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Old 14-12-06, 11:19 AM   #1
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Default Peer-To-Peer News - The Week In Review - December 16th, '06

"In a legislative climate where lawmakers have proposed everything from jail time for p2p developers to letting the RIAA hack people's PCs for distributing copyrighted files, we should resist any kind of content-based blocking that would let them get their foot in the door. That includes even well-intentioned efforts like Cleanfeed." – Bennett Haselton

"Despite a Congress deeply in the pocket of telecom lobbyists, the public banded together to stop attacks on our free and open Internet." - Michael Kieschnick

"The people’s attention to the issue of Net Neutrality is more powerful than any legislation — and this year proves that." – Tim Wu

"As an activist and new media advocate, I am encouraged by our prospects in Congress for protecting the egalitarian spirit of the Internet and all people’s unfettered access to it." – Christopher Rabb

"Industry will be back with their money and phony grassroots groups. But next time around, with a public now well-informed of what’s at stake, we hope Congress will take up broadband policy that advances consumer — not just industry — needs." – Jeannine Kenney

"The potent combination of grassroots support and the facts stopped a bad bill, but the fight for Net Neutrality has only begun." – Mark Cooper

"Winny is built on such high-level technologies. It's a shame that it was condemned as a criminal tool. I think the verdict will leave a problem for the future." – Hisashi Sonoda

"Let me propose a corollary to the small penis rule. Call it the small man rule: If someone offers substantive criticism of an author, and the author responds by hitting below the belt, as it were, then he's conceding that the critic has won." – Michael Crowley

"I’m scoring the mating rituals for today’s society. You can call these parties whatever you want, but it’s really a WASP breeding party." – Tom Finn

"Nous sommes tous des Anne-Sophie Lainnemé!" – French blogger

December 16th, '06

EU Withdraws Copyright Reform Plan

The European Commission said Wednesday it had withdrawn plans that could end copyright levies on electronic equipment but denied it had done so under pressure from the French government.

Most European countries charge fees on music and video players and blank CDs to compensate artists and copyright holders for legal copying.

The Copyright Levies Reform Alliance - which represents companies from the technology and recording industries - said "outdated and unjust" levies should be phased out where alternative compensation exists, to bring the sector in line with EU copyright law.

The levies are collected by artists' rights groups who distribute them to music and film copyright holders, performers and record companies. In some countries, a portion of the money also supports cultural projects, from sponsoring festivals to paying scholarships. The fees do not cover illegal copies a CD owner makes for other people.

Manufacturers claim these levies unfairly raise the retail price of their products and are unnecessary as digital copyrights are rolled out.

The levies are charged and paid out to artists in 19 of the EU's 25 nations. None is charged in Britain, Ireland or Cyprus, and different plans exist in Greece, Luxembourg and Malta.

The group claims that the increasing use of digital rights management - or DRM - will not plug a gap as it will only cover the electronic version of a song. Artists lose that copyright protection the minute that track is copied onto a blank CD, it said.

China Tightens Control Over Online Music
Joe McDonald

China is tightening control over its online music and game industries, ordering distributors to submit all imported products for approval by official censors, the government said Tuesday.

The moves come amid official efforts to step up control over the Internet and other media, both to shield Chinese companies from competition and to suppress material deemed politically sensitive, violent or sexually graphic.

The music controls are meant to encourage growth of a "civilized and healthy" Internet and to protect Chinese companies that have lost market share to foreign rivals, the Culture Ministry said on its Web site.

The rules apply to Web sites and mobile phone companies that distribute music, the ministry said. It said distributors of Chinese music must register but won't be required to submit products for approval.

The rules also ban the establishment of foreign-financed music distributors, the ministry said.

In online games, distributors must obtain approval to release imported titles and must file monthly reports confirming that operators haven't added forbidden content, the official Xinhua News Agency said. It cited a notice by the Press and Publication Administration.

China has 23 million online game players, up from 13.8 million in 2003, according to Xinhua. It said revenues this year are expected to reach $850 million.

The crackdown was prompted by "a rash of problems with imported online games, some of which contain sensitive religious material or refer to territorial disputes," Xinhua said. It said some were criticized as pornographic or too violent.

Regulators said distributors concealed the content of the games when applying for approval, and operators sometimes added improper content, Xinhua said.

It gave no details about the religious and territorial issues, but Beijing is sensitive to references to Islam and Taiwan, the self-ruled island that the mainland claims as its own territory.

Officials complain that the Internet and video games give Chinese children access to violent or sexual material and encourage them to waste time that should be spent on school work.

The government has restricted foreign content on television in recent years to protect Chinese production houses and to limit public exposure to political ideas and pop culture from abroad.

A regulator told The Financial Times in comments published last week that Beijing has imposed a moratorium on foreign investment in Chinese film and television production houses.

The government earlier imposed a similar temporary ban on new Chinese-foreign magazine joint ventures.

Heh, women

Federal Judge: Making Files Available for Download = Distribution
Eric Bangeman

The RIAA's argument that making files available for download constitutes copyright infringement received an important boost from a federal judge. In an decision delivered in October and first reported over the weekend, Judge Ann Aiken found that making songs available for download via a P2P application such as Kazaa is equivalent to distributing the files and forms a sufficient basis for a claim of copyright infringement, the first time that a judge has made such a ruling in a file-sharing case.

The case in question, Elektra v. Perez, follows the pattern of the numerous other file-sharing lawsuits brought by the RIAA. After MediaSentry discovered a number of songs in a Kazaa user's download folder, the RIAA filed a "John Doe" lawsuit which was supplanted once the defendant, Dave Perez, was identified by his ISP as the owner of the account allegedly used to share music.

What constitutes distribution?

In his response, Perez denied the accusations of file sharing and said that even if he was responsible for the "perez@kazaa" account, merely making the files available in a shared folder for other Kazaa users falls short of infringement. The argument echoes that made in many other file-sharing cases, including Elektra v. Barker: distribution does not take place until someone actually downloads one of the songs from a Kazaa share, and that the RIAA would have to show that someone illegally downloaded the file in order to demonstrate that copyright infringement occurred. In the Elektra v. Barker case, the EFF filed an amicus brief outlining its position that sharing music files does not infringe the "distribution right" granted to copyright holders.

It's a difficult question, due in large part to the copyright law's predating the "digital age." As written, US copyright law explicitly says that in order to "distribute" a copyrighted work, an actual, physical exchange of a material object must take place. The EFF and other groups have urged the courts to define "distribution" as necessitating involving physical objects. Oddly enough, that position also embraces the pre-Internet concept of "distribution," even though most would agree that the iTunes Store and other online music services selling purely digital goods engage in the authorized distribution of copyrighted works.

Perez, the EFF, and others might use libraries to illustrate their arguments. A public library has a wide selection of copyrighted works available for patrons to use, read, watch, listen to, and even copy, within limits. However, the library is not responsible for what its patrons do once they borrow a book or DVD. In other words, its's not the collection itself and public access to it that causes infringement, it's the actions of those who use items in the collection. There are special provisions protecting libraries from the actions of their users, but online users may be responsible for what others do, should they even make it possible for others to get access to copyrighted materials.

Judge Aiken ruled in favor of the RIAA. In her order, the judge noted that in a copyright infringement case, the plaintiff needs to do two things: demonstrate ownership of the material and show that the party accused of infringement "violated at least one exclusive right granted to copyright holders under 17 U.S.C. § 106." Making songs available for download fulfills the second requirement, wrote Judge Aiken.

"[P]laintiffs' Amended Complaint refers to 'Exhibit B' attached to the complaint, which allegedly represents music files being shared by user 'perez@KaZaA' at the time plaintiffs' investigator conducted the investigation... I find that Exhibit B, in the context of the allegations in the Complaint, supports plaintiffs' allegation that defendant made copyrighted materials available for distribution," wrote Judge Aiken. "In sum, plaintiffs' amended complaint alleges the necessary elements of a copyright infringement action pursuant to the Copyright Act"

This appears to be the first instance in which a judge presiding over a file-sharing case has ruled that having a shared folder available on Kazaa constitutes copyright infringement. Although that particular argument has been widely used in other file-sharing cases, Judge Aiken's ruling may have little effect on those lawsuits, as the dismissal without prejudice significantly lessens the likelihood that the opinion will be precedent setting.

Judges have yet to rule on the other defenses still in play in file-sharing cases, including arguments that the settlement reached between the RIAA and Kazaa bars recovery of any additional damages from file-sharing defendants and that statutory damages should be capped at $2.80 per song. Just last week, another RIAA defendent sued Sharman Networks for deceptive marketing, saying that the Kazaa application made her music collection available for downloading without her knowledge.

Judge Aiken also denied Perez's request for attorney's fees. Three of his children who have reportedly admitted using Kazaa have been added to the original lawsuit as defendants.

Famous P2P User Fined in France
Nate Anderson

In the US, peer-to-peer file-swappers have had two choices when it comes to dealing with RIAA prosecutions: cough up a few thousand dollars to make the problem go away, or claim that IP numbers don't prove a thing and have your case dismissed. But what happens in, say, France? 29-year-old Anne-Sophie Lainnemé just found out.

Lainnemé was one of 50 consumers charged with copyright infringement back in 2004 for illicitly downloading hundreds of files using P2P networks. Instead of facing her trial quietly, Lainnemé became a poster girl for the P2P generation, appearing in magazines and newspapers to defend her actions.

She was still doing so at her trial in October of this year, according to France 2. Lainnemé told reporters, "I downloaded albums to discover new artists and to buy their albums or to go see them in concert," adding that she had no intention of causing harm.

Her lawyer, Bernard Lamon, claimed that his client's actions did not harm music companies. "Very serious studies have been done which demonstrate that downloading has no negative influence on the music industry," he said.

The court recently ruled that Lainnemé owed €2,225 (nearly $3,000) to two French rights organizations that sued her, but issued a deferred sentence for a €1200 fine. If she doesn't get in trouble again for the same offense, she won't have to pay. This was quite a moderate decision, considering the fines she could have been facing, but it's still a lot of money.

Lainnemé's case has attracted plenty of attention in France, where many young people are upset that she has been targeted for such a common activity. As one blog post put it, "Nous sommes tous des Anne-Sophie Lainnemé!" ("We are all Anne-Sophie Lainnemé!")

Such crackdowns happen less often in other countries than they do in the US, but they do still happen and, in some places, are poised to increase. In the UK, for instance, the newly-released Gowers Review report has concluded that the country needs stricter penalties for online infringement, along with a streamlined legal process for dealing with violations.

French Consumer Group Files Complaints Against HP
Jeremy Kirk

A French consumer group has filed three lawsuits against Hewlett-Packard Co. and two electronics retailers concerning the sale of computers with preloaded software.

HP's consumer PC offerings are sold with Microsoft Corp.'s Windows OS, said Alain Spitzmuller, legal affairs director for HP France.

The group, the Union Fédérale des Consommateurs-Que Choisir, (UFC) alleges consumers frequently lack the option of buying "bare" computers without software. UFC said it wants consumers to be able to choose the software for their machine and get reimbursed for purchasing an OS they did not want.

UFC contends the packaging of both hardware and software together violates a French law that prohibits linking the functionality of a product to another product.

HP, which this year overtook Dell Inc. as the world's top PC maker, disputes the claim. The company is not in violation of the law because the OS is an integral part of the PC, Spitzmuller said.

"The PC without an OS is not a product because it doesn't work," Spitzmuller said. "We believe the market is for products that work."

French courts have rejected two civil suits filed by individuals against HP that were founded on the same claim as UFC, Spitzmuller said.

Included in the complaints are retailers Auchan and Darty. The complaints were filed Thursday in courts in Paris, Bobigny and Nanterre, said Gaëlle Patetta, UFC legal director.

Spitzmuller said the judicial process will take months.

SanDisk Shrugs off Berlin Court Ruling in MP3 Spat

Memory card and MP3 music player producer SanDisk said on Thursday a legal battle with MP3 patent holders is ongoing, shrugging off a statement from a patent pool firm claiming a judicial victory.

The Societa Italiana per lo Sviluppo dell'Elettronica (Sisvel), which collects royalties for audio coding technology used in MP3 players and set-top boxes, has accused SanDisk of not paying for the technology.

SanDisk's MP3 players were seized by German law enforcement agencies at the IFA electronics trade show in Berlin in September. Sisvel said in a statement that a judge in the German regional criminal court of Berlin had ruled last week that the seizure had been legal and that there had been sufficient grounds for suspicion of deliberate patent infringement.

A Sisvel representative said the judge had only ruled on the legality of the seizure, and not on the infringement itself.

SanDisk said it uses different technology and believes it does not have to pay royalties to Sisvel and its partners. Sisvel also collects royalties on behalf of other firms like Philips Electronics of the Netherlands and France Telecom.

"In a litigation currently pending in the Mannheim District Court, SanDisk is showing that its MP3 players operate a technology which is completely different from a certain audio data transmission and reception technique that has been patented for Philips and others many years ago," SanDisk said in a statement.

"An expert opinion from one of the founders of MP3 digital-audio compression substantiates SanDisk's position. SanDisk is not infringing any patent in the pending litigation," it added.

A SanDisk representative in Europe said a ruling was expected in March or April next year.

SanDisk, which is a distant second to Apple in the digital-music player market, is the world's leading maker of flash memory data storage cards used in digital cameras and mobile phones as well as MP3 players.

P2P Software Inventor Convicted
Harumi Ozawa

A JAPANESE court has convicted the inventor of popular file-swapping software for copyright violations but refused to jail the programmer.

Isamu Kaneko, 36, created the "peer-to-peer" Winny software, which lets users exchange files such as computer games and movies over the internet for free.

Kaneko, who was a research assistant at Tokyo University until his arrest in 2004, was ordered to pay a ¥1.5 million ($16,000) fine in Japan's first ruling on file-sharing software.

But the Kyoto District Court turned down a call from prosecutors for a one-year prison sentence for Kaneko, who pleaded not guilty.

Judge Makoto Himuro said in the ruling Wednesday that Kaneko "had realised the software would be widely used in its form to violate copyrights."

The judge said nearly 90 per cent of files swapped by Winny are illegally copied.

But he also showed leniency toward the programmer and said the defendant "had seen the necessity and possibility to construct a new business model as an engineer."

Kaneko, despite escaping jail, said he would appeal to a higher court.

"I'm disappointed in the verdict. It would hold back the drive to develop technology," he said.

Kaneko, who is said to have designed his first computer program while in elementary school, has become a cause celebre for Japanese internet buffs.

He is known in cyberspace as "47" - a reference to his posting on a message board declaring Winny's creation - and has amassed thousands of dollars in donations for his legal defense.

Winny, which can be obtained for free on the internet, is reportedly still used by up to 450,000 computers in Japan.

Unlike US-based Napster, the renegade service that amassed as many as 70 million members before being shut down by the courts in 2001 for copyright violations, Winny does not rely on internet servers.

It allows the anonymous exchange of files between two computers, facilitating the transfer of music and movie files - and obscene content.

But Winny has also been said to suffer programming flaws vulnerable to virus and has been the source of a series of information leaks, including from a number of computers belonging to government and company officials who used the software privately.

Prosecutors had argued that Kaneko intended to destroy the system of copyright protection by inventing and releasing the software.

The defense counsel countered that the programmer should not be responsible for the illegal acts committed by Winny's users.

Hisamichi Okamura, a lawyer who specialises in the IT industry, said the verdict gave a mixed assessment of Winny's legality.

"The sentence doesn't make it clear whether Winny is a technology like a kitchen knife - a tool that can be used either for cooking or killing - or a gun," Okamura said.

But Hisashi Sonoda, a professor at Konan Law School, expressed concern that the verdict would harm software development.

"Winny is built on such high-level technologies. It's a shame that it was condemned as a criminal tool," he said. "I think the verdict will leave a problem for the future."

Copyright Pirates Sentenced in Hong Kong, Japan

Defendants receive jail time and a fine for copyright infringement
Steven Schwankert

Defendants convicted in copyright infringement cases in Hong Kong and Japan were sentenced this week, resulting in jail time and a fine, respectively.

In Hong Kong, Chan Nai-ming lost an appeal in Tuen Mun Magistrates' Court, after he was convicted in November of illegally distributing copyrighted material using a peer-to-peer network (p-to-p), specifically BitTorrent's file sharing software. Chan began serving his three-month jail sentence on Dec. 12, the Motion Picture Association (MPA) said Wednesday.

Chan used BitTorrent software to distribute Hollywood movies, but did not use a BitTorrent-affiliated or operated network to do so. The case was the first of its kind, with a defendant tried and convicted for illegal distribution over a p-to-p network.

Originally the pirates' software of choice, BitTorrent is making itself into a legitimate competitor in the online content business. Late last month, the company announced free and fee-based content distribution deals with a number of major Hollywood film and television studios.

On Wednesday, the Kyoto District Court found Isamu Kaneko, the developer of the "Winny" p-to-p system popular in Japan, guilty of aiding and abetting the infringement of Japan's Copyright Law, the MPA said. Kaneko was fined ¥1.5 million ($12,832), the MPA said.

The MPA estimated that its member companies lost $6.1 billion worldwide in 2005 to illegal reproduction or downloading of movies. In Asia-Pacific, it lost $1.2 billion. The figures are based on what the MPA projects consumers would spend on cinema tickets, DVDs, and other film-viewing opportunities if pirated film products were not available.

The MPA is the international arm of the Motion Picture Association of America, the American film industry's lobbying group. It is comprised of Hollywood's largest film studios: Buena Vista International; Paramount Pictures; Metro-Goldwyn-Mayer; Twentieth Century Fox International; Sony Pictures Releasing International; Warner Brothers International Theatrical Distribution; and Universal International Films.

Man Gets 8 Years for Computer Sabotage

A former UBS PaineWebber systems administrator was sentenced Wednesday to eight years and one month in prison for attempting to profit by detonating a "logic bomb" program that prosecutors said caused millions of dollars in damage to the brokerage's computer network in 2002.

Roger Duronio also was ordered to pay $3.1 million in restitution to his former employer, now known as UBS Financial Services Inc., part of the Swiss banking company UBS AG.

Duronio, 64, of Bogota was put under house arrest by U.S. District Judge Joseph A. Greenaway Jr. until he is assigned to a prison. He had been free on $1 million bond.

The term was the maximum under sentencing guidelines, which pleased U.S. Attorney Christopher J. Christie.

"This was a fitting, appropriately long sentence," Christie said. "Duronio acted out of misplaced vengeance and greed. He sought to do financial harm to a company and to profit from that, but he failed on both counts."

A message left for Duronio's lawyer, Christopher D. Adams, was not immediately returned.

A federal jury in July convicted Duronio on one count of securities fraud and one count of computer fraud, and acquitted him on two counts of mail fraud.

Prosecutors presented evidence that Duronio was angry with the company, where he had worked for nearly two years in Weehawken, because he expected an annual bonus of $50,000 but got $32,500.

Evidence showed Duronio ultimately lost $23,000 he invested in a stock market bet against UBS because the ploy failed to reduce the company's share price.

Duronio planted the logic bomb in some 1,000 of PaineWebber's approximately 1,500 networked computers in branch offices around the country and resigned from the company Feb. 22, 2002, prosecutors said.

That day, Duronio went to a broker and bought what are called "put options" for UBS stock, prosecutors said. Those give the purchaser the right to sell shares for a fixed per-share price, so the lower a stock falls the more valuable the option becomes.

Duronio placed his last trade on March 1, 2002, and the logic bomb attack took place three days later, deleting files on 1,000 computers, prosecutors said.

Mozart's Entire Musical Score Now Free on Internet
Michael Roddy

Mozart's year-long 250th birthday party is ending on a high note with the musical scores of his complete works available from Monday for the first time free on the Internet.

The International Mozart Foundation in Salzburg, Austria has put a scholarly edition of the bound volumes of Mozart's more than 600 works on a website.

The site allows visitors to find specific symphonies, arias or even single lines of text from some 24,000 pages of music.

"We had 45,000 hits in the first two hours...we would not have expected that," program director Ulrich Leisinger told Reuters in a telephone interview.

A user who types in "Pamina" from Mozart's opera "The Magic Flute" will see the music for all five arias she sings, as well as critical texts discussing those passages.

The version appearing on the Internet is a digitized copy of the "New Mozart Edition" published by Barenreiter, of Kassel, Germany.

It is considered the "gold standard" of Mozart editions and Leisinger said Barenreiter was paid $400,000 for the digital publication rights.

The financial backing came from the Packard Humanities Institute of Los Altos, California.

"We hope we will be able to convince other people besides us to present their original materials online as well," he said.

P2P Traffic Streams to BitTorrent
Simon Aughton

BitTorrent is fast becoming the leading p2p network as video surpasses music as the most popularly shared content medium, according to a survey by iPoque.

Indeed figures from its analysis of German Internet usage show that BitTorrent has already usurped eDonkey in terms of the amount of data traffic that each protocol generates: BitTorrent 53 per cent and eDonkey 43 per cent. Statistics from the rest of Europe show eDonkey still slightly ahead, but the trend is towards torrents.

So dominant are the two networks, that others barely register: the third most popular, Gnutella, accounted for less than three per cent of traffic during the June to October 2006 period of the survey.

The rise of BitTorrent mirrors the increase in the sharing of movies and television shows, which torrents are better equipped to handle. Where p2p was once the preserve of music sharers (and pornographers), film and TV now make up more than a third of the number of files being shared on BitTorrent and 22 per cent on eDonkey. That said, there are still many more files available on eDonkey - and much more pornography - than there are on BitTorrent. The survey found 250,000 different eDonkey files as opposed to just 56,000 on BitTorrent.

While video is therefore the chief reason for the rise in the popularity of torrents, iPoque suggests it is not the only one. Many file sharers, it says, have mistakenly assumed that BitTorrent offers greater anonymity than eDonkey and therefore greater security and greater protection from probing music and movie industry software designed to locate sharers to subject to legal action. iPoque also notes that BitTorrent software has also improved, most notably in the form of the Azureus client, which, it says, provides similar usability to eMule, the most popular eDonkey software. And finally, there are far fewer fake torrents than there are fake files on eDonkey, some of which are mis-named to hide pornography and computer viruses and other malicious code.

'This is particularly common for current titles such as movies or audio CDs,' the report concludes. 'The search for titles is not an integral part of BitTorrent. Instead normal websites are used to offer and categorise titles. These repository sites often provide a rating scheme for the offered files, which significantly reduces the fake problem. It appears that the average quality of offered files is higher for BitTorrent than for eDonkey.'

But perhaps the most significant finding of the research is that p2p activity continues to increase. Between June and October the amount of p2p data traffic rose by 10 per cent, despite the PR and legal efforts of both the music and movie industries.

iPoque's survey was based on aggregated statistics on the traffic generated by P2P networks plus an analysis of the content of 30TB of files.

Squeezing Money From the Music
Jeff Leeds

“Konvicted,” a new CD from Akon, promised to be one of the year’s big sellers when it appeared in record stores last month. Buoyed by two of the hottest singles in the country, Akon, a silky-voiced R&B singer, even had the most-viewed page among major label acts on MySpace.com.

Sure enough, the album opened big, but in a way that reflected the tenuous transitional state of the record business. “Konvicted” sold more than 283,000 copies in its first week — enough to start at No. 2 on the Billboard chart. On top of that were the album’s two singles, which at digital music services like iTunes together sold more than 244,000 copies that week. And a week later, snippets of the same songs captured two of the top three spots on a new chart tracking sales of ring tones, selling 269,000 of them combined.

As a recording that has sold modestly, but in an array of forms, Akon’s music illustrates the new definition of a hit in pop music — instead of racking up sales of half a million CD’s or more in the first week, it arrives with solid if less impressive sales, but with several revenue streams.

It is an example of the business model that the retrenching music industry is embracing as sales of the CD, its mainstay product for two decades, slowly decay.

As a result, the big record companies, whose fortunes are still overwhelmingly tied to CD sales, are taking a far more expansive view of how to carve out pieces of the music economy, which by some estimates runs as high as $75 billion, including recording sales, music publishing, concert ticket and merchandise sales and other sources of revenue.

Lately, the major labels have in effect tried to move into the talent management business by demanding that new artists seeking record contracts give their label a cut of concert earnings or T-shirt and merchandise revenue — areas that had once been outside the labels’ bailiwick.

“They’re all starting to ask for the same things,” said Theo Sedlmayr, an entertainment lawyer based in New York who represents acts like 50 Cent.

There has also been a scramble to squeeze revenue from other unconventional sources, including amateur videos posted to YouTube that incorporate copyrighted songs. Universal Music threatened to withhold its huge music catalog from Microsoft’s new digital music service unless it received a royalty of more than $1 on each sale of the technology giant’s Zune portable music player.

The labels are hoping that these moves will help put the industry back on track after a slide in overall sales in five of the last six years. But amid the holiday shopping season, which typically accounts for a third or more of the industry’s annual sales, many are not sure whether to be cheered or disenchanted by the new order of business.

With some holiday sales still to be made and tabulated, album sales are down almost 5 percent this year, according to Nielsen SoundScan data. Sales at digital music services like iTunes continue to rise, but the pace of the increase has slowed compared with last year.

Still, if every 10 individual tracks sold online are counted as albums, overall recorded music sales are off only about 0.7 percent this year. While that is far from last year’s 4 percent drop, it represents a decline from early summer, when overall sales were running ahead of last year.

All that indicates how sales of downloaded individual songs are eroding the underpinnings of the CD and remixing the industry’s economics. More and more, music companies are looking toward sales of bite-size units — individual songs typically sell for 99 cents — instead of full albums that may cost $15 at record shops. Barring a late surge in CD sales, more digital tracks than CD’s will be sold in the United States for the first time this year.

Sales of digital singles and ring tones now represent “more than a Band-Aid,” said Steve Rifkind, president of the SRC record label, which released Akon’s album through a partnership with Universal, a Vivendi company that is the industry’s largest. But “it’s not going to offset people taking music” through illicit file-sharing online or burning CD’s for friends, he said.

CD sales are still the single biggest source of revenue, and the picture there is mixed. The EMI Group of Britain, third largest of the four major record corporations, said in reporting its half-year results in November that recorded-music sales declined more than 5 percent, though a drop in CD sales and net prices had been “slightly” offset by digital revenue. The Warner Music Group, the No. 4 company, said that over all, recorded music sales for the fiscal year rose almost 3 percent, to $3 billion, and that digital revenue had more than offset the drop from CD’s.

Yet digital song sales are not fueling a recovery as quickly as some thought — in fact, sales have been sputtering. After rising 150 percent last year, sales of digital downloads have increased less than half as much this year.

Some executives suggest that early adopters of iPods and similar devices may have dabbled with paid downloads enough to drive sales initially, but now tend to fill them with music from their existing CD collections or copy from friends rather that stock up on new song purchases.

Still, investors appear to be valuing the big music companies more than they did in the first years of the slide. Doug Morris, Universal Music’s chairman, said “the big picture of digital music trumps the fears of piracy — that’s why the companies are becoming more valuable.”

Analysts, though, note that shifting toward a mostly digital — and potentially more profitable — business remains very tough. Richard Greenfield, who tracks music sales at Pali Research, projects the industry to be flat over all for the next two years.

This decline has been spurred by a series of factors, like illicit file-sharing online, CD burning, high prices and competition from products like DVD’s and video games. Many retailers and music executives also attribute the industry’s sluggishness to a lack of high-wattage talent.

The industry has “a lot of bands that people care about for five minutes and then move on,” said Joe Nardone Jr., owner of the Gallery of Sound chain, with 10 stores in northeastern Pennsylvania.

Consumer fickleness has become evident on the Billboard charts, where the old blockbuster album appears to be a dying breed. More songs have come and gone from the No. 1 place on the magazine’s national album sales chart this year than in any other year since the industry began computerized tracking of sales in 1991. Analysts say that reflects the lackluster staying power even among songs in demand.

Most recently, “Kingdom Come,” a hotly anticipated CD from the briefly retired rap superstar Jay-Z, sold a healthy 680,000 copies in its first week — then slid 79 percent last week, its second week on the charts. In recent weeks, acts including Diddy, Danity Kane and Ludacris briefly held sway at No. 1 before plummeting. In July, Johnny Cash reached the top place for the first time in 37 years, with a posthumous CD. It sold just 88,000 copies, the lowest total for a No. 1 debut in SoundScan history.

But as the sales of albums drop, the major labels are still adopting strategies to squeeze more revenue though that may mean settling for $2.50 ring tones instead of CD’s priced at six times that. Indeed, acts with towering singles regularly generate more money from downloads or ring tone sales than from their comparatively slow-selling CDs these days — as the rapper Jibbs did with “Chain Hang Low.”

Mr. Rifkind, the SRC executive, said, “I find myself, when I’m signing a record deal now, asking, ‘Can this sell as a ring tone?’ ”

But ring tones, which have been projected to generate $600 million in nationwide sales this year, are only part of the puzzle. Many executives are now betting that even more money can be generated with a wider range of individual products tied to the same recording, especially in digitally advanced markets. In Asia, where sales of music to mobile phones outpace CD sales in some places, labels may offer more than 400 different items in connection with a specific album, including ring-back tones — snippets of music that play to callers while they wait for their call to go through — or “color call” tones, background songs that play while someone talks on the phone.

To show the promise of digital sales for individual albums, Warner Music executives provided cost-analysis data from a successful hip-hop record released in the last 12 months. The information was disclosed on condition that the performer not be identified in The New York Times.

According to the data, sales of the CD accounted for roughly 74 percent of domestic revenue the company took in from the project, or roughly $17 million. But sales of an array of digital products added almost $6 million — about two-thirds of that came from ring tones of hit singles. The figure also included roughly $330,000 from mobile phone games related to the performer and $94,000 in sales of cellphone “wallpaper,” or screen backgrounds.

Yet the industry as a whole still remains uncertain — and in the meantime must try to promote digital sales at the same time it seeks to preserve the CD and brick-and-mortar retail shops.

Mr. Nardone, for one, said the industry must consider lowering CD prices to allow retailers to compete with Apple’s industry-leading iTunes service, where full-length digital albums typically sell for $9.99. That is less than his wholesale cost for CD’s. Sales at his chain are running about 9 percent behind last year, he said.

“Everybody’s still hoping for the best,” Mr. Nardone said. “But the best ain’t what it used to be.”

iTunes Sales 'Collapsing'
Andrew Orlowski

The leading DRM digital download service, Apple's iTunes, has experienced a collapse in sales revenues this year according to analyst company Forrester Research.

Secretive Apple doesn't break out revenues from iTunes, but Forrester conducted an analysis of credit card transactions over a 27-month period. And this year's numbers aren't good.

While the iTunes service saw healthy growth for much of the period, since January the monthly revenue has fallen by 65 per cent, with the average transaction size falling 17 per cent. The previous spring's rebound wasn't repeated this year.

And it isn't just Apple's problem. Nielsen Soundscan has grimmer news for prospective digital download services, indicating three consecutive quarters of flat or declining revenues for the sector as a whole.

Speaking to The Register, Forrester analyst Josh Bernoff warned against extrapolating too much from the figures.

It may reflect a seasonal bounce that hasn't yet manifested itself. However, it might not.

"There's no indication of enormous growth coming," he told us. "When you look at this alongside the SoundScan numbers, you may ask 'Where's the part were we're supposed to get excited?'."

The ominous trend comes despite healthy growth for digital music players - iPod sales quadrupled in the period monitored by Forrester - and Apple's growing inventory - the company has added videos and movies to its established inventory of music downloads and audiobooks.

Three times a year

Forrester revealed some fascinating details about iTunes purchasing habits. Some 3.2 per cent of online households (around 60 per cent of the wider population) bought at least one download, and these dabblers made on average 5.6 transactions, with the median household making just three a year. The median transaction was slightly under $3.

No one in music gets rich from a stampede of interest like this.

(The figures don't include gifts redeemed via the iTunes Store. While Apple can argue this does not reflect the volume of transactions taking place, it gives a more accurate picture of what customers are actually prepared to pay for.)

Bernoff makes a fascinating comparison between the public's appetite for buying CDs over the internet, and its lack of appetite for DRM songs. Online individuals (rather than households) bought 1.7 CDs over the internet per quarter.

"The comparatively modest iTunes numbers suggest that consumers are still spending the bulk of their music budget $14-at-a-time on shiny discs," he writes.

"iTunes sales are not cutting into CD sales," he elaborated to us, "they're an incremental purchase at best.

"There's a problem here. CD sales have fallen 20 per cent over five years. The message here is not that CD sales are coming back, the ability to obtain pirated music is now so widespread the DRM looks to consumers more like a problem than a benefit."

It may be slightly premature to declare the DRM-era dead. But the signs are that it may be entering its final days.

Forrester and Nielsen's figures merely confirm that what the industry is losing in falling CD sales, it isn't gaining in DRM downloads.

Forrester Bernoff's attributes some blame on the technological restrictions - iTunes' DRM songs only play on Apple's iPod player.

At the In The City music convention held in Manchester in October, Columbia UK boss Mike Smith predicted music would be DRM-free within 12 months. Sony BMG UK, which owns Columbia, has declined to elaborate on the comments - which were not widely reported at the time. Perhaps more significantly, recent personnel changes at Universal Music, the 800lb gorilla, also suggest a more pragmatic strategy.

So if not DRM, then what?

In the UK, the major labels, represented by the British Phonographic Institute (BPI), have joined discussions on a blanket license for digital downloads in the UK. Discussions are taking place under the Chatham House rule. Although much of the infrastructure for a blanket license has yet to fall into place - the counting mechanisms and collection agencies have yet to be agreed upon - the UK makes a potentially promising experiment for a digital music blanket model.

UK consumers can take up free broadband offers from Sky and Orange, among others. This potentially removes one of the key objections to a flat fee - the fact that it's a compulsory payment for broadband users. It's increasingly feasible that a blanket license would be absorbed by UK consumers at little or no extra charge - simply becoming part of a competitive monthly tariff, only allowing the consumer to share music freely, and not be sued for copyright violations.

And while Andrew Gowers, whose Treasury report on intellectual property was published last week, passed on giving the blanket license moves his specific endorsement - he said it was too early to judge - he certainly helped the cause in one important way. Gowers advocated the establishment of a database of copyright material. Such a database is essential to managing how the pot of money raised through a blanket license is eventually distributed.

Two years ago blanket license advocate Jim Griffin predicted that 99 cents per song was "both too high and too low".

"It's too low to pay for the burden of a developing artist, and it's too high to fill an iPod," he predicted; while the approach wouldn't catch on with the public, it would cause significant harm to the industry.

It's significant that so many music stakeholders are now discussing Jim's long-favoured approach - a bundle - rather than placing any more faith in a route that relies on technological counter-measures.

Peter Jenner, Billy Bragg's manager, recently reflected here on business models that would arise after a blanket license. It's well worth a read. (http://www.theregister.co.uk/2006/11/03/peter_jenner/)

Are iTunes Sales Up Or Down?

Market researcher ComScore refutes iTunes sales are down, saying they're up 84%.
Antone Gonsalves

Another market research firm is refuting media reports that Apple Computer's iTunes music store is in trouble, claiming that sales on the site have risen 84% compared to last year.

ComScore Networks issued its report Thursday, one day after Forrester Research said several media organizations had gotten the story wrong when they reported that iTunes sales had plummeted 65% in the first half of the year. Those reports were based on a recent Forrester study that the researcher says was misinterpreted.

But while Forrester claimed that iTunes sales were leveling off at roughly 20 songs per iPod, Apple's digital music player, ComScore's research showed that in the first three quarters of the year, revenue on iTunes soared by 84%. In addition, the number of transactions jumped 67%, and the amount spent per transaction was up 10%.

ComScore also found that the number of unique visitors to iTunes had increased 85% year-over-year in November to 20.8 million.

"The reason to put this out is to contrast our numbers with reports saying iTunes' death is pending," ComScore analyst Michael Rubin says. "Revenues grew a robust 84%, year over year, and that's pretty healthy growth."

While Forrester wouldn't argue about iTunes' general health—the site sells about $1 billion worth of songs a year—it would take issue with the growth estimates. Based on data pulled from credit-card transactions, Forrester found that Apple has sold about 20 songs per iPod since the digital music players went on sale.

The erroneous media reports were based on a sampling of transactions that showed a sales decline. Forrester, however, said the sample was too small to accurately determine performance.

ComScore based its findings on the transactions and browsing behavior of 1 million consumers who have given permission to be monitored. The sales findings were based on 8.5 million transactions.

ComScore pointed out that its findings aligned closely with a report from Gene Munster, analyst with investment banker Piper Jaffray. Munster says the number of songs sold per week on iTunes had risen 78% in the first nine months of the year, compared with the same period a year ago.

"Contrary to recent reports suggesting sales on iTunes are declining rapidly, our analysis of Apple company data shows strong growth year over year," Munster says. "With less than 5% of music purchased online, this market will go through massive growth in the next several years."

But Forrester was less confident about the state of online music, saying that as the largest online seller, Apple's leveling off of sales was an indication that even at 99 cents a track, most consumers still aren't sold on the value of digital music. Also, iTunes' annual sales don't nearly make up for the drop in CD sales in the United States alone, which are down $2.5 billion. Still, Forrester noted iTunes is meant as a complement to the players, with the players making the bulk of the money in the digital music business.

Gates: Digital Locks Too Complex

Microsoft boss Bill Gates has told a group of influential bloggers that copy protection for digital music and video is too complex for consumers.

Mr Gates was speaking to an invited party of bloggers and web developers at Microsoft's Seattle headquarters.

Digital Rights Management (DRM), which is used to stop copying, is a big issue for some people who feel it limits what they can do with legally bought files.

"DRM is not where it should be," said Mr Gates, reported blogger Steve Rubel.

"In the end of the day incentive systems (for artists) make a difference," said Mr Gates.

"But we don't have the right thing here in terms of simplicity or interoperability," he added.

His comments were reported on the Micro Persuasion technology blog, and the visit was blogged by the other attendees.

Microsoft is one of the biggest exponents of DRM, which is used to protect music and video files on lots of different online services, including Napster and the Zune store.

Blogger Michael Arrington, of Techcrunch.com, said Bill Gates' short-term advice for people wanting to transfer songs from one system to another was to "buy a CD and rip it".

Most CDs do not have any copy protection and can be copied to a PC and to an MP3 player easily and, in the United States at least, legally.

DRM critics

In the UK it is illegal to make personal copies of CDs, although the music industry has made clear it will take no action against people copying their legally bought CDs to their computers or music players.

Critics of DRM argue that the tools limit the value of downloaded music or video files because of the restrictions imposed to try to prevent copying.

They say that DRM is routinely circumvented and that different competing standards cause confusion for consumers.

Suw Charman, of the Open Rights Group, said it was a "bit rich of Bill Gates to make his comments given how much DRM is stuffed into Windows Vista", the new operating system from Microsoft.

"The problem with DRM is that it is very anti-consumer," she said.

"It is bully-boy tactics by the media industry," she added.

But backers of DRM argue it gives artists an assurance that their work is being protected.

Ms Charman called for more information for consumers when they buy digital files and CDs.

"Often consumers do not know what restrictions have been imposed on CDs or digital music until after they have bought them," she said.

She added: "Apple have been known to change the rules after people have bought tracks."

Microsoft Tries to Stop Vista Piracy Monster
Ina Fried

Microsoft has issued an update to Windows Vista that's intended to stop a piracy monster.

The software maker said Thursday that the update is aimed at thwarting a technique that was letting some people use pirated versions of the operating system without going through the software's built-in product activation. Microsoft has dubbed the approach "frankenbuild" because it works by combining test versions of Vista with the final code to create a hybrid version.

"Windows Vista will use the new Windows Update client to require only the 'frankenbuild' systems to go through a genuine validation check," Microsoft said on its Windows Genuine Advantage program blog. "These systems will fail that check because we have blocked the (product) keys for systems not authorized to use them."

Although Vista was only released to businesses last month--and won't hit retail shelves until late January--it has been making the rounds on the Internet, and there have been several reported hacks to bypass its built-in security mechanisms.

A second known issue, Microsoft said, involves using virtualization technology in conjunction with the mechanism Microsoft uses to allow large businesses to activate multiple copies of Vista.

"Piracy is evolving and has made the expected jump from Windows XP to Windows Vista," David Lazar, director of Genuine Windows, told CNET News.com. "We are already starting to see some workarounds to the Vista licensing requirements."

In a statement, the software company said it hoped the actions would help discourage people from trying to bypass its security mechanisms.

"Microsoft hopes that by taking this action now, we can send a message to counterfeiters and would-be counterfeiters, and help protect our legitimate customers from being victimized by further distribution of these tampered products," the company said.

Microsoft has been more aggressively targeting pirates over the past two years, including a stepped-up program for checking to make sure software is properly licensed. With Vista, software that doesn't pass such authentication will go into severely reduced functionality after 30 days. At that point, only the Web browser will work and then only for an hour at a time.

In addition to that reduced-functionality mode, users can also still boot into Windows "safe mode." That allows full access to data and applications, but offers limited screen resolution, fewer colors and prevents the use of most third-party software drivers.

While Thursday's update addresses only the "frankenbuild," Lazar said Microsoft is also working on a method to counteract the other hack, which uses virtualization and Microsoft's Key Management Service.

"The update that we are releasing today does not specifically address that, but we are working on an update that will specifically address the KMS workaround," Lazar said.

Vista represents Microsoft's strongest technical effort yet to build antipiracy features into its software. In addition to the activation requirements, some features within the operating system require the software to be validated as genuine. Those include the Windows Defender spyware fighter, Aero user interface and ReadyBoost, a technology that uses USB flash drives as added system memory.

"Vista is the hardest system to pirate that we have yet released," Lazar said.

'Digital Black Hole' Threatens Your Documents
Richard Thurston

The European Union is funding a project involving national libraries and digital preservation groups aimed at fighting off a looming "digital black hole."

The black hole in question is the potential future loss of data as file formats become obsolete and inaccessible.

The Planets consortium will develop a "sustainable framework" to maintain access to digital content after its original storage format has disappeared. ("Planets" is short for "preservation and long-term access project through networked services.)

It is estimated that 5 billion documents are produced every year within the EU, of which 2 percent--100 million--are seen as worth archiving. Two million of these documents are on formats at risk from disappearing into the digital black hole.

The consortium includes national libraries, archives, research institutes and technology specialists across Europe. The organizations taking part include the British Library; Microsoft Research in Cambridge, England; IBM Netherlands; the Austrian National Library; the Swiss Federal Archives; and Freiburg and Cologne universities in Germany.

The EU's Information Society Technologies R&D program is providing 8.6 million euros ($11.3 million) of the 14 million euros ($18.5 million) required to fund the project.

Adam Farquhar, head of e-architecture at the British Library, said that as computer hardware and software become obsolete, digital information reliant on this technology becomes increasingly hard to find, view, search and reuse.

"There is a growing consensus on the need to act now to avoid a gaping hole in our cultural and scientific record," he said.

Lynne Brindley, chief executive of the British Library, said European libraries and archives are uniquely positioned to lead this digital-preservation initiative, as they have the legal responsibility and the legislative framework to safeguard digital information.

Tim Ferguson of Silicon.com reported from London.

Teen Music Now Taking a Back Seat on the Charts
Nekesa Mumbi Moody

Just a few years ago, when teens dominated the pop charts, to be a singer of a more senior age -- say, about 30 -- was something to be downplayed or outright omitted on one's musical resume.

Indeed, as the likes of 'N Sync, Britney Spears and Christina Aguilera posted hit after hit and sold millions and millions of albums, the most coveted part of a performer's act seemed to be his or her youth.

But these days, Justin Timberlake has graduated from 'N Sync to sexy adult club tracks, Aguilera is a married woman singing mature ballads and it no longer seems necessary to shave a few years off your age. While teen acts like JoJo, Rihanna and Chris Brown are still creating hits, they are no longer ruling the marketplace. Most of this year's top-selling artists were in their 20s or 30s, like Gnarls Barkley, Mary J. Blige, James Blunt, Nelly Furtado and Shakira. And oldsters like 60-year-old Barry Manilow and 65-year-old Bob Dylan also had strong sales.

"There has been more product that was clearly adult for the last five to 10 years," says Sean Ross, vice president of music and programming at Edison Media Research, which tracks radio trends.

"Thirty-five-year olds are going to a point where rap is O.K. and 18-year-olds want more mellow music. . . . It's more like there's nothing galvanizing in the center and that lets everybody see what's in the fringes."

Still, there may be the rumblings of a teen craze on the horizon. The year's biggest-selling album was the soundtrack to the Disney TV movie "High School Musical," although it was aimed at the tween set. And a graduate from that film, Vanessa Hudgens, is having some success on radio with her solo debut.

In addition, while there have been no monster albums from teens this year, there have been other radio successes with acts like 16-year-old singer Paula DeAnda ("Doing Too Much"), 15-year-old rappers Jibbs ("Chain Hang Low"), and 15-year-old JoJo, whose ballad "Too Little Too Late," was a top five Billboard pop hit.

"I think a lot of times it's been older people, but now the teenage group, the younger group, it's very youthful now," said DeAnda. "There's hot new artists out there. . . . It's a real big year for us."

"I think it's kind of happening," JoJo said of a possible teen resurgence on the charts. "But I don't think it's in the same way that it happened maybe seven years ago with the boy bands and Britney Spears and Christina Aguilera."

Back then, acts like Spears and Aguilera made blockbuster albums that sold millions of copies apiece during a music-industry boom.

But as the acts grew older along with the teens that once worshipped them, the craze began to fade, along with the decline of the music industry with the advent of Internet downloading.

"Teen stuff continues to sell, it's always going to sell, (but) it's not a craze like it (was)," says Rick Krim, executive vice president of music and talent relations at VH1. "I think a lot of the teen music tends to be disposable, and it's not the kind of music that stays with you for your lifetime."

A recent survey from the Recording Industry Association of America showed that from 1996 to 2005, the number of 15- to 19-year-olds purchasing music declined from 17.2 percent of music buyers to 11.9 percent. The percentage of buyers in the age groups between 20 and 44 either declined very slightly or remained about steady, but the biggest leap was in the over-45 group: They now represent 25.5 percent of music buyers, up from 15.1 percent in 1996.

Even though Manilow and Dylan had No. 1 debuts with their albums this year, it's not as if pop is no longer a music that appeals to the youth. After all, one of its biggest sensations, Beyonce, is a certified veteran at age 25.

But her boyfriend, 37-year-old Jay-Z, had one of the biggest sales debuts of the year with his album, "Kingdom Come." On it, he talks about being mature and seasoned and even has a song, "30 Something," bragging about his elder status.

"When you're 50-years-old, you still love hip-hop but you just can't relate to the music any more because the people making it as they grow, they're still trying to cater to a younger audience," he told The Associated Press in a recent interview. "I just felt it was very important for me to make a grown-up album and that's the tone of it, the whole album."'

Jay-Z isn't ruling out selling to the kids either. And it seems that these days, there's less of a distinction between the MTV set and the VH1 set.

"(Certain acts) start off appealing adult, but just because it's really great music ... it's appealing to other demos," said Krim, noting the success of acts like Blunt and the rock group Keane.

Daniel Powter, 36, had one of the year's biggest hits with "Bad Day," a sing-a-long piano track that first got popular when it was used as the sendoff song on "American Idol."

Powter credited his life experience for helping him to finally make a hit like "Bad Day."

"I think I've put a foundation in. I couldn't have written the music when I was 18," he told The AP earlier this year.

"I don't want to lie about how old I am. I still feel good. I still feel great. I love to play music."

CBS Launches Music Label, to Supply Songs to iTunes
Kenneth Li

CBS Corp. said on Friday it will revive its storied CBS Records music label to supply its television shows with less expensive music and to generate digital sales.

The company, home to the "CSI" crime drama franchise, inked a deal with Apple Computer Inc.'s iTunes online music service to sell the label's music and videos, which will also be available at www.cbsrecords.com.

The new CBS Records aims to tap unsigned musicians who write and perform their own songs that will be used and promoted on prime-time TV shows. The strategy helps CBS reduce licensing fees for using music from other labels on its shows.

Owning the music also makes negotiating Internet video deals for CBS shows less complicated and more profitable, as TV show producers seek to strike deals with online video services such as Google Inc.'s YouTube. CBS's online videos on the YouTube service were among the most popular in its first month of the deal.

"With more consumers choosing the online download model as the preferred way to purchase their favorite songs, we have an opportunity to use our unique and broad collection of media platforms to create a new music label paradigm for a small price of admission," CBS Chief Executive Leslie Moonves said in a statement.

The CBS Records brand dates back to 1938, when CBS acquired American Record Corp, which owned the Columbia brand in the United States. Columbia was one of the first companies to sell pre-recorded music and its roots go back to the late 188Os.

CBS Records has been home to top artists including Bob Dylan, Tony Bennett, Aerosmith, Frank Sinatra and Bruce Springsteen. CBS sold the label to Sony Corp. in the late 1980s for about $2 billion.

The new CBS Records will launch with no actual vinyl records and plans to sell conventional CDs through partnerships with outside companies.

At launch, the label has signed three acts, including 2007 Grammy Award nominee P.J. Olsson, rock band Senor Happy, whose album "I'm Sorry" will be released by CBS Records in January, and Will Dailey, whose song has been on CBS's "Jericho" show.

The strategy appears similar to CBS' approach to the movies industry. Moonves has said CBS may create a movie studio focused on financing small budget movies. Owning its own films could help it save on fees it currently pays to other studios to offer films on its cable channel Showtime.

Velvet Underground Rarity Sells on eBay
Verena Dobnik

Forty years after it was made, The Velvet Underground's first recording has become a financial hit - in cyberspace. Bought for 75 cents four years ago at a Manhattan flea market, the rare recording of music that ended up on the influential New York band's first album, "The Velvet Underground & Nico," sold on eBay for a closing bid of $155,401.

The buyer is a mystery, only identified by the eBay screen name: "mechadaddy."

But a greater mystery endures: How did the 12-inch, acetate LP end up buried in a box of records at a flea market?

Warren Hill, a collector from Montreal, bought the record in September 2002 at the flea market, according to an article written by his friend, Eric Isaacson of Mississippi Records in Portland, Ore. in the current issue of Goldmine Magazine.

Isaacson helped Hill decipher the nature of the lucky find.

"We cued it up and were stunned - the first song was not 'Sunday Morning' as on the 'Velvet Underground & Nico' Verve LP, but rather it was 'European Son' - the song that is last on that LP, and it was a version neither of us had ever heard before!" Isaacson wrote.

The recording turned out to be an in-studio acetate made during Velvet Underground's first recording over four days in April 1966 at New York's Scepter Studios. The record reportedly is only one of two in existence; the other is privately owned, with rumors circulating about the owner's identity. Columbia Records rejected the album.

"I immediately took the needle off the record, and realized that we had something special," Isaacson wrote. Hill and Isaacson photographed the album, made a digital backup copy of the music, and decided to put it up for auction. The first bids, which began Nov. 28, rose $20,000.

Velvet Underground left its musical stamp on hundreds of other bands.

The band, named after a book about edgy sex practices in the 1960s, was fueled by Moe Tucker's hard-driving drumming, John Cale's anxious viola, and lead singer Lou Reed, whose lyrics spoke of drug-induced beauty and gritty Lower East Side realities.

The first album featured Nico, the European model-actress-singer in a first and last recorded appearance with the band.

Retail Sales Surge in November

Consumers battered by a multitude of economic woes came roaring back in November, pushing retail sales up by the largest amount in four months.

The nation's retailers saw sales rise by 1 percent last month, following three straight months of lackluster performance. Sales were flat in August and had fallen in September and October.

The November gain, which was the best showing since a 1.4 percent increase in July, was coming at a critical time at the start of the holiday shopping season.

In other news, the amount of inventories held on shelves and backlots rose by 0.4 percent in October, after a 0.3 percent increase in September.

The increase in inventories was slightly below the 0.5 percent that economists had been expecting but followed the pattern of moderate increases as businesses have succeeded in keeping inventories under control even as the overall economy has slowed this year.

The November retail sales performance was ten times better than the tiny 0.1 percent rise that economists had been forecasting. Still, it was unclear whether the boom seen in November would carry over through the entire Christmas shopping season.

Some economists cautioned that the November jump could turn out to be a one-month blip rather than the start of a trend of stronger sales.

''We think it is very likely that sales will either be revised down or there will be a hefty drop in December,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

But other analysts said the rebound, while much stronger than expected, fit with their view that consumer spending this holiday season will post solid, if not spectacular, gains.

Many retail stores reported that customer traffic has not been as strong after a surge right after Thanksgiving when consumers were lured into stores to take advantage of attractive incentive deals.

Consumer spending slowed dramatically in the spring and summer as Americans were hit with surging gasoline prices, which left them with little to spend on other items. They also had to deal early in the year with rising interest rates, which made their credit card purchases more expensive, and with a cooling housing market, which made them feel less wealthy as the values of their homes slipped.

However, economists believe consumer spending is now stabilizing, reflecting in part the retreat in gasoline prices from the record highs above $3 per gallon set in the summer. Consumer spending is closely watched because it accounts for two-thirds of total economic activity.

The 1 percent November increase reflected widespread strength in a number of areas, led by a 4.6 percent surge at electronics and appliance stores as customers snapped up the latest flat-screen televisions for holiday gift giving.

Sales at auto stores posted a solid 0.9 percent increase, which followed a 1 percent rise in October.

Department stores and other general merchandise stores posted a 0.4 percent rise in November, a rebound after a 0.3 percent fall in October.

However, sales at specialty clothing stores were unchanged in November and sales at furniture stores edged down 0.1 percent after an even bigger 0.7 percent fall in October, weakness that reflected the big slowdown in home sales this year.

Sales at gasoline stations were up 2.3 percent in November following a 5.3 percent decline in October, a drop that reflected falling pump prices rather than a lower volume of sales.

Excluding autos, sales were still up a solid 0.9 percent in November.

TV Networks Reportedly Discussing YouTube Rival

News Corp.'s Fox, Viacom, CBS and NBC Universal are in talks about creating a video Web site to compete with Google's YouTube, the Wall Street Journal reported on Friday.

While a deal is still far off, the four media companies envision a jointly owned site that would be the primary Web source for videos from their television networks, the paper said in an online report on Wsj.com, citing people close to the situation.

The companies aim to cash in on the fast-growing market of Web video advertising and have also discussed building a Web video player that could play clips, the Journal said.

In less than two years, YouTube has grown from a Silicon Valley start-up to the most popular online video-sharing site that boasts more than 100 million daily views. It was acquired by Google in November for $1.65 billion in stock.

Many videos on YouTube are homemade clips uploaded by users but some of the most popular content is pirated TV shows. Some media companies have threatened to sue YouTube for copyright infringement while others, including CBS and General Electric's NBC, have struck licensing deals with the site.

The Journal said the four media companies have been discussing a YouTube rival since the start of the year, but the latest round of talks could still founder.

Walt Disney, owner of the ABC television network, is not joining in the talks, because it wants to rely on the strength of its own brands, the paper said.

Philips Rolls Anti-Piracy Tech for Video
Alex Veiga

Philips Electronics is launching a service Thursday to help Web sites and online file-sharing networks filter out unauthorized copyright video files.

The service, dubbed MediaHedge, is the latest anti-piracy tool designed to help sift through the growing volume of online video files and give copyright holders more say over their content.

Online video sites that allow computer users to load videos, often clips culled from TV shows and music videos, are under pressure from the entertainment industry to filter out video content that users post without the copyright owners' permission.

Google Inc.'s wildly popular video-sharing site, YouTube, has said it is developing technology that will streamline the process by which copyright owners identify their content on the site and then determine whether they want to have it removed.

Philips did not name any customers who will be using the MediaHedge system, which works by checking the digital "fingerprint" or unique characteristics of video files and looking for a match in Philips' database of video content.

The service can spot a match even if the video file is degraded, altered or amounts to a small slice of the original video, according to Philips Content Identification, a unit of the Netherlands' Philips Electronics NV.

Copyright holders can specify in advance whether they want to allow videos containing their footage to be posted on sites running MediaHedge, or whether they should be blocked or otherwise restricted.

2006, Brought to You by You
Jon Pareles

IMAGINE paying $580 million for an ever-expanding heap of personal ads, random photos, private blathering, demo recordings and camcorder video clips. That’s what Rupert Murdoch did when his News Corporation bought MySpace in July. Then imagine paying $1.65 billion for a flood of grainy TV excerpts, snarkily edited film clips, homemade video diaries, amateur music videos and shots of people singing along with their stereos. That’s what Google got when it bought YouTube in October.

What these two highly strategic companies spent more than $2 billion on is a couple of empty vessels: brand-named, centralized repositories for whatever their members decide to contribute.

All that material is “user-generated content,” the paramount cultural buzz phrase of 2006. It’s a term that must appeal to the technocratic instincts of investors. I prefer something a little more old-fashioned: self-expression. Terminology aside, this will be remembered as the year that the old-line media mogul, the online media titan and millions of individual Web users agreed: It demands attention.

It’s on Web sites like YouTube, MySpace, Dailymotion, PureVolume, GarageBand and Metacafe. It’s homemade art independently distributed and inventively promoted. It’s borrowed art that has been warped, wrecked, mocked and sometimes improved. It’s blogs and open-source software and collaborative wikis and personal Web pages. It’s word of mouth that can reach the entire world.

It’s often inept, but every so often it’s inspired, or at least worth a mouse click. It has made stars, at least momentarily, of characters like the video diarist Lonelygirl (who turned out to be a fictional creation) and the power-pop band OK Go (whose treadmill choreography earned far more plays than its albums). And now that Web entrepreneurs have recognized the potential for profit, it’s also a sweet deal: amateurs, and some calculating professionals, supply the raw material free. Private individuals aren’t private anymore; everyone wants to preen.

All that free-flowing self-expression presents a grandly promising anarchy, an assault on established notions of professionalism, a legal morass and a technological remix of the processes of folk culture. And simply unleashing it could be the easy part. Now we have to figure out what to do with it: Ignore it? Sort it? Add more of our own? In utopian terms the great abundance of self-expression puts an end to the old, supposedly wrongheaded gatekeeping mechanisms: hit-driven recording companies, hidebound movie studios, timid broadcast radio stations, trend-seeking media coverage. But toss out those old obstacles to creativity and, lo and behold, people begin to crave a new set of filters.

TECH oracles predicted long ago that by making worldwide distribution instantaneous, the Web would democratize art as well as other discourse, at least for those who are connected. The virtual painting galleries, the free songs, the video blogs, the comedy clips, the online novels — all of them followed the rise of the Internet and the spread of broadband as inevitably as water spills through a crack in a dam. Why keep your creativity, or the lack of it, to yourself when you can invite the world to see?

Every so often the world notices. British rockers like the Arctic Monkeys and Lily Allen built huge followings at home and abroad by making their music available on MySpace, where bands can post full-length songs and video clips. When the Arctic Monkeys released their first album as 2006 began — full of songs that fans already had on their computers and iPods — it drew the highest initial sales of any debut in the history of the British charts. Both of them are exceptions, however; many musicians are still waiting for the first stranger to visit their MySpace page.

While some small percentage of the user-generated outpouring is a first glimpse of real talent, much of it is fledgling bands unveiling a song recorded last Thursday in a friend’s basement, or would-be directors showing the world their demo reels. There’s deadpan video vérité, raw club recordings, “gotcha” moments (like Michael Richards’s stand-up meltdown) and wiseguy edits, along with considerably more polished productions. And users generate all sorts of recombinant art: parodies, alternate video clips, mash-ups, juxtapositions, “Star Trek” scenes accompanied by U2 songs, George W. Bush rapping.

User-generated content — turning the audience into the auteur — isn’t exactly an online innovation. It’s as old as “America’s Funniest Home Videos,” or letters to the editor, or community sings, or Talmudic commentary, or graffiti. The difference is that in past eras most self-expression stayed close to home. Users generated traditional cultures and honed regional styles, concentrated by geographical isolation.

In the 20th century recording and broadcasting broke down that isolation. Yet those same technologies came to reinforce a different kind of separation: between professional artist and audience. A successful artist needed not only creativity and skill, but also access to the tools of production — studios, recorders, cameras — and outlets for mass distribution.

As the music and movie businesses grew, they flaunted their economic advantage. They could spend millions of dollars to make and market blockbuster hits, to place them in theaters or get them played on radio and MTV. They owned the factories that could press vinyl albums and make the first CDs, before the days of the home CD burner and MP3s. Independent types could, and did, release their own work, but they couldn’t match the scale of the established entertainment business.

They still are at a disadvantage. But they are gaining.

Low-budget recording and the Internet have handed production and distribution back to artists, and one-stop collections of user-generated content give audiences a chance to find their works. With gatekeepers out of the way, it’s possible to realize the do-it-yourself dreams of punk and hip-hop, to circle back to the kind of homemade art that existed long before media conglomerates and mass distribution. But that art doesn’t stay close to home. Online it moves breathtakingly fast and far.

Folk cultures often work incrementally, adding bits of individuality to a well-established tradition, with time and memory determining what will last. In the user-generated realm, tradition is anything prerecorded, and all existing works seem to be there for the taking, copyrights aside.

In the process, another thing users generate is back talk. Surfing YouTube can be a survey of individual reactions to pop culture: movie and television characters transplanted out of their original plots or synched to improbable songs, pop hits revamped as comedy or attached to new, unauthorized imagery. (Try searching for Justin Timberlake on YouTube to see all the variations, loving and snide, on his single “Sexyback.”)

Copyright holders might be incensed; since buying YouTube, Google is paying some of them and fielding lawsuits from others. But a truly shrewd marketer might find some larger value. Those parodies, collages, remakes and mismakes are unvarnished market research: a way to see what people really think of their product. They’re also advertising: a reminder of how enjoyable the official versions were.

The amateurs may seem irreverent, disrespectful and even parasitical as they help themselves to someone else’s hooks. But they’re confirming that the pros came up with something durable enough to demand a reply. Without icons, what would iconoclasts mock?

Some pros understand that they don’t need to have the last word on their work. Rappers like Jay-Z customarily release a cappella versions of their rhymes, a clear invitation for disc jockeys and producers to work up their own new tracks. Rockers like Nine Inch Nails have placed their raw multitrack recordings online, along with the software to remix them. Filmmakers have not been so forthcoming, but that hasn’t stopped viewers from, for instance, editing “The Big Lebowski” down to all the moments when its characters use a certain four-letter word. It’s a popular clip on YouTube.

Of course the notion of culture as something bestowed by creators and swallowed whole by audiences never had much to do with reality. Now fans can not only tell others about their responses to art — in the user-generated content of fan sites and discussion forums — but they can also demonstrate them directly.

IN the tsunami of self-expression, audiences have been forced to take on a much bigger job: sifting through the new stuff. For musicians, the Internet has become an incessant public audition. What once was winnowed down by A&R departments, and then culled again by radio stations and other media, is now online in all its hopeful profusion. A listener could spend the rest of her life listening to unreleased songs. Some people do just that to claim bragging rights, or blogging rights, for discovering the next indie sensation.

Individually the hopefuls can’t compete with a heavily promoted major-label star. Face it: Song for song, most of them just aren’t as good. But collectively they are stiff competition indeed: for time, for attention and, eventually, for cultural impact. The multiplying choices promise ever more diversity, ever more possibility for innovation and unexpected delight. But they also point toward an increasingly atomized audience, a popular culture composed of a zillion nonintersecting mini-cults. So much available self-expression can only accelerate what narrowing radio and cable formats had already begun: the separation of culture into ever-smaller niches.

That fragmentation is a problem for businesses, like recording companies and film studios, that are built on selling a few blockbusters to make up for a lot of flops. The music business in particular is going to have to remake itself with lower and more sustainable expectations, along the lines of how independent labels already work.

But let the business take care of itself; it’s the culture that matters. Fragmentation is difficult too for artists with populist intentions, who want to be heard beyond the confines of their core following. That kind of ambition isn’t only a mercenary one. It’s a challenge to preach to the unconverted, and an achievement to unite disparate audiences. Every so often it’s good to break through demographic categories and share some cultural reference. Popular culture has never been entirely monolithic — someone, somewhere, has no opinion on Michael Jackson or “Titanic” — but 21st-century stardom has less clout, less scope. It’s shrinking down to mere celebrity.

Yet there is a limit to how splintered a culture can become, one that’s as much psychological as aesthetic. Humans like to congregate and join a crowd, at least up to a point. One thing the Internet does superbly is to tabulate, and it’s no accident that sites featuring user-generated content prominently display their own most-viewed and most-played lists. Even if they take pride in ignoring the mass-market Top 10, users still want a little company, and perhaps they hope that the collective choices add up to some guidance.

Humans also like to share what they enjoy; hence all the user-generated playlists at sites like Amazon or eMusic, the inevitable lists of favorite bands and films on social networking sites and the proliferation of music blogs, like fluxblog.org or obscuresound.com, that gather hard-to-find songs for listeners to download directly. The songs on music blogs are chosen not by companies desperate for profit, but by individuals with time to spare, and if the choices often seem a little, well, geeky — indie rock, with a side of underground hip-hop, seems to be the overwhelming choice of music bloggers — who but a geek would be spending all that time at a computer?

Those geeks make life easier for the media moguls who bought into user-generated content this year. Selection, a time-consuming job, has been outsourced. What’s growing is the plentitude not just of user-generated content, but also of user-filtered content. (There are even sites like elbo.ws that tabulate songs found on music blogs, finding yet another Top 10.)

The open question is whether those new, quirky, homemade filters will find better art than the old, crassly commercial ones. The most-played songs from unsigned bands on MySpace — some played two million or three million times — tend to be as sappy as anything on the radio; the most-viewed videos on YouTube are novelty bits, and proudly dorky. Mouse-clicking individuals can be as tasteless, in the aggregate, as entertainment professionals.

Unlike the old media roadblocks, however, their filtering can easily be ignored. The promise of all the self-expression online is that genius will reach the public with fewer obstacles, bypassing the entrenched media. The reality is that genius has a bigger junk pile to climb out of than ever, one that requires just as much hustle and ingenuity as the old distribution system.

The entertainment business is already nostalgic for the days when it made and relied on big stars; parts of the public miss a sense of cultural unity that may never return. Instead both have to face the irrevocable fact of the Internet: There’s always another choice.

The Perfect Tree Awaits in the Field, or in the Computer
Elizabeth Olson

WHEN the holiday season rolled around three years ago, Joseph Kennedy found that the Christmas trees available near his new home in Jacksonville, Fla., weren’t like those he remembered from his years living in Boston.

“We looked and looked, but the trees were not as nice and too expensive,” Mr. Kennedy, 44, said, calling their needles “razor sharp.”

But Mr. Kennedy, a stay-at-home dad, and his wife, Sheena, were determined to have a real tree for their daughter, Catherine, who is now 5, so he took his brother’s advice and ordered an evergreen online. He has since bought a tree on the Internet each year including the 7½-foot Fraser fir that arrived at his door last week.

The point-and-click method is gaining popularity among holiday shoppers who want to shorten their annual searches for evergreen perfection. Usually, online buyers pay more because of the shipping costs, which can add $20 to $50 to the base price of a 6½- to 7-foot tree.

Last year, only 200,000 to 500,000 Christmas trees were bought online — a small share of the country’s nearly 33 million natural holiday trees, said Rick Dungey, public relations manager for the National Christmas Tree Association.

It may seem like a breach of tradition to buy a tree sight unseen, instead of trudging into the woods and cutting it down, or carefully selecting it at a tree lot, a store or a street corner. But growers say online sales will increase as more people realize that there is an alternative to hauling a 40- to 50-pound tree home.

Some growers, like the Rocks Christmas Tree Farm in Bethlehem, N.H. www.therocks.org have already expanded their online capacity, to move beyond their traditional local bases and to reach clients across the country.

“Last year we sold 30 percent more trees online than we did the year before,” said Nigel Manley, who manages the tree farm, which is in the White Mountains and is owned by the Society for the Protection of New Hampshire Forests. Families can also visit the farm and cut their own trees.

For years before buying its first computer in 2000, the Rocks farm sold trees through a toll-free telephone number. The phone and online business was slow at first, because “most people don’t realize you can mail a tree,” Mr. Manley said.

But sales have risen, prompting him to buy three more computers, and the farm has honed tree-shipping to a science. Mr. Manley and his crew first select trees suitable for shipping and mark them with ribbons. Trees are cut only after an order arrives.

Once the tree is cut, it is shaken to get rid of any debris and loose needles. Then it is baled and packed in a narrow box lined with wax paper to protect the needles, keep it fresh and seal in the woodsy smell. The trees are delivered by FedEx or United Parcel Service one to five days after boxing, depending on the distance.

When the tree arrives at a customer’s home, the bottom of the box can be cut away so the trunk can be placed directly in the holder. Once the tree is level, the rest of the box can be removed.

This method offers convenience — and prevents a lot of poked eyes, said Christopher Collins, who lives in the Chelsea neighborhood of Manhattan and has bought trees online for the last five years. Mr. Collins, a member of the Board of Standards and Appeals in New York City, switched to electronic ordering after a tree he bought on a nearby street corner began dropping its needles almost as soon as it crossed his apartment’s threshold.

“There was no way to tell how long ago it was cut,” he said. When a co-worker suggested an e-tree, Mr. Collins decided to try it. “The first year, the doorman called and said: ‘Your Christmas tree is here. Should I send it up?’ ” Mr. Collins recalled. “It was so easy. He brought it up the elevator, and I didn’t even have to put on gloves.”

In preparing the tree, buyers are advised to make a fresh cut on the trunk so it absorbs enough water. Mr. Collins had a saw in his tool kit, but many tree purveyors sell saws online (about $12 for a small version) to accompany their trees. Mr. Kennedy, for example, bought one when he ordered his first tree in 2003.

More tree farmers are adding the online option. The Web site of the growers association www.realchristmastrees.org lists some 60 growers and retailers across the country that sell through the Internet.

The Rocks Christmas Tree Farm charges $55 for a 6½- to 7-foot Fraser fir, and $42 for a balsam tree of the same size, not including a flat $25 for shipping.

Of the 6,000 trees it sells each season, it ships about 400, mostly to online buyers. Online tree sales account for $22,000, and shipped wreaths $17,500, of the season’s $211,000 in revenue, Mr. Manley said. He expects online orders for both trees and wreaths to increase 20 percent this season.

Smaller growers who were once limited to their local markets are also expanding. West End Wreaths www.westendwreaths.com in West Jefferson, N.C., now ships about 100 trees that are ordered online. Scott Ballard, a co-owner of West End Wreaths, says online demand has risen 25 percent every year for the last four years.

“You have to be on the Web these days,” he said. ”It’s where technology meets tradition.”

This season, Mr. Ballard advertised on a weather-related Web site, and he is thinking about creating a virtual tree selection site so shoppers can pan through his fields and electronically choose the tree that they would like to cut down — or have him cut down and send.

Even the smallest family enterprises, like Beckwith Family Christmas Trees & Wreaths in Hannibal, N.Y., say they cannot ignore the Web’s potential. Faye and Jack Beckwith started a Web site for the business www.beckwithfamilychristmastrees.com in 2002 and were soon contacted by customers as far away as California.

“It’s definitely catching on,” she said of the Internet orders. She said Beckwith doubled its tree shipments two years ago, when wreaths were added to the online choices.

The business ships about 100 trees annually; a tree that sells for $32 when bought directly from the field might go for $80 online, including shipping, she said.

Mrs. Beckwith has mixed emotions about Internet orders because, like many other farm owners, she likes families to visit and cut their own trees. The farm has wagon rides and a gift shop, which help the small operation’s bottom line.

And there are limitations to online trees, the most important being size. The most popular online tree is 6 to 7 feet tall and weighs 40 to 50 pounds. Occasionally, a customer wants a much bigger tree — Mrs. Beckwith said a Manhattanite once asked for a 22-foot Fraser fir — that may be too heavy to be shipped in a box.

Even a 7-foot blue spruce would be too heavy, she said. It is a sturdy tree with stiff needles but is not as resilient as the fragrant balsams or the hardy Fraser firs, which are among the half-dozen most-ordered evergreens. Other commonly shipped trees are noble and Douglas firs and the Virginia pine. Some Web sites show photographs of the various types.

GROWERS who sell trees online know that repeat business depends on getting it right the first time.

“We have one shot to get and keep a customer,” acknowledged Mr. Manley, so he selects premium trees, hand-shears wayward branches to give the trees that ideal conical shape and times the shipping so the tree is at its freshest.

But mistakes can happen, as Mr. Collins has found out. Two years ago, his e-tree began to shed its needles soon after it arrived.

Instead of fretting over another selection, he picked up the phone and called the Rocks Christmas Tree Farm. “They shipped another tree overnight express, and it had that wonderful fragrance and freshness, so I can’t complain,” he said.

The Ambient Walkman
Jascha Hoffman

The popularity of the iPod has given new urgency to an old criticism of the portable music player: namely, that it isolates the listener by tuning out the world around him. As one response to this problem, Noah Vawter, a graduate student at the M.I.T. Media Lab, has created a pair of headphones that tunes the listener back in.

The device, which Vawter calls Ambient Addition, consists of two headphones with transparent earpieces, each equipped with a microphone and a speaker. The microphones sample the background noise in the immediate vicinity — wind blowing through the trees, traffic, a cellphone conversation. Then, with the help of a small digital signal-processing chip, the headphones make music from these sounds. For instance, percussive sounds like footsteps and coughs are sequenced into a stuttering pattern, and all the noises are tuned so that they fuse into a coherent, slowly changing set of harmonies.

The overall effect is a bit like listening to U2 with the vocals removed. Vawter is working on a version of the device that would rearrange the noises around the user to approximate any given pop song.

Disgruntled Dell Customer Finds Crafty Path to Lawsuit Settlement
Conrad Quilty-Harper

Pat Dori, a disgruntled Dell customer who found no resolution to the issue of a broken laptop after five long months and 19 wasted phone calls, decided to go legal and sue the company for failing to adequately address the problem. The method by which Mr. Dori initiated the claim is the juicy core of this story: instead of going through the normal process of sending the court papers to Dell's headquarters in Texas, Dori thought to have the papers delivered to a Dell shopping mall kiosk instead. Quite unsurprisingly, no-one from Dell turned up in court on the stipulated date, resulting in Dori winning a $3,000 default judgment and a ruling to allow bailiffs to close the kiosk and seize items if the judgment was not paid. Dell has now settled the case out of court for undisclosed terms, although the company would have appealed the decision -- had it actually turned up to court, that is. Mr. Dori, our latest hero for sticking it to the man in such a crafty manner, says that he thinks "any regular person can do this," as long as you "have the law on your side." Apparently the key is to "get their money" first, which will inevitably be followed by "[getting] their attention." It's gotta beat screaming down the phone, that's for sure.

Huge Victory for Real People as Telco Bill Dies

The gavel has fallen on the 109th Congress marking the demise of entrenched corporate efforts to legislate away our Internet freedoms — and a stunning victory for real people who want to retain control of the Internet.

The fate of Net Neutrality has now been passed to what appears to be a more Web-friendly Congress.

Our Coalition pledges to work with new Members to craft policies that ensure all Americans can access the Internet and enjoy the unlimited choices it has to offer.

The end of this Congress — and death of Sen. Ted Stevens’ bad bill — gives us the chance to have a long overdue public conversation about what the future of the Internet should look like. This will not only include ensuring Net Neutrality, but making the Internet faster, more affordable and accessible.

‘Huge Victory for Real People’

As the 109th comes to a close, Coalition members today praised our efforts in 2006 and discussed ways we can work towards a better Internet:

“This is a huge victory for real people and a clear signal to the next Congress that standing up for big bold ideas is a winning political proposition,” said Eli Pariser, executive director of MoveOn.org Civic Action.

Companies like AT&T, Verizon, BellSouth and Comcast spent more than $150 million to push Congress to gut Net Neutrality. But in the end, they couldn’t overcome widespread public opposition.

“The people’s attention to the issue of Net Neutrality is more powerful than any legislation — and this year proves that,” said Tim Wu, a professor at Columbia University Law School and author of Who Controls the Internet.

‘It’s About Fairness’

Network Neutrality has been part of the Internet since its inception, ensuring that the service providers who control the “pipes” don’t interfere with content based on its ownership or source. “Net neutrality is just about fairness and a level playing field,” said Craig Newmark, founder of craigslist. “It’s that simple.”

“Industry will be back with their money and phony grassroots groups,” said Jeannine Kenney, senior policy analyst at Consumers Union. “But next time around, with a public now well-informed of what’s at stake, we hope Congress will take up broadband policy that advances consumer — not just industry — needs.”

The more than 850 groups in the SavetheInternet.com Coalition also include the National Religious Broadcasters, the Service Employees International Union, the American Library Association, Educause, Gun Owners of America, Future of Music Coalition, Parents Television Council, the ACLU, and every major consumer group in the country. These are supported by a community of more than a million small businesspeople, bloggers, MySpacers, YouTubers, activists and citizens.

“As an activist and new media advocate, I am encouraged by our prospects in Congress for protecting the egalitarian spirit of the Internet and all people’s unfettered access to it,” said Christopher Rabb, founder of Afro-Netizen. “This fight has even greater impact on underserved communities, particularly among African-Americans, who rarely own or control the content we consume in mainstream media.”

‘The Fight for Net Neutrality Has only Begun’

While the defeat of HR 5252 is a major step forward, the future of the Internet remains in jeopardy until Congress passes meaningful, enforceable protections for Net Neutrality. Such legislation will be a top priority for members of the SavetheInternet.com Coalition when the legislators return in January.

“Despite a Congress deeply in the pocket of telecom lobbyists, the public banded together to stop attacks on our free and open Internet,” declared Michael Kieschnick, president of the Working Assets. “In 2007, we will continue the fight to preserve this precious public good by making Network Neutrality the law of the land.”

“The potent combination of grassroots support and the facts stopped a bad bill,” said Mark Cooper, director of research for the Consumer Federation of America. “But the fight for Net Neutrality has only begun.”

Ma Bell Capitulates to Cable

ATT announced that it would not need to build an expensive, all-fiber network to handle high-speed Internet and video traffic in the areas it operates in, to compete with cable.

We view this as a backing off of previous plans for [AT&T's Internet video service] U-Verse, and can be nothing but good for the cable companies. The telecoms don't really appear willing to take the risk of building an all-fiber network to compete with the incumbents.

This is a marked reversal of previous plans and we view as a sign that AT&T is backing off its original intentions to compete on a grand scale with the incumbent cable operators by building an expensive fiber network with no guarantee the capital required to deploy such a network will ultimately be justified.
We see AT&T backing off building an all-fiber solution for the deployment of video implies they are likely looking to the "satcasters" [satellite-broadcasters] to deploy video service instantly and ubiquitously as we mentioned in our last note on (LCAPA) , and why that company may be looking to acquire (DTV) .

Until recently, AT&T has been aggressive, as has (VZ) with its FiOS [Internet] service, upgrading networks with fiber for U-Verse. Unlike Verizon's service, however, now AT&T plans to use its existing legacy copper lines to deploy new services to save costs, claiming that the bandwidth they have to do so at this point in time is more than adequate.

We don't think this is the case but rather simply an excuse for AT&T's change in direction. An admission that at the moment, cable likely has the markets they serve.
In fact, the decision by AT&T is reminiscent of the days of telecom's "video dial tone" [television over phone lines] (which was never any good or really deployed) and in our opinion won't be an effective competitor to cable. We see the announcement as capitulation by AT&T, which is better than good for the cables, which should trade up materially as a result.

[Cable companies] are already entrenched, offer numerous services, have the franchises, and know how to deploy new services in a way telecoms don't. The only telecom advantage as we see it, is they have wireless, which is why we think ultimately the cables will buy what they built, namely (S) and split it up amongst themselves to offer the true quadruple play. At that point, from an advantage point of view, the telecoms would have nothing.
In a nutshell, we are convinced more and more that cable is where it's at, and soon public market multiples should make this clear.
-- David J. Brenner -- Robert G. Routh, CPA -- Meredith L. Fisher

VoIP Subscribers Grow 18 Percent in 3Q
Bruce Meyerson

U.S. subscribers to Internet-based telephone services grew 18 percent to 8.2 million in the third quarter, but the growth rate slowed for a second straight quarter, according to the research firm TeleGeography.

The latest tally on the market for Voice over Internet Protocol, better known as VoIP, is more than double the total of a year ago.

VoIP revenues for the second quarter were up about two and a half times - $732 million across the United States, compared with a year-ago level of $298 million.

Vonage Holdings Corp. remained the biggest provider with 1.95 million subscribers, followed again by Time Warner Inc.'s cable TV business at 1.64 million. But Comcast Corp. moved into third place with 1.35 million, surpassing Cablevision Systems Corp.'s 1.10 million.

TeleGeography predicted the market would grow by roughly 1.5 million subscribers in the fourth quarter to end the year with 9.7 million, or about 8.7 percent of the nation's households. Revenues are expected to approach $2.6 billion for the year, or more than 2.5 times the 2005 total of just over $1 billion.

Samsung Sued for Trademark Infringement
Bruce Meyerson

The maker of BlackBerry mobile devices is suing the maker of the new "BlackJack" smart phone, charging Samsung Electronics Co. Ltd. with trademark infringement.

The suit brought by Research in Motion Ltd. in U.S. Distinct Court for Central California alleges that "Samsung's use of the name `BlackJack' in connection with a smartphone" amounts to "unfair competition and trademark dilution."

The BlackJack was introduced last month in the United States by Cingular Wireless, which also happens to be the single largest purveyor of BlackBerry devices and e-mail service. Like a growing number of advanced cell phones, the BlackJack features a full "QWERTY" keyboard for thumb typing messages, a concept first popularized by the BlackBerry.

A Samsung spokesman said the Korean company does not comment on pending legal matters. Cingular also declined comment on the suit, saying only that it continues to sell both devices.

Samsung introduced a very similar device to the BlackJack earlier this year in Britain through Vodafone Group PLC under a different brand name, the i600.

In its suit, filed Friday, RIM suggested it was no accident that Samsung used a different name overseas, where BlackBerry is less popular, and then chose the BlackJack name for the market where BlackBerry is best known.

Though nearly identical in shape and size, there are differences between the i600 and the BlackJack: the i600, for example, is equipped with two built-in cameras, on the front and one on the back; the BlackJack has one.

"The BlackJack device was designed specifically for the U.S. market," said Kim Titus, a Samsung spokesman. "There is a device (overseas) that has a similar form factor but has different functionality."

RIM's suit also suggested that Samsung chose the BlackJack to take advantage of the recent launch a BlackBerry device called the Pearl that is similarly small and also black in color.

"The overall look of the BlackJack smartphone is highly similar to RIM's BlackBerry Pearl smartphone," the suit said, noting that the two devices are very close in weight and dimensions.

The suit also argues that Samsung approved a national Cingular ad campaign for the BlackJack that "capitalizes on the design similarities" and "has resulted in confusion" with the Pearl.

Marrying the Cellphone to Cheap Internet Calling
Glenn Fleishman

MATTHEW MILLER wanted to cut the cost of his cellphone plan. He and his wife, Dayna, had regularly exceeded their 2,000-minute-per-month T-Mobile family plan, incurring extra-use charges that reached $60 some months.

With her home business and his daily commute of two and a half hours to his job in Seattle, they decided this year to move to the maximum 3,000-minute plan. They spend another $20 a month for unlimited long-distance calling on their landline.

Mr. Miller, a columnist for Geek.com and ZDNet in his spare time, was therefore not surprised when T-Mobile asked the couple to join an early local test of a service that combines the ubiquity of cellular networks with the flat pricing for unlimited calls available with some Internet-based phone services.

The new service, HotSpot@Home, allows a subscriber to place calls from a mobile phone using cellular and Wi-Fi networks, whether a home wireless network or a hot spot operated by T-Mobile.

In my own testing, I found the service a reasonable first draft of what could become a reliable alternative to both all-cellular networks and an emerging set of Wi-Fi-only phones. The marriage might even save money — for both T-Mobile and its subscribers. Carrying calls over Wi-Fi networks costs the company as little as 20 percent of the expense of calls handled on a cellular network.

All calls originating on a Wi-Fi network to numbers in the United States are included in a monthly fee of $20 for a primary phone and $5 for additional phones in a family plan. The Wi-Fi plan must be coupled with a traditional voice cellular service plan of at least $40 a month.

Although T-Mobile introduced the service in late October, after the tests in which the Millers took part, the company allows subscribers to sign up only in the Seattle-Tacoma region, and only at corporate stores. The service can be used nationwide, however.

The company, based in Bellevue, Wash., declined to comment for attribution for this story, citing its intention to keep interest in the service low until it is nationally available. I tested this service as a walk-up customer at a mall kiosk paying retail price.

The service is designed to pass calls in progress from a Wi-Fi network to the cellular network (or vice versa) when a signal drops in strength, in the same fashion that regular cellphones hand off among many cell towers. To a suitably equipped telephone, Wi-Fi is just another cell tower.

Providing calls over Wi-Fi also has the potential to improve voice quality in often hard-to-serve interior spaces in detached homes and apartment buildings.

While corporations have used telephone handsets or base stations that route calls exclusively over Wi-Fi, those networks require expensive server equipment to ensure call quality, roaming and capacity. Telephones for these networks typically cost at least $300 to $500.

T-Mobile’s service, by contrast, works over networks using much less expensive equipment, including existing home Wi-Fi gateways, as well as a router that T-Mobile offers for free to subscribers after a $50 mail-in rebate. Further, its subscribers bear the cost of the home network broadband connection.

Other Wi-Fi phones have appeared in great variety in recent months, with several models appearing that tie into Skype, the eBay-owned service that dominates free computer-to-computer calling worldwide. For a variety of per-minute and flat-rate fees, Skype also offers calling to and from the public switched-telephone network.

These Wi-Fi-only phones lack cellular radios, and often have difficulty in connecting to Wi-Fi networks that are not completely free and open, or are not operated by the phone’s owner. (Some smartphones feature both cellular and Wi-Fi radios, including several Nokia models sold primarily outside the United States, but carriers that support these phones do not offer hybrid calling plans.) For the T-Mobile service being offered in Seattle, with its dual Wi-Fi and cellular ability, the choice of phones is limited, although more are expected to appear throughout 2007. HotSpot@Home requires either the Nokia 6136 or the Samsung SGH-T709. Both are $30 after a $50 mail-in rebate.

The phones automatically connect to T-Mobile hotspots, and can scan and be configured to connect to any open Wi-Fi network or one secured with a home Wi-Fi security method.

Because the service uses an international standard (Unlicensed Mobile Access) focused on voice, the phones perversely cannot use Wi-Fi networks for data access, and laptop access to T-Mobile hotspots is also not included in the HotSpot@Home plan.

Information services offered with the phones, including a typical minimally featured Web browser, require T-Mobile’s low-speed GPRS or slightly faster EDGE cellular data network. Access to those networks adds $20 a month for unlimited use.

This also means that a free network that requires a button click to gain access is off limits to the service. I tried to test the phone on a commuter bus line through Seattle that has a trial Wi-Fi-based Internet connection on board. But I was stymied by the inability to click “I Accept.”

Nevertheless, I used a Nokia 6136 over a swath of Seattle, including inside homes and offices, and at hot spots run by T-Mobile and other providers. Call quality was excellent on all Wi-Fi networks tested, including full-duplexing — better described as the Robert Altman effect — in which both parties are speaking at the same time but can hear each other clearly.

Roaming, however, was far from acceptable. The cellular-to-Wi-Fi handoffs worked most of the time without interruption to a call in progress. But most Wi-Fi-to-cell transitions caused a dropped call as the hot spot signal ebbed with distance.

The Millers experienced regular call drops during calls placed on the Wi-Fi connection; they tried both the Samsung and Nokia models. Another user, Monica Paolini, a cellular and wireless industry analyst, has found her Samsung phone “sometimes ‘forgets’ about Wi-Fi and it needs to be rebooted.”

These rough edges in roaming and call continuity can be smoothed over time through software updates performed over-the-air to the phone — something cellular carriers already carry out on a regular basis for all their phones — and through tweaks to the handoff systems on the cellular network. T-Mobile is expected to make these improvements before expanding its potential subscriber base.

Ms. Paolini uses the phone with a D-Link Wi-Fi router sold by T-Mobile and with a second Wi-Fi network in her home. The D-Link router includes two features intended to improve call quality and battery life.

The first feature, WMM (Wireless Multimedia), can give higher priority to voice data — as well as streaming media — traveling over a Wi-Fi network to reduce the chance of stuttering or delays.

The second feature, a subset of WMM called Power Save, lets a handset reduce radio power whenever it is not actively transmitting or receiving.

This can increase battery life by 15 to 40 percent over standard Wi-Fi, according to the Wi-Fi Alliance, an industry trade group that provides WMM certification and device approval.

Mr. Miller said that after the several weeks of testing, he signed up for the commercial service from T-Mobile, only to drop it within the two-week cancellation period. He and his wife were unable to get consistent connections to the Wi-Fi router with either the Nokia or Samsung phone, and were unhappy with the limited battery life and the call dropping.

“If it wasn’t dropping calls and frustrating her from that aspect, we probably would have stuck with it,” he said. He would consider the service again if he was confident that it had improved.

T-Mobile may be eager to convert and retain customers like the Millers and me. When I canceled my service after testing, a store manager offered to pay $350 in cancellation fees my current provider would have charged, sweetened further with a $100 use credit after a year’s service.

While that offer is not unheard-of to lure a switcher — carriers can pay $300 or more in customer acquisition costs — it may show how eager the company is to further its trial program here before trying to sell the rest of the nation on Wi-Fi calling.

Replacing Your Legacy Phone System With Trixbox
Sam Banks

Voice Over IP or VOIP seems to be the buzz word on everybody's lips at the moment and with good reason. Forwarding your calls over the internet instead of the phone lines can save you big money. As a communications consultant I have received many enquiries about VOIP as of late and as a Linux fan I have read much about the progress of the open-source Asterisk PBX project headed up by Digium. Utilizing the power and adaptability of Linux, one can build themselves an Asterisk based server on commodity hardware for a fraction of the price of a proprietary system. Installation and configuration can be very tricky however if you aren't blessed with Guru linux skills, enter Trixbox.

The Trixbox project, formerly known as Asterisk@home, is designed to make it possible for almost anyone to set up a fully functional Asterisk server in less than an hour using GUI configuration tools and a web browser. It is based on Centos and has just about every goody imaginable for a phone system and even comes bundled with the open source Sugar CRM, although we will not be testing this setup as it is outside the scope of this article and outside of the needs of most people. Personally, if I am building a phone system then I would prefer that it just concentrated resources on making and receiving calls, but it is a nice option none the less.

To test Trixbox I am using a custom built rig running a 3ghz Pentium 4 processor on an Intel motherboard with 512MB of Ram, I opted for the Intel board because I had read on the Asterisk message boards that Intel chipsets provided the best performance for Asterisk. The system it is replacing is a Siemens Hipath 3350, a fully featured mid-range PBX that is about four years old. I consulted the message boards again and opted for the Linksys SPA94, as my IP phone of choice, which a lot of people had reccomended. I would have preferred a phone running IAX, Asterisk's native protocol for communicating, but as the world seems to be converging on SIP as the de-facto standard, all the high quality phones appear to only support SIP.

The install is as painless as the Trixbox website claims and took my machine about thirty minutes in total, including the time and date configuration. I cant imagine anyone with reasonable PC skills having any trouble with it. Once you boot up the system it drops in to a console with the message "For access to the Trixbox web GUI use this url:" although the IP address will be different depending on your situation. I jumped on to a neighbouring PC, on the same network, and fired up firefox with the IP address I was given and was greeted by the trixbox welcome screen. The welcome screen has links to the configuration pages for each application along with summarized descriptions, which make it very friendly for the intrepid novice. The Menus are as follows:

Voicemail and RecordingsThis is the Asterisk Recording Interface. It provides a user friendly web interface to voicemail and call monitor recordings. As well, it provides access to user settings in Asterisk.

Web MeetMeThis application helps you manage the web based conferencing ability of trixbox.

FOPSimilar to HUDlite, FOP is an operator and call-control software. FOP runs inside your web browser using Flash, vs. HUDlite which runs on your Windows XP, Mac or Linux desktop.

SugarCRMThis is an open source contact center software, great for managing your contacts online, scheduling and most importantly sales force automation.

These menus are designed so that anyone can access them which is handy for employees wanting to check their voicemail or change their message, switching from the user mode mode however opens up the password protected "Restricted Area" which is where all the fun happens. In the restricted area I set up a couple of phones without to much trouble and an SIP trunk that I purchased from 0064. There are many more options but I am initially just looking to replace the functionality of my current system which is basically to be able to make and receive calls and voicemail. One really nice touch wasthe ability to specify your own shortcut keys to mimic your old system, which means no staff training for me which is a huge bonus.

My SIP account came with some free credit which allowed me to make a couple of test calls so I plugged in my phones, called each other, which worked flawlessly, took a deep breath and dialled my cell phone. Much to my surprise it worked first time and the call quality wasn't half bad either. I called my partners cell phone and she couldn't even tell that I was calling from a different system until my free credit ran out.

All in all it took me less than a day to have a completely functional phone system that was now making calls over the internet at a fraction of the cost of our normal charges. The test was so successful in fact that it is now our only system and has been working solid for two weeks. The only issues I have come across have been related to our internet provider dropping rather than Trixbox itself. To combat this I have since installed an analogue line card from Digium to work as a backup, I would reccommend this to anyone shifting to VOIP for their business as the internet doesn't tend to be as reliable as the old copper phone lines. Aside from that Trixbox has saved our business hundreds of dollars already and was indeed as easy to install as claimed. This can only spell trouble for the Telcos as more people realise that they are paying far more than they need to for calls and shift to Linux based Asterisk solutions.

The Hole Trick

How Skype & Co. Get Round Firewalls
Jürgen Schmidt

Peer-to-peer software applications are a network administrator's nightmare. In order to be able to exchange packets with their counterpart as directly as possible they use subtle tricks to punch holes in firewalls, which shouldn't actually be letting in packets from the outside world.

Increasingly, computers are positioned behind firewalls to protect systems from internet threats. Ideally, the firewall function will be performed by a router, which also translates the PC's local network address to the public IP address (Network Address Translation, or NAT). This means an attacker cannot directly adress the PC from the outside - connections have to be established from the inside.

This is of course a problem when two computers behind NAT firewalls require to talk directly to each other - if, for example, their users want to call each other using Voice over IP (VoIP). The dilemma is clear - whichever party calls the other, the recipient's firewall will decline the apparent attack and will simply discard the data packets. The telephone call doesn't happen. Or at least that's what a network administrator would expect.

But anyone who has used the popular internet telephony software Skype knows that it works as smoothly behind a NAT firewall as it does if the PC is connected directly to the internet. The reason for this is that the inventors of Skype and similar software have come up with a solution.

Naturally every firewall must also let packets through into the local network - after all the user wants to view websites, read e-mails, etc. The firewall must therefore forward the relevant data packets from outside, to the workstation computer on the LAN. However it only does so, when it is convinced that a packet represents the response to an outgoing data packet. A NAT router therefore keeps tables of which internal computer has communicated with which external computer and which ports the two have used.

The trick used by VoIP software consists of persuading the firewall that a connection has been established, to which it should allocate subsequent incoming data packets. The fact that audio data for VoIP is sent using the connectionless UDP protocol acts to Skype's advantage. In contrast to TCP, which includes additional connection information in each packet, with UDP, a firewall sees only the addresses and ports of the source and destination systems. If, for an incoming UDP packet, these match an NAT table entry, it will pass the packet on to an internal computer with a clear conscience.

The switching server, with which both ends of a call are in constant contact, plays an important role when establishing a connection using Skype. This occurs via a TCP connection, which the clients themselves establish. The Skype server therefore always knows under what address a Skype user is currently available on the internet. Where possible the actual telephone connections do not run via the Skype server; rather, the clients exchange data directly.

Let's assume that Alice wants to call her friend Bob. Her Skype client tells the Skype server that she wants to do so. The Skype server already knows a bit about Alice. From the incoming query it sees that Alice is currently registered at the IP address and a quick test reveals that her audio data always comes from UDP port 1414. The Skype server passes this information on to Bob's Skype client, which, according to its database, is currently registered at the IP address and which, by preference uses UDP port 2828.

Step 1: Alice tries to call Bob, which signals Skype.

Bob's Skype program then punches a hole in its own network firewall: It sends a UDP packet to port 1414. This is discarded by Alice's firewall, but Bob's firewall doesn't know that. It now thinks that anything which comes from port 1414 and is addressed to Bob's IP address and port 2828 is legitimate - it must be the response to the query which has just been sent.

Step 2: Bob tries to reach Alice, which punches a hole through Bob's Firewall.

Now the Skype server passes Bob's coordinates on to Alice, whose Skype application attempts to contact Bob at Bob's firewall sees the recognised sender address and passes the apparent response on to Bob's PC - and his Skype phone rings.

Doing the rounds

This description is of course somewhat simplified - the details depend on the specific properties of the firewalls used. But it corresponds in principle to our observations of the process of establishing a connection between two Skype clients, each of which was behind a Linux firewall. The firewalls were configured with NAT for a LAN and permitted outgoing UDP traffic.

Linux' NAT functions have the VoIP friendly property of, at least initially, not changing the ports of outgoing packets. The NAT router merely replaces the private, local IP address with its own address - the UDP source port selected by Skype is retained. Only when multiple clients on the local network use the same source port does the NAT router stick its oar in and reset the port to a previously unused value. This is because each set of two IP addresses and ports must be able to be unambiguously assigned to a connection between two computers at all times. The router will subsequently have to reconstruct the internal IP address of the original sender from the response packet's destination port.

Other NAT routers will try to assign ports in a specific range, for example ports from 30,000 onwards, and translate UDP port 1414, if possible, to 31414. This is, of course, no problem for Skype - the procedure described above continues to work in a similar manner without limitations.

It becomes a little more complicated if a firewall simply assigns ports in sequence, like Check Point's FireWall-1: the first connection is assigned 30001, the next 30002, etc. The Skype server knows that Bob is talking to it from port 31234, but the connection to Alice will run via a different port. But even here Skype is able to outwit the firewall. It simply runs through the ports above 31234 in sequence, hoping at some point to stumble on the right one. But if this doesn't work first go, Skype doesn't give up. Bob's Skype opens a new connection to the Skype server, the source port of which is then used for a further sequence of probes.

Skype can do port scans. Here it suceeds on port 38901 and connects through the firewall.

Nevertheless, in very active networks Alice may not find the correct, open port. The same also applies for a particular type of firewall, which assigns every new connection to a random source port. The Skype server is then unable to tell Alice where to look for a suitable hole in Bob's firewall.

However, even then, Skype doesn't give up. In such cases a Skype server is then used as a relay. It accepts incoming connections from both Alice and Bob and relays the packets onwards. This solution is always possible, as long as the firewall permits outgoing UDP traffic. It involves, however, an additional load on the infrastructure, because all audio data has to run through Skype's servers. The extended packet transmission times can also result in an unpleasant delay.

Use of the procedure described above is not limited to Skype and is known as "UDP hole punching". Other network services such as the Hamachi gaming VPN application, which relies on peer-to-peer communication between computers behind firewalls, use similar procedures. A more developed form has even made it to the rank of a standard - RFC 3489 "Simple Traversal of UDP through NAT" (STUN) describes a protocol which with two STUN clients can get around the restrictions of NAT with the help of a STUN server in many cases. The draft Traversal Using Relay NAT (TURN) protocol describes a possible standard for relay servers.
DIY hole punching

With a few small utilities, you can try out UDP hole punching for yourself. The tools required, hping2 and netcat, can be found in most Linux distributions. Local is a computer behind a Linux firewall (local-fw) with a stateful firewall which only permits outgoing (UDP) connections. For simplicity, in our test the test computer remote was connected directly to the internet with no firewall.

Firstly start a UDP listener on UDP port 14141 on the local/1 console behind the firewall:

local/1# nc -u -l -p 14141

An external computer "remote" then attempts to contact it.

remote# echo "hello" | nc -p 53 -u local-fw 14141

However, as expected nothing is received on local/1 and, thanks to the firewall, nothing is returned to remote. Now on a second console, local/2, hping2, our universal tool for generating IP packets, punches a hole in the firewall:

local/2# hping2 -c 1 -2 -s 14141 -p 53 remote

As long as remote is behaving itself, it will send back a "port unreachable" response via ICMP - however this is of no consequence. On the second attempt

remote# echo "hello" | nc -p 53 -u local-fw 14141

the netcat listener on console local/1 then coughs up a "hello" - the UDP packet from outside has passed through the firewall and arrived at the computer behind it.

Network administrators who do not appreciate this sort of hole in their firewall and are worried about abuse, are left with only one option - they have to block outgoing UDP traffic, or limit it to essential individual cases. UDP is not required for normal internet communication anyway - the web, e-mail and suchlike all use TCP. Streaming protocols may, however, encounter problems, as they often use UDP because of the reduced overhead.

Astonishingly, hole punching also works with TCP. After an outgoing SYN packet the firewall / NAT router will forward incoming packets with suitable IP addresses and ports to the LAN even if they fail to confirm, or confirm the wrong sequence number (ACK). Linux firewalls at least, clearly fail to evaluate this information consistently. Establishing a TCP connection in this way is, however, not quite so simple, because Alice does not have the sequence number sent in Bob's first packet. The packet containing this information was discarded by her firewall.

Skype’s Free Phone Call Plan Will Soon Have Annual Fee
Matt Richtel

Skype, the Internet calling service owned by eBay, said Tuesday that as of Jan. 1 it would begin charging $30 a year for unlimited calls to landline and mobile phones within the United States and Canada. Those calls had been free since last spring.

The new annual fee for unlimited calling, while still nominal compared with other Internet calling plans, is part of a broader strategy by eBay to expand Skype’s product offerings and revenue.

EBay, the online auction giant, paid $2.5 billion for Skype in October 2005, prompting criticism from some analysts that it had overpaid for a start-up company focused on a different market and technology.

EBay executives assert that Skype can help it by allowing low-cost voice and video communication between its buyers and sellers. In addition, eBay wants to capitalize on Skype’s base of 136 million registered users.

As a promotion, Skype began allowing its users to place free domestic “SkypeOut” calls from their computers to traditional and mobile phones last May. At the time, the company said the promotion would extend only through year’s end. The company is offering a half-price subscription to those who sign up before Jan. 31. Calls from one computer to another have been and will continue to be free.

“We see a willingness by consumers to make SkypeOut calls that are well priced,” said Don Albert, Skype’s general manager for North America. He noted that the cost was still a fraction of the typical $25 monthly fee that other Internet phone providers charge for unlimited calls. Mr. Albert declined to predict the adoption rate for the plan or the revenue it could bring in.

Despite the relatively low cost of the service, industry analysts said Skype was not considered to be serious competition in the telecommunications business. Skype, unlike Vonage, the cable companies and other competitors, generally requires users to download software and to make calls from the device on which it is installed.

“Skype requires a behavioral change. Consumers have grown quite comfortable using their telephones,” said Jeffrey Halpern, a telecommunications services industry analyst with Sanford C. Bernstein & Company. “I don’t view Skype as a real threat to the telephone companies or even Vonage or the cable companies.”

Over all, the Internet calling business is booming. Mr. Halpern said that by the end of the third quarter, there were around 8 million subscribers to Internet calling plans in the United States, up from 6.5 million in the previous quarter. That figure did not include users of Skype.

Mr. Albert, a former eBay executive who joined Skype this year, said the new prices were part of a broader plan.

“We get put in a bucket of being a cheap way to make phone calls, but our vision is quite a bit more expansive than that,” he said.

The company has been developing and deploying technology that allows Skype to be used on other devices, including wireless phones and pocket computers.

But potentially more significant innovations are planned for next year, when Skype will introduce services with Yahoo and Google that will allow Web surfers to click a button and call a business they have found during a search.

Mr. Albert said the concept, known as “click to call,” was an important example of combining eBay’s expertise in online sales with Skype’s capacity to allow people to make inexpensive calls.

Industry analysts have mixed opinions about how successful such a program can be and whether it can help justify the hefty price eBay paid for Skype.

Tim Boyd, an analyst with Caris & Company who has a buy rating on eBay, said he saw click-to-call as a “tremendous opportunity” for eBay to generate revenue by charging businesses for the calls.

But Mr. Boyd and other analysts were less sanguine about eBay’s hopes that its own auction buyers and sellers would become heavy adopters of Skype.

EBay has projected that those buyers and sellers will use the service to iron out details and provide basic support during the sales process.

“Many of the folks selling do not put a telephone number on their listings,” said Derek Brown, an analyst with Cantor Fitzgerald & Company, who has a buy rating on eBay stock. “It’s not because telecom costs are too high. It’s because it costs too much to have people answering the phones.”

Mr. Brown said eBay had yet to demonstrate how it could integrate Skype into its business in a way that would justify the acquisition costs.

In the third quarter, Mr. Brown noted, Skype generated $50 million in revenue, a mere 3 percent of eBay’s $1.45 billion in total revenue.

“We get lots of questions of when eBay is going to be able to monetize Skype,” Mr. Albert conceded. But he said the new calling plan underscored the company’s effort to do so.

“If you ask, ‘Was this worth our investment,’ you’d get an enthusiastic triple-thumbs-up from Meg Whitman,” eBay’s chief executive, Mr. Albert said.

Disrupter Man Goes After TV This Time
Kevin Maney

Few entrepreneurs have truly disrupted a single industry. Niklas Zennstrom has done it to two — and he has his sights on a third.

Zennstrom and business partner Janus Friis founded file-sharing service Kazaa, which by 2001 became the world's favorite way to steal copyrighted music. Entertainment companies all over the world lined up to sue. Next came Skype, the first globally popular free Internet calling service, which crumbled international telecom company business models. EBay bought Skype last October for $2.6 billion, and Zennstrom is Skype's CEO.

Now Zennstrom and Friis have a side endeavor. They've co-founded a secretive Internet TV venture called The Venice Project, which analysts say could threaten the viability of network television.

"There's never been a secret sauce" to his disruptive success, Zennstrom says with apparent modesty while flashing a grin. He creases his 6-foot-4 frame into a stuffed chair in his hotel room and looks more like a rumpled high-school chemistry teacher than a high-powered executive. "It's just that our timing has always been good."

In part, he's right. Zennstrom and Friis have never been first with a technology: They've followed with the right thing at the right time. Still, Zennstrom has established himself as a man the tech industry watches carefully. Hence the attention paid to The Venice Project, even though hundreds of video sites already crowd the Internet.

"Niklas and Janus … are two of the most extraordinary people I have ever met," says Tim Draper of venture capital firm Draper Fisher Jurvetson, which helped fund Skype. "I think they will succeed again and again."

Zennstrom, who hails from Sweden and lives and works in London, rarely gives interviews. This one is happening on his first trip to the USA in five years. He stayed out of the country to avoid being served in Kazaa lawsuits, which were recently settled.

He is just 40. His take from selling Skype to eBay is estimated at more than $400 million. Investors stand ready to back him. Zennstrom says he pledges himself to Skype and eBay for three to four years, but probably no longer.

"Don't expect to interview me in 20 years and I'm still CEO of Skype," he says.

In other words, Zennstrom could be starting companies for a long time to come — probably with Friis. Zennstrom is 10 years older and more of the leader. Friis is the hacker and tinkerer who gets the technology off the ground.

The biggest question about Zennstrom is whether he's good only at launching disruptive companies, not at building them into substantive businesses. Tech analysts say they still don't understand why eBay paid so much for Skype when similar free Internet calling services are offered by everyone from AOL to start-ups like Jajah.

136 million and growing

In an hour-long interview, Zennstrom does not seem to have an outsized ego — until he talks about his ambitions for Skype. When he started it in 2003, he told Fortune, "There is multibillion dollars in potential in Skype. We're not here to try to make some small business."

"It's the same plan," he says now. "We have 136 million users. There aren't many telephone companies that have more customers. We are still in growth mode. In terms of revenue per user, Verizon gets much more, but they also have much higher costs."

Zennstrom met Friis, a Dane, while working for Swedish telecom company Tele2. They left in 1999 to start an Internet company together to build a fast, easy-to-use technology called FastTrack. It was peer-to-peer (P2P) technology. It had no central data center, borrowing all the users' computers on the network to store and forward files.

It's a technical challenge, but if done well, P2P can be a cheap, fast way to move large amounts of data around the Net.

On top of FastTrack, Zennstrom and Friis built Kazaa, which surfaced just as the music industry shut down Napster in 2001. Millions of Napster users had become addicted to free music and switched to Kazaa because it was easy to use. Zennstrom and Friis became the Recording Industry Association of America's chief target.

After years of cat-and-mouse legal games, Zennstrom, Friis and Kazaa settled with the music industry in July for $100 million. They've rid themselves of Kazaa ownership, selling pieces in a series of legal maneuvers.

Kazaa set the stage for Skype. While considering what to do after Kazaa, Zennstrom says he and Friis thought about how "any digital content should be delivered over the Internet because it's so much more efficient." They then thought about the high cost of international phone calls, which are just another form of digital content.

"I remember us saying (around 2002) that Internet telephony should work by now," Zennstrom says. "We certainly didn't invent Internet telephony, but it wasn't very good and was too hard to use."

They realized that P2P could do for phone calls what it had done for music files. "We learned a lot by doing Kazaa," Zennstrom says. But they had to create a more sophisticated P2P, because calls must reach the right person and work with good quality in real time.

Still, when Zennstrom and Friis started Skype, they were considered pirates and outliers. "It was difficult to hire and raise money," Zennstrom says. But then Draper, who has always had a penchant for funding tech renegades, chipped in $8.5 million. "I recall first meeting Niklas in London," Draper says. "I had set up a meeting for half an hour, and I stayed for two."

Skype became the fastest-growing start-up in history. After 12 months, it was on pace to grow five times faster in numbers of users than eBay did in its first years. Seeing that, in 2005 eBay came calling.

Learning from eBay

"We didn't plan to sell," Zennstrom says. "We started a conversation with (eBay CEO) Meg Whitman because we thought we should work with eBay." He actually thought eBay wouldn't like Skype because a Skype voice connection could be a way for sellers and buyers to cut deals that eBay couldn't track.

Whitman saw something else: a fast-growing business that might also help eBay users talk to each other and close transactions more easily, especially those that involve big-ticket items like cars. "We always seek to remove friction from e-commerce," Whitman told USA TODAY soon after the Skype deal. "It leads to a better experience and an increase of velocity of trades."

She also liked Zennstrom and Friis. "They are impressive entrepreneurs who will be a great cultural fit with eBay," she said.

Zennstrom got thinking, too. He didn't want Skype to do an IPO in the dot-com bust years. Based in Europe, which is not known for Silicon Valley-style start-ups, Skype had trouble hiring executives who had been part of hyper-growth tech companies. And while Skype was growing like mad in Asia and Europe, it had trouble penetrating North America.

"We realized if we partnered with eBay, they could help us," Zennstrom says.

Whitman has been criticized for the deal by analysts and investors. She has not clearly shown how Skype helps the eBay site — though, on the flip side, it's clear that eBay's marketing muscle has helped Skype grow 122% in North America in 2006.

"In general, they're not doing a bad job in the VOIP (voice over Internet protocol) space," says Mirabel Lopez, vice president of research at Forrester Research. She pegs Skype revenue at $200 million in 2006, up from $60 million in 2005. "Since most people use it because it's free, the fact that they're making money at all is a good thing."

Zennstrom insists he's happy with the marriage. "You never know how the chemistry will be, but it's been really great," he says. "Meg did not impose on us to do everything the eBay way." He says he's learning a lot about management from Whitman and other eBay executives. Several attempts to talk to Friis were unsuccessful.

Fixing TV

The Venice Project is the brainchild of Zennstrom and Friis, but they aren't running it. Friis, though, spends significant time working on the new entity. EBay says this is fine and within the boundaries of the eBay-Skype merger.

The service is not yet live, and details are under wraps. It's difficult to say why The Venice Project will be much different from YouTube or AOL TV, except that it will — like Kazaa and Skype — be based on P2P technology. That could make The Venice Project cheaper and more flexible than other Internet video services, which centrally host videos on server farms.

Zennstrom describes it this way: "We're trying to do the full TV experience by taking the good things from television and putting them together with the Internet and video sharing." A blog on theveniceproject.com says, "We're fixing TV, removing artificial limits such as the number of channels that your cable or the airwaves can carry, and then bringing it into the Internet age, adding community features, interactivity, etc."

Significantly, The Venice Project will be a secure, rights-protected service that intends to work with content producers such as film studios and sit-com creators, not against them. This is Zennstrom learning from past mistakes.

And it will be ad supported. Zennstrom insists that The Venice Project will work in ways that are familiar to TV viewers — as simple to use as iTunes or an on-screen TV grid.

Interactive features

So The Venice Project is intended to be a pipeline directly between content producers and consumers, with relevant ads inserted on the fly — the way Google plops ads onto websites. Interactive features will let viewers rate content and form social groups around videos and programs.

If it takes off, The Venice Project could be Zennstrom's third disruptor, because it stands to knock cable TV services like Comcast and network TV affiliates out of their middleman positions. Of course, taking on such powerhouse industries is a tall order, and The Venice Project could get squashed before it makes a dent.

A few years from now, maybe Zennstrom will take charge of The Venice Project, or maybe he'll move on to a new target.

"Three to four years seems like a good time frame to make commitments," he says. "That's what I told Meg. I'm here and committed for some time. I want to build the business and contribute to eBay as well."

But after that, time to tee up the next disruptor.

Azureus Secures $12 Million in Series B Venture Financing
Next-Generation Video Distribution Platform Goes Live
Press Release

Palo Alto, CA -- Azureus, the company behind the most popular peer-to-peer (P2P) application for the distribution of large files, today launches a new digital media platform code named Zudeo. The service enables content providers to easily publish, showcase and distribute high resolution, long-form content, including video and games in high definition or DVD quality over the Internet, at no cost. Published content is accessible at www.zudeo.com, as well as within the Zudeo application.

Boasting more than 130 million application downloads and an online community of users spanning 100 countries, award-winning Azureus commands the largest installed base of BitTorrent users in North America and Europe.

The latest version of the application (v3.0), code named Zudeo, offers many innovative features, including content discovery through search, browsing, channels and tagging, as well as easier integration with firewalls and a completely revamped, easy-to-use interface. Additional features, including P2P streaming, will be released in the near future.

“Today, content owners and publishers can use Zudeo to freely promote and distribute their digital creations, without length or quality limitations. Furthermore, content creators and publishers can use our social networking tools to expose their content throughout the Web, including blogs and social networks,” said Gilles BianRosa, CEO, Azureus. “Zudeo enables fans to access a growing catalog of high resolution media content, and to easily share it with their friends or the world. The service is designed to offer a broad spectrum of content, spanning movies, shorts, animation, documentaries, music videos and games.”

For content providers, Zudeo serves as an alternative, low-cost distribution and marketing platform to distribute compelling, high-definition content to a global audience. Both large and small content owners can promote their works to their fan base through comprehensive discovery tools, as well as gauge market interest in specific territories. In addition, the company will unveil a series of content partnerships with leading media companies over the coming weeks and months.

Jarl Mohn, current Chairman of the Board of CNET Networks, former CEO of Liberty Digital and an Azureus Board member, adds, “Media companies are embracing digital media distribution, and Zudeo provides an effective and secure P2P platform to distribute content to their audiences.”

The company also announced a Series B financing of $12 million led by Redpoint Ventures. The round also included: Greycroft Partners, Alan Patricof’s new fund; Jarl Mohn, Chairman, CNET, and former CEO of Liberty Digital and E! Entertainment Television; and existing investor, BV Capital.

GE's Access Distribution Adds FaceTime Communications to Complement Its Emerging Technologies Portfolio
Resellers Gain Access to Internet Security and Web Filtering Solutions for Total Security and Control Over Internet Use

Press Release

Access Distribution, a General Electric company and a leading value-added distributor of complex computing solutions, and FaceTime Communications, a provider of solutions for securing and managing real-time Internet communication applications, today announced a distribution agreement under which Access Distribution will offer FaceTime's Internet Security Edition product suite to more than 600 authorized value- added resellers in North America.

FaceTime Internet Security Edition is purpose-built to enable the safe and productive use of Internet applications including Web, instant messaging (IM), Web conferencing, peer-to-peer file sharing, Skype(TM) and more than 100 greynet applications. Combined with industry-leading SmartFilter(TM) Web filtering, FaceTime Internet Security Edition empowers enterprises to manage employee use of all Internet channels-both greynets and the Web-with a single solution to prevent inbound threats, minimize information leakage and control employee Internet use.

"The type of Internet traffic on enterprise networks today is no longer just email and Web traffic," said Dan Phelan, vice president of North American sales for FaceTime Communications. "Most organizations want to empower their employees with real-time collaborative applications, but they also have a real need to control employee use with powerful policies to ensure security of the organization's network resources as well as its confidential data."

A recent survey, Employee Use of Greynets: 2nd Annual Survey of Trends, Attitudes and Impact, conducted for FaceTime by NewDilligence, identifies the cost and problems caused in the enterprise by greynet applications. The survey indicates that threats borne by greynet applications have a high cost to the enterprise. In fact, eighty one percent of IT managers reported security incidents due to instant messaging or other greynets, costing companies an estimated $130,000 per year on average.

"FaceTime is fulfilling a need in the enterprise for added security measures to address new threats by real-time communication applications," said Scott Zahl, vice president, Emerging Technologies, Access Distribution. "FaceTime's products complement our network security technologies making it easier for resellers to expand their current solutions to fulfill new revenue opportunities."

The addition of FaceTime Communications complements Access Distribution's new Emerging Technologies business, which is focused on identifying and working with companies that have up-and-coming technologies predicted to have a high impact on the market and outpace mature technologies in both growth and profitability.

About FaceTime Communications

FaceTime enables the safe and productive use of greynets like instant messaging, VoIP, Web conferencing and P2P file sharing in addition to Web traffic. FaceTime Security Labs delivers the industry's first IMPact Index, which assesses "point-in-time" risks posed by viruses, worms and other malware propagating through greynet applications. Ranked number one in Enterprise IM Management by IDC in 2006, FaceTime's award-winning solutions are used by more than 800 customers, among them nine of the ten largest U.S. banks. FaceTime supports and has strategic partnerships with all leading public and private IM network providers, including AOL, Google, Microsoft, Yahoo!, IBM, Reuters, Bloomberg, and Jabber. FaceTime is headquartered in Foster City, California. For more information visit http://www.facetime.com/ or call 888-349-FACE.

About Access Distribution

Access Distribution, a General Electric company and part of the Capital Solutions business, is a premier value-added distributor of information technology products, solutions and services. With headquarters in Westminster, Colo., the company's breadth of service and depth of expertise offers its vendor and reseller partners a distinct set of services and processes to leverage as they take complex computer solutions to market. Access Distribution provides innovative solutions to increase its partners' profitability and competitive advantage within mature and emerging technology market segments.

Access Distribution has service, logistics and sales offices throughout the U.S., Canada and Europe. For additional information and press announcements, please visit our web site at http://www.geaccess.com/ or, to contact us by phone, call (800) 733-9333.

BeInSync Wants You to Be In Control
Lauren Simonds

Anyone who uses multiple computers — say a notebook while traveling, the computer at the office and, occasionally, the PC at home — knows that keeping all the files synchronized can feel an awful lot like working in a three-ring circus.

BeInSync, a leading a peer-to-peer (P2P) file-sharing program, lets you create a secure, private network between your various computers so that you always have the latest version of each file and folder on every computer.

We last reviewed BeInSync when it first came out two years ago, but today, the company announced the latest version that, according to Adi Ruppin, the company's director of marketing, makes the program more flexible and gives customers more control over sharing files.

"BeInSync Pro Version 2.5 does not have the cost, storage limitations or privacy concerns that come from storing files on third-party servers. Your storage is limited only by the size of your computer hard drives, and BeInSync provides simple, private access to your data from anywhere without the cost or complexity of other solutions," said Ruppin.

Version 2.5 offers the following new features:

Group Share Roles
Lets you share folders with other people and define the roles and privileges of the participants sharing each folder. Set documents, photos or videos as "read-only" or allow full read and write privileges to individuals.

BeInSync Toolbar for Internet Explorer
Access any of your remote computers or shared folders over the Web; set account configuration.

Unread File Alerts
Receive notifications when a file has been recently updated or not yet accessed.

One-Click BeInSync Installation
Instantly download and install BeInSync from a customer's Web account to any computer.

External Drive/Network Drive Support
Place shared folders on external or network drives.

You can download version BeInSync Pro 2.5 for a 30-day free trial. The program sells for 59.95 per year or $99.95 for two years. The company offers a basic version for free, which limits the number of files you can transfer per day.

Peer-to-Peer Pressure

Illegal downloading is changing the shape of our TV schedules, says Stephen Armstrong

There’s something strange about Heroes. NBC’s autumn hit in America has everything a drama needs to be tagged “the next Lost”: a gorgeous young cast, hyped-up moral issues, dead loved ones who need avenging and a confusing puzzle that must be solved to avert global catastrophe. On its first night, it pulled in 14.3m viewers, the highest rating for an NBC drama debut in five years and a notable performance in a season mired in failure. Its success wasn’t entirely suprising: superheroes always do well when America’s paranoia is at its greatest. Add to that characters such as a Texan cheerleader who can heal from any injury, a heroin-addicted New York artist who can paint the future and a smouldering Indian scientist, all facing off against a serial killer who plans to nuke New York, and you have sure-fire talk-about TV.

What’s strange about Heroes is that it’s not just the most talked-about show in America. It’s huge over here. In the chat rooms on the Internet Movie Database, almost half of the Heroes comments are posted from the UK. Our TV gossip sites are alive with conversation about plot twists in episode nine. Yet Heroes doesn’t reach our screens until next year. The Sci Fi channel launches it in February; BBC2 will screen it in the summer. The series is too new for a US DVD release, so how are all these people watching it? Have British youths developed their own mysterious superpower, the ability to watch American television across the ocean? Well, no. According to the online piracy analyst Envisional, our main superpower is nicking stuff off the internet.

Envisional’s report finds that Brits lead the world in illegal programme downloads — making 18% of all transactions on “peer-to-peer” websites such as SuperTorrents and TV Links, which connect downloaders to one another. It’s a barter-based economy: you go onto the site having recorded a programme on your state-of-the-art laptop or hard-disk recorder, and swap it for other programmes; most are available pretty much in real time. One episode of Six Feet Under was ready to view less than half an hour after transmission. The figures aren’t earth-shatteringly huge, but they are building: Envisional estimates that series four of 24, for instance, was downloaded roughly 95,000 times per episode.

We have been here before. Napster launched in 1999 as a music version of the above, and had at least 27m users two years later, when it was closed down by record-company lawsuits. “What we are concerned about is making the same mistake the music industry has made,” says Rod Henwood, new-business director at Channel 4. “It let the illegal sector grow, and that sector still commands almost 90% of online music consumption.” Henwood says the risks are high: in 2005, music-CD sales slipped by 3% as consumers migrated to the net, with teenagers moving fastest.

It looks as if the same thing is about to happen to the humble television set.

Channel 4’s forecasters estimate that between 10% and 30% of today’s viewers will end up watching most of their TV programmes as downloads on computers or iPods within the next few years. A new generation is on the way, one for which a TV set is just one way to access “product”.

It is already affecting broadcasters’ scheduling plans. In the United States, ABC starts the new segment of Lost on February 7. Although BSkyB refuses to confirm its start date, the industry expects it to air episodes within days of their American screening — in part to head off the peer-to-peer community. BSkyB is paying £975,000 per episode for Lost, and is relying on fans to take up subscriptions to make it pay; free file-sharing isn’t in the business plan.

British broadcasters are trying to get in there first. Channel 4 launched 4oD, a sort of TV iTunes, last week. It hopes that 4oD, with an archive of 500 programmes and two new shows per week to rent or purchase, will pull downloaders into the legal sector. In a trial on cable last month, 1.5m downloads were made in less than four weeks. BSkyB, BT and the BBC are considering similar services.

According to Edward Waller, editor of the TV trade bible C21, this may alter programming for ever. Trials of a 4oD-style service by the US network ABC found that scripted drama performed best, while reality shows were largely shunned. One downside is that, as viewers have to elect to watch the programmes, rather than perhaps stumbling on them, every show will live or die by ratings and off-screen marketing. Unfashionable areas such as news and documentaries are liable to suffer, as is the last great communal experience: chatting about yesterday’s telly with your colleagues.

One of the great triumphs of Saturday-evening television recently has been that shows such as The X Factor and Doctor Who have proved genuine family viewing. In many households, 5-7pm on Saturday is the only point in the week when everyone spends time in the same room. Downloading is likely to cut that last bond. The Heroes may save the planet, but they are helping to make the world a lonelier place.

Internet Piracy the Long Term Threat to the Film Industry
Mike Ellis, Senior Vice President and Asia Pacific Regional Director, Motion Picture Association (MPA)

Today the films of members of the Motion Picture Association of America are shown in theaters in more than 150 countries. Tens of thousand s of their films are also sold or rented in home video format to consumers in nearly every country of the world.

The MPA works internationally – including within 14 countries and territories around the Asia Pacific region – to fight piracy and promote and protect intellectual property rights. This worldwide activity has one principal purpose: to develop and support the film industry worldwide. When we say “the film industry”, we do not mean simply America’s film industry. We mean the film businesses in all nations.

A recent global study examining the impact of motion picture piracy and consumer behavior underscored the importance of intellectual property to economic growth worldwide and revealed the extent of damage caused by copyright theft to creative industries all around the world. The study, undertaken by the independent research firm LEK Consulting on behalf of the MPA which represents major US motion picture companies, showed that Internet piracy cost the film industry globally US$7.1 billion of potential revenue in 2005.

It has been estimated that over 90 percent of traffic worldwide on peer-to-peer (P2P) computer networks illegally infringes the copyrights of movie, music and software businesses. P2P networks also play host to large-scale trafficking in pornography, including child pornography and provide opportunities for identity thieves to obtain personal and financial information from network users who in most cases have no idea that their data is vulnerable.

Internet piracy also includes what is known as auction piracy, the sale of pirated CD’s and DVD’s via Internet auction. In 2005 the MPA’s operations in the Asia Pacific region seized 3,362 optical disc burners, an increase of 220 percent over the preceding year.

The driver of this move to burner labs (from factory replication) has been both economic and a response to increased anti-piracy enforcement. Burner labs can contain dozens of low-cost burners and are often located in apartments and small retail premises, making them difficult to locate. Like replication factories, burner labs are capable of producing tens of millions of pirate DVD-Rs or CD-Rs per year, yet are inexpensive and easy to set up, and if raided, easily and quickly replaceable.

Governments and copyright owners employ a multi-pronged approach to fighting piracy, including educating people about the consequences of piracy, working to ensure movies are available legally using advanced technology and taking enforcement action against Internet thieves and optic disc pirates, rooting out pirate operations around the world.

The foundation of any campaign against unauthorized downloading must be education; people must be made to understand the cost – to businesses, to jobs, to national economies, to the development of national creative industries – of stealing intellectual property.

Education about Internet piracy is critical because many P2P users are unaware that P2P file sharing can open their computers to the Internet and to potentially millions of other Internet users, with very few controls. In many countries, individuals and organizations have seen valuable data uploaded from their computers without their knowledge resulting in significant damage.

All around the world, legislatures are trying to implement and update intellectual property protection laws to keep pace with technological development; Asia is no different and each country is at a different stage in terms of implementing and updating these laws.

The MPA is working every day, all around the Asia Pacific region and the world to help lawmakers better understand and protect copyright, to help law enforcement agencies and officers better identify and prosecute copyright theft and to help consumers understand that IP theft is no different than theft of physical property.

In addition, we maintain active litigation programs in many countries aimed at defending our member companies’ copyrights in the courts against unauthorized and illegal infringement. For the most part, our targets are not only shutting down their operations but also paying our member companies damages.

Because the Internet infrastructure is unevenly developed around the Asia Pacific region, in some countries the treat posed to the entertainment industry by Internet piracy is not seen as either imminent or particularly worrisome. That will change, more than likely at “internet speed”.

The industry must be prepared to address this threat. To develop a strategy and an action plan, cooperation will be required – not only within individual countries, but also with industry organizations and governments regionally and globally, where the threat from Internet piracy may be more advanced and where strategies may be already in place to address the threat.

Would Jesus Get Music From P2P Networks?

Movie studios and record labels have tried a number of different approaches to fighting piracy: lawsuits, law changes, hacking, even setting up their own private police force -- just about everything except, you know, actually trying to compete against it. Movie studios have also tried to guilt people to stop downloading movies, by having ridiculously well-paid actors tell moviegoers that downloading hurts the movie industry's "little people", and now the Christian music industry is getting in on the act by trying to cast downloading and file-sharing as a moral issue. While apparently the RIAA and MPAA feel that the mere existence of piracy morally justifies their extreme actions, the president of a gospel music trade group says his organization "certainly" can address piracy as a moral issue and expects it to better resonate with his audience than the general public. Of course, just because they make religious music doesn't mean they're too different from the secular groups, as the guy says of downloading, "It's like stealing. You wouldn't walk into a Christian bookstore and steal a Bible off the shelf," when, of course, copyright infringment isn't theft at all. Apparently a lot of young Christian music fans see downloading as "helping spread the word" -- which, either in a promotional or religious sense, they're doing, since Christian music sales are growing strongly. So chalk up one more similarity to those Hollywood heathens: these religious music groups badly misunderstand the value of free music as a promotional tool, whether it's promoting other products or their religious message.

New GigaTribe software is now available for free download at www.gigatribe.com.
Press Release

GigaTribe is the new & improved version of what was previously released under the name of "TribalWeb". The name GigaTribe reflects the fact that very large files (hence the term "Giga" as in gigabyte) can easily be transferred between friends, family, or co-workers (hence the term "Tribe").

GigaTribe allows users to easily:

- Share folders on their computer with friends (or anyone else) located anywhere.
- Transfer huge files. Even if one user shuts down their computer, the download can resume with no loss of data the next time both users are online.
- Access folders on their computer from another location.

Previously, the most common way to transfer large files was with complicated FTP solutions, which don't offer any of the other folder-sharing features found in GigaTribe. GigaTribe is 100% safe (128 bit key blowfish encryption), so only people in a user's network can see the folders he or she is sharing. Best of all, it's free. Furthermore, files are downloaded at the maximum speed possible. Finally, GigaTribe is free from any adware, spyware, or pop-ups of any kind.

A premium version is also available for those users who wish to enjoy advanced features. This premium version of GigaTribe, available for a one-time fee of $20, includes:
- unlimited number of simultaneous downloads (free version only allows one download at a time),
- sharing of folders with specific groups of users (ie: access for friends group only, access for family group only, etc...),
- multi-source download (if a file a user wants is available on more than one other person on the network, it can be downloaded faster by downloading from multiple sources),
- upload bandwidth control (users can limit the speed at which others download items),
- password protection of specific folders,
- free updates of any newer versions.

For more information, or to download free GigaTribe software, please go to www.gigatribe.com.

MySpace is Your Space Unless it's Really Someone Else's Space
Jon Healey

In a matter of months, this online phenomenon went from zero users to millions. It was hugely popular with media-loving teens and young adults, whose participation drew in even more people. And for many, it became a daily obsession.

In 1999, the phenomenon was called Napster, a service that allowed users to swap songs through the Internet. Two years later, a pair of competing file-sharing networks -- Morpheus and Kazaa -- enjoyed a similarly fantastic rise. In 2005, a new version arrived -- this time in the form of the social-networking site MySpace (and, in a more modest way, Facebook), which allowed people to post profiles to the Web and communicate with friends through them. This year's model is the video-sharing site YouTube.

As of October, MySpace had almost 50 million users, according to Nielsen/NetRatings, making it the runaway king of social networks. YouTube, meanwhile, had 30 million users, making it the most popular user-generated video site.

The two companies differ in fundamental ways from their file-sharing predecessors, but their popularity flows in part from the same source: a supply of free media contributed by users. On YouTube, it is video clips; on MySpace, it is clips (often provided through links to YouTube) and music. In fact, the two sites each show more videos than any Web site except Yahoo, according to a recent study by comScore Media Metrix, which tracks online activity.

And now, with both sites drawing flak from copyright holders, the question is whether they'll follow their predecessors' rapid path downward, too.

The descent of the file-sharing companies was fueled mainly by their inability to satisfy the demand for free downloads that they had stoked. When the courts ordered the original Napster to prevent users from downloading copyrighted songs, for instance, it lost more than 60 percent of its audience in five months, according to comScore Media Metrix. It never recovered.

MySpace and YouTube are in a different position legally and economically. They're Web sites, not software programs designed to copy digital files (so the companies can argue that they are protected from liability by special rules for Internet providers). And their owners -- News Corp. and Google, respectively -- have very deep pockets and can afford to fight any challenges.

Still, the communities they have created rely to a great extent on users' ability to express themselves through media, and frequently the copyrights to that media are owned by a major music company, TV network or studio. While arguing that they aren't liable for their users' infringements, the companies also have tried to placate copyright owners by striking deals to share revenue with them (e.g., YouTube's deals with Warner Music Group and Universal Music Group) or sell their content (e.g., MySpace's deal with Snocap to help sell songs from unsigned artists).

But the major labels and studios have not been mollified and have continued to press the companies to block copyrighted works from being posted on their sites unless specifically authorized. YouTube is developing technology to do just that.

Depending on how restrictive copyright owners decide to be, MySpace and YouTube could face a Hobson's choice. If they accede to the demands of Hollywood and the record labels and allow only a fraction of their works to be posted, users might be driven away because they can't express themselves the way they want to. And as their audiences thin, so will the glue that binds many users. It's the "network effect" in reverse: As users leave, the sites' breadth diminishes, prompting more people to go elsewhere.

Alternatively, MySpace and YouTube could refuse and continue letting users post whatever songs or clips they please, removing material only if the copyright holder complains. Some copyright specialists argue that MySpace and YouTube are shielded by the 1998 Digital Millennium Copyright Act, which exempts Internet service providers from liability as long as they remove infringing material when asked. But other experts disagree, saying the exemption doesn't apply to MySpace and YouTube. Universal Music Group, among others, doesn't believe it does; it sued MySpace and News Corp. for copyright infringement Nov. 17.

It's ironic to see News Corp., whose 20th Century Fox movie studio helped bring the lawsuits against Kazaa, Morpheus and numerous individual file sharers, on the defensive. At the same time, it's refreshing to see an important copyright-law case litigated by parties with comparable resources on both sides, rather than having the entertainment industry pound away at much smaller figures.

The best result would be for Universal and its entertainment brethren to work out a way with MySpace and YouTube to turn people's enthusiasm for posting songs and clips into a robust revenue stream -- assuming that the sites can gin up enough money to make everybody happy. In another parallel with the original Napster, MySpace and YouTube haven't found a way yet to generate much revenue from advertisers or users. And the longer that remains true, the greater the chance that the companies will meet the same fate.

Bush 'Privacy Board' Just a Gag
Ryan Singel

The first public meeting of a Bush administration "civil liberties protection panel" had a surreal quality to it, as the five-member board refused to answer any questions from the press, and stonewalled privacy advocates and academics on key questions about domestic spying.

The Privacy and Civil Liberties Oversight Board, which met Tuesday, was created by Congress in 2004 on the recommendation of the 9/11 Commission, but is part of the White House, which handpicked all the members. Though mandated by law in late 2004, the board was not sworn in until March 2006, due to inaction on the part of the White House and Congress.

The three-hour meeting, held at Georgetown University, quickly established that the panel would be something less than a fierce watchdog of civil liberties. Instead, members all but said they view their job as helping Americans learn to relax and love warrantless surveillance.

"The question is, how much can the board share with the public about the protections incorporated in both the development and implementation of those policies?" said Alan Raul, a Washington D.C. lawyer who serves as vice chairman. "On the public side, I believe the board can help advance national security and the rights of American by helping explain how the government safeguards U.S. personal information."

Board members were briefed on the government's NSA-run warrantless wiretapping program last week, and said they were impressed by how the program handled information collected from American citizens' private phone calls and e-mail.

But the ACLU's Caroline Fredrickson was quick to ridicule the board's response to the administration's anti-terrorism policies, charging that the panel's private meetings to date largely consisted of phone calls with government insiders and agencies.

"When our government is torturing innocent people and spying on Americans without a warrant, the PCLOB should act -- indeed, should have acted long ago," Fredrickson said. "Clearly you've been fiddling while Rome burns. This board needs to bring a little sunshine. So far America is kept in the dark -- and this is the first public meeting you have had."

Lisa Graves, the deputy director of the Center for National Security Studies, asked the board two simple questions: Did they know how many Americans had been eavesdropped on by the warrantless wiretapping program, and, if so, how many?

Raul acknowledged in a roundabout way that the data existed, but said it was too sensitive to release. Graves then asked if the board had pushed to have that data made public, as the Justice Department is required to do with typical spy wiretaps.

Raul declined to say. "It is important for us to retain confidentiality on what recommendations we have and haven't made," he said.

Graves tried to push the issue of whether the board was going to be public or private, but chairwoman Carol Dinkins politely cut her off and ended the question-and-answer session.

Board member Lanny Davis, who had introduced himself by saying he grew up in a household where the ACLU was considered a "heroic organization," jumped in to explain why the nation's most prominent privacy board won't be transparent about whether it is urging more transparency.

"Congress put us in the office of the president, we didn't," Davis said. "Had Congress wanted us to be an incensement agency, it would have made us independent."

The sparsely attended meeting shaped up as a mostly one-way conversation, with attendees offering suggestions on how the board could transform itself into an effective organization by building on the work of earlier government privacy panels.

Fred Cate, a cybersecurity professor at Indiana University, stressed that anti-terrorism programs that collect and sift through data on Americans -- such as the no-fly list and the recently announced Automated Targeting Center that has been computing terrorism quotients for those flying in and out of the country for more than five years -- need to have a robust way for people to contest the scores and underlying data.

"Redress seems to be the foundation of any system," Cate said. "The only certainty in this entire field is that there will be false positives."

The committee members largely kept their views to themselves, and the press was barred from posing questions during the two short public question periods. Dinkins, the board's chairwoman, who is a partner at the same law firm where Attorney General Alberto Gonzales once worked, offered little beyond pleasantries. Another board member, Francis Taylor, never spoke.

Homeland Security Chief Defends Real ID Plan
Anne Broache

U.S. Department of Homeland Security Secretary Michael Chertoff on Thursday defended forthcoming national ID cards as vital for security and consistent with privacy rights.

Chertoff said one of his agency's top goals next year is to forge ahead with recommendations for the controversial documents established by a federal law called the Real ID Act in May 2005. By 2008, Americans may be required to present such federally approved cards--which must be electronically readable--to travel on an airplane, open a bank account or take advantage of myriad government services such as Social Security.

"I think this is an example (of) when security and privacy go hand in hand," the Homeland Security chief said in a half-hour speech at George Washington University here. "It is a win-win for both."

The importance of such documents was magnified by an announcement Wednesday, Chertoff said. Federal authorities reported that they had made more than 1,200 arrests related to immigration violations and unmasked criminal organizations stealing and trafficking in genuine birth certificates and Social Security cards belonging to U.S. citizens.

"Do you think your privacy is better protected if someone can walk around with phony docs with your name and your Social Security number, or is your privacy better protected if you have the confidence that the identification relied upon is in fact reliable and uniquely tied to a single individual?" Chertoff asked rhetorically.

The upcoming federally approved IDs are intended to be a secure, tamperproof means of protecting Americans' identities while keeping out terrorists and other wrongdoers, Chertoff said.

The Homeland Security chief, who is nearing his two-year mark with the agency, was likely trying to quell rampant skepticism about the IDs voiced by some privacy advocates, immigrants and other groups. Some have said they fear that the IDs are a stepping stone to a veritable police state, complete with ready surveillance of individuals.

Some have argued that the idea of creating more tamperproof IDs is only a marginally better way to screen out those intent on committing terrorist acts because ID cards don't even begin to tackle a core crime prevention challenge: determining a person's unspoken intentions.

State governments have also been critical of the 2008 deadline and what they have said amounts to an unfunded mandate to switch over their systems. A September study released by the National Governors Association, National Conference of State Legislatures and American Association of Motor Vehicle Administrators estimated that the overhaul of their identification systems (PDF) would cost states more than $11 billion over five years. The New Hampshire state legislature even considered passing a law earlier this year that would prohibit the state from complying with the federal Real ID law.

Homeland Security has yet to issue congressionally mandated recommendations for the cards, so it's unclear how, exactly, they would work. The cards must contain, at a minimum, a person's name, birth date, gender, ID number, digital portrait, address, "physical security features" to prevent tampering or counterfeiting and a "common machine-readable technology" specified by Homeland Security.

A recent draft report by a DHS advisory committee (PDF) advised against using radio frequency identification technology, or RFID, in tracking humans because of privacy concerns.

The purpose of Chertoff's Thursday morning speech was to reflect on the agency's work during the past year and to outline goals for 2007. For the past year, he focused on three major areas: immigration and border security, Hurricane Katrina recovery and a foiled terrorism plot originating from London in August.

Conspicuously absent was any mention of the department's cybersecurity plans. After more than a year of delay, Chertoff hired Gregory Garcia, who had been working as a vice president at the Information Technology Association of America lobby group, as the department's first assistant secretary for cybersecurity. That step came after the department had sustained repeated bashing of its efforts in that realm from members of Congress.

U.S. Is Dropping Effort to Track if Visitors Leave
Rachel L. Swarns and Eric Lipton

In a major blow to the Bush administration’s efforts to secure borders, domestic security officials have for now given up on plans to develop a facial or fingerprint recognition system to determine whether a vast majority of foreign visitors leave the country, officials say.

Domestic security officials had described the system, known as U.S. Visit, as critical to security and important in efforts to curb illegal immigration. Similarly, one-third of the overall total of illegal immigrants are believed to have overstayed their visas, a Congressional report says.

Tracking visitors took on particular urgency after the Sept. 11 terrorist attacks, when it became clear that some of the hijackers had remained in the country after their visas had expired.

But in recent days, officials at the Homeland Security Department have conceded that they lack the financing and technology to meet their deadline to have exit-monitoring systems at the 50 busiest land border crossings by next December. A vast majority of foreign visitors enter and exit by land from Mexico and Canada, and the policy shift means that officials will remain unable to track the departures.

A report released on Thursday by the Government Accountability Office, the nonpartisan investigative arm of Congress, restated those findings, reporting that the administration believes that it will take 5 to 10 years to develop technology that might allow for a cost-effective departure system.

Domestic security officials, who have allocated $1.7 billion since the 2003 fiscal year to track arrivals and departures, argue that creating the program with the existing technology would be prohibitively expensive.

They say it would require additional employees, new buildings and roads at border crossings, and would probably hamper the vital flow of commerce across those borders.

Congress ordered the creation of such a system in 1996.

In an interview last week, the assistant secretary for homeland security policy, Stewart A. Baker, estimated that an exit system at the land borders would cost “tens of billions of dollars” and said the department had concluded that such a program was not feasible, at least for the time being.

“It is a pretty daunting set of costs, both for the U.S. government and the economy,” Mr. Stewart said. “Congress has said, ‘We want you to do it.’ We are not going to ignore what Congress has said. But the costs here are daunting.

“There are a lot of good ideas and things that would make the country safer. But when you have to sit down and compare all the good ideas people have developed against each other, with a limited budget, you have to make choices that are much harder.”

The news sent alarms to Congress, where some Republicans and Democrats warned that suspending the monitoring plan would leave the United States vulnerable.

Representative Dana Rohrabacher, a California Republican who is a departing subcommittee chairman on the House International Relations Committee, said the administration could not say it was protecting domestic security without creating a viable exit monitoring system.

“There will not be border security in this country until we have a knowledge of both entry and exit,” Mr. Rohrabacher said. “We have to make a choice. Do we want to act and control our borders or do we want to have tens of millions of illegals continuing to pour into our country?”

Representative Bennie Thompson, the Mississippi Democrat who is set to lead the Homeland Security Committee, also expressed concern.

“It is imperative that Congress work in partnership with the department to develop a comprehensive border security system that ensures we know who is entering and exiting this country and one that cannot be defeated by imposters, criminals and terrorists,” Mr. Thompson said in a statement Thursday.

In January 2004, domestic security officials began fingerprint scanning for arriving visitors. The program has screened more than 64 million travelers and prevented more than 1,300 criminals and immigration violators from entering, officials said.

Homeland Security Secretary Michael Chertoff and other officials often call the program a singular achievement in making the country safer. U.S. Visit fingerprints and photographs 2 percent of the people entering the country, because Americans and most Canadians and Mexicans are exempt.

Efforts to determine whether visitors actually leave have faltered. Departure monitoring would help officials hunt for foreigners who have not left, if necessary. Domestic security officials say, however, it would be too expensive to conduct fingerprint or facial recognition scans for land departures. Officials have experimented with less costly technologies, including a system that would monitor by radio data embedded in a travel form carried by foreigners as they depart by foot or in vehicles.

Tests of that technology, Radio Frequency Identification, found a high failure rate. At one border point, the system correctly identified 14 percent of the 166 vehicles carrying the embedded documents, the General Accountability Office reported.

The Congressional investigators noted the “numerous performance and reliability problems” with the technology and said it remained unclear how domestic security officials would be able to meet their legal obligation to create an exit program.

Some immigration analysts said stepping away from the program raised questions again about the commitment to enforce border security and immigration laws.

A senior policy analyst at the Center for Immigration Studies, Jessica Vaughn, said the government had long been too deferential to big businesses and travel groups that raised concerns that exit technology might disrupt travel and trade.

“I worry that the issue of cost is an excuse for not doing anything,” said Ms. Vaughn, whose group advocates curbing immigration. Domestic security officials said they still hoped to find a way to create an exit system at land borders. “We would to do more testing,” a spokesman for the department, Jarrod Agen, said. “We are evaluating the initial tests to determine how to move forward.”
http://www.nytimes.com/2006/12/15/wa... tner=homepage

U.S. Subpoena Is Seen as Bid to Stop Leaks
Adam Liptak

Federal prosecutors are trying to force the American Civil Liberties Union to turn over copies of a classified document it received from a source, using what legal experts called a new extension of the Bush administration’s efforts to protect national-security secrets.

The novelty in the government’s approach is in its broad use of a grand jury subpoena, which is typically a way to gather evidence, rather than to confiscate all traces of it. But the subpoena issued to the A.C.L.U. seeks “any and all copies” of a document e-mailed to it unsolicited in October, indicating that the government also wants to prevent further dissemination of the information in the document.

The subpoena was revealed in court papers unsealed in federal court in Manhattan yesterday. The subject of the grand jury’s investigation is not known, but the A.C.L.U. said that it had been told it was not a target of the investigation.

The subpoena, however, raised the possibility that the government had found a new tool to stop the dissemination of secrets, one that could avoid the all but absolute constitutional prohibition on prior restraints on publication.

The disputed document, according to the A.C.L.U., is three-and-a-half pages long and unremarkable, and its disclosure would be only mildly embarrassing to the government. It added that the document “has nothing to do with national defense.”

“The government may be wanting to have its cake and eat it, too,” said Rodney A. Smolla, the dean of the University of Richmond’s law school. “It may want to present this to the court as not carrying heavy First Amendment implications. But to the extent the government wants to prevent the A.C.L.U. from disclosing the content of the document by virtue of this subpoena, it is a prior restraint.”

John C. Eastman, a law professor at Chapman University, disagreed, saying that the subpoena was unusual but not improper and a sign of a moderate approach to a significant problem.

“Assuming it’s properly classified,” Professor Eastman said of the document, “I actually think the government is bending over backwards to accommodate the A.C.L.U. rather than pulling the trigger in prosecuting them.”

“I’m not troubled by the fact that when we’re dealing with classified documents there may be action taken to retrieve them,” he added.

The A.C.L.U. said the subpoena was an effort to chill speech about the Bush administration. “The government is involved in a very conscious effort to suppress its critics,” said Anthony D. Romero, the A.C.L.U.’s executive director.

Lauren McDonough, a spokeswoman for Michael J. Garcia, the United States attorney in Manhattan, declined to comment beyond acknowledging the A.C.L.U.’s filing.

In the past, the government has fired and prosecuted government officials who provided classified information to people not authorized to have it. It has also tried to force reporters and others to identify the government officials who leaked to them.

But the Supreme Court has drawn the line at efforts to restrain or punish the dissemination of truthful information about matters of public concern.

The Bush administration has been particularly vigilant in trying to keep its secrets. It has threatened, for instance, to prosecute reporters for publishing classified information.

The A.C.L.U.’s lawyers said in court papers filed Monday that such subpoenas, if upheld by the court, would pose a direct threat to journalists.

“Many of the most important news articles of the past year (such as those concerning N.S.A. eavesdropping, rendition of foreign prisoners of our nation to other nations, Defense Secretary Rumsfeld’s views on the deteriorating situation in Iraq, National Security Advisor Hadley’s assessment of Iraqi Prime Minister Maliki, and the report on the Iraq insurgency’s funding sources) have been based on classified documents leaked to reporters,” the group’s motion said.

Those articles, the motion continued, “could not be prepared and published as they have been were the government allowed to use subpoenas to confiscate ‘any and all’ copies of classified documents it learns are in the hands journalists and other public advocates and critics.”

Experts in First Amendment law said that political advocacy groups like the A.C.L.U. are entitled to the same constitutional free speech-protections that journalists receive.

“In this case,” said Floyd Abrams, a First Amendment lawyer, “the A.C.L.U.’s function is presslike” in that it collects, analyzes and disseminates information about the government.

In its motion to quash the subpoena, the A.C.L.U. said, “The document is nothing more than a policy, promulgated in December 2005.”

It added, “The document contains no information concerning matters such as troop movements, communications methods, intelligence sources or the like.”

The group’s lawyers have agreed for now not to disclose the contents of the document, but hyperlinks to the papers posted yesterday on its Web site include the word “torture.”

The identity of the source is known to both the A.C.L.U. and the government, the organization’s lawyers said. The A.C.L.U. declined to name the source.

In November, Jennifer G. Rodgers, a federal prosecutor, called the A.C.L.U. and demanded the return of the document and all copies, according to court documents. She knew the date on which it had been e-mailed to the group, court papers say.

A subpoena followed. The A.C.L.U. moved to quash it, and Judge Jed S. Rakoff of the Federal District Court in Manhattan yesterday ordered the unsealing of the organization’s filings and the subpoena itself. The judge will rule on the motion to quash shortly.

The Espionage Act makes it a crime for people who have unauthorized possession of some kinds of national security information to receive, retain, disseminate or refuse to turn it over to the government when asked. But A.C.L.U. lawyers say the document does not meet the statute’s definition and that, in any event, a subpoena is an improper way to enforce the law.

In its filing, the A.C.L.U. also argues that the government is misusing the grand jury that issued the subpoena.

“Despite extensive research,” the motion to quash says, “we have been unable to find a single reported decision even mentioning, much less enforcing, a subpoena purporting to preclude the subpoenaed party from retaining a copy of subpoenaed documents. There is no possible argument that there is an investigative purpose to such a subpoena.”
http://www.nytimes.com/2006/12/14/wa... tner=homepage

A Gag on Free Speech

The Bush administration is trampling on the First Amendment and well-established criminal law by trying to use a subpoena to force the American Civil Liberties Union to hand over a classified document in its possession. The dispute is shrouded in secrecy, and very little has been made public about the document, but we do not need to know what’s in it to know what’s at stake: if the government prevails, it will have engaged in prior restraint — almost always a serious infringement on free speech — and it could start using subpoenas to block reporting on matters of vital public concern.

Justice Department lawyers have issued a grand jury subpoena to the A.C.L.U. demanding that it hand over “any and all copies” of the three-and-a-half-page government document, which was recently leaked to the group. The A.C.L.U. is asking a Federal District Court judge in Manhattan to quash the subpoena.

There are at least two serious problems with the government’s action. It goes far beyond what the law recognizes as the legitimate purpose of a subpoena. Subpoenas are supposed to assist an investigation, but the government does not need access to the A.C.L.U.’s document for an investigation since it already has its own copy. It is instead trying to confiscate every available copy of the document to keep its contents secret. The A.C.L.U. says it knows of no other case in which a grand jury subpoena has been used this way.

The subpoena is also a prior restraint because the government is trying to stop the A.C.L.U. in advance from speaking about the document’s contents. The Supreme Court has held that prior restraints are almost always unconstitutional. The danger is too great that the government will overreach and use them to ban protected speech or interfere with free expression by forcing the media, and other speakers, to wait for their words to be cleared in advance. The correct way to deal with speech is to evaluate its legality after it has occurred.

The Supreme Court affirmed these vital principles in the Pentagon Papers case, when it rejected the Nixon administration’s attempts to stop The Times and The Washington Post from publishing government documents that reflected badly on its prosecution of the Vietnam War. If the Nixon administration had been able to use the technique that the Bush administration is trying now, it could have blocked publication simply by ordering the newspapers to hand over every copy they had of the papers.

If the A.C.L.U.’s description of its secret document is correct, there is no legitimate national defense issue. The document does not contain anything like intelligence sources or troop movements, the group says. It is merely a general statement of policy whose release “might perhaps be mildly embarrassing to the government.” Given this administration’s abysmal record on these issues, this case could set a disturbing and dangerous precedent. If the subpoena is enforced, the administration will have gained a powerful new tool for rolling back free-speech rights — one that could be used to deprive Americans of information they need to make informed judgments about their elected leaders’ policies and actions.

Why Cell Phone Outage Reports Are Secret
Bob Sullivan

Consumers have no idea how reliable their cell phone service will be when they buy a phone and sign a long-term contract. The Federal Communications Commission could offer some guidance, but it won't. The agency refuses to make public a detailed database of cell phone provider outages that it has maintained since 2004.

A federal Freedom of Information Act request for the data, filed in August by MSNBC.com, has been rejected by the agency. The stated reasons: Release of the information could help terrorists plan attacks against the United States, and it would harm the companies involved.

Complaints about cell phone service are near the top of every list of consumer gripes. The Illinois attorney general’s office, for example, last year ranked cell phone complaints as the fourth-most-common complaint, trailing only gas prices, credit card firms and home improvement scams.

To find out if a cell phone carrier service will be reliable, consumers are forced to buy a phone, then use it at home and on their normal commuting routes. Callers generally get 30 days at most to return a phone if the service doesn’t work well enough.

But that test won’t reveal anything about carriers’ periodic outages.

The Federal Communications Commission does know something about outages, however. It has collected outage reports from telecommunications firms since the early 1990s. Any time a carrier has an outage that affects 900,000 caller minutes – say a 30-minute outage impacting 30,000 customers – it must report it to the Network Outage Reporting System.

In the beginning, the reports all were from “wire line” telephone providers and were available to the public. But in 2004, the commission ordered wireless firms to supply outage reports as well. But at the same time, it removed all outage reports from public view and exempted them from the Freedom of Information Act.

The FCC took the action at the urging of the Department of Homeland Security, which argued that publication of the reports would “jeopardize our security efforts.”

“The same outage data that can be so useful … to identify and remedy critical vulnerabilities and make the network infrastructure stronger can, in hostile hands, be used to exploit those vulnerabilities to undermine or attack networks,” DHS said.

'Corporate competition protection'

What use would wireless outage reports have to would-be terrorists? Not much, said NBC terrorism analyst Roger Cressey, the former chief of staff of the President’s Critical Infrastructure Protection Board.

“There is nothing mysterious behind it, it is corporate competition protection,” said Cressey, now a partner in Good Harbor Consulting. “The only reason for the government to not let these records get out is then one telco provider could run a full-page ad saying ‘the government says we’re more reliable.’”

Cressey added that he couldn’t imagine a scenario where the reports would be valuable to terrorists.

In October, MSNBC.com filed an administrative appeal of the FCC’s rejection of its FOIA request. The FCC has not yet responded to the appeal.

In its initial answer to MSNBC.com’s FOIA request, FCC officials cited only one reason for the denial: “competitive harm” to companies involved.

“NORS records are not available to the public,” the rejection letter said. “Given the competitive nature of many segments of the communications industry and the importance that outage information may have on the selection of a service provider or manufacturer, we conclude that there is a presumptive likelihood of substantial competitive harm from disclosure of information in outage reports.”

That’s likely true. A report that revealed which mobile phone company suffered the most outages in a given area would likely impact consumers’ choice of provider. Such information would be in the public interest, MSNBC.com believes.

“We believe that this is basic consumer information and we will continue to fight for your right to know it,” said MSNBC.com editor-in-chief Jennifer Sizemore.

Explanation doesn't measure up, expert says

The explanation also does not meet the bar set by the Freedom of Information Act for an agency to decline a request, according to an analysis by The Reporters Committee for Freedom of the Press.

The competitive harm exemption “requires fairly detailed explanations by the company involved as to how the release of information will put it at a substantial competitive disadvantage,” said analyst Nathan Winegar.

In a subsequent response to a reporter’s query, an FCC spokesman pointed toward the second reason for the public record request denial: The 2004 administrative order declaring the outage records off limits to the public. That order cited both competitive harm and national security.

Al Tompkins, a Freedom of Information Act expert at the Poynter Institute, a journalism think-tank, said release of the cell phone outage reports would be “a tremendous consumer tool,” and compared them to the Federal Aviation Administration’s publication of airline on-time records.

“It seems to me that while one could understand it might put one company at a competitive disadvantage, it would put another at a competitive advantage,” he said. “The airwaves are owned by the public. … The public has a need to know what’s reliable and what’s not.”

Not every mobile phone firm thought the database needed to be hidden from public view when the FCC decided to make it secret in 2004. Sprint argued that the commission could “scrub” the reports of sensitive material before they were made public and thus serve the “seemingly divergent needs for public access and protection of confidential information.”

The FCC chose the blunt instrument.

Another 'national security issue'

Tompkins said the blanket removal of the entire outage report system from public view was symptomatic of a larger trend in the Bush administration.

“Every time we turn around something else is a national security issue,” he said.

Furthermore, if some larger pattern of cell phone outages could be gleaned from the reports, he said, companies might “fix it, not bury it.”

“I can’t think of one problem that has gone away because it’s kept a secret,” he said.

The Freedom of Information Act, signed into law in 1966, provides specific procedures for U.S. citizens to gain access to government documents, through a procedure known as a FOIA request. The law was amended in the mid-1970s in reaction to the Watergate scandal, with time and fee limits imposed on government agencies to comply with requests. The law was amended again in 1986, but journalists continued to complain that federal agencies were still stonewalling. In response to those complaints, in October 1993 then-President Bill Clinton issued an administrative memo calling for federal agencies to “renew their commitment” to the spirit of the Freedom of information Act.

The law was originally intended to make government paper records available to the public, but gradually has been extended to apply to electronic records as well.

Anyone can file a FOIA request, but the procedure is most frequently used by journalists, lawyers and jail inmates seeking more information about their cases. Many agencies, including the FCC, now allow FOIA requests to be filed right from their Web sites.

True Patriots Must Have Clogged Noses
Jeffrey A. Tucker

It begins with a runny nose, always in early December when the weather gets colder and nature emits strange particles. I'm speaking of the eternal menace of the winter cold, which, experience suggests, can be prevented from turning to flu or other yucky infections by keeping symptoms at bay.

Thus should the company that invented pseudoephedrine – a drug made from "yeast fermentation of dextrose in the presence of benzaldehyde," says Wikipedia – be heralded by one and all. I'm happy for those who need far-flung laser surgeries that such technologies exist, but, speaking from the point of view of self-interest, the company that can make a tiny pill to unclog my nose earns my deepest gratitude.

And how we have all taken it for granted. We stock up on those little red pills – red like Christmas – all season long, so that days are bright and nights are restful. Oh there's also the liquid form, which has a flavor you come to love as much as the finest liqueur made by French monks. Why aren't the pills sold in packages of 100, 1,000, or 5,000? Well, in any case they should be. They are our seasonal friend, as much a part of the calendar as Thanksgiving.

And yet this year, matters are different.

I can vaguely recall last year that there was more hassle than ever getting these wonders of modern medicine, which, incidentally are made for us by our capitalistic friends in India and China. This year, manufacturers are touting a replacement drug called phenylephrine. Hey, I'm glad to give anything a try but this replacement was not brought about by market forces. The government last year cracked down on pseudoephedrine, and the manufacturers were compelled to come up with something else. So of course I'm suspicious.

"Hey, is this new stuff as good as the old pseudoephedrine?" I asked the pharmacist.

He wrinkled his nose and shook his head. "No, I don't think so."

"Ah ok, well, how can I get the real stuff?" I asked. He then requested my drivers' license and reached behind him and handed me one package.

"Umm, can I please have ten?" I asked, explaining that this process is a pain and so I might as well stock up.

"I'm sorry, I can only sell you one."

"You mean I have to buy it, go outside and come back in, buy another, and so on until I reach ten?"

"No, you can't do that," he replied. "You can only buy one package per month."

What about the liquid form? Doesn't exist, he says. What about the liquid pills? Nope. Gone for good. My winter cocktail, abolished.

Now, I've always thought about this drug the way we think of milk or oranges or socks. If any of these items started to be limited in supply by government decree, what's the reaction? A slight bit of panic. I immediately began thinking of workarounds. So this means that I have to remember to buy from April to October when I don't usually need the stuff so I can be sure to have it.

But won't one package a month be enough? Maybe. Probably. But what if I share it with co-workers, as I often do? What if I leave it in a coat pocket that is dry cleaned or a pants pocket that is washed? Or what if I want to keep one package at home and one at work? What about large families with kids in their early teens? What will they do?

It's not so much that I will certainly need more. It's just that one would like to opportunity to buy more if one so desires. There's nothing like a step toward prohibition to cause a run on a product!

Maybe now is the time to try one of those online drug places of uncertain locale? Well, a quick check shows that most require the same ID as the drug store. What do I have to do? Find a dealer on the street?

In any case, what is the big deal here? Is this all to make sure that Americans must live with stuffy noses a few days a month? Is that what we pay these birds in Washington to do for us?

A close investigation turns out to reveal what most people probably already know: you can use this drug to make another drug called methamphetamine, which is a stimulant that causes euphoria of some sort. I read online that it was invented in the 19th century, and has been mainly used for recreational purposes and also as a stimulant for soldiers in wartime (when drug-induced euphoria is certainly valuable).

So apparently some stupid kids were cooking pseudoephedrine and turning into methamphetamine. The government doesn't want people to experience euphoria on a regular basis and decided to do something to stop it. But does meth cause death? This "deadliest drug" has apparently killed a few hundred people in the last six years, so far as anyone can tell. Also, so far as anyone can tell, the use of the drug peaked decades ago, according to Jack Shafer. In 1975, 16.2 percent of teens said that they had taken amphetamines, where as only 3.4 percent said that in 2004.

What about the process of making meth from nose medicine? This site gives the recipe as follows:

750 pills containing pseudoephedrine, five lithium batteries, two cans of lantern fuel, a bottle of drain cleaner, a bottle of un-iodized salt, a 10-pound block of dry ice, and various lab supplies: mason jars, coolers, coffee filters, a hose. Depending on the proclivities of the cook, there are substitutes for many of these ingredients. Instead of coffee filters, for instance, some cooks prefer linens. One recipe recommends Martha Stewart brand bedding because of its tight weave and low cost.

What strikes me here is not the crazy fuss that is involved here but the need for 750 pills. That's far more than I apparently have the right to purchase.

As for how much of a national epidemic this is, I have no firm data. Every published discussion of this that I could find only refers to the existence of a problem – how much of a problem is hard to say. In any case, from my point of view, if someone wants to go to all the above effort to fry his brain with meth, that's his own business. A general principle of a free society is that people are free to do stupid things to themselves, and so the government doesn't and shouldn't treat people like children.

Where did the legislation that makes it so difficult for me to unclog my nose come from in the first place? The intrigue continues. It was passed on March 6, 2006 – as an amendment to the Patriot Act! It was this that required the drug store to collect information from my driver's license so that the government can have a complete database of all Americans with clogged noses. It was this act that said that I may not buy more than a certain amount per month. State governments followed up with their own laws.

Patriots had better not dispute it. All Patriots must learn to live with clogged noses. And please report all people who seem to be breathing effortlessly to the authorities.

Finally, there should be a limit on the numbers of Martha Stewart bed sheets that people can buy (see the above recipe for meth). Maybe one set per year. Those who want more are probably up to no good.

Book Review

An Insider’s Account of the War on Terror.

By John Yoo.

292 pp. Atlantic Monthly Press. $24.


Preserving Civil Liberties in an Age of Terrorism.

By Bruce Ackerman.

227 pp. Yale University Press. $26.

The Enemy Within
Fareed Zakaria

Everyone accepts that “the rule of law” is the foundation of liberties in the Western world. But when did this hallowed tradition begin? Obviously there’s no exact moment, but one could reasonably point to the day in 1215 when, in a small borough outside London called Runnymede, King John was forced by his barons to sign Magna Carta. That document protected the rights of feudal lords, but in doing so it outlined — for the first time in history — legal procedures that even the king had to follow. These limitations are set out in Article 39 of the document, which states that “No free man shall be seized or imprisoned, or stripped of his rights or possessions, or outlawed or exiled, or deprived of his standing in any other way, nor will we proceed with force against him, or send others to do so, except by the lawful judgment of his equals or by the law of the land.”

This writ — or written order — has developed over the years as the principal check on arbitrary state power, the original human right, allowing a person who has been arrested to challenge the legality of that detention. It is called the “great writ,” habeas corpus, or “produce the body so that it may be examined.” Habeas corpus was codified by the British Parliament in 1640 and 1679 and is one of a handful of common laws explicitly referred to and protected in the American Constitution. Alexander Hamilton, the most zealous exponent of executive power among the founding fathers, noted that habeas corpus provided “perhaps greater securities to liberty and republicanism” than any clause of the Constitution.

But as of Oct. 17 of this year, this great writ has been substantially weakened in the United States by the assent of both the presidency and Congress. The Military Commissions Act of 2006 eliminates habeas corpus for anyone defined as an “unlawful enemy combatant,” as well as all aliens, including permanent residents — green-card holders — of the United States. There remains a form of judicial review for “unlawful enemy combatants,” but it is one that the administration seems allowed to bypass (though the exact legal status of unlawful combatants remains unclear). In effect, federal courts appear to have been stripped of their historic role in assessing the legality of detentions if the executive branch claims that these arrests are part of the war on terror.

How did we come to this point? Do the dangers of terrorists and terrorism require so broad a shift in the balance of powers and such an outright challenge to the liberty of the Republic? What is the justification behind these moves? John Yoo has tried to answer these questions in “War by Other Means: An Insider’s Account of the War on Terror.” He is well placed to do so. He was a deputy assistant attorney general in the Justice Department from 2001 to 2003 and became one of the principal authors of the Bush administration’s policies regarding arrests, detentions, interrogations and the treatment of prisoners. Since 2003, as a professor at the University of California, Berkeley, Law School, Yoo has vigorously defended the Bush administration’s legal actions and approaches.

At the heart of Yoo’s argument is the notion that we are at war. “If, during the cold war,” he writes, “the Soviet Union had sent K.G.B. agents to drive airplanes through American skyscrapers, the United States would have retaliated, our nation would have gone on a war footing. ... Why should status as an international terrorist organization rather than a nation-state make a difference as to whether we are at war?”

Everything in Yoo’s analysis follows from this fundamental premise. Detaining operatives of Al Qaeda presents no constitutional problem because they are, in effect, prisoners of war. “Hundreds of thousands of enemy prisoners of war were captured in Vietnam, Korea and World Wars I or II, and their imprisonment was never reviewed by an American court.” Think of all the objections people have made to the Bush administration’s policies and ask yourself, “If we were in the middle of World War II and these were German soldiers, would it be permissible?” Yoo acknowledges, for example, that the administration chose Guantánamo as the prison camp for suspected Qaeda warriors precisely because it did not want federal courts to have any jurisdiction over the place. For Yoo, since we are at war, we need an aggressive interpretation of executive power — inherent in the president’s role as commander in chief — and one that bypasses Congress, the courts and peacetime protections like checks and balances.

But are we really at war? And if so, who are we at war against? Is it just Al Qaeda or more than that one organization? Is it, as the president has often said, a war on terror itself? Many experts have pointed out that you cannot declare war on a tactic (terrorism). As the international policy analyst Grenville Byford noted in Foreign Affairs, wars are more fruitfully declared against proper nouns (Germany, Japan) than common nouns (terror, poverty). If this is a war, moreover, when will it end? How will we know it has ended and whether we have won or lost? These questions do not have easy answers, as Yoo’s own analysis demonstrates. While arguing throughout the book that we are at war, he also insists that we should not apply the most well established rules of war, the Geneva Conventions, to Qaeda prisoners because, well, we are not at war. The conventions are meant to apply to uniformed soldiers captured in war, and that does not describe prisoners in the current conflict.

The practical problems in applying the war model reveal the complexity of our circumstances. During World War II, there was rarely any doubt whether captured German soldiers were in fact fighting for the enemy. But with many of those captured as part of the war on terror, it remains extremely unclear whether they are, in fact, enemies of the United States. Is it necessary to torture some of them in ways that peacetime laws might prohibit? Yoo tends to answer these questions with assertions like “Both Porter Goss, the past director of the C.I.A., and Vice President Cheney, who know far more than they can reveal publicly, have said that such operations are vital to protect the United States from attack.” Well, that settles it then.

Against this “trust us” doctrine we have Ron Suskind’s richly reported details in his recent book, “The One Percent Doctrine,” which reveal how many people have been wrongly arrested, how often torture produced bad information and how few real benefits have been derived from these aggressive interpretations of law and foreign policy. Yoo explains that torturing Abu Zubaydah — Al Qaeda’s No. 3 leader — was vital to uncovering new plots against America. The president described Zubaydah’s harsh interrogation as crucial to the war on terror. But Suskind actually talked to those who did the roughhousing, and they told him that Zubaydah was in fact unimportant, a man in charge of minor logistics for Al Qaeda like travel for wives and children. What’s more, he was mentally unstable. “The guy is insane, certifiable, split personality,” the F.B.I.’s top Qaeda analyst told Suskind. He provided no information of value whatsoever.

Another complication is that traditionally P.O.W.’s have been held without trial because they were usually released when hostilities ended. But does this model apply in a war of indefinite duration? As the administration has found, as a practical matter, it cannot detain hundreds of people in a legal black hole with no end in sight. Yoo argues that “indefinite” does not mean “forever” and that if prisoners can be returned to their home countries without fear that they will start up terrorist activities again, then they should be released. But, as with much of Yoo’s analysis, everything is left to the discretion of the commander in chief. We are at war, after all.

But it is abundantly clear that the “war on terror” is not a war in the traditional sense and that we do not have an enemy in the traditional sense. In “Before the Next Attack,” Bruce Ackerman, a Yale law professor, points out that the problem of terrorism is not one of a single overarching state that has attacked us and threatens our existence. In fact a key feature of the modern world is that the state has lost control over violence. “The root of our problem is not Islam or any ideology, but a fundamental change in the relationship between the state, the market and technologies of destruction,” Ackerman writes. “If the Middle East were magically transformed into a vast oasis of peace and democracy, fringe groups from other places would rise to fill the gap.” Ackerman’s argument could be put differently. We are facing a situation that is actually more revolutionary than the one portrayed by the Bush administration. It’s not that we’re at war. It’s that the nature of peace has been fundamentally altered. From now on, we will have to worry about small groups, without countries or uniforms, who can cause us serious harm.

Ackerman accepts that the law-enforcement model is not appropriate for the challenge of terrorism, since our aim is not to investigate the next terror attack but to prevent it, in fact to pre-empt it. But that is still a different problem from the threat of a full-scale invasion by a great power. Most important, what we now face is likely to be a permanent condition, and this means we need new rules. Ackerman proposes an emergency constitution that would take effect after a major terrorist attack and would include some of the restrictions of the Bush administration’s approach. But it would also expire periodically and could be renewed only by ever-increasing Congressional majorities. Additionally, courts would be able to review any revisions. Ackerman’s solution may or may not be practical, but at least he confronts the problem intelligently, and he is surely correct to say that it’s not a good idea to respond to particular crises with ad hoc changes to our laws. If we don’t think through the basic structure of rules, rights and protections we want, every new attack will produce creeping but permanent limits on freedom.

There is one aspect of our new condition that neither Yoo nor Ackerman addresses in much depth — the broader political context. The United States is fighting a strange war indeed, one that is, in some fundamental ways, an extended campaign of public diplomacy against ideologies of extremism and violence. This campaign is not simply a matter of battling on the air waves with Al Jazeera across the Arab world. It is a matter of reaching into communities. The best sources of intelligence on jihadi cells have tended to come from within localities and neighborhoods. This information has probably been more useful than any we have obtained from waterboarding or sleep deprivation.

Yoo frequently cites a famous case of Nazi agents — Germans and German-Americans — who landed secretly on Long Island in 1942, planning to destroy key elements of America’s industrial strength: power plants, factories and bridges. They were arrested by the F.B.I. and tried by a military tribunal. The case reached the Supreme Court, which upheld the Roosevelt administration’s actions. Many of the justices did so uneasily, but they felt they could not really overturn the administration’s decision in the midst of World War II. The more notable aspect of this story, however, is that these men were arrested not because of any emergency powers of the executive branch. One of them, who had lived for some years in the United States, turned out to have stronger feelings of affection for America than for Germany. Soon after the agents landed, he contacted the F.B.I., which dismissed his tale at first, but he persisted and, finally, the men were arrested.

In its campaign against terror groups, the United States must summon all the strength and skills it can muster. But perhaps our most potent weapons are the sense people around the world have had that the United States is an exemplar of rights and liberties and that it lives by those principles even under storm and stress. When we suspend the writ of habeas corpus, we cast aside these distinctive weapons and trade them for the traditional tools of dictatorships — arbitrary arrests, indefinite imprisonments and aggressive interrogations. Will this trade really help us prevail?

Malaysia to Embed Car License Plates With Microchips to Combat Theft

Malaysia's government, hoping to thwart car thieves, will embed license plates with microchips containing information about the vehicle and its owner, a news report said Saturday.

With the chips in use, officials can scan cars at roadblocks and identify stolen vehicles, the New Straits Times reported.

The "e-plate" chip system is the latest strategy to prevent car thieves from getting away with their crimes by merely changing the plates, the report said.

It said nearly 30 cars — mostly luxury vehicles — are stolen every day in Malaysia.

The Times quoted Road Transport Department Director-General Ahmad Mustapha as saying the system will be implemented next year in stages. New cars will be first, followed by those already on the road.

"The first thing thieves do after a car theft is change the registration plates," Ahmad was quoted as saying.

The microchips, using radio frequency identification technology, will be fixed into the number plates and can transmit data at a range of up to 100 meters (yards), the report said.

They will have a battery life of 10 years, it said.

Ahmad could not be immediately reached Saturday for comment on the report.

El you dee, dee eye tee eee

School Shuns Tech, Teaches Fountain Pen
Ben McConville

In this age of cell phones, text messages and computer keyboards, one Scottish school has returned to basics. It's teaching youngsters the neglected art of writing with a fountain pen.

There is no clacking of keyboards in most classrooms at the Mary Erskine and Stewart's Melville Junior School, although there is a full range of facilities for computer lessons and technology isn't being ignored.

But the private school's principal believes the old-fashioned pens have helped boost the academic performance and self-esteem of his 1,200 pupils.

"The pens improve the quality of work because they force the children to take care, and better work improves self-esteem," principal Bryan Lewis said. "Proper handwriting is as relevant today as it ever has been."

Students as young as 7 have been instructed to forgo their ball point pens and get to grips with its more artful predecessor. By the time they reach grade five, at age 9, they are expected to write mainly with fountain pens.

At an English class recently, students worked at perfecting a skill that is under threat from the onset of e-mail - the art of writing a letter by hand. Each child's work was meticulous and clearly presented in the upright, graceful strokes of a fountain pen.

Ten-year-old Cailean Gall has been using fountain pens in class for two years. It took the keen soccer player one month to master the pen and, like all pupils at the school, still has regular handwriting lessons.

"At the start it was hard because I kept smudging, but you get used to it," he said. "I still have to use a pencil for maths, and now I find it strange using the pencils. I like it because it makes me concentrate much more on my work."

Cailean now uses his fountain pen even for non-school work, but classmate Katie Walker, 11, prefers to use ball point and pencil when not in class.

"I use it for schoolwork and homework only," she said. "It is quite easy using a fountain pen once you're used to it. My parents say it's improved my work enormously."

The children learn a handwriting style developed by teachers at the school, which charges $12,500 a year. New teachers are also put through a course on how to write with pens - as well as refresher courses on literacy and numeracy - before they are let loose in classes.

Lewis said the school's 7- and 8-year-olds use fountain pens for 80 percent to 90 percent of their work, reverting to pencils for such subjects as math.

"I don't see fountain pens as old-fashioned or outmoded. Modern fountain pens are beautiful to use; it's not like in the old days of broken nibs and smudging," Lewis said. "We have a particular writing style and we have developed it very carefully and found a way that allows left- and right-handed people to write without smudging."

Parent Susan Garlick supports the school and believes the use of fountain pens has improved the work of her daughter Elisabeth, an 11-year-old in grade 7.

"Her handwriting is beautiful," Garlick said.

Some people in wealthy nations argue that handwriting is becoming less important because of the growing use of cell phone text messaging and typing on computers, but the school disagrees.

In August, for example, examiners at the Scottish Qualifications Agency complained they had difficulty deciphering the scrawl of many students on exam papers used to determine admission to universities.

"We talk of the paperless office and the paperless world, but this is not true," Lewis said. "You still need to have proper handwriting skills."

The Last of a Dying Breed
Tony Long

The Luddite

An old friend of mine died recently. Well, I mean he wasn't an "old friend." He was in his late 70s (which I think still qualifies as "old") and he was a friend, even though I was privileged to know him for only five or six years. Still, his passing leaves a pretty big gap in my life, and I think I know why.

John was a dabbler, a sort of Renaissance man, if you will. And you just don't see a whole lot those around anymore, not in this age of narrowly defined interests. He was a courtly man, a retired cab driver who thought of himself as an artist. He was an accomplished painter. He could sculpt. He wrote poetry, which wasn't very good, and prose, which was top notch. He played some classical guitar and fooled around with the piano. He was a lifelong scuba diver who hunted abalone up the coast and had once been a competitive swimmer. He traveled the world several times over. He spoke a couple of languages. He was married three or four times. (He never got the hang of domesticity apparently, but he always spoke fondly of his exes.)

He was one of those larger-than-life guys who always made you smile when he hove into view.

But he never learned how to use a computer. What's more, he never had any interest in learning. For John, life existed "out there," not on a screen. He never owned a cell phone, or any phone, for that matter. Didn't have a TV. Probably never heard of an iPod. But he was one of the most interesting people I've ever known.

I think what made John so interesting, beyond the adventures he had and the great stories he loved to tell, was that there was always momentum to his life. He could make a lot out of a little. His days were full and I'll wager that, after Viagra came along, his nights were pretty busy, too. He personified the active over the passive. He was a doer, not a watcher.

Which is probably the biggest reason John didn't care about computers. Yes, they're efficient and good for business, if business is what you care about. But sitting at a computer when you don't have to is to be cripplingly passive, even if you're playing the bloodiest, most maniacal shooter game ever. Sorry, podnah, but that doesn't make you Billy the Kid. You're just a couch potato with twitchy fingers.

Computers have changed the nature of the workplace, the nature of work itself. This is the information age so a lot of us are cubicle-bound and tethered to the screen, whether we like it or not. It's also the age of specialization. You gotta work to live so unless you've cultivated a rare skill -- like you can really hit a curveball or something -- there's a good chance you'll wind up behind a desk. And on that desk, inevitably, will be a computer.

Which makes it really important for your balance and well-being to get out into the world in your free time and do something -- anything -- that doesn't involve some kind of software.

The physical toll of computer overuse is well documented. And while I'm unaware of any statistical data supporting my thesis that sitting in front of a computer for more than a few hours a day is spiritually draining, anecdotal evidence abounds. You just have to look around you, at a society growing more dysfunctional, discourteous and disconnected every day. There are a lot of reasons for this, of course, but technology that discourages real human contact is certainly a prime contributor.

We are social animals. We are meant to see each other, speak with each other, touch each other, smell each other. "Connecting" online with people you never actually see face-to-face doesn't count. If that's what passes for "community" in the 21st century, well, poor us.

Should we be more like John? Sure, if you can swing it. If you're resourceful enough and not materialistic you might have a shot, but the world has changed since John was young. It's hard to poke around in the interesting corners of life when you're under the gun to make as much money as possible just to stay afloat.

Pity. We'd be so much better off.

As Microsoft Looks Ahead, Will Vista be the End of an Era?
Rhys Blakely

'Bad guys' line up to test defences
Google presents biggest challenge

Opening windows

It is the engine behind the largest personal fortune ever amassed. All-conquering but largely unloved, it has changed the daily lives of hundreds of millions — but Microsoft Windows, the Genghis Khan of computer operating systems, faces an uncertain future.

Vista, the latest version of Windows, was released for businesses last month. The consumer version comes out next month. The revamp of its biggest cash cow is being billed as the most important event for Microsoft in a decade. Windows accounted for $10 billion (£5.1 billion) of the group’s $16.5 billion operating profit last year. Five years in the making, Vista’s 50 million lines of code have cost an estimated $7.5 billion to assemble.

Yet already the knives are out for Vista, a system that Microsoft executives admit will be the last of its kind, as their company finally gets to grips with the internet age. Vista is meant to be slicker and safer than its predecessors, but even after a two-year delay it is “not really ready”, Michael Silver, an analyst at Gartner, said. Companies hoping to switch in the past couple of weeks could not get hold of the additional software needed for it to work with their printers.

Security experts acknowledge that Vista is the most secure operating system that Microsoft has made, comparable to Apple’s latest version of its rival OSX system, but they also note that several flaws have already been uncovered and predict that Vista’s reach — 200 million people are expected to use it in a year’s time — will work to its disadvantage.

“The bad guys will always target the most popular systems,” Mikko Hypponen, of F-Secure, the security group, said. “Vista’s vulnerability to phishing attacks, hackers, viruses and other malicious software will increase quickly.”

The Vista security headache is not the only chink in Microsoft’s armour. Like all the Windows family, Vista traces its heritage back to the MS DOS system that Microsoft developed in 1981, when computers were standalone boxes. Vista is the most web-friendly Windows yet and Microsoft is placing a huge onus on its improved internet search engine, but industry observers suggest that Windows never really forgot its roots and has floundered since PCs became joined-up through the internet.

The fear is that rivals will use the web to kill Windows. Google, a child of the online era, is the No 1 threat.

“Microsoft is way behind Google when it comes to the internet,” Rupert Godwins, the technology editor at ZDNet, the industry website, said. “Building Vista, Microsoft is still doing things the old way at the same time as it undergoes a big shift to catch up.”

Rumours of an impending Google operating system, “GoogleOS”, have proven wide of the mark so far, but the Google Docs & Spreadsheets product does much of what Microsoft’s second-most important product, the Office suite of software, does. Google’s offering is a free, web-based service at docs.google.com. Microsoft’s Office Professional 2003 is much more sophisticated, but it costs as much as £460 and has to be installed on to the hard drive of a PC.

Crucially, the Google word processor and spreadsheet package does not need Vista.

Microsoft is retaliating with its own web-based services, dubbed Windows Live, but the strain of transition has shown inside the world’s largest software group. Jim Allchin, the 16-year Microsoft veteran who ran much of the Windows division and was dubbed the “Vista Godfather”, will leave the company in weeks. In the next 18 months Bill Gates, who became the world’s richest man, worth an estimated $53 billion, on the back of Windows licences, will drop out of the day-to-day running of the company that he co-founded 30 years ago. The changes have put an outsider, Ray Ozzie, the designer behind Lotus Notes and an internet expert, into the key role of chief software architect, Mr Gates’s former title.

Once installed in the post, Mr Ozzie wrote an internal company memo that mapped out the challenges that face Microsoft. The message was clear: get Google, get with the internet and wean Microsoft off Windows as we know it.

“Through Google’s focus they’ve gained a tremendously strong position,” he said. “[Microsoft] must respond quickly and decisively . . . It’s clear that if we fail to do so, our business as we know it is at risk.”

Craigslist Meets the Capitalists
Andrew Ross Sorkin

Jim Buckmaster, the chief executive of Craigslist, caused lots of head-scratching Thursday as he tried to explain to a bunch of Wall Street types why his company is not interested in “monetizing” his ridiculously popular Web operation. Appearing at the UBS global media conference in New York, Mr. Buckmaster took questions from the bemused audience, which apparently could not get its collective mind around the notion that Craigslist exists to help Web users find jobs, cars, apartments and dates — and not so much to make money.

Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

“I think a lot of people are catching their breath right now,” Mr. Schachter said in response.

The Tech Trader Daily blog ponders this question: “If YouTube was worth $1.65 billion, who knows what Craigslist would be worth if Jim and [site founder] Craig Newmark ever considred becoming — what’s the word? — capitalists.”

Craigslist charges money for job listings, but only in seven of the cities it serves ($75 in San Francisco; $35 in the others). And it charges for apartment listings in New York ($10 a pop). But that is just to pay expenses.

Mr. Schachter still did not seem to understand. How about running AdSense ads from Google? Craigslist has considered that, Mr. Buckmaster said. They even crunched the numbers, which were “quite staggering.” But users haven’t expressed an interest in seeing ads, so it is not going to happen.

Following the meeting, Mr. Schachter wrote a research note, flagged by Tech Trader Daily, which suggests that he still doesn’t quite get the concept of serving customers first, and worrying about revenues later, if at all (and nevermind profits). Craigslist, the analyst wrote, “does not fully monetize its traffic or services.”

Mr. Buckmaster said the company is doubling in size every year, as measured by page views and listings.

Larry Dignan, writing on Between the Lines blog at ZDNet, called Mr. Buckmaster “delightfully communist,” and described the audience as “confused capitalists wondering how a company can exist without the urge to maximize profits.”

Papers Battle Online News Sites
David Reid

"All the news that's fit to print" was once the newspaper man's slogan. Now, with news-junkies turning increasingly to the net for their daily fix of world events, papers are beginning to feel the pinch.

Not since the internet began has there been so much free quality newspaper content on the web.

You will have to make the most of it because the current bonanza might not last forever.

Newspapers are still not sure what to do about the internet, no matter how determined they are to prove wrong the doomsayers who claim they are dead.

But Larry Killman of the World Association of Newspapers believes newspapers are "far from dead".

"People have been predicting their death for years, television was going to kill newspapers, for example," he said.

"I think there is no doubt that growth in electronic media is the future, but there is still a future for print."

Over the years newspapers have been pretty resilient; they managed to ride out the challenge from radio and toughed it out with TV.

Financial challenge

But those challenges were more about who would be first or best with the news. The internet, however, is hitting papers where it hurts, in their pockets.

"For more than 100 years journalism has been sustained by this virtuous circle in which the audience paid for their news, and the advertiser paid to reach that audience, and the publisher made a profit and paid his journalists and the society benefited into the bargain," said Michael Oreskes, executive editor of the International Herald Tribune.

"That whole circle breaks down on the internet. This requires wildly creative thinking on the part of media companies to preserve the base of support that's created quality journalism for all these years.

"And that's a subject that the whole of society needs to be interested in and not just those whose livelihood depends on it."

The big question facing major papers is how can they compete with free. News used to be a saleable commodity, now they seem to be giving it away.

Papers like Metro have borrowed the internet's business model and make money solely through advertising.

Given their fix of news, many people will not now fork out for a paper.

That is hurting papers like France's Libération. It has traditionally shunned advertising it deemed politically compromising and relied on its cover price for its income.

It is now in financial crisis: its doors threatening to close for good. The paper partly blames the internet.

Complimentary strategy

"I do think the internet is a problem, but it is also the solution," said Fabrice Rousselot, Libération's internet editor.

"The mistake I think for any kind of media today would be to think they could do anything without the internet.

"You have to integrate the internet as part of your business model."

Which leaves papers with the problem of what, out of the pile of content they produce, should they put on the web?

There is not much point, for example, putting exactly the same stuff on the website as they put in the paper.

"If you offer on your website the exact same content as in your newspaper, why would people buy the newspaper? It makes no sense economically," said Mr Rousselot.

"But if you show people that the content on the website is only made richer in the newspaper the next morning because what you have on the website in terms of news is becoming an analysis, is becoming a report from abroad, is becoming some kind of a huge interview on the newspaper, then there is a sense to it."

While web strategy is being bandied around as the sink or swim buzzword of the moment, newspapers freely admit that no-one really knows for sure whether what they are doing is going to pay off in the end.


The International Herald Tribune now sees itself as a media organisation rather than just a paper; their website features video stories and has taken the step of charging for premium content.

"Good journalism costs money and so we are trying to see what we can do to make sure we can continue to grow and support the business," said Meredith Artley, director of digital development at the International Herald Tribune.

"So far it is working. The advertising is growing at a huge rate and we are seeing, especially with mobile devices, that readers will pay for something they know that's valuable.

"They'll do it on the web too, but with mobiles it is a little bit different. People will download things, they will pay for them.

"So we are exploring that. It is still a little bit of experimentation, but that is what all this is about."

These are scary times for newspapers and a crucial time for society.

A fully functioning media needs more than fast reacting rolling news, it also needs newspapers which spend more time chewing over what the news actually means.

There is a problem with free: it often comes unpackaged and without the know-how to understand it.

Family With Big Stake Seeks Part of Tribune
Andrew Ross Sorkin and Katharine Q. Seelye

The Chandler family, which long owned The Los Angeles Times, has begun holding talks with several private equity firms about forming a consortium to bid on part of the Tribune Company, people briefed on the discussions said yesterday.

The talks come six months after the Chandlers pressed to put the Tribune up for sale. The family, which became a large shareholder in Tribune when it sold Times Mirror to the company, has been critical of Tribune’s management and its slumping stock price.

When the Chandlers first clashed with Tribune management, the family had no interest in buying the company, people involved in the talks said.

Now, frustrated with the muted interest that the auction of Tribune has so far generated, the Chandlers are exploring the idea of leading a private equity consortium as a way to either create value in a leveraged buyout of the assets or to possibly start a bidding war.

Practically no newspaper companies, with the exception of the Gannett Company, have expressed interest in Tribune, which in addition to The Los Angeles Times owns The Chicago Tribune, Newsday and other newspapers, as well as two dozen television stations and the Chicago Cubs. A few private equity firms have submitted bids that were much lower than anticipated.

The advantage the Chandler family would have in the auction is its status as the owner of 20 percent of the Tribune Company. A deal could be structured with the Chandlers owning 51 percent of a Tribune unit and private equity firms the rest. For example, Tribune could decide to spin off its television unit and sell its newspaper unit to a Chandler-led group on a tax-advantaged basis. Such a consortium would not have to pay the enormous tax bill that an outside bidder would be faced with, an issue that has scared off some would-be suitors. And such a buyout structure, loaded with debt, would allow family members to cash out of Tribune to a degree, the people briefed on the discussions said.

The Chandler family’s first preference remains for the company to be sold in its entirety to an outside buyer, these people said.

Among Tribune’s early suitors were a group including Providence Equity Partners, Madison Dearborn Partners and Apollo Management. Other firms, the Texas Pacific Group, the Carlyle Group and Bain Capital, are considering whether to bid in the next round either separately or possibly together.

The tax considerations have been central to the family’s discussions about its Tribune stake.

In an article this year, The Los Angeles Times described the family this way: “The Chandlers have a long history of antipathy toward taxes, as do many people in their rarefied tax bracket. They also are known for structuring deals that give them maximum income.”

“When they have sold assets, such as the cable systems and TV stations that Times Mirror sold in the 1990s, they have pushed for aggressive tax advantages that have been challenged by other shareholders,” the article said.

Of course, the Chandlers’ interest could also be part of a plan to help create a competitive dynamic for Tribune. If its involvement helps propel a higher rival bid, the family would benefit, too.

Despite the Chandlers’ role in building The Los Angeles Times, the family’s interest in Tribune appears to be motivated strictly by economics, unlike that of the billionaire investors Eli Broad, Ron Burkle or David Geffen who have expressed interest in acquiring Tribune or some of its individual papers with plans to act as a benefactor.

A spokesman for the Chandler family declined to comment.

Shares of Tribune, which rose as high as $34 in September on hopes of a deal, have since retreated. The shares rose 14 cents, to close at $32.49 yesterday.

The Chandlers are descendants of the famous family, led by Gen. Harrison Gray Otis and his son-in-law, Harry Chandler, that exercised political and financial control over Southern California in the first half of the 20th century. They included the late Otis Chandler, a member of the fourth generation, who, as publisher of The Los Angeles Times from 1960 to 1980, expanded that paper’s ambition and reach. He also alienated more conservative members of his family, which today is a diffused clan of about 170 people.

In June, the Chandler family said publicly that the company’s financial performance was dismal and its strategic direction muddled, and it called on the company’s board to consider a breakup.

In September, the company’s board voted to explore ways of creating additional value for shareholders and also made a deal with the Chandlers, increasing their stake in the company to 20 percent, from 15 percent.

The family now has three representatives on the Tribune board: Jeffrey Chandler, one of California’s largest avocado growers; Roger Goodan, his cousin; and William Stinehart Jr., a family lawyer.

They are advised by Thomas Unterman, a lawyer and venture capitalist, who has worked for the family for years and has engineered a series of complex deals, most of them designed to help minimize taxes.

Warning: May Cause Hunger

I hate to flog an ad (versary), but…

Microsoft’s latest commercial for it’s Zune line of personal stereos so evocatively captures the "sharing is wonderful" ethos of the P2P community that I have to pass it on. It also simultaneously illustrates why infinitely reproducible intellectual property is totally unlike the physical variety. Not bad for 60 seconds.

That this strange little ad comes from one of the largest abusers of IP law is not lost on me. I just like the spot.

Times Sq. Ads Spread Via Tourists’ Cameras
Louise Story

Advertisers have long been drawn to Times Square as a valuable place to reach consumers, paying hundreds of thousands of dollars for space on billboards and blazing video screens.

But recently they have discovered that down on the ground, new technology has given low cost, face-to-face marketing campaigns something of a cutting edge as consumers spread their messages on the Internet.

Take the recent display of public toilets set up by Charmin bathroom tissue: Used by thousands in Times Square and viewed by 7,400 Web users on one site alone. Or Nascar’s recent display of racecars; videos of the event have been viewed on YouTube more than 1,800 times. More than 60 people wrote about the event on their blogs and 60 more spread the word — and pictures — on the Flickr Web site.

“The great thing about the digital world is you can capture these events,” said Christian McMahan, brand director for Smirnoff Ice, owned by Diageo. “People can see them whether they were there that day or 3,000 miles away.”

As a result of the growing popularity of consumer-generated pictures, videos and e-mail messages on Internet sites like YouTube and Myspace, advertisers are getting consumers to essentially do their jobs for them.

When Target, the discount store operator, suspended the magician David Blaine above Times Square for two days during the week of Thanksgiving, videos shot by viewers were posted on YouTube and viewed more than 19,300 times.

“Times Square is becoming, in a way, a publishing platform,” said Peter Stabler, director of communication strategy for Goodby, Silverstein and Partners, an advertising agency that is part of the Omnicom Group. “What happens in Times Square is no longer strictly the province of location. You can experience things that are happening there, even if you’re not there.”

On sites like YouTube, Flickr and MySpace, an army of tourists and residents are spreading advertisers’ messages well beyond Manhattan, using their cell phones and video cameras as they walk through the marketing crossroads of the world.

Consumer brand companies are taking advantage of that by hosting elaborate events, fully aware that those events are great fodder for footage. Hosting events in Times Square, advertisers said, is like buying product placement in a TV show or a movie — except the cameras are held by consumers and the placement is on the Internet.

Experiential marketing, as the ad industry calls such campaigns, is intended to give people something they can tryout and photograph. Companies are holding such events in cities around the world, but advertisers said Times Square was unparalleled in its reach. People around the world recognize Times Square in photos and videos online and are more likely to view them, marketers said.

Charmin’s bathrooms, which opened on Broadway near West 46th Street on Nov. 20, generated traditional coverage with more than 100 articles published about the fancy toilets. But consumer videos posted on YouTube alone have been viewed more than 7,400 times.

Hundreds of other people each week post photos and videos on their blogs and MySpace pages. One blog post last week, “Der New York Trip Part II”, written in German, shows a young couple posing with the Charmin bear. Charmin is a brand of Procter & Gamble.

Another post about the Charmin toilets last week on a Web design blog wondered, “Could this be too much marketing?” Christian Montoya, the site’s author, videotaped the bathrooms when he visited Times Square on Thanksgiving so that he could post the footage online for his roughly 700 daily readers. Though Mr. Montoya, a senior at Cornell University, said he was skeptical of marketing but thought the Charmin bathrooms were effective.

“It was more than a billboard because you could actually try the product,” Mr. Montoya said.

It is difficult to count exactly how many people pass through Times Square each day, but foot traffic by some measures has nearly doubled. In 1997, the Times Square Business Improvement District counted 8,702 people an hour passing through the most crowded parts of Times Square during the busiest times of year. This year, the Times Square Alliance found that nearly double that amount — about 15,000 people — passed the Virgin Megastore on Broadway during busy hours.

But, advocates of experiential marketing say headcounts in Times Square underestimate the district’s impact. Face-to-face interaction with customers is more powerful than traditional ads, they say.

“What people do is geometrically more powerful than what they are told,” said Brian Collins, chief creative officer of Ogilvy and Mather Brand Innovation Group, a part of the WPP Group. “Feeling something, picking it up in your hands, walking into an environment is a far more powerful brand promise than anything you are simply told through traditional media alone.”

On the day after Thanksgiving, Diageo’s Smirnoff Ice brand held a tongue-in-cheek rally featuring about 30 paid actors as “core protestors.” The theme was “save the mistletoe,” a slogan for a holiday campaign for Smirnoff Ice. Smirnoff estimates that 60,000 people passed by its four-hour rally.

“When you go into an arena that is so iconic like Times Square, people are looking to be entertained,” said Christian McMahan, brand director for Smirnoff Ice. “And they’re looking to be part of it.”

In April, General Electric rented nine digital billboards in Times Square and displayed photos of people passing by. People on the street photographed themselves standing below the billboards when their images appeared. Soon, those images were circulating online.

“It’s much more interactive,” said Judy Hu, the global executive director for advertising and branding at G.E. “You’ve got people who are e-mailing, sending messages, they’re involved with your brand personally as opposed to just viewing it.”

G.E. and other companies that hosted recent events would not divulge their costs, but they said the total came out surprisingly low compared with other forms of marketing.

The mayor’s office said permits to use Times Square areas started at $25,000 but often cost $50,000 or more for a day, and that 112 marketers had paid for permits this year.

The amount of marketers in Times Square has soared this year in large part because three traffic islands there were made available on a regular basis this year for the first time as part of Mayor Bloomberg’s broader initiative to attract more tourists to New York City.

In February, Walt Disney World sent Hans Florine, the X-games gold medal climber, scaling up a billboard to promote Expedition Everest, a new Animal Kingdom park ride. Mickey Mouse was also there, but he stayed on the ground.

In early December, MasterCard carolers sang holiday songs and passed out hot chocolate; street vendors sold coffee in Ann Taylor Loft paper cups; and a Sovereign Bank team rode red Segways passing out shopping bags and subway maps.

But some advertising executives wonder if it might be reaching the saturation point.

“It is now getting to the point,” said Lori Robinson, senior vice president of Hill and Knowlton, the WPP Group agency that helped produce one event, “where there just might be a little too much going on in Times Square.”

In Web Traffic Tallies, Intruders Can Say You Visited Them
Peter Edmonston

In late May, more than five million Web users vanished.

The disappearing act came when Nielsen/NetRatings, a leading company in measuring Internet traffic, sharply cut its previously reported statistics for the financial Web site Entrepreneur.com to 2 million unique visitors in April, from 7.6 million.

Why the change? For millions of Web surfers, Entrepreneur.com visited them — and not the other way around, the measurement company said.

As computer users visited other sites, new browser windows popped up containing articles from Entrepreneur.com, according to Scott Ross, senior product manager for Nielsen/NetRatings.

Pop-up windows appear all over the Internet, including the Web site of The New York Times. But they are typically used as advertising to pitch a product or a service.

Entrepreneur.com’s pop-ups were unusual because they contained news content, like articles on how to start a small business, making them hard to distinguish from an intentional visit to Entrepreneur.com’s site. This hailstorm of pop-ups more than tripled Entrepreneur’s reported traffic before it was detected and factored out a month later.

The technique of using pop-ups to gain readers underscores just how important sheer numbers have become in the online media business. Advertisers are shifting their marketing dollars to the Internet, but the rates they pay are low compared with traditional media.

Consequently, publishers who have struggled for years to find a way to make money online are taking aggressive steps to get their Web pages in front of as many eyes as possible.

Entrepreneur.com, owned by Entrepreneur Media in Irvine, Calif., did not return calls seeking comment. But it is not the only online publisher to use pop-ups, according to Benjamin G. Edelman, a Harvard doctoral student who has compiled a large database by installing on his computer many kinds of software, known as adware, that generates pop-ups.

(Mr. Edelman has also provided expert testimony on behalf of publishers, including The New York Times Company and other newspaper concerns, in a lawsuit involving adware. The publishers had sued to prevent pop-ups, by the Gator Corporation, from appearing on their Web sites. The suit was settled in 2003 under terms that were not disclosed.)

Other sites that appear to have used pop-ups for content in the last year include Concierge.com, the Web site of Condé Nast Traveler magazine; ForbesAutos.com, part of the Forbes financial publishing group; and Heavy.com, a popular humor site, Mr. Edelman said.

The concern over pop-up content goes beyond traffic numbers. Many advertisers pay premium prices to reach readers of certain Web sites. Through pop-ups, these advertisers may find their orders are being fulfilled with low-cost page views that users never requested and may never have seen.

This list of sites surprised Scott Symonds, vice president for media at Agency.com, who advises companies on where to spend their online advertising budgets. Pop-ups delivered by adware are usually seen as a “nuisance form of advertising,” and most mainstream publishers avoid them, he said.

“You would hope that publishers of high-quality content would use advertising techniques that were in keeping with that,” Mr. Symonds said. He added, though, that pop-ups could be a legitimate way to reach new viewers if the publisher took certain precautions, like not using pop-ups to inflate traffic or satisfy orders from advertisers.

There are legal issues as well. Many sellers of pop-up ads have been sued by regulators and consumers, who say the software to allow pop-ups is often installed without a users’ consent. The adware hitches a ride on another application, like a game or a screen saver, and the pop-up function can be buried in the fine print. Sometimes it is never disclosed.

“You can almost look at it like steroids,” Mr. Ross said of pop-up content, which his firm calls “non-user-requested” traffic. Others in the online media business call it “push traffic,” because Web pages are actively pushed to computer users who do not request them.

Used indiscriminately, push traffic is like printing extra copies of a magazine and tossing them onto doorsteps or, because pop-ups can be intentionally hidden behind other windows, simply dropping them in an alley.

Mr. Ross and executives at comScore, a rival measurement company, say they can usually detect such activity and remove it from their data. But both companies concede that they cannot catch everything.

“It is a cat-and-mouse game,” said Magid M. Abraham, comScore’s chief executive.

In the case of Concierge.com, which has articles on luxury resorts and expensive spas, the site recently bought pop-up services from Zango, one of the largest adware companies. In one case, Zango’s software caused a page featuring “Hot List Hotels 2006” and other travel articles (created by Concierge.com) to appear unexpectedly while Mr. Edelman was browsing other sites, he said.

Concierge.com declined to comment, but Zango has faced harsh criticism from the Federal Trade Commission. In early November, Zango agreed to pay a $3 million fine to settle the commission’s charges that it had used unfair and deceptive practices to install its software on personal computers and to make it difficult to remove.

“If consumers choose to receive pop-up ads, so be it,” Lydia B. Parnes, director of the commission’s Bureau of Consumer Protection, said in announcing the Nov. 3 settlement. “But it violates federal law to secretly install software that forces consumers to get pop-ups that disrupt their computer use.”

Zango, based in Bellevue, Wash., said that third-party affiliates were the source of the problems and that it had long since cut ties with them. Zango also said it had operated within the requirements of the F.T.C. settlement, including verifying computer users’ consent, since Jan. 1 and had hired an outside auditor to confirm its compliance.

Zango’s chief executive, Keith Smith, said he would not identify or discuss any of his company’s clients. Asked about Zango’s potential as a tool to inflate traffic numbers, he said that publishers and measurement companies need to work out the issue themselves. “The measurement piece is still evolving,” he said.

Zango is just one of the adware providers that work with online publishers. Until late last year, ForbesAutos.com, an auto-related offshoot of the financial site Forbes.com, was using the services of eXact Advertising, whose adware is sometimes bundled with free games and other applications.

Screen images from December 2005 show several cases in which eXact delivered unsolicited pages — in one instance, a review of a BMW Z4 coupe — from ForbesAutos.com. The pages were actually “pop-unders,” positioned so they were mostly obscured by the main browser window, to be revealed when that window was closed.

Forbes.com declined to say how long it used pop-ups or how many pages were generated that way, but Jim Spanfeller, Forbes.com’s chief executive, said they accounted for a “very small fraction” of its page views. He also said the site abandoned the practice last year.

“We decided in 2005 to stop using pop-ups of any sort, delivered by adware or otherwise, for site promotion after determining they were of less utility than other efforts,” Mr. Spanfeller said. A spokeswoman for eXact Advertising declined to comment.

Heavy.com, a site that tries to attract young men with its irreverent video clips and animation, is also a page popper, though the company says it has taken steps to avoid inflating traffic statistics or upsetting advertisers. Citing data from Hitwise, a traffic measurement company, Heavy.com said that in October it was the second-largest entertainment video site after YouTube.com. Rather than rely on videos alone, though, the site has also been using pop-ups to position its pages in front of users.

In a recent session, Mr. Edelman said he saw two Heavy.com pages appear on his screen within the space of a minute, each generated from a separate piece of adware. In one case, the Heavy.com home page appeared while he was browsing Netflix, the video rental service.

Some users seem to be bombarded by Heavy.com pop-ups. “HELP! tons of pop-ups from heavy.com and webcrawl.com!!” was the plea posted a few weeks ago in the forums of SpywareInfo.com, which offers advice on shedding unwanted software.

Heavy.com acknowledges using pop-ups, but Andy Morris, a spokesman for the company, said it did not use adware or condone its use. Instead, Heavy.com works with ad networks whose member sites initiate the pop-ups, a practice it calls an “effective marketing tool.”

Presented with Mr. Edelman’s pop-up examples, Mr. Morris said they were not generated at Heavy.com’s request. In some cases, he said, the site has been used by “unscrupulous third-party Web operators” that tried to use its videos as bait; in others, Heavy.com worked with ad networks that then violated the terms of their agreement by using adware.

“Quite simply, we’ve been ripped off,” Mr. Morris said.

Heavy.com said its advertisers were never charged for pop-up pages and that the pop-ups did not inflate its traffic because it flagged those pages so that comScore could exclude them from its statistics. ComScore confirmed this arrangement.

“They did the honorable thing,” Mr. Abraham said.

But Nielsen/NetRatings was unaware of Heavy.com’s pop-up campaign until recently, a NetRatings spokeswoman said. When it began excluding those pop-ups in October, Heavy.com’s traffic dropped 35 percent from the previous month, to 1.8 million, although NetRatings said it was unclear how much of the decline was related to removing the pop-ups. (ComScore reported 7.8 million visitors to Heavy.com in October, more than four times the NetRatings number and a large gap even in the inexact world of Web measurement.)

Heavy.com strongly disputes the accuracy of the NetRatings data. Among other things, it argues that the company does a poor job of tracking sites like Heavy.com that use Flash multimedia software throughout their pages. It also said that NetRatings had relatively few college students, who are a large part of Heavy.com’s audience, in its survey group.

Big Media Taps New Set of Digital Gurus
Seth Sutel

Media titans are still a long way from figuring out how to deliver their goods and engage with their audiences over the Internet, while still making a profit. As they enter 2007, many of these companies will be turning to newly installed executives to make it happen.

At TV and radio broadcaster CBS Corp., CEO Leslie Moonves recently tapped a veteran Silicon Valley dealmaker, Quincy Smith, to build up its interactive offerings. Smith said that part of his mission is to make sure CBS is "very approachable" by entrepreneurs with new ideas.

Another media stalwart, News Corp., is already moving out of entrepreneurial mode with MySpace, the social networking site it acquired 18 months ago, replacing its interactive chief Ross Levinsohn with a seasoned Fox television executive Peter Levinsohn, who happened to be a distant cousin.

"The feeling was that we were entering a stage when this was less about deals ... and more about maximizing what we have," News Corp.'s chief operating officer Peter Chernin told a recent meeting of investors. "Now our focus is how to we build out the asset."

For many media companies, a big question for 2007 will be how to grow their revenues from online and interactive sources, and whether to do it by buying businesses, building up ones they already have or coming up with new models from scratch.

Philippe Dauman, who took over as CEO of MTV owner Viacom Inc. in September, affirmed his goal of reaching $500 million in revenue from digital businesses in 2007, but acknowledged that the company needed to work harder at creating opportunities for advertisers online. "We could sell a lot more than we have," Dauman said at an investor conference.

Dauman came in after Viacom's chairman and controlling shareholder Sumner Redstone grew impatient with the company's lagging share price and what he saw as the apparent hesitation by former CEO Tom Freston to aggressively pursue Internet deals.

How aggressive Big Media will be in 2007 with deals, however, is far from certain. Media bigwigs watched with a mixture of fear and fascination this year as the video-sharing site YouTube became a cultural phenomenon, but few were ready to brave the copyright issues that would have come with buying it, let alone the $1.76 billion price tag that Google Inc. wound up paying for the upstart company, which had yet to make profits.

Media CEOs would love to make transformative deals - CBS' Moonves says he wants to find the "next" YouTube - but the big prizes may remain out of reach. "If your stock is at $500, most deals look pretty cheap," quipped News Corp.'s Chernin, referring to Google's lofty share price. "We don't have that luxury."

Tony Kern, head of the media and entertainment practice at Deloitte, a consulting and accounting firm based in New York, says 2007 will be a year of "reevaluation" for several of the recent deals to hit the media space, notably Google's deal for YouTube.

"There's a lot of money being spent, and while advertising is increasing dramatically across the Internet sites, I don't think it's increasing at a rate that will prove out the investment strategy," Kern said.

Online advertising continues to grow very quickly, but its share of the overall advertising pie remains relatively small. Last week, ZenithOptimedia forecast that global Internet advertising spending would grow 28.2 percent in 2007, compared to growth in other media of 3.9 percent.

However, the $24.4 billion spent on Internet advertising in 2006 is just 5.8 percent of global advertising spending of $423.8 billion, according to ZenithOptimedia. The Internet's share of global advertising is expected to rise to 7 percent next year.

Many expect smaller deals to continue as 2007 unfolds, a process that could result in even more Internet entrepreneurs coming into the fold of media companies, much as MTV Networks' new digital guru, Mika Salmi, came on board after MTV bought the company he founded, Atom Entertainment Inc.

Media companies also could find themselves on the receiving end of investor interest in 2007. With the stocks of many traditional media operators still out of favor on Wall Street, many expect an emerging wave of buyout deals by private equity firms to continue.

Already this year Readers Digest Association Inc., radio industry leader Clear Channel Communications Inc. and Univision Communications Inc., the nation's largest Spanish-language broadcaster, have all agreed to be bought out by private equity firms, and more deals could be on the way. Newspaper publisher Tribune Co. is considering a sale of all or part of the company, a process that should conclude early next year.

"There is a ton of capital in the market right now," says Brendan Buckley, the lead media analyst at Fitch Ratings Inc., a credit ratings agency. "We don't think anyone is immune in this particular market."

AOL Executive Turnover Follows Hiring

Several senior executives at AOL have resigned since the hiring of a new chief executive at the Internet company owned by Time Warner.

Among those leaving by the end of the year are James P. Bankoff, executive vice president for programming and products, and Joe Redling, president for AOL mobile, customer management and paid services. The departures are part of an expected shuffle of executive positions by the new chairman and chief executive, Randy Falco. The internal reorganization is expected to be announced on Monday.

Mr. Falco, a longtime executive at NBC Universal, was named last month to succeed Jonathan F. Miller as the head of the Time Warner unit that has undergone change and turmoil in recent years.

The company is in the midst of a major strategy shift away from paid subscriptions for Internet hookups in favor of free Web services for broadband users. Last week, AOL laid off 450 employees under a previously announced restructuring plan.

China Tightening Control of Online Games

China is tightening controls on its booming online game industry, requiring distributors to closely monitor game contents after some were found that included forbidden religious or political material, a state news agency said Tuesday.

The announcement adds to government efforts to tighten controls over Chinese newspapers, television and other media.

Distributors must obtain approval to release new games and submit monthly monitoring reports confirming that operators haven't added forbidden content, the Xinhua News Agency said. It cited a notice by the Press and Publication Administration.

China has 23 million online game players, up from 13.8 million in 2003, according to Xinhua. It said revenues this year are expected to reach 7 billion yuan ($850 million).

The latest crackdown was prompted by "a rash of problems with imported online games, some of which contain sensitive religious material or refer to territorial disputes," Xinhua said. It said some were criticized as pornographic or too violent.

The report gave no details about the religious and territorial issues, but the government is sensitive to references to Islam and Taiwan, the self-ruled island that Beijing claims as its own territory.

Regulators said distributors concealed the content of the games when applying for approval, and operators sometimes upgraded games with improper content, Xinhua said.
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Life after Napster
Dawn Kawamoto

Hank Barry has come full circle: attorney, venture capitalist, chief executive, attorney.

But his career has seen far more twists than these titles might suggest.

For example, his foray into the entrepreneurial realm, vis-a-vis his role as a venture capitalist, landed him the role of interim CEO at Napster. In that position, he played a part in helping define the boundaries of the file-swapping, or peer-to-peer, industry.

The first leg of Barry's transitions came as a chief legal eagle for Wilson Sonsini Goodrich & Rosati during the 1990s, representing the likes of Global Village Communications, Liquid Audio and Upshot to signing aboard with VC firm Hummer Winblad Venture Partners in 1999 and serving as interim CEO for Hummer Winblad portfolio company Napster between 2000 to 2002.

Earlier this month, Barry came full circle when he joined Howard Rice Nemerovski Canady Falk & Rabkin as a director and member of its business department. As an attorney with Howard Rice, Barry will focus on intellectual property, commercial strategy and venture capital as it relates to high-growth companies.

Barry recently chatted with CNET News.com about his circuitous route and the lessons learned along the way.

Q: What prompted you to leave the VC world and re-enter law?
Barry: I continue to have a great relationship with Hummer Winblad and loved working there, but this seemed like the right thing to do.

I always loved practicing law, and Howard Rice has the scale to do complex matters, like RIM (PDF) and Charles Schwab, but also is small enough for the human factor. I think there's somewhere around 125 lawyers, so it seems like a good fit for me.

If you loved the law so much, why did you leave Wilson Sonsini after five years to join Hummer Winblad in 1999?
Barry: While I was at Wilson Sonsini, I did five IPOs in 1999 and was familiar with Hummer Winblad. I had known them for 10 years. The era we were in had lots of opportunities, and I wanted to know more about the financial aspects of companies and do an operating role.

It seems you got both at Napster. What are some of the key lessons learned while serving as interim CEO at Napster that can be applied to the companies you'll be representing at Howard Rice?
Barry: The No. 1 thing I have an appreciation for is how fast things move on the operations side. As lawyers, you're trained to reflect. But on the operations side of things, you don't have time. The marketscape map is changing on a daily basis. You don't come to appreciate it until you experience it. And that experience will make me a much better lawyer as a result.

I also have a better understanding of what is functionally important, rather than what is important in the abstract. One thing we did at Napster that I regret is having somewhere around 30 engineers to develop a filtering system. With all the delays we had, we could have had a smaller team and made more progress in the same amount of time.

Do you expect to do a lot of work representing peer-to-peer companies?
Barry: I think there are a lot of interesting possibilities out there. I think it is an architecture that is much better understood than when we were doing Napster. The good news is it's a very efficient transport mechanism, but that is all that it is--a transport mechanism. So companies try to build on top of that and then it kind of becomes an applications business. The interesting thing to see is what happens to P2P in mobile devices. Mash-ups are in essence P2P.

With the entrepreneurial experience you gained from running Napster, what consideration did you give to launching your own company?
Barry: I could, but Howard Rice is an entrepreneurial firm and very hands-on. I see this as an entrepreneurial opportunity. I have an operational role and will also be doing complex litigation and complex transactions.

When you were with Wilson Sonsini, did you work with start-ups on their term sheets that would be presented to the VCs? And when you went to Hummer Winblad, did it prove much of an eye-opener on the process those term sheets go through?
Barry: I see it from both sides now. I learned it's all about pattern matching. Once you work with a lot of companies, you see a lot of patterns.

A year after a company is funded, you often see a beef develop with the CEO. As the company grows, the founder's relationship with the VCs often changes. You see this on the side that's representing the companies and you see it on the VC side.

At Hummer Winblad, I learned about the VCs' decision-making process and the dynamics considered when determining what to invest in. I have a greater appreciation for the ecosystem, that relationship they have with institutional investors, corporate partners and the companies. I think people who have never been at VC firms don't realize how important these relationships are on a day-to-day basis.

I have a much better ability to match up which companies should go with which VC firms and which VC capitalists. You get to know who is interested in what and who would get along with whom.

P2P: From Internet Scourge to Savior

New peer-to-peer video-downloading options should please Internet users--and stave off a network meltdown.
Wade Roush

Every few years, someone predicts the imminent collapse of the Internet. Bob Metcalfe--Ethernet inventor, 3Com founder, and Technology Review patron--famously said at a 1995 Web conference that he would eat his words from a pessimistic Infoworld column if the Web didn't disappear within a year under the strain of traffic overloads and other problems. In April 1997, Metcalfe contritely drank a milkshake containing the torn-up bits of his column. In 2004, Helsinki University of Technology professor Hannu Kari said spam and viruses would kill off the Internet by 2006. The fact that you're looking at this website now means Kari was wrong.

The point is that even the sharpest innovators and entrepreneurs have often had a hard time seeing how the next hurdle in the Internet's growth would be overcome--only to be surprised by some new resource, technology, or business idea that emerges in the nick of time. (In both 1996-97 and 2005-2006, Internet service providers responded in part by adding more bandwidth to their networks.)

But will that pattern hold out forever? The dam-breaking success of YouTube and Apple's iTunes Video Store--neither of which existed prior to 2005--has unleashed a huge new flow of digital video on the Internet, and many consumers now spend hours a day streaming or downloading everything from home movies to live sports and prime-time TV series. Because video files are so large compared with the Web pages and e-mail messages that used to dominate Internet traffic, backbone lines are under strain, and backbone operators such as AT&T and Verizon and Internet service providers such as Comcast are facing new costs they can't easily recoup, given the flat-rate pricing of most consumer broadband Internet access plans.

Hui Zhang, a computer scientist at Carnegie Mellon University who studies broadband networks, says that "2006 will be remembered as the year of Internet video. Consumers have shown that they basically want unlimited access to the content owners' video. But what if the entire Internet gets swamped in video traffic?"

This time around, the Internet may be saved by the unlikeliest of rescuers: the builders of peer-to-peer file-sharing networks. In the minds of many consumers--and many studio executives--P2P networks are still synonymous with digital piracy. After all, Napster, Kazaa, and other early peer-to-peer networks were playgrounds for copyright violators, who downloaded millions of music files they hadn't paid for. But today a number of researchers and entrepreneurs are arguing that peer-to-peer technology--which allows network members to retrieve content by tapping into the hard drives of other members who have already downloaded that content--is also great for distributing legitimately purchased, copyright-protected music and video. It might even lessen the burden on service providers and content distributors.

By putting new twists on the P2P concept, businesses hope to bring digital distribution of movies, TV shows, and other premium content to a market beyond iPod owners and YouTube addicts. In August 2005, for example, Internet company Wurld Media, of Saratoga Springs, NY, rolled out a P2P platform called Peer Impact. Once users have downloaded the free Peer Impact media player, they can buy and download movies and TV shows (as well as games, radio shows, and music) to a shared folder on their PC. The twist: Peer Impact pays users every time someone else on the network draws that content from the shared folder. Members can use their "Peer Cash" to buy more content. (I tried Peer Impact's service recently and found downloads to be fast and smooth. I was able to start watching a one-hour episode of the fanfic production "Star Trek: New Voyages" about two minutes after the download process began; the entire download took about twelve minutes.)

Even BitTorrent, an advanced P2P network long seen by movie and record executives as an irksome successor to Napster and Kazaa, is going mainstream. The company announced early this month that it had raised $20 million in a second round of venture-capital funding and acquired competitor μTorrent (pronounced "microtorrent"), maker of a compact version of the BitTorrent software meant to be suitable for set-top boxes and other non-PC devices. BitTorrent--which speeds up downloads by grabbing and reassembling file fragments from the most accessible peers on the network, rather than by transferring whole files from one peer to another--is still one of the best tools for locating and procuring Internet video. That's in part because it's free and in part because so many people use it and have built a worldwide archive of digital files.

Many other companies are jumping into the P2P video mix, including Peercast, Octoshape, Allcast, and Itiva. Dijjer, a project of Revver (which was founded by peer-to-peer pioneer Ian Clarke), reduces the load on individual users' computers by grabbing much of the content of a requested file from other users' computers. A team of researchers from three universities in the Netherlands has introduced Tribler, a BitTorrent-like program that adds useful features such as Amazon-like recommendations and real-time maps showing who is downloading the same content. And in the United Kingdom, the BBC is developing a peer-to-peer media player called iPlayer. In a trial conducted with 5,000 users from November 2005 to February 2006, users were able to download first-run BBC shows for seven days after their official TV broadcast; many participants used the service simply to catch up on their favorite programs, but interestingly, the network also found that study participants were disproportionately drawn to several new shows and "niche" shows that hadn't fared as well among regular broadcast viewers.

The Internet is already teeming with peer-to-peer traffic. In fact, P2P downloads may account for as much as 60 percent of network traffic--and as much as 60 percent of that traffic is video, according to CacheLogic, which has developed a proprietary system for accelerating P2P downloads. (The system enhances P2P distribution by giving peer-to-peer networks access to dedicated, high-capacity "edge servers" scattered around the Internet, in much the same way as the traditional content-distribution networks pioneered by companies like Akamai.)

So how could additional P2P traffic actually be a good thing for the Internet? Carnegie Mellon's Zhang points out that because peer-to-peer networks exploit both the downlink and uplink capacities of users' Internet connections, they distribute content more efficiently than centralized "unicast" technologies. Zhang also says it should be possible to label P2P traffic so that service providers can track it and decide how much of it to allow through their networks. He and colleagues from the University of California at Berkeley have founded a startup, Rinera, to develop software that will give service providers such control.

"The network itself needs to be informed about the types of traffic it's handling, and service providers need to participate by setting policies," says Zhang. "Otherwise, as applications like video downloading really take off, we will see a congested network, which will in turn impede the development of video-sharing technology."

Cleanfeed Canada - What Would It Accomplish?
Bennett Haselton

Cybertip.ca, a Canadian clearinghouse for providing information to law enforcement about online child luring and child pornography, has announced that a group of major ISPs will begin blocking access to URLs on Cybertip's list of known child pornography sites. A Cybertip spokesperson says that the list fluctuates between 500 and 800 sites at any given time.

The system is named after a similar filtering system used by service provider BT in the UK. It is also reminiscent of a law passed in Pennsylvania in 2002 requiring ISPs to block URLs on a list of known child pornography sites; the law was struck down in 2004 on First Amendment grounds. Although child pornography is of course not protected by the First Amendment, the law was struck down partly because the ISPs were blocking entire servers and IP address ranges, hundreds of thousands of non-child-pornography sites were also being blocked.

Under the implementation of the Cleanfeed system, representatives from Sasktel, Bell Canada, and Telus claim that only exact URLs will be filtered, not sites hosted at the same IP address. (Although conventional Internet filtering programs sold to parents and schools have also made the same claims, only to turn out to be filtering sites by IP address after all, so we'll have to wait until the filtering is implemented before we know for sure.) The other difference of course is that the Cleanfeed system is not the law, so there's nothing to "strike down" in court. Cybertip did acknowledge that this means customers can get around the filtering for now by switching to a non-participating service provider, although they are encouraging more providers to sign up. Cybertip declined to say whether any providers had simply refused to participate. But of course it's much easier than that to get around the filter, since filter circumvention sites like Anonymouse and StupidCensorship will not be blocked.

So, if it's that easy to circumvent, does it do any good? Even respected Canadian academic and columnist Michael Geist, hardly a friend of censorship in other forms, has spoken out in favor of the plan. I'm going to go out on a limb and say that it doesn't accomplish anything meaningful, and may set a horrible precedent that could make it much easier to block other content in the future.

First of all, it seems that it obviously won't stop anyone who is deliberately looking for child porn. Empirically there's no way to tell -- we don't whether systems like Cleanfeed in the UK have prevented people from accessing child pornography on purpose. Even if the providers are counting the number of blocked accesses to known child porn sites, nobody knows what people have been looking at instead through proxy sites like Anonymouse. All we can do is ask, logically, whether it is likely to work. I think purely logical arguments are frustrating when there is no empirical data to act as a referee, but let's face it, users are not going to self-report on their success at finding child pornography, and there's no way to see what users are accessing through encrypted circumvention sites. Logic is all we have.

So, consider people who are deliberately looking for child pornography. Such people are likely to be resourceful to begin with (since real child porn -- remember, non-sexual pictures of naked children do not count -- is vastly less common than regular porn; Cybertip claims after all that they "only" have about 800 sites on their list, compared to millions of regular porn sites). Virtually all such people would be aware of circumvention sites like Anonymouse, or of peer-to-peer networks, which Cybertip says they have no plans to block. So nothing is blocked from people who want to get around the filter.

The only scenario where the filters could make a difference is the case where someone accidentally accesses a child porn site. Now when I first read the Cybertip press release announcing that the filter would aim to stop "accidental" exposure to child porn, I thought that was just a tactfully sarcastic way of referring to the people who get caught accessing child porn and claim it was just a mistake. But Cybertip.ca claims they've received over 10,000 reports since January 2005 from people who accessed child porn by accident. Even though that only works out to about 15 per day, I have to concede in those cases it almost certainly was a bona fide mistake, for the simple reason that nobody would voluntarily report accessing a child pornography URL that they visited on purpose. But even so, there's the question: What have you accomplished by blocking accidental exposure?

I would argue that the harm done by child pornography is to the minors coerced into the production of it, not to the people who view it. (This, by the way, corresponds with current U.S. jurisprudence; the U.S. Supreme Court ruled in 2002 that a law banning fake child porn was unconstitutional, even when the viewer can't tell the difference.) Obviously you prevent the most damage by stopping child porn at the production stage, but if it's too late for that, you can try to stop people from obtaining it willfully. This lowers the demand and decreases the incentive for people to produce more in the future.

But how would it lower demand if you block people from accessing it accidentally? If those people weren't going to proceed to buy or download more pictures anyway, then they're not fueling the demand. You can block them from accessing the pictures, but the pictures are still out there, and the people who really are fueling the demand can still access them.

So it seems that by blocking someone from accidentally viewing child porn, all you've really accomplished is to avoid offending their sensibilities. Now I don't mean that mockingly, I'm certainly not disagreeing with anyone whose sensibilities are offended by child porn. But there are lots of graphic pictures on the Internet that could offend someone's sensibilities, which are outside of Cleanfeed's mandate. Consider a photo of a 16-year-old having sex, versus a photo of an adult woman fellating a horse; even though the former is illegal to possess and the latter isn't, I think most people would be more grossed out by the second one. (I would even argue that there was more harm to the participants in the making of the second one, and in this case the law's priorities are a bit screwed up. Poor horse!)

So, why block 1% of the content that would offend someone's sensibilities, when 99% of the content that would still offend that person would still be out there? The fact that the 1% is illegal doesn't answer the question; even if it's illegal, you don't have to block it, so what have you accomplished if you do?

Possibly law enforcement is sick of people using the "I accidentally clicked on it" excuse when they get caught accessing child pornography, and wants to remove that as a defense. But couldn't someone just as easily claim that they "accidentally" accessed child pornography through a circumvention site like Anonymouse? They could claim that they thought they were accessing a regular porn site, they were using a circumventor to protect their privacy, and they didn't know that the site carried child porn and didn't find out until they'd already accessed it. So it doesn't seem like the filtering would remove the "accidental" defense.

So, I don't think the filtering accomplishes much at all, but it could set a very bad precedent once the filters are in place. Once Internet users have accepted the precedent that ISPs should block content that is "probably" illegal, what's to stop organizations and lawmakers from demanding that ISPs block access to overseas sites that violate copyright, for example, as the RIAA did in 2002? The technical means will already be in place, and more importantly, people will have gotten used to the idea that legally "questionable" content should be blocked. And with lobbyists claiming that 90% of content on peer-to-peer networks violates copyright laws, wouldn't it follow logically to block peer-to-peer traffic as well?

In a legislative climate where lawmakers have proposed everything from jail time for p2p developers to letting the RIAA hack people's PCs for distributing copyrighted files, we should resist any kind of content-based blocking that would let them get their foot in the door. That includes even well-intentioned efforts like Cleanfeed.

Senator: Illegal Images Must be Reported
Declan McCullagh

Millions of commercial Web sites and personal blogs would be required to report illegal images or videos posted by their users or pay fines of up to $300,000, if a new proposal in the U.S. Senate came into law.

The legislation, drafted by Sen. John McCain and obtained by CNET News.com, would also require Web sites that offer user profiles to delete pages posted by sex offenders.

In a speech on the Senate floor Wednesday, the Arizona Republican and former presidential candidate warned that "technology has contributed to the greater distribution and availability, and, some believe, desire for child pornography." McCain scored 31 of 100 points on a News.com 2006 election guide scoring technology-related votes.

After child pornography or some forms of "obscenity" are found and reported, the Web site must retain any "information relating to the facts or circumstances" of the incident for at least six months. Webmasters would be immune from civil and criminal liability if they followed the specified procedures exactly.

McCain's proposal, called the "Stop the Online Exploitation of Our Children Act" (click for PDF), requires that reports be submitted to the National Center for Missing and Exploited Children, which in turn will forward them to the relevant police agency. (The organization received $32.6 million in tax dollars in 2005, according to its financial disclosure documents.)

Internet service providers already must follow those reporting requirements. But McCain's proposal is liable to be controversial because it levies the same regulatory scheme--and even stiffer penalties--on even individual bloggers who offer discussion areas on their Web sites.

"I am concerned that there is a slippery slope here," said Kevin Bankston, an attorney with the Electronic Frontier Foundation in San Francisco. "Once you start creating categories of industries that must report suspicious or criminal behavior, when does that stop?"

According to the proposed legislation, these types of individuals or businesses would be required to file reports: any Web site with a message board; any chat room; any social-networking site; any e-mail service; any instant-messaging service; any Internet content hosting service; any domain name registration service; any Internet search service; any electronic communication service; and any image or video-sharing service.

Kate Dean of the U.S. Internet Service Provider Association said her members appreciated McCain's efforts to rewrite the current procedures for reporting illegal images, which currently are less than clear.

McCain's proposal comes as concern about protecting children online has reached nearly a fever pitch in Washington. Attorney General Alberto Gonzales gave two speeches recently on the topic, including one on Friday in which he said "we must do all that we can to protect our children from these cowardly villains who hide in the shadows of the Internet."

But the reporting rules could prove problematic for individuals and smaller Web sites because the definitions of child pornography have become relatively broad.

The U.S. Justice Department, for instance, indicted an Alabama man named Jeff Pierson last week on child pornography charges because he took modeling photographs of clothed minors with their parents' consent. The images were overly "provocative," a prosecutor claimed.

Deleting sex offenders' posts
The other section of McCain's legislation targets convicted sex offenders. It would create a federal registry of "any e-mail address, instant-message address, or other similar Internet identifier" they use, and punish sex offenders with up to 10 years in prison if they don't supply it.

Then, any social-networking site must take "effective measures" to remove any Web page that's "associated" with a sex offender.

Because "social-networking site" isn't defined, it could encompass far more than just MySpace.com, Friendster and similar sites. The list could include: Slashdot, which permits public profiles; Amazon.com, which permits author profiles and personal lists; and blogs like RedState.com that show public profiles. In addition, media companies like News.com publisher CNET Networks permit users to create profiles of favorite games, gadgets and music.

"This constitutionally dubious proposal is being made apparently mostly based on fear or political considerations rather than on the facts," said EFF's Bankston. Studies by the National Center for Missing and Exploited Children show the online sexual solicitation of minors has dropped in the past five years, despite the growth of social-networking services, he said.

A McCain aide, who did not want to be identified by name, said on Friday that the measure was targeted at any Web site that "you'd have to join up or become a member of to use." No payment would be necessary to qualify, the aide added.

In this political climate, members of Congress may not worry much about precise definitions. Another bill also vaguely targeting social-networking sites was approved by the U.S. House of Representatives in a 410-15 vote.

And in July, for instance, Congress overwhelmingly approved a bill that made it a federal felony for Webmasters to use innocent words like "Barbie" or "Furby" to trick minors into visiting their sites and viewing sexually explicit material.

Next year, Gonzales and the FBI are expected to resume their push for mandatory data retention, which will force Internet service providers to keep records on what their customers are doing online. An aide to Rep. Diana DeGette, a Colorado Democrat, said Friday that she's planning to introduce such legislation when the new Congress convenes.

Cathy Milhoan, an FBI spokeswoman, said on Friday that the FBI "continues to support data retention. We see it as crucial in advancing our cyber investigations to include online sexual exploitation of children."

In addition, Sen. Chuck Schumer, a New York Democrat, and McCain said that they'll introduce similar legislation dealing with sex offenders and social-networking sites in January.

CNET News.com's Anne Broache contributed to this report

Home Office to Clean Up Sadville?
Andrew Orlowski

British Home Secretary John Reid today vowed to cleanse the internet of Entartete Kunst, or degenerate art.

Reid says he wants "computer generated" images of child abuse prohibited. In the UK, it's illegal to harbour photographs, but legal to harbour artwork of child abuse.

"I am currently consulting cabinet colleagues about how we might ban the possession of computer-generated images of child abuse, including cartoons or other graphic illustrations of children being abused... while it is illegal to distribute these abhorrent images, it is entirely legal to possess them," Reid told the first meeting of the newly-formed Internet Child Safety Task Force.

The move is sure to raise questions that pit self-expression against the desire to clean up the net. We raised a couple of these with the Home Office.

Firstly, would work of artistic merit fall under the guidelines? For example, would an image of one of Jake and Dinos Chapman's sexualized sculptures of children qualify?

And secondly, was the Home Secretary seeking to criminalize role playing gamers?

Bizarre as it is, on the much-hyped VR environment Second Life, some subscribers represent themselves as children, in the expectation of being abused. You can (if you wish) see a "child" being "raped" by an avatar of Star Trek's Lt. Spock, here (http://www.somethingawful.com/index.php?a=4206&p=4).

"It's too early to say whether something will or not be in a law that we haven't started consulting on," a Home Office spokesperson told us. "We're putting together a consultation document - we're just at the starting point."

VA. AG Wants Sex Offenders' Online Names
Michael Felberbaum

Attorney General Bob McDonnell said Monday he will seek legislation requiring convicted sex offenders to register their online identities with the state to help MySpace and other online hangouts more easily block access.

If enacted, Virginia would be the first state to require registration of e-mail addresses and instant-messaging identities on the state's sex offender registry, McDonnell's office said.

"We require all sex offenders to register their physical and mailing addresses in Virginia, but in the 21st century it is just as critical that they register any e-mail addresses or IM screen names," McDonnell said in a news release.

Parents, school administrators and law-enforcement authorities have grown increasingly worried that teens are at risk on MySpace and other social-networking sites, which provide tools for messaging, sharing photos and creating personal pages known as profiles.

MySpace announced plans last week to develop technologies designed to help block convicted sex offenders by checking profiles against government registries, but the News Corp. site's ability to do so is limited by the fact that users do not have to use their real names.

Requiring registrations of e-mail addresses would make matching easier. To guard against offenders registering one address but using another on MySpace, the penalty would be the same as it would be for not registering or for providing incorrect information, which could result in a misdemeanor or felony charge.

There are more than 550,000 registered sex offenders in the United States, including 13,000 in Virginia. McDonnell said e-mail registration requirements are better done at the state level because most prosecutions and convictions for sex offenders are under state jurisdiction.

Hemanshu Nigam, MySpace's chief security officer, applauded the Virginia announcement.

"This legislation is an important recognition that the Internet has become a community as real as any other neighborhood and is in need of similar safeguards," Nigam said.

Nigam said the information would also give law enforcement new tools to "employ against predators who attempt to misuse the Internet to find potential victims."

Donna Rice Hughes, president of the Internet safety group Enough Is Enough and a member of Virginia's Youth Internet Safety Task Force, said that although there's no "silver bullet," the legislation will be a helpful part of the solution.

U.S. Sens. Chuck Schumer, D-N.Y., and John McCain, R-Ariz., last week announced plans for similar federal legislation to apply to those on probation or parole. The Virginia proposal is not limited to those still on probation or parole.

The state proposal stems from discussions with MySpace and the safety task force and is part of a package of proposals the task force will announce Dec. 20.

Regardless of e-mail registration requirements, MySpace is deploying within a month a database that will contain the names and physical descriptions of convicted sex offenders in the United States. An automated system will search for matches between the database and MySpace user profiles. Employees will then delete any profiles that match.

Skeptics say such technologies will address only part of the problem, as much of the danger comes from sexual predators who have never been convicted and thus are not in the databases.

"Most of the people who are molesting children or sexually exploiting children that they encounter online are not registered sex offenders," said Parry Aftab, executive director of WiredSafety.org.

States Use Polygraphs to Monitor Paroled Sex Offenders
Michael Gormley

When Andrew McDaniels, a convicted sex offender in upstate N.Y., was interviewed by a parole officer in September, he faced something new. The parole officer had a laptop computer receiving data from skin sensors on McDaniels. When the parole officer noticed a blip, he asked more pointed questions.

Soon, McDaniels acknowledged he had been around boys near Watkins Glen, parole officials said Monday. More officers followed up in the field and the parolee was accused of violating the condition of his release that requires him to stay away from children. He remains in Schuyler County Jail until a hearing this week, Parole Division spokesman Scott Steinhardt said.

New York is the latest state to require paroled sex offenders to answer questions while hooked to a lie-detecting computer.

The action, by the outgoing Pataki administration, comes just before the legislature will consider civil confinement for the most dangerous sex offenders after they complete their sentences. Gov. George Pataki has called for the legislature to meet Wednesday to pass a civil confinement bill for sex offenders.

Parole officers equipped with the computers ask convicted sex offenders about where they have been and who they have seen to determine whether they might have violated parole. They are also asked if they committed any new crimes.

"It is being used more," said Anna Carol Salter, a Harvard-trained clinical psychologist in Madison, Wis. She lectures on sex offenders and is a consultant to the Wisconsin Department of Corrections, which uses polygraphs for sex offender cases.

"I think it is proving to be effective. You get many, many more admissions by offenders about illegal activities and it also appears to act as a deterrent," she said. "They are often more fearful of lying to a polygraph than they are to a person."

Skin monitors provide data on changes in a subject's skin temperature, moisture and electrical signals sent to the brain. The information is then sent to the computer, where a trained operator does the analysis. Long gone is the stylus hooked up to a paper roller.

Salter said, however, there is a concern. A badly administered test, for example, could yield results that show a parolee is following the rules when he or she isn't. That would lull parole officials into a false sense that all is well. And, she said: "It's easy to do a bad polygraph."

The use of polygraphs for sex offenders, begun in the early 1970s in Oregon, Idaho and Washington, has spread steadily nationwide, said T.V. O'Malley of the American Polygraph Association.

"It's getting more popular as polygraph has cleaned up its act and we became very sophisticated about sex offender results," he said. "The alternative is self-disclosure. And that doesn't work."

In New York, 13 parole officers have been trained to do the tests as part of "Operation Truth or Consequences," state Division of Parole Executive Director Anthony G. Ellis II said Monday. The training, equipment and the cost to dedicate trained officers to conduct the tests is about $1 million this fiscal year, according to the division.

"There are no limits as to what you can ask, but they are trained to gear it in a certain way so you can get what you are looking for," said Angela Jimenez, director of operations at the division. "This group needs tighter control," she said, noting that there is a high rate of recidivism among sex offenders.

Polygraphs are being used on sex offenders in more than two dozen states, sometimes in trial programs, and in Great Britain, according to newspaper accounts. A British pilot program found 85 percent of convicted sex offenders were committing new crimes or violating parole or simply failed the polygraph, according to The Independent of London.

A study by the Colorado Department of Public Safety sponsored by the U.S. Department of Justice found more than half of the sex offenders subjected to polygraph tests were in violation of their supervision rules. As a result, 37 percent were given new treatment plans and 15 percent were returned to court for further action.

The National Association of Criminal Defense Lawyers based in Washington is studying the issue, but has some concerns. For example, supporters say the tests are 90 percent accurate, while detractors say they are only 70 percent accurate. Even at 90 percent, that could mean thousands of innocent men and women would face jail time or further restrictions because of a bad test, said the association's Jack King.

"We don't have a policy yet, but generally you don't want to put somebody's liberty in the hands of a polygrapher," King said.

In May, the 2nd U.S. Circuit Court of Appeals in Albany ruled that lie detector tests can be used on sex offenders, but included safeguards such as limiting questions to information necessary for supervision, case monitoring and treatment.

The appeals court ruling found that polygraph testing "produces an incentive to tell the truth, and thereby advances the sentencing goals."

Virtually Addicted

A lawsuit against IBM is reviving debate over whether Web overuse may be classified as an addiction. The answer will have big implications for business
Catherine Holahan

By his own admission, James Pacenza was spending too much time in Internet chat rooms, in some of them discussing sex. He goes so far as to call his interest in inappropriate Web sites a form of addiction that stems from the posttraumatic stress disorder he's suffered since returning from Vietnam. Whatever it's called, Pacenza's chat-room habit cost him his job.

After 19 years at IBM's East Fishkill plant, Pacenza was fired in May, 2003, after a fellow employee noticed discussion of a sex act on a chat room open on Pacenza's computer. IBM (IBM) maintains that logging onto the Web site was a violation of its business conduct guidelines and a misuse of company property—and that it was well within its rights to terminate Pacenza's employment.

Pacenza and his attorney beg to differ. They filed suit in a New York U.S. District Court in July, 2004, seeking $5 million for wrongful termination. Earlier in the year, Pacenza had admitted to a superior that he had a problem with the Internet at home. Pacenza's attorney, Michael Diederich Jr., alleges that the perception that Pacenza was addicted to the Internet caused IBM to fire first without asking questions or "even attempting to examine the situation." Diederich says there are several steps IBM could have taken, including limiting his Internet use or blocking certain sites. "It's not productive or useful for the employer to unfairly terminate employees," says Diederich.

The case was held up for years due to Pacenza's medical problems and his attorney's service as a military lawyer in Iraq. But it has come back to the fore recently, and IBM on Dec. 8 sought a dismissal of the case, saying it's without merit. On the surface, Pacenza's may appear to be an open-and-shut case. He doesn't deny logging onto the chat room at work, and company policy provides for the termination of employees who access inappropriate Web sites.

Certifying Addiction

But cases like Pacenza's, which involve Internet misuse, may no longer be quite so simple, thanks to a growing debate over whether Internet abuse is a legitimate addiction, akin to alcoholism. Attorneys say recognition by a court—whether in this or some future litigation—that Internet abuse is an uncontrollable addiction, and not just a bad habit, could redefine the condition as a psychological impairment worthy of protection under the Americans with Disabilities Act (ADA).

That in turn would have far-reaching ramifications for how companies deal with workplace Internet use and abuse. For starters, businesses could be compelled to allow medical leave, provide counseling to, or make other accommodations for employees who can't control Internet use, says Brian East, co-chair of the disability rights committee of the National Employment Lawyers' Assn. East says recognizing Internet abuse as an addiction would make it more difficult for employers to fire employees who have a problem. "Assuming it is recognized as an impairment…it is analyzed the same way as alcoholism," says East.

That's a big assumption—and there's intense debate over whether compulsive Internet use should be recognized as an addiction. The American Psychiatric Assn. (APA) doesn't include Internet addiction in the Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, which serves as the basis for many ADA claims related to mental disabilities. Substance abuse, on the other hand, is listed in a special category under substance-use disorders. Internet addiction would not be eligible for inclusion in the manual until nearly 2012, when the next edition is scheduled to be released, according to the APA.

Compulsive Behavior

Whatever the APA stance, several psychiatrists and psychologists already say compulsive Internet overuse can legitimately be called an addiction. Among them is Dr. David Greenfield, an assistant clinical professor of psychiatry at the University of Connecticut School of Medicine and author of the 1999 book Virtual Addiction. He compares compulsive Internet use to alcoholism, drug abuse, or pathological gambling.

Like alcoholics or those who abuse drugs, people who are addicted to the Internet use it to change their mood and feel better, says Greenfield. There are also many who can't stop using it, despite reprimands from work, disputes with family and friends, and other negative effects such as debt due to compulsive Internet shopping or gambling. "It's not surprising that it is not defined yet, because these things change very slowly," says Greenfield. "But when you are in clinical practice and you are dealing with people's lives, you can't wait for those issues to be addressed. There is a huge problem with Internet abuse in the workplace, and you can't pretend that they don't exist because there isn't a label."

In October, researchers at Stanford University's medical school released a study showing that a significant number of Americans show addiction symptoms with regard to the Internet. Some 14% reported that it was hard to stay away from the Internet for a several-day stretch. More than 12% said they stayed online longer than intended and nearly 9% said they hid their Internet use from loved ones or employers. Roughly 6% said relationships had suffered due to excessive Internet use.

Dr. Elias Aboujaoude, director of Stanford's Impulse Control Disorders Clinic, which conducted the study, says there are clear similarities between excessive Internet use and other addictions. "People are very secretive, people will tell me that they feel restless when they go for a whole afternoon without checking e-mail, there is mounting anxiety when they try to cut back on their online use," says Aboujaoude. However, he stops short of calling it an addiction. The clinic is designing a more rigorous study aimed at determining whether Internet abuse is an addiction and not just a bad habit, or a manifestation of another addiction or psychological problem. "Based on our studies there are definitely red flags and there are things that should be followed up on. But until that is done, you are not going to find a serious researcher calling this Internet addiction," says Aboujaoude. "It's too early to coin a new term 'Internet addiction.'"

Treatment Options

Not according to psychologist Kimberly Young, founder of the Center for Internet Addiction Recovery in Bradford, Pa. She says that the U.S. lags behind other countries in its recognition of compulsive Internet use as a legitimate addiction worthy of specialized treatment. Korea, for example, has launched the Centre for Internet Addiction Prevention & Counseling in response to what the government sees as the growing problem of Internet addicts in its highly wired society. In October, a 24-year-old died after playing an online game nonstop for 86 hours (see BusinessWeek.com, 9/11/06, "Online Gaming: Korea's Gotta Have It"). "They have been able to move faster than we have in America," says Young of the Korean government. "They have a lot of government funding to put together these clinics."

China also recognizes Internet addiction as a legitimate problem. Chinese employers can send workers to a two-week rehabilitation clinic for Internet issues. Besides counseling, the clinic provides regimented exercise and medical treatment to help people become healthy and redirect their energy.

U.S. companies ought to wake up to the problem in order to avoid lost productivity from workers and liability for unjust termination or disciplinary action regarding the Internet. "If you have something like the Americans with Disabilities Act, which recognizes many addictions as a disability, it is not a stretch to see that people who are getting in trouble with the Internet are going to see it as a legitimate addiction and sue," says Greenfield. "It is only a matter of time before one of these suits is successful."

Just how many suits are coming down the pike isn't clear, and Pacenza's is among the earliest to weave Internet addiction into a wrongful termination suit. There have been several other legal battles relating to presumed Internet addiction, though often those involve online games or chat rooms that parents say contribute to a child's problems.

Workplace Prevention

Even as the debate rages on within the medical community and increasingly in the courts, some businesses are taking steps to combat Internet addiction beyond implementing Internet-use policies. Young, author of Caught in the Net, says she regularly speaks to companies about Internet addiction. "They want to deal with the problem of abuse and minimize that as much as they can," she says. Young says she sees everyone from IT professionals obsessed with Web surfing, to administrative assistants glued to eBay (EBAY), to self-employed lawyers who are missing deadlines because of a fixation with Internet porn. Still, most companies are leery of treating Internet abuse as an addiction. "Overall companies are still a little hesitant to look at it as an addiction," says Young. "But if they look at the costs, it makes more sense than just firing people."

Employers try to alert employees to the potential of the problem, by paying for talks or literature, in order to avoid problems such as lost productivity, too much demand on company bandwidth, and sexual-harassment claims from employees who see objectionable material on a colleague's computer. However, some businesses are concerned enough about the cost of replacing otherwise good employees that they send employees to rehabilitation clinics.

When it comes to Internet overuse, some companies are finding the best cure isn't firing, but preventive medicine. Some limit Internet access to only those employees who need it to do their jobs. And they are spending money on filtering and blocking software to keep employees from surfing the Web for personal use.
Sensible Limits

Continental Airlines (CAL) acknowledges it's impossible to ban all personal use of the Web at work. Louis Obdyke, Continental's managing attorney for labor and employment issues, says the company lets employees occasionally surf the Web, shop, bank, or do other activities online—providing it doesn't interfere with productivity. "It's pretty much under a rule of reason," says Obdyke. "If you get your work done and you go on the Internet during the workday, we wouldn't see that as a problem."

When Internet use causes work to suffer, stiffer measures are taken. And an employee who can't improve or who visits adult or pornographic sites while at work is susceptible to firing. As for whether Internet abuse is comparable to other disorders such as alcoholism, Obdyke is clear: "We don't recognize this Internet addiction idea."

Depending on the outcome of Pacenza's case and others likely to follow, companies like Continental may have to.

Report: Wi-Fi Demand Up 25 Pct. in '06
Jessica Mintz

Demand for microchips that help laptops, video game consoles and other gadgets connect wirelessly to the Internet pushed higher in 2006, a trade group said Monday.

But early versions of the upcoming "n" generation of wireless laptop cards and routers didn't catch on.

Global shipments of the wireless chips are expected to grow 25 percent to 200.9 million by the end of the year, compared with 160.9 million in 2005, according to figures from the Wi-Fi Alliance industry association and In-Stat, a Scottsdale, Ariz.-based research group owned by Reed Elsevier Group PLC.

Chips for Wi-Fi-enabled laptops and routers continued to make up the bulk of the category, about 75 percent in 2006.

While shipments of chips used in consumer electronics such as the Nintendo Wii video game console and Microsoft Corp.'s new Zune portable digital music player weren't enough to boost full-year figures significantly, fourth-quarter shipments indicate this category is poised for growth, according to Karen Hanley, senior marketing director of the Austin, Texas-based Wi-Fi Alliance.

Wireless chips for portable consumer electronics, which includes hand-held video games and the Zune, made up about 15 percent of shipments in 2006, down from 17 percent in 2005, In-Stat data show. Chips for stationary consumer electronics like video game consoles accounted for about 10 percent of shipments, up from 8 percent last year.

Cell phones that can use a Wi-Fi connection are also expected to take off. Data and projections from In-Stat show shipments of chips bound for dual-mode phones to grow from less than 1 percent this year to 5 percent next year, to nearly a quarter of the market in 2010.

This year, manufacturers also started shipping a new generation of chips that promised greater speed and longer reach, even though the body that governs wireless standards has yet to settle on a final recipe for the so-called 802.11n products.

Shipments of the pre-standard "n" wireless chips made up just 4 percent of the market in 2006, according to In-Stat, while the dominant "g" variety held on to a 55 percent share.

Chips that combine the older "a" technology with "g" made the biggest splash this year, taking 25 percent of chip shipments in 2006 compared with 9 percent in 2005.

Ultrawideband Legal in EU Within Six Months
David Meyer

High-bandwidth, short-range wireless technology finally gets the Euro nod

Ultrawideband is to be legalised across Europe within the next six months, ZDNet UK has learned.

The short-range, high-bandwidth technology — which promises speeds of up to 1Gbps — has until now been illegal outside the US. Its status has now been reversed at a meeting on the 4th and 5th December of the Radio Spectrum Committee (RSC), a European Commission body which can mandate spectrum usage across the continent.

Ofcom's chief technologist, Professor William Webb, told ZDNet UK on Friday that the UK regulator was "delighted" at the approval of ultrawideband (UWB). He pointed out that if the RSC approves a document "it automatically becomes EC law" and said the decision to mandate acceptance of UWB across all European states within the next six months was taken at an RSC meeting earlier this week. Although no officials from the RSC were prepared to comment on the record, sources close to the deliberations confirmed that the decision had been taken.

"We think it's important to allow as many technologies to be tried in the marketplace as possible," said Webb, adding that UWB "has some potentially unique characteristics".

Ultrawideband uniquely combines very low power across bands many gigahertz wide to reuse frequencies allocated to other users without causing significant interference. The technology, which operates at ranges of up to 10 metres and was developed by companies such as Intel, Texas Instruments, HP and Nokia, is most widely marketed in the US by the WiMedia Alliance. The Federal Communications Commission in the US only allows UWB under strict conditions that limit how much power it can radiate across the bands it covers — typically less than the normal noise emitted by ordinary, non-wireless electronic equipment.

Ofcom said in March that it would impose even tighter restrictions on UWB. The regulator also told ZDNet UK at the time that it was predicting an announcement on the availability of UWB by the end of this year.

On Friday, sources confirmed to ZDNet UK that the restrictions put forward by the EC would indeed be more rigorous than those imposed in the US, although they would not be so restrictive as to make it impossible for some global harmonisation of UWB devices — a stance which would have angered the manufacturers of such equipment.

It is understood that the committee decision to allow UWB was based on a far from unanimous majority, with some Scandinavian countries and France opposing the proposal. UWB opponents are mostly established band users who claim that high densities of UWB usage will raise the interference level enough to affect their existing and future services. However, tests in the US have not found any plausible scenarios where such interference is a significant factor.

The decision still has to be formally approved by the EC, and an announcement is expected within the next few months. This delay is not expected to prevent manufacturers currently developing UWB products from preparing them for European availability.

Survey: Weather Updates Popular Via Cell
Bruce Meyerson

A greater percentage of cell phone Internet users visit popular weather and sports Web sites compared with people who go online via computer, according to survey findings by MobileWeb Metrix.

Though mobile Web usage still represents a tiny fraction of all online activity, the findings may suggest certain types of information and services are seen as more popular or critical on wireless devices.

AccuWeather.com, for example, was accessed by cell phone browser among 7.5 percent of the roughly 4,000 survey respondents who identified themselves as wireless Web users in September. By contrast, among regular computer-based Web users, only 1.7 percent said they visited AccuWeather.com, according to MobileWeb Metrix, a joint venture between Telephia Inc. and comScore Networks.

Web usage patterns were similar for two other leading sources of weather information: At Weather.com, the online outpost of The Weather Channel and a unit of Landmark Communications Inc., wireless use came to 22.1 percent of mobile Web users vs. 12.7 of computer-based users. About 9 percent of the mobile Web users accessed Yahoo Inc.'s weather service, while queries from desktop users numbered 5.7 percent.

Mobile usage of ESPN.com, a unit of Walt Disney Co., provided a similar contrast: 17.9 percent to 9.4 percent, respectively.

From April

Print Me a Heart and a Set of Arteries
Peter Aldhous

SITTING in a culture dish, a layer of chicken heart cells beats in synchrony. But this muscle layer was not sliced from an intact heart, nor even grown laboriously in the lab. Instead, it was "printed", using a technology that could be the future of tissue engineering.

Gabor Forgacs, a biophysicist at the University of Missouri in Columbia, described his "bioprinting" technique last week at the Experimental Biology 2006 meeting in San Francisco. It relies on droplets of "bioink", clumps of cells a few hundred micrometres in diameter, which Forgacs has found behave just like a liquid.

This means that droplets placed next to one another will flow together and fuse, forming layers, rings or other shapes, depending on how they were deposited. To print 3D structures, Forgacs and his colleagues alternate layers of supporting gel, dubbed "biopaper", with the bioink droplets. To build tubes that could serve as blood vessels, for instance, they lay down successive rings containing muscle and endothelial cells, which line our arteries and veins. "We can print any desired structure, in principle," Forgacs told the meeting.

Other tissue engineers have tried printing 3D structures, using modified ink-jet printers which spray cells suspended in liquid (New Scientist, 25 January 2003, p 16). Now Forgacs and a company called Sciperio have developed a device with printing heads that extrude clumps of cells mechanically so that they emerge one by one from a micropipette. This results in a higher density of cells in the final printed structure, meaning that an authentic tissue structure can be created faster.
“When layers of chicken heart cells were printed they quickly begin behaving as they would in a real organ”

Cells seem to survive the printing process well. When layers of chicken heart cells were printed they quickly begin behaving as they would in a real organ. "After 19 hours or so, the whole structure starts to beat in a synchronous manner," says Forgacs.

Most tissue engineers trying to build 3D structures start with a scaffold of the desired shape, which they seed with cells and grow for weeks in the lab. This is how Anthony Atala of Wake Forest University in Winston-Salem, North Carolina, and his colleagues grew the bladders which he successfully implanted into seven people (New Scientist, 8 April 2006, p 10). But if tissue engineering goes mainstream, faster and cheaper methods will be a boon. "Bioprinting is the way to go," says Vladimir Mironov, a tissue engineer at the Medical University of South Carolina in Charleston.

So This Manatee Walks Into the Internet
Jacques Steinberg

The skit, as scripted for the Dec. 4 installment of “Late Night With Conan O’Brien,” was about absurdist college sports mascots that the host and his writers would like to see someday.

Among them were “the Boise State Conjoined Vikings,” who had been born locked at the horns, as well as something Mr. O’Brien called “the Webcam manatee” — said to be the mascot of “F.S.U.” — which was basically someone in a manatee costume rubbing himself or herself provocatively in front of a camera (to the tune of the 1991 hit “I Touch Myself”). Meanwhile a voyeur with a lascivious expression watched via computer.

Who knew that life would soon imitate art.

At the end of the skit, in a line Mr. O’Brien insists was ad-libbed, he mentioned that the voyeur (actually Mark Pender, a member of the show’s band) was watching www.hornymanatee.com. There was only one problem: as of the taping of that show, which concluded at 6:30 p.m., no such site existed. Which presented an immediate quandary for NBC: If a viewer were somehow to acquire the license to use that Internet domain name, then put something inappropriate on the site, the network could potentially be held liable for appearing to promote it.

In a pre-emptive strike inspired as much by the regulations of the Federal Communications Commission as by the laws of comedy, NBC bought the license to hornymanatee.com, for $159, after the taping of the Dec. 4 show but before it was broadcast.

By yesterday afternoon hornymanatee.com — created by Mr. O’Brien’s staff and featuring images of such supposedly forbidden acts as “Manatee-on-Manatee” sex (again using characters in costumes) — had received approximately 3 million hits, according to NBC. Meanwhile several thousand of Mr. O’Brien’s viewers have also responded to his subsequent on-air pleas that they submit artwork and other material inspired by the aquatic mammals, and the romantic and sexual shenanigans they imagine, to the e-mail address conan@hornymanatee.com.

One viewer sent a poem. Mr. O’Brien asked James Lipton, the haughty host of “Inside the Actors Studio” on Bravo, to read it on “Late Night.” It included the lines: “I want to freak thy blubber rolls,” and “The product of our ecstasy will be half man and half a-’tee.” After that a curtain opened, and Mr. Lipton gamely danced with the manatee character. Another viewer wrote a song, which Mr. Pender, the band’s trumpet player, crooned to the character. Set to the heavy metal band AC/DC’s “You Shook Me All Night Long,” it included the lyrics “She had big black eyes/no discernible thighs” and “The waves start shakin’/the ocean was quakin’/my pelvis was achin’. ”

Reached by telephone at NBC yesterday, Mr. O’Brien said he was stunned and overwhelmed by the viewers’ response to what had initially been a throwaway line, and by what that response, collectively, suggested about how the digital world was affecting traditional media like television.

“We couldn’t have done this two years ago, three years ago,” Mr. O’Brien said. “It’s sort of this weird comedy dialogue with the audience.”

He added, “I still have an abacus.”

Regardless, Mr. O’Brien and his staff are digitally savvy enough to seize an opportunity when it presents itself, particularly in the aftermath of such Internet comedy phenomena as “Lazy Sunday,” a filmed clip from “Saturday Night Live” that drew large audiences on the Web last year, initially as a bootleg. After the taping of the Dec. 4 show, Mr. O’Brien said the show’s executive producer, Jeff Ross, informed him of the problem, then asked him whether he wanted to mute the mention of the site or buy the Web address.

“We didn’t want to take it out,” Mr. Ross said yesterday, “so we bought it.”

In explaining to the audience the next night what he and his writers had done, Mr. O’Brien marveled, “For $159, NBC, the network that brought you ‘Meet the Press,’ Milton Berle and the nation’s first commercial television station became the proud owner of www.hornymanatee.com.”

Now, by clicking on “tour,” visitors to the site are drawn into a netherworld of mock-graphic images with titles like “Mature Manatee” (with a walker of course) and “Fetish” (a manatee in a bondage costume) as well as dozens of viewer submissions, including “Manatee & Colmes,” a spoof of “Hannity & Colmes” on Fox News.

Mr. O’Brien said he knew he was on to something when, on Wednesday night, he was at a Christmas party in the lobby of a friend’s building and a waiter approached him with a platter of salmon and toast points. When Mr. O’Brien politely declined, he said the waiter drew in close and whispered in his ear, “My compliments to the horny manatee.”

As he prepared last night’s show, Mr. O’Brien said he was planning to give the bit its first night off, although he was confident it would soon return.

“We don’t want the entire show to be ‘Late Night With Horny Manatee,’ ” he said. “Though, of course, it will become that eventually.”

The Decline (and Maybe Demise) of the Professional Photojournalist
Dan Gillmor

The rise of the citizen journalist is not a new phenomenon. People have been witnessing and taking pictures of notable events for a long, long time. And they’ve been selling them to traditional news organizations just as long.

But professional photojournalists, and more recently videographers, have continued to make good livings at a craft that helps inform the rest of us about the world we live in. That craft has never been more vibrant, or vital. But the ability to make a living at it will crumble soon.

The pros who deal in breaking news have a problem. They can’t possibly compete in the media-sphere of the future. We’re entering a world of ubiquitous media creation and access. When the tools of creation and access are so profoundly democratized, and when updated business models connect the best creators with potential customers, many if not most of the pros will fight a losing battle to save their careers.

Let’s do a little time travel.

This movie camera captured the most famous pictures in the citizen-media genre: the assassination of President John F. Kennedy in Dallas, Texas on November 22, 1963. Abraham Zapruder, the man pointing the camera that day in Dealey Plaza, sold the film to Life Magazine for $150,000 — about half a million dollars in today’s currency.

In Dealey Plaza that day, one man happened to capture a motion picture — somewhat blurred but utterly gruesome nonetheless — of those terrible events. Zapruder’s work, by any standard we can imagine, was an act of citizen journalism.

Now consider what media tools people carry around with them routinely today — or, better yet, consider what they'’l have a decade from now. And then take yourself, and those tools, back to 1963.

Dozens or hundreds of people in Dealey Plaza would have been capturing high-definition videos of the assassination, most likely via their camera-equipped mobile phones as well as devices designed to be cameras and little else. They’d have been capturing those images from multiple perspectives. And — this is key — all of those devices would have been attached to digital networks.

If soon-to-be-ubiquitous technology had been in use back in 1963, at least several things are clear. One is that videos of this event would have been posted online almost instantly. Professional news organizations, which would also have had their own videos, would have been competing with a blizzard of other material almost from the start — and given traditional media’s usually appropriate reluctance to broadcast the most gruesome images (e.g. the Nick Berg beheading in Iraq), the online accounts might well be a primary source.

(Less germane to the topic here, we’d also soon have a three-dimensional hologram of the event, given the number of cameras capturing it from various angles. And we’d probably know for sure whether someone was shooting at the president from behind that famous grassy knoll.)

Consider, as well, how we might remember the horror of September 11, 2001 under similar circumstances. Recall that people inside the World Trade Center towers and on the four hijacked airplanes were making mobile-phone calls to loved ones, colleagues and authorities. Suppose they had been sending videos of what was going on inside those buildings and planes to the rest of us? The day’s events would go into history with even grimmer — and even more human — detail.

Now consider another famous picture, the one at the left. It’s the single image that we will most remember from the July 2005 bombings in London. It was taken by Adam Stacey inside the Underground (subway), as he and others escaped from a smoky train immediately after one of bombs exploded.

Again, the production values of the image are hardly professional. But that doesn’t matter. What does matter is the utter authenticity of the image, made so by the fact that the man was there at the right time with the right media-creation gear.

In a world of ubiquitous media tools, which is almost here, someone will be on the spot every time.

And there will be business models and methods to support their work.

Today, YouTube is the site of choice for all kinds of videos, including newsworthy ones such as the recent abuse-by-taser of the student at the University of California, Los Angeles (more than 764,000 viewings as of today), and the racist nightclub rantings of Michael “Kramer” Richards (more than 1.2 million viewings). Both were captured by mobile-phone video cameras.

Others will make their way to sites like the newly announced projects such as YouWitness News (a joint project of Yahoo and Reuters), or operations like Scoopt or NowPublic. They and other companies want to be aggregators of, and in some cases brokers for, citizen-created media. (Disclosures: I am teaching a class with Yahoo’s editorial director, and I’m an advisor to NowPublic.)

If reputable photojournalists face big changes, so do the paparazzi who capture celebrities’ public (and sometimes private) doings. Bild, the trashy German tabloid, asks its Leser-Reporters to send in their own pictures — and pays handsomely. (I’ve been told, but haven’t verified, that some of the professional paparazzi are submitting photos this way, because they can make more money than through traditional dealings with the newspaper.)

The business part of this is important. I’m highly skeptical of business models, typically conceived by Big Media Companies, that tell the rest of us: “You do all the work, and we’ll take all the money we make by exploiting it.” This is not just unethical.. It’s also unsustainable in the long run.

Not every person who captures a newsworthy image or video necessarily wants to be paid. Stacey’s picture was widely distributed, including onto the front pages of many newspapers, in part because he put it out under a Creative Commons license allowing anyone else the right to use it in any way provided they attribute the picture to its creator. There were misunderstandings (including at least one use by a photo agency that apparently claimed at least partial credit for itself), but the licensing terms almost certainly helped spread it far and wide in a very short time.

The problems this trend will create are not trivial. One is that democratized media tools also include easy and cheap ways to fake or alter reality.

The picture at right circulated widely around the Net after Sept. 11. It purportedly shows an airliner about to hit a World Trade Center tower, with an unlucky tourist having his picture taken just before the moment of impact. The photo is fake — a composite created by a not-so-funny prankster. It was quickly debunked (see this Snopes urban-legends page, for example), but not before a lot of people were initially fooled. Some who saw the “photo” are probably still believing it was authentic.

To weed out the phony stuff, we’ll need to combine traditional means of verification with new kinds of reputation systems. It won’t be easy, but the need for such methods is plain enough.

So, back to our friends, the professional photo or video journalists. How can people who cover breaking news for a living begin to compete? They can’t possibly be everywhere at once. They can compete only on the stories where they are physically present — and, in the immediate future, by being relatively trusted sources.

But the fact remains, there are far more newsworthy situations than pro picture takers. In the past, most of those situations never were captured. Not any longer.

Is it so sad that the professionals will have more trouble making a living this way in coming years? To them, it must be — and I have friends in the business, which makes this painful to write in some ways.

To the rest of us, as long as we get the trustworthy news we need, the trend is more positive.

Remember, there was once a fairly healthy community of portrait painters. When photography came along, a lot of them had to find other work; or at least their ranks were not refilled when they retired. Professional portrait photographers, similarly, are less in demand today than a generation ago. But portraits have survived — and thrived.

The photojournalist’s job may be history before long. But photojournalism has never been more important, or more widespread.

Researchers Developing Anti-Fraud Tool
Joe Mandak

Carnegie Mellon University researchers are relying on an old adage to develop anti-fraud software for Internet auction sites: It's not what you know, it's who you know.

At sites like eBay, users warn each other if they have a bad experience with a seller by rating their transactions. But the CMU researchers said savvy fraudsters get around that by conducting transactions with friends or even themselves, using alternate user names to give themselves high satisfaction ratings - so unsuspecting customers will still try to buy from them.

The CMU software looks for patterns of users who have repeated dealings with one another, and alerts other users that there is a higher probability of having a fraudulent transaction with them.

"There's a lot of commonsense solutions out there, like being more careful about how you screen the sellers," said Duen Horng "Polo" Chau, the research associate who developed the software with computer science professor Christos Faloutsos and two other students. "But because I'm an engineering student, I wanted to come up with a systematic approach" to identify those likely to commit fraud.

The researchers analyzed about 1 million transactions involving 66,000 eBay users to develop graphs - known in statistical circles as bipartite cores - that identify users interacting with unusual frequency. They plan to publish a paper on their findings early next year and, perhaps, market their software to eBay or otherwise make it available to people who shop online.

Catherine England, an eBay spokeswoman, said the company was not aware of the research and would not comment on it. But England said protecting the company's more than 200 million users from fraud was a top priority.

Online auction fraud - when a seller doesn't deliver goods or sells a defective product - accounted for 12 percent of the 431,000 computer fraud complaints received last year by Consumer Sentinel, the Federal Trade Commission's consumer fraud and identity theft database. Auction fraud was the most commonly reported computer-related fraud in the database.

And the scams run the gamut.

Last year, a federal grand jury indicted an Ohio man on charges he sold hundreds of thousands of dollars of stolen Lego merchandise on the Internet. Earlier this year, a New Mexico woman was sentenced to nine years in federal prison for selling forged hunting licenses on eBay, over the phone and by e-mail, and then not delivering trips paid for by out-of-state hunters.

Earlier this month, a man who failed to deliver tickets to the 2005 Ohio State-Michigan football game to 250 online auction customers was sentenced to 34 months in federal prison.

Johannes Ullrich, an Internet fraud expert with the SANS Institute in Bethesda, Md., said the CMU research "sounds like a credible way to detect fraud."

"Essentially, what they're trying to do is find these extended circles of friends who make positive recommendations to each other," said Ullrich, the chief technology officer of SANS' Internet Storm Center, which tracks viruses and other Internet problems.

But Ullrich said the CMU researchers must find a way to screen out false positives. He said a small group of users - such as baseball card collectors - might repeatedly buy from one another and could be flagged as high-risk.

Faloutsos said the researchers have thought of that in developing the software called NetProbe - short for Network Detection via Propagation of Beliefs.

"We're not just looking at your neighbors (on the auction site)," Faloutsos said. "We're looking at the neighbors of your neighbors, and the neighbors of your neighbors' neighbors."

How Much Will Windows Security Matter?
Brian Bergstein

Microsoft Corp. took great pains to improve security in its newly released computer operating system, Windows Vista, redesigning it to reduce users' exposure to destructive programs from the Internet. Outside researchers commend the retooled approach - yet they also say the changes won't make online life much safer than it is now.

Why not? Partly because of security progress that Microsoft already had made in its last operating system, Windows XP. Also because a complex product like Vista is bound to have holes yet to be discovered. And mainly because of the rapidly changing nature of online threats.

Sure, Microsoft appears to have fixed the glitches that used to make it easy for viruses, worms and other problems to wreck PCs. But other avenues for attack are always evolving.

"Microsoft has made the core of the operating system more secure, but they've really solved, by and large, yesterday's problems," said Oliver Friedrichs, director of emerging technologies at antivirus vendor Symantec Corp.

That claim would not please Microsoft, which touts Vista's improved security as a big reason why companies and consumers will want to upgrade to the new operating system.

In fact, Microsoft's effort to tighten security in Vista was one reason the software was delayed past the crucial holiday shopping season. It's now available for businesses and will be available to consumers Jan. 30.

"It is an incremental improvement - it is a reasonably large increment," said Jon Callas, chief technology officer at PGP Corp., a maker of encryption software. "I don't think it's a game-changer."

Some of Vista's security enhancements require computers with the latest microprocessors - which are known as 64-bit chips, in reference to how much data they process at once. That won't improve things on today's standard 32-bit computers, which will stick around for a long time.

However, most of the improvements are available in all editions of Vista, including a stronger firewall and a built-in program known as Defender that alerts users if Vista believes spyware is being installed.

"Windows is going to talk to you a lot more and make sure you're a lot more aware of what you're doing," said Adrien Robinson, a director in Windows' security technology unit. "It's going to help consumers be more savvy."

One of Vista's biggest changes is more control over computer management. With previous versions of Windows, users were given by default great control over the computer's settings - a situation that opened the door to nefarious manipulation by outsiders. The Week in Review is edited and published by Jack Spratts. In Vista, users are prompted to supply a password when they make significant changes - a security feature long available on Apple Computer Inc.'s Macintosh and computers running the Linux operating system.

At the same time, the software gives corporate PC administrators new security powers, such as the ability to turn off the USB ports that employees might use to remove data or bring in troublesome programs on flash drives. (Some network administrators had told Microsoft they were so desperate to stop that practice that they were filling the PC ports with glue.)

Even with all the changes, Vista does not promise a total cure for security headaches. Microsoft, after all, is also selling security add-ons, competing more directly with antivirus companies than in the past.

"Rather than having all the doors unlocked, you now have locks on the doors. It doesn't mean it's a silver bullet," Robinson said. "If they really wanted to get in, they could get through. They could throw a rock through the window. But it's harder. Our goal is to make it harder, to raise the bar."

Still, when Vista for businesses was launched in New York on Nov. 30, Microsoft CEO Steve Ballmer promised a "dramatic" drop in "the number of vulnerabilities that ever present themselves."

If so, that would spare Microsoft from a repeat of the embarrassing series of "critical" security patches it had to release for the previous operating system.

But it might not mean much against many threats Web surfers face today.

For one thing, the kinds of large-scale, automated worms that Vista purportedly will hinder have been waning anyway, according to security analysts. Symantec's Friedrichs said 2006 hasn't seen any worms as prevalent as the kinds that caused widely publicized PC outages several years ago, with names like Slammer and Blaster.

That's partly because of enhancements Microsoft already made in Service Pack 2, a huge set of patches for Windows XP that were released in 2004.

"If you're looking at two versions, XP Service Pack 2 versus Vista, I'm going to say to the average user they're both going to offer them good security," said Michael Cherry, an analyst at Directions on Microsoft. "Is Vista better? I don't know if it's that substantially better."

Security experts say malicious hackers have largely moved away from outage-causing attacks, motivated by publicity or pride, in favor of more targeted and lucrative thefts of users' data. Those attacks tend to exploit flaws in Web applications or employ "social engineering" - such as tricking people with phony e-mails into giving up passwords.

"From that perspective, Vista is a non-event," said John McCormack, a senior vice president at security vendor Websense Inc.

To its credit, Microsoft is fighting such "phishing" attacks by configuring its new Internet Explorer 7 Web browser to alert users if they're visiting a dicey-seeming Web site. Internet Explorer 7 is already available for free download.

But IE7's phish-catching method alone is limited: It is based on a "black list" of sites known to be up to no good. Outside security experts say that will not stop the increasingly savvy attackers who constantly morph their tactics, sometimes every few hours.

For example, Websense recently tracked a phishing attack that mimicked a customer service message from Amazon.com. It passed through most spam filters, and the phony Web site to which it directed victims changed throughout the day. For at least the first few days, IE7 hadn't caught up to block it, McCormack said.

Perhaps one indication that security in the Vista era will be better but far from perfect came in recent research by Sophos PLC.

The security software company determined that three of the 10 most prevalent malicious worms circulating on the Internet in November were able to run on Vista.

Impressively, the e-mail program that comes with Vista - Windows Mail, formerly called Outlook Express - successfully found and blocked the malware. But Web-based e-mail services let it through, said Sophos security analyst Ron O'Brien.

For O'Brien, that finding showed that while Microsoft's efforts to upgrade computer security are praiseworthy, there's only so much the company can do. Not only are Microsoft's hands tied when it comes to the security of third-party applications, but the company also is limited in what it can do with its own software.

For example, McCormack said Microsoft might have done more to prevent criminals from surreptitiously placing keystroke-monitoring programs on computers to steal data. But the fix likely would have shut out legitimate programs as well, such as those that let people operate their PCs remotely.

"You have to find this happy medium between usability and security," McCormack said.

Of course, with Vista on a tiny fraction of desktops today, it's way too early to assess how much hackers can mess with it.

"I don't know how long Microsoft is going to be able to claim the streets are safe before a criminal decides to challenge that opinion," O'Brien said. "That's going to just be a matter of time."

Study Shows One in Twenty-Five Search Results are Risky
Jeremy Reimer

Security researcher Ben Edelman has revisited his May 2006 report on the relative risk of search engine results. In the original report, Edelman found that 5 percent of the results provided by search engines were marked as either "red" or "yellow" by SiteAdvisor, indicating that they presented some risk to the user. Now, Edelman says that his new study has shown that only 4.4 percent of such sites are risky, representing a drop of 12 percent since May.

SiteAdvisor is a service provided by antivirus vendor McAfee that rates sites based on their affiliation with spyware, viruses, excessive pop-up advertisements, and junk e-mail. Edelman used the tool to run 2,500 popular keywords through several search engines, including Yahoo, MSN Search (now Windows Live Search), AOL Search, Ask.com, and of course Google.

The study found that not only can regular links found by search engines be dangerous, the sponsored links that appear in prominent positions in the results pages can also be harmful. In fact, in the May study, sponsored links were more than twice as likely to be linked to malware than non-sponsored links (8.5 vs. 3.1 percent).

What this data indicates is that search engine companies are not doing a very good job of filtering out the types of companies they are willing to sell advertising to. Some sites, such as Google, will sell advertising on an automatic basis to anyone with a credit card, without a single human present during the entire interaction. Google, for their part, states that they are working hard to eliminate fradulent links, and have started flagging links to sites that they deem risky, although this applies only to their unsponsored links.

What can web surfers do to combat these threats? Many of the malware-infested web sites attempt to use security holes in the operating system to install their payload, so keeping your computer's OS updated is paramount. Updated browsers such as Firefox 2, Opera 9, and Internet Explorer 7 contain extra security protections to protect against bad links, including phishing scams, which are quickly becoming the most popular form of online attacks as they do not require an unpatched system or even a particular operating system in order to work. As always, skeptical computing is the order of the day.

Worm Hits Computers' Antivirus Program

A computer worm is attacking some business PCs through a flaw in antivirus software by Symantec Corp., a security company warned Friday.

EEye Digital Security, based in Aliso Viejo, Calif., said the worm, dubbed ''Big Yellow,'' began attacking some computer systems on Thursday -- seven months after eEye first discovered the flaw.

Symantec released a patch to address the flaw in May, but it's up to its corporate customers to install it. Officials at the Cupertino, Calif.-based security software company said Friday it had so far received three reports of systems affected by the worm.

''It is definitely a new worm, and it is looking for vulnerable systems, but we're not seeing any evidence of a significant outbreak or infection,'' said Vincent Weafer, a senior director at Symantec's security response unit.

Big Yellow enters machines through a security hole in the corporate version of Symantec's antivirus software. Once infected with the worm's ''bot'' program, a hacker can use it as a way to connect with other computers for malicious attacks.

EEye urged corporate information-technology departments to fix the flaw.

Personal Data Hacked at Texas College

Hackers might have obtained the personal information of 6,000 people who worked for, applied to or attended the University of Texas at Dallas, school officials said Wednesday.

The information includes names and Social Security numbers, the school said. In some cases, addresses, e-mail addresses and telephone numbers also might have been obtained.

There is no indication that the information has been distributed or used, school officials said.

The information suspected of being exposed belongs to staff and faculty members employed from January 1999 through August 2005, and to students and faculty members of the Erik Jonsson School of Engineering and Computer Science. Applicants to the Jonsson school dating to 1993 also were affected.

The school discovered the intrusion Sunday, officials said. The university has been contacting affected people.

On Tuesday, the University of California, Los Angeles alerted about 800,000 current and former students, faculty and staff that personal information was exposed after a hacker broke into a computer system.

Information of Insurance Members Taken in Theft

Computer records containing personal information of about 130,000 members of Connecticut-based health insurer Aetna Inc. were stolen from the office of a vendor, the company said.

A lockbox stolen during an Oct. 26 break-in at Concentra Preferred Systems contained computer backup tapes of medical claim data, Aetna spokeswoman Cynthia Michener said Tuesday.

It's unlikely the culprits were trying to obtain information needed to commit identity theft because cash, DVD players and other items also were stolen, authorities said.

"We believe the likelihood of anyone successfully accessing or compromising the data to be low," Michener said.

Accessing information from the backup tapes, which cannot be used on a standard personal computer, would require commercial equipment and special software packages, Concentra Preferred Systems said.

The Naperville, Ill.-based company provides claims cost management services to health insurance carriers and health maintenance organizations.

The stolen data included information on 19,000 Aetna members in Ohio and several other Concentra clients, Michener said.

Concentra officials declined to say which clients were involved, citing confidentiality concerns.

Hartford, Conn.-based Aetna, one of the nation's largest health insurers, plans to notify members and providers who could be affected and offer them free credit monitoring services for a year.

Stolen Boeing Laptop Held ID Data on 382,000

Former Boeing employees, some retirees could be at risk of ID theft after a notebook goes missing.
Dawn Kawamoto

Boeing has confirmed that a laptop stolen from an employee's car contained sensitive information on 382,000 workers and retirees.

It is third such incident at the aircraft giant in the past 13 months. The laptop contained names, home addresses, phone numbers, Social Security numbers and dates of birth for current and former Boeing employees, company spokesman Tim Neale said. The theft potentially puts the individuals at risk for identity theft.

Despite the large number of people affected by the theft, Neale said Boeing has received no reports of the sensitive information being compromised.

"We have no evidence that Boeing was targeted by an individual or a group, so maybe the laptop was stolen just for the value of the laptop," Neale said.

He added that the notebook was turned off at the time it was stolen and requires a password to access the data.

Boeing, meanwhile, is still in the process of notifying those individuals whose information was on the laptop. It is providing them with up to three years of free credit monitoring.

Since fall of last year, Boeing has suffered the theft of two other laptops containing sensitive information about current or former workers. In April, a notebook containing information about 3,600 individuals was stolen, and in November 2005, a similar incident involved a breach of data on 161,000 people.

"Even before the first incident, the company had security procedures and policies that called for them to work off of the server behind the firewall. But after the November theft, we asked for everyone to review our policy and remove information off their hard drives and work off the server. We even had managers go around to double check that that had happened," Neale said.

He added he has not yet heard why the employee in this latest incident downloaded information off of the server.

After the April incident, Boeing decided to start a project that would automatically encrypt files as they are pulled off the server, Neale said. The first groups to test this technology will be those working with employee data. However, the encryption procedures will be eventually implemented in other areas of the company that deal with sensitive data, he added.

The company also is working on ways to eliminate the use of Social Security numbers, as much as possible, as an identifier for Boeing employees, he said.

UCLA Probes Computer Security Breach
Brooke Donald

The University of California, Los Angeles alerted about 800,000 current and former students, faculty and staff on Tuesday that their names and certain personal information were exposed after a hacker broke into a campus computer system.

It was one of the largest such breaches involving a U.S. higher education institution.

The attacks on the database began in October 2005 and ended Nov. 21 of this year, when computer security technicians noticed suspicious database queries, according to a statement posted on a school Web site set up to answer questions about the theft.

Acting Chancellor Norman Abrams said in a letter posted on the site that while the database includes Social Security numbers, home addresses and birth dates, there was no evidence any data have been misused.

The letter suggests, however, that recipients contact credit reporting agencies and take steps to minimize the risk of potential identity theft. The database does not include driver's license numbers or credit card or banking information.

"We have a responsibility to safeguard personal information, an obligation that we take very seriously," Abrams wrote. "I deeply regret any concern or inconvenience this incident may cause you."

School representatives did not return calls for additional comment.

The breach is among the latest involving universities, financial institutions, private companies and government agencies. A stolen Veterans Affairs laptop contained information on 26.5 million veterans, and a hacker into the Nebraska child-support computer system may have gotten data on 300,000 people and 9,000 employers.

Security experts said the UCLA breach, in the sheer number of people affected, appeared to be among the largest at an American college or university.

"To my knowledge, it's absolutely one of the largest," Rodney Petersen, security task force coordinator for Educause, a nonprofit higher education association, told the Los Angeles Times.

Petersen said that in a Educause survey released in October, about a quarter of 400 colleges said that they had experienced a security incident in which confidential information was compromised during the previous 12 months, the newspaper reported.

In 2005, a database at the University of Southern California was hacked, exposing the records of 270,000 individuals.

This spring, Ohio University announced the first of what would be identified as five cases of data theft, affecting thousands of students, alumni and employees _ including the president. About 173,000 Social Security numbers may have been stolen since March 2005, along with names, birth dates, medical records and home addresses.

Jim Davis, UCLA's chief information officer, said a computer trespasser used a program designed to exploit an undetected software flaw to bypass all security measures and gain access to the restricted database that contains information on about 800,000 current and former students, faculty and staff, as well as some student applicants and parents of students or applicants who applied for financial aid.

"In spite of our diligence, a sophisticated hacker found and exploited a subtle vulnerability in one of hundreds of applications," Davis said in the statement.

The university's investigation so far shows only that the hacker sought and obtained some of the Social Security numbers. But out of an abundance of caution, the school said, it was contacting everyone listed in the database.

About 3,200 of those being notified are current or former staff and faculty of UC Merced and current or former employees of the University of California Office of the President, for which UCLA does administrative processing.

Memory Chip Breakthrough for Electronic Devices
Glenn Chapman

A team of scientists has announced a breakthrough in computer memory technology that heralded more sophisticated and reliable MP3 players, digital cameras and other devices.

Scientists from IBM, Macronix and Qimonda said they developed a material that made "phase-change" memory 500 to 1,000 times faster than the commonly-used "flash" memory, while using half as much power.

"You can do a lot of things with this phase-change memory that you can't do with flash," IBM senior manager of nanoscale science Spike Narayan told AFP.

"You can replace disks, do instant-on computers, or carry your own fancy computer application in your hand. It would complement smaller technology if manufacturers wanted to conjure things up."

Technical details of the research were to be presented to engineers gathered at the 2006 International Electronic Devices Meeting in San Francisco.

Researchers expected the discovery to anoint phase-change memory the successor to flash memory as the electronics industry continues a relentless quest to make devices smaller and more powerful.

"These results dramatically demonstrate that phase-change memory has a very bright future," said IBM vice president of technology T.C. Chen.

"Many expect flash memory to encounter significant scaling limitations in the near future. Today we unveil a new phase-change memory material that has high performance even in an extremely small volume."

The new material was a complex semiconductor alloy that resulted from collaborative research at IBM's Almaden Research Center in the Silicon Valley city of San Jose, California.

Qimonda memory technology firm is based in Germany and Macronix is a "non-volatile" memory company located in Taiwan.

Computer memory cells store information as sequences of digital "zeros" and "ones" in structures that can be rapidly switched between two distinctive states.

Most computer memory devices are based on the presence or absence of electrical charge contained in a tiny region of a cell.

The fastest and most economical memory designs -- SRAM and DRAM, respectively -- use inherently leaky memory cells, so they must be powered continuously and, in case of DRAM, refreshed frequently as well.

These "volatile" memories lose their stored information whenever their power supplies are interrupted.

At the heart of phase-change memory is a tiny chunk of alloy that can be changed rapidly between an ordered, crystalline phase and a disordered, amorphous phase.

Because no electrical power is required to maintain either phase of the material, phase-change memory is "non-volatile."

"This is a much more robust memory technology," Narayan said. "It will be used more and more as flash gets into more and more trouble at small dimensions."

While the semiconductor alloy from Almaden is new, phase-change technology has been around for decades and has been used in DVDs and CDs, according to researchers.

Samsung and Intel have both been working with phase-change memory devices, according to Narayan.

"We have demonstrated the potential of the phase-change memory technology on very small dimensions laying out a scalability path," said Qimonda vice president Wilhelm Beinvogl.

"Phase-change memories have the clear potential to play an important role in future memory systems."

Samsung's Solid State Disk Drive Unveiled
Iddo Genuth

In May 2006, Samsung was the first to come out with a consumer 32 GB flash-based solid state drive for mobile PCs, opening up the category for other solid state drive manufacturers. This article explores the solid state drive technology that might replace our aging hard drives in only a couple of years.

Hard disk drives have been around for decades. The first hard drive was part of a computer system built by IBM in the mid 1950's called IBM 305 RAMAC that was used to process accounting information. Although it occupied almost half a room, cost around $50,000, and had only 5 Mb of storage, it is still considered a highly innovative device for its time. Since then, although hard drives have become continuously smaller, cheaper, and their storage capacities have grown over 100,000-times, the basic technology has remained the same. Rapidly spinning platters coated with ferromagnetic material hold the data, while a special actuator arm equipped with a read/write head hovers just above it. Despite the fact that this technology reached a very high level of maturity in recent years (for instance, the actuator arm hovers just nanometers above the spinning platter without crashing the disk), it still suffers from a number of basic limitations due mainly to its mechanical nature. Hard drives are vulnerable to shock, consume relatively high amounts of power in order for the platters to spin, produce a large amount of heat, and take time to start.

In 1984, Dr. Fujio Masuoka from Toshiba invented the first flash memory, which Intel introduced as a commercial product four years later. Solid state drives based on flash memory have a number of unique advantages over conventional hard drive technology. Since they lack mechanical parts, they are much more resistant to shock, consume far less power, and release far less heat. They also produce no sound during operation and respond much more quickly than a mechanical drive. The size of a flash drive can also be very small (relative to a mechanical hard drive), resulting in a lighter device. All these advantages beg the question 'Why are we still using what might seem as an outdated mechanical hard drive technology?' Rochelle Singer, Marketing and Technical Documentation Manager at msystems (recently acquired by SanDisk) explained to TFOT the two main reasons why more than 20 years following their invention, flash drives have not yet replaced hard drives in mobile PCs: "The most important reason is the poor price to capacity ratio of flash memory compared to hard disk drives. When solid state disks were first brought to the military and aerospace markets by msystems in 1989, 1 MB of flash cost a few thousand dollars. At the time, the same capacity inside a hard disk drive cost in the range of tens of dollars. But despite its clearly inferior pricing, the solid state disk gained wide acceptance in the military sector because, unlike the hard disk drive, it was able to meet very strict reliability requirements for field operation in extreme conditions of shock, vibration, altitude, and temperature ranges.

Today, as flash prices continue to decline 50% annually and sometimes even at higher rates – this year flash prices have dropped a phenomenal 70% since January - the solid state disk is gaining entree into new markets. Currently a 4 GB flash memory retails for around the same price as a 120 GB hard drive. Although hard disk drives still have the price edge - building even a relatively small drive based solely on flash memory costs hundreds of dollars at current prices – analysts agree that the trend in cost reduction is expected to continue. The recent success of MP3 players based on flash memory has contributed greatly to high volumes and, therefore, reduced prices of the media. It is not inconceivable that in two years, flash-based drives will hold a two-digit share of the hard drive mobile PC market.

The second obstacle that blocked the uptake of flash was the large footprint required. When flash was first introduced, it was more than five times the size of a hard disk drive of the same capacities. In mobile PCs, the limited size allocated for hard disk drives, usually a 2.5” or 1.8” casing, made it impossible for flash to compete up until only very recently, since it could not deliver enough capacity in such a small footprint.

As new etching processes and technologies are implemented, the capacity of flash is doubling every year and its footprint is becoming smaller. Finer etching processes down to 50 nm in 2007 (as compared to 90 nm in 2005) and more advanced technologies such as multi-level cell (MLC) NAND, which stores 2 bits/cell - instead of single-level cell (SLC) NAND, which stores only 1 bit/cell - continue to enable less silicon to be used to produce ever higher capacities in ever smaller footprints.

These cost and size economies come at a price: flash has become more difficult to manage to deliver the high reliability and endurance that have become its trademark. This entails the need for more sophisticated flash management to make sure that flash endurance (measured as the number of write/erase cycles that it can endure without degrading data reliability) can meet market requirements. Error detection and correction must be robust enough to combat the exponentially increasing number of errors as the media becomes increasingly dense. msystems, the first company to bring MLC NAND to the mobile handset market 3 years ago, has proven that it is capable of delivering the required reliability and endurance."

Samsung, the first to come out with a consumer Solid State Disk (SSD), decided to test out the technology on laptops and portable devices first, releasing 32 GB 1.8” and 2.5” SSDs inside a laptop and an ultra-portable mobile computer, costing $2,430 and $3,700, respectively, in Korea. Other solid-state drive manufacturers will join the ranks in the very near future, using both SLC and MLC NAND flash. In the meantime, and until flash memory prices drop, Samsung is building on the introduction of the midterm solution – the hybrid hard drive (covered in a previous TFOT article), which uses a combination of flash memory and conventional hard drive design.

To learn more about Samsung's SSD technology, TFOT interviewed Don Barnetson, Director of Flash Marketing for Samsung Semiconductor.

Q: How fast is your current SSD and what performance improvements does it offer?

A: The streaming R/W speeds are 57 MB/s and 32 MB/s, respectively, but the most significant performance advantage comes from its latency feature - less than 1 millisecond; roughly 10-15x faster than a hard disk drive.

Q: Is there currently some sort of technical limitation on the creation of SSDs other than cost, and what about the reliability of flash media?

A: Historically SSDs were limited in the number of R/W cycles. However, with modern flash technology and error correction, the reliability of the flash in a PC exceeds 10 years. Cost is currently the barrier. However, flash pricing has historically come down 40% per year over the past 10 years. Thus, densities that were unaffordable only a few years ago are practical today; the same will hold true in the future.

Q: Why did you choose to start with portable (1.8”/2.5”) SSDs and not include desktop (3.5”) versions as well? When should we expect a desktop version of the SSD?

A: Several key values of SSD are most applicable to notebooks (95% power reduction, virtually impervious to shock and vibration, no noise, weight reduction), though performance gains would be apparent in both segments. The limitation on density is not a function of physical size – we could put much more than 32 GB in the 1.8” or 2.5” form factors. It is more an economic limitation, and this would not be resolved by going to a 3.5” form factor.

Q: Is it possible to increase the R/W speed of the SSD drive?

A: It is possible to increase streaming read/write speeds by interleaving more flash components. However, streaming R/W speeds are seldom the bottleneck in PCs; streaming performance has been the focus of specification one-upmanship in the HDD industry. In actual usage, however, as Microsoft discussed at WinHEC, random I/O is almost always the bottleneck with real performance. In this case, our SSDs offer up to 5000 IOPS (I/O operations per second) vs. approximately 100 IOPS on a consumer-grade HDD. This is the key reason why a notebook equipped with an SSD can respond 4x more quickly to standard Vista operations (loading applications, etc.) than a similarly equipped HDD-based notebook at WinHEC.

Q: Why is your current SSD drive PATA and not SATA and will future SSDs be able to take advantage of the SATA-II bandwidth?

A: SATA-based SSDs will be offered in the future. Since the streaming R/W performance of our SSD does not currently exceed that of either the PATA or SATA-I interfaces, it is unclear whether building an SSD with faster read performance would necessarily make any difference to system-level performance for the reason mentioned above.

Q: How much will your SSD drive cost?

A: We have not yet announced pricing; however it will closely track the market price for the flash components it is based on (one possible reference). It is important to note that there isn’t a substantial cost difference in producing a 1.8”, 2.5”, or 3.5” version at the same density.

Al Shugart, Hard-Drive Pioneer, Dies at 76
Michael Kanellos

Al Shugart--the man who founded Seagate Technology, convinced his pet dog to run for public office, and favored Hawaiian shirts over business suits--has died at age 76.

The California native passed away at a hospital from heart failure Tuesday, a Seagate representative said.

Shugart played an integral role in the development of the hard-drive industry. He was part of the original team of engineers at IBM that developed the first hard-drive storage system, which came out 50 years ago this year.

He then held several different positions in the industry before founding Seagate in 1979. The company went on to become a dominant force in the hard-drive industry. It is, in fact, the largest hard-drive manufacturer, and it is consistently profitable. Shugart left the company in 1998.

"It's really impossible to look at modern business, society, communications, science, music, entertainment or anything else without seeing the power and impact of Al's legacy," Seagate CEO Bill Watkins said in a statement. "Al's unique spirit made him a remarkable entrepreneur. And it also made him an unforgettable human being. Stories about Al and the many ways he touched people still circulate around the industry. Most will remember him as a man who loved to enjoy life and encouraged everyone he touched to do the same."

As Watkins noted, Shugart was well-known for his jovial, somewhat rowdy, personality. He often liked to say that his real goal in life was to have fun. He ran his dog Ernest for Congress (the dog lost) and owned a restaurant.

"When I got fired from Seagate, I had a few investments, but I thought of doing PR in exchange for equity," a Hawaiian shirt-clad Shugart said in a 1999 interview at Comdex to discuss a small venture fund he had launched.

One thing he wasn't was an efficient corporate manager. For years, Seagate struggled--like almost all disk makers--with turning a consistent profit. One of the chief problems was that there were too many competitors in the field. Seagate eventually acquired rival Connor Peripherals.

Seagate, though, was also saddled with a somewhat antagonistic culture. Watkins, who came from Connor, recalled recently his first executive meeting at Seagate. The executives swore constantly at each other for about six hours and got almost nothing got done.

Greg Quick, a reporter who has covered technology for about two decades, recalled his encounter with Shugart in an article on the drive industry in 2004.

"In my only Shugart interview, he took his shoes off in the middle of it and put them on the table. Then he sent his limo driver out for a huge sack of McDonald's," Quick wrote.

How To Choose Archival CD/DVD Media
Patrick McFarland

Ahh, I’ve been planning to write this one for awhile: an entire article on archival quality media. As I do professional software development as well as professional photography (what a weird combination), I need archival quality CD and DVD media to store my data on.

However, one of the hardest things to is actually find good media, or even understand why it is good media. This article focuses on the history of Compact Discs, writable CD/DVD media, and why DVD+R is superior to DVD-R. If you want to just know what media is worth buying, skip to the summary at the bottom.

Short history of the Compact Disc
The invention of the Compact Disc has had a large impact on both music and computing in the last 20 years. Invented in 1979 as a joint project between Sony and Phillips to counter the self-destructive nature of consumer audio playback (such as tapes and records that could only be played so many times before the recording degraded significantly) by switching to a resilient digital format.

The CD was also designed to store standard computer data, as in 1985 the first CD drives for computers were released; massive, bulky, and expensive, it was not until the mid-90s that they really took off, driven almost solely by video games and large multimedia applications.

In 1990, Sony and Phillips went back to the drawing table, and then came out with the CD-R, a record-once medium. Yet again, the first CD burners were large, expensive, and bulky, but by the late 90s having a CD burner was the new ‘in’.

The first few generations of CD media, designed by Taiyo Yuden (a company who I respect, and buy all my archival quality media from), actually kind of sucked; it wasn’t until around 2000 that companies started producing very high end media.

CDs and DVDs store individual bits (encoded in various ways depending on the media) with spots of reflective and non-reflective areas. This method is called ‘pits and lands’, where pits ‘absorb’ light (ie, are ‘off’ bits) and lands ‘reflect’ light (ie, are ‘on’ bits).

With pressed media, the pressing method causes pits to reflect the laser’s light away from the sensor, and the lands to reflect it back at the sensor. With burned media, a high energy laser causes spots of organic dye to go opaque and obscure the reflective surface for the pits, leaving the organic dye for lands alone.

Short history of the DVD
While burning was becoming popular in the late 90s, so was playing high quality video on DVDs. Storing almost 7 times the data of a 700MB CD (or almost 13 in the case of dual layer DVDs), allowed companies to store massive amounts of data on one disc, leading to the movie industry to drop VHS tapes and the video game industry to drop CDs.

In 1995, the first DVD specification was ratified by over a dozen companies including Sony and Phillips, as well as Thompson, Pioneer, and Mitsubishi. By 2000, at least half the homes in the US and Japan had DVD players.

So, obviously, the next step was to produce burnable DVDs. Two separate, and incompatible, efforts took hold. The first one, Pioneer’s DVD-R (pronounced ‘DVD dash R’) was released in 1997, using different data storage methods than pressed DVDs (appearing to be more like CD-R than DVD), a poor error correction scheme, and the ‘wobble’ laser tracking system of DVD-R is inadequate for the job.

The second effort, lead by the DVD+RW Alliance (headed by Sony, Phillips, Mitsubishi, and Thompson) was released in 2002, as an alternative to the poorly implemented DVD-R. DVD+R uses a superior ‘wobble’ laser tracking system, a far better error correction method, and the media quality itself is typically higher. (See the ‘Why DVD+R?’ section below for a more technical explanation)

Why archival media is hard to produce
Unlike pressed CDs/DVDs, ‘burnt’ CDs/DVDs can eventually ‘fade’, due to five things that effect the quality of CD media: Sealing method, reflective layer, organic dye makeup, where it was manufactured, and your storage practices (please keep all media out of direct sunlight, in a nice cool dry dark place, in acid-free plastic containers; this will triple the lifetime of any media).

The silver and aluminum alloys used in virtually all blank CD/DVD media has one major issue, requiring the manufacturer to lacquer a protective seal over the entire disc: silver and aluminum oxidize when they hit air, turning the normally reflective layer into silver or aluminum rust. Some (very expensive) media uses gold instead which doesn’t oxidize, however DVD media cannot use gold due to design issues (not true anymore, see update below). Today, only the cheapest of the cheap media has severe issues with sealing practices (as such, avoid any media made outside of Japan and Taiwan; especially avoid media made in India).

Assuming that the protective seal and reflective layer are manufactured correctly, the next issue is the organic dye. The first organic dyes, designed by Taiyo Yuden, were Cyanine-based and, under normal conditions, had a shelf life of around ten years; simply, that was simply unacceptable for archive discs. Taiyo Yuden, Mitsubishi Chemicals, Mitsui Co., and Ciba Specialty Chemicals spent the next ten years trying to produce the best organic dyes, eventually reaching archive-quality CD media.

Taiyo Yuden produced ‘Super Cyanine’, a chemically stabilized version of the original Cyanine dye designs, while TDK offers media that uses ‘metal-stabilized Cyanine’ dye, leading to similar shelf lives as Taiyo Yuden’s media. Taiyo Yuden states their Super Cyanine dye is chemically stable for at least 70 years, and TDK states their metal-stabilized Cyanine is also stable for 70 years.

On the other hand, Mitsubishi went in a different direction and produced what is called a Metal Azo dye, that they claim is stable for around 100 years. Azo dyes are chemically stable, however, the shelf life of media using Azo dyes typically does not exceed that of Super Cyanine and metal-stabilized Cyanine.

The third dye produced for CD media is called Phthalocyanine dye, with the majority of such dyes produced by Mitsui and Ciba. Typically marketed as more resistant to heat and UV radiation than Cyanine and Azo, modern Cyanine and Azo dyes last just as long in extreme conditions.

DVDs also use similar dyes, however manufacturers have intentionally kept what dyes they use a secret (instead of a feature in their marketing of the media), and all blank DVDs are intentionally the same color (as different dyes on CDs make blanks different colors, however, it is not indicative of what dye is used due to some manufacturers using different colored silver alloys and non-reactive additives in the dye).

Why Taiyo Yuden media, and how to buy in the US
The best discs in circulation tend to be Taiyo Yuden media, which you rarely can buy directly. In Japan, you find their media under the brand That’s, which are wholly owned by Taiyo Yuden. In other countries, popular brands such as TDK and Verbatim carry their media (see the Taiyo Yuden FAQ by the CD Freaks Forum for a listing).

Simply put, I have never had problems with any kind of Taiyo Yuden media. Ever. I have bought CDs and DVDs under a dozen different brands (including non-Taiyo Yuden manufactured TDK and Verbatim), and the only ones that have had a 100% success rate is Taiyo Yuden.

If you cannot find any company selling Taiyo Yuden under the own brand, I suggest buying from the SuperMediaStore.com, who offer a wide range of Taiyo Yuden CD media, DVD-R media, and DVD+R media. I tend to buy just from them, as they are the only company that guarantees that their media is actually from Taiyo Yuden and not a fake (see the above linked FAQ on information about fake Taiyo Yuden media).

Why DVD+R?
This is the most technical section of the article. If you don’t understand the basics of how CD/DVD media works, or find such technical discussions boring, skip to the next section.

As I said earlier, DVD-R sucks for data preservation for three reasons: inferior error correction, inferior ‘wobble’ tracking, and the fact its data writing methods look like an un-needed halfway point between CD-R and DVD+R. The wobble tracking I shall explain first, then the error corrections method, then the specifics of ATIP/pre-pit/ADIP optimum power settings.

For a CD/DVD burner to track where it is on the disc, it uses three things: the ‘wobble’ of the data track (where it actually wobbles back and forth instead of in a straight line) to tell where it is in the track, the position of the track to tell where it is on the disc, and some additional information on the disc to tell where the track (singular, as CDs and DVDs only have one track, and it is written in a concentric spiral) begins and ends.

This additional information on a CD-R is called the ATIP (Absolute Time In Pregroove), which contains how long the track is, where it begins, what the maximum and minimum writing speeds are, what formula dye it uses, who actually made it, optimum power control settings, and error correction data. The ATIP is stored as a frequency modulation in the wobble itself.

However, since the wobble changes subtly to encode data, it is impossible to use with the small size of tracks DVD requires, as electric noise in the laser pickup and wobbles introduced by the electric motor spinning the disc, these could easily be read as frequency changes in the real track itself.

On DVD-R, they tried to solve the problem with something called ‘pre-pits’ where spikes in the amplitude of the wobble appear due to pits fully out of phase with the rest of the track (ie, between two spirals of the track, where there is no data). This can be viewed as a simple improvement over CD-R as it makes it easier to track the wobble (since the wobble is constant except for the easy to detect and remove spikes).

Unfortunately, this method as one flaw: due to electric noise in the laser pickup, it would be very easy to miss the pre-pit (or read one that wasn’t actually there) if the disc were damaged or spun at fast speeds. The time to read a pre-pit is 1T (roughly .0000000038th of a second), which even for a computer can be easy to miss. DVD-R traded hard to track frequency changes for hard to read wobble-encoded data.

On a DVD+R, however, they came up with a much better method. Instead of changing the frequency of the wobble, or causing amplitude spikes in the wobble, they use complete phase changes. Where CD-R’s and DVD-R’s methods make you choose between either easy wobble tracking or easy ATIP reading, DVD+R’s method makes it very easy to track the wobble, and also very easy to encode data into the wobble. DVD+R’s method is called ADIP (ADdress In Pre-groove), which uses a phase change method.

With ADIPs’ phase changes, the direction of the wobble changes and continues on going in the exact opposite direction (ie, counter-clockwise to clockwise, or the reverse). For example, if the wobble was ‘going up’, the phase change causes it to instantly reverse direction start ‘going down’ no matter where it in the wobble cycle. The phase change is very easy to detect, and also continues for a set period (in this case, one 32T section of the track, or 32 times longer than the pre-pit method of DVD-R).

The state of the phase change (clockwise or counter-clockwise) encodes the individual bits in each block In essence, with the phase change method, not only do you have an easy way of tracking the wobble, but you now have an easy way of reading wobble-encoded data.

As I mentioned earlier, this wobble-encoded data includes error correction of wobble-encoded data itself. Error correction is the most important part of media, because if it does not work, then you’ve lost your data, even if there is nothing seriously wrong with the disc.

The DVD-R specification states that for every 192 bits, 48 of them are not protected under any scheme, 24 of them are protected by 24 bits of parity, and the last 56 bits are protected by another 24 bits of parity. This weird (to put it mildly) scheme allows you to easily scramble or lose 25% of the data that is required to read your disk! This information is almost more important than the actual data burned on the disc itself.

The DVD+R specification, however, states that for every 204 bits of information, it is split into four blocks of 52 bits containing 1 (shared among all blocks) sync bit to prevent misreading because of phase changes, 31 bits of data, and a 20 bit parity (that protects all 32 bits).

Now, the third item on the list: how DVD+R discs burn better. As I said earlier, ATIP/pre-pit/ADIP stores information about optimum power control settings. This information is basically formulas stating how much output power is needed, what the laser startup power should be, and other pieces of information you require to properly burn a DVD.

Optimum power control output is dependent on three things: burning speed, laser wavelength, and information given to the drive about the media. DVD-R basically fails on all three accounts because DVD+R simply includes far more information about the media in the ADIP data than DVD-R does in it’s pre-pit data.

DVD+R includes four optimum profiles, one for four major burning speeds (usually 2x, 4x, 6x, and 8x, though this can change as speeds increase). Each of these profiles include optimum power output based on laser wavelength, more precise laser power settings, and other additional information. With this information, any DVD+R burner can far more optimize it’s burning strategy to fit the media than it can with DVD-R, consistently providing better burns.

For comparison, DVD-R includes one profile, optimum power output based for that one profile only and uncalibrated towards what wavelength it is for, less precise laser power settings, and no other additional information. Typically, DVD-R burners have to already know how to burn a certain piece of media (and include this information in their firmwares) before they can properly burn to it. New media often is not properly supported.

In addition to the optimum power control profiles, DVD+R also gives four times more scratch space for the drive to calibrate the laser on; more space can only improve the calibration quality. So, in short, DVD+R media exists to simply produce better burns and protect your data better.

And finally, the end of the article…
Finally, after roughly three pages of technical discussion, we arrive at the end of my dissertation on archival quality CD/DVD media. So, you’re probably now wondering, in simple terms, what media do I recommend?

To begin with, I do not recommend CD-RW, DVD-RW, or DVD+RW media in any form for permanent storage. This is mostly a no-brainer, but those discs are meant to be able to be changed after burning, and they are simply unsuitable for long-term archival storage. I also do not recommend DVD-R media due to DVD+R’s superior error correction and burning control.

That said, I recommend Taiyo Yuden media across the board. Taiyo Yuden currently manufactures 52x CD-R, 16x DVD-R, and 8x DVD+R media in normal shiney silver, inkjet printable, and thermal printable forms. Taiyo Yuden may be one of the most expensive (if not the most expensive), but their media quality is unsurpassed. Taiyo Yuden (currently) does not produce any dual layer media. Also, as I mentioned earlier, I recommended buying from SuperMediaStore.com as they are the only online US distributor that guarauntees that their Taiyo Yuden media is certified as coming from Taiyo Yuden.

However, for those that absolutely require dual layer media, Verbatim produces DVD-R DL and DVD+R DL, however, due to the fact DL media costs over twice as much as two single layer discs, I recommend you only use single layer unless you really, really need a single disc.

So, what am I using? Due to Taiyo Yuden’s superior media quality, and DVD+R’s superior design, I use only Taiyo Yuden DVD+R media. I recommend this media to everyone who wishes to keep their data for a long, long time.

Update: It seems MAM-A and Kodak actually has managed to make a gold DVD, though no one else seems to be manufacturing them. However, MAM-A’s gold archival media still doesn’t seem to exceed TY quality (although Mr 60,000 in the comments below puts TY second best to MAM-A). Due to the extreme cost of gold archival media ($2+ a disc) with very little increased protection (if any), I’ll still say TY media is better. I want to see more independent tests on this before I change my recommendation.

Q & A

J. D. Biersdorfer

Helping A Balky Laptop

Q. I get an occasional “insufficient system resources exist to complete the API” message when I try to put my laptop in hibernation. When I bought this laptop six months ago, I was impressed with its speed in booting and opening programs, but now it has slowed dramatically, even with two gigabytes of RAM. What can I do?

A. In an article in its technical support database, Microsoft has acknowledged a problem with the hibernation function and computers that have more than one gigabyte of memory installed.

According to Article No. 909095 (found at support.microsoft.com/kb/909095), many versions of Windows XP Home and Professional — including systems updated to Service Pack 2, as well as Windows XP Media Center Edition 2005 and Windows XP Tablet PC Edition 2005 — are affected. The problem occurs because the kernel power manager within Windows can’t get the memory it needs to put the PC into hibernation mode. (The kernel is the main module in an operating system and is in charge of handling the memory-, disk- and process-management chores for the computer.)

Microsoft has a “hot fix” update available on the article page and recommends downloading and installing the patch to help with the hibernation problem. You will need to “validate” your copy of Windows on the site before you can download the patch, which means letting Microsoft peek over the Internet to make sure your computer is not running a counterfeit copy of Windows.

The slowness of your laptop’s start-up process may be unrelated to the hibernation issue. A number of things can cause a computer to slow, including the number of programs you have set to load automatically when you boot up the machine. Antivirus and other security programs that load at start-up can add time, as can spyware or other sinister software than may have infiltrated your system.

Another article on Microsoft’s site offers general tips for speeding your system, including disconnecting unused network drives and removing programs that start automatically. You can find it at http://tinyurl.com/46u3t.

Making a Browser Forget the Past

Q. The Firefox browser seems to remember everything I type in search boxes. How can I stop this?

A. Mozilla’s Firefox browser can save information you have previously typed into Web forms and search boxes. If you would rather it not do that, go to the Tools menu to the Options box and click the Privacy tab. Mac users can find the Privacy settings Preferences area of the Firefox application menu.

Once in the Privacy settings, uncheck the box next to “Remember what I enter in forms and the search bar” and then click O.K.

Scanning Slides By Hand

Q. I have about 500 good Leica images on slides that I want to put on a CD or DVD. The options seem to range from $1 to $2 per slide for professional scanning to cheaper mail-in slide-transfer companies. Is there a good, reasonably priced scanner I can buy to do it myself?

A. Scanners that can convert 35-millimeter slides to digital images generally come in two types: regular flatbed scanners that have a slide-tray attachment, or a dedicated slide scanner. Of the two, flatbed scanners tend to be less expensive but slower, and some people find the color images produced to be of lesser quality than using a more expensive, dedicated slide scanner. Scanners designed just to do slides and film negatives tend to cost at least $350 and can run well past $1,000.

Many flatbed scanners, especially those designed for scanning both prints and slides, come with a slide attachment that lets you scan up to four slides at a time. Major scanner manufacturers like Hewlett-Packard and Canon typically have models for $100 to $200 that can scan slides.

Sites like Photo.net (www.photo.net/ezshop/category) and Imaging Resource (www.imaging-resource.com/SCAN1.HTM) have reviews of different scanners available, and can provide more information. Attachments like the Nikon SF-210 Auto Slide Feeder can let you scan up to 50 slides at a time, but they cost $300 or more and may require the use of a specific scanner model.

Image-editing programs designed for home users, like Adobe Photoshop Elements or Apple’s iPhoto, can also help enhance scanned slides and burn them to a disc once you get them on the computer.

Detainee Case Highlights Conservative, Libertarian Rift
Matt Apuzzo

Prominent conservative lawyers joined liberal colleagues Tuesday in opposing Bush administration anti-terror tactics, arguing that an immigrant held as an enemy combatant has a right to seek his freedom in court.

The legal brief, filed in the case of suspected al-Qaida sleeper agent Ali Saleh Kahlah al-Marri, argues that a new military commissions law is unconstitutional.

The argument has been made in this and other detainee cases, but Tuesday's brief is notable for the bedfellows created by the politics of anti-terrorism. Staunchly Democratic law school deans Harold Koh of Yale and Laurence Tribe of Harvard were joined by lawyers such as Steven Calabresi, who served in the Reagan and first Bush administrations and helped found the conservative Federalist Society.

"It shows the phrases 'conservative' and 'libertarian' have less overlap than ever before," said Richard A. Epstein, a University of Chicago law professor and Federalist Society member who signed the brief. "This administration has lost all libertarians on all counts."

In June, the Supreme Court said the Bush administration's handling of detainees violated U.S. and international law. Bush then pressed for, and got, a new law that he said would help the government prosecute terrorists.

The Military Commissions Act allows the military to hold detainees indefinitely and strips them of the right to challenge their imprisonment in U.S. courts. The Justice Department defends the law as a constitutional and necessary tool to combat terrorism.

"The question here is not one of political perspective but of law," Justice Department spokeswoman Kathleen Blomquist said Tuesday night. "The district court found al-Marri to be an enemy combatant and dismissed his habeas petition."

If al-Marri wants to challenge that determination, Blomquist said, then he can challenge the determination before a Washington appeals court.

Like the warrantless wiretapping program and the Patriot Act, the law has divided conservatives. Some say the president must have the power to act in times of war and that detaining enemy combatants is the only way to ensure they won't return to the battlefield. Supporters of the law say the detainees are more like prisoners of war than criminal defendants.

Civil rights groups and conservatives with a libertarian viewpoint see the law as a government infringement on personal freedom.

"This involves the executive branch changing the rules to avoid challenges to its own authority," Koh said Tuesday. "Serious legal scholars, regardless of political bent, find what the government did inconsistent with any reasonable visions of the rule of law."

Epstein, who said he regards Koh as "mad on many issues," said the al-Marri case is "beyond the pale."

"They figured out every constitutional protection you'd want and they removed them," Epstein said.

Al-Marri is the only enemy combatant known to be held in the United States, where immigrants normally have the right to use U.S. courts to question the legality of their detention.

Al-Marri was arrested in 2001 while studying in the United States. He had faced criminal charges until authorities designated him an enemy combatant and ordered him held at a naval base in South Carolina.

The 4th U.S. Circuit Court of Appeals in Richmond, Va., is considering al-Marri's case. Clinton administration Attorney General Janet Reno warned the government's argument in the case could set a dangerous precedent.

Jonathan Hafetz, an attorney with the Brennan Center for Justice who is handling the al-Marri case, said it brings up issues about what the framers of the Constitution intended - something libertarians and judicial conservatives often look to.

The al-Marri case, along with two cases before a federal appeals court in Washington, are likely bound for the Supreme Court, where its fate could be decided by whether the court's conservative justices prove to be libertarians on this issue.

Supermodel's Stepdad is Allowed Trips Out of Prison

The former stepfather of supermodel Maggie Rizer is allowed to leave his Buffalo prison during the day as part of a work release program.

John Breen Jr. pleaded guilty to stealing up to $7 million from Rizer. He is serving a 1 1/3- to 4-year prison sentence at the minimum-security Buffalo Correctional Facility in Erie County.

Breen, who will eventually be allowed to stay away from the prison overnight, is participating in the state Department of Correctional Services' work-release program.

"He is being permitted to go out each day when his hours of employment make it necessary," said Linda Foglia, a DOCS spokeswoman. "He also can go out on Saturdays and Sundays for a period of time."

Breen has been looking for a job in the Buffalo area and has applied for permission to live at his sister's Watertown home. Parole officials rejected that request.

Breen had power of attorney over Rizer's bank accounts. He claims to have spent much of the money playing Quick Draw at local bars.

Rizer, a 1996 Watertown High School graduate, has appeared on the covers of Mademoiselle, Vogue, Harper's Bazaar and Allure magazines. date in November, she said.

Cock and Bull
Michael Crowley

There is an obscure publishing doctrine known as "the small penis rule." As described in a 1998 New York Times article, it is a sly trick employed by authors who have defamed someone to discourage their targets from filing lawsuits. As libel lawyer Leon Friedman explained to the Times, "No male is going to come forward and say, 'That character with a very small penis, 'That's me!'" This gimmick was undoubtedly on the mind of Michael Crichton, the pulp science-fiction writer of Jurassic Park fame, when he wrote the following passage in his latest novel, Next. (Caution: Graphic imagery. Kids, ask for permission before reading on):

Alex Burnet was in the middle of the most difficult trial of her career, a rape case involving the sexual assault of a two-year-old boy in Malibu. The defendant, thirty-year-old Mick Crowley, was a Washington-based political columnist who was visiting his sister-in-law when he experienced an overwhelming urge to have anal sex with her young son, still in diapers. Crowley was a wealthy, spoiled Yale graduate and heir to a pharmaceutical fortune. ...

It turned out Crowley's taste in love objects was well known in Washington, but [his lawyer]--as was his custom--tried the case vigorously in the press months before the trial, repeatedly characterizing Alex and the child's mother as "fantasizing feminist fundamentalists" who had made up the whole thing from "their sick, twisted imaginations." This, despite a well-documented hospital examination of the child. (Crowley's penis was small, but he had still caused significant tears to the toddler's rectum.)

The next page contains fleeting references to Crowley as a "weasel" and a "dickhead," and, later, "that political reporter who likes little boys." But that's it--Crowley comes and goes without affecting the plot. He is not a character so much as a voodoo doll. Knowing that Crichton had used prior books to attack very real-seeming people, I was suspicious. Who was this Mick Crowley? A Google search turned up an Irish Workers Party politician in Knocknaheeny, Ireland. But Crowley's tireless advocacy for County Cork's disabled seemed to make him an unlikely target of Crichton's ire. And that's when it dawned on me: I happen to be a Washington political journalist. And, yes, I did attend Yale University. And, come to think of it, I had recently written a critical 3,700-word cover story about Crichton. In lieu of a letter to the editor, Crichton had fictionalized me as a child rapist. And, perhaps worse, falsely branded me a pharmaceutical-industry profiteer.

The road to this literary hit-and-run began back in March, when I wrote an article about Crichton pegged to his 2004 best-seller, State of Fear. The 624-page thriller presented global warming theory as the work of a fiendish cabal of liberal environmentalists, celebrities, journalists, academics, and politicians. Crichton's populist disdain for these "experts" dovetailed neatly, I argued, with the Bush administration's antiintellectual streak--and it was the reason that Karl Rove had invited Crichton for a chat with George W. Bush at the Oval Office and a right-wing senator had asked him to testify before his committee. Crichton discussed his White House visit with me, and our talk was friendly--though Crichton was clearly nervous about being linked to Bush. How ironic, then, that he wound up responding to my critique with a move worthy of Rove's playbook.

Indeed, much like a crude political operative, Crichton savages his cultural villains with sadistic glee. In Jurassic Park, a sleazy lawyer is consumed by a t-Rex while sitting on the toilet. State of Fear prominently featured a fatuous Hollywood liberal, remarkably similar to Martin Sheen, who winds up consumed by cannibals. But, despite his generally worshipful treatment in the press, Crichton loathes no creature like the journalist. His 1996 novel, Airframe, ostensibly about aviation disasters, was in fact a diatribe about the news media's cynicism and stupidity. Next, meanwhile, is peppered with sneering jibes at The New York Times. It's a strange crusade for the son of a journalist.

Thus far, no one seems to have publicly drawn the connection between Mick Crowley and Michael Crowley. In her November 28 review of Next, the Times's Janet Maslin nearly did, noting the presence of some oddly mean-spirited caricatures--including, as Maslin put it, "a Washington political columnist and spoiled heir who turns out to have raped a 2-year-old." But, while Maslin generously called these characters "ham-handed," she didn't make the link. Others have, including a friend who called breathlessly from New York. When I accused him of a prank, he replied, "How could I possibly make that up?" True, I thought. My friend was not nearly demented enough.

I confess to having mixed feelings about my sliver of literary immortality. It's impossible not to be grossed out on some level--particularly by the creepy image of the smoldering Crichton, alone in his darkened study, imagining in pornographic detail the rape of a small child. It's uplifting, however, to learn that Next's sales have proved disappointing by Crichton's standards, continuing what an industry newsletter dubs Crichton's "recent pattern of erosion." And I'm looking forward to the choice Crichton will have to make, when asked about the basis for Mick Crowley, between a comically dishonest denial and a confession of his shocking depravity.

Crichton launched his noxious attack from behind the shield of the small penis rule because, I'm sure, he's embarrassed by what he has done. In researching my article, I found a man who has long yearned for intellectual stature beyond the realm of killer dinosaurs and talking monkeys. And Crichton must know that turning a critic into a poorly endowed child rapist won't exactly aid his cause. Ultimately, then, I find myself strangely flattered. To explain why, let me propose a corollary to the small penis rule. Call it the small man rule: If someone offers substantive criticism of an author, and the author responds by hitting below the belt, as it were, then he's conceding that the critic has won.

Why We Shop
Jennifer Michael Hecht

Holiday shopping is underway, sparking a lot of discussion about the tension it causes. Some call the buying frenzy vulgar, given how much hunger there is in the world. Some express an opposite anxiety — that Americans might not shop enough to fuel the economy. This year, economists report happily that the season opened with higher sales than last year, but add nervously that growth slowed compared with the year before. Individually, people seem to accept holiday shopping as a challenging, unavoidable chore.

But there is a profoundly good side to holiday shopping that goes beyond the generosity it expresses toward family and friends. Whether we realize it or not, we are drawn to and fulfilled by the crowds, the rush, the choices and even the outlay of cash. Why? History suggests that holiday shopping fills an ancient need to gather and tithe, and serves as a modern-day ritual of renewal.

Throughout history, societies have arranged for people to congregate and engage in shared activities. The ancient world had a full schedule of feast days and rituals. In Greece, for example, the annual Thesmophoria brought together the town’s adult women to act out their hope that the coming year would be a fertile one. They would camp out for three nights, dance, and perform dramatic animal sacrifices. The January Kalends, an old Roman holiday meant to renew the city, was celebrated into the early medieval period, even though in 404 A.D., St. Augustine of Hippo preached against it. The celebrants were good Christians, not inclined to believe that their festivities actually did anything to keep Rome alive, but they were afraid of what might happen if they stopped. A thousand years later, large festivals on saints’ days were part of the church calendar, and attendance was mandatory.

Holiday shopping is not a formal religious ritual, but it does offer a chance for society at large — people with no obvious connections to one another — to gather for a shared purpose. And these days such opportunities are rare. For most of history, people typically lived in groups of 300 to 3000, defined by extended family, church parish, and village. Now we live in cities in much larger numbers, yet we are much more isolated. We identify with the small community of our nuclear family, and the enormous community of the nation. We sit home with our three family members and watch “It’s a Wonderful Life,” as it is broadcast to all 300 million of us at once.

Yet there is a certain part of our humanity that can be evoked only when we act as part of a big crowd keeping a tradition. Consider the pleasure of walking the boardwalk on Independence Day, the psychological high of it. Also think of how eerie it would feel if one year the crowd did not materialize. Community spirit is a real thing. When people come together, they report feeling part of something larger than themselves. When this sensation goes bad, the crowd becomes a mob, but at a concert in the park or a peaceful demonstration, we can get a distinct feeling of comfort and happiness.

Who would go to a department store on the last Saturday before Christmas? Obviously, a lot of people would. They may explain it by saying they have procrastinated, but to an important degree, whether we realize it or not, everything we do is intentional. December after December, we come together in large crowds and enact a modern sacrifice ritual.

In ancient societies, people gathered to ritually slaughter the fatted calf in an effort to renew the strength of the tribe for another year. After the sacrifice, which bonded them around loss, came feasting, which bonded them in fulfillment. Today, when we arrive at the mall and hand over a portion of the money we’ve worked for all year, and then break bread at the food court, we likewise renew our optimism for the year ahead.

Sure, buying presents for people who are buying you presents, too, is not exactly sacrifice, but even in ancient times, sacrifice included an element of fun. When the ancient Hebrews set fine meat ablaze, they usually didn’t let God have it all. (When they did, it was enough of a special event to mention in the Bible, as when, in Exodus, we learn of “whole burnt offerings, in which the whole sacrifice was consumed with fire upon the altar.”) The Greeks, too, regularly kept the good parts for themselves, and sacrifice was always followed by feasting. What counted, and still counts, is that together we use up some of what we have been hoarding.

Although we may not consider shopping a ritual of sacrifice, we all know that by pitching in money, we help the economy run. Shopping also has a component that is less rational and more like magic.

So pay attention to how you feel this year, as you head into the thick of the retail season. The crowds are not just an annoying obstacle; they’re part of the experience. And you are a part of the crowd, on a ritual mission of renewal.

Nintendo Tries to Rein in the ‘Whee!’ of Its Wii
Matt Richtel

Nintendo said today that it was taking steps to keep energetic users of its new Wii video game console from damaging their televisions, ceiling fans and bystanders.

The Wii, which Nintendo began selling in November, has generated considerable consumer enthusiasm in part because it has a novel game controller that players can wave to manipulate action of the screen. Trouble is, some players have grown so enthusiastic that the controller has slipped from their hands and taken brief flight.

Nintendo on Friday said it has begun a voluntarily replacement program for the wrist straps that are supposed to keep the controllers attached to a player. Thicker straps should mean fewer flying controllers, said Beth Llewelyn, a spokeswoman for Nintendo of America.

The new straps are free, she said, but the company is not committing to replacing other household items — like the handful of televisions that have reportedly been smashed by unleashed controllers.

“We’re handling those on a case-by-case basis,” Ms. Llewelyn said. She said that reports of broken straps have been relatively few; they have broken in fewer than 1/100th of one percent of cases, she said. “There’s no problem if you just hold onto the controller,” she noted.

The strap issue appears to be a rare early glitch for the Wii — a console that video game industry analysts say is having considerable success in the marketplace.

In November, Americans bought 476,000 Wiis, according to Evan Wilson, an analyst with Pacific Crest Securities, citing figures from NPD Group. That compared to November sales of 197,000 Sony Playstation 3’s, which also went on sale last month.

During that month, there were sales of 511,000 Xbox 360s, Microsoft’s video game console. The 360 has been available to consumers for a full year and is more readily available than the Wii and the Playstation 3.

While the battle for the hearts and wallets of consumers is in its early days, industry analysts said the Wii has most forcefully captured consumer interest. Unlike the super-powerful, graphics-intensive PS3 and Xbox, the Wii is targeted at a more mainstream audience, and, pointedly, it costs less than the other systems.

The Wii costs $249, while the PS3 and Xbox cost $600 and $400 respectively.

The Wii “appears to be the hit gaming product,” Mr. Wilson said.
http://www.nytimes.com/2006/12/15/te...ne r=homepage

ComScore: MySpace Tops Yahoo in November
Anick Jesdanun

The online hangout MySpace got even more popular in November, beating Yahoo in Web traffic for the first time, a research company said Tuesday.

News Corp.'s MySpace recorded 38.7 billion U.S. page views last month, compared with 38.1 billion for Yahoo Inc., according to comScore Media Metrix. MySpace's growth was 2 percent over October and triple the 12.5 billion recorded in November 2005.

The numbers underscore the rapid rise of a social-networking site that encourages visitors to stay and make friends through free tools for messaging, sharing photos and creating personal pages known as profiles.

ComScore warned, however, that a one-month change could represent an aberration. Furthermore, Yahoo's page views could be diminished by the company's growing use of Ajax technology for maps, e-mail and other services. Ajax is a set of tools that speeds up Web applications by summoning snippets of data as needed instead of pulling entire Web pages over and over.

Yahoo, which last week announced a major reorganization after finding itself repeatedly beat in advertising sales by rival Google Inc., still remains the leader in unique audience, with 130 million visitors in November.

"Yahoo continues to be the overall Web audience leader with the largest number of unique users and most time spent online. The page view change in November is related to the use of Ajax and other Web 2.0 technologies across the Yahoo network," Yahoo spokeswoman Nissa Anklesaria said Tuesday.

"These technologies enhance the overall user experience, but do not either generate a page view or qualify to be counted as a page view while the user is engaged with the product," she said,

Fox Interactive Media ranked sixth at 73.8 million, including 57.2 million for MySpace. Unique audience is a measure of how many people visit in any given month; page views reflect how often they come back and how long they stay.

Including other Fox properties such as IGN Entertainment Inc., comScore said Fox had 39.5 billion page views in November. In a statement, Peter Levinsohn, president of Fox Interactive Media, credited strong traffic at game site IGN.com due to the release of Sony Corp.'s PlayStation 3 and Nintendo Co.'s Wii video game consoles.

ComScore had planned to release the numbers Wednesday or Thursday, but word of the figures leaked in an analyst report from UBS Investment Research.

IBM to Open Islands in Virtual World
Rachel Konrad

IBM Corp. is launching an ambitious marketing campaign in the hip virtual world "Second Life."

Big Blue has developed 12 "virtual islands," and most will be open to anyone with a Second Life account starting next week. Other areas will remain private haunts for about 800 IBM employees - including the CEO - who have cyber alter-egos.

Second Life is a subscription-based 3-D fantasy world devoted to capitalism - a 21st century version of Monopoly that generates real money for successful players. More than 1.95 million people worldwide have Second Life characters, called avatars.

At any given time, 10,000 or more avatars may be logged onto Second Life, socializing by instant messages or engaging in virtual pastimes such as flying, dancing, gambling or watching adult videos.

Second Life is notoriously buggy; avatars may spontaneously shed clothing, hair or limbs, and sometimes graphics take several seconds to render. In September, the San Francisco-based company that runs Second Life, Linden Labs, warned that a security breach may have exposed subscribers' data, including credit card numbers and passwords.

IBM's chief technologist, Dr. Irving Wladawsky-Berger, acknowledged Tuesday that virtual-world business is the "experimental stage." Big Blue doesn't expect to generate a profit in Second Life soon.

But the medium is promising - particularly for training and orientation sessions for Armonk, N.Y.-based IBM, which has 330,000 workers worldwide. Two in every five IBM employees work offsite part- or full-time, and it'd be vastly easier to host a virtual meeting than to assemble hundreds of salespeople or engineers in a physical conference room.

The technology is particularly suited to online education - not only for executives but for kids, Wladawsky-Berger mused.

"Perhaps we can make major changes in how to teach kids of all sorts, including kids with disabilities and kids from poorer communities who might be disadvantaged in very 'text oriented' styles of teaching," Wladawsky-Berger's avatar, Irving Islander, said in a public forum hosted by CNet Networks Inc.

IBM spokesman Matthew McMahon said IBM might use Second Life for customer service.

"Instead of me trying to explain in a phone call how to unscrew your hard drive, someone in a more immersive 3D world could actually show you," McMahon said.

Toyota Motor Corp., Adidas AG and American Apparel Inc. have Second Life outposts. But marketing experts say technology companies have the most to gain from virtual worlds. Sun Microsystems Inc., Intel Corp., Advance Publications Inc.'s Wired magazine were Second Life pioneers.

"It gives them access to an audience that is technically literate and creative - that's a defined demographic that's beneficial to the tech business," said Tony Hynes, senior vice president of San Francisco-based Bite Communications, which helped develop Sun's virtual strategy. "For everyone else, it's a highly nascent medium, and I'm not really sure how beneficial it is."

DivX Watches HDTV as its Compression Technology Expands
Michael Kanellos

DivX is finally getting its U.S. breakthrough.

The video compression and playback technology was found in only about 5 percent of U.S. DVDs in the first quarter, but the figure climbed to about 20 percent in the third quarter, according to Jordan Greenhall, CEO of DivX, the company of the same name.
Jordan Greenhall

The lack of DivX players in the U.S. is mostly just a problem of inertia and not part of a plot to keep the technology out of the country, Greenhall said in a meeting prior to annual Consumer Electronics Show in Las Vegas. "It's the DivX conspiracy theory. You can get it in Canada, but you can't get it in the U.S."

Manufacturers don't want to put something on their boxes until they see that buyers want it. That's finally begun to happen, so manufacturers are responding.

The company charges a licensing fee of about $1 to $2 every time a manufacturer loads the company's software onto a device. To date, Europe and Asia have been the more popular geographies for the company.

DivX essentially sells software that lets viewers watch videos encoded with DivX software. Years ago, consumers used it for a vehicle for piracy, and the company was reviled by studios. A few years ago, the company started to more actively support digital-rights management and now works with entertainment companies.

A sign of corporate respectability came this year when DivX held an IPO. The stock went out at $16 in September and now sells for more than $28. (Initially, the company planned to price its shares at between $12 and $14.)

So what will DivX talk about at CES? It wants to branch out into high-definition TV. Blu-ray Disc players and HD DVD players are too expensive for consumers in India or Eastern Europe. The company will try to cut deals with Bollywood executives and film producers in those countries to get them to adopt a high-definition version of DivX, Greenhall said.

"The supply of DivX HD content will be compelling," he said.

The San Diego, Calif.-based company also plans to promote Stage 6, its own video site, at the conference. Professional filmmakers post their movies there--some are known, some are unknown. The site mostly seeks to attract artists who aren't getting mainstream recognition.

"We do outreach to find some of this stuff," he said. "If you have been doing postproduction in Hollywood for 10 years, you've got to have a lot of interesting material. The number of people who make a living in the video industry is pretty big."

One thing that won't likely happen soon, though, is a deal with a studio in the United States. In late 2004, the company said it was negotiating with a couple of major studios, but the deals fell through. "It was kind of depressing. We thought they would be realistic," Greenhall said.

Free-to-Air Copping a Download
Lara Sinclair

AUSTRALIA'S $3.5 billion free-to-air commercial television industry is being threatened by the internet more quickly than expected, with a new online study showing 53 per cent of respondents regularly download TV shows from the internet, most of them illegally.

The research, conducted by University of Sydney honours student Adam Zuchetti, shows one in four people download TV programs twice a week or more, with downloads now the main form of TV viewing for 21 per cent of respondents.

Almost 800 TV fans responded to the survey, which was conducted on local TV websites earlier this year.

The research shows most people know unauthorised downloading is illegal, but 97per cent of downloaders still use peer-to-peer file-sharing sites, commercial websites such as YouTube, and friends as their main sources of content.

According to Zuchetti, people are tired of watching shows when it's convenient for the networks, instead of when it suits them.

"People want more ways to access shows," Zuchetti says. "'I can now get everything I want from channel BitTorrent, so the commercial networks are going to get what's coming to them' -- that is typical of what people are saying."

The research shows 19 per cent of downloaders don't want to wait for local networks to screen their favourite overseas programs, a further 18 per cent time-shift their viewing to watch programs on demand, and another 17 per cent are accessing programs not screened here.

All of the free-to-air networks are experimenting with making clips from programs available over the internet, with Ten's podcasts of its comedy Thank God You're Here just one example.

The network has also screened shows such as The OC and Jericho within 24 hours of their US debut in order to reduce the temptation for fans to go online.

Media buyer Steve Allen from Fusion Strategy says the downloading figures are higher than expected.

According to Free TV Australia, downloading is not affecting viewing levels, which rose 0.7 per cent this year in metropolitan centres.

Allen says while the pressure on the networks is increasing, downloading is unlikely to affect TV viewing by even a single ratings point. "I don't believe that time-shift viewing is going to ... have a major impact on TV," he says. "We've got a couple of examples of shows going to air within 24 hours and it's made no difference to their viewing levels.

"Desperate Housewives, Lost and Prison Break were all available illegally over the internet last year," Allen says. "The minute we get the next stage of true broadband, this will become far more a case not of how many people download content, but how often they do it."

Zuchetti says people who regularly download programs still watch free-to-air TV in order to discuss the shows. "There's a real cultural divide between downloaders and non-downloaders. The downloaders had to come back and see where Australian viewing was up to, so they could contribute to discussions here."

Lost was the most downloaded show, the study revealed, followed by Veronica Mars, House, Prison Break and Dr Who.

Paid downloads are among the options local TV operators are exploring to make more shows available on demand: Yahoo7 has flagged its intention to make fresh episodes of TV shows available over the internet for a price. Ten has meanwhile made clips from Australian Idol available to watch with pre and post-roll video ads.

According to Zuchetti's study, a slight majority (53 per cent) of respondents say they are prepared to pay for content, but one in three will not.

"The most popular option would be to offer the choice of the two: paid, or free downloads with advertising," he says.

Movie review | 'The Good German'

Spies, Lies and Noir in Berlin
Manohla Dargis

In his genre pastiche “The Good German,” Steven Soderbergh has tried to resurrect the magic of classical Hollywood, principally by sucking out all the air, energy and pleasure from his own filmmaking. Based on the well-regarded Joseph Kanon novel, this film stars a distracted, emotionally detached George Clooney as Jake Geismer, an American journalist who, following World War II, returns to Germany to check out the doings at Potsdam and find his lost love, Lena, a frau who, as played by a vamping Cate Blanchett, recalls Rainer Werner Fassbinder’s postwar heroine Veronika Voss by way of Carol Burnett.

As it turns out, they don’t make them like they used to even when they try. Mr. Soderbergh has explained that with “The Good German” he was seeking to make a film that looked and sounded like an old studio picture, but without the old studio prohibitions. In the name of verisimilitude and creative freedom, his actors talk a blue streak in black-and-white images captured with period-era camera lenses. More lewdly, Tobey Maguire, who plays Tully, one of those smiling sadists of the type once played by Dan Duryea, helps the film earn its R rating by doing the kinds of things to Ms. Blanchett that audiences could only dream of doing to Ingrid Bergman. Here’s looking at you kid, flung over the bed and on your knees.

With one startling and critical difference, Paul Attanasio’s screenplay follows the general direction of Mr. Kanon’s novel, which, embroidered with historical detail, zeroes in on the mid-1940s moment when the United States and the Soviet Union were racing to scoop up German scientists in preparation for the long, cold war to follow. The novel stacks up the various acts of wartime violence — genocide, carpet bombing, postwar raping and pillaging committed by the respective German, American and Soviet players — as if they were poker chips. In this game of high-stakes moral relativism, the Germans clearly have amassed the most chips (six million and counting), though the thuggish Soviets and slick, smiling Americans are doing their best to catch up.

Mr. Attanasio, whose credits include “Quiz Show,” attempts to work all this murk and mess into a compressed screenplay that also leaves room for the stars. When not chasing after Lena, Jake races around the impressively dilapidated sets trying to put all the geopolitical pieces together. When an American soldier winds up dead in Potsdam, Jake thinks he has the makings of an ideal you-are-there story. His zigzag pursuit of his long-cooled love quickly dovetails with a boiling-hot story involving Nazi war crimes, the details of which are helpfully provided by assorted secondary types, including Beau Bridges as the American military officer running part of Berlin, Leland Orser as an American Jew hunting down Nazis and Ravil Isyanov as a watchful Soviet officer.

Despite Mr. Soderbergh’s attempt to mimic the classic studio style, notably through the deliberate editing patterns and fairly restrained camerawork, “The Good German” bears little resemblance to a Hollywood film of the period. Tonally his cinematography is particularly off-key, characterized by hot whites and inky blacks that can put faces into harsh light and swallow bodies whole; neither Ms. Blanchett nor Mr. Clooney is flattered by his attentions. Although he tosses in an occasional beauty shot, framing Jake against a mottled nighttime sky in one scene, the film’s high-contrast austerity owes more to the anti-aesthetic of the modern art house than it does to the back-lot Expressionism of Hollywood noirs or one of the filmmaker’s favorite touchstones, “The Third Man.”

In “Casablanca,” another of the golden oldies Mr. Soderbergh samples for “The Good German,” Humphrey Bogart cozies up to Bergman in flashback on a Parisian bed. The lovers remain dressed throughout their abbreviated affair, though one suggestively uncorked bottle of Champagne and several coy dissolves suggest realms of adult possibility. Yet while the language routinely waxes raw in “The Good German,” the most striking difference between it and a Hollywood film like “Casablanca” aren’t the expletives, the new film’s calculated cynicism or even that glimpse of bedroom coupling; it’s that the older film feels as if it was made for the satisfaction of the audience while the other feels as if it was made for that of the director alone.

In the film laboratory that is Mr. Soderbergh’s brain, ideas boil, steam and sputter. In 1989 he conquered Cannes and launched a thousand Harvey and Bob Weinstein stories with his independently financed sensation “Sex, Lies and Videotape,” quickly becoming a legend before his time. He subsequently flopped and floundered before he brought his independent ways to bear on the studio apparatus, a metamorphosis that involved turning a television actor into the sexiest man alive, repurposing the Rat Pack and winning an Oscar.

It has been a second act that, until recently, seemed as smart as the man living it but that has grown gradually more disjointed as Mr. Soderbergh’s penchant for experimentation has become an end in itself rather than a means to aesthetic liberation. That’s too bad for us, for him and for Hollywood, which frankly could use all the help it can get.

In a recent interview Mr. Soderbergh said that he would have been happy with a career like that of Michael Curtiz, a workhorse who spent decades churning out entertainments like “Casablanca” for Warner Brothers. The idea that the extremely self-motivated Mr. Soderbergh might be satisfied with a career like Curtiz’s is rich nonsense. Curtiz had next to no say on the personnel who worked on “Casablanca.” By contrast, for “The Good German” Mr. Soderbergh persuaded the same studio, now owned by a media conglomerate for which movies represent only a thin slice of the pie chart, to cough up millions for what is essentially a pet art project.

Increasingly, Mr. Soderbergh’s oscillation between glossy divertissements like the “Ocean’s” films and modest diversions like “Bubble” seems less like the natural workings of a restless imagination than a disengaged one. Even more than “Bubble” or “Ocean’s Twelve,” “The Good German” feels like the product of a filmmaker far more interested in his own handicraft — in the logistics of moving the camera among the characters with a dip and a glide — than in the audience for whom he’s ostensibly creating that work.

Manufactured for mass enjoyment, “Casablanca” runs wonderfully more than half a century after leaving the factory. It’s sentimental and contrived. It’s also the kind of well-wrought, pleasurable film that Mr. Soderbergh can do beautifully (see “Out of Sight”) and seems recently reluctant to pursue.

The extent of that disengagement is most evident in the new film’s wildly feel-bad denouement, in which the paradoxically good German of Mr. Kanon’s title, the one who looked away from atrocities, is transformed into a duplicitous Jew. The most charitable explanation for this offensive, historically spurious character is that Mr. Soderbergh and Mr. Attanasio, in trying to cram the novel’s nearly 500 pages into a 105-minute film, decided to conflate two different clichés into one.

Rather unfortunately, and perhaps with an eye to the present, they end up suggesting that in wartime everyone’s hands can become slicked with blood, even a Jew in Nazi Germany. Somewhere, Jack and Harry Warner, who stopped doing business with Nazi Germany before any other studio in Hollywood, are spinning. They aren’t the only ones.

“The Good German” is rated R (Under 17 requires accompanying parent or adult guardian). The film includes some gun violence and fisticuffs, a little sex and a lot of raw language.


Opens today in New York, Los Angeles and Toronto.

Directed by Steven Soderbergh; written by Paul Attanasio, based on the novel by Joseph Kanon; director of photography, Mr. Soderbergh (under the name Peter Andrews); editor, Mr. Soderbergh (under the name Mary Ann Bernard); music by Thomas Newman; production designer, Philip Messina; produced by Ben Cosgrove and Gregory Jacobs; released by Warner Brothers Pictures. Running time: 105 minutes.

WITH: George Clooney (Jake Geismer), Cate Blanchett (Lena Brandt), Tobey Maguire (Tully), Beau Bridges (Colonel Muller), Tony Curran (Danny), Leland Orser (Bernie), Jack Thompson (Congressman Breimer), Robin Weigert (Hannelore) and Ravil Isyanov (General Sikorsky).

Movie Review | 'Automatons'

Defending the Human Race With Old Spare Parts
Jeannette Catsoulis

With its retro look, cautionary theme and not-so-special effects, “Automatons” is a shameless ode to ’60s sci-fi and classic television shows like “Lost in Space” and “The Outer Limits.” Shot in silvery black-and-white with old 8-millimeter cameras, the movie depicts a blasted, depopulated future in which the few remaining humans wage a remorseless war of competing beliefs.

Yet this evocation of a time before C.G.I. and other technical marvels is more than just the nostalgic reframing of a current ideological impasse. As we watch a lone young woman (Christine Spencer) live out her life in a crumbling laboratory, endlessly repairing an ever-dwindling army of clunky robots, the movie’s loving attention to light and shade transcends its hermetic setting and meager budget. At times the buzzing static and fizzy backlighting recall the glistening surrealism of the filmmaker Guy Maddin, while the decaying mise-en-scène effectively suggests a planet — and a species — exhausted by human conflict.

Written and directed by James Felix McKenney, “Automatons” is driven less by its hints of suicide bombers than by its rigorous adherence to a time when robots were played by inverted dustbins and battles were represented by dots converging on a crackling screen. This lack of sophistication is enormously endearing, leaving us with the comforting notion that the end of the world will look a lot like the beginning of television.


Opens today in Manhattan.

Written, directed and edited by James Felix McKenney; director of photography, David W. Hale; music by the Noisettes with score by Noah DeFilippis; produced by Lisa Wisely and Mr. McKenney; released by Glass Eye Pix. At the Two Boots Pioneer Theater, 155 East Third Street, at Avenue A, East Village. Running time: 83 minutes. This film is not rated.

WITH: Christine Spencer (the Girl), Brenda Cooney (the Enemy Leader), Angus Scrimm (the Scientist), Noah DeFilippis (the Companion Robot), Don Wood (the Helper Robot), John Anthony Blake (the Communications Captain) and Larry Fessenden (Enemy Guard).

'Amateur' Night

An unrefined musician uses stop-motion video to play a catchy tune
Aaron Rutkoff

Lasse Gjertsen's YouTube video has no spoken language, zero sudden injuries and nothing in the way of narrative or pop-culture reference. No copyrighted material was harmed in the making of this film.

Yet, in just a month, "Amateur" has been viewed more than 1.5 million times, according to YouTube's tally, and the video earned the highest user ratings over that span -- making it a certified viral-video hit.

The title of Mr. Gjertsen's successful submission refers to his skill at playing musical instruments. By calling himself an amateur, Mr. Gjertsen also inflates his stature as musician -- the star performer can't play a lick. But in the three-minute video, the Norwegian weaves together a drums-and-piano duet, creating a knee-bouncing tune that substitutes crafty editing for the instrumental skills Mr. Gjertsen lacks. His trick: stop-motion video.

In the Basement

The movie opens with a borrowed drum kit sitting in a wood-paneled suburban basement in Mr. Gjertsen's hometown of Larvik, Norway. He enters stage right dressed in formal attire -- prepared to conduct a symphony, perhaps -- and proceeds to fumble with the drums for a few moments. How much of this is acting or actual ineptness isn't known, but the would-be percussionist certainly looks uncomfortable at the controls.

Suddenly, the image leaps into herky-jerky motion as Mr. Gjertsen repeatedly slams his drumstick into the kit. Each disjointed drumbeat, including some distinct sounds created by Mr. Gjertsen hitting himself in the head with a drumstick, was captured individually.

Mr. Gjertsen stitched together and rearranged dozens of individual clips to create a smooth backbeat. Through blisteringly fast editing, Mr. Gjertsen is heard performing dazzling feats of syncopation -- all while his body is strangely out of synch.

After a minute-long drum solo, Mr. Gjertsen strikes a chime and the screen splits in two. A second Mr. Gjertsen -- dressed in dorky sportswear replete with wristbands -- takes a seat at a piano. Mr. Gjertsen and his clone proceed to perform a duet of stop-motion pop music, with the piano melody fitted perfectly with the drumbeat. At one point, the drummer stops for a smoke while the pianist lets loose a disorderly shuffle up and down the keyboard.

"I have some music sensibility," the 22-year-old Mr. Gjertsen admits. He self-produced his own album of electronica music, but it was made entirely of computerized samples and without any interference from physical instruments. "I cannot play the piano or the drums."

To make "Amateur," Mr. Gjertsen recorded each analog beat and note one by one on video. He transferred the sounds from each video clip into audio files, which he could rearrange with the Fruity Loops sound-editing program -- the same software he's used to create his all-digital music in the past.

After organizing the sound files into the right order, Mr. Gjertsen reconstructed the pattern with the original video files. In the final product, he insists, nothing about his performance was digitally enhanced. "You have the original sounds from the video," he says.

The finished video, with its rapid-fire barrage of clips, seemed impossibly tedious to construct. Not true, Mr. Gjertsen admits. The drum portion consists of only 40 distinct beats, which didn't take too long to arrange. The piano melody was a different story: "That was about 130 different clips," he explains. A single note or cord, once captured on video, might be used several times in the video. But to create the effects of his body sliding up and down the piano bench took substantial efforts at choreography.

Plus, Mr. Gjertsen adds, it's not as if he has the ability to play the melody straight through, from the opening note until the last. "I didn't play the song in slow motion and just cut it together," he says. Even now, after all his tinkering with the melody, Mr. Gjertsen says he can't duplicate the one-note-at-a-time opening of the piano segment in real time.

The whole project -- from planning to filming to editing -- took two days to complete. He released "Amateur" via YouTube on Nov. 7.

Rejection as Motivation

Mr. Gjertsen created his first stop-motion music video three years ago while studying animation at a British art school. In that video, called "Hyperactive," Mr. Gjertsen created individual beats using only his mouth.

The result -- much more annoying than "Amateur" -- has also become popular on YouTube since its release last May. (The human-beatbox-via-stop-motion-video act was popular enough to be used in a commercial for Cartoon Network's show "Foster's Home for Imaginary Friends.")

As a homework assignment, however, it wasn't well received.

The teacher "didn't like it all," Mr. Gjertsen recalls bitterly. Academic rejection, both at the British school and back at an animation program in Norway, left Mr. Gjertsen out of sorts. He filled his hours watching "South Park" and "The Simpsons."

"That's what I did last year," he says. "But then this 'Amateur' video happened and I'm getting so much positive feedback -- job offers and everything." Mr. Gjertsen says he just returned from Italy, where he began work on music-video project. He credits the high visibility of "Amateur" for landing him the job.

Mr. Gjertsen's story of YouTube redemption isn't quite a rags-to-riches saga -- for the time being, the former student is back at home living with his folks. But it's another example of the video-sharing site's impact. Without YouTube's easy-access mass audience, Mr. Gjertsen probably wouldn't have bothered creating "Amateur." And even if he had, it's likely only a few people would have seen it buried somewhere on an obscure Web site.

How did "Amateur" find such a large and largely approving audience in just a month? Mr. Gjertsen isn't all that interested in analyzing his sudden popularity. But it's possible that the language-free aspect of his music video played a strong role, given the globalization of Web entertainment. The most-watched video in YouTube's history is "The Evolution of Dance" by "inspirational comedian" Judson Laipply. The video has taken more than 36 million viewers on an interminably long dance medley spanning Presley to Timberlake (sans lyrics).

According to New York Times writer Virginia Heffernan, who has puzzled over the enduring popularity of "Dance," the video's mass appeal comes from its absolute lack of English-language dialogue. "That's its secret: It's a silent movie. With a soundtrack," she wrote in October on her online-video blog. "'Evolution' plays in Asia. Remember Asia? Where 60% of the world's population lives?" There's no telling in what parts of the world Mr. Gjertsen's work has found an audience. But a sampling of video responses and comments (more than 4,600 and counting) suggests a global viewership.

And what about that art school teacher who dismissed Mr. Gjertsen's original stop-motion music video? Does he know about Mr. Gjertsen's rise to prominence on YouTube? "I hope so! I really hope so," Mr. Gjertsen says. "I haven't heard anything from him though."

The D.J. Who Moves the Movers and Shakers
Eric Konigsberg

Somewhere between eating the caviar wraps and ducking outside to smoke his fifth Dunhill International Mild Blue of the evening, Tom Finn realized he was going to be O.K.

This was last weekend, at the New York Botanical Garden’s annual holiday benefit, the Winter Wonderland ball. Mr. Finn, who for almost every year in its nine-year history has been the D.J. of the event, had left his platform at the edge of the dance floor — where he’d been laying out some of his musical selections in advance — to mosey around the conservatory for cocktail hour.

“This is unnerving — the group has really turned over the past year or two,” Mr. Finn said. “I don’t know who this set is.”

But as he stood near the bar to get his bearings, he recognized a friendly face, and then a few more. He winked at Tara Rockefeller. Then Alexandra Lind Rose, whom Mr. Finn identified as a member of “the A-crowd, obviously,” told him it was nice to see him again. Another such lady, Alexandra Kramer, came over to administer an air kiss.

“You’re gorgeous, baby,” Mr. Finn told her.

Yes, he was going to be O.K.

Mr. Finn has reigned as the court D.J. to New York’s high society for more than a decade. “About seven years ago, Vogue called me the new Lester Lanin,” he said. “It’s different, because he led an orchestra and I’m playing CDs, but the social role is the same.”

Mr. Finn certainly knows his way around plates of jellied madrilène and the distinctions among black tie, white tie, morning dress and national costume. Working an average of 70 nights a year, and charging from $5,000 to $12,000 a night, he is as much a fixture of first-tier benefits and galas as the Boardmans (Serena and Samantha), the Hearsts (Amanda and Lydia) and the young lady known to some as the Tinz (that’s Tinsley Mortimer, or Mrs. Robert Livingston “Topper” Mortimer, to you).

He has been the D.J. for everything from the New York City Ballet’s opening-night benefit last month to the Young Fellows of the Frick Collection’s gala to the Metropolitan Museum of Art’s annual Costume Institute ball. He played at the 1995 wedding of Crown Prince Pavlos of Greece and Marie-Chantal Miller, the middle daughter of Robert W. Miller, the duty-free shopping tycoon.

“A lot of people hire a D.J. instead of a band nowadays for the flexibility,” said Dayssi Olarte de Kanavos, a philanthropist and a local floor-committee stalwart. “If a band isn’t a hit with the audience, it’s difficult for them to change. Tom is very good at reading a crowd.”

Jill Kargman, a novelist, a screenwriter and a staple of the charity-ball circuit (her father is Arie Kopelman, the chief executive of Chanel), said, “The great thing about him is he doesn’t aspire to be some kind of a turntablist.

“He basically says to this set, ‘I’m perfectly happy playing Michael Jackson, and you can get up there and do your white-man’s overbite,’ ” she said.

For his part, Mr. Finn attributes his successful run much more to party skills than to musical instincts, or even taste (though he possesses those as well). And for an evening to be successful, he says, his single goal — getting as many people as possible to dance — depends on a familiarity with his audience.

“The women are young this year, but they’re all wearing white fur stoles — very fancy, obviously,” said Mr. Finn, who is 58 and nearly bald and wears Buddy Holly-style glasses with tinted lenses.

These simple observations, he said, signaled him to start with a standby at the Winter Wonderland ball. As the guests, most of them married couples, glided single-file into the heated tent where the dinner was to be served, Mr. Finn donned his headphones, played the Leroy Anderson Pops Orchestra standard “Belle of the Ball,” and waved his hands like a symphony conductor.

Photographers from the society pages snapped away. The women stopped, turned, tossed their heads, smiled. It was glamorous enough to make one wonder if a moment like this was an implicit promise of the $5,000-a-table fee.

“It’s not that hard, actually,” Mr. Finn said, permitting himself a moment’s satisfaction. “These people don’t want anything very uptempo at first, but the women still need to feel sexy, sexy, sexy. I’m scoring the mating rituals for today’s society. You can call these parties whatever you want, but it’s really a WASP breeding party.”

Mr. Finn describes himself as a teenage runaway from Brooklyn who spent time in foster care, and he is quick to acknowledge that his chosen milieu was always an object of wonder as well as his intended destination. “When I was young, I used to go to the library and read about Princess Grace Kelly,” he said. “I fantasized about rich people and their big mansions.”

It was rock ’n’ roll that provided the first means of escape. In 1965 when he was 16, he formed the band the Left Banke, with three friends in Greenwich Village. He played bass and traded off on vocals, and although the group disbanded after recording only one album, they did score a Top-5 hit the next year with the single “Walk Away Renee.”

The song — you’ve heard it, whether you realize it or not — was written about Mr. Finn’s girlfriend at the time (Renee), and a couple of years ago was ranked by Rolling Stone as the 220th greatest rock song ever written (No. 221 was “Walk on the Wild Side” by Lou Reed; No. 222: “Oh, Pretty Woman,” by Roy Orbison). It is especially memorable for a baroque string arrangement and the flute solo.

A chance encounter with Steve Rubell in 1982 led to a guest job spinning records at Studio 54, and thus Mr. Finn’s D.J. career was born.

At the Wonderland ball, he kicked off the dessert hour with Yvonne Elliman’s “If I Can’t Have You,” then, halfway through it, segued into “Can’t Get Enough of Your Love, Baby” by Barry White. Three couples took to the dance floor and did a few modest twirls.

Michael Jackson’s “Don’t Stop ‘Til You Get Enough” prompted a few more women to drag their husbands and dates onto the checkerboard, and they held the trains of their dresses and swung their elbows. Mr. Finn played “Bad Girls” by Donna Summer — “Paris Hilton’s mother loves when I play this, and I always play it with the vocals low, because she likes to take the microphone and sing over it,” he said — and then Madonna’s “Vogue,” “Dancing Queen” by Abba and “Bust a Move” by Young MC.

By the time he got to “What I Like About You” by the Romantics, just about everybody who was still in the tent — perhaps 175 of the original 250 guests — was cutting a rug. In particular, Chris Cuomo of “Good Morning America,” whose wife, Cristina, was one of the evening’s co-chairwoman, seemed to be living out several rock ’n’ roll fantasies at once.

“I learned at Studio that yuppies really like to dance to the music of their adolescence,” Mr. Finn said, as if to apologize for the lack of originality in his selections. “It’s not my job to educate them.”

Nearly two hours later, Mr. Finn closed with Roxy Music’s “Avalon,” threw on his overcoat, and ran to his car before the song had even finished. “I like to get out before anybody can start making those ‘just one more song’ requests,” he said. “The thing with this crowd is, both sides should know not to wear out their welcome.”
http://www.nytimes.com/2006/12/16/ny...n er=homepage

Revisiting a Bleak Album to Plumb Its Dark Riches
Ben Sisario

Lou Reed refers to it with an understatement that borders on dismissal.

“It was just another one of my albums that didn’t sell,” he said dryly at a West Village cafe recently.

But get him talking a little — and a little talk is all one can expect from Lou Reed — and it becomes clear that “Berlin,” his bleak, Brechtian song cycle from 1973, which he is performing in full for the first time at St. Ann’s Warehouse in Brooklyn for four nights beginning tomorrow, is a treasured high point in a what has been a lifelong project of pushing at the aesthetic boundaries of rock ’n’ roll.

“It’s a great album,” he said. (He has also called it a masterpiece.) “I admire it. It’s trying to be real, to apply novelists’ ideas and techniques into a rock format.” He mentioned William S. Burroughs, Hubert Selby Jr., Allen Ginsberg and Raymond Chandler as literary models.

“But it sounds so pretentious saying that.” he added. “It just sounds too B.A. in English. Which I have. So there you go.”

Mr. Reed has gathered a starry group of friends to help turn “Berlin” into a semitheatrical, multimedia performance. Julian Schnabel has created sets and will be filming the show, and Mr. Schnabel’s daughter Lola has shot film scenes with the French actress Emmanuelle Seigner, which will be projected onto the stage. Bob Ezrin, who produced the original album, will be doing musical direction with Hal Willner. The indie darling Antony will appear with a children’s choir and will also sing backup with Sharon Jones, queen of the local retro-soul scene.

For Lou Reed fans it is a dream come true, and the concerts have long been sold out. But Mr. Reed, now 64, said he is surprised that many listeners remember the record at all.

Sometimes called the most depressing album ever made, “Berlin” is the story of Caroline and Jim, a lowlife couple in the title city — she is promiscuous, he beats her, and they both do lots of drugs — and the tragic dissolution of their relationship. The demimonde of drugs and sadomasochism glamorized in songs by the Velvet Underground, Mr. Reed’s visionary 1960s avant-rock band, is shown with miserable consequences, as in “The Bed,” when Caroline commits suicide and Jim remains bitterly numb:

This is the place where she lay her head

When she went to bed at night ...

And this is the place where she cut her wrists

That odd and fateful night

And I said oh, oh, oh, oh, oh, oh, what a feeling

The album was made at a high point in Mr. Reed’s career. His second solo record, “Transformer,” produced by David Bowie and released in 1972, had become a glam-rock keystone, and the song “Walk on the Wild Side,” from that album, was a major hit. (It remains his only song to have reached the Top 40.) Looking to continue Mr. Reed’s commercial success, his record label enlisted Mr. Ezrin, who, though only 23, had already made several hit records with Alice Cooper.

“The expectation was that I was going to do something very commercial with him,” Mr. Ezrin said from his office in Toronto. “Sort of Alice Cooper-ish, real mainstream. In reality I had become mesmerized by the poetry and by the art of Lou. Maybe I lost sight of my mandate. Honestly I can look back and say I probably didn’t do what I was hired to do.”

Recorded in London with a group of high-profile musicians including Steve Winwood and Jack Bruce, the songs of “Berlin” are rock filtered through a Brecht-Weill sensibility, with piano at the center of arrangements for band, horns and strings. Songs like “The Bed” and “The Kids” are among the most joyless Mr. Reed has ever recorded, but also some of his most delicate and intense.

The album has a narrative that stretches over 10 songs, and Mr. Reed and Mr. Ezrin had dreams of staging it. “We were bordering on genius with this work,” Mr. Ezrin said. “We were doing things that you’re just not supposed to do with rock music.”

But the album was, as Mr. Reed puts it, “a monumental failure at the time it came out — commercially, critically, you name it.” Reviewers savaged it. A reviewer for Rolling Stone, appalled at its seediness, called it “a disaster”; one critic described the vocals as “like the heat-howl of the dying otter.” (Not all writers were so cruel, though. John Rockwell of The New York Times praised it as “one of the strongest, most original rock records in years,” and Rolling Stone took the unusual step of publishing a rebuttal to its own review, saying that “prettiness has nothing to do with art, nor does good taste, good manners or good morals.”)

Though it stalled at No. 98 on the charts and drifted in and out of print, over time “Berlin” has built a passionate cult audience. One of its most ardent fans is Mr. Schnabel, who called the album the soundtrack to his life. “This record was the embodiment of love’s dark sisters: jealousy, rage and loss,” he said. “It may be the most romantic record ever made.”

For the show at St. Ann’s Warehouse, which is being co-produced with the Sydney Festival in Australia (where “Berlin” travels next month), Mr. Schnabel has created sets based on some of his recent paintings, which are meant to evoke the “greenish walls” of the fleabag hotel where Caroline lives. “Lou calls it the Berlin Wall,” he said.

“Berlin” also became a life’s accompaniment of a different sort for 25-year-old Lola Schnabel. “I just remember that soundtrack at the moment my parents were getting divorced,” she said. “It wasn’t that the music was disturbing; it was what was happening with the music. But it’s part of my childhood.”

The album was recorded when Mr. Reed’s own first marriage was collapsing. “This kind of anger didn’t come from a made-up place,” Mr. Ezrin said. “It is from deep within Lou’s psyche. We’ve all been through relationships where we’ve been disappointed by a partner and been hurt and wanted to hurt them back.”

When asked about the circumstances of its creation, Mr. Reed said, “I don’t remember.”

After years of prodding from Susan Feldman, the artistic director of Arts at St. Ann’s, which operates St. Ann’s Warehouse, to perform the album, Mr. Reed relented once he saw how dearly it was loved by Mr. Schnabel and other of his friends. “I just never wanted to do it,” he said. “I wasn’t itching to do anything in particular. I usually just try to do new things.”

As for the title, Mr. Reed is typically blunt when asked why he chose to set the story in the once-divided city of Berlin instead of, say, New York.

“I’d never been there,” he said. “It’s just a metaphor. I like division.”

Ahmet Ertegun, Music Executive, Dies at 83
Tim Weiner

Ahmet Ertegun, the music magnate who founded Atlantic Records and shaped the careers of John Coltrane, Ray Charles, the Rolling Stones, Led Zeppelin and many others, died yesterday in Manhattan. He was 83.

A spokesman for Atlantic Records said the death was the result of a brain injury suffered when Mr. Ertegun fell backstage at the Beacon Theater in Manhattan on Oct. 29 as the Rolling Stones prepared to play a concert that marked former President Bill Clinton’s 60th birthday. He had been in a coma since then.

“Few people have had a bigger impact on the record industry than Ahmet,” David Geffen, the entertainment mogul, said yesterday in a telephone interview from Los Angeles, “and no one loved American music more than he did.”

Mr. Geffen said that Mr. Ertegun “started me in the record business” in 1970 by helping to finance his first record company, Asylum, “just as he gave many independent entrepreneurs the chance to start their own companies.”

Mr. Ertegun was the dapper son of a Turkish diplomatic family. He was equally at home at a high-society soiree or a rhythm and blues club, the kind of place where, in the 1950s, he found the performers who went on to make hits for Atlantic Records, one of the most successful American independent music labels.

He was an astute judge of both musical talent and business potential, surrounding himself with skillful producers and remaking R&B for the pop mainstream. As Atlantic Records grew from a small independent label into a major national music company, it became a stronghold of soul, with Aretha Franklin and Otis Redding, and of rock, with the Stones, Led Zeppelin and Yes.

Ever conscious of the music’s roots, Mr. Ertegun was also a prime mover in starting the Rock and Roll Hall of Fame and Museum. In a music career marked by numerous lifetime achievement awards, he was inducted into the hall in 1987.

Mr. Ertegun said he fell in love with music when he was 9. In 1932, his older brother, Nesuhi, took him to see the Duke Ellington and Cab Calloway orchestras at the Palladium Theater in London. The beauty of the jazz, the power of the beat and the elegance of the musicians made a lasting impression.

His instincts were not impeccable. He lost out on chances to sign the Beatles and Elvis Presley. But in an industry in which backstabbing is commonplace, Mr. Ertegun was admired as a shrewd businessman with a passion for the creative artists and the music he nurtured.

Along with a partner, Herb Abramson, Mr. Ertegun founded Atlantic Records in 1947 in an office in a derelict hotel on West 56th Street in Manhattan. His initial investment of $10,000 was borrowed from his family dentist.

By the 1950s, Atlantic developed a unique sound, best described as the mixed and polygamous marriage of Mr. Ertegun’s musical loves. He and his producers mingled blues and jazz with the mambo of New Orleans, the urban blues of Chicago, the swing of Kansas City and the sophisticated rhythms and arrangements of New York.

Mr. Ertegun often signed musicians who had been seasoned on the R&B circuit, and pushed them toward perfecting their performances in the recording studio. Every so often, with his name spelled in reverse as Nugetre, Mr. Ertegun appeared as the songwriter on R&B hits like “Chains of Love” and “Sweet Sixteen.”

In 1954, Atlantic released both “I Got a Woman” by Ray Charles and “Shake, Rattle and Roll” by Joe Turner. (Mr. Ertegun was a backup singer on “Shake, Rattle and Roll.”) The songs had a good beat, and people danced to them. They were among the strongest roots of rock and roll.

After his brother Nesuhi joined Atlantic in 1956, the label attracted many of the most inventive jazz musicians of the era, including Coltrane, Charles Mingus, the Modern Jazz Quartet and Ornette Coleman. In 1957, Atlantic was among the first labels to record in stereo.

By the 1960s, often in partnerships with local labels like Stax in Memphis, Mr. Ertegun was selling millions of records by the leading soul musicians of the day, among them Ms. Franklin and Mr. Redding. Ms. Franklin had recorded previously for Columbia Records, but her hits for Atlantic — which merged her gospel roots with an earthy strength and sensuality — were the ones that made her the Queen of Soul.

Mr. Ertegun’s music partnerships, he sometimes pointed out, were often culturally triangular. He was Turkish and a Muslim by birth. Many of his fellow executives, like the producer Jerry Wexler, were Jewish. The artists they produced, particularly when the label began, were black. Together, they helped move rhythm and blues to the center of American popular music.

Mr. Ertegun and Ioana Maria Banu were married on April 6, 1961. Known as Mica, she became a prominent interior designer. She survives him, as does a sister. Nesuhi Ertegun died in 1989.

The Ertegun brothers and their partner, Mr. Wexler, sold the Atlantic label to Warner Brothers-Seven Arts in 1967 for $17 million in stock. Four years later, the brothers took some of the money and founded the New York Cosmos soccer team.

But Mr. Ertegun kept making records. When Kinney National Service — a conglomerate of parking lots, funeral parlors, rental cars and other unmusical enterprises — completed the acquisition of Warner Brothers-Seven Arts in 1969, he and his label kept going.

Mr. Ertegun was now a rock mogul. Atlantic Records signed the Stones to a distribution deal when the band’s contract with Decca Records ended; Led Zeppelin; and Crosby, Stills & Nash, who became Crosby, Stills, Nash & Young after Mr. Ertegun persuaded Neil Young to join the group. The corporations changed — Kinney turned into Warner Communications, which became Time Warner — but Atlantic and its founder still flourished.

It remained one of the only record labels of the 1940s to survive the multibillion-dollar mergers and acquisitions of the 1990s in more than name only, with its founder still in charge. Mr. Ertegun reduced his daily corporate duties in 1996 but remained an inveterate night-clubber, avid concertgoer and insatiable music maven well into his 80s.

Ahmet Ertegun was born in Istanbul on July 31, 1923. His father, Mehmet Munir, was the legal counselor to Kemal Ataturk, the founder of modern Turkey.

In 1925, Ataturk sent the elder Ertegun to serve as the Turkish representative to the League of Nations. In the next 20 years, he was the Turkish ambassador to Switzerland, to France, to the Court of St. James under King George V and to the United States during the Roosevelt administration. The young Ahmet grew up in that worldly realm. His father, then the dean of the diplomatic corps in Washington, died in 1944.

That year, at 21, having earned a bachelor’s degree at St. John’s College in Annapolis, Md., Mr. Ertegun was taking graduate courses in medieval philosophy at Georgetown University.

“In between, I spent hours in a rhythm and blues record shop in the black ghetto in Washington,” he told the graduates of Berklee College of Music in Boston on receiving an honorary degree in 1991. “Almost every night, I went to the Howard Theater and to various jazz and blues clubs.”

“I had to decide whether I would go into a scholastic life or go back to Turkey in the diplomatic service, or do something else,” he said. “What I really loved was music, jazz, blues, and hanging out.” And so, he told the students, he did what he loved.


A Mogul Who Helped Mold Pop Culture
Jon Pareles

The sheer improbability of Ahmet Ertegun’s career makes it an all-American success story: the tale of an outsider, from Turkey no less, who loved African-American music so much that he became a major force in pop history. Points of friction in American culture — class, ethnicity, race, religion — mostly provided him with sparks.

Mr. Ertegun, who died on Thursday at 83, was an old-school music mogul, a self-invented character with the urge to start a record company. He was, by all accounts, a charmer: a man of wealth and taste who had stories to tell, a shrewd business sense and a keen appreciation of all sorts of pleasure. He wasn’t a musician, but he had an ear for a hit, one that served him for half a century.

When Mr. Ertegun and a partner floated Atlantic Records in 1947 with a $10,000 loan from a dentist, it was one among many small independent labels trying to serve the taste of postwar America. But as the others had their handfuls of hit singles and disappeared, Atlantic kept growing. With Mr. Ertegun as chairman, the job he held until his death, it was a major label by the 1960s, the home of multimillion-sellers like Led Zeppelin and the Rolling Stones in the 1970s and the core of the Warner Music conglomerate that continues to survive in the currently embattled recording business.

David Geffen, the entertainment mogul, said yesterday that he had once asked Mr. Ertegun how to make money in the music business. Mr. Ertegun said he would demonstrate, got up from his chair, hunched over and shuffled slowly across the room. Mr. Geffen didn’t understand, so Mr. Ertegun did it twice more. Finally he explained: “ ‘If you’re lucky, you bump into a genius, and a genius will make you rich in the music business,’ ” Mr. Geffen recalled. “Ahmet bumped into an awful lot of geniuses.”

He looked for those geniuses in places where no one would expect to find the European-educated son of a Turkish diplomat. Living in a segregated Washington, Mr. Ertegun was drawn to jazz and to rhythm and blues, and he began a lifetime habit of going to dives to hear the real thing. Mr. Ertegun moved easily between high society and the kind of ghetto basement club where he first heard Ruth Brown, whose hits through the 1950s were the label’s bulwark. He sought out singers who had something startling, something untamed, in their voices: singers like Ms. Brown, Ray Charles, Clyde McPhatter, the Coasters, Solomon Burke and Aretha Franklin.

He cherished the down-home passion he heard. But his outsider’s ear may have helped him produce music that could aim for an audience beyond what the record business was calling “race music.” Even on low-budget recordings — for years, Atlantic’s Midtown Manhattan business office by day was its recording studio by night — he and his control-room collaborators sought a sonic clarity and definition that made Atlantic’s singles stand out on the radio. Unlike his 1950s contemporaries at Chess Records (home of Chuck Berry) and Sun Records (where Elvis Presley made his debut), Mr. Ertegun didn’t gear Atlantic’s songs particularly toward teenagers. Although Ruth Brown sounded girlish in a song like “(Mama) He Treats Your Daughter Mean,” many of Atlantic’s 1950s rhythm and blues songs were simply steeped in the blues.

Part of what Mr. Ertegun also heard in his cherished singers was the sound of the gospel church. Mr. Charles merged the beat and the call-and-response of sanctified church music with considerably more secular implications in songs like “What’d I Say.” Mr. Ertegun, who was born a Muslim, worked with church-rooted African-American musicians and Jewish producers, notably Jerry Wexler, on many Atlantic hits; that interfaith coalition helped forge soul music. Before her stint at Atlantic, Ms. Franklin had made albums for Columbia Records, but she had sung ballads and jazz standards. When she recorded for Atlantic, her sound moved back toward the church and she became the Queen of Soul.

After the 1950s, Mr. Ertegun was more a deal maker than a control-room producer. But his ear stayed reliable. Atlantic picked up the Southern soul of Otis Redding and Wilson Pickett, and when British rockers began recycling American blues and rhythm and blues, he latched on to bands like Cream and Led Zeppelin. Atlantic’s R&B pedigree helped bring the Rolling Stones to the label for their commercial heyday in the 1970s, leading to decades of society-column photos of Mick Jagger with Mr. Ertegun. (Mr. Ertegun died after being injured in a fall backstage before a Rolling Stones concert on Oct. 29.) But Mr. Ertegun didn’t abandon his business judgment. When the Stones received a lucrative offer from Virgin Records for their next contract, Mr. Ertegun let them go.

Like other labels of the ’40s and ’50s, Atlantic made contracts with its early artists that now seem exploitative. On the eve of the label’s 40th anniversary, Ruth Brown made loud public complaints about her lack of royalties, and Atlantic agreed to waive unrecouped debts for Ms. Brown and other musicians on its early roster, and to pay 20 years of back royalties. The label also contributed nearly $2 million to start the Rhythm and Blues Foundation, which pressured other labels toward royalty reform and gave money to needy musicians.

Mr. Ertegun was also a prime mover in starting the Rock and Roll Hall of Fame and Museum, another nod to history. In 2005 he told the online magazine Slate that he wanted his legacy to be that “I did a little bit to raise the dignity and recognition of the greatness of African-American music.”

Through the decades, Mr. Ertegun never stopped visiting his beloved dives, from R&B lounges to punk clubs. He always stood out, dressed in his bespoke suits and expensive shoes; he never lost his Turkish accent. But he was an outsider who had become something more than an insider, an American phenomenon who proved the best way to cross boundaries was with the promise of a good time.

Until next week,

- js.

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