Peer-To-Peer News - The Week In Review - April 9th, '11

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April 9th, 2011




"Big Content" Is Strangling American Innovation
James Allworth

Innovation has emerged as a key means by which the US can pull itself out of this lackluster economy. In the State of the Union, President Obama referred to China and India as new threats to America's position as the world's leading innovator. But the threats are not just external. One of the greatest threats to the US's ability to innovate lies within: specifically, with the music and movie business. These Big Content businesses are attempting to protect themselves from change so aggressively that they risk damaging America's position as a world leader in innovation.

Many in the high technology industry have known this for a long time. Despite making their living relying on it, the Big Content players do not understand technology, and never have. Rather than see it as an opportunity to reach new audiences, technology has always been a threat to them. Example after example abounds of this attitude; whether it was the VCR which was "to the American film producer and the American public as the Boston strangler is to the woman home alone" as famed movie industry lobbyist Jack Valenti put it at a congressional hearing, or MP3 technology, which they tried to sue out of existence. In fact, it's possible to go back as far as the gramophone and see the content industries rail against new technology. The reason why? Every shift in technology is difficult for them. Just as they work out how to make money using one technology, it changes.

The sensible thing for them to do would be to learn how to deal with the change. Instead, their approach to every generation of technology is either to attempt to stymie it so badly that nobody wants it, or to stop it altogether through their influence with lawmakers in Washington DC.

Now, in the past, these efforts might have impacted technology that only involved the consumption of movies and music. But as the technology used to display movies and listen to music converges with other technology — technology where America has historically led — Big Content's attempts to protect their business model threaten innovation at the very heart of America's competitive advantage.

Let's take a look at one specific example: the industry's repeated attempts to introduce innovation-chilling legislation. The latest is COICA, designed to allow the Government to take down any website that infringers copyright — and lock the domain. Fortunately, a number of American legislators have taken a more clear-headed view of the problem. It was defeated late last year in Congress, after being described by Senator Ron Wyden as a "bunker buster cluster bomb." But it's back again. In a recent interview, Silicon Valley Congressman Zoe Lofgren describes the back and forth with the content industry and their requests for legislation like COICA as increasingly draconian.

These laws won't just have the power to stop copyright infringers. They have the potential to stop legitimate uses that the content industries don't like — examples like YouTube and even the early MP3 players are examples of legitimate uses that big content have gone after. As Senator Wyden put it: "the collateral damage of this statute could be American innovation, American jobs, and a secure Internet."

The result of laws like this? Startups — the engine of America's growth — will just go elsewhere. China and India are creating environments extremely conducive to disruptive innovation. Even Europe is benefiting — one of the most promising recent music services, Spotify, is hosted in Europe. It's still not available to American consumers.

Unfortunately, a subset of what COICA proposes is already in existence today. Immigrations and Customs Enforcement (known as ICE) has been simply seizing domains of websites suspected of copyright infringement at taxpayer expense. Because of the sheer number of sites the content industries want taken down, they innovated — by bypassing due process altogether. ICE have taken down entire sites for only linking to files — for example, torrent-finder.com. The sites have no opportunity to stop this process until after they have been taken down.

If you're the next YouTube, would you want to locate here in the US and risk having the government simply switch off your site at the behest of Big Content? Or might it not be easier to find a more benign environment to create your business in?

The ultimate irony in all of this is that if we stop giving the content industries what they want — sweeping, blanket protections — we may actually be doing them a favor. They wanted the VCR banned. It turned out to be one of the most profitable technologies for the movie industry in its history. Ignoring their requests may turn out to be cruel to be kind — instead of focusing on trying to fight the technology, they'll be forced to find ways of profitably embracing it.

The next generation of technology companies are already starting to shift overseas. Before conceding to any more demands for protection from Big Content, America would do well to consider what it places at risk.
http://blogs.hbr.org/cs/2011/03/big_...ling_amer.html





Patents and Innovation

The tech world has recently seen an explosion in patent litigation, often involving low-quality software patents, which threatens to stifle innovation. Some of these lawsuits have been filed by people or companies that have never actually created anything; others are motivated by a desire to block competing products or profit from the success of a rival’s new technology. The patent system should reward those who create the most useful innovations for society, not those who stake bogus claims or file dubious lawsuits. It's for these reasons that Google has long argued in favor of real patent reform, which we believe will benefit users and the U.S. economy as a whole.

But as things stand today, one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories.

So after a lot of thought, we’ve decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction. Today, Nortel selected our bid as the “stalking-horse bid," which is the starting point against which others will bid prior to the auction. If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community—which is integrally involved in projects like Android and Chrome—continue to innovate. In the absence of meaningful reform, we believe it's the best long-term solution for Google, our users and our partners.

Posted by Kent Walker, Senior Vice President & General Counsel
http://googleblog.blogspot.com/2011/...nnovation.html





US Government’s ‘Pirate’ Domain Seizures Failed Miserably
Ernesto

The seizure of file-sharing related domain names by the US Government in recent months have stirred up a lot of controversy. Despite heavy critique from various sides, the responsible authorities justified their actions and claimed that it is an effective tool to clamp down on Internet piracy. However, those who take a good look at the end result soon notice that reality paints a different picture.

Over the past several months a series of domain name seizures by the Department of Justice (DOJ) and Immigration and Customs Enforcement (ICE) made headlines across the Internet.

Under the flag of “Operation In Our Sites” the authorities shut down a dozen file-sharing and streaming sites, as well as close to 80 sites selling counterfeit goods. After two months of silence on the domain seizure front, the MPAA has now applauded the US authorities for their “successful” enforcement efforts.

“Operation In Our Sites has not only put illegal sites out of business, but has raised public awareness about this specific form of crime on the Internet. Most importantly, these enforcement efforts have resulted in most of these entities ceasing their illegal activity,” wrote the MPAA two days ago in a letter to the US Government.

In more ways than one, the above statement from the movie studios is a gross twist of reality. For one, the public awareness that was raised mostly concerned the realization that the Government was willing to sacrifice a lot, including first amendment rights, to protect the interests of the entertainment industries. The seizures resulted in heavy critique from journalists, legal experts, senators and most prominently, the public.

It is of course hardly a surprise that the MPAA is misrepresenting the truth in their favor, but adding that the domain seizures “resulted in most of these entities ceasing their illegal activity” goes too far. Let’s take a look at what really happened to the allegedly infringing file-sharing and streaming sites that had their domains seized, starting in reverse chronological order.

It wasn’t hard for the affected sites to continue their operations. Since their servers had not been touched physically it was a simple matter to change a few settings to make the sites available to the public again under a new domain, something achieved in a few minutes. This is exactly what most of the streaming and file-sharing related sites have done.

During the latest round of seizures under the “Operation In Our Sites” flag in February, a total of 10 domain names were targeted, belonging to 6 different sports streaming services. Despite the thousands of dollars in tax payer money that were spend on the enforcement effort, all of the sites were back up in no time under new domains.

As of today, only one of the six is no longer accessible and that is the site of Bryan McCarthy, who was arrested by the feds last month. McCarthy initially continued his Channelsurfing.net website under a new domain at Channelsurf.eu. The day after his arrest this site was still up and running and it is believed that due to the circumstances he took it offline himself after he was bailed out.

So, although all the sites noticed an initial dip in traffic due to the seizures, the actions of the US Government did little to actually stop the streaming services from operating. This was no different to the situation November last year when 82 domain names were seized. Although most of the targets were sites selling counterfeit goods, 4 file-sharing related domains were also seized, including Torrent-Finder.com.

As mentioned previously, the operator of Torrent-Finder immediately announced he would fight the seizure in court and continued operating under the Torrent-Finder.info domain. Of the three other ‘piracy’ related sites that were seized, two – OnSmash and Rapgodfathers – came back on another domain, carrying on where they left off. Again, the seizures appear to have had little effect.

If we look back at the first round of “Operation In Our Sites” seizures in June last year, a similar pattern emerges. Of the 8 movie streaming services that were targeted at least 3 have continued, and it wouldn’t be a big surprise if the smaller sites that didn’t return immediately started over under a new name.

The above clearly illustrates that a domain seizure is not the ultimate anti-piracy tool the authorities and the MPAA claim it is. Most of the piracy related sites simply continued under new domains, undeterred. This raises the question whether the costs involved warrant the mediocre outcome.

Aside from the tens of thousands of dollars in tax money being spent on the enforcement actions, the unconstitutionality of the seizures are also a cost that has to be factored in. And with the seizures failing to achieve the desired outcome, one has to question whether it’s all worth it.
http://torrentfreak.com/us-governmen...erably-110403/





The Pirate Bay is Now 5 Million File Sharing Buccaneers Strong
Justin_Massoud

Swedish bit-torrent site “The Pirate Bay” was shut down by Hollywood. It’s the subject of the documentary “The Pirate Bay: Away From Keyboard,” which covers the file-sharing site’s inception, impact and subsequent legal battles with the MPAA. The U.S. government even pressured the Swedish government into raiding the outlet, citing its wealth of music and movies. And now, the popular destination for free content boasts over 5 million subscribers.

Known copyright and technology site TorrentFreak tempered the dubious milestone with what most already know – that the site faces an uphill battle in doubling that number.

“The big question is whether the site will live to welcome its 10 millionth user in a few years from now,” writes the site. “The community and moderators – who all work for free – is certainly large enough, but the pressure from the entertainment industry on ISPs and governments is ever increasing. But then again, this never stopped The Pirate Bay before.”

Another slightly surprising problem presented itself to some members of the site’s community last month: their information was uncovered by hackers, leading to spam emails unceremoniously hitting numerous inboxes. A previous issue for The Pirate Bay, the recurring exploit is certainly worrisome for its members all things considered.

Last year several co-founders received jail sentences and fines as a result of owning and operating the site after a lengthy legal battle. The decision led to hacker group Anonymous launching a DDoS attack on several organizations opposed to The Pirate Bay as part of “Operation: Payback.”
http://www.myce.com/news/the-pirate-...-strong-42664/





Canadian-Backed Report Says Music, Movie, and Software Piracy is a Market Failure, Not a Legal One
Michael Geist

Trademark and copyright holders frequently characterize piracy as a legal failure, arguing that tougher laws and increased enforcement are needed to stem infringing activity. But a new global study on piracy, backed by Canada's International Development Research Centre, comes to a different conclusion. Following several years of independent investigation in six emerging economies, the report concludes that piracy is chiefly a product of a market failure, not a legal one.

The Social Science Research Council launched the study in 2006, identifying partner institutions in South Africa, Russia, Brazil, Mexico, Bolivia, and India to better understand the market for media piracy such as music, movies, and software. The result is the most comprehensive analysis of piracy to date.

The 440-page report challenges many of the oft-repeated claims about piracy and how address it. For example, it finds that contrary to repeated claims that there are strong links between piracy and organized crime, no such link exists. Instead, the authors conclude that “decades-old stories are recycled as proof of contemporary terrorist connections, anecdotes stand in as evidence of wider systemic linkages, and the threshold for what counts as organized crime is set very low.”

Similarly, it finds no evidence that anti-piracy “education programs” — some of which have been launched in Canada — have any discernable impact on consumer behaviour. As of 2009, researchers identified over 300 anti-piracy education programs, yet were unable to find any benchmarks or attempts to determine whether they actually work.

The report also rejects the conventional wisdom that tougher penalties provide a strong deterrent to piracy activities. It notes that judges frequently face overwhelming caseloads that involve violent crime such as murder and assault. While the law may call for lengthy prison terms for selling counterfeit DVDs, many local judges engage in a “judicial triage” where economic harms to foreign rights holders take a back seat to local criminal activity that poses threats to public health and safety.

While setting the record straight on piracy myths is valuable, the report's most important contribution comes from chronicling how piracy is primarily a function of market failure. In many developing countries, there are few meaningful legal distribution channels for media products. The report notes “the pirate market cannot be said to compete with legal sales or generate losses for industry. At the low end of the socioeconomic ladder where such distribution gaps are common, piracy often simply is the market.”

Even in those jurisdictions where there are legal distribution channels, pricing renders many products unaffordable for the vast majority of the population. Foreign rights holders are often more concerned with preserving high prices in developed countries, rather than actively trying to engage the local population with reasonably-priced access. These strategies may maximize profits globally, but they also serve to facilitate pirate markets in many developed countries.

The study concludes that local ownership makes a significant difference in developing country markets, finding that “domestic firms are more likely to leverage the fall in production and distribution costs to expand markets beyond high-income segments of the population. The domestic market is their primary market, and they will compete for it.”

Although the study is limited to the six emerging economies, there are important lessons for Canadian policy makers. Groups such as the Business Software Alliance have acknowledged that Canada is a low-piracy country, yet the lack of access to some content may lead some Canadians to turn to unauthorized channels. Although the failure to serve the Canadian market does not legitimize infringing activity, as in the developing world, it does help explain it.
http://www.thestar.com/business/arti...ot-a-legal-one





Adobe Logic
karaganis

We’ve argued at some length that piracy is part of the software business model in developing countries because, as Microsoft exec Jeff Raikes put it,

In the long run the fundamental asset is the installed base of people who are using our products. What you hope to do over time is convert them to licensing the software (Mondok 2007).

In middle and low income countries (or, for that matter, lower-income segments of high income countries), piracy creates that installed base.

This logic is pretty clear when looking at a company like Microsoft, which benefits from the massive network effects of being a near-monopoly in the operating system and office software markets. There is vast and valuable software ecology built around Microsoft Windows, and Office is a de facto standard. Such a position provides enormous leverage in consumer and business decisions to buy software. It’s not for nothing that Microsoft owns roughly 90% of the operating system market (in spite of Apple’s resurgence). But Microsoft is not unique: these factors also come into play for companies without monopoly positions but trying to enter new markets. As CEO Michael Simon of LogMeIn observed (echoing comments made over the years by Bill Gates), “If people are going to steal something, we sure as hell want them to steal our stuff ” (NYT 2010). LogMeIn is a $300 million company, not a $222 billion company, so scale is not the only factor here. Rather, LogMeIn wants to become a standard, and do so in countries where it can’t efficiently invest in marketing and distribution (and won’t lower prices).

Of course, the software sector is very diverse and we’ve only scratched the surface in exploring how these dynamics play out across it. One case that I’ve been curious about is Adobe, which has a very high profile in antipiracy and enforcement efforts.

My general assumption was that Adobe was just a variation on the theme. Although Adobe’s Creative Suite tools don’t function as platforms in the same way as Windows, they do clearly benefit from network effects that crowd out competitors. And they do clearly require a lot of training to use properly. So piracy helps maintain Adobe’s tools as standards, and at the same time shifts a lot of the training costs associated with its tools into the informal sector–at home, in school, or in small businesses. Because Adobe charges $1300-2600 for its Creative Suite tools, it can anticipate a lot of piracy in these contexts–and close to universal piracy in developing countries where price/income ratios become absurd. Such a strategy seems to make good business sense for Adobe. It made $3.8 billion in 2010, up 29% from 2009.

I thought this was probably the whole story. Then I got involved in the production of the MPEE report. Like a lot of publishing projects, the production of MPEE was a small scale collaboration involving free lance help for book layout, maps, and proofing. Once the text is laid out in publishing software (for us, InDesign), all of these stages are most easily done in InDesign. Here, we learned a painful lesson. Adobe has released 3 versions of InDesign in 4 years. All of them break compatibility with the previous versions. So when our layout designer (CS3) handed the doc off to our map illustrator (CS4), the document saved up and was no longer readable by the former. We bought CS5 in our Columbia U office (via a not-ridiculously-priced academic license at $300), but the original layout had used Mac fonts, which the PC rendered differently. Ultimately, everyone had to upgrade to the trial version of CS5, and then the clock was ticking and we had 1 month to finish. When you visit the Adobe site for help after going crazy with these issues, you get advice from helpful stooges like this:

I don’t see keeping 3-5 versions of InDesign as being too much to expect of a freelancer. Also probably a good idea to keep Illustrator CS3 at minimum for the compatibility. I think it just comes with the territory.

Or the ‘Community Support Specialist’ who offers:

If you want to work with people in CS3 you’ll need to use CS3. Folks on CS4? Same thing.

Here’s a loyal customer who expressed the dilemma pretty clearly:

I bought my software 21 months ago and in this time Adobe has expected me to upgrade twice–I haven’t even finished expensing the initial cost of the software on my books yet. Upgrading that often just can’t happen in a small firm–it’s prohibitively expensive for a one man shop.

So now from what I understand, to do this properly, I am supposed to buy the upgrade and keep both versions running on my machine and track with every client which version of the software I need to be working in. What happens when I have to add an employee? I will have to buy the CS3 version of the software in addition to the CS5 Suite because otherwise we can’t work on the same files. I’m finding this frustrating.

Now, mind you, such incompatibility doesn’t involve exotic functionality, just straight text layout into columns and boxes. The kind of stuff that has been core functionality of publishing software since the early 1990s. Translate this dilemma to Brazil or Russia, where incomes are a fraction that of the US and you get a very simple outcome: massive piracy of Adobe products. In fact, go through this process in the last month of a 4-year project on a deadline and one could understand becoming extremely sympathetic to such a perspective. This, as we’ve argued, is not a defect of the Adobe business model, it is the business model.

The fact that Adobe won’t maintain compatibility across versions for such basic functionality seems hugely anti-consumer, but obviously very good business.



Ps. One more thing: at no time does an older version of InDesign indicate why it won’t open a newer file. Instead, it asks you to upgrade a zillion plug-ins. Which you can’t do!

Pps. The insightful ‘stenchwarrior’ over at Slashdot offers this comment :

I can tell you from experience that Intuit (Quickbooks, Quicken, Peachtree…etc.) are the worst about this. A company can effectively run the same version for several years, but if they want to share their books with an accountant (as most probably will), then the client and the accountant must all have matching software versions. If the account decides to take the brunt, then they must have enough licenses to run multiple copies simultaneously which becomes VERY expensive, plus a version for each year that their clients have. Not only do the licenses cost money, but you better have at least a 100Gb drive on every computer to hold all versions, plus a hefty dose of RAM to handle the app, plus all the others that a typical accounting firm needs to run (Office, PPC, CCH…etc).

It’s a f*****g racket, I tell you. The partners at my accounting firm hate me when I have to deliver the budget.

Any more versions of this story worth sharing?

Ppps. This is an interesting idea from the same thread. From ‘thisnamestoolong’:

I think the best way to fight it would be for professional organizations representing the trades that use it (graphic designers, accountants, etc.) to try to force better terms on the software companies. Software should ALWAYS be backward compatible with files from older versions, and should have an option to save a file to be compatible with the old version whenever possible.

Surely the accounting professional associations like AICPA could make a stand here. Or have they? Or do the high costs benefit the bigger incumbents?
http://piracy.ssrc.org/adobe-logic/





Student Challenges Penalty in Illegal Downloading Case
Milton J. Valencia

Dozens of students from local law schools crowded the First US Circuit Court of Appeals in Boston today to hear the arguments in a file sharing lawsuit brought by the recording industry, the first case of its kind to reach the federal appellate level.

Lawyers for Boston University graduate student Joel Tenenbaum – including a Harvard Law student -- asked the court to reduce a $67,500 judgment against Tenenbaum for sharing 30 songs on the Internet.

Lawyers for the Recording Industry Association of America, meanwhile, asked the court to increase the judgment.

Last summer, US District Court Judge Nancy Gertner reduced the judgment to $67,500 from a jury decision of $675,000.

Lawyers for the recording industry argued that the jury’s verdict should stand, that it was appropriate for willful copyright infringement.

Harvard law professor Charles Nesson and student Jason Harrow argued, however, that a law against copyright infringement in the recording industry was never meant to target consumers. And, even if it did, the $67,500 is too severe.

The court took the matter under advisement. It is the first time a case has reached the appeals court level since the recording industry started filing lawsuits for illegal file sharing in 2003.
http://www.boston.com/news/local/bre...t_challen.html





MPAA Files Copyright Suit Against Zediva
Greg Sandoval

The trade group representing the six major Hollywood film studios filed a copyright suit in federal court against online video distributor Zediva today.

The suit has started the process that almost certainly will end with Zediva's demise.

"Zediva illegally streams movies to its customers without obtaining required licenses from the movie studios," the Motion Picture Association of America (MPAA) said in a statement today. "Zediva claims it is like a brick-and-mortar DVD 'rental' store and therefore not obligated to pay licensing fees to copyright holders. But the DVD 'rental' label is a sham. In reality, Zediva is a video-on-demand service that transmits movies over the Internet using streaming technologies in violation of the studios' copyrights."

Zediva didn't immediately respond to an interview request.

Who didn't see this coming? Lots of better loophole-business models have come along that appeared to have a better claim on legality than this operation.

Most of those were sued into oblivion.

The MPAA filed suit in U.S. District Court for the Central District of California against WTV Systems, parent company of Zediva, and CEO Venkatesh Srinivasan. The studios have asked for $150,000 for each infringed work. They also want the service shut down.

See, everybody wants free content, but all the wishful thinking in the world or half-baked arguments aren't going to make that happen.

Some companies manage to use the Internet to create revolutionary, lucrative, and consumer-friendly business models. YouTube is still chugging away. Viacom is challenging the Google-owned company in court but YouTube has penned content deals with scores of entertainment companies. Netflix may not be the most popular company in Hollywood but the rental service operates within the law.

Some of these would-be challengers that try to shoe-horn their business strategies into a very broad reading of the law are begging to be litigated out of existence.

Last month, I asked Zediva managers why their company would fare better in court than, say, ivi.TV. That's the Web-video company that came along before Zediva. It too saw some success at stirring excitement before finally losing in court. A month ago, a federal judge in Manhattan ordered ivi.TV to stop retransmitting broadcast TV programming over the Web.

This is what Zediva said: "Zediva is a DVD rental service. It lets a person rent a real DVD and a real DVD player, and control that DVD player over the Internet. It's just like a DVD player with a really long cable attached to it."

Ivi.tv streamed live TV to users over the Internet, arguing that the service was protected by licenses that copyright laws grant to cable systems.

"Zediva isn't a cable system and doesn't rely on those special licenses that Ivi was trying to take advantage of," Zediva said. "Zediva is operating on the same principle that video rental stores have operated on for decades: once you buy a lawfully made DVD, you're allowed to rent it out to your customers."

So, I never see or touch this DVD player or the disc? I didn't buy either. Zediva acquired them for me and will use this little thing called the Internet to connect me to the hardware--but this isn't Internet distribution?

I'm not a lawyer but I'm predicting this one is headed to a permanent injunction and forced shutdown, just like in ivi.TV's case.
http://news.cnet.com/8301-31001_3-20050579-261.html





Digital Economy Act: Filesharing Code Delayed By Six Months

Alleged copyright infringers could still receive warning letters next year despite high court challenge
Josh Halliday

The government's code to clamp down on illegal filesharing will not come into force for another six months as the Digital Economy Act is held up by a high court challenge.

However, plans to send thousands of warning letters to alleged copyright infringers are still on track to begin in the first half of next year, the government said on Tuesday.

The introduction of the code, which sets out how music and film companies can take steps to identify people accused of illegal downloading, was delayed indefinitely last month after a legal challenge by two of the UK's biggest internet service providers BT and TalkTalk.

The government now says that the measures, known as the initial obligations code, should be introduced by October – 10 months later than planned.

"This is a deadline – we would hope the code can be made before then and are still aiming to have the first notification letters go out in the first half of next year," said a spokesman for the Department for Culture, Media and Sport.

"Our principal concern is to establish a system that works and provides the UK's creative industries with the tools they need to protect their hard work and investment. We understand the urgency, but will not rush this important task."

Under the government's controversial anti-filesharing scheme, internet service providers send notification letters to customers accused of illegal downloading by music and film companies. Repeat copyright infringers could have their internet access slowed or even blocked under secondary measures in the act.
http://www.guardian.co.uk/technology...ct-filesharing





BT Has a Plan to Beat Illegal Filesharing

Not-for-profit music download service is a bold move aimed at weaning customers off piracy

BT has kindly agreed to help out its chums in the creative industries with a not-for-profit music download service designed to wean its customers off illegal filesharing.

The move is yet another sign that Ed Vaizey, the communications minister, has been banging heads together at his high-powered meetings between rights holders and internet service providers.

According to a leaked Invitation to Tender document, BT's music download service would be available to its 5.5 million broadband users across the UK. BT says it will unveil the product "in the near future", while talks are thought to be ongoing with major music labels such as Universal Music and EMI.

Although BT has promised to forgo a profit on the service for the first six to nine months – meaning it will be free to access for its customers – the ISP will introduce charging after that time.

Exactly what that subscription model will look like is currently subject to much hair pulling, though a few lessons can be learned from past and present digital music hits and misses.

The move brings to mind BSkyB's ill-fated foray into music with Sky Songs, which was put out of its misery in December after about a year. Loved by music execs but loathed by the fans, BT would do well to steer clear of a purely subscription-based offering.

That would leave BT Beats – for that's what we shall christen it for the time being – using a freemium model, as pioneered by the Anglo-Swedish streaming service Spotify. With 1 million paying customers in Europe – representing a significant 15% of its almost 6 million music fans – Spotify is the king of new music models.

Why Spotify has not been sat alongside Universal, Sony, EMI and Warner at Vaizey's roundtables is anyone's guess. But that doesn't mean that Daniel Ek's music service hasn't been flirting with ISPs even further behind the scenes.

From what we understand, Spotify has been in talks with major ISPs, not just Virgin Media, about potential partnerships. If ISPs were to go where Sky has failed, they would presumably prefer to partner with the $1bn-valued start-up, whose loyal customer base continues to grow, than to go head to head with a rival service. We all know what happens when you do that.

While Vaizey's behind the scenes tenacity may be winning a fig leaf or two for the music industry, BT and TalkTalk continue to fight the very same rights holders in the high court.

Monday is expected to be the final day of the Digital Economy Act's judicial review, though no verdict is expected for another five to six weeks.
http://www.guardian.co.uk/technology...esharing-music





Why the US Needs to Blacklist, Censor Pirate Websites
Nate Anderson

Piracy runs rampant on the Internet, but Daniel Castro says it doesn't have to be this way. He wants the US government to start creating a blacklist of Internet sites; once approved by a judge, each site would be cut off from American Internet users at the Domain Name System (DNS) level, where readable locations like "arstechnica.com" are turned into numerical IP addresses. US-based credit card companies would be forbidden from doing any business with the site, and US-based advertising networks couldn't serve ads to the site.

Sound familiar? It should—this is the basic outline of the Combating Online Infringement and Counterfeits Act (COICA) legislation first introduced in Congress last year. Castro, a senior analyst at the Information Technology and Innovation Foundation (ITIF), coauthored a 2009 paper on Internet piracy that included many of the ideas that found their way into COICA.

He testified this month before Congress about the need for such measures, and I spoke to him recently about Web blocking, censorship, and why he believes that deep packet inspection (DPI) of Internet traffic by ISPs is more like Gmail than wiretapping. As for due process, Castro says COICA is fair—but he's open to some tweaks.

Crime fighting, Internet-style

Ars: I'm sure we can both agree that there's plenty of piratical behavior on the Internet, but the key question is how we deal with that reality. In your view, why is something like COICA the right way forward?

Castro: If you accept the fact that piracy is a problem, government needs to do something. You have to start from that premise. So if you accept that premise, the question is what's the most effective way of reducing infringement?

The problem we have right now is that there's different types of actors: domestic [pirate] sites, foreign sites, domestic consumers, foreign consumers. You have different strategies for dealing with each of these groups. For domestic sites, you can do things like taking down sites very easily. For foreign sites, you can't do that. The question is, are there other options? Of course there are. You can block sites, for example, at the DNS level. Or you can get everyone who's involved in the Internet, the different intermediaries, to come together and find ways to combat piracy, and that's what COICA is about.

Ars: There has been a host of criticisms about the way COICA might be implemented. One of them I've heard repeatedly is that the utility of DNS censorship is going to be fairly low, given that people can still access the sites in question by IP address or by switching DNS providers. Is this just about making piracy a little bit harder?

Castro: Nobody, including myself, makes the claim that DNS blocking will be 100 percent effective. It might not even be 90 percent effective. But the question is, is it effective enough that it's worth the cost of doing it? I think the consensus from the people that can do it is that yes, it is. There's a very low cost if you have a single list of sites that are engaged in piracy. Once you have this list, there's a variety of steps you can take to make accessing these sites more difficult.

It's crime-fighting. You never stop all crime; the point is, can you reduce it to a tolerable level. Right now, we're not really doing all that much to combat piracy and counterfeiting, and there is a lot more that we can do. As long as the steps are reasonable, we should take them.

Ars: In attempting to seize a recent child porn domain name, ICE accidentally took down an extra 80,000 sites and redirected them to a banner claiming that they had been busted as part of a child porn investigation. Do you have concerns about this DNS-based approach to site blocking, especially since COICA's site blocking hearings could be largely non-adversarial?

Castro: Well, that gets to the issue of process, and certainly the process failed with that ICE takedown. That means it should be corrected; I absolutely agree with that. One of the proposals at the hearing where I testified was that the government might give advance notice at times. You can certainly envision a 72-hour notice period where you let the site know that it has infringing content, we are intending to take it down, and you have 72 hours to respond. That's one possibility. We don't do that in the real world with counterfeiting; we go in and seize counterfeit goods when we see them. If a crime is happening, the police can stop it immediately, and there's a limited amount of time in which they can do so without going to a judge. You can stop a crime in progress, and that's the same question we have on the Internet now.

Ars: I was speaking with Rep. Zoe Lofgren (D-CA) about this several weeks ago, and she was very sharp on the “due process” issue. She argued that what was going on with ICE takedowns right now were a travesty of justice and probably illegal, in part because of the seize-first-ask-questions-later approach. But it sounds like you're more open to notification and a chance to respond before some of this blacklisting takes effect.

Castro: Sure. I think there's a couple things to keep in mind. You might want to act so swiftly on some sites that you don't notify them. For example, a site like WatchSeason5Episode2ofDexter.tv, which appears right after the show airs. A reasonable process would say that someone in law enforcement can look at the site, talk to the content owner, and agree that it is an infringing site. Maybe they can take that one down in real-time.

Something else that may be a little more ambiguous might have a 72-hour notice, where the site could come back and possibly provide evidence that what happened was incorrect. Remember, of all the sites that ICE has taken down so far, no one has come back and said, "I really wasn't an infringing site," with that one exception.

Ars: Sure, but isn't that a bit like saying, "We took down all of these allegedly infringing sites and none of the foreign operators behind them hired an expensive US lawyer to get their domain name back, so they must agree with what we did"?
Daniel Castro

Castro: If my site was taken down illegally by the federal government, I would complain very loudly. And we haven't heard that from the ones who were taken down. I think they know they were engaging in illegal activity, and some people have said they've stopped.

Ars: You draw a distinction between different kinds of sites. But what we've seen from ICE so far has involved many sites which were clearly infringing, but also sites where it wasn't so clear—sites that engage only in linking, for instance, or those that link to illegal content but also to legal material. So it's interesting to hear you call for something better than a one-size-fits-all approach.

Castro: The purpose of COICA is to go after sites that are dedicated to infringing, where there is a significant portion of the content which is infringing. It's not to say that you can avoid penalties by posting entire seasons of HBO shows alongside a few public domain photos. I think that's ridiculous. Of course you can take down the whole site. There are distinctions that can be made. But at the same time, nobody's talking about taking down someone's personal website because they happen to use a copyrighted photo.

Ars: One of the things Lofgren warned about was that if you go down this road, government agencies like ICE could one day choose to shut down Google. Your reaction?

Castro: I don't think anyone seriously thinks that ICE is going to shut down Google. Sites that play by the rules are in no danger of being taken down because that's the whole point: they're part of the solution, not part of the problem.

Ars: Many of these issues are international. For instance, one of the domains taken down in a recent seizure was the Spanish rojadirectas.com, which was declared legal by Spanish courts. Countries obviously have the right to prevent behavior at home that is legal abroad, but it does seem like this gets a bit more complicated when you're trying to do things like COICA is: preventing multinational payment processors and ad networks from working with companies that are legal in their own jurisdictions. Any concerns about extending US law too far when it comes to shaping the Internet?

Castro: I don't think there's a problem with asking companies in the United States to protect other companies and IP rights holders in the United States. They are based here, they should follow US laws. The fact that a country doesn't protect intellectual property is no excuse to just give them free reign to do whatever they want.

Ars: Should private companies be able to go to court under COICA to obtain website blocks, or should that be reserved for government?

Castro: I don't think there needs to be a private right of action, but there needs to be an easy way for rightsholders to report that their content is being infringed upon and have a process so that enforcement action can be taken. If it appears the government alone is unable to provide a significant level of enforcement, then I think a private right is something that should be considered.

Ars: In your 2009 paper, you talked about getting even more Internet intermediaries involved in antipiracy work, even saying that ISPs should install deep packet inspection (DPI) gear to monitor traffic flowing through their network for possible copyright violations. Would you still like to see ISPs get more involved?

Castro: Yes. ISPs certainly have a role in reducing infringement. One recent study found that more than 25 percent of content on the Internet is infringing content. This has a big impact on ISPs and on all users who are not downloading that material. That's why I think it's important to allow ISPs to engage with their customers who are downloading illegal content in different ways; one of those ways would be deep packet inspection.

That is not wiretapping. Wiretapping is when someone is reading your communications, reading your e-mails. Deep packet inspection can be an automated process, it can do content matching and identification, and it can provide a simple warning to a user. Or it could be used in "three strikes" legislation, like they have in a few European countries—where you receive notice and if it keeps happening, you receive some kind of penalty. If it continues, you might have your Internet connection terminated.

But there are other options as well. Content holders could advertise to these people. If you are downloading a certain band's music, that band could contact you to say, “Hey, we're going to be in your town next month, what if you buy these tickets?”

Ars: This talk about getting intermediaries more involved in stopping infringement sounds like a move away from the traditional “safe harbor” approach we have used for communications networks. How would this sort of approach differ from, say, asking a phone company to listen in on calls to prevent illegal activity, or to block a list of government provided numbers to alleged foreign mobsters?

Castro: If you call known foreign terrorists, your line is probably going to be tapped. But I don't think there's actually a parallel there. I don't think those are the same thing. Deep packet inspection is one option. And the key is that this is automated technology. When Gmail provides contextual ads by scanning your e-mail, there is not a privacy violation because there's no person on the other side who's reading your e-mail.
Fireworks and missiles ahead

COICA promises to be one of the crucial pieces of tech-related legislation that Congress will consider this year, and it promises to involve serious fireworks. Sen. Patrick Leahy (D-VT) has already promised that COICA will pass this year, but he's up against Senators like Ron Wyden (D-OR), who said last year that COICA was "like using a bunker-busting cluster bomb when what you really need is a precision-guided missile." Wyden has promised to "take the necessary steps to stop [COICA] from passing the United States Senate."

To catch up on our complete COICA interview series, check out our conversations with Sen. Al Franken (D-MN), who supports COICA with a few changes, and with Rep. Zoe Lofgren (D-CA), a fierce opponent of everything that COICA represents.
http://arstechnica.com/tech-policy/n...e-websites.ars





House Hearing On File Sharing Turns Into 'But Why Can't Google Magically Stop All Bad Things Online' Hearing
Mike Masnick

You kind of knew where things were heading when the House decided to have pre-COICA hearings on what websites can do to deal with copyright infringement -- especially when they titled it "Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites." The very fact that they're presupposing certain sites as "parasites," suggests this hearing was not about reasoned discussion (is any Congressional hearing ever really about that?), but about pointing fingers, and the key finger pointing was directly at Google. I'll have a separate post on the "prepared remarks" of the various speakers, but the Congressional Reps in attendance apparently focused most of their attention on Google, wondering why it's not magically stopping infringement online.

"The question isn't what Google has done," [Rep. Bob] Goodlatte told the audience. "But more about what Google has left to do."

He listed some of the accusations that some in the entertainment industries have leveled at Google, such as the ability of the alleged pirate sites to fund their operations by posting Google ads on their site, as well as an inability by Google to remove infringing materials promptly.

Note what he did not do, which is point out that Google has gone significantly beyond what the law requires to help copyright holders. It's even set up ways for them to directly monetize content when it's found to be infringing online. You would think that helping copyright holders monetize is more important than "stopping infringement," but somehow no one ever seems to think that way. Also note that Goodlatte simply took the (mostly false) accusations by the entertainment industry as fact -- and didn't seem to pay attention to the fact that almost none of the accusations were accurate.

Of course, the real crux of the argument is this belief that Google can somehow wave a magic wand and make infringement disappear online. It's technological cluelessness at its most extreme. Google has a long history of responding quickly to take down notices and (in our opinion) bending over backwards, far beyond what the law requires, to help copyright holders both defend their rights and to make money. The idea that Google "profits" from infringement has simply not been shown at all. The entertainment industry has this weird belief that anywhere AdSense ads are displayed, that massive profits follow. This is simply incorrect. But, even if it were true, how is Google to know what is and what is not infringing? It's a simple question and no one answers it, other than to say, "it's obvious." Then when it's pointed out that it's not at all obvious, they go quiet.
http://www.techdirt.com/articles/201...-hearing.shtml





Six States Use Nearly Half of all Pirated Software in the U.S.
Tim Conneally

Six U.S. states are responsible for nearly half of all the suspected cases of corporate software piracy, the Business Software Alliance reported on Wednesday.

The BSA, which collects piracy tips from its online reporting forum nopiracy.org, and its 1-888-NO-PIRACY hotline, said 49.3% of the piracy reports it received in 2010 were about companies in California, Texas, Florida, New York, Illinois and Michigan.

"On the one hand, it is not surprising that the six states where we are seeing the most corporate software piracy are all among the largest in the country," said Jodie Kelley, BSA's Vice President of Anti-Piracy and General Counsel. "But the trend underscores how prevalent these harmful copyright violations are throughout the US economy."

The results may not be so surprising to the BSA because all but one of the states included in the list (Michigan,) have been the same since 2007. A point of interest here is Ohio's disappearance from the top six, and Michigan's movement up.

Michigan was ranked 37th out of the 50 U.S. states in GDP per capita by the Department of Commerce Bureau of Economic Analysis, lowest of all the states in that ranked highly in the use of pirated software.

But the BSA says a factor like the local economy, or even the world's economy overall, isn''t necessarily a good indicator of the piracy rate, but the type of industries prevalent in the area may be.

"We've tended to see more piracy reports in certain sectors (e.g. manufacturing) vs. other sectors," representatives from the BSA told Betanews today. "Though we would have expected higher piracy rates in 'bad economic times,' that hasn't always been the case and it would thus be an overstatement to suggest that businesses are more or less likely to use pirated software during tough economic times at this point."
http://www.betanews.com/article/Six-...-US/1302124667





Key Music Industry Lawyer Now EU Copyright Chief
Nate Anderson

The European Union's new point person on copyright policy won't take up her post until mid-April, but she's already stirring up controversy. That's because Maria Martin-Prat spent years directing "global legal policy" for IFPI, the global recording industry's London-based trade group, before moving back into government. The appointment raises new questions about the past private-sector work of government officials, especially those crafting policy or issuing legal judgments on the same issues they once lobbied for.

Martin-Prat isn't a lifelong music industry employee; she worked for the EU, left for IFPI, and then rejoined the EU several years ago. She's currently working for DG MARKT, the Internal Market branch of the European Commission. She runs MARKT's distinctly non-glamorous-sounding unit E.1, "Free movement of services and establishment I, Services Directive," and she makes sure that EU countries don't enact illegal barriers to halt the free movement of service professionals like doctors. (For instance, DG MARKT recently forced Cyprus to change a law requiring real estate agents from other countries to pass a Cypriot exam and to work in collaboration with a Cypriot agent.) She's a Spanish lawyer and fluent in Spanish, French, and English.

All good background for a civil service promotion… but she did work for IFPI for several years in the early 2000s, where she dealt directly with policy matters, including copyright. A 2004 IFPI announcement notes a promotion: "Maria Martin-Prat has assumed management of industry-related regulatory issues, including competition compliance, in addition to her longstanding role in directing global legal policy for IFPI. Her new job title is Deputy General Counsel, Director of Legal Policy and Regulatory Affairs."

Martin-Prat's new appointment has received some coverage in Europe from English, French, and German publications. (Fun fact: reading these links will teach you that "funfact" is a legitimate German word.)

More complete coverage comes from KEI, a nonprofit which works on trade and copyright issues and leaked many of the ACTA drafts during negotiations. KEI's Jamie Love, who has crossed paths with Martin-Prat before, recently tweeted, "When at the IFPI, she was a hardliner."

"Pleading for strong copyright protection"

One of the most controversial quotes about the Martin-Prat appointment didn't come from Martin-Prat herself; it's the summary of a panel she appeared on back in 2003, during her time at IFPI. According to the official summation of her remarks, "[the recording] industry is fighting on three fronts: enforcement, the formulation of a new business model, and pleading for strong copyright protection. The industry, she claimed, is not trying to expand copyright but to ensure that the existing rights are meaningful."

How strong should these protections be? Martin-Prat is said to have "argued that private copying had no reason to exist and should be limited further than it is. She claimed that it was incompatible with the three-step test."

This a reference to the famous three-step test first written into the Berne copyright convention 50 years ago. The test says that exceptions to copyright should only be allowed if they are 1) a "special" case, 2) don't interfere with the "normal exploitation of the work," and 3) don't "unreasonably prejudice the legitimate interests of the rights holder."

Martin-Prat was apparently objecting to the "private copying" right found in countries like Canada and Belgium and Germany, which slap a levy on things like blank CDs in order to compensate creators for the revenue they didn't earn. (Note that "private copying" is usually not taken to cover things like file-sharing; it's more typically compensation for the "harm" of, say, ripping a CD into your computer; however, the whole issue is a bit murky and varies by country.)

In a 2001 conference paper, she complained that "what should be seen as an exception to a right is perceived now by many as a 'user right.' The lack of a re-assessment at European level of the private copying exceptions in light of the digital environment is particularly regrettable as its implications are far greater than those of any other exception." She noted, for instance, that rightsholders might want to release a DVD audio disc that allowed only a single digital copy to be made; a robust right of private copying could impair this kind of offering and thus negatively affect the market.

Questions arise

Two MEPs are openly questioning Martin-Prat's appointment. Liberal Dutch MEP Marietje Schaake and Swedish Pirate Party MEP Christian Engström have written to the European Commission, asking, "Does the Commission not see any problems in recruiting top civil servants from special interest organisations, especially when being put in charge of dossiers directly related to their former employers? If not, why not?

"Does the Commission feel that such an appointment would help to build confidence with the European Parliament and the general public that the Commission can be trusted to handle copyright-related issues in a fair and balanced manner?"

On his personal blog, Engström was more fierce. "Welcome to the European Union," he wrote, "where the big business lobby organizations are calling most of the shots at the Commission, and where citizens are just seen as a nuisance to be ignored. I guess the only real news is that they don’t even bother to try to hide it any more."

The Commission should offer its own response in the next few weeks.
http://arstechnica.com/tech-policy/n...ight-chief.ars





Steal Like an Artist and Relax: Original Is Relative
Adam Pash

If you know enough about any field, it's hard to imagine you can do anything new or original. For people who do creative work, that kind of mindset can be paralyzing. But as writer and artist Austin Kleon points out, no idea exists in a vacuum; the key is identifying what's worth stealing.

It's not a new idea—you've very likely heard the phrase "Good artists borrow, great artists steal." It's commonly attributed to Pablo Picasso, or T.S. Eliot, though it likely originated with neither. Kleon illustrates his point in the cartoon above, and has this to say on the subject:

Here's what artists understand. It's the a three-word sentence that fills me with hope every time I read it:

Nothing is original.

It says it right there in the Bible. Ecclesiastes:

"That which has been is what will be, That which is done is what will be done, And there is nothing new under the sun."

Every new idea is just a mashup or a remix of previous ideas.

Whether or not you're familiar with the great-artists-steal idea, it never hurts to hear a well-presented reminder: When you feel like you can't come up with a truly original idea, it isn't the end of the world. More likely, you're just being honest with yourself. Embrace what you know, steal what works best, and roll it together with other great ideas to make something that, while not necessarily original, may be new and interesting.

For more, hit up Austin's full post, which is filled with well-formed advice that applies to nearly any kind of work.
http://lifehacker.com/#!5790337/stea...ng-is-original





Appeals Court Knocks Down Verizon Net Neutrality Challenge
Marc Ferranti

An appeals court Monday dismissed Verizon's challenge of the U.S. Federal Communications Commission's December net neutrality ruling, calling it premature.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia noted in its decision that the FCC's net neutrality order is a rule-making document subject to judicial review once it is published in the Federal Register. The panel said that the appeal's "prematurity is incurable."

In its December ruling, the FCC voted to prohibit broadband service providers from selectively blocking or slowing Web content and applications. As expected, the ruling unleashed protests from an array of big service providers.

Verizon appealed the FCC ruling on Jan. 20.

"We are deeply concerned by the FCC's assertion of broad authority for sweeping new regulation of broadband networks and the Internet itself," said Michael Glover, Verizon's senior vice president and deputy general counsel, in a statement accompanying the challenge.

Backers of the net neutrality ruling Monday hailed the appeals court's decision.

"This is hardly surprising," said a statement from Andrew Jay Schwartzman, senior vice president and policy director of the Media Access Project. "Verizon tried to game the system by attempting to challenge the FCC's open Internet decision prior to its official release. ... The future of the Internet is too important for such legal shenanigans. Notwithstanding Verizon's ploy, this case will be heard in the right court, at the right time."
http://www.pcworld.com/businesscente...allenge.h tml





House Moves to Overturn FCC on Net Neutrality
Declan McCullagh

House Republicans moved today to prevent controversial Net neutrality regulations from taking effect, a move that is likely to invite an eventual confrontation with President Obama.

By an almost entirely partisan vote of 241 to 178, the House of Representatives approved procedures for voting on a one-page resolution that says, simply, regulations adopted by the Federal Communications Commission in December "shall have no force or effect."

"Congress did not authorize the FCC to regulate in this area," Rep. Rob Woodall (R-Ga.), said during this morning's floor debate. "We must reject any rules that it promulgates in this area... It is Congress' responsibility to delegate that authority."

Today's vote, which fewer than 10 Democrats supported, comes a day after a federal appeals court said it was too early for Verizon and MetroPCS to sue the FCC to overturn the regulations. The ruling wasn't much of a setback--the lawsuit can be filed again after the agency has formally published the final text of the regulations, which it has not yet done.

The vote approved procedures set the previous evening by the House Rules Committee, clearing a way for a final vote on the resolution itself. That may be a bit anti-climatic: the totals are expected to be similar to today's, with perhaps even less support for the FCC.

Yesterday the White House issued a rare formal veto threat. "If the president is presented with a Resolution of Disapproval that would not safeguard the free and open Internet, his senior advisers would recommend that he veto the Resolution," a statement said. (Obama has not vetoed any legislation since the Republicans gained control of the House.)

A resolution of disapproval is a formal process, outlined in the Congressional Review Act, that permits Congress to overturn decisions of federal agencies. It requires both the House and the Senate to vote, and is subject to a presidential veto, but is not subject to a filibuster and only requires 51 votes to clear the Senate.

During the House floor discussion, Rep. Jared Polis (D-Colo.) said that curbing the FCC's regulations will "imperil one of the greatest sources of job creation and innovation in America."

Rep. Ed Markey (D-Mass) said in a statement afterward that the FCC's regulations are "a commonsense approach to preserving the most successful commercial and communications medium in our country's history." (Other House Democrats have released a similar statement.)

This is one of those technology topics that has become starkly partisan: During the 2008 campaign, Obama told CNET that "I will take a backseat to no one in my commitment to network neutrality." In February, House Speaker John Boehner (R-Ohio) announced that "our new majority in the House is committed to using every tool at our disposal to fight a government takeover of the Internet."

On December 23, the FCC released the text of its 194-page document with the regulations and accompanying explanations of how broadband providers' business practices will be affected. It had approved them on a 3-2 party line vote two days earlier.

Last April, a federal appeals court unceremoniously slapped down the agency's earlier attempt to impose Net neutrality penalties on Comcast after the company temporarily throttled some BitTorrent transfers.

The Senate has not yet voted on the resolution of disapproval. A parallel version of the legislation in that chamber has 39 sponsors, close to the majority of supporters required.
http://news.cnet.com/8301-31921_3-20050971-281.html





Lawmaker Has Concerns Over Mobile Megamerger
Jasmin Melvin

A U.S. lawmaker with oversight of technology expressed concern that AT&T Inc's plans to take over T-Mobile USA would stifle innovation in the wireless market.

Representative Greg Walden, chairman of the House subcommittee on communications and technology, said he did not want to see a merger diminish the vibrant and competitive nature of wireless.

AT&T's $39 billion bid to buy Deutsche Telekom AG's T-Mobile USA would concentrate 80 percent of U.S. wireless contract customers in just two companies -- AT&T/T-Mobile and Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc.

AT&T, currently the No. 2 U.S. mobile carrier behind Verizon, has said the merger will spur innovation and economic growth by improving quality and expanding wireless service to 95 percent of Americans.

But Walden expressed concern about eliminating a national carrier.

"It seems to me if there are fewer and fewer players in a market, there's less and less opportunity for that creative innovation and invention that has occurred so far in the wireless market," he said at an event sponsored by news service Politico Pro.

The merger needs the approval of the U.S. Federal Communications Commission and the Justice Department and the process is expected to take at least a year.

Walden has no direct input into those reviews but his subcommittee has oversight of the FCC, and he did not rule out hearings on the merger proposal.

He said his panel would be very critical of the FCC's merger review process, checking for potential abuses of power.

Walden criticized agencies that use their authority over mergers to "extort policy changes."

Congress may have to step in, Walden said, with tighter definitions on agencies' authority over mergers.

"The FCC needs to look in the mirror on this one because we're going to come at them very strongly, very forcefully," he added.

Spectrum

AT&T could face a tough battle at the FCC.

FCC Commissioner Michael Copps said at the onset of the Comcast-NBCU merger that it would be a tough sell. That transaction won a majority of the FCC members' approval, but Copps voted against it.

He said in an interview this week for C-SPAN television's "The Communicators," that AT&T's proposal "may be an even steeper climb" and that the deal "sucks the oxygen" out of other issues before the FCC, especially spectrum reform.

But Walden said this was not a concern for him. "I think we're all fairly capable of multi-tasking, and a lot of work goes on even if a hearing isn't announced or scheduled," he said.

The FCC wants Congress to grant it authority to hold incentive auctions that would compensate broadcasters for giving up some of their spectrum to wireless companies.

The agency also wants lawmakers to consent to giving a highly sought after chunk of U.S. airwaves known as the D Block to public safety groups to build out a nationwide mobile broadband network for emergency services.

Walden, a former broadcaster, said he hoped a bipartisan consensus could be reached as spectrum reform is likely to drive innovation, but he was wary of acting too quickly.

"We're going to have a series of hearings to get all these issues out in the open. We're not going to cram something through," he said.

(Reporting by Jasmin Melvin; Editing by Tim Dobbyn)
http://www.reuters.com/article/2011/...7305EJ20110401





Georgian Woman Cuts Off Web Access to Whole of Armenia

Entire country loses internet for five hours after woman, 75, slices through cable while scavenging for copper
Tom Parfitt

An elderly Georgian woman was scavenging for copper to sell as scrap when she accidentally sliced through an underground cable and cut off internet services to all of neighbouring Armenia, it emerged on Wednesday.

The woman, 75, had been digging for the metal not far from the capital Tbilisi when her spade damaged the fibre-optic cable on 28 March.

As Georgia provides 90% of Armenia's internet, the woman's unwitting sabotage had catastrophic consequences. Web users in the nation of 3.2 million people were left twiddling their thumbs for up to five hours as the country's main internet providers - ArmenTel, FiberNet Communication and GNC-Alfa – were prevented from supplying their normal service. Television pictures showed reporters at a news agency in the capital Yerevan staring glumly at blank screens.

Large parts of Georgia and some areas of Azerbaijan were also affected.

"It was a 75-year-old woman who was digging for copper in the ground so that she could sell it for scrap," said a spokesman for Georgia's interior ministry said yesterday.

Dubbed "the spade-hacker" by local media, the woman – who has not been named – is being investigated on suspicion of damaging property. She faces up to three years in prison if charged and convicted.

A spokesman for Georgia's interior ministry said the woman was temporarily released "on account of her old age" but could face more questioning.

The damage was detected by a system monitoring the fibre-optic link from western Europe and a security team was immediately dispatched to the spot, where the woman was arrested. The interior ministry said she had no accomplices.

The cable is owned by the Georgian railway network. It is heavily protected, but landslides or heavy rain may have exposed it to scavengers.

Pulling up unused copper cables for scrap is a common means of making money in the former Soviet Union. Some entrepreneurs have even used tractors to wrench out hundreds of metres of cable from the former nuclear testing ground at Semipalatinsk in Kazakhstan.
http://www.guardian.co.uk/world/2011...uts-web-access





Tug of War Between Cable Companies and Channels Comes to the iPad
Brian Stelter

The iPad, which went on sale a year ago, is becoming the latest battleground in a long-running fight over how TV programs will be delivered in the digital age, and who will deliver them.

Last week, Time Warner Cable abruptly removed a dozen channels from an iPad app after lawyers for four major content providers convened at a Manhattan courthouse to sue the distributor.

Viacom, Fox Cable Networks, Scripps Networks and Discovery Communications were minutes away from filing their legal paperwork when Time Warner Cable agreed to remove their channels on Thursday afternoon, according to three people with knowledge of the planned filing. They spoke on the condition of anonymity because the companies had not publicly acknowledged their plans to sue.

Time Warner Cable reaffirmed in a statement that afternoon that it believed it had “every right to carry the programming on our iPad app” and said it would consider its legal options. The next day, it announced it had added several dozen channels to the app, including A&E and Bravo.

Meanwhile, Cablevision entered the fray on Saturday, releasing its own iPad app that carries all TV channels the same way a customer’s cable box does. By Sunday afternoon it was ranked No. 1 among all apps in the entertainment section of Apple’s iPad app store.

No immediate legal action was threatened over the weekend against Cablevision by any channel owners. Discovery, for one, did not seem hostile; asked about the Cablevision app, it said in a statement, “We don’t comment on specific affiliate agreements, but as we’ve always said we are open to negotiating and we do have deals with distribution partners where similar rights have been recognized and we have received appropriate consideration and value.”

There were indications Sunday night that other channel owners were more perturbed, but they would not say so publicly.

Distributors like Time Warner and Cablevision assert that their existing contracts with channels allow them to turn iPads and other devices into TV sets. But many of the companies that own the channels expect extra payment, saying that streaming their content over iPads constitutes a new distribution channel.

In advertisements and public statements, Time Warner Cable has been defending what it says is its right to deliver the channels on devices. In a statement Thursday, it criticized channel owners “who are solely focused on finding additional ways to reach into wallets of their own viewers.”

Executives at companies like Viacom and Discovery privately complain that the app is being used to sell broadband subscriptions and gain market share.

Time Warner Cable’s app, which was introduced in mid-March and has been quite popular, is free, but it requires customers to subscribe to both Time Warner Cable’s television package and its broadband service. The app is designed so that it works only in customers’ homes, so users cannot download a program and watch it on the subway or elsewhere.

Channel owners also complain about the fact that iPad viewers are not counted by Nielsen, which prepares TV ratings. A Nielsen spokesman said the company was working to bring its iPad measurements into the TV ratings, but did not have a specific plan or timeline.

While Time Warner Cable’s app has dozens of channels, Cablevision’s has about 300 channels, more closely mirroring the cable boxes in customers’ living rooms. And Cablevision’s app does not require broadband — just a wireless router that sends a signal to the iPad.

“Cablevision has the right to distribute programming over its cable system to iPads configured in this way under its existing distribution agreements with programming providers,” the company said Saturday.
https://www.nytimes.com/2011/04/04/b...ia/04ipad.html





Special Report: Dumping Print, Publisher Bets the Ranch on Apps
Mark Egan

The prince of coffee table books believes paper books are dead. Now he wants to be king of the app.

Since 1980, Nicholas Callaway has made the finest of design-driven books, building a publishing house and his fortune on memorable children's stories and on volumes known for the fidelity of their reproductions of great art. But the quality of paper, ink and binding mean nothing to him now.

For Callaway, it's all about apps -- small applications sold in Apple's App Store where books are enhanced beyond the mere text of e-books. In this cutting-edge new medium, cooks can clap hands to turn pages of an interactive recipe, a book about Richard Nixon can include footage of him sweating during presidential debates, a Sesame Street character can read a story out loud and, should your child get bored, the app can turn the tale into a jigsaw puzzle or a computerized finger-painting set.

"I have bet the whole ranch on this," Callaway told Reuters. "This kind of juncture happens maybe once in a century."

Publishers from New York to London agree this as a moment of huge change. They are adapting to rising sales of e-books, and the popularity of smart phones and tablets such as the iPad. The retail landscape has changed with Amazon becoming the dominant seller of books while countless book stores go the way of video rental stores. America's No. 2 book store chain, Borders, is bankrupt. Some authors have dropped their publishers entirely, self-publishing online and using social media to connect with readers. Others have become adept at using Facebook and Twitter to reach readers or have attracted fans by becoming popular reviewers of books on Amazon and then publishing their own book.

Callaway is among those who believe the change is just beginning and, in the years to come, the app will change things utterly.

Sitting in his chic offices on Manhattan's cobble-stoned South Street Seaport, the 57-year old Harvard graduate, photographer, father of two and daily Anusara yoga practitioner bristles with excitement as he flips open the worn black cover of his iPad.

"This is revolutionary," he says, stroking his finger at the iPad's glass surface and prodding to open an app he has developed. "This is the Looking Glass. This is Alice in Wonderland. We are at the beginning of an entirely new medium."

The increasingly popular e-books sold on Amazon's Kindle, Apple's iBook store and Barnes & Noble's Nook store are electronic reproductions of paper books. So, for publishing innovators such as Callaway, it will be Apple's App Store that will ultimately transform books into a new medium.

Titans from Random House, Penguin and HarperCollins are jostling with the likes of Callaway for a piece of the pie. Experts say it's like a Wild West gold rush, perhaps the biggest moment in publishing since Gutenberg's invention of the movable-type printing press in the middle of the 15th Century.

From Sculpture to "Sex"

Callaway seems an unlikely man to lead a technological revolution in publishing. He started as a publisher at age 26, having read classics at Harvard and spent some time in Europe studying art. He had no publishing experience. Nevertheless, with a $5,000 loan from his brother Reeves Callaway, he published books about Constantin Brancusi's sculptures, about 20th century photography icon Alfred Stieglitz and painter Georgia O'Keeffe's best-selling "One Hundred Flowers." He repaid the loan within two years.

He gained fame outside the book world when he published Madonna's book "Sex" and later convinced her to write children's books, which have sold millions of copies. But his biggest success began with David Kirk's "Miss Spider's Tea Party" in 1994. It was Callaway's first children's book and it sold one million copies in its first year.

Then in 1995 came the first movie made entirely from computer-generated imagery, "Toy Story," and Callaway had his "eureka" moment.

"I thought, this is a new form of story telling, this is going to change the world," he said. "We stopped thinking of books as the sole vehicle for our products and we thought more of core intellectual property that could be executed across many different media."

"Miss Spider" creator David Kirk, Callaway's No. 1 producer, was perfect for the new approach since he was not your typical author. The pair's partnership dated to 1991 when Callaway was looking for the perfect gift for his daughter Nikeyu's first Christmas. In an Upper West Side toy boutique, Callaway stumbled upon a handmade alligator pull toy, being sold in a beautifully illustrated hand-painted box.

"I thought, anyone who could made something this beautiful and crafted so well in toy form might be a good children's book author and illustrator," Callaway said, adding that he called the company named on the box and the phone was answered by Kirk.

Callaway urged the Ohio native and art school graduate to create kid's books. Unlike a typical relationship where the publisher takes most of the revenue and gives the author a royalty, Callaway and Kirk would be partners, splitting the money made from everything that came from their work together.

In the years that followed, Callaway and Kirk went into overdrive on "Miss Spider." Kirk churned out more titles, selling more than six million copies, and Callaway inked deals. They created a computer-generated cartoon series, an interactive game, and a line of consumer products called "Sunny Patch," making everything from backpacks to children's rain boots and watering cans. Unlike the hand-made crafts Kirk once made, this merchandise was sold across America in Target stores. "Sunny Patch" was later sold to Melissa & Doug, which makes educational toys, and is now sold globally.

"You can tell a story in a book. You can tell a story in a game, in a film. You can tell a story in a watering can," Callaway said of their approach. "No one in publishing was doing this. People wondered, 'What is he doing selling watering cans?' In essence, we were building ownership of intellectual property across many different forms."

Callaway believes a lack of understanding of the importance of intellectual property is the biggest challenge for traditional publishers, who have generally been left on the sidelines as authors licensed rights for films and other products derived from their creations.

When it comes to intellectual property, perhaps the biggest name of all in publishing is Harry Potter. But for Callaway, Potter -- published by Bloomsbury in Britain and Scholastic in America -- is a cautionary tale.

"The book publishers were the ones who drove it and developed its intellectual property into a multi-billion dollar property, but Scholastic ... and Bloomsbury ..., neither of those entities kept the film rights," he said.

Seven Harry Potter movies have yielded $6.37 billion of box office receipts. The eighth movie is set for summer release. But while author J.K. Rowling profited from selling the rights of the Potter books to Warner Bros in 1998, the publishers did not share the spoils.

"The publishers had the opportunity and they did not see it. That is historically always the case with publishers, they either don't have the film rights or consumer products rights and, if they do, they just license them away," Callaway said.

His model, in contrast, is to set up a partnership with an author from the start, retaining control of the rights.

A Future of Apps?

Ever since his first children's book, Callaway said he was waiting for that moment when the medium would change -- the publishing equivalent of that "Toy Story" moment.

Then in the spring of 2009, the technorati were abuzz with chatter that Apple was preparing a new type of tablet computer -- something to bridge the gap between a laptop and the iTouch, which was a hybrid MP3 player and handheld computer.

"I went to my staff and said, 'It's time to burn the boats,'" he said, telling his employees, "We are going to transform ourselves ... and we are going to have to find a whole new set of skills to become app developers."

For Callaway, that meant getting the attention of his hero, Apple's Steve Jobs. The Apple executive knew the publisher's work. In 1983, Callaway published a book about Japanese designer Eiko Ishioka. Jobs loved the book and invited Eiko to talk with Apple employees about how to make the company's products more stylish, Callaway said.

Callaway's team worked during the summer of 2009 building their first app. Then in December, 2009, Callaway sent an iTouch with an alpha build of "Miss Spider" to Jobs, asking to be allowed to come to Cupertino to work inside Apple to get the app ready for the release date of what would become the iPad.

"He e-mailed me and he said, 'I think this is great and I have been playing it for hours,'" Callaway said of Jobs' reaction. "Having watched this change coming for 20 years, I knew this was the moment. It was now or never."

Long Time Coming

Callaway is not joking when he says he waited a long time. In the 1990s tech and Internet boom, the business world was buzzing with talk of media "convergence" and of the need for multimedia content. Volumes were filled with articles on how content was king and knowing your customer was key.

However, experts say publishers made a conscious decision in the 1990s not to get into multimedia because it brought with it new costs while not yielding the kind of returns they had imagined, and which they were still making from printed books. Now, many publishers are kicking themselves.

Callaway said he had been waiting for the devices like the iPad and Amazon Kindle for nearly 40 years, ever since a renowned computer researcher at Xerox Palo Alto Research Center wrote about a device called the DynaBook.

In 1972, pioneering Xerox PARC computer researcher Alan Kay published a paper called "A Personal Computer for Children of All Ages," which described a tablet computer so easy to use it was child's play. The device was to have a plasma screen, no moving parts, a contrast ratio approaching that of a book and the ability to buy, transfer and download files instantly. It had a target price of $500.

Kay wrote that the DynaBook would "provide us with a better 'book,' one which is active (like the child) rather than passive. It may be something with the attention grabbing power of TV, but controllable by the child rather than the networks. It can be like a piano: (a product of technology, yes), but one which can be a tool, a toy, a medium of expression, a source of unending pleasure and delight."

Kay's DynaBook concept is the basis of the "One Laptop per Child" program which is making $100 nearly indestructible computers for poor children the world over. His 1972 diagrams show a device which looks remarkably like an iPad/Kindle hybrid. It even shows how novels could be displayed on such a device and how they could be downloaded electronically from public libraries.

Nemo, Grover and Martha

It may have taken 40 years for devices like the iPad and the Kindle to make the transition from research paper to consumer products, but the impact they have had on publishing has been dramatic and fast.

Callaway was invited to Cupertino to complete the development of his first app there and "Miss Spider" was among the first apps available when the iPad was released to the public in April, 2010.

"This was the transformational moment in the history of media," Callaway said.

The numbers seem to bear out Callaway's hyperbole as the popularity of apps has taken off with lightning speed. By late January, Apple said it had sold more than 10 billion copies of 350,000 apps in the two and a half years since its App Store opened. Seven billion of those downloads were in the past year. Enhanced, interactive book apps are a small percentage of those apps, which also include everything from popular games such as Angry Birds to software allowing users to stream Netflix.

A year after the iPad was released, first among the Top 10 paid book apps is Disney's "Finding Nemo: My Puzzle Book." At No. 6 is a Sesame Street title produced by Callaway, "The Monster at the End of This Book ..." That app updates a beloved 1971 book and was published on January 7 with a price of $3.99. USA Today called it "hilarious," saying what makes it special is that kids feel as if Grover interacts directly with them. Another Callaway app, "Martha Stewart Makes Cookies," has also sold well. All told, Callaway produced more than 20 apps from August through the end of 2010. Callaway declines to say how many copies of each app he has sold and Apple does not publish such data. But making professional, interactive apps is expensive, costing anywhere from $80,000 to $600,000 depending on their complexity.

The number of potential customers for apps looks set to increase exponentially in the next few years. Research firm Forrester estimates by 2015, 82.1 million Americans will have a tablet computer, up from 10.3 million in 2010, and that most tablet owners will not be voracious readers of the traditional, text only, books so popular with Kindle owners.

When Is a Book Not a Book?

Publishing has long had a reputation as stuffy and slow. It's a business where lunches are long, with short summer Fridays so New York editors can recharge on Hamptons beaches, a business where it takes months to respond to manuscripts and more than a year to publish a book.

But in the past year, publishers have made rapid changes. They have fought with authors and agents for digital rights, negotiated with Amazon and Apple over their sales commission and are fighting libraries on the number of times e-books can be loaned.

As publishers wonder how fast they must change to remain profitable and viable, they need look no further than the music business. As music went digital in the late 1990s, the big recording companies chose to battle file-sharing upstarts like Napster in court rather than embrace the opportunity of new technology. Now, a little more than a decade later, music is commonly downloaded for free on the Internet, Apple's iTunes dominates retailing and music is typically sold by the song, not by the album.

For his part, Callaway believes publishers are fiddling while Rome burns. He has taken more drastic action. After 30 years, he has stopped publishing books. Instead, he now licenses his titles to publishers so he no longer has to print the books and be responsible for shipping and returns. He has sold his consumer products business which was selling everything from backpacks to watering cans. And now when he signs new authors it is with the notion that they will develop an interactive app first, not an old-fashioned book, and work together as partners as he did with Kirk on "Miss Spider."

He says major publishers have yet to understand the changes afoot. "They are still thinking these are books in one form or another. They are not. They may originate ... with a text book, but the finished product is not a book," he said.

Callaway is not alone in such views. Forrester analyst James McQuivey predicts that e-ink readers like the Kindle will become less important as more and more manufacturers bring out tablet computers, and that once that shift happens, books will have to become more interactive if they are to remain vital.

McQuivey said publishers will have to ask themselves, "Why are you a book publisher? You are a story creator, an experience creator. That sounds a little dreamy ... but if they don't get themselves to that place, eventually someone else will."

The void could be filled by app makers or game makers if publishers fail to adjust to changing tastes and produce apps featuring everything from videos to puzzles, McQuivey said. That dynamic leaves publishers in a bind.

"If you are a book publisher, you are asking, 'Where do I get the money to fund that? I don't have developers on staff and if I have to hire them I have to charge more for books, not less.' So, in their current business model, they don't see themselves as being in a position to change the book, so they don't want to," McQuivey said.

Like Callaway, McQuivey sees tough times ahead for publishers. "I'm not sure that most of the publishers will survive. None of them will in their existing format," he said.

McQuivey believes publishers must take three steps to survive:

* Get rid of their Dickensian costs; warehouses, distribution, shipping to stores in bulk and then taking returns and having to keep inventory straight. McQuivey estimates those costs can amount to 25-40 percent of a publisher's revenues.

* Develop a deeper understanding and relationship with customers.

* Experiment with new forms of storytelling.

Learning From Silicon Valley

Having decided to go full-steam ahead producing apps, Callaway renamed his company Callaway Digital Arts in August of 2010, taking the job of chairman and chief creative officer. Crucially, he secured a $7 million investment from top venture capital firm Kleiner, Perkins, Caufield, and Byers, which was an early backer of Google.

Integral to Callaway's vision is the belief that in the age of the tablet computer, reading text alone will no longer be enough to keep the attention of readers and that the reading experience must become more interactive.

A company that shares that philosophy is DMC Worldwide, a privately held New York firm with four decades of history in successful startups. Their latest venture is Copia Interactive, which is billed as the first social e-reading experience.

"We think there is space around the book for community to grow," says Seth Kaufman, Copia's vice president of marketing and merchandising, as he shows off the company's e-commerce platform at his Madison Avenue office.

At the website, www.thecopia.com, which is still in beta, users can buy books but they can also interact with each other and annotate books, publishing their comments and reactions. For example, one reader of a cookbook might suggest that a recipe would benefit from less onions and more garlic, an academic who has written a book on Japan's economy could update her book to reflect recent developments and students could share study notes.

When Kaufman explains Copia to publishers, he likes to tell them, "There are many friends I have who would never buy a Sarah Palin book, but if Jon Stewart annotated Sarah Palin's book they might buy that book."

The company has recently signed a deal to build a web store for The Collegiate Retail Alliance, a coalition of more than 50 U.S. independent college stores, and will also partner with mom and pop bookstores to build online stores for them.

Copia is among the companies hoping to take advantage of a possible cultural backlash against the firms which dominate the digital media landscape -- Google, Apple, Microsoft and Amazon. "We are the anti-Amazon," Kaufman said.

Show Me The Money

Writers too are experimenting in ways that challenge the traditional importance of the big publishers.

In January, top author Jodi Picoult's "Leaving Home" was released as a Kindle Single, a brief 43-page book of three short pieces, published by her literary agent. Others such as paranormal romance author Amanda Hocking have made millions on Amazon selling self-published short e-books at low prices without a publisher.

All this comes as sales have largely shifted from brick and mortar stores to online stores, forever changing the economic assumptions of publishing. Forrester's McQuivey forecasts e-books will fall to a price of about $7, down from $10-13. The price and the profit margin are increasingly important since e-books now sell more than hard covers.

In January, monthly e-book sales more than doubled from the same month a year earlier, rising 116 percent to $69.9 million, according to the Association of American Publishers. That topped sales of hardcover books, which fell 11 percent from January 2010 to $49.1 million. Overall book sales were down slightly, notching monthly sales of $805.7 million, a 1.9 percent fall from a year earlier.

If McQuivey is right and e-book prices settle around $7, that will cut publishers' gross margin per book by roughly 30 percent compared to what they have been used to. (Graphic: r.reuters.com/run78r ) Despite publishers charging higher prices for top titles, such as the $12.99 price on Keith Richards' memoir "Life," the laws of supply and demand will pressure prices as more authors self-publish and smaller producers slash prices to compete.

Either/Or Choice

That leaves publishers with a tough choice. They only have enough money to pay for their old-fashioned book distribution infrastructure or to develop enhanced content -- enough to keep up the old business or develop the new business.

Trying to do both could be a recipe for failure.

Making matters worse, publishers have long enjoyed a steady profit from their academic textbook business. But, McQuivey said, once that business goes digital too in the coming years, "It will mean billions of dollars of destruction."

Walking through Callaway's office shows he is no longer trying to do the old and the new. Indeed, two large areas of his offices have plenty of empty desks where some old-fashioned book editors and the people who once ran his "Sunny Patch" consumer product line used to sit. He intends to fill those desks in the coming months with more app developers.

Callaway says now his new authors will all start out with creating enhanced, interactive book apps. Paper books, movies and other things can come later if the app is a hit. In his office, employees are working on apps for home guru Martha Stewart -- one on Cocktails, another on Smoothies and a third on Power Foods. Others are making apps for Thomas the Tank Engine and Angelina Ballerina -- favorites among the preschool set. He said other deals are in the works.

Despite his small staff -- about 30 youthful employees in New York and plans to add that same number in Silicon Valley by year end -- he is not worried that the big publishing houses will eat his lunch.

"They don't understand the new medium, they don't have the rights, they don't know how to create the product and they don't know how to get it out to the world," he said, laughing. "Is there anything else?"

Some publishers, however, have shown an awareness of the need to adapt. Many have made some key hires from outside of traditional publishing. Bertelsmann's Random House, the world's No. 1 publisher, hired Markus Dohle in 2008 as chairman and chief executive. The German national is more businessman than editor and had a background in printing. Leading independent publisher W.W. Norton, known for its stable of strong editors, last summer hired a former MTV executive, Peter Kay, as head of digital marketing and strategy. And when you ask media executives which company is doing well in digital publishing, they often mention HarperCollins which has a chief digital officer, Charlie Redmayne. He got his start running a British Internet site for teenagers.

The Big Boys

Hiring Redmayne was part of a deliberate effort at HarperCollins to innovate in the digital medium. The publisher, owned by Rupert Murdoch's media behemoth News Corporation, is home to authors ranging from Charles Dickens to Agatha Christie, C.S. Lewis, J.R.R. Tolkien and Sarah Palin as well as children's books such as "Fancy Nancy."

"As we go forward a higher and higher proportion of sales will be digital," Redmayne said in an interview at his midtown Manhattan office.

HarperCollins has been strong in the digital shift. One high-profile example was the huge hit it had with e-book sales of "Sh*t My Dad Says," by down-on-his-luck comedy writer Justin Halpern, which began as a Twitter feed and became a network TV sitcom.

Redmayne said his team is experimenting as they find their way both with content and marketing. One sales trick is to release older titles by midlist authors as free e-books ahead of publishing a new title to build a loyal audience. He said fiction has been selling very well on Amazon's Kindle, a device favored by heavy book readers, while non-fiction has fared better in the iBook store where books are bought by iPad users, who more typically are male and rediscovering reading.

Like Callaway, he expects the medium to change.

"Where we are with e-books is using the old media in the new medium," Redmayne said. "We are now beginning to see the next stage which is reading experiences that are truly different."

Redmayne said the challenge is to create enhanced content for which he can charge higher prices. For example, on a political book HarperCollins could add video footage from Fox or on a children's book you can add games and videos.

Fiction, he said, is more challenging because the form itself is about "the skill of the author to create this imaginary world in your mind's eye." Adult fiction, however, accounts for only around three in 10 of the books sold in the United States, and most other genres have potential for app treatment.

Redmayne gets fired up when he opens his iPad to show off his app collection. He bring ups Oliver Jeffers "Heart and the Bottle," narrated by Helena Bonham Carter, moving the characters about the screen as if he were a kid. He said the "SAS Survival Guide" was a great success, noting the $6.99 survivalist app updated a more-than-20-year-old book and has sold more than 150,000 units. Opening a $4.99 cookbook app by Irish chef Rachel Allen, he showed how a baker following a recipe with flour on his hands could turn the page by simply clapping. While such apps are expensive to develop, he said, once he has a template made for one cookbook he can drop in content from another chef such as Gordon Ramsay, thereby spreading his costs over multiple titles.

For Redmayne, the shift means publishers have more products to sell in more venues. But he cautioned that with profit margins on e-books likely to drop below what was the margin on hard covers, the only way for publishers to thrive is to develop content that encourages customers to spend more money.

"We do that by taking the functionality that these new devices give us to create a more rounded experience than just a book, a book-plus. We have to increase value," he said.

David Helps Goliath

Redmayne said that much of the development work to create the best apps is being done with smaller app makers who will share in the revenue of the projects they work on. He doesn't see the coming change so much as a David vs. Goliath confrontation, but rather a David helps Goliath collaboration.

One such collaborative app is the Good News Bible, published by HarperCollins and made by Indian developer Trellisys. It has features such as pen pix of key biblical figures, a who's who, timelines, maps of what happened where and a dial that will take the reader to any verse. The app has a lite $1.99 version and a full $6.99 edition. The text was produced by HarperCollins editors in Manhattan, the software code written in Bangalore.

As publishers wake up to having to develop relationships with app makers, Callaway says most weeks he is approached by prospective buyers who want to take over his company. He said he tells them all the same thing: "We are not interested at this point in selling."

So who are the best app makers?

Without missing a beat, Redmayne opens a favorite app on his iPad. "This one was done by a guy called Nick Callaway," he said. "This is called 'Miss Spider's Tea Party' and it is a really beautiful proposition."

As the industry rapidly changes, Redmayne said the losers will be the publishers who don't hire the right people and develop strong relationships with app makers.

And who will be the winners? "You will see people like us doing it, I think we are doing it well and we will do it better," Redmayne said, closing his iPad cover. "And then you will see a tiny little packager like Nick Callaway doing it really well."

If Callaway does build his company into a big player, he would not be the first in his family to do so. His late father, Ely Reeves Callaway Jr., started Callaway Golf in 1982, an outfit now known worldwide for its Big Bertha driver. "He taught me to always try and look at things from a new, unconventional perspective," Callaway said.

And if his father's wisdom counts, the hard work may already be behind Callaway.

"I believe that the heart of a successful business is the creation of improved products -- that's the hard part," Ely Callaway said in a 1991 interview.

(Editing by Claudia Parsons)
http://www.reuters.com/article/2011/...7302Z020110401





Ruling Spurs Effort to Form Digital Public Library
Miguel Helft

Is the tantalizing dream of a universal library dead?

Some scholars and librarians across the country fear it may be, now that a federal judge in New York has derailed Google’s bold plan to build the world’s largest digital library and bookstore. With 15 million books scanned, Google had gotten closer to the elusive goal than anyone else.

“It is quite disappointing because there isn’t something better in the wings,” said Michael A. Keller, the university librarian at Stanford, one of the first major universities to allow Google to scan its collections.

But others, who were troubled by Google’s plan, have hailed the ruling. They see it as an opportunity to bring new urgency to a project to create a universal public library — one that, they say, would be far superior to Google’s because it would not be commercial. The project’s ambitious mission, recently described in a four-page memorandum, is to “make the cultural and scientific heritage of humanity available, free of charge, to all.”

“People feel energized,” said Robert Darnton, the director of the Harvard University Library, who recently praised the project in an opinion article in The New York Times. “This is an opportunity for those of us who care about creating a noncommercial public digital library to get on with it.”

The lofty effort, the Digital Public Library of America, counts a long list of heavyweights among its supporters, including librarians from major universities and officials from the National Archives and the Library of Congress. Some of the nation’s largest philanthropic foundations have said they were interested in financing the project, though its total cost has not been determined.

The various backers of the library, and a number of interested parties, met in October at Harvard’s Berkman Center for Internet and Society, which is coordinating the project. Representatives from technology companies like Google and Apple attended.

But the endeavor remains in its infancy. The group has many champions — Mr. Darnton is the best-known and most vocal — but it has no formal structure other than a steering committee. It has formed six working groups to study the project’s scope, financing, governance, legal hurdles, technical issues and audience.

“Everyone who is at the table has a different idea of audience, scope, content and governance,” said David S. Ferriero, the archivist of the United States, who backs the project and attended the October meeting. “All those issues need to be worked through.”

Mr. Keller, a member of the committee, said the project “is coming late to the party.”

“It is still trying to figure out what it is and who it is,” he said. “There is no practical plan for getting it started.”

The project is playing catch up not only to Google, but also to Europe, where several countries have proceeded with large digitization projects. The European Commission has backed Europeana, a Web site where users can search for digital copies of 15 million works of art, books, music and video held by the cultural institutions of member countries.

Europeana is serving as something of a model for the noncommercial project in the United States. American institutions like the Library of Congress, public and private universities and nonprofit organizations like the Internet Archive have already scanned millions of books and hundreds of millions of documents. The challenge now is not only to continue and expand various digitization projects, but also to unify them in a single, searchable electronic portal. But unlike in Europe, where national libraries are usually centralized and backed by governments, the United States has a disparate network of independent institutions that have different missions and serve different populations.

“We don’t have a central funding source and a central authority,” said Deanna Marcum, associate librarian for library services at the Library of Congress, another member of the steering committee. “We have many different kinds of institutions and many different funding streams.”

These challenges put in sharp relief the main difference between the digital public library and Google’s project: speed.

The idea of scanning every book ever published captivated Larry Page, co-founder of Google, even before he started the company. In 2002, he set out to refute skeptics, who said the idea was unworkable. He set up a makeshift scanning device at Google to see how many books could be scanned in an hour.

The first book he scanned was “The Google Book,” an illustrated children’s story by V. C. Vickers, according to “In the Plex,” a new book about Google by Steven Levy. Eight years later, Google has digitized 15 million books.

The company’s original idea was to make books searchable online, but only to show snippets of books protected by copyright. After groups representing authors and publishers sued Google, charging copyright infringement in 2005, Google, and the authors and publishers, saw an opportunity to embark on a far more ambitious project — a universal digital library and bookstore. Plans for it were laid out in a sweeping settlement that the parties announced in fall 2008.

Under the settlement, every public library in the United States could have offered its patrons free access to the full texts of the entire collection from one computer terminal in their facilities. (Google would have been allowed to sell access to individual books and the entire collection in various ways, sharing proceeds with authors and publishers.)

For those who believed in expanding access to the world’s cultural heritage, there was plenty to like.

“You have to give Google a lot of credit,” said Doron Weber, program director at the Alfred P. Sloan Foundation, an early financial backer of the Digital Public Library of America. “Google got everyone’s attention.”

But the settlement was rejected in federal court last month, in part because it turned copyright law on its head, giving Google the right to profit from a book unless its author or publisher objected. This was a particular problem for “orphan books,” out of print titles whose authors and publishers cannot be easily found. Since no one else would be able to obtain a license to those books, Google would have a de facto monopoly on millions of texts.

The digital public library will face the same problem.

“I think the biggest obstacle is copyright,” said Pamela Samuelson, a professor of law and information management at the University of California, Berkeley who opposed the settlement and is working on legal issues facing the digital public library.

Backers of the project say they will lobby Congress for legislation that would make it easier to provide access to orphan books. Meanwhile, others are chipping away at the millions of orphans, trying to find rights holders and to determine which books have fallen into the public domain.

Google has vowed to support orphan works legislation. Digital public library backers hope it will help their efforts further, by lending some of its digital archives.

Google appeared cagey about that possibility. “We will continue to stay engaged and try to be supportive,” said Daniel Clancy, engineering director at Google.

The digital public library’s steering committee hopes to have a working prototype in 18 months. “This is a widely ambitious enterprise and it may well fail,” said John Palfrey, a professor at the Harvard Law School who is chairman of the committee. “But it is worth the effort.”
https://www.nytimes.com/2011/04/04/t...04library.html





Comodo Hack May Reshape Browser Security
Declan McCullagh

Major browser makers are beginning to revisit how they handle Web authentication after last month's breach that allowed a hacker to impersonate sites including Google.com, Yahoo.com, and Skype.com.

The efforts are designed to remedy flaws in the odd way Web security is currently handled. Currently, everyone from the Tunisian government to a wireless carrier in the United Arab Emirates that implanted spyware on customers' BlackBerry devices and scores of German colleges are trusted to issue digital certificates for the largest and most popular sites on the Internet.

Microsoft's manager for trustworthy computing, Bruce Cowper, told CNET that the company is "investigating mechanisms to help better secure" certificate authorities, which issue trusted digital certificates used to encrypt Web browsing, against this type of attack.

On Friday, Ben Laurie, a member of Google's security team, said the Mountain View, Calif., company is "thinking" about ways to upgrade Chrome to highlight possibly fraudulent certificates that "should be treated with suspicion."

If the technology were widely adopted and glued into major browsers, that would have made last month's Comodo breach a non-event. The Jersey City, N.J.-based company announced on March 23 that an intruder it traced to Iran compromised a reseller's network and obtained fraudulent certificates for major Web sites including ones operated by Google and Microsoft. The FBI is investigating.

Comodo alerted Web browser makers, which immediately scrambled to devise ways to revoke the fraudulent certificates. There's no evidence the certificates were misused.

Peter Eckersley, a senior staff technologist at the Electronic Frontier Foundation who has compiled a database of public Web certificates, says one way to improve security is to allow each Web site to announce what certificate provider it's using.

Each browser trusts as many as 321 certificate authorities equally, a security nightmare that allows any of them to publish fake certificates for, say, Google.com. It's as if hundreds of superintendents in New York City had the master keys to every unit in every apartment building--as opposed to the normal practice of one master key per each superintendent.

Eckersley says browsers should be developing "a way for each domain name holder to persistently specify its own private certificate authority if it wishes to." Once that is established, "mistakes at any one of thousands of other organizations would no longer give hackers a magic key to your systems," he says.

Securing domain names with a technology called DNSSEC will also play a "large" role, he says. Other long-term technical fixes that have been proposed have names like DANE, HASTLS, CAA (Comodo's Philip Hallam-Baker is a co-author), and Monkeysphere.

Comodo's revelations have highlighted the flaws of the current system. There is no automated process to revoke fraudulent certificates. There is no public list of certificates that companies like Comodo have issued, or even which of its resellers or partners have been given a duplicate set of the master keys. There are no mechanisms to prevent fraudulent certificates for Yahoo Mail or Gmail from being issued by compromised companies, or repressive regimes bent on surveillance, some of which have their own certificate authorities.

The Internet death penalty

Another option would invoke the Internet death penalty: revoking Comodo's status as a trusted source of digital certificates. Each major browser has a different list of which certificate authorities are trusted, and Comodo appears on all of them. (See related CNET article and spreadsheet.)

Mozilla says in a Web page that it is "interested in more detailed impact assessments" of how the death penalty applied to Comodo--an unprecedented punishment--would work in practice.

Cowper declined to provide details about whether a similar step is being considered for Internet Explorer: "Microsoft will not discuss any decision about Comodo's membership in the Windows Root Certificate Program." He added: "Microsoft is in ongoing discussions with Comodo regarding this incident. After completing this review and evaluating the appropriate mitigation steps, Microsoft will ensure that Comodo and other (certificate authorities) comply with any updated program requirements."

Microsoft already requires that certificate authorities submit "complete a qualified audit and submit the audit report" every 12 months. So does Mozilla.

Google's Chrome browser relies on the list of trusted certificates compiled by Microsoft and, under OS X, Apple. "We haven't deviated from the default lists, nor do we have current plans to," a Google spokesman says. Apple did not respond to a request for comment.

Melih Abdulhayoglu, Comodo's founder and chief executive, says that security has been tightened as a result of the breach in an Italian partner's network.

"There is no 100 percent security," Abdulhayoglu added. He said that "any large" issuer of digital certificates is susceptible to concerted attacks. "VeriSign and Comodo, we've both had issues."

Norway-based Opera Software, maker of the eponymous Web browser, is considering a "move towards stricter requirements regarding having revocation information available before allowing a secure connection to complete."

Opera's Yngve Pettersen wrote in a blog post last Thursday that such a requirement would make it easier to revoke certificates that were issued fraudulently.
http://news.cnet.com/8301-31921_3-20050255-281.html





The Problem of Issuing Certs For Unqualified Names
Dennis Fisher

The recent attack on Comodo and several of its associated registration authorities has spurred quite a bit of re-examination of the way that the Web's certificate authority infrastructure works--or doesn't. One interesting result of this work is that the folks at the Electronic Frontier Foundation have discovered that there are tens of thousands of legitimate certificates issued by CAs for unqualified names such as "localhost" or "Exchange," a practice that could simplify some forms of man-in-the-middle attacks.

The data that the EFF analyzed came from the group's SSL Observatory database, which compiles information on all of the certificates used on the Web. After looking through the database, Chris Palmer of the EFF discovered that CAs have issued more than 37,000 legitimate, signed certificates for names that are commonly used to identify machines on local corporate networks. In some environments users will often just type the name of an internal resource into their browsers in order to access it.

"In the Observatory we have discovered many examples of CA-signed certificates unqualified domain names. In fact, the most common unqualified name is 'localhost', which always refers to your own computer! It simply makes no sense for a public CA to sign a certificate for this private name. Some CAs have signed many, many certificates for this name, which indicates that they do not even keep track of which names they have signed. Some other CAs do make sure to sign 'localhost' only once. Cold comfort!" Palmer, the technology director of the EFF, wrote in an analysis of the certificate data.

"Although signing 'localhost' is humorous, CAs create real risk when they sign other unqualified names. What if an attacker were able to receive a CA-signed certificate for names like 'mail' or 'webmail'? Such an attacker would be able to perfectly forge the identity of your organization’s webmail server in a 'man-in-the-middle' attack! Everything would look normal: your browser would use HTTPS, it would show a the lock icon that indicates HTTPS is working properly, it would show that a real CA validated the HTTPS certificate, and it would raise no security warnings. And yet, you would be giving your password and your email contents to the attacker."

What the EFF found is that the data in their SSL Observatory showed a total of 2,201 certificates signed for the name "localhost", and more than 8,000 certificates for some variation of "exchange" or "exch." This isn't a problem anywhere close to the level of the Comodo RAs being compromised, but as Palmer said, it's something that needs to be addressed, especially now that there is a renewed focus on the workings of the CA infrastructure.

"Certificate authorities should stop signing unqualified names, and should revoke existing certificates for unqualified names. They should also stop signing IP addresses — especially private, non-routable addresses — and should revoke existing IP address certificates, too," Palmer wrote.
https://threatpost.com/en_us/blogs/p...d-names-040611





More Customers Exposed as Big Data Breach Grows
Jonathan Spicer and Maria Aspan

The names and e-mails of customers of Citigroup Inc and other large U.S. companies, as well as College Board students, were exposed in a massive and growing data breach after a computer hacker penetrated online marketer Epsilon.

In what could be one of the biggest such breaches in U.S. history, a diverse swath of companies that did business with Epsilon stepped forward over the weekend to warn customers some of their electronic information could have been exposed.

Drugstore Walgreen, Video recorder TiVo Inc, credit card lender Capital One Financial Corp and teleshopping company HSN Inc all added their names to a list of targets that also includes some of the nation's largest banks.

The names and electronic contacts of some students affiliated with the U.S.-based College Board -- which represents some 5,900 colleges, universities and schools -- were also potentially compromised.

No personal financial information such as credit cards or social security numbers appeared to be exposed, according to the company statements and e-mails to customers.

Epsilon, an online marketing unit of Alliance Data Systems Corp, said on Friday that a person outside the company hacked into some of its clients' customer files. The vendor sends more than 40 billion e-mail ads and offers annually, usually to people who register for a company's website or who give their e-mail addresses while shopping.

"We learned from our e-mail provider, Epsilon, that limited information about you was accessed by an unauthorized individual or individuals," HSN, also an e-commerce operator, said in an e-mail to customers on Sunday.

"This information included your name and e-mail address and did not include any financial or other sensitive information. We felt it was important to notify you of this incident as soon as possible."

Citigroup customer names and some credit card customers' e-mail addresses -- but no account information -- were part of the data breach, the third-largest U.S. bank said on Saturday.

The College Board, which administers the SAT admissions tests, on Saturday warned students about the breach and asked them to be cautious about receiving "links or attachments from unknown third parties," according to two e-mails reviewed by Reuters.

The not-for-profit organization is in contact with more than 7 million students, according to its website. It did not immediately return calls for comment.

Probing For Answers

Law enforcement authorities are investigating the breach, though it was unclear on Sunday how many customers or students had been exposed. Epsilon is also looking into what went wrong.

"While we are cooperating with authorities and doing a thorough investigation, we cannot say anything else," said Epsilon spokeswoman Jessica Simon. "We can't confirm any impacted or non-impacted clients, or provide a list (of companies) at this point in time."

Capital One, which also runs a bank, and Walgreens, the largest U.S. drugstore, said the Epsilon hacker accessed its customer e-mail addresses, but no personally identifiable information.

TiVo, a maker of digital video recorders, said the information that was obtained was limited to e-mail addresses and clients' first names.

The incident comes three years after hackers penetrated Heartland Payment Systems, a credit and debit card processor, in one of the biggest identity-theft cases in U.S. history.

In that case, notorious hacker Albert Gonzalez led a ring that stole more than 40 million payment card numbers, and was later sentenced to 20 years in prison.

On Friday, JPMorgan Chase & Co, the second-largest U.S. bank, and Kroger Co, the biggest U.S. supermarket operator, said that some customers were exposed as part of the Epsilon data breach.

Citigroup announced that it had been affected on Saturday evening. Spokesman Sean Kevelighan said the bank started informing its customers of the breach on Friday through a link on its website.

Some of Epsilon's other clients include Verizon Communications Inc, Blackstone Group LP's Hilton Hotels, Kraft Foods Inc, and AstraZeneca.

(Reporting by Jonathan Spicer and Maria Aspan, editing by Maureen Bavdek, Diane Craft and Gunna Dickson.)
http://www.reuters.com/article/2011/...7321PI20110404





Yahoo! Liable for Searchable Contents!

The Court of Rome has issued a decision on the liability of search engines that will lead to considerable discussions.

PFA Films S.r.l., as exclusive licensee of exploitation rights on the movie “About Elly” of the director Asghar Farhadi, brough an interim injunction before the Court of Rome against Google Italy S.r.l., Yahoo! Italia S.r.l. and Microsoft S.r.l. (as owner of the search engine Bing) because of the breach of their IPRs through links to websites allowing the streaming view, or the downloading or P2P of the movie without PFA’s consent.

The court dismissed the case in relation to Google Italy S.r.l. and Microsoft S.r.l. because the Italian companies of such groups did not have an active role in the management of the search engines. On the contrary, the court surprisingly deemed that:

• Yahoo! in the management of the search engine is a caching provider for the purposes of the E-Commerce Directive 2000/31/EC;
• Yahoo! was notified of the breach by PFA; and
• the lack of removal of the links to the movie by Yahoo! following the notification of the breach made Yahoo! contributory liable for it.

As a consequence of the above, the court ordered to Yahoo! the removal of any link to the unlawful copies of the movie!

The decision is interesting for 2 main reasons:

• this approach might oblige search engines to remove the access to contents following a mere notice from the alleged right holder; and
• it extends the removal obligation not only to the links to the websites providing the unlawful contents, but also to other websites performing lawful activities, but containing links to such unlawful websites.

What will be the future for the liability regime of Internet Service Providers in Italy? The interest for the upcoming results of the consultation from the Italian Telecom Authority on the matter is increasing more and more after this decision.
http://blog.dlapiper.com/IPTitaly/en...hable_contents





Appeals Court Strengthens Warrantless Searches at Border
David Kravets

The authorities may seize laptops, cameras and other digital devices at the U.S. border without a warrant, and scour through them for days hundreds of miles away, a federal appeals court ruled.

The 2-1 decision (.pdf) Wednesday by the 9th U.S. Circuit Court of Appeals comes as the government is increasingly invoking its broad, warrantless search-and-seizure powers at the U.S. border to probe the digital lives of travelers.

Under the “border search exception” of United States law, international travelers, including U.S. citizens, can be searched without a warrant as they enter the country. Under the Obama administration, law enforcement agents have aggressively used this power to search travelers’ laptops, sometimes copying the hard drive before returning the computer to its owner.

Courts have ruled that such laptop searches can take place even in the absence of any reasonable suspicion of wrongdoing, and more than 6,500 persons have had their electronic devices searched in this manner since October 2008.

The issue has gained renewed attention in recent months as American computer geeks connected to WikiLeaks, or who know people connected with WikiLeaks, have found themselves repeatedly singled out for the searches.

At issue in the case decided Wednesday was the prosecution of a California man on child pornography charges. In 2007, ICE agents seized three laptops and a camera from convicted child molester Howard Cotterman, and transported them 170 miles away for a two-day search that uncovered hundreds of child porn images.

A lower court judge threw out the evidence, finding that the border exception did not apply when the search went beyond the border area.

The government appealed. Cotterman’s lawyers argued that law enforcement should only be allowed to search digital devices at points of entry where they have the necessary equipment and personnel on hand.

“We find this position simply untenable,” 9th Circuit Judge Richard Tallman wrote for the majority, reinstating the evidence. Limiting searches “would only reward those individuals who, either because of the nature of their contraband or the sophistication of their criminal enterprise, hide their contraband more cleverly or would be inclined to seek entry at more vulnerable points less equipped to discover them.”

The court also affirmed that “particularized suspicion” was not required for a border search.

In dissent, Judge Betty Fletcher wrote that the government should have had a better reason to search Cotterman other than him being a convicted in 1992 of child molestation.

“I add my voice to the chorus lamenting the apparent demise of the Fourth Amendment,” Fletcher wrote.
http://www.wired.com/threatlevel/2011/04/border-search/





Net Giants Challenge French Data Law

The French government wants access to a range of data stored by Google, eBay and others
BBC

Google and Facebook are among a group of net heavyweights taking the French government to court this week.

The legal challenge has been brought by The French Association of Internet Community Services (ASIC) and relates to government plans to keep web users' personal data for a year.

The case will be heard by the State Council, France's highest judicial body.

More than 20 firms are involved, including eBay and Dailymotion.

The law obliges a range of e-commerce sites, video and music services and webmail providers to keep a host of data on customers.

This includes users' full names, postal addresses, telephone numbers and passwords. The data must be handed over to the authorities if demanded.

Police, the fraud office, customs, tax and social security bodies will all have the right of access.

ASIC head Benoit Tabaka believes that the data law is unnecessarily draconian. "Several elements are problematic," he said.

"For instance, there was no consultation with the European Commission. Our companies are based in several European countries.

"Our activities target many national markets, so it is clear that we need a common approach," said Mr Tabaka.

ASIC also thinks that passwords should not be collected and warned that retaining them could have security implications.

"This is a shocking measure," added Mr Tabaka.

The main aim of the legal challenge, which will be launched later this week, is to see the law cancelled.
Privacy record

Both Facebook and Google have run into privacy-related problems in the past.

Facebook was forced to overhaul its privacy settings following criticism that they were too complex.

Google was criticised for lack of privacy in its Buzz social network, which it linked to Gmail accounts without seeking prior permission from users.

The search giant eventually agreed to submit to annual privacy audits as part of a settlement reached over the controversy.

France took tough action against Google when it accidentally collected personal data during the setting up of its Street View service.

The French privacy watchdog, CNIL, was one of the only bodies to fine the company. The £87,000 fine was the largest ever handed out by CNIL.
http://www.bbc.co.uk/news/technology-12983734





Pandora Mobile App Transmits Gobs Of Personal Data
Paul Roberts

Pandora AndroidA popular free mobile application from online music service Pandora.com that is the subject of a Grand Jury investigation into loose data privacy practices in the mobile application market confirms that the application silently sends reams of sensitive data to advertisers.

The analysis was conducted by application security firm Veracode and found that Pandora's free mobile application for Android phones tracked and submitted a range of data, including the user's gender, geographic location and the unique ID of their phone, according to an entry on Veracode's blog.

The company's analysis followed reports in the Wall Street Journal that a Federal Grand Jury in New Jersey had subpeona'd the company, and other mobile application vendors, in an inquiry over the illegal transmission of personal data.
Pandora's free application for Android allows users of the free online music streaming service to listen to it from their phone. The application has been installed more than 10 million times, according to statistics on Google's Android Market.

That free service comes at a price, Veracode found. Researchers who took apart the application and studied its code found libraries for five different ad networks embedded in the Pandora application. Those libraries collected and trasmitted a variety of different data from the Android phone and its owner. The data included both the owner's GPS location and tidbits the owners gender, birthday and postal code information. There was evidence that the app attempted to provide continuous location monitoring - which would tell advertisers not just where the user accessed the application from, but also allow them to track that user's movement over time.

Data was transmitted to a variety of third party advertisers, including ComScore, though its not clear that Pandora.com was aware of what kind of data was being accessed and transmitted, wrote Veracode analyst Tyler Shields.

The conclusion? "Your personal information is being transmitted to advertising agencies in mass quantities," Shields wrote. While some of that information is innocuous, it becomes very valuable when compiled into user profiles that provide "significant insight into a person's life," Shields wrote.

While Pandora's name was the only one named in the Wall Street Journal report, it is believed that other mobile application vendors have been subpeona'd in the inquiry as well. The Journal has brought to light privacy failures on behalf of Web-based and mobile applications before. In October, 2010, they called attention to loose security practices among Facebook applications, including the transmission of personal identifying information.
https://threatpost.com/en_us/blogs/p...al-data-040611





Internet Probe Can Track You Down to Within 690 Metres
Jacob Aron

Online adverts could soon start stalking you. A new way of working out where you are by looking at your internet connection could pin down your current location to within a few hundred metres.

Similar techniques are already in use, but they are much less accurate. Every computer connected to the web has an internet protocol (IP) address, but there is no simple way to map this to a physical location. The current best system can be out by as much as 35 kilometres.

Now, Yong Wang, a computer scientist at the University of Electronic Science and Technology of China in Chengdu, and colleagues at Northwestern University in Evanston, Illinois, have used businesses and universities as landmarks to achieve much higher accuracy.

These organisations often host their websites on servers kept on their premises, meaning the servers' IP addresses are tied to their physical location. Wang's team used Google Maps to find both the web and physical addresses of such organisations, providing them with around 76,000 landmarks. By comparison, most other geolocation methods only use a few hundred landmarks specifically set up for the purpose.

Closing in

The new method zooms in through three stages to locate a target computer. The first stage measures the time it takes to send a data packet to the target and converts it into a distance – a common geolocation technique that narrows the target's possible location to a radius of around 200 kilometres.

Wang and colleagues then send data packets to the known Google Maps landmark servers in this large area to find which routers they pass through. When a landmark machine and the target computer have shared a router, the researchers can compare how long a packet takes to reach each machine from the router; converted into an estimate of distance, this time difference narrows the search down further. "We shrink the size of the area where the target potentially is," explains Wang.

Finally, they repeat the landmark search at this more fine-grained level: comparing delay times once more, they establish which landmark server is closest to the target. The result can never be entirely accurate, but it's much better than trying to determine a location by converting the initial delay into a distance or the next best IP-based method. On average their method gets to within 690 metres of the target and can be as close as 100 metres – good enough to identify the target computer's location to within a few streets.

Client independent

That kind of accuracy normally requires people to deliberately disclose their location, but Wang's method works without the user's permission. "This is a client-independent method," as he puts it. "The client does not need to approve anything."

You can avoid any geolocation method by routing traffic through a proxy server, which makes you appear to be elsewhere. Wang can't get around this, but says he can detect proxies and so he can at least return a null result rather than a false positive.

Although Wang's method could potentially allow adverts to target a certain street, advertisers may prefer to retain broader messages. "The majority of brands wouldn't necessarily want to go to that much granularity," says Jack Wallington at the Internet Advertising Bureau in London. He says the method could be useful in certain situations, however, such as targeting hungry office workers with vouchers for nearby takeaway food outlets.

Wang presented the research last week at the Usenix Symposium on Networked Systems Design and Implementation in Boston.
http://www.newscientist.com/article/...90-metres.html





Wozniak: Tablet is the PC for 'Normal People'

The iPad is what Apple was after from the start, the company's co-founder said
Stephen Lawson

Tablets are the culmination of what Steve Jobs wanted to create at Apple from the beginning, Apple co-founder Steve Wozniak said Monday.

During a keynote session at Storage Networking World in Santa Clara, Calif., Wozniak was asked how tablets would change the computer industry. He compared them to TVs.

"The tablet is not necessarily for the people in this room," Wozniak told the audience of enterprise storage engineers. "It's for the normal people in the world," Wozniak said.

"I think Steve Jobs had that intention from the day we started Apple, but it was just hard to get there, because we had to go through a lot of steps where you connected to things, and (eventually) computers grew up to where they could do ... normal consumer appliance things," Wozniak said.

The garrulous Silicon Valley legend, who hasn't worked full time at Apple since the 1980s and is now chief scientist at solid-state storage vendor Fusion-io, did toss out a competitive comment about the market.

"On the subject of tablets, I read today that Android tablets are expected to surpass iPads, and I hope that never happens," Wozniak said.

As usual, Wozniak's speech barely touched on his current job, though he said he accepted the invitation to join Fusion-io because he admired its approach to innovation. Instead, he regaled the audience with tales of his Apple days and his thoughts on education, which he believes should treat math and science more like English. Instead of only rewarding the one right answer, schools should encourage new ways of thinking about those subjects, he said.

Asked why he left Apple, Wozniak said he and Jobs never had a falling out.

"We've never had an argument," he said. "We're just in different places, and we're different people." Jobs was interested in running a company, while Wozniak was and remains an engineer at heart.
http://www.networkworld.com/news/201...is-the-pc.html





Anonymous Splinter Group Targeting Sony Employees
Leslie Horn

In a coordinated campaign of denial of service attacks called "OpSony," hacktivist group Anonymous has already started attacking Sony Web sites in retaliation for Sony's lawsuits against PlayStation 3 hackers. Now an Anonymous offshoot that calls itself "SonyRecon" has taken the attacks to the next level, targeting individual Sony employees.

After uncovering information from an OpSony message board, PlayStation Lifestyle revealed that these hackers are working together to gather personal information about "useful targets," including names, telephone numbers, home addresses, email, IP addresses, information about relatives, and more in order to harm these people, likely through fraud.

Sony employees could be attacked in many different ways. Some of the methods are as benign as prank calls to the target on Skype or sending them a large number of empty UPS boxes, but others are more serious. SonyRecon prompts hackers to post ads in the erotic services section of Craigslist or calling an AIDS hotline and asking for positive results for an HIV test to be delivered to the target.

According to PlayStation Lifestyle, SonyRecon's efforts have only started to heat up. However, the site confirmed that the group has already obtained the personal information of Sony employees and their families. In fact, a post on the message board also showed that SonyRecon is specifically looking for information on Sony CEO Howard Stringer and his family.

On Monday, Anonymous took on several Sony sites and rendered the PlayStation Network (PSN) inaccessible for most of the day. On Twitter, PlayStation would not confirm the attacks, but instead said that PSN was undergoing "sporadic maintenance."

At the beginning of the year Sony sued George "GeoHot" Hotz, 23, and Alexander "graf_chokolo" Egorenkov for tinkering with the PlayStation 3 and publishing online their exploits. Sony's actions grabbed the attention of Anonymous, a group known for targeting companies it feels are against rights-free content.

Sony sued Hotz in January for exposing the root key to a PS3, allowing users to develop and play homebrew games. In late February, German police raided the home of Egorenkov, who is best known for reverse-engineering the PS3 and researching security loopholes in the console. Sony later sued Egorenkov for one million euros ($1.4 million) for publishing the findings of his research, known as the "Hypervisor Bible," online.

Using DDoS attacks, Anonymous has previously taken on such targets as Broadcast Music International, former HBGary CEO Aaron Barr, Visa, Mastercard and PayPal, the Recording Industry Association of America, the U.S. Copyright Office, and the Motion Picture Association of America.

It's not a matter of if, but rather a question of who will Anonymous attack next? Last week the group suggested that it might soon target Warner Bros. for its involvement in a trillion-dollar lawsuit against LimeWire.

If you want to know more about Anonymous, see PCMag's analysis of how the movement was born.
http://www.pcmag.com/article2/0,2817,2383087,00.asp





That ’80s Moment When Nothing and (Almost) Everything Mattered
A. O. Scott

Céline Danhier’s “Blank City” uses conventional documentary methods — talking-head reminiscences intercut with clips from the archives — to explore the work of a group of aggressively anticonventional artists. This is not a criticism. The movie is about the iconoclastic filmmakers clustered in the East Village and Lower East Side of Manhattan in the late 1970s and early ’80s. The chaotic, fast-moving, hazily remembered scene they created deserves and benefits from the scholarly consideration Ms. Danhier offers. A dogged journalist and a careful, enthusiastic cultural historian, she illuminates a hectic and fascinating place and time, bringing it back to life and tracing its continuing influence.

It is easy to forget — and also to romanticize — what New York was like in the decade after the fiscal crisis of the mid-1970s. Ms. Danhier’s interview subjects testify to the danger and desolation and also to the bohemian energy that they experienced and made into the basis of their work. There were punk bands, poets and artists-without-portfolio milling around the blocks below 14th Street east of Broadway, and at a certain point some of them decided to start making movies. They shot with Super-8 or 16-millimeter cameras, sometimes with synchronized sound and almost never with professional actors. Their acknowledged precursors included John Cassavetes, Andy Warhol and Jack Smith, but they also wanted to make something new.

Some went on to achieve a measure of fame, respectability and mainstream acceptance. A viewer with no background in the downtown avant-garde is likely to recognize Steve Buscemi, Deborah Harry and Jim Jarmusch, and maybe also Jean-Michel Basquiat and David Wojnarowicz. Someone with deeper knowledge — or, say, a secondhand memory gleaned from reading The Village Voice as a teenager in the provinces — will be gratified to see stalwarts of the era like Scott B and Beth B, Lydia Lunch, Fab 5 Freddy and Amos Poe, in their youthful vigor and their sturdy middle age. But the point of “Blank City” is neither to celebrate the ones who made it big nor to scold the sellouts. The movie aims, rather, to evoke a moment in as much detail and with as much insight as will fit into 95 minutes. In this it succeeds beautifully.

The tricky thing about artistic scenes and movements — as opposed to the particular works that outlast them — is that you kind of had to be there. For those who were not at legendary music spots like CBGB and the Mudd Club, or the short-lived cinemas that popped up to show underground and experimental film, “Blank City” provides a vivid, vicarious tour. And it also features a generous sampling of films made by mostly self-taught auteurs like Mr. Poe, Eric Mitchell and Daze.

“Nobody was doing what they were good at,” John Lurie recalls. “The painters were in bands. The musicians were making films.” Technique, polish, professionalism — all of these were suspect. What emerged in their absence, under various names (No Wave and Cinema of Transgression are two that stuck), were films that were at once rough and sophisticated, cynical and passionate, jaded and hysterical. Kind of like New York itself.

Documentaries on the history of film often work best as guides to future research, and “Blank City” is no exception. Some of the movies it samples have carved out niches for themselves — Mr. Jarmusch’s supercool “Stranger Than Paradise,” Charlie Ahearn’s splendid and sprawling “Wild Style” — while others are clearly in need of rediscovery.

Starting April 14, New Yorkers will have the chance to rediscover the work of Bette Gordon, subject of a timely and welcome retrospective at Anthology Film Archives. Her career started before the period covered in Ms. Danhier’s film and extended beyond it — “Handsome Harry,” her most recent feature, was released last year — but her “Variety” remains a vital artifact of that time, as well as a permanently unsettling and intriguing glimpse at a world in which art and sleaze collide and commingle.

Creative groupings are often boys’ clubs, with women serving as muses, models and mothers, and American film, independent or not, has traditionally been a macho undertaking. The New York of “Blank City” is a notable exception, a hotbed of feminism, glamour and sexual provocation whose resident geniuses included Ms. Gordon, Ms. Lunch, Patti Astor, Lizzie Borden and Susan Seidelman, among others.

There was a toughness in the downtown aesthetic that inoculates its survivors against nostalgia, and somehow Ms. Danhier manages to conjure a glorious and grungy bygone past without fetishizing it as a golden age. A bunch of people got together and did some stuff, and this is what it looked like.

Blank City

Opens on Wednesday in Manhattan.

Directed by Céline Danhier; directors of photography, Ryo Murakami and Peter Szollosi; edited by Vanessa Roworth; music by Ecce Homo featuring Nicholas Ray and Walter Steding; produced by Aviva Wishnow and Ms. Roworth; released by Insurgent Media. At the IFC Center, 323 Avenue of the Americas, at Third Street, Greenwich Village. Running time: 1 hour 35 minutes. This film is not rated.
http://movies.nytimes.com/2011/04/06...ty-review.html





Surge in Satanism Sparks Rise in Demand for Exorcists, Says Catholic Church

A surge in Satanism fuelled by the internet has led to a sharp rise in the demand for exorcists, the Roman Catholic Church has warned.
Nick Squires

The web has made it easier than ever before to access information on Devil-worshipping and the occult, experts said.

Exorcism is the subject of a six-day conference being held this week at the Regina Apostolorum Pontifical University in Rome, which is under the Vatican's authority.

"The internet makes it much easier than in the past to find information about Satanism," said Carlo Climati, a member of the university who specialises in the dangers posed to young people by Satanism.

"In just a few minutes you can contact Satanist groups and research occultism. The conference is not about how to become an exorcist. It's to share information about exorcism, Satanism and sects. It's to give help to families and priests. There is a particular risk for young people who are in difficulties or who are emotionally fragile," said Mr Climati.

The object of seminars was to scrutinise the phenomenon of Satanism with "seriousness and scientific rigour", avoiding a "superficial or sensational approach", he said.

The conference in Rome has brought together more than 60 Catholic clergy as well as doctors, psychologists, psychiatrists, teachers and youth workers to discuss how to combat the dangers of Devil-worship.

Organisers say the rise of Satanism has been dangerously underestimated in recent years.

"There's been a revival," said Gabriele Nanni, a former exorcist and another speaker at the course.

In theory, any priest can perform an exorcism – a rite involving prayers to drive the Devil out of the person said to be possessed.

But Vatican officials said three years ago that parish priests should call in professional exorcists if they suspect one of their parishioners needs purging of evil.

An exorcist should be called when "the moral certainty has been reached that the person is possessed", said Father Nanni, a member of the Vatican's Congregation for the Causes of Saints.

That could be indicated by radical and disturbing changes in the person's behaviour and voice, or an ability to garble in foreign languages or nonsensical gibberish.

While the number of genuine cases of possession by the Devil remained relatively small, "we must be on guard because occult and Satanist practices are spreading a great deal, in part with the help of the internet and new technologies that make it easier to access these rituals," he said.

The Vatican's chief exorcist claimed last year that the Devil lurked in the Vatican, the very heart of the Catholic Church.

Father Gabriele Amorth said people who are possessed by Satan vomit shards of glass and pieces of iron, scream, dribble and slobber, utter blasphemies and have to be physically restrained.

He claimed that the sex abuse scandals which have engulfed the Church in the US, Ireland, Germany and other countries, were proof that the anti-Christ was waging a war against the Holy See. He said Pope Benedict XVI believed "wholeheartedly" in the practice of exorcism.
http://www.telegraph.co.uk/news/reli...ic-Church.html





U.S. Students Suffering from Internet Addiction: Study
Walden Siew

Crackberry is no joke.

American college students are hooked on cellphones, social media and the Internet and showing symptoms similar to drug and alcohol addictions, according to a new study.

Researchers at the University of Maryland who asked 200 students to give up all media for one full day found that after 24 hours many showed signs of withdrawal, craving and anxiety along with an inability to function well without their media and social links.

Susan Moeller, the study's project director and a journalism professor at the university, said many students wrote about how they hated losing their media connections, which some equated to going without friends and family.

"I clearly am addicted and the dependency is sickening," said one student. "Between having a Blackberry, a laptop, a television, and an iPod, people have become unable to shed their media skin."

Moeller said students complained most about their need to use text messages, instant messages, e-mail and Facebook.

"Texting and IM-ing my friends gives me a constant feeling of comfort," wrote one of the students, who blogged about their reactions. "When I did not have those two luxuries, I felt quite alone and secluded from my life."

Few students reported watching TV news or reading a newspaper.

The American Psychiatric Association does not recognize so-called Internet addiction as a disorder.

But it seems to be an affliction of modern life. In one extreme example in South Korea reported by the media, a couple allegedly neglected their three-month-old daughter, who died of malnutrition, because they were on the computer for up to 12 hours a day raising a virtual child.

In the United States a small private U.S. center called ReSTART, located near Redmond, Washington, opened last year in the shadow of computer giant Microsoft to treat excessive use of the Internet, video gaming and texting.

The center's website cites various examples of students who ran up large debts or dropped out of college due to their obsession.

Students in the Maryland study also showed no loyalty to news programs, a news personality or news platform. They maintained a casual relationship to news brands, and rarely distinguished between news and general information.

"They care about what is going on among their friends and families and even in the world at large," said Ph.D. student Raymond McCaffrey who worked on the study. Loyalty "does not seemed tied to any single device or application or news outlet."

(Reporting by Walden Siew; Editing by Patricia Reaney)
http://www.reuters.com/article/2010/...63M4QN20100423
















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