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Old 06-07-06, 01:09 PM   #1
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Join Date: May 2001
Location: New England
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Default Peer-To-Peer News - The Week In Review - July 8th, '06

"It's quite possibly the most important privacy and free speech issue in the 21st century. We are trying to force the government to follow the law. We are trying to force the phone company to follow the law." – Kevin Bankston

"The RIAA's push to buy into these services strikes me as protection money. Buy in and we'll protect you from our lawsuits." – Kenneth C. Green

"People still want to have a music collection. Music listeners like owning their music, not renting." – Bill Goodwin

"The number of students using [for-pay] Napster at George Washington University dropped by more than half between the first and second year, from one-third to one-seventh of eligible users." – Nick Timiraos

"The movies are repetitive. It seems like there's about eight stories. It's like I'm seeing the same movie, almost." – Daniel Andres, 17

"Nobody builds servers as unreliably as we do." – Urs Hölzle

"Some of the teachers were like, 'Holy cow, look at this!'" – Francis Lunney

Independence Day

I'd like to take this time to thank the French for giving us such a nice statue, and for listening to Ben Franklin and saving our colonial asses from those foppy British fucktards and our own neighbors who were their allies. Sure, now we hate them and love the Brits and all and that would normally be pretty unsportsmanlike but we returned the favor a few times during the last century at great cost to our young soldiers, and really now, they slipped us Vietnam, so we're even. Or will be as soon as we give them a big monument too. I was thinking maybe a giant Ferris wheel of Brie…

So I went to our annual fireworks show this week and it was swell thanks to the Chinese and the Italians. For fun I normally try to stand as close as I can to the rockets and then dodge the falling embers but this year I stayed well back. It was more relaxing although I almost got clipped by a speeding Kia. I enjoyed the picnics with the Mexican beers and the German sausages and the Australian hamburgers though I must say I've been eating a mite too well this week. Afterwards it was fun showing movies in the backyard. In the spirit of things I grabbed the 1976 King Kong but it was overdubbed in Russian – those crazy Ivans talked right over the English dialog like they were at the UN or something. That would've been tough going for the neighborhood kids. Many are new arrivals to America and can barely grasp English let alone Russian and English at the same time so thank goodness for high speed Internet! I did a quick search on Sweden's Mininova for New Zealander Peter Jackson's version and the nighttime screenings were saved.

But how about that shuttle launch? It was truly fourth-of-July perfect. I was so proud to be American - and so glad they didn't have to use the runway in Spain for a crash landing. Here's hoping the shuttle's Canadian arm doesn't turn up any bad tiles, otherwise they'll be stuck in that International Space Station for months. I'm keeping my fingers crossed but it looks good so far. Not like those North Koreans whose big new missile fell in the water. With stupid enemies like that who needs allies anyway? Gosh it’s been great celebrating our independence!



July 8th, ’06

Download Torrents at 100Mbps!
Chris Brunner

Worried about the RIAA or MPAA tracking your BitTorrent activity? Wish you could share back to the community, but afraid of being caught?

A shell free service called Silence is Defeat is offering the ability to use their 100Mbit full duplex connection to download any torrent you want. Since their connection is full-duplex and uncapped, torrents will download faster, and you can seed your downloaded torrents without giving away your IP address!

Here's how it works:

1. Sign up for a free shell at http://silenceisdefeat.org/ Instant lifetime activation through PayPal costs $1, or you can sign up for free via postal mail.
2. Use an SSH client like PuTTY to connect to your new shell account.
3. At the shell prompt, simply type "bt " and then the URL of the turrent you want to download. Don't use quotes. For example, bt http://example.com/thistorrent.torrent. Your turrent will nearly instantly download at incredible speeds. And the curses (simi-graphical) output will give you a readout of the progress. Once it's downloaded, you'll begin sharing, but the IP you're sharing from will be the IP of Silence is Defeat's server, not the IP of your home computer.
4. Download the file from SD and enjoy! I prefer an SFTP client like WinSCP, but you could just navigate to your public_html directory (type "cd publich_html" without quotes when you first connect to the shell prompt) and then download the torrent'd file at http://silenceisdefeat.org/~yourusername/ instead, which may be easier for those who don't want to use an SFTP client.

If you need any help, simply join #sd on irc.freenode.org - those guys are always very willing to help, no matter what the problem is.

Oh, and your SSH and SFTP traffic is completely encrypted, so not even your ISP will know what you're doing, and Silence is Defeat doesn't log your activity!

Enjoy =]


µTorrent Upgrade

V 1.6 just released. With all the reds and greens they've created a little Christmas Cadeau but it works fine in the 4 days I’ve been running it. The menus are simpler, and with its improved cache management it might even be faster.

Free, Legal and Ignored

Colleges Offer Music Downloads, But Their Students Just Say No; Too Many Strings Attached
Nick Timiraos

As a student at Cornell University, Angelo Petrigh had access to free online music via a legal music-downloading service his school provided. Yet the 21-year-old still turned to illegal file-sharing programs.

The reason: While Cornell's online music program, through Napster, gave him and other students free, legal downloads, the email introducing the service explained that students could keep their songs only until they graduated. "After I read that, I decided I didn't want to even try it," says Mr. Petrigh, who will be a senior in the fall at the Ithaca, N.Y., school.

College students don't turn down much that's free. But when it comes to online music, even free hasn't been enough to persuade many students to use such digital download services as Napster, Rhapsody, Ruckus and Cdigix. As a result, some schools have dropped their services, and others are considering doing so or have switched to other providers.

To stop students from pirating music, more than 120 colleges and universities have tried providing free or subsidized access to the legal subscription services over campus networks in the past few years. About 7% of all four-year schools and 31% of private research universities provided one of the legal downloading services, according to a 2005 survey of 500 schools by the Campus Computing Project, a nonprofit that studies how colleges use information technology. Universities typically pay for the services, some with private grants and others through student fees. While a typical monthly subscription to Napster is $9.95, the schools have been able to cut special deals, funded in part by record companies.

Purdue University officials say that lower-than-expected demand among its students stems in part from all the frustrating restrictions that accompany legal downloading. Students at the West Lafayette, Ind., school can play songs free on their laptops but have to pay to burn songs onto CDs or load them onto a digital music device.

There's also the problem of compatibility: The services won't run on Apple Computer Inc. computers, which are owned by 19% of college students, according to a 2006 survey of 1,200 students by the research group Student Monitor. In addition, the files won't play on Apple iPods, which are owned by 42% of college students, according to the survey.

"People still want to have a music collection. Music listeners like owning their music, not renting," says Bill Goodwin, 21, who graduated in May from the University of Southern California in Los Angeles. USC decided last year that it was finished with Napster after fewer than 500 students signed up, and it moved to Ruckus, hoping students would find that service more appealing.

Meanwhile, both Cornell and Purdue will no longer offer their students free music next year. An anonymous donor had paid for Cornell to offer Napster for two years, but the student government passed on a chance to keep the service by charging students a fee. "There hasn't been an overwhelming response to keep it," says Kwame Thomison, Cornell's student assembly president. "Students that enjoyed the service enough can pay for it themselves."

The number of students using Napster at George Washington University dropped by more than half between the first and second year, from one-third to one-seventh of eligible users. Alexa Kim, who oversees the Washington school's program, attributes the higher use at the start to the service's novelty and to press attention during the inaugural year. She adds that the university hasn't decided if it will renew its contract.

Colleges started offering the services in part because they were concerned that the recording industry might try to hold them liable for their students' copyright violations. So far no schools have been sued by the recording industry.

Universities also have another reason for reducing illegal downloading: The large amount of bandwidth used by movie and music downloads chokes universities' computer networks. The subscription services complement university filtering programs that can identify users who are misusing school networks. "The bandwidth that I recovered saved us $75,000 a year in network costs," says Matthew Jett Hall, assistant vice chancellor at Vanderbilt University in Nashville, Tenn. The university's Napster program requires users to pay $2 a month for unlimited downloads.

The Recording Industry Association of America says it has been happy with the progress the program has made so far. "Universities tend to move not all that quick to do things like this, so it's really quite an achievement," says RIAA President Cary Sherman.

Some schools that don't offer free downloads dismiss the subscription services as too costly for the results they achieve, especially because so many students now buy music from Apple's iTunes Music Store. "We were not in a position to offer an alternative to iTunes," says Lev Gonick, the chief information officer at Case Western Reserve University in Cleveland. "The alternatives looked like they had more sizzle than steak."

There is also little consensus among administrators about how successful the services have been in eliminating piracy. Although some say complaints from the recording industry have dropped sharply, no one can tell if that's because fewer students are engaging in illegal file-sharing or if the industry simply doesn't want to go after schools that are spending money to combat the problem. "The RIAA's push to buy into these services strikes me as protection money. Buy in and we'll protect you from our lawsuits," says Kenneth C. Green, the Campus Computing Project's director.

The RIAA denies the charge. "We do sue students and send takedown notices to universities that have legal services all the time," says Mr. Sherman. Universities have a particular responsibility to teach students the value of intellectual property, he adds, because they are "probably the No. 1 creator of intellectual property." And he disputes the idea that the subscription services have fallen out of favor. The number of campuses that subscribe will increase "pretty significantly" in the fall, he says.

Even at schools where more than half of the students use the services, few choose to buy songs. Only 2% of students at the University of Rochester in New York reported buying a song that they had downloaded from Napster in a fall 2005 survey of about 700 students. In the same survey, 10% said they downloaded songs from other services -- not necessarily legally -- after finding one they liked on Napster.

"There isn't that much we can do," acknowledges Aileen Atkins, Napster's senior vice president for business affairs and general counsel. "If they have an iPod, they're going to buy it on iTunes. It's a fact of life."

Web Copy

Alliance is a private and secure environment to share files and communicate with people you know.

It's free. It's easy:

1. Download and run Alliance
2. Invite your coworkers or friends
3. Share files and communicate with them!

Alliance is in constant development. The latest version was v0.8.25.1 as of this writing. If you want to try Alliance for Linux or Mac please check the message board.

Thanks litening!

What is CSpace?
Web Copy

CSpace provides a platform for secure, decentralized, user-to-user communication over the internet. The driving idea behind the CSpace platform is to provide a connect(user,service) primitive, similar to the sockets API connect(ip,port). Applications built on top of CSpace can simply invoke connect(user,service) to establish a connection. The CSpace platform will take care of locating the user and creating a secure, nat/firewall friendly connection. Thus the application developers are relieved of the burden of connection establishment, and can focus on the application-level logic!

CSpace is developed in Python. It uses OpenSSL for crypto, and Qt for the GUI. CSpace is licensed under the GPL.

What applications are available now?

The following applications are currently available with CSpace:

• Text Chat (who needs OTR, when you have security built from the ground up!)
• File Transfer
• Remote Desktop (based on TightVNC)
• How does it work?

Here are some of the salient points regarding the CSpace architecture:

User Identity
• All users create 2048-bit RSA keys for themselves.
• A user is uniquely identified by his RSA public key.
• Every user has a contact list, which is just a list of public keys known to that user.
• A user assigns names to the public keys in his contact list. This is done because it is easier to display & manage names rather than raw public keys.
• CSpace ensures that there are no duplicate names present in the contact list. This is done to allow a contact name to uniquely identify a public key in the contact list.
• To help with the exchange of public keys between users, a key server is used (somewhat like PGP key servers).

Decentralized Network
• A Distributed Hash Table (DHT) based on the Kademlia protocol is used.
• When a user goes online, a mapping from his public key to his ip-address is created in the DHT.
• CSpace also registers with third party routers, so that the user can receive connections even if he is behind a nat/firewall.

Connection Process
• When an application wants to utilize the CSpace platform, it establishes a local connection to the CSpace instance, and issues a connect request, say, something along the lines of connect(alice,TextChat).
• CSpace obtains the destination user's public key by looking up the name in the contact list.
• The DHT is used to obtain the destination user's network location (ip address).
• A TCP connection is established to the destination user's network address. In case the destination user is behind a nat/firewall, then a proxied connection is established using a third party router.
• A secure channel is established using the TLS protocol.
• The service name which was requested (say TextChat) is sent over the secure channel, and the destination CSpace instance responds with a success code.
• The application which issued the connect request is notified about the successful connection. CSpace proxies the data between the local application and the secure channel. Thus the application only sees a plain TCP connection to localhost.


Thanks Dreamcaster!

That's What Friends in High Places Are For
Jeff Leeds and Sharon Waxman

Although collaborations happen all the time in pop music, they do not generally involve R & B hitmakers and Senator Orrin G. Hatch.

But the release of a music producer from a Dubai jail this week, quick on the heels of his conviction for drug possession, turns out to be a story of high-level string-pulling on the part of Mr. Hatch, the conservative Utah Republican and songwriter, along with Lionel Richie, the singer; Quincy Jones, the music entrepreneur; and an array of well-connected lawyers, businessmen and others, spanning cities and continents.

Dallas Austin, 35, who has produced hits for Madonna, Janet Jackson and others, flew home to Atlanta on Wednesday, after being released after midnight on Tuesday from a holding cell in a Dubai jail. Hours earlier Mr. Austin had been sentenced to four years in prison for carrying just over a gram of cocaine with him when he entered the country on May 19 to attend a birthday celebration for Naomi Campbell.

Senator Hatch made numerous phone calls on Mr. Austin's behalf to the ambassador and consul of the United Arab Emirates embassy in Washington — Dubai is one of the seven emirates — and served as an intermediary for Mr. Austin's representatives, the producer's lawyers said.

"The senator was one of a number of people who were very actively involved," said Joe Reeder, the Washington lawyer, who, with an Atlanta colleague, Joel A. Katz, spent 10 days in Dubai working to secure Mr. Austin's reprieve.

Mr. Katz, an entertainment lawyer, represents both Mr. Austin and the somewhat less musically successful Mr. Hatch, a singer and songwriter who has recorded religious-oriented albums. After hiring Mr. Katz's firm, the senator last year took in $39,092 in income from music publishing, according to financial documents filed in May under the Ethics in Government Act.

The senator declined to be interviewed or to confirm details of his efforts on Mr. Austin's behalf, but he issued a statement acknowledging his involvement and said he was asked by Mr. Austin's lawyers to help.

A spokesman for Mr. Hatch said that the senator was a proponent of rehabilitation for drug offenders, and that he had worked to revise federal sentencing guidelines regarding cocaine, and, through legislation in 2005, had advocated treatment for nonviolent offenders and the easing of restrictions on medication to treat heroin addiction.

In the statement Mr. Hatch said he was "confident that this talented young man will learn from this experience." He did not say if he requested that Mr. Austin seek treatment.

Until word of the pardon came through in a call to the One and Only Royal Mirage hotel along the Dubai beach, where Mr. Austin's lawyers waited nervously for news of their client's fate, the release of Mr. Austin was not a certainty.

"This involved multiple ambassadors, a prime minister, a prince, Lionel Richie, the senator and religious leaders in Atlanta," Mr. Reeder said.

"The uniting factor of all these people — the religious leaders, the political leaders, entertainment figures and prominent private citizens — was humanitarian considerations," he said. "Where should this man be under these circumstances?"

Randy Phillips, Mr. Richie's manager, said Mr. Austin "happened to know the right people, and better than that, the right people were ready to step out on a limb for him, which doesn't happen that often."

Although Mr. Phillips called the efforts on Mr. Austin's behalf "the difference between going home and being in 'Midnight Express' " — referring to the harrowing 1978 film about a novice American drug smuggler forsaken in the Turkish prison system — such pardons are not a rarity in Dubai, authorities said.

Mr. Austin's troubles began on May 19, when he landed in Dubai for the three-day birthday party of Ms. Campbell at the opulent Burj Al Arab hotel. While far from a household name, Mr. Austin is a leading figure in the pop music world who has worked with artists including Gwen Stefani, Michael Jackson, Pink, TLC and, lately, Mr. Richie.

According to published accounts, the police at the airport pulled Mr. Austin aside at customs and searched him, finding a small amount of cocaine. He was taken into custody and held at a detention center, the al-Rashidiya jail.

Several of the principal players in the negotiation recounted what followed, including Mr. Austin's lawyers, Mr. Richie and Mr. Phillips.

Almost immediately, several parallel initiatives were undertaken to try to influence the United Arab Emirates government to show clemency to Mr. Austin, his lawyers said.

Mr. Katz, of the firm Greenberg Traurig, hired three local lawyers, two from Dubai, and one from neighboring Bahrain, who ensured the reduction of the initial charge of drug trafficking to mere possession, the lawyers said. Drug trafficking can carry a life sentence in the United Arab Emirates, while possession carries a much shorter jail sentence. Discussions began over securing a pardon for Mr. Austin, focusing on the argument that he had carried only a small amount of drugs for personal use.

Mr. Katz also contacted colleagues, including Mr. Reeder in Greenberg Traurig's Washington office. A senior lawyer in the same office, Nancy Taylor, worked for many years on Mr. Hatch's staff in the Senate. Ms. Taylor enlisted Mr. Hatch, who is influential in Dubai because of his support for the United Arab Emirates-based company DP World in the controversy earlier this year over its contract to manage important American ports.

At the time of the controversy earlier this year, which resulted in the jettisoning of the contract, Mr. Hatch said the United Arab Emirates was a good friend to the United States. "We don't want to kick the moderate Arab nations in the face," he said at the time.

Meanwhile, Mr. Jones, the legendary producer, and his friend Joe Robert, a Virginia real estate investor with interests in the Persian Gulf, became involved. Mr. Jones has played mentor to an array of current young pop and R&B stars, including Mr. Austin. Mr. Robert is also a friend of Mr. Austin's.

Mr. Jones and Mr. Robert began making calls to their contacts in the Middle East, including senior officials in the United Arab Emirates. Reached this week on a yacht off the coast of Spain, where he was with Mr. Jones, Mr. Robert said: "I know Dallas Austin; I consider him a very fine, upstanding individual, notwithstanding the mistake he made." He added, "This is not someone that belongs in a prison anywhere."

Meanwhile, other efforts continued, including a call from Mr. Katz to Prince Abdullah of neighboring Bahrain, and from Mr. Reeder to former Pakistani Prime Minister Benazir Bhutto, who was consulted for a legal reference. Some of the principals said they believed that Mr. Austin's pardon had been secured from early on. Still, uncertainty weighed heavily on others, particularly Mr. Austin's lawyers.

Enter Mr. Richie, who enjoys a cult status throughout much of the Arab world and had performed twice this year in Dubai, where he has met various senior government officials.

In an interview Mr. Richie said that Mr. Austin's advisers arranged for the United Arab Emirate's consul in Washington, Abdulla Ali Alsaboosi, to call Mr. Richie for a character reference. "It was, 'Tell me what kind of guy is Dallas Austin,' " Mr. Richie said. "I said: 'Listen, this is a great guy. A gangster, a hoodlum, a thug, he's not.' "

Last Sunday Mr. Austin pleaded guilty to possessing 1.26 grams of cocaine and capsules of Ecstasy, telling the court he did not mean to break the law. The stage was set for a pardon by the ruler of Dubai, Sheik Mohammed bin Rashid al-Maktoum. It came four hours after the plea, Mr. Austin's lawyers recalled. What remained was to execute the edict.

But that didn't happen until after the sentencing on Tuesday morning. Shortly after midnight, as American revelers half a world away celebrated Independence Day, Mr. Katz and Mr. Reeder got the call at their beachside hotel.

The lawyers quickly gathered their things and rushed to the airport, where they met Mr. Austin and boarded the next flight to New York.

On Friday Mr. Austin released a statement that said in part: "This unfortunate experience has had a profound effect on me, and I regret any grief caused to my family, friends and business associates."

The Dubai government gave no reason for the pardon. "In an issue like this it is not unusual," said Lt. General Dhahi Khalfan Tamim, head of Dubai Police, who said he was speaking in general terms and could not discuss the case in detail. "It is preferable to me that a foreigner who is caught in something like this be returned home rather than be kept here in prison for four years, costing us lots of resources."

Mr. Tamim noted, however, that Mr. Austin had technically been deported and would most likely not be allowed to return to Dubai.

Hassan M. Fattah contributed reporting from Dubai for this article.

Who's Reading Your E-Mail?

New plans to scan e-mails for illegal images of child abuse may give the appearance that children are being safeguarded but they may not be as effective as they first seem, argues Technology commentator Bill Thompson.

Every time you send an e-mail it passes through a series of computers on its way to the intended destination.

Most of them are owned and managed by internet service providers, although if you use webmail from Yahoo, Google or Microsoft then it may take a different route.

But whoever provides your e-mail, the chances are they are having a look at every message you send or receive.

At the moment, their reasons are mostly benign, since they are looking for spam, viruses and other nasty stuff that we wouldn't want anyway.

Google mail users have got used to the fact that their e-mails are being read by a machine looking for context-sensitive ads to put on the same page, and most of us have encountered a company that reads all incoming e-mail looking for rude or inappropriate words, even if it sometimes appears absurd.

I used to edit an arts e-mail newsletter, and one issue was rejected by several recipients because it had an article on the Ars Electronica prize, but even with its flaws this helpful scanning is something that has obvious benefits.

And my internet service provider (ISP) helpfully lets me choose whether to have them look for spam or let it all through for me to deal with.

But if a plan being put forward by five US-based net companies goes ahead, the same approach could be used to look for e-mailed images of child abuse.

And the consequences for all net users could be more serious than just losing the odd legitimate message to the spam filters.

Digital fingerprints

AOL, Yahoo, Microsoft, EarthLink and United Online have joined with the US National Center for Missing and Exploited Children (NCMEC) to create what they call a "Technology Coalition" to look for new ways to safeguard children.

Their first initiative is a plan to create a database of the images of child abuse they find, and process each to create a "digital fingerprint".

They will then look at e-mail attachments and images traded over peer-to-peer networks, swapped on messaging services, or posted on websites to try to spot illegal images.

However, they haven't yet said what will happen if they find one.

I rather hope they won't simply call the police, since with millions of images of all types being sent over the net every day, the chances of some false positives, when an entirely innocent drawing of a tree happens to generate the same code as an image of abuse, must be quite high.

But the lack of detail is typical of this sort of proposal.

The real goal, as so often with big initiatives from large companies around areas of public concern, is designed to show that "something is being done" and to tell government - in this case the US Attorney General Alberto Gonzales - that the situation is under control and no new laws or regulations are needed.

The scheme may actually work, especially since recent research from Binghamton University, New York, indicates that every digital camera has a different "signature" that can be used to identify which pictures it took. Looking for photos taken with known abusers' cameras might pay dividends.

However, the initial funding for the new coalition is only $1m, or roughly four cents for each of AOL's 25 million customers; so the suspicion has to remain that this is an attempt to get friendly headlines rather than really make a difference.

Yet it may be enough to deter the sort of government interference in their business that ISPs in the UK seem to be about to experience, because while the Senate likes to talk about how it will regulate the industry, they rarely get round to passing any actual laws.

Internet morality

In the UK, things tend to take a different course.

Just last week, the British Board of Film Censorship expressed an interest in taking web content under its wing.

Vernon Coaker, a parliamentary under-secretary in the Home Office, told MPs that the government expected that "by the end of 2007, all ISPs offering broadband internet connectivity to the UK general public [will] put in place technical measures that prevent their customers accessing websites containing illegal images of child abuse identified by the IWF (Internet Watch Foundation)".

The clear implication is that if they don't do it voluntarily then the law will be changed to force them to do so.

The list of websites to which he referred is drawn up by the self-proclaimed guardians of Internet morality, the IWF.

The body, which has no statutory authority and no real legal powers, provides a hotline for people to report images of child abuse and works with the police to get sites hosting such abhorrent content removed.

Not content with this role, it also provides ISPs with a list of sites and web pages it has not managed to remove, but which it considers unacceptable or illegal under current law.

The ISPs then stop their customers from viewing the sites concerned, although generally they don't actually tell you that the material concerned is banned because it is considered illegal, they just return a "page not found" error.

Both schemes, one for tracking images as they are exchanged and the other for stopping web users from accessing pages that contain banned material, offer the illusion of effectiveness while doing nothing to deal with the real problem of adult paedophiles using the network to help them abuse children.

It is clear that most of the trade in these appalling images happens on restricted servers, and most of the files are carefully encrypted or obfuscated before they are sent over the public network.

The real danger with media-friendly announcements of new internet coalitions or self-congratulatory annual reports on the number of abusive images seized by the authorities is that it encourages a belief that the situation is somehow under control, when it so clearly is not.

The tension between our freedom to use the network and the need to safeguard children is a driving issue for the Internet's development, and we need to think far more deeply about it than we have managed to do so far.

There is no simple answer, and if we settle for one then we will neither protect children nor safeguard our liberties.

Bill Thompson is a regular commentator on the BBC World Service programme Digital Planet

EFF Defends Liberties In High-Tech World

In March 1990, when few people had even heard of the internet, U.S. Secret Service agents raided the Texas offices of a small board-game maker, seizing computer equipment and reading customers' e-mail stored on one machine. A group of online pioneers already worried about how the nation's laws were being applied to new technologies became even more fearful and decided to intervene.

And thus the Electronic Frontier Foundation was born -- 16 years ago this Monday -- taking on the Secret Service as its first case, one the EFF ultimately won when a judge agreed that the government had no right to read the e-mails or keep the equipment.

Today, after expanding into such areas as intellectual property and moving its headquarters twice along with its focus, the EFF is re-emphasizing its roots of trying to limit government surveillance of electronic communications, while keeping a lookout for emerging threats even as the internet and digital technologies become mainstream.

In one of its highest-profile lawsuits to date, the EFF has accused AT&T of illegally cooperating with the National Security Agency to make phone and Internet communications available without warrants.

"It's quite possibly the most important privacy and free speech issue in the 21st century," said Kevin Bankston, an EFF staff attorney formerly with the American Civil Liberties Union. "We are trying to force the government to follow the law. We are trying to force the phone company to follow the law."

Shari Steele, the EFF's executive director, described the NSA program as "a place where technology and civil liberties collide in a big way."

The EFF was born July 10, 1990, as three men who met on the online community The Well grew concerned that the ACLU and other traditional civil-liberties organizations didn't understand technology enough to question government actions like the Secret Service raid.

"It's difficult at this stage of the game to remember how few people even knew the Internet existed," said John Perry Barlow, a co-founder who used to write lyrics for the Grateful Dead. "It wasn't on their radar."

Even the world wide web wouldn't be invented for another five months.

Software pioneer Mitch Kapor, another co-founder, said that even when a group like the ACLU had the will, it didn't have the technical know-how to consider how basic, constitutional rights would even apply to the online world.

"Nobody had done the thinking," he said. "The questions hadn't been raised."

So from day one, the EFF sought to become a high-tech ACLU and ensure that offline rights indeed transferred to emerging technologies.

Early on, the EFF took on government efforts to treat encryption technology as military weapons rather than speech, and later it joined other groups in successfully challenging -- on free-speech grounds -- congressional efforts to block online pornography.

The group also defended developers of file-sharing software, arguing that technology with legal uses shouldn't be barred even if others can use it to commit crimes, such as trading copyright music and movies.

There have been internal tensions along the way as the organization left Cambridge, Mass., for Washington, D.C., in 1993. The EFF started trying to influence legislation, and some in the organization grew uncomfortable with the need to compromise in that setting.

So the EFF moved once more, to San Francisco in 1995, and after dabbling with corporate issues like privacy policies and spinning off the TRUSTe privacy-certification program for businesses as a standalone organization, it redirected its energies to litigation.

Most of the EFF's 25 employees now work in a former sewing factory and paint warehouse in San Francisco's gritty Mission District, its cubicle-less offices having the makeshift, open feel of a political campaign rather than a law firm. Attorneys walk around sans ties and suits and hold impromptu meetings on colorful couches. Chewed up tennis balls scattered throughout provide evidence of a dog-friendly environment.

Although the EFF was among the few tech-focused groups when it formed, many other organizations now complement it.

The Center for Democracy and Technology, or CDT, formed by former EFF staffers in the rift over its role in lobbying, is housed in Washington and tackles issues before Congress and federal agencies.

The ACLU also became active in technology and led the online pornography lawsuits. In challenging the Bush administration's domestic-surveillance program, the ACLU sued the government, while the EFF sued AT&T.

The EFF's nonlitigation projects include ongoing funding for the Tor system for anonymous online communications and research last year exposing tracking codes embedded in color laser printers. Its staffers also testify at public hearings; one took part in an electronic-voting task force that released a report on security in late June.

But the bulk of the work is legal -- 60 percent to 70 percent, Steele estimated. That focus has left the group open to criticisms that by refusing to play the Washington game of compromising, its views are idealistic and sometimes extremist.

"They are the lawyers for the open vision of the Internet," said Peter Swire, the Clinton administration privacy counselor who sometimes tussled with the EFF. "They are the Left Coast advocacy group."

Companies targeted by the EFF say the group appears overly skeptical of intellectual property and the free market.

Paul Ryan, whose Acacia Research Corp. the EFF cited for "crimes against the public domain" for claiming patents on streaming media, said the EFF ignores the fact that without patent protection, companies have less incentive to innovate.

The EFF also has faced criticisms that, despite its many victories, its losses can establish legal precedents that make subsequent cases harder to win. In the file-sharing case, the EFF won twice in lower courts, but the Supreme Court narrowed a 1984 ruling that technology shouldn't automatically be barred because it had illegal uses.

"The decision to expend energy on cases and in some sense to work to get them to the Supreme Court is to really gamble with the outcome," said Danny Weitzner, who left EFF in 1994 to help form the rival CDT.

He said the EFF should have waited for a better case, so that the high court wouldn't be "deciding about whether kids could steal music."

EFF attorneys say that they can't always wait for the perfect case and could at least prevent a worse ruling.

Others say that by refusing to take risks, no rights will be left.

"People will always second guess what you do," said Lee Tien, an EFF attorney active in the AT&T lawsuit. "If you're going to be afraid to complain about something wrong, you deserve to have wrongdoing done to you."

The EFF continues to tackle issues like anonymity, electronic voting, patents and copyright, but the Sept. 11 attacks nearly five years ago have forced the EFF to spend more time on surveillance.

It has sought to require more evidence before law enforcement can legally track people's locations by their cell phones, and in January the group sued AT&T, saying the San Antonio-based company violated U.S. law and the privacy of its customers. AT&T and NSA officials declined comment for this article.

The AT&T lawsuit already has generate grassroots momentum for the group, which gets the bulk of its $2.5 million budget from individuals. About 1,400 joined the EFF and sent in contributions after the EFF sent a mid-May appeal that cited the AT&T case. The group now has about 11,500 dues-paying members.

Basic online rights are more established today than when the EFF formed, but EFF legal director Cindy Cohn said there's no shortage of cutting-edge cases.

"We're not near the end of the digital revolution in terms of new technology being rolled out," she said. "Just because some stuff is mainstream, there's still a lot of stuff coming down the road to raise new issues or raise old issues over again in slightly new ways."

The EFF, she said, remains committed to fighting the battles "nobody's talking about yet."

Watergate Echoes in NSA Courtroom
Kevin Poulsen

It was perhaps inevitable that someone would compare President Bush's extrajudicial wiretapping operations to Richard Nixon's 1970s-era surveillance of journalists and political enemies. Both were carried out by Republican presidents; both bypassed the courts; both relied on the cooperation of U.S. telecommunications companies.

But there's some irony in the fact that it was AT&T to first make the comparison in a federal courtroom here, while defending itself from charges of complicity in Bush's warrantless spying.

Company attorney Bradford Berenson cited the case of The New York Times reporter Hedrick Smith, who'd been illegally wiretapped by Nixon's Plumbers as part of an investigation into White House leaks. In 1979, the U.S. Court of Appeals for the District of Columbia Circuit ruled that Smith couldn't sue Chesapeake & Potomac Telephone Company -- then part of AT&T's Bell System -- for installing the wiretaps at the Plumbers' behest.

The Nixon Defense was one of several arguments offered Friday by AT&T and the Justice Department in their bid to win summary dismissal of the Electronic Frontier Foundation's class-action lawsuit. The suit accuses the company of providing the National Security Agency with access to customer and non-customer internet traffic passing through AT&T's systems, without a warrant. (Disclosure: Wired News has filed a motion to intervene in the case asking the court to make public evidence filed under seal of AT&T's alleged wiretapping activities.)

Without confirming the allegations, AT&T said if it is cooperating with the NSA, it can't be held responsible, because -- as in the Nixon case -- it's serving as a "passive instrument or passive agent of the government," said Berenson.

"AT&T could refuse, could it not, to provide access to its facilities?" countered U.S. District Judge Vaughn Walker.

Berenson replied that AT&T would refuse any clearly illegal request, and a courtroom overflowing with EFF supporters broke into murmured, sardonic laughter. In the back, late-coming observers unable to win a seat pressed their faces against the windows of the courtroom door.

The government's surveillance activities of the 1970s were an ever-present ghost in the nearly three-hour-long hearing Friday, in a case that's emerging as a crucial challenge of the law passed in response to Watergate-era abuses. The Foreign Intelligence Surveillance Act, or FISA, requires the government to obtain a court order before performing electronic surveillance in national security cases, except for surveillance targeting only foreign nationals or for emergency wiretaps lasting no longer than 72 hours.

A related law allows private parties to sue a telecommunications company for cooperating in government surveillance that doesn't meet FISA's requirements or the demands of criminal wiretap laws. But that law grants companies immunity if the U.S. attorney general first presents them with a letter certifying that the surveillance is legal.

AT&T won't confirm or deny that it received such a letter. But Walker, who's privy to the government's classified evidence in the case, spent some time posing questions about how a letter would affect the litigation's outcome. EFF attorney Kevin Bankston argued that AT&T has a duty to know the law, and wouldn't be protected by a written request to assist in an illegal surveillance operation. "That piece of paper could not authorize the conduct that we allege here," Bankston said.

The government argued that the existence or nonexistence of a letter from the attorney general addressed to AT&T is one of the many secrets that cannot be disclosed without causing grave damage to the United States. The Justice Department asked that the entire case be dismissed on national security grounds under the rarely used "state-secrets privilege."

Never passed by Congress, the state-secrets privilege has its roots in English common law and was cemented into American jurisprudence by a landmark 1953 Supreme Court case titled U.S. v. Reynolds. In Reynolds, the widows of three men who died in a mysterious Air Force crash sued the government, and U.S. officials quashed the lawsuit by claiming that they couldn't release any information about the accident without endangering national security. The Supreme Court upheld the claim, establishing a legal precedent that today allows the executive branch to block the release of information in any civil suit -- even if the government isn't the one being sued.

"It is an area of the law where the degree of deference from the court to the executive is at its highest," said Justice Department attorney Peter Keisler, who argued Friday that the case must be dismissed because its basic allegations can't be addressed without harming national security.

Acknowledging or disavowing any cooperation between the NSA and a particular telecommunications company, for example, would help terrorists communicate securely. "What the terrorist does when he decides to communicate ... is balance the risk that a particular communication will be intercepted against the operational inefficiencies" of finding another way to talk, said Keisler. Identifying a company as cooperating with the government would take some of the guesswork out of that assessment, and could even subject the company to terrorist reprisals.

But Walker showed some signs that he was taking a more nuanced look at the state-secrets privilege, and might consider making some information -- such as the existence or nonexistence of the attorney general's letter -- available for use in the case. "The state-secret privilege is not unlimited," Walker said.

Walker asked if the government would oppose the court retaining an expert to help sift through the classified evidence and evaluate its sensitivity; Keisler argued that such an analysis wouldn't show proper deference to the executive branch, and suggested it might prove problematic to grant such an expert the necessary security clearance.

For its part, EFF argued that the case can go forward without access to any government documents or testimony, thanks to the written statement and papers provided by former AT&T technician Mark Klein, which purports to show AT&T establishing a secure room in its San Francisco switching center to transmit intercepted internet traffic to the NSA.

EFF technical consultant J. Scott Marcus, a former FCC technology adviser, performed an analysis of the documents. Marcus concluded that AT&T's taps suck down about 10 percent of all U.S. internet traffic. The operation can pick up traffic transiting AT&T's network on its way somewhere else, so even non-AT&T customers are intercepted, he wrote.

"AT&T has constructed an extensive -- and expensive -- collection of infrastructure that collectively has all the capability necessary to conduct large-scale covert gathering of (internet protocol)-based communications information, not only for communications to overseas locations, but for purely domestic communications as well," Marcus wrote.

The government dismissed Klein's and Marcus' statements as "hearsay and speculation" Friday.

"They don't know as much as they think they know," said Keisler. AT&T agreed. "Pieces of cable go into a room," said company attorney Bruce Ericson. "That's as far as they take us."

There were few clues to where the judge was leaning Friday, but as the hearing drew to a close, he asked both sides how they would want to proceed should he deny the government's motion to dismiss -- suggesting he's considering allowing some portion of EFF's case to proceed.

Speaking to reporters outside the courthouse, whistle-blower Klein said the evidence he provided was sufficient to make the case, without exposing any national security secrets. AT&T, he said, helped with "massive interception, without warrant, of everyone's information."

Music Industry Sues Yahoo

Search engines new target for Entertainment industry
Nick Farrell

THE MUSIC industry seems to have started legal action against search engines for promoting software piracy.

The International Federation for the Phonographic Industry, which includes EMI, has sued the Chinese version of Yahoo, claiming that it provides links to piracy sites.

The IFPI says that it was currently negotiating with Yahoo, but if these talks fail then the full weight of the music industry will fall on the search outfit. In recent court cases against P2P sites, the operators have said that all they did was provide links to torrents, they did not supply the pirated material themselves. In suing the P2P outfits, they said, the music industry might as well sue Google or Yahoo.

This recent action has indicated that the entertainment industry is considering such a cunning plan. It is focusing its attention on China, where the government has just made changes in the law and fines distributors of illegally copied music, movies and other material over the Internet as much as 100,000 yuan ($12,500).

The music industry has already had some success against the Chinese search outfit Baidu.com.

This is because the Chinese law says that a Web site is jointly liable with the host of the pirated files for infringement "if it knows or should know that the work, performance or sound or video recording linked to was infringing".

Such laws do not exist in the West, otherwise, it seems, Google would have been sued a long time ago.

U.S. Taking A New Approach In War Against Knockoffs

Companies are experimenting with pricing, pack
Elaine Kurtenbach

In its battle against near-universal Chinese piracy of Hollywood blockbusters, Warner Bros.' weapon of choice is a little white price tag smaller than a postage stamp.

Last year, the home entertainment giant began selling selected movies with price tags of only $2.75 in major Chinese cities, aiming to carve out a market for relatively affordable but high-quality, legitimate versions of movies in a sea of counterfeit products selling for less than a dollar.

"The reason why piracy's come along is that there weren't enough products at the right price soon enough," said Tony Vaughan, managing director of CAV Warner Home Entertainment Co., Warner Bros.' joint venture distribution company in China.

Warner's strategy has been "to build a legitimate, viable offering for the Chinese consumer," he said.

The war against rampant counterfeit movies, drugs and other products is moving from China's back alleys and sidewalks into boardrooms and laboratories.

Companies that once relied on lawsuits and police raids are diversifying their strategies, turning to competitive pricing and trying out new technologies to even up seemingly overwhelming odds.

Drug maker Pfizer Inc. of New London, Conn., is experimenting with attaching small radio-frequency identification chips to track packages of its erectile dysfunction drug Viagra, popular knockoffs of which are widely available. The RFID tags, attached to packaging, can be scanned by a pharmacist to detect product codes showing their authenticity, and presumably weeding out fakes.

Confronted with widespread piracy of computer software, Microsoft Corp. is using new products and advertising to promote the benefits of legitimate software. The new Windows Genuine Advantage program checks the authenticity of a user's software and provides access to Microsoft software and other benefits for Windows XP users. The company is also offering low-cost versions of Windows starter software in some countries.

"Do you really want an 'adventure?' " says a Microsoft banner greeting arriving passengers at Shanghai's Hongqiao Airport.

Lian Hoon Lim, a consultant at Kearney in Hong Kong, recommends a "portfolio approach" to clients: A combination of secrecy, careful research of local partners, new technology and business strategies, as well as legally enforcing patents and trademark rights.

"It's not a problem for which there is a clear silver bullet," Lian said. "The message is that people who want to do business in China have to expect to spend money to protect themselves."

Worldwide, sales of counterfeit products may run as high as $650 billion a year, the International Chamber of Commerce in Geneva estimates. The global black market for counterfeit pharmaceuticals is worth up to $32 billion.

In many industries, China accounts for the largest share of pirated products. Almost 70 percent of U.S. Customs seizures of pirated goods are traced back to China.

Despite the new initiatives, though, the pirates appear to have the upper hand. International criminal syndicates are devoting increasing technical prowess to foil anti-counterfeiting packaging and extend their distribution into major Western markets, said Lee Bromberg, head of the patent litigation department at the Boston-based law firm Bromberg & Sunstein.

"For every preventive measure companies take, the wise guys will find it and you're back to square one," Bromberg said. "I don't think the good guys are winning yet."

Still, from medical products makers in Salt Lake City to software designers in San Jose, Calif., companies are awakening to the need for varied approaches to coping with piracy.

"Intellectual property protection has made the transition from a lawyer's issue to a mainstream issue," said Jeffrey Bernstein, chairman of the American Chamber of Commerce in Shanghai.

In its effort, Warner Bros. turned to China's state-owned distributor for audiovisual products, making it a partner. Affiliated with the Culture Ministry, the Chinese company has its own vested interest in seeing piracy stamped out.

Vaughan said his team in Shanghai, recruited from top foreign companies and universities, is tackling piracy from the high and low ends of the market.

Commemorative albums and limited editions -- such as a John Lennon 25th anniversary DVD complete with miniature guitar case and sunglasses -- sell for $20 or more and have proved popular as gifts.

Warner also is experimenting with releases in China's provincial cities of cheaper, simply packaged DVDs that sell for less than $1.85.

Vaughan would not disclose any sales figures, but said they were in line with expectations.

"We're seeing some early signs that things are going in the right direction," he said.

In other industries, secrecy remains the mainstay.

Household names such as the spray lubricant WD-40 and Coca-Cola have managed to protect their businesses by using closely guarded formulas. Lian, the consultant, said he urges companies to keep some of their production processes outside China.

"The most effective methods are focused on keeping part of the production process secret," Lian said.

The radio-frequency identification, or RFID, tags that Pfizer and other drug companies are putting on their packages also are being adapted for use on cigarette packaging, specialty materials and jewelry, said Rod Chui of Hong Kong RFID, a high-tech firm in Hong Kong that is developing the products.

But such technologies are in their infancy and it's unclear whether they will deter piracy or be worth the added costs for companies.

Software and media companies, meanwhile, are running into other hurdles as they develop new encryption and so-called digital rights management technologies meant to prevent excessive copying on personal computers.

Sony BMG Music Entertainment faced lawsuits over flawed CD copy protection software that opened a potential security vulnerability when it was automatically installed on computers. Sony settled a number of lawsuits and offered a one-click "uninstall" application to remove the copy protection program.

Warner Bros. will go along with any standard meant to deter piracy, Vaughan said.

But in the meantime, it's working with DVD wholesalers to put key titles on store shelves alongside pirated products.

"That's part of the strategy of gradually converting the market," he said. "This is the beginning. There's a long, long way to go."

Thanks Multi!

Portable MP3 Player Ownership Reaches New High

One In Five Americans Aged 12 And Older Owns A Portable MP3 Player: Ipsos Research

Interest In Additional Multimedia Content For Portable MP3 Players Fueled By Teens And Young Adults, Reveals Quarterly Digital Music Study, TEMPO: Keeping Pace With Digital Music Behavior

Press Release

A new study by global market research firm Ipsos indicates that as many as one in five Americans over the age of 12 now own portable MP3 Players and one in 20 own more than one. And interest in viewing music videos, photos, TV shows and even full-length movies from these devices is especially strong among younger consumers who have experience downloading music.

New findings released today from TEMPO, the company’s quarterly study of digital music behaviors, show that 20% of Americans aged 12 and older now own a portable MP3 player. This marks a significant increase over ownership levels found one year ago (15%), and nearly double the proportion of owners found in April 2003 (11%). And in a sign that not only new buyers are driving this trend, 6% of Americans own more than one portable MP3 player.

Total headphone-MP3 sales reached $4.23 billion in 2005, according to the Consumer Electronics Association. These popular devices accounted for 85 percent of all factory-level portable audio sales last year, CEA statistics showed.

Recent TEMPO research also revealed some interesting demographic and diagnostic trends surrounding the use of Portable MP3 Players:

 Younger Americans are driving recent growth, with over half of teens now owning a Portable MP3 Player (54%), and one third of 18-34 year olds (30%). Older Americans are less likely to own these devices overall, but still represent a sizable and consistent presence in the market (13% of 35 – 54 year olds report owning a Portable MP3 Player).
 Males continue to lead females in Portable MP3 Player ownership, with nearly one quarter (24%) of U.S. males aged 12 and older owning a device, compared to 16% of females.
 Nearly half of music downloaders own a portable MP3 player (48%), and these owners use their devices an average of 12 hours per week. Younger downloaders use their MP3 Players more often (average of over 16 hours per week among teens), but have less digital content stored on their devices. Overall, there is an average of 700 songs or files stored on a U.S. music downloader’s MP3 player.
 Existing CD collections continue to be the primary source of MP3 Player content among music downloaders. Nearly half (44%) of the content stored on MP3 players is ripped from the owner’s personal CD collection, and another 6% is ripped from others’ CD collections. Fee-based downloads (25%) and files obtained from file sharing services (19%) are also common sources of content.

“Over the past year, the portable MP3 market has really matured, and we are now seeing not just new buyers entering this market, but also growing levels of multiple device ownership indicative of overall category satisfaction and habitualized behavior,” said Matt Kleinschmit, a Vice President with Ipsos Insight and author of the TEMPO study. “What is perhaps most interesting about this is that experienced portable device owners are now buying new players with a level of usage and storage capacity knowledge unseen just a few years ago. Understanding how these unique buyers are adapting specific players to different usage activities and locations will provide manufacturers and content providers alike with a compelling perspective on where the increasingly important portable media category may be heading.”

Desire for Access to Broader Multimedia Content Fueled by Young Downloaders

The recent TEMPO research also found nearly one-quarter of Portable MP3 Player owners believe their devices have the ability to play video, and interest in viewing music videos, photos, TV shows and even full-length movies is especially strong among younger consumers who have experience downloading music. Over one-third of music downloaders between the ages of 12 and 24 say they are extremely or very interested in viewing video content on their portable devices (39% - music videos; 33% - TV shows; 32% - full length motion pictures), compared to fewer than one-fifth among downloaders aged 25 – 54 (15%, 18% and 17%, respectively).

Even more than video content, however, radio listening is one of the most desired additional uses for portable MP3 players. Nearly half (46%) of teens and college-aged downloaders are interested in portable FM radio and 39% express interest being able to access satellite radio on their portable device. Older American downloaders are also interested in using their MP3 players to listen to radio broadcasts, with roughly one-third of 25 to 54 year old downloaders interested in FM and Satellite Radio capabilities (37% and 32%, respectively).

“These recent findings showing the desire for broader multimedia content on a portable device could suggest we are reaching a turning point in which consumers are truly recognizing the value of anytime, anywhere multimedia content on-the-go,” continued Kleinschmit. “While this phenomenon may have initially centered on music, younger MP3 player owners are clearly interested in a wide variety of broader content options for their devices. Given this demographic group’s strong levels of device ownership and heightened frequency of usage, it would be safe to assume that this appetite will continue to develop and prosper as continued usage and subsequent reliance on portably-accessed, on-demand digital content grows.”


Data on music downloading behaviors was gathered from TEMPO: Keeping Pace with Digital Music Behavior, a quarterly shared-cost research study by Ipsos Insight examining the ongoing influence and effects of digital music around the world.

Data for general population statistics included with this release were collected between April 24 and May 2, 2006, via a nationally representative US sample of 1,112 respondents aged 12 and over. With a total sample size of 1,112, one can say with 95% certainty that the results are accurate to within +/- 2.94%.

Additional in-depth data on music downloaders were collected between January 13 and 24, 2006, via a representative sample of 1,517 US Downloaders aged 12 and over. With a total sample size of 1,517, one can say with 95% certainty that the results are accurate to within +/- 2.52%. To learn more about the methodology of TEMPO, please visit www.ipsos-insight.com/tempo.cfm
http://www.ipsosinsight.com/pressrelease.aspx?id=3124, http://www.ipsos-na.com/news/pressrelease.cfm?id=3124

Looking to Take On Apple's iPod, Microsoft Plans Its Own Hand-Held Player
Jeff Leeds

Microsoft has been developing its own hand-held music and video player to challenge Apple Computer's iPod and expects to have it in stores in time for the holiday season, entertainment industry executives briefed on the company's plans said last night.

Microsoft's digital device would be equipped with at least one feature the iPod lacks: wireless Internet capability that would allow users to download music without being connected to a PC.

Microsoft's device, which is similar to an existing player that uses the company's software, would also have a more advanced video screen, according to the executives, who did not want to be identified because they were not authorized to discuss the device.

The company has also held negotiations, the executives said, with major record companies and some major television networks in order to settle on terms that would allow it to sell music and video content online through a service similar to Apple's iTunes Music Store.

The portable player would represent Microsoft's most ambitious effort yet to compete with the iPod, which has generated billions of dollars in sales and turned Apple into the dominant retailer of digital players and music.

Until now, Microsoft has largely bet that hardware manufacturers like Samsung could come up with a device that would use Microsoft's software and cut into Apple's lead. But the company's plans to develop its own device are an indication that it may no longer be satisfied with that strategy.

"If this is true, then this is them trying to take more control over the situation," said Mike McGuire, vice president for research on mobile devices at Gartner, which tracks the electronics market. "In effect, they're basically saying, 'We think we can do something better' " than the existing hardware makers.

The shift is likely to anger Samsung, Sony, Creative Technology and other manufacturers that were persuaded to use Microsoft's software in their devices, because a Microsoft player would compete with theirs. The Xbox video game console, Microsoft's strongest move into consumer electronics, uses software that does not run on any other player.

A Microsoft spokesman, Mark Murray, would not comment on the company's plans.

A senior executive at a major TV network said Microsoft had not yet received commitments from the networks to supply programming to its online store. But the executive said that the networks would welcome competition for Apple in downloads.

Music industry executives in particular have complained about Apple's control over the digital music market and its power to determine pricing of songs and albums.

Steve Lohr and Bill Carter contributed reporting for this article.

Microsoft Planning WiFi-Enabled Portable Media Player, Working on MVNO for Next Year
Peter Rojas

Ok, by now it's more or less an open secret that Microsoft is going to shift away from its current model and go straight after the iPod with a portable media player of its own, but we've landed some exclusive details about the new player courtesy of a trusted insider who is party to some of the discussions Microsoft is having with potential content partners.

Here's what we've learned:

Microsoft's new portable audio and video player will have a screen that's "bigger than that of the iPod video" (which isn't really saying much) and built-in WiFi so you can not only download content directly to the player (sort of like with the MusicGremlin), but actually participate in an Xbox Live-like social network that will help you connect with other people with similar taste and interests. Whether that's going to be the Live Anywhere service they introduced at E3 we don't yet know. But we do know the tag line they're pitching for the device combined with this new network is "Connected Entertainment."

But it gets better. To attract current iPod users Microsoft is going to let you download for free any songs you've already bought from the iTunes Music Store. They'll actually scan iTunes for purchased tracks and then automatically add those to your account. Microsoft will still have to pay the rights-holders for the songs, but they believe it'll be worth it to acquire converts to their new player.

Right now the new player is schedule to launch in November, but our source also tells us that Microsoft isn't stopping with a WiFi-enabled PMP, they're actually going to launch an MVNO next year using all Windows Mobile-powered HTC handsets. These handsets will let users connect to the same social network you'll be able to access over WiFi using the portable media player.


Google Says Bill Could Spark Anti-Trust Complaints

Google warned on Tuesday it will not hesitate to file anti-trust complaints in the United States if high-speed Internet providers abuse the market power they could receive from U.S. legislators.

The U.S. Senate Commerce Committee last week approved sweeping communications reform legislation that would make it easier for telephone companies like AT&T to offer subscription television to consumers.

But it narrowly rejected attempts by some lawmakers to strengthen safeguards on Internet service, which had pitted high-speed Internet, or broadband, providers such as AT&T against Internet content companies like Google.

The battle centred on whether broadband providers can charge more to carry unaffiliated content or to guarantee service quality, an issue called Net neutrality.

"If the legislators ... insist on neutrality, we will be happy. If they do not put it in, we will be less happy but then we will have to wait and see whether or not there actually is any abuse," Vint Cerf, a Google vice-president and one of the pioneers of the Internet, told a news conference in Bulgaria.

"If we are not successful in our arguments ... then we will simply have to wait until something bad happens and then we will make known our case to the Department of Justice's anti-trust division," he said on Tuesday.

Cerf is visiting Bulgaria at the invitation of President Georgi Parvanov to discuss ways to boost information technology business and Internet access in the country.

The U.S. bill includes provisions aimed at preserving consumers' ability to surf anywhere on the public Internet and use any Internet-related application, software or service.

"My company, along with many others believes that the Internet should stay open and accessible to everyone equally," Cerf said.

"We are worried that some of the broadband service providers will interfere with that principle and will attempt to use their control over broadband transport facilities to interfere with services of competitors."

Despite extensive lobbying by the telephone carriers, prospects for a final law this year remain uncertain. Congress faces a dwindling number of work days because of the November elections.

If the measure passes the full Senate, it would have to be reconciled with a narrower bill approved by the House of Representatives.

Telcos Face Tough Road on 'Net Neutrality'

Senate win gives phone providers the upper hand, but not the decisive win
Roger O. Crockett

AT&T and other big phone-service providers had reason to celebrate last week. On June 28, the Senate Commerce Committee, chaired by Senator Ted Stevens (R-Alaska), approved a bill that would free phone carriers and cable operators such as Comcast from key restrictions on how they set fees for delivering Internet content.

Many hailed the vote as good news for the likes of AT&T Chief Executive Ed Whitacre and his counterpart at Comcast, Brian Roberts. It means that the most significant piece of telecom legislation since the 1996 Telecom Act could be shorn of what the phone-service providers call unnecessary and burdensome constraints on their right to set prices for network use.

Tough road ahead
Those rules are particularly onerous to traditional phone companies like AT&T and Verizon, which are spending billions of dollars to lay fiber cables to deliver TV service to rival what's already available from cable and satellite providers. They want the freedom to set fees for Internet companies such as Google and Yahoo that push their own content over telco TV pipes. The telcos' argument: Constraints on the ability to charge higher fees for premium content—what proponents call "Net neutrality rules"—would mean less economic incentive to invest in network upgrades, slowing the speed of information sent over the Internet for everyone.

Judging from the Senate committee vote, it would appear that argument has won the day. But Whitacre better not break out the champagne just yet. A long, tough road remains in the battle over control of content riding over the Internet. The Senate committee vote has to be approved by a majority of the full body, and then reconciled with a draft of the bill in the House of Representatives. And it all has to be accomplished in a short legislative session interrupted by holiday breaks and the approaching November elections.

What's more, the longer it takes to get the law passed, the longer telecom companies have to do without a raft of other hoped-for goodies. For example, the Senate bill would make it easier for them to enter TV markets across the country and begin competing head-to-head with cable providers. The Senate bill also would prevent state governments from stepping in and regulating certain wireless and Internet-based phone services.

Horse trading
Victory in the full Senate isn't assured. The committee vote fell largely along party lines, with Democrats favoring strict Net neutrality and Republicans like Stevens against it. It may be difficult for the telcos to gain final passage in the full Senate, where Republicans have a slim majority, and may see more defections on this issue, UBS telecom analyst John Hodulik wrote in a recent report.

The upshot: All the horse-trading still to come means that a final bill might not be passed this time around, requiring the process to start anew in the next legislative session. Or, if a bill is agreed upon, some variant of Net neutrality or state regulation of other telecom services—unwelcome by the industry— could still find its way into the final draft.

Full passage would require Stevens to get 60 votes on his side to end debate on the Senate floor. But Stevens has stated that he does not have the necessary 60 votes. And, "the chairman is not going to bring it to the full Senate until he's confident that we have the 60 votes," says Matthew Flanigan, president of TIA, a trade group of telecom equipment suppliers.

Playing catch-up
The telcos and their supporters will no doubt lobby hard to win over the necessary number of senators. But with so many other issues of national importance before the Senate, that's far from guaranteed. And no bill at all before November would be a monumental loss for Whitacre and his telco peers and a victory for their chief foes, the cable companies run by Roberts and others.

Why? At the core of this legislative scrap is the wherewithal to deliver video services to customers all across the country. Phone companies are making a push into TV as cable companies steal customers with new Net phone products. By 2010, the telcos will have lost 20 percent of their voice lines to cable competitors, and revenue per customer will drop from about $40 per voice line today to less than $35, according to researcher Sanford C. Bernstein.

If the telcos don't soon match cable's three-product package of phone, Internet, and video service, they risk falling dangerously behind in the race to win customer loyalty over the next decade. "We expect accelerating access line losses (from phone companies) throughout the next three years" as cable companies are able to market their full lineup of products to their customers by 2007, Bernstein's Jeff Halpern told analysts in a recent conference call.

Fast track to TV

Another crucial element of telecommunications law centers on the process of applying for licenses to sell TV services in new markets. Currently, phone companies must apply for franchise licenses on a city-by-city basis—a process that could take years and slow the telcos' TV rollout to a crawl. AT&T and Verizon want legislation that lets them apply for a nationwide license.

The Senate committee, hoping to stimulate competition, is open to putting phone companies' TV plans on the fast track. Its bill essentially allows for TV franchising to be determined at the national level by setting a time limit of 90 days for local government to grant the franchise. If not acted upon after 90 days, the franchise is deemed approved for 15 years. But again, Stevens needs full Senate approval, and leaving TV licenses in the hands of national regulators looks as though it faces opposition among some in the full Senate.

Another part of the Senate bill that hasn't gotten much ink involves the interconnection of Internet phone services. The bill clears the way for Vonage and other providers of so-called Voice over Internet Protocol (VoIP) services to have the same rights as traditional phone companies—but also the same obligations—when it comes to offering service. The law also says these Net-phone companies must offer emergency 911 service, and that any VoIP provider must have nondiscriminatory network access to offer E-911.

Running out of time
Industry experts also say that any new law is likely to have provisions around what's known as the Universal Service Fund, which requires telecom providers to pay into a fund that ensures rural and low-income areas get the same services as the rest of the country. The House bill does not address this, but the Senate version does. With universal service being a priority in Stevens' home state of Alaska, the senator will no doubt be squabbling with House reps to get it into final legislation, if the bill gets that far this year.

In reality, though, things like universal service are "a fly on the back of the elephant," says the TIA's Flanigan. The big issue remains Net neutrality. As Congress haggles over these issues in the coming weeks, the telcos hope Net neutrality doesn't find life again. To keep it down, they'll have to ward off lobbyists from the likes of Google and Yahoo, who want desperately to get it back on the agenda (see BusinessWeek.com, 6/08/06, "Web Titans' D.C. Blues").

For now, the big phone companies have the upper hand, with Net neutrality headed toward its grave. But with so much debate left in Congress and so little time to reach agreement, the issue is still on life support.

Net Neutrality Has a Spokesperson
John C. Dvorak

The Net neutrality bill took kind of a weird turn despite its defeat, when the public got to hear the mouthpiece for the telecom industry, Senator Ted Stevens. Wow. Stevens, an Alaska Republican, made a 10-minute speech before Congress that was something of a cross between a comedy act by Professor Irwin Corey and testimony by Casey Stengel, both famous for flubs, non sequiturs, and double-talk.

Stevens is most famous for diverting federal money to Alaska and especially famous for his grabbing $453 million needed for post-Katrina rebuilding to construct two bridges in Alaska, including the infamous "bridge to nowhere." He may be inarticulate and weird, but he does manage to benefit his state at a cost to the nation as a whole.

Stevens now appears to be the front man for the telecom companies (they must be so proud!) regarding Net neutrality, and you can listen to his 10-minute diatribe here: {http://www.publicknowledge.org/node/497} Let me warn you in advance. It's incredibly painful. It's too obvious that this man has no idea what the Internet is exactly and no idea about the issues behind Net neutrality. It seems like a miracle that he can even find the crapper.

This shows you how desperate the telcos and cable companies are to get their way, as Stevens is also the point man for new telecom legislation. It's funny how the telcos argue against any government interference with the Internet but promote various telecom "reform" bills that benefit them.

WHAT IS NET NEUTRALITY? As a reminder, let me outline the idea and rationale for Net neutrality. The idea is that there needs to be legislation to prevent Internet providers such as SBC and Comcast from arbitrarily throttling services. They, of course, want to throttle Skype to make sure people use POTS. But they have been saber-rattling against Google and others who Ted Stevens says are getting a free ride on the Internet. I cannot even imagine how many millions of dollars Google pays to get on the Net. How this is a free ride is baffling. Oh wait, that's right, the man is an idiot. That's it.

Here is one of Stevens's explanations from his diatribe:

"They want to deliver vast amounts of information over the Internet. And again, the Internet is not something you just dump something on. It's not a truck. It's a series of tubes.

"And if you don't understand those tubes can be filled and if they are filled, when you put your message in, it gets in line and it's going to be delayed by anyone that puts into that tube enormous amounts of material, enormous amounts of material."

We are never clear who the "they" is.—Continue reading...

LAW NEEDED The idea behind Net neutrality is that it appears that there indeed must be something written into law to make the ISPs "neutral" in how they provide service. This is not about you paying more for better speed or anything like that. It's simply to prevent them from messing up the free flow of bits up and down the pipe. They cannot prefer one kind of bit over another because it interferes with their other businesses or because it interferes with some scheme of theirs.

Stevens, quoted in National Journal here {http://www.njtelecomupdate.com/lenya/telco/live/tb-KZJB1149794408372.html}, says that if telcos and cable companies began to abuse their position, then the Federal Communications Commission could look into it, and maybe something could be done about it when it happens. Emphasis on the word maybe. There doesn't need to be a law, he says. And he's not just a mouthpiece for the telcos: The lawyers should be pleased with him, as this quote assures them he is on their side too:

"…when it comes to the providers versus the owners of content, and all that sort of thing, that is a battle between billion-dollar people. They should hire their own lawyers, not the FCC."

Billion-dollar people, eh? Thus, if any of you billion-dollar bloggers get throttled or just get banned—cut out of the loop altogether—for revealing any uncomfortable truths, just sue 'em. You've got plenty of money being a content provider, right?


News From The North

The TankGirl Diaries


Kristianstadsbladet: "Who Does the Culture Belong to?"

The cultural editors of newspaper Kristianstadsbladet participate the Swedish copyright debate with a good debate essay starting from the historical background of modern copyright debate, highlighting especially the role of the French author Victor Hugo - the world's most pirate copied author of his time - in initiating the international meeting in Berne, Switzerland, that resulted in the Berne Convention for the Protection of Literary and Artistic Works.

Kristianstadsbladet remarks that in his speech Hugo took a clear standing for the "cultural common good", and that this concept is important in today's filesharing debate as well. Hugo himself emphasized that whenever he had to make a choice between author's copyright and common good, he always priotized the common good and public's right to knowledge and information.

"Even if we don't think about it, we have a large pool of knowledge that we base our co-existence on", writes Kristianstadsbladet. "Old and inherited culture like songs, clothing, traditions and older literature are freely usable. We can learn from them and use them to shape new culture."

"An author, for example, can be influenced in any degree by Homeros, Bellman or Strindberg without having to pay any compensations to anybody. Such resources of knowledge are the cultural common good, and they are an important part of information flow in the society."


One Year of Stricter Copyright Law Behind

The new, stricter Swedish copyright law criminalizing 1.3 million Swedish filesharers came into effect a year ago, 1. of July 2005. At the time, only Center Party and Green Party voted against the new law, while five other parliamentary parties voted for it.

The practical effects of the law on filesharing in Sweden have been minimal at best. Swedes were and continue to be among the most active filesharing nations, hosting the world's largest BitTorrent site Pirate Bay, being the superpower of Direct Connect with the largest number of hubs and users, and so on.

Six months after the new law came into force the first Pirate Party in the world was founded in Sweden, capitalizing on the political education work by the activist organization Piratbyrån (Pirate Bureau). The public opinion in Sweden is strongly for legalizing filesharing, and the media industry has failed miserably in its efforts to impress guilt about p2p downloading on the minds of the Swedish public. In Sweden being a 'pirate' is a positive thing.

So the will of the Swedish citizens is in direct crash course with the will of the media cartels and the copyright laws they have managed to dictate down to the EU member states from WIPO and EU Commission. The extent of this conflict will be measured on September 17 this year when the Swedes have their parliamentary election, with Pirate Party giving a democratic voice to the filesharers for the first time anywhere during the 6-year history of p2p.


The French-Swedish Connection

Pirate movement is not only spreading in Europe, it is also starting to operate as an European-wide political force.

A good example of this is the forming of the connection between Swedish Pirate Party and its French sister party. The Swedes were the ones to start it but when it comes to pressuring your government and the whole EU with citizen activism, the French are of course masters in it. They know how to go to barricades and how to demonstrate so that something eventually gives in. Read this snippet from the French sister party's offer of help to Piratepartiet at their forum:

As I said before Sweden really needs to pay attention to France because of the "harmonizing" of laws within the EU and because of French people's close influence on the EU by their long tradition of citizen activism. The importance of this insight should *not be underestimated* - the way to get things done in France is precisely citizen activism, en masse, as witnessed by the recent demonstrations against the CPE.

They're geographically and culturally closer to the EU's power-centers.

French activists have a higher chance of making changes in the EU, as they have already done by creating debate about open-source software and patents through groups such as StopDRM and APRIL.
Here is a more detailed account of the developments in France so far, with a number of useful links for those interested in what happens in France:

During Christmas 2005 the French parliament was hijacked since people were away on vacation, and they managed to get a majority vote for a law that would have legalized file sharing for a fee added to the Internet bill.

This was widely reported as "file-sharing legalized in France."

It could not be farther from the truth.

After the law was passed, there was a wide reaction against it by established rich artists and elitist EU politicians, and the elitist government in power announced it would open a site http://lesTelechargements.com to "go into dialogue with the file-sharers."

There was no dialogue - the site was professionaly designed and aimed at explaining, in a typical elitist top-down manner characteristic of France, why copyright should stay like it is, and why file sharing is illegal. A new law, one of the worst in Europe, was proposed, that would give fines to people found to be sharing.

http://lesTelechargements.fr was launched by opponents of the law, to explain why they disagree. They use the heading, "File-sharing: .FRench debate, or .COMmercial war?"

However, the current government in power, although resented by the people, is passing a lot of heavy handed laws that are not designed to do anything but defend the status quo and the interests of large corporations and trade agreements.

There is also the DADVSI law that will make development of the French VLC media player illegal, that was just passed.

Since the population at large is not engaged enough to protest the law, like they did with the CPE, it will be passed. The only way of stopping things in this extremely confrontational culture, is by massive protest.

French politics are elitist, confrontational, heavy-handed. France is a founding member of the EU, and what happens there will have a lot of influence on Sweden, since Sweden is an EU member. Vice-versa, Swedish politicians could influence what happens in the EU, if they have a good proposal.

There are several organizations working on a political level, and more Swedish people should make contact with them, since both countries are EU members they could benefit from increased contact.

The French Intellectuals involved in this debate have more say over EU issues than Swedish intellectuals, just because of their proximity and because there is no language barrier for them!

Although there is a language barrier, this is less of a problem in computer subjects, since French people who know computers tend to know English better. I challenge all Swedish pirates to cooperate more closely with the French.

Good starting points (use Google to translate if you do not know French, and send these people an email in English)

The most important organization in France, who arranged the March against the DADVSI copyright law (http://en.wikinews.org/wiki/March_ag..._copyright_law).

Audionautes Blog
A blog by a teenager who meets regularly with French parlamentarians to explain technical details

The main open source/free software organization.

Partie Pirate de France
Newly established. Does not seem like it has any formal organization yet, and only registres members by the pseudonym (nick) and not their real names.

Paris Power blog
A blog by one of the people involved in the French Pirate Party

French site to mobilize against the wide-impact EUCD law

More about EUCD, DADVSI

Belgians Join The Pirate Movement

The political pirate movement is spreading fast in Europe. The latest country to join the movement is Belgium, who has now its own Pirate Party. What started as a Swedish revolt has become an European-wide political revolution for reforming the media cartel dictated copyright laws and for defending citizen privacy against police state style control measures geared to serve private commercial interests. It is only a question of time when the movement's impact will be felt in the power centers of EU.


Segelkarl will be on vacation until August.

Dutch Parliament Opposes Criminalization Of Violations Of Intellectual Property Across the EU

The Dutch parliament does not want the EU commission to make violations of intellectual property a crime in a directive. Last Friday, both chambers of the Dutch parliament agreed that the European Community has not "had any mandate bestowed upon it with which to attain the goals of the planned legislative action." This statement came after the representatives briefly met to discuss the highly controversial proposal from Brussels. But the only item on the agenda at that meeting was to see whether the principles of "subsidiarity and proportionality" required for the adoption of a directive were respected in a directive for "the prosecution of violations of intellectual property into the law."

The new proposal for a directive thus seems to be skating on thin ice. The EU commission plans to obligate member states to prosecute any intentional violation of intellectual property if the violation was committed for commercial purposes. Not only copyright, but also patents, trademarks, utility models, and the Semiconductor Protection Act are to be enforced by penal law. The draft from Brussels would give police far-reaching authority to search houses and seize evidence. Furthermore, industries threatened by illegal copies and forgeries are to be allowed to create joint investigative teams along with criminal prosecutors. If suspects are convicted, they would then face fines ranging from 100,000 to 300,000 euros or up to four years of confinement. (Stefan Krempl) / (Craig Morris)

Go-Ahead For Hacker's Extradition

A US request to extradite a British computer hacker accused of the "biggest military hack of all time" has been granted by Home Secretary John Reid.

Gary McKinnon, who is accused of breaking into US government computer networks, has been fighting extradition since his arrest in November 2002.

His family says he has 14 days to appeal against the extradition.

Mr McKinnon told the BBC he was "very worried and feeling very let down by my own government".

In May, a district judge sitting at Bow Street Magistrates' Court in London recommended Mr McKinnon be extradited - but the final decision rested with the home secretary.

'Order signed'

A Home Office spokesman said: "On 4 July the secretary of state signed an order for Mr McKinnon's extradition to the United States for charges connected with computer hacking.

"Mr McKinnon had exercised his right to submit representations against return but the secretary of state did not consider the issues raised availed Mr McKinnon.

"Mr McKinnon now has the opportunity, within 14 days, to appeal against the decisions of the district judge/secretary of state."

Mr McKinnon was first arrested in 2002 by the UK's National Hi-Tech Crime Unit for hacking into a series of computer networks used by the US army, navy, air force, and Department of Defense.

The US, in its case for extradition, said Mr McKinnon caused more than $700,000 (£375,235) of damage while exploring the computer networks at various US military institutions.

It said one attack at the Earle Naval Weapons Station took place soon after 11 September 2001 and made it impossible to use critical systems.

The US Department of Justice said it took a month to get systems working in the aftermath of this attack.

Mr McKinnon has admitted that he spent almost two years exploring these networks but has said he was motivated by a search for what he called "suppressed technology".

His lawyers had argued he could be sent to Guantanamo Bay as a terrorist suspect.

Apple's Got a Secret
Dan Mitchell

EVERYONE knows about how much iPods cost. But how much does it cost Apple to make them?

Apple will not say, and that bothers Robert Renck, who runs the private research firm R. L. Renck & Company. Since January, Mr. Renck has been advising clients against owning Apple shares. His assessment came to light last week in a column by Herb Greenberg in The Wall Street Journal and on MarketWatch.com.

Mr. Renck has a rare sell recommendation on Apple stock, mainly because of its "penchant for secrecy." The minimal financial disclosure by Apple makes it a "have faith, trust me" stock, he argues. Because Apple breaks out its profits by geographic location (as it has traditionally done), rather than by product line, analysts and investors can not properly assess the business, he said.

Mr. Greenberg seems to agree. "Apple is a very different company than it was several years ago," he wrote on his blog. "The way it once disclosed segment information isn't necessarily relevant to the Apple of today" (blogs.marketwatch.com/Greenberg).

Geographic disclosure was adequate when pretty much all Apple sold were computers, Mr. Renck said. But the iPod has changed everything. Sales of Macintosh computers now trail those of iPod, which last year made up 46 percent of revenue. "Apple clearly has its feet in two separate and distinct business models, namely computer manufacturing and software creation, and the consumer electronics industry," Mr. Renck said.

Apple said it did not comment on analyst reports, but Mr. Greenberg noted that on a recent conference call with analysts, several of them asked Peter Oppenheimer, the chief financial officer, about the iPod's gross margin. To which he responded, "Our competitors would just love to know what our specific gross margins are."

"And we just don't want to help them."

One poster on the Greenberg blog went so far as to praise Apple for making things tough on analysts. "How about actually doing their job and analyze the company they are covering?" the poster wrote. "What a thought — actually doing some independent research without the companies giving them all the information on a platter. I applaud Apple for making the analysts work."

CRY, BABIES The blogger/photographer Thomas Hawk criticized the photographer Jill Greenberg for making toddlers cry and taking pictures of them. "Child abuse," he called it (thomashawk.com). Ms. Greenberg also works as a commercial photographer and has shot photos for corporations. Her artistic work, "End Times," is featured on the Web site of the Paul Kopeikin Gallery. A news release on the site says the pictures of distressed children are a commentary on religious fundamentalism and the war in Iraq (paulkopeikingallery.com).

Mr. Hawk does not buy it. Although "the children are not sexualized, I consider what she is doing child pornography of the worst kind," he wrote.

She took umbrage — going so far, according to Mr. Hawk, as to contact his employer. She called him "insane" in an interview with American Photo magazine. To get the kids to cry she said she gave them lollipops and then took them away. Others cried without prompting. "Maybe getting kids to cry isn't the nicest thing to do," she said, "but I'm not causing anyone permanent psychological damage" (popphoto.com).

In taking on Mr. Hawk, she may be playing with fire. Previously, he took issue with the tactics of an online camera dealer on his blog, bringing the wrath of his readers down upon it. Now the dealer is out of business.

SMOOTHIES FOR THE ROAD Why would anyone want a blender powered by a bicycle? "Because human beings love human power," according to the Web site for the Byerley Bicycle Blender, or B3.

Human beings also love smoothies, and the idea behind the B3 is to give entrepreneurs a convenient way to sell them at outdoor settings. Starting your own mobile smoothie stand would cost $1,399 (bikeblender.com).

This is a Test

** this is a backup of the site; i was one of the first to hit the page. enjoy. **
feel free to visit my blog http://silvrlabs.com/blog

{eon8} Complete
As of July 1st, 2006, the E8 Project has completed.
The purpose of this project was to determine the reactions of the internet public to lack of information.

The domain eon8.com was chosen, as it is short, easily remembered, and eon9 was already registered.

It was originally posted on www.msfn.org, but was promptly removed as 'spam'. It was enough time for it to be copied to other forums throughout December 2005.

We were amazed to discover that the site was instantly linked with terrorism, simply for the fact that it seems mysterious. Evil was the number one first impression people had of the site, in spite of the fact that there are no threats on the site. The only thing Eon 8 says is "We don't want you here". Nothing else.
Other less disappointing opinions were social experimentation (which was correct), James Bond movie viral marketing, and promotions for video games.
For many people, being faced with a countdown timer was an instant reason to try to shut down or hack the site. This is a worrying reaction, that if someone doesn't understand something they must destroy it. As a result, the servers have been hit quite hard these last few days, but luckily 99% of the 'hackers' could easily be described as 'l4me n00bs'.
Another worrying example of paranoia was how quickly people would jump to conclusions, such as telephoning the registered owner of a dog seen in a photograph on a server that hosts a page that links to eon8.

The folks at Unfiction.com were the most resourceful and inventive, they successfully managed to decrypt several of the 'codes' on the site, forcing them to be re-encrypted using more secure methods.

What about eon5.com?
Nothing to do with us. Pure coincidence, but worked in our favor.

What about the 8th eon being the end of the world?
We picked Eon 8 because Eon 9 was already taken. We didn't know about the significance of this. Eon is a cool sounding word!

Why July 1st?
We didn't know how long it would take to get the word out using our subtle promotion methods. We allowed over 6 months.

What do the codes on the site mean?
They're mostly randomly generated integers encrypted with md5, but with certain letters removed and replaced. The Logs page is simply based on the current timestamp, encrypted and modified. You can't decrypt them, they really are random numbers.

What is the Deployment Map?
They're dots placed over major cities and several random locations, it was done mostly from memory. The random gif filename is an added touch to force a slight delay on loading, which looks more impressive in Internet Explorer, but not as much in Firefox.
What's the password?
There isn't one. If you did somehow manage to get in, you'd see an empty folder with a single text file that says "This is a decoy folder. Please connect to the internal secure network".

Can I see your website statistics?
Yes, click here.

Are you anything to do with Scientology?
Did you see anything talking about a Free Personality Test or Xenu? Use your brain.

Who are you, really?
The most I can tell you is I am a 23 year old web designer from Florida named Mike. I can't narrow it down anymore than that. When I say 'we', I really mean 'me'.

People take things too seriously and panic over the most trivial things. But at the same time there are many people out there who think things through without jumping to conclusions. You can't let pointless speculation rule your lives and force you to live in fear.

In Closing
Thanks to everyone who kept things interesting, especially to the folks at unfiction. Sorry there is no ARG for you to play, but at least you had fun while it lasted.

Click here for one Final Message from Eon 8

Sincerely, x21b

Happy birthday, mtcaptain. From 'ls224' (aka x21b). Yes that really was me in the #eon-8 channel

Chomsky Publisher Charged in Turkey
Lawrence Van Gelder

Fatih Tas, the Turkish publisher of a book by the American intellectual Noam Chomsky, said yesterday that he and two of his colleagues were facing prison sentences as long as six years on charges of "denigrating national identity" and "inciting hatred," Agence France-Presse reported. Mr. Tas, owner of the Aram Publishing House, said that he and his colleagues Omer Faruk Kurhan and Taylan Tosun had been charged over the book "Manufacturing Consent: The Political Economy of the Mass Media," written by Mr. Chomsky and Edward S. Herman, which argues that corporate and government pressures distort news coverage. Mr. Tas said that Ender Abadoglu, the translator of the book, published in Turkey in March, was also likely to be indicted. Mr. Tas was tried and acquitted in 2002 for publishing "American Interventionism," a collection of essays by Mr. Chomsky that included criticism of the Turkish government's treatment of its Kurdish minority and of American arms sales to Turkey. The European Union has warned Turkey that prosecution of intellectuals and writers is harmful to its bid for membership.

AOL Ponders Free Internet Service

America Online, the online unit of Time Warner, is considering offering its services, including e-mail, free to customers who already have a high-speed internet connection, The Wall Street Journal reported Thursday.

Under terms of the proposal, which comes amid AOL's quickly depreciating subscriber base, AOL would no longer charge subscription fees to users with high-speed internet access or a dial-up service from another provider. AOL customers with "dial-up" internet access through AOL would still have to pay a monthly fee of as much as $26, the newspaper said.

The Journal said AOL's total U.S. subscriber base fell by 850,000 in the first quarter to 18.6 million. At the end of 2002 the company had 26.5 million subscribers.

Nearly one-third of AOL's 18.6 million subscribers already have high-speed Internet access, and AOL expects that 8 million of its existing dial-up customers would jump on the new offer. Lost revenue could be offset by lower expenses, including layoffs in the company's already troubled marketing and customer service departments.

AOL Said, 'If You Leave Me I'll Do Something Crazy'
Randall Stross

"YOU'RE going to listen to me."

This was the taunting command of an AOL customer service representative who sounded like a jailer twirling his keychain. The customer on the phone wanted to complete his business, but the person on the other end of the phone did not share a sense of urgency.

It is fitting that the customer service representative's wish to be heard has been fulfilled on a scale he never anticipated.

When Vincent Ferrari, 30, of the Bronx, called AOL to cancel his membership last month, it took him a total of 21 minutes, including the time spent on an automated sequence at the beginning and some initial waiting in a queue. He recorded the five minutes of interaction with the AOL customer service representative and, a week later, posted the audio file on his blog, Insignificant Thoughts (insignificantthoughts.com/2006/06/13/cancelling-aol/).

Shortly thereafter, those five minutes became the online equivalent of a top-of-the-charts single.

To listen as Mr. Ferrari tries to cancel his membership is to join him in a wild, horrifying descent into customer-service hell. The AOL representative, self-identified as John, sounds like a native English speaker; he refuses to comply when Mr. Ferrari asks, demands and finally pleads — over and over again — to close his account.

"By my count, he used the word 'cancel' 21 times," said Nicholas J. Graham, an AOL vice president and spokesman. "That's not counting the I-don't-need-it's, I-don't-want-it's and I-don't-use-it's. Add the other inferences, it's probably closer to 30." Mr. Graham, almost needless to say, was sharply critical of John's lack of responsiveness.

Some people who posted comments on the Web about the recording — about 20 percent of them, in Mr. Ferrari's estimation — found it so incredible that they declared it a hoax. But Mr. Graham said the call's authenticity had been internally verified, and he sent Mr. Ferrari a letter of apology. He said John was no longer with the company.

If John's behavior had been that of a person in the grip of genuine pathological madness, the recording of the call would not have drawn the attention of so many people, nor would it have been replayed on national television and radio programs. What one hears in John is an actor performing clumsily, to be sure, but working with a script provided by his employer that confuses "customer service" with "sales."

During his travail, Mr. Ferrari does his best to nudge John away from the script: "When I say, 'Cancel the account,' I don't mean, 'Figure out how to help me keep it.' I mean, 'Cancel the account.' "

People who left online comments about Mr. Ferrari's AOL call expressed delight, more often than disbelief, in seeing public exposure of an AOL experience similar to their own. "The same thing happened to me" is a refrain among the posts. Before the advent of the Web, an encounter with inept customer service was ours to bear alone, with little recourse or means to warn others. Now, Mr. Ferrari can swiftly post on the Web a digital "documentary" that recorded his dismal experience, and news-sniffing hounds do the rest.

With the enthusiastic help of users of Digg, the much-visited site that lets readers rate news stories, the online world found its way to Mr. Ferrari's door. (Actually, too many curiosity seekers arrived that day: the server that hosted his blog crashed hard when about 300,000 visitors tried to push through the door at about the same time.) YouTube did its part in spreading the word, by making available a replay of the AOL call that was part of Mr. Ferrari's appearance on the "Today" show on NBC.

YouTube was also the place to enjoy a new one-minute gem titled "A Comcast Technician Sleeping on My Couch." The technician, in Washington, had arrived at Brian Finkelstein's home to replace a faulty modem and had to call in to Comcast's central office. Placed on hold just like powerless customers, the technician fell asleep after an hour of waiting.

How should Mr. Finkelstein have responded? By writing a letter of complaint to some distant regulatory authority that will require years before it acts? Far more effective means are now at hand. He recorded, then uploaded the video clip with some humorous asides about missed appointments and unfulfilled promises, and got immediate satisfaction in the act of sharing. More than 500,000 viewers have watched Mr. Finkelstein's video "thank you" note to Comcast.

AOL and Comcast executives in charge of customer service may long for the good old days when they had to deal only with a finite number of federal regulators and state attorneys general, not a universe of millions of Web-savvy customers.

In 2004, AOL signed an agreement with the Federal Trade Commission about problems related to — care to make a guess? — subscriber's requests for cancellation. That was followed last year with an "assurance of discontinuance" reached with Eliot Spitzer, the New York attorney general, concerning — yes — subscriber's requests for cancellation. In both cases, investigations had revealed that AOL practiced a strange form of customer service, continuing to bill subscribers who had called to cancel, and had thought that they had done so, but who were marked down as "saved."

In the New York case, AOL agreed last August to pay a fine of $1.25 million and to put into place a new system, called third-party verification, in which any caller who starts off expressing a wish to cancel and ends up being persuaded to remain a member must declare this intention to a company hired to act as a disinterested witness.

AOL internally boasts to its employees that third-party verification is an "industry-first initiative to guarantee quality," but isn't this like a parolee showing off his electronic ankle bracelet as proof of how trustworthy he is? The public embarrassment of the settlement faded with time, but then Mr. Ferrari's five-minute recording undid 10 months of public relations repair work.

A company like AOL must now submit to unceasing accountability. On the Monday after the public debut of Mr. Ferrari's call to AOL, Scott Falconer, an AOL executive vice president, sent an e-mail message to company employees alerting them to Mr. Ferrari's blog post and warned, "On any interaction, you should assume that it could be posted on the Web."

The continuing customer-service problem at AOL is one beyond the reach of an attorney general's office: it is within AOL's rights to refuse to reorganize its procedures so that a customer can depart without having to run through a sales gantlet.

The employees who handle cancellation requests belong not to a Cancellations Processing Department but rather to AOL's "Retention Queue." They are referred to as "retention consultants" and "save employees," and their bonuses depend upon the number of members who are induced to stay with offers of new enticements and deals, not on the speed with which they help members leave.

After the embarrassment of Mr. Ferrari's call, an internal memo was issued that outlined a new "streamlined offer sequence" for handling cancellation requests, but the protocol still called for pitching two offers, if circumstances permitted.

When AOL customers call to cancel, the average duration of the call is 10 to 11 minutes. If we generously assume the shorter time, then the three million members who dropped AOL in the 12 months through March had to make an involuntary investment equivalent to 250 work-years in order to wriggle free.

Mr. Graham, the AOL spokesman, did not apologize about the company's deliberate decision to deny customers the option to cancel with a click of a button online. The customers' calls to cancel provide the company with an opportunity to lead customers to services or features they had not known about, enabling them, Mr. Graham said, to "find their Eureka moment" or to accept a tempting offer of a lower price.

Fifty percent of calls that begin with the intention to cancel end up with the member deciding to stay. If members decide to proceed with the cancellation, then the phone conversation can be treated as an exit interview, helping the company learn about what it should improve. Mr. Graham said that to do anything other than this would not be "good practice."

IF I were asked to think of an online company that provides exemplary customer service to its subscribers, Netflix, the DVD rental company, would come to mind well before AOL. When I took a look to see whether Netflix offered a way for a customer to cancel membership swiftly while online, I discovered that it provides a procedure — a click on a link, a click on a checkmark box, and one more click to complete — that would take no more than two seconds. No exit interviews, no last-ditch offers while I'm held captive on the phone.

Seeing how Netflix would be so protective of my time were I to leave makes me all the more unlikely to do so.

AOL Updates Retention "Offer Matrix"

Another gemstone that tumbled out of the AOL retention coal mine after Vinny's call is this update to the ominously monikered, "Offer Matrix." That's apparently the sequence of goodies doled out to customers to dissuade them from stopping service. Take the red prophylactic, Neo.

The upshot is that as of June 23, ten days after Vincent's call hit the net, AOL ordered its retention specialists to only make TWO offers during a cancellation call. If a member says no to both, the account must be canceled. What a nice idea, a policy against having protracted arguments with your customers.

Nestled amongst the ultimatums is this line:

If members...are trying to provoke the Consultant into being unprofessional, immediately cancel the account.

As a matter of conjecture, this would seem to reveal that there's some in the AOL retention hierarchy who suffer under the misbegotten notion that Vincent somehow goaded John into acting like a jerk. Wow, they STILL don't get it. See you in the welfare check line, fellas.

Also, gotta love the capital C in Conultants and M in Members. What are we now, managing a cult?!

Smoking gun, after the jump...
New Cancel Intent Offer Sequence To clarify recent changes to the offer matrix, we are issuing a new cancel intent offer sequence to ensure the most streamlined call process and best member experience possible. Starting June 23, 2006, the offer sequence outlined below MUST be used for ALL cancel intent calls. When a member calls in to cancel an AOL account, you are to ONLY pitch the member two (2) offers. If the member declines both offers, then you must cancel the member's account.

Keep in mind with this offer sequence:
You are allowed to offer additional options if the member proactively asks.
Exercise common sense. If members are irate, use strong language, interrupt offer pitch to say they're not interested, or are trying to provoke the Consultant into being unprofessional, immediately cancel the account.
Credit cannot be given to members already on or being put on a commit PI.
Remember to uphold the Keep It Real standards and be true Member Advocates!

How the New Offer Sequence Helps You
With the new streamlined offer sequence you are now able to pitch an offer more tailored to the member's needs - faster. This ensures a better member experience while also reducing your talk time.
For example, with the combination of the AOL Advantage messaging with the PI pitch, you are able to directly show the value of AOL with the PI that best fits the member's needs.

AOL Internal Memos, After Vinny's Call

A disgruntled employee mailed in a triptych of AOL internal emails that followed the cancellation call heard round the world, finally launching the call's recorder, Vincent, onto The Today Show, CNBC, CNN and even generated a comic strip, a Playboy parody video, and finally, our "Where is he now?" interview.

In these AOL company documents we obtained, Scott Falconer, EVP of Member Services, transmits a rah-rah to the troops, expresses concern and appreciation for their work, and reminds them to renew their dedication to Servicing the Member.

Underneath the gloppy gloo of corporate newspeak lurks an inconvenient truth: retention consultants need to keep a 60% saves rate to keep their job.

Gotta love Scott's touting of their "third party verification" as an "industry-first initiative." Yes, those would be the same Watchmen AOL had to hire when Spitzer went after the ISP for their anti-consumer retention policies last year.

There's also a tone in the memos that instead of an unmitigated PR disaster, AOL suffered a death of family member. Given the circumstances, that's not necessarily an inappropriate turn to take.

Source documents, after the jump...

Member Services,

Recently, some AOL Member Service calls were posted on the Internet that do not reflect our serious commitment to Member Advocacy. On any interaction, you should assume that it could be posted on the web.

You have tough goals, and no doubt it can be difficult to deal with a member calling very frustrated with some aspect of their service. But we must remember the importance of creating a good member experience by being straightforward, helpful, respectful, friendly, and positive during every interaction. Imagine yourself on the other end of the phone, how would you want to be treated? Being an advocate, on behalf of members, strengthens the very foundation of what AOL stands for. AOL is our members.

In every member contact, I need you to step into your Trusted Advisor role and respond to our members in a manner that shows we are on their side. I need you to really hear what our members are saying, actively listen to them as you work to meet their needs, establishing a sense of trust and mutual respect.

I am proud to be a part of this tremendous team and know it's your personal mission to watch over our members. Please continue to focus on building a strong business - a business with member advocacy at its core.


Scott Falconer
EVP, Member Services

As follow-up to the message I wrote you on Monday, June 19, I cannot stress enough the importance of maintaining our unwavering standards of ethical and effective service during every member interaction.

The aftermath of the unfortunate, disappointing and unacceptable behavior of one of our former colleagues ha been severe. Following the posting of the recorded call on the Internet, various television and print media have featured the story, including a lengthy interview this morning with the former AOL member on NBC's Today show and on CNBC, casting a very negative impression of AOL and the great work all of us in Member Services do on behalf of our members every day.

While fulfilling our Member Advocacy Commitment (the "F" in FOCUS) is Member Services' number one goal for 2006, there is no time like the present to reiterate the commitment each of us has pledged to uphold on behalf of our valued members:

As the voice of AOL, I promise to conduct myself with integrity at all times, provide excellent service, and ensure a world-class member experience on every call or interaction.

The foundation of AOL is our members. The foundation of our relationship with our members is Member Advocacy. By being uncompromising in our adherence to our standards of behavior, we will maintain a relationship of trust with our members - trust that we are on their side and will provide them with a high quality customer experience. As you can see, withholding our highest level of service from even one member is all it takes to damage the trust and credibility you have worked so hard to earn.

With all of the safeguards we have in place:
*recording and monitoring of member interactions
*our Keep it Real policy, which details our standards of professionalism and ethical behavior
* and Third Party Verification, an industry-first initiative to guarantee quality in every single retention call Any attempt to circumvent our member promise is a violation of our practices, and we maintain a zero tolerance policy for non-compliance.

Please use this unfortunate customer interaction as a reminder that we must maintain our standards of conduct at all times, maintain the goodwill of AOL, and most of all, that we must keep our promise to Fulfill our Member Advocacy Commitment!


Scott Falconer
EVP, Member Services

Dear Member Services Colleagues,

We have had a tough week here at Member Services. Although I am sitting far away from you here in Dulles, I am listening to your member interactions and I sincerely admire your response following the recent recorded call posted on the Internet. You are responding to member after member with even more consideration, respect and patience than before.

I hear many of you experiencing more challenges that you usually face with promises of recorded phone calls and the such. Amid all of this, you continue to demonstrate that respect and consideration are the rule, not the exception - all the while continuing to be the bedrock of our business.

As you continue upholding our commitment to Member Advocacy, I want you to know if you feel overwhelmed, please reach out to your leadership team for help. We're here for you as you are tirelessly here for our Members.

Before we head into the weekend, I want to take a moment to sincerely thank you. I want each of you to know, your commitment and faithfulness to our Members has not gone unnoticed.


Scott Falconer
EVP Member Services

Thanks to YouTube Fans, 'Nobody's Watching' May Return From the Dead
Bill Carter

For television writers and producers it has always been about getting your show on the air.

These days? Not so much.

At the moment the most talked-about situation comedy in the United States isn't on television at all. It's on your computer, though, and you can find it on www.youtube.com, where thousands of videos of all levels of quality are posted every day.

A comedy called — with intended irony, but not in the way that it has worked out — "Nobody's Watching" has been available on YouTube for about two weeks. As of yesterday it had been downloaded more than 300,000 times by a growing legion of fans.

Most remarkable of all, the talk that the show has generated has already caught the ears of executives at several networks, some of whom are wondering if maybe this is a virus they might enjoy getting infected with.

"Nobody's Watching" seems to be another example of a story that the Internet world loves: the power of the amateur over the professionals. It is also the story of "viral video," which is what YouTube is all about. People post a snippet of self-made video, and word spreads about how funny, shocking, stupid or embarrassing it is.

But the big story behind "Nobody's Watching" is that a sitcom left for dead 18 months ago may actually spring back to life — on actual television — because its creators were too passionate about it to let it die, and because it really might be funnier than most everything else that is passing for comedy on television these days.

The man at the center of the story is Bill Lawrence, creator of "Spin City" and "Scrubs." Mr. Lawrence knows how insane the television business can be. For example, for a few years after "Scrubs" made its debut on NBC in 2001, all Mr. Lawrence heard from network executives was that the show would never be a hit because it was a single-camera filmed comedy. Only multi-camera taped comedies worked, he was told.

In the last two years Mr. Lawrence said, he has gotten into arguments with network program chiefs who have told him, "The multi-camera comedy genre is dead."

Both stances struck Mr. Lawrence as ridiculous. "The challenge," he said in a telephone interview, "was to reinvent the genre."

That was the goal of "Nobody's Watching," which Mr. Lawrence conceived with two writing partners, Garrett Donovan and Neil Goldman, who had both worked on the Fox animated comedy "Family Guy."

Their thought was that most traditional sitcoms had begun failing not because of form but because of quality: they were all bad. And so they created a couple of characters, Derek and Will, from Ohio, who believed the same thing, and they decided to let them try to make a show of their own.

The gimmick is that the two characters come to California to make their own sitcom, but at the same time they are doing it in the form of a fake reality show conceived by some fictional network executives. The studio behind the (real) project was NBC Universal Television, so NBC had first crack at the show. But Mr. Lawrence said that it was clear from the start that NBC's programming boss, Kevin Reilly, though he liked the freshness of the idea, did not think it was appropriate for NBC.

So it wound up on the development slate of the WB network. That seemed a hospitable place because WB was youth oriented, and "Nobody's Watching" was a show definitely aimed at young viewers. Mr. Lawrence said all the younger executives at that network loved the show.

The show was cast with an eye toward keeping it fresh and innovative. The two leads, Taran Killam and Paul Campbell, had extensive improvisational backgrounds. Mr. Lawrence said he insisted they become inseparable for weeks leading up to shooting the pilot, and the actors indeed became fast friends.

The other important characters included a network boss named Jeff Tucker. (Mr. Lawrence credited Jeff Zucker, the chief executive of the NBC Universal Television Group, with being such a sport that he told them he didn't mind if they used his actual name.)

The pilot, which appears intact on YouTube, pulls no punches in disparaging sitcoms the creators clearly believe have damaged the genre. By name, "According to Jim," "Coach" and "Yes, Dear," among others, are mocked by the characters.

Mr. Lawrence acknowledged that that had caused a bit of a rift between him and Greg Garcia, creator of "Yes, Dear," though he said he loved and respected Mr. Garcia's newer comedy, "My Name Is Earl," which is shown on NBC.

All went well with "Nobody's Watching" until the testing phase. Then, Mr. Lawrence said, he and his partners journeyed to a "sweaty test-screening room" in the San Fernando Valley where issues were raised by the screeners about whether the premise was confusing. That seemed to Mr. Lawrence to be the unspoken concern of WB executives, although once it was spoken, the test audiences seemed to glom onto it.

Still, those young executives at WB encouraged him the show was a sure thing. Mr. Lawrence left for New York in May 2005, ready to hear "Nobody's Watching" announced on the WB schedule. "I was not in the business to fly to New York to feel like an idiot," he said. But that's what happened. WB passed on the show.

Now his precious baby was labeled a loser. "Who was going to pick up a show that the lowly WB had rejected?" Mr. Lawrence said. He and his partners pestered their agents to try to find it a home, only to have the agents begin to beg them not to make them mortify themselves that way.

In the eyes of everyone who counted, as Angela Bromstad, the head of the NBC Universal studio, put it, "It was essentially a dead project."

Mr. Lawrence resisted that fate, but he knew he could not hold onto his cast members very long. If they got other offers, they would be gone. Paul Adelstein, who played Jeff Tucker, was hired as a semi-regular on the Fox series "Prison Break."

The earth began to move just a few weeks ago. That's when Mr. Lawrence heard that the pilot had somehow made its way onto YouTube. He said he knows who posted the video but will not reveal the name because it looks as if it turned out to be a major favor.

In the first week that "Nobody's Watching" appeared on YouTube, it was not a featured video and attracted only about 4,000 viewings. But the reaction was powerfully positive from those who saw it, prompting the site to begin featuring it. Then the viewings exploded.

Even television executives have been downloading it. Ms. Bromstad said that the Comedy Central channel called last week and asked for a DVD of the pilot, and that ABC had also expressed interest.

But NBC retains a first shot at the show. Mr. Lawrence said that Mr. Reilly had called from his vacation in Mexico last week and said he wanted to take another look. The show's offbeat characters and rapid-fire dialogue might make it an ideal partner for another comedy on NBC, Ms. Bromstad said, a show the network has struggled to find a match for: Mr. Lawrence's "Scrubs."

Could it happen? Could a dead network show be revived because of the power of individuals supporting it on the Internet?

Ms. Bromstad was cautious in her prediction. "I think it will be interesting to find out," she said.

Mr. Lawrence said he believed this was exactly the kind of development that television needed to break all kinds of hidebound traditions, including presumptions about what people will and won't watch as comedy, and decisions that are made based on small organized focus groups.

"This is so much a better way to see if people are going to respond to a show," he said.

Of course even if a network does want to take a chance on "Nobody's Watching," there is still that issue of keeping the cast together. And Mr. Adelstein is already gone, right?

"We're hoping he gets killed off this season on 'Prison Break,' " Mr. Lawrence said. Mr. Adelstein plays a special agent on that series.

What Mr. Lawrence really wants right now is for so many people to start talking about his comedy pilot now featured on YouTube that some network executive will decide, "Now I can pick this up and I won't look dumb."

Site Tempts Video Makers by Offering to Pay Them
Peter Wayner

If creators of homemade Internet video get tired of producing something for nothing, they can post their work on Lulu.tv.

The Web site, which lets people upload and watch video clips, said last week that it would begin charging a $14.95 monthly fee for a "pro" account and putting 80 percent of that money into a special fund. Each month the money will be distributed among the video creators, with the biggest share going to the person who attracted the most viewers.

Free accounts with fewer features will be available, but those users will not share in the revenues. To get the process moving, the company is priming the pot with $5,000.

Other video sites are trying different approaches to bringing in cash. YouTube, the most popular of the genre, has a deal with NBC to promote its new television shows on a special section of the site. Revver.com will share 50 percent of its advertising revenue with those who post videos there.

Bob Young, the chief executive of Lulu Enterprises who also started the open source software company Red Hat, said Lulu.tv was an experiment inspired by the traditional television broadcasting world, where the networks buy shows from producers, and shows succeed or fail based on the ratings.

"The problem with that model is that it's very capital-intensive and it's so limited," he said. "On the Internet, there's an infinite number of channels. There's no reason why there can't be several hundreds of different 'Friends'-like shows because the market is so vast."

Lulu Enterprises also runs a print-on-demand bookstore (www.lulu.com) that pays 80 percent royalties to authors after they pay a binding fee and small per-page charge. Authors are responsible for their own editing and publicity.

Mr. Young said he wanted to find the most efficient way to get money directly into the hands of the people who created the most interesting videos, while working to block people who inflated their ratings with fake clicks.

Fred Vanderpoel, a creator of television commercials based in Hawaii, has posted lyrical videos on Lulu.tv in his off hours, documenting a triathlon and people like the musician Calvin Keys. He said the promise of payment would be a welcome incentive. "I'm interested in anything that will make money," he said.

But he said he was not yet sold on setting up a pro account. "I don't know if I would spend money to make money," he said.

Jon Gibs, the director of media analytics at Nielsen/NetRatings, said he was enthusiastic about the Lulu experiment. "If this ends up being a successful model, they could quite easily be making money off of advertising, and even move to a subscription model if it's high quality," he said.

The pro accounts might also help cut down on the number of junk videos found on other sites, Mr. Gibs said.

There will not be any advertising on the initial version of Lulu.tv. For now, Mr. Young said, the model should be as simple as possible. "Like any experiment, if you try to do too many things at once, it's hard to study the feedback," he said. "The more focused the experiment, the easier it is to see what works."


ABC Looks Beyond Upfront To DVR, Commercial Ratings Issues
David Goetzl and Wayne Friedman, Thursday

ABC has held discussions on the use of technology that would disable the fast-forward button on DVRs, according to ABC President of Advertising Sales Mike Shaw, with the primary goal to allow TV commercials to run as intended.

"I would love it if the MSOs, during the deployment of the new DVRs they're putting out there, would disable the fast-forward [button]," Shaw said.

While MSOs risk losing some of their DVR customers if fast-forwarding were blocked, Shaw said the cable operators--who are beefing up their own local ad sales operations--"are in the same business we're in." "They've got to sell ads too," he said. "So if everybody's skipping everybody's ads, that's not a long-term business model for them either."

Shaw also threw cold water on the idea that neutering the fast-forward option would result in a consumer backlash. He suggested that consumers prefer DVRs for their ability to facilitate on-demand viewing and not ad-zapping--and consumers might warm to the idea that anytime viewing brings with it a tradeoff in the form of unavoidable commercial viewing.

"I'm not so sure that the whole issue really is one of commercial avoidance," Shaw said. "It really is a matter of convenience--so you don't miss your favorite show. And quite frankly, we're just training a new generation of viewers to skip commercials because they can. I'm not sure that the driving reason to get a DVR in the first place is just to skip commercials. I don't fundamentally believe that. People can understand in order to have convenience and on-demand (options), that you can't skip commercials."

Shaw said it's crucial for ABC and networks to hold these discussions with MSOs while DVR penetration is still in its early stages. DVRs are at around 10 percent of U.S. TV households. "It's in our interest and the MSOs' interest to figure out something that works for the two of us," he said.

The frequently outspoken Shaw made his comments Wednesday in a post-upfront interview where he offered up another round of no-nonsense commentary.

Looking back on the protracted upfront, Shaw said he was surprised that competitors at CBS and Fox were so quick to fold the tent and accept buyers' refusals to pay for increased ratings generated from DVR viewing. Shaw had argued earlier in the spring that the ratings jumps--which have reached double-digit percentages for top shows--had value, and he intended to charge for them. He continued that position early in the upfront until it became clear the two other networks weren't willing to hold the line, and had agreed to negotiate on "live" ratings only.

"I'm sure they told their upper management in their two companies why it wasn't a good idea for them to do so," Shaw said. "They and their management must have decided that the same thing we thought was important wasn't important."

Shaw said if he knew he'd be the lone proponent for negotiating on time-shifted ratings, he might have changed course. "Obviously, going back to last February, if I knew nobody else on the entire sell-side of the equation was going to open their mouths besides us, I don't know if we would have gone down the same track," he said.

Some research executives--even at networks with sales departments that acted differently--had argued before the upfront that ads viewed in fast-forward mode generated value for advertisers, since consumers were at least partly exposed to their messages. But Shaw said ABC was only interested in finding a way to receive compensation for un-skipped ads.

ABC's upscale audience, coupled with a strong performance in "A" counties and in leading markets, made his network a must-buy. "If you were looking for those attributes, with the programming on ABC that we deliver, are you going to move those dollars to CBS?" he said. "It doesn't make sense."

No shrinking violet, Shaw is the only sales chief at a major network to speak to the media as part of an upfront postmortem.

As questions fade about whether to negotiate solely on DVR ratings, Shaw said ABC will move aggressively to make deals based on Nielsen's new "commercial ratings," set to be unveiled at the start of the new season. He said ABC was interested in possibly using them as a currency in this upfront, but buyers felt implementing the logistics in such an abbreviated time period wasn't feasible. "We were too late in bringing that to the market for practical reasons," Shaw said. But, he added, "it's going to transform how people buy and plan television."

But Shaw said ABC executives will be fanning out to agencies and advertisers over the next two weeks to present an analysis of commercial ratings data from the last six months, which presents ABC in a favorable light. He added that some scatter business may be written based on the new ratings.
http://publications.mediapost.com/in...rt_aid=45 264

TV Is Now Interactive, Minus Images, on the Web
Maria Aspan

Many "Rescue Me" viewers weren't happy, and they weren't being quiet about it.

The June 20 episode of the series, on FX, concluded with a violent sex scene between the main character, played by Denis Leary, and his estranged wife. Bloggers and other online fans protested, saying that the scene depicted — and appeared to endorse — rape.

So the executive producer of "Rescue Me," Peter Tolan, who had written the episode with Mr. Leary, resorted to an increasingly popular site for television writers who want to defend their editorial choices. Mr. Tolan went to the Internet.

In a June 21 posting on the discussion boards of the Web site Televisionwithoutpity.com Mr. Tolan tried to appease "Rescue Me" fans. "Welcome to writing a television drama," he wrote at the end of his lengthy first message. "We're trying to do something different," he explained. "Sometimes we succeed, sometimes we don't."

His readers might have retorted, "Welcome to the Internet." Mr. Tolan is not the first television writer to defend his choices online, nor even the first to communicate via Television Without Pity.

But his attempt to reach out to his show's viewers reflects a growing awareness among television writers of their shows' online communities, as well as of a variety of ways to engage them.

Mr. Tolan did not respond to requests for an interview. But according to John Solberg, a spokesman for FX, Mr. Tolan now regrets trying to explain himself on Television Without Pity. Rather than defusing the controversy over the episode, his response "stirred it up more," Mr. Solberg said.

"If he had to do it again," Mr. Solberg continued, "he wouldn't do it."

Tara Ariano, a co-founder and co-editor of Television Without Pity, said she was surprised by the amount of attention Mr. Tolan's response had received. But she also sounded bemused by writers like him who debate their online critics without apparently anticipating any negative response. "Any way that you interact with your fans online is potentially reckless," she said. "When you write a script like that, you've got to expect some controversy."

That type of controversy might have been easier for writers and producers like Mr. Tolan to ignore in the past. Internet fans — and occasional writer interaction with them — have existed since the birth of the Internet, although until recently they were mostly confined to science-fiction or cult series, like "Star Trek" and "Buffy the Vampire Slayer."

But in the age of widespread broadband access, iTunes video and video sites like Youtube.com, television viewers are migrating en masse to the Internet, looking not only to watch their favorite shows online but also for ways to discuss and engage with those shows.

As a result, the blogs, communities like livejournal.com and message boards devoted to television shows are becoming more popular — and mainstream — forums for viewer discussion and feedback. And the people behind the shows have taken note. "As fractured as the media market has become, the Internet has become a great means of rising above the noise," said James Duff, the creator and executive producer of "The Closer" on TNT.

"The Internet is going to turn television into the equivalent of AM radio," he predicted. "People will be talking about their shows and watching their shows in the same place."

Many writers welcome the increased feedback from online viewers. "Television writers really work in isolation," said Ronald D. Moore, who, with David Eick, is the executive producer of the Peabody Award-winning Sci-Fi Channel series "Battlestar Galactica."

"You have to fight this feeling that you're doing this show for yourself, your wife and your friends, who are the only people you watch it with," he said. "The Internet really changed the immediacy of the contact" between writers and viewers. Networks and producers are now cultivating that contact, often creating Internet-based content to accompany their series and attract online viewers.

Mr. Moore releases a podcast to accompany almost every new episode of "Battlestar Galactica," while Mr. Eick appears in mockumentary-style behind-the-scenes "video blogs" on the Sci-Fi Channel's Web site, www.scifi.com. Even highly rated, more mainstream series like ABC's "Grey's Anatomy" and NBC's "Office" have thriving online communities devoted to viewer discussion, which have yielded attempts by series creators to engage those communities via writers' blogs or cast members' pages on myspace.com.

Mr. Duff, who writes a blog about "The Closer" for TVGuide.com, said he focused primarily on the production, rather than on the specific episodes or storylines.

"I'm not using my blog to supplement the program," Mr. Duff said in an interview. "If you have to explain what you said in a television program, then you've left some stuff out."

According to Michael Ausiello, a senior writer for TV Guide and TVGuide.com, certain shows lend themselves more to attempts to cultivate Internet fandom than others. "Serialized shows succeed more," Mr. Ausiello said, citing ABC's "Lost" and "Veronica Mars," which is in transition from UPN to the new CW, as examples. "You're not going to see fans of the procedural shows up all night dissecting the shows," he said.

As more television show creators communicate with their online fans, they often discover that their shows already have passionate, and often critical, Internet communities. Television Without Pity, a site that Ms. Ariano began with Sarah D. Bunting and David T. Cole in 1998 as Dawsonswrap.com, is one of the most prominent and established of these forums, with about one million unique visitors a month, according to Ms. Ariano and Nielsen/NetRatings. The site blends irreverent commentary on episodes of shows ranging from "The Apprentice" to "The Sopranos" with an array of discussion boards devoted to almost every show ever broadcast.

Although many television writers may keep an eye on its boards, few get directly involved with the fans, Ms. Ariano said. Rob Thomas, the creator and executive producer of "Veronica Mars" and one of the few such "show runners" to post openly on the Web site's forums, said in an interview that Television Without Pity functioned "as a big focus group."

"They're very intense fans," he added, "the really devoted ones."

But, Mr. Thomas added ruefully, as viewer response to "Veronica Mars" became more critical in the show's second season, the experience of reading the site was "like being in a room with a thousand ex-girlfriends," he said.

"The new shine wore off," he added.

Mr. Thomas conceded that his awareness of the fans' reactions had occasionally influenced the way he wrote "Veronica Mars." Fans hated a second-season character played by Tessa Thompson, he said, leading him to overcompensate in an effort to make the character likable. "I feel like I sold out a little," Mr. Thomas said. "She became a little saintly by the end. If I had to do it over again, I'd leave her a little more complicated."

The consequences of Mr. Thomas's communication with his fans may be relatively unusual. But other writers and producers interviewed also said they regarded their fans with a mixture of gratitude and caution. Mr. Eick of "Battlestar Galactica" said online fandom could "be a very powerful weapon to help you develop the audience of your show."

"But," he continued, "you can't rely on it too heavily, or the show becomes too inside, and you end up marginalizing your larger audience."

Mr. Moore, who reads fan boards and occasionally responds to viewer concerns via his scifi.com blog, said he felt obligated to acknowledge the devotion of online "Galactica" fans. "I was a fan, too," he said. "I'm always impressed; they really pay attention. It forces you to deal with the criticism. It's easy to read the good stuff."

Missing You

Seems like it’s been forever since I’ve heard any of the music on the hundreds of out of print LP's stolen from my cars over the years. Like Lesley Duncan’s Moonbathing and Dirk Hamilton's various minor masterpieces and irreplaceable acetates and items so dear to a trembling heart. Stolen I say, not copied! Why couldn't I have been struck instead by dedicated uber pirates who in the dead of night open trunks and meticulously rip vinyl before gently returning them with surfaces swept clean, leaving me to wonder only why my discs were so pristine? What I would’ve given to be a "victim" of such reverence for ownership!

Hollywood Awakens to the Geriatric Demographic
Stephen Farber

WHEN Hollywood marketing gurus speak about "the older audience," they generally don't mean older by much. Box office tallies, for instance, are often reviewed with an eye to the percentage of moviegoers over and under the age of 25.

Studio specialty divisions like Fox Searchlight, Sony Classics and Focus Features might stretch the definition of "older" audiences to moviegoers between 35 and 50. Viewers in that range helped to make movies like "Sideways" and "The Constant Gardener" successful.

But where does that leave truly older audiences, fossils over 50 or 60 or even 70? To Hollywood these have been the perennially invisible men and women. Yet change is afoot. Some filmmakers and smaller distributors have discovered a secret society of mature moviegoers, and they have decided that this audience may actually be worth courting.

One of the most striking recent forays toward the older audience comes from Susan Seidelman, 53, who established herself as a hip young director when she made "Smithereens" in 1982 and "Desperately Seeking Susan" with Madonna in 1985.

Last year Ms. Seidelman made "Boynton Beach Club," a comedy about romance in a community for the elderly in Florida, starring a raft of 60-ish performers like Dyan Cannon, Sally Kellerman, Brenda Vaccaro, Len Cariou, Joe Bologna and Renée Taylor. Ms. Seidelman financed the movie independently, then tried to sell it to one of the studios.

"They all said to me, 'It's a nice movie, but we don't believe there's enough commercial potential in that demographic,' " Ms. Seidelman recalled. "That didn't compute for me. I'm over 50, and I go to the movies at least once a week. My mother is over 70, and she goes twice a week. My 16-year-old son barely goes at all. He's online all the time. I think people over 50 are the most under-represented audience." (Statistics compiled by the Motion Picture Association of America show that moviegoers 50 and older accounted for 23.9 percent of the total audience last year, up slightly from 21.3 percent in 2001.)

The film got the attention of audiences in South Florida and Palm Springs, Calif., when Ms. Seidelman engineered a limited release in those regions. Now, "Boynton Beach Club" will be seen around the country when Roadside Attractions releases it on Aug. 4.
Richard D. Zanuck, a veteran producer who is now 71, learned some lessons about the senior market 17 years ago when he and his wife, Lili Fini Zanuck, produced "Driving Miss Daisy" with Jessica Tandy and Morgan Freeman. No one wanted to finance it, but the movie went on to earn more than $100 million and won the Academy Award as best picture of 1989.

"After the movie succeeded," Mr. Zanuck recalled, "one executive told me that 'Driving Miss Daisy' was a 'nonrecurring phenomenon.' Millions of people went to the theater to see it. Why is that nonrecurring?"

Recent films that have tapped the older audience include "Mrs. Palfrey at the Claremont," with Joan Plowright as a widow moving into a rooming house in London; "The World's Fastest Indian," starring Anthony Hopkins as a motorcyclist whose speed puts younger cyclists to shame; and "Mrs. Henderson Presents," with Judi Dench and Bob Hoskins playing unlikely partners in a burlesque theater during World War II. On Sept. 15 ThinkFilm will release "Keeping Mum," which stars Maggie Smith as a murderous housekeeper working for Kristin Scott-Thomas and Rowan Atkinson.

By some accounts it was "Ladies in Lavender," which featured Dame Maggie and Dame Judi as two sisters living on the Cornwall coast, that really opened eyes to the potency of this neglected audience. The movie was filmed in the fall of 2003 and played at the Toronto International Film Festival in the fall of 2004. Michael McClellan, vice president and film booker for Landmark Theaters, saw it and felt strongly that people who frequented his art houses would respond to the movie.

"But the studios didn't see a value in a film that would appeal to a niche audience," he said. "I was baffled by their response. I felt the cast and the period setting had a definite appeal."

Partly because of Mr. McClellan's prodding and partly because the film did big business when it opened in Britain early 2005, Roadside Attractions finally decided to distribute the film. Originally Howard Cohen and Eric D'Arbeloff, the chief executives of the company, had turned it down along with everyone else.

"We listened to all the naysayers who said 'Ladies in Lavender' was a plotless movie about two old ladies," Mr. Cohen said. The film grossed just under $7 million in the United States, which is impressive for a British period film. Mr. McClellan pointed out that since most of the admissions were at elderly discount prices, the actual number of paying patrons was larger than the grosses indicated. "It appealed to a more literate, literary audience," Mr. McClellan said.

"Mrs. Palfrey" opened at the end of last year in New York and Los Angeles in order to qualify for the Academy Awards. The initial reviews were only fair, and the movie got lost in the Christmas rush. To make matters worse, the marketing people forgot to submit Dame Joan's name to the academy for consideration as best actress, so the movie seemed doomed.

But when it played at the Palm Springs Film Festival in January, it won the audience award in that desert retirement community. The distributor, Jour de Fête Films, booked it immediately after the festival in two Palm Springs theaters, where it played for three months and grossed close to $100,000, with minimal advertising in the local newspapers. Jour de Fête began to open it in other cities around the country, and in cities where the reviews were good, the grosses were astonishingly high. It did big business in Seattle, Detroit, Boston, Minneapolis, Santa Fe and other cities.

On June 2 "Mrs. Palfrey" reopened at one of Landmark's theaters in Los Angeles and out-grossed three newer movies at the multiplex. It is now in its fourth week of reissue, and it will also reopen at the Quad Cinema in New York this summer. The film's director, Dan Ireland, commented: "How many films are made for an elderly audience? They respond because the film treats the older characters with humanity."

Most distributors, however, are still skeptical about this audience. When Ms. Seidelman initially found no buyers for "Boynton Beach Club," she decided to open the film herself in a couple of areas with a large elderly population. "I was calling the newspapers to place the ads," Ms. Seidelman reported. "My mother was handing out flyers and putting up posters in delis in West Palm Beach." (Her mother, Florence Seidelman, had suggested the story and is credited as one of the film's producers.) The movie earned $100,000 in its first week in just 10 theaters.

Mr. Cohen and Mr. D'Arbeloff had originally turned down the movie, just as they had turned down "Ladies in Lavender," but they started paying attention to the grosses. "The per-screen average jumped out at me," Mr. Cohen recalled. "And the movie was not just playing in art houses." In a mall in Orlando, Fla., Ms. Seidelman observed, the movie outgrossed "The Da Vinci Code." So Roadside Attractions decided to pick the film up for national distribution.

"It's an event movie for older audiences because it's about dating and sex," Mr. Cohen said. He noted that Dyan Cannon was in one of the emblematic movies about the sexual revolution of the 60's, "Bob & Carol & Ted & Alice." "Now she's in an emblematic movie about senior sexuality," he observed. "This movie really shows that 60 is the new 40," Mr. D'Arbeloff added.

Oliver Stone's 'World Trade Center' Seeks Truth in the Rubble
David M. Halbfinger

INSIDE a flimsy temporary office on a dusty movie lot here, a young man sits in front of a computer, showing off a three-dimensional rendering of the collapse of the World Trade Center. It was assembled by merging the blueprints for the twin towers — the before-picture, you might say — with a vast collection of measurements, including some taken with infrared laser scans from an airplane 5,000 feet above Lower Manhattan, just days after 9/11.

With a few clicks, Ron Frankel, who has the title pre-visualization supervisor for Oliver Stone's new 9/11 film, begins to illustrate the circuitous path that five Port Authority police officers took into the trade center's subterranean concourse, until the towers above them fell, killing all but two.

As Mr. Frankel speaks, behind his back a burly man has wandered through the door. He is Will Jimeno, one of the two officers who survived. He has been a constant presence on the movie set, scooting from here to there in a golf cart, bantering with the actor playing him and with Mr. Stone, answering questions and offering suggestions — a consultant and court jester. But he has never seen this demonstration before, he says, pulling up a chair.

Mr. Frankel, continuing with his impromptu show-and-tell, says the floor beneath Mr. Jimeno, Sgt. John McLoughlin and their three fellow officers dropped some 60 feet, creating a 90-foot ravine in the underground inferno. The difference between instant death and a chance at life, for each of the men, was a matter of inches.

Mr. Jimeno sits quietly, absorbing what he's just seen and heard. His eyes moisten. "I didn't know this," he says. "I didn't know this. I didn't know there was a drop-off here. This is an explanation I never knew about." He pauses. "We try not to ponder on it, because we're alive. But it answers some questions. That, really, played a big part in us being here." The countless measurements taken and calculations made by scientists and government agencies helped ground zero rescue workers pinpoint dangerous areas in the weeks after the attacks. The data also provided a fuller historical record of how the buildings collapsed and lessons for future architects and engineers.

Only a movie budgeted as mass entertainment, though, could harness all that costly information to reconstruct the point of view of two severely injured and bewildered men, who didn't even know the twin towers had been flattened until rescuers lifted them to the surface many hours later.

Their story, and those of their families, their rescuers and the three men killed alongside them, is the subject of Mr. Stone's "World Trade Center," which Paramount plans to release on Aug. 9.

The quandary that Paramount executives face is a familiar one now, a few months after Universal's "United 93" became the first 9/11 movie to enter wide theatrical release: How do you market a movie like this without offending audiences or violating the film's intentions? Carefully of course, but "there's no playbook," said Gerry Rich, Paramount's worldwide marketing chief. In New York and New Jersey, for example, there will be no billboards or subway signs, which could otherwise hit, quite literally, too close to home. And the studio is running all of its materials by a group of survivors to avoid offending sensibilities.

But Paramount, naturally, wants as wide an audience as possible for this film.

Nicolas Cage, who plays the taciturn Sergeant McLoughlin, says the movie is not meant to entertain. "I see it as storytelling which depicts history," he says. "This is what happened. Look at it. 'Yeah, I remember that.' Generation after generation goes by, they'll have 'United 93,' 'World Trade Center,' to recall that history."

Whether Mr. Stone set out to make a historical drama or a dramatic history isn't entirely clear. Mr. Jimeno and Mr. McLoughlin, who have both since retired from the Port Authority, say the script and the production took very few liberties except for the sake of time compression.

"We're still nervous," Mr. Jimeno said last fall, after shooting had shifted from New York and New Jersey to an old airplane hangar near Marina del Rey. "It's still Hollywood. But Oliver — it's to the point where he drives me crazy, trying to get things right."

There are many people of course who have been driven a little crazy for other reasons by some of Mr. Stone's more controversial films, "JFK," "Natural Born Killers" and "Nixon" chief among them. But in several interviews, sounding variously weary, wounded and either self-deprecating or defensive, Mr. Stone spoke as if his days of deliberate provocation were behind him.

"I stopped," he says simply. "I stopped."

His new film, he says, just might go over as well in Kansas as in Boston, or, for that matter, in Paris or Madrid. "This is not a political film," he insists. "The mantra is 'This is not a political film.' Why can't I stay on message for once in a while? Why do I have to take detours all the time?"

He said he just wants to depict the plain facts of what happened on Sept. 11. "It seems to me that the event was mythologized by both political sides, into something that they used for political gain," he says. "And I think one of the benefits of this movie is that it reminds us of what actually happened that day, in a very realistic sense."

"We show people being killed, and we show people who are not killed, and the fine line that divides them," he continues. "How many men saved those two lives? Hundreds. These guys went into that twisted mass, and it very clearly could've fallen down on them, and struggled all night for hours to get them out."

By contrast Paul Haggis is directing the adaptation of Richard Clarke's book on the causes of 9/11, "Against All Enemies," for the producer John Calley and Columbia Pictures.

Asked if that weren't the kind of film he might once have tried to tackle, Mr. Stone first scoffs: "I couldn't do it. I'd be burned alive." Then he adds: "This is not a political film. That's the mantra they handed me."

Mr. Stone says he particularly owes his producers, Michael Shamberg and Stacy Sher, for taking a chance on him at a time when he had gone cold in Hollywood after a string of commercial and critical disappointments culminating in the epic "Alexander" in 2004. "They believed in me at a time when other people did not, frankly," he says. " 'Alexander' was cold-turkeyed in this town, I think unfairly, but it was, and I took a hit. Nobody's your friend, nobody wants to talk to you."

Mr. Stone came forward asking to direct "World Trade Center" just about a year ago. He decided it would require a different approach from, say, "JFK." "The Kennedy assassination was 40 years ago, and look at the heat there, a tremendous amount of heat," he says. "I was trying to do my best to give an alternative version of what I thought might have happened, but it wasn't understood. It was taken very literally. 'Platoon,' I went back to a Vietnam that I saw quite literally, but it was a twisted time in our history.

"This — this is a fresh wound, and it had to be cauterized in a certain way. This is a very specific story. The details are the details are the details."

The details that led to the movie's making began in April 2004, when Andrea Berloff, a screenwriter, pitched a story about Mr. Jimeno's and Mr. McLoughlin's "transformation in the hole" to Ms. Sher and Mr. Shamberg. Ms. Berloff, who had no produced credits, was candid about two things:

"I didn't want to see the planes hit the buildings. We've seen enough of that footage forever. It's not adding anything new at this point. I also said I don't know how to end the movie, because there are 10 endings to the story. What happened to John and Will in that hospital could be a movie unto itself. Will flatlined twice, and was still there on Halloween. And John was read his last rites twice."

The producer Debra Hill, who had optioned the rights to the two men's stories, was listening in on the line. When Ms. Berloff was done, she recalls, Ms. Hill said, "I don't want to speak out of turn, but I think we should hire you."

Ms. Berloff and Mr. Shamberg headed to New York to meet with the two officers and their families, and to visit both the Port Authority Bus Terminal, where the men had once patrolled, and ground zero. In long sessions with the Jimenos in Clifton, N.J., and with the McLoughlins in Goshen, N.Y., Ms. Berloff says, she quickly learned that both families, despite the nearly three years that had elapsed, remained emotionally raw. "Within 20 minutes of starting to talk they were losing it," she says. "We all just sat and cried together for a week."

Before leaving, Ms. Berloff says, she felt she had imposed on, exhausted and bonded with the two families so much that she warned them that in all likelihood she would not be around for the making of the movie. "I had to say, 'The writer usually gets fired, so I can't guarantee I'll be there at the end,' " she recalls. "But I'd recorded the whole thing, and I said they shouldn't have to go through this with a bunch of writers. They'd have the transcripts to work from."

Ms. Berloff returned to Los Angeles, stared at her walls for a month, she says, and then wrote a script in five weeks, turning it in two days before her October wedding.

Ms. Hill died of cancer the following March. Mr. Shamberg and Ms. Sher moved ahead, circulating the script to Kevin Huvane at Creative Artists Agency, and to his partners Bryan Lourd and Richard Lovett. Mr. Lourd gave it to Mr. Stone, Mr. Lovett to his client Mr. Cage.

The agency also represents Maria Bello, who plays Mr. McLoughlin's wife, Donna, and Maggie Gyllenhaal, who plays Alison Jimeno. Ms. Gyllenhaal, who'd just seen "Crash," suggested Michael Peña, who made a lasting impression in a few scenes as a locksmith with a young daughter. (Mr. Peña did a double-take, he confesses, upon hearing that Mr. Stone was directing a 9/11 movie: "I'm like, let me read it first — just because you're aware of the kind of movies that he does.")

Given the need to shoot exteriors in New York in September, the cast and crew raced to get ready for shooting. The actors aimed for accuracy in different ways. Mr. Cage says he focused on getting Mr. McLoughlin's New York accent right, and spent time in a sense-deprivation tank in Venice, Calif., to get a hint of the fear and claustrophobia one might experience after hours immobile and in pain in the dark. Mr. Peña all but moved in with Mr. Jimeno.

Ms. Gyllenhaal had her own problems to solve. That April she had stepped on a third rail, saying on a red carpet at the Tribeca Film Festival that "America has done reprehensible things and is responsible in some way" for 9/11. She apologized publicly, then met privately with the Jimenos, offering to withdraw if they objected to her involvement. "We started to get into politics a little bit, and Will said, 'I don't care what your politics are,' " she recalls.

With Mr. Jimeno and Mr. McLoughlin vouching for the filmmakers, more rescuers asked to be included, meaning not only that dozens of New York uniformed officers would fly to Los Angeles to re-enact the rescue of the two men, but that there were more sources of information to replace Ms. Berloff's best guesses with vivid memories.

Ms. Bello, who had gone to St. Vincent's Hospital on 9/11 with her mother, a nurse, and waited in vain for the expected deluge of injured to arrive, contributed a scene after learning from Donna McLoughlin of a poignant encounter she had had while waiting for her husband to arrive at Bellevue.

Some of the film's most fictitious-seeming moments are authentic. Mr. Jimeno's account of his ordeal included a Castaneda-like vision in which Jesus appeared with a water bottle in hand. But Mr. McLoughlin recalled no hallucinations, or nightmares, or dreams: only thoughts of his family. "He kept saying I'm sorry — 20 years in the job, never gotten hurt, and here we go and I'm not going to be there for you," Ms. Berloff says. "So we tried to dramatize that."

Nearly everything else in the movie is straight out of Mr. Jimeno's and Mr. McLoughlin's now oft-told story: the Promethean hole in the ground, with fireballs and overheated pistol rounds going off at random; the hundreds of rescuers, with a few standouts, like the dissolute paramedic with a lapsed license who redeems himself as he digs to reach Mr. Jimeno.

And the former marine who leaves his job as a suburban accountant, rushes to church, then dons his pressed battle fatigues, stops at a barbershop for a high-and-tight, heads downtown past barricades saying he's needed and winds up tiptoeing through the perilous heap calling out "United States Marines" until Mr. Jimeno hears him and responds. Mr. Stone says he is adding a note at the end of the film, revealing that the marine, David Karnes, re-enlisted and served two tours of duty in Iraq, because test audiences believed he was a Hollywood invention.

Reality can be just as gushingly sentimental as the sappiest movie, Mr. Stone acknowledges, especially when the storytellers are uniformed officers in New York who lived through 9/11. And particularly when it comes to Mr. Jimeno and Mr. McLoughlin, who have struggled with the awkwardness of being singled out as heroes when so many others died similarly doing their duty, and when so many more rescued them.

"You could argue the guys don't do much, they get pinned, so what," Mr. Stone says. "There will be those type of people. I say there is heroism. Here you see this image of these poor men approaching the tower, with no equipment, just their bodies, and they don't know what the hell they're doing, and they're going up into this inferno, they're like babies. You feel saddened, you feel sorry for them. They don't have a chance."

Mr. Cage says he once mentioned to Mr. Stone that their audience had lived through 9/11: "That it's not like 'Platoon,' where most of us don't know what it's like to be in the jungle."

"He said, 'Well what's your point?' " Mr. Cage says. "And my point is that we all walk into buildings every day, and we were there, and we saw it on TV, so this is going to be very cathartic and a little bit hard for people."

Despite its fireballs, shudders and booms, Mr. Stone's film is also unusually delicate, from the shadowy intimacy of the officers' early-morning awakenings to the solemnity of their ride downtown in a commandeered city bus, to the struggle of their wives to cope with hours of uncertainty and then with false reports of their husbands' safety.

"It's not about the World Trade Center, really. It's about any man or woman faced with the end of their lives, and how they survive," Mr. Stone says. "I did it for a reason. I did it because emotionally it hit me. I loved the simplicity and modesty of this movie.

"I hope the movie does well," he adds, "even if they say 'in spite of Oliver Stone.' "

Signs of Life at the Box Office (if Not a Full Recovery)
Sharon Waxman

Three teenagers loitered last week outside the ticket booth of an AMC Theater at the upscale pedestrian mall here, skateboards underfoot, the marquee beckoning overhead.

They were weighing whether to see "Superman Returns," the latest big-budget, Hollywood extravaganza to come hurtling out of the gate.

Siegfried Bodolai, 16, called Siggy, had already seen the film once and found it old-fashioned, though he is enough of a movie buff to consider seeing it again. "We're more the 'Spider-Man' 'X-Men' generation," he said. His friend Daniel Andres, 17, was in no great hurry to see "Superman." "The movies are repetitive," he said. "It seems like there's about eight stories. It's like I'm seeing the same movie, almost."

After abandoning theaters in worrying numbers last summer, American moviegoers are returning to the multiplex, steadily if slowly. Through the first 25 weeks of the year, domestic box-office revenue — helped by a boost in ticket prices — was up nearly 5 percent, to $4.6 billion, though it still trailed 2004, according to the tracking company Exhibitor Relations. Movie attendance was up about 1.65 percent to 699 million for the first 25 weeks, after a sharp decline the year before.

The totals grew over the weekend as Warner Brothers' "Superman Returns" took in $84 million over a six-day period that began with its release on Tuesday night, while 20th Century Fox's "Devil Wears Prada" has had $27 million in ticket sales since Friday. For the seventh consecutive weekend total ticket sales in the United States outpaced last year's disappointing performance.

The film industry continues to fret over competition from video games, home entertainment systems and the Internet, but the recovery provides evidence that going out to see movies on a giant, communal screen remains a central part of the American leisure experience.

But that's because Hollywood is trying harder.

The week's performance by "Superman Returns," a $210 million-budget revival of the old superhero franchise, has been typical of the summer so far: big movies yielding reasonably strong box-office returns, though far from the high-water marks of the recent past. During a similar period in 2004, for instance, "Spider-Man 2" took in nearly twice as much as "Superman," $152 million, for Sony Pictures Entertainment.

"The good news is the bleeding has stopped from last year," said Bruce Friend, managing director of OTX Entertainment, an online research firm. "But it hasn't rebounded to the levels of two years ago."

Hollywood's next shot at a runaway hit comes on Friday, when Walt Disney Pictures releases "Pirates of the Caribbean 2: Dead Man's Chest." With the stars Johnny Depp, Orlando Bloom and Keira Knightley, the film has strong female appeal, and that points toward one of Hollywood's major survival strategies.

As the once reliable young male audience continues to drift, studios have been trying to widen their demographic appeal. A study last year by OTX found that young men saw 24 percent fewer movies in summer 2005 than they did in summer 2003, a finding reinforced in a new poll by Nielsen Entertainment.

The shift was apparent this summer in an adult-oriented blockbuster like "The Da Vinci Code"; or in a romantic comedy like "The Break-Up," which appeals to couples; or in a horror film like "The Omen," which draws adolescent girls; or in a chick-flick comedy like "The Devil Wears Prada." Those movies, though hardly atypical, represent a more eclectic mix than 2003, which brought "Terminator 3: Rise of the Machines," "The Matrix Reloaded," "Bad Boys II" and "S.W.A.T.

The audience for "Superman" was weighted heavily toward moviegoers over 25, said Dan Fellman, Warner's president for theatrical distribution. "Superman is skewing older as a character," he said.

With young men becoming less reliable, finding a broader audience is necessary, some say in Hollywood. Jeff Blake, vice chairman for Sony Pictures Entertainment, said: "I think for a long while everyone was dining on the fact that young males were pretty much available every single weekend. It's a matter of which film they choose.

"It was almost as if we lived in a world where this group would go to the multiplex every week and choose what they see. Now they don't necessarily go to the multiplex every week, and we have to convince them we have something exciting for them to see."

Mr. Blake pointed out that excitement among moviegoers was "infectious," as people drawn to theaters by one film are often snared by an attractive trailer for another.

"When you make movies people want to see, they flock to them," said Bruce Snyder, president for distribution for Fox. "And you have to speak about one movie at a time. That's so key."

In fighting its battles one movie at a time, Hollywood has been helped by the international audience, which flocked to some films that were struggling to hit their marks in the United States. Paramount's "Mission: Impossible 3," for instance, took in $205 million at the foreign box office, but only $131 million domestically; Sony's "The Da Vinci Code" had an astonishing $495 million in ticket sales abroad, compared with about $210 million at home.

But none of this resolves the problem of how to keep American moviegoers coming back to theaters. One new study raises the specter of a new core audience of movie devotees, which it calls "über-media consumers." The study, conducted by Nielsen Entertainment and released in June, suggested that those who go to the movies most often, 10 times per year or more, are also those who most frequently buy DVD's, which are usually considered a chief rival for box-office dollars.

In a poll of 2,800 moviegoers who bought tickets online, the study found that 83 percent of them also "frequently" or "sometimes" buy the DVD of the movie they saw in the theater.

In other words, the study noted, seeing movies at the theater and at home "are not mutually exclusive occurrences."

Adrienne Becker, the general manager of Nielsen Entertainment's strategic development group, who conducted the study, said the data argued strongly for a need to protect the theatrical releases of movies by not competing with a simultaneously released DVD. Thirty-six percent of those polled said they would skip the multiplex if movies were released simultaneously on DVD, which Ms. Becker said would be "devastating" to theatrical exhibitors.

For the moment Hollywood seems to have backed away from the notion of releasing movies simultaneously on different platforms, with some studios preparing to unveil pricier video-on-demand services that offer movies within several weeks of the theatrical release.

But Ms. Becker warned that success over the long haul would require more creativity in giving viewers more control over how they choose their entertainment.

"It would be very irresponsible to say, 'Look at the summer box office, all things are wonderful,' " she said. "There are fundamental, transformative things going on in the way people consume."

Copy Protection Hole In Blu-ray and HD DVD Movies

The Blu-ray Disc and HD DVD are new data carriers for high-resolution motion pictures. For fear of piracy, Hollywood had the developers install a cornucopia of copy prevention mechanisms on them. For instance, the film data on the disks are protected by means of the Advanced Access Content System (AACS). Digital output only reaches the monitor via connections encrypted by means of High Bandwidth Digital Content Protection (HDCP). This copy protection chain is designed to ensure that no unencrypted data can be grabbed.

But this security chain has a giant hole. Computer magazine c't has discovered that the first software players running on Windows XP allow screenshots of the movies to be created in full resolution. To do so, you only need to press the Print key on your keyboard while the movie is running. Such a screenshot function could then be automated to produce copies of HD movies both from Blu-ray Discs and from HD DVDs picture by picture. As c't calculated, the performance of current PC systems is sufficient for a clean recording using this procedure. Once a pirate has all of the individual pictures, they can be put together to create a complete movie and mixed with the audio track that is grabbed separately.

This copy protection hole affects both Sony's first Blu-ray PC Vaio VGC-RC 204 and Toshiba's first HD DVD notebook Qosmio G30. Both of them use special OEM versions of Intervideo's WinDVD player software.

When asked to comment, Toshiba confirmed the security hole found by c't, which affects the computers already sold, and announced updates for the player software and graphics card driver. These new software versions should disable the screenshot function.
According to Toshiba, however, the original WinDVD version does not violate the security stipulations in the AACS LA. Toshiba therefore does not expect the first WinDVD version to be blocked by an update of the AACS key. By switching the keys, which would be necessary for new HD DVD movies, the AACS LA could force users to update their software, thus closing the copy protection hole.

Share your own special way

Device Records Smells To Play Back Later
Paul Marks

IMAGINE being able to record a smell and play it back later, just as you can with sounds or images.

Engineers at the Tokyo Institute of Technology in Japan are building an odour recorder capable of doing just that. Simply point the gadget at a freshly baked cookie, for example, and it will analyse its odour and reproduce it for you using a host of non-toxic chemicals.

The device could be used to improve online shopping by allowing you to sniff foods or fragrances before you buy, to add an extra dimension to virtual reality environments and even to assist military doctors treating soldiers remotely by recreating bile, blood or urine odours that might help a diagnosis.

While a number of companies have produced aroma generators designed to enhance computer games or TV shows, they have failed commercially because they have been very limited in the range of smells they can produce, says Pambuk Somboon of the Tokyo team.

So he has done away with pre-prepared smells and developed a system that records and later reproduces the odours. It's no easy task: "In video, you just need to record shades of red, green and blue," he says. "But humans have 347 olfactory sensors, so we need a lot of source chemicals."

Somboon's system will use 15 chemical-sensing microchips, or electronic noses, to pick up a broad range of aromas. These are then used to create a digital recipe from a set of 96 chemicals that can be chosen according to the purpose of each individual gadget. When you want to replay a smell, drops from the relevant vials are mixed, heated and vaporised. In tests so far, the system has successfully recorded and reproduced the smell of orange, lemon, apple, banana and melon. "We can even tell a green apple from a red apple," Somboon says.

Smell researchers are interested in the institute's work. "It would be interesting to know just what range of smells this new system can detect and recreate," says Stephen Brewster, a computer scientist at the University of Glasgow, UK, who is studying whether smell can be used to help people quickly identify digital photos without opening them. "This could be an interesting delivery system for our work."

Opera Press Releases

Ubuntu Makes Opera 9 available for easy download and installation

After the launch of Ubuntu 6.06 LTS, Canonical is pleased to announce the availability of Opera 9 for Ubuntu. With just a few clicks of the mouse, all Ubuntu users can download and install the latest version of the Opera browser, which was released to critical acclaim on June 20.

With its innovative technology and ease of use, Opera is a perfect match for Ubuntu. The two organizations have similar beliefs and values that are woven into their products.

"Opera 9 provides the most advanced browsing experience on Linux today," said Håkon Wium Lie, CTO, Opera Software and long-time Ubuntu user. "We've had a Linux browser for a long time, but Opera 9 includes new optimizations specifically for the platform. I think Ubuntu users will like how easy it is to install Opera. It gives me yet another reason to love Ubuntu."

"As a part of our programme to deliver a choice of the very best applications available, we have worked closely with the Opera team, and are able to make the very latest version immediately," said Malcolm Yates, Partner and ISV Manager at Canonical Ltd. "With a few easy clicks from the Ubuntu desktop, all Ubuntu 6.06 LTS users can install Opera 9."

By using the Ubuntu Add / Remove Programs feature, users can choose to install a wide variety of applications. This announcement continues the drive to ensure Ubuntu gives real choice and real flexibility as well as an easy to use interface that everyone can use.

Ubuntu users can learn more about what the Opera browser can do at http://www.opera.com/features.

China Restricts Internet Cafe Access

China has launched a campaign to enforce curfews at Internet cafes before schools let students out on summer vacation, a news report said Monday.

The focus of the weeklong crackdown, launched Saturday, "is to prevent the entry of kids under the age of 18," said a Culture Ministry official quoted by the China Daily newspaper.

It said violators could face penalties ranging from being shut down for 15 days to losing their license to operate.

Internet cafes are required to limit the hours that underage customers can spend online and only allow in a few minors at a time.

China has the world's second-biggest population of Internet users after the United States, with 110 million people online, but tries to regulate what Web surfers can see online.

Rules on children in Internet cafes were imposed after Chinese officials warned that students were spending too much time playing online games and were getting access to violent and obscene material.

Summer vacation for most Chinese schools begins in mid-July.
http://hosted.ap.org/dynamic/stories...LATE=DE FAULT

China Cracks Down On Blogs, Search Engines

China's Internet regulators are stepping up controls on blogs and search engines to block material it considers unlawful or immoral, the government said Friday.

"As more and more illegal and unhealthy information spreads through the blog and search engine, we will take effective measures to put the BBS, blog and search engine under control," said Cai Wu, director of the Information Office of China's Cabinet, quoted by the official Xinhua News Agency.

The government will step up research on monitoring technology and issue "admittance standards" for blogs, the report said, without providing any details.

China encourages Internet use for business and education but tries to block access to obscene or subversive material. It has the world's second-biggest population of Internet users after the United States, with 111 million people online.

China launched a campaign in February to "purify the environment" of the Internet and mobile communications, Xinhua said.

China has 37 million Web logs, or blogs, Xinhua said, citing a study by Beijing's Tsinghua University. It said that number was expected to nearly double this year to 60 million.

The government has launched repeated crackdowns on online material considered pornographic.


Can China Create Its Own Hollywood?
By Tim Wu

China has one of the world's most straightforward industrial policies: Identify successful foreign industries, determine what makes them successful, and clone them. This strategy has worked well in telecommunications, where China's Huawei makes products so similar to Cisco's that Cisco has sued for patent and copyright infringement. Similarly, China Unicom just launched the RedBerry, which, as you might guess, is a cheaper version of the BlackBerry. Next on the list: copying Hollywood.

Throughout the 1980s and 1990s, China won over the film world by developing quality art-house movies that brought home international festival prizes. But the American commercial film industry offers more than a Palme d'Or: It's lucrative both domestically and overseas, and it serves to spread American ideals and culture. That's why both the Chinese film industry and Chinese politicians want their own version of Hollywood, to create blockbusters of Titanicproportions. It's a strategy that's half-succeeding; the Chinese industry is managing to make a few films that sell in the United States. But the other side of Hollywood—domestic box-office success—is proving elusive. As a result, the Chinese industry is increasingly making films designed to fit American tastes, like the Wal-Mart factories in China that make baseball mitts for American Little-Leaguers.

So far, China's main strategy has been to repurpose its existing assets with filmmaker Zhang Yimou at the forefront of the movement. Zhang is known to film snobs as a director of movies like the critically acclaimed Raise the Red Lantern—productions about the bitterness of life consisting mainly of actress Gong Li looking forlorn and tormented. But that's the old Zhang. Over the last few years he's metamorphosed into a big-time martial-arts director, responsible for two successes (or sellouts, depending on your point of view): the epics Hero and House of Flying Daggers, which have made the bulk of their money in the United States.

The retooling strategy, however, doesn't always work. Take the 2005 film The Promise, which put Chen Kai Ge, director of Cannes-winning Farewell My Concubine, at the helm of a martial-arts romance. In addition to an A-list Chinese director, the movie boasted the largest budget in Chinese film history and starred Hong Kong actors Cecilia Cheng and Nicolas Tse. What could go wrong? Everything. The Promise features a hero who struggles to act through his giant golden helmet, costumes more Flash Gordon than Tang dynasty, and some of the worst CGI since Jar-Jar Binks. The Weinstein brothers planned to distribute the film in the United States but pulled out after getting a whiff of it.

China's not alone in producing such duds; Hollywood has its share of Jersey Girls, too. But the Chinese movie industry is further hampered by the fact that it's very difficult for a big film to make money without international distribution. While successful American films make money in the domestic market, and supplement that with ticket sales overseas, the big Chinese films need foreign distribution to break even. Ironically, government policies designed to protect the film industry brought about this state of affairs.

Last week I was in the Beijing cafe Zha Zha, and I asked the barista how often she goes to the movies. "I've never been to a movie theater," she replied—encapsulating the problem. In China, there is less than one movie theater for every 1 million people: That's something like 2,000 people for every seat.

Why so few theaters? There would be more movie theaters if they made more money, but theaters can only make money if they have something good to show. For trade and ideological reasons, China maintains a quota of about 20 foreign films a year; it even blocks films made with Chinese actors, like Memoirs of a Geisha.

Censorship policy adds another level of unpredictability. The Da Vinci Code made its world debut in China (four hours before Cannes). The movie seemed poised to become a giant domestic hit, but on June 9, theaters were abruptly ordered to stop screening the film. No one knows exactly why.

Finally, the bootleg DVD industry doesn't help. As most people know, bootleg DVDs are everywhere in China; my local grocery store in Beijing carries everything from Birth of a Nation to The Bicycle Thief, all for about $1 apiece. Film enthusiasts benefit, but the DVDs compete with films that are still in theaters and gut legitimate DVD sales—a key source of revenue in the United States. While Hollywood complains about losing money to bootleg DVDs, the Chinese bootlegs hurt the local industry, too. The greatest consequence may be cultural: The omnipresence of bootleg DVDs has created a generation of Chinese consumers accustomed to watching cheap DVDs on inexpensive large-screen TVs instead of buying popcorn and movie tickets.

What does this all mean for Chinese film? It means America is the best place for a Chinese film to make money, after all. We'll likely see less funding for films that Chinese people enjoy—like those of director Feng Xiao-Gang, filled with quirky Chinese humor—and more movies designed for American tastes (kung-fu aplenty). For better or for worse, it's less beating Hollywood than serving it. Consider it the Kung Pao Chickenization of Chinese film.

Piracy Hurting China's Own Industries
Joe McDonald

Kingsoft Corp.'s English-Chinese dictionary program is used on most of China's 60 million PCs. That's the good news. The bad news: Kingsoft doesn't make any money from it, because 90 percent of those copies are pirated.

One by one, the Beijing-based software maker has seen its sales of such popular products destroyed after black market producers flooded the market with cheap copies.

Today, Kingsoft's 600 programmers focus on making what it hopes can't be copied — online games and business and anti-virus programs that have to be linked to its own computers in order to function.

"Piracy has had a big impact on us, making it so we can't get powerful and compete with Microsoft," said Ren Jian, a former Microsoft manager who is Kingsoft's chief operating officer.

Kingsoft is far from alone. Rampant Chinese piracy of music, movies and software that raises howls of protest from the United States, Europe and elsewhere is hitting China's fledgling creative industries hardest of all. Robbed of sales in their key home market, companies are short of money to develop new products to compete with foreign rivals.

Losses to piracy are especially damaging at a time when communist leaders want China to transform itself from the world's low-cost factory into an "innovation society" that makes its own profitable technology and brand names.

China has long been the world's leading source of illegally copied music, movies, designer clothes and other goods. U.S. officials say its exports cost legitimate producers worldwide up to $50 billion a year in lost potential sales.

At home, sidewalk vendors sell unlicensed DVDs of Chinese movies for as little as 50 cents. Software makers say more than 80 percent of programs used on China's PCs are pirated.

Few brands are immune. A government list released this month of recent major piracy cases included a gang that sold $300,000 worth of fake Wuliangye, a popular Chinese liquor. Another trafficked in counterfeit upmarket Chunghua cigarettes.

Sporting goods maker Li Ning Co., which has ambitions to expand abroad, says it sees copies of its shoes and athletic clothes in markets alongside Nike and Adidas counterfeits.

Kingsoft, the software maker, aspired to be the "Microsoft of China," but was forced by piracy to stop selling games, a media player and other mass-market programs. Ren, the COO, says the consumer logic is simple: A pirated copy of Kingsoft's Chinese-English dictionary costs one-tenth the $12 price of the real thing.

The onslaught has forced Kingsoft to narrow its product range, with two-thirds of its programmers now working on online role-playing games that players access on Kingsoft's computers for a monthly fee — part of a thriving Chinese market for online games.

President Hu Jintao called attention to piracy's cost to China in a May 27 speech to Communist Party officials. Enforcement "is an urgent need for ... enhancing the country's core competitiveness," Hu said.

"We should strengthen our law enforcement and lawfully and severely crack down on and effectively curb law-breaking and criminal acts of violating intellectual property rights," he said.

The government has tried to undercut the black market for software by ordering computer makers this year to sell PCs only with legitimate operating systems already installed. Officials have been told to remove pirated software from government computers. Commerce Minister Bo Xilai said in March that process was under way, but he set no deadline for compliance.

And Chinese companies are fighting back in court. The government says they are responsible for 90 percent of lawsuits filed against Chinese copyright and trademark violators.

Yet trade groups and foreign governments say that despite repeated crackdowns, China's output of pirated goods is rising steadily, along with its rapid economic growth.

A report in May by the American Chamber of Commerce in China said that 43 percent of 76 U.S. companies surveyed said they have seen an increase in the amount of counterfeiting of their products, while 55 percent said the amount has stayed the same. Only 7 percent saw a decrease.

Losses to piracy have made film studios and music companies reluctant to finance new releases at a time when they might be cashing in on rising foreign interest in Chinese pop culture.

Chinese musicians say piracy makes producing new CDs so unprofitable that they are treated as just promotional material for concerts, which provide performers' real income.

Web sites that carry unlicensed copies of CDs often give away the music for free and make money from advertising. That takes advantage of a provision in Chinese law — one that trade groups are lobbying Beijing to change — that requires pirated goods to be sold before violators can be prosecuted.

Chengdu Xiangsha Music Co., in the southwestern city of Chengdu, got out of its main business of distributing CDs and promoting new performers in 2003 when it saw that losses to piracy "would be huge," said general manager Liu Jiming.

Now Xiangsha focuses on supplying music to Web sites and mobile phone companies, Liu said.

"Things are much better now," he said. "But we are still bothered by illegal downloads and online linking."

Losses to software piracy are especially damaging to China's plans.

Beijing wants to see the industry flourish, both to create jobs and to reduce reliance on foreign software, which communist leaders consider a strategic weakness. China has scores of small software companies and its universities produce thousands of programmers every year.

But battered by piracy, software developers are switching from selling products under their own brand names to working as subcontractors for U.S., Indian and other foreign companies — just the anonymous status that Chinese leaders don't want. Most Chinese software companies — such as DHC, Sinocom Software Group Ltd., Broaden Gate Systems Inc. and UFSoft Corp. — focus on subcontracting for foreign clients instead of selling to the general public.

A report this month by the Business Software Alliance, a U.S.-based industry group, said 86 percent of software used in China last year was pirated — one of the world's highest rates — though it said that was an improvement over 2004's figure of 90 percent.

Even though China is the world's No. 2 PC market, "the legal market for software is relatively small, because of the large piracy rate," said Jeff Hardee, the BSA's vice president for Asia.

"When the piracy rate is as high as it is, it's hard for (Chinese) producers to develop a market, while the foreign developers have the whole world market," he said.

In a separate report in December, BSA argued that China could see its information technology industries triple in size and create 1.8 million new jobs if its piracy rate were cut by just 10 percentage points over the next four years.

"China could potentially gain more than any other country," the report said.

Ren says the problem is not lack of official enforcement but Chinese consumers, whom he complains don't see that they are supporting innovation when they pay for legitimate goods.

"Ordinary Chinese people don't see anything wrong with buying pirated goods," he said. "We need to change people's attitudes. That is going to take time."

Russia Pirate Industry Is Booming
Alex Nicholson

When "The Da Vinci Code" premiered in Moscow, Konstantin Zemchenko started his count.

As the Motion Picture Association of America's top pirate-fighter in Russia, Zemchenko's operatives were monitoring the capital's markets and street stalls for when the first bootleg copies would appear.

His goal? A modest 10-day delay. In the worst pirate market in the world after China, that translates into a home run for Hollywood, which says it loses well over $300 million a year in Russia.

On this occasion, the pirates won: Three days after the premiere, a grainy, camcorder copy of the $100 million-plus budget movie was available on DVD for under $6. Two days later a pristine version with interactive menu was on sale for the same price.

The ease with which pirate films, music and software enter the Russian marketplace and the increasingly ingenious means counterfeiters use to get them there are cited by United States Commerce Department officials as a $1.8 billion per year barrier to Russia's entry to the World Trade Organization.

It sometimes feels like running to stand still for Zemchenko, whose Russian Anti-Piracy Organization, or RAPO, sifts through the millions of discs that police confiscate.

"We're choking on the volume," he said in a recent interview in RAPO's headquarters, located in a converted kindergarten on a leafy lane in northern Moscow. Stacks of boxes overflowing with confiscated DVD's clutter its narrow corridors.

In quieter times, Zemchenko organized film festivals abroad as foreign relations director of the USSR's Union of Cinematographers.

Now his job involves more than just long hours in the office.

"There are threats — all sorts of things. You get complicated moments, you get phone calls," he said, reluctant to discuss an uncomfortable topic. Anti-piracy organizations have repeatedly stressed the link between organized crime and counterfeiting.

RAPO's warehouse currently holds about $7 million worth of pirated DVD's — enough to make him very unpopular indeed with the people who had hoped to profit from their sale.

While the pressure from Washington has been reflected in a sharp rise in police raids over the past year on optical disc plants and warehouses — the backbone of the counterfeiting industry — the number of pirate optical disc lines in Russia has doubled over the past two years. In Russia there are 50 licensed factories housing a total of 60 DVD and 68 CD production lines, with a maximum capacity of 800 million discs per year. Zemchenko estimates 90 percent produce both licensed and pirate discs loaded with music, films and software.

This bottomless capacity, combined with gaps in Russia's copyright law and corruption among beat cops and movie hall staff alike, make Zemchenko's 10-day limit a tough challenge.

In the case of "The Da Vinci Code," the first version to appear was a "tryapka" or "rag" — Russian slang for the low-fi copies shot on camcorder directly in the cinema. Despite warnings shown before screenings, Russia's copyright law doesn't bar the practice: if a pirate is kicked out of the movie hall for filming, he can claim the copy was for personal use and successfully sue for the cost of his ticket.

The later, high quality copy was made from the original 35mm film using a telecine machine — the expensive equipment used by television studios to convert film onto video, DVD or computer files. A comparative rarity elsewhere in the world, copies made with telecine are a dime a dozen in Russia: assuming the film can be covertly removed from the cinema to one of the 20 telecine machines in Moscow, there are no clauses in the copyright law that make the process of copying a motion picture to disc any harder than photocopying a newspaper.

And the pirate markets and stalls that dot Russian cities and the capital are as abundant as ever: Corruption among Russia's poorly paid police force means that the stalls' owners can bribe their way out of most situations.

Now Zemchenko is gearing up to meet the challenge of pirate movie downloads from the Internet: http://www.kinozal.ws lets visitors download The Omen and other recent releases, while infamous Russian pirate music site allofmp3, which is already challenging Apple Computer Inc.'s iTunes with its knockdown prices, also offers films.

Russian prosecutors are already pursuing a criminal case against allofmp3, but Igor Pozhitkov, head of the International Federation of the Phonographic Industry in Russia, calls the current situation with the site "ridiculous."

"It's as though a person is stealing your electricity. The prosecutors determine that what they are doing is illegal, but they just keep on stealing it while you have to wait for the courts," he said.

Already Zemchenko has assigned a staffer to monitor and weed out web providers that host such sites full time.

Total losses to Russian and foreign companies from all forms of intellectual property theft clock in at between $4 billion and $6 billion, according to German Gref, Russia's minister of economic development and trade.

And while Russian President Vladimir Putin has called on the government to take advantage of the country's soaring oil revenues to steer the economy away from its traditional reliance on its raw mineral riches, Chris Israel, the U.S. coordinator for international intellectual property enforcement, argues that goal is already in jeopardy.

"You certainly cannot have a globally competitive, knowledge-based economy without strong intellectual property rights protection," Israel said.

Digg Me or Bury Me

Using (or is that exploiting?) a people-powered news aggregator to attract hits.
Jack Shafer

Slate's redesign, which launched Monday, includes a feature that some Web sites have had for years: A front-page pane that displays the most-read stories, the most blogged, and the most e-mailed. For obvious reasons, staffers are as interested in the "most" lists as readers, and so on Wednesday (June 28) our copy chief Rachael Larimore sent around e-mail asking if anybody had an idea why a two-year-old piece by tech writer Paul Boutin ("So Tired," July 13, 2004) had cracked the daily top five.

Not to take anything away from Boutin, but the piece isn't anywhere near his best. It's a light story about tired.com, a site that invites readers to send e-mail describing why they're tired.

Josh Levin, Boutin's editor, quickly determined the origin of the story's new popularity: Digg.com, the husky and growing people-powered news aggregator. Digg has 300,000 registered users, reports Google Watch, draws 8.5 million unique visitors a month, and serves 9.5 million pages a day. Think of Digg as a Billboard Top Million, only for Web pages rather than CDs.

Here's how Digg works: Registered users submit Digg-worthy Web content—news stories, blog entries, videos, pictures, what have you—to the site by writing a synopsis and linking back to the piece. Then, other registered users "community rank" the submission with votes, aka "diggs," and the highest-ranked stories earn promotion to Digg's front page. Registered users can also "bury" stuff they don't like. Think of the registered users as thousands of unpaid editors—or filters, to use Webspeak—and regard their picks as the wisdom of the crowd, to use James Surowiecki's felicitous phrase. Nonregistered users are free to explore the site, of course, and click through to stories. Think of them as readers (or drinkers).

Digg's FAQ says submitted stories reside in the upcoming stories section for between 12 and 24 hours. The story drops from the queue if it doesn't earn enough diggs to rise to the Digg home page and is automatically jettisoned if it receives enough "bury story" demerits. It's very Darwinian.

Ordinarily, an archived piece such as Boutin's might garner a couple of hits a month for Slate, but the Digg referral produced 26,506 page views of it in one day. The user who nominated Boutin's story, "Pitfan," submitted it to Digg on Monday, June 26. It's the only submission he's ever made to Digg under that name, although he's dugg 129 pieces since registering on the site in November 2005. As I write this Friday morning, Boutin's story has earned 1,586 diggs, which makes it the 65th-most-dugg story on Digg's Technology section this week. That's not a huge number of diggs by the site's standards. The most-dugg story of the week in the Tech section is a Digg blog piece about the rollout version 3.0 of Digg, with 10,317.

The dramatic resurrection of Boutin's story inspired me to compose a piece about Digg—the column you're reading now—and to digg it under the username "ShaferAtSlate" within minutes after Slate posts it to test the referral power of Digg. If Digg can steer enough readers to an old story about a marginal Web site to make it one of Slate's top stories, what might it do for a fresh story about a powerful Web site?

Ordinarily, my columns pull anywhere between 8,000 and 40,000 page views a day, the traffic being determined by the sexiness of my subject and other variables. I credit blog discussions of my columns about blogs, New Orleans, race, and TV blondes with generating tens of thousands of additional page views. I always benefit from links from Romenesko, the top aggregator of press news and opinion, and when a "Press Box" appears on the Slate home page with a big illustration or graces the MSN home page, my average page counts can double, triple, or grow by 10X.

In my pursuit of extra hits, I've taken what I consider to be an ethical and transparent path. There's nothing inherently wrong about promoting something you wrote, especially if you promote it using your own name. If you don't digg yourself, who will? Digg's terms of service prohibit individuals from creating multiple accounts to artificially inflate a digg count, a policy I consider sensible. Inflating digg counts with multiple accounts is as sleazy as fraudulently boosting the Amazon ranking of a book you've written by purchasing them in bulk from the site. (Some authors have done just this.)

If I were a craven seeker of hits, I'd link directly to my Digg submission here. Instead, I'll offer only a modest pointer: If you want to digg or bury this piece, search for "slate.com" in Digg's search window and scroll the results until you find it. (At present that search query returns 21 Slate stories.) The summary of my story will explain who I am and why I wrote the column and submitted it. Upon submission of my piece I'll also send e-mail to the Digg team to inform them of this experiment. If they decide this experiment violates their terms of service—which I don't think they will—they'll be free to delete my digg from the site.

In my mad quest for hits, I've given myself a leg up by writing about Digg instead of, say, puppy-dog tails. Digg users love stories about the site. At least six of Digg's top 30 stories this year are about it, and most are about technology, owing to its origin as a tech-centric site. The more techie an article, the better its chance of rising, I've observed. But Digg's tech focus is changing, with beta sections named Science, Videos, Entertainment, Gaming, and World & Business now rounding out the site.

The surge of hits Digg sent to Slate proves that Web sites with lots of stories in the bank—we've published about 33,000 stories in 10 years—could better exploit those archives. We routinely "recycle" old stories when events give them new relevance, we published a list of the most-read stories from 2005 in late December, and in our 10th anniversary celebration last week we exhumed some of our greatest hits to commercial success. If the digging of Boutin is any guide, readers are eager to trust other like-minded readers to guide them to good content. Maybe Web sites like Slate should set up Digg-like voting booths to do that. Slate's discussion forum, "The Fray," which already requires registration, could be adapted to this end.

Will my quest offend Digg users as an evil manipulation of their beloved site and prompt them to bury my submission? They tend to despise users who engage in self-promotion on the site. Or will they judge my story on its own merits?

I'll be back in a couple of days with a follow-up reporting whether I got dugg or buried.


Bloggers, don't try this Digg experiment at home before you read Monetize's "Can Your Site Survive a Digg?" The piece predicts that the tidal wave of hits could swamp and sink your site if you're not prepared!

Tail Is Wagging the Internet Dog
Dan Mitchell

THE media columnist Jack Shafer was confused, and maybe a little jealous. He wondered last week why a two-year-old article by Paul Boutin, his fellow Slate writer, was suddenly drawing huge traffic numbers. Mr. Boutin's article was a light, news-free feature about a Web site (tired.com) that asks users if they are tired, and if they are, to explain why. Mr. Shafer, meanwhile, was pounding away on columns about the hottest media topics — and drawing considerably less traffic.

"Not to take anything away from Boutin," Mr. Shafer wrote, "but the piece isn't anywhere near his best" (slate.com).

Mr. Shafer found a reason for the sudden surge of traffic: somebody had come across the old article and posted it to Digg. com, where registered users vote on which articles are the most (or the least) interesting or worthwhile.

Chris Anderson, editor of Wired magazine, would no doubt see this as a perfect example of "the long tail" in full wag. The lengthening of the long tail means that old or minimally popular stuff — like an old Slate article or a new album by an obscure Bolivian folk musician — is becoming more valuable thanks to the falling costs of production, storage and distribution. Or as Mr. Anderson puts it on his blog, markets are "increasingly shifting away from a focus on a relatively small number of 'hits' at the head of the demand curve and toward a huge number of niches in the tail" (longtail.com).

He first wrote about this phenomenon in Wired two years ago, igniting a lively online conversation that continues. His book on the subject "The Long Tail: Why the Future of Business Is Selling Less of More" will hit shelves on Tuesday.

Thanks to technologies like the Internet, "there is now less need to lump products and consumers into one-size-fits-all containers," he writes. So, for example, most record stores don't stock Frank Zappa's 1968 album "Cruising With Ruben and the Jets." Ten years ago, it would have been difficult to find. Now, it can be bought with the click of a mouse, or instantly downloaded from an online music service.

This might all seem obvious, but Mr. Anderson argues that the implications are vast, complex and not understood nearly well enough.

Moving the economy, and the culture, "from mass markets to million of niches," he writes, amounts to nothing less than a reordering of society, affecting everything from world markets to your plans for this weekend.

Fishing for Information The Monterey Bay Aquarium offers Seafood Watch, an online database that helps consumers choose their fish based on health and environmental factors. For instance, enter "salmon" into the search form and you learn that the coho, sockeye and king varieties are rated "best" and that you should "avoid" farmed chinook and Atlantic salmon because fish farmers often use pesticides and antibiotics (mbayaq.org).

Swordfish populations are rebounding, but imported swordfish remains a problem partly because fishermen often "accidentally catch threatened or endangered sea turtles, sharks and sea birds in large numbers." The site offers alternatives and provides links to scientific reports.

Internet In-Box The Internet is "not a big truck," Senator Ted Stevens, Republican of Alaska, informed his Senate colleagues on June 28. "It is a series of tubes."

Mr. Stevens was assailing a proposed amendment to a bill in the Commerce, Science and Transportation Committee; he is the committee chairman. The amendment, which failed in a tie vote, would have barred Internet service providers from charging fees to give some companies speedier access to the Internet. (The audio of Mr. Stevens's comments is at publicknowledge.org.)

The Net is neutral, with all content providers having the same level of service, in terms of speed. Mr. Stevens says this is a problem.

"Just the other day," he said, "an Internet was sent by my staff at 10 o'clock in the morning on Friday and I got it yesterday. Why? Because it got tangled up with all these things going on the Internet commercially."

How To Swing
Timothy Noah

Looking back from the 22nd century, future historians will marvel at the current era's obsession with extending intellectual property rights well past any reasonable limit. Nowhere is this more apparent than in the United States Patent and Trademark Office's determination to grant a patent to even the most absurd claims that cross its desk. Four years ago a patent attorney in Minnesota named Peter Olson demonstrated this by submitting the following patent in the name of his five year-old son, Steven. The patent was granted. Read it and weep.

Fight Over IPTV to Reach Head July 11
Wesley Brown

An AT&T Inc. spokesman said Friday that the phone giant has worked out what is expected to be a final agreement to offer digital TV services in central Arkansas.

But a rival cable industry representative said the plan to offer digital TV in Little Rock and surrounding areas could end up in court if officials of the capital city allow AT&T to offer the service without a cable franchise agreement.

"Litigation has been discussed," said Len Pitcock, executive director of the Arkansas Cable Telecommunications Association.

The battle over digital TV service in Little Rock could have broad implications statewide and nationally, experts say. If the city's current deal with AT&T is approved, then it would open the door for other cities and municipalities across the state to enter similar agreements with the phone giant, Pitcock said.

The complex issues surrounding AT&T's proposal to soon roll out so-called Internet Protocol Television, or IPTV, could eventually be fleshed out at a Little Rock Board of Directors meeting July 11.

There, AT&T and Comcast representatives will make the case for and against AT&T's new broadband TV service, which the company argues is not cable.

The new digital service was last discussed at a city board meeting June 13, but no vote was taken and neither side was allowed to make presentations.

However, a vote on AT&T's 200-channel premium video service could take place this time, officials of the city, AT&T and Comcast agree.

"By the nature of adding it to the agenda, there could be a vote," said Bryan Day, assistant city manager for the city of Little Rock. "But it is not an easy decision to make, given the last meeting. This is a new thing and there is a lot of information to absorb."

Day said he has not been closely involved in recent talks concerning the new service, but knows that City Manager Bruce Moore is determined that any new TV product not thwart competition.

AT&T spokesman Ted Wagnon said the "agreement on the table" will be a positive benefit to local citizens.

"This will be a great deal for competition and consumer choice," Wagnon said.

But a letter from a local attorney for Comcast sent recently to Little Rock Mayor Jim Dailey, Moore and city directors said the cable provider vehemently opposes the proposal.

Little Rock attorney Scott Trotter argues that AT&T should have to apply for cable franchises in the cities it might serve. Comcast has a franchise agreement with Little Rock, which requires the Philadelphia-based cable provider to wire the entire city, North Little Rock and surrounding communities.

"The only way to achieve an agreement that is not a barrier to competition is to require AT&T Arkansas to accept a well-developed franchise contract similar to that between the city and Comcast," Trotter wrote June 26. "Otherwise, the city will be granting AT&T Arkansas preferentially advantageous terms that tilt the scales of competition in favor of one competitor."

Trotter also raised concerns about a draft of the proposed agreement between AT&T and Little Rock that was obtained from the city under the state Freedom of Information Act.

"Our concern is that they are going to ram it through," Pitcock said. "I am not sure that is in the best interest of the public."

Comcast's legal counsel in Philadelphia has also sent the city a letter concerning the "most favored nation" clause in the cable company's franchise agreement with the city, said Mike Wilson, the cable giant's area vice president of governmental affairs.

That agreement in Comcast's original franchise guarantees the company the lowest rate that AT&T or any other rival offers.

"We have not made a decision, legal or otherwise," Wilson said. "We have stated since the very beginning that the video product by AT&T is cable and should be subject to the same rules."

San Antonio-based AT&T first revealed in March that it was in talks with Little Rock and other central Arkansas municipalities concerning the launch of Internet-based TV. Maumelle signed the first IPTV licensing agreement in the state with AT&T in early May.

Under current law, cable providers negotiate a franchise agreement with each community they serve. In exchange, the company pays a fee to the local unit of government, typically from 3 percent to 5 percent of annual revenues.

Wagnon said the nation's largest phone company is currently building a fiber optic network in Maumelle to support the IPTV launch there, which he said could take place by early 2007.

AT&T has agreed to pay the city a 4.25 percent fee collected from new customers that sign up for the service.

"That deal was political," Pitcock said of Maumelle's pact with AT&T.

The cable industry spokesman argued that the draft of the AT&T plan shows that the phone company is hedging on providing public educational programming and public emergency alerts, along with pre-selecting the best markets to offer the new service.

Armed with a citywide map with cherry-like dots where AT&T plans to offer IPTV service, Pitcock said the phone company only plans to offer digital service in high-income areas.

"They are talking out of both sides of their mouth," he said.

Wagnon countered that the agreement with Little Rock shows very clear that AT&T will offer the same level of educational programming and emergency broadcasting that Comcast now offers.

He also said that any information that Comcast has been able to gather concerning AT&T's fiber optic buildup is likely misleading.

"How would they get that information?" Wagnon asked. "We have not said for competitive reasons where we are going to provide initial service."

Wagnon did said that AT&T will use the same approach to launch its IPTV as it did when it first offered high-speed DSL Internet service in 1999. He said service will be offered initially in the most densely populated areas of the city, which includes west Little Rock and other suburban areas.

"Our buildup is nowhere near complete. It's a three-year plan," he said.

Just last week, AT&T rolled out its first IPTV offering at AT&T's home base in San Antonio, part of the company's planned $4 billion digital TV offering to compete with Comcast, Time Warner and other cable giants nationwide.

AT&T Is Calling to Ask About TV Service. Will Anyone Answer?
Ken Belson

Jesse Vallado looks like your average cable guy: tool belt around hips, golf shirt with company insignia and a van stuffed with gear.

But Mr. Vallado, who has been installing television services for two decades, now works for the phone company — AT&T — not the local cable provider. Hunched over a cable box outside a customer's suburban two-story home in a gated community here, he plugs in adapters and a bunch of wires that will turn on AT&T's new television service, U-verse.

While traditional cable and phone services run on separate lines, U-verse crams video, data and, in time, phone calls down one high-speed broadband line. Introduced here on Monday, the service allows users to view multiple channels at once, get information about programs instantly and eventually access some Internet content via their television.

"We're on the ground floor of something that's going to revolutionize the industry," Mr. Vallado said. "We have the whole world looking at us."

Investors, too, are watching to see whether the service will work well enough to attract the millions of new subscribers that AT&T needs to stave off rivals stealing millions of its phone customers. With U-verse, AT&T can assemble a package of television, broadband and phone services to match the bundle sold by cable companies.

But cable providers like Time Warner Cable, which serves about half the homes in San Antonio, are fighting back. To keep customers from leaving, they are discounting their television and phone plans, throwing in premium movie channels and faster Internet connections.

The face-off has turned San Antonio — the home of the Alamo — into a proving ground for the intensifying showdown between the phone and cable industries. What transpires here is expected to be repeated in the 15 or so other cities and towns (including Houston) where AT&T plans to introduce U-verse this year, and the 55 where Verizon now sells television.

"The cable guys are not going to sit around and wait," Jeffrey Halpern, a telecommunications analyst at Sanford Bernstein, said. "They offer television, broadband and phone now, so if the Bells don't have television, they can't fight back."

But building a television service and getting people to drop their cable or satellite plan are two different things. Like Verizon, which now sells programming in New York, Florida and five other states, AT&T is discounting heavily to attract new customers.

For example, AT&T's middle-tier plan comes with 170 television channels, 31 premium movie channels and 17 music channels, a 3-megabit broadband connection, three set-top boxes, a digital video recorder and a Wi-Fi router for $94 a month, roughly equivalent to the already cut-rate cost of comparable service from Time Warner.

Mr. Halpern and other analysts say that AT&T will have a relatively easy time capturing 10 percent of the pay-television market because some customers are eager to cut their bills. Enticing the next 10 percent will be much harder, though, because most cable and satellite subscribers are either happy with their service or unwilling to go to the trouble of switching providers.

Yet AT&T and Verizon need to grab a substantial piece of the television markets they enter if they expect to recoup the substantial costs of overhauling their networks. This is particularly true for Verizon, which is spending $18 billion to string fiber optic lines all the way to consumers' homes.

With that kind of network, Verizon will be able to sell far faster Internet connections and have a more durable network that will require far less money to maintain.

AT&T has taken a different route. It is spending just $4.6 billion to install fiber optic lines only to consumers' neighborhoods and then to use existing copper cable the rest of the way. This will allow it to enter new markets more quickly, but its network may have to be upgraded later. The company also expects to spend $1 billion to hook customers up to the service, though analysts said that cost could rise if the service proves as popular as AT&T expects.

Unlike cable companies and Verizon, which send every channel to every set-top box, AT&T only sends selected channels to the home. This uses far less bandwidth, so AT&T can use more of its older cables. And since phone calls, Internet connections and television signals will travel down the same pipe, they can be blended so that, say, incoming calls are announced on a television and digital photos from computers can be copied to digital video recorders for display on a TV.

While other phone companies are using this so-called IPTV technology, AT&T is by far the biggest. By the end of 2008, the company expects to make the service available to about half, or 19 million, of the homes it serves in the 13 states where it sells local phone service. If all goes well, AT&T said 30 percent of those homes, or 5.7 million customers, will sign up for U-verse.

AT&T also plans to introduce U-verse in the nine states where BellSouth operates, assuming regulators sign off on their planned merger.

Not surprisingly, the gargantuan project has faced obstacles. AT&T and Verizon have had to go town by town to win cable franchises from municipalities. To shorten that long and expensive process, the companies have been prodding lawmakers in Washington to pass a bill that would streamline the process. Five states in AT&T's territory, most notably Texas, have already passed similar legislation.

Technologically, AT&T needed to get the kinks out of crucial software from Microsoft, as well as develop new billing, sales and administrative teams, and open an office in Los Angeles to buy programming from Hollywood studios. Now, about six months later than originally anticipated, all the pieces are in place.

"The technical risk we bought into two years ago, we feel like we jumped that hurdle," said Jeff Weber, the vice president in charge of U-verse products. "There is a lot of pressure to get the product out there. But I don't want to go faster than we should. We want to make sure the service is what we said it would be."

Despite the importance of the project, AT&T is not trying to oversell U-verse. Just 5,000 customers will initially be able to get it in San Antonio. Instead of trumpeting the service on television, AT&T is going door-to-door with fliers, driving a specially outfitted ice cream truck on neighborhood streets and hosting parties where customers open their homes to their neighbors to show off U-verse.

Todd Trcka (pronounced tri-KHA) and his wife, Lisanne, would be two good candidates. They were selected to test U-verse a few months ago and are now hooked on the service. Mr. Trcka gleefully channel surfs at high speed, noting that there are not the delays found on some digital cable and satellite services. With a click of the remote, he calls up screens with details of the show he is watching. With another few clicks, he can record it on his DVR.

"They should prescribe Ambien because this guy doesn't sleep since he got this TV," Mrs. Trcka joked. She added that the parental locks were an easy way to keep her three kids from watching some programs.

The Trckas have encountered some problems. U-verse does not have any high-definition channels, something AT&T hopes to introduce by the end of the year. Mr. Trcka said he also wished he could watch the Bevo-D channel, which is devoted to University of Texas sports that he had with his old Time Warner service.

Still, the Trckas plan to sign up for the U-verse service when their trial ends because of the extra features. They also like the idea that they are among the first customers to get the new product.

"The good news is we don't have friends with the service," Mr. Trcka said.

AT&T, of course, is out to fix that.

Myanmar Bans Google

The Myanmar government has blocked the Google search engine and its mail service Gmail, say Internet users.

Users in the country have not been able to access the Google site for more than a week, reported the Mizzima News.

Those attempting to view either Google or Gmail are confronted with a message saying "Access Denied".

An official from Bagan Cybertech, the country's only Internet service provider, confirmed that both Google and gmail were inaccessible but declined to comment further.

In an effort to control the flow of information in and out of the country, the military government has banned several websites, including Yahoo and Hotmail.

Microsoft Censoring MSN Messenger Conversations

Computer Sweden is reporting that Microsoft is doing automatic real-time censoring of certain messages on MSN Messenger.

According to communications director of MSN Sweden, Jessica Börjel, this is being done to protect users against exploits and worms spreading through the MSN Messenger service.

Among the things Microsoft appears to want to block are URLs and file name references. And this is where the trouble starts:
You cannot use the string download.php anywhere in a message, not even when it’s not part of a URL.
The link filter does not take canonical URLs into account: http://evil.example.com/download.php and http://evil.example.com/down%6Coad.php is the same URL, expressed in two different ways. The first one is blocked, while the second one is not.
Even if Microsoft fixed the canonization issue, and were able to block both, there are a loads and loads of redirector services, like as TinyURL that can be used to mask known bad URLs

And, for the truly paranoid: Since Microsoft are automatically monitoring your conversations, and block certain messages — what prevents them from eavesdropping on your messages, and sending any “suspicious” content off to third parties, such as governments and their agencies?

Microsoft Denies WGA Kill Switch in Windows XP
Eric Lai

Microsoft Corp. today denied speculation that it plans to cripple copies of Windows XP for users who refuse to install its controversial antipiracy tool, Windows Genuine Advantage (WGA).

But the software company confirmed that for its upcoming Windows Vista operating system, companies will be required to activate their software differently than they do today in order to prevent the leakage of volume licenses that are the source of most Windows piracy.

A ZDNet.com blogger reported earlier in the week on a conversation between a Windows user and a Microsoft support staffer, who allegedly admitted that users who refused to install the WGA update would be given 30 days before their copies of Windows would stop working.

ZDNet.com said that Microsoft refused to deny the report at the time. But later, Microsoft appeared to sing a different tune.

“No, Microsoft antipiracy technologies cannot and will not turn off your computer,” said a spokeswoman with Waggener Edstrom, Microsoft’s public relations firm. “The game is changing for counterfeiters. In Windows Vista, we are making it notably harder and less appealing to use counterfeit software, and we will work to make that a consistent experience with older versions of Windows as well.”

Microsoft last fall began testing WGA as a way of trying to find pirated copies of Windows. In mid-June, it announced that users would need to download and pass WGA to be eligible to download the latest versions of add-on software such as Internet Explorer 7 and Windows Media Player 11. Users would still be able get the latest security updates, though. Companies that buy Windows XP through large package deals are exempt from having to install WGA.

Since then, Microsoft has taken considerable heat from consumers and the media, who have likened WGA to spyware that has sometimes inaccurately labeled legal copies of Windows as pirated.

Through its spokeswoman, Microsoft said that “80% of all WGA validation failures are due to unauthorized use of leaked or stolen volume license keys.”

Still, WGA has been so controversial that it led a French programmer to develop a tool to delete WGA and a Windows customer in Los Angeles to file a class-action lawsuit.

Microsoft has tried to appease customers by releasing a new version of WGA that checks users’ computers only once a month, rather than every day.

The lawsuit, filed this week in U.S. District Court in Seattle, alleges that WGA violates antispyware laws by not fully disclosing itself when it was delivered to Windows users through Auto-Update. The suit is headed by the same lawyer who also led the class-action lawsuit earlier this year against Sony Corp. for not disclosing that it had placed copy-protection rootkit software on customers’ PCs via music CDs it sold. The rootkits disabled users' protections against viruses and spyware. Sony later settled the lawsuit.

Microsoft called the lawsuit “baseless.” It said WGA is a necessary part of its campaign to catch those illegally using Windows XP, especially those using volume license keys issued to corporations.

Volume licenses have long been Microsoft’s Achilles heel. Corporations are generally issued a single volume license key -- a text string of alphanumeric characters -- which is used to activate hundreds or thousands of copies of Windows at a time. Those strings can be copied or stolen and have been passed around on the Internet.

To thwart the practice, corporations that upgrade to Windows Vista along with Longhorn Server will be required to run a small application called a Key Management Service. According to Microsoft and analysts, the service will track how many copies of the software the companies have paid for and how many they have installed.

When asked if companies that have installed more copies of Vista than they have purchased will find those copies de-activated, Microsoft said through its spokeswoman that companies “should think of it more like an application that tracks and protects their use of their Volume License keys and installations.”

Paul DeGroot, an analyst at Kirkland, Wash.-based Directions On Microsoft, said that while most consumers may find this sort of tracking by Microsoft intrusive, many corporations may actually welcome it.

“Most corporations have no interest with getting away with anything at Microsoft’s expense,” he said. Indeed, corporations, especially those that have merged with another company or undergone a restructuring, often have a hard time keeping track of all the software they own. Most will “overbuy licenses because it’s cheaper to do that then to designate staff people to actively manage them.”

Microsoft said the Key Management Service will include administrative tools to help companies manage licenses.

“Microsoft isn’t tracking the numbers of copies installed; the key management services are internal to the organization,” the spokeswoman said. “We will be rolling out Vista deployment guidebooks and information for customers and channel partners later this summer.

As for consumer users of Vista, DeGroot said there is a good chance they will encounter WGA, or something like it.

The Microsoft spokeswoman added, “We don’t have specific details to share on individual features of WGA in Windows Vista at this time, but WGA will continue to be a part of Microsoft’s Genuine Software Initiative.”
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Spy Agency Sought U.S. Call Records Before 9/11, Lawyers Say

The U.S. National Security Agency asked AT&T Inc. to help it set up a domestic call monitoring site seven months before the Sept. 11, 2001 attacks, lawyers claimed June 23 in court papers filed in New York federal court.

The allegation is part of a court filing adding AT&T, the nation's largest telephone company, as a defendant in a breach of privacy case filed earlier this month on behalf of Verizon Communications Inc. and BellSouth Corp. customers. The suit alleges that the three carriers, the NSA and President George W. Bush violated the Telecommunications Act of 1934 and the U.S. Constitution, and seeks money damages.

``The Bush Administration asserted this became necessary after 9/11,'' plaintiff's lawyer Carl Mayer said in a telephone interview. ``This undermines that assertion.''

The lawsuit is related to an alleged NSA program to record and store data on calls placed by subscribers. More than 30 suits have been filed over claims that the carriers, the three biggest U.S. telephone companies, violated the privacy rights of their customers by cooperating with the NSA in an effort to track alleged terrorists.

``The U.S. Department of Justice has stated that AT&T may neither confirm nor deny AT&T's participation in the alleged NSA program because doing so would cause `exceptionally grave harm to national security' and would violate both civil and criminal statutes,'' AT&T spokesman Dave Pacholczyk said in an e-mail.

U.S. Department of Justice spokesman Charles Miller and NSA spokesman Don Weber declined to comment.

Pioneer Groundbreaker

The NSA initiative, code-named ``Pioneer Groundbreaker,'' asked AT&T unit AT&T Solutions to build exclusively for NSA use a network operations center which duplicated AT&T's Bedminster, New Jersey facility, the court papers claimed. That plan was abandoned in favor of the NSA acquiring the monitoring technology itself, plaintiffs' lawyers Bruce Afran said.

The NSA says on its Web site that in June 2000, the agency was seeking bids for a project to ``modernize and improve its information technology infrastructure.'' The plan, which included the privatization of its ``non-mission related'' systems support, was said to be part of Project Groundbreaker.

Mayer said the Pioneer project is ``a different component'' of that initiative.

Mayer and Afran said an unnamed former employee of the AT&T unit provided them with evidence that the NSA approached the carrier with the proposed plan. Afran said he has seen the worker's log book and independently confirmed the source's participation in the project. He declined to identify the employee.

Stop Suit

On June 9, U.S. District Court Judge P. Kevin Castel in New York stopped the lawsuit from moving forward while the Federal Judicial Panel on Multidistrict Litigation in Washington rules on a U.S. request to assign all related telephone records lawsuits to a single judge.

Robert Varettoni, a spokesman for Verizon, said he was unaware of the allegations against AT&T and declined to comment.

Earlier this week, he issued a statement on behalf of the company that Verizon had not been asked by the NSA to provide customer phone records from either its hard-wired or wireless networks. Verizon also said that it couldn't confirm or deny ``whether it has any relationship to the classified NSA program.''

Mayer's lawsuit was filed following a May 11 USA Today report that the U.S. government was using the NSA to monitor domestic telephone calls. Earlier today, USA Today said it couldn't confirm its contention that BellSouth or Verizon had contracts with the NSA to provide a database of domestic customer phone call records.

Jeff Battcher, a spokesman for Atlanta-based BellSouth, said that vindicated the company.

``We never turned over any records to the NSA,'' he said in a telephone interview. ``We've been clear all along that they've never contacted us. Nobody in our company has ever had any contact with the NSA.''

The case is McMurray v. Verizon Communications Inc., 06cv3650, in the Southern District of New York.

Computer Consultant Hacked Into FBI's Classified System
Eric M. Weiss

A government consultant, using computer programs easily found on the Internet, managed to crack the FBI's classified computer system and gain the passwords of 38,000 employees, including that of FBI Director Robert Mueller.

The break-ins, which occurred four times in 2004, gave the consultant access to records in the Witness Protection program and details on counter-espionage activity, according to documents filed in U.S. District Court in Washington. As a direct result, the bureau said it was forced to temporarily shut down its network and commit thousands of man-hours and millions of dollars to ensure no sensitive information was lost or misused.

The government does not allege that the consultant, Joseph Thomas Colon, intended to harm national security. But prosecutors said Colon's "curiosity hacks" nonetheless exposed sensitive information.

Colon, 28, an employee of BAE Systems who was assigned to the FBI field office in Springfield, Ill., said in court filings that he used the passwords and other information to bypass bureaucratic obstacles and better help the FBI install its new computer system. And he said agents in the Springfield office approved his actions.

The incident is the latest in a long string of foul-ups, delays and embarrassments that have plagued the FBI as it tries to update its computer systems to better share tips and information. Its computer technology is frequently identified as one of the key obstacles to the bureau's attempt to sharpen its focus on intelligence and terrorism.

FBI spokesman Paul Bresson declined to discuss the specifics of the Colon case. But he said the FBI has recently implemented a "comprehensive" security program.

Pleaded guilty

Colon pleaded guilty in March to four counts of intentionally accessing a computer while exceeding authorized access and obtaining information from any department of the United States. He could face up to 18 months in prison when sentenced next week. He has lost his job with BAE Systems, and his top-secret clearance has been revoked.

His attorney, Richard Winelander, declined to comment.

According to Colon's plea, he entered the system using the identity of a FBI special agent and used two computer hacking programs found on the Internet to get into one of the nation's most secret databases.

Colon used a program downloaded from the Internet to extract "hashes" — user names, encrypted passwords and other information — from the FBI's database. Then he used another program to crack the passwords by using dictionary word comparisons, lists of common passwords and character substitutions to figure out the plain text passwords.

What Colon did was hardly cutting edge, said Joe Stewart, a senior researcher with Chicago-based security company LURHQ. "It was pretty run-of-the-mill stuff five years ago," Stewart said.

Asked if he was surprised that a secure FBI system could be entered so easily, Stewart said, "I'd like to say, 'Sure' — but I'm not really. They are dealing with the same types of problems that corporations are dealing with."


Colon's lawyer said in a court filing that his client was hired to work on the FBI's "Trilogy" computer system but became frustrated over "bureaucratic" obstacles, such as obtaining a written authorization from the FBI's Washington headquarters for "routine" matters such as adding a printer or moving a new computer onto the system. He said Colon used the hacked user names and passwords to bypass the authorization process and speed up the work.

Colon's lawyers said FBI officials in the Springfield office approved of what he was doing, and that one agent even gave Colon his own password, enabling him to get to the encrypted database in March 2004. Because FBI employees are required to change their passwords every 90 days, Colon hacked into the system on three later occasions to update his password list.

The FBI's struggle to modernize its computer system has been a recurring headache for Mueller and has earned it considerable criticism from lawmakers.

Better computer technology might have enabled agents to more closely link men who later turned out to be involved in the Sept. 11 attacks, according to intelligence reviews conducted after the terrorist strikes.

The FBI's Trilogy program cost more than $535 million but failed to produce a usable case-management system for agents because of cost overruns and technical problems, according to the Government Accountability Office.

While Trilogy led to successful hardware upgrades and thousands of new PCs for bureau workers and agents, the final phase — a software system called the Virtual Case File — was abandoned last year. The FBI announced in March that it would spend an additional $425 million in an attempt to finish the job. The new system would be called "Sentinel."

FBI Plans New Net-Tapping Push
Declan McCullagh

The FBI has drafted sweeping legislation that would require Internet service providers to create wiretapping hubs for police surveillance and force makers of networking gear to build in backdoors for eavesdropping, CNET News.com has learned.

FBI Agent Barry Smith distributed the proposal at a private meeting last Friday with industry representatives and indicated it would be introduced by Sen. Mike DeWine, an Ohio Republican, according to two sources familiar with the meeting.

The draft bill would place the FBI's Net-surveillance push on solid legal footing. At the moment, it's ensnared in a legal challenge from universities and some technology companies that claim the Federal Communications Commission's broadband surveillance directives exceed what Congress has authorized.

The FBI claims that expanding the 1994 Communications Assistance for Law Enforcement Act is necessary to thwart criminals and terrorists who have turned to technologies like voice over Internet Protocol, or VoIP.

"The complexity and variety of communications technologies have dramatically increased in recent years, and the lawful intercept capabilities of the federal, state and local law enforcement community have been under continual stress, and in many cases have decreased or become impossible," according to a summary accompanying the draft bill.

Complicating the political outlook for the legislation is an ongoing debate over allegedly illegal surveillance by the National Security Administration--punctuated by several lawsuits challenging it on constitutional grounds and an unrelated proposal to force Internet service providers to record what Americans are doing online. One source, who asked not to be identified because of the sensitive nature of last Friday's meeting, said the FBI viewed its CALEA expansion as a top congressional priority for 2007.

Breaking the legislation down
The 27-page proposed CALEA amendments seen by CNET News.com would:

• Require any manufacturer of "routing" and "addressing" hardware to offer upgrades or other "modifications" that are needed to support Internet wiretapping. Current law does require that of telephone switch manufacturers--but not makers of routers and network address translation hardware like Cisco Systems and 2Wire.

• Authorize the expansion of wiretapping requirements to "commercial" Internet services including instant messaging if the FCC deems it to be in the "public interest." That would likely sweep in services such as in-game chats offered by Microsoft's Xbox 360 gaming system as well.

• Force Internet service providers to sift through their customers' communications to identify, for instance, only VoIP calls. (The language requires companies to adhere to "processing or filtering methods or procedures applied by a law enforcement agency.") That means police could simply ask broadband providers like AT&T, Comcast or Verizon for wiretap info--instead of having to figure out what VoIP service was being used.

• Eliminate the current legal requirement saying the Justice Department must publish a public "notice of the actual number of communications interceptions" every year. That notice currently also must disclose the "maximum capacity" required to accommodate all of the legally authorized taps that government agencies will "conduct and use simultaneously."

Jim Harper, a policy analyst at the free-market Cato Institute and member of a Homeland Security advisory board, said the proposal would "have a negative impact on Internet users' privacy."

"People expect their information to be private unless the government meets certain legal standards," Harper said. "Right now the Department of Justice is pushing the wrong way on all this."

Neither the FBI nor DeWine's office responded to a request for comment Friday afternoon.

DeWine has relatively low approval ratings--47 percent, according to SurveyUSA.com--and is enmeshed in a fierce battle with a Democratic challenger to retain his Senate seat in the November elections. DeWine is a member of a Senate Judiciary subcommittee charged with overseeing electronic privacy and antiterrorism enforcement and is a former prosecutor in Ohio.

A panel of the U.S. Court of Appeals in Washington, D.C., decided 2-1 last month to uphold the FCC's extension of CALEA to broadband providers, and it's not clear what will happen next with the lawsuit. Judge Harry Edwards wrote in his dissent that the majority's logic gave the FCC "unlimited authority to regulate every telecommunications service that might conceivably be used to assist law enforcement."

The organizations behind the lawsuit say Congress never intended CALEA to force broadband providers--and networks at corporations and universities--to build in central surveillance hubs for the police. The list of organizations includes Sun Microsystems, Pulver.com, the American Association of Community Colleges, the Association of American Universities and the American Library Association.

If the FBI's legislation becomes law, it would derail the lawsuit because there would no longer be any question that Congress intended CALEA to apply to the Internet.

Wait'll they find the tunes

Students Cry Foul Over Cell Phone Policy: Teens Say Officials Are 'Overreacting' And Violating Their Privacy
Eric Athas

Fearing their wireless freedom may be in jeopardy, students at Framingham High School were fuming over a new school policy that allows administrators to seize cell phones and search their contents.

The policy, administrators say, is to improve security and stop the sale of drugs and stolen goods, but students said that the edict is an invasion of privacy.

"It's not anyone's business what is in students' cell phones," said Demitriy Kozlov, who will be a senior in September. "If they think someone's dealing a pound of coke or pot, then there is a reason to, but that doesn't happen here."

Kozlov said he believes administrators are overreacting and making the school appear more troublesome than it actually is.

School officials "reserve the right to look through the cell phone," when they suspect a student has drugs or stolen goods, according to Principal Michael Welch.

"People shouldn't get power based on suspicions, people should be considered innocent until proven guilty," said senior Adam Goldberg. "It feels like our rights are stripped away when we walk through the doors."

Scott Siegal is a senior at Newton South High School, where Welch was principal before going to Framingham, and said there is a major difference in Newton South and Framingham's policies.

"We have an open campus at Newton South, and it seems like (Welch) is making things stricter at Framingham," said Siegal, who was a sophomore when Welch was the principal at Newton South. "We would never have had a policy like this."

The rule complies with federal law, which says a school can conduct searches when there is "reasonable suspicion" that a student has contraband.

"It's kind of ridiculous," said Dayna Green, who recently graduated from Framingham, and is headed to Fitchburg State College in September. "They try to make us feel independent, but then they invade our privacy."

The cell phone policy is not the only change at Framingham: Staff will be required to wear identification badges at school. That move is an attempt to keep track of people who should not be on school property.

Green said the policy will only make students feel uncomfortable, and will not stop students from breaking the rules.

"I think it is more of a scare tactic," she said. "Something bad is going to happen everywhere."

Identity Thief Finds Easy Money Hard to Resist
Tom Zeller Jr.

By the time of Shiva Brent Sharma's third arrest for identity theft, at the age of 20, he had taken in well over $150,000 in cash and merchandise in his brief career. After a certain point, investigators stopped counting.

The biggest money was coming in at the end, postal inspectors said, after Mr. Sharma had figured out how to buy access to stolen credit card accounts online, change the cardholder information and reliably wire money to himself — sometimes using false identities for which he had created pristine driver's licenses.

But Mr. Sharma, now 22, says he never really kept track of his earnings.

"I don't know how much I made altogether, but the most I ever made in a quick period was like $20,000 in a day and a half or something," he said, sitting in the empty meeting hall at the Mohawk Correctional Facility in Rome, N.Y., where he is serving a two- to four-year term. "Working like three hours today, three hours tomorrow — $20,000."

And once he knew what he was doing, it was all too easy.

"It's an addiction, no doubt about that," said Mr. Sharma, who inflected his words with the sort of street cadence adopted by smart kids trying to be cool. "I get scared that when I get out, I might have a problem and relapse because it would be so easy to take $300 and turn it into several thousand."

That ease accounts for the sizable ranks of identity-fraud victims, whose acquaintance with the crime often begins with unexplained credit card charges, a drained bank account or worse. The victims' tales have become alarmingly familiar, but usually lack a protagonist — the perpetrator. Mr. Sharma's account of his own exploits provides the missing piece: an insight into both the tools and the motivation of a persistent thief.

Identity theft can, of course, have its origins in a pilfered wallet or an emptied mailbox. But for computer-savvy thieves like Mr. Sharma, the Internet has forged new conduits for the crime, both as a means of stealing identity and account information and as the place to use it.

The Secret Service and the Federal Bureau of Investigation have invested millions of dollars in monitoring Internet sites where thousands of users from around the world congregate to swap tips about identity theft and to buy and sell personal data. Mr. Sharma frequented such sites from their earliest days, and the techniques he learned there have become textbook-variety scams.

"Shiva Sharma was probably one of the first, and he was certainly one of the first to get caught," said Diane M. Peress, a former Queens County prosecutor who handled all three of Mr. Sharma's cases and who is now the chief of economic crimes with the Nassau County district attorney's office. "But the kinds of methods that he used are being used all the time."

As far back as 2002, Mr. Sharma began picking the locks on consumer credit lines using a computer, the Internet and a deep understanding of online commerce, Internet security and simple human nature, obtained through years of trading insights with like-minded thieves in online forums. And he deployed the now-common rods and reels of data theft — e-mail solicitations and phony Web sites — that fleece the unwitting.

Much of this unfolded from the basement of a middle-class family home in Richmond Hill, Queens, at the hands of a high school student with a knack for problem solving and an inability, even after multiple arrests, to resist the challenge of making a scheme pay off.

That is what worries Mr. Sharma's wife, Damaris, 21, who has no time for the Internet as she raises the couple's 1-year-old daughter, Bellamarie.

"I hate computers," she said. "I think they're the devil."

A Thief's Tool Kit

Mr. Sharma is soft-spoken, but he does not shrink from the spotlight. He gained fleeting attention after his first arrest, as the first person charged under a New York State identity-theft statute — and later, at his high school graduation at the Rikers Island jail, where he was the class valedictorian.

For a prison interview, he has applied gel to his mane of black hair. He is Hollywood handsome, with deceptively sleepy eyes and smiles that come as tics in reaction to nearly every stimulus — a question, a noise. Prosecutors interpreted those smiles as evidence of smug indifference.

A tattoo of Shiva, the Hindu god of destruction and his namesake, is just visible on Mr. Sharma's right arm, under the short sleeve of his green prison jumpsuit.

Recalling his youth, Mr. Sharma said he was not unlike many other young people growing up with the mating calls of modems and unprecedented access to people, sounds, software and other thrills streaming into the family's home over the Internet.

As the youngest of three children in a family of immigrants from Trinidad — his parents brought the family to Queens when he was 6 — Mr. Sharma said sibling battles for access to the computer were common. He studied programming at Brooklyn Tech, one of New York's most selective public high schools, where he met Damaris.

He enjoyed chatting on AOL and was drawn, along with millions of his peers in the early days of file sharing, to downloading MP3's.

As he got older, he began hanging out on Internet-based chat channels that dealt with bigger game, like bootleg software. And amid the chatter were whispers of other something-for-nothing sites — ones where thieves had set up bazaars involving credit cards, banks and account numbers.

"So I ended up registering and then I started just looking, really," Mr. Sharma said. "Not really taking anything in, just looking and seeing what's going on there."

Mr. Sharma said he chiefly visited two such sites, Carderplanet.com and Shadowcrew.com, where he was known by the screen name sniper5984 (the number denoted his birthdate). The sites were shut down in 2004, but many others have sprung up to replace them.

"For the aspiring little computer hacker in the United States, they're an excellent opportunity to learn," said Greg Crabb, the assistant director for economic crimes at the United States Postal Inspection Service's international group in Washington. On Carderplanet, for example, "a person could learn how to set up a drop, receive packages, develop other relationships and generally get started in the business."

Mr. Sharma got started with phishing — sending e-mail meant to dupe recipients into revealing their personal or financial data, which can then be exploited. He told investigators that he paid $60 to someone he had met on Carderplanet to buy a program designed to harvest AOL e-mail addresses.

"I pretty much stuck with AOL because I knew AOL is most likely people new to the Internet," Mr. Sharma explained, "people who don't use the Internet for much but chat rooms."

He managed to gather about 100,000 addresses, and crafted an e-mail message that told recipients, "We regret to inform you, but due to a recent system flush, the billing information for your account was deleted." Recipients were instructed to follow a link to a Web page to remedy the situation.

The Web page, which mimicked AOL's look and feel, including a bogus AOL Web address, had form fields requesting everything from name and address to mother's maiden name, Social Security number, date of birth, credit card number, expiration date and bank.
The "submit" button sent the data to Mr. Sharma's e-mail account. He then went shopping.

From the 100,000 phishing e-mails Mr. Sharma sent, investigators say, about 100 recipients were duped into clicking through to the phony AOL Web page he created and filling out the form. Mr. Sharma said he did even better, with about 250 to 300 responses.

And Mr. Sharma went on to more elaborate and lucrative schemes. By the end, he said, he had become well known at Carderplanet and Shadowcrew for being able to "cash out" victims' credit accounts by making large wire transfers from their accounts to himself.

"I cash them out all the time," sniper5984 wrote at Carderplanet on July 5, 2004. "Here's two examples of Citi Cards I have used last month just to show."

Sniper5984 then provided links to two images of the account statement of the victim, a California resident, showing, amid various legitimate charges, nearly $10,000 in Western Union wire transfers made over three days in June 2004.

There were also two charges for Domino's pizza in Ozone Park, Queens.

"There was always a challenge," Mr. Sharma said. "You know, like it's always something like, wow, can I take it to the next step, you know?"

Ms. Sharma recalled that on trips to a Six Flags amusement park, her husband rarely took to the rides, preferring instead the games of chance. "The ones where you win a giant stuffed animal if you can throw some ball into a bucket or something like that, but there's obviously some trick to it," she said. "Well, he would always know the trick."

She also recalled one evening in the summer of 2004, when Mr. Sharma came to her apartment with $27,000 in cash and asked her to hold onto it overnight. The next morning he picked up the money and returned later with a new Acura RSX.

"He liked to race cars," Ms. Sharma said.

Back at the correctional facility, Mr. Sharma struggled to find a clear explanation for his crimes. At times he suggested he was taking aim at a usurious banking industry. At other moments he offered that it was simply a game, that he was young, that he was not thinking clearly.

"Well, you know — I mean there's no, there's no justification behind it at all," he said. "You know it was wrong, and I did it — it was wrong."

He also suggested it all became too easy too fast.

"The challenge was really stopping, you know?" he said. "That was the hardest challenge of them all."

'It's Sharma Again'

The tools that allowed Mr. Sharma to profit from his thievery were also his undoing, more than once.

On Sept. 19, 2002, William Robertson, a 73-year-old retired physical education teacher in Ormond Beach, Fla., received one of the 100,000 e-mail lures that Mr. Sharma's had sent out from Queens, and he fell for the scam.

"I don't know what made me fill out that whole form," Mr. Robertson said. "At that time I was a fairly new user of the computer. And after I did it, I just didn't feel right. But it wasn't until after the credit card company called me that I knew I'd done anything wrong."

A $3,000 Eltron photo ID printer had been bought on his Chase credit card from an online store in Buffalo. He canceled the card and made a report to the Flagler County police. The police determined that the printer had been shipped to a Brent Sharma in Queens.

Just over a month later, on Nov. 8, Peter Ruh, a United States postal inspector, arrived at Mr. Sharma's parents' home wearing a postal delivery uniform and carrying a box of high-end racing car parts that Mr. Sharma had ordered using another credit card account he had hijacked. When Mr. Sharma identified himself and signed for the package, Mr. Ruh, wearing a wire, gave a pre-arranged signal and his fellow inspectors, along with New York City police officers, moved in.

Among the items seized from his parents' basement were a computer, two digital cameras, a scanner, nearly 500 blank plastic identity cards with magnetic strips, two Marine Corps ID's — with Mr. Sharma's name and photo — and a newer model Eltron photo ID printer. A search of his computer revealed personal identifying information on hundreds of people from across the country.

"We were surprised at how forthcoming he was," Mr. Ruh said. "He was very proud of his accomplishments."

It was the first of many encounters that Queens postal investigators would have with Mr. Sharma over the next two years. "I'd get a call from someone over at Postal and they'd say, 'You're not going to believe this,' " Ms. Peress said. "And then they'd say, 'It's Sharma again.' "

Even with charges of identity theft pending in the AOL case, Mr. Sharma was arrested and charged again, in May 2003, for schemes involving the hijacking of Amazon.com accounts, moving fraudulently bought merchandise through auctions at eBay and Yahoo, and enlisting the father of a friend to receive shipments at his home in exchange for a digital camera.

Four months later, as part of a combined plea agreement, Mr. Sharma was permitted to plead guilty in the first case as a youthful offender, avoiding a felony designation. He pleaded guilty in the second case to two felony counts of identity theft and unlawful possession of personal identification information. In November 2003 he was sentenced to five years' probation and 350 hours of community service and was ordered to pay $5,000 in restitution.

But within a month, on Jan. 21, 2004, sniper5984 was active again at Carderplanet. "I am looking for partners," he wrote.

Logging Off

By the summer of 2004, investigators had begun piecing together a string of complaints from out-of-state consumers whose credit card accounts had been hijacked for tens of thousands of dollars in bogus charges, and they quickly recognized the modus operandi.

Mr. Sharma was arrested again in October while accepting a package under the watch of postal inspectors. A search of his apartment in Ozone Park on Oct. 16, 2004, the day after his final arrest, turned up consumers' credit bureau reports, assorted hand-written notations of credit card accounts and Social Security numbers and printed chats showing him negotiating online for the purchase of FirstUSA and MBNA credit cards.

Mr. Sharma remembers making heavy use, just before his last arrest, of the credit card of a commercial airline pilot from Florida.

Receipts show that a Jean Pascal Francis, presenting a Michigan state identification card, signed in Queens for nearly $5,500 in Western Union cash transfers charged to the pilot's account on a single Friday afternoon in July 2004. A Michigan state identification card with that name and Mr. Sharma's photograph was among the documents later found in Mr. Sharma's apartment.

"I thought it was horrible," recalled the airline pilot, who did not want to be named because he feared it would invite other thieves to take a crack at him. "You just feel violated in terms of your privacy."

Meanwhile, Mr. Sharma, whose family had moved to Florida, was largely on his own in New York and was burning through cash like rocket fuel.

"I tried every five-star hotel in Manhattan," he said. "That's why they say, 'Oh, he stayed at the Parker Meridien, the Regency, the Waldorf-Astoria.' You know, I went to all those and just stayed. The Mandarin Oriental is by my wife's house, and that's supposed to be the nicest one and the newest one, so I went there and it's like $3,500 a night."

"The more you make," he added, "it's like, it becomes a different kind of lifestyle."

The question now is whether Mr. Sharma, who has a parole hearing in August, can adapt to a less lucrative lifestyle when he gets out.

He says he is determined to stay clean long enough for his knowledge of fraud techniques to become obsolete. "I've just got to stay with my daughter and just try and stick it through another year or two," Mr. Sharma said, "because by then things have changed so much that it will be kind of hard for me to just go back in there and do everything."

His wife understands the temptations that will lurk in the meantime.

"I do worry a whole lot because — I don't want to say I agree, but I understand his mentality," Ms. Sharma said. "People work really hard for eight hours a day and make minimum wage. And he knows he can get out and make the same thing with the computer in half an hour."

Skype fights back

Can Skype Convince The Doubters That It Is Capable Of Being Secured?
John E. Dunn

The image of VoIP Internet calls pioneer Skype has been struggling recently but it is fair to say that only a tiny fraction of its millions of regular users will have had the faintest idea that anything has been even slightly awry.

Judging by the slow reaction, Skype’s management have also been unaware that the image of the program had started to change in some circles, or that such a body of opinion, however small, might matter.

Now that tardiness appears to be changing – Skype is shedding its startup complacency and counter-attacking against its critics.

Problems started around the time that the version 2.0 beta appeared last year, the moment when a handful of software engineers started to assess a troubling issue thrown up by the program’s new and evasive design: it was incredibly hard to detect using perimeter security systems.

Skype’s unofficial explanation for its extreme stealthiness has always been that this was necessary to avoid telcos threatened by its business model from blocking it. While this presents no issues for a home user, using “invisible” software capable of making and receiving voice calls, opening instant messaging sessions and exchanging files on a corporate networks, caused some to ponder whether the ever-more-popular Skype hadn’t just turned itself into a huge security risk.

Is such a design really that big a security deal? It could be if the company in question is expected to comply with laws on information disclosure, or simply to meet best security practice. It stands to reason that any application moving data in and out of a company’s network without that company being aware it is even there offers the potential for abuse.

And Skype has certainly been turning up on corporate networks, though people disagree about whether this has been driven by a naïve desire by departmental heads to save on phone charges or just employees importing their home software into places of work because they happen to like using it.

In May, Techworld reported that US company Reconnex had detected Skype running on 22 percent of analysed company networks, one program among a growing panoply of unauthorised P2P software. According to the company, companies were not aware of the program’s existence, and were not tracking, blocking or managing it in any way.

As with any software, the program has also suffered its own vulnerabilities, which open a new class of risks of their own. How can you patch something on a risk you don’t even know, nor can know, you have on your network? You can’t.

With all this going on it is surprising that Skype has been able to keep its head down. About the only concession the company has made is to start publishing a security blog of sorts, where it attempts to explain its position. At best, these have been partial rebuttals of some of the criticisms the program has attracted.

For instance, one from March discusses the possibility of managing Skype, turning off features considered inappropriate in enterprises, such a file transfers.

This assumes, however, that companies know about Skype’s existence, are prepared to devote time to using it in the ways described, and are willing to configure security using a proxying setup where applications must pass through an access layer.

Interesting then that earlier this month Skype embarked on a campaign to put its point of view, speaking to a number of journalists, Techworld included. According to Kurt Sauer, Skype’s CSO, the program is misunderstood by its critics.

“One of the reasons Skype is difficult o find is that the people who provide the carrier services [ISPs, telcos] are in competition with Skype,” he said, repeating the claim that Skype uses stealthiness because it has to.

“We don’t want the product to work in such a way as to allow it to be degraded.”

According to Sauer – by way of evidence - unnamed US cable companies had been blocking third-party services such as Skype and Tivo because they wanted to make money from the same services. But invisibility and its accompanying problems still seems a high price to pay to stop the interference of a few companies nobody outside of certain states in the US will even have heard of, surely?

He also revealed that the company was currently looking at the issues of how it recommends user patches and upgrades that have been driven by security vulnerabilities. There is a body of opinion that users should be compelled to patch, or at least have the choice properly explained to them (at the moment, security is not given as a reason to upgrade which allows people to ignore the prompts).

Sauer revealed that Skype has now seen the errors of its silence on enterprise security and had just appointed someone to oversee the creation of security guides that would set out how to use and manage it securely.

He wasn’t able to set a date by which these would be publically available, but they are sure to attract a great deal of interest from the vocal minority who view Skype in a critical light, when they do finally appear.

Short of a wide embracing of the proxying technologies suggested by Skype, it seems unlikely that the controversy about Skype security-worthiness in companies will recede quickly. It is, nevertheless, good that the company is no longer simply denying it has a problem to sort out, and is bothering to puts its case.

There is no reason why Skype should adopt the awkward mantle of its parent, eBay, and retreat into arrogance and convenient silence.

Internet Calling Pressures Bells to Lower Rates
Matt Richtel and Ken Belson

Competition in the phone business, intensifying this year as Internet-based calling has taken root, has reached the point where many industry experts are anticipating an era of remarkably cheap and even free calls.

That era would be built on a vast migration of phone service from traditional networks to the Internet, where the calls become just another way to use Internet connections that consumers are paying for anyway.

"People are going to look at voice communications as something they expect to get for free," said Henry Gomez, general manager of Skype, which eBay bought last year for $2.6 billion. The company usually charges a few cents a minute for calls from computers to regular phones, but in May it eliminated those fees through the end of the year for users in the United States and Canada.

New competitors, including the major cable companies and start-ups like Vonage and SunRocket, are putting intense pressure on traditional phone companies like AT&T and Verizon that have built multibillion-dollar empires by selling phone service over copper wires. On the defensive, AT&T and Verizon are discounting heavily and pushing customers toward packages of more advanced services.

Online services like Skype that offer free calls from computer to computer for users with headsets have attracted the tech-savvy and are trying to push into the mainstream. In the process, they are dragging down everyone else's prices and pointing the way toward a time when it will be harder and harder for companies to charge anything for a basic home phone line on its own.

There are signs that changes in the business of calling are also altering the way people use these voice services. Mr. Gomez said some Skype users take language classes over the phone, unconcerned about the length of their calls. He has also heard of parents going out and leaving their child with a babysitter, but using the free voice link as a baby monitor to listen in on their child's room.

"When the cost is so little, you start to see people using voice differently," he said.

Internet-based calling is not new, but the momentum behind it is growing. In 2005, the number of subscribers to Internet-based calling services nearly tripled from the year before, to 5.5 million, or about 3 percent of the overall market. By 2010, the research firm TeleGeography expects Internet phone providers to win about a quarter of the traditional local phone business.

To stem the tide, the traditional Bell operating companies have been moving into new businesses like television and strategically dropping the price of traditional phone service. In New York, Verizon recently sent letters to customers offering a calling plan that includes unlimited phone service for $35 a month, instead of $60, a 42 percent cut. For people signing up for service through its Web site, AT&T now offers unlimited local and long distance service for $40, down from $50 a year ago.

The average user of Internet voice calling, known as voice over Internet protocol, or VoIP, pays $25 a month for unlimited calling, according to VoipReview.org, a Web site that tracks the industry. International calls are most often not included in the flat rate, but those prices are also coming down.

The Bells still control the bulk of the country's 180 million landlines and are far from giving up on what has been a giant cash cow. When pushed, they are even offering their own Internet-based calling, but these services are rarely advertised. It is cheaper to cut prices to keep customers, they figure, than to try to win back customers later from a rival.

During the first quarter of this year, the number of traditional telephone lines dropped by 150,000 a week, according to TeleGeography. At the same time, the number of subscribers to Internet telephone services has increased by 100,000 a week.

AT&T, among others, says the drop in lines is not as painful for the Bells as it looks. Many customers cancel phone lines they used for dial-up Internet service, but then sign up for broadband services provided by their phone company. Other customers eliminate a phone line but buy a cellphone plan from Cingular, which AT&T owns with BellSouth.

Even so, the Bell companies' stocks have been undercut by the growing prominence of the cable companies' phone businesses and by having to invest tens of billions of dollars in new businesses like television.

The main reason for falling prices for phone service is that it costs less to deliver voice communications over the Internet than over the traditional phone network.

With the old technology, phone companies use costly equipment that directs a call through complex switches to its destination. On the Internet, phone calls are broken up into small packets of data, just like an e-mail message or a Web page, and then delivered to their destination. Instead of having to build and maintain their own networks, VoIP services generally use the infrastructure of the Internet, which is far cheaper but can sometimes lead to degraded service.

Charles A. White, senior vice president of the research firm TNS Telecoms, said that down the road consumers would "spend less and less for voice" and stop paying a separate fee for calls. Instead, he said, they will "just pay for 'communications services.' "

There are some hurdles to adoption of the new services. To use most of them, consumers must first have a high-speed Internet connection, which can cost $15 to $70 a month. Some of the lowest-cost services, like Skype, require people to download software, and users generally talk through a headset plugged into the computer.

Services like SunRocket, Packet8 and Vonage sell unlimited calling plans that let customers use ordinary phones. Internet-telephone plans from cable companies are often only a few dollars cheaper than comparable offers from the Bells, but are typically more reliable than service from the start-ups.

One recent convert to low-cost calling is Walter Andrews, 66, a retired language teacher in Cambridge, Mass., who signed up for SunRocket early last year, paying up front for a year of unlimited phone service at $16.50 a month. He signed up again this year, but when his annual contract expires in 8 months, he plans to consider other options. SunRocket itself recently had a promotion offering unlimited service for $8.29 a month.

"I'm certainly not going to pay even $16, as cheap as that sounds, if the price drops to nothing," said Mr. Andrews, who spends part of the year in Scotland and uses the technology to communicate with his wife, who lives overseas year round.

In a world in which everyone placed and received calls over the Internet, the cost of transmitting the calls would, in fact, be virtually nothing. But there are government-regulated fees of a fraction of a penny per minute for transferring calls onto the regular phone network, which most people continue to use. VoIP services also have their own costs that they must either pass along to customers or find a different way to subsidize, including administration, marketing and technology.

For example, 8x8 Inc., a company that sells an unlimited Internet telephone service called Packet8 for $20 a month, figures it spends around $7 a month per user to connect calls. The company spends another $4.50 a month on customer service and $4 to cover customer acquisition costs, bringing its expenses to around $15 per user, said Huw Rees, vice president of sales and marketing for 8x8.

In this way, Internet-based calls may often be free, but there is a cost of entry. "Voice calls will never be totally free," said Jeffrey A. Citron, the founder and chairman of Vonage, the largest Internet phone provider with 1.6 million customers. "If you want voice mail, you pay. If you want a phone number, you pay. Suddenly, free is $15."

Still, $15 is one-third of the typical phone bill. As they cope with falling prices, some companies are experimenting with ways of subsidizing calls, either through advertising or by giving away basic phone service and charging only for additional features like caller I.D. EBay sees Skype as a way to help buyers and sellers on its auction site close deals.

Verizon is concentrating on selling a suite of products to customers in its faster-growing markets and is considering pulling out of markets where it sees little profit potential in upgrading its older network for the new technologies. These markets may include Vermont, New Hampshire and Maine, according to people with knowledge of the company's strategy.

AT&T hopes it can offset the loss of land-based lines with gains in wireless phone service, and by shifting the core of its business to the high-speed Internet connections known as digital subscriber lines, or D.S.L., a technology that divides old phone lines into two parts: one for voice and one for data.

"We view D.S.L. as the access line of the future," said Mikal Harn, vice president of consumer marketing for AT&T. As for consumers paying for calls by the minute or the distance the call travels, "I don't think you've seen the death if it," he said. "But there's a point where you drive to that."

New competitors keep jumping into the phone business. The nation's biggest cable companies, including Time Warner Cable, Comcast and Cablevision, are using phone services — which are relatively cheap to offer — as a way to draw consumers to their high-speed Internet and television services.

Earthlink, the Internet access provider, last month opened its first retail store in Seattle, where it is testing out a new service plan: $70 for fast Internet access of up to 8 megabits per second, along with unlimited phone service. It plans to offer the same service soon in San Francisco and Dallas, and then to more cities.

"We're an Internet company and we didn't really view this as us getting into the voice business. It's that the voice business is becoming an Internet business," said Stephen Howe, vice president of voice services at Earthlink.

Perhaps a perverse indication of widespread expectations that phone prices will continue to fall was the botched public offering of Vonage last month. Vonage, an Internet telephone pioneer whose name has become synonymous with the concept, watched its share price fall sharply on its debut.

But Wall Street analysts and industry executives said this was hardly a rejection of the technology, but rather a reflection of the stiffening competition and relentless price pressure.

I'll Call You
Kelli B. Grant

WHO DOESN'T SCREEN CALLS these days? Whether you're hiding from a telemarketer, your college alumni association or that cutie you met at a bar last weekend, there are many times when you seriously regret having given out your precious digits.

So don't.

Thanks to Private Phone, a free new service launched June 1 by Internet provider NetZero, you can now set up a disposable phone number — kind of like the free email account you use to hold spam.

Unlike paid subscriptions that offer an extra phone line, this free disposable number service works with your existing number. You sign up online, selecting the area code and number. When people call your disposable number, they're forwarded automatically to voicemail. You'll get an email or text message notifying you of the message, which you can retrieve online or by phone.

You can open multiple accounts and close them at any time. And the person calling you need never know they're not reaching your real number. The mailbox only holds 10 messages, however, so you'll need to keep it clear to keep receiving calls.

You might benefit from a disposable phone number if you:

Post classified ads on Craigslist, in your local newspaper, or on community bulletin boards.
Have an unlisted number — and want to keep it that way.
Frequently sign up for sites, newsletters and freebies online. (Signing up often means your info is shared with site partners and third-party retailers.)
Want to make your contact information available online, say, on your blog or personal web site.
Get asked for your number by a (cute) stranger.

Another company, Jangl, is conducting beta tests for a similar service, though no launch date has yet been announced. Here, calls to your disposable number will be automatically forwarded to your phone, while keeping your real number anonymous. Interested in trying it? Sign up for their beta tests online.

A Terror Strike, Choreographed on a Computer
Raymond Bonner

The bombs should be small and placed in day packs, making them harder to detect. The bombers should dress like tourists. They should not bother targeting hotels because security is too tight. Instead they should consider restaurants, discos and theaters.

A thorough survey should be done in advance by the bombers themselves. That way, they are more familiar with the sites, and no one is left behind to be hunted later by the police.

"There is no escape plan because the perpetrators will become martyrs," the planning document states. "They will go to the targets and not return."

That is part of the playbook for a suicide bombing, including even a minute-by-minute choreography of the bombers' final hours. The Indonesian police uncovered the document from the computer of one of the planners of an attack last October in Bali, which killed 20 people when three men walked into separate restaurants and blew themselves up.

The document offers a rare glimpse into the minds of the most cunning terrorist plotters and of the kind of meticulous planning that lies behind their operations. It also shows what even a small, local group with few resources can do, and the difficulty of thwarting their plans.

"It tells us that these guys tried to think of every contingency," said Sidney Jones, project director of the International Crisis Group's office in Jakarta, and one of the foremost authorities on terrorism in Southeast Asia. "Even when they're being hunted, they had the capacity to think through what had to be done right down to the second."

The 34-page document, titled "The Bali Project," was found on the computer of Azhari Husin, a Malaysian-born engineer educated in Australia and Britain who became a master bomb maker and was one of the most dangerous terrorists in Southeast Asia until he was killed in a shootout with the police last November.

The document was given to The New York Times by a person who requested anonymity because it had not been officially released. It was first reported on by Tempo, an English-language weekly newsmagazine here.

Mr. Azhari's co-planner was Mohammad Noordin Top, who has narrowly escaped capture several times and remains on the run, one of the most wanted men in Southeast Asia.

The Indonesian police have said they found no evidence of any link to Al Qaeda in the Bali bombings. Members of Jemaah Islamiyah, the fundamentalist Islamic movement here, were involved, but the operation was not directed from the top of that organization, the police have said.

The document, written in six sections, sheds little new light on those links but corrects some initial speculation about the attack — that the bombs were assembled in the Philippines, for instance, and that the attack was aimed at the Indonesian government, or the Balinese economy.

The author, who the police say they believe was Mr. Azhari himself, begins by asking, "Why Bali?" Because it will have a "global impact," he answers. "Bali is known around the world, better than Indonesia itself," the author writes. "An attack in Bali will be covered by the international media."

In Section 2, "Method of Attack," he notes that the plan must differ from the first attack in Bali, in October 2002, when a minivan loaded with explosives was detonated in front of two nightclubs, killing 202 people.

Now, "security is tighter," the author writes, noting that the police chief in Bali had increased the number of intelligence officers to 256 from 70.

The author concludes that it is too risky to bring in a truck or a similarly large amount of explosives and that it would be more difficult to rent a house with a garage to assemble a bomb. "The bomb must be smaller, and brought in ready to use," the document says.

The targets, the author writes, are "foreign tourists from America and its allies," which included all NATO countries, as well as Australia, New Zealand, South Korea, Japan, Thailand and the Philippines.

The author knew that the bombers would have trouble determining the native country of many tourists. "So, we will consider all white people the enemy," the document says.

A few weeks before the attacks, the three men who would carry out the operation were sent to Bali to do a "survey" of possible targets for themselves.

Beforehand, they were told to learn what they could about Bali, a popular tourist island, on the Internet, and to get tourist brochures from travel agents and a tourist map.

The possible targets surveyed included McDonald's, Pizza Hut, Burger King and KFC restaurants, theaters, a golf course, tattoo parlors, art galleries and souvenir stalls.

As part of their surveillance, the men were told to "pay attention to clothes worn by local tourists" and what kind of day packs or shoulder bags they carried and whether they carried more than one.

The men did their reconnaissance, then reported back.

The next section includes a question-and-answer exchange between the men and their "field commander," presumably Mr. Azhari.

The men had concluded that the bombers should not use taxis to reach their targets because a taxi driver might help with the backpacks and be suspicious of their weight.

Rather, they should take a motorcycle taxi, which offers no opportunity for the driver to talk to the passenger. As for how to dress, they decided on black shirts, below the knee shorts or jeans and exercise shoes or sandals.

They decided that discos and nightclubs offered potential targets because most of the patrons were foreigners, and there was "no security to speak of, easy to enter."

But those sites were ultimately rejected, because backpacks would be suspicious at the time of night when the clubs got crowded, after 9 p.m.

That led the men to consider restaurants in Kuta, one of the most popular tourist districts, as well as the seafood restaurants on the beach at Jimbaran. "Of all the places," the document says, "this may be the easiest, God willing."

The team explained how the tables at Jimbaran were arranged in the sand, about a yard apart with three to seven diners at each. "Almost 80 percent of the patrons are white," they said. Others were Chinese or Japanese, they noted, using a derogatory term.
The best time would be around 7:30 p.m., when the restaurants were the most crowded and a backpack would not be suspicious.

The survey team came up with four options. Mr. Azhari and Mr. Noordin, it is presumed, chose the fourth: one restaurant at Kuta Square and two restaurants at Jimbaran.

Simultaneous attacks in two locations "will have greater effect than simultaneous attacks in one location," the document states.

There was a further reason for choosing the restaurants at Jimbaran: many of the patrons were businessmen. "The death of foreign businessmen will have a greater impact than of young people," the document says.

The backpack bombs were to be assembled by Mr. Azhari at his base in Java, and there was a serious concern about whether they could be taken on a bus to Bali without being detected. At the Bali port of Gilimanuk, where the vehicle ferry lands, passengers are required to get off and their identification cards are checked.

The backpacks with the bombs could be left on the bus — the police did not inspect baggage left on the bus, the team reported.

The team determined that the backpacks should not be mountaineering backpacks, but student day packs, to avoid suspicion. For that reason, Mr. Azhari constructed relatively light bombs weighing 10 to 12 kilograms, or 22 to 26 pounds.

He devised two elaborate detonating systems, which Section 4 of the report explains in detail, including schematic diagrams of the wiring system and drawings of a man with the wired backpack.

The first was "direct" and connected to the explosives in the backpack. The other was on "delay," for explosives in a fanny pack worn by the bombers.

The delay time was 30 seconds; the bomber would flip the switches for that one as he approached the restaurant. That way, if he were stopped by a guard and could not set off the main bomb, the fanny pack would still explode.

Mr. Azhari worried that the bombs might explode during the bus ride from the base to Bali, if the bus hit a bump or the backpack was jostled, or on the motorcycle from the boardinghouse to the targets. For that reason, he decided to use four switches as a precaution.

"It's important to make the bomb systems as simple as possible so the perpetrators don't get confused," the author wrote.

There was a green light, placed on the chest side of the left backpack strap so that it was visible only to the bomber, which would go on when the delay system had been an activated. A red light, similarly hidden on the right strap, would indicate that the main bomb was ready, and the bomber only had to flip the last switches. The order in which the switches were flipped did not matter.

In Section 5, "The Attack," the final movements of the suicide bombers are planned, in some cases to the second.

5:25 p.m. — Pack, check out of the boardinghouse and synchronize watches.

5:30 — Look for a motorcycle taxi to Legian Beach, in Kuta.

6:15 — Arrive near the Hard Rock Cafe and look for a place to pray.

6:35 — End evening prayers. Then the two groups split up.

7:21 — The man who is going to detonate his explosives in Kuta begins moving toward the restaurant, making sure the red and green lights are on.

7:33:04 — Arrive at the restaurant.

7:33:25 — Make sure the delay switches are all ready, and enter restaurant.

Meanwhile, the other two suicide bombers reach Jimbaran Beach at 6:50, loiter at a food stall until 7:30, then synchronize their watches again, and begin walking to the outdoor tables on the beach, one 45 yards behind the other. The first man walked into the table area, and the second did the same. Then, the document concludes its choreography.

7:34 — "ALLAH-U AKBAR!!!"

"We tried to minimize the impact on Muslims," the author explains in the final section, which was written after the attack. "Nevertheless, there were still Muslim victims killed and wounded."

The death toll was a relatively low number compared with the first Bali attack. Five of the 20 killed were foreigners: 4 Australians and a Japanese. Fifteen were Indonesians.
http://www.nytimes.com/2006/07/03/wo... tner=homepage

Preteen Mag Accused of Military Pitching

Parents and teachers are complaining that the latest issue of a popular magazine for preteens amounts to little more than an early recruitment pitch for the Army.

Cobblestone magazine, which is put out by Carus Publishing in Peterborough, is aimed at children ages 9-14 and is distributed nationwide to schools and libraries. Its latest issue features a cover photo of a soldier in Iraq clutching a machine gun and articles on what it's like to go through boot camp, a rundown of the Army's ''awesome arsenal'' and a detailed description of Army career opportunities.

Most controversial has been a set of classroom guides that accompany the magazine, which suggest teachers invite a soldier, Army recruiter or veteran to speak to their classes and ask students whether they might want to join the Army someday.

One of the teaching guides -- written by Mary Lawson, a teacher in Saint Cloud., Fla. -- suggests having students write essays pretending they are going to join the Army: ''Have them decide which career they feel they would qualify for and write a paper to persuade a recruiter why that should be the career.''

''Some of the teachers were like, 'Holy cow, look at this,''' said Francis Lunney, a sixth-grade English teacher in Hudson, Mass., who quickly called the publishing company to complain. He told The Boston Globe that the guides looked exactly like the official recruiting material distributed at high schools.

The dozen or so similar complaints come at a time when the military, struggling to meet recruitment goals, has become more aggressive in trying to attract young people. But Cobblestone's editors insist the idea for the special issue was theirs alone, though they received permission to use Army photos.

Managing editor Lou Waryncia said the magazine did not intend to recruit for the Army but will consider future issues in light of the criticism, which has been greater than for any previous issue. Though previous issues have dealt with the Civil War and other military conflicts, the recent one is somewhat of a departure in that the Army was a focus by itself.

''We planned to do this well over two years ago,'' he said. ''It just happened to come out at a time when the country's feelings are in a certain place'' about the war in Iraq.

Virginia Schumacher, a retired teacher and manager at the History Center in Ithaca, N.Y., wrote one of the classroom guides. She defended the magazine, saying joining the military is a career option for any child.

''That doesn't suggest that they should or should not,'' she said. ''In that magazine, I felt they gave a wonderful portrayal of jobs that are not what everyone thinks of when they think of the Army. It was not meant to offend anyone.''

Cobblestone, which has a paid circulation of 30,000, is one of a family of award-winning children's magazines published by Carus. It was started by two teachers in 1979 to promote reading and history and grew into six magazines that cover American history, geography, world cultures, world history, science and space, general studies and reading.

Widebody Boondoogle

Lawsuits Fly Over Google Founders' Big Private Plane
Kevin J. Delaney

Even billionaires have disputes with their contractors.

Sergey Brin and Larry Page, the low-key co-founders of Google Inc., set tongues wagging last year when they bought1 a used Boeing 767 widebody as an unusually large private jet. The 767-200 typically carries 180 passengers and is three times as heavy as a conventional executive plane. Mr. Page said last year that he and Mr. Brin would use it for personal travel, including taking "large numbers of people to places such as Africa." He said it would hold about 50 passengers when refurbished, but declined to comment on other details of the plane, which has been kept ultra secret.WALL STREET JOURNAL VIDEO

Now the Delaware holding company that technically owns the 767, Blue City Holdings LLC, is embroiled in multiple lawsuits with an aviation designer hired to plan and oversee the massive plane's interior renovation.

Blue City in early 2005 hired Leslie Jennings, a high-end aviation designer whose work includes planes for Microsoft Corp. co-founder Paul Allen and assorted royalty and heads of state, to transform the plane, which aviation records indicate previously flew for over a decade in Qantas Airways' fleet.

Under the plans Mr. Jennings worked up for the executives, and repeatedly modified according to their specifications, the widebody airliner was to include a lounge near the front primarily for Google Chief Executive Eric Schmidt's use, with two adjoining staterooms for the co-founders farther aft, Mr. Jennings says. People familiar with the matter said last year that the plans also called for a large sitting-and-dining area and space near the rear for staff and passengers.
Leslie Jennings says these drawings, which were created and distributed to aviation executives, are near-exact copies of his plans for refurbishing the Blue City 767. The plans depict, from front to back, a lounge area, two adjoining bedrooms, a large sitting and dining area, a seating area and large galley.

Mr. Jennings says Messrs. Brin and Page "had some strange requests," including hammocks hung from the ceiling of the plane. At one point he witnessed a dispute between them over whether Mr. Brin should have a "California king" size bed, he says. Mr. Jennings says Mr. Schmidt stepped in to resolve that by saying, "Sergey, you can have whatever bed you want in your room; Larry, you can have whatever kind of bed you want in your bedroom. Let's move on." Mr. Jennings says Mr. Schmidt at another point told him, "It's a party airplane."

But last October, Blue City terminated Mr. Jennings's contract, saying he wasn't doing his job properly. Mr. Jennings then filed a nearly $200,000 lien against the aircraft with the Federal Aviation Administration for payment he hadn't received. He later filed a complaint related to the matter against Blue City and Gore Design Completions Ltd., the San Antonio executive-jet outfitting firm that worked on the plane, in District Court in Bexar County, Texas.

Months later, Blue City and Mr. Jennings continue to face off in acrimonious court battles with legal fees steadily mounting. In its complaint filed in California Superior Court in Santa Clara County, Blue City alleged that Mr. Jennings didn't properly perform the design work and failed to closely manage the plane's renovation in line with the contract for $340,000 he had signed, and various additional expenses that Mr. Jennings estimates at nearly $50,000. A court filing says the refurbishment was planned as a 10-month project, which Mr. Jennings says he understood was originally budgeted for about $10 million but eventually cost more.

Mr. Jennings, 67 years old, says the allegations are groundless. He says he was wrongly fired after trying to alert Mr. Schmidt that Blue City was going to be overcharged for some materials used in the interior of the plane. Mr. Jennings says allegations that he wasn't sufficiently involved in the project or accessible to the plane's owners are false, and has over 1,200 emails related to the project to disprove them.

David Schwarz, a lawyer for Blue City at Irell & Manella LLP in Los Angeles, said in a statement that the company proceeded with the plane's refurbishment following Mr. Jennings's firing, but took legal action to enforce its agreement with Mr. Jennings and protect the confidentiality of the project. Mr. Jennings's request for a temporary restraining order, which a Texas judge denied in January, could have halted work on the project.

Mr. Jennings, who does business as Design Associates International of Mead, Okla., says Blue City is deliberately running up his legal costs, as the suit takes a toll on his health and his business. "They're intent on seeing whether they can break every bone in my body and drain every cent out of me," says Mr. Jennings.
Copies of views of the planned interior, the designer says.

Mr. Schwarz in the statement said Blue City declined to comment on any aspect of the aircraft and said Mr. Jennings's comments to The Wall Street Journal about the plane appeared to violate a confidentiality agreement and an April court order.

In response, Mr. Jennings says there's a lot of information about the plane's refurbishment publicly available already, including a copy of the floor plan and other drawings circulating among aviation-industry executives. Mr. Jennings says those plans and drawings circulating appear to be virtually exact copies of his designs that someone else created. "I don't see how there's anything confidential about the layout of that plane," he says.

"It does seem to be a tremendous fight over relatively few issues," says Bruce Cleeland, a lawyer for Mr. Jennings with Haight Brown & Bonesteel LLP in Santa Ana, Calif.

Mr. Schwarz did not respond to a request to interview Messrs. Brin, Page or Schmidt, which a Google spokesman referred to him. A spokeswoman for Gore Design declined to comment. A Google spokesman and Mr. Page said last year that the plane has no formal connection with the company and that Google would not be reimbursing the co-founders for its costs.

None of the parties will say where the 767 is or whether it has been finished. According to an online flight-tracking database, Blue City has requested with the National Business Aviation Association trade group that data related to the 767's whereabouts not be made public.

A Search Engine That's Becoming an Inventor
Saul Hansell and John Markoff

When Google was a graduate-school project being run from a Silicon Valley garage, its founders, Larry Page and Sergey Brin, built their own computers out of cheap parts meant for personal computers. They wanted to save money, and they felt that they could design a network of computers that would search the Web more efficiently than those available from traditional manufacturers.

Google no longer needs to pinch pennies. It is a solid member of the Fortune 500 with $9 billion in cash. Still, it is stubbornly sticking to its do-it-yourself approach to technology. Even as it spends more than $1.5 billion this year on operations centers and technology, most of the hundreds of thousands of servers it will deploy are being custom-made based on Google's own eccentric designs.

To be closer to its users and speed response time, it is building a worldwide string of data centers, including a huge site in The Dalles, Ore., with technologies it designed to reduce its ravenous need for electricity. These computers in turn use software developed with advanced tools that Google also designed itself. There are signs that Google is even preparing to create its own custom microchips.

"Google is as much about infrastructure as it is about the search engine," said Martin Reynolds, an analyst with the Gartner Group. "They are building an enormous computing resource on a scale that is almost unimaginable." He said he believed that Google was the world's fourth-largest maker of computer servers, after Dell, Hewlett-Packard and I.B.M.

Google's biggest rivals, Microsoft and Yahoo, certainly write much of their own software, and they work to configure their computers and data centers to their own needs. But they largely buy machines from existing manufactures like Dell, Sun Microsystems and Rackable Systems.

"At some point you have to ask yourself what is your core business," said Kevin Timmons, Yahoo's vice president for operations. "Are you going to design your own router, or are you going to build the world's most popular Web site? It is very difficult to do both."

Google, in fact, has decided it will do both. In many ways, it still has the head of an graduate-school project grafted onto the body of an multinational corporation. The central tenet of its strategy is that its growing cadre of world-class computer scientists can design a network of machines that can store and process more information more efficiently than anyone else.

Mr. Reynolds estimated that Google's computing costs are half those of other large Internet companies and a tenth those of traditional corporate technology users.

Google will not comment on its costs, but it does claim an advantage. "We don't think our competitors can deploy systems cheaper, faster or at scale," Alan Eustace, Google's vice president for research and systems engineering, told analysts in March. "That will give us a two-, three-, five-year lead."

Despite those boasts, some argue that Google's home-brew approach is unnecessary and inefficient, a headstrong indulgence masked for now by the growth and profitability of its advertising business. And Google's rivals say their networks are plenty efficient and powerful.

"Google doesn't have anything magic here," Bill Gates, the Microsoft chairman, said in an interview. "We spend a little bit more per machine. But to do the same tasks, we have less machines."

Google is notoriously secretive about its technology. Yet it also has published papers on some of its developments and been granted patents on others. These, along with the public statements of Google executives and interviews with current and former employees, vendors and other technology executives, paint a picture of a company devoted to pushing the boundaries of modern computer science, and applying those concepts on a vast scale.

"Google took the best ideas from the supercomputer research community and wove them into a working system," said Stephen E. Arnold, a technology consultant to investors and the author of "The Google Legacy" (Infonortics, 2005), a book on Google's technology.

Some of its innovations are designed to wring pennies from its growing spending on technology. Last year, it was granted a patent (06906920) on a "drive-cooling baffle," meant to funnel air into a rack of computers held together with Velcro, a Google design signature.

But some innovations are bolder, like a series of software tools that simplify the way it can divide a problem to be handled by thousands of processors simultaneously, an approach called parallel processing.

One such program, called MapReduce, is based on ideas discussed in computer science literature for decades, according to Urs Hölzle, Google's senior vice president for operations. "What surprised us was how useful it turned out to be in our environment," he said.

MapReduce, he said, "allows Joe Schmo software engineer to process large amounts of data and take advantage of our infrastructure."

Mr. Arnold, the consultant, said these tools created a significant cost advantage. "If you talk to guys who work in massively parallel computing operations, as much as 30 percent of their coding time is spent trying to figure out how to get the thing to run," he said. Google "has figured out how they can reduce a lot of the hassle and work of creating parallel applications."

Mr. Gates acknowledged that MapReduce was a significant technology, but he asserted that Microsoft was building its own parallel processing software, opening another front in the technological war between the two companies.

"They did MapReduce; we have this thing called Driad that's better," Mr. Gates said. "But they'll do one that's better."

Moreover, Google's focus on building general purpose tools and systems is different from that of most companies, which develop systems tailored to specific applications. And it is building these systems rapidly, with the billions of dollars in cash it generates and the thousands of engineers it hires each year. It hopes that it can build a lead that will allow it to create products that do more, for less money, than its rivals.

"If they can get a 30 percent cost advantage, in operating a service on the Internet that is a huge difference," said John M. Lervik, the chief executive of Fast Search & Transfer, a Norwegian search company.

Google's academic approach can be traced not only to its founders' graduate work in computer science, but even to their early home life, Mr. Arnold said, noting that Mr. Page and Mr. Brin had come from families with expertise in computer science and mathematics.

"The stuff they did in 1996 to 1998 was not as immature as it should have been," he said of the Google founders. He said that told him the two men learned a lot "when their parents were talking at the kitchen table."

By the time Mr. Page and Mr. Brin were designing Google, parallel processing was more than an academic dream; it was enabled on a large scale by the low prices of processors, memory and disk drives used to make personal computers. These components were hardly of the highest quality and could be counted on to fail often.

Mr. Page designed the initial Google servers, with the assumption that parts would fail on a regular basis. At first he tried to simplify assembly — and reduce the presumed repair time — by not fastening components to the servers at all but simply laying them on a bed of cork. This proved to be unstable, and so parts were connected with Velcro.

"Nobody builds servers as unreliably as we do," Mr. Hölzle said in a speech last year at CERN, the Swiss particle physics institute. Google is reducing cost while maintaining performance by shifting the burden of reliability from hardware to software — individual hardware components can fail, but software automatically shifts the local task and the data to other machines.

For example, Google designed a software system it calls the Google File System that keeps copies of data in several places so Google does not have to worry when one of its cheap servers fails. This approach also means that it does not have to make regular backup copies of its data as other companies do.

Another system, called the Google Work Queue, allows a big pool of servers to be assigned to various tasks as needed and reassigned to other projects later. This concept, called "virtualization," has become a trend among large data center operators, which also want to reduce the expense of having separate servers dedicated to each system. But most companies buy commercial software to track which computers are doing what, a complex process.

While Google's servers are built on inexpensive parts, the designs it uses have been modified every year or so, to improve their efficiency and increasingly to customize them to Google's applications. The current generation uses the powerful Opteron chip from Advanced Micro Devices, which uses less power than the Intel chips Google had used.

Google is among Advanced Micro's five largest clients, and the largest that does not make computers to resell, according to a semiconductor industry executive with knowledge of Advanced Micro's business.

Google is increasingly doing business with Sun Microsystems as well. Sun, known for systems that are both reliable and expensive, would not seem a natural match for a company that emphasizes economy and self-sufficiency. But Eric E. Schmidt, Google's chief executive, is a former Sun executive, and Sun has developed a new microchip that is especially efficient in electricity use.

Moreover, Google increasingly needs systems that are less likely to fail than those it uses for its search engine in order to handle important information, like e-mail and payments in its new Google Checkout service.

Beyond servers, there are signs that Google is now designing its own microchips. The company has hired many of the engineers responsible for the Digital Equipment Corporation's well-regarded Alpha chip.

"Google's next step is to build high-performance silicon," said Mark Stahlman, an independent technology analyst.

Mr. Hölzle said Google had considered custom semiconductor design, but he declined to say if the company had built any. He said that, in general, Google did not want to build anything from scratch if it could buy something that was just as good.

But he added that Google continued to believe that its approach to designing its own cheap and fast computer networks gave it an edge.

"Having lots of relatively unreliable machines and turning them into a reliable service is a hard problem," Mr. Hölzle said. "That is what we have been doing for a while."

Sales Falter at Advanced Micro
Bloomberg News

Advanced Micro Devices, the second-biggest maker of chips for personal computers, reported preliminary second-quarter sales yesterday that missed the company's forecast after its larger rival Intel cut prices.

Sales for the period that ended Sunday fell 9 percent from the first quarter, to $1.22 billion, Advanced Micro, based in Sunnyvale, Calif., said yesterday in a statement. The company had previously forecast sales to be flat to slightly down from $1.33 billion in the first quarter.

Advanced Micro, which cited lower sales of laptop and desktop chips, is suffering as its larger rival drops prices to try to win back market share, according to John Lau, an analyst at Jefferies & Company in New York.

Advanced Micro pushed Intel's market share in PC microprocessors under 80 percent last year for the first time in four years.

"The pricing war is escalating between Intel and A.M.D.," Mr. Lau said. "Both Intel and A.M.D. will be feeling the same impact."

Last month, executives at Micro-Star International and Gigabyte Technology, two of Taiwan's biggest makers of circuit boards for computers, said Intel officials told them that price cuts of up to 60 percent would start July 23.

Signaling price cuts in advance causes demand to stall, as computer makers put off orders to wait for cheaper components, Mr. Lau said.

Advanced Micro, which will make a full earnings report on July 20, did not give any details of its profit.

Analysts predicted earnings of 28 cents a share on sales of $1.31 billion, according to the average estimate in a Thomson Financial survey.

Share of Advanced Micro fell 7 cents, to $23.83.

Intel, which has scheduled an earnings announcement for July 19, is expected to report its largest decline in profit and sales since 2001.


Bill Goldsmith, laid-back owner/announcer of the perennially cash-strapped Radio Paradise, has launched an experimental stream at the popular internet music station using Octoshape, a commercial P2P media distribution system. Although designed to reduce bandwidth costs and increase scalability, listeners say the digital broadcast "sounds better" too.

BPI Gets Go-Ahead To Sue MP3 Site

The British recording industry has been given permission to sue Russian music website allofmp3.com in the High Court.

Members of the British Phonographic Industry (BPI) want to prove the site, which offers downloads for as little as five pence, is illegal.

They were given the go-ahead to sue the company last week, and say proceedings will be issued in Russia this week.

The operators of allofmp3.com deny the recording industry's claims that their site is not licensed to sell music.

"This is an important step forwards in our battle," said BPI general counsel Roz Groome.

"We have maintained all along that this site is illegal and that the operator of the site is breaking UK law by making sound recordings available to UK-based customers without the permission of copyright owners.

"Now we will have the opportunity to demonstrate in the UK courts the illegality of this site."


Allofmp3.com is the UK's second most popular download site, accounting for 14% of downloads, a survey has said.

The website says it is licensed by the Russian Multimedia and Internet Society (Roms) and the Rightholders Federation for Collective Copyright Management of Works Used Interactively (Fair).

But the International Federation of the Phonographic Industry (IFPI) says the Roms licence is not legitimate and it would not cover consumers in other countries even if it was.

The BPI revealed it intended to take the owners of allofmp3.com to court at a hearing of the Parliamentary Culture Media & Sport Select Committee last month. It is not planning to sue users of the site.

Copyright lawyers say that, even if the BPI obtains a verdict that the website is illegal, it might have "enormous practical difficulties" enforcing the ruling in Moscow.

SBC Sued Over Deleted Screenplay
Declan McCullagh

Police blotter is a weekly CNET News.com report on the intersection of technology and the law.

What: An aspiring writer sues SBC (now AT&T) after a technician installing a DSL link allegedly deleted three screenplays from his computer.

When: A California appeals court ruled on July 5.

Outcome: Screenwriter basically gets no money.

What happened, according to court documents:
When Nicholas Boyd asked SBC to install a digital subscriber line (DSL), he got more than he bargained for.

In December 2000, a technician named James Kassenborg showed up, allegedly said that certain icons and files were not needed--and deleted all of Boyd's scripts and related projects when installing the connection.

Boyd claims he subsequently tried to contact SBC on numerous occasions, but he was repeatedly put on hold, cut off and even laughed at. Eventually, SBC did pay to recover the data and fired Kassenborg, the technician.

The screenplays, by the way, are called "Color of Tulip," "Blood on Ice," and "Blood on Seven Hills," and are about topics including genocide and Italian Prime Minister Benito Mussolini. While pitching studios, Boyd claimed that his screenplays would make "far better" movies than "Gladiator," "Schindler's List" and "Ben Hur."

Boyd has never made a cent from selling a screenplay. But he did get a nibble from a freelance producer for Berlin-based Aurora Media, which made "An American Werewolf in Paris" and who testified he talked about paying Boyd $2.7 million for the three scripts and related productions. That apparently relied on securing financing from German fund managers, though, and was anything but a done deal.

SBC agreed to pay for a computer consultancy called Burgess Forensics to examine Boyd's hard drive.

It was able to recover only part of one screenplay. Burgess Forensics said the reason was that 4,134 files were saved to the hard drive after the screenplays were deleted--overwriting the unused space that could have otherwise been recovered. (Additions included Napster and RealPlayer and their related media files.)

SBC's attorneys claimed that Boyd's troubles were caused in part by his own negligence. They noted, for instance, that he backed up "Color of Tulip" on a floppy disk but not the other draft screenplays, and continued to use the computer after files were deleted.

The jury apparently didn't believe the German witness' testimony that a $2.7 million deal was in the works. Jurors found that Boyd could recover out-of-pocket damages of only $60,000 and said that he was responsible for 55 percent of the fault resulting in the deletion of the screenplays. The jury awarded Boyd $27,000 in compensatory damages and $33,000 in punitive damages.

Both SBC and Boyd appealed. The California state appeals court (second district) eliminated the punitive damages, upheld the compensatory damages--but said Boyd must pay for SBC's legal fees for the appeal, which could easily be in the range of his $27,000 compensatory damages award.

The bottom line? Boyd failed to hit the jackpot, and probably lost quite a bit of money after having to pay his own lawyer fees.

Excerpt from the court's opinion:

Boyd moved for a new trial on the issue of damages and punitive damages or, in the alternative, for additur to the damages and punitive damages. He argued that the evidence was insufficient to justify such low compensatory and punitive damages awards, and that it was error for the trial court to deny the motion to reopen the case...

As to Boyd's motion, the trial court stated: "Although Boyd produced evidence of a contract in the millions-of-dollars range through the testimony of various witnesses, the jury was free to, and obviously did, find the evidence not credible. There was evidence presented by (SBC) from which the jury could have so concluded, apart from the demeanor evidence of Boyd's witnesses (and their equivocations regarding the details of the 'contract').

The jury was also convinced that Boyd himself was negligent in not backing up or otherwise protecting his screenplays, finding him 55 percent contributorily at fault for deletion of the screenplays. The compensatory damage award of $60,000 was fully supported by the evidence...

First, Boyd contends that we must accept all the evidence that Kassenborg was acting in the scope of his employment with (SBC) when the incident occurred, (SBC) was negligent, (SBC)'s negligence caused Boyd harm, Boyd sustained damages, and Boyd and a movie producer had an economic relationship that probably would have resulted in an economic benefit to Boyd.

Second, Boyd contends: There was undisputed evidence that he entered into the agreement for $2.7 million...Syd Field, Boyd's film industry expert, testified that the agreement was reasonable. The minimum range of compensation for a single project, at least according to Gale, (SBC)'s film industry expert, was $60,000. Based on these facts, a damage assessment of $60,000 is clearly not supported by the evidence...

Instead of providing a fair statement of the facts and a discussion of all the evidence, Boyd's appellate briefs focuses only on the evidence he deems favorable to his position. He omitted any reference in his briefs to the necessity of getting approvals from the fund managers and the completion bond company in order to secure funding, the January 2001 e-mail (the wording of which suggested that the parties had not agreed to a contract), and his equivocations on the stand about the meaning of the January 2001 e-mail. One-sided record citations are at cross-purposes with the appellate process, which has justice as its utmost aim and strives for fairness and efficiency...

The finding of $60,000 in damages fell within the reasonable range permitted by the evidence. It is inferable that the jury found that Boyd did not have a contract with Aurora Media, but decided that Boyd should be compensated for the money he spent researching and preparing his projects. In other words, the jury assessed damages for out of pocket losses (the first measure of damages in the jury instructions), but not lost profits (the second measure of damages in the jury instructions)...

The punitive damages are reversed. In all other respects, the judgment is affirmed. (SBC) shall recover its costs on appeal.

Use Red Swoosh to Serve Files For Free
Michael Arrington

Silicon Valley based Red Swoosh is launching a free, ad supported version of its file serving technology today.

Prior to today Red Swoosh was available to paying customers only, who use their bittorent-like technology to quickly transfer files using peer to peer technology. The result is significantly faster file downloads for users, with near-zero bandwidth stress on the file distributor.

The new product makes Red Swoosh available for free. Every fifth download request is shown an interstitial advertisement before the download begins. Customers can bypass the ads to their users by paying for the service.

Using Red Swoosh is extremely simple. As a content provider, you do not need to sign up for an account. All you have to do is add “http://edn.redswoosh.net” to the front of any URL and place that link on your website. If you choose to create an account, Red Swoosh will provide reporting to you on download statistics, and in the future will share revenue from advertising. This last bit is important.

There are some limitations to Red Swoosh. Users must install a client to facilitate the download. This is only required once - subsequent downloads from any Red Swoosh customer will then work. There is no client available for the Mac platorm yet, though. Red Swoosh promises it later this year. Until then, Mac users can still download the file directly from a server without using the P2P technology.

Red Swoosh was founded in 2001 and went through some troubled years during the crash. They recapitalized the company last year and raised an additional $1.7 million from Mark Cuban. They are currently in the middle of raising another round, which CEO Travis Kalanick tells me will be in the $5-8 million range.

On a side note, Red Swoosh was in the process of changing offices earlier this year and took the opportunity to “offshore itself” temporarily - they moved the six person company to Krabi, Thailand for a month while they built the new product (kudos to Mark Cuban for green-lighting this). See Travis’ blog posts on the project here and here. From what Travis tells me, it was an awesome experience and the team was more productive than they were back here in Silicon Valley.

Project Gutenberg’s 1/3 Million eBooks Free from July 4 Through August 4
Press Release

1/3 of a million books, or 10 times the number found in the average public library, will be available for free downloading via the Internet and World Wide Web beginning July 4, as Project Gutenberg and the World eBook Library act on their dreams of increased world literacy and education.

Such a collection, if printed out in standard format would be large enough to outweigh elephant herds and to cover the sidelines at all 40 Super Bowl games.

Each year for one month, The World eBook Library and Project Gutenberg will team up to be major sponsors, planning to make ONE MILLION eBooks available in the World eBook Fair of 2009.

"It has been our goal since the dawn of the Internet to break down the bars of ignorance and illiteracy," says Michael Hart, who founded the Project Gutenberg effort by placing the first permanent text online on July 4, 1971, 35 years ago. "Our projects are based on the premise that everyone in the world could have access to a free worldwide public library," for John Guagliardo, founder of The World eBook Library, this event marks the fruition of years of hard labor.

Over 100 languages will be represented for worldwide readers and that total is expected to increase, even as the preparations are underway. The books are the permanent property of whomever downloads them, but a warning is including to check your local copyrights, as the books are provided under U.S. copyright laws, and other nations have different copyrights. eBooks still under U.S. copyright have been donated via the permission of the copyright holders.

Project Gutenberg, perhaps the oldest Internet site, and The World eBook Library, perhaps the largest one of the growing number of eBook libraries, joined for the purpose of "bringing the most eBooks to the most people in the world."

"This is the fulfillment of a lifetime of dreams," a sentiment shared by Greg Newby, as Project Gutenberg CEO, he hopes his Library & Information Science PhD. will become the last of the olde library worlde, and perhaps the first of a new world of library science.

"We can only hope that Google, Yahoo, and the others can also achieve their goals in the next few years-- as we hope they will each reach for a million eBooks before the decade ends. Our own goals, with them or without them, are to bring the world the 1/3 million eBooks this year, 1/2 million next year, 3/4 million in 2008, and to reach a grand total of a one million volume World eBook Fair on July 4, 2009."


Additional facts and figures:

Proposed World eBook Fair totals for upcoming years:

July 4, 2006, 1/3 Million
July 4, 2007, 1/2 Million
July 4, 2008, 3/4 Million
July 4, 2009, ONE Million


By 2009, the terabyte [one thousand gigabytes] boxes we have seen enter the consumer marketplace in 2006, now priced as low as $500, will be commonplace on an average computer on the shelf and will easily hold a million volumes of a million characters each for the price of just one semester's books at a university.

Thanks Albed!

Make Way For The Terabyte Laptop Drive
Chris Mellor

Seagate Technology Inc. plans to increase disk capacity by 10 times with new technology it has just patented, meaning a computer hard drive could soon be storing as much as a terabyte of data.

The Heat-Assisted Magnetic Recording (HAMR) technology created by Seagate includes nanotube-based lubrication to allow the read/write head of a disk to get closer to the surface and store more information.

The smaller the data-recording areas on a disk surface, the more of them that can be packed together, and subsequently the greater the capacity of the disk, Seagate said. But reading and writing ever-smaller bits means that the read/write head has to come closer to the disk surface, requiring a tough lubricant layer on the surface.

Storing data properly in extremely small areas requires the magnetic material to be heated during the writing phase, but this causes the lubricant film deposited on top of the magnetized recording layer to evaporate.

Seagate's patent resolves this problem by having a reservoir inside the disk casing that contains nanotube-based lubricant. Some of this is periodically pumped out as a vapor and deposited on the surface of the disk, replenishing the evaporated lubricant. The vapor deposition process is similar to that used in the production of CDs and DVDs.

Seagate anticipates that the new technology could increase disk capacity by a factor of 10, making possible a 600GB 1.8-in. drive, a 1.46TB 2.5-in. drive, and 7.5TB Barracuda 3.5-in. drive. The lubricant reservoirs will be built to last the life of the disk.

Seagate has not given a date by which the technology will appear in products.
http://www.computerworld.com/action/...e =rss_news50

Legal Victory For Google In Library Project
Richard Wray

Google has won a crucial victory in a German court as it tries to persuade publishers that its drive to digitise library books to get at the information inside is not an attempt to smash copyright laws.

Scientific publisher Wissenschaftliche Buchgesellschaft (WBG), backed by the German publishers association, had asked a Hamburg court for an injunction stopping the American web giant from scanning its books as part of its library project.

Google is working with six libraries five in the US and the Bodleian in Oxford to digitise library books and place their contents in its search engine. While books that are out of copyright are fully searchable, if a search request brings back information from a book under copyright, access is restricted.

Users in the US, which has a "fair use" approach to copyright meaning that bibliographic data plus a few short sentences or "snippets" can be viewed will be able to see more of a copyrighted book than European users, who usually get no more than the title of the book and its author.

But in order to compile the index it uses for its search engine, Google has to scan the entire book, which publishers claim infringes the book's copyright. As a result, several US publishers are challenging the legality of Google Book Search.

The status of copyrighted material is made more complex because Google maintains that the country in which it copies a book rather than the country of that book's publisher dictates the copyright laws under which it can deal with its subject matter.

As a result Google maintains that books it scans from US libraries on US soil are subject to US copyright even though the publisher may be based in another country. It has much stricter rules on what information can be seen from within copyrighted books digitised as part of its contract with the Bodleian.

Google argued before the Hamburg court that the display of short snippets from in-copyright books does not infringe German copyright law. The copyright chamber of the regional court of Hamburg indicated though it did not rule specifically that it agreed by telling WBG that its petition for an injunction was unlikely to succeed. The court rejected WBG's argument that the scanning of its books in the US infringes German copyright law.

Following the court ruling on Wednesday, Google said it recognised the importance of copyright law "because we believe that authors and publishers deserve to be rewarded for their creative endeavour".

The company is working with several thousand publishers on a separate part of Google Book Search. Google digitises parts of books for publishers, makes them searchable and ensures it is easy for Google users to buy them.

The Internet Knows What You'll Do Next
David Leonhardt

A FEW years back, a technology writer named John Battelle began talking about how the Internet had made it possible to predict the future. When people went to the home page of Google or Yahoo and entered a few words into a search engine, what they were really doing, he realized, was announcing their intentions.

They typed in "Alaskan cruise" because they were thinking about taking one or "baby names" because they were planning on needing one. If somebody were to add up all this information, it would produce a pretty good notion of where the world was headed, of what was about to get hot and what was going out of style.

Mr. Battelle, a founder of Wired magazine and the Industry Standard, wasn't the first person to figure this out. But he did find a way to describe the digital crystal ball better than anyone else had. He called it "the database of intentions."

The collective history of Web searches, he wrote on his blog in late 2003, was "a place holder for the intentions of humankind — a massive database of desires, needs, wants, and likes that can be discovered, subpoenaed, archived, tracked, and exploited to all sorts of ends."

"Such a beast has never before existed in the history of culture, but is almost guaranteed to grow exponentially from this day forward," he wrote. It was a nice idea, but for most of us it was just an abstraction. The search companies did offer glimpses into the data with bare-bones (and sanitized) rankings of the most popular search terms, and Yahoo sold more detailed information to advertisers who wanted to do a better job of selling their products online. But there was no way for most people to dig into the data themselves.

A few weeks ago, Google took a big step toward changing this — toward making the database of intentions visible to the world — by creating a product called Google Trends. It allows you to check the relative popularity of any search term, to look at how it has changed over the last couple years and to see the cities where the term is most popular. And it's totally addictive.

YOU can see, for example, that the volume of Google searches would have done an excellent job predicting this year's "American Idol," with Taylor Hicks (the champion) being searched more often than Katharine McPhee (second place), who in turn was searched more often than Elliot Yamin (third place). Then you can compare Hillary Clinton and Al Gore and discover that she was more popular than he for almost all of the last two years, until he surged past her in April and stayed there.

Thanks to Google Trends, the mayor of Elmhurst, Ill., a Chicago suburb, has had to explain why his city devotes more of its Web searches to "sex" than any other in the United States (because it doesn't have strip clubs or pornography shops, he gamely told The Chicago Sun-Times). On Mr. Battelle's blog, somebody claiming to own an apparel store posted a message saying that it was stocking less Von Dutch clothing and more Ed Hardy because of recent search trends.(A disclosure: The New York Times Company owns a stake in Mr. Battelle's latest Internet company, Federated Media Publishing.)

It's the connection to marketing that turns the database of intentions from a curiosity into a real economic phenomenon. For now, Google Trends is still a blunt tool. It shows only graphs, not actual numbers, and its data is always about a month out of date. The company will never fully pull back the curtain, I'm sure, because the data is a valuable competitive tool that helps Google decide which online ads should appear at the top of your computer screen, among other things. .

But Google does plan to keep adding to Trends, and other companies will probably come up with their own versions as well. Already, more than a million analyses are being done some days on Google Trends, said Marissa Mayer, the vice president for search at Google.

When these tools get good enough, you can see how the business of marketing may start to change. As soon as a company begins an advertising campaign, it will be able to get feedback from an enormous online focus group and then tweak its message accordingly.

I've found Pepsi's recent Super Bowl commercials — the ones centered around P. Diddy — to be nearly devoid of wit, but that just shows you how good my marketing instincts are. As it turns out, the only recent times that Pepsi has been a more popular search term in this country than Coke have been right after a Super Bowl. This year's well-reviewed Burger King paean to Busby Berkeley, on the other hand, barely moved the needle inside the database of intentions.

Hal R. Varian, an economist at the University of California, Berkeley, who advises Google, predicts that online metrics like this one have put Madison Avenue on the verge of a quantitative revolution, similar to the one Wall Street went through in the 1970's when it began parsing market data much more finely. "People have hunches, people have prejudices, people have ideas," said Mr. Varian, who also writes for this newspaper about once a month. "Once you have data, you can test them out and make informed decisions going forward."

There are certainly limitations to this kind of analysis. It's most telling for products that are bought, or at least researched, online, a category that does not include Coke, Pepsi or Whoppers. And even with clothing or cars, interest doesn't always translate into sales. But there is no such thing as a perfect yardstick in marketing, and the database of intentions clearly offers something new.

In the 19th century, a government engineer whose work became the seed of I.B.M. designed a punch-card machine that allowed for a mechanically run Census, which eventually told companies who their customers were. The 20th century brought public opinion polls that showed what those customers were thinking. This century's great technology can give companies, and anyone else, a window into what people are actually doing, in real time or even ahead of time.

You might find that a little creepy, but I bet that you'll also check it out sometime.

An Internet Lifeline for Troops in Iraq and Loved Ones at Home
Lizette Alvarez

With mortar shells exploding near him sometimes twice a day in Ramadi, Iraq, Sgt. Mark Grelak found a way to shut out the heat, the noise, and all the demands of his job — sweeping the local highway for bombs left by insurgents. In a tiny space in his barracks, he would flip open his laptop, adjust his Web camera and watch his daughter Katie take her first halting steps.

From 6,000 miles away, Sergeant Grelak, 35, drew flowers with Sara, Katie's older sister, and witnessed, almost in real time, her first day of preschool. The soldier and his wife, Jennifer, 26, even bought a house in Baltimore together, e-mailing pictures and appraisals back and forth. Through instant messaging, they discussed the new landscaping and camping equipment as if they were sitting just across the kitchen table from each other.

"Do you care if I take out the crape myrtle?" Ms. Grelak messaged him in March.

"Why not leave it for now," her husband suggested.

Later, she messaged, "If you have some time, take a look on eBay for a tent. I'd like to go camping this year."

Military deployments have a way of chewing up marriages, turning daily life upside down and making strangers out of husbands and wives. But for this generation of soldiers, the Internet, which is now widely available on bases, has softened the blow of long separations, helping loved ones stay in daily touch and keeping service members informed of family decisions — important and mundane.

Most soldiers deploy with a laptop in hand and a hookup to the Internet in their barracks. Others, particularly those with young children, pay for Web cameras, a trend that began in earnest two years ago.

Mental health experts and military commanders say that the tens of millions of dollars spent on technology in Iraq for Internet cafes, computers and Web cameras have helped ease the isolation of soldiers' lives, as well as the turbulence of coming home, an often-bumpy transition from combat to kiddie pool and from commanding to compromising.

"It's rejuvenating," said Sergeant Grelak, an Army National Guard soldier who was gone for 18 months and is now at Fort Benning, Ga., awaiting his release from active duty. "It keeps you from getting detached from the person you left behind. You go outside, and you run the risk of getting shot and blown up. That changes people. If I didn't have that connection, I would feel like a stranger."

Those who benefit most are often families with young children, said Jaine Darwin, a psychologist and the co-director of Strategic Outreach to Families of All Reservists, based in Cambridge, Mass., which counsels reservists and families. "They make families much more connected to the soldiers. A voice is not the same as seeing a person," Ms. Darwin said.

Military spouses were once left to make all child-rearing, household and work decisions by themselves for months at a time; telephone calls were simply too brief, unpredictable and expensive. Now the burden is a little less lopsided and an answer is only a few hours away.

The constant communication makes for fewer unpleasant surprises after couples reunite, though there can be a downside: It brings the anxieties of the living room into the war. "Who wants to hear that your daughter got a tattoo?" Ms. Darwin asked. "Any piece of news that makes you preoccupied is not good for you in a war zone."

Sergeant Grelak, for example, became alarmed when he learned that Katie had an ear infection. "I had to be a shoulder for Jennifer," he said, but, he added, "I was 110 percent concentrating."

Ms. Darwin pointed out that soldiers, for their part, can have too much Web access between missions "and it's quite disruptive to a family," she said. "It poses a hard conflict between the wish to get every moment they can with their soldier and the need for life to go on. Talking to your soldier can become a full-time job."

Internet cafes with computers began to spring up at military camps during the crisis in the Balkans in the 1990's, but mostly in fits and starts. Since then the military and private organizations like the Freedom Calls Foundation have spent millions of dollars to wire camps in Iraqi war zones. The Defense Department alone has spent more than $165 million in the past two years to set up cybercafes in Iraq. In 2004, they began with 36 cafes, and now there are more than 170. The use of satellites has made the job considerably easier. Freedom Calls, which raises private funds to build satellite links and provide communications hardware for soldiers in Iraq, has enabled 30,000 service members in four camps to reach relatives free in the past two years, setting up live teleconferencing to broadcast the births of babies, birthday parties, weddings and graduations. About 1,000 families in the United States have been equipped with screens in their homes.

"A person can now keep his commitment to his family and keep his commitment to his country," said John Harlow, the executive director of Freedom Calls.

Specialist Kevin Groll, of the Michigan National Guard, took a virtual seat at the Thanksgiving Day children's table last year, a Groll family tradition. The family Web camera was positioned right next to the children's table. "Boy, you did it again," Specialist Groll joked with his mother, Vicki Groll. "I'm not even near the kiddies, and I still had to sit at the table. The kids just loved it."

While the divorce rate for returning soldiers remains relatively high, a testament to the difficulties of war and the number of pre-deployment leaps to the altar, commanders agree that the Internet has helped morale considerably. Yet such easy access to families also poses problems in terms of controlling the release of classified information. Service members are not allowed to discuss where they are going, what they are carrying, how they will get there or how long they will stay, for example. All communications on a base are typically shut down after a casualty or injury is reported until family members can be contacted, which can take anywhere from a few hours to two days.

Web logs relating to official duties must be registered with a service member's chain of command, but personal Web pages set up by people back home can run into trouble.

One mother, Robin Vaughan, whose son was a military policeman in Iraq and who created a Web site for people who wanted support and information about the unit, said soldiers and their relatives were told not to view her site because it was not an official, registered site.

But monitoring all calls, e-mails and Internet traffic is impossible, so to a large degree, the military relies on self-censorship. "It's a big challenge," said Maj. Sean Wilson, a public affairs officer at Fort Drum, N.Y.

"Soldiers are naturally proud of what they do. They want to tell somebody about it."

Juggling home and battle can prove stressful. The immediacy of the Internet allows little time for reflection, and rather than let a bad mood pass, a spouse may rush to the computer and rant, which is not always wise, Ms. Darwin said.

Rumors, too, can run rampant, even those about infidelity, she added. And not hearing from someone can be painful and frightening, on both sides of the divide, particularly when daily e-mail contact has been the rule, the families said. Breakups via the Internet do occur, in a contemporary equivalent of the Dear John letter.

Sherri Cropper, 30, said she e-mailed her husband, Sgt. William Cropper, in Iraq every day. It was her way of making sure he was all right. But it also helped her to cope with the demands of what seems the equivalent of single motherhood, and to express how she was changing, becoming more independent. "It did ease the transition a lot," said Mrs. Cropper, who lives at Fort Drum. "It wasn't bam, in your face, there are a thousand things that went on and I will sit here in the next two days and talk you to death."

The happiness of a reunion tends to wear off quickly, she said. "Then, it's, 'O.K., you missed nine months of baby-sitting and I'm out of here,' " Mrs. Cropper added. "I think this gives the person who is deployed a good grasp or perspective on how it will be when you get back."

Dixie Clark of Harrisburg, Pa., said she was lucky to get a quick phone call once a month from her husband in the 1980's when he was a marine.

Recently she had three family members to fret over. Her two oldest sons and her husband, all Army National Guardsmen, were all deployed to Iraq at the same time, posted to the same base.

This time around, she routinely watched her "three guys" on a Web camera. Once when a mortar shell hit the camp, Mrs. Clark e-mailed one son and demanded that all three appear in front of the camera to assure her that they were fine.

"My son comes running into the barracks saying, 'Mom is on the Internet and she wants us to get up there; she has to see everybody,' " Sgt. First Class James Clark Sr. recalled. "I didn't even know he had a Webcam set up at that time. We all huddled up and said, 'Here we are.' "

Every day, Mrs. Clark and her husband sat down for a 90-minute round of instant messaging, which cost a pittance compared with telephone calls.

They planned the renewal of their wedding vows together online. He chose the menu — chicken, roast turkey and broccoli and cheese. And when things went wrong with the house, she knew that an answer was a few hours away. "Honey, where is the furnace?" she messaged him. "I ran out of oil."

Colin Moynihan contributed reporting for this article.

Microsoft Is Looking for More Elbow Room
Kristina Shevory

In the midst of its biggest expansion in nearly a decade, the world's largest software company has suddenly found itself with a major setback: not enough room to grow.

Microsoft — in the midst of a bitter rivalry with Google and Yahoo — snapped into action this April, saying the company would spend about $2 billion on new technologies to reinvigorate itself. Then last month, Microsoft's chairman and co-founder, Bill Gates, announced that he would leave his day-to-day role at the company in two years.

Easier said than done, at least when you consider that the company, which houses more than 30,000 people on its sprawling campus in Redmond, Wash., suddenly will have to make room for up to 12,000 new bodies. It will spend $1 billion to expand that campus by more than a third, or 3.1 million square feet, over the next three years. That includes new leases and the purchase and construction of 14 buildings. For a modest-size real estate market like Seattle, those are staggering numbers.

"The Redmond you'll see even in a year will make your eyes pop," said Lou Gellos, a Microsoft spokesman. "It's going to be a very different campus."

Microsoft is expanding beyond the boundaries of its current site, adding two buildings in a downtown Redmond shopping mall for a total of three, and consolidating its North American sales headquarters staff in a new skyscraper under construction in nearby Bellevue, Wash. By next summer, Microsoft will take over 15 of the 28 floors, or 320,000 square feet, in the office tower.

"They're pretty much leasing up all the vacant office space in Redmond," said Rob Odle, director of planning and community development for the city of Redmond.

Microsoft had planned to add 2.1 million square feet over 15 to 20 years, but overcrowding at its headquarters and a heated battle with Google and Yahoo forced the company to step up the pace.

The move comes none too soon. The latest version of the Windows operating system, Vista, has been hit with delays and will not reach store shelves until January. The update of Office business software, which was to be released this year, will not be out until January. Google has started making inroads in office applications, one of Microsoft's core businesses, with its release of spreadsheet and word processing software. Google, the search giant, has also overtaken Microsoft in online searches and accounted for 49 percent of them in May, versus 10.6 percent for Microsoft, according to Nielsen/NetRatings, a New York market research firm.

"They see themselves as somewhat beleaguered, and that's been their pattern since the beginning," said Rob Helm, director of research at Directions on Microsoft, a research firm in Kirkland, Wash., that tracks only Microsoft. "There's always been a bogeyman driving significant parts of their business strategy."

Microsoft's increased spending should be a boon for the Seattle area, where unemployment has stubbornly floated from 4 percent to 5 percent for well over a year. The company plans to hire 4,000 to 5,000 new employees this year, more than half of whom will be located in the United States. (Microsoft would not say how many people it expects to hire in Redmond.) For every new technology-related job, nearly four new jobs — mostly in the service sector — are created in Washington State, according to the Technology Alliance, a state trade group based in Seattle.

"The real reason you want these jobs is for the multiplier effect," said Bill McSherry, director of economic development at the Puget Sound Regional Council in Seattle.

But some local residents do not applaud Microsoft's expansion. For them, it means increased traffic, higher home prices and crowded parks. Roads are clogged and median housing prices on the Eastside, the area east of Lake Washington where Redmond is located, have soared 17 percent, to $484,500, in May from a year ago.

"There are two times a day when people come and go to Microsoft that traffic is so bad you have to stay home," said Jack Bittner, 59, a resident of the Grasslawn neighborhood, which is next to Microsoft. "It's almost gridlock now."

Mr. Bittner and his wife have even considered selling his house, which they bought for $86,000 in 1987, and moving to Bellingham, a city north of Seattle. He expects he could get around $600,000 for his four-bedroom ranch.

Transportation has become the largest issue for the growing region. And for its part, Microsoft has vowed to spend $35 million on transportation improvements in Redmond, including an overpass over Route 520 near its campus, sewer upgrades and turn lanes on nearby roads.

But even a sizable cash infusion would merely be a temporary solution to a problem that has been steadily worsening for years. The area's roads and bridges, some of which are earthquake hazards, already struggle to handle the company's 30,000 employees. The Route 520 bridge, which crosses Lake Washington and connects Seattle to Redmond, was built in 1963 to handle 15,000 vehicles a day. Now, 115,000 vehicles cross it daily. Increased traffic, windstorms, earthquakes and boating and traffic accidents have further shortened the bridge's life and required extensive repairs. State officials worry a strong windstorm or earthquake could damage the bridge beyond repair.

"The economic impacts would be catastrophic," said John Milton, SR-520 project director with Washington's state transportation department. "It's the feeder for two of the major employment centers in the area."

Privately, Microsoft officials bristle at the notion that the transportation burden is theirs. But Microsoft's size makes it a convenient target for complaint among Redmond residents.

"Almost immediately after Microsoft began expanding in the late 1990's, the traffic in our neighborhood just went nuts," Mr. Bittner said. "That makes me not too excited about this expansion."

Europe's Antitrust Regulators Vote To Fine Microsoft
Jeremy Reimer

Antitrust regulators from the European Union's 25 member nations have voted unanimously against Microsoft, finding the software giant guilty of non-compliance with the EU's 2004 ruling. The decision opens the door for the EU to levy daily fines of up to €2 million (US$2.5 million) on Microsoft. The exact amount of the fine will be decided at another meeting to be held next week.

The debate centers on the EU's interpretation of Microsoft's compliance with an earlier judgement handed down in 2004. In that hearing, Microsoft was charged with unfair bundling and anticompetitive behavior, and was told to do three things: pay a fine, release a version of Windows without Media Player bundled, and disclose information about their server products to enable competitors to more easily write software that can interact with them. Microsoft paid the fine, delivered Windows XP N—with the N apparently standing for the version of Windows Nobody wanted to buy—and delivered large stacks of technical documents covering Windows Server protocols.

It was this last deliverable that the EU had problems with. A monitoring trustee, British professor Neil Barrett, was appointed to judge the information released by Microsoft, and his initial response was that the documentation was inadequate. Microsoft replied by offering to license parts of the source code itself, but that effort was dismissed by the EU regulators.

For its part, Microsoft claims to be working hard to deliver the information the EU desires. "Microsoft is dedicating massive resources to meet the aggressive schedule and high-quality standards set by the trustee and the commission in this process," a Microsoft employee said in a statement. "Our engineers are working around the clock to meet the seventh and final delivery date for this project scheduled for July 18."

Clearly the prospect of more fines and continued antitrust action is a concern for Microsoft, as much for their public image as for their bank balance. Given this, one wonders what the exact reasons are for the EU's dissatisfaction with Microsoft's documentation. A cynical answer might be that the EU simply wants to keep the Microsoft money train flowing. Looking at things from a different angle, perhaps Microsoft wants to make sure that while it may become possible for third parties to build replacements for Microsoft's server software, the documentation should not make it easy. The issue is made more difficult by the EU's failure to make it clear exactly what type of information they are looking for.

The EU is not the only governing body to issue fines and judgements against Microsoft. South Korea fined the software giant US$35 million for similar antitrust issues, although without the request to provide additional documentation. Microsoft has agreed to pay this fine. Back in the US, Microsoft recently agreed to extend federal oversight over their 2002 antitrust ruling until at least 2009, and the company has decided to "rewrite significant portions of the documentation in an effort to substantially improve the overall quality of the documentation."

Authors Take a New Approach to Audio Books: Do It Yourself
Motoko Rich

When "Ballad of the Whiskey Robber," a madcap chronicle of a Hungarian hockey goalkeeper turned bank robber, was published two years ago, it was praised by numerous critics and became a finalist for an award given by the Mystery Writers Association of America. It attracted fans including the novelist Gary Shteyngart and the actor and artist Eric Bogosian.

But none of that seemed to matter when Julian Rubinstein, the book's author, approached his publisher, Little, Brown & Company, about doing an audio book. While growing in popularity, audio books remain resolutely mass-market-oriented, and Mr. Rubinstein's nonfiction book, which sold fewer than 15,000 hardcover copies, simply had not generated enough revenue to justify the costs of producing a recorded version.

For many authors that would have been that. Mr. Rubinstein, however, was unbowed. He enlisted the help of a friend and sound-studio operator, Joe Mendelson, and managed to recruit a cast of some of his well-known fans, including Messrs. Shteyngart and Bogosian, as well as the rocker Tommy Ramone and the comedian Demetri Martin, to perform as characters in the book. (MP3 clip.)

Everyone donated time, and Mr. Mendelson did all the editing free. So when Mr. Rubinstein went back to Hachette Audio, the division that produces audio books for Little, Brown, the company agreed to release a digital-download-only version — its first — of "Ballad." Late last month online retailers, including iTunes and Audible.com, began offering the 11½-hour download, along with a video clip of the real-life protagonist of the book, Attila Ambrus, reading an introduction from prison.

Mr. Rubinstein is one of a handful of authors taking a pro-active role in developing audio versions of their books. Thinking this medium could attract new readers, they are trying to create more than a straightforward spoken version of their work.

"I just think that this audio book is a lot more lively than most," said Mr. Rubinstein, who added that he has listened to only one or two books in this form. "If I knew of other audio books that were like this, I would be much more into it," he said.

The same impulse drove Greg Palast, an investigative journalist and author of "The Best Democracy Money Can Buy" and "Armed Madhouse: Who's Afraid of Osama Wolf?, China Floats, Bush Sinks, the Scheme to Steal '08, No Child's Behind Left, and Other Dispatches From the Front Lines of the Class War" (E. P. Dutton), which in hardcover will be No. 11 on the New York Times nonfiction hardcover best-seller list on Sunday. For the audio version Mr. Palast has assembled a cast including the comedian and actress Janeane Garofalo, the television veteran Ed Asner and the punk rocker Jello Biafra, whose voices are heard in between Mr. Palast's narration.

Sarah Vowell, a contributing editor on public radio's "This American Life" program, recruited a group that included the novelist Stephen King, the actress Catherine Keener and the host of "The Daily Show", Jon Stewart, to read for the audio book of "Assassination Vacation," produced by Simon & Schuster Audio last year. (MP3 clip.)

"I wanted to think about making it a little more show biz," Ms. Vowell said. "I wouldn't necessarily use the word dulcet to describe my voice all the time, so I wanted other readers to break it up."

The vast majority of audio books — which themselves represent less than 10 percent of all books published — are read by single narrators, either the authors themselves or unknown performers recruited by the publisher. On occasion, celebrities read a book, but generally, said Chris Lynch, publisher of Simon & Schuster Audio, they are difficult to attract, given typical pay rates of $4,000 to $6,000 for a six-hour audio book.

Those authors with boldface connections can spice up the audio versions of their books. Adriana Trigiani, the author of popular novels about Italian-Americans, asked Mario Cantone, a comedian and regular on "Sex and the City," to read the audio version of "Rococo," produced by Random House Audio last year. Ms. Trigiani, who knew Mr. Cantone from their days on the comedy circuit together, said Mr. Cantone had partly inspired the lead character in "Rococo," a New Jersey interior designer named Bartolomeo di Crespi.

Mr. Cantone even joined Ms. Trigiani for a few readings on her book tour. But he said he would not want to record another audio book, unless it was the sequel to "Rococo." "It's a lot of work," he said, "for that kind of money."

Indeed, those celebrities who perform on audio books see it mainly as a way to express their support for a friend or favorite author. Jello Biafra, the former lead singer of the Dead Kennedys, said he agreed to read the part of Osama bin Laden on Mr. Palast's "Armed Madhouse" because he wanted to help Mr. Palast get out his muckraking message about the Bush administration. (MP3 clip.)

Jello Biafra spent less than an hour in the studio. "I gave them different flavors of bin Laden," he said. "I cut the lines of a wicked cartoon villain, Snidely Whiplash-style, with a lot of ya ha ha ha has. Then I did it straight in my own voice, and then I did it in something akin to bin Laden's voice from what I've heard of his videos. I believe they chose the one closest to bin Laden's voice."

Mr. Shteyngart, author of "The Russian Debutante's Handbook" and "Absurdistan," had given Mr. Rubinstein a blurb for the hardcover edition of "Ballad of the Whiskey Robber," and so was game to play a few characters on the audio book. But Mr. Shtenygart said he had nothing to do with the forthcoming audio versions of his own novels. "I'm not really a big audio fan," he said. "My iPod has cobwebs on it."

Using multiple voices on an audio book can add extra costs to the typical $15,000 to $20,000 production price tag, given extra studio time and editing costs. Mr. Palast said he had actually paid about $2,000 of his own money to book studio time.

For audio book publishers accustomed to single voices, the addition of a large cast can be daunting. With his first audio book, "The Best Democracy Money Can Buy," Mr. Palast said his producers at Penguin Audio resisted the idea of multiple readers.

"They were absolutely obstructive," Mr. Palast said. "Penguin just wanted me to read the whole book" by himself. Penguin representatives did not return calls seeking comment.

Audio books with large casts are likely to remain relatively rare. In most cases "we probably wouldn't do more than two readers, because of the cost," said Karen Cera, digital audio director of Hachette Audio. The company decided to do a digital-only version of "Ballad" because it could not justify the $3-apiece cost of producing CD's.

But with improvements in home recording tools, some more entrepreneurial authors may decide to record their own works. "The truth is, if you have a Mac at home and the software that comes with it, it doesn't cost much more for you to have a decent little recording set up," said Geoff Shandler, editor in chief of Little, Brown.

Whether celebrity readers actually drive sales is difficult to measure. Audio books tend to sell about 10 percent of what is sold in hardcover, publishers say.

Ms. Garofolo, who read the part of a Republican party spokeswoman on "Armed Madhouse," said she did it to support Mr. Palast's journalistic activism. But, she said, "I don't know that if I as a consumer would be motivated by who was reading the book."

'Stone' Renders a Vermont City's Origins in Grit and Granite
Katie Zezima

The men and their families came to Vermont from Canada, Scotland, Italy, Spain and Ireland at the turn of the last century for one reason: to work in the granite quarries.

Some blasted out rock from beneath the Green Mountains, while others meticulously shaped the white slabs into works of art. They also transformed Barre, a once-sleepy central Vermont town, into a bustling, blue-collar melting pot where pride in the declining industry, and an ability to spot bad granite, still run deep.

Now the words of the men and women who were lured here by the promise of quarry work are heard again in "Stone," a docudrama written and directed by Kim Bent and performed by the Lost Nation Theater here, eight miles west of Barre.

"Stone" is based on the book "Men Against Granite," a compilation of interviews that Mari Tomasi and Roaldus Richmond did in the 1930's with granite workers and their families. The conversations, part of the Works Progress Administration's Federal Writers Project, sought to chronicle life across the country.

Mr. Bent had long wanted to do a production about the granite industry, to explore both its local roots and the connection he believed it had to theater.

"I was attracted to the idea of the relationship between the stone worker and his heart, and the fact that something was going on in there," Mr. Bent said. "Like theater, it is a collaborative art form. It takes so many people coming together to make it happen."

"Stone" first ran last summer, and was so successful that Mr. Bent brought it back. It runs through Sunday.

The characters are, for the most part, composites of the people who were interviewed rather than mirror images of them. Elia Corti, a granite worker who was shot during a political rally in 1903, is the narrator. Almost all of the dialogue is text from the interviews, which Mr. Bent copied and shaped into scenes and characters. The play also relies heavily on traditional Irish, Italian and French-Canadian music to serve as a bridge between characters.

This year Mr. Bent tweaked the show, choosing to explore further the tension that has seemed to have a grip on Barre since its name, according to the play, was chosen by the winner of a fistfight between a man from Barre, Mass., and a man from Holden, Mass., in 1793.

This strain comes through in the play in abundant drinking, ethnic jokes that are thrown around in bars and lead to altercations, and the cries of widows trying to support families. Mr. Bent chronicles it through generations, from the first immigrants who struggled with assimilation to their children and grandchildren, who grappled with working in such a dangerous environment.

"Stone" depicts an industry built on both pride and sorrow, work that allowed men to make their mark through stonecutting but in many cases ultimately killed them. One scene shows men boasting of their quality work and ability to do just about anything in a quarry. Afterward, a group of widows whose husbands have died of lung disease or in accidents appear onstage, speaking of their struggle to make ends meet by crocheting, cooking and selling bootleg liquor while rearing fatherless children.

"Many times I wished he used to keep painting rather than work in granite," one Spanish widow who sells crochet work says. "It is very lucky for me I learned how to do this work. How else would I support myself and my three children?"

Mr. Bent said his characters had simply come together from the interviews.

"The initial work was done so well in how it captured the voices of these people," he said.

He and cast members, who mostly hail from the area, said working on "Stone" had given them a different view of the granite industry, cemeteries and the notion of memorializing oneself.

"When I carve a name on a memorial, I make a memory of that life," one stonecutter says in the play.

Mr. Bent said: "It makes you realize that it is not necessarily a selfish thing to want to memorialize oneself. It gives people who do this work a chance to be remembered."

The show, the actors said, also reflects the chasm between Montpelier, the state capital, which is filled with coffeehouses and boutiques, and Barre, where pizza places and chain restaurants are the norm. Some are upset that the play is not being performed there.

But audiences are still coming, including a group of older people from Barre who had never been to Montpelier and the theater. Last week an elderly man who provided the model for a character played by Mark Roberts took his family. They stayed after, and said the story the character tells during the play is one he has been regaling his family with for years.

"They said it was wonderful," Mr. Roberts said. "But it does give you pause to think you might be portraying someone whose family is in the audience."

Other cast members said they had seen older women crying in their seats and men solemnly nodding their heads at depictions of the mine. People whose fathers died of lung disease or who are friends of people portrayed in the show have stopped to speak to cast members.

"There are nights when there is an older person in the audience who leans over and says, 'I remember that,' " said John D. Alexander, another actor in the production.

The show, the actors said, allows people to remember heady days in a city now beset by financial problems and an industry that is on the decline.

"It brings back memories people haven't felt in a long time," said Mary Wheeler, who lives in a Barre home with granite steps.

Carol Dawes, who plays a Syrian immigrant peddler in the play and sits on the Barre City Council, thinks the play is a lesson for her home.

"We can't pass a budget, and eight miles down the road, we're singing and dancing about Barre," she said. "It's all the things we seem to have lost touch with in Barre."


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EarthLink Christens Its First Citywide Wi-Fi
Marguerite Reardon

As EarthLink launches its first citywide Wi-Fi network in Anaheim, Calif., this week, serious questions arise about whether the company's strategy to build municipal wireless networks across the country will really work.

Over the past year, EarthLink has won bids to blanket eight different cities with Wi-Fi, including high-profile projects in Philadelphia and San Francisco. But the 49-square-mile network in Anaheim, which goes live Thursday, is the company's first commercial launch of the technology, and the country's largest citywide deployment to date.

EarthLink, which has had to rely on cable and DSL (digital subscriber line) networks to deliver broadband service to consumers, is using Wi-Fi, an unlicensed radio frequency technology, as an affordable way to build its own broadband infrastructure.

But citywide Wi-Fi is a nascent market with only a handful of small city deployments as test cases. There are still a lot of issues that need to be worked out. And even getting approvals and building the networks could take years, as EarthLink and its partners navigate the slow process of negotiating city contracts. As a result, some analysts say EarthLink's Wi-Fi gamble will take a long time to pay off, if it's successful at all.

"Even if EarthLink is hugely successful with citywide Wi-Fi, we'll only start to see meaningful results in 2009," said Jim Friedland, a senior Internet equities analyst at Cowen and Co. "EarthLink is essentially running a start-up within a public company, and it's funding this new business with revenue from its traditional dial-up business, which is rapidly shrinking. It's risky."

EarthLink, founded in 1994 as a dial-up Internet service provider, still generates the bulk of its revenue from dial-up customers. But that business is slowly dying. EarthLink alone loses about 700,000 to 800,000 subscribers a year, Friedland said. The company also provides broadband Internet access, but it must sell its service using connections from phone companies or cable operators, which also sell broadband service to consumers.

And to make matters worse, the company was dealt a one-two punch last year when the U.S. Supreme Court and then the Federal Communications Commission essentially eliminated any federal protection to keep wholesale rates of cable and DSL networks in check. In June, the U.S. Supreme Court upheld a lower court's ruling that cable providers do not have to share access to their networks. A month later, the FCC followed suit by changing the classification of DSL, which eliminated the requirement that phone companies offer discounted rates to ISPs such as EarthLink.

"EarthLink's dependence on other companies' networks has always been a problem for the company, and more so recently with the regulatory shift," Friedland said. "Telecommunications companies that own their own networks have a huge advantage over those that don't, and EarthLink knows this."

To save its business model and prepare the company for a future without dial-up, EarthLink turned its attention toward citywide Wi-Fi as its best hope for building and owning its own infrastructure.

At the same time that EarthLink was looking for an affordable way to build its own network, cities across the country that were fed up with high broadband prices or a lack of coverage were also considering building their own networks. Not surprisingly, their efforts drew attention from cable and phone companies that didn't like the idea of cities competing with them. As a result, cities looked for partners in the private sector that could build and operate more affordable networks for them.

Enter EarthLink
"We were forced to look at alternative pipes," said Jerry Grasso, director of communications for EarthLink. "And muni Wi-Fi was a fortuitous opportunity because a month or so after all these federal rulings came out, we were named as the finalist in Philadelphia, and then the floodgates opened."

For more than a year, EarthLink has been answering requests for proposals, meeting with city officials to win contracts, and attending city council and community board meetings across the country to build their networks. And so far, it has won bids in eight cities: Anaheim; Arlington, Va.; Long Beach, Calif.; Milpitas, Calif.; New Orleans; Pasadena, Calif.; Philadelphia and San Francisco.

Despite criticism, cities bet big on broadband.

The cost of building Wi-Fi networks pales in comparison to what other telecommunications companies are spending to build infrastructure. EarthLink has estimated it will spend between $5.5 million, for cities such as Anaheim, to as much as $10 million for a city the size of Philadelphia, which is 135 square miles.

By contrast, Verizon is supposedly spending $20 billion to build its Fios fiber-to-the-home network, according to several analysts. And AT&T is spending $4 billion to upgrade its network. Despite its relative low cost, the EarthLink plan is still risky, some analysts say.

"There is no question EarthLink will lose money initially to build and operate these networks," Friedland said. "And it's really questionable whether they will get the subscriber penetration they need going forward to make this a profitable substitute service to cable or DSL."

Cable operators and phone companies are already in the broadband market with a large customer base. And DSL providers are beating EarthLink on price. EarthLink's Wi-Fi broadband service offers 1Mbps (megabit per second) downloads and 1Mbps uploads for $21.95 per month. A one-year promotional service offered from AT&T, which provides 1.5Mbps of service, costs only $12.99 per month. Verizon also offers a cheap 768Kbps (kilobits per second) service for $14.95 per month.

Citywide Wi-Fi service also isn't as stable as DSL or cable service and will never be able to offer the same high speeds that those two technologies will offer. Several smaller cities that have already deployed Wi-Fi, such as St. Cloud, Fla.; Tempe, Ariz.; and Chaska, Minn., have experienced coverage issues. And users have complained about not getting access inside their homes.

But EarthLink's Grasso said that all new technologies have their issues and that eventually early Wi-Fi problems will be worked out.

To solve the in-home problem, customers who have trouble getting a signal may have to add a box to their home to boost the signal indoors, he said. EarthLink is offering the wireless signal booster free of charge to existing EarthLink customers who sign up for the Wi-Fi service or to new customers committing to a year of the service.

Grasso also said EarthLink sales representatives will consult with customers before they buy the service to ensure they have appropriate Wi-Fi client hardware and software running on their PCs and laptops and to determine if a signal booster is needed.

While the EarthLink Wi-Fi service may not sell well as a broadband replacement service, it could do well among business travelers once EarthLink has networks up and running in more cities.

According to Jupiter Research, about 20 percent of Internet users said they had accessed either a free or paid public Wi-Fi hot spot in 2005. That figure is up from only 14 percent in 2004. Analysts expect an even greater increase for 2006.

EarthLink already recognizes the potential for the mobile market. And the company has anticipated adding easier access and more mobility features for business travelers. It also sees potential to work with cable operators that may want to use the EarthLink Wi-Fi network to offer mobile services for cable modem customers.

"This is our network, and once we get a larger footprint it will give us a lot more options," Grasso said. "Eventually, we have to get to a point where roaming is a part of the service. The folks in Anaheim should be able to log on and use their service in Philadelphia or San Francisco."

Mass. Holding Tight to OpenDocument
Martin LaMonica

Massachusetts is sticking to its plan to adopt OpenDocument, despite a critical report calling for a delay to the high-profile move.

Louis Gutierrez, Massachusetts' chief information officer, said in an interview with CNET News.com that the Information Technology Division (ITD) is forging ahead with its project to make OpenDocument the default document format for executive branch agencies by January next year.

"Our next action is to do what we are doing right now, which is working toward the goal. We believe in the utility of open standards," Gutierrez said Friday.

On Thursday, state Sen. Marc Pacheco, the chairman of the Senate Committee on Post Audit and Oversight, released a report that blasted the process behind the choice of OpenDocument, calling it "closed" and controlled by a few individuals.

Gutierrez said he disagreed with the report's characterization of the process that led up to the state's decision to standardize on OpenDocument, or ODF. But he noted that the oversight committee was not opposed to the state's movement to open standards.
"There is substantial concurrence on going forward in the right way," Gutierrez.

The report's release and the ITD's response to it are the latest twists in a months-long saga in Massachusetts that has attracted worldwide attention.

Supporters of the state's plan to go with OpenDocument, rather than a Microsoft format, have hailed it as a landmark move that will tilt the balance of power to customers and away from vendors. Critics, meanwhile, have called it a biased decision, unfairly favoring open-source products to the exclusion of Microsoft.

The state's efforts to wrest control of its data from proprietary formats appears to have struck a chord with a number of government agencies, companies and even individuals seeking to avoid "vendor lock-in."
Listen up

OpenDocument: CNET News.com reporter Martin LaMonica finds out from Louis Gutierrez, CIO of Massachusetts' IT division, why he's pressing ahead with OpenDocument. Download MP3 (3.25MB)

Stephen O'Grady, an analyst at RedMonk, said that Massachusetts has validated the idea of standardizing on a non-Microsoft format, giving its effort a symbolic significance for others.

"Many enterprises are not thrilled about paying Microsoft what they do for Office, but feel like they have to. ODF by itself does not remove those concerns, but it does begin to open doors that were not there previously, if only from a negotiating standpoint," O'Grady said.

Although Gutierrez was not involved in the original decision to choose OpenDocument, he lauded the decision as the right thing to do.

"That move has helped move the dial for everyone," he said, noting Microsoft has submitted its own document formats to standards bodies and that it has made changes to its licensing terms.

"I think it was surely controversial and it did, in fact, have certain defects the process...But it was the right thing. It's something that will be recognized as having been an important step in a really valid direction," he said.

The promise of plug-ins
Since taking over the reins as CIO earlier in January this year, Gutierrez has led a few pilot projects of OpenDocument-compliant products from Sun Microsystems, IBM and the open-source OpenOffice suite.

The state has also engaged IT services company EDS to do a full-scale, five-year cost analysis of moving to OpenDocument, which Gutierrez said the state was nearly done with.

In addition, the state has hired an expert and created a lab to address the needs of people with disabilities--an area where Pacheco and some disabilities advocates have been critical of the planned OpenDocument move.

Although observers initially thought the state's decision to use OpenDocument would lead to the removal of Microsoft Office from 50,000 desktops in Massachusetts, Gutierrez said that Office may stay around.

He said the state's IT department is investigating a plug-in that would allow people using Office to save and share documents in the OpenDocument format. Microsoft has said it will not build support for OpenDocument into Office 2007, citing lack of demand.

So far, that plug-in approach shows "enormous promise" because it could meet accessibility requirements and potentially cost less than a large-scale migration, Gutierrez said.

He added that he is prepared to evaluate Microsoft's Open Office XML formats, which are expected to become standardized next year.

But what's essential is a transition to XML-based document formats like OpenDocument, Gutierrez said.

"Our whole mindset is around writing memos and saving them to disk, but that is not the future of this. The future is about document workflow, and document workflow is greatly enhanced with XML-based documents," he said. "And it's hard to work with XML-based documents unless you have the standard form."

Gutierrez added that the Massachusetts IT Division, in conjunction with the Secretary of Administration and Finance, intends to give a formal update on the project in late July or early August.

Pacheco, who presented the oversight committee's report on Thursday, agreed in principle with the benefits of standards, but he was sharply critical of the process leading to the OpenDocument policy.

Pacheco's report contended that the state's IT division set the policy without having the legal authority and without sufficient input from people with disabilities. In addition, he said that ITD officials did not perform a proper cost/benefit analysis before finalizing the plan.

"The principles of open standards may offer the benefits of decreased costs and interoperability of documents, but the ITD did not pursue the policy in an open, collaborative or lawful manner," Pacheco said at a press conference at the Massachusetts State House in Boston.

He said that former Secretary of Finance and Administration Eric Kriss and former CIO Peter Quinn had decided on OpenDocument and deliberately disregarded the typically open process of choosing standards and technologies.

Quinn stepped down as CIO last December after facing political pressure, saying his presence has become a distraction to the implementation of the OpenDocument plan.

Gutierrez, who was hired to complete the implementation plan, said that the hoopla around the OpenDocument decision has had a "chilling effect" on other state CIOs. States have expressed interested in OpenDocument but are "waiting and watching" what happens in Massachusetts, he said.

"It's a mark of our times that technology decisions have become as important and interesting to the public discourse," Gutierrez said. "My own hope is that we move away from the theatre of conflict."

Gutierrez was named by current Massachusetts Gov. Mitt Romney, who will finish his term at the end of this year. Gutierrez said that it's possible the arrival of new governor could set the ongoing OpenDocument implementation off track, but it would only be a temporary delay.

"Massachusetts' stepping out on this in a technical reference model, saying this is where we're heading...triggered this firestorm we're all walking through," he said. "I really do believe this is an almost inevitable direction, and it's a question of when, not if. Even if there are a couple of spasms in the history, it's going there."

Crazy Ivan

The movie was in Russian. It even said so – sort of (rus) - yet still I downloaded it and I don’t speak the language. D'oh! King Kong, the seventies version with Jeff Bridges and the leggy Jessica Lange should have been perfect for the Fourth. Fine rip too. But there was this little thing…The overdub. What’s that you say, never heard of an overdub? Me neither. I just made it up. Here’s why: they took this flick with an American soundtrack and simply TALKED OVER it in Russian! It’s like an audio subtitle where you still hear the original dialog. It’s like a friggin UN meeting now except fun because there’s a giant ape and dinosaurs. I deleted the damn thing then reconsidered and put it in my permanent collection, just for the weirdness factor. Should go great with vodka.

Preventing Movie Piracy

Researchers are developing tools to thwart the copying of films in theaters.
Kate Greene

Thomson’s prototype anti-piracy system inserts extra frames into a movie that contain text or obscure the scene. The frames flicker at a frequency imperceptible to the human eye, but picked up by camcorders, thereby ruining a bootlegged movie. (Credit: Thomson.)

Last month, we ran a story about an experimental device for locating and blocking cameras ("Lights, Camera -- Jamming"). Here we look at another set of technologies aimed at dissuading would-be bootleggers.

The movie industry has a problem. According to the Motion Picture Association of America (MPAA), Hollywood loses billions of dollars a year on illegally sold copies of movies. The losses are impossible to calculate accurately, of course, since it's unclear how many of the people who download copies over the Internet or pay a few dollars for a pirated DVD would have paid $9 to $20 for a theatre ticket or legal DVD. Nonetheless, studios and theatre owners are eager to find ways of safeguarding their intellectual property.

Paris-based Thomson, which provides technology to the entertainment and media industry, is exploring methods for thwarting at least one type of bootlegger: the covert camcorder user. The company's technique involves inserting "artifacts" -- extra frames, flashes of light, or pixelated grid patterns -- into a movie during its digital-processing phase, before it's shipped to theatres. The goal is to mar a camcorder recording without degrading the images moviegoers see, says Jian Zhao, chief technology officer of subsidiary Thomson Content Security in Burbank, CA.

The artifacts exploit the differences in the way a human brain and a camcorder receive images. In the technique that's furthest along, extra frames -- with the words "illegal copy," for instance -- are inserted into the film. These warning words flicker by at a frequency too fast for the human brain to process -- yet they appear in a camcorder recording.

This difference is possible because movies are projected as a series of still shots. Film projectors flash 48 images per second (24 frames are collected each second, but each frame is flashed twice) and high-end digital projectors can flash even more, according to Thomson researchers. The limit for human visual processing is around 45 flashes per second; above that, a flickering image appears continuous. Furthermore, camcorders do not average frames, as eyes and brains do. Instead, they're sampling devices that take a series of snapshots -- collecting many more frames per second than our visual systems. Hence, frames that eyes would miss show up in a camcorder recording -- and are reproduced on a video screen when the recording is played.

Using extra frames to obscure a recording isn't as straightforward as it seems, however, since camcorders could theoretically be set to a sampling frequency low enough that they'd miss the hidden message, says Zhao. That possibility requires counter-countermeasures, such as randomly adjusting the frequency at which the extra frames appear. Camcorders can't yet adjust their sampling frequencies quickly enough to keep up and produce a quality recording. But camcorder technology will continue to evolve, says Zhao, "and thus, we've got to evolve."

In addition to the frame-insertion technique, Thomson is working on incorporating additional sabotaging mechanisms into its system, such as projecting ultraviolet or infrared light onto the screen and washing out camcorder pictures. Aware that the easy counter-measure to this is simply to place a filter over a camcorder's lens, Zhao says their system is being designed to combine many different wavelengths, so that finding the perfect filter would be difficult.

VA Laptop Sold From Back Of A Truck
Bob Sullivan

We have a few more details on what happened to the nation’s most famous runaway laptop computer during those mysterious two months it was missing, courtesy of NBC’s Pete Williams. We’re talking about the computer and hard drive that were stolen from a Department of Veterans Affairs employee in May, an incident that made headlines because the hardware contained private information on 26.5 million veterans and current GIs. Last week, VA chief Jim Nicholson announced in dramatic fashion that the prodigal computer had been found, but details about the return were sparse.

NBC’s Williams has been able to fill in some of the blanks after talking to law enforcement officials investigating the incident.

Both the laptop and hard drive ended up for sale at a black market just north of Washington D.C., near a subway station outside the Beltway near Wheaton. We’re talking about the kind of market that is literally run out of the back of a truck, one official said. Fortunately, a buyer purchased both components at this black market, keeping the missing hardware together.

The male buyer, who has not been publicly identified, later spotted fliers posted at a nearby supermarket seeking the return of the equipment. After matching the serial numbers on the flier with those on the equipment, the buyer decided to turn in the equipment. No doubt, a posted $50,000 reward helped encourage that decision.

He had a friend in the U.S. Park Police who brokered the exchange with the FBI, Williams was told.

At that point, the FBI ran forensics tests on the equipment and concluded the sensitive data – such as veterans’ Social Security numbers -- had not been accessed. Knowing more about the secret life of the disappearing hardware should make veterans a little more comfortable that their personal information was not compromised during the incident.

But not all questions have been answered yet. The obvious missing puzzle piece is this: How did the hardware get from the VA employee’s home in Aspen Hill, Md., to the back of a truck in Wheaton, about 4 miles away? And what happened during the trip?

'Leopard' puts its prey on the spot

Apple Taunts Microsoft With Faster OS Launches
John Boudreau

In 2004, when Apple Computer showed off its latest ``cat,'' Tiger, it couldn't help but taunt Microsoft.

The Redmond, Wash., software giant was working on its long-awaited next-generation Windows operating system, Vista, known then as ``Longhorn.'' During Apple's annual developer's conference in San Francisco, when its Tiger operating system was unveiled, the company jabbed at its mighty competitor with posters that read: ``Redmond, start your photocopiers,'' ``Introducing Longhorn'' and ``Redmond, we have a problem.''

In roughly the same time frame that Microsoft has labored over Vista -- its predecessor, Windows XP, was launched in 2001 -- Apple is on the verge of rolling out its fourth Macintosh operating system.

Microsoft, meanwhile, has delayed the release of Vista until early next year.

While it's easy to rib Microsoft and its inability to get Vista out to people sooner, the new operating system must be compatible with the vast majority of computers on the planet -- and just about every device software known to humanity. Still, that's not likely to prevent Apple from giving Microsoft a hard time when it unveils its newest operating system, Leopard, expected at August's World Developers Conference at the Moscone Center in San Francisco.

``There will be another round of, `Why can't Microsoft get Vista out?' which Microsoft would just assume not happen,'' said Greg DeMichillie, senior analyst with Directions on Microsoft, an independent research organization. ``It's a bit of an embarrassment for the company.''

It's also easier for small-market-share Apple to poke fun at the world's largest software maker.

``The fun part of having 3, 4 percent market share is that you get to tweak the other guy's nose. You are not perceived as being a bully or mean,'' he said. ``If Microsoft were to make a press release tweaking some feature Apple doesn't have, it would be perceived as bad form.''

Critics and analysts credit Apple for its ability to continually innovate ahead of its much bigger rival. But unlike Microsoft, Apple has the advantage of controlling every level of the computing experience by making the hardware, as well. Apple can also keep the competition guessing until the last minute because, as a consumer-focused company, it does not have to show its hand until it wants to.

Microsoft, whose Windows XP runs on hundreds of millions of PCs, has a complex web of relationships it must work with. It has to broadcast its intentions to the world, or risk angering business clients and partners.

Apple has created its own ecosystem. And its ability to continually create elegant products gives it an influence that far exceeds its relatively small size in the computing world. That's why a new Mac operating system stirs up a buzz, from the blogosphere to Redmond.

``It's going to be really exciting,'' Jupiter analyst Michael Gartenberg said. ``This is going to be Leopard's coming out party.''

Apple's well-honed marketing strategy is the tech version of a slow striptease.

``When it comes to Apple, trying to predict what it might do in a short period is a bit of a fool's errand,'' Gartenberg admitted.

Nonetheless, plenty of bloggers and analysts feel confident Jobs will announce that his next operating system will have a significant upgrade to Boot Camp, Apple's free beta software that allows Mac users to run Windows on the newest Intel-based machines. The new Boot Camp could provide a much more seamless process that does not require people to reboot their computer to switch between Mac and Windows operating systems, as they do now with the Apple software. (A third-party software, Parallels Desktop for Mac, now allows people to run Windows on Intel-based Macintosh computers without clicking the restart button.)

There are expectations that the popular Mac iLife, an application that helps people manage and play with digital goodies like photos and video, could get spiffed up even more. There could also be better search technology, for Web-based and desktop information.

Envisioneering Group analyst Richard Doherty believes Apple's new operating system will put pressure on Microsoft.

``Apple has been delivering compelling upgrades every 12 to 18 months since 2001,'' he said. ``During that time, Windows XP has had a Service Pack, and that Service Pack has been more about fixing problems.''

Still, it remains to be seen if Apple can persuade a significant amount of people to switch from PCs to Macs that can run Windows.

Microsoft, on the other hand, actually has something to gain from a successful launch of Leopard, said Piper Jaffray analyst Gene Munster, who predicts Apple will ship the new operating system as early as December.

``I talked with a Microsoft employee after Boot Camp came out,'' he said. ``They think it's great. It means there are more computers they can sell Windows on.''
http://www.mercurynews.com/mld/mercu...s marketwatch

The long and short of it

A Not-So-Small Small Screen
Damon Darlin

Samsung Electronics thought it won the bragging rights this year as maker of the world's biggest TV, with a 102-inch plasma screen, but Panasonic beat it by one inch. Samsung does have the largest plasma screen in stores, a 63-inch screen.

As it stands now, Sharp Electronics boasts of making the biggest liquid-crystal-display TV for sale, a 65-inch Aquos. It would be the biggest TV on the market if not for Samsung's 72-inch rear-projection TV. "We have the capability to build L.C.D. TV's much larger," said Bob Scaglione, senior vice president for marketing in Sharp's consumer electronics marketing group.

The title of maker of the biggest screen will constantly change hands, but one thing is certain: TV's will keep getting larger. Market analysts at Quixel Research of Portland, Ore., say many consumers now want a screen 50 to 55 inches. It projects that by 2009 the sweet spot will have shifted to a 60-inch screen. "That suggests the consumer doesn't have a maximum size," Mr. Scaglione said. "Maybe it will happen for an 80- or 90-inch screen."

Just how big is too big for a TV screen? Such an idea is anathema among TV executives.

"Can it be too large?" asked Phil Abram, Sony's vice president for television marketing. "Only in the sense that it overwhelms the room you are in. As a TV guy, I have trouble in my heart believing that a TV can overpower a room."

You wouldn't think that size matters, especially with new homes built ever bigger. The average new home is 2,434 square feet, 62 percent larger than a home built in 1970, according to the National Association of Home Builders.

But within the walls of the big new homes, changes are occurring that affect how people will watch TV. Some trends will make it easier to fit in a screen as big as 103 inches. Others will make it trickier to find the right spot for even the sought-after 50-inch screen.

A consumer might easily have space for a big screen in a home theater or media room. About 10 percent of homes are being built with a media room, the home builders' association said — although in many cases, it is just another name for the basement, or what builders in a previous era called the rumpus room or the rec room.

Another room that is increasingly conducive for big-screen TV's is the sprawling master bedroom. The dimensions of that room in the average new home is 15 by 20 feet, said Gopal Ahluwalia, staff vice president for research for the home builders' group.

All that bodes well for big TV's. But at the same time, the kitchen has opened up into the family room. Whole rooms are disappearing. "We think that in 10 years there will be no more living room," Mr. Ahluwalia said. Interior walls where a TV might be hung are gone. So now, where does the TV go?

This problem becomes clearer when you look at the mathematics of screen size. TV manufacturers measure sets on the diagonal of the screen. A 60-inch diagonal screen is about 52 inches wide and 29 inches high. That means a room needs to have an expanse of blank wall that is almost four and a half feet wide, or wider if the TV has speakers along the side of the screen or a wide-screen format.

A second consideration is viewing distance. A viewer should sit no closer than one and a half times the diagonal of a 1080p high-definition TV, the highest resolution TV available, according to the makers of high-definition sets. (The rule of thumb is two and a half times for TV's with lower resolution.) In the case of a 60-inch TV, that is about eight feet from the screen; otherwise you will start seeing the pixels in the picture.

Almost all new homes and most older homes have 12 feet of viewing distance for such a TV in a master bedroom or a family room. It starts getting difficult to find that room in many apartments.

Move up to a 103-incher and look what happens. You need a wall at least 90 inches wide — seven and a half feet. The TV has to be at least 13 feet away from the viewers. Some experts claim that the optimum viewing distance is about twice that. Now where does it go?

George McKechnie of Axiom, a high-end home theater installer in Monterey, Calif., put in a $24,000 Runco 3-chip DLP front projector for one customer that splashes a 100-inch or larger image on a movie screen in the room. "It's marvelous if you are sitting 16 feet away," said Mr. McKechnie, who founded the business with his son, Loren. "At 12 feet, you can see the pixels." In short, "you need a pretty big room." About 80 percent of his business is installing 50-inch TV's, and about 5 percent is for 61-inchers, he said.

John Revie, vice president for sales and marketing for visual displays at Samsung Electronics, is not worried that size will ever matter. "There is no reason why it can't get any bigger," Mr. Revie said. "It comes down to what the consumer wants and what they are willing to pay. As long as it is in reach financially, they will get the largest set possible."

Mr. McKechnie, a former clinical psychologist, is not so sure. "It's not driven by the consumer," he said. "The technology is so complex that is it driven by the perception of what the consumer wants."

Mr. Abram of Sony said the company's designers were starting to take note of size. For instance, the company's new 46-inch-diagonal rear-projection TV is only an inch wider than its 42-inch-diagonal plasma TV because the speakers are moved from the side to below the screen.

On some of its Bravia models, Sony gives owners the option of swapping the silver bezel around the screen for one that is red, white, blue, black or brown to help minimize the appearance of the TV in the room.

For rooms with controlled lighting, the front projectors may end up being the answer for many people. Front-projection TV's were the fastest-growing category last year, with a 55 percent increase in sales, according to Quixel. The units are portable — some are the size of a thick paperback book — and a screen could be pulled down from the ceiling when needed.

Robert Stephens, head of Best Buy's Geek Squad, said he had seen the future in college dormitories and fraternities. Students project movies and video games onto a large wall with special reflective paint. "If you want to see what's going to happen, watch the kids in college," Mr. Stephens said.

A Movie Machine You Can Grab and Go

J. D. Biersdorfer

Portable video players have made it easy to kill your commute time with a few downloaded movies or TV shows. But if you want to watch a full-length movie on DVD and don't want to wrestle the video off the disc and onto a mobile device, the Philips PET320 portable DVD player could come in handy.

The PET320, which is roughly the size of a portable CD player, has a 3.5-inch color screen on the front and built-in stereo speakers for sound. The unit can play DVD films, home movies on recordable DVD formats, picture discs full of JPEG images and CD's full of MP3 files. The player uses a rechargeable battery that gets roughly two and a half hours of playback time, and it comes with an adapter for recharging with a dashboard power outlet.

More details on the player can be found at www.consumer.philips.com. It is just starting to arrive in stores and is available for preordering on Amazon.com. At $130, its price is well below that of most of the automobile DVD systems that are used to hypnotize fidgety passengers on long drives.

Until next week,

- js.

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