|06-07-11, 05:36 AM||#1|
Join Date: May 2001
Location: New England
Peer-To-Peer News - The Week In Review - July 9th, '11
"ISPs…first loyalty should be to their subscribers. Not Hollywood." – Corynne McSherry, EFF
"Copying isn't theft, and it isn't piracy. It's what we did for millennia until the invention of copyright, and we can do it again, if we don't hobble ourselves with the antiquated remnants of a censorship system from the sixteenth century." – Karl Fogel
"I say good riddance to the News of the World." – Tom Watson
July 9th, 2011
Music Rights Groups Raided By Police, Bosses Arrested For Fraud
In a massive operation, Spanish music rights and anti-piracy groups SGAE and SDAE have been raided by more than 50 police officers and tax officials. Operation Saga is the culmination of a two-year investigation into embezzlement, fraud, and misappropriation of funds, the latter connected to SGAE and SDAE collecting money on behalf of artists and spending it with companies they have interests in. The president of SGAE was among 9 people arrested.
On Friday, more than 50 police, tax officials and staff from Spain’s Audit Office were involved in Operation Saga, the culmination of a two-year investigation into the dealings of Spanish music rights and anti-piracy groups SGAE and SDAE.
The groups, which campaign tirelessly for tougher copyright legislation, are the main collecting societies for songwriters, composers and publishers in Spain. Today they are in absolute turmoil.
Acting on a warrant issued by the anti-corruption prosecutor, police raided SGAE’s headquarters in Madrid with orders to detain and question key executives.
Some of the biggest names possible were arrested including SGAE President Eduardo “Teddy” Bautista (right) who was handcuffed and led away under armed guard, Ricardo Azcoaga (CFO of SGAE) and Enrique Loras (Director General of SGAE).
An hour after police arrived some employees were allowed to leave, but not before their laptops and cellphones had been confiscated. Others were detained for questioning while the authorities seized all computers in the sealed-off building. In total the raids lasted more than 14 hours.
The complaint against SGAE stems back to late 2007 when financial irregularities were discovered in SGAE’s handling of the revenue they collect rights payments and revenue from Spain’s blank media levy. The Asociacion de Internautas (Association of Internet Users) and other groups then raised an official complaint with the authorities.
The complaint alleges that SGAE operatives set up companies and used revenue destined for artists to generate profit for themselves and their families, and that money bound for artists living abroad was diverted to personal Swiss bank accounts.
At the center of the storm is SDAE, the digital rights arm of SGAE. Although a notionally separate entity, SDAE is fully operated by SGAE. It appears that when SDAE was being set up, SGAE hired a for-profit company called Microgenesis as consultants.
Microgenesis describe themselves as “a team of specialists in engineering, consultancy and development, managed by individuals with established experience in the fields of intellectual property, as well as the culture and entertainment industries.”
Microgenesis operated a number of companies which provided various services for SGAE and SDAE, some of them suspiciously registered at SGAE/SDAE’s own office address. The problems only deepen when one learns who is behind Microgenesis.
Jose Luis Rodriguez Neri is Director General of SDAE and ex-director of SGAE. His wife, Maria Antonia Garcia Pombo, is the ex-president of Microgenesis. Partner-Chief Legal Officer of Microgenesis is Eva Garcia Pombo. She is Neri’s sister-in-law.
Along with Microgenesis Partner-Chief Executive Officer Rafael Ramos, majority shareholder Elena Vazquez and Partner-Chief Financial Officer Celedonio Martin, all individuals mentioned in the last two paragraphs have been arrested.
The incestuous nature of the business between SGAE, SDAE, Microgenesis and other connected companies is said to have created an illegal and “beneficial economic relationship” for those involved.
It is a huge irony that SGAE, who have longed called for a file-sharing crackdown under a tougher copyright regime, and their partners Microgenesis, a company that provided pro-copyright and DRM solutions for SGAE, now stand accused of fraudulent activities involving funds that should have been for the exclusive use of those they claim to protect – the artists.
The bank accounts of SGAE, which by law is supposed to act as a strictly non-profit organization, have been frozen.
‘Massive Infringement’ Case Against CNET Dropped
Plaintiffs in a federal lawsuit accusing CNET of facilitating “massive copyright infringement” by distributing peer-to-peer software dropped their case Monday.
The May lawsuit was lodged in Los Angeles by a handful of musicians and filmmaker Alkiviades David. They accused CBS Interactive — CNET’s publisher — of illicitly profiting from piracy by distributing 220 million copies of LimeWire over CNET’s Download.com site since 2008 — accounting for 95 percent off all LimeWire downloads.
The case appeared to be nearing its demise last month when the plaintiffs submitted just six copyrights as being infringed. On the July 4 holiday, David quietly dropped the suit.
What remains to be seen are threats by David’s attorney, Adam Wolfson, who wrote in a filing that the case would be re-filed to represent more plaintiffs and “many thousands of songs and other copyrighted works.”
The now-defunct LimeWire service agreed in May to pay $105 million to settle accusations from the recording industry that LimeWire users committed a “substantial amount of copyright infringement.” In that lawsuit, the Recording Industry Association of America sought damages on 9,715 copyrighted recordings, and forced LimeWire of New York to shutter.
CBS has maintained it would “prevail” in the David case.
The Copyright Act allows for damages of up to $150,000 per infringement.
David claimed that CNET maintained a “business model to profit directly from the demand for infringing P2P clients.”
Defendant: Righthaven Should Pay $34,000 for Legal Fees
Las Vegas newspaper copyright lawsuit filer Righthaven LLC should pay $34,000 to cover a prevailing defendant’s legal fees, the defendant’s attorneys argued Tuesday.
U.S. District Court Judge Philip Pro in Las Vegas on June 20 dealt Righthaven a double blow when he found Kentucky resident Wayne Hoehn was protected by fair use in posting an entire Las Vegas Review-Journal column on a sports website; and that Righthaven didn’t have standing to sue over the post.
Righthaven has hinted it may appeal Pro’s ruling but as of Tuesday morning had not done so. Hoehn’s attorneys, in the meantime, submitted a $34,000 bill to Pro on Tuesday and asked that he require Righthaven to pay it.
The $34,000 could be just the tip of the iceberg for Righthaven, should the Democratic Underground prevail in what likely will be a far larger fee demand. At least three other defendants whose cases were dropped or dismissed – Brian Hill, Michael Leon and Denise Nichols – are demanding their fees be paid too.
Attorneys for the Electronic Frontier Foundation are also considering seeking fees for their representation of defendant Thomas DiBiase, whose case was dropped because of Righthaven’s lack of standing to sue.
Righthaven also faces potential monetary sanctions in the Democratic Underground case.
Righthaven since March 2010 has filed 274 lawsuits alleging online infringement of material from the Review-Journal and the Denver Post. Its litigation campaign appears to be stalled because two federal judges have found Righthaven doesn’t have standing to sue and three more are threatening to do the same thing.
Righthaven claims to own the copyrights it sues over, but judges Pro and Roger Hunt in Las Vegas have found Stephens Media LLC, owner of the Review-Journal, maintains too much control over the copyrighted material for Righthaven to have standing to sue.
In the Hoehn case, attorneys for Randazza Legal Group noted the fair use victory for Hoehn was Righthaven’s third fair use loss vs. no final orders providing fair use victories to Righthaven.
They noted fair use is an important concept under the First Amendment and copyright law as it allows people to use, within limits, the work of others for purposes such as commentary and criticism.
"Fair use is valuable when counterbalancing the potential free speech costs of an unchecked copyright regime," Hoehn’s attorneys wrote in Tuesday’s filing.
"Hoehn stood up for fair use – for free speech – and he prevailed," his attorneys wrote of the Vietnam War veteran.
"At this point, the court must consider whether to grant Hoehn his attorneys’ fees as a `prevailing party,’” they wrote. "If the court fails to do so, a terrible injustice will be done, and the moral of Mr. Hoehn’s story will be that standing up for what is right will bankrupt you – so better to give your money to any bully with a summons in hand. The fact is, when Mr. Hoehn stood up for fair use, he stood up for all of us. His contribution to the public good should not be met with indifference."
Instead of caving in to Righthaven’s $150,000 statutory damages demand and settling, Hoehn fought for the principal that his use of the column was a fair use as it was noncommercial and was aimed at stimulating discussion on an important public policy issue involving public employee pensions, his attorneys argued.
They’ve likened Hoehn’s use of the column to someone cutting a story out of a newspaper and pinning it on a community bulletin board for all to see – and Pro in his fair use analysis found the noncommercial nature of the post was a major factor in its protection as a fair use.
Righthaven, however, says its lawsuits are necessary to deter widespread infringements of newspaper material and in Hoehn’s case, it argued unsuccessfully that Hoehn's use of the R-J column was more like a book club "where the participants were given unauthorized, free photocopies of an author’s book to read and discuss."
Hoehn’s attorney say Righthaven, as a mass lawsuit filer, hasn’t properly considered when material can be used under the fair use doctrine.
For instance, it sued a reporter for posting a public court document, it sued the Democratic Underground for a post of four paragraphs of a 34-paragraph story, it sued another defendant for posting eight sentences of a 30-sentence article and judges have found there’s no way Righthaven can be damaged under the "market harm" test as there is no market for copyrights held by Righthaven, attorneys fighting Righthaven have noted.
"This pattern of conduct evinces Righthaven’s total disregard for even the notion of fair use, and that many of the republications it targets are not infringements at all. Instead, Righthaven was going to continue its campaign terrorizing people into making payments to it, and if they wanted to raise fair use as a defense, it would cost them dearly – as it has cost Mr. Hoehn. This cost should be shifted to Righthaven, as provided for by the Copyright Act," Randazza Legal Group attorneys Marc Randazza and J. Malcolm DeVoy IV wrote in their filing Tuesday.
Righthaven hasn't yet responded to Tuesday's fee motion.
Judge Rejects Apple Bid for Injunction Against Amazon
A U.S. judge denied Apple Inc's attempt to quickly stop online retailer Amazon.com Inc from using the "App Store" name, according to a court document.
Apple, the maker of best-selling iPhones and iPad tablets, filed a trademark lawsuit saying that Amazon has improperly used Apple's App Store name to solicit software developers throughout the United States.
Apple also asked a federal judge in Oakland, Calif. for a preliminary injunction to stop Amazon from using the name, which Apple says is trademark protected. However, Amazon argued that the term is generic and therefore not protectable.
U.S. District Judge Phyllis Hamilton did not agree that the term is purely generic, according to an order released on Wednesday. However Apple has not established "a likelihood of confusion" with Amazon's services to get an injunction, Hamilton wrote.
On Wednesday Apple spokeswoman Kristin Huguet referred to the company's prior statements, which said Apple asked Amazon not to copy the App Store name because it will "confuse and mislead customers."
An Amazon representative could not immediately be reached for comment.
In an earlier ruling on Wednesday, Hamilton set a trial date for October 2012.
The case in U.S. District Court, Northern District of California is Apple Inc v. Amazon.com Inc, 11-1327.
(Reporting by Dan Levine; editing by Carol Bishopric)
Unlicensed: Are Google Music and Amazon Cloud Player Illegal?
Timothy B. Lee
Amazon.com made waves in March when it announced Cloud Player, a new "cloud music" service that allows users to upload their music collections for personal use. It did so without a license agreement, and the major music labels were not amused. Sony Music said it was keeping its "legal options open" as it pressured Amazon to pay up.
In the following weeks, two more companies announced music services of their own. Google, which has long had a frosty relationship with the labels, followed Amazon's lead; Google Music Beta was announced without the Big Four on board (read our first impressions). But Apple has been negotiating licenses so it can operate iCloud with the labels' blessing.
The different strategies pursued by these firms presents a puzzle. Either Apple wasted millions of dollars on licenses it doesn't need, or Amazon and Google are vulnerable to massive copyright lawsuits. All three are sophisticated firms that employ a small army of lawyers, so it's a bit surprising that they reached such divergent assessments of what the law requires.
So how did it happen? And who's right?
A lost decade
It was a service ahead of its time. Slip a CD into your computer, and the music on it would instantly be added to your online locker. From there, it could be streamed to any Internet-connected computer. Several services do this today, but MP3.com was launched more than a decade ago.
The site was a 1990s dot-com star, flush with cash from its $340 million IPO. The recording industry sued, arguing that MP3.com needed licenses to store and then stream their music. MP3.com countered that the technology was legal under copyright's fair use doctrine, much as format-shifting a CD might be.
A federal judge sided with the labels, and the threat of astronomical statutory damages forced MP3.com to settle the case for $53.4 million. Weakened by litigation and the bursting of the dot-com bubble, the company was forced to sell itself to Vivendi Universal in 2001; the music locker feature was abandoned soon afterwards.
After the acquisition, the new parent company ordered MP3.com to sue its old law firm for malpractice, arguing that no competent lawyer would have advised a client that operating the streaming service was legal under copyright law.
This scorched-earth strategy worked. MP3.com founder Michael Robertson describes the record labels' legal strategy as "a very effective campaign of terror." By making examples of Napster, MP3.com, and other early innovators, the music industry was able to scare most of Silicon Valley away from developing technologies that would disrupt their industry. For example, angel investor Paul Graham has compared the labels to a "rogue state with nuclear weapons," and he discourages entrepreneurs from creating startups that touch their music.
The result was a lost decade for music innovation. Throughout the '00s, no major software companies followed in Robertson's footsteps to create music locker services.
Signs of life
The first green shoot to break through this parched ground was a 2008 decision by the United States Court of Appeals for the Second Circuit. The defendant was the New York cable company Cablevision. Rather than giving subscribers traditional DVRs that recorded programs within their homes, Cablevision developed an innovative "remote storage" DVR. Like an ordinary DVR, it records programs selected by the user and plays them back later, but the recorded content is stored in a Cablevision server room rather than a user's living room.
As usual, content providers sued for copyright infringement, saying that Cablevision was retransmitting their content without permission. Cablevision countered that its service was identical to users owning a long-range remote control, that all recording was done at the direction of users, and that separate copies of content were kept for each subscriber. How could the mere length of the wire make copyright infringers of the company?
In 2008, the Second Circuit ruled for Cablevision. The decision has obvious relevance for music lockers, as Cablevision argued that it was merely serving as a passive conduit for users to store and retrieve their content; music lockers say the same.
James Grimmelmann, a law professor at New York Law School, spoke with us about the legal implications of Cartoon Network v. Cablevision. It was a groundbreaking decision but also a "bizarre" case that fails to resolve a number of key issues, he said. Many observers expected the argument to focus on applying the Supreme Court's 1984 Sony decision, which held that "time shifting" with a VCR is legal under copyright's fair use doctrine. But the parties chose not to litigate the fair use question, focusing exclusively on whether Cablevision was directly liable for copyright infringement.
Thus, the Cablevision decision offers no real guidance on how to apply Sony to remote storage services. Nor does it provide any clarity on whether the providers of such services face indirect liability for the infringing activities of their users.
Still, when the Supreme Court declined to hear the Cablevision appeal in June 2009, the Second Circuit's decision became the strongest available legal foundation for a music locker service. So far this year, three companies—Amazon, Google, and Apple—have jumped on the opportunity it provided. And if these pioneers don't get burned, others are likely to follow.
While all this was happening, MP3.com founder Michael Robertson wasn't sitting still. Radicalized by the labels' destruction of MP3.com, he launched a new company called MP3tunes in 2005. It bore an uncanny resemblance to his original firm. Users could purchase songs from an online store for $0.88 and store them in a music locker for streaming to any device. They could also upload music from their computers, or "sideload" free music from the Web using a search engine called sideload.com.
To no one's surprise, Robertson found himself in court again. EMI filed suit in 2007, and the two companies have been locked in litigation ever since. Robertson says the parties have concluded their arguments and are now awaiting the judge's ruling.
In our common-law system, earlier court decisions create precedents that shape later litigation. This means that, whether they like it or not, Robertson's competitors could be influenced by the outcome of his case. If Robertson wins his lawsuit, then Jeff Bezos and Larry Page can sleep more easily. On the other hand, if MP3tunes loses, it could call into question the legality of the larger companies' products. Google, at least, has taken an active interest in the MP3tunes case, filing an amicus brief in January in support of MP3tunes.
Looking for a safe harbor
One of the key weaknesses in MP3.com's legal defense was a consequence of its novel method of stocking its customers' lockers. In an era of 28.8k modems, actually ripping and uploading users' CD collections would have been a long, tedious process. So MP3.com came up with a novel solution: when a user inserted a CD into her computer, a fingerprint was calculated and compared to the fingerprints of thousands of ripped CDs that MP3.com had already loaded onto its servers. Users didn't actually have to upload their music because once MP3.com verified that a user had a copy of a particular CD, it just used the ripped copy it already had.
This "Beam-It" feature was functionally equivalent to a system in which users actually ripped and uploaded their music, and it was a lot more efficient. But it wasn't identical, and it created a fatal weakness in MP3.com's legal position. The Digital Millennium Copyright Act immunizes online service providers from liability when they store files on their servers "at the direction of a user." MP3.com was ripping the CDs itself; with no user involvement, it wasn't eligible for this powerful defense.
The newer MP3tunes avoided this Achilles' heel. With broadband now ubiquitous, Mp3tunes requires users to upload actual copies of their music, greatly strengthening its claim to the safe harbor.
But EMI argues that MP3tunes is still ineligible for the safe harbor. To qualify, service providers must promptly remove material if they become "aware of facts or circumstances from which infringing activity is apparent." MP3tunes operates sideload.com, a music search engine that allows users with MP3tunes accounts to "sideload" search results into their lockers with one click. Plenty of infringing music is available in sideload.com search results, and EMI argues that MP3tunes's failure to actively filter these results makes it ineligible for the safe harbor.
Robertson tells Ars that this reading of the DMCA is too demanding. He points out that many of the same music files are available through mainstream search engines such as Google and Bing. A brief filed by Public Knowledge and several other groups agrees, arguing that the law only requires a service provider to remove specific content when they become aware it is infringing. They say that requiring services to actively monitor for infringing content would defeat the whole purpose of the safe harbor.
Google's ongoing struggle with Viacom over infringing content on YouTube will set an important precedent on this issue because Viacom made many of the same arguments about YouTube that EMI is now making about MP3tunes and sideload.com. In that case, Google prevailed at the district court level, and its appeal is now before the Second Circuit—the same court that decided Cablevision (and would hear any appeals in the EMI v. MP3tunes case).
Even if MP3tunes loses on the DMCA immunity issue, it can still fall back on the Second Circuit's holding in Cablevision, arguing that it is is merely a passive provider of file-storage services.
But MP3tunes faces a serious obstacle to making this argument. In Cablevision, the Second Circuit relied on the fact that the RS-DVR system made a distinct copy of a program for each user who recorded it. This design choice strengthened the analogy between Cablevision's product and a traditional home VCR/DVR. It also helped Cablevision dodge liability under a 1984 decision that held that repeatedly showing the same video to different customers could violate the copyright holder's "public performance right."
Critics say the distinction is nonsensical. "There's no underlying policy logic," Grimmelmann tells Ars. "It's just courts distinguishing precedents they don't want to agree with."
Robertson—whose MP3tunes service deletes redundant copies if multiple users upload the same file—claims it would be proposterous to hold his company liable over this implementation detail. "If MP3tunes is guilty of copyright infringement for deduplication, then so is every technology company in the United States," he says.
He has a point. As the Public Knowledge brief points out, such "deduplication" techniques are widely used in the IT industry. They are used by mail servers, cloud-storage services, and backup software. Indeed, recent versions of Windows and Mac OS X have file systems with "transparent compression" functionality—essentially deduplication by another name.
If the courts hold that MP3tunes's use of deduplication techniques makes it liable for copyright infringement, numerous companies with otherwise-legal products could be forced to re-engineer them in a deliberately inefficient way to avoid liability.
New kids on the block
How do these factors affect Robertson's competitors? Amazon, Google, and Apple all offer the same core "music locker" functionality, but they each have important differences that could affect how each is viewed by the courts.
Apple has signed deals that should avoid legal trouble with the major labels, but they don't get Apple completely out of the woods. As we've reported, not every recording company is jumping on the iCloud bandwagon. Presumably, customers will demand that all of their songs be synced with iCloud regardless of whether Apple has signed a deal with their copyright holders. So Apple will have to choose between shipping an inferior product or risking lawsuits from smaller labels that choose not to sign up for iCloud. If it does the latter, then even Apple will have a (small) stake in MP3tunes' success.
Google has taken the much larger risk of creating a music service without paying the labels a dime. But its strategy is conservative in every other respect. The company wouldn't talk to Ars on the record, instead directing us to its Tems of Service, which state that "you are directing Google to store a unique copy of Your Music on your behalf." This suggests that Google will be making millions of redundant copies of users' music in order to strengthen its claim to the Cablevision defense.
Google Music Beta doesn't offer the extensive sideloading functionality offered by MP3tunes—or, as far as we can tell, any sideloading options at all. Users will only be able to upload music from their computer hard drives, not from other sites. This strengthens Google's argument that its actions are legal under Cablevision, and also insulates the company from arguments that Google should be excluded from the DMCA safe harbor because too many users are sideloading pirated music.
Amazon.com did not respond to our request for an interview, so its situation is the least clear to us. But given the stakes, and Amazon's deep pockets, we're willing to bet the company will follow Google's lead and eschew deduplication despite its potential cost savings.
Grimmelmann points to one key difference between Google and Amazon: Amazon offers users the option to purchase music and put it directly into their lockers. "Amazon took the position that they didn't require additional permissions under their existing licenses" to offer this feature, he said. He isn't sure what legal theory Amazon uses to justify doing this, but "whatever it is, I'm confident their lawyers think it's fine."
We sought comment from the recording industry, but they were tight-lipped. The RIAA has praised Apple's licensed iCloud service, but an RIAA spokesman declined to comment on Google and Amazon's cloud music offerings.
An uncertain future
In other words, barring a major oversight by Amazon's lawyers, Google and Amazon are probably in the same legal boat. They have two lines of defense. The first is the DMCA safe harbor; if the courts decide they qualify, then they're likely to be immune from liability regardless of other factors.
If they aren't eligible for the safe harbor, then they'll fall back on the Second Circuit's Cablevision case. But this strategy has several risks. One risk is that the case could be litigated in another circuit that declines to follow the Second Circuit's lead. Another is that they could lose on the fair use issues the the Second Circuit didn't consider in Cablevision. A court could find that fair use does not entitle users to upload their music collections to a third-party server, and that Google and Amazon are liable for facilitating and profiting from this infringing activity.
These risks will be heigtened if MP3tunes loses its battle with EMI. If EMI wins, the labels will try to convince the courts that Cloud Player and Music Beta are more like an MP3tunes music locker than a Cablevision RS-DVR. By closely following Cablevision's design principles and eschewing the more controversial features of MP3tunes, Google and Amazon have done all they can to make this a difficult argument to make. But MP3tunes, Music Beta, and Cloud Player still have the same core functionality, so the courts may not be convinced.
Still, judges seem to be strongly influenced by their perceptions about whether defendants are good corporate citizens. By carefully limiting their products' functionality and scrupulously hewing to the contours of the Cablevision case, Google and Amazon create the impression that they are well-meaning innovators doing their best to follow the law. That's doesn't guarantee that they'll prevail, but it's the best they can do in a deeply uncertain legal environment, short of paying for licenses.
If forced to bet, our money would be on Google and Amazon's services withstanding court scrutiny—but it's a tough call.
As for Robertson, we'd like to see him win, but we're not convinced he will. Sideload.com is a remarkably useful and well-designed service, but it's also an extremely convenient way to get large quantities of infringing music. Theoretically, this shouldn't matter for the DMCA safe harbor analysis; many of the same files are available on mainstream search engines. But it could affect the court's perception of MP3tunes's good-citizen status. If the courts think that MP3tunes and sideload.com are primarily a copyright-infringement system, they will figure out a way to rule against the company.
Sony 'PSN Pass' To Restrict Used Online Access In Some First-Party Titles
Sony will include a "PSN Pass" code needed to activate "full online access" in new copies of some first-party titles, starting with September's release of Resistance 3, the company announced today.
The company didn't offer details on how used and rental players would access online features in these titles, but did clarify that first-party use of the passes will be decided on a game-by-game basis.
"This is an important initiative as it allows us to accelerate our commitment to enhancing premium online services across our first party game portfolio," Sony said in a statement issued shortly after rumors of the program began leaking in the media.
The effort mirrors similar programs implemented by publishers such as EA and THQ, which require used and rental game players to pay an extra fee for online features or content in certain games. Publishers do not generate any revenues directly from the sale of secondhand games.
Andrew House, former SCE Europe president and now head of Sony's PlayStation business, said last August that the company was "broadly supportive" of such efforts to lock online content for used purchasers, and that the company was "exploring actively the same option for our own content."
SCEA SVP of publisher relations Rob Dyer made similar statements in a Gamasutra interview last May, calling the lack of direct revenue from the secondhand market "very frustrating."
"I am a big believer in encouraging the gamer to have a reason to hold onto [a game] and to continue to play, and for the publisher to be able to see something if there is a second sale," Dyer said, "because right now, for years, as a publisher, we saw nothing [from used sales]."
US Claims All .Com And .Net Websites Are In Its Jurisdiction
Sees an Internet without borders
THE US Immigration and Customs Enforcement agency (ICE) wants to take down web sites that use the .com and .net top level domains (TLD) regardless of whether their servers are based in the US.
Erik Barnett, assistant deputy director of ICE said told the Guardian that the agency will actively target web sites that are breaking US copyright laws even if their servers are not based in the US. According to Barnett, all web sites that use the .com and .net TLDs are fair game and that, since the Domain Name Service (DNS) indexes for those web sites are routed through the US-based registry Versign, ICE believes it has enough to "seek a US prosecution".
According to the Guardian, ICE is not focusing its efforts just on web sites that stream dodgy content but those that link to them, something the newspaper claims has "considerable doubt as to whether this is even illegal in Britain". It points out that the only such case to have been heard by a judge in the UK was dismissed.
Barnett said, "By definition, almost all copyright infringement and trademark violation is transnational. There's very little purely domestic intellectual property theft."
However Barnett's claim that because Verisign is the registry for .com and .net TLDs that gives ICE jurisdiction over servers based in foreign countries seems tenuous at best. Nevertheless he said, "Without wishing to get into the particulars of any case, the general goal of law enforcement is to arrest and prosecute individuals who are committing crimes. That is our goal, our mission. The idea is to try to prosecute."
Jim Killock, executive director of the Open Rights Group told the Guardian, "This seems absurd [...] if you don't have some idea that there's a single jurisdiction in which you can be prosecuted for copyright infringement that means you're potentially opening an individual to dozens of prosecutions."
ICE is most probably banking on expectations that those it accuses of sharing copyrighted content won't be able to afford a legal team to question its claim that its jurisdiction extends beyond US borders.
And Speaking of the Inalienable Right to the Pursuit of Happiness . . .
. . . Happy Fourth to you all! Along with 90 (and still counting) other Internet law and IP law professors, I have signed a letter (drafted by Dave Levine, Mark Lemley, and me) in opposition to Sen. Leahy’s “PROTECT IP Act.” [The letter is posted below — the text of the bill, if you’re into that sort of thing, is posted here.]
PROTECT-IP Letter, Final
The bill, which will allow the government to obtain injunctions against domain names hosting allegedly copyright-infringing or trademark-infringing material, and to have those domain names deleted from the Internet’s databases, represents a serious assault on the fundamental principles that have built the Net — the design principles at the heart of its technical infrastructure, and the free speech principles it has done so much to foster and cultivate around the globe, all at the behest of your friends in the recording and motion picture industries. [If you want to see why it’s a dreadful piece of legislation purely from the technical side, take a look at this white paper prepared by some of the most respected members of the Internet technical community]. We’ve seen this before — in last term’s COICA legislation, which thankfully died in Committee (thanks to Oregon Senator Ron Wyden, who has continued his opposition to the Protect IP Act, and whom we should all thank for his efforts). It’s always hard to gauge how likely a bill is to become law, but I’m told there’s some momentum around the Protect IP Act, and hopefully those who actually care about the Net and its potential will rally in opposition.
And speaking of our old friend Thomas Jefferson ... Larry Lessig, a friend and colleague, has contributed a very interesting short Foreword to what will become (soon?) the paperback edition of my book — you might find it of interest as you contemplate Jefferson’s contributions on this day ...
Sweden: File Sharing Not Act of Worship
Swedish officials ruled against a Swedish group's attempt to have Internet file sharing classified as an act of religious worship.
The Swedish Legal, Financial and Administrative Services Agency rejected the attempt by the Pirate Party of Uppsala to have their information copying and spreading activities registered as a religious faith known as The Missionary Church of Kopimism, The Local reported Thursday.
The church's name came from the "Kopimi" -- pronounced "copy me" -- logo placed on the Web sites of people who are willing to have the contained information copied.
Isak Gerson, missionary director at the Church of Kopimism, said he does not know why the application was rejected.
"It feels bitter. Last time we applied there were valid reasons for their rejection. We've had a dialogue with them since then, and sent in a new application with changes based on this dialogue," he said. "So it feels rough not to know why we were rejected."
The Pirate Party, founded in 2006, is aimed at the legalization of Internet file-sharing and promoting Internet privacy.
The 'Intellectual Property' Oxymoron
"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of everyone, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property."
— Thomas Jefferson
"I personally think intellectual property is an oxymoron. Physical objects have a completely different natural economy than intellectual goods. It's a tricky thing to try to own something that remains in your possession even after you give it to many others."
-- John Perry Barlow
"Royalties are not how most writers or musicians make their living. Musicians by and large make a living with a relationship with an audience that is economically harnessed through performance and ticket sales."
-- John Perry Barlow
Government granted monopolies have unintended consequences
So called 'intellectual property' laws are basically government granted monopolies, that while intending to encourage creativity have exactly the opposite effect.
Many examples and studies have shown the harmful effects of copyright and patents, but the reasons for this effects would be much more clear if one realizes that copyrights and patents are dramatic and arbitrary restrictions of both freedom of expression and free trade.
Like with any other government regulations, it is not surprising that big corporations (eg., Microsoft and Monsanto) use them to stifle competition; and other special interests (eg., the Church of Scientology) use them to censor criticisms and further their own agendas.
Aside from all the abuses and unintended consequences, copyright and patents are a great obstacle to creativity and innovation: the creations of all great thinkers, inventors and artists in history would never have been possible in a vacuum and always depend on a context consisting of all the preexisting works and ideas.
Copying isn't theft
"Copying isn't theft, and it isn't piracy. It's what we did for millennia until the invention of copyright, and we can do it again, if we don't hobble ourselves with the antiquated remnants of a censorship system from the sixteenth century." — Karl Fogel
Copyright infringement is not stealing, and copyright law is against the free market, it is a government sponsored monopoly.
Copyright law is routinely abused to suppress free speech and individual freedoms, it is abused by recording companies to exploit artists, it is abused by governments to control information. Copyright law is not only evil, it is also stupid, and should be ignored by anyone that believes in a free society and free markets.
Bach, Shakespeare and Michelangelo didn't need copyright, we don't need copyright. Copyright infringement is a victim-less crime, nobody has a right to have a monopoly on ideas or information, you have a right to keep your ideas and information private, but if you make them public, they are not your private property anymore.
Copyright also is in direct conflict with one of the most fundamental principles of a free society: free speech. Copyright has been used again and again to censor and silence critics, once more failing its supposed real purpose.
"For one thing, there are many “inventions” that are not patentable. The “inventor” of the supermarket, for example, conferred great benefits on his fellowmen for which he could not charge them. Insofar as the same kind of ability is required for the one kind of invention as for the other, the existence of patents tends to divert activity to patentable inventions." — Milton Friedman
ISPs to Disrupt Internet Access of Copyright Scofflaws
The nation’s major internet service providers, at the urging of Hollywood and the major record labels, have agreed to disrupt internet access for online copyright scofflaws.
The deal, almost three years in the making, was announced early Thursday, and includes participation by AT&T, Cablevision Systems, Comcast, Time Warner and Verizon. After four copyright offenses, the historic plan calls for these companies to initiate so-called “mitigation measures” that might include reducing internet speeds and redirecting a subscriber’s service to a landing page about infringement. The internet companies may eliminate service altogether for repeat offenders, although the plan does not directly call for such drastic action.
The agreement, backed by the Recording Industry Association of America and the Motion Picture Association of America, also does not require internet service providers to filter copyrighted material sailing through peer-to-peer protocols. U.S. internet service providers and the content industry have openly embraced filtering, and the Federal Communications Commission has all but invited the ISPs to practice it.
“This is a sensible approach to the problem of online content theft,” said Randal Milch, Verizon’s general counsel. Cary Sherman, the RIAA’s president, said the deal was “groundbreaking” and “ushers in a new day and a fresh approach to addressing the digital theft of copyrighted works.”
The RIAA, which includes Universal Music Group Recordings, Warner Music Group, Sony Music Entertainment and EMI Music North America, kicked off the marathon negotiations in December 2008, when it abruptly stopped a litigation campaign that included some 30,000 lawsuits targeting individual file sharers. Key leverage in the marathon negotiations included the Digital Millennium Copyright Act, which demands that ISPs have a termination policy in place for repeat infringers, and New York Governor Andrew Cuomo, who brought the parties together when he was that state’s attorney general.
The plan, however, provides no immunity from internet subscribers facing legal action, and leaves it up to the rights holders to detect infringement.
“As provided under current law, copyright owners may also seek remedies directly against the owner of an internet account based on evidence they may collect,” according to the deal.
The Copyright Act allows damages of up to $150,000 per infringement. Peer-to-peer file sharing of copyrighted works is easily detectable, as IP addresses of internet customers usually reveal themselves during the transfer of files.
On the first offense, internet subscribers will receive an e-mail “alert” from their ISP saying the account “may have been” misused for online content theft. On the second offense, the alert might contain an “educational message” about the legalities of online file sharing.
On the third and fourth infractions, the subscriber will likely receive a pop-up notice “asking the subscriber to acknowledge receipt of the alert.”
After four alerts, according to the program, “mitigation measures” may commence. They include “temporary reductions of internet speeds, redirection to a landing page until the subscriber contacts the ISP to discuss the matter or reviews and responds to some educational information about copyright, or other measures (as specified in published policies) that the ISP may deem necessary to help resolve the matter.”
Online infringement, according to the MPAA and RIAA, accounts for thousands of lost jobs and billions of dollars in lost wages annually.
Members of the MPAA include Walt Disney Studios, Paramount Pictures, Sony Pictures, Twentieth Century Fox, Universal City Studios and Warner Bros.
Should You Fear New ISP Copyright Enforcers?
A partnership announced today between big entertainment companies and some of the nation's largest Internet service providers will not mean the end of online piracy. To be sure, the parties involved know this.
The most savvy tech users and dedicated file sharers will continue to pirate content and perhaps there isn't any way to stop them. But the hope of Hollywood film studios and the four largest record companies is that the participating ISPs, which include Comcast, Cablevision, Verizon, and Time Warner Cable, can help discourage mainstream Internet users from sharing content illegally over the Web.
The thinking is that maybe, with the help of the ISPs, that $7.99 a month Netflix subscription or that 99-cent price for an iTunes' song will become more attractive to users than pirating content--if the cost of that is slower download speeds or losing Web access entirely.
But the ISPs came to this agreement, first reported by CNET last month, kicking and screaming. Sometime early next year, the participating ISPs will begin cracking down harder on accused content pirates. The program will start with warnings to stop but for those who refuse to quit, they risk losing access to the Web until they do.
For the past three years, many of the big ISPs have declined to adopt "graduated response" programs. That's the term coined by big media to describe when ISPs ratchet up pressure on the people suspected of acquiring intellectual property without paying for it.
The respective trade groups for the top music and film companies, the Recording Industry Association of America (RIAA) and Motion Picture Association of America, naturally wanted the toughest penalties they could get. Originally they had asked that the ISPs to adopt a "three-strikes" plan, which would would mean a user received three warnings from a bandwidth provider before service was suspended or terminated. The ISPs said no way.
In the end, the ISPs held their noses and began looking for ways to cover themselves against PR hits. Instead of three strikes, the ISPs opted for six strikes. They also padded the program with so-called educational aspects but regardless of all the distractions, there's way to cover up that the ISPs have agreed to levy punishments on customers.
Those ISPS that have partnered with the music and film sectors, have the option of issuing six warnings to a subscriber before moving to the "mitigation stage." Way down in the press release announcing the agreement is the bit about how the ISPs will hobble the connection speeds of those accused of multiple offenses or who are completely cut off their Web connection until they stop infringing intellectual property.
The ISPs dread spooking subscribers, or to appear to be spying on them. It's possible the agreement would have never been completed had U.S. President Barack Obama and New York Governor Anthony Cuomo, who got involved in the negotiations as early as 2007, not pressured both sides to cut a deal.
Cuomo, who was then New York's attorney general, got involved because he believed that it was good for the state for two of the leading industries to get along and help each other, Steve Cohen, Cuomo's chief of staff, told CNET. Up until that point, the film and music sectors were in attack mode, accusing bandwidth providers of profiting from piracy. Cuomo recognized that a deal that benefited both sides could be reached without lawsuits or any serious government intervention, Cohen said.
Cuomo, like Obama, argues that piracy robs U.S. citizens of jobs and the nation's companies of revenue.
But not everyone believes that file sharing has hurt those that create content. Corynne McSherry, an attorney and director of intellectual property issues for the Electronic Frontier Foundation, a group that advocates for Internet users and tech companies, notes that scores of musicians have adapted to digital technology and are doing fine.
She argues that the new agreement creates more problems than it solves. Among her criticisms of the graduated response process are that someone's Internet access can be cut off without any judicial review. She noted that the ISPs and entertainment companies have said they will create an independent review process for those who claim to be wrongly accused, but McSherry is skeptical that anyone hired by those groups will be conflict free.
Among McSherry's greatest fears is that this is only the first step. She sees the potential, now that big media firms, have the ability to push ISPs into copyright enforcement, that they will continue to pressure them to keep ratcheting up the penalties against suspected file sharers.
Is McSherry sympathetic to the ISPs who have faced government pressure to do more on antipiracy? Not so much.
"I wouldn't be at all surprised to learn that the ISPs are under tremendous pressure and that's why they're knuckling under," McSherry said. "But their first loyalty should be to their subscribers. Not Hollywood.
"At the end of the day," McSherry said, "this is unlikely to accomplish much. All it will do is intimidate a lot of lawful users. Are we going to see the end of online infringement? I doubt that very much. It will be more valuable for the White House, ISPs and Hollywood if they found better ways to getting artists paid instead of focusing on punishment."
Five Disturbing Things About the Interpol Filter
This month, Australia gets its first mandatory Internet filtering scheme, courtesy of a project which is seeing the nation’s largest ISPs Telstra and Optus block their users from visiting a ‘worst of the worst’ list of child pornography sites defined by international agency Interpol. But the project hasn’t exactly come up smelling like roses. Here’s five things we find disturbing about the whole thing.
1. Telcos aren’t informing users
Telstra’s implementation of the filter went live last week. However, to our knowledge, Telstra hasn’t yet informed its millions of customers that their Internet connections are being filtered for a blacklist of sites. There has been no mass customer emails that we know of, no press releases, and the telco only confirmed its blacklist filter had gone live when we asked it late on Friday night last week.
Furthermore, the telco does not appear to have modified its end user agreement to include a section about filtering, so that new customers know what to expect.
2. There is no civilian oversight
You would expect that if millions of Australians are having their Internet connections filtered for a blacklist of sites, that there would be an independent government agency overseeing the process — such as the Australian Communications and Media Authority. Not so with the Interpol filter scheme.
The scheme was developed by industry group the Internet Industry Association, along with ISPs like Telstra and Optus and law enforcement groups such as the Australian Federal Police and Interpol itself. Those who are curious about how the whole filter process works currently have to enquire about the matter to one of these bodies.
Out of those groups, only the IIA has been forthcoming with details about the intricate workings of the filter over the past several weeks since the scheme was revealed. And the IIA is not directly answerable to the public — only its members, which are mainly ISPs.
3. The law is unclear
The legal mechanism under which the filter is being introduced is Section 313 of the Telecommunications Act. Under the Act, the Australian Federal Police is allowed to issue notices to telcos asking for reasonable assistance in upholding the law. It is believed the AFP has issued such notices to Telstra and Optus to ask them to filter the Interpol blacklist of sites.
However, other ISPs such as iiNet, Internode, TPG and Exetel appear to be uncertain as to where precisely they would stand if the AFP issued such a notice to them. Would they be forced to implement a filter against their wishes? Would they even be able to publicly disclose that they had received a notice? Is ISP filtering itself actually currently illegal? Right now, nobody knows.
4. The potential for scope creep is strong
Section 313 of the Telecommunications Act does not specifically deal with child pornography. In fact, it only requires that ISPs give government officers and authorities (such as police) reasonable assistance in upholding the law.
Because of this, there appears to be nothing to stop the Australian Federal Police from issuing much wider notices under the Act to ISPs, requesting they block other categories of content beyond child pornography, which are also technically illegal in Australia (‘Refused Classification’) but not blocked yet. A number of sites which were on the borderlines of legality — such as sites espousing a change of legislation regarding euthanasia — were believed to be included as part of the blacklist associated with the Federal Government’s much wider mandatory filtering policy. Could the AFP request these be blocked as well?
5. There is no open and transparent appeal process
Right now, if a web site is wrongfully included on Interpol’s blacklist of sites, there is only one way to appeal and get it removed — through Interpol or associated law enforcement agencies such as the Australian Federal Police. And Interpol doesn’t appear to want to discuss the matter very much. Its ‘complaints procedure’ page states:
“Interpol will not be in position to engage in dialogue with complainants, nor will they receive any information on whether the domain has been removed from the list of blocked domains or not.”
In contrast, the Federal Government has pledged to introduce much more transparent review processes into its much wider Internet filtering scheme. For example, its blacklist will be reviewed annually by an independent expert, feature “clear ” avenues for appeal of classification decisions and a policy will be put in place to allow for all decisions to be reviewed by the existing Classification Review Board.
Now, we don’t want to be too harsh about the IIA’s Interpol filtering scheme as it is being implemented by Telstra and Optus. It is quite hard for a site to get on Interpol’s blacklist, with multiple agencies having to authorise additions, and there is a certain attraction around the idea that we’re only blocking the “worst of the worst” sites containing child pornography, instead of a much wider category of content. In addition, it doesn’t seem as if there have been many instances internationally where implementation of the list has caused problems.
However, we are mystified as to why the IIA, Telstra, Optus and the AFP are displaying such a lack of transparency in their implementation of the scheme. We are talking about a filtering scheme here which is being implemented behind closed doors, with little notification to customers, with no civilian oversight, an unclear legal framework, the potential for scope creep and a limited and secretive appeals process overseen by the agency which drew up the list to start with.
Come on, Australia. Is this the best we can do?
FCC Delivers Net-Neutrality Rules to OMB
The Federal Communications Commission delivered its net-neutrality rules to the Office of Management and Budget on Thursday, paving the way for the controversial regulations to become official pending OMB's approval.
The FCC published its estimate of the paperwork burden stemming from the rule in Thursday's Federal Register, triggering a 30-day comment period. Once that has run its course, and assuming OMB approves the rules, they will be published in the Federal Register and take effect 60 days later.
The rules prevent traditional Internet service providers from discriminating between two similar content providers by slowing down or speeding up access to their sites. Wireless carriers are banned from blocking lawful websites or applications that compete with their services.
The commission approved the rules last December in a partisan vote, fulfilling a key campaign pledge from President Obama. Republicans were quick to characterize the move as the FCC's attempt to regulate the Internet. Supporters argue without such rules, ISPs will dictate what content reaches users.
House Republicans voted to repeal the rules earlier this year but that attempt was doomed thanks to opposition from Senate Democrats and the White House. The leadership of the House Energy and Commerce Committee reiterated Thursday that the rules are a burden on industry and innovation.
“More than six months after it adopted an order to regulate the Internet, the FCC has finally submitted the rules to the Office of Management and Budget, which must still review and approve the submission," said Energy and Commerce chairman Fred Upton (R-Mich.) and Telecom subpanel Chairman Greg Walden (R-Ore.) in a statement.
"The FCC’s estimate of the paperwork burden has already tripled. One has to wonder whether the FCC will also finally admit it has grossly underestimated the burden on innovation, investment, and jobs," the lawmakers added.
Verizon has already attempted to challenge the net-neutrality regulations in court only to have their case dismissed as premature. Stakeholders expect a host of legal challenges to the rules, which some argue won't stand up to challenges the FCC has exceeded its authority under the Communications Act.
Netflix Criticizes New Internet Billing by Bits
Netflix said Friday that moves by Internet service providers to charge users by the amount of data they use could end up costing consumers more.
In an opinion piece in The Wall Street Journal, Netflix General Counsel David Hyman, wrote that new data tiers by ISPs such as AT&T, Comcast and Verizon don’t reflect how much it costs to actually increase bandwidth on networks.
The Internet service providers argue they have to switch from flat-rate monthly data fees to tiered, or usage-based pricing, models to pay for network upgrades and prevent consumers from congestion that would lead to sluggish Internet use.
But those upgrades aren’t that hard, nor that expensive, Netflix argued.
“Wireline bandwidth is an almost unlimited resource due to advances in Internet architecture,” Hyman writes.
Netflix has argued against usaged-based billing in Canada and has warned to the Federal Communications Commission that such practices could curb Internet use or leave consumers with confusing bills and penalties for going over their limits. It said that the usage-based billing model could also hurt companies such as Skype and Hulu (and itself) that are trying to compete against cable TV companies such as Comcast.
Hyman’s editorial is focused on wireline ISPs, but recent moves by Verizon Wireless to end flatrate mobile data plans draw attention to a new era of usage-based billing for Internet customers no matter how they access the Web.
Hyman said the cost of adding an extra gigabyte of data — the equivalent of watching one episode of “30 Rock” from a streaming video site — is about one penny for wireline providers.
Yet AT&T and other broadband wireline service providers are charging 20 times that amount, he said. Verizon Wireless on Thursday began to phase out its all-you-can-eat data plans for tiered packages, preparing for what it said is a deluge of traffic heading to its 4G networks.
The cable and telecom industries have argued that data caps by Comcast, AT&T, Verizon and others are high and that it will be hard to blow past limits. They also point to user measurement tools that inform consumers when they are nearing their monthly limits.
But as more people use the Internet to watch videos, demand for more data will follow, Netflix said.
Hyman said prices may be low now but could easily increase.
“With online-content delivery providers like Netflix and voice services like Skype experiencing explosive growth, competitors see consumption-based billing as a convenient way to slow that growth by making the use of online services more expensive.”
Netflix Launches a New $7.99 DVD-By-Mail Plan
While streaming is all the rage these days, Netflix hasn’t given up on DVDs entirely: The company has quietly launched a new page where users can sign up for an unlimited DVD-by-mail package that matches the $7.99 price of its unlimited streaming offering.
New users that go to dvd.netflix.com can sign up for an account and start a free trial of the DVD-only service. Once the month is over, users will be billed $7.99 a month into perpetuity — or until they cancel, whichever comes first.
The new plan is targeted at users that like its DVD-by-mail service but aren’t really interested — nor do they want to pay for — its streaming capabilities. Previously users could choose between paying $9.99 a month for unlimited streaming and one DVD out at a time, or they could pay $4.99 for a plan that enabled them to rent just two DVDs by mail a month.
Netflix has been fairly quiet about its DVD-by-mail service, de-emphasizing that part of the business as it pushes its streaming subscription plan. Last fall, Netflix CEO Reed Hastings announced on an earnings call that viewers watched more streaming video than DVD content for the first time, and much of the company’s investment has been focused on securing new streaming rights. That focus on streaming has paid off for the company: Netflix subscribers grew by 69 percent over the past year, with the company reporting 23.6 million subscribers at the end of the first quarter.
But that emphasis has also upset some of its oldest customers: those that originally signed up for its DVD-by-mail service but haven’t taken to the streaming service yet. The company faced a bit of a user uproar when it removed the “Add to DVD Queue” button from its user interface on connected devices, for instance. And a recent redesign of its website, meant to provide more instant access to streaming titles, also took away some functionality that DVD-by-mail users found useful.
The release of an unlimited DVD-only plan, as well as a website that emphasizes the DVD library and DVD queue, should help appease those users who have been frustrated by Netflix’s streaming focus. Netflix is letting those customers know that it still values them and the legacy part of its business.
Mail Your Hard Drive to Amazon
We have written before about a little-known facet of AWS, the ability to ship your physical hard drive off to that Big Cloud in Seattle and have them make a copy of all your precious data and put it in their cloud.
Up until now, your data had to reside on an S3 raw storage account, which made it harder to incorporate into a machine image on AWS. That has changed as of today, and your contents can be imported to AWS' Elastic Block Storage, which is a lot easier to manipulate in the AWS solar system. Once your drive is uploaded, you can create a volume based on the EBS snapshot and attach it to a VM, or share it with others.
The cost is reasonable: you pay $80 per drive, plus the time it takes them to make the copy. This avoids slow (or even reasonably fast) Internet connections, and Amazon will send you back their drive once they are done. A TB disk would cost about $120 as an example, and there is a pricing calculator so you can see what to expect.
Researchers Improve BitTorrent Download Speeds
Researchers from the Tribler project at Delft University of Technology are proposing a new set of rules that should significantly improve the download speeds of many BitTorrent users. The new “Superior Seeding Standard” implemented in the latest release of the Tribler BitTorrent client is inspired by the ratio-enforcement policies at private tracker communities, but doesn’t discriminate against people with low bandwidth connections.
Some scientists devote their lives to finding a cure for terminal illnesses, others hope to discover new planets in galaxies far away, but there’s also a group of scientists mostly concerned with improving BitTorrent. The Tribler team at Delft University of Technology are such a group, and they have found a way to improve download speeds for BitTorrent users who are committed to sharing.
Tribler’s BitTorrent client has been in development for more than 5 years and continues to deliver experimental improvements and innovative ideas. Last year Tribler became the first truly decentralized BitTorrent client that doesn’t rely on central trackers, or even BitTorrent search engines. But the researchers have more in store.
The latest innovation from the Tribler team is promising something all BitTorrent users are interested in – faster downloads. The researchers came up with what they call a Superior Seeding Standard, a set of rules that reward users who put the most effort into sharing. The new standard is an alternative to the current tit-for-tat algorithm and is inspired by the ratio-enforcement policies often seen at private BitTorrent trackers.
The researchers have carefully analyzed the effectiveness of private BitTorrent trackers and found that users achieve great speeds, but that the ratio requirements also discriminate against users who don’t have high-bandwidth connections.
The Tribler team proposes a new standard which rewards BitTorrent users independent of their connection limitations. Instead of looking at the share ratio alone, it uses the ‘seeding effort’ to reward BitTorrent users by giving them priority in the swarm and thus faster downloads. Again, all of the above works without a central server.
The Tribler team ran several experiments with their new Superior Seeding Standard and found that the download speeds for people who share fairly are greatly improved compared to current transfer speeds on public trackers. The initial results suggest that it is more fair to people who are good BitTorrent citizens than the classic tit-for-tat algorithm.
“One of the problems with tit-for-tat is that it provides no motivation for seeding the terabytes of long-tail content that’s out there on BitTorrent,” Tribler leader Dr. Pouwelse told TorrentFreak. “We believe that people should be rewarded with priority downloads when they are seeding these more obscure files, especially the stuff which only gets a few downloads a month.”
“The ‘seeding rewards’ concept has been in the making for several years. It always required a central server, but we finally made it work in a truly decentralized manner with robustness against cheating. We implemented a first version of this proposed ‘Superior Seeding Standard’ in the latest Tribler release, and we expect that it will be tweaked and optimized quite a bit in the years to come,” Dr. Pouwelse added. “
The full technical specifications and several performance tests are detailed by these scientists in the paper titled “Fast Download but Eternal Seeding: The Reward and Punishment of Sharing Ratio Enforcement,” which will be presented at the P2P 2011 conference later this year.
As is true for many of Tribler’s innovations, getting it adopted by other BitTorrent clients will prove to be a tricky endeavor. Those who install Tribler will nonetheless notice that the concept of an entirely decentralized and fast BitTorrent network is already reality. The next and final step is to make it anonymous, that would certainly justify the millions of euros in tax money that has gone into the Tribler project in the last few years.
RIAA Starts Going After BitTorrent Sites
For years BitTorrent sites have remained untouched by the RIAA’s legal battles, but recent court filings indicate that this may change. After settling their dispute with LimeWire earlier this year the RIAA is now targeting several BitTorrent indexers. The record industry group has filed a complaint at the U.S. District Court of Columbia and has obtained subpoenas to reveal the identities of individuals behind three large torrent sites.
Historically the RIAA’s litigation campaigns have focused mainly on individual file-sharers and P2P-software and services such as LimeWire.
Unlike their counterparts at the MPAA, BitTorrent sites have not been prime targets for the recording industry association’s lawyers. However, recent court filings obtained by TorrentFreak show that the RIAA might have just changed course.
The U.S. District Court for the District of Columbia has granted a request from the RIAA to subpoena the privacy protection services utilized by three large torrent sites. The site owners use these services to hide their personal details from otherwise publicly available WHOIS domain records, but the RIAA wants to know who they are dealing with.
The targeted sites are Monova.org, Bitsnoop.com and Limetorrents.com, which all have hundreds of thousands of daily visitors. According to the RIAA, these sites are infringing on the copyrights of many artists.
“We believe your service is hosting the above-referenced website on its network. This website offers direct links to files containing sound recordings for other users to download by such artists as Lady Gaga, Micheal Jackson, Coldplay, Madonna and Kanye West,” the RIAA writes in a letter to Whoisguard.com.
“As stated in the attached subpoena, you are required to disclose to the RIAA information sufficient to identify the infringer. This would include the individual’s IP-address and e-mail address,” the RIAA adds.
One of the torrent site operators targeted by the RIAA told TorrentFreak that the subpoena comes as a surprise. He always responded swiftly to RIAA’s DMCA requests while the court documents suggest that he hasn’t been cooperative at all.
“The RIAA has sent us several DMCA requests in the past and we always honored these,” Bitsnoop’s owner informed us. “Apparently that wasn’t enough, so now they pull this stunt.”
At this point it is unknown what the RIAA is planning to do once they obtain the personal information of the site’s owners. Although it could theoretically be the beginning of a full-fledged litigation campaign against the torrent sites, it seems more likely that the subpoenas will be used to pressure and threaten operators.
During the past year several music industry associations in Europe and Asia have sent requests to domain registrars with a similar objective. The ultimate goal is to make it harder for BitTorrent site operators to continue their business by putting pressure on them, and the companies that provide services to these sites.
A good example is the following sentence in the letter to Whoisguard.com, which goes far beyond the attached subpoena for information.
“We are asking for your immediate assistance in stopping this [linking to torrent files] unauthorized activity. Specifically, we request that you remove the infringing files from the system, or that you disable access to the infringing files, and that you inform the site operator of the illegality or his or her conduct.”
Whatever the true motivation of the RIAA is, with the recent news about domain seizures, extradition requests and these recent subpoenas, operating a BitTorrent site has become a stressful job. Whether this will have the desired outcome for the music industry group in the long run remains to be seen.
TorrentFreak asked the RIAA to comment on our finding but we have not received a response.
Jane Scott Is Dead at 92; Veteran Rock Music Critic
It was the singular combination of Kleenex, peanut butter, a shower cap and earplugs that let Jane Scott thrive in her chosen field for nearly 40 years.
Ms. Scott, who long before her retirement in 2002 was widely described as the world’s oldest rock critic, never went to a concert without these essentials. Peanut butter gave her strength for a long night ahead. The shower cap, for rain-swept outdoor events, let her keep her preternaturally blond pageboy dry.
The Kleenex was for the inevitable. (“One time, I was at a Bob Dylan, Tom Petty and Grateful Dead concert — phew, wasn’t that a strange combination? — and they ran out of lavatory paper,” she once told The Independent of London.) The earplugs came out when things, even by her accommodating standards, grew a wee bit too loud.
In four happy decades as a rock writer for The Cleveland Plain Dealer, Ms. Scott, who died on Monday at 92, braved mud and mosh pits, foul weather and fouler language, “a drop of bleached blond and pink polyester in a roiling sea of blue denim and black leather,” as The Philadelphia Inquirer once described her.
Her death, in Lakewood, Ohio, was of complications of Alzheimer’s disease, her lawyer, William Fulton, said. No immediate family members survive.
Ms. Scott, who took up her beat in 1964 at 45 and retired nine years ago at nearly 83, was often called the world’s oldest teenager, a description she hastened to correct. “Second-oldest,” she would say. “After Dick Clark.”
At a time when newspapers were famously inhospitable to women, Ms. Scott made her career by tackling a beat that few writers of either sex wanted — a beat that barely existed when she began writing about rock ’n’ roll in the mid-1960s.
Over the years, she interviewed many of the biggest names in pop music, including Paul McCartney (“such a nice boy,” she said afterward); Mick Jagger (“sweet and funny”); and Jim Morrison and Jimi Hendrix (“I loved them both”).
Ms. Scott adored much of the music she heard, and was overwhelmingly positive about it in print. This incurred criticism from some journalists but won the devotion of readers and many musicians.
She was also an astute handicapper. “He looked like a cross between a dockhand and a pirate,” she wrote in The Plain Dealer in 1975, reviewing a young musician. “He stood on the darkened Allen Theater stage last night in a black greaser jacket, blue jeans, a gray wool cap pulled over an eye and a gold earring in his left ear. ... His name is Bruce Springsteen. He will be the next superstar.”
In Cleveland, Ms. Scott could scarcely walk down the street without fans stopping to take her picture. But she was known far beyond the city, profiled in print, on radio and on television throughout the country and abroad.
This renown was a far cry from the days when she had to carry a homemade placard reading “Yes, I’m a reporter.” In the netherworld of rock-star dressing rooms, it was assumed that anyone as respectable-looking as she must be an undercover narcotics agent.
Jane Marie Scott was born in Cleveland on May 3, 1919. The first record she bought was Jimmy Rushing singing “Sent for You Yesterday,” which she played on her hand-cranked Victrola. (A Victrola is something like an iPod, only larger.)
After earning a bachelor’s degree from the University of Michigan, Ms. Scott was a Navy cryptographer during World War II.
In 1952, she joined The Plain Dealer and was assigned, typically for the time, to the society pages.
She found her lifework on Sept. 15, 1964, the day four lads from Liverpool came to Cleveland. No one at the paper was interested in covering the Beatles, and Ms. Scott volunteered.
That night, amid a sea of screams, Ms. Scott was transformed. “I realized this was a phenomenon,” she told The Plain Dealer in 2002. “The whole world changed.”
Ms. Scott was fazed by little she encountered in her new world, though the language sometimes gave her a turn. Among the worst offenders were the Beastie Boys, who favored a particular epithet in telephone conversations with her. “I think when you’re talking to someone old enough to be your mother,” she told The Washington Post in 2002, “you don’t have to use that on the phone, do you?”
But what troubled Ms. Scott far more was her inability to share her passion with her peers.
“I finally convinced a friend to come see Deep Purple with me,” she told The Post in the same interview. “I called her before the show to confirm, and she said, ‘Oh, Jane, I can still remember dancing with Ben at Beta Theta Pi fraternity, and we danced, “When the deep purple falls over sleepy garden walls.” ’ ”
“I thought: ‘Oh dear. I hate to tell you ...’ ” Ms. Scott continued. “I ended up taking her grandson.”
Cassettes Return for an Encore
It looked like the end of the reel for cassettes. The last car to ship with a tape deck was the 2010 Lexus SC 430. Sony stopped making the Walkman last October. This can mean only one thing: Cassettes are about to be cool again. Indeed, upstart labels like Crash Symbols, Volar, and Bathetic are putting out cassette-only releases. Indie rock favorite the Mountain Goats recently came out with a tape of rarities, and established noise-pop bands Joan of Arc and Of Montreal are also putting out their new albums on cassette. One of the tape revival’s leading evangelists is LA electronic musician and cassette label owner Matthewdavid, who helps host a monthly party called Top Tape: “A strictly all-tapes night gives people a chance to share music and found sound that they wouldn’t get anywhere else.”
The cassette underground even has its first star—Clive Tanaka y Su Orquesta is the nom de music of a mysterious multi-instrumentalist/producer who began sending his tapes to blogs last year. Bloggers loved the tracks enough to rip and post them. Now Tanaka, who has gotten raves from the Chicago Tribune, has a label deal, a publicist, and a flock of fans lobbying Coachella to add Tanaka to its 2012 lineup. Michael Kenny of Tall Corn Music, which released Tanaka’s album Jet Set Siempre No. 1, says besides appealing to ’80s mixtape nostalgia, cassettes “intrigue a younger generation who might see a piece of dead tech as a way to differentiate themselves.” Somebody better start teaching the kids how to wind tape with a pencil. They do still use pencils, right?
Album Sales Eke Out First Gain in Seven Years, Says Nielsen
Paying for music, which seemed so passe in the file-sharing era, may be making a comeback.
Music sales for the first half of this year rose 8.5% over the same period last year, according to a report by Nielsen SoundScan, which tracks unit sales. Album sales, in particular, eked out a 1% gain, the first increase in seven years. Here's a rough breakdown of the categories:
Digital Track Sales +11%
Digital Album Sales +19%
Vinyl Albums +41%
All albums (including digital and physical) +1%
Sales were fueled by Adele's "21" album, Lady Gaga's "Born This Way," and Mumford & Sons' "Sigh No More."
It's unclear if the increase in unit sales translated to a bump in dollar sales, which SoundScan does not track. Lady Gaga, for example, has sold 1.5 million copies of "Born This Way," but some of those were purchased for 99 cents from an Amazon.com promotion. The album normally sells for $7.99 for a digital download or $15.99 for a physical CD.
Still, the uptick in album sales, the first since 2004, is seen as progress for an industry that's struggling to find ways to get consumers to pay for music rather than download free, pirated copies from file-sharing services.
David Bakula, Nielsen's music analyst, said the increase in music sales likely came from multiple sources. Labels, for example, were more aggressive in pricing, packaging and promoting catalog albums via collections of oldies but goodies, contributing to a 7% increase in catalog albums sales.
Meanwhile, sales of digital tracks clocked a surprisingly strong 11% gain. Digital tracks posted an anemic 1.1% increase for all of 2010, leading some industry analysts to wonder if the category has run out of steam after a decade of double-digit gains.
"Digital overall has been much stronger than last year," Bakula said. "I don't think it's quite run out of steam yet."
For a more detailed analysis of the albums and genres that did well, check out the story on our sister blog, Pop & Hiss.
RIAA Accounting: How To Sell 1 Million Albums And Still Owe $500,000
Last year, we had a post on RIAA accounting, detailing how labels screw over many musicians, even some of the best selling ones, such that they never actually make a dime in royalties. Bas points us to an excellent 14 minute video from lawyer Martin Frascogna, entitled How To Sell 1 Million Albums and Owe $500,000:
It definitely covers a lot of the same ground (in fact, his advance numbers and sales numbers match up exactly with the numbers we quoted last time from Courtney Love), but it also delves into some of the sneakier aspects of record label contracts with musicians -- things that many musicians simply won't know about or understand when they sign their contract. Using those points, he breaks down how a band might think it's getting royalties on $20 million worth of sales but then find out that, thanks to some of these fun tricks, the basis for calculating the royalty takes that number all the way down to $4.9 million (and then with a 10% royalty, the official take is $490,000 -- but if the advance is $1 million... the band still technically "owes" $500,000).
And, as we noted in the post last year, don't think that because a band goes "unrecouped" that the label loses money on them. The "recouping" only comes from the 10% royalty rates, which are really much, much lower (in this example, the "real" royalty rate is more like 2.5% due to the clauses in the contract). That leaves 97.5% of the money in play. Obviously, some of that is covering costs and expenses. But there's plenty of cash that makes its way into the label's bank account, when an album sells $20 million.
As for what kinds of tricks the labels use, well, Frascogna notes "breakage fees" of 20%, which are based on breakage rates for vinyl from half a century ago. That CDs don't break so much and that digital files don't break at all, doesn't matter. The labels still try to get a super high breakage rate that they get to deduct. For them, it's pure profit. Then there are "uncollected account" withholdings, on the basis that some retailers go bankrupt and don't pay for the stock they had. The way it's described here, that's often just a set number, rather than based on any actual, documented cases of uncollected fees. Next up? "Free goods." Now, we talk about the importance of free goods all the time. But here it's used in a different manner. Basically the labels deduct the "cost" of providing reviewers/radio stations/etc. with "free" copies of your album. That money comes straight out of the gross that the royalty is calculated on. The fact that you could just email the mp3 to those folks yourself? Well, pay no attention to that newfangled technology.
Next up, there are "container charges." That's for things like the jewel cases and inserts for CDs. Again, the fact that digital music doesn't have such expenses is pretty much ignored. Also, the fact that all of these expenses get deducted from the artists' share? That also seems wrong. Even more insane? Apparently the standard "container charge" is an additional 30% off the revenue. Again, in many cases that's just pure profit for the labels.
Finally, there's the ever lovely and totally amorphous "reserves." As Frascogna notes: "no one really knows what reserves entail." It's basically a blank check for the record labels to claim they have to keep some of the money themselves for "other stuff," which is mostly undefined. In this case, some labels simply set a straight percentage, up to 20% more of the gross that artists never get to see as part of their own royalties.
Bring all that together, and the 10% royalty looks more like a 2.5% royalty, and that's not enough to even get halfway to recouping even if you sell 1 million albums at the high high price of $20/album. And that doesn't even touch on splitting up any money you get between band members and paying the manager/agent, etc. When you dig in to things like this, you can understand how artists like Lyle Lovett can say they've sold 4.6 million albums and never made a dime in royalties from album sales.
Now, many of these points can be negotiable if you're knowledgeable about them. But many artists sign such contracts without realizing what that fine print really means -- and that's just what a lot of the labels are counting on.
Holiday Box Office Sputters Domestically But Explodes Overseas
Hollywood’s Fourth of July fireworks were overseas.
The holiday period, a marquee sales time for movie studios, saw Julia Roberts and Tom Hanks bomb in the romantic comedy “Larry Crowne” and the third installment of the “Transformers” series fall notably short of its predecessor in North America. But the international box office continued to sizzle, with fans flocking to “Transformers: Dark of the Moon.” Between Tuesday night and Sunday, that Paramount Pictures movie sold an estimated $210 million in tickets overseas, a 51 percent increase over the same opening stretch for “Transformers: Revenge of the Fallen,” the franchise’s previous entry, in 2009.
Paramount said that tickets for 3-D shows, which carry a price premium, drove the strong overseas performance for “Dark of the Moon,” which set sales records in seven countries, including South Korea with an estimated $28 million. It was Paramount’s biggest international opening (in dollars unadjusted for inflation).
“To see this kind of gigantic international start is simply amazing,” said Rob Moore, Paramount’s vice chairman. Overseas sales for “Revenge of the Fallen,” which was not released in 3-D, totaled $434 million, and “Dark of the Moon” could sharply improve on that.
The film was shown at many Imax theaters abroad, and Imax, which broke its global sales records, was jubilant. “It’s out of control,” said Greg Foster, its chairman of filmed entertainment.
Still, North America was a muddy picture. “Dark of the Moon” took in about $162 million between Tuesday night and Sunday, compared with $200 million for “Revenge of the Fallen” during the comparable period, according to Hollywood.com, which compiles ticketing statistics. Monday sales for “Dark of the Moon” were estimated at $18.8 million, lifting its domestic total to $181 million.
Analysts attributed the shortfall — which came despite higher ticket prices — to several factors. Audiences in the United States have started to tire of 3-D. About 60 percent of the domestic total for “Dark of the Moon” came from 3-D screenings; the format made up about 70 percent of sales overseas.
Americans, still feeling the pinch of a weak economy, have been going to the movies less often. For the year, domestic ticket sales stand at $5.2 billion, an 8 percent decline from the same period in 2010; attendance is down 9.4 percent.
But confusion overload from “Revenge of the Fallen” and its hard-to-decipher plot was probably the biggest factor. “We needed to win the audience back by telling a better story,” Mr. Moore said.
The good news for Paramount, aside from the overseas total, involves audience reaction to “Dark of the Moon.” Exit polls show that moviegoers are more satisfied with the film than with its predecessor, which should lead to favorable word of mouth. Sales increased from Friday to Saturday, a sign of positive chatter among fans of the series.
“Dark of the Moon,” directed by Michael Bay, cost about $200 million to make and centers on robot aliens clashing over a hidden spacecraft. (The 3-D effects alone contributed about $30 million to the budget.) It was easily No. 1 at the North American box office for the weekend.
“Cars 2,” from Pixar Animation Studios, was second in its second weekend with about $25 million in sales (excluding Monday estimates) for a new total of $116 million. “Bad Teacher,” the raunchy Sony comedy starring Cameron Diaz, was third with about $14 million for a two-week total of $59.5 million.
Ms. Roberts and Mr. Hanks limped along in fourth place in “Larry Crowne,” distributed by Universal Pictures and taking in about $13 million. Vendome Pictures spent about $30 million to make it. The two stars have opened to lower results: “Charlie Wilson’s War” sold about $10 million in tickets during its first three days in 2007. But that was a drama released in winter, and analysts had higher expectations for the two in a summer comedy.
The disappointing returns could have been the result of negative reviews and a warm-and-fuzzy marketing campaign that made the film look like something akin to a movie of the week.
Mr. Hanks directed the film, which he wrote with Nia Vardalos (“My Big Fat Greek Wedding”). To help get the movie made he agreed to play the male lead. The story centers on a middle-aged man who goes back to college after losing his job and develops a crush on his teacher, played by Ms. Roberts.
“Monte Carlo,” an inexpensive comedic romance from 20th Century Fox starring Selena Gomez, was fifth, taking in about $7.6 million.
The coming weeks will be crucial for Hollywood’s hopes of ending its domestic box office slump. Aside from continued sales for “Dark of the Moon,” the industry is counting on a potential multiplex monster: Warner Brothers will release “Harry Potter and the Deathly Hallows: Part 2” in 3-D on July 15.
Congress Tries To Hide Massive Data Retention Law By Pretending It's An Anti-Child Porn Law
We all know the cynical and obnoxious trick by politicians to get questionable laws passed by claiming that it's "for the children." The latest, however, is particularly nefarious. Some politicians (and lots of folks in law enforcement) have been pushing for the US government to adopt data retention laws for years. These laws would require online service providers to keep all sorts of data about users for many months, just in case law enforcement wants to come knocking later to get the details. Of course, data retention is controversial. You know what's not controversial? Being against child porn. We're all against child porn... so, rather than calling your bill a data retention law, why not refer to it as the Protecting Children from Internet Pornographers Act of 2011. Yes, that's the bill put forth by Texas Congressional Rep. Lamar Smith, and co-sponsored by Reps. Bill Flores, Randy Forbes, Dutch Ruppersberger and Debbie Wasserman Schultz.
The bill actually has very little to do with stopping child pornographers, but a lot to do with requiring online service providers to retain certain information (mainly IP addresses) on users for 18 months. Of course, as Chris Soghoian points out, the bill exempts WiFi providers, so it's woefully ineffective at stopping child porn, since anyone who wanted to do that just needs to go to Starbucks.
But, for legitimate service providers, there are serious costs. On top of that, there are significant privacy issues -- and this is at the same time that we keep hearing about data leaks. You want to encourage more data leaks? Require companies hold onto data much longer than they need to do so. The really pernicious part in all of this is that it's really just a way for law enforcement to do an end run around the 4th Amendment. Julian Sanchez explains how this works:
Thanks to an unwise Supreme Court decision dating from the 70s, information about your private activites loses its Fourth Amendment protection when its held by a “third party” corporation, like a phone company or Internet provider. As many legal scholars have noted, however, this allows constitutional privacy safeguards to be circumvented via a clever two-step process. Step one: The government forces private businesses (ideally the kind a citizen in the modern world can’t easily avoid dealing with) to collect and store certain kinds of information about everyone—anyone might turn out to be a criminal, after all. No Fourth Amendment issue there, because it’s not the government gathering it! Step two: The government gets a subpoena or court order to obtain that information, quite possibly without your knowledge. No Fourth Amendment problem here either, according to the Supreme Court, because now they’re just getting a corporation’s business records, not your private records. It makes no difference that they’re only keeping those records because the government said they had to.
Current law already allows law enforcement to require retention of data about specific suspects—including e-mails and other information as well as IP addresses—to ensure that evidence isn’t erased while they build up enough evidence for a court order. But why spearfish when you can lower a dragnet? Blanket data requirements ensure easy access to a year-and-a-half snapshot of the online activities of millions of Americans—every one a potential criminal.
But, of course, if you complain about this or argue against the law, the title alone makes it sound like you're defending child pornography. How nice.
Prosecutors Demand Laptop Password in Violation of Fifth Amendment
EFF urges court to uphold privilege against self-incrimination
The Electronic Frontier Foundation (EFF) urged a federal court in Colorado today to block the government's attempt to force a woman to enter a password into an encrypted laptop, arguing in an amicus brief that it would violate her Fifth Amendment privilege against self-incrimination.
A defendant in this case, Ramona Fricosu, is accused of fraudulent real estate transactions. During the investigation, the government seized an encrypted laptop from the home she shares with her family, and then asked the court to compel Fricosu to type the password into the computer or turn over a decrypted version of her data. But EFF told the court today that the demand is contrary to the Constitution, forcing Fricosu to become a witness against herself.
"Decrypting the data on the laptop can be, in and of itself, a testimonial act -- revealing control over a computer and the files on it," said EFF Senior Staff Attorney Marcia Hofmann. "Ordering the defendant to enter an encryption password puts her in the situation the Fifth Amendment was designed to prevent: having to choose between incriminating herself, lying under oath, or risking contempt of court."
The government has offered Fricosu some limited immunity in this case, but has not given adequate guarantees that it won't use the information on the computer against her.
"Our computers now hold years of email with family and friends, Internet browsing histories, financial and medical information, and the ability to access our online services like Facebook. People are right to use passwords and encryption to safeguard this data, and they deserve the law's full protection against the use of it against them'" said EFF Staff Attorney Hanni Fakhoury. "This could be a very important case in applying Americans' Fifth Amendment rights in the digital age."
Florida TSA Employee Arrested for Alleged Thefts
A former Transportation Security Administration employee was charged with two counts of grand theft for allegedly stealing electronics from luggage, authorities in Florida said Thursday.
A Continental Airlines employee Monday caught Nelson Santiago-Serrano, 30, stealing an iPad from a suitcase in Fort Lauderdale-Hollywood International Airport, according to the Broward County Sheriff's Office.
Santiago-Serrano was released on a $4,000 bond Tuesday, the office said.
Over the past six months, Santiago-Serrano told authorities he stole $50,000 worth of computers, GPS devices and other electronics from luggage he screened, took pictures of them to post for sale online and sold the items often by the time his shift ended.
Santiago-Serrano worked for the TSA since January 2009, but no longer works with the agency. Detectives are trying to locate victims, but it is unlikely they will get their belongings back, said the sheriff's office.
Santiago-Serrano has no lawyer yet nor a scheduled court date appearance, according to the Broward County clerk of courts.
For The Moment, Visa And MasterCard Reopen Payments To WikiLeaks
Would-be WikiLeaks donors who’ve been waiting six months to make credit card contributions to their favorite secret-spilling group should seize the chance. In a move that may be a response to legal pressure from the group or may yet be a slip-up, Visa and MasterCard are again allowing payments to WikiLeaks through its Icelandic payment gateway DataCell.
Late last week, WikiLeaks and DataCell gave me a copy of a legal complaint the group had planned to file Thursday with the European Union Commission, accusing the card companies and their Danish payment processor Teller of abusing their market positions by cutting off WikiLeaks’ financial sources.
Neither Visa nor MasterCard has responded to that threat, and even now a Visa spokesperson merely tells me that the company is “looking into the situation.”
Update: The spokesperson now adds: “We have not reinstated Datacell and are looking into how transactions are being made.”
But in the meantime, Visa, MasterCard and American Express payments have all inexplicably opened to DataCell and WikiLeaks through another payment processor, according to DataCell.
“Today we have observed that an alternative payment processor that we have contracted with, has in fact opened the gateway for payments with Visa and Mastercard, and now also for American Express Card payments, which is an option we did not had before,” DataCell wrote in a statement on its website.
“We choose to interpret this, as that Visa and Mastercard has in fact given in to our demand that the payment services was reinstated. In other words DataCell is happy to report that we are now able again to process donations to Wikileaks (and that we in general are able to receive payments via international Credit cards for DataCell’s professional services).”
A reprieve in the financial embargo of Wikileaks couldn’t come at a better time: The group has been actively raising money, even auctioning seats at a lunch with founder Julian Assange and Slovenian philosopher Slavoj Zizek. Assange’s reported $1.7 million dollar book deal may also have hit a snag, leaving a large hole in the group’s budget.
But given that Visa declined to confirm that it’s purposefully reopened payments and MasterCard has yet to respond to my request for comment, I hesitate to declare the card companies’ blockade over. If this is indeed a window of sunshine in the financial clouds over WikiLeaks, it may be brief.
Anonymous Launches A WikiLeaks For Hackers: HackerLeaks
Despite countless WikiLeaks copycats popping up since the secret-spilling site first dumped its cache of State Department cables last year, the new generation of leaking sites has produced few WikiLeaks-sized scoops. So instead of waiting for insider whistleblowers, the hacker movement Anonymous hopes that a few outside intruders might start the leaks flowing.
Earlier this week members of the hacker collective, and specifically a sub-group known as the People’s Liberation Front, (PLF) launched two new leaking sites, LocalLeaks.tk (not to be confused with the similarly named Localeaks.com) and HackerLeaks.tk. Both hope to receive documents through an anonymous submissions channel, analyze them, and then distribute them to the press to get “maximum exposure and political impact.”
But while LocalLeaks aims to use WikiLeaks’ model of insider sources to expose corruption on the local scale, HackerLeaks openly invites data thieves to upload documents through its submission system, so that they can be analyzed and publicized. “You download it, we’ll disclose it for you,” the site’s homepage reads, listing potential booty such as “databases, exploits, security flaws, documents, and email spools.”
On Tuesday, according to one of the hackers involved who goes by the name Commander X, the leaking site got its first submission: a list of the personal details of Orlando officials including addresses, home values, incomes and other data. That “leak,” which Commander X says was submitted anonymously to HackerLeaks but was posted, confusingly, on LocalLeaks, comes as Anonymous has been engaged in what it calls “Operation Orlando.” Since early Tuesday hackers have been launching attacks on Orlando-based targets including OrlandoFloridaGuide.com and the websites of the Orlando Chamber of Commerce and Universal Studios in retaliation for arrests of Orlando workers for the non-profit Food Not Bombs who lacked permits.
“These are the folks that wrote and are enforcing a very brutal law against very poor people,” Commander X, who says he is serving as the current “editor in chief” of the two sites, wrote to me over instant message. ”They themselves appear to be very very rich, so we thought we would point that out.”
And why is a leaking site necessary for hackers, who have lately used sites like Pastebin to publish information on their own? Commander X argues that Anonymous and the PLF have already established connections to the media outlets that can help better expose important data, and that they hope to also provide “unique and enlightening analysis.”
“We just wanted to make our own offering, compete in the disclosure marketplace and maybe fill a unique role if we can,” writes Commander X. He argues that part of that unique role is that HackerLeaks will be legal, despite publishing hacked materials. “We don’t obtain this material. We merely publish it. This violates no sane law anywhere.”
That’s an argument that sounds much like the one used by WikiLeaks, which has also published hacked data including Sarah Palin’s stolen emails and East Anglia University’s hacked emails related to climate change.
But that legal stance may be a tough sell for Commander X. Although he refused to comment on whether he had engaged directly in illegal hacking, he describes himself as “field commander of a global cyber militia” and says that he has had some part in Anonymous operations that have involved attacks on Visa, MasterCard, and PayPal in retaliation for their severing ties with WikiLeaks, as well as attacks on the governments of Tunisia, Iran, and Egypt.
Commander X was also named by HBGary Federal chief executive Aaron Barr in a planned presentation that aimed to out Anonymous’ leaders. But Barr misidentified the Anonymous hacker, who tells me he is a “50ish” American, as Ben De Vries, the founder of a Facebook group called Global Strike 2011. Barr’s digging incited Anonymous to attack HBGary Federal, dumping thousands of its emails in February on a site called AnonLeaks, Anonymous’ first experimentation with a WikiLeaks-like interface. Barr resigned later that month. Commander X says he wasn’t involved in the HBGary hack.
Commander X’s subgroup of Anonymous isn’t the only one that’s getting into the leaking game. The last release from the hacker group LulzSec included half a gigabyte of data from AT&T that has been reported to have come from an insider source at the company.
As part of its ongoing campaign known as AntiSec, aimed at exposing corporate and government data and humiliating security firms, one Anonymous twitter feed suggested earlier this week that leakers contact the group over IRC to spill insider secrets: “If you are working for a corrupt government/company,” wrote one Anonymous twitterer, “Leak the data.”
Apple Store Artist Raided by Secret Service
Artist Kyle McDonald wanted to create something that captured people’s expressions as they stared at computers, a subject he’d explored through his own usage of the computer.
“I thought maybe we could see ourselves doing this we would think more about our computers and how we’re using them,” he told Mashable.
So the 25-year-old artist installed a program on computers in two New York Apple Store locations that would automatically take a photo every minute of whoever was standing in front of the computer. McDonald then uploaded the photos to his Tumblr blog, “People Staring at Computers,” made a video with the photographs, and set up “an exhibition” at the Apple stores to show what he had found.
Within days, the Secret Service, which investigates computer crimes, had raided McDonald’s house, seizing his two laptops, two flash drives and iPod.
What had McDonald done wrong?
McDonald protested that he had gotten the permission of a security guard to take photos in the stores, that he had asked several customers for permission to take their photos (though certainly not all of them), and that taking photos of people in a public place is mostly allowed anyway.
But a tweet by McDonald indicates the Secret Service raided his apartment for a different crime:
It seems slightly suspect that McDonald would be taken to task for breaking a law that normally applies to matters of national defense or finance fraud. McDonald, who has a master’s degree in electronic arts, says that while he understands that the project may make some people uncomfortable, he doesn’t believe he has broken any laws.
He’s currently consulting with the Electronic Frontier Foundation, a group that defends civil liberties online, about his rights. We’ll see what they have to say.
Abhaxas Dumps Details of the Internal Florida Voting Database Online
Election fraud and accusations of rigged voting might be as old as US election systems themselves, but some may wonder, if a hacker can gain access to the election voting system, how secure are elections anyway?
The AntiSec movement is definitely rolling along, but Anonymous is pointing to a recent hack that could raise some serious questions over the integrity of voting in Florida. It seems that a hacker who uses Twitter obtained parts of the Florida voting database which has been subsequently posted to Paste2. It appears that the hacker in question wanted to show that voting fraud can easily happen today and dumped parts of the Florida database to prove it. From the comments of the release:
“So, this is a little ironic. Here is inside details of florida voting systems. Now.. who still believes voting isn’t rigged? If the United States Government can’t even keep their ballot systems secure, why trust them at all? FAIL!”
The content was posted to PasteBin (same content) while Abhaxas tweeted, “Who believes voting isn’t tampered with?”
It’s the latest in a long string of hacks since LulzSec was disbanded. Previously, the Arizona Polce Force had details leak about them not not once, not twice, but three times. In another leak, the AntiSec movement leaked details of Viacom and Universal Music along with content from various government servers.
This latest hack clearly demonstrates that Anonymous isn’t the only organization that is doing the hacking these days. One thing is for sure though, it’s hard to imagine that this would not have very big political implications.
Abhaxas Hacks Florida’s Voting System Again
In an apparent effort to show that election votes can be tampered with, Abhaxas previously dumped parts of the Florida voting database to PasteBin. Officials since then downplayed the hack, but suggested that the systems are more secure than ever before. Even though authorities, on top of this, were contacted, it seems that Abhaxas decided to hack the database again.
Call it whatever you like, but it seems that Florida is in for a repeat of what happened last week.
Apparently, since the initial hack, Florida officials downplayed the incident saying that there is no reason to fear because of a paper trail and that only a select few are able to have access to the votes to begin with. There was also the following being reported on Storify:
“Glad you cleaned things up, pretty secure now guys.”
It really seems like this person is able to make a mockery of them at this point. If this data is real, then there isn’t much I can think of that could poke the bear more effectively than this.
Anonymous Hacker Group Hits Apple, Publishes Data
The Internet vigilante hacker group Anonymous claimed to have broken into an Apple Inc server and published a small number of usernames and passwords for one of the U.S. technology company's websites.
Anonymous said on Sunday via its account on microblogging site Twitter that Apple could be a target for hackers and released the data as part of its Anti Security, or "AntiSec," campaign.
"Not being so serious, but well ... Apple could be target, too. But don't worry, we are busy elsewhere," Anonymous said on its Twitter feed, where it shared a link to the data posted on text-sharing website Pastebin.
Anonymous said the data included 27 usernames and passwords for the www.abs.apple.com website.
The website, used by Apple for online surveys, on Monday displayed an error message that said the server was temporarily offline.
A spokesman for Apple declined to comment.
Anonymous teamed up with the Lulz Security group of hackers late in June. LulzSec, which gained wide recognition for breaching the websites of Sony Corp, the Central Intelligence Agency and a British police unit among other targets, said it had accomplished its mission to disrupt corporate and government bodies for entertainment.
Security experts who have researched LulzSec's origins say it emerged from Anonymous, which became famous for attacking companies and institutions that the group considered opponents of WikiLeaks and its founder, Julian Assange.
Anonymous earlier this month released scores of private e-mails and other data from an Arizona police website. LulzSec first released dozens of internal documents from the same Arizona police website in June.
(Reporting by Marius Bosch in Johannesburg and Poornima Gupta in San Francisco; Editing by Gary Crosse)
Hackers Expose Flaw in Apple iPad, iPhone Software
Hackers have disclosed a bug in software from Apple Inc that security experts said could be exploited by criminals looking to gain remote control over iPhones, iPads and iPod Touch devices.
The security flaw in Apple's iOS operating system came to light on Wednesday as the website www.jailbreakme.com released code that Apple customers can use to modify the iOS operating system through a process known as "jail breaking."
Some Apple customers choose to jail break their devices so they can download and run applications that are not approved by Apple or use iPhone phones on networks of carriers that are not approved by Apple.
Security experts warned that criminal hackers could download that code, reverse engineer it to identify a hole in iOS security and build a piece of malicious software within a few days.
"If you are a malicious attacker, it is fairly doable," said Patrik Runald, a senior researcher with the Internet security firm Websense.
Apple has yet to release an update to iOS that protects customers against malicious software that exploits the flaw.
Apple spokeswoman Trudy Muller said the company was aware of the problem.
"We are developing a fix that will be available to customers in an upcoming software update," Muller said.
Apple has long been vocal against jail breaking, which if done voids the warranty on its devices.
Any security flaw in iOS software -- which runs Apple's iPhone, iPad tablet and iPod Touch -- has the potential to affect millions of devices that are at the core of Apple's business.
Apple has sold 25 million iPads since it launched last year. The company sold over 18 million of its popular iPhones in just the first three months of the year.
Hackers can exploit the iOS vulnerability by creating a malicious PDF document file. It would infect Apple devices when users attempt to open that document, according to Runald.
Once the device is infected, hackers could "do anything they want," Runald said. That includes stealing passwords, documents and emails.
Comex, a 19-year-old hacker from New York State who developed the jail-breaking tool, said that Apple might be able to patch the software before criminal hackers develop software that exploits the bug.
Last time he put out a version of his jailbreaking software, Apple was able to issue a patch before anybody exploited the bug for malicious purposes.
He said that Apple might not be able to move quickly enough this time.
"It's not that hard to reverse engineer," he said via telephone.
(Reporting by Jim Finkle, additional reporting by Poornima Gupta; Editing by Bernard Orr)
DHS: Imported Consumer Tech Contains Hidden Hacker Attack Tools
A top Department of Homeland Security (DHS) official has admitted on the record that electronics sold in the U.S. are being preloaded with spyware, malware, and security-compromising components by unknown foreign parties. In testimony before the House Oversight and Government Reform Committee, acting deputy undersecretary of the DHS National Protection and Programs Directorate Greg Schaffer told Rep. Jason Chaffetz (R-UT) that both Homeland Security and the White House have been aware of the threat for quite some time.
When asked by Rep. Chaffetz whether Schaffer was aware of any foreign-manufactured software or hardware components that had been purposely embedded with security risks, the DHS representative stated that “I am aware of instances where that has happened,” after some hesitation.
This supply chain security issue essentially means that, somewhere along the line, technology being marketed in the United States was either compromised or purposely designed to enable cyberattacks.
Schaffer, who has an extensive background in cybersecurity and communications infrastructure management, did not elaborate on the compromised tech that DHS has encountered. However, he did emphasize that foreign components are found in many American-manufactured devices.
As a matter of sheer speculation, it is not hard to imagine computers, portable devices, and components marketed in the United States being purposely infected with malware, spyware, or other forms of security-compromising software by request of either foreign companies or foreign governments. More worryingly, the hearing specifically mentioned hardware components as possibly being compromised--which raises the questions of whether, perhaps, something as innocuous as Flash memory or embedded RFID chips could be used by interested foreign parties.
During questioning, Schaffer said that a whole-of-government effort would be required to combat security holes caused by malware and spyware making their way through America's electronics supply chain.
Rep. Darrell Issa (R-CA) also specifically asked witnesses about the risk of electronics being sold stateside being purposely designed for cyberattacks. In his words, “software infrastructure, hardware, [and] other things are built overseas that come to the United States with items that are embedded already in them by the time they get here to the United States.”
Buried in the White House's Cyberspace Policy Review is a small acknowledgment that the Executive Branch knows something weird is happening in imported tech:
Judging from the White House's statement, most of these strategic security compromises have been found in counterfeit and gray-market electronic products.
Schaffer was testifying before committee to discuss a White House policy proposal that offer incentives for private companies to share information with the federal government. The proposal also calls for modifying the Federal Information Security Management Act. Other witnesses included Associate Deputy Attorney General James A. Baker, DoD Deputy Assistant Secretary of Defense for Cyber Policy Robert J. Butler, and Senior Internet Policy Advisor to the National Institute of Standards and Technology Ari Schwartz.
Supply chain security is a growing worry for both the federal government and business. According to White House documents, the executive branch is actively studying the risk of nation-states purposely installing sleeper, one-use attack tools in software and hardware components marketed in the U.S.
Missing Milly Dowler's Voicemail was Hacked by News of the World
Nick Davies and Amelia Hill
The News of the World illegally targeted the missing schoolgirl Milly Dowler and her family in March 2002, interfering with police inquiries into her disappearance, an investigation by the Guardian has established.
Scotland Yard is investigating the episode, which is likely to put new pressure on the then editor of the paper, Rebekah Brooks, now Rupert Murdoch's chief executive in the UK; and the then deputy editor, Andy Coulson, who resigned in January as the prime minister's media adviser.
The Dowlers' family lawyer, Mark Lewis, this afternoon issued a statement describing the News of the World's activities as "heinous" and "despicable". He said this afternoon the Dowler family was now pursuing a damages claim against the News of the World.
Milly Dowler disappeared at the age of 13 on her way home in Walton-on-Thames, Surrey, on 21 March 2002.
Detectives from Scotland Yard's new inquiry into the phone hacking, Operation Weeting, are believed to have found evidence of the targeting of the Dowlers in a collection of 11,000 pages of notes kept by Glenn Mulcaire, the private investigator jailed for phone hacking on behalf of the News of the World.
In the last four weeks the Met officers have approached Surrey police and taken formal statements from some of those involved in the original inquiry, who were concerned about how News of the World journalists intercepted – and deleted – the voicemail messages of Milly Dowler.
The messages were deleted by journalists in the first few days after Milly's disappearance in order to free up space for more messages. As a result friends and relatives of Milly concluded wrongly that she might still be alive. Police feared evidence may have been destroyed.
The Guardian investigation has shown that, within a very short time of Milly vanishing, News of the World journalists reacted by engaging in what was standard practice in their newsroom: they hired private investigators to get them a story.
Their first step was simple, albeit illegal. Paperwork seen by the Guardian reveals that they paid a Hampshire private investigator, Steve Whittamore, to obtain home addresses and, where necessary, ex-directory phone numbers for any families called Dowler in the Walton area. The three addresses Whittamore found could be obtained lawfully on the electoral register. The two ex-directory numbers, however, were "blagged" illegally from British Telecom's confidential records by one of Whittamore's associates, John Gunning, who works from a base in Wiltshire. One of the ex-directory numbers was attributed by Whittamore to Milly's family home.
Then, with the help of its own full-time private investigator, Glenn Mulcaire, the News of the World started illegally intercepting mobile phone messages. Scotland Yard is now investigating evidence that the paper hacked directly into the voicemail of the missing girl's own phone. As her friends and parents called and left messages imploring Milly to get in touch with them, the News of the World was listening and recording their every private word.
But the journalists at the News of the World then encountered a problem. Milly's voicemail box filled up and would accept no more messages. Apparently thirsty for more information from more voicemails, the paper intervened – and deleted the messages that had been left in the first few days after her disappearance. According to one source, this had a devastating effect: when her friends and family called again and discovered that her voicemail had been cleared, they concluded that this must have been done by Milly herself and, therefore, that she must still be alive. But she was not. The interference created false hope and extra agony for those who were misled by it.
The Dowler family then granted an exclusive interview to the News of the World in which they talked about their hope, quite unaware that it had been falsely kindled by the newspaper's own intervention. Sally Dowler told the paper: "If Milly walked through the door, I don't think we'd be able to speak. We'd just weep tears of joy and give her a great big hug."
The deletion of the messages also caused difficulties for the police by confusing the picture when they had few leads to pursue. It also potentially destroyed valuable evidence.
According to one senior source familiar with the Surrey police investigation: "It can happen with abduction murders that the perpetrator will leave messages, asking the missing person to get in touch, as part of their efforts at concealment. We need those messages as evidence. Anybody who destroys that evidence is seriously interfering with the course of a police investigation."
The paper made little effort to conceal the hacking from its readers. On 14 April 2002 it published a story about a woman allegedly pretending to be Milly Dowler who had applied for a job with a recruitment agency: "It is thought the hoaxer even gave the agency Milly's real mobile number … the agency used the number to contact Milly when a job vacancy arose and left a message on her voicemail … it was on March 27, six days after Milly went missing, that the employment agency appears to have phoned her mobile."
The newspaper also made no effort to conceal its activity from Surrey police. After it had hacked the message from the recruitment agency on Milly's phone, the paper informed police about it.
It was Surrey detectives who established that the call was not intended for Milly Dowler. At the time, Surrey police suspected that phones belonging to detectives and to Milly's parents also were being targeted.
One of those who was involved in the original inquiry said: "We'd arrange landline calls. We didn't trust our mobiles."
However, they took no action against the News of the World, partly because their main focus was to find the missing schoolgirl and partly because this was only one example of tabloid misbehaviour. As one source close to the inquiry put it: "There was a hell of a lot of dirty stuff going on." Two earlier Yard inquiries had failed to investigate the relevant notes in Mulcaire's logs.
In a statement, the family's lawyer said the Dowlers were distressed at the revelation. "It is distress heaped upon tragedy to learn that the News of the World had no humanity at such a terrible time. The fact that they were prepared to act in such a heinous way that could have jeopardised the police investigation and give them false hope is despicable," Lewis said.
The News of the World's investigation was part of a long campaign against paedophiles championed by the then editor, Rebekah Brooks. The Labour MP Tom Watson last week told the House of Commons that four months after Milly Dowler's disappearance the News of the World had targeted one of the parents of the two 10-year-old Soham girls, Jessica Chapman and Holly Wells, who were abducted and murdered on 4 August 2002.
The behaviour of tabloid newspapers became an issue in the trial of Levi Bellfield, who last month was jailed for life for murdering Milly. A second charge, that he had attempted to abduct another Surrey schoolgirl, Rachel Cowles, had to be left on file after premature publicity by tabloids was held to have made it impossible for the jury to reach a fair verdict. The tabloids, however, focused their anger on Bellfield's defence lawyer, complaining that the questioning had caused unnecessary pain to Milly Dowler's parents.
Surrey police referred all questions on the subject to Scotland Yard, who said they could not discuss it.
The News of the World's parent company News International, part of Murdoch's media empire, said: "We have been co-operating fully with Operation Weeting since our voluntary disclosure in January restarted the investigation into illegal voicemail interception. This particular case is clearly a development of great concern and we will be conducting our own inquiry as a result. We will obviously co-operate fully with any police request on this should we be asked."
News International's Rebekah Brooks 'Won't Resign'
Rebekah Brooks is not planning to resign as chief executive of Rupert Murdoch's UK operations, I have learned - even though the voicemails of Milly Dowler's mobile phone were allegedly intercepted at the instigation of the News of the World when she was editor of the Sunday tabloid in 2002.
Later today she is expected to tell staff at News International, the UK arm of Mr Murdoch's News Corporation, that she is deeply shocked by the allegations, which News International has been working through the night to substantiate.
However she insists that she was not involved in that instance of alleged phone hacking, or others, and knew nothing about it.
Ms Brooks has spoken to Rupert Murdoch, and is under no pressure from him to stand down.
"He is backing her 100%", said a News International executive - who insisted that it was only under her tenure as News International's chief executive that the company had resolved to uncover what had gone wrong in the past and to deliver all relevant documents and information to the police.
She remains in charge of the process of assisting the police in their enquiries, known as Operation Weeting, to determine whether criminal charges should be brought against those journalists implicated in hacking mobile phones and other invasions of individuals' right to privacy.
"She is committed to find out the truth of what happened here and leading the company through this difficult time" said one of her colleagues.
"Her job is to see this through".
Executives from News International are meeting the police at 9.30 this morning, for what they say is the 50th or so meeting with officers since they began their enquiries.
Update, 09:24: The prime minister has this morning made these comments about the allegations that the News of the World hacked into Milly Dowler's voicemails in 2002:
"On the question of the really appalling allegations about the telephone of Milly Dowler, if they are true, this is a truly dreadful act and a truly dreadful situation. What I have read in the papers is quite, quite shocking, that someone could do this actually knowing that the police were trying to find this person and trying to find out what had happened, and we all now know the tragedy that took place."
Andy Coulson Mr Coulson stepped down as editor of the Sunday tabloid in 2007
There is of course an uncomfortable feedback loop from the latest disclosures of alleged hacking to the prime minister - in that the deputy editor of the News of the World in 2002 was Andy Coulson, who became editor of the News of the World in 2003, and who also served as Mr Cameron's communications director until he resigned in January.
Mr Coulson will now be pressed to disclose whether he was aware of the alleged interception and deletion of voicemail messages left on Milly Dowler's phone.
Some will say that he and Rebekah Brooks are damned if they did know and damned if they didn't - in that as the most senior editors of the News of the World, they should have made enquiries about how sensitive information was obtained.
What Steve Hewlett pointed out this morning on the Today programme is that there is an important difference between Mr Coulson and Ms Brooks, which is that he resigned from News International all those years ago after the original revelations about how a private detective, Glen Mulcaire, used illicit techniques to obtain private information about prominent individuals.
Ms Brooks is impregnable in her position, while she has the full backing of Mr Murdoch - who has asked her to steer News International through this crisis.
What is important in this context is that News Corporation, owner of News International, is no ordinary public company - in that (to state the blindingly obvious) Mr Murdoch wields considerably more power within the organisation than is typical of a public-company boss.
And, as colleagues of them both have told me over many months, Mr Murdoch and Ms Brooks have a remarkable and close working relationship. "In some ways I would say she is as close to him as his children" said one.
Update, 12:25: Rebekah Brooks has confirmed she is not stepping down as chief executive of News International.
In a statement to News International staff she said: "I am sickened that these events are alleged to have happened. Not just because I was Editor of the News of the World at the time, but if the accusations are true, the devastating effect on Milly Dowlers family is unforgivable."
Milly Dowler Milly Dowler's family will pursue a claim for damages against the News of the World
She added: "It is almost too horrific to believe that a professional journalist or even a freelance inquiry agent working on behalf of a member of the News of the World staff could behave in this way.
"If the allegations are proved to be true then I can promise the strongest possible action will be taken as this company will not tolerate such disgraceful behaviour.
"I hope that you all realise it is inconceivable that I knew or worse, sanctioned these appalling allegations."
She disclosed that she has written to the family of Milly Dowler, pledging to vigorously investigate the allegations that the News of the World hacked into the murdered teenager's mobile phone - and to communicate the results of the investigation to them before anyone else.
Its executives tell me they are not contesting the basic facts, as set out in yesterday's online story in the Guardian.
"We are working on the assumption that it is basically true", said one. "We have learned a good deal more about this from our own enquiries overnight."
Ms Brooks added: "It is important you all know that as Chief Executive, I am determined to lead the company to ensure we do the right thing and resolve these serious issues. We will face up to the mistakes and wrongdoing of the past and we will do our utmost to see that justice is done and those culpable will be punished."
Murdoch Stuns Critics, Shuts Down Scandal-Hit Paper
Kate Holton and Georgina Prodhan
In a breathtaking response to a scandal engulfing his media empire, Rupert Murdoch moved on Thursday to close down the News of the World, Britain's biggest selling Sunday newspaper.
As allegations multiplied that its journalists hacked the voicemails of thousands of people, from child murder victims to the families of Britain's war dead, the tabloid had hemorrhaged advertising, alienated millions of readers and posed a growing threat to Murdoch's hopes of buying broadcaster BSkyB.
Yet no one, least of all the 168-year-old paper's 200 staff, was prepared for the drama of a single sentence that will surely go down as one of the most startling turns in the 80-year-old Australian-born press baron's long and controversial career.
"News International today announces that this Sunday, 10 July 2011, will be the last issue of the News of the World," read the preamble to a statement from Murdoch's son James, who chairs the British newspaper arm of News Corp.
It seemed a bold gamble, sacrificing a historic title that is suffering from the long-term decline of print newspapers to stave off a threat to plans to expand in television -- "Talk about a nuclear option," said a "gobsmacked" Steven Barnett, professor of communications at Westminster University.
But some analysts said Murdoch would still face pressure to remove his close confidante and top British newspaper executive Rebekah Brooks, a friend of Prime Minister David Cameron. Her editorship of the News of the World a decade ago is at the heart of some of the gravest accusations.
Praising a fine muck-raking tradition at the paper, which his father bought in 1969, James Murdoch wrote in a statement to stunned staff that the explosion of a long-running scandal over phone hacking by journalists had made the paper unviable:
"The good things the News of the World does ... have been sullied by behavior that was wrong. Indeed, if recent allegations are true, it was inhuman and has no place in our company. The News of the World is in the business of holding others to account. But it failed when it came to itself."
It was unclear whether the company would produce a replacement title for the lucrative Sunday market, in which, despite difficult times for newspaper circulations, the News of the World is still selling 2.6 million copies a week.
One option, analysts said, might be for its daily sister paper the Sun to extend its coverage to a seventh day.
Stephen Adams, a fund manager at Aegon asset management, which is one of the biggest shareholders in BSkyB, told Reuters:
"We see it as something to restore or remedy a tarnished reputation for the News Corp group. But we also critically see it as a reflection of News Corp's desire to progress the BSkyB bid and have full ownership of the company."
Cameron's government had already given an informal blessing to the takeover, despite criticism on the left that it gave Murdoch too much media power. But the storm of outrage at the News of the World had turned attention on Cameron's own links to the paper -- he made another former editor his spokesman -- and so had fostered concerns among investors that there could be snags in securing final approval for the $14-billion bid.
In his statement, James Murdoch said: "This Sunday will be the last issue of the News of the World.
"In addition, I have decided that all of the News of the World's revenue this weekend will go to good causes ... We will run no commercial advertisements this weekend."
Journalists said that an emotional editor Colin Myler had read out the announcement at the east London newsroom where Murdoch changed the face of British journalism in the 1980s by breaking the power of the printing unions.
Myler, journalists said, had asked Brooks to leave the room, adding that many were angry that some 200 people were losing jobs in what they saw as a move to shield the former editor.
James Murdoch made clear Brooks remained in place as chief executive, telling Sky News he was satisfied that Brooks knew nothing of the crimes allegedly committed when he was editor.
One employee of the doomed paper told Reuters: "We didn't expect it at all. We had no indication. The last week has been tough. None of us have done anything wrong. We thought we were going to weather the storm."
One source at News International said the decision had been taken and acted upon with little delay.
The journalists' trade union said it was Brooks, not they, who should be fired: "It is the people at the top who need to be punished, not ordinary working journalists," the union said.
The leader of the opposition Labor party Ed Miliband also said Brooks should go. "What I'm interested in is not closing down newspapers, I'm interested in those who were responsible being brought to justice and those who have responsibility for the running of that newspaper taking their responsibility and I don't think those two things have happened today."
Ian Hargreaves of the Cardiff School of Journalism called closing the paper "an astonishing and unprecedented act": "It is appropriate to the moral horror that the owners of the newspaper faced but...killing the paper does not kill the story."
Tom Watson, a Labour member of parliament who had campaigned for a reckoning from the paper over the phone hacking scandal, said: "This is a victory for decent people up and down the land.
"I say good riddance to the News of the World."
The scandal had deepened on Thursday with claims News of the World hacked the phones of relatives of British soldiers killed in action in Iraq and Afghanistan. Britain's military veterans' association broke off a joint lobbying campaign with the paper and said it might join major brands in pulling its advertising.
The British Legion said it could not campaign with the News of the World on behalf of the families of soldiers "while it stands accused of preying on these same families in the lowest depths of their misery."
Signaling how far the racy, flag-waving title has alienated a core readership already horrified by suggestions its reporters accessed the voicemails not only of celebrities and politicians, but also of missing children and crime victims, an online boycott petition garnered hundreds of thousands of signatures.
News Corp wants to buy out the 61 percent of BSkyB it does not already own. The government has said the News of the World case should not affect that. But U.S. shares in News Corp fell over 5 percent on Wednesday, though they recovered somewhat in a stronger general market on Thursday.
Formal approval for the deal had been expected within weeks after the government gave its blessing in principle. But it now seems unlikely for months, although officials denied suggestions that they were delaying a decision because of the scandal.
"The Secretary of State has always been clear that he will take as long as is needed to reach a decision. There is no 'delay' since there has been no set timetable for a further announcement," a government spokesman said. Some British media reported that a decision was now expected in September.
The main accusations are that journalists, or their hired investigators, took advantage of often limited security on mobile phone voicemail boxes to listen in to messages left for celebrities, politicians or people involved in major stories.
Disclosure that the practice involved victims of crime came when police said a private detective working for the News of the World in 2002 hacked into messages left on the phone of murdered schoolgirl Milly Dowler while police were still looking for her.
Police have also been criticized over allegations officers took money from the News of the World for information. London's Evening Standard newspaper said on Thursday that police officers took more than 100,000 pounds ($160,000) in payments from senior journalists and executives at the paper.
Analysts believe the global Murdoch empire, which includes Fox television and the Wall Street Journal, can weather a storm of reproach from advertisers, readers and politicians in Britain -- though there were signs of international ramifications.
In Murdoch's native Australia, the leader of the Greens party said he wants the government to examine the ramifications on Australia of the phone hacking scandal.
(Writing by Alastair Macdonald)
Move to Close Newspaper Is Greeted With Suspicion
Jennifer Preston and Jeremy W. Peters
The News Corporation’s decision to shut down the British tabloid The News of the World on Thursday did little to silence the growing uproar over revelations that the newspaper had hacked into the voice mails of private citizens.
In fact, it may have only fueled the outrage.
An outpouring of suspicion and condemnation came from all directions on Thursday, and was directed chiefly at the News Corporation’s chairman, Rupert Murdoch, a figure as powerful as he is polarizing.
The British media establishment, Facebook and Twitter users and even Mr. Murdoch’s own employees questioned his move. Some said it was a ploy to salvage government approval of the News Corporation’s potentially lucrative controlling stake in the satellite company British Sky Broadcasting, or BSkyB. Others saw it as merely a rebranding.
There are already indications that The News of the World may be reconstituted in some form. People with ties to the company said Thursday that the News Corporation had for some time been examining whether to start a Sunday edition for its other British tabloid, The Sun.
The demise of The News of the World, which publishes only on Sundays, would seem to create the opportunity for that, these people said, speaking anonymously because they were not authorized to discuss the matter publicly.
Mr. Murdoch’s News International is the largest national newspaper publisher in Britain, a status that affords him tremendous economic and political influence. In addition to publishing The News of the World and The Sun, News International owns The Times of London, a smaller but more prestigious paper.
The News of the World has a circulation of 2.7 million, a size that gives News International scale with advertisers and a dominance in the market that analysts say Mr. Murdoch is unlikely to want to see diminished.
“Their significant share of the newspaper market is a very important part of their power base in this country — it is essential to their force and clout,” said Claire Enders of Enders Analysis, a media research firm.
The News Corporation is unlikely to walk away from that much power, Ms. Enders added, and it would be wise to examine whether to start a publication similar to The News of the World under a different brand. Not to do so, she said, “would be a very severe business issue in terms of the existing economics of their newspapers, their revenues.”
But others questioned whether The News of the World’s success could be replicated so easily.
“I think they would be very hard pressed to get the Sunday Sun circulation to that level,” said George Brock, head of journalism at City University in London.
A Sunday Sun, he said, “is not likely to be a complete offset.”
Closing The News of the World is likely to benefit the News Corporation in one major way, Mr. Brock noted: It could help tame any threat to the company’s pending purchase of BSkyB.
The News Corporation is also dealing with a flight of advertisers, something that users of social media hoped they could accelerate by creating an online campaign to encourage a boycott of the company.
One Twitter user, Paul Friend, generated a Google document with e-mail addresses of the chief executives of the companies that advertise in the paper. The document was used by hundreds of people who then sent e-mails to executives with their complaints.
By Thursday morning, more than 20 companies said that they would be suspending or re-evaluating their advertising spending with The News of the World.
As the scandal widened this week, social media became an important vehicle for people to voice their discontent.
“The goal was not to shut down the paper,” said Melissa Harrison, a freelance magazine editor whose efforts on Twitter on Monday helped prompt thousands of people to demand that companies withdraw advertising dollars from The News of the World.
“No one wants people to lose their jobs,” Ms. Harrison said. “I think our goal was to voice public outrage. What really happened is that people have found that they have a voice. And News Corp. heard that people have a voice.”
“There is quite a lot of cynicism about what is really happening here,” she said. “It is looking like The Sun will go seven days a week and that everything stays the same.”
Ms. Harrison and a growing chorus of users on Facebook and Twitter are demanding a full accounting of the allegations that executives from The News of the World paid police officers, lied to members of Parliament and hired investigators to listen to voice mail messages left on the cellphones of a murdered girl and the victims of terrorist attacks.
“The idea that he can close the paper and it will all be forgotten is not going to work,” she said. “What we wanted was someone taking responsibility for this behavior, which means a criminal investigation.”
David Babbs, executive director of 38 Degrees, a grass-roots online advocacy group, said that more than 110,000 signatures had been gathered in recent days demanding a full inquiry and that they would be presented to government officials on Friday as a British regulatory agency formally ended its public comment period on the BSkyB deal.
The group is demanding that the government decline Mr. Murdoch’s request for a controlling stake in the satellite company.
“This latest scandal has generated such an outpouring of disgust because it reflects the sheer scale of power that the Murdoch presses have over us, not just our media but our democratic process,” Mr. Babbs said. “The phone hacking is disgusting and disgraceful, but it also reflects the broader way that he has hacked our democratic process.”
The outrage was not limited to people who see Mr. Murdoch as a political threat. Even people on his payroll objected. Employees of The Sun walked out in protest on Thursday evening.
Hackers Commandeer a Fox News Twitter Account
Liz Robbins and Brian Stelter
A series of alarming Twitter posts about President Obama appeared on Fox News’s Twitter account for political news early Monday morning, and the Web site for the cable television network said it was a victim of hacking.
The six messages created a flurry of attention overnight.
The Twitter account, @foxnewspolitics, one of many operated by Fox News, claimed that the president had been fatally shot while campaigning in Iowa, but gave no source for the news. On Monday morning, FoxNews.com first posted a brief statement saying that the reports were incorrect, and that it regretted “any distress the false Tweets may have created.”
The six messages were removed around noon on Monday, about 10 hours after being posted, but not before attracting a flurry of attention.
Because of the seriousness of the content, senior Secret Service officials held a conference call Monday morning to discuss the posts, said a law enforcement official who requested anonymity because of the investigation into the matter.
A spokesman for the Secret Service, George Ogilvie, said, “We are investigating the matter and will be conducting appropriate follow-up.” The White House declined to comment.
In a statement Monday afternoon, Twitter indicated that its own servers had not been broken into; instead, the e-mail account associated with the specific Twitter feed had been compromised, and from there the hacker or hackers had been able to gain access.
Twitter referred other questions about the incident to Fox News; a spokeswoman there did not immediately respond to a request for comment.
The FoxNews.com Twitter account for political news, which has about 36,000 followers, had been dormant since Friday, but at about 2 a.m. Monday, a message was posted there that eerily presaged the posts that would follow about the president: “just regained full access to our Twitter and email. Happy 4th.” The next post said that the president “has just passed. The President is dead. A sad 4th of July indeed.”
The next one said he had been “shot twice in the lower pelvic area and in the neck; shooter unknown,” and offered the disturbing detail that he “bled out.” The next post said that the president had been shot at Ross’s restaurant in Iowa.
The last message stated: “We wish @joebiden the best of luck as our new President of the United States. In such a time of madness, there’s light at the end of tunnel.”
Mr. Obama had been spending the weekend with his family at Camp David, and returned to the White House on Sunday, according to the official schedule.
FoxNews.com posted a short statement early Monday explaining what had happened: “Hackers sent out several malicious and false Tweets claiming that President Obama had been assassinated. Those reports are incorrect, of course, and the president is spending the July 4 holiday with his family. The hacking is being investigated, and FoxNews.com regrets any distress the false Tweets may have created.”
Twitter accounts are hacked from time to time, but Monday’s incident attracted national attention because an assassination had been mentioned and a major news organization had been affected. Increasingly, news organizations like Fox News have embraced Twitter as a means of promotion and interaction with readers.
The false Twitter posts about Mr. Obama seemed even more provocative because Fox News is widely perceived to be a voice of opposition to the Obama administration. On Monday, thousands of people on Twitter poked fun at the incident and at Fox News by pretending to guess Fox’s Twitter passwords.
A spokeswoman for Twitter, Carolyn Penner, would not address why the posts to the Fox News political account on Twitter stayed up so long, nor would she address reports about who was responsible.
A group calling itself the Script Kiddies claimed responsibility for hacking the Fox News Twitter account, according to Adam Peck, the outgoing editor of Think, an online student magazine operated at Stony Brook University on Long Island, who said he had communicated via instant message early Monday with a member of the group.
The Script Kiddies, Mr. Peck said, had posted to its own Twitter account that it hacked the political Twitter account of Fox News and wanted to speak to The Huffington Post, supplying an address at the instant-messaging service AIM. Mr. Peck, 23, said he figured he would try the address as well.
The first conversation took place around 12:38 a.m., Mr. Peck said, before the inflammatory posts to Twitter appeared. “We did ask them what their purpose was,” Mr. Peck said. “They said that they did align themselves with Anonymous and the antisec movement,” he added, meaning “antisecurity movement,” or hacking efforts intended to uncover information corporations or governments are trying to hide.
In the instant message, the person claiming to be a representative of the Script Kiddies said to Mr. Peck that there “will always be a group of people that need to stand up for everyone else and attempt to keep the governments in balance with its people.” The person claimed to be a former member of the better-known hacker group Anonymous.
According to the instant-message record, which Mr. Peck provided to The New York Times, the person with whom he communicated at Script Kiddies said that Fox News “was selected because we figured their security would be just as much of a joke as their reporting.”
Mr. Peck said he again contacted to the Script Kiddies when the first postings about the president were published, asking if the group had hacked the Twitter feed.
Mr. Peck said he received a message in response: “I cannot confirm that at this time. Stay tuned.”
Adding to the confusion, the Twitter account for the Script Kiddies at some point seemed to disappear, Mr. Peck said. He said he started “frantically searching elsewhere to find corroboration of this story.” But after 10 minutes of not finding it anywhere online, he said he figured it was the work of the Script Kiddies.
Several news reports have referred to Think’s interview, but for a time on Monday, the link to the interview was disabled. Mr. Peck, who will be graduating in December with a degree in journalism, said he suspected that the shutdown happened because of overuse.
“We’re not used to having all that much traffic,” he said.
Eric Schmitt contributed reporting.
Hackers Select a New Target: Other Hackers
Somini Sengupta and Nick Bilton
The hackers, calling themselves the A-Team, assembled a trove of private information and put it online for all to see: names, aliases, addresses, phone numbers, even details about family members and girlfriends.
But their targets were not corporate executives, government officials or clueless bank customers. They were other hackers.
And in trying to unmask the identities of the members of a group known as Lulz Security, the A-Team was aiming to take them down a peg — and, indirectly, to help law enforcement officials lock them up.
The core members of Lulz Security “lack the skill to do anything more than go after the low-hanging fruit,” the A-Team sneered in its posting last month.
In recent weeks, attacks on companies like Sony and government sites like senate.gov have raised concerns about increasingly organized and brazen hackers. On Monday, a Twitter account for Fox News was hijacked.
But much of the hacking scene is a fractious free-for-all, with rival groups and lone wolves engaged in tit-for-tat attacks on each other, often on political or ideological grounds but sometimes for no better reason than to outwit — or out-hack — the other guy.
The members of Lulz Security, or LulzSec, have been at the center of the sniping lately. The group won global attention through attacks on the C.I.A., Sony, the Arizona state police and other organizations, putting at risk the personal information of tens of thousands of people in the process. Even as they attacked, the LulzSec members craftily concealed their own identities, all the while articulating an ever-changing menu of grievances, from government corruption to consumer rights.
LulzSec’s provocative attacks and flamboyant style made it a tempting target. Other hackers, equally adept at maintaining their anonymity, have been seeking to penetrate the online aliases of the group’s members.
Late last month, LulzSec announced that it was disbanding, and that its members would continue their activities under other banners. But the F.B.I. and other agencies are continuing their pursuit, aided by information unearthed by other hackers. In fact, the Lulz Security members face the real possibility that if they are caught, it will be their fellow hackers who led the authorities to their doorsteps.
“This unfortunately represents one of few ways law enforcement gets good inroads into this community,” said Bill Woodcock, research director at the Packet Clearing House, a nonprofit group in Berkeley, Calif., that tracks Internet traffic.
In hacker parlance, to be unmasked is to be dox’d, as in documented. And by hacker logic, to be dox’d is to be put out of business. An online alias is an essential weapon: it conceals a person’s name and whereabouts, while allowing the creation of an alternate identity.
Indeed, the handbook for new recruits to Anonymous, the global hacker collective from which Lulz Security sprang earlier this year, contains tips on safeguarding one’s identity — from how to steer clear of Web sites that track online activity to masking one’s Internet provider.
One of the tools it suggests is Tor, a network of virtual tunnels originally developed by the United States Naval Research Laboratory to protect online government communications. “In our world,” the handbook concludes, “a good defense is the best offense.”
Despite the detailed profiling by the A-Team and other hacker groups including Team Poison and Web Ninjas, no professed Lulz Security member has admitted to being dox’d, and some have merrily denied it. But the campaign seems to have had some effect.
The A-Team’s supposed outing of seven of Lulz Security’s members coincided with the group’s announcement that it was disbanding. And a spokesman for the group, using the alias Topiary, bid a public farewell in typically impish language: “Sailing off — watch your backs and follow the north wind, brazen sailors of the ’verse.”
The A-Team posting about LulzSec included mundane personal details. The sister of one purported LulzSec member, it said, was a bartender in a bowling alley in a small British town. Another member was described as “very ugly.” A third, the group railed, cannot hack at all: “He doesn’t actually do anything except give interviews.”
Part of the posting, complete with misspellings, went to the heart of the hackers’ paradox: “If your anonymous no one can find you. No one can hurt you, so your invincible,” it said. “The problem with this idealogy, is it’s on the internet. The internet by definition is not anonymous. Computers have to have attribution. If you trace something back far enough you can find its origins.”
Lulz Security was not above outing one of its own. A member known as m_nerva leaked some of its chat room discussions to the media. In retaliation the group posted what it said was m_nerva’s personal information, including an address in Hamilton, Ohio.
Last week the F.B.I. raided a home in Hamilton but made no arrests, according to local media reports. An F.B.I. spokeswoman, Jenny Shearer, would not comment on what she said was a continuing investigation.
In an interview with the BBC Web site, a spokesman for LulzSec who called himself Whirlpool said of the group’s opponents: “They keep trying to bring us down, we mock them, they get flustered and make snide comments, we laugh.”
Meanwhile the Web Ninjas, who publish a blog called LulzSec Exposed, declared their intentions this way: “We have tried our best doxing LulzSec and keep doing it until we see them behind bars.”
Topiary’s fellows do not seem to be in a mood to venture off into the north wind forever. Since announcing its dissolution, LulzSec has melted into a broader movement called AntiSec, which potentially has thousands of hackers on its side, including those associated with Anonymous. Hackers have continued to torment the Arizona police because of their role in a state crackdown on illegal immigrants, leaking officers’ personal e-mail last week.
Security companies and government agencies have a long history of relying on current or former hackers in the fight against computer crimes. One new wrinkle is the way that attacks on government targets have given rise to a small but loud faction of patriotic, presumably American hackers who are fighting back on their own, said Gabriella Coleman, an assistant professor at New York University who is researching a book on Anonymous. The fights have also become more public and spectacular, in part because of platforms like Twitter.
“Warring becomes an art form itself,” Ms. Coleman said. “There is that game quality to it. They’re claiming they can’t be found. It’s a huge trophy if you can.”
Until next week,
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