and attractions, including the studio tour, would be operating.

The fire caused traffic jams for miles in all directions to the studio, where a building housing a video vault had been badly damaged and the vault itself was "compromised."

A Universal spokeswoman said about 40,000 to 50,000 videos had been damaged but the studios either had copies of those films or could easily copy them.

The contents of a second vault holding master copies of older and classic movies were salvaged.

"Nothing irreplaceable was lost," said Ron Meyer, Universal Studios' president and chief operating officer.

The studio said the full damage had not yet been assessed.

Los Angeles County Fire Inspector Darryl Jacobs said the blaze was first reported about 4:45 a.m. The cause was not immediately clear.

Firefighters encountered explosions from propane tanks and called in helicopters at one point to drop water.

Universal Studios is bounded by the city of Los Angeles and communities like Burbank. It is home to the Universal Pictures movie lot and Universal Studios Hollywood theme park.

Several acres on the 230-acre (93-hectare) back-lot area, where films and TV shows are produced, were burned but the theme park was largely unaffected.

Universal Studios Hollywood houses attractions such as "Revenge of the Mummy - The Ride" and "Shrek 4-D." Its "CityWalk" mall has 65 restaurants, nightclubs and shops.

Universal Pictures, with a history dating to 1909, has been a major producer of hit films, and tapped a young Steven Spielberg to make 1975's "Jaws." The director still houses his production company, Amblin Entertainment, on the lot.

Other hit Universal titles have included the "Back to the Future" and "Jurassic Park" movies.
http://www.reuters.com/article/newsO...41774920080602





Fire Tears Through Movie Lot in Los Angeles
Kevork Djansezian

One of Hollywood's largest movie studios starred in a disastrous sequel Sunday as a fire ripped through a lot at Universal Studios, destroying a set from ''Back to the Future,'' a King Kong exhibit and a streetscape seen frequently in movies and TV shows.

It was the second fire at the historic site in nearly two decades, leveling facades, hollowing out buildings and creating the kind of catastrophe filmmakers relish re-creating. This time around, thousands of videos chronicling Universal's movie and TV shows were destroyed in the blaze.

But Universal officials said that they were thankful no one was seriously injured at the theme park and that the damaged footage can be replaced.

''We have duplicates of everything,'' said NBC Universal President and Chief Operating Officer Ron Meyer. ''Nothing is lost forever.''

The blaze broke out on a sound stage featuring New York brownstone facades around 4:30 a.m. at the 400-acre property, Los Angeles County Fire Chief Michael Freeman said. The fire was contained to the lot, but about 400 firefighters were still trying to put it out several hours later.

The cause of the fire is under investigation. Damage was expected to be in the millions of dollars.

The iconic courthouse square from ''Back to the Future'' was destroyed, and the famous clock tower that enabled Michael J. Fox's character to travel through time was damaged, fire officials said. Two mock New York and New England streets used both for movie-making and as tourist displays were a total loss, Los Angeles County Fire Inspector Darryl Jacobs said.

An exhibit housing a mechanically animated King Kong that bellows at visitors on a tram also was destroyed.

All three sites were either damaged or destroyed during another fire at Universal Studios in November 1990. That fire caused $25 million in damage and was started by a security guard who was sentenced to four years in prison after pleading guilty to arson.

The park remained closed Sunday afternoon as hundreds of visitors waited outside the gates, where acrid smoke lingered. Fire officials didn't believe air quality would pose a health hazard to the public. On a typical weekend day, about 25,000 people visit Universal Studios.

Mike Herrick of San Diego watched the fire on television from his hotel before deciding to return to Universal Studios for a second day with his wife.

''By gosh, we're going to go and get whatever we can out of it,'' Herrick said. On Saturday, Herrick rode the tram that winds around the studio lot, snapping photos of the King Kong attraction, among other sights.

The fire broke out along New York Street, where firefighting helicopters swept in for drops and cranes dumped water on the flames. A thick column of smoke rose thousands of feet into the air and could be seen for miles.

''It looked like a disaster film,'' said Los Angeles City Councilman Tom LaBonge.

At one point the blaze was two city blocks wide, and low water pressure forced firefighters to get reserves from lakes and ponds on the property. Six firefighters suffered minor injuries.

''The water pressure situation was a challenge,'' Freeman said. ''This fire moved extremely fast.''

Meyer estimated there were 40,000 to 50,000 videos and reels in a video vault that burned but said duplicates were stored in a different location. Firefighters managed to recover hundreds of titles.

The videos included every film that Universal has produced and footage from television series including ''Miami Vice'' and ''I Love Lucy.''

Universal Studios, nine miles north of downtown Los Angeles, has thrill rides and a back lot where movies and television shows are filmed, including scenes from ''War of the Worlds,'' ''When Harry Met Sally'' and ''Scrubs.''

The fire will not affect the 2008 MTV Movie Awards, which is to broadcast live Sunday night from the Gibson Amphitheatre in the adjacent Universal CityWalk, according to the music network.
http://www.nytimes.com/aponline/us/A...o-Fire.html?hp





Universal Studios Fire Sparked by Blow Torch
Steve Gorman

A fire that burned through a large swath of the Universal Studios Hollywood back lot during the weekend was accidentally sparked by workers using heating tools on a film set, fire officials said on Monday.



The blaze erupted before dawn on Sunday in a portion of the lot containing exteriors used to resemble a New York City streetscape. It reduced a two-city-block area of the lot to ashes and burned through much of the adjacent Courthouse Square set that has appeared in such films as "Back to the Future" and "To Kill a Mockingbird."

Also destroyed was the popular "King Kong" attraction featured in the Universal Studios Theme Park tram tour of the back lot, and a warehouse where thousands of copies of archived TV shows and films were stored. Studio officials said all of the material lost in the video vault could be replaced.

More than 400 firefighters battled the flames late into the night. Nine firefighters and a deputy sheriff suffered minor injuries, Los Angeles County Fire Chief P. Michael Freeman said at a news conference.

He said an investigation revealed the fire was touched off by three members of a studio work crew who had been using a blow torch to apply asphalt shingles to the roof of a building facade.

They finished their work at about 3 a.m. and stood watch for an hour, according to company policy. Seeing no signs of a fire, they left the scene for a break, but a security guard in the vicinity noticed flames about 45 minutes later and called the fire department.

The fire, which burned for about 18 hours, forced authorities to close the theme park for the day, but the facility was reopened to tourists on Monday morning.

Much of the same area scorched by Sunday's blaze had been destroyed by a 1990 arson fire and was subsequently rebuilt.

Firefighters were hampered on Sunday by low water pressure at times, but Freeman said the difficulty seemed to result from the overwhelming water demands posed by the blaze. At the height of the fire, more than 18,000 gallons of water per minute were being poured into the flames, he said.

Only one current TV show, the CBS series "The Ghost Whisperer," was staged on the portion of the lot damaged by the fire. That series is on summer hiatus and not scheduled to resume production until June 11, a studio spokeswoman said.

She said no movie productions were affected by the blaze.

Universal is operated by NBC Universal Inc, which is 80 percent owned by General Electric Co.
http://www.reuters.com/article/domes...32097720080603