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Old 16-09-15, 06:08 AM   #1
JackSpratts
 
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Join Date: May 2001
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Default Peer-To-Peer News - The Week In Review - September 19th, '15

Since 2002


































"I recommend that we reinstate the Tor relay." – Sean Fleming


"Like the act of putting a rotting corpse on display to warn other would-be pirates, Sharebeast.com now displays the familiar banner of the FBI on its site." – Nathan McAlone


"The FCC further argued that even if First Amendment principles were relevant in this case, the net neutrality rules would not violate them." – Jon Brodkin


"That’s flat, baby!" – Dave Miller






































September 19th, 2015




The Department of Justice Gutted the Largest Illegal Music-Sharing Site in the US
Nathan McAlone

The US Department of Justice has seized control of Sharebeast, the popular music-file-sharing website.

Sharebeast.com was the largest illegal file-sharing site for music operating within the US, according to the RIAA.

Like the act of putting a rotting corpse on display to warn other would-be pirates, Sharebeast.com now displays the familiar banner of the FBI on its site:

RIAA chairwoman and CEO Cary Sherman called it a huge win for the music industry.

“Sharebeast operated with flagrant disregard for the rights of artists and labels while undermining the legal marketplace,” she said in a statement.

A related site, albumjams.com, was also taken down.

In a recent high-profile incident, Sharebeast was hosting a leak of Kanye West's upcoming album "SWISH," according to Ars Technica. But the offerings on the site were sprawling, from music to soccer to TV shows.

“Millions of users accessed songs from Sharebeast each month without one penny of compensation going to countless artists, songwriters, labels and others who created the music," Sherman said.

This takedown is perhaps the most significant action against file-sharing by the US since Megaupload was shut down in 2012. Most of the large file-sharing sites, however, are not based in the US.

RapidShare, based in Switzerland, was voluntarily shuttered earlier this year.

Other types of illegal music sites have also felt the heat of law enforcement.

Grooveshark, founded in 2006, quickly gained a following because of its on-demand catalog that allowed you to stream songs a la carte. This was long before Spotify arrived on the scene.

But many of the songs uploaded to Grooveshark were copyrighted songs — and Grooveshark's founders reportedly instructed employees to upload popular songs. Legal pressure eventually led Grooveshark to go dark on April 30. One of its cofounders was later found dead in his home.

Of course the most famous file-sharing site, The Pirate Bay, is still engaged in a game of whack-a-mole with European authorities.

The site unveiled a defiant logo in May that sent the clear message that even if one domain is shut down new domains will spring up in its place.

The Pirate Bay's cofounders, however, have faced legal battles, including imprisonment in Sweden and Denmark.
http://www.businessinsider.com/depar...rebeast-2015-9


''Largest music sharing site''? A little perspective: before the shutdown, Sharebeast’s Alexa ranking was 7000. Kickass Torrents’ meanwhile is 74. – Jack.





Netflix and Amazon Users Sue to Stop Chicago’s 9% Streaming Tax
Jeff John Roberts

It’s on. Subscribers to popular streaming services, including XBox Live and Spotify, have filed a lawsuit that claims the city of Chicago’s controversial tax policy on digital entertainment is illegal.

The challenge to the tax policy, filed last week in Cook County state court, is important because it could help define the power of cities and states to tax parts of the internet economy.

The controversy turns on Chicago’s recent decision to extend its existing 9% “Amusement” levy, which applies to events like shows and baseball games, to a wide range of online services.

In their court challenge, a group of Chicago residents claim the city comptroller’s decision to apply the Amusement tax to streaming service amounted to a new tax that could only have been imposed by a vote of city officials. They claim they are being harmed since the tax makes them pay more for Amazon Prime AMZN , Netflix NFLX , Hulu, Xbox Live MSFT and Spotify.

In a claim that may have national significance, the lawsuit also says the Chicago streaming tax violates the federal Internet Tax Freedom Act, which forbids states and cities from imposing discriminatory internet-only taxes. Specifically, the Chicago subscribers claim the tax is illegal because it treats streaming differently from DVD-by-mail services and also imposes a higher rate than various live forms of entertainment.

The city says it will fight the lawsuit vigorously, according to the Chicago Tribune, which also reports the so-called “Netflix tax” is expected to bring in $12 million annually, and that it is part of a larger attempt by Mayor Rahm Emmanuel to use new fees to close a budget hole.

The lawsuit, which you can read for yourself below, also comes as more states and cities are looking to tax the cloud to make up for a decline in sales tax revenue. That decline has come about in part because consumers are acquiring a wide variety of goods and services, including media, online rather than in stores.

While cloud taxes offer the promise of new money for local governments, they are also proving to be a major headache for many businesses, which are unclear of when and how to collect the tax. The confusion could produce additional court challenges, in part because the taxes often affect cloud-based businesses outside of the city or state in question.

While the Supreme Court requires a “physical nexus” for a local tax to be valid, city and state governments appear to taking a more aggressive approach when it comes to defining that nexus. According to Rebecca Newton-Clarke, a tax expert with Thomson Reuters, the governments are likely to continue pushing the definition of nexus in the absence of further clarification from the Supreme Court.

In the meantime, consumers in more places are likely to face new fees on their favorite streaming entertainment.
http://fortune.com/2015/09/14/netflix-tax-lawsuit/





'Fair Use' Matters In Dancing Toddler Copyright Case: U.S. Court
Jonathan Stempel

Copyright holders must consider "fair use" before demanding the removal of videos that people post online, including on Google Inc's (GOOGL.O) YouTube, a U.S. appeals court ruled on Monday.

In a closely followed case over a home video of a toddler dancing to the Prince hit "Let's Go Crazy," the 9th U.S. Circuit Court of Appeals in San Francisco made it tougher for content providers such as Vivendi SA's (VIV.PA) Universal Music Group to force Internet service providers to remove material.

"Copyright holders cannot shirk their duty to consider – in good faith and prior to sending a takedown notification - whether allegedly infringing material constitutes fair use," Circuit Judge Richard Tallman wrote for a 3-0 panel.

The decision could make it harder for copyright holders to remove alleged infringing content from the Internet by invoking the federal Digital Millennium Copyright Act, a 1998 law intended to curb movie and music piracy online. Critics say abusive takedown notices can suppress free speech.

Stephanie Lenz of Gallitzin, Pennsylvania had in February 2007 uploaded to YouTube a blurry 29-second clip of her 13-month-old son Holden happily bobbing up and down to "Let's Go Crazy," a 1984 song by Prince and The Revolution that played in the background.

Lenz said she thought her family and friends would enjoy seeing the toddler, who had just learned to walk, dance as well.

But Universal, which enforced Prince's copyrights, persuaded YouTube to remove Lenz's video, citing a good faith belief that the video was unauthorized.

Lenz had the video restored, and sued Universal over the takedown notice, seeking damages.

In January 2013, U.S. District Judge Jeremy Fogel in San Francisco said copyright holders must consider fair use, but denied Lenz's misrepresentation claim.

Upholding that ruling, Tallman said there can be liability if a copyright holder "knowingly misrepresented" in a takedown notice that it had a good faith belief that a video "did not constitute fair use."

But he also said courts should defer to a copyright holder who has a "subjective good faith belief" to the contrary.

The 9th Circuit said Lenz failed to overcome this hurdle, and instead may seek nominal damages for the "unquantifiable harm" she suffered.

Universal spokesman Andy Fixmer declined immediate comment.

Corynne McSherry, a lawyer with the Electronic Frontier Foundation representing Lenz, said the decision "sends a strong message that copyright law does not authorize thoughtless censorship of lawful speech."

The case is Lenz v Universal Music Corp et al, 9th U.S. Circuit Court of Appeals, Nos. 13-16106, 13-16107.

(Reporting by Jonathan Stempel in New York; Additional reporting by Andrew Chung in New York; Editing by Christian Plumb)
http://uk.reuters.com/article/2015/0...0RE1VR20150914





A Vinyl LP Frenzy Brings Record-Pressing Machines Back to Life
Ben Sisario

The machines at Independent Record Pressing whirred and hissed as they stamped out a test record. The business’s owners waited anxiously for Dave Miller, the plant manager, to inspect the still-warm slab of vinyl.

“That’s flat, baby!” Mr. Miller said as he held the record, to roars of approval and relief. “That’s the way they should come off, just like that.”

Independent Record Pressing is an attempt to solve one of the riddles of today’s music industry: how to capitalize on the popularity of vinyl records when the machines that make them are decades old, and often require delicate and expensive maintenance. The six presses at this new 20,000-square-foot plant, for example, date to the 1970s.

Vinyl, which faded with the arrival of compact discs in the 1980s, is having an unexpected renaissance. Last year more than 13 million LPs were sold in the United States, according to the Recording Industry Association of America, the highest count in 25 years, making it one of the record business’s few growth areas.

But the few dozen plants around the world that press the records have strained to keep up with the exploding demand, resulting in long delays and other production problems, executives and industry observers say. It is now common for plants to take up to six months to turn around a vinyl order — an eternity in an age when listeners are used to getting music online instantly.

“The good news is that everyone wants vinyl,” Dave Hansen, one of Independent’s owners and the general manager of the alternative label Epitaph, said on a recent hot afternoon as the plant geared up for production.

“The bad news is everything you see here today,” he added, noting that the machines had to be shut down that afternoon because of the rising temperature of water used as a coolant. To replace an obsolete screw in one machine, Independent spent $5,000 to manufacture and install a new one.

The vinyl boom has come as streaming has taken off as a listening format and both CDs and downloads have declined. The reasons cited are usually a fuller, warmer sound from vinyl’s analog grooves and the tactile power of a well-made record at a time when music has become ephemeral.

Most surprising is the youth of the market: According to MusicWatch, a consumer research group, some 54 percent of vinyl customers are 35 or younger. Mr. Hansen and Darius Van Arman, a founder of Secretly Group, a consortium of small record companies that is a partner in Independent, said they believed their customers were often discovering new music through streaming and then collecting it on LPs.

“None of this was supposed to happen, and yet it’s happened,” said Michael Fremer, a senior contributing editor at Stereophile magazine and a longtime champion of vinyl as a superior medium for sound.

Independent’s machines tell some of the history of the modern music business. Mr. Miller, 62, helped build them as a young man in the 1970s, and they were used for decades at the Hub-Servall plant in Cranbury, N.J.; Mr. Miller recalled pressing copies of the “Saturday Night Fever” and “Grease” soundtracks there.

In 2007, Hub-Servall’s presses were sold to RIP-V, a new plant in Montreal that took on Epitaph as a client. RIP-V shut down last year, and Independent bought six of its 14 machines and brought them back to New Jersey. (The rest went to other plants.) Mr. Hansen said that he and Secretly had invested $1.5 million in the venture.

For the music business over all, vinyl is still a niche product, if an increasingly substantial one. According to Nielsen, LPs now represent about 9 percent of sales in physical formats. But for indies like Epitaph and Secretly, vinyl has become essential: Both now take in nearly as much revenue from LPs as they do from CDs.

Mr. Hansen started Independent as a 50-50 partnership with Secretly to serve other independent labels — companies that often find themselves squeezed out of the production line by bigger players.

“One of the problems that independent labels are facing,” Mr. Van Arman of Secretly said, “is that some of the bigger plants might get an order for an Eagles box set, and everyone else is put on hold.”

Independent’s initial order list includes records by Vampire Weekend, Pavement, the XX and Mac DeMarco, all indie acts that are steady sellers on vinyl. Mr. Hansen’s ownership is separate from his employment at Epitaph, and both he and Mr. Van Arman said that releases on their labels would get no special treatment.

Independent has taken over a spot in a small industrial park in this town about six miles south of Trenton. The company expects to employ seven full-time workers and a small part-time crew to assemble the finished records and sleeves; some of those part-timers will be moonlighting employees of a Netflix DVD fulfillment center next door where similar work is done, Mr. Hansen said.

When it is operating at full capacity, Independent should produce up to 1.5 million records a year, Mr. Hansen and Mr. Van Arman said. But first the machines must be fully restored and tested, and after several months they are still not quite ready.

Vinyl pellets are poured from a bucket into an extruder, and then formed into a small lump of vinyl that is placed between metal stampers forming the shape of each side of the record. The machine then presses the stampers together with 150 pounds per square inch of pressure. If the temperature, pressure or consistency of the vinyl is off, the result is an imperfect record that is scrapped.

“This is the dirty, brutal side of the record business,” Mr. Miller said. “Nobody realizes the work it takes to actually make a record.”

There is now a global rush to set up more plants and find existing presses, but the few that have been tracked down are often in poor shape. This year Chad Kassem of Quality Record Pressings in Salina, Kan., found 13 disused machines in Chicago — “they looked like scrap metal to anybody but me,” he said — and he hopes to restore five of them within six months.

Fat Possum, another indie label, also started a new plant in Memphis this year to meet its own demand, with nine machines. “Now I can go and push my own stuff to the front,” said Matthew Johnson, Fat Possum’s founder, who said that in recent years he had been faced with frustrations like thousands of records held up in customs as they came in from manufacturers in Europe.

Yet talk of a possible bubble hangs over the vinyl business, and some plants seem to be bracing for a decline even as they expand. United Record Pressing in Nashville, one of the biggest plants, has 30 presses running 24 hours a day and has acquired 16 more machines. Yet the plant, overwhelmed by demand, has stopped taking orders from new customers.

“It’s difficult to turn people away, especially when it is maybe an independent artist,” said Jessica Baird, a representative of the company. “But we are trying to do the best we can for people who have been loyal to us for years, and that we hope will stick with us when the ebb and flow comes again.”

Mr. Hansen, 52, said he wasn’t sure whether the vinyl gold rush would continue, either, but he has staked a considerable personal investment in it and called the plant part of his retirement planning.

“The dream is to build capacity for our label and provide a service for the indie labels that I love and respect so much,” Mr. Hansen said, “and at the same time, make a few bucks too.”
http://www.nytimes.com/2015/09/15/bu...k-to-life.html





Intelligence Start-Up Goes Behind Enemy Lines to Get Ahead of Hackers
Nicole Perlroth

On a recent Wednesday morning, 100 intelligence analysts crammed into a nondescript conference room here and dialed into a group call with 100 counterparts in Argentina, Brazil, Cyprus, India, the Netherlands, Romania, Spain, Taiwan and Ukraine.

As they worked their way around the room, the analysts briefed one another on the latest developments in the “dark web.”

A security firm in Pakistan was doing a little moonlighting, selling its espionage tools for as little as $500. Several American utility companies were under attack. A group of criminals were up to old tricks, infecting victims with a new form of “ransomware,” which encrypts PCs until victims pay a ransom.

The analysts, employees of iSight Partners, a company that provides intelligence about threats to computer security in much the same way military scouts provide intelligence about enemy troops, were careful not to name names or clients, in case someone, somewhere, was listening on the open line.

Within 30 minutes, they were all back at their keyboards, monitoring underground chatter and markets, analyzing computer code meant to cause harm, watching the networks of potential attackers and poring over social media channels for signs of imminent attacks.

For the last eight years, iSight has been quietly assembling what may be the largest private team of experts in a nascent business called threat intelligence. Of the company’s 311 employees, 243 are so-called cyberintelligence professionals, a statistic that executives there say would rank iSight, if it were a government-run cyberintelligence agency, among the 10 largest in the world, though that statistic is impossible to verify given the secretive nature of these operations.

ISight analysts spend their days digging around the underground web, piecing together hackers’ intentions, targets and techniques to provide their clients with information like warnings of imminent attacks and the latest tools and techniques being used to break into computer networks.

The company’s focus is what John P. Watters, iSight’s chief executive, calls “left of boom,” which is military jargon for the moment before an explosive device detonates. Mr. Watters, a tall, 51-year-old Texan whose standard uniform consists of Hawaiian shirts and custom cowboy boots, frequently invokes war analogies when talking about online threats.

“When we went into Iraq, the biggest loss of life wasn’t from snipers,” he said. It was from concealed explosive devices. “We didn’t get ahead of the threat until we started asking ourselves, ‘Who’s making the bombs? How are they getting their materials? How are they detonating them? And how do we get into that cycle before the bombs are ever placed there?’”

“Our business,” Mr. Watters continued, “is tracking the arms merchants and bomb makers so we can be left of boom and avoid the impact altogether.”

ISight’s investors, who have put $60 million into the company so far, believe that its services fill a critical gap in the battle to get ahead of threats. Most security companies, like FireEye, Symantec, Palo Alto Networks and Intel’s security unit, focus on blocking or detecting intrusions as they occur or responding to attacks after the fact.

ISight goes straight to the enemy. Its analysts — many of them fluent in Russian, Mandarin, Portuguese or 21 other languages — infiltrate the underground, where they watch criminals putting their schemes together and selling their tools.

The analysts’ reports help clients — including 280 government agencies, as well as banks and credit-card, health care, retail and oil and gas companies — prioritize the most imminent and possibly destructive threats.

Security experts say the need for such intelligence has never been greater. For the last three years, businesses have been investing in “big data” analytic tools that sound alarms anytime someone does something unusual, like gain access to a server in China, set up a private connection or siphon unusually large amounts of data from a corporate network.

The result is near constant and confusing noise. “Except for the most mature organizations, most businesses are drowning in alerts,” said Jason Clark, the chief security officer at Optiv, a security firm.

The average organization receives 16,937 alerts a week. Only 19 percent of them are deemed “reliable,” and only 4 percent are investigated, according to a study released in January by the Ponemon Institute, which tracks data breaches. By the time criminals make enough noise to merit a full investigation, it can take financial services companies more than three months, on average, to discover them, and retailers more than six months.

“Just generating more alerts is wasting billions of dollars of venture capital,” said David Cowan, an iSight investor and a partner at Bessemer Venture Partners. The last thing an executive in charge of network security needs is more alerts, he said: “They don’t have time. They need human, actionable threat intelligence.”

Mr. Cowan and others point to what happened to Target in 2013, when the retailer ignored an alert that ultimately could have stopped criminals from stealing 40 million customers’ payment details from its network.

A year earlier, iSight warned its clients that criminals were compiling and selling malware that was specifically designed to scrape payment data off cash registers. Had Target received that warning, the blip on its network might not have gone unnoticed.

“Target faced the same problem every retailer does every day,” Mr. Watters said. “They are awash in a sea of critical alerts every day. Without threat intelligence, they had roulette odds of picking the right one.”

Gartner, the research firm, estimates that the market for threat intelligence like iSight’s could grow to $1 billion in two years from $255 million in 2013. Gartner predicts that by 2018, 60 percent of businesses will incorporate threat intelligence into their defensive security strategy.

ISight, which plans to file for an initial public offering of stock next year, hopes to capitalize, as do the dozens of other cyberthreat intelligence outfits now flooding the market, each with a slightly different approach.

That proliferation of start-ups has led to a new complaint from computer security chiefs: overlapping information — sometimes as much as 40 percent — in the reports they receive, none of which is cheap. ISight charges customers based on size, and while it does not disclose pricing, some customers say they pay $500,000 or more annually for the company’s services, as much as five times what low-end services charge.

ISight makes 90 percent of its revenue from subscriptions to its six intelligence streams, each focused on a particular threat, including cyberespionage and cybercrime.

The company’s most recent competition comes from its oldest clients, particularly banks, which have been hiring former intelligence analysts to start internal operations. One former client, which declined to be named because of concerns that doing so could violate a nondisclosure agreement, said it had been able to build its own intelligence program at half the cost of its canceled iSight subscriptions.

But most businesses do not have the same resources as, say, a company like Bank of America, whose chief executive recently said there was no cap on the bank’s cybersecurity budget.

Many of those businesses remain paralyzed by the drumbeat of alarms that expensive security technologies are sounding on their networks.

At iSight’s threat center, the company’s approach is perhaps best summed up by a logo emblazoned on a T-shirt worn by one of its top analysts: “Someone should do something.”
http://www.nytimes.com/2015/09/14/te...f-hackers.html





Cisco Router Break-Ins Bypass Cyber Defenses
Eric Auchard

Security researchers say they have uncovered clandestine attacks across three continents on the routers that direct traffic around the Internet, potentially allowing suspected cyberspies to harvest vast amounts of data while going undetected.

In the attacks, a highly sophisticated form of malicious software, dubbed SYNful Knock, has been implanted in routers made by Cisco (CSCO.O), the world's top supplier, U.S. security research firm FireEye (FEYE.O) said on Tuesday.

Routers are attractive to hackers because they operate outside the perimeter of firewalls, anti-virus, behavioral detection software and other security tools that organizations use to safeguard data traffic. Until now, they were considered vulnerable to sustained denial-of-service attacks using barrages of millions of packets of data, but not outright takeover.

"If you own (seize control of) the router, you own the data of all the companies and government organizations that sit behind that router," FireEye Chief Executive Dave DeWalt told Reuters of his company's discovery.

"This is the ultimate spying tool, the ultimate corporate espionage tool, the ultimate cybercrime tool," DeWalt said.

The attacks have hit multiple industries and government agencies, he said.

Cisco confirmed it had alerted customers to the attacks in August and said they were not due to any vulnerability in its own software. Instead, the attackers stole valid network administration credentials from targeted organizations or managed to gain for themselves physical access to the routers.

"We’ve shared guidance on how customers can harden their network, and prevent, detect and remediate this type of attack," Cisco said in a statement.

CYBERSPIES SEEN RESPONSIBLE

Altogether FireEye's computer forensic arm Mandiant has so far found 14 instances of the router implants in India, Mexico, Philippines and Ukraine, the company said in a blog post at bit.ly/1ObMm7u. It added that this may be just the tip of the iceberg in terms of yet-to-be-discovered attacks.

Because the attacks actually replace the basic software controlling the routers, infections persist when devices are shut off and restarted. If found to be infected, FireEye said basic software used to control those routers would have to be re-imaged, a time-consuming task for technicians.

Hitherto, infections of commercial routers, while not unknown, have largely remained theoretical threats, DeWalt said, as distinct from routers consumers use at home, which according to media reports have been hit by malware in recent years.

Experts reckon there are only a small number of nations with cyber intelligence services which are capable of such attacks on network equipment, including those of Britain, China, Israel, Russia and the United States.

"That feat is only able to be obtained by a handful of nation-state actors," DeWalt said, while declining to name which countries he suspected might be behind the Cisco router attacks.

The malicious program has been nicknamed "SYNful" in reference to how the implanted software can jump from router to router using the device's syndication functions.

Network logs from infected routers suggest the attacks have been taking place for at least a year, FireEye's CEO said.

The implanted software, which duplicates normal router functions, could also potentially affect routers from other makers, DeWalt said.

Infected hardware devices include Cisco routers 1841, 2811 and 3825, FireEye said. Cisco had discontinued selling the products but still supports customers using them.

FireEye said it was only announcing its discovery after working with Cisco to quietly notify governments and affected parties. "We thought it was best to release this so everyone can fix their routers as fast as possible," DeWalt said.

(Additional reporting by Joseph Menn in San Francisco; Editing by Louise Heavens and Greg Mahlich)
http://uk.reuters.com/article/2015/0...0RF0N420150915





Watchdog: AT&T Employee Tells Why Reps Fail Customers

“I have never, in all my years, imagined it would become the catastrophe it is now,” a call center employee who’s been with AT&T 17 years wrote to The Watchdog.
Dave Lieber

For 10 years, The Watchdog has received a steady flow of complaints about AT&T. Hundreds upon hundreds. More than any other company by far.

Each complaint I forward gets fixed. But in a greater sense, it seems nothing gets fixed. Is the culture of Dallas-based AT&T to accept the trove of complaints but never drill down to the root cause?

I don’t know why this continues to happen, but a recent letter I received may help us understand.

An AT&T call center employee has written The Watchdog. The employee gives me permission to share the letter, but I am not naming her because of her job. After the letter, you’ll read what AT&T has to say about it.

“Dear Watchdog, I’ve worked 17 years for AT&T. I have never, in all my years, imagined it would become the catastrophe it is now.

“As retention reps, we are told to not only retain existing customers after their promotions expire, but to also sell more to these people.

“In most cases, a customer’s bill will jump up $83 a month after the ‘intro’ pricing ends. We as reps are allotted at the beginning of week 5 ‘limited use’ promotions, giving folks the maximum of $40 off.

“By Monday afternoon, these are generally depleted as we take about 40 calls a day.

“This has created a culture of reps promising promos, but not adding them. Or telling the customer they are disconnecting the service, but just not doing it. Reps do not want to disconnect a customer, as this counts against the rep.

“You are right to request a user ID [of the rep]. However, it does not help, as every account is noted with the ID of the rep, and management does nothing to discourage the reps’ behavior (as the manager’s pay also is negatively affected by each disconnect their rep does).

“This goes all the way up to sales center manager, general manager and VP. None of the higher-ups care or do anything to stop it.

“They also turn a blind eye to ‘cramming’ by reps (mostly nonunion employees overseas) and erroneous misquotes.

“It’s very frustrating to be an ethical rep there anymore, as you are constantly under their scrutiny for not meeting numbers. The only way to meet these numbers is to be a liar and a sleaze. Three-quarters of my call center is on antidepressants and anti-anxiety medicine just to deal with the company. It shouldn’t be like that.

“The part in your article [a previous Watchdog report] about us not giving our User ID is really a directive that we had from upper management. A customer’s account was compromised by a fraudster with a real ID. The fraudster called in, changed the address on the account, then called in again and ordered iPhones to be shipped to the address he changed it to.

“The problem with this is none of these general managers communicate. Each state is covered by different laws and regulations. You in Texas may call and get a rep in California. In California, I do not have to let you record the call. You also have the option not to be recorded.

“Now that we are national, you have GMs in charge of call centers in California, Missouri, Texas and Georgia. They don’t train you, don’t care about you, don’t care about the customer as long as they are getting commission off your work.

“They know nothing of government regulations, and frankly, do not care.

“I’ve been through so many GMs and vice presidents. However, this is by far the most inept. We should be helping our customers, not forcing products on them they do not want. … I really don’t think anyone in the government cares.”

What AT&T says

I showed the letter to AT&T — and asked the company for its reaction.

“Unfortunately, we have no way of knowing if this is an employee of our company,” AT&T’s response begins. “But the picture painted is not the experience we create, promote or endorse.

“We have some of the best call center employees in the industry. We set expectations and limit the offers they can use. But we also provide new agents with 12 weeks of intensive training — with a focus on keeping customers with integrity and with offers based on needs determined during the conversation.

“Once out of training, our agents get regular and organized coaching and updates to their initial training with the option of additional coaching always available.”

The statement ends there.

The Watchdog deems it strange because the answer ignores the basic flaws of AT&T’s culture as described by the call center employee.

Perspective

At my request, Daniel Lyons, a Boston College Law School professor with experience in telecommunications, studied the letter.

Lyons said if a company promises a customer incentives to either sign up for service or renew an existing contract and those incentives are not delivered, in many cases, that’s fraud.

Don’t expect help from government regulators, he says. “The more competitive the marketplace has gotten, the less regulators feel like they need to get involved. If customers don’t like the service they get, they can switch elsewhere.”

What’s happening behind the scenes at AT&T is not unlike what occurs at other companies. But AT&T touches the lives of more Americans than most.

At least we have an idea why the company can’t get it right.
http://www.dallasnews.com/investigat...unt-errors.ece





Net Neutrality Advocate Tim Wu Joins New York Attorney General’s Office

Wu will focus on issues surrounding technology and competition
James Vincent

Tim Wu, the writer and law professor best known for coining the term net neutrality, has joined the office of the New York state attorney general Eric Schneiderman. According to a report from The New York Times, Wu will serve as a senior lawyer and special adviser to Schneiderman starting this week, focusing on issues surrounding technology, competition, and the protection of consumer rights. "If I have a life mission, it is to fight bullies," Wu told the Times. "I like standing up for the little guy, and I think that’s what the state A.G.’s office does."

Wu is something of a celebrity in tech circles thanks to his focus on antitrust issues such as search engine competition and his advocacy work for net neutrality (a concept that received Barack Obama's backing last year). Last year, he also made an unsuccessful bid to become lieutenant governor of New York state, running on a tech-friendly platform with proposed policies including blocking Comcast's attempted merger with Time Warner Cable.

"Schneiderman's office has pursued tech companies such as Uber and Airbnb"

A history like this means Wu is likely to be a good fit for Schneiderman's office. The attorney general has made it clear he wants to rein in the unregulated behavior of certain tech companies, tackling issues such as Uber's use of surge-pricing during hurricanes and snowstorms and illegal Airbnb listings in New York City. In an opinion piece published in The New York Times last year, Schneiderman said that regulators have been "struggling to keep up" with the digital marketplace, but that ignoring consumer protection laws "isn’t smart, or sustainable."

Wu echoed these sentiments this week, telling the Times that "the states are where the action is" when it comes to antitrust issues. He said: "I’m interested in working on pocketbook issues where consumers can feel it, where the new economy makes them nervous and where you want the government to be carefully watching companies who could be abusing customers."
https://www.theverge.com/2015/9/14/9...general-office





ISPs Don’t Have 1st Amendment Right to Edit Internet, FCC Tells Court

FCC defends net neutrality rules against lawsuit filed by broadband industry.
Jon Brodkin

The Federal Communications Commission yesterday said it did not violate the First Amendment rights of Internet service providers when it voted to implement net neutrality rules.

Broadband providers who sued to overturn the rules claim their constitutional rights are being violated, but the FCC disputed that and other arguments in a filing in the US Court of Appeals for the District of Columbia Circuit.

ISPs are conduits for the speech of others; they are not delivering their own messages when they connect their customers to the Internet, the FCC argued. Rules against blocking and throttling Internet content thus do not violate the ISPs’ constitutional rights, the FCC said.

“Nobody understands broadband providers to be sending a message or endorsing speech when transmitting the Internet content that a user has requested,” the FCC wrote. “When a user directs her browser to the New York Times or Wall Street Journal editorial page, she has no reason to think that the views expressed there are those of her broadband provider.”

By delivering content requested by customers, broadband providers are acting in the same role as telephone companies, the FCC said.

First Amendment objections have been briefly raised by AT&T, CenturyLink, CTIA-The Wireless Association, and the United States Telecom Association. The argument that net neutrality rules violate broadband providers' First Amendment rights was also made by Verizon back in 2012.

In the current case, the First Amendment objections have been made most forcefully by Alamo Broadband, a small provider in Texas. Alamo argued that ISPs “exercise the same editorial discretion as cable television operators in deciding which speech to transmit.”

The FCC countered that cable TV is different from Internet access because cable TV systems have limited capacity on which to carry channels. ISPs, by contract, face no technological obstacles preventing them from providing access to all lawful Internet content, the FCC said. No-blocking and no-throttling rules thus will not reduce access to any other content, whether offered by third parties or the broadband companies themselves, the FCC argued.

The commission’s net neutrality order issued this year reclassified broadband providers as common carriers. Common carriage principles have been applied to the transportation and communications industries for centuries, “[b]orrowing from English common law traditions that imposed certain duties on individuals engaged in ‘common callings,’ such as innkeepers, ferrymen, and carriage drivers,” a previous court ruling involving the FCC noted.

“The Supreme Court has repeatedly cautioned that common carriers do not share the free speech rights of broadcasters, newspapers, or others engaged in First Amendment activity,” the FCC said in its filing yesterday.

ISPs may sometimes engage in activity protected by the First Amendment “when providing services other than broadband Internet access (like operating their own websites),” but those activities are separate from the Internet service regulated by the net neutrality rules, the FCC said.

No distinctions

The FCC further argued that even if First Amendment principles were relevant in this case, the net neutrality rules would not violate them. The Open Internet rules are content-neutral, meaning they make no distinctions based on content or viewpoint, the FCC said. Content-neutral regulations are allowed if they further important government interests "unrelated to the suppression of free expression," and if they "do not burden substantially more speech than is necessary," the FCC wrote. “That test is easily satisfied here.”

The FCC said the important government interests that its rules promote include ensuring that the public has access to many information sources, ensuring a level playing field by limiting the power of broadband providers to advantage or disadvantage particular companies that provide information over the Internet, and encouraging broadband deployment.

If Internet providers wish to distance themselves from speech with which they disagree, they can do so by publicizing their views on their own websites “or by delivering a message on bill inserts accompanying customers’ monthly bills,” the FCC said.

The FCC’s 157-page brief disputed numerous arguments made by ISPs. Among other things, the commission said it was justified in determining that fixed and mobile broadband are telecommunications services subject to common carrier regulation; that it reasonably accounted for the rules’ impact on network investment; that it met notice and procedural requirements before issuing the rules; and that the FCC has the authority to prohibit paid prioritization.

Oral arguments in the case are scheduled for December 4.
http://arstechnica.com/tech-policy/2...c-tells-court/





Here’s the Real Way to Get Internet to the Next 4 Billion People
Klint Finley

Around 3.2 billion people have access to the Internet. That’s amazing, but it’s fewer than half of the 7 billion or so people on earth. And while Internet access was once a luxury, it is quickly becoming essential as the world’s commerce, educational resources, and entertainment move online.

Fortunately, there’s no shortage of schemes to bring Internet to underserved countries, ranging from low-orbit satellites to high-altitude balloons to drones. Some analysts have criticized these projects, arguing they won’t deliver Internet access at prices people in the developing world can afford. It’s a bit like trying to make up for a lack of roads by building cars that don’t need them, says Mark Summer of EveryLayer, a Silicon Valley company that helps local ISPs create wireless networks in Africa, the Caribbean, and Southeast Asia. The alternative? Deploy Internet the old-fashioned way.

“It’s not so sexy to build roads, but we’re not going to overcome the challenge of missing infrastructure with flying cars,” he says.

Even as billionaires like Elon Musk and Mark Zuckerberg plot to wire the unwired, people in these countries, with a little help from outside companies and investors, are quickly and quietly building their own Internet infrastructure. And they’re doing it using fairly rudimentary methods: by trenching pipes and building cell towers. They have a long way to go, but they’re already proving remarkably successful.

Laying Cable

A major problem in emerging countries is that when Internet access is available, it’s often expensive. That’s due in part to a lack of competition among providers, says Funke Opeke, the founder and CEO of the Nigerian telco MainOne. In some cases it comes down to a lack of infrastructure, but in other cases, the governments or companies that own the infrastructure don’t want to lease bandwidth to private ISPs.

Opeke, who worked for Verizon in the US after graduating from Columbia University and before returning to her native Nigeria in 2005, experienced this first-hand while working for Nitel, Nigeria’s largest wireless carrier. She saw a potential market for wireless data services. “Nearly everyone had mobile phones, but hardly anyone had access to the Internet,” she says. Opeke struggled for years to expand Nitel’s service, but a lack of access to Internet backhaul services—the networks that connect access providers themselves to the Internet—made it impractical. So she decided to create a backhaul service herself. In 2008 she founded MainOne and started raising money from Nigerian investors. Within two years the company was selling access to an undersea broadband cable stretching 4,350 miles from Portugal to Nigeria, with stops in Ghana.

Undersea cables have brought a 20-fold increase in overall bandwidth to the African continent in the past five years, according to a report the Internet Society released earlier this year. Summer says that MainOne and other new cables like Seacom, which connects the east coast of Africa to France and India, have had a dramatic impact on the cost of internet backhaul services in Africa. “The cost has fallen from thousands of dollars per megabit to $50 to $100 per megabit,” he says.

These cables brought faster connections to coastal countries like Ghana, Nigeria, and South Africa first, but other companies, such as the Mauritius-based Liquid Telecom, are expanding the reach of those networks to landlocked countries like Zambia. EveryLayer, meanwhile, is helping independent ISPs in cities and villages across Africa —and other continents—negotiate rates for these backhaul services so that they can provide affordable access to consumers.

Launching Satellites

Building this new infrastructure is not cheap. Seacom cost $650 million to build, and MainOne cost $240 million. And that does not include the cost of building pipes into the center of the country. That makes the idea of using satellites to blanket the planet with Internet access sound particularly appealing. The question, though, is whether anyone can make satellites cost-effective.

Satellite Internet has been around for years, but newer companies like OneWeb—backed by Virgin Galactic founder Richard Branson—and Elon Musk’s SpaceX are taking a different approach. By placing satellites in low-earth orbit—roughly 100 to 1,250 miles overhead—these companies say they can provide access that is far faster than traditional satellite Internet, and with less latency (the time between sending a request and getting a response). The catch is that these lower orbit satellites can’t cover as much area as a traditional geosynchronous orbit satellites at an altitude of about 22,000 miles. That means these companies will have to launch hundreds of satellites in order to cover the planet with their wireless signals. And that’s going to be expensive.

OneWeb declined to comment, but founder Greg Wyler told Businessweek the company will need at least $2 billion to get started. SpaceX did not respond to our request for comment, but Musk told Businessweek his service will cost at least $10 billion to build.

Robert Rusch, a satellite communications industry analyst, warns that companies tend to drastically underestimate the cost of building satellite services. He says companies tend to only consider the space-side costs of running an Internet business, such as launch costs and the satellites themselves. “They don’t think of the ground stations, the real estate for gateways, the software that makes the whole system work,” he says.

That’s part of why low earth orbit satellite companies have a poor track record. Most famously, a Bill Gates-backed company called Teledesic tried to launch a service not unlike the ones proposed by OneWeb and SpaceX, but went bankrupt in 2002, as did low orbit satellite phone companies Globestar and Iridium.

A Proven Model

Still, $10 billion might not sound bad for a service that, unlike an undersea cable, would provide worldwide access. And OneWeb and SpaceX have a significant advantage in that they can learn from the mistakes of those who have come before them. That means they’re more likely to get the pricing right, and can take advantages of advances in technology. But there are also questions about how much capacity these services can provide, and what they will actually cost in the end. OneWeb has stated on its website that it will provide 10 terabits of capacity. That sounds like a lot, but consider that Seacom is designed to provide up to four terabits of capacity for Eastern Africa alone.

And even though launching satellites may sound like less of a legal hassle than digging trenches for Internet cables, satellite companies face their own regulatory issues, including the possibility of being required to censor content for local governments. “By international law you can only provide service into a particular territory if you have permission from the sovereign country,” Rusch explains.

Add these issues up, and there’s a real danger these satellite companies will have to charge more than people in developing countries can afford or are willing to pay.

While the costs of terrestrial Internet connections are high, they’re relatively predictable. And the business model is proven around the world. MaineOne, for example, already is breaking even. And, of course, there are already many cables already deployed to build on. “You can move the needle further and faster [by investing in terrestrial internet],” Summer says. “And it’s longer term.”

In other words, although Google’s scheme to offer Internet through high-altitude balloons may be one of the most realistic of the new-age approaches to delivering Internet, the company might still be better off putting its money into its less well-known Project Link, which helps get landlocked countries online.

What’s Wrong with Moonshots?

So what’s wrong with letting a few eccentric billionaires spend their money on pet projects? After all, they just might work. In a perfect world, there’d be plenty of funding for both traditional Internet infrastructure and moonshots like low-orbit satellites. But in reality, investors have limited funds and are loath to put money into projects they believe may be redundant. “When I was raising capital in 2008 to build the MainOne cable, [satellite internet provider] O3B got launched and we almost lost our funding because of the perception O3B would solve Internet access challenges in emerging markets,” says Opeke.

That’s not to say that investors shouldn’t back satellite Internet companies like OneWeb or O3B at all. It’s not practical to run undersea cables everywhere in the world. Improved satellite Internet could be a huge boon for far-flung island nations, for example.

But it’s unwise to put all of the world’s hopes for connectivity in the hands of one or two US companies. The beauty of the Internet always has been that it is a network of networks free of ownership by a central authority. Giving the developing world a choice of providers, and doing so in reliable, locally controlled ways, is less risky and more in keeping with what made the `net great everywhere else.
http://www.wired.com/2015/09/heres-r...illion-people/





Expanding in U.S., Altice to Buy Cablevision for $17.7 Billion
Mark Scott and Nicola Clark

Altice, the European telecommunications giant, agreed on Thursday to buy Cablevision for $17.7 billion, as the company pushes further into the fast-consolidating United States cable market.

The deal, which is expected to face stiff regulatory scrutiny, would make Altice’s expanded American operations the fourth-largest cable operator in the United States, behind Comcast, Charter Communications and Cox Communications.

Altice, based in Amsterdam, made its first foray into American cable this year when it agreed to buy Suddenlink Communications, a St. Louis-based cable operator, for $9.1 billion.

Altice, founded and controlled by the 52-year-old French-Israeli billionaire Patrick Drahi, already operates large mobile and cable units in countries including France and Switzerland, and it is known for aggressively cutting costs to increase profitability in the companies it takes over.

But Mr. Drahi, a telecom engineer by training, is also known for investing in technology in the cable systems he acquires. It remains to be seen if Altice will see opportunities for technology upgrades at Cablevision, whose main operating areas are the suburbs surrounding New York City and which has met serious competition in recent years from fiber-optic broadband Internet and television offerings from Verizon.

Mr. Drahi, who analysts have said has financial access to perhaps $30 billion to invest in United States cable television, might be better able to pour money into Cablevision’s technology than the Dolan family, which founded and still controls the company.

“The strategy of Altice in the large and highly strategic U.S. market is reinforced with the acquisition of Cablevision,” Mr. Drahi said in a statement on Thursday. “We will be in a stronger position, as in all other markets in which we operate, to deliver the best services, invest in the most advanced technology, and develop innovative products for the benefit of our customers.”

Under the terms of the deal, Altice has offered $34.90 in cash for each Cablevision share, or a 22 percent premium to the company’s stock price on Wednesday. The deal price also includes debt.

Shares in Altice rose 3 percent in afternoon trading in Amsterdam on Thursday.

Altice’s proposed takeover of Cablevision — one of the American market’s last stand-alone cable companies — is likely to draw significant concern from United States regulators, particularly as the number of players in the broadband and cable television market shrinks.

If regulators approve, the deal is expected to close in the first half of 2016.

Charter Communications, a cable operator with ties to the billionaire John C. Malone, has already agreed to buy Time Warner Cable after its archrival Comcast failed to complete a deal. AT&T recently completed a $48.5 billion takeover of the satellite television operator DirecTV.

Despite the expected hurdles to completing the deal, Altice and Mr. Drahi have signaled that they are interested in continuing to build a presence in the United States.

Yet Altice’s expansion across the Atlantic — something that few European telecom operators have done successfully — has meant forcing its way into the huge American market, one free of Europe’s fragmented national borders and regulators.

Adding Cablevision and its 3.1 million customers would let Altice jump into the top echelon of cable companies in the United States. Cablevision assets that Altice would acquire include the newspapers Newsday and amNewYork, as well as a local-television news channel, News 12 Networks.

Although Altice is primarily a cable and telecom operator in Europe, it does have a nascent news media business that includes the French newspaper Libération, the magazines L’Express and L’Expansion, as well as i24, an Israeli television station. In late July, Altice also announced a strategic partnership with NextRadioTV, a French group that owns BFMTV, a French business television station, and RMC, a radio broadcaster in Monaco.

The Altice deal would not affect other companies controlled by the Dolans, including the Madison Square Garden Company, which owns the sports arena of the same name, as well as the New York Knicks basketball team, the New York Rangers hockey team, and AMC Networks, a cable channel company.

Altice said that it would finance the deal with $14.5 billion of new and existing debt, as well as with cash reserves. The private equity firm BC Partners and the Canada Pension Plan Investment Board, two minority investors in Suddenlink, also have the option to buy a 30 percent stake of Cablevision’s equity, according to a statement from Altice.

Since starting Altice in 2002, Mr. Drahi has earned a reputation for taking on larger incumbents in some of Europe’s largest markets, as well as scooping up smaller assets in countries like Switzerland and Belgium that he has developed into larger operations.

In Europe, Altice has built a reputation for ruthlessly rooting out operating costs, while at the same time investing heavily in new infrastructure — with a focus on upgrading fixed-line networks with the latest fiber-optic technology. The priority, analysts said, is to provide subscribers with faster Internet connection speeds at competitive prices.

Just as it has elsewhere, Altice would size up Cablevision and “find out item by item where there is potential improvement,” said Nicolas Paulmier, a London-based partner at Cinven, a private equity group that has worked closely with Mr. Drahi as an adviser and shareholder for more than a decade.

In the past, that has led to swift changes in senior management of the target company, analysts said.

“I think we all know that the telecom cost structure in the United States is very oligopolistic and very expensive on both the fixed and mobile side,” said Mr. Paulmier. “When you want to change the mind-set and really shake the tree, you usually need to change the people at the top.”

Mr. Drahi has often looked within the companies he acquires for leadership talent, rather than installing handpicked lieutenants.

Mr. Drahi has conceded that, as a newcomer to the American market, Altice is still feeling its way.

“We have 25 years of experience, we are entrepreneurs and telecoms specialists,” Mr. Drahi said in an email to The New York Times this summer. “But we are arriving in the U.S. with humility and a desire to do well.”

That is unlikely to mean that Altice would move slowly in shaking up business practices at his new American subsidiaries, however.

For consumers, though, if the deal goes through, the transformation in Cablevision’s service will take significantly longer, most likely unfolding over the next two years as Altice upgrades the network.

“There will be thousands of miles of cable and optical fiber to be laid,” Mr. Paulmier said. “That doesn’t happen in two-three months.”

Mr. Drahi has often mirrored his tactics in creating his fast-growing cable and media empire on those of his onetime boss, Mr. Malone.

During Mr. Drahi’s early days acquiring French cable systems in the 1990s, Mr. Malone’s European subsidiary UPC took notice. UPC in 1998 offered Mr. Drahi a 5 percent stake and hired him to run the company’s Western Europe business, based in Geneva.

Mr. Drahi sold his UPC shares two years later, becoming a multimillionaire. That gave him the table stakes to found Altice. Until Altice’s recent entry into the United States, both men had avoided competing head-to-head, as Mr. Drahi’s operations had primarily centered on Europe.

Although Mr. Malone and Mr. Drahi did not personally meet until a few years ago, friends say that Mr. Drahi has long been an admirer of the American who calls himself the “King of Cable.” Mr. Drahi has told friends that he long kept a biography of Mr. Malone, “Cable Cowboy,” on his bedside table.

Analysts say that both men have a reputation for disrupting traditional cable operators through cutthroat acquisitions and investment in high-speed infrastructure.

In an email recently, Mr. Drahi described Mr. Malone, 71, as a “mentor,” although the two men are not thought to be close.

Now Mr. Drahi could have a chance to show the American cable industry what he has learned along the way.

Michael J. de la Merced contributed reporting from San Francisco, and Andrew Ross Sorkin from New York.
http://www.nytimes.com/2015/09/18/bu...ons-drahi.html





China Tries to Extract Pledge of Compliance From U.S. Tech Firms
Paul Mozur

The Chinese government, which has long used its country’s vast market as leverage over American technology companies, is now asking some of those firms to directly pledge their commitment to contentious policies that could require them to turn user data and intellectual property over to the government.

The government distributed a document to some American tech companies earlier this summer, in which it asked the companies to promise they would not harm China’s national security and would store Chinese user data within the country, according to three people with knowledge of the letter who spoke on the condition of anonymity.

The letter also asks the American companies to ensure their products are “secure and controllable,” a catchphrase that industry groups said could be used to force companies to build so-called back doors — which allow third-party access to systems — provide encryption keys or even hand over source code.

The document underlines the way China is wielding its power over the American tech industry. Next week, Beijing has also planned a tech forum in Seattle between China’s Internet czar, Lu Wei, and tech companies including Apple, Facebook, IBM, Google and Uber, in a show of how it can get some of the world’s leading tech players to meet even as President Obama has suggested American companies are being hurt by anticompetitive Chinese practices. The forum is timed to coincide with President Xi Jinping‘s first state visit to the United States.

The situation is tricky for American tech companies. Many are eager to take advantage of business opportunities in China before local rivals sew up the market. But they have to tread carefully given the Chinese government’s sensitivities on issues like censorship and security. Facebook and Google are among those blocked by China’s web filters from offering their core services in the country, which is the world’s biggest Internet market.

It is not clear whether any of the companies invited to the Seattle tech forum received the pledge. The document was sent by the China Information Technology Security Evaluation Center, most likely under pressure from China’s main Internet regulator, according to one of the people with knowledge of the letter.

It is also unclear when Chinese officials want a response from the companies on the pledge, but they may be hoping for some sign during next week’s tech forum, or at an Internet conference hosted by China’s Internet regulators later in the year, these people said.

The Cyberspace Administration of China did not respond to a faxed request for comment on the pledge.

Uber, Apple, Google, IBM, Microsoft and Facebook did not immediately respond to requests for comment.

The pledge contains language similar to that in a recently distributed Chinese national security law. The document begins with the statement: “Our company agrees to strictly adhere to the two key principles” and names them as “not harming national security and not harming consumer rights.” It also asks the company to make six additional promises — some seemingly innocuous, like guaranteeing product safety, and others less so, like volunteering to check that products are “secure and controllable.” That could imply an agreement to cater products to Chinese surveillance.

Over the last year, Chinese officials have sought to persuade American companies to support declarations of differing types. In a conference hosted by China’s Internet regulator last year, attendees were given little time to provide feedback on a declaration that said countries should have the right to make their own Internet laws, even if those laws mandate censorship and surveillance. The declaration was ultimately abandoned because of objections.

Signing the new pledge could set a precedent of American tech firms openly cooperating with Beijing and enabling snooping on users. Conversely, a refusal could bring fresh restrictions or penalties for companies in China’s enormous market.

For the most part, American firms have sought to follow Beijing’s wishes in China, while lobbying at home for more pushback against Chinese laws that they say restrict market access and force technology transfers.

To protect their businesses in China, some have transferred intellectual property and cooperated with would-be Chinese competitors. Some have promised huge new investments and used jargon favored by the leaders of the Chinese Communist Party.

In a recent speech, Travis Kalanick, chief executive of the ride-hailing company Uber, said that progress brought by his company had to be “in harmony with stability,” words often used by Chinese officials to signal the dangers of social and political unrest. IBM’s China marketing materials use phrases like “building a harmonious society” and “the Chinese dream,” the latter a phrase coined by Mr. Xi to signify the rejuvenation of the Chinese nation.

Earlier this month, Dell pledged to spend $125 billion in China over the next fiveyears, which is about five times the company’s value when it was taken private in 2013. In June, Cisco pledged $10 billion in investment in China over the next several years. Qualcomm earlier this year said it would help a Chinese chip maker develop advanced semiconductor materials, and IBM transferred intellectual property for one of its lines of servers to a Chinese firm.

Qualcomm declined to comment. Cisco and Dell did not immediately respond to requests for comment.

“Everyone has assumed that it is easier in the market if you are seen as a friend of China,” said Adam Segal, a senior fellow at the Council on Foreign Relations. “People have doubled down on that strategy now that the pressure has increased so dramatically.”

A report released Thursday by the Information Technology and Innovation Foundation, an industry research group, took aim at what it described as China’s mercantilist approach to innovative industries. The report said the United States should establish an industrial intelligence council, create the position of chief trade enforcement officer and restructure the way reviews of foreign investments on national security grounds are conducted.

“Disregard for international rules of market-based competition is increasingly apparent as China continues to develop a robust set of mercantilist policies, virtually all of which violate the spirit, if not the letter, of the World Trade Organization’s laws,” the report said.

Nick Wingfield contributed reporting from Seattle and Neil Gough from Hong Kong.
http://www.nytimes.com/2015/09/17/te...ech-firms.html





MI5 Chief Calls for More Powers to Fight Terrorism Threat
Michael Holden

Britain's security agencies need greater powers to deal with a growing terrorism threat and the advanced technology being used by militants, the head of the country's domestic spy service said on Thursday in the first live media interview by an MI5 chief in its 106-year history.

Prime Minister David Cameron's government plans new laws later this year to bolster surveillance capabilities of spies and police, but faces a battle from privacy and human rights campaigners who say such measures represent an assault on freedoms.

In an interview with BBC radio, MI5 Director General Andrew Parker said Britain was facing its most serious terrorism threat since the Sept. 11, 2001, attacks on the United States and had foiled six attempted attacks in the last year.

"It represents a threat which is continuing to grow largely because of the situation in Syria and how that affects our security," Parker said.

In August last year, Britain raised its terrorism threat level to "severe", the second highest category which means a militant attack is considered highly likely. It was largely due to the danger the authorities say is posed by Islamic State (IS) fighters and the hundreds of Britons who have joined them.

Last week, British police said they had arrested a record number of people on suspicion of terrorism offences, although Parker said his agency was not overly concerned about the thousands of migrants fleeing the ongoing Syrian conflict.

"It isn't actually as we speak today the main focus of where the threat is coming from," he said.

Intelligence chiefs and Cameron have argued for years that the security agencies need more powers to address the threat and prevent another attack on the scale of the London suicide bombings in 2005 when four British Islamists killed 52 people.

OPPOSITION

But moves to bolster surveillance have attracted widespread opposition, including from within Cameron's Conservative party, fuelled in part by former U.S. spy contractor Edward Snowden who has suggested U.S. and British spies are conducting mass monitoring of communications.

MI5 says individuals have been inspired to violence by IS ideology over the internet within weeks, and Parker said he shared the fears of FBI Director James Comey about terrorism suspects "going dark" as spies could no longer legally obtain their communications, making it harder to prevent attacks.

"It's in nobody's interests that terrorists should be able to plot and communicate out of the reach of any authority," said Parker, adding technology and social media companies had an ethical responsibility to come forward if they had concerns about users possible terrorism involvement.

"We're focused on the people who mean us harm," he said. "We're not about browsing through the private lives of the citizens of this country. We do not have population-scale monitoring or anything like that."

Parker also dashed the fantasies of "James Bond" fans, saying MI5 staff were "basically ordinary people".

"I love the James Bond films because they're so distant from reality we can all enjoy the fiction," he said.

(editing by Elizabeth Piper and Stephen Addison)
http://uk.reuters.com/article/2015/0...0RH0XA20150917





Congress Floats an Even Worse Version of CISA

After recent data breaches and cyber attacks, Congress looks to enact broader legal powers via changes to the Computer Fraud and Abuse Act
Fahmida Y. Rashid

Amendments attached to the proposed Cybersecurity Information Sharing Act (CISA) make an "already awful cybersecurity bill" worse by making worrying changes to the years-old Computer Fraud and Abuse Act, the Electronic Frontier Foundation warned recently.
Sen. Sheldon Whitehouse introduced amendments to CISA, which, if approved, would make sweeping changes to the CFAA. Instead of helping harden computer systems or protect people from malicious actors, the new provisions would give prosecutors "more power to threaten more people with more prison time," Cindy Cohn, EFF's executive director, warned in a recent blog post. CISA, with 20-odd amendments, is on the docket for a full vote in the Senate this year.

CFAA is the government's primary tool for going after malicious hackers and cyber criminals, but many in the security industry are wary of the law's numerous loopholes and poorly worded clauses. For example, the law does not define what it means to access computers without authorization, but includes provisions for exceeding authorized access. CFAA was initially enacted in 1986 and has been modified several times as hordes of people started using computers and the Internet became mainstream.

One of the problems lies in the way overzealous prosecutors could take advantage of the way the law is worded to stack on violations. Potential jail time for nonviolent computer crimes can exceed that of some violent crimes.

For a while, there was a growing sense across both parties in Congress that the CFAA needed to be fixed to stop this kind of stacking, Cohn wrote. This past spring, Rep. Zoe Lofgren, Sen. Ron Wyden, and Sen. Rand Paul reintroduced a draft bill named Aaron's Law, after Aaron Swartz, who committed suicide after months of overzealous prosecution under CFAA by the Justice Department. The proposed bill was written to ensure individuals won't face criminal liability for violating a terms of service agreement and rein in out-of-control prosecutors.

However, recent headlines of data breaches and attacks against the government may have redirected Congress's attention away from reforming the law and toward expanding the government's powers to catch and prosecute perpetrators. The Whitehouse amendment would increase criminal penalties by 20 years for persons convicted of existing CFAA felonies that cause or would result in "aggravated damage to a critical infrastructure computer," the EFF said. The group called the "aggravated damage" provision "appallingly vague." The language doesn't specify what constitutes a critical infrastructure computer and, as written, could be read to mean almost any system.

"We cannot stress enough that these changes will not help us against actual cyber crime," the EFF said.

Sen. Whitehouse's amendment also changes how the CFAA views the person's intent, as it changes the mental state from "knowingly and with intent to defraud" to merely whether the person knew "such conduct to be wrongful," the EFF said. It's extremely vague, but more important, it's a broader rule, making it easier to prosecute nearly anyone.

Talk to CFAA critics, and they will complain about how the law lets prosecutors stack charges to increase penalties to several years. But a member of the Department of Justice told Black Hat attendees in August that doesn't actually happen. The average sentence for a case based on CFAA was 23 months, said Leonard Bailey, special counsel for national security at the Department of Justice's Computer Crime and Intellectual Property Section. Jail time for CFAA offenses "routinely have been below the minimum sentence recommended," Bailey said.

Prosecutors are supposed to consider the potential harm to national security and public safety, the sensitivity of the data, and the context of the activities before deciding to use CFAA. Bailey doesn't think prosecutors have shown a tendency to "throw the book" at CFAA violators, based on the fact that the DOJ used the CFAA to prosecute only 194 cases last year, out of the more than 56,000 cases filed.

It's just as possible that overzealous prosecutors still stack charges as a scare tactic to pressure individuals into accepting plea bargains. That way, the case is closed without having to bother with the time and expense of going to trial.

Congress is considering a number of cyber security bills this year, but it is not clear if any of them will come up for a vote over the next few months, considering the already packed legislative calendar. Senate Intelligence Chairman Richard Burr told The Hill he doesn't expect any action on the cyber security legislation until October at the earliest. There is also some question as to whether there are enough votes for the bills to pass, especially in the face of fierce opposition by privacy and civil liberties groups, as well as tech companies.

Congress needs to do more to protect government networks, personal data, and company assets, but despite years of hearings, there is still no consensus on the right approach.
http://www.infoworld.com/article/298...sion-cisa.html





Despite Law Enforcement Concerns, Lebanon Board Will Reactivate Privacy Network Tor at Kilton Library
Nora Doyle-Burr

The Kilton Public Library will reactivate its piece of the anonymous Internet browsing network Tor, despite law enforcement’s concerns that the network might be used for criminal activities.

The Lebanon Library Board of Trustees let stand its unanimous June decision to devote some of the library’s excess bandwidth to a node, or “relay,” for Tor, after a full room of about 50 residents and other interested members of the public expressed their support for Lebanon’s participation in the system at a meeting Tuesday night.

“With any freedom there is risk,” library board Chairman Francis Oscadal said. “It came to me that I could vote in favor of the good ... or I could vote against the bad.

“I’d rather vote for the good because there is value to this.”

Library administrators last month suspended the relay, part of a network of circuits used to divert users’ traffic to keep their locations secret, following a discussion with officials from the City Manager’s Office and Lebanon police. The U.S. Department of Homeland Security had alerted city officials to the fact that Tor sometimes is used by criminals to distribute child pornography or illegal drugs, among other abuses.

At Tuesday’s meeting, both Deputy City Manager Paula Maville and Deputy Police Chief Phillip Roberts said they had not intended to “strong-arm” the library board into making a particular decision.

“We simply came in as law enforcement and said, ‘These are the concerns,’ ” Roberts said during the meeting. “We wanted to inform everyone so it was an educated decision by everyone involved.”

Maville said the issue shouldn’t be viewed as pitting freedom of speech against law enforcement, or the city against the Department of Homeland Security.

“This is about making an informed decision,” she said. “Whatever you need to do, we’re here to support that.”

Alison Macrina, the founder of the Library Freedom Project which brought Tor to Kilton Public Library, said the risk of criminal activity taking place on Tor is not a sufficient reason to suspend its use. For comparison, she said, the city is not going to shut down its roads simply because some people choose to drive drunk.

Tor’s privacy is valued by a diverse group of users, including survivors of domestic violence seeking protection from their abusers, journalists around the world, political activists and law enforcement officials themselves, Macrina said.

If Tor shut down tomorrow, those attempting to break the law would have many other opportunities to do so, Macrina said. But those simply seeking the privacy Tor affords without breaking the law would not have another option, she said.

Through the Library Freedom Project’s pilot program, the Kilton Public Library is the first library in the country to host a Tor relay. Macrina said she hopes more libraries across the country and the world will follow suit.

Reading (Vt.) Public Library Trustee Mildred Waterfall came to Lebanon for Tuesday’s meeting and said the Reading board will discuss hosting a Tor relay at its next meeting.

A former teacher, Waterfall likened the idea of taking Tor away to prevent the criminal activity of a few to a new teacher punishing the entire class for one student’s bad behavior.

“That’s what it feels like,” she said before the meeting.

Lebanon resident and library employee Maria Ortiz, a native of Colombia, told the crowd she wished Tor had been available in her home country 15 years ago.

“Democracy in South America is very powerful on paper, but in America it’s powerful not only on paper,” Ortiz said.

She said the library’s support for freedom of speech “made me proud to be here.”

Others in the crowd similarly expressed support for the library’s initial decision to participate in Tor.

“I felt a tremendous sense of pride that it was my community that was leading the way on this,” Lebanon resident Lee Sussman said. “I would feel very disappointed to be part of a community that shut it down after it began.”

Lebanon resident Raymond Hood said leaving Tor would threaten the freedoms gained in the Revolutionary War.

“What would our forefathers think?” Hood said.

The issues of privacy and intellectual freedom inspired by the Tor relay at the Kilton Public Library spurred approximately 10 people to gather before the meeting on the front lawn of the Lebanon Public Library on East Park Street.

They held various signs, including, “Live free ... or Tor. Free the Library.”

Plainfield resident Bill McGonigle, one of the rally’s organizers, said he ran a Tor relay from his business in Lebanon in 2010 in an effort to assist dissidents in Iran. “The worst-case scenario is people don’t feel free to speak their minds,” he said.

Former Lebanon resident Carla Gericke drove up from Manchester for the rally and the meeting. Originally from South Africa, which she referred to as a “police state,” Gericke said she was concerned that the United States is putting restrictions on intellectual freedom.

“I’m seeing how this country is changing and not in a positive direction,” she said.

Library Director Sean Fleming said the library surveyed residents and other members of the public. Among those who responded, 13 out of 14 residents supported reinstating the Tor relay and 74 out of 75 nonresidents supported the network, Fleming said.

“I recommend that we reinstate the Tor relay,” he said. “Our board approved it once.”

Library Trustee Susan Desrosiers said the discussion had answered her questions and the board’s June decision should stand.

“It’s up to the administration now to start it back up,” she said.
http://www.vnews.com/home/18620952-9...kilton-library

















Until next week,

- js.



















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