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Old 06-03-13, 08:11 AM   #1
JackSpratts
 
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Join Date: May 2001
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Default Peer-To-Peer News - The Week In Review - March 9th, '13

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"It’s a step in the right direction that the [Pirate Bay] service is driven out of Sweden." – Sara Lindback



































March 9th, 2013




File Sharing Claims Return to Canada

Resurgence may be driven by ‘mass copyright’ lawsuits in the U.S.
Jonathan Mesiano-Crookston

In 2004, BMG Canada Inc. and other music companies sued anonymous Canadian file sharers for copyright infringement, and asked their Internet service providers to disclose their names and addresses.

While BMG’s request was denied, the case clarified the test to be applied to such situations, and provided insight about the balance between privacy and intellectual property rights in such motions.

Since 2011, there appears to be a resurgence in these types of disclosure requests; three have been brought since 2011, and two of those are outstanding.

The resurgence may be driven by the proliferation of “mass copyright” claims in the United States, where copyright infringement lawsuits are brought against multiple unnamed “John Does.” Once their names are obtained from their ISPs, the defendants are contacted and payment of hundreds or thousands of dollars is demanded in exchange for settling potential litigation.

While these claims are not without controversy — are they extortion or are they effective at stemming file sharing? — they will likely grow in popularity in Canada as they have in the U.S., so a look at the Canadian legal landscape for this field is useful.

In 2004, BMG collected IP addresses of people illegally sharing copyrighted music on peer-to-peer networks, and sought a court order forcing certain ISPs to identify them. This is sometimes referred to as an “equitable bill of discovery,” or a Norwich Pharmacal motion (after a 1973 British House of Lords decision). These motions typically require meeting a five-part test:

• the applicant must establish a bona fide case against the unknown alleged wrongdoer;
• the person from whom discovery is sought must in some way be involved in the matter under dispute, and must be more than an innocent bystander;
• the person from whom discovery is sought must be the only practical source of information available to the applicants;
• the person from whom discovery is sought must be reasonably compensated for his expenses [and] legal costs;
• the public interest in favour of disclosure must outweigh legitimate privacy concerns.

The Federal Court denied the motion, holding that BMG had failed to establish the first, third, and fifth elements of the test: BMG Canada Inc. v. John Doe (F.C.) [2004] 3 F.C.R. 241.

BMG appealed, but lost ([2005] 4 F.C.R. 81). The Court of Appeal held that BMG’s primary affiant, the president of a media enforcement company, could have provided better evidence of the infringement, as much of it was hearsay. Also, BMG had not demonstrated that the ISPs were the only practical source of the information requested when subscriber information could have been obtained from KaZaA or iMesh, operators of the peer-to-peer file-sharing networks.

Finally, while recognizing the importance of intellectual property rights to creators, and acknowledging that rights holders were entitled to the names of possible infringers, the Court of Appeal noted that disclosure should be ordered in a way that minimizes privacy concerns.

In 2011, Voltage Pictures LLC brought a motion against three ISPs, and asked that they disclose the names and addresses of people allegedly sharing The Hurt Locker, a movie for which Voltage held copyright. In an eight-page decision, the Federal Court granted the motion, although the affected ISPs appear not to have opposed it: Voltages Pictures LLC v. Jane Doe [2011] F.C.J. No. 1260.

The Federal Court seemed more concerned about infringement than possible privacy ramifications, and specifically noted that defendants should not be allowed to hide behind Internet anonymity. The order was not appealed and the underlying proceeding was discontinued several months later, presumably because the plaintiff settled with the defendants.

This thorny issue isn’t going away.

In late 2012, a production house called NGN Prima Productions Inc. sued anonymous defendants for copyright infringement. Then NGN brought a motion against four smaller ISPs for disclosure of the names and addresses of the infringers. On Nov. 19, the motion was granted and the ISPs were given two weeks to respond. From public records (court file no. T-2062-12), it appears that at least one ISP is responding to the motion, and the matter will be argued more fully at a future date.

On Dec. 7, Voltage asked the Federal Court to order Teksavvy to disclose the names and addresses of people who had allegedly pirated some of Voltage’s movies via the BitTorrent network. The Canadian Internet Policy and Public Interest Clinic has sought leave to intervene and Voltage’s motion for disclosure has been postponed until CIPPIC’s status is determined. The next motion date has not been set.

With the popularity of the Internet and the ease in copying digital media, it is no wonder these motions are gaining traction. On the other hand, the inherent privacy concerns, leading-edge law, and questionable ethics of these kinds of demand letters has fuelled public interest in such motions, making these proceedings worth watching for both lawyer and layperson alike.
http://www.lawyersweekly.ca/index.ph...r=41&article=4





Hadopi Suggests New Anti-Piracy Measures in France, While File-Sharing Levels Discussed

A new report by the French government agency set up to combat online piracy, Hadopi, has suggested new measures to combat the distribution of unlicensed content online.

Proposals include web-blocking, and the two hottest piracy-related topics in the music community just now: the downgrading of piracy-enabling sites on search engines and the cutting off of revenue stream to such services, either by freezing PayPal or credit card accounts, or by banning them from embedding ad network widgets on their sites.

Hadopi was set up to administer the three-strikes system for combating illegal file-sharing in France, and has initiated the sending of hundreds of thousands of warning letters to suspected file-sharers, though only a hundred or so cases are thought to have go to the ‘strike three’ stage, where some kind of sanction (most likely bandwidth throttling or net suspension) can theoretically be forced on persistent file-sharers.

But the latest report from Hadopi, published last week, focused on other forms of online piracy, in particular websites that directly provide unlicensed streams or downloads to users. The authority proposes web-blocking as a method to tackle these sites – an anti-piracy system prioritised over three-strikes in some other jurisdictions.

The report proposes putting statutory obligations on sites to install filters – similar to those already operated by YouTube – to help filter out copyright material uploading without permission by users, with the threat of demoting such sites on search engines or getting court ordered web-blocks against services that fail to meet those requirements.

The agency would also like the power to target the finances of sites that persistently infringe copyright, ultimately utilising court orders to stop infringing sites from taking funds via PayPal or credit card, or from benefiting from ad networks. This is an area where the music industry has already been proactive, working with credit card giants to cut off the income streams of those piracy operations that rely on subscriptions or donations from users.

French ministers will now consider the Hadopi report before making any decisions on future priorities regards its anti-piracy initiatives, at the same time as reviewing the ongoing three-strikes system. All the measures on the table are, of course, controversial in some quarters, with some arguing that three-strikes and web-blocking are overly severe and, anyway, don’t work. Others, meanwhile, say that the content industries should be more focused on launching more compelling legit services than on instigating ever more drastic anti-piracy measures.

Elsewhere in piracy news, London-based analytics company Musicmetric has countered a recent report published by the NPD Group in the US that said file-sharing levels were finally in decline. Musicmetric says that while recent research does suggest that the number of people file-sharing is starting to fall in the US, worldwide BitTorrent usage is up. Though that is mainly due to increases in developing markets where the number of legit download and streaming services are currently more limited.

Gregory Mead of Musicmetric owner Semetric, told CMU: “While our data does show a decrease in BitTorrent downloads in the US, it also shows that it is increasing significantly in emerging markets such as Brazil and India and is on track to pass the US in the near future”.

He adds: “The extension of legal downloading services like iTunes and streaming services such as Spotify is having a real positive effect as people have more access to revenue-generating outlets. The findings show those emerging markets with growing music piracy issues are ripe for a legal alternative, and represent very exciting opportunities for the global music industry. The key thing is for the industry to find ways of engaging with fans and using data on all online music consumption”.
http://www.thecmuwebsite.com/article...els-discussed/





File-Sharing Hub The Pirate Bay Seeks Safe Havens in Norway, Spain
AP

Embattled file-sharing site The Pirate Bay is looking for safe havens in Norway and Spain after its Swedish host came under legal pressure to shut it down.

The Swedish Pirate Party, a small political party advocating transparency and freedom online, has provided Internet access to the site for the past three years.

But it’s handing over those duties to sister parties in Norway and Spain’s Catalonia region following legal threats from the Rights Alliance, a Swedish anti-piracy group representing the entertainment industry, officials for all three parties told The Associated Press on Tuesday.

“Basically, the service that was provided by the Swedish Pirate Party is nowadays provided by the Norwegian Pirate Party, and soon also by the Catalan Pirate Party,” said Kenneth Peiruza, a spokesman for the Catalan group.

The Pirate Bay is one of the world’s biggest free file-sharing websites, offering millions of users a forum for downloading music, movies and computer games. The site doesn’t host any pirated material itself, but acts as an index to help people find files they can share with each other using BitTorrent software. The entertainment industry has failed to shut it down, even after its operators were convicted of copyright violations in Sweden in 2009.

Sara Lindback of the Rights Alliance said the case underlines how difficult it is to combat illegal file-sharing online, but suggested the fight against The Pirate Bay would continue.

“It’s a step in the right direction that the service is driven out of Sweden,” Lindback said. “But as long as the service is up we will do what we can to protect our rights-holders.”

Pirate Party officials said the laws in Norway and Catalonia would make it hard for the entertainment industry to prevent them from offering web hosting services to The Pirate Bay.

By doing so, the parties are only acting as a “digital post office,” said Geir Aaslid, leader of the Norwegian Pirate Party. “We’re not responsible for the mail passing through the pipeline.”

The Pirate Bay didn’t comment on the move directly, but changed the name of the site temporarily to The Hydra Bay, an apparent reference to a mythological beast that grows two new heads when one head is cut off.
http://www2.macleans.ca/2013/02/26/f...-norway-spain/





After Being Cut From Norway, The Pirate Bay Returns From North Korea

The Pirate Bay is back online. Its new provider turned out to be none less than one in North Korea. This has all sorts of interesting geopolitical consequences.

People using The Pirate Bay right now will observe that it’s slightly slower than usual. Earlier today, the Norwegian Pirate Party sent a press release that they no longer supplied bandwidth to The Pirate Bay, as the party’s uplink had caved to threats from the copyright industry about kicking out The Pirate Bay. (This remains a concern in itself.)

Ten minutes after that article was posted, The Pirate Bay came back online with a new provider that was as-yet unidentified. The swarm has worked and discovered the origins of the new provider: North Korea.

This has all sorts of interesting geopolitical consequences.

(For the technically interested, the last link in the traceroute chain is 175.45.177.217. A whois lookup will tell you that this is an ISP based in North Korea.)

North Korea may have the one government on this planet which takes pride in asking Hollywood and United States interests to take a hike in the most public way imaginable. Many more governments could do well to learn that particular idea, even if they don’t need to pick up the other things that the NK government is up to.

The world’s most resilient site for safeguarding freedom of expression, going against the political interests of the United States’ elite cronyists, is now run from North Korea. Imagine that.

This is going to be really fun to watch. The local convenience store may run out of popcorn when this becomes known.

UPDATE: The operators of The Pirate Bay confirm the story in a press release with comments: “This is truly an ironic situation. We have been fighting for a free world, and our opponents are mostly huge corporations from the United States of America, a place where freedom and freedom of speech is said to be held high. At the same time, companies from that country is chasing a competitor from other countries, bribing police and lawmakers, threatening political parties and physically hunting people from our crew. And to our help comes a government famous in our part of the world for locking people up for their thoughts and forbidding access to information.”
http://falkvinge.net/2013/03/04/afte...m-north-korea/





The Pirate Bay's Move to North Korea is Probably More Satire than Fact
Carl Franzen

The Pirate Bay published a blog post today claiming that it has relocated to a "new provider" in North Korea after being invited by the totalitarian country's leadership "to fight our battles from their network." The announcement comes just days after The Pirate Bay relocated to Norway and Spain after facing legal threats from an entertainment industry trade group in Sweden, where it had been hosted for the past three years. The new post appears to be a satirical commentary comparing the North Korean regime to the democratic governments of Western Europe and the U.S. Aside from the fact that the author of the new Pirate Bay post is listed as the improbable "Kim Jung-Bay" (a permutation of The Pirate Bay and Kim Jong-Un, North Korea's young leader), there are several other good reasons to doubt the file-sharing website has actually moved to the isolated nation.

"There are several good reasons to doubt The Pirate Bay has relocated to North Korea"

For one thing, North Korea's access to the internet is notoriously limited by design, with the country only recently setting up an international mobile wireless network for tourists. For another, The Pirate Bay has played a similar prank on the Web before, claiming on April Fool's Day 2007 that it had relocated to the North Korean embassy in Stockholm, Sweden. But the most convincing evidence for The Pirate Bay's fakery comes from a German programmer who traced back the hosting chain from its supposed location in Pyongyang, North Korea, to an address in Cambodia. The Pirate Bay looks to be using a border gateway protocol (BGP) spoofing method to make it appear as though it is serving up links from inside North Korea. While The Pirate Bay may not have actually followed Dennis Rodman in traveling to the country, it does seem to be running out of safe havens for its popular file exchange.
http://www.theverge.com/2013/3/4/406...tire-than-fact





Copyright Trolls Prenda Law, Paul Duffy, and John Steele Commence Three Lawsuits v. Paul Godfread, Alan Cooper and Our Community

In an unexpected and rather desperate move, in the midst of growing public’s and judges’ impatience regarding Prenda’s conduct, this “law firm” has commenced three libel lawsuits designed to chill free speech by burying its critics in massive legal fees.

Initially those lawsuits have been filed in state courts so loved by Prenda (St. Clair County IL, Cook County IL, and Miami-Dade FL), but were promptly removed to the federal level by the defense lawyers. So, now we have:

Paul Duffy v. Paul Godfread, Alan Cooper and Does 1-10, ILND 13-cv-01569 — Jason Sweet and Erin Russell represent Paul and Alan.
Prenda Law v. Paul Godfread, Alan Cooper and Does 1-10, ILSD 13-cv-00207 — Jason Sweet and Erin Russell represent Paul and Alan.
John Steele v. Paul Godfread, Alan Cooper and Does 1-10, FLSD 13-cv-20741 — Brad Patrick represents Paul and Alan.

Alan Cooper and his attorney Paul Godfread are the main targets, obviously because they brought some uncomfortable questions to the daylight. Stifling the criticism of Prenda’s actions is the second, but not a secondary goal.

Who are the Does 1-10? If you read through largely identical complaints, you’ll see the answer: us. Us: me, DieTrollDie, dozens of community members who spend our personal time and resources to keep public aware of the predatory practice known as “copyright trolling” — abusive lawsuits with a declared goal to stop online piracy, but in reality designed to coerce quick settlements from alleged file-sharers, guilty or not. This is achieved by leveraging the social stigma attached to pornography and by insane, disproportionate statutory fines meant to be applied to large, commercial-scale infringement. We have been diligently reporting on lawsuit abuses, and it is not a surprise that those who benefit from such abuses are eager to shut us down.

I will avoid commenting on these three cases for the time being; will restrict myself to only reporting facts. Anyone with half brain can see all the flaws and the real goals of these cases anyway (as well as the answer to the question: “Why are there three nearly identical lawsuits, not one?”). Feel free to discuss these lawsuits, but be aware that if discovery is granted, your identity will most likely be revealed to the plaintiffs (I cannot do anything about it), so don’t say what you would not say openly.

As for me, I stand by everything I wrote. Maybe the words I have chosen were overly emotional, but everything I said has been based on provable facts and good faith. In addition, I never tried to smuggle my opinions as facts.

This country is still a world leader in free speech, and I hope that the outcome of these lawsuits will only strengthen my and many others’ pride.
http://fightcopyrighttrolls.com/2013...our-community/





Is This Canadian Newspaper Breaking Copyright Law?
Michael Geist

I'm a big fan of Chris Selley, the National Post writer behind Full Pundit, a daily look the Canadian editorial and opinion columns (last year Selley was also a vocal supporter of the much-needed Fire Ron Wilson campaign). The Full Pundit features a summary of the most notable editorial writing in Canadian media accompanied by quotations from the original works. I'm quite sure that Selley does not ask for permission to quote from those other works since fair dealing for news reporting purposes permits their use without the need to do so. Yet if someone wants to post a quote from Selley or anything else written by the National Post, they are now presented with pop-up box seeking a licence that starts at $150 for the Internet posting of 100 words with an extra fee of 50 cents for each additional word (the price is cut in half for non-profits).

For example, in yesterday's Full Pundit, Selley quotes John Graham in the Globe on the death of Chavez:

"Illiteracy has all but disappeared. ... Education and free health care are almost universally available. ... Improving the quality of life for millions at the bottom levels of society is no small achievement. He also imparted to these millions a sense of dignity about themselves and pride in their leader's often bombastic rhetoric."

If you try to highlight the text to cut and paste it, you are presented with a pop-up request to purchase a licence if you plan to post the article to a website, intranet or a blog. The fee would be $150. In other words, the National Post is seeking payment for text in an article that was itself copied from the Globe. Of course, it is not just Selley's work as many articles quote from other articles or sources (for example, this Post article on Taylor Swift is primarily quotes from Vanity Fair. If you highlight a chunk of text, the licence message pops up).

None of this requires a licence or payment. In fact, the amount of copying is often so insubstantial that a fair dealing analysis is not even needed. Last year, the Federal Court of Canada ruled that several paragraphs from a National Post column by Jonathan Kay posted to an Internet chat site did not constitute copying a substantial part of the work. If there was a fair dealing analysis, there is no doubt that copying a hundred words out of an article would easily meet the fair dealing standard. In fact, the Supreme Court of Canada has indicated that copying full articles in some circumstances may be permitted.

The National Post is using iCopyright as its licensing service. The company provides a fair use statement that simply does not reflect the law, suggesting that fair dealing may not apply to the use of work that may generate revenues, is not highly creative, was available under licence, is something more than a footnote, or is posted to the Web.

None of these are conditions that exclude the application of fair dealing and the recent Supreme Court of Canada decisions make it clear that the required broad and liberal approach would cover the excerpt copying for which iCopyright seeks payment. All media organizations rely on fair dealing to support a free and robust press. Those same organizations should not be undermining those hard-earned users' rights by raising unnecessary licensing demands.
http://www.huffingtonpost.ca/michael...b_2828854.html





Imagining a Swap Meet for E-Books and Music
David Streitfeld

The paperback of “Fifty Shades of Grey” is exactly like the digital version except for this: If you hate the paperback, you can give it away or resell it. If you hate the e-book, you’re stuck with it.

The retailer’s button might say “buy now,” but you are in effect only renting an e-book — or an iTunes song — and your rights are severely limited. That has been the bedrock distinction between physical and electronic works since digital goods became widely available a decade ago.

That distinction is now under attack, both in the courts and the marketplace, and it could shake up the already beleaguered book and music industries. Amazon and Apple, the two biggest forces in electronic goods, are once again at the center of the turmoil.

In late January, Amazon received a patent to set up an exchange for all sorts of digital material. The retailer would presumably earn a commission on each transaction, and consumers would surely see lower prices.

But a shudder went through publishers and media companies. Those who produce content might see their work devalued, just as they did when Amazon began selling secondhand books 13 years ago. The price on the Internet for many used books these days is a penny.

On Thursday, the United States Patent and Trademark Office published Apple’s application for its own patent for a digital marketplace. Apple’s application outlines a system for allowing users to sell or give e-books, music, movies and software to each other by transferring files rather than reproducing them. Such a system would permit only one user to have a copy at any one time.

Meanwhile, a New York court is poised to rule on whether a start-up that created a way for people to buy and sell iTunes songs is breaking copyright law. A victory for the company would mean that consumers would not need either Apple’s or Amazon’s exchange to resell their digital items. Electronic bazaars would spring up instantly.

“The technology to allow the resale of digital goods is now in place, and it will cause a dramatic upheaval,” said Bill Rosenblatt, president of GiantSteps, a technology consulting firm. “In the short term, it’s great for consumers. Over the long term, however, it could seriously reduce creators’ incentive to create.”

Scott Turow, the best-selling novelist and president of the Authors Guild, sees immediate peril in the prospect of a secondhand digital thrift shop. “The resale of e-books would send the price of new books crashing,” he said. “Who would want to be the sucker who buys the book at full price when a week later everyone else can buy it for a penny?”

He acknowledged it would be good for consumers — “until there were no more authors anymore.”

Libraries, though, welcome the possibility of loosened restrictions on digital material.

“The vast majority of e-books are not available in your public library,” said Brandon Butler, director of public policy initiatives for the Association of Research Libraries. “That’s pathetic.”

He said that 60 percent of what the association’s 125 members buy was electronic, which meant sharp restrictions on use. Libraries cannot buy from Apple’s iTunes, he said. And so, for example, Pixar’s Oscar-winning soundtrack for the movie “Up” is not available in any public collection. An Apple spokesman confirmed this.

“If these things can’t be owned, who is going to make sure they exist going forward?” Mr. Butler asked. “Without substantial changes, we can’t do what libraries have always done, which is lend and preserve.”

For over a century, the ability of consumers, secondhand bookstores and libraries to do whatever they wanted with a physical book has been enshrined in law. The crucial 1908 case involved a publisher that issued a novel with a warning that no one was allowed to sell it for less than $1. When Macy’s offered the book for 89 cents, the publisher sued.

That led to a landmark Supreme Court ruling limiting the copyright owner’s control to the first sale. After that, it was a free market.

Sales of digital material are considered licenses, which give consumers little or no ability to lend the item. The worry is that without such constraints digital goods could be infinitely reproduced while still in the possession of the original owner.

Both the Amazon and Apple systems aim to solve this problem. Amazon’s patent envisions a book or movie or song being kept in a customer’s personalized “data store.” When an item is no longer wanted, the user could sell or trade it to another user, an action that would automatically delete the item from the first user’s store.

The patent describes what is essentially a gigantic swap meet. Amazon’s 152 million active customers would maintain a list of desired secondhand digital objects (“Django Unchained” or Cheryl Strayed’s “Wild”), as well as a list of used digital objects that are “available for movement” (“Ghost Rider: Spirit of Vengeance” or Lance Armstrong’s autobiography).

An Amazon spokesman declined to comment on the patent, including how soon or even whether the digital marketplace would be set up. The patent does not make clear if such a bazaar would need the publishers’ permission.

The degree to which media companies are against secondhand digital marketplaces can be seen in the music industry’s hard line toward ReDigi, a Massachusetts start-up that allows for the reselling of iTunes songs.

ReDigi took some pains to make its approach as friendly to the music companies as possible. For instance, any money gained from selling songs must be spent on new songs. And ReDigi says its system, like both Amazon’s and Apple’s, allows for only one copy of an electronic product to exist at any one moment.

Capitol Records nonetheless sued ReDigi for copyright infringement in a New York federal court and asked the judge to shut the service through a preliminary injunction. The judge declined. He is expected to rule on the merits of the case shortly.

An Apple spokesman did not immediately return a message seeking comment on the company’s patent application, which was first reported on Apple Insider. Apple, which has not sued ReDigi, declined to comment on the court case.

John Ossenmacher, ReDigi’s chief executive, said he was heartened by Amazon’s resale patent.

“Amazon is pretty fearless, which bodes well for the consumers of digital goods.” And, he added, for Amazon itself. “What better value to give an Amazon customer than to say, ‘Buy your book here and then later you can resell it’? You can’t do that with Barnes & Noble’s Nook.”

Robert Levine, author of “Free Ride,” an account of how Silicon Valley rose to power by plundering the traditional media companies, said he believed there was a cultural imperative to loosen the restrictions on digital entertainment — but not too much.

Before the Internet, he pointed out, there was little controversy over secondhand stores for books and music. “It never threatened the broader market because it simply wasn’t that efficient,” he said. “You couldn’t always find the book or CD you were looking for.”

Amazon, which caused an uproar with writers and publishers when it started selling used books in 2000, made it as easy as clicking a button. “Digital resale would change it even more,” Mr. Levine said.

Markets usually move toward a solution both sides can live with, he noted. “But that happens slowly, and in the meantime we’re in for one hell of a fight.”
https://www.nytimes.com/2013/03/08/t...and-music.html





Apple's Digital Content Resale and Loan System Could Allow DRM Transfers Between End Users
Mikey Campbell

The U.S. Patent and Trademark Office on Thursday published details of an exhaustive Apple invention covering the resale and loan of owned digital content like e-books, music and movies, possibly portending an upcoming addition to iTunes.

The patent is outlined in three divisional applications, each titled "Managing access to digital content items," with two filed in September of 2011, and one in June of 2012. From the most recent filing, Apple describes a system that manages the authorized transfer of owned digital content between end-users. The invention is basically a system that allows purchasers to sell or loan "used" content to other people.

Interestingly, Amazon was recently granted a patent for a nearly identical system, though the online retailer's solution calls for a centralized marketplace while Apple's is largely distributed. Amazon first filed for its property in 2009.

Apple's filing provides for the authorized access to digital content, otherwise known as digital rights, to be transferred from one user to another. As an example, a first user may purchase an e-book from the iBookstore and later decide to sell that content to a second user. The original owner notifies the store that they want to sell the item, and if certain criteria are met, the user is allowed to transfer rights to the second buyer. Content itself may or may not change hands, but more importantly the rights attached to said content is managed so that the first user can no longer access the content once it is sold.

The invention decentralizes the process by taking the online store out of the equation:

Alternatively, instead of a third party determining whether one or more criteria are satisfied, the first (or second) user's device makes the determination and may be responsible for preventing the first user's device from further consuming the digital content item. In some embodiments, the online store and/or the publisher of the digital content item may receive a portion of the proceeds of the transfer.

It should be noted that the content need not reside permanently, or at all, on a user's device, meaning the system can be cloud based.

Key to the system's operation is ownership history. As the "used" content is passed from one user to the next, a database is established so that the proper owner is allowed access to the item and can then choose to transfer those rights to yet another party.

Transferral of authorized access can be device-to-device through an intermediary like an online store, device-to-device without an intermediary, meaning verification must be established at a later time. In another embodiment, no device-to-device transfer is necessary.

Restrictions of transfer are a means to manage the flow of content between end users and can be set by the publisher. For example, a certain e-book may not be resold within a six month period and must have a resale price of at least $5. The restrictions can be set on a timed basis, frequency of transfer, price and to whom the content is sold.

Proceeds are also discussed, with publishers or content makers sometimes granted rights to a portion of the resale value. These percentages are based on time and how many transfers have been completed for a particular item. Gifting is also supported, with proceeds for these transfers split between the end user and publisher.

Other embodiments deal with temporary transfers, partial transfers, delayed transfers and loans.

Eliza C. Block and Marcel Van Os are credited as inventors of all three applications, while E. Caroline F. Cranfill, Alan C. Cannistraro, William M. Bachman and Timothy B. Martin were added to the list for one of the 2011 filings.
http://appleinsider.com/articles/13/...ween-end-users





Megaupload Founder Can Sue New Zealand Spy Agency: Court
Naomi Tajitsu

A court ruled on Thursday that Megaupload founder Kim Dotcom can sue New Zealand's spy agency for illegal surveillance, opening the government up to more scrutiny over its role in an unlawful 2012 police raid on the internet entrepreneur's home.

The New Zealand Appeals Court rejected an application from the attorney general, acting on behalf of the Government Communications Security Bureau (GCSB), to exclude the agency from the lawsuit. New Zealand's High court ruled last year the agency could be held liable for illegally spying on Dotcom.

Dotcom is seeking damages from the government for its role in a raid in January 2012, when New Zealand police helicopters swooped on the flamboyant entrepreneur's mansion at the request of U.S. authorities.

The U.S. Federal Bureau of Investigation accuses Dotcom of leading a group that netted $175 million since 2005 by copying and distributing copyrighted content without authorization.

The GCSB was found to have spied on Dotcom in the run-up to the 2012 raid, prompting an apology from the prime minister. Also known as Kim Schmidt, Dotcom is a German national but with residency in New Zealand, which made it illegal to spy on him.

Lawyers had argued that the government should not be required to be named twice as a defendant in the compensation suit, given that it is already listed as representing New Zealand police.

"It is preferable to require the addition of the Attorney-General as a separate party in respect of each Government entity in respect of which he or she is sued," the Appeals Court said in a statement.

But the court limited the amount of GCSB evidence that Dotcom and his associates could access, saying that only evidence relevant to the case that was given to police would be passed on to his legal team.

"This will strengthen our case in so far as GCSB remains a party to the proceedings," William Akel, one of Dotcom's lawyers, said of the ruling.

Dotcom and his colleagues are fighting extradition to the United States to face charges of online piracy, fraud and money laundering in relation to their file-sharing site Megaupload, which housed everything from family photos to blockbuster films.

He maintains that Megaupload, one of the world's most popular websites before it was shut down last year, simply provided online storage services, and should not be held responsible for stored content.

His case suffered a setback last week when a New Zealand court ruled that Washington did not have to hand over all of its evidence against him.

(Editing by Paul Tait)
http://news.yahoo.com/megaupload-fou...022907945.html





As Pirates Run Rampant, TV Studios Dial Up Pursuit
Christopher S. Stewart

NBCUniversal general counsel Rick Cotton spoke with WSJ's Christopher Stewart about efforts to stem the tide of illegal downloads and the ambitions for NBC's piracy unit, in the wake of the failure of the SOPA bill in Congress.

By the glow of six flat screens inside a windowless room in a California office tower, three content cops from NBCUniversal watch as pirated versions of the cable-TV drama "Suits" begin popping up on the Internet within minutes of the show's closing credits.

At first, they come in ones and twos, but in an hour there are 444 unauthorized links to that Thursday night's episode on its USA Network. In two hours more, that number more than doubles, opening up the show to millions of Web viewers around the world as translations into languages as varied as Bulgarian and Chinese begin to roll out.

As the pirates click away, the three on the digital beat fire off menacing notices to the website operators hosting the illegal episode, demanding they pull it down.

"It's like whack-a-mole," says Andrew Skinner, the manager of content security for NBCUniversal. "You knock off one and there are 50 more behind it."

Content pirates have sailed the World Wide Web since its earliest days, but today they are bolder, faster and better armed with technology than ever. By many measures, the pirates are ahead. The antipiracy and security firm Irdeto, which works with some of the content companies, said that in 2009 it detected 5.4 billion instances of pirated content online, from movies and television shows to videogames. Last year, that number jumped to more than 14 billion.

Many of the big content companies have operations like NBCUniversal's in Los Angeles, but they usually are kept out of the public eye. NBCUniversal gave The Wall Street Journal a rare peek inside the cat-and-mouse game its security team plays with suspected pirates. The cops launch armies of automated "crawlers" to hunt unauthorized videos, for instance, while pirates fight back in some cases with captchas, those on-screen boxes that require users to replicate numbers and letters from those in a distorted image on the website.

"We're up against a whole ocean" of piracy, Mr. Skinner says.

This ocean could eventually reduce the television industry's profit, much of which now comes from subscription fees on cable channels like USA and Time Warner Inc.'s HBO. Pirated versions of shows make it much easier for viewers to forgo pay television. They also squeeze another vital profit source of the TV industry: the rental or sale of movies and television shows to consumers or their licensing to other TV networks and online services like Netflix Inc.

HBO's Game of Thrones spotlights the issue. More than 11 million HBO subscribers watched each episode of the show's second season in the U.S. last year. From peer-to-peer sites alone, which allow users to share content directly among themselves without it passing through a central point, another 3.7 to 4.2 million people around the world watched pirated versions of each episode, up 38% from the show's first season, according to an estimate by TorrentFreak.com, a blog about file sharing. An HBO spokesman said the company "has a comprehensive antipiracy program in place, and we believe that the effectiveness of that program is evidenced in part by the continued success of our business."

Last year, Kathy Wolfe, who owns a small independent U.S. film-distribution company, Wolfe Video, found more than 903,000 links to unauthorized versions of her films, which she sells around the world for $3.99 per download. She estimates that she lost over $3 million in revenue in 2012 as a result of stolen content from her top 15 titles. On top of that, she spends over $30,000 a year—about half her profit—just to send out takedown notices for her titles. She said the losses to piracy, combined with the recent recession, forced her to trim her marketing budget in half, cut pay for her 11 employees and stop giving herself a salary. "It's changed us," she said. "It's a very damaging trend."

As for NBCUniversal, its profits are still robust, with operating cash flow climbing to $4.1 billion last year, from $3.8 billion in 2011, thanks largely from the strength of cable networks like USA. But Rick Cotton, general counsel of NBCUniversal, who oversees the company's antipiracy unit, said piracy is a particularly big problem overseas. For example, he said that revenue for its Spanish home-entertainment unit declined 62% between 2009 and 2011, mainly because of piracy, and NBC shut it down.

"Is the evolution of TV and movie viewing going to go legitimately digital or to pirates?" Mr. Cotton asked.

Some TV executives worry that they may follow in the steps of the music industry, which has seen its global sales plummet from some $29 billion in 1999 to about half that today, partly because of its slowness to respond to online demand after pirated songs became widely available on the Internet.

The explosion in pirated TV shows and movies is more recent because of improved Web technology. Faster Internet speeds have eliminated the hourslong process of downloading longer videos from peer-to-peer networks and online storage sites called cyberlockers. Much illegal content has also become available through instant streams, including live sports.

"It has taken the arrival of high-speed broadband to make that attractive," said James Grimmelmann, a piracy expert and professor at New York Law School.

The filing-sharing technology BitTorrent is one tool pirates use to trade videos on websites. BitTorrent, which has many legitimate applications, breaks up large computer files into small pieces so they can zip across the Web. One peer-to-peer site using the technology, ThePirateBay.se, advises people, "Any complaints from copyright and/or lobby organizations will be ridiculed and published at the site." PirateBay, which is the 74th most trafficked site in the world, according to the tracking company Alexa, didn't respond to requests for comment.

The Motion Picture Association of America, Hollywood's lobbying organization, has said that piracy of content costs the economy $58 billion a year, including theft of content, lost entertainment jobs and taxes lost to the federal and state government. Some have called that number exaggerated, while the U.S. Government Accountability Office said in a 2010 report that the economic impact was "extremely difficult" to gauge.

An attempt to attack the problem through Congress, with the Stop Online Piracy Act, failed last January when Silicon Valley companies said, among other things, the bill would limit free expression online.

Without another bill planned, media companies have been working with others in the Web community to battle digital thieves. Google, for instance, just adjusted its algorithm to obscure search results for sites with pirated content. And the five major Internet service providers, including NBC's parent company, Comcast, last week began an alert system. It notifies users suspected of piracy and results in progressive penalties, including in some cases slowed Web access.

Another focus is online-ad networks, which media companies say help finance piracy by placing ads on sites that traffic in unauthorized content. A study last summer, commissioned in part by Google, found that 86% of peer-to-peer sharing sites are dependent on advertising for income.

NBC's special unit said it recently discovered advertisements for Blockbuster and the U.S. Forest Service on cyberlockers that had trafficked in its content without permission. The ads had been supplied through Google's AdSense, which places ads related to keywords.

Blockbuster said it had "policies and controls" to stop improper ad placement, but called it an "ongoing challenge." The Ad Council, which handles ads for the Forest Service, said any time its ads ran on questionable sites, it requested that they be taken down immediately.

After a request from NBC, Google removed the ads, said NBCUniversal's Mr. Cotton.

A Google spokeswoman declined to comment on the ads but said that, as a policy, AdSense ads aren't supposed to be displayed on sites that contain or link to copyright-infringing content. She noted that the company disables "thousands of accounts proactively, as well as at the result of requests."

Since about 2011, NBC has nearly doubled the size of its full-time antipiracy staff to 20, with offices around the world. The core team includes gaming geeks like Mr. Skinner, data crunchers, litigators and techies who know their way around the Web's darker places.

"We're trying to disrupt this world," Mr. Cotton said.

Mr. Skinner's six-person team operates from a room at NBCUniversal's film-studio lot that has the feel of a battleship control center. Its entry door has no sign.

"It's so top secret we can't even find it," one executive joked.

Working around the clock, the team, along with paid outside contractors, blasts off tens of thousands of takedown notices a week to website operators. The team also builds files against suspect websites and sometimes shares them with law enforcement.

Some sites quickly remove the offending videos. Others don't. The team said it has had particular problems getting action from sites located in the Netherlands, China, and Russia.

NBC also applies "content recognition" technology to its programming, which it then passes on to video sites like YouTube to help block illegal uploads. NBC sends out a digital snapshot of the show, which YouTube and other video sites input into their systems, preventing users from putting up the copyrighted show.

"And look at this," said the goateed Mr. Skinner, as he navigated his browser to TV-Links.eu, which provides links to other sites with full-length television shows and movies, among other things. His search for the first episode in the second season of USA's "Suits" only turned up four paid links, where episodes could be properly downloaded. "They hide results from us," said Mr. Skinner.

As a standard defense measure against the kind of robot crawlers used by NBC to trawl for links, some sites block or limit the view of Internet protocol addresses—numbers that identify the computer of each person using the Internet—that visit a site too much. "But now watch," Mr. Skinner said, activating a proxy to hide the identity of his computer, which allowed it to enter the site anonymously.

Suddenly, in addition to the links to paid TV destinations, others appeared for free unauthorized episodes of the show. "A live one!" Mr. Skinner said as he followed one path to a cyberlocker, Movreel.com, where the episode began to play. He shot off a takedown notice to Movreel.

Adrian Constantin, the chairman of Interakt, which owns TV-Links, said while "some infringement" was inevitable, the site responds promptly to takedown requests and bans users whose activities prompt repeated complaints from content owners.

Mr. Constantin added that 5% of his site is user-generated content and that TVLinks "freely sends millions of visitors to websites that belong to content creators or their distributors each month."

A spokesman for Movreel said in an email: "If you own any content being hosted on our site, just send us a valid complaint and the content will be removed."

In 2009, Mr. Skinner's unit sent out 427,000 takedown notices. But last year, as illicit videos became more prevalent, that number grew to 3.9 million. For "Suits," the unit has sent out more than 40,000 notices.

NBC said it is too early to know the effectiveness of takedown notices, though Mr. Cotton calls them a necessary policing move in a vast netherworld. "What would the level of crime be in a city without a police department?"

Occasionally the takedowns escalate into lawsuits. Two years ago, after thousands of notices, NBCUniversal joined a suit with four other Hollywood studios and the Motion Picture Association of America against a file-sharing site called Hotfile, accusing it of stealing copyrighted content "on a staggering scale."

A spokesman for Hotfile said the studios had been provided with a way to take down unauthorized content, and argued that the lawsuit is about the studios fighting technology. A ruling is expected this spring.

NBC recently shared intelligence with the Immigration and Customs Enforcement for an investigation that ended with the closing of 16 websites where fans had sought free broadcasts of live sporting events, including National Hockey League, National Basketball Association and National Football League games. Pirated sports coverage is especially worrisome for networks that spend billions for broadcast rights to athletic events.

Nine of the websites were run by a 28-year-old Michigan man named Yonjo Quiroa, federal prosecutors said in documents, which also said that he had made thousands of dollars off the ads on those sites.

The investigation led to the arrest of Mr. Quiroa for copyright infringement. Soon after, the 16 websites, among them firstrowsports.net, were emblazoned with a forbidding message: "Seized." Later, Mr. Quiroa pleaded guilty to a misdemeanor.

In the end, though, Mr. Cotton acknowledges that the pirates won't be disappearing soon. "What I lose sleep about is that we're moving too slow," he said. "How do we protect ourselves? Where are we in this transition? That is a vital question because our future is digital."
—William Launder and Amir Efrati contributed to this article.
http://online.wsj.com/article_email/...zEwNDMyWj.html





Unauthorised TV Live Streaming is Copyright Breach, Rules European Court

Judgment means that websites showing live television in the UK, such TVCatchup, must get rights clearance from broadcasters
Josh Halliday

Websites that retransmit live TV over the internet without permission from broadcasters are in breach of copyright, Europe's highest court has ruled in a judgment with wide ranging implications.

The landmark ruling published on Thursday by the European court of justice (ECJ) means that dozens of sites showing live TV in the UK, including the London-based TVCatchup.com, must now get rights clearance from broadcasters.

Legal experts said the decision was likely to spark a renewed clampdown by rights holders against similar sites, many of which show live sport.

The case was brought by ITV, Channel 4 and Channel 5 against TVCatchup.com, which streams free-to-air shows from the BBC, ITV and Channel 4.

The ECJ decided that the website, which carries pre-roll advertising before shows, was in breach of a 2001 law that describes the original broadcasters as "authors" of the programming, giving them the exclusive right to approve or restrict its use.

"EU law seeks to establish a high level of protection for authors of works, allowing them to obtain an appropriate reward for the use of those works," the ECJ said in its judgment.

"Television broadcasters may prohibit the retransmission of their programmes by another company via the internet.

"That retransmission constitutes, under certain conditions, a 'communication to the public' of works which must be authorised by their authors."

However, the TVCatchup.com director, Bruce Pilley, insisted that the ruling would impact "barely 30%" of its 12 million registered users.

TVCatchup has argued that licences granted to ITV, Channel 4 and Channel 5 by media regulator Ofcom also apply to subsidiary channels such as its own service.

Pilley said: "TVCatchup.com is here to stay, we are not thinly disguised purveyors of filth, we remain Europe's first and only legal internet cable service and the ECJ opinion affects only a handful of channels we carry."

Until Thursday, it was unclear whether the unauthorised retransmission of live TV online was in breach of copyright laws.

Tony Ballard, a broadcast lawyer and partner at London law firm Harbottle & Lewis, said the ruling was significant.

He added: "It is one in an increasingly long line of decisions by which the court appears to be laying the foundations for a new European legal order in copyright and other forms of intellectual property.

"On the one hand, it is strengthening authors' rights, such as by extending the concept of communication to the public, which subsumes the old broadcasting right, to encompass the activities of those who, like TVC, intervene in the distribution of broadcast services.

"On the other, it is limiting those rights in pursuit of single market principles by outlawing exclusive national licensing, extending the principle of exhaustion of rights to downloads, limiting the amount that copyright proprietors may charge as royalties and balancing owners' rights against those of users."

The European court of justice judgment

1. The concept of 'communication to the public', within the meaning of article 3(1) of Directive 2001/29/EC of the European parliament and of the council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must be interpreted as meaning that it covers a retransmission of the works included in a terrestrial television broadcast where the retransmission is made by an organisation other than the original broadcaster, by means of an internet stream made available to the subscribers of that other organisation who may receive that retransmission by logging on to its server, even though those subscribers are within the area of reception of that terrestrial television broadcast and may lawfully receive the broadcast on a television receiver.

2. The answer to question one is not influenced by the fact that a retransmission, such as that at issue in the main proceedings, is funded by advertising and is therefore of a profit-making nature.

3. The answer to question one is not influenced by the fact that a retransmission, such as that at issue in the main proceedings, is made by an organisation which is acting in direct competition with the original broadcaster.
http://www.guardian.co.uk/media/2013...live-streaming





Five Reasons To Cut The Cable TV Cord

Cable television is expensive, and in today’s world it no longer makes much sense. The fact is, almost everything that’s offered by cable TV is available online, and you’re already paying for your Internet, so why pay for both? I’ve been cable TV-free for over six years now, and I can’t think of a single reason to go back. I’ve found ways to watch essentially all programs I would have ever watched on TV, plus much more, and it only gets easier as streaming services expand and online video takes over. If you’re on the fence about making the switch, here are five reasons why you should:

You won’t lose anything

With the wide selection of online streaming options available today, you will still have access to many of the shows you watch on television. From sports and news to sitcoms and especially movies, it’s all available online. Pre-recorded shows like sitcoms will typically show up one day after they air on TV, but news and sports games tend to stream live. If you’re worried you won’t know where to find your shows, don’t be, because…

Making the switch is easy

If you’re looking for sitcoms, dramas, and other prerecorded shows, Hulu.com will have most of them the day after they air on TV. If it’s not available on Hulu, try checking the network’s website. For example, How I Met Your Mother is not available on Hulu, but can be streamed for free on cbs.com.

For news, always go to the news station’s website. For example, FOX CT news can be streamed for free at ctnow.com.

For sports, it varies, but you can find a great guide to sports streaming websites here.

If you’re looking for movies, Netflix is your best bet. Netflix has a huge selection of old and new movies, as well as past seasons of TV shows, all commercial-free. And just in case you’re worried that the big flat screen TV in your living room will go to waste getting all of your videos from the Internet, don’t be, because…

You can watch Internet video pretty much anywhere.

If you can watch it on your computer, you can watch it on your television. Most TVs and computers these days have HDMI ports on them, which means you can just connect an HDMI cable from your computer to your TV, and the computer will handle the rest. You can grab a 10ft cable from one of my favorite website, monoprice.com, for as little as $5. If your TV or computer doesn’t support HDMI, check out this guide from Best Buy to figure out what cable will work for you (the guide says it’s for laptops, but will work just the same for desktops).

Most streaming services also have apps for Smart TVs and devices that hook up to your TV, like gaming consoles, some Blu-ray players, and other media devices like TiVo and Roku.

In addition to your TV and computer, you can watch online video on tablets and smart phones, making streaming a universally more convenient option. If you’re concerned about the cost of membership to these streaming services, don’t be, because even with those costs…

You’ll save a lot of money

The only streaming services you’ll really need to pay for are Netflix and Hulu (an upgrade to a Hulu Plus account is required to watch many videos and to stream from devices other than a computer). Netflix streaming and Hulu Plus each cost $8 per month, so you’re looking at just $16 per month on top of what you already pay for cable Internet. HowStuffWorks recommends at least a 19mbps download speed for streaming HD video. Using that as a minimum, the average difference in price between standalone Internet and Internet + TV bundles from common cable providers like Cox, Comcast, and Charter is about $60 per month, and that doesn’t even include extra TV fees for HD access, DVR, expanded channels, and more. HD is included with your $8 subscription fees for Netflix and Hulu, and since all of their content is technically “on-demand,” you will already have all the perks of a DVR and then some. That means cutting the cable TV cord will net an average savings of at least $44 per month, or $528 a year!

You may even be able to get those services for less if you have a friend or family member who already subscribes. Most streaming services will allow streaming from multiple locations simultaneously, so you can share accounts with someone and split the costs. Maybe you pay for Hulu and the other person pays for Netflix, for example. However, for some reason this does not seem to work with every account, and be forewarned: most streaming services also have policies against account sharing.

Finally, remember that you’ll also get…

A much larger library to choose from.

Netflix and Hulu alone will provide you with more movies, TV shows, and documentaries than you’ll ever be able to watch in one lifetime, and they’re both constantly adding new content. Talk to anyone who uses Netflix and they’ll tell you about their favorite movies and shows that they never knew existed before they signed up. You can check out streamingsoon.com to see what will be added to Netflix’s library in the near future. And both services offer free trial periods, so you can see how you’ll like the cord-cutting lifestyle before you ever commit to anything.

I should also mention that, according to USA Today, even if you don’t have a cable box or pay for any cable TV service, you can still plug the cable into the back of your TV set and receive local channels for free. That means if you want to continue watching some news, sports, and PTA meetings without hooking up your computer to the TV, you can still do that.
http://courantblogs.com/technology/f...cable-tv-cord/





Google Fiber TV Gets its First 3D Channels: 3net Included with Plan and ESPN3D for an Extra $5 Per Month
Emil Protalinski

Google on Thursday announced Fiber TV has received its first 3D channels: 3net and ESPN3D. The rollout has already begun; existing customers can find 3net on channel 338, and they can call Google to sign up for ESPN3D.

The reason for the difference between the two is simple. 3net is available to all subscribers of Google’s “Gigabit + TV Plan” while ESPN3D will set you back an additional $5 per month (plus tax) on top of your Gigabit + TV plan (which is already $120 per month).

3net features an “extensive library” of original 3D programming, including natural history, documentary, action/adventure, kids and family, lifestyle and cuisine, concerts, movies scripted series, and so on. ESPN3D is meanwhile being pegged as “the industry’s first 24/7 3D sports network” so if you couldn’t care less about the game, you can probably skip this one.

Here’s Google’s pitch:

We’ve said it before, and we’ll say it again — we’re committed to making these qualities that you’ve come to expect from Google Fiber TV better and better. And, thanks to the amazing capacity of Fiber, we can also include some new experiences and tools that will make watching TV even cooler. For example, 3D channels.

Nevertheless, we can’t help but feel this rollout is way too early. Not only do you need to own 3D glasses and a 3D-capable TV, but you also have to have Google Fiber. 3D TV adoption is slow because of the high extra cost versus the arguably small gain, while Google Fiber TV adoption is slow because of the high extra cost and limited availability (don’t live in Kansas City? Tough luck).

Add those two together and you have an incredibly small market. We’re willing to bet the number of people with this setup is less than a thousand, if not under one hundred.

That being said, we have no problem with Google continuing to push forward with Fiber. 3D, or really any content that requires more bandwidth, makes perfect sense for the product.

It’s just important to remember not to get too excited: Fiber really is the beta products of beta products.
http://thenextweb.com/google/2013/03...a-5-per-month/





FreedomPop Launches Free Home Broadband Plan
Sascha Segan

FreedomPop today launched a very low cost home broadband plan for extremely low-intensity users, with 1GB monthly for free and 10GB for $10.

While this won't appeal to anyone who does multimedia streaming - such as most PCMag.com readers - it attacks an under-served customer base of "non-streaming" users, many of whom are still stuck on dialup, FreedomPop CEO Stephen Stokols said.

"While average [U.S. home broadband usage] is 24-28 gigs per month, the average is skewed heavily by the whales. The median is actually 5.8 gigs, which is basically your non-streaming user," Stokols said.

The 1GB of free Internet is basically a teaser; Stokols understands that's less than most people would use at home, although he said dialup users typically consume less than 1GB/month. Rather, FreedomPop aims to disrupt the cable and DSL business with its $10 plan.

"It's a mass-market plan that hits half the country that's using under the 5.8-gig median," Stokols said. "10 gigs for 10 bucks is a massively disruptive play."

He's right. Verizon's HomeFusion broadband sells 10GB for $60/month, while Clear's cheapest wireless home plan is 2GB for $20/month.

FreedomPop's base plan will be extendable by paying $5 for each additional GB beyond 10, or by signing up for promotional marketing offers. Stokols said that partner offers could let subscribers net up to 5GB at a time.

To take advantage of the deal, subscribers will need to buy a $89 home WiMAX modem, the Burst, which includes an 802.11n Wi-Fi router and a single Ethernet output port.

When HomeFusion launched, I brutalized it for having a ridiculously low data cap for the price compared to cable and DSL alternatives. My opinion of FreedomPop is kinder, though, because they're actually charging less money for less service. That's an equation which works.

New Plan, Old Network

How can FreedomPop charge so little? They're using a network that's going out of style. FreedomPop uses Clearwire's WiMAX network, which has been losing rather than gaining customers since Sprint (and now Virgin and Boost) switched away to Sprint's own LTE network. So Clearwire has a lot of spare WiMAX capacity that it has to use somehow, and it's better to get some money than no money.

Speeds on the WiMAX network aren't up to LTE snuff, but they're more than competitive with cheap DSL plans. In our Fastest Mobile Networks 2012 tests, we found the network had an average download speed of about 4Mbps. That's broadband.

According to Stokols, the WiMAX network will remain live until 2015, and FreedomPop will swap subscribers' modems out for LTE modems for free by then.

"We would basically have the same deal with LTE instead of WiMAX," Stokols said.

The WiMAX network's coverage is a bigger concern. Clearwire built out about a third of the country and then stopped because it ran out of money to do more. Even in the cities it covers, it can still be spotty. And as Clearwire builds its new LTE network, it's focused on the densest U.S. cities. So it'll be harder for far suburban and rural residents to take advantage of FreedomPop's deal.

"It's economics; the more rural you get, the more expensive the network will cost," Stokols said.

To sign up, go to www.home.freedompop.com.
http://www.pcmag.com/article2/0,2817,2416257,00.asp





Telecom Firms Seek to Curb Publicly Funded Web Services
Danny Yadron

Sensing a threat to their business model, telecom companies are pushing more states to curb the spread of publicly funded high-speed Internet access, arguing the networks could squash competition.

Time Warner Cable Inc., Windstream Corp., Comcast Corp. and AT&T Inc. are among the companies that have gotten involved in the push in various states. In Georgia this year, Arkansas-based Windstream is leading the charge for a bill that would outlaw new public broadband service in census tracts where a private company offers some kind of broadband.

Small-town mayors and county boards have pushed back, saying they want to build or improve networks because private companies won't.

At least 19 states have placed some sort of limit on publicly funded Internet networks. The spread of such legislation comes as Americans are increasingly relying on high-speed Internet the same way earlier generations relied on telephone service or broadcast television.

In Stewart County, Ga., home to about 6,000 people, about 400 computers at the public elementary and high schools share a single 10 megabit-per-second connection—slow enough that a YouTube video on violin lessons once clogged up the entire network, said Bill Haney, the technology specialist for county schools.

The schools would like to tap into a regional broadband network used by several nearby counties. But the move would be outlawed under the Windstream-backed bill. The cable company is offering a slower connection at $10,000 a month, a more than sevenfold increase from the district's current Internet tab, said Mr. Haney, adding that even with significant federal subsidies, that price would be too high.

"We're just kind of stuck," he said. "I can't blame the cable companies for not wanting to run cables out to the school. It would be so little it wouldn't be worth it."

Some 340 public networks exist in the U.S., according to the Institute for Local Self-Reliance, which favors public broadband.

Spanish Fork, Utah, offers a fairly typical case among successful municipal ventures. The city council in 2001 took out a $7.5 million bond to kick-start the network, which expects a profit of $500,000 after infrastructure investments for fiscal 2014, and expects to pay off its debts by 2015, a city spokesman said. Homes can tap into the high-speed network for $28 to $75 a month, depending on their service package.

In the 2009 stimulus law, the Obama administration and Congress allotted some $7.2 billion for broadband expansion through public projects and grants to private companies.

Cable companies say they don't oppose public networks in otherwise unserved areas. But they say the networks can represent unfair competition, using cheap public financing and tax subsidies to block private enterprise. There are also cases where local governments haven't been able to financially sustain their own broadband services.

"We very much agree with the policy direction of extending broadband," said Eric Einhorn, senior vice president of government affairs and strategy at Windstream. "But from our perspective, requiring private industry to compete against government-owned networks is not the way to go."

In North Carolina, Time Warner Cable and the state industry trade group successfully pushed for a 2011 law that makes it difficult to create new public networks or expand the state's existing ones. In Arkansas, which outright banned most new public broadband networks in 2011 unless the area already owns the electrical utility, AT&T and others played an integral role.

"Deployment of government-owned networks should be permitted to those who lack access and where there is no private alternative," an AT&T spokesman said. "The rules of the road should be fair and promote a level competitive playing field for all providers."

These days, about 93% of U.S. homes have access to high-speed Internet, according to the National Cable & Telecommunications Association. That makes most public networks redundant, the industry argues.

But as businesses and home subscribers increasingly use the Web for streaming video and other data-guzzling applications, the laws also prevent towns from upgrading service when existing carriers feel it is unprofitable.

In 2011, officials in Fayetteville, N.C., mulled expanding a fiber network owned by the city's electric utility so it could provide superfast Internet access for its residents. Time Warner, one of the local broadband companies, protested and at the same time helped push a bill through the state legislature that effectively blocked city officials from pursuing the matter further, Deputy City Manager Kristoff Bauer said.

Time Warner has since expanded its Fayetteville services to previously unserved residents and offers most residents a broadband connection for $54.95 a month, with discounts for homes that subscribe to other services. The city-run connection could have offered a much faster connection a slightly lower price, Mr. Bauer said.

Time Warner spokeswoman Melissa Buscher said the law didn't ban the city's plan but simply meant it couldn't take unfair advantage of city resources. "We just want them to operate under the same rules," she said.

Federal regulators lack jurisdiction over state rules, but the issue has drawn the attention of Federal Communications Commission Chairman Julius Genachowski. "If a community can't gain access to broadband services that meet its needs, then it should be able to serve its own residents directly," Mr. Genachowski said in a written statement last month.

In Georgia, state Rep. Don Parsons, a Republican, said he supported the restrictions on public networks to protect the private sector, but he said the question was a close call. "This is a problem," he said. "These people want broadband."
http://online.wsj.com/article_email/...zEwNDcyWj.html





Chinese Physicists Measure Speed of Einstein’s ‘Spooky Action at a Distance’: At Least 10,000 Times Faster than Light
Sebastian Anthony

A team of Chinese physicists have clocked the speed of spooky action at a distance — the seemingly instantaneous interaction between entangled quantum particles — at more than four orders of magnitude faster than light. Their equipment and methodology doesn’t allow for an exact speed, but four orders of magnitude puts the figure at around 3 trillion meters per second.

Spooky action at a distance was a term coined by Einstein to describe how entangled quantum particles seem to interact with each other instantaneously, over any distance, breaking the speed of light and thus relativity. As of our current understanding of quantum mechanics, though, it is impossible to send data using quantum entanglement, preserving the theory of relativity. A lot of work is being done in this area, though, and some physicists believe that faster-than-light communication might be possible with some clever manipulation of entangled particles.

Now, thanks to these Chinese physicists — the same ones who broke the quantum teleportation distance record last year — we know that spooky action at a distance has a lower bound of four orders of magnitude faster than light, or around 3 trillion meters per second. We say “at least,” because the physicists do not rule out that spooky action is actually instantaneous — but their testing equipment and methodology simply doesn’t allow them to get any more accurate.

To get this figure, the physicists entangled pairs of photons at a base station, and then transmitted half of each pair to two receiving sites. The receiving sites were 15.3 kilometers (9.5mi) apart, and aligned east-west so as to minimize the interference from the Earth’s rotation (which is significant, when measuring speed on this scale). One half of the pair was then observed, and the time for the other half to assume the same state is measured. This process was repeated continuously for 12 hours to generate enough data to accurately divine the speed of spooky action.

According to the physicists, other research groups have tried to measure the speed of spooky action before, but they’ve all had locality loopholes — flaws in the methodology that undermine the quantum nonlocality that the experiment requires. This time, the physicists claim, all the loopholes have been closed, and that their measurement of at least 3 trillion meters per second is accurate.

Where do we go from here? Good question. In recent months we’ve seen a group of international scientists teleport entangled photons over 143km (89mi), the first ever teleportation between macroscopic objects, and the first fiber optic network that can carry conventional data and quantum data. We’re now at the point where a quantum internet — either using conventional fiber or satellites — is starting to become feasible. If it turns out that we actually can communicate data via quantum entanglement, we now know that it’ll be much faster than the speed of light.

At the very least, this is one of the first observations of the subluminal universe — a significant event for all scientists everywhere.
http://www.extremetech.com/extreme/1...ter-than-light





Wozniak’s Email Tax: Good Sense or Nonsense?
Emilie Raguso

Earlier this week, readers reacted with skepticism after Berkeley City Councilman Gordon Wozniak suggested that taxing email might be one way to raise money for the cash-strapped U.S. Postal Service.

Wozniak told the council: “There should be something like a bit tax. I mean a bit tax could be a cent per gigabit and they would still make, probably, billions of dollars a year… And there should be, also, a very tiny tax on email,” perhaps one-hundredth of a cent. He said this would discourage spam and not have much impact on the typical Internet user. Wozniak went on to suggest a sales tax on internet transactions that could help, in part, fund “vital functions that the post office serves.”

One Berkeleyside Twitter follower called the idea “unworkable insanity.” Wrote another: “This is just insane. Does the esteemed councilman have the first clue how the Internet works?”

But there’s a history to this idea, however outlandish as it might sound to some.

The United Nations Development Program examined such a tax in its 1999 Human Development Report, Globalization With a Human Face, as a way to fund “the global communications revolution.” UNDP calculated that in 1996, such a tax would have raised $70 billion globally.

The New York Times took a brief look at the concept in 2009. Summing up an opinion piece by lawyer Edward Gottesman in the British magazine Prospect (behind a paywall), The Times said Gottesman thought such a tax could be used “to finance the expansion of bandwidth that the Web desperately needs.” He had suggested charging “a few cents per e-mail to cut down on the estimated 90 percent of it that is unwanted spam.”

“Opponents will argue that collecting the tax is impossible or unfair. Yet the status quo is unworkable,” wrote Gottesman. “Since early 2007 the global volume of spam has more than trebled. To stop this blizzard of unwanted messages, ISPs and most large businesses spend a sizeable chunk of their IT budget filtering out obvious junk. Despite this, most of us spend time each day clicking ‘delete’—and the deluge is getting worse. A unit tax on email would stop most spam. A peddler sending 1m messages a day hawking cross-border pharmaceuticals, for instance, would have to balance the uncertain revenues against the tax cost of £100,000 or $150,000 a week. Trying to con people out of money or their bank password would become a risky gamble.”

Advocates of such a tax say that ISPs could levy the tax as part of the monthly bill they charge users.

Harvard Law School’s Jonathan Zittrain, who specializes in cyberlaw and Internet governance, told Berkeleyside today that an email tax was a “terrible idea.”

“To the extent that the cheap flow of flat rate first class mail has positive effects for society at large, the insistence that the Post Office be revenue-neutral may not make sense,” Zittrain said. “Taxing email as an alternative, however, is a terrible idea: bad in theory and truly unworkable in practice. There have been proposals to see fees imposed on email by service providers — or recipients themselves — as a way of minimizing spam, but to impose an external tax on it when there are ready substitutes (Facebook messaging, anyone?), and when collection would be a nightmare, seems a non-starter. There is no reason to tax electronic mail users in particular to save the Post Office, any more than it would make sense to tax coffee drinkers to do it.”

On Wednesday, Wozniak said that, though he’s no expert on Internet taxes, he thinks the idea is worth serious consideration.

“Since many billions of emails are sent every day, an email tax could raise substantial sums,” he said, via email. “Most of the revenue raised could be used to fund the managing and maintaining the Internet Superhighway and a portion to subsidize snail mail. Think of it as analogous to the gas tax used to maintain our physical highways.”

He went on to say that, currently, an email tax is banned by Congress, so a major, top-level policy shift would have to occur before the idea could be put into practice.

In 1998, President Bill Clinton signed into law the Internet Tax Freedom Act ”to promote and preserve the commercial, educational, and informational potential of the Internet,” according to Wikipedia. The law forbids federal, state and local governments from taxing web access and “imposing discriminatory Internet-only taxes such as bit taxes, bandwidth taxes, and email taxes.”

The law has been extended several times since its inception, and currently includes a moratorium through November 2014. A commission authorized by the 1998 law was charged with studying national tax policy related to the Internet; its final report opposed Internet taxation, and took a variety of other policy positions.

Conflict alert: Berkeleyside sends out nearly 4,000 emails a day to subscribers to our daily newsletter (to say nothing of the many emails the Berkeleyside staff sends each day). At Wozniak’s rate, our daily email would be taxed about $125 a year.
http://www.berkeleyside.com/2013/03/...e-or-nonsense/





As Hacking Against U.S. Rises, Experts Try to Pin Down Motive
Nicole Perlroth, David E. Sanger and Michael S. Schmidt

When Telvent, a company that monitors more than half the oil and gas pipelines in North America, discovered last September that the Chinese had hacked into its computer systems, it immediately shut down remote access to its clients’ systems.

Company officials and American intelligence agencies then grappled with a fundamental question: Why had the Chinese done it?

Was the People’s Liberation Army, which is suspected of being behind the hacking group, trying to plant bugs into the system so they could cut off energy supplies and shut down the power grid if the United States and China ever confronted each other in the Pacific? Or were the Chinese hackers just trolling for industrial secrets, trying to rip off the technology and pass it along to China’s own energy companies?

“We are still trying to figure it out,” a senior American intelligence official said last week. “They could have been doing both.”

Telvent, which also watches utilities and water treatment plants, ultimately managed to keep the hackers from breaking into its clients’ computers.

At a moment when corporate America is caught between what it sees as two different nightmares — preventing a crippling attack that brings down America’s most critical systems, and preventing Congress from mandating that the private sector spend billions of dollars protecting against that risk — the Telvent experience resonates as a study in ambiguity.

To some it is prime evidence of the threat that President Obama highlighted in his State of the Union address, when he warned that “our enemies are also seeking the ability to sabotage our power grid, our financial institutions, our air traffic control systems,” perhaps causing mass casualties. Mr. Obama called anew for legislation to protect critical infrastructure, which was killed last year by a Republican filibuster after intensive lobbying by the Chamber of Commerce and other business groups.

But the security breach of Telvent, which the Chinese government has denied, also raises questions of whether those fears — the subject of weekly research group reports, testimony and Congressional studies — may be somewhat overblown, or whether the precise nature of the threat has been misunderstood.

American intelligence officials believe that the greater danger to the nation’s infrastructure may not even be China, but Iran, because of its avowal to retaliate for the Stuxnet virus created by the United States and Israel and unleashed on one of its nuclear sites. But for now, these officials say, that threat is limited by gaps in Iranian technical skills.

There is no doubt that attacks of all kinds are on the rise. The Department of Homeland Security has been responding to intrusions on oil pipelines and electric power organizations at “an alarming rate,” according to an agency report last December. Some 198 attacks on the nation’s critical infrastructure systems were reported to the agency last year, a 52 percent increase from the number of attacks in 2011.

Researchers at McAfee, a security firm, discovered in 2011 that five multinational oil and gas companies had been attacked by Chinese hackers. The researchers suspected that the Chinese hacking campaign, which they called Night Dragon, had affected more than a dozen companies in the energy industry. More recently, the Department of Energy confirmed in January that its network had been infiltrated, though it has said little about what damage, if any, was done.

But security researchers say that the majority of those attacks were as ambiguous as the Telvent case. They appeared to be more about cyberespionage, intended to bolster the Chinese economy. If the goal was to blow up a pipeline or take down the United States power grid, the attacks would likely have been of a different nature.

In a recent report, Critical Intelligence, an Idaho Falls security company, said that several cyberattacks by “Chinese adversaries” against North American energy firms seemed intended to steal fracking technologies, reflecting fears by the Chinese government that the shale energy revolution will tip the global energy balance back in America’s favor. “These facts are likely a significant motivation behind the wave of sophisticated attacks affecting firms that operate in natural gas, as well as industries that rely on natural gas as an input, including petrochemicals and steelmaking,” the Critical Intelligence report said, adding that the attack on Telvent, and “numerous” North American pipeline operators may be related.

American intelligence experts believe that the primary reason China is deterred from conducting an attack on infrastructure in the United States is the simple economic fact that anything that hurts America’s financial markets or transportation systems would also have consequences for its own economy. It could interrupt exports to Walmart and threaten the value of China’s investments in the United States — which now include a new, big investment in oil and gas.

Iran, however, may be a different threat. While acknowledging that “China is stealing our intellectual property at a rate that qualifies as an epidemic,” Representative Mike Rogers, the Michigan Republican who chairs the House Intelligence Committee, added a caveat in an interview on Friday. “China is a rational actor,” he said. “Iran is not a rational actor.”

A new National Intelligence Estimate — a classified document that has not yet been published within the government, but copies of which are circulating for final comments — identifies Iran as one of the other actors besides China who would benefit from the ability to shut down parts of the American economy. Unlike the Chinese, the Iranians have no investments in the United States. As a senior American military official put it, “There’s nothing but upside for them to go after American infrastructure.”

While the skills of Iran’s newly created “cybercorps” are in doubt, Iranian hackers gained some respect in the technology community when they brought down 30,000 computers belonging to Saudi Aramco, the world’s largest oil producer, last August, replacing their contents with an image of a burning American flag.

The attack did not affect production facilities or refineries, but it made its point.

“The main target in this attack was to stop the flow of oil and gas to local and international markets and thank God they were not able to achieve their goals,” Abdullah al-Saadan, Aramco’s vice president for corporate planning, told Al Ekhbariya television.

President Obama has been vague about how the United States would respond to such an attack. No one in the administration argues that the United States should respond with cyber- or physical retaliation for the theft of secrets. Attorney General Eric H. Holder Jr. has made clear that would be dealt with in criminal courts, though the prosecutions of cybertheft by foreign sources have been few.

But the question of whether the president could, or should, order military retaliation for major attacks that threaten the American public is a roiling debate.

“Some have called for authorizing the military to defend private corporate networks and critical infrastructure sectors, like gas pipelines and water systems,” Candace Yu, who studies the issue for the Truman National Security Project, wrote recently. “This is unrealistic. The military has neither the specialized expertise nor the capacity to do this; it needs to address only the most urgent threats.”

But the administration has failed to convince Congress that the first line of defense to avert catastrophic cyberattack is to require private industry — which controls the cellphone networks and financial and power systems that are the primary target of infrastructure attacks — that it must build robust defenses.

A bill containing such requirements was defeated last year amid intense lobbying from the United States Chamber of Commerce and others, which argued that the costs would be prohibitive. Leading members of Congress say they expect the issue will come up again in the next few months.

“We are in a race against time,” Michael Chertoff, the former secretary of homeland security, said last week. “Most of the infrastructure is in private hands. The government is not going to be able to manage this like the air traffic control system. We’re going to have to enlist a large number of independent actors.”

The administration’s cybersecurity legislation last year failed despite closed-door simulations for lawmakers about what a catastrophic attack would look like.

During one such simulation that the Department of Homeland Security allowed a New York Times reporter to view at a department facility in Virginia, a woman played the role of an “evil hacker” who successfully broke into a power plant’s network. To get in, the hacker used a method called “spearphishing,” in which she sent a message to a power plant employee that induced the employee to click on a link to see pictures of “cute puppies.”

When the employee clicked on the link, it surreptitiously allowed the hacker to gain access to the employee’s computer, enabling her to easily turn the switches to the plant’s breakers on and off.

Although the officials providing the briefing acknowledged that the simulation was a bit simplistic, their message was clear: with so many vulnerable critical infrastructure systems across the country, such an attack could easily occur, with huge consequences. No one rules out that scenario — whatever the current motivations and abilities of countries like China and Iran.

“There are 12 countries developing offensive cyberweapons; Iran is one of them,” James Lewis, a former government official and cybersecurity expert at the Center for Strategic and International Studies in Washington, said at a security conference in San Francisco. Those countries have a long way to go, he said, but added: “Like nuclear weapons, eventually they’ll get there.”

Nicole Perlroth and Michael S. Schmidt reported from San Francisco, and David E. Sanger from Washington.
https://www.nytimes.com/2013/03/04/u...a-or-iran.html





Where Apps Meet Work, Secret Data Is at Risk
Quentin Hardy

As is the case with many busy people, Delyn Simons’s life has become an open phone app of commingled corporate and personal information.

“I’ve got Dropbox, Box, YouSendIt, Teambox, Google Drive,” says Ms. Simons, a 42-year-old executive, naming just five of the many services on her iPhone to store memos, spreadsheets, customer information and soccer schedules.

She and her colleagues at Mashery, a 170-employee company that helps other companies build even more apps, also share corporate data on GroupMe, Evernote, Skype and Google Hangouts. “From the standpoint of corporate I.T.,” she says, “my team is a problem.”

And how. “My peers are killing me,” says John Oberon, Mashery’s information technology chief, who is supposed to keep track of company data. While the company’s most confidential information is encrypted and available only to authorized executives, he said, “there’s only so much you can do to stop people from forwarding an e-mail or storing a document off a phone.”

Chinese hackers are one problem. But so are employees who put company information online with their smartphones and tablets.

Once the data leaves the corporate network, protecting it becomes much harder. Searching for the name of almost any large company, plus the word “confidential,” yields supposedly secret documents that someone has taken from the company network and published.

Netflix, the streaming video service, recently found employees using 496 smartphone apps, primarily for data storage, communications and collaboration. Cisco Systems, which powers much of the Internet with computer networking gear, found several hundred apps, as well as services for shopping and personal scheduling, touching its own network via employees.

“People are going to bring their own devices, their own data, their own software applications, even their own work groups,” drawing off friends and contractors at other companies, said Bill Burns, the director of information technology infrastructure at Netflix. “If you try and implant software that limits an employee’s capabilities, you’re adding a layer of complexity.”

Almost no service is invulnerable. In 2011, Chinese hackers obtained access to hundreds of United States government accounts on Google’s Gmail. Last July, Dropbox, one of the most widely used storage services, reported a loss of data from a large number of customers. Without special instructions, customer sales information in the online service of Salesforce.com can be moved to private accounts at Box. On Saturday, Evernote said user names, e-mail address and encrypted passwords had been stolen in an attack, requiring the passwords of more than 50 million accounts to be reset.

In 2011, Juniper Networks found more than 28,000 samples of mobile malware, mostly for capturing and transferring information like passwords. In January this year, Florida’s Juvenile Justice Department reported that 114,538 youth and employee records had disappeared when a mobile storage device with no password was stolen. The state will pay for a year of credit monitoring for everyone whose data was lost.

Last September, a customer notified Rite Aid that he could obtain other customers’ names, addresses and prescription records from the company’s mobile app. (Rite Aid says the problem has been fixed and that it is not aware of any data loss.)

Even without proof of compromised accounts, such losses can cost a company both money and reputation. According to the Securities and Exchange Commission, unauthorized disclosures of confidential information, whether from unsecured devices, leaky apps or poor cloud security, must be announced publicly if the information could affect a company’s stock price.

Some apps onto which employees may move company information, like Facebook and Amazon, are well known. Others, like Remember the Milk, used for completing tasks, or CloudElephant, a data backup service, are news even to some of the experts in I.T. Skyhigh Networks, which recently started monitoring personal use of apps, has counted more than 1,200 services used in corporate networks from personal devices.

Skyhigh signs up for each service, along with 1,000 others that have not yet touched a corporate network, and researches them for security issues, like whether people can share data anonymously, or how easy it is to get inside the system and obtain another customer’s data. The company then tunes a customer’s corporate network to allow services to have different degrees of access to information.

“We have to be careful how we inspect for security vulnerabilities, since we don’t want to get arrested ourselves,” says Rajiv Gupta, the chief executive at Skyhigh. “What makes an iPhone interesting and scary is what happens in the cloud, and how I can upload things with one device and then download them to another from someplace else.”

The problem of data leakage is as old as someone taking a carbon copy home on the weekend.

What is different today is how people can take data with a finger swipe, and how little they know about whether a service has malware or how much it can see of what is going on elsewhere in a phone. Companies do not want to stand in the way of “life splicing,” as the intermingling of home and work tasks is known, because it mostly plays in a company’s favor. They just want more security.

Besides Skyhigh’s catalogs and controls over different apps, a system called Websense allows companies to ensure that office access to LinkedIn is only for research on people and companies, not for job applications.

Companies also know little about what ad hoc corporate computing really costs, as groups buy their own mobile work productivity apps or rent cloud computing and data storage from the likes of Amazon Web Services.

“The popular term now when people bypass the in-house organization is ‘shadow I.T.,’ ” says Sunny Gupta, chief executive of Apptio, which helps companies calculate their total corporate I.T. spending. If the spending is high enough, companies look for volume discounts on their unofficial computing.

In a 2012 survey of information technology managers by PricewaterhouseCoopers, 47 percent of respondents said that at least half of corporate I.T. spending was now shadow I.T.
https://www.nytimes.com/2013/03/04/t...obile-age.html





Web Privacy Becomes a Business Imperative
Somini Sengupta

Privacy is no longer just a regulatory headache. Increasingly, Internet companies are pushing each other to prove to consumers that their data is safe and in their control.

In some instances, established companies are trying to gain market advantage by casting themselves as more privacy-friendly than their rivals. For example, Mozilla, an underdog in the browser market, suggested last week that it would allow its users to disable third-party tracking software altogether.

At the same time, Web platform companies are setting limits on other companies with which they do business. Last year, for instance, Apple began requiring applications in its operating system to get permission from users before tracking their location or peering into calendars and contacts stored on an iPhone. Also, a host of companies big and small are offering a variety of privacy tools like ways to encode Facebook posts and ways to secure personal data stored in the cloud.

During a panel at the RSA Conference, a security-focused industry gathering here last week, Brendon Lynch, chief privacy officer at Microsoft, declared that companies like his had come to appreciate the “market forces at play with privacy.”

“It’s not just privacy advocates and regulators pushing,” Mr. Lynch said. “Increasingly, people are concerned more about privacy as technology intersects their life.”

That statement might sound somewhat odd to those who recall Microsoft’s troubles 10 years ago with European regulators. At that time, it was compelled to make substantial changes to how its online login system, .Net Passport, stored addresses, ages and other personal details.

Nonetheless, earlier this year, Microsoft, based in Redmond, Wash., signaled its sensitivity to user privacy by turning on, by default, an antitracking signal in its latest Internet Explorer browser. Microsoft also took aim at its rival Google with a marketing campaign declaring that consumers were being “scroogled” with targeted advertisements based on their e-mails and search histories.

Mr. Lynch’s counterpart at Google, Keith Enright, called that marketing campaign “intellectually dishonest.” At the RSA Conference, Mr. Enright said Google took pains to secure consumer information and simplify privacy settings.

Joel R. Reidenberg, a professor at Fordham Law School, said Microsoft had made a 180-degree turn in emphasizing consumer data protection. “You’re seeing more companies trying to do that — develop privacy protecting services,” said Professor Reidenberg, whose Center on Law and Information Policy at Fordham has received donations from both Microsoft and Google. “Platforms recognize they have to deal with privacy. They’re looking at how they can be competitive.”

To some degree, these developments signal that the industry is working hard to stave off government regulation, which is moving at a glacial pace anyway. There seems to be no movement on broad privacy legislation on Capitol Hill, and no consensus has been reached on standards for “Do Not Track,” a browser setting that would let Internet users indicate that they did not want their activity tracked by marketers.

Advertisers have said openly that they will not stop tracking just because a consumer sends a Do Not Track signal through his or her browser. Facebook has said it needs more clarity on whether a Do Not Track signal applies, for instance, to social plug-ins like the Facebook “like” button, which is integrated into millions of Web sites.

Still, companies are refining the controls users have over their data, on mobile devices as well as on desktop computers.

In addition to requiring applications to seek user permission before tracking location, Apple has included in its latest mobile operating system a way for users to disable or reset a series of digits that identify a particular device for tracking purposes. The Advertising Identifier, as it is called, replaces what was an immutable unique device identifier. It allows app developers to monitor user behavior, but it also gives consumers the option of turning it off.

Facebook requires applications in its App Center to offer customers a privacy policy, and last year it introduced privacy controls that let users fine-tune who sees which posts and pictures.

In 2011, Google sought to distinguish its social networking tool, Google Plus, as privacy-sensitive. It introduced the idea of “circles” as a way to limit sharing certain things with certain people.

Market rivalry does not mean that companies are not worried about regulatory scrutiny of their use of personal data. Facebook agreed to 20 years of audits by the Federal Trade Commission after the agency found that the company had deceived consumers by making data public that they had intended to be private. In a measure of change, Facebook began nudging its users to review their privacy settings before they could start using the new search tool the company introduced this year.

“What does privacy mean?” Facebook’s chief privacy officer, Erin Egan, asked at the RSA Conference. “It’s understanding what happens to your data and having the ability to control it.”

That very imperative seems to be buoying a cottage industry of privacy start-ups. A Boston-based company, Abine, is testing what is effectively the opposite of a Facebook single sign-in for the Web. Instead of exposing your Facebook login credentials to dozens of Web sites, the company offers a proxy e-mail address or phone number for every transaction. You sign in with the e-mail address and a password you remember; Abine creates one address for an e-commerce site you visit, another for a news site, another for a dating site.

Abine offers the basic service for free and plans to charge a monthly fee for more advanced features.

Another company, Wave Systems, showed off its new consumer privacy tool on the RSA exhibition floor last week. Named Scrambls, it encrypts a social network post or e-mail, effectively locking it, and lets the author choose who should have a key to read it. The company plans to market Scrambls to parents, among others, as “a seat belt” to protect their children on social media. For now, it is free.

Whether Internet users are ready to pay to protect their personal data is unclear, though surveys have repeatedly pointed to consumer anxiety.

In a national survey last year, Forrester Research found that one in three consumers were concerned about companies having access to their behavioral data. More than 40 percent said they had stopped short of completing a transaction on a Web site because of something they read in a privacy policy.

Consumer trust is an increasingly vital commodity for Web companies, said Fatemeh Khatibloo, a Forrester analyst. “There’s enough market traction and momentum from the consumer side and the business side to drive this forward,” Ms. Khatibloo said.

Mozilla, which makes the Firefox browser, ruffled the feathers of the online advertising industry when it announced that it was testing a new tool that blocked third-party tracking software, known as cookies. The company said it had not made a final decision on whether to incorporate the tool into its browser, though some version of it was likely to be included.

Already, said Alex Fowler, Mozilla’s chief privacy officer, nearly 12 percent of desktop users of Firefox and 14 percent of Firefox users on Google’s Android mobile operating system have turned on the Do Not Track signal. “They’re asking for a different level of privacy on your service,” he said. “You have to listen to that. It’s critical to your business.”
https://www.nytimes.com/2013/03/04/t...-friendly.html





Texas Proposes One of Nation’s “Most Sweeping” Mobile Privacy Laws

If the bill passes Austin, Texas could lead the nation in mobile privacy protection.
If signed into law, cops would finally need a warrant to get location data.
Cyrus Farivar

Privacy experts say that a pair of new mobile privacy bills recently introduced in Texas are among the “most sweeping” ever seen. And they say the proposed legislation offers better protection than a related privacy bill introduced this week in Congress.

If passed, the new bills would establish a well-defined, probable cause-driven warrant requirement for all location information. That's not just data from GPS, but potentially pen register, tap and trace, and tower location data as well. Such data would be disclosed to law enforcement "if there is probable cause to believe the records disclosing location information will provide evidence in a criminal investigation."

Further, the bills would require an annual transparency report from mobile carriers to the public and to the state government.

Under current federal case law and statute, law enforcement generally has broad warrantless powers to not only track suspects in real-time based on their phone data, but also to access records of where and when calls were made or text messages were sent or received—and all of this is provided by the carriers.

“Location information can reveal a great deal about an individual’s professional and personal life—her friends and associates, her participation in political or religious activities, her regular visits to a health clinic or support group, and more,” said Chris Conley, an attorney with the ACLU of Northern California.

“That’s why we think it is essential that the government get a search warrant, approved by a judge, before demanding this kind of information from cell phone providers. The Texas bill would require just that. In addition, the Texas bill would also require companies to report how often they receive such demands from law enforcement and how much information they disclose. This kind of transparency is essential to carry on an informed dialog about appropriate law enforcement powers in the modern world.”

Broad powers

The unanimous 2012 Supreme Court decision on United States v. Jones ruled that law enforcement did not have the authority to track a suspect using a GPS tracking device put on a car without a warrant. But cops frequently use similar tactics with lower legal standards, including using the suspect’s own phone against her. Last year, the American Civil Liberties Union sued the Department of Justice to release GPS tracking-related memos.

The bills, which were introduced in the Texas House of Representatives and the Texas Senate last month, are endorsed by the Texas Electronic Privacy Coalition. That's an umbrella group that includes the Electronic Frontier Foundation-Austin, Grits for Breakfast, Texans for Accountable Government, and the ACLU of Texas. They will need to pass both houses and be signed by the state governor, Rick Perry, before becoming law.

Ars reached out to the four major mobile carriers in the United States—AT&T, Verizon, Sprint, and T-Mobile—for their comment on this new bill. None of them responded on Wednesday, except for Verizon, whose spokesperson, Debi Lewis, said the company had no comment.

One bill at a time

Not surprisingly, other civil libertarian and digital rights groups are looking with a hopeful eye that such legislation can influence other states, and perhaps the federal government. According to the ACLU, 11 states have already introduced similar bills this year.

“What the states do on this issue will certainly influence what Congress does,” said Gregory Nojeim, senior counsel at the Center for Democracy and Technology. “It's clear to me that because the location of a cell phone is mobile and because phones cross state lines routinely it's probably that if the states start acting then Congress would need to enact a uniform rule.”

Various states have tried to implement versions of such privacy protections in the past. California’s was famously vetoed by the governor in September 2012. Sen. Al Franken (D-MN) introduced legislation in 2011 that would have also imposed similar restrictions, but none as strong as what’s been proposed in Texas.

“Although Senator Franken’s Location Privacy Protection Act of 2011 and these Texas bills all seek to protect cell phone user’s location information, the Texas bills differ from Franken’s bill in scope, function, and specific objective,” Woodrow Hartzog, an affiliate scholar at Stanford Law School, told Ars. “Senator’ Franken’s bill is narrowly tailored to ensure that companies obtain consent before collecting or sharing location data from a consumer’s mobile device. The Texas bills are broadly aimed at the government’s collection of location information.”

He added that these bills were among the “most sweeping mobile location protection bills I've seen,” and wondered if and to what degree they will become law.
http://arstechnica.com/tech-policy/2...-privacy-laws/





Google Says the FBI Is Secretly Spying on Some of Its Customers
David Kravets

The terrorists apparently would win if Google told you the exact number of times the Federal Bureau of Investigation invoked a secret process to extract data about the media giant’s customers.

That’s why it is unlawful for any record-keeper to disclose it has received a so-called National Security Letter. But under a deal brokered with the President Barack Obama administration, Google on Tuesday published a “range” of times it received National Security Letters demanding it divulge account information to the authorities without warrants.

It was the first time a company has ever released data chronicling the volume of National Security Letter requests.

National Security Letters allow the government to get detailed information on Americans’ finances and communications without oversight from a judge. The FBI has issued hundreds of thousands of NSLs and has even been reprimanded for abusing them. The NSLs are written demands from the FBI that compel internet service providers, credit companies, financial institutions and businesses like Google to hand over confidential records about their customers, such as subscriber information, phone numbers and e-mail addresses, websites visited and more as long as the FBI says the information is “relevant” to an investigation.

In each year from 2009 to 2012, Google said it received “0-999″ National Security Letters.

But in its talks with the authorities over releasing figures, Google said national security was on the mind of the Obama administration.

“You’ll notice that we’re reporting numerical ranges rather than exact numbers. This is to address concerns raised by the FBI, Justice Department and other agencies that releasing exact numbers might reveal information about investigations. We plan to update these figures annually,” Richard Salgado, a Google legal director, wrote in a blog post.

Salgado was not available for comment.

What makes the government’s position questionable is that it is required by Congress to disclose the number of times the bureau issues National Security Letters. In 2011, the year with the latest available figures, the FBI issued 16,511 National Security Letters pertaining to 7,201 different persons.

Google said the number of accounts connected to National Security letters ranged between “1000-1999″ for each of the reported years other than 2010. In that year, the range was “2000-2999.”

Google noted that the FBI may “obtain ‘the name, address, length of service, and local and long distance toll billing records’ of a subscriber to a wire or electronic communications service. The FBI can’t use NSLs to obtain anything else from Google, such as Gmail content, search queries, YouTube videos or user IP addresses.”

Google often must disclose that data via other means, as described here.

Under the Patriot Act, Google or others who receive a NSL must disclose the sought-after information if the authorities say the request is “relevant to an authorized investigation to protect against international terrorism or clandestine intelligence activities.”

National Security Letters are a powerful tool because they do not require court approval, and they come with a built-in gag order, preventing recipients from disclosing to anyone that they have even received an NSL. An FBI agent looking into a possible anti-terrorism case can self-issue an NSL to a credit bureau, ISP or phone company with only the sign-off of the special agent in charge of their office.

What’s more, the lack of court oversight raises the possibility for extensive abuse.

In 2007 a Justice Department Inspector General audit found that the FBI had indeed abused its authority and misused NSLs on many occasions. After 9/11, for example, the FBI paid multimillion-dollar contracts to AT&T and Verizon requiring the companies to station employees inside the FBI and to give these employees access to the telecom databases so they could immediately service FBI requests for telephone records. The IG found that the employees let FBI agents illegally look at customer records without paperwork and even wrote NSLs for the FBI.

That said, we should applaud Google for trying to be transparent on the issue, regardless of the Obama administration’s preposterous national-security concerns.
http://www.wired.com/threatlevel/201...?cid=co6199824





Google Services Should Not Require Real Names: Vint Cerf
Gerry Shih

In the face of increasing government-led crackdowns on social media, Google Inc (GOOG.O) should not force Internet users to reveal their real names for some services, including its Google+ social network, said Vint Cerf, a senior Google executive known as a "father of the Internet."

In an interview with Reuters, Cerf acknowledged that the search giant's sweeping push in the past 18 months to institute real-name authentication for Google+ and other services has sparked intense debate within its Mountain View, California, headquarters. But he argued that current name policy, which allows for some users to display pseudonyms, offers adequate "choice" in how users choose to represent themselves.

Over the past year, the company has strongly encouraged users to merge their accounts on YouTube, Gmail and other Google properties into a single Google+ identity, the company's social network offering that asks users to use the "common name" they are known by in the real world.

"Using real names is useful," Cerf said. "But I don't think it should be forced on people, and I don't think we do."

The comments from one of the Internet industry's most high-profile thinkers come at a time when the debate over the future of online anonymity is roiling tech circles, with the outcome bearing profound implications for Internet use around the world.

Google and Facebook Inc (FB.O) are leading the charge to encourage Internet users to log on and carry out their digital lives with their offline identities, arguing that greater transparency enhances online transactions and communication.

But Cerf recognized using real names could land social media users under oppressive regimes in "fatal trouble," and Google will not enforce its policy in such instances. But in many other cases, user authentication should be promoted, he said.

"Anonymity and pseudonymity are perfectly reasonable under some situations," Cerf said. "But there are cases where in the transactions both parties really need to know who are we talking to. So what I'm looking for is not that we shut down anonymity, but rather that we offer an option when needed that can strongly authenticate who the parties are."

In the past few months Cerf has warned that governments — including democratic ones — are increasingly censoring and filtering the Web, while some regimes are seeking to ban online anonymity in order to control political speech.

"At Google, we see and feel the dangers of the government-led Net crackdown," he wrote in a CNN.com editorial in December.

DOLLAR MOTIVE

Yet digital rights activists have accused two of the Internet industry's most influential players — Facebook and Google — of leading the charge against anonymity by pushing its users to identify themselves, which can turn up valuable information for two companies that essentially make money by advertising and tracking user behavior.

When Google+ launched in 2011, its requirement that users display their real names alarmed activists who accused the Web giant of abandoning its "Don't be evil" corporate mantra to pursue growing rival Facebook. The world's most popular social network has been the most aggressive in enforcing its policy, with Chief Executive Mark Zuckerberg once equating keeping multiple identities with "a lack of integrity."

In one instance in 2011, Facebook suspended British author Salman Rushdie's account and, after reviewing his passport, changed his Facebook identity to "Ahmed Rushdie." The company relented after Rushdie played up the row on Twitter, but it has stood by its policy as a general matter.

"This real name culture leads to greater accountability and a safer and more trusted environment for our users, and we firmly believe that the use of authentic identity helps people get the most value out of the site," Facebook spokesman Frederic Wolens said.

Due to its easy integration, many online messaging boards or third-party apps — like music-streaming service Vevo.com, for instance — increasingly require users to log in with their Facebook credentials. Last week, Google introduced a similar Google+ log-in service for third-party sites.

In response to public outcry, Google in 2012 began allowing nicknames and pseudonyms for a fraction of Google+'s 500 million users, and has since reiterated that it would encourage - but not require - Gmail and YouTube users to sign in with Google+.

Although its algorithms sift through Google+ to flag accounts with symbols or common nouns, a Google spokesman said the company will not require user authentication with official documents such as passports.

Still, Google's aggressive push to implement Google+ has been controversial even within the company, and Google+ chief Vic Gundotra had to downplay suggestions of internal disagreements over its roll-out in recent press interviews.

"There was a debate on this subject and it was resolved," Cerf told Reuters. Requiring real names "denies (users) choice," he said. "Our conclusion was that choice is important."

Google respected its users' rights more than Facebook, but the company did not go far enough, said Jillian York of the Electronic Frontier Foundation, an Internet rights group.

"Google's approach to this takes the view that the only thing that people want to stay safe from is government, and that's not entirely true," York said. "People are also concerned about staying protected from Google itself."

Cerf, 69, co-invented the protocols that underpin the Internet in the 1970s, when he taught at Stanford and worked with the U.S. Department of Defense Advanced Research Projects Agency. Since 2005, when he joined Google as its "chief Internet evangelist," Cerf has been a fixture at international technology conferences, often sporting his signature three-piece suits and fiercely advocating for Internet freedom.

Cerf personally uses two Google+ accounts, for work and socializing, but took a few tongue-in-cheek swipes at Google's rival, which he said was diluted by too many distractions.

"I'm on Facebook and I found it less than useful," said Cerf, who explained that he accepted every Facebook friend request when he first joined the service — only to quickly hit the maximum threshold of 5,000 friends.

"I complained to (Facebook Chief Operating Officer) Sheryl Sandberg that I thought that was a personal insult that they thought I had too many friends," he said. "I think they changed it for me."

(Reporting by Gerry Shih; Editing by Lisa Shumaker)
http://www.reuters.com/article/2013/...9240HS20130305





European Parliament Blocks Citizen E-Mails Protesting EU 'Porn Ban'

After European citizens began to complain en masse over a report proposing that porn should be banned in the 27-member state bloc, European politicians blew the whistle on their own IT department.
Zack Whittaker

Pirate Party member Christian Engström MEP blew the whistle on his fellow political colleagues after they had complained to the parliament's IT department that they were receiving vast numbers of e-mails from the very people they represent.

It comes only a day after CNET reported that other European politicians are set to vote next week on a report that could lead to a pan-European EU ban on all forms of pornography in the region.

On his Web site, Engström said that it was "absolutely excellent" that citizens were actively engaging in the democratic process, and that he had received some 350 emails to his office before 12 midday today.

After this, he said, "these mails suddenly stopped arriving," he said. He claimed, quite frankly, that: "The IT department of the European Parliament is blocking the delivery of the e-mails on this issue, after some members of the parliament complained about getting e-mails from citizens."

He described the block as an "absolute disgrace" and that the European upper house views input from its citizens "as spam." He noted that he will be writing a letter to the president of the European Parliament, Martin Schulz, about this "totally undemocratic practice."

The massive influx of e-mails stemmed from a report written by Dutch MEP for the Socialist Party, Kartika Tamara Liotard, who called on the European Union to enforce a blanket ban on pornography in the media of the 27 member states, including online.

While this initiative report is not a draft legislative measure, it suggests an opinion by the wider European Parliament that could lead to legislation in the future. The vote is scheduled for this coming Tuesday.

This is not the first time the Parliament has been blamed for blocking e-mails from its citizens, however. During the widespread anger over a new transatlantic treaty -- the Anti-Counterfeit Trade Agreement (ACTA) -- e-mails were also blocked by the European Parliament after Brussels-based politicians complained.

The treaty that on one hand would counter the illegal counterfeit goods trade across borders but on the other would have made it make it far easier for Internet providers to monitor consumers. ACTA would have also allowed for local authorities to impose new criminal sanctions on those who flout copyright and patent laws.

ACTA eventually crumbled in the European Parliament, sending the global agreement into turmoil.
http://news.cnet.com/8301-1023_3-575...g-eu-porn-ban/





Verizon Turns in Baltimore Church Deacon for Storing Child Porn in Cloud

Verizon detected porn in his backups.
Sean Gallagher

A deacon at St. Joseph's Church in Fullerton, Maryland, a suburb of Baltimore, was arrested last week for possession of child pornography after Verizon detected images and videos of children performing sexual acts.

William Steven Albaugh, a 67-year old retiree ordained as a Catholic deacon in 1996, was taken into custody by Baltimore County Police officers on March 1. He admitted to collecting child pornography since the 1970s, but he claimed not to have been involved in creating the porn himself. Police believe none of the images are of children from the church, its school, or the Fullerton community.

Verizon detected the pornographic images stored in Albaugh's Verizon Online Backup and Sharing account. The company reported his account to Center for Missing and Exploited Children, who in turn passed the information to Baltimore County law enforcement. Police investigating the case found files both on his Verizon account and on a flash drive, and authorities seized two PCs and an iPad as well. Albaugh said he used the iPad to view "nudist websites that include pictures of children," The Baltimore Sun reports.
http://arstechnica.com/tech-policy/2...porn-in-cloud/





Big Data Done Cheap
Quentin Hardy

Some new products impress for what they say about the future. Win or lose, they show where the world is going with near certainty.

In this case, the product is Big Data computing at near consumer prices.

Violin Memory is an eight year-old company that makes large-scale data storage systems for computer centers. Its boxes fetch information uncommonly fast. Now, the company is going downmarket, with data storage for individual computer servers. These data cards create powerful machines that can do sophisticated work, at less than one-tenth the current costs of storage.

If the product works, ordinary servers costing a few thousand dollars might be deployed for sophisticated data analysis, genetic research, logistics management, or other activities that are currently done on multimillion-dollar racks of computers. It could make possible much cheaper real-time computing projects at companies and schools, bringing in more customers and experimentation.

“Radical economics is the only way to break the way things are done,” said Don Basile, the chief executive of Violin Memory. “This is like having array storage, the stuff in data centers, in the palm of your hand.”

Besides being cheaper and more capacious than any comparable storage inside a server, he said, the cards can supposedly and can fetch and store data 25,000 times faster than conventional disc drive storage.

A typical server has eight gigabytes of memory for reaching data quickly, plus more stored in a 500 gigabyte hard drive. The Violin Memory data cards, produced in conjunction with Toshiba, offer 1.4 terabytes in “flash” memory, which can be accessed quickly. Cards for higher-end servers hold up to 11 terabytes.

This so-called in-memory computing matters, because otherwise machines take too much time fetching data back and forth. In-memory, however, is now mostly on expensive machines; an Oracle’s Exadata product can cost over $1 million for storage and computing, plus monthly service charges running tens of thousands of dollars.

The low-end Violin Memory card has a list price of $4,000, and is meant for a server costing even less than that. The bigger card, for the kind of server that costs $5000 or more, lists for about $60,000. In the real world, both cards are likely to be heavily discounted. There are a couple of other models in between the two cards.

The secret to doing this new style of server memory is a clever use of commercial-grade flash memory, the kind of stuff that stores the pictures in digital cameras.

Violin Memory uses a board full of these consumer chips, coordinated by its own specially-built silicon. The company’s odd name is a reference to that orchestration.

“The explosion of data analytics gives us an opportunity in this market,” said Mr. Basile. “Over the next several years, every server will have in-memory computing.”

Toshiba, which is also an investor in Violin Memory, may sell the product to other server makers as well as putting it in its own brand of servers. Violin Memory has its own sales force, albeit a small one.

Even without this particular innovation, flash memory has become better and cheaper thanks not just to cameras and big commercial systems, but the explosion of smartphones and tablets, which also use the stuff.
http://bits.blogs.nytimes.com/2013/0...ta-done-cheap/





White House: Unlocking of Cellphones Should be Legal

Cellphone users should be allowed to switch their devices to any mobile carrier, the White House said on Monday in response to an online petition against the recent banning of the practice.

More than 100,000 people signed the petition protesting the ban on switching imposed by the Library of Congress, which took effect in January. At issue is whether cellphone buyers, who get new devices at a heavily subsidized price in return for committing to long-term contracts, should be able to take their gadgets with them when they change carriers.

Many in the telecoms industry argue that cellphones should be "locked" - or prevented from moving freely across networks - because of the massive subsidies that carriers provide, effectively putting the devices in the hands of more people.

The petition argued that preventing "unlocking" reduces consumer choice and resale value of phones, which can cost hundreds of dollars without subsidies from carriers like AT&T Inc, Verizon Wireless and Sprint.

"The White House agrees with the 114,000+ of you who believe that consumers should be able to unlock their cell phones without risking criminal or other penalties," R. David Edelman, a senior advisor for Internet, Innovation, & Privacy to the Obama administration, wrote in the White House's response.

"This is particularly important for secondhand or other mobile devices that you might buy or receive as a gift, and want to activate on the wireless network that meets your needs - even if it isn't the one on which the device was first activated. All consumers deserve that flexibility."

The Library of Congress, which among other things is responsible for setting rules and deciding on exemptions related to the Digital Millennium Copyright Act, said on Monday the issue would benefit from further debate and that its intention was not to supplant public policy discussion.

The Library of Congress got involved late last year during a rulemaking session conducted by the Register of Copyrights, which advises the organization. Unidentified participants in the rulemaking process, a technical, legal proceeding that allows members of the public to request exemptions to the copyright act, raised the issue then.

The Library of Congress subsequently decided that cellphones should no longer be exempted from the relevant section of copyright law, triggering the January ban on "unlocking."

(Reporting by Edwin Chan in San Francisco; Editing by Tim Dobbyn)
http://www.reuters.com/article/2013/...92401620130305





F.C.C. Backs Consumers in Unlocking of Cellphones
Edward Wyatt

For a decade consumers have been able to keep their cellphone numbers even if they switched their wireless carriers. On Monday, the Obama administration and the Federal Communications Commission said consumers should also be able to switch carriers and keep their actual phones.

For consumers, being able to take their iPhone or any other type of handset with them when they switch carriers could make it easier to take advantage of lower rates once an initial contract is fulfilled. That might mean more price competition and more choices for cellphone customers.

The administration and the F.C.C., under Julius Genachowski, announced that they will urge Congress to overturn a ruling last year by the Copyright Office of the Library of Congress that made it illegal for consumers to unlock their cellphones, opening the software that restricts most phones from working on another carrier’s network.

Most consumers probably are not even aware that there is a process that would allow them to keep their current phone when they switch from one national carrier to another — but only after they have satisfied their initial service contract. The freedom to keep a phone regardless of the carrier has become a popular cause in technology circles, and an online petition to the White House gained more than 100,000 signatures in a month, prompting a response.

“If you have paid for a mobile device, and aren’t bound by a service agreement or other obligation, you should be able to use it on another network,” R. David Edelman, a senior White House adviser for Internet, innovation and policy, wrote in a blog post on the White House Web site.

“It’s common sense,” he said, and it raises concerns about consumer choice, competition and innovation.

Without a change, the potential consequences for unauthorized unlocking, under the Digital Millennium Copyright Act, are stiff: a $500,000 fine and five years in prison.

Wireless phone companies say they do not understand what the fuss is about. The big carriers each have policies that allow for phone unlocking on request once a user has fulfilled the initial contract terms. And, the carriers say, there are plenty of places to buy an unlocked phone to be used on a pay-as-you-go basis.

“We’ll unlock your device if you’ve fulfilled the terms of your service agreement,” AT&T, one of the largest wireless carriers, said in a statement Monday. “And, if you bring an unlocked device that will work on our network, we’ll sell you a SIM card and service.”

The key, therefore, is whether a cellphone designed to operate on one company’s network will operate on another company’s system. Unlike in Europe, cellphone systems in the United States do not all operate using the same technology, meaning a phone from one carrier might not easily transfer to another.

Michael Altschul, a senior vice president of CTIA — The Wireless Association, a trade group representing cellphone companies, said the national wireless carriers only insist on a phone remaining locked for the duration of the service contract so they can recover some of the cost of their subsidy that reduces the purchase price of the phone. Consumers have long been able to buy phones that already are unlocked, but that usually requires paying full price, which is often several times the subsidized price at which carriers offer phones along with a two-year contract.

For example, an unlocked iPhone 5 can be bought from the Apple store for $649; the same phone bought from AT&T costs $199 if the buyer accepts a two-year contract for wireless service.

The ban on unlocking a cellphone became an issue with the passage in 1988 of the copyright act, which among other provisions makes it illegal to circumvent digital protection technology. Unlocking a phone requires altering the software that restricts use of the phone to a certain carrier’s network, and runs afoul of the act.

But until recently, the copyright office had granted an exemption for mobile phones, subject to review every few years. Last year, however, the copyright office did not renew the exemption, prompting protests from the tech community.

The Library of Congress issued a statement Monday saying it agreed with the Obama administration that the issue of whether consumers should be able to unlock their phones “has implications for telecommunications policy” and that it should be reviewed by Congress and the administration.

Because the Library of Congress, and therefore the copyright office, are part of the legislative branch, the White House cannot simply overturn the current ruling. But both the White House and the F.C.C. urged Congress to take up the issue.
https://www.nytimes.com/2013/03/05/t...ellphones.html

















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