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Old 29-08-07, 09:05 AM   #1
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Join Date: May 2001
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Default Peer-To-Peer News - The Week In Review – September 1st, '07

Since 2002

What long weekends are made for.

"The service will be resumed." – AllofMp3

"I have to leave the state, really, I can't live here under this Orwellian protocol. It's nightmarish." – Jack McClellan

"It is not the Chinese government that is the defendant here. It is Yahoo, for their part in this process. If not for Yahoo, there would have been no abuses. They gave the pieces of information that allowed China to take these actions." – Morton Sklar

"Someone went to a great extent to interfere with everyone else's burn. I think, frankly, an attention whore has made a plea for attention." – Ranger Sasquatch

"Perhaps it is time to stop buying records. It's a possibility, to send that message." – Giles Fielder-Civil

"In Japan you can already download an hour's worth of video in 16 seconds." – Vinton Cerf

"Obviously, without the competition, we would not have done all this at this pace." – Hideki Ohmichi

September 1st, '07

RIAA Faces Serious Piracy Lawsuit

Music org's stern policy in jeopardy
William Triplett

A lawsuit recently filed against the Recording Industry Assn. of America could ultimately force the org to drop or dramatically change the way it uses its principal weapon in the fight against online piracy, according to experts and observers.

The case -- filed in Oregon and asserting claims under the Computer Fraud and Abuse Act and the Racketeer Influenced and Corrupt Organization Act -- details the RIAA's alleged use of "illegal and flawed" methods when investigating people for downloading or swapping copyrighted songs without paying for them.

The plaintiff in the case, disabled single mother Tanya Andersen, claims the RIAA was aware of the faulty methods but has nonetheless filed lawsuits against innocent people in some cases.

Andersen claims she is not the only victim of such tactics and is therefore seeking class-action status for her suit. If the court grants that status, the RIAA could be facing a losing proposition because class-action suits can be extremely risky for defendants, in this case creating the potential for a big payout by the music labels.

"If class action is certified, it's more likely that the record companies would settle," said Ronnie London, an attorney versed in class-action law with the firm of Davis Wright Tremaine, which specializes in communications law.

Settlement could also lead to less aggressive legal tactics in pursuit of online pirates.

The recording industry's willingness to settle is far from guaranteed, however, given the nuanced variables of class-action suits and the RIAA's contention that the Oregon suit is meritless and thus should be dismissed -- an argument the org plans to make in a brief it will file with the court in the coming weeks.

According to Andersen's complaint filed with the U.S. District Court in Portland, "For years, the RIAA and its member companies have been using flawed and illegal private investigation information as part of their coordinated scheme and common enterprise to threaten, intimidate and coerce payment from private citizens across the United States. As such they have clogged and abused the federal courts for many years with factually baseless and fraudulent lawsuits."

In 2005, Oregon resident Andersen received notice that the recording industry was suing her, claiming it had proof she had illegally downloaded and shared almost 1,300 files of copyrighted music. The notice strongly suggested that she agree to a settlement of $4,000-$5,000 or face prohibitively expensive litigation.

Andersen said she had done no such thing and hired a lawyer to countersue. As the discovery phase proceeded, Andersen's lawyer eventually claimed:

• MediaSentry, the investigative firm contracted by the RIAA to identify illegal downloaders, is not licensed for such investigations.

• MediaSentry and the RIAA have known "for years" that the investigative methods are flawed and sometimes result in cases of mistaken identity.

• An agent from the settlement company told Andersen that he doubted she was guilty, but the record labels "would not quit their attempts to force payment from her because to do so would encourage other people to defend themselves."

• The RIAA repeatedly refused to accept Andersen's offer that their representatives come inspect her computer's hard drive until a court ordered the inspection -- which showed the computer had not been used for any infringement.

• Persisting, the RIAA began to harass Andersen's 10-year-old daughter, demanding a deposition from her and even posing as a relative when calling her school to get access to her.

• The RIAA finally dropped its case only after a court ordered it to produce evidence of infringement, which the org never did.

"Tanya Andersen is not alone," said Lory Lybeck, her attorney. "Her story is emblematic of the abuse this process has at its core." Lybeck added that, since filing for class-action status, he's been contacted "by a number of other people who are in a similar position" and is "confident" that status will be granted.

The significance of class-action status "would be huge," said Ray Beckerman, an attorney who has represented defendants in illegal downloading lawsuits filed by the RIAA. "The RIAA's whole gambit has been economic imbalance: four huge multinational corporations join forces in an even larger cartel and sue Mom and Pop. Class actions are economic equalizers, anathema to the RIAA. If there's a class action, the court could issue a preliminary injunction that would stop the RIAA's unlawful practices," Beckerman added. "If class action is certified, there would probably be at least a behavioral change on the part of the record companies. They'll be more circumspect about which defendants they actually pick and may be more amenable to settling for less money," London predicted.

Defendants can seek dismissal of the case even before the court rules on class action status, and the RIAA intends to do this. Failing that, defendants can also dispute the merits of the application for class action.

Once class-action status is granted, the key is usually whether the plaintiffs are likely to prove they have been harmed as a direct result of wrongful actions by the defendant, but Heidi Li Feldman, a professor at Georgetown U. Law Center, said that even then, a settlement offer isn't assured.

Gaining class-action certification is anything but easy. "The courts say classes must be certified narrowly," Feldman continued. "That means there must be serious overlap in both the facts of each case and the laws that are applicable to all members of the class."

A court decision on certification can take upward of a year.

"We are confident that (Andersen's) claims have no merit," an RIAA spokeswoman said. "We look forward to presenting our arguments in the next few weeks to the court about why this case should be dismissed. In all our cases, we seek to follow the facts and be fair and reasonable in resolving pending claims."

Since September 2003, the RIAA has filed more than 21,000 illegal downloading suits.

Judge Agrees With RIAA, Says P2P Apps Lead to Theft

An Arizona court ruling late last week could potentially upturn the entire peer-to-peer software business, according to observing lawyers. In the case of Atlantic Records versus Jeffrey and Pamela Howell, presiding judge Neil Wake has ruled that the Howells' act of making content available through KaZaA equated to copyright infringement by itself and that the Howells were liable for perceived damages, which now reach $40,500 and include a permanent injunction which would prevent the Howells from infringement in the future. Using settings to control P2P trading are invalid as there have been "several cases" in the past where defendants had let their local content transfer to other users, Judge Wake said.

Although supported by past cases, the ruling is likely to help establish a strong precedent for other cases and could open the door to legal rulings against the software developers themselves, a number of which allow peer-to-peer trading without content filters or other methods that would screen known illegal content from the system. Pressure from lawsuits by RIAA-supported labels recently forced LimeWire to develop a legal online music store, while BitTorrent client developer Azureus has recently opened its Vuze (formerly Zudeo) peer-to-peer video service.

No word has been received as to whether the Howells will appeal the decision.

File Sharing is Not Evil. It's Not! It's Not! It's Not!
Doran "Fozz" Barton

Many who read the Fozzolog know I've become a fan of Porcupine Tree -- a progressive rock band based out of England. They've been releasing music steadily since the early 1990s.

I saw them perform live last year in San Francisco and had the time of my life. Performing on stage with them was guitarist and singer John Wesley, an American who has accompanied the band on the road since their In Absentia album tour in 2002.

"Wes" is also featured on the band's most recent album Fear Of A Blank Planet.

Anyway, my buddy Thom alerted me today that Wes posted a blog entry to his MySpace site a couple days ago which contained some rather shocking news. Here it is:

"Sharing the Wes"

For me to continue to create music, I have to know that people are hearing it. Elements of cost and lack of distribution have made most of my catalogue very difficult to acquire. So rather than go into a long diatribe about how the industry is changing, I am just going to post this blog to announce a new "Share the Wes" policy.

My entire catalogue is now available through links on this site as MP3 downloads - at no cost.

The only thing I ask in return is that if you choose to download the music and add it to your collection, you "Share the Wes" with everyone you know that may have an interest in the music that I create.

Point them to the site and encourage them to discover the music I have created over the course of my career, and then encourage them to share it!

If you like the music, go to the "Demand it" button on my site, tell me where you are, and hopefully at some point in the future I can come near to where you are and "Share the Wes" live.

I am driven by a need to create and perform. Sharing my music in this manner will help to remove some of the barriers that I have encountered in exposing the songs to a wider audience.

In regards to income, music is not free to create. There are heavy costs in the time, money and expense it takes to create, record and perform the music. Many people also still enjoy having the CD and artwork... Some like to have it signed to collect, and let¹s face it, CD's are higher quality and sound better than MP3's. So to help defray these costs and still make the music available to the fans that love having the discs, I will still offer the music in CD form online and at gigs, although most of the music I am offering is now out of print, which again, is a major factor in my decision to "Share the Wes" for free.

I've added a Paypal button on the site for donations to go towards covering the expense of creating new music. If you download the music and you love it, and you want to be a part of supporting my quest to create more, click the Paypal button. Any amount helps and will go to covering the cost of creating new music.

When I create new music, there will be an initial period where it will only be available on CD or Snocap, again, to help cover the costs.

The bottom line is, there are now over 50 songs on this site to have, to share, and to help you become a part of the entire history of my journey of creating music.

Please take it all, listen to it, and enjoy... and share it!

John Wesley

This is really cool news and it makes perfect sense. Wes is in a good situation to do something like this -- he's fairly independent and not encumbered by the iron fist of a record company.

I say this is common sense because of my experience with Porcupine Tree. I was introduced to the band by word of mouth and was then prompted to download some of their music from (evil, illegal) music sharing sites/networks on the Internet. Some of the stuff I downloaded is out of print or very difficult to get your hands on otherwise.

Someone (perhaps, someone from the RIAA) might say I'm a bad, bad person for doing this, but consider the outcome: I ended up traveling to San Francisco and attending a concert I otherwise would not have. I bought the band's live DVD Arriving Somewhere (which is excellent, BTW), a DTS DVD-Audio version of Deadwing, and the CDs: Fear Of A Blank Planet and Stars Die - The Delerium Years.

Word-of-mouth and, more importantly, music (illegitimately) obtained from online sources results in money in the bank for artists who make good product.

So, if you're inclined to like progressive or alternative rock, you can do as I will also do: download Wes's stuff. See if you like it. If you do, consider purchasing a CD or two or, better yet, hit that "Demand It" button on his site to indicate that you would likely pay for a ticket to a concert in your area if John Wesley were to perform.

TorrentSpy Blocks Searches From US Visitors

Starting today, TorrentSpy blocks all searches from US visitors and redirects them to a privacy statement. TorrentSpy is caught up in a lawsuit in which the MPAA demands that TorrentSpy hands over all user info stored in “random access memory” (RAM).

This service denial seems to be a preventative measure to protect their users, when US users try to search on TorrentSpy they now get this message:

Sorry, but because you are located in the USA you cannot use the search features of the Torrentspy.com website.Torrentspy’s decision to stop accepting US visitors was NOT compelled by any Court but rather an uncertain legal climate in the US regarding user privacy and an apparent tension between US and European Union privacy laws.

At this point it is still unclear whether the search redirect will be temporary or permanent, TorrentSpy owner Justin was not available to comment at this point. Over 15% of TorrentSpy’s visitors are US residents, shutting them down for good will be a disaster for the site.

TorrentSpy currently does not log any user data, but if the court decides that they have to hand over all information stored in RAM, this would be a huge blow to Internet privacy. The MPAA reasons that all IPs, downloaded .torrent files, dates and other user info are temporarily stored in RAM for a few milliseconds and demands that TorrentSpy logs this info and hands it over to the MPAA. Basically they are demanding that TorrentSpy should keep server logs.

TorrentSpy lawyer Ira Rothken is determined to fight this but said in a statement about the case: “The odds favor the copyright owners, copyright law in this country is Draconian and dramatically skewed on the owner’s side”.

To be continued…

TorrentSpy Must Preserve Data in RAM
Eric Bangeman

A federal judge has upheld a magistrate's decision forcing TorrentSpy to enable server logging so the Motion Picture Association of America can obtain the IP addresses of those connecting to BitTorrent files via the service. There's one small hitch for the MPAA, though. TorrentSpy has decided to block access by US residents, ensuring that the MPAA will find little of interest in the log files and rendering the court's decision moot—at least for this case.

Throughout its existence, TorrentSpy has not been in the habit of keeping server logs. Its old privacy policy said that it did not collect any personal information on users, including IP addresses. After the MPAA filed suit against TorrentSpy (and a handful of other of other tracker sites), the expected treasure trove of IP addresses failed to emerge from TorrentSpy due to the aforementioned lack of logs. The MPAA's response was simple: try to force TorrentSpy to turn on logging.

TorrentSpy fought the MPAA's request, arguing that privacy laws in the Netherlands—where the servers are physically located—prevented it from maintaining and disclosing the logs. The site also argued that the log data wasn't available, since it existed only in RAM, and as such, was never stored.

The magistrate judge didn't buy that argument, and in her opinion reaffirming the magistrate's order, neither did Judge Florence-Marie Cooper. Judge Cooper took issue with TorrentSpy's argument that data in RAM is not "stored." She noted RAM's function as primary storage and that the storage of data in RAM—even if not permanently archived—makes it electronically stored information governed by federal discovery rules.

Judge Cooper also noted the language of the discovery rule governing electronically stored information, which states that the rule is "expansive" and includes "any type of information that is stored electronically." She also dismissed concerns that the ruling would have a significant impact as far as record-keeping obligations. "The Court notes that this decision does not impose an additional burden on any website operator or party outside of this case," reads the order. "It simply requires that the defendants in this case, as part of this litigation... begin preserving and subsequently produce a particular subset of the data in RAM under Defendants' control."

Since TorrentSpy is no longer doing business in the US, the judge's ruling will have little real impact on this case. It could, however, have far-reaching ramifications beyond this case. Under this interpretation, any data stored in RAM could be subject to a subpoena, as at a basic level it is a "medium from which information can be obtained" just like a hard drive.

Court Rules Against TorrentSpy in Hacking Case
Greg Sandoval

A lawsuit filed last year by TorrentSpy--a BitTorrent search engine--that accused the movie studios' trade group of intercepting the company's private e-mails, was tossed out of court last week.

But while a U.S. District judge found that the Motion Picture Association of America had not violated the federal Wiretap Act, as TorrentSpy's attorneys had argued, the MPAA acknowledged in court records that it paid $15,000 to obtain private e-mails belonging to TorrentSpy executives.

The MPAA's acknowledgement is significant because it comes at a time when the group is trying to limit illegal file sharing by imploring movie fans to act ethically and resist the temptation to download pirated movies. To critics, the revelation by the MPAA is a possible sign that the organization is itself not above adopting unethical practices in its fight against file sharing.

"Ethically, it's pretty clear that reading other people's e-mail is wrong," said Lorrie Cranor, an associate research professor and Internet privacy expert at Carnegie Mellon University. "Being offered someone else's e-mails by a third party should have been a red flag."

The MPAA, which says that illegal file sharing costs the film industry more than $2 billion annually, did not respond to interview requests.

In court records, the MPAA said that the person who obtained the e-mails did so before approaching the group with an offer to sell the information and that he signed a contract stating he had come by the correspondence through lawful means.

Ira Rothken, TorrentSpy's attorney said: "We believe that the MPAA, when it paid $15,000 for about 30 pages of e-mails, knew or should have known they were involved in purchasing something in a wrongful manner."

Rothken said that TorrentSpy will appeal the court's decision that the pilfering of TorrentSpy's e-mail did not violate the Wiretap Act.

According to court documents, the MPAA came into possession of the e-mails after first being approached by Robert Anderson. Anderson is a former business associate of Justin Bunnell, TorrentSpy's founder.

Anderson allegedly "hacked" into TorrentSpy's e-mail system and rigged it so that "every incoming and outgoing e-mail message would also be copied and forwarded to his anonymous Google e-mail account," records show.

Anderson contacted Dean Garfield, the MPAA's senior legal counsel, in June 2005. Anderson told Garfield that he had an informant who supplied him with the e-mails.

District Judge Florence-Marie Cooper also agreed with the MPAA that TorrentSpy failed to prove that the information obtained by Anderson qualified as trade secrets.

Watchdog Presses ISPs to Clamp Down on Illegal Net Use

The Australian Federation Against Copyright Theft is pressing ahead with its proposal to have internet service providers send warning notices to customers who have been identified as illegal downloaders, and disconnect the services of repeat offenders.

It has the support of the music industry, represented by the Australia Recording Industry Association (ARIA), and Music Industry Piracy Investigations (MIPI).

AFACT says the ISPs are not doing enough to combat the illegal downloading of movies and music, which it says increases ISPs' costs by chewing up bandwidth and robs income from those who sell the content legally.

A report produced last year by web monitoring company Envisional found the per capita rate of television show piracy in Australia was the highest in the world. It said Australians accounted for 15.6 per cent of all online TV piracy.

Adrianne Pecotic, executive director of AFACT, said talks had broken down with the industry body that represents the ISPs, the Internet Industry Association (IIA). AFACT was now asking ISPs individually to implement the proposal, which Ms Pecotic presented at the Australian Telecommunications Summit in Sydney today.

She proposes that AFACT would identify the internet addresses of those suspected of illegal downloading and pass those details on to the ISPs, which would be able to identify the specific customers.

The ISP would then send those customers a letter directing them to an information site "to educate people that this activity is illegal, that it's not anonymous". Repeat offenders would have their access speeds slowed and, ultimately, their internet service disconnected "if they continue to flagrantly engage in illegal activity".

Ms Pecotic said her proposal was reasonable because ISPs already state in their contracts that their customers cannot use their internet connections for illegal activity.

"It's a very simple, reasonable, cost effective, practical thing for them to do," she said.

But in a letter to AFACT, ARIA and MIPI, the IIA said the proposal was problematic and unnecessary.

"The board is concerned that ISPs are not (and should not be placed) in a position to adjudicate on whether or not a person is infringing copyright or to suspend or terminate a service based on an allegation of infringement," it wrote.

The IIA says there are already adequate procedures and remedies available to copyright holders through the courts and the Copyright Act.

"The question of what constitutes 'repeat infringer' is untested, but the considered view of the board is this refers to instances where an Australian court (not an ISP) has found infringement, with the presumption of innocence raised as (an) important procedural step protecting users from arbitrary termination," it wrote.

Further, the IIA was worried the system would set a precedent for areas other than copyright, such as defamation, where ISPs would be forced to police their users.

Ms Pecotic said she was yet to have an ISP commit to AFACT's proposal.

Optus referred all comment requests on the matter to the IIA, while Telstra BigPond's position was similar to that of the IIA.

"While we do not encourage or condone piracy, particularly as we are a legal provider of online music, games and movies content, we do not believe it is up to the ISPs to be judge, jury and executioner in relation to the issue when the content owners have any number of legal avenues to pursue infringements," BigPond said in a statement.

"We are not going to take AFACT's claims against customers at face value."

PacNet Need Not Reveal Downloaders' Names

In a surprise court ruling, a judge has decided that Pacific Internet (PacNet) does not have to reveal names of subscribers who allegedly downloaded pirated versions of the Japanese cartoons.

Anime distributor Odex has been demanding the names of up to 1,000 PacNet downloaders.

No details about the latest ruling were made public.

The Straits Times today reported that PacNet would only say it "respects the rights of intellectual property owners and at the same time, also believes in protecting the privacy of all our subscribers".

Odex has 14 days to lodge an appeal. A company spokesman said it will likely seek this course of action.

This latest ruling has raised eyebrows because two other Internet service providers (ISP) - SingNet and StarHub - were earlier ordered to give up the names of their subscribers accused of similar violations.

Each ruling was given by a different judge.

A StarHub spokesman said that it was "assessing our options...given the different decisions rendered by the court."
However, the deadline for appeal has lapsed for SingNet.

The Straits Times said that District Judge Ernest Lau's decision was based on the fact that he believed Odex was not the right party to make the application.

However, in perhaps a more ominous note for anime downloaders out there, the judge also warned that the right to privacy was no defence for copyright infringement.

Many saw red over Odex's moves to clamp down on downloaders by making them pay. The company justified its demand of payments - which many see as exorbitant - by explaining that these are to cover the expenses of enforcing copyright.

Odex is the distributor of popular anime like Gundam and Inuyasha here.

Its campaign against downloaders in May was Singapore's largest reported crackdown on illegal downloads.

The whole episode started when Odex sent letters to 17 SingNet users accusing them of illegally downloading anime and demanding a settlement of between $3,000 and $5,000.

A court order against StarHub to disclose names of its users followed earlier this month.

Understandably, Odex company director Stephen Sing is the man in the hot seat, and branded by Netizens as the "most hated man in Singapore's anime community".

He is the victim of probably the most vicious online attack here, and has received death and assault threats, including one warning to set his house on fire.

Mr Sing says he has no regrets over the crackdown on pirated anime online, and has reported to police on the the harassment against him.

Asia’s P2P Boom
Janko Roettgers

We all know the numbers by now. Some 50 million U.S. Internet users have used file-sharing platforms. Popular networks like Gnutella/Limewire and eMule together make up for eight to nine million simultaneous users at any given time. And BitTorrent is responsible for 30 to 50 percent of all internet traffic, give or take.

But there is a whole world of P2P services with millions of users out there that most of us have never even heard of. Hundreds of thousands of Japanese Internet users get their media through encrypted and secretive darknets. China is on the forefront of P2P television. And then there is Korea, where file swapping is widespread even after major P2P providers were forced to shut down.

Korea actually played a very early part in the P2P war. The Korean file-sharing network Soribada was founded only a few months after Napster, and the two co-founders fought at least as hard as Shawn Fanning and his team against attempts to shut them down. Soribada finally had to give up in 2005 and convert to a traditional, licensed download store, which completely solved the problem of illegal swapping over night.

Oh, wait, it didn’t. People just abandoned networks like Soribada and instead flocked to online storage providers. Recently this became a matter of politics when the Korean government promised to crack down on file swapping, “including so-called ‘webhard’ services,” as part of a free trade agreement with the U.S. — a move that outraged local activists and probably scared the shit out of LG. The company operates the very successful Korean online storage provider Webhard.com.

Korean file sharing has always been driven by commercial enterprises. That’s completely different from the situation in Japan, where P2P has been dominated by non-commercial, encrypted swapping applications. The most popular one is Winny, which was invented to be a more secure replacement for WinMX. Winny’s development stopped after its inventor got charged for copyright infringement. The program has still up to 450,000 active users at any given time though, while up to 150,000 simultaneous users swap files over the Winny-like Share network.

China is definitely the big dog in terms of P2P in Asia. Taiwan-based enterprises like Kuro and Ezpeer were forced to change their business models under pressure of the music industry, but there are still literally hundreds of sites that facilitate file swapping and downloads based in mainland China. Some of them have a more corporate background, like the Google-funded BitTorrent client maker Xunlei or its competitor QQ. Others are more appealing to the non-profit P2P crowd, like the eMule-based VeryCD that lists 90,000 movies, TV shows and applications for download.

Of course you can’t talk about Chinese P2P without talking about German soccer — or rather the companies that make it available worldwide via P2P . Chinese enterprises like PPStream and Sopcast were streaming video through their P2P infrastructure long before Joost and Babelgum, and Chinese P2P Streaming start-ups are starting to see some cash for their efforts. PPStream secured $10 million in financing this spring, and UUSee got another $20 million in a second round of financing on top of $10 million it raised in late 2005. The investors include DFJ, Sequoia and Highland Capital.

Looks like Sand Hill Road got the message: P2P isn’t just about U.S. college kids swapping MP3s. It’s a world-wide phenomenon, and one of its epicenters is Asia.

Japan's Warp-Speed Ride to Internet Future
Blaine Harden

Americans invented the Internet, but the Japanese are running away with it.

Broadband service here is eight to 30 times as fast as in the United States -- and considerably cheaper. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else, recent studies show.

Accelerating broadband speed in this country -- as well as in South Korea and much of Europe -- is pushing open doors to Internet innovation that are likely to remain closed for years to come in much of the United States.

The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.

Ultra-high-speed applications are being rolled out for low-cost, high-definition teleconferencing, for telemedicine -- which allows urban doctors to diagnose diseases from a distance -- and for advanced telecommuting to help Japan meet its goal of doubling the number of people who work from home by 2010.

"For now and for at least the short term, these applications will be cheaper and probably better in Japan," said Robert Pepper, senior managing director of global technology policy at Cisco Systems, the networking giant.

Japan has surged ahead of the United States on the wings of better wire and more aggressive government regulation, industry analysts say.

The copper wire used to hook up Japanese homes is newer and runs in shorter loops to telephone exchanges than in the United States. This is partly a matter of geography and demographics: Japan is relatively small, highly urbanized and densely populated. But better wire is also a legacy of American bombs, which razed much of urban Japan during World War II and led to a wholesale rewiring of the country.

In 2000, the Japanese government seized its advantage in wire. In sharp contrast to the Bush administration over the same time period, regulators here compelled big phone companies to open up wires to upstart Internet providers.

In short order, broadband exploded. At first, it used the same DSL technology that exists in the United States. But because of the better, shorter wire in Japan, DSL service here is much faster. Ten to 20 times as fast, according to Pepper, one of the world's leading experts on broadband infrastructure.

Indeed, DSL in Japan is often five to 10 times as fast as what is widely offered by U.S. cable providers, generally viewed as the fastest American carriers. (Cable has not been much of a player in Japan.)

Perhaps more important, competition in Japan gave a kick in the pants to Nippon Telegraph and Telephone Corp. (NTT), once a government-controlled enterprise and still Japan's largest phone company. With the help of government subsidies and tax breaks, NTT launched a nationwide build-out of fiber-optic lines to homes, making the lower-capacity copper wires obsolete.

"Obviously, without the competition, we would not have done all this at this pace," said Hideki Ohmichi, NTT's senior manager for public relations.

His company now offers speeds on fiber of up to 100 megabits per second -- 17 times as fast as the top speed generally available from U.S. cable. About 8.8 million Japanese homes have fiber lines -- roughly nine times the number in the United States.

The burgeoning optical fiber system is hurtling Japan into an Internet future that experts say Americans are unlikely to experience for at least several years.

Shoji Matsuya, director of diagnostic pathology at Kanto Medical Center in Tokyo, has tested an NTT telepathology system scheduled for nationwide use next spring.

It allows pathologists -- using high-definition video and remote-controlled microscopes -- to examine tissue samples from patients living in areas without access to major hospitals. Those patients need only find a clinic with the right microscope and an NTT fiber connection.

"Before, we did not have the richness of image detail," Matsuya said, noting that Japan has a severe shortage of pathologists. "With this equipment, I think it is possible to make a definitive remote diagnosis of cancer."

Japan's leap forward, as the United States has lost ground among major industrialized countries in providing high-speed broadband connections, has frustrated many American high-tech innovators.

"The experience of the last seven years shows that sometimes you need a strong federal regulatory framework to ensure that competition happens in a way that is constructive," said Vinton G. Cerf, a vice president at Google.

Japan's lead in speed is worrisome because it will shift Internet innovation away from the United States, warns Cerf, who is widely credited with helping to invent some of the Internet's basic architecture. "Once you have very high speeds, I guarantee that people will figure out things to do with it that they haven't done before," he said.

As a champion of Japanese-style competition through regulation, Cerf supports "net neutrality" legislation now pending in Congress. It would mandate that phone and cable companies treat all online traffic equally, without imposing higher tolls for certain content.

The proposed laws would probably save billions for companies such as Google and Yahoo, but consumer advocates say they would also save money for most home Internet users.

U.S. phone and cable companies, which control about 98 percent of the country's broadband market, strongly oppose the proposed laws, saying they would discourage the huge investments needed to upgrade broadband speed.

Yet the story of how Japan outclassed the United States in the provision of better, cheaper Internet service suggests that forceful government regulation can pay substantial dividends.

The opening of Japan's copper phone lines to DSL competition launched a "virtuous cycle" of ever-increasing speed, said Cisco's Pepper. The cycle began shortly after Japanese politicians -- fretting about an Internet system that in 2000 was slower and more expensive than what existed in the United States -- decided to "unbundle" copper lines.

For just $2 a month, upstart broadband companies were allowed to rent bandwidth on an NTT copper wire connected to a Japanese home. Low rent allowed them to charge low prices to consumers -- as little as $22 a month for a DSL connection faster than almost all U.S. broadband services.

In the United States, a similar kind of competitive access to phone company lines was strongly endorsed by Congress in a 1996 telecommunications law. But the federal push fizzled in 2003 and 2004, when the Federal Communications Commission and a federal court ruled that major companies do not have to share phone or fiber lines with competitors. The Bush administration did not appeal the court ruling.

"The Bush administration largely turned its back on the Internet, so we have just drifted downwards," said Thomas Bleha, a former U.S. diplomat who served in Japan and is writing a history of how that country trumped the United States in broadband.

As the United States drifted, a prominent venture capitalist in Japan pounced on his government's decision to open up the country's copper wire.

Masayoshi Son, head of a company called Softbank, offered broadband that was much cheaper and more than six times as fast as NTT's. He added marketing razzmatazz to the mix, dispatching young people to street corners to give away modems that would connect users to a service called Yahoo BB. (The U.S.-based Yahoo owns about a third of it.) The company's share of DSL business in Japan has exploded in the past five years, from zero to 37 percent. As competition grew, the monthly cost of broadband across Japan fell by about half, as broadband speed jumped 33-fold, according to a recent study.

"Once a customer enjoyed the high speed of DSL, then he or she preferred more speed," said Harumasa Sato, a professor of telecommunication economics at Konan University in Kobe.

The growing addiction to speed, ironically, is returning near-monopoly power in fiber to NTT, which owns and controls most new fiber lines to homes. Growth of new fiber connections exceeded DSL growth two years ago. Fiber is how all of Japan will soon be connected -- for phones, television and nearly all other services.

"NTT is becoming dominant again in the fiber broadband kingdom," Sato said.

That infuriates its competitors. Yahoo BB and others are demanding that the government once again compel NTT to unlock the lines.

In Japan, the regulatory wars over broadband are far from over.

Special correspondent Akiko Yamamoto contributed to this report.

Terms of Telkom Shareholding Sale to Thintana Put Both 'Above the Law'
Ann Crotty

The shareholders' agreement signed by the government when it sold a 30 percent stake in Telkom to the Thintana Communications consortium placed both companies above South Africa's laws, according to a US academic journal.

Thintana Communications was the consortium of US telecommunications group SBC and Telekom Malaysia.

Interviewed in Telecommunications Policy, Jim Myers, described as "SBC's central operative in South Africa between 1994 and 1998", says clauses in the shareholders agreement agreed to in 1997 stipulated that once the Telecommunications Act was in place, neither Telkom nor Thintana would be compelled to follow any legislation that violated the shareholders' agreement.

The Telecommunications Act granted Telkom a five-year period of exclusivity to expand its network and prepare for eventual competition.

Myers said the details of the Telkom shareholders' agreement were never made public because some of its provisions bound the government so stringently and gave Thintana so much control that had they become public, they would have raised a huge outcry.

The powerful position enjoyed by Thintana until 2002 is described at length in the journal, published recently by Elsevier.

The two authors of the article, entitled "Another instance where privatisation trumped liberalisation: the politics of telecommunications reform in South Africa - a ten year perspective", are Willie Currie, a former counsellor of the Independent Communications Authority of SA; and Robert Horwitz, a member of the department of communication at the University of California in San Diego.

The article, which is supported extensively by recent interviews with the key players, describes in chilling detail the forces that shaped telecoms policy in South Africa in the crucial period between 1994 and 2004.

It recounts the manner in which the new democratic government's worthy intentions - to roll out telephone service to the previously disadvantaged and establish an independent regulator to oversee the reform - were thwarted by lack of trust in democratic structures outside of the ANC's immediate control and the ANC's inability to control powerful international players involved in privatisation.

SBC, described as "congenitally litigious", is said to have played a major role in the failure of South Africa's telecoms policy to develop a competitive telephone service.

Under SBC's control Telkom not only failed to meet its roll-out obligations but behaved "as a tax on industry and a drag on economic growth".

SBC had, with a 15.5 percent stake, been a managing shareholder in MTN in the mid-nineties, said Myers, and had a "good understanding of South African politics" when the government put the Telkom stake up for sale.

In an interview with the authors last year, Myers explained that when it became clear that SBC would secure the Telkom stake, "the company temporarily transferred its entire San Antonio [Texas] corporate office legislative team to South Africa to help draft the Telecommunications Act, to make sure the legislation comported with the company's requirements".

Myers told Horwitz and Currie that SBC's strategy was very clear: "Maximise the value of Thintana's investment during Telkom's five-year exclusivity period and then exit quickly."

As a privatised, state-backed monopoly without a forceful regulator, Telkom was in a position to generate hefty returns for Thintana. Horwitz and Currie estimate that the 30 percent stake purchased in 1997 for R5.45 billion was sold in two tranches in 2004, a 14.9 percent stake was sold in June for R6.1 billion and the remaining 15.1 percent was sold in November for R6.6 billion. These figures do not include the huge annual profits and management fees that accrued to SBC over the period.

By contrast, although the authors acknowledge that SBC "did bring management smarts to Telkom", local consumers were left with a hopelessly inefficient and expensive service provider.

Reding Drops a Broadband Bombshell
Sarah Laitner in Brussels and Philip Stafford in London

Britain is sometimes embroiled in bruising battles in Brussels. But it finds itself singled out by the European Union's telecoms chief as a model pupil in the drive to boost broadband competition.

Viviane Reding, the EU media commissioner, this week cited the decision to split the networks and services division of BT of the UK as a potential template for other former state-run telecoms operators.

Her suggestion goes to the heart of a debate on how to spur investment in new ultra-fast broadband networks to meet European business and consumer hunger for bandwidth.

EU broadband subscriptions have risen sharply since 2002. Nearly three in 10 households use the service and prices have fallen faster than the global average. So why suggest splitting companies such as Deutsche Telekom or Telefónica?

In the British case, BT agreed in 2005 with national regulator Ofcom to create an independent unit responsible for giving rivals access to its networks. The division, which BT still owns, is obliged to treat competitors on the same basis as its own services.

The split came after Ofcom felt competition was weak and that the UK was trailing the rest of the EU in broadband adoption. Now, Ofcom says this "functional separation" is a reason behind a doubling of maximum broadband speeds in the UK. Rivals to BT say British broadband subscriptions are approaching the levels of the world-leading Nordic countries.

Many younger telecoms operators in the EU relish the prospect of change. Stefano Parisi, the chief executive of Fastweb of Italy, says: "We fully support Ms Reding's position. More transparency and investment is needed."

Still, EU officials insist that such a forced administrative division of operators would be a last resort if all other attempts to overcome a company's dominant market position had failed. Nevertheless, a number of question marks remain.

First, would a forced split of big operators hinder spending on new ultra-fast broadband networks? Critics say that it could reduce incentives for companies to build infrastructure.

For example, Ms Reding is embroiled in a court case with Berlin over its decision to stop rivals from selling services on Deutsche Telekom's €3bn ($4bn, £2bn) new broadband infrastructure, amid a spat over how big operators guarantee a decent return on investments.

Second, a soon-to-be published European Commission study concedes that the experience of the UK model is "still rather limited".

A third concern is that market conditions vary widely across the EU. While the Italian watchdog is considering splitting Telecom Italia, the paper reveals that French and Dutch regulators question whether "functional separation" would work on their markets.

Big telecoms operators have hit out at Ms Reding's suggestion. Etno, their lobby group, says: "Consumer prices are consistently falling and markets are increasingly competitive. Mandatory functional separation would entail a costly and lengthy reorganisation of major European companies, which is irreversible."

Will this stop Ms Reding, as she seeks to push through the biggest overhaul of the rules governing the EU's €289bn-a-year telecoms rulebook?

The limelight-loving Luxembourger was behind a contentious law to slash the cost of international mobile phone use, a move that enraged big operators.

Now, she must convince her fellow 26 commissioners that her approach is right, before formally launching her plan. EU countries and the European parliament must also back it.

No stranger to controversy, Ms Reding has a remarkably consistent method. The former journalist and ex-member of the European parliament is seen by some in the industry to use a "bomb-dropping" technique. First, she outlines outlandish ideas then waits for the air to clear before returning to the table to get a deal.

The coming months will reveal what effect her approach has on the EU's leading telecoms groups.

Comcast Stock May Soar on Cash Flow: Barron's

Comcast Corp., the largest U.S. cable operator, could see its stock soar nearly 57 percent in the next year due to available cash flows that it can spend on operations, according to the August 27 edition of Baron's.

"What excites me is that this company has so much money to spend on its own future. They will have $4 billion to spend between now and 2009 on operations that offer a very high return," Tom Russo, who manages money at investment fund Gardner Russo & Gardner, told Barron's.

"The potential is staggering and largely ignored in the stock." Russo's firm owns 10 million Comcast shares, the newspaper said.

On Friday, Comcast's shares closed at $25.48 on the Nasdaq Composite Index. The stock is trading down about 15.6 percent from its 52-week high of $30.18 reached January 18.

According to Barron's, the stock could climb to as high as $40 within the next 12 months.

Philadelphia-based Comcast is leading the charge by U.S. cable operators to win subscribers from telephone companies by aggressively marketing its bundled television, high-speed Internet and phone services.

Last month, Chief Executive Brian Roberts said he anticipates cable growth accelerating over the second half of 2007.

(Reporting by Justin Grant)

ISPs Eye P2P as Big Money Spinner

Peer-to-peer expected to be $28bn industry over the next five years
Robert Jaques

The worldwide market for peer-to-peer and file sharing services is expected to generate nearly $28bn in revenues for carriers and ISPs over the next five years, according to industry analysts.

A market research study released this week by Insight Research found that an ever increasing number of mobile and wireline service providers are offering legitimate file-sharing and downloading services geared to the requirements of end-users.

Peer-to-peer and file sharing services are widely available on fixed-line and mobile networks, but are being exploited more in some regions than others.

Carrier revenues from the use of peer-to-peer and file sharing services in Asia is nearly double that of North American, for example.

Insight Research's market analysis study noted that peer-to-peer and file sharing services are part of a worldwide push by carriers to create new IP-enabled services for consumers and business users.

Consumers of mobile and fixed line telecoms services are adopting peer-to-peer and file sharing services along with other IP-enabled services such as video telephony, fixed-mobile convergence, presence, streaming and location-based services.

"Peer-to-peer and file sharing services have moved into the mainstream and are now well beyond the early days when a few of the early service providers ended up in litigation," said Robert Rosenberg, president of Insight Research.

"Peering and file sharing have now been embraced by fixed-line and wireless operators, and many of the intellectual property issues that led to legal fights have been resolved.

"Media and applications such as ring-tones, games, music and large-file videos are taking off, and we see this market continuing to grow as consumers increasingly rely on the utility of these applications."

P2P Not Suited for Distributing Broadcast Video
Jak Boumans

Recently UK ISPs complained to the BBC that it put the entire logistic and financial burden on the ISPs with regard to the distribution of video. BBC has introduced its own software iPlayer with a plug-in for the users. The BBC software uses partly peer-2-peer technology. BBC saves on hosting and data costs, but the ISPs get higher costs. Also in the Netherlands problems are showing up between broadcasters and ISPs; with the live streams of the French cycle event Tour de France many ISPs was forced to its limits. Tonie van Ringelenstein, a Dutch freelance journalist, writing amongst others for Emerce, made a tour around the experts and discovered that a new cooperation between providers and broadcasters is upcoming.

Some time ago there was already talk of using the new P2P software Tribler for distributing broadcast material. A trial of the Dutch public broadcast companies and two universities to relay the content of the popular broadcast site Missed the program, has not started yet due to legal complications.

Now a new initiative comes from providers active in the internet exchange Ams-IX. Providers, public broadcast companies and the commercial TV company RTL Netherlands are talking to each other in order to reach an open protocol, so that the video distribution through internet will become cheaper and more reliable. The first tests are planned for this autumn. In this system the most popular content items of the broadcast companies will be put on the servers of the providers automatically; the providers will be able to distribute them through their own network. It saves data traffic for the ISPs and will put less strain on the servers of the broadcasters.

Presently there is already some experience with the system as the public broadcast companies use it amongst themselves. A subgroup of the AMS-IX video working party consisting of public broadcast companies, RTL, XS4all and Solcon works on the protocol. It will be an open protocol for all video content providers, providing them with an automatic caching of the most interesting video content. In this way the content is brought as close to the user as possible. Popular videos are counted by the ISP and as soon as a maximum is reached the content file will be automatically cached for further distribution.

The situation in the Netherlands is favourable for the cooperation between the providers and the broadcast companies given the success of AMS-IX, the on-demand video sites of the Public broadcast companies and RTL and the high amount of broadband connections in the Netherlands. Besides there is much video content on hand in the Netherlands and the demand is great.

The activities take place within a trial. The business side of business models, financial clearance among the parties and legal complications will be ignored during the trial. Basis for the trial is to transport content to the end-user in a proper way, efficiently and cheaply.

AT&T Pushes New TV Service

Company, Blumenthal at odds over U-verse
Pam Dawkins

While a federal district court and state regulators contemplate rulings about the nature of AT&T's U-verse television service, the company continues building up the infrastructure and customer base.

AT&T plans to spend about $336 million on infrastructure improvements in the state as part of its three-year plan to roll out U-verse nationally.

It started the service in Connecticut in parts of nine towns in December; today it is available in parts of 35 cities and towns, including Bridgeport, Danbury, Derby, Milford, New Haven, Westport and West Haven.

AT&T won't reveal specific numbers, but says it has thousands of subscribers already. Its marketing efforts include a doublewide trailer with two living rooms, where customers can check out the service. That trailer is parked at the Best Buy parking lot in Danbury for another month.

"The main driver behind U-verse is the empowerment of the Web "? U-verse is about bringing that Web empowerment to your TV," Chris Traggio, AT&T's vice president for consumer operations, said during a media tour of the video hub office.

This is where AT&T acquires Connecticut and New York City channels -- sent digitally through fiber optics -- and merges them with national content, Rob Frey, the facility manager, said.

Inside, gray and black bookcase-like shapes line up in rows, holding black boxes sporting a variety of wires and lights; bundles of yellow fiber-optic cable are everywhere.

Everything has a redundancy, Frey said, so service isn't interrupted. This includes the power supply; huge batteries provide backup if the primary generator on site fails.

The local signal moves down an aisle of machinery, which processes it into an Internet Protocol stream. Technicians can also change the color or volume in a program. The process is mirrored on the other side of the room for national programming.

Both sets move via fiber optics to neighborhood nodes, but once there the content moves to individual sites via the copper wire that also carries phone service, said Chad Townes, AT&T's vice president and general manager for Connecticut.

The need to move through sites with fiber optics is why it's not available in the whole state at once, he said. "Every day, we're adding more fiber."

Part of the installation -- the company has 100 technicians now, with more going through six-week training courses continuously -- includes rewiring the house if the wires are too old.

U-verse is billed as competition to cable television, but Attorney General Richard Blumenthal maintains the service is cable television, and so AT&T should be regulated like a cable company, which includes requesting a franchise from the state Department of Public Utility Control.

One worry, Blumenthal has said, is that AT&T will "cherry pick" its demographic, bringing U-verse to wealthier communities and leaving poorer areas behind. Also, unless held to franchise rules, the company won't offer public access television; AT&T, however, has promised to do this.

In June 2006, the DPUC ruled AT&T's Internet Protocol Television is not subject to cable franchising requirements. Blumenthal sued in U.S. District Court for a ruling that it is and in July 2007 the court overturned the DPUC's decision.

Now AT&T has moved for a reconsideration, while Blumenthal has filed an emergency request with the DPUC to force AT&T to apply for a franchise.

Blumenthal puts AT&T's chances at a reconsideration at "virtually zero," calling it a "futile attempt" at delaying the inevitable.

"Whatever the rules for cable franchises "? they should apply to IPTV," he said Thursday. "It's the law," and what the federal courts have decided.

"We're waiting until court action is finalized," because it would be imprudent to take action until then, DPUC spokeswoman Beryl Lyons said Thursday.

The DPUC's cable regulating authority is minimal and includes ensuring cable companies meet public, education and government access requirements.

"Cable competition has been permitted since 1984," Lyons said. But "the investment is enormous. The risk was very great," so no one wanted to start up service.

AT&T, however, already has a fiber-optic infrastructure.

In its most recent session, the state legislature passed, and Gov. M. Jodi Rell signed, a bill to prompt competition wherever possible. In part, Lyons said, as of Oct. 1, the bill narrows the DPUC's jurisdiction once competition -- when there's at least one non-cable company customer in an existing franchise -- is established. The DPUC, however, remains the franchising authority and continues to oversee access channels and customer service.

Townes declined to comment Thursday about the court case, but said, "There's a huge difference between the two technologies."

Cable, he said, is a one-way broadcast of content; U-verse is two-way communication.

The cable box, he said, brings in a signal with all the offerings. The U-verse set-top box tells the hub what programming to send. This frees up bandwidth for more channels and other offerings.

The company has four packages, which include high-definition television channels. Prices for bundled U-verse and Internet service -- customers can buy the television service alone but the high-speed Internet service is embedded in the signal -- range from $59 to $129 a month, depending on Internet speed.

The basic package has more than 100 channels and comes with one receiver. Other packages come with three receivers, including one with a digital video recorder, which can record up to four channels at once.

"We don't ever expect to replace the computer," Townes said, but U-verse will soon be capable of showing photos from the Web, stock quotes and movie times, and even send messages to appear on the screen from an off-site computer. Today users can program their DVR from an off-site computer or cell phone.

Wallingford resident Leslie Spiars, an AT&T employee, has a projection television hooked up to U-verse, as well as a 1988-era model in the basement.

"We're kind of into technology," said Spiars; the company used her home set-up as a demonstration for reporters Thursday.

While AT&T is looking at U-verse as a way to bring new services to existing customers, it is also planning to take people away from the cable companies. According to Townes and other executives, their service is about 20 to 30 percent cheaper than comparable cable television prices.

Blumenthal, meanwhile, said even if the court and DPUC rule against AT&T, he doesn't expect the company will pull U-verse out of Connecticut, because there's "too much money and opportunity (here)."

In Europe, a Push by Phone Companies Into TV
Kevin J. O’Brien

Several European phone companies plan to announce significant expansions of Internet protocol television, or IPTV, this week, led by Deutsche Telekom, which is spending 3 billion euros and has linked about 4 in 10 German households to broadband TV.

The moves will put Europe, which some analysts say already is the leader in Internet TV, further ahead of the United States and Asia. But despite the flurry of worldwide interest in digital video, skeptics say it is not clear that IPTV has a future as a stand-alone business for telephone companies.

With IPTV, subscribers pay a monthly fee of 30 to 60 euros, or $41 to $82, to receive digital broadcasts over the phone companies’ networks, to be watched on televisions or computers. These are part of “triple play” packages that also typically include flat-rate Internet access and domestic fixed-line voice calls. The TV lineup usually includes a standard set of 50 broadcast channels as well as 60 or more premium channels, some not available through other companies.

“IPTV’s decisive advantage is its ability to link programming with interactive services,” said Timotheus Höttges, a Deutsche Telekom board member with responsibility for IPTV. “Consumer viewing habits as a result are going to fundamentally change.”

Companies like Deutsche Telekom, Telecom Italia and Vodafone are using the Internationale Funkausstellung, the Continent’s largest consumer electronics convention, to introduce their IPTV expansions.

More than 200,000 people are expected over the five days of the convention, which opens Friday in Berlin.

“Europe is now the most aggressive market for IPTV,” said Steve Rago, an analyst for iSuppli, a research firm in Scottsdale, Ariz., that covers the electronics industry. “Even countries like Lithuania and Slovakia are introducing IPTV.”

About half of the IPTV consumers in Western Europe are in France, according to the consulting firm International Data Corporation, which says there are 2.3 million paid IPTV subscribers in Europe, less than 5 percent of households.

International Data expects the service to have won over about 10 percent of households by 2011.

ISuppli estimates that phone companies will spend $9 billion this year — $3 billion in Europe — building video-ready broadband networks. The phone companies, faced with dwindling voice traffic, are looking to IPTV to fill the gap.

“I can’t think of a single country in Europe where operators are not introducing IPTV,” said Tiaan Schutte, vice president for multimedia at the French company Alcatel-Lucent, which makes IPTV components. “The marketplace is expected to grow aggressively over the next decade.”

Some experts, however, question whether telephone companies will ever reap the same payoff as equipment makers from IPTV, which faces a challenge luring TV viewers from established broadcasters that use the airwaves, cable or satellites. The technology for IPTV, introduced in Europe in 2001 by the Italian company FastWeb, began appearing widely in 2004. Among the makers of IPTV set-top boxes are Cisco, Thomson, Philips, Motorola and Alcatel-Lucent.

In France, four phone companies — France Télécom, Free (a unit of Iliad), Neuf Cegetel and Alice (a unit of Telecom Italia) — and two resellers, Darty of France and Tele2 of Sweden, are competing for IPTV business. A unit of Bouygues, Bouygues Telecom, is also planning IPTV service.

France became Europe’s IPTV leader because the country lacked dominant satellite and cable broadcasters, said Jill Finger Gibson, International Data’s research director in London.

Jean-Christophe Dessange, leader of European IPTV development at Cisco, which sells IPTV equipment, said IPTV had been successful in France because broadcasters and phone companies there “didn’t each demand too big a share of the pie.” He added: “They realized they both had a self-interest in making IPTV work, namely to help them each retain customers and possibly add new ones.”

The French broadcaster Canal Plus, however, is more integrated, controlling the billing of IPTV customers and deriving revenue from its standard package of about 50 channels. Most French triple-play packages of TV, Internet and telephone service begin at 30 euros a month.

In Germany, where over-the-air digital broadcasts and cable service are available in most households, about 40,000 people subscribe to IPTV, according to GFU, organizer of the convention. Deutsche Telekom’s IPTV network has been connected to 15 million households. The technology also faces potential political hurdles. The European Commission is suing the German government, which owns 31 percent of Deutsche Telekom, for keeping competitors off Deutsche Telekom’s new broadband network.

In Britain, the satellite broadcaster BSkyB and the cable monopoly Virgin Media dominate the pay TV market. An IPTV service from the communications company BT Group, BT Vision, began in December.

“It’s still very much an open question whether IPTV will catch on,” said James Crawshaw, an analyst in London at Heavy Reading, a research firm tracking IPTV. “Operators were very enthusiastic a couple years ago. Then they started to question what the return was. None have been able to create a stand-alone business from IPTV.”

Mr. Crawshaw and other analysts said French companies were not generating significant profit from IPTV, if they have made any at all, but were using the technology to retain or attract new Internet and phone customers.

But many hope to turn that around. Arcor, a unit of Vodafone that is Germany’s second-largest fixed-line network, spent 278 million euros in the fiscal year that ended March 31 on network improvements, mostly to upgrade its broadband network. The company plans to introduce Arcor TV in Germany’s 12 largest cities this fall and to expand to 250 cities by the middle of 2008.

The triple-play service will include 50 free and 60 pay channels.

Bernd Wirnitzer, Arcor’s IPTV director, said the prevailing skepticism surrounding IPTV’s commercial potential, like the initial euphoria that accompanied its introduction a few years ago, was exaggerated.

“The technology will allow us to combine voice, Internet and TV in ways that aren’t possible when you buy them from separate providers,” Mr. Wirnitzer said. “And customers will also have the benefit of paying just a single bill instead of three.”

To be successful, phone companies will have to give consumers a reason to change viewing habits, said Carsten Rossenhövel, managing director of the European Advanced Networking Test Center, a company in Berlin that tests IPTV components for phone companies and equipment makers.

“From a technical standpoint, these systems are ready to go,” Mr. Rossenhövel said. “The real challenge for service providers will be to convince consumers to switch to IPTV.”

Vint Cerf, aka the Godfather of the Net, Predicts the End of TV as We Know it

Web guru foresees download revolution
Bobbie Johnson

Thirty years ago he helped create a technology that has revolutionised millions of lives around the world. But yesterday the man known as the "godfather of the net" laid out his vision of where our online future might be, including a time when we download entire TV series in seconds - and even surf the web from Mars.

Talking at the MediaGuardian Edinburgh International Television Festival, Vint Cerf - one of the handful of researchers who helped build the internet in the 1970s - said that the television industry would change rapidly as it approached its "iPod moment".
The 64-year-old, who is now a vice-president of the web giant Google and chairman of the organisation that administrates the internet, told an audience of media moguls that TV was rapidly approaching the same kind of crunch moment that the music industry faced with the arrival of the MP3 player.

"85% of all video we watch is pre-recorded, so you can set your system to download it all the time," he said. "You're still going to need live television for certain things - like news, sporting events and emergencies - but increasingly it is going to be almost like the iPod, where you download content to look at later."

Dr Cerf, who helped build the internet while working as a researcher at Stanford University in California, used the festival's Alternative McTaggart Lecture to explain to television executives how the internet's influence was radically altering their businesses and how it was imperative for them to view this as a golden opportunity to be exploited instead of a threat to their survival. The arrival of internet television has long been predicted, although it has succeeded in limited ways so far. But the popularity of websites such as YouTube - the video sharing service bought by Google in 2005 for $1.65bn (£800m) - has encouraged many in the TV industry to try and use the internet more profitably. Last month the BBC launched its free iPlayer download service, and digital video recorders such as Sky Plus and Freeview Playback allow viewers to instantly pause and record live television.

Dr Cerf predicted that these developments would continue, and that we would soon be watching the majority of our television through the internet - a revolution that could herald the death of the traditional broadcast TV channel in favour of new interactive services.

"In Japan you can already download an hour's worth of video in 16 seconds," he said. "And we're starting to see ways of mixing information together ... imagine if you could pause a TV programme and use your mouse to click on different items on the screen and find out more about them."

Some critics, including a number of leading internet service providers, have warned that the increase in video on the web could eventually bring down the internet. They are concerned that millions of people downloading at the same time using services such as iPlayer could overwhelm the network.

Dr Cerf rejected these claims as "scare tactics". "It's an understandable worry when they see huge amounts of information being moved around online," he said. But some pundits had predicted 20 years ago that the net would collapse when people started using it en masse, he added. "In the intervening 30 years it's increased a million times over ... We're far from exhausting the capacity."

Dr Cerf also revealed that he has been working on future developments for the internet, taking it beyond the confines of planet Earth. With other researchers he has been developing systems for using the net to communicate and control space vehicles, including interplanetary landers sent to explore the surface of Mars.

"Up until now we've been using the so-called Deep Space Network to communicate across space with radio signals. What my colleagues and I would like to do is use a version of internet," he said. He said the problems encountered by the project - such as having to wait 40 minutes for a response from a space vehicle 235m miles away - were proving awkward, but predicted the system could eventually be used to enhance internet communications. "I want more internet," he said. "I want every one of the 6 billion people on the planet to be able to connect to the internet - I think they will add things to it that will really benefit us all."

Congestion Warning Needed for the Net

Isn't it time we had proper alerts about technology problems, asks columnist Bill Thompson?

As a radio addict I often find myself with 5 Live burbling away in the background as I sit at my keyboard in the early morning, taking advantage of that first caffeine hit of the day to get some serious work done.

Every now and then the traffic report comes on, and I feel the smugness that comes from knowing I don't have to negotiate the M6 or fight my way across the roundabouts of Slough in order to get to work.

Yet from time to time I hit my own traffic jam, one that never makes it onto the drive time news.

A flashing green light on the cable modem means I'm cut off from the internet, unable even to check the network status page on my ISPs website.

Or I'll sit there for hours with no incoming e-mails because my provider has had yet another server outage, without even the odd spam message to reassure me that I'm still in contact with the wider world.

Polite messages

Sometimes services I rely on will simply be unavailable, and I'll be confronted with the Bloglines plumber, a polite message telling me I can't Twitter right now, or just an empty screen or stalled application.

Most of the time these problems last an hour or two, and their impact is relatively limited, but over the past few weeks some more significant network failures have left millions of people wondering whether they should depend quite so much on the network and its services.

On 16 August anyone who relied on using Skype to make low-cost phone calls over the internet found that their service was inaccessible, as the peer to peer network which moves data around fell over. It took a few days for normal service to be resumed.

And last weekend many users of Microsoft Windows Vista and XP discovered that their legally purchased and licensed copies of the operating system were flagged as pirated when the Windows Genuine Advantage servers stopped working properly.

In this case the "advantage" seems to have gone to those using cracked and pirated software, who didn't have to bother trying to contact the unavailable servers.

While these two were certainly the highest profile problems, they weren't the only ones.

Gamers were hit by unforeseen side-effects of the SecuROM copy protection scheme bundled with the PC version of the Bioshock game when the activation server went down, while over a million jobseekers who uploaded their CVs to the Monster job site were belatedly told that it had been hacked into and their personal information might have been stolen.

Inherently flawed

Just to add to the sense of collapse there have been reports that the iPhone has been cracked so that it can work on any available GSM network, that the Keeloq cipher used for many car keys has been broken, and that the Lithium-ion battery design that hundreds of millions of us rely on to keep our phones and laptops going is inherently flawed and needs a radical rethink.

The IT failures aren't happening just because it's summer and all the good systems administrators are on holiday - problems like this happen all the time, but we tend not to hear much about them.

Back in the Spring Microsoft announced that it was extending the warranty period on its Xbox 360 games console to three years after so many suffered complete hardware failure, one of many computing issues that affect far more people than the broken traffic lights on the A427.

Technology correspondents like Bobbie Johnson at The Guardian do a great job of getting coverage in the news pages rather than having these stories consigned to the cul de sac of the IT supplements.

Traffic reports

And of course, the key stories can be read about here on the BBC News website's Technology pages. But even the best news story doesn't have the useful detail that drivers have come to expect from traffic reports.

What we need isn't an interview with Skype's Niklas Zennstroem defending peer to peer networks but a report on which servers are down, when we can expect to see normal service resumed and what the alternatives are.

If drivers can be told about a diversion around the A14, why can't the network users be offered an alternative VOIP service for the day?

There is an online Internet Traffic Report that monitors network speeds and response times for major backbone networks, and this might indicate why US websites are slow one morning, but it doesn't go far enough for most of us.

And of course if your ISP is one of those affected, then being told to look online for information and advice is adding insult to injury.

For millions of people in the UK and the rest of the western industrialised world access to the internet is as important as a good route to work, but this is simply not reflected in the way news outlets deal with the topic.

It's time for some relevant, local and timely reporting on the state of the network and tech issues that might affect home and business computing.

And perhaps radio, a medium that is enjoying a rebirth in the network age with more than forty-five million people in the UK listening at least once a week, would be the medium to provide what we need.

Power Wi-Fi Using the Sun, Says Startup

Solis Energy backup design good for seven days.
John E. Dunn

A small US startup has announced technology for running Wi-Fi routers in remote places using only the power of the sun.

Among the first round of products from Solis Energy is the Solar Power Plant, touted as being capable of supplying 12, 24 and 48 Volts DC for use in stand-alone applications such as surveillance cameras and outdoor Wi-Fi.

Comprising a large solar panel connected to a generator unit, the system claims to be able to power such devices for up to seven days without sunlight to recharge its batteries, hence the out-sized panels. In normal use, power stored during the day keeps the system running at night.

The company also has a separate "tap adaptor" that can be used to feed 120 volts of AC power to Wi-Fi, Wimax and other outdoor systems from ordinary street lights. A third product, the Outdoor UPS, can be used to provide solar-generated battery backup for critical infrastructure and municipal Wi-Fi.

"Our products provide continuous, reliable outdoor power generation, connectivity and emergency secondary power back-up, anywhere it's needed, including remote locations that don't have power," said Solis CEO and founder Robert Reynolds.

"Whether on-grid or off-grid, our products are easy to install, requiring no special expertise, and they give our customers the ability to take control of their outdoor power," he said.

The company hopes that apart from the benefit of being able to cut power consumption, the technology will encourage organizations to site Wi-Fi in places they might otherwise not consider, such as away from mains power.

The issue of power has always been a problem for wireless technology. Even though the signal can, in theory, go anywhere, in practice the lack of available - or affordable - power can often stymie installation. Solis Energy's new products suggest this limitation could soon be a thing of the past.

Solar-powered Wi-Fi appears to be an emerging technology with market legs. In June, a 400-site solar-powered network was established in Minneapolis in the US. Not long after, Paris announced almost identical plans.

Chicago Scraps Plans for Wi-Fi Network

An ambitious plan to blanket the city with wireless broadband Internet will be shelved because it is too costly and too few residents would use it, Chicago officials said Tuesday.

"We realized — after much consideration — that we needed to reevaluate our approach to provide universal and affordable access to high speed Internet as part of the city's broader digital inclusion efforts," Chicago's chief information officer, Hardik Bhatt, said in a statement.

The plan to blanket Chicago's 228 square miles with wireless Internet access was announced early last year when Chicago leaders said they hoped to become one of the largest cities to offer all-over access to the Web.

Instead, the city said its negotiations with private-sector partners, including EarthLink Inc., have stalled because any citywide Wi-Fi would require massive public financing. The city had hoped to provide only infrastructure for the network.

Tuesday's announcement makes Chicago the latest in a string of municipalities to encounter troubles with their municipal broadband initiatives because of ballooning budgets and dwindling usage that's led to scant revenue generated by the projects. About 175 U.S. cities or regions have citywide or partial systems.

"But given the rapid pace of changing technology, in just two short years, the marketplace has altered significantly," Bhatt said.

Atlanta-based EarthLink, which had been negotiating with Chicago about the municipal network, has said it was studying the performance of its existing municipal wireless Internet networks before deciding how to move forward with similar networks elsewhere.

"We're seeing this evolve as we learn more about these networks, and the city needs to think about this again from its own business perspective," Tom Hulsebosch, a vice president of EarthLink's municipal sales, told the Chicago Tribune.

Meanwhile, Chicago will be among the first three cities nationwide to have access to a new high-speed wireless network that's part of an emerging technology called WiMax.

Sprint Nextel Corp. announced plans this spring to offer wireless Internet speeds that match DSL and cable TV modems.

WiMax is derived from the same technology as Wi-Fi. Unlike Wi-Fi, which provides wireless Internet access over a several-hundred-foot range, a WiMax signal can blanket a much wider area.

San Francisco Citywide Wi-Fi Plan Fizzles as Provider Backs Off
Robert Selna

Mayor Gavin Newsom's high-profile effort to blanket San Francisco with a free wireless Internet network died Wednesday when provider EarthLink backed out of a proposed contract with the city.

The contract, which was three years in the making, had run into snags with the Board of Supervisors, but ultimately it was undone when Atlanta-based EarthLink announced Tuesday that it no longer believed providing citywide Wi-Fi was economically viable for the company.

Newsom blamed the Board of Supervisors for not acting quickly enough to approve the contract that he said was the best deal any big city had negotiated.

"I'm disappointed because we had a chance to get it done, and it didn't happen," Newsom said. "The board delayed it, and now EarthLink could not be more pleased."

Newsom said he did not see any benefit in the deal collapsing even though EarthLink appears to be in financial straits and has an uncertain future.

The company announced Tuesday that it will slash 900 jobs - about half its workforce - and close offices in San Francisco and several other cities as a result of stiff competition from other Internet service providers.

"EarthLink would have been legally obligated to fulfill its promises to San Francisco, and we would have had a functioning Wi-Fi system by now," Newsom said.

EarthLink spokesman Jerry Grasso said that EarthLink was willing to work with San Francisco but had decided that it "was not willing to work in the business model where EarthLink fronts all the money to build, own and operate the network."

Supervisor Ross Mirkarimi said that Newsom should be "relieved" that the contract was not finalized and defended the board, saying that it had saved the city from being stuck with a questionable network and company.

"The mayor should be extremely thankful that the board was so investigative and thorough in its review," Mirkarimi said. "EarthLink's meltdown confirms our concerns that the risks outweighed the benefits."

In January, the city agreed to a deal in which EarthLink would have paid the city $2 million for the right to build, install and run a free Wi-Fi network and to partner with Google to provide Internet service. People could have paid $20 per month for a faster connection.

But the proposed contract stalled at the Board of Supervisors, whose approval was needed for the transaction to go forward.

Board of Supervisors President Aaron Peskin proposed changes to the contract that would have increased the minimum connection speed of the free service, require additional privacy protections and reduce the duration of the contract from 16 to eight years.

The board had expected a response to those changes from EarthLink soon.

The city started negotiating the Wi-Fi agreement when EarthLink was under the leadership of Chief Executive Garry Betty. Betty, who died earlier this year after a battle with cancer, saw municipal Wi-Fi as a way to free EarthLink from the cost of using other companies' networks.

Rolla Huff, who became the company's CEO in June, said in recent months that the company was re-evaluating its approach to providing Wi-Fi in cities because the practice was not providing an acceptable rate of return.

EarthLink's nascent municipal wireless projects in Philadelphia and Anaheim so far have not produced expected profits.

On Aug. 3, Newsom and Peskin jointly submitted a last-minute ballot measure for the November election that would allow voters to say whether they support establishing free, wireless Internet access in San Francisco.

The measure would not be legally enforceable but was designed to rally public support for the proposal.

Peskin was on vacation and not available for comment Wednesday.

Newsom said the public response to the measure will help the city move forward with a new plan.

"We think a public-private partnership is the way to go, but we're looking at new ways to do it. ... We will benefit from the lessons we've learned so far and from what other cities are doing," Newsom said.

ISPs to Rural America: Live with Dial-Up
Robert Mitchell

You can't get there from here. That old New England saw is an apt metaphor for the state of high-speed rural broadband. While many telecommunications carriers are posting record profits this year, millions of U.S. homes and businesses still have no access to broadband — and that's no coincidence.

The return on equity that Wall Street demands from players in today's largely unregulated telecommunications business all but requires carriers to abandon rural America.

As population density drops outside of metropolitan areas, it's impossible for telecommunications companies or cable service providers to justify the tens to hundreds of thousands of dollars per mile it can cost to bring fiber to every rural community, let alone every home. The result: Today, just 17% of rural U.S. households subscribe to broadband service, according to the Government Accountability Office. And a recent report from the Organisation for Economic Co-operation and Development says the U.S. dropped from fourth in the world in broadband penetration in 2001 to 15th place in 2006.

Communications infrastructure is widely seen as the biggest driver of economic growth, yet 21% of Americans — the nearly 60 million people who live in rural areas — are often underserved.

Kim Rossey is one of them. Soon after moving to Gilsum, N.H. (population 811), Rossey learned that he couldn't get broadband to support his Web programming business, TooCoolWebs. DSL wasn't available, and the local cable service provider wasn't interested in extending the cabling for its broadband service the three-tenths of a mile required to reach Rossey's house — even if he paid the full $7,000 cost.

Rossey ended up signing a two-year, $450-per-month contract for a T1 line that delivers 1.44Mbit/sec. of bandwidth. He pays 10 times more than the cable provider would have charged and receives one quarter of the bandwidth.

Limited options for high-speed Internet connectivity are stifling bigger rural companies too. Earlier this year, a $1 billion-plus e-commerce business was left scrambling for answers after Verizon announced that it was selling its rural telecommunications business in New England to the much smaller, less well-capitalized FairPoint Communications.

"These guys were freaking out because the only network they've been able to have up there is an [asynchronous transfer mode] network, and it's going away when Verizon leaves," says an analyst who consulted with the company and asked not to be identified. "They may have to move [to another state]."

The Internet is becoming the road to the workplace. The number of U.S. home-office households is expected to grow from 35.7 million today to 38.3 million in 2011, according to IDC. But rural workers without broadband could be shut out of New Economy jobs.

Alpine Access hires its workforce of 7,500 home-based call center agents over the Internet, and broadband is the price of admission. "Access through our Web site is the only way you can become an employee here," says Rick Owens, vice president of technology. "Some type of broadband service is necessary." Dial-up won't cut it because the applet that connects employees to Alpine Access systems requires a high-speed connection.

Rural areas need broadband. But deregulation has freed carriers from any real obligation to offer it. The market will never provide universal broadband access without regulation or subsidies, but the U.S. lacks both a coherent policy and the political will to address the issue. Even as the telephony infrastructure itself is absorbed into the Internet, some policy-makers still fail to view broadband as the new critical infrastructure.

Rossey remains incredulous about his experience. "If you can bring electricity to a house, we should be able to bring Internet access," he says.

You'd think so. At this point, however, it's probably too late to go back to the future.
http://computerworld.com/action/arti...c= hm_ts_head

Internet Bandwidth to Become a Global Currency
Vidura Panditaratne

Internet bandwidth could become a global currency under a proposed model for the future of e-commerce that exploits a novel peer-to-peer video sharing application designed by a trans-Atlantic team of computer scientists.

Researchers from Delft University of Technology and Vrije Universiteit, Amsterdam and Harvard's School of Engineering and Applied Sciences are using this application to explore a next-generation model for safe and legal electronic commerce that uses Internet bandwidth as a global currency.

The application, available for free download at http://TV.seas.harvard.edu, is an enhanced version of a program called Tribler, originally created by the Dutch collaborators to study video file sharing.

"Successful peer-to-peer systems rely on designing rules that promote fair sharing of resources amongst users. Thus, they are both efficient and powerful computational and economic systems," David Parkes, John L. Loeb Associate Professor of the Natural Sciences at Harvard said. "Peer-to-peer has received a bad rap, however, because of its frequent association with illegal music or software downloads."

The researchers were inspired to use a version of the Tribler video sharing software as a model for an e-commerce system because of such flexibility, speed, and reliability.

"Our platform will provide fast downloads by ensuring sufficient uploads," explains Johan Pouwelse, an assistant professor at Delft University of Technology and the technical director of Tribler. "The next generation of peer-to-peer systems will provide an ideal marketplace not just for content, but for bandwidth in general."

The researchers envision an e-commerce model that connects users to a single global market, without any controlling company, network, or bank with bandwidth as the first true Internet "currency" for such a market.

They are proposing earn-and-spend market model, where the more a user uploads now and the higher the quality of the contributions, the more she would be able to download later and the faster the download speed.

The enhanced Tribler goes beyond traditional P2P applications such as BitTorrent by implementing proper regulation in a decentralized environment, which the researchers concede is the greatest challenge to any peer-to-peer backed e-commerce system.

Another idea the researchers believe has enormous but untapped potential is the combination of social network technology with peer-to-peer systems.

"In the case of sharing and playing video, our network-based system already allows a group of 'friends' to pool their collective upload 'reserve' to slash download times. For Internet-based television this means a true instant, on-demand video experience," Pouwelse explained.

To monitor the virtual economy, Parkes and Pouwelse plan to creating a "web of trust," or a network between friends used to evaluate the trustworthiness of fellow users and aimed at preventing content theft, counterfeiting, and cyber attacks.

The enhanced version of the Tribler software accomplishes this to an extent by enabling users to "gossip" or report on the behavior of other peers.

The eventual goal of the research is to find a way to create accurate personal assessments or trust metrics as a form of internal regulation.

"This idea is not new, but previous implementations have been costly and are dependent on a company and/or website being the enforcer. Addressing the 'trust issue' within open peer-to-peer technology could lead to future online economies that are legal, dynamic and scaleable, have very low start-up costs, and minimal downtime," says Parkes.

By studying user behavior within an operational "Internet currency" system, with a particular focus on understanding how and why attacks, fraud, and abuse occur and how trust can be established and maintained, the researchers imagine future improvements to everything from on-demand television to online auctions to open content encyclopedias.

BitTorrent-Compatible Product Wins Award

The Netgear Digital Entertainer HD won the 'Kickass' product award by Maximum PC and will be featured in an upcoming issue. The Digital Entertainer HD is a souped-up Tivo DVR. It's an interface between an HD display and a home media network that streams data from different computers and devices at home, including Bit Torrent nodes, to the monitor.

The product streams a wide range of data, including HD videos at up to 1080p resolution, music, Internet radio and digital photos. Other features include automatic digital media search and library management.

We've covered earlier home entertainment incorporating P2P such as the Patoh P2P network drive, LamaBox, and MuViBOXX from Veritouch.

Videohybrid 3.0: I Can’t Believe This Hasn’t Been Banned Yet
Duncan Riley

Videohybrid, a site we first linked to in April as part of a broader post on online video piracy, has relaunched with a new version that is just asking for trouble.

Videohybrid 3.0 marries Q&A functionality with social voting. Users are now able to submit movies, and TV shows they are looking for online, other users who would like to see that video as well vote for the request. Digg style the top requests rise to the top of the list.

Users who respond to video requests earn points that go towards an overall ranking system. Videos are now exclusively embedded on site; unlike Bit Torrent and other services that require downloads Videohybrid is a one stop shop where pirated video can be played immediately on the same page, YouTube style, complete with user commenting and related features. Videohybrid doesn’t offer embedding code for the videos to be displayed elsewhere; from what I can gather the videos are all pulled from other sites, including some well known ones as well: a full rip of the movie Pulp Fiction was being served from Google Video.

There are other sites around operating in the same space; where Videohybrid differs is in its seamless delivery and rather amazing catalog of content. Something this good (from a user perspective, not a legal one) just can’t last. Here’s hoping the two teenagers from Lynbrook High School in San Jose who started the site have it hosted in a country well beyond the reach of the MPAA.

Stream Music On Demand with Deezer

Streaming online radio service Deezer is like Pandora on steroids. Search for songs, create playlists, randomly stream songs or listen to the top 10 in the US and UK. Though Deezer will not have every song you search for, it does have a very large and diverse collection, so it's perfect for parties. Best of all, there is no need to register. I think I'm in love! If nothing can top your music collection, here's how you can stream your own music collection. Anyone know how to save Deezer streams locally? Share in the comments.

Free Music: Is Deezer the New Napster?
Paul Trotter

Five years ago a host of peer-to-peer services claimed they had the legal basis to challenge old media's archaic views on music copyright. Sean Fanning's Napster was born on the premise that we shouldn't have to pay inflated prices for music, and for a while, it seemed he was going to get away with it. Fast forward to 2007, and Napster is a legitimate service, Apple's iTunes is the world's most influential music downloading service and even the likes of Kazaa and Limewire are attempting to go legit. But despite these high-profile about turns, the free music bandwagon keeps on rolling.

The newest service to hit the headlines is www.deezer.com – a music streaming service based in France that allows you to listen to tracks from a vast number of major artists, for free. You can listen to songs by the Rolling Stones, U2, Daft Punk and even PC Advisor forum member (and the winner of Britain's Got Talent), Paul Potts.

Deezer claims to have received the go-ahead from the French version of the Recording Industry Association of America (RIAA) – SACEM – to give web users legal access to music. The site requires no registration, no username and no password and it's possible to start listening to music within seconds.

In principle, the deal with SACEM could mean web users in France could listen to the tracks without breaking any laws (although we know from objections to Russian site AllofMP3's cut-price music downloads that internet users don't care about geographical territories – many of its users were located outside of Russia). Plus, a note on Deezer's website says the music it hosts is accessible "to all internet users via a web browser", before going on to boast that the site is available in 16 different languages.

It's likely the legal status of Deezer is going to get sorted out before long, and giant music label Universal has already said it will take "all measures necessary" to get its music removed from the website. Another option is for Deezer to restrict access to French IP addresses. But web users from other countries who were seduced by the original Napster's promise of free music for everyone are likely to be tempted to give a try too.

On the Яebound

The Service Will be Resumed

The service will be resumed in the foreseeable future. We are doing our best at the moment to ensure that all our users can use their accounts, top up balance and order music.

U.S. to Russia: Allofmp3.com Closes Door on Your WTO Chances
Greg Sandoval

Should Allofmp3.com reappear, as the controversial online music store has promised, it likely will doom its country's chances of joining the World Trade Organization this year.

"We remain committed to helping Russia make it into the WTO," said Sean Spicer, a spokesman for the U.S. Trade Representative, the group that negotiates International trade agreements on behalf of the nation. "In order to make that happen though, they have to honor the commitments that they've made especially in the area of intellectual property rights."

If that wasn't clear enough, Spicer was more direct here: "I don't see Russia entering the WTO with sites like Allofmp3.com up and running."

Russia has tried to comply. At least they made an attempt two months ago to shut down Allofmp3.com and try the company's owner, Denis Kvasov, for violating copyright and intellectual property laws. The problem for Russian trade officials is that Kvasov apparently operated a law-abiding site. The Cheryomushki Court in Moscow acquitted Kvasov.

A message posted at Allofmp3.com notified customers that the site will return but doesn't say when. For some undisclosed reason, the date of the message is Aug. 31.

The recording industry claims that Allofmp3.com is a renegade retailer. The company distributes digital downloads without the permission of copyright holders. Allofmp3.com has claimed that it sends royalties to a Russia-based artist's group, but the Recording Industry Assoc. of America doesn't recognize it.

For a long time, U.S. trade officials have tried to pressure Russian authorities to close the site but Allofmp3.com continues to defy the music industry and government regulators from both countries.

Meanwhile, Russia's hopes of entering the WTO by the end of the year are evaporating. Think of the WTO as an exclusive club, one that Russia desperately wants to join.

The WTO is made up of 150 countries that have agreed on rules and regulations regarding trade. This makes selling goods or services overseas easier for companies from member countries, Spicer said.

But the RIAA claims that pirates outside of the U.S. are stealing billions of dollars. Before the U.S. will support Russia's WTO membership, it wants the government to clean up piracy and improve its standing with the entertainment industry.

So Allofmp3.com's fight will likely continue. How long the site can last is anybody's guess. One thing is certain, all the notoriety from the shut down, subsequent trial and reappearance is free publicity for Allofmp3.com.

Page's Role in Piracy Conviction

A music pirate who was convicted after Led Zeppelin guitarist Jimmy Page gave evidence against him has been jailed for 20 months.

Robert Langley, 58, was arrested in 2005 after being caught with a massive haul of bootleg CDs and DVDs at a record fair in Glasgow.

The seizure by the British Phonographic Industry included £11,500 of counterfeit Led Zeppelin material.

Mr Page told Langley's trial that he did not sanction the items to be sold.

Langley, from Buckingham, had originally denied the charges against him.

However, after Mr Page gave evidence against him at the trial in Glasgow Sheriff Court last month he changed his plea to guilty by admitting three trademark and two copyright infringements.

Massive sales

Sentence was deferred for reports and when Langley returned to the court for sentencing he was told his offence was so serious that a custodial sentence was inevitable.

Sheriff Sam Cathcart said: "The volume of CDs and DVDs here was considerable. In my view, the gravity of this offence has to be dealt with by means of a custodial sentence."

The 20-month jail term is thought to be the highest sentence handed out to a bootlegger in Scotland.

Rock legend Mr Page, 63, told last month how BPI officials had asked him to come to Glasgow after the raid on Langley at the city's Scottish Exhibition and Conference Centre.

This came after the millionaire musician had already become aware of massive sales of pirate Led Zeppelin material across the world.

The collection taken from Langley included a £220 boxed set of a Led Zeppelin tour in Japan and a £40 set of a warm-up session in Denmark.

Also seized was material from The Rolling Stones and The Beatles.

Mr Page said: "The legitimate part is where fans trade music, but once you start packaging it up and you do not know what you are getting, you are breaking the rules legally and morally.

"There are some of these type of recordings where it is just a whirring and you cannot hear the music.

"If you have something like this that appears legitimate then it is just not right."

Murray Macara, defending, said the raid had been a "financial blow" to Langley and that he had not worked since.

The lawyer added that Langley and his girlfriend had recently set up an online business selling CDs through "legitimate sources".

Mr Macara told the court: "The motivation in this case was for financial gain, but Mr Langley does have a long lying love of popular music and Led Zeppelin in particular."

Langley still faces a Proceeds of Crime hearing later this year, where the Crown is seeking to strip him of assets totalling £250,000.

Bootlegging is a specialist area of music piracy, where performers' live performances are recorded without the permission of the artist or label and are sold on the black market.

Once the main area of music piracy, bootlegging has all been wiped out with the trade now dominated by organised criminal gangs who mass-produce replicas of genuine recordings or illegal compilations.

The BPI welcomed the sentence.

Its piracy manager David Wood said Langley was a "notorious" music pirate who was the last of about 10 major players who had previously dominated the bootleg scene.

"Serious organised criminals now control the distribution of fake CDs, DVDs, games and software, and internet piracy has engendered a culture of mass online copyright theft," he said.

"But as this case shows, by working closely with the authorities we can bring people who profit from music theft to justice."

GetAmnesty.com: MPAA Extortion at its Finest

The MPAA and their fellow anti-piracy organizations send out thousands of infringement notices. Only a fraction of these are played out in court, and those that do make it into court are settled at an early stage. So why not circumvent the whole legal system, and gently coerce people to pay for “amnesty”?

This is exactly what the suits at the MPAA must have thought, because they asked Nexicon to develop a program to convert infringement notices into cash.

The GetAmnesty program is a combination of both enforcement activities and efforts to turn infringers into paying “customers”. It tracks down copyright infringers by using a wide variety of methods. But, instead of sending out the regular infringement notices, they now include links for people to get amnesty. Basically they are asking to pay them an X amount of money, and they promise drop everything and go away.

Here’s what you read on the website, and allegedly in the infringement notices:

If you receive a notice that means that we have evidence of you infringing a copyright holder that we represent. Please stop and consider what such a paper trail could do to one’s future. We understand that this notice may come as a bit of a surprise to you, but we sincerely believe that signing our agreement is in your best interest.

I’m not sure how we’re supposed to call this.. extortion? Intimidation? They are clearly trying to scare people into giving their money to the copyright holders without clear evidence.

They might have an IP address, but this doesn’t mean anything. The MPAA, or any other anti-piracy organization can’t sue someone simply because he or she pays the bills for the internet connection. Several cases (example 1/2) were dropped already because of this argument. An IP address is not a person.

Andrew Norton, a spokesperson of the US Pirate Party, said in a response to TorrentFreak: “These efforts to continually alienate their consumers will not do major rights holding groups any favors. Programs such as this are thinly veiled extortion efforts, and represent further efforts by media cartels to shore up their crumbling business models by intimidation, and violation of users rights.”

Norton continues: “It is impossible for any program to determine if something is infringing copyright, or if it comes under fair use. With the recent probes into the john-doe lawsuits and their usage, it is clear that this is a pathetic new method to try and shore up the outdated perceptions of the rights holders, rather than trying to adapt and change to suit the times. It is no longer the 1940s, and unlike FM, media conglomerates cannot wish or bury the internet, and modern technology.”

The MPAA and other content owners will use these methods because it’s an easy way for them to make money, and they save quite a bit on legal costs too. In fact, the RIAA already uses a website called P2Plawsuits where people can settle their cases online. I seriously question the legality of these extortion tactics.

GetAmnesty.com was launched a few days ago. If people receive infringement letters with links to this site, please contact us. In the meanwhile you might want to take a look at what SiteAdvisor says about GetAmnesty… Phishing or other scams … and that’s exactly what it is.

Consumer Copying Still Offsets Content Owner Digital Revenues

Significant numbers of U.S. and U.K. consumers engage in copying and sharing movie and video fare from DVDs, broadcasts and Internet downloads, meriting continued focus on copy protection and traditional retail relationships, according to a new consumer research study.

A quarter of consumers are copying DVDs, mostly movies, according to the research, which was sponsored by content protection, digital rights management and software licensing solutions supplier Macrovision.

With new digital distribution platforms not yet generating substantial new revenue, content owners should consider DVD and Internet download copy protection, digital rights management and retail DVD price flexibility an “imperative to protect current revenues,” U.K. market research firm Understanding & Solutions told attendees of a Downloading & Home Copying Industry Briefing in Los Angeles.

Briefing attendees represented more than 60 studio, distribution, consumer electronics and other companies, including the Entertainment Merchants Association, Fox Entertainment Group, Groove Mobile, Lionsgate Entertainment, Movielink, the Motion Picture Association of America, NBC Universal, New Line Home Entertainment, Panasonic, Paramount Home Entertainment, Sony Pictures Home Entertainment, Starz Home Entertainment, The Walt Disney Co., Thumbplay, Twentieth Century Fox and Verizon.

Other specific findings from the survey:

• Close to one third of all respondents in both countries admit to copying prerecorded DVDs, VHS cassettes or PC games titles in the last 6 months. Over three quarters of these home copiers are copying DVDs.

• In both territories, the most common way of copying is onto a blank DVD via a DVD recorder or PC Drive without ripping software. When a DVD or PC Game has been ripped, 32 percent in the U.S. and 18 percent in the U.K. sometimes or always share the content on a file sharing website.

• Two thirds to three quarters of DVD copiers are copying movies and a similar percentage state they are copying legitimate pre-recorded DVD titles. In the last 6 months, DVD copiers have copied an average of 14 titles in the U.S. and 9 titles in the U.K.

• Most DVD copiers only make one copy of each title but some are making significantly more; in the U.K. the highest number of copies made is 30 compared with 54 in the U.S.

• In both countries whilst over 80 percent of copiers are using their own legitimate titles to copy from, 29 percent of copiers in the U.S. and 23 percent in the U.K. are copying from borrowed titles. In the U.S., 20 percent of DVD copiers are copying from rented DVDs, this stood at 13 percent of U.K. copiers.

• DVD copiers who make physical copies are in some cases sharing them with others; 32 percent always or sometimes share their copies with others in the U.S., compared with 19 percent in the U.K.

• The top 2 reasons for making a DVD copy are for self use or convenience, however one quarter say it is to share with friends and family. Almost a quarter of DVD copiers are copying because the cost of DVD titles is too high. Titles being not yet available to purchase and also being unable to find DVD titles in store were other key reasons cited by respondents.

• Close to one quarter of respondents in the U.S. and the U.K. admit to downloading PC games, movies or special interest content to their PCs or mobile phones, with 80 to 90 percent of these downloads free rather than paid for. The most popular type of downloads are movies (the research excluded music content).

• In the last 6 months U.S. downloaders have downloaded an average of 14 times compared with 12 in the U.K. In both territories 40 percent of downloaders made physical copies of these downloads.

• Half of these downloaders in the U.K. and two thirds in the U.S. share their downloads. In both the U.S. and the U.K., the main reason for downloading movies from the Internet was “convenience”.

• Around half of all U.S. and U.K. respondents have recorded movies, TV programmes or special interest from their TVs in the last 6 months. The most popular sources recorded from in both countries are TV-Free to air and Pay TV. Close to 40 percent of those respondents who record, are making physical copies of this recorded content.

TV, Trailers Keep Teens Tuned Into Movies: Study

A majority of teens see movies within the first two weeks after their release, and despite the surging popularity of the Internet among 13- to 17-year-olds, most find out about the latest films from TV ads and in-theater trailers, according to a new study from consumer research firm OTX and teen social networking site eCrush.

The "Teen Topix" study, which surveyed 750 teens nationwide, also found that most in the age group are viewing movies they missed in theaters by renting or buying DVDs, with only 1 percent to 5 percent choosing to see them via downloads, depending on the title.

According to the study, 27 percent of teens usually go to a film on opening weekend and an additional 44 percent go within the first two weeks. About 61 percent of teens find out about the latest movies from TV ads and 46 percent from in-theater trailers. Another 15 percent discover new films from entertainment Web sites, 15 percent from social networking sites, 13 percent from video-sharing sites and 8 percent from movie-ticket sites.

The survey asked teens to list all the ways they find out about new films, which explains why the percentages add up to more than 100 percent. The "buzz factor" also is key to influencing movie going decisions for teens, with 70 percent saying that people talking about a movie makes them want to see it in the theater.

The teens in the survey chose Zac Efron as the hottest male movie star of the summer, followed by Johnny Depp, Orlando Bloom, Shia LaBeouf and Daniel Radcliffe. The hottest female movie star of the summer was Jessica Alba, followed by Jessica Biel, Keira Knightley, Megan Fox and Emma Watson.

Among the fall/winter movies teens most want to see are "Saw IV," "National Treasure: Book of Secrets," "Mama's Boy," "Fred Claus," "I Am Legend," "Alvin and the Chipmunks" and "Enchanted."

The top five movies teens want to see sequels for are "Pirates of the Caribbean," "Harry Potter," "Transformers," "Spider-Man" and "Shrek."

‘South Park’ Creators Win Ad Sharing in Deal
David M. Halbfinger

In March, the season premiere of “South Park” began by barging into typically risqué territory, with a squirm-inducing bit about the taboo of using a certain racial epithet.

To Matt Stone and Trey Parker, the creators and executive producers of “South Park,” Comedy Central’s most lucrative franchise, the clip ought to have been blazing its authorized way around the Internet, its flouting of social norms picking up ad revenue with every set of eyeballs. Instead, the clip was easy to find, but it wasn’t making any money for its rightful owners.

“If I’m overseas and have to get an episode right away,” Mr. Stone lamented, “you literally have to go to an illegal download site.”

Because of the slow entry into the digital realm of Viacom, Comedy Central’s parent, and an almost crippling deal point in Mr. Stone’s and Mr. Parker’s contract, the lewd, rude, crudely animated and mordantly funny series — one that began with a viral video before the term even existed — has barely had a presence as an avalanche of user-generated entertainment hit the Web. Meanwhile, sites like YouTube met the demand for free “South Park” clips without paying for the privilege.

Now, however, Mr. Stone and Mr. Parker and their bosses at Comedy Central, a unit of Viacom’s MTV Networks, are attempting to leapfrog to the vanguard of Hollywood’s transition into Web. In a joint venture that involves millions in up-front cash and a 50-50 split of ad revenues, the network and the two creative partners have agreed to create a hub to spread “South Park”-related material across the Net, mobile platforms, and video games.

The deal, signed Friday, begins with a three-year extension of the show and its creators’ contracts through a 15th season, in the year 2011, and gives Mr. Stone and Mr. Parker sizable raises, both in their salaries and in their guaranteed advances against back-end profits from DVDs, merchandising, syndication and international sales.

It also creates an entity called SouthParkStudios.com, to be housed in the show’s animation studio in Culver City, Calif., that is intended to be an incubator not only for new applications for characters the likes of Cartman, Kyle, Stan and Kenny, but for new comedy concepts that could one day mature into TV series of their own.

All told, people involved in the deal confirm that it is worth some $75 million to Mr. Parker and Mr. Stone over the next four years. But what is likely to draw the most attention in Hollywood is not the richness of the pact, but the network’s willingness to share its advertising revenue.

Television networks have long maintained a wall between ad revenue and the compensation they pay the talent. As recently as 2000, Leslie Moonves of CBS erupted upon realizing that Mark Burnett, the creator of “Survivor,” had been given a share of revenue from its first season — saying this was tantamount to letting the inmates run the asylum — and a new deal gave Mr. Burnett a much bigger license fee instead.

Doug Herzog, president of MTV Networks Entertainment, acknowledged that the 50-50 digital deal, which was approved by Philippe P. Dauman, Viacom’s chief, would set a precedent. “If this is seen as a bold stroke, all the better, because it’s going to take bold thinking to move ahead,” he said. But he said it was justified by the “South Park” team’s stellar track record and by the changing balance of power between the buyers and creators of entertainment.

“The landscape has shifted dramatically,” Mr. Herzog said. “The way of the Web seems to be, there’s a very low barrier to entry, so you don’t need, necessarily, a major media company to be in business, or a movie studio, or whatever it is — you just need to be able to set up shop and go. You’re seeing a lot of guys doing this, funnyordie.com being the best example.” (Funnyordie.com was started this year by the comic actor Will Ferrell and his production partner, Adam McKay.)

Adding to the likely interest in the revenue-sharing pact is that digital income is one of the key issues confronting negotiators for the Hollywood studios and the guilds representing writers, directors and actors, who want to ensure they are compensated fairly for their work for the Web, mobile devices and other technologies still in their infancy.

“Talent will look at this and say, ‘Why not us?’ ” said Warren Littlefield, a television producer and former president of NBC Entertainment. “Unfortunately, what you’ll probably find is the response is, ‘We’ll tell you why not you: because you haven’t achieved what they’ve achieved.’ This is based upon a decade of proven success; it’s not a deal that’s made on the come, it’s not a deal made with an established creator who’s about to create something new. It’s 10 years in.”

Few shows are as important to a network as “South Park” is to Comedy Central. “It put us on the map,” said Mr. Herzog, who commissioned it in 1997 when the channel was still in its infancy. Its huge popularity, particularly with young males, fueled the channel’s growth, and he credits the show with inspiring a boom in original programming on basic cable networks.

“South Park” is still the network’s highest-rated with an average of three million viewers for first-run episodes, and has generated hundreds of millions of dollars from DVDs and other types of merchandising. It reaped a record $100 million in 2003 from one of the earliest successful broadcast syndications of a cable show.

But even Mr. Parker and Mr. Stone would most likely not have been able to negotiate their new joint venture had they not years ago inserted into their contract what has proved to be a killer deal point. Comedy Central’s boilerplate reserved to the network any income generated by the show through other network divisions. But the pair’s lawyer, Kevin Morris, insisted that any “South Park” revenue not derived specifically from broadcast on the cable channel would go into the pot for calculating the men’s share of back-end profits.

This was meaningless at first, but it has taken on huge significance of late, Mr. Morris said. As Viacom struggled to change into a digitally nimble media company — making a failed bid for MySpace in 2005, suing Google and YouTube this year, and striking a retaliatory deal with Joost — the exploitation of “South Park” was subject to this nettlesome requirement. It was thus no coincidence that “South Park” was not part of the Joost deal.

Both the show’s creators and the network, therefore, stood to gain if it became easier to sell the show digitally. The brainstorming that led to Friday’s deal began a year ago in Mr. Morris’s office when Mr. Herzog proposed creating a digital animation studio led by Mr. Stone and Mr. Parker along the lines of a similar one at Nickelodeon.

The “South Park” partners now spend only about 20 weeks a year making the series, leaving plenty of time for creating or mentoring new projects. “Anything we get out of it is icing on the cake,” Mr. Herzog said.

Mr. Morris said the deal would show tech companies venturing into entertainment on the cheap that they will have to pay well for top talent, while pointing the way for Hollywood studios going digital as they compete with companies like Google and Apple.

His clients, meanwhile, said it would give them the freedom to act quickly and decisively in seizing new digital opportunities.

Mr. Stone, speaking by phone from Istanbul, added that he and Mr. Parker were particularly glad to be taking an ownership stake in their main life’s work.

“The idea that we’re getting a little piece of it back — and in five years we’ll probably be going to court and fighting about it — but in ownership terms, that’s kind of an amazing thing,” he said. “People always ask us, ‘You own it, right? No? Why’d you sign that deal?’ And I have to say, ‘Because I was sleeping on my friend’s couch.’ ”

Bill Carter contributed reporting.

Ads Add Up for 'Park'
Andrew Wallenstein

An animated series is redrawing the lines of television mega-deals.

The eye-popping $75 million pact announced Monday by Comedy Central and the creators of "South Park" may be the most prominent example of the Internet as a bona fide backend window alongside syndication and DVD. The duo of Matt Stone and Trey Parker will get a 50-50 ad split on digital platforms but not on television.

The new extension will bring three more 14-episode seasons -- the same volume Stone and Parker re-signed for in 2005. "Park" is in place now through 2011, bringing its stint at Comedy Central to 15 seasons going back to 1997.

"Three more years of 'South Park' will give us the opportunity to offend that many more people," Stone said. "And since Trey and I are in charge of the digital side of 'South Park,' we can offend people on their cell phones, game consoles and computers too."

Stone and Parker already have negotiated a share of the hundreds of millions of dollars "Park" has poured in to the network via the backend, not to mention a robust licensing and merchandising revenue stream.

But this time around, they are poised to haul half of the unknown -- but up to now quite modest -- sum awaiting them on the Internet, where "Park" footage has been a fixture of Comedy Central's dot-com strategy, not to mention illegal file-sharing.

Also part of the deal is the formation of a digital animation studio launched jointly with the Viacom-owned channel, which would participate in any new programming spawned under the venture. South Park Digital Studios would come under the Web site it launched earlier this year, Southparkstudios.com (HR 1/8).

The deal represents a coup for Kevin Morris, attorney for Parker and Stone, and Doug Herzog, president of MTV Networks Entertainment Group, who ran Comedy Central when "Park" became the channel's first breakout hit. Parent company Viacom also could use a boost in the digital domain, where the company has been criticized on Wall Street.

Abel Lezcano, a lawyer at Del Shaw Moonves Tanaka Finkelstein & Lezcano whose clients include "Desperate Housewives" creator Marc Cherry, was less impressed by the ad split than the total value of the pact.

"To me that's not as big a deal as if Comedy Central had given them a share of ad revenue from TV broadcasts, but the total amount is pretty big," he said. "The Big Four networks still won't let you share in any form of advertising (broadcast or Internet) because they sell ads across all platforms and don't want to separate it out, so in that respect, it's different."

Dan Black, partner at Greenberg Traurig in Santa Monica, agrees that this is not a precedent-setting deal.

"I've seen deals like that before with Web site revenue splits," he said. "The paradigm is familiar, but the $75 million is recognition of the success of the show."

But with the ink still drying, speculation already has begun as to what will be the next TV franchise to command a payday of similar scope. Bigger franchises from "The Simpsons" to "Saturday Night Live" also have established online presences that could complicate future negotiations.

Sameer Mithal, consultant for media and content at BusinessEdge Solutions, believes that only A-list content players will get a slice of the digital pie. "A lot of people are going to ask for it, but very few are going to get it," he said. "Someone just starting out doesn't have the leverage of the 'South Park' guys."

Lightning may well strike twice at Comedy Central, which already may be negotiating with another Internet darling: "The Daily Show" anchor Jon Stewart, whose current four-year contract expires at the end of 2008. The current deal for "Park" was also scheduled to elapse late next year.

James Dixon, who manages Stewart, applauded the "Park" pact but said his client is not concerned. "We'll see what happens with his next deal, but 'Daily' is a different animal than an animated series," he said. "A lot more than digital needs to be discussed."

Matthew Belloni and Nellie Andreeva in Los Angeles and Alex Woodson in New York contributed to this report.

An 80-Year-Old Poet for the MTV Generation
Melena Ryzik

MtvU, the subsidiary of MTV Networks that is broadcast only on college campuses, will announce today that it has selected its first poet laureate. No, he doesn’t rap. And it’s not Bob Dylan, or even Justin Timberlake.

It is John Ashbery, the prolific 80-year-old poet and frequent award winner known for his dense, postmodern style and playful language. One of the most celebrated living poets, Mr. Ashbery has won MacArthur Foundation and Guggenheim fellowships and was awarded a Pulitzer Prize in 1976 for his collection “Self-Portrait in a Convex Mirror.”

Excerpts of his poems will appear in 18 short promotional spots — like commercials for verse — on the channel and its Web site (mtvu.com, which will also feature the full text of the poems). In another first, mtvU will help sponsor a poetry contest for college students. The winner, chosen by the Pulitzer Prize-winning poet Yusef Komunyakaa, will have a book published next year by HarperCollins as part of the National Poetry Series.

“We hope that we’ll help discover the next great poet that we’ll be talking about for years to come,” said Stephen K. Friedman, the general manager of mtvU, which broadcasts at 750 campuses nationwide.

The idea of the laureate program was not to create more English majors, but simply to whet an appetite, said Mr. Friedman, a poetry aficionado since he majored in literature, philosophy and history at Wesleyan. Mr. Ashbery, he added, was the No. 1 choice to inaugurate the position. “He resonates with college students that we’ve talked with,” he said.

And Mr. Ashbery, who was the poet laureate of New York State from 2001 to 2003, was immediately receptive. “It seemed like it would be a chance to broaden the audience for poetry,” he said.

The poems used in the campaign span his career, and the spots are simple: on a white background, black text floats in to a sound like a crashing wave, appears on the screen for a minute, then floats away. From “Retro” (2005): “It’s really quite a thrill/When the moon rises over the hill/and you’ve gotten over someone/salty and mercurial, the only person you’ve ever loved.” From “Soonest Mended” (2000): “Barely tolerated, living on the margin/In our technological society, we are always having to be rescued.”

The excerpts were chosen by David Kermani, Mr. Ashbery’s business manager, and two interns and an employee, all in their early 20s, in his office.

“We were just trying to pick lines that were catchy and sort of meaningful in some way, something that would appeal to what we thought younger people would be interested in,” Mr. Kermani said. These young people picked “things that had sort of raunchy references,” he added. “They thought it was sort of a hoot.”

Mr. Ashbery too was pleased by their choices, particularly because they reminded him of what was in his own canon. “I have a lot poems, so there are a lot of them that I don’t really think of very much,” he said. (Mr. Ashbery published “A Worldly Country: New Poems” in February, and an anthology, “Notes From the Air: Selected Later Poems,” is due out in November.)

But will droves of young people respond?

“It’s our hope that we will interest college kids in poetry in a new way, make it hip for them,” said Daniel Halpern, the publisher of Ecco Press, an imprint of HarperCollins that has published Mr. Ashbery’s work. But, Mr. Halpern admitted, “it’s very hard to tell what exactly is going to come of all this.”

Though his roots are in 1950s bohemia, Mr. Ashbery is perhaps not the most obvious choice for the iPod generation. He works on a typewriter and doesn’t listen to popular music, with the exception of a chance encounter with the Peaches & Herb song “Reunited” in a cab in the 1980s; it inspired his poem “The Songs We Know Best.” (“Just like a shadow in an empty room/Like a breeze that’s pointed from beyond the tomb/Just like a project of which no one tells-/Or didja really think that I was somebody else?”)

But Mr. Friedman is optimistic that verse will find its new audience, and mtvU plans to continue the program with other laureates after Mr. Ashbery’s one-year tenure is up.

“I don’t think there’s such a big leap from the artists we’re playing to the poetry that John is creating,” Mr. Friedman said. “Some of the music we play, Bright Eyes and the Decemberists, they’re phenomenal poets. I feel like there’s a connection there.”

Though he has not been offered the job, Mr. Ashbery has said that he wouldn’t necessarily be interested in being the United States poet laureate.

“There is a great deal of responsibility that comes with it,” he said. “You have to spend part of the time in Washington. It’s really a public post.”

But the mtvU gig — which is unpaid — came with few strings attached, and was not very demanding of his time, he said.

“I don’t have any specific duties,” he said. “They’re going to publicize my poetry and maybe people will get interested in it and other poets will benefit. That’s about as much work or responsibility as I would want.”

After a 50-year career and nearly as many published volumes, is Mr. Ashbery finally slacking off? He laughed. No, he said. “I’d rather keep the effort for writing poetry.”

Stones Leave Fans Hanging after Marathon World Tour
Dean Goodman

The Rolling Stones ended their two-year world tour in their home town of London on Sunday, leaving fans wondering if it would be their last ever show.

Such speculation has dogged the veteran rock band since the 1960s, but it intensifies each tour to the point where it is now a running joke between the group and journalists.

Predictably, frontman Mick Jagger made no grand announcements during the band's two-hour show at the O2 arena, in Greenwich, southeast London. The venue is just eight miles from where they performed their first ever show, at the Marquee Club, in July 1962.

Instead, the 64-year-old singer, who barely broke sweat as he jumped around the stage, thanked fans for sticking with the band amid "fire and ice and storms and trees, and God knows what."

The "trees" comment related to a mishap in April 2006 when guitarist Keith Richards slipped while on a break in Fiji. He required head surgery, which forced the band to reschedule its European tour set for that summer. At the time, it was reported that he fell from a palm tree, though he later denied that.

Since the "Bigger Bang" world tour began in Boston on August 21, 2005, observers have wondered about the health of the death-defying guitarist, who has been friends with Jagger since childhood.

To the consternation of fans in Helsinki earlier this month, Richards actually toppled over on stage a few times. But the 63-year-old played with vigor on Sunday on such classic tunes as "Brown Sugar" and "Jumpin' Jack Flash."

Richards said in the latest issue of the British music magazine Mojo that he is taking the anti-seizure medication Dilantin because of the head injury, but had abstained from cocaine for about 18 months. He continues to drink and smoke heavily.

For perhaps the first time, Richards and fellow guitarist Ronnie Wood did not smoke on stage on Sunday, following new anti-smoking regulations. But Richards could be seen taking a few hurried puffs off-stage.

Triumph, Tragedy

The marathon tour comprised 146 performances in 31 countries and Puerto Rico. First-time stops included mainland China, Montenegro, Romania and Serbia, as well as last year's Super Bowl in Detroit.

Along the way, Jagger and Richards each lost a parent, and Wood his older brother. Last October their former record label boss, Atlantic Records co-founder Ahmet Ertegun, slipped backstage during their concert in New York, fell into a coma and died seven weeks later.

The North American shows, which accounted for just over half the performances, grossed $300 million and attracted 2.2 million people, according to Pollstar, a concert trade publication. Their well-reviewed album, "A Bigger Bang," did not fare as well, slipping off the charts soon after its September 2005 release, a victim of the depressed state of the music industry.

Next on the band's agenda is the April 2008 release of Martin Scorsese's concert documentary, "Shine A Light." Some fans hope that will be a good excuse for the Stones to tour again, but the band is not saying anything.

Keith Richards Demands Apology for Bad Live Reviews

Cigarette eating, ash snorting Keith Richards thinks The Stones are untouchable and he's letting Sweden know. The man with the steel immune system asked that Swedish newspapers apologize to The Rolling Stones and their fans for giving unfavorable reviews of the band's recent show in the country.

A daily paper in Stockholm printed a feisty letter from Richards, which he wrote to combat two negative reviews that appeared in two different Swedish papers.

Here's an excerpt from Richards' letter, thanks to the AP:

There were 56,000 people in Ullevi stadium who bought a ticket to our concert - and experienced a completely different show than the one you 'reviewed' ... How dare you cheapen the experience for them - and for the hundreds of thousands of other people across Sweden who weren't at Ullevi and have only your 'review' to go on.

Write the truth. It was a good show.

Keith also said that this was the first time he'd "risen to the bait of a bad review." Both of the reviews pegged Keith, in particular, for putting on a bad show. Imagine that.

One of the writers responded via the paper's website and said that he has no plans to apologize.

"It is Keith who should apologize. After all it costs around $145 to see a rockstar who can hardly handle the (guitar) riff to 'Brown Sugar' any more," he said.

Ah, the epic battle between poor-ass journalist and rich-ass rockstar. In all honesty, I think they should both apologize to me for having to write about their lame squabble.

Hilly Kristal, 75, Catalyst for Punk at CBGB, Dies
Ben Sisario

Hilly Kristal, who founded CBGB, the Bowery bar that became the cradle of New York punk and art-rock in the 1970s and was the inspiration for musician-friendly rock dives around the world, died in Manhattan on Tuesday. He was 75.

The cause was complications of lung cancer, his son, Dana, said yesterday.

Looking more like a lumberjack than a punk rocker, with his bushy beard and ever-present flannel shirt, Mr. Kristal cut an unusual figure as the paterfamilias of the noisy downtown music scene. But for nearly 33 years his club was an incubator for generations of New York rock bands, and performing within its dank, flier-encrusted walls became a bragging right for musicians everywhere.

Thousands of bands played CBGB, from its opening in December 1973 until a dispute with its landlord forced it to close last October. In the 1970s and early ’80s, the bar became by default the headquarters for innovative local groups like the Ramones, Patti Smith, Blondie, Television, Talking Heads and Sonic Youth, who in the club’s early days had few other places to play.

“There was no real venue in 1973 for people like us,” Ms. Smith said in an interview yesterday. “We didn’t fit into the cabarets or the folk clubs. Hilly wanted the people that nobody else wanted. He wanted us.”

Hillel Kristal grew up on a farm in Hightstown, N.J., and studied classical violin as a child. He moved to New York and sang in the chorus at Radio City Music Hall and managed the Village Vanguard before he opened his Bowery bar. A lifelong lover of folk music, he kept an acoustic guitar at his desk and named the club CBGB & OMFUG, an abbreviation for the kind of music he had intended to present there: “country, bluegrass, blues and other music for uplifting gourmandizers.”

Within months after CBGB opened, young musicians and poets like Tom Verlaine and Ms. Smith became curious about the bar as they passed it on their way to visit the beat writer William S. Burroughs, who lived a few blocks down the Bowery. Mr. Verlaine persuaded Mr. Kristal to book his band, Television, and others followed suit, including Ms. Smith and her band, which had a seven-week residency in 1975. Record executives soon joined the neighborhood punks as habitués at CB’s, as it was familiarly called.

Mr. Kristal was quick to recognize the new scene’s potential, and though he professed a cantankerous distaste for some of the music, he had a keen ear.

“He might have tried to give the impression of being outside of it,” said Tom Erdelyi, a k a Tommy Ramone, the Ramones’ first drummer and only surviving original member. “But I don’t think that was the case. He understood instinctively that what was going on was something special and important.”

Mr. Kristal decreed that bands had to perform original material. His policy fostered creativity, but it was also a way to avoid paying performance royalties. Mr. Kristal had other schemes. In the ’70s he ran a moving company that hired some CB’s regulars, and in time the club’s distinctive logo became a valuable copyright to exploit for T-shirts and other memorabilia. By 2005 he was making $2 million a year through his CBGB Fashion line.

As time left its mark on CBGB’s walls in the form of stickers and taped-up fliers left by musicians and fans — as well as damage to its notoriously unpleasant bathrooms — the club’s interior itself became a tourist draw, as both a relic of rock history and a kind of living museum of graffiti. Mr. Kristal, who kept office hours until the end, answering the phone “CB’s” in a phlegmatic baritone, resisted any changes to the club, a narrow, dark room that still held remnants of its history as a 19th-century saloon.

In the ’80s and ’90s, the club began presenting metal bands and especially young, hard-core punk groups in all-ages matinees. Though less celebrated than the ones in the club’s 1970s glory days, these shows drew in new generations of fans. They also allowed the club to book two shows a day, one in the afternoon for fans under 21, and another at night for a drinking crowd. Critics began to complain that CBGB had lost its edge.

In 2005, Mr. Kristal became embroiled in a real-estate battle with the club’s landlord, the Bowery Residents’ Committee, a nonprofit group that aids homeless people. The committee said that CBGB owed $75,000 in unpaid rent increases. Mr. Kristal, disputing that claim, fought the landlord in court and in the news media for months, enlisting the help of celebrities like David Byrne of Talking Heads and Steven Van Zandt of the E Street Band and “The Sopranos.”

At the prodding of a judge, Mr. Kristal agreed to close the club. Ms. Smith played its final show, on Oct. 15. The exterior of the club, at 315 Bowery, at Bleecker Street, is now a frequent stop on walking tours of the Lower East Side and East Village.

Besides his son, of Manhattan, Mr. Kristal is survived by a daughter, Lisa Kristal Burgman, also of Manhattan; a former wife, Karen; and two grandchildren.

Facing eviction, Mr. Kristal frequently said that he was considering reopening CBGB in Las Vegas, Tokyo or any other city that would have him. But in an interview at the club with The New York Times, as tourists walked in and out and bought T-shirts, he said that he wanted to hold onto the corner of the Bowery that he had made famous.

“Millions and millions of musicians in this world think of CBGB as a home base,” he said.

What? And Leave Show Business?
Campbell Robertson

I consider myself a worker,” said David Greenspan, who has been an actor, writer and director in New York for nearly 30 years. “I’m facing the same things that workers are facing throughout the country.”

Mr. Greenspan is right of course. It really doesn’t matter whether you write plays or pave highways when you’re buying groceries. But there is a notable, and curious, difference. Every night thousands of theatergoers fill seats in Manhattan to watch theater people at work for a couple of hours, without really thinking of it as work.

But it is work, work that is supposed to pay rent, buy food and sustain people (and in some cases families) for the long periods of anxious unemployment that are an inevitable part of a performer’s life. Given what stage actors make and what New York costs, staying afloat has always required improvisation, shrewdness, discipline, luck and a kind of obstinacy that some people call passion and others call craziness, and is probably a little bit of both.

But these days it is harder than ever. Government support for the arts is meager, leaving nonprofit theaters squeezed and scrambling to cut expenses — and cast sizes — while the cost of living in New York has skyrocketed. What follows are five working New York City theater professionals talking about the part of the show business life that happens offstage.

Rehab redux

Winehouse In-Laws Tell Fans to Stop Buying Her Records

The parents of Amy's husband, Blake Fielder-Civil, believe that the pair are addicted to drugs and should be sent a message.

Speaking on BBC Radio (via NME) this morning, Giles Fielder-Civil said:

Georgette and I both believe that they are drug addicts, and they don't believe they are. I think they believe they are recreational users of drugs, and they are in control, but it seems to Georgette and I that this isn't the case.

We are concerned that if one of them dies, the other will die. They are a very close couple, and if one dies through substance abuse, the other may commit suicide.
Mrs. Fielder-Civil also chimed in, saying, "I think they both need to get medical help, before one of them, if not both of them, eventually will die."

The parents have attempted to stop the drugs at their source, apparently appealing to dealers themselves. They believe that Amy and Blake are smoking crack and using heroin.

Their final appeal on the radio came in the form of boycott. They hope that if Amy doesn't win awards (like the upcoming Mercury) or sell records, she'll realize her fans don't accept her behavior. Giles said, "Perhaps it is time to stop buying records. It's a possibility, to send that message."

Amy and Blake are reportedly on a vacation from England at an undisclosed island location.

In Online World, Pocket Change Is Not Easily Spent
Dan Mitchell

The idea of micropayments — charging Web users tiny amounts of money for single pieces of online content — was essentially put to sleep toward the end of the dot-com boom. In December 2000, Clay Shirky, an adjunct professor in New York University’s interactive telecommunications program, wrote a manifesto that people still cite whenever someone suggests resurrecting the idea. Micropayments will never work, he wrote, mainly because “users hate them.”

But wait. Amid the disdain, and without many people noticing, micropayments have arrived — just not in the way they were originally envisioned. The 99 cents you pay for a song on iTunes is a micropayment. So are the tiny amounts that some operators of small Web sites earn whenever someone clicks on the ads on their pages. Some stock-photography companies sell pictures for as little as $1 each.

“Micropayments are here,” said Benjamin M. Compaine, a consultant and lecturer at Northeastern University who specializes in media economics, “they just have not evolved in the way that everybody expected.”

From the earliest days of the Web until around the time of Mr. Shirky’s manifesto, the expectation was that a handful of companies would provide platforms — or perhaps a single ubiquitous platform — that would enable Web users to pay a penny, a dime or a dollar for a bit of content such as a newspaper article, a comic strip or a research report. Simply clicking a link would complete the transaction.

Sellers of content — at the time, newspaper companies — were among the most interested in the idea as they looked for revenue that did not depend on advertising. And the Web, rather than being a threat to their business, would allow them to expand their audience vastly.

But the problems proved insurmountable. Many micropayments companies have shut down, been acquired or changed their business models over the years. Among them: DigiCash, CyberCash, First Virtual Holdings and Peppercoin.

They used various systems, but in general users paid into accounts with their credit cards and then drew from those accounts. In the mid- to late ’90s, electronic cash had become such a popular concept that some politicians worried that it might threaten the stability of the nation’s currency.

But the economic and technical challenges were enormous. Consumers were reluctant to pay even a tenth of a cent for something they believed should be free. “There is a certain amount of anxiety involved in any decision to buy, no matter how small,” Mr. Shirky wrote in 2000.

It turns out, however, that consumers are more than willing to pay for certain types of content in certain situations. Consumers “expect to pay for music and movies, but not so much for the printed word,” said George Peabody, an analyst with Mercator Advisory Group, which serves the payments industry.

“Closed loop” systems like iTunes are the most successful, Mr. Peabody said. That’s where consumers have a continuing relationship with the merchant and usually pay with their credit cards. “Open loop” systems, where the consumer pays many merchants through a single payments processor — the way micropayments were originally envisioned — are much less successful. “To date, the market has said there is insufficient demand for these services,” concluded a research report Mercator published in April.

There is another problem with closed-loop systems: cost. The fees for every transaction are too high to make tiny payments worthwhile for many online content sellers — sometimes those fees exceed the price of the content being sold. For most merchants, according to the report, purchases of less than $1.50 aren’t worth it.

One solution is to aggregate purchases, or group purchases over a period of time, and then process the payments in a single transaction. That’s how iTunes works. But credit card networks like Visa and MasterCard, which charge fees for transactions, “aren’t really happy with that idea,” said Mr. Peabody, because it means less money for them.

Visa and MasterCard prohibit most merchants from aggregating payments directly. The networks have recently promoted their efforts to serve the “small payments” market — encouraging consumers to use cards for parking meters, for example.

But so far, they have stopped short of widely supporting aggregated-payment systems. There are “operational challenges,” said Pam Zuercher, Visa’s vice president for product innovation. Visa is evaluating such systems, she added, because “there is an undeniable trend — users want to use their cards for very small purchases.”

Merchants can aggregate payments through another company, but that adds to costs and “implementation has been tough,” Mr. Peabody said. For sellers of the lowest-priced content — anything under 75 cents — micropayments have been made irrelevant by the easy availability of online advertising, Mr. Peabody said. Programs like AdSense from Google, which allows even the smallest Web publishers to have relevant ads placed on their sites, make micropayments unnecessary. The program pays Web publishers what are often very small amounts each time a reader clicks on an ad.

Looked at another way, though, AdSense is based on micropayments. “All the criteria are there,” said Mr. Compaine, the Northeastern University lecturer, “but the money isn’t coming from the end user; it’s coming from the advertisers.”

Bill Densmore, a founder of the payments firm Clickshare, a former newspaper publisher and now a consultant and a director of a citizens’ media project at the University of Massachusetts-Amherst, has been promoting micropayments from the beginning.

He envisions Web publishers joining with one another and with producers of other content to create huge networks, sharing users and, in effect, revenue.

For example, he said, a large newspaper could sell subscriptions that would allow its readers to download music from iTunes or Rhapsody, read articles from regional papers, and watch movies and TV shows from YouTube or Comedy Central.

Some material would be sold for a fee — with the payments managed internally by the network. Mr. Densmore acknowledged that this is all pie-in-the-sky at this point. But, he said, for newspapers in particular, the status quo is not good enough. In that business, he said, there are “enough people feeling enough pain that they need to be open to asking what models might work.”

Double Whammy! Another Sony Case (And it's Not BioShock)

Biometrics – yes. BioShock – no.

Hypothetical: Imagine that you visit your local mall and browse around for stuff to buy. And you decide to buy a new CD from your favorite artist and you also buy a brand new cool USB stick thingy on an impulse. You go home and stick the CD into your laptop's CD drive. It prompts you to install some software. You do so and while you are listening to the music, you open the USB stick package and start experimenting with your new toy. It has a fingerprint reader so you install the software for that as well. Guess what… you might have just installed, not one, but two different rootkit-like software on your laptop.

We received a report that our F-Secure DeepGuard HIPS system was warning about a USB stick software driver. The USB stick in question has a built-in fingerprint reader. The case seemed unusual so we ordered a couple of USB sticks with fingerprint authentication. We installed the software on a test machine and were quite surprised to see that after installation our F-Secure BlackLight rootkit detector was reporting hidden files on the system.

Many of our regular readers will remember the huge Sony BMG XCP DRM rootkit debacle of 2005. Back then malware with rootkits were not very common but since then a lot of malware families have adopted rootkit cloaking techniques. It is unclear if the "rise of the rootkit" would have happened in this magnitude without the publicity of the Sony BMG case. In any case, a lot more people now know what a "rootkit" is than back then.

This USB stick with rootkit-like behavior is closely related to the Sony BMG case. First of all, it is another case where rootkit-like cloaking is ill advisedly used in commercial software. Also, the USB sticks we ordered are products of the same company — Sony Corporation.

The Sony MicroVault USM-F fingerprint reader software that comes with the USB stick installs a driver that is hiding a directory under "c:\windows\". So, when enumerating files and subdirectories in the Windows directory, the directory and files inside it are not visible through Windows API. If you know the name of the directory, it is e.g. possible to enter the hidden directory using Command Prompt and it is possible to create new hidden files. There are also ways to run files from this directory. Files in this directory are also hidden from some antivirus scanners (as with the Sony BMG DRM case) — depending on the techniques employed by the antivirus software. It is therefore technically possible for malware to use the hidden directory as a hiding place.

In addition to the software that was packaged with the USB stick, we also tested the latest software version available from Sony at www.sony.net/Products/Media/Microvault/ and this version also contains the same hiding functionality.

It is our belief that the MicroVault software hides this folder to somehow protect the fingerprint authentication from tampering and bypass. It is obvious that user fingerprints cannot be in a world writable file on the disk when we are talking about secure authentication. However, we feel that rootkit-like cloaking techniques are not the right way to go here. As with the Sony BMG case we, of course, contacted Sony before we decided to go public with the case. However, this time we received no reply from them.

It should be noted that MicroVaults with fingerprint authentication appear to be an older product and may no longer be manufactured. At least we had some trouble finding a reader of this type in Helsinki. Nevertheless, we did manage to find them on sale.

Note that over the weekend there was news about a suspected rootkit in the PC version of the game Bioshock. This news proved not to be true, but since BioShock apparently uses copyright protection software made by Sony there was lots of initial commotion.

Finnish Schoolboy Fined for Placing Video of Teacher on YouTube

A 15-year-old schoolboy was fined Friday for posting a video on YouTube showing a karaoke performance of his teacher and for claiming she was a lunatic.

In the first case of its kind in Finland, Nurmes District Court found Toni Vesikko guilty of intentional defamation and fined him 90 euros, or about $120. He also was ordered to pay 800 euros ($1,000) in damages for "causing harm and suffering" and 2,200 euros ($3,000) in court costs.

Vesikko, who took the video of his teacher singing karaoke at a school party on April 30, admitted posting the video on the popular video-sharing site YouTube a day later. He said he did it as a prank and had not intended to insult the teacher.

But the court said Vesikko's actions "falsified facts" - about the institution and the teacher's mental state - and caused her to suffer anxiety, depression and insomnia. The video was watched more than 600 times before Vesikko took it off Google Inc.'s YouTube on May 7 on the orders of the principal of the school, near Lieksa, 330 miles from Helsinki.

The video, which Vesikko called in English "Karaoke of the mental hospital," named the teacher and said she was "a lunatic singing at the karaoke of the mental hospital."

The Nurmes court found that the video had become "very well known and public" after its release, both in school and regionally, and could be accessed internationally. It said the video added anguish for the teacher, who had already been teased by pupils for about two years, according to her own account.

Unauthorized Enjoyment of Song Irks Law Firm
Michael J. de la Merced

It sounds like the setup for a joke: a law firm picks a fight with a legal blogger over the leak of an internal song celebrating — well, itself.

First, the song: after the law firm Nixon Peabody was named to Fortune magazine’s 2007 list of the best companies to work for, the firm, which has 700 lawyers, commissioned a celebratory anthem with an infectious 1980s-style beat and a sing-along chorus, “Everyone’s a Winner at Nixon Peabody.”

The lyrics, sung in a kind of Earth, Wind & Fire style, include: “Yeah, yeah, yeah, it’s all about the team, it’s all about respect, it all revolves around integrity.”

But what began as an innocent instance of corporate self-congratulation has turned into a minor Internet sensation and earned the firm a bit of a black eye, with bloggers poking fun at the song and criticizing Nixon Peabody’s response to its leak.

The tune first appeared last Thursday on Above the Law, a legal gossip blog run by a former federal prosecutor, David Lat. He said that he first received the song on Wednesday evening from several sources.

“The first time I listened to it, I thought it was hilarious and bizarre,” Mr. Lat said in an interview. After converting the file into a video, Mr. Lat posted the song on YouTube on Thursday morning — under the heading “Someone Deserves to Be Shot Over This” — and e-mailed Nixon Peabody for comment.

Initially, he received a statement from the firm saying that the song had been created as a response to the firm’s being ranked 47th on Fortune’s list and was meant for internal use only.

“Fun is not prohibited here,” the statement concluded.

But shortly afterward, Mr. Lat said, he received a phone call from Allison McClain, a firm spokeswoman, and John R. Gerhard, the firm’s managing director. Mr. Gerhard said that the song had been leaked by a person who was in a fight with the firm, though he did not explain further. Mr. Gerhard asked for Mr. Lat’s sources and asserted that posting the song had been a violation of the firm’s copyright.

Mr. Gerhard asked Mr. Lat to take down the song, but he refused, saying his playing of it fell under the fair-use provisions of the law. Though Mr. Gerhard said the firm did not “intend to let this thing lie,” Mr. Lat says he did not receive a cease-and-desist letter. By Friday, YouTube had removed the song, noting that it had received a copyright violation notice.

Asked to discuss the situation, Nixon Peabody released the following statement: “This song was put together for a celebration. We were having some fun with it and now some other people are having fun with it. We’re moving on and focusing on being a great place to work and doing great work for our clients.”

But if Nixon Peabody had hoped to squelch the song’s spreading, it had acted too late. Scores of other blogs have since commented on the song and the firm’s response. Another YouTube user has created a second video, using only a minute-long snippet of the song and saying that his use was firmly protected by laws governing parody.

So what would Mr. Lat say to the song’s contention that Nixon Peabody is, “The best to work with, the best to work for, that’s all we ever, ever wanted to be”? “Like they say,” Mr. Lat said, “the cover-up is worse than the crime.”

Google, Microsoft-Backed Group Ready to Defend Fair Use
Nate Anderson

Earlier this month, the Computer & Communications Industry Association filed a complaint with the FTC alleging that professional sports leagues, Hollywood studios, and book publishers were all using copyright notices that misrepresented the law. Now, the group has launched a web site called Defend Fair Use that shows they are serious about making the complaint stick.

The site is basically used as a way to disseminate the group's FTC complaint and drum up signatures for a petition that will be delivered to the agency later this year. For those interested in seeing examples of the allegedly abusive copyright notices that prompted the complain, the CCIA has helpfully published several on the site.

In contrast to copyright notices that take no account of fair use and claim control over "all accounts and descriptions" of a game, the CCIA offers a different copyright notice of its own. "We recognize that copyright law guarantees that you, as a member of the public, have certain legal rights," is says. "You may copy, distribute, prepare derivative works, reproduce, introduce into an electronic retrieval system, perform, and transmit portions of this publication provided that such use constitutes 'fair use' under copyright law, or is otherwise permitted by applicable law."

Such a statement arguably represents US copyright law better than "no part of this publication may be reproduced... by any means... without prior written permission" (Penguin Books). Fair use does allow for many kinds of copies to be made for a variety of different reasons, and the CCIA wants the FTC to go after media companies and sports leagues on the grounds that they are committing deceptive trade practices.

Defend Fair Use's tagline is "stand up for your right to use the content you pay for," and it's good to see that companies like Oracle, Microsoft, Google, Yahoo, Sun, and Red Hat all fund the CCIA. Self-interest might well be among of their motives, too, as companies like Google and Microsoft are routinely sued over copyright-related issues. Defending fair use might be good for consumers, but it might turn out to be good for business as well.

Opening Knowledge -- or Locking it Up (When it's Convenient)
Dave Munger

The blogosphere is abuzz with reports about a new initiative by commercial scholarly publishers to discredit the open access movement.

Prism describes itself as an organization to "protect the quality of scientific research", which it hopes to do by opposing policies "that threaten to introduce undue government intervention in science and scholarly publishing." What policies are they opposed to? Why, this one, which recommends that NIH-funded research results be freely available to the public when they are published.

In short, they want to protect science by locking it up under copyright. They want to restrict access to publicly-funded research results by requiring that everyone pay a fee to see it. There are plenty of reasons why PRISM's logic falls apart (see here for a thorough bashing), but I wanted to point out just one: they're hypocritical. While their entire web site advocates strict enforcement of copyright laws, the images they've used on their front page are a violation of copyright law.

Take a look at this screenshot from their front page:

Notice how the hairdo of the handsome scientist in the large photo is marred by the "Getty Images" logo? That's a digital water mark that stock photo suppliers use to keep unscrupulous publishers from "borrowing" their images. A quick search of the Getty Images web site locates the identical photo, with the identical watermark:

Clearly PRISM was too cheap, or in too much of a hurry, to bother with copyright (if you look closely at the other two photos, you'll see watermarks on them as well).

However, they're happy to make it expensive and inconvenient for taxpayers to access the research they've paid for.

Stolen Computer had State Tax Data for 106,000 Residents

State officials say a computer laptop with the names and Social Security numbers of more than 100,000 Connecticut taxpayers has been stolen.

The state Department of Revenue Services says it will begin notifying affected taxpayers about the theft. Officials say the computer is password-protected and access is unlikely by anyone without specialized knowledge.

The state agency says it doesn't know if anyone has gained access to the data. Officials say they have notified law enforcement authorities and are investigating.

No information has been provided about how the theft occurred or other details.

Man Arrested in Dodd Office Burglary
Stephanie Reitz

Officers arrested a homeless man Monday in connection with a weekend burglary at the downtown office of Democratic presidential candidate and U.S. Sen. Christopher Dodd, police said.

Gilberto Soto, 47, who lives in a city shelter and has a lengthy arrest record, allegedly took a television, computer and other electronics from Dodd's Hartford office, police said Monday.

"It does not appear right now that he knew he was breaking into a presidential candidate's office or that there was any political motivation," Assistant Police Chief Neil Dryfe said.

Charges against Soto were being finalized Monday afternoon, and he was taking officers to spots throughout the city where he allegedly sold the stolen items, Dryfe said.

Soto is, "for lack of a better term, a career criminal," Dryfe said, and appears to have selected the burglary site at random.

"It looks like a crime of opportunity by someone looking to support a possible drug habit," he said.

Dodd's office was notified Monday of the arrest, Dryfe said.

Dodd has served in the U.S. Senate since 1981 and is seeking the Democratic presidential nomination.

Some of the items stolen from Dodd's office were recovered Monday. Dryfe said he did not know whether the computer was among them, and whether it contained confidential data related to Dodd's Senate service or presidential campaign.

Officers were called Sunday afternoon when the Lewis Street building's property manager found its front door unlocked.

Detectives determined that the suspect went into an adjacent parking garage sometime before dawn Sunday, used wood planks to create a makeshift walkway to a second-floor window, and broke into Dodd's office there, Dryfe said.

The suspect took the items out through the front door, he said. The building has an alarm system, but police never received a report that it had been activated, Dryfe said.

Police viewed a security video Monday that showed the suspect walking down a hallway, and spotted the same man shortly afterward as they patrolled near the city's downtown Bushnell Park.

Self-Described Pedophile to Leave California after Judge Bars Him from Kids' Gathering Places

A self-described pedophile is leaving California after a judge ordered him to stay away permanently from places where children gather, the man told a TV station for a report that aired Sunday.

"I have to leave the state, really, I can't live here under this Orwellian protocol," Jack McClellan told KABC. "It's nightmarish."

McClellan did not immediately return a message left on his cell phone by The Associated Press.

McClellan has been unemployed and living out of his car since arriving in Southern California this summer from Washington state.

McClellan, 45, came to the attention of authorities for a Web site where he posted photos of children in public places and discussed how he liked to stake out parks, public libraries, fast-food restaurants and other areas where little girls congregated. His Internet service provider took down his Web site more than a month ago.

McClellan maintained he launched the site as a form of therapy and wouldn't do anything illegal. He has never been charged with molestation.

But on Friday, Superior Court Judge Melvin Sandvig issued a permanent injunction and a three-year restraining order that prohibit McClellan from coming within 30 feet (9 meters) of schools, playgrounds and other places where children congregate.

The judge's ruling narrowed an injunction issued earlier in the month that barred McClellan from coming near anyone under age 18 anywhere in the state. McClellan spent 10 days in jail for violating that injunction when he was arrested earlier this month near a child care center at the University of California, Los Angeles.

Sandvig's new ruling also bars McClellan from contacting, videotaping or photographing children or publishing their photos without written consent from a guardian or parent. McClellan could be arrested if he violates that prohibition.

Charge Dropped Against SoCal Pedophile

A self-described pedophile was released from jail after prosecutors dropped a criminal case accusing him of violating a judge's order prohibiting him from being within 30 feet of children anywhere in California for three years.

Prosecutors could not pursue the case against Jack McClellan, 45, after they determined the order was invalid because the judge failed to schedule and give McClellan proper notice of a hearing required to argue the merits of imposing such a long-lasting order before it is issued. McClellan was released from jail Tuesday.

He was arrested Aug. 13 for investigation of violating the order when he was found near a child care center at the University of California, Los Angeles. He had a camera with him at the time, but he told a local TV station that there wasn't any film in it.

McClellan was arrested again — several hours later — this time for trespassing after he did an interview with the TV station on university grounds. He had been told not to return to the campus after his first arrest. Prosecutors did not pursue the trespassing charges.

Superior Court Judge Melvin Sandvig issued the order Aug. 3 requiring McClellan to stay at least 30 feet away from every person under age 18 in California for a three-year period, said Nick Velasquez, a spokesman for the Los Angeles city attorney's office.

A three-year order amounts to what is termed a preliminary injunction, and cannot be issued without the statutory hearing and notice requirements, according to the city attorney's office.

Superior Court spokeswoman Pat Kelly said Sandvig could not comment because the case is pending. A call to his chambers went unanswered late Tuesday.

A cellphone message left for McClellan was not returned.

McClellan is unemployed and has been living out of his car. He stirred controversy in Southern California when he arrived this summer from Washington state, where he had lived with his parents.

McClellan maintained a website in Washington where he posted photos of children he had taken in public places. He also discussed how he liked to stake out parks, public libraries, fast-food restaurants and other areas where little girls, or "LGs," congregated.

His server took his website down more than a month ago. McClellan, who said he lives on supplemental security income and suffers from depression, has maintained that he launched the site as a form of therapy and wouldn't do anything illegal.

McClellen also has a hearing set for Friday on a temporary restraining order preventing him from coming within 10 yards of children in the city of Santa Clarita in northern Los Angeles County, authorities said.

U.S. Says Pope Immune From Molestation Lawsuit

The U.S. Justice Department has told a Texas court that a lawsuit accusing Pope Benedict XVI (search) of conspiring to cover up the sexual molestation of three boys by a seminarian should be dismissed because the pontiff enjoys immunity as head of state of the Holy See.

Assistant U.S. Attorney General Peter Keisler said in Monday's filing that allowing the lawsuit to proceed would be "incompatible with the United States' foreign policy interests."

There was no immediate ruling from Judge Lee Rosenthal of the U.S. District Court for the southern district of Texas in Houston. However, U.S. courts have been bound by such "suggestion of immunity" motions submitted by the government, Keisler's filing says.

A 1994 lawsuit against Pope John Paul II (search), also filed in Texas, was dismissed after the U.S. government filed a similar motion.

Keisler's motion was not unexpected, as the Vatican Embassy in Washington had asked the U.S. government to issue the immunity suggestion and do everything it could to get the case dismissed.

The former Cardinal Joseph Ratzinger (search) was named as a defendant in a civil lawsuit by three plaintiffs who allege that Juan Carlos Patino-Arango, a Colombian-born seminarian on assignment at St. Francis de Sales church in Houston, molested them during counseling sessions in the church in the mid-1990s.

Patino-Arango has been indicted in a criminal case by a grand jury in Harris County, Texas, and is a fugitive from justice.

The lawsuit alleges Ratzinger, who headed the Vatican's Congregation for the Doctrine of the Faith before becoming pope, was involved in a conspiracy to hide Patino-Arango's crimes and help him escape prosecution.

The lawsuit cites a May 18, 2001, letter from Ratzinger written in Latin to bishops around the world, explaining that "grave" crimes such as the sexual abuse (search) of minors would be handled by his congregation and that the proceedings of special church tribunals handling the cases were subject to "pontifical secret."

Daniel Shea, attorney for one of the plaintiffs, has said such secret proceedings amounted to a conspiracy to cover up the crimes.

The Vatican (search) and the U.S. Conference of Catholic Bishops have insisted the secret church procedures in the sex abuse case were not designed to cover up abuse nor to prevent victims from reporting crimes to law enforcement authorities. The document deals with church law — not keeping secrets from secular authorities, they say.

The pope's lawyer, Jeffrey Lena, said Tuesday it was "appropriate" the Justice Department had determined the pope was "the sitting head of state of the Holy See."

In a telephone interview, Lena said the motion would now be considered by the Texas court, "which should be bound by the executive's determination" and rule accordingly.

Many lawsuits stemming from the U.S. church sex abuse crisis have named the pope, the Vatican and other high-ranking church officials, but they failed because the officials could never be served with the papers. This case got further than most because Ratzinger was actually served with the documents.

Shea said Tuesday he would challenge the constitutionality of the U.S. diplomatic recognition of the Holy See on the grounds that it goes against the First Amendment's "establishment clause" that bars any laws respecting the establishment of religion.

Shea noted that in trying to have the case dismissed, Ratzinger's lawyers have already admitted in court papers that the Holy See is a church. A May 26 motion to dismiss the suit, citing the First Amendment, says the case should be thrown out because it would "invite court intrusion into the internal affairs of the Roman Catholic Church."

However, legal experts said such a challenge would be difficult to win, partly because previous challenges have failed and because the U.S. has maintained diplomatic relations with the Vatican since 1984.

"The courts have become a lot less interested in the establishment clause in the last few years," said Kent Greenawalt, a professor of First Amendment and legal philosophy at Columbia Law School.

Officials at the U.S. Embassy to the Holy See said they were familiar with the case but had no other immediate comment. The Vatican said it had no comment.

Along with the pope, the lawsuit names as defendants Patino-Arango, the Diocese of Galveston-Houston, Archbishop Joseph Fiorenza and the Rev. William Pickhard, Patino-Arango's vocational director.

Yahoo to Court: Dismiss Torture Case
Miguel Helft

Earlier this year, a Chinese political prisoner and his wife sued Yahoo in federal court in San Francisco, accusing the company of abetting in the commission of torture by helping the Chinese government to identify political dissidents who were later beaten and tortured. Another political prisoner has since joined the case.

Now Yahoo has asked the court to dismiss the case.

The company makes a number of legal arguments to the court. For the lay reader, however, the first paragraph conveys the main thrust of Yahoo’s position. “This is a lawsuit by citizens of China imprisoned for using the Internet in China to express political views in violation of China law. It is a political case challenging the laws and actions of the Chinese government. It has no place in the American courts.”

Yahoo also repeated arguments that it had no choice but to comply with a lawful Chinese government request for information connected to an investigation by the authorities: “Yahoo deeply sympathizes with the plaintiffs and their families and does not condone the suppression of their rights and liberty by their government. But Yahoo has no control over the sovereign government of the People’s Republic of China (”PRC”), the laws it passes, and the manner in which it enforces its laws. Neither Yahoo Inc. or YHKL therefore, can be held liable for the independent acts of the PRC just because a former Yahoo subsidiary in China obeyed a lawful government request for the collection of evidence relevant to a pending investigation.”

I called Morton Sklar, executive director of the World Organization for Human Rights USA, the group representing the dissidents, and asked for his reaction. “It is not the Chinese government that is the defendant here,” Mr. Sklar said. “It is Yahoo, for their part in this process. If not for Yahoo, there would have been no abuses. They gave the pieces of information that allowed China to take these actions.”

Legal experts believe that the plaintiffs face significant hurdles in the case, which was brought under the Alien Tort Claims Act and the Torture Victims Protection Act.

But the suit and other efforts to pressure Yahoo have caused the company to take notice. At the annual shareholder meeting, co-founder Jerry Yang (he was not yet chief executive) read a lengthy statement outlining the company’s approach to human rights issues. “We the employees and executive team at Yahoo are dismayed and distressed by the impact of people imprisoned in China and around the world,” Mr. Yang said. “We have been and will continue to be actively engaged for the long term. This is an issue that will not go away for us. As a company entering its teenage years now, with hundreds of millions of users, and with the human stakes more challenging than ever, we remain fully committed to protecting human rights in the business world’s most challenging markets.”

Mr. Sklar suggested the upcoming Beijing Olympics would be an ideal time for Yahoo to live up to that commitment more forcefully.

Company Wins Important Ruling for the Anti-Malware Industry

Kaspersky Lab, a leading developer of secure content management solutions, announces that the United States District Court of Washington ruled in favor of Kaspersky Lab, granting immunity from liability in the case brought by online media company Zango.

Zango sued Kaspersky Lab to force the Company to reclassify Zango’s programs as nonthreatening and to prevent Kaspersky Labs’s security software from blocking Zango’s potentially undesirable programs. In the important ruling for the anti-malware industry, Judge Coughenour of the Western District of Washington threw out Zango’s lawsuit on the grounds that Kaspersky was immune from liability under the Communications Decency Act, part of which states: “No provider or user of an interactive computer service shall be held liable on account of any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected, or any action taken to enable or make available to information content providers or others the technical means to restrict access to [such] material.”

The ruling protects consumer choice to determine what information and software is allowed on each computing system, and enables anti-malware vendors with the right to identify and label software programs that may be potentially unwanted and harmful to a user’s computer as they see fit. Kaspersky Lab’s software is designed to do just that. Users can adjust the settings to allow certain programs of their choice to come through at all times.

“Kaspersky Lab’s mission is, and has always been, to make the Internet a safer place for all. We are thrilled with the outcome of this case because it supports the key message of the information security industry – consumer protection comes first,” – says Eugene Kaspersky, CEO of Kaspersky Lab.

The Age of Steampunk

Nostalgia meets the future, joined carefully with brass screws
Peter Bebergal

An inventor who goes by the name Datamancer has modified his laptop so that its popular qualities -- light, thin, resistant to falls -- are lost. But something even more wondrous has emerged. Datamancer's laptop is completely encased in mahogany-stained pine, like a Victorian music box, resting on clawed brass feet. Leather patches set with handmade brass tacks serve as wrist wrests, and the keyboard consists of typewriter keys. To boot it up, you must wind a key.

If you ask Datamancer why he would bother to do such a thing, he would give you a simple answer. It's all for the love of steampunk.

Steampunk has its roots in science fiction literature, where it describes a corner of the genre obsessed with Victoriana and the idea that the computer age evolved alongside the industrial. Steampunk stories, which started appearing with regularity in the 1980s, eschew clean and orderly visions of the future in favor of gas-lighted streets, steam engines belching toxic smoke, and dastardly villains inventing strange technologies. Dirigibles rule the air, and the upper classes employ clockwork servants to serve their meals.

In the past two years, though, steampunk has emerged in the real world, as Datamancer and a growing number of enthusiasts build steampunk objects and then share photos of them on the Internet. One of the first was the appearance last summer of a group of robots designed by the San Francisco Bay Area artist I-Wei Huang: They look like 19th-century locomotives with legs and are literally steam powered. This year alone has produced steampunk watches from Japan (bizarre assemblages of rusted brass, cracked leather, and antique watch faces) and a steampunk tree house (a steaming metal tree that houses a main room with all manner of secret compartments and drawers) at the annual Burning Man festival in the Nevada desert. There is even steampunk fashion, such as a combination dress/overalls adorned with gears and belt loops for every lady's steampunk tools.

In their embrace of the toothy cog and the sooty pipe, this guild of steampunk hackers represents a rebellion of sorts against our iPhone moment. It's a time of technological wonders: flat-panel TVs you can hang like paintings; forms of instant communication to almost anywhere in the world; and phones no bigger than a wallet that play music and help you find your way in a forest. But in all this new technology there is nothing lasting to appreciate: Each new version is obsolescent the moment it appears, and all of it is literally superficial, with its innovations hidden in silicon chips behind hard plastic. We have museums dedicated to preserving steam engines and mechanical watches. It's hard to imagine a future museum preserving every example of Blackberry. What we want to preserve about technology also becomes a reflection of what is human about it, the spirit of invention and craftsmanship. No one would suggest that the iPhone isn't a marvel, but there's something vaguely alienating about a device that doesn't allow users to replace their own batteries. And why bother? You'll toss it with the rest when the new model appears.

"The iPhone might be sleek and well-designed within its mode, but there's no way it can compete in luxe qualities with some Victorian equivalent," said author Paul Di Filippo, the first to use the term "steampunk" in a title of a book, "The Steampunk Trilogy." Steampunk "embodies both handicraft and mass-production elements in a rich visual vocabulary totally lacking in today's plastic, cheap-jack gadgets."

These steampunk engineers are also part of a broader surge in the do-it-yourself mind-set, fueled by the sharing spirit of the Web. It was the do-it-yourself spirit that powered the first Apple computers and the early days of the Internet, but much of the technology developed from these things has become a closed system: DRM-protected music, Microsoft's proprietary nature, even the dependence on single carriers for cable television and cellphones. There is a punk ethos to the social communities of today's Web, in which users are trying to wrest content away from the marketers and commercial media. But hard technology has mostly resisted this little rebellion. When opening up your computer to hack around a little bit for fun voids your warranty, better to leave it alone until it's time to buy a new one.

Steampunk artists like Datamancer often post instructive blogs (datamancer.net) about their work with the hope that others will try their hand at making something themselves. What makes a steampunk object work is not a mysterious process. Open the hinged cover, unscrew the valve, turn it upside down, and look at the bottom. How it's made and what it does are inseparable qualities. But more than that, this kind of blog reveals the spectacular things that people can do with a Dremel tool and a little imagination. And Datamancer and others give permission to forgo your warranty in favor of something that has a personal quality to it.

There is here a deep historical connection to the spirit of Victorian invention, Di Filippo says. During the Victorian era, the amateur could still compete with the professional in a number of crafts. It was a time when naturalists and other nonprofessional scientists were responsible for amassing important collections of biological specimens and for naming a number of asteroids and stars.

"The entirety of knowledge could be almost apprehended by a single individual," says Di Filippo. "There were still frontiers. There were fewer laws and governing bodies. Who wouldn't want all of those things back?"

The term "steampunk" is a play on cyberpunk, a type of near-future science fiction where rebellious hackers use handmade tech to wage virtual warfare with corporations and governments. Steampunk was a term used almost jokingly as a name for science fiction that was set in the Victorian era as opposed to the virtual future, but which still featured rebellious protagonists utilizing strange technology. In steampunk, the punk is not a computer hacker, but a mechanical one.

The influence on steampunk literature goes as far back as H.G. Wells and Jules Verne, but those authors can't really be considered steampunk because they were writing about their own era. Michael Moorcock's "The Warlord of the Air" (1971), "Lord Kelvin's Machine" (1992) by James P. Blaylock, "The Difference Engine" (1991) by William Gibson and Bruce Sterling, and Di Filippo's "Steampunk Trilogy" (1995) are often cited as the central steampunk novels. In "The Difference Engine," the visionary artist William Blake gives Powerpoint presentations using a kind of magnetic tile device. In a novel released this year, Jay Lake's "Mainspring," the sun revolves around the earth along a system of celestial gears.

Yet steampunk has also evolved as an aesthetic unto itself, drawing on a number of diverse references. Goth, which has its own anachronistic sensibility, borrowing heavily from Victorian styles such as corsets, offers an early glimpse of steampunk. Punk lent elements of leather and metal, as well as the DIY attitude. The film "Brazil" is of particular inspiration, where technology looks like junk, and the rebel fights against a technocratic authority. But one of the most important influences has to be Japanese animation, or anime, which is replete with images of mechanical robots, neo-Zeppelin starships, goggle-wearing hackers, and the melding of the techno with the organic.

There doesn't appear to be anyone more prolific than the Littleton resident von Slatt, whose website (steampunkworkshop.com) keeps an account of his wondrous inventions. IT manager by day, mad steampunk scientist by night, the pseudonymous von Slatt has built some elaborate steampunk creations: a flat-panel monitor framed in brass that sits on a marble base; a computer keyboard with a brass cradle and individually applied round keys from an old typewriter; and a steampunk Stratocaster guitar on which he etched gears and springs on a brass plate.

Von Slatt got started with steampunk design when he was customizing a school bus into a mobile home inspired by 19th-century British canal boats. After posting his progress on the Web he discovered there were dozens of other people doing similar design work. Von Slatt is now a member of the Web-based Steampunk Forum, which has more than 1,000 members discussing 2,400 topics.

Von Slatt refers to current technology and engineering as jellybeans: There are different colors and sizes, but mostly everything is alike. "Steampunk is a backlash to the sameness of design. In Victorian times, decoration was integrated with the form and the function. Individual components were beautiful."

One designer, going by the name Kaden, has designed what he named the "Original Model 420 Pneumatiform Infumationizer." What looks like the mechanism of an atomizer has been lovingly attached to a ball of glass and a series of pipes, ending in a long brass tube with a small breathing mask. The device looks like it would be quite at home in an otherworldly opium den.

Objects like the Infumationizer show that steampunk is also simply a love of the fantastic. Steampunk hackers are often science fiction geeks at heart. There's a love of things that don't exist, except in some alternate world, like the "Peltier-Seebeck Recycled Energy Generating Device" and the "Aetheric Flux Agitator Mk2." One of Datamancer's other inventions is a modified enclosure for his desktop computer, which he calls "The Nagy Magical-Movable-Type Pixello-Dynamotronic Computational Engine." He used the cabinet of 1920 tube radio, a turn of the century Underwood typewriter, and various parts and pieces to create a functional, completely anachronistic, impossibly real computer.

In all of the new steampunk design there is a strong nostalgia for a time when technology was mysterious and yet had a real mark of the craftsperson burnished into it, like the "Nagy" of Datamancer's "computational engine." In the Victorian era and at the turn of the century, people watched in astonishment as technology changed their lives, but they were also in awe of the inventors and scientists, some of whom became celebrities in their own right, like Edison and Tesla.

Magpie Killjoy, an editor for Steampunk magazine, first published this year, thinks the impetus for this design movement goes very deep. Killjoy is saddened at the state of technology today. It is homogeneous, she says, and there is too much reliance on fossil fuels and mass production. She sees steampunk as a way of going backward in time to the moment we could have made a different choice.

"A lot of people are unconsciously drawn to this time period because there was marvel and wonder to be found in machines. You can see this in the level of ornamentation that Victorian technology was endowed with -- each individual clock and cannon was a work of art unto its own," she says. "There was a time when machines were new, and they could go any direction."

Security Researcher Stumbles Across Embassy e-Mail Log-Ins
Eric Bangeman

Security consultant Dan Egerstad has managed to snag usernames and passwords for over 100 e-mail accounts belonging to embassy employees around the world. According to Computer Sweden, which was able to check that some of the data was accurate, the embassies affected include India, Russia, Uzbekistan, Kazakhstan, and Iran, along with a British office in Nepal.

Egerstad said he found the data inadvertently after some security-related research. "I did some experimentation and came across the information accidentally," Egerstad told Computer Sweden.

Of the embassies affected, only Russia has yet to own up to the problem. Roman Mironov, the head secretary at the Russian embassy in Stockholm, told a Swedish television station that the information is accurate, but no longer relevant since the login information has been changed. The Indian embassy refused Computer Sweden's requests for comment.

Computer Sweden says that it has confirmed other aspects of Egerstad's account without trying to log into any of the compromised accounts, but has decided against naming or linking to the web site where the data was posted.

Given that the data obtained appears to be confined to e-mail login information, the potential for damage appears to be limited. Egerstad hopes that his finding the data proves to be an eye-opening experience for the embassy staff. "I hope this leads them to take action," Egerstad told Computer Sweden. "And I hope they become a bit more aware of security issues."

Thanks to Anders Bylund for the translation help.

Microsoft Managed to Buy the Vote of Sweden in ISO?

I have written before about the situation around OOXML, and that Microsoft tries to push it through the standards organisations. Today (Monday, Aug 27) a meeting took place in WG17 of SIS/ITS that discuss the OODF question. I already heard Friday last week there where rumors that Microsoft with the help of new partners (as new members of SIS) stuffed the meeting as single majority is enough to win a vote.

When a friend of mine arrived, it was clear that it all was stuffing going on from Microsoft side. All Microsoft partners in Sweden was at that meeting. People against OOXML got an offer to leave the meeting without paying the fee (not becoming a member). Everyone left, including IBM that thought it all was a farse.

It will now be interesting to see what the final vote will be from Sweden in ISO. It is the case that the vote of Sweden can be bought? Or will SIS take a decision to go against the WG?

Update:My friend nd writes here that Stephane Rodriguez in this text specifies a number of issues with OOXML and the Microsoft implementation of it. Of course, a detailed writeup should maybe distinguish more clearly between what is a problem with the standard, and what is a bad implementation of a standard. But the text pretty clearly state we are not there yet. If we have no implementations of the standard that works, how come we should push it through any standards body? Dear ISO, please stop. Take a deep breath, and go through the specification making sure it really include everything is that is needed for an OOXML editor. Everything and nothing more. Then people in procurement processes can require Microsoft (and others) to follow that standard and not have proprietary extensions that make documents incompatible.

Update: Another friend of mine, Joakim, write in Swedish about what happened and also list the companies that suddenly where members of the wg. Out of these, I only see Google with a known view, and that is against OOXML. The rest I presume where in favor of OOXML becoming a standard.

The result of the vote? 25(positive)-6(negative)-3(abstain)

Sweden's SIS Declares OOXML Vote Invalid - Will Change Vote from Yes to Abstain

SIS, the standards body in Sweden, has declared its vote on OOXML invalid. There is no time to start over, so Sweden will abstain. We don't have it translated for you yet, but a reader informs me of the gist. We'll do the rest as soon as we can. Here is the SIS statement [PDF], for those who can read it already and may wish to help tell the rest of us the details. Here is one translation online:

The Swedish working group of SiS, Swedish Standards Institute, Document description languages, SIS/TK 321/AG 17, decided on 27 August 2007 at a vote to vote for making Office Open XML an ISO standard. Today the board of SiS decided to invalidate the vote.

The motive of the decision of the board is that SiS has information suggesting that one of the members in the working group has participated in the vote with more than one vote. [...]

The media in Sweden is beginning to report it now. Here's IDG.se coverage, also in Swedish. I am told that the issue was someone voting twice. I've written to SIS for clarification.

That isn't the big story though, to me. The real story is countries that voted No with Comments in the public process that are being pressured behind closed doors, sometimes successfully, to change the vote. Keep your eye on France and the Czech Republic, folks.

More media coverage:

IT Business Edge: Meantime, the managing director for the ODF Alliance notes that Microsoft’s work may backfire. As he told Computerworld: "Some of the comments that have been received from the countries… shine a light on OOXML defects. Governments will think long and hard after viewing some of these comments before using the format."

Eric Lai, ComputerWorld: Microsoft Corp. admitted Wednesday that an employee at its Swedish subsidiary offered monetary compensation to partners for voting in favor of the Office Open XML document format's approval as an ISO standard.

Microsoft said the offer, when discovered, was quickly retracted and that its Sweden managers voluntarily notified the SIS, the national standards body.

"We had a situation where an employee sent a communication via e-mail that was inconsistent with our corporate policy," said Tom Robertson, general manager for interoperability and standards at Microsoft. "That communication had no impact on the final vote." ...

In a blog post late Wednesday night, Jason Matusow, Microsoft's senior director for intellectual property and interoperability, acknowledged that Microsoft had contacted business partners to support Open XML, though he stopped short of a full apology for that action.

"It is critical to note that the addition of voting members at that time was completely within the rules of the national standards body," he wrote. "While there are many arguments to be had over the relative merits of this rule ... it is a rule nonetheless."

Apparently SIS disagrees.

Vista Multimedia Playback and Network Throughput
Mark Russinovich

A few weeks ago a poster with the handle dloneranger reported in the 2CPU forums that he experienced reduced network throughput on his Vista system when he played audio or video. Other posters chimed in with similar results, and in the last week attention has been drawn to the behavior by other sites, including Slashdot and Zdnet blogger Adrian Kingsley-Hughes.

Many people have correctly surmised that the degradation in network performance during multimedia playback is directly connected with mechanisms employed by the Multimedia Class Scheduler Service (MMCSS), a feature new to Windows Vista that I covered in my three-part TechNet Magazine article series on Windows Vista kernel changes. Multimedia playback requires a constant rate of media streaming, and playback will glitch or sputter if its requirements aren’t met. The MMCSS service runs in the generic service hosting process Svchost.exe, where it automatically prioritizes the playback of video and audio in order to prevent other tasks from interfering with the CPU usage of the playback software:

When a multimedia application begins playback, the multimedia APIs it uses call the MMCSS service to boost the priority of the playback thread into the realtime range, which covers priorities 16-31, for up to 8ms of every 10ms interval of the time, depending on how much CPU the playback thread requires. Because other threads run at priorities in the dynamic priority range below 15, even very CPU intensive applications won’t interfere with the playback.

You can see the boost by playing an audio or video clip in Windows Media Player (WMP), running the Reliability and Performance Monitor (Start->Run->Perfmon), selecting the Performance Monitor item, and adding the Priority Current value for all the Wmplayer threads in the Thread object. Set the graph scale to 31 (the highest priority value on Windows) and you’ll easily spot the boosted thread, shown here running at priority 21:

Besides activity by other threads, media playback can also be affected by network activity. When a network packet arrives at system, it triggers a CPU interrupt, which causes the device driver for the device at which the packet arrived to execute an Interrupt Service Routine (ISR). Other device interrupts are blocked while ISRs run, so ISRs typically do some device book-keeping and then perform the more lengthy transfer of data to or from their device in a Deferred Procedure Call (DPC) that runs with device interrupts enabled. While DPCs execute with interrupts enabled, they take precedence over all thread execution, regardless of priority, on the processor on which they run, and can therefore impede media playback threads.

Network DPC receive processing is among the most expensive, because it includes handing packets to the TCP/IP driver, which can result in lengthy computation. The TCP/IP driver verifies each packet, determines the packet’s protocol, updates the connection state, finds the receiving application, and copies the received data into the application’s buffers. This Process Explorer screenshot shows how CPU usage for DPCs rose dramatically when I copied a large file from another system:

Tests of MMCSS during Vista development showed that, even with thread-priority boosting, heavy network traffic can cause enough long-running DPCs to prevent playback threads from keeping up with their media streaming requirements, resulting in glitching. MMCSS’ glitch-resistant mechanisms were therefore extended to include throttling of network activity. It does so by issuing a command to the NDIS device driver, which is the driver that gives packets received by network adapter drivers to the TCP/IP driver, that causes NDIS to “indicate”, or pass along, at most 10 packets per millisecond (10,000 packets per second).

Because the standard Ethernet frame size is about 1500 bytes, a limit of 10,000 packets per second equals a maximum throughput of roughly 15MB/s. 100Mb networks can handle at most 12MB/s, so if your system is on a 100Mb network, you typically won’t see any slowdown. However, if you have a 1Gb network infrastructure and both the sending system and your Vista receiving system have 1Gb network adapters, you’ll see throughput drop to roughly 15%.

Further, there’s an unfortunate bug in the NDIS throttling code that magnifies throttling if you have multiple NICs. If you have a system with both wireless and wired adapters, for instance, NDIS will process at most 8000 packets per second, and with three adapters it will process a maximum of 6000 packets per second. 6000 packets per second equals 9MB/s, a limit that’s visible even on 100Mb networks.

I caused throttling to be visible on my laptop, which has three adapters, by copying a large file to it from another system and then starting WMP and playing a song. The Task Manager screenshot below shows how the copy achieves a throughput of about 20%, but drops to around 6% on my 1Gb network after I start playing a song:

You can monitor the number of receive packets NDIS processes by adding the “packets received per second” counter in the Network object to the Performance Monitor view. Below, you can see the packet receive rate change as I ran the experiment. The number of packets NDIS processed didn’t realize the theoretical throttling maximum of 6,000, probably due to handshaking with the remote system.

Despite even this level of throttling, Internet traffic, even on the best broadband connection, won’t be affected. That’s because the multiplicity of intermediate connections between your system and another one on the Internet fragments packets and slows down packet travel, and therefore reduces the rate at which systems transfer data.

The throttling rate Vista uses was derived from experiments that reliably achieved glitch-resistant playback on systems with one CPU on 100Mb networks with high packet receive rates. The hard-coded limit was short-sighted with respect to today’s systems that have faster CPUs, multiple cores and Gigabit networks, and in addition to fixing the bug that affects throttling on multi-adapter systems, the networking team is actively working with the MMCSS team on a fix that allows for not so dramatically penalizing network traffic, while still delivering a glitch-resistant experience.

Stay tuned to my blog for more information.

All graphs hosted by parent – Jack

Microsoft's WGA Failure Earns Zoon Nomination
Daniel Eran Dilger

One disadvantage to Microsoft's Windows Genuine Advantage DRM program--which forces Windows users to verify their software as "not-stolen" in order to receive certain patches and updates, including Internet Explorer 7--is that Microsoft's WGA server is not as highly reliable as Microsoft likes to advertise.

When Microsoft's Windows Genuine Advantage server--presumably also running Windows--goes down, as it did this weekend, users attempting to verify their copy of Windows are automatically treated as counterfeiters and their Windows software goes into a “reduced functionality mode.”

For Windows Vista users, that means the new Aero window appearance--Microsoft’s copy of Mac OS X’s Quartz--is turned off, reverting Vista Ultimate into plain old Windows XP.

Even XP users are affected by the WGA failure, so the problem affects more than just the few who shelled out hundreds of dollars for the Vista upgrade. But most embarrassingly, Vista users are experiencing significant performance gains from the crisis, as disabling Aero graphics--the most obvious new feature in Vista--has resulted in users reporting a huge boost in performance.

The WOW Stops Now.

So, while WGA is intended to police piracy, it’s really just highlighting the true failure of Vista for the willing few who paid extra specifically to upgrade for the WOW experience. Microsoft posted a message asking users to try again in four days, hoping
that by Tuesday, the company will have the server back up:

“I'm sorry to inform you that the Windows Genuine server might be down for few days. I have escalate [sic] the issue to our Genuine team, kindly try to validate again on Tuesday 28 Aug 2007.”

Until then, Windows users were left under house arrest as suspected thieves and their systems set in feature lockdown mode.

Profiteering on Overpriced Software to Help Consumers.

Microsoft announced the WGA program in early 2005 as a way to stop consumers and businesses from being “hurt by counterfeit software,” saying in a press release that “many companies that sell legitimate software have difficulty competing with the artificially low prices offered by software counterfeiters.”

That was bitterly ironic to note, as the only software protected by WGA is Windows, which through Microsoft’s exclusive OEM licensing deals has an artificially low price that prevents any real competition to Windows. At the same time, Windows is priced far higher than other desktop operating systems, and has increased in price as other PC hardware and software cost have gone down. Microsoft is earning record profits on Windows distribution, 80% of which it reports comes from bundled licensing.

As an incentive to install the WGA DRM tool, Microsoft offered users a free “Winter Fun Pack 2004” and discounts and trial offers for its online services. When those weak incentives failed, the company began pushing Windows users to install WGA as a "critical software update," which is dishonest because WGA does not solve any critical issues for users; it is merely an anti-piracy tool.

Further, any attempts to work around Microsoft's WGA after installing it, including efforts to work around Microsoft’s own server meltdown, have been criminalized by the US Congress under the Digital Millennium Copyright Act.

Microsoft's Illegal-to-Remove Spyware.

Through 2006, WGA was set to contact Microsoft every day; after consumer complaints and lawsuits described the system as spyware, Microsoft announced plans to only have the system phone home every two weeks.

Windows users are now required to download and install WGA in order to obtain new versions of Windows Media Player, Internet Explorer, and Windows Defender, which is--somewhat ironically--Microsoft's own anti-spyware tool.

This lines up Microsoft's WGA as a second nominee for the August Zoon Awards for spectacularly bad work in promoting the regression of human achievement.

Microsoft’s nomination follows yesterday’s announcement naming ZDNet shill George Ou for publishing fact-refuting, intellectually embarrassing misinformation. Readers will have an opportunity to vote, and there's five days left for
nominations, so don't hold back with your own.
http://www.roughlydrafted.com/RD/Tec... 3A_Q2_2.html

States Seek More Oversight of Microsoft

A group of states led by California said in a court filing Thursday that ending oversight of Microsoft's business practices in November would not allow enough time to consider the antitrust implications of Windows Vista.

Microsoft Corp., the Justice Department and the California group were asked to submit reports by Thursday on the effectiveness of the 2002 antitrust settlement, whose consent decree set rules that govern Microsoft's business practices.

The consent decree aimed to make it possible for Microsoft's middleware competitors - software makers who built programs that run on top of the Windows operating system but act as a platform for other development, like a Web browser - to compete fairly, even if Microsoft's operating system monopoly persisted.

"Microsoft has not directly contravened these provisions," the states' report said.

But the California group said that the consent decree has not yielded any more competition. The report cites Microsoft's continued dominance in the operating system market and the fact that few, if any, PC makers have sold computers with non-Microsoft Web browsers set as the default, among other examples.

The California group also said the January launch of Microsoft's latest operating system, Windows Vista, changes the game.

"As a practical matter, termination of the Final Judgment means ... plaintiffs will not be able fully to assess the impact in the marketplace of Microsoft's recent introduction of Vista," the group wrote.

In its report, the Justice Department said it appeared the consent decree was working. Web browsers like Mozilla's FireFox and Apple Inc.'s Safari present "renewed competition," as do the increasing popularity of programs available through a Web browser.
"The final judgments have been successful in protecting the development and distribution of middleware products and in preventing Microsoft from continuing the type of exclusionary behavior that led to the original lawsuit," Thomas O. Barnett, assistant attorney general in charge of the Justice Department's antitrust division, said in a statement.

The justice department said in its report that while Microsoft's operating system market share hasn't dropped because of the consent decree, "it would misapprehend the purpose of the Final Judgments to rely on these facts to argue that the Final Judgments have been ineffective. Microsoft was never found to have acquired or increased its monopoly market share unlawfully."

In its report, Microsoft directly countered California's claims and said, the "Final Judgments were never designed to reduce Microsoft's share in any putative market."

The federal court is expected to release a status report on Microsoft's compliance with the consent decree Friday.

Listen to SIP Phones Even When They are on the Hook

Recently disclosed information suggests that it is a relatively simple matter to remotely eavesdrop on a broad range of SIP-enabled devices. For readers who aren't aware of what SIP-enabled devices are, SIP (Session Initiation Protocol) is a protocol that is used by a lot of VoIP software and associated telephone handsets to establish, modify, and control a VoIP connection between two parties.

The research that was published indicates that, for at least one vendor, it is possible to automatically call a SIP device from that vendor and have it silently accept the call, even if it is still on the hook - instantly turning it into a classic bugged phone. Whereas historic telephony bugs needed physical targeting of the line running to a property or place of business, the presence of VoIP in the equation allows bugging from anywhere in the world with equal ability. Now anyone can do from their armchair what only spies and law enforcement used to be able to do from inside the telephone switch / pit / distribution board, though it's still illegal to do so.

As well as bugging the phone, the action effectively acts as a Denial of Service against the device (after all, it is already engaged in a call).

Having found the bug via fuzzing, the discovering researchers believe that there may be a number of vendors that have created their own SIP networking code, with equivalent bugs contained within.

While the vendor concerned is expected to release appropriate patches soon, the disclosure is likely to turn attention on other SIP device providers.

This may already be happening, with two separate exploits released publicly in the last couple of days targeting Cisco SIP handsets, with the result of a Denial of Service condition against the phones. VoIP client software from eCentrex has also been targeted with public exploit code, except this time it allows for control over vulnerable devices as a result of a remote buffer overflow condition.

Concerned users and administrators who have SIP enabled software or hardware should be aware of their potential limitations and have appropriate mitigation strategies in place, especially if they are used in sensitive areas (military use, national secrets, trade secrets, etc).

Nokia to Introduce Digital Music Service
Eric Pfanner

In the same converted 19th-century fish market where Apple announced the European introduction of its iTunes music store three years ago, Nokia said on Wednesday that it would soon introduce its own digital music service, along with an easier-to-use Apple-style mobile interface and an Apple-style touchscreen handset.

The Nokia Music Store, to open this year, will let users download songs from the Internet to their computers or directly to mobile phones over wireless networks, which Apple’s recently released iPhone cannot do.

Analysts said the move heightened the rivalry between Nokia and Apple at the high end of the mobile phone business. “It was obviously going straight at Apple,” said Seamus McAteer, senior analyst at M:Metrics, a research firm.

While Nokia executives chose suits and ties rather than the black mock turtlenecks and blue jeans favored by Steven P. Jobs, Apple’s chief executive, they acknowledged that Nokia was not above imitating its rival.

“I don’t know what is copying and what is original but if there is something good in the world, we copy it with pride,” said Anssi Vanjoki, head of the Nokia multimedia division, which makes the company’s high-end handsets, when asked about similarities between the iPhone, iTunes and the new devices and services announced by Nokia.

In offering direct downloads, the Nokia Music Store goes beyond iTunes, which requires users to download songs to their personal computers before transferring them to an iPod music player or an iPhone.

The Nokia store, which the company said would be made available first in important European markets, could put pressure on Apple to develop a similar service, analysts said.

The music store also potentially puts Nokia into conflict with operators of mobile networks, which in many cases have developed music services of their own.

But analysts say that outside of Asia, mobile phone services like music have been relatively slow to take off, despite the tens of billions of dollars that network operators have poured into the technology to enable them.

“Now Nokia is saying, ‘You guys had your chance to run music stores, or whatever, and it didn’t work, so now we’re going to give consumers what they want,’ ” said Paul Jackson, an analyst at Forrester Research.

In addition to the music store, Nokia said it would revive a game platform called N-Gage, with a number of video game publishers agreeing to supply games to download. The company said it would make all of its mobile content and Internet services available under the brand Ovi, which means door in Finnish.

Nokia, which is based in Finland, showed pictures and video clips of the interface that will allow users to navigate through the various Ovi services. Analysts said it appeared to resemble the interfaces for the iPod, iPhone and iTunes, whose simplicity has been seen as a chief selling point.

But analysts said they were frustrated by a lack of detail about the Ovi offerings.

“It’s a bit of an empty shell for now,” said Mark Newman, chief research officer at Informa Telecoms and Media.

Nokia also introduced several phone models on Wednesday with increased storage capacity for music and other media content and said it would introduce its touchscreen phone next year.

While Nokia clearly has one eye on Apple, analysts said network operators might more directly feel its move into services, and that could affect relationships with device manufacturers.

Orange, which is part of France Télécom, for example, has a partnership with the phone maker Sony Ericsson, under which its Walkman-branded phones send users to the Orange music store at the touch of a button. Apple, meanwhile, has signed an exclusive iPhone distribution agreement with AT&T in the United States and is reportedly pursuing similar arrangements for the pending introduction of the phone in Europe.

Analysts said mobile operators who agreed to carry certain Nokia multimedia phones might try to demand that the company disable features that overlap with the carriers’ own services.

Yet Nokia has a strong negotiating position, analysts added, because it sells about 400 million phones a year — more than one-third of the global market — so the network operators might not be able to drop a popular handset from their lineups.

Despite all the jockeying for position, the appeal of mobile download services remains uncertain. Even in the leading European market for mobile music, Britain, fewer than 3 percent of cellular subscribers downloaded songs wirelessly in January, according to M:Metrics. About 12 percent of subscribers, meanwhile, listened to music that had been transferred to their phones from personal computers.

“How to get them to switch over to something like the Nokia music store remains unclear,” said Martin Garner, an analyst at Ovum.

Nokia said it would price music downloads at 1 euro for each song, or 10 euros for each album, in the same price range as many existing mobile music services. In addition, customers would have to pay for the use of phone networks for the download, though many operators are starting to offer monthly flat-fee packages.

Wages of sim

NJ Teen Trades His Unlocked iPhone for Three More and a Sports Car
Nilay Patel

While the rest of us patiently wait for either UniquePhones or iPhoneSIMfree to call high noon on AT&T's legal team and release their software unlocks, 17-year-old George Hotz is cashing in on all those hours of work it took him to work his hardware magic: Terry Daidone, the founder of phone reseller CertiCell, traded three locked 8GB iPhones and one Nissan 350Z to get his hot little hands on Geohot's unlocked unit. Geohot says he'll give the three phones to his first PayPal contributor and two of his hacking accomplices, and we're betting that car will come in handy when he heads off to college this week. Hey, we've got an unlocked iPhone sitting around here somewhere -- but we're not settling for anything less than an actual sentient KITT.

Unlocked iPhones Highlight DMCA Absurdities
Nate Anderson

As of late 2006, cell phone unlocking became legal in the US, but don't tell that to AT&T; the company has unleashed the lawhounds on UniquePhones, a Belfast-based company that claims to have developed a software-only method to unlock the iPhone. By trying to sell the software commercially, though, the company may have ensured that it will never see the light of day.

Let's fire up Mr. Peabody's Wayback Machine and jump to late 2006, when the ability to unlock a cell phone became an American right (for three years, at least). The decision was made by the Library of Congress, which oversees a triennial rulemaking to establish exemptions to the DMCA. In its 2006 ruling, the Library noted that phone companies were bundling digital locks with their handsets not in order to protect copyrights, but business models—not what the DMCA was meant to do.

"The underlying activity sought to be performed by the owner of the handset is to allow the handset to do what it was manufactured to do—lawfully connect to any carrier," wrote the Library. "This is a noninfringing activity by the user."

That decision has recently become even more important with the explosion of iPhone Fever. iPhones are only available on AT&T's network, but there's no technical reason why they can't function on any GSM network. In the US, that means T-Mobile, but the options are far more plentiful in Europe and Asia. Some European users have already gotten the iPhone up and running on local networks.

That's why it's not surprising that Belfast-based UniquePhones would have developed iPhone-unlocking software. But selling that software in America could be a dodgy proposition, as AT&T has made its displeasure clear. Could it sue, despite the DMCA exemption that makes unlocking legal? Possibly.
Use, but don't distribute

That's because the DMCA exemption allows for using tools to unlock a phone but does not provide explicit protection for those who distribute such tools. That could put companies like UniquePhones in AT&T's legal crosshairs if they attempt to sell such software in the US.

So long as UniquePhones wants to profit by offering a commercial iPhone unlocking product, AT&T can halt distribution by bringing pressure to bear on the company. Should the company release its tool (in either open- or closed-source versions) into the wild, stopping its spread would be impossible; one need look no further than the recent AACS key fiasco or the DVD industry's attempt to bottle up DeCSS to see why.

Unlike most phones, the iPhone isn't being heavily subsidized by AT&T, so it's not clear why the company should have the right to control what people do with a product they have purchased for hundreds of dollars. Would computer owners pick up an iMac that only worked with AT&T's DSL service?

The situation just shows up the DMCA's convoluted absurdities in unusually stark relief. While the law has done plenty of good—just think of what the "safe harbor" provisions have meant for ISPs and startups like YouTube—reform is still needed. Allowing consumers to unlock their own property (especially when it's not subsidized) but not allowing them to purchase the tools to do so is the sort of situation that belongs only in Kafka, not in modern rulemaking.

And don't forget: the exemption for unlocking cell phones must be granted every three years. That means it must be defended anew at great time and expense. In the last rulemaking, the CTIA (a trade group representing wireless carriers) filed its comments after the deadline, and they were not allowed. You can bet they'll be better prepared in another two years, at which point even this one consumer-friendly exemption could vanish.

Why Apple Can't Stop iPhone Hackers

AT&T and Apple may face an uphill battle prosecuting hackers who untether the iPhone from the AT&T wireless network
Olga Kharif

It sure sounds like a steal. On Aug. 31, George Hotz plans to trade in his iPhone for a metallic blue Nissan (NSANY) 350Z sports car and three brand-new iPhones. But the 17-year-old's device is no ordinary Apple phone. Hotz hacked his iPhone and unlocked it so that it can be used on a variety of cell-phone networks, becoming the first person known to have done so. The person buying Hotz's phone, Terry Daidone, believes he's the one getting the deal because Hotz has agreed to work for him at his cell-phone refurbishing company, CertiCell.

Daidone says he doesn't plan to sell unlocked iPhones just yet. Rather, he says that he wants Hotz to teach CertiCell's technicians the secrets to unlocking other kinds of cell phones. But that could change—if he can clear up legal questions surrounding the practice of unlocking mobile phones. "As the need arises to unlock phones, we should be at the forefront of that," Daidone says.

Apple (AAPL) and AT&T (T), the sole authorized supplier of the iPhone in the U.S., are doing what they can to make sure that legal clearance never comes. The two companies have put their lawyers on the case, applying pressure on hackers involved in unlocking iPhones to try to get them to stop. Much is at stake. AT&T has been hoping that as the exclusive provider of the iPhone, it will see a surge in new customers and monthly service charges of at least $60 from each one. Apple is supposed to get a cut of the revenues. If iPhones are unlocked, they can be used on the wireless networks of rivals like T-Mobile USA—and AT&T gets zippo. AT&T wouldn't comment for this story, while Apple didn't return a request for comment.

Fuzzy Laws

So will Apple and AT&T's legal action deter hackers? Hardly. Individual users are already allowed to unlock their own phones under an exemption to the Digital Millennium Copyright Act (DMCA) that the U.S. Copyright Office issued last November. The exemption, in force for three years, applies to "computer programs…that enable wireless telephone handsets to connect to a wireless telephone communication network, when circumvention is accomplished for the sole purpose of lawfully connecting to a wireless telephone communication network."

What's less clear is whether companies and hackers can legally unlock the phones and then sell them to others, or sell unlocking software. "The law here is unclear," says Jonathan Kramer, founder of Kramer Telecom Law Firm in Los Angeles. "There just isn't any case law in this area for us to figure out how it plays out."

Experts believe that AT&T and Apple will point to the DMCA's section 1201, stating that "no person shall circumvent a technological measure that effectively controls access to a work protected under this title." They will claim that a phone lock is just such a technological measure that protects copyrighted work: namely, cell-phone software.

Hackers Undeterred

Problem is, it could be argued that, in reality, the lock only protects access to a carrier's communications network—and communications services aren't copyrightable under the Act, explains Jane Ginsburg, professor of literary and artistic property law at Columbia Law School. "This law was written for DVDs and video games," she explains. "What's going on here is using the Copyright Act to achieve another objective."

Indeed, this time, hackers may have the law on their side. Remember, decades ago, automakers built their instrument panels so that only authorized radios of their own manufacture would fit in. Eventually, U.S. courts ended that practice.

"If Apple and AT&T push too hard, they might see a revision of [the Copyright Act, and it won't be in their favor]," says Richard Doherty, director of consultancy the Envisioneering Group.

That's why, for now, some hackers contacted by AT&T lawyers still plan to release their wares. "Over the next few days…you will get what you are looking for," promises an Aug. 27 message posted on the Web site of UniquePhones, which helps people unlock mobile phones.

Opening Up the Networks

Demand for unlocked iPhones, which sell for $499 and $599, is rising. Already, the phone has become a cultural phenomenon, with enthusiastic fans going to great lengths to get their hands on one. Consumers in rural areas where AT&T doesn't have a network or in markets with spotty AT&T coverage may want to use the popular device through T-Mobile's network. Overseas, consumers want to try it in conjunction with Orange (FTE) and Vodafone (VOD) wireless service. "If Apple offered unlocked iPhones for $1,200, they'd probably sell some," Doherty says.

Frustration over locked iPhones is showing up in the courts as well. A class-action lawsuit filed on Aug. 27 in the Supreme Court of the State of New York tells of an iPhone buyer who racked up $2,000 in charges because he couldn't use a different carrier's network while he was on a trip to Mexico. Filed against Apple, the suit claims the plaintiff didn't know that iPhone was tethered to the AT&T network.

Many hope that the legal wrangling will, eventually, result in major shifts in how the U.S. wireless industry operates. For one, a case could pave the way to making all wireless networks more open to unlocked phones. In the next five years, 10% to 15% of U.S. wireless users could move to unlocked phones, figures Andrei Jezierski, founder of venture consultancy i2 Partners in New York (see BusinessWeek.com, 12/4/06, "Motorola, Nokia Set Cell Phones Free").

Plus, to answer pent-up demand for untethered phones, a cell-phone carrier could differentiate its offerings by selling all of its handsets unlocked, says David Chamberlain, an analyst with consultancy In-Stat. "It's an anomaly that the phones are tied to individual carriers," he says. "Can we change that business as usual? Maybe. But people who want that will fight for a very long time."

Officials in Uproar Over Hacking Claims

German officials released a statement claiming that China has hacked into numerous ministry computer systems and has been stealing data since May.

The announcement came just as German Chancellor Angela Merkel left on her trip to Beijing, the Times of London reported Monday.

The claims have been denied by Chinese authorities but German officials are still angry.

“If true, it is unacceptable,” Ralf Stegner, a senior Social Democrat, told The Times. “China is a competitor as well as a trading partner. Mrs. Merkel has to get to the bottom of the affair on her China trip.”

Merkel, who arrived in China Sunday night said, “We are pursuing the issue of protection of intellectual property very strongly with China.”

Her visit was meant to be about climate change and the 2008 Olympic Games but the espionage claims will now take precedence at the meetings, said Britain’s Independent.

The Chinese Embassy in Berlin has also called the reports "irresponsible speculation" and "completely unproven."

FotoFlexer Raises The Bar On Online Photo Editing
Michael Arrington

Online photo editors keep getting better and better. For hardcore image manipulation, desktop software like Photoshop or Gimp will always have its place, but online editors are free, easy to use and a lot of fun. We covered most of the online editors back in February (Fauxto, Picnik, Picture2Life, Preloadr, PXN8 and Snipshot). But a relative newcomer on the scene, Berkeley-based FotoFlexer, is worth a look.

The site first launched in July with basic functionality and integration with Facebook. This last week they relaunched a new site with more tools, direct access to your desktop/laptop webcam, and they also now integrate with Flickr, Picasa and MySpace.

Upload a photo, or grab one from a supported service, and edit it by changing colors, adding effects, bulging or pinching areas (to make body parts look larger or smaller), etc. You can also turn any image into a sketch or cartoon. I spent about 10 minutes creating the different versions of the picture to the right (original is top left). The most fun is changing hair color, although the image third down on the left is my personal favorite.

Fotoflexer says they incorporate their own artificial intelligence algorithm to figure out the right way to alter images. And whatever it is they’re doing, it works. You simply point out a few areas of the site you want to remove or alter and it figures out the rest of the pixels pretty quickly. You can do all of this in Photoshop, but it takes a lot longer. And unlike most (but not all) of the online photo editing tools we’ve previously covered, FotoFlexer also supports layering for more complicated image editing.

FotoFlexer also now integrates directly to your webcam and to take a quick snapshot and edit it. Many of the effects are similar to the Photo Booth application that comes installed on all Macs.

The integration with third party services is a great feature as well. Pull down photos from Facebook or another service, alter them and re-upload in a few minutes.

The service runs in Flash and was built on the Flex platform with mostly custom tools. The company has not raised any capital and has 15 employees, all in the Silicon Valley/Bay area. About 50,000 people use their Facebook application and/or the website directly. I expect that number to grow as social networkers discover the joy of turning their pictures into cartoons, or turning their hair color to Fuchsia.

Summer Boxoffice Tops 2004 Mark
Gregg Kilday

Hollywood attempted to squeeze a few more dollars out of a record summer by launching a handful of midrange movies that mostly came up short at the North American boxoffice during the weekend. But the strength of the holdovers kept the ticket-takers busy, especially Sony Pictures' raunchy, R-rated "Superbad," which held down the top spot for the second weekend in a row.

Summer-to-date, The Hollywood Reporter estimates that total boxoffice has reached an estimated $4.11 billion, surpassing the record of $4.009 billion set during summer 2004.

Following in the footsteps of "Spider-Man 3" and "Pirates of the Caribbean: At World's End," "Superbad" -- from producer Judd Apatow -- became only the third film in this competitive summer to reign as leader of the pack for two weekends in a row. Falling off just 45% from its first weekend, the comedy took in $18 million, raising its domestic cume to $68.6 million.

In its fourth weekend of release, Universal Pictures' spy chase "The Bourne Ultimatum" demonstrated an even stronger hold, declining just 37% from the previous weekend. "Bourne" collected an additional $12.5 million, enough to earn it the second slot and a new cume of $185.3 million.

New Line Cinema's action comedy "Rush Hour 3," in its third weekend, also survived the onslaught of new films. Falling 45%, it attracted nearly $10 million as it crossed the $100 million mark -- the 19th film this year to do so -- and reached a domestic cume of $108.5 million.

The G-rated comedy "Mr. Bean's Holiday," from Universal and Working Title and starring British comedian Rowan Atkinson, proved the most potent of the weekend's new arrivals. Debuting in 1,714 theaters, it scored $9.89 million to squeeze into fourth place overall. Hot on its heels was Lionsgate's R-rated action pic "War," starring Jet Li and Jason Statham, which bowed in 2,277 theaters and grossed $9.82 million.

Finishing in sixth place was MGM's release of the Weinstein Co.'s "The Nanny Diaries," a satirical look at child care on New York's Upper East side starring Scarlett Johansson and Laura Linney. Although the PG-13 film enjoyed the widest bow of the new arrivals, setting up shop in 2,629 theaters, its weekend gross was just $7.5 million.

The Yari Film Group's "Resurrecting the Champ," Rod Lurie's dramatic study of the relationship between a sportswriter and a down-on-his-luck boxer starring Josh Hartnett and Samuel L. Jackson, met even more resistance. Going against the grain of the late-summer escapism, the PG-13 film entered the ring in 1,605 theaters but made just $1.7 million for the weekend. In 15th place, it grossed just $1,059 per theater.

Right behind it, in 16th place, Universal's crime tale "Illegal Tender," directed by Franc. Reyes, achieved a stronger per-theater average of $2,734, but because it bowed in just 512 theaters, its weekend haul was held to $1.4 million.

The most painful debut of the weekend belonged to director Christopher Cain's "September Dawn," the re-creation of a 19th century massacre committed by a band of Mormons. Released through Slowhand Releasing, the R-rated film found just $901,857 in 857 theaters, notching a per-theater average of just $1,052.

Cumulatively, the frame marked the seventh weekend in a row in which boxoffice was stronger than the comparable weekend a year ago. The 108 films tracked by The Hollywood Reporter collectively grossed $108.5 million, a 5% improvement compared with the $103 million grossed during the comparable frame in 2006.

On the specialty film front, Miramax Films' "Becoming Jane," in its fourth weekend, picked up $1.9 million in 1,210 theaters to bring its cumulative gross to $12.7 million.

Walk on the wild side

The Wachowski Brothers are No More!
Jason Triplett

UPDATE: Over a year later, and we have the big follow-up news on this story! Check out the below link for more on the story covered in this article:


It is no big secret that Larry Wachowski, one half of the filmmaking duo "The Wachowski Brothers", has been undergoing gender reassignment. Despite the fact that the secretive Wachowskis never give interviews, the news has been around since well before 2004. Larry has been undergoing a very long and painful sex change to become "Linda", and due to this, the famed duo may be done for.

A source close to the brothers say that Larry is indeed now officially Linda. The major aspects of the surgery have been complete for some time now, and he (I'm sorry, "she") is now undergoing further hormone treatment and psychological therapy. He has also legally changed his name. The change has put a tremendous strain on his relationship with his brother, but Andy sticks by him regardless of his choices. The source also mentioned that Linda, formerly Larry, is contemplating leaving film for good. This was recommended by his therapist. If he does stay in the team, he obviously won't be a "he" anymore, so the team would be called simply "The Wachowskis".

So what of his long time affair with the famous dominatrix Mistress Ilsa? Well Larry has always been fascinated, if not obsessed, with lesbianism. So he would still be "gay" so to speak, but in the woman + woman category. All of his most recent public appearances were as a woman, save his court appearance, in which he was still very effeminate.

Will Linda ever come out to the public and admit what has happened? That all depends on how the therapy goes. For now, all we can do is wait and see where this goes. There is word that Andy is writing again, so perhaps the project can bring the Wachowskis back together. I have also heard from another source that Dateline NBC is attempting to score the exclusive television interview with the duo, but something tells me it isn't going to happen.

Some of you may still be in denial about what has been happening, so if you like, you can take this with a grain of salt. However, if you want to see how far larry's rabbit hole really goes, Check out these links, just a few of the many reports of tis change that are out there:




Daemon on wheels

Susan Sarandon Talks about the Wachowski Brothers SPEED RACER and Confirms Something Revolutionary

Earlier today I did the press junket for “In the Valley of Elah” and was able to participate in a press conference with Tommy Lee Jones and Susan Sarandon. In the coming week or two I’ll be posting the full transcript of the interview…but due to some comments that Susan said about “Speed Racer,” I had to post what’s below immediately.

Before we go any further, some background.

A few months ago I heard this crazy story that The Wachowski Brothers were filming "Speed Racer" with a new type of camera that was revolutionary and the final film would look like nothing we’d ever seen before on a movie screen. But try as I might, I couldn’t second source the info and find out exactly what was going on.

Then, a bit later, I heard more specifically what they were doing. Supposedly they were going to make the entire frame always in focus… like a cartoon. I had heard that the reason for the long filming process was not due to the extensive blue screen work, but due to this new look that they were going for and, once again, I still couldn’t second source it.

And while I did get some info on the camera out of one of the stars, Hiroyuki Sanada, it was not as much as I’d hoped for.

But I can now officially confirm these rumored stories as Susan Sarandon answered my Hail Mary pass when I asked her the question below. And if you’d like to listen to my question and her answer, click here to download the entire interview. The time index you’d want is 20:45. Also notice how Tommy Lee Jones keeps asking the questions…

Question: Susan, could you talk about working with the Wachowski Brothers and filming in Berlin and also the new camera that they’re using?

Susan: I love the Wachowski Brothers. Basically all I do is make pancakes in the movie and stand around and serving breakfast to everybody.

Tommy Lee Jones: What camera are they using?

Susan: They’re using some high def thing that comes with guards and it’s beyond anything I’ve ever…. I saw 10 minutes before I left, they did a special thing for me cause they’re just wrapping and having a party tonight, they were still working after I left. They’re doing something where they’re layering film so that the front and the back are in focus like a cartoon and they’re also doing two dimensional and three dimensional stuff and mixing and everything is very, very saturated with some new kind of film, so they actually have to treat the actors in some way so we can hold our own with the background. So it’s every color that wasn’t in The Matrix is seriously in this film.

Tommy Lee Jones: The camera comes with guards?

Susan: Yeah, yeah. When I talked with them on the phone – I’d never met them – when they asked me to do it, I had two conversations with them because it’s a very small part and it was a very long commitment because of the way they were shooting this. At a certain point I just said I don’t have the faintest idea of what you are talking about, I’m in. I just thought when am I ever going top get a chance to be up to my neck in something I understand so little about and they definitely fulfilled my expectation. But they have these two big, huge, widescreen things…at the end of the day you can see how everything is going to be before it’s treated and they have a room of 200 or 300 guys that are doing all the background, it’s insane. And we were shooting on 4 stages and it was really interesting and a lovely experience and all the actors were great and I was working with a monkey…I’m sorry a chimpanzee – he doesn’t like to be called a monkey. It was wild… and they’re very, very sweet. They have complete control which is every director’s dream.

Tommy Lee Jones: What is the movie about?

Susan: It’s a cartoon called Speed Racer which they’re now making into a movie. What the stories about is John Goodman and I are mom and pops and he makes racing cars and it’s about the corruption of sports by corporations and of course while we were doing it all these horrible things were happening in the sports world – including the racing world. It’s all about cheating and betting and how things are fixed and everything else, but it’s also about family values and pancakes are love.

Q: There is a lot of talk that it might be rated G? Are they still going for that?

Susan: Yeah.

Once again it seems that the Wachowski Brothers are going to push the envelope of special effects even further and I cannot wait!

Fate of the Cosmos (and of a Studio) Hangs in the Balance
Michael Cieply

Not since Dorothy landed on the witch has a young girl shouldered quite so many worries as 12-year-old Lyra Belacqua.

The fate of the universe, certainly. A movie budget of $180 million, at least. The future course of New Line Cinema, perhaps.

For the last year New Line has been wrestling with its London-based production of “The Golden Compass,” an ambitious fantasy in which Dakota Blue Richards, a schoolgirl with no previous credits, plays the intrepid Lyra. Supported by Nicole Kidman and Daniel Craig, Ms. Richards’ character is the heroine in what is planned to be the first of three movies based on Philip Pullman’s “His Dark Materials” series of novels, New Line’s answer to Disney’s “Narnia” films.

There have been challenges, including touchy anti-religious themes in the underlying material, a minuet with on-and-off directors and script revisions that continued through late last month. And Ms. Richards is not alone on the learning curve.

Set for release on Dec. 7 “The Golden Compass” is being directed by Chris Weitz, best known as a creator, with his brother Paul and others, of the successful raunch comedy “American Pie.” Mr. Weitz’s closest brush with film fantasy, other than the teenage sex kind, was “Down to Earth,” a 2001 remake of the body-swap comedy “Heaven Can Wait.” New Line, of course, reinvented fantasy with its “Lord of the Rings” series, directed by Peter Jackson. But each of those films cost far less than what is being spent on Mr. Weitz’s movie, the most expensive the studio has ever made.

All of which heightens the drama around a film that comes as the New Line’s co-chairmen, Robert Shaye and Michael Lynne, face contract renewals late next year with the studio’s parent, Time Warner.

Toby Emmerich, New Line’s production president, acknowledged the importance of “The Golden Compass” to the studio. “If it’s a huge hit, I think our stock goes up within the Time Warner empire, and there’s more opportunity,” Mr. Emmerich said. If the film is a disaster, he added, the company’s prospects would likely darken. But he pointed out that New Line, in keeping with past practices, has reduced its financial risk by pre-selling foreign rights to foreign distributors.

Not incidentally, New Line’s economy-minded corporate parent played with the notion of melding this mid-level studio with its much larger Warner Brothers unit before “The Lord of the Rings: Fellowship of the Ring” erupted six years ago. That idea could again prove attractive, if New Line, currently a distant seventh in terms of domestic box office receipts, doesn’t improve a record that has only lately perked up a bit with “Hairspray” and “Rush Hour 3.”

With “The Golden Compass” much still hangs in the balance. Its filmmakers completed a four-month shoot in England, Switzerland and Norway last January, and Mr. Weitz screened a cut for top New Line executives in May.

But as recently as last month Mr. Weitz, who wrote the script’s current version, following earlier drafts by the playwright and screenwriter Tom Stoppard, was revising scenes that set up the movie’s complicated story about a girl’s struggle against repressive authority.

Mr. Weitz, speaking from London, said the latest changes were largely intended to bring clarity to a tale that depends on obscure elements, including a powerful cosmic substance known simply as “dust.” “Dust is kind of like our version of the force,” said Mr. Weitz, referring to a bit of “Star Wars” mythology. “But somehow the force is much easier to explain.”

These revisions are just the latest step in a 12-year effort by Hollywood to harness the energy of the immensely popular books — about five million copies have been sold in the United States, according to a spokesman for Random House Children’s Books, their American publisher, and more than 12 million worldwide — which was long held back by their idiosyncrasies, which include the presence of an animal companion, or daemon, for every human character.

Originally published in 1995 in Britain as “His Dark Materials I: Northern Lights,” “The Golden Compass” begins at a vaguely familiar Oxford University, where the author attended Exeter College. But technology has veered toward so-called anbaric lights and fanciful zeppelins. The North is full of witches and armored bears. And a twisted church and its allies have gotten into the business of separating children from their soul-mate daemons, for reasons fraught with deeper metaphysics than Hollywood can typically digest.

No fan of C. S. Lewis’s Christianity-infused “Narnia” novels, Mr. Pullman, who drew inspiration for his story from Milton’s “Paradise Lost,” has publicly declared that his own books were intended to undermine Christian belief. In the trilogy’s first installment, however, the core of Mr. Pullman’s philosophy, which involves humanity’s confrontation of a less-than-perfect deity, is far less apparent than is his taste for complicated adventure. (Ms. Kidman, who is Catholic, has explained her participation, saying that she would never sign up for the films if she thought they were anti-Catholic.)

“As a film it was a huge challenge,” said Deborah Forte, president of Scholastic Entertainment and one of the movie’s producers.

Though she waited for Mr. Pullman to finish the third book before approaching studios about funding for a script and production, she found virtually no interest, even though the first “Harry Potter” film was about to reach theaters.

“Everybody said it had to be animated,” Ms. Forte recalled. Hollywood interest sparked, however, when Mr. Pullman in early 2002 won the prestigious Whitbread literary prize, just as Mr. Jackson’s first “Lord of the Rings,” released in December of 2001, was pointing toward new possibilities in visual effects.

New Line soon took on the project. Mr. Stoppard, a fan of the books, as Ms. Forte recalled, then said he would like to adapt them. In Mr. Stoppard’s versions the books’ religion-touched heavies were massaged into more generalized, authoritarian villains, as they remain in the final film. (Ms. Forte, said Mr. Pullman is comfortable with the shift. Attempts to reach him weren’t successful.)

Mr. Weitz, another fan, next appeared with an unsolicited 40-page treatment. He was hired to write, and then to direct, the movie, but had a failure of nerve in 2004 and pulled out, largely because he feared the long commitment to a complicated production.

He remained as writer, however, while Anand Tucker (“Shopgirl”), another director with little background in the complicated world of special effects, came on board. With the film already in preproduction, Mr. Tucker left in the spring of 2006, citing creative differences. According to Ms. Forte, he appeared pointed toward a smaller, less exciting film than New Line hoped to make. And Mr. Weitz, who had continued to work on the script, was soon back in place.

“I think Chris realized that if he didn’t come back in and step up, maybe the movie wasn’t going to get made,” Mr. Emmerich said. “We really didn’t have a Plan B at that point.”

The project’s extraordinary expense was due in large part to the business of the daemons, which had to be inserted in not just major set pieces but even simple dialogue scenes.

“It’s like directing that character,” Ms. Forte said of the myriad appearances by a snow leopard, jackal, ferret, mouse, ermine, chameleon, golden monkey, various birds and others, not to mention those non-daemonic armored bears.

A 10-minute sequence shown by New Line at the recent Comic-Con fantasy convention and elsewhere has been well received, and the studio is waiting for a script from Hossein Amini (“Killshot”) for a second film, based on the second book, “The Subtle Knife.”

Mr. Weitz said that whether that film is made, and whether he ends up directing it, will depend heavily on how “The Golden Compass” performs.

“My whole plan with the movie has been not to think past December 7th,” he said. “Otherwise I would go completely insane.”

Call for Peace-Themed Content for New Online Peace Channel

World Peace day to launch new free web channel, although only on Joost

From Peace One Day founder Jeremy Gilley:

I am writing to you from the international film project Peace One Day, which I launched in 1999 to document my efforts to create the first ever annual day of global ceasefire and non-violence with a fixed calendar date. In 2001, Peace One Day achieved its primary objective. The United Nations General Assembly unanimously adopted a resolution formally establishing an annual day of global ceasefire and non-violence on the UN International Day of Peace fixed in the global calendar on 21 September – Peace Day.
Since then, with the backing of world leaders, Nobel Peace Laureates, corporations and countless individuals around the world, Peace One Day has been working to raise awareness of Peace Day and to engage all sectors of society in the Day’s peaceful observance in accordance with the resolution. On 21 September 2006 there were activities in 200 countries, directly involving 27.6 million people.

The feature documentary Peace One Day, produced in association with the BBC [Storyville] and Passion Pictures received nominations for Best Documentary by the British Independent Film Awards in 2004 and for Best Director by the Directors’ Guild of Great Britain in 2005.

Peace One Day is now proud to announce the launch of its very own interactive Internet television channel -- Peace One Day TV. The channel will reflect the ethos of Peace One Day and the peacemaking community as a whole. It will entertain, empower and inspire action. It hopes to include material representing each continent and eventually provide programming available in the 6 official languages of the UN. The channel will be hosted by Joost - the company responsible for the hugely successful Skype - and it will combine all that’s exciting about TV (including a high-quality full-screen picture) with the interactive power, fun and accessibility of the Internet. Peace One Day TV will launch in September 07.

What we are looking for:

As well as featuring material generated from the birth and growth of Peace One Day itself, we would also like the channel to include footage from a wide variety of other sources.

We are looking for films whose content or inspiration is related directly or indirectly to the theme of peace. We want to fill the channel with positive programming, with stories about peace within our world. The films can be personal stories about individuals and the society they live in; they can be about empowerment, optimism, making a difference, community, mediation, reconciliation, self-development, change, history, cease-fire, non-violence, philosophy, building bridges; they can be about anything in fact that is related to process of creating peace and sustainability around the world and within our own personal lives.

This is a fantastic opportunity for filmmakers to get their work seen on a global platform, totally free.

We will accept films that have been recently produced, as well as those that were created years ago and have up till now remained unseen.

We are looking for content both for the launch this September and on an on-going basis thereafter.

Please send all material to:

Peace One Day TV
Block D
The Old Truman Brewery
91 Brick Lane
E1 6QL

Please send us a COPY of your film (not the original master), as we will unfortunately be unable to return anything that is sent to us.

If you would like to know find out more or have any questions regarding the above, please contact us on 020 7456 9180, info@peaceoneday.org or visit our website: www.peaceoneday.org.

I look forward to hearing from you.

With best wishes

In peace

Jeremy Gilley

POD is a non-profit organisation, impartial and independent of any government, political persuasion, corporation or religious creed.

Black Filmmaker Int Film Fest Kicks Off with Perry's Daddy's Little Girls
Nicol Wistreich

The Black Film Maker International Film Festival (BIFF) will be launched on 6th September at City Hall. A week of screenings from 7th – 14th September in London, at the Institute of Contemporary Arts (ICA) – Pall Mall and Odeon West End – Leicester Square will show over 50 unseen films, features, shorts, music videos, animation, documentaries, comedy and more.

BIFF was established in 1999 with the aim of filling a void within London’s film exhibition scene. Menelik Shabazz, BIFF founder, says: “There was a complete absence of black world cinema both in terms of the multiplexes and existing festivals like London or Edinburgh, which would show the occasional film but this was a long way short of the wealth and depth of work available.”

There was, therefore, an opportunity for a new cinema. The work of many filmmakers had become virtually marginalized, and audiences, particularly within the African-Caribbean community, were eager to see films that reflected the cultural experience of the UK’s black communities. The festival’s purpose was, and still is, to make a difference by ‘bringing the unseen to light’.

The Festival opens with TYLER PERRY’S “DADDY’S LITTLE GIRLS”, a romantic family drama staring Gabrielle Union (RUNNING WITH SCISSORS, BAD BOYS II, DELIVER US FROM EVA) and Idris Elba (HBO’s “THE WIRE,” THE GOSPEL, SOMETIMES IN APRIL) in writer/director Tyler Perry’s follow-up to his number one box office hits DIARY OF A MAD BLACK WOMAN and MADEA’S FAMILY REUNION.

This year’s festival includes two major competition elements. The main one is The Short Film Awards. This is a gala event which has been sponsored by BET (Black Entertainment Television) and will be held at the Odeon West End on Tuesday 11th September.

‘Are you the next Hype Williams?’ is the other key festival competition, which encourages young people to explore their creative potential by producing high quality, trail blazing music videos. Two winners will get the opportunity to work as part of a music video production team for Project Talent UK; the remaining eight finalists will have their film screened during the festival.

This dynamic and eclectic festival will have something for anyone who enjoys cinema.

Event: Black Film Maker International Film Festival (BIFF ’07)
Dates: 7th – 14th September 2007
Venues: ICA (Pall Mall) and the Odeon West End (Leicester Square).
For more information: festival@bfmmedia.com / 020 7540 0550 / www.bfmmedia.com
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BET Takes Heat for Animated Clip

BET is taking a bit of heat over an animated public service announcement encouraging viewers to pick up a book, brush their teeth, drink water and use deodorant.

The video was originally released as a MySpace single by Bomani Armah before BET later picked it up and aired it on "The 5ive."

The clip opens with a shot of "Raphael De La Getto High School," where police sirens and gun shots can be heard in the background. Next, we move to a Lil Jon-ish character rhyming about reading a "mothafuckin' book" over the theme to Beethoven's 5th ... with a beat on it, of course.

Hot 97 host Miss Jones and the LA Times have apparently both been criticizing the clip, for a procession of "negative black stereotypes, from a machine gun that shoots books, to the word ‘book' emblazoned across bouncing animated booties," as Vibe.com reports.

So, what was BET's response? The station's VP of animation told the NYTimes that the clip was meant to be "very satirical," and that it directly mimics and mocks current trends in hip hop (videos). True that.

Here's to wondering how this video would fare over at Funny or Die. I'm going with funny.

Watch the mothafuckin' video.

Digital DJs

By posting MP3s of songs before they hit stores, black gossip and hip-hop bloggers draw visitors, and the notice of record labels
Vanessa E. Jones

When Ahsmi Rawlins uploaded an MP3 of 50 Cent's unreleased single "She Wants It," featuring Justin Timberlake, he was only doing what he'd done almost daily since 2005, when he started his hip-hop blog, Nah Right. Rawlins had always been the first among his friends to discover new music. Offering MP3s, videos, and news on Nah Right allowed him to bring his savviness to a larger crowd.

In the past year, as they've grown in popularity, black gossip and hip-hop blogs such as Nah Right; Concrete Loop; Young, Black and Fabulous; and Crunk & Disorderly have become the place where record companies, producers, publicists, and artists present music to generate buzz and gauge interest in an artist. They're the urban version of indie and rock blogs such as Stereogum and Brooklyn Vegan, which about four years ago began uploading MP3s and videos.

Unlike those sites, the hip-hop and gossip blogs have a forebear in mixtapes: the R&B and hip-hop music compilations that the record industry has used for decades to create early excitement for music. But mixtapes have faced perennial legal hardships because of crackdowns by the Recording In dustry Association of America. As mixtapes' popularity wanes, fans have turned to black gossip and hip-hop blogs to find songs by artists such as Kanye West, Beyoncé, Common, and Ne-Yo. The music often arrives on the Web weeks before the official CD is released.

"Music bloggers are the new tastemakers of the moment," says Rawlins, who's based in New York. "It's the immediacy of the medium. We can throw something up so quickly and it reaches people within hours. Me, Concrete Loop, sites like those with a big readership, we've really established this reputation for knowing what's good, knowing what's going to be next. Our opinion holds weight. They realize it and are trying to take advantage of it."

Like the DJs who make mixtapes, bloggers have received a mixed reception in the record industry. Many executives recognize that Internet exposure can create a following for the artists that can translate into record sales. The Game's CD "Doctor's Advocate" leaked last year yet still debuted in the No. 1 spot of the Billboard album charts, selling 358,000 copies. A recent Capitol Records press release about J. Holiday's R&B single "Bed" featured a quote from Concrete Loop's music editor Brian Davis, as a sign of the single's growing popularity.

"Singles have always gotten into the marketplace before the album," says Ronnie Johnson, executive vice president of Capitol Records' urban music division, which works regularly with the blogs through its interactive marketing department. "If . . . you're only one single deep, then you should have concerns. But if you have real artists and you have a solid album, there should be no real concern."

However, there's a limit to how much exposure the record companies want to give. Capitol, for instance, prefers handing out streaming audio, because free downloads can curtail single and album sales. Relationships can grow tense when material by a major artist or a potential blockbuster song leaks. The day after Rawlins posted "She Wants It," from 50's highly anticipated CD, "Curtis," he received an e-mail from an executive at 50 Cent's label, Interscope, asking Rawlins to remove the song from his blog. Bloggers have been sent cease-and-desist letters from the legal departments of record labels or received calls from record executives asking them to remove songs. One recent Concrete Loop post featured five downloads from M.I.A.'s new CD, "Kala"; the next day the links to the downloadable songs were dead. Nah Right featured a yet-to-be-released video for Talib Kweli's new song "Hot Thing/In the Mood." Within hours the video window simply read "removed by copyright holder."

Interscope Records, which represents M.I.A. and 50 Cent, declined to be interviewed for this story. But there's an increasing realization in the music industry that it needs to adapt to the digital music age. As the number of new media departments at record companies increases, executives are trying to change the way they do business.

"We need business models of our own out there in an offensive way to get people to work with us so we can get paid for our music," says Christian Jorg, a recently hired senior vice president of new media and commerce at Island Def Jam. "We can't go back to selling as many CDs as we did five years ago -- that's just unrealistic."

The music the bloggers post comes from multiple sources. Record labels and online marketing companies such as Iced Media provide video and streaming audio to the blogs. Davis, who will be a senior at Clark Atlanta University, often gets MP3s from the artists and producers who've befriended him through Concrete Loop. Davis makes a point of detailing production credits and analyzing music in his music entries. His friendship with Bryan Michael Cox, who produced Mary J. Blige's smash "Be Without You" among other songs, began after Cox e-mailed Davis telling him he appreciated Davis's support.

In July, when Davis posted an unreleased song produced by Cox featuring the winners of MTV's "Making of the Band 4," which aired its season finale Sunday, Cox didn't get angry. Instead, says Davis, "He called me and was like 'Yo, I saw that you put the song on there. That's the bad version. . . . I'm going to send you the real version of the song so you can hear it.' "

Davis will wait until the last episode of "Making of the Band 4" airs before sharing it. Rules of conduct , says Kevin Hofman, Capitol's director of interactive marketing, regulate how bloggers deal with unfinished songs or videos. "The more seasoned bloggers," says Hofman, "they know better than that. It's kind of a code of ethics, believe it or not."

Rawlins gets leaked material like the 50 Cent/Timberlake song online. He wouldn't reveal where he found it, but noted it's not file-sharing websites, which remove copyrighted material if a record label asks. "The sites where I'm getting these leaks," says Rawlins, "the general public and record labels can't even get into. Nothing is pulled off of them."

Rawlins, who works as an online editor for the hip-hop magazine XXL, constantly interacts with the music industry. "I get multiple e-mails a week from labels," Rawlins says. "The independent labels are more open about sending the music. The [major] labels are more hush-hush. They'll say, 'Hey, check out this MP3,' knowing I'm going to post it anyway."

It's these mixed messages from the record companies that annoy the bloggers. As with the mixtapes, most bloggers suspect that the source of the leaks are music industry insiders. "Labels need to get better control of that," Davis says. "It's not us taking music from the studio and sharing it with everybody."

Johnson of Capitol Records pleads ignorance as to the source of the leaked music. He says, "The reality is we don't know where it comes from half the time." Hofman adds, "There are . . . a lot of different people involved in the production of these tracks, so it's hard to pin down where the leakage is. What we do is try to clean up the mess, replace downloads with streaming links."

Concrete Loop, for instance, used to be rife with downloads. In recent weeks, however, it has shifted to streaming audio. "We're trying as hard as we can to conform to what music industry execs and record labels want," says Davis. "Posting and sharing files illegally is a problem, so we're trying to do our best to move away from that."

Audio Fingerprinting for Clean Metadata
Richard Jones

The veteran Scrobblers amongst you will probably remember our “moderation system” – this was a user-voting system that let you propose and merge artists, ultimately fixing misspelled artists by creating aliases to the correct version.

We Wednesday, 29 August 2007 are planning to bring this back in a big way, addressing not only artists, but albums and tracks too.

We don’t want to have to vote on the really obvious stuff (“01 – Radiohead”), so we are going to do as much as possible automatically, with various algorithms and data mining tricks. The entries we can’t be 100% sure about, and the remaining stuff, will again be thrown open to a public vote.

Phase 1 is now underway with the first public “beta” release of our new fingerprinting technology. This will mature into a nice sexy (free) API that lets you grab clean metadata based on an audio fingerprint. For now, all that it does is send the fingerprint data to bootstrap the moderation system. This doesn’t change any MP3 files on your computer. It does send useful fingerprint data to our moderation system so we can get the ball rolling. If you have a big MP3 collection, it will take a while… Thankfully it remembers where it got to, so you don’t have to do it all in one session.

Grab the fingerprinting app and let it scan your MP3 collection:

Download for:
Mac OS X
Linux .deb
Source code

What we’ll do next is figure out all the popular (mis)spellings for tracks with the same fingerprints. We will publish lots of stats, example data and graphs showing our progress as the fingerprint database grows in the coming weeks. We need people with MP3 collections (of any size/quality) to download and run the fingerprinter to make this work, so spread the word.

Remember, you don’t need to clean up your ID3 tags before running the fingerprint app: This time round, people with imperfect tags are actually going to be of some use to us, and don’t deserve all the terrible things we normally wish on them

Download the app, and watch this space for lots of stats and graphs detailing our findings in the coming days and weeks!

Thumbs Gone in Ebert Show Renewal Impasse

The words Hollywood craves -- "two thumbs up" -- are gone while reviewer Roger Ebert and Disney-ABC work on a renewal of "At the Movies With Ebert & Roeper."

Disney-ABC Domestic Television waited until late last week to announce Ebert was withholding permission to use the thumbs, which he and late partner Gene Siskel copyrighted, reported the Chicago Sun-Times, for whom Ebert reviews movies. Ebert denied he withheld the designation.

The long-time movie reviewer is negotiating a new contract with the program from which he has been absent since cancer surgery last year.

"They made a first offer … which I considered offensively low," Ebert said by e-mail to the Chicago Tribune. "I responded with a counteroffer. They did not reply to this, and ... ordered the 'thumbs' removed from the show. This is not something I expected after an association (with Disney) of over 22 years."

During Ebert's absence, Richard Roeper, a fellow Sun-Times columnist and co-host since 2000, has been paired with guest critics.

Viacom hits me with copyright infringement for posting on YouTube a video that Viacom made by infringing on my own copyright!
Christopher Knight

"Chutzpah" is a Yiddish word meaning "unbelievable gall or audacity". An example of it would be the story of the kid who murders both of his parents, then throws himself on the mercy of the court on the grounds that he’s an orphan.

That's chutzpah. So is this: multimedia giant Viacom is claiming that I have violated their copyright by posting on YouTube a segment from it's VH1 show Web Junk 2.0... which VH1 produced – without permission – from a video that I had originally created.

Viacom used my video without permission on their commercial television show, and now says that I am infringing on THEIR copyright for showing the clip of the work that Viacom made in violation of my own copyright!

The clip in question was pulled by YouTube earlier this morning, at Viacom's insistence.

Last fall, as part of my campaign for Rockingham County Board of Education, I produced three commercials that ran on local television. The first of them – which I simply dubbed "Christopher Knight for School Board TV Commercial #1" – was hosted on YouTube the same evening that the ad started running on WGSR in Reidsville. You can watch it at http://youtube.com/watch?v=nLi5B0Iefsk.

Well, the concept of a candidate for Board of Education pitching himself by using the Death Star to blow up a little red schoolhouse is admittedly unusual. The YouTube clip got around quite a bit: as of this writing it's received over sixty-six thousand views. I put it and the other two ads on YouTube so that I could post them on this blog (because I was trying to chronicle everything that happened during the course of my campaign). And I'd always intended to keep them up after the election too, in case anyone else might find and enjoy watching them. Heck, I've always liked to think that maybe someday, others might see how I was a candidate and feel led to run for office themselves!

A month and a half ago some friends let me know that the cable network VH1 was spotlighting the commercial on their show Web Junk 2.0, in an edition titled "Animals & Other Crap".

VH1 took the video that I had created and hosted on YouTube, and made it into a segment of Web Junk 2.0. Without my originally-created content to work with, VH1 would not have had this segment at all. They based this segment of Web Junk 2.0 entirely on the fruit of my own labor.

I got to catch the episode and was laughing pretty hard not just at host Aries Spears's witty commentary about my commercial, but that VH1 had found the commercial worthy of sharing with such a vast audience.

Please bear in mind that at no time prior to the broadcast of this show was I contacted by VH1 or its parent company Viacom. At this time, I've received no communication from Viacom whatsoever about this.

I was quite aware that they were using my own not-for-profit work for commercial purposes and that they should have contacted me. But I didn't really care that they were doing that, either. It was just nice to see something that I had worked on getting seen and appreciated by a lot more people than what I had intended for a local audience. And I was glad that Melody Hallman Daniel, the voice-over actress in the spot, received some widespread notice of her considerable talent.

I was so proud that my commercial had been highlighted on Web Junk 2.0 that I posted the segment featuring it on YouTube so that I could put it on this blog, just like I'd posted the original commercial.

Did I think about the issue of copyright when I did that? Of course I did! But if this wasn't a matter of Fair Use, then I don't know how anything else would qualify it as such either. I made the original video, VH1 used it without my permission and I didn't particularly have a problem with that. I thought that they would have readily understood that were it not for my creativity and effort, that this edition of Web Junk 2.0 would have had to find some material elsewhere.

And then this morning the following e-mail arrives from YouTube:

Dear Member:
This is to notify you that we have removed or disabled access to the following material as a result of a third-party notification by Viacom International Inc. claiming that this material is infringing:

Web Junk 2.0 on VH1 features my school board commercial!:

Please Note: Repeat incidents of copyright infringement will result in the deletion of your account and all videos uploaded to that account. In order to avoid future strikes against your account, please delete any videos to which you do not own the rights, and refrain from uploading additional videos that infringe on the copyrights of others. For more information about YouTube's copyright policy, please read the Copyright Tips guide.

If you elect to send us a counter notice, please go to our Help Center to access the instructions.

Please note that under Section 512(f) of the Copyright Act, any person who knowingly materially misrepresents that material or activity was removed or disabled by mistake or misidentification may be subject to liability.

YouTube, Inc.

So Viacom took a video that I had made for non-profit purposes and without trying to acquire my permission, used it in a for-profit broadcast. And then when I made a YouTube clip of what they did with my material, they charged me with copyright infringement and had YouTube pull the clip.

Folks, this is, as we say down here in the south, "bass-ackwards".

I have written to YouTube's division of copyright enforcement, telling them that the VH1 clip is derived from my own work and that I should be entitled to use it as such. So far I haven't heard anything back from them. After reading that last part of the initial e-mail that they sent me, I'm wondering how apt they might be to use the Digital Millennium Copyright Act to wipe out the accounts of anyone who even raises such a fuss about something like this, no matter how well-grounded it is.

What does this mean for independent producers of content, if material they create can be co-opted by a giant corporation without permission or apology or compensation? When in fact, said corporations can take punitive action against you for using material that you created on your own?

That's what's happening to me right now, folks. Viacom is penalizing me for using my own original material, which they used without permission to begin with.

I would really like to fight this as hard as I can. Unfortunately at the moment I lack the time and resources to do this on my own. I am also, admittedly, not an attorney. There's a good bit of knowledge of copyright law floating around in my gray matter, but it's not nearly enough to mount the challenge that I would like to levy against Viacom for doing this.

I want to publicly declare this: that I am not out for any money. Not a single penny. All I want is for the clip to be restored to its original address on YouTube. And I want it to be established that other creators of content have a right under Fair Use to show how their works are being appreciated in the wider world. I just want the rest of us who aren't affiliated with corporate media to have as much right to use our own work as "the big boys" enjoy for theirs.

Science Fiction Writers of America Abuses the DMCA
Cory Doctorow

The Science Fiction and Fantasy Writers of America has used the Digital Millennium Copyright Act to fraudulently remove numerous non-infringing works from Scribd, a site that allows the general public to share text files with one another in much the same way that Flickr allows its users to share pictures.

Included in the takedown were: a junior high teacher's bibliography of works that will excite children about reading sf, the back-catalog of a magazine called Ray Gun Revival, books by other authors who have never authorized SFWA to act on their behalf, such as Bruce Sterling, and my own Creative Commons-licensed novel, "Down and Out in the Magic Kingdom."

The list of works to be removed was sent by "epiracy@sfwa.org" on August 17, described as works by Isaac Asimov and Robert Silverberg that had been uploaded without permission and were infringing on copyright. In a followup email on August 23, SFWA Vice President Andrew Burt noted that the August 17 list wasn't "idle musing, but a DMCA notice."

The 1998 Digital Millennium Copyright Act allows copyright holders to use "notices" to force ISPs to remove material from the Internet on a mere say-so. In the real world, you couldn't get a book taken out of a bookstore or an article removed from the newspaper without going to court and presenting evidence of infringement to a judge, but the DMCA only requires that you promise that the work you're complaining about infringes, and ISPs have to remove the material or face liability for hosting it.

As a result of SFWA's takedown notice, hundreds of works were taken offline -- including several that had not been written by Asimov or Silverberg. It appears that the list was compiled by searching out every single file that contained the word "Asimov" or "Silverberg" and assuming that these files necessarily infringed on Silverberg and Asimov's copyrights.

This implies that Robert Silverberg and the Asimov estate have asked SFWA to police their copyrights for them, but it's important to note that many of the other authors whose work was listed in the August 17 email did not nominate SFWA to represent them. Indeed, I have told Vice President Burt on multiple occasions that he may not represent me as a rightsholder in negotiations with Amazon, and other electronic publishing venues.

More importantly, many of the works that were listed in the takedown were written by the people who'd posted them to Scribd -- these people have been maligned and harmed by SFWA, who have accused them of being copyright violators and have caused their material to be taken offline. These people made the mistake of talking about and promoting science fiction -- by compiling a bibliography of good works to turn kids onto science fiction, by writing critical or personal essays that quoted science fiction novels, or by discussing science fiction. SFWA -- whose business is to promote science fiction reading -- has turned readers into collateral damage in a campaign to make Scribd change its upload procedures.

Specifically, in the Aug 23 email, SFWA Vice President Andrew Burt demands that Scribd require its uploaders to swear on pain of perjury that the works they are uploading do not infringe copyright. SFWA has taken it upon itself to require legal oaths of people who want to publish any kind of thought, document, letter, jeremiad, story or rant on Scribd. Not just "pirates." Not just people writing about science fiction, or posting material by SFWA members -- SFWA is asking that anyone writing anything for publication on Scribd take this oath of SFWA's devising.

Ironically, by sending a DMCA notice to Scribd, SFWA has perjured itself by swearing that every work on that list infringed a copyright that it represented.

Since this is not the case, SFWA has exposed itself to tremendous legal liability. The DMCA grants copyright holders the power to demand the removal of works without showing any evidence that these works infringe copyright, a right that can amount to de facto censorship when exercised without due care or with malice. The courts have begun to recognize this, and there's a burgeoning body of precedent for large judgements against careless, malicious or fraudulent DMCA notices -- for example, Diebold was ordered to pay $150,000 125,000 for abusing the DMCA takedown process.

I am a former Director of SFWA, and can recall many instances in which concern over legal liability for the organization swayed our decision-making process. By sending out this indiscriminate dragnet, SFWA has been exposed to potential lawsuits from all the authors whose works they do not represent, from the Scribd users whose original works were taken offline, and from Scribd itself.

In addition to the legal risks, SFWA's actions have exposed it and its members to professional risk. For example, the page that used to host my book, Down and Out in the Magic Kingdom now reads, "The document 'Down and Out in the Magic Kingdom' has been removed from Scribd. This content has been removed at the request of copyright agent Science Fiction and Fantasy Writers of America." Down and Out in the Magic Kingdom was the first novel released under a Creative Commons license, and I've spent the past four years exhorting fans to copy my work and share it. Now I've started to hear from readers who've seen this notice and concluded that I am a hypocrite who uses SFWA to send out legal threats to people who heeded my exhortation.

In discussing this with my agent, Russell Galen, I was made aware of another potential problem: Scribd does end up hosting infringing works (just like Flickr, Blogger, LiveJournal and any other site that lets users upload their own files) that writers and their agents can remove by sending in legitimate DMCA notices (Russ tells me that he's sent Scribd notices on behalf of the Philip K Dick estate, another of his clients). When SFWA begins to muddy the waters by asserting that the organization is its members' representative for copyright, they make it harder for actual copyright enforcement agents to do their job -- how much harder will it be for Russ to convince Scribd that he is Dick's representative now that they've been burned by SFWA?

There's no excuse for this. Even a naive Internet user should be able to understand that if you compile a list of every file online that has the word "Asimov" in it, you'll get a lot of works that weren't written by Isaac Asimov included in the search results. In the case of Down and Out in the Magic Kingdom, the file included a blurb from Gardner Dozois, former longtime editor of Asimov's Science Fiction Magazine -- and it was that "Asimov" in "Asimov's Science Fiction Magazine" that triggered the takedown.

Even a naive user should know better -- and SFWA Vice President Andrew Burt (who got his position through an uncontested ballot) is a computer scientist and programmer with experience in this field. Indeed, he previously created a system called "Shades of Grey" that is supposed to ruin the ebook downloading experience by poisoning the Internet with corrupted copies of ebooks. He convinced SFWA to appropriate funds from its operating capital to patent this idea, on the basis that publishers would pay SFWA to use it to make science fiction ebooks less attractive to readers (I don't understand the logic of this either). During the last SFWA election, he promised to pay this money back.

SFWA's copyright campaigns have been increasingly troublesome. In recent years, they've created a snitch line where they encourage sf lovers to fink on each other for copying books, created a loyalty oath for members in the guise of a "code of conduct" in which we are supposed to pledge to "not plagiarize, pirate, or otherwise infringe intellectual property rights (copyright, patent, and trademark) or encourage others to do so." What business SFWA has in telling its members how to think about, say, pharmaceutical patents, database copyrights, or trademark reform is beyond me. In 2005, SFWA sent out a push-poll to its members trying to scare members off of giving permission to Amazon to make the full text of their books searchable online.

All of this is pretty bad, but this month's campaign against Scribd takes the cake. I'm a dues-paying SFWA member and past volunteer who relies on the free distribution of my books to sell printed books and earn my living. By fraudulently removing my works from Scribd, SFWA is taking money out of my pocket -- it's the online equivalent of sending fake legal threats to bookstores demanding that they take my books off their shelves.

Update: SFWA President Michael Capobianco writes,
Dear Cory,

I want to personally apologize for the mistake that caused your work to be pulled from scribd.com. It should not have happened and it will not happen again.

I've asked Andrew Burt to notify scribd.com of this mistake so your work can be restored as quickly as possible.

I want to respond to the flurry of activity that has resulted from Science Fiction and Fantasy Writers of America (SFWA) mistakenly identifying several works as infringing copyright. First, some background. There have been discussions within SFWA for several months regarding websites that allow users to upload documents of all sorts for other users to download and share. Many hundreds of copyrighted texts have been put online at these sites, and the number is growing quickly. Some SFWA members complained about the pirating of their works to SFWA's e-Piracy Committee and authorized the committee to do something about it. SFWA contacted scribd.com, one of these sites, about removing these authors' works and generated a list of infringing works to be removed.
Unfortunately, this list was flawed and the results were not checked. At least three works tagged as copyright infringements were nothing of the sort. I have personally apologized to the writers and editors of those works. If you are a creator who has had material removed and has not yet been contacted, please email me at president@sfwa.org.

SFWA's intention was to remove from scribd.com only works copyrighted by SFWA members who had authorized SFWA to act on their behalf. This kind of error will not happen again.

Michael Capobianco
President, SFWA

Bob Marley Family Says to Sue Universal, Verizon

The family of late reggae singer Bob Marley said on Thursday they will sue Universal Music Group and Verizon Wireless for using the iconic pop star's name, likeness and image without permission.

Fifty Six Hope Road Music Ltd, which is owned by the Marley family, said in a news release that Universal Music had entered an agreement with Verizon Wireless that granted the U.S. mobile service provider the right to utilize Bob Marley's name, likeness and image to promote a new set of ringtones.

The offer, announced on Tuesday, said Verizon Wireless customers would be able to purchase ringtones of some of Marley's music exclusively on its service.

"The agreement was entered into without the permission of the Marley Family," said the statement from Fifty Six Hope Road Music Ltd.

Universal Music Group, the world largest music company, owns Island Records, the label through which Marley recorded most of his global hits, such as "One Love" and "I Shot The Sheriff." His greatest hits compilation, "Legend," is the biggest-selling reggae album of all time.

"UMG has not received any suit from the Marley Estate," Universal Music Group said on Thursday.

The music company, owned by French media giant Vivendi, said the claims made in the press release were "meritless".

"Specifically, we are offering Bob Marley ringtones through Verizon in accordance with the terms of a long-standing contract between Bob Marley and UMG," Universal Music Group said.

Verizon Wireless is a joint venture of Verizon Communications Inc and Vodafone Group.

(Reporting by Yinka Adegoke)

YouTube Seals UK Music Royalty Deal
Andrew Edgecliffe-Johnson

YouTube has secured an agreement with the UK societies that collect royalties for 50,000 composers, songwriters and publishers to legitimise the use of recorded music on Google’s popular video-sharing website.

The agreement to license 10m pieces of music to YouTube – in return for a flat fee which has not been disclosed – is the first of its kind, said Steve Porter, chief executive of the MCPS-PRS Alliance. “This is the first fully formed agreement,” he said, although some US collecting societies had reached interim arrangements with YouTube.

The agreement marks another milestone in YouTube’s attempts to win over owners of media content, who have expressed alarm at the amount of material available on the site that is either pirated or that generates no revenue for the companies that created it.

YouTube is to pay a blanket fee to the MCPS-PRS Alliance, exactly as many radio and television broadcasters do, for music to be used in its partners’ professional sites and in amateurs’ videos. The alliance will decide about how to distribute the revenues to its members based on an estimate of what music has been played on the site.

Andrew Shaw, the alliance’s managing director for broadcast and online, said it would work with YouTube to implement technology to improve the monitoring of which pieces of music are played. While it was impossible to monitor the millions of videos available on the site, they would concentrate on the top 5 or 10 per cent that attract the highest audience, he said.

“The long-tail is not worth calculating,” he added.

Mr Porter said the high rates of internet access and online video usage in the UK were among the reasons that YouTube had struck the deal with MCPS-PRS first, but forecast that it could become a model for agreements in other territories. Composers and performers have been eager to gain revenues from new services such as YouTube, however small, to help compensate them for the income they have lost from declining CD sales.

NBC Will Not Renew iTunes Contract
Brooks Barnes

NBC Universal, unable to come to an agreement with Apple on pricing, has decided not to renew its contract to sell digital downloads of television shows on iTunes.

The media conglomerate — which is the No. 1 supplier of digital video to Apple’s online store, accounting for about 40 percent of downloads — notified Apple of its decision late yesterday, according to a person familiar with the matter who asked for anonymity because negotiations between the companies are confidential.

A spokesman for NBC Universal, part of General Electric, confirmed the decision, but otherwise declined to comment. A spokesmen for Apple declined to comment. The decision by NBC Universal highlights the escalating tension between Apple and media companies, which are unhappy that Apple will not give them more control over the pricing of songs and videos that are sold on iTunes.

NBC Universal is also seeking better piracy controls and wants Apple to allow it to bundle videos to increase revenue, the person familiar with the matter said.

NBC Universal is the second major iTunes supplier recently to have a rift with Apple over pricing and packaging matters. In July, the Universal Music Group of Vivendi, the world’s biggest music corporation, said it would not renew its long-term contract with iTunes. Instead, Universal Music said it would market music to Apple at will, which would allow it to remove its songs from iTunes on short notice.

The action by Jeff Zucker, NBC Universal’s chief executive, will not have an immediate impact on iTunes. The current two-year deal extends through December, so a vast video catalog — some 1,500 hours of NBC Universal’s news, sports and entertainment programming — will remain available on iTunes at least until then.

Among the most popular NBC Universal shows available for sale on iTunes are “Battlestar Galactica,” “The Office” and “Heroes.” The company has been talking to iTunes about offering Universal movies, but has not done so to date because of piracy concerns.

The two companies could still reach an agreement on a new contract before their current deal expires. While each side has so far refused to budge, the talks will continue and have been free of acrimony, the person familiar with the matter said.

But the defiant moves by NBC Universal and Universal Music could embolden other media companies that have been less than thrilled with Apple’s policies. NBC Universal was the second company to sign an agreement with Apple to sell content on iTunes, and its contract stipulated that Apple receive notice of plans to cancel 90 days before the expiration date. Otherwise, the deal would automatically renew according to the original terms.

Assuming similar provisions in deals negotiated with media companies like CBS, Discovery and the News Corporation, a parade of 90-day windows will be coming due.

A move by NBC Universal to walk away or withdraw a large amount of content would probably hobble Apple’s efforts to move deeper into the sale of video-focused consumer electronics like the iPhone and a new class of iPods. While Apple’s early efforts in this area depended on music to fuel sales, analysts say video is what will drive much of Apple’s retail business in the future.

The iTunes service wields incredible power in the music business, since it accounts for more than 76 percent of digital music sales. And its influence is on the rise: Apple recently passed Amazon to become the third-biggest seller of music over all, behind Wal-Mart and Best Buy, according to the market research firm NPD.

But the sale of video online is still at a nascent stage. Media giants like NBC Universal are aggressively trying to move into the business — in part to avoid the piracy that has plagued music companies — but the revenue they earn from online video sales does not yet have a material impact on their financial performances.

So some media companies feel they have the upper hand: Apple, for now at least, needs their content more than they need Apple. And there are an array of companies — like Amazon, Wal-Mart, Microsoft and Sony — that would love to have NBC Universal as a partner to muscle in on Apple’s turf.

Then there is NBC Universal’s own Hulu.com, a venture in partnership with the News Corporation to build a video portal to compete with YouTube.

The risks that media companies face in removing content from well-known Web sites involve perception and promotion. NBC Universal could anger consumers by preventing them from easily watching shows and movies in the most popular way — through iTunes and the iPod. Television networks and movie studios have vigorously tried to avoid being branded with the same anticonsumer sentiment that has worked against the record labels.

And because iTunes is so popular, NBC Universal would lose an increasingly important way of marketing entertainment products, particularly fledgling television shows, to consumers.

For months, most media companies have grumbled that Apple underprices video and audio content as a way to propel sales of a much more significant profit center: iPods and related merchandise. (One noteworthy abstainer from the grumbling is the Walt Disney Company, which has Apple’s chief executive, Steven P. Jobs, as a board member.)

The iTunes service has sold songs for 99 cents each since its beginning four years ago, except for the recent introduction of songs without copy protection. Episodes of television shows sell for $1.99, with movies priced at $9.99.

NBC Universal and other companies say they want to increase prices by packaging content— say an episode of “The Office” with the movie “The 40- Year-Old Virgin,” because they both star the comedian Steve Carell.

In the past, Apple has argued that a range of pricing would complicate the iTunes experience and squelch demand.

Apple Drops NBC After NBC Drops Apple
Dr. Macenstein

Fans of The Office may have to dust off their VCRs, as Apple today announced that it will not be selling the upcoming season of NBC television shows on its online iTunes Store.

The move follows NBC’s decision to not renew its agreement with iTunes after Apple claims they declined to pay more than double the wholesale price for each NBC TV episode. We’re not sure what the “wholsesale” price of a TV show is, but Apple says the proposed cost increase would have resulted in the retail price to consumers increasing to $4.99 per episode from the current $1.99. ABC, CBS, FOX and The CW, along with more than 50 cable networks, are signed up to sell TV shows from their upcoming season on iTunes at $1.99 per episode.

“We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase,” said Eddy Cue, Apple’s vice president of iTunes. “We hope they will change their minds and offer their TV shows to the tens of millions of iTunes customers.”

Apple’s agreement with NBC ends in December. Since NBC would withdraw their shows in the middle of the television season, Apple has decided to not offer NBC TV shows for the upcoming television season beginning in September. NBC supplied iTunes with three of its 10 best selling TV shows last season, accounting for 30 percent of iTunes TV show sales.

Sony to Unplug Connect Music Service
Matt Moore

Acknowledging its proprietary audio technology was a marketplace flop, Sony Corp. is shuttering its Connect digital music store and will open its portable media players to other formats.

The moves were announced Thursday at a Berlin consumer electronics trade fair as the Japanese electronics pioneer unveiled a pair of new digital Walkmans that can play the Windows Media Audio, MP3 and AAC audio formats.

Like rivals' players, including Apple Inc.'s iPods, Sony's NWZ-A810 and NWZ-S610 can play video and display photographs. Sony's models include an FM tuner, too.

Sony said it would phase out operations of its struggling Connect online store, which sold songs in the company's proprietary ATRAC format.

"This gives customers greater flexibility in their music software approach," the company said in a statement. "As a result, Sony will be phasing out the Connect Music Services based on Sony's ATRAC audio format in North America and Europe."

Sony spokeswman Linda Barger said the new Walkman players will no longer directly support ATRAC.

"We are offering conversion software to convert ripped non-secure ATRAC files to MP3," she said in an e-mail.

In a message sent to Connect users, the service said it would not close before March 2008, but it did not set a more specific date. The company's Connect e-book service for the Sony Reader are not affected.

In June, Sony Connect Inc. said it was eliminating some positions as part of a restructuring plan to shift resources to other online services, but had denied reports it was related to a planned shutdown.

Instead, the company said it was shifting its emphasis other network services, specifically one for users of the PlayStation video game console, the company said.

Sony Connect launched in 2004, but like other online music services, it has had a tough time competing against Apple Inc.'s iTunes Store, which is tied to the market-leading iPod portable player.

The new Walkman video players store up to 1,850 average-length MP3 songs on the eight gigabyte models, 925 songs on the four gigabyte models, and 440 songs on the two gigabyte models. Prices range from $120 to $230.

Additionally, a third line, the NWZ-B100, will play audio only (MP3s, AAC and Windows Media formats), and cost $80 for a two-gigabyte model and $60 for a one-gigabyte model.

Sony said that the new Walkman video players will ship with Microsoft Corp.'s Windows Media Player 11 to manage digital libraries.

"With this initiative, Sony is debuting an important option for digital media players as it opens new doors for a rich digital experience," said Dave Wascha, director of Windows Client Product Management at Microsoft Corp.

Search Engine Sponsored Link Usage Studied

U.S. scientists have conducted one of the first academic studies of search engine-sponsored link technology.

The Pennsylvania State University study led by Assistant Professor Jim Jansen found clicks on sponsored links occur less frequently than previously reported but show growth potential.

Although sponsored links are a money maker for search engines, the study suggests consumers click on sponsored listings about once every 10 searches, suggesting consumers still prefer organic or non-sponsored links.

"While the click through was only about 16 percent, I interpret this as being a real boon for search engines," Jansen said. "Even at 16 percent, sponsored search is already a multibillion-dollar market, and this study shows there is plenty of upside growth potential."

The study by Jansen and Professor Amanda Spink of Queensland University of Technology is reported in the journal IEEE Computer.

Network Manager Tells of IS&T Services, RIAA Woes, Own Undergrad Experience
Yuri Hanada

Today, The Tech interviews Jeffrey I. Schiller ’79, network manager for Information Services & Technology, who discusses IS&T, file-sharing, and his memories of being an undergraduate at MIT.

The Tech: What is your role at MIT?

Jeffrey Schiller: I do many different things. I’ve been employed in what is now Information Services & Technology and its predecessor organization, which was called Information Systems, for about 26 years. I have the title of network manager, but when I started, my job was to build the network — it didn’t exist. I built the network, and today, I’m one of the people who manage it. …

TT: What does IS&T do, and what services does it provide for students?

JS: We are basically the central information technology organization at MIT. We maintain, obviously, the computer network, which we call MITnet. We also run the telephone system on campus. Pretty much if it has to do with infrastructure and computing, we take care of it. … We also have a training group, so they teach classes on simple computer use skills. It’s not the same thing as taking a computer science course. It’s how to use Excel, how to use Word, how to make sure your computer is not vulnerable to thieves and viruses.

TT: What is IS&T currently working on?

JS: … [One of the] major projects that are in our area are a conversion to voice-over IP telephone service. That means the network that you have today will not only provide network services but provide telephone services as well. That’s going to happen everywhere, I might add, not just at MIT, but we’re going to be one of the first organizations to go there. We already have a pilot that has probably about 1,000 to 1,500 phones already. … Our plan is that around 2011, we’ll have the campus completely converted. …

TT: What advice do you have for incoming freshmen, regarding computing?

JS: … One of things we can talk about is file-sharing. A big issue right now is peer-to-peer file-sharing, people downloading music and movies and all this other crap. The reality is a lot of us believe that what the RIAA [Recording Industry Association of America] and the MPAA [Motion Picture Association of America] are doing, trying to sue students, is wrong … but the important thing you have to realize is that it’s still stealing. …

You may not agree with the law. You may think, I should just download this stuff, and why can’t I. But the reality is that it is against the law and if you get caught, you’re going to be in trouble, and MIT will not help you. In the standard letter — I think all freshmen might get this letter from the dean’s office — it pretty much says, if you get caught, well, here’s the legal aid society’s telephone number. MIT will cooperate in an investigation. We will do exactly to the extent of the law. We will not volunteer any information that we don’t have to, but if we get subpoenaed we have to answer it. …

What we’re really seeing is a paradigm shift. What’s happening is that the record companies are becoming superfluous, because, with the network, you don’t need record companies to get your music. … Whenever there’s a paradigm shift, there are winners and losers. The losers never go gracefully. And so the record companies, the move companies — they’re all grappling with this paradigm shift, and they don’t like that they’re going to lose a certain amount of control. Believe me, they don’t like that a garage band could publish their music on the Internet and become famous without going through a record label. …

One of the things we’re really worried about at MIT right now is that the RIAA is saying, all these universities have all of these students stealing our music, why aren’t you universities doing anything about it? To make matters worse, companies are showing up saying, hey, we’ve got a technical solution. If the universities buy our technical solution, we can solve this problem. And the fact of the matter is, they just want to make money. Whatever they sell us won’t work. It may work today, but the peer-to-peer file-sharing guys are pretty smart enough to figure out a way to get around it. … Our concern, being the university kind of guy, is collateral damage that these devices are going to do. These people are saying that no student should be allowed to download this many gigabytes in a month, because, if they are, they must be stealing them. Well, maybe, maybe not — our student may be doing something different, they may be doing real stuff — why should we prefashion a statement saying you’re the bad guy?

But again, having said all of this, when it comes back around, downloading music is still a crime. You get caught, you’re in trouble, and the law is funny about this. You go to iTunes, you can pay for a song a buck, and download the song. So, what’s the value of that song? It’s a dollar. But if you steal, what’s the value of that song? $100,000. Per song. Now this is a pretty fucked up thing about the law. So, if the music companies say you downloaded a thousand songs, what does that turn into? That’s $100 million. They can sue you for $100 million, so they think they’re offering you a great bargain when they say they’ll settle for $3,000. …

One thing some students don’t understand is that they say, well you know, I don’t have any money so they can’t anything from me. But the reality is, they can garnish your salary for the rest of your life. What the music companies will argue is that as an MIT student, you have a potentially good earning capability. … Just because you don’t have money now doesn’t mean you won’t have money in the future, and they will go after that. And music companies want to make examples of people. They really do. So this is not the time to go tempt them.

Now, I’m not going to be the moral enforcer. I’m just telling you that’s the reality. That’s my advice to students. Don’t get screwed by it.

TT: What is your educational background?

JS: Well, I graduated from MIT, and I never left. …

TT: What were your first impressions of MIT, and how have they changed over the years?

JS: You have to understand that when I came to MIT, for every woman at MIT, there were 11 men. That made it a very different place than what it is today. On the other hand, there were plenty of other universities that had plenty of women, so the fact that it was an 11 to 1 ratio did not mean that there were a bunch of cloistered monks here. …

And you also have to understand that I was 18, and that was the drinking age, and so rush was a very different thing than what it is today. It started with the freshman picnic … The last speaker at the picnic was the president of the interfraternity conference, and the last sentence he would always say was, “Let the fraternity rush begin.” And in the meantime, hanging out at the back of the picnic, literally the back of the great court, were all these guys. When the guy says, “Let the fraternity rush begin,” all these guys would tear off their T-shirts they were wearing. Underneath their bland T-shirts were their fraternity house T-shirts, and they would run into the crowd of freshmen to drag you away to parties.

Now my sophomore year, I was living in a fraternity house. That was 1976, and our liquor budget was $5,000 — that was not the beer budget, that was the hard liquor budget, and those were bigger dollars. I remember driving to Martignetti Liquors over on Soldier’s Field Road and filling my car. We had two guys go and we weren’t sure if both were going to fit in the car when we were done; the trunk was full. And that, talk about heavy partying, that was what rush was about. …

I had some very famous professors my freshman year, including Alar Toomre over in the Math Department. He taught the 18.02 class I was taking — I think he’s still around — and it’s rumored that he has written several songs that have made it to Dr. Demento’s top 10 demented hits in the country, so he was quite the character.

And then I had my first physics class. The lecturer clearly would have been more comfortable speaking German. He was on loan from the Swiss Federal Institute of Technology and spelled centripetal force with a “z.” My recitation instructor would have been much happier speaking Japanese. And I didn’t like 8 a.m. classes, I decided. I remember this pretty well, actually, it’s pretty amazing. It was a little while ago.

But I fell in love with the place and decided one of the reasons I stayed here after I was a student here was there’s a very thick density of very smart people and there’s very few other places that you have that experience, but this is one of them. …

TT: Last question. If there’s one thing freshmen should do during their first semester, what would it be?

JS: Besides not taking 6.001? No, in all seriousness, I haven’t been a freshman in a very long time. So it’s hard for me to be a good granter of advice on that. But if I were to give advice — I’ve been an on-again, off-again adviser, and I’ve seen way too many students who show up here and hit the books — my advice would be pace yourself. You don’t have to do two years’ worth of work in the first semester. The course load is designed so that it should take you four years to graduate. Busting your butt now so that you can graduate, you think, a semester early or get more courses in isn’t worth it. …

The other piece of advice I would give is to keep in mind that, at MIT, everyone is coming here from the very top of their class. When you get to MIT, there’s going to be a bottom half, and the people at the bottom half of the class — it’s not a place that they’re used to being. The important thing is, if you find yourself struggling, ask for help. One thing that MIT is really good at is we’ve got tons of help. There are layers upon layers of help — whether it’s tutors in math, whether it’s counseling deans — there really is. …

I’ll give you another piece of advice — it’s not about the grades. … When you get into your career, no one’s going to care what grade you got, and certainly not going to care what grade you got freshman, sophomore year. They’re going to want to know, can you do the job. …

I was in grad school here, so I know how to get into grad school here. I can’t speak for other universities, and I can’t even speak for other departments, but electrical engineering at MIT — it’s hard to get in as an electrical engineering grad student if you were an undergraduate student here — but it’s not your grade. No one gives a shit about the grades.

It’s the references you get from the faculty, and it’s only one sentence that’s important. When faculty say, oh, this person’s a great guy, and all this and that — that’s noise. There’s only one sentence that’s important, and that sentence is, I would be happy to have them in my research group and pay for their education. That’s the money sentence. They say that, they mean it. And if you get three faculty to say that, you’re in and it doesn’t matter what your grades are. …

Sixty Seconds Of Privacy: Employee Use Of Peer-To-Peer Software Presents Data Security Concerns
Kristen J. Mathews

Welcome to Sixty Seconds of Privacy, an e-newsletter brought to you by the Privacy and Data Security practice group at Thelen Reid Brown Raysman & Steiner LLP.

Each edition of this e-newsletter addresses one interesting legal development in the area of privacy and data security, in a brief "question and answer" format. Each edition is intended to be read in about a minute, yet will update you on an important development. We pick the topics for this e-newsletter based on what our clients are concerned about. You are welcome to submit your questions or suggestions to us, and you may find your sixty second answer in an upcoming edition.

Question: Are there data security risks involved in the installation of peer-to-peer file-sharing software on corporate computers?

Answer: Yes, and those risks were demonstrated by a recent security breach incident at a major pharmaceutical company that was traced to the use of unauthorized P2P software on a company laptop. The data security breach occurred when an employee's spouse installed the software on a laptop provided by the company for the employee's use at home. According to the company's letter notification to its affected employees, the names, social security numbers, and, in some cases, addresses and bonus information of some 17,000 present and former employees could have been accessed and copied by third parties via the P2P software. Now the company is being sued by its employees in a putative class action.

The risk of a data security breach through the use of P2P software is no surprise to Rep. Henry Waxman, who held hearings in Washington on July 24, and concluded that the use of such software in government and corporate environments is a "national security threat." Tests conducted by his staff using popular P2P applications revealed that a multitude of varieties of sensitive corporate information is inadvertently made available on P2P file-sharing networks.

The security breach incident, and the results of Rep. Waxman's tests, underscore the importance of having, and enforcing, data security policies in the corporate environment. A properly drafted security policy should include the following:
Provisions prohibiting the installation of unauthorized software on all company computers, specifically including laptops and other computers provided by the company for use in the home environment.
Provisions prohibiting the use of company-provided computer equipment by anyone other than the company employee.

Finally, this incident also underscores the importance of advance planning in handling data security breach incidents, and having a properly drafted security incident response policy outlining steps that must be taken to comply with the 38 state data security breach laws now on the books. For some types of companies, having these policies in place is not only a best practice, it is also a legal requirement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

After Stumbling, Mattel Cracks Down in China
Louise Story

The alarm bell went off for Mattel just as it was preparing to announce that it would recall 1.5 million Chinese-made toys tainted with lead paint.

Surrounded by boxes of Barbie dolls, Hot Wheels cars and other sample toys, Thomas A. Debrowski, Mattel’s executive vice president for worldwide operations, was leading a tense early morning trans-Pacific telephone conference with his team in Hong Kong, where it was 9 p.m. At the time, recalled Mr. Debrowski, Mattel thought it was dealing with at most “a single failure, from a single vendor who made a big mistake.”

But in the middle of the meeting on July 30, Mattel learned otherwise.

“I’ve got bad news,” interrupted David Lewis, senior vice president for Asian operations, who had just taken a call from the company’s safety lab in Shenzhen, China, where toys made by outside companies are tested. “We’ve had another failure. It was one of the toys in the Pixar cars.”

That was the moment that threw Mattel into turmoil, forcing the company — long considered one of the more successful Western manufacturers in China — to recognize that it had more of a systemic problem than simply an isolated case of one bad paint supplier.

Now Mattel, which appears to have stumbled in part because it had become overconfident about its ability to operate in China without major problems, is in crisis mode. Toys for the coming holiday shopping season are already shipping across the Pacific, and Mattel wants to catch any other problems that may have slipped through — before those toys land on store shelves and cause even greater damage to its reputation.

A big problem was that some of Mattel’s trusted vendors had turned to cheaper paint suppliers outside the company’s approved list. Mattel is now racing to increase its supply and product testing, no longer giving local contractors several months at a time to do the tests themselves.

Mattel executives are openly saying that there may be more recalls, if the company finds more problems in its investigation. And Mattel has quietly carted loads of toys and dolls to its own factories in Mexico to recheck the ones that have arrived from Chinese contractors in recent weeks.

“We have had recalls every year since I’ve been here,” Robert A. Eckert, Mattel’s chief executive, said in an interview at corporate headquarters here. But “the second recall was different; it was going to receive a different level of scrutiny.”

With its back-to-back recalls, Mattel — the world’s largest toy maker and the home, among others, of Fisher-Price toys, American Girls dolls, Matchbox cars and, of course, Barbie — has been pitched into the center of a boiling debate over the safety of products made in China.

The ever-growing pile of products recalled this year has sent consumers digging through their pantries and toy chests, scouting for everything from Thomas & Friends toy trains and children’s jewelry to toothpaste, dog food and, most recently, SpongeBob SquarePants journals. Wal-Mart recently disclosed that one of the biggest concerns of its shoppers is the safety of toys from China.

One mother was so infuriated by the recalls that she brought her children to Mattel headquarters this month with a car full of Mattel toys demanding that the company sort through them to tell her which ones were safe. (Mattel found that all of her toys were fine.)

“Mattel is very vulnerable in the short term,” said Allen P. Adamson, managing director at Landor Associates, a brand-management firm, “because the spotlight is on them and the China issue is such a hot issue.”

Mattel has been manufacturing in Asia far longer than many companies (the first Barbie was made there in 1959). That led to long-term relationships with certain Chinese contractors, many spanning decades. Paradoxically, that appears to have contributed to Mattel’s problems: the longer it outsourced to a factory supplier with good results, the looser the leash became.

During Mr. Eckert’s tenure, the company has scaled back the number of companies it uses and the fraction of Mattel toys that they make, but it allowed its more reliable suppliers to do their own regular toy testing — with spot tests by Mattel only every three months.

The two contractors that caused this month’s recalls were among the most trusted. Lee Der Industrial, the supplier involved in the first recall, had worked with Mattel for 15 years. The Early Light Industrial Company, the contractor that made the Sarge cars in the second recall, has supplied toys for 20 years.

Mattel first got wind of its China problem in early July when a European retailer discovered lead paint on a toy, leading to Mattel’s first recall of 1.5 million toys globally on Aug. 2. Mattel shut its production at Lee Der, which made the 83 different recalled toys.

The recall on Aug. 14 was not as large, affecting 436,000 Pixar toy cars, but, combined with a separate recall of millions of toys with tiny magnets that had harmed some children who swallowed them, the blow to Mattel’s public reputation was substantial. The Pixar toys were made by yet another contractor, Early Light, which had subcontracted production of the car’s roof and tires to a company called Hong Li Da.

In both cases, the Chinese companies broke Mattel’s rules on what paint they were allowed to use. Mattel has certified only eight paint suppliers. Lee Der bought lead-tainted paint from an uncertified company. Hong Li Da, the subcontractor, used uncertified paint when a tub provided by Early Light ran out.

“I think it’s the fault of the vendor who didn’t follow the procedures that we’ve been living with for a long time,” Mr. Debrowski said.

He readily acknowledges the rising costs that companies in China are facing.

“In the last three or five years, you’ve seen labor prices more than double, raw material prices double or triple,” he said, “and I think that there’s a lot of pressure on guys that are working at the margin to try to save money.”

But isn’t Mattel putting pressure on its vendors to save money?

“No, absolutely not,” he replied. “We insist that they continue to use certified paint from certified vendors, and we pay for that, and we’re perfectly willing to pay for that.”

On the day of the second recall, Mattel announced a three-point plan that tightened its control of production, cracked down on the unauthorized use of subcontractors and provided for Mattel to test products itself, rather than rely on its contractors. The plan also included testing every batch of paint.

“We do realize the need for increased vigilance, increased surveillance,” Jim Walter, who reports to Mr. Debrowski on quality assurance, said on the day of the announcement.

Mattel makes its best-known toys, like Barbie dolls, in its own 12 factories. But even as it has increased the share of toys it makes itself to about half, it still relies on roughly 30 to 40 vendors to make the other half. Mattel now realizes it was not watching those companies closely enough, executives here said.

Mattel vetted the contractors, but it did not fully understand the extent to which some had in turn subcontracted to other companies — which in turn had subcontracted to even more. Mattel required its vendors to list subcontractors, so Mattel could visit them, but Mattel is investigating whether that procedure has been followed. A number of companies whose factories Mattel had never visited may have had a hand in making the toys that were shipped around the world.

Out of the public eye, Mattel is cleaning house. The company has fired four subcontractors and is evaluating more. Mattel also moved to enforce a rule that subcontractors cannot hire two and three layers of suppliers below them.

Mattel executives in Hong Kong are trying to figure out how many subcontractors became part of its lineup. Mattel’s Hong Kong office is also investigating to find a common thread among the lead recalls in China. Mattel has 200 full-time employees devoted to supervising and training Chinese contractors — but the Mattel employees are not stationed permanently at those factories.

As part of its effort to rebuild its image, Mattel is emphasizing that it is less dependent on Chinese contractors than most toy makers. It has run ads around the world featuring Mr. Eckert’s vow to do better.

“There aren’t many companies that own their own factories,” Mr. Eckert said in an interview in his office, “and there aren’t many companies that manufacture outside of China.”

Mattel closed its last American factory, originally part of the Fisher-Price division, in 2002. The bulk of its products have long been made in Asia. In the 1980s, Mattel decided to take more control of its core products, like Barbie and Hot Wheels cars, and built and purchased several factories. About 65 percent of Mattel products are made in China now. Or, as a Mattel executive rephrased it, more than a third of Mattel toys are made outside of China. Many Barbie dolls, for example, are produced in Indonesia.

Mattel executives showed off a factory in Tijuana, Mexico, escorting a reporter to demonstrate a safety lab with drop machines, temperature checks, not to mention tests for lead in paint. Fisher-Price’s Little People houses as well as Barbie playhouses are made there, largely because shipping costs from Asia for larger products add too much to the cost.

Mattel plans to buy large numbers of a portable lead detector that can be used in all its factories as well as those of its contractors. In the last few weeks, the safety lab in Tijuana has been used to double-check the work of Mattel’s Chinese suppliers.
“It’s to make absolutely sure this issue is behind us,” Mr. Eckert said in his office, surrounded by portraits of Barbie by artists like Andy Warhol and Peter Max.

Mr. Eckert has improved the company’s financial performance, but, looking back, he is happy that he resisted calls from analysts early in his tenure to sell off Mattel’s 12 factories and outsource all production.

When he lectures at business schools, Mr. Eckert often cites Johnson & Johnson’s 1982 recall of Tylenol as an example of how to do things right and recover from an initial disaster.

“It is a great example of building trust,” he said. “It became kind of a personal mission of the C.E.O. at the time, saying, ‘Here is the problem, here is what we’re doing.’ And it was clear that it really was not about the money.”

Mattel’s costs of doing business, he acknowledges, will go up with the additional level of testing. But the price, he says, will be worth it.

Mr. Eckert also has a new addition to the shelf behind his desk. Next to a portrait of his 16-year-old daughter is Sarge, the army-green toy jeep that Mattel recalled last week.

Mr. Debrowski, Mattel’s head of manufacturing, also keeps Sarge on his desk.

“Just to remember, you know,” he said.

Efforts to Crack Down on Lead Paint Thwarted by China, Bush Administration
Kevin G. Hall

The Bush administration and China have both undermined efforts to tighten rules designed to ensure that lead paint isn't used in toys, bibs, jewelry and other children’s products.

Both have fought efforts to better police imported toys from China.

Now both are under increased scrutiny following last week’s massive toy recall by Mattel Inc., the world’s largest toymaker. The recalls of Chinese-made toys follow several other lead-paint-related scares since June that have affected products featuring Sesame Street characters, Thomas the Train and Dora the Explorer.

Lead paint is toxic when ingested by children and can cause brain damage or death. It’s been mostly banned in the United States since the late 1970s, but is permitted in the coating of toys, providing it amounts to less than six hundred parts per million.
The Bush administration has hindered regulation on two fronts, consumer advocates say. It stalled efforts to press for greater inspections of imported children’s products, and it altered the focus of the Consumer Product Safety Commission (CPSC), moving it from aggressive protection of consumers to a more manufacturer-friendly approach.

“The overall philosophy is regulations are bad and they are too large a cost for industry, and the market will take care of it,” said Rick Melberth, director of regulatory policy at OMBWatch, a government watchdog group formed in 1983. “That’s been the philosophy of the Bush administration.”

Today, more than 80 percent of all U.S. toys are now made in China and few of them get inspected.

“We’ve been complaining about this issue, warning it is going to happen, and it is disappointing that it has happened,” said Tom Neltner, a co-chairman of the Sierra Club’s national toxics committee.

The recent toy recalls — along with the presence of lead in vinyl baby bibs and children’s jewelry — are prompting the Bush administration to take a deeper look at the safety of toys and other imported products.

President Bush has asked the Department of Health and Human Services to report in September on ways to better ensure safe imports. He's also asked the Centers for Disease Control and Prevention to consider responses to lead paint threats to children.

But as recently as last December, the Sierra Club sued the Bush administration after the Environmental Protection Agency rebuffed a petition to require health and safety studies for companies that use lead in children’s products. The EPA and Sierra Club settled out of court in April, with the administration agreeing to write a letter to the CPSC that expressed concern about insufficient quality control on products containing lead.

The Sierra Club’s interest in lead paint in children's products grew out of the largest-ever CPSC-conducted recall. That action on July 8, 2004, targeted 150 million pieces of Chinese-made children's jewelry sold in vending machines across the United States. Since 2003, the commission has conducted about 40 recalls of children’s jewelry because of high levels of lead.

In March 2006, a 4-year-old Minnesota boy died of lead poisoning after swallowing a metal charm that came with Reebok shoes. The charm was found to contain more than 90 percent lead.

From 1994 until 2001, Ann Brown headed the CPSC under Presidents Clinton and Bush. She didn’t push for an outright ban on lead in all children’s products, partly because China’s rise to export prowess hadn’t yet unfolded.

“Today, I would say there should be an outright ban in any lead in any toy product,” she said in a telephone interview. “If I were at CPSC now, I’d say that trying to recall (tainted products) is like picking sand out of the beach — it’s just not possible.”

Before leaving her post, Brown unsuccessfully pushed for pre-market testing of children’s products. The idea largely died when the Bush administration took over, said Brown, who's working with Sen. Hillary Clinton’s presidential campaign. The CPSC has only 100 field inspectors to police problems with all products sold to more than 301 million Americans. None of the inspectors are stationed in China or anywhere else abroad.

China remains very much under the microscope. It's fighting a CPSC proposal to bring the lead restrictions in children’s jewelry to the same levels as those imposed on toys and furniture — six hundred parts per million, which effectively amounts to a ban.
“We have done recall after recall since 2003. We would like to move towards a ban and make the marketplace safe,” said Scott Wolfson, a commission spokesman.

But in a March 12 filing, China was the only one of 48 interested parties to tell the panel that it opposed new restrictions on lead paint in children’s jewelry. Guo LiSheng, the deputy director of a Chinese global trade agency, warned against “unnecessary obstacles to trade” and advocated international rules that allow some lead content. He added that good product labeling was sufficient.

“We agree with the viewpoint of USA of protecting the children’s healthy and safety. And we consider that the method of stick warning mark on the children’s metal jewelry … may be more efficient than setting the limit of lead content,” LiSheng wrote from Beijing.

Of the 400 or so product recalls this year, about 60 percent involve products made in China, according to commission statistics.

In response to the toy recalls and tainted products, China announced last Friday the creation of a government panel on product safety. The government appointed Wu Yi, the vice premier and China’s top problem-solver, to head the panel.

Outside a Toys-R-Us store in Maryland’s capital city of Annapolis, Bruce Waskmunski suggested it was a no-brainer that lead should be completely banned from children’s products. He’s angry about the June recall of a Chinese-made Thomas the Train wooden toy that he bought his son.

“The only thing lead paint is in now (in the United States) is 40- or 50-year-old buildings,” he grumbled. “We’ve known about lead paint for years, but we’re giving away the penny to China.”

Beijing Police Launch Web Patrols

Police in China's capital said Tuesday they will start patrolling the Web using animated beat officers that pop up on a user's browser and walk, bike or drive across the screen warning them to stay away from illegal Internet content. ADVERTISEMENT

Starting Sept. 1, the cartoon alerts will appear every half hour on 13 of China's top portals, including Sohu and Sina, and by the end of the year will appear on all Web sites registered with Beijing servers, the Beijing Public Security Ministry said in a statement.

China stringently polices the Internet for material and content that the ruling Communist Party finds politically or morally threatening. Despite the controls, nudity, profanity, illegal gambling and pirated music, books and film have proliferated on Chinese Internet servers.

The animated police appeared designed to startle Web surfers and remind them that authorities closely monitor Web activity. However, the statement did not say whether there were plans to boost monitoring further.

The male and female cartoon officers, designed for the ministry by Sohu, will offer a text warning to surfers to abide by the law and tips on Internet security as they move across the screen in a virtual car, motorcycle or on foot, it said.

If Internet users need police help they can click on the cartoon images and will be redirected to the authority's Web site, it said.

"We will continue to promote new images of the virtual police and update our Internet security tips in an effort to make the image of the virtual police more user friendly and more in tune with how web surfers use the Internet," it said.

China has the world's second-largest population of Internet users, with 137 million people online, and is on track to surpass the United States as the largest online population in two years.

The government routinely blocks surfers from accessing overseas sites and closes down domestic Web sites deemed obscene or subversive.

BeliefWatch: Reincarnate
Matthew Philips

In one of history's more absurd acts of totalitarianism, China has banned Buddhist monks in Tibet from reincarnating without government permission. According to a statement issued by the State Administration for Religious Affairs, the law, which goes into effect next month and strictly stipulates the procedures by which one is to reincarnate, is "an important move to institutionalize management of reincarnation." But beyond the irony lies China's true motive: to cut off the influence of the Dalai Lama, Tibet's exiled spiritual and political leader, and to quell the region's Buddhist religious establishment more than 50 years after China invaded the small Himalayan country. By barring any Buddhist monk living outside China from seeking reincarnation, the law effectively gives Chinese authorities the power to choose the next Dalai Lama, whose soul, by tradition, is reborn as a new human to continue the work of relieving suffering.

At 72, the Dalai Lama, who has lived in India since 1959, is beginning to plan his succession, saying that he refuses to be reborn in Tibet so long as it's under Chinese control. Assuming he's able to master the feat of controlling his rebirth, as Dalai Lamas supposedly have for the last 600 years, the situation is shaping up in which there could be two Dalai Lamas: one picked by the Chinese government, the other by Buddhist monks. "It will be a very hot issue," says Paul Harrison, a Buddhism scholar at Stanford. "The Dalai Lama has been the prime symbol of unity and national identity in Tibet, and so it's quite likely the battle for his incarnation will be a lot more important than the others."

So where in the world will the next Dalai Lama be born? Harrison and other Buddhism scholars agree that it will likely be from within the 130,000 Tibetan exiles spread throughout India, Europe and North America. With an estimated 8,000 Tibetans living in the United States, could the next Dalai Lama be American-born? "You'll have to ask him," says Harrison. If so, he'll likely be welcomed into a culture that has increasingly embraced reincarnation over the years. According to a 2005 Gallup poll, 20 percent of all U.S. adults believe in reincarnation. Recent surveys by the Barna Group, a Christian research nonprofit, have found that a quarter of U.S. Christians, including 10 percent of all born-again Christians, embrace it as their favored end-of-life view. A non-Tibetan Dalai Lama, experts say, is probably out of the question.

Buddha Gets a Biopic

Born into a princely family in the sixth century B.C. in Kapilavastu on the border between present-day India and Nepal, Gautama Buddha abandoned luxury for spiritual enlightenment. Now the life of this man, who founded Buddhism, will be the subject of a film, Agence France-Press reported. Based on research by the Sri Lankan scholar Nimal D’Silva and others, the film will be shot in India and Sri Lanka by Shyam Benegal, an Indian director, for release in 2009. It is a venture of the Light of Asia Foundation, based in Colombo, Sri Lanka, and Beyond Dream Entertainment, based in India. “The message of the movie gives answers to global crises of conflict and environmental problems,” said Navin Gooneratne, chairman of the foundation.

Premature immolation

Burning Man's Icon Goes Up in Flames, 4 Days Too Soon
Joe Garofoli

A San Francisco man was arrested on felony arson charges today after the 40-foot-tall "Man" statue whose torching is the annual highlight of the Burning Man festival in Nevada went up in flames four days early, authorities said.

Paul Addis, 35, of San Francisco, was booked into the Pershing County Jail in Nevada on the arson charge and misdemeanor possession of fireworks, Sheriff Ron Skinner said.

Festival organizers, meanwhile, pondered the smoldering remains of the Man and promised to rebuild the big guy in time for Saturday's regularly scheduled burn in the Black Rock Desert north of Reno.

"The Man is still standing, and an assessment is under way to determine the structural integrity of the Man and the Green Man Pavilion," according to a statement posted today at www.burningman.com. "The event will continue as scheduled."

Jamie Thompson, a spokesman for the federal Bureau of Land Management, which manages the land where the event is held, said the platform and material around the statue was intact.

Some 40,000 people are expected to gather in the desert by this weekend for Burning Man, and Thompson said about 15,000 revelers are already at the festival site. Many were on the playa early this morning watching the lunar eclipse when the fire ignited at 2:58 a.m., according to Burning Man organizers.

Thousands of festival-goers streamed out onto the playa from the surrounding Black Rock City encampment to view the spectacle, witnesses said. Black Rock City rangers rushed to the scene and doused the conflagration within about 25 minutes.

Reactions ranged from amusement and support to frustration and anger.

"I am disturbed that the Man is burnt. As I looked at it, I was going, 'This can't be happening,' " said Bob Harms of South Lake Tahoe, a seven-time burner.

Kyle Marx of Eugene, Ore., said the fire started from the Man's left leg and spread to engulf nearly his entire body.

"Some people were chanting, 'Let him burn, let him burn!' and some were chanting, 'Save the man, save the man!' " Marx said.

Several people were seen clambering up the tower of logs below the statue's platform base shortly before the fire began.

"Someone went to a great extent to interfere with everyone else's burn. I think, frankly, an attention whore has made a plea for attention," said a Burning Man volunteer named Ranger Sasquatch. "In three days, we will have this rebuilt."

A festival-goer who identified herself as simply Erica said she and her friends were "upset by the fact that someone would take this away from everybody who comes to the event just to see the man burn. To try to sabotage him is completely wrong. We wait all year long. This is an adult's Christmas party."

A Fiery Q&A With the Prankster Accused of Burning the Man
Miyoko Ohtake

Paul Addis, the San Francisco playwright arrested Tuesday for allegedly torching Burning Man's giant effigy five days early, won't admit to setting the icon on fire. But he effusively praises the action -- whoever did it -- calling it a badly needed "reality check" for the desert art festival.

Addis, 35, says Burning Man has turned into an "Alterna-Disney," while the early burn acted as a protest aimed at the event's increasing commercialization.

The Tuesday morning blaze, for which Addis faces charges of arson and possession of fireworks, drew a mixed reaction at Burning Man and in the blogosphere: Some rallied to support Addis, saying the early blaze was a righteous move to reset burners' priorities, while others complained that the act threatened to ruin the festival's main event.

Wired News spoke with Addis by phone Thursday as he waited outside a hotel in Fernley, Nevada, for a ride back to San Francisco.

Wired News: So the big question is, did you set the Man on fire?

Paul Addis: For legal reasons I can't answer that. One of us is looking at a felony charge, and it's not you.

WN: Is the Black Rock Intelligence, a group you are openly a member of, claiming responsibility for burning the man? (See this statement from Addis; scroll down to update 18.)

Addis: This was a Black Rock Intelligence operation. But since the group has been disbanded, they can make no claim to responsibility. The Black Rock Intelligence has disbanded, and I am their sole surviving member. I got caught and the rest of them took their L-pills, potassium cyanide.

WN: Are you saying that the other members of the Black Rock Intelligence have all actually committed suicide?

Addis: Take it for what it is.

WN: OK, but if you were part of the Black Rock Intelligence and you're saying burning the Man early was a Black Rock Intelligence operation, isn't that the same as saying you did it?

Addis: No, because it could have been one of our other operators, and because they're all dead no one will ever know.

WN: Was the Black Rock Intelligence, a group you're a member of, responsible for putting the giant testicles on the Burning Man in 1997?

Addis: No, I did that. It was a solo operation. I was part of the building team who built the Man in 1997. I was standing in the back yard of the guy who had the man built. We had the legs assembled, and they were sitting in his backyard. I was on a break and thought, "What's missing from this thing?" and I turned around and I thought, "Balls!"

You can do things through different people with no one knowing the total project so I had one guy buy the balls -- they were huge 54- to 60-inch beach balls -- and I had another guy buy silver spray paint and so on. Then at Burning Man at around 4:30 in the morning I scaled up the robe, locked the balls in place and came down.

WN: And how was that received?

Addis: It was very well received. They stayed up there for hours. Burning Man was very cautious in taking them down, though, 'cause I had jokingly said I was going to fill them with hydrogen. It's that sort of zaniness that doesn't fly there anymore. The Burning Man organization doesn't have any sense of humor anymore and that streams and trickles down to the participants themselves.

WN: You went to Burning Man in 1996, 1997 and 1998 and hadn't been back until this year. Why did you stop going to Burning Man after 1998?
Addis: I decided after 1998 it wasn't worth it. Burning Man was only advocating social impact and responsibility in the name of its own self-preservation, survival and expansion, and I was not willing to be a part of that.

Burning Man in the period of 1996-1997 was the right place at the right time with the right minds. We had a great opportunity to put all of our hands on the wheel and really affect social evolution. We had a bunch of gifted people who had the chance to break the mold on a lot of things.

A lot of people were very interested in making sure the future of America was better than the past. We had lived through the Regan years and the Cold War. We already knew what we didn't want and had the opportunity to build a better place for ourselves and the future generations to come.

Burning Man was the perfect place but once it made the decision that its own survival was more important than its content or style, everything was lost.

WN: What do you mean by that?

Addis: Burning Man was losing money hand over fist through a series of bad decisions and a real lack of business acumen. They took a hit in 1997 that was almost fatal. That really cost the organization in terms of its fiscal stability and steady accounting and in that regard they had to do a mass appeal. And by doing that, they sacrificed everything. They took the edges off and they became the Alterna-Disney. You have a lot of people singing, "It's a Small World After All" but just to a different mouse.

WN: What did you think of this year's Burning Man?

Addis: Burning Man should stop the disingenuous Green Man immediately. It's all a lie. If you want to know how much a of a total lie it is, run a Google satellite photo of Burning Man right now and count the number of RVs there. And they're telling me it's an environmental movement? Bullshit. There are people sucking gas up there faster than they are passing it.

Black Rock Intelligence advocated the first Olympic RV Gas Tank Puncturing competition this year, offering prices to the top three participants. And while the gas was spilling out of all the gas tanks we were going to have people collect it and then open the first Black Rock Intelligence gas station: Set up at the exit of Burning Man and sell gas for $27 per gallon to RVs only.

Burning Man is offering no real alternatives to the current environmental crisis. The only one is wood-burning stoves for cooking. We're living in a world with 6 billion people and their only suggestion is wood-burning stoves? My advice: Stop doing the cocaine. It's starting to eat your brains.

Burning Man has been nothing about the Burning Man anymore except for burning the Man. It has more to do with raising money than spreading the theory of community so we can all live together. The only reason the organization has reached out to the environmentalists is they were courting public opinion on the lawsuit filed against them, and they reached out to the most easily manipulated population they could control. That's what Green Man is all about. Green Man is all about Burning Man getting the most green in their pockets.

WN: So in your mind, Burning Man has lost its purpose?

Addis: Burning Man doesn't accomplish anything anymore. What do we get out of Burning Man? Nothing. Do we get any leaders? We're down to one Ramone and two Vitos and no one from Burning Man is stepping out. There's no good music and only a precious few writers. These fourth and fifth generations of happy-go-lucky birds, what are they doing when they come back to the cities? Nothing. They go blow their wads for seven days at Burning Man and then go back to their jobs. They don't do anything else for the rest of the year.

WN: So what did burning the Man on Tuesday accomplish?

Addis: One, it was a reality check. Two, it was a history lesson. It was, "This is why this started. Why are you here?"

A very good friend of mine, Chris Radcliffe, who was part of starting Burning Man, went four years ago. I called him when he came back and he said, "Paul, everyone keeps waiting for something to happen and it never does." I think that is symbolic and really emblematic of Burning Man's suburbanization of the underground and homogenization of the underground.

There have been people talking about pulling this prank for years. There was a person last year who told people to bring barrels of gasoline to pour on the Man. But there could have been people having their first LSD orgasm and they'd just be reaching climax when everything blew up around them.

I wrote an e-mail to the guy saying it was stupid, reckless and that someone was going to get killed. And then they ended up not doing it.

WN: From your sense, what have people's reactions been to setting Burning Man aflame before the scheduled Saturday burn?

Addis: I have no idea. This could have been all for nothing. It could have made people think. I hope it has. That's all the Black Rock Intelligence has wanted is for people to think for themselves, whether they're in the streets, at Burning Man or in the ballot box. They don't have to like us; the only thing the Black Rock Intelligence has ever wanted was for people to think about what they are doing. If they come back to the same place as where they started, that's fine, at least they thought about it. But every once and a while you can break people out and there's another free mind out there with a Socratic operating system in it.

We're being programmed on every level: TV, radio, internet, advertising. It's everywhere. We believe in the true promise of the American Dream and that should be for everyone no matter what. We're jamming the program and allowing people the freedom of their minds rather than the programming someone else is trying to sell them.

That's the most important thing. We're not telling people what to think or how to think, just presenting alternatives and facts and everything else. Humor, that's the best way to do things. We're not out here to be preachers. But Burning Man has become just as nefarious a cultural programmer as General Electric or Disney.

You only need to look as far as Burning Man's media team to see it's like the Bush media team except with a different purpose. They exercise the same tactics to achieve the same results: to portray themselves in the best lights and to avoid negative media attention.

WN: What do you have to say to the people who are upset about the early Burning Man burn?

Addis: They're entitled to their opinions. I can certainly understand their feelings on it, but at the same time, the newbies who go along aren't from that same pranksterism and one-upmanship that used to be done at Burning Man.

So to them, the entire experience of Burning Man is a passive spectacle. To people who would say they are pissed off because the Man got torched, I say, "Why are you really out there?" If the burning of the Man means something, if it brings them some sort of cathartic connection, then build your own thing and burn it down. Don't be a passive audience member. Cross the line.

WN: You're arraignment is scheduled for Sept. 25 at Pershing County Courthouse in Nevada. How are you going to plead?

Addis: Not guilty to all charges.

Amid All the Cheers, a Few Signs of Change
Kelefa Sanneh

Take a 19-year-old Disney-groomed actress, beloved by tweens and former tweens. Put her onstage at Radio City Music Hall. Give her a microphone. No, a working microphone. Sounds like a recipe for disaster, right?

So you’d think. Hilary Duff certainly isn’t anyone’s idea of an all-around virtuoso. She probably sings a little better than her backup dancers and dances a little worse than her backup singers. And few grown-up fans — except for parents — were paying attention in 2002, when she released her first CD, a concept album loosely inspired by Saint Nicholas, the fourth-century bishop of Myra. (It was called “Santa Claus Lane.”)

Yet Ms. Duff’s music is much better than it might be, and much better than it needs to be. Her recent album, “Dignity” (Hollywood), is full of neat little electro-pop songs that make her wispy voice seem like an asset. And on Monday night at Radio City Music Hall she spent an hour and a half onstage, earning trebly screams that probably would have been just as loud if she had been reciting her life story, putting on a fashion show or doing jumping jacks.

Instead she chose to sing, more or less, and she sounded pretty good. She performed almost the entire “Dignity” album, along with a handful of ancient favorites, including an emo’d-up version of “The Getaway,” which was released way back in 2004. There were a couple of duds, including “Gypsy Woman,” a funk-pop misfire that probably wouldn’t exist if the Romany community had a stronger political lobby. (A sample couplet: “That’s how she works/Her sick and twisted Gypsy curse.”) More often, she made it easy to enjoy dance-club hits like “With Love” and “Play With Fire.”

All night she stuck to sharp beats and simple refrains. Maybe she doesn’t have a choice; suffice it to say that operatic ballads are out of the question. And maybe her very unextraordinary singing is part of her appeal. A young fan usually looks at a pop star and thinks, “That could be me, if only I had the voice.” Ms. Duff takes away the “if only.”

She cheerfully acknowledges her influences, too. “Never Stop,” a snappy new-wave song from “Dignity,” morphed into “Major Tom (Coming Home),” the David-Bowie-inspired 1980s hit by Peter Schilling. “Outside of You,” another infectious “Dignity” track, quoted a melody from Queen’s “Bohemian Rhapsody.” And immediately after “Beat of My Heart,” one of her Go-Go’s-iest songs, she went right to the source with her cover of “Our Lips Are Sealed.”

Before “Come Clean,” also known as the theme song for the MTV reality drama “Laguna Beach: The Real Orange County,” she made a characteristically dispassionate (and, it seemed, underpunctuated) request for audience participation: “Hey you guys know this song help me sing O.K.” The girls in the crowd — some probably attending their first concert — spent as much time gawking as singing. There she was, their heroine, onstage in shiny short-shorts and high heels, singing songs that sounded kind of like sexy robot music or something. Weird! Cool! Hi! La! Ry!

Ms. Duff is clearly comfortable with her stardom. At one point she told her fans how pretty their multicolored glow sticks looked, knowing full well they had been purchased from her own well-stocked merchandise booths. But she must know that her empire is under siege from newer tween juggernauts such as Hannah Montana and “High School Musical.” And she must also know that she’s not a mainstream pop star like Rihanna, at least not yet. At times Monday’s concert felt transitional. She is a teenage idol who will be 20 in a month, and her music is growing up faster than her fan base.

Maybe Ms. Duff will figure it out; after all, she has already established herself as an overachiever. (If you’re wondering how busy her schedule is, this concert came less than 24 hours after she was a host of the “Teen Choice” awards in Los Angeles.) For now, anyway, she remains teen-pop royalty, and perhaps she was using the royal “we” when she delivered her statement of purpose near the end of the night, saying, “We’re capable of so much and we can do anything that we want to.” Sure seems like it.

NBC Buys TV Group Overseas
Bill Carter and Eric Pfanner

NBC Universal announced yesterday the acquisition of a group of international cable television channels owned by Sparrowhawk Holdings of London, a deal that Jeff Zucker, the president and chief executive of NBC, said was the first sign of a strategic shift at the company.

“We want to transfer our portfolio into high-growth businesses and look to move away from businesses that are slower growth,” Mr. Zucker said in a telephone interview. “We are going to acquire and dispose and, at the end of the day, self-fund all of these moves.”

Mr. Zucker did not specify which parts of NBC Universal he intended to shed, and NBC executives emphasized that the portfolio reshuffling was viewed as a long-term project.

He also declined to name any potential acquisition targets. But NBC Universal has been among several media companies, including Viacom, at the center of speculation as potential bidders emerge for the Oxygen cable channel, which caters to an audience of women.

The Sparrowhawk deal — for a group of about 30 pay-television channels, including 18 versions of the Hallmark channel outside the United States — is the first that NBC Universal has closed since Mr. Zucker took the top post in February, and is consistent with his stated intention to expand the international holdings of NBC Universal.

“Media is growing much faster internationally than it is here,” Mr. Zucker said.

The deal is also a play to increase NBC’s revenues. NBC currently takes in about $200 million annually from its internationally distributed television channels, which include CNBC and the Sci Fi Channel. Analysts estimate that Sparrowhawk, which includes 30 or so channels, also earns $200 million a year.

“Our goal is to double our revenues in the next three years, and this represents a big step toward that end,” Mr. Zucker said.

The companies declined to name the deal price, but reports in Britain have put it at about $350 million. A group of investors — the private equity firms 3i and Providence Equity Partners, and the British television executive David Elstein — paid $242 million for the Sparrowhawk channels two years ago.

The channels will give NBC Universal, which is controlled by General Electric, greater exposure to the fast-growing television markets in Asia, Eastern Europe and elsewhere. NBC Universal also plans to introduce new channels and expand existing ones into new markets, network executives said.

With less than 20 percent of its revenue coming from outside the United States, NBC Universal trails other media conglomerates like Walt Disney, which owns ABC, and the News Corporation, which owns the Fox network, in developing a global footprint. Mr. Zucker has said he wants to generate 30 percent of revenue outside the United States by 2010.

“In isolation, this deal isn’t going to get us there,” Peter Smith, president of NBC Universal International, said. “We’re going to need to do a fair bit more.”

Mr. Smith said the international Hallmark channels — the United States version is not included in the deal — would complement NBC Universal’s existing international channels because their programming was popular with women.

In addition to the Hallmark channels, Sparrowhawk owns Movies 24, which shows made-for-TV films in Britain. It also plans to start a channel for children called KidsCo in Central and Eastern Europe, and one in Britain called Diva TV that will be aimed at women.

James L. McQuivey, a media and entertainment analyst at Forrester Research, said an effort by NBC to move toward high-growth assets and away from slower-growth assets would probably move the company toward channels and Web sites aimed specifically toward younger audiences who want “to consume things like comedy and sexual content in small bites.”

If NBC Universal follows this course, he said, “they could end up looking a lot like Viacom.”

Mr. McQuivey said it was impossible to predict which parts of NBC might be disposed of as slow growth, noting that little that NBC owned was growing as slowly as its flagship network, which it was unlikely ever to unload. “They have things like Telemundo and iVillage” which are probably viewed by NBC as faster in growth, he said.

More important, he said, any attempt by NBC to acquire the Oxygen channel would probably be tied to how perfectly it aligned with its iVillage Web site, which also caters to a female audience. “It would be a natural fit between iVillage and Oxygen for things like cross-promotion,” Mr. McQuivey said.

Bill Carter reported from New York, and Eric Pfanner from London.

Knowledge Is Priceless but Textbooks Are Not
Michelle Slatalla

MY 18-year-old daughter recently perfected a new technique to avoid the stress of packing for college.

Her system consisted mostly of lying on her bed and watching me pack for her. That was fine with me, since it was possibly my last opportunity to interfere with her life — and to see what she kept in her drawers — before she left home.

“Do you want to take this empty beer bottle with you?” I asked, gingerly holding it between pincer fingers.

“Get out of my closet,” she said.

I found a pile of crusty cereal bowls behind a stack of sweaters.

“How are you going to survive at college?” I asked.

“I’ll develop a system,” she said.

“That’s very comforting,” I said, feeling like a reluctant magician as I conjured three forks, a coffee cup and the remains of a cake.

With this year’s news about the ways some unscrupulous colleges make an extra buck off students’ naïveté — from loan officers who accepted lenders’ kickbacks to schools that got cash incentives to steer students to expensive study-abroad programs — I felt it was expedient to warn my daughter about a big expense that looms before her.


“Can’t I just buy them at the campus bookstore?” she asked.

I shuddered. As much as I hate to micromanage, I felt compelled to remind her that taking that approach can cost the average college student $700 to $1,000 a year for books, according to a Congressional advisory committee report released in May.

“Which is why,” I concluded, as I organized her T-shirts by color and neckline, “you should get cheaper books online.”

“Fine,” she said. “From which store?”

Good question. Although oodles of online stores and marketplaces — like Biblio.com, Abebooks.com and A1books.com — have in the past five years built large inventories of both used and discounted new textbooks, there’s no single site where you can always get the best deal.

That’s only one of the reasons that, until now, buying textbooks online hasn’t been nearly as convenient as walking into a bookstore, where students didn’t need to calculate the shipping costs, wonder how soon a book would arrive or worry whether they would end up with an outdated edition.

Which explains why most students still end up shopping on campus, said Dave Rosenfeld, a spokesman for Maketextbooksaffordable.org, a site operated by a coalition of student public interest research groups.

“A really savvy student might do the extra work to comparison shop or to call a professor to see if it’s O.K. to use an older edition, but that will be uncommon behavior in the marketplace,” Mr. Rosenfeld said in a phone interview.

“What about a person who stashes dirty dishes under a bed to avoid walking to the kitchen?” I asked.

“Even the savviest students are going to pay a lot of money for books,” he said tactfully.

The good news is that there’s a new tool this year to make it easier to shop online for textbooks.

Bookfinder.com, an umbrella search site that sifts through the inventories of hundreds of thousands booksellers worldwide, started a simple, easy-to-use textbook search tool. The way it works: enter a title, I.S.B.N. or author’s name in Bookfinder’s textbooks search box to navigate a huge database of 125 million new and used books. You can compare prices, shipping costs and the availability of less expensive editions published overseas.

Consider, for example, a textbook required for an advanced Japanese course at my daughter’s college. A Bookfinder search last week for “Genki II: An Integrated Course in Elementary Japanese II” turned up 24 new and used copies, at prices ranging from $20.94 at Amazon.com to $110.62 at Amazon.de. For each of the 24 copies, total price (including shipping) is listed on a single page, along with information about how soon the book will ship. Some sellers offer expedited delivery. Amazon, for instance, offers overnight delivery and discounts of up to 30 percent off on new copies of 200,000 textbooks.

“Our goal is to give students all the options of buying any new or used edition, whether it’s published here or for an overseas market, and then let them decide which books are the best deals for them,” said Anirvan Chatterjee, Bookfinder.com’s founder.

There are some caveats. My daughter, like a lot of freshmen, won’t know which textbooks she needs to buy until she completes registration on the eve of starting classes; some books she may need immediately. And some instructors may require the newest American editions of textbooks.

“But in most cases, most international editions published for Canada, the Philippines, Malaysia and India are really similar to the U.S. versions,” Mr. Chatterjee said. “So we’ve been working on really boosting our inventory of those books, adding 18 to 20 new international partners this year.”

Here are some practical tips for shopping online for textbooks this year:

THE BIGGEST SAVINGS are on the most expensive books. For freshmen who are already overwhelmed trying to find classroom buildings or negotiate a truce with a new roommate, shop around for one or two of the priciest textbooks you need. A new copy of a first-year textbook like, say, “Biology, seventh edition” by Neil Campbell and Jane Reece, which lists for $153.33, was available for $57.45 last week at Valorebooks.com.

SEARCH ONLINE for textbooks with nonspecific names like “Chemistry” or “Calculus,” using the International Standard Book Number (or I.S.B.N.) to make sure you buy the right book.

GET AN EARLY START. With students nationwide competing to get the best deals, shop as soon as possible. More and more schools — from big public universities like the University of California, Berkeley, to private schools like Lynchburg College — list required textbooks on their Web sites. The State University of New York at Binghamton’s site, for instance, lists required texts by course and individual instructor.

“Not that I want to interfere,” I told my daughter.

“Of course not,” she said.

I opened the bottom drawer of her dresser. There I found my favorite black cardigan, missing for months.

“Don’t worry, I can take care of myself,” she said, grabbing the sweater and packing it.

Maybe she can. I noticed my favorite belt (“missing” since April) was in already in her suitcase.

The Devil Sells Prada
Caroline Weber


How Luxury Lost Its Luster.

By Dana Thomas.

Illustrated. 375 pp. The Penguin Press. $27.95.

“Luxury,” Socrates once declared, “is artificial poverty.” I’m not poor, but there’s nothing like an afternoon spent shopping for luxury goods to make me feel that way. On a recent jaunt through some of Midtown Manhattan’s snazzier stores, I began to wonder why this should be the case. When, I asked myself, did it become commonplace to charge several thousand dollars for a mass-produced handbag? How could the flimsy designer sundress I bought on sale — a “steal,” the saleswoman assured me — still wind up costing a whole month’s salary? Why is my favorite brand of lipstick more expensive than a nice bottle of Italian wine? When did these products’ values grow so distorted, and what is the would-be customer to make of it all?

In the midst of my consumerist crisis, the question I should have been asking was: Dana Thomas, where have you been all my life? In “Deluxe: How Luxury Lost Its Luster,” Thomas investigates the business of designer clothing, leather goods and cosmetics, and finds it wanting. Hijacked, over the past two or three decades, by corporate profiteers with a “single-minded focus on profitability,” the luxury industry has “sacrificed its integrity, undermined its products, tarnished its history and hoodwinked its consumers.” Hoodwinked? The truth hurts. After I read “Deluxe,” suddenly my new sundress no longer looked like such a steal. Au contraire, the book’s line of argument suggested, it was I who’d been robbed.

For Thomas, a cultural and fashion writer for Newsweek in Paris and the Paris correspondent for the Australian Harper’s Bazaar, the luxury industry is a sham because its offerings in no way merit the high price tags they command. Yet once upon a time, they most certainly did. In the 19th and early 20th centuries, when many of luxury’s founding fathers first set up shop, paying more money meant getting something truly exceptional. Dresses from Christian Dior, luggage from Louis Vuitton, jewelry from Cartier: in the golden period of luxury, these items carried prestige because of their superior craftsmanship and design. True, only the very privileged could afford them, but it was this exclusivity that gave them their cachet. Although they may have “cared about making a profit,” the merchants who served this pampered class aimed chiefly “to produce the finest products possible.”

All that changed, however, in the last decades of the 20th century, when a new breed of luxury purveyor, epitomized by Bernard Arnault, now the chairman and chief executive of the multibillion-dollar LVMH Moët Hennessy Louis Vuitton conglomerate, first came on the scene. “A businessman, not a fashion person,” Arnault realized that the mystique of the great brand names represented an invaluable — and historically underexploited — asset. Identifying the luxury sector as “the only area in which it is possible to make luxury margins,” Arnault snapped up Dior, Vuitton and a clutch of other star brands. Then, by spending hundreds of millions on advertising, dressing celebrities for the red carpet, “splashing the logo on everything from handbags to bikinis,” and pushing product in duty-free stores and flagship boutiques all around the world, he turned these brands into objects of global consumer desire. In so doing, Arnault changed “the course of luxury forever.”

And strictly, Thomas argues, for the worse. Insofar as luxury has gone corporate, relentlessly focused on the bottom line, quality has disappeared. In order to keep margins high (in 2005, LVMH recorded more than $17 billion in sales and a net profit of almost $1.8 billion), Arnault and his competitors have cut costs wherever and whenever possible. The most obvious strategies involve using cheaper materials, replacing skilled artisans with computers and machines and outsourcing labor to less expensive markets like China. Sneakier tactics include “cutting sleeves a half an inch shorter” (“when you get to 1,000, you see the savings,” one employee told the author), replacing finished seams with raw edges and eliminating linings on the grounds that “women don’t really need” them. A grouchy aside: my aforementioned sundress is (a) an LVMH brand and (b) unlined. It is also (c) white, which means that a lining would sure have come in handy. But if Arnault can amass a personal fortune of more than $21 billion by forcing me to display my underwear, then who am I to complain?

In truth, the perverse reality of luxury consumption today is that so few people are complaining, and so many are clamoring for what Thomas refers to (a bit too frequently for my taste) as a piece of the “dream.” Paradoxically, as craftsmanship has waned, consumer appetite has grown — and not just among luxury’s original, elite clientele. The vast reach of contemporary advertising, distribution and product-placement efforts has effectively democratized luxury, making once exclusive brands available, if only in the form of logo-covered sneakers or sunglasses, to middle-market customers the world over. “Luxury-brand logos convey wealth, status and chic,” Thomas explains, “even if the bearer of the logo-ed product is a middle-market suburban housewife who bought it on credit.”

As a result, a designer jacket or handbag or watch no longer transmits reliable information about its wearer’s socioeconomic stature or background. Without quite coming right out and saying it, Thomas seems nostalgic for the good old days when “a middle-market suburban housewife,” say, couldn’t be confused with her betters. The author is shocked to overhear a woman “in a designer pantsuit, good jewelry and Chanel sunglasses” expressing interest in a fake Rolex. Spotting a couple loading shopping bags into a $380,000 car, she is surprised to learn that their loot came from an outlet store. In a discussion of the booming, underground market for counterfeit luxury goods, she compares “folks with a craving for the goods but not enough dough for the genuine thing” to petty teenage drug users — eager “to buy a couple of joints with their allowance or baby-sitting money.” She quotes a commentator on the last days of the Roman Republic, who contrasts an era of rampant, nouveau-riche acquisitiveness to an earlier and more “patrician” age when “people used to know their place.”

These hints of condescension are regrettable, for Thomas’s message is relevant to shoppers of every stripe. Whether upscale or middle-market, paying in cash or buying on credit, today’s customer is barraged at every turn with the logos that, for titans like Arnault, mean pure, corporate gold. “Deluxe” performs a valuable service by reminding us that these labels don’t mean much else. Once guarantors of value and integrity, they are now markers that point toward nothing, guiding the consumer on a road to nowhere.

The Muse Who Made the Guitars Gently Weep
Janet Maslin


George Harrison, Eric Clapton, and Me

By Pattie Boyd with Penny Junor

Illustrated. 321 pages. Harmony Books. $25.95

Pattie Boyd calls herself a muse, and she has the ravishing love songs (George Harrison’s “Something,” Eric Clapton’s “Layla” and “Bell Bottom Blues”) to prove it. But in Ms. Boyd’s case, being a muse also means never having paid a light bill until she was 45, jobless and suddenly unplugged from the world of rock ’n’ roll royalty.

Now, in a spotty but scrumptious memoir that sounds more like the handiwork of Ms. Boyd’s collaborator, Penny Junor, she is ready to take stock of her amorous adventures. “Wonderful Tonight,” which takes its title from another of Mr. Clapton’s sublime, love-struck songs about her, devotes mercifully brief time to her formative years (“My earliest memory is of sitting in a high chair spitting out spinach”; “My only comfort was Teddy, my beloved bear”) and cuts quickly to the chase.

It meets the Beatles. And it meets them at the point where most of the world met Ms. Boyd: when she appeared briefly in the film “A Hard Day’s Night,” riding on a train and looking fetching in a schoolgirl’s uniform. Mr. Harrison immediately asked her to marry him, in a fit of prescience and snappish Beatle humor.

Ms. Boyd had been a successful London model in her dollybird days. She appeared on the cover of a book called “Birds of Britain,” prompting the writer Anthony Haden-Guest, in the introduction, to rhapsodize about “a swirl of miniskirt, beneath which limbs flicker like jackknives and glimmer like trout.”

This made her exactly the kind of female accessory that rock stars favored in the days when, as Ms. Junor has probably put it, “the capital was abuzz with creativity, bristling with energy.” Ms. Boyd would have been one tin-eared muse if she herself wrote passages like: “And, to use the old cliché, make love not war. As long as you were young, beautiful and creative, the world was your oyster.”

This book has a running food motif, which allows it to ask a priceless question: “Who would have guessed that the humble potato would play such an important part in my life?” Translation: Ms. Boyd appeared in a television commercial for potato chips, which led to the “Hard Day’s Night” casting call, which led to a place in history.

She quickly became part of the Fab Eight, since each Beatle traveled with a wife or girlfriend. And in January 1966 she and Mr. Harrison married, but not before he asked permission of Brian Epstein, the group’s manager. As the new Mrs. Harrison would repeatedly learn, “all of those musicians were like little boys in long trousers.” They never navigated the world for themselves, so neither did she.

Ms. Boyd doesn’t remember much about her Beatle years that has not already been described by pop historians. “George’s moods, I think, had much to do with what was going on between the Beatles,” she says vapidly. And this book includes perhaps the least useful account of the much-described 1968 all-star idyll in India: “If it was anyone’s birthday, and there was a surprising number while we were there, including George’s 25th and my 24th, there would be cake and a party.” But that’s not what you’re reading “Wonderful Tonight” for, is it?

There is exactly one big question for Ms. Boyd to answer here: What made her leave Mr. Harrison for Mr. Clapton, her husband’s close friend?

To its credit the book answers that question plausibly and fully. Mr. Harrison returned from India a changed man, Ms. Boyd says. He turned meditative and moody, “so if you talked to him you didn’t know whether you would get an answer in the middle of his chanting or whether he would bite your head off.” He also began to drink, sleep with his friends’ wives (most notably Ringo Starr’s) and become increasingly hard to find in their 25-bedroom house. Meanwhile mash notes from Mr. Clapton began to arrive.

“Wonderful Tonight” repeats enough of these letters to show that the plaintive beauty of “Layla” (Mr. Clapton’s name for Ms. Boyd, taken from the Persian writer Nizami) was no fluke. One letter reads, “for nothing more than the pleasures past i would sacrifice my family, my god, and my own existence, and still you will not move.”

Ms. Boyd also says that Mr. Clapton told her he would begin using heroin if she wouldn’t leave Mr. Harrison for him, and that he made good on that threat. Mr. Clapton, whose own autobiography, “Clapton,” is imminent in an autumn that will be full of rock ’n’ roll memoirs, sees the heroin issue a little differently: He says he was already fully addicted. But he basically shares her idea of their grand passion.

So off she went, only to find that life at Mr. Clapton’s place, fittingly called Hurtwood Edge, was hardly an improvement. “It was as though the excitement had been in the chase,” she realizes amid many tales of drunken excesses, after Mr. Clapton had successfully traded drug addiction for alcoholism. “On reflection I see that being in love with him was like a kind of addiction,” Ms. Boyd says in one of many indications that she has logged long hours of therapy in dissecting her past.

“When the first thing you have in the morning is a packet of cigarettes with a large brandy and lemonade, you have a problem,” she recalls a friend’s having told Mr. Clapton. “Have you never heard of Shredded Wheat?”

Mr. Clapton eventually heeded this advice. And after all their tumultuous times together Ms. Boyd felt that he was no longer the live wire she had married. They eventually divorced, and this led her to the sadder, wiser post-muse period that the last part of her book describes.

“Our generation really did lead a revolution,” it concludes feebly. And: “I have known some amazing people and had some unforgettable experiences.” Her husbands’ music is what made them unforgettable. But her side of the story, for all its slick packaging and hopeless platitudes, is worth hearing too.

Democrats Face Online Diagnoses, but No Cure Yet
Michiko Kakutani


Billionaires, Bloggers, and the Battle to Remake Democratic Politics

By Matt Bai

316 pages. The Penguin Press. $25.95.

Although last year’s midterm elections ended in a historic Democratic take-back of Congress, party leaders and grass-roots supporters alike have acknowledged that the gains owed more to public unhappiness with the Iraq war and the presidency of George W. Bush than with any bold new policies advanced by the Democrats. In fact, the current race for the White House finds the Democratic Party facing both a deep-seated identity crisis and a Republican Party that, while weakened, still boasts a redoubtable infrastructure buttressed by a daunting message machine.

In his illuminating new book, the journalist Matt Bai examines the health of the Democratic Party, focusing on the insurgent progressive movement that is taking on the Washington establishment — a largely Internet-driven movement that’s brought together wealthy venture capitalists, determined to help build a re-energized party; angry bloggers, furious with the Bush administration and fed up with Democratic moderates; and isolated suburban liberals in red states, eager to use the Web to connect with like-minded citizens around the country.

“The Argument,” which grew out of articles Mr. Bai wrote for The New York Times Magazine, combines lots of energetic reporting on the ground with some astute political analysis. The result is a colorful topographical map of the Democratic landscape: an anatomy of the party’s new progressive wing and its contentious relationship with centrist groups like the Democratic Leadership Council, and some sharply observed portraits of progressive power brokers like Howard Dean, the bloggers Jerome Armstrong and Markos Moulitsas Zúniga and the union leader Andy Stern.

While the reader might wish that Mr. Bai had spent more time assessing the impact that the insurgent movement and schisms within the party will have on the 2008 elections, he does provide some telling glimpses of Hillary Rodham Clinton’s often contentious relationship with bloggers, who remain skeptical of the sort of centrism she and her husband have come to represent, and of Barack Obama, one of the progressive movement’s would-be heroes, who has scolded insurgents for trying to impose purity tests on their elected leaders.

In one of the book’s more biting chapters, Mr. Bai draws parallels between “the most successful company of the last century” (i.e., General Motors) and “the dominant political party of the same era” (i.e., the Democrats) — two 20th-century behemoths, he says, that are reluctant to let go of old ideas and fonder of new marketing plans than of genuine innovation.

“Just as G.M. couldn’t begin to consider a world without Pontiacs,” he writes, “neither could Washington Democrats and their interest groups envision a world where every single liberal provision of the last 70 years didn’t exist intact. This made real innovation — the kind of innovation that had launched the modern Democratic Party in the first place — all but impossible. There were all kinds of specific new policy proposals on the Democratic shelf, just as there were always new models of Buicks and Pontiacs on the drawing boards. But there was nothing approaching a plan to restructure the modern social contract for an age when Wal-Mart, and not G.M., employed the most Americans, in the same imaginative way that the New Dealers had dreamed up a compact to meet the challenge of an earlier day.”

The Internet, in the view of many progressives, was going to change all that: the Web was going to be for Democrats what talk radio was for Republicans. As the political blogger Jerome Armstrong put it, the Web was going to change the nature of the party, putting power into the hands of passionate grass-roots activists and redrawing the country’s political map by organizing progressives not just in old industrial blue states, but in red-leaning states as well.

And yet, as Mr. Bai finds, the insurgents are often painfully split among themselves, and their emphasis on tactics and fund-raising underscores their own difficulty, thus far, in articulating a new paradigm for the party.

Echoing other journalists, like Jonathan Chait of The New Republic, Mr. Bai notes that the new progressive movement sprang, in part, from a desire to replicate the successes of the G.O.P. in building up a formidable infrastructure, including think tanks (like the Hoover Institution) to generate ideas, media outlets (like Fox News) to amplify the message, and a dynamic fund-raising apparatus.

A Power Point slide show created by a little-known political operative named Rob Stein presented an anatomy of American conservatism and plotted a Democratic response, and it began to spread virally in 2003 and 2004, bringing together a group of wealthy liberal donors who would eventually form the often strife-ridden Democracy Alliance.

For more middle-class activists, there was MoveOn.org, which was started in 1998 by Wes Boyd — the inventor of that once-ubiquitous screen saver of flying toasters — as a response to Republican efforts to impeach President Clinton. Mr. Boyd’s Web site, which asked people to sign a petition calling on Congress to censure the president and “move on,” soon became a virtual meeting place for disaffected liberals.

Later, under the direction of Eli Pariser, MoveOn.org would expand sharply, becoming a vociferous voice of the antiwar left and a serious fund-raising force. By the end of 2004, Mr. Bai reports, “its membership list had soared to over three million, and its annual budget had surpassed $25 million a year.”

MoveOn tended to be strongest, Mr. Bai notes, in states where the Democratic Party had withered away, leaving a vacuum. It became a kind of gathering place for liberals in red states and red districts (largely written off by Washington Democrats, who wanted to focus on winnable races in battleground states), and it soon evolved into “an outlet for frustration not just with the excesses of conservative ideologues, but with the Clintonian strategy of meeting them in the middle.”

In fact, Mr. Bai writes, Eli Pariser believed that “no actual center remained in American politics; there were only varying degrees of liberals and conservatives, both groups battling for the soul of America. Trying to appeal to the moderate voter, as Washington Democrats were always trying to do, was a waste of time.”

Markos Moulitsas Zúniga, whose site, DailyKos.com, Mr. Bai describes as “the single most influential political blog in the country,” also criticizes Washington Democrats for trying to appeal to what he calls the “mythical middle,” insisting that the public is “just waiting for somebody to stand up and say what we believe.”

What unites “netroots” activists, Mr. Bai writes, is less any kind of governing agenda for the country than a commitment to “the principle of unyielding partisanship.” According to the blogger ethos, he says, “Republicans, whether staunchly conservative or not, were to be stomped, beaten and generally humiliated. And any Democrat who didn’t pursue that goal — who saw value, say, in cooperating with Republicans on a deal to reduce farm subsidies or to extend a package of tax credits — needed to be taught a lesson. It was a common theme among the bloggers that Bush was tilting toward dictatorship, and that those who didn’t condemn everything he did were appeasers whom history would harshly judge. Some bloggers started referring to collaborators within their own party as ‘Vichy Democrats.’ ”

In denigrating Washington insiders and the mainstream media, Mr. Bai says, the “netroots” culture not only dismisses “the individuals who fell into these categories, but all the knowledge such people had accumulated.”

“In a sense,” he goes on, “the way the netroots saw it, the more you knew about Democratic politics before 1998, the less relevant you actually were.” It’s an attitude that makes for a distinct lack of historical perspective, and when combined with bloggers’ focus on tactics and message, Mr. Bai points out, it results in scant attention being given to ideas and ideals.

For that matter, this book suggests that Democrats of all stripes — progressive and old-school, Internet-driven and Washington-based — have failed, thus far, to redefine their party with a new vision, and that as the 2008 elections approach, the party is still struggling to figure out exactly what it represents, other than a repudiation of Republican principles and policies.

Ted Nugent Wants to Kill Barack Obama, Hillary Clinton

Oh Ted, you're incredibly edgy. Ted Nugent has, by any honest calculation, trumped the Dixie Chicks, Rage Against the Machine and pretty much any other musician who has ever spoken out about politics.

As you can see in the video posted below, Ted had some incredibly harsh words and actions for two Democratic presidential candidates: Barack Obama and Hillary Clinton.

While holding two machine guns and pacing the stage, The Nuge spit his venom encouraging violence against the two candidates.

Just so we're clear on this, here's the bulk of what he says in the video:

I was in Chicago, I said, ‘Hey Obama, you might wanna suck on one of these you punk.' ... Obama, he's a piece of shit, I told him to suck on my machine gun. Lets hear it! [crowd cheers] I was in New York, I said, ‘Hey Hillary, you might want to ride one of these into the sunset, you worthless bitch.' ... She might want to suck on my machine gun.

The Nuge ended his speech by holding up two machine guns and yelling, "Freeeeedom!," William Wallace-style. While I'm a huge fan of the First Amendment, violence is about as cool as Ted Nugent is, so this whole thing sounds about right.

By the way, Ted, nice headset microphone

Democrats Say They Will Press Gonzales Inquiries
Philip Shenon and David Johnston

The resignation of Attorney General Alberto R. Gonzales does not mean an end to several investigations into his actions and truthfulness during his tenure at the Justice Department, with Congressional Democrats promising on Tuesday to press their inquiries.

Mr. Gonzales is a focus of investigations by the House and Senate Judiciary Committees, centered on his role in the dismissals of United States attorneys last year for what appear to have been political reasons. Other inquiries are being conducted by the Justice Department’s inspector general and its Office of Professional Responsibility.

The White House said it would move quickly to find a replacement for Mr. Gonzales. A spokesman would not confirm the names of candidates under consideration.

Several names continued to circulate on Tuesday on Capitol Hill and within the department, including those of Michael Chertoff, the secretary of homeland security and a former senior Justice Department prosecutor; Theodore B. Olson, who was solicitor general earlier in the Bush administration; and Larry D. Thompson, a former deputy attorney general.

Colleagues said Mr. Chertoff was especially eager for the appointment. Although lawmakers saw him as a leading candidate, several Democrats suggested he would come under unflattering scrutiny if nominated because of his role in the government’s initially disastrous response to Hurricane Katrina two years ago and his involvement at the Justice Department in legal issues related to interrogation of terror suspects after the Sept. 11 attacks.

“There would be a lot of careful questioning of Chertoff,” said Senator Charles E. Schumer, Democrat of New York, who is a member of the Judiciary Committee. “There is not confidence among Democrats that he has an instinctive desire to side with the rule of law over politics.”

Mr. Chertoff, meeting with local officials in Mobile, Ala., on the second anniversary of Hurricane Katrina, was evasive on Tuesday when asked about speculation that he was being considered as Mr. Gonzales’s replacement.

“The president will make the decisions he will make and will make any announcement when he chooses to do so,” Mr. Chertoff said. “I think I have given all the answer I am going to give as far as press speculation goes on who will fill that job.”

Democratic officials in Congress acknowledged that Mr. Gonzales’s departure, which they had sought for months, would most likely drain some of the drama and energy from their investigations of his work at the Justice Department.

But in other ways, his departure offers the Democrats new leverage over the White House in demanding information about the dismissals of the United States attorneys and about a government eavesdropping program heavily promoted by Mr. Gonzales that at one point was seen by some Justice Department lawyers as potentially unlawful.

Although Senate Democrats say they will not delay unnecessarily consideration of the nominee to succeed Mr. Gonzales, they can press for White House cooperation in the other investigations before moving to confirm a new attorney general.

Speaker Nancy Pelosi, Democrat of California, said Monday that Congress would insist that Mr. Gonzales’s replacement “pledge to cooperate with ongoing Congressional oversight into the conduct of the White House in the politicization of federal law enforcement.”

Senator Patrick J. Leahy, the Vermont Democrat who is chairman of the Judiciary Committee, said although he welcomed Mr. Gonzales’s departure, it would have no effect on the committee’s pursuit of answers about who ordered the dismissals of the United States attorneys and whether Mr. Gonzales had told the truth to Congress about them.

“I intend to get answers to these questions no matter how long it takes,” Mr. Leahy said, suggesting that Mr. Gonzales could face subpoenas from the committee for testimony or evidence long after leaving the administration.

“You’ll notice that we’ve had people subpoenaed even though they’ve resigned from the White House,” he said, referring to Harriet E. Miers, the former White House counsel, and Karl Rove, who resigned this month as the president’s top political aide. “They’re still under subpoena. They still face contempt if they don’t appear.”

The investigations by the Justice Department’s inspector general, Glenn Fine, and its Office of Professional Responsibility involve the conduct of senior Justice Department officials, including Mr. Gonzales, in the dismissals of the prosecutors and in the National Security Agency’s program of eavesdropping without warrants.

Senate Democrats made a separate request last month for Solicitor General Paul D. Clement, the highest-ranking Senate-confirmed official at the Justice Department after Mr. Gonzales, to appoint a special counsel to review whether the attorney general had perjured himself in Senate testimony about either the United States attorneys or the eavesdropping program.

Mr. Clement, who will be acting attorney general until a permanent successor is installed, has not publicly disclosed whether he has pursued the appointment.

Tommy Stevenson contributed reporting from Mobile, Ala.

A Scandal-Scarred G.O.P. Asks, ‘What Next?’
Sheryl Gay Stolberg

Scott Reed, a Republican strategist, was at a dinner in Philadelphia on Monday night when his cellphone and Internet pager began beeping like crazy. Only later did he learn why. His party was buzzing with news of a sex scandal involving a Republican United States senator — again.

Just when Republicans thought things could not get any worse, Senator Larry E. Craig of Idaho confirmed that he had pleaded guilty to misdemeanor charges of disorderly conduct after an undercover police officer accused him of soliciting sex in June in a Minneapolis airport restroom. On Tuesday, Mr. Craig, 62, held a news conference to defend himself, calling the guilty plea “a mistake” and declaring, “I am not gay” — even as the Senate Republican leadership asked for an Ethics Committee review.

It was a bizarre spectacle, and only the latest in a string of accusations of sexual foibles and financial misdeeds that have landed Republicans in the political equivalent of purgatory, the realm of late-night comic television.

Forget Mark Foley of Florida, who quit the House last year after exchanging sexually explicit e-mail messages with under-age male pages, or Jack Abramoff, the lobbyist whose dealings with the old Republican Congress landed him in prison. They are old news, replaced by a fresh crop of scandal-plagued Republicans, men like Senator David Vitter of Louisiana, whose phone number turned up on the list of the so-called D.C. Madam, or Senator Ted Stevens of Alaska and Representative Rick Renzi of Arizona, both caught up in F.B.I. corruption investigations.

It is enough to make a self-respecting Republican want to tear his hair out in frustration, especially as the party is trying to defend an unpopular war, contain the power of the new Democratic majority on Capitol Hill and generate some enthusiasm among voters heading toward the presidential election in 2008.

“The real question for Republicans in Washington is how low can you go, because we are approaching a level of ridiculousness,” said Mr. Reed, sounding exasperated in an interview on Tuesday morning. “You can’t make this stuff up. And the impact this is having on the grass-roots around the country is devastating. Republicans think the governing class in Washington are a bunch of buffoons who have total disregard for the principles of the party, the law of the land and the future of the country.”

Then again, Washington does not have a monopoly on the latest trend among Republicans. Just ask Thomas Ravenel, the state treasurer of South Carolina, who had to step down as state chairman of Rudolph W. Giuliani’s presidential campaign after he was indicted on cocaine charges in June.

Or Bob Allen, a state representative in Florida who was jettisoned from the John McCain campaign last month after he was arrested on charges of soliciting sex in a public restroom.

Mr. Craig, for his part, has severed ties with the Mitt Romney campaign, despite his public declaration on Tuesday that “I did nothing wrong.”

In an interview Tuesday on “Kudlow and Company” on CNBC, Mr. Romney could not distance himself fast enough. “Once again, we’ve found people in Washington have not lived up to the level of respect and dignity that we would expect for somebody that gets elected to a position of high influence,” Mr. Romney said. “Very disappointing. He’s no longer associated with my campaign, as you can imagine.”

Republicans, of course, do not have an exclusive hold on scandal. As Democrats accused Republicans of engaging in a “culture of corruption” during the 2006 midterm elections, Republicans eagerly put the spotlight on Representative William J. Jefferson, the Louisiana Democrat who stashed $90,000 in his freezer — ill-gotten gains, the authorities said.

Still, there is a sort of “here we go again” sense among Republicans these days, especially since news of the Craig arrest broke on Monday afternoon. It is tough enough being in the minority, weighed down by the burden of the war in Iraq. Now Republicans have an even more pressing task: keeping their party from being portrayed not just as hypocritical and out of touch with the values of people they represent, but also as a laughingstock — amid headlines like “Senator’s Bathroom Bust,” which ran all Tuesday afternoon on CNN. The story also ran at the top of all the network evening newscasts on Tuesday.

“I’m hoping it’s a big mistake,” said one of Mr. Craig’s Republican colleagues, Senator Lamar Alexander, traveling Tuesday in Tennessee, his home state. “But it certainly does nothing to increase confidence in the United States Senate.”

With President Bush hobbled by his own political difficulties, the party can hardly look to him to lead them out of the morass. “If we had a coach,” said John Feehery, who was press secretary to Representative J. Dennis Hastert when Mr. Hastert was the House speaker, “the coach would take us in the locker room and scream at us.”

Some Republicans are indeed screaming, particularly the party’s social conservative wing, which places a high priority on ethics and family values. Tony Perkins, the president of the Family Research Council, a conservative advocacy group in Washington, said the elections of November 2006, in which Republicans lost control of the House and the Senate, proved that voters want politicians in Washington to clean up their act.

“Exit polls show that was the No. 1 factor in depressing Republican enthusiasm,” Mr. Perkins said in an interview Tuesday. “There is an expectation that leaders who espouse family values will live by those values. And while the values voters don’t demand perfection, I do believe they want leaders with integrity.”

The perception that Mr. Craig is not living up to his own values is causing problems for him, and after his appearance on Tuesday, with his wife standing by his side, some Republicans confessed they did not know what to think.

“He sounded almost as convincing as, ‘I did not have sex with that woman,’ ” said Gary Bauer, a Christian conservative and onetime Republican presidential candidate, reprising President Bill Clinton’s remark initially denying involvement with Monica S. Lewinsky.

Mr. Craig is up for re-election next year and has promised to announce next month whether he is running again. Some, like Mr. Bauer, say he is unlikely to survive the current scandal; others, noting that Senator Vitter seems to have weathered his storm, say Mr. Craig might be able to tough it out. And at the rate things are going, says Mr. Reed, the Republican strategist, it might be only a matter of time before a new scandal pushes Mr. Craig’s woes off the front page.

“I’m a little afraid to say anything, because you don’t know what happens tomorrow,” Mr. Reed said. “That Vitter thing, that’s like ancient history now.”

Carl Hulse in Nashville contributed reporting.

U.S. Military Censors ThinkProgress

ThinkProgress is now banned from the U.S. military network in Baghdad.

Recently, an avid ThinkProgress reader — a U.S. soldier serving his second tour in Iraq — wrote to us and said that he can no longer access ThinkProgress.org.

The error message he received:

The ban began sometime shortly after Aug. 22, when Ret. Maj. Gen. John Batiste was our guest blogger on ThinkProgress. He posted an op-ed that was strongly critical of the President’s policies and advocated a “responsible and deliberate redeployment from Iraq.” Previously, both the Wall Street Journal and Washington Times had rejected the piece. An excerpt:

It is disappointing that so many elected representatives of my [Republican] party continue to blindly support the administration rather than doing what is in the best interests of our country. Traditionally, my party has maintained a conservative view on questions regarding our Armed Forces. For example, we commit our military only when absolutely necessary. […]

The only way to stabilize Iraq and allow our military to rearm and refit for the long fight ahead is to begin a responsible and deliberate redeployment from Iraq and replace the troops with far less expensive and much more effective resources–those of diplomacy and the critical work of political reconciliation and economic recovery. In other words, when it comes to Iraq, it’s time for conservatives to once again be conservative.

Not surprisingly, both the National Review and Fox News are still accessible.

In Primary, Tech’s Home Is a Magnet
Laurie J. Flynn

For presidential candidates campaigning in Iowa, the place to be is the state fair. Diners are popular in New Hampshire. But for those visiting Silicon Valley, it’s the Googleplex.

The destination, Google’s headquarters, is packed full of young millionaires, just the kind of audience presidential candidates want to meet while building campaign funds. Already, Google, the fast-growing search and advertising company, has been visited by five candidates, including Hillary Rodham Clinton, John McCain, Barack Obama and Bill Richardson.

When Representative Ron Paul, the iconoclastic Texas Republican, appeared, he attracted an overflow crowd of 250 people, and 100 others watched on monitors from another room. Mr. Paul garnered $3,350 from Google employees. But Mrs. Clinton got 10 times that amount from Google employees, and Mr. Obama raised nearly twice as much as she did.

Like auto factories a generation ago, Google is increasingly popular as a place to raise money and speak to a crowd, signifying the larger role that Silicon Valley is playing in presidential politics. Candidates passing through the Valley have never raised so much money so early. In the first half of the year, the computer industry contributed $2.2 million to all candidates in the primary, up from $1.2 million in the first six months of each of the last two presidential primary races.

Of course, campaign fund-raising is up across the board, as the 2008 election, lacking an incumbent and with partisan feeling already intense, is shaping up as the most expensive ever. And as in the nation as a whole, most money raised here in recent months has gone to Democratic candidates.

In a flip from the primary season for the 2000 presidential election, 60 percent of the contributions so far from people in the technology field here are going to Democrats. The Democratic candidates raised $1.4 million from the industry in the first half of this year, while Republican candidates raised $890,000. That total is up from $1.2 million in the first six months of each of the last two presidential primary races.

Senator Obama, Democrat of Illinois, had a slight edge over Mrs. Clinton during the first half of 2007, with $555,000 in donations of $200 or more from the computer and Internet industry, according to the Center for Responsive Politics, a nonpartisan research organization in Washington.

Mrs. Clinton, Democrat of New York, raised $551,000, while Mitt Romney, the Republican former governor of Massachusetts, came in third with $435,000. (Contributions from the many lawyers and venture capital investors in the high-tech industry, among the largest political contributors, are grouped separately.)

Part of Mr. Obama’s appeal, it seems, is that he is considered something of a start-up, reminding many of the technorati of themselves. “The Valley is used to taking start-ups and making huge success stories out of them,” said John Roos, an Obama fund-raiser who is chief executive of Wilson Sonsini Goodrich & Rosati, the Silicon Valley law firm. “Obama has that aura.”

Contributions so far might have been even greater, except that some of the tech industry’s elite appear to have been holding out in the hope that Al Gore would decide to join the Democratic race.

Mr. Gore sits on Apple’s board and advises Google, and he is widely seen as a crusader for causes dear to the Silicon Valley moneyed, including alternative energy and stem cell research. He even has his own start-up based in San Francisco, a cable network called Current TV.

“He’s certainly thought of as a ‘local boy,’ ” said Joseph W. Cotchett, a San Francisco lawyer and noted fund-raiser for John Edwards, the Democratic former senator from North Carolina. “Has it affected contributions? I think so,” Mr. Cotchett said. “I think some people are dragging their heels.”

But with less than five months until the first Democratic caucuses, the prospect of Mr. Gore joining the race has faded even here. “Gore has some interest, but it’s not accurate to say people are waiting,” Mr. Roos said.

Lawrence E. Stone, the Santa Clara county assessor and a major fund-raiser for Mrs. Clinton’s campaign in Silicon Valley, said that, early on, many Valley Democrats had held off endorsing any of the candidates but that the wait-and-see sentiment was gone. Today, he said, the Gore factor is more often an excuse not to open the wallet.

“The most popular candidate is always a potential one — the one that’s not running,” Mr. Stone said. But that does not mean people in the Valley are not contributing. “I raised the same amount in one Silicon Valley event for Senator Clinton that I did in an entire campaign for her husband in 1992,” Mr. Stone said. “These days, if you’re not raising $200,000 for a candidate, you’re not a major player.”

John W. Thompson, chief executive of Symantec, held a fund-raiser recently for Mr. Obama at his secluded house in Woodside, Calif. In March, Charles E. Phillips Jr., Oracle’s president, was one host of a similar fund-raiser for Mrs. Clinton.

Mr. Roos, the Obama supporter, says that getting executives to part with $2,300, the maximum contribution, for a total of $4,600 for the primary and general elections, has been easier than ever, as he proved by inviting 125 friends and colleagues to his Bay Area house. “That’s without the candidate even being there,” Mr. Roos said. “We plugged him in by telephone and raised $300,000.”

Other luminaries of the tech industry, like Michael S. Dell, the founder and chief executive of Dell, had not placed their bets as of the end of June, the latest reporting period. Steven P. Jobs, Apple’s chief executive, had not donated to any candidates so far in this cycle, though in 2004 he donated the maximum to Senator John Kerry, another Democrat. Mr. Jobs’s wife, Laurene Powell, has spread her risk, donating $4,600 each to Mr. Obama and Mr. Edwards and $400 to Mrs. Clinton.

A contribution from Eric E. Schmidt, the chief executive of Google and a close associate of Mr. Gore, is also conspicuously missing, as are contributions from Google’s co-founders, the billionaires Larry Page and Sergey Brin.

L. John Doerr, the billionaire venture capitalist and a longtime Democratic heavyweight, has donated $2,100 to Senator Christopher J. Dodd, Democrat of Connecticut. Mr. Doerr’s wife, Anne, has also given the senator $2,100.

Though they are outnumbered, Valley Republicans are beginning to open their wallets too.

E. Floyd Kvamme, the retired venture capitalist of Kleiner Perkins Caufield & Byers, has contributed to Rudolph W. Giuliani, the Republican former New York mayor. Meg Whitman, the chief executive of eBay, has donated $2,300 to Mr. Romney, a former venture capitalist who was her colleague at Bain & Company in the 1980s. John T. Chambers, Cisco’s chief executive and one of the area’s highest-profile Republicans, has given $2,300 to the campaign of Senator McCain, Republican of Arizona.

Silicon Valley’s Democratic fund-raisers are now agonizing over the guest list to the hottest party of the primary fund-raising season — and this one is not at the Googleplex. It is a $2,300-a-plate gala at the home of Oprah Winfrey, an Obama supporter, on Sept. 8. (The house, in Santa Barbara, is conveniently between two California money centers, Silicon Valley and Hollywood.)

The problem? There will be 1,400 seats, and each of Mr. Obama’s 200 national co-chairmen is allotted seven tickets. The smart thing to do, from a money-raising perspective, is to hand them out to people who have yet to make a contribution, even though that might snub longtime supporters who have already reached the contribution limit.

Point, Click ... Eavesdrop: How the FBI Wiretap Net Operates
Ryan Singel

The FBI has quietly built a sophisticated, point-and-click surveillance system that performs instant wiretaps on almost any communications device, according to nearly a thousand pages of restricted documents newly released under the Freedom of Information Act.

The surveillance system, called DCSNet, for Digital Collection System Network, connects FBI wiretapping rooms to switches controlled by traditional land-line operators, internet-telephony providers and cellular companies. It is far more intricately woven into the nation's telecom infrastructure than observers suspected.

It's a "comprehensive wiretap system that intercepts wire-line phones, cellular phones, SMS and push-to-talk systems," says Steven Bellovin, a Columbia University computer science professor and longtime surveillance expert.

DCSNet is a suite of software that collects, sifts and stores phone numbers, phone calls and text messages. The system directly connects FBI wiretapping outposts around the country to a far-reaching private communications network.

Many of the details of the system and its full capabilities were redacted from the documents acquired by the Electronic Frontier Foundation, but they show that DCSNet includes at least three collection components, each running on Windows-based computers.
The $10 million DCS-3000 client, also known as Red Hook, handles pen-registers and trap-and-traces, a type of surveillance that collects signaling information -- primarily the numbers dialed from a telephone -- but no communications content. (Pen registers record outgoing calls; trap-and-traces record incoming calls.)

DCS-6000, known as Digital Storm, captures and collects the content of phone calls and text messages for full wiretap orders.

A third, classified system, called DCS-5000, is used for wiretaps targeting spies or terrorists.

What DCSNet Can Do

Together, the surveillance systems let FBI agents play back recordings even as they are being captured (like TiVo), create master wiretap files, send digital recordings to translators, track the rough location of targets in real time using cell-tower information, and even stream intercepts outward to mobile surveillance vans.

FBI wiretapping rooms in field offices and undercover locations around the country are connected through a private, encrypted backbone that is separated from the internet. Sprint runs it on the government's behalf.

The network allows an FBI agent in New York, for example, to remotely set up a wiretap on a cell phone based in Sacramento, California, and immediately learn the phone's location, then begin receiving conversations, text messages and voicemail pass codes in New York. With a few keystrokes, the agent can route the recordings to language specialists for translation.

The numbers dialed are automatically sent to FBI analysts trained to interpret phone-call patterns, and are transferred nightly, by external storage devices, to the bureau's Telephone Application Database, where they're subjected to a type of data mining called link analysis.

FBI endpoints on DCSNet have swelled over the years, from 20 "central monitoring plants" at the program's inception, to 57 in 2005, according to undated pages in the released documents. By 2002, those endpoints connected to more than 350 switches.

Today, most carriers maintain their own central hub, called a "mediation switch," that's networked to all the individual switches owned by that carrier, according to the FBI. The FBI's DCS software links to those mediation switches over the internet, likely using an encrypted VPN. Some carriers run the mediation switch themselves, while others pay companies like VeriSign to handle the whole wiretapping process for them.

The numerical scope of DCSNet surveillance is still guarded. But we do know that as telecoms have become more wiretap-friendly, the number of criminal wiretaps alone has climbed from 1,150 in 1996 to 1,839 in 2006. That's a 60 percent jump. And in 2005, 92 percent of those criminal wiretaps targeted cell phones, according to a report published last year.

These figures include both state and federal wiretaps, and do not include antiterrorism wiretaps, which dramatically expanded after 9/11. They also don't count the DCS-3000's collection of incoming and outgoing phone numbers dialed. Far more common than full-blown wiretaps, this level of surveillance requires only that investigators certify that the phone numbers are relevant to an investigation.

The Justice Department reports the number of pen registers to Congress annually, but those numbers aren't public. According to the last figures leaked to the Electronic Privacy Information Center, judges signed 4,886 pen register orders in 1998, along with 4,621 time extensions.

CALEA Switches Rules on Switches

The law that makes the FBI's surveillance network possible had its genesis in the Clinton administration. In the 1990s, the Justice Department began complaining to Congress that digital technology, cellular phones and features like call forwarding would make it difficult for investigators to continue to conduct wiretaps. Congress responded by passing the Communications Assistance for Law Enforcement Act, or CALEA, in 1994, mandating backdoors in U.S. telephone switches.

CALEA requires telecommunications companies to install only telephone-switching equipment that meets detailed wiretapping standards. Prior to CALEA, the FBI would get a court order for a wiretap and present it to a phone company, which would then create a physical tap of the phone system.

With new CALEA-compliant digital switches, the FBI now logs directly into the telecom's network. Once a court order has been sent to a carrier and the carrier turns on the wiretap, the communications data on a surveillance target streams into the FBI's computers in real time.

The Electronic Frontier Foundation requested documents on the system under the Freedom of Information Act, and successfully sued the Justice Department in October 2006.

In May, a federal judge ordered the FBI to provide relevant documents to the EFF every month until it has satisfied the FOIA request.

"So little has been known up until now about how DCS works," says EFF attorney Marcia Hofmann. "This is why it's so important for FOIA requesters to file lawsuits for information they really want."

Special Agent Anthony DiClemente, chief of the Data Acquisition and Intercept Section of the FBI's Operational Technology Division, said the DCS was originally intended in 1997 to be a temporary solution, but has grown into a full-featured CALEA-collection software suite.

"CALEA revolutionizes how law enforcement gets intercept information," DiClemente told Wired News. "Before CALEA, it was a rudimentary system that mimicked Ma Bell."

Privacy groups and security experts have protested CALEA design mandates from the start, but that didn't stop federal regulators from recently expanding the law's reach to force broadband internet service providers and some voice-over-internet companies, such as Vonage, to similarly retrofit their networks for government surveillance.

New Technologies

Meanwhile, the FBI's efforts to keep up with the current communications explosion is never-ending, according to DiClemente.

The released documents suggest that the FBI's wiretapping engineers are struggling with peer-to-peer telephony provider Skype, which offers no central location to wiretap, and with innovations like caller-ID spoofing and phone-number portability.

But DCSNet seems to have kept pace with at least some new technologies, such as cell-phone push-to-talk features and most VOIP internet telephony.

"It is fair to say we can do push-to-talk," DiClemente says. "All of the carriers are living up to their responsibilities under CALEA."

Matt Blaze, a security researcher at the University of Pennsylvania who helped assess the FBI's now-retired Carnivore internet-wiretapping application in 2000, was surprised to see that DCSNet seems equipped to handle such modern communications tools. The FBI has been complaining for years that it couldn't tap these services.

The redacted documentation left Blaze with many questions, however. In particular, he said it's unclear what role the carriers have in opening up a tap, and how that process is secured.

"The real question is the switch architecture on cell networks," said Blaze. "What's the carrier side look like?"

Randy Cadenhead, the privacy counsel for Cox Communications, which offers VOIP phone service and internet access, says the FBI has no independent access to his company's switches.

"Nothing ever gets connected or disconnected until I say so, based upon a court order in our hands," Cadenhead says. "We run the interception process off of my desk, and we track them coming in. We give instructions to relevant field people who allow for interconnection and to make verbal connections with technical representatives at the FBI."

The nation's largest cell-phone providers -- whose customers are targeted in the majority of wiretaps -- were less forthcoming. AT&T politely declined to comment, while Sprint, T-Mobile and Verizon simply ignored requests for comment.

Agent DiClemente, however, seconded Cadenhead's description.

"The carriers have complete control. That's consistent with CALEA," DiClemente said. "The carriers have legal teams to read the order, and they have procedures in place to review the court orders, and they also verify the information and that the target is one of their subscribers."


Despite its ease of use, the new technology is proving more expensive than a traditional wiretap. Telecoms charge the government an average of $2,200 for a 30-day CALEA wiretap, while a traditional intercept costs only $250, according to the Justice Department inspector general. A federal wiretap order in 2006 cost taxpayers $67,000 on average, according to the most recent U.S. Court wiretap report.

What's more, under CALEA, the government had to pay to make pre-1995 phone switches wiretap-friendly. The FBI has spent almost $500 million on that effort, but many traditional wire-line switches still aren't compliant.

Processing all the phone calls sucked in by DCSNet is also costly. At the backend of the data collection, the conversations and phone numbers are transferred to the FBI's Electronic Surveillance Data Management System, an Oracle SQL database that's seen a 62 percent growth in wiretap volume over the last three years -- and more than 3,000 percent growth in digital files like e-mail. Through 2007, the FBI has spent $39 million on the system, which indexes and analyzes data for agents, translators and intelligence analysts.

Security Flaws

To security experts, though, the biggest concern over DCSNet isn't the cost: It's the possibility that push-button wiretapping opens new security holes in the telecommunications network.

More than 100 government officials in Greece learned in 2005 that their cell phones had been bugged, after an unknown hacker exploited CALEA-like functionality in wireless-carrier Vodafone's network. The infiltrator used the switches' wiretap-management software to send copies of officials' phone calls and text messages to other phones, while simultaneously hiding the taps from auditing software.

The FBI's DiClemente says DCSNet has never suffered a similar breach, so far as he knows.

"I know of no issue of compromise, internal or external," DiClemente says. He says the system's security is more than adequate, in part because the wiretaps still "require the assistance of a provider." The FBI also uses physical-security measures to control access to DCSNet end points, and has erected firewalls and other measures to render them "sufficiently isolated," according to DiClemente.

But the documents show that an internal 2003 audit uncovered numerous security vulnerabilities in DCSNet -- many of which mirror problems unearthed in the bureau's Carnivore application years earlier.

In particular, the DCS-3000 machines lacked adequate logging, had insufficient password management, were missing antivirus software, allowed unlimited numbers of incorrect passwords without locking the machine, and used shared logins rather than individual accounts.

The system also required that DCS-3000's user accounts have administrative privileges in Windows, which would allow a hacker who got into the machine to gain complete control.

Columbia's Bellovin says the flaws are appalling and show that the FBI fails to appreciate the risk from insiders.

"The underlying problem isn't so much the weaknesses here, as the FBI attitude towards security," he says. The FBI assumes "the threat is from the outside, not the inside," he adds, and it believes that "to the extent that inside threats exist, they can be controlled by process rather than technology."

Bellovin says any wiretap system faces a slew of risks, such as surveillance targets discovering a tap, or an outsider or corrupt insider setting up unauthorized taps. Moreover, the architectural changes to accommodate easy surveillance on phone switches and the internet can introduce new security and privacy holes.

"Any time something is tappable there is a risk," Bellovin says. "I'm not saying, 'Don't do wiretaps,' but when you start designing a system to be wiretappable, you start to create a new vulnerability. A wiretap is, by definition, a vulnerability from the point of the third party. The question is, can you control it?"

FBI: Strip-Or-Get-Bombed Threat Spreads

15 Stores Targeted In 11 States In Past Week, Police Say

A telephone caller making a bomb threat to a Hutchinson, Kan., grocery store kept more than 100 people hostage, demanding they disrobe and that the store wire money to his bank account.

Tuesday's incident may be part of a broader scam targeting other businesses around the country, the FBI said. Similar bomb threats are under investigation at more than 15 stores in at least 11 states -- all in the past week, authorities said.

FBI spokesman Rich Kolko said the threat appears to be related to a plot in recent days focusing on banks and stores in places like Detroit, Phoenix, Salt Lake City, Philadelphia and Newport, R.I.

"At this point, there's enough similarities that we think it's potentially one person or one group," Kolko said.

Police in Kansas safely led the 46 employees and 64 customers, some of whom had taken off their clothes, out of a Dillons grocery store after about 90 minutes.

Employee Marilyn Case told The Hutchinson News that store manager Mike Piros argued with the caller, but they relented when he continued to make threats and instructed them to "do it now."

Caller Threatens To Cut Fingers Off

He then demanded that one of Piros' fingers be cut off for every hour his demands were not met, and another employee got a butcher knife on his orders, Case said. Jim Peterson, a customer, told the newspaper that people became distraught.

"People came undone and started saying, 'No, no,"' he said.

Piros was not harmed. Police there initially said they were investigating whether the caller had hacked into the surveillance system, but later backed away from that possibility.

Authorities said the caller appeared to have visual access to the store, although officials were investigating whether the caller was out of state and may have hacked into the store's security system.

"If they can access the Internet, they can get to anything," Hutchinson Police Chief Dick Heitschmidt said. "Anyone in the whole world could have access, if that's what really happened."

On Wednesday, two other stores in Hutchinson also received bomb threats, said police Lt. Steven Nelson.

In Arizona, a bomb threat led to the evacuation of a Prescott Safeway on Tuesday.

A caller with an accent demanded $2,850, according to police and city spokesman Kim Kapin.

"The maximum that Western Union can send through its service is $3,000," Kapin said. Wiring money also includes a $150 service charge, Kapin added. "This individual was obviously aware of that."

Initially, the caller led employees to believe he was observing them.

"After a while, it sounded like he was just taking a shot in the dark at what they might be doing, or what they looked like or how they were reacting to his call," Prescott police Lt. Ken Morley said.

Sherry Johnson, a spokeswoman for Englewood, Colo.-based Western Union, said the company was working with the FBI and U.S. Secret Service to trace the money sent through the service.

It was also telling its agents to be on the lookout for the extortion plot.

"This is an ongoing law enforcement investigation," Johnson said.

A bomb threat at a supermarket in Millinocket, Maine, on Wednesday was tied to the scam. Authorities there said a caller threatened to detonate a bomb inside the store unless money was wired to a bank account. Click here to read about the incident.

An unidentified man called a Newport Wal-Mart on Tuesday morning, saying he had a bomb and would harm employees. He also demanded that workers transfer $10,000 to an account, said Newport Police Sgt. James Quinn. The store wired the money, Quinn said.

FBI Looks For Overseas Connection

The FBI was looking into whether the calls to the banks and stores were being placed from overseas and was compiling reports from local police departments to probe for similarities between the cases, Kolko said Wednesday.

"At this point, there's enough similarities that we think it's potentially one person or one group," Kolko said from Washington.

Police in Virginia said a similar threat was made at a store there on Tuesday. In that case, no money was sent and no bomb was found.

In Newport, the caller placed three separate calls to the store, Quinn said. An employee reported the bomb threat to police at 6:52 a.m., minutes before the store's scheduled opening.

Roughly 25 employees who were inside at the time were evacuated as a police SWAT team spent hours sweeping the building and bomb-sniffing dogs searched around cars in the parking lot. Neither the suspect nor any explosive device was found in the store, and no one was injured.

Quinn said police have identified the account where the money was wired, but he would not say where it was held. He said the caller used a land line from out of state, but would not say from where. No arrests have been made.

A similar call was made to a bank inside a Wal-Mart store in western Virginia late Tuesday morning, police said. An employee at a bank branch inside a Wal-Mart store in Salem was told that a bomb would explode unless an undisclosed amount of money was sent via Western Union. The store was evacuated and later reopened after no bombs were found, police said.

Another bomb threat was called in a few minutes later to a bank inside a store in Virginia's Pulaski County. That store was also evacuated and no bombs were found.

No arrests have been made in either of the Virginia incidents.

The store in Newport does not have a bank branch inside, but offers a money transfer service similar to Western Union, police said.

College Campuses Get Bomb Threats

Separately, the FBI is looking into bomb threats on college campuses, including three in Ohio -- the University of Akron, Kenyon College and a community college in Lorain County, Ohio.

No explosive devices have been found. Law enforcement officials said there was no evidence at this time linking the college bomb threats with those at grocery and discount stores.

Kenyon, in Gambier in central Ohio, received six separate bomb threats in a general admissions e-mail account between 6 a.m. and 9 a.m. Wednesday, college spokesman Shawn Presley said.

Local and federal authorities determined the threats to be a hoax and the school was not evacuated as officials swept buildings searching for the bomb, he said.

The University of Akron closed classrooms, labs and offices in its Auburn Science and Engineering building on Wednesday, after a secretary in a dean's office received an anonymous e-mail that included a bomb threat.

New York Taxi Drivers Split Over GPS Technology, Possible Strike

One group says GPS technology infringes on the privacy of drivers and has called for a strike in early September, while another group says GPS produces bigger tips and opposes a strike.
K.C. Jones

New York City taxi drivers are split on whether they should strike in opposition to a new GPS requirement.

One taxi group plans to strike from 5 a.m., Sept. 5, through 5 a.m., Sept. 7, in opposition to New York City's requirement that all cabs be equipped with GPS technology beginning Oct. 1. The New York Taxi Workers Alliance, which claims more than 8,400 members, announced the strike dates this week, saying GPS infringes on drivers' privacy.

The New York State Federation of Taxi Drivers and other groups representing about 10,000 cab drivers oppose the strike.

The Taxi and Limousine Commission passed a rule stating that all New York City cabs must have touch-screen display panels, credit card readers, and GPS beginning this year. Many taxis already are equipped with the technologies, which allow passengers to get news, route data, and other information.

The TLC claims that the technology will not be used to invade drivers' privacy but will provide real-time maps and help passengers recover lost property. The TLC said it would use electronic trip reports to assess the needs of the industry, which it does now with paper trip sheets. New York City's contracts prohibit vendors from sharing information regarding off-duty locations of taxicabs with the TLC. The technology is also designed to notify drivers of emergencies. Passengers can turn the monitors off after mandatory safety information has been displayed.

The TLC says all cabs should accept credit cards because people generally tip more when paying with credit cards and pedestrians are more likely to hail cabs if they can pay with plastic. Tests showed that the credit card processing times are normally less than eight seconds.

"These systems were designed with taxi rider and taxi driver input to enrich the passenger experience, something the industry promised three years ago when it accepted a 26% fare increase," TLC Chairman Matthew Daus said in a statement. "While most of the industry is honoring that promise -- 73% have already chosen a system before the due date -- I am puzzled that this group is not telling its members that drivers with the systems are making significantly more money in tips!"

New York State Federation of Taxi Drivers Spokesman Fernando Mateo agrees, and said that service will not be interrupted. "Our member drivers that have installed GPS get better tips, drive longer rides, and get places more efficiently," he said in a statement. "It is unfortunate that some believe that providing better service to the public is a disadvantage, and we do not agree."

Joseph Sanscrainte, an expert in consumer protection and privacy issues and an associate in the New York office of Bryan Cave, doesn't think the GPS requirement is a privacy violation.

"Consent to the GPS system is implied by the fact that medallion owners have consented to partake in the highly regulated NYC taxi industry," Sanscrainte said in a statement. "The fact that the industry is so highly regulated means that the medallion owners have a reduced expectation of privacy."

State Senate Blocks Mandatory ID Implants in Employees

The bill would prevent employers in the state from requiring workers to have the devices.
Patrick McGreevy

Tackling a dilemma right out of a science fiction novel, the state Senate passed legislation Thursday that would bar employers from requiring workers to have identification devices implanted under their skin.

State Sen. Joe Simitian (D-Palo Alto) proposed the measure after at least one company began marketing radio frequency identification devices for use in humans.

The devices, as small as a grain of rice, can be used by employers to identify workers. A scanner passing over a body part implanted with one can instantly identify the person.

"RFID is a minor miracle, with all sorts of good uses," Simitian said. "But we shouldn't condone forced 'tagging' of humans. It's the ultimate invasion of privacy."

Simitian said he fears that the devices could be compromised by persons with unauthorized scanners, facilitating identity theft and improper tracking and surveillance.

The bill has been approved by the state Assembly and now goes to the governor.

Nine senators opposed the measure, including Bob Margett (R-Arcadia), who said it is premature to legislate technology that has not yet proved to be a problem. "It sounded like it was a solution looking for a problem," Margett said. "It didn't seem like it was necessary."

One company, VeriChip, has been licensed by the Food and Drug Administration to sell implanted identification devices, and about 2,000 people have had them implanted, Simitian said. A representative of the firm did not return calls seeking comment Thursday.

CityWatcher.com, a Cincinnati video surveillance company, has required employees who work in its secure data center to have a microchip implanted in an arm.

Similar technology has been used for years to help identify lost pets.

Meanwhile, the Assembly approved a bill that would allow Los Angeles County Sheriff Lee Baca and other law enforcement officials to put thousands of inmates on detention in their homes, with electronic monitoring equipment attached to their ankles.

Baca sought the legislation to help relieve overcrowding in L.A. County jails and said he would assign about 2,000 inmates with low-level offenses to involuntary home detention if the governor signs the bill. Currently, inmates must volunteer for home detention. The Senate has passed the bill.

Taiwan's Acer Agrees to Acquire Gateway for About $710 Million
Jason Dean

Taiwan's Acer Inc. said it had reached an agreement to acquire Gateway Inc. in a deal that values the U.S. company at about $710 million and pushes Acer past Lenovo Group Ltd. as the world's No. 3 vendor of personal computers.

In a joint statement, the two companies said Acer would make a cash offer for all outstanding shares of Irvine, Calif.-based Gateway for $1.90 a share, a steep premium to their closing price of $1.21 Friday. The deal has been unanimously by approved the boards of both companies and is expected to close by December, the statement said.

Acer's acquisition of Gateway highlights the rapid rise of what is becoming one of Asia's best-known brands. It also gives Acer a significant new foothold in the American market, making it a more formidable competitor to industry leaders Hewlett-Packard Co. and Dell Inc. on their home turf.

Gateway, while not among the world's top five PC vendors, ranked third in the U.S. in unit shipments in the second quarter of this year, with about 5.6% of the market, according to preliminary estimates by market research firm IDC. Dell and H-P had a combined 52% of the U.S. market in the same period.

The newly combined company will have total revenue of more than $15 billion, and shipments of more than 20 million PCs a year, the statement said. Acer indicated in the statement that it would continue to use the Gateway brand, saying the combined entity would be a "multi-branded PC-company." The acquisition of Gateway "and its strong brand" will strengthen Acer's U.S. presence and "completes Acer's global footprint," the statement quoted Acer Chairman J.T. Wang as saying.

"We believe our complementary geographical and product mixes, and our mutual focus on the consumer market makes Acer an outstanding partner for Gateway," the statement quoted Ed Coleman, Gateway's chief executive as saying. "Acer has made impressive strides in the global PC market and the board and I welcome this merger."

Acer and Gateway said they expect the deal to result in significant cost savings, saying that "pre-tax synergies," which the statement didn't define, are expected to be at least $150 million.

Apple Now Sells More than One in Six Laptops in U.S.

Coming next: A top-to-bottom iPod refresh, says analyst
Gregg Keizer

Apple Inc.'s share of the laptop market is growing -- the company now sells more than one in every six laptops purchased in the U.S., a research firm said today.

"Apple's definitely up," said Stephen Baker, an analyst at Port Washington, N.Y.-based NPD Group Inc. "Their sales are continuing to grow faster than the rest of the marketplace."

NPD, which collects its data primarily from retail sources and excludes most online and all direct sales, said Apple's MacBook and MacBook Pro laptops accounted for 17.6% of June's unit sales, an uptick of more than three percentage points from May's 14.3%.

Baker attributed the jump in market share to refreshes that both laptop lines recently received. The lower-priced MacBook was updated in mid-May with faster processors and more memory, while 15-in. models of the high-end MacBook Pro were outfitted with new backlit LED screens in early June.

The market share increase pushed Apple past Gateway Inc. into third place on NPD's list of laptop sales leaders, behind Hewlett-Packard Co. and Toshiba Corp. Research firm IDC also has Apple in the third spot; data it released last month put Apple's share of U.S. sales at 5.6%, far behind leaders HP (28.4%) and Dell (23.6%) but tied with Gateway.

Back-to-school sales during this month and next, Baker said, should be strong for Apple, but his forecast is that the company's share will remain stable through the quarter. "I don't expect it to improve any from the June numbers," said Baker.

The next move by Apple, said Baker, will likely not be in its computer business -- it refreshed the iMac family earlier this month -- but on the iPod side. "I'll stay firmly in the path of conventional wisdom and say that it's iPods next," Baker said. "They haven't been refreshed in almost a year."

Although bloggers and Apple-centric Web sites have been touting rumors of iPod announcements coming as soon as next Tuesday, Baker didn't have any inside information on possible release dates or even details. However, he did have some predictions.

"Apple will up the capacity of the Shuffle," he said. The diminutive player, which sells for $79, currently maxes out at 1GB.

"And Apple has to decide where they want to go with the Nano. It's a music player now, so the question is what can they do if they want to keep it in that form factor?" Some reports have surfaced with photos showing a shorter, wider Nano, with a screen better suited to video. At least one such posting has pulled the photos at Apple's request, fueling speculation that the images were legitimate.

"I think we'll also see a whole revamp of the iPod video line," added Baker, citing talk of an iPod with the same size and shape -- including screen size -- as the iPhone as one possibility.
http://www.computerworld.com/action/...tsrc =hm_list

Still burning for you

Georgia Man's Dell Laptop Bursts into Flames

Latest in a series of laptop fires
Truman Lewis

A computer network administrator at a Columbus, Georgia, hospital is the latest consumer to encounter the flaming laptop syndrome.

Douglas Brown said his Dell 9200 wide-screen laptop's batteries exploded into flames, it "looked like fireworks which would have been cool had it not been in my house."

Brown called 911 and the fire department responded with two pumpers, a ladder truck, the HAZMAT unit, an ambulance and the battalion chief.

"Way too much manpower for one little laptop," he said, but "I guess it sounded like it was more then it really was" to the 911 dispatcher.

It's the latest in a series of fires and meltdowns involving the lithium-ion batteries used in laptops, cell phones and other electronic devices.

Last year, a man in South Venice, Fla. blamed his Dell laptop for burning down his house. Earlier this year, a Macbook was blamed for a house fire in Australia.

In one of the most celebrated cases, a Dell laptop was blamed for setting fire to a pickup truck parked in a remote mountainous area in Nevada last August. The fire not only destroyed the truck but set off a box of ammunition its outdoorsman owner had left in the glove compartment while he went fishing.

Dell and other computer makers have recalled millions of batteries. It could not immediately be determined whether Brown's laptop was among the recalled units.

Brown said he called Dell and spoke with a representative named Cory who was "very nice and professional" but who then transferred him to someone who was not.

Brown said he asked the next service rep "who was going to pay for the damages to my house and the HAZMAT bill and (she) asked me if I had insurance.

"I would have thought Dell would have had a better answer then that," Brown said. "After all the fire was caused by their computer."

Brown said the laptop is now sitting the middle of his driveway.

Storm Hits Blogger

The ubiquitous Storm Trojan has found a new home – on spam blog sites in Google's Blogger network
Kelly Jackson Higgins

Careful whose blog you're reading these days: Researchers have discovered the Storm Trojan nestled in hundreds of blog sites in Google's Blogger network.

This Storm infection is not simple comment spam, where spammers post their junk messages and malware as blog comments. "These are blogs that post spam," says Alex Eckelberry, CEO of Sunbelt Software, who has been studying the posts. He says he hasn't seen any legitimate blogs bites being hacked and sprinkled with Storm, but he's still researching the trend.

Eckelberry, who first discovered Storm executable files on several blogger sites this week, says Storm is showing up on blogs that use the mail-2-blogger feature, where bloggers can post via email. Google does have a CAPTCHA defense in place to prevent this kind of infection, requiring some bloggers to manually enter their code in order to post their blogs.

"But these guys are somehow flying under the radar," Eckelberry says. "I have no idea how they are doing this."

One site he found that's laden with Storm as well as spam junk is http://www.visionbuzz.blogspot.com/, for instance. And a Google search for Storm's infamous keywords, including "dude what if you wife finds this" and "man your insane," comes up with hundreds of blog sites, he says.

Storm is often referred to as a worm, but it's technically a Trojan. It relies on social engineering, with a tempting message and link, and it's all about expanding spam and the underlying botnet behind it, notes Joe Stewart, senior security researcher for SecureWorks. Although it's less dangerous than a traditional worm, it ranks in the top five most prolific threats, he says.

"You're not in danger of identity theft -- it's really not all that dangerous to the person who's been infected... It's really more dangerous to the Internet architecture as a whole," he says.

The Trojan gives Storm's bot army the ability to launch powerful distributed denial of services attacks, Stewart says. "But that's not its only purpose. It's also to make money, [such as from] stock spam."

"It's very disturbing to have Storm executables being linked onto sites we can control. But blog sites that Storm is operating off of are hard to control," Eckelberry says. "We've been working with Google in getting this shut down, and Google has been very helpful."

Why are the bad guys starting to plant Storm executables in blogs? "It's all about the numbers," says Randy Abrams, director of technical education for Eset, an anti-malware vendor. "The more places you can get the links out to, the more uneducated users you will trick into clicking on them and then infecting themselves. This, in turn, expands the botnet, which increases the profitability of [the exploit]."

Google Begins Hosting News on Its Site
Michael Liedtke

Internet search leader Google Inc. on Friday began hosting material produced by The Associated Press and three other news services on its own Web site instead of only sending readers to other destinations.

The change affects hundreds of stories and photographs distributed each day by the AP, Agence France-Presse, The Press Association in the United Kingdom and The Canadian Press. It could diminish Internet traffic to other media sites where those stories and photos are also found - a development that could reduce the online advertising revenue of newspapers and broadcasters.

Google negotiated licensing deals with the AP and French news agency during the past two years after the services raised concerns about whether the search engine had been infringing on their copyrights. The Mountain View-based company also reached licensing agreements with The Press Association and The Canadian Press during the same period.

Financial terms of those deals haven't been disclosed.

The new approach doesn't change the look of Google News or affect the way the section treats material produced by other media.

Although Google already had bought the right to display content produced by all four news services, the search engine's news section had continued to link to other Web sites to read the stories and look at the photographs.

That helped drive more online traffic to newspapers and broadcasters who pay annual fees to help finance the AP, a 161-year-old cooperative owned by news organizations.

Now, Google visitors interested in reading an AP story will remain on Google's Web site unless they click on a link that enables them to read the same story elsewhere. Google doesn't have any immediate plans to run ads alongside the news hosted on its site.

Although the change might not even be noticed by many Google users, the decision to corral the content from the AP and other news services may irritate publishers and broadcasters if the move results in less traffic for them and more for Internet's most powerful company.

A diminished audience would likely translate into less online revenue, compounding the financial headaches of long-established media already scrambling to make up for the money that has been lost as more advertisers shift their spending to the Internet.

Google has been the trend's biggest beneficiary because it runs the Internet's largest advertising network. In the first half of this year, the 9-year-old company earned $1.9 billion on revenue of $7.5 billion.

Despite Google's dominance in search, its news section lags behind several other rivals. In July, Google News attracted 9.6 million visitors compared with Yahoo News' industry-leading audience of 33.8 million, according to comScore Media Metrix.

Yahoo Inc., along with other major Web sites such as Microsoft Corp.'s MSN and Time Warner Inc.'s AOL, have been featuring AP material for years.

Under its new approach, Google reasons readers won't have to pore through search results listing the same story posted on different sites. That should in turn make it easier to discover other news stories at other Web sites that might previously have been buried, said Josh Cohen, the business product manager for Google News.

"This may result in certain publishers losing traffic for their news wire stories, but it will allow more room for their original content," Cohen said.

Vlae Kershner, news director for the San Francisco Chronicle's Web site, backed up that theory, saying Google News mostly refers readers interested in the newspaper's staff-written stories. "This is going to have a very minimal impact on our traffic," he said.

Referrals from Google News accounted for 2.2 percent of the traffic at newspaper Web sites during the week ending Aug. 25, according to the research firm Hitwise.

Caroline Little, chief executive and publisher of Washingtonpost.Newsweek Interactive, said she worries about anything that might erode her site's advertising revenue. "That's how we make money," she said. "We will be watching this carefully."

For its part, the AP intends to work with Google to ensure readers find their way to breaking news stories on its members' Web sites, said Jane Seagrave, the AP's vice president of new media markets.

In recognition of the challenges facing the media, the AP froze its basic rates for member newspapers and broadcasters this year and already has committed to keeping fees at the same level next year.

That concession has intensified the pressure on AP to plumb new revenue channels by selling its content to so-called "commercial" customers on the Web. Those efforts helped the not-for-profit AP boost its revenue by 4 percent last year to $680 million.

"AP relies on its commercial agreements to help pay the enormous costs of covering breaking news around the world, ranging from deadly hurricanes and tsunamis to conflicts like the war in Iraq," Seagrave said.

Google's Secret Society
Andy Greenberg

Who's the Google of social networking sites? The obvious answer may seem to be Facebook, given its rapid growth, successful cooperation with application developers, and ever-smarter ad targeting. But by some measures, the real answer is even more obvious: Google itself.

This week, Google (nasdaq: GOOG - news - people ) is drawing attention to its often-ignored social networking site, Orkut.com, with a redesign intended to prettify the site's Spartan look. And attention is deserved: Despite its low profile in the U.S., Orkut now draws 38.2 billion page views a month worldwide, 7.8 billion more than Facebook, according to comScore Media Metrix.

In Brazil, where Facebook and MySpace are virtually unknown, Orkut has become a smash hit, with 15.6 billion page views monthly, by the count of Nielsen/Net Ratings. That kind of popularity doesn't just dwarf Facebook's Brazilian traffic, which is practically nil; it's also nearly 10 billion more monthly page views than Facebook draws from Americans.

Orkut's success in Brazil seems largely to be a fluke. The site hasn't made any special appeal to Brazilians, and only began to offer a Portuguese-language option in April of 2005, long after it had become the social network of choice in Brazil. One blogger argues that its name, which was taken from Turkish-born Google engineer Orkut Buyukkokten, is catchy in Portuguese and reminds Brazilians of a popular yogurt drink for kids.

But a bigger question than the cause of Orkut's popularity is the site's potential for profit. Facebook will earn more than $100 million this year, according to one of the site's investors, Jim Breyer of Accel Partners. And with the right advertisers, Orkut's Brazilians and other foreign users could also be a significant source of revenue, argues Greg Sterling, a consultant with Sterling Market Research. "If you've got the ad coverage, an international user is as valuable as anyone," he says.

In fact, Google's foreign advertising coverage has been spreading. The company's revenues from sources outside the U.S. and Britain, earned almost entirely from selling targeted ads, amounted to $1.24 billion last quarter, nearly twice the number from just a year ago. That brings the percentage of Google's foreign revenue to 60.8%, up from 46.7% last year.

While that spending might make Orkut an unlikely "heavy-weight" of social networking, as blogger Michael Arrington recently wrote, the site will need to gain a much larger U.S. audience to compete long-term with networks like MySpace and Facebook. MySpace still leads the social networking market by a large margin, and Facebook tripled its audience in the last year, according to comScore, while Orkut grew only 64%.

But Google, which won't disclose Orkut's revenue numbers, has recently been putting more of its massive resources behind the site. On top of this week's redesign, the company last year sponsored a social networking project at Carnegie Mellon to develop a tool meant to improve Orkut's domestic popularity. The result was Socialstream, a prototype for a site that allows users to post text and multimedia content to a single page, then syndicate that content to any social network where they have a profile.

Combined with Orkut, Socialstream might be just the sort of Googlish innovation that breaks down the "walled-garden" approach to social networking favored by Facebook and MySpace and brings American eyeballs to Orkut. If Google could provide Orkut with a competitive advantage, it could easily build a community from the audience that uses its services like Gmail, Google Docs and Spreadsheets, Google Maps, Google Calendar and its photo-sharing site, Picasa, says Sterling.

"Until now, Orkut has been an also-ran in the U.S. because it's been neglected by Google," Sterling says. "But with just a few tweaks and redesigns, and in combination with all of Google's services, it has the potential to really differentiate itself from MySpace and Facebook."

Survey: More Women Blogging than Men as Blogs Hit Mainstream
John Pospisil

The blogosphere has hit the mainstream, according to a new survey, which reveals that 80% of Americans know what a blog is, 50% regularly visit blogs, and 8% publish their own blog.

The survey also revealed that more women than men are bloggers, with 20% of American women who have visited blogs having their own versus 14 % of men.

The Synovate/Marketing Daily survey was conducted online with 1,000 adults in the US using Synovate eNation from July 30 to August 1.

"Because anyone can start one anytime, blogs are not necessarily seen as legitimate information sources despite the fact that some bloggers are experts in their area," said Tom Mularz, senior vice president at Synovate.

"However, as their prominence andinfluence continues to rise, this could certainly change."

When asked about the types of information they get from blogs, 65% said they get opinions, while 39% get news and 38% get entertainment. About one in three people read gossip on blog websites while only 2% use blogs to catch upon news about family and friends.

Loyalty to specific blogs is also fairly strong with 46% of blog readers saying that they visit the same blogs regularly versus 54% who instead usually surf for new and different ones.

Awareness blogs strongly correlates to age, with younger people being much more active.

Nearly 90% of those aged 25 to 34 know what a blog is, compared to just 65% of those aged 65 and over. Similarly, 78% of those aged 18 to 24 who are aware of blogs say they have visited a blog, compared to only 45% of older Americans.

As blogs have gained in popularity, so has the frequency with which they're read.

Though the majority of blog readers (39%) view them less than once a month, another 28% visit them monthly, 15% visit them daily and 5% read them several times a day.

Of course, while blog usage continues to grow, so does their attractiveness as a potential marketing tool. In fact, 43% of blog visitors indicated that they had noticed advertisements on blog websites, rising to 61% among those aged 18 to 24.

Almost one-third of consumers have clicked on an ad while reading a blog. But even though consumers are spending more time with blogs, they aren't necessarily replacing other media. Only 13% of blog readers say they spend less time with other forms of media (newspapers, television, radio) since they've started following blogs.

The main reason people read blogs? Almost half of those surveyed say it's because they find blogs entertaining, and another 26% read them to learn about specific hobbies or other areas they're interested in. Only 15% of blog readers say they do so for news, indicating that the more traditional forms of news consumption still have a stronghold.

Among those who said they have never read a blog, the main reason cited was that they're "just not interested". Another 15% said that they don't are about the opinions and ideas typically expressed in blogs.

From April

Women Bloggers Whine About Comment Woes
Triston McIntyre

Negative comments, hurtful words and even threats are the daily routine for those in the blogging community; most writers might say they would rather receive negative feedback than not receive any feedback at all. However, women bloggers have raised their voices in protest of threatening or vulgar comments they receive to their writing and want codes of conduct initiated to protect themselves.

The Washington Times has reported that many women bloggers are intimidated by violently or sexually explicit comments left in response to their writing. Joan Walsh, a female editor-in-chief of the publication Salon, said, ""it's been hard to ignore that the criticisms of women writers are much more brutal and vicious than those about men."

Many feel the disturbing comments are made simply because their owners can maintain anonymity; even today blogs do not require users to login or register with the site.

One particular author, Kathy Sierra, who once ran a Top 100 blog by Technorati's criteria said, "I have cancelled all speaking engagements…I am afraid to leave my yard…I will never feel the same…I will never be the same."

Sierra wrote this in response to comments that indicated certain users wanted to perform sexual acts on her and then kill her in an explicitly violent manner.

As it stands, there are many women in academia and writing that feel intimidated by threatening comments and violent feedback. A group known as BlogHer has offered support for women who are feeling threatened by the malicious internet community.

That being said, allow me to say this: women are not the only people being targeted by violent comments or otherwise, and the problem was never largely addressed before it became a "female" issue.

If, perhaps, women were the only users being targeted, it might be justified to "sexify" the issue. However, the media is directly responsible for making this a sex-related issue, when in fact innapropriate comments infest the blogging world for both men and women.

Furthermore, not all women feel that the negative comments need be taken seriously. Michelle Malkin, a culture and politics blogger, says she has received plenty of comments regarding,"torture, rape, murder" of her and her loved ones. She said, "Keep blogging. Don't cut and run."

If female writers want to be effective against the onslaught of offensive comments, the number one way to do so isn't to make it a public issue. Have you ever let on to a small child that something they do bothers you? I can guarantee you, they will perform that act all the more because they know it will irritate you.

If women are to be considered equals to men in every regard (as they should), they must not isolate themselves as separate from men in the day to day abuse internet writers receive. Most importantly, they cannot stop blogging simply due to threats they feel they are receiving due to their sex.

This is not to say I don't feel that innapropriate comments and their owners need to be dealt with; they do. However, by sexually isolating women in this issue, the focus is taken away from the larger problem of moderating baseless commentary and is placed on gender issues. If the blogging community as a whole faces the very real problem of threatening or violent commentary, it can be dealt with in an effective manner.

Resurgent Facebook Site a Challenge for University
Charles Mandel

Less than a week after Dalhousie University asked Facebook to pull a group titled "Stop dogs and puppies from being murdered at Dalhousie University," the group is back online on the social networking site and with more members than before.

The revival is worrying for universities, school boards, businesses and other institutions dealing with the new medium. Dalhousie's Facebook problem is just the latest for organizations wondering how best to deal with negative comment, threats and worse online.

In recent months, the Toronto District School Board suspended five high school students for "cyber-bullying" collegiate staff on Facebook, while Halifax police have investigated threats students made on Facebook to a teacher here.

"The real story here is the enormous impact and the speed with which these communities are growing,'' says Michael Geist, Canada Research Chair of Internet and E-Commerce Law at the University of Ottawa.

More than three million Canadians belong to Facebook, with nearly 800,000 of those in Toronto. Vancouver has slightly over 400,000 members, Calgary more than 230,000, Montreal around 199,000, Edmonton slightly less at about 195,000 and Regina and Saskatoon respectively with about 30,000 and 40,000.

Dalhousie has first-hand experience on how that rapidly-expanding Facebook community with its constant creation of discussion groups is presenting challenges to institutional reputations.

Since the animal rights group reappeared on Facebook, it's population has surged in just two days from 15,000 to over 21,000 people. Amy Scott, the group's administrator, thanks Facebook online for bringing the group back.

The group alleges Dalhousie is using dogs and cats in scientific research and states: "Kittens have had their brains mangled and eyes sutured shut at Dalhousie."

For its part, the university contends it's only used rodents and insects for more than the last decade and says it is now checking with its legal consul and weighing its options for possible action.

"It's a new kind of challenge because it's a new form of media that everyone is still wrapping their heads around,'' says Charles Crosby, a Dalhousie spokesman. "The whole process has been very eye-opening for us because it shows the dissemination of information is really changing."

Brendan Hodgson, vice-president of digital communications practice at Hill & Knowlton Canada, says institutions have to monitor what's being said about them because accusations do have the potential to damage their reputations.

"In this day and age - and it's a very different landscape than what it was just a few years ago - can you even respond to what may be hundreds of references in blogs or mountains of different Facebook groups?'' Hodgson asks.

In some instances, other people will jump in and defend the institution's reputation, something that's already happening with Dalhousie. Two new Facebook groups countering Scott's group have started up, one of which is called "Stop people from spreading lies about animal cruelty at Dalhousie" and which already has 300 members in three days.

"Let's face it,'' Geist says, "just about everybody who attends Dalhousie from a student level is a member of Facebook, so it's certainly an environment they can't ignore."

Geist says institutions need to not just track what happens on such sites as Facebook, but to become part of the community. "That, at the end of the day, is the best way to ensure their perspective is heard."

YouTube Criticized in Germany over Neo-Nazi Clips

Video-sharing Web site YouTube has met with harsh criticism in Germany for hosting clips that incite racial hatred, according to a news report due to be broadcast on German public TV late on Monday.

The videos hosted on YouTube include clips of a 1940 anti-Semitic propaganda film "Jud Suess" and two music videos of outlawed German far-right rock band Landser, which show footage from World War II depicting Nazi military operations.

Report Mainz, which is due to air the program, said in a statement that Social Democrat (SPD) parliamentarian Dieter Wiefelspuetz said airing the clips on YouTube in Germany was scandalous. Report Mainz quoted him as saying: "Publishing these films amounts to aiding and abetting incitement of the people."

Report Mainz also said that Germany's Central Council of Jews Vice President Salomon Korn was considering pressing charges against Google Germany.

According to the statement from Report Mainz, German youth protection body Jugendschutz.net has complained to Google Germany more than 100 times and asked Google, which bought YouTube last year, to remove the clips.

Some of the material has been on the site for almost a year.

Google Germany was not immediately available for comment.

More than 60 years after the Holocaust, Germany is grappling with a rise in support for Nazi ideas. Neo-Nazi violence in Germany has reached its highest level since reunification in 1990.

(Reporting by Nicola Leske)

German Left Slam e-Mail Spy Plan

LEFT-WING members of the ruling coalition have objected strongly to plans by the German interior ministry to enlist email spy software to monitor terror suspects.
A ministry spokesman confirmed that the proposed plank of new anti-terror legislation vetted the use of "Trojans" which smuggle themselves into a suspect's computer disguised as a harmless email.

It would then feed information back to police servers whenever the computer was connected to the internet.

The plans, which have circulated online and in the press in recent days, have met with sharp criticism both from the GdP police union and Social Democrats (SPD), who are partners in the left-right ruling coalition.

Opponents argue that the plans would violate Germany's Basic Law and its privacy protections, particularly if the Trojan software was hidden in an official email.

"The SPD will never lend a hand to changing the constitution simply to allow online searches," Ralf Stegner, the interior minister of the northern state of Schleswig-Holstein said.

The opposition Left Party said that such measures would destroy Germans' faith in the state.

"No one will trust emails from the authorities because they could be snoop attacks," deputy Jan Korte, a member of the interior affairs committee in the Bundestag lower house of parliament, said.

GdP president Konrad Freiberg suggested passing the broader anti-terror legislation at least initially without the online search programme.

He did not want to hold up key crime-fighting measures because of the controversy over Trojan programmes.

Joerg Ziercke, director of the Federal Crime Office, defended the idea of Trojans in an interview with Stern magazine to be published this week.

He argued that so-called Remote Forensic Software could not be broadly used anyway because it would have to be tailored each time to the computer that had been targetted.

The anti-terror draft law also includes new powers for the federal police to involve itself in cases that poses a national threat even without a specific request from state police.

It would also allow them to launch probes based on suspect profiling if there was a specific threat of attacks and wiretap suspects' phones.

Interior Minister Wolfgang Schaeuble, a member of Chancellor Angela Merkel's conservative party and one of the most experienced members of her cabinet, raised hackles in July when he proposed more draconian measures.

In an interview with the weekly news magazine Der Spiegel, he suggested the indefinite detention and "targeted killing" of terror suspects and a ban on the use of the internet and mobile phones by suspect foreigners living in Germany.

Germany has strict checks on its security forces in part due to the flagrant abuses committed during the Nazi era, and under the communists in what was East Germany.

Patent System's Revamp Hits Wall

Globalization fears stall momentum in Congress; AFL-CIO sends a letter
Greg Hitt

A bipartisan effort in Congress to overhaul the patent system -- a priority for some of the nation's biggest technology companies -- is hitting resistance because of concerns the U.S. might be exposed to greater foreign competition.

Patent overhaul appeared to be on a fast track earlier this summer. But plans for a quick vote got derailed last month after the AFL-CIO entered the debate, warning that innovation -- and union-backed manufacturing jobs -- might be at risk if the changes were adopted. The union has considerable clout in the Democratic Congress and expressed concerns with provisions that would expose patents to expanded challenges and might limit damages for infringement.

"At a time when the Chinese government is constantly being challenged to live up to its intellectual-property obligations, we do not want to take actions that may weaken ours," the AFL-CIO's legislative director, William Samuel, said in the pointed missive that was circulated on Capitol Hill.

The sweeping patent initiative -- backed by a business coalition dominated by technology companies such as Cisco Systems Inc. and Microsoft Corp. -- would indeed shift the balance of power of the U.S. patent system. It would make it a bit harder for holders to protect patents. Advocates of the legislation contend the current system encourages patent litigation and costly judgments against infringers -- and stifles innovation. They say the proposals are designed to bring patent rules in line with the rapidly changing U.S. economy, where inventions often reflect hundreds of potentially patentable ideas.

Mark Chandler, Cisco's general counsel, dismissed concerns that non-U.S. companies might gain some advantage by the bill. He said the proposed changes would strengthen companies at "the heart of innovation in the American economy," better positioning them to compete at home and abroad.

Opponents of the legislation argue that it would make it easier for foreign competitors to legally copy patented methods and products.

The maneuvering dramatizes how fears about global integration are spreading across many issues.

Such concerns have placed in doubt prospects for President Bush's trade agenda, including market-opening deals with Colombia and South Korea. Renewal of the president's authority to negotiate deals appears even more remote. Democrats in Congress are pushing to shore up programs that help workers who lose their jobs as a result of foreign competition.

The angst about globalization also helped fuel opposition to an immigration-overhaul bill that would have opened a path to citizenship for millions of undocumented workers. It has led Congress to enact rules governing foreign investments in the U.S.

The spillover of those worries into the patent debate "shows the breadth of the concerns about this model of globalization," says Lori Wallach, who heads Public Citizen's Global Trade Watch, an advocacy group critical of the Bush agenda. "It's not just trade agreements any more."

Calls for changes in the patent system have been building for some time and gained traction after Democrats took control of Congress this year. In both the House and the Senate, bipartisan coalitions emerged to take up the issue. And the initiative, with the help of some savvy lobbying by business supporters, appeared on track for passage, despite the partisan-charged political environment on Capitol Hill.

The patent initiative, which has been pushed by the financial-services industry, as well, took an important step forward in July. Both the House and the Senate judiciary committees approved broadly consistent bills.

The White House made clear it was also on board. While raising concerns about some details of the legislation, the Bush administration has offered general support for "the goals" of the initiative.

But the labor-driven pushback gave Democratic leaders pause about rushing action on the legislation before lawmakers left town for the August break. Floor votes in the House and Senate are expected this fall.

From the beginning, the legislation has faced opposition. Pharmaceutical and biotech companies have voiced concern. So have large research universities and many manufacturers, such as Caterpillar Inc. and Dow Chemical Co. They contend that the legislation is too far-reaching and would stifle innovation by weakening the value of patents.

Then came the AFL-CIO. Leaders of the United Steelworkers union and the International Federation of Professional and Technical Engineers, which represents high-tech workers, offered similar concerns. The legislation "could seriously threaten our nation's competitive edge in industries that rely on innovation," Gregory Junemann, president of the engineering group, warned lawmakers in another letter.

At about the same time, criticism with a strong antiglobalization bent began to emerge among rank-and-file lawmakers in both parties. In late July, Reps. Michael Michaud, a Maine Democrat, and Donald Manzullo, an Illinois Republican, circulated a "Dear Colleague" letter noting "foreign competitors" welcomed the legislation. The letter was accompanied by an overseas newspaper story noting that pharmaceutical companies in India saw the legislation as an opening to break patent rights on brand-name drugs and gain an edge in the U.S. market.

"We just couldn't believe it" Rep. Manzullo said. "This is a very serious problem."

Eventually, more than 60 House members joined in an appeal to House leaders in both parties not to rush action. The request echoed of the same language used by the AFL-CIO: "It is especially important that these proposals not undermine our efforts to achieve better intellectual property protection for U.S. companies overseas, particularly in China and India."

Amid the concerns, House leaders backed off of tentative plans to run the measure through the floor before lawmakers left town for the summer.

Rep. Howard Berman, the lead sponsor of the legislation, said it is "hard for me to understand" why the legislation is being seen as hurting the nation's competitiveness. "To the contrary," he says, "it is the weakness and abuses of the current system that are impeding American innovation." The California Democrat predicted the measure will be brought up in September and win approval in the House.

Brain Implants Relieve Alzheimer’s Damage

Toxic plaques cleared away
William J. Cromie

Genetically engineered cells implanted in mice have cleared away toxic plaques associated with Alzheimer’s disease.

The animals were sickened with a human gene that caused them to develop, at an accelerated rate, the disease that robs millions of elderly people of their memories. After receiving the doctored cells, the brain-muddling plaques melted away. If this works in humans, old age could be a much happier time of life.

Alzheimer’s involves a protein called amyloid-beta, which makes up gooey clots or plaques that form in the brain. These toxic clumps, along with accessory tangled fibers, kill brain cells and interfere with memory and thinking. The situation has been compared to a build-up of cholesterol in coronary arteries.

“Delivery of genes that led to production of an enzyme that breaks up amyloid showed robust clearance of plaques in the brains of the mice,” notes Dennis Selkoe, Vincent and Stella Coates Professor of Neurologic Diseases at Harvard Medical School. “These results support and encourage further investigation of gene therapy for treatment of this common and devastating disease in humans.”

The first published report of the experiments, done by Selkoe and other researchers from Harvard-affiliated Brigham and Women’s and McLean hospitals, appeared Aug. 27 on the Web site of the Public Library of Science.

The gene delivery technique employed by the research team has been used in several other trials with animals that model human diseases, including cancers. The procedure involves removing cells from patients, making genetic changes, and then putting back the modified cells, which should treat a disease or disability. The Week in Review is edited and published by Jack Spratts. So far, this approach has produced encouraging results for cancers, blood, muscle, and eye diseases, spinal cord injuries, stroke, Parkinson’s and Huntington diseases, and amyotrophic lateral sclerosis (Lou Gehrig’s disease). “Several of these potential treatments have advanced to human trials, with encouraging outcomes for patients,” says Matthew Hemming, lead author of the report and a graduate student in Selkoe’s lab.

Another way to do gene therapy involves using a virus to carry the curative gene to target cells. However, two people have died and three contracted leukemia in experiments using this method. The drawback of using viruses this way is that the added gene often mixes with the patient’s genome in ways that can lead to unwanted side effects, including cancer and, possibly, death.

The Harvard team used skin cells from the animal’s own body to introduce a gene for an amyloid-busting enzyme known as neprilysin. The skin cells, also known as fibroblasts, “do not form tumors or move from the implantation site,” Hemming notes. “They cause no detectable adverse side effects and can easily be taken from a patient’s skin.” In addition, other genes can be added to the fibroblast-neprilysin combo, which will eliminate the implants if something starts to go wrong.
Will it work in humans?

This method worked well in the Alzheimer's experiments. “The gene that removed the amyloid-beta may not only prevent brain cells from dying, but will also remove the toxic protein that drives the disease progression,” Hemming comments.

The experiments proved that the technique works, but will it work in humans? One major obstacle, Selkoe says, is the larger size of a human brain compared to that of a mouse. That difference will require an increase of amyloid-busting activity throughout a much larger space.

One solution might involve implanting the genes and fibroblasts where they have the best access to amyloid-beta, in the spinal fluid for example, instead of trying to inject them into a small target. The amyloid-killing combo might be put into capsules that would secrete neprilysin into the blood circulating in the brain, eliminating the need to hit an exact spot.

This or some other clever maneuver that does not require surgery might eliminate the gooey plaques, but will that improve a person’s memory? And will the change be long-lasting? “Further work is needed to determine if reducing the plaque burden has cognitive benefits over a long period,” notes Hemming, “but there’s a wealth of evidence arguing that it will.”

Mind Over Matter, With a Machine’s Help
Jason Pontin

WOULD that thinking made it so, people sometimes wistfully say. But Christopher deCharms, the chief executive of Omneuron, a start-up in Menlo Park, Calif., believes the adage.

The company he founded has created technologies that teach sufferers to think away their pain, and plans to similarly treat addiction, depression and other intractable neurological and psychological conditions.

Omneuron is one of a number of new companies that are commercializing a brain-scanning technology called real-time functional magnetic resonance imaging, or fMRI. Using large scanners to measure blood flow to different parts of the brain, the technology makes the brain’s activity visible by revealing which of its parts are busiest when we perform different tasks.

While fMRI dates back to the early 1990s, hitherto it has been used mainly by doctors in hospitals to make diagnoses. The commercialization of brain scanning is a recent development, spurred by the refinement of the technology. Omneuron, which Dr. deCharms founded in 2001 and whose research has been funded by the National Institutes of Health, uses fMRI to teach people how to play with their own heads. Other entrepreneurs are working on ways to deploy fMRI as a lie detector, a tool for conducting marketing research or an instrument to make brain surgeries safer and more precise.

Here’s how Omneuron uses fMRI to treat chronic pain: A patient slides into the coffin-like scanner and watches a computer-generated flame projected on the screen of virtual-reality goggles; the flame’s intensity reflects the neural activity of regions of the brain involved in the perception of pain. Using a variety of mental techniques — for instance, imagining that a painful area is being flooded with soothing chemicals — most people can, with a little concentration, make the flame wax or wane. As the flame wanes, the patient feels better. Superficially similar to an older technology, electroencephalogram biofeedback, which measures electrical feedback across multiple areas of the brain, fMRI feedback measures the blood flow in precise areas of the brain.

“We believe that people will use real-time fMRI feedback to hone cognitive strategies that will increase activation of brain regions,” Dr. deCharms said. With practice and repetition, he said, this could lead to “long-term changes in the brain.”

In time, he hopes, a patient could evoke the effect without the machine.

In a 2005 study, Dr. deCharms and Sean Mackey, associate director of the pain management division at Stanford, showed that eight patients with recalcitrant pain felt their discomfort reduced by as much as 64 percent by using Omneuron’s technology.

If fMRI proves effective in treating pain, it could be big business. According to the American Chronic Pain Association, one in three Americans will experience chronic pain at some point in life. At any one time, more than 50 million Americans complain of pain. And Dr. deCharms contends that fully one-third find their pain resistant to traditional treatments like narcotics. Omneuron’s technologies could offer such patients some relief, and without side effects.

The pain-relief industry is huge: the average American spends as much as $900 a year on pain medications, whose effects are generally short-lived.

But Dr. deCharms says that controlling pain is just one of many possible uses for fMRI feedback. Today, Omneuron is also researching treatments for addiction, depression and other psychological illnesses. In addition, he said. the company has contemplated “several dozen applications,” including the treatment of stroke and epilepsy. Brain scanning could even be used to improve athletic performance, he speculated.

Doctors and drug-abuse experts are particularly excited about the idea of treating addiction using fMRI. While scientists have talked about such an application since the technology was invented, Omneuron is the first to work on a real therapy. “We might have a tool to help control the inner sensation of craving,” said Nora D. Volkow, director of the National Institute on Drug Abuse, which helped fund Omneuron’s research into addiction.

A growing number of ventures hope to turn fMRI into a business. The most well-publicized is No Lie MRI, which wants to sell brain scanning to law firms and governmental bodies like police departments or security and intelligence agencies as a replacement for the notoriously unreliable polygraph test. No Lie MRI has already begun selling what it calls its truth verification technology for about $10,000 to individuals keen to prove their innocence.

Joel Huizenga, the chief executive of No Lie MRI, said: “A technology gets known by its first product. For fMRI, that application is going to be truth verification.”

Mr. Huizenga says he would also like to sell fMRI to marketers who wish to determine whether consumers are responding to advertising, a commercial application of an emerging field of research called neuro-economics.

Other brain-scanning ventures include Cephos, another lie-detection company, and Imagilys, which sells fMRI to surgeons who want to map the brains of patients before operations.

For its part, Omneuron would make money not by building fMRI centers — which are expensive and fairly common in larger hospitals — but by selling clinical skills, software and equipment.

“I imagine the business model would be akin to Lasik eye surgery,” Dr. deCharms says. “We’d provide the technology to outpatient treatment centers.”

There are challenges to the commercialization of brain scanning, and the most important may be regulatory. Clinical trials can take many years, and federal approval is famously unpredictable. But until clinical data and federal approval are forthcoming, Dr. deCharms says, Omneuron cannot sell its technology as a clinical treatment.

Ed Boyden, an assistant professor at the Media Lab of the Massachusetts Institute of Technology and a researcher in neuroengineering, distinguishes sharply among different brain-scanning ventures. “If you want to commercialize this technology,” he said, “then the use has to approximate real-world situations.”

In his view, tests of fMRI truth verification don’t meet that criterion. For instance, in studies at the University of Pennsylvania in 2002 and 2005, subjects were told to conceal the identity of a card under questioning. FMRI was able to distinguish falsification 77 percent of the time.

Mr. Huizenga was so inspired by this research that he decided to start his company, confident that fMRI would soon identify lies 90 percent of the time.

But Dr. Boyden says he believes that being asked to tell a falsehood that everyone knows is a falsehood is not the same thing as lying to deceive someone. Thus, whatever brain patterns fMRI detects when a person constructs such a requested fiction may be different from whatever happens when we lie.

By contrast, Dr. Boyden says: “What I like about Omneuron is that it’s working with real-world situations. They gave people visualization strategies which they could monitor — and which produced real, measurable results.”

If Dr. deCharms and Omneuron are successful, and can teach us to train our brains to manage neurological and psychological conditions, they will have given us something that has challenged philosophers, psychologists and yogis alike: gaining some reliable control over our own thoughts.

Until next week,

- js.

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