Peer-To-Peer News - The Week In Review - June 30th, '12

[JackSpratts]

Since 2002


































"I don’t mind civil cases. I don’t live in Sweden, and it’s not like an extra $71,000 would hurt the $10,606,000 I already owe." – Fredrik Neij (TiAMO), Pirate Bay Founder


"The search and seizure was therefore illegal." – MegaUpload Judge Helen Winkelmann



































June 30th, 2012




Mega-Victory: Kim Dotcom Search Warrants "Invalid," Mansion Raid "Illegal"

A New Zealand judge savages the process used to target Megaupload's Kim Dotcom.
Nate Anderson

On January 20, New Zealand police showed up in style at the mansion of flamboyant Megaupload founder Kim Dotcom, swarming over the property and bringing along two police helicopters. They cut their way through locks and into the home's "panic room," where Dotcom was hiding in apparent fear of a kidnapping or robbery. They seized 18 luxury vehicles. They secured NZ$11 million in cash from bank accounts. And they grabbed a whopping 150 TB of data from Dotcom's many digital devices.

"It was definitely not as simple as knocking at the front door," said Detective Inspector Grant Wormald in a police press release at the time.

It was also totally illegal. That's the ruling of New Zealand High Court judge Helen Winkelmann, who today ripped the "invalid" warrant and the subsequent search and seizure in a 56 page decision.

The ruling marks a major win for the Kim Dotcom defense, which is trying to prevent their client from being extradited to the US on a host of copyright and money laundering charges. Still, it's not yet clear if Dotcom will actually get his data back; the FBI already flew to New Zealand, imaged much of the data in March, and FedExed it back to the US.

"The search and seizure was therefore illegal”

At the instigation of groups like the MPAA, the FBI opened an investigation two years ago into Megaupload's activities. The online file locker had become a popular place to store and share large files online, some which were copyrighted and shared without authorization.

By January, the FBI had elevated its informal contacts about the case with New Zealand officials into an official "government to government" request for legal assistance under an extradition treaty between the two countries. The US would prosecute the case in Virginia, where a grand jury had been convened, but it needed New Zealand cops to actually arrest Dotcom and search his property.

The goal was to swoop in during Dotcom's birthday in mid-January, since several of his Megaupload co-defendants were going to be at his mansion outside of Auckland. On January 17, the New Zealand Deputy Solicitor-General issued an authorization for local police to apply for warrants. They did so the next day, showing up with affidavits at the North Shore District Court—but the duty judge didn't have time to deal with the request. The matter was held over until January 19, when the warrants to search Dotcom's house and two other properties were approved; police had 14 days in which to execute them.

They needed only a day; on January 20, they arrived at the house. Dotcom later told the court he had no idea that the people he saw flooding into his property were police, so he fled to his home's secure room. After realizing they were cops, he says he decided to stay put rather than take the risk of popping out and perhaps getting shot.

"Not once did they say they were police," he testified. "They had civilian clothes on. The only things that I saw were flack jackets with a lot of pistols and automatic weapons."

Once they arrived at the panic room, Dotcom said, "I was punched in the face. I was kicked down on the floor. One guy was standing on my hand so my nail was ruptured and my hand was bleeding. It was quite aggressive."

In the police view, however, Dotcom was hiding from them—and had retreated to a room with a weapon "which had the appearance of a shortened shotgun." CCTV footage from the house, which might show more of what really happened, has been seized by police and not yet returned.

In any event, with the initial unpleasantness of the raid behind them, New Zealand investigators pored over the house and began packing up evidence. They showed Dotcom the judicial warrant, as required, but it was a confusing document. The warrant didn't make clear, for instance, very basic facts like: under which country's laws was he being targeted? The actual warrant application didn't even make clear that the US was involved. As Judge Winkelmann put it:

The failure to refer to the laws of the United States on the face of the warrants, would no doubt cause confusion to the subjects of the searches. They would likely read the warrants as authorizing a search for evidence of offenses as defined by New Zealand's law. The only clue that they are not is that each one is headed "the Mutual Assistance in Criminal Matters Act 1992." That is not much of a clue.

And what were the cops looking for? They didn't know, exactly. Because they were not investigating the case—the FBI was doing that—the police executing the search had limited knowledge of what was truly useful and necessary. As the judge put it, the people executing the warrant "were not the investigating officers and had limited knowledge of the operation," despite being briefed before the raid went down.

They had the warrant document to guide them, of course—but it was a remarkably open-ended piece of work. Dotcom was accused of "breach of copyright," but in what way? The warrant didn't say.

“Copyright can exist in many things," wrote the judge. "A breach of copyright can be affected in many ways."

Warrants need to allege specific crimes for which evidence is being gathered; it's the difference between rummaging through a home looking for evidence of "murder" and rummaging through a home looking for evidence about "the murder of such-and-such, killed on such-and-such a date, by such-and-such a weapon."

The requirement imposed by [New Zealand law] is not to describe the type of offense, but rather the offense or offenses in respect of which the warrant was sought and obtained.

Without the specific allegation of a crime, a warrant might veer into over-broad territory, becoming a "general warrant" so vague as to be illegal. According to Judge Winkelmann, that's exactly what happened here. "These were general warrants both in form and reality," she wrote. Proper warrants must be “framed with as much specificity as the relevant context permits."

Local laws apply

In this case, the broad nature of the alleged crimes was combined with a broad list of things to grab. For instance, the warrant targeted "all digital devices, including electronic devices capable of storing and/or processing data in digital form."

This was pretty indiscriminate. Everyone involved admits that police must be allowed to grab some information that turns out later to be irrelevant to their case; otherwise, the standard for searches would be so high that much useful material would never be found. But the key point is that the cops need to quickly triage the material taken and return everything not relevant to the investigation.

In this case, the cops had a problem doing so. Because the actual investigators were the FBI, local New Zealand police had no idea which data was relevant. Besides, they had grabbed 150 TB of material, and analysts admitted to the court that they couldn't process such a volume with a spending a substantial sum of money for more workers and equipment. So the idea was: we'll just ship it all to America and let the FBI do the minimization there.

But that's not an option. The warrant was executed in New Zealand under New Zealand law against a New Zealand resident, and cops can't simply act as agents for another country and then tell aggrieved parties that they have to go deal with that country if they want their irrelevant data back.

"In this day and age computers (and even phones) are used by individuals and families to store a wide range of material information, family photos and films; personal correspondence (e-mails) and generally information of a private and purely personal nature," wrote the judge. Such information must be promptly returned.

Instead, the police "exceeded what they could lawfully be authorized to do. This is because they continue to hold, along with the relevant, material they concede will be irrelevant. They've taken few steps to identify the material, and no steps where the material resides on the computer hard drives... They intend to allow the FBI to do that in the United States. That is an approach that is not available to them.”

Instead, the judge noted that the police could have invited FBI officials to come to New Zealand and assist with the initial data triage. Simply offloading their legal responsibility for "minimization" to the FBI won't wash, however.

The rule of law

To sum up the ruling: the warrants were "general warrants, and as such, are invalid.” Because the police relied on invalid warrants, "The search and seizure was therefore illegal.” And the data should not have been imaged wholesale by the FBI without Dotcom's consent, which the judge found no evidence of.

New Zealand's government took one last stab at keeping Judge Winkelmann away from the whole issue of the warrant's validity, argued that local courts should not review the warrant; only the trial court—in this case, the Virginia District Court in the US—had that power. Winkelmann was having no truck with this, for reasons much like those surrounding data minimization.

"It would not be consistent with the object of promoting the rule of law internationally, were the domestic courts to refuse to review the lawfulness of warrants" obtained in this manner, she noted.

"If having conducted a review, it is determined that there was a fundamental defect in the warrant, it is difficult to see why a Court should decline to declare as much, even where trial processes are engaged in another jurisdiction.”

What comes next

Winkelmann is proceeding cautiously, given the complexity of the case. Today's ruling does make clear both that the warrants were illegal and that removing the cloned data to the US was "unlawful."

But how to proceed? The FBI already has the data it wants; is Winkelmann going to ask US law enforcement to return all cloned copies to New Zealand, as Dotcom's lawyers would like? Will she set up a New Zealand-based process to vet all the data and only then release relevant information to the US?

Tricky questions, and all potentially expensive. Winkelmann will hear further arguments on how to proceed on July 4. Until then, though, Dotcom can celebrate an important early victory in the case. Perhaps he can even look forward to getting his home's CCTV footage back from police—and we can get a better picture of what went down on January 20.
http://arstechnica.com/tech-policy/2...-raid-illegal/





Digital Notes: @KimDotcom Jokes of Money ‘Laundering’ and Tennis ‘Racketeering’
Ben Sisario

For Hollywood and the music industry, the criminal case against Megaupload is critical in their fight against piracy, and the scale of it is the stuff of symbolism: A federal indictment accuses the file-sharing site and seven of its operators, including the founder, Kim Dotcom, of abetting $500 million in damages.

But those media executives may have underestimated how fascinating and entertaining Mr. Dotcom and his defense would turn out to be. (They shouldn’t have: even before the raid on his home in New Zealand in January, Mr. Dotcom had earned the nickname “Dr. Evil,” starred in his own “Mission: Impossible”-style online videos and collected luxury cars with licenses plates like “MAFIA” and “GOD.”)

Kim Dotcom @KimDotcom

Mathias' first attempt at money laundering ;-) instagr.am/p/MKnIdBMkde/

Mr. Dotcom’s defense team has gotten judges in New Zealand to relax the bail restrictions against him and to order the Federal Bureau of Investigation. to turn over its files on Megaupload (that part is now under “urgent review” by another court). In the latest twist, Mr. Dotcom — who was not allowed access to the Internet when he was first released from jail — apparently has started a Twitter feed, posting photos that lightly mock his case, and announcing his return to the world of cloud storage.

The Twitter account went live three days ago; it has not been verified by Twitter, but one has to wonder who else would be posting his smiling mug so many times. And for a man facing up to 20 years in prison, Mr. Dotcom seems to be having a lot of fun. He posted Instagram photos of himself with his arm around “MegaWoz” — that is, Steve Wozniak, the co-founder of Apple. In another series of shots with punning captions, he and his colleagues make fun of some of the charges against him: “money laundering” (washing bills in a tub); “conspiracy to commit racketeering” (four guys about to play tennis).

In another post to Twitter, he said that he would be restarting Megabox, a cloud-music service that he had been developing before the January raid. He has described it as a site that will “allow artists to sell their creations direct to consumers and allowing artists to keep 90 percent of earnings.”

Announcing the return of Megabox, Mr. Dotcom tweeted: “The major Record Labels thought Megabox is dead. Artists rejoice. It is coming and it will unchain you.”
http://mediadecoder.blogs.nytimes.co...-racketeering/





Pirate Bay Founder Fined For ‘Continued Involvement’ In The Site
enigmax

As part of the punitive measures against both The Pirate Bay and its founders, a Swedish court previously banned two of the torrent site’s founders from having anything to do with its future operations. Now, according to the Stockholm District Court, Fredrik Neij has violated that ban and will be fined. Neij told TorrentFreak that his only ‘crime’ was failing to prove a negative. In any event, no fines will be paid.

Over the years the laundry list of punishments and measures against The Pirate Bay and its founders has grown to epic proportions.

The founders of the site were hit with jail sentences and huge fines following a 2009 trial and subsequent appeals, and the site itself is banned or censored in growing numbers of countries around the world.

What is less well known perhaps is that two of the site’s founders are actually forbidden from having anything at all to do with running The Pirate Bay.

The legal restrictions date back to an order issued by the Stockholm District Court, which declared that Fredrik Neij (TiAMO) and Gottfrid Svatholm (Anakata) were forever banned from operating the site.

Breaching the ban would result in a hefty fine for the duo, but one was not expected to be handed down – until today.

The Stockholm District Court now says that Neij has continued to have involvement in the operations of The Pirate Bay. As a result it has handed down a 500,000 kronor fine ($70,690).

So what evidence does the Court have exactly? TorrentFreak tracked Fredrik down and asked.

“There is no evidence, just the lack of evidence that I was not involved,” he told us.

“In civil cases it’s guilty until proven innocent and in a previous case I declined to give the details who I transfered the site to. They say if it’s not me, then I could easily say who it is.”

Although the amount levied by the District Court is significant, Neij appears unfazed.

“I don’t mind civil cases,” he told us. “I don’t live in Sweden, and it’s not like an extra $71,000 would hurt the $10,606,000 I already owe.”

Along with the other founders of The Pirate Bay, Neij does indeed owe millions of dollars in damages and fines so his predicament and attitude is perhaps best summed up by paraphrasing the earlier words of fellow site founder Peter Sunde. “Why stay at just a few million dollars?” Sunde said. “Why not make it a billion dollars instead?”

In any event, it appears that no one is getting any money. Fredrik tells TorrentFreak that he’s already written to the court informing them of his intention never to pay any fines, now or in the future. Even if he did, however, there would be a bonus.

“[Any payment] would push the mafiaa from The Pirate Bay trial one step away from even getting any cash at all, as all this goes directly to the state, and stuff owed to the state will be taken before anything is sent to private cash I owe.

“Not that they will ever get any cash for either of the debts, but still.”
https://torrentfreak.com/pirate-bay-...e-site-120627/





Jail For File-Sharing Not Enough, Labels Want ISP-Level Spying Regime
enigmax

From October, knowingly uploading or simply downloading copyrighted material from the Internet will be a criminal offense subject to jail sentences in Japan. But despite now having the ultimate deterrent, it’s still not enough for the Recording Industry Association of Japan. The group is now pressing for ISPs to install spying technologies that will automatically block unauthorized uploads.

Earlier this week, Japan approved an amendment to its Copyright Law that will soon give the authorities the power to jail Internet users for up to two years for simply downloading copyright material.

Uploading copyright material has been illegal for some time, but the criminalization of downloading has caused some to worry whether simply viewing a pirate music video on YouTube could render people liable to prosecution.

Understandably this kind of talk has the potential to lead to a climate of fear among Internet media consumers, but if that leads to increased sales at authorized outlets rightsholders won’t be too disappointed. In fact, after lobbying hard for this tough copyright law amendment, that will be very much “mission accomplished.”

Not surprisingly though, even the toughest of sanctions aren’t going to stop the big recording labels coming back for more mechanisms to protect their interests. And that they have.

Several music rights groups including the Recording Industry Association of Japan say they have developed a system capable of automatically detecting unauthorized music uploads before they even hit the Internet. In order to do that though, Internet service providers are being asked to integrate the system into their networks.

The system works by spying on the connections of users and comparing data being uploaded to the Internet with digital fingerprints held in an external database. As can be seen from the diagram, the fingerprinting technology employed is from GraceNote, with intermediate systems provided by Copyright Data Clearinghouse (CDC).

Once a match is found, rightholders want ISPs to automatically block the allegedly infringing content. But according to one report, there may even be requests to send out warning letters to uploaders. If implemented this would amount to the most invasive “3 strikes” style regime anywhere in the world.

The system is being promoted as a benefit to ISPs, in the sense that once installed (and licensed at a cost of around $600 per month) they can potentially avoid being held liable for copyright infringements carried out by their customers. Whether not having it installed will save ISPs from privacy invasion lawsuits remains to be seen.

Rightsholders have tried to get service providers to install this kind of system before, most notably resulting in the legal battle between music rights group SABAM and Belgian ISP Scarlet. That case ended in 2011 with the European Court of Justice declaring that spying on Internet users would breach their privacy and violate the fundamental rights of both the ISP and its subscribers.
https://torrentfreak.com/jail-for-fi...regime-120624/





Court Rules for Eircom on Illegal Downloads
Tim Healy

EIRCOM has been given the green light to continue its "three strikes and you're out" policy for customers who download music illegally.

An order by the Data Protection Commissioner banning the policy was overturned in the Commercial Court yesterday.

Under the policy, agreed with four record companies, Eircom subscribers who download music illegally lose their internet access for a week after three copyright infringements.

A fourth breach will lead to them losing their internet access entirely.

Last December, the commissioner's office ordered Eircom to stop implementing this policy, saying it breached data protection and privacy laws.

This enforcement notice was later challenged by the four record companies: EMI Records (Ireland) Ltd, Sony Music Entertainment Ireland Ltd, Universal Music Ireland Ltd and Warner Music Ireland Ltd.

Yesterday, Mr Justice Peter Charleton quashed the enforcement notice after finding it was invalid.

He said the commissioner failed to give reasons why it had been issued.

Mr Justice Charleton said the commissioner had given no reasons whatsoever for its decision to issue the notice.

The judge noted privacy was central to the arguments made by the commissioner during the hearing of the case.

But it was not clear how privacy might come into the matter at all, the judge said.

He was of the view there are no privacy or data protection implications to detecting unauthorised downloads using "file sharing" technology.
http://www.independent.ie/national-n...s-3152645.html





Boxopus Downloads Torrents Directly to Your Dropbox
Ernesto

Boxopus is a new service that enables people to download torrents directly to their Dropbox account. With clever use of Dropbox’s API, BitTorrent users can add torrent files totally anonymously and without the need for a BitTorrent client. Torrent sites can add Boxopus as a new download option for their users, which some already have.

Founded in 2007, Dropbox has quickly become the leading player in cloud hosting and synchronization services.

The service is loved by many for its ease of use, and thanks to the newly launched Boxopus site, BitTorrent users are now able to automatically put torrent downloads in their Dropbox folder. It only takes one click and the files are downloaded and synced to all computers.

Using the service is easy. People can securely use their Dropbox credentials to pair Dropbox with Boxopus, and add as many torrents as they like. The Boxopus servers will then take care of the downloading and put the completed downloads in a folder.

“Cloud storage is an emerging trend, it’s obvious that sooner or later everything will be in the cloud. That’s why we decided to unite Dropbox and BitTorrent to make downloads as easy as 1 click, without using even a BitTorrent client,” Boxopus founder Alex told TorrentFreak.

One of the main benefits to users is that they can add torrents to their Dropbox from work, school or on the road. The files will then be automatically synced to all computers running Dropbox. Another plus side is that these downloads are anonymous, as Boxopus takes care of the downloading.
https://torrentfreak.com/boxopus-dow...ropbox-120623/





Godaddy Addresses its Limited ‘Unlimited’ File Sharing System

Promises to fix misleading claims
Dave Neal

DOMAIN NAME OUTFIT and hosting service Godaddy has promised to address concerns about its 'unlimited' file sharing service.

The problem with the 'unlimited' file sharing service is that it is actually limited, at least that's what users have been saying for around four months.

The firm's support pages are the scene of some angry comments from users that accuse Godaddy of misleading them about the scale and scope of the service, but some four months after gripes surfaced the company has promised to do something.

At issue is Godaddy's Online Storage service, which promises "Unlimited Sharing. Both for the number of files AND the file size," but according to users actually delivers a limited service.

A post from a JasonP, apparently a Godaddy representative, made four months ago, accepts the limitation, and confirms a ceiling of 2GB. This is later changed to 1GB, and later still another company poster switches this back to 2GB, but says that Godaddy will do something to clear up the confusion.

"I work directly with the Online Storage development team and would like to clarify on the topic of file size limits, as there appears to be some confusion. The Online Storage product supports files up to 2GB in size. This size limit is supported across the board; we don't limit your ability to share files via collaboration or public links, provided that the files have already been uploaded to your account and do not put you over your allocated account quota," says the post from a Jasonam.

"On the topic of shared file size limit, what we mean by this is that we won't limit how much you can share. Provided that you've already uploaded a set of files that meet the 2GB limit and don't put you over your account quota, you can share as many of them as you want using the product's collaboration and public link features. We are in the process of updating the 'Ours vs Theirs' comparison on our website to make our intentions more clear."

We've asked Godaddy for some more information, because that statement, like the rest of this story, isn't particularly clear.
http://www.theinquirer.net/inquirer/...d-file-sharing





Jimmy Wales Calls On Government To Halt O’Dwyer Extradition

The Wikipedia founder backs the fight against Richard O’Dwyer’s extradition with a petition
Tom Brewster

Wikipedia founder Jimmy Wales has launched a campaign to stop the extradition of TVShack.net creator Richard O’Dwyer.

O’Dwyer, a 24-year-old student from Sheffield, is alleged to have committed copyright offences in the US and is facing extradition to the US.

UK charges against O-Dwyer were dropped before he was handed an extradition notice. In January, a judge ruled he could be extradited to the US, where he would face up to 10 years in jail if found guilty.

Home secretary Theresa May signed off the extradition in March, but now that decision is coming up against fierce opposition, with Wales leading the way.

Guilty or not?

Many believe TVShack.net did not commit any copyright offences as it linked to sites where video could be downloaded, but did not offer the downloading function directly. It essentially acted as a search service for video content, sometimes leading to unauthorised sites, but other times to legitimate ones.

Others are aggrieved at the fact that O’Dwyer is not facing charges here, where the alleged offences took place. TVShack.net was not hosted in the US either.

Wales took a somewhat different tack, issuing a clarion call for defenders of the free web to get behind a petition and ask the home secretary to keep O’Dwyer in the UK.

“The internet as a whole must not tolerate censorship in response to mere allegations of copyright infringement. As citizens we must stand up for our rights online,” Wales wrote, on the Change.org petition page.

“When operating his site, Richard O’Dwyer always did his best to play by the rules: on the few occasions he received requests to remove content from copyright holders, he complied. His site hosted links, not copyrighted content, and these were submitted by users.

“Copyright is an important institution, serving a beneficial moral and economic purpose. But that does not mean that copyright can or should be unlimited. It does not mean that we should abandon time-honoured moral and legal principles to allow endless encroachments on our civil liberties in the interests of the moguls of Hollywood.

“Richard O’Dwyer is the human face of the battle between the content industry and the interests of the general public. Earlier this year, in the fight against the anti-copyright bills SOPA and PIPA, the public won its first big victory. This could be our second.”

The petition has already received 12,610 signatures. The 24-year-old’s mother has been campaigning vehemently in support of her son’s battle against extradition.

“This is not only a matter of British national importance but of global importance too,” she wrote in support of the petition. “We so appreciate Jimmy Wales launching this petition in support of Richard, to have such support and endorsement from such a knowledgeable and respected figure is fantastic.”

Extradition rules in the UK are under scrutiny too. Earlier this year, the House of Commons’ Home Affairs Select Committee claimed the extradition treaty between the UK and the US was not protecting the rights of British citizens.
http://www.techweekeurope.co.uk/news...d-odwyer-83816





Ofcom Brings Back “Three Strikes” Online Piracy Measures

The watchdog tells ISPs to keep a list of illegal file-sharers…
Max Smolaks

Today, Ofcom has published an updated draft of the proposed measures to combat online piracy under the Digital Economy Act (DEA), which could see ISPs compile lists of illegal file-sharers, to be disclosed to copyright holders.

The code will cover customers with BT, Everything Everywhere, O2, Sky, TalkTalk Group and Virgin Media, which together account for 93 percent of the UK’s broadband market.

Under the plans, copyright owners are expected to invest in awareness campaigns “to help educate consumers about the impact of copyright infringement”. A separate Sharing of Costs Order establishes that they will also have to pay the cost of implementing the new system.

The online piracy naughty list

Ofcom first published the “Initial Obligations Code” designed to tackle illegal file-sharing in 2010, aiming for the proposals to come into force in 2011. However, the measures were widely criticised by the industry, politicians and even the United Nations, and the watchdog had to return to the drawing board.

The plans include requirements for ISPs to “notify their subscribers if the Internet protocol (“IP”) addresses associated with them are reported by copyright owners as being used to infringe copyright” and “keep track of the number of reports about each subscriber, and compile, on an anonymous basis, a list of those subscribers who are reported on above a threshold to be set in the Initial Obligations Code.”

In accordance with the Code, serial fil-sharers who have infringed copyright more times than the threshold would be included in a special list, available to copyright holders, who would then be able to take legal action.

In July 2010, BT and TalkTalk tried to challenge the controversial plans in court, saying that the anti-piracy measures were “inconsistent with European law”, would breach the privacy of their customers and result in higher costs for all parties involved.

The judges dismissed these claims, maintaining that the DEA is proportionate in dealing with illegal file-sharing and the costs are justified. The ISPs later launched an appeal, which wasn’t successful.

The updated draft of the Code, published today, describes plans to force ISPs to send monthly warning letters to owners of IP addresses which are suspected of copyright infringement. If a customer receives more than three letters in a 12-month period, anonymised information on their behaviour can then be supplied to copyright holders.

The copyright holders can then decide if they want to seek a court order revealing the identity of the customer, and take legal action against them.

Lipstick on a pig

Of course, not every customer who is accused of copyright infringement will be brought before the court.The plans include the establishment of an independent appeals body, which will charge defendants £20 to process their case. This fee will be returned in the event of a successful appeal.

There have been a number of changes in the document since May 2010, when the draft code was first published. Ofcom will now have to approve evidence-gathering procedures of the copyright holders, rather than give them free rein. Also, appeals will now have to be based on narrow grounds specified in the Digital Economy Act, rather than any grounds the appellant chooses.

The accompanying Sharing of Costs Order, which establishes who will pay for the scheme, has also gone through some changes. Under the revised version of the Code, copyright owners will bear all of the costs incurred by Ofcom, the majority of costs incurred by the appeals body, and 75 percent of the costs efficiently and reasonably incurred by ISPs in carrying out their obligations.

Some issues remaining in the code concern public networks, such as libraries, hotels and bars, which will have to deal with automated accusations of infringement, but are obviously not responsible for the behaviour of their customers.

In the future, things could get even worse for illegal file-sharers. After the code has been in force for at least 12 months, the Secretary of State will be able to approve additional measures to tackle piracy, all enforced by the ISPs, including Internet bandwidth reduction, blocking of Internet access or temporarily suspension of accounts.

“These measures are designed to foster investment and innovation in the UK’s creative industries, while ensuring Internet users are treated fairly and given help to access lawful content,” said Claudio Pollack, Ofcom’s Consumer Group Director.

“Ofcom will oversee a fair appeals process, and also ensure that rights holders’ investigations under the code are rigorous and transparent,” he added.

“Ofcom are being asked to put lipstick on a pig with this code,” commented Jim Killock, executive director of the Open Rights Group. “The appeals are a joke. The Government has decided that ‘I didn’t do it’ is not a defence. Some people will almost certainly end up in court having done nothing wrong.”

Subject to further review by the European Commission, the code of practice will be presented to the Parliament by the end of 2012. Ofcom expects the first customer notification letters to be sent in early 2014.
http://www.techweekeurope.co.uk/news...nomy-act-84032





File-Sharing Appeals Get Tougher Under Piracy Crackdown
David Meyer

On Tuesday, after many delays, the telecoms regulator published the draft code for implementing the Digital Economy Act (DEA), opening it up for consultation. In its original draft two years ago, Ofcom said people should be able to appeal on any basis they like. However, they will now be restricted to the grounds set out in the legislation itself.

"On the instruction of government, we have removed the ability for subscribers to appeal on any other ground on which they choose to rely," the regulator said.

Ofcom had initially called for all grounds to be considered because online infringement is "slightly unknown territory", a spokesman for the regulator explained.

"It is hard to predict what grounds might be reasonable in future, given the advance of technology," he told ZDNet UK. "But the government has asked us to restrict the appeals process." He said the order came through in July 2011.

The Digital Economy Act, passed into law in April 2010, introduced a tougher copyright scheme with provisions to block websites hosting pirated content, as well as getting ISPs to write letters to suspected file-sharers using their connections. However, Ofcom found the site-blocking plans were unworkable, and it has complained that "drafting the code itself has [been] a very complex task".

Under the terms of the legislation, acceptable grounds for appeal include procedural problems. These include the 'infringement' not actually being a copyright violation at all, or the subscriber being incorrectly linked to the relevant IP address.

Other than that, accused internet subscribers will have to somehow prove that they were not responsible for the piracy and that they have secured their networks adequately. Otherwise, people will have to show that the rights holder or ISP somehow breached Ofcom's code themselves.

Appeals body

Under Ofcom's new proposals, rights holders will need to get approval from the regulator for the procedures they use to collect evidence against suspected file-sharers. However, an appeals body — which is yet to be established — will judge the quality of that evidence, when used to accuse people of infringement.

On the instruction of government, we have removed the ability for subscribers to appeal on any other ground on which they choose to rely.
– Ofcom

This body — and not Ofcom — will decide how high-quality the evidence provided in defence by subscribers will have to be.

"We consider that the appeals body should be able to impose an objective standard of reasonableness and have therefore removed the requirement proposed in our consultation that it should take into account the technical ability and knowledge of the subscriber in making its determination," Ofcom said.

Also, the code now says that people have 20 days to file an appeal after getting a notification of infringement from their ISP; before, there was no limit.

Appeals system a 'joke'

Open Rights Group chief Jim Killock said the appeals — each of which will cost the accused consumer £20, refundable if successful — as a "a joke".

"The government has decided that 'I didn't do it' is not a defence," Killock said in a statement. "Some people will almost certainly end up in court having done nothing wrong."

Killock highlighted the fact that commercial Wi-Fi hotspot operators are exempt from having to run a notifications system, due to their relatively small size. However, pubs, cafes and similar businesses running individual hotspots may end up defending themselves against infringement accusations, he noted.

In its new draft code, the regulator sidestepped this issue to some extent. It said the appeals body will determine whether copyright infringement carried out over such networks is the fault of the user or the hotspot owner.

Copyright infringement reports

It will take a while to set up the appeals body and for ISPs to establish their own systems for processing reports of copyright infringements from rights holders, Ofcom noted. But by 1 March, 2014, Ofcom expects these systems will be in place and rights holders will be able to start sending ISPs copyright infringement reports (CIRs), noting which IP addresses and port numbers are associated with unlawful file-sharing.

The government has decided that 'I didn't do it' is not a defence. Some people will almost certainly end up in court having done nothing wrong.
– Jim Killock, Open Rights Group

The ISPs will have to notify the relevant customer each time they get a CIR associated with their account. Ofcom originally proposed doing this using a mix of email and registered mail, but has now settled on requiring ISPs to send each notification by first-class mail. It also now wants the letters to explicitly say how many CIRs are associated with the subscriber's account.

After three notifications within a year, the ISP must add the customer to an anonymised list, which is then sent to the rights holder. If the copyright owner wants to take action, they must apply for a court order to force the ISPs to reveal the identities of the people on the list.

The code does not lay out what the next step is in the process after that. It wants to run the letter-writing campaign for a year, first — if that does not drastically cut unlawful file-sharing, the secretary of state will have the power to introduce punishments such as account suspension.

Who will foot the bill?

Ofcom's new consultation will close on 26 July. The regulator also launched a separate consultation on Tuesday, dealing with how the costs of implementing the DEA scheme will be split. That consultation will close on 18 September.

The issue of costs is largely what held up the formulation of the new draft code in the first place. According to Ofcom's new proposals, rights holders will have to pay all of Ofcom's costs and all the ISPs' fixed costs for processing reports of copyright infringement, and 75 percent of the ISPs' variable costs.

The rights holders will cover these costs through a notification fee. This is set at one level for the biggest ISPs (BT, Virgin, TalkTalk and Sky), and at a lower level for the fixed-line broadband operations of O2 and Everything Everywhere.

The cost to rights holders of pursuing copyright infringement will not be low: depending on the numbers of reports generated and the size of the ISP, rights holders will have to cover costs of between £7.20 and £45.10 per CIR.
http://www.zdnet.co.uk/news/intellec...down-40155443/





Telstra Tracks Users to Build Web Filter

Updated: Says website monitoring 'definitely not' for marketing.
Darren Pauli

Telstra has confirmed it is tracking websites visited by its mobile users in the lead up to a launch of a new web filtering solution.

Days after suspicions of Telstra's networking monitoring activity was first aroused, the telco has revealed it captures web addresses visited by millions of subscribers on its Next G network.

The addresses are compared to a blacklist of criminal sites curated by web filtering company Netsweeper, and held both in Australia and the US.

Users first noticed the new activity when they directed their Telstra devices to thier own web servers and noticed it was also visited split seconds after by a Chicago IP address, believed to be held in a Rackspace facility.

Network engineers and users on the Whirlpool user forums suspected the activity was a marketing effort used to gather intelligence on the activities of Telstra customers.

A spokesman for the telco told SC last week that the activity was part of a "normal network operation".

However, Telstra has since clarified that the activity was conducted ahead of a launch of a voluntary web filtering offering for mobile users.

Spokesman James Howe told SC that user data was "completely anonymised" before it was sent offshore to be compared against Netsweeper's URL blacklist.

He was unable to confirm if users could opt-out of the data slurping procedure at the time of writing.

Telstra was waiting on confirmation from its legal team before it is expected to issue a statement later today.

The monitoring appears to relate to an as-yet-unreleased feature dubbed "Smart Controls" that would allow users to access "mobile internet browsing restrictions and call restrictions on Telstra mobile services".

According to Telstra documentation updated after SC approached the telco for comment, users who opt into the "Smart Control" feature would pay $2.95 per month for the ability to restrict internet access on mobiles associated with their account based on specific URLs and content categories, or allow access to only specific URLs.

The feature would only be available to newer Telstra customers — those on its Siebel-based billing system. It would also provide regular reports of internet use for users when the Smart Controls function is enabled.

"Whilst we take care in filtering content based on the preset internet categories, we cannot guarantee that any or all of the content will be filtered accurately or in accordance with these categories," the documentation reads.

The filtering appears to be only restricted to Telstra mobiles operating over the Next G network; those accessing the internet over a local wi-fi connection would not face the same restrictions.

"Once Smart Controls has been purchased, you can choose to restrict mobile internet access when the mobile service is accessing the mobile internet via the Telstra Mobile Network," it read.

User privacy

Users contended the activity was far from normal. Former Internode network engineer Mark Newton issued a strongly-worded statement to Telstra’s privacy wing requesting information on the activity in lieu of a request to the federal privacy office.

Greens senator Scott Ludlam told SC sending even anonymised traffic offshore could have serious privacy implications.

"It is potentially probelematic. Anything in the US is subject to the Patriot Act, even if the data is anonymised, or sent as batches," Ludlam said.

"Why weren't people asked if they could opt-in?"

The US Patriot Act, introduced in 2001, allows the US Government to grab any user data stored within the country for intelligence purposes.

Senator Ludlam said it was unfortunate that it took a gang of network engineers to spot Telstra's "capturing of shadow traffic", especially if Telstra was to launch a volunteer net filter product.

"Maybe it is of noble intent, and Telstra had gone about it in a subversive way," he said.

The use of voluntary filters has been seen as a favourable alternative to the Federal Government's proposed internet filtering scheme.

A similar system, blocking access to child pornography sites, is also run by Telstra for all its subscribers, based on a blacklist curated by Interpol and held by the Australian Federal Police locally.

In a demonstration of the tracking activity, Mark Newton wrote:

"a visit to "http://my-server/13uf2n232.html" yields this hit from my iPad:

149.135.145.71 - - [25/Jun/2012:17:24:59 +0930] "GET /13uf2n232.html HTTP/1.1" 200 736 "-" "Mozilla/5.0 (iPad; CPU OS 5_1_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9B206 Safari/7534.48.3"

and, approximately 250 milliseconds later, this hit from 50.57.104.33 in Chicago

50.57.104.33 - - [25/Jun/2012:17:25:00 +0930] "GET /13uf2n232.html HTTP/1.0" 200 736 "-" "Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US; rv:1.9) Gecko/2008052906 Firefox/3.0" end"

He alleged the transmission of user traffic data off-shore could be a breach of Australian privacy legislation.

Senior Telstra technicians reportedly told some engineers that users could not opt out of the web site tracking and could request a list of tracked sites through the company’s billing department.
http://www.scmagazine.com.au/News/30...eb-filter.aspx





File Sharing is no Different from Jimmy Carr’s Clever Accounting
James Bloodworth

File sharing is no different from Jimmy Carr’s clever accountingAt some point during the last 10 years or so, the idea that everything that can be taken for free should be taken for free has become widely accepted. The most intriguing thing about the 2009 parliamentary expenses scandal was not the relaxed set of regulations governing the expenses process, but rather the widespread assumption by MPs that if it was possible to put in a claim for something it would be fit and proper to do so – the morality of the claim itself being a moot point.

Further down the food chain, a visible feature of last August’s rioting was the proportion of trouble that appeared to be motivated by little more than an unquenchable thirst for consumer goods; free consumer goods. There can be little doubt that deprivation and broken homes played a part, perhaps even providing the much talked about “spark” that “ignited” the trouble. But disenfranchised youth looting sports gear has more in common with the mantra that “greed is good” than with any coherent “rebellion”.

A belief in deferred gratification – that is, the idea that if you want something you must bide your time and patiently save the money for it – sounds to today’s debt-ridden society like a well-conducted tour of Atlantis. You will even hear corporate press officers explaining the popularity of technological devices such as the Kindle (a tool for reading books, no less) in terms of the instantaneous gratification they provide. People don’t want to wait several days for their book to drop through the letterbox, so the corporate message goes. They want it now: this instant. (One wonders if these “consumers”, so concerned with speed, start reading from the back of the book, all the better to immediately discern what the plot is.)

Not only do we expect to get our hands on the things we desire right away, but we increasingly turn our noses up at the prospect of giving anything back in return. Nowhere is this more apparent than the music industry, where record sales in the UK declined for the seventh successive year in 2011, due in large part to internet file sharing. In 2010 global music sales fell by almost £930m, with “physical” sales of CDs dropping in the UK by almost a fifth.

A recent article that appeared on the American NRP music blog summed up the attitude of many young people to free downloading. The author, a young lady called Emily White, said she had an iTunes library in excess of 11,000 songs of which she had “never invested money”. “I honestly don’t think my peers and I will ever pay for albums,” Ms White went on to admit. “All I require is the ability to listen to what I want, when I want and how I want it. Is that too much to ask?”. Responding to Ms White’s article, David Lowery of Artists for an Ethical Internet described her attitude as “unexceptional”, and based on a common disconnect between “personal behaviour and a greater social injustice that is occurring”. “You are not just ripping off the record labels, but you are directly ripping off the artist and songwriters whose music you ‘don’t buy’,” Mr Lowery said.

And it is not only the music industry that is suffering because of the increasing unwillingness of individuals to pay for content. According to a study by US Professors Michael Smith and Rahul Telang of the Carnegie Mellon University, the film industry too is being badly hit, with around 40 per cent of the revenue for a typical film being lost to piracy. The traditional copyright model meant that in the past an artist maintained control of his or her work because it was recognised as the property of the individual that created it for a set period of time. This gave the artist the right to sell the fruits of their labours and make a living from it, which in turn allowed artists and writers to operate professionally without the film and music industries being the preserve of a wealthy elite. Today all that is changing.

It is now technologically possible for corporations and individuals to exploit the property rights of artists and writers and the piracy lobby insists that because it is possible it must also be perfectly ethical. In other words, technology has begun to dictate what is morally acceptable rather than morality dictating how technology is used. The debate has also misleadingly been framed in terms of censorship rather than elementary workers’ rights. A recent statement to the press made by the Pirate Bay after the UK’s internet service providers were ordered by the High Court to block the Swedish site was both cretinous and disingenuous. “The Western countries of the world all complaints [sic] about the censorship in Iran, China, Saudi Arabia and so on. But they are really the worst culprits themselves, having double morals in doing an even worse thing themselves.”

You could be forgiven for confusing this with a child throwing their food off the plate because Mummy won’t give them the big plastic spoon. Ensuring that people are paid sufficiently for their work (an admirable and progressive goal one would think) has very little to do with censorship and is in no way comparable to the repression of governments that have been known to “disappear” their critics. One almost expects those who run the Pirate Bay to come out and say they are being “oppressed” because they’ve run out of chocolate Hobnobs.

Strangely, the cause of unfettered internet piracy is most often taken up by people on the political Left – a movement that has traditionally believed in the furtherance of workers’ rights as a first principle. Are brow-beaten musicians, film directors and writers not as deserving of a decent day’s pay as workers in other industries? Or are they exempt from such concerns because they make their living doing something they enjoy?

Internet piracy isn’t subversive. It is as much a part of the “I want” culture as Jimmy Carr’s clever accounting. As Mr Lowery puts it: “I have witnessed the impoverishment of many critically acclaimed but marginally commercial artists. There is no other explanation except for the fact that ‘fans’ made the unethical choice to take their music without compens ating these artists.”
http://blogs.independent.co.uk/2012/...er-accounting/





Is This Guilt Trip Necessary? Music File Sharing and the War On College Students
Matthew Lasar

These sort of commentaries represent our children as misers. But are they the ones responsible for rising income inequality and skyrocketing college costs?

“I am an avid music listener, concertgoer, and college radio DJ. My world is music-centric. I’ve only bought 15 CDs in my lifetime. Yet, my entire iTunes library exceeds 11,000 songs.”

These words, written by college radio general manager and NPR intern Emily White, will probably go down in history as the most remembered in the great music file sharing debate of our time. White acknowledged that most of her music collection comes from CD ripping, provoking a stinging takedown response from Camper Van Beethoven star David Lowery.

“On a personal level, I have witnessed the impoverishment of many critically acclaimed but marginally commercial artists. In particular, two dear friends: Mark Linkous (Sparklehorse) and Vic Chesnutt. Both of these artists, despite growing global popularity, saw their total incomes fall in the last decade. There is no other explanation except for the fact that ‘fans’ made the unethical choice to take their music without compensating these artists.”

My colleagues Paul Riismandel and Jennifer Waits have written very smart posts in response to Lowery and White’s comments. I’m less sympathetic to Lowery, myself. Most of the protests against file sharing (or “file stealing” if you insist) I read from musicians and from the content industry seem oblivious to the larger context of the problem, an economic war on the young that shows no signs of subsiding, and which is obviously a critical factor in the free content craze.

Deep empathy

“I also deeply empathize with your generation,” Lowery claims in his response to White. “You have grown up in a time when technological and commercial interests are attempting to change our principles and morality.”

What is so striking to me about Lowery’s commentary is its lack of empathy for White’s tech savvy generation, which paradoxically is looking down the barrel of the most dismal economic future that any wave of college students has faced in decades. Like Lowery, I too am a college teacher. But for whatever reason, I’m willing to notice larger factors in this discussion that Lowery doesn’t acknowledge:

• Tuition rates are rising at unsustainable levels for most college students. They rose on average at around eight percent at public colleges in 2011. But that’s nothing compared to California, the state that jacked up tuition to the tune of 21 percent last year.

• In response, students are borrowing more money than ever to finance their degrees. The New York Federal Reserve just issued a report indicating that student loan debt has now reached $904 billion in the first quarter of this year. That’s a $30 billion increase from just the previous quarter.

• Tuition hikes are only one factor in this spiral. As the value of their parents homes have collapsed, they’re contributing less and less to their kids college funds. The Federal Reserve says that household wealth in the US has declined by well over a third from 2007 through 2010 because of collapsing home values.

• When these kids graduate, an estimated 85 percent of them are moving back home with mom and dad, and taking low wage jobs like the ones offered by Apple Computer. Or they’re going to graduate school to rack up more debt.

Beyond finger wagging

This sad story didn’t begin with the Great Recession. It started around the time that the file sharing debate really exploded, around 2000, with the rise of Napster and other P2P services. That’s when income inequality in the US and elsewhere really began to accelerate. From that year onward, wages for most American households began to stagnate. Look at UC Berkeley economist Emanuel Saez’s chart on real income growth for most Americans: a miserable 6.8 percent during the Bush “expansion” of 2002-2007, wiped out by a shrinkage of negative 11.6 percent over the subsequent two years, and a pathetic 0.2 percent “comeback” during the Obama administration.

“Between 2000 and 2010, the number of children living in poverty in America increased by 41 percent, and now includes nearly one-quarter of our kids,” reports The New York Times.

Lowery’s screed is tone deaf to all of this. Then he offers a litany of device and access costs that college students pony up for.

“Why are we willing to pay for computers, iPods, smartphones, data plans, and high speed internet access but not the music itself? Why do we gladly give our money to some of the largest richest corporations in the world but not the companies and individuals who create and sell music?”

“Congratulations,” he continues, “your generation is the first generation in history to rebel by unsticking it to the man and instead sticking it to the weirdo freak musicians!”

This is way off. College students aren’t paying money for computers and data plans out of some malicious desire to hurt musicians, they’re doing so because they have to, just like they have to mortgage their futures to stay in school.

So here’s the Victorian message we older folks give college and high school students:

“We lost a bundle on our homes and we don’t want to raise our taxes, so you’ll have to borrow much more money for your education as college tuition costs rise. When you graduate, the best you can expect are low paying jobs and debt default. But despite all this, we expect you to collectively pay millions of dollars for one of the few commodities whose retail cost has dramatically dropped over the last decade: recorded music.”

Yeah, right. Good luck with this. What bugs me the most about these laments from musicians is that they give the impression that recording and performance artists are the only people who have suffered over the last decade. Sorry, but its been a little tough for teachers, manufacturing workers, radio and newspaper journalists, and about one hundred other categories of people, too—our children prominent among them.

I expect to get at least one response mentioning some rich brat from Harvard who shares files, plus a lecture about how “none of this condones stealing”—blah blah blah.

Look, I get it. I don’t rip CDs. I don’t P2P files. I dutifully buy mp3s on iTunes and Amazon. But let’s get real folks. We can debate the morality of file sharing until we are blue in the face. We can get the Federal government to regulate Google and the rogue sites via SOPA and other nasty proposed laws (if we really want to go that route). But bottom line: not a few of our kids are acting like economic realists because of economic realities. If we really want to fix this problem, we need to plug those realities into the discussion and start fixing them, too.
http://www.radiosurvivor.com/2012/06...lege-students/





Cdn Fed Court Says No Copyright Infringement For Linking, Posting Several Paragraphs from Article
Michael Geist

The Federal Court of Canada has issued an important decision involving copyright and posting content online. The case involves a lawsuit launched by Richard Warman and the National Post against Mark and Constance Fournier, who run the FreeDominion website. Warman and the National Post sued the site over the appearance of two articles and an inline link to photograph that appeared on the forum. The court dismissed all three claims.

While the first claim (Warman's article) was dismissed on the basis that it took too long to file the lawsuit, the legal analysis on the National Post claim involving an article by Jonathan Kay assesses the copyright implications of posting several paragraphs from an article online. In this case, the article was 11 paragraphs long. The reproduction on the Free Dominion site included the headline, three complete paragraphs and part of a fourth. The court ruled that this amount of copying did not constitute a "substantial part" of the work and therefore there was no infringement. The court added that in the alternative, the reproduction of the work was covered by fair dealing, concluding that a large and liberal interpretation of news reporting would include posts to the discussion forum. The decision then includes an analysis of the six factor test and concludes that the use was fair.

The court's discussion is important for several reasons. First, the finding that several paragraphs do not constitute a substantial part of the work has echoes to the Supreme Court of Canada hearing in December when the court opened the door to questions about some of the copying in schools not rising to the level of substantial copying. Moreover, if this amount of copying is not substantial, it has implications in a wide range of additional cases (including the Access Copyright model licence). Second, the court's conclusion is critically important to online chat forums, blogs, and other venues where copying several paragraphs from an article is quite common. Given the court's analysis, such copying appears to be permissible on at least two grounds, including the notion that such postings can be treated as news reporting for fair dealing purposes.

The third claim involved a link to a photograph posted on the photographer's site. The court had no trouble concluding that the link was not copyright infringement, rightly noting that the photographer authorized the communication of the work by posting it on his website. This finding should put an end to claims that linking to copyright materials somehow raises potential legal risks. The Supreme Court of Canada has already ruled against attributing defamation to such links and now the Federal Court has concluded that links cannot be said to constitute unauthorized communication and therefore infringement. The implications once again extend to forums, blogs, and other venues as well as the Access Copyright model licence.
http://www.michaelgeist.ca/content/view/6558/125/





The Missing Copyright Docs, Pt 1: Justice Dept Warned About Constitutionality of Digital Lock Rules
Michael Geist

The House of Commons may have passed Bill C-11, but the constitutional concerns with the copyright bill and its digital lock rules will likely linger for years. Many experts believe that the government's decision to adopt one of the most restrictive digital lock approaches in the world - it creates potential liability without actual copyright infringement - renders the provision vulnerable to constitutional challenge.

The Department of Justice's take on the constitutional concerns has long been the subject of speculation, yet the legal opinion is protected by solicitor-client privilege. However, late last week I received records from an Industry Canada access to information request that includes the internal departmental analysis of digital lock rules that was prepared in advance of Bill C-32. The document includes a summary of the Department of Justice legal opinion, information on other Justice legal opinions, and details of concerns raised internally by the Competition Bureau (the Competition Bureau concerns will be discussed in a separate post tomorrow). The net result is that the document confirms that there were concerns within Industry Canada and from the Department of Justice about the constitutionality of the digital lock approach. According to Industry Canada's analysis:

TPMs may raise some concerns under the Canadian Charter of Rights and Freedoms, especially with respect to the freedom of expression entailing the right to access information. For instance, provisions prohibiting the circumvention of DVD regional coding may violate the Charter where the user seeks to access information that is consistent with the rights (s)he may have purchased and where no copyright infringement occurs (N.B. Notwithstanding the potential constitutional invalidity of anti-circumvention provisions re. regional coding, the circumvention may nonetheless be unauthorized and therefore unlawful under applicable contractual terms).

The key source document is a legal opinion dated March 2, 2007, from the Department of Justice on the "assessment of potential Charter risks of prohibiting the act of circumvention of access-control TPMs and the provision of services or sale of devices to circumvent any kind of TPM." The opinion, which was likely updated for Bill C-11, is described in the Industry Canada summary as follows:

DOJ's opinion overall suggests that legislation prohibiting anti-circumvention acts, devices and services would not be held unconstitutional (either they would not breach the freedom of expression rights or, if they did contravene, would be justified) where they are tied/linked to copyright infringement [emphasis added].

Reserves: May be a problem with Charter if no exception for the perceptually disabled or if too broad so as to capture publication of data (e.g. encryption research data) in an academic context.

The summary suggests that the Department of Justice has raised constitutional concerns with digital lock rules that are not tied or linked to copyright infringement. Now consider what the government said in its clause-by-clause analysis of then Bill C-32, also obtained under Access to Information:

Generally, an owner of copyright in a work or other subject matter for which this prohibition has been contrevened has the same remedies as if this were an infringement of copyright (proposed s.41(2)). However, a contravention of this prohibition is not an infringement of copyright and the defences to infringement of copyright are not defences to these prohibitions.

Bringing together the Department of Justice legal opinion with the government's analysis of its own bill confirms the current digital lock approach is vulnerable to a constitutional challenge.

Moreover, the reference to particular problems with respect to the perceptually disabled is important because though there is an exception, it is ineffective. As the Provincial Resource Centre for the Visually Impaired (PRCVI) British Columbia, which works to assist blind and visually impaired students, argued:

The exception that permits circumvention of technological protection measures (TPMs) and the means to circumvent these measures for the purpose of producing alternate formats (Section 41.16(1)) may be largely nullified by the condition “to not unduly impair the technological protection measure.” According to the Canadian Library Association there is no effective technical way to remove the TPMs and to restore them after an alternate format has been created. The TPMs would in all likelihood, interfere with the use of some, if not all, of the adaptive technologies used by students with perceptual disabilities to access educational materials.

If the exception is largely nullified by the "unduly impair" language, a constitutional challenge by groups representing the visually impaired might stand a good chance of success.

Interestingly, the DOJ also raised the question of whether Canada is arguably already compliant with the WIPO Internet treaties without the need for additional legislation:

DOJ notes that some Canadian legislation does prohibit TPM circumvention in certain specific instances. Section 9(1) of the Radiocommunication Act prohibits the unauthorized decoding of encrypted subscription programming signals and network feeds. Section 341.1 and 342.2 of the Criminal Code prohibit, among other things, the fraudulent interception of a function of a computer system.

The summary elsewhere states these "would unlikely be sufficient to meeting international standards", but it acknowledges that the RCMP has used these provisions to prosecute a producer/distributor of circumvention devices used in video game consoles. The Industry Canada summary also points to multiple other DOJ legal opinions on the WIPO Internet Treaties, including opinions on ratification, privacy issues, and the TPM provisions. It is presumably these opinions that supported the approach found in Bill C-60, the 2005 Canadian copyright bill that linked circumvention to copyright infringement.

The government's C-11 approach, which seemingly ignored the Department of Justice's legal advice on the constitutional vulnerability of digital lock rules that are not linked or tied to copyright infringement, suggests that a future constitutional challenge of C-11 may be possible. Moreover, a constitutionally vulnerable bill is not the only problem, as the Industry Canada document also places the spotlight on criticisms from the Competition Bureau. More on those concerns in a post tomorrow.
http://www.michaelgeist.ca/content/view/6557/125/





EU Commissioner Reveals He Will Simply Ignore Any Rejection Of ACTA By European Parliament Next Week
Glyn Moody

The day before the EU's International Trade committee (INTA) recommended that the European Parliament should reject ACTA, the EU commissioner with responsibility for the treaty, Karel De Gucht, had given a speech to its members, trying to win them over. Although it was short, it turns out to be highly revealing about the European Commission's future ACTA strategy. Here's what he said:

If you decide for a negative vote before the European Court rules, let me tell you that the Commission will nonetheless continue to pursue the current procedure before the Court, as we are entitled to do. A negative vote will not stop the proceedings before the Court of Justice.

That is, whatever happens next week, the European Commission will wait for the European Court of Justice (ECJ) to rule on whether ACTA is compatible with EU law. If it is found to be incompatible, De Gucht admits that rather than accept this ruling, the European Commission will try to find some trick to circumvent it:

If the Court questions the conformity of the agreement with the Treaties we will assess at that stage how this can be addressed.

This implicitly confirms that the referral was simply a way to buy time, rather than an honest question about ACTA's legality.

Even assuming the ECJ rules eventually that ACTA is compatible, there could still be a problem if, in the meantime, the European Parliament has voted not to ratify it. Here's what De Gucht says he would do in that case:

First, I would consider proposing some clarifications to ACTA. For example on enforcement in the digital environment. We could look at this in the light of the discussions you will have had on legislative proposals which the European Commission is set to put before the Parliament and the Council. Or for example, we could seek to clarify further the meaning of 'commercial scale'.

Remember that ACTA is now signed, and cannot be altered; so De Gucht is instead trying to fob off European politicians with this vague idea of "clarifications" -- as if more vagueness could somehow rectify the underlying problems of an already dangerously-vague treaty. That's clearly just a sop; here's the real plan:

Second, once we will have identified and discussed these possible clarifications, I would intend to make a second request for consent to the European Parliament. Whether the Parliament will consider it under this legislature or the subsequent one, will be for you to decide.

This is an extraordinary admission. De Gucht says that even if the European Parliament unequivocally refuses to ratify ACTA next week, he will simply ignore that result, and re-submit it at a later date.

In other words, De Gucht won't accept the idea that the European electorate, through their representatives in the European Parliament, might possibly want to reject something they were not allowed to know about until late in the negotiating process, and to which they were unable to provide any meaningful input. In his view, ACTA must be passed, and ACTA will be passed -- whatever anyone else thinks about it.

Let's hope that the members of the European Parliament bear in mind this undisguised contempt for the democratic process in Europe -- and for them -- when it comes to voting on ACTA next week, and any time thereafter it might be re-presented to them under De Gucht's shameful plans.
http://www.techdirt.com/articles/201...ext-week.shtml





Sweden 'Can't Offer Assange Guarantees'

Sweden would not be able to offer Julian Assange a diplomatic guarantee against being extradited to the United States should the WikiLeaks founder end up back in Sweden to face sex crime accusations, according to a justice ministry official.
http://www.thelocal.se/email/326/88342/41636/20120625/





‘Big Brother’? No, It’s Parents
Somini Sengupta

When her children were ready to have laptops of their own, Jill Ross bought software that would keep an eye on where they went online. One day it offered her a real surprise. She discovered that her 16-year-old daughter had set up her own video channel.

Using the camera on her laptop, sometimes in her bedroom, she and a friend were recording mundane teenage banter and broadcasting it on YouTube for the whole world to see.

For Ms. Ross, who lives outside Denver, it was a window into her daughter’s mind and an emblem of the strange new hurdles of modern-day parenting. She did not mention it to her daughter; she just subscribed to the channel’s updates. The daughter said nothing either; she just let Mom keep watching.

“It’s a matter of knowing your kids,” Ms. Ross said of her discovery.

Parents can now use an array of tools to keep up with the digital lives of their children, raising new quandaries. Is surveillance the best way to protect children? Or should parents trust them to share if they are scared or bewildered by something online?

The answers are as varied as parents themselves. Still, the anxieties of parenting in the digital age have spawned a mini-industry, as start-ups and established companies market new tools to track where children go online, who they meet there and what they do. Because children are glued to smartphones, the technology can allow parents to track their physical whereabouts and even monitor their driving speed.

If, a few years ago, the emphasis was on blocking children from going to inappropriate sites on the family computer, today’s technologies promise to embed Mom and Dad — and occasionally Grandma — inside every device that children are using, and gather intelligence on them wherever they go.

A smartphone application alerts Dad if his son is texting while driving. An online service helps parents keep tabs on every chat, post and photo that floats across their children’s Facebook pages. And another scans the Web in case a child decides to try a new social network that the grown-ups have not even heard of yet.

The spread of cellphones and tablets in the hands of children has complicated matters, giving rise to applications that attract the young and worry parents. Earlier this month, for instance, came revelations that an app designed for flirting, called Skout, had led to three sexual assault cases involving children across the country. Even on Facebook, studies have repeatedly shown, there are plenty of children younger than 13, the minimum age for members, and many of them join with help and supervision from their parents.

The average American family uses five Internet-enabled devices at home, including smartphones, a recent survey by Cox Communications and the National Center for Missing and Exploited Children found, while barely one in five parents uses parental controls on those devices.

In Richmond, Va., Mary Cofield, 62, is one of the careful ones. She struck a deal with her 15-year-old granddaughter last year. The girl was offered an Android phone with full Internet privileges, so long as Grandma could monitor her every move.

“My theory is, you’ve got to be in the game to help them know what’s wrong and what’s right,” she said. “Keeping them from it is not going to work. You can either be out there with them in the game — or they’ll be out there without you.”

Ms. Cofield, a retired government tax agent who runs an online travel business, chose a tool called uKnowKids.com, which combs the granddaughter’s Facebook page and text messages. UKnowKids sends her alerts about inappropriate language. It also offers Ms. Cofield a dashboard of the child’s digital activities, including what she says on Twitter, whom she texts and what photos she is tagged in on Facebook. It translates teenage slang into plain English she can understand: “WUD” is shorthand for “What are you doing?” Ms. Cofield checks it daily.

Often, she says, she gleans when the girl is having trouble with a boy, or when there is conflict among friends. Most often, Ms. Cofield knows to keep her mouth shut. “Being privy to that information and not using it is also difficult,” she confessed. “If I did that, she would definitely go underground. I would be hopping on her every day.”

Surveys, including by the Pew Research Center, have found that two-thirds of parents check their children’s digital footprints and nearly 40 percent follow them on Facebook and Twitter. But the Pew study suggests that this monitoring is also likely to lead to arguments between parent and child.

What’s more, technology is at least as nimble as adolescents, and neither parents nor the technology they buy can always read a teenager’s mind. Sometimes children deactivate their Facebook accounts except at night, when they know their parents are not likely to be logging on. They roll over to new sites, often using pseudonyms. Very often they speak in code designed to stump parents.

Danah Boyd, a senior researcher at Microsoft Research who studies American youth online, offered the example of a teenage girl who was growing increasingly frustrated with her mother’s leaving comments on everything she posted on Facebook. Once, when she was feeling particularly low, she posted the song “Always Look on the Bright Side of Life.”

Her mother took it literally, which is what the girl had wanted. Her friends, however, read it for what it was: The girl was sad, and her post was meant to be ironic.

Technology companies now market tools for parents of children at every age group. The next version of Apple’s mobile operating system will offer a single-app mode so a parent can lock a toddler into one activity on an iPad.

Security companies like Symantec and Trend Micro offer computer software that detects when a child tries to visit a blocked Web site or creates a new social network account. Infoglide, based in Austin, Tex., whose bread and butter is making antifraud software, recently introduced a tool called MinorMonitor, which like UKnowKids mines children’s Facebook pages for signs of trouble.

Independent measurements of the market for family safety tools are hard to come by, and most companies do not release sales information. But that the market is large — and growing — is evident in two things: every security company and cellphone carrier is pitching such products, and start-ups in this field are popping up every month.

Symantec says it added a million new subscribers to its Norton Online Family service last year.

A text message application for the iPhone called textPlus allows Kyle Reed of Golden, Colo., to be copied on every text message his teenage son sends his girlfriend. “I feel torn a little bit. It’s kind of an invasion of privacy,” he said. “But he’s 13. I want to protect him.”

Dan Sherman of Jackson, N.J., is what you might call the alpha monitor of his children’s digital lives, which is not surprising considering that he works in computer security.

At home, he has installed a filter that blocks pornographic sites and software that tracks Web visits. He has set parental controls on the iPhones of his 8- and 13-year-old daughters so they cannot download applications. Access to the app store on the 8-year-old’s Kindle Fire is protected with a password. And the older daughter’s Facebook account is tracked by MinorMonitor, which alerts Mr. Sherman if there are references to bullying or alcohol.

Does he worry that his daughters think he does not trust them? Mr. Sherman says they should learn that they will be monitored throughout their lives: “It’s not any different from any employer.”

The older daughter, Alexis, said that for now, at least, she does not mind the monitoring. She feels safer for it, she says, “like I’m being watched over.”

She also knows that it affects what she posts for public consumption. Recently, for example, she was tempted to rail on Facebook against a friend who had spread rumors about her, but she checked herself when she thought about what her mother might say. “Having your parents monitor makes you think twice about what you put,” Alexis said.

Ms. Ross, of Colorado, once had a tool that disabled Internet access in the house after a certain number of hours. But her children kept turning it off. Now another program helps her keep an eye on how much time they spend online, so if one of her three girls complains that she does not have time for homework, Ms. Ross need only say: “Want me to tell you how much time you spent on Facebook this week?”

Last Christmas, one of Ms. Ross’s friends, Lynn Schofield Clark, gave her 11-year-old daughter a disabled iPhone on which to listen to music. The child brightly said that a friend at school had showed her how to download an app that let her send text messages and make calls — which is not what her parents had in mind.

Ms. Clark, who has written a book about parenting styles and technology called “The Parent App,” says she was relieved her child had confided in her. She hopes she will continue to confide, so she does not have to track everything her daughter does online. “It’s too easy to get involved in surveillance,” Ms. Clark said. “That undermines our influence as parents. Kids interpret that as a lack of trust.”
https://www.nytimes.com/2012/06/26/t...en-online.html





Your E-Book Is Reading You

Digital-book publishers and retailers now know more about their readers than ever before. How that's changing the experience of reading.
Alexandra Alter

It takes the average reader just seven hours to read the final book in Suzanne Collins's "Hunger Games" trilogy on the Kobo e-reader—about 57 pages an hour. Nearly 18,000 Kindle readers have highlighted the same line from the second book in the series: "Because sometimes things happen to people and they're not equipped to deal with them." And on Barnes & Noble's Nook, the first thing that most readers do upon finishing the first "Hunger Games" book is to download the next one.

In the past, publishers and authors had no way of knowing what happens when a reader sits down with a book. Does the reader quit after three pages, or finish it in a single sitting? Do most readers skip over the introduction, or read it closely, underlining passages and scrawling notes in the margins? Now, e-books are providing a glimpse into the story behind the sales figures, revealing not only how many people buy particular books, but how intensely they read them.

We Know What You Read

The perfect man, according to data collected by digital publisher Coliloquy from romance-novel readers, has a European accent and is in his 30s with black hair and green eyes.

For centuries, reading has largely been a solitary and private act, an intimate exchange between the reader and the words on the page. But the rise of digital books has prompted a profound shift in the way we read, transforming the activity into something measurable and quasi-public.

The major new players in e-book publishing—Amazon, Apple and Google—can easily track how far readers are getting in books, how long they spend reading them and which search terms they use to find books. Book apps for tablets like the iPad, Kindle Fire and Nook record how many times readers open the app and how much time they spend reading. Retailers and some publishers are beginning to sift through the data, gaining unprecedented insight into how people engage with books.

Publishing has lagged far behind the rest of the entertainment industry when it comes to measuring consumers' tastes and habits. TV producers relentlessly test new shows through focus groups; movie studios run films through a battery of tests and retool them based on viewers' reactions. But in publishing, reader satisfaction has largely been gauged by sales data and reviews—metrics that offer a postmortem measure of success but can't shape or predict a hit. That's beginning to change as publishers and booksellers start to embrace big data, and more tech companies turn their sights on publishing.

Barnes & Noble, which accounts for 25% to 30% of the e-book market through its Nook e-reader, has recently started studying customers' digital reading behavior. Data collected from Nooks reveals, for example, how far readers get in particular books, how quickly they read and how readers of particular genres engage with books. Jim Hilt, the company's vice president of e-books, says the company is starting to share their insights with publishers to help them create books that better hold people's attention.

The stakes are high for the company as it seeks a greater share of the e-book market. Sales of Nook devices rose 45% this past fiscal year, and e-book sales for the Nook rose 119%. Overall, Nook devices and e-books generated $1.3 billion, compared to $880 million the previous year. Microsoft recently invested $300 million for a 17.6% stake of the Nook.

Mr. Hilt says that the company is still in "the earliest stages of deep analytics" and is sifting through "more data than we can use." But the data—which focuses on groups of readers, not individuals—has already yielded some useful insights into how people read particular genres. Some of the findings confirm what retailers already know by glancing at the best-seller lists. For example, Nook users who buy the first book in a popular series like "Fifty Shades of Grey" or "Divergent," a young-adult series by Veronica Roth, tend to tear through all the books in the series, almost as if they were reading a single novel.

Barnes & Noble has determined, through analyzing Nook data, that nonfiction books tend to be read in fits and starts, while novels are generally read straight through, and that nonfiction books, particularly long ones, tend to get dropped earlier. Science-fiction, romance and crime-fiction fans often read more books more quickly than readers of literary fiction do, and finish most of the books they start. Readers of literary fiction quit books more often and tend skip around between books.

Those insights are already shaping the types of books that Barnes & Noble sells on its Nook. Mr. Hilt says that when the data showed that Nook readers routinely quit long works of nonfiction, the company began looking for ways to engage readers in nonfiction and long-form journalism. They decided to launch "Nook Snaps," short works on topics ranging from weight loss and religion to the Occupy Wall Street movement.

Pinpointing the moment when readers get bored could also help publishers create splashier digital editions by adding a video, a Web link or other multimedia features, Mr. Hilt says. Publishers might be able to determine when interest in a fiction series is flagging if readers who bought and finished the first two books quickly suddenly slow down or quit reading later books in the series.

"The bigger trend we're trying to unearth is where are those drop-offs in certain kinds of books, and what can we do with publishers to prevent that?" Mr. Hilt says. "If we can help authors create even better books than they create today, it's a win for everybody."

Some authors welcome the prospect. Novelist Scott Turow says he's long been frustrated by the industry's failure to study its customer base. "I once had an argument with one of my publishers when I said, 'I've been publishing with you for a long time and you still don't know who buys my books,' and he said, 'Well, nobody in publishing knows that,' " says Mr. Turow, president of the Authors Guild. "If you can find out that a book is too long and you've got to be more rigorous in cutting, personally I'd love to get the information."

Others worry that a data-driven approach could hinder the kinds of creative risks that produce great literature. "The thing about a book is that it can be eccentric, it can be the length it needs to be, and that is something the reader shouldn't have anything to do with," says Jonathan Galassi, president and publisher of Farrar, Straus & Giroux. "We're not going to shorten 'War and Peace' because someone didn't finish it."

Publishers are only just beginning to mull over the potential uses for e-reading data. Many are skeptical that analytics can aid in the industry's ongoing battle to woo consumers who are increasingly distracted by games and social media. But at a time when traditional publishers are losing ground to tech giants like Amazon and Apple, better analytics seem to offer tantalizing possibilities.

Amazon, in particular, has an advantage in this field—it's both a retailer and a publisher, which puts the company in a unique position to use the data it gathers on its customers' reading habits. It's no secret that Amazon and other digital book retailers track and store consumer information detailing what books are purchased and read. Kindle users sign an agreement granting the company permission to store information from the device—including the last page you've read, plus your bookmarks, highlights, notes and annotations—in its data servers.

Amazon can identify which passages of digital books are popular with readers, and shares some of this data publicly on its website through features such as its "most highlighted passages" list. Readers digitally "highlight" selections using a button on the Kindle; they can also opt to see the lines commonly highlighted by other readers as they read a book. Amazon aggregates these selections to see what gets underlined the most. Topping the list is the line from the "Hunger Games" trilogy. It is followed by the opening sentence of "Pride and Prejudice."

"We think of it as the collective intelligence of all the people reading on Kindle," says Amazon spokeswoman Kinley Pearsall.

Some privacy watchdogs argue that e-book users should be protected from having their digital reading habits recorded. "There's a societal ideal that what you read is nobody else's business," says Cindy Cohn, legal director for the Electronic Frontier Foundation, a nonprofit group that advocates for consumer rights and privacy. "Right now, there's no way for you to tell Amazon, I want to buy your books, but I don't want you to track what I'm reading."

Amazon declined to comment on how it analyzes and uses the Kindle data it gathers.

EFF has pressed for legislation to prevent digital book retailers from handing over information about individuals' reading habits as evidence to law enforcement agencies without a court's approval. Earlier this year, California instituted the "reader privacy act," which makes it more difficult for law-enforcement groups to gain access to consumers' digital reading records. Under the new law, agencies must get a court order before they can require digital booksellers to turn over information revealing which books their customers have browsed, purchased, read and underlined. The American Civil Liberties Union and EFF, which partnered with Google and other organizations to push for the legislation, are now seeking to enact similar laws in other states.

Bruce Schneier, a cyber-security expert and author, worries that readers may steer clear of digital books on sensitive subjects such as health, sexuality and security—including his own works—out of fear that their reading is being tracked. "There are a gazillion things that we read that we want to read in private," Mr. Schneier says.

There are some 40 million e-readers and 65 million tablets in use in the U.S., according to analysts at Forrester Research. In the first quarter of 2012, e-books generated $282 million in sales, compared to $230 million for print, the Association of American Publishers recently found.

Meanwhile, the shift to digital books has fueled an arms race among digital start-ups seeking to cash in on the massive pool of data collected by e-reading devices and reading apps. New e-reading services, which allow readers to purchase and store books in a digital library and read them on different devices, have some of the most sophisticated reader tracking software. The digital reading platform Copia, which has 50,000 subscribers, collects detailed demographic and reading data—including the age, gender and school affiliation of people who bought particular titles, as well as how many times the books were downloaded, opened and read—and shares its findings with publishers. Copia aggregates the data, so that individual users aren't identifiable, and shares that information with publishers that request it.

Kobo, which makes digital reading devices and operates an e-reading service that stocks 2.5 million books and has more than eight million users, has recently started looking at how readers as a whole engage with particular books and genres. The company tracks how many hours readers spend on particular titles and how far they get. Kobo recently found, for example, that most readers who started George R.R. Martin's fantasy novel "A Dance With Dragons" finished the book, and spent an average of 20 hours reading it, a relatively fast read for a 1,040-page novel.

Some publishers are already beginning to market test books digitally, before releasing a print edition. Earlier this year, Sourcebooks, which publishes 250 titles a year, began experimenting with a new model of serial, online publishing. Sourcebooks has released early online editions for half a dozen titles, ranging from romance to young adult to nonfiction books, and has solicited questions and suggestions from readers. Eventually, readers' feedback will be incorporated into the print version.

Scholastic, which publishes popular young-adult fiction such as Harry Potter and "The Hunger Games," created online message boards and interactive games connected to its popular series "39 Clues." The online game and message board, which has 1.9 million registered users, allows the publisher to track which story lines and characters are resonating with young readers. David Levithan, Scholastic's publisher and editorial director, says the online feedback has shaped the ongoing "39 Clues" series and helped to turn it into a global franchise with more than 15 million copies in print.

"You very rarely get a glimpse into the reader's mind," he says. "With a printed book, there's no such thing as an analytic. You can't tell which pages are dog-eared."

Few publishers have taken the experiment as far as Coliloquy, a digital publishing company that was created earlier this year by Waynn Lue, a computer scientist and former Google engineer, and Lisa Rutherford, a venture capitalist and former president of Twofish, a gaming-analytics firm.

Coliloquy's digital books, which are available on Kindle, Nook and Android e-readers, have a "choose-your-own-adventure"-style format, allowing readers to customize characters and plot lines. The company's engineers aggregate and pool the data gleaned from readers' selections and send it to the authors, who can adjust story lines in their next books to reflect popular choices.

"Data and analytics, we've seen how it revolutionized certain industries like mobile apps and gaming," says Mr. Lue. "With reading, we don't yet have that engagement data, and we wanted to provide a feedback mechanism that didn't exist before between authors and readers."

Coliloquy developed its software through Amazon's Kindle data developer program, which allows outside companies to create interactive content for Kindle. Their proprietary data platform draws on complex algorithms, similar to gaming software, that lets readers choose from different narrative pathways.

The company hired six editors and five technology and product developers and began recruiting authors from a range of genres, including romance, nonfiction, young adult fantasy and erotica. Since launching this past January, the company has released eight titles, and is expanding into crime fiction, legal thrillers and experimental fiction. Mr. Lue and Ms. Rutherford declined to provide sales figures for Coliloquy's titles, citing a nondisclosure agreement with Amazon. But they say more than 90% of readers who buy Colloquy's books, which range from $2.99 to $7.99, finish reading them, and 67% reread the books.

In "Parish Mail," Kira Snyder's young adult mystery series set in New Orleans, readers can decide whether the teenage protagonist solves crimes by using magic or by teaming up with a police detective's cute teenage son. Readers of "Great Escapes," an erotic romance series co-written by Linda Wisdom and Lynda K. Scott, can customize the hero's appearance and the intensity of the love scenes. A recent report from Coliloquy showed that the ideal hero for "Great Escapes" readers is tall with black hair and green eyes, a rugged, burly build and a moderately but not overly hairy chest.

In Tawna Fenske's romantic caper "Getting Dumped"—which centers on a young woman who finds work at a landfill after getting laid off from her high-profile job at the county's public relations office—readers can choose which of three suitors they want the heroine to pursue. The most recent batch of statistics showed that 53.3% chose Collin, a Hugh Grant type; 16.8% chose Pete, the handsome but unavailable co-worker; and 29.7% of readers liked Daniel, the heroine's emotionally distant boyfriend.

Ms. Fenske originally planned to get rid of Daniel by sending him to prison and writing him out of the series. Then she saw the statistics. She decided 29.7 % was too big a chunk of her audience to ignore.

"So much of the time, it's an editor and agent and publisher telling you, 'This is what readers want,' but this is hands-on reader data," says Ms. Fenske, 37, who lives in Bend, Ore. "I've always wondered, did that person buy it and stop after the first three pages? Now I can see they bought it and read it in the first week."
http://online.wsj.com/article/SB1000...051438304.html





CEO Of Internet Provider Sonic.net: We Delete User Logs After Two Weeks. Your Internet Provider Should, Too.
Andy Greenberg

Dane Jasper’s tiny Internet service provider Sonic.net briefly took the national spotlight last October, when it contested a Department of Justice order that it secretly hand over the data of privacy activist and WikiLeaks associate Jacob Appelbaum. But Jasper’s conversion into a privacy true believer began earlier, with a less-discussed subpoena: one regarding a pornographic film with an unprintable title.

Eighteen months ago, Sonic.net began to see a string of legal requests for its users’ data, mostly for copyright infringement cases involving x-rated films with embarrassing names: When given the option to settle or have their name attached to a smutty video in a legal case, Jasper saw users paying up–even when they seemed to be innocent.

So he took an unprecedented step to protect the privacy of his 40,000 or so Northern California customers: He cut the time that his ISP stores logs of users’ Internet activity to just two weeks–a tiny period compared to the 18-36 months ISPs like Verizon, AT&T, Qwest, Cox, Comcast and Time Warner hold onto users’ private information.

I sat down with Jasper in his Santa Rosa office to talk about his stance as a privacy pragmatist, the landmark WikiLeaks case he’s been involved in, and why major ISPs refuse to follow his move to cut data retention times. Here’s an edited transcript of our conversation.

Andy Greenberg: It seems like you’ve made a point of trying to become the most privacy-preserving Internet service provider (ISP) in operation in the United States.

Dane Jasper: We have.

AG: Can you tell me what are the concrete ways you’ve done that?

DJ: So, we’ve stood up for our customers, at our expense, when we had an option not to. We’ve demonstrated a willingness to put our money where our mouth is, and spend resources where we felt it was warranted to legally defend our customers. And the other major thing that we’ve done is to make a commitment to limit our logging interval.

AG: What’s your limit?

DJ: We limit it to two weeks.

AG: Is that the shortest that you know of?

DJ: No, some VPN providers commit to no logs. But it’s the shortest retention period of any facilities-based Internet access provider that I know of, yes. Comcast or AT&T or Verizon typically keep their logs for 18 to 36 months.

AG: And why did you make that decision?

DJ: So, what we saw was a shift towards customers being made part of a business model that involved–I don’t know if extortion is the right word–but embarassment for gain.

An individual would download a movie, using bittorrent, and infringe copyright. And that might be our customer, like Bob Smith who owns a Sonic.net account, or it might be their spouse, or it might be their child. Or it might be one of his three roommates in a loft in San Francisco, who Bob is not responsible for, and who rent out their loft on AirBnB and have couch surfers and buddies from college and so on and open Wifi.

When lawyers asked us for these users’ information, some of our customers I spoke with said “Oh yeah, crap, they caught me,” and were willing to admit they engaged in piracy and pay a settlement. But in other cases, it turned out the roommate did it, or no one would admit to doing it. But they would pay the settlement anyway. Because no one wants to be named in the public record in a case from So-And-So Productions vs. 1,600 names including Bob Smith for downloading a film called “Don’t Tell My Wife I B—F—— The Babysitter.”

AG: Is that a real title?

DJ: Yes. I’ve read about cases where a lawyer was doing this for the movie “The Expendables,” and 5% of people settled. So then he switched to representing someone with an embarassing porn title, and like 30% of people paid.

It seemed like half the time, the customer wasn’t the one right one, but they rolled over because it would be very embarassing. And I think that’s an abuse of process. I was unwilling to become part of that business model. In many cases the lawyers never pursued the case, and it was all bluster. But under that threat, you pay.

AG: So when did you decide to limit data retention?

DJ: Well, we saw a big uptake in this problem early last year. The “Don’t Tell My Wife” one was the first, and we laughed about it. But then we saw more and more coming in. So I looked at this, and it was a cynical, awful business.

I met with my system team, and I said, why are we keeping these logs? The primary reasons were law enforcement and spam, so we looked at our law enforcement subpoenas, and the spam processing. In the case of spam, someone is infected and becomes part of a botnet, somebody kicks off a spam job and the customer dumps 20,000 emails in a day. We get complaints, and they’re all about the last day. My systems team also only needed logs for a day.

So then I looked at law enforcement subpoenas and tried to balance an ability to help law enforcement when it’s morally right to do so with an inability to help anybody beyond a certain window. In the civil copyright cases, we’d get a subpoena from them anywhere from 30-90 days later, sometimes longer after the alleged act of piracy has occurred.

We were concerned about cases where there’s a kidnapping, a threat to the human life, and the FBI is trying to find the kidnapper who sent a demand email yesterday or a week ago. We felt like two weeks was a good window that would allow us to address some things–both our own needs in the long term and the law enforcement’s dire needs in the mid-term–while omitting any ability to assist in what we felt was like an extortion racket. And so that was another concrete step we took last year, to reduce our logging interval to two weeks.

AG: What was it before?

DJ: Some things we kept for 30 days, other things for years. We didn’t have a defined procedure.

AG: Earlier, you mentioned fighting legal battles on behalf of your users. Can you say specifically what battles and which customers?

DJ: I probably can’t. I can tell you that the case you’ve probably read about regarding Jacob Appelbaum is under seal, and I can’t comment on that case. And obviously Appelbaum spoke with the Wall Street Journal reporter and reported that we informed him that we managed to get it unsealed enough to inform him. So, however the entire case is still under seal, so we can’t speak to the specific sides informing him.

We’ve committed to and published a policy of notification of customers when their data is subpoenaed. The typical subpoena that we will get will say “This is an ongoing investigation, and to protect the integrity of the investigation, we request that you please not inform your customer about the details of this subpoena while complying with it, now or ever.” Sometimes they’ll say “and if you are or do tell your customer, tell us that you have.”

I’m ok with that second part. but I’m not ok with the first. If something belongs under a seal, they should make that case to the judge. I shouldn’t be in the role of deciding whether or not someone should be informed about a law enforcement request for their information. So we instead say, “Here’s our policy document, we notify our customers, if that’s a problem for your investigation, you should make that case to a judge and put it under seal.”

AG: In Appelbaum’s case, did you actually have the seal raised or did you violate the seal?

DJ: We were unable to get the case unsealed, we were able to unseal it to a degree that we were allowed to inform our customer about compliance with the subpoena.

AG: Are there cases where you’ve fought not just to tell your customer about the subpoena but actually quash it, as Twitter is attempting to do in the case of Occupy Wall Street protestor Malcolm Harris?

DJ: I have to answer carefully. I can’t say anything specific about the Appelbaum case, so I can’t comment on whether we did or didn’t fight the release of his data. The only thing that we are able to say is to him is that we were forced to hand over his data.

AG: Did the Appelbaum case help convince you to limit your data retention?

DJ: I would answer that in a general way. All of the subpoenas that we receive from the various branches of law enforcement and all of the civil cases that we’ve processed over the last few years have all contributed to my outlook on privacy, and so I don’t want to say that there’s a cause and effect between those things. I will say that everything that we have received has been contributory towards our position around privacy.

AG: If your ISP is able to operate with only two weeks of logging, why can’t others like Comcast, AT&T, Verizon and Time Warner?

DJ: They should. I think ISPs need to minimize their logging to a degree that it works within their business, notify customers about subpoenas and, where subpoenas warrant resistance after review, they should resist them.

AG: Why don’t they?

DJ: I could only speculate. Costs. The cost is legal friction and lawyers.

AG: I’m sure it’s expensive to fight these legal battles over subpoenas. But what about logging for just two weeks? That’s not expensive.

DJ: I would speculate it would be an unpopular move that might result in more friction with law enforcement. Law enforcement has been lobbying to pass laws that would require service providers to keep 18-36 months of logs. It’s in their interests.

AG: Do ISPs keep the logs that long voluntarily to avoid being legislated to do so?

DJ: Or just to be cooperative. They’re running a business. Picking a fight with law enforcement isn’t part of their business model.

As a small provider, we can make an independent decision like this and it doesn’t matter in the overall ecosystem. But if a very large carrier made that decision, it would be much discussed. And potentially legislated.

AG: Have you faced friction with law enforcement as a result of your logging policy?

DJ: No. We’ve heard some expressions of surprise. But if they’re not asking us for data, they’re asking web hosts, websites, or email service providers.

I think we had one customer that wrote to us and said “Don’t protect the terrorists. Log everything you can. I don’t care about my privacy, because I’m not a terrorist.” But I think that that’s too simple away of looking at it.

AG: Do you think your privacy policy could be a business advantage? Do you market yourselves that way?

DJ: If you look at the marketing material, you won’t see us pitching this as a feature, and that’s intentional. I’m trying to protect my customers. The overall public. Not the self-selected subset who buys a service because they especially care about their privacy, or are an activist, or help some greater concern. I don’t think I can provide them adequate protection. Two weeks of logs is two weeks of logs. If they are a Chinese dissident living in the US they should be using Tor or something.

On the other hand, if I say to the public “Hey, this is a great place because we keep less logs,” I don’t want to attract people who want to break the law, and then find that we don’t have the data and they don’t get caught.

So I don’t think it’s appropriate to market on that basis. I think it’s appropriate to do it, but not to market it.

AG: Services like VPNs and proxies clearly build competitive advantage out of privacy, don’t they?

DJ: Are they really? I think it’s a cynical perversion. They are using privacy as an excuse to create a product that if you were really to get their true feelings about it, sells more because of piracy. They create a mechanism to enable piracy through total anonymity and they end up selling a lot of connections or VPN tunnels, or whatever their “privacy product” is. And I think that’s fraught with risk as well. It’s through that sort of exploitation of copyright holders that you’re going to get legislation around log retention.

AG: You’ve talked a lot about the effects of the lack of competition among ISPs in the U.S. Do you think that monopolistic environment is one reason that none of them has a privacy policy like yours?

DJ: If we had a true open access and a vibrant competitive environment, it would fix lots of problems. The whole network neutrality issue, that whole fight is not an issue if you had 30 service providers to choose from, because if one was goofing with your voice over IP, everybody would leave.

Similarly, if there were 30 service providers to choose from in every market, I think everyone would take better care of consumers’ privacy, too.

In the US, we made a shift in 2002 and decided that we were going to pick winners in each industry, and we’re going to have the incumbent cable company compete with the incumbent phone company, and maybe the power company will get into the business, and then there’ll be some wireless, and maybe satellite. But realistically, wireless is expensive and slow. Satellite is latent. Broadband over powerlines never really worked. So you end up with two to choose from, and if you only have two, one looks at the other, and they go, that guy is this fast, lets be that fast. That guy is $25 let’s be $20.

AG: That guy logs 18 to 36 months. Why shouldn’t we?

DJ: Right. Why do we want to pick a fight with law enforcement, or lobby congress, argue to pass laws about logging? So in a duopoly environment you get a number of effects that aren’t beneficial to consumers.

In an environment where you’ve got 30 providers to choose from, do privacy policies naturally improve? They might.
http://www.forbes.com/sites/andygree...er-should-too/





Minitel: The Rise and Fall of the France-Wide Web
Hugh Schofield

France is switching off its groundbreaking Minitel service which brought online banking, travel reservations, and porn to millions of users in the 1980s. But then came the worldwide web. Minitel has been slowly dying and the plug will be pulled on Saturday.

Many years ago, long before the birth of the web, there was a time when France was the happening-est place in the digital universe.

What the TGV was to train travel, the Pompidou Centre to art, and the Ariane project to rocketry, in the early 1980s the Minitel was to the world of telecommunications.

Thanks to this wondrous beige monitor attached to the telephone, while the rest of us were being put on hold by the bank manager or queueing for tickets at the station, the French were already shopping and travelling "online".

Other countries looked on in awe and admiration, and the French were proud.

As President Jacques Chirac boasted: "Today a baker in Aubervilliers knows perfectly how to check his bank account on the Minitel. Can the same be said of the baker in New York?"

Chirac was speaking in 1997, exactly half way through the life-cycle of France's greatest telecoms innovation.

At the time, he could be forgiven thinking it would last forever. This was the high point, with nine million Minitel sets installed in households around the country, an estimated 25 million users, and 26,000 services on offer.

But of course, the story was already written. The internet was moving in.

Today bakers from Timbuktu to Tallahassee are not just consulting their bank statements online, but doing just about everything else as well.

And so on Saturday, exactly 30 years after it was launched, the Minitel is bowing out. After that, the little beige box will answer no more.

It was born in the white heat of President Valery Giscard d'Estaing's technological great leap forward of the late 1970s.

An expert report then concluded that with proper investment the nation's telephone network could be complemented by a visual information system, accessed through screen-keyboard terminals.

"As well as being a technological project, it was political," says Karin Lefevre of France Telecom. "The aim was to computerise French society and ensure France's technological independence."

Rolled out experimentally in Brittany, Minitel went national in 1982, offering the telephone directory and not much else.

Gradually the offer increased to offer a vast array of services - banking, stock prices, weather reports, travel reservations, exam results, university applications, as well as access points to various bits of the state administration.

All users had to do was dial up a number on the keyboard, then follow instructions that juddered out in black and white across the screen.

It may have been the ultimate in computer clunk, but it worked.

"Of course it looks terribly old-fashioned by today's standards," says Lefevre. "But it was simple to use. You pressed a button and it did something. Just like on a tablet today."

Apart from ease of use, two other factors ensured Minitel's success. First was that it was distributed free of charge by the then state-owned France Telecom (or its predecessor the PTT).

This meant that even the poorest of households contained a set, subsidised by the taxpayer.

The other reason was the variety of content, facilitated by a business model that was not exactly free-market but for a while proved highly effective.

From the start, there were commercial interests that were highly suspicious of Minitel - the newspaper industry, which feared the new creation would drain vital small ads revenue.

So France being France, the government intervened to save the press. It made a rule which said that the only institutions entitled to provide services on Minitel were registered newspapers.

Soon these were creating all kinds of new ideas, leaving to France Telecom the hassle of collecting and then passing on their monthly fees.

The most lucrative service turned out to be something no-one had envisaged - the so-called Minitel Rose.

With names like 3615-Cum (actually it's from the Latin for "with"), these were sexy chat-lines in which men paid to type out their fantasies to anonymous "dates", most of them sitting in the 1980s equivalent of call-centres.

Minitel's foreign cousins

Not subsidised on the French scale, most of these services had a modest take-up and generally died out in the 1990s:

UK - Prestel
Germany - BTX
Canada - AlexTel
Spain - Ibertex
The Netherlands - Viditel and Videotex Nederland
US (Minneapolis and Omaha) - CommunityLink
South Africa - Beltel
Sweden - Teleguide
Italy – Videotel

Until very recently, billboards featuring lip-pouting lovelies advertising the delights of 3615-something were ubiquitous across the country.

Some people are said to have spent thousands of francs every month on the Minitel Rose, and a number of entrepreneurs certainly got rich.

It turned out to be quite easy to set up a newspaper. Once you were registered, you quietly let it die and got on with making money from Minitel.

Today, as switch-off approaches, debate rages in France about Minitel's legacy, and whether in retrospect it has proved more of an embarrassment than a mark of pride.

What once was shiny and new now looks like a shoddy bad investment - of interest to the retro market, but not to anyone else.

One thing that is very telling is that Minitel was a uniquely French institution. It never made it abroad (apart from Belgium).

Briefly in the early 1990s, France Telecom did set up a pilot project in Ireland. The idea was to test Minitel in a small Anglophone environment, with an eye on a bigger launch in the UK or the United States.

"I remember when I joined in 1990, it all felt extremely funky. My friends were all very impressed that I was bringing in this new sexy piece of French kit," says Gary Jermyn, who was the joint operation's finance director.

"But there were so many problems. First of all, unlike in France, we were selling the terminals, not giving them away. That was a huge handicap. And then the internet was arriving, and that was the death knell.

"Minitel wasn't an open platform. It only provided Minitel services, which was quickly going out-of-date as a model. Also by the early 1990s the terminal itself was the clunkiest piece of desk manure you could imagine. It was embarrassing."

A decade later, Jermyn says all that remained in Ireland were a few disused Minitel sets gathering dust in a handful of remote B&Bs (a tourist booking service had been one of the key ideas).

For Benjamin Thierry, a Sorbonne university lecturer and co-author of the recent book on Minitel, France's Digital Childhood, Minitel's failure to penetrate foreign markets is a classic French experience.

"When the French try to sell overseas, they insist on selling a whole system lock, stock and barrel. They don't know how to adapt, to break it up into parts. That just puts people off," he says.

Indeed the whole Minitel adventure can be seen as a typical French experience.

Only in France could the public resources have been mobilised to give the project its initial boost. So for a few years, the country was the envy of the world.

But then, immobility and inertia - as the market simply passed by.

"The failure of Minitel was not one of technology," says Benjamin Bayart, head of France's oldest internet provider, French Data Network.

"It was the whole model that was doomed. Basically to set up a service on Minitel, you had to ask permission from France Telecom. You had to go to the old guys who ran the system, and who knew absolutely nothing about innovation.

"It meant that nothing new could ever happen. Basically, Minitel innovated from 1978 to 1982, and then it stopped," he says.

But others are less critical.

Valerie Schafer, Thierry's co-author, says "the way Minitel is now fobbed off as risible and old-fashioned" is unfair.

"People forget that many of the ideas that helped form the internet were first of all tried out on Minitel. Think of the payment system, not so different from the Apple app-store.

"Think of the forums, the user-generated content. Many of today's web entrepreneurs and thinkers cut their teeth on Minitel," she says.

"The world did not begin with the internet."
http://www.bbc.co.uk/news/magazine-18610692





Verizon, T-Mobile U.S. Agree on Spectrum Deal

Verizon Wireless and Deutsche Telekom's U.S. unit have agreed to a spectrum deal that may clear the way for the U.S. company's plans to buy a chunk of spectrum from cable providers.

The agreement, which needs approval by the Federal Communications Commission (FCC) and the Department of Justice, included exchanges of spectrum between the two carriers and a cash payment from T-Mobile USA, the companies said on Monday.

They declined to divulge financials of the deal but analysts estimated that T-Mobile USA would pay around $260 million.

In addition, T-Mobile USA said it had given up its opposition to Verizon Wireless' proposal to buy spectrum from cable companies.

A T-Mobile USA spokeswoman said that "our agreement with Verizon will alleviate the public interest harms of their transaction with the cable companies as originally proposed", adding that "with FCC approval of these divestitures, we now support prompt approval of Verizon's transaction along with our transaction".

Verizon Wireless had said in April that it plans to put a chunk of wireless spectrum up for sale, potentially improving its chances of gaining regulatory approval to buy about $3.9 billion worth of wireless airwaves from cable companies including Comcast Corp and Time Warner Cable Inc.

The spectrum buy would be part of broader agreements to create a joint venture and allow the cable operators to resell Verizon's mobile service.

That plan was opposed by several smaller rivals -- among them T-Mobile USA -- who had complained to the FCC about the bigger company's cable deal on concerns that it would give too much market power to the already dominant company.

Some analysts suggested that Verizon had reached out to T-Mobile USA to clear the way for FCC approval.

"T-Mobile was the most vocal SpectrumCo deal opponent remaining and we think Verizon was either proactive in reaching an agreement with T-Mobile or encouraged to do so," Macquarie Equities research said in a note, adding that "either way, this is likely a win-win for both companies".

T-Mobile USA, the No. 4 U.S. carrier, has been scrambling to improve its business and stem customer losses, exacerbated by a nine-month period in 2011 when it was focused on seeking approval for a proposed $39 billion takeover by AT&T which collapsed in December.

The deal would improve its position in some parts of the United States because it will receive spectrum covering 60 million people in exchange for spectrum given to Verizon Wireless covering 22 million people

"As a result of this transaction, T-Mobile USA will gain AWS (Advanced Wireless Services) spectrum in many regions of the Northeast where it has historically had a weak portfolio, and give up small portions of spectrum in California where it has ample spectrum holdings," Bernstein analyst Robin Bienenstock said.

Consumer advocacy group Public Knowledge said the agreement between T-Mobile USA and Verizon proved that Verizon Wireless' cable spectrum -plans would not be beneficial for consumers.

"That Verizon Wireless feels the need to buy off T-Mobile to close its spectrum/marketing deals with the country's largest cable operators underscores just how bad this deal really is for American consumers and competition generally," said Harold Feld, legal director at Public Knowledge.

"As Public Knowledge has consistently pointed out, the true danger lies not only in the concentration of spectrum in the hands of the leading wireless provider, but with the cozy, cartel-like arrangements between Verizon, Comcast, and the other MSOs (Multi System Operators) party to the deal," he added.

(Additional reporting by Harro ten Wolde in Frankfurt and Jasmin Melvin in Washington.; Editing by Dan Lalor and Alden Bentley)
http://www.reuters.com/article/2012/...85O0PJ20120625





Sweeping Effects as Broadband Moves to Meters
Brian Stelter

The broadband era began with the expectation that Internet connections were like buffets — all you can eat, 24 hours a day. But users are now being prodded to think about how much they’re consuming.

Here in South Texas, Time Warner Cable customers have been given the online equivalent of a scale in the bathroom, a “usage tracker” that adds up all the household’s Facebooking and YouTubing. Customers who sign up for a light plan of 5 gigabytes of broadband — that’s the equivalent of two high-definition movie downloads — are rewarded with a $5 discount each month if they don’t go over. If they do, they pay $1 for every additional gigabyte.

“We’re moving away from one-size-fits-all,” said Jon Gary Herrera, a Texas spokesman for the cable company, which now tends to call itself a broadband company instead.

Some of Time Warner Cable’s competitors are moving the same way, slowly but surely, toward tiers of pricing for higher speeds and bigger amounts of broadband at home, mimicking the wireless industry’s much-maligned pricing plans. The strategy, called usage-based billing, is advantageous for the companies that control the digital pipelines. But it may be detrimental for customers who are watching more and more video on the Web every month, as well as companies like Netflix that distribute it. Some fear that as customers become more aware of how much broadband they’re using each month, they’ll start to use less of it, and in that way, protect traditional forms of entertainment distribution and discourage new Internet services.

Executives at cable and broadband providers dispute that by saying it is in their interest to make broadband a must-have product. “The exploding growth of online video usage undercuts any argument that cable is standing in the way of this business,” said Brian Dietz, a spokesman for the National Cable and Telecommunications Association, the industry’s trade group.

But some government officials aren’t so sure. The Justice Department’s antitrust lawyers are conducting an investigation into the cable industry’s treatment of online video companies with an eye toward deterring anticompetitive behavior. Some analysts say the investigation could, perhaps counterintuitively, accelerate the move to usage-based billing.

As online video use soars, customers just want faster and better broadband service, and they complain (online, naturally) when Web pages or videos take too long to load. Kate Miller, a Time Warner Cable customer in Utica, N.Y., said her 2-year-old daughter Jane has already learned the word “buffering.”

“Elmo,” Ms. Miller said, “was never meant to buffer.”

There’s a clash between what users expect from broadband service and what is actually delivered to them, said Chris Balfe, the president of Glenn Beck’s media company, which created an online TV channel nearly a year ago. He has noticed sluggishness at home when trying to view YouTube videos. “As a broadband video provider it’s frustrating, but as a user it’s absolutely infuriating,” he said.

Usage-based billing is seen by some as a fairer alternative to broadband caps, a term most closely associated with Comcast, which had been enforcing a limit of 250 gigabytes per Internet customer per month. Although only a small minority of customers ever exceeded the cap, it became a lightning rod for competitors like Netflix, which accused Comcast of unfairly favoring its own services.

Comcast said this spring that it would start to test usage-based billing. “Our network is not an infinite resource, and it is expensive to expand it,” David L. Cohen, a Comcast executive, said at the time.

Along with news and entertainment, the futures of entire industries — commerce, health care and transportation — are being built atop a broadband foundation. Companies big and small are coming up with ways to get faster broadband to more people; many people believe that broadband speeds will inevitably improve as time goes on, just as computer chip speeds have.

But others say that the marketplace lacks sufficient competition, which keeps the price of broadband — a high-margin product — higher than it otherwise would be. They wonder whether strategies like usage-based billing will worsen what is already an economic barrier for some Americans. “It’s like locking the doors to the library,” said Nicholas Longo, the director of Geekdom, a new collaborative work space for small companies in San Antonio.

Geekdom will pay almost any price for reliable broadband — that’s a critical piece of what it sells to start-ups that pay for work space. But some of the start-ups fear that changes to broadband pricing will tamp down consumer demand for the new products they’re conceiving and testing.

“If we had an unlimited pipe, there’s so much more we could do,” said Yuri Zapuchlak, a co-founder of Vidmaker, a video editing tool that exists “in the cloud,” meaning that the videos are uploaded and downloaded from the Internet in real time. For now, the Vidmaker software works around the limits of wireless and wired Internet access by breaking off the chunks of video that are going to be edited and uploading only those chunks.

Time Warner Cable started testing usage-based billing in San Antonio four months ago by offering the $5 discount to lighter users. Customer service representatives at a suburban call center are now trained to ask new customers about how they use the Web; once uses (listed on a work sheet) like “Internet gaming,” “watching TV/movie clips” or “video chat” are mentioned, callers are steered toward a pricing plan with unlimited bandwidth.

For now, unlike the 5-gigabyte plan, the unlimited plans have no overage charges. But the provider, and others like it, could change the pricing plans if many people begin to drop cable TV— essentially making up for losses on the television side by making broadband more expensive.

Such changes to pricing, if they occur, would happen gradually and carefully, executives say privately. But they are already working to change consumer expectations. Suddenlink, a home broadband provider in 18 states, sells usage-based plans tied to speeds, so customers who choose faster, pricier broadband speeds also have more bandwidth to use. The company calls them “allowance plans.”

One of Comcast’s tests will be structured that way. In another test, customers will get a monthly allotment of 300 gigabytes a month (enough for roughly 100 movies) and will pay more for additional “blocks.”

The Netflixes of the world are wary of these moves, though there may be little they can do. Concerns about both caps and usage-based billing have already caused one would-be online video competitor, Sony, to rethink its plan to sell a bundle of cable channels over the Internet.

Dish Network and other companies have been preparing plans for similar bundles, which could help cause the so-called unbundling of television that consumer advocates have dreamed about for decades. But “these guys have the pipe and the bandwidth,” said a Sony Network Entertainment executive, Michael Aragon, referring to cable and broadband providers, while speaking at a meeting sponsored by Variety in April.

Still, Mr. Aragon added, “We do believe there’s a business model out there.”
https://www.nytimes.com/2012/06/27/b...broadband.html





High Definition Video Clogs Corporate Networks
Robert McMillan

Increasingly, corporate bandwidth is being chewed up by streaming media and peer to peer networks. Screenshot: Wired

If you could somehow peek inside the pipes of your typical corporate network, you’d see a whole heck of a lot of streaming video and P2P filesharing.

That’s what network scanning company Palo Alto Networks discovered when it took a look at more than 2,000 corporate networks between November 2011 and May of this year.

In the past six months, the amount of bandwidth used by streaming video software has quadrupled, according to Chris King, the company’s director of product marketing. And P2P filesharing traffic is up seven-fold, he says. It’s not that more companies are allowing P2P or video streaming. It’s just that the people doing it are using a lot more bandwidth. “It’s a massive increase within the companies that are using them,” he says. “There’s just more comfort with getting busted using streaming at work.”

Another factor: More people are sharing and watching high-definition video. A typical compressed DVD image is about one or two gigabytes. But convert that film to BluRay and it’s close to three times that size.

This trend isn’t likely to abate, either, as new high-definition screens like the iPad and MacBook Pro’s Retina Display make high quality video even more appealing.

Palo Alto Netoworks does these surveys every six months, and in the latest results, they picked up one other interesting trend. Facebook may be the 2,000 pound gorilla in the social networking space, but Tumblr and Pinterest are quickly making up ground. Looking at only the bandwidth used by social networking applications, Facebook makes up 54 percent of that traffic — up from 37 percent late last year. Tumblr went from 1 percent of traffic to 10 percent in the past six months.

Palo Alto Networks only started looking for Pintrest traffic in May, but it’s already at 1 percent, King says. “Even though we only had the app identified for one month of that six-month period, it still made a huge dent.”
http://www.wired.com/wiredenterprise...orporatevideo/





Netflix May Have to Provide Closed Captions Online
Bob Egelko

A federal judge has taken a step toward requiring Netflix to provide closed-captioning for the deaf on its video-streaming website, ruling that federal disability laws cover businesses that serve their customers online.

Netflix, headquartered in Los Gatos, is the dominant provider of movies and TV programs on the Internet, with more than 20 million subscribers. The National Association for the Deaf accused the company of violating the law by withholding closed-captioning from most of the videos on its "Watch Instantly" on-demand website.

Netflix sought to dismiss the suit, arguing that the Americans with Disabilities Act requires accommodations for the disabled only in stores and other physical structures - an argument accepted in the past by some courts, including the Ninth U.S. Circuit Court of Appeals in San Francisco.

On Tuesday, however, U.S. District Judge Michael Ponsor of Springfield, Mass., said the law prohibits discrimination in any venue, including the Internet.

The legislative history of the 1990 law "makes clear that Congress intended the ADA to adapt to changes in technology," Ponsor said. "In a society in which business is increasingly conducted online," he said, the law's goal of equal access would be frustrated by "excluding businesses that sell services through the Internet."

The ruling allows the suit to proceed on behalf of groups representing the deaf and hard-of-hearing, who still must prove that the ADA requires Netflix to provide closed-captioning. Their advocates nonetheless called it a significant victory.

"By recognizing that websites are covered by the ADA, the court has ensured that the ADA stays relevant as much of our society moves from Main Street to the Internet," said Arlene Mayerson of the Disability Rights Education and Defense Fund in Berkeley, a lawyer for the plaintiffs.

Netflix could appeal the ruling to a federal appeals court in Boston. Spokesman Joris Evers said the company had no comment.

A 1996 federal law required closed-captioning for television programs but did not address online videos. Federal Communication Commission regulations will require captioning on Internet videos of all U.S.-produced, post-1996 programs by March 2014.

Netflix argued that the FCC rules took precedence over the more generally worded Americans with Disabilities Act. But Ponsor said that the FCC's timeline "reflects only minimum compliance standards" and that a court could invoke the ADA to order closed captioning at an earlier date on all videos.
http://www.sfgate.com/technology/art...ne-3652999.php





Winamp's Woes: How the Greatest MP3 Player Undid Itself

15 years on, Winamp still lives—but mismanagement blunted its llama-whipping.
Cyrus Farivar

MP3s are so natural to the Internet now that it’s almost hard to imagine a time before high-quality compressed music. But there was such a time—and even after "MP3" entered the mainstream, organizing, ripping, and playing back one's music collection remained a clunky and frustrating experience.

Enter Winamp, the skin-able, customizable MP3 player that "really whips the llama's ass." In the late 1990s, every music geek had a copy; llama-whipping had gone global, and the big-money acquisition offers quickly followed. AOL famously acquired the company in June 1999 for $80-$100 million—and Winamp almost immediately lost its innovative edge.

Winamp's 15-year anniversary is now upon us, with little fanfare. It’s almost as if the Internet has forgotten about the upstart with the odd slogan that looked at one time like it would be the company to revolutionize digital music. It certainly had the opportunity.

“There's no reason that Winamp couldn’t be in the position that iTunes is in today if not for a few layers of mismanagement by AOL that started immediately upon acquisition,” Rob Lord, the first general manager of Winamp, and its first-ever hire, told Ars.

Justin Frankel, Winamp's primary developer, seems to concur in an interview he gave to BetaNews. (He declined to be interviewed for this article.) “I'm always hoping that they will come around and realize that they're killing [Winamp] and find a better way, but AOL always seems too bogged down with all of their internal politics to get anything done,” he said.

The problems began early, since Nullsoft wasn't interested in being a traditional corporate unit. For instance, in 2000, just a year after the acquisition, Frankel released (and open sourced) Gnutella, a new “headless” peer-to-peer file-sharing protocol that understandably steamed the bigwigs at AOL corporate headquarters in Dulles, Virginia.

By early 2004, Rolling Stone dubbed Nullsoft’s founder the “world’s most dangerous geek”—but companies like AOL aren't good fits for dangerous geeks. That same year, Frankel resigned, writing on his website a few lines that were later removed: "For me, coding is a form of self-expression. The company controls the most effective means of self-expression I have. This is unacceptable to me as an individual, therefore I must leave."

Today, Winamp continues to be updated; AOL released its first Android version in 2010 and a Mac version in 2011. Amazingly, given all the time elapsed, AOL still makes a decent amount of money on the site and on the program—while the company has declined to release official figures, former employees who worked on Winamp estimate its current revenue at around $6 million annually. And Winamp still has an estimated user base of millions worldwide, a small fraction of which live in the United States.

However, references to the application’s storied history, both good and bad, have been scrubbed or omitted from the Winamp current site—it’s just a big blank page. (Update: An Ars reader points out that the history page has moved, but the link to the alumni page still reverts back to the home page.) So how exactly did Winamp squander the incredible head start it had on most other Internet music businesses? Here's how.

Out of the desert

Like most companies, Winamp was created to solve a “pain problem.” That problem? Two decades ago, it was pretty difficult to organize and play compressed music, which had just started to enter mainstream usage.

The German scientists behind the MP3 format released their first encoder in July 1994, but for the next three years, it remained difficult to share and find the resulting music files. Frankel has always created software “because it was software that I wanted to be able to use,” as he told the Digital Tools blog in 2008. “Winamp grew out of wanting a good, enjoyable way to listen to MP3s on a computer. It wasn’t the first MP3 player, but the MP3 players around before it were hard for me to want to use.”

Prior to Winamp, there wasn’t much available beyond Windows Media Player or RealPlayer. But none of those players could, in the mid-1990s, do something as basic as playlists, much less visualizations and custom skins, nor were they as tightly and efficiently programmed as Winamp. Even today, the Mac version of the Winamp installer is only 4.2MB; by comparison, the iTunes Mac installer comes in at a whopping 170MB.

The Windows Advanced Multimedia Products (WinAMP) player was released to the world on April 21, 1997. The next year, when its parent company Nullsoft formally incorporated, Winamp became $10 shareware. But no one pays for shareware, right? Wrong.

“Nothing ever was broken [if you didn’t pay], there was no feature that was unlocked,” Rob Lord told Ars. “In that year before we were acquired, we were bringing in $100,000 a month from $10 checks—paper checks in the mail!”

At the time, Lord already had staked his first claim to fame: co-founding the (recently revived) Internet Underground Music Archive, the world’s first online legal music repository, while he was a student at the University of California, Santa Cruz. Today, Rob Lord works for his own startup, Sherpa.io, based in the Hatchery, a SoMa (South of Market) co-working space in San Francisco, just a five-minute walk from Twitter’s original offices, alongside a plethora of tech and tech media companies. Developers and entrepreneurs rub shoulders on sunny days in South Park, an adjacent outdoor space that features a gourmet grilled cheese outfit, a taqueria, and a French restaurant with killer quiches. In short, it’s a long way from Sedona, Arizona, Frankel’s hometown and the birthplace of Nullsoft.

Seated on a couch in a Hatchery conference room and dressed in a T-shirt, shorts and sandals, Lord told me about his role at Nullsoft that began in May 1999.

“My title was director of online strategy, although we didn't know what that meant,” he said. “It was a lot of strategic and tactical decisions, around everything except the coding of the app itself. Justin was the one coding on it and he was the only one who had access to source code. I was being helpful by [looking at] product features [on a] business level—I initiated the first monetizing of the website.”

It was Lord’s job to figure out how to make the company money. Like most 1990s startups, the plan involved banner ads and possible partnership deals with other startups. Lord, then in his late 20s, moved from California to join the 18-year-old Frankel, still living at his parents’ home in Sedona, Arizona—where his father, attorney Charles Frankel, acted as the company’s counsel and chief financial officer.

This 10,000-person community in the Arizona desert attracts millions of tourists per year, and for decades has been home to people seeking to enjoy the state’s natural beauty and to take in the “spiritual” side of the place.

“You have this rugged individualism and a very rugged spiritual set and [Frankel] came from that,” Lord said. The Sedona ethos came through while making business decisions; Lord recalled one moment when there wasn’t enough information to confidently come to a decision. “'We'll just do x and let the universe decide,'” he recalled Frankel saying. “I think it describes the mode we were in—things happen for a reason.”

Finding a buyer

The universe decided that Winamp was awesome. In the first two years that Lord worked with Nullsoft, Winamp’s user base quadrupled from 15 million to 60 million users—and the acquisition offers arrived. “There was no meeting that was ever turned down,” Lord recalled.

Few companies said it outright, but they would couch their queries in phrases like, “Do you guys have future plans?” Before long it became hard to resist valuation offers in the neighborhood of $100 million.

In June 1999, Nullsoft was acquired alongside Spinner (in a deal worth $400 million for both), a streaming media player startup based in San Francisco. Charles Frankel, Justin’s father, took in the second largest portion of the AOL acquisition deal, receiving around $15 million in stock at the time. Frankel himself got AOL stock worth nearly $60 million at the time.

Lord now says Nullsoft was “acquired at the sweet spot of insanity,” less than a year before the January 2000 merger announcement of AOL and Time Warner, which eventually failed in spectacular fashion.

AOL consolidated both properties into Spinner's offices, a single warehouse-turned-office on Alabama Street in the Potrero Hill neighborhood, adjacent to the Mission District. The move to San Francisco certainly provided a change of pace for tiny Nullsoft. “I felt this juxtaposition of [our new environment] with [previously being in Sedona with Frankel and] operating out of his bedroom and us having meetings at his dad's offices, on the one road in town,” Lord said.

Everyone involved in the deal expected big things to result.“The thesis at that time was that AOL could be really big in music, create within its four walls the next MTV—and that meant something in music in the 90s,” Fred McIntyre told Ars last month. McIntyre started off as a vice president at Spinner in 1998 and worked directly with Winamp until 2004, staying on at AOL. He returned to Winamp in 2007.

“The general logic was that Spinner had built a service and had a pretty well seasoned management team in place,” McIntyre added. “Winamp had built a product and a platform that was capable of generating meaningful user adoption.”

“AOL, without telling either of us, bought us both,” recalls Josh Felser. Felser was co-founder and president of Spinner from late 1997 until mid-1999, and later became an AOL vice president in charge of both units. Today, he's a venture capitalist at Freestyle Capital. “They threw us together and I was in charge of both brands. It was obvious that our cultures were different, but it wasn't obvious that they would clash.”

At first, Winamp kept riding high. “[Winamp.com] was doing hundreds of millions of page views a month in late 1990s,” McIntyre said. “We were just pushing display ads through those. That was in and of itself a lucrative business—not a sexy business, but a lucrative business nonetheless.”

But problems quickly became apparent.

Culture clash

Former employees say that a deep chasm existed between the corporate cultures of Spinner and Nullsoft. Worse still, with their simultaneous acquisition, sometimes it was unclear exactly who was in charge of what. The Nullsoft team, which at the time of the acquisition numbered only four people, was literally surrounded by Spinner staff, who had already been operating at desks along the perimeter of their old Potrero Hill warehouse space. When Nullsoft arrived, the crew set up camp in the middle of the large space with the help of a massive tarp.

Flush with cash, a confident Nullsoft had Lord and Frankel at its helm and oversaw the hiring of several post-acquisition employees, including Chamath Palihapitiya to work on product and business development. Seven years later, Palihapitiya went on to become a Facebook executive and part-owner of the Golden State Warriors. Last year, the New York Times lauded him as an “unconventional venture capitalist.”

“On my first day, I walked into the office—there was this huge tarp in the middle,” Palihapitiya recalled in a conversation with Ars.

“We had a converted sweatshop in Potrero Hill. There was a lot of light—this glass panel roof panel would tilt up to let air and sunlight in, but was really bright. The Nullsoft guys had this massive tarp, so it was always dark [for them]. I wanted to know: what's going on in that tarp?”

Palihapitiya, a Canadian whose family is from Sri Lanka, studied electrical engineering at the University of Waterloo; upon graduation, he worked for a year on the Interest Rate Derivatives Group at BMO Nesbitt Burns, a Canadian investment firm. But after a year working on Canada’s financial frontier, Palihapitiya got bored and applied for work with “every [company] I thought was doing interesting things.”

“I applied to Winamp, eBay, Google, and was rejected everywhere except Winamp,” he added. “I had decent technical skills. I have no idea why they hired me. I didn't really have any practical skills. It just seemed like a great company. To be honest, I knew so little, but I thought that these guys seem to be figuring out as they’re going along, so that's the best shot I have.”

Despite a lack of formal business training, Frankel, Lord, Steve Gedikian (now a senior manager at Apple), and Ian Rogers (now the CEO of Topspin) managed to grow Winamp’s business significantly. (Gedikian and Rogers also declined to be interviewed for this article.)

But friction with Spinner posed more problems than any tarp. One of the early problems between the sibling companies came after an AOL decision. AOL management decided that, despite Nullsoft's larger user base, Spinner was the more mature company with more traditional corporate leadership. As such, Spinner was effectively given administrative and financial control over the two units.

“There was a clash of parsing out the budget. [Rob Lord] was furious that Spinner was given control and budgeting was being given to Spinner more than Winamp, and Winamp was bigger than Spinner,” Josh Felser admitted to Ars.

“[Winamp] went from 15 million [in 1999] to 60 million [in 2001],” Rob Lord said. “It was perverse. We were in an office with Spinner, they had 40 to 60 people, we had four. We were 10 times the user base and our growth rate was much faster. It was a weird situation. We had bootstrapped the whole thing.”

"It could have been Pandora"

While Nullsoft seemed to play second fiddle to Spinner, all the companies in AOL’s own “Interactive Properties” group (including ICQ, MapQuest, and others) collectively played second fiddle to AOL’s traditional bread-and-butter moneymaker: “the Service.”

According to AOL’s own June 30, 2000 10-K filing with the Securities and Exchange Commission, its legacy Internet access service had 23.2 million users, compared to Winamp with its 25 million users. At the time, the Service made a huge amount of money, and AOL wanted to promote it heavily to a crowd with limited use for it.

One particularly bad corporate decision came in 2000, when Palihapitiya and McIntyre wrote the business case for what would have been the first music subscription service at AOL. But the idea wasn’t released as a product until 2003, under the “MusicNet” brand, two years after Rhapsody launched its own music subscription service in 2001.

Fred McIntyre claimed that one of the biggest reasons why AOL failed to capitalize on this music subscription plan was that the company insisted on using its own indigenous billing system, the one used for the Service.

“AOL was religious about this idea that we had to do billing through the same infrastructure that AOL did billing for service for,” he said, comparing it to the ill-fated decision by Yahoo to force Flickr users to use a Yahoo ID to log into the photo-sharing service.

And that pointed to a bigger problem for Winamp, and for the "Winamp culture" inside AOL—its primary users were music fans, geeks, and people who cared about what bitrate their MP3s were encoded at—in other words, the key users of Winamp in the early 2000s were allergic to AOL as a company. (Or perhaps were just put off by all those AOL promo CDs.)

“Winamp would have a larger US audience today were it not the fact that AOL tried to get people to install Netscape or AOL or something else when they installed Winamp,” McIntyre concluded.

Jascha Franklin-Hodge started out as a Spinner engineer and later became the director of software development in 2003. Later, he co-founded Blue State Digital, the company behind Barack Obama’s 2008 social media strategy.

“When you think about what AOL had in early 2000,” he told Ars, “the only thing that they were missing that [would be] essential to today’s media system is a hardware device. They had the number one software for playing [in Winamp], and in theory, although not in practice, the [Time Warner] content library that could have been a pioneer in streaming. And a radio service. It had all the elements. AOL could have been Spotify, it could have been Pandora.”

But it wasn't; it was AOL. And so, despite having the love of hardcore geeks, music fans, and millions of Winamp users, AOL’s main strategy was to try to convert those users towards the Service, ignoring or marginalizing other monetization strategies. As the years passed, both the Service and Winamp stagnated. (Today, AOL has just 3.3 million users.)

McIntyre summed up the problem bluntly. “Between 2002 and 2007, Winamp was an asset that AOL knew was valuable but didn't know what the fuck to do with."

Alternative histories

The other problem, of course, is that by late 2001, the first iPod appeared. As Steve Jobs himself famously pointed out at the product’s launch, there were existing MP3 players—but they all sucked. By 2003, Apple had sold a million iPods and launched the iTunes Music Store.

“Apple so thoroughly dominated and crushed that space,” Franklin-Hodge added. “I think it set the stage—those [26 million AOL users in the United States at the end of 2002] were a huge chunk of Apple’s initial customer base for the iPod. They were people who got why digital music was a more advantageous way to consume things. They created that door; we just weren’t positioned to walk through it in the way that Apple was.”

Other former employees agreed, blaming Winamp’s slow decline on AOL’s inability to capitalize on Winamp’s user base.

"AOL did more to negate progress than any company I've ever seen,” said Palihapitiya, Winamp’s early head of business development. “These bureaucrats viewed every decision as a political decision. Really good ideas would die on the vine.”

Even though MusicNet took time to start up, the limited download (and later subscription) music service was “crushing it” at first—that is, before iTunes took off over the course of 2003 and 2004. Had Winamp, Spinner, and AOL made different decisions, the history of digital music might have read quite differently.

“Nothing replaces execution,” Palihapitiya concluded. “I think the biggest general thing that happens in most acquisitions [is]: the acquirers tries to exert too much control on the acquiree. The host organism suffocates the young company. Some of it is not ill-intentioned. But that's just how most acquisitions end up. That was true in this case. If you had acquired [Nullsoft] and let it run as an independent operating unit, would it have done more? Probably.”

In the meantime, the core application, known for being thin, light, and fast, was suffering. In August 2002, Winamp version 3 was released (Nullsoft now had 15 employees) and had been re-designed. Some users felt it was bloated; many even reverted to older versions. By 2003, as iTunes and iPods were rising fast, Winamp struggled.

WASTE

But Frankel, the original creator of Winamp and Gnutella, wasn't out of ideas. Unfortunately, his ideas all made AOL furious.

Just as the RIAA was prepping lawsuits against Gnutella users, Frankel kept butting heads with AOL corporate headquarters in Dulles, Virginia—trying to get Nullsoft and himself out from AOL’s transcontinental reach. Besides Gnutella, which he released in September 2000, Frankel coded a program that blocked the ads on AOL Instant Messenger. After that, Dulles told him not to blog without approval.

"AOL as a company should not just sit on their asses and try to keep from losing as many subscribers as it can," he told Rolling Stone for its January 13, 2004 issue. "I mean, I'm a stockholder of the company. I want them innovating. I want them doing things that are good for the world and being socially conscious."

The disputes came to a head by mid-May 2003, when Frankel released WASTE, an encrypted, invite-only, file-sharing and chat network—on the fourth anniversary of Nullsoft’s acquisition. Not surprisingly, AOL pulled the plug within 24 hours.

Frankel described the tension to Rolling Stone in 2004:

“‘We fought off the AOL bullshit as much as possible," he says. When the company tried to insist that an AOL icon instantly appear on a user's desktop during a Winamp installation, Frankel hit the roof. "I'd be like, look, our users don't want to use AOL!" he says. "They think AOL sucks!"

Frankel agreed to stay on to see Winamp 5 through production; the program appeared in December 2003 and Frankel resigned from the company in January. Within a year, Gedikian resigned and AOL shuttered Nullsoft entirely, moving the remaining development staff to Dulles. At the time, Slate lamented the closure of the last “maverick tech company.”

Winamp on life support

Probably the most surprising piece of the story is that Winamp didn’t die right then and there in 2004. For the next three years, the software seemed more or less in stasis—no new version appeared.

Ben London, an AOL senior technical manager, took the reins of Winamp in Dulles in August 2004. He admitted that AOL’s own corporate strategy, which kept shifting, slowed down development.

“There’s just not a long-term investment tolerance,” he told Ars. “We carve out a six-month road map, and then boom, re-organization into a different group, and new, different drivers would ask us to focus on a different aspect of the product.”

But Winamp ticked along. When the new, 10-year-anniversary edition of Winamp finally dropped in 2007, Winamp hit its peak in the post-Frankel era, with a 90 million active user base, according to London.

“Winamp had no business staff,” said Sam Weber, a longtime AOL manager who eventually became Winamp’s business development director in 2006 and its overall director from 2007-2008. “Ben London was managing five developers that were keeping shoutcast.com, winamp.com, and the client on life support.”

Weber told Ars that he and his team figured out something surprising about Winamp. While its numbers eventually dropped to all but negligible levels in the United States, the international market was a different story.

“What do you do if you have 50 million users around the world and 90 percent are outside the US and you have a six-person team in DC?" Weber wondered. When the team looked closer, it found that it had five million Turkish Winamp users and two million Brazilian users, among others.

The Winamp team tried to come up with a new business plan for Winamp, wondering if they could tack on a download service, a streaming service, or even just sell advertising against the installs.

“I think bit-by-bit what we mostly did was try to revitalize the community by re-releasing the product, updating it, both in terms of user interface and the codecs and technology with it, making Shoutcast easier and friendlier to use,” he added. “We started monetizing users who came to the site, and more importantly, we translated it into a number of languages.”

In short, the new Winamp team in Dulles began to figure out what AOL should have realized years earlier.

“The first is don't screw up a good thing,” Weber said. “Don't use it as a mechanism for delivering AOL-branded services. Help make it more relevant to people who do use it.”

So Winamp 5.5 added official German, Polish, Russian, and French support for the first time. But more importantly, the company started to figure out how to make money from users through what came to be known as the “freemium” model.

“You sell a premium version of the product,” Weber said. “You've got this freemium play and it gets big enough, if you can get one percent [of your customers to buy it], you can build a real business.”

Currently, Winamp Pro sells for $20, which, when multiplied by hundreds of thousands of paid users, works out to millions of dollars in revenue. Another way to make money is by selling ads directly on Winamp.com—and with the site doing several million total unique visitors a month, it's an easy way to earn some cash.

But there’s an even better way to make money: put a Winamp player inside a browser toolbar. As Weber explained, this generates “a hell of a lot of money—search makes a lot more than banner ads.”

“Google has a [search] deal with AOL, so we're distributed AdSense, in a branded, Winamp sense,” he explained. “Now you've got millions of queries a day, and we would promote eMusic. Anytime someone searches for something, you're getting a piece of that. That's real money for a little startup. If the model hasn't changed since I was there, it’s advertising against a big audience.”

A second coming?

15 years after its founding, all of Winamp's original employees are long gone (most have moved on to other positions in Silicon Valley, largely in the tech and music sectors) and the product has now existed longer without Frankel than with him. Its user base continues to stagnate as competitors like Rdio, Spotify, and Pandora—to say nothing of iTunes, which last year sold its 15 billionth song—continue to thrive.

But Geno Yoham, Winamp’s general director since October 2008, argues that Winamp will continue to do well as a media player, particularly in emerging markets where Apple hasn’t penetrated as well.

“iTunes is number one, and we’re number two,” he said. "There's a lot of value in the Winamp brand, the media player that's on your side."

Winamp says that it has around 30 million users worldwide currently (a figured based on comScore Web traffic analysis), with less than one million in the United States. The company is also starting to target specific platforms (read: Android) rather than specific markets. Winamp reports that since the Android launch of Winamp in October 2010, it has seen over 19 million installs. Could Winamp rise once more?

“We're thinking about [buying Winamp] again,” said Josh Felser, the former Spinner executive and current venture capitalist, who said he and other investors also tried to buy Winamp from AOL in 2003. He's still in love with the idea of Winamp, and with the community it spawned, and believes that someone could still capitalize on all that potential.

"Winamp had the start of something social in music," he said, dismissing the music sharing that Spotify is now doing on Facebook. “That’s just seeing what people are listening to. It doesn't feel right.”

“[Winamp] had a very distinct, edgy, tech-savvy community, and that's a valuable community to lots of people. That would be a big thing to understand. What are the set of features that we can attach to it to make it become more relevant again? I don't have it. I’d have to get serious about that.”

But, he admitted, no significant steps have been taken in terms of talking with AOL about a possible acquisition.

“Although the idea of starting with that basis [of an existing community and a history] is exciting,” he said with a grin, “I haven't given it more than five minutes thought.”
http://arstechnica.com/business/2012...-undid-itself/





Loudness Wars Coming to an End?

Many audio professionals believe the days of hyper-compressed recordings may soon end. Ian Shepherd, a British mastering engineer, says broadcast audio standards may help expedite the process.
Robert Archer

The roots of the loudness wars can be traced back to the 1980s when music engineers in Nashville, Tenn. tried to make recordings as punchy as possible for radio airplay.

The negative effects of the loudness wars, which can be described as methods to make music sound “louder” on electronics that are limited in their ability to playback dynamic content, have reached a zenith level in today’s consumer audio market.

This recent emphasis on loudness ties into how consumers buy music. Digital downloads are the preferred music delivery method. And with the combination of low-resolution digital audio files and heavily compressed music (the tool/techniques used to limit the dynamic range of music), the visceral impact of music has been lost.

To counteract the effects of heavily compressed music, Ian Shepherd, a U.K.-based mastering engineer, Blu-ray and DVD author and owner of Mastering Media, Ltd, launched Dynamic Range Day (DRD), a grassroots movement to end excessive compression. DRD 2012 experienced its highest levels of interest since it debuted several years ago.

Awareness Slowly Growing

Outside of the professional audio community, more people are learning about compressed recordings, but Shepherd says little has been done to address the problem.

“Now pretty much anyone who is making music knows about [hyper compression]. In terms of public awareness, there is some growing awareness; mainstream media have covered the issue from time to time, but in terms of what has actually been released, I’m not sure there’s been much overall progress,” Shepherd asserts. “There have been some great sounding, dynamic releases, but super-loud, low-dynamic-range music is still the norm in many genres.”

Shepherd says professionals within the recording industry are doing the best they can, but ultimately they are doing what the record labels tell them to do. He does point out, however, that an increasing amount of professional audio equipment manufacturers are stepping up to support his DRD cause, including Solid State Logic (SSL), TC Electronic, Bowers & Wilkins (B&W), PSB Speakers and NAD Electronics

“Sound quality is of vital importance to Bowers & Wilkins. Our founder, John Bowers, was a passionate music fan and he started making loudspeakers because he felt poorly served by the loudspeakers that were offered to him as a consumer,” says Shaun Marin, brand manager, Bower & Wilkins. “Decades later we continue to make world-leading loudspeakers - loudspeakers that bring music to life and reproduce sound as close as possible to what the artists created in the studio, although maybe not always as it was mastered to compact disc.”

Albums That Maintain Dynamic Range

Bjork Biophilia
Bon Iver
Daft Punk Tron Legacy
Elbow Build a Rocket Boys!
Nirvana Nevermind
Neil Young's A Treasure
Pink Floyd Wish You Where Here
Radiohead The Bends
The Beatles Abbey Road

New Standards may redefine Market

The first major step towards the elimination of heavily-compressed music could be the International Telecommunications Union’s (ITU) ITU-R BS.1770-2 standard recommendation for the measurement of loudness that was introduced in 2006 and revised in 2011.

Following the ITU’s recommendations, the European Broadcasting Union (EBU) released its Loudness Recommendation EBU R128 in August of 2010. Acting to rectify the problem on the broadcast side of the issue, many European and Asian broadcasters are adopting loudness standards that are based on the criteria first introduced by the ITU.

Here in the U.S., the federal government has also been proactive to improve the quality of broadcast television. By the end of 2012, the broadcast community will have to follow the Commercial Advertisement Loudness Mitigation (CALM) Act that requires commercials to be played at the same volume as broadcast television.

In terms of music and recording, these broadcast standards do not apply. But Shepherd theorizes the measurement standards will be applied to the production of music.

“Measuring loudness, in general, isn’t easy. Now the ITU has agreed on a new ‘loudness unit:’ the LU. You can measure short- and longer-term loudness over a whole song. They’ve also agreed on guidelines for broadcast; what the average loudness should be and how much you can vary it. The recommendation has been made law in the U.S. for advertisements and is also being adopted in the U.K. and all over the world. All the major broadcasters here - Sky, the BBC, ITV - have agreed to follow the standard.

“In the future the loudness of music and audio will be measured by this standard. Quiet stuff will be turned up and loud stuff will be turned down to get consistency. What this means is that if you take a super loud CD like ‘Death Magnetic’ [Metallica] and play it against [Michael Jackson’s] ‘Thriller’, they will play back at the same volume. But because ‘Thriller’ is more dynamic, it will actually sound louder, because it has more punch and headroom for musical impact.”

Making the Best out of a Bad Situation

Despite the record industry’s continued sales and marketing of heavily-compressed music, there are avenues music fans can pursue. Shepherd says technically-adept music enthusiasts can test the quality of their CD collections with software solutions like Audacity and the TT Meter plug-in tool. He also says that other solutions such as the Tone Boosters EBU loudness meter are also pretty affordable, and for those less technically inclined there are also less scientific methods available.

“In terms of listening, if after a while that you find yourself fatigued by what you are hearing, then the music may be heavily compressed,” Shepherd explains. “If there’s no contrast - no light and no shade - the choruses don’t lift, that’s a clue a song has been squashed. A great way to learn how this [compressed audio] sounds is to watch the meters [in these programs] while listening. This will help develop your critical listening skills.”

Shepherd says the key to building a quality music library comes down to how the music was produced. “There’s so much space on modern devices and users have the option of using FLAC and lossless formats, and that presents an opportunity to get the highest quality replay,” he emphasizes. “The file format, however, doesn’t reflect on the dynamics: It’s how it was mixed and mastered.”

Shepherd suggests that if music fans want an alternative to downloads and CDs, vinyl may be the solution they seek.

“Some people are actually ripping vinyl because some labels are releasing vinyl with more dynamic mastering. The Chili Peppers last album, ‘I’m With You’, was rated at DR4 [dynamic range 4 rating], but on vinyl it measures DR9,” he says. “Adele’s album ‘21’ is more dynamic on vinyl than CD, too. This is nothing to do with any limitations of either format - the whole CD versus vinyl debate is a red herring. They’re different formats and they have different sound qualities. These differences in dynamics are choices made by the labels, artists and engineers.”
http://www.cepro.com/article/loudnes...ing_to_an_end/





An EMI-Universal Merger Won't Fix the Music Industry
Andy Meek

Sales of digital music surpassed disc sales for the first time last year, spurring the music industry's dawning awareness that this digital thing isn't going away. Executives at Universal Music Group (home of Gotye, Kanye West, Lady Gaga and numerous other hit makers) and EMI (for whom the Beatles are one of many cash cows) told the U.S. Senate last week that they need to merge in order to complete the transition. Meanwhile, a blog post by a 20-year-old National Public Radio intern pointed out the obvious: For the most passionate music fans, the transition is ancient history.

When the Senate Judiciary Subcommittee met Thursday afternoon to discuss Universal’s $1.9 billion bid for EMI’s record division, the talk never really moved away from what digitization has done to the industry. The industry has shrunk to half its size in 2001, senators learned. Amazon and iTunes account for 90% of the download business. The union of EMI and Universal, EMI Group CEO Richard Faxon said, would yield greater resources to invest in the digital future. Indeed, Lucian Grainge, Universal’s chairman and CEO, proposed to make “a courageous investment” in EMI. “Digital is our future,” he said.

As the hearing was in progress, Emily White's 517-word post on NPR's All Songs Considered blog was ricocheting around the Net. The message was simple: White, who was born circa 1992, has bought less than two dozen CDs in her life. She has got an iTunes library of thousands of songs. She never had to make the transition from physical to digital music. That happened long before she started buying music in a one-two punch: first the Fraunhofer Institute's release of the mp3 format (1993), then the introduction of Apple's iPod (2001).

“I’m almost 21, and since I first began to love music I’ve been spoiled by the Internet,” she wrote. “As I've grown up, I've come to realize the gravity of what file-sharing means to the musicians I love. I can't support them with concert tickets and T-shirts alone. But I honestly don't think my peers and I will ever pay for albums. I do think we will pay for convenience.”

White's post attracted hundreds of comments and emotional reactions throughout the blogosphere. Responses ranged from moralizing to outrage to outright support. David Lowery, founder of the alt-rock band Camper Van Beethoven, composed an impassioned 3,800-word open letter in response to White focusing on the human impact of illegal downloading.

But illegal downloading is a sideshow. The real issue is the industry's relationship with its customers. Like it or not, people like White - whether or not they pay for the music they download - are potentially the music industry's best customers. They're dedicated fans who care deeply about the interaction of culture, commerce and individual behavior. Yet none of the record men who spoke before the Senate said anything to suggest that they understood where she's coming from. They talked about forming a digital strategy - a step in the right direction, to be sure - but they didn't talk about serving their customers.

I’ll leave the details of the Universal-EMI merger to someone else to argue over. The bottom line is that nearly two decades after MP3, more than a decade after the iPod, in an era flowering with the likes of Pandora, Last.fm, Spotify and SoundCloud, these guys still don’t get what they’re up against. They’re arguing about how best to make the shift from horse-drawn buggy to automobile - when their customers have been driving Ferraris for years. Growing market share should not be the industry's end game. The record company execs need to focus on understanding that the world has changed, and change with it.
http://www.readwriteweb.com/archives...c-industry.php





News Corp. Considers Dividing Itself in Two
Michael J. De La Merced

News Corporation is considering dividing itself in two, cleaving its publishing arm from its far larger entertainment division, a person briefed on the matter told DealBook early on Tuesday.

If News Corporation follows through, it would essentially mean splitting off the newspaper business that once formed the heart of the company from the Fox movie studio and television networks that now represent the strongest and most profitable parts of Rupert Murdoch‘s media empire.

Such a split, which may take the form of a corporate spinoff, would create a publishing business that includes The Wall Street Journal, The Times of London, The New York Post and the HarperCollins book business.

The Murdoch family would probably retain control of the newly split companies under such an outcome, this person said.

It is not clear whether Mr. Murdoch will actually proceed with the move — something he has rejected in the past — though he has softened his opposition more recently. Should the company settle on this path, it could announce its intentions to pursue a split as soon as this week, the person said.
NWS stock chart

A News Corporation spokeswoman, Julie Henderson, declined to comment.

News Corporation’s chief operating officer, Chase Carey, said publicly earlier this year that the management team had considered a split. But at the time, he said, no decision had been made.

Such a move would come as investigations continue into charges of phone-hacking by News Corporation’s British newspapers, a damaging scandal that led the company to close the tabloid News of the World and undermined News Corporation’s $12 billion bid for the portion of British Sky Broadcasting that it did not already own.

Fallout from the hacking scandal has grown in the last year to touch upon an array of figures, including Prime Minister David Cameron of Britain and Mr. Murdoch’s son James, who led the company’s British newspaper operations. The country’s broadcast regulator has been reviewing News Corporation’s status as a “fit and proper” owner of television stations in Britain.

But the person briefed on the matter said a split was more closely tied to attempts to improve shareholder value. Restive shareholders have often said they would prefer that the company focus on its more lucrative entertainment assets, which together generated $23.5 billion in revenue in the year ended in June 2011. The publishing business, by contrast, contributed $8.8 billion in revenue.

News Corporation’s shares have risen 20 percent in the last 12 months, but some of that ballast has been supplied by an expensive buyback program. The company’s stock fell 1.4 percent on Monday, to $20.08 a share.

The company’s deliberations were earlier reported by The Wall Street Journal.
http://dealbook.nytimes.com/2012/06/...self-into-two/





Hollywood Is Hijacking The Courts And Police. Your Files in Gmail, Flickr, Picasa, etc. Are in Jeopardy

Hollywood attorneys are trying to use the courts to circumvent Congress and implement a backdoor SOPA/PIPA scheme.

Fight Back: YOUR FILES ON Google, Dropbox, Facebook, Tumblr, Instagram, YouTube, Flickr, etc. and even your emails are in jeopardy.

Demand Progress is fighting back in the courts and standing up for Internet users. We are taking on the United States and the MPAA. Please sign up at right to support our legal brief so the court understands that millions of people will be impacted by this decision. The judge is hearing the case TOMORROW.

BACKGROUND: One day after the Internet staged a massive blackout to protest Congress's Internet censorship legislation (SOPA/PIPA), the United States responded by seizing millions of ordinary user files hosted on the popular website Megaupload.com.

With an aim of shutting down Megaupload and other Cloud-based hosting services (like Dropbox, YouTube or even your email provider), the government is trying to claim website operators should face decades in prison for the misdeeds of some of their users. But while they pursue trumped up criminal charges against the companies' founders, they are shutting down dozens of websites, and leaving ordinary Internet users without any way of retrieving their files.

Apple co-founder Steve Wozniak called the case against Megaupload a "threat to innovation." Wozniak likened the Megaupload site to a highway and those who shared pirated movies and songs to speeding motorists. "You don't just shut down the whole street because somebody is speeding," he said.

Numerous laws on the books already give copyright holders plenty of avenues to stop actual infringement, but that's not enough to satisfy Hollywood's lawyers and lobbyists. The prosecutor in the case, Neil MacBride, previously served as the Anti-Piracy Vice President of the Business Software Alliance, where he represented the intellectual property interests of countless multinational corporations.

Now Hollywood's lobbyists, represented by the Motion Picture Association of America, want him to make it nearly impossible for ordinary Internet users to get their property back.

The Demand Progress legal brief in United States vs. Kim Dotcom asks the government and all parties to facilitate the return to Megaupload users all files unrelated to the case. Stand with Demand Progress as we advance Internet user rights and fight to prevent the creation of dangerous legal precedent. Sign up to support our action in the Court.
http://www.theinternetvshollywood.com/





AP Interview: Wozniak, Dotcom Slam US Piracy Case
Nick Perry

Apple cofounder Steve Wozniak says the U.S. piracy case against Kim Dotcom is "hokey" and a threat to Internet innovation.

Wozniak and Dotcom spoke out against the federal case in separate interviews with The Associated Press Wednesday. Dotcom, the flamboyant founder of file-sharing site Megaupload, is accused by federal authorities of facilitating Internet piracy on a massive scale. Charged with racketeering and money laundering, he's fighting U.S. attempts to extradite him from New Zealand.

Wozniak said he was visiting New Zealand last month to give a speech when he learned Dotcom couldn't come to see him because he was under house arrest. So Wozniak said he visited Dotcom and the two have kept in touch by email since.

"It's just kind of ridiculous what they did to his life," Wozniak said in a telephone interview. "An awful lot of Kiwis support him. The U.S. government is on thin ground."

Wozniak said plenty of people used Megaupload for legitimate purposes before federal authorities shut it down in January and filed criminal charges against seven of its officers, including Dotcom. In a dramatic raid the same month, New Zealand police swooped down in helicopters onto the grounds of Dotcom's mansion and cut their way into a safe room where they found him hiding. He was jailed for a month before a judge decided he could be monitored from his home.

Wozniak likened the Megaupload site to a highway and those who shared pirated movies and songs to speeding motorists.

"You don't just shut down the whole street because somebody is speeding," he said.

U.S. authorities allege in their indictment that Dotcom and Megaupload deliberately thwarted attempts to remove pirated material from the site by removing individual links but not the pirated content. Prosecutors claim the "mega conspiracy" netted Dotcom and others $175 million in illicit advertising revenue and download fees.

In an email interview, Dotcom said the charges are bogus.

"The more people learn about this case the more they realize that this type of copyright disagreement between Hollywood and new cloud storage technology is a political debate, not something that belongs in the criminal court and certainly not something to justify breaking down the door to my house," he said.

Dotcom said Megaupload had been applauded for its content removal policies. But he also acknowledged the site could host pirated files.

"What people uploaded and downloaded in their storage areas was up to them. One person's licensed music MP3 file is potentially another person's infringing file," he wrote.

Wozniak said he believes that people should pay for content. But he also believes in keeping the Internet open to encourage innovation. He said trying to shut down sites like Megaupload is futile.

"If you've got a huge steamroller coming, instead of trying to stop it, you should get out of the way," he said.

Wozniak, a founding member of the nonprofit Electronic Frontier Foundation which has sought to return frozen Megaupload files to users, said authorities need to release some of Dotcom's frozen financial assets so he can pay his mounting legal fees.

Born Kim Schmitz in Germany, Dotcom, who changed his name in 2005, has been in trouble before. He was convicted in 1998 in Germany of computer fraud and dealing in stolen phone cards. In 2002, he was convicted of manipulating the stock price of an Internet startup. Both times, he was fined but managed to avoid jail time. He also portrayed himself at the time as a super hacker, although German hackers spoken to by the AP say he did little of what he claimed. He moved to New Zealand after gaining residency in 2010.

Asked if he might be being fooled by a clever conman, Wozniak said it "could very well be the case."

"If I hear details that have credibility, I could totally turn against him," Wozniak said. "But I'm not finding it anywhere from what I've heard so far."

Dotcom has portrayed himself as the victim in rare interviews and on his new Twitter account, where he's posted photos of his family. He's also been thumbing his nose at authorities and the case against him. One photo he posted shows him standing in a field, his arms outstretched, with the caption "Flight risk!!!!" Another photo shows a colleague scrubbing bills in a bowl of soapy water: "Money laundering."

The irreverence and anti-authoritarian streak has appealed to many New Zealanders. In the eight days since starting his Twitter account, Dotcom has amassed more than 40,000 followers, rivaling the 51,000 who follow New Zealand's Prime Minister John Key.

Ira Rothken, one of Dotcom's lawyers, said he is pleased with the way New Zealand authorities have relaxed Dotcom's bail rules pending an August extradition hearing by gradually removing the restrictions on his movements and freeing some of his assets so he can pay personal expenses.

Dotcom's lawyers are seeking to have the case against the company — although not the individuals — thrown out on the basis that Hong Kong-based Megaupload had no legal presence in the U.S. They're also seeking the release of millions of dollars to pay for the legal fees.

Dotcom said he's optimistic New Zealand will deny the U.S. extradition request and is hopeful the U.S. will eventually drop the criminal case. Then, he said, he'd be free to focus on launching some new products, including a music service he's named "megabox." For now, he's got a new crowd offering support.

"That's why I love the Internet," he tweeted last week. "From zero to 1000 followers in one day. Let's make history together."
http://www.google.com/hostednews/ap/...bEFlkKJCukiKkg
















Until next week,

- js.



















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