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Old 26-02-14, 09:28 AM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - March 1st, '14

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"This report, if true, represents a whole new level of violation of our users' privacy that is completely unacceptable, and we strongly call on the world's governments to reform surveillance law." – Yahoo






































March 1st, 2014




33 People Arrested for Illegal Uploading of Anime, Films in 3 Days

The 5th nationwide roundup of illegal uploaders In Japan
Mikikazu Komatsu

For the three days from February 25 to 27, 45 Prefectural Police Departments across Japan (except Wakayama and Osaka) have conducted a wholesale arrest of internet users who uploaded anime, manga, music, and films illegally via file sharing software. According to the National Police Agency's February 28 press release, they searched 123 places and arrested 33 people on suspicion of copyright infringement (an infringement of public transmission rights) this time. 24 were Share users, 6 used Cabos, one for Perfect Dark and Winny, and one uploaded to the FC2 site.

The police have found the 2013 Hollywood film Star Trek Into Darkness, Man of Steels, and Japanese manga Initial D, The Melancholy of Haruhi Suzumiya had been uploaded to the internet without the permission from the copyright holders. This is the fifth nationwide roundup of the illegal sharing software users in Japan. In the February 2013 roundup, they arrested 27.

Also on February 28, Fukuoka Prefectural Police uniquely announced that they arrested three men from Osaka, Nara, Aichi, on suspicion of using file-sharing software Cabos to upload Japanese idol singer Kyary Pamyu Pamyu's 2013 5th single "Ninja Re Bang Bang" to the internet without the copyright holder's permission. Then Yamanashi and Shizuoka Prefectuarl police announced the arrest of a 40-year-old office worker who uploaded Sunrise's on-going TV anime Gundam Build Fighters and one other title.
http://www.crunchyroll.com/anime-new...ilms-in-3-days





Is The Piracy Threat Really Decreasing?

Flat or declining revenues at major media companies like Sony and Viacom is contrary to recent reports that digital piracy is declining.

Guest post by Robert Steele

Recently, there has been a lot of discussion surrounding a few articles suggesting that online piracy is decreasing. From where I sit that is not the case. I am the Chief Technology Officer and Chief Operating Officer of a company that helps monetize copyrighted intellectual property (IP) for the artists and holders of copyrights.

A brief overview of the public filings of Viacom and Sony, two major players in the production and distribution of copyrighted intellectual property shows that one has no growth over 3 years and the other has declining revenues. In fact, Moody’s recently expressed concern that Sony will be unable to maintain future profitability and has downgraded the Company’s debt rating to “junk” status. Due to various external circumstances including “rapid changes in technology”, Moody’s announced that it would be difficult for Sony to improve their financial position in the near-term

Much of the claims that piracy is declining are based on a new report published by Sandvine, To get our levels set correctly here, Sandvine is a Canadian company, which as it ends up, makes software to assist ISPs to “shape” i.e. control, BitTorrent traffic. BitTorrent is the primary tool for file sharing and pirating content online. This report declares that “Filesharing now accounts for less than 10% of total daily traffic in North America” This has been widely touted in various blogs as a decrease in piracy. Specifically, the report states that during the second half of 2013, filesharing’s share of aggregate peak-period traffic in North America (not worldwide) fell to 8.93% from 10.5%. This data is being shown as proof that the proliferation of legal services that distribute copyrighted content such as Spotify, Netflix, YouTube, are helping to combat the fight against piracy.

If we had written a narrative regarding the same data, we would have stated that BitTorrent piracy grew by data volume during the period. Since Sandvine’s clients are ISPs, they don’t want to highlight this embarrassing fact about how their clients are harming companies like Sony and Viacom, so they feature the statistics that paint their client’s in the best light.

In regards to their narrative on their findings we see problems with the report–all of which should cause companies, investors and owners of copyrighted IP to be skeptical of any optimism about the decline of online piracy. Among them:

1) The report estimates that total traffic from the first half of 2013 to the second half of 2013 increased 20-30%. This means that the total amount of data used for filesharing increased. The 8.93% of internet traffic in the second half of 2013 is more movies, music and video games consumed illegally than the 10.5% indicated in the first half of 2013 because the overall “pie” grew by 20% to 30%.

2) The report shows BitTorrent’s share of total Internet traffic increased, as did total volume of BitTorrent traffic, everywhere else they measure–Europe, Asia-Pacific, and Latin America (as it has in every report published).

3) The narrative does not take into account the increase use of VPNs (Virtual Private Networks) or proxies increasingly used by BitTorrent users to “mask” where their traffic is coming from. SSL (Secure Sockets Layer) traffic, used by VPN services, more than doubled in the past year (as reported by Sandvine). They include data on VPN usage but leave that out of their analysis on filesharing.

4) We believe that the report is misleading when it states “Long are the days when filesharing accounted for over 31% total daily traffic, as we had revealed in our 2008 report.” The total amount of fixed data transferred on the internet grew by more than 310% between 2008 and 2012 from 9,927 Petabytes per month to 31,388 Petabytles per month. We are still waiting for total 2013 internet traffic totals. So 8.93% of internet traffic in 2012 used for filesharing is a lot more music and movies files than 31% of internet traffic in 2008.

4) The report hinges its filesharing debate solely on public BitTorrent, ignoring the rise in popularity of “dark nets” including Tor and other encrypted digital lockers used for online piracy.

5) Despite the increase in total traffic, U.S. digital track sales decreased for the first time ever in 2013, dropping from 1.34 billion to 1.26 billion, according to Nielsen SoundScan. CD sales also declined, dropping 14% to 165 million.

The data provided by Sandvine says nothing about the number of files share, or the number of files shared per person. That is the information that matters, and what we attempt to solve everyday at Rightscorp.

Ignoring all the other factors, this is reason alone to question the claim that “piracy is decreasing”.

VPNs and Proxies

US BitTorrent users are becoming more savvy and turning to VPNs to mask their traffic from their ISP. It has been shown that this method is effective in avoiding piracy lawsuits and strikes. TorrentFreak, a popular piracy blog, reports “a majority” of BitTorrent users are turning to VPNs.

The results in the Sandvine report show that SSL (Secure Sockets Layer) traffic, used by VPN services, has increased significantly over the last report, more than doubling from 2.5% to 5.4% of total traffic. Since actual traffic has increased even more, the true usage of VPNs could be significantly more.

As TorrentFreak pointed out “This increase in VPN use also means that the actual percentage of BitTorrent traffic is even higher, since the Sandvine report puts the traffic generated by these users in the SSL category.”

Other Piracy Channels

The metric Sandvine uses for all “piracy” is BitTorrent. This is flawed, as recently many pirates have been abandoning torrent-based peer-to-peer file sharing, partially because there are many other ways available to share material.

“Dark nets” such as Tor and other encrypted digital lockers have experienced an exponential growth in number of users in recent months. Particularly following the attention drawn to them by the Edward Snowden case. Other popular anonymous networks including I2P, and Freenet have combined to more than double in size in the past year.

The limitations in Sandvine’s tracking data for anonymous networks such as Tor suggest that the report is missing one of the fast growing segments of the piracy market.

What Does This Mean?

Well, to be frank, piracy is not decreasing, and investors should be skeptical about reports stating that it is. On the contrary, there are many reasons to believe that it is in fact on the rise. Artists are still unable to properly monetize their copyrights.

Hopefully, with services, including our own at Rightscorp (RIHT), artists will be able to protect what is theirs. Additionally, Rightscorp has been successful at getting VPN companies to adopt its copyright monetization services to discourage misuse of VPN services.

The cultural acceptance of piracy–particularly with young people–creates a lot of media incentives to mask the consequences of this system. It also leads to optimistic reports like the one above.
http://www.broadwayworld.com/bwwgeek...rdist-20140224





Pirate Bay Becomes ‘Research Bay’ in File-Sharing Project

Controversial website and Swedish university to study “habits and norms” of its community
Jj Worrall

Controversial file-sharing website, Pirate Bay has teamed up with Lund University in Sweden to study the “habits and norms” of its community in what researchers believe will be the “largest study of this type” ever undertaken.

Stefan Larsson, a member of the University’s Cybernorms research group, told The Irish Times “we want to see who is file-sharing and what are the frequencies” in user behaviour.

The three-day survey is hosted at the home page of Pirate Bay - which Irish web users are theoretically blocked from using - until midnight tomorrow night, with a massive 25,000 users taking part within “the first eight hours”, and “86,245 respondents” reported by Larsson by yesterday afternoon.

Teaming up with Pirate Bay as it’s the “biggest, most popular and most resilient hub for free file-sharing” online, Larsson said the study also covered attitudes towards copyright laws, censorship and online monitoring.

In particular researchers want to look into “anonymity services” and hope to dig into “the extent to which file-sharers know about it, use it and pay for it”.

Michele Neylon, MD of web hosting company Blacknight said research into the habits of file-sharers often produce surprising results.

“The argument that rights holders would like to put forward is that downloading and sharing equals theft, that by allowing this to happen lots of revenue is being lost,” he said, though “a lot of the studies that have been done in the past seem to sort of go against [that] logic”.

Previous surveys between Lund University and Pirate Bay in 2011 and 2012 had between 75,000 and just under 100,000 respondents, with results revealing the file-sharing community to be largely “a young generation of males”.

“About 94 per cent of file-sharers in previous surveys have been male, which is enormously skewed,” said Larsson. “We knew it was unequal but not to that extent.”

While Neylon wasn’t overly surprised by this stark figure he said that, “it doesn’t mean women don’t file-share, they definitely do”.

Larsson said figures from previous surveys showed that 70 per cent of respondents were under 30 while those who use virtual private networks (VPNs) to shield their identity came in about “between 15 and 17 per cent”, though, added Larsson, “over 50 per cent of respondents would like to be more anonymous” when online.

“There’s a readiness to be anonymous if they were more targeted by law enforcement,” he said. “If law enforcers were to hunt file-sharers more the internet would become anonymous.” Those who upload content are the most likely use paid-for VPN services as “they’re more at risk of getting caught”.

The most recent 2012 survey from Lund received 628 responses from Irish users, of which 94.6 per cent were male, 34 per cent downloaded something every day and 36 per cent did so on a weekly basis. In addition, 17 per cent said they “didn’t care” about online anonymity and 6 per cent used paid-for services to keep their identity secret.

The latest survey is, said Larsson, to measure to what extent “social norms shifts over time” as well as asking newer questions on “when and how - if ever - authorities should collect and process information on internet behaviour”.
http://www.irishtimes.com/business/s...ject-1.1705449





BitTorrent Revamps Android App With Easier File Sharing
Saikat Basu

BitTorrent brings a new look and feel to its Android app. BitTorrent Version 2 shows significant changes like the ability to select and download individual files within a torrent. You also get a completely redesigned interface for simpler file downloading and for easier sharing of BitTorrent Bundles. Similar UI changes also come to BitTorrent’s desktop application and uTorrent as well.

Downloading is now far more intuitive – you can not only download individual files within a torrent, but you can do it before or during the download. The mobile app allows you to pick a download location and see the progress of individual downloads with nicely colored indicator bars. Also, you can now delete torrents only or remove both torrents and files.

Mobile usage of BitTorrent has crossed 50 million installs in two years. It is a significant milestone in our increasing interaction with smartphones as go-to devices for everything.

BitTorrent has announced that bundles will be integrated into the desktop torrent applications; making it easier for users to discover and choose what to download. Creatives can tap into the wide userbase for promotion of their work, and also for revenue. BitTorrent bundles as a publishing medium still needs a push from its present Alpha stage, though. Making it a core feature for desktop BitTorrent and uTorrent users can only help.
http://www.makeuseof.com/tag/bittorr...-file-sharing/





YouTube Ordered to Remove “Illegal” Copyright Blocking Notices
By Andy

Music collecting society and anti-piracy group GEMA has scored a big victory in its long-running battle with Google-owned YouTube. A court has ordered the video giant to remove blocking messages which claim GEMA is to blame for thousands of videos being unavailable in Germany on copyright grounds.

Simply searching for the terms “unavailable in Germany” reveals the scale of the problem. Thousands of complaints, from the man in the street right up to record label bosses, show that the licensing dispute with collecting society/anti-piracy group GEMA has hit in every corner.

It is a complex battle with a simple disagreement at its core. In 2007 the entities reached a licensing agreement for YouTube to use works from GEMA’s extensive repertoire. Two years later negotiations to extend that deal broke down when GEMA’s long-term demand of around €0.12 per stream was rejected by Google.

In May 2010 GEMA sued to have YouTube block certain titles so that they could not be viewed locally. In April 2012 and after much legal wrangling, the Regional Court of Hamburg ruled that YouTube could be held liable for the “infringing” videos and must therefore take measures to render content unavailable in Germany.

And herein lies the problem. YouTube is a constant source of frustration for German users thanks to the blocking of thousands of videos as a result of the GEMA dispute. When local users try to access popular videos being enjoyed by their fellow Internet users (GEMA claims that YouTube overblocks unnecessarily) they are greeted with a message informing them that they should blame GEMA, not YouTube, for the inconvenience.

Time and again, users are informed that videos are blocked due to GEMA not granting the necessary music rights. As a result, GEMA has become very unpopular indeed.

Trying to remedy the situation, GEMA applied for an injunction to force YouTube to change the messages, claiming that they misrepresent the situation and damage GEMA’s reputation. YouTube alone is responsible for blocking the videos, claiming otherwise is simply false, GEMA argued.

Yesterday the District Court of Munich agreed with the music group and issued an injunction to force YouTube to comply, stating that the notices “denigrate” GEMA with a “totally distorted representation of the legal dispute between the parties.” Changing the message to state that videos are not available due to a lack of a licensing agreement between YouTube and GEMA would be more appropriate, the Court said.

“For almost three years, YouTube has misled the public with these blocking messages and unlawfully influenced public opinion at the expense of GEMA,” GEMA CEO Dr. Harald Heker said in a statement.

“The decision sends an important and positive signal: It’s not GEMA preventing the enjoyment of music on the Internet. It seeks merely to license YouTube, like all other music portals. Our concern is that the artists participate in the economic exploitation of their works and can earn a livelihood in the future.”

YouTube parent company Google said it was studying the decision.

“We need to examine the reasons for the judgment, before we can make a decision about what to do next,” a spokesperson said.

Once the judgment of the District Court of Munich is made final, YouTube faces fines of up to 250,000 euros per breach.
http://torrentfreak.com/youtube-orde...otices-140226/





YouTube Must Take Down Explosive 'Innocence of Muslims' Video in Copyright Suit
Adi Robertson

Google and YouTube must scrub all copies of "Innocence of Muslims," a low-budget anti-Islam film that drew international protest in 2012, at the behest of an actress who says she received death threats after being duped into a role. The Ninth Circuit Court of Appeals has granted a temporary takedown order on behalf of Cindy Lee Garcia, who filed a copyright claim against Google in an attempt to purge the video from the web. While actors usually give up the right to assert copyright protection when they agree to appear in a film, Garcia says that not only was she never an employee in any meaningful sense, the finished film bore virtually no relation to the one she agreed to appear in. In a majority opinion, Judge Alex Kozinski said she was likely in the right.

It's well established that most people involved in "Innocence of Muslims" had no idea they were appearing in a diatribe against Islam. Garcia was paid $500 for a bit part in sword and sandals movie "Desert Warrior," but she later found her footage had been edited for the new film and overdubbed with one of the most controversial lines: "Is your Mohammed a child molester?" An Egyptian cleric issued a fatwa against her and everyone else involved with the film, and Garcia says she soon began receiving death threats. The video, meanwhile, had been blocked in parts of the Middle East by both Google and governments, and the director was arrested for violating probation after a 2010 conviction for bank fraud. After trying and failing to get Google to remove the film altogether, Garcia filed suit, claiming it was violating the copyright of her performance.

Not only is this not the film Garcia signed up for, it 'isn't intended to entertain at all.'

It's possible for an actor to "own" their performance, but in most productions, they either sign an explicit release or give implied consent by taking the job. In this case, though, a combination of the director's shady dealings and the extreme repurposing of her footage voided that consent. An actor can't simply reject a film because of an unsatisfactory final edit, but "even a broad implied license isn't unlimited," said Kozinski. "The problem isn't that 'Innocence of Muslims' is not an Arabian adventure movie: it's that the film isn't intended to entertain at all. The film differs so radically from anything Garcia could have imagined when she was cast that it can't possibly be authorized by any implied license she granted."

This is a preliminary decision, not a final verdict, but it overturns a lower court ruling that she'd likely consented to appear in the movie and wouldn't suffer major harm if Google left "Innocence of Muslims" up on YouTube. Garcia waited months after the film was uploaded to file her lawsuit, something that could weaken the case, and her part in the film was minimal. But she did file as soon as she started receiving death threats, which changed the situation significantly, and YouTube is a "prominent online platform" that continues to connect her to the controversy. "Death is an 'irremediable and unfathomable' harm," says Kozinski. "To the extent the irreparable harm inquiry is at all a close question, we think it best to err on the side of life." Judge N.R. Smith filed a dissenting opinion, saying that Garcia's role in the film was too negligible to give her any copyright claim, and that it's unclear leaving it up during the case will cause any further harm.

For now, Google must remove all copies of the film within 24 hours and take reasonable measures to prevent it from being re-uploaded. The case, meanwhile, has been passed back to a lower court, with instructions to issue a similar temporary ban.
http://www.theverge.com/2014/2/26/54...copyright-suit





TV Networks Ask Supreme Court to Shut Down Aereo
Leslie Kaufman

Aereo, the start-up that uses tiny antennas to stream the free signals of TV stations to its customers’ Internet-connected devices for a fee, is stealing from the broadcast networks on a giant scale, the broadcasters asserted in a filing with the Supreme Court on Monday.

“The Copyright Act does not tolerate business models premised on the unauthorized exploitation of the copyrighted works of others,” said the brief, which was filed by broadcasters including ABC, CBS, NBC and Fox.

On April 22, the Supreme Court is scheduled to hear American Broadcasting Companies v. Aereo, a case that has significant implications for a television industry undergoing profound changes, as well as challenges from upstart competitors like Netflix and Amazon.

Among the broadcasters most substantial threats is Aereo, a two-year-old company that operates in 13 cities and continues to grow. On Monday, it announced plans to offer its service in Austin, Tex., starting next week.

The company argues that it does not have to pay to retransmit the broadcasters’ programming because it temporarily assigns each viewer an antenna at its storage facility. That means instead of copying the material outright, it allows individuals to copy on their own.

Lower courts are split on the legality of Aereo’s business. Last summer, the United States Court of Appeals for the Second Circuit in Manhattan ruled in favor of Aereo. Yet a dissenting judge in the case, Judge Denny Chin, called the Aereo system a “sham.”

“The system employs thousands of individual dime-sized antennas, but there is no technologically sound reason to use a multitude of tiny individual antennas rather than one central antenna; indeed, the system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law,” Judge Chin wrote.

Last week, a federal judge in Utah with multistate jurisdiction sided with the broadcasters, issuing an injunction against Aereo, forcing it to shut down operations in Salt Lake City and Denver.

“Despite its attempt to design a device or process outside the scope of the 1976 Copyright Act, Aereo’s device or process transmits plaintiffs’ copyrighted programs to the public,” wrote Judge Dale A. Kimball.

Aereo was started by Chet Kanojia, an entrepreneur who made his first fortune selling a software company to Microsoft in 2008 for a reported $250 million. Among his investors in Aereo is Barry Diller, the chairman of the IAC/InterActive Corporation.

Customers of Aereo, for a monthly fee starting at $8, can watch or record broadcast television through the Internet with no wires or cable boxes required. It does this by giving each customer a miniature antenna that captures broadcast signals, as well as access to a cloud-based digital video recorder.

The broadcasters, which invest billions to create, acquire and distribute TV shows, argue that if Aereo is allowed to operate, cable and satellite companies will develop their own technologies to avoid paying them for their content, threatening the future of their business.

“Aereo’s unauthorized retransmissions threaten the value of their works and, more fundamentally, their businesses,” said the broadcasters, adding that if Aereo continued, they could be forced to then reconsider the “quality and quantity” of the programs they broadcast for free over the air.

“Broadcast television not only continues to carry the majority of the country’s most popular shows, but also remains a critically important source of local and national news.”

Representing the broadcasters is a group of lawyers led by Paul Clement, the former United States solicitor general, which represents the federal government before the Supreme Court. He is now in private practice at the Bancroft law firm.

David C. Frederick, a well-known appellate lawyer who has argued more than 40 cases before the Supreme Court, is representing Aereo, whose reply brief is due on March 26.
http://www.nytimes.com/2014/02/25/bu...own-aereo.html





MPAA’s Latest Anti-Piracy Move Accidentally, Completely Screws Hollywood Studios
David Sirota

From Marlon Brando’s civil rights statement in absentia to Michael Moore’s anti-war speech, the Academy Awards ceremony played host to its share of high-profile protests. This year, though, the biggest protest will likely happen outside the Dolby Theater.

Pando has learned that visual effects industry workers plan a mass demonstration against the major studios’ ongoing efforts to offshore post production work. That offshoring has led to the slow collapse of the American FX industry at the very moment digital effects have become a central ingredient in entertainment products.

The fight between the studios and the tech wizards who actually make movies possible is not new. Encouraged by ever-rising subsidies available overseas, the movie industry has for years been shipping millions of dollars of digital work outside the U.S. This kind of work is vulnerable to such offshoring because it can be done anywhere, even if logistics demand that much of the physical shooting remain in New York or Los Angeles.

Up until now, there was little the American visual effects industry could do about this. With the studios bankrolling politicians and protecting their political agenda through the $60-million-a-year Motion Picture Association of America, Washington has refused to intervene on behalf of the workers.

Unfortunately for the studios, however, Pando has also learned that the visual effects workers have just been handed a powerful new legal and political weapon, one with the potential to fundamentally change the economic dynamics throughout the entertainment and tech industries.

And here’s the twist: It is a weapon the MPAA itself created in its own desperate attempt to prevent Internet piracy.

The giant sucking sound coming from the tech sector

Before getting to the case at hand, it is worth reviewing how thousands of digital artists, graphic designers, animators, and technicians in America’s visual effects industry became the latest casualties of an ongoing trade war — one that has already decimated domestic blue collar industries and is now turning the information sector into its newest battlefield.

In 2006, Princeton economist Alan Blinder famously warned that the critical economic divide in the future will “be between those types of work that are easily deliverable through a wire or via wireless connections with little or no diminution in quality, and those that are not.”

This truism has upended huge swaths of the tech sector, as everything from call centers to back office services have moved offshore to countries with lower wages, more lax labor protections, and more corporate-compliant politicians than here in the U.S. Meanwhile, the “wire” (read: Internet) has allowed the final products and services from that cheaper labor to be frictionlessly transmitted back to the American market with little degradation, thus boosting corporate profit margins.

With many tech jobs subsequently moving from industrialized nations to more exploitable developing world economies, this was the digital version of the giant sucking sound that Ross Perot famously predicted.

Offshoring wasn’t supposed to cause upheaval between advanced economies, because the wage and regulatory differentials in those economies were far smaller. There shouldn’t be many labor expenses for companies to reduce if they uproot from the United States to, say, Britain.

These laws of “free trade” economics were supposed to provide at least some inherent job security for high-skill creative types like the roughly 9,000 people who the Bureau of Labor Statistics estimates work in motion-picture-related visual effects. Sure, those high-skill workers would still have to worry about some developing-world competitors who could offer studios cheaper labor, but they retained language and logistical advantages over those competitors. At the same time, those U.S. visual-effects workers were never supposed to have to worry about serious overhead-cost competition from other industrialized countries.

That’s where governmental subsidies came along to distort the market. Violating the spirit, and the letter, of World Trade Organization regulations and U.S. domestic trade statutes, industrialized countries like Canada, Britain, Australia, Germany and New Zealand have started offering massive taxpayer-financed handouts to studios if the studios source their visual effects and post-production services in those nations. In British Columbia, for example, public subsidies pay up to 60 percent of the entire salary of visual effects workers. The United Kingdom and New Zealand have been following suit with recent efforts to further expand their own subsidies.

This never-ending taxpayer-funded bailout has grossly distorted the global market for visual effects, artificially deflating studios’ overall price for visual effects in the high-subsidy nations.

The consequences in the United States have been predictable. As Pando previously reported, four decades after actor Charlton Heston urged Congress to “fight subsidy with subsidy,” U.S. states are now spending roughly $1.5 billion on their own subsidies to compete with one another for what US production work still remains. Even so, the states are increasingly unable to keep up in the never-ending international subsidy race (and they are typically losing money on the projects they do manage to attract).

Consequently, as the Los Angeles Times reports, “At least a half a dozen visual effects houses have gone out of business in recent years as more work has fled to foreign countries, especially Canada and Britain, that offer generous tax breaks for postproduction work.”

An upcoming documentary on the offshoring situation in Hollywood puts the number of firms lost at a whopping 21, including some of the industry’s highest profile companies.

As The Verge reports:

Rhythm & Hues — the creators of Life of Pi’s Oscar-winning visual effects — went bankrupt earlier this year… Digital Domain, who provided the VFX for Titanic and counted James Cameron among its founders, was declared bankrupt and sold in late 2012… (and) even DreamWorks (was) forced to lay off 350 employees earlier this year.” The Los Angeles Times notes that Rhythm & Hues executives specifically “cite the damaging effect of foreign subsidies that made it increasingly difficult for the company to bid on projects.

Fast forward to the future, the Bureau of Labor Statistics predicts that even as visual effects-based content expands, job growth in the domestic visual effects industry “will be slowed by companies hiring animators and artists who work overseas” — specifically in countries that illegally subsidize their industry.

The Visual Effects Society summed it up by saying “the amazing irony is that while 47 of the top 50 films of all time are visual effects driven and billions of dollars of profits are generated yearly, the actual people who create the work are becoming an endangered species in California.” Variety boiled it down to a simple headline: “Foreign Incentives Help Crush Once-Booming F/X Biz in U.S.”

For those who have survived in the domestic industry, the situation is as bleak as it has been for so-called permatemp workers in the software industry.

“Gone are the days of staff positions,” says Daniel Lay, a visual effects animator who runs the influential VFX Soldier blog that tracks industry trends. “If you aren’t on a project at the company you work for, you were laid off. Smaller companies have transitioned to offering no benefits and employee misclassification.”

This has been a boon to the six major studios that the MPAA represents. According to the Hollywood Reporter, those giants “combined to generate more than $4.3 billion in operating profit in 2013, up 23 percent from $3.5 billion in 2012.”

The situation has also created an opaque financial market in which studios are trading tax incentives for up front cash through financial behemoths like U.S. Bank and Bank of America. It is a system that one critic calls a scheme “allow(ing) purchasing corporations to shelter income.”

Forcing Big Government to confront Big Hollywood

With political power players like the MPAA so invested in offshoring, the decimated visual-effects industry hasn’t had much recourse.

Even though both WTO rules and U.S. domestic laws explicitly allow for severe financial punishments against governments that distort trade by strategically subsidizing industries, there’s a difference between those laws existing and governments enforcing them.

Consider what happened back in 2007 when the U.S. Trade Representative opted to ignore a coalition of Hollywood unions petitioning the Bush administration to enforce existing anti-subsidy laws against Canada. When asked to justify that decision in a Freedom of Information Act request, the administration offered just four pages of heavily redacted documents. Since then, President Obama, whose campaigns have been financed by the big studios, has refused to reopen or reevaluate the case.

Taken together, the message has been clear: presidents of both parties have been willing to use what discretion they have to defend the studios, regardless of the merits of the underlying legal argument.

But that brings us to this drama’s surprise second act.

The against-all-odds protagonist in this Hollywood sequel is Daniel Lay, the 33-year-old heretofore anonymous blogger behind the website “VFX Soldier,” which chronicles the tribulations of the visual effects industry. Lay, an animator who has worked for DreamWorks Animation, Sony Pictures Imageworks, and Digital Domain, enlisted the Washington law firm of Picard, Kentz and Rowe to explore whether there were legal options to fight the MPAA.

In a twist that seems crafted by professional scriptwriters, they discovered a legal document submitted by the MPAA just two weeks ago, when the organization decided to weigh in on an seemingly inconsequential International Trade Commission case involving 3-D printers. In that filing, obtained by Pando, the MPAA argued that digital goods should be considered imports and therefore subject to the stringent copyright protections the big studios so desperately want.

From the filing (emphasis mine):

To effectuate Congressional intent to protect domestic industries, the Commission can and must construe the term “articles” to include imported electronic transmissions, consistent with its own precedent and decisions from other administrative agencies and courts.

…The need to regulate the burgeoning international trade in digital intellectual property is widely recognized by U.S. policymakers. The U.S. government has consistently recognized that international trade in digital forms of intellectual property is every bit as “real” as trade in traditional manufactured goods.

The use of electronic means to import into the United States infringing articles threatens important domestic industries such as the motion picture and software industries, as well as U.S. consumers and the government at all levels.


In a statement to Pando, the MPAA proudly reiterated this position.

“Congress has given the ITC broad authority to protect U.S. industries from unfair acts in importation,” said spokeswoman Kate Bedingfield, adding that if the government doesn’t recognize digital products as imports, “American businesses lose an important protection, which puts them at a significant international disadvantage.”

On the face of it, that esoteric legal argument from the MPAA seemed unremarkable — since the failure of SOPA, the movie industry has tried everything it can to protect its bottom line. Yet, Lay’s lawyers soon realized that the MPAA’s legal position had enormous implications for offshored post-production workers.

If, as the MPAA insists, movies should be recognized as imports then so too should post-production work. That means visual effects work would be subject to the same subsidy-busting provisions which previously were primarily applied to physical goods like steel and lumber.

In other words, emboldened by the MPAA’s filing, the visual effects workers are now in a position to use the big studios’ own arguments to compel the government to slap trade tariffs on those studios’ own productions in high-subsidy countries. Those arguments will be especially powerful because the MPAA made them to the very same governmental agencies that will process the visual-effects workers’ case. Additionally, the workers can now take matters into their own hands.

In a feasibility study prepared by Picard, Kentz and Rowe, the lawyers explained that workers don’t have to rely on the discretion of the U.S. Trade Representative. Instead, they could invoke an existing countervailing duty law which, according to the lawyers, is “mandatory in its application” and “does not grant the Administration discretion to decline” an action.

Translated from legal-ese, this means the anti-subsidy laws are insulated from political interference, no matter how many friends in high places the MPAA has.

If visual effects workers can show the Commerce Department and the U.S. International Trade Commission that an import is benefiting from foreign subsidies and therefore illegally undercutting a domestic industry, the federal government is obligated to automatically slap a punitive tax on that import. Such a tax would in practice erase the extra profit margins the studios are gleaning from the foreign subsidies, thereby leveling the competitive playing field for American workers and eliminating the purely economic incentive for the studios to engage in mass offshoring.

With so much subsidy cash at stake, the MPAA will almost certainly try to prevent this. But here’s the thing: when the workers bring their case against the subsidies and the MPAA inevitably tries to fight them, the workers can now simply cite the MPAA’s own legal case and echo the MPAA’s own call “to protect U.S. industries from unfair acts in importation.”

They can, in short, hoist the studios on the studios’ own legal petard.

The wider implications for the tech economy

With its own grounding in digital commerce, Silicon Valley has an obvious interest in how digital goods are classified. Underscoring that, Google has weighed in on the same obscure 3-D printing case, perhaps in an effort to legitimize its own current or future offshoring practices. In its filing obtained by Pando, the company insists that because “there is not a single mention of electronic transmissions” in the underlying trade law from 1922, it “appl(ies) to physical goods and not electronic transmissions.”

Beyond the sheer insanity of implying that lawmakers 90 years ago deliberately excluded Internet communication from trade statutes, Google’s argument was debunked by the visual effects workers’ lawyers, who outlined how government agencies like the U.S. Customs and Border Protection agency and the Court of International Trade (which oversees the ITC) routinely treat digital products as regular imports.

As important, Google’s case was also legally eviscerated by — you guessed it! — the MPAA. In its review of legislative history, the MPAA ended up debunking the idea that digital goods are not imports. In the process, the MPAA further made the visual effects industry’s prospective case against the legality of the big studios’ own lucrative subsidies.

David Yocis, a lawyer who has consulted with visual effects workers, says that the MPAA is caught between its two competing priorities, and that its legal filings prove it may finally be forced to choose between the two.

“The MPAA is so worried about piracy they are not going to claim that on the Internet you can do anything that you want,” he said in an interview with Pando. “When push comes to shove, they are probably more concerned about preserving the ability of the government to crackdown on piracy than on preserving their subsidies.”

Could political meddling still stop the law from being enforced?

Despite the MPAA inadvertently exposing the big studios to severe trade sanctions, the domestic visual effects industry still faces serious obstacles in its legal crusade to end the subsidies and create an equal economic playing field.

For instance, there is the sheer difficulty of organizing. Though Lay did manage to raise the money necessary to commission the feasibility study, and though a town hall meeting of VFX workers last year drew a huge crowd to discuss political strategies, the industry has no union. That will make it more logistically difficult — but certainly not impossible — to meet trade statutes’ requirement to prove legitimate support for the case among the visual effects industry as a whole.

Additionally, even though the statutes in question do not give the government the same discretion it used to quash earlier cases against Big Hollywood, there remains the potential for stealth political interference. After all, the Obama administration has close ties to the entertainment industry and the MPAA is one of the capital’s most powerful lobbying groups.

On top of that, the head of the Commerce Departments’ Trade Enforcement, Paul Piquado, is only a few degrees of separation from the big studios. He came to the Commerce Department from a plum position in the administration of Pennsylvania Gov. Ed Rendell, who just so happens to one of the most reliable (and handsomely paid) allies of Universal Studios’ owner Comcast. Before that, Piquado cut his legal teeth at Sidley Austin, a law firm that has represented the MPAA.

These connections and others probably could not alone stop the move by the visual effects workers. However, they could potentially slow down any final enforcement action to at least temporarily give the big studios the best of both worlds, aka copyright privileges under international trade laws without the attendant enforcement of anti-subsidy provisions under those same trade laws.

For his part, Lay says that in this David-versus-Goliath battle fit for a Hollywood blockbuster, the workers’ new legal strategy has the best chance of success, and certainly better than trying to match other countries in an ever escalating race to increase subsidies.

“We chose this route because it is the least political option for us, and we have very leftwing people and very rightwing people getting together to support this,” he told Pando in an interview between meeting with visual effects workers at Disney and organizing the upcoming Academy Awards protest. “My generation is very cynical about the system right now, and we’re trying to use the system as best as possible. What would it say about our system if it can’t be used in the way it is set up to be used?”
http://pando.com/2014/02/25/revenge-...big-hollywood/





Comcast’s Deal with Netflix Makes Network Neutrality Obsolete
Timothy B. Lee

For the past two decades, the Internet has operated as an unregulated, competitive free market. Given the tendency of networked industries to lapse into monopoly—think of AT&T's 70-year hold over telephone service, for example—that's a minor miracle. But recent developments are putting the Internet's decentralized architecture in danger.

In recent months, the nation's largest residential Internet service providers have been demanding payment to deliver Netflix traffic to their own customers. On Sunday, the Wall Street Journal reported that Netflix has agreed to the demands of the nation's largest broadband provider, Comcast. The change represents a fundamental shift in power in the Internet economy that threatens to undermine the competitive market structure that have served Internet users so well for the past two decades.

The deal will also transform the debate over network neutrality regulation. Officially, Comcast's deal with Netflix is about interconnection, not traffic discrimination. But it's hard to see a practical difference between this deal and the kind of tiered access that network neutrality advocates have long feared. Network neutrality advocates are going to have to go back to the drawing board.

The classic Internet

To understand what's going on, it's helpful to review the structure of the "classic" Internet.

This diagram is an idealized depiction of how the "classic" Internet of the late 1990s worked. Backbone Provider B provides Internet service to Yahoo, carrying traffic to users around the world. Provider B connects with other companies, such as Backbone Provider A. The residential ISP on the right is a customer of Backbone provider A, and it, in turn, offers Internet access to individual households. The red arrows indicate who pays whom for service. Because the two backbone providers are roughly the same size, they engage in what's called "settlement-free peering": They exchange traffic with each other with no money changing hands.

A big advantage of this industry structure is that the backbone market is competitive. If Backbone Provider B overcharges Yahoo for connectivity, Yahoo can switch to another backbone provider. I've only drawn two backbone companies, but in the real world there were a number of them competing with one another. The fact that the largest backbone providers engage in settlement-free peering ensures that every computer on the Internet can reach every other computer. Competition among backbone providers helps keep prices down and service quality up.

This industry structure has another virtue, too: Network neutrality is protected by default. Traffic from Yahoo comes to the residential ISP in a big bundle along with traffic from lots of other Web sites. As I argued in a 2008 paper for the Cato Institute, that makes non-discrimination the default and gives residential ISPs limited leverage over distant Web sites. If the residential ISP wanted to discriminate against Yahoo traffic, it would need to make an explicit decision to block or degrade it, which would likely trigger a customer backlash. That has allowed network neutrality to thrive in the 1990s and 2000s even though there was no formal network neutrality regulations until 2010.

But the Internet is changing. One sign of that change is the just-announced deal between Comcast and Netflix. Another is Ars Technica's recent story about a dispute between the backbone provider Cogent and Verizon. Netflix is a Cogent customer. Surging Netflix traffic has been overwhelming the links between Cogent and Verizon. Cogent has asked for those links to be upgraded, but according to Cogent, Verizon has demanded payment for upgrading the links. (When Ars asked Verizon for comment, a spokesman declined to comment on the specifics of the negotiation.)

We can depict the dispute like this:

In this version of the Internet, two big things have changed. First, Netflix is really big. The video streaming site now accounts for about 30 percent of all traffic on the Internet. Second, Verizon acquired the formerly independent backbone provider MCI in 2006, helping to turn itself into a major backbone provider in its own right.

Those changes matter for Cogent's negotiations with Verizon. In the first chart, Backbone Provider A's leverage was limited by the fact that Backbone Provider B could always connect directly to the residential ISP, potentially costing A a customer. That gave A a strong incentive to keep its network fast and its interconnection terms reasonable.

The negotiation between Cogent and Verizon is different. Verizon plays the role of both backbone provider and residential ISP. That puts Verizon in a much stronger negotiating position, because Cogent doesn't have any practical way to route around Verizon. If Cogent wants to reach Verizon's customers, it needs to cut a deal with Verizon.

The FCC's dilemma

The fact that Netflix agreed to pay Comcast suggests that Cogent will likely lose its fight with Verizon as well. And as Cogent's chief executive Dave Schaeffer told Ars, "once you pay it's like blackmail, they've got you, there's nowhere else to go. They'll just keep raising the price in a market where prices [for transit] are falling."

Indeed, in the long run, this development threatens the survival of independent backbone companies like Cogent. If it becomes industry practice for backbone providers to pay residential ISPs, companies like Cogent will become mere resellers of access to the networks of large broadband companies. Or they may be cut out of the loop altogether, as large customers such as Netflix cut deals directly with broadband providers such as Comcast.

Cutting out the middleman might make the Internet more efficient, but it will also make it less competitive. Cogent has many competitors. Verizon's FiOS service does not. If companies like Cogent are squeezed out of business, it will make these already powerful network owners even more powerful.

It would also transform the network neutrality debate. As I mentioned before, the conventional network neutrality debate implicitly assumes that residential ISPs receive Internet traffic from one big pipe. Network neutrality advocates want rules prohibiting ISPs from divvying this pipe up into fast and slow lanes based on business considerations.

But in a world where Netflix and Yahoo connect directly to residential ISPs, every Internet company will have its own separate pipe. And policing whether different pipes are equally good is a much harder problem than requiring that all of the traffic in a single pipe be treated the same. If it wanted to ensure a level playing field, the FCC would be forced to become intimately involved in interconnection disputes, overseeing who Verizon interconnects with, how fast the connections are and how much they can charge to do it.

At this point, the FCC doesn't have any good options. Regulating the terms of interconnection would be a difficult, error-prone process. Trying to reverse the decade-old mergers that allowed America's broadband market to become so concentrated in the first place would be even more so. But the growing power of residential broadband providers will put growing pressure on the FCC to do something to prevent the abuse of that power.

One clear lesson, though, is that further industry consolidation can only make the situation worse. The more concentrated the broadband market becomes, the more leverage broadband providers like Comcast and Verizon will have over backbone providers like Cogent. That gives the FCC a good reason to be skeptical of Comcast's proposed acquisition of its largest rival, Time Warner Cable. Blocking that transaction could save the agency larger headaches in the future.
http://www.washingtonpost.com/blogs/...lity-obsolete/





House Passes Watered-Down Phone Unlocking Bill that Bans “Bulk” Resale

Bill would legalize cell phone unlocking for individuals only.
Jon Brodkin

The US House of Representatives today passed a bill that would make it legal for individuals to unlock cell phones for use on a different carrier's network, but only after watering it down enough that consumer advocates opposed the legislation.

"Unlocking" a phone allows it to be used with any cellular carrier, as long as the network is compatible, making it easier for consumers to avoid being tied to any one carrier.

The "Unlocking Consumer Choice and Wireless Competition Act" passed today repeals a Library of Congress decision that made unlocking phones a violation of the Digital Millennium Copyright Act's (DMCA) anti-circumvention provision. The bill drew support from consumer advocates until a section banning "bulk" unlocking was added.

"[T]his legislation allows any individual who wishes to unlock their cell phone for personal use to seek help from others without violating anti-circumvention provisions," a bill summary states.

This is just for individual use, the bill text emphasizes. Unlocking "may be initiated by the owner of any such handset or other device, by another person at the direction of the owner, or by a provider of a commercial mobile radio service or a commercial mobile data service at the direction of such owner or other person, solely in order to enable such owner or a family member of such owner to connect to a wireless telecommunications network, when such connection is authorized by the operator of such network," it states.

The new provision that drew criticism says unlocking shall not be allowed "for the purpose of bulk resale." It was added by Rep. Bob Goodlatte (R-VA), who sponsored the bill.

This provision led consumer advocacy group Public Knowledge to withdraw support. iFixit also withdrew its support, and so did Sina Khanifar, who started a White House petition that helped push the government to act on cell phone unlocking.

The Electronic Frontier Foundation wrote that "[b]ulk unlockers acquire phones from a variety of sources, unlock them, and then resell them. By expressly excluding them, this new legislation sends two dangerous signals: (1) that Congress is OK with using copyright as an excuse to inhibit certain business models, even if the business isn’t actually infringing anyone’s copyright; and (2) that Congress still doesn’t understand the collateral damage Section 1201 [of the DMCA] is causing. For example, bulk unlocking not only benefits consumers, it's good for the environment—unlocking allows re-use, and that means less electronic waste."

The bill passed 295-114 with 200 Republicans voting in favor and Democrats split 95-94. The bill will head on to the Senate for consideration there.

The EFF said another House bill, the Unlocking Technology Act, is better because it "would limit violations of section 1201 to actual cases of copyright infringement."

AT&T, Verizon Wireless, Sprint, T-Mobile, and US Cellular recently bowed to pressure from FCC Chairman Tom Wheeler and voluntarily committed to unlock customers' cell phones. However, that commitment was only for customers who had paid off their contracts and given carriers a year to comply.
http://arstechnica.com/tech-policy/2...s-bulk-resale/





The Super-Secure Blackphone Is Here, But It's Not NSA-Proof
Lorenzo Franceschi-Bicchierai

Blackphone, a new security and privacy-focused smartphone is finally launching, but if you think it's a shield against the NSA or other powerful intelligence agencies snooping on your private communications, you're probably out of luck.

The producers of the new phone, which will be revealed Monday at Mobile World Congress in Barcelona, promise that it's the most secure smartphone on the market. But even they admit there are some enemies you just can't protect from.

"There is no such device that is NSA-proof," said Mike Janke, co-founder and CEO of Silent Circle, in an interview with Mashable, ahead of the launch. "If you are on the terrorist wanted list or a criminal, intelligence services will get into your device... There's no such thing as 100% secure phone."

Silent Circle, a U.S. company that provides secure communications apps, and Geeksphone, a Spanish smartphone startup, formed SGP Technologies, a joint venture based in Switzerland, to produce Blackphone. They had the goal of giving consumers, as well as businesses, something better than what they have now: a phone with privacy and security as core features.

In order to do that, Janke and other Silent Circle co-founders Phil Zimmermann, the creator of email privacy software PGP, and Jon Callas, a respected cryptographer, knew they couldn't offer that without making their own phone.

"We had always thought that in order to have what we would call a better level of security for both individuals and organizations we had to own the ecosystem," Janke said. "And the only way to do that was to own the OS and own the device."

That's why they turned down offers from "large phone makers" to partner with them in the making of a branded Silent Circle phone and instead looked for partners to make the phone themselves, so they could control the whole process. When they met the folks at Geeksphone, Janke said he knew they were the right partner.

Blackphone's main privacy feature will be its custom version of Android called PrivatOS Blackphone's main privacy feature will be its custom version of Android called PrivatOS, which, according to Janke, will allow users to "to control every part of what data their phone is leaking, their calls, their contacts, their web browsing and what any app put on their phone can do."

What that means is that users will be able to control and toggle the permissions for every app they download, according to Janke.

PrivatOS will also include the full suite of Silent Circle encrypted communications apps (with a two-year subscription), 5GB of encrypted cloud storage courtesy of SpiderOak, and anonymous browsing and Virtual Private Network from Disconnect.me.

Janke, as he promised when Blackphone was announced, said they will make PrivatOS open source, but he didn't give a timeframe, only that it will be "as soon as possible."

SGP Technologies also revealed Blakphone's full specs: 2GHz quad-core system-on-a-chip (SoC) processor, 4.7-inch 720p IPS screen, 2GB of RAM, 16GB of storage, a primary 8-megapixel camera with flash, and a 1.3MP front camera. The phone, which will only be sold unlocked, will cost $629.

The first Blackphones, according to SGP Technologies, will ship to customers in June 2014, but the phone is already available for pre-order.

It remains to be seen if any consumers are willing to shell out $629 dollars to protect their privacy,
http://mashable.com/2014/02/24/what-is-blackphone/





A Closer Look At Blackphone, The Android Smartphone That Simplifies Privacy
Natasha Lomas

One of the more interesting devices here at Mobile World Congress is Blackphone: a pro-privacy handset being developed by Spanish startup Geeksphone, in partnership with U.S. security company Silent Circle using a “security-oriented” Android build called PrivatOS.

“We modified some default behaviours of Android and some security flaws that we found and we call that PrivatOS. It’s just small modifications of the Android core,” said Geeksphone founder and CEO Javier Agüera, demoing the device to TechCrunch.

“For example the default crypto engines — there’s a list of crypto engines that the system by default uses… and in the first version of Android the first option was good enough, then they changed it for something that is terrible. So we reverted that to what it was before.”

“PrivatOS is 100% compatible. It doesn’t create any fragmentation at all,” he added. ”Also we made performance improvements.”

The Blackphone will ship in June — with a price-tag of $629 — but the company has already started taking pre-orders via its website, and snagged its first carrier partnership with Dutch mobile operator KPN.

PrivatOS will get direct — and frequent — over-the-top updates from Blackphone, with no carrier bottleneck to negotiate. Which is as it should be; a security-centric phone can’t have users waiting around for a fix to a new software vulnerability.

“This is one of the most important features because if we discover something we will fix it right away,” said Agüera. He added that new PrivatOS features that get developed in future will also be made available to all existing Blackphone users.

The version of the handset on show here in Barcelona is a demo version, with both the handset design and its software set to change before the product ships.

“It’s going to be completely different,” Agüera said, adding that the phone may also get some additional features than those already announced, come launch.

The pro-privacy feature-set that has been detailed so far includes Silent Phone and Silent Text for secure, encrypted telephony and messaging — using Silent Circle’s secure network — so that only you and someone also using a Blackphone or using Silent Circle’s service on another device are privy to the contents of the messages.

Contact data is also protected on Blackphone in the event of the device being lost via a remote wipe feature that does not require a third party cloud service to be involved in the chain. “You have [remote wipe] on other devices but you rely on a third party company with a cloud,” said Agüera. “This company knows where your phone is. We don’t know where your phone is.”

Blackphone does not hold any encryption keys for the secure messaging itself — ergo, it can’t be strong-armed into giving up your secrets by overreaching government agencies since it can’t unencrypt your data. Silent Circle of course shuttered its own email service last August in the wake of the Edward Snowden NSA revelations — saying it was doing so to pre-emptively avoid having to be complicit with NSA spying.

As for local data stored on the phone, the Blackphone user is given the option to encrypt this — an option that is suggested to them right at the start of the device set-up process, underlining the “optimized for privacy” ethos of the whole project.

Secure cloud storage is included in the cost of Blackphone via SpiderOak, one of the partner services bundled with the device. Blackphone buyers get two years free SpiderOak service included.

They also get two years’ of Disconnect (capped at 1GB/month), a secure/non-trackable search product that deploys a VPN to anonymise Internet browsing on Blackphone. Unlimited use of Kismet’s Wi-Fi analyzer product is also bundled into the package. Plus there’s one year of Silent Circle usage to gift to friends/family so you have some people to talk securely with, even if they don’t own a Blackphone.

“Disconnect is a very interesting because, as it’s integrated deep inside you device, it can anonymize all your Wi-Fi browsing and it actually secures the Wi-Fi connection,” noted Agüera, demoing the app running on Blackphone.

“When you click here [to activate Disconnect] everything you do on the Internet goes through a VPN and that affects all the applications on your phone. And we don’t have to root your device or anything, it’s already there. And it’s already enabled for all the applications you will install.”

While normal VPN use slows down a connection, Agüera said the opposite is true when browsing on Blackphone through Disconnect. “What this VPN does is it removes all the crap that the websites put — all the advertising, all the tracking cookies, and it’s faster than a normal connection,” he said.

Notably there’s no ‘Silent Email’ product on the phone. The security of email is clearly problematic at this point. But Agüera told TechCrunch the future intention is for Blackphone to incorporate the open source encrypted messaging protocol currently being developed by Lavabit — under the Dark Mail banner (Silent Circle is a founder member of the Dark Mail alliance).

For now, the focus for Blackphone is clearly on raising the level of privacy the average user experiences by making a suite of security features more accessible and visible to the user. By, for instance, foregrounding switching on local storage encryption by making it part of the set-up mix.

“Blackphone is meant for people from all walks of life who are concerned with privacy,” said Agüera. “It can be very expert people but it can be not so expert people. It can be normal users from the street, or politicians or whatever.

“There’s an activation wizard so that when you take your device out of the box you’ll configure the device as a security expert will do but in a very easy, simple way.”

The activation wizard gives the user a short intro on Blackphone’s pro-privacy ethos, before diving into the set-up process proper — kicking off by requiring them to use at least a PIN or a password to secure their device. Users will also be told how secure their password choice is.

After this, the encryption option is offered which, if selected, secures data stored locally on the device — with the key being the PIN/password the user previously selected.

Access to/activation of the Blackphone’s bundled third party security services is done by the user scanning a QR code to provision the licenses for those services. Blackphone users can also choose not to use these bundled services, if they prefer.

Blackphone owners need to provide a username and email address during the set-up process, which Agüera said is “the only information we keep from you”.

“We keep your nickname [username], which is not your real name unless you want to, and that’s the only information we will ever have about you. If you ordered online or in a shop we will have your shipping details but once we give those to the shipping company we delete that data.”

Agüera argued that the set-up process, which takes less than five minutes, already puts the Blackphone user in a far more secure place than the average smartphone user. “You have taken some steps that 99% of users don’t make — like encrypting the whole file system,” he added.

PrivatOS continues works in the background to push its security-focused agenda, configuring the device with optimal security settings and flagging up app insecurities to the user.

“We’ll disable that you can install apps from non-trusted sources by default, we won’t let you connect to an open network when you’re configuring — we’ll remind you that you need to be using a secure connection. We’ll establish firewall policies,” noted Agüera.

Users are still free to do less-than-secure things on Blackphone, if they choose — such as download Google apps which are obviously going to try to harvest their data. But the phone will at least raise a flag about certain types of apps and services.

“The point of Blackphone is giving you information and choice,” said Agüera. “The point is making a phone that you can use. You can download Angry Birds and we’ll tell you what are the risk you’re taking, what does the Angry Birds application do and then you choose.”

More granular security information is pushed to Blackphone users via a Security Centre hub on the phone. This includes updated briefings on recommended best practices for privacy and security. But the main feature is analysing individual app behaviours to see what they’re accessing, and to give users the ability to block certain actions for individual apps.

“It’s not the permissions that the application says it will do… we actually analyse the application,” said Agüera. “So when you configure your device for the first time we analyse all the default apps so it’s ready to use when you turn it on.”

For example, via the Security Centre, a user can go to a location tab and see all of the apps that use location and then turn off their ability to use personal data, or to harvest your Wi-Fi information.

“As an example, if you go to a sound recorder app you’ll see it records audio. That makes sense. But it also accesses the Internet. ‘Why should a sound recorder access the Internet? I don’t want that. Switch it off’,” explained Agüera. “Some apps may not work after you do this. We’ll tell you — we’ll say ‘ok, this game that you downloaded, it accesses your contacts list — if you turn it off, it’s not going to work. What do you want to do? Uninstall it or not — it’s up to you.”

He also pointed out that some companies are doing Wi-Fi tracking of mobile devices to identify repeat visitors to a particular location, for instance. This can be used, in one example, by coffee shops and restaurants to track visitors and figure out what food/drinks to offer them, based on what they ordered elsewhere.

But it can also have less beneficial, more creepy uses to mobile owners — so Blackphone has incorporated a technology into its device that knows when to kill the Wi-Fi to protect the users’ privacy.

“Imagine you go to an investment bank for a job interview — what will you think if the person who’s interviewing you knows that you also make the same interview at a competitors’ bank a few streets away?” he said.

“That’s a bit creepy and with this technology… developed [by Kismet creator Mike Kershaw] specially for the Blackphone it takes control of the Wi-Fi chip, it learns where your safe locations are — home and work normally — and when you leave your home.. if you’re not in a safe environment it will switch the Wi-Fi off.”

If you use an open Wi-Fi network somewhere — such as at a coffee shop — that location will still be able to gather data on you at this point, but Agüera said Blackphone is working on techniques that will effectively cloak your presence by randomizing the parameters that they use. ”So even if they detect you, the next time they detect you, you’ll be a different person,” he added.

As for the security of the mobile chipset hardware inside the Blackphone itself, that layer is out of the company’s hands to a degree. However Blackphone general manager Toby Weir-Jones told TechCrunch that it doesn’t currently know of any backdoors in the chipsets it’s using, and if it finds any it will commit to telling Blackphone users.

Of course the Blackphone is not ‘NSA proof’, as Weir-Jones reiterated. “Bad guys wanting to talk to each other probably shouldn’t be using a phone at all,” he said.

But he described security as a spectrum — and said the level of privacy protection Blackphone affords its users is far greater than what the average smartphone user can expect.
http://techcrunch.com/2014/02/26/clo...at-blackphone/





Boeing’s Secret ‘Black’ Spy Phone Will Detect Tampering, Self-Destruct if Cracked Open
Todd Bishop

Nearly two years after word leaked about Boeing’s plans to build a secure Android phone, the aerospace giant and defense contractor has quietly filed documents with the FCC for what it’s calling the “Black” phone.

In case there was any doubt, you won’t find this phone at your local electronics store. In fact, some of its features are straight out of a spy novel.

“Boeing’s Black phone will be sold primarily to government agencies and companies engaged in contractual activities with those agencies that are related to defense and homeland security,” a lawyer for the company says in a letter accompanying the filing. “The device will be marketed and sold in a manner such that low level technical and operational information about the product will not be provided to the general public. Detailed technical information distributed at trade shows will be limited or protected by non-disclosure agreements.”

The letter continues, “There are no serviceable parts on Boeing’s Black phone and any attempted servicing or replacing of parts would destroy the product. The Boeing Black phone is manufactured as a sealed device both with epoxy around the casing and with screws, the heads of which are covered with tamper proof covering to identify attempted disassembly.”

And here’s the kicker: “Any attempt to break open the casing of the device would trigger functions that would delete the data and software contained within the device and make the device inoperable.”

The filing was made earlier today, as spotted by the electronics news site myce.

Most of the documents in the filing are confidential, but the limited images do show that the Boeing “Black” has dual SIM cards, and a variety of options for connectivity, including LTE.

We’ve contacted the company on the off chance it wants to say anything more about the device.

Update, 9:55 a.m.: Here is a statement on the new phone from a Boeing spokesperson, who confirmed that it’s running on Android.

Designed to meet the evolving security needs of defense and security customers, Boeing has released a modular smartphone to enable secure access and exchange of critical data and communications on a trusted mobile device.

Boeing Black delivers unique embedded hardware and software security solutions, operating system policy controls, and compatibility with leading mobile device management systems.

Boeing has drawn on its deep expertise in information assurance, advanced technology partners and a U.S.-based manufacturer to provide an innovative, secure and flexible mobile solution.

http://www.geekwire.com/2014/boeings...-cracked-open/





Telecom Firms Mine for Gold in Big Data Despite Privacy Concerns
Leila Abboud

Last year's revelations over the U.S. tapping of phone and internet data gave telecoms firms pause for thought over whether they should sell their "big data" for gain, but the commercial potential could prove irresistible.

Although figures are scarce, analysts think selling data on mobile users' locations, movements, and web browsing habits may grow into a multi billion-dollar market for the business.

Big carriers like Telefonica, Verizon, Orange and Singapore's Starhub warn that they are only just starting to test the waters and pledge to market only anonymous crowd information to protect customers.

They are also promoting their big data products as being helpful well beyond the realms of advertising - for credit card companies wanting to detect fraud, for ambulance operators plotting routes to avoid traffic, and for public health officials responding to outbreaks of flu.

But while some carriers have decided to press on with developing their data business since former U.S. National Security Agency contractor Edward Snowden's disclosures, others have started pitching themselves as their customers' best allies in seeking to hide from any prying eyes.

Verizon's Precision Marketing Insights product, which offers businesses statistics about mobile users in a given area, was in commercial trials with sports teams and billboard owners when the Snowden allegations hit. After fresh debate by top management and the board on whether selling even anonymous data on customers was a good move, the company decided to go ahead with it, said Colson Hillier, a Verizon executive.

"Privacy is a hot button issue right now, but we think we can take a leadership stance," Hillier said. "It's not a reputational risk if you do it right and are pro-active in communication with consumers and policy makers."

Other telecom companies took the opposite tack, casting themselves as better guardians of customer data than internet companies like Google, which use it to target advertising.

Deutsche Telekom, for example, last year launched an encrypted "Email made in Germany" service and a secure communications link for small businesses to ward off hackers or spooks. "Protection of the private sphere is a valuable commodity," its CEO said.

DATA TROVE

As they shift to treating customer data as an asset to be mined instead of a mere incidental to running networks, telecom operators must tread carefully.

People are used to giving Facebook and Google their personal information and generally accept that the trade-off for free services is that their data is used to target ads. But people could be irked if tracking extends into the real world, said a telecoms industry consultant who declined to be named because of client sensitivities.

Surveys show people trust telecom providers more than internet companies to safeguard their personal data, although overall confidence in companies was very low. In a poll commissioned by Orange, 41 percent of respondents said they trust mobile carriers to keep their information safe compared with 20 percent for social networks like Facebook or Twitter.

"All it takes is one mis-step on data monetization for some customers to decide they don't want to stay with you," the consultant said.

To collect the data, telecom operators place probes in mobile networks to capture the millions of records per day generated when people send texts, make calls and surf the web. The data is stripped of personal information then pooled so it can be analyzed for patterns useful for business or governments. It identifies a person's location to about 200 to 300 meters.

Privacy advocates and regulators say that if the data is anonymous and about groups not individuals, it is legal for telecom companies to sell it.

Meanwhile companies are taking different approaches to user consent. Orange collects data for its Flux Vision data product from French mobile users without offering a way for them to opt-out, as does Telefonica's equivalent service.

Verizon told customers in 2011 it could use their data and now includes 100 million retail mobile customers by default, though they can opt out online.

More intrusive programs that drive location-based advertising to people's mobiles usually require users to agree and some companies offer rewards in loyalty schemes in exchange.

FINDING THE MARKET

In one project, Telefonica worked with Morrisons, Britain's fourth-largest supermarket chain, to study where residents of an area in southwest England did their food.

It parsed data on where shoppers at Morrisons' stores came from and did the same for nearby rival stores, so as to identify which households should be targeted for promotions.

Out of 11 million households in the area, Telefonica advised Morrisons to send coupons to 400,000 of them, leading to a 150 percent rise in store visits without a revenue drop-off that accompanies some discount schemes.

"We spotted postal sectors where there was a genuine battle ground between Morrisons stores and their competitors," said Phil Douty, who runs Telefonica's Smart Steps. "This was the most fertile ground for their marketing efforts."

Smart Steps has dozens of clients in Britain, said Douty, and the firm will start pilots in Brazil this year. Telefonica speaks to regulators early so as to avoid a repeat of a flap in Germany last year in which data protection regulators slammed the program before it was even introduced there.

Yet turning a data trove into a product companies will buy is not easy for telecoms carriers, since they do not know exactly what transportation, manufacturing, or travel companies actually want in terms of data, telecom executives admit.

Some are turning to partners such as marketing specialists, advertising agencies or consultants like IBM.

Verizon's Hillier said the carrier is now in talks with advertising technology companies and other possible partners to help with distribution and aimed to have a range of big data products on the market in the second quarter.

German software specialist SAP is also in talks with a number of telecom operators to have their data feed into a centralized platform that businesses or advertisers would buy subscriptions to access. Revenue would be shared between SAP and the telecom operator.

(Additional reporting by Jeremy Wagstaff in Singapore and Harro Ten Wolde in Frankfurt; Editing by David Holmes and Greg Mahlich)
http://www.reuters.com/article/2014/...A1M09F20140223





Why Civil Rights Groups are Warning Against ‘Big Data’
Brian Fung

The backlash against the government's use of bulk phone records for intelligence purposes has been led mostly by technologists used to speaking the language of privacy. But a new push by civil rights organizations to challenge "big data" — both in the public and private sectors — is highlighting how the abuse of data can uniquely affect disadvantaged minorities.

More than a dozen groups are backing a set of principles targeting the widespread use of data in law enforcement, hiring and commerce. The list includes some of the country's biggest civil rights organizations, such as the NAACP and the National Council of La Raza.

The document, obtained by The Washington Post, underscores what the signers feel is a threat to racial and religious minorities, vulnerable seniors and other groups who may be unfairly targeted due to the increasing collection of data that could allow for discrimination. The principles commit supporters to work toward ending "high-tech profiling," the addition of built-in protections in computerized decision-making systems, putting pressure on commercial entities for greater data disclosures and "protect[ing] people from inaccurate data," among other steps.

"Big data has supercharged the potential for discrimination by corporations and the government in ways that victims don’t even see," said Wade Henderson, chief executive of the Leadership Conference on Civil and Human Rights. "This threatens to undermine the core civil rights protections guaranteed by the law in ways that were unimaginable even in the most recent past."

In 2011, an Associated Press investigation revealed a sophisticated program by New York City police to spy on American Muslims. Later reports revealed that officers singled out mosques by collecting attendees' license plate numbers and plotting their locations on a map. The Department of Homeland Security's more recent plan to build a national license plate database — and the outcry it provoked — suggests that minorities may be especially vulnerable to what Americans would perceive as a violation of privacy.

The concern isn't just racial discrimination, civil rights advocates say, citing a Senate report on credit reporting agencies and third-party data vendors. The information collected by these businesses leads to the creation of demographic profiles, such as "Ethnic Second-City Strugglers" and "Zero Mobility," stereotypical categories that could be used to market predatory financial instruments -- or deny access to premium ones -- to underprivileged groups.

While government and commercial surveillance potentially affect all Americans, minorities face those risks at disproportionate rates, according to the coalition's data principles.

The new push raises questions about whether big data shoud require enhanced protections for minorities in particular, on top of the general privacy protections afforded to all Americans. But it also reflects a convergence of interests among civil rights activists and technologists, two groups that have clashed in the past. For example, the NAACP and other like-minded organizations backed a 2010 merger between Comcast and NBC-Universal, arguing that the deal would improve employment among minorities. Lining up on the other side of the deal was the consumer group Free Press, which called the cable company's attempt at vertical integration a "Pandora's box." In a sign of unity, Free Press is among the signatories of the privacy principles issued Thursday.

While the link between big data and civil rights may not be immediately clear, independent technology analyst David Robinson said analytics is all about targeting and separating one type of individual from another.

"If you start with issues of big data and ask, 'What are the civil rights implications?' it feels not obvious," he said. "But if you start with core civil rights issues and ask, 'How is big data creeping in?' It's all over the place."
http://www.washingtonpost.com/blogs/...inst-big-data/





How Covert Agents Infiltrate the Internet to Manipulate, Deceive, and Destroy Reputations
Glenn Greenwald

One of the many pressing stories that remains to be told from the Snowden archive is how western intelligence agencies are attempting to manipulate and control online discourse with extreme tactics of deception and reputation-destruction. It’s time to tell a chunk of that story, complete with the relevant documents.

Over the last several weeks, I worked with NBC News to publish a series of articles about “dirty trick” tactics used by GCHQ’s previously secret unit, JTRIG (Joint Threat Research Intelligence Group). These were based on four classified GCHQ documents presented to the NSA and the other three partners in the English-speaking “Five Eyes” alliance. Today, we at the Intercept are publishing another new JTRIG document, in full, entitled “The Art of Deception: Training for Online Covert Operations.”

By publishing these stories one by one, our NBC reporting highlighted some of the key, discrete revelations: the monitoring of YouTube and Blogger, the targeting of Anonymous with the very same DDoS attacks they accuse “hacktivists” of using, the use of “honey traps” (luring people into compromising situations using sex) and destructive viruses. But, here, I want to focus and elaborate on the overarching point revealed by all of these documents: namely, that these agencies are attempting to control, infiltrate, manipulate, and warp online discourse, and in doing so, are compromising the integrity of the internet itself.

Among the core self-identified purposes of JTRIG are two tactics: (1) to inject all sorts of false material onto the internet in order to destroy the reputation of its targets; and (2) to use social sciences and other techniques to manipulate online discourse and activism to generate outcomes it considers desirable. To see how extremist these programs are, just consider the tactics they boast of using to achieve those ends: “false flag operations” (posting material to the internet and falsely attributing it to someone else), fake victim blog posts (pretending to be a victim of the individual whose reputation they want to destroy), and posting “negative information” on various forums. Here is one illustrative list of tactics from the latest GCHQ document we’re publishing today:

Other tactics aimed at individuals are listed here, under the revealing title “discredit a target”:

Then there are the tactics used to destroy companies the agency targets:

GCHQ describes the purpose of JTRIG in starkly clear terms: “using online techniques to make something happen in the real or cyber world,” including “information ops (influence or disruption).”

Critically, the “targets” for this deceit and reputation-destruction extend far beyond the customary roster of normal spycraft: hostile nations and their leaders, military agencies, and intelligence services. In fact, the discussion of many of these techniques occurs in the context of using them in lieu of “traditional law enforcement” against people suspected (but not charged or convicted) of ordinary crimes or, more broadly still, “hacktivism”, meaning those who use online protest activity for political ends.

The title page of one of these documents reflects the agency’s own awareness that it is “pushing the boundaries” by using “cyber offensive” techniques against people who have nothing to do with terrorism or national security threats, and indeed, centrally involves law enforcement agents who investigate ordinary crimes:

No matter your views on Anonymous, “hacktivists” or garden-variety criminals, it is not difficult to see how dangerous it is to have secret government agencies being able to target any individuals they want – who have never been charged with, let alone convicted of, any crimes – with these sorts of online, deception-based tactics of reputation destruction and disruption. There is a strong argument to make, as Jay Leiderman demonstrated in the Guardian in the context of the Paypal 14 hacktivist persecution, that the “denial of service” tactics used by hacktivists result in (at most) trivial damage (far less than the cyber-warfare tactics favored by the US and UK) and are far more akin to the type of political protest protected by the First Amendment.

The broader point is that, far beyond hacktivists, these surveillance agencies have vested themselves with the power to deliberately ruin people’s reputations and disrupt their online political activity even though they’ve been charged with no crimes, and even though their actions have no conceivable connection to terrorism or even national security threats. As Anonymous expert Gabriella Coleman of McGill University told me, “targeting Anonymous and hacktivists amounts to targeting citizens for expressing their political beliefs, resulting in the stifling of legitimate dissent.” Pointing to this study she published, Professor Coleman vehemently contested the assertion that “there is anything terrorist/violent in their actions.”

Government plans to monitor and influence internet communications, and covertly infiltrate online communities in order to sow dissension and disseminate false information, have long been the source of speculation. Harvard Law Professor Cass Sunstein, a close Obama adviser and the White House’s former head of the Office of Information and Regulatory Affairs, wrote a controversial paper in 2008 proposing that the US government employ teams of covert agents and pseudo-”independent” advocates to “cognitively infiltrate” online groups and websites, as well as other activist groups.

Sunstein also proposed sending covert agents into “chat rooms, online social networks, or even real-space groups” which spread what he views as false and damaging “conspiracy theories” about the government. Ironically, the very same Sunstein was recently named by Obama to serve as a member of the NSA review panel created by the White House, one that – while disputing key NSA claims – proceeded to propose many cosmetic reforms to the agency’s powers (most of which were ignored by the President who appointed them).

But these GCHQ documents are the first to prove that a major western government is using some of the most controversial techniques to disseminate deception online and harm the reputations of targets. Under the tactics they use, the state is deliberately spreading lies on the internet about whichever individuals it targets, including the use of what GCHQ itself calls “false flag operations” and emails to people’s families and friends. Who would possibly trust a government to exercise these powers at all, let alone do so in secret, with virtually no oversight, and outside of any cognizable legal framework?

Then there is the use of psychology and other social sciences to not only understand, but shape and control, how online activism and discourse unfolds. Today’s newly published document touts the work of GCHQ’s “Human Science Operations Cell,” devoted to “online human intelligence” and “strategic influence and disruption”:

Under the title “Online Covert Action”, the document details a variety of means to engage in “influence and info ops” as well as “disruption and computer net attack,” while dissecting how human beings can be manipulated using “leaders,” “trust,” “obedience” and “compliance”:

The documents lay out theories of how humans interact with one another, particularly online, and then attempt to identify ways to influence the outcomes – or “game” it:

We submitted numerous questions to GCHQ, including: (1) Does GCHQ in fact engage in “false flag operations” where material is posted to the Internet and falsely attributed to someone else?; (2) Does GCHQ engage in efforts to influence or manipulate political discourse online?; and (3) Does GCHQ’s mandate include targeting common criminals (such as boiler room operators), or only foreign threats?

As usual, they ignored those questions and opted instead to send their vague and nonresponsive boilerplate: “It is a longstanding policy that we do not comment on intelligence matters. Furthermore, all of GCHQ’s work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate, and that there is rigorous oversight, including from the Secretary of State, the Interception and Intelligence Services Commissioners and the Parliamentary Intelligence and Security Committee. All our operational processes rigorously support this position.”

These agencies’ refusal to “comment on intelligence matters” – meaning: talk at all about anything and everything they do – is precisely why whistleblowing is so urgent, the journalism that supports it so clearly in the public interest, and the increasingly unhinged attacks by these agencies so easy to understand. Claims that government agencies are infiltrating online communities and engaging in “false flag operations” to discredit targets are often dismissed as conspiracy theories, but these documents leave no doubt they are doing precisely that.

Whatever else is true, no government should be able to engage in these tactics: what justification is there for having government agencies target people – who have been charged with no crime – for reputation-destruction, infiltrate online political communities, and develop techniques for manipulating online discourse? But to allow those actions with no public knowledge or accountability is particularly unjustifiable.
https://firstlook.org/theintercept/2...-manipulation/





Yahoo Webcam Images from Millions of Users Intercepted by GCHQ
Spencer Ackerman and James Ball

• Optic Nerve program collected Yahoo webcam images in bulk
• 1.8m users targeted by UK agency in six-month period alone
• Yahoo: 'A whole new level of violation of our users' privacy'
• Material included large quantity of sexually explicit images

Britain's surveillance agency GCHQ, with aid from the US National Security Agency, intercepted and stored the webcam images of millions of internet users not suspected of wrongdoing, secret documents reveal.

GCHQ files dating between 2008 and 2010 explicitly state that a surveillance program codenamed Optic Nerve collected still images of Yahoo webcam chats in bulk and saved them to agency databases, regardless of whether individual users were an intelligence target or not.

In one six-month period in 2008 alone, the agency collected webcam imagery – including substantial quantities of sexually explicit communications – from more than 1.8 million Yahoo user accounts globally.

Yahoo reacted furiously to the webcam interception when approached by the Guardian. The company denied any prior knowledge of the program, accusing the agencies of "a whole new level of violation of our users' privacy".

GCHQ does not have the technical means to make sure no images of UK or US citizens are collected and stored by the system, and there are no restrictions under UK law to prevent Americans' images being accessed by British analysts without an individual warrant.

The documents also chronicle GCHQ's sustained struggle to keep the large store of sexually explicit imagery collected by Optic Nerve away from the eyes of its staff, though there is little discussion about the privacy implications of storing this material in the first place.

Optic Nerve, the documents provided by NSA whistleblower Edward Snowden show, began as a prototype in 2008 and was still active in 2012, according to an internal GCHQ wiki page accessed that year.

The system, eerily reminiscent of the telescreens evoked in George Orwell's 1984, was used for experiments in automated facial recognition, to monitor GCHQ's existing targets, and to discover new targets of interest. Such searches could be used to try to find terror suspects or criminals making use of multiple, anonymous user IDs.

Rather than collecting webcam chats in their entirety, the program saved one image every five minutes from the users' feeds, partly to comply with human rights legislation, and also to avoid overloading GCHQ's servers. The documents describe these users as "unselected" – intelligence agency parlance for bulk rather than targeted collection.

One document even likened the program's "bulk access to Yahoo webcam images/events" to a massive digital police mugbook of previously arrested individuals.

"Face detection has the potential to aid selection of useful images for 'mugshots' or even for face recognition by assessing the angle of the face," it reads. "The best images are ones where the person is facing the camera with their face upright."

The agency did make efforts to limit analysts' ability to see webcam images, restricting bulk searches to metadata only.

However, analysts were shown the faces of people with similar usernames to surveillance targets, potentially dragging in large numbers of innocent people. One document tells agency staff they were allowed to display "webcam images associated with similar Yahoo identifiers to your known target".

Optic Nerve was based on collecting information from GCHQ's huge network of internet cable taps, which was then processed and fed into systems provided by the NSA. Webcam information was fed into NSA's XKeyscore search tool, and NSA research was used to build the tool which identified Yahoo's webcam traffic.

Bulk surveillance on Yahoo users was begun, the documents said, because "Yahoo webcam is known to be used by GCHQ targets".

Programs like Optic Nerve, which collect information in bulk from largely anonymous user IDs, are unable to filter out information from UK or US citizens. Unlike the NSA, GCHQ is not required by UK law to "minimize", or remove, domestic citizens' information from its databases. However, additional legal authorisations are required before analysts can search for the data of individuals likely to be in the British Isles at the time of the search.

There are no such legal safeguards for searches on people believed to be in the US or the other allied "Five Eyes" nations – Australia, New Zealand and Canada.

GCHQ insists all of its activities are necessary, proportionate, and in accordance with UK law.

The documents also show that GCHQ trialled automatic searches based on facial recognition technology, for people resembling existing GCHQ targets: "[i]f you search for similar IDs to your target, you will be able to request automatic comparison of the face in the similar IDs to those in your target's ID".

The undated document, from GCHQ's internal wiki information site, noted this capability was "now closed … but shortly to return!"

The privacy risks of mass collection from video sources have long been known to the NSA and GCHQ, as a research document from the mid-2000s noted: "One of the greatest hindrances to exploiting video data is the fact that the vast majority of videos received have no intelligence value whatsoever, such as pornography, commercials, movie clips and family home movies."

Sexually explicit webcam material proved to be a particular problem for GCHQ, as one document delicately put it: "Unfortunately … it would appear that a surprising number of people use webcam conversations to show intimate parts of their body to the other person. Also, the fact that the Yahoo software allows more than one person to view a webcam stream without necessarily sending a reciprocal stream means that it appears sometimes to be used for broadcasting pornography."

The document estimates that between 3% and 11% of the Yahoo webcam imagery harvested by GCHQ contains "undesirable nudity". Discussing efforts to make the interface "safer to use", it noted that current "naïve" pornography detectors assessed the amount of flesh in any given shot, and so attracted lots of false positives by incorrectly tagging shots of people's faces as pornography.

GCHQ did not make any specific attempts to prevent the collection or storage of explicit images, the documents suggest, but did eventually compromise by excluding images in which software had not detected any faces from search results – a bid to prevent many of the lewd shots being seen by analysts.

The system was not perfect at stopping those images reaching the eyes of GCHQ staff, though. An internal guide cautioned prospective Optic Nerve users that "there is no perfect ability to censor material which may be offensive. Users who may feel uncomfortable about such material are advised not to open them".

It further notes that "under GCHQ's offensive material policy, the dissemination of offensive material is a disciplinary offence".

Once collected, the metadata associated with the videos can be as valuable to the intelligence agencies as the images themselves.

It is not fully clear from the documents how much access the NSA has to the Yahoo webcam trove itself, though all of the policy documents were available to NSA analysts through their routine information-sharing. A previously revealed NSA metadata repository, codenamed Marina, has what the documents describe as a protocol class for webcam information.

In its statement to the Guardian, Yahoo strongly condemned the Optic Nerve program, and said it had no awareness of or involvement with the GCHQ collection.

"We were not aware of, nor would we condone, this reported activity," said a spokeswoman. "This report, if true, represents a whole new level of violation of our users' privacy that is completely unacceptable, and we strongly call on the world's governments to reform surveillance law consistent with the principles we outlined in December.

"We are committed to preserving our users' trust and security and continue our efforts to expand encryption across all of our services."

Yahoo has been one of the most outspoken technology companies objecting to the NSA's bulk surveillance. It filed a transparency lawsuit with the secret US surveillance court to disclose a 2007 case in which it was compelled to provide customer data to the surveillance agency, and it railed against the NSA's reported interception of information in transit between its data centers.

The documents do not refer to any specific court orders permitting collection of Yahoo's webcam imagery, but GCHQ mass collection is governed by the UK's Regulation of Investigatory Powers Act, and requires certification by the foreign secretary, currently William Hague.

The Optic Nerve documentation shows legalities were being considered as new capabilities were being developed. Discussing adding automated facial matching, for example, analysts agreed to test a system before firming up its legal status for everyday use.

"It was agreed that the legalities of such a capability would be considered once it had been developed, but that the general principle applied would be that if the accuracy of the algorithm was such that it was useful to the analyst (ie, the number of spurious results was low, then it was likely to be proportionate)," the 2008 document reads.

The document continues: "This is allowed for research purposes but at the point where the results are shown to analysts for operational use, the proportionality and legality questions must be more carefully considered."

Optic Nerve was just one of a series of GCHQ efforts at biometric detection, whether for target recognition or general security.

While the documents do not detail efforts as widescale as those against Yahoo users, one presentation discusses with interest the potential and capabilities of the Xbox 360's Kinect camera, saying it generated "fairly normal webcam traffic" and was being evaluated as part of a wider program.

Documents previously revealed in the Guardian showed the NSA were exploring the video capabilities of game consoles for surveillance purposes.

Microsoft, the maker of Xbox, faced a privacy backlash last year when details emerged that the camera bundled with its new console, the Xbox One, would be always-on by default.

Beyond webcams and consoles, GCHQ and the NSA looked at building more detailed and accurate facial recognition tools, such as iris recognition cameras – "think Tom Cruise in Minority Report", one presentation noted.

The same presentation talks about the strange means the agencies used to try and test such systems, including whether they could be tricked. One way of testing this was to use contact lenses on detailed mannequins.

To this end, GCHQ has a dummy nicknamed "the Head", one document noted.

In a statement, a GCHQ spokesman said: "It is a longstanding policy that we do not comment on intelligence matters.

"Furthermore, all of GCHQ's work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate, and that there is rigorous oversight, including from the secretary of state, the interception and intelligence services commissioners and the Parliamentary Intelligence and Security Committee.

"All our operational processes rigorously support this position."

The NSA declined to respond to specific queries about its access to the Optic Nerve system, the presence of US citizens' data in such systems, or whether the NSA has similar bulk-collection programs.

However, NSA spokeswoman Vanee Vines said the agency did not ask foreign partners such as GCHQ to collect intelligence the agency could not legally collect itself.

"As we've said before, the National Security Agency does not ask its foreign partners to undertake any intelligence activity that the US government would be legally prohibited from undertaking itself," she said.

"The NSA works with a number of partners in meeting its foreign intelligence mission goals, and those operations comply with US law and with the applicable laws under which those partners operate.

"A key part of the protections that apply to both US persons and citizens of other countries is the mandate that information be in support of a valid foreign intelligence requirement, and comply with US Attorney General-approved procedures to protect privacy rights. Those procedures govern the acquisition, use, and retention of information about US persons."
http://www.theguardian.com/world/201...internet-yahoo





Feds Refuse to Release Public Comments on NSA Reform — Citing Privacy
David Kravets

The Obama administration has received 28 proposals from corporations with ideas for managing the NSA’s massive database of U.S. phone call metadata. But don’t expect to see the proposals anytime soon. The government says it won’t release a word.

At issue is President Obama’s most significant NSA reform: his plan to take the trillion-plus records continuously gathered on American’s phone calls out of the NSA’s hands and give it to a third-party, and making it accessible to the government only through an order from a secret tribunal.

The plan, based on a recommendation from an NSA reform panel Obama commissioned, would put a trove of information about American citizens at arm’s length from the government, while maintaining the functionality of a program that came to light amid leaks by NSA whistleblower Edward Snowden.

The details of who would manage the database and how the NSA’s access would be controlled have not yet been hashed out. To that end, on Feb. 12, James Clapper, who heads the Office of the Director of National Intelligence (ODNI), closed a week-long process in which he urged U.S. companies to provide “information about existing commercially available capabilities” to house and protect telephone metadata while allowing NSA access via court orders.

The Request For Information, or RFI as it is known, “is not soliciting information on research efforts nor is it soliciting bids from sources seeking to serve as third-party data storage providers.”

The RFI informs those responding to “ensure that the submitted material has been approved for public release,” which, naturally, led WIRED to believe that the material would be released to the public. Two weeks ago we asked Clapper’s office for submissions received under the RFI. We were told to file a Freedom of Information Act request. We did so.

We got our response Wednesday: A blanket denial. (.pdf) Jennifer Hudson, the ODNI chief FOIA officer, wrote WIRED saying the agency located 28 documents “responsive to your request,” but:

Upon review, ODNI has determined the material should be withheld in its entirety in accordance with FOIA exemptions (b)(4) and (b)(6). Exemption (b)(4) applies to confidential proprietary information involving trade secrets and commercial data obtained from a company which, if released, would result in competitive hard to the company. Exemption (b)(6) applies to information which, if released, would constitute a clearly unwarranted invasion of personal privacy of individuals.

At the outset of his first term, Obama promised “transparency and open government.” He specifically pledged “to provide greater transparency to our surveillance activities” in reforming the NSA during his globally televised speech on Jan. 17.

We’re immediately appealing the FOIA denial. We’ll keep you posted.
http://www.wired.com/threatlevel/201...tadata-reform/





Tor is Building an Anonymous Instant Messenger
Patrick Howell O'Neill

Forget the $16 billion romance between Facebook and WhatsApp. There’s a new messaging tool worth watching.

Tor, the team behind the world’s leading online anonymity service, is developing a new anonymous instant messenger client, according to documents produced at the Tor 2014 Winter Developers Meeting in Reykjavík, Iceland.

The Tor Instant Messaging Bundle (TIMB) is set to work with the open-source InstantBird messenger client in experimental builds released to the public by March 31, 2014. The developers aim to build in encrypted off-the-record chatting and then bundle the client with the general Tor Launcher in the following months.

Pidgin, an older and more popular open-source chat client, was originally considered to be the foundation of the TIMB but was thrown out in favor of InstantBird. However, Tor still plans to hire independent security contractors to audit the new software and test its mettle so that “people in countries where communication for the purpose of activism is met with intimidation, violence, and prosecution will be able to avoid the scrutiny of criminal cartels, corrupt officials, and authoritarian governments.”

Over the long term, TIMB will likely become the messenger of choice for Tor users. Software such as TorChat and BitMessage already have significant userbases and smart advocates, but with the full weight of the Tor Launcher and team behind it, there’s little reason to imagine TIMB won’t succeed.

The creation of the TIMB is yet another step in what has been a years-long improvement in Tor software. A decade ago, the anonymity program was available only to tech-savvy users who knew enough to dive into their operating system’s command line.

Now, the Tor user interface has progressed to the point that almost anyone can anonymously surf the Web with just a few clicks. If TIMB follows in those footsteps, it will be another powerful anonymity tool at the fingertips of of both the tech literate and humanity at large.

The Tor Project, a $2 million per year nonprofit consisting of 30 developers spread out over 12 countries, is pushing forward on TIMB as part of an overall initiative to make Tor even easier to use for the average person. Also in the pipeline are more localized support staff as well as “point-click-publish Hidden Services,” to make it extremely easy for anyone to create a Deep Web site.

When it comes to the sort of security that Tor provides, ease of use is of paramount importance. Many users can’t or won’t take the time to learn about encryption programs like Pretty Good Privacy (PGP), leaving themselves open to surveillance.

Even many patrons of the Deep Web black market Silk Road don’t bother with the simplest encryption tools.

“I post my PGP key everywhere and beg my customers to use it but the majority don't..... including for some pretty big orders!,” popular Silk Road ecstasy vendor DrMDA wrote late last year.

“Something like 80 percent of SR users don't use PGP,” wrote astor, another longtime Silk Roader.

Many people need encryption served up to them on silver platter to even consider it. TIMB is the waiter that plans to deliver.
http://www.dailydot.com/technology/t...saging-bundle/
















Until next week,

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Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved.


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