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Old 20-03-13, 07:37 AM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - March 23rd, '13

Since 2002


































"On the basis of what you have told us and what you’re not willing to tell us, the only thing the committee can do is treat as completely irrelevant any submissions you make in relation to the Photoshop student edition." – MP Stephen Jones


"Although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues." – Luis Aguiar and Bertin Martens


"I think hackers are the new Communists for the D.O.J.." – Tor Ekeland



































March 23rd, 2013




New Research: Music Piracy Should Not Be a “Concern for Copyright Holders”

European Commission study looks at 16,000 users across five countries.
Cyrus Farivar

Less than two weeks after a study showing that Internet movie piracy displaces digital film sales, new research by two European Commission researchers arrived at the opposite conclusion with respect to music sales. In short, they find that “digital music piracy should not be viewed as a growing concern for copyright holders in the digital era. In addition, our results indicate that new music consumption channels such as online streaming positively affect copyrights owners.”

The two authors, Luis Aguiar and Bertin Martens, are from the EU's Information Society Unit (under the Joint Research Centre) based in Seville, Spain. The duo described their study and conclusions in a new 40-page paper published this month.

"Although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues," Aguiar and Martens write.

"This result, however, must be interpreted in the context of a still evolving music industry. It is in particular important to note that music consumption in physical format has until recently accounted for the lion’s share of total music revenues. If piracy leads to substantial sales displacement of music in physical format, then its effect on the overall music industry revenues may well still be negative."

Ars reached out to the authors, the Recording Industry Association of America (RIAA), and the Motion Picture Association of America (MPAA). The authors and the MPAA did not immediately respond. The RIAA declined to comment.

Spaniards love piracy sites

To conduct the study, the researchers used data from Nielsen NetView (an Internet audience measurement service) to examine detailed behavior of 5,000 Internet users from each of the European Union’s five largest economies: France, Germany, Italy, Spain, and the United Kingdom.

“The most striking differences appear when looking at the determinants of download. Compared to Germany, Spain show 230 percent more clicks on illegal downloading websites. Italy presents an important difference of 134 percent while the UK and France have 43 percent and 35 percent more clicks respectively. France stands out when it comes to streaming, with 150 percent more clicks than Germany. Spaniards have 20 percent more clicks than the Germans, while Italians have 25 percent less. The UK presents a small difference with Germany in terms of streaming, with only nine percent more clicks.

There are various possible explanations for these country differences. First, unobservable cultural characteristics could explain the use of different types of music consumption channels. Second, market forces, and in particular the limited access to legal digital purchasing websites, could influence the illegal downloading activity of consumers.”


The study relies on two different quantitative formulas, which the authors say are far better than the self-reported qualitative surveys related studies use. The authors also suggest what we’ve long-suspected, which is the lack of a legal alternative for a given piece of content may have a lot to do with whether or not its pirated.

As we’ve pointed out previously, given the fragmented nature of the European Union content market, it’s still true that content availability varies significantly across the soon-to-be 28-member bloc. For example, the iTunes Stores in Austria, Spain, and Denmark may not have a specific TV show availability, while Latvia, Belgium, and Germany do.

A marginal difference

Furthermore, the authors also note that while music revenues have fallen steadily since 1999, last month the International Federation of the Phonographic Industry (IFPI) reported its 2012 global recorded music revenue is up for the first time in 14 years. It rose 0.3 percent during 2011, reaching $16.5 billion. The pair concludes:

“After using several approaches to deal with the endogeneity of downloading and streaming, our results show no evidence of sales displacement. Overall, our different estimates show relatively stable, positive, and low elasticities of legal purchases with respect to both illegal downloading and legal streaming. Across specifications, the estimates of δ suggest elasticities of about 0.02 between clicks on illegal downloading websites and legal purchases websites. If this estimate is given a causal interpretation, it means that clicks on legal purchase websites would have been two percent lower in the absence of illegal downloading websites. Specific country estimates show that for Spain and Italy the elasticity is zero, while it is close to 0.04 for France and the UK. All of these results suggest that the vast majority of the music that is consumed illegally by the individuals in our sample would not have been legally purchased if illegal downloading websites were not available to them.”
http://arstechnica.com/business/2013...right-holders/





Minnesota File-Sharing Case Finally Ends After Six Years—$222,000 Ruling Stands

Supreme Court won't hear Jammie Thomas-Rasset's case about 24 downloaded songs.
Cyrus Farivar

The Supreme Court of the United States announced on Monday that it has denied certiorari—declined to hear the case—of Jammie Thomas-Rasset, a Minnesota woman who was ordered to pay $222,000 after having downloaded 24 songs off Kazaa several years ago. When her legal travails began in 2007, the case was the first trial involving unauthorized file-sharing of intellectual property heard by a jury in the United States.

The Supreme Court's denial of certiorari means that the decision from the United States Court of Appeals for the Eight Circuit ruling in September 2012 will stand. The Eighth Circuit upheld the very first ruling for $222,000 (at $9,250 per song) in damages. It's an amount which has varied across three subsequent trials, reaching as high as $1.92 million and later falling to $54,000 (upheld last year before later being overturned by the Eighth Circuit).

In an e-mail, Thomas-Rasset told Wired that she refuses to pay the damages.

“As I’ve said from the beginning, I do not have now, nor do I anticipate in the future, having $220,000 to pay this,” she wrote. “If they do decide to try and collect, I will file for bankruptcy as I have no other option.”
http://arstechnica.com/tech-policy/2...ruling-stands/





IsoHunt’s Fung Helped Users Infringe, Blew Off “Red Flags,” Say Judges

File-sharing services face a practically unbroken string of court losses.
Joe Mullin

A major Hollywood court win against the IsoHunt torrent site has been upheld on appeal. In a ruling (PDF) issued this morning, a three-judge panel found that IsoHunt and its founder Gary Fung had illegally induced users to swap copyrighted files.

After seven years of litigation, the site may finally have to adopt some serious filtering. Fung was first sued by Columbia Pictures in 2006, lost his case in 2009, and was slapped with a strongly worded injunction in 2010. That injunction allowed content companies to submit long lists of search terms to Fung that he was supposed to filter for. However, despite Fung's court losses, IsoHunt today doesn't appear to be functionally very different from the site that the entertainment industry objected to back in 2006. Searches for copyrighted material readily turn up lists of files with names that strongly suggest they are infringing.

Even if you interpret the data in a light favorable to IsoHunt, there's no question that the site's main use was to trade copyrighted material, the judges wrote. Columbia's expert found that between 90 and 96 percent of content on the site was confirmed or "highly likely" to infringe copyright. And while Fung "takes issue" with some aspects of the methodology, "he does not attempt to rebut the factual assertion that his services were widely used to infringe copyrights." Even tripling the margin of error on the Columbia survey would mean that the overwhelming use of IsoHunt was to violate copyright.

No “safe harbor” for Fung, who helped users break the law

IsoHunt's argument that the site should be protected by the "safe harbor" of the Digital Millennium Copyright Act (DMCA) didn't impress the appeals judges, although they took a somewhat different tack than the Los Angeles District Court judge who first heard the case. He had ruled that Fung wasn't protected by DMCA "safe harbors" at all. "Fung had 'red flag' knowledge of a broad range of infringing activity," write the judges.

Fung personally urged his users to upload and download particular copyrighted works; he helped users watch copyrighted films and burn DVDs. And he didn't deny that he personally had used his site to download infringing material.

And while his tools attracted hordes of users looking to swap copyrighted material, Fung got rich from advertising. One of the factors that can kick you out of the safe harbor is getting a "financial benefit directly attributable to the infringing activity." The US Court of Appeals for the 9th Circuit, which heard this case, has never before specified if that phrase applied to a site like Fung's, which makes its money off advertising to users. Today, it made clear that it does.

Fung explicitly used the fact that his site was full of illegal files to make more money off ads. The court noted: "Fung marketed... to one advertiser by pointing to the 'TV and movies... at the top of the most frequently searched by our viewers,' and provided another with a list of typical user search queries, including popular movies and television shows."

The court also found that Fung's IsoHunt was more than a passive search engine for Torrent files, in part because of the activity of torrent "trackers." If the Plaintiffs can show a "connection between users' infringing activity and the use of Fung's trackers, the fact that torrent files were obtained from elsewhere may not relieve Fung of liability," wrote the judges.

Ira Rothken, the lawyer representing Fung and IsoHunt, took particular issue with the court's holding on trackers. "The logic of the tracker exception is inconsistent with the plain meaning of the safe harbor and puts at risk a large part of the Internet infrastructure, including, for example, automated intelligent load balancers," he wrote to Ars in an e-mail today.

Courts don't care what’s “under the hood”

The case against IsoHunt is the latest in an essentially unbroken stream of cases in which file-sharing services have been shut down by courts. Napster, Grokster, Aimster, KaZaa. As Internet law professor Eric Goldman noted when IsoHunt lost its case in 2009, the fact that peer-to-peer file-sharing technology has changed over the years doesn't really matter much. "[C]ourts don't really care how file sharing technology works under the hood," he noted. "We have P2P copyright law on the one hand, and mainstream copyright law on the other, and it simply isn’t possible to harmonize them."

No matter how often these services claim they are just performing mainstream functions—the "We're just like Google!" defense—courts aren't going to accept it. File-sharing services have looked bad since Napster, and they continue to have a serious PR problem. The road-map for services that want to survive using the safe harbor is better mapped by a case like UMG v. Veoh, which successfully beat Universal Music in court. Of course, it didn't matter that much for Veoh, which had gone bankrupt in any case, in part due to litigation costs.

The court did rule that minor changes should be made to the injunction order against Fung. For example, he's barred from "indexing or providing access" to torrent files "harvested or collected from well-known infringing sites, such as 'The Pirate Bay.'" The court ruled that Columbia and its co-plaintiffs will have to provide the names of specific sites that Fung must block. Overall, though, it rejected Fung's argument that the injunction is overly broad.

Rothken says he'll pursue an en banc re-hearing of the case by the full 9th Circuit. That's a longshot, since not many such requests are granted, but it's not out of the question in a tumultuous area of the law like file-sharing. "Inducement must be more than a gestalt standard especially when the Court is taking away a person's right to a jury trial," Rothken wrote. "Ambiguous copyright standards chill innovation." Fung's case should be heard by a jury, he said.

The Motion Picture Association of America, meanwhile, fired off a press release saying it's looking forward to seeing the case go back to district court, where Fung should face a trial on damages. "Those who build businesses around encouraging, enabling, and helping others to commit copyright infringement are themselves infringers, and will be held accountable for their illegal actions," said MPAA general counsel Henry Hoberman.
http://arstechnica.com/tech-policy/2...-site-isohunt/





The Copyright Rule We Need to Repeal If We Want to Preserve Our Cultural Heritage
Benj Edwards

The anti-circumvention section of the Digital Millennium Copyright Act threatens to make archivists criminals if they try to preserve our society's artifacts for future generations.

Perhaps by now you've heard about the campaign to repeal the anti-circumvention section (1201) of the Digital Millennium Copyright Act. This most recent challenge to the DMCA arose from a recent decision by the Librarian of Congress to discontinue a three-year exemption that made cell phone unlocking legal.

Opponents of the DMCA anti-circumvention provision claim that the law threatens consumer control over the electronic devices we buy, and they're right. But the stakes are much higher than that. Our cultural history is in jeopardy. If the DMCA remains unaltered, cultural scholarship will soon be conducted only at the behest of corporations, and public libraries may disappear entirely.

That's because the DMCA attacks one of the of the fundamental pillars of human civilization: the sharing of knowledge and culture between generations. Under the DMCA, manmade mechanisms that prevent the sharing of information are backed with the force of law. And sharing is vital for the survival of information. Take that away, and you have a recipe for disaster.

The DRM Problem

In the last decade, more and more commercial cultural products have become available for purchase (or, more accurately, license) over the Internet -- works like music, movies, video games, apps, TV shows, novels, and educational texts. They arrive free of any fixed media as a stream of bits coming in through a network cable.

To protect these cultural products against unauthorized duplication and distribution, most vendors of digital goods wrap them in encrypted data formats as part of digital rights management (DRM), a form of copy protection. Most DRM systems tie the "ownership" of digital goods to a certain user account or a certain device which is then verified by a connection to a remote server on the Internet.

The DMCA makes it illegal and punishable by a $500,000 fine or up to five years in prison to circumvent copy control and access control technologies like DRM.

Common wisdom would tell you, "Don't copy things without permission, and everything will be fine." But just as DRM-based copy protection prevents unauthorized users from making copies of digital goods, it also prevents cultural institutions from making copies for archival purposes. Every encrypted cultural work is locked, and to get the key, you have to pay the content owner.

Certain big publishers and copyright aggregators will immediately point out that DRM-protected cultural works will remain available to cultural institutions because they will gladly license the rights to use them. Currently, most US libraries have agreements like this with book publishers to provide e-book access to their patrons.

But this scenario gives content holders undue powers over the of machinery of cultural scholarship and preservation. When shrouded in DRM and license agreements, a cultural work is never truly and legally in the possession of the libraries, meaning that libraries cannot properly preserve them for use by future generations.

What's worse, not all cultural works -- take, for example, iOS Apps, Steam games, and Xbox Live titles -- are available for license to cultural institutions. So they're inaccessible from legitimate scholarly study and preservation even at present, never mind 100 years from now.

The anti-circumvention provision of the DMCA was created primarily to protect DVDs; it did not anticipate our rapid shift to media-independent digital cultural works, so it is absurdly myopic when it comes to digital preservation.

To properly preserve digital works, libraries must be able to copy and media-shift them with impunity. It may sound strange, but making a DRM-free copy of a digital work is the 21st century equivalent of simply buying a copy of a paper book and putting it on a shelf. A publisher can't come along and take back that paper book, change its contents at any time, or go out of business and leave it unscrambled and unreadable. But publishers can (and have done) all three with DRM-protected works.

So why don't librarians just defeat DRM, as it is often possible to do, and jailbreak Kindles and iPads to collect these materials? Because it's illegal, of course. And if these chronically under-funded institutions want to keep their funding, they need to stay above the board.

DMCA Makes Piracy Culturally Important

To complicate things, there is a way to legally circumvent the anti-circumvention part of the DMCA. Every three years, the Librarian of Congress may review and implement temporary exemptions to the anti-circumvention provision based on suggestions from the public.

Cultural institutions have taken advantage of this the best they can, but it's been a frustrating exercise in endless legal petitioning and campaigning every three years when the exemptions come up for review. At present, the current slate of DMCA exemptions don't cover nearly enough, and law-abiding archivists are forced to sit on their hands while digital cultural works come and go, missing opportunities to legitimately archive them for future study.

In the course of my reporting on similar issues, I've recently spoken to a number of cultural historians and archivists, and they universally take issue with section 1201 of the DMCA, citing it as a major barrier to their work.

"DMCA is a mess," says Henry Lowood, Curator for History of Science & Technology Collections at Stanford University Libraries. "It's basically putting cultural repositories in positions where they either have to interpret very murky scenarios or they have to decide that they are going to do something that they realize is forbidden and hope that nobody's going to notice."

Lowood says that Stanford stays on the murky (but legal) side of things, so unless the law changes, his university and others will be forced to rely on the work of amateurs who break the law to free cultural works from DRM, collecting them in underground archives that will some day become available to scholars.

Thanks to the DMCA, the future of our cultural history will be based on the work of people who ignored the law -- the same people that many copyright holders would call "pirates." How ironic that the pirates will be the ones that save the day when they're supposed to be the bad guys. If librarians wanted to do the same thing, they'd be branded as criminals.

Repeal Section 1201 of the DMCA

Digitally distributed cultural works are here to stay, and it is very possible that such works will subsume every information-based cultural format over the next decade. Some books are now only published as e-books, and even TV shows are beginning to show up only on the Internet, such as Netflix's House of Cards series.

So we're looking at a future where 100% of all major cultural commercial works could be protected with DRM, taking 100% of those works out of the flow of cultural history until they become public domain, at which point they will likely already be lost due to technological obsolescence and media decay. (Interestingly, this will tilt our future understanding of the history of this period toward those works that never relied on DRM for copy protection.)

This status quo is simply unacceptable and must change, or we have to be willing, as a society and a nation, to say goodbye to libraries and the concept of universal public access to knowledge.

It's time to repeal the anti-circumvention provision of the DMCA. It unfairly dictates how consumers can use electronic products they own, and it jeopardizes our cultural history while providing only marginal protections to copyright holders.

Let's not make this generation the one where cultural scholarship dies.
http://www.theatlantic.com/technolog...ritage/274049/





Forget the Cellphone Fight — We Should Be Allowed to Unlock Everything We Own
Kyle Wiens

While Congress is working on legislation to re-legalize cellphone unlocking, let’s acknowledge the real issue: The copyright laws that made unlocking illegal in the first place. Who owns our stuff? The answer used to be obvious. Now, with electronics integrated into just about everything we buy, the answer has changed.

We live in a digital age, and even the physical goods we buy are complex. Copyright is impacting more people than ever before because the line between hardware and software, physical and digital has blurred.

The issue goes beyond cellphone unlocking, because once we buy an object — any object — we should own it. We should be able to lift the hood, unlock it, modify it, repair it … without asking for permission from the manufacturer.

But we really don’t own our stuff anymore (at least not fully); the manufacturers do. Because modifying modern objects requires access to information: code, service manuals, error codes, and diagnostic tools. Modern cars are part horsepower, part high-powered computer. Microwave ovens are a combination of plastic and microcode. Silicon permeates and powers almost everything we own.

This is a property rights issue, and current copyright law gets it backwards, turning regular people — like students, researchers, and small business owners — into criminals. Fortune 500 telecom manufacturer Avaya, for example, is known for suing service companies, accusing them of violating copyright for simply using a password to log in to their phone systems. That’s right: typing in a password is considered “reproducing copyrighted material.”

Manufacturers have systematically used copyright in this manner over the past 20 years to limit our access to information. Technology has moved too fast for copyright laws to keep pace, so corporations have been exploiting the lag to create information monopolies at our expense and for their profit. After years of extensions and so-called improvements, copyright has turned Mickey Mouse into a monster who can never die.

Kyle Wiens

Kyle Wiens is the co-founder and CEO of iFixit, an online repair community and parts retailer internationally renowned for their open source repair manuals and product teardowns. Launched out of his Cal Poly college dorm room in 2003, iFixit has now empowered upwards of 15 million people to repair their broken stuff.

It hasn’t always been that way. Copyright laws were originally designed to protect creativity and promote innovation. But now, they are doing exactly the opposite: They’re being used to keep independent shops from fixing new cars. They’re making it almost impossible for farmers to maintain their equipment. And, as we’ve seen in the past few weeks, they’re preventing regular people from unlocking their own cellphones.

This isn’t an issue that only affects the digerati; farmers are bearing the brunt as well. Kerry Adams, a family farmer in Santa Maria, California, recently bought two transplanter machines for north of $100,000 apiece. They broke down soon afterward, and he had to fly a factory technician out to fix them.

Because manufacturers have copyrighted the service manuals, local mechanics can’t fix modern equipment. And today’s equipment — packed with sensors and electronics — is too complex to repair without them. That’s a problem for farmers, who can’t afford to pay the dealer’s high maintenance fees for fickle equipment.

Adams gave up on getting his transplanters fixed; it was just too expensive to keep flying technicians out to his farm. Now, the two transplanters sit idle, and he can’t use them to support his farm and his family.

This isn’t an issue that only affects the digerati.

God may have made a farmer, but copyright law doesn’t let him make a living.

Neighborhood car mechanics also see copyright as a noose constricting their ability to fix problems. The error codes in your car? Protected. The diagnostic tools used to access them? Proprietary software.

New cars get more sophisticated every year, and mechanics need access to service information to stay in business. Under the cover of copyright law, auto companies have denied independent shops access to the diagnostic tools and service diagrams they need.
Fixing our cars, tractors, and cellphones should have nothing to do with copyright.

Mechanics aren’t taking it lying down. In September of last year, Massachusetts passed Right to Repair legislation designed to level the playing field between dealerships and independent repair shops. Under the rallying cry of “it’s your car, you should be able to repair it where you want,” voters passed the bill by a whopping 86 percent margin. The law circumvents copyright, requiring manufacturers to release all service information to Massachusetts car owners and service technicians. The popular unrest is spreading: Legislators in Maine just introduced similar legislation.

Meanwhile, progress is being made to legalize cellphone unlocking. With grassroots groups leading the charge, the Obama administration announced its support for overturning the ban last week. Since then, members of Congress have authored no fewer than four bills to legalize unlocking.

This is a step in the right direction, but it’s not enough. Let’s make one thing clear: Fixing our cars, tractors, and cellphones should have nothing to do with copyright.

As long as Congress focuses on just unlocking cellphones, they’re missing the larger point. Senators could pass a hundred unlocking bills; five years from now large companies will find some other copyright claim to limit consumer choice. To really solve the problem, Congress must enact meaningful copyright reform. The potential economic benefits are significant, as free information creates jobs. Service information is freely available online for many smartphones from iFixit (my organization) and other websites. Not coincidentally, thousands of cellphone repair businesses have sprung up in recent years, using the repair knowledge to keep broken cellphones out of landfills.

As long as we’re limited in our ability to modify and repair things, copyright — for all objects — will discourage creativity. It will cost us money. It will cost us jobs. And it’s already costing us our freedom.
http://www.wired.com/opinion/2013/03...s-or-your-cars





Court Sides with Student in Case Over Textbooks
AP

The Supreme Court has sided with a Thai graduate student in the U.S. who sold cheap foreign versions of textbooks on eBay without the publisher’s permission, a decision with important implications for goods sold online and in discount stores.

The justices, in a 6-3 vote Tuesday, threw out a copyright infringement award to publisher John Wiley & Sons. Thai graduate student Supap Kirtsaeng used eBay to resell copies of the publisher’s copyrighted books that his relatives first bought abroad at cut-rate prices.

Justice Stephen Breyer said in his opinion for the court that the publisher lost any ability to control what happens to its books after their first sale abroad.
http://www.salon.com/2013/03/19/cour...oks/singleton/





Adobe: Fly to US for Cheaper Software

Buy cloud, buy a plane ticket or buy a competitor's product, Adobe ANZ MD tells pricing inquiry
Adam Bender

Australians can go to the US if they want lower American prices on boxed Adobe products, or buy the company’s cloud-based offering, an Adobe official told a Parliamentary panel today.

In a hearing about higher IT pricing in Australia compared to other markets, Adobe managing director of ANZ, Paul Robson, dodged and slapped back a flurry of volleys from the House Standing Committee on Infrastructure and Communications.

Robson stressed that the Australian price of Adobe’s Creative Cloud, $49.99 per month, is similar to the US price. He said that most of Adobe’s customers are moving to the cloud versions of the company's software.

The Adobe official added that Australia’s student rate for many pieces of Adobe software, including Photoshop CS6, is 24 per cent less than in the US.

But committee members asked repeatedly how Adobe can charge that way for cloud and student versions while at the same time charging 41 per cent more compared to the US for the regular boxed versions of the same software.

The US and Australian versions “are effectively the same product,” said MP Ed Husic, a Labor member who has led the charge on IT pricing.

“It’s not really much different, so I don’t know why Australian consumers are charged over $1000 more for your product here for what doesn’t seem to be much localisation.”

If Australian customers don’t see the value of Adobe’s software, they can buy another company’s software, Robson said. Alternatively, they can take a trip overseas or import the American version.

“They can choose to go to America and buy it from local American businesses [or] they can choose to import it from local American partners,” Robson said. Adobe’s US software can be used in Australia but not covered by warranty, he said.

If the Australian customer would rather stay at home, he or she can download software from Creative Cloud, “which is significantly cheaper as a value proposition,” he said.

Robson said the cloud-delivered software is cheaper because it doesn’t have to go through traditional distribution and retail channels. He added that Adobe would prefer selling products over the cloud.

MP Paul Neville needled Robson on his argument that students pay less in Australia for Adobe software than they do in the US.

“I’m equally bewildered by the fact that you charge so much for some products and so little for others if your argument's about cost and freight and operating in the Australian market as distinct from others,” Neville said.

“If that is a constant, how in heaven’s name can you take your educational material to market ... under the going rate for a comparable product?”

“If with the rest of your products you’re charging on average about 50 per cent more and then you can come down to charging 21 per cent less, you must have a pretty hefty profit margin around 70 per cent floating around in that equation.”

MP Stephen Jones grew visibly agitated when Robson refused to answer—for reasons of confidentiality—whether Adobe makes money on the discounted student version in Australia.

“On the basis of what you have told us and what you’re not willing to tell us, the only thing the committee can do is treat as completely irrelevant any submissions you make in relation to the Photoshop student edition.”

Apple blames record labels

Earlier in the hearing, an Apple official said higher prices of digital music and other content in Australia reflect rates Apple must pay to rights holders.

“Apple must pay the rights holders of the digital content, being the record labels, movie studios and TV networks to distribute content in each of the territories in which the iTunes store exists,” said Tony King, vice president for Apple Australia, New Zealand and South Asia.

“The pricing of this digital content is based on the wholesale prices which are set through negotiated contracts with the record labels, movie studios and TV networks,” King said. “In Australia they have often set a higher wholesale price than the price of similar content in the United States.”

Adding that iTunes pricing for digital content is similar to retail pricing for physical copies of music and movies, King urged the committee to ask the rights holders why they charge more in Australia.

As with Robson on Adobe software, King attributed higher prices for Apple software and hardware to distribution costs.

“Apple must consider differences between countries in product costs, freight charges, local sales taxes, levies, import duties, channel economics, competition and local laws regarding advertised prices,” he said.

-- Additional reporting by Stephanie McDonald
https://www.computerworld.com.au/art...aper_software/





Villains & Vigilantes Creators Win Rights to Game
Rogers Cadenhead

After a 20-month legal battle, the creators of the super-hero roleplaying game Villians & Vigilantes have prevailed in their court fight with the game's longtime publisher. Magistrate Judge Mark E. Aspey of the U.S. District Court for Arizona ruled on January 15 that Jeff Dee and Jack Herman own the rights to the game based on the 1979 contract they reached with publisher Scott Bizar of Fantasy Games Unlimited. The court also found that Bizar never had the right to sell derivative products or ebook PDF editions of the game, two things he has been actively doing in recent years.

Villains and Vigilantes, 1st edition, coverVillains & Vigilantes, one of the first super-hero roleplaying games, was created by Dee and Herman when they were teens in 1979. Bizar published the game and a subsequent 1982 edition and it was commercially successful, selling thousands of copies during a tabletop gaming boom sparked by the popularity of Dungeons & Dragons. But in 1987, Fantasy Games Unlimited curtailed most of its business activities after encountering difficulties with distributors. Bizar became a high school teacher and ran a game store in Gilbert, Ariz., selling the games by mail order and online for part of the last two decades. The store closed in 2007. Bizar shut down Fantasy Games Unlimited as a New York corporation in 1991 and founded a sole propietorship of the same name in Arizona that continues to market games he published in the '70s and '80s.

In 2010, Dee and Herman started Monkey House Games, LLC and published a new edition of the game. Dee told Ain't It Cool News that they had never been informed by Bizar that Fantasy Games Unlimited, Inc. ceased to exist in 1991, which under the terms of their publishing contract should give them all rights to the game. "[T]he contract clearly stated that if FGU, Inc., ever ceased to exist, then the publication rights reverted back to us," Dee told the site.

Judge Aspey did not rule on that argument, but instead found that the 1979 contract between Bizar, Dee and Herman only gave Bizar the right to publish the 1979 and 1982 editions of the game in printed form. "Because Defendants Dee and Herman hold the copyright to the characters and setting, Defendants presumably may create and market derivative works and obtain the financial benefits therefrom," the ruling states. "Additionally, because the marketing rights to the game do not appear to have been transferred, defendants hold the right to produce and sell or license such items as clothing, video games, card games, and movies or television programs."

Both parties in the lawsuit attempted to register Villains & Vigilantes as a trademark in 2010, prompting a Trademark Trial and Appeal Board case that was put on hold until the suit was decided. Judge Aspey ruled that because Bizar did not sell any copies of Villians & Vigilantes from 1990 to 1994 and 1999 to 2004, he lost any rights he might have had to the trademark. "The court therefore concludes that any right to the trademark 'Villians & Vigilantes' was abandoned by plaintiff at least when he ceased to use the mark from 1999 to 2004," he states.

The ruling calls Bizar the plaintiff and Dee and Herman the defendants because he sued them in Arizona and two other suits were consolidated with that one. Judge Aspey concludes, "[O]ther than possessing a license to produce and market the printed book forms of the 1979 and 1982 Works, Plaintiff has no right to the copyrighted works of Defendants. Specifically, Plaintiff was not licensed to produce or market a PDF form of the 1982 Work or to produce or market such items as comic books, apparel, or other merchandise utilizing copyrighted elements of the Villains and Vigilantes role-playing game created by Defendants."

Bizar is currently selling PDF editions of the game and over 40 supplements through the Fantasy Games Unlimited website and RPG ebook retailers. He's also selling some of those products in print editions on his site. Bizar's attorney Sterling R. Threet appealed the decision Feb. 19 with the U.S. Court of Appeals for the Ninth Circuit.

With the judgment, Monkey House Games appears likely to be granted its registered trademark and can continue to sell printed and electronic editions of Villians & Vigilantes and related products. Unless he wins the appeal, Bizar cannot sell anything but printed copies of the original 1979 and 1982 editions of the game.

The case could have an impact on Bizar's other games. All of them originally were released in the late '70s and early '80s, long before electronic publishing rights were anticipated by most publishers. In the 2002 case Random House vs. Rosetta Books, the New York state court of appeals ruled that unless a publishing contract explicitly grants ebook rights to the publisher, those rights are retained by the author. Even a contract that gives a publisher rights "in book form" would not be interpreted to cover ebooks. The court ruled, "[T]he law of New York, which determines the scope of Random House's contracts, has arguably adopted a restrictive view of the kinds of 'new uses' to which an exclusive license may apply when the contracting parties do not expressly provide for coverage of such future forms."

Another thing working in Dee and Herman's favor is a provision of copyright law that enables authors to cancel publishing contracts they entered into 35 years earlier. In 2014, authors can employ these termination rights for works published in 1979.
http://workbench.cadenhead.org/news/...ors-win-rights





Electronic Arts CEO Resigns, Effective on March 30

No official reason given, but resignation comes soon after the doomed SimCity launch.
Casey Johnston

John Riccitiello, CEO of Electronic Arts, has resigned from the company per a memo issued to press outlets Monday. Riccitiello will step down as both the CEO and as a member of the company’s board of directors effective March 30. The memo did not name a replacement or outline any succession plan in place.

Kotaku notes that under Riccitiello's leadership starting in 2007, EA's stock went on the decline—in late 2008 it went from around $50 a share to around $20, and it has never recovered.

"It has been an honor to serve as the Company’s CEO," said Riccitiello in a statement. "I am proud of what we have accomplished together, and after six years I feel it is the right time for me pass the baton and let new leadership take the Company into its next phase of innovation and growth." Larry Probst, who served as EA's CEO from 1991 to 2007, has been named executive chairman while the company searches for a replacement CEO.

While neither EA nor Riccitiello has cited an official reason for the resignation, the CEO's departure follows the catastrophic launch of EA’s most recent title, SimCity. The release was plagued by server problems compounded by the lack of offline play, an issue that was eventually “solved” by hacks and mods from the community.

EA followed up the widespread problems with quibbling over refunds, and reviewers came back with middling reviews and the documentation of AI problems. However, the game was still an extremely successful launch from a more conventional metric: 1.1 million copies sold in the two weeks following its release.
http://arstechnica.com/gaming/2013/0...e-on-march-30/





Insight: Nation-States Enter Contentious Patent-Buying Business
Dan Levine and Miyoung Kim

Patent competition in the United States is usually a fierce arena for private companies, but now the South Korean and French governments are suiting up.

Both countries have launched patent-acquisition companies, with the goal of helping domestic technology firms and possibly making some money in the process. China and Japan are making moves into the business too.

The Korean and French firms, dubbed Intellectual Discovery and France Brevets, are similar to the handful of private patent-acquisition firms in the U.S. derisively called "patent trolls."

U.S. patent aggregators such as closely-held Intellectual Ventures - which don't produce products - are often accused of unfairly targeting companies that actually build things by threatening to sue unless they are paid royalties.

The aggregators say they create a more-liquid market for valuable intellectual property, and help assure that legitimate inventors - especially those who don't work for big corporations - get paid for their breakthroughs. The French and Korean firms haven't yet filed any U.S. lawsuits.

The advent of state-sponsored intellectual property dealers adds a fresh geopolitical element to the debate about patent trolls and how to protect legitimate inventions without stifling innovation. It could also complicate efforts to improve global cooperation on trade-related matters such as online piracy and computer security.

Congressman Peter DeFazio, a Democrat from Oregon and co-sponsor of a bill designed to limit patent litigation, called the new government-backed patent entities a form of "protectionism" that nobody had anticipated.

"This is a whole new level of jeopardy," said DeFazio, who had not been previously aware of them.

Government-sponsored aggregators are still comparatively minor players in the patent deals market, and officials involved with Intellectual Discovery and France Brevets say they have no intention of pursuing aggressive litigation strategies.

Intellectual Discovery presents itself as a defensive alliance: if a South Korean company finds itself targeted in a lawsuit, for instance, it can access the patents being compiled by Intellectual Discovery to hit back.

"It is still in an incubating stage and focusing pretty much on aggregating IP," said Park Jong-Pil, deputy director at South Korea's Ministry of Knowledge Economy, in reference to Intellectual Discovery. "It is not close to a stage of earning big revenues or identifying entities violating our patents or taking legal action."

Intellectual Discovery has bought over 200 U.S. patents, including one for retinal eye scan technology from Singaporean chipmaker Avago Technologies Ltd last July, U.S. government records show.

And in a sign that its strategy is not limited to aiding Korean companies, it promptly sold that patent to Google Inc, which is busy developing its Google Glass product. A source familiar with the deal said the price was less than $100,000.

Intellectual Discovery and Google declined to discuss the details.

France Brevets, for its part, owns only four patents in the United States and 50 total patent "families," according to vice president Yann Dietrich and U.S. patent records. He didn't disclose the total number of patents worldwide.

Dietrich said the goal was investing in quality IP so French companies can better monetize their technology.

"We are not playing with the rules to extract money," Dietrich told Reuters.

TROLL, OR MARKET-MAKER?

Patent reform advocates say patent aggregators have exploited loopholes in the system and are often little more than quick-settlement artists who threaten lawsuits with flimsy patent claims registered years after a product hits the market.

But big players such as Intellectual Ventures, launched by former Microsoft chief technology officer Nathan Myhrvold, say they prevent upstart companies and independent inventors from being ripped off and create a much-needed market for innovation. Several tech companies, including Microsoft Corp and Google, as well as universities and foundations, are investors in Intellectual Ventures, according to court filings.

Companies used to deploy their patents largely for defense, and big tech firms routinely entered into broad cross-licensing agreements enabling them to use many of one anothers' technologies.

But that equation has changed over the past several decades as the value of breakthrough inventions in digital technology has soared. Tech firms began to see patents as a strategic weapon - and entrepreneurs like Myhrvold saw a business opportunity.

The result has been an explosion of patent litigation - especially in the mobile computing arena, where Apple has filed numerous patent infringement lawsuits against its major rivals, with mixed results.

The spiraling patent litigation, which some attribute at least in part to the aggregators, is seen by many in the industry as wasteful, and a threat to innovation. That in turn has attracted the attention of Congress.

DeFazio, the Oregon Democrat, has co-sponsored the SHIELD act, which aims to deter patent lawsuits by requiring most entities which sue over a patent they have acquired (as opposed to going to court over an invention of their own) to pay their opponents' legal fees if they lose. Trial lawyers have fiercely opposed the legislation, in part out of concern that "loser pays" could spread to other areas of tort law.

Stanford Law School professor Mark Lemley said the emergence of state-sponsored companies could drive more support for the bill, now in committee. Legislators may view them as foreign governments sucking away the fruits of U.S. research, Lemley said, regardless of whether that is a realistic threat.

So far, the government-backed aggregators don't have nearly the same scale as Intellectual Ventures, which says it has over $5 billion in committed capital and owns roughly 70,000 IP assets.

France Brevets was launched in 2011 with 100 million euros, half from the state and half from the Caisse des Depots, a publicly managed investor in French economic development.

Pascal Asselot, licensing director for France Brevets, said that by assembling patent pools with intellectual property bought from French and foreign businesses, France Brevets aims to convince other companies to sign licensing deals and pay royalties. If France Brevets can show a healthy revenue stream, the hope is to attract sustainable private investment, Asselot said.

Korea's Intellectual Discovery, which was started in 2010 amid government fears that domestic companies were losing key patents that could be used against them by foreign companies, has a $140 million government commitment.

Prominent South Korean companies like Samsung Electronics Co Ltd and LG Electronics have signed up as "shareholders," providing Intellectual Discovery with additional revenue in exchange for a license to its patent portfolio.

Intellectual Discovery chief general manager Chant Kim compares the company to San Francisco-based RPX Corp, which acquires patents to protect its members but doesn't initiate lawsuits.

Edward Jung, chief technology officer at Intellectual Ventures, said his company hasn't competed with Intellectual Discovery on as many patent acquisition deals as he had thought they would.

"It's a more difficult business model than they initially expected," he said.

TAIWAN AND CHINA

Countries around the world are eager to strengthen their patent punch. The Innovation Network Corp of Japan, a joint public-private investment company, launched a fund in 2010 to acquire and license life sciences patents. Officials there were unavailable to comment.

China, meanwhile, has plans to set up around 20 IP "investment service platforms," along with exploring a joint government-industry-university patent funding model and extending pilot programs for patent insurance, according to a 2013 strategy plan from the state intellectual property office.

It's unclear from the document whether any of these programs will be similar to South Korea and France, and government officials did not respond to requests for comment.

Taiwan's national research lab set up an "IP service company" but it is not government funded, said Sean Wang, a representative for the lab in the United States in an email to Reuters. He did not respond to follow-up questions.

Stanford's Lemley said the ultimate method of judging these new players will be who they target. If Intellectual Discovery only uses its patents against companies who already sued Korean businesses - but leaves everyone else alone - then the company is a simple extension of Korean trade policy, Lemley said.

However, they might decide everyone is fair game.

"Then it really does look more like an effort by these foreign governments to get in on the boom business model of the last decade," Lemley said, "which is patent trolling."

(Reporting by Dan Levine in San Francisco and Miyoung Kim in Seoul; Additional reporting by Adam Jourdan in Shanghai and Junko Fujita in Tokyo; Editing by Jonathan Weber, Mary Milliken and Tim Dobbyn)
http://www.reuters.com/article/2013/...92J07B20130320





Reddit, Craigslist and 30,000 Other Websites Oppose CISPA
Alex Fitzpatrick

Reddit, Craigslist and more than 30,000 other websites are flying the flag of opposition to the Cyber Intelligence Sharing and Protection Act, or CISPA, a controversial cybersecurity bill that was recently reintroduced in Congress.

The thousands of websites which oppose CISPA will, starting Tuesday, be displaying an interactive banner ad (seen below) from the Internet Defense League that allows voters to send the following message to their members of Congress: "CISPA is back. This bill sacrifices privacy without improving security. We deserve both."

"CISPA takes away people's 4th amendment right to privacy,” said Tiffiny Cheng of Fight for the Future and the Internet Defense League, an Internet activist organization which is organizing an anti-CISPA "Week of Action."

The Internet Defense League is a product of Fight for the Future and includes Mozilla, Wordpress, Public Knowledge, the Electronic Frontier Foundation, among other members.

"That's why internet users are going to do what they're good at; the Internet is good at fighting for itself and the rights of every user," continued Cheng. "We've been able to tailor our responses to the unique threats and opportunities to free expression and rights online, and we keep winning."

CISPA is designed to allow private companies and the government to share cybersecurity information with one another in an effort to bolster both sides' defenses against hackers. However, it has come under fire from Internet activists and privacy advocates, who fear it will allow the government to spy on Internet users — claims which are vehemently denied by the bill's authors.

CISPA passed the House of Representatives last year despite a veto threat from the White House on privacy grounds, but it was not picked up by the Senate. It has since been re-introduced in the new congressional term.

Grassroots Internet advocates successfully joined with some of the Internet's top companies, including Google and Facebook, to defeat SOPA in early 2012. However, several of the companies which opposed SOPA have been kinder to CISPA, arguing it could help them protect themselves and their users from hackers and data breaches.

While CISPA's fate remains uncertain, President Barack Obama in January signed an executive order which effectively put the less controversial half of CISPA's intelligence flow — the transfer of data from government agencies to private companies — into practice.
http://mashable.com/2013/03/19/reddit-craigslist-cispa/





RapidShare Scraps Unlimited Storage with Short Notice

Even customers who paid in advance for long-term unlimited storage at RapidShare will see it disappear on March 20. The company says its terms of service permit such abrupt changes.
Stephen Shankland

Online storage provider RapidShare is expanding what it offers for its free service -- but it's also scrapped its earlier unlimited plan, even for customers who paid in advance for a longer-term period.

The Swiss company, with more than 50 employees, more than a thousand servers, and the capacity to store several petabytes of user data, announced the change March 12. Paying customers get a choice between a 250GB plan costing 10 euros ($12.96) a month and a 500GB plan costing 20 euros a month. The previous unlimited-storage option vanishes Wednesday.

The change reflects a reality for cloud computing customers: When you don't own and control your own hardware and software, your computing life is in others' hands. Plenty of benefits come with the approach -- most people don't enjoy being sysadmins, for example -- but it's not a free lunch.

One customer who contacted CNET is incensed about RapidShare's change, because he's got more than 5 terabytes of data stored at the service. RapidShare offered him a customized option -- more than 700 euros per month. That's a huge increase over the 199 euros he paid for the two-year plan. He's still got six months left on that plan.

And the company is making the change abruptly. Paying customers must decide what plan to choose by March 20.

In contrast, when Mozy scrapped its unlimited storage plan in 2011, it honored the arrangements it had made with customers through the ends of the terms they'd paid for.

RapidShare said in a statement to CNET that it may change its plans at any time: "According to our terms of use we are entitled to change the contents of RapidPro services. Customers who don't like the new terms can cancel with 30 days' notice and receive reimbursement proportional to the length of their remaining term."

RapidShare made the change after deciding to extend its RapidDrive software, which links the service to the Windows file system, to free-account users.
http://news.cnet.com/8301-1023_3-575...-short-notice/





File-Sharing Site Boosts Free Service
J. Craig Anderson

Scottsdale-based online file-sharing service TransferBigFiles.com is hoping to lure new customers by increasing the maximum file size for free uploads to 10 times the industry standard.

Starting today, TransferBigFiles will allow users to upload files of up to 20 gigabytes, a tenfold increase from the company’s previous limit for non-paying members of its service.

For as little as $5 a month, members can increase the maximum file size to 100 gigabytes, according to the company, a subsidiary of Scottsdale-based software developer Axosoft.

TransferBigFiles marketing director Angelo Coppola said the idea is to allow users the ability to transfer any file without having to worry about whether it exceeds the allowable size.

Twenty gigabytes is large enough for a file containing about 10 hours of high-definition video, he added.

“It kind of takes file size out of the equation,” Coppola said.

Since TransferBigFiles was formed in 2005, competition in the online file-hosting space has become intense, with several top competitors emerging such as Egnyte, YouSendIt, ShareFile and SendThisFile.

Unlike services such as the now-defunct MegaUpload, which got into trouble for copyright violations, TransferBigFiles does not allow members to perform open searches for files hosted on its servers.

Instead, a member who wants to share a file lists specific recipients for the file, all of whom receive an e-mail notifying them that the file is available. The e-mail also contains a link to download the file.

In addition, members can flag any file they believe might have been uploaded in violation of copyright laws, and the file immediately will be disabled, Coppola said.

TransferBigFiles currently has about 750,000 registered users, he said.
http://www.azcentral.com/business/co...e-service.html





Verizon Seeks to Shake Up Fees for TV Channels

FiOS operator presses smaller media firms for deals based on audience size
Shalini Ramachandran

Verizon Communications Inc. is proposing to shake up the pay-television business based on a simple premise: it wants to tie the fees it pays to carry TV channels to how many people actually watch them.

Verizon, whose FiOS TV is the nation's sixth-biggest pay-TV provider, with 4.7 million subscribers, has begun talks with several "midtier and smaller" media companies about paying for their channels based on audience size, according to Terry Denson, the phone company's chief programming negotiator. He declined to identify any of the media companies.

Under existing arrangements, distributors like cable and satellite operators pay a monthly, per-subscriber fee to carry channels based on the number of homes in which they agree to make the channels available, regardless of how many people watch those channels.

"We are paying for a customer who never goes to the channel," Mr. Denson said.

Instead, Verizon would like to offer broad distribution of a "significant number of channels," including independent networks and smaller outlets. But each channel would be paid solely according to how many subscribers tuned in each month for a "unique view," or a minimum of five minutes, Mr. Denson said. Viewership would be measured by Verizon's set-top box data, not Nielsen ratings.

"If you are willing to give a channel five minutes of your time, the cash register would ring in favor of the programmer," Mr. Denson said. For smaller and independent channels that often aren't widely distributed, he said, this model would provide much broader exposure.

The proposal, if implemented, wouldn't reduce FiOS subscribers' cable bills, Mr. Denson said. But over time, he said, he hoped the shift would "stabilize retail prices for consumers," unless more people started watching smaller and midsize channels. If retail prices increase, "it would be due to consumer consumption," he said.

Mr. Denson said that for the companies with which he has negotiated so far, his plan has been a "head-scratching thing" because "it's such a disruptive model." Discussions are "inching forward," he said.

The executive said he hasn't yet raised the idea with big media companies, which own most TV channels, but he planned to bring it up with them as contract renewals roll around. He acknowledged that it would be difficult to persuade the big companies to get on board and "just go cold turkey."

Verizon's proposal comes amid rising tensions between distributors and entertainment companies. With cheaper online-video outlets now offering a wide range of TV shows, several pay-TV executives have warned of the dangers that rising pay-TV costs could prompt consumers to disconnect.

To deal with rising costs, some distributors, such as Time Warner Cable Inc., have warned they will cull small channels with low ratings from their lineups. Cablevision Systems Corp. recently sued Viacom Inc. alleging that its practice in negotiations with distributors of bundling popular channels with less-watched outlets violates antitrust laws.

If broadly accepted, Verizon's proposal could have a far-reaching impact, potentially hurting revenue for some companies but improving others. Many channels owned by big media companies are available in nearly all the roughly 100 million households with pay TV, according to media researcher SNL Kagan. And while many of the most-popular channels earn the highest fees, big disparities exist, particularly for sports channels, which cable and satellite operators view as particularly valuable.

Last year, for example, Walt Disney Co.'s ESPN averaged one million viewers watching its programming live on any given day and up to seven days after broadcast. That was slightly less, according to Nielsen, than the 1.3 million who were watching USA Network, owned by Comcast Corp.'s NBCUniversal. Yet distributors like Verizon paid ESPN an average of $5.04 a month per household last year, according to SNL Kagan, while USA got just 68 cents a month.

ESPN declined to comment on Verizon's proposal, but a person familiar with the channel's thinking said its current fees reflect the high cost of sports programming and the fact that it can't sell rerun rights for sports, which tend to be watched live, unlike entertainment channels, which viewers increasingly watch at their convenience.

Disney drew the biggest share of cable-channel fees last year, with 20.5% of the total, according to SNL Kagan, followed by Time Warner Inc., and News Corp ., which own such widely available channels as TNT and Fox News, respectively. (News Corp. also owns The Wall Street Journal).

Time Warner and News Corp. spokesmen declined to comment.

One industry executive said that while big media companies with sports channels are likely to resist it fiercely, Verizon's proposal could be attractive for other companies who argue that they have a bigger share of viewers than of fees.

Viacom, which owns channels such as Nickelodeon and MTV, has said that its channels represent 20% of the aggregate ratings of cable networks, but SNL Kagan data show it receives just 7.4% of total cable fees. A Viacom spokesman said that the company wasn't aware of Verizon's proposal.

One cable-network executive said that similar ideas have been floated in past years, but they never gained traction because distributors attempted to cap how much they would pay for highly rated channels. The executive said that "unless there is a giant seismic shift" in the TV landscape, the proposal is unlikely to gain much support from programmers.

Despite a sharp audience drop in recent months at most of the major broadcast networks and at several big cable channels, media-company executives have remained bullish about wresting big fee increases from pay-TV distributors for years to come.

Verizon's proposal and Cablevision's lawsuit, however, highlight a long-standing complaint of pay-TV distributors.

"It feels like certain content players who have a suite of channels attempt to lever the strong ones to prop up the weak ones…without any empirical data to show that these channels are actually viewed or wanted," said Verizon's Mr. Denson.

To implement its proposal, Verizon said it would provide the necessary set-top box data to programmers to report active viewers.

Mr. Denson said the proposal could be extended to include viewing on demand and on other devices.
— William Launder contributed to this article.
http://online.wsj.com/article_email/...zExNDcyWj.html





Nearly One-Third of U.S. Adults Have Abandoned a News Outlet Due to Dissatisfaction
Andrew Beaujon

Readers, viewers and listeners may not have followed the contraction of the news business closely, but they’re beginning to notice the effects of five dismal years for many publishers. That’s one of the key findings of this year’s State of the News Media report from Pew’s Project for Excellence in Journalism.

“Nearly a third of U.S. adults, 31%, have stopped turning to a news outlet because it no longer provided them with the news they were accustomed to getting,” the report says.

With reporting resources cut to the bone and fewer specialized beats, journalists’ level of expertise in any one area and the ability to go deep into a story are compromised. Indeed, when people who had heard something about the financial struggles were asked which effect they noticed more, stories that were less complete or fewer stories over all, 48% named less complete stories while 31% mostly noticed fewer stories. Overall, awareness of the industry’s financial struggles is limited. Only 39% have heard a lot or some. But those with greater awareness are also more likely to be the ones who have abandoned a news outlet.

The report is a rich document that requires a lot more attention than one blog post can give it. But here are some other takeaways of immediate interest.
Local TV news is facing an existential crisis

• Audience is down.

Last year’s report said local TV news was growing audience. 2013′s report said that growth didn’t amount to much. “The strategy of gaining viewers by adding more and more time for news appears to have stopped paying off,” the local TV section says. Only 28 percent of people under 30 get their news from local TV stations, down from 42 percent in 2006. Local newscasts lost audience in every sweeps period Pew studied. The audience for early-morning news grew, but did so in numbers that proved insignificant against overall audience loss.

• More paywalls at newspapers present opportunities for growth, but few TV stations take them.

Greensboro, N.C., Albuquerque, N.M., Tulsa, Okla., and Des Moines, Iowa, are among the few markets where local TV stations’ websites are the top sources for news, and all have newspapers that charge readers in some way. But turning that advantage into revenue has proved difficult; only 3 percent of stations’ revenue, on average, comes from their websites.

• Ad gains were unevenly distributed.

Earnings reports at companies that own lots of TV stations were unusually joyous documents in the third and fourth quarters of 2012 thanks to a bonanza of political advertising. That money was unevenly distributed, though, landing mostly in swing states. Auto ads were up at many stations, reflecting the strengthening of that sector, and retransmission fees from cable providers were another bright spot. The court maneuverings between Aereo and broadcasters are worth watching, the report says: That service rebroadcasts local TV signals over the Web, (so far) without compensating broadcasters.

Picture for newspapers improves, but…

• The three-legged stool

The picture for newspapers was better in 2012, but that’s mostly relative to the utter misery of preceding years. Circulation revenue — including digital subscriptions as well as physical ones — got closer to ad revenue at many papers, which is only good news if you forget that ad revenue has fallen to the point where convergence became possible. The third leg of the stool for publishers is “other” — sponsoring events, taking on outside printing work, selling real estate.

• Ad prices are dropping

Online, newspapers and other publishers continue to struggle against the declining value of banner ads. That’s a problem because banner ads account for the preponderance of newspapers’ online advertising. The price news organizations can charge for video ads is going down as well, Suzanne Vranica reported last week in The Wall Street Journal. And readers haven’t embraced video content as wholeheartedly as publishers had hoped:

Neither The Wall Street Journal nor Reuters drew enough viewers for YouTube to continue investing in their channels. The Journal’s videos often brought in weekly viewership between 500,000 and a million, while Reuters’ ranged from 200,000 to 400,000 viewers, according to the Nieman Journalism Lab. That is a far cry from the most popular YouTube channels, which can reach 3 million to 7 million views in a week.

“[b]usiness, education, health care and overseas events receive more coverage in newspapers than in the media in general,” the report says. “Campaigns and elections (the biggest category in 2012) and crime receive less.”


The many challenges of African-American media

• Black-oriented TV news is still hard to find.

No ethnic group in the U.S. gets more news from television than African Americans, but most attempts at creating news programs aimed at black viewers have been star-crossed. There are promising news offerings, though, from TV One and OWN, which broadcast Lance Armstrong’s confessional.

• Print is in trouble even by newspaper-industry standards.

Only one African American newspaper, the New York Amsterdam News, grew circulation in 2012. Accounts receivable are a problem at many outlets.

• Fewer and fewer black-owned radio stations

Consolidation, Portable People Meters and easing of rules about station ownership are edging out smaller companies.

• Digital and social bright spots

The biggest news website aimed toward African-Americans is Huffington Post Black Voices. African Americans use some forms of social media more than whites, which could mean other avenues for sharing news stories and driving traffic to news organizations’ sites.
http://www.poynter.org/latest-news/m...ssatisfaction/





BP Accused of Rewriting Environmental Record on Wikipedia

A British Petroleum representative allegedly rewrote 44 percent of the oil giant's Wikipedia page, including the environmental sections. Some Wikipedia editors are crying foul.
Violet Blue

Oil giant British Petroleum is well-known for the Deepwater Oil Horizon disaster and its much-criticized handling of the cleanup's aftermath. But you might want to think twice before you read about the event, or the company's environmental record, on Wikipedia.

Angry Wikipedia editors estimate that BP has rewritten 44 percent of the page about itself, especially about its environmental performance.

This comes to light just as a federal judge has scheduled a hearing for April 5 on BP's request to prevent payments of what the oil company calls "fictitious or inflated claims" in a class action settlement reached with victims of the 2010 Deepwater Horizon (Gulf of Mexico) oil spill.

BP says the claims could cost it billions of dollars.

BP's emergency request for the hearing is in the civil trial currently under way in New Orleans which, according to The Economist, "will apportion blame for the accident, determine how much oil gushed out, and apply financial penalties."

Meanwhile, the company may be working on cleaning up its environmental record on Wikipedia -- in a way that leaves the Wikipedia reader none the wiser.

BP is not directly editing its page, but instead has apparently inserted a BP representative into the editing community who provides Wikipedia editors with text.

The text is then copied "as is" onto the page by Wikipedia editors, while readers are none the wiser that the sections pretending to be unbiased information are, in fact, vetted by higher-ups at BP before hitting the page.

Sections edited by "User:Arturo at BP" include the sections "Alternative Energy," "Allegations of greenwashing," and "Environmental record," among others.

"Arturo BP," who identifies himself as a member of BP's press office, is providing the content for Wikipedia's BP page, especially about the company's environmental performance. He skirts direct page editing prohibitions by posting a notice on the BP "talk page," and then Wikipedia editors copy and paste the content as provided onto BP's page.

Arturo BP states on his User page:

I have established this account to help improve BP-related articles in line with Wikipedia standards and guidelines.

On his Talk page, where the material from BP to be published on Wikipedia is posted, he adds:

The information I present from news sources is verified by the various subject matter experts within the company. I am not an expert myself on all of the topics and I want to make sure that any proposed language from news sources used is actually accurate. Arturo at BP (talk)

BP's image cleanup cleverly skirts Wikipedia's editorial rules, wherein Wikipedia editors are using text that BP posts on Wikipedia itself as the source (although the text is not published on BP's Web site).

This way, the significant involvement of BP in its own entry is completely hidden from Wikipedia readers -- while Wikipedia editors, as usual, argue and attack each other over editorial policy while BP's favorable PR editing continues.

The image cleanup also cleverly takes advantage of an editing community that is easily exploited by editorial disagreement.

In a statement to CNET, BP denied that it was breaking Wikipedia's rules.

BP operates within Wikipedia's guidelines for how company representatives should interact with the site's editors. For nearly a year now, we have been fully transparent, never directly editing any copy and always disclosing that any suggestions we offer to Wikipedia's editors have come from a BP representative. We have also acted objectively, often proposing language that contains negative information about the company. Our participation in the editorial process undoubtedly has resulted in greater accuracy, which after all should be the primary concern of everyone who relies on this resource for information.

Arguments about BP's involvement in Wikipedia's editing community have begun to rage and become personal. And it's unclear who the editors are that are blindly copying and pasting BP's version of its environmental record onto the page, and hitting "Publish."

Wikipedia's editing community is afire with BP-ignited arguments about policy, paid editing, and whether or not this is the new direction of Wikipedia -- if it will be paid editing or working with companies and article subjects in its eternal quest for article accuracy.

There appears to be a faction of Wikipedia editors who are very welcoming to PR companies and the PR departments of businesses.

If they get their way, what's on the BP page about Deepwater Horizon is foreshadowing the future of Wikipedia, and the accuracy of its content.

And what better way to illustrate this than with a petroleum megacorporation writing its own Wikipedia entry?
http://news.cnet.com/8301-1023_3-575...-on-wikipedia/





Bribery Allegations Surfaced Against WSJ in China
Devlin Barrett and Evan Perez

The Justice Department last year opened an investigation into allegations that employees at The Wall Street Journal's China news bureau bribed Chinese officials for information for news articles.

A search by the Journal's parent company found no evidence to support the claim, according to government and corporate officials familiar with the case.

The U.S. government, meanwhile, is nearing the end of a broader investigation of the Journal's owner News Corp . stemming from allegations of phone hacking and bribery at U.K. tabloids, among other issues, according to people familiar with the case.

During the course of that broader probe, the Justice Department approached News Corp.'s outside counsel in early 2012 and said it had received information from a person it described as a whistleblower who claimed one or more Journal employees had provided gifts to Chinese government officials in exchange for information, according to people familiar with the case.

News Corp. and the Journal don't know the identity of the informant, company officials say, and government officials wouldn't discuss such details. It isn't clear whether the person worked inside the Journal and whether the informant provided names of alleged bribers.

According to U.S. and corporate officials, News Corp. has told the Justice Department that some company officials suspect the informant was an agent of the Chinese government, seeking to disrupt and possibly retaliate against the Journal for its reporting on China's leadership. The company officials came to that view after finding no evidence of the alleged bribery and because of the timing and nature of the accusations, company officials say. It isn't clear what, if any, evidence the company officials have for that claim, which reporters for this article couldn't independently verify.

A spokesman at the Chinese embassy in Washington didn't respond to messages seeking comment.

Government officials familiar with the probe declined to say what they made of the company's claim. A person close to the company said the alleged China matter hasn't been raised by U.S. investigators in some time, but wasn't more specific. It isn't clear if the Justice Department considers the matter resolved or still open.

Paula Keve, a spokeswoman for News Corp.'s Dow Jones unit, which publishes the Journal, said in a written statement: "After a thorough review of our operations in China conducted by outside lawyers and auditors, we have not found any evidence of impropriety at Dow Jones."

The informant's accusations about the Journal related to reporting activity in Chongqing, the power base of disgraced Chinese official Bo Xilai, and covered previous Journal reporting in China, according to government and corporate officials. To check the claims, investigators examined activity reaching back at least five years, they said.

Mr. Bo, from his seat in Chongqing, was a powerful and rising figure in China until a scandal involving the poisoning death of a British associate led to his downfall and the criminal prosecution of his wife.

In March 2012, the Journal published an article detailing the questions surrounding the British man's death, and how the scandal was fueling a power struggle within China's political leadership. Other articles followed about the wealth and corruption behind the private lives of some Chinese leaders.

The Chinese bribery allegations against the Journal arose around the time that U.S. and Dow Jones officials believed Chinese hackers were targeting Dow Jones's computer systems, according to people familiar with the matter. That is one reason company officials say they suspected the informant's actions were part of a broader attack on the paper.

Federal investigators probing the Dow Jones computer hacking concluded it was carried out by people with links to China's government, apparently to snoop on articles the paper was writing about its political leadership, according to government and company officials.

An array of Western companies has been targeted by Chinese hackers in recent years, including recently some U.S. media firms such as New York Times Co. The Obama administration has stepped up its calls on China to curtail such activity.

In a statement, Dow Jones Editor in Chief and Journal Managing Editor Gerard Baker called the newspaper's China reporting "exemplary and unrivaled" and added: "Our journalists, often working in the most difficult circumstances, will never be deterred from shining light on the darker recesses of Chinese society and politics."

If the Chinese bribery allegations were true, such behavior would be a potential violation of the U.S. Foreign Corrupt Practices Act. That law, commonly referred to as FCPA, was the principal basis for the U.S. opening its initial investigation of News Corp.'s activities in the U.K. and elsewhere. The law makes it illegal for companies with sizable American operations to offer money or gifts to foreign-government officials to gain a business advantage.

The allegations of gifts in China went beyond the typical meals or drinks shared by reporters and officials and included lavish entertainment and travel, according to people familiar with the matter.

Over the past decade, the Justice Department has more aggressively pursued companies with U.S. operations suspected of bribing foreign officials. In 2012, the Justice Department announced 13 FCPA-related settlements or court charges. A decade earlier, there were four.

In FCPA cases, unlike almost any other criminal probe, companies under investigation are required to do the bulk of the detective work themselves, typically by hiring an outside law firm. In the Journal case, after the Justice Department presented the informant's allegations, the company and outside investigators began going through its own accounts seeking evidence to corroborate the informant's claims, according to government and company officials. Finding none, the company notified the government it couldn't confirm the claims, the people said.

The investigation comprised audits and records searches.

According to officials, the informant then gave the Justice Department a similar set of allegations about a different set of company expenses in China. News Corp. looked into this second set of claims, and again found nothing, those people said.

Since 2011, the Justice Department has been overseeing a criminal investigation of News Corp. relating to revelations that its British papers hacked phones and bribed public officials to get information for articles. Almost two years later, that probe is nearing completion, government and company officials said, setting the stage for settlement negotiations between the U.S. and News Corp.

News Corp., which has hired law firm Williams & Connolly to oversee the FCPA case, is expected to make its final presentation detailing the company's global bribery investigation to the Justice Department next month, according to people familiar with the matter.

It will be then up to the Justice Department to spell out what punishment or sanctions, if any, the agency wants, and at that point negotiations will likely begin. The Justice Department doesn't publicly discuss cases that close without charges filed.

Both sides expect an agreement would include a monetary settlement of some kind, based on the alleged violations in the U.K. The government has also investigated potential misconduct in the company's former Russian outdoor billboard subsidiary, according to people familiar with the case, specifically whether it paid bribes to local officials to approve sign placements in that country.

News Corp. said Thursday: "In regards to U.K. matters, we've delivered on our commitment to uncover wrongdoing and feel confident about the work we've done to put us on the right path, including sweeping changes to our global internal controls, compliance programs and ethics requirements." The company hasn't in the past commented on the Russia allegations. The Russian company, which has been sold by News Corp., has denied wrongdoing.

Several U.S. officials said senior Justice Department lawyers are increasingly skeptical any criminal charges would be filed against individuals at the company, although the investigation continues.

An investigation by British police has already led to criminal charges against reporters and editors, alleging that people working for News of the World and another News Corp. paper, the Sun, paid bribes to public officials for information. Many of those cases are still pending.
http://online.wsj.com/article/SB1000...172055862.html





Sun Apologises for Accessing MP's Stolen Phone
BBC

The Sun newspaper has apologised in the High Court for accessing private information on a stolen mobile phone belonging to a Labour MP.

Police told Siobhain McDonagh her text messages had been accessed after her phone was stolen in October 2010.

The Sun - which has not admitted the theft of the phone itself - will pay the MP "very substantial damages".

The court has heard "possibly hundreds" of new claimants are seeking damages from the now defunct News of the World.

The boxer Chris Eubank, who appeared at the same hearing, claimed News International "destroyed" his life.

He rejected a "derisory" offer of compensation from News Group Newspapers and alleged that their actions led to the failure of his marriage.

'Serious misuse'

Ms McDonagh - who represents London constituency Mitcham and Morden and was the former principle private secretary to ex-Labour defence secretary Lord Reid - had her phone stolen from her car in south west London.

David Sherborne, representing Ms McDonagh, told Mr Justice Vos that in June 2012 police notified her that they had "obtained evidence that The Sun newspaper had accessed her text messages from about October 2010" and "appeared to have accessed and/or acquired her mobile phone".

Mr Sherborne added that the MP felt she had "obtained significant protection and vindication of her privacy rights" with the Sun's settlement, and said Ms McDonagh would not be pursuing any further legal action.

The Sun's lawyer said the newspaper accepted that her mobile phone "should not have been accessed" and added: "There has been a serious misuse of her private information".

Dinah Rose QC told the judge: "Through me [The Sun] offer their unreserved apology to the claimant for what has happened.

"Furthermore they have undertaken to the court not to use any information so obtained nor to access or attempt to access by unlawful means the claimant's private information."

The admission came as the court heard "potentially hundreds of victims" could seek damages from News Group Newspapers following a new Metropolitan Police investigation.

Hugh Tomlinson QC told the hearing that the new claims could arise from Operation Pinetree, a probe into a second phone hacking conspiracy.

He added it was "not known at the moment how many more claims may be issued".

Some 145 claimants have meanwhile settled claims in the second tranche of cases with more than 20 cases pending.
http://www.bbc.co.uk/news/uk-21831000





Whose Fault Is It When Your PC Gets Hacked? Probably Not Microsoft's
Antone Gonsalves

Since 2002, when Microsoft launched its Trustworthy Computing initiative, security in the company's products have improved each year. But while the company has increasingly battened down Windows, Office and its other programs, the number of vulnerabilities in harder-to-patch third-party applications has grown dramatically, making overall security on the PC worse than ever.

More Risk In Third-Party Apps

Rather than go through the expense of battling Microsoft directly, many hackers now focus on low-hanging fruit, such as the Java and Adobe Flash browser plug-ins, which are often left un-patched even by users who conscientiously update Windows and Office. This trend was highlighted in a new study by Secunia.

The security vendor found Microsoft's highly effective automatic security updates now address only 8.5% of the vulnerabilities in a PC. The rest have to be patched through updates from various software developers, each with their own unique process. The complexity leads users who are not security savvy to forgo updates, vastly increasing their risk of infection.

"There is, to date, no one fix-it-all solution," warned Morten Stengaard, director of product management and quality assurance at Secunia, in the company's blog.

Theoretically, Microsoft could overhaul Windows to place each third-party application in its own container, making it more difficult for hackers to load malware in the operating system. However, such a massive change would require Windows software vendors to rebuild their own products, which would have a ripple affect on every corporate and consumer customer.

"Microsoft, to some extent, is hamstrung by legacy code and what they've done in the past," Jack Gold, analyst for J. Gold Associates, said. "They can't just rip everything up and start all over again very easily."

Fewer Flaws In Microsoft Apps

Ironically, the third-party threat is blossoming even as Microsoft continues to get its own house in order. In 2012, out of all the known vulnerabilities in the top-50 PC programs, Microsoft products accounted for only 14% of them, the study found. The rest were in other software. And the share of vulnerabilities on a Windows PC coming from third-party applications has been growing. In 2007, they accounted for 57% of the security flaws, compared to 86% last year, Secunia says.

"It's well known that they [Microsoft] have put great efforts into improving security of the operating system and the applications that they provide," Stengaard said in an interview. "What we're seeing is the long-term involvement and dedication is now paying off."

Windows, Office, Silverlight and other Microsoft products are not ironclad, of course. Given enough time, knowledgeable hackers can find their way in through these channels. But in the world of cybercrime, most hackers are not interested in a challenge. Instead, they look for the easiest way to break into as many PCs as possible, to enslave the machines into the many armies of remotely controlled botnets, or to steal credit-card numbers, social-security numbers and corporate intellectual property that will fetch a good price on the underground.

Including both Microsoft and third-party applications, the number of PC vulnerabilities has dropped by 5% since 2011, and by 10% among the top 50 applications. Since 2007, though, overall vulnerabilities are up 15%, Secunia found, and that jumps to a whopping 98% increase among the top 50 applications.

Where The Danger Lies

Applications most likely to provide an easy path into Windows machines include Java, Flash, Adobe Reader and Apple iTunes, according to Secunia. If these applications are not kept up to date, hackers can exploit known vulnerabilities that enable them to load their malware via the PC's system memory.

In addition, all these applications have very large user bases, which makes it easier for hackers to find targets.

Why PCs have so much outdated software varies. Sometimes it's because the update process is too cumbersome, so they don't bother. Other times, the vendor is slow in fixing flaws that hackers are already targeting. Updating Java, an open platform for running software on any operating, system has been a pain for a long time. However, Java steward Oracle is working to improve the process and is getting updates out quicker, most experts agree.

In 2012, Adobe had the worst record for updating applications, according to Secunia. The software maker released patches at a rate 80% slower than in 2011, based on the time it took the vendor to release updates of vulnerabilities reported by Secunia.

Overall, though, patch speed for third-party apps is increasing, Secunia said:

In fact, in 2012, 84% of vulnerabilities had patches available on the day of disclosure. In 2011, the number was only 72%. The most likely explanation for this improvement in ‘time-to-patch’ is that more researchers coordinate their vulnerability reports with vendors.

Patching Is Critical

The vendor based its study on 6 million PCs, mostly in the U.S. and Europe, running its freeware called Personal Software Inspector, which checks for application vulnerabilities. Microsoft products accounted for 35% of the programs on the PCs.

If you take Secunia's study seriously, then the takeaway is clear. Even if patching all your software is getting more complicated, making sure everything is always up to date is more important than ever.
http://readwrite.com/2013/03/18/whos...not-microsofts





Researcher: Hackers Can Cause Traffic Jams by Manipulating Real-Time Traffic Data
Loek Essers

Hackers can influence real-time traffic-flow-analysis systems to make people drive into traffic jams or to keep roads clear in areas where a lot of people use Google or Waze navigation systems, a German researcher demonstrated at BlackHat Europe.

Google and Waze both offer turn-by-turn navigation in smartphone apps and use information derived from those phones for real-time traffic analysis. However, because of the tradeoff between user privacy and data gathering, hackers can anonymously influence navigation software to trick the real-time traffic system into registering something that isn’t there, said Tobias Jeske, a doctoral student at the Institute for Security in Distributed Applications of the Hamburg University of Technology, during the security conference in Amsterdam.

“You don’t need special equipment for this and you can manipulate traffic data worldwide,” Jeske said.

Both Google and Waze use GPS as well as Wi-Fi in phones to track locations. If Wi-Fi alone is enabled, only information about wireless access points and radio cells in the surrounding area will be transferred, which lets the navigation systems approximate the location of the user, Jeske said.

Example of a simulated traffic jam in Hamburg, Germany

Google navigation uses real-time traffic information in Google Maps for mobile. The protocol used to send location information is protected by a TLS (Transport Layer Security) tunnel that ensures the data integrity so that it is impossible for an attacker to monitor a foreign phone or modify information without being detected by Google, said Jeske. However, TLS is useless if the attacker controls the beginning of the TLS tunnel, he added.

To be able to control the beginning of the tunnel, Jeske performed a man-in-the-middle attack on an Android 4.0.4 phone to insert himself into the communication between the smartphone and Google. When the attacker controls the beginning of the tunnel, false information can be sent without being detected and in this way attackers are able to influence the traffic-flow analysis, according to Jeske.

If, for example, an attacker drives a route and collects the data packets sent to Google, the hacker can replay them later with a modified cookie, platform key and time stamps, Jeske explained in his research paper. The attack can be intensified by sending several delayed transmissions with different cookies and platform keys, simulating multiple cars, Jeske added.

An attacker does not have to drive a route to manipulate data, because Google also accepts data from phones without information from surrounding access points, thus enabling an attacker to influence traffic data worldwide, he added.

A similar attack scenario can be applied to Waze, but it is more difficult to affect the navigation of other drivers, Jeske said. Waze associates position data with user accounts, so an attacker who wants to simulate more vehicles needs different accounts with different email addresses, he added.

Jeske also found a way to transfer position data to Waze without user authentication, rendering the attacker anonymous, he said, without elaborating on that method.

For an attacker to actual influence traffic, a substantial number of Waze or Google navigation users have to be in the same area. When it comes to Waze, that is probably not going to happen, for instance, around Hamburg, he said. Waze, however, had 20 million users worldwide in July last year, so there should be areas where it is possible, he said.

Although Jeske hasn’t tested the vulnerability of other services offering real-time traffic data, they work more or less the same way as Google and Waze, so he expects that similar attacks on those systems are possible, he said.

Companies that offer navigation apps can avoid this sort of attack by linking location information to one-time authentication that is time stamped and limited to a fixed amount of time, Jeske said. That would restrict the maximum number of valid data packets per time and device, helping to secure the system, he added.
https://www.pcworld.com/article/2030...ffic-data.html





Cisco Switches to Weaker Hashing Scheme, Passwords Cracked Wide Open

Crypto technique requires little time and computing resources to crack.
Dan Goodin

Password cracking experts have reversed a secret cryptographic formula recently added to Cisco devices. Ironically, the encryption type 4 algorithm leaves users considerably more susceptible to password cracking than an older alternative, even though the new routine was intended to enhance protections already in place.

It turns out that Cisco's new method for converting passwords into one-way hashes uses a single iteration of the SHA256 function with no cryptographic salt. The revelation came as a shock to many security experts because the technique requires little time and computing resources. As a result, relatively inexpensive computers used by crackers can try a dizzying number of guesses when attempting to guess the corresponding plain-text password. For instance, a system outfitted with two AMD Radeon 6990 graphics cards that run a soon-to-be-released version of the Hashcat password cracking program can cycle through more than 2.8 billion candidate passwords each second.

By contrast, the type 5 algorithm the new scheme was intended to replace used 1,000 iterations of the MD5 hash function. The large number of repetitions forces cracking programs to work more slowly and makes the process more costly to attackers. Even more important, the older function added randomly generated cryptographic "salt" to each password, preventing crackers from tackling large numbers of hashes at once.

"In my eyes, for such an important company, this is a big fail," Jens Steube, the creator of ocl-Hashcat-plus said of the discovery he and beta tester Philipp Schmidt made last week. "Nowadays everyone in the security/crypto/hash scene knows that password hashes should be salted, at least. By not salting the hashes we can crack all the hashes at once with full speed."

Cisco officials acknowledged the password weakness in an advisory published Monday. The bulletin didn't specify the specific Cisco products that use the new algorithm except to say that they ran "Cisco IOS and Cisco IOS XE releases based on the Cisco IOS 15 code base." It warned that devices that support Type 4 passwords lose the capacity to create more secure Type 5 passwords. It also said "backward compatibility problems may arise when downgrading from a device running" the latest version.

The advisory said that Type 4 protection was designed to use the Password-Based Key Derivation Function version 2 standard to SHA256 hash passwords 1,000 times. It was also designed to append a random 80-bit salt to each password.

"Due to an implementation issue, the Type 4 password algorithm does not use PBKDF2 and does not use a salt, but instead performs a single iteration of SHA256 over the user-provided plaintext password," the Cisco advisory stated. "This approach causes a Type 4 password to be less resilient to brute-force attacks than a Type 5 password of equivalent complexity."

The weakness threatens anyone whose router configuration data may be exposed in an online breach. Rather than store passwords in clear text, the algorithm is intended to store passwords as a one-way hash that can only be reversed by guessing the plaintext that generated it. The risk is exacerbated by the growing practice of including configuration data in online forums. Steube found the hash "luSeObEBqS7m7Ux97dU4qPfW4iArF8KZI2sQnuwGcoU" posted here and had little trouble cracking it. (Ars isn't publishing the password in case it's still being used to secure the Cisco gear.)

While Steube and Schmidt reversed the Type 4 scheme, word of the weakness they uncovered recently leaked into other password cracking forums. An e-mail posted on Saturday to a group dedicated to the John the Ripper password cracker, for instance, noted that the secret to the Type 4 password scheme "is it's base64 SHA256 with character set './0123456789ABCDEFGHIJKLMNOPQRSTUVWXYZabcdefghijklmnopqrstuvwx yz'." Armed with this knowledge, crackers have everything they need to crack hundreds of thousands, or even millions, of hashes in a matter of hours.

It's hard to fathom an implementation error of this magnitude being discovered only after the new hashing mechanism went live. The good news is that Cisco is openly disclosing the weakness early in its life cycle. Ars strongly recommends that users consider the pros and cons before upgrading their Cisco gear.
http://arstechnica.com/security/2013...ked-wide-open/





The Obscurest Epoch is Today
Brian Krebs

“History is much decried; it is a tissue of errors, we are told, no doubt correctly; and rival historians expose each other’s blunders with gratification. Yet the worst historian has a clearer view of the period he studies than the best of us can hope to form of that in which we live. The obscurest epoch is to-day; and that for a thousand reasons of incohate tendency, conflicting report, and sheer mass and multiplicity of experience; but chiefly, perhaps, by reason of an insidious shifting of landmarks.” – Robert Louis Stevenson

To say that there is a law enforcement manhunt on for the individuals responsible for posting credit report information on public figures and celebrities at the rogue site exposed.su would be a major understatement. I like to think that when that investigation is completed, some of the information I’ve helped to uncover about those affiliated with the site will come to light. For now, however, I’m content to retrace some of my footwork this past weekend that went into tracking individuals who may have been responsible for attacking my site and SWATing my home last Thursday.

I state upfront that the information in this piece is certainly not the whole story (most news reporting is, at best, a snapshot in time, a first rough draft of history). While the clues I’ve uncovered thus far point to the role of a single individual, this person is likely part of a larger group involved in hacking and SWATing activity.

In my story last week, I posted a copy of the internal database for booter.tw, one of several fee-for-service “booter” sites. Booter sites are perhaps most popular among online gaming enthusiasts, who like to use them to knock opponents offline; but they are frequently also used to launch debilitating attacks on Web sites. That leaked booter.tw database shows that the denial-of-service attack that hit my site last week was paid for by a booter.tw user with the account name “countonme,” and using the address “countonme@gmail.com.”

Since the attack, I reached out to the proprietor of booter.tw, a hacker who uses the nickname “Askaa.” He informed me that the individual who launched the attack on my site was a hacker who used the screen name Phobia. “Phobia hacked into the countonme account to make it look like the according user attacked you,” Askaa said in a brief interview over Skype instant message. Askaa declined to say why he was so confident of this information.

Separately, over the weekend I received an email from a person who claimed to have direct knowledge of the attacks (perhaps because he, too, was involved). This individual said those who attacked my site were a group of young online video game enthusiasts who were upset that earlier in the week I’d written about ssndob.ru, a site that sells access to peoples’ credit files, Social Security numbers and other sensitive information.

According to this source, the hackers in this case belong to a four-man Xbox live gamer team that calls itself “Team Hype,” which until this past weekend had posted a number of videos to their own youtube.com channel, RealTeamHype (more on what happened to these videos in a moment).

According to the anonymous source, Team Hype consists of hackers who use the nicknames “Trojan,” “Shadow,” Convict,” and “Phobia.” The source said the group used SSNs from ssndob.ru to hijack “gamertags,” online personas tied to Xbox Live game accounts. In this case, specifically from Microsoft employees who work on the Xbox Live gaming platform. Some of the group members then sell those accounts to other Xbox Live players.

“They hack/social engineer Gamertags off Microsoft employees by using SSNs,” the source wrote. “I didn’t DDoS your site and I didn’t SWAT you, Phobia has been telling everyone he did. The method he released he said he gets SSNs, then calls phone companies and redirects the number and than gets xbox phone support to call number and confirm. I heard he got pissed that you released the site he uses. Also Trojan told a buddie of mines ‘fear’(on AIM) something about a dead body in your closet about your swat.”

The source said Phobia used the Twitter account @PhobiaTheGod (now closed, but partially available here and at this cache), and that Phobia’s personal information — including real name, address and phone number — had been “doxed” or released onto Pastebin-like sites some time ago. It didn’t take long to locate this profile at skidpaste.org (“skid” is a diminutive reference to the term “script kiddies,” referring to relatively unskilled young hackers who conduct most of their exploits using automated tools without understanding how those tools actually do the dirty work).

Having watched most of the videos at RealTeamHype’s youtube channel, it appeared that my source was telling the truth about the hijacked accounts: In fact, the videos at that channel documented such hijackings in progress using desktop screen-grabbing software. The videos even showed conversations with other team members in instant message windows in the background.

But I was reluctant to put much stock in the information until the source sent me a piece of information that only the attackers and my ISP would have known. On Friday, I received a call from Cox Communications, my Internet service provider. They wanted to know why I had paid $3,000 toward my account using several different credit card numbers. I assured them that I hadn’t made that payment. Then I heard from a member of Cox’s security team, who asked if I’d reset my password and if I’d indeed asked to cancel my Internet service. He was unsurprised to learn that I hadn’t. Apparently, hackers reset the password to my Cox email account by working out the answer to my secret question (this account is separate from my Cox user account, was set up over 10 years ago, and has never been used for anything remotely interesting or sensitive).

The source told me via email: “Hey brian, i just spoke to fear he told me phobia and his buddies were telling him that they hacked your cox email and paid your cox bill with hacked credit card, im not sure if this is true but im letting you know.”

I decided to give a call to the phone number included in the doxed records for Phobia, which rang at a home in Milford, Ct. A 20-year-old named Ryan Stevenson picked up the phone. After introducing myself, I asked Ryan if he knew anything about booter.tw, and he said he didn’t bother with booter sites because they were lame.

I then asked if he was part of a Xbox gaming group called TeamHype. He said yes, but that he hadn’t been associated with that group for six months. When I asked why, he said that his teammates had repeatedly called his house posing as the police, and had even SWATed his home — something his father confirmed by interjecting over Ryan’s voice. I told Ryan I found this strange, since the videos the youtube channel for TeamHype’s video channel was created on Dec. 26, 2012, and that his youtube.com account “Phobia” had uploaded videos of Microsoft Xbox accounts being hijacked as recently as February 2013. What’s more, those videos (like the one reproduced here) show Phobia sending shouts out to his buddies.

Then I remembered where I’d heard the nickname “Phobia”: In a terrifying tale by Mat Honan, a wired.com reporter who woke up one day last year to find his Macbook and other Apple devices being remotely wiped of their data after hackers managed to commandeer his Apple iCloud account. According to Honan’s story, “How Apple and Amazon Security Flaws Led to My Epic Hacking,” a hacker named Phobia reached out to him shortly after the incident. “Phobia was able to reveal enough detail about the hack and my compromised accounts that it became clear he was, at the very least, a party to how it went down,” Honan wrote of his ordeal. “I agreed not to press charges, and in return he laid out exactly how the hack worked.”

I asked Ryan if he knew Mat Honan. Here’s a snippet of our conversation:

BK: I’m looking at a story in Wired magazine from Mat Honan about how his Apple iCloud account was hacked. Do you know this guy?

RS: Yeah, I used to.

BK: Uh huh. And is Honan referring to you in this article?

RS: Yeah.

BK Yes?

RS: Uh huh.

BK: Did anything bad ever happen to you because of this?

RS: No.

BK: So, this was your doing with the Mat Honan hack, but you say you would never use a site like a stresser or…

RS: Yeah, I would never do that. That’s stupid.

BK: …or hack a reporter’s account or launch a denial of service attack against a reporter, or SWAT his house….

RS: <extended silence>

BK: So what’s the point of hacking a reporter’s iCloud account? Why’d you do that?

RS: Just to prove a point that, like…the security is breachable.

BK: Are you still on twitter?

RS: Yeah. But I changed my username yesterday.

BK: Really? Why?

RS: Because I don’t want to deal with people anymore. People call my house and pretend to be the police and stuff.

BK: Yeah, I know what you mean. So, what was your old Twitter account name?

RS: I think you know.

BK: PhobiaTheGod?

RS: Uh-huh.

BK: So what’s your new Twitter handle?

RS: <extended silence>

BK: Look, did you launch the attack on my site or not? Some of your gaming buddies sure seem ready to throw you under the bus for it.

RS: I didn’t even know who you were until someone tweeted your site. I just went to it to see what it was about.

At this point, Ryan’s dad grabs the phone and tries to tell me that his son didn’t really say that he hacked Mat Honan’s iCloud account, but that what he really said was he only knew the guy who hacked Honan’s account. Ryan’s dad goes on to explain that his son is basically a good kid who fell in with the wrong crowd, and that his son wouldn’t stoop to hacking other people, and certainly not to sending SWAT teams or any of that nonsense.

I decide to share with Ryan’s dad the URL for the TeamHype channel at youtube.com, and I can hear the father taking notes on the other end of the line. From the racket in the background noise behind the voice of Ryan’s dad, it’s clear that someone is furiously banging away at a computer keyboard. My suspicions are confirmed when I refresh the TeamHype youtube channel and find all of the videos have been deleted (the one above was cached in my window so I was able to re-record it).

This entire episode is giving me flashbacks that date back almost a decade, when I began communicating with a hacker group that called itself Team Defonic. These young men positively lived to hack into and post online personal data and photos belonging to celebrities and public figures. They also were obsessed with plundering databases for Social Security numbers and other sensitive information. Most of them were later arrested and jailed for their roles in breaking into Paris Hilton’s cell phone and hacking into accounts at Accurint, a law enforcement database run by data aggregator LexisNexis.

Stay tuned for more on this developing story. Meantime, many thanks again to all of you who’ve expressed concern or reached out via Twitter, Facebook (and Paypal!) to voice support and solidarity.
https://krebsonsecurity.com/2013/03/...ay/#more-19478





Hacker Case Leads to Calls for Better Law
Amy Chozick and Charlie Savage

Matthew Keys, the 26-year-old deputy social media editor at Reuters charged with assisting computer hackers, has emerged as the latest lightning rod in the continuing battle between proponents of Internet freedom and the Justice Department.

A federal indictment of Mr. Keys filed in California on Thursday met an online cacophony of protests against the 1984 computer crime law under which he was charged, the Computer Fraud and Abuse Act.

The indictment says that Mr. Keys, who previously worked as a Web producer at KTXL Fox 40, a Sacramento-based television station that, like The Los Angeles Times, is owned by the Tribune Company, provided a user name and password to hackers associated with the group Anonymous. Those hackers then changed a headline on a Times online article from “Pressure Builds in House to Pass Tax-Cut Package” to “Pressure Builds in House to Elect CHIPPY 1337,” a reference to another hacking group.

Each of the three charges against Mr. Keys could result in fines of as much as $250,000, with possible prison terms of as many as five years in one count and as many as 10 in the other two. The Tribune Company spent more than $5,000 to update its systems in response to the attack, the indictment says.

The aggressive tactics by prosecutors come amid an uptick in prominent cyberattacks in recent months. Last week, President Obama met with chief executives to discuss online security, which has become a hot issue on Capitol Hill.

In Mr. Keys’s case, the scale of the potential punishment relative to the actual harm caused — the vandalism to the Web site was quickly fixed — raised comparisons to the potential sentence in the indictment of Aaron Swartz, a 26-year-old computer programmer and Internet freedom advocate. Accused of breaking into a university system to download an archive of scholarly papers, Mr. Swartz committed suicide in January.

“Anyone horrified by the amount of jail time” Mr. Keys faced should join in calling for Congressional reform of the computer fraud act, Trevor Timm, an advocate and blogger at the Electronic Frontier Foundation, a nonprofit that supports an open Internet, wrote in a Twitter post on Thursday.

Still, it is not clear that an overhaul of the fraud act would change the damage charges Mr. Keys is facing. Orin S. Kerr, a former computer crimes prosecutor who now is a legal scholar at George Washington University, said that the part of the fraud act covering damage to a computer, which Mr. Keys was accused of violating, was more straightforward than the part involving authorized access, which Mr. Swartz was charged with violating; some scholars, including Mr. Kerr, have called those provisions overbroad.

Moreover, several legal specialists said that even if Mr. Keys were convicted on all three charges, they most likely would be collapsed into a single offense for purposes of calculating a sentence since they involved the same basic conduct. The sentencing guidelines would then be consulted in light of Mr. Keys’s previous criminal history, if any, and the economic harm caused by the vandalism — including any overtime or outside consultants piad to audit the system after the intrusion was discovered.

Mark Eckenwiler, a former deputy chief of the Justice Department’s computer crime section, said that statutory maximums cited in department news releases are “purely theoretical” in most cases, and that it would be inappropriate for the department to speculate at the start of the case about what an eventual sentence would be.

“The truth is that a lot of first-time offenders may well come in the very bottom band” of the sentencing guidelines, he said.

Nevertheless, Mr. Keys’s defense team stoked the furor. “I think hackers are the new Communists for the D.O.J.,” Tor Ekeland, a Brooklyn-based lawyer representing Mr. Keys, said in an interview. He maintained his client’s innocence and said that he intended to “vigorously litigate” the charges.

Jay Leiderman, a criminal defense lawyer in Ventura, Calif., known for representing computer hackers affiliated with Anonymous, is also representing Mr. Keys.

The case against Mr. Keys struck a particular nerve because of his outsize, and outspoken, online presence. A popular and at times volatile figure in the world of social media, Mr. Keys is in many ways emblematic of the new-media landscape. The writer of what was described by Time magazine as one of the 140 best Twitter feeds, Mr. Keys quickly used his feed to discuss the indictment and assure his nearly 25,000 Twitter followers that he was “fine.”

Mr. Keys is among a coterie of young journalists adept at social media who see their stars rise quickly and often are snapped up by major media organizations, said Sree Sreenivasan, chief digital officer at Columbia.

“At a young age you can have more influence than at any time in journalistic history,” Mr. Sreenivasan said, adding, “and the mistakes you make at a younger age are more visible than ever before.”

A Thomson Reuters spokesman said on Friday that Mr. Keys had been suspended with pay. “Any legal violations, or failures to comply with the company’s own strict set of principles and standards, can result in disciplinary action,” the company said in a statement, adding that Mr. Keys joined Reuters in 2012; the apparent crimes occurred in December 2010.

Supporters of Mr. Keys echoed criticism that reached a high pitch in January, when online activists accused prosecutors of trying to bully Mr. Swartz into pleading guilty. An article in Slate was posted on Friday under the headline “Has the Justice Department Learned Anything from the Aaron Swartz Case?”

Last week Attorney General Eric Holder Jr. was questioned at a Congressional oversight hearing on whether there had been prosecutorial misconduct in the Swartz case. Mr. Holder called the case tragic but defended prosecutors’ conduct, noting that they had offered Mr. Swartz several versions of a plea deal that would involve only a few months of prison time.

“I don’t look at what necessarily was charged as much as what was offered in terms of how the case might have been resolved,” Mr. Holder said.

Mr. Kerr, the former prosecutor, said the Justice Department had noted the maximum statutory punishments in news releases in part for their deterrent effect — to dissuade others from committing similar crimes — and not because they were realistic. “It’s mostly for show,” Mr. Kerr said.

Anonymous, the global collective of loosely organized “hacktivists” who have used computer attacks to protest political causes, has recently faced particular scrutiny. In August, Higinio O. Ochoa III, a member of an offshoot of Anonymous, was sentenced to two years in prison after he pleaded guilty to defacing Web sites and stealing confidential data when he tapped into several law enforcement computers. In 2011, hackers associated with the group targeted the Sony Corporation’s PlayStation online network, costing the company around $171 million.

“They’re an organization that should be taken seriously, and anyone who is thinking about their network and their security should consider them a force to be reckoned with,” said Edward Schwartz, chief security officer for RSA, the security arm of the EMC Corporation.

“There are three categories of hackers: Russian criminals trying to rob us blind; the Chinese who are trying to steal our secrets; and then there’s Anonymous, and a lot of them are like merry pranksters,” said Chester Wisniewski, a senior security adviser at the electronic security firm Sophos. He added: “We’re treating them all the same.”

According to the F.B.I., Mr. Keys went by the name “AESCracked” and in Internet chat rooms offered hackers access to the Fox 40 computer systems and e-mail addresses. “That was such a buzz having my edit on the LA Times,” a user named “sharpie” suspected of being associated with Anonymous wrote, according to the indictment. Mr. Keys is said to have responded, “Nice.”

When compared with recent attacks by Chinese hackers on media organizations including The New York Times, Mr. Keys’s apparent crime is “nothing,” said Josh Shaul, chief technology officer at Application Security Inc., a New York-based provider of database security software. “It’s like someone handed you the keys to a building and you used them to get in.”
https://www.nytimes.com/2013/03/18/t...thew-keys.html





Feds: No Warrant Needed to Track Your Car With a GPS Device
David Kravets

The President Barack Obama administration is claiming that authorities do not need court warrants to affix GPS devices to vehicles to monitor their every move.

The administration maintains that position despite the Supreme Court’s infamous decision last year that concluded that attaching the GPS devices amounted to search protected by the Constitution.

The administration is set to make its argument Tuesday before a federal appeals court in a case testing the parameters of the high court’s 2012 decision. If the government prevails, the high court’s ruling would be virtually meaningless.

“This case is the government’s primary hope that it does not need a judge’s approval to attach a GPS device to a car,” Catherine Crump, an attorney with the American Civil Liberties Union, said in a telephone interview.

Crump will square off on the issue Tuesday with the Obama administration before the 3rd U.S. Circuit Court of Appeals in Philadelphia.

The question of whether probable-cause warrants issued by a judge are needed is an open one because the high court stopped short of answering it. The court ruled in January, 2012, that attaching the device amounted to a constitutionally protected search because it was a trespass on a private vehicle.

Even so, in the decision’s aftermath the government disabled 3,000 GPS trackers it had installed on vehicles without warrants.

Among other things, the government is arguing that the Supreme Court has given the police broad exemptions to obtaining search warrants, such as with the oversight of school students and probationers, maintenance at the border, and even searching vehicles and luggage for drugs. That exception should apply to GPS devices, the government said.

In court papers, the authorities also told the 3rd Circuit that demanding warrants could even hinder terrorism cases:

Requiring a warrant and probable cause before officers may attach a GPS device to a vehicle, which is inherently mobile and may no longer be at the location observed when the warrant is obtained, would seriously impede the government’s ability to investigate drug trafficking, terrorism, and other crimes. Law enforcement officers could not use GPS devices to gather information to establish probable cause, which is often the most productive use of such devices. Thus, the balancing of law enforcement interests with the minimally intrusive nature of GPS installation and monitoring makes clear that a showing of reasonable suspicion suffices to permit use of a ‘slap-on’ device like that used in this case.

The case concerns three brothers, Harry Katzin, Michael Katzin and Mark Katzin — indicted on allegations of robbing a Philadelphia-area pharmacy. The authorities suspected they were behind a string of late-night pharmacy heists, and attached the device to a Dodge Caravan they believed was used in the robberies. The police did not have a warrant.

Shortly after a 2010 Rite Aid heist, officers tracked the Dodge Caravan and arrested the brothers. Inside the vehicle, they discovered the pharmacy’s surveillance system and drugs in the vehicle that was monitored for 48 hours with a GPS device.

After the Supreme Court’s GPS ruling, a federal judge tossed the evidence, saying a warrant was required to put the GPS device on the Dodge Caravan.

“This Court, however, in the final analysis, has not been persuaded that the GPS monitoring that occurred in this case is factually analogous to any existing exceptions to the warrant requirement, or merits a new exception for Fourth Amendment warrantless search or seizure law,” U.S. District Judge Gene E. K. Pratter of Pennsylvania ruled in May.

The government appealed.
http://www.wired.com/threatlevel/201...t-requirement/





Microsoft Releases Report on Law Enforcement Requests
Kevin J. O’Brien

Microsoft disclosed on Thursday for the first time the number of requests it had received from government law enforcement agencies for data on its hundreds of millions of customers around the world, joining the ranks of Google, Twitter and other Web businesses that publish so-called transparency reports.

The Microsoft report, which it said it planned to update every six months, showed that law enforcement agencies in five countries — Turkey, the United States, Britain, France and Germany — accounted for 69 percent of the 70,665 requests Microsoft received last year.

In 80 percent of requests, Microsoft provided agencies with elements of what is called noncontent data, like an account holder’s name, gender, e-mail address, I.P. address, country of residence, and dates and times of data traffic.

In 2.1 percent of requests, Microsoft disclosed the actual content of a communication, like the subject headline of an e-mail, the contents of an e-mail or a picture stored on SkyDrive, its cloud computing service.

Microsoft said it disclosed the content of communications in 1,544 cases to U.S. law enforcement agencies, and in 14 cases to agents in Brazil, Ireland, Canada and New Zealand.

“Government requests for online data are like the dark matter of the Internet,” said Eva Galperin, a global policy analyst at the Electronic Frontier Foundation in San Francisco, which has campaigned for greater disclosure.

She said that even with Microsoft’s disclosures, fewer than 10 companies published the extent of their cooperation with law enforcement agencies.

“Only a few companies report this, but they are only a very small percent of the online universe,” Ms. Galperin said. “So any one company that joins the disclosure effort is good news. The faster this becomes a standard for all Web businesses, the better.”

The law enforcement requests concerned users of Microsoft services including Hotmail, Outlook.com, SkyDrive, Skype and Xbox Live, where people are typically asked to enter their personal details to obtain service.

Google was the first major Web business in 2010 to report the level of legal requests it received for information. Since then, Twitter, LinkedIn and some smaller companies have also reported, but big businesses like Apple and Yahoo have not.

Microsoft also initially resisted. In January, a group of more than 100 Internet activists and digital rights groups signed a petition asking Microsoft to disclose its data-handling practices for Skype, the Internet voice and video service it bought in 2011.

But Microsoft did provide two new facets of detail in its transparency report that rivals have not addressed in similar fashion.

It supplied details on the reasons it rejected some requests, and it listed separate categories by country on how it responded to requests for actual content of communications and to requests for noncontent data.

In its transparency report, Microsoft also published separate information for Skype, which is based in Luxembourg and is subject to national and E.U. law.

During 2012, Microsoft disclosed in 4,713 cases administrative details of Skype accounts — like a user’s Skype ID, name, e-mail account and billing information, as well as call detail records if a person subscribed to the Skype In/Online service, which connects to a telephone number.

But Microsoft said it released no content from any Skype transmissions last year. It has said that the peer-to-peer nature of Skype’s Internet conversations means the company does not store and has no historic access to Skype conversations.

The top countries that made requests and received information from Microsoft for Skype noncontent information last year, in descending order, were Britain, the United States, Germany, France and Taiwan, which accounted for eight in 10 Skype requests.

Microsoft did not disclose the total number of requests it had received for Skype information, but said it aimed to do so starting in its next report later this year.

Brad Smith, a Microsoft executive vice president and the company’s general counsel, estimated that the number of requests Microsoft received last year covered only a tiny fraction of its huge customer base, which the company estimates to be in the hundreds of millions of users.

Mr. Smith, in a blog post, said the 2012 requests affected less than 0.02 percent of Microsoft account holders. He noted that Microsoft, like all global businesses, was obligated to comply with legal requests from law enforcement. But Mr. Smith wrote that Microsoft had set high standards for complying.

Law enforcement agencies must first present a subpoena or its foreign equivalent to obtain noncontent data about Microsoft users, Mr. Smith wrote. To obtain the contents of e-mails and other communications, the company requires agencies to submit a warrant, which in the United States are issued by court judges, and in Britain by the home secretary.

Microsoft rejected requests for data in 18 percent of cases last year, mostly because the company said it could not find any information on the individuals named or because law enforcement had not demonstrated the proper legal justification for the requests.

Microsoft also said it had received a minuscule number of requests for data on businesses.

During 2012, Microsoft said it received only 11 requests for information on business clients, and complied in four instances, after it had either obtained consent from the business or already had in effect a contract to disclose the information.

“Like every company we are obligated to comply with legally binding requests from law enforcement, and we respect and appreciate the role that law enforcement personnel play in so many countries to protect the public’s safety,” Mr. Smith wrote on his blog. “As we continue to move forward, Microsoft is committed to respecting human rights, free expression, and individual privacy.”
https://www.nytimes.com/2013/03/22/t...-requests.html





Google's Schmidt Tells Myanmar a Free Internet Can Anchor Reform
Aung Hla Tun

The Internet has the power to prevent Myanmar's leaders from backsliding on the country's rapid transformation that has taken place since the military government stepped aside two years ago, Google Executive Chairman Eric Schmidt said on Friday.

Speaking to an audience of young entrepreneurs and students in the main city of Yangon, he said the Internet can empower Myanmar's people.

"Your government had made an incredibly important political decision. Open up the country to foreign ideas, to the Internet, to your own communications, to your own newspapers," he said.

Schmidt, who raised eyebrows with a trip to North Korea in January, is visiting the former Burma as part of a trip to Asia that also took in India. He is due to meet Myanmar's president, Thein Sein, later on Friday.

The president has overseen a rapid transformation of the political and economic landscape since he took office in March 2011 after the military stepped aside following almost five decades in power.

"The Internet will make it impossible to go back," Schmidt said.

Asked for his advice on developing the sector, he said, to loud applause: "Well, first, try to keep the government out of regulating the Internet."

Newspapers and the Internet were subject to strict censorship under the military but the state has relaxed its control under Thein Sein and will allow private daily newspapers from next month.

Myanmar is Asia's newest frontier market for foreign investors. Its telecoms sector is untapped with mobile penetration among the 60 million population estimated at a meager 5-10 percent.

A planned modernization of telecoms infrastructure and an expected boom in mobile phone usage will pave the way for the entry of companies such as Google.

Google launched a version of its homepage for Myanmar, www.google.com.mm, on Thursday.

"In the next few years the most profitable business in Myanmar will be the telecommunications industry," Schmidt said.

NEW FRONTIER

A U.S. business delegation, which included Google, visited Myanmar last month to explore opportunities. The delegation, led by the U.S. Agency for International Development (USAID), looked into projects to boost access to the Internet, strengthen transparent government and expand digital literacy, USAID said.

Despite Myanmar's liberalization, human rights issues remain a dark spot on its record.

Ethnic and religious conflicts continue to fester. In the latest incident, up to 10 people died and buildings were set ablaze in the town of Meikhtila in sectarian clashes between Buddhists and Muslims.

Schmidt told his youthful audience companies like Google were a force for good. "Technology empowers individuals. One mobile phone in one village can record injustices."

(Writing by Paul Carsten; Editing by Alan Raybould and Neil Fullick)
http://www.reuters.com/article/2013/...92L0E420130322





Verizon Seeks to Abandon Landlines on Fire Island; Wireless or You Are On Your Own
Phillip Dampier

Verizon officials have announced they will abandon their damaged wireline network serving several hundred permanent residents and businesses on Fire Island, replacing voice telephone service with a wireless system called Voice Link critics say will end high-speed Internet service and hurt business.

Fire Island’s landline network has been barely functional since Hurricane Sandy struck last October. Verizon has yet to make significant repairs, leading to ongoing complaints from residents who live on the island year-round. Verizon’s wish to eventually abandon its wired network facilities entirely has created concern among island officials and public safety agencies, noting the summer population on the island swells well into the thousands.

Verizon’s plan may leave businesses unable to process credit card transactions and prevent residents from getting back DSL broadband service they lost during the storm, much less get it in the future. For some, it represents turning the clock back to the days before Internet access.

“Verizon has given us a dial tone basically,” Ocean Beach Mayor James Mallott told Newsday. “But as far as DSL, ATMs, point-of-sale systems, all the rest of that stuff, we’re pretty much on our own.”

Fire Island resident Meg Wallace notes Verizon’s plan has not gone unnoticed by the New York State Public Service Commission. The PSC is currently monitoring the situation and invites comments from interested parties.

“Right now, only Saltaire has filed a formal complaint with them, along with one village’s fire official,” Wallace reports. “It is easy to register a complaint either by filling out a complaint form on their website or calling the NYSPSC directly at (800) 342-3377. They are concerned about public opinion, so the more calls and formal complaints filed by both home and business owners the better.”

Verizon officials have defended their decision, claiming a wireless system is more robust and can withstand severe weather better than a wired network. Another reality impacting the decision is the ongoing loss of landline customers. Verizon, the sole provider on the island, has lost 25 percent of its landline business in the last two years. The company claims 80 percent of Verizon-handled calls to and from the island are through Verizon Wireless.

Verizon told local officials that Cherry Grove and points east still have undamaged fiber optic and copper lines that should be able to work as usual this summer and will be left in place for now. On the west end of the island from Kismet to Sailor’s Haven, the damage was more significant and Verizon has announced its intention to abandon wired service.

Although west end customers will be scheduled for Voice Link installations starting in April, those on the east side should not get too comfortable with their wired service because Verizon has announced it will not upgrade or make future significant repairs to its wired infrastructure going forward. When the remaining landline facilities eventually fail, affected customers will also be moved to Voice Link.

How It Works

out-of-serviceStarting April 1st, customers calling with service problems on Fire Island will be redirected to special operators trained to pitch customers the Voice Link service as a replacement. These agents will also handle billing adjustments and drop phone package features Voice Link does not support. If the customer only wants phone service, Verizon will schedule an installation date for Voice Link. A technician will arrive with a wall-mounted box about 8″ high that will be installed in the room that provides the best reception from a nearby Verizon Wireless tower. The box will then be connected to your home telephone wiring and a nearby power outlet so existing telephones will work once again. The box has battery backup powered by customer-installed and maintained AA batteries.

If a customer also had broadband service with Verizon, they will not be getting it back. Instead, an agent will attempt to sell the customer a Verizon Wireless mobile broadband package at a significantly higher cost. For example, a 10GB monthly usage plan added to an existing Verizon Wireless account will cost an extra $20 a month for the “Mi-Fi” mobile hotspot device fee and $100 a month for the data package. Verizon DSL in comparison offered unlimited access for $30-50 a month, depending on the plan selected and any promotional discounts.

Verizon said it is currently improving reception of its 4G LTE network in areas worst-affected by storm damage.

Voice Link is a voice-only product. It does not support broadband, telephone modem connections, faxing, alarm monitoring, home medical monitoring, certain communications equipment for the impaired, or other data services including credit card processing. It does support E911, which gives detailed address information to a 911 operator.

Verizon’s Voice Link also creates a problem for some satellite dish customers. Some satellite companies need a landline connection for handling pay-per-view orders. That data connection does not work with Voice Link either.

Your voice line bill will remain the same if you switch to Voice Link. But customers will lose the benefit of oversight from the Public Service Commission if things go wrong. Voice Link, unlike traditional landline service, is an unregulated service not subject to government oversight.

Voice Link: Coming Soon to Your Area?

Verizon’s Voice Link service is by no means intended to be used only on Fire Island.

Voice Link is being trialed in Florida (Project Thunder) as a landline replacement option for use in areas where Verizon’s copper network has deteriorated and the company is unwilling to spend money on fiber upgrades. If successful, Verizon intends to switch a growing number of Verizon customers nationwide outside of FiOS fiber areas to the wireless service when they report trouble with their phone lines.

Local 824 of the International Brotherhood of Electrical Workers provided insight when one of their workers attended a training class and participated in a ride-along with Verizon technicians installing the service in Florida.

John Glye reports that Verizon considers a customer a candidate for Voice Link if they have chronic phone line problems and only want traditional voice telephone service.

Currently, if customers in Florida are persuaded to switch, a migration order is created. If they want to keep the service they have, a traditional copper trouble ticket will be created and repair crews will be dispatched.

The unit is about eight inches tall and has the following connections:

• 2 RJ 11 ports
• Antenna
• Voice Message indicator
• Signal strength indicator
• Power Button
• Power Port

Installation time is about 45 minutes. The unit must be mounted inside and the customer must supply power and a safe place for the unit. The customer’s existing copper line connection from the home to the pole is disconnected/removed. In the ride-along Glye participated in, he reports the customer was pleased with the outcome, having reported constant static aggravated by rain on her copper landline. After the wireless service was installed, the static was gone and the call quality was good.
http://stopthecap.com/2013/03/20/ver...e-on-your-own/





FCC Chief Genachowski to Step Down, Touts Expanded Broadband
Alina Selyukh

Julius Genachowski said on Friday he will step down as chairman of the Federal Communications Commission in the coming weeks after four years on the job, and touted his record of working to expand broadband Internet service to Americans.

Genachowski, whose term was due to end in June, told FCC staffers he would be leaving his post "in the coming weeks" but did not give a date. He told Reuters after his announcement that he has no career plans lined up for after his FCC tenure ends.

"I'm still focused on the work of the agency," Genachowski said, adding that he expects the FCC, which maintains a Democratic majority, to keep its policy direction after he leaves.

Asked to describe his tenure at the FCC in three words, Genachowski answered "unleashing broadband's benefits."

His exit from the agency that oversees telecommunications and broadcast policies was widely expected after President Barack Obama's re-election. Obama will nominate a successor to Genachowski, who has headed the FCC since 2009.

In a statement, Obama praised Genachowski, the president's classmate at Harvard Law School, for giving the FCC a "clear focus" on encouraging innovation and competitiveness, attracting "jobs of tomorrow" and improving high-speed Internet access and mobile devices sector growth.

"I am grateful for his service and friendship, and I wish Julius the best of luck," Obama said.

The FCC is also losing its senior Republican commissioner. Robert McDowell said on Wednesday he will depart his post in a few weeks, leaving the five-member panel with two Democrats, one Republican and two vacancies.

Among the possible candidates to head the FCC is Tom Wheeler, a venture capitalist and an Obama ally and fundraiser. Wheeler headed the National Cable Television Association and the wireless industry group CTIA.

Two other possible contenders are: Lawrence Strickling, head of the National Telecommunications and Information Administration, which advises the president on telecommunications and information policy; and Karen Kornbluh, the U.S. ambassador to the Organization for Economic Cooperation and Development, an international economic body.

The next FCC chief faces a list of projects to complete. One major one is Genachowski's plan for a complex incentive auction of spectrum that is meant to free up airwaves for better wireless Internet access.

The auction relies on TV stations to give up some of their airwaves to be auctioned off to wireless companies or opened up for shared use. The broadcasters would get a portion of the proceeds and the rest would pay for a public-safety program and go to the U.S. Treasury.

Also on the list is the delayed loosening of rules on media ownership.

Asked whether he would like to see a vote on those rules before he leaves the FCC, Genachowski said only that the commission will "continue to work on the agenda."

Later this year, a federal court will also hold hearings in a case against Genachowski's net neutrality rules for Internet service providers that could have broad implications for the breadth of the FCC's regulatory power.

'AN UNEASY DANCE'

In his FCC tenure, Genachowski oversaw an overhaul of the multibillion-dollar Universal Service Fund from a project to spread telephone service in rural America to one focused on broadband access. He also spearheaded the creation of a strategy known as the National Broadband Plan and later pushed Internet providers to step up the speediness of their services.

The FCC's priorities under Genachowski reduced the influence of U.S. broadcasters, the relationship with whom has been "an uneasy dance," according to Medley Global Advisors telecommunications policy analyst Jeffrey Silva.

Also left disappointed were liberal-leaning organizations including consumer interest groups. Harold Feld of advocacy group Public Knowledge said Genachowski is leaving more tasks for his successor to finish than most of his predecessors.

"It's true to some degree of every chairman, but this chairman in particular came in with a lot of expectations," Feld said. "And then, as people say, he wrote a lot of checks that he's now leaving for the next chair to figure out how to cash."

Genachowski, who charted a centrist course in his chairmanship, defended his tenure, which also included the FCC's rejection of a landmark 2011 merger bid between U.S. No. 2 wireless carrier AT&T Inc and fourth-largest provider T-Mobile USA, a unit of Deutsche Telekom. The bid was dropped after the Justice Department sued to block the deal.

In pushing against the merger, Genachowski stood up against the prospect of a duopoly in the wireless market by AT&T and the largest carrier, Verizon, analysts say, as it retained T-Mobile as a competitor and protected the third-biggest player Sprint from being overwhelmed.

"This sector has always been and will always be characterized by a robust debate," Genachowski said.

"Some people say the commission has gone too far, some people say the commission hasn't gone far enough. What we've been focused on are the right actions to drive the economy and to improve the lives of the American people."

Genachowski came to the FCC after advising Obama on telecommunications policy and working at several tech investment firms. He had previously served as chief counsel for former FCC Chairman Reed Hundt.

(Editing by Will Dunham)
http://www.reuters.com/article/2013/...92L01L20130322





Digitally Aided Education, Using the Students’ Own Electronic Gear
Matt Richtel

Educators and policy makers continue to debate whether computers are a good teaching tool. But a growing number of schools are adopting a new, even more controversial approach: asking students to bring their own smartphones, tablets, laptops and even their video game players to class.

Officials at the schools say the students’ own devices are the simplest way to use a new generation of learning apps that can, for example, teach them math, test them with quizzes and enable them to share and comment on each other’s essays.

Advocates of this new trend, called B.Y.O.T. for bring your own technology, say there is another advantage: it saves money for schools short of cash.

Some large school districts in Central Florida and near Houston and Atlanta have already signed on, and they are fielding calls and providing tours to administrators from hundreds of other districts that are considering whether to follow their lead.

But B.Y.O.T. has many skeptics, even among people who otherwise see benefits of using more technology in classrooms.

“The schools are hoping, hoping there’s going to be a for-free solution because they don’t have any money,” said Elliot Soloway, a computer science professor at the University of Michigan who consults with many school districts about the use of computers to promote learning.

“If you look at initiatives in public education, this has the momentum.”

But Mr. Soloway also said he was “frightened” by the notion of schools using B.Y.O.T. as a quick budget fix because there was no evidence that a classroom full of students using different personal devices would enhance learning. Roy Pea, a professor of learning sciences at Stanford University, also has doubts. He is the co-author of a White House-backed National Educational Technology Plan published in 2011 that advocates for technology-centric classrooms.

But he said the B.Y.O.T. approach could be counterproductive if teachers were forced to build lessons around different devices — in effect, subverting curriculum to technology.

“Why are they so happy to have these devices when just a few years ago they didn’t want them in the classroom?” Dr. Pea asked about school administrators.

The Volusia County School District in Central Florida, bordering Daytona Beach, is one of the places that used to have signs around its schools that admonished students: no cellphones allowed. But the signs have been replaced over the last two years with new ones that read: B.Y.O.T.

Volusia school officials say that they realized they should take advantage of, rather than fight, students’ deep connections with their devices. At the same time, the district found that the cost of providing and maintaining computers for students was becoming prohibitive.

Since the change, Volusia officials say, they have not encountered many tech support problems or complaints from teachers. Rather, students are more engaged, they say, and the only problem that regularly crops up is that students forget to charge the batteries in their devices.

“It’s almost like bringing your homework,” said Jessica Levene, manager of learning technologies for the Volusia district, where 21 of 70 schools are using B.Y.O.T. “Make sure you have your device and that it’s charged.”

She conceded that students could text each other more easily now but said the school was keeping them busy on their devices. And while district administrators worried initially that poorer students would not own devices, they discovered something of “an inverse relationship” between family income and the sophistication of their devices, particularly smartphones, said Don Boulware, the district’s director of technology services.

At Woodward Avenue Elementary School in the Volusia district, fifth-grade teacher Dana Zacharko said her students tended to bring in smartphones or iPod Touches. She said she had found apps that allowed her to teach all kinds of subjects.

For instance, a recent assignment entailed learning about fractions by using an app called “Factor Samurai.” A number appears on the screen, and the student is supposed to cut it with a finger — as if slicing with a Samurai sword — so that it gets cut into smaller values. But students lose points if they try to slice through prime numbers.

Ms. Zacharko will also start class discussion on a reading assignment by asking students to use their devices to write comments in an online forum. “Their typing is amazing on these devices,” she said.

The fact that students in the same classroom can use many different devices is not a handicap because they are all using the same lessons on the Internet, said Lenny Schad, former chief information officer in the Katy Independent School District near Houston, which started a program with a different moniker: B.Y.O.D., for Bring Your Own Device.

“The Internet is the great equalizer,” Mr. Schad said.

He added that students’ devices were not meant to be a substitute for teachers, but could be used as tools for assignments. He noted that the concept was catching on; he said he had given dozens of presentations to other districts and educators about his district’s initiative.

“My message: It shouldn’t be ‘if’ we do it, it should be ‘when’ we do it,’ ” said Mr. Schad, who this year moved to the nearby Houston Independent School District, where he plans to employ a similar strategy. “I don’t know how districts can’t look at this model.”

He said that policy makers who opposed B.Y.O.T. were holding on to an unrealistic notion that districts should equip students with computers themselves.

“On a smartphone, there are no limitations,” Mr. Schad said. “This is the world they live in and we’re bringing it into the classroom.”

Another district that has adopted B.Y.O.T. is Forsyth County in Cumming, Ga., near Atlanta. Because its B.Y.O.T. program started in 2008, more than 300 people have visited in the last year from other districts around the country to learn from the district’s experience. The Forsyth district has a tour planned this spring with 160 spots for visiting educators from around the country that is fully booked.

In Forsyth, the most common devices are iPhones, iPod Touches, Android phones and tablets. They are effective for students answering multiple-choice questions on math Web sites or taking a quiz, said Anne Kohler, a special-education teacher at South Forsyth High School. She says that policy makers and others who oppose the idea of using devices in classrooms are behind the curve.

“They don’t understand how kids acquire knowledge,” she said. “They’re not the people actually doing it.”
https://www.nytimes.com/2013/03/23/t...echnology.html





Meet the Tiny, Florida-Based Phone Maker that Thinks it Can Beat Samsung

One cheap, high-end, unlocked smartphone at a time
David Pierce

Sammy Ohev-Zion starts our chat with an economics lesson. It costs every company about the same amount to manufacture a phone, he says — the price of an Nvidia processor and a Sharp display is consistent whether HTC, Nokia, or Motorola is signing the check. But those costs are only a small piece of the price you wind up paying when you walk into a Verizon store and buy that phone — which either costs upward of $500 or requires a hefty two-year contract. You're also paying for Samsung's nine-figure marketing budget, HTC's HR department, or Sony's huge New York City skyscraper. What if you could buy the same high-end phone from a company without all that cruft and overhead? How much would it cost?

Ohev-Zion, CEO of Blu Products, a relatively unknown manufacturer based in Miami, Florida, says it would cost $299. That's how much the company's latest flagship phone, the Blu Life One, will cost unlocked from Amazon or a handful of other retailers when it's available at the end of April. It's a 5-inch HD phone with a 13-megapixel camera and stock Android 4.2 (save for a Blu wallpaper), in a thin and light body that appears to hold its own next to the Galaxy and Droid devices of the world. $299 also buys the Blu Life View, with a gigantic 5.7-inch HD display, a 12-megapixel camera, and even a 5-megapixel front camera. It's not surprising that Blu's phones bear more than a passing resemblance to the iPhone and a handful of Android devices, but neither is it an accident. Ohev-Zion and Blu are betting that people want a good phone, but that they want a cheap phone more than they want a Samsung phone.

"Blu Products isn't a household name, but prices speak loudly"

You'd be forgiven for not having heard of Blu Products — it's a very small manufacturer, and has made inroads primarily with the Latin American community. But the company has larger, global aspirations, and the connections to back it up: CEO Sammy Ohev-Zion spent 17 years in distribution, working with what he calls "tier-one" manufacturers like Samsung and Motorola, before deciding to strike out on his own and create Blu.

He did so in 2009, partly because during the economic recession there weren't enough margins to pay distributors, and partly because the technology and manufacturing required to build a phone was more available than ever. "Previously," Ohev-Zion told me, "for a startup company to be able to manufacture — if you weren't one of these billion-dollar companies you didn't have the access or the technologies to make your own mobile devices." But that's all changed, and Ohev-Zion found that he could build a good phone for the same price as the other guys, and sell it for a lot less. He used his connections to get Blu phones in stock at Amazon, Newegg, Best Buy, and others, and began rolling out newer, better phones at a blistering pace. He believes, and says without a moment of hesitation, that Blu is going to be a real player in the smartphone industry sooner rather than later.

There's some evidence that Ohev-Zion's confidence isn't totally misplaced. Take Warby Parker, for instance: the company circumvented an entrenched supply chain of designers, manufacturers, suppliers, and retailers, and in doing so found a way to sell equally high-quality eyeglasses for a much lower price. Or consider Nicky Bronner, whose father's connections helped him get Unreal Candy into CVS, Target, and elsewhere — he tweaked the formula of candies like Reese's Peanut Butter Cups to only include natural ingredients, and found a huge and willing audience as soon as he had a place on shelves. Vizio may be Blu's best analog, though. "Vizio is the #1-selling TV brand," Ohev-Zion says. "Why? Because people understand, 'listen, it's the same technology and I'm getting a much better value without the enormous, billions-of-dollars overhead.'" (Incidentally, Vizio seems to have noticed this too — the company announced its first line of smartphones at CES.)

Ohev-Zion believes there's a huge and willing audience for unlocked phones, too. He pointed to the Nexus 4's success — "it sells out in like five minutes whenever there's stock available" — as evidence that people don't want to be locked in to two-year contracts, and noted that thanks to MVNOs like Simple Wireless and Red Pocket, we're no longer forced to accept AT&T's brutal contract terms. If this becomes a trend, Ohev-Zion likes Blu's odds. "A lot of other companies aren't going to be able to keep up. It's a cycle... right now I think it's going to be very tough for the manufacturers who aren't Samsung and Apple to keep selling at the high prices they're currently selling."

But the company may find itself with a new list of competitors, like Alcatel, who realize that Blu's strategy — lower overhead, lower prices — may be repeatable. And the fact remains that Apple and Samsung are successful — the market for high-end phones at high prices isn't gone yet, and given those companies' volume and supply chain control they may be able to make phones for considerably less than $150 anyway. And, of course, it's hard to compete with Samsung without matching that nine-figure marketing budget (just ask HTC).

But Blu is growing — from 70,000 units in 2009, its first year, to 4.1 million last year — and it's growing in key areas. A third of the company's 300 employees are stationed around Latin America, where they're selling both feature phones and smartphones to a region that is only slowly adopting mobile technology. But as Latin American phone use grows, so will Blu: "we're in a supreme position" in the region, Ohev-Zion says. "We're the only ones."

And if the Nexus 4's success is any indication, Blu may have trouble keeping its flagship $299 phones in stock in the US as well.

Jonathan Friedman contributed to this report.
http://www.theverge.com/2013/3/18/41...n-beat-samsung





Unwanted Electronic Gear Rising in Toxic Piles
Ian Urbina

Last year, two inspectors from California’s hazardous waste agency were visiting an electronics recycling company near Fresno for a routine review of paperwork when they came across a warehouse the size of a football field, packed with tens of thousands of old computer monitors and televisions.

The crumbling cardboard boxes, stacked in teetering rows, 9 feet high and 14 feet deep, were so sprawling that the inspectors needed cellphones to keep track of each other. The layer of broken glass on the floor and the lead-laden dust in the air was so thick that the inspectors soon left over safety concerns. Weeks later, the owner of the recycling company disappeared, abandoning the waste, and leaving behind a toxic hazard and a costly cleanup for the state and the warehouse’s owner.

As recently as a few years ago, broken monitors and televisions like those piled in the warehouse were being recycled profitably. The big, glassy funnels inside these machines — known as cathode ray tubes, or CRTs — were melted down and turned into new ones.

But flat-screen technology has made those monitors and televisions obsolete, decimating the demand for the recycled tube glass used in them and creating what industry experts call a “glass tsunami” as stockpiles of the useless material accumulate across the country.

The predicament has highlighted how small changes in the marketplace can suddenly transform a product into a liability and demonstrates the difficulties that federal and state environmental regulators face in keeping up with these rapid shifts.

“Lots of smaller recyclers are in over their heads, and the risk that they might abandon their stockpiles is very real,” said Jason Linnell of the Electronics Recycling Coordination Clearinghouse, an organization that represents state environmental regulators, electronics manufacturers and recyclers. In February, the group sent a letter to the Environmental Protection Agency asking for immediate help dealing with the rapidly growing stockpiles of the glass, much of which contains lead.

With so few buyers of the leaded glass from the old monitors and televisions, recyclers have collected payments from states and electronics companies to get rid of the old machines. A small number of recyclers have developed new technology for cleaning the lead from the tube glass, but the bulk of this waste is being stored, sent to landfills or smelters, or disposed of in other ways that experts say are environmentally destructive.

In 2004, recyclers were paid more than $200 a ton to provide glass from these monitors for use in new cathode ray tubes. The same companies now have to pay more than $200 a ton to get anyone to take the glass off their hands.

So instead of recycling the waste, many recyclers have been storing millions of the monitors in warehouses, according to industry officials and experts. The practice is sometimes illegal since there are federal limits on how long a company can house the tubes, which are environmentally dangerous. Each one can include up to eight pounds of lead.

The scrap metal industry estimates that the amount of electronic waste has more than doubled in the past five years.

A little over a decade ago, there were at least 12 plants in the United States and 13 more worldwide that were taking these old televisions and monitors and using the cathode ray tube glass to produce new tubes. But now, there are only two plants in India doing this work.

In 2009, after television broadcasters turned off their analog signals nationwide in favor of digital, millions of people threw away their old televisions and replaced them with sleeker flat-screen models. Since then, thousands of pounds of old televisions and other electronic waste have been surreptitiously unloaded at landfills in Nevada and Ohio and on roadsides in California and Maine.

Most experts say that the larger solution to the growing electronic waste problem is for technology companies to design products that last longer, use fewer toxic components and are more easily recycled. Much of the industry, however, seems to be heading in the opposite direction.

Cathode ray tubes have been largely replaced by flat panels that use fluorescent lights with highly toxic mercury in them, said Jim Puckett, director of Basel Action Network, an environmental advocacy group. Used panel screens from LCD televisions and monitors, for example, do not have much recycling value, so many recyclers are sending them to landfills.

State and federal environmental policies have also become victims of their own success. Over the past decade, environmental regulators have promoted “take-back” programs to persuade people to hand in the more than 200 million old televisions and broken computer monitors that Americans are thought to have stored away in closets, garages and basements.

The same programs have courted businesses to divert their electronic waste away from landfills to avoid the hazardous chemicals in this toxic trash from leaching into groundwater. More than 290,000 tons of the high-tech castoffs are now directed away from landfills and toward recyclers each year.

“The problem now is that the collection of this waste has never been higher, but demand for the glass that comes from it has never been lower,” said Neil Peters-Michaud, the chief executive of Cascade Asset Management, a recycling company.

Roughly 660 million pounds of the glass is being stored in warehouses across the country, and it will cost $85 million to $360 million to responsibly recycle it, according to a report released in December by TransparentPlanet, an organization focused on electronic waste research.

The stockpiling problem is especially worrisome to electronics companies and to state and federal officials since they might have to pick up part of the tab if the stockpiles were abandoned and declared federal Superfund sites.

At least 22 states have laws that make electronics manufacturers like Sony, Toshiba and Apple financially responsible for recycling their old products. But lack of oversight of these programs has led to rampant fraud. In one tactic, quietly known in the industry as “paper transactions,” recyclers buy paperwork to indicate that they collected a certain amount of electronic waste that they never actually collected.

The Obama administration, more than any of its predecessors, has strengthened oversight of electronic waste. In 2012, the General Services Administration enacted rules discouraging all agencies and federal contractors from disposing of it in landfills. The federal government, which is among the world’s largest producer of electronic waste, disposes more than 10,000 computers a week on average.

Federal agencies are failing to sufficiently track their electronic waste, and large amounts of it are still being disposed of through public or online auctions, according to a Government Accountability Office report last year. In these auctions, the waste is often sold to a first layer of contractors who promise to handle it appropriately, only to have the most toxic portion subsequently sold to subcontractors who move it around as they wish.

Some of this waste is dumped illegally in developing countries, the G.A.O. found. Congress is considering legislation to ban certain types of unprocessed and nonworking electronics and electronic waste from being exported to developing countries from the United States.

Recyclers say there is still money to be made on processing the old monitors and televisions if companies charge a price that more genuinely reflects the expense of disposing of the glass properly. But practices like “greenwashing,” whereby companies pretend to engage in environmentally responsible disposal practices, hinder such progress.

“They’re skimming off the computers, cellphones and printers that can be recycled profitably because they have more precious metals,” said Karrie Gibson, the chief executive of Vintage Tech Recyclers. “Then they stockpile the CRTs, or dump it in landfills or abroad.”

The sheer quantity of the glass accumulating at some recycling plants has contributed to environmental and workplace safety problems. In Yuma, Ariz., for example, Dlubak Glass, one of the country’s largest recyclers of glass from televisions and monitors, found itself overwhelmed.

When state regulators visited the site in 2009, they found a mountain of the lead-rich glass, several stories tall. Dust from the shimmering mound of recycled glass had contaminated the surrounding soil, including a nearby orchard, with lead at 75 times the federal limit, according to state documents.

“We have it entirely under control now,” said Herb Schall, a Dlubak plant manager.

In September, California passed an emergency measure allowing companies to send monitors and televisions to hazardous landfills for the next two years.

Charlotte Fadipe, a spokeswoman for the California Department of Toxic Substances Control, said her office’s investigation of the abandoned warehouse near Fresno is continuing, and investigators are still trying to locate Charles Li, the owner of the company, TRI Products.

Over the past four years, TRI has been paid more than $1 million by the state to recycle electronic waste from local schools, hospitals and federal agencies, including the F.B.I., the I.R.S. and Immigration and Customs Enforcement, according to state and company documents.

After a reporter found him to be running another electronic waste disposal company, Mr. Li did not respond. But when he was contacted online by another recycler and asked whether he was still looking to buy electronic waste, he immediately replied yes, with one caveat.

“Right now, we can take PC, server, telephone, printer and household e-waste,” he wrote. “I cannot take your CRT/TV as e-waste because we don’t have equipment to recycle the tubes.”
https://www.nytimes.com/2013/03/19/u...ous-trail.html





Google Fiber Expands 1GB Internet Service To Another City: Olathe, Kansas
Parmy Olson

Just minutes after the city council of Olathe unanimously voted to have Google roll out its super-fast broadband to their city, Google made its own announcement:

“Another city in the Kansas City area is getting the chance to join the growing Silicon Prairie,” Google Fiber’s community manager, Rachel Hack wrote in a blog post.

Then she added the real zinger: “Hopefully, this is the first of several announcements that we’ll be able to make about bringing Google Fiber to additional cities in the Kansas City metro area; so stay tuned.”

This seems to be further evidence that Google does not just view Kansas City as a sandbox to experiment on the rollout of its 1 gigabit, fiber-to-the-home product, but a potential new area of business. Last December Google Chairman Eric Schmidt told a conference that Fiber “isn’t just an experiment, it’s a real business and we’re trying to decide where to expand next.”

Fiber gives customers broadband that’s 100 times faster than the average U.S. connection, or one gigabit-per-second for $70 a month, or $120 for the added cable-TV service. Google began rolling out the service in the Kansas City metro area last fall, following years of planning, and is already cited as the fastest ISP in the United States by Netflix.

If it expands to other parts of the U.S. it will find other broadband providers like Comcast, Verizon and Time Warner Cable being pushed to do the same — in January the Federal Communications Commission (FCC) said it wanted to see 1 GB ethernet speeds deployed in at least one community per state by 2015.

Olathe has a population of 125,000 and will be the second big municipality after Kansas City to receive Google Fiber, though Hack said Google still had “a lot of planning and engineering to do” to bring Fiber to Olathe. Widespread access to Fiber would “help create jobs, grow local businesses, and make Olathe even stronger as it grows,” she added.

Google says that gigabit Internet offers more than just fast browsing online, but make the web a more useful and compelling communication tool. In its FAQs for Fiber, it describes chatting with doctors or teachers via a high-definition video conference (Google Hangouts, maybe?) or collaborating on work and educational projects in real time.

Olathe is about 20 miles south-west of Kansas City; image via Google Maps

The company has already divided Kansas City up into so-called fiberhoods of 125-to-1,500 households and has Fiber support staff at an office on Westport Road in Kansas City.

A write-up about Google Fiber by ArsTechnica after a brief visit to Kansas City said the service was indeed “really fast,” and “ahead of its time.” One user of Fiber commented that the most noticeable difference from normal Internet speeds was the faster upload time. Commenters also said that social and individual impact from Fiber’s speeds could only be felt after long term use of the service, not from short visits.
http://www.forbes.com/sites/parmyols...olathe-kansas/




















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