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Old 30-11-11, 10:43 AM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - December 3rd, '11

Since 2002


































"Privacy is for pedos." – Paul McMullan


"Let this be a warning to aspiring white hat 'hacker' sellouts and police collaborators: stay out the game or get owned and exposed. You want to keep mass arresting and brutalizing the 99%? We’ll have to keep owning your boxes and torrenting your mail spools, plastering your personal information all over the internets." – Anonymous


"The fight against SOPA [the Stop Online Piracy Act] may be a red herring in some ways, since IP plaintiffs are fashioning very similar remedies in court irrespective of the legislation. Thus, even if SOPA is defeated, it may turn out to be a Pyrrhic victory—opponents may win the battle but may not have gained much as a result." – Venkat Balasubramani




































December 3rd, 2011




Swiss Govt: Downloading Movies and Music Will Stay Legal
Enigmax & Ernesto

One in three people in Switzerland download unauthorized music, movies and games from the Internet and since last year the government has been wondering what to do about it. This week their response was published and it was crystal clear. Not only will downloading for personal use stay completely legal, but the copyright holders won’t suffer because of it, since people eventually spend the money saved on entertainment products.

In Switzerland, just as in dozens of other countries, the entertainment industries have been complaining about dramatic losses in revenue due to online piracy.

In a response, the Swiss government has been conducting a study into the impact downloading has on society, and this week their findings were presented.

The overall conclusion of the study is that the current copyright law, under which downloading copyrighted material for personal use is permitted, doesn’t have to change.

Their report begins with noting that when it comes to copying files, the Internet has proven a game-changer. While the photocopier, audio cassette tape and VCR allowed users to make good quality copies of various media, these devices lacked a in-built distribution method. The world-wide web changed all that.

Distribution method or not, the entertainment industries have opposed all these technological inventions out of fear that their businesses would be crushed. This is not the right response according to the Swiss government, which favors the option of putting technology to good use instead of taking the repressive approach.

“Every time a new media technology has been made available, it has always been ‘abused’. This is the price we pay for progress. Winners will be those who are able to use the new technology to their advantages and losers those who missed this development and continue to follow old business models,” the report notes.

The government report further concludes that even in the current situation where piracy is rampant, the entertainment industries are not necessarily losing money. To reach this conclusion, the researchers extrapolated the findings of a study conducted by the Dutch government last year, since the countries are considered to be similar in many aspects.

The report states that around a third of Swiss citizens over 15 years old download pirated music, movies and games from the Internet. However, these people don’t spend less money as a result because the budgets they reserve for entertainment are fairly constant. This means that downloading is mostly complementary.

The other side of piracy, based on the Dutch study, is that downloaders are reported to be more frequent visitors to concerts, and game downloaders actually bought more games than those who didn’t. And in the music industry, lesser-know bands profit most from the sampling effect of file-sharing.

The Swiss report then goes on to review several of the repressive anti-piracy laws and regulations that have been implemented in other countries recently, such as the three-strikes Hadopi law in France. According to the report 12 million was spent on Hadopi in France this year, a figure the Swiss deem too high.

The report further states that it is questionable whether a three-strikes law would be legal in the first place, as the UN’s Human Rights Council labeled Internet access a human right. The Council specifically argued that Hadopi is a disproportionate law that should be repealed.

Other measures such as filtering or blocking content and websites are also rejected, because these would hurt freedom of speech and violate privacy protection laws. The report notes that even if these measures were implemented, there would be several ways to circumvent them.

The overall suggestion the Swiss government communicates to the entertainment industries is that they should adapt to the change in consumer behavior, or die. They see absolutely no need to change the law because downloading has no proven negative impact on the production of national culture.
https://torrentfreak.com/swiss-govt-...-legal-111202/





NYU Professor Designs File-Sharing Program for Students

David Darts, a professor at NYU’s Steinhardt School of Culture, Education and Human Development, has invented a portable device that allows users to share files through an open network. The contraption, named PirateBox, essentially enables people in the vicinity to access a public WiFi connection, whereby they are also able to upload and share files anonymously, and chat with other users anonymously as well.

The original idea came when he wanted to find a way to help his students produce collaborative art projects through the use of open-source software and social media. However, he wanted the students to be able to share their large files quickly and easily.Taking the idea of public access to the next level, Darts decided to post the blueprint for making the device on his website, but with a Free Art License, disallowing anyone from patenting any similar device. Access to the network is completely anonymous, unlike normal internet connection, which keeps logs and IP addresses able to track users.

Shortly after its conception, the PirateBox received critical acclaim from the popular geek blog, Boing Boing, which subsequently caused massive public response. People from around the world began emailing Darts so according to The Square, he started an online blog allowing people to post questions, comments and ideas regarding the PirateBox. The conversations have since sparked others to pursue creating their own versions of the device. One individual built an alternative the could run on a laptop alone; and another built one that runs from an Android phone.
http://nyconvergence.com/2011/11/nyu...-students.html





SOPA on the Ropes? Bipartisan Alternative to 'Net Censorship Emerges
Nate Anderson

The Senate's PROTECT IP Act and the House's Stop Online Piracy Act (SOPA) are so noxious that even the Business Software Alliance has serious reservations, and SOPA's main backer had to take to the virtual pages of National Review today to quell a growing revolt among his conservative colleagues about "regulating the Internet." Whatever you think of the legislation, it unquestionably represents a sea change in the US approach to the Internet, one which explicitly contemplates widespread website blocking and search engine de-listing.

The level of debate on an issue this important has been... suboptimal. (And hearings have been rather lopsided affairs). Just listen to the rhetoric of SOPA author Lamar Smith: "Enforcing the law against criminals is not censorship." Pithy, sure, but it doesn't relate to any actual objections put forth by thoughtful critics.

But rightsholders do need some means of enforcing copyrights and trademarks, something tough to do when a site sets up overseas and willfully targets American consumers with fake goods and unauthorized content. Some sites can be leaned on when hosted in friendly countries, but many simply thumb their nose at US law with impunity. If you can't go after the sites at the source, and you can't lure their operators to the US (both tactics used with success in other cases), what's left but blocking site access from within the US?

Fortunately, plenty can be done, and it can be done in a way that doesn't raise the same immediate concerns about due process and censorship. One promising alternative was unveiled today by a bipartisan group of 10 senators and representatives. It ditches the “law and order” approach to piracy and replaces it with a more limited, trade-based system.

And the legislators behind it have put out a draft of the idea for public comment before they even begin drawing up actual legislation. (Does the Smoky Back Room industry know about this threatening behavior?)

Less cops and robbers, more trade policy

Here's the plan, according to a draft seen by Ars Technica: online piracy from overseas sites will be taken away from the Attorney General and moved out of the courts. Instead, power will be vested in the International Trade Commission, which already handles IP disputes relating to imports (the ITC is heavily involved in the recent patent wars around smartphones, for instance).

The government won't bring cases, either; rightsholders can petition the ITC for a "cease and desist" order, but only when the site in question is foreign and is "primarily" and "willfully" violating US law. Sites would be notified and would have a right to be heard before decisions are made in most cases, and rulings could be appealed to a US court if desired by either party. ("Urgent" requests could get preliminary and temporary letters based on a one-sided hearing, but the process also envisions "sanctions" for any company that tries to abuse the ITC process.)

Sites which are truly bent on counterfeiting and piracy are unlikely to pay much attention to a US-based cease and desist order, of course, so the new plan envisions two remedies. If such an order is issued, Internet advertising firms and financial providers would have to stop offering credit card payments and ads to the site in question. Website blocking by ISPs and DNS providers is not part of the plan, nor would search engines or others be required to remove links to such content.

The two-page draft of the plan is being issued so that "the public can provide us with feedback and counsel before the proposal is formally introduced in the House and the Senate." And clearly, feedback would be useful. Can such a "follow the money" plan do anything about noncommercial piracy, for instance? Should it try to do so? But the whole shift in tone marked by the new approach looks far more promising than anything likely to come out of the mess that is SOPA.

Who's behind all of this sweet sanity? Senators Wyden (D-OR), Cantwell (D-WA), Moran (R-KS), and Warner (D-VA); Reps. Chaffetz (R-UT), Campbell (R-CA), Doggett (D-TX), Eshoo (D-CA), Issa (R-CA), and Lofgren (D-CA).
http://arstechnica.com/tech-policy/n...ip-emerges.ars





White House-Backed Antipiracy Video is Reefer Madness for the Digital Age
Nate Anderson

No less an official than US Attorney General Eric Holder rolled out yesterday's new government-backed public relations war on piracy.

"In just a few moments, we'll be unveiling a series of television, radio, and Internet messages designed to help get the word out about the dangers of buying counterfeit goods, and the seriousness of intellectual property theft," he said at the press conference.

Holder seemed proud of the new push to educate Americans about the perils of Internet downloads and online prescriptions, and why not? His briefing on the plan probably made it all sound hip and informative. Then came the actually video. "Lurid" doesn't begin to describe the one-minute spot, which begins with two teenagers looking at a pirated DVD on the street and then moves in whiplash-inducing fashion to drugs, gang violence, child labor, and thugs sitting around looking generally evil and counting their phat loot. The video does for "piracy" what "reefer madness" and "hairy palms" did for an older generation's social ills.

As you watch the video below, remember: your tax dollars helped pay for this.

When you buy pirated DVDs, the gangsters win

The whole campaign is run by the National Crime Prevention Council (NCPC), the group responsible for McGruff the Crime Dog. McGruff, the "take a bite out of crime" super-sleuth, is recognized by 49 percent of younger adults and teens, says NCPC, which plans to make McGruff "a valuable asset in educating people about intellectual property theft." The White House, the Department of Justice, and Immigrations & Customs Enforcement are all onboard.

All of which would lead us to hope that the claims made here have some connection to reality. Fortunately, the ills of piracy have been toned down a bit from 2008, when US Attorney General Michael Mukasey linked piracy to terrorism. In 2005, the MPAA's director of anti-piracy operations linked film piracy to "business-minded thugs who fund this activity through money raised from other illicit activity such as drug dealing, gun running, and human trafficking (utilizing the same distribution networks), and who, in turn, fund these other activities through the money they raise through piracy."

Today, the claims are a bit more modest and focus more on lost jobs than on terrorism and human trafficking, but officials still insist that piracy funds widespread gang and criminal activity. Today's claim may be true, since the new campaign covers all manner of counterfeit clothes, shoes, and drugs in addition to online and DVD piracy. But, as the video above shows, the differences between those forms of counterfeiting are routinely elided—and the differences matter.

Most research on piracy comes from interested parties, but the best academic, worldwide look at the issue comes from major report Media Piracy in Emerging Economies, a 400+ page book that took three years and 35 researchers to write. Their conclusion on this issue is worth quoting at length:

We found no evidence of systematic links between media piracy and more serious forms of organized crime, much less terrorism, in any of our country studies.

What explains this result? Invariably, the rationale offered for criminal-syndicate and terrorist involvement is that piracy is a highly profitable business. The RAND report, for example, states (without explanation) that “DVD piracy... has a higher profit margin than narcotics”—an implausible claim that has circulated in industry literature since at least 2004.

We think the record is clear that piracy was a highly profitable business through the early 2000s, when optical disc production facilities were expensive, industrial in scale, and relatively scarce... We see no evidence that piracy, outside a few niche markets, is still a high-margin business.

Increasingly, commercial pirates face the same dilemma as the legal industry: how to compete with free. This decline in costs is, in our view, the primary factor shaping pirate markets and a growing disincentive for traditional organized-criminal involvement. Yet, to the best of our knowledge, no industry or law enforcement statements about alleged criminal connections have thought this worth mention. As in other contexts, the issue is avoided by conflating piracy and counterfeiting under the rubric of what Interpol calls "IP crimes."


The print campaign features five different ads, each focusing on a specific form of piracy or counterfeiting. The one focused on movies stresses the job loss aspect over the "scary gangster in an SUV" approach, but even this claim is overblown. As the major copyright industries revealed in a recent report, they pay better than most American jobs, are outperforming the economy, and are selling record amount of product overseas. As for employment, it has fallen just mildly during the worst economic slump in 80 years.

Piracy and counterfeiting can be serious problems that conceal real social ills behind the facade of cheap goods, but when it comes to media piracy, at least, too many campaigns rely on scare tactics and bad statistics.
http://arstechnica.com/tech-policy/n...igital-age.ars





Telcos Volunteer to Help Police Piracy
Karl Quinn and Ben Grubb

Piracy: are we being conned?

Australian internet users face an increased risk of prosecution if they pirate online, with five large ISPs proposing to act on suspected infringement notices provided to them from rights holders by passing on the notices to users and, in the most extreme circumstances, disclosing the details of alleged pirates.

Under a proposal released by telecommunications industry body the Communications Alliance, users will receive an "education notice" if they are suspected of pirating content like movies. If they persist, they will be issued with up to three warning notices within a 12-month period. If a user continues to pirate content after that, they would then face the prospect of having their details passed on to copyright holders, allowing them to institute legal action.

A spokesman for federal Communications Minister Stephen Conroy welcomed "the industry working towards a solution to the issue of piracy" and said the government had been "encouraging the parties to work together for some time because it is important any proposed solution is supported by both ISPs and the content industries".

The Communications Alliance claims the experience in France — which employs a three-strikes policy at the end of which persistent infringers are disconnected from the internet — shows that "only 0.1 per cent of users who receive a first notice will continue their activities and receive a third notice".

"The majority of infringers are casual infringers, not hard core," said Communications Alliance CEO John Stanton. "Once they know that their activity can be detected, and has been, we think they'll take the opportunity to change their behaviour."

ISPs will not monitor user connections but will rely on rights holders sending them notices of suspected infringements they have detected by monitoring file sharing networks for illegal uploading and downloading.

To get user details, copyright holders will need to apply for a court order, as they are required to now.

The Australian ISPs that have agreed to help in policing infringements are Telstra BigPond, Optus, iiNet, iPrimus and Internode.

The proposal, which the Communications Alliance wants trialled for an 18-month period, represents a major reversal of tactics by the ISPs in the copyright wars.

The about-face comes just days before the High Court is due to hear an appeal by The Australian Federation Against Copyright Theft (AFACT), which represents many of the largest entertainment industry rights holders in Australia, against a Federal Court judgment in February that found telco iiNet was not responsible for copyright infringement by its clients.

But if the proposal was meant to dissuade the rights holders from pursuing their case it has failed. In a statement, AFACT said it was "focused" on the High Court appeal this week and would "not be commenting on anything but the case at this time". The group wants iiNet to be held entirely accountable for policing copyright infringements on its network.

Foxtel was unimpressed, damning the proposal as "self serving, defective and not in the spirit of our agreed approach".

ISP iiNet's chief regulatory officer Steve Dalby was blunt about the Communications Alliance plan not representing an "agreement". He said it may not come into effect if there was not enough support for it. "It's a proposal," Mr Dalby said. "There is no 'date of effect'. If there is insufficient support, it'll wither on the vine."

He said the proposal would test the claim rights holders had been promoting that about 70 per cent of people notified would stop infringing after their first or second notice.

"If 70 per cent of infringements cease, it would be a very cheap way of reducing their claimed losses of $900 million per annum. A great investment. It does have costs for ISPs, however, with no balancing benefits flowing to them."

He added that to get user details copyright holders would need to get a court order. "That hasn't changed.

"They will have to convince a Federal Court magistrate or similar that the ISP should be ordered to disclose customer details," Mr Dalby said.

Unlike the French scheme, the proposal does not provide for termination of consumers' internet accounts, nor for any punitive sanctions to be imposed on customers by ISPs. It also gives consumers the right to appeal if they receive a notice but believe they have not done anything improper.

“We believe the notice scheme can greatly reduce online copyright infringement in Australia, while protecting consumer rights, educating consumers about how to access legal online content and helping rights holders to protect their rights,” the alliance's John Stanton said.

He added that it was important for rights holders to ensure that consumers had access to "legal and affordable content" online, to "reduce the motivation to source content in ways that might be illegal".

Meanwhile, the Movie Rights Group, which emerged last month with plans to take legal action against people who had illegally downloaded the film Kill The Irishman, has gone to ground following an investigation by Fairfax that revealed the links of its owners, Gold Coast brothers Matthew and Richard Clapham, to the porn industry.

The group’s website is no longer functional, and Theresa Lloyd, of Brisbane firm Lloyds Solicitors, said: "We no longer have any association with Movie Rights Group."
http://www.mooneevalleyweekly.com.au...y/2372974.aspx





Koppla VPN Banned for User Torrent Activity
Urban Sundström

A small VPN service, Koppla, has had its service terminated by its host, Santrex Hosting Solutions. Despite actively advertising their services to be oriented toward file-sharing including torrents and XDCC, even going so far as to put “Seedbox Hosting | An Effective Solution” in the title of their contact page, the UK based Santrex will independently act to terminate users who are thought to be distributing content that they don’t own the copyright to. This is regardless of whether the infringement is done by a third party, as is the case with a VPN service such as Koppla who received only this generic explanation for the abrupt discontinuation of their hosting service.

Your server has been suspended due to malicious traffic, this is either port scanning or torrent / warez downloading.

Under Santrex’s TOS it is clear that they will terminate service for anything they perceive to be infringing activity, specifically stating that their customers will be held liable for the activity of a third party using their service.

Third Party Accountability: santrex.net subscribers will be held responsible and accountable for any activity by third parties, using their account, that violates guidelines created within the Acceptable Use Policy.

Unfortunately, copyright law in the UK calls this “secondary infringement” which includes knowingly enabling or assisting in copyright infringement. However, the ECJ has just ruled that service providers are not obligated to monitor for such traffic and are safeguarded by the E.U. Charter of Fundamental Rights.

This ruling may have finally established a safe harbor for ISPs in the EU as it would be pretty difficult to claim secondary infringement when there is no obligation for service providers to have knowledge of user activity. It is unreasonable to expect that this is possible or feasible anyway.

Perhaps this ruling came a bit too late for Koppla, but the implications look good for the future. Green Pirate caught up with on of the owners of Koppla who did not seem too deterred by the current interruption in service.

TBH, I’m not really all that concerned as it was never that great a connection…always dropping off. However I suppose you get what you pay for. [...] I got what I paid for ;)

Perhaps under the new ECJ ruling, smaller services will no longer have to sacrifice their rights as a bargaining chip for affordable service.
http://blog.greenpirate.org/koppla-v...rent-activity/





The Pirate Bay Dancing for Firefox Bypasses National IP and DNS Blocks

Firefox: If you're living in a location where local DNS and IP blocks keep you from visiting certain websites, The Pirate Bay Dancing is an extension that undoes that automatically by routing you through random proxy servers.

You can set which websites activate the redirects and the add-on does the rest of the work. Its goal is to easily and quickly redirect you around country specific blocks under the hood, without you having to find and choose your own proxy. If you're in a country where say, Google is blocked, you can set it so it automatically loads the site on a proxy server on future visits.
http://lifehacker.com/5863932/the-pi...and-dns-blocks





About Global Chokepoints

Global Chokepoints is an online resource created to document and monitor global proposals to turn Internet intermediaries into copyright police. These proposals harm Internet users’ rights of privacy, due process and freedom of expression, and endanger the future of the free and open Internet. Our goal is to provide accurate empirical information to digital activists and policy makers, and help coordinate international opposition to attempts to cut off free expression through misguided copyright laws, policies, agreements and court cases. Scroll down to see a list of countries currently featured for threatening free expression through copyright censorship. Learn more.

Our site is created and maintained by free speech advocates worldwide. Want to help us grow? Contact us.
http://www.globalchokepoints.org/





US Judge Orders Hundreds of Sites "De-Indexed" from Google, Facebook
Nate Anderson

After a series of one-sided hearings, luxury goods maker Chanel has won recent court orders against hundreds of websites trafficking in counterfeit luxury goods. A federal judge in Nevada has agreed that Chanel can seize the domain names in question and transfer them all to US-based registrar GoDaddy. The judge also ordered "all Internet search engines" and "all social media websites"—explicitly naming Facebook, Twitter, Google+, Bing, Yahoo, and Google—to "de-index" the domain names and to remove them from any search results.

The case has been a remarkable one. Concerned about counterfeiting, Chanel has filed a joint suit in Nevada against nearly 700 domain names that appear to have nothing in common. When Chanel finds more names, it simply uses the same case and files new requests for more seizures. (A recent November 14 order went after an additional 228 sites; none had a chance to contest the request until after it was approved and the names had been seized.)

How were the sites investigated? For the most recent batch of names, Chanel hired a Nevada investigator to order from three of the 228 sites in question. When the orders arrived, they were reviewed by a Chanel official and declared counterfeit. The other 225 sites were seized based on a Chanel anti-counterfeiting specialist browsing the Web.

That was good enough for Judge Kent Dawson to order the names seized and transferred to GoDaddy, where they would all redirect to a page serving notice of the seizure. In addition, a total ban on search engine indexing was ordered, one which neither Bing nor Google appears to have complied with yet.

Missing from the ruling is any discussion of the Internet's global nature; the judge shows no awareness that the domains in question might not even be registered in this country, for instance, and his ban on search engine and social media indexing apparently extends to the entire world. (And, when applied to US-based companies like Twitter, apparently compels them to censor the links globally rather than only when accessed by people in the US.) Indeed, a cursory search through the list of offending domains turns up poshmoda.ws, a site registered in Germany. The German registrar has not yet complied with the US court order, though most other domain names on the list are .com or .net names and have been seized.

The US government has made similar domain name seizures through Operation In Our Sites, grabbing US-based domains that end in .com and .net even when the sites are located abroad. Such moves by themselves would seem to do little to stop piracy in the long-term; they simply teach would-be miscreants to register future domain names in other countries.

Why wait for SOPA?

Lawyer Venkat Balasubramani, writing about the case yesterday, sums it up eloquently: "Wow."

"I'm sympathetic to the 'whack-a-mole' problem rights owners face, but this relief is just extraordinarily broad and is on shaky procedural grounds," he writes. "I'm not sure how this court can direct a registry to change a domain name's registrar of record or Google to de-list a site, but the court does so anyway. This is probably the most problematic aspect of the court's orders."

Rightsholders have asked Congress to write these provisions (and a few more) into law, and they have pushed for government seizures like those from Operation In Our Sites (which just seized another batch of new domains this last weekend). But as Balasubramani points out, cases like Chanel's show that rightsholders can already get what they want from judges, and they can go after far more sites more quickly than the government.

"The fight against SOPA [the Stop Online Piracy Act] may be a red herring in some ways," he notes, "since IP plaintiffs are fashioning very similar remedies in court irrespective of the legislation. Thus, even if SOPA is defeated, it may turn out to be a Pyrrhic victory—opponents may win the battle but may not have gained much as a result."
http://arstechnica.com/tech-policy/n...g-facebook.ars





BitTorrent Defense Lawyer Joins Copyright Trolls
Ernesto

DC attorney Mike Meier was initially well-known as a defense attorney for BitTorrent users, but in recent months he’s made an interesting career move. Perhaps recognizing that more money could be made with a slight shift in focus, Meier has joined the “other” side, suing hundreds of BitTorrent users on behalf of copyright holders.

When the mass-BitTorrent lawsuits were starting to crop up in the United States last year, attorney Mike Meier was quick to promote himself as a defense lawyer.

The DC attorney was proudly listed on the Electronic Frontier Foundation’s list of lawyers who can help out people targeted in infringement cases, and in the press he scoffed at copyright holders and their “extortion” practices.

Not anymore though.

Those who take a look at Meier’s website today will see that he’s shifted the focus of his business 180 degrees. As first spotted by Sophisticated Jane Doe, the attorney is now teaming up with several copyright trolls to shake down BitTorrent users.

The redesign of his website is quite revealing.

Thus far Meier has sued more than 1,000 BitTorrent users, which he proudly boasts on his site. But at the speed he’s filing suits it wouldn’t be a surprise if his list of targets doubles before the end of the year.

In all honesty, as an attorney Meier is just doing his job. There are no regulations that prohibit him from making the move. But, from someone who previously said that copyright trolls are “basically extorting money”, it is unexpected to say the least.

“In my opinion, they are bill collectors for the movie industry,” he said in an interview with PilotOnline.com. “They’re basically extorting money.”

In another interview, before the career switch, Meier also had his doubts about the evidence collecting practices in these mass-BitTorrent lawsuits.

“There are multiple reasons why the law firms may have tracked down the wrong person. For example, someone may have downloaded a movie through a Wi-Fi network used by many people, or a minor child may have used the parents’ computer. Finally, there is the human or computer error factor, maybe the user was actually out-of-town when the alleged download occurred,” he said.

We assume that his take on the situation has changed somewhat, now that he’s getting a piece of every settlement that’s “extorted” from falsely accused people. But everything has its price, doesn’t it?
https://torrentfreak.com/bittorrent-...trolls-111126/





Horror Show: Hollywood vs. Silicon Valley

To protect copyright, the movie industry favors legislation that would strangle the Internet.
L. Gordon Crovitz

Washington regulating the Internet is akin to a gorilla playing a Stradivarius. Yet many legislators are being urged to play by lobbyists for Hollywood, perhaps the most technology-intolerant industry.

The Motion Picture Association of America is the leading proponent for legislative proposals with ostensibly benign titles—the Stop Online Piracy Act in the House and the Protect Intellectual Property Act in the Senate. These bills would go so far to protect copyright that they would strangle the Internet with regulation. The Web would be transformed from a permissive technology where innovation is welcome to one where websites are shut down first, questions asked later.

The legislation has bipartisan support and could come up for a vote before the end of the year. If it passes, the government will take down an entire website when a copyright holder claims an infringement online. A violation could be a single link on a single page, such as user-generated content that includes a movie clip or song lyric.

It would also be unlawful for a site to "avoid confirming a high probability" of infringement. This is legalese to make websites responsible for anything posted on them or potentially posted on them by third parties. Payment providers, ad networks and search engines would get infringement notices barring them from working with these sites, which would put the sites out of business before any violation is proven.

Silicon Valley has belatedly realized it must fight the new proposals. Fred Wilson, a New York venture capitalist, recently hit the corridors in Washington and wrote on his blog: "Venture capitalists will think more than twice about putting $3 million of early-stage capital into startups if they know that the vast majority of the funds will go to pay lawyers to defend the companies instead of to hire engineers to create and build product."

"Facebook, Twitter and YouTube were three-person startups not so long ago," Mr. Wilson wrote. Each "could have been litigated out of business before they had a chance to grow," because all have inadvertently permitted violations of copyright by users.

The proposed changes to the law would effectively repeal the Digital Millennium Copyright Act. This created a safe harbor in 1998 for online providers so long as they agreed to cut off users who violate copyright. Rights holders use a "notice and take down" process. Sites such as Facebook and YouTube comply with more than 10,000 such takedown notices a year, but they are not directly liable for infringements any more than phone companies are liable when people speak on the phone to plan a crime. This has allowed the Web to grow while providing copyright protection.

Laws can suppress technology, but "as the information economy increasingly becomes the only economy, regulators around the world are looking for ways to assert their authority," warns technology consultant Larry Downes, writing on the CNET site. According to McKinsey, the Internet accounts for more than 3% of GDP in the largest countries, more than agriculture or energy; represents more than 20% of economic growth over the past five years; and is a net producer of new jobs, creating more than twice as many jobs as it displaces.

It's not surprising that industries would seek more protection regardless of the unanticipated consequences on technology more broadly. But the most effective solutions to problems caused by technology don't involve government enforcement. The movie industry says 90% of pirated movies are from illegal recordings made in theaters using video cameras; the industry now enforces its rights using technology to trace pirated copies back to individual theaters. Hollywood is now happy to work with services such as Netflix, which increasingly sell or rent digital versions. Similarly, the music industry fought Napster but now relies on iTunes.

Private action is often more effective than laws. There was an outcry when credit card companies cut off WikiLeaks, drying up its contributions. Internet freedom is better protected through contract—when WikiLeaks violates terms of use, it gets cut off—than by overbroad legislation. Likewise, the Techdirt website disclosed that Universal Music included in a list of "infringing sites" the personal website of one of its stars, the hip-hop musician 50 Cent. Instead of whining to Congress, Universal should revise its contracts with its recording artists.

Hollywood is playing to stereotype, hoping to suppress technology as it did in 1982, when the late industry lobbyist Jack Valenti said the invention of the VCR was to the "American film producer and the American public as the Boston Strangler was to the woman home alone." Hollywood has since also fought DVD players, DVRs and MP3 players.

Technology makes many things possible, good and bad. One thing that seems a mission impossible is having laws keep up with the pace of change on the Internet. Hollywood's effort to create a different story line for the future of the Web is a horror show. Lawmakers should walk out.
http://online.wsj.com/article_email/...zEyNDcyWj.html





Copyright Corruption Scandal Surrounds Anti-Piracy Campaign
Ernesto

Anti-piracy group BREIN is caught up in a huge copyright scandal in the Netherlands. A musician who composed a track for use at a local film festival later found it being used without permission in an anti-piracy campaign. He is now claiming at least a million euros for the unauthorized distribution of his work on DVDs. To make matters even worse, a board member of a royalty collection agency offered to to help the composer to recoup the money, but only if he received 33% of the loot.

A story currently unfolding in the Netherlands painfully exposes the double standards and corruption that can be found in some parts of the copyright industry.

It all started back in 2006, when the Hollywood-funded anti-piracy group BREIN reportedly asked musician Melchior Rietveldt to compose music for an anti-piracy video. The video in question was to be shown at a local film festival, and under these strict conditions the composer accepted the job.

However, according to a report from Pownews the anti-piracy ad was recycled for various other purposes without the composer’s permission. When Rietveldt bought a Harry Potter DVD early 2007, he noticed that the campaign video with his music was on it. And this was no isolated incident.

The composer now claims that his work has been used on tens of millions of Dutch DVDs, without him receiving any compensation for it. According to Rietveldt’s financial advisor, the total sum in missed revenue amounts to at least a million euros ($1,300,000).

The existence of excellent copyright laws and royalty collecting agencies in the Netherlands should mean that the composer received help and support with this problems, but this couldn’t be further from what actually happened.

Soon after he discovered the unauthorized distribution of his music Rietveldt alerted the local music royalty collecting agency Buma/Stemra. The composer demanded compensation, but to his frustration he heard very little from Buma/Stemra and he certainly didn’t receive any royalties.

Earlier this year, however, a breakthrough seemed to loom on the horizon when Buma/Stemra board member Jochem Gerrits contacted the composer with an interesting proposal. Gerrits offered to help out the composer in his efforts to get paid for his hard work, but the music boss had a few demands of his own.

In order for the deal to work out the composer had to assign the track in question to the music publishing catalogue of the Gerrits, who owns High Fashion Music. In addition to this, the music boss demanded 33% of all the money set to be recouped as a result of his efforts.

The conversation between Gerrits and the composer’s financial advisor was recorded by Pownews, and during the conversation the financial advisor confronts Gerrits with his unconventional proposal.

“Why do you have to earn money?” he asks, as usually all of the money goes directly to the artists.

“It could be because a lot of people in the industry know that they are in trouble when I get involved,” Gerrits responds, adding that he can bring up the topic immediately in a board meeting next week.

Once again trying to find confirmation for the proposal, the composer’s advisor later asks if the music boss indeed wants one-third of the money.

“Yes, that’s the case, but then [the composer] would make 660,000 euros and now he has nothing,” Gerrits responds calmly.

The seemingly corrupt practices of Gerrits resulted in mass disbelief among many Dutch viewers and today the news is being reported by several mainstream outlets in the Netherlands. As a result of the controversy, Gerrits quickly decided to temporarily resign as Buma/Stemra board member to focus on his defense.

Responding to the press, Gerrits further claims that he was somehow “misinterpreted,” but unfortunately for him the recordings leave little room for that.

BREIN director Tim Kuik, whose organization is accused of distributing the unauthorized copies, noted to TorrentFreak that this is a contractual issue in which BREIN is not involved. Kuik further said that BREIN is not the distributer nor the client in this case.

Whatever BREIN’s role in this case, there is little doubt that someone in the movie industry failed to pay the composer. And instead of standing up for the rights of a musician, a board member of the music royalty collection agency tried to exploit the situation for financial gain.

Sickening.

Update: Pownews’ written report no longer references BREIN’s involvement in the case. Although BREIN is responsible for many anti-piracy warnings on DVDs in The Netherlands, the video described in this article was made for another party related to the movie industry. This confirms the statement of BREIN director Tim Kuik.

Update: Dutch politicians, musicians and a Buma/Stemra board member are shocked by the revelations and describe Gerrits’ actions as “corrupt,” a “money grab” and “mafia-like.” Politicians want more transparency from the royalty collecting agency, and will debate the issue in parliament.
https://torrentfreak.com/copyright-c...aign-111201/?_





Movie Studios Force Lovefilm to Drop Flash Streaming

No more movies for older Mac and Linux users
Jon Martindale

DVD rental and movie streaming service Lovefilm has announced that it will be moving over to Microsoft's Silverlight for its video-on-demand from the previous Flash platform, leaving Linux users without the ability to stream films on the site.

"Change is always tricky. Not many of us like it, it can be unsettling, and most of us would prefer things to stay just as they are. Unfortunately, that doesn’t seem to be how life works," begins the reluctant-sounding statement released by the company.

A couple of sentences later, things become a little clearer. It's revealed that movie studios "asked" Lovefilm to make the change over from Flash to Silverlight.

Of course, pirates take the blame, the studios insisting that the streaming service to "use robust security to protect their films from piracy, and they see the Silverlight software as more secure than Flash".

The request was backed up by a pretty stern threat, too: Lovefilm reveals that "without meeting their requirements, we’d suddenly have next-to-no films to stream online."

While the rental and streaming company was keen to express that this change wouldn't affect its service to platforms such as the PS3, iPad, internet TVs and others, older Apple Macs without Intel CPUs and Linux users will no longer be able to stream movies.

Returning to what sounds like a statement that had been written on its behalf, Lovefilm followed up with: "Silverlight offers the best combination of security, quality and customer experience from a small number of available solutions, and the majority of our customers already have Silverlight installed."

The statement ended by explaining that Flash would continue to be used until January 2012, after which it all streaming would use Silverlight.

The move appears to be yet another example of vopyright holders such as movie studios deciding it's more important for their content to be "secure" than for people to actually be able to watch it. The switch seems especially confusing given that it's widely considered that there isn't much of a future for Silverlight. Even Microsoft doesn't appear to be a huge fan of it these days...
http://www.thinq.co.uk/2011/12/1/mov...ropping-flash/





Free Software Activists to Take on Google with New Free Search Engine

Peer-to-peer search offers an alternative to the big incumbents
Jennifer Baker

Free software activists have released a peer-to-peer search engine to take on Google, Yahoo, Bing and others.

The free, distributed search engine, YaCy, takes a new approach to search. Rather than using a central server, its search results come from a network of independent "peers," users who have downloaded the YaCy software. The aim is that no single entity gets to decide what gets listed, or in which order results appear.

"Most of what we do on the Internet involves search. It's the vital link between us and the information we're looking for. For such an essential function, we cannot rely on a few large companies and compromise our privacy in the process," said Michael Christen, YaCy's project leader.

The project is supported by the Free Software Foundation Europe (FSFE), which is concerned that dominant search engines have too much control and power over what information Internet users can find online. "That company will also know what you're currently interested in. The search terms used tell others a lot about what you're up to. Targeted advertising is only the most benign use of this data," explained Karsten Gerloff, FSFE president.

"We are moving away from the idea that services need to be centrally controlled. Instead, we are realizing how important it is to be independent, and to create infrastructure that doesn't have a single point of failure," added Gerloff.

The YaCy network currently has around 600 'peers', but project organizers expect this to grow along the lines of other free software projects that aim to replace centrally-run services. For example, identi.ca (status.net) offers a free software alternative to Twitter; diaspora (joindiaspora.com) and many others provide a free, distributed alternative to Facebook.

As is often the case in the early stages of a new technology, results are better on some topics than on others -- mainly computer-related issues.

The YaCy peers create individual search indexes and rankings, so that results better match what users are looking for over time. Each instance of the software contains a peer-to-peer network protocol to exchange search indexes with other YaCy search engines.

Everyone can try out the search engine at http://search.yacy.net/. Users can become part of YaCy's network by installing the software on their own computers. YaCy is free software, so anyone can use, study, share and improve it. It is currently available for GNU/Linux, Windows and MacOS. The project is also looking for developers and other contributors.
https://www.networkworld.com/news/20...ke-253488.html





EU: Copyright Doesn't Cover Functionality, Programming Language
Thom Holwerda

The European Court of Justice, the highest court in the European Union, is kind of on a roll lately. We already discussed how they outlawed generic ISP-side internet filters, and now, in an opinion (so it's not a ruling just yet), Yves Bot, an advocate-general at the Court, has stated that functions provided by computer programs, as well as the programming languages they're written in, do not receive copyright protection. The opinion is very well-written, and relatively easy to read and grasp.

Currently, SAS Institute, Inc. is suing World Programming for copyright infringement. SAS claims that by implementing the same functionality, using the same programming language, as is present in SAS' software, World Programming is violating SAS' copyright. The crucial thing here is that World Programming has not had any access to SAS' source code.

SAS creates something known as the SAS System, a set of software programs to collect, store, analyse, and manipulate data. Using the SAS Language, people can extend the functionality of the SAS System. The problem was that if a customer wanted to switch away from SAS, he had no choice but to rewrite his programs; the SAS Language only works with SAS' software, meaning total vendor lock-in.

This is where World Programming comes in. They developed an alternative to the SAS System, dubbed the WPL System, which allowed customers to run programs written in the SAS Language without using the SAS System. They had no access to any of SAS' source code whatsoever, so they had to write it from scratch.

As a result, SAS sued World Programming, arguing that reverse engineering SAS constituted copyright infringement - not just of the source code itself, but also the manuals for the SAS System (since the functionality was alike, I presume). In addition, SAS also contents that World Programming violated the license of the SAS System Learning Edition (probably by using it to better understand SAS, and therefore, violate a non-commercial clause in the license).

The High Court of England and Wales already ruled in July last year that SAS had no case, and that the functions provided by computer systems, or the language they're written in, cannot be protected by copyright. The case then escalated to the Court of Justice, which is set to rule next year. Yves Bot's non-binding opinion, published today, reiterates The High Court of England and Wales' ruling.

Bot comes to the conclusion that under current EU law, the functionality provided by a computer program cannot form the object of copyright protection. His example to illustrate his point, interestingly enough, is not altogether different from how most programmers argue against software patents.

Quote:
Let me give a specific example. Where a programmer decides to develop a computer program for airline ticket reservations, that software will contain a multitude of functionalities needed to make a booking. The computer program will have to be able, in turn, to find the flight requested by the user, check availability, book the seat, register the user's details, take online payment details and, finally, edit the user's electronic ticket. All of those functionalities, those actions, are dictated by a specific and limited purpose. In this, therefore, they are similar to an idea. It is therefore legitimate for computer programs to exist which offer the same functionalities.

There are, however, many means of achieving the concrete expression of those functionalities and it is those means which will be eligible for copyright protection under Directive 91/250. As we have seen, creativity, skill and inventiveness manifest themselves in the way in which the program is drawn up, in its writing. The programmer uses formulae, algorithms which, as such, are excluded from copyright protection because they are the equivalent of the words by which the poet or the novelist creates his work of literature. However, the way in which all of these elements are arranged, like the style in which the computer program is written, will be likely to reflect the author's own intellectual creation and therefore be eligible for protection.
In other words, the actual written code behind a function is protected by copyright, but the function is not. So, if you arrive at the same function but with entirely different code, you are not infringing any copyright. "To accept that a functionality of a computer program can be protected as such would amount to making it possible to monopolise ideas, to the detriment of technological progress and industrial development," Bot writes.

Well paint me red and call me a girl scout - that sounds a hell of a lot like how we argue against software patents.

Moving on to the issue of the programming language, Bot also comes to the conclusion that it, too, cannot form the object of copyright protection.

Quote:
It seems to me, therefore, that programming language is a functional element which allows instructions to be given to the computer. As we have seen with SAS language, programming language is made up of words and characters known to everyone and lacking any originality. In my opinion, programming language must be regarded as comparable to the language used by the author of a novel. It is therefore the means which permits expression to be given, not the expression itself.
Moving on to the matter of the data files SAS stores information in. To achieve interoperability with these data files, World Programming had to decompile certain parts of the SAS System. Bot argues that an inherent function of the data files is to enable interoperability, and that EU law allows decompilation in cases where the necessary information to achieve interoperability has not been made readily available. In other words, exactly because SAS did not publish the information needed for third parties to read from and write to the data files, World Programming was allowed to decompile.

However, Bot adds that "in my view, the use of the terms 'indispensable' and 'necessary' illustrates the desire of the European Union legislature to make decompilation an exceptional act. To my mind, the licensee will have to demonstrate the absolute necessity of reproducing the code or of translating the form of the code for the purposes of interoperability with the elements of his own program."

This is reasonable, in my eyes. If the information to create fully interoperable third party programs is readily available, then there's no need to decompile or reverse engineer anything. If such information is not readily available, however, third parties should legally be allowed to decompile the information.

Lastly, we have the manuals. World Programming only took "keywords, syntax, commands and combinations of commands, options, defaults and iterations" out of the SAS manuals. As you can probably deduce from what we've covered so far, Bot does not believe these elements are covered by copyright protection.

I have to say that this is the second time the EU Court of Justice has blown me away with the clarity of their rulings and opinions. The language used is not overly legalese, it's relatively easy to understand, and the arguments made are based on technical understanding. It naturally helps that I find myself in full agreement with the opinion, but still.

We can only hope that the Court of Justice adopts Bot's opinion, but we'll have to wait until next year before we find out.
http://www.osnews.com/story/25373/EU...ing_Languag e





Cutting Their Own Throats
Charlie Stross

Traditional publishing is dominated by the Big Six publishing groups — folks like Hachette, Holtzbrinck, Penguin-Putnam, and so on. In general these publishers and their imprints refuse to publish ebooks without DRM. It's a major sticking point with them, in no small part dictated by the fact that they're subsidiaries of huge media conglomerates, which have had bad experiences with movies, TV and music leaking on the internet. In the past I've muttered and grumbled about the evils of DRM for a variety of reasons. But now, I've got a feeling that there's a more important reason for griping: the strategy of demanding DRM everywhere is going to boomerang, inflicting horrible damage on the very companies who want it. (Who just happen to be my publishers.)

The corporate drive for DRM is motivated by the fear of ebook piracy. But aside from piracy, the biggest ebook-related threat to the Big Six is called Amazon.com. Until 2008, ebooks were a tiny market segment, under 1% and easily overlooked; but in 2009 ebook sales began to rise exponentially, and ebooks now account for over 20% of all fiction sales. In some areas ebooks are up to 40% of the market and rising rapidly. (I am not making that last figure up: I'm speaking from my own sales figures.) And Amazon have got 80% of the ebook retail market.

For various reasons the major publishers don't sell direct to the public themselves — they go via external retail channels. Of these channels, Amazon is the 500kg gorilla of internet sales. Amazon has ruthlessly used its near monopoly of online sales to exert monopsony buying pressure against suppliers, forcing the likes of Holtzbrinck or Penguin or Hachette to give them a deep discount on ebooks. In the past they have de-listed publishers' paper editions during negotiations, chopping their sales off at the knees in an attempt to force them to grant favourable sales terms. When Amazon extract deeper discounts from their suppliers, they pass some of the discount on to the public — this expands their monopoly position on the retail side by undercutting their rivals. It's good for customers in the short term, but it's not good for anyone in the long run: they're sweating their suppliers, all the way back down the supply chain (read: to authors like me) and sooner or later they'll put their suppliers out of business.

Anyway, my point is that the Big Six's pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder.

DRM on ebooks gives Amazon a great tool for locking ebook customers into the Kindle platform. If you buy a book that you can only read on the Kindle, you're naturally going to be reluctant to move to other ebook platforms that can't read those locked Kindle ebooks — and even more reluctant to buy ebooks from rival stores that use incompatible DRM. Amazon acquired an early lead in the ebook field (by selling below cost in the early days, and subsidizing the Kindle hardware price to consumers), and customers are locked into the platform by their existing purchases. Which is pretty much how they gained their 80% market share.

An 80% share of a tiny market slice worth maybe 1% of the publishing sector was of no concern to the big six, back in 2008. But today, with it rising towards 40%, it's another matter entirely.

As ebook sales mushroom, the Big Six's insistence on DRM has proven to be a hideous mistake. Rather than reducing piracy[*], it has locked customers in Amazon's walled garden, which in turn increases Amazon's leverage over publishers. And unlike pirated copies (which don't automatically represent lost sales) Amazon is a direct revenue threat because Amazon are have no qualms about squeezing their suppliers — or trying to poach authors for their "direct" publishing channel by offering initially favourable terms. (Which will doubtless get a lot less favourable once the monopoly is secured ...)

If the big six began selling ebooks without DRM, readers would at least be able to buy from other retailers and read their ebooks on whatever platform they wanted, thus eroding Amazon's monopoly position. But it's not clear that the folks in the boardrooms are agile enough to recognize the tar pit they've fallen into ...

[*] It doesn't reduce piracy; if you poke around bittorrent you'll find plenty of DRM-cracked ebooks — including all of my titles. DRM is snake oil; ultimately the reader has to be able to read whatever they bought, which means shipping a decryption key along with the encrypted file. And once they've got the key, someone will figure out how to use it to unlock the book.
http://www.antipope.org/charlie/blog...n-throats.html





What’s So Funny About Tablets, Love, And A Bookless World?
John Biggs

As we crawl out of the first decade of the 21st century, it seems that big changes in publishing are afoot. Ten years ago the most ereader I did was loading “In The Beginning There Was The Command Line” onto my Palm Pilot. Now I’m reading – and sharing from – Steven Pinker’s excellent The Better Angels of Our Nature on a slab of electronics and e-ink that costs as much as my Palm fold out keyboard cost in 2000.

But what does this move mean? It means the last big book store chain, Barnes & Noble, is toast, at least as a physical presence in our cities and towns. The WSJ writes:

The bookstore chain’s stock sank 16%, to $14.59, after the company reported a worse-than-expected loss of $6.6 million, or 17 cents a share, for the quarter ended Oct. 29, compared with a loss of $12.6 million, or 22 cents a share, a year earlier.

Sales declined 0.6% to $1.89 billion from $1.90 billion in the year-earlier quarter, with the biggest drop occurring at B&N’s college stores.

You’ll notice a few things there. First, it’s not that big a drop, but it’s still a big drop. Second, B&N is losing at the college stores, a fairly interesting indicator that the old college book-selling racket is almost over. It’s kind of ironical

So is B&N done for? Can the physical book store of any stripe survive the coming book-pocalypse?

As Gawker notes in their story about the fall, “Let’s hope not! New Yorkers still need somewhere to piss.” While true, it’s also a place where kids can learn about reading and adults and discover new titles. But that utility is being quickly supplanted by the bestseller or bust mentality of a publishing industry that sends $600K to Pippa Middleton for collating some drink recipes (read that article, by the way, it’s precious).

There are three things that will kill the bookstore – ereaders, the love of paper books, and being able to survive the paperless tipping point that will come when books just aren’t available in paper form. You need to be great at all three of those things to make it to the next stage in the evolution of text. I would posit that B&N is good at only two of those things.

First, B&N has the Nook, and, arguably, it is selling well. They also control an online bookstore that rivals Amazon’s. Therefore, both of these players will survive that first test. There’s no reason the Nook and Kindle can’t exist side by side, even with the minor differentiation offered by both platforms.

The next is the love of books. B&N stores are machines designed to make people think they love books. There are books everywhere. There are coffeeshops where you can read those books. Nobody cares kids litter the play area with board books. But, as I noted before, are those books the books people want to read? And how much longer can the board book survive in a digital world? When the e-generation grows out of Goodnight, Moon, gone will be the chintzy paperback copies of Lord of the Rings I had as a child. Instead those same documents will be available on their own, cheap Kindle. It’s inevitable. Sure, our generation loves books, but will the next one? And won’t the one after that find them a nuisance, much as I find my own collection of my Dad’s records a nuisance? As each media supplants the next, the old media is treated with scorn.

Booklovers will rail at me on this point, but face it: nobody wants an old, basement-stinking copy of Moby-Dick, except maybe Devin. Especially when it’s right here.

Finally, B&N has to weather the coming tipping point. This will come about when the mass of writers has decided they want nothing to do with the status quo and will self-publish like the savages they are. This will create plenty of bad writing, but can you really tell me that Pippa’s book will be on your best of the year list in 2012?

Most important, the fall in college revenue points to a worrying trend – the refusal to pay $100+ for a huge textbook or reading list. Arguably, these textbooks are worth that much or more if you consider the R&D costs, but new resources are available to nearly everyone and it is so easy for a professor to write his or her own book, made up of class notes, excerpts, and essays, that there is little reason to depend on Houghton Mifflin Harcourt or whatever they call themselves now.

In the end, B&N stores will close. It is an inevitability. When they will close is still unknown. Does this economic data point to the end of B&N stores in the next half decade or in the next year? That, booklovers, is the real question.
http://techcrunch.com/2011/12/02/wha...ookless-world/





Steal This Record

A Pastoral Address From The Right Reverend Jimmy Quickly

There was a time when the release of a new title by your favourite record artist was a cause for excitement and rejoicing but sadly no more.

6th December 2011 sees the issue of “The Return Of The Spectacular Spinning Songbook” by Elvis Costello and the Imposters.

This beautifully designed compendium contains all manner of whimsical scribblings, photographs and cartoons, together with some rock and roll music and vaudevillian ballads.

Tape and celluloid were rolling at the Wiltern Theater, Los Angeles in April this year and present a vivid snapshot of the early days of the Spectacular Spinning Songbook show on “The Revolver Tour” of 2011.

The live recording finds the Imposters in rare form, while the accompanying motion picture blueprints the wilder possibilities of the show, as it made its acclaimed progress across the United States throughout the year.

Unfortunately, we at www.elviscostello.com find ourselves unable to recommend this lovely item to you as the price appears to be either a misprint or a satire.

All our attempts to have this number revised have been fruitless but rather than detain you with tedious arguments about morality, panache and book-keeping - when there are really bigger fish to filet these days - we are taking the following unusual step.
If you should really want to buy something special for your loved one at this time of seasonal giving, we can whole-heartedly recommend, “Ambassador Of Jazz” - a cute little imitation suitcase, covered in travel stickers and embossed with the name “Satchmo” but more importantly containing TEN re-mastered albums by one of the most beautiful and loving revolutionaries who ever lived – Louis Armstrong.

The box should be available for under one hundred and fifty American dollars and includes a number of other tricks and treats. Frankly, the music is vastly superior.

If on the other hand you should still want to hear and view the component parts of the above mentioned elaborate hoax, then those items will be available separately at a more affordable price in the New Year, assuming that you have not already obtained them by more unconventional means.

Tickets are currently on-sale for the Spectacular Spinning Songbook appearances in the U.S., U.K. and Europe during April, May and June in the Spring of 2012. More dates will be announced in the very near future.
http://www.elviscostello.com/news/steal-this-record/254





Giving it Away: How Free Music Makes More Than Sense
Derek Webb

Music matters. It’s so integral and pervasive in our culture that it almost feels invisible. It’s even hard to imagine walking into almost any store without hearing music overhead. Culture provides a constant soundtrack to our lives. So it’s no wonder there’s so much discussion and debate about the business of music. It feels like a matter of life or death. And maybe it is.

Lately, there’s been a surge in that debate as pioneers begin planting flags all over the Wild West that is the current music industry. I believe that all of these creative attempts at healthy disruption and problem solving are very good things. Ultimately, the best and most effective ideas and businesses will not only survive, they will be the blocks upon which we build the new music business, and this upon the wreckage of the one we’ve been watching go down for over a decade. As an artist and a music-lover (an owner and a client, if you will), I have a lot at stake in these discussions.

There has never been a better moment to be a middle-class or an independently thinking artist making and performing music than right now. The costs and complications of creating, recording, manufacturing, and distributing music are at an all-time low, enabling more music to be made and more artists to make a living than ever before. If your ego can bear not being rich and famous, you can make a respectable and sustainable living as a blue-collar musician. The problem used to be access; now it’s obscurity. And this brings with it a completely new set of problems and opportunities.

The History

More than 50 years ago, Sam Philips stood in the doorway of Sun Studios in Memphis, blocking Johnny Cash from entering unless he could conjure something worth the legacy of that historical room (without which Cash might have gone on to be an unknown and mediocre Gospel singer). Today, anyone can get sufficient resources to record and distribute their music, all from a Mac laptop. While this might mean some artists never receive the shepherding that could drive them to their potential greatness, I believe the net result is still preferable to having the old gatekeepers still in place, deciding for everyone what is truly great. The tools are democratized and as a result, the market is flooded. The problem goes from having the chance to be recorded at all to that recording having the chance to be discovered and listened to.

But as it tends to do, the market is adapting. The whole business used to be focused on the head of the sales curve, the handful of artists who were selling records in the millions of copies. But as music sales have sharply declined and fewer artists than ever are winding up at the head of that curve, attention is drifting to the “long tail” of the curve where thousands of niche artists live, none selling more than a few thousand records each. The power of the “long tail” is in the fact that its combined record sales are more than the combined sales of the top-selling artists occupying the steadily narrowing head of the curve. While there will always likely be a “hit” market resulting in a precious few artists moving records in the millions, the business is shifting to service these niches.

As I have navigated the business, especially over the last decade as a solo artist, I have noticed several gaps in the services available to blue-collar artists like myself. This is how NoiseTrade was born in 2008, a service I started with several friends seeking to help artists find and meaningfully connect with their fans by trading free music for information and viral promotion. NoiseTrade has enabled thousands of artists (including myself) to have and cultivate direct relationships with their fans rather than having to depend on proprietary third parties such as Facebook, Twitter, and not so long ago, MySpace, and therefore, to have a job.

These connections are not only meaningful, they’re also valuable.

The Details

On Twitter, I recently said, “I make more money giving records away on @NoiseTrade (in exchange for info) than selling those same records on iTunes (let alone Spotify),” which resulted in some pretty interesting discussions. I said that in response to questions I received after criticizing streaming services like Spotify, which claim to offer a viable alternative to “piracy,” when in reality they offer artists almost no meaningful revenue or fan connection. And while iTunes is certainly a better financial model and more equitable for artists, it does almost nothing to connect the fans to the artists in a way that yields any long-term benefit.

For example, I am paid $0.00029 per stream of a song on Spotify, and even this amount depends on whether the song is being streamed by a paid user or someone using the service for free. This means it will take upwards of 3,500 streams of a single song on Spotify to earn $1.00 versus that same revenue for one iTunes song purchase (not to mention the fact that Spotify refuses to pay the same amount to independent artists as they pay major labels, unlike iTunes).

Most would argue that it’s apples and oranges (no pun intended): iTunes is a digital storefront for artists while services like Spotify are about discovery. People will argue that low-cost streaming is good for the market, that it’s good for the artists, and that it’s still better than people taking your music for free from BitTorrent. But I tend to disagree on almost every point, mainly because it’s just not that simple. It’s true that iTunes is a place for people to purchase music, but it offers all the same benefits of Spotify in terms of discovery. And while Spotify is claiming to occupy the discovery space, it’s clear that the service is operating functionally as a storefront, since people are streaming music as an alternative to purchasing that same music.

I’ll go even further to say that I actually prefer illegal downloading over Spotify because when you get music illegally it’s at least implicit in the transaction that what you’re doing is potentially harmful to the artist. But with Spotify, your conscience is clear because you’re either enduring ads or paying to use the service and access the music. But from the blue-collar artist’s perspective, they’re not receiving any meaningful payment (there’s little discernible difference between $0.00029 and $0.00) and they are learning nothing about their fans, not to mention that music readily available on Spotify for little to no payment completely poaches the record sales upon which middle-class musicians are depending for survival (which is why I will withhold any new releases from Spotify in the future).

But this is about much more than just revenue, which brings me to why neither iTunes nor Spotify can really compete with free music, in either relational or monetary value.

If someone buys my music on iTunes, Amazon, or in a record store (remember those?), let alone streams it on Spotify, it’s all short-term money. That might be the last interaction I have with that particular fan. But if I give that fan the same record for free in exchange for a connection (an e-mail and a zip code), I can make that same money, if not double or triple that amount, over time. And “over time” is key, since the ultimate career success is sustainability. Longevity. See, the reality is that out of a $10 iTunes album sale, I probably net around a dollar. So if I give that record away, and as a result am able to get that fan out to a concert (I can use their zip code to specifically promote my shows in their area), I make approximately $10 back, and twice that if they visit the merch table. I can sell them an older/newer album and make approximately $10 back. The point is, if I can find some organic way to creatively engage them in a paid follow-up transaction, I increase my revenue 10 times on any one of these interactions.

This is all an equation of scale. I might be able to outright sell 20,000 albums for $10 each (again, netting around $1 each). Or I can remove any barrier from someone hearing about or discovering my music by giving it away, which will result in an order of magnitude more albums distributed, maybe around 100,000. If I can then convert 20% of those free downloads into paid transactions of any kind over time, I have probably well over doubled or tripled my money. And I can do this repeatedly as I continue to grow, and learn more about and invest in my tribe, to whom I now have a direct connection (rather than having to go through Facebook, Twitter, or Lord forbid, MySpace to access them).

And all of this by giving the music away for free.

The Conclusion

When you talk about free music, people who work in the music business will tell you you’ve gone too far. They’ll say you’re devaluing the art itself, and that once you go there, there is no coming back. I suppose I would agree if I thought that music’s only value was monetary. But I don’t.

Music does have monetary value. But more than its monetary value is its emotional value, its relational value, its artistic value, even its spiritual value. When you make meaningful connections with people based on artistic self-expression, I think you’re actually increasing the value of that art based on the many ways it’s valued.

That said, I believe all of the aforementioned services will play some role in the emerging music marketplace, that artists should have every tool at their disposal when it comes to applying their creativity as much to the marketing and distributing of their music as to the making of it.

But any model claiming to be good for the music business that is bad for the individuals that make up that business isn’t really good. At the end of the day, blue-collar artists aren’t interested in propping up some nebulous idea of a “music business” so much as they’re seeking to build and sustain a career for themselves that enables them to make art honestly, without unnecessary and outside manipulation or consideration (like what people will buy or what will play on the radio). So the model that is preferable and most beneficial is one where the individual artists win, therefore causing the collective survival and health of the “music business.” If those individual artists survive, the whole business survives.

So please buy my music. Or take it for free. I’m honestly just grateful to have your attention. But this only works if we work together.
http://derekwebb.tumblr.com/post/135...ore-than-sense





The Rise and Fall of Bitcoin
Benjamin Wallace

In November 1, 2008, a man named Satoshi Nakamoto posted a research paper to an obscure cryptography listserv describing his design for a new digital currency that he called bitcoin. None of the list’s veterans had heard of him, and what little information could be gleaned was murky and contradictory. In an online profile, he said he lived in Japan. His email address was from a free German service. Google searches for his name turned up no relevant information; it was clearly a pseudonym. But while Nakamoto himself may have been a puzzle, his creation cracked a problem that had stumped cryptographers for decades. The idea of digital money—convenient and untraceable, liberated from the oversight of governments and banks—had been a hot topic since the birth of the Internet. Cypherpunks, the 1990s movement of libertarian cryptographers, dedicated themselves to the project. Yet every effort to create virtual cash had foundered. Ecash, an anonymous system launched in the early 1990s by cryptographer David Chaum, failed in part because it depended on the existing infrastructures of government and credit card companies. Other proposals followed—bit gold, RPOW, b-money—but none got off the ground.

One of the core challenges of designing a digital currency involves something called the double-spending problem. If a digital dollar is just information, free from the corporeal strictures of paper and metal, what’s to prevent people from copying and pasting it as easily as a chunk of text, “spending” it as many times as they want? The conventional answer involved using a central clearinghouse to keep a real-time ledger of all transactions—ensuring that, if someone spends his last digital dollar, he can’t then spend it again. The ledger prevents fraud, but it also requires a trusted third party to administer it.

Bitcoin did away with the third party by publicly distributing the ledger, what Nakamoto called the “block chain.” Users willing to devote CPU power to running a special piece of software would be called miners and would form a network to maintain the block chain collectively. In the process, they would also generate new currency. Transactions would be broadcast to the network, and computers running the software would compete to solve irreversible cryptographic puzzles that contain data from several transactions. The first miner to solve each puzzle would be awarded 50 new bitcoins, and the associated block of transactions would be added to the chain. The difficulty of each puzzle would increase as the number of miners increased, which would keep production to one block of transactions roughly every 10 minutes. In addition, the size of each block bounty would halve every 210,000 blocks—first from 50 bitcoins to 25, then from 25 to 12.5, and so on. Around the year 2140, the currency would reach its preordained limit of 21 million bitcoins.

When Nakamoto’s paper came out in 2008, trust in the ability of governments and banks to manage the economy and the money supply was at its nadir. The US government was throwing dollars at Wall Street and the Detroit car companies. The Federal Reserve was introducing “quantitative easing,” essentially printing money in order to stimulate the economy. The price of gold was rising. Bitcoin required no faith in the politicians or financiers who had wrecked the economy—just in Nakamoto’s elegant algorithms. Not only did bitcoin’s public ledger seem to protect against fraud, but the predetermined release of the digital currency kept the bitcoin money supply growing at a predictable rate, immune to printing-press-happy central bankers and Weimar Republic-style hyperinflation.

Nakamoto himself mined the first 50 bitcoins—which came to be called the genesis block—on January 3, 2009. For a year or so, his creation remained the province of a tiny group of early adopters. But slowly, word of bitcoin spread beyond the insular world of cryptography. It has won accolades from some of digital currency’s greatest minds. Wei Dai, inventor of b-money, calls it “very significant”; Nick Szabo, who created bit gold, hails bitcoin as “a great contribution to the world”; and Hal Finney, the eminent cryptographer behind RPOW, says it’s “potentially world-changing.” The Electronic Frontier Foundation, an advocate for digital privacy, eventually started accepting donations in the alternative currency.

The small band of early bitcoiners all shared the communitarian spirit of an open source software project. Gavin Andresen, a coder in New England, bought 10,000 bitcoins for $50 and created a site called the Bitcoin Faucet, where he gave them away for the hell of it. Laszlo Hanyecz, a Florida programmer, conducted what bitcoiners think of as the first real-world bitcoin transaction, paying 10,000 bitcoins to get two pizzas delivered from Papa John’s. (He sent the bitcoins to a volunteer in England, who then called in a credit card order transatlantically.) A farmer in Massachusetts named David Forster began accepting bitcoins as payment for alpaca socks.

When they weren’t busy mining, the faithful tried to solve the mystery of the man they called simply Satoshi. On a bitcoin IRC channel, someone noted portentously that in Japanese Satoshi means “wise.” Someone else wondered whether the name might be a sly portmanteau of four tech companies: SAmsung, TOSHIba, NAKAmichi, and MOTOrola. It seemed doubtful that Nakamoto was even Japanese. His English had the flawless, idiomatic ring of a native speaker.

Perhaps, it was suggested, Nakamoto wasn’t one man but a mysterious group with an inscrutable purpose—a team at Google, maybe, or the National Security Agency. “I exchanged some emails with whoever Satoshi supposedly is,” says Hanyecz, who was on bitcoin’s core developer team for a time. “I always got the impression it almost wasn’t a real person. I’d get replies maybe every two weeks, as if someone would check it once in a while. Bitcoin seems awfully well designed for one person to crank out.”

Nakamoto revealed little about himself, limiting his online utterances to technical discussion of his source code. On December 5, 2010, after bitcoiners started to call for Wikileaks to accept bitcoin donations, the normally terse and all-business Nakamoto weighed in with uncharacteristic vehemence. “No, don’t ‘bring it on,’” he wrote in a post to the bitcoin forum. “The project needs to grow gradually so the software can be strengthened along the way. I make this appeal to Wikileaks not to try to use bitcoin. Bitcoin is a small beta community in its infancy. You would not stand to get more than pocket change, and the heat you would bring would likely destroy us at this stage.”

Then, as unexpectedly as he had appeared, Nakamoto vanished. At 6:22 pm GMT on December 12, seven days after his Wikileaks plea, Nakamoto posted his final message to the bitcoin forum, concerning some minutiae in the latest version of the software. His email responses became more erratic, then stopped altogether. Andresen, who had taken over the role of lead developer, was now apparently one of just a few people with whom he was still communicating. On April 26, Andresen told fellow coders: “Satoshi did suggest this morning that I (we) should try to de-emphasize the whole ‘mysterious founder’ thing when talking publicly about bitcoin.” Then Nakamoto stopped replying even to Andresen’s emails. Bitcoiners wondered plaintively why he had left them. But by then his creation had taken on a life of its own.

Bitcoin 101

How They’re Made

Bitcoin’s economy consists of a network of its users’ computers. At preset intervals, an algorithm releases new bitcoins into the network: 50 every 10 minutes, with the pace halving in increments until around 2140. The automated pace is meant to ensure regular growth of the monetary supply without interference by third parties, like a central bank, which can lead to hyperinflation.

How They’re Mined

To prevent fraud, the bitcoin software maintains a pseudonymous public ledger of every transaction. Some bitcoiners’ computers validate transactions by cracking cryptographic puzzles, and the first to solve each puzzle receives 50 new bitcoins. Bitcoins can be stored in a variety of places—from a “wallet” on a desktop computer to a centralized service in the cloud.

How They’re Spent

Once users download the bitcoin app to their machine, spending the currency is as easy as sending an email. The range of merchants that accept it is small but growing; look for the telltale symbol at the cash register. And entrepreneurial bitcoiners are working to make it much easier to use the currency, building everything from point-of-service machines to PayPal alternatives.

“Bitcoin enthusiasts are almost evangelists,” Bruce Wagner says. “They see the beauty of the technology. It’s a huge movement. It’s almost like a religion. On the forum, you’ll see the spirit. It’s not just me, me, me. It’s what’s for the betterment of bitcoin.”

It’s a July morning. Wagner, whose boyish energy and Pantone-black hair belie his 50 years, is sitting in his office at OnlyOneTV, an Internet television startup in Manhattan. Over just a few months, he has become bitcoin’s chief proselytizer. He hosts The Bitcoin Show, a program on OnlyOneTV in which he plugs the nascent currency and interviews notables from the bitcoin world. He also runs a bitcoin meetup group and is gearing up to host bitcoin’s first “world conference” in August. “I got obsessed and didn’t eat or sleep for five days,” he says, recalling the moment he discovered bitcoin. “It was bitcoin, bitcoin, bitcoin, like I was on crystal meth!”

Wagner is not given to understatement. While bitcoin is “the most exciting technology since the Internet,” he says, eBay is “a giant bloodsucking corporation” and free speech “a popular myth.” He is similarly excitable when predicting the future of bitcoin. “I knew it wasn’t a stock and wouldn’t go up and down,” he explains. “This was something that was going to go up, up, up.”

For a while, he was right. Through 2009 and early 2010, bitcoins had no value at all, and for the first six months after they started trading in April 2010, the value of one bitcoin stayed below 14 cents. Then, as the currency gained viral traction in summer 2010, rising demand for a limited supply caused the price on online exchanges to start moving. By early November, it surged to 36 cents before settling down to around 29 cents. In February 2011, it rose again and was mentioned on Slashdot for achieving “dollar parity”; it hit $1.06 before settling in at roughly 87 cents.

In the spring, catalyzed in part by a much-linked Forbes story on the new “crypto currency,” the price exploded. From early April to the end of May, the going rate for a bitcoin rose from 86 cents to $8.89. Then, after Gawker published a story on June 1 about the currency’s popularity among online drug dealers, it more than tripled in a week, soaring to about $27. The market value of all bitcoins in circulation was approaching $130 million. A Tennessean dubbed KnightMB, who held 371,000 bitcoins, became worth more than $10 million, the richest man in the bitcoin realm. The value of those 10,000 bitcoins Hanyecz used to buy pizza had risen to $272,329. “I don’t feel bad about it,” he says. “The pizza was really good.”

Perhaps bitcoin’s creator wasn’t one man but a mysterious group—a team at Google, maybe, or the NSA.

Bitcoin was drawing the kind of attention normally reserved for overhyped Silicon Valley IPOs and Apple product launches. On his Internet talk show, journo-entrepreneur Jason Calacanis called it “a fundamental shift” and “one of the most interesting things I’ve seen in 20 years in the technology business.” Prominent venture capitalist Fred Wilson heralded “societal upheaval” as the Next Big Thing on the Internet, and the four examples he gave were Wikileaks, PlayStation hacking, the Arab Spring, and bitcoin. Andresen, the coder, accepted an invitation from the CIA to come to Langley, Virginia, to speak about the currency. Rick Falkvinge, founder of the Swedish Pirate Party (whose central policy plank includes the abolition of the patent system), announced that he was putting his life savings into bitcoins.

The future of bitcoin seemed to shimmer with possibility. Mark Suppes, an inventor building a fusion reactor in a Brooklyn loft from eBay-sourced parts, got an old ATM and began retrofitting it to dispense cash for bitcoins. On the so-called secret Internet (the invisible grid of sites reachable by computers using Tor anonymizing software), the black-and-gray-market site Silk Road anointed the bitcoin the coin of the realm; you could use bitcoins to buy everything from Purple Haze pot to Fentanyl lollipops to a kit for converting a rifle into a machine gun. A young bitcoiner, The Real Plato, brought On the Road into the new millennium by video-blogging a cross-country car trip during which he spent only bitcoins. Numismatic enthusiasts among the currency’s faithful began dreaming of collectible bitcoins, wondering what price such rarities as the genesis block might fetch.

As the price rose and mining became more popular, the increased competition meant decreasing profits. An arms race commenced. Miners looking for horsepower supplemented their computers with more powerful graphics cards, until they became nearly impossible to find. Where the first miners had used their existing machines, the new wave, looking to mine bitcoins 24 hours a day, bought racks of cheap computers with high-speed GPUs cooled by noisy fans. The boom gave rise to mining-rig porn, as miners posted photos of their setups. As in any gold rush, people recounted tales of uncertain veracity. An Alaskan named Darrin reported that a bear had broken into his garage but thankfully ignored his rig. Another miner’s electric bill ran so high, it was said, that police raided his house, suspecting that he was growing pot.

Amid the euphoria, there were troubling signs. Bitcoin had begun in the public-interested spirit of open source peer-to-peer software and libertarian political philosophy, with references to the Austrian school of economics. But real money was at stake now, and the dramatic price rise had attracted a different element, people who saw the bitcoin as a commodity in which to speculate. At the same time, media attention was bringing exactly the kind of heat that Nakamoto had feared. US senator Charles Schumer held a press conference, appealing to the DEA and Justice Department to shut down Silk Road, which he called “the most brazen attempt to peddle drugs online that we have ever seen” and describing bitcoin as “an online form of money-laundering.”

Meanwhile, a cult of Satoshi was developing. Someone started selling I AM SATOSHI NAKAMOTO T-shirts. Disciples lobbied to name the smallest fractional denomination of a bitcoin a “satoshi.” There was Satoshi-themed fan fiction and manga art. And bitcoiners continued to ponder his mystery. Some speculated that he had died. A few postulated that he was actually Wikileaks founder Julian Assange. Many more were convinced that he was Gavin Andresen. Still others believed that he must be one of the older crypto-currency advocates—Finney or Szabo or Dai. Szabo himself suggested it could be Finney or Dai. Stefan Thomas, a Swiss coder and active community member, graphed the time stamps for each of Nakamoto’s 500-plus bitcoin forum posts; the resulting chart showed a steep decline to almost no posts between the hours of 5 am and 11 am Greenwich Mean Time. Because this pattern held true even on Saturdays and Sundays, it suggested that the lull was occurring when Nakamoto was asleep, rather than at work. (The hours of 5 am to 11 am GMT are midnight to 6 am Eastern Standard Time.) Other clues suggested that Nakamoto was British: A newspaper headline he had encoded in the genesis block came from the UK-published Times of London, and both his forum posts and his comments in the bitcoin source code used such Brit spellings as optimise and colour.

Play Dough

Even the purest technology has to live in an impure world. Both the code and the idea of bitcoin may have been impregnable, but bitcoins themselves—unique strings of numbers that constitute units of the currency—are discrete pieces of information that have to be stored somewhere. By default, bitcoin kept users’ currency in a digital “wallet” on their desktop, and when bitcoins were worth very little, easy to mine, and possessed only by techies, that was sufficient. But once they started to become valuable, a PC felt inadequate. Some users protected their bitcoins by creating multiple backups, encrypting and storing them on thumb drives, on forensically scrubbed virgin computers without Internet connections, in the cloud, and on printouts stored in safe-deposit boxes. But even some sophisticated early adopters had trouble keeping their bitcoins safe. Stefan Thomas had three copies of his wallet yet inadvertently managed to erase two of them and lose his password for the third. In a stroke, he lost about 7,000 bitcoins, at the time worth about $140,000. “I spent a week trying to recover it,” he says. “It was pretty painful.” Most people who have cash to protect put it in a bank, an institution about which the more zealous bitcoiners were deeply leery. Instead, for this new currency, a primitive and unregulated financial-services industry began to develop. Fly-by-night online “wallet services” promised to safeguard clients’ digital assets. Exchanges allowed anyone to trade bitcoins for dollars or other currencies. Bitcoin itself might have been decentralized, but users were now blindly entrusting increasing amounts of currency to third parties that even the most radical libertarian would be hard-pressed to claim were more secure than federally insured institutions. Most were Internet storefronts, run by who knows who from who knows where.

Sure enough, as the price headed upward, disturbing events began to bedevil the bitcoiners. In mid-June, someone calling himself Allinvain reported that 25,000 bitcoins worth more than $500,000 had been stolen from his computer. (To this day, nobody knows whether this claim is true.) About a week later, a hacker pulled off an ingenious attack on a Tokyo-based exchange site called Mt. Gox, which handled 90 percent of all bitcoin exchange transactions. Mt. Gox restricted account withdrawals to $1,000 worth of bitcoins per day (at the time of the attack, roughly 35 bitcoins). After he broke into Mt. Gox’s system, the hacker simulated a massive sell-off, driving the exchange rate to zero and letting him withdraw potentially tens of thousands of other people’s bitcoins.

As it happened, market forces conspired to thwart the scheme. The price plummeted, but as speculators flocked to take advantage of the fire sale, they quickly drove it back up, limiting the thief’s haul to only around 2,000 bitcoins. The exchange ceased operations for a week and rolled back the postcrash transactions, but the damage had been done; the bitcoin never got back above $17. Within a month, Mt. Gox had lost 10 percent of its market share to a Chile-based upstart named TradeHill. Most significantly, the incident had shaken the confidence of the community and inspired loads of bad press.

In the public’s imagination, overnight the bitcoin went from being the currency of tomorrow to a dystopian joke. The Electronic Frontier Foundation quietly stopped accepting bitcoin donations. Two Irish scholars specializing in network analysis demonstrated that bitcoin wasn’t nearly as anonymous as many had assumed: They were able to identify the handles of a number of people who had donated bitcoins to Wikileaks. (The organization announced in June 2011 that it was accepting such donations.) Nontechnical newcomers to the currency, expecting it to be easy to use, were disappointed to find that an extraordinary amount of effort was required to obtain, hold, and spend bitcoins. For a time, one of the easier ways to buy them was to first use Paypal to buy Linden dollars, the virtual currency in Second Life, then trade them within that make-believe universe for bitcoins. As the tone of media coverage shifted from gee-whiz to skeptical, attention that had once been thrilling became a source of resentment.

More disasters followed. Poland-based Bitomat, the third-largest exchange, revealed that it had—oops—accidentally overwritten its entire wallet. Security researchers detected a proliferation of viruses aimed at bitcoin users: Some were designed to steal wallets full of existing bitcoins; others commandeered processing power to mine fresh coins. By summer, the oldest wallet service, MyBitcoin, stopped responding to emails. It had always been fishy—registered in the West Indies and run by someone named Tom Williams, who never posted in the forums. But after a month of unbroken silence, Wagner, the New York City bitcoin evangelist, finally stated what many had already been thinking: Whoever was running MyBitcoin had apparently gone AWOL with everyone’s money. Wagner himself revealed that he had been keeping all 25,000 or so of his bitcoins on MyBitcoin and had recommended to friends and relatives that they use it, too. He also aided a vigilante effort that publicly named several suspects. MyBitcoin’s supposed owner resurfaced, claiming his site had been hacked. Then Wagner became the target of a countercampaign that publicized a successful lawsuit against him for mortgage fraud, costing him much of his reputation within the community. “People have the mistaken impression that virtual currency means you can trust a random person over the Internet,” says Jeff Garzik, a member of bitcoin’s core developer group.

And nobody had been as trusted as Nakamoto himself, who remained mysteriously silent as the world he created threatened to implode. Some bitcoiners began to suspect that he was working for the CIA or Federal Reserve. Others worried that bitcoin had been a Ponzi scheme, with Nakamoto its Bernie Madoff—mining bitcoins when they were worthless, then waiting for their value to rise. The most dedicated bitcoin loyalists maintained their faith, not just in Nakamoto, but in the system he had built. And yet, unmistakably, beneath the paranoia and infighting lurked something more vulnerable, an almost theodical disappointment. What bitcoiners really seemed to be asking was, why had Nakamoto created this world only to abandon it?

If Nakamoto has forsaken his adherents, though, they are not prepared to let his creation die. Even as the currency’s value has continued to drop, they are still investing in the fragile economy. Wagner has advocated for it to be used by people involved in the Occupy Wall Street movement. While the gold-rush phase of mining has ended, with some miners dumping their souped-up mining rigs—”People are getting sick of the high electric bills, the heat, and the loud fans,” Garzik says—the more serious members of the community have turned to infrastructure. Mt. Gox is developing point-of-sale hardware. Other entrepreneurs are working on PayPal-like online merchant services. Two guys in Colorado have launched BitcoinDeals, an etailer offering “over 1,000,000 items.” The underworld’s use of the bitcoin has matured, too: Silk Road is now just one of many Tor-enabled back alleys, including sites like Black Market Reloaded, where self-proclaimed hit men peddle contract killings and assassinations.

“You could say it’s following Gartner’s Hype Cycle,” London-based core developer Amir Taaki says, referring to a theoretical technology-adoption-and-maturation curve that begins with a “technology trigger,” ascends to a “peak of inflated expectations,” collapses into a “trough of disillusionment,” and then climbs a “slope of enlightenment” until reaching a “plateau of productivity.” By this theory, bitcoin is clambering out of the trough, as people learn to value the infallible code and discard the human drama and wild fluctuations that surround it.

But that distinction is ultimately irrelevant. The underlying vulnerabilities that led to bitcoin’s troubles—its dependence on unregulated, centralized exchanges and online wallets—persist. Indeed, the bulk of mining is now concentrated in a handful of huge mining pools, which theoretically could hijack the entire network if they worked in concert.

Beyond the most hardcore users, skepticism has only increased. Nobel Prize-winning economist Paul Krugman wrote that the currency’s tendency to fluctuate has encouraged hoarding. Stefan Brands, a former ecash consultant and digital currency pioneer, calls bitcoin “clever” and is loath to bash it but believes it’s fundamentally structured like “a pyramid scheme” that rewards early adopters. “I think the big problems are ultimately the trust issues,” he says. “There’s nothing there to back it up. I know the counterargument, that that’s true of fiat money, too, but that’s completely wrong. There’s a whole trust fabric that’s been established through legal mechanisms.”

It would be interesting to know what Nakamoto thinks of all this, but he’s not talking. He didn’t respond to emails, and the people who might know who he is say they don’t. Andresen flatly denies he is Nakamoto. “I don’t know his real name,” he says. “I’m hoping one day he decides not to be anonymous anymore, but I expect not.” Szabo also denies that he is Nakamoto, and so does Dai. Finney, who has blogged eloquently about being diagnosed with amyotrophic lateral sclerosis, sent his denial in an email: “Under my current circumstances, facing limited life expectancy, I would have little to lose by shedding anonymity. But it was not I.” Both The New Yorker and Fast Company have launched investigations but ended up with little more than speculation.

The signal in the noise, the figure that emerges from the carpet of clues, suggests an academic with somewhat outdated programming training. (Nakamoto’s style of notation “was popular in the late ’80s and early ’90s,” Taaki notes. “Maybe he’s around 50, plus or minus 10 years.”) Some conjecturers are confident in their precision. “He has at best a master’s,” says a digital-currency expert. “It seems quite obvious it’s one of the developers. Maybe Gavin, just looking at his background.”

“I suspect Satoshi is a small team at a financial institution,” whitehat hacker Dan Kaminsky says. “I just get that feeling. He’s a quant who may have worked with some of his friends.”

But Garzik, the developer, says that the most dedicated bitcoiners have stopped trying to hunt down Nakamoto. “We really don’t care,” he says. It’s not the individuals behind the code who matter, but the code itself. And while people have stolen and cheated and abandoned the bitcoiners, the code has remained true.
http://www.wired.com/magazine/2011/11/mf_bitcoin/





DNA Sequencing Caught in Deluge of Data
Andrew Pollack

BGI, based in China, is the world’s largest genomics research institute, with 167 DNA sequencers producing the equivalent of 2,000 human genomes a day.

BGI churns out so much data that it often cannot transmit its results to clients or collaborators over the Internet or other communications lines because that would take weeks. Instead, it sends computer disks containing the data, via FedEx.

“It sounds like an analog solution in a digital age,” conceded Sifei He, the head of cloud computing for BGI, formerly known as the Beijing Genomics Institute. But for now, he said, there is no better way.

The field of genomics is caught in a data deluge. DNA sequencing is becoming faster and cheaper at a pace far outstripping Moore’s law, which describes the rate at which computing gets faster and cheaper.

The result is that the ability to determine DNA sequences is starting to outrun the ability of researchers to store, transmit and especially to analyze the data.

“Data handling is now the bottleneck,” said David Haussler, director of the center for biomolecular science and engineering at the University of California, Santa Cruz. “It costs more to analyze a genome than to sequence a genome.”

That could delay the day when DNA sequencing is routinely used in medicine. In only a year or two, the cost of determining a person’s complete DNA blueprint is expected to fall below $1,000. But that long-awaited threshold excludes the cost of making sense of that data, which is becoming a bigger part of the total cost as sequencing costs themselves decline.

“The real cost in the sequencing is more than just running the sequencing machine,” said Mark Gerstein, professor of biomedical informatics at Yale. “And now that is becoming more apparent.”

But the data challenges are also creating opportunities. There is demand for people trained in bioinformatics, the convergence of biology and computing. Numerous bioinformatics companies, like SoftGenetics, DNAStar, DNAnexus and NextBio, have sprung up to offer software and services to help analyze the data. EMC, a maker of data storage equipment, has found life sciences a fertile market for products that handle large amounts of information. BGI is starting a journal, GigaScience, to publish data-heavy life science papers.

“We believe the field of bioinformatics for genetic analysis will be one of the biggest areas of disruptive innovation in life science tools over the next few years,” Isaac Ro, an analyst at Goldman Sachs, wrote in a recent report.

Sequencing involves determining the order of the bases, the chemical units represented by the letters A, C, G and T, in a stretch of DNA. The cost has plummeted, particularly in the last four years, as new techniques have been introduced.

The cost of sequencing a human genome — all three billion bases of DNA in a set of human chromosomes — plunged to $10,500 last July from $8.9 million in July 2007, according to the National Human Genome Research Institute.

That is a decline by a factor of more than 800 over four years. By contrast, computing costs would have dropped by perhaps a factor of four in that time span.

The lower cost, along with increasing speed, has led to a huge increase in how much sequencing data is being produced. World capacity is now 13 quadrillion DNA bases a year, an amount that would fill a stack of DVDs two miles high, according to Michael Schatz, assistant professor of quantitative biology at the Cold Spring Harbor Laboratory on Long Island.

There will probably be 30,000 human genomes sequenced by the end of this year, up from a handful a few years ago, according to the journal Nature. And that number will rise to millions in a few years.

In a few cases, human genomes are being sequenced to help diagnose mysterious rare diseases and treat patients. But most are being sequenced as part of studies. The federally financed Cancer Genome Atlas, for instance, is sequencing the genomes of thousands of tumors and of healthy tissue from the same people, looking for genetic causes of cancer.

One near victim of the data explosion has been a federal online archive of raw sequencing data. The amount stored has more than tripled just since the beginning of the year, reaching 300 trillion DNA bases and taking up nearly 700 trillion bytes of computer memory.

Straining under the load and facing budget constraints, federal officials talked earlier this year about shutting the archive, to the dismay of researchers. It will remain open, but certain big sequencing projects will now have to pay to store their data there.

If the problem is tough for human genomes, it is far worse for the field known as metagenomics. This involves sequencing the DNA found in a particular environment, like a sample of soil or the human gut. The idea is to take a census of what microbial species are present.

E. Virginia Armbrust, who studies ocean-dwelling microscopic organisms at the University of Washington, said her lab generated 60 billion bases — as much as 20 human genomes — from just two surface water samples. It took weeks to do the sequencing, but nearly two years to then analyze the data, she said.

“There is more data that is infiltrating lots of different fields that weren’t particularly ready for that,” Professor Armbrust said. “It’s all a little overwhelming.”

The Human Microbiome Project, which is sequencing the microbial populations in the human digestive tract, has generated about a million times as much sequence data as a single human genome, said C. Titus Brown, a bioinformatics specialist at Michigan State University.

“It’s not at all clear what you do with that data,” he said. “Doing a comprehensive analysis of it is essentially impossible at the moment.”

Other scientific fields, like particle physics and astronomy, handle huge amounts of data. In those fields, however, much of the data is generated by a few huge accelerators or observatories, said Eugene Kolker, chief data officer at Seattle Children’s Hospital.

“In the life sciences, anyone can produce so much data, and it’s happening in thousands of different labs throughout the world,” he said.

Moreover, DNA is just part of the story. To truly understand biology, researchers are gathering data on the RNA, proteins and chemicals in cells. That data can be even more voluminous than data on genes. And those different types of data have to be integrated.

“We have these giant piles of data and no way to connect them” said H. Steven Wiley, a biologist at the Pacific Northwest National Laboratory. He added, “I’m sitting in front of a pile of data that we’ve been trying to analyze for the last year and a half.”

Still, many say the situation will be manageable. Jay Flatley, chief executive of Illumina, the leading supplier of sequencing machines, said he did not think information handling was a bottleneck or that it was causing people to hold off on buying new sequencers.

Researchers are increasingly turning to cloud computing so they do not have to buy so many of their own computers and disk drives.

Google might help as well.

“Google has enough capacity to do all of genomics in a day,” said Dr. Schatz of Cold Spring Harbor, who is trying to apply Google’s techniques to genomics data. Prodded by Senator Charles E. Schumer, Democrat of New York, Google is exploring cooperation with Cold Spring Harbor.

Google’s venture capital arm recently invested in DNAnexus, a bioinformatics company. DNAnexus and Google plan to host their own copy of the federal sequence archive that had once looked as if it might be closed.

The amount of data stored for a human genome will drop sharply. Sequencers produce huge amounts of raw data that then has to be analyzed and processed by software to produce the result.

With the field still young, many researchers store all the raw data, so it can be re-analyzed if better software is developed in the future.

In uncertain times, “scientists cling to their data,” said David J. Dooling, assistant director of the genome institute at Washington University in St. Louis.

But there is now so much raw data that it is becoming not feasible to re-analyze it. So researchers will increasingly store just the final results. In the case of human genomes, they might store even less — only the difference between a particular genome and some reference genome.

Professor Brown of Michigan State said: “We are going to have to come up with really clever ways to throw away data so we can see new stuff.”
https://www.nytimes.com/2011/12/01/b...e-of-data.html





Why I'm Returning My Kindle Fire
Bruce Eckel

I'm a big Amazon fan, and a Prime account is great when you live in the boonies. I've also become a big Kindle fan -- but I've just discovered that I'm only a fan of the old design: the amazing thin, light, black-and-white book-reader-only kindles.

I've held off on buying a tablet until now. I have a great desktop (fanless running Windows 7 and, inside Virtualbox, Unbuntu Linux) and a great laptop (Macbook), and it's getting more and more seamless to move back and forth between all the OSes with cloud stuff like Google Docs and VirtualBox. Why do I need yet another computer when I'm trying to save money? And waiting on computer purchases always gets you better, cheaper, faster.

The book I'm working on with Dianne Marsh began as an ebook-only project (we later decided that it's worth having a print version as well). That made me realize that I needed to start playing with ebooks, so I got a Kindle. As I've used it, I've gotten more and more attached to it. Just not having to deal with the weight of a book, hold a book open and (I suspect) compensate for the text curved over pages makes it a lot easier to read, and most people I've talked to say that they are reading more now because of it. Being able to carry your library with you is fantastic.

So when the Fire was announced, I was already primed. I really liked the Kindle experience, and here was a tablet computer for only $199! It seemed like it was time to take the leap.

This was my first tablet computer so I assumed I'd have to compensate and adapt. The 7" screen makes selecting and typing a hit-and-miss affair; perhaps younger and nimbler fingers were having a better time of it.

Then I tried transferring an AVI video file to the device. No go; it simply didn't see the file. Also, there's no way to add memory so even if video files did work I wouldn't be able to put very many of them in (I found one or two blogs that said you had to translate them into MP4 format first, but following those instructions produced no joy. Apparently you also need to use a tool that will translate them and create a special profile file before the Fire will recognize it but I never got that far).

Then a really big surprise. I've been creating a tool to memorize lines for an upcoming play, and it creates a .mobi file (the Kindle format) so I can upload it to the Kindle and use it to prompt myself. This has been terrifically useful, and it's also pushed me through the process of learning how to create this Kindle-specific format.

Or so I thought.

It turns out the Fire doesn't read .mobi format. This completely stuns me -- Amazon has invested so much in having their own format which goes against the apparently more powerful EPUB format that I can't see how they wouldn't have built-in support for it in the Fire. But sure enough, I uploaded my .mobi files to the "books" directory of the Fire and they didn't show up. I understand that there's probably some way to manage all this stuff and get what you want but it seems like an uphill battle.

The more I used the Fire, the more it felt like I was looking through the wrong end of a spyglass and all I could see was Amazon. I had read that the Fire is designed as a consumption device for Amazon products but I hadn't believed that they would go to so much trouble to hobble what should be a general purpose computer. This is an unfortunate sign for the company; it means that the people who are running it are salesmen and bean counters who are more concerned about what a product does for the company and its bottom line than what it actually does for the customer.

Still, I was determined to try to make a go of the Fire because its $199 price tag seemed to be a breakthrough for tablets and could motivate a lot of people to get one, so I should know about them.

Then I went to Costco. There, I saw a $189 Vizio Android tablet which was not only 8" (vs. 7" for the Fire) but also had things like a camera and expandable memory. So there went the price advantage. Next to it was a 10.1" Acer Iconia Tab A500 for $319, sporting the very latest Android as well as things like a GPS and front and back cameras. The size alone drove me to this one.

The feel between the Acer and the Fire is nothing short of totally different. From the first moment, the Acer feels like a real computer, one which is trying to enable you rather than restrict you.

There were some oddities, which I suspect are universal with Android devices. For example, there's no built-in file manager to copy files around and the like. A quick search led me to the most popular, Astro. Downloading and installation is easier than any desktop OS I've ever used. It looks like there are a lot of applications out there, predominantly free or very low cost, on the order of what you see in the Windows world.

If you want to manage files from a Windows machine, all you have to do is connect a USB cable, but for a Mac you must install the Android file transfer program.

If you use Google, Android devices are tuned to make the transition seamless. Although it was possible to connect to Gmail using the Fire, the full Android experience puts you right in touch with all your Google apps (such as contacts). When it's sleeping it even gives you little sound notifications when an email or calendar event happens.

Loading an AVI file was seamless; actually the ACER can accomodate standard USB dongles as well as micro USB and it even has an HDMI output for your TV. There's a switch that locks the orientation of the screen (very nice for watching movies in bed, and something the Kindle Fire sorely misses, or perhaps it's a setting I just didn't discover).

The Kindle reader application works very nicely, and something called "Lumibooks" came pre-installed, and although I have yet to discover the file system for either of them both apps claim you can download to them. There's also a Nook app that comes pre-installed, so buying an Android tablet allows you to read books and watch videos of any kind but buying a Fire makes it hard to do anything but interact with Amazon, while at the same time leaving out lots of other useful features like cameras and GPS and expansion memory.

The salesmen and bean counters must certainly feel like this is a triumph because the Fire feels like a funnel into Amazon. But it is a short-term, hollow victory and indicates a bad trend for Amazon.

Fortunately the company should get quick feedback when people start discovering that lower-cost competing products give them much more: A true computer rather than shackles. I can't imagine why anyone would want a Fire when they can buy a real Android instead. I only hope that programmers will not have to do anything in order for their Android apps to run on the Fire; that would be a real nail in the coffin.
http://www.artima.com/weblogs/viewpo...?thread=338317





In Australia, Samsung Scores Rare Patent Win Versus Apple
Amy Pyett and Narayanan Somasundaram

Samsung Electronics Co is set to resume selling its Galaxy tablet computer in Australia as early as Friday, after the South Korean technology firm won a rare legal victory in a long-running global patent war with Apple Inc.

An Australian federal court unanimously decided to lift a preliminary injunction, imposed by a lower court, on sales of Samsung's Galaxy Tab 10.1 -- but granted Apple a stay on lifting the sales ban until Friday afternoon.

"It's hard to expect the ruling to have a major positive impact on Samsung's tablet business or legal cases in other countries as Apple could appeal ... and sales won't be restored anytime soon," said Song Myung-sub, an analyst at HI Investment & Securities in Seoul.

"Apple will continue to dominate the tablet market as Amazon appears to be the only viable threat at the moment and other vendors, including Samsung, continue to struggle."

Lawyers for Apple declined to comment after the ruling, but getting a delay in lifting the temporary sales ban could give time for an appeal to be launched.

The ruling is, however, a timely boost for Samsung ahead of the busy pre-Christmas shopping season. While the Australian market is not large, it is a key launch market for Apple products outside the United States.

"Samsung's Christmas elves will be rushing to prepare Galaxy Tab orders," said Tim Renowden, analyst at research firm Ovum. "The well-regarded Galaxy Tab series provides some of the leading alternatives to Apple's iPad."

Apple was granted an injunction against Samsung in October, temporarily barring Australian sales of the Galaxy 10.1 tab, which had been seen as the hottest competitor to Apple's iPad until Amazon.com Inc launched its Kindle Fire.

Amazon said this week it saw a surge in sales of its tablet devices on the crucial "Black Friday" shopping day after Thanksgiving.

Samsung is the world's top smartphone maker, but a distant second to Apple in tablets. The intensifying legal battle has undermined its efforts to close the gap.

Apple also filed a preliminary injunction request in Germany on Monday to ban sales of the Galaxy Tab 10.1N, a re-designed version of 10.1-inch Galaxy model, whose sales are already banned in that market.

"We believe the (Australian) ruling clearly affirms that Apple's legal claims lack merit," Samsung said in a statement, adding it would soon make an announcement on the market availability of the Galaxy Tab 10.1 in Australia.

Justice Lindsay Foster told the court he would grant a stay on orders until Friday midnight ET, noting Apple would have to go to the High Court if it wanted this extended.

Battle In 10 Countries

Apple and Samsung have been locked in an acrimonious battle in 10 countries involving smartphones and tablets since April, with the Australian dispute centering on touch-screen technology used in Samsung's new tablet.

Apple successfully moved to block Samsung from selling its tablets in Germany and a case in the Netherlands has forced Samsung to modify some smartphone models.

The quarrel had triggered expectations that some of the pair's $5 billion-plus relationship may be up for grabs. Samsung counts Apple as its biggest customer and makes parts central to Apple's mobile devices.

The legal battle in Australia doesn't stop at tablet computers. Samsung has sought to block sales of Apple's latest iPhone 4S, which went on sale early last month, by filing preliminary sales injunction requests in four countries, including Australia.

An Australian court has agreed to hear that case in March and April, with sales allowed to continue as normal ahead of the hearing on alleged patent infringements.

Shares in Samsung, valued at around $140 billion, were flat in a Seoul market down 0.5 percent.

(Additional reporting by Miyoung Kim in Seoul; Editing by Lincoln Feast, Ed Davies and Ian Geoghegan)
http://www.reuters.com/article/2011/...7AT05R20111130





Chart of the Day, Apple Valuation Edition

Andy Zaky at Bullish Cross has a great post on Apple’s valuation, showing the astonishing degree to which the market is discounting the value of a dollar of Apple’s earnings today, compared to just two years ago. Back then, it was worth $32; now, it’s worth just $13. In the eyes of the market, Apple earnings are worth less than those of Cisco, Comcast, IBM, or AT&T, and are worth just 13% of the earnings of Amazon.

All of which raises the obvious question: why is Apple trading at such a seemingly depressed level? I have a few ideas, none of which are particularly compelling.

1. It’s run out of buyers. The Apple bull run has been going on for so long, at this point, that anybody who wanted to buy it has bought it already. And they’ve done pretty well by doing so. If they want to rebalance so that they keep their Apple holdings constant as a percentage of their total portfolio, they’re more likely to be selling than they are to be buying.
2. We’re all long Apple already. Apple is now firmly ensconced in its position as one of the two most valuable companies on the US stock market, in a world where ETFs and index funds are only getting more popular. As a result, if you’re long the S&P 500, you’re long Apple in quite a big way. And a large amount of the trade in Apple is going to be index-arbitrage trading. This is inevitably going to increase the correlation between Apple and the S&P 500. And when the S&P 500 has much lower earnings growth than Apple, that’s going to act as a drag on Apple’s share-price growth.
3. The headline share price is high. This shouldn’t matter, but it does. Small investors feel a bit weird about spending $2,500 on Apple stock and getting the grand total of seven shares in return. And the high share price sends a message to bigger investors, too: it says that Apple isn’t in the business of managing its share price, and is not about to engage in shenanigans like stock buybacks. Indeed, the market shouldn’t even expect a dividend any time in the foreseeable future, despite the fact that Apple clearly has more cash than it knows what to do with.
4. The headline market capitalization is high. When a company is worth $340 billion, a 10% rise in the share price means that the stock market has created $34 billion of new wealth. Which is harder than creating $3 billion of new wealth.
5. The appeal of the mean-reversion hypothesis. Apple can’t go on increasing its rate of earnings growth forever; indeed, it can’t even sustain its current level of earnings growth very long. It’s so big, and has come so far, and is making so much money, that at some point the only way to go is down. This is true on a conceptual level, but I don’t think it’s true on a practical level: Apple’s market share is still pretty small in the US, and positively tiny in the rest of the world. There’s a lot of growth potential left in this company, as smartphones increase their global penetration and as more people move from Windows to Macintosh.
6. Steve Jobs is dead. Apple’s p/e ratios started shrinking at about the same time that Jobs did, and all the hagiographic attention on how unique Jobs was only serves to remind us that he’s not around any more. If the next generation of Apple products is a success, people will still give Jobs the credit, and worry that Tim Cook won’t be able to replicate Jobs’s achievements. It’s going to take a long time before Cook can truly own the company and come out from Jobs’s shadow; in the meantime, investors are naturally going to worry that the glory years are over.
7. Apple’s earnings come from the frothiest, most disposable part of consumer income, which is the first part of consumer spending to go away if and when the economy heads south. As such, Apple’s more vulnerable to an economic downturn than most of its peers.
8. There isn’t a real bear case for Apple: the closest thing I can find is all technical-analysis astrology. And the way that markets work, stocks are much more likely to rise when people are bearish than when they’re bullish. No one seems to think that Apple is actually overvalued; indeed, analysts are ratcheting up their earnings forecasts at an astonishing pace.

Here’s a table from Bill Maurer:

Estimates are up 12% over the past 90 days for the first quarter of 2012, and they’re up 7.5% over the past 90 days for the full year. This also helps explain the compression in forward p/e ratios.

What’s certain here is that the market simply isn’t rewarding Apple for its astonishing level of earnings growth of late. Which is weird, since that kind of earnings growth really wasn’t priced in a couple of years ago. Zaky’s convinced we’re seeing a market failure here, and I’m not convinced he’s wrong. But I’d be happier if someone could persuade me that there’s actually a good reason why Apple earnings seem to be worth so much less than so many of Apple’s less-successful peers.
http://blogs.reuters.com/felix-salmo...ation-edition/





iPad Disrupting Global DRAM Market, Causing Chipmakers to Lose Billions
Daniel Eran Dilger

Sales of Apple's iPad tablet computers are crushing the best laid plans of many chip makers, causing a surplus of memory chips after a massive expansion in DRAM factories were built in anticipation of conventional PC growth.

According to a report by Bloomberg, DRAM chipmakers including Elpida Memory and Hynix Semiconductor have lost $14 billion over the past three years, on top of an estimated $37 billion they invested in DRAM factory expansions in anticipation of continued demand for DRAM in the PC industry.

Historically, PC unit sales have grown as consistently as their appetite for DRAM, but when Apple launched the iPad, it delivered a variety of PC-like functions without the same requirements for DRAM memory storage, using just a quarter of the DRAM of the typical PC, with no capacity (or need) for later expansion.

The report quoted Taiwan analyst Chen Liway with Polaris Securities as saying, "DRAM makers invested too much, and they bet heavily that growth of the computer industry would always continue. That would have been OK if the iPad had never come along.”

Apple's A5 (shown below), used in the iPad 2 and iPhone 4S, incorporates just 512MB of DRAM, the same amount as its previous generation of iOS devices (albeit RAM of the faster LPDDR2 type). A primary reason for installing less DRAM is that it requires continuous power to keep the chips functional, unlike storage NAND flash RAM.

By designing iOS to conserve the amount of DRAM required, Apple can not only build cheaper devices while maintaining its profit margins, but also deliver leading battery efficiency, something that its competitors have failed to match.

Chipworks 3

Apple now ships more iPads than all the PCs Dell sells

In the last calendar quarter, Apple shipped 11.1 million iPads, which not only expanded the computing market with less need for DRAM, but also held back sales of conventional PCs. Apple actually sold more iPads than rival Dell sold in all its PCs together (10.6 million).

Sales of the iPad replaced conventional laptops at a variety of companies and schools at a time when the demand for generic PCs has matured in the US. Gartner had originally projected that Q3 PCs would achieve 5.1 percent growth globally, but reported that shipments only grew by 3.2 percent in the fall quarter.

PC sales have been in doldrums since 2008; in the winter quarter of that year, Windows sales dropped by 8 percent rather than growing by 10 percent as Microsoft had expected. Sales remained down during 2009's global financial crisis and then Apple released the iPad in 2010. Apple has since sold 40 million iPads, and may sell another 20 million during this winter quarter, according to Forrester Research.

Perfect storm hits DRAM

The iPad's shifting of consumer demand has had a profound effect on DRAM prices, 65 percent of which is used by the PC industry. The price of DDR3 2 gigabit RAM chips has fallen 61 percent this year, the report noted.

However, after investing $3.8 billion in new state of the art factories, Japan's largest RAM chip maker Elpida said it had to maintain production just to generate enough cash to cover its debt payments, adding to the supply and depressing prices further.

Flooding in Thailand, which has disrupted the supply of hard drives, may push PC unit sales down another 8 percent, according to Fitch Rating analyst Kevin Chang, rather than supporting the 5 percent industry growth that had been expected. On top of that, Microsoft's next Windows 8 is aiming at reducing its memory footprint to enable more efficient battery use, something Apple pioneered with the iPad.

Less DRAM, more NAND Flash

To balance the excess supply of conventional DRAM (used for short term memory storage by the CPU), some chipmakers are shifting to produce specialized chips such as NAND flash RAM, used in SSD storage and by devices like the iPad and smartphones to store data permanently.

While the iPad only incorporates 512MB of DRAM, it contains between 16 and 64GB of NAND flash RAM storage. PCs using SSDs, including Apple's popular MacBook Air models, use 128 to 512GB of NAND flash to replace their need for a conventional, mechanical hard disk drive.

One of the primary beneficiaries of the NAND RAM production is Samsung, which currently supplies parts for the iPad as well as SSD components. The company is the world's largest chip maker, but is also waging a war with Apple over building devices that "slavishly copy" its iPhone and iPad, a move that has Apple reportedly looking for a new manufacturer of its A4 and A5 chips used in iOS devices.

Second place Icheon and fourth place Micron Technology have both shifted their RAM to production toward NAND, which has helped both return to profitability after two years of losses.
http://www.appleinsider.com/articles..._billions.html





We Don’t Need More Tech Giants Like Apple
Alexis Blackshear

People would rather die than work for Apple.

Apple loyalists quickly proclaim the wonders of Apple and its dead co-founder Steve Jobs, but is that company the ideal example of what our country needs to rebound? Apple, the shining light of technology and entrepreneurship, might lead all other companies by value, but it falls far short of setting a positive example for Americans to follow.

Wealth

That Apple has created wealth is indisputable. Its creative products have set the standard for at least two industries and continue enriching shareholders. The company reportedly employs 60,000 or more workers, a payroll at which none should snicker. Therefore, calling for more companies like Apple seems natural.

Get more of a good thing

Technology giants like Apple, Google and Microsoft employ thousands of workers, but are they the cure for the nation’s economic woes? Not hardly. In fact, the opposite is true. These giants have – at least in part – been the problem, not the solution.

How many Apple’s can we sustain?

Although Steve Jobs was undoubtedly successful, can everyone form a company of that size and value in such a short time? No. Even though some of the best ideas remain un-thought-of, the nation and the world cannot create enough demand for enough products to sustain large numbers of giant technology corporations.

Not all jobs are American

Well-publicized reports of workers in China killing themselves to escape the inhumane conditions of iPad and iPhone assembly lines are a vivid reminder that Apple’s 60,000 jobs are not all American. Many of them are in China, Taiwan, Bangladesh and other countries that profit from the misery of oppressed human beings. This is hardly a plus for the United States.

As long as we allow corporations to exploit slave labor (and ignore American labor), we will continue to see huge companies profit to no-one’s benefit but the shareholders.

Jobs, what jobs?

Even worse, Apple has relatively few jobs per its immense, record setting profits. Altogether, Apple, Google and Amazon employ just over 100,000 people, a stunningly low number considering the wealth those companies have created and absorbed. As politicians, social planners and hyper-capitalists fondly dream of more of these corporate success stories, they should remember that for the billions of dollars of wealth they create, very few go to work as a result.

The jobs Apple creates are in China where its partner Foxconn put up nets to catch workers who try to leap to their deaths. Foxconn also forces its slaves to sign no-suicide statements promising they won’t kill themselves.

Apple is such a great employer; people would rather die than have the privilege of building iPads. That’s the kind of jobs Apple creates. Did I mention Apple enslaves children and also poisons its enslaved workforce?

Apple, North Carolina

Consider the much-ballyhooed Apple data center project built in Maiden, North Carolina. Politicians trumpeted the benefits of having Apple move in. In fact, in exchange for the privilege of hosting such a big-name company, Apple received tax incentives and other costly perks. What did North Carolina get in exchange for millions of tax dollars and millions more in lost tax revenue? 50 jobs.

Reminds me of Judas Iscariot

Judas Iscariot, one of the most famous traitors of all time, sold out Jesus Christ for thirty silver coins. After he did his dastardly deed, he realized that his treachery was not worth it. His actions led to the death of an innocent man; thirty pieces of silver was all he got. North Carolina was like Judas; all they got was 50 jobs.

State and local governments promised to bring economic revival to the region, but only 50 people got work from it, many of them were imported from out of state. Once again, the public trust was betrayed to a giant corporation in exchange for a pittance.

Unlike Judas who felt remorse, the North Carolina politicians that sold their souls to Apple are unlikely to repent.

Oh yeah, Facebook did the same thing in North Carolina; Amazon is doing the same thing to South Carolina.

The moral dilemma

A straight capitalist would applaud all these giant corporations for providing a product people want at a price they can afford while delivering impressive ROI to their shareholders. That is only part of the story.

Apple can afford to hire Americans to do its work, but it refuses. As the Bible says, “To him that knoweth to do good, but doeth it not; to him it is sin.” Apple knows Americans are hurting from its business practices. Thousands of jobs (many more than thirty) could be created here. Thousands of slave-workers in China and other countries could be spared the abuse and inhumane conditions Apple has imposed on them. Apple could do good, but it won’t.

Apple is so exceedingly wealthy that it could commit half of its profits to create a moral hiring practice and still be more profitable than almost every company on earth. Like Google, Microsoft and almost every other giant corporation, Apple chooses money over morality and greed over social responsibility.

Early American corporate success stories were notable because they lifted up the entire country. They shared the wealth with thousands employees who were able to earn a living wage as a result of their success. Nowadays, American ingenuity pays off only to shareholders and select foreign and domestic power brokers.

More Apples? No Thanks

As long as corporate giants like Apple refuse to fulfill their moral responsibility to the country that made their greatness possible, we do not need more of them.

Sure, Apple and others have remarkable products and remarkable stories to tell. Those who dare read between the lines, however, find another story that modern power brokers hope will never be told.
http://www.computerpartsgreenvillesc...r-tech-giants/





Apple iPhone Spontaneously Combusts Aboard Flight in Australia
Zach Epstein

An Apple iPhone spontaneously began smoking and emitting a red glow while aboard an airplane in Australia. Passengers aboard Regional Express flight ZL319 were welcomed to their destination in Sydney, Australia on Friday by a frightening ordeal. According to the airline, a passenger’s iPhone began “emitting a significant amount of dense smoke” shortly after the flight landed, and the smoke was accompanied by a red glow. A flight attendant extinguished the device and no passengers or airline staff were injured according to the airline. The phone in question appears to be an iPhone 4 (pictured above) as opposed to the new iPhone 4S model, and it has been collected by the Australian Transport Safety Bureau as part of its investigation. Regional Express’ full press release follows below.

Quote:
MEDIA RELEASE

MOBILE PHONE SELF COMBUSTION

Regional Express (Rex) flight ZL319 operating from Lismore to Sydney today had an occurrence after landing, when a passenger’s mobile phone started emitting a significant amount of dense smoke accompanied by a red glow.

In accordance with company standard safety procedures, the Flight Attendant carried out recovery actions immediately and the red glow was extinguished successfully.

All passengers and crew on board were unharmed.

The matter has been reported to the Australian Transport Safety Bureau (ATSB) as well as the Civil Aviation Safety Authority (CASA) for investigation and directions.

The mobile phone in question appears to be an Apple iPhone (see picture below) and has been handed over to ATSB for analysis.
http://www.bgr.com/2011/11/28/apple-...-in-australia/





5 Reasons the AT&T, T-Mobile Merger Is as Good as Dead
Lance Ulanoff

Mashable OP-ED: This post reflects the opinions of the author and not necessarily those of Mashable as a publication.

Poor AT&T. Up until recently, I bet its execs thought they were on a hero’s quest: Combining two big mobile companies (AT&T and T-Mobile) to make one giant that could serve the masses with more handset choices, better 3G and, eventually, more 4G coverage. They’d improve the economy and bring jobs to the jobless. How devastating it must be for them to finally realize that AT&T isn’t Superman, it’s Don Quixote, and it’s not flying through the air, it’s riding a donkey and tilting at windmills.

The mobile giant comes to this crushing realization as the Federal Communication Commission does what no one really expected it or the Department of Justice to do—reject the proposed deal outright.

This is, friends, the end of this deal. You know it, I know it, and AT&T knows it. It withdrew its application from the FCC and is now talking about taking a possible $4 billion charge when the deal officially collapses.

Why has this happened? Well, I think the FCC laid out the case more clearly than anyone else thus far.

Too Big

A senior FCC official said the commissions had “never seen anything like the deal described in this record.” It would create “unprecedented concentration in the wireless industry.”

This is not news. From the moment the deal was announced in March of this year, everyone voiced the same concern. This would hyper-consolidate an already shrinking industry. Worse yet, if AT&T succeeded, it could’ve emboldened Verizon to snap up its CDMA counterpart Sprint.

Not in the Public Interest

The FCC said that under the guidelines of the Communications Act, there’s no way an AT&T and T-Mobile merger could served the public interest. That’s also true, but also kind of funny. Since when is business acting in the public interest? AT&T’s plans were about it getting bigger and squeezing the competition until it screamed uncle. Public interest would be a nice by-product, if it occurred—which it would not.

No Benefit

Any time one big company proposes buying another big one (or even mid-sized one) they pitch it with a long list of benefits. Perhaps the biggest among AT&T’s list was job creation—sorry domestic job creation. The FCC picked up on this promise and said simply this would not happen. When I think about the claim, I get a little angry. People are hurting in the U.S. Joblessness sits at 9% and seems stuck there. AT&T’s claim that a mega merger would somehow create jobs is simply galling. The FCC sounded kind of peeved, too, and noted that an AT&T, T-Mobile merger would “result in massive job loss.” Of course it would. I can’t recall a merger of any kind that didn’t result in some kind of consolidation and then shedding of duplicative operations, services, departments. It’s what happens.

4G Won’t Grow

AT&T’s 3G networks travails are well-documented, but with the merger, AT&T promised that it would offer a better, faster 4G network in far less time than it could alone. This is akin to waving one hand wildly so no one notices that you’re missing the other one. AT&T never promised that the merger would improve the widely used 3G network. Instead it moved on to the sexier 4G network promise. Thing is, T-Mobile’s 4G is kind of a kludge. It’s HSPA+, a sort of juiced up 3G, that some generously call 4G.

Once again the FCC wasn’t buying and simply dismissed the idea that the merger would help AT&T speed up its high-speed network build out.

It Could Kill Competition

Some of us in this industry are old enough to remember when the telephone company was called Ma Bell. This maternal label conveyed a sense of warmth, and protection, but it was really more ironic than sincere. Ma Bell was the massive telco that basically ran communication services for the U.S. The government eventually forced the monopoly to split up into many baby bells.

In proposing this merger, AT&T must’ve been hoping that we were all suffering from a kind of collective amnesia. No one would remember that AT&T used to be part of Bell Telephone (not a direct descendant, but it was bought by one of the many baby bells in 1983) and that it knows from “Too Big.” Perhaps AT&T thought it could slowly but surely get the old band back together until there is just one U.S. mobile service company.

This time the FCC offered the understatement, the merger “would diminish competition.” Again true-enough.

When I first heard of the deal, I didn’t believe the U.S. government would block it. I assumed that it did not understand the intricacies of the cellular industry. Clearly I was wrong. Today’s DOJ and FCC are savvier and warier of consolidation. I have to wonder if they would have approved the Cingular/AT&T merger.

For those who bought AT&T’s story and are sad that the deal is all but dead, I promise you, your lives will not be worse off without an AT&T, T-Mobile merger and they most certainly would not have been better if it had gone through.
http://mashable.com/2011/11/28/att-t...-good-as-dead/





Cisco: Don’t Blame Netflix for the Zettaflood
Jon Stokes

Cisco’s newly released Global Cloud Index estimates that annual global cloud traffic will grow from 130 exabytes to 1.6 zettabytes by 2015. The kicker, though, is that only 17 percent of that 1.6 zettabytes—equivalent to 22 trillion hours of online video*—actually goes from the cloud to end users via services like video streaming or web surfing. The vast majority (76 percent) of the data that the cloud shuffles around is internal to the datacenter, and the remaining 7 percent of traffic is datacenters communicating with each other.

The report suggests that this lopsided ratio of internal to external traffic will hold steady through 2015, and it blames virtualization for this. But I wonder if some emerging trends in IaaS might not tip the balance much further toward outbound traffic by cutting out a lot of legacy-related internal traffic.
Containers and the post-OS cloud

Cisco gives a number of reasons why the cloud datacenter’s internal traffic far outpaces its out-bound traffic, most of which have to do with the particulars of the way that the datacenter divides up basic compute and storage functions. Specifically, datacenters separate application servers from both database (SQL and NoSQL) and non-database (block, blob, cache, backing store, etc.) storage, so data is constantly traversing the internal network for everything from backup jobs to virtualization-based load balancing and failover.

It’s no surprise, then, that the report claims that the increasing adoption of virtualization is part of what’s driving this trend.

The ratio of traffic exiting the data center to traffic remaining within the data center might be expected to increase over time, because video files are bandwidth-heavy and do not require database or processing traffic commensurate with their file size. However, the ongoing virtualization of data centers offsets this trend. Virtualization of storage, for example, increases traffic within the data center because virtualized storage
is no longer local to a rack or server.


What’s interesting about this is that this is that in moving storage away from the compute node and consolidating it in a physically, datacenter architects are just moving traffic from local, board-level buses to high-powered switches; I wonder though, how long can this go on?

These switches are expensive and power-hungry, and for certain types of jobs (non-latency-bound, batch workloads, like Hadoop) the ideal configuration is to have chunks of storage tightly bound to the compute nodes. Now, the vagaries of magnetic spinning disks mean that it makes more sense to isolate all of that failure-prone, mechanical hardware into one unit and send storage traffic over the network, but when everything goes solid-state, will we see storage move back to the compute nodes?

In addition to a move of more storage back to the compute nodes themselves, I wonder if the emerging post-virtualization, post-OS cloud infrastructure will cut down on a lot of this traffic. If and when we eventually get away from virtualization and from the necessity of wrapping an every single workload in full-blown, bloated OS image, this will massively reduce the amount of data that gets shuffled around. Think about it. If apps are wrapped in lightweight, modular containers, then there will be a ton of OS cruft that won’t have to get moved through a switch for load balancing, failover, or even booting. Already it’s the case that modern image storage platforms can compress the amount of space that images take up by some 90 percent by simply not storing redundant OS data (this technique is called deduplication). Now imagine if that redundant data never had to move through a switch. That would be a massive amount of internal bandwidth saved, and it woud definitely change the ratio of internal to external datacenter traffic.

Of course, there are two possible reasons why Cisco wouldn’t raise the same points that I’ve raised above: 1) I’m wrong, or 2) Cisco is keen on making the case that the datacenter’s appetite for its switching hardware is going to grow, not shrink. I’m betting that the answer is #2.
http://www.wired.com/cloudline/2011/...co-zettaflood/





Terahertz Wireless Chip Brings 30Gbps Networks, Subcutaneous Scanning
Sebastian Anthony

Rohm, a Japanese semiconductor company, has created a silicon chip and antenna that’s currently capable of transmitting 1.5Gbps, with the potential to scale up to 30Gbps in the future. By comparison, the fastest 802.11 (WiFi) transmission speeds max out at around 150Mbps, and the incoming WiGig standard peaks at 7Gbps.

The significant advance here, though, is the reception and transmission of terahertz waves (300GHz to 3THz) using a chip and antenna that’s just two centimeters long. As you see in the image below, this thing could be screwed onto the back of your PC or router with nary a bump. Rohm is saying that the chip should cost less than $5, too, when it comes to market in a few years. This is in stark comparison to existing terahertz-level gear that’s large, expensive, and only capable of data rates of 100Mbps.

Terahertz wireless chip/antenna from RohmLike WiGig and its 60GHz transmission range, though, terahertz networking isn’t going to replace standard, 2 and 5Ghz home networks. The higher the frequency, the more directional the signal — and a terahertz transmission, which has a submillimeter wavelength (0.1 to 1mm), is almost in the same class as a laser… and we know how directional they are. Terahertz signals also fall prey to atmospheric radiation. In other words, Rohm’s chip might allow for some truly awesome device-to-device home networks, but don’t expect your local city to be blanketed with 30Gbps internet access.

Ultimately, Rohm’s new terahertz chip is likely to have a larger impact on surveillance, or perhaps medical imaging. If you’re up to speed on the contentious topic of full-body security scans, you’ve probably heard of the millimeter wave scanner, the (probably) safer cousin of the backscatter X-ray. A millimeter wave scanner uses frequencies in the 30 to 300GHz range to see through clothing — and terahertz radiation, being submillimeter, can also penetrate through a few millimeters of skin. It’s likely that the next stage of airport security will use terahertz technology.
http://www.extremetech.com/extreme/1...neous-scanning





Demand for Netflix Could Lead to Higher Cable Bills
Alex Sherman

Time Warner Cable Inc. and U.S. pay-TV companies, weighing how to profit from surging Internet demand spurred by Netflix Inc. and Hulu, are on the verge of instituting new fees on Web-access customers who use the most. Photographer: Jin Lee/Bloomberg

Cable operators are rethinking their Internet pricing strategy because Netflix and Hulu’s subscription services have driven up usage at peak hours once reserved for watching TV. Photo: Jin Lee/Bloomberg

Time Warner Cable Inc. (TWC) and U.S. pay- TV companies, weighing how to profit from surging Internet demand spurred by Netflix Inc. (NFLX) and Hulu, are on the verge of instituting new fees on Web-access customers who use the most.

At least one major cable operator will institute so-called usage-based billing next year, predicts Craig Moffett, an analyst with Sanford C. Bernstein & Co. in New York. He said Cox Communications Inc., Charter Communications Inc. (CHTR) or Time Warner Cable may be first to charge Web-access customers for the amount of data they consume, not just transmission speed.

“As more video shifts to the Web, the cable operators will inevitably align their pricing models,” Moffett said in an interview. “With the right usage-based pricing plan, they can embrace the transition instead of resisting it.”

U.S. providers like Time Warner Cable have weighed usage- based plans for years as a way to squeeze more profit from Web access, and to counter slowing growth and rising program costs in the TV business. While customer complaints hampered earlier attempts, pay-TV companies are testing usage caps and price structures that point to the advent of permanent fees.

“We’re basically a broadband provider,” Peter Stern, chief strategy officer for New York-based Time Warner Cable, said Nov. 17 at the Future of Television conference in New York. “As a convenience for our customers, we package and distribute television and provide service around that.”

Google (GOOG) Deterrent

Rogers Communications Inc., the largest Canadian cable company, has been billing broadband customers based on consumption since 2008. U.S. providers AT&T Inc. (T) and St. Louis- based Suddenlink Communications LLC are experimenting with usage-based plans.
Cable companies see usage-based billing as a way to limit the appeal of online services like Netflix and Hulu LLC, and reduce the threat from new entrants like Amazon.com Inc. (AMZN) and Google Inc.

“It’s the reason why Apple or Google would inevitably be reticent about committing a significant amount of capital to an online video model,” Moffett said. “You can’t simply assume just because you can buy the content more cheaply, you can offer a product that’s cheaper to the end user.”

Netflix and Hulu’s subscription services have driven up Web usage at peak hours once reserved for watching TV. Google, Amazon, Apple (AAPL) Inc. and premium channels HBO and Showtime have also put shows online and followed viewers onto mobile devices like iPads and Android tablets.

Web Demand

While demand for Web service grows, cable operators are battling to preserve profit in the mature pay-TV business and withstand competition from satellite carrier DirecTV (DTV), Verizon Communications Inc. (VZ)’s FiOS and AT&T’s U-Verse. Programmers like Walt Disney Co. (DIS)’s ESPN are also demanding higher fees.

Time Warner Cable, the second-largest U.S. cable operator behind Comcast Corp. (CMCSA), lost 126,000 pay-TV accounts in the third quarter.

The incentives to focus on Web access are compelling. Cable’s broadband gross margins are about 95 percent, versus 60 percent for video, according to Moffett. As programming costs increase nearly 10 percent a year, video margins are crimped, he said.

Time Warner Cable is testing meters to measure broadband consumption for the purpose of tiered pricing, Chief Executive Officer Glenn Britt said in June. In April, he said usage-based billing is “inevitable.” A previous attempt in 2009 was abandoned amid customer complaints.

Low-Impact Users

“Some form of usage-based billing might have some utility for customers who use the Internet very little, or only use low- bandwidth applications like e-mail,” said Alex Dudley, a Time Warner Cable spokesman.

AT&T, based in Dallas, charges digital subscriber line, or DSL, customers who exceed a monthly limit of 150 gigabytes in three consecutive months $10 extra for every additional 50 gigabytes of data they use.

Suddenlink, with about 1.4 million customers in states including Missouri, Arizona, Texas and North Carolina, began instituting usage caps in some markets in October. Users pay $10 for each 50 gigabytes they use over their monthly allowance.

Data usage is surging by almost 50 percent a year, Chief Executive Officer Jerry Kent said in an interview. Suddenlink’s broadband revenue rose 12 percent in the third quarter, versus a 1.6 percent gain from pay-TV.

“Our video business is challenged,” Kent said. “My broadband margins are double my video margins.”

Movie Quotas

Cox, the third-largest U.S. cable company, segments Web- access customers based on data speed, allowing those who purchase faster service to use more data overall.

While those who exceed the caps aren’t charged, they are told to reduce usage or choose a different plan, said Todd Smith, a spokesman for Atlanta-based Cox. He wouldn’t say whether Cox will start charging based on total data used.

Comcast, based in Philadelphia, and St. Louis-based Charter, No. 4 in the U.S., have instituted caps large enough that most customers aren’t affected. Neither charges overage fees, nor do they have near-term plans to charge subscribers based on consumption, according to Comcast spokeswoman Jennifer Khoury and Charter’s Anita Lamont.

The standard cap for Comcast, Charter, Cox and Suddenlink is 250 gigabytes per month. That’s enough for a household to send or receive 12,000 one-page e-mails and watch 60 standard- definition movies with excess capacity for other tasks, according to Suddenlink.

Netflix Protests

Netflix steers customers with enough bandwidth toward high- definition movies, which soak up about double the data. If the average U.S. household, which watches more than five hours of television a day, were to transfer all that viewing to an online, high-definition source, their usage would total almost 10 gigabytes a day and break through the current caps.

Charging by Web usage, cable companies may discourage customers from dropping traditional pay-TV service and slow the growth of Netflix, Hulu and an expanding list of online alternatives, Moffett said.

The possibility of usage-based pricing has brought protests from Los Gatos, California-based Netflix and warnings from Charlie Ergen, chairman of rival Dish Network Corp. (DISH), which operates the Blockbuster movie-rental business.

$20 Surcharge?

“That Netflix subscription of $7.99 could go to an extra $20 a month for bit streaming,” Ergen said during Dish’s conference call on Nov. 7, making a total monthly subscription “the equivalent of $27.99.”

Consumption-based pricing is anti-competitive if the goal of broadband providers is to boost revenue by diminishing the value of rivals, wrote Netflix General Counsel David Hyman in a July Wall Street Journal editorial.

The practice “is not in the consumer’s best interest as consumers deserve unfettered access to a robust Internet at reasonable rates,” said Steve Swasey, a Netflix spokesman.

Federal Communications Commission Chairman Julius Genachowski publicly supported usage-based pricing in December, a victory for cable companies concerned that usage-based billing would run afoul of net neutrality rules prohibiting Internet services from favoring one form of content for another.

While lower caps may slow the online shift, cable companies won’t be able to stop it. According to media researcher SNL Kagan, about 12.1 million U.S. households will receive TV shows and movies from Internet services rather than a traditional pay TV provider by 2015, up from 2.5 million homes at the end of 2010, SNL Kagan estimates.

Cable’s best option is to find ways to profit from the online shift, said Moffett. If the companies were to lose all of their video customers, the revenue decline would be more than offset by a lower programming fees and set-top box spending, he said.

“In the end, it will be the best thing that ever happened to the cable industry,” Moffett said.
http://www.bloomberg.com/news/2011-1...year-tech.html





US Cable Providers Eye 'Usage-Based' Billing
Chris in Paris

Here's another industry that is bloated and worthless, thanks to the political class. As expensive as things can be here in Europe, people choke when they hear how much Americans pay for internet/cable/phone services. At home in Paris, our fiber optic 100MB connection also includes free phone calls to 100 countries around the world, plus 140 TV channels for €33.90 per month (around US$45). No limits. Other countries in Europe have faster speeds and better prices.

For Time Warner or any of the US operators to even consider raising fees because people are opting for Netflix is laughable. How about they start providing first world services like people have across Europe (and parts of not-first-world Asia) before they start adding caps and increasing prices? While Obama didn't really say that Americans were lazy, our cable companies sure are. And they only get away with it because of the money they dump into the political world (and the fact that Americans have no idea how much people "don't" pay for the same services, if not better, in Europe). Bloomberg:

Time Warner Cable Inc. (TWC) and U.S. pay- TV companies, weighing how to profit from surging Internet demand spurred by Netflix Inc. (NFLX) and Hulu, are on the verge of instituting new fees on Web-access customers who use the most.

At least one major cable operator will institute so-called usage-based billing next year, predicts Craig Moffett, an analyst with Sanford C. Bernstein & Co. in New York. He said Cox Communications Inc., Charter Communications Inc. (CHTR) or Time Warner Cable may be first to charge Web-access customers for the amount of data they consume, not just transmission speed.

“As more video shifts to the Web, the cable operators will inevitably align their pricing models,” Moffett said in an interview. “With the right usage-based pricing plan, they can embrace the transition instead of resisting it.”


For those interested in the subject, here's a great read about the myth of the "network hog" and how it's nothing more than an excuse to raise rates. The real problem is lousy networks.

NOTE FROM JOHN: This is simply the cable companies following the lead of the airlines - how much can we fleece our customers for by charging for luggage, blankets, smiles. Rather than striving to make more money by being more competitive, less wasteful, and offering customers more, far too many American industries are now looking for the quick, easy buck.
http://www.americablog.com/2011/12/u...age-based.html





Another Study Shows Data Caps Are Likely Ineffective, Address Wrong Problem
Devin Coldewey

Data caps on your broadband, while in principle sound troublesome, are at least understandable. Bandwidth is a limited resource and we all have to share it, and presumably if we all were maxing our connections out all the time, we’d tax the system beyond its capacity. But who uses the most bandwidth and when is a more practical thing to investigate, as knowing that could prevent congestion at peak hours and so on.

Some studies and theories have suggested that so-called bandwidth or data hogs, in other words people who use the entirety of the product they paid for, aren’t really a great source of congestion, and the data caps intended to prevent such users from maxing out all the time aren’t an effective countermeasure.

The guys at Diffraction Analysis examined data from “a mid-size company from North America” that was interested in understanding its consumers’ use patterns. Good for them, by the way. The data they submitted was bandwidth consumption throughout the day, with five-minute granularity. The study’s aim was to determine whether a small subset of users (the hogs) could indeed affect the quality of others’ service, and whether caps were an effective deterrent.

The conclusions, briefly stated, were that while heavy users do in fact consume far more data in aggregate than the average (288GB vs. 9.6GB in this study), their contribution to congestion during peak hours, and when the network is at 75% of its capacity or above, is in fact not much greater than the average user.

What the statistics bear out is this: during peak hours when service is most likely to be affected by overcrowding, heavy users only make up a small percentage of those consuming bandwidth – 14.3%, to be precise. And of the heavy users, only half of them were on the fastest connection, further driving home the fact that while they may consume more in total, they are not contributing more than anyone else to the actual problem, which is slowdown in peak hours.

So why the data caps? Clearly a limit of, say, 300GB a month (or lower) won’t prevent peak usage from affecting service quality. In fact, if people are limited by draconian data caps, they are likely to limit their usage to peak hours: streaming a movie in the evening, or browsing YouTube when they get home from work. This would in fact contribute even more to the problem of peak crowding.

What’s the solution? Bandwidth caps seem more important, and advertising a range of values instead of a maximum would be both more honest and indemnify the ISP against slowdowns. If a dynamic bandwidth cap let you download at 30Mbps in the middle of the night but limited you to 5Mbps during peak hours, it’s the best of both worlds and nobody has to worry about overage charges.

And how would you make money to replace those overages, not that they amount to much? Sell a limited number of premium accounts that aren’t limited during peak hours. Since the ISPs control the number and width of the pipes, they can calculate how many premium and how many standard they can offer. This seems much more logical than imposing a total data limit that’s a pain for some and immaterial to others, though both contribute equally to the problem ostensibly being addressed.

The whole report is available for purchase here for the sum of €750, though the executive summary provided by the author is illuminating as well.
http://techcrunch.com/2011/11/30/ano...wrong-problem/





Data Caps a "Crude and Unfair Tool" for Easing Online Congestion
Nate Anderson

Internet providers argue that they need to impose monthly data caps on their users in order to slay the "bandwidth hogs" running wild and free through their networks, goring ordinary users with their tusks when all those users want to do is view some funny cat pictures online after a tough day at the office. The idea is that a monthly quota can reduce the amount of network congestion during peak hours throughout the month. Fact or fiction?

One piece of new research argues that it's fiction. "Our analysis confirms that data consumption is at best a poor proxy for bandwidth usage," writes Benoît Felten, chief research officer of Diffraction Analysis.

Two years ago, Felten and Herman Wagter (the man who spearheaded Amsterdam's fiber rollout and wrote about it for Ars) issued a challenge to Internet providers: show us the evidence.

"Any telco willing to actually understand what's happening there and to answer the question on the existence of hogs once and for all can extract that data and send it over to me, I will analyse it for free, on my spare time," Felten wrote in 2009. "All I ask is that they let me publish the results of said research (even though their names need not be mentioned if they don't wish it to be). Of course, if I find myself to be wrong and if indeed I manage to identify users that systematically degrade the experience for other users, I will say so publicly. If, as I suspect, there are no such users, I will also say so publicly. The data will back either of these assertions."

A midsized American DSL provider finally stepped up to the plate, offering fine-grained detail over the course of a single day from one aggregation link that served 5,138 users. Felten and Wagter broke down the daily data consumption into five-minute increments and went to work.

You're doing it wrong

Their detailed analysis is available as a paid report, but Felten did make his conclusions public this week. He found that 48 percent of active Internet customers "are amongst the top 10 percent of bandwidth users at one point or another during peak hours." Controlling real-time congestion by going after just a few high-data monthly users, then, is unlikely to be effective.

"Data caps, therefore, are a very crude and unfair tool when it comes to targeting potentially disruptive users," writes Felten. "The correlation between real-time bandwidth usage and data downloaded over time is weak, and the net cast by data caps captures users that cannot possibly be responsible for congestion."

His solution: look only at those causing actual congestion during periods of peak use—generally four to five hours in the evening. (Comcast has employed such a system, though it also uses data caps.)

What Internet users do outside that time should have little effect on other network users (because the aggregation links aren't even close to saturation) or on the Internet provider (because the marginal cost of additional traffic on one's own network is essentially zero, and peering and transit arrangements with other ISPs and backbone providers generally involve paying for bandwidth rather than data). So data caps serve as a general warning to subscribers against excessive use—whatever that is—while doing very little to address actual congestion problems.
http://arstechnica.com/tech-policy/n...congestion.ars





An Easy Way to Curb Smart-Phone Thieves
C.W. Nevius

The idea that your smart phone could make you vulnerable to a thief has triggered a strong reaction.

Earlier this week I highlighted this problem and readers asked why the cell phone's serial number couldn't be used to block stolen phones, rendering them useless.

I assumed that idea was simplistic. Surely there was a good reason why it wouldn't work.

There isn't.

Randal Markey of the Australian Mobile Telecommunications Association explained that not only is it possible for carriers to block the use of stolen phones, Australian phone carriers have done it for nearly 10 years.

"What it means is stealing a phone is a complete waste of time," Markey said. "Although the thief could probably use it as a paperweight."

But American phone companies aren't doing that. When asked why, representatives from Sprint, Verizon and AT&T instead touted their apps to locate a lost phone or wipe out a SIM card. But that's not the issue. Petty thieves ditch the SIM card immediately. That doesn't shut down the phone.

Australia uses something akin to a serial number, basically a 15-digit fingerprint found on every phone. That number is transmitted every time the phone is used. A database crosschecks the number and blocks service to anyone who uses a stolen phone. The service is free to cellular customers.

When American carriers are asked why they don't do the same, there is a lot of huffing and puffing and hand waving, but none of it is very convincing. Frankly, the carriers don't gain anything from putting in this service, and actually add customers if someone signs up a stolen phone with them. As for the phone companies, every stolen phone is a potential new sale.

Companies would never want to admit that stolen phones are good for their bottom line. And they don't have a good excuse for why they can't implement something that has been successful in Australia.

All three of Australia's phone companies began blocking service to stolen phones in 2003. The results have been dramatic.

The mobile association found that phone thefts have dropped 25 percent since 2004. That's impressive, but especially when you consider that that the number of cell phones has increased from roughly 15 million to over 26 million in the same time period. In other words, there are 10 million more phones but 25 percent fewer thefts.

Markey says there's another benefit.

"When the program began there were lots of reports on the radio and television about people being held up in the street, accosted for their smart phone," he said. "Anecdotally, I would say we don't see that anymore."

Obviously, American phone companies don't want to look as if they don't care about the safety of their customers. But their excuses seem flimsy.

Amy Storey, speaking for CTIA, which represents the wireless communication industry, says it is "easy for criminals to overwrite the serial number," that "shared databases are notoriously hard to maintain accurately" and that the systems "added time and hassle to the customer's activation process."

Markey politely disagreed.

You can change the serial number, Markey said, "but it is very difficult to do. It is not something that your average thief would find easy."

The database, Markey said, hasn't been a problem. Stolen phones are entered daily and become unusable. As for adding to the hassle of activation, the customer only needs to write down his serial number.

At the very least American companies should look into this. A little pressure from customer groups and politicians wouldn't hurt. Australia has found it to be an elegant solution to a problem we are just beginning to understand.

"I wouldn't dream of telling American carriers what to do," said Markey. "I would just say that we have gone down a path and we are very happy with it."

Ask someone who has been punched and had his smart phone taken how happy he is.
http://www.sfgate.com/cgi-bin/articl...BAHO1M7J9U.DTL





British Library Newspaper Archive Puts 300 Years of History Online

Sixty-five million historic newspaper articles, covering the most significant events over the last 300 years, are now fully available online from today in a new archive created by the British Library.
Emma Barnett

People will now be able to search the ‘British Newspaper Archive’, which is made up of four million pages - containing articles from local and regional papers going back to 1700, for details about members of their family who may have been eminent in their local communities hundreds of years ago.

The launch of the archive is the first time people will be able to digitally access and search through millions of newspaper articles from the comfort of their homes. Up until now, people have had to travel to the British Library newspaper depository in Colindale, North London, to access the entire collection of 200 local and regional newspapers.

Highlights of the vast collection include gems such as vivid accounts of General Garibaldi’s UK visit to a “magnificent reception at Crystal Palace”, published in the Dundee Courier on April 18 1864, and the creation of the phonograph by Thomas Edison, in the North Wales Chronicle on December 1, 1877.

Ed King, head of the British Library’s newspaper collections, said: “People will find this archive extraordinary on both a personal and historical level. For the first time people can search for their ancestors through the pages of our newspapers wherever they are in the world at any time.

“But what’s really striking is how these pages take us straight back to scenes of murders, social deprivation and church meetings from hundreds of year ago, which we no longer think about as we haven’t been able to easily access articles about them.”

The archive also features hundreds of letters from soldiers in varying war zones, which were published in local papers as a way of bringing attention to their needs and informing people about life at war. One such letter, published in The Reading Mercury on January 27, 1855, was from a soldier fighting in the Crimean War begging for food to be sent to him as the British army’s supplies had dwindled to record lows.

However, anyone wishing to fully access the newspaper archive will have to pay to do so. People can search the site for free but will need to pay either £6.95 for 48 hour access; £29.95 for 30 days or £79.95 for an annual subscription. Once logged in, users can download a pdf of a particular page to keep forever. The archive can be accessed for free in the British Library’s Reading rooms.

The digitisation project, which started last year, will take 10 years to complete, with a total of 650 million articles on 40 million web pages expected to be in the finished archive by 2020. British company Brightsolid, which also owns Friends Reunited and Genes Reunited, is responsible for digitising the archive - a painstaking process as much of it needs to be done by hand as so many of the pages of the newspapers are too fragile to be processed by machines.

Ed Vaizey, the Minister for Culture, Communications and Creative Industries, praised the project, saying: “The British Newspaper Archive is a rich and hugely exciting resource, packed with historical detail. It’s a great example of the public and private sectors collaborating to deliver something that neither party could have delivered by themselves. I searched for my own constituency of Wantage and within seconds had 42,000 results – an indication of the breadth and variety of material featured. I’m delighted that the British Library and Brightsolid are working together to transform access to the nation’s published memory.”
http://www.telegraph.co.uk/technolog...ry-online.html





The Importance of the Open Internet: BBC Trust Vice Chairman on Net Neutrality
Diane Coyle

Four out of five people think that internet access is a fundamental right, according to a recent World Service poll in 26 different countries.

Why do people say that? Because they have seen that the internet enables truly open channels of information that are beyond political or commercial interference. No one 'owns' the internet.

Yet it is not something we should take for granted. The history of all other media has been of a fight for consolidation and control over the flow of information to the public. The internet could go the same way.

To avoid this, we need to resolve a debate about what policy wonks call 'net neutrality'. The term disguises a fundamental question: should your internet service provider be able to vary the quality of service you get from different websites, depending on the level of payment they receive from those sites?

Last week, Ofcom published a document setting out their approach to this issue.

It didn't cause a storm in the press, and there isn't a public fuss about this at all just yet.

But don't let that convince you it doesn't matter - imagine trying to start a public debate about banking regulation or the ethics of tabloid journalism five years ago.

If the wrong approach is taken to net neutrality, the result would be bad for consumers and bad for economic growth.

That would make no sense. The government has rightly identified the need to improve the speed and capacity of Britain's broadband network partly in order to help promote growth.

The difficulty comes from working out who should pay for that, and how.

Internet service providers (ISPs) feel they are being unfairly blamed by consumers for a sub-standard internet experience due to network congestion or poor coverage. They need to pay to upgrade to the speeds that consumers expect, so they are considering asking the content companies, whose services – like the BBC's iPlayer – drive web traffic, to pay for a faster service for their content.

Advocates of the open internet call this a limit to free expression, arguing the open approach has worked well so far for the economy and society as a whole, promoting new and exciting services by keeping barriers to entry and expansion low.

Ofcom has not until now taken an active role in the debate, waiting instead to see whether the changes proposed by ISPs will affect consumers before they intervene, and relying on consumers' willingness to switch broadband providers if they are unhappy.

One problem is that we know people don't often switch – not least because broadband is so often bundled in with phone and other services. They may not have or understand the information they need to switch, so relying on this as a protection for the open internet is flawed.

Ofcom see this risk very clearly, and say they want ISPs to provide greater transparency to consumers about the policies they will employ to manage internet traffic. We particularly welcome Ofcom's suggestion that if ISPs offer a service to consumers which they describe as 'internet access', this service should be unrestricted, allowing the consumer to access any lawful service.

But Ofcom also quotes evidence that consumers often make bad decisions if they have to draw their own conclusions on the basis of complex technical information, and conclude that they 'would like to see ISPs approach this challenge creatively'.

So a lot hangs on whether ISPs are up to that challenge, and whether and in what form Ofcom are prepared to intervene. For the minute, Ofcom have not explained how they will judge whether or not innovation is being thwarted (the test, they say, of whether there is a problem). Nor have they explained how they would define a minimum 'best efforts' internet service if they needed to regulate to secure this as a minimum standard for all.

There is no doubt that there is a cost to upgrading to the new fibre or 4G networks which will deliver faster internet access, but the burden need not fall entirely on ISPs. Consumers and content providers already have some incentives to contribute to the costs of building the network. Consumers may be willing to pay for some of those costs if there is a reason to do so – for example if they want bandwidth-hungry online content such as internet TV. Content providers will keep investing in technology which gives consumers a slicker experience and reduces the bandwidth that they need to use.

It might also suit some content providers to pay telecoms operators to deliver their content faster than everyone else's. But it might not suit smaller start-ups, who can't afford to pay.

If a 'two-tier' system emerges, that would have a dramatic impact for users, with some content arriving quickly and some slowly. Moreover, one unintended effect might be that ISPs are less incentivised to build out new super-fast networks, where bandwidth is far less of an issue if they have locked all the bigger content providers into paying for preferential service within an inferior network. Either way, consumers would lose out.

Ofcom say they 'do not have a general objection to models of competition where vertically integrated operators do not provide open access to their networks, provided that there is genuine competition and rivalry among the firms.' Further, they say, 'in such circumstances, we do not necessarily regard the blocking of services provided by competing providers, or discrimination against competing services, as being anti-competitive'. They do consider that blocking and discrimination is 'highly undesirable', but they expect the market to address this on its own. They accept that the internet deserves special attention from regulators, given the risk of reducing innovation, but it does not look like they necessarily feel a two-tier internet would have that damaging an effect.

Both as an economist and as a BBC Trustee, I believe that keeping the internet open is crucial. It is the only way in which all businesses will be free to innovate and deliver the choice consumers expect – not just what's currently popular or profitable.

As things stand, both the industry and Ofcom support the idea of a code of conduct for ISPs. Ofcom's version would be limited to a set of rules about consumer transparency. The BBC believes the code should go further.

As a minimum, we believe this should have clear principles stating that they will not block legal content or unfairly prioritise different types of content for their own commercial reasons. Beyond that, we would like to see a 'principle of equivalence', which requires ISPs to offer any sort of preferential treatment to all content providers at the same rate – to prevent them signing up only the big players at discounted rates. And ideally, we would like to see them supplying the sort of real-time information to consumers about broadband speed and performance that would allow the public to get hold of truly reliable independent advice about switching.

Without this sort of added edge, the risk is that self-regulatory rules like this are open to wide variety of different interpretations and are difficult to enforce.

I hope Ofcom will be closely involved in the work needed to help make sure any industry code of conduct is robust. And I hope they will keep a close eye on the development of the market and do more to explain in advance what their contingency plan will look like if things start to go wrong. Otherwise the regulation of this market might turn out to be too little, too late.

The recent failures of banking regulation show us exactly what can happen when an issue is ignored; what's at stake is a fundamental right for both businesses and consumers.
http://www.bbc.co.uk/bbctrust/news/c...internet.shtml





Hacking Scandal Widens to Government Secrets, Report Says
Alan Cowell

Britain’s hacking scandal was reported on Tuesday to have broadened significantly into areas of national security, with the police investigating whether private detectives working for the Murdoch media empire hacked into the computer of a cabinet minister responsible for Northern Ireland.

Scotland Yard declined to comment on the report in The Guardian newspaper, saying it would not be “providing a running commentary on this investigation.”

The report said the police had warned Peter Hain, the Northern Ireland secretary from 2005 to 2007, that his computer and those of senior civil servants and intelligence agents responsible for the British province may have been hacked by private detectives working for News International.

News International — whose chairman is James Murdoch, the 38-year-old son of the octogenarian mogul Rupert Murdoch — is a British subsidiary of News Corp., the Murdoch-owned global media empire.

The British outpost has been at the center of a controversy convulsing public life here over the use of private detectives to hack into the voice mail of celebrities and less well-known people thrust into the spotlight of the news by personal tragedy.

But the latest reports suggest that the scandal may be widening if it is established that classified material was also hacked from computers. British news reports on Tuesday said that Mr. Hain’s computer may have contained information about informers within Northern Ireland’s factions. Mr. Hain oversaw delicate negotiations that led to the restoration of local government for the province and the creation of a joint administration grouping its historic adversaries.

The report added weight to previous hints that the intelligence community may have been targeted. A former British Army intelligence officer, Ian Hurst, had previously accused The News of the World, the weekly tabloid that the Murdochs closed as the scandal broke, of hacking into his e-mail account in search of information on confidential informants within the Irish Republican Army.

Mr. Hurst had worked in Northern Ireland, running undercover operations. The BBC reported this year that his computer had been hacked and sensitive e-mails had been provided to The News of the World.

Last month, The New York Times reported that at least one of the scores of lawsuits that allege phone hacking mentions classified information from Britain’s domestic intelligence agency, MI5.

A spokesman for Mr. Hain withheld comment, saying: “These are matters of national security and are subject to a police investigation so it would be inappropriate to comment.” Neither the spokesman nor the police explicitly denied the report.

News International said it was “cooperating fully with the police” on all investigations, The Press Association news agency said.

The hacking scandal has spurred Prime Minister David Cameron to set up a full-blown inquiry into the practices and ethics of the British news media and its relationship with the police and politicians.

In recent days, the inquiry has heard testimony from a procession of celebrities ranging from the actor Hugh Grant to J.K. Rowling, the author of the Harry Potter books, chronicling episodes of intrusion into their private lives by reporters. While the scandal revolved initially around phone hacking, it has since broadened into the realm of interference with computers by people using so-called Trojan Horse viruses for remote access to their target’s computers.

The police inquiry into alleged computer hacking is one of three police investigations affecting the Murdoch media holdings in Britain. Two of them relate to claims of phone hacking and bribery of police officers. In July, Scotland Yard added computer hacking to the list after receiving what the police called “a number of allegations regarding breach of privacy” since January when previous inquiries were reopened.

Ravi Somaiya contributed reporting.





British Inquiry Is Told Hacking Is Worthy Tool
Sarah Lyall

He admitted that he and his colleagues hacked into people’s phones and paid police officers for tips. He confessed to lurking in unmarked vans outside people’s houses, stealing confidential documents, rifling through celebrity garbage cans and pretending that he was not a journalist pursuing a story but “Brad the teenage rent boy,” propositioning a priest.

After Paul McMullan, a former deputy features editor at Rupert Murdoch’s now-defunct News of the World tabloid, had finished his jaw-droppingly brazen remarks at a judicial inquiry on Tuesday, it was hard to think of any dubious news-gathering technique he had not confessed to, short of pistol-whipping sources for information.

Nor were the practices he described limited to a select few, Mr. McMullan said in an afternoon of testimony at the Leveson Inquiry, which is investigating media ethics in Britain the wake of the summer’s phone hacking scandal. (Indeed, on Wednesday, the British police said they had arrested a 17th suspect in investigations into the scandal — a 31-year-old woman from northern England, who was not identified by name.)

In fact, Mr. McMullan said, The News of the World’s underlings were encouraged by their circulation-obsessed bosses to use any means necessary to get material.

“We did all these things for our editors, for Rebekah Brooks and for Andy Coulson,” Mr. McMullan said, referring to two former News of the World editors who, he said, “should have had the strength of conviction to say, ‘Yes, sometimes you have to stray into black or gray illegal areas.’ ”

He added: “They should have been the heroes of journalism, but they aren’t. They are the scum of journalism for trying to drop me and my colleagues in it.”

Mr. Coulson, who resigned from his job as chief spokesman for Prime Minister David Cameron in January, and Mrs. Brooks, who resigned in July from her job as chief executive of News International, the British newspaper arm of the Murdoch empire, have both been arrested on suspicion of phone hacking, or illegally intercepting voice mail messages. Mrs. Brooks, whom Mr. McMullan called “the archcriminal,” is also suspected of making illegal payments to the police.

Both have repeatedly denied the allegations, and neither has yet been charged.

Nothing that Mr. McMullan said was particularly surprising; anyone following the phone hacking scandal that engulfed News International and its parent, the News Corporation, over the summer is now more than familiar with outrageous tales of tabloid malfeasance. What was startling was that Mr. McMullan, who left his job in 2001, eagerly confessed to so much and on such a scale — no one else has done it quite this way — and that he maintained that none of it was wrong.

Most people from the tabloid world have reacted to the revelations in the manner of Renault when discussing gambling in “Casablanca,” saying they are “shocked, shocked.” But Mr. McMullan veered so far in the other direction that at times he sounded like a satirist’s rendition of an amoral tabloid hack.

Underhanded reporting techniques are not shocking at all, he said, particularly in light of how often he and his colleagues risked their lives in search of the truth.

As examples of the dangers of his job, he described having cocaine-laced marijuana forced on him by knife-wielding drug dealers in a sting operation; being attacked by a crowd of murderous asylum seekers; and, in his “Brad the teenage rent boy” guise, sprinting through a convent dressed only in underpants to escape the pedophile priest he had successfully entrapped.

“Phone hacking is a perfectly acceptable tool, given the sacrifices we make, if all we’re trying to do is get to the truth,” Mr. McMullan said, asking whether “we really want to live in a world where the only people who can do the hacking are MI5 and MI6.”

No, he said, we do not.

“For a brief period of about 20 years, we have actually lived in a free society where we can hack back,” he said.

Journalists in Britain have traditionally justified shady practices by arguing that they are in “the public interest.” Asked by an inquiry lawyer how he would define that, Mr. McMullan said that the public interest is what the public is interested in.

“I think the public is clever enough to decide the ethics of what it wants in its own newspapers,” he said. Referring to articles about Charlotte Church, a singer who told the inquiry this week of her distress at her family’s treatment by the tabloids, he said, “If they don’t like what you have written about Charlotte Church’s father having a three-in-a-bed with cocaine, then they won’t read it.”

For all that, Mr. McMullan said that The News of the World had come to rely too much on outsiders to do work that could have easily been done by reporters, like conducting surveillance on potentially adulterous athletes. Also, he said, some of the investigators were incompetent.

The year he became deputy features editor, he said, the department had a budget of £ 3.1 million — more than $4.5 million — to pay sources, buy stories and hire outsiders to find addresses, medical records and other information. “That was the joy of working for Murdoch,” he said. “They had that big pot of money.”

Mr. McMullan, who now owns a pub and does occasional freelance work, spoke nostalgically of his tabloid career, seven years of it spent at The News of the World. He loved spiriting exclusive sources away “and hiding them from other journalists,” he said, as when he “spent two weeks locked in a hotel room with Princess Diana’s gym instructor in Amsterdam.”

He also liked jumping in one of The News of the World’s stable of 12 cars and speeding away in pursuit of famous targets.

“I absolutely loved giving chase to celebrities,” he said. “How many jobs can you have car chases in? Before Diana died, it was such good fun.” (Some celebrities liked it, too, he said. Brad Pitt “had a very positive attitude” about being pursued by crazed journalists in cars.)

Mr. McMullan had brought along some illustrative materials, including a photograph of his surveillance van. He also briefly displayed a topless photograph of Carla Bruni-Sarkozy in The News of the World, apparently as a way to show how easy it is to obtain racy photographs.

“That’s the president of France’s wife,” he said.

“It’s a little early in the day for that, Mr. McMullan,” the inquiry lawyer said.

Many witnesses at the Leveson Inquiry, especially victims of the tabloids, have called for a law to protect citizens from news media intrusion. Mr. McMullan said he thought that privacy was “evil,” in that it helps criminals cover up their misdeeds.

Using a Britishism for “pedophile,” he said, “Privacy is for pedos.”

Alan Cowell contributed reporting.
https://www.nytimes.com/2011/12/01/w...rthy-tool.html





Who Watches the Watchers?

How much security technology is ending up in the hands of those we'd rather it not?
Oliver Rochford

Once again, specialized security technology from a western vendor was found being used by foreign regime on the U.S. trade embargo list. This most recent incident involves Blue Coat Systems and Syria.

It’s no secret that many states and nations are censoring and monitoring the Internet. Many of these governments are considered authoritarian regimes, often times with trade restrictions and other sanctions against them.

Government Monitoring Internet Usage

The intent, morality and effectiveness aside, it should be obvious to anyone with more than a passing familiarity with the topic, that most of these censorship programs will be based on proprietary, enterprise hardware and solutions. It is not that impossible to build your own nationwide filtering solution. But it is impractical and requires a lot of know-how and skill. Knowledge and skill that is primarily to be found in the west, and requiring resources that few but the likes of China and Saudi Arabia possess.

The big fat elephant in the room has always been, “How, and what with?” That is the question we should be asking ourselves. Whether knowingly, or by subterfuge as Blue Coat have claimed, there must be many more instances of this out there than we currently know about. How many services and devices are actually being used by people we would rather not have these abilities at their fingertips? How long until they are used against us, even if indirectly?

At which point do we have to stop looking at Information Security as a market, and begin viewing it as a matter of defense and (inter)national security?

We have long passed that point. The specific devices in this incident were used to suppress and monitor dissident activity in Syria, possibly leading to their arrest and physical harm. Similarly, and also in recent news, the compromise of the Certificate Authority Diginotar endangered Iranian dissidents and Opposition members.

In the wrong hands, security solutions can turn into weapons or tools of slavery and oppression. The people usually involved in deciding in whose hands these tools end up, are sadly often torn between conflicting interests, like sales targets. But there should be a level of responsibility involved that does not begin and end with a sales order. These are after all meant to be “Security” companies, and security competence and mindedness should not be solely contained only in the service you are offering.

Taking the Blue Coat incident as an example, and basing this on my several years experience with software vendors, these devices require support, maintenance and database updates. Surely there should have been a point somewhere along the line where Blue Coat could have got suspicious? Why are the locations of IP's used to update these devices not verified? Blue Coat Systems told the Wall Street Journal that the appliances were transmitting automatic status messages back to the company as the devices censored the Syrian Web, but said it “doesn't monitor where such 'heartbeat' messages originate from.” There was plenty that could have been done to prevent this happening in the first place, or to find out in the meantime. But that is a cost that cuts into the bottom line and brings no profit.

This has stopped being a game, or just a “business”. It has become deadly serious. In the past decade, the threat landscape has evolved and mutated into a full-blown battlefield. Ten years ago, the biggest danger to an organization's information security were teenagers and disgruntled employees. Now we are facing hardened criminal gangs, fanatical terrorists and highly proficient and skilled special ops agents.

We sell, provide and manage services that in any other context would be left to soldiers, policemen, or intelligence agencies. But we do not yet treat it that way. We are treating it like any other business, focusing more on sales targets than on defence targets, without really assessing the impact and consequences this has.

We sell security; Instead we should be providing Security.

We get it enough to pitch it. We get it enough to use it in our marketing. We get it enough to write articles on it.

Why don't we get it enough to act on it? Do we also need to be regulated?

Quis custodiet ipsos custodes? Who watches the watchers indeed.
https://www.securityweek.com/who-watches-watchers





Lawmakers Want Spy Agencies to Share Cyber Data
Tabassum Zakaria and Diane Bartz

Lawmakers on Wednesday proposed fighting the cyber threat that is taking a toll on American companies by allowing spy agencies to share threat intelligence with private firms.

Representative Mike Rogers, the Republican chairman of the House of Representatives intelligence committee, and the panel's senior Democrat, Representative C.A. "Dutch" Ruppersberger, announced legislation to protect U.S. firms from cyber attacks by foreign countries and individual hackers by allowing information-sharing with agencies like the National Security Agency.

"Our intelligence agencies collect important information overseas about advanced foreign cyber threats that could dramatically assist the private sector," Rogers said.

"The government needs to be able to share this threat intelligence so that the private sector can protect its own networks," he said at the public unveiling of the bill.

Rogers has been outspoken in accusing China of widespread cyber espionage. An intelligence report released earlier this month accused China and Russia of using cyber espionage to steal U.S. trade and technology secrets.

"North Korea just attacked a major banking system in South Korea. That can happen today in the United States of America," Ruppersberger said.

"We will have a catastrophic attack within the next year, whether it's attacking a banking system, a grid system, this is going to happen and we have to make sure that we protect ourselves," he said.

The legislation aims to expand to the broader private sector the theme of a pilot Pentagon program for sharing classified and sensitive threat information with defense contractors and their internet service providers.

Defense contractors like Lockheed Martin Corp have been among the high-profile victims of cyberattacks. Others include Google and Citigroup.

Sponsors of the bill envision, for example, that NSA would share with internet service providers information about the different types of cyber threats that the intelligence agency has detected so that the ISP can then block traffic to its customers from anything with that signature.

Two-Way Street

Internet service providers and other companies have long complained that they give information to the U.S. government about potential cyber threats but often do not find it a two-way street. They say the government is reluctant to reciprocate because the information is either classified or part of an investigation linked to a potential prosecution.

Some critics worry this type of sharing arrangement amounts to government surveillance of private data.

The bill would require a review to ensure the protection of privacy and civil liberties, the lawmakers said. It also offers protections from frivolous lawsuits to companies who shared cyber threat information with the government, they said.

At this early stage it was unclear how the legislation will fare in getting through the Republican-controlled House and the Democratic-controlled Senate before landing on President Barack Obama's desk to be signed into law.

The White House said it was reviewing the bill but raised some initial concerns that it fell short of privacy protections in the administration's own proposal released in May.

"The administration strongly believes that we need to make sure that any legislation put forward sufficiently protects U.S. citizens' personal information and privacy," Caitlin Hayden, National Security Council spokeswoman, said.

"Also, we believe that the inclusion of generous liability and antitrust protections could limit the government's ability to protect citizens and hold corporations accountable," she said.

Stewart Baker, a former Homeland Security official who is now a partner with the Steptoe & Johnson law firm, said, "What's new is that the self-protected entity can share that information with the federal government. That's new because there are provisions of law that prevent ISPs from sharing subscriber information with the federal government."

But he was concerned that measures in the bill that would relieve companies of liability once they shared data with the government might be too broad.

(Writing by Tabassum Zakaria; Editing by Bill Trott and Cynthia Osterman)
http://www.reuters.com/article/2011/...7B001H20111201





Cybersecurity Bill Approved by House Panel

A bill to let U.S. spy agencies share intelligence on cyber threats with private companies was backed by a House of Representatives intelligence panel on Thursday.

In a 17-1 vote, the Permanent Select Committee on Intelligence approved the legislation that would expand a pilot Pentagon program for sharing classified and sensitive threat information with defense contractors and their Internet service providers.

Under the measure, a longer list of companies would be eligible for access to classified data from the National Security Agency and other agencies.

The bill was amended to expand privacy protections for data that companies give the government, including, potentially, data that Internet providers give about their customers. That data could be used only for cyber or national security, according to the amendment.

Some critics have worried that this type of sharing arrangement amounts to government surveillance of private data.

The government would also be barred from searching collected data except to secure cyber networks from attack.

"Through hard work and compromise we have struck a delicate balance that provides strong protections for privacy and civil liberties, while still enabling effective cyber threat sharing and providing clear authority for the private sector to defend its own networks," Representative Mike Rogers, chairman of the committee, said in a statement.

There has been widespread and growing concern about incursions into U.S. networks by hackers determined to steal everything from state secrets to credit card numbers.

Defense contractors like Lockheed Martin Corp have been among the high-profile victims of cyber attacks. Others include Google and Citigroup.

Sponsors of the bill envision, for example, that NSA would share with Internet service providers information identifying specific threats so that the ISP can then block traffic to customers from that source.

Internet service providers and other companies have long complained that they give information to the U.S. government about potential cyber threats but often do not find it a two-way street. They say the government has been reluctant to reciprocate because the information is either classified or part of an investigation linked to a potential prosecution.

It was not immediately clear how the legislation would fare in either the Republican-controlled House or the Democratic-controlled Senate.

(Reporting by Diane Bartz; Editing by Tim Dobbyn)
http://www.reuters.com/article/2011/...7B100E20111202





European Union Bans Exports to Syria of Systems for Monitoring Web, Phones
Vernon Silver

The European Union barred exports of surveillance technology to Syria following reports the regime was procuring and using such gear.

“Exports of equipment and software intended for use in the monitoring of internet and telephone communications by the Syrian regime,” are banned, the 27-nation bloc said today in a statement that included other restrictive measures.

Bloomberg News reported Nov. 4 that an Italian company, Area SpA, was building a surveillance system that would have given Syrian President Bashar al-Assad’s regime the power to intercept, scan and catalog virtually every e-mail that flows through the country.

This week, a lawyer for the company, Fabio Ambrosetti, confirmed the company is exiting the deal and the project won’t be completed. He declined to comment further.

Earlier this year, Telecomix, a group of online activists, discovered that technology from a U.S. company, Blue Coat Systems Inc., was filtering web sites inside of Syria.

The United Nations said today it estimates the death toll from Assad’s crackdown on dissenters this year exceeds 4,000.
http://www.bloomberg.com/news/2011-1...eb-phones.html





Researcher’s Video Shows Secret Software on Millions of Phones Logging Everything
David Kravets

The Android developer who raised the ire of a mobile-phone monitoring company last week is on the attack again, producing a video of how the Carrier IQ software secretly installed on millions of mobile phones reports most everything a user does on a phone.

Though the software is installed on most modern Android, BlackBerry and Nokia phones, Carrier IQ was virtually unknown until 25-year-old Trevor Eckhart of Connecticut analyzed its workings, revealing that the software secretly chronicles a user’s phone experience — ostensibly so carriers and phone manufacturers can do quality control.

But now he’s released a video actually showing the logging of text messages, encrypted web searches and, well, you name it.

Eckhart labeled the software a “rootkit,” and the Mountain View, California-based software maker threatened him with legal action and huge money damages. The Electronic Frontier Foundation came to his side last week, and the company backed off on its threats. The company told Wired.com last week that Carrier IQ’s wares are for “gathering information off the handset to understand the mobile-user experience, where phone calls are dropped, where signal quality is poor, why applications crash and battery life.”

The company denies its software logs keystrokes. Eckhart’s 17-minute video clearly undercuts that claim.

In a Thanksgiving post, we mentioned this software as one of nine reasons to wear a tinfoil hat.

The video shows the software logging Eckhart’s online search of “hello world.” That’s despite Eckhart using the HTTPS version of Google which is supposed to hide searches from those who would want to spy by intercepting the traffic between a user and Google.

Cringe as the video shows the software logging each number as Eckhart fingers the dialer.

“Every button you press in the dialer before you call,” he says on the video, “it already gets sent off to the IQ application.”

From there, the data — including the content of text messages — is sent to Carrier IQ’s servers, in secret.

By the way, it cannot be turned off without rooting the phone and replacing the operating system. And even if you stop paying for wireless service from your carrier and decide to just use Wi-Fi, your device still reports to Carrier IQ.

It’s not even clear what privacy policy covers this. Is it Carrier IQ’s, your carrier’s or your phone manufacturer’s? And, perhaps, most important, is sending your communications to Carrier IQ a violation of the federal government’s ban on wiretapping?

And even more obvious, Eckhart wonders why aren’t mobile-phone customers informed of this rootkit and given a way to opt out?
http://www.wired.com/threatlevel/201...-logging-video





Carrier IQ References Discovered in Apple's iOS
Dieter Bohn

To date, the user tracking controversy surrounding Carrier IQ has focused primarily on Android, but today details are surfacing that the company also may have hooks into Apple's iOS. Well-known iPhone hacker Chpwn tweeted today that versions at least as recent as iPhone OS 3.1.3 contained references to Carrier IQ and later confirmed it's in all versions of iOS, including iOS 5.

We were able to independently verify that at the very least, references to Carrier IQ's servers do exist within iPhoneOS 3.1.3 in a file located at /usr/bin/IQAgent. What exactly that binary is able to access or how it may communicate with either carriers or Carrier IQ is not yet known, though there are references to an IQAgent log on the device as well as references to collector.sky.carrieriq.com.

For versions 4.0 and 5.0, Intell on MacRumors' forums has found similar references to the http://collector.sky.carrieriq.com location within /usr/bin/awd_ice2, although we have not independently verified that yet. Again, no clear word on just what is or is not being tracked or collected.

The story is developing, with chpwn promising a post providing as many details as he's been able to uncover thus far, including the possibility that the code wasn't enabled by default in iOS. We should emphasize that all we can say for sure at the moment is that iOS definitely contained references to Carrier IQ — but given how the story has progressed thus far, we expect there will be more to report on soon.

Update: chpwn notes that initial research indicated that Carrier IQ's software may only be active when the iPhone is in diagnostic mode. In a blog post, chpwn confirms that, based on his initial testing, Apple has added some form of Carrier IQ software to all versions of iOS, including iOS 5. However, the good news is that it does not appear to actually send any information so long as a setting called DiagnosticsAllowed is set to off, which is the default. Finally, the local logs on iOS seem to store much less information than what has been seen on Android, limited to some call activity and location (if enabled), but not any text from the web browser, SMS, or anywhere else. We'll let you know when more details arise.

Thanks, nandreetta
http://www.theverge.com/2011/11/30/2...ple-ios-iphone





Cornell Prof: Carrier IQ Affair 'My Worst Nightmare'

Engineering professor calls smartphone software 'appalling invasion of privacy'
Bob Brown

A Cornell University professor is calling the controversial Carrier IQ smartphone software revelations a privacy disaster.

"This is my worst nightmare," says Stephen Wicker, a professor of electrical and computer engineering at Cornell. "As a professor who studies electronic security, this is everything that I have been working against for the last 10 years. It is an utterly appalling invasion of privacy with immense potential for manipulation and privacy theft that requires immediate federal intervention.

"Carrier IQ claims that the collected data is 'anonymized.' Let's give this a moment's thought -- about all that it deserves. How hard would it be to 'de-anonymize' a pile of text messages between me and my wife? My mother? My children? Banking IDs with passwords?"

A controversy over smartphone privacy has reignited this week following a coder's recent post detailing how a hidden software application on Android-based HTC phones can collect a range of information about the user's activities. The client program is from a venture-funded company called Carrier IQ out of Mountain View, Calif. It created software, dubbed by one security researcher as a classic rootkit, to collect a variety of "operational" data about the phone's usage, ostensibly to let carriers identify radio, performance and usage problems and correct them. Carrier IQ yesterday again denied that its embedded smartphone application records, stores or transmits personal user information such as SMS messages, email and the like.

Throughout the week carriers and phone makers have acknowledged their use of Carrier IQ software or distanced themselves from it. Apple said it no longer uses the software in its devices, as of its delivery of iOS 5. AT&T, Sprint, HTC and Samsung have confirmed their use of the software, while Verizon, Nokia and RIM have said they do not use it.

Wicker, who is the author of the book "Cellular Convergence and the Death of Privacy," to be published by Oxford University Press at the end of 2012, warns, "Since Carrier IQ tracks keystrokes, it has the potential to capture passwords and banking data that are normally encrypted prior to transmission through the cellular network. From a privacy perspective, what's appalling is Carrier IQ runs in the background -- most users will not know it's there -- and if those users do manage to detect the program, they cannot opt out.

"When combined with the concept of cellular convergence -- ever increasing numbers of information processing tasks performed on the cellular platform -- Carrier IQ stands out as an immense threat to individual privacy."

Wicker has been outspoken before about carrier and smartphone privacy issues. In April, he chimed in regarding controversy over revelations that iPhones, iPads and other Apple iOS devices track your whereabouts: "It is vitally important to recognize that cellular telephony is a surveillance technology, and that unless we openly discuss this surveillance capability and craft appropriate legal and technological limits to that capability, we may lose some or all of the social benefits of this technology, as well as a significant piece of ourselves. Most people don't understand that we're selling our privacy to have these devices."
https://www.networkworld.com/news/20...iq-253696.html





Lawmaker Calls for FTC Probe into Carrier IQ
Jasmin Melvin

U.S. Representative Edward Markey on Friday asked the Federal Trade Commission to investigate whether software maker Carrier IQ violated millions of mobile phone users' privacy rights.

Carrier IQ makes software that companies including AT&T Inc and Sprint Nextel install in mobile devices. It runs in the background, transmitting data that the software maker says its customer companies use to better understand their devices and networks, which allows them to improve their services.

Carrier IQ came under fire following reports that its software collects and transmits potentially sensitive data about the phone users.

"Consumers and families need to understand who is siphoning off and storing their personal information every time they use their smart phone," Markey said in a statement.

Hacking expert Trevor Eckhart this week released a 17-minute YouTube video showing software tracking when he turns his HTC smartphone - powered by Google Inc's Android operating system - on and off, punches numbers to make a call and writes a text message.

In a letter to FTC Chairman Jon Leibowitz, Markey asked the agency to investigate this under its mandate to protect consumers from unfair or deceptive acts or practices.

Senator Al Franken on Thursday sent a letter to Carrier IQ, asking for details on the types of data its software collects and what it does with that information.

The company said in a statement on Thursday that its software collects data needed to diagnose network and device problems, but does not record, store or transmit the contents of text messages, email, photographs, audio or video.

"Our software makes your phone better by delivering intelligence on the performance of mobile devices and networks to help (mobile) operators provide optimal service efficiency," the company statement said.

Carrier IQ has denied accusations of wiretap law violations and allegations that its software tracks keystrokes made on mobile devices.

The company could not immediately be reached for comment on Friday.

Research In Motion said it does not install or authorize its carrier partners to install Carrier IQ's software on its BlackBerry smartphones. Nokia also said its phones do not use the software.

Apple Inc said that some devices, including iPhones, that run on its iOS 4 operating system use the Carrier IQ software, but that it does not work with the newer iOS 5.

An FTC spokeswoman said the agency had received Markey's letter but had no further comment.

(Reporting by Jasmin Melvin; Editing by Gary Hill)
http://www.reuters.com/article/2011/...7B124F20111202





Trevor Eckhart Speaks: The Connecticut 'Geek' Who Ignited The Carrier IQ Smartphone Privacy Scandal
Matthew Sturdevant

Tinkering with an Android phone, Trevor Eckhart became a veritable Toto, pulling away the curtain on hidden software that apparently tracks every keystroke users make on their smartphones.

The Eagle Scout from Torrington posted his exposé in two YouTube videos, igniting a national firestorm over whether the software, made by Mountain View, Calif.-based Carrier IQ, records smartphone users' every move, and whether all that data is sent back to service providers such as Verizon and Sprint. He had heard vaguely about the software, investigated it and discovered what it was doing.

Eckhart, 25, who works with an online group that builds customized apps for tablets and smartphones, said he and others have known about the software for months.

"It's just been a dirty little secret, but nobody's said anything about it," Eckhart said in an interview with The Courant. "So, I put enough information that I thought anybody would be able to understand, and I made the information public because I feel this is wrong."
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The posting went viral and led to blanket coverage on tech websites, and reports by the Washington Post, BBC, Fox News and National Public Radio. U.S. Sen. Al Franken, D-Minn., on Thursday called for stricter electronic privacy laws. On Friday, U.S. Sen. Richard Blumenthal, D-Conn., expressed "serious concern" about the practice and demanded answers in a letter to Carrier IQ's CEO.

The flap over Carrier IQ is the latest incident in an evolving national debate about privacy and personal technology, as advocates and elected officials launch accusations at software firms and Internet and telecom service companies.

For Eckhart, the maelstrom has meant about 1,000 emails and has brought job offers from Silicon Valley companies. The second of two YouTube videos, which Eckhart posted Monday, had more than 1.2 million hits as of Friday night.

He calls himself a self-taught "geek since forever," who was building computers using various parts since before he was 10. Eckhart's web site says he's a systems integrator for Intergis LLC, and was a certified Staples in-house technician when he was a teenager.

Eckhart said he attended Tunxis Community College, but stopped taking classes because he was bored and believed he knew more than the professors.

Now, he's suddenly a central figure — this month, at least — in the hot territory between technology and public policy. "I think this really shows the public is concerned about this thing, too — that I wasn't the only one not aware this was running on my phone," Eckhart said.

Speaking of the outcry, he added, "I think it's a good thing that's happening, and I hope that maybe some new laws can be passed, something to that effect. … The mobile phone industry's kind of like the Wild West right now, and there's no one to keep them in check."

Exactly what the software does remains a matter of debate and discovery.

Carrier IQ said in a statement Thursday: "We measure and summarize performance of the device to assist Operators in delivering better service. While a few individuals have identified that there is a great deal of information available to the Carrier IQ software inside the handset, our software does not record, store or transmit the contents of SMS messages, email, photographs, audio or video."

On Friday, the company's director of marketing, Andrew Coward, told CNNMoney that Carrier IQ was shocked to learn its software is tracking every keystroke, every website visited, every text message sent. "We're as surprised as anybody to see all that information flowing," he told the news outlet. "It raises a lot of issues for the industry."

Coward told CNNMoney that it appeared the logging of keystroke data was the result of software added by service carriers, but he said, "We don't know enough at this point."

The company did not respond to a phone inquiry Friday about Blumenthal's letter.

Eckhart said that he may consider job offers from Silicon Valley companies, but for now he's just dealing with an onslaught of phone calls and emails.

Carrier IQ's attorney, Joseph J. Dullea, sent a cease-and-desist letter to Eckhart on Nov. 16, after Eckhart posted the first video, saying his website referred to the company's training videos, which are available online. Dullea wrote, "Your actions constitute copyright infringement. … The consequences of copyright infringement include statutory damages of between $750 and $30,000 per work at the discretion of the court, and damages of up to $150,000 per work for willful infringement."

Eckhart sought pro-bono legal assistance from the San Francisco-based Electronic Frontier Foundation, which promises to defend "your rights in the digital world." The foundation said Carrier IQ backed off its threat on Nov. 28, with a statement from its CEO, Larry Lenhart: "Our action was misguided and we are deeply sorry for any concern or trouble that our letter may have caused Mr. Eckhart. We sincerely appreciate and respect EFF's work on his behalf, and share their commitment to protecting free speech in a rapidly changing technological world."

Blumenthal, in his letter to Lenhart, wrote: "I am writing to express my serious concerns about Carrier IQ's privacy practices as they pertain to the collection of data from smart phones. I am equally and deeply troubled by your company's response to Connecticut residents who discovered and questioned these practices."

Blumenthal asked the company to explain what devices have the software, what information the software collects, whether the information has been shared and with whom.

At least one industry expert questions whether the information is being collected via the company's server, or is simply logged in the phone itself. Dan Rosenberg, writing on PasteBin.com, said, "There's a big difference between 'Look, it does something when I press a key' and 'It's sending all my keystrokes to the carrier!' Based on what I've seen, there is no code in Carrier IQ that actually records keystrokes for data collection purposes."

Eckhart said his work involves basically tricking out smartphones. "The entire phone is what we can customize," he said. "So, you want your home screen to be in a circle instead of a square, or you want, when your dialer comes up, you want the buttons to look blue on the phone — that's the kind of stuff. Android lets you modify the phone kind of however you want. Like, I have a phone here that runs my whole house. It does my entertainment center, my movies, all of that stuff."

For Eckhart, the Carrieer IQ software raises a lot of questions about disclosure. For example, if mobile users have service contracts that say the carrier reserves the right to monitor usage, then how clear is that language to customers?

"I feel that any sort of activity that's logging anything about you, no matter what it is, should have an opt in, opt out," Eckhart said. "This application, you have no choice. You have to use it."
http://www.courant.com/business/conn...,5419703.story





British Law Enforcement Exploits Flaw in iTunes to Spy

British law enforcement agencies and Apple are coming under sharp criticism after it was discovered that authorities exploited a security flaw in iTunes to spy on individuals.

Gamma International, a British company, marketed hacking software to governments that infiltrated a targeted computer by using a fake update on Apple’s popular music player, which is installed on more than 250 million computers around the world. The software, dubbed “FinFisher,” allows authorities to remotely monitor a computer. According to the company’s website, its software can be “used to access target systems giving full access to stored information with the ability to take control of the target systems functions to the point of capturing encrypted data and communications.”

The software is known to be used by British law enforcement agencies and earlier this year records discovered in abandoned offices indicated that it had been marketed to Egypt’s secret police.

Brian Krebs, a prominent cybersecurity blogger and a former Washington Post reporter, wrote in a blog post that Apple had initially been informed of the flaw in 2008 but waited more than three years to patch it.

“A prominent security researcher warned Apple about this dangerous vulnerability in mid-2008, yet the company waited more than 1,200 days to fix the flaw,” he said. “The disclosure raises questions about whether and when Apple knew about the Trojan offering, and its timing in choosing to sew up the security hole in this ubiquitous software title.”

According to Krebs, Apple generally fixes security flaws within ninety-one days of their disclosure.

Francisco Amato, the cybersecurity researcher who first discovered the flaw and alerted, said the company may have just been lazy about patching the problem.

“Maybe they forgot about it, or it was just on the bottom of their to-do list,” Amato said.

In contrast, Mikko Hypponen, the chief research officer forF-Secure, a Finnish security firm, said, “It is an unusually long time to patch anything, so it doesn’t make much sense.”

Responding to reports that FinFisher exploited a problem in iTunes, Apple said that it works “to find and fix any issues that could compromise systems.”

“The security and privacy of our users is extremely important,” a spokeswoman for the company said.

To protect computers from harmful malware posing as legitimate updates, Krebs recommends “whenever possible, try to do your updating from a network that you trust and control. Otherwise, you may be placing far too much trust in the security of the update mechanisms built into the software you use.”
http://www.homelandsecuritynewswire....-itunes-to-spy





UK "Cyber Strategy": Stuxnet, Censorship, and Cyber-Specials
Peter Bright

On Friday, the UK government released its "Cyber Security Strategy," acknowledging the importance of the Internet to modern life, but also the risks it poses from criminals, terrorists, and nation states. Over the next four years, and at a cost of £650 million ($1 billion), the National Cyber Security Programme (NCSP) has four objectives: "tackle cyber crime," make the UK more resilient to "cyber attacks," create an open and stable "cyberspace," and ensure that the UK has the skills and knowledge to provide all "cyber security" needs.

In a document that unironically uses the word "cyber" more often than a mid-90s AOL chatroom, a wide range of future actions are described. Some are unremarkable common sense—helping educate Internet users about best practices such as keeping anti-malware software up-to-date, allowing crimes to be reported online in 15 minutes or less, working to ensure that critical infrastructure is robust, and so on.

But a few are more surprising. A new group to be formed within GCHQ, the UK's signals intelligence and information assurance agency, will "develop new tactics, techniques and plans to deliver military effects, including enhanced security, through operations in cyberspace." The UK will take a "proactive approach to tackling cyber threats and exploiting the cyber environment for our own national security needs."

In promising to undertake aggressive, military cyberattacks, the UK will be following in the footsteps of the US and Israel—together the presumed creators of the Stuxnet worm—and China, a nation regularly accused of infiltrating and compromising both private and government organizations to extract information.

Such measures might also be used for law enforcement, rather than national security, measures: NCSP will "use cyber techniques to disrupt other types of organised crime." The British judiciary earlier this year ordered an ISP to censor the Internet to block access to a Usenet search engine: such actions could become the norm as UK law enforcement seeks to act against criminals it has no jurisdiction over.

The strategy's plans for Internet users also raise eyebrows. Though the EU is no fan of Internet filtering, most UK Internet access is subject to censorship, through the "voluntary" (but not really; ISPs have been threatened with legal compulsion if they don't implement the system), ineffective and routinely problematic Cleanfeed.

The government wants to extend these restrictions on Internet usage by developing technology to enforce a range of prohibitions and restrictions applied to suspected and convicted criminals. The Home Office and Ministry of Justice will investigate "cyber-tags," which are "triggered by the offender breaching the conditions that have been put on their internet use, and which will automatically inform the police or probation service."

The conditions applied to UK Internet users range from broad bans on Internet usage—alleged LulzSec member Ryan Cleary is subject to such a ban as part of his bail terms—to more specific restrictions, such as barring convicted fraudsters from offering goods for sale online. Enforcement of such restrictions will require extensive invasive monitoring of Internet usage, and is unlikely to be limited to those convicted of any crimes.

To help establish the necessary skills to do this, the government wants to recruit "cyber-specials." Police forces in the UK already use "Specials"—15,000 part-time police officers, sometimes paid, sometimes not—to augment their numbers. The Metropolitan Police's Police Central E-crime Unit (responsible for the arrest of, among others, Ryan Cleary) already uses Specials with relevant computer skills. Expanded use of these specialist Specials will give police forces a greater ability to respond to computer crime.
http://arstechnica.com/tech-policy/n...r-specials.ars





Debate Rages Over Publishing New Bird Flu Research
Helen Branswell

New bird flu research that shows that the dangerous virus can mutate to become easily transmissible among ferrets _ and perhaps humans _ has embroiled the scientific community in a difficult debate.

Some biosecurity experts are concerned the research could be used as a blueprint by nefarious forces and are arguing against publication of the work.

But others, especially influenza scientists, are countering that the flu world needs to know the possible paths the H5N1 virus could take to become one that can spread easily among people so laboratories can be on the lookout for those changes in nature.

``There's been a general interest in understanding what the potential for human transmissibility is from H5N1 and from other influenza viruses. There certainly is an abiding interest in that question _ a policy interest, a public interest, so that is true,'' says Dr. Thomas Inglesby, director of the Center for Biosecurity of the University of Pittsburgh Medical Center in Baltimore, Md.

``But I think that has to be measured against the downside of actually demonstrating the transmissibility in ferrets as a surrogate for people, at one level. And then beyond that an even higher downside of describing in detail the methods by which this experiment could be done again.''

A panel of experts that advises the U.S. government on issues where science and terrorism have the potential to intersect is studying the research. The National Security Advisory Board on Biosecurity deals with issues of so-called dual use _ science that is done for valid reasons, but which would be used for evil ends.

The National Security Advisory Board on Biosecurity will not comment on the issue.

The body does not have the power to bar publication, but it is unclear whether a scientific journal would feel comfortable publishing an article if the group says it should not be placed in the public domain.

It's also not clear whether the funders of the research _ in this case, the U.S. National Institutes of Health _ would permit publication if the government's biosecurity advisers objected to publication of an article.

The controversy relates to several papers, two of which have recently been published and another which is in the publication pipeline.

That latter paper is the one garnering the most concern.

The senior author, virologist Ron Fouchier of Erasmus Medical Centre in Rotterdam, the Netherlands, won't talk about the work other than to confirm it is under review by the National Security Advisory Board on Biosecurity.

But Fouchier electrified the flu world in September when he gave an outline of the work at a major influenza conference in Malta.

He told the gathering that in trying to find out whether H5N1 could acquire the ability to spread easily among people, he came up with a virus that spread among ferrets as easily as seasonal flu viruses, according to a report on the meeting in Scientific American.

Ferrets are considered the best animal model for human infection with influenza. It is feared that a virus that could spread easily among the animals would spread easily among people as well.

H5N1 currently does not transmit easily to people or among people. To date there have been 570 confirmed cases of H5N1 infection in 15 countries and 335 of those people have died.

Inglesby says he believes science needs to be conducted and published, but in some cases, some science is too dangerous to be put into the public domain. He says this study may be one such case.

``I think that that principle is one of the underpinnings of science, but it's colliding in this case with a higher principle that science that produces either deliberately or inadvertently results which could lead to widespread dangers _ directly lead to widespread dangers _ should not be immediately reproduced for the world to see,'' he says.

Flu scientists, on the other hand, may feel like they are caught in a Catch-22 situation. For years they've faced demands from governments anxious to know whether H5N1 could become a human flu virus and what it would take for that to happen.

They've done a series of studies in labs specially designed to protect against inadvertent release of pathogens, under strict biosafety conditions, with clearances from institutional ethics committees or biosecurity committees.

Two recently published studies, one by scientists from the U.S. Centers for Disease Control and another by scientists at St. Jude's Children's Hospital in Memphis, Tenn., both involved engineering viruses with some genes from H5N1 viruses.

Both studies were published without being referred to the biosecurity advisory board.

Nancy Cox, head of the CDC's influenza division, says CDC follows strict rules when deciding whether a study is safe to do and whether results should be published. The agency uses a risks-benefits matrix designed by the biosecurity advisory board, she says, to guide those discussions.

And virologist Lynn Enquist, editor-in-chief of the Journal of Virology, which published the St. Jude's study, says that paper didn't ring the types of alarm bells that would prompt a referral to the advisory board. It involved putting a key gene from the H5N1 virus into the H1N1 virus that caused the 2009 pandemic.

Enquist, who is chair of molecular biology at Princeton University, sits on the National Science Advisory Board for Biosecurity.

He can't talk about the group's ongoing discussions. But speaking in general terms, he says decisions in this area are tough calls.

``On the one hand you can say `If you don't do this work we'll never know what's going on' and on the other hand you can say `If somebody gets a hold of this, it could be a problem,' `` he says.

``I find it really, really hard to think about telling people not to do science. My job as a scientist is to publish the very best I can under the safest and most legal conditions that are possible and get stuff out there. But there are other people who think we have to be really careful about what we do. And we have to think about that too.''

In Fouchier's case, his institution had to approve the work, and then had to apply to the Dutch government for clearance. His work was funded by the U.S. National Institutes of Health, and his laboratory had to pass inspection by the CDC.

Flu virologist Adolfo Garcia-Sastre knows about working with dangerous flu viruses. He was part of the team that reconstructed the virus that caused the 1918 Spanish flu, the worst pandemic in known history.

Garcia-Sastre was not involved in Fouchier's work and doesn't want to talk about a study he has not yet read. But he says science needs to know how to spot dangerous changes in flu viruses in nature.

``I think it's important to know all the ways how a virus can become transmissible to understand how close viruses are to (becoming) transmissible in nature,'' says Garcia-Sastre, who works at Mount Sinai Hospital in New York City.

``If not, we cannot be prepared.''

Cox agrees. ``We would like to know what are the danger signals.''

``It's a very delicate issue as to whether or not you might be potentially tempting someone with mal intent to create a virus that could be easily transmitted,'' she admits.

''But I have to say that even if you have very efficient transmission in ferrets you might not have efficient transmission in humans. It's an indicator, but it's not an absolute predictor.``

Inglesby is unconvinced that those benefits outweigh the risks of this type of work.

``If the goal of the experiment is to create a virus for which there currently is no vaccine or treatment, that if it escapes from the lab by accident could start a pandemic , if that literally is one of the outcomes of the experiment, I think the benefits of that would have to be extraordinary to justify that.''
http://www.winnipegfreepress.com/art...134409543.html





Philippines Say Arrested Hackers Funded by Saudi Group

Philippine police and the FBI have arrested four people that Manila said were paid by a militant Saudi Arabian-based group to hack into U.S. telecom AT&T's system, but the company said it was neither targeted nor breached.

The Philippines' Criminal Investigation and Detection Group (CIDG) said those arrested in Wednesday's operation in Manila with the Federal Bureau of Investigation were paid by the same group the FBI said had funded the November 2008 attacks in Mumbai.

"The hacking activity resulted in almost $2 million in losses incurred by the company," the CIDG said in a statement.

It did not name the group who it said had funded the Mumbai attacks, but India has blamed the militant Pakistan-based Lashkar-e-Taiba (LeT) for carrying out the attacks which killed 166 people.

AT&T, the No. 2 U.S. mobile provider, said it "ended up writing off some fraudulent charges that appeared on customer bills" but did not comment on the $2 million figure.

"AT&T and its network were neither targeted nor breached by the hackers," AT&T spokeswoman Jan Rasmussen said. "AT&T only assisted law enforcement in the investigation that led to the arrest of a group of hackers."

Police said the suspects had hacked into the trunk-lines of different telecom companies, including AT&T, with revenues diverted to accounts of the unnamed Saudi-based group.

Earlier this week, AT&T said it was investigating an attempt to access customer information, but did not believe any accounts had been breached.

The CIDG said the FBI sought the help of its Anti-Transnational and Cyber Crime Division (ATCCD) in March after they found the Saudi group had targeted AT&T using the hackers.

Among the four arrested was 29-year-old Paul Michael Kwan, who ATCCD chief Police Senior Superintendent Gilbert Sosa said had been arrested in 2007 after the FBI launched an international crackdown on groups suspected of financing militant activities.

Sosa said in the statement the Filipinos were being paid by a group originally run by Muhammad Zamir, a Pakistani arrested in Italy in 2007. He said Zamir was a member of Jemaah Islamiah, a Southeast Asian militant network with links to al Qaeda.

"Zamir's group, later tagged by the FBI to be the financial source of the terrorist attack in Mumbai, India, on November 26, 2008, is also the same group that paid Kwan's group of hackers in Manila," Sosa said in the statement.

Last month, Philippine police said weak laws against cyber crime and poor technical capabilities had made the country an attractive base for organized crime syndicates involved in cyber pornography, cyber sex dens, illegal gambling, credit card fraud and identity theft.

(Reporting by John Mair in Manila and Jim Finkle in Boston; Editing by Nick Macfie)
http://www.reuters.com/article/2011/...7AP06320111126





DDoS Attacks Spell ‘Gameover’ for Banks, Victims in Cyber Heists
Brian Krebs

The FBI is warning that computer crooks have begun launching debilitating cyber attacks against banks and their customers as part of a smoke screen to prevent victims from noticing simultaneous high-dollar cyber heists.

The bureau says the attacks coincide with corporate account takeovers perpetrated by thieves who are using a modified version of the ZeuS Trojan called “Gameover.” The rash of thefts come after a series of heavy spam campaigns aimed at deploying the malware, which arrives disguised as an email from the National Automated Clearing House Association (NACHA), a not-for-profit group that develops operating rules for organizations that handle electronic payments. The ZeuS variant steals passwords and gives attackers direct access to the victim’s PC and network.

In several recent attacks, as soon as thieves wired money out of a victim organization’s account, the victim’s public-facing Internet address was targeted by a network attack, leaving employees at the organization unable to browse the Web.

A few of the attacks have included an odd twist that appears to indicate the perpetrators are using money mules in the United States for at least a portion of the heists. According to an FBI advisory, some of the unauthorized wire transfers from victim organizations have been transmitted directly to high-end jewelry stores, “wherein the money mule comes to the actual store to pick up his $100K in jewels (or whatever dollar amount was wired).”

The advisory continues:

“Investigation has shown the perpetrators contact the high-end jeweler requesting to purchase precious stones and high-end watches. The perpetrators advise they will wire the money to the jeweler’s account and someone will come to pick up the merchandise. The next day, a money mule arrives at the store, the jeweler confirms the money has been transferred or is listed as ‘pending’ and releases the merchandise to the mule. Later on, the transaction is reversed or cancelled (if the financial institution caught the fraud in time) and the jeweler is out whatever jewels the money mule was able to obtain.”

The attackers also have sought to take out the Web sites of victim banks. Jose Nazario, manager of security research at Arbor Networks, a company that specializes in helping organizations weather large cyber attacks, said that although many of the bank sites hit belong to small to mid-sized financial institutions, the thieves also have taken out some of the larger banks in the course of recent e-heists.

“It’s a disturbing trend,” Nazario said.

Nazario said the handful of attacks he’s aware of in the past two weeks have involved distributed denial-of-service (DDoS) assaults launched with the help of “Dirt Jumper” or “Russkill” botnets. Dirt Jumper is a commercial crimeware kit that is sold for a few hundred bucks on the hacker underground, and is made to be surreptitiously installed on hacked PCs. The code makes it easy for the botnet owner to use those infected systems to overwhelm targeted sites with junk traffic (KrebsOnSecurity.com was the victim of a Dirt Jumper botnet attack earlier this month).

Security experts aren’t certain about the strategy behind the DDoS attacks, which are noisy and noticeable to both victims and their banks. One theory is that the perpetrators are hoping the outages will distract the banks and victims.

“The belief is the DDoS is used to deflect attention from the wire transfers as well to make them unable to reverse the transactions (if found),” the FBI said.

That strategy seemed to have worked well against Sony, which focused on weathering a DDoS attack from Anonymous while information on more than 100 million customers was being siphoned by hackers.

“In the chaos of a DDoS, typically network administrators are so busy trying to keep the network up that they miss the real attack,” said Jose Enrique Hernandez, a security expert at Prolexic, a Hollywood, Fla. based DDoS mitigation company. “It’s a basic diversion technique.”

Another theory about the DDoS-enhanced heists holds that the thieves are trying to prevent victim organizations from being able to access their accounts online. One crime gang responsible for a large number of cyber heists against small to mid-sized U.S. businesses frequently invoked the “kill operating system” command built into the ZeuS Trojan after robbing victims.

Organizations that bank online should understand that they are liable for any losses stemming from cyber fraud. I have consistently advised small to mid-sized entities to consider using a dedicated computer for online banking — one that is not used for everyday Web surfing — and preferably a non-Windows system, or a “live CD” distribution.
https://krebsonsecurity.com/2011/11/...-cyber-heists/





Thai Crackdown on Facebook Remarks on King
Lindsay Murdoch

BANGKOK: Thailand has warned users of Facebook that they could face prosecution under harsh lese-majeste laws if they press ''share'' or ''like'' on images or articles considered unflattering to the Thai monarchy.

The prosecution of a Thai-born US citizen who has pleaded guilty to translating a banned biography of King Bhumibol Adulyadej has signalled that authorities are also targeting lese-majeste offences committed overseas.

Thailand's Information and Communications Technology Minister, Anudith Nakornthap, says that even though Facebook clicks of ''like'' or ''share'' are only done to show support for messages, they could violate laws that carry sentences of three to 15 years jail for each charge.
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Authorities in Thailand have asked Facebook to delete more than 10,000 pages of content as computer technicians in Bangkok scour the internet for royal insults. ''We have informed Facebook and sought their assistance in deleting content which is offensive to our monarchy,'' Mr Anudith said.

Under Thai law, people face lese-majeste charges if they insult the king, queen, heir or regent. Even repeating details of an alleged offence is illegal.

The Computer Crimes Act also carries five-year jail terms for digital dissemination of information that threatens the security of the country or violates the ''peace and concord or good morals of the people''.

Public criticism of King Bhumibol, the world's longest-serving monarch, is rare in Thailand. In the past four years, authorities have blocked more than 70,000 internet pages, most for insults to the monarchy, officials say.

The Asian Human Rights Commission has expressed ''grave concern'' over the latest conviction and sentence of a person for lese-majeste, Ampon Tangnoppakul, 61, a retired truck driver and grandfather suffering from cancer. He wept this week after being sentenced to 20 years jail for sending ''vulgar'' text messages judged to be insulting to Queen Sirikit.

Human rights groups estimate that more than 300 lese-majeste charges that have been laid in Thailand since 2006. They include Australian English-language teacher Harry Nicolaides, who was sentenced to six years in jail, commuted to three years on pleading guilty, over a book hardly anyone read. Only 50 copies were published. He received a royal pardon in February 2009 and was deported.

A Thai-born US citizen, Joe Gordon, 55, was detained in Thailand in May for translating the book about King Bhumibol in the US where he had lived for 30 years. He had returned to Thailand temporarily for medical treatment. Gordon, who pleaded guilty to a lese-majeste charge in October hoping for a lenient sentence, is awaiting sentencing.

The webmaster of the Thai website Prachatai, Chiranuch Premchaiporn, is on trial over comments posted on the site that were deemed insulting to the monarchy. Ms Chiranuch, 44, told the court she regularly read through the thousands of items posted daily on the message board and deleted potentially offensive messages when she found them. Prosecutors allege she did not act quickly enough.

Ms Chiranuch was recently awarded the Hellman-Hammett award given annually to writers or activists for expressing freedom of expression.
http://www.smh.com.au/world/thai-cra...125-1nz1t.html





Anonymous Retaliates Against Cyber Investigators

The international hacktivist group known as Anonymous recently released two large torrents of stolen government data including details on forensic methodologies and information regarding current and former law enforcement agency employees.

According to Anonymous, the latest attacks come in retaliation to harsh sentences given to members of its group.

“Let this be a warning to aspiring white hat ‘hacker’ sellouts and police collaborators: stay out the game or get owned and exposed. You want to keep mass arresting and brutalizing the 99%? We’ll have to keep owning your boxes and torrenting your mail spools, plastering your personal information all over the (sic) internets,” the group said.

In their most recent attack, Anonymous targeted Alfredo Baclagan, a former California highway patrol officer who retired in 2010 as the special agent supervisor for the California Department of Justice, where he managed the agency’s computer crime investigations.

“As part of our ongoing effort to expose and humiliate our white hat enemies, we targeted a Special Agent Supervisor of the CA Department of Justice in charge of computer crime investigations,” Anonymous said in a statement. “We are leaking over 38,000 private emails which contain detailed computer forensics techniques, investigation protocols, as well as highly embarrassing personal information.”

Among the files the group released was roughly six years’ worth of emails from an International Association of Computer Investigative Specialists (IACIS) email list which Baclagan was a member.

The emails “detail the methods and tactics cybercrime units use to gather electronic evidence, conduct investigations, and make arrests.” The group added that the emails can help hackers protect themselves against the techniques law enforcement official use to catch them.

“The information in these emails will prove essential to those who want to protect themselves from the techniques and procedures cybercrime investigators use to build cases,” the group said.

More specifically, the emails contained details on how cyber investigators used EnCase Forensic software, recent attempts to crack TrueCrypt drives, and tips for preparing search warrants and subpoenas.

Anonymous also said that it also released the IACIS’ entire subscriber list, which caused “the administrators to panic and shut their list and websites down.”
http://www.homelandsecuritynewswire....-investigators





Anonymous Threatens Robin Hood Attacks Against Banks

Hacktivist group says it will steal credit card data from commercial banks and use the information to donate to charities and protest groups.
Mathew J. Schwartz

Just in time for the holidays, the hacktivist collective Anonymous has announced that it has teamed up with like-minded group TeaMp0isoN to donate to charity. The catch: they're using stolen credit data from big banks to make their donations, in a campaign they're calling Operation Robin Hood (#OpRobinHood).

"In regards to the recent demonstrations and protests across the globe, we are going to turn the tables on the banks," according to a YouTube video uploaded on Saturday, which formally announced #OpRobinHood.

"Operation Robin Hood is going to return the money to those who have been cheated by our system and most importantly to those hurt by our banks," it said. "Operation Robin Hood will take credit cards and donate to the 99% as well as various charities around the globe. The banks will be forced to reimburse the people there (sic) money back."

The video also claimed that the group had already used credit card data stolen from Bank of America, Chase, and CitiBank. "We have donated thousands to many protests around the world. We have donated thousands to the homeless and other charities. Our government has fallen short in many ways," it said. The video also urged people to move their money out of commercial banks and into credit unions.

Interestingly, Anonymous had already been advocating practical, everyday techniques--not just hacks--for removing money from big banks. In particular, last month the group announced Operation Cash Back (#OpCashBack)--"an op fully dedicated to moving your money from commercial banks to local credit unions." Coming up, it's also designated December 11 as "balance transfer day," which is the group's campaign to get people with interest rate debt to take advantage of credit card accounts with 0% interest rates.

But is the OpRobinHood campaign for real, or like previous threats against Wall Street and Facebook, just another hoax? Aesthetically, at least, the OpRobinHood video ticks all of the traditional Anonymous aesthetic requirements: a mashed-up "p0isoaNoN" logo (green on black), a liberal dose of swelling choral music (via that movie trailer staple "Europa," by Globus), together with selected clips of Kevin Costner as Robin Hood: Prince of Thieves.

Likewise, the video ends with a punchy threat: "We have come to take the 99%'s money back. We are not asking permission."

But aside from the campaign to get people to embrace credit unions, if OpRobinHood is for real, could a group such as Anonymous really hit banks hard by using stolen credit card data to make untold numbers of donations? Or might not the transactions largely get spotted by banks' fraud departments, and rolled back?

Bank spokespeople were not immediately available for comment on the feasibility of an OpRobinHood-style campaign.
http://informationweek.com/news/secu...acks/232200481





Italian Court: Online Editors Not Responsible for Reader Comments

The ruling contrasts with recent legal developments in Italy that have tended to curtail freedom of the Internet
Philip Willan

Online commentators Wednesday welcomed a ruling by Italy's highest court that the editors of online publications cannot be held legally responsible for defamatory comments posted by their readers.

In a ruling handed down at the end of October, the Court of Cassation acquitted a former online editor of L'Espresso news magazine of the crime of failing to prevent defamation committed by one of her readers.

The court overturned the verdicts of two lower courts in Bologna, which had convicted L'Espresso's former online editor Daniela Hamaui for failing to remove the defamatory comment.

The judges said online publications could not be treated in the same way as traditional print media and could not be expected to exercise preventative editorial control over readers' comments.

Traditional print media, as defined in Italian law, involved the reproduction of an original text on a physical medium that was then distributed to the public, the court said. Internet publications were not physically distributed to the public, even though it was theoretically possible for an online text to be printed out and then physically distributed by a third party.

It was not legally correct to apply sanctions intended for traditional print editors who failed to prevent the publication of a libel to an online editor who failed to remove defamatory material after it was posted by a reader, the court said.

Hamaui was acquitted by the court because failure to prevent a defamation was "not foreseen by the law as a crime."

Marco Pratellesi, blogging on the www.vanityfair.it website, introduced his report on the ruling with the words: "Here's the good news," and other commentators dubbed it an "historic" decision.

The liberalizing effect of the court ruling contrasts with previous legal developments that have tended to curtail the freedom of the Internet in Italy.

In February 2010 three Google executives were sentenced to six-month suspended prison sentences for allowing a video showing the bullying of a handicapped child to be posted on the Google Video site.

And in September activists protested in Rome against a draft law that would have forced online publications to publish corrections within 48 hours or risk a 12,000 Euros (US$16,000) fine. The law was subsequently modified by parliament, but several commentators accused former Prime Minister Silvio Berlusconi of trying to introduce a restrictive Internet regime in Italy to protect his political and business interests.
http://www.itworld.com/it-management...eader-comments





Making a Privacy Monitor from an Old LCD
Mike Nathan

[dimovi] had a spare LCD monitor sitting around and thought it would be great to convert it into a “privacy” monitor.

The process is simple enough for anyone comfortable with disassembling electronics. He took apart the monitor’s plastic frame, cutting out the polarized film with a utility knife. Once the film was removed, he spent some time removing the film adhesive from the glass panel using a combination of Oops cleaner and paint thinner.

He reassembled the monitor, which now shines a bright white regardless of what is actually being displayed on the screen. He removed the lenses from a pair of theater 3D glasses, replacing the plastic with the film he removed from the monitor.

Now, [dimovi] is the only one who can see what’s he is doing on his computer, which is just the way he likes it.

While there’s not a lot of magic going on behind the process, we think it’s a neat way to reuse an old monitor.
http://hackaday.com/2011/11/25/makin...om-an-old-lcd/





Software That Listens for Lies
Anne Eisenberg

SHE looks as innocuous as Miss Marple, Agatha Christie’s famous detective.

But also like Miss Marple, Julia Hirschberg, a professor of computer science at Columbia University, may spell trouble for a lot of liars.

That’s because Dr. Hirschberg is teaching computers how to spot deception — programming them to parse people’s speech for patterns that gauge whether they are being honest.

For this sort of lie detection, there’s no need to strap anyone into a machine. The person’s speech provides all the cues — loudness, changes in pitch, pauses between words, ums and ahs, nervous laughs and dozens of other tiny signs that can suggest a lie.

Dr. Hirschberg is not the only researcher using algorithms to trawl our utterances for evidence of our inner lives. A small band of linguists, engineers and computer scientists, among others, are busy training computers to recognize hallmarks of what they call emotional speech — talk that reflects deception, anger, friendliness and even flirtation.

Programs that succeed at spotting these submerged emotions may someday have many practical uses: software that suggests when chief executives at public conferences may be straying from the truth; programs at call centers that alert operators to irate customers on the line; or software at computerized matchmaking services that adds descriptives like “friendly” to usual ones like “single” and “female.”

The technology is becoming more accurate as labs share new building blocks, said Dan Jurafsky, a professor at Stanford whose research focuses on the understanding of language by both machines and humans. Recently, Dr. Jurafsky has been studying the language that people use in four-minute speed-dating sessions, analyzing it for qualities like friendliness and flirtatiousness. He is a winner of a MacArthur Foundation fellowship commonly called a “genius” award, and a co-author of the textbook “Speech and Language Processing.”

“The scientific goal is to understand how our emotions are reflected in our speech,” Dr. Jurafsky said. “The engineering goal is to build better systems that understand these emotions.”

The programs that these researchers are developing aren’t likely to be used as evidence in a court of law. After all, even the use of polygraphs is highly contentious. But the new programs are already doing better than people at some kinds of mind-reading.

Algorithms developed by Dr. Hirschberg and colleagues have been able to spot a liar 70 percent of the time in test situations, while people confronted with the same evidence had only 57 percent accuracy, Dr. Hirschberg said. The algorithms are based on an analysis of the ways people spoke in a research project when they lied or told the truth. In interviews, for example, the participants were asked to press one pedal when they were lying about an activity, and another pedal when telling the truth. Afterward, the recordings were analyzed for vocal features that might spell the deception.

For her continuing research, Dr. Hirschberg and two colleagues recently received a grant from the Air Force for nearly $1.5 million to develop algorithms to analyze English speakers and those who speak Arabic and Mandarin Chinese.

Shrikanth Narayanan, an engineering professor at the University of Southern California who also uses computer methods to analyze emotional speech, notes that some aspects of irate language are easy to spot. In marital counseling arguments, for instance, the word “you” is a lot more common than “I” when spouses blame each other for problems.

But homing in on the finer signs of emotions is tougher. “We are constantly trying to calculate pitch very accurately” to capture minute variations, he said. His mathematical techniques use hundreds of cues from pitch, timing and intensity to distinguish between patterns of angry and non-angry speech.

His lab has also found ways to use vocal cues to spot inebriation, though it hasn’t yet had luck in making its computers detect humor — a hard task for the machines, he said.

Elsewhere, Eileen Fitzpatrick, a professor of linguistics at Montclair State University in New Jersey, and her colleague Joan Bachenko are using computers to automatically spot clusters of words and phrases that may signal deception. In their research, they have been drawing on statements in court cases that were later shown to be lies.

David F. Larcker, an accounting professor at the Stanford Graduate School of Business, audited a course in computer linguistics taught by Dr. Jurafsky and then applied its methods to analyze the words of financial executives who made statements that were later disproved.

These executives were, it turned out, big users of “clearly,” “very clearly” and other terms that Joseph Williams, the late University of Chicago professor who wrote the textbook “Style,” branded as “trust me, stupid” words.

PROFESSOR LARCKER says he thinks computer linguistics may also be useful for shareholders and analysts, helping them mitigate risk by analyzing executives’ words.

“From a portfolio manager’s perspective looking at 60 to 80 stocks, maybe such software could lead to some smart pruning,” he said. “It’s a practical thing. In this environment, with people a bit queasy about investments, it could be a valuable tool.”
https://www.nytimes.com/2011/12/04/b...man-voice.html





Napster Plays its Final Tune

Napster has played its final tune after the ground-breaking file-sharing service merges operations with major digital music rival Rhapsody.
Emma Barnett

Yesterday, the pioneering file-sharing service, which launched in 1999, officially became part of Rhapsody, after it was sold to the rival music service by its parent company BestBuy, for an undisclosed sum last month.

It is the second time that the music service has shut down since its creation. A 19 year-old Shawn Fanning created the software which allowed people to exchange MP3 files on the web for free. He worked with Sean Parker to create the service, who subsequently became Facebook’s first president and a major shareholder. Parker’s story then became famous after Justin Timberlake played him in the US blockbuster, The Social Network, last year.

However, after the music industry and artists collectively launched several major legal cases against the start-up, it was forced to shut down in 2001.

Napster inspired a series of other similar services, such as LimeWire and Kazaa, which allowed people to illegally download music for free and share it with their friends. However, they too faced a series of lawsuits which brought their companies to an end.

Napster came back on to the digital music scene in 2003, but as a shadow of its former disruptive self, having repositioned itself as a legal music download service.

BestBuy then bought the service, from then owner Roxio in a deal estimated to have been worth $121m, which in turn then sold it onto to digital music subscription service Rhapsody.

Napster’s home page currently features a holding image saying: “Napster has joined Rhapsody”.

The digital music market has become increasingly competitive, especially after streaming services, such as Spotify, have become increasingly popular.
http://www.telegraph.co.uk/technolog...inal-tune.html















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