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Old 25-07-07, 08:43 AM   #1
JackSpratts
 
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Default Peer-To-Peer News - The Week In Review - July 28th, '07

Since 2002


































"Revenue from worldwide theatrical rentals -- the bare bones money that returns to the major U.S. studios after the exhibitor's cut and distribution expenses -- soared 20.9% to $7.95 billion in 2006, setting a record for the six MPA companies." – Hy Hollinger


"Americans spent $166 million for the book in one day." – Motoko Rich


"File-sharing on Pownce would be difficult to police." – Jason Pontin


"It is a revolution. Now with all sorts of really very accessible, very straightforward tools, anybody can make maps. They can select data, they can add data, they can communicate it with others. It truly has moved the power of map production into a completely new arena." – Matthew H. Edney


"This has gone on long enough. It is time for a special counsel to investigate whether criminal charges should be brought." – Senator Russ Feingold, D-Wisconsin



































July 28th, 2007






A Social-Networking Service With a Velvet Rope
Jason Pontin

JUST now, the hottest startup in Silicon Valley — minutely examined by bloggers, panted after by investors — is Pownce, but only a chosen few can try out its Web site.

Kevin Rose, the co-founder and chief architect of Digg, a hugely popular news site, announced in late June the introduction of Pownce, a social-networking service that combines messaging with file-sharing. Mr. Rose immediately endowed his latest venture with some mystique by declaring that, for the time being, only those with invitations would be permitted to test his new site.

Within days, invitations were selling on eBay for as much as $10. Mr. Rose has declined all requests to be interviewed about the service, including my own. But as a consolation, he sent me a coveted invitation. I enjoyed the rare thrill of cyberhipness — and got to experiment with the site.

I learned you can send text messages to individual friends or groups of friends on Pownce as well as post microblogs, or short announcements, to the larger Pownce community. This function is very similar to messaging services like Twitter or Jaiku, and is found on social networks like Facebook and MySpace (although Pownce’s messages cannot, at least for now, be sent to mobile phones). You can also send your friends links, invitations to events, or files like photos, music or videos. Of course, you can already do that on a multitude of file-sharing Web sites. It is the combination of private messaging and file-sharing that makes Pownce so novel.

Om Malik, the author of the technology blog GigaOm, is an enthusiast. “I love it and use it constantly, ” he said in a message sent to me on Pownce. “I like it because it lets me share a lot of different things with the networks of people I really care about.”

Pownce was initially conceived by another founder, Leah Culver, a 24-year-old programmer who developed the site as an experiment. But its glamour derives from Mr. Rose’s reputation for creating digital-media companies that evoke passionate fandom among their youthful audiences. In addition to Digg, he co-founded Revision3, a video production and hosting company opened last September.

“He is super-smart, friendly, humble and a team-builder — a perfect combination for a great entrepreneur,” said Ron Conway, who has invested in Digg and Revision3 and was an early investor in Google. (A disclosure: Mr. Conway also invested in Red Herring Communications, a magazine and Web site I once edited.)

Mr. Rose, 30, dropped out of the University of Nevada at Las Vegas, where he was studying computer science, to pursue his fortune in San Francisco during the dot-com boom. Fortune eluded him then, but he achieved minor fame when, following the collapse of the technology market in 2002, he became a nerdy host on TechTV’s “The Screen Savers.”

The audience Mr. Rose attracted at TechTV was then drawn to Digg, which he began promoting on his show and in his blog when the site was introduced in December 2004. Digg combines social networking, blogging and online syndication to create a site where news stories are ranked by popularity. Today, 17 million people visit Digg every month, according to the company.

After Mr. Rose’s contract with G4, the successor to TechTV, expired, he started Revision3. Each week, 250,000 people go to the company’s Web site to view its most popular show, “Diggnation,” where Mr. Rose and his pal Alex Albrecht lounge on couches, drink beer and discuss the most popular stories on Digg.

Something of Mr. Rose’s concept of his latest venture can be discerned in how he described Digg to me in a recent interview. “For us, it’s really about creating the platform for people to share things with their friends,” he said.

Owen Thomas, the managing editor of the Silicon Valley gossip blog Valleywag, has chronicled the excitement Pownce aroused over the last month, but doesn’t like the service himself. At 35, “I’m kind of old; I’m habituated to e-mail,” Mr. Owen wrote in just such a message.

MY own experiences with Pownce were ambiguous. As with Twitter, I felt mildly repulsed by the banality and exhibitionism of microblogs. On the other hand, I enjoyed the privacy of the closed messaging system and the ease with which I could share things with nicely calibrated groups.

What struck me most was the site’s potential to be powerfully disruptive. Most file-sharing occurs on public sites, which can be monitored by media companies; if the users violate copyrights, the sites or the users themselves can be threatened into compliance or litigated out of existence (as happened with the original Napster). File-sharing on Pownce would be difficult to police.

If I were a media executive concerned about protecting my intellectual property, I would pounce on Pownce. It’s possibly no coincidence that the name Mr. Rose chose for his new venture suggests the Internet gamer’s jargon “pwn,” which means to take control of a system by exploiting some vulnerability.
http://www.nytimes.com/2007/07/29/bu.../29stream.html





UK Government Resists Music Industry Pressure, Caps Copyrights at 50 Years
Eric Bangeman

Music copyrights will remain fixed at 50 years after the British government decided against extending their term to as much as 95 years. In May, the Parliamentary Select Committee on Culture, Media, and Sport had recommended that the term be lengthened to bring it more in line with copyright terms in the rest of the world (95 years in the US).

The music industry had lobbied the government hard for a copyright extension, saying that it was necessary to protect the rights of musicians, especially groundbreaking acts whose older songs were about to hit the 50-year limit. Reuters notes that Cliff Richard will no longer receive royalties from his 1958 hit Move It! once the song hits the 50-year-old mark next year.

Criticism from the music industry has come fast and furious in the wake of the government's decision. "Thousands of musicians have no pensions and rely on royalties to support themselves," said Roger Daltry, lead singer of The Who. "These people helped to create one of Britain's most successful industries, poured money into the British economy and enriched people's lives. They are not asking for a handout, just a fair reward for their creative endeavors."

International Federation of the Phonographic Industry CEO John Kennedy joined in the criticism. "Some of the greatest works of British music will soon be taken away from the artists who performed them and the companies that invested in them," said Kennedy. "Extending copyright term would promote vital investment in young talent and new music, all of which will help to secure the UK's future as an exciting music market."

Critics of extended copyright protection point out that musicians already enjoy 50 years of royalties and that copyright laws attempt to balance the rights of artists with a desire to encourage new works and ensure a rich public domain for new artists to build on.

Although the Parliament committee supported extending the copyright term, a committee charged with examining the UK's IP laws said that expanding the copyright term was not a good idea. Former Financial Times head Andrew Gowers, who led the committee that produced the report, said earlier this year that his committee's work actually led them to conclude that the length of music copyrights should be reduced, not increased. Political realities made arguments for reducing copyright terms unworkable, he said. "I could have made a case for reducing it based on the economic arguments," said Gowers. "As it is, we left it in place rather than increasing it to 95 years as some of the music industry wanted and again, I think we steered a happy middle course rather than siding with one or other of the opposite poles of this debate."

The recording industry can still attempt to make its case to the European Union that copyright should be extended and made uniform throughout the EU, but it will not get the backing of the UK government in doing so.
http://arstechnica.com/news.ars/post...-50-years.html





The French Connections
Paul Krugman

There was a time when everyone thought that the Europeans and the Japanese were better at business than we were. In the early 1990s airport bookstores were full of volumes with samurai warriors on their covers, promising to teach you the secrets of Japanese business success. Lester Thurow’s 1992 book, “Head to Head: The Coming Economic Battle Among Japan, Europe and America,” which spent more than six months on the Times best-seller list, predicted that Europe would win.

Then it all changed, and American despondency turned into triumphalism. Partly this was because the Clinton boom contrasted so sharply with Europe’s slow growth and Japan’s decade-long slump. Above all, however, our new confidence reflected the rise of the Internet. Jacques Chirac complained that the Internet was an “Anglo-Saxon network,” and he had a point — France, like most of Europe except Scandinavia, lagged far behind the U.S. when it came to getting online.

What most Americans probably don’t know is that over the last few years the situation has totally reversed. As the Internet has evolved — in particular, as dial-up has given way to broadband connections using DSL, cable and other high-speed links — it’s the United States that has fallen behind.

The numbers are startling. As recently as 2001, the percentage of the population with high-speed access in Japan and Germany was only half that in the United States. In France it was less than a quarter. By the end of 2006, however, all three countries had more broadband subscribers per 100 people than we did.

Even more striking is the fact that our “high speed” connections are painfully slow by other countries’ standards. According to the Information Technology and Innovation Foundation, French broadband connections are, on average, more than three times as fast as ours. Japanese connections are a dozen times faster. Oh, and access is much cheaper in both countries than it is here.

As a result, we’re lagging in new applications of the Internet that depend on high speed. France leads the world in the number of subscribers to Internet TV; the United States isn’t even in the top 10.

What happened to America’s Internet lead? Bad policy. Specifically, the United States made the same mistake in Internet policy that California made in energy policy: it forgot — or was persuaded by special interests to ignore — the reality that sometimes you can’t have effective market competition without effective regulation.

You see, the world may look flat once you’re in cyberspace — but to get there you need to go through a narrow passageway, down your phone line or down your TV cable. And if the companies controlling these passageways can behave like the robber barons of yore, levying whatever tolls they like on those who pass by, commerce suffers.

America’s Internet flourished in the dial-up era because federal regulators didn’t let that happen — they forced local phone companies to act as common carriers, allowing competing service providers to use their lines. Clinton administration officials, including Al Gore and Reed Hundt, the chairman of the Federal Communications Commission, tried to ensure that this open competition would continue — but the telecommunications giants sabotaged their efforts, while The Wall Street Journal’s editorial page ridiculed them as people with the minds of French bureaucrats.

And when the Bush administration put Michael Powell in charge of the F.C.C., the digital robber barons were basically set free to do whatever they liked. As a result, there’s little competition in U.S. broadband — if you’re lucky, you have a choice between the services offered by the local cable monopoly and the local phone monopoly. The price is high and the service is poor, but there’s nowhere else to go.

Meanwhile, as a recent article in Business Week explains, the real French bureaucrats used judicious regulation to promote competition. As a result, French consumers get to choose from a variety of service providers who offer reasonably priced Internet access that’s much faster than anything I can get, and comes with free voice calls, TV and Wi-Fi.

It’s too early to say how much harm the broadband lag will do to the U.S. economy as a whole. But it’s interesting to learn that health care isn’t the only area in which the French, who can take a pragmatic approach because they aren’t prisoners of free-market ideology, simply do things better.
http://select.nytimes.com/2007/07/23...tml?8ty&emc=ty





Africa, Offline: Waiting for the Web
Ron Nixon

ON a muggy day in Kigali in 2003, some of the highest-ranking officials in the Rwandan government, including President Paul Kagame, flanked an American businessman, Greg Wyler, as he boldly described how he could help turn their small country into a hub of Internet activity.

Mr. Wyler, an executive based in Boston who made his fortune during the tech boom, said he would lace Rwanda with fiber optic cables, connecting schools, government institutions and homes with low-cost, high-speed Internet service. Until that point, Mr. Wyler, 37, had never set foot in Africa — he was invited by a Rwandan government official he had met at a wedding. Mr. Wyler never expected to start a business there; he simply wanted to try to help the war-torn country.

Even so, Mr. Wyler’s company, Terracom, was granted a contract to connect 300 schools to the Internet. Later, the company would buy 99 percent of the shares in Rwandatel, the country’s national telecommunications company, for $20 million.

But after nearly four years, most of the benefits hailed by him and his company have failed to materialize, Rwandan officials say. “The bottom line is that he promised many things and didn’t deliver,” said Albert Butare, the country’s telecommunications minister.

Mr. Wyler says he sees things quite differently, and he and Rwandan officials will probably never agree on why their joint venture has been so slow to get off the ground. But Terracom’s tale is more than a story about a business dispute in Rwanda. It is also emblematic of what can happen when good intentions run into the technical, political and business realities of Africa.

Attempts to bring affordable high-speed Internet service to the masses have made little headway on the continent. Less than 4 percent of Africa’s population is connected to the Web; most subscribers are in North African countries and the republic of South Africa.

A lack of infrastructure is the biggest problem. In many countries, communications networks were destroyed during years of civil conflict, and continuing political instability deters governments or companies from investing in new systems. E-mail messages and phone calls sent from some African countries have to be routed through Britain, or even the United States, increasing expenses and delivery times. About 75 percent of African Internet traffic is routed this way and costs African countries billions of extra dollars each year that they would not incur if their infrastructure was up to speed.

“Most African governments haven’t paid much attention to their infrastructure,” said Vincent Oria, an associate professor of computer science at the New Jersey Institute of Technology and a native of the Ivory Coast. “In places where hunger, AIDS and poverty are rampant, they didn’t see it as critical until now.”

Africa’s only connection to the network of computers and fiber optic cables that are the Internet’s backbone is a $600 million undersea cable running from Portugal down the west coast of Africa. Built in 2002, the cable was supposed to provide cheaper and faster Web access, but so far that has not happened.

Prices remain high because the national telecommunications linked to the cable maintain a monopoly over access, squeezing out potential competitors. And plans for a fiber optic cable along the East African coast have stalled over similar access issues. Most countries in Eastern Africa, like Rwanda, depend on slower satellite technology for Internet service.

The result is that Africa remains the least connected region in the world, and the digital gap between it and the developed world is widening rapidly. “Unless you can offer Internet access that is the same as the rest of the world, Africa can’t be part of the global economy or academic environment,” said Lawrence H. Landweber, professor emeritus of computer science at the University of Wisconsin in Madison, who was also part of an early effort to bring the Web to Africa in the mid-1990s. “The benefits of the Internet age will bypass the continent.”

RWANDAN officials were especially interested in wiring primary and secondary schools, seeing information technology as crucial to modernizing the country’s rural economy. Some 90 percent of the country’s eight million people work in agriculture.

But as of mid-July, only one-third of the 300 schools covered in Terracom’s contract had high-speed Internet service. All 300 were supposed to have been connected by 2006.

Over all, less than 1 percent of the population is connected to the Internet. Rwandan officials say the company seems more interested in tapping the more lucrative cellphone market than in being an Internet service provider. (In November, Mr. Wyler stepped down as chief executive of Terracom, saying he wanted to spend more time with his family; he still serves on the board.)

In a telephone interview from his home in Boston, Mr. Wyler said he would not address the government’s criticism, saying he did not want to be quoted as saying anything negative. But he said there were some things he had not anticipated, particularly the technical challenges of linking Rwanda’s Internet network to the rest of the world. The only way to do it is to buy bandwidth capacity on satellites, but there are not enough satellites to meet demand.

Mr. Wyler also says he believes that Terracom suffers from unrealistic expectations. “Terracom has done everything it can, “ he said. “Because of the technical challenges, the Internet service is as good as it’s going to get. But given what we started from, I still think we have accomplished a lot. In the beginning there were a few people with Internet service; now there are thousands.”

The Rwandan government had hoped that the number of Web surfers would be much higher by now. Rwanda, which is about the size of Maryland, has little industry, and its infrastructure is still being rebuilt after being left in shambles by a 1994 genocide in which 800,000 to a million people were killed.

“We have almost no natural resources and no seaports in Rwanda, which leaves us only with trying to become a knowledge-based society,” said Romain Murenzi, the minister of science, technology and scientific research.

Officials saw Terracom’s investment as crucial to its transformation. Unlike many African governments, Rwanda’s was eager to privatize the national telecommunications company, which had outdated equipment, high prices and few subscribers.

But from the start, government officials say, there were problems with Terracom. Mr. Butare, the telecommunications minister, said the government had trouble getting basic information from the company.

Complicating the situation, Mr. Butare said, was that Mr. Wyler tried to run Terracom from the United States, visiting Rwanda just a few weeks at a time. He left day-to-day management to a poorly trained staff, Mr. Butare said.

“There were spots where they did some things here and there,” Mr. Butare said. “But over all they have failed to do what they promised.”

Internet rates have been lowered, from about $1,000 a month when Terracom arrived in 2003, but most people still can’t afford it. The average Rwandan makes about $220 a year, and a fixed-line Internet hookup costs about $90 a month. Basic wireless Internet is about $63 a month. Those rich enough to pay the fees complain about poor service.

Government officials say the company has spent more time marketing and signing up cellphone customers than on expanding Internet service. According to government figures, Terracom has 30,000 to 40,000 mobile phone subscribers and about 20,000 Internet customers.

The situation came to a head late last year, when government officials contended that Terracom secretly tried to trade its shares in the Rwandan telecom to GV Telecom, a regional African telecommunications company incorporated in the British Virgin Islands. Rwandan officials were furious, saying this was a violation of the contract signed by the two parties.

The plan was scrapped and Mr. Wyler was widely criticized. In June, the government fined Terracom nearly $400,000 for failing to comply with its licensing obligations, failing to provide information about its operations and failing to pay several fees.

“We decided to penalize Terracom after they failed to fulfill their obligations for a long time,” said Beatha Mukangabo, legal officer for the Rwanda Utilities Regulatory Agency. Terracom said it has paid the fines and is working with the government to meet all of its obligations.

Mr. Wyler said he has not been involved in Terracom for nearly 10 months and could not comment on its current operations.

Christopher Lundh, Terracom’s new chief executive and a former executive of Gateway Communications in London, has worked in several African countries. He now lives and works full time in Rwanda, and many government officials say Terracom’s performance has improved under his leadership.

Mr. Lundh acknowledged that there were problems with the company’s operations in the past. “The former management did make some promises that they were not able to keep,” he said. “That’s why I was brought in to professionalize things.” He also said that the company could have better handled the matter with GV Telecom but that he thinks the government overreacted.

He said the Rwandan government is to blame for some of the delays. “We would get to schools that don’t even have electricity or computers,” he said. “That is not our fault.” In addition, he said that many of the complaints about the company concerned things beyond its ability to control. Getting adequate bandwidth remains a constant challenge.

Like most telecommunications companies in eastern Africa, Terracom depends on satellites for Internet service. Satellite service is much slower than cable because of delays in the signals. Satellites also provide less bandwidth than cable.

Adding to the problem is that most of the satellites serving Africa were launched nearly 20 years ago and are aging or going out of commission. A satellite set to go into service last year blew up on the launching pad. Power is also an issue, as intermittent power failures in Rwanda hamper efforts to provide a steady electricity source.

DESPITE these limitations and earlier setbacks, Mr. Lundh says Terracom is moving ahead with plans to give Rwanda the most advanced Internet infrastructure in Africa. A nationwide wireless connection should begin operating near year-end, he said, about the time a nonprofit group, One Laptop Per Child, based in Boston, is to introduce a $100 laptop in the country.

And Terracom is continuing to lay fiber optic cables to connect Rwanda to several other African countries, eliminating a need for phone calls and Internet traffic to be routed via European or American networks.

The government, meanwhile, is moving forward with its own plans to build a fiber optic network. It also has granted Internet service licenses to South African companies and plans to issue several more. “We think we are going to have a healthier market pretty soon,” said Nkubito Bakuramutsa, director general of the Rwanda Information Technology Authority. “We have learned from past experience.”

Mr. Bakuramutsa said he hopes to bring the price of Internet service down to about $10 a month.

Mr. Lundh said his company welcomes the competition. But, he added, getting necessary bandwidth remains an issue and no matter what company supplies Internet service, speed will be a problem. “Eventually you reach a point of diminishing returns,” he said. “Unless there is a new undersea fiber optic cable built or a new satellite launched, it’s going to be difficult.”

Magnus K. Mazimpaka contributed reporting from Rwanda.
http://www.nytimes.com/2007/07/22/bu.../22rwanda.html





AT&T Reports Higher 2Q Income
Michelle Roberts

AT&T Inc. posted a 61 percent increase in second-quarter earnings on Tuesday, lifted primarily by its buyout of BellSouth Corp. but also aided by gains in wireless subscribers and revenue.

AT&T, the nation's largest provider of broadband Internet and land and wireless phone services, said net income rose to $2.9 billion, or 47 cents per share, from $1.81 billion, or 46 cents per share in the prior year's quarter. Wireless subscribers rose by 1.5 million to 63.7 million, AT&T said.

A fraction of that growth during the quarter was driven by the introduction of Apple Inc.'s iPhone, for which AT&T is the exclusive carrier. The device, which combines phone, media player and Web-surfing capabilities, went on sale less than two days before the end of the quarter, but in that time, 146,000 iPhones were activated, AT&T said.

More than 40 percent of the devices went to new AT&T subscribers, and sales continue to be strong in July, the company said.

Chairman and Chief Executive Officer Randall Stephenson, who took the helm in early June, has emphasized the mobile business as a key driver for the company. At his first board meeting as CEO, the company agreed to buy rural wireless provider Dobson Communications Corp. for $2.8 billion in cash.

Dobson, which does business as Cellular One in 17 states, has about 1.7 million subscribers.

For the second quarter, AT&T had earnings of 70 cents a share excluding costs for major acquisitions, up from 58 cents per share for the same three months last year and above the 67 cents average estimate of analysts polled by Thomson Financial.

Revenue for the quarter reached $29.5 billion, up from $15.8 billion in the year-earlier quarter.

Revenue growth continues to be driven by wireless data use for services like messaging, downloads and laptop connectivity. Revenue from that business was up 67 percent for the quarter to $1.7 billion.

The company also reported strong growth in the subscriber base for its U-verse television service, a premium service that uses a high-speed Internet connection for delivery. By the end of June, U-verse had 51,000 subscribers in the 23 cities in which it is available, up from the 13,000 users at the end of the first quarter.

AT&T is banking on U-verse to help combat competition from cable companies, which have been bundling high-speed Internet and land line phone service to lure customers away from tradition phone companies.

The company, which has grown aggressively through a string of acquisitions over the last several years, said cost savings from the integration of BellSouth reached $1.9 billion in the first six months of the year. The savings should reach $3 billion by year's end and $5 billion in 2008.
http://www.chron.com/disp/story.mpl/ap/fn/4993535.html





Corning Develops Ultra-Flexible Optical Fiber for High-Rise Homes
Ben Dobbin

Corning Inc. is finding its way around very tight corners to help high-speed Internet service reach high-rise apartments and condominiums.

The world's largest maker of optical fiber said Monday it has developed a new fiber that is at least 100 times more bendable than standard fiber, clearing a major hurdle for telecommunications carriers drawing fiber into homes.

"This is a game-changing technology for telecommunications applications," said Corning's president, Peter Volanakis. "We have developed an optical fiber cable that is as rugged as copper cable but with all of the bandwidth benefits of fiber."

Three Corning scientists invented low-loss optical fiber in the early 1970s. The gossamer-thin strands of ultra-pure glass delivering voice, video and data at the speed of light have replaced copper as the backbone of America's telephone and cable television networks and enabled the phenomenal growth of the Internet.

Current optical fiber doesn't carry light well when it is bent around corners and routed through a building, making it difficult and expensive to run fiber all the way to homes and businesses. The ultra-flexible technology allows the fiber to be bent with virtually no signal loss, Corning said.

Corning said the improvements will enable carriers to economically offer high-speed Internet, voice and high-definition TV service to virtually all high-rise buildings.

In standard fiber, the light signal leaks out at bends or turns and "with two 90-degree turns, the signal is lost," Corning spokesman Dan Collins said. "This design relies on nanostructures that serve as a mirror or a guardrail, and as the fiber is turned or bent, the light doesn't leak out. We have wrapped the fiber around a ball point pen and it retains its effectiveness."

Michael Render, a market researcher in Tulsa, Okla., said the new product "would be an important breakthrough" in fiber-to-the-home systems.

More than 1 percent of North American homes are now directly connected to fiber, but many of them are single-family dwellings, Render said.

"There obviously are a large number of people that live in multi-tenant buildings, and improvements in the way to get fiber to those individual living units could be very significant," he said.

Render said the technology would make it easier to bring fiber "all the way to each individual living room, for example, or at least to each floor," instead of taking it only to the basement and then using existing wiring to reach the living unit.

There are more than 25 million high-rise apartment homes in the United States and more than 680 million worldwide. "The high cost of installation and difficulty in delivering fiber to the home made this market unappealing to most providers," Volanakis said in a statement.

Corning formed a working team with New York-based Verizon Communications Inc. in February to tackle the problems of installing fiber in multiple-dwelling buildings. Verizon is the only major U.S. phone or cable company to aggressively draw fiber to existing homes.

"This fiber technology will enable us to bring faster Internet speeds, higher-quality high-definition content and more interactive capabilities than any other platform which exists today," said Paul Lacouture, a Verizon Telecom executive.
http://hosted.ap.org/dynamic/stories...EAST&TEMPLATE=





US Senators Call for Universal Internet Filtering
Adam Thomas

US senators today made a bipartisan call for the universal implementation of filtering and monitoring technologies on the Internet in order to protect children at the end of a Senate hearing for which civil liberties groups were not invited.

Commerce Committee Chairman Daniel K. Inouye (D-Hawaii) and Senate Commerce, Science, and Transportation Committee Vice Chairman Ted Stevens (R-Alaska) both argued that Internet was a dangerous place where parents alone will not be able to protect their children.

“While filtering and monitoring technologies help parents to screen out offensive content and to monitor their child’s online activities, the use of these technologies is far from universal and may not be fool-proof in keeping kids away from adult material," Sen. Inouye said. “In that context, we must evaluate our current efforts to combat child pornography and consider what further measures may be needed to stop the spread of such illegal material over high-speed broadband connections."

"Given the increasingly important role of the Internet in education and commerce, it differs from other media like TV and cable because parents cannot prevent their children from using the Internet altogether," Sen. Stevens said. "The headlines continue to tell us of children who are victimized online. While the issues are difficult, I believe Congress has an important role to play to ensure that the protections available in other parts of our society find their way to the Internet."

The measures they are calling for include directing the Federal Communications Commission to identify industry practices "that can limit the transmission of child pornography" and requiring the Federal Trade Commission to form a working group to identify blocking and filtering technologies in use and "identify, what, if anything could be done to improve the process and better enable parents to proactively protect their children online."

"In its zeal to protect kids from predators and potentially inappropriate content, Congress must not trample the First Amendment rights of Internet users," Center for Democracy and Technology said in a statement submitted to the Committee today.

They highlighted the finding of a report prepared by diverse group of people including individuals with expertise in constitutional law, law enforcement, libraries and library science, information retrieval and representation, developmental and social psychology, Internet and other information technologies, ethics, and education found that “public policy can go far beyond the creation of statutory punishment for violating some approved canon of behavior.”

"[T]he most important finding of the committee is that developing in children and youth an ethic of responsible choice and skills for appropriate behavior is foundational for all efforts to protect them—with respect to inappropriate sexually explicit material on the Internet as well as many other dangers on the Internet and in the physical world," the Thornburgh Committee concluded.
http://pressesc.com/news/78225072007...rnet-filtering





Congress: P2P Networks Harm National Security

Politicians charged on Tuesday that peer-to-peer networks can pose a "national security threat" because they enable federal employees to share sensitive or classified documents accidentally from their computers.

At a hearing on the topic, Government Reform Committee Chairman Henry Waxman (D-Calif.) said, without offering details, that he is considering new laws aimed at addressing the problem. He said he was troubled by the possibility that foreign governments, terrorists or organized crime could gain access to documents that reveal national secrets.

Also at the hearing, Mark Gorton, the chairman of Lime Wire, which makes the peer-to-peer software LimeWire, was assailed for allegedly harming national security through offering his product.

The documents at risk of exposure supposedly include classified government military orders, confidential corporate-accounting documents, localized terrorist threat assessments, as well as personal information such as federal workers' credit card numbers, bank statements, tax returns and medical records, according to recent studies by the U.S. House of Representatives Committee on Oversight and Government Reform, the U.S. Patent and Trademark Office, and private researchers.

Evidence that sensitive information is accessible through peer-to-peer networks illustrates "the importance of strengthening the laws and rules protecting personal information held by federal agencies" and other organizations, said Rep. Tom Davis (R-Va.), the committee's ranking member, who has sponsored a bill that would impose new requirements on government agencies that discover security breaches. "We need to do this quickly."

The politicians present Tuesday generally said they believe that there are benefits to peer-to-peer technology but that it will imperil national security, intrude on personal privacy and violate copyright law, if not properly restricted. Both Waxman and Rep. Paul Hodes (D-N.H.) dubbed P2P networks ongoing national security threats.

Congressional gripes about P2P networks are hardly new, and in the past, they have reinforced concerns raised by the Motion Picture Association of America and the Recording Industry Association of America. Four years ago, the same committee held a pair of hearings that condemned pornography sharing on P2P networks and also explored leaks of sensitive information. And throughout 2004, Congress considered multiple proposals that would have restricted--or effectively banned--many popular file-swapping networks. Waxman noted that he was not seeking to ban peer-to-peer networks this time around but rather to "achieve a balance that protects sensitive government, personal and corporate information and copyright laws."

To be sure, the kind of information leaks that alarmed politicians at Tuesday's hearing are most likely already against the law or federal policy. It is illegal for government employees to leak certain types of classified documents without approval, either electronically or through traditional paper means.

Mary Koelbel Engle, the associate director for advertising practices in the Federal Trade Commission's Bureau of Consumer Protection, said her agency has found in its studies of peer-to-peer network use that risks to sensitive information "stem largely from how individuals use the technology rather than being inherent in the technology itself."
http://news.zdnet.com/2100-1009_22-6...tml?tag=st.num





800,000 Stolen Social Security Numbers: a 22-Year-Old Scapegoat?
David Cassel

A 22-year-old intern said today he's the "scapegoat" for the loss of over 800,000 social security numbers.

A backup tape was stolen from his car last month containing at least 770,000 social security numbers (with the corresponding names) for Ohio taxpayers. It also contained the social security numbers for another 64,000 state employees. Today the intern issued a statement with his side of the story.

Four months ago 22-year-old Jared Ilovar — who's studying computers at DeVry University — started an internship with the state of Ohio. He said he'd sometimes take home a data tape to ensure there was an off-site version of the data. "The extent of my instructions on what to do after I removed the tapes from the tape drive and took the tapes out of the building was, 'bring these back tomorrow.'"

So on the night of the theft, over 800,000 social security numbers were on a tape in his car, parked outside his apartment. "It is my understanding that five or more cars were broken into the same night as my car was broken into…" he announced today, "and now I am the scapegoat for the State of Ohio."

It became the internship from hell — though from a security perspective, it was an undeniably sloppy procedure. A separate report Friday from Ohio's Inspector General noted that the intern "remembered to bring them into his apartment approximately 85% of the time," and that on those occassions, he'd put the data tapes "on top of his TV, so that he would remember to bring them back on the following day." After investigating more than a month, the Inspector General reported this had been the policy for over five years, and that for the last two years, it had been executed by interns. (One intern even described the continuing tradition proudly as "the passing of the torch.") Amazingly, the same policy had also been in effect at Ohio's Office of Management and Budget for the last eight years.

Their report also faults the chain of command, which was muddled by contractors. The Inspector General identified Jared Ilovar as "a 22-year-old, $10.50-an-hour employee" hired just three months earlier, who received his assignment from…another intern. The intern reported to a $125-an-hour consultant, who reported to another $200-an-hour consultant…

But the intern also says that when he reported the theft of the backup tapes, he was instructed not to notify the police. "Because of my following their instruction…I was looked upon as if I was the criminal. I was put through a grueling three hour polygraph test, numerous interviews with various investigators, and countless phone calls…" The Inspector General's reports that had a timely report been filed, the Highway Patrol could have been alerted — and nearby trash bins could've been searched in case the tapes had been discarded nearby.

And the internship from hell ended badly, too. In his statement today, he remembered that Friday, "I was called in to an office and handed a letter of resignation and told, 'sign this letter of resignation or you are fired.'" He asked for more than 10 minutes, so he could talk to his parents — and was refused. He later resigned — then spoke to his parents again, and rescinded his resignation. And then was fired.

The Inspector General's report shares a crucial recommendation from Gartner Inc and other security analysts: encrypt data before storing it off-site, and secure it like cash. (If not using armored transport, then electronically transmitting the data to off-site storage using a secure connection.) Though the State of Ohio is a $52-billion-a-year enterprise, they had instead authorized "a succession of interns" to take the unencrypted tapes home for the previous two years, with a friendly reminder to store them "in a safe place."

Using census data from 2000, it seems the stolen data includes social security numbers for 7.3% of the people in the entire state of Ohio. And the city police force has since offered a whopping $500 reward for the return of the data.

Looking at the incident, a technology worker in another state identified the real culprits as the policy makers for the state of Ohio.

"That is an unbelievable back-up plan!

"'Make Skippy do it!'"
http://tech.blorge.com/Structure:%20...old-scapegoat/





Congress and the Feds Should Clean Up Their Own Act
George Ou

Every once in a while you’ll get a political hearing on capitol hill where elected Government officials will grand stand and politicize issues that should have nothing to do with politics. This time it’s Government Reform Committee Chairman Henry Waxman who says he is considering new laws against P2P (Peer to Peer) software citing the possibility that P2P software may compromise National Security and can be used by organized crime. The problem is that Mr. Waxman hasn’t a clue what he’s talking about and this new round of political grandstanding is absurd.

The Federal Government should clean up their own security act because year after year they get failing or near failing grades. Mr. Waxman is slamming Lime Wire for producing software that may circumvent Federal Government security, but the real question is why are Federal Government IT departments allowing Federal employees to install Lime Wire or any other piece of software on Government computers? The mere fact that Government Employees have administrative access to install software on their computers let alone computers with access to sensitive information is absurd. If you can’t even keep employees from installing Lime Wire, you’re sure as hell not going to prevent them from installing root kits which are infinitely more destructive.

Why pick on Lime Wire? Sandy Berger stole secret documents from the National Archives by shoving the documents in to his socks so will Congressman Waxman propose a new law against socks? Will Congressman Waxman call the CEO of Fruit of the Loom to the hearings and grill him about the dangers of socks? If we’re afraid that Federal Employees with use P2P software to divulge national secrets, shouldn’t we be afraid they’ll use the fax machine too? Shouldn’t we be more worried about the type of employees we place in to sensitive positions? While we’re at it, why not make Malware illegal? Oh yeah, they’re already illegal but that hasn’t stopped them. The onus is on the IT organization to lock down their end points and network resources so that malicious software doesn’t get in to their infrastructure in the first place. The onus is on the Government or any organization to lock down their infrastructure from the physical layer to the application layer to the people working for them.
http://blogs.zdnet.com/Ou/?p=633





Showdown Over File Sharing
Scott Jaschik

College officials have been aware and wary of growing Congressional interest in student file sharing of music and videos — a practice many students consider normal and that the entertainment industry views as tantamount to theft. Colleges, generally feeling caught in the middle, have worried that Congress might try to impose an unworkable solution.

And that’s what they fear could happen this week — with the Senate majority leader (needless to say someone with whom colleges do not want to pick a fight) largely responsible. Sen. Harry Reid of Nevada announced his plan to prevent “campus based digital theft” through a series of requirements that he is expected to try to attach to the reauthorization of the Higher Education Act, when the Senate takes up that legislation, most likely in the next day or so. The Reid plan would require colleges to:

• Report annually to the U.S. Education Department on policies related to illegal downloading.
• Review their procedures to be sure that they are effective.
• “Provide evidence” to the Education Department that they have “developed a plan for implementing a technology-based deterrent to prevent the illegal downloading or peer-to-peer distribution of intellectual property.”

The measure would also require the education secretary to annually identify the 25 colleges and universities that have in the previous year received the most notices of copyright violations using institutional technology networks.

While those provisions are in the amendment Senator Reid unveiled last week, they could easily change today or tomorrow, and lobbyists following the situation described it as fluid.

Reporting requirements are already in the reauthorization bill, so they aren’t the reason colleges are upset. Mark Luker, vice president of Educause, said that the measure on “technology based” systems would force colleges to buy software or hardware to theoretically block file sharing when that technology hasn’t yet become effective. Some experts also question whether this technology in its current form would end up blocking file-sharing that does not violate anyone’s copyright and that supports teaching and research.

“These technologies do not work well,” Luker said. “They are really not ready for prime time and colleges should not be forced to install them.”

Luker also objected to the way the legislation makes colleges uniquely responsible for the problem when file sharing starts in middle school these days and doesn’t end with college graduation. “Colleges have been working very hard on this issue,” he said, trying to teach their students about copyright law, adding services that provide free or low cost music downloads, and adding new rules all the time to discourage illegal file sharing. The University of Kansas, for example, has just toughened punishments for those who use campus networks in violation of downloading bans.

It is unfair for Congress to expect colleges to prevent all file sharing while ignoring its prevalence elsewhere, Luker said. “Colleges get a new cohort of freshmen every year, so they can come in with these habits well established with their prior life,” he said.

Another problem with the Reid proposal, Luker said, is that the measure of copyright notice violations will end up implying that large institutions (which receive more of such notices by virtue of the size of their student bodies) ignore copyright law, when they are just large. Further, such notices are not necessarily legal findings, but are the opinions of the entertainment industry, he said.

“This is asking the education secretary to take actions based on information provided by the entertainment industry, and that’s inappropriate for the government and the entertainment industry,” Luker said.

Educause and other groups have started a lobbying campaign against the measure, stressing both their substantive opposition and complaints that there were never hearings on the proposal.

At the same time, the entertainment industry is lobbying for the amendment — and arguing that colleges need more of a prod from the government on the issue. Mitch Bainwol, chairman and CEO of the Recording Industry Association of America, on Friday sent a letter to Senator Reid praising his proposal.

In his letter, Bainwol said that more than half of college students engage in illegal file sharing or downloading. While he acknowledged “some progress” by colleges in recent years, he said that “much more can be done.” Bainwol noted that many campus networks are created with taxpayer funds and are intended for “academic and research purposes,” but end up, he said, giving students “a means to steal.”

The letter repeatedly made the case that colleges are directly responsible for the problem, which the letter maintained is hurting the economy. Wrote Bainwol: “Colleges have provided an ideal environment for online theft to thrive, producing a generation of citizens lacking an appreciation for the true value of copyrighted works.”
http://www.insidehighered.com/news/2007/07/23/fileshare





Reid Amendment Misrepresents Data
Kenneth C. Green

The comments by Mitch Bainwol, chairman and CEO of the Recording Industry Association of America, misrepresent the RIAA’s own data on who is engaged in illegal downloading and which (broadband) networks are being used for illegal downloading. Some examples: — only 4 percent (329) of the more than 8400 “John Doe” lawsuits filed by the RIAA in 2004-2005 involved college students; the rest were “civilians” using consumer broadband services. — a RIAA news release dated 28 Feb 07 states that “college students are the most avid music fans.” Yet data from the RIAA’s 2005 Consumer Profile reveal that consumers ages 18-24 (including but not limited to college students) account for approximately one-sixth (15-17 pct.) of the music buying population in the United States; in contrast, consumers ages 25 and older purchase two-thirds (66.9 pct.) of all recorded music.— “half” the nation’s more than 16 million college students ages 16-67 are NOT engaged in illegal downloading as claimed by Mr. Bainwol and others from the RIAA.

Directly related to the Reid amendment is testimony before the House Science and Technology Committee Hearing on Digital Piracy on 5 June 2007. All four expert witnesses invited by Chairman Gordon – including Vance Ikezoye, president of Audible Magic, a provider of IT tools intended to stem digital piracy – acknowledged that technology will not solve the digital piracy problem. In his testimony before Chairman Gordon, Mr. Ikezoye stated quite clearly that “technology will never be the entire solution to [P2P piracy].” At the same hearing, Dr. Adrian Sannier from Arizona State University reported that his campus recently spent $200,000 for a heavily discounted site license to use the Audible Magic technology. Dr. Sannier described campus spending on technology to stem P2P piracy as an unwinnable “arms race.”

Consumer broadband providers – telcos and cable companies – promote digital piracy by advertising that home broadband and wireless services provide faster access to “music, movies, and more,” without explaining who owns this content or how to purchase it. Moreover, unlike colleges and universities, consumer broadband providers generally fail to provide any user education about digital content and copyright issues when users establish new accounts. Yet neither the RIAA nor the Congress seems willing to discuss the role of consumer broadband providers in implicitly promoting — or at least condoning — digital piracy.

Reid’s amendment targeting Campus-based Digital Theft Prevention will only serve to force colleges and universities to spend significant sums for ineffective software while imposing additional and significant reporting and compliance costs. The only beneficiary will be the RIAA, which will then report to its members that it has worked with Congress to “do something” to address digital piracy on campus networks.

The RIAA’s almost exclusive focus on campuses ignores the broader and more costly problem of illegal P2P downloading involving consumer Internet service providers and the consumer market.

Ample evidence indicates that requiring colleges and universities to purchase a “technology-based deterrent “ to prevent illegal P2P downloading will be ineffective practice and bad public policy.
http://www.insidehighered.com/news/2007/07/23/fileshare





Universities Win Senate Fight Over Anti-P2P Proposal
Declan McCullagh

Senate Majority Leader Harry Reid has withdrawn anti-file sharing legislation that had drawn yowls of protest from universities this week.

Reid, without explanation, on Monday nixed his own amendment that would have required colleges and universities--in exchange for federal funding--to use technology to "prevent the illegal downloading or peer-to-peer distribution of intellectual property."

Instead, Reid replaced it with a diluted version merely instructing higher ed institutions to advise their students not to commit copyright infringement and tell students what actions they're taking to prevent "unauthorized distribution of copyrighted material" through campus networks. The revised version was tacked onto the Higher Education Reauthorization Act on Tuesday, a Reid spokesman said in a telephone conversation, which the Senate then approved by a 95-0 vote.

The original version, which had more teeth, alarmed lobbyists for universities, which tend to be delighted to accept federal largesse but rather dislike the government placing conditions on the cash.

Even worse, in their opinion, must have been the additional requirement (also now deleted) that the Department of Education annually identify the 25 colleges and universities receiving the "highest number of written" complaints from copyright owners.

Educause, a group that represents universities and related organizations, sent out an "URGENT CALL TO ACTION" on Friday that called Reid's original amendment "yet another attempt by the federal government to dictate the day-to-day operations of colleges and universities." It urged recipients to phone Congress immediately "and tell them how much higher education opposes this amendment."

It's unclear why the senator yanked his original anti-P2P amendment on Monday evening, but the most obvious explanation is that the last-minute pressure worked.

What's a little odd is that Reid offered a third version of the amendment earlier in the week. It said the Department of Education "shall not find any of the 25 institutions of higher education...to be ineligible for continued participation in a program authorized under this subchapter because of failure to comply with this section."

Translation: Universities could ignore the requirements of creating "a technology-based deterrent to prevent the illegal downloading or peer-to-peer distribution of intellectual property" without suffering any financial consequences. The only downside would be the potential for bad publicity, but even that appeared to prove worrisome enough.

The final version amends existing federal law that already deluges students with piles of paperwork they already never read on topics like faculty listings, special facilities for the handicapped, accreditation information, graduation rate statistics, campus crime reports, and so on. Now the piracy information will be added to the stack. ("Information required by this section shall be produced and be made readily available upon request, through appropriate publications, mailings, and electronic media, to an enrolled student and to any prospective student.")

We should note that by "final," in true Washington fashion, we don't actually mean final. It may be final at the moment, but because the broader bill includes controversial components like $17 billion more on taxpayer-subsizied student loans and debt forgiveness, it may not necessarily become law. The House of Representatives has approved a different version of the law, and the Bush administration has said either version could amount to an unacceptable increase in spending.

Still, the Motion Picture Association of America seems to have decided that even the diluted final amendment is better than the current state of the law, and put a good face on the outcome. In a press release on Tuesday afternoon, the MPAA called the Senate vote a "major step" to combat piracy on campus, and included its estimate that movie piracy among students accounts for "more than half a billion dollars loss to the U.S. industry annually."
http://news.com.com/8301-10784_3-9749071-7.html





Russian Prosecutors Seek Jail Time for Allofmp3.com Owner
Greg Sandoval

Prosecutors in Russia have demanded jail time for the operator of Allofmp3.com, according to published reports.

Denis Kvasov, the former owner of the popular Russia-based music site that sold unauthorized music downloads, is facing charges for massive copyright infringement, according to German newspaper, Deutsche Presseagentur.

The prosecutor in the case has asked the court to sentence Kvasov to three years in prison and ordered him to pay restitution to EMI, Warner and Universal in the amount of $590,000 (15 million rubles), Presseagentur reported.

Allofmp3.com closed last month after U.S. trade officials pressured Russia's government to crack down on copyright theft. The Recording Industry Association of America had long targeted the site. The U.S. had suggested that Russia might be barred from joining the World Trade Organization unless it complied.
Now on News.com
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United States Trade Representative spokeswoman Gretchen Hamel, whose agency negotiates trade agreements with foreign governments, said earlier this month her group was pleased with Russia's actions to close the "notorious site" Allofmp3.com.

"This action follows months and years of the U.S. government, Congress, and industry urging Russia to step up its protection of intellectual property," Hamel said. "We are concerned that its piracy activities appear to have migrated to other Web sites based in Russia."

Within days of the closure of Allofmp3.com, a new site cropped up, Mp3sparks.com, which appeared operational on Tuesday. The new site is reportedly run by the former operators Allofmp3.com, although that fact could not be independently confirmed by CNET News.com.
http://news.com.com/Russian+prosecut...3-6198520.html





BitTorrent Sites Shut Down, Admins Arrested
Ernesto

In a renewed effort to put a halt to piracy, Spanish Police shut down two BitTorrent sites. Todotorrente.com and trackertdt.com were both taken offline and three administrators were arrested and accused of facilitating “copyright infringement”.

The main target, todotorrente.com, was one of the largest Spanish BitTorrent sites in Spain with tens of thousands active users. On the site we now read the following message (translated):

“Closed By Judicial Order”

According to the Police, todotorrente.com was responsible for more than 500,000 € in losses to copyright holders, while the site itself made more than 30,000 € in profits. Numbers that can’t be backed up by any evidence of course, but we’re used to that.

Todotorrente.com was not the only site affected by the raids. In addition, the police took down trackertdt.com, a sister site of todotorrente.com. Gamesfive.net, another sister site, now redirects to blackdivx.org.

This is not the first time that Spanish authorities take action against BitTorrent sites. Last year, 15 administrators of BitTorrent and eDonkey sites were arrested, in the largest P2P raid in Spanish history. Most of the sites that were shut down last year (17 in total) remain unavailable up until today, however, pctorrent.com now redirects to newpct.com, one of the largest BitTorrent sites in Spain.

A bittersweet week for Spanish pirates.
http://torrentfreak.com/bittorrent-s...mins-arrested/





Filtering Torrents: The Pirate Bay vs. Torrentspy & Isohunt
Ernesto

Torrentspy and Isohunt announced that they will give content owners a “carte blanche” to remove torrents from their BitTorrent search engines last month. The perfect solution for content owners and site admins says Torrentspy - a nightmare according to The Pirate Bay.

It all started when Torrentspy owner Justin launched a .torrent removal system called “FileRights” that content owners can use to take down “infringing” torrents. From now on, the FileRights system will be used on Torrentspy and Isohunt, two BitTorrent sites that were sued last year by the MPAA.

This basically means that the content owners such as the RIAA and the MPAA get complete control over the(ir) content on all the sites that use FileRights. They decide what torrents can stay and what torrents have to be filtered out. Pirate Bay admin Brokep thinks that the removal system is a step in the wrong direction and accuses Torrentspy of trying to make money by sleeping with both sides, “if you can’t take the heat, get out of the kitchen, don’t blow it up so nobody else can cook” he adds.

With FileRights, content owners can remove whatever they want and this raises the question how honest the content owners will be in the filtering process. As Brokep notes:

“Who checks that a copyright claim is correct? Who downloads all those files and checks them out to see if they are what they seem to be? What happens when the right holders start censoring other peoples content as well, maybe out of moral or maybe for a competing company? I’m afraid for how little people care about their own rights. Yes, the peoples rights, not the right holders rights.”

Isohunt’s owner Gary Fung clearly disagreed with this and started throwing mud back at Brokep by saying:

“You are either illiterate and don’t check the frontpage of sites you are pointing fingers at, or you are a communist. Or both. What makes you think you have rights to content you didn’t produce? People’s rights vs. copyright holders’ rights? Please. I will laugh at you when you are marked a terrorist and US armies hunt you down. Not that I like the whole anti-terrorist thing from the US but I digress.”

Justin from Torrentspy told TorrentFreak that he doesn’t understand all the commotion about FileRights.

“I dont believe FileRights is incompatible with what is going on now,” he says. “TorrentSpy processes DMCA requests and always has, so do Isohunt, Mininova, and many others. The idea for FileRights actually came from a file hash filtering system that TorrentSpy has been using for over two years. Many companies, such as Microsoft, the RIAA, the IFPI, Universal, and the Business Software Alliance have been using the system to remove their content from TorrentSpy for years already. FileRights just makes the process less time consuming for content owners and BitTorrent site admins.”

A noticeably upset Brokep, who was never a fan of either Torrentspy or Isohunt, turns it up a notch on his blog, and asks Torrentspy owner Justin:

“Or will you also in the next step of the system demand logs of the users that downloaded the content, so when a right holder puts up a torrent or hash he automatically gets the IPs that downloaded the same file? Maybe a good next step Justin”

It is clear that the admins clearly differ in their vision of the DMCA takedown process. The Pirate Bay chooses not to respond to DMCA takedown requests at all, while Torrentspy and Isohunt’s FileRights system makes it easier for content owners to take down infringing .torrent files.

So what do you think? Is the filtering system that Isohunt and Torrentspy use a necessary evil?
http://torrentfreak.com/filtering-to...ntspy-isohunt/





Get into Private BitTorrent Sites with Tracker Checker 2
enigmax

Constantly checking private trackers for open signups can be a drawn out task. Some open only briefly and by the time one gets a tipoff, all the places have gone and registrations are closed again. Tracker Checker 2 automatically checks chosen sites for open signups, getting you into those elusive private sites with a minimum of effort.

The Tracker Checker 2 installer is small at just under 130kb. Needing the .NET framework to run, it installs pain-free in seconds and with a click of the shortcut, it’s ready to find those elusive no-invitation-required open signups on private trackers.

The software has a clear interface and comes with around 20 trackers pre-configured and ready to check. It can sit in your system tray silently checking for open signups and alerting you when they become available.

By simply clicking on the site in the list you wish to signup to, followed by the globe icon, an instance of your web browser is launched and you are taken directly to the new account page and you are ready to signup.

Although it’ll take some time to exhaust the content available on the pre-configured trackers, it’s inevitable that at some point you’ll wish to add new sites for the software to check and fortunately, this is fairly straightforward. Clicking the ‘Add’ icon brings up a box where one can enter various details;

Simply enter the tracker name for reference, followed by the site’s signup URL (commonly http://www.sitename.com/signup.php) followed by a text search string. On certain sites where one signs up to a forum, ‘Desired Username’ appears on the page when signups are open, so entering this into the ‘Find String’ box produces the desired results when the ‘Positive’ match button is clicked.

If for example the signup page currently says “signups are closed’, by entering this same text into the ‘Find String’ section but selecting ‘Negative’ match, you will notified when this text does not appear - i.e when signups are open.

By using a modified trackers.xml such as that created by PyroniC, the number of trackers that can be checked is increased to around 70.

The public preview of Tracker Checker 2 is available for free download from stamcar.com. Don’t forget to leave some feedback for the author.
http://torrentfreak.com/get-into-pri...ker-checker-2/





µTorrent Mobile: A First Look
Thomas Mennecke

Remotely controlling a P2P application via the web is nothing new. eMule popularized the feature, while µTorrent and Azureus introduced the concept to the BitTorrent community. This technology allows the individual to log into their home machine from a remote location and, among many other things, add torrents, pause a download, or discontinue a download.

Sounds great if there's an internet cafe or lap top nearby. Unfortunately, these remote interfaces don't have the capacity to support mobile devices such as cell phones or PDAs - at least on the devices we've tested the concept on. But that's all changed. A new project called "µTorrent mUI" aims to bring mobile user interface compatibility to the µTorrent client. And it appears Sindre Sorhus, the developer behind the project, has done just that.

To review the latest iteration into the BitTorrent foray, we armed ourselves with a Palm TX PDA, the latest version of µTorrent, and a torrent of a “really.great.creative-commons.movie.avi”.

After downloading and setting up our creative-commons torrent, the first thing we do is head over to http://www.utorrentmui.com on the Palm TX. The Palm TX PDA is basically a small computer, which runs version 5.0 of the Palm Operating System. The Palm Treo and a few other major mobile phones use a similar operating system. Plam TX's default browser, known as "Blazer" is an adequate web surfing mechanism, and hopefully should be able to support µTorrent mUI.

Great success! We’re greeted by a basic login screen. Providing you’ve already set up your µTorrent to accommodate remote web access, simply enter your remote computer’s IP address, the correct username and password, then hit “Log In”.

BAM! There’s our really.great.creative-commons.movie torrent! The initial screen gives us a few options, especially useful if we have more than one torrent going. All available options are self explanatory. The “settings” link allows us to throttle our upload/download bandwidth. Now let’s click on the torrent link.

Oh Snap! From this link, we can check a lot of vital information on our torrent download, such as its size, ETA, and tracker information. We also have a few options at our disposal. Two other options that didn’t quite make the screen shot are “Remove” and “Delete”.

The bottom line

µTorrent mUI has all the basic features you could want in order to remotely control your µTorrent application. You can stop, start, pause, and resume a torrent, while also throttling bandwidth. The one big thing that µTorrent mUI lacks is the ability to add torrents, which the official µTorrent web interface does nicely. However Sindre informs us that this is a feature he greatly desires, and that he's actively working on for future versions. The complexity of doing so over a mobile device remains challenging, as no current BitTorrent trackers support such portables. However if Sindre was able to overcome the challenge of reverse engineering the undocumented µTorrent web API (Application Programming Interface), incorporating the ability to add torrent files shouldn’t be too far behind.

µTorrent mUI is a fascinating step forward in bringing file-sharing technology to mobile devices. It’s useful in that it allows the individual to remotely monitor a download, or kill a download that’s become idle. Sindre told Slyck.com that when the Mac µTorrent is eventually released, he’ll certainly make his application compatible.

µTorrent mUI is a work in progress, however should not be underestimated. The developer behind the project has demonstrated a degree of talent, and it’s likely the file-sharing community will be expecting great things. So for now, enjoy µTorrent mUI for what it is. If you’re out and about, and absolutely must know the status of your really.great.creative-commons.movie.avi.torrent, uTorrent mUI delivers the goods. And best of all, it's open source.
http://www.slyck.com/story1551_Torre...e_A_First_Look





uTorrent Relaunched as Official BitTorrent Client
Ernesto

BitTorrent Inc launched their rebranded version of uTorrent as BitTorrent 6.0. The good news is that uTorrent and its community will not be replaced. Not now, and not in the future.

The rebranded version of uTorrent looks just like the original uTorrent client, however, it now includes BitTorrent DNA. Another significant change is the absence of the built in search for sites like Mininova, Torrentz and The PirateBay. However, you can easily add those under options –> preferences.

Last year, when BitTorrent Inc acquired uTorrent, it was said that the client will continue to have its own website and community for a while. Many expected that the launch of the rebranded uTorrent client as the mainline BitTorrent client would be the end of uTorrent, but this is not the case. When we asked BitTorrent Inc CEO Ashwin Navin about the future of uTorrent and the uTorrent community he told us:

“utorrent.com and uTorrent community will exist indefinitely. It’s vibrant and growing, and we value the feedback provided in the forums a lot. It is not our plan to fold utorrent.com into bittorrent.com, but foster growth for both independently.”

Great news, but some (former) uTorrent users will always have their doubts. Ever since BitTorrent Inc took over, a lot of rumors started popping up, and uTorrent was even banned from several private BitTorrent trackers.

Most people were afraid that uTorrent was sending data to the MPAA or other anti-piracy outfits. These rumors were fueled by the fact that one of the uTorrent Beta releases was marked as a trojan by some anti-virus applications. Here at TorrentFreak we looked into the suspicious behavior reported by some of our readers, but up until now we did not find any hard evidence to support these claims. With Wireshark we tried to replicate the findings reported by some users several times, both on virtual machines and in use systems, but we didn’t find anything suspicious.

But I’m sure this won’t comfort the really paranoid people among us.
http://torrentfreak.com/utorrent-rel...orrent-client/





DRM-Free MP3s Coming to Yahoo, URGE
BetaNews Staff

MusicNet, the company that powers the song libraries of Yahoo! Music Unlimited and URGE, said Tuesday that it will make available over 1 million tracks in MP3 format without digital rights management. The move follows Apple offering DRM-free songs in its own AAC format through iTunes.

Like Apple, MusicNet will offer the song catalog of EMI -- the only top record label currently willing to drop DRM requirements -- as well as several leading independent labels including Righteous Babe, Nettwerk, Madacy, Nitro, and others. By using the MP3 format as opposed to Windows Media, MusicNet will enable customers of Yahoo and URGE to transfer their songs to practically any portable media player they choose. Pricing and a specific launch date for the MP3 option has not been set, but MusicNet said it will happen this quarter.
http://www.betanews.com/article/DRMF...RGE/1185300009





Legal and free

Labrador Summer Sampler 2007
WebBlurb

Well, putting the massive 68-track Labrador Summer Sampler 2007 on our server didn't work quite as smoothly as we'd hoped. I don't know if we overestimated our server or underestimated the need of good music this summer. Either way, it's been taken care of now.

> Download Labrador Summer Sampler 2007 from Piratebay here!

http://www.labrador.se/news.php3?lab=070719.080323





Pardon Me While I Boot Up My Stereo
Michel Marriott

Twenty-five years ago, the concept of personal computer as personal music box seemed almost as radical as a DeLorean DMC-12 automobile equipped with a flux capacitor. But times change. Technology and how we use it appear to change even faster.

The Consumer Electronics Association, an electronics industry trade group based in Arlington, Va., recently found that 72 percent of adults with Internet access are listening to their computers, making music the most universal type of content on PCs today.

In fact, some 77 percent of home PC audio listeners spend an average of nine hours a week listening to music on their computers, according to the CEA study, Computer-Sourced Audio Consumption in the Home.

Not surprising, most, 79 percent of listeners, connect a pair of speakers to their computers. But mostly to listen at their desks. Only 9 percent connected the computer to their home audio systems.

Mainly, people are using their computers as very expensive CD players. The study found that the physical media, like CDs, remain the primary source of content among home PC audio users, with digital files and downloaded audio next. The study found that audio and video subscription services remain “rare forms of computer-sourced content.”

And while 86 percent of home PC audio listeners said they were satisfied with their computer as music maker, more than one-third of the listeners said, in the study that was conducted in April and released this summer, that they would like better sound quality from their computers.

Duh.
http://bits.blogs.nytimes.com/2007/0...-up-my-stereo/





BBC iPlayer Beta Arrives; 10,000 People Complain to Gordon Brown
Nate Anderson

UK residents: the iPlayer beta is here. As it announced last month, the BBC launched a large-scale beta of its iPlayer catch-up software today. For such a compelling product, the iPlayer has certainly been dogged by its share of controversy; 12,000 people have already signed an e-petition to 10 Downing Street over the iPlayer's tie-in with Windows.

And it's not even tied to all versions of Windows. It only works, in fact, with Windows XP, leaving our own Peter Bright to punch the wall in impotent rage after making the switch to Vista some time ago. As for Linux and the Mac, both are right out—although the BBC says that a Mac-compatible version is coming this fall.

The BBC has been trying for months to mend fences over the public perception that it is endorsing Windows by meeting with open-source advocates and promising to rollout cross-platform versions of the software as soon as possible.

Those who do have XP can sign up for the beta and hope to receive an invite in the next several days. Invitations are limited, but the BBC will gradually expand the numbers over the next few months until the official launch later this year. Television shows can be downloaded freely up to seven days after they originally air, and can be stored for up to a month. Once a user begins to watch a program, he or she has seven days to finish watching. When the time period is up, DRM ensures that the programs go poof in order to protect future revenue streams for the shows' rights-holders.

Channel 4 already runs a similar service called 4oD (which also works only on XP) that allows users to catch-up on shows from the last seven days or pay to access older material from the archives.
http://arstechnica.com/news.ars/post...don-brown.html





China Breaks up $500 Million Piracy Ring

Chinese authorities and the FBI have shut down a syndicate thought to have counterfeited more than $2 billion worth of software
Jonathan Richards

Pirated software worth more than $500 million (£242 million) has been seized by authorities in China as part of a joint operation run by Chinese police and the FBI.

The syndicates targeted by the raids in the southern Chinese province of Guangdong are believed to have distributed more than $2 billion (£968 million) worth of counterfeit software to countries around the world, including the UK.

Chinese police arrested 25 people and shut down six manufacturing and retail facilities as part of the operation, which was described by officials in China as "an unprecedented co-operative effort" with the FBI.

More than 290,000 counterfeit software CDs were seized by the Chinese Public Security Bureau (PSB), including 47,000 which contained fake Microsoft products, such as the Windows Vista operating system and the Office suite.

Police were able to trace counterfeit software sold in 27 countries – including the US, Egypt, and Germany – to the syndicates using sophisticated forensic techniques, and by working with suppliers who had unwittingly bought fakes.

The investigation had been running for two years, with the arrests all coming in the past two weeks, authorities told a legal conference in Shenzen, southern China.

"The co-operation between the US and China is an important development, but we still have a long way to go," Steven Hendershot, the FBI's legal attache in Beijing, said.

Brad Smith, general counsel at Microsoft, said: "This case represents a milestone in the fight against software piracy, [with] governments, law enforcement agencies and private companies working together with customers and software resellers to break up a massive international counterfeiting ring."

China has long been targeted by American companies across a range of industries, including music, film and fashion, as a source of intellectual property violations.

As many as a third of UK businesses were unaware they were running counterfeit software in their organisation, Microsoft said.

Last year, piracy cost the software industry $40 billion worldwide, according to the Business Software Allliance.
http://technology.timesonline.co.uk/...cle2132310.ece





China Moves to Refurbish a Damaged Global Image
David Barboza

After years of being accused by Western nations of making only token gestures to fight fake goods and months of complaints about the safety of its exports, China is taking extraordinary steps to change its image.

Last week, Beijing unveiled new controls aimed at fighting counterfeit drugs and substandard exports. High-ranking officials and regulators vowed to strengthen China’s food safety system, tighten controls over chemical use by large seafood and meat producers, and create a system that holds producers more accountable for selling unsafe products.

The government also announced that it had broken up a series of criminal rings that operated huge manufacturing centers, producing goods as varied as pirated Microsoft software, fake Viagra and imitation Crest toothpaste.

Authorities here have also reached out to Ogilvy Public Relations, an international consultancy that advises on crisis management.

“This is a very concerted effort to show they are doing something,” said Russell Leigh Moses, a longtime political analyst based in Beijing. “They are using work groups, issuing directives and closing factories. They are rolling out the artillery.”

Spurred on by a sense of economic realpolitik, Beijing has grown particularly fearful that mounting international pressure could lead to sanctions or embargoes, and thereby hinder China’s booming economy.

Whether promising to overhaul China’s regulatory regime and stepping up enforcement will be enough to tame what some view as the Wild, Wild East of capitalism is unclear, analysts say, because some of the problems are so deeply rooted.

“There’s no quick fix,” says Henk Bekedam, the World Health Organization’s top representative in China. “China has perhaps been cutting some corners because the focus has been on growth. But they have 5,000 companies that produce medicine. That’s far too many.

“The government has a limited ability to enforce things,” he said. “They need to start with simple things: reduce the number of people you monitor.”

Still, even critics of China’s policies have been impressed with the catalog of recently announced changes.

The bold actions, experts say, are partly aimed at easing political pressure from the United States and the European Union, where regulators and politicians are pressing for assurances about the quality and safety of goods made here after a string of recalls involving goods like tainted pet food and toothpaste, defective tires and dangerous toys.

In Washington this month, President Bush created a panel of cabinet officials to make recommendations aimed at minimizing the dangers from imported foods or other products. The announcement coincided with Congressional hearings on food safety.

And in recent weeks, several Democrats in Congress have pressed for tougher measures against China, including trade sanctions and new money for American regulators to guard against unsafe goods entering the country, particularly from China.

Those issues will lead the agenda for the United States Treasury secretary, Henry M. Paulson Jr., as he arrives for talks with Chinese officials this weekend.

Europe is also concerned. Top European Union officials are planning to meet in Beijing next month to discuss food safety and other issues.

And on Wednesday, the head of the European Union’s consumer protection agency, Meglena Kuneva, pressed Chinese regulators to improve their standards during a tour of a government testing lab and a Chinese toy factory near the city of Nanjing.

Ms. Kuneva said that she was hopeful China would make progress, but she added that if its products continued to be a problem, the European Union would block market access.

“Toys like this can be in the hands of children, so do a good job,” Ms. Kuneva told a young inspector. “The good name of this country is in your hands.”

Many experts doubt whether China can follow through on its promises — some of which have been made before. And Chinese officials have not conceded that all the problems lie here. Regulators have repeatedly accused the international news media of exaggerating the number of problem Chinese goods.

Some Chinese businessmen say protectionists in the West are seizing on isolated cases to drum up support for trade sanctions, at a time when China is amassing a huge trade surplus.

China has also argued that the quality of the food it exports is no worse than the quality of American food entering China. After the United States Food and Drug Administration moved last month to block five types of Chinese seafood from entering the United States market, China responded by banning some imports of American frozen poultry and pork, insisting they were tainted by antibiotic residues.

Still, many experts say China has also become more candid about the challenges facing the country.

The government recently acknowledged that 20 percent of its consumer goods and 14 percent of the truck tires made here failed safety inspections.

And, most dramatically, just two weeks ago, China executed the former head of the State Food and Drug Administration, Zheng Xiaoyu, for accepting bribes and failing to police the marketplace. Days after he was executed, a top drug agency official admitted that the obstacles to repairing the regulatory systems were daunting.

The admissions were a surprising about-face for China, which has been slow to accept blame for shipping tainted products overseas.

But analysts say that as the evidence and bad news began to mount this year, China was forced to respond in a less adversarial way, particularly because the country’s booming economy is built on foreign investment and trade.

Recently, the government has even sought crisis management advice from Western consultants.

“They have not historically been advice takers,” said Scott Kronick, president of Ogilvy Public Relations Worldwide China, part of the WPP Group. “But they are reaching out in a genuine way to seek advice. I think they recognize everything doesn’t have to be rosy.”

Since then, officials from various regulatory agencies and ministries have held news conferences to announce new regulations or to brief the news media on successful crackdowns.

Last week, China’s quality inspectors promised to improve quarterly reports to the European Union about consumer product safety. And on Thursday, the government said it planned to offer large rewards to citizens who report on illegal practices in the food industry.

Many experts say the problem in China is not oversight but enforcement.

“The issue is not whether Chinese businesses are regulated; they are,” says Yasheng Huang, an associate professor at the Sloan School of Management at the Massachusetts Institute of Technology. “The issue is that the regulators themselves are unable to be impartial in the enforcement of the laws. Those laws are meaningless in a system that does not even pretend to have judicial independence, media freedom and legislative oversight.”

Some say regulators are susceptible to corruption and that local inspectors can easily be bought off or persuaded that cracking down on local companies hurts economic development and risks jobs.

That may explain why after years of promising to tackle piracy and counterfeiting, the practice continues to flourish in China, often in the open.

Last week, the United States’ Federal Bureau of Investigation and China’s Ministry of Public Security said they had broken up one of the biggest software piracy rings ever, arresting 25 people and closing six manufacturing facilities in China.

They also seized $500 million worth of pirated Microsoft and Symantec software. A day later, the government here said it had seized a ton of fake Viagra pills and closed counterfeit drug factories that produced Tamiflu, anti-malaria drugs and other products.

The seizures may be a sign of progress, but they are also an indication of how widespread the problem has been for China, experts say.

“The problem is these are campaigns and they tend to be turned off at some point,” says Mr. Moses, the analyst in Beijing.
http://www.nytimes.com/2007/07/29/wo...safety.html?hp





Open Library Goes Online with Public Domain Book Collection
Nate Anderson

After several years of scanning and archiving, the Internet Archive and the Open Content Alliance this week unveiled the Open Library, their attempt at bringing public domain books to the masses.

The Internet Archive has hosted texts for quite some time, but the Open Library makes fully-searchable, high-quality scans of books available, along with downloadable PDFs. It offers an experience designed to match paper: there's even a page-flipping animation as readers move forward and backward through the book.

Ben Vershbow of the Institute for the Future of the Book says that when it comes to presentation, "they already have Google beat, even with recent upgrades to the [Google Book Search] system including a plain text viewing option." Magnification isn't yet in place but is coming soon, apparently in time for the "official" launch later this year. The Open Library does have a neat trick up its sleeve: it allows the on-demand printing of any book through Lulu.com, allowing anyone in the world to order a printed copy of long out-of-print works.

The Open Content Alliance provided plenty of support for the project, drawing on the resources of companies like Yahoo, Adobe, MSN, and HP Labs. As Vershbow's comment above indicated, the new project looks like a direct competitor to many of the things that Google wants to do with Google Book Search, although the Open Library takes a different approach to handling copyrighted texts. Only public domain books will be scanned, and other publishers can opt-in to the system at some point; Google, by contrast, scans everything but only displays tiny snippets of information from copyrighted texts.

But the Open Library goes beyond Google Book Search in a couple of clever ways. For one, it will integrate with Librivox, a site that allows users to contribue home audio recordings of public domain books. Open Library users can already click the "Listen" button to hear Henry James' "An International Episode" in full and for free (and read surprisingly well).

The Internet Archive also partnered months ago with researchers at Carnegie Mellon to use their reCAPTCHA system to correct the results of optical character recognition. In essence, millions of users across the Internet are helping to make texts behind the Open Library more accurate even as they prove their own humanity to various blog comment systems.

The Open Library site is limited right now, allowing only for access to limited books and having no way to return to the main page (access to many other books is possible through the Internet Archive). Although the project is not nearly as developed as Google's, it's good to see some competition develop; Hopefully, the two projects will spur one another on to create a pair of truly compelling resources for readers.

Do we really need multiple projects like this, or would everyone be better off by pooling resources and building a single, massive database? The Internet Archive's Brewster Kahle recognizes that this question will arise, and he tackles it head-on in his vision statement for the Open Library. "Won't some of the big commercial digitization projects deliver this future?" he asks. "They are part of it, but if we go no further, we may have an expanded bookstore, or a single means of organizing the materials, but we may not be building on the open tradition of a library."
http://arstechnica.com/news.ars/post...-business.html





‘Farnsworth Invention’ Takes Shape
Campbell Robertson

Dates, cast and theater have been set for Aaron Sorkin’s new play, “The Farnsworth Invention,” about the legal battle over the invention of the television.

Hank Azaria will play David Sarnoff, the head of RCA, and Jimmi Simpson (“The Rainmaker”) will portray the inventor Philo T. Farnsworth. Des McAnuff will direct the production, opening on Broadway at the Music Box Theater on Nov. 14, with previews beginning on Oct. 15.
http://www.nytimes.com/2007/07/26/th...RTHIN_BRF.html





Dancing Toddler Video Yanked from Website Triggers Lawsuit

A mother is suing Universal Music Publishing Group for insisting a video of her toddler dancing to music by pop star Prince be yanked from YouTube on copyright violation grounds.

Electronic Frontier Foundation lawyers said they filed a lawsuit Tuesday asking a San Francisco federal court to protect the woman's fair use and free speech rights.

"Universal's takedown notice doesn't even pass the laugh test," said EFF attorney Corynne McSherry.

"Copyright holders should be held accountable when they undermine non-infringing, fair uses like this video."

The 29-second video shows Stephanie Lenz's young son wearing a red jumper and holding a toy stroller for balance as he bounces in place to Prince's song "Let's Go Crazy."

Lenz uploaded the home video to YouTube in February but was informed last month that it was deleted from the website after Universal complained use of the music violates the company's copyright.

"I was really surprised and angry when I learned my video was removed," said Lenz. "Universal should not be using legal threats to try to prevent people from sharing home videos of their kids with family and friends."

EFF lawyers contend Universal is abusing a Digital Millennium Copyright Act provision that calls on websites to remove copyrighted material at the behest of owners.

"Copyright abuse can shut down online artists, political analysts, or -- as in this case -- ordinary families who simply want to share snippets of their day-to-day lives," said EFF attorney Marcia Hofmann.

Lenz's "Let's Go Crazy #1" video has been re-posted on YouTube.

Universal did not return an AFP request for comment regarding the lawsuit.
http://www.physorg.com/news104564632.html





Google to Filter Copyright Videos by September
Greg Sandoval

YouTube will launch a system in September designed to prevent pirated material from going up on the site, a Google lawyer said in court on Friday.

Google, which acquired YouTube in October, plans to generate a library of digital video fingerprints that would be used by a computer system to screen clips being uploaded to YouTube, said Philip Beck, one of the attorneys representing Google and YouTube. Beck added that the screening process would take only a few minutes to determine whether a clip is copyright material.

Google, Viacom and the class of copyright holders that have filed suit against Google and YouTube within the past year, were in U.S. District Court for the Southern District of New York, for a scheduling hearing.

Beck's statement is significant because it would appear to be the first time that anyone from Google has set a firm launch date for a filtering-system roll out. The company has frustrated numerous media executives by promising to produce better copyright protections for YouTube but not delivering. Critics are quick to note that many of YouTube's competitors already screen content.

What may not go over well in Hollywood is that Google appeared to hedge once again when asked to respond to Beck's statement.

"We hope to have the testing completed and technology available by sometime in the Fall," said a Google spokesman in an e-mail. "But this is one of the most technologically complicated tasks that we have ever undertaken, and as always with cutting-edge technologies, it's difficult to forecast specific launch dates."

Louis Solomon, an attorney with Proskauer Rose, who along lawyers from the law firm Bernstein Litowitz, were appointed interim class counsel at the hearing. Solomon indicated that Google's filtering system would have little impact on the massive damages being claimed for past infringement.

In the class action suit filed in May by a group that included several European sports leagues, the plaintiffs have asked for billions of dollars in damages.

"If in fact Google puts this (system) in place, it is obviously way too late," Solomon said. "But we encourage Google to come forward and do what other companies have already done and treat all the content providers fairly. Not just the favorite few who have agreed to share advertising revenue with YouTube."

During the court proceeding, lawyers from both sides estimated that pre-trial discovery could take more than a year. That means there's a chance that YouTube's copyright issues may not be resolved until late next year.
http://news.com.com/8301-10784_3-9751232-7.html





eBay Can Continue Using ‘Buy It Now‘
2007/7

A federal judge Friday denied a request from a small Virginia company to stop the online auction powerhouse eBay Inc. from using a feature that allows shoppers to purchase items at a fixed price.

Last year, the U.S. Supreme Court ruled that although eBay infringed upon MercExchange‘s patent for the service, it was up to the lower court to decide whether eBay had to stop using it.

A federal jury found in 2003 that eBay had infringed on Great Falls-based MercExchange‘s patent and awarded the company $35 million. The amount later was reduced to $25 million.

"It was sort of good news, bad news for both sides," Stillman said. "I‘m sure eBay is relieved that they‘re not going to be enjoined, but on the other hand (Friedman) made it quite clear that they‘re going to have to pay for that right."

Friedman denied eBay‘s request to stay proceedings on the "Buy It Now" patent because the infringement suit already has been tried by a jury and a final verdict and damage award was affirmed by the federal circuit.

In the closely watched case, the high court ruled that judges have flexibility in deciding whether to issue court orders barring continued use of a technology after juries find a patent violation. The decision threw out a ruling by a federal appeals court that said injunctions should be automatic unless exceptional circumstances apply.
http://www.leadingthecharge.com/View...38466&source=2





The Net Gets Real on Copyrights

The Harry Potter ending is the latest example of how Web sites are more willing to take down copyrighted material and identify infringers
Catherine Holahan

Everyone knows it's hard to keep a secret when it comes to Harry Potter plotlines. So it's no wonder that copies of the highly anticipated last installment of the book series could be found floating around the Web before its July 21 release date. As is well known by most Potter fans, pictures of the ending were posted on sites such as News Corp.'s photo-sharing site Photobucket and Gaia Online, an Internet community site for teens, robbing incautious Web surfers of the surprise ending (see BusinessWeek.com, 7/18/07, "So, Does Harry Potter Live?").

What was a surprise, however, is how quickly many Web sites appeared to respond to requests to take down copyrighted material and hand over information regarding alleged copyright infringers. On July 16, Scholastic, which publishes the Harry Potter books in the U.S., filed a subpoena for information about the identity of a user who posted copies of the book on Gaiaonline.com. The company immediately supplied the information, took down the infringing material, and banned the user from the site for two weeks. "Gaia Online's terms of service prohibit the use of Gaia Online for any illegal purpose and requires all users to comply with its terms of service," the company said in a statement, explaining its swift compliance.

Court documents filed by Scholastic also say that copies of the book appeared to be on Photobucket. News Corp.'s Fox Interactive Media, which operates MySpace.com and Photobucket, declined comment, but the material is no longer on the site.

Changing IP Attitudes

Not long ago, such thorough compliance from sites that thrive on user-generated content might have been unthinkable. While many sites did immediately remove material in response to takedown notices, as is required by law, they did little to keep the same material from being uploaded moments later. Many sites have typically been adamant about ratting out users.

But attitudes toward copyright and intellectual property have changed. One reason is that the industry has matured. Sites that depend on users for content are no longer simply trying to prove their value by grabbing tons of Web traffic in any way possible. They are now trying to prove their mettle as legitimate businesses that can make money by working in concert with content providers and playing ball with marketers that are understandably wary of paying for ad space on sites they fear might get sued or, worse, shut down. "There are a lot of U.S.-based venture-backed businesses that are trying to be compliant," says Eric Garland, chief executive officer of BigChampagne, a technology and market research company that tracks illegal downloading of copyrighted material.

In some cases, the new emphasis on intellectual property has come as the sites have been purchased, or evaluated for acquisition, by large public companies such as News Corp. and Google, which respectively acquired social networking site MySpace and video-sharing site YouTube. Large companies, in general, have more to lose from a lawsuit and more respect to squander should the public perceive them as disrespectful of intellectual property (see BusinessWeek.com, 10/10/06, "YouTube's New Deep Pockets,"). "Sites that spring to mind like MySpace and YouTube are doing what they can to quickly remove infringing content from their sites," says Garland.

Large Players Helping to Stem Abuses

Make no mistake: Copyrighted material is still ending up on user-generated sites, even those owned by big companies. In March, Viacom (VIA) sued Google for the frequent appearance of its material on YouTube, despite multiple takedown requests (see BusinessWeek.com, 3/14/07, "Viacom's Suit Won't Snuff Out YouTube,").

Yet by and large, companies are doing far more to stem abuse, and allowing nowhere near the level of infringement in years past, piracy experts say. Google has worked with content identification companies such as Audible Magic to better keep copyrighted material from its site. "We are beginning tests on an automated system to identify and match specific videos," YouTube co-founder Steve Chen wrote in a June blog post. "We are working with some of the major media companies to test what we have developed."

In response to a January subpoena, Google and community site LiveDigital cooperated with News Corp.'s Fox network concerning the illegal leak of unaired episodes of the hit television show 24, as well as several episodes of The Simpsons (see BusinessWeek.com, 1/26/07, "Google and YouTube: A Catch-22,"). The information they gave on the alleged source of the leak led to a criminal complaint against a Chicago man by the Federal Bureau of Investigation. If convicted, the man could serve up to three years in jail.

Foreign Players Not as Respectful

The Justice Dept. has won more than 100 felony convictions for copyright infringement in the U.S. in the past five years, thanks in part to large-scale FBI operations and the increased cooperation of Web sites that turn over information on users who post illegal material. Last month, for example, it won a conviction against a Los Angeles man who uploaded the movie Walk the Line on the Internet before it was available for home viewing.

Despite evidence that content creators' hard-fought efforts to get U.S. businesses to respect intellectual property are working, copyright violations are still rampant on the Web. The reason, says Garland, is that there are still many non-U.S. businesses that don't have the same respect for intellectual property and many more technologies that allow people to share files but are not part of any business entity that can be held accountable. In fact, the amount of pirated material on the Web is growing, says Garland. For example, from June, 2006, to June, 2007, the number of users at any given moment on just one prominent peer-to-peer network that primarily handles illegally uploaded content grew 186%, to 1,246,705.

So what are content creators to do when there's no large company to sue? Garland says high-profile suits are a deterrent if done correctly, but they're unlikely to stem the problem. Another suggested tactic is to demand the Internet service providers to watch what their users do and terminate accounts that upload pirated material. However, such a move is unlikely, given that ISPs are reluctant to take steps that would be seen as an intrusion on their customers' privacy.

Once content is in the public domain, Garland says there is little that content creators can do to keep it from being uploaded to the Web. Their best hope may be to try to track it and make money from it by appending advertising. However, companies can do something about leaks such as the one that led to rampant online spoilers of the Harry Potter ending: Keep copies to a minimum and only give them to trusted executives with locked briefcases. Adds Garland: "Protect it the old fashioned way."
http://www.businessweek.com/technolo...eek+exclusives





Harry Potter Breaks Sales Records
AP

LONDON -- Harry Potter has cast a spell on British book buyers, who purchased more than 2.6 million copies of the boy wizard's final adventure in 24 hours, an industry data service said Monday.

Nielsen BookScan said 2,652,656 copies of "Harry Potter and the Deathly Hallows" were sold in Britain in the 24 hours after it went on sale in England at midnight London time (7:01 p.m. EDT Friday).

The company said the figure was provisional; full and final figures were due to be released Tuesday.

The figure breaks the previous record of just over 2 million copies held by the previous Potter volume, "Harry Potter and the Half-Blood Prince." It includes sales from bookstores, supermarkets other retailers and Internet sites, but excludes sales to libraries, schools and institutions.

"Deathly Hallows," the seventh and final volume of J.K. Rowling's all-conquering fantasy series, sold 8.3 million copies in its first 24 hours on sale in the United States, according to publisher Scholastic Inc.

The book was released around the world Saturday in a carefully orchestrated operation that saw midnight bookstore openings and long lines of Potter-maniacs. Its initial print run was 12 million in the United States alone.

The series has sold more than 325 million worldwide.
http://www.courant.com/sns-ap-harry-...,5667022.story





Potter’s Popularity Holds Up in First-Day Sales
Motoko Rich

In its first 24 hours on sale, “Harry Potter and the Deathly Hallows,” the seventh and final installment in the wildly popular series by J. K. Rowling that officially went on sale at 12:01 a.m. Saturday, sold 8.3 million copies in the United States, according to Scholastic Inc., the publisher.

That exceeded the 6.9 million copies that “Harry Potter and the Half-Blood Prince,” the sixth in the series, sold in its first 24 hours on sale two years ago.

The figures seemed to show that numerous leaks before the official release, including photos of every page of the book that circulated on Internet file-sharing services last week, had failed to dent the enormous pent-up demand for the book.

On Friday night, booksellers and fans threw parties to herald the book’s release, and at many outlets in New York and elsewhere, lines stretched around the block with shoppers waiting to be among the first to buy the book shortly after midnight.

“The excitement, anticipation, and just plain hysteria that came over the entire country this weekend was a bit like the Beatles’ first visit to the U.S.,” Lisa Holton, president of Scholastic’s trade and book fairs division, said in a statement.

The Arthur A. Levine imprint at Scholastic printed 12 million copies of “Deathly Hallows.” That brings the number of “Harry Potter” books in print in the United States to 133.5 million.

Before the publication of “Deathly Hallows,” the six other books in the series had sold about 325 million copies worldwide. The series is published by Bloomsbury in Britain.

Many of the books were sold at a substantial discount. Barnes & Noble, for example, was selling “Deathly Hallows” at 40 percent off the $34.99 cover price, or $20.99. Amazon.com was selling it for $17.99. The estimate of first-day sales indicates that at an average selling price of about $20, Americans spent $166 million for the book in one day. Many booksellers will make only slim profits on the book’s sales.

Separately, the Borders Group announced that it had sold about 1.2 million copies of the book globally in its more than 1,200 Borders and Waldenbooks stores on Saturday. Most of those stores held midnight parties, and Borders estimated that about 800,000 people attended them worldwide. The sales figure exceeded the 850,000 copies of “Half-Blood Prince” that Borders sold on the first day of its sales two years ago.
http://www.nytimes.com/2007/07/23/books/23potter.html





HPDH the Fastest-Selling Book of All Time
Matt

Bloomsbury, the UK publisher of the Harry Potter books, sold 2.7 million copies of Harry Potter and the Deathly Hallows in the first 24 hours that the book was on sale. Coupled with Scholastic's 8.3 million, that's 11 million copies of HPDH sold in just one day, making it the fastest-selling book of all time (Harry Potter and the Half-Blood Prince sold 9 million).
http://www.harrypotterfanzone.com/fu...ws.php?id=2037





Post-Potter Scholastic May Face Shareholder Exodus
Gillian Wee and Katie Hoffmann

After the final adventures of Harry, Hermione and Ron, Scholastic Corp. may face an exodus of shareholders if the company doesn't consider selling itself.

Investors including Mark Boyar of Boyar Asset Management Inc. say the New York-based publisher should be sold because Chief Executive Officer Richard Robinson, who has run Scholastic since 1975, hasn't used the windfall from ``Harry Potter,'' the biggest hit in books in the past decade, to build successful new businesses. Robinson said today he has no intention of selling.

As the seventh title in J.K. Rowling's series about the boy wizard makes its debut tomorrow, shares of Scholastic, the book's U.S. publisher, are trading at 0.66 times annual sales, compared with 1.04 times sales for rival U.S. book publishers. The shares would be worth more than $50 each, or 48 percent above their current price, if the company were to sell itself, Boyar and Stifel Nicolaus & Co. analyst Drew Crum said.

``This is a very, very valuable business, and it would be worth a lot more to a potential buyer,'' said Boyar, president of his New York-based firm, which owned 200,000 Scholastic shares as of March.

Scholastic shares have returned an average of 7.5 percent a year over the past 10 years through June 30, versus 13 percent for the S&P MidCap Index. They fell 41 cents to $33.80 at 4 p.m. New York time in Nasdaq Stock Market trading.

`Too Much Fun'

Robinson, whose father Maurice founded the company in 1920, ``is not a seller,'' Chief Financial Officer Maureen O'Connell said in an interview. Through its ownership of Class A shares, the Robinson family controls four-fifths of Scholastic's board.

``I don't think Dick's going anywhere,'' O'Connell said. ``He's having too much fun right now.''

Scholastic's latest stumble is in its direct-mail business, where subscriber delinquencies are rising. Yesterday, the company reported fourth-quarter profit of $40.4 million, or 93 cents a share, missing analysts' average estimate.

Robinson, 70, said yesterday he has a plan to cut the direct-mail unit's losses by about $20 million this fiscal year or exit the business.

``We have no intention of selling the company, and we don't believe our investors need us to sell the company to realize value,'' Robinson said today in an interview.

Scholastic had already cut its profit forecast in March. A year ago, the company said it would cut expenses by $40 million annually, including reducing promotional costs at its school book-club order program, where revenue growth had slowed.

``This company has a portfolio of assets that when they fix one, it seems like another one falls apart,'' said Cleveland- based Crum, who lowered his rating on Scholastic shares to ``hold'' from ``buy'' on July 16 and doesn't own any.

Higher Value

Scholastic's steady cash streams and opportunities to improve profit margins make the company attractive to private equity firms, Crum said.

Publishers typically sell for 1 to 1 1/2 times revenue, Crum said. ``Clearly, the private equity value of Scholastic is much greater than the public value.''

Crum declined to speculate on potential buyers. He said he doesn't think Robinson is willing to sell.

Scholastic wouldn't fit in as part of another publishing company because it is ``a real hybrid,'' said Jim Milliot, business and news director at Publishers Weekly in New York. ``They do a lot of publishing but they're also a really big distributing company.''

``Harry Potter,'' the biggest children's book series ever, has sold more than 325 million copies worldwide since 1997. It holds three slots among the 10 best-selling books in the U.S. since 2001, the year the first movie was released, according to Nielsen Co.

Family Run

Scholastic bought the U.S. rights from London-based Bloomsbury Publishing Plc in 1997. Both companies, among the few publicly held book publishers that remain independent, are family run. Each is faulted by investors for failing to use the revenue from Harry Potter books to develop new franchises.

The series, which has been translated into 63 languages, follows the life of student Harry Potter, a British boy and wizard, who attends the Hogwarts School of Witchcraft and Wizardry. He and his friends, Ron Weasley and Hermione Granger, use their magical powers to fight enemy Lord Voldemort, also known as ``He-Who-Must-Not-Be-Named,'' who killed Harry's parents.

The series brought in $800 million in revenue for Scholastic from the first title's U.S. publication in September 1998 through the fiscal year that ended this May, Crum said. That amounts to 4.7 percent of sales over nine fiscal years.

Crum predicts Scholastic will reap another $225 million this fiscal year, or 9.4 percent of $2.4 billion in sales, and 62 cents a share out of $2.79 in profit.

Sales Growth

``Most people think they can be more profitable,'' Milliot said. ``The CEO needs to get the different operations operating well at the same time.''

Sales at Scholastic rose from $1.06 billion in fiscal 1998 to $2.18 billion in fiscal 2007, an average of 8.4 percent a year, according to Bloomberg data. Without the $800 million Crum says the series contributed, sales would have grown 8.2 percent annually.

Scholastic plans to print a record 12 million copies of the final entry in the series, ``Harry Potter and the Deathly Hallows.''

While sales will decrease over time, Scholastic will still get about $10 million to $15 million annually from ``Harry Potter'' for the next three years, driven by special editions, the publicity of two more movies and paperback copies, Crum said.

Bloomsbury Expansion

Children's publishing provided 53 percent of Scholastic's sales last year. Robinson has expanded elsewhere, with programs that help children read and book fairs. A $200 million share buyback plan, aimed at repurchasing about 14 percent of the stock, boosted the price in June.

Publishing companies typically have lulls following hits, said Kara Cheseby, a Baltimore-based analyst with T. Rowe Price Associates Inc., Scholastic's largest shareholder with 3.84 million shares as of March.

``At times you have big hits and they supplement your business,'' Cheseby said. ``Harry Potter is just one part of the business.''

Finding another hit won't be easy. Scholastic's U.K. counterpart, Bloomsbury, saw 29 percent of its stock value vanish in December after a gamble on celebrity biographies and cookbooks for the Christmas season failed to pay off. The shares have dropped an additional 27 percent year-to-date.

``The future for the company without Harry Potter is looking dark,'' said Henk Potts, an equity strategist at Barclays Wealth in London who helps manage $185 billion. ``Bloomsbury looks set to return to being a small and rather boring publishing company.''

Scholastic faces similar challenges.

``What they should really be doing is putting the company up for sale,'' Boyar said.
http://www.bloomberg.com/apps/news?p...bKs&refer=news





The Once and Future Prince
Jon Pareles

I’VE got lots of money!” Prince exults in “The One U Wanna C,” a come-on from his new album, “Planet Earth” (Columbia). There’s no reason to disbelieve him. With a sponsorship deal here and an exclusive show there, worldwide television appearances and music given away, Prince has remade himself as a 21st-century pop star. As recording companies bemoan a crumbling market, Prince is demonstrating that charisma and the willingness to go out and perform are still bankable. He doesn’t have to go multiplatinum — he’s multiplatform.

Although Prince declined to be interviewed about “Planet Earth,” he has been highly visible lately. His career is heading into its third decade, and he could have long since become a nostalgia act. Instead he figured out early how to do what he wants in a 21st-century music business, and clearly what he wants is to make more music. Despite his flamboyant wardrobe and his fixation on the color purple, his career choices have been savvy ones, especially for someone so compulsively prolific.

Like most pop stars, he goes on major tours to coincide with album releases, which for Prince are frequent. But he also gets out and performs whenever he chooses. Last year he took over a club in Las Vegas and renamed it 3121, after his 2006 album “3121,” which briefly hit No. 1 and spawned multiple conflicting theories about the significance of the number. He started playing there twice a week for 900 people at $125 a ticket. In February he had an audience in the millions as the halftime entertainment for the Super Bowl. He has gone on to play well-publicized shows at the Roosevelt Hotel in Hollywood for a few hundred people paying $3,121 per couple, and another elite show last weekend in East Hampton for about $3,000 per person.

Meanwhile Verizon put Prince in commercials that use “Guitar,” another song from “Planet Earth,” as bait for its V Cast Song ID service, making the song a free download to certain cellphones. On July 7 Prince introduced a perfume, 3121, by performing at Macy’s in Minneapolis.

In Britain he infuriated retailers by agreeing to have a newspaper, The Mail on Sunday, include the complete “Planet Earth” CD in copies on July 15. (The album is due for American release this Tuesday.) Presumably The Mail paid him something in the range of what he could have earned, much more slowly, through album sales. British fans have remunerated him in other ways. On Aug. 1 he starts a string of no fewer than 21 sold-out arena concerts, 20,000 seats each, at the O2 (formerly the Millennium Dome) in London at the relatively low ticket price of £31.21, about $64. The O2 ticket price also includes a copy of the album; Prince did the same thing with his tour for “Musicology” in 2004. Those “Musicology” albums were counted toward the pop charts, which then changed their rules; the “Planet Earth” albums will not be. But fans will have the record.

Prince’s priorities are obvious. The main one is getting his music to an audience, whether it’s purchased or not. “Prince’s only aim is to get music direct to those that want to hear it,” his spokesman said when announcing that The Mail would include the CD. (After the newspaper giveaway was announced, Columbia Records’ corporate parent, Sony Music, chose not to release “Planet Earth” for retail sale in Britain.) Other musicians may think that their best chance at a livelihood is locking away their music — impossible as that is in the digital era — and demanding that fans buy everything they want to hear. But Prince is confident that his listeners will support him, if not through CD sales then at shows or through other deals.

This is how most pop stars operate now: as brand-name corporations taking in revenue streams from publishing, touring, merchandising, advertising, ringtones, fashion, satellite radio gigs or whatever else their advisers can come up with. Rare indeed are holdouts like Bruce Springsteen who simply perform and record. The usual rationale is that hearing a U2 song in an iPod commercial or seeing Shakira’s face on a cellphone billboard will get listeners interested in the albums that these artists release every few years after much painstaking effort.

But Prince is different. His way of working has nothing to do with scarcity. In the studio — he has his own recording complex, Paisley Park near Minneapolis — he is a torrent of new songs, while older, unreleased ones fill the archive he calls the Vault. Prince apparently has to hold himself back to release only one album a year. He’s equally indefatigable in concert. On the road he regularly follows full-tilt shows — singing, playing, dancing, sweating — with jam sessions that stretch into the night. It doesn’t hurt that at 49 he can still act like a sex symbol and that his stage shows are unpredictable.

Through it all he still aims for hit singles. Although he has delved into all sorts of music, his favorite form is clearly the four-minute pop tune full of hooks. But his career choices don’t revolve around squeezing the maximum return out of a few precious songs. They’re about letting the music flow.

Prince gravitated early to the Internet. Even in the days of dial-up he sought to make his music available online, first as a way of ordering albums and then through digital distribution. (He was also ahead of his time with another form of communication: text messaging abbreviations, having long ago traded “you” for “U.”) Where the Internet truism is that information wants to be free, Prince’s corollary is that music wants to be heard.

How much he makes from his various efforts is a closely guarded secret. But he’s not dependent on royalties trickling in from retail album sales after being filtered through major-label accounting procedures. Instead someone — a sponsor, a newspaper, a promoter — pays him upfront, making disc sales less important. Which is not to say that he’s doing badly on that front: “3121” sold about 520,000 copies, according to Nielsen SoundScan, and “Musicology,” with its concert giveaways, was certified multiplatinum.

Prince ended a two-decade contract with Warner Brothers Records in 1996 after a very public falling out with the label. During the mid-1990s he appeared with the word “Slave” painted on his face and said the label was holding back material he wanted to release. For a while he dropped the name Prince — which was under contract to Warner Brothers and Warner/Chappell Music — for an unpronounceable glyph; when the contracts ran out, he was Prince again. And since leaving Warner Brothers he has been independent. He owns his recordings himself, beginning with a three-CD set called “Emancipation” from 1996. He has released albums on his own NPG label and Web site or has licensed them, one by one, for distribution by major labels, presumably letting them compete for each title. Over the past decade he has had albums released through EMI, Arista, Universal and Sony.

The idea behind long-term recording contracts is that a label will invest in building a career. But Prince (in part because of Warner Brothers’ promotion) has been a full-fledged star since the ’80s. So now a label’s main job for him is to get the CDs into stores.

Prince also experimented with having fans subscribe directly to receive his music online, which turned out to be a better idea in theory than in execution. After five years he quietly shut down his NPG Music Club in 2006. Still, his Web site (which is now 3121.com) usually has a rare recording or two for streaming or downloading. Why not? There’s plenty more.

“Planet Earth” is a good but not great Prince album. Unlike “3121,” which built many of its tracks around zinging, programmed electronic sounds, “Planet Earth” sounds largely handmade, even retro. “In this digital age you could just page me,” Prince sings in “Somewhere Here on Earth,” a slow-motion falsetto ballad. “I know it’s the rage but it just don’t engage me like a face-to-face.”

Prince, as usual, is a one-man studio band — drums, keyboards, guitars, vocals — joined here and there by a horn section or a cooing female voice. This time he leans toward rock rather than funk. Serious songs begin and end the album. It starts with “Planet Earth,” an earnest environmental piano anthem with an orchestral buildup, and winds up with the devout “Lion of Judah” and with “Resolution,” an antiwar song. In between, Prince flirts a lot, playing hard-to-get as he rocks through “Guitar” (“I love you baby, but not like I love my guitar”) and promising sensual delights in the upbeat “One U Wanna C” and the slow-grinding “Mr. Goodnight.” There’s also a catchy, nutty song about a model, “Chelsea Rodgers,” who’s both hard-partying and erudite; Prince sings that she knows about how “Rome was chillin’ in Carthage in 33 B.C.E.”

Although Columbia probably thinks otherwise, how the album fares commercially is almost incidental. With or without the CD business, Prince gets to keep making music: in arenas, in clubs, in the studio. Fans buy concert tickets, companies rent his panache, pleasure is shared. It’s a party that can go on a long time.
http://www.nytimes.com/2007/07/22/ar....html?ref=arts





Oops! ...They Did It Again
Jeff Leeds

Barry Weiss, the president of the Zomba Label Group, had been chatting with a guest at his label’s recent party at the Ritual club here when he abruptly cut off conversation and strode toward the dance floor.

“That’s Right,” a song by one of the label’s artists, Ciara, had just begun to play at ear-splitting volume, and Mr. Weiss decided to conduct some impromptu market research.

Reaching for his glasses, he watched the partygoers dance as he stood off to one side of the darkened dance floor. “You can still get a feel” for how people will respond in clubs like this, Mr. Weiss said.

After more than 25 years in the music business, he has come to trust his instincts more than ever. It fell to Mr. Weiss to guide Zomba after the company’s creative mastermind, Clive Calder, sold it to Bertelsmann five years ago for $2.7 billion, cashing out just as the label’s slate of teen pop stars like ’N Sync waned.

Now, amid financial setbacks in the music industry, Zomba is on a hot streak again, with hits from performers like Justin Timberlake, R. Kelly and T-Pain, a rapper-turned-singer whose new CD surpassed Paul McCartney’s last month to enter the Billboard chart at No. 1.

It is quite a turnabout for Mr. Weiss, who was one of a handful of longtime Zomba executives to stay on at the company after 2002, even as critics crowed that the label would never again match its earlier success.

“We knew what people were thinking,” he said in a rare interview recently. “We weren’t like, ‘Oh, my God! What’s going to happen here?’ We were too busy trying to stay afloat and stick to our knitting.”

Since the sale, Zomba, which includes Jive Records and the gospel label Verity, has managed to defy the industry’s troubles by discovering new artists, like the R&B singer Chris Brown and the rockers Three Days Grace, while keeping costs down — a tough task in a field given to financial excess.

Johnny Wright, a talent manager overseeing acts including Mr. Timberlake and the Backstreet Boys, remarked, “They overanalyze every penny that’s spent to make sure it’s not just frivolous money being thrown away.”

He added: “As a manager of an artist, you want a $2 million video budget. Do you really need one? At the time that you’re involved in it, you’re feeling a little frustrated,” but “at the end of the day you’ve made a decent video, and you have an artist that’s actually getting a royalty check.”

There is little argument that the label’s sales and market share have slid sharply from their pinnacle during the teen pop sales surge; the industry itself has buckled under the weight of widespread piracy and other woes.

But if any of the corporate-owned labels can be described as succeeding these days, Mr. Weiss’s is one of the few. Zomba has increased its share of new-release sales almost 20 percent so far this year, even as sales of new albums industrywide have dropped 16.5 percent, according to Nielsen SoundScan data. It has remained consistently profitable, having generated more than $40 million in profit last year on well over $200 million in revenue, according to executives briefed on the label’s business.

Being part of a sprawling media empire has had certain advantages; a Bertelsmann reorganization three years ago shifted established stars like Usher and then-unknown artists like Ciara to Zomba’s roster. But side businesses, including a studio-equipment rental service, that once bolstered Zomba’s success have been sold.

What remains at the center is Mr. Weiss, 48, who exudes a feverish energy even when sitting. Since his appointment in 2002, he has taken pains to preserve the internal culture of the label; that has meant, in part, a preference for developing artists in-house rather than through ventures with outside talent finders.

Zomba has kept its home in a bare-bones office building in the Chelsea section of Manhattan, apart from the big suites of higher-volume labels in Midtown. It may face new challenges when it relocates to the Madison Avenue headquarters of its corporate parent these days, Sony BMG Music Entertainment, a move expected later this year.

“There’s very little ego,” said Max Martin, a Swedish producer behind hits for Ms. Spears and others. “When you meet a lot of other presidents,” he said, declining to specify anyone, “you see lots of big offices, you see a lot of ‘I’m the president of the record company.’ That’s the one thing I that I love about Barry and Jive in general, there’s very little of that thing. It’s a very tight group of people.”

The chairman of a competing record label, who spoke on condition of anonymity, said that Zomba’s reputation for frugality was sometimes overstated. Zomba may pour cash into important production and marketing expenses, though “they’re not going to send you a limousine just because you’re going to get an ASCAP award,” this executive said, referring to the American Society for Composers, Authors and Publishers, the industry professional group.

Mr. Weiss makes no apologies, and suggests that some rival labels have chosen to whack away at their overhead costs — resulting in hundreds of layoffs — rather than take on the potentially more difficult pruning of day-to-day production and marketing expenses.

“On the one hand,” he said, “they’re laying off all these people from these companies to the point where you’re cutting into the bone. But nobody’s focusing on the fact that that album that should’ve cost $800,000 cost $2 million. Or the video that the egotistical president of the company decided to scrap, for $400,000, because they didn’t like the color of the pants that the artist was wearing. Those things still kind of go on in the business.”

Mr. Weiss’s education in music had begun decades before — at the side of his father, Hy, a music entrepreneur who in the 1950’s built his own label, Old Town Records, which specialized in doo-wop, R&B and pop, recording hits by acts like the Solitaires.

In addition to working with his father, Mr. Weiss promoted songs to radio stations in upstate New York while attending Cornell. In 1982, Mr. Calder, a South African expatriate, hired him as one of the upstart label’s first employees in the United States, where he struck upon early success pushing acts including A Flock of Seagulls and Billy Ocean.

Mr. Weiss stoked Mr. Calder’s early interest in rap music at a time when major music labels largely dismissed the genre, and oversaw the signing of the rap act Whodini, one of a series of hit makers that also included KRS-One and Too Short.

By the time Mr. Weiss worked his way up to become Mr. Calder’s right-hand man, Zomba had expanded to become the biggest independent record label in the world, turning Ms. Spears, a former Mouseketeer, and The Backstreet Boys into superstars.

In 2002, Mr. Calder cashed in, exercising a contract option that required Bertelsmann to buy out his share of Zomba at a premium based on the success of the teen pop acts and other big discoveries. Then he all but vanished from the music landscape.

So, too, has the old way of doing business. In the jubilant days of 2000, ’N Sync shattered a record by selling 2.4 million copies of its “No Strings Attached” album in a single week — more than the combined sum of the top 50 titles on the current edition of Billboard’s weekly sales chart.

Now, labels are scrambling to offset plunging CD sales by cobbling profits from bite-size products like ring tones and digital downloads. Indeed, more than 40 percent of Zomba’s revenue from new releases through the first half of this year came from digital sales.

Mr. Weiss said that has made it all the more important for labels to sign artists with commercial potential; Jive has had a particular ear for street-savvy R&B that can attract mainstream pop fans.

“The margin for error has been greatly reduced,” he said, “and the winners don’t pay for the losers the way they used to.”

With the right songs, he added, the label can generate a profit even without a gold album. When the rap newcomer Huey released his first album last month, for example, it sold fewer than 29,000 copies the first week. But Huey’s hit single, “Pop, Lock & Drop It,” had already turned into a radio hit, fueling sales of more than two million downloads and ring tones, the latter typically costing as much as $2.50 each. By keeping costs low, the label was already in the black when the album reached shops, Zomba executives said.

Mr. Weiss’s talents as a manager were on display one recent night at the House of Blues in West Hollywood, where a group of Jive executives and he had gathered to watch a set by T-Pain. Stars from competing labels, Akon and Busta Rhymes, unexpectedly clambered onstage to join T-Pain, sending the already giddy crowd into bliss.

Upstairs, Mr. Weiss danced with colleagues and made no attempt to conceal his delight at the scene of screaming fans. “And the good news?” he said. “It didn’t cost us anything.”
http://www.nytimes.com/2007/07/23/bu...a/23music.html





Clear Channel Revises Airplay Agreement
FMQB

Earlier this week, the Future of Music Coalition filed a formal complaint with the FCC, accusing Clear Channel Radio of forcing musicians to give up their digital copyrights in order to get the airplay that is required under the payola consent decree. Now Clear Channel has altered the wording in its legal agreements, making sure that artists will not have to give up those rights.

The re-worded agreement (which can be found on CC stations' Web sites) now says, "In the instance when Clear Channel makes the decision to use the content for terrestrial broadcasting and, as a result, for simultaneous transmission through online streaming ... Clear Channel shall be subject to and pay for all applicable current and future statutory royalties as well as public performance royalties."

Last week, Senator Russ Feingold (D-WI) sent an open letter to the heads of CBS Radio, Citadel, Clear Channel and Entercom, questioning their commitment to ending payola in radio. The letter was prompted by the FMC's accusations against CC.
http://fmqb.com/Article.asp?id=443179





Cumulus Media Being Sold for $508M
AP

Radio station owner Cumulus Media Inc. has agreed to a $507.7 million cash buyout offer from a group of investors that includes the company's chief executive.

The investor group is being led by Chief Executive Lewis Dickey, who will remain in that role once the deal closes, and an affiliate of Merrill Lynch Global Private Equity.

Under the deal announced Monday, the buyers would pay $11.75 a share, a 40 percent premium over Friday's closing price, for each of the roughly 43.2 million shares of Cumulus stock outstanding.

The buyers would also assume debt that would boost the total value of the transaction to $1.3 billion, the Atlanta-based company said in a statement.

The news sent Cumulus shares soaring $2.75, or 32.9 percent, to close at $11.12 after briefly rising to a new 52-week high of $11.74. The stock previously traded between $8.36 and $11.68 over the past year.

Cumulus said the transaction will be financed through a combination of equity contributed by Dickey, his brother and fellow executive, other members of their family and Merrill Lynch Global Private Equity, and debt financing that has been committed by Merrill Lynch Capital Corp.

The Dickeys and stockholders affiliated with Banc of America Capital Investors have agreed to vote their shares of Cumulus stock in favor of the deal or any superior proposal approved by the Cumulus board.

After completing pending acquisitions and divestitures, Cumulus will own or operate 344 radio stations in 67 U.S. markets either directly and through its investment in Cumulus Media Partners. Cumulus had $334 million in revenues last year.

The deal is subject to shareholder and regulatory approval, and the company can solicit higher bids for 45 days.
http://origin.mercurynews.com/breakingnews/ci_6444335





Phone Mast Allergy 'in the Mind'
BBC

Mobile phone masts are not responsible for the symptoms of ill health some blame them for, a major UK study says.

Dozens of people who believed the masts triggered symptoms such as anxiety, nausea and tiredness could not detect if signals were on or off in trials.

However, the Environmental Health Perspectives study stressed people were nonetheless suffering "real symptoms".

Campaign group Mast Sanity said the results were skewed as 12 people in the trials dropped out because of illness.

In the trial, many of those who blame masts for their symptoms reported greater distress when they thought the signal was on, suggesting the problem has a psychological basis.

"Belief is a very powerful thing," said Professor Elaine Fox, of the University of Essex, who led the three-year study.

"If you really believe something is going to do you some harm, it will."

The study was funded by the Mobile Telecommunications and Health Research programme, a body which is itself funded by industry and government.

Modern appliances

It is unclear how many people in the UK suffer from "electro-sensitivity", an allergy they believe can be triggered by a range of modern day appliances from hair driers to mobile phone masts.

In 2005, the Health Protection Agency (HPA) said there was no scientific evidence to link their ill health with electrical equipment, while acknowledging sufferers could have real and unpleasant symptoms.

But the HPA research did not consider the effects of waves from phone masts, as most of the studies looking at electrical sensitivity were carried out before they were widely introduced.

A number of studies subsequently have looked at the mobile effect, but the Essex experiments are some of the largest and most detailed to date.

After 12 of the sufferers dropped out of the trial, researchers tested a total of 44 people with a history of symptoms against a control group of 114 people who had never reported ill effects from masts.

When the signal was being emitted, and they were told of this, sensitive individuals reported lower levels of well-being.

This was true for exposure to both forms of mobile systems - GSM and UMTS (3G).

However, when tests were carried out in which neither the experimenter or participant knew if the mast was on or off, the number of symptoms reported was not related to whether a signal was being emitted or not.

Chance finding

Two of the 44 sensitive individuals correctly judged if it was on or off in all six tests, as did five out of 114 control participants.

"This proportion is what is expected by chance," the researchers said.

The symptoms were real. As well as reporting feeling unwell, sensitive individuals had sweatier skin and higher blood pressure - both measures of a physiological response.

But this was regardless of whether the signal was on or off.

"Hence the range of symptoms and physiological response does not appear to be related to the presence of either GSM or 3G signals," the study concluded.

Other experts endorsed the study's findings.

Dr James Rubin, of the Mobile Phone Research Unit, King's College London, said the findings were in line with those from most other previous experiments.

"This should be reassuring news for anyone who is concerned about the possible short-term health effects of masts," he said.

But Mast Sanity declared "history has shown that many now commonly accepted physical conditions were initially dismissed as psychological".

"Isn't it time that the government woke up to the reality of electrosensitivity instead of attempting to persuade sufferers that it is all in their minds?" said spokeswoman Yasmin Skelt.

But another campaign group, Powerwatch, commended the research as "one of the best designed and executed studies to date" while stressing that the number of dropouts was unfortunate.

"So whilst it cannot be entirely ruled out that a small minority are truly sensitive, the proportions of any truly sensitive people are likely to be far lower than the 3-35% that has been quoted."
http://news.bbc.co.uk/go/pr/fr/-/2/h...th/6914492.stm





Sand, Sun and RFID?: The High-Tech, Networked Beach is Coming Soon
Layer 8

Ocean City, New Jersey is a nice, family-oriented beach that will apparently soon be the high-tech model for seashore lovers and now perhaps geeks everywhere. The city has on its plate a $3 million variety of public services on tap featuring Internet access and radio-frequency identification chips (RFID) and Wi-Fi wireless technology. A wireless network will let Ocean City expand economic development and control the cost of local services. Wireless allows the City to save on cell phone usage, T-1 lines, and it adds efficiency. By maximizing connectivity, there are a variety of ways to enhance education, library services, and emergency management services, city executives say on their Website.

The provider of the Ocean City wireless network has not been determined yet and the City meets this week to possibly select a service provider but it is on track to have wireless coverage by early 2008, according to the City’s Website. The wireless net would be free to resident and $6 a day for tourists. But that’s not all. The city is looking to replace its ubiquitous but mostly annoying beach tags – which indicate you paid to get on the beach $5 per day, $10 for a week, or $20 for the whole summer – with wristbands that contain an RFID chip. That way there’s be no more hassling with beach tag checkers as they can use handheld devices to see who has a tag and who doesn’t. Last year, Ocean City spent more than $282,000 to pay 170 badge checkers and with the new RFID wristband it will certainly reduce that number.

From an Asbury Park Press report:
…people wouldn't even think about trying to sneak onto the beach without paying: Five to 10% of people going to the beach either try to sneak on without paying, or lie offer excuses including that their badge is on a T-shirt on a beach chair near the water. (Ed aside: I know I did when I lived near the area)

Will McKinley, a badge checker stationed on boardwalk at the 19th Street beach, said the new system would make his job easier. "It will take the hassle out of going up to people and asking to see their badges," he said. "They're more OK with it up here. On the beach, they don't like to be hassled."

Yet another cool feature of the high-tech beach will be the ability to track beachgoers – an application that is being touted by parents. A mother going to the beach with three small children, for instance, could have her bracelet linked to those of her children. If one of them passes an electronic sensor at the entrance or exit to the boardwalk without the right adult, a text message would instantly be sent to her cell phone, the Asbury Press says. The RFID network would also let city officials know how many people are on the beach at a particular time and let them adjust police and emergency units where they might be needed most. And even the trash cans on this beach would be high-tech. Special solar-powered units would have sensors that, when the container is three-quarters full, would automatically send an e-mail to the public works department asking a worker to come empty them, according to the Asbury Park Press.

Is it all too Big brotherish? Some think so. Most seem positive. Nearly 20 coastal municipalities have wireless Internet systems, mostly in California and Florida, according to the Web site MuniWireless.com. Published reports say the network could net the city $12 million in five years or so.
http://www.networkworld.com/community/node/17841





Sprint, Google in Pact for WiMax Mobile Web

Sprint Nextel Corp. said on Thursday it would develop with Google Inc. a new mobile Internet portal using WiMax wireless technology to offer Web search and social networking.

Sprint's WiMax for high-speed wireless and its services for detecting location will be combined with Google tools including e-mail, chat and other applications.

Sprint announced earlier this month a plan to connect its WiMax high-speed services with those of Clearwire Corp to allow customers to move between their networks.

Sprint aims to use the emerging WiMax technology to better compete with rival wireless and wired broadband networks.

It plans to test the WiMax service in Chicago, Baltimore and Washington by the end of this year, with a goal of attaining coverage for 100 million people by the end of 2008.

WiMax offers Web access speeds that are five times faster than typical wireless networks, though they are still slower than wired broadband.

(Reporting by Michele Gershberg and Anthony Kurian in Bangalore)
http://www.reuters.com/article/techn...AS800420070726





When Mobile Phones Aren’t Truly Mobile
Randall Stross

WIRELESS carriers in the United States are spiritual descendants of dear Ma Bell: they view total control over customers as their inherited birthright.

The younger generation — Verizon Wireless, Sprint Nextel, T-Mobile and the namesake child AT&T — would make their hallowed matriarch proud. They do everything they can to keep power firmly in their own hands. It is entirely at the carriers’ discretion to permit, or disable, the features that a factory loads into the newest phones. They also decide which software can be installed and how it may be used. Many wireless subscribers have ruefully become acquainted with gotcha clauses in their contracts.

In most European and Asian countries, a customer can switch carriers in a few seconds by removing a smart card from a cellphone and inserting a different one from a new provider. In the United States, wireless carriers have deliberately hobbled their phones to make flight to a competitor difficult, if not impossible.

If you, the long-suffering subscriber, decide that you have had enough and wish to try your luck with another company, you’re free to pay your early-termination fee and go. But you most likely will have to abandon the phone you’ve already paid for, even when the technology is shared by the two carriers. (Sprint, for example, whose network is based on the CDMA standard, forbids the use of CDMA-based cellphones obtained from Verizon.) The odds are better than even that your cellphone is either locked by your incumbent carrier or forbidden for use on the network by your new one.

In the days when cellphones were inexpensive and could perform only one or two functions, they could be treated as disposable. When smart phones like the Palm Treo arrived, however, the cellphones became too pricey to abandon lightly when switching companies. Now the iPhone is here — if you’re willing to pony up $500 or $600. AT&T has received an exclusive contract from Apple, so iPhone buyers have no alternative carrier. But the lack of choices rankles and is drawing more scrutiny than ever.

Two weeks ago, Representative Edward J. Markey, Democrat of Massachusetts, led a House hearing on “wireless innovation and consumer protection” and held up an iPhone as Exhibit A in his assessment that the industry exerted “far too much control over the features, functions and applications that wireless gadget makers and content entrepreneurs can offer directly to consumers.” Why is it, he asked, that AT&T imposes a two-year contract with a $175 early-termination fee “even though the phone cost wasn’t subsidized and a consumer can’t even take it to use with another network provider?”

Wireless customers may soon have a few more options. In a coming auction for wireless spectrum that will be available in 2009, the Federal Communications Commission is preparing to set aside a third of the new capacity for bidders who agree to operate wireless services in a more open fashion.

Kevin J. Martin, the F.C.C. chairman, said in an interview last week that he had circulated a draft proposal among his fellow commissioners that would require the winning bidders to be receptive “to all kinds of devices and applications” provided by independent consumer electronics makers and third-party software providers.

Subscribers of the new services would even be permitted to take their phones with them, freely, from one carrier to another. Imagine: a genuinely mobile phone.

The pressure to provide consumers with more cellphone and software choices has been building for some time. In January, the F.C.C. took another step to loosen the exclusive grip of the cable operators’ control over the set-top box that feeds the cable signal to the TV, a move that showed that the commission is open to changes that give consumers more equipment choices.

Then, in February, Timothy Wu, a law professor at Columbia University, published an influential paper, “Wireless Net Neutrality,” which made a well-supported case that the government should compel wireless carriers to open their networks to equipment and software applications that the carriers did not control. Mr. Wu called his proposition a call for “Cellular Carterfone,” referring to the 1968 Carterfone ruling by the F.C.C. The Carterfone was a speakerphone-like gadget that permitted a phone sitting in a cradle to be connected with a two-way radio. Over the objections of AT&T, the F.C.C. ruled that consumers could plug it or any phone or accessory into the network so long as doing so did no harm to the network. The ruling set in motion the changes that provided consumers with a cornucopia of equipment choices like answering machines, fax machines, modems and cordless phones. Among Mr. Wu’s readers was Mr. Martin of the F.C.C.

The wireless carriers are fighting a cellular version of the Carterfone decision. They contend that they must exert control over all equipment used on their networks in order to protect the networks’ operations. AT&T says in an F.C.C. filing that only the carrier has the incentive to oversee “the integrity, security and efficient and economical use” of the network.

MR. WU’S paper, however, shows that the landline telephone industry used identical arguments, predicting dire consequences were its customers permitted to use equipment from unknown sources. In 1955, when AT&T was fighting to exclude a gadget called the Hush-A-Phone, the company solemnly argued, “It would be extremely difficult to furnish ‘good’ telephone service if telephone users were free to attach to the equipment, or use with it, all of the numerous kinds of foreign attachments, which are marketed by persons who have no responsibility for the quality of telephone service.”

As a postscript to the landline industry’s resistance to opening its networks, Mr. Wu said in an interview last week, “Things turned out not just O.K., but great.”

Companies like Google and Skype have called on the F.C.C. to open up more equipment and software options in the wireless industry. Google said on Friday that it would participate in the spectrum auction, committing a minimum of $4.6 billion, if the F.C.C. put into effect its "open access" proposals submitted earlier. Verizon Wireless, however, contended that Google’s proposals would open its network to phones that Verizon had not approved and “that cannot reliably communicate with law enforcement,” a grave problem “in an era of heightened national security concerns.”

In other words, stick with Verizon-certified phones, or the terrorists win.

The wireless industry is being dragged, ever so slowly and gently, into a scary new age — one that began in 1968 with Carterfone — that will require adjustment to reduced control. The industry can never credibly contend that its business practices foster competition and innovation as long as its customers are prevented from moving easily from one carrier to another. Last week, Representative Markey said: “How crazy is this? You can take your number with you, but you can’t take your new $500 phone with you.”
http://www.nytimes.com/2007/07/22/bu...ey/22digi.html





iPhone Flaw Lets Hackers Take Over, Security Firm Says
John Schwartz

A team of computer security consultants say they have found a flaw in Apple’s wildly popular iPhone that allows them to take control of the device.

The researchers, working for Independent Security Evaluators, a company that tests its clients’ computer security by hacking it, said that they could take control of iPhones through a WiFi connection or by tricking users into going to a Web site that contains malicious code. The hack, the first reported, allowed them to tap the wealth of personal information the phones contain.

Although Apple built considerable security measures into its device, said Charles A. Miller, the principal security analyst for the firm, “Once you did manage to find a hole, you were in complete control.” The firm, based in Baltimore, alerted Apple about the vulnerability this week and recommended a software patch that could solve the problem.

A spokeswoman for Apple, Lynn Fox, said, “Apple takes security very seriously and has a great track record of addressing potential vulnerabilities before they can affect users.”

“We’re looking into the report submitted by I.S.E. and always welcome feedback on how to improve our security,” she said.

There is no evidence that this flaw had been exploited or that users had been affected.

Dr. Miller, a former employee of the National Security Agency who has a doctorate in computer science, demonstrated the hack to a reporter by using his iPhone’s Web browser to visit a Web site of his own design.

Once he was there, the site injected a bit of code into the iPhone that then took over the phone. The phone promptly followed instructions to transmit a set of files to the attacking computer that included recent text messages — including one that had been sent to the reporter’s cellphone moments before — as well as telephone contacts and e-mail addresses.

“We can get any file we want,” he said. Potentially, he added, the attack could be used to program the phone to make calls, running up large bills or even turning it into a portable bugging device.

Steven M. Bellovin, a professor of computer science at Columbia University, said, “This looks like a very genuine hack.” Mr. Bellovin, who was for many years a computer security expert at AT&T Labs Research, said the vulnerability of the iPhone was an inevitable result of the long-anticipated convergence of computing and telephony.

“We’ve been hearing for a few years now that viruses and worms were going to be a problem on cellphones as they became a little more powerful, and we’re there,” he said. The iPhone is a full-fledged computer, he noted, “and sure enough, it’s got computer-grade problems.”

He said he suspected that phones based on the Windows mobile operating system would be similarly “attackable,” though he had not yet heard of any attacks.

“It’s not the end of the world; it’s not the end of the iPhone,” he said, any more than the regular revelations of vulnerabilities in computer browser software have killed off computing. “It is a sign that you cannot let down your guard. It is a sign that we need to build software and systems better.”

Details on the vulnerability, but not a step-by-step guide to hacking the phone, can be found at www.exploitingiphone.com, which the researchers said would be unveiled today.

Hackers around the world have been trying to unveil the secrets of the iPhone since its release last month; most have focused their efforts on unlocking the phone from its sole wireless provider, AT&T, and getting unauthorized programs to run on it. The iPhone is a closed system that cannot accept outside programs and can be used only with the AT&T wireless network.

Some of those hackers have posted bulletins of their progress on the Web. A posting went up on Friday that a hacker going by the name of “Nightwatch” had created and started an independent program on the phone.

The Independent Security Evaluators researchers were able to crack the phone’s software in a week, said Aviel D. Rubin, the firm’s founder and the technical director of the Information Security Institute at Johns Hopkins University. Mr. Rubin, who bought an iPhone the day after the cellphone was released, said in an interview that he had approached three colleagues, Dr. Miller, Joshua Mason and Jake Honoroff, and offered them an enticing prize if they would try to crack the iPhone. “I told the guys I would buy them iPhones.”

Dr. Miller had already been exploring weaknesses in the computer versions of Safari, Apple’s Web browser, and was planning to reveal that vulnerability, a relatively common kind of flaw known as a buffer overflow, at the Black Hat computer security conference next month. Dr. Miller instantly thought to see whether the phone, which uses a version of Safari, would be as vulnerable.

Mr. Rubin said the research was not intended to show that the iPhone was necessarily more vulnerable to hacking than other phones, or that Apple products were less secure than those from other companies. “Anything as complex as a computer — which is what this phone is — is going to have vulnerabilities,” he said.

There are far more viruses, worms and other malicious software affecting Windows systems than Apple systems. But Mr. Rubin said that Apple products have drawn fewer attacks because the computers have fewer users, and hackers reach for the greatest impact.

“Windows gets hacked all the time not because it is more insecure than Apple, but because 95 percent of computer users are on Windows,” he said. “The other 5 percent have enjoyed a honeymoon that will eventually come to an end.”

The iPhone is becoming a victim of its own success, he said. “The irony is that the more popular something is, the more insecure it becomes, because popularity paints a large target on its back.”

Mr. Rubin said his goal was to discover vulnerabilities and warn of them so that companies would strengthen their products and consumers would not be lulled into thinking that the technology they use was completely secure.

Mr. Rubin said, “I will think twice before getting on a random public WiFi network now,” but his overall opinion of the phone has not changed.

“You’d have to pry it out of my cold, dead hands to get it away from me,” he said.
http://www.nytimes.com/2007/07/23/te.../23iphone.html





Proof of concept

First Native Third-Party Applications Running on iPhone
Erik Kennedy

Late last week, one "Nightwatch," an anonymous hacker familiar with the ARM processor family, wrote a "Hello, World!" program and ran it. Ordinarily, that wouldn't really be sufficient fodder for an Infinite Loop post, but this particular program is Kind of a Big Deal™. It was run on an iPhone—the first known non-native application to do so.

According to the iPhone Dev Wiki at iphone.fiveforty.net, Nightwatch's ARM/mach-o toolchain kit has successfully compiled its first non-AJAX iPhone application, a significant step forward in unlocking the secrets of the device (if not the device itself). Granted, it's rather a messy process at the moment, involving multiple installations of various and sundry open-source bits and the binaries that, once compiled, don't have much access to little things like OS X header files or whatnot. But the major hurdle, knowing it can be done, is now out of the way. Just don't expect to see Pocket Quicken in the next couple of weeks or anything.

Follow the team's progress via the IRC channel #iphone at irc.osx86.hu. (Try not to be a jerk in the channel, there's enough noise-to-signal as it is already.)
http://arstechnica.com/journals/appl...ning-on-iphone





iPhone Can Now Serve Web Pages, Run Python, Open Source Apps

After the first Hello World application, hacker NerveGas and the people at #iphone-shell have built Apache, Python and other Open Source apps for the iPhone. Yes, your iPhone can now be a Web Server and do all sort of 1337 things. This also means that third-party applications for iPhone will happen no matter what. People, Doom could be just around the corner. [UPDATED 3:07AM EST: As a bonus, check their progress on the iPhone unlocking after the jump.]

The working installations, created using iPhone-hacking-genius Nightwatch's toolchain, include a working Apache installation, Pytho and "a growing binary kit including routing tools, vim, curl, and much more." The binaries can be downloaded from the iPhone Web Wiki web page, but keep in mind that these are only indicated for technical-oriented people, not consumers.

As for the unlocking progress, here's the latest update:
We have confirmation of the existence of some attempt counter for the unlock: with no unlock attempts +XLOCK returns: "PN",1,0,"PU",5,0,"PP",5,0,"PC",5,0,"PS",5,0 with unlock attempts +XLOCK returns: "PN",3,0,"PU",5,0,"PP",5,0,"PC",5,0,"PS",5,0

The unlock handler dies if the first number is >1 but we're still not sure of its exact meaning and how it is set due to some odd behaviour we observed.

Currently the semantic is believed to be:

0=Unknown, 1=Default/Locked, 2=Unknown, 3=Unknown (has to do with attempts), 4=Lockable, 5=Unlocked

While this could seem irrelevant, it probably means that they could try to control the unlocking attempts counter so they can start a full force attack on the total unlocking without making their iPhones useless. One step at time, but steady progress.

These guys are really amazing. If you know what you are doing and want to help, join the effort at the #iPhone IRC channel. If not, stay tuned for the ready-for-public-consumption versions of their applications.
http://gizmodo.com/gadgets/breaking/...pps-282139.php





Apple Slips, AT&T iPhone Activations Disappoint

Apple Inc. shares slipped about 2 percent before the market opened on Tuesday after AT&T Inc. reported initial data on activations for Apple's iPhone that were disappointing to some investors.

In electronic trading before the regular Nasdaq market session, Apple shares slid to $141 from their Monday close of $143.70.

"There is no upside surprise on the number," Shannon Cross, an analyst Cross Research, said of AT&T's initial iPhone activatations.

AT&T said Tuesday that it activated 146,000 iPhones in the first few days of its availability.
http://www.reuters.com/article/hotSt...41903120070724





Apple Posts Record Quarterly Profit
AP

Apple Inc.'s fiscal third-quarter profit soared more than 73 percent, fueled by demand for its Macintosh computers, the strength of its iPod media players and the sales of 270,000 iPhones in the first two days on the market.

For the quarter ended June 30, Apple's profit rose to $818 million, or 92 cents per share, up from $472 million, or 54 cents a share in the year-ago quarter.

Sales grew to $5.41 billion from $4.37 billion last year.

Analysts polled by Thomson Financial expected Apple to report earnings of 72 cents per share on sales of $5.28 billion while Apple itself had projected earnings of 66 cents per share on quarterly sales of $5.1 billion.

"We're thrilled to report the highest June quarter revenue and profit in Apple's history, along with the highest quarterly Mac sales ever," said Steve Jobs, Apple's CEO. "IPhone is off to a great start — we hope to sell our one-millionth iPhone by the end of its first full quarter of sales — and our new product pipeline is very strong."

The gadget maker's highly anticipated iPhone launched on June 29 and sold out within days. Wall Street analysts and investors have had lofty expectations for the multimedia cell phone, driving up Apple's stock more than 30 percent during the quarter.

Apple's silence on how many iPhones were available at launch added to the frenzy and analysts were hoping to gain some insight on the iPhone's initial sales impact and outlook when the Cupertino-based company was to discuss its quarterly earnings during a conference call late Wednesday.

Shares of Apple tumbled more than 6 percent Tuesday after AT&T Inc. — the iPhone's exclusive U.S. carrier — said it activated 146,000 iPhones on June 29 and 30, a number that disappointed investors following some analyst forecasts that Apple would sell 500,000 or more iPhones in its first weekend.

Apple shares rose $2.37, or 1.8 percent, to close at $137.26.
http://sfgate.com/cgi-bin/article.cg...f135543D85.DTL





In a Highly Complex World, Innovation From the Top Down
G. Pascal Zachary

USER-GENERATED content — from Wikipedia to YouTube to open-source software — is generating waves of excitement. But the opening of innovation to wider numbers of people obscures another trend: many of the most popular new products, like the iPod, are dominated by a top-down, elite innovation model that doesn’t allow for customization.

“New technologies are becoming so complex that many are beyond the possibility of democracy playing a role in their development,” said Thomas P. Hughes, a science and technology professor at the University of Pennsylvania.

Consider: Electronic implants into human bodies; gene-splicing as common as cosmetic surgery; computer networks mining vast databases to discern consumer preferences. All of these innovations are the result of corporate or government initiatives overseen by elites.

“The process of innovation leaves out a huge proportion of the population,” said Daniel Sarewitz, director of the Consortium for Science, Policy and Outcomes at Arizona State University.

To be sure, experts like Eric von Hippel, a management professor at the Massachusetts Institute of Technology, argue that the proliferation of “user-generated” designs signals the “democratizing” of innovation. Armed with inexpensive digital tools and networks, ordinary people, he says, can band together to push their own innovations. They also can hijack existing technologies, taking them in directions only dimly envisioned by the original creators.

One example is an electronic community called Instructables whose participants share methods for customizing standard products in unpredictable ways. The chief of Instructables, Eric J. Wilhelm, who earned his doctorate at M.I.T., where he was inspired by Mr. von Hippel, has posted a clever means of turning a white Asics Gel-Foundation 7 running shoe into a purple model. (The $90 official version comes only in a white-black-and-blue combination.)

Today’s Web-savvy consumers “expect innovations to meet their needs,” Mr. Wilhelm says. “If innovation isn’t tailored to them, they expect to be able to tailor it to themselves. That is a big change.”

But does this really mean that elites no longer sit at the top of the innovation food chain?

“Elites have a lot of leverage but less than they used to,” says Peter Leyden, director of the New Politics Institute in San Francisco. “More people are getting their voices heard.” Mr. Leyden sees an emergent American “republic of innovation,” where growing numbers of people influence what innovations are made and when.

Skeptics, however, say that the rosy scenario is exaggerated and that user-generated innovation is merely a kind of “democracy lite,” emphasizing high-end consumer products and services rather than innovations that broadly benefit society.

“Difficult questions are going unasked about who is participating in innovation and on what terms,” says James Wilsdon, director of the innovation program at Demos, a think tank in London.

In that scenario, needed innovations can be overlooked. For example, huge amounts of money are spent on improving Web search engines or MP3 players, while scant attention is given to alternative energy sources. Battling diseases like AIDS or Alzheimer’s — efforts that lobbying groups in wealthy countries help highlight — attract legions of well-financed innovators, while big global killers, like childhood diarrhea and sleeping sickness, are ignored.

Popular pressure to pursue certain innovations sometimes gets results, of course. In 2004, voters in California passed a law lavishly funding a stem-cell research institute — in a rebuke to the Bush administration, which has banned federal funding for such research. “This was a great example of a democratic adjudication of an innovation issue,” Mr. Sarewitz of Arizona State said. Even so, bureaucratic and legal delays have meant a slow start for the San Francisco lab, which has not yet received approval to spend any of the $3 billion in promised taxpayer funds.

The California example suggests that the balance between expert leadership and mass influence is hard to achieve. The underlying complexity of many innovations demands an ever-rising technological literacy from the public, and yet such an outcome “is a dream that will not likely come to pass,” insists Mr. Hughes, a visiting professor at M.I.T.

For all the hoopla over the power and promise of user-generated content, consumer-directed design and other hallmarks of our new golden era of democratized innovation, one of the iconic products of our times — the iPod — can’t be customized (no, I’m not counting putting on different-colored protective jackets). There is an unbroken line between Henry Ford (with his Model T) and Steve Jobs. The new iPhone similarly reflects the elite, corporate innovator’s drive to find one size that fits many.

The cliché that committees can’t create great ideas, or art, still seems to be true — though whether or not that is the best way to innovate remains an open question. Who knows how much longer?
http://www.nytimes.com/2007/07/29/bu...ey/29ping.html





For Architects, Personal Archives as Gold Mines
Robin Pogrebin

In reflecting on where a long career’s worth of architectural drawings and models will ultimately go, Frank Gehry is not focusing strictly on institutions that he feels close to — like the Guggenheim Museum, say, for which he designed a famous satellite branch in Bilbao, Spain. He’s trying to determine which place will pony up.

“I don’t want to give it away — it’s an asset,” Mr. Gehry said. “It’s the one thing in your life you build up, and you own it. And I’ve been spending a lot of rent to preserve it.”

Mr. Gehry, 78, is among a small but influential number of celebrity architects who are considering selling their archives — which can include tens of thousands of objects, from multiple large-scale models and reams of drawings to correspondence and other records — even as they continue to practice.

Barry Bergdoll, the chief curator of architecture and design at the Museum of Modern Art, said he had been approached about the Gehry archive and that the price range was “in multimillion dollars.” He declined to be more specific.

“There is a huge seismic shift,” Mr. Bergdoll said. “It used to be architects would be so grateful that there was someone interested in dedicating space to their work, and they would donate it. Now architects view their designs as a kind of profit center. Architects are getting valuations of them as though they were selling the studio of Picasso.”

The architect Peter Eisenman, 74, says he could not afford not to sell his archives, which he did for an undisclosed amount to the Canadian Center for Architecture in Montreal; the sale was made in pieces over the last 10 years. The goal was to provide for his children, he said.

“I’m not in a position to give it away,” said the architect, whose projects have included the Wexner Center for the Arts in Columbus, Ohio, and the Memorial to the Murdered Jews of Europe in Berlin. Currently he is negotiating with the Beinecke Library at Yale University over some of his collected books and magazines, which could go there partly as a donation.

The bargaining power of these architects is buttressed by the spike in popular appreciation for architecture as an art form. “Architecture is one of the many expressions of the culture of the time,” said Wim de Wit, the Getty Research Institute’s curator of architectural collections. “It is as important as a literary archive or the archives of artists.”

The archives of famous writers have been known to command large sums or to spur competitive bidding by individual collectors and institutions. But archives in this country are generally donated, not sold, experts say, because the institutions that covet them do not have large acquisition budgets and the priority for donors is usually simply to see that their material finds a suitable home.

“There is a relatively small number of repositories in the United States that have endowments that enable six- or seven-figure purchases,” said Mark A. Greene, vice president of the Society of American Archivists. “Most donors are gratified that their collections are of sufficient historical value that a repository wants to acquire it in the first place.”

Mary Jo Pugh, the editor of The American Archivist, the society’s journal, said that “the vast majority” of archives amassed across the nation are donated. “The exceptions are literary manuscripts,” she said. For example, the Harry Ransom Humanities Research Center at the University of Texas at Austin acquired Norman Mailer’s archives in 2005 for $2.5 million.

But while dozens of institutions collect authors papers, only a handful collect architectural material, scholars say. And not one of them can easily accommodate the archives of contemporary practitioners.

In 2005 the J. Paul Getty Museum acquired the archive of the Modernist architect Pierre Koenig (1925-2004) from his widow for an undisclosed amount. It consists of more than 3,000 objects, including drawings, models, photographs, slides and documents.

Robert A. M. Stern, the dean of the Yale School of Architecture, said that architects even preserve telephone logs of calls to and from contractors and clients because they can offer an enlightening window into the creative process. Mr. Stern has donated his archives to Yale, as have architects like Kevin Roche and Cesar Pelli. The Yale architecture school collects the work of architects connected with the university.

And some in the field suggest that all of their colleagues should donate their archives to institutions rather than demand a price.

The architect Charles Gwathmey said about selling archives: “I think it’s wrong. Archives are part of the record. How do you put a value on it even?”

And the tax benefits of donating archival material are limited; a 1969 law — seeking to bar former President Lyndon B. Johnson from reaping tax benefits from his private papers — abolished tax deductions for donations of archives.

Mr. Eisenman says he has received a number of queries from institutions about his archive, mentioning Princeton, Columbia, Harvard and Yale. The Museum of Modern Art was not among them.

Mr. Bergdoll of the Modern said that he would like to collect more architects’ archives — and that he gets many offers, often with “phenomenal” prices attached — but that MoMA can barely accommodate the one it has now: that of the pioneering Modernist Mies van der Rohe. “Things used primarily by researchers require all the staff one associates with a library so that they can be accessible and retrievable,” Mr. Bergdoll said. “It would require tripling the staff.”

Peter B. Lewis, the philanthropist and a longtime Gehry fan, commissioned a study two years ago on the value of Mr. Gehry’s archive — he declines to disclose the results — and he continues to evaluate possible homes for it. Jennifer Frutchy, Mr. Lewis’s philanthropic adviser, said that the archive may be in its own class in terms of size, consisting of about 30,000 square feet of models, a slide library, a digital archive and more than 5,000 drawings.

“Frank’s archive is a real beast,” Ms. Frutchy said. “It really serves as a basis not just for the 20th century, but for the 21st century and beyond. In terms of education and research, it is just a gold mine.” She added, “It’s incredible to see the process Frank went through.”

Mr. Bergdoll said of the Gehry archive: “It would be fantastic for anybody to take it. But they will not only need to raise the money to buy it, but to store it, process it and make it available. Otherwise it’s like a time capsule operation — bury it somewhere and at least it’s not destroyed.”

Mr. Gehry said the value of his collection was still being determined, but that a friend to whom he had given two of his drawings had recently sold them for $20,000 each. The Canadian Center offered Mr. Gehry $1.5 million for material related to the house he designed for Mr. Lewis, but Mr. Gehry declined to part with just one of his projects and said the center did not want all of it.

Many institutions agree that the value of such archives is diminished if the components are broken up. “We are not interested in having a few drawings, but the whole archive, because we think architecture is a much more complex process,” said Mirko Zardini, director of the Canadian Center for Architecture, whose collection includes the archives of Aldo Rossi, James Stirling, Cedric Price and John Hejduk.

To be sure, the archives of only the superstar architects are likely to be in wide demand. But others also accumulate plenty over the years.

In the Central Park South studio of Billie Tsien and Tod Williams, however, cardboard models gather dust in corners until they deteriorate or are thrown away. Ms. Tsien said she had no interest in her work being collected and studied one day.

“I was hoping for a funeral pyre,” she said. “The only thing we really care about existing beyond us is the buildings.”
http://www.nytimes.com/2007/07/23/ar...23arch.html?hp





With Tools on Web, Amateurs Reshape Mapmaking
Miguel Helft

On the Web, anyone can be a mapmaker.

With the help of simple tools introduced by Internet companies recently, millions of people are trying their hand at cartography, drawing on digital maps and annotating them with text, images, sound and videos.

In the process, they are reshaping the world of mapmaking and collectively creating a new kind of atlas that is likely to be both richer and messier than any other.

They are also turning the Web into a medium where maps will play a more central role in how information is organized and found.

Already there are maps of biodiesel fueling stations in New England, yarn stores in Illinois and hydrofoils around the world. Many maps depict current events, including the detours around a collapsed Bay Area freeway and the path of two whales that swam up the Sacramento River delta in May.

James Lamb of Federal Way, Wash., created an online map to illustrate the spread of graffiti in his town and asked other residents to contribute to it. “Any time you can take data and represent it visually, you can start to recognize patterns and see where you need to put resources,” said Mr. Lamb, whose map now pinpoints, often with photographs, nearly 100 sites that have been vandalized.

Increasingly, people will be able to point their favorite mapping service to a specific location and discover many layers of information about it: its hotels and watering holes, its crime statistics and school rankings, its weather and environmental conditions, the recent news events and the history that have shaped it. A good portion of this information is being contributed by ordinary Web users.

In aggregate, these maps are similar to Wikipedia, the online encyclopedia, in that they reflect the collective knowledge of millions of contributors.

“What is happening is the creation of this extremely detailed map of the world that is being created by all the people in the world,” said John V. Hanke, director of Google Maps and Google Earth. “The end result is that there will be a much richer description of the earth.”

This fast-growing GeoWeb, as industry insiders call it, is in part a byproduct of the Internet search wars involving Google, Microsoft, Yahoo and others. In the race to popularize their map services — and dominate the potentially lucrative market for local advertising on maps — these companies have created the tools that are allowing people with minimal technical skills to do what only professional mapmakers were able to do before.

“It is a revolution,” said Matthew H. Edney, director of the History of Cartography Project at the University of Wisconsin in Madison. “Now with all sorts of really very accessible, very straightforward tools, anybody can make maps. They can select data, they can add data, they can communicate it with others. It truly has moved the power of map production into a completely new arena.”

Online maps have provided driving directions and helped Web users find businesses for years. But the Web mapping revolution began in earnest two years ago, when leading Internet companies first allowed programmers to merge their maps with data from outside sources to make “mash-ups.” Since then, for example, more than 50,000 programmers have used Google Maps to create mash-ups for things like apartment rentals in San Francisco and the paths of airplanes in flight.

Yet that is nothing compared with the boom that is now under way. In April, Google unveiled a service called My Maps that makes it easy for users to create customized maps. Since then, users of the service have created more than four million maps of everything from where to find good cheap food in New York to summer festivals in Europe.

More than a million maps have been created with a service from Microsoft called Collections, and 40,000 with tools from Platial, a technology start-up. MotionBased, a Web site owned by Garmin, the navigation device maker, lets users upload data they record on the move with a Global Positioning System receiver. It has amassed more than 1.3 million maps of hikes, runs, mountain bike rides and other adventures.

On the Flickr photo-sharing service owned by Yahoo, users have “geotagged” more than 25 million pictures, providing location data that allows them to be viewed on a map or through 3-D visualization software like Google Earth.

The maps sketched by this new generation of cartographers range from the useful to the fanciful and from the simple to the elaborate. Their accuracy, as with much that is on the Web, cannot be taken for granted.

“Some people are potentially going to do really stupid things with these tools,” said Donald Cooke, chief scientist at Tele Atlas North America, a leading supplier of digital street maps. “But you can also go hiking with your G.P.S. unit, and you can create a more accurate depiction of a trail than on a U.S.G.S. map,” Mr. Cooke said, referring to the United States Geological Survey.

April Johnson, a Web developer from Nashville, has used a G.P.S. device to create dozens of maps, including many of endurance horse races — typically 25-to-50-mile treks through rural trails or parks.

“You can’t buy these maps, because no one has made them,” Ms. Johnson said.

Angie Fura used one of Ms. Johnson’s maps to help organize the Trace Tribute, an endurance ride on trails near Nashville, and distributed the map to dozens of other riders. “It gives riders an opportunity to understand what the race is like, and it allows them to condition their horses in accordance,” Ms. Fura said.

Until recently, most Web maps were separate islands that could be viewed only one at a time and were sometimes hard to find. But Google and Microsoft have developed tools that make it possible for multiple layers of data to be viewed on a single map. And Google is working to make it easier to search through all online maps.

Now, a tourist heading to, say, Maui can find the hotels and restaurants on the island and display them on a map that also superimposes photos from Flickr and users’ reviews of various beaches.

The same information is quickly moving from two-dimensional to three-dimensional renderings. Microsoft, for example, has created 3-D models of 100 cities worldwide and aims to have 500 models in the next year.

“You will have a digital replica of the world in true 3-D,” said Erik Jorgensen, general manager of Live Search at Microsoft.

For the Internet search companies, these efforts are part of a race to capture the expected advertising bonanza that will come as users browse through these maps in search of businesses and services.

In the process, they are creating technologies whose impact could be similar to those of desktop publishing software, which turned millions of computer users into publishers.

“The possibilities for doing amazing kinds of things, to tell stories or to help tell stories with maps, are just endless,” said Dan Gillmor, director of the Center for Citizen Media, a project affiliated with Harvard’s Berkman Center for Internet & Society and the journalism school at the University of California in Berkeley.

Some of Mr. Gillmor’s journalism students are working with a researcher at Dartmouth to add photographs, videos and interviews to a map-based project documenting the house-by-house reconstruction of a section of New Orleans. Mr. Gillmor wants local residents to contribute to the project, which uses Platial’s map service.

“The hope is that the community will tell the story of its own recovery with the map as the dashboard,” he said. “We have just seen the beginning of what people are going to do with this stuff.”
http://www.nytimes.com/2007/07/27/te...27maps.html?hp





A Family Meets Today to Hear the Complexities of a Bid for Dow Jones
Richard Pérez-Peña

As it assembles at the Boston Hilton today to consider selling Dow Jones & Company and its main prize, The Wall Street Journal, to Rupert Murdoch’s News Corporation, the controlling Bancroft clan faces some stark choices.

Financially — and journalistically — the stakes are high.

Before the bid became publicly known, the Bancrofts’ shares were worth less than $750 million. At $60 a share, the price tentatively agreed to with the News Corporation, their stake is worth more than $1.2 billion, a difference that could approach $500 million spread out among more than 30 family members.

“They are not so well off as to be able to scoff at Murdoch’s money,” said James H. Ottaway, a major shareholder and retired Dow Jones executive. He says Dow Jones would continue to thrive independently and he wants the Bancrofts to reject the offer. But he conceded, “it is asking them to give up quite a lot, at least in the short run.”

Money will not be the only issue on the table today, as the family considers its century-old legacy and the prospect of The Journal being in the hands of a company and an owner whose newspapering many members dislike.

The Bancrofts today will hear a briefing from their advisers on the takeover tentatively approved by the Dow Jones board last Tuesday, and then they will take several days to ponder the matter before their lawyers poll the adult family members.

Assuming that all the shareholders outside the Bancroft and Ottaway families favor selling, less than one-third of the Bancroft family’s vote is needed to gain majority approval for the deal.

Measuring factions within the private, deeply divided family is difficult, and members can change sides; people close to them say it could go either way. At least one board member, Christopher Bancroft, has said he is strongly opposed.

Over the long term, their decision picture is shaded by differing views of the prospects for Dow Jones if they don’t sell. The company has made some bold moves in recent years, but the newspaper industry is in a sharp downturn. Yet even the most optimistic executives have not talked about making the company worth nearly the value Mr. Murdoch has placed on it, and if the Bancrofts reject his offer, the stock could even fall below the $36.33 closing price the day prior to the offer.

There is another proposal, this one from Brad Greenspan, a founder of MySpace. Mr. Greenspan proposes to lend the Bancroft family between $400 million to $600 million to buy out members who wish to sell. But it isn’t known how seriously his offer is being considered.

The agreement negotiated with Mr. Murdoch provides that some shareholders can exchange some stock for News Corporation shares. But even if the Bancrofts took only cash and paid capital gains taxes, they would still have significantly more than they had in April.

Dow Jones stock pays $1 a year in dividends, or $20.6 million to the family. But the money from a sale to the News Corporation, invested elsewhere, could generate several times as much income.

The Bancrofts have sold millions of Dow Jones shares over the last two decades and made other investments, so that some parts of the family have become much less dependent on the company for their living.

The family’s dividends are spread among many people, primarily the eight members of the oldest living generation, and one person in the next generation, who collect most of the income, according to family members and people close to them, who were granted anonymity to discuss private matters. That works out to less than $2 million a year apiece.

Smaller amounts go to the more than two dozen children of the older generation, some of whom have adult children of their own.

Most of their Dow Jones stock is in dozens of trusts, typically with three trustees who must vote unanimously to sell. In most cases, a trust has one family member trustee, and two of the family’s lawyers or bankers.

The eight older generation members hold the major trusteeships. In some cases, their trusteeships give them voting rights over their own stock, that of their siblings, their children, even their cousins. In theory, the most powerful trustees could vote shares against their owners’ wishes, or the lawyers and bankers could defy family members.

“Honestly, all of that could happen or none of it — there’s no way to tell,” said a member of the next-oldest generation.

If the Bancrofts overwhelmingly reject the deal and it falls through, what happens next is unclear. Some analysts and bankers have predicted that the Dow Jones share price will plummet below where it was earlier this year. Others have said it will remain relatively high — though probably nowhere near $60 — as investors anticipate that Mr. Murdoch or someone else to make another run at the company.

A previous family meeting, held on May 23 at the Boston offices of Hemenway & Barnes, the law firm which oversees the trusts, was unusually frank and contentious for the Bancrofts. Several members of the older generation, opposed to entering into talks with the News Corporation, did not attend.

A pivotal figure in the decision could be Christopher Bancroft, who at times has spoken strongly against selling and, like his cousin Leslie Hill, has been looking for alternative investors to block Mr. Murdoch.

Mr. Bancroft seems to be the only person who is clearly the dominant player in one of the family’s three branches, while power is more diffuse in the other two. Family members and people close to them say his two siblings mostly eschew company business and defer to his judgment, though his brother, Hugh Bancroft III, is said to be open to selling.

In addition, Christopher Bancroft has voting power over most of his branch’s stock, as either trustee or owner — 14.5 percent of the total Dow Jones shareholder vote as of January. Only one other family had similar voting power, his cousin, Jane Cox MacElree, at 14.8 percent; no one else had more than 4.2 percent.

Mr. Bancroft is, like Ms. Hill, also one of three family members who sit on the Dow Jones board and have been involved in talks with the News Corporation.

Family members sometimes describe him as mercurial and dismissive, and some were piqued in May when he skipped a family gathering, and then wavered on whether to release a family statement agreeing to meet Mr. Murdoch.

But neighbors and associates in Texas describe Mr. Bancroft as affable and gracious, a man without airs who loves to talk business and donates to many charities, but is determined not to attract attention.

He heads an investment firm, Bancroft Operations, and lives in Argyle, a semi-rural enclave northwest of Dallas that is also home to Rex Tillerson, chief executive of Exxon Mobil, and Jeff Fegan, chief executive of Dallas/Fort Worth International Airport. Mr. Bancroft’s spacious home near the Denton Country Club, valued at more than $2 million, is smaller than others on his street.

“He’s been a very good advisor to me” on business, said Chris Curtis, who owns GoVision, a company that supplies giant video screens for special events. “He’s a smart guy, he’s witty,” Mr. Curtis said, but, “If you polled this community, very few people know about him.”

Mr. Bancroft and his wife, Sue, a former professional bassoonist, have three children. For many years, they have sponsored a series of free concerts by members of the Dallas Symphony Orchestra and the Dallas Opera’s orchestra.

Rogene Russell, artistic director of Fine-Arts Chamber Players, said she and others have wanted to nominate the Bancrofts for various honors, but that the Bancrofts discouraged such recognition. She said that when a local arts center flooded, Mr. Bancroft wrote a check, but asked the center not to publicize his gift.

Another love is Dow Jones. “I think that’s dear to his heart,” said a friend in Argyle, who requested anonymity because his employer had not authorized him to speak to the press. “He doesn’t want to sell, even as much money as Murdoch is throwing at him.”
Irvine O. Hockaday, Jr., a former Dow Jones board member, said, “My sense of Chris Bancroft is that he is understated, and therefore can be underestimated.”

“He is an individual who wants to do the right thing,” Mr. Hockaday said, “and he is trying to define what the right thing is.”

Gretel C. Kovach contributed reporting from Dallas and Clifford Krauss from Houston.
http://www.nytimes.com/2007/07/23/bu...3bancroft.html





I, Rupert, Will Not ... That Is, Until I Do
Richard Pérez-Peña

IMAGINE buying your dream car and signing a contract that says you will not drive it. The car comes with a driver, and you agree to keep him and never tell him where to go. You can get rid of the driver and hire a new one, but only if your neighbors approve.

Now imagine that you’ve made yourself famous, wealthy and powerful by spending half a century driving cars. How long before you reach for those keys? And how hard will anyone try to stop you?

In the media world, Rupert Murdoch is what you might call a motivated driver. He buys, or creates from scratch, newspapers, television networks and satellite systems, and his hands-on management style leaves no doubt as to who is in charge.

So as his News Corporation moves toward buying Dow Jones & Company and its centerpiece, The Wall Street Journal, and even as Mr. Murdoch agrees to a pact ostensibly intended to keep him from dictating what goes into The Journal, the question is not so much whether he will end up behind the wheel, but when.

It’s just a matter of time before operational control is handed over, say lawyers, media analysts and journalists, who cited plenty of reasons why the agreement on editorial independence would not prevent Mr. Murdoch from putting his stamp on the paper.

Dow Jones’s tentative deal with News Corporation provides that the current managing editors of The Journal and Dow Jones Newswires, and the editorial page editor, would remain in place and would have sole authority over content and news staffing.

News Corporation could remove any of those top editors, or appoint someone new to any of those posts, only with the consent of a special committee whose five original members would be chosen jointly by News Corporation and the Bancroft family, which currently holds a controlling stake in Dow Jones.

No editor or committee member will last forever, however, and the agreement gives News Corporation, and no one else, veto power over future committee members. Assuming that Mr. Murdoch, 76, enjoys longevity like that of his mother, who is 98, he has time to bring the whole system under his control. (And if he doesn’t, then presumably the heir to his empire will.)

Yet many experts also surmise that while Mr. Murdoch’s influence on the pages of The Journal is inevitable, it will matter less than people think, especially in the short run. His primary business strategy in buying Dow Jones is to use The Journal and the newswires as a source of content and credibility for the Fox Business Channel, which he plans to introduce in October.

“He’s saying, ‘I like this paper, I’ve paid a lot of money for it, I think The Journal and its brand are a valuable part of my global strategy,’ and he’s not going to mess that up,” said Anne K. Gordon, a partner at Dubilier & Company, a private investment firm, and a former managing editor of The Philadelphia Inquirer. She said people who predict that Mr. Murdoch would intervene aggressively, in damaging ways, “do not give him enough credit.”

Ken Doctor, a media analyst with Outsell, a business research firm, said that when it comes to changing The Journal, “I also think he’ll go slow, at least at first,” because Mr. Murdoch “doesn’t want to jeopardize the brand he’s buying.”

Even so, he said, “I find it just about impossible to imagine that if he really wants to make changes, any agreement will hold him back for very long.”

The tentative deal still must pass muster with the Bancrofts, some of whom have accused Mr. Murdoch of warping news coverage for political or business reasons. It is impossible to describe exactly how the controls will work, experts say, in part because they know of no real precedent for the structure it puts in place, in media companies or any other business.

“The agreement would be an obstacle to editorial interference,” said Louis Ureneck, chairman of the journalism department at Boston University, and a former deputy managing editor of The Philadelphia Inquirer. “But it’s not a firewall. The composition of the special committee would be the result of negotiation and compromise, since both parties need to agree to it, and that invites political compromise at the outset.”

Mr. Murdoch would also be able to set the editors’ budgets, and he has talked of pumping more money into the Journal’s news department, at a time when many newspapers are struggling and cutting their staffs. Under those circumstances, any owner would want some say in what kind of coverage is beefed up in the process.

The special committee would have legal standing to take News Corporation to court to stop newsroom meddling, and would be empowered to investigate the company’s handling of The Journal, but the committee itself would rely on News Corporation for its financing. What no one can guess — at least not until the committee is named — is how much stomach the group would have for challenging Mr. Murdoch, particularly if his perceived infractions are minor ones.

Mr. Murdoch has said he wants fewer long stories in The Journal on weekdays and more coverage of national affairs, hardly anyone’s idea of journalistic felonies. More troubling to people at the newspaper is his statement that he would like The Journal to be more of a counterweight to The New York Times, which he considers liberal.

As vacancies occur in the special committee, the committee itself would fill them, subject to the News Corporation veto. So eventually, people who have studied the agreement say, it will be Mr. Murdoch’s committee, and The Journal will be run by editors chosen by him.

“And what did we expect?” Ms. Gordon asked. “Murdoch would certainly not be the first owner to want things his way in the newsroom. And editors do what they’ve always done — they protest and the moment passes, they give in, or they quit.”
http://www.nytimes.com/2007/07/22/we...w/22perez.html





Ex-PM Spoke to Murdoch Before War
PA

Former Prime Minister Tony Blair spoke to media mogul Rupert Murdoch three times in the 10 days before the outbreak of the Iraq war - once on the eve of the US-led invasion - it has been disclosed.

The telephone conversations were among six calls between the two men detailed by the Cabinet Office in response to a Freedom of Information request from Liberal Democrat peer Lord Avebury.

The information was released on the day after Mr Blair handed over power to Gordon Brown last month, after a three-and-a-half year battle by the Lib Dem peer. Lord Avebury waited until now to publicise the release.

No details were released of what subjects Mr Blair and the News Corporation chairman discussed in the calls on March 11, 13 and 19 2003, ahead of the launch of US-led military action in Iraq on March 20. Further conversations took place on January 29, April 25 and October 3 2004.

The Cabinet Office response also listed meetings between Mr Blair and Express Newspapers publisher Richard Desmond on January 29 and September 3 2003 and February 23 2004. The release covered the PM's phone conversations and meetings with the two men between September 2002 and April 2005.

Lord Avebury initially asked for the dates of Mr Blair's phone calls and meetings with Mr Murdoch and Mr Desmond in October 2003. When this request was rebuffed by the then leader of the Lords, Baroness Amos, he made a complaint under Freedom of Information legislation.

In 2005, Downing Street responded that the information was exempt from disclosure because of the need for the Prime Minister to be able to undertake free and frank discussions. The Cabinet Office said that releasing the timing of the PM's contacts with individuals could be prejudicial to the effective conduct of public affairs because it might lead to the content of their discussions being disclosed.

Their arguments for secrecy were backed in a July 2006 ruling by Information Commissioner Richard Thomas, who said that the timing of any calls need only disclosed if they were official contacts, with civil servants taking minutes.

The peer lodged an appeal last August with the Information Tribunal. On June 28 this year, a day before evidence was due to be served on the parties to the case, the Cabinet Office made the surprise announcement that it would release the information.

Lord Avebury said: "This is a welcome blow for the cause of freedom of information, but it shouldn't have taken so much time and effort to extract information that was so clearly of great public interest. Rupert Murdoch has exerted his influence behind the scenes on a range of policies on which he is known to have strong views, including the regulation of broadcasting and the Iraq war. The public can now scrutinise the timing of his contacts with the former Prime Minister, to see whether they can be linked to events in the outside world."
http://www.guardian.co.uk/uklatest/s...788938,00.html





Congressman Denied Access To Post-Attack Continuity Plans
Jeff Kosseff

Constituents called Rep. Peter DeFazio's office, worried there was a conspiracy buried in the classified portion of a White House plan for operating the government after a terrorist attack.

As a member of the House Committee on Homeland Security, DeFazio, D-Ore., is permitted to enter a secure "bubbleroom'' in the Capitol and examine classified material. So he asked the White House to see the secret documents.

On Wednesday, DeFazio got his answer: DENIED.

"I just can't believe they're going to deny a member of Congress the right of reviewing how they plan to conduct the government of the United States after a significant terrorist attack,'' DeFazio said.

Homeland Security Committee staffers told his office that the White House initially approved his request, but it was later quashed. DeFazio doesn't know who did it or why.

"We're talking about the continuity of the government of the United States of America,'' DeFazio said. "I would think that would be relevant to any member of Congress, let alone a member of the Homeland Security Committee.''

Bush administration spokesman Trey Bohn declined to say why DeFazio was denied access: "We do not comment through the press on the process that this access entails. It is important to keep in mind that much of the information related to the continuity of government is highly sensitive.''

Norm Ornstein, a legal scholar who studies government continuity at the conservative American Enterprise Institute, said he ``cannot think of one good reason'' to deny access to a member of Congress who serves on the Homeland Security Committee.

"I find it inexplicable and probably reflective of the usual knee-jerk overextension of executive power that we see from this White House,'' Ornstein said.

This is the first time DeFazio has been denied access to documents. DeFazio has asked Homeland Security Committee Chairman Bennie Thompson, D-Miss., to help him access the documents.

"Maybe the people who think there's a conspiracy out there are right,'' DeFazio said.
http://www.newhouse.com/congressman-...ity-plans.html





Wikipedia and the Intelligence Services

Is the Net's popular encyclopedia marred by disinformation?
Ludwig De Braeckeleer

While researching my next article about the Lockerbie bombing, I witnessed an incident that made me wonder whether intelligence agents had infiltrated Wikipedia.

Anyone who knows the universal success of Wikipedia will immediately grasp the importance of the issue. The fact that most Internet search engines, such as Google, give Wikipedia articles top ranking only raises the stakes to a higher level.

The Incident

In the aftermath of the Lockerbie bombing in 1988, the finger of suspicion quickly pointed to a Syria-based Palestinian organization -- the Popular Front for the Liberation of Palestine, General Command (PFLP-GC) -- hired by Iran. The terrorist group was created by a former Syrian army captain, Ahmed Jibril, who broke away from the Popular Front for the Liberation of Palestine (PFLP) in 1968.

I had learned from a recently released U.S. National Archives file that Shin Bet, the Israeli Security Agency, had infiltrated the PFLP and helped the Entebbe hijackers (Israeli commandos rescued the hostages in Uganda in 1976), so I wanted to learn more about the link between the PFLP and the PFLP-GC. I also wanted to learn more about allegations made by David Colvin, the first secretary of the British Embassy in Paris, concerning the rather bizarre collaboration between the PFLP and the Shin Bet.

As I could not locate the article in which I had learned about the allegations, I consulted the article on the Entebbe Operation on Wikipedia, where I knew the story had been noted. To my surprise, I found that all references to the alleged collaboration between the PFLP and the Shin Bet had been suppressed. Moreover, it is no longer possible to edit the page.

A Long, Undistinguished History

Conducting false flag operations and planting disinformation in the mainstream media have long belonged to the craft of the spies. In the months preceding the 1953 overthrow of Iranian Prime Minister Mohammed Mossadegh, U.S. and U.K. intelligence agencies used both techniques abundantly.

A copy of the CIA's secret history of the coup surfaced in 2000. Written in 1954 by the Princeton professor who oversaw the operation, the story reveals that agents from the CIA and SIS (the American and British intelligence services) "directed a campaign of bombings by Iranians posing as members of the Communist Party, and planted articles and editorial cartoons in newspapers."

The section of the report concerning the media speaks volumes: "The CIA was apparently able to use contacts at the Associated Press to put on the newswire a statement from Tehran about royal decrees that the CIA itself had written. But mostly, the agency relied on less direct means to exploit the media.

"The Iran desk of the State Department was able to place a CIA study in Newsweek, using the normal channel of desk officer to journalist. The article was one of several planted press reports that, when reprinted in Tehran, fed the war of nerves against Iran's prime minister, Mohammed Mossadegh," the document said.

Half a century later, the technique of disinformation is as important as ever to intelligence agencies. In the aftermath of the attacks of Sept. 11, 2001, the Pentagon set up the Defense Department's Office of Strategic Influence with a mission "to provide news items and false information directly to foreign journalists and others to bolster U.S. policy and the war on terrorism."

The new office attracted so much criticism that the Bush administration eventually shut it down in February 2002. Even defense officials publicly denounced the dangers of such a program, which could have left the department without a shred of credibility.
"We shouldn't be in that business. Leave the propaganda leaks to the CIA, the spooks [secret agents]," a defense official said.

Is Wikipedia Harboring a Secret Agent?

According to clues accumulated by ordinary citizens around the world, it could be that the CIA and other intelligence agencies are riding the information wave and planting disinformation on Wikipedia. If so, tens of thousands of innocent and unwitting citizens around the world are translating and propagating their lies, providing these agencies with a universal news network.

The Salinger Investigation of the Pan Am 103 Bombing

Pierre Salinger was White House press secretary to Presidents John Kennedy and Lyndon Johnson. Salinger also served as U.S. Senator from California and a campaign manager for Robert Kennedy.

But Salinger is also famous for his investigative journalism. Hired by ABC News as its Paris bureau chief in 1978, he became the network's chief European correspondent in 1983.

During his distinguished career, Salinger broke important stories, such as the secret negotiations by the U.S. government with Iran to free American hostages in 1979-80 and the last meeting between U.S. Ambassador April Glaspie and Saddam Hussein in 1990, during which she led the Iraqi president to believe that the U.S. would not react to an invasion of Kuwait.

Salinger, who was based in London, spent a considerable amount of time and energy investigating the bombing of Pan Am 103 over Lockerbie. He and his collaborator, John Cooley, hired a young graduate, Linda Mack, to help in the investigation.

"I know that these two Libyans had nothing to do with it. I know who did it and I know exactly why it was done," Salinger said during his testimony at the Zeist trial, where one of the Libyans was convicted of murdering the 270 victims.

"That's all? You're not letting me tell the truth. Wait a minute; I know exactly who did it. I know how it was done," Salinger replied to the trial judge, Lord Sutherland, who simply asked him to leave the witness box.

"If you wish to make a point you may do so elsewhere, but I'm afraid you may not do so in this court," Lord Sutherland interrupted.

Searching for the True Identity of 'Slim Virgin'

Slim Virgin had been voted the most abusive administrator of Wikipedia. She upset so many editors that some of them decided to team up to research her real life identity.

Attempts to track her through Internet technology failed. This is suspicious in itself as the location of normal Internet users can easily be tracked. According to a team member, Slim Virgin "knows her way around the Internet and covered her tracks with care."

Daniel Brandt of the Wikipedia Review and founder of Wikipedia-Watch.org patiently assembled tiny clues about Slim Virgin and posted them on these Web sites. Eventually, two readers identified her. Slim Virgin was no other than Linda Mack, the young graduate Salinger hired.

John K. Cooley, the collaborator of Salinger in the Lockerbie investigation, posted the following letter to Brandt on Wikipedia Review, which has been set up to discuss specific editors and editing patterns and general efforts by editors to influence or direct content in ways that might not be in keeping with Wikipedia policy:

She claimed to have lost a friend/lover on pan103 and so was anxious to clear up the mystery. ABC News paid for her travel and expenses as well as a salary'

Once the two Libyan suspects were indicted, she seemed to try to point the investigation in the direction of Qaddafi [Libyan President Col. Muammar al-Qaddafi], although there was plenty of evidence, both before and after the trials of Megrahi and Fhimah in the Netherlands, that others were involved, probably with Iran the commissioning power. [In 2001, Abdelbaset Ali Mohmed Al Megrahi was convicted of murder and sentenced to life in prison; Lamin Khalifah Fhimah was acquitted.]

Salinger came to believe that [first name redacted but known to be Linda] was working for [name of intelligence agency redacted but known to be Britain's MI5] and had been from the beginning; assigned genuinely to investigate Pan Am 103, but also to infiltrate and monitor us.
Soon after Cooley wrote to Brandt, Linda Mack contacted him and asked him not to help Brandt in his efforts to expose her. All doubts about Slim Virgin's true identity had vanished. Today, Linda Mack is rumored to reside in Alberta, Canada, under the name of Sarah McEwan.
http://english.ohmynews.com/articlev...74006&rel_no=1





Malaysia Cracks Down on Bloggers
BBC

The Malaysian government has warned it could use tough anti-terrorism laws against bloggers who insult Islam or the country's king.

The move comes as one of Malaysia's leading online commentators has been questioned by police following a complaint by the main governing party.

The new rules would allow a suspect to be detained indefinitely, without being charged or put on trial.

But officials insist the law is not intended to strangle internet freedom.

Online critics

Deputy Prime Minister Najib Razak told The Straits Times that the move was aimed at getting some moderation in postings on the internet, especially on sensitive issues: "Some people feel that they have crossed the line, in making racist remarks," he said.

But the BBC's Jonathan Kent in Kuala Lumpur says the government also appears increasingly concerned about the growing online criticism of its record.

Raja Petra Kamarudin, the editor of one of Malaysia's most popular political websites, Malaysia Today, turned himself in to police on Wednesday, to answer allegations that he had mocked Islam and threatened racial harmony.

Raja Petra is known for his frequent criticism of Prime Minister Abdullah Ahmad Badawi and other government figures.

"I was alleged to have insulted the king, and also Islam and incite racial hatred, so I am going in there to reply to all these charges. I promise I'm going to give them a hell of a tough time," he told the BBC before he turned himself in.

He defended his website, saying: "Many people, especially the non-Malays in this country, do not have a forum to air their views."

"We should not deny these people a chance to vent their feelings," he said.

Malaysia Today is believed to attract around a quarter of a million visitors a day, giving it more readers than most Malaysian newspapers.

The BBC's correspondent says that with a general election on the horizon, the government seems keen to send a signal to its online critics that it will only tolerate so much.
http://news.bbc.co.uk/go/pr/fr/-/2/h...ic/6915002.stm





Most Vote Machines Lose Test to Hackers
John Wildermuth

State-sanctioned teams of computer hackers were able to break through the security of virtually every model of California's voting machines and change results or take control of some of the systems' electronic functions, according to a University of California study released Friday.

The researchers "were able to bypass physical and software security in every machine they tested,'' said Secretary of State Debra Bowen, who authorized the "top to bottom review" of every voting system certified by the state.

Neither Bowen nor the investigators were willing to say exactly how vulnerable California elections are to computer hackers, especially because the team of computer experts from the UC system had top-of-the-line security information plus more time and better access to the voting machines than would-be vote thieves likely would have.

"All information available to the secretary of state was made available to the testers,'' including operating manuals, software and source codes usually kept secret by the voting machine companies, said Matt Bishop, UC Davis computer science professor who led the "red team" hacking effort, said in his summary of the results.

The review included voting equipment from every company approved for use in the state, including Sequoia, whose systems are used in Alameda, Napa and Santa Clara counties; Hart InterCivic, used in San Mateo and Sonoma Counties; and Diebold, used in Marin County.

Election Systems and Software, which supplied equipment to San Francisco, Contra Costa, Solano and Los Angeles counties in last November's election, missed the deadline for submitting the equipment, Bowen said. While their equipment will be reviewed, Bowen warned that she has "the legal authority to impose any condition'' on its use.

Bowen said in a telephone news conference Friday that the report is only one piece of information she will use to decide which voting systems are secure enough to use in next February's presidential primary election.

If she is going to decertify any of the machines, she must do it by Friday, six months before the Feb. 5 vote.

A day-long hearing in Sacramento on Monday will give the UC investigators a chance to present their finding and allow the various voting machine companies to present a response. The hearing also will be open for comments from the public.

The study was designed to discover vulnerabilities in the technology of voting systems used in the state. It did not deal with any physical security measures that counties might take and "made no assumptions about constraints on the attackers,'' Bishop said.

"The testers did not evaluate the likelihood of any attack being feasible,'' he added.

Some county elections officials in the state were among the most critical of the study, saying they worry that they could be forced to junk millions of dollars in voting machines if Bowen decertifies them for the February election.

Letting the hackers have the source codes, operating manuals and unlimited access to the voting machines "is like giving a burglar the keys to your house,'' said Steve Weir, clerk-recorder of Contra Costa County and head of the state Association of Clerks and Election Officials.

The study also determined that many voting systems have flaws that make it difficult for blind voters and those with other disabilities to cast ballots.

During her election campaign last year, Bowen made it clear she had little confidence in the security of electronic voting machines and vowed to review their use in the state.

"Voting systems are tools of our democracy,'' she said Friday. "We want to ensure that the voting systems used in the state are secure, accurate, reliable and accessible to all. This (study result) is not a big deal to me. It's a big deal for everyone in the country.''

Vendors and other advocates of electronic voting machines have suggested that because of Bowen's well-publicized concerns, she has her thumb on the scale when it comes to reviewing the systems. But the secretary of state said she purposely avoided the scientists doing the study.

Bowen admitted that she's "enough of a geek" that she would have enjoyed working closely with the study, but "I've stayed out of the way ... It's not my review,'' she said. "I didn't want (the researchers) to be influenced by my questions.''

Weir said the UC study "is only a hologram of what could be done technically without considering the real-world mitigation,'' the locks, access cards and other physical security measures typically used.

The study found "absolutely no evidence of any malicious source code anywhere,'' he added. "They found nothing that could cast doubt on the results of elections.''

Bishop, however, said he was surprised by the weakness of the security measures, both physical and electronic, protecting the voting systems. His team of hackers found ways to get into the systems not only through the high-tech equipment in election headquarters but also through the machines in the polling places.

If the testers had had more time, they would have found more flaws, he added.

"The vendors appeared to have designed systems that were not high assurance (of security)," said Bishop, a recognized expert on computer security. "The security seems like it was added on.''
http://sfgate.com/cgi-bin/article.cg.../28/VOTING.TMP





Agreement Reached on Bill Banning Paperless Voting
Adam Thomas

Democrats and Republicans in the US House of Representatives agreed today on a compromise that will push through a bill banning paperless voting machines and requiring a voter-verified paper record for every vote in the country, after government sanctioned hackers showed how they could break into all three of the top voting systems used in California.

The agreement by Majority Leader Steny Hoyer and Rep. Rush Holt of New Jersey will advance H.R. 811, the "Voter Confidence and Increased Accessibility Act of 2007," (H.R. 811) which amends the Help America Vote Act of 2002 to require a voter-verified permanent paper ballot.

"Today's announcement gives Americans renewed hope that Congress will soon put an end to unaccountable, unverifiable, and inaccessible voting," said Ralph G. Neas, president of the advocacy group People For the American Way. "Millions of voters were disenfranchised in recent elections, and millions of others have wondered if their votes were correctly counted. That is intolerable. Given how much is at stake in the coming elections, passing this legislation should be the nation's top domestic legislative priority."

The amendment ensures that by the 2008 presidential elections there will be a paper record for all votes cast in federal elections, and makes the paper ballot the ballot of record for purposes of a recount and puts in place a system of mandatory random audits.

On technical aspects, the bill prohibits wireless devices in voting machines, and makes voting system source code subject to examination should discrepancies arise.

The agreement obligates the provision for emergency paper ballots should voting machines break down or fail in any way, mandates upgrades to provide durable paper records and enhanced accessible technology by 2012.
http://pressesc.com/news/79928072007...perless-voting





Bush Wants Terrorism Law Updated
Deb Riechmann

President Bush wants Congress to modernize a law that governs how intelligence agencies monitor the communications of suspected terrorists.

``This law is badly out of date,'' Bush said Saturday in his weekly radio address.

The Foreign Intelligence Surveillance Act, or FISA, provides a legal foundation that allows information about terrorists' communications to be collected without violating civil liberties.

Democrats want to ensure that any changes do not give the executive branch unfettered surveillance powers.

Bush noted that terrorists now use disposable cell phones and the Internet to communicate, recruit operatives and plan attacks; such tools were not available when FISA passed nearly 30 years ago. He also cited a recently released intelligence estimate that concluded al-Qaida is using its growing strength in the Middle East to plot attacks on U.S. soil.

``Our intelligence community warns that under the current statute, we are missing a significant amount of foreign intelligence that we should be collecting to protect our country,'' Bush said. ``Congress needs to act immediately to pass this bill, so that our national security professionals can close intelligence gaps and provide critical warning time for our country.''

The 1978 law set up a court that meets in secret to review applications from the FBI, the National Security Agency and other agencies for warrants to wiretap or search the homes of people in the United States in terrorist or espionage cases.

Shortly after the Sept. 11 attacks, Bush authorized the NSA to spy on calls between people in the U.S. and suspected terrorists abroad without FISA court warrants. The administration said it needed to act more quickly than the court could. It also said the president had inherent authority under the Constitution to order warrantless domestic spying.

After the program became public and was challenged in court, Bush put it under FISA court supervision this year.

The national intelligence director, in a letter Wednesday to the House intelligence committee, stressed the need to be able to collect intelligence about foreign terrorists overseas. Mike McConnell said intelligence agencies should be able to do that without requirements imposed by an ``out of date'' law.

``Simply put, in a significant number of cases, we are in the unfortunate position of having to obtain court orders to effectively collect foreign intelligence about foreign targets located overseas,'' he wrote the committee chairman, Rep. Silvestre Reyes, D-Texas.

Caroline Fredrickson, director of the Washington legislative office of the American Civil Liberties Union, contends the White House is asking for more power to conduct warrantless domestic and international surveillance.

``The administration claims the Foreign Intelligence Surveillance Act must be 'modernized.' Actually, it needs to be followed,'' she said. ``The reality is, their proposal would gut FISA.''

The ACLU said the legislation backed by the administration would give immunity from criminal prosecution and civil liability for the telecommunication companies that participate in the NSA program. The ACLU urged lawmakers to find out the full extent of current intelligence gathering under FISA before making changes.

``The only thing more outrageous than the administration's call for even more unfettered power is a Congress that would consider giving it to them,'' Frederickson said.

In a statement this past week, Reyes said: ``To date, our review has uncovered numerous inefficiencies in the current FISA system. It is not yet clear whether changes to the statute are necessary, but if they are required and justified, we will address them.''

The House Republican leader, Rep. John Boehner of Ohio, says Democrats on delaying necessary changes.

``Rather than learning the lessons of September 11 - that we need to break down the bureaucratic impediments to intelligence collection and analysis - Democrats have stonewalled Republican attempts to modernize FISA and close the terrorist loophole,'' he said Saturday.
http://www.guardian.co.uk/uslatest/s...812353,00.html





Mining of Data Prompted Fight Over Spying
Scott Shane and David Johnston

A 2004 dispute over the National Security Agency’s secret surveillance program that led top Justice Department officials to threaten resignation involved computer searches through massive electronic databases, according to current and former officials briefed on the program.

It is not known precisely why searching the databases, or data mining, raised such a furious legal debate. But such databases contain records of the phone calls and e-mail messages of millions of Americans, and their examination by the government would raise privacy issues.

The N.S.A.’s data mining has previously been reported. But the disclosure that concerns about it figured in the March 2004 debate helps to clarify the clash this week between Attorney General Alberto R. Gonzales and senators who accused him of misleading Congress and called for a perjury investigation.

The confrontation in 2004 led to a showdown in the hospital room of then Attorney General John Ashcroft, where Mr. Gonzales, the White House counsel at the time, and Andrew H. Card Jr., then the White House chief of staff, tried to get the ailing Mr. Ashcroft to reauthorize the N.S.A. program.

Mr. Gonzales insisted before the Senate this week that the 2004 dispute did not involve the Terrorist Surveillance Program “confirmed” by President Bush, who has acknowledged eavesdropping without warrants but has never acknowledged the data mining.

If the dispute chiefly involved data mining, rather than eavesdropping, Mr. Gonzales’ defenders may maintain that his narrowly crafted answers, while legalistic, were technically correct.

But members of the Senate Intelligence Committee, who have been briefed on the program, called the testimony deceptive.

“I’ve had the opportunity to review the classified matters at issue here, and I believe that his testimony was misleading at best,” said Senator Russ Feingold, Democrat of Wisconsin, joining three other Democrats in calling Thursday for a perjury investigation of Mr. Gonzales.

“This has gone on long enough,” Mr. Feingold said. “It is time for a special counsel to investigate whether criminal charges should be brought.”

The senators’ comments, along with those of other members of Congress briefed on the program, suggested that they considered the eavesdropping and data mining so closely tied that they were part of a single program. Both activities, which ordinarily require warrants, were started without court approval as the Bush administration intensified counterterrorism efforts soon after the Sept. 11 attacks.

A half-dozen officials and former officials interviewed for this article would speak only on the condition of anonymity, in part because unauthorized disclosures about the classified program are already the subject of a criminal investigation. Some of the officials said the 2004 dispute involved other issues in addition to the data mining, but would not provide details. They would not say whether the differences were over how the databases were searched or how the resulting information was used.

Nor would they explain what modifications to the surveillance program President Bush authorized to head off the threatened resignations by Justice Department officials.

An agency spokesman declined to comment on the data mining issue but referred a reporter to a statement issued earlier that Mr. Gonzales had testified truthfully.

The Justice Department announced in January that eavesdropping without warrants under the Terrorist Surveillance Program had been halted, and that a special intelligence court was again overseeing the wiretapping. The N.S.A., the nation’s largest intelligence agency, generally eavesdrops on communications in foreign countries. Since the 1978 passage of the Foreign Intelligence Surveillance Act, known as FISA, any eavesdropping to gather intelligence on American soil has required a warrant from the special court.

In addition, court approval is required for the N.S.A. to search the databases of telephone calls or e-mail records, usually compiled by American phone and Internet companies and including phone numbers or e-mail addresses, as well as dates, times and duration of calls and messages. Sometimes called metadata, such databases do not include the content of the calls and e-mail messages — the actual words spoken or written.

Government examination of the records, which allows intelligence analysts to trace relationships between callers and identify possible terrorist cells, is considered less intrusive than actual eavesdropping. But the N.S.A.’s eavesdropping targeted international calls and e-mail messages of people inside the United States, while the databases contain primarily domestic records. The conflict in 2004 appears to have turned on differing interpretations of the president’s power to bypass the FISA law and obtain access to the records.

President Bush has asserted that both his constitutional powers as commander in chief and the authorization for the use of military force passed by Congress after the Sept. 11 attacks gave him legal justification for skirting the warrant requirement. Critics have called the surveillance illegal because it does not comply with the FISA law.

The first known assertion by administration officials that there had been no serious disagreement within the government about the legality of the N.S.A. program came in talks with New York Times editors in 2004. In an effort to persuade the editors not to disclose the eavesdropping program, senior officials repeatedly cited the lack of dissent as evidence of the program’s lawfulness.

In December 2005, The Times published articles describing the program, the data mining and the internal legal debate. The newspaper reported that the N.S.A. had combed large volumes of telephone and Internet traffic in search of patterns that might point to terrorism suspects.

Civil liberties groups, Congressional Democrats and some Republicans reacted to the disclosures with outrage, accusing the administration of operating an illegal surveillance program inside the United States. The uproar grew when USA Today reported in May 2006 more details of the N.S.A.’s acquisition from telephone companies of the phone call databases. In response to the articles, Mr. Bush confirmed the eavesdropping, saying it was limited to communications in and out of the United States involving people suspected of ties to Al Qaeda. He did not, however, confirm the data mining, nor has any other official done so publicly.

Mr. Gonzales defended the surveillance in an appearance before the Senate Judiciary Committee in February 2006, saying there had been no internal dispute about its legality. He told the senators: “There has not been any serious disagreement about the program that the president has confirmed. There have been disagreements about other matters regarding operations, which I cannot get into.”

By limiting his remarks to “the program the president has confirmed,” Mr. Gonzales skirted any acknowledgment of the heated arguments over the data mining. He said the Justice Department had issued a legal analysis justifying the eavesdropping program.

Mr. Bush and other officials also have repeatedly cited Justice Department reviews as evidence of their care in overseeing the program, never mentioning the bitter conflict that unfolded behind the scenes.

Mr. Gonzales’s 2006 testimony went unchallenged publicly until May of this year, when James B. Comey, the former deputy attorney general, described the March 2004 confrontation to the Senate Judiciary Committee.

Mr. Comey had refused to sign a reauthorization for the N.S.A. program when he was standing in for Mr. Ashcroft, who was hospitalized for gall bladder surgery.

Mr. Comey described an intense fight that prompted the top leaders of the Justice Department to consider resigning in protest. Mr. Gonzales and Mr. Card visited the bedside of Mr. Ashcroft, who was in pain and under sedation, to seek his signature on the reauthorization.

Mr. Ashcroft refused to do so. Mr. Comey testified that he thought the White House officials were trying to take advantage of a sick man.

On Tuesday, to respond to Mr. Comey’s account, Mr. Gonzales testified in a Senate appearance that he went to the hospital only after meeting with Congressional leaders about the impending deadline for the reauthorization. He said the consensus was that the program should go on, so he felt he had no choice but to seek Mr. Ashcroft’s approval.

At the hearing, Mr. Gonzales faced harsh questioning about why he had not previously acknowledged the 2004 standoff. In response, he asserted once again that there had not been disagreements about the surveillance program, insisting that the dispute involved “other intelligence activities.”

After the hearing, Senator Patrick J. Leahy, Democrat of Vermont and chairman of the Judiciary Committee, sent Mr. Gonzales a transcript of his testimony with pointed instructions — to “correct, clarify or supplement your answers so that, consistent with your oath, they are the whole truth.”
http://www.nytimes.com/2007/07/29/washington/29nsa.html





Local news

Judge Rules Against Government In Warrantless Surveillance Cases
AP

A federal judge in California ruled Tuesday against the federal government's attempts to stop investigations in five states, including Connecticut, of President Bush's domestic spying program.

U.S. District Chief Judge Vaughn Walker last winter was assigned to hear arguments in the federal government's attempt to stop Maine regulators from forcing Verizon to say whether it provided customer call records to the government without a warrant. Similar cases in Missouri, New Jersey, Connecticut and Vermont were combined with the Maine case.

The Department of Justice was seeking to stop the investigations of phone records based on the Supremacy Clause of the U.S. Constitution, the foreign affairs power of the federal government and the state secrets privilege.

In a 35-page ruling, Walker dismissed the government's request to stop the investigations, ruling that neither the Supremacy Clause nor the foreign affairs power of the government prevented a state from asking about phone records.

The judge, however, did not rule on the state secrets' argument, instead reserving judgment until a federal court in California rules on a similar but separate case that is pending.

Maine Attorney General Steve Rowe said his office and the PUC will review the decision before deciding what steps to take next. But the ruling, he said, "goes a long way towards protecting the privacy of Maine people."

"In an era of data breaches and identity theft, states are working to protect citizens' sensitive personal information," he said. "The federal government should be a partner in this effort instead of throwing up barriers by filing lawsuits."

In Connecticut, commissioners at the state Department of Public Utility Control maintain they have authority to investigate the possible release of the records by Verizon and AT&T.
http://hosted.ap.org/dynamic/stories...07-24-18-49-39





MySpace Deletes 29,000 Sex Offenders

Popular Internet social network MySpace said on Tuesday it detected and deleted 29,000 convicted sex offenders on its service, more than four times the figure it had initially reported.

The company, owned by media conglomerate News Corp, said in May it had deleted about 7,000 user profiles that belonged to convicted offenders. MySpace attracts about 60 million unique visitors monthly in the United States.

The new information was first revealed by U.S. state authorities after MySpace turned over information on convicted sex offenders it had removed from the service.

"The exploding epidemic of sex offender profiles on MySpace -- 29,000 and counting -- screams for action," Connecticut Attorney General Richard Blumenthal said in a statement.

Blumenthal, who led a coalition of state authorities to lobby MySpace for more stringent safeguards for minors, and other state AGs have demanded the service begin verifying a user's age and require parental permission for minors.

The minimum age to register on MySpace is 14.

"We're pleased that we've successfully identified and removed registered sex offenders from our site and hope that other social networking sites follow our lead," MySpace Chief Security Officer Hemanshu Nigam said in a statement.

The service has come under attack over the past year after some of its young members fell prey to adult predators posing as minors. The families of several teenage girls sexually assaulted by MySpace members sued the service in January for failing to safeguard its young members.

Late last year, it struck a partnership with background verification company Sentinel Tech Holdings Corp. to co-develop the first U.S. national database of convicted sex offenders to make it easier to track offenders on the Internet.

Convicted sex offenders are required by law to register their contact information with local authorities. But the information has only been available on regional databases, making nationwide searches difficult.

As of May, there were about 600,000 registered sex offenders in the United States.
http://www.reuters.com/article/gover...24879820070724





Look for Criminals in Your Family Tree

You can find 18th century British convicts on site that calls them ‘family’

An ancestry Web site released online on Wednesday the records of tens of thousands of British convicts sent to Australia from the 18th century.

The site (www.ancestry.co.uk) features the records of 160,000 convicts who were transported to Australia between 1788 and 1868.

"We invite you to search this collection and discover your convict ancestors. After all, they're still family," the site said.

Some of the convicts were guilty of serious crimes like murder and assault but many were for minor offences.

The first cargo of 732 convicts were landed in Sydney Cove in January 1788 by 11 ships from the British First Fleet.
http://www.msnbc.msn.com/id/19956704/





Parents’ Ire Grows at Pedophile’s Unabashed Blog
Jennifer Steinhauer

The search for the self-described pedophile in the large-brimmed black hat commences nearly every day here, with findings posted on chat rooms frequented by mothers.

He was spotted at a fair in Santa Clarita. He recently emerged from the Social Security office on Olympic Boulevard. He tapped away on a computer at the library in Mar Vista. Warnings have gone out. Signs have been posted.

And yet unlike convicted sex offenders, who are required to stay away from places that cater to children, in this case the police can do next to nothing, because this man, Jack McClellan, who has had Web sites detailing how and where he likes to troll for children, appears to be doing nothing illegal.

But his mere presence in Los Angeles — coupled with Mr. McClellan’s commitment to exhibitionistic blogging about his thoughts on little girls — has set parents on edge. One group of mothers, whose members by and large have never met before, will soon band together in a coffee shop to hammer out plans to push lawmakers in Sacramento to legislate Mr. McClellan out of business.

“Just the idea that this person could get away with what he was doing and no one could press charges has made me angry,” said Jane Thompson, a stay-at-home mother in East Los Angeles who recently read Mr. McClellan’s comments about a festival in her neighborhood in which he seemed to be describing her child.

Ms. Thompson is part of a movement to make it illegal to post images of children of any type on Web sites with sexual content or themes. “It became what I call a minor obsession of mine for the next six weeks,” she said, “to get to know his crowd and the things they talk about.”

Two months ago, Mr. McClellan said, he was more or less run out of Washington State, where he lived off and on with his parents, after the news media there and various Web sites drew attention to his activities, making him worry about his safety and that of his family. He had been posting nonsexual pictures of children on a Web site intended to promote the acceptance of pedophiles, and to direct other pedophiles to events and places where children tended to gather.

So he moved to Los Angeles, where he was born, to try to live a Southern California version of his former life. The climate was one draw, said Mr. McClellan in an interview near this reporter’s office last week. But also “there are so many world-class children’s attractions here, Disneyland, festivals and whatnot.”

Mr. McClellan has refrained from posting pictures of children on his Web site, which was shut down by its host several weeks ago but which he intends to start again, he said, with a Dutch host. On the site, he has described fairs, festivals and other spots that he hits at least three days a week, all to the fury of parents.

It is both his actions and inactions that vex law enforcement officials here, who, while suggesting that they keep an eye on Mr. McClellan when they can, say they have no legal recourse against him.

“If you look at things he has posted, he clearly is a pedophile,” said Lt. Thomas Sirkel, who works in the Special Victim’s Unit of the Los Angeles County Sheriff’s Department.

“Has he acted on it? I can’t say,” Lieutenant Sirkel said. “But I’ve been in this business for 20 years, and I have never seen one who has not.”

Mr. McClellan, who is 45, refers to himself as a pedophile, but says he has never actually sexually touched a child, simply “embraced them in a nonsexual way, mostly in Latin American countries.” He says he has never been convicted of a sex crime, and law enforcement officials in Los Angeles say they know of no convictions.

A check of available public records yielded no criminal history for Mr. McClellan, including under another name he said he used. Mr. McClellan, who said he was adopted, said he changed his name to that of his birth mother several years ago.

Lieutenant Sirkel would not say whether his department had Mr. McClellan under surveillance.

“Why should I tell him about our tactics?” Lieutenant Sirkel said. But he added: “I’d like to know where he is at, what he is doing and watch him awhile. I think he is possibly a dangerous man. In my opinion, he is a threat to children in this community, and people in the community are real concerned about him.”

Two Web-based groups, Peachhead, which caters largely to mothers on the West Side of Los Angeles, and Booby Brigade, its counterpart across town, have been abuzz with chatter about “Jack” sightings, and some parents have taken to posting photos of him in parks, downloaded from the Web.

“This one really angered people,” said Linda Perry, who runs Peachhead, referring to Mr. McClellan.

Mr. McClellan has been somewhat elusive. He lives largely in his car, he said, although he says he occasionally rents rooms. Asked how he makes a living, he would say only that he lives off of “public assistance, the kind where you’re not allowed to work.”

The parental reactions somewhat mirror those in the novel and film “Little Children,” in which a community becomes enraged at the notion of a convicted sex offender living in their midst, and chase him down at every turn. Although Mr. McClellan is not similarly pursued, parents who recognize him at events often scream at him, he said, and he fears for his safety enough that he would not meet a reporter in a public place.

Law enforcement officials have clearly taken notice — one mother posted on PeachheadFamilies.com about her husband, a location scout for films, being asked to leave a park where he was using his camera. Mothers from Pasadena to Marina del Ray will soon gather to discuss possible legislative options, Ms. Thompson said.

Theirs will most likely be a difficult road. While posting pictures of children in sexual situations is a felony, posting them fully clothed in everyday situations is not, even in the context of sexualizing them by proxy, so to speak, First Amendment scholars said. Further, while inciting others to commit crimes can be illegal, it is unclear whether giving people links to children’s book fairs is criminal.

“It is an interesting case,” said Eugene Volokh, a law professor and First Amendment expert at the University of California, Los Angeles.

Professor Volokh cited a federal statute that bars the posting of bomb-making information on the Web, and suggested that a similar statute banning information that helps people find children to molest could be enacted, perhaps. But simply providing information about where children gather was not likely to constitute such a crime, he said.

In terms of children’s images, he said: “The general rule is pictures of people in public are free for people to publish. Now if it is without permission and the person is a child and he suggests the children are sexual targets, you can imagine a court saying this is a new First Amendment exception. But it would be an uphill battle.”

So for now, then, many Angelenos will continue to track and record Mr. McClellan’s every move. Ms. Perry of Peachhead noted that the city was full of convicted child molesters.

“At least we know who he is and what he looks like,” she said.

Alain Delaquérière contributed reporting from New York.
http://www.nytimes.com/2007/07/28/us/28pedophile.html





A Thaw in Investment Prospects for Sex-Related Businesses? Maybe
Matt Richtel

Except for the sexual twist, Friendfinder Inc. sounds like the quintessential investment prospect for venture capitalists. The company, based in Palo Alto, Calif., operates social networking sites that boast 140,000 new registrants a day, and $200 million in annual revenue.

But the company’s main site, Adult Friendfinder, helps people meet for purposes of having sexual liaisons. The content, including explicit photographs and language, has put off mainstream investors.

“Over the last 10 years, we’ve met with a dozen venture capitalists,” said the company’s founder, Andrew Conru, who holds a Ph.D. in engineering from Stanford. “The conversations end fairly quickly.”

Times and investment tastes may be changing. Mr. Conru said that in recent months he had received more sustained interest, and follow-up calls, from potential investors. More generally, mainstream venture capitalists and private equity funds are starting to show interest in companies that make and distribute pornographic entertainment and sexually related products and services.

Several former Wall Street investors are now specializing in marrying mainstream money with companies that offer such content or products. Separately, a handful of venture capitalists have already financed start-ups that receive a big chunk of revenue from making or distributing sexual content or products, and others are considering such investments.

Jimmyjane, a San Francisco company that sells sex-related consumer products including high-end vibrators (a gold-plated one sells for $250), has six venture capitalists among its investors. The company’s chief executive said he was close to completing a $3 million to $5 million round of financing with one or more funds — not merely individual venture capitalists but marquee funds.

“It will be a watershed,” said Jimmyjane’s chief executive, Ethan Imboden, formerly a design consultant to Nike, Motorola and other mainstream brands. He said the deal could be among the first major venture fund investments in an overtly sexually themed business.

The involvement of mainstream investors in such companies is still very much in its infancy, and even those with a vested interest in developing it say it may not evolve further. There are considerable hurdles, chiefly and simply the discomfort of many in being affiliated with products and services they consider immoral or that they think could tarnish their reputations.

In addition, investors are dubious that these companies can turn a sufficient profit to justify the risk. Pointedly, investors may find it tough to take sex-related companies public, or find big companies to acquire them, limiting their profit-making exit strategies. And the universities and endowments that invest in private equity funds and venture capitalists are not likely to approve deals they see as pornographic, investment bankers said.

But there are also some forces compelling greater interest, according to venture investors and investment bankers, like P. Holt Gardiner, a partner at Ackrell Capital, a boutique investment bank that focuses largely on the high-technology industries but has a growing practice in matching investors with makers and distributors of sex-themed content.

Mr. Gardiner said that investors were intrigued that the digital era is permitting a range of new distribution models — from the Internet to digital television — that are creating many opportunities to profit from making and delivering pornographic content. Those may include technical or payment infrastructure start-ups, like those that allow micropayments.

More broadly, Mr. Gardiner noted that there was an enormous flow of dollars into the venture and private equity business and that investors were looking for creative ways to put that money to work. He said sex entertainment companies could be purchased at a discount, because there was less competition from prospective investors driving up the price.

Investor reticence about the sex industry is changing notably, Mr. Gardiner said.

But he conceded that for the most part, the interest had yet to translate into many deals. He said that he had been involved in several discussions with venture capital firms that showed interest in a sex-themed company, did the due diligence, signed off on the deal, and then showed it to their limited partners (the foundations or wealthy individuals that invest through venture capitalists).

“Invariably, one of the limited partners balks,” Mr. Gardiner said. “It has happened four or five times.”

Mr. Gardiner said a key selling point in getting these deals done was to give the mainstream investors some public relations cover by repackaging the company in a more conventional way. For instance, he said, a company can still get a big chunk of revenue from the pornography industry but also branch out into mainstream business.

He cited as an example a company called Waat Media, which aggregates and distributes content to cellphones and has deals with several makers of explicit pornography, like Penthouse and the Vivid Entertainment Group. In September, Spark Capital, a mainstream venture capital firm, led a $12.5 million round of financing for Waat, but changed the company’s name to Twistbox Entertainment and packaged the company as a mobile content distributor.

Spark Capital declined to comment for this column, as did Twistbox, which remains the parent company of Waat Media.

Philip S. Schlein, a partner at US Venture Partners and among the venture capitalists who invested in Jimmyjane, has said that he believes investment in such enterprises will increase because society is becoming more open. Among Jimmyjane’s other venture investors is Timothy C. Draper, a partner at Draper Fisher Jurvetson. He did not return calls for comment.

Mr. Imboden, the chief executive of Jimmyjane, said what attracted venture capitalists was not anything unusual: the opportunity to finance innovative products that can change or take over markets. Their expertise can be valuable, Mr. Imboden said.

“They understand innovation in consumer products and branding,” he said.

Francis Koenig, a former hedge fund manager and now the chief executive of AdultVest, a small investment banking company in Beverly Hills focusing on the pornography industry, agrees that more investment dollars will appear thanks to the widespread availability of explicit content on the Internet.

“Accessibility breeds acceptance,” Mr. Koenig said. He has started two funds to invest in the industry, named the Bacchus and Priapus funds, but he declined to specify any deals his company had participated in.

Meanwhile, not everyone is convinced the interest among mainstream investors will make a long-term impact.

Paul Fishbein, president of AVN Media Network, a company that publishes information about the pornography trade, said the time was ripe for mainstream investment. But, he noted, the industry has historically attracted talk of mainstream investment that in the end has been mostly that — talk.

“For five years we’ve been talking mainstream, mainstream, mainstream,” Mr. Fishbein said of the pornography trade. “But it still sits on the periphery.”
http://www.nytimes.com/2007/07/27/bu...27venture.html





Site That Bills Itself as a Movie Reviewer Finds That Sex Sells
Andrew Adam Newman

In the movie “Knocked Up,” the character played by Seth Rogen has a get-rich scheme to start a Web site that features Hollywood nude scenes, but his plans are dashed when he learns that another site, MrSkin.com, beat him to the punch.

What’s bad news for the movie’s protagonist turns out to be good news for Mr. Skin, an actual site, which saw a 35 percent bump in new visitors in June, when the movie was released.

But “Knocked Up,” which had permission to feature the site, was not the first to notice it. Mr. Skin had revenue of $5.3 million last year, primarily though $29.95-a-month subscriptions. With more than 175,000 revealing pictures and video clips of about 15,000 actresses (yes, only actresses), the site drew 2.9 million unique visitors in June, according to comScore, the Web traffic tracker.

“We don’t care about cinematography or great acting or anything like that,” Jim McBride, who favors the title chief sexecutive officer, said on the phone from his company’s Chicago offices. “We’re concerned about the nudity — who’s naked, and what they show.”

Mr. McBride, 44, a former futures trader, made nude-scene compilations on VHS tapes as a hobby before starting the site in 1999. Today his privately held company has nearly 40 employees, and Mr. McBride, the majority owner, appears frequently on radio shows (including Howard Stern’s) to highlight the naughty bits on new theatrical and DVD releases.

Given that Mr. Skin is in the business of selling access to copyrighted material without permission, it might seem logical that the company would be mired in legal challenges, but it is not. Mr. Skin bills itself as a movie-review site — though one that assesses only starlet nudity — so Mr. McBride argues that the clips can be shown under the fair-use doctrine, which permits excerpting copyrighted material for the purpose of criticism.

That legal defense turns out to be moot, though, because the movie studios not only tolerate Mr. McBride but also court him by sending advance screeners of DVD releases.

“The movie companies aren’t stupid,” Mr. McBride said. “I’m a guest on radio shows at least 300 times a year as the expert on celebrity nudity in film. If I’m on the radio talking about a movie like ‘Ask the Dust,’ and telling guys, ‘You’ve got to check it out: Salma Hayek has a full-frontal at the 33-minute mark,’ it’s going to make guys want to rent or buy the movie.”

More than 75 movie companies — including Universal, Fox, Paramount and Lionsgate — regularly send advance DVDs to Mr. McBride’s company. And his subscribers buy hundreds of DVDs every day, said Brian Sokel, director of marketing at TLAvideo.com, which sells DVDs on the site. (He declined to provide precise figures.)

Mr. Sokel finds nothing untoward about selling a film solely on nudity.

“That’s why filmmakers and Hollywood put sex scenes in movies — because it sells,” Mr. Sokel said. “People have a problem with raw or open sexuality, but for our company and for Mr. Skin, it doesn’t have to be a demonized concept. This is normal; you’re not a freak for wanting to see a Hollywood star in a film be naked.”

Mr. McBride is the author of “Mr. Skin’s Skincyclopedia: The A-to-Z Guide to Finding Your Favorite Actresses Naked,” a 670-page book that includes (avert your pun-weary eyes) a “skindex.” Since its publication two years ago, it has sold 11,000 copies, according to Nielsen BookScan. “Mr. Skin’s Skintastic Video Guide: The 501 Greatest Movies for Sex & Nudity on DVD,” will appear in September.

Mr. McBride bristles at suggestions that his site is pornographic, since it features PG- and R-rated movies (and some NC-17 ones). That distinction helps it draw mainstream advertisers like film companies and National Lampoon.

The site’s membership is 98.4 percent men; members spend an average of 13 minutes at the site per visit.

“I’m sure there are many men checking it out only at work versus worrying about their wife seeing them view it at home,” said Mr. McBride. When he scanned subscribers’ e-mail addresses, “I see ‘.gov’ and ‘.edus’ all the time,” the e-mail domains for governmental agencies and post-secondary schools. “But it is an R-rated site, not a porn site, so hopefully men aren’t too embarrassed to tell their wives.”

Mr. McBride said his wife is copacetic with his livelihood. And he dedicated his first book to his baby daughter, writing: “I dread the day you figure out what Daddy actually does for a living.”
http://www.nytimes.com/2007/07/23/bu...ia/23skin.html





Barbie Gets Another Accessory: an MP3 Player and More Stuff on Her Web Site
Louise Story



First, Barbie had Ken. Now, Barbie has a docking station.

A new doll hitting retail shelves this week is familiar in many ways — she’s got outfits galore — but she also has some unusual features: this Barbie, who is smaller and less shapely than her standard namesake, functions as an MP3 music player.

And when her feet are plugged into the iPodesque docking station that she comes with, she unlocks pages and pages of games, virtual shops and online chatting functions on the BarbieGirls.com Web site.

The new doll is a roundabout way of charging for online content. Instead of asking young Web surfers to punch in their parents’ credit card numbers, BarbieGirls.com and other sites are sending customers to a real-world toy store first. Some of these sites (like the Barbie one) can be used in a limited way without purchasing merchandise — the better to whet young appetites — but others, like the popular Webkinz site, are of little or no use without a store-bought product or two (or three, or a dozen).

The trends that have brought about BarbieGirls, Webkinz and their ilk are clear: While sales of dolls, action figures and outdoor toys are down, electronics sales to children were up 16.6 percent over the last two years as of May, the latest month available from the NPD Group, a research firm that tracks retail trends. The total toy industry’s annual sales were up just 0.8 percent in May, compared with two years ago.

With children’s leisure-time habits shifting online, toy companies are responding with new products that can be construed as fun both online and offline. That Barbie in the docking station? Go to a physical store and buy her an extra outfit, and you get access to even more Web content.

Products like these represent a change not only in the design and function of toys, but also in how toy makers use their Web properties. Mattel, for instance, like many consumer goods companies, has until now treated Barbie.com, HotWheels.com and its 22 or so other Web sites as advertising forums, places to showcase toys with the hope that children will nag their parents for them. But now Mattel and others are trying to turn their sites into money-makers in their own right. Although BarbieGirls toys are just now hitting the market, Mattel has paved the way for them: about 3 million people have registered since April 27 on the BarbieGirls Web site, a virtual world where playing games can earn a visitor play money — “B Bucks” — that can be spent on the likes of miniskirts, tiaras or home accessories. And, that’s without Mattel advertising the BarbieGirls site, even on its Barbie.com home page.

Mattel’s new toy follows the success of Webkinz, a line of Web-savvy stuffed animals made by Ganz, which also sells various sigh-inducing (albeit unplugged) teddy bears. Each Webkinz comes with a number code that, once entered online, starts an “adoption” process and ushers the owner into a virtual world that amounts to a Second Life for the grade-school set.

More such products are on the way. This month Zizzle, the company that makes Pirates of the Caribbean toys (not to mention Lucky the Incredible Wonder Pup, perhaps the first stuffed Labradoodle) is introducing an online/offline toy. SpotzGirl.com is a bubblegum-pink Web site with games (that people can play free) plus a collection of girly images (pussycats, hearts) that can be made into round physical tokens.

How does one make them? With the help of the Spotz Maker, a new-age button-maker that will be available in stores for $24.99. Girls will be able to create jewelry, decorate picture frames and collect and trade their Spotz, which are sort of like charm bracelet tokens.

“Over the next few years, you’ll see a lot of companies finding ways to create products that are Web enabled,” said, Marc Rosenberg, chief marketing officer at Zizzle. “The monetization for us comes from the product, and not from the Web.”

The concept behind Web-connected toys is not new. In the late 1990s, a number of toy companies introduced physical goods that could be used to unlock online goodies.

One noteworthy attempt came from The Learning Company, an educational software company that was owned for a short time by Mattel. But concepts like physical telescopes that could zoom to far-away islands when aimed at an Internet-connected computer failed to take off, in large part because Internet connections were too slow.

But times have changed tremendously. “Kids look at video content or virtual content as their toys,” said Jessi Dunne, executive vice president of global toys for Disney. “There isn’t a distinction between — ‘That’s a toy’ and ‘That’s an online game.’ ”

These days stores routinely sell out of the $10 to $13 Webkinz — pandas, lions, hippos and other animals that unlock the online fun on “Webkinz World.” There, on the site, customers can play with avatars of their pets, shop for them using “KinzCash,” decorate their pets’ rooms, enter online tournaments and chat with their real-world friends.

“The Webkinz concept is still doing very well,” said Robert A. Eckert, Mattel’s chief executive, in the company’s second-quarter earnings conference call. “That phenomenon is real, and will continue to do well.”

So real, indeed, that the starter set for the BarbieGirls site — sold for $59.99 — will be one of this holiday season’s main Barbie products. Mattel plans to run some television ads for the product in the fall, but the site is expected to be the primarily driver of sales, said Chuck Scothon, general manager and senior vice president of girls, Mattel Brands.

“For girls to understand the level of detail, the level of content, truly the experience of BarbieGirls,” Mr. Scothon said, “we wanted to allow them to play on the site.”

Toy companies also may benefit from the Web by using it to provide add-ons to products. Toy makers could sell cheaper products with a base-level of features, then allow customers to log online to choose what custom functions they want to download, said John Rose, a senior partner and managing director at the Boston Consulting Group and leader of the firm’s Global Convergence Initiative.

Even as toy companies cash in, some media executives are wondering if they, too, might use physical products to generate new revenue for their Web sites. Neopets.com, for instance, a virtual world of whimsical creatures and games, draws more than 10 million visitors a month, according to Viacom, which owns it, and although T-shirts and other Neopet-related merchandise is for sale, it is not the main draw.

MTV, a Viacom subsidiary, has started marketing toys that relate to its Web content. Earlier this month, the network introduced a music video game, “Rock Band,” in partnership with Electronic Arts. The game allows up to four people to play along with various songs using physical instruments hooked into an Xbox 360 or PlayStation 3.

“We’re looking at it as more of an add-on. Can we do something a little bit extra or a little bit different?” said Mika Salmi, president of global digital media at MTV Networks, which includes MTV, Nickeolodeon, VH1 and other networks. “The idea of connecting experiences is very, very important to us, but the absolute model is not established.”

The Walt Disney Company, too, has gotten into the act. Last year, it introduced a digital camera that lets people download images of Disney characters from its Web site to their photos. Disney will introduce an analogous video camera this fall and has other online/offline toys in development, said Ms. Dunne of Disney.

“I think Disney’s a perfect example of where it will work,” she said. “We have an advantage as a media company because we have all this, where toy companies have to create content. That’s not necessarily their sweet spot.”
http://www.nytimes.com/2007/07/23/bu...23webtoys.html
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Bringing P2P File-Sharing Out of the Shadows
Andrew K. Burger

Peer-to-peer, or P2P, file sharing is an attractive way for people to create culture and interact with music and film. However, trying to suppress this phenomenon results in driving the technology underground. While this continues to eat away at the entertainment industry's bottom line, some in the industry want to rethink the role of P2P.

The growth rate for illegal downloading of copyrighted material via peer-to-peer (P2P) file sharing services slowed during 2006, while use of their legal counterparts picked up, according to recent research.

Nonetheless, open and walled-off P2P services -- so-called darknets -- remain the primary means of sharing and downloading music, videos, images and other copyrighted media. As they continue to pose a significant threat to established industry players and despite at times questionable efforts to suppress them, they will continue to be the favorite whipping boy for the music and film industries' antipiracy efforts.

Entertainment industry players must battle against the very nature of the media they produce and distribute. Music and film are shared experiences and new digital technologies enable them to be shared more widely and more easily than ever before.

Moreover, P2P is an attractive way for people to create culture and interact with music and film. Also, P2P technologies are key elements of recent advances in network computing. They are widely and legally used by developers in distributed and grid computing, as well as being an important mechanism in the creation of open source software. However, trying to suppress P2P technology results in driving it underground.

Growing Use

Out of 47 million digital music households in the U.S., one member from each downloaded, ripped, burned, played or uploaded online digital music last year, according to a report by the NPD Group. Some 15 million of the total number of households downloaded at least one music file from P2P sites, a slower 8 percent rate of growth than that recorded in previous years, which is notable given the growing number of digital music users, as well as increasing broadband access and use of digital video, according to Russ Crupnick, vice president and entertainment industry analyst for the NPD Group.

"Legal a la carte downloads were the fastest growing digital music category in 2006," Crupnick said. "Unfortunately, for music labels, the volume of music files purchased legally is swamped by the sheer volume of files being traded illegally, whether on P2P or burned CDs sourced from borrowed files."

The number of music files downloaded from P2P sites (5 billion) grew 47 percent year-over-year and still dwarfed that from authorized sites (500 million), which grew 56 percent, according to the NPD report.

The sheer size and ongoing growth of illegal downloads and file sharing doesn't bode well for authorized online music and CD sales .

"Even though there is significant growth in legal music downloading, much remains to be done by the music industry to protect the bottom line," said Crupnick.

To reduce the amount of P2P file sharing and other piracy, more antipiracy initiatives need to be crafted, he added. "Most of all, music studios should continue to nurture and support those who pay to download music, in order to reinforce repeat usage and continue to build on take rates," Crupnick said.

More Carrots or Sticks?

Some would disagree that more antipiracy initiatives are necessary. Instead, they would argue that established industry players would be better off using more carrots and fewer sticks in their approach to new network computing technologies, developers and music listeners.

"The music industry needs to exchange control for remuneration," Paul Hitchman, cofounder and managing director of the UK's Playlouder, told TechNewsWorld.

The previous model focused on controlling distribution and promotional channels to maintain prices and margins, he said. The new model requires rights owners to license widely and transparently across many platforms.

"However, to be successful this requires content owners to forsake control in exchange for monetization," Hitchman said. "The key here is to follow the consumer rather than battle against him or her, and to support and enable technical innovation as the route to growth rather than resist change in order to protect a failing business model."

Until the major entertainment companies accept P2P and offer comprehensive and simplified licensing regimes and incentives for this channel, there will be the likelihood that unauthorized content redistribution will proliferate, Martin C. Lafferty, CEO of the Distributed Computing Industry Association, told TechNewsWorld.

The licensing needs to include all participants in the distribution chain that touch the content and play a role in ensuring that only licensed versions are being redistributed.

"The file-sharing distribution channel needs to include, for example, ISPs as well as P2P clients," he explained. "Until this channel has been properly established so that the file, the application and the network are all coordinated, law enforcement activity will continue basically to be an ineffective exercise."

Shifting Tides

There is movement in this direction, even as music and film industry associations continue to take much heat from increasingly better organized opposition groups on the Web. They're constantly criticized for ongoing legal actions and lobbying to shut down P2P operations and hamstring free sharing of digital music and video.

Meanwhile, implementation of file sharing continues to experience steady growth in terms of number of users: some 12 million average concurrent users and nearly 100 million monthly on a cumulative basis, Lafferty noted.

The cross-pollination of talent and resources has grown between the entertainment and digital technology industries. In December, BitTorrent, which lays claim to being the world's leading peer-assisted digital content delivery platform, announced it closed on a US$20 million Series B financing. The lead investor: Silicon Valley VC Accel Partners.

"P2P companies, such as LimeWire and Brilliant Technologies, have recently attracted high-profile entertainment industry executives to take management positions," Lafferty noted.

Some of the most exciting developments in terms of adopting P2P technologies for licensed music and film distribution have come this year with the advent of peer-to-peer television (P2PTV). Among them, Lafferty listed services such as Babelgum, Joost and VeohTV, as well as new technology from Abacast and RawFlow, which provide scalable solutions for live P2PTV streaming.

"The potential rewards of working in P2P were best exemplified with Skype's acquisition by eBay, representing a multi-billion dollar value creation in the Internet telephony space. The same kind of value creation for several P2P companies will occur in the entertainment and information sector in the fullness of time," Lafferty commented.

P2P 'Overrated'

In two years, file-sharing has the potential to be 100 times as fast and enabled on every single device, not just computers, according to Gerd Leonhard, CEO of Sonific.

"To some degree, P2P is a bit overrated -- USB (universal serial bus) and IM (instant messaging) are much more widely spread than P2P, mostly because industry players are sitting on top of ISPs," Leonhard told TechNewsWorld.

People are sharing wireless networks and kids are flocking to IM -- and possibly abandoning e-mail, he said.

"They're using Skype and IM; this whole sharing thing is going to be completely crazy with mobile wireless broadband," Leonhard said. "You have to license the network."

Limitations should not be placed on computers and networks, he added.

"It has to feel like a free embrace, like water or electricity. ... There are much smarter ways of charging for service and content," Leonhard pointed out. "Initially, cable fees were $10; now they're $72, so the potential for up-selling is there."

If the sharing stops, it may kill the music business, he said.

"When the fan/user/listener stops engaging with the music, it's all over," said Leonhard. "Today, you urgently need a canvas for music not a one-way product (such as the CD)."

"We are very quickly nearing a point to where we are forced to dive into what I like to call 'Music 2.0' -- a new ecosystem that is not based on music as a product, but music as a service: first selling access, and only then selling copies. An ecosystem based on ubiquity of music, not scarcity. An ecosystem based on mutual trust, not fear," said Sonific CEO Gerd Leonhard.

The number of consumers downloading music from authorized sites could exceed that of peer-to-peer (P2P) users this year, according to research conducted by the NPD Group.

The growth rate of downloading of copyrighted material via file-sharing services may have slowed down last year to around 8 percent, according to NPD. However, the number of P2P downloads still dwarfs that from authorized sites by a factor of 10, as is seen in Part 1 of this series.

Moreover, P2P users are more active consumers. Limewire captured a 62 percent share of P2P downloads and the average Limewire user downloaded 309 music files in 2006, a 49 percent increase year-over-year. Similarly, BitTorrent and other torrent services also gained in popularity. A building trend, BitTorrent and other torrent sites have begun offering material for sale, the report authors noted.

Music 2.0

Digital media entrepreneur and Sonific CEO Gerd Leonhard put into perspective the state of play in today's music industry in a letter read at the London Calling conference in May.

For the past 10 years, technical and economic innovations have stripped away many traditions, social and economic hierarchies and monopolies in the music industry, according to Leonhard.

"If there is one thing we can say for sure, I guess that would be that it's now showtime: The music industry is finally reaching a major inflection point ... 10 years after the first dot-com ventures shook the ground," he says.

CD sales are down between 20 percent to 40 percent from last year, and digital sales are not making up the difference, Leonhard explains.

"We are very quickly nearing a point to where we are forced to dive into what I like to call 'Music 2.0' -- a new ecosystem that is not based on music as a product, but music as a service: first selling access, and only then selling copies. An ecosystem based on ubiquity of music, not scarcity. An ecosystem based on mutual trust, not fear."

Turning It Up

The UK's Media Services Provider (MSP) is among those at the leading edge of the emerging music as a service movement. The company's Playlouder Internet service provider (ISP), expected to launch this fall, will offer subscribers broadband network access along with unlimited access to licensed digital music, online communities and the ability to share music files legally.

"What Playlouder has done is take what the vast majority of digital downloaders are already doing -- such as file-sharing -- and bring it within a licensed network environment," Paul Hitchman, company founder and managing director, told TechNewsWorld.

The company optimizes the consumer experience by making downloading easier, more reliable, faster and legal, he said. The Web site will combine social networking and community tools, music discovery and recommendation tools and audio and video streaming.

Playlouder is a next-generation "licensed network" model for ISPs, one in which network access is bundled in with other services and where digital rights management is built into the network itself rather than audio files, according to Hitchman.

Bundling Access and Services

In the first generation, P2P file-sharing helped drive broadband uptake. However, providing ubiquitous broadband access is now an expensive cost to ISPs, and they aren't adding to or deriving any value from growing volumes of digital music and video content, Hitchman pointed out.

"The next generation is about bundling access with other services. This is clear from the strategies of players such as Carphone Warehouse, BT, Sky and Virgin Media," he said.

Playlouder's aim is to be the leading provider of the broadband music service bundled with other services such as VOD (video on demand), IPTV (Internet protocol television) and VoIP (Voice over Internet Protocol), said Hitchman.

The result is a platform that optimizes the user experience while making access to and sharing of content both secure and accountable, he explained.

"This is a huge progression from the current DRM (digital rights management) models and gives consumers far more choice and flexibility, as well as returning fair value to rights owners," Hitchman noted.

A Change of Mindset

Hitchman and Leonhard are among a growing group of digital media entrepreneurs developing and advocating what amounts to a paradigm shift that may form part of the commercial foundation for the global music industry going forward.

"This change of mindset will enable the music industry to grow and enter a new age in which innovation is encouraged and facilitated and music forms the raw material for a wide range of services. The music industry will in turn receive revenues from this multiplicity of services and that will generate growth," Hitchman commented.

Achieving this requires shifting away from thinking about music as a product to thinking of it as a service, he elaborated.

"Under the product model, what is important to content owners is to maintain the unit value, the price, of music products. Under the service model what is important is the average revenue per music customer. If the average revenue per user is rising, then it doesn't matter if the revenue per unit is falling."

Control of distribution is no longer possible -- digital TV companies like Joost are embracing this, Leonhard told TechNewsWorld. "It's not about controlling distribution, rather controlling people's time and attention," he said.

Promising Signs

Playlouder is seeing welcome signs of such changes taking place.

"Firstly, the music rights owners are licensing more and more services and are seeing revenue growth in digital as a result. Secondly, EMI was the first major to break ranks and license downloads in the MP3 format. Playlouder MSP itself is securing license deals with most rights owners -- Sony BMG and EMI of the majors so far, with more deals to be announced soon," Hitchman reported.

P2P services, such as Azureus, iMesh, Qtrax and Vuze, have licensed music and film content from major record labels and film studios, and are pioneering a variety of new business models that combine advertising-supported, free-to-the-end-user, flat fee subscription and on demand paid downloads, noted Martin C. Lafferty, CEO of the Distributed Computing Industry Association (DCIA).

"One of the most promising approaches has been developed by Intent MediaWorks, which distributes licensed copyrighted works, often free ad-supported, directly into the search results for virtually all the major open P2P applications as well as other high-traffic portals," Lafferty told TechNewsWorld.

Intent MediaWorks is serving nearly 1 million legal file downloads a day and is adding about 70,000 files each week to its platform licensing agreements. "We should be at 3 million downloads per day by the end of the year at this pace," marketing director Jeremy Porter told TechNewsWorld.

"Intent works with legal content owners to distribute files in P2P networks, and helps advertisers sponsor content at the file-level so their ads appear with the content consumers are downloading," he explained.

Ongoing Campaign Against Piracy

Despite such positive progress, P2P file-sharing services continue to plague music and film industry executives, and continue to bear the brunt of at time questionable anti-piracy efforts.

Prompted by a group of entertainment giants including Time Warner, Viacom, Fox, Sony, NBC Universal and Disney, police in Sweden recently threatened to block access to P2P service provider The Pirate Bay, whose users account for an estimated 35 to 40 percent of the nation's Internet traffic, and put it on a list of child pornographers, based on claims that have not been divulged to The Pirate Bay or to anyone else.

"This is not worthy a democracy governed by law. The people who have made this decision cannot remain in our judicial system", asserted Rick Falkvinge, leader of Sweden's Piratpartiet political movement. "It also undermines the legitimacy of the child porn filter. This filter is not intended for subjective use by government officials to close down undesirable sites which do not break any laws."

Because anti-copyright infringement enforcement initiatives, there has been an increase in so-called "darknets," or closed P2P applications that make it difficult for outsiders to access and also hard for content rights holders and their agents to determine if there is copyright-infringing activity taking place, DCIA's Lafferty commented.

"The positive benefit of such innovation, ironically, is in data protection typically in enterprise deployments," he said.
http://www.technewsworld.com/story/58416.html





RIAA Says Lawsuits Cannot be the Complete Answer to Music Piracy
Bruce Gain

The Recording Industry Association of America’s massive lawsuit campaign to crack down on music pirates has generated a lot of bad PR, while any good that has come out of it remains controversial at best. In a recent conversation with TG Daily, the RIAA acknowledged that suing potential customers “was not the answer,” while adding that the lawsuits were “a necessary part of a larger equation.”

“Litigation tends to generate more heat, friction, and headlines,” Jonathan Lamy, a spokesman for the RIAA told us. “What is the most important anti-piracy strategy is aggressive licensing and offering great legal alternatives. That is what our member companies obviously do and our job is to complement that, which is the most important thing to do to win over fans.”

According to the latest statistics from the RIAA, there were over 7.8 million households in March 2007 in the U.S. that illegally downloaded music versus 6.9 million households in April 2003, when the litigation campaign began. However, while this number suggests that the lawsuits have been counter-productive there is also the fact that the broadband penetration rate in the U.S. has also more than doubled since 2003.

Still, whether or not the litigation has had much of an effect in mitigating piracy, the benefits for society, as well as for the recording industry, remain debatable.

“I don’t think [the litigation] has made a meaningful dent in how much piracy goes on among American young people,” John Palfrey, a clinical professor of law at Harvard Law School and executive director of the Berkman Center for Internet and Society. “And I think it continues to represent a signal that the recording industry is out of step with the future, and frankly out of step with the present as well [….] But it is more importantly, I think, a distraction from finding the way forward in a digital age.”

Besides its questionable benefits, the RIAA’s lawsuit dragnet that has involved over 21,000 legal actions in the U.S. since 2003 and has ensnared some innocent parties in its wake.

One such person wrongly accused was Tanya Andersen, a single mother who is also disabled, against whom the RIAA only recently dismissed its lawsuit against her for allegedly having shared 1400 pirated music files.

The claim was dismissed with “prejudice,” meaning that the RIAA or the record companies it represents must pay her attorney fees.

But the RIAA’s dismissal of the case came after more than a year after Ms. Andersen first received a letter from RIAA lawyers claiming she was liable for a minimum of $750 for each of the 1400 songs they claimed she downloaded.

Ms. Andersen, who had never heard of the songs and artists she allegedly pirated then offered to surrender her computer as proof that she had not downloaded the files. But instead, the RIAA’s continued to litigate with same zealousness as if it were going up against a large corporation.

Ms. Andersen’s eventual legal victory is but one example of other dismissals of RIAA cases, which were dropped after over a year of depositions, trials, and numerous other time-consuming procedures the defendants were subjected to but not compensated for.

Federal judges have rejected RIAA’s legal claims in federal courts in Oklahoma, New York, and in Michigan.

Some of the defendants are taking a more aggressive approach in fighting back. Defendant Suzy Del Cid in Florida recently filed a counter claims against UMG for computer fraud and abuse, extortion and trespassing when her computer was accessed.

As far as bad PR goes, it does not get much worse when a multi-million dollar legal machine wrongfully attacks single mothers with limited financial resources to fight back. But instead, the RIAA has extended its litigation campaign.

The RIAA has begun to target college campuses, much to the ire of university officials and some politicians. In what it called a “fifth wave” of pre-litigation letters, the RIAA said its lawyers have sent over 395 letters to 19 universities demanding settlement fees. The organization also has asked universities to forward copyright infringement complaints to students for file sharing on school networks to; reactions are pouring in and not all universities said they will follow the idea: Harvard was among the first that said that it will ignore the RIAA’s request. Instead, more and more universities are beginning to enforce their own piracy policies: For example, the University of Kansas is reported to have implemented a new copyright infringement policy for the students, which says that students who are caught downloading copyrighted material will lose their privileges on the university’s residential network “forever”.

From the view of the RIAA, it is unlikely that the litigation will end anytime in the near future.

“They know what they are doing. They are not going to wake up one morning and say ‘oh, gee, there is a new method of distributing music,’” Lory R. Lybeck, Andersen's attorney from Lybeck Murphy of Mercer Island, Washington, said. “I think what it is going to take is for the artists and the general public to say ‘you guys are dead. You’ve been dead for a long time.’”

The settlement fees are certainly not paying for the litigation costs, either, Ray Beckerman, a New York-based attorney with Beldock Levine & Hoffman, who has represented defendant clients against RIAA claims, said.

“It has cost them more than they've collected,” Beckerman said in an email. “They've accomplished nothing, other than to create a whole class of people who are boycotting their product.”

In fairness, the majority of the 21,000 IP addresses targeted for illegal file downloads in the U.S. are probably at fault in the legal sense. Litigation is by no means the only strategy the recording industry employs to thwart music file pirating, either.

“No one relished having to take all these actions, but they have undeniably played a big role in raising awareness that unauthorized file-sharing is illegal and they have helped contain levels of file-sharing,” a spokesman for the International Federation of the Phonographic Industry - the international equivalent of the RIAA – wrote to us in an email. “But legal actions are in no way a strategy in isolation - making great music services available is key, as is public education. At the same time it’s recognized that, effective as they are, lawsuits against illegal-file sharing are only the second best way to stop mass piracy on the internet.”

Instead, the recording industry’s main emphasis is more focused on the ISPs, the spokesman said. “They have the ability and the opportunity to make a huge difference simply by enforcing their terms and conditions against people file-sharing on their networks and disconnecting infringers,” the International Federation of the Phonographic Industry said.

But while statistic show that the RIAA is getting its message across that downloading music files without paying for them is illegal, many do not deem sharing files from a CD that they or someone else has paid for as stealing or morally wrong. People know that smoking marijuana or driving above the speed limit without endangering the welfares of others, are against the law, for example, but people do not necessarily see these acts as immoral.

“[Studies] show a continued sense on the part of American young people that file sharing may be wrong on the law but it is acceptable as a moral matter,” Palfrey said.

The artists who stand to lose money are often hardly advocates of the massive litigation campaign, either.

Rick Mason, for example, the drummer for Pink Floyd recently told this writer how he believed that artists need to be paid for their work, but that lawsuits were the wrong approach.

Instead, artists’ compensation should increase with new music distribution methods, Lybeck said. “They should let the music authors actually share some of the profit, which [the RIAA] has had a strong hold on in the distribution scheme for 50 years,” Lybeck said. “There is a whole new distribution capability, and the [RIAA] guys are not needed--and they know it.”
http://www.tgdaily.com/content/view/33022/120





Under duress

Morpheus Debuts Public Service Announcements Raising Awareness of Potential Risks Associated With File-Sharing; Emphasizes "Care What You Share - Share Responsibly"
Press Release

P2P powerhouse Morpheus' national campaign encourages and reminds users of file-sharing software to share responsibly with PSAs. The Share Responsibly campaign aims to better inform users who might be carelessly and inadvertently sharing personal documents such as tax returns or that government or corporate employees might be haphazardly using file-sharing software for personal use, thus unwittingly making sensitive or even classified information available if they haphazardly designate what files and folders are available for sharing, despite many clear instructions and warnings about this that currently exists within Morpheus.

In an attempt to further address the concerns expressed today during the U.S. House of Representatives Committee on Oversight and Government Reform Hearing on Inadvertent File Sharing on P2P Networks held in Washington DC, StreamCast Networks, Inc., developers and distributors of the popular file-sharing and search software, Morpheus, announced today the launch of a new national campaign that encourages and reminds users of file-sharing software to share responsibly.

"Care what you share - share responsibly," one of the tag lines of the campaign, summarizes the clear recommendation contained in the new public service announcements (PSAs) links to StreamCast's updated policy and information on safeguards that can be applied to further protect a user's private documents from being inadvertently shared.

Protecting your privacy by caring what you share and knowing where your downloads go is a powerful way to provide users with information and the motivation to share responsibly.

"Like our campaign says, 'Share responsibly,'" StreamCast Networks' CEO Michael Weiss said. "Protecting your privacy by caring what you share and knowing where your downloads go is a powerful way to provide users with information and the motivation to share responsibly."

The Share Responsibly campaign aims to better inform users who might be carelessly and inadvertently sharing personal documents such as tax returns or that government or corporate employees might be haphazardly using file-sharing software for personal use, thus unwittingly making sensitive or even classified information available if they haphazardly designate what files and folders are available for sharing, despite many clear instructions and warnings about this that currently exists within Morpheus.

"It is important that users of Morpheus are provided with accurate information as to the many safeguards, including consumer disclosures and software design, which Morpheus has and continues to make available to users of its software."

Informing users to better understand how P2P and file sharing technology works can help users protect their data securely and is one of the goals of StreamCast's recently released, Morpheus Consumer Disclosures Guide, which outlines and illustrates how the Morpheus client software operates in providing consumer disclosures in efforts to make readily available to users of the software information regarding installation, configuration, privacy, data security, confidentiality and sharing of inappropriate file content.

"These new public service announcements speak clearly to parents, students, company executives and any casual user of the software about making sure they are sharing responsibly, which may help encourage more users to initiate and continue to use file-sharing software exclusively for non-infringing purposes while protecting concerns of privacy and security," continued Weiss.

The PSAs will reach millions of user impressions daily and seek to build awareness while highlighting the consequences of file-sharing. Through the tag line "Share Responsibly," the PSAs put forth a message that is both empowering and compelling.

The campaign includes banner PSA ads to Morpheus users that communicate the importance of mitigating the risks of file-sharing. All of the PSAs include the tag line along with links to more detailed information. Additionally, users will be alerted with a message during the install process of the software that informs them with greater information on which folders and files are being shared while providing users with easy options to edit these folders.

The PSAs are available at http://www.morpheus.com/ShareResponsiblyAdCampaign.html Morpheus' updated policy and information on safeguards, Morpheus Consumer Disclosures Guide, is available at http://www.morpheus.com/disclosure.asp
http://www.prweb.com/releases/2007/7/prweb542380.htm

It’s one thing to educate users but this is a sorry example of bad law from a bad court and a company running scared. Still, they managed to hold out for over five years – Jack.





Fingerprinting the Web

A growing number of major players in Web video and music are turning to “finger printing” content protection technology and services supplied by Audible Magic to secure their assets. In mid-March, Viacom International’ MTV Networks acknowledged it was working with Audible Magic, joining 20th Century Fox-owned MySpace, Sony Corp.-owned Grouper, GoFish, Break.com,, NBC Universal, the four major music labels, hundreds of independent content owners and other social networking and user-generated content (UGC) sites in the use of Audible Magic’s CopySense technology.

Founded in 1999, Audible Magic offers technology and services that could help settle a burgeoning showdown over monetization of commercial content on UGC sites. Audible Magic encapsulates and stores core content elements – finger prints – along with content rights rules to provide a ready means of identifying instances of forbidden usage. With this technology media companies enjoy some greater assurance that UGC sites can prevent abuses by tapping into the finger print identifier and DRM database online and to block unauthorized uploads of copyrighted content “into the wild.” Further, the company has developed a CopySense Plug-In for P2P developers; CopySense Network Appliance for business, education and government networks; and RepliCheck for the media manufacturing industry.

Less noticed, the company has the potential to shake up assumptions about DRM (digital rights management) by enabling content owners to register unique fingerprints for each piece of video or audio along with associated DRM permissions and other business rules in a database that now counts more than five million works. This model allows DRM to effectively reside in the Internet cloud, rather than in DRM wrappers enveloping each piece of content.

In this broad discussion with ScreenPlays senior editor Peter Lambert Audible Magic co-founder, president and CEO Vance Ikezoye explains that his company’s intent is not only to enforce copyrights online, but to facilitate unfettered business model experimentation that he believes is destined to create “the next cable TV.”


ScreenPlays: Can you give us a short description of what your technology does?

Ikezoye: At a 30,000-foot level, what our technology does is called finger printing. As opposed to watermarking, finger printing measures things resident in the content itself, either the music or the video, rather than embedding some kind of information in the file. So the way we operate is we take known content, and we take these measurements of the content that are robust through format changes – in the case of video, whether it’s 16 by 9 or 4 by 3, or in audio, whether it’s an MP3 file or a CD.

We measure some of the essence of how that video or song is perceived. We take those known samples and put them into a database along with the information about that piece of content. Then later on, with any piece of unknown content, we can take those same measurements and look them up in the database to compare it with known content.

SP: What does it mean to measure the essence of how a piece of content is perceived?

Ikezoye: If you think about MP3 as a compression algorithm, MP3 seeks to preserve the characteristics of a piece of audio and what people hear, and MP3 encoding throws away information that humans don’t hear. They may throw out really high or low frequencies. So they get to the things that represent most of the information, and that’s why when you have MP3 compressed audio, the file can be one-tenth the size of the uncompressed file. And you can really tell the difference quality-wise, but in essence you know it’s the same song.

So just take that down to the absolute extreme, and think about it in terms of the least amount of information that still can be contained in a compressed file and still communicates that this is that song. That’s what we do. A song that may be 30 megabytes as a full WAV file may be 3 megabytes as an MP3 file. Our finger print is probably more like 10 to 20 kilobytes. So it’s very small, yet it can very much uniquely identify a piece of music so uniquely that we can distinguish between a Pearl Jam performance of a song in a Berlin concert from the L.A. concert performance of the same song.

SP: Given your company name, does your technology use only the audio component to track video?

Ikezoye: Yeah, the name is kind of misleading these days. We have implemented the use of our audio fingerprinting to identify the soundtrack of video, but we’ve also had in development video imaging finger printing technology that we’re conducting tests on right now. So I guess we should be changing our name to Content Magic or Media Magic.

SP: But for the most part, I imagine that, in video, when you say ‘soundtrack,’ you refer to dialogue as well as music?

Ikezoye: Yes, and in fact, we believe that the soundtrack is probably 80 percent of the problem. You could identify most pieces of content uploaded that have both the video and the soundtrack. Now it doesn’t cover the place where you have a different image overlaid on the soundtrack or where people put a different soundtrack over their home movie, as an example.

But from the first pass of monetization, and from a copyright point of view, you want to define where the video and the audio are synched up.

SP: Your Web site suggests that, with your technology, there’s no need for DRM. Why is that? Because isn’t this an after-the-fact misuse of content tool, as opposed to rules that allow use?

Ikezoye: I think, first, in the grand scheme, we’re complementary to DRM.
DRM is a mechanism where you can wrap a piece of content and have within that wrapper some business rules pertaining to use and to enable business models. The downside of DRM is having to wrap, and once you’ve unwrapped, it’s out in the wild and you no longer have any ability to apply any kind of business rules.

As you know, there’s a lot of content out there that’s not wrapped. In fact the majority of content out there is not wrapped. So what we can do is apply those same kind of business rules to content that’s in the wild. If a piece of content shows up on MySpace, a copyright holder could have the ability to say, ‘When that shows up, we don’t want it published on whatever that site is.’ We can apply the same business rules after the fact, or where content may be user generated.

People think about DRM in two aspects: from an anti-piracy point of view and from a desire to apply business rules. We can play both of those roles on the work itself, rather than the file. What I mean by that is, if a file is DRM wrapped, you could have that same file that’s not DRMed, and we could apply the rule to both, whereas with DRM wrapping, the content has to go out of the box with DRM on it.

SP: So in the case where you’re applying those rules to the unwrapped content, in terms of enforcement, can you actually keep the piece of content from getting distributed? Or is it a matter of catching it after it’s distributed, so that, like watermarking, it’s a forensics tool?

Ikezoye: It depends. Where we can be implemented in a peer-to-peer client like iMesh, for example, if content shows up, post-release – post-emergence into the wild – we can apply that rule that says, ‘This is a copyrighted song; the copyright holder doesn’t want this to be out in the wild; so block it from being copied or downloaded or uploaded.’

It’s similar in a MySpace case. Say someone had a pre-release song, and they wanted to put it on their own MySpace page, we could block it because we’d say, ‘Oh, this is pre-release, it’s owned by EMI, don’t let this be published on the MySpace platform.’

So you can implement some of the same types of controls as DRM without having to deal with a wrapper. To me, the reality of the world is that everything won’t be DRMed, and there will always be content that has been unlocked.

SP: Now, you provide services as well as products, and I gather a key part of that is registration of content in your database.

Ikezoye: Yep. We allow copyright holders – either studios or music labels or publishers – to register their content in the database along with their business rules. Today, on the music side, we have all the four major labels registering content. Most of it is pre-release. We have hundreds of independents who are registering.
And by the way, registering a business rule could be, ‘Let it be used. Let it be distributed.’ It doesn’t always have to be ‘Take down.’ Small garage bands could just say, ‘Whenever you see this piece of content, let it be up on every MySpace page.’

And then we’re allowing studios to register film or television content in the database as well.

We then provide services to sites like MySpace and Grouper to identify content being uploaded, to filter content being uploaded, and to apply these business rules.

SP: How are you helping MySpace, and at what stage are you in with that pilot or deployment?

Ikezoye: I believe we are in production there, doing screening and uploading. The only thing pilot about it is the process of building the database. Right now it’s only NBC Universal and UMG, so we haven’t put in all the content from the other labels. We’re starting small and building so that we make sure this all works within their infrastructure.

So the system and the service are ready to scale. I think we’re just working with the copyright holders on designating what goes into the database.

SP: So what is the process that happens with screening and uploading? How does the service work as part of your offering?

Ikezoye: We give some software to MySpace, and as part of their content ingestion process, when users upload files, they process it with our software, and then that software calls home to the database and says, ‘What is this?’ We then tell them what it is in a business rule. We host all of the databases, but the content never leaves the site.

SP: So I’d imagine you’re building a substantial data center presence yourself.

Ikezoye: Yes, if you’d see my collocation bill every month. We’re buying servers and building a good presence in a collocation facility. It needs to be Class A, fully fault-tolerant, because there are a lot of files going up as part of the process for a MySpace, so you can’t slow it down. From the consumer’s point of view, if you upload something, MySpace doesn’t want it to sit there for two days before it shows up on the page.

SP: What other notable customers or partners have you garnered on the portal side—the MySpaces or any of these emerging peer-to-peer distributors?

Ikezoye: Some of announced places – we’re in the peer-to-peer space with iMesh (www.imesh.com). On the Web 2.0, community front, we’ve announced MySpace, Grouper, and we have just announced GoFish. There are a few others we’ve signed but haven’t announced, and there are a lot more in process.

SP: I’d imagine there’s a two-way process: the more you establish yourself with the MySpaces and Groupers, the more ready the content owners are to look at your technology?

Ikezoye: Yeah, and I think it’s more than just ‘look at’ now. We’ve reached the point where people have confidence in the technology and confidence in our role and how we provide these services – a trusted third-party status. Now it’s a matter, frankly to me, more of the mechanics of ensuring that there’s a mechanism to get content into the database with the business rules.

The business rules are just as important, because you might want to vary the business rules from site to site. You might have a video that you allow an exclusive on MySpace and a month later on Grouper or somebody else. You’re going to start seeing more of that in music and film I think.

As you’ve probably seen, there’s quite a bit of creativity on some of these sites. You could easily see, at some point, that you’d have some sponsorship by some of the copyright holders of some mashup, and you give some exclusivity for using that content to one site versus another. And frankly, you start registering that kind of mashup in the end too.

[Several days after this interview, CBS Sports verged on this kind of arrangement, sponsoring an NCAA Basketball channel on YouTube, providing highlight clips and encouraging fans to interact around them.]

SP: Can you say whether you are in talks with Google/YouTube?

Ikezoye: We don’t generally comment on things that happen or don’t happen, so you need to talk to them about that.

SP: A February New York Times article quoted YouTube as saying that “On YouTube, identifying copyrighted material cannot be a single automated process.” Are you making that claim in the first place?

Ikezoye: I don’t think I’m making that claim. What it always comes down to is helping to enable business models between the copyright holders and these new sites and services, especially UGC (user-generated content) sites. And getting down to some business arrangement, there will always be discussions of guidelines for what’s allowable and what isn’t, what you can get paid on and what you can do and can’t do. That is primarily a business discussion.

Once that business discussion occurs, then I think the technology is in a place where it can help enable those business models and the tracking and computation that’s required to make the models occur. Now, complete, thorough identifying of every piece of content coming up and where it comes from, that may happen in the future, but I don’t think that’s the issue today.

Today the issue is how do we prevent straight out piracy and how do we prevent taking a movie and putting it up on one of these sites, and more importantly, how do you enable the copyright holder, if they choose, to get paid. From that point of view, we solve a lot of that problem. A lot of people in the technology space think that you have to be, out of the chute, a system that solves every problem. The detractors always say, ‘You don’t solve this or that,’ but there are very few systems that solve everything.

Stepping back, I think our existence allows businesses and these UGC sites to actually do a business deal, instead of ending up in a world of legal actions and takedown notices.

SP: The Electronic Frontier Foundation has published some critiques of your CopySense appliance and charges that it’s easily defeated with SSL. How are you responding to that claim?

Ikezoye: That’s with our network appliance rather than the implementation we have on sites like MySpace. We have a network appliance that can be installed on a university network that can control file sharing to filter and prevent copyrighted works from being traded. EEF says that if it were an encrypted peer-to-peer, we can’t do that copyright filtering, and that’s a correct statement. However, most P2P today is not encrypted, and secondly, it goes back to what I was saying about addressing a lot of problems with technology, as opposed to resorting to pure legal issues. That’s kind of my theme: now we can start talking about how to take some proactive measures, instead of sitting back and being reactive.

SP: Joost, Amazon Unbox, Netflix, BitTorrent and others are creating a wave of online video service launches, a lot of them P2P. a lot of them offering high-value content. Is Hollywood at a tipping point in terms of rights protection confidence, or is all this just more experimentation for the time being?

Ikezoye: I think, if you look back, there is real interest in trying to work with these new business models to see if there can be a win-win. I don’t know if anyone on either side is completely convinced of its success, but we need to applaud people for trying and having a dialogue about it.

If you think about what happened with the recording industry six years ago when P2P first came out, it was all legalities and trying to shut them down. Today there’s a lot of discussion about trying to cut deals and share revenues and use advertising as a mechanism to get paid. I think those are all going in the right direction toward willingness and openness to be innovative. You see the studios especially involved in a lot of different content delivery networks, Web 2.0 sites. It’s very proactive in trying to explore and co-develop new biz models.

SP: This may go to what you said about no one solution fixing it all, but should anybody even be looking for a tipping point in terms of aggregate technologies – DRM, encryption, finger printing, watermarking – that together make the marquee copyright holders confident that they can really unleash their content?

Ikezoye: I’d like to claim credit for our technology playing that role. I think it’s a bit of that: there’ a sufficient level of confidence in the technology and this kind of solution. The other part of this tipping point, I believe, lies with these new mechanisms for distribution. They’re both converging in a way that’s a positive. It’s not one by itself. Maybe it’s the content owners’ willingness to experiment with these things that has caused more people to create more business models and new mechanisms. I don’t know which is the cart or horse.

All I can say is that I see it coming together right now. You know that some of these business models are not going to succeed, but some of them are going to be really successful. Who would have guessed in the early days of cable TV when it was community antenna retransmission of broadcast stations that it would become what it has?

SP: You’ve focused on UGC sites, but there’s a lot of innovation in P2P, and Joost and others will have Web 2.0 characteristics, with posting and sharing and communicating. Do you have a role there, as well as in the user-generated, social sharing networks?

Ikezoye: Potentially. It’s not the first place we’re focused, but any time content is delivered over a pipe, there will be some needs for either compliance or auditing or even revenue generation from advertising, and to know what the content is and to track what’s being used. That’s the role we’re playing: what is it, and how many times is it being used? I can’t say we have any answers for a download model like a BitTorrent.

But over time, user-generated, user-manipulated content is just too powerful not to go mainstream. It’s going to change the way the business is.

SP: Because it’s so personalized, because it embodies so much user control?

Ikezoye: First, the move from physical and analog content to digital means everybody’s PC can become a video workstation. Secondly, I think there is a tremendous amount of creativity. You’ve seen Chevy hold a contest for commercial [advertising] production. Third, this whole phenomenon of communities is one that has legs, and community is about identifying communities. The more you can use content to form and serve communities, that’s what you’re trying to accomplish.

SP: There also seems to be an explosion in turnkey video publishing services, and that seems to be spawning all kinds of new online video producers and programmers with niche content and channels. How much interest and business are you getting from that realm, as opposed to established old media or the bigger video or social networking portals?

Ikezoye: It is a mix. We’ve got 75 to 100 people talking to us in the active funnel right now. There are sites that are trying to cultivate the new creator communities. They’re interested in the problem of one of these creators trying to upload commercial, copyrighted content. Secondarily, where it is unique, commercial content, those creators want to make sure it’s protected, tracked and identified later on other sites.

SP: Do you believe there’s a sense among old media that, even without completely settled protection issues, this new democratized creativity and competition means they have to be there or be left behind?

Ikezoye: I think if you go through our list, we have lot of old media companies talking to us. Fox owns MySpace. Sony Pictures bought Grouper. That’s old media recognizing the power of these new areas as creative platforms, as well as distribution platforms.

SP: Are consumer electronics companies as big a target for you as Web service providers and content owners, and how do you work with CE companies?

Ikezoye: We haven’t focused on that a lot up till now, but clearly there’s some opportunity for us. The first place in CE will probably be the evolving [mobile] phones, where it’s a community network and where multimedia content is being consumed or traded or copied. That’s an area where we’ll likely be active. Once you build that capability into business rules in the database, that’s an easy transition.

SP: Is Gracenote a direct competitor to Audible Magic? And are there others?

Ikezoye: I think their focus has been in the CE device, identification services for radios and PC applications, and we really haven’t played there. There are people who use fingerprinting to do other things.

The point is that it’s not the technology that Audible Magic has, though it’s an important component, but it’s the solution and role we provide for both the sites like MySpace and the copyright holders. We provide an independent third party that can be an intermediary or bridge between the two, and the technology is just a piece of that.

If our technology is being used to track usage for compensation, you frankly don’t want that role sitting with the site, and equally you don’t want it owned and run by the copyright holders. You don’t want either fox to be responsible for counting the chickens.

SP: One last question for you. Is there something overlooked, something you find yourself evangelizing about?

Ikezoye: I’m always of the position that people tend to overestimate the amount of change over the next two years and underestimate it over the next five or 10 years. I think we’re just at the beginning of new businesses and new business models around content that we can’t even imagine today. We’re just at the start of our ability to identify and recognize and classify and count content, and that is going to be a real critical piece of things going forward.

Over the next few years, a lot of models will blossom. Some of them are going to fall away. But what’s the next cable TV? That’s the question. There’s one lurking somewhere. Who knows what it is. I just hope to be part of it.
http://www.screenplaysmag.com/tabid/...evolution.aspx





Deep Packet Inspection Meets 'Net Neutrality, CALEA
Nate Anderson

Throttle me this: An introduction to DPI

Imagine a device that sits inline in a major ISP's network and can throttle P2P traffic at differing levels depending on the time of day. Imagine a device that allows one user access only to e-mail and the Web while allowing a higher-paying user to use VoIP and BitTorrent. Imagine a device that protects against distributed denial of service (DDoS) attacks, scans for viruses passing across the network, and siphons off requested traffic for law enforcement analysis. Imagine all of this being done in real time, for 900,000 simultaneous users, and you get a sense of the power of deep packet inspection (DPI) network appliances.

Although the technology isn't yet common knowledge among consumers, DPI already gives network neutrality backers nightmares and enables American ISPs to comply with CALEA (government-ordered Internet wiretaps) reporting requirements. It also just might save the Internet (depending on who you believe).

Ars recently had the chance to talk with executives from DPI vendors Ellacoya and Procera Networks about their offerings and how they are already being deployed around the world, and we got a look at the newest boxes on offer from each company. Their top-of-the-line products can set you back several hundred thousand dollars, but some of them can inspect and shape every single packet—in real time—for nearly a million simultaneous connections while handling 10-gigabit Ethernet speeds and above.

That's some serious horsepower, and when major ISPs deploy these products in their networks, they suddenly know a whole lot more about their users and their traffic. They also gain the ability to block, shape, monitor, and prioritize that traffic—in any direction. That makes it suddenly simple to, say, prioritize all incoming traffic from any web site that has handed over a briefcase stuffed with unmarked bills while leaving every other site to fight its way through the tubes as best it can.

It also becomes trivial to start blocking or actively degrading services that a company dislikes—like VoIP, for example. Not that this would ever happen. But that's not how the technology is marketed, and there's little evidence that it's currently being used this way. DPI is generally sold on the premise that network operators can control entire classes of traffic (P2P, VoIP, e-mail, etc.) on a group or per-user basis. Let's take a look at how that happens and what it means for both network neutrality and legal interception (CALEA) compliance.

Inspecting packets, deeply

The "deep" in deep packet inspection refers to the fact that these boxes don't simply look at the header information as packets pass through them. Rather, they move beyond the IP and TCP header information to look at the payload of the packet. The goal is to identify the applications being used on the network, but some of these devices can go much further; those from a company like Narus, for instance, can look inside all traffic from a specific IP address, pick out the HTTP traffic, then drill even further down to capture only traffic headed to and from Gmail, and can even reassemble e-mails as they are typed out by the user.

But this sort of thing goes beyond the general uses of DPI, which is much more commonly used for monitoring and traffic shaping. Before an ISP can shape traffic, it must know what's passing through its system. Without DPI, that simple-sounding job can be all but impossible. "Shallow" packet inspection might provide information on the origination and destination IP addresses of a particular packet, and it can see what port the packet is directed towards, but this is of limited use.

Shallow inspection doesn't help much with modern applications, especially with those designed to get through home and corporate firewalls with a minimum of trouble. Such programs, including many P2P applications and less-controversial apps like Skype, can use many different ports; some can even tunnel their traffic through entirely different protocols.

So looking at the port doesn't give ISPs enough information anymore, and looking just at the IP address can't identify P2P traffic, for instance. Even for applications like web browsers that consistently use port 80, more information is needed. How much of that HTTP traffic is video? Ellacoya, which recently completed a study of broadband usage, says that 20 percent of all web traffic is really just YouTube video streams.

This is information an ISP wants to know; at peak hours, traffic shaping hardware might downgrade the priority of all streaming video content from YouTube, giving other web requests and e-mails a higher priority without making YouTube inaccessible.

OSI layer model

This only works if the packet inspection is "deep." In terms of the OSI layer model, this means looking at information from layers 4 through 7, drilling down as necessary until the nature of the packet can be determined. For many packets, this requires a full layer 7 analysis, opening up the payload and attempting to determine which application generated it (DPI gear is generally built as a layer 2 device that is transparent to the rest of the network).

Procera explains the need for this approach in marketing materials, saying that "layer 7 identification is a necessity today when most client software, like P2P file sharing, is customizable to communicate over any given port to avoid traditional port-based firewalls and traffic management systems."

But how does this work? Data packets don't often contain metadata saying that they were generated from eDonkey; the DPI appliances need to figure out this out. In real-time. For hundreds of thousands of simultaneous connections.

Peeking beneath the 7th layer

Layer 7 is the application layer, the actual messages sent across the Internet by programs like Firefox or Skype or Azureus. By stripping off the headers, deep packet inspection devices can use the resulting payload to identify the program or service being used. Procera, for instance, claims to detect more than 300 application protocol signatures, including BitTorrent, HTTP, FTP, SMTP, and SSH. Ellacoya reps tell Ars that their boxes can look deeper than the protocol, identifying particular HTTP traffic generated by YouTube and Flickr, for instance. Of course, the identification of these protocols can be used to generate traffic shaping rules or restrictions.

Much like virus scanners, the boxes generally make use of "application signatures"—telltale ways of sending and receiving information that can be used to link a particular packet with a particular application. Procera's version is called Datastream Recognition Definition Language, and just like virus signatures, DPI gear needs regular updates to stay on top of new developments.

DPI vendor Allot Communications has produced a nice whitepaper that describes the different forms that this signature analysis can take. Port analysis is the simplest way to identify an application, but as we've already mentioned, it's notoriously inaccurate. Adding string matches can help, but not all applications use identifiable strings of characters. Kazaa does so, however, embedding its own name in the "user-agent" field of HTTP GET requests. Searching packets for the string "Kazaa" can turn up these requests and let the ISP know that a particular user currently has the application running. Numerical properties are another good way to craft application signatures, using patterns like payload length or specific response sequences.

Looking this closely into packets can raise privacy concerns: can DPI equipment peek inside all of these packets and assemble them into a legible record of your e-mails, web browsing, VoIP calls, and passwords? Well, yes, it can. In fact, that's exactly what companies like Narus use the technology to do, and they make a living out of selling such gear to the Saudi Arabian government, among many others.

Texas disaster recovery and managed services company Data Foundry objects to network operators doing this deep level of inspection. In a recent FCC filing, the company charged that "broadband providers' AUP/TOS/Privacy Policies, in combination with Deep Packet Inspection, allow intrusive monitoring of the content and information customers transmit or receive. This contractual and technical capability interferes with and may well eliminate all sorts of privileges presently recognized under law... Broadband service providers have no justifiable reason to capture this information."

But vendors like Ellacoya and Procera aren't so interested in capturing private data, and it's not the focus of their devices. An Ellacoya rep reassures me that most applications can be identified without actually looking through all the data in a packet payload. Still, concern over the technology has been growing as its rollout has accelerated.

DPI can also be used to root out viruses passing through the network. While it won't cleanse affected machines, it can stop packets that contain proscribed byte sequences. It can also identify floods of information characteristic of denial of service attacks and can then apply rules to those packets.

Some of these things can be done by looking at a single packet, but many cannot. DPI gear can generally extract information from traffic that varies by application type: IP addresses and URLs from HTTP traffic, SIP numbers from VoIP calls, filenames of P2P files, and chat channels for instant messages. Grabbing this information requires a look at a whole set of initial packets until the necessary information is gained, referred to as examining the "flow." Procera in particular makes a big deal about this, referring to their technology as "deep flow inspection" rather than deep packet inspection.

Nickel-and-diming?

All of this technology can be applied in a highly granular fashion. Surveillance rules can be created that are specific to each individual subscriber, and traffic shaping and quality of service can also be applied differently to every connection in the network. Without this sort of individual shaping technology, it has generally been easiest for ISPs to simply offer subscribers unfettered access to the Internet. Bandwidth caps are simple to implement without using DPI, but DPI does make it simple to tier levels of service—purchasing access to the web, but not to VoIP for instance. Based on the capabilities I've been describing, this sort of thing can go even further, with companies marketing low-cost data plans that might include web access except for streaming video or VoIP calls but no online gaming.

Such scenarios aren't a fantasy; they're happening right now. In the US, Internet access is still generally sold as all-you-can-eat, with few restrictions on the types of services or applications that can be run across the network (except for wireless, of course), but things are different across the pond. In the UK, ISP plus.net doesn't even offer "unlimited" packages, and they explain why on their web site.

"Most providers claiming to offer unlimited broadband will have a fair use policy to try and prevent people over-using their service," they write. "But if it's supposed to be unlimited, why should you use it fairly? The fair use policy stops you using your unlimited broadband in an unlimited fashion—so, by our reckoning, it’s not unlimited. We don't believe in selling 'unlimited broadband' that's bound by a fair use policy. We'd rather be upfront with you and give you clear usage allowances, with FREE overnight usage."

Plus.net's plans

What that means in this is that you pay by the gigabyte and by the service. Plans start at £9.99 (around $20) a month for just 1GB of data, though use after 10 PM appears not to count for this quota. The lowest price tier also does not support gaming and places severe speed controls on FTP and P2P use (allowing only 50Kbps at peak periods). Plus.net says that the lowest tier will not work adequately with online games or corporate VPNs. Paying £29.99 (around $60) a month provides 40GB of data transfer and fast P2P and FTP speeds, along with 240 VoIP minutes from the company. All of these tiers feature downloads speeds of up to 8Mbps.

How do they do it? With Ellacoya gear.

This can sound like nickel-and-diming, creating new ways to charge people for things (online gaming) that used to be free. But plus.net and Ellacoya both argue that it's actually a better deal for consumers because it lowers the price for those who need fewer features. According to this argument, users who don't want to play online games or download massive P2P files should not have to pay a share of the bandwidth for those who do. Traffic shaping can be used to set up a whole host of data packages to provide increased customization and, ultimately, lower costs for lighter users. Heavy users might actually see their fees increase as they're no longer subsidized by others on the network.

In fact, modern DPI gear can allow each individual subscriber to select services and speeds that are of most benefit to them, and every single user on the network can have a different set of rules in place (and pay a different price). Ellacoya's new marketing buzzword for this capability is "the Personal Internet."

Now, if all this talk of throttling and service restrictions hasn't yet cause you to think the words "network neutrality," you haven't been paying attention, because this is exactly the sort of talk that some people find offensive. "The 'Net was built on open access and non-discrimination of packets!" they argue, to which DPI vendors say, "ISPs must prepare for the exaflood."

Net neutrality, traffic shaping, and the "coming exaflood"

Let me put my cards on the table: I loathe the word "exaflood." It sounds like the sort of concept that would surface in a bad science fiction novel, one involving a sentient artificial intelligence, aliens who speak only in clicks, and a hard-boiled ex-space Marine with a shotgun. I'm not going to use it again, but if you're not familiar with the term (it's generally used not in any technical sense, but simply to mean "a whole lot of data"), check out this Wall Street Journal article or this freely-available reprint.

The idea here, from the perspective of the DPI vendors, is that the Internet now generates and streams more data than the current transmission network can handle without shaping or throttling. Senator Ted Stevens (R-AK) may have been widely ridiculed for his "series of tubes" analogy, but Internet connections are like tubes—each link can only transmit so much data at once (though "Internet tubes" can gain capacity over time, as fiber optic lines, DSL links, and cable lines have all done; this is part of Isenberg's point about why it's just cheaper to boost capacity). Given the voracious appetite of P2P users and streaming video watchers, this sort of content alone could cause delays for content that is arguably more critical and time-sensitive for an ISP's customers than an illicit Hollywood release or a video of a kid wiping out on a dirt bike: e-mail, instant messages, traditional web browsing.

Seen in these terms, the DPI vendors argue that ISPs which "do nothing" to shape traffic on their networks have actually made a choice. In this case, the choice is in favor of chaos and bottlenecks at peak periods. No matter how much bandwidth is currently thrown at the problem, P2P, Usenet, FTP, and streaming video will fill it (Ellacoya's CEO told me that "throwing bandwidth at the problem can't solve it"). Handling this exaflood data surge responsibly means using traffic shaping, at least during the periods of highest use.

This argument fits together nicely with another common one that I heard from DPI vendors: we help to make networks "fair." This was one of the claims made by plus.net (see the previous page); why should it be fair for a few ultraheavy users of the network to drag down performance for everyone else? Traffic shaping gear is all designed to integrate easily with billing systems, making it easy to charge more money for heavier use. The corollary is that prices for more modest users should actually go down (whether that actually happens is another story).

Concerns over managed traffic

Now, this entire approach to managing traffic doesn't sit well with some folks who call for neutrality on their networks. Recent research has shown that a nondiscriminatory network will in fact require up to twice the peak bandwidth of a tiered and shaped network, but this doesn't necessarily mean that this is the more expensive approach. Pundits like David Isenberg have argued that simple overprovisioning is cheaper in the long run than investing in all the new DPI gear and the manpower to maintain and monitor it.

The debate is made complicated by the fact that "network neutrality" has a hundred differing definitions, making it something of a hundred-headed hydra. In the Journal article linked above, the author talks repeatedly about net neutrality as something that will force network providers to lease out access to competitors at government-dictated rates. Whatever else this idea might be, it's not what most people talk about when they refer to "net neutrality."

For a thoughtful definition, consider the one given by Daniel Weitzner, who cofounded the Center for Democracy & Technology, teaches at MIT, and works for the W3C. He lays out four points that neutral networks should adhere to:

• Non-discriminatory routing of packets
• User control and choice over service levels
• Ability to create and use new services and protocols without prior approval of network operators
• Nondiscriminatory peering of backbone networks.

Savetheinternet.com has spearheaded the network neutrality drive in Congress, and it has a shorter definition available: "Put simply, Net Neutrality means no discrimination. Net Neutrality prevents Internet providers from speeding up or slowing down Web content based on its source, ownership, or destination."

If that's not clear enough, they provide an example. "When we log onto the Internet, we take a lot for granted. We assume we'll be able to access any Web site we want, whenever we want, at the fastest speed, whether it's a corporate or mom-and-pop site. We assume that we can use any service we like—watching online video, listening to podcasts, sending instant messages—anytime we choose."

It's not hard to see why these particular constructions of "openness" run headlong into the business plans of the traffic-shapers. Companies like Ellacoya and Procera argue that this sort of "never discrimate" policy isn't much more than unworkable idealism. Such a network will in fact fill up with data; companies that don't filter or shape packet flows have then made a default decision to allow things like VoIP, videoconferencing, and online gaming to get "laggy" and e-mail to get delayed as BitTorrent and YouTube packets clog the tubes. Downloading an 800MB video, even if the movie in question is legal, is hardly the sort of application that is mission critical, and few customers are going to abandon ship because their YouTube videos take an extra two seconds to buffer. But customers do care if their VoIP service consistently goes glitchy or has tremendous lag, if World of Warcraft becomes unplayable, or critical e-mails and IMs are delayed in transit.

The argument of the vendors is generally that "the market will decide" and that what's important is for companies simply to be upfront about the kinds of restrictions they have in place. We agree that transparency in these matters is a good idea, but the basic problem in the US is that if you don't like the policies your ISP has in place, it can be difficult to switch. We've been pointing out for years that Americans are generally locked into one or two providers, so most people are hardly spoiled for choice.

Where you come down on these questions may vary depending on where DPI gear is deployed; many people have less problems with its use by last-mile ISPs who interact directly with consumers. Throttling P2P traffic to keep the network open for other uses might be fine, but the concern is magnified when such gear is rolled out by the backbone operators, like AT&T and Verizon. With last-mile ISPs, at least (most) customers have some options for switching if they don't like the terms.

But there are so few backbone operators, and they wield so much power, that the truly scary stuff from a net neutrality perspective is if backbone providers start looking at Google and say, "If you want decent transport over my pipes, then you have to pay my toll." When that type of demand comes from an upstream provider, from a network economics standpoint that's a whole different ball game than Comcast trying to soak Google by threatening to slow down access to Google.com.

That's because there's no way for the end users to vote "no" on the policy; all of the users of the multiple last-mile ISPs who are downstream from that backbone will see their access to Google start to suck, but there's not much they can do about it because it's not really their ISP's fault. In other words, the backbone providers have a more insular, more monopolistic, non-consumer-facing position in the Internet hierarchy, so if they decide to ditch neutrality and start squeezing websites and online service providers, then there's not much that can be done.

These are deep waters, and there are complex arguments to be made here (for a detailed engineering discussion of the issues facing "best effort" routing on a congested network, take a look at this IETF Internet-Draft by Sally Floyd and Mark Allman). DPI gear makes plenty of objectionable behaviors possible, but it also opens the door to network virus scans and DDoS defense mechanisms that could do real good. By making it possible to purchase access only to the specific services or protocols that one needs, DPI could also make the Internet cheaper for casual web and e-mail users. Like most technologies, the gear itself enables a great range of uses, and it's up to the operator to be responsible.

In fact, the Center for Democracy & Technology, which stands up for freedom of expression and privacy on the Internet, has no problem with many of DPI's projected uses. In its FCC comments regarding network neutrality, the group laid out a host of possible practices along with its thoughts on them (pp. 7-10). Blocking security threats, spam, and illegal content is unobjectionable to the CDT, as is prioritizing any content requested by the subscriber and prioritizing traffic based solely on the type of application (like VoIP). But blocking any traffic or actively degrading it would be off limits, as would priority given to traffic from specific ISPs or web site operators who have paid an additional fee.

Snooping for the feds: CALEA compliance

That's doubly true when it comes to doing user surveillance, since DPI gear makes it simple to collect and offload any user's entire datastream. ISPs are required to possess this capability under the Communications Assistance to Law Enforcement Act (CALEA), which started life as an update to traditional wiretapping laws. It has now been extended to VoIP operators and ISPs, who need a way to grab, archive, and submit to law enforcement any wiretap information requested in a warrant.

Much DPI gear is also CALEA-compliant. The boxes generally contain an "aux" port that can spit out a real-time copy of any required information: all traffic from a specific IP address, e-mail, Internet phone calls, URLs. The rules are simply programmed into the box's GUI and bam!—instant surveillance.

Full CALEA compliance can be a lot of work. It involves having someone available at all times to respond to any warrants that come in, someone who can set up and implement the correct rules, and more gear that can take the data and format it according to federal specifications, then make it available to the government. Many network operators don't want anything to do with this, so they simply install the DPI gear that makes it possible and contract out all the support and data formatting issues to another company, referred to as a "trusted third party" (TTP).

These TTPs handle all the grunt work; if given permission, they can even add the necessary surveillance rules to the DPI box remotely. Data from the user in question then flows from the ISP network to the TTP network, where it is passed along to the Feds. For this sort of logging to be most effective, DPI equipment needs to be installed near the edge of the network or as part of a gateway in order to ensure that both incoming and outgoing communications can be logged. It's extremely common for traffic between two places on the Internet to flow over different paths in each direction, so a box placed incorrectly can't observe both sides of the conversation, which is often necessary to really know what's going on.

Real-time monitoring is great, but what happens when you need to investigate a crime after it's happened? Plenty of information can also be logged to disk so that it can be accessed after the fact and used in these kinds of investigations. Storage needs to be thought out carefully, though; logging unfiltered traffic from a single gigabit Ethernet link can generate up to 10 terabytes a day, in each direction.

Procera touts the story of LP Broadband, a small Colorado ISP that serves rural customers. LP Broadband was using a PL7600 DPI box with an optional statistics server, which logs far more traffic details than routine monitoring software. When an LP customer found that a business server had been compromised by hackers one night, they went to the authorities and obtained a court order that directed LP to turn over relevant records from the event.

The company was able to isolate the hacker's IP address and identified the time and duration of the hacking session; if the customer wanted, the Procera gear could simply block all further access from that particular IP address.
Coming soon to an ISP near you

DPI gear can be expensive, especially the kind that can simultaneously monitor hundreds of thousands of connections. But bandwidth isn't cheap, either, and disgruntled customers equal lost revenue. Blocking viruses, DDoS attacks, and hacking traffic on a network can also save bandwidth, user frustration, and tech support time. Both Ellacoya and Procera claim that their products pay for themselves within nine months (Ellacoya) or three to twelve months (Procera).

The rise of "lawful intercept" (CALEA) requirements and the growth of online video (both P2P and over HTTP) are making monitoring and shaping increasingly important to ISPs. Because of the firestorm surrounding network neutrality in the US, ISPs here tend to take a cautious approach to using this equipment, but it's far more common overseas.

BT, for instance, recent became Ellacoya's single largest customer, using its gear to support more than 3 million broadband subscribers. According to BT, deep packet inspection enables them to better monitor their network, but it also allows them to apply QoS to two important services. VoIP, to be useful, needs to move quickly, so BT gives it priority on the network. BT also runs its own IPTV system, with the data apparently flowing over the same network as user data. To prevent distortion in the TV signal whenever half the country decides to download an episode of Little Britain using P2P, BT uses QoS to make sure a fixed amount of bandwidth is always available to IPTV.

As services like voice and TV continue their migration onto IP networks, DPI gear will only grow in importance. Is that a bad thing? It certainly doesn't have to be, but the time to debate the proper limits of shaping, blocking, and spying is now, before they become ubiquitous features of the ISP landscape.
http://arstechnica.com/articles/cult...neutrality.ars





Internet Censorship Spreading: OSCE Study

State restrictions on use of the Internet have spread to more than 20 countries that use catch-all and contradictory rules to help keep people off line and stifle feared political opposition, a new report says.

In "Governing the Internet", the Organisation for Security and Cooperation in Europe (OSCE) presented case studies of Web censorship in Kazakhstan and Georgia and referred to similar findings in nations from China to Iran, Sudan and Belarus.

"Recent moves against free speech on the Internet in a number of countries have provided a bitter reminder of the ease with which some regimes, democracies and dictatorships alike, seek to suppress speech that they disapprove of, dislike, or simply fear," the report by the 56-nation OSCE said.

"Speaking out has never been easier than on the Web. Yet at the same time, we are witnessing the spread of Internet censorship," the 212-page report said.

In a new case not covered by the report, a senior Malaysian minister vowed this week to apply law prescribing jail terms for Web writers of comments said to disparage Islam or the king.

Malaysian police grilled one on-line author over postings the ruling party described as an attack on the country's state religion and a bid to stir racial tension.

In Kazakhstan, rules on Internet use are so vague and politicized that they "allow for any interpretation ..., easily triggering Soviet-style 'spy mania'" where any dissident individual or organisation could be branded a threat to national well-being and silenced, according to the OSCE report.

It cited a prominent incident in 2005 when Kazakhstan seized all .kz Internet domains and closed one deemed offensive and run by British satirist Sacha Baron Cohen, who had made the acclaimed spoof film "Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan".

In a speech to the OSCE parliament on Thursday, Kazakh Information Minister Yermukhamet Yertysbayev insisted Kazakhstan was determined to build democracy and create an "e-government" expanding Internet service and making "our media more free, contemporary and independent".

The OSCE report said Kazakhstan's state monopoly on Internet providers tended to deter use by making prices for all but very slow and limited dial-up service far higher than those for West Europeans even though Kazakh incomes are much lower.

Georgian law contained "contradictory and ill-defined" provisions which might "give leverage for illegitimate limitation" of free expression on the Internet, the report said.
http://www.reuters.com/article/inter...74335120070727





UW CSE and ICSI Web Integrity Checker
Charles Reis, Steven D. Gribble, Tadayoshi Kohno, University of Washington (UW). Nicholas C. Weaver, International Computer Science Institute (ICSI).

Overview:

Last month we learned on Slashdot that:
"Some ISPs are resorting to a new tactic to increase revenue: inserting advertisements into web pages requested by their end users. They use a transparent web proxy (such as this one) to insert javascript and/or HTML with the ads into pages returned to users."

Have you wondered how often this is happening? And whether it's happened to you?

The University of Washington security and privacy research group and ICSI have created a measurement infrastructure to help answer these questions. By visiting our web page, you are helping out with our experiment. (Thank you!) In the process, we'll help you figure out if some "party in the middle" (like your ISP) might be modifying your web content in flight. We also plan to share our overall results with the public.

Experimental Results for Your Browser:

Just by visiting this page, your web browser is participating in our experiment. We are detecting whether some "party in the middle" is modifying a set of test web pages, and the results of the tests are shown below. If you do not see a "change found" message below, then we did not detect any modifications to the test pages.
http://vancouver.cs.washington.edu/





IBM Rules Govern Workers in Virtual Worlds

Sites previously used to conduct meetings and show consumers products
Rachel Konrad

Anything pretty much goes in online virtual worlds. Identities are nebulous. Online characters known as avatars chat it up, gamble or even have sex at first sight.

Increasingly though, these online zones like "Second Life" are also becoming places where commerce is happening. Big companies such as IBM Corp. and Intel Corp. use these graphics-rich sites to conduct meetings among far-flung employees and to show customers graphical representations of ideas and products.

Now, in hopes of capturing the power of this new platform while avoiding potentially embarrassing incidents, IBM is taking the unusual step of establishing official guidelines for its more than 5,000 employees who inhabit "Second Life" and other online universes.

IBM appears to be the first corporation to create rules governing virtual worlds. The move has critics, who say that mandating behavior for the so-called "metaverse" is unlikely to reform impish avatars. They also question why IBM would add a layer of buttoned-down bureaucracy to this relatively rollicking corner of the Internet.

IBM executives counter that having a code of conduct is akin to a corporate stamp of approval, encouraging workers to explore more than 100 worlds IBM collectively calls the "3D Internet."

The Armonk, N.Y.-based tech company also has a financial incentive: It hopes to make money advising corporate clients that craft business strategies for virtual worlds. IBM has built a virtual retail center in "Second Life" for Circuit City Stores Inc. and used the site to re-create the action at Wimbledon.

"The 3D Internet will have a big impact on business, on IBM and on our clients, and the only way to figure it out is to use it," said Irving Wladawsky-Berger, a retired IBM technical executive and now an engineering professor at the Massachusetts Institute of Technology.

Intel also is drafting a tip sheet and plans to offer a voluntary course this year for employees who use blogs, social media sites and virtual worlds.

About 150 Intel workers conduct business meetings in "Second Life." The chip maker recently purchased the last name "Intel" for employees' "Second Life" avatars, said Gina Bovara, Intel marketing specialist.

"For those employees who may be hesitant, guidelines can provide the encouragement and Intel philosophy they need to actually dive in and start anticipating," said Bovara, who maintains Intel's "Second Life" mailing list.

IBM's rules — which apply to "Second Life," "Entropia Universe," "Forterra," There.com and other worlds — are logical extensions of the real world: Don't discuss intellectual property with unauthorized people. Don't discriminate or harass.

Guidelines also include a 21st-century version of the Golden Rule: "Be a good 3D Netizen."

Other rules are unique to the metaverse, which requires users to create animated avatars with distinct appearances, personalities and gestures. "Second Life," owned by San Francisco-based Linden Lab, has more than 8 million avatars; most look human, but many take the form of chipmunks, zombies or fantastic beasts.

IBM, whose 20th century employees were parodied as corporate cogs in matching navy suits, doesn't have an avatar dress code. But guidelines suggest being "especially sensitive to the appropriateness of your avatar or persona's appearance when you are meeting with IBM clients or conducting IBM business."

Rules caution workers who have multiple avatars or frequently change their avatar's appearance. It's common to have numerous avatars — similar to having multiple e-mail addresses for work and personal use.

"Building a reputation of trust within a virtual world represents a commitment to be truthful and accountable with fellow digital citizens," IBM states. "Dramatically altering, splitting or abandoning your digital persona may be a violation of that trust. ... In the case of a digital persona used for IBM business purposes, it may violate your obligations to IBM."

The guidelines shouldn't sound heavy-handed, and it's unclear whether workers who violate them could be disciplined, said Sandy Kearney, global director of IBM's 3D Internet initiatives. Instead, she said, rules encourage ethical behavior in worlds where people often act out rapacious or rude fantasies.

"We don't want it to be the Wild West," Kearney said. "I use the metaphor of nation building: If you have a problem, you need embassies, ambassadors, governance and government."

But other business experts say IBM's guidelines may come off as stodgy — the stereotype that Big Blue largely shook in recent years.

"I'm just not sure it's necessary," said Reuben Steiger, founder of Millions of Us, a Sausalito-based consulting firm that helps companies operate in virtual worlds. "Companies that don't bother with guidelines aren't flying blind — the regular rules automatically extend to virtual worlds."

So far, it doesn't appear the guidelines have stifled IBMers' creativity. IBM's "metaverse evangelist," British computer scientist Ian Hughes, is a minor celebrity in "Second Life." His avatar, clearly associated with IBM, is a wicked-looking robot with dreadlocks and named "epredator Potato."

"We want it to stay an exciting place," Wladawsky-Berger said. "We don't want to be sheriff."
http://www.msnbc.msn.com/id/19982107/





Google Fear Hits AT&T Square In The Jaw
Jason Lee Miller

As predictable as daylight, AT&T isn't happy about Google's plan to bid on the 700MHz wireless spectrum. The telecommunications is poised to claw any competition out of the equation, and is hoping its traditional ally, the FCC, will have its back again.

But the nitty gritty of it is, the telecommunications industry is scared to death of Google.

A quick review:

AT&T, Verizon, and others are chomping at the bit to get a hold of the 700 MHz band, soon to be returned to the federal government by broadcast television once regulation takes effect requiring them to go digital. This swath of spectrum is ideal for wireless broadband and mobile phone networks.

But to get the most of profit from it, incumbent telecom providers must pressure the FCC to not impose requirements on the spectrum is used. Rather, incumbents would prefer a setup similar to what they have now, with little incentive to give consumers choice in wireless services.

They do this by limiting devices that can be used on their networks, what third-party applications can be installed, exclusive contracting like with the iPhone, and punitive contract termination fees.

And they want it to stay that way.

Google, though, and consumers, and pretty much everybody that's not an incumbent, want a section of the spectrum reserved with requirements that are more consumer friendly. Though incumbents have argued that doing so would devalue the spectrum and limit competition, the intent is just the opposite, to foster new players in the arena, and by default, putting pressure on incumbents to think more about customers and less about the bottom line.

Enter Google, the white knight (yes, I'm editorializing, it's what I do best), who last Friday sent a letter to the FCC promising to bid at least the minimum reserve the agency had in mind for that slice of spectrum, $4.6 billion, but only if the FCC enforce four principles of open access.

This does three things: ensures new, consumer-friendly competition; takes away arguments against from incumbents; and really ticks AT&T off.

Okay, that wasn't as quick as I thought it was going to be.

What AT&T has to say about it:

Om Malik gets credit for chasing down this statement from AT&T Senior VP Jim Cicconi:

…Google has now delivered an all or nothing ultimatum to the U.S. Government, insisting that every single one of their conditions “must” be met or they will not participate in the spectrum auction. Google is demanding the Government stack the deck in its favor, limit competing bids, and effectively force wireless carriers to alter their business models to Google’s liking…

He also said something to the effect that Google should "put up or shut up," which comes across as belligerent, whiney, immature, and ultimately, threatened. He is right that Google is making demands. He is also right that Google couldn't win the auction in a fair fight with the telecoms (nor could anyone else, save Microsoft).

But that's why supporters of open access are concerned. With about four major providers pooling their resources, they could hoard that valuable spectrum and keep America behind other countries in wireless services indefinitely.

The irony of Cicconi's statement is breathtaking, even painful, as one might not be able to decide which is the pot and which is the kettle. AT&T has always had the deck stacked in its favor…remember Ma Bell? … and Google's potential entry into the market has them scared they won't be able to manipulate the market like they are used to doing.

Cicconi's words are nothing but saber-rattling, a tantrum, a scared kid crying foul when he knows it was fair.
http://www.webpronews.com/topnews/20...are-in-the-jaw





Kids Say e-Mail is, Like, Soooo Dead
Stefanie Olsen

The future of e-mail might be found on the pages of MySpace.com and Facebook.

Just ask a group of teen Internet entrepreneurs, who readily admit that traditional e-mail is better suited for keeping up professional relationships or communicating with adults.

"I only use e-mail for my business and to get sponsors," Martina Butler, the host of the teen podcast Emo Girl Talk, said during a panel discussion here at the Mashup 2007 conference, which is focused on the technology generation. With friends, Bulter said she only sends notes via a social network.

"Sometimes I say I e-mailed you, but I mean I Myspace'd or Facebook'ed you," she said.

To be sure, much has been written about the demise of e-mail, given the annoyance of spam and the rise of tools like instant messaging, voice over IP and text messaging. But e-mail has hung on to its utility in office environments and at home, even if it's given up some ground to new challengers. It may be that social networks are the most potent new rival to e-mail, one of the Internet's oldest forms of communication. With tens of millions of members on their respective networks, MySpace and Facebook can wield great influence over a generation living online, either through the cell phone or the Internet.

And if you're among those who believe teens are the future, then e-mail could be knocked down a rung. For example, Craig Sherman, CEO of Gaia Online, a virtual world for teens and college kids, describes the age group as "the first and early adopters of new trends. Things they are doing are what everyone will be doing in five years."

To hear the teen panelists tell it, that means e-mail will be strictly the domain of business dealings.

"If I'm talking to any friends it's through a social network," said Asheem Badshah, a teenaged president of Scriptovia.com, an essay-sharing site that launched this summer. "For me even IM died, and was replaced by text messaging. Facebook will replace e-mail for communicating with certain people."

Almost on cue, a Microsoft executive sitting in the audience chimed in with a question to the teens, saying that given his work, he's "interested in people not using e-mail." He asked the panelists to comment about the fact that e-mail transmits to mobile devices, for example. Also, Facebook will send its members an e-mail anytime someone sends them a message on the social network.

Butler replied that she uses Facebook on her cell phone. "I need (Facebook) everywhere I go, but I log into e-mail only once a week," she said.

More and more, social networks are playing a bigger role on the cell phone. In the last six to nine months, teens in the United States have taken to text messaging in numbers that rival usage in Europe and Asia. According to market research firm JupiterResearch, 80 percent of teens with cell phones regularly use text messaging.

Catherine Cook, the 17-year-old founder and president of MyYearbook.com, was the lone teen entrepreneur who said she still uses e-mail regularly to keep up with camp friends or business relationships. Still, that usage pales in comparison to her habit of text messaging. She said she sends a thousand text messages a month.

"I don't know any teen who doesn't have a phone with them all the time," Cook said.

Still, the age group is a fickle bunch. All of the panelists said that they're constantly looking for the next, new thing to stay current with friends; and they often use different social networks and tools to keep up with different sets of people.

Cook, for example, said she uses her own social network MyYearbook to talk to her friends from school, but she uses Facebook to keep up with what's happening at Georgetown University, where she plans to attend school in the fall. Cook blogs at MySpace as a way to meet new friends, and she's also on LinkedIn to mine new professional relationships.

"Teens are on lots of sites and picking and choosing activities from each one," she said. "It's based on who you actually want to talk to."

Similarly, Ashley Qualls, president of WhateverLife, a graphical tool for users of MySpace, said she keeps adding on new social networks to her roster of memberships online. "People leave a trail of where they decide to go," she said.

Badshah said that to subscribe to only one social network means losing out on friendships with people who are active on other rival social networks. That's because having real estate on MySpace or Facebook means keeping tabs with only certain friends through messaging, blogs and recent photos. That the two major social networks don't interoperate could be reason for a new social network that could act as an intermediary to aggregate friends in one place, Badshah said, much the way Trillian did for IM applications like Yahoo and AOL.

"It's a problem for teens--you're like losing out on some of your friends if you choose just one," he said.

"To have all your buddy lists in one place, that's where this is going," Badshah said.
http://news.com.com/Kids+say+e-mail+...?tag=nefd.lede





(-: Just Between You and Me ;-)
Alex Williams

THERE are many ways to console someone when a multimillion-dollar business deal falls through. Firing off a “tough break” e-mail message punctuated by a frown-face emoticon is not one of them.

More than once, Alexis Feldman, the director of the Feldman Realty Group, a commercial real estate company in Manhattan, has been moving forward on a major deal when, she said, “at the 23rd hour, I get an e-mail from the broker saying, ‘Sorry, my client is not interested in the space, too bad we couldn’t make the big bucks’ — then there’s a frown face!”

“I mean, it’s ludicrous,” said Ms. Feldman, 25. “I’m not going to feel better about losing hundreds of thousands of dollars because someone puts a frown face to regretfully inform me.”

Emoticons, she added, should be reserved for use by “naïve tweens on AOL Instant Messenger finding out after-school soccer practice is canceled.”

If only.

Emoticons, the smiling, winking and frowning faces that inhabit the computer keyboard, have not only hung around long past their youth faddishness of the 1990s, but they have grown up. Twenty-five years after they were invented as a form of computer-geek shorthand, emoticons — an open-source form of pop art that has evolved into a quasi-accepted form of punctuation — are now ubiquitous.

No longer are they simply the province of the generation that has no memory of record albums, $25 jeans or a world without Nicole Richie. These Starburst-sweet hieroglyphs, arguably as dignified as dotting one’s I’s with kitten faces, have conquered new landscape in the lives of adults, as more of our daily communication shifts from the spoken word to text. Applied appropriately, users say, emoticons can no longer be dismissed as juvenile, because they offer a degree of insurance for a variety of adult social interactions, and help avoid serious miscommunications.

“In a perfect world, we would have time to compose e-mails that made it clear through our language that we are being cheerful and friendly, but we’re doing these things hundreds of times a day under pressure,” said Will Schwalbe, an author of “Send: The Essential Guide to Email for Office and Home” (Knopf, 2007), written with David Shipley, the deputy editorial page editor at The New York Times.

Mr. Schwalbe said that he has seen a proliferation of emoticon use by adults in delicate and significant communications. “People who started using them ironically are now using them regularly,” he said. “It’s really in the last couple of years that the emoticon has come of age.”

In fact, a recent Yahoo study indicates that the days in which emoticons were considered as unacceptably casual as flip-flops at work are over.

In a survey of 40,000 users of the Yahoo Messenger instant-message program, 52 percent of the respondents were older than 30, and among those, 55 percent said they use emoticons every day. Nearly 40 percent of respondents said they first discovered emoticons within the last five years.

Christopher P. Michel, the founder and chairman of Military.com, a military and veteran affairs Web site, said that usage of emoticons has grown “hyper-pervasive” in his communiques even with admirals at the Pentagon, where they provide a certain cover for high-ranking leaders to comment on sensitive matters.

“A wink says quite a lot,” said Mr. Michel, a former lieutenant commander in the Navy. “An admiral could say a wink means a thousand different things — but I know what it means. It’s a kind of code.”

THERE was a time, of course, that emoticons seemed intrinsically youthful. Just as children shared the special ability to see Big Bird’s magical friend Snuffleupagus on “Sesame Street” — a character who was long supposed to be invisible to adults — they seemed to easily recognize that the characters 3:-o represented a cow, or that @>--> -- symbolized a rose or that ~(_8^(I) stood for Homer Simpson.

But after 25 years of use, emoticons have started to jump off the page and into our spoken language. Even grown men on Wall Street, for example, will weave the term “QQ” (referring to an emoticon that symbolizes two eyes crying) into conversation as a sarcastic way of saying “boo hoo.”

Kristina Grish, author of “The Joy of Text: Mating, Dating and Techno-relating” (Simon Spotlight Entertainment, 2006), said that she grew so accustomed to making the :-P symbol (a tongue hanging out) in instant messages at work that it once accidentally popped up, in three dimensions, on a date.

“When the waiter told us the specials,” she recalled in an e-mail message, “I made that face — not on purpose of course — because they sounded really drab and uninteresting. And the guy I was out with looked at me like I was insane and said, ‘Did you just make an IM face?’ ”

Though we think of emoticons, or “smileys,” as an Internet-era phenomenon, their earliest ancestors were created on typewriters. In 1912, the writer Ambrose Bierce proposed a new punctuation device called a “snigger point,” a smiling face represented by \__/!, to connote jocularity.

The first commonly acknowledged use of the contemporary emoticon was in 1982. Scott Fahlman, a research professor of computer science at Carnegie Mellon University in Pittsburgh, was linked to an electronic university bulletin board where computer enthusiasts posted opinions on matters as divisive as abortion and mundane as campus parking.

In one thread, a wisecrack about campus elevators was misinterpreted by some as a safety warning, so Dr. Fahlman suggested using :-) as a way to indicate jokes and :-( for remarks to be taken seriously (the latter quickly morphed into a signifier of displeasure).

To Dr. Fahlman’s surprise, his “joke markers” spread quickly on the board. Within a month, he heard, some peers out in Stanford had picked them up, and soon after, techies at Xerox were circulating a list of strikingly sophisticated new emoticons.

He never received a trademark for his invention, and never made a dime from it.

“This is just my little gift to the world,” said Dr. Fahlman, now 59 and still doing computer-science research at Carnegie Mellon. “If there had been a way to charge a nickel each time, no one would have used it,” Dr. Fahlman explained. “It had to be free.”

In classic Internet fashion, an application born of technological necessity soon flowered in unimagined directions. Soon there were emoticons for historical figures, like Ronald Reagan: 7:^]

And for bearded, sunglasses-wearing celebrities, like certain members of the band ZZ Top: B-)===>

Before long, emoticons had accomplished what Esperanto never could: establish a universal lingua franca. The Japanese, no strangers to the marketing of cute, devised a smiley which could be read without turning one’s head sideways: {*_*}

But the fundamental whimsy of the form belies the more serious usage of emoticons by adults now. In the early stages of dating, where text communication often replaces the telephone, the emoticon can be a Trojan horse, a device to sneak a greater level of intimacy into otherwise benign communiques.

When exchanging e-mail messages with a younger prospective girlfriend, a suitor from the generation that still used typewriters in college can, with a few well-placed smileys, bridge the age gap, softening the masculine edge to his humor, and making the pursuing male seem less aggressively predatory.

Indeed, people naturally look for signals of intimacy and trust in the human face — even a crude representation of one, said Dacher Keltner, a professor of psychology at the University of California, Berkeley. This tendency is a result of countless generations of evolution, he said, during which people relied on the subtle contortions of facial muscles as life-or-death signals to survive, cooperate and reproduce.

When infants are given a series of geometrical patterns, Dr. Keltner said, their eyes will naturally be drawn to those that seem to represent a face. “So what these emoticons are capturing,” he said, “is this platonic, idealized form of an evolutionary device.”

Some members of the species seem more drawn to these particular face icons than others. In the Yahoo poll, 82 percent of respondents considered women more likely than men to use emoticons. For men who have a hard time using terms of tenderness, particularly “love,” emoticons can convey the affection that they are otherwise afraid to express — the graphical equivalent of a dozen roses from a bodega, with roughly the same level of effectiveness.

“I have one friend in L.A. who IMs me ‘Hey sexy :)’ every morning,” Ilana Arazie, the author of the videoblog Downtowndiary.com, said in an e-mail message. “It’s his way of flirting and maybe seeing how far he can take our relationship. But no, I’m not getting on a plane to L.A. anytime soon.”

But as with any technology, nothing stands still.

Just as ring tones lost their rustic charm a few years ago when they moved past a simple monophonic melody, emoticons have lost a bit of their soul by becoming animated and corporate, aficionados say.

Many programs for e-mail, instant messages and word-processing are now programmed to change text emoticons into cartoon smileys, some of which bear a striking resemblance to the frenetically chipper candy-men of the M&M ads. The Web site Lolfamily.com allows users to create three-dimensional super-emoticons that gyrate, wink and wiggle with almost Pixar-like complexity.

Like indie rock fans who squeal when their favorite underground band signs with a major label, purists see the dawn of elaborate graphics as the end of the emoticons’ golden age.

“I hate image emoticons, and turn them off in every application I use in which I can do so,” said one emoticon traditionalist who gave his name only as Elliott, in a post on Fluther.com, an Internet question-and-answer site. To trick the autocorrect functions imbedded in many applications, he types his emoticons backwards, so :-) becomes (-: , and neither he nor the recipient of the message has to stare down “the yellow abomination.”

But such gestures of defiance seem to barely register, given the generally increasing embrace of emoticons.

Amy Cohen, an author and a former dating columnist for The New York Observer, joked that she could “tell the whole story of a relationship in emoticons: Happy, happy, happy, sad, happy, sad, sad.”

That would be :) , :) , :) , :( , :) , :( , :( , of course.
http://www.nytimes.com/2007/07/29/fa...9emoticon.html





Netflix to Lower Online DVD Rental Fees
Michael Liedtke

Online DVD rental pioneer Netflix Inc. is lowering the price of its two most popular subscription plans by a $1 per month, relinquishing millions of dollars in revenue in an attempt to regain the upper hand in a cutthroat battle with rival Blockbuster Inc.

With the reductions announced Sunday, Netflix will charge $16.99 per month for a plan that allows subscribers to keep up to three DVDs at a time with no limit on how frequently the discs can be mailed back in return for another movie. The price for a similar plan that lets customers keep one DVD at a time will fall to $8.99 per month.

The price cuts, which take effect Tuesday, match the fees charged by Blockbuster for similar online-only services.

Earlier this year, Los Gatos-based Netflix knocked $1 off two other plans that had previously cost $14.99 and $5.99 per month.

The latest changes will have a bigger impact on Netflix's finances because the price reductions are being made on the two plans that are most widely used by the company's 6.8 million subscribers. Netflix declined to specify how many subscribers use each plan.

Management is expected to quantify how much the price cuts will dent its future profits in a Monday afternoon conference call scheduled to be held after the company releases its second-quarter earnings.

Netflix's stock price already has dropped 24 percent so far this year amid worries about tougher competition from Blockbuster and video downloading services offered by much-larger companies like Apple Inc. and Amazon.com Inc.

When Netflix last cut the prices of its most popular plans in late Chief Executive Officer Reed Hastings predicted the short-term financial pain would be worth the long-term market-share gains.

That prediction panned out. Netflix has added 4.5 million subscribers since lowering the price of its three-DVD plan from just under $22 in November 2004. The company also is making a lot more money, with earnings of $49 million last year compared with a $6.5 million profit in 2003.

But Netflix's momentum has tapered off since Dallas-based Blockbuster unveiled a new option in its own online service late last year.

For an additional $1 per month, Blockbuster gives online subscribers the flexibility to return and check out some DVDs in its stores at no additional cost. That convenience represents a significant advantage over Netflix, where all DVD deliveries are made through the mail—a limitation that means subscribers have to wait at least two days before receiving a new movie.

Netflix offers a selection of more than 2,000 movies and television shows that can be streamed over Internet-connected personal computers for subscribers who don't want to wait for their next disc to arrive in the mail.

Acknowledging Blockbuster has been eroding its market share, Netflix in April warned Wall Street that it won't add as many subscribers this year as it originally envisioned.

Stepping up its attack on Netflix also has been hurting Blockbuster, which has had to spend more heavily on DVDs to ensure sure its stores have enough discs to keep up with the additional demand from its roughly 3 million online subscribers. The company lost $49 million in the first quarter.

Blockbuster may not be willing to endure those kinds of losses much longer, especially with the recent hiring of a new CEO, James Keyes. In a Securities and Exchange Commission filing last month, Blockbuster said it will modify its online service "to strike the appropriate balance between continued subscriber growth and enhanced profitability."
http://www.breitbart.com/article.php...rticle=1&cat=0





Netflix Lowers Earnings Outlook
Michael Liedtke

Netflix Inc. expects its profit to sag the rest of this year as the online DVD rental leader absorbs the cost of lowering its prices and upgrading its customer service to ward off an intensifying threat from rival Blockbuster Inc.

The sobering forecast overshadowed the Los Gatos-based company's second-quarter results, which also were released Monday after the stock market closed.

The dimmer outlook -- foreshadowed Sunday when management announced the lower prices -- weighed on Netflix's already drooping stock.

After plunging $2.36, or 12 percent, to end Monday's regular session at $17.27, Netflix shares shed another 77 cents in extended trading. The company's stock price has plunged by 33 percent so far this year amid investor worries about tougher competition from Blockbuster and video downloading services.

''We are in a very competitive, large battle,'' Reed Hastings, Netflix's chief executive officer, said in an interview Monday. ''But we feel like we are still in a great position.''

Hoping to retain more of its current customers while enticing new subscribers, Netflix is lowering monthly fees by $1 on its two most popular plans to match Blockbuster's prices for comparable Internet-only services. The new rates take effect Tuesday.

The discounts were driven by Netflix's trouble signing up new subscribers since late last year, when Blockbuster began giving its online subscribers the option of swapping DVDs at one of its stores instead of relying on the mail and waiting at least two days for another movie.

Wedbush Morgan Securities analyst Michael Pachter believes Blockbuster may have exposed Netflix's Achilles' heel by aggressively promoting the convenience of Blockbuster stores to build its online service. ''Netflix has a broken model,'' he said.

Netflix fared well financially in the second quarter, earning $26.6 million, or 37 cents per share. That represented a 50 percent increase from net income of $17 million, or 25 cents per share at the same time last year.

Revenue totaled $303.7 million, a 27 percent improvement from $239.4 million last year.

If not for a $4.1 million payment from Blockbuster to settle a patent infringement lawsuit, Netflix said it would have earned 31 cents per share. That was still well above the average earnings estimate of 23 cents per share among analysts surveyed by Thomson Financial.

But the earnings momentum won't extend into the second half of this year, largely because the company decided to focus on protecting its market share instead of boosting its profits.

The company expects its full-year profit to range from $42.4 million to $52.4 million, down from an April forecast of earnings from $55 million to $60 million. Netflix earned $35.4 million through the first half of this year.

Netflix's earnings may fall even further next year as the company continues to compete for subscribers and invests in new technology to deliver movies over high-speed Internet connections so they can be watched on television sets, Chief Financial Officer Barry McCarthy told analysts Monday.

Besides lowering its prices, Netflix will spend more on customer service. The company plans to open 10 more distribution centers this year so it can accelerate the delivery of DVDs.

Netflix ended June with 6.74 million subscribers, a decrease of 55,000 customers from April. It marked the first time in Netflix's 8-year history that the company's total subscribers have declined from one quarter to the next.

Blockbuster is expected to update its online subscriber count Thursday when it is scheduled to release its second-quarter results. The Dallas-based company ended March with 3 million subscribers after outstripping Netflix's customer growth for two consecutive quarters.

The gains haven't helped Blockbuster financially. The company lost $49 million in the first quarter. Blockbuster last month indicated it might try to reverse that trend by raising the prices of its online service. If that happens, Netflix's earnings during the second half of this year might not shrink as much as management currently expects.
http://www.businessweek.com/ap/finan.../D8QIL7SO1.htm





Nevada Governor Accidentally Posts Outlook Password
Declan McCullagh

If you ever wanted to be Nevada's governor for a day, it doesn't seem to be that hard.

In what could be a whopping security hole, Nevada has posted the password to the gubernatorial e-mail account on its official state Web site. It appears in a Microsoft Word file giving step-by-step instructions on how aides should send out the governor's weekly e-mail updates, which has, as a second file shows, 13,105 subscribers.

Excerpt from Nevada's state government Web site: How to be the governor for a day. And we're sure he replies to all of his own e-mail as well.

The Outlook username is, by the way, "governor" and the password is "kennyc". We should note at this point that the former Nevada governor, a Republican, is Kenny C. Guinn, which hardly says much about password security.

The current governor of Nevada is Jim A. Gibbons, also a Republican, happens to be widely disliked. His approval rating of 28 percent accomplishes the rare feat of being below President Bush's. It doesn't help, we assume, that Gibbons is facing an FBI probe over possible illegal gifts.

For the record, we didn't try sending fake gubernatorial mail with the "kennyc" password (or "jimmya" either), so we don't know whether it actually works or whether it's been changed for the new administration. Although the listserv's administration interface is publicly-accessible, there might be a firewall that limits connections to the Outlook server, for all we know. Because other accidentally-public documents on the NV.gov site continue to list the "kennyc" password, though, we wouldn't be surprised if the password remained the same.

We did, however, briefly consider that a message titled "Governor_eAlert_07.19.07: Why I am resigning in disgrace" or "Governor_eAlert_07.20.07: Why I am switching to the Libertarian Party," would be more interesting than the run-of-the-mill actual titles like Economic Development Funding Paying Immediate and Long-term Benefits.

Other documents on the Nevada Web site list internal phone numbers and, oddly, because we didn't think anyone in this biz used fax machines anymore, a "PRESS RELEASE BLAST FAX LIST" for our colleagues in the Nevada media.

We did try calling and e-mailing the press office on Friday morning but didn't hear back by our publication deadline. Maybe we would have had better luck if the e-mail inquiry had come from the governor himself...

Note: Reporters are, of course, only as good as their sources. A tip of the hat this time to a fellow who goes by the name of Don Malaria.

Update as of 11am: The offending Web site has been taken offline, although the password files are still available through Google's cache. We did speak to Melissa Subbotin, the governor's press aide, but never got a response in terms of how this happened.
http://news.com.com/8301-10784_3-9747705-7.html





'$100 Laptop' Production Begins
Jonathan Fildes

Five years after the concept was first proposed, the so-called $100 laptop is poised to go into mass production.

Hardware suppliers have been given the green light to ramp-up production of all of the components needed to build millions of the low-cost machines.

Previously, the organisation behind the scheme said that it required orders for 3m laptops to make production viable.

The first machines should be ready to put into the hands of children in developing countries in October 2007.

"There's still some software to write, but this is a big step for us," Walter Bender, head of software development at One Laptop per Child (OLPC), told the BBC News website.

The organisation has not said which countries have bought the first machines.

Silencing critics

Getting the $100 laptop to this stage has been a turbulent journey for the organisation and its founder Nicholas Negroponte.

Since the idea was first put forward in 2002, the low-cost laptop has been both lauded and ridiculed.

Intel chairman Craig Barret famously described it as a "$100 gadget" whilst Microsoft founder Bill Gates questioned its design, particularly the lack of hard drive and its "tiny screen".

Other critics asked whether there was a need for a laptop in countries which, they said, had more pressing needs such as sanitation, water and health care.

Professor Negroponte's response has always been the same: "It's an education project, not a laptop project."

The view was shared by Kofi Annan, ex-secretary General of the UN. In 2005, he described the laptop as an "expression of global solidarity" that would "open up new fronts" for children's education.

And as time passed, even some of the critics have changed their stance. Earlier this month, Intel, which manufactures what was considered a rival machine, the Classmate PC, joined forces with OLPC.

Functional design

The innovative design of the XO machine has also drawn praise from the technical community.

Using open source software, OLPC have developed a stripped-down operating system which fits comfortably on the machine's 1GB of memory.

"We made a set of trade-offs which may not be an office worker's needs but are more than adequate for what kids need for learning, exploring and having fun," said Professor Bender.

The XO is built to cope with the harsh and remote conditions found in areas where it may be used, such as the deserts of Libya or the mountains of Peru.

For example, it has a rugged, waterproof case and is as energy efficient as possible.

"The laptop needs an order of magnitude less power than a typical laptop," said Professor Bender. "That means you can power it by solar or human power."

Governments that sign up for the scheme can purchase solar, foot-pump or pull-string powered chargers for the laptop.

And because it may be used in villages without access to a classroom, it has also been designed to work outside. In particular, the green and white machines feature a sunlight-readable display.

"For a lot of these children it's their only book and we want them to have a first class reading experience," said Professor Bender.

Name drop

The XO will be produced in Taiwan by Quanta, the world's largest laptop manufacturer.

The final design will bring together more than 800 parts from multiple suppliers such as chip-maker AMD, which supplies the low-power processor at the heart of the machine.

"This is the moment we have all been waiting for," Gustavo Arenas of AMD told the BBC News website.

"We certainly believe very strongly in the mission and vision of OLPC so finally starting to see it come to fruition is not only gratifying, it is also rewarding."

Test machines, on which the final design is based, are currently being put through their paces by OLPC.

"We keep laptops in the oven at 50 degrees and they keep on running," said Professor Bender.

Field testing is also being done in countries such as Nigeria and Brazil.

However, the names of the governments that have purchased the first lots of machines have not been released.

The XO currently costs $176 (£90) although the eventual aim is to sell the machines to governments for $100 (£50).
http://news.bbc.co.uk/go/pr/fr/-/1/h...gy/6908946.stm





Google's View of D.C. Melds New and Sharp, Old and Fuzzy
Jenna Johnson

As you take a bird's-eye tour of downtown Washington, compliments of Google Maps' updated satellite feature, you hit a haze over the Mall.

Suddenly, instead of crisp, yellow taxis, white buses and red pickup trucks, the vehicles look like little blobs. Foggy Bottom gets really, well, foggy. People casting distinct shadows walk out of the Lincoln Memorial and into a blur of fuzzy steps.

Rub your eyes and look again. Maybe your computer is slow. Perhaps on the day these images were taken, it was really smoggy in that part of town.

Wait. This wouldn't have anything to do with national security, would it?

Well, kind of.

When Google updated its satellite maps of Washington in June, it had two options: Use the newest, most detailed aerial photos from a government agency that blocks such top-security spots as the White House and the U.S. Capitol, or continue to use older, less-detailed images from a private company that doesn't block out anything.

The compromise? Google chose the new maps for most of the city but spliced in the older, fuzzier ones for about one-sixth of the District to include an unblocked view of the president's home and the Capitol.

But the area in the older images also includes most of Ward 2: the Mall, the State Department, George Washington University, Union Station and several neighborhoods, including Dupont Circle, Shaw and Chinatown. That means the convention center that was demolished in 2004 appears intact and the National World War II Memorial that was completed in 2004 appears under construction.

The older images frustrate cartographer Nikolas Schiller, 26, who takes an artistic approach to mapmaking and is working on an atlas. Schiller, who lives in the U Street area, said that too much of the District is represented using the older photos, diminishing the amount of information -- and thrill -- that aerial photos can provide.

"Maps are about power," he said. "Maps decide what gets developed, who lives where, how people get around."

The newer photos on Google's map of Washington are from 2005 Geological Survey satellite images released in March. Those photos were updated from images released in 2002 and are much more detailed. Vehicles have structure. People have shadows. Buildings have shingles. Trees have branches.

But in the 2005 Geological Survey images, the White House is blocked out by a white rectangle, and when you zoom in on the Capitol and the Washington Monument, they become a flurry of dots. Rather than use those photos, Google used uncensored images of the area, including the White House and Capitol, from a commercial vendor.

To obtain permission to fly over the District and take photos, the Geological Survey promised the Secret Service that as soon as the plane landed, images that could "jeopardize national security" would be deleted or edited, Geological Survey spokesman Doug Spencer said.

"When you think about it from a military perspective or a terrorist perspective," he said, "you don't want to put that information out there."

Soon after the Sept. 11, 2001, terrorist attacks, the agency took aerial photos of 133 urban areas across the country; it repeated the process in 2005 for many of the cities. Each city could determine which sites needed protection and, therefore, less clarity on the map -- some picked water treatment plants, military bases, power plants or government buildings, but there was no consistency.

"It was really at their discretion," Spencer said.

In June, Google Maps http://(maps.google.com) and Google Earth http://(earth.google.com/) updated their satellite images of Washington and several other cities using the 2005 Geological Survey images, and Schiller began to explore. He selected the District, changed the setting to satellite, zoomed in as tightly as he could and began touring the city.

He soon realized that some parts were much clearer than others. He checked the source of the images, noted on the bottom of the map window, and concluded that the District was made up of images from different sources and years.

Google receives its photos from government agencies and commercial imaging companies. Imagery managers decide which sources offer the best resolution and most up-to-date information. For the map of Washington, Google opted for the highest-quality photos available rather than the newest information.

Schiller said he thinks Google should just use the 2002 map for the small spots the government has censored rather than the whole downtown area.

And he said he's puzzled that any level of blurriness is needed by anyone -- even the government -- especially because he recently took a detailed tour of a nuclear reactor south of Detroit via Google Earth.

"Where is the concept of national security in this?" he asked.
http://www.washingtonpost.com/wp-dyn...072101296.html





BET Gives ‘Hot Ghetto Mess’ a New Name

‘We Got to Do Better’ is the title show will have when it debuts Wednesday

BET’s provocatively titled “Hot Ghetto Mess,” which drew sharp criticism and overshadowed the rest of the cable channel’s new schedule, is getting an upbeat new name.

“We Got to Do Better” is the title the series will have when it debuts Wednesday, BET spokeswoman Jeanine Liburd told The Associated Press on Monday.

“We’ve decided to change the name because we want to highlight the show’s real intent, which is to offer social commentary in a context that sparks dialogue, debate, and most importantly, change,” BET said in a statement.

The show’s content remains unaltered, Liburd said.

The half-hour video clip show is based on the Web site hotghettomess.com, which shows examples of outrageous fashion and behavior, mostly in the black community. The BET show will combine viewer-submitted and BET-produced content.

BET is characterizing the show as “pure social commentary.” But critics have said it risks holding blacks up to ridicule and perpetuating negative stereotypes.

The new title echoes the “we can do better” slogan of the Web site, which was founded by black lawyer Jam Donaldson of Washington, D.C., who is an executive producer on the BET show. On her site, she calls for a “new era of examination” by blacks.

Whether the name change satisfies detractors remains to be seen.

A blog and audio podcast, whataboutourdaughters.blogspot.com, which focuses on how black women are depicted in popular culture, has been a vocal critic of “Hot Ghetto Mess.” In a posting Monday, it said the change avoids further promotion of an “abominable and disgusting” Web site.

Gina McCauley, who created the blog, said she’s willing to give the show a chance.

“If they can pull off what they say they’re trying to pull off, then I think it has value. So I’m willing to wait and see what it (the show) is,” said McCauley, an attorney in Austin, Texas.

But she said online: “We remain ready to respond in the event this ends up being the train wreck I think it is.”

In its statement, BET acknowledged that its other shows, including “Sunday Best,” an “American Idol”-like talent show for gospel singers, were being overlooked because of the furor.

The channel’s programming strategy is “to deliver smart, creative shows that explore the full range of the black experience,” BET said.

The newly renamed “We Got to Do Better” was characterized by BET entertainment chief Reginald Hudlin last week as an effort to take “a hard look at some dysfunctional elements of our community.”

“The intent of the show is no different than what Bill Cosby is doing as he’s going across the country and lecturing as he talks about the problems of the (black) community that we need to address,” he said.
http://www.msnbc.msn.com/id/19920494/





Drew Carey Ready to Take on ‘The Price Is Right’
Jacques Steinberg

Drew Carey was sitting in a Cracker Barrel restaurant in North Carolina a little over a month ago when his cellphone buzzed with a call from his agent. A CBS casting manager, Mr. Carey was told, was looking to talk to him.

“In my head,” Mr. Carey recalled today, “I start thinking, ‘They want me to be a guest on C.S.I.’ ”

No, Mr. Carey was gently informed, CBS was looking for someone to replace Bob Barker as host of “The Price Is Right.”

“Whoever does that is going to be an idiot or desperate for work,” Mr. Carey replied, or at least that’s how he recalled it today. “How would you like to fill a legend’s shoes? Get somebody else.”

Fast-forward to Monday night, when Mr. Carey announced during an appearance on “Late Show With David Letterman” that CBS had found its idiot. Beginning sometime this fall he will take over for Mr. Barker, who retired in June at 83 after 35 years on the job.

Which raises a question: was Mr. Carey that desperate for work?

“Well I don’t need the money,” said Mr. Carey, 49, whose two network series — “The Drew Carey Show” and “Whose Line Is It Anyway” — live on in lucrative reruns after ending within the last few years. And yet, while he wouldn’t disclose his new salary, he acknowledged that “I like the fact that I’m getting paid.”

But the most important factor in his decision, Mr. Carey said, was that he relished the idea of regularly giving away a new car or a new refrigerator or a vacation to somebody who probably really needed it. He acknowledged, for example, that his minimum tip — even for a hamburger at Denny’s, or a Coke at a Cracker Barrel — is typically $100, and sometimes much more.

“I just want to share the wealth,” he said. “And by doing ‘Price Is Right,’ that’s what I’ll be doing every day.”

As a long-time stand-up comedian who worked a lot of nights, Mr. Carey said he had become very familiar with “The Price Is Right,” because “it came on right around the time I was waking up.”

Asked to size up Mr. Barker’s appeal, Mr. Carey put it this way: “He has good empathy for all the players. He wants them to win. You can hug him. He went from being your dad and your uncle to your grandfather. You know, ‘He’s Bob, he’s on my side.’ ”

Mr. Carey said he hoped to bring a similar warmth to his new role, and that while he was confident he could extract plenty of humor from his guests’ anxieties — mainly through his efforts to try to calm them down — he would not seek to mine laughs by making fun of them. He also said he was confident that whatever dirty jokes he still liked to tell, particularly in places like Las Vegas, would stay in Las Vegas.

Regular viewers of “The Price Is Right,” he says, can rest assured that beyond getting used to his blond-brown crew cut in place of Mr. Barker’s white mane, little about the show will change. An announcer will still prod contestants from the audience with the signature “Come on down!” And beyond a few touch-ups, the set is also “going to look very familiar.”

One change that he and the producers are planning, he said, is periodically to take the show, which is based in Los Angeles, on the road, and broadcast for a week or so from various cities.

But beyond that, Mr. Carey said the biggest adjustment would be within his own head, as he adapts not only to his role on “The Price Is Right” but also as host of a new game show, “Power of 10,” which will make its debut on the prime-time schedule at CBS on Aug. 7.

“I’m going to be a game-show host the rest of my life,” Mr. Carey said. “I had to come to terms with that.”

And then he laughed.
http://www.nytimes.com/2007/07/25/ar...5cnd-care.html





Japanese Desert Prime-Time TV to Play on Their Nintendo Wii
Leo Lewis

The Nintendo Wii – the games console that is outselling Sony’s Play-Station 3 by three to one – has begun to “steal” prime-time television audiences in Japan.

The Nintendo machine, which was specifically designed to repackage video gaming as a family-oriented affair, is believed by media insiders to be responsible for an unprecedented decline in early-evening viewing figures for Japan’s top-rated shows.

According to one senior executive of the country’s largest commercial television channel, Fuji TV, families who used to tune in to its colourful diet of soap operas, panel games and comedy variety shows may, instead, be drifting away and choosing to spend the same, economically-critical “golden hour” time playing on their Wii.

His comments come as Japanese television executives are reeling in horror at recent figures from Japan’s audience-tracking firms: last week was the first in nearly two decades where no single show on any commercial station attracted more than a 9 per cent audience share.

“The quality of programming has always been a little cyclical in Japan, but there has never been a period of decline like the one we are seeing now. There are outside factors at work. One is people watching TV on their cell phones where we can’t track them, but the really big factor is the time people are spending on the Wii,” an executive of TBS, another major commercial channel, said. He added that the “theft” of audiences was taking place because television producers and programming directors were used only to the idea of competing for time with other channels.

Parents – the critical decision-makers of family entertainment between 7pm and 9pm – were being wooed by something more interactive than television offers at present.

He went on to say that, as a competitor for prime time, the Wii had yet to show its mettle in the face of a true rivalry. Major sports events, such as the Olympic Games, football World Cup or even the Japanese baseball season finale, have not yet joined the battle for the attention of Japan’s families.

Investors have already shown their excitement over the Wii, despite the fact that it has yet to produce a range of titles that appeal to so-called “hard-core” games enthusiasts. Nintendo’s stock has soared of late and the company now commands a greater market capitalisation than Sony – a rival that has a massive portfolio of businesses and eight times the global revenues of Nintendo.

The Wii console, which is controlled by a motion-sensitive baton, has introduced a range of new experiences to the $30 billion (£15 billion)-a-year games industry. Because the controller can be used to simulate everything from a bowling ball to a battle-axe, software designers have come up with a range of titles that encourage gaming in a wider target audience than Nintendo’s old constituency of eight-to-16-year-olds.

Analysts at Nomura, for example, pin high hopes on a forthcoming Wii game with the working title of “Wii Health”. The game is expected to offer its users a full range of workouts and fitness activities using the motion-sensitive controller; it is also expected to snatch market share from the many fitness and health shows that dominate the daytime television schedules. Given the versatility of the Wii controller – it could simulate any kitchen utensil from a fish slice to an egg whisk – the Wii might also stage an assault on that bastion of prime-time Japanese television, the celebrity chef cookery show.

Taking control

— Six million Wii consoles have been sold worldwide by Nintendo since its launch in November; it aims to sell 14 million this year

— 1.73 million units were sold in America between January and May at $250 apiece

— The Wii sold 271,000 units in Japan last month, six times the number of Sony PS3 consoles

— The Wii console sells in the UK for about £199, but demand continues to outstrip supply

http://business.timesonline.co.uk/to...cle2056279.ece





Video Game Matches to Be Televised on CBS
Seth Schiesel

The magic of television has already transformed everything from motorcycle acrobatics to poker into living-room spectator sports, not to mention turning competitive singing into a national obsession. Next on the list: video games.

Tomorrow at noon, CBS, the august home of the Masters and March Madness, will become the first broadcast network in the United States to cover a video game tournament as a sporting event.

So viewers flicking channels looking for a ballgame or golf tournament may instead encounter a couple of young guys rocking out on plastic guitars, or some (literally) disembodied digital boxers throwing uppercuts, or a fanciful animated wizard casting a spell.

“Who knows, in 10 years we could be looking back on this as a very significant moment,” said Rob Correa, senior vice president for programming at CBS Sports. The network’s broadcast will consist of edited moments from the World Series of Video Games tournament, held in Louisville, Ky., last month.

“There are an enormous amount of people of all ages who play video games these days, so we’re going to try to see if video games’ popularity can translate into a viable television audience,” Mr. Correa said.

CBS’s broadcast suggests it can. This is not the first time video game coverage has appeared on television. Cable networks like Spike, ESPN and USA have occasionally shown game coverage (to modest ratings), and smaller networks like G4 and Gameplay HD have carved out a niche by focusing on gaming culture.

Still, for most of the last two decades gaming has been considered an odd, insular subculture, the territory of teenage boys and those who never outgrew their teens. But now, as the first generation of gamers flirts with middle age, and as family-friendly game systems like Nintendo’s Wii infiltrate living rooms around the country, video games are beginning to venture beyond geekdom into a region approaching the mainstream.

The dollars are already quite mainstream. Americans bought about $13 billion worth of video game systems and software last year, more than they spent at the film box office (around $10 billion). Advertisers for Sunday’s broadcast include KFC, Intel and the Marines.

But for gaming to make it as a major-network TV sport, the big hurdle will be translating a medium that is by its nature meant to be experienced firsthand into a compelling hands-off spectator experience. It is a task that in some ways is no less daunting than that of the early baseball television producers who eventually realized that a camera way out in center field would provide the best view of pitches.

“Without a doubt the biggest question is: How do you make watching the television show fun for a viewer who’s not actually playing the game?” Mr. Correa said. “Clearly video games have always been a participant sport, if you will, and that’s going to be the challenge.”

In a windowless editing suite in Chelsea last week, a video editor named Jesse Gordon was working on the CBS footage. Hovering over a blinking control console, he spun a video clip forward and back. On a small constellation of screens, a mage, a priest and a rogue — characters in the game World of Warcraft — burst into a castle courtyard in search of an enemy.

It was a scene that would have been instantly familiar to millions of gamers. It was not, however, one that would initially make any sense to millions of sports television watchers.

And so, along the bottom third of the screen, Mr. Gordon had added six fat red health meters, like digital fuel gauges, reflecting the fortunes of the game’s players. For anyone actually playing the game, the same information would be conveyed by just a few minuscule pixels tucked in a corner of the screen.

“We need to add the health bars so TV viewers can understand what’s happening,” Mr. Gordon said. “Otherwise, forget it.”

Other assists for those unfamiliar with gaming will include explanatory boxes on screen (“Iceblock: a spell that encases a player in ice, protecting him from enemy spells”), play-by-play announcers and hosts, like Greg Amsinger and Susie Castillo, better known, respectively, for college sports shows and MTV’s “Total Request Live.”

The producers have even tweaked some of the games’ rules to make them more viewer-friendly. For example, in Guitar Hero II, players are normally scored on how accurately they pretend to play the notes for various rock anthems. But for the broadcast, a score from a showmanship judge has been factored into the result. Naturally, the crowd goes wild.

“Every sport and every entertainment medium has to be presented differently, and we’re just starting to figure out what works for video games,” said Matthew Ringel, president of Games Media Properties, the company that produced the World Series of Video Games, the finals of which CBS is broadcasting.

“The audience knows how to watch a music video. They know how to watch boxing. And now all of a sudden they’re in this fantasy world. So we need to bring them into that world and give them the help they need to understand what’s happening.”

Not coincidentally, the other two games in tomorrow’s broadcast most resemble a music video (Guitar Hero II) and a boxing match (Fight Night Round 3). What will not be seen are violent shooting games like Halo and Quake; CBS was adamant that on a Sunday afternoon on broadcast television, only relatively tame games would suffice.

While representatives for the other major broadcast networks said they had no plans to cover video games as a sporting event, CBS is planning to broadcast at least two more video game programs this year.

For gamers, the national model to emulate is South Korea, where video games are one of the dominant pop-culture pastimes and where there are at least three full-time video game television networks akin to ESPN. But for now, they and the rest of the viewing public will have to make do with this first attempt at making games a mass spectacle.

Mr. Ringel of Games Media Properties said, “I know we’re not ‘American Idol’ yet.”
http://www.nytimes.com/2007/07/28/ar...on/28vide.html





ISP Seen Breaking Internet Protocol to Fight Zombie Computers
Ryan Singel

Internet service provider Cox Communications is reportedly diverting attempts to reach certain online chat channels and redirecting them to a server that attempts to remove spyware from the computer. By doing so the company seems to be attempting to cleanse computers of malware that hijacks the computers resources to send spam and participate in online service attacks as part of a large network of compromised computers known as a botnet.

Specifically, Cox's DNS server is responding to a domain name request for an Internet Relay Chat server. Instead of responding with the correct IP address for the server, Cox sends the IP address of its own IRC server (70.168.70.4). That server then sends commands to the computer that attempt to remove malware.

The resulting chat session, as reported to a network administrator mailing list, looks like this:
#martian_
[INFO] Channel view for "#martian_" opened.
-->| YOU (andrew.m) have joined #martian_
=-= Mode #martian_ +nt by localhost.localdomain
=-= Topic for #martian_ is ".bot.remove"
=-= Topic for #martian_ was set by Marvin_ on Sunday, July 22, 2007 2:55:02 PM
=-= Topic for #martian_ is ".remove"
=-= Topic for #martian_ was set by Marvin_ on Sunday, July 22, 2007 2:55:02 PM
=-= Topic for #martian_ is ".uninstall"
=-= Topic for #martian_ was set by Marvin_ on Sunday, July 22, 2007 2:55:02 PM
=-= Topic for #martian_ is "!bot.remove"
=-= Topic for #martian_ was set by Marvin_ on Sunday, July 22, 2007 2:55:02 PM
=-= Topic for #martian_ is "!remove"
=-= Topic for #martian_ was set by Marvin_ on Sunday, July 22, 2007 2:55:02 PM
=-= Topic for #martian_ is "!uninstall"
=-= Topic for #martian_ was set by Marvin_ on Sunday, July 22, 2007 2:55:02 PM
<Marvin_> .bot.remove
<Marvin_> .remove
<Marvin_> .uninstall
<Marvin_> !bot.remove
<Marvin_> !remove

Though clever, the tactic is being heavily debated by networking experts on the NANOG mailing list, some of whom question the effectiveness of the technique and who question whether blocking access to the channels for all users (by breaking the DNS protocol) in order to stop some malware is the appropriate solution. Cox does not seem to be blocking all IRC channels, but anyone trying to reach those channels using Cox's DNS servers will be unable to reach them.

Professor Steven Bellovin wrote that the tactic shows why DNS lookups should be digitally signed to show their authenticity:

If my host expects the response to be signed and it isn't, my host can scream bloody murder. The whole point of DNSSEC is to prevent random changes to DNS replies, whether by hackers or by ISPs.

Yes, they can change it, but they can't change it without being caught.

IRC channels are heavily used by programmers, non-traditional communities and black-hat hackers, among others. The malware-infected zombie computers Cox is attempting to clean can also be controlled remotely by having them connect to an IRC channel where they get instructions from their controller.

UPDATE: Andrew Matthews, who runs one of the redirected IRC servers, first reported this behavior to the NANOG list and has more info on his own site.

Adam Waters of Support Intelligence gives a hearty thumbs-up:

[ I]t can't be a surprise that the ISP's have come, at long last, to fixing zombies without customer notification/consent.

At this point the threat to the fundamental trust and usability of the network surpasses my privacy, or technical concerns around breaking DNS.

Frankly, redirecting requests to malware sites, or IRC communication channels, to cleaner-sites sounds like a practical short term tactic to me. And if it raises awareness around the seriousness of the bot problem I'm all for it.

Sean Donelan, a NANOG regular, tells THREAT LEVEL there's nothing to see here, really, just a minor glitch with abuse watch lists.

The folks responsible for this particular signatures have fixed it and are pushing out the corrections to all the right places.

What different ISPs do with abuse feeds varies. Some ISPs just watch, some block, some redirect the traffic. Most of the time it has little effect on "normal" Internet users because ISPs are very, very conservative before taking any action. But sometimes mistakes happen, just like a anti-spam list might accidentally list a major mail server.

You'll have to ask the ISPs themselves what they are doing, if anything. Just like spam filters, it varies all over the place. ISPs react to different things every day, so it won't be very consistent.
http://blog.wired.com/27bstroke6/200...en-breaki.html





Storm Worm Erupts Into Worst Virus Attack In 2 Years

Storm worm authors are blasting the Internet with two types of attacks, and both are aimed at building up their botnet.
Sharon Gaudin

The Storm worm authors are waging a multi-pronged attack and generating the largest virus attack some researchers say they've seen in two years.

"We are basically in the midst of an incredibly large attack," said Adam Swidler, a senior manager with security company Postini. "It's the most sustained attack that we've seen. There's been nine to 10 days straight days of attack at this level."

Swidler said in an interview with InformationWeek that the attack started a little more than a week ago, and Postini since then has recorded 200 million spam e-mails luring users to malicious Web sites. Before this attack, an average day sees about 1 million virus-laden e-mails, according to Postini. Last Thursday, however, the company tracked 42 million Storm-related messages in that day alone. As of Tuesday afternoon, Postini researchers were predicting they would see that day between 4 million and 6 million virus e-mails -- 99% of them associated with the Storm worm.

While the number of spam e-mails has dropped significantly, it's still far above normal levels, so Swidler isn't ready to say the attack is over.

The viruses are not embedded in the e-mails or in attachments. The e-mails, many of them otherwise empty, contain a link to a compromised Web site where machines are infected with a generic downloader. This helps pull the computers into the malware authors' growing botnet, while also leaving them open for further infection at a later date.

"This is designed to add computers to the botnet," said Swidler. "That's first and foremost their goal."

But the Storm worm authors aren't contenting themselves with this one attack vector.

Paul Henry, VP of technologies with Secure Computing, said in an interview that the electronic greeting card spam scam that the Storm worm authors launched early in July is stronger than ever. He noted that a friend of his has a company with 100 users and they're being hit with about 300 e-card spams every day.

"Back in December, we saw a huge spike in e-card spams because of the holiday," he added. "We are at the levels we were seeing back in December right now Most security professionals thought it would show up for Independence Day and then fade immediately, but it's been escalating for the last few weeks. It's definitely a pain point."

Again, the e-card spam message, which install rootkits in the infected computers, are working to build a botnet. Henry could not say if it's the same botnet as the other messages are building.

"I have seen thousands of these e-mails since Independence Day. It's got to be working for them or they wouldn't keep doing it," said Henry.

Just a few weeks ago, the Storm worm authors began trying to trick users with fraudulent e-mails warning unsuspecting users about virus or spyware infections. Users around the world were receiving spam messages claiming that viruses or spyware had been detected on the users' systems. It was another attempt to lure users to malicious sites where their computers could be infected.
http://informationweek.com/news/show...leID=201200849





GPCode Evolution
Lance James

This report contains a description of the more obscure, previously undocumented traits belonging to the GPCode/Glamour trojan. The code is a modified version of the Prg/Ntos family which was detailed in depth during our Encrypted Malware Analysis in November 2006. While a majority of the functionality has not changed since then, this recent variant is distinctive enough to warrant additional research. In particular, the trojan is now equipped with the ability to encrypt a victim’s files on disk. The motive for adding this feature is clearly monetary, as the victim is advised that the files will remain encrypted unless $300 is turned over to the authors, in exchange for a decryption utility.

This trojan also retains the functionality of hooking API functions to steal information from victims, just like the older ones. As an update, in the 8 months since November, we’ve recovered stolen data from 51 unique drop sites for use with Intellifound. The 14.5 million records found within these files came from over 152,000 unique victims.

In the forthcoming analysis, we will explore the key points of interest regarding this new feature. We will also present how the encryption algorithm was reverse engineered to build our own decryption program, how users can help protect their file systems in the future, and some interesting tid-bits of information that is only revealed through binary disassembly.

GPCode Evolution Report is available here:

Source code for the decrytor is available here:
http://www.securescience.com/secures...evolution.html





Firefox and Internet Explorer 7 Still Not Getting Along

The bickering between Microsoft and the Mozilla Foundation about registered protocol handlers and the resulting security problems continues. A new demo has been published, illustrating how the latest version of Firefox running under Windows XP SP2 can be made to start an application using crafted links. Clicking on a manipulated mailto:, nntp:, snews: or news: link opens the command line and the Windows calculator. In principle, any command can be executed and code can be injected and executed via a website in this way.

However, for the demo to work, Internet Explorer 7 needs to be installed. If only Internet Explorer version 6 is installed, only the standard mail client Outlook Express opens. It is not entirely clear what role is being played by Internet Explorer 7 here. Installing IE 7 clearly changes the way Windows processes URIs. This is clearly illustrated by what happens if you pass the "bad" link directly to the Windows shell via the "Run" option in the Start menu. With IE6 installed, Outlook Express is launched, with IE7, cmd.exe and the calculator.

According to the Bugzilla entry for this problem, one reason for the new vulnerability is that Windows XP interprets the string %00 incorrectly. As a result, instead of the URL protocol handler, the FileType handler is called with the complete URL, via which it is then possible to call further programs with arbitrary arguments. To defuse the problem, the Firefox developers want to prevent the opening of links containing null bytes (%00). A patch implementing this has already been introduced into the development version. Until a new official version of Firefox is released, there is no viable workaround yet.

The question of who is responsible for this vulnerability is again likely to be the subject of heated debate. In the previous cross browser vulnerability, Internet Explorer was passing crafted URLs to Firefox. In that case, the IE team denied all responsibility, stating that, "It is the responsibility of the receiving (called) application to make sure it can safely process the incoming parameters." If this is the case, then it would be Microsoft rather than Mozilla who find themselves forced to make the next move in remedying the unsafe behaviour.

The authors of the demo note that there are many further examples of such vulnerabilities via registered URIs. What is so far visible is just "the tip of the iceberg". They state that registered URIs are tantamount to a remote gateway into your computer. To be on the safe side, users should, in the authors' opinion, deregister all unnecessary URIs - without, however, elucidating which are superfluous.

The Windows scripting host tool Dump URL Handlers should offer assistance in tracking these down. It searches through the registry and shows all registered URIs and the associated application. According to the programmer, the authors of the exploit also used this tool during their bug search.

Update:
The latest version of the Firefox extension NoScript also filters URLs that are passed to external handlers. Once installed, at least the demo exploits only open empty windows, while for example normal mailto:-URLs still work.
http://www.heise-security.co.uk/news/93384





Search Sites Tackle Privacy Fears

User worries are driving search firms to let people manage how much data they reveal when they visit the sites.

The top four search sites, Google, Microsoft, Yahoo and Ask, have unveiled plans to cut how much data they hold and how long they store it.

Going furthest Ask said it would let users search without surrendering any data about themselves and their PC.

At the same time Microsoft and Ask have called for an industry-wide deal to draw up standards on user privacy.

Privacy please

The rush to improve privacy policies was started by Google in March when it announced it would start deleting the final parts of the individual address it collects from each user's computer after 18 months.

Google said it would only keep data for longer if legally compelled to do so.

Earlier this month the firm announced that its cookies would expire two years on from a user's last visit. Prior to the policy change they were set to last until 2038.

A cookie is a tiny text file that huge numbers of websites, including the BBC, use to track users and record how they like to use a particular site.

Microsoft is expected to make a similar announcement to separate the identifying address and other data from searches after 18 months. The information will be held for longer if users request it.

Yahoo said it would delete identifying addresses and cookies after 13 months unless users want the data held longer or law enforcement agencies require it to store the information for longer.

Ask is taking the most radical step by unveiling plans for a tool called AskEraser which, it claims, will let people tune whether data is gathered about them on a search-by-search basis.

The tool is expected to be available in the US and UK by the end of 2007 and in other nations soon after that.

Following the announcements Microsoft and Ask released a joint statement calling on search firms to draw up shared standards that will define what data is collected, what is done with it and how it is used to drive advertising.

"People should be able to search and surf online without having to navigate a complicated patchwork of privacy policies," said Peter Cullen, Microsoft's chief privacy strategist, in a statement.

Doug Leeds, vice president of product management at Ask.com, said: "Anonymous user data can be very useful to enhance search products for all users, but people should have access to privacy controls based on their level of comfort around the storage of their search data."
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/6911527.stm





Hollywood’s Jack Valenti, Through a Daughter’s Eyes
David M. Halbfinger

The encomiums began about as you would expect at the Thursday afternoon memorial service in Hollywood for Jack Valenti, the legendary chief of the Motion Picture Association of America. Media moguls like Peter Chernin of the News Corporation and Alan Horn of Warner Brothers affectionately recalled Mr. Valenti’s intellect, loyalty, friendship and sage counsel.

Then his daughter Alexandra delivered a highly personal eulogy that not only pulled back the curtain on Mr. Valenti, a consummately prepared and famously discreet man, but also took some shots at his colleagues, the news media and the current administration in Washington.

“By the way, he dropped the F-bomb plenty of times,” she said.

Mr. Valenti’s public persona has been all but carved into Mount Rushmore since his death April 26, but his daughter’s eulogy brought it into high relief with the acid wit of one who had studied him in extreme closeup.

A photographer and director, Ms. Valenti, 38, nervously said she wished she had actually read her father’s book on public speaking, rather than merely searching for her name in the index. (“I learned that from him,” she said.)

“My father’s death has rocked me,” Ms. Valenti went on, saying it felt “like an acid trip, without any of the psychedelic fun.” She said she now understood what Mr. Valenti had meant when he advised her to “hunker down like a jackass in a hailstorm.”

She recalled taking a call from Warren Beatty, in which the actor said that her father’s stroke had been “really inconvenient for me.” Ms. Valenti said she had retorted that Mr. Beatty had some nerve: “You got two pages in his book, and I got two paragraphs.”

This was clearly not the eulogy people were expecting.

Ms. Valenti said her father had called her “my tumultuous daughter,” and there was much history, and much love, between them. “I was a moody and emotional kid,” she said. “But thanks to my lovely team of therapists, that he shelled out for, I’m able to embrace our past.”

Her father was also the kind of man, she said, “who shows up at his daughter’s birthday party at 1 a.m. so he can give her a hug.”

Saying her father had “more energy than me and all of you,” Ms. Valenti lamented what her father would miss: movies, elections and “the conversations about how incompetent the president is.”

“I hope I’m not betraying his confidence,” she quickly added.

Mr. Valenti clearly loomed as large in his daughter’s eyes as he did in Hollywood’s.

“He had a not-so-conscious belief in his own immortality,” she said. “He used to say to us, ‘If I die.’ And I believed him.”
http://www.nytimes.com/2007/07/23/bu...23valenti.html





Lohan’s Arrest Spells Trouble for 2 Movies
David M. Halbfinger

Lindsay Lohan’s arrest on felony drug charges early Tuesday came at the worst possible time for TriStar Pictures, which plans this weekend to release “I Know Who Killed Me,” a low-budget thriller in which she stars.

Ms. Lohan had been set to promote the $12 million movie on “The Tonight Show” Tuesday night, but her appearance was abruptly canceled shortly after her arrest.

But the larger casualty of Ms. Lohan’s latest encounter with the law — setting aside the incalculable damage to her acting career — may be an independently financed project in which she was to have played only a supporting role.

That film is “Poor Things,” a fact-based dark comedy starring Shirley MacLaine and Olympia Dukakis as women who take out insurance policies on homeless people, only to kill them. Ms. Lohan, 21, was to play the niece of Ms. MacLaine’s character, and filming was to have started in three weeks.

With Ms. Lohan now presumably unavailable, it is unclear whether the film’s financing will hold together, two people involved with the film said Tuesday.

More broadly, Ms. Lohan’s arrest prompted veteran talent managers to issue dire warnings about the actress’s prospects if she is unable to clean up her act.

“I hope they put her in jail for as long as they can,” said Bernie Brillstein, whose company has represented John Belushi and Chris Farley. “Maybe she’ll realize how serious it is. I believe she’s uninsurable. And when you’re uninsurable in this town, you’re done.”

Ms. Lohan’s publicist and manager did not respond to messages.

The police said that Ms. Lohan was arrested after an alcohol-fueled pursuit of the mother of her former personal assistant on the streets of Santa Monica; she was charged with two misdemeanors as well as two felony charges of cocaine possession, after the drug was found in her pocket.

Production of “Poor Things,” which is to be directed by Ash Baron Cohen, was initially to have begun May 30, but was derailed four days earlier when Ms. Lohan crashed her Mercedes and was charged with driving under the influence. Photos taken two days later showed her passed out with her mouth open after a night of partying, and she checked herself into the Promises rehabilitation facility.

“Poor Things” was put on hold, but people involved in the movie said that Mr. Baron Cohen, the producers, and cast members like Ms. MacLaine all visited Ms. Lohan in rehab and rehearsed with her several times. “They believed in her,” one of the people said.

Ms. Lohan’s appearance at a Las Vegas nightclub wearing her alcohol-monitoring ankle bracelet precipitated a crisis over the financing of “Poor Things” last week, and a news report — which proved false — said that the movie had been killed. A statement assuring the industry that the opposite was true was scheduled to be put out sometime Tuesday, a person involved in the film said.

But after Ms. Lohan’s arrest, a different statement was released. In it, Rob Hickman, the film’s producer, said: “We continue to be enthusiastic in our belief in ‘Poor Things,’ and our sole focus is moving this film into production. We expect to announce details on a start date in the very near future.”

TriStar Pictures, meanwhile, has played down Ms. Lohan in the marketing of “I Know Who Killed Me” as much as possible, given that she plays not just one but possibly two lead roles and is on screen in nearly every frame of the movie’s trailer.

The film’s marketing campaign was adjusted to adapt to Ms. Lohan’s rehab program, but one person familiar with the plans said that TriStar quickly booked her on “The Tonight Show” with Jay Leno after she checked out of Promises last week.

The film has not been screened for critics, but TriStar frequently skips screenings for its horror and thriller offerings. Executives at TriStar, a division of Sony Pictures Entertainment, declined to comment.

Another finished film starring Ms. Lohan and Jared Leto, “Chapter 27,” about John Lennon’s assassin, Mark David Chapman, won critical support at the Sundance Film Festival but has not found a distributor.
http://www.nytimes.com/2007/07/25/bu...ia/25sony.html





YouTube Questions Shake Up the Democratic Debate
Nedra Pickler

Lesbians asking about gay marriage. Two unrelated parents with sons in Iraq asking about the war. And a snowman asking about global warming?

Video questions submitted to the hip Web site YouTube shook up the usual campaign debate Monday night. The questions, most of them coming from young people, were blunt and earnest, yet sometimes bizarre.

"He needs help," Delaware Sen. Joe Biden said after watching a video of a man holding an automatic weapon and asking how the candidates would protect his "baby." "I don't know if he's mentally qualified to own that gun."

The revelations that the questions elicited ranged from the ridiculous to the grave. John Edwards didn't like Sen. Hillary Rodham Clinton's bright coral jacket. More seriously, Illinois Sen. Barack Obama would be willing to meet individually with the leaders of Iran, Syria, Venezuela, Cuba and North Korea during the first year of his presidency, while Clinton would not.

"I don't want to be used for propaganda purposes," she said. Her campaign quickly posted video of her answer online, trying to show she has a different understanding of foreign policy than her chief rival.

The innovative questions added a 21st-century twist to the oldest forum in politics - a debate.

"The greatest innovation of this debate is that we're seeing candidates respond to real voters instead of polished TV personalities," said Michael Silberman of the online consulting firm EchoDitto. "It's a win for the candidates who are at their best when addressing voters. It's a win for democracy, since average Americans outside of the early primary states now have the opportunity to ask direct questions of candidates."

Two video submissions featured men singing about topics that usually aren't the stuff of lyrics - taxes and the No Child Left Behind education bill. The first question began with a voter named Zach asking, "Wassup?" Another featured two men from Tennessee playing hillbillies and asking if all the talk about Al Gore entering the race hurt their feelings. "I think the people of Tennessee just had their feelings hurt," Biden responded.

Because the questions were asked differently, candidates normally loath to stray from talking points had to answer differently, said Democratic consultant Dan Newman. "Future debate organizers will take note and look for unique gimmicks to keep the countless debates interesting during this marathon campaign," he said.

Democratic strategist Kiki McLean said the format got the candidates to speak "in real language, not citing legislative bill numbers."

Yet sometimes they had to be pressed to answer directly. Moderator Anderson Cooper had to ask Clinton three times whether she would put U.S. troops into the Darfur region of Sudan before she answered no. After a video of a pastor asking Edwards if it's acceptable to use his religion to deny gay marriage, Edwards talked about his personal conflict over the issue. The pastor was sitting in the audience and said he didn't hear everything he wanted to hear. Edwards responded flatly that it's not right to use religion to deny anyone their rights and he won't do it.

The candidates were asked whether they would take the presidency at minimum wage. Most said yes. "Well, we can afford to work for the minimum wage because most folks on this stage have a lot of money," Obama said. When Connecticut Sen. Chris Dodd tried to protest that he wasn't in the same league, Obama said, "You're doing all right, Chris."

Questions about health care came from brothers spoon-feeding dinner to a father suffering with Alzheimer's, a woman sitting with her mother suffering from diabetes, a man in a wheelchair and a 36-year-old woman who pulled off her wig and declared her hope to be a breast cancer survivor.

"We should be outraged by these stories," Edwards said, his voice rising as he pounded his podium.

Their struggles fit in perfectly with Edwards' message of the night - there are too many important issues to focus on the $400 haircuts that he got and are dogging his campaign. Candidates were asked to produce their own YouTube-style videos, and Edwards set his to the theme from the 1968 musical "Hair." It includes serious images including several from Iraq and ends with the text: "What really matters? You Choose."

Dodd's video also was about his hair. "The guy with the white hair for the White House," it said. Clinton's video-ad ended with the kicker, "Sometimes the best man for a job is a woman."

The candidates gathered at the military college The Citadel in South Carolina, site of one of the earliest primaries - Jan. 29. Many questions focused on the Iraq war.

Asked if Democrats are playing politics with the war, Rep. Dennis Kucinich of Ohio said yes. "The Democrats have failed the people," he said.

Former Alaska Sen. Mike Gravel said U.S. soldiers are dying in vain. No other candidate would go that far.

Obama took the opportunity to take a slap at his rivals who voted to give Bush authority to invade Iraq. "The time to ask how we're going to get out of Iraq was before we got in," he said, without naming Clinton, Edwards and others.

Gov. Bill Richardson of New Mexico said he's the only candidate pledging to remove troops within six months. "Our troops have become targets," he said. Biden of Delaware said Richardson's goal was unrealistic.

Sensing her position was under attack, Clinton bristled as she argued that U.S. troops must be removed from Iraq "safely and orderly and carefully."

The Democratic gathering marked a turning point in political communications. CNN, a landmark all-news cable network when founded 27 years ago, is now part of a media establishment coming to terms with upstarts like the 2 1/2-year-old online video community. CNN and YouTube planned to host a similar event for the nine Republican candidates on Sept. 17.

The debate aside, YouTube has already left its mark on politics. Republican George Allen lost his Senate seat and a likely spot in the 2008 presidential race after a YouTube video caught him referring to a man of South Asian decent as "macaca" - an ethnic slur in some countries.

In the presidential campaign, buzz-worthy video clips have included Bill and Hillary Clinton's spoof of "The Sopranos" finale, Edwards' combing his hair to the tune "I Feel Pretty," and a buxom model professing her crush on Obama.

Most of the candidates use social networking tools popularized by YouTube and MySpace.com to draw voters to their sites and create a sense of community. Some of the Democratic candidates planned to answers supporters' questions on their sites after the debate.
http://hosted.ap.org/dynamic/stories...07-24-08-20-52





TiVo Launches Low-Priced HD Digital Video Recorder
AP

When TiVo Inc. introduced a high-definition digital video recorder last fall, it touted the long-awaited set-top box as a best-in-class product with a price tag to match.

But in a market already filled with lower-priced offerings from cable companies and other rivals, TiVo's $800 Series3 HD Digital Media Recorder had a hard time winning customers, even as throngs of consumers opened their wallets for high-definition televisions during the holiday season.

This year, TiVo hopes to widen its appeal with a more affordable model: the TiVo HD DVR for $299.99.

The Alviso, Calif.-based company will begin taking pre-orders for it on its Web site Tuesday, and units are expected to hit retail outlets by early August.

"It won't suddenly unlock the door and sell millions," said James McQuivey, a vice president and analyst at Forrester Research. "But this seems like a good way to satisfy people who want the high-quality experience that TiVo is known for -- with a product that will move off store shelves."

The TiVo HD DVR has many of the same technical features as its higher-priced Series3 cousin. It has two tuners, so subscribers can record two different shows in HD at the same time while watching a third, prerecorded show. It also has two built-in slots for CableCARD, allowing users to access digital programming without a separate device from the cable TV provider.

The new model will have a smaller hard drive -- 160 gigabytes instead of 250 GB, storing about 20 hours of high-definition programming or up to 180 hours of standard programming. The device has an external hard drive port for expanded storage but TiVo officials say that feature won't be activated until later.

The less expensive model comes with a more basic remote control and sports an exterior less slick in design. You won't find curved, brushed metal edges and a liquid-crystal display; the new model uses a simpler dot-matrix-like LED-type of screen instead. It also lacks the high-quality audio and video certification from THX Ltd. found on the Series3 DVR.

Analysts expect the new product will be more attractive based on price.

"TiVo has a loyal customer base .. and we believe there will be demand from consumers to get rid of the cable box and old TiVo box for the HD solution," JMP Securities LLC analyst Ingrid Ebeling wrote in a client note in April, initiating the firm's coverage of the DVR provider.

"We're seeing a desire for HD everything," Mr. McQuivey said, "and it would have been a missed opportunity for TiVo to not introduce a more affordable product."

Although TiVo pioneered digital video recording technology, its stand-alone DVRs have struggled to compete against cable and satellite operators that provide DVR services at half the price or less than TiVo's monthly subscriptions. Furthermore, the rivals often lease the DVR set-top boxes to their customers for free.

TiVo last reported in May it had 4.3 million subscribers. It also reported its first-ever quarterly profit for the three months that ended in April but forecast a return to a loss in the current quarter because of increased costs from an advertising campaign.
http://online.wsj.com/article/SB1185...googlenews_wsj





Apple TV Hack Allows External USB Storage

At last someone has developed a patch to expand the Apple TV's storage through its USB 2.0 port, using the internal hard drive to boot and one fat external 2TB drive to stockpile as many TV series, photos and porn movies as you want. Yes, Cupertino, resistance to hackers is futile, I'm afraid. The process is not difficult.

For this recipe you will need one ssh-enabled Apple TV, one sightly battered Intel Mac or Intel-based Linux/Unix system, one installed version of Mac OS X 10.4 Intel, one clean, "original, unmodified copy of the 'mach_kernel.prelink' file from the Apple TV," one external USB drive, generous amounts of sightly peppered raw courage and a liberal quantity of chilled sherry.

For cooking, first format the external USB drive as Journaled HFS+ in Mac OS X and leave it aside. You won't need it until the end.

Run the script and back up your Apple TV using the included instructions. Now drink some sherry. After five minutes the Apple TV will reboot. Turn it on again without connecting the USB drive until the flying-TV-screens introduction sequence finishes. When you connect the USB the contents from the internal drive will be copied to the external one. That's why the chefs for this recipe, Patrick Walton of University of Chicago and Tom Anthony from Apple TV Hacks, recommend you to "erase the content of your internal hard drive first so that there is no need to copy the content." Finish the sherry or pour yourself another glass.

The Apple TV will restart automatically after the content is copied and from that point on the USB disk will be used as content storage. Unfortunately this will leave the internal drive empty save for the operating system - but, quite frankly, who cares when you are going to end up with a 2TB Apple TV, specially after all that chilled sherry?

If you think the process to enable what should have been a feature since the beginning is not for the faint-hearted, hopefully someone will release a graphic patcher soon. Otherwise, go for it carefully and enjoy.
http://gizmodo.com/gadgets/gigantast...age-283532.php





Cable Without a Cable Box, and TV Shows Without a TV
John R. Quain

HOW would you like to use your video-game console to tune in “Big Love” on your television? Or perhaps use your DVD player to download “The Departed” while you watch a ballgame? Those features are now possible, thanks to some new devices and recent rule changes governing cable television service. Just don’t throw out your old cable box quite yet.

The key to this new world of TV entertainment is a Federal Communications Commission rule that went into effect July 1. Cable companies in the United States now have to separate the security functions that prevent you from watching channels you haven’t paid for from the TV tuner box most of us rent.

The practical result of the rule is that cable companies now have to supply set-top boxes that come with a removable CableCARD. The cards, which look like the PC Cards used in notebook computers, contain the information necessary to unscramble digital cable channels like HBO.

But they could allow other equipment to become much more versatile. The cards are designed to be inserted into a host of other devices, including TVs, digital video recorders (DVRs) and computers. Companies like Toshiba, Panasonic, Microsoft and Hewlett-Packard have sought this breakthrough for years because it opens an array of features for CableCARD-equipped devices. Cable companies have resisted the idea, which should surprise no one.

“CableCARDs don’t add anything to your TV viewing experience,” said Alex Dudley, a Time Warner Cable spokesman. He added that for several years the company has offered CableCARDs to customers who requested them.

Cable companies also point out that CableCARDs cannot support all the features offered by many cable TV services, such as two-way communication for video on demand or voting on surveys like those done by New York City’s NY1 channel.

“CableCARDs may not make a material difference to most consumers in the near term,” said Ross Rubin, an industry analyst with NPD Group, “but they have the potential to offer a lot more choices in the future.” Rubin said that CableCARDs have been difficult for consumers to obtain and that the new regulation is likely to make them more available.

A CableCARD could reduce your monthly cable bill. Cablevision, for example, charges its customers $6.25 a month for a set-top box but charges only $1.25 a month for a CableCARD. Time Warner charges $9 a month, on average, for the set-top box and $2 a month for the card. One thing doesn’t change; the cable company will usually send a cable installer to your home to set up a CableCARD.

Of course, you still have to have some sort of device to plug it into to reap this benefit, and some of those machines are expensive.

Simplest of all are televisions that are equipped with the card slot. You won’t find inexpensive smaller sets with the feature, but there are a few widescreen, flat-panel sets with CableCARD slots. One example is LG Electronics’ 60PB4D, a 60-inch plasma display that also includes a built-in DVR and an on-screen program guide. Such high-end sets are expensive; the 60-inch LG model is $4,700. So initially, CableCARDs will appeal mostly to videophiles who want the best picture possible.

A CableCARD with a TiVo unit improves the picture for recorded programming by using the digital signal from the cable company. Without a card, a TiVo box has to use an analog signal from a cable box, which degrades the picture quality, and then use a gadget called an IR Blaster to control the cable company’s set-top box. A CableCARD removes both of these drawbacks.

TiVo and Amazon have announced that TiVo has upgraded its “Amazon Unbox on TiVo” service so that users can rent or purchase movies online and have them downloaded directly to their living room TiVo boxes — without the use of a PC. The new service finally brings videos directly from the Internet to the living room and effectively offers a video-on-demand option that can compete with similar services offered by cable companies. (You can start to see why cable companies oppose the card.)

However, TiVo customers must connect their set-top boxes to the Internet, usually using a wireless Wi-Fi adapter. And although you can get a standard-definition TiVo box for $99, a top-of-line, high-definition TiVo Series 3 box costs $800, in addition to the usual monthly subscription fee, which starts at $12.95. TiVo has just come out with a more affordable HD DVR with two CableCARD slots and up to 20 hours of HD recording, for $300.

The TiVo-Amazon service offers cineastes thousands of movies to rent, compared with the scant mainstream-only offerings of cable’s pay-per-view services. TiVo boasts other features that keep it ahead of cable, including the ability to schedule a recording at home over the Internet from, say, your computer at work, or to record videos automatically from Web-based channels. Services like this are encouraging others to begin selling CableCARD-ready set-top boxes.

Digeo, which already supplies set-top boxes to cable companies that in turn lease them to subscribers, says it plans to sell a new model in stores this fall. Digeo’s machine, the Moxi Multi-Room HD DMR, not only will include a TiVo-like DVR but also will let owners add more hard disk storage to expand the number of shows owners can record and store. Moxi owners will also be able to use the box to store music and pictures and watch recordings on TVs in other rooms. Prices for the CableCARD-ready box have not yet been announced.

Another option for those who want to free themselves from the cable box is to hook up a CableCARD-ready Media Center PC. Running Microsoft’s Windows Vista Ultimate platform, which supports CableCARD, systems like Niveus Media’s Rainer Edition not only include DVR functions but also play HD DVDs, play and record CDs, and let you surf the Web from your TV. But if you think leasing a cable box for $10 a month is expensive, the Niveus system isn’t for you. Niveus charges no monthly fee, but the Rainer box and accompanying digital tuner will set you back about $4,700.

Prices like that will keep most couch potatoes glued to their existing cable boxes. But many companies have hinted that they may offer CableCARD slots in other, less expensive devices soon. For example, Microsoft has been an ardent proponent of CableCARDs, but it doesn’t have a card slot yet in its Xbox 360, which already can be used to download movies. Adding one would put the console in a position to replace both DVRs and set-top cable boxes.

Even Scientific Atlanta, one of the largest makers of set-top cable boxes in the United States, concedes that consumers are likely to see a variety of CableCARD-ready devices appearing in the market. Indeed, Scientific Atlanta, which along with Linksys is part of the networking giant Cisco Systems, seems ideally positioned to offer a single box containing a digital cable tuner, DVR, broadband Internet access and wireless home networking. However, the company says it has no plans to offer such a product.

Combining games, video and Internet access on a home TV screen has long been the dream of those who advocate convergence. But after two decades of trying, no one has been able to deliver a successful convergence product. CableCARDs may finally make that happen.
http://www.nytimes.com/2007/07/26/te...sics.html?8dpc





Windows 7: Preventing Another Vista-esque Development Process
Thom Holwerda

Six months ago, after a long gestation period, Microsoft finally released Windows Vista. Vista is a huge release; not only because of the long list of new features, but also because of its sheer size, and number of bugs and other oddities and downsides. The development process that lead to Vista has left many with a very bitter aftertaste; features were cut, codebases were scrapped, release dates postponed. A few days ago, Microsoft released some sparse details on Vista's successor, internally dubbed 'Windows 7', and in order to prevent another Vista-like development cycle, here is what I would advise Microsoft to do. Update: APCMag reports that Julie Larson-Green, who was the driving force behind Office 2007's new Ribbon user interface, has been transferred to the Windows 7 GUI team.

Many have advised Microsoft to scrap the current Windows codebase, and start all over again - or, use something exotic like Microsoft Research's Singularity. None of that is necessary. The Windows NT kernel, upon which Windows NT, 2000, XP, Server 2003, and Vista have been built, is very much capable of driving a modern operating system. The kernel is portable (the NT kernel has been ported to MIPS, PPC (not only the Xbox 360, but also workstations), SPARC, Alpha, Clipper, and more), so it is ready for any future platform changes. The Week in Review is edited and published by Jack Spratts. This portability was also evidenced by the fact that Microsoft was fairly quick in releasing versions of Windows NT for IA-64 (Intel's Itanium) and AMD's 64bit processors (followed later by Intel's x86 64bit processors). NT has proven itself to be ready for any future platform changes that might happen in the desktop computing world.

Apart from being portable, the Windows NT kernel has also had a long time to mature. This is evidenced by the fact that kernel crashes (the infamous blue screens of death) have become an extremely rare occurrence in Windows Server 2003, Vista, and up-to-date installations of Windows XP (assuming you are not running any unstable kernel-mode drivers). Contrary to what some people stuck in 2001 want you to believe, current versions of Windows are stable as a rock, and the system barely crashes. The last time I saw a blue screen of death, was when I was using a highly unstable version of the Ati driver for my Radeon 9000. That was over 4 years ago.

Where Microsoft got its act together in the stability department later on in Windows XP's life cycle, they failed to do so in the security department. Despite its second service pack, Windows XP was not a very secure operating system. Microsoft made the fundamental error of not enforcing the strict security practices the Windows NT kernel provided the operating system with; as a result, application developers got sloppy.

With Vista, Microsoft finally saw the light of day, and implemented User Account Control - something that should have been standard on Windows NT since its very first version. And now, when running Windows Vista, the sloppiness I just mentioned gets painfully visible: even installing something as simple as a notepad application requires administrative privileges.

In conclusion, scrapping Windows NT would be a pointless exercise. It is a mature, stable, and, yes, secure system by design. Do not make the mistake of thinking that simply because Microsoft refused to enforce proper security policies from the get-go, that NT is an insecure system by design.

What Microsoft does need to scrap, is the userland it has built on top of NT. Anyone who has used Windows Vista on a day-to-day basis (I use it every day on my laptop) knows that Vista's userland is... Immense. Complex. This complexity stems from the one thing that has kept Microsoft on top of the operating systems game for so many years: backwards compatibility. It might not be perfect, but it sure is a millions times better than what the competition has to offer. Microsoft actually keeps copies of a lot of applications out there, and tests them to ensure compatibility is maintained. This is an extremely important aspect of Windows for many businesses, who may still run old DOS or Windows 3.x-based applications; in fact, the tills at the shop where I work are DOS applications. Sure, they look old and outdated, but I have been using them for 5 years (and some of my colleagues for 10-15 years), and they perform their job just fine.

For programmers, however, this desire to maintain backwards compatibility is a potential hell. This means that if you, as a Microsoft employee, have come up with a new killer feature, or maybe something less significant like a fix for long-standing minor bug, it needs to pass through a long process of testing to ensure backwards compatibility is not affected by your code. And if it does affect compatibility, your code needs to be rewritten, or, new patches need to be made to fix the compatibility breakage caused by your original patch. You can easily see how something like this is a restraint on many developers, and how it can hold back many envisioned improvements.

So, scrap the current Vista userland. Give the developers at Microsoft the breathing room to build an entirely new graphical user interface and other userland features on top of Windows NT. Do not make the common mistake of thinking that the programmers working at Microsoft are somehow magically less qualified than those working at Apple or on open-source projects. Various Microsoft Research projects have shown that there are a lot of bright minds among Microsoft's 71100 employees, and giving them the freedom to develop something new, without having to take almost 20 years of application compatibility in mind, could be a very wise thing to do. It would also be a morale boost among the employees.

This Windows 7 would have all the hardware compatibility the current versions of Windows NT have (since the kernel and base system are still compatible), so it would run on most modern machines. The userland could incorporate many new and fresh ideas, and it would make use of Windows NT's security features - and it would enforce those strictly upon application developers. In addition, it would incorporate a VM in order to run 200x/XP/Vista applications, similar to what Apple offered on the PowerPC version of Mac OS X (the Classic environment to run Mac OS 7-9 applications).

This would undoubtedly be devastating for Windows' market share. Removing backwards compatibility means business users would never buy into Windows 7, and that would mean a serious lack of cash-flow for Microsoft. Therefore, Microsoft needs to cater to business users and other people concerned about backwards compatibility by maintaining a version of Windows based on the 'old' Windows NT; call it Windows Legacy, if you will. This version of Windows would be Vista (or, more preferably, Windows Server 2003), receiving only security updates and bug fixes.

Would this require more developers than are currently needed? I doubt it. The legacy version would need little development - since all that needs to be done on that version is bug fixes and security fixes. It's a legacy version - no need for new features. And since the modern version does not require work on legacy stuff, greatly simplifying development, the end result would be that no more developers are needed than there are now. This is of course a bold statement, and only time can tell if that is actually the case.

There are a few things Microsoft ought to take care of when it comes to Windows 7's beta/RC stage and launch. Release developer previews early and often, to as many developers as possible. Provide excellent documentation on the new APIs and user interface, to allow the major ISVs to get to know Windows 7. When Windows 7 is released, provide its small userbase with fast updates and bugfixes, and provide service packs for free on a regular basis. Promote participation by creating easily accessible bug tracking systems, and allow openness among developers, and good interaction between them and the userbase. And, most importantly, do not introduce any feature until it is 110% sure it will make it into the final product.

This is what I advise Microsoft to do. Is it likely a similar course of action will pan out over the following years? No, I do not think so. Microsoft has invested far too much time and money into Vista to make it sizzle out in such a way. In other words, I am afraid we are going to be stuck with another Vista-esque release.

Sadly.

PS: Microsoft, whatever you do with Windows 7, please do not create 12946 different versions. Ship one version, at a fixed price, and be done with it. It will save the world a whole lot of headaches.
http://www.osnews.com/story.php/1830...opment-Process





PC Maker Acer Hits Out at Windows' Vista Operating System

Microsoft's Windows Vista operating-system software is on display at a store in Fairfax, Virginia. The head of Taiwan-based personal computer maker Acer, Gianfranco Lanci, hit out at the Vista operating system, saying that the "entire industry" was disappointed by it.

The head of Taiwan-based personal computer maker Acer, Gianfranco Lanci, hit out at Microsoft's Windows Vista operating system, saying that the "entire industry" was disappointed by it.

"The entire industry is disappointed by Windows Vista," the head of the world's fourth-biggest PC maker told the Financial Times Deutschland in its online edition on Monday.

Never before had a new version of Windows done so little to boost PC sales.

"And that's not going to change in the second half of this year," Lanci said.

"I really don't think that someone has bought a new PC specifically for Vista," he added.

Microsoft's operating system commands a market share of around 90 percent, with Apple and Linux accounting for the rest.

While the industry had waited for years for Vista, the software was not really ready when it was launched to great pomp at the start of this year, Lanci complained.

"Stability is certainly a problem," he said.

Acer, with annual sales of 11.3 billion dollars (8.2 billion euros), ranks number four in the PC market behind Hewlett-Packard, Dell and Lenovo.
http://www.physorg.com/news104405791.html





Sanity Check: How Microsoft Beat Linux in China and What it Means for Freedom, Justice, and the Price of Software
Issue: Microsoft’s big win in China

Who remembers Red Flag Linux? Born during the dot-com boom and officially financed and adopted by the Chinese government, Red Flag Linux was supposed to be China’s answer for avoiding the double-team of Windows and Microsoft Office that dominates the rest of the world’s PCs. In some circles, the potential spread of Red Flag Linux in the world’s most populated nation was even hailed as a critical sign that Microsoft was not going to be able to spread its domination of the software market to the rest of the world.

However, Red Flag Linux has turned out to be little more than a key bargaining chip in a high stakes game of commerce between the Chinese government and the world’s largest software maker. Thanks to some major concessions on source code and a precipitous price drop, the Chinese government has now thoroughly embraced Windows and Office. And thanks to a major about-face in the way that it deals with piracy, Microsoft has also won over the Chinese people.

In April, Microsoft Chairman Bill Gates took a victory lap in China, and Fortune magazine’s David Kirkpatrick went along for the ride, writing an account of the trip and an excellent synopsis of Microsoft’s rocky path to success in China in a piece called “How Microsoft conquered China - Or is it the other way around?”

Kirkpatrick wrote, “No other Fortune 500 CEO gets quite the same treatment in China. While most would count themselves lucky to talk with one of China’s top leaders, Gates will meet with four members of the Politburo … As one government leader put it while introducing Gates at a business conference, the Microsoft chairman is ‘bigger in China than any movie star.’ Last spring President Hu Jintao toured the Microsoft campus in Redmond, Wash., and was feted at a dinner at Gates’ home. ‘ You are a friend to the Chinese people, and I am a friend of Microsoft,’ Hu told his host. ‘Every morning I go to my office and use your software.’”

Just five years earlier, the Chinese government was doing everything it could to avoid Microsoft software. The government balked at the high price of the software and had serious security concerns about saving sensitive government data in a proprietary operating system built by a company located within the borders of one of its chief international rivals. China was worried that the U.S. government could use the Microsoft OS to spy on Chinese government activity. The city of Beijing even began installing Red Flag Linux, supported by the government-run Chinese Academy of Sciences, on the computers of city workers.

In 2003, Microsoft began a program that allowed select partners to view the source code of Windows, and even make some modifications. China was one of 60 countries invited to join the program. Then Microsoft got serious about competing on price by offering the Chinese government its Windows and Office software for an estimated $7-$10 per seat (in comparison to $100-$200 per seat in the U.S., Europe, and other countries).

These moves, coupled with building strong relationships within the Chinese government and opening a major research center in Beijing, completely changed Microsoft’s fortunes in China. Today, the Chinese government uses a version of Windows that includes its own custom cryptography software. In Beijing, where many of the workers avoided Red Flag Linux and used a pirated version of Windows instead, the government has taken inventory of pirated software and forked over cut-rate licensing fees to Microsoft.

Of course, piracy among the Chinese population at large is still one of the major issues Microsoft has to overcome. Microsoft’s initial strategy was to work to get intellectual property laws enforced in China, but that was an unmitigated disaster. Microsoft realized that it was powerless to stop widespread piracy in China, so it simply threw up the white flag. If Chinese users are going to pirate software, Microsoft wants them to pirate Microsoft software. Plus, Microsoft has made it easy for Chinese users to purchase legal copies by offering a $3 Windows/Office bundle to Chinese students.

Even with the cut-rate fees for students and the government, Microsoft will still collect an estimated $700 million in revenue from China in 2007. That amounts to only about 1.5% of Microsoft’s total revenue worldwide, but the battle for mind share has been won. Windows now has roughly 90% market share in China. There are currently 120 million PCs in China, but that number is expected by grow exponentially in the coming decades, and Microsoft is in a great position to reap the benefits.

Sanity check

Microsoft’s strategy in China and the ascendancy of Windows and Office there could have important implications for Linux, the software market worldwide, and the future of China and its citizens.

One of the necessary aspects of competing in China was that Microsoft has had to cozy up to the Chinese government, which has long been the target of international scrutiny for its censorship policies and its human rights abuses.

When Red Flag Linux was at the height of its hype cycle and China was being viewed as the start of something big for Linux, Eric Raymond, the open source advocate, was wary of people making too close of a connection between China and Linux. He said “any ‘identification’ between the values of the open-source community and the repressive practices of Communism is nothing but a vicious and cynical fraud. [We] would not care to be associated with the totalitarian and murderous government of Communist China — unrepentant perpetrators of numerous atrocities against its own people.”

During Gates’ tour of China this spring, David Fitzpatrick asked Gates how he could reconcile Microsoft’s relationship with the Chinese government with China’s suppression of freedom of speech and disregard for human rights. There was a long pause, after which Gates finally said, “I don’t want to give an answer to that.”

Microsoft, Yahoo, and Google have all come under scrutiny recently for their cooperation with China censorship:

• Microsoft censors Chinese blogs
• Yahoo ‘helped jail China writer’
• A Picture Says 1000 Words About Google’s Censorship In China

There are two divergent arguments for whether establishing a relationship with China is a good thing or a bad thing in helping the Chinese people achieve freedom and justice:

1.) By doing business or building a relationship with China, you are giving tacit approval to their suppressive government practices and only encouraging them to continue. Therefore, nations and organizations should unequivocally shun China unless the government changes its policies.

2.) By establishing strong ties with China, you bring it closer to being part of the international family of nations in the hope that it will eventually curb its more radical practices because of natural peer pressure. This is often viewed as a better alternative to isolation, which can lead to extremism.

Microsoft obviously subscribes to the latter. But its primary motivation seems to be that there’s a lot at stake in China and it must have a strategy to compete in China if it wants to continue to lead the software market. As a result, Microsoft has taken an apolitical stance.

The fact that Red Flag Linux failed to gain a major foothold in China is yet another blow to desktop Linux. After nearly eight years of being on the verge of a breakthrough, Linux seems more destined than ever to be a force in the server room but little more than a narrow niche and an anomaly on the desktop.

As for the price of Microsoft software worldwide, Gates has admitted that the gap between the price in China and the price for the rest of the world will naturally meet in the middle over time. In other words, Gates wants to eventually charge China more and realizes that Microsoft won’t be able to keep charging everyone else so much. For analysts and pundits (myself included) who have said that Microsoft’s best strategy for combating software piracy in the U.S. is not with product activation but by simply charging less for the software, this is great news and a little bit of vindication. I guess we have China to thank for that.
http://blogs.techrepublic.com.com/hiner/?p=525





Microsoft Should Welcome Piracy in India and China

By prosecuting copyright infringers in Asia, it drives consumers into the Linux camp. Better to ease up and build market share—for now
Henry Chesbrough

On July 25, in a rare collaboration between U.S. and Chinese law enforcement, the FBI and China's Public Security Bureau raided a southern Chinese operation that had allegedly pirated Microsoft Windows Office and Vista software. Microsoft praised the raid, saying it was a milestone in the battle against pirated software.

Two months ago, 350 independent computer dealers in Gujarat, India, held a one-day strike, protesting Microsoft's (MSFT) raids of their stores. In these raids, Microsoft sent fake customers to request that the dealers load Windows onto their computers. The dealers did so at no charge—using pirated versions of Windows. Microsoft sent notices to six of the offending Gujarat dealers demanding substantial payments and fines.

Around the same time, Microsoft's general counsel, Brad Smith, publicly alleged that open-source products Linux and OpenOffice infringe no less than 235 of Microsoft's patents. Smith further announced that Microsoft was prepared to meet with offending parties to discuss the alleged infringements.

In these situations, Microsoft is striving to obtain full benefits from its substantial investments in innovation by seeking enforcement of its intellectual-property (IP) rights.
Different Strokes

From Gujarat, India, to Santa Clara, Calif., Microsoft is simply doing the right thing for the company and its shareholders, as any company should. But is the giant shortsighted in treating these two situations in the same manner? The answer could be yes. It's a mistake to manage IP the same way during different phases of a technology's life cycle rather than adjusting along the way. It's a fumble that many companies, not just Microsoft, would be wise to avoid.

In the earliest phase of any technology—and this holds true for the introduction of an established technology to a new territory—it pays to be very open. At this point, neither the maker of a new technology nor observers know the best use of it, and no one has an appropriate business model to commercialize applications either (the Creation Phase).

As the technology starts to take hold some key applications develop, and the technology enters the Growth Phase. The key here is to drive growth so a technology becomes the "dominant design"—the standard everyone uses. It still pays to be open because the most important task is to win the battle to be the dominant design. Openness can help enlist allies and fellow travelers to tip the market in a favorable direction. Remember the Betamax vs. VHS video-recording showdown? While many factors led to the VHS format winning the popularity contest, it's key that JVC was willing to license its VHS technology broadly, including to other manufacturers, while Sony allowed the Betamax format to run only on Sony machines. So VHS won market share.

Focusing narrowly on protecting IP interferes with that most important task. There's little value in taking a strong IP position for a technology that loses the race to be the dominant design and can wind up being a lame duck before it has had a chance to prove itself a winner.
Ride the Wave

As the technology matures and the Growth Phase starts to slow, the focus on being open must change. New impetus for IP protection emerges, and tightening the protection of ideas becomes more important. In a technology's Mature Phase, growth is largely over, so stricter enforcement of IP is less likely to swing the market away from a product. At the same time, more enforcement helps companies harvest the investment they made in a technology.

Still, companies shouldn't be too demanding—or licensees will either go out of business or find another technology that avoids strict enforcement actions. Eventually the technology will become obsolete, and the market for that technology will go into the Decline Phase. In this final phase, companies can aggressively harvest the fruits of their earlier investments in IP protection. Since the market is going away anyway, they can be even more demanding. IBM (IBM) was able to negotiate payments of tens of millions of dollars from Dell (DELL) once it left the PC business, and from Cisco (CSCO) when it withdrew from the router business. GE (GE) has exited many white-goods businesses, but it still takes in many millions of dollars by licensing its trademarks for other companies to use in making and marketing those products.

With this simple idea established, let's return to the problem Microsoft is facing with pirated copies of Windows. In the U.S. and Europe Windows has become the dominant PC operating system, with a market share in excess of 90%. So growth in those regions is now quite flat, placing Windows squarely in the Mature Phase of its life cycle. In China and India, however, the picture is quite different. Rising economic prosperity has created a boom in PC sales, so in these countries Windows is just now moving from Emerging Phase to Growth Phase.
Nuanced View

One-size-fits-all thinking would suggest that Microsoft should employ the same weapons against software piracy in India that it uses in the U.S. This would mean vigorously policing the use of its software and undertaking prompt legal action against any and all illegal use wherever in the world such activities are found. And that seems to be the path Microsoft took in Gujarat this spring. A more nuanced view would suggest a dramatically different approach, shown in Figure B.

While Microsoft leads in India and China, Linux is mounting a strong challenge in both nations. The Linux community has signed a deal with Beijing to make Linux the default operating system for computers used by the Chinese government and many parts of the Chinese educational system. In India, the prices of Windows and Office are so high that Linux is the only practical, affordable choice for most of the population.

In this context, applying Western IP enforcement policies to stem the flood of illegal copies of Windows in China and India risks winning the battle (to deter and punish IP infringement) while losing the war (to become the dominant standard operating system on the desktop). As long as Linux remains a serious rival in China and India, Microsoft should welcome pirated copies of its software. Illegal versions of Windows are free, which helps Microsoft offset the initial cost advantage of "free" open-source software.

Every pirated copy installed on a Chinese or Indian computer brings one more person into the Microsoft ecosystem. This strengthens Microsoft's market for third-party developers of applications, tools, and other complementary products. Equally important, it denies Linux that next new customer who would strengthen the open-source ecosystem against Windows.
Helping Linux Spread

If Microsoft succeeds in discouraging piracy of Windows in China and India, it is far more likely to drive the user of the pirated software into the Linux camp than it is to steer them into the land of paid-up Windows users. Microsoft's IP management strategy in China and India should instead focus on securing the victory of Windows on the desktops of all PC users. That may require deliberately lax enforcement efforts against pirated copies of Windows for the short and medium term. Only after the Linux threat lessens might Microsoft have the luxury of tightening up piracy protections, as it is now doing in the West. Microsoft can afford to be patient.

Bill Gates has hinted that Microsoft may be open to this way of thinking—and willing to give China's PC users a break. As reported in an article by Charles Pillar in the Los Angeles Times in April, 2006, Gates suggested in a talk at the University of Washington that if Chinese consumers are using pirated software, he wanted them to be using Microsoft's.

So Microsoft would be well advised to take a different approach to managing its Windows IP rights in India compared with its approach to protecting its Windows IP rights in the U.S. IP management must be driven first and foremost by the business objectives of the company, not by a narrow legal perspective.

And remember, Microsoft has won the war in the U.S and Europe. The growth there is gone. The next billion Microsoft users will come from markets like Brazil, China, India, and Russia—if Microsoft's IP management policies and lawyers don't drive them into the Linux camp instead.
http://www.businessweek.com/innovate...mpaign_id=yhoo





In depth

Why I Quit: Linux Kernel Developer Con Kolivas
Ashton Mills

Con Kolivas is a prominent developer on the Linux kernel and strong proponent of Linux on the desktop. But recently, he left it all behind. Why?

In this interview with APCMag.com, Con gives insightful answers exploring the nature of the hardware and software market, the problems the Linux kernel must overcome for the desktop, and why despite all this he's now left it all behind.

Read on for an honest appraisal of Linux, and why it has some way to go yet.

You wouldn't know it from seeing him online, but by day Con Kolivas works an anaesthetist at a hospital in Melbourne. Linux kernel hacking is just one of his hobbies.

Despite this, Con is one of the most well known names in Linux kernel development -- and with good reason. His focus on improving the kernel for desktop performance has won him a legion of fans, and his patchsets for the Linux kernel (marked as -ck) have had a significant impact. So much so that some of his changes have been directly incorporated into the kernel, and some of ideas inspire changes still taking place.

Recently, however, Con announced he was leaving it all behind. Interested in hearing what prompted the move I contacted Con to talk about the reasons for his leaving, what it takes to be a kernel developer, the future as he sees it.

The response I got was more than I bargained for -- in the conversation that followed, Con explored not just why he left, but also the challenges the Linux kernel must overcome as he sees it, and the very nature of the hardware and software market that led to the computing environment we have today. Whether you're a Windows user or Linux user, he makes some excellent points.

Rather than break up the Con's responses, we're publishing it as it stands. So grab a coffee, make yourself comfortable, and read on.

APC: How did you get started developing for the Linux kernel, did you enjoy it, and what's the passion that drives you?

Normally this would be a straight forward question to answer. However at this time, I've had the opportunity to reflect on what really got me into kernel development, and I'll be able to answer it more thoroughly. So if you give me the latitude to answer it I might end up answering all your potential questions as well. This is going to be my view on personal computing history.

The very first computer I owned was 24 years ago. I've been fortunate to have been involved in the personal computer scene since not long after it actually began. In the time since then, I've watched the whole development of the PC, first with excitement at not knowing what direction it would take, then with anticipation at knowing where it would head and waiting for the developments.

In the late 1980s it was a golden era for computing. There were so many different manufacturers entering the PC market that each offered new and exciting hardware designs, unique operating system features and enormous choice and competition. Sure, they all shared lots of software and hardware design ideas but for the most part they were developing in competition with each other. It is almost frightening to recall that at that time in Australia the leading personal computer in numbers owned and purchased was the Amiga for a period.

Anyone who lived the era of the first Amiga personal computers will recall how utterly unique an approach they had to computing, and what direction and advance they took the home computer to. Since then there have been many failed attempts at resuscitating that excitement. But this is not about the Amiga, because it ultimately ended up being a failure for other reasons. My point about the Amiga was that radical hardware designs drove development and achieved things that software evolution on existing designs would not take us to.

At that time the IBM personal computer and compatibles were still clunky, expensive, glorified word processing DOS machines. Owners of them always were putting in different graphics and sound cards yearly, upgrading their hardware to try and approach what was built into hardware like the Amiga and the Atari PCs.

Enter the dark era. The hardware driven computer developments failed due to poor marketing, development and a whole host of other problems. This is when the software became king, and instead of competing, all hardware was slowly being designed to yield to the software and operating system design.

We're all aware of what became the defacto operating system standard at the time. As a result there was no market whatsoever for hardware that didn't work within the framework of that operating system. As a defacto operating system did take over, all other operating system markets and competition failed one after the other and the hardware manufacturers found themselves marketing for an ever shrinking range of software rather than the other way around.

Hardware has since become subservient to the operating system. It started around 1994 and is just as true today 13 years later. Worse yet, all the hardware manufacturers slowly bought each other out, further shrinking the hardware choices. So now the hardware manufacturers just make faster and bigger versions of everything that has been done before. We're still plugging in faster CPUs, more RAM, bigger hard drives, faster graphics cards and sound cards just to service the operating system. Hardware driven innovation cannot be afforded by the market any more. There is no money in it. There will be no market for it. Computers are boring.

Enter Linux. We all know it started as a hobby. We all know it grew bigger than anyone ever imagined it. It would be fair to say that it is now one of the most important of the very few competing pieces of software/operating system that remains and drives development of the defacto standard -- Windows. However, I believe it never deserved to become this. Had the innovative hardware driven development and operating system competition continued, there is no way it would have attracted as much following, developers and time to evolve into what it has become. The hardware has barely changed in all that time. PCs are ludicrously powerful compared to what they were when Linux first booted in 1991, but that's an issue of increased speed, not increased functionality or innovation.

So what about the PC? Well the PC was 'dying' according to all accounts 20 years ago. We all know now that is crap and for the foreseeable future at least, the one all encompassing, information processing, communication (and frustration creator) is here to stay. The internet certainly has cemented that position for the PC.

So Linux was created to service the home desktop personal computer, and the PC is here to stay. For those who were looking for some excitement and enjoyment in using their computer, the defacto operating system just doesn't cut it. We want to tinker, we want control, we want power over everything. Or alternatively we believe in some sort of freedom or some combination of the above. So we use Linux. That is certainly how I got involved in Linux; I wanted something to use on the home desktop PC.

However, the desktop PC is crap. It's rubbish. The experience is so bloated and slowed down in all the things that matter to us. We all own computers today that were considered supercomputers 10 years ago. 10 years ago we owned supercomputers of 20 years ago.. and so on. So why on earth is everything so slow? If they're exponentially faster why does it take longer than ever for our computers to start, for the applications to start and so on? Sure, when they get down to the pure number crunching they're amazing (just encode a video and be amazed). But in everything else they must be unbelievably slower than ever.

Computers of today may be 1,000 times faster than they were a decade ago, yet the things that matter are slower.

The standard argument people give me in response is 'but they do such more these days it isn't a fair comparison'. Well, they're 10 times slower despite being 1000 times faster, so they must be doing 10,000 times as many things. Clearly the 10,000 times more things they're doing are all in the wrong place.

APC: So, the performance problems of Linux on the desktop became a key motivator for you?

Yes. I started to tinker with improving Linux on the desktop. "Surely if I have complete control over all the software I'll be able to speed things up," I thought. There must be a way to tweak this, tune that, optimise this and get more speedups? Userspace improvements seemed so limited when I got started in Linux. It barely worked on the desktop half the time so trying to get speed out of it on top would mean that nothing worked. The UNIX legacy was evident. We were shaping an operating system never designed for the desktop and it was going to hurt... a lot.

Eventually the only places I noticed any improvements in speed were kernel developments. They were never huge, but caused slightly noticeable changes in things like snappiness, behaviour under CPU load and so on. The first patchset I released to the public contained none of my own code and was for kernel 2.4.18 which was about February 2002. I didn't even know what C code looked like back then, having never actually been formally taught any computer science.

So I stuck with that for a while until the 2.6 development process was under way (we were still in a 2.5 kernel at the time). I watched the development and to be honest... I was horrified. The names of all the kernel hackers I had come to respect and observe were all frantically working away on this new and improved kernel and pretty much everyone was working on all this enterprise crap that a desktop cares not about.

Even worse than that, while I obviously like to see Linux run on 1024 CPUs and 1000 hard drives, I loathe the fact that to implement that we have to kill performance on the desktop. What's that? Kill performance? Yes, that's what I mean.

If we numerically quantify it with all the known measurable quantities, performance is better than ever. Yet all it took was to start up an audio application and wonder why on earth if you breathed on it the audio would skip. Skip! Jigabazillion bagigamaherz of CPU and we couldn't play audio?

Or click on a window and drag it across the screen and it would spit and stutter in starts and bursts. Or write one large file to disk and find that the mouse cursor would move and everything else on the desktop would be dead without refreshing for a minute.

I felt like crying.

I even recall one bug report we tried to submit about this and one developer said he couldn't reproduce the problem on his quad-CPU 4GB RAM machine with 4 striped RAID array disks... think about the sort of hardware the average user would have had four years ago. Is it any wonder the desktop sucked so much?

The developers were all developing for something that wasn't the desktop. They had all been employed by big name manufacturers who couldn't care less about the desktop (and still don't) but want their last 1% on their database benchmark or throughput benchmark or whatever.

Linux had won. We were now the biggest competition in the server and database market out there and all the big names cared about Linux. Money was pouring into development from all these big names into developing Linux's performance in these areas.

The users had lost. The desktop PC, for which linux started out as being development for, had fallen by the wayside. Performance, as home desktop users understand performance, was gone. Worse yet, there was no way to quantify it, and the developers couldn't care if we couldn't prove it. The one place I found some performance was to be gained on the desktop (the kernel) was now doing the opposite.

APC: So what did you do next to try to convince the Linux kernel devs of the need for more focus on end-users?

I set out to invent some benchmark to try and quantify performance problems in Linux on the desktop PC. The first benchmark I created called 'Contest' (pun intended). It was horribly complicated to use and set up and the results were difficult to interpret but at least I tried. It did help. Some changes did come about as a result of these benchmarks, but mostly on the disk I/O front. So I was still left looking at this stuttering CPU scheduling performance.

I had some experience at merging patches from previous kernels and ironically most of them were code around the CPU scheduler. Although I'd never learnt how to program, looking at the code it eventually started making sense.

I was left pointing out to people what I thought the problem was from looking at that particular code. After ranting and raving and saying what I thought the problem was, I figured I'd just start tinkering myself and try and tune the thing myself.

After a few failed experiments I started writing some code which helped... a lot. As it turns out people did pay attention and eventually my code got incorporated. I was never very happy with how the CPU scheduler tackled interactivity but at least it was now usable on the desktop.

Not being happy with how the actual underlying mechanism worked I set out to redesign that myself from scratch, and the second generation of the -ck patchset was born. This time it was mostly my own code. So this is the story of how I started writing my own code for the linux kernel.

In brief, following this I found myself writing code which many many desktop users found helped, but I had no way to quantify these changes. There is always a placebo element which makes the end user experience difficult to clarify as to whether there is an improvement or not.

However I have tried very hard to make myself relatively resistant to this placebo effect myself from years of testing, and I guess the fact that my website has close to 1 million hits suggests there are people who agree it makes a difference. This inability to prove quantitatively the advantage that -ck offered, though, was basically what would eventually spell out the death of it.

APC: What code did get incorporated into the mainline kernel?

Looking back, while the patchset has been well known, little of the actual code itself ended up in the mainline kernel, even if it spurned interest and development from other people in that time. Most of what did end up going in were changes to the CPU scheduler to improve interactivity, fairness, SMP user fairness, making 'nice' behave itself, hyperthread fairness and so on. There were lots of other minor contributions in other areas, such as the virtual memory subsystem, software suspend, disk i/o scheduling and random bugfixes.

The emphasis of what I did get involved in is still the area that there are many -ck patches in the last release I ever made (2.6.22-ck1). The remaining patches reflect where I still believe massive problems exist for the desktop, and ironically, despite my efforts to the contrary, the same problems seem to get magnified with each passing year.

It seems that the emerging challenges for the linux kernel on the desktop never seem to get whole-heartedly tackled by any full time developer, and only get a sideways glance when the problems are so obvious that even those on the linux kernel mailing list are willing to complain about them.

APC: Was there a toll on you for this voluntary involvement?

Yes. There is no doubt that whenever I was heavily involved, I would stay awake at night thinking up code solutions, I would be sleep deprived, and it had the possibility to impact on my work and family life. I tried very hard to never compromise those two for the sake of kernel development, but perhaps on occasion I did push it to far. I make an issue of never regretting anything I have done so I'm still pleased with my involvement till now.

APC: What was the driving force that caused you to hangup your kernel coding keyboard and the -ck patchset?

That's one of those 'I wish I had a dime for ever time I was asked that' sort of questions.

As most people are well aware, my involvement in kernel development was motivated on three fronts, and it has zero to do with my full time career and life.

First, it was lots of fun. I've always been a computer geek and enjoyed spending hours in front of the computer doing... well whatever really. So spending it on something that had become a passion for me was an obvious source of great enjoyment for me.

Second, it was an intellectual challenge. There seemed to be things that I always wish were done in the Linux kernel, and there were issues people didn't really care to tackle and so on. Trying to confront them head-on I was doing something I really hadn't done before in terms of high level programming. I learnt a heck of a lot about operating system design and all other really basic computer science things that most CS students probably are bored with.

However it was all new to me. There is precious little (and some would argue zero) new research in operating system design. Looking at linux there is innovation in the approach to tackling things, but it's not like there's anything new about the problems being fixed. The same issues have always been there in hardware vs software designs, and all the research has been done. I've seen many people accuse me of claiming I invented fair scheduling. Let me set the record straight. I make no such ridiculous claim.

What I did was take what was known and try and apply it to the constraints of current hardware designs and the Linux kernel framework. While the 'global picture' of the problems and solutions have been well known for many years, actually narrowing down on where the acute differences in hardware vs software have evolved has not. Innovation only lies in the application of those ideas. Academic approaches to solutions tend not to be useful in the real world. On the flip side, pure hackery also tend to be long term disasters even if initially they're a quick fix. Finding the right balance between hackery and not ignoring the many years of academic research is what is needed.

APC: Did you get that balance right?

Heck no. But that's what I strived for. I think there are precious few developers who do. If there is one failing in the human driven decision making in choosing what code goes where it is that it is impossible to recognise that (again I'm not saying it was my code).

Third, it was an ego trip. If I improved something that I cared about, I found that usually lots of other people cared about it. The reason for that obviously is that I was actually an ordinary desktop PC user that pretended to be a kernel hacker. So whenever I made improvements that affected desktop users, lo and behold lots of people cared about them. I recall a kernel hacker that I respected very much joked about my 'fans' and asking how he could attract a crowd. He has contributed possibly 1000 times more lines of code to linux kernel than myself, yet I had a 'following'.

I only attracted a following because I hacked on things I cared about. And the users told me so. The one thing that drove my development over the many years were the 'thank you's that I got from the users of the -ck patchset.

So I still haven't answered your question about what made me stop kernel development have I? I guess explaining my motivations helps me explain why I stopped.

The user response was still there. If anything, the users got more vocal than ever as I was announcing quitting kernel development.

The intellectual challenge? Well that still existed of course.

The fun? Yes that's what was killed. It stopped being fun. In my now quite public email announcing that I was quitting I explained it briefly. The -ck patchset was for quite a while, a meaningless, out of mainline's spotlight playground for my experiments. As the scope of changes got larger, the improvements became more drastic and were more acutely noticeable. This led to more and more people asking me when the changes would me merged into mainline. As the number of requests grew, my resolve to not get mainline involved diminished. So I'd occasionally post patches as examples to the linux kernel mailing list. This generated more interest and requests to get mainline involved. So I tried.

You asked before what patches from -ck got into mainline and I listed a whole lot of random minor patches. The magnitude of the changes in the patches that did _not_ get involved stands out far more than those that did get in.

APC: was there something that was the 'final straw' for you?

My first major rejection was the original staircase CPU scheduler. It stood out as being far better in interactivity than the mainline CPU scheduler, but ultimately, just as the mainline CPU scheduler, it had corner cases that meant it was not perfect. While I was still developing it, the attention moved away from the CPU scheduler at that time. The reason given by Andrew Morton (the maintainer and second last gateway into the mainline kernel) at the time was that the kernel had more burning issues and bugs to address.

Of course it did. There were so many subsystems being repeatedly rewritten that there was never-ending breakage. And rewriting working subsystems and breaking them is far more important than something that might improve the desktop right? Oops, some of my bitterness crept in there. I'll try and keep emotion out and just tell the rest of the story as objectively as I can.

The main problem was that there simply was not a convincing way to prove that staircase was better on the desktop. User reports were not enough. There was no benchmark. There was no way to prove it was better, and the user reports if anything just angered the kernel maintainers further for their lack of objectivity. I even tried writing a benchmark called Interbench. Note that interactivity is not responsiveness (I have a little summary of the difference as I see it with the Interbench code). This was much better code than Contest but even though I could demonstrate advantage with my scheduler on Interbench, the magnitude of the differences was difficult if not impossible to elicit based on the raw numbers generated by Interbench.

With a truckload of help from William Lee Irwin III (who wrote the main architecture) I posted a pluggable CPU scheduler framework that would allow you to build into the kernel as many of multiple CPU schedulers as you like and choose at boot time which one to run. I planned to extend that to runtime selection as well. This is much like the modular pluggable I/O scheduler framework that Linux kernel currently has. It was flat out refused by both Linus and Ingo (who is the CPU scheduler maintainer) as leading to specialisation of CPU schedulers and they both preferred there to be one CPU scheduler that was good at everything. I guess you can say the CPU scheduler is a steamroller that we as desktop users use to crack nuts with, and they didn't want us to build a nutcracker into the kernel.

The purpose of Plugsched was simply to provide a seamless way for the staircase CPU scheduler to be integrated into the mainline kernel. I didn't feel strongly about the presence of pluggable CPU schedulers, but many people still do and the code is still maintained today mainly by Peter Williams.

Then along came swap prefetch. I spent a long time maintaining and improving it. It was merged into the -mm kernel 18 months ago and I've been supporting it since. Andrew to this day remains unconvinced it helps and that it 'might' have negative consequences elsewhere. No bug report or performance complaint has been forthcoming in the last 9 months. I even wrote a benchmark that showed how it worked, which managed to quantify it! In a hilarious turnaround Linus asked me offlist 'yeah but does it really help'. Well, user reports and benchmarks weren't enough... It's still in limbo now but they'll have no choice but to drop it without anyone maintaining it.

Finally the nail in the coffin. The Staircase Deadline CPU scheduler. Initially started as a side project from the Staircase CPU scheduler I soon realised that it was possible to have excellent interactivity while fixing the horrible fairness issues that an unfair design had. Furthermore, it actually improved interactivity issues elsewhere that ended up being fairness problems, and fairness is of course paramount to servers and multiuser environments.

A lot of users and even kernel developers found that many long lasting complaints with the mainline and other schedulers were fixed by this code and practically begged me to push it into mainline, and one user demanded Linus merge it as soon as possible as a bugfix. So I supported the code and fixed it as problems arose and did many bugfixes and improvements along the way.

Then I hit an impasse. One very vocal user found that the unfair behaviour in the mainline scheduler was something he came to expect. A flamewar of sorts erupted at the time, because to fix 100% of the problems with the CPU scheduler we had to sacrifice interactivity on some workloads. It wasn't a dramatic loss of interactivity, but it was definitely there. Rather than use 'nice' to proportion CPU according to where the user told the operating system it should be, the user believed it was the kernel's responsibility to guess. As it turns out, it is the fact that guessing means that no matter how hard and how smart you make the CPU scheduler, it will get it wrong some of the time. The more it tries to guess, the worse will be the corner cases of misbehaving.
The option is to throttle the guessing, or not guess at all. The former option means you have a CPU scheduler which is difficult to model, and the behaviour is right 95% of the time and ebbs and flows in its metering out of CPU and latency. The latter option means there is no guessing and the behaviour is correct 100% of the time... it only gives what you tell it to give. It seemed so absurdly clear to me, given that interactivity mostly was better anyway with the fair approach, yet the maintainers demanded I address this as a problem with the new design. I refused. I insisted that we had to compromise a small amount to gain a heck of a great deal more. A scheduler that was deterministic and predictable and still interactive is a much better option long term than the hack after hack approach we were maintaining.

Then I became very unwell. A disc prolapse in my neck basically meant I need to lie flat on my back for about 6 weeks. Yes, kernel development did contribute to this problem. So I was drugged to the eyeballs and spent most of the day and night lying down... having nothing to think about but stew over the kernel. Whenever I could I snuck back on the PC to try and support the code I had thrown out there. I refused to budge on the fairness aspect, and I kept getting that thrown back in my face as an unfixable failure in the design.

Then one day presumably Ingo decided it was a good idea and the way forward and... wrote his own fair scheduling interactive design with a modular almost pluggable CPU scheduling framework... and had help with the code from the person who refused to accept fair behaviour in my flamewar.

So I had plenty of time lying on my back to reflect on what I was doing and why, and whether I was going to regret it from that point on. I decided to complete the work on Staircase Deadline to make sure it was the reference for comparison, instead of having the CPU scheduler maintainer's new code comparing to the old clunky scheduler. Then I quit forever.

Are developer egos a problem in the open source development model in general?

I think any problem with any development model has multiple factors, and ultimately, it is humans that make decisions. I won't comment on the humans themselves.

If there is any one big problem with kernel development and Linux it is the complete disconnection of the development process from normal users. You know, the ones who constitute 99.9% of the Linux user base.

The Linux kernel mailing list is the way to communicate with the kernel developers. To put it mildly, the Linux kernel mailing list (lkml) is about as scary a communication forum as they come. Most people are absolutely terrified of mailing the list lest they get flamed for their inexperience, an inappropriate bug report, being stupid or whatever. And for the most part they're absolutely right. There is no friendly way to communicate normal users' issues that are kernel related. Yes of course the kernel developers are fun loving, happy-go-lucky friendly people. Just look at any interview with Linus and see how he views himself.

I think the kernel developers at large haven't got the faintest idea just how big the problems in userspace are. It is a very small brave minority that are happy to post to lkml, and I keep getting users telling me on IRC, in person, and via my own mailing list, what their problems are. And they've even become fearful of me, even though I've never viewed myself as a real kernel developer.

Just trawl the normal support forums (which I did for Gentoo users as a way of finding bug reports often because the users were afraid to tell me) and see how many obvious kernel related issues there are. I'd love to tell them all to suddenly flood lkml with their reports of failed boots with various kernels, hardware disappearing, stopping working suddenly, memory disappearing, trying to use software suspend and having your balls blown off by your laptop, and so on.

And there are all the obvious bug reports. They're afraid to mention these. How scary do you think it is to say 'my Firefox tabs open slowly since the last CPU scheduler upgrade'? To top it all off, the enterprise users are the opposite. Just watch each kernel release and see how quickly some $bullshit_benchmark degraded by .1% with patch $Y gets reported. See also how quickly it gets attended to.

What are you doing in your spare time now, and what future projects do you have planned?

I had some small userspace toys that I was experimenting with (compression tools, video encoding/conversion tools and a few others) that I thought I'd get back to. However just looking at any code gives me a bad taste in the mouth so that's not happening.

My current passion is learning Japanese. It's fun, it's a huge intellectual challenge, will allow me to eventually understand lots of interesting Japanese media in its native language (short stories, movies, manga and anime) and comes with no strings attached. I never really know what hobby I'll end up taking up but I usually get completely engrossed in whatever it was.

Thankyou for your time Con.
http://apcmag.com/6759/interview_wit...ting_is_boring





Report: Seagate Plans to Stop Manufacturing IDE Drives by Year End
Joel Hruska

Seagate plans to cease manufacturing IDE hard drives by the end of the year and will focus exclusively on SATA-based products. Seagate is the first major hard drive manufacturer to announce such plans, though others will likely follow suit as SATA continues to sap PATA's market share. According to a report published at Australian-based ITNews last January, SATA now accounts for 66.7 percent of desktop hard drive sales, 44 percent of laptop sales, and an unspecified (but increasing) amount of enterprise storage connectivity.

Not only has SATA overtaken PATA as the interface of choice for hard drive connectivity, but it's become the main interface for primary hard drive connectivity as well—meaning that a majority of OEM system shipments now contain a SATA-based hard drive rather than the older PATA standard. Accomplishing all of this in less than a decade is impressive, particularly when compared to the slow pace at which floppies or the original USB interface have been supplanted by newer technologies. Unlike the slow pace of adoption that characterized other standards, SATA has virtually sprinted across the finish line.

That's not to say support for the 21-year-old PATA standard is going to vanish overnight; 34 percent of global hard drives is still an awful lot of hardware, and quite a few CD/DVD drives still rely on PATA. This means that most motherboard manufacturers will probably keep at least one PATA slot around for awhile longer, similar to how ISA slots were available long after most of us had ditched our old ISA peripherals. Add in the PCI/PCIe-based expansion slot market, and its unlikely that PATA support is going anywhere any time soon—a fact which should reassure anyone who is afraid Seagate's SATA-only policy could leave us all with mountains of PATA drives and no way to access them.

For the moment, Seagate appears to be maintaining price parity across both product lines, with the 400GB, 16MB of cache, 7200.10 Barracuda selling for $99 at Newegg in both IDE and SATA form factors. The Inquirer (via various channel sources) first reported the move, and a Seagate spokesperson told Ars that the report was "probably" true.
http://arstechnica.com/news.ars/post...d-of-2007.html





Sony Profit More Than Doubles

Sony said Thursday that its April-June net profit more than doubled to 66.46 billion yen ($551.5 million) from a year earlier on solid sales of flat-panel TVs, digital cameras and video camcorders. Sales rose 13.3% to 1.98 trillion yen ($16.41 billion).

But the Japanese electronics and entertainment company said its game operations were still in the red because of strategic pricing of the PlayStation 3 video game console below production costs.

The PlayStation 3 has been struggling against the Wii from rival Nintendo Co., which reported Wednesday that quarterly earnings soared fivefold.

Sony said it sold 710,000 PlayStation 3s worldwide for the quarter. A total of 4.3 million have been sold since the consoles went on sale late last year in Japan and the U.S., and in March in Europe. Sony's goal is to sell 11 million PS3 machines for the fiscal year through March 2008.

Tokyo-based Sony, which also has sprawling entertainment businesses, got a boost in its movies division from the successful worldwide theater reception for "Spider-Man 3."

A weak yen, which tends to lift the value of overseas earnings for Japanese exporters, also helped, Sony said.

Yuji Fujimori, electronics analyst at Goldman Sachs & Co. in Tokyo, said Sony's profit was better than even his bullish expectations, underpinned by sales of digital cameras and Vaio computers that offset the risks of price declines in TVs and PlayStation 3-related losses.

Sony kept its forecast for the fiscal year through March 2008 unchanged at 320 billion yen ($2.66 billion), up 153% from the previous year, on 8.780 trillion yen ($72.86 billion) in sales, up 6% from the previous year.
http://www.latimes.com/business/la-f...lines-business





Inflight Internet Lives Again: Qantas Introduces Wireless Broadband, Laptop Power in all Classes

We can confirm this is officially a geek's dream plane
Dan Warne

Laptop power will be available in every seat of Qantas' new Airbus A380s from August 2008, the airline has announced. It is also retrofitting existing Boeing 747-400s with a new cabin type, "premium economy", which will offer laptop power.

The retrofitted 747-400s will start going into service from February 2008 onwards.

However, travellers lucky enough to score a flight on one of the 20 new A380s later in the year will even get laptop power in standard economy.

Perhaps of even greater importance, Qantas says it will offer wireless internet throughout the A380s -- even in economy -- as well as web and email access via seat-back inflight entertainment systems if you don't have a laptop with you.

Coinciding with a spruced-up logo featuring a more angular kangaroo doing a more springy hop than the old streamlined roo, Qantas also said premium economy seats would feature USB and RJ45 (ethernet) ports.

The USB ports will be used for "viewing of content" on the inflight entertainment system, though Qantas wouldn't be drawn on whether that would include Divx video capability, or the ability to connect an iPod. It would also allow recharging of USB-powered devices.

The Ethernet port is for laptops that don't have wireless, or for people who simply prefer an Ethernet connection over WiFi, which could potentially become congested in an aircraft if inflight internet usage becomes popular.

The companies behind Qantas' inflight internet

Both the wireless and seat-back internet service will be provided by Airbus/SITA joint venture ONAIR. Although there is very little information available online about ONAIR, an report from late last year included a comment from ONAIR CEO George Cooper who said he had one long-haul international customer that would be offering wireless data to GSM handhelds inflight as well as wireless broadband to laptops.

Qantas has announced a trial of offering data access to Blackberries and other GSM devices in the air, and now that it has disclosed that it is using ONAIR for its wireless internet as well, it seems likely that the airline referred to by Cooper was Qantas.

Qantas would not comment on pricing for the internet access, but Cooper is quoted as saying that the unnamed carrier would offer "seatback instant messaging at a price of $5 for unlimited use throughout the flight. Web email will cost $8 per flight, with attachments extra, and there will be a measure of Internet access. Laptop users would have WiFi access to the Internet and VPNs.”

Worryingly, though, the report says that the broadband will be provided via Inmarsat’s SwiftBroadband 432kbit/sec-per-channel service -- a fairly slow link for a planeload of passengers, which could equate to sub-dialup speeds per passenger unless the aircraft uses multiple satellite channels at once.

The new inflight system will be manufactured by Panasonic Avionics, the company which announced with Apple that it would be offering integration with iPods inflight. Qantas declined to comment on whether it would include iPod capability on its planes, but the inclusion of the USB port on every seat on the A380 suggests it will.

Qantas says the new seat-back systems will also offer 30 "PC style" games.

“Customers in every cabin will also be able to remain connected throughout their flight with wireless connectivity, in-seat laptop power, USB and RJ45 ports allowing them to surf the internet or send and receive emails directly from their seat or personal laptop,” said Qantas marketing director John Borghetti.
When, where and how much!

Premium economy will first appear on B747 services to London, Hong Kong and Johannesburg from February 2008 with further routes being added following the introduction of A380 aircraft. Qantas said premium economy seats would cost about half of a business class ticket.

Premium Economy will be located on the main deck of B747 aircraft with 32 seats in a two-four-two configuration. On the A380, the cabin will be located on the upper deck with 32 seats in a two-three-two configuration.

Of course, if money is no object, you should check out the new Qantas first class which comes with 17" wide-screen LCD TVs for every passenger. Business class passengers only get a "large" video monitor, but it has "laptop connectivity" according to Qantas.

Key elements of Qantas' Airbus A380 entertainment system

• Available from August 2008
• Wide screen monitors in all cabins with digital picture and sound quality;
• Audio and video on demand with over 100 on demand movies, 350 television selections, 500 audio CDs, 30 PC style games, as well as a selection of audio books and radio channels;
• Lonely Planet destination and arrival guides;
• Language tutorials;
• Deloitte Leadership Academy;
• Online duty free shopping;
• Moving maps, text news and weather;
• An "intuitive state-of-the-art" graphic user interface allowing customers to easily navigate through entertainment options or use the in-seat communications;
• Wireless connectivity throughout the aircraft;
• In-seat access to email and the internet, telephone and SMS;
• USB and RJ45 ports as well as PC power for all seats; and
• An external camera giving a pilot's eye view of take-off, landing and cruising.

http://apcmag.com/6748/qantas_to_int...p_ power_in_p





New Nexus Radio Website Ignites Controversy Over Music Ripping Technology
Press Release

With higher royalty rates looming over internet broadcasters, and sales of music CDs continuing to plummet, both broadcasters and industry executives are fuming over the new Nexus Radio website.

In the midst of an ongoing battle between internet broadcasters and representatives of the recording industry, Egisca Corp. has launched a new website (www.nexusradio.com) offering music enthusiasts a free and legal alternative to services like iTunes and Rhapsody. The new Nexus Radio software takes a different approach to music downloading by allowing users to record radio broadcasts directly from the internet. Unlike peer-to-peer software like Morpheus and LimeWire, Nexus Radio eliminates the need for users to illegally share music on virus-riddled P2P networks.

Music lovers can download the free Nexus Radio player and begin recording their favorite tunes within minutes. The software extracts individual song data from internet broadcasts and saves the music directly to the user's hard-drive as standard MP3 files. The recording process is easy and it only takes one click of a button. Files recorded with Nexus Radio are commercial free and contain full ID3 tag information.

Recording an unlimited amount of music for free would be enough for the average music aficionado, but Nexus Radio takes it a step further by allowing users to transfer recorded files to any multi-media device that supports MP3 files, including Apple's iPhone and iPod

Thousands of broadcasters worldwide are beginning to embrace the new service, while a handful of broadcasters are enraged and claiming that Nexus Radio promotes piracy and copyright infringement. A number of outspoken representatives of the industry have even suggested that Nexus Radio is nothing more than a cleverly disguised Napster and the software should be banned. The developers of Nexus Radio insist "recording a public broadcast for personal use is perfectly legal and does not violate any copyright laws".

Only time will tell how much impact Nexus Radio will have on the music industry and how people obtain new music. As the debate on the legality and ethics of using Nexus Radio rages on, users of the software continue to fill their multi-media devices with free content provided by the service.
http://www.prweb.com/releases/2007/7/prweb541868.htm





Graphene Nanoelectronics: Making Tomorrow’s Computers from a Pencil Trace

A representation of conduction channels on a graphene nanoribbon interfaced with gold contacts. Researchers believe graphene’s extremely efficient conductive properties can be exploited for use in nanoelectronics. Photo Credit: Rensselaer/Philip Shemella
A key discovery at Rensselaer Polytechnic Institute could help advance the role of graphene as a possible heir to copper and silicon in nanoelectronics.

Graphene, a one-atom-thick sheet of carbon, eluded scientists for years but was finally made in the laboratory in 2004 with the help of everyday, store-bought clear adhesive tape. Graphite, the common material used in most pencils, is made up of countless layers of graphene. Researchers simply used the gentle stickiness of tape to break apart these layers.

Saroj Nayak, an associate professor in Rensselaer’s Department of Physics, Applied Physics and Astronomy, has worked with graduate student Philip Shemella and others for two years to determine how graphene’s extremely efficient conductive properties can be exploited for use in nanoelectronics. After running dozens of robust computer simulations, the group has demonstrated for the first time that the length, as well as the width, of graphene directly impacts the material’s conduction properties.

Nayak, Shemella, and their team outlined their findings in the report “Energy Gaps in Zero-Dimensional Graphene Nanoribbons” published in the July 23 issue of Applied Physics Letters.

In the form of a long 1-D nanoscale ribbon, which looks like molecular chicken wire, graphene demonstrates unique electrical properties that include either metallic or semiconducting behavior. When short segments of this ribbon are isolated into tiny zero-dimensional (0-D) segments called “nanorectangles,” where the width is measured in atoms, they are classified as either “armchair” or “zigzag” graphene nanoribbons. Both types of nanorectangles have unique and fascinating properties.

Nayak, Shemella and the group took 1-D nanoribbons and trimmed the length down to a few nanometers, so the length was only a few times greater than the width. The lengths of the resulting zero-dimensional graphene nanorectangles had clear and distinct effects on the material’s properties.

The team used quantum mechanical simulations with predictive capability to carry out this work. Their computational study showed for the first time that the length of graphene may be used to manipulate and tune the material’s energy gap. This is important because energy gaps determine if the graphene is metallic or semiconducting.

Generally, when graphene is synthesized, there is a mix of metallic and semiconductor materials. But Nayak’s findings give researchers a blueprint that should allow them to purposefully make entire batches of either one or the other.

This research is an important first step, Nayak and Shemella said, for developing a way to mass produce metallic graphene that could one day replace copper as the primary interconnect material on nearly all computer chips.

The size of computer chips has shrunk dramatically over the past decade, but has recently hit a bottleneck, Nayak said. As copper interconnects get smaller, the copper’s resistance increases and its ability to conduct electricity degrades. This means fewer electrons are able to pass through the copper successfully, and any lingering electrons are expressed as heat. This heat can have negative effects on both a computer chip’s speed and performance.

Researchers in both industry and academia are looking for alternative materials to replace copper as interconnects. Graphene could be a possible successor to copper, Nayak said, because of metallic graphene’s excellent conductivity. Even at room temperature, electrons pass effortlessly, near the speed of light and with little resistance, through metallic graphene. This would almost ensure a graphene interconnect would stay much cooler than a copper interconnect of the same size.

It will likely be years before a graphene interconnect is realized, but major computer companies including IBM and Intel have taken notice of the material. Nayak said graphene is also currently a “hot topic” in academia.

Carbon nanotubes, which are essentially made of rolled-up graphene, are another potential heir to replace copper as the primary material used for interconnects. But they suffer from setbacks similar to those of graphene, Nayak said. When single-walled carbon nanotubes are synthesized, about one-third of the batch is metallic and the remaining two-thirds are semiconductors. It would be extremely difficult to separate the two on a mass scale, Nayak said. On the contrary, recent research at Rensselaer and elsewhere shows graphene could be produced in a more controlled way.

“Fundamentally, at this point, graphene shows much potential for use in interconnects as well as transistors,” Nayak said.

It is also possible that semiconductor graphene could one day be used in place of silicon as the primary semiconductor used in all computer chips, but research into this possibility is still extremely preliminary, Nayak said.
http://www.physorg.com/news104473084.html





Intel Researchers Demonstrate 40Gbps Optical Chips

Earlier this year, some researcher types over at MIT made a bold prediction: Namely, that optical chips--or chips that use light instead of an electrical current as a transmission medium--will hit the market within five years.

Timeframe aside, the prediction made sense for two reasons: 1). It was MIT's engineers and physicists that actually devised one of the first reliable methods for integrating this photonic circuitry onto a silicon chip and 2). Chip manufacturers are going to need to start figuring out alternate ways to squeeze out the needed performance from chips as electronic components (and the metal interconnects between them) continue to shrink in size.

Enter today's announcement on Intel's Research blog. The device Ansheng Liu is holding in the picture above is something called a laser modulator, a component that is capable of encoding optical data at 40 billion bits per second--a speed that conveniently matches the fastest devices deployed today using other materials, Liu said.

Mirroring MITs assertion, Liu said that chip makers have shown a keen interest in photonic integrated circuits (PICs) over the past few years because of their ability to provide a cost-effective solution for optical communication and future optical interconnects in computing industry.

There are obstacles, though: One of the key components needed for silicon PICs is the very high-speed silicon optical modulator, which is used to encode data on optical beam. Unfortunately, most of today's commercially available optical modulators only achieve around 10 Gbps transmission speeds and tend to be based on "more exotic electro-optic materials such as lithium niobate and III-V compound semiconductors."

But with the successful demonstration of Intel's 40 Gbps silicon modulator and the electrically pumped hybrid silicon laser, Liu says it will be far more easy to integrate multiple devices on a single chip that can transmit terabits of aggregate data per second in the near future - truly enabling tera-scale computing.

In short, five years sounds about right.
http://www.gearlog.com/2007/07/intel...emonstrate.php





The Future of Medicine: Insert Chip, Cure Disease?
Press Release

Imagine a chip, strategically placed in the brain, that could prevent epileptic seizures or allow someone who has lost a limb to control an artificial arm just by thinking about it.

It may sound like science fiction, but University of Florida researchers are developing devices that can interpret signals in the brain and stimulate neurons to perform correctly, advances that might someday make it possible for a tiny computer to fix diseases or even allow a paralyzed person to control a prosthetic device with his thoughts.

Armed with a $2.5 million grant they received this year from the National Institutes of Health, UF researchers from the College of Medicine, the College of Engineering and the McKnight Brain Institute have teamed up to create a “neuroprosthetic” chip designed to be implanted in the brain. They are currently studying the concept in rats but are aiming to develop a prototype of the device within the next four years that could be tested in people.

The initial goal? To correct conditions such as paralysis or epilepsy.

“We really feel like if we can do this, we’ll have the technology to offer new options for patients,” said Justin Sanchez, director of the UF Neuroprosthetics Research Group and an assistant professor of pediatric neurology, neuroscience and biomedical engineering. “There’s kind of a revolution going on right now in the neurosciences and biomedical engineering. People are trying to take engineering approaches for directly interfacing with the brain.

“The hope is we can cure more immediately a variety of diseases.”

Researchers have been able to decode brain activity for years using electroencephalography. Referred to commonly as an EEG, this technology involves placing a sensor-wired net over the head to measure brain activity through the scalp. But the technology wasn’t quite sensitive enough to allow researchers to decode brain signals as precisely as needed, Sanchez said. Now researchers are focusing on decoding signals from electrodes placed directly into the brain tissue using wires the width of a strand of hair.

“(Scientists have) realized that by going inside the brain we can capture so much more information, we can have much more resolution,” Sanchez said.

The chip UF researchers are seeking to develop would be implanted directly into the brain tissue, where it could gather data from signals, decode them and stimulate the brain in a self-contained package without wires. In the interim, UF researchers are studying implantable devices in rats and are evaluating an intermediate form of the technology — placing electrodes on the surface of the brain — in people.

UF researchers have developed new techniques using surface electrodes to access signals almost as precisely as they could with sensors implanted in the brain, according to findings the researchers published in May in the Journal of Neuroscience Methods. Developing these techniques is a big step forward in understanding how to best decode a patient’s intent from their brain waves and should have broad implications for delivering therapy, Sanchez said.

To gather data about the brain’s sophisticated cues, which vary from person to person, Sanchez studies the brain signals of children with epilepsy who are scheduled to undergo surgery to remove the part of the brain that is causing seizures. These patients often must be monitored for several days to weeks with electrodes placed directly on the brain. Doctors use this to pinpoint the problem area when a child has another seizure.

Because the children already have electrodes in place, Sanchez is able to use the data gathered from them to understand more about the brain’s signals in general.

UF researchers are also working on intermediate concepts that could be wearable, like a diabetes pump, Sanchez said.

“We have intermediate designs that connect to the brain, interpret signals and can wirelessly send commands to devices,” he said. “This is another path of technology we’re pursuing.”

To create these technologies, Sanchez is in the process of developing a center for brain-machine interfaces at UF with faculty from the College of Engineering, including Jose C. Principe; John G. Harris; Toshikazu Nishida; and Rizwan Bashirullah.

But several challenges face researchers in bringing these technologies to patients, said Dr. Steven J. Schiff, a professor of engineering and neuroscience at The Pennsylvania State University and director of the Penn State Center for Neural Engineering.

For patients with epilepsy, who often have to take several medications or undergo surgery for relief from debilitating seizures, a neuroprosthetic device could be the best form of treatment, Schiff said, adding that more work needs to be done to understand the mechanics of what causes diseases such as epilepsy and Parkinson’s.

“The challenge is not so much the technology,” Schiff said. “The challenge is to use that technology wisely.”

The day may not be too far off when patients can control a prosthetic hand or leg just by thinking about it, Sanchez said.

“It’s becoming a reality,” Sanchez said. “We’re designing electronics that we can interface with biological systems and we can use that to help people.”
http://news.ufl.edu/2007/07/24/brain-chip/





Researchers: Forensics Software Can be Hacked

Bugs in EnCase and The Sleuth Kit can be used to crash the programs or install unauthorized software on investigators' machines
Robert McMillan

The software that police and enterprise security teams use to investigate wrongdoing on computers is not as secure as it should be, according to researchers with Isec Partners.

The San Francisco security company has spent the past six months investigating two forensic investigation programs, Guidance Software's EnCase, and an open-source product called The Sleuth Kit. They have discovered about a dozen bugs that could be used to crash the programs or possibly even install unauthorized software on an investigator's machine, according to Alex Stamos, a researcher and founding partner with Isec Partners.

Researchers have been hacking forensics tools for years, but have traditionally focused on techniques that intruders could use to cover their tracks and thwart forensic investigations. The Isec team has taken a different tack, however, creating hacking tools that can be used to pound the software with data, looking for flaws.

Based on their findings, Stamos's team believes that the EnCase software is not written as securely as it should and could theoretically be exploited by an attacker.

"What Guidance needs to do is change their production and their quality assurance practices," Stamos said. "We looked at a small portion of the functionality of EnCase and we found that there are lots of bug that can make it impossible for somebody to complete their work,"he said. "Basically we can make it impossible to open up a hard drive and look at it."

Isec is holding the technical details of its findings close to its chest, and is not saying whether any bugs they found could be exploited to do something much worse: install unauthorized software on a PC.

But the team will be disclosing some information at next week's Black Hat conference in Las Vegas, Stamos said.

What exactly will be disclosed? The Sleuth Kit project has already patched the flaws Isec has found, so those flaws will be made public. Details on EnCase may be released if the product is patched by then, Stamos said. Isec will also release the debugging and "fuzzing" tools it used to find these flaws, he added.

The Isec research looks interesting, but will probably not have a major impact on the lives of forensic researchers, said Jim Butterworth, Guidance's director of incident response.

Because forensic systems are typically not connected to external networks, they cannot be remotely controlled via the Internet, he said. So even if an attacker could use these techniques to compromise one forensic snapshot of a system, a second forensic tool would provide the real picture. "It's just not that big of a threat because I know a lot of other mitigating steps to take," he said. "A well-trained person does not use a single tool."

Another forensic researcher agreed that the Isec Partners research is interesting, but of limited use to criminals.

That's because most serious attackers are already good enough at covering their tracks that they will never be caught, according to James C. Foster, president and chief scientist at Ciphent Inc. "If you're an attacker you can basically beat the system," he said. "In my opinion, the bigger problem is that the product is not going to provide the data that you want."

However, there is one group that may pay special attention to the Stamos team: defense lawyers. If Isec shows that unauthorized software could have been run on an investigator's PC, it could ultimately undermine the usefulness of these forensic tools in court, said Chris Ridder, residential fellow at the Stanford University Law School Center for Internet and Society

"The big risk is for someone to execute arbitrary code," he said "If there's a risk that the evidence has been compromised or if something has been planted by a third party... then you can call into question the accuracy of the software and possibly get it thrown out."

Butterworth, who has been grilled many times by defense lawyers, agreed. "I wouldn't put anything past a defense attorney ," he said.
http://www.infoworld.com/article/07/....html?SECURITY





Just using crypto is incriminating says expert

Guidance Software Response to iSEC Report on EnCase
Larry Gill

Guidance Software Response to iSEC Report

Guidance Software received and reviewed the report drafted by two presenters at the upcoming Black Hat USA conference. We have also spoken to Alex Stamos, one of the testing leaders. The report authors disclose that they conducted, over a period of six months, intensive testing utilizing specialized proprietary automated testing software. As a result of this extensive testing regimen, they were able to identify six test scenarios, out of “tens of thousands” of test scenarios run, that apparently revealed minor bugs “ in some cases for which there are straightforward workarounds “ in our EnCase® Forensic Edition software. All of the testing involved intentionally corrupted target data that highlighted a few relatively minor bugs. The issues raised do not identify errors affecting the integrity of the evidence collection or authentication process, or the EnCase Enterprise process (i.e., the operation of the servlet code or the operation of the SAFE server). Moreover, the issues raised have nothing to do with the security of the product. Therefore, we strongly dispute any media reports or commentary that imply that there are any “vulnerabilities” or “denials of service” exposed by this report.

Forensic examiners will inevitably come across corrupted data on target systems from time to time; and in standard computer forensics training, including classes offered by Guidance Software, examiners are trained to account for such issues. In addition, while Guidance Software maintains a robust in-house quality assurance process and strives to make our software as stable as possible, no software is completely crash-proof and there will always be anomalies, particularly involving extreme scenarios of corrupted target data.

The following are the six anomalies raised by the report and our brief response to them:

1. [Logical] Disk Image Cannot be Acquired With Certain Corrupted MBR Partition Table.

Response: It should be no surprise to any computer forensic examiner that a logical copy of a volume may not be possible if that volume has a corrupted MBR Partition table. EnCase features an option to acquire the target media physically, rather than logically, to specifically account for this type of scenario. The authors ignored the option of acquiring the data physically. Also, by corrupting the MBR Partition table, the perpetrator would likely render his computer inoperable, which calls into question both the likelihood and feasibility of such a tactic.

2. Corrupted NTFS file system crashed EnCase during acquisition.

Response: The authors state that “this issue appears to be caused by an attempt to read past the end of the buffer.” However, EnCase features an option to de-select the automatic reading of the file system during the acquisition process. Thus, there is an easy work-around. Also, by corrupting the NTFS partitions, the perpetrator would likely render his file system dysfunctional, which calls into question both the likelihood and feasibility of such a tactic. Thus, the chances of this specific scenario occurring in the field are extremely remote; however, Guidance Software will test and, if verified, place this anomaly in its development queue to address the crashing problem in the future.

3. Corrupted Microsoft Exchange database crashes EnCase during multi-threaded search/analysis concurrent to acquisition

Response: The report discloses that this particular anomaly occurred only when every single check box was selected in the search dialogue box, including the search, hash value calculation and verify file signatures features. This means that EnCase was directed to acquire an Exchange database and perform a detailed multi-threaded search and analysis of the data at the same time. This procedure is extremely inconsistent with best practices and akin to opening several hundred files in a word processing program, which of course would cause a memory overload.

4. Corrupted NTFS file systems Causes Memory Error

Response: As noted above, corrupted files or file systems can create challenges. The authors themselves note that the bug is minor, stating that they have “not found any ill effects caused by this error condition other than an error being displayed and corrupted records not being displayed.” In addition, they noted that they are “unaware of any exploitable condition that arises from this error.”

5. EnCase Had Difficulty Reading Intentionally Corrupted NTFS File System Directory.

Response: This issue involves the authors intentionally corrupting an NTFS file system to create a “loop” by, “replacing a directory entry for a file with a reference to the directory”s parent directory.” Experienced forensic examiners are trained to identify such instances of data cloaking. The purposeful hiding of data by the subject of an investigation is in itself important evidence and there are many scenarios where intentional data cloaking provides incriminating evidence, even if the perpetrator is successful in cloaking the data itself. (Emphasis mine, Jack) The chances of this specific scenario occurring in the field are extremely remote, but Guidance Software will test and, if verified, place this anomaly in its development queue to be addressed in the future.

6. EnCase Crashes When Viewing “Certain Deeply Nested Directories.”

Response: The authors created “NTFS images with very deeply nested directories,” causing EnCase to crash when it attempted to “expand all” deeply nested subdirectories. The simple workaround to this problem is to not “expand all” subdirectories, and to instead expand a portion of the subdirectories, or even just proceed directly with the searching and analysis of the acquired image. In addition, while Guidance Software maintains a robust in-house quality assurance process and strives to make our software as stable as possible, no software is completely crash-proof and there will always be anomalies, particularly involving the dramatic scenario manufactured by the authors here. In any event, Guidance Software will test and, if verified, place this anomaly in its development queue to be addressed in the future.
http://www.securityfocus.com/archive.../30/0/threaded





German Court Busts Skype Phone Maker for Violating GPL

Skype because of GPL injury condemns
A Google Translation

Regional court Munich I: GPL must be kept accurately

Once more confirmed a German court the validity of the GPLv2. The regional court Munich condemned Skype because of the injury of the GPL, which above all is interesting, because it concerns thereby a foreign enterprise.

However the VoIP software of Skype was not the center of attention, on the contrary it concerned the VoIP telephone SMCWSKP 100 from SMC, which is sold Skype over its Website and which is delivered without the appropriate Linux source texts, was based it nevertheless on the free operating system. On the other hand Netfilter developer Harald Welte had complained, which holds at parts of the Linux Kernel copyright and with its project gpl-violations.org for years against GPL injury proceeds.

Apart from the fact that the regional court Munich I (Az. The judgement condemned, does not turn off 7 O 5245/07, yet validly) with Skype a Luxemburger company also very clearly to an exact adherence to the GPL. A supplement was attached to the equipment later, which referred to the used GPL software and contained URL, where the source texts are callable - nevertheless this are sufficient the court in the available case, not. This possibility plans the GPL only for software, which is supplied over Internet. Besides the text of the GPL also on the supplement, which likewise offends against the license obligations, was missing.

Beside the procedure against Skype at present also one legal proceedings are pending against the Vertreiber of the telephone, SMC network. Dr. Julia Küng on the sides Institut for legal questions of the free ones and open SOURCE software (ifrOSS) published, also to the attorney Dr. Till hunter belonged to details for the background of the procedure, that represented the plaintiff Harald Welte in the law case against Skype.
http://www.golem.de/0707/53684.html
http://translate.google.com/translat...&hl=en&ie=UTF8
http://translate.google.com/translat...ome2_2007.html





Global Positioning by Cellphone
Larry Magid

THE man in the Verizon Wireless commercials wearing thick-rimmed glasses may be constantly asking, “Can you hear me now?” But the most commonly asked question over mobile phones might actually be, “Where are you now?”

The combination of global positioning systems and cellphones may make that question moot. Cellphone carriers are now mandated by the Federal Communications Commission to provide location information for 911 emergency use. Many now have G.P.S. chips that can pinpoint the phone’s location to within a few feet, though others rely on triangulation, a technology that approximates location based on proximity to cellphone towers.

Even some phones without G.P.S. can help you navigate. The iPhone from Apple, for example, cannot precisely locate you or track you as you drive. But its Google Maps feature can be used to plan a route by entering a start address and a destination. It displays directions or a map.

But as more phones come equipped with a small and relatively inexpensive G.P.S. microchip, the technology is being used for all sorts of location services that the carriers and other companies offer for additional fees. The Disney Family Locator service on a Disney-branded mobile phone uses G.P.S. to track a child’s whereabouts. Parents buy special child and parent phones. The child’s phone is programmed to beam locations to the parent’s phone, which has the ability to display and map the approximate street address where the child is at any given time.

Sprint offers its own Family Locator service that provides parents with the child’s location and alerts them when the child arrives at a specified place.

The Sprint service can also be used to track adult family members, but the adult can control who tracks them.

Verizon’s child locater, called Chaperone, adds a “geofencing” service that allows a parents to define an area — such as a school or baby sitter’s house — where the child is permitted. The parents receive an alert on their handset when the child’s cellphone enters or leaves the zone.

The G.P.S. phones have adult applications, too. Wherify Wireless offers a line of G.P.S.-enabled phones to track elderly relatives or employees. People doing the tracking can locate the trackees through a Web or cellphone interface or by calling the company’s toll-free number and providing the operator with a password.

Helio, a boutique cellphone company aimed at young adults, offers Buddy Beacon, which enables its customers to beam their location to 25 other Helio users. Helio plots directions on Google Maps and searches for nearby businesses.

Loopt, whose service runs only on the Boost prepaid network (it will soon add Sprint), takes this process a step further by allowing its users to continually report their location to friends who are also Loopt customers. Once configured, the phone tracks the user and issues an alert when another Loopt user comes within a certain distance. You have to tell the service who can track you, and you can make yourself invisible to that person at any time.

TeleNav offers a service that turns phones from Sprint, AT&T, T-Mobile and others into a full-fledged G.P.S. navigation device by using the phone’s speaker and color screen. Like most G.P.S. systems, it has a “points of interest” database, but because it is connected to the cellular network, it receives updates in real time. That enables a “gas by price” service that finds nearby stations with the lowest prices. TeleNav’s “share address” feature is similar to Helio’s Buddy Beacon. If you beam your address to other TeleNav users, they can plot you on a map and get directions to your location.

Verizon’s VZ Navigator service also has turn-by-turn voice and onscreen directions and a local search function to help you find nearby businesses.

The drawback to turning a cellphone into a G.P.S. device is that cellphone screens are generally smaller than stand-alone G.P.S. units and a regular cellphone keypad is not ideal for typing in a destination address. On some phones, you can get knocked out of G.P.S. mode if a call comes in. That can be annoying, especially if you need to take the call to confirm where you’re going or when you’ll get there.

Even if your phone does not have G.P.S., you may be able to use some of these services. GlobalSat and other companies offer external Bluetooth receivers that work with some smartphones.

A G.P.S. phone enables many other services. Certain phones using the Sprint/Nextel and Verizon networks can use Bones in Motion’s BiM Active application to track your speed, location, elevation and calories burned while walking, running or cycling. You can view your statistics and a map of your route on the phone or a Web page.

Skyhook Wireless offers a service that uses Wi-Fi to locate laptops and other devices, including some Wi-Fi Internet phones, and with the user’s permission reports that position to others.

Smarter Agent is an apartment finder that combines G.P.S. with local classified ads to find nearby vacant apartments. Slifter lets you see price and availability of products at nearby retailers. And there are all sorts of G.P.S. applications for weather fanatics, including one from the Weather Channel that saves you the trouble of having to enter your ZIP code to find local weather information.

Trimble Outdoors offers a program for Sprint customers that allows them to plot an off-road adventure. It provides topographic and satellite maps even in areas where there no paths. Some phones do require a network connection, which is not always available in areas where there are no paths.

Where.com, a service of uLocate, offers numerous location widgets you can download to your cellphone. One widget works with Eventful.com to locate nearby concerts, plays, sporting events and other activities. The company offers tools to encourage developer to create even more widgets.

Most G.P.S. navigation systems for cars only receive location information, but Dash Navigation, a Silicon Valley start-up, is now testing its Dash Express, which instead of adding G.P.S. to a cellphone adds a cellphone signal to a G.P.S. unit. The cellular radio transmits information both ways between the car and Dash’s servers. Every Dash unit continuously transmits its location and speed so, once there are a sufficient number of systems deployed to create a network effect, the company can determine the traffic flow on any road where Dash users are driving, including surface streets.

In a test drive on U.S. 101 through Silicon Valley, the road color on the map changed from green to yellow just as traffic began to slow. The device displays alternate routes. Although it cannot be used to browse the Web, the Dash Express does have an Internet connection that enables users to look up points of interest and, through an arrangement with Yahoo, can even find stores that carry specific products.

David H. Williams, publisher of LBS Globe, an online newsletter that covers location-based services, envisions G.P.S. navigation becoming more personalized. “Someday it will take the work of planning a trip out of your hands by having the system do it for you,” he said.

Navigation systems will not only route you around traffic, but take you to restaurants it thinks you will like. The technology for this already exists, but, says, Mr. Williams, “most people won’t use it until they’re confident that it will work properly almost all the time.”
http://www.nytimes.com/2007/07/19/te...sics.html?8dpc





Senate Confirmation of OMB Directorship Should Question New OMB Control Over Agency Regulations, says Science Group

New executive order could further politicize federal science
Press Release

A Senate confirmation hearing for former U.S. Rep. Jim Nussle (R-Iowa) to head the Office of Management and Budget (OMB) should provide senators a forum to challenge the latest Bush administration attempt to insulate itself from congressional accountability, according to the Union of Concerned Scientists (UCS).

The hearing will take place Tuesday, July 24, at 10 am in 342 Dirkson Senate Office Building.

In a July 23 letter, UCS and OMB Watch urged Committee on Homeland Security and Governmental Affairs Chair Joseph Lieberman (I-Conn.) to question the nominee on his opinion of Bush administration Executive Order 13422, which goes into effect today. The executive order bans any regulation from moving forward without the approval of an agency's regulatory policy officer, who would be a political appointee. UCS urged the Senate committee to ask Mr. Nussle how he would ensure that political appointees would not interfere with the work of agency scientists.

"We have a corps of highly trained scientists in federal agencies. Why would we want to undermine their expertise and authority?" said Francesca Grifo, director of UCS's Scientific Integrity Program. "This executive order greatly expands the power of the White House to weaken the ability of federal agencies to protect public health and safety. We have the right to know where Mr. Nussle stands."

The groups also sent the letter to Senate Budget Committee Chairman Kent Conrad (D-ND), who is holding an additional confirmation hearing for Nussle later this week.
http://www.ucsusa.org/news/press_rel...nate-0048.html





I’ll have what he’s having ;)

Drunk Employee Kills all the Websites You Care About
Rita Skeeter

365 Main, a datacenter on the edge of San Francisco's Financial District, is popular with Soma (south of Market Street - Jack) startups for its proximity and its state-of-the-art facilities. Or it used to be, anyway, until a power outage took down sites including Craigslist, Six Apart's TypePad and LiveJournal blogging sites, local listings site Yelp, and blog search engine Technorati. The cause? You won't believe it.

A source close to the company says:
Someone came in shitfaced drunk, got angry, went berserk, and fucked up a lot of stuff. There's an outage on 40 or so racks at minimum.

Whoever it is, while we like how you roll in theory, in practice, we'd appreciate it if you laid off the servers running websites we actually use.

We're sure 365 Main will deny that such a thing could ever happen. And, conveniently, the neighborhood is having power troubles, too. But here's a question: When you have several levels of redundant power, what could bring your customers' servers down other than something like an employee physically ripping the plugs out of the wall? Or, with less effort, hitting the emergency-power-off switch that San Francisco's building codes require 365 Main install?

Update: Technorati's Dave Sifry just sent this email:
Folks,

I just wanted to let you know, it looks like San Francisco is having a MAJOR power event, with outages from the Financial district all the way down to Daly City. One of our colos at 365 Main Street has experienced a power outage (never mind that they always swear up and down that this kind of event can't possibly happen, oh no, they have multiple redundant systems and they charge us up the wazoo to make sure that we'll have business continuity, so of course, this isn't really happening, oh yes) however, our other data centers are all up and running, so we hope to be back up and running as quickly as possible.

I'll keep you all updated on progress, and I appreciate you bearing with us as we work our way through this...

Dave


http://valleywag.com/tech/breakdowns...out-282021.php





Multiplex Cinemas Boost India's Movie Mania

Not too long ago, watching a movie in India mostly meant standing in long lines for tickets to spend three hours in a stuffy hall with bug-infested seats, a creaky sound system and a screen sewn up to hide holes.

A ticket cost about half a dollar, the fare offered was often formulaic saccharine romances or blood-and-gore revenge dramas, and movie hall owners had little incentive to improve things as business was reeling under the onslaught of cable TV.

That was until an enterprising businessman in the movie-crazy nation -- the world's biggest in terms of ticket volumes -- stuck his neck out and built the country's first multiplex, or a multi-screen cinema hall in New Delhi about 10 years ago.

The timing seemed just right: economic reform and liberalization initiated in the early 1990s had just begun to give Indians more disposable incomes and the spread of cable TV had also opened them to newer cultural experiences.

Today, scores of multiplexes have mushroomed in cities across the country, bringing with them online or phone booking of tickets, perfumed auditoriums, plush bucket seats and state-of-the-art audio and projection systems.

Some have restaurants attached or snacks delivered at the seats, tickets delivered home, gaming parlors and even valet parking. They show a choice of the latest commercial Indian and Hollywood films, although a ticket now costs about 3 dollars.

Moreover, many are located in big malls, adding the attraction of shopping to a day out at the movies.

"Earlier, it was like one film in one hall, you don't get tickets you go home," said Dipti Varma, a young executive with a business forum. "Now you have a choice of films under one roof."

"And if you still don't get tickets, you can shop in the mall, eat, play and chill out. There are so many options."

Creative Freedom

Such has been the runaway success of this cinema viewing experience that today, even though multiplexes make up just two percent of India's nearly 12,000 screens, they account for more than half the box office revenue of Hollywood releases in the country and more than a third for Bollywood.

That success, however, has not been limited to the glitzy cinema halls.

Industry analysts say that multiplexes with their smaller halls have also redefined filmmaking by creating a niche for experimental cinema among urban, educated audiences.

"Today, the story-line, treatment, production schedules, even budgeting, distribution and pre-release promotions are tailored towards multiplexes," said Derek Bose, an Indian cinema expert.

Multiplexes, where ticket prices are five times that at a single-screen cinema, ensure a faster return on investment for producers, and because of quick turnarounds, have become instrumental at raising the output of films, he said.

"The idea now is to recover investments within the first weekend," said Bose, who has authored several books on Bollywood.

Independent filmmakers like Madhur Bhandarkar agree, saying multiplexes have proved to be a blessing as many recent hits would never have been made if not for them.

"Exhibitors would never run my films in a 1,000-seater hall," said Bhandarkar, a leading director known for his unconventional Bollywood films.

Price Factor

For businessmen who kept their faith in movie halls and invested in multiplexes, it has been a gamble that paid off.

They have thrived on the back of tax incentives over the last five years, and are now looking to expand, according to industry group FICCI.

Aiming to widen their base in search of greater profits, they are now moving to smaller cities and towns, where operating costs are lower, allowing for greater flexibility in ticket pricing.

"Multiplexes will first reap the more lucrative markets -- reap the low hanging fruit first -- and then move on to the smaller markets," said Deepak Asher, director of multiplex operator Inox.

"It is just a question of time before multiplexes hit the B and C towns big time."

While PVR Ltd., the pioneer, has about 70 screens, Inox has about 50. Adlabs Films Ltd., which branched out from film processing to multiplexes, plans to have about 80 screens by 2007/08.

The multiplex industry is expected to grow over 44 percent a year to $220 million by 2008, according to a recent report by brokerage B&K Securities.

The overall Indian film industry, now worth about $2 billion, is expected to grow to $4.3 billion by 2011, FICCI says.

While more and more single-screen cinemas are converting to multiplexes in cities, they still remain the entertainment mainstay for millions in small towns and villages. They are also popular with the urban poor because of their cheaper tickets.

Analysts say high ticket prices have also meant that average occupancy levels in multiplexes have hovered at around 40 percent. They say as multiplexes mushroom and begin cutting into each others' territories, occupancy levels could plummet to 30 percent.
"This could mean the multiplex boom is a bubble that will burst unless ticket prices are brought down," said Bose.
http://www.reuters.com/article/inDep...14312420070723





His First Film Is a Winner (Being a Millionaire Helps)
Jeremy W. Peters

There are filmmakers who toil through film school and then work for years in vain to earn even a modest degree of acclaim. Then there’s Charles H. Ferguson, an indefatigable, overachieving political scientist, turned author, turned dot-com millionaire, turned Sundance-prize-winning filmmaker his first time behind the camera.

“It does seem like a jump, I realize,” he said in an interview in his ninth-floor apartment in one of Richard Meier’s gleaming towers along the Hudson River in Manhattan. Mr. Ferguson was explaining how he came to write, direct, produce and finance “No End in Sight,” a sharply critical documentary about the planning and execution of the American occupation of Iraq that opens tomorrow in New York and Washington.

It was 2004 and Mr. Ferguson, now 52, was by his own admission somewhat adrift. He had just finished his third book, a technical analysis of the problems that were holding back the nation’s broadband infrastructure. Making a war documentary did not seem like the logical next step.

But the idea came to him over dinner in New York one night with his friend George Packer, a New Yorker reporter and author of “The Assassins’ Gate,” another chronicle of how chaos overran the American occupation. Mr. Packer’s description of what he saw in Iraq in the year after the invasion — “that things were much worse, much more screwed up than certainly the administration was claiming,” as Mr. Ferguson recalled it — struck a nerve.

So he sought the advice of journalist friends and policy wonk friends, all of whom were skeptical that such a complicated film could be pulled off by a novice. The American military campaign in Iraq, after all, is hardly virgin territory for documentary filmmakers. Many critical successes have already been produced, among them “Operation: Dreamland” by Ian Olds and Garrett Scott; Michael Tucker and Petra Epperlein’s “Gunner Palace;” and last year’s winner of best documentary at the Tribeca Film Festival, “The War Tapes.” Eamonn Bowles, president of Magnolia Pictures, which is distributing “No End in Sight,” said he questioned at first whether there would be an audience for yet another grim Iraq documentary. “There is no doubt as far as movies go, there really is an Iraq fatigue,” he said. “It really is palpable.”

But unlike many of the earlier Iraq films, which tell their stories through the eyes of soldiers, “No End in Sight,” examines the planning of the American occupation through interviews with some of its principal players like Richard L. Armitage, the deputy secretary of state under Colin L. Powell, and Barbara K. Bodine, the former ambassador to Yemen who ran central Iraq immediately after the fall of Baghdad in early 2003.

The end product is a mathematically precise indictment of the Bush administration’s strategy for stabilizing postwar Iraq. Mr. Ferguson, a San Francisco native who describes himself as socially liberal but a centrist on issues of military policy, said he was initially “very, very sympathetic” to invading Iraq to topple Saddam Hussein’s regime.

Compared with other administration officials depicted in the film, President Bush gets off fairly easy. Mr. Ferguson reserves his harshest judgment for Donald H. Rumsfeld, the defense secretary at the time; Paul D. Wolfowitz, his deputy; and L. Paul Bremer III, the former administrator in Iraq. Mr. Ferguson zeroes in on their decisions during the first few months of the occupation, which he asserts was a make-or-break moment that the Americans ultimately bungled.

Mr. Ferguson said all three men declined his requests for interviews.

In his view, mirroring the take of journalists and analysts who have written about the war, like Mr. Packer and Zbigniew Brzezinski, the former national security adviser to President Jimmy Carter, chaos was there from the beginning, on the streets of Baghdad and in the meetings with President Bush’s top advisers planning the effort. He finds failures large and small, noting at one point that the first team of American administrators in Baghdad discovered once they arrived that they had no working phones.

“Not the best way to start an occupation,” Ms. Bodine says on camera, “No phones, a bare-bones operation.”

At Sundance the film won the special jury prize for a documentary.

So how exactly does a film neophyte pull off a project like this? In Mr. Ferguson’s case he had a lot of A-list help. Alex Gibney, producer of “Enron: The Smartest Guys in the Room,” was the executive producer of “No End in Sight.” John Sloss, who sold “Little Miss Sunshine,” “Napoleon Dynamite” and “Super Size Me” at Sundance when they were virtually unknown, was Mr. Ferguson’s sales agent. He also hired a team of editors, producers and consultants who have lengthy documentary filmmaking résumés with experience from Hollywood to PBS.

The road from Silicon Valley to Sundance was a dizzying ride for Mr. Ferguson. After finishing his Ph.D in political science at the Massachusetts Institute of Technology in 1989, he began consulting for technology companies like Intel and Apple. By 1993 his first book had been published, “Computer Wars: The Fall of IBM and the Future of Global Technology,” which looked at how the computer giant failed to keep up with Silicon Valley start-ups.

That same year Mr. Ferguson had an idea for his own Silicon Valley start-up. He and a partner, Randy Forgaard, founded Vermeer Technologies, which developed a software program that made Web site programming accessible to the masses. About a year later they sold the company to Microsoft for $133 million.

That’s how Mr. Ferguson was able to put up $2 million of his own money — the entire cost of the project — to finance “No End in Sight.” Under the terms of his deal with Magnolia, Mr. Ferguson will receive a percentage of the ticket sales.

After selling Vermeer, he wrote a second book, “High Stakes, No Prisoners: A Winner’s Tale of Greed and Glory in the Internet Wars, ” that tweaked by name more than a few former Silicon Valley colleagues. With that book done, he did what many newly minted dot-com millionaires did at the time: He drifted. Granted, he bounced around some of the nation’s pre-eminent political think tanks and universities, like the Brookings Institution and M.I.T. But he said he found something unsettlingly directionless about the experience, even as he wrote the third book.

Mr. Ferguson said he did not start filming expecting to see so many problems with the planning of the occupation. “But I had no idea how incompetently the occupation was being planned, and with what degree of ideological rigidity and arrogance and callousness and stupidity,” he said. “I just had no idea.” Mr. Ferguson mailed copies of the film to Mr. Rumsfeld, Mr. Bremer, Secretary of State Condoleezza Rice and other administration officials but has heard nothing back.

“No response from anybody,” he said. “Not a word.”
http://www.nytimes.com/2007/07/26/movies/26ferg.html





In the Beginning: Focusing on the Iraq War Enablers
A. O. SCOTT

So far, some of the best documentaries about the war in Iraq — “Gunner Palace,” “The War Tapes” and “Iraq in Fragments,” for example — have concentrated less on politics, policy or military strategy than on individual, in-the-moment experiences. As if to balance a climate of argument thick with generalization and position-taking, these films push debate aside in order to bring home the sensory details of daily life for American soldiers and Iraqi civilians.

“No End in Sight,” Charles Ferguson’s exacting, enraging new film, may signal a shift in emphasis, a move away from the immediacy of cinéma vérité toward overt political argument and historical analysis. Not that these have been scarce over the past few years, as an ever- growing shelf of books can testify. Among Mr. Ferguson’s interview subjects are the authors of some of those books — notably Nir Rosen (“In the Belly of the Green Bird”), James Fallows (“Blind Into Baghdad”) and George Packer (“The Assassins’ Gate”) — and his film in effect offers a summary of some of their conclusions.

Mr. Ferguson, a former Brookings Institution scholar with a doctorate in political science, presents familiar material with impressive concision and impact, offering a clear, temperate and devastating account of high-level arrogance and incompetence.

If failure, as the saying goes, is an orphan, then “No End in Sight” can be thought of as a brief in a paternity suit, offering an emphatic, well- supported answer to a question that has already begun to be mooted on television talk shows and in journals of opinion: Who lost Iraq? On Mr. Ferguson’s short list are Donald Rumsfeld, Dick Cheney, Paul Wolfowitz and L. Paul Bremer III. None of them agreed to be interviewed for the film. Perhaps they will watch it.

The film’s title evokes the apparent interminability of this war more than four years after President Bush declared that “major combat operations” were over, and it twice shows Mr. Rumsfeld telling journalists, “I don’t do quagmires.” But Mr. Ferguson’s focus turns out to be fairly narrow. He does not dwell on the period between Sept. 11, 2001, and the beginning of the invasion that overthrew Saddam Hussein, nor does he spend a lot of time chronicling the violence that has so far taken the lives of more than 3,000 American soldiers and marines and tens, perhaps hundreds, of thousands of Iraqis. Instead, most of the movie deals with a period of a few months in the spring and summer of 2003, when a series of decisions were made that did much to determine the terrible course of subsequent events.

It is important to note that Mr. Ferguson’s principal interlocutors were not, at the time, critics of the Bush administration’s policies in Iraq but rather people who had, often at considerable professional cost and personal risk, committed themselves to fulfilling those policies. They include Barbara Bodine, a diplomat with long experience in the Middle East; Paul Eaton, an Army major general; Seth Moulton, a lieutenant in the Marine Corps; and Jay Garner, the retired lieutenant general who served as head of the Organization of Recovery and Humanitarian Assistance in Iraq.

That agency, set up to rebuild and stabilize Iraq after the invasion, soon gave way to the Coalition Provisional Authority, directed by Mr. Bremer, who took over in May 2003. Already, according to the eyewitnesses interviewed in “No End in Sight,” terrible mistakes had been made. Looting and other early manifestations of disorder were more likely to be met with Rumsfeldian aphorisms — “Stuff happens”; freedom is “untidy” — than with appropriate tactical responses. And then, once the provisional authority assumed control, orders came down to purge the bureaucracy and the civil service of all members of the Baath Party and to dismantle the Iraqi military. As Mr. Eaton and Mr. Garner tell it, the last policy was especially disastrous and was arrived at and carried out precipitously and without discussion.

They, Ms. Bodine, and others — including Richard L. Armitage and Lawrence Wilkerson of the State Department — describe from the inside what has become, to the rest of us, a recognizable pattern. The knowledge and expertise of military, diplomatic and technical professionals was overridden by the ideological certainty of political loyalists. Republican Party operatives, including recent college graduates with little or no relevant experience, were put in charge of delicate and complicated administrative areas. Those who did not demonstrate lock-step fidelity to the White House line were ignored or pushed aside.

It might be argued that since Mr. Bremer, Mr. Rumsfeld and Mr. Wolfowitz declined to appear in the film, Mr. Ferguson was able to present only one side of the story. But the accumulated professional standing of the people he did interview, and their calm, detailed insistence on the facts, makes such an objection implausible. So too does the corroboration of the journalists who watched the story unfold and, perhaps most of all, the sense that anyone but the hardiest Bush loyalist will feel of having seen versions of this story before.

That feeling does not make “No End in Sight” dull or easy to watch. Quite the contrary. It’s a sober, revelatory and absolutely vital film.

NO END IN SIGHT

Opens today in Manhattan.

Directed by Charles Ferguson; narrated by Campbell Scott; director of photography, Antonio Rossi; edited by Chad Beck and Cindy Lee; music by Peter Nashel; produced by Mr. Ferguson, Jennie Amias and Jessie Vogelson; released by Magnolia Pictures. At Film Forum, 209 West Houston Street, west of Avenue of the Americas, South Village. Running time: 102 minutes. This film is not rated.
http://movies2.nytimes.com/2007/07/2...sigh.html?8dpc





While Real Bullets Fly, Movies Bring War Home
Michael Cieply

On a night four years ago, five soldiers back from three months in Iraq went drinking at a Hooters restaurant and a topless bar near Fort Benning, Ga.

Before the night was over, one of them, Specialist Richard R. Davis, was dead of at least 33 stab wounds, his body doused with lighter fluid and burned. Two of the group would eventually be convicted of the murder, another pleaded guilty to manslaughter, and the last confessed to concealing the crime.

Now some in Hollywood want moviegoers to decide if the killing is emblematic of a war gone bad, part of a new and perhaps risky willingness in the entertainment business to push even the touchiest debates about post-9/11 security, Iraq and the troops’ status from the confines of documentaries into the realm of mainstream political drama.

On Sept. 14, Warner Independent Pictures expects to release “In the Valley of Elah,” a drama inspired by the Davis murder, written and directed by Paul Haggis, whose “Crash” won the Academy Award for best picture in 2006. The film stars Tommy Lee Jones as a retired veteran who defies Army bureaucrats and local officials in a search for his son’s killers. In one of the movie’s defining images, the American flag is flown upside down in the heartland, the signal of extreme distress.

Other coming films also use the damaged Iraq veteran to raise questions about a continuing war. In “Grace Is Gone,” directed by James C. Strouse and due in October from the Weinstein Company, John Cusack and two daughters struggle with the loss of a wife and mother who is killed on duty. Kimberly Peirce’s “Stop-Loss,” set for release in March by Paramount, meanwhile, casts Ryan Phillippe as a veteran who defies an order that would send him back to Iraq.

In the past, Hollywood usually gave the veteran more breathing space. William Wyler’s “Best Years of Our Lives,” about the travails of those returning from World War II, was released more than a year after the war’s end. Similarly Hal Ashby’s “Coming Home” and Oliver Stone’s “Born on the Fourth of July,” both stories of Vietnam veterans, came well after the fall of Saigon.

“Media in general responds much more quickly than ever before,” said Scott Rudin, a producer of “Stop-Loss.” “Why shouldn’t movies do the same?” He said his film was deliberately scheduled to be released in the middle of the presidential campaign season.

That impetus for immediacy is driving other filmmakers and studios as well. In October, for example, New Line Cinema will release “Rendition,” in which Reese Witherspoon plays a woman whose Egyptian-born husband is snared by a runaway counterterrorism apparatus. Paul Greengrass, the director of “The Bourne Ultimatum,” in which the bad guys belong to a similar rogue unit, is adapting Rajiv Chandrasekaran’s book about the Green Zone in Baghdad, “Imperial Life in the Emerald City,” for Universal Pictures.

Brian De Palma’s “Redacted,” focusing on an Army squad that persecutes an Iraqi family, is to be released in December by Magnolia Pictures. And Sony Pictures is developing a film based on the story of Richard A. Clarke, the former national security official and Bush administration critic.

Among the new films, “Valley of Elah” is sure to be one of the most closely examined, thanks to Mr. Haggis’s credentials — he shared an Oscar for writing “Million Dollar Baby” and was nominated for another as co-writer of “Letters From Iwo Jima” — and because of his opposition to United States policy in Iraq.

“This is not one of our brighter moments in America,” Mr. Haggis said in a telephone interview from London, where he is still working on the film’s music. “We should not have gotten involved.”

Still, Mr. Haggis insisted that “Valley of Elah” — the title refers to the site where David fought Goliath — was not intended to enforce his point of view. Rather, he said, it is meant to raise questions about “what it does to these kids” to be deployed in a situation where enemies are often indistinguishable from neutral civilians, and the rules of engagement may force decisions that are difficult to live with.

Despite some obvious fictionalization — the Fort Benning case did not involve the authority-challenging local detective and single mother played by Charlize Theron — the film hews closely enough to fact that Mr. Haggis is considering a dedication to Specialist Davis.

But whether the case truly speaks for returning veterans will not be easily settled, even with help from Warner Independent. The studio plans to supplement some of its promotional screenings with panel discussions of post-traumatic stress disorder, a factor raised in the movie.

“The issues are similar to what a lot of us are coping with,” said an approving Garett Reppenhagen, an Iraq veteran who saw “Valley of Elah” last week at one of the first such screenings in Washington. Mr. Reppenhagen, a member of Iraq Veterans Against the War, helped recruit viewers for the screening.

By contrast, Dennis Griffee, a wounded veteran who is national commander of the Iraq War Veterans Organization, said he turned down a request to become involved with the film after learning that Susan Sarandon, a vocal opponent of the war, had a prominent role.

“At the very least it is offensive,” Mr. Griffee said of what he sees as a widespread refusal to acknowledge the troops’ pride at achievements in Iraq. He added that virtually every member of his platoon wound up in college, not jail, on return.

Ilona Meagher, who wrote “Moving a Nation to Care: Post-Traumatic Stress Disorder and America’s Returning Troops” (Ig Publishing) and has joined Warner’s promotional effort, acknowledged that the Davis case was among the most extreme of some 170 stress-related episodes she had documented since 2005. “We all know that human beings respond/are moved by stories that are more extreme in nature,” Ms. Meagher wrote in a follow-up e-mail message.

In listing its Top 10 crime stories of last year, in fact, The Columbus Ledger-Enquirer in Georgia counted only two involving the 25,000 soldiers who are typically stationed at nearby Fort Benning.

Edging his film away from the real case, Mr. Haggis shot mostly in New Mexico and operated without military approvals that would have been required at Fort Benning. He originally wrote the script for Warner Brothers, which eventually agreed that the movie should be financed by Summit Entertainment and NALA Films on a budget that has been reported at about $23 million. The companies are clearly banking on the considerable appeal of Mr. Jones and the potential for awards to overcome perceived audience resistance to Iraq-theme movies.

MGM took in only about $44,000 in domestic ticket sales with Irwin Winkler’s “Home of the Brave,” another returning-vet picture that was released late last year. “We couldn’t get anybody to go see it” despite positive test screenings, Mr. Winkler said. He speculated that the audience might prefer a longer interval before viewing events as troubling as war.

Polly Cohen, president of Warner Independent, views Mr. Haggis’s film in broader terms. “To me, it’s a father-son story,” she said.

For Mr. Haggis, however, selling that story brings some complications: His movie does not see its son quite the way the real-life father sees his own.

“My son saw some war atrocities over in Iraq, and they had to murder him in order to keep it quiet,” said Lanny Davis, a retired Army staff sergeant whose efforts sparked the investigation at a time when his son was assumed to be absent without leave. The atrocity question did not figure significantly in the real-life trial, but the movie puts a twist of its own on the issue.

On another point, however, Mr. Davis had no quarrel with Mr. Haggis. “I’ve been thinking about flying my own flag upside down,” Mr. Davis said. “This isn’t my America, the one I stood up for.”
http://www.nytimes.com/2007/07/26/movies/26movi.html?hp





Producer of 9/11 Conspiracy Film Arrested as Army Deserter
Ryan Lenz

A film producer and veteran of Iraq and Afghanistan who backed a movie about alleged conspiracy theories behind Sept. 11 has been arrested for deserting the 101st Airborne Division two years ago, military officials said Friday.

Korey Rowe, 24, a private in the Fort Campbell, Ky.-based division, was arrested in Oneonta, N.Y., and returned to Kentucky despite claiming to have been honorably discharged.

Military officials at Fort Campbell on Friday said Rowe was arrested by the Otsego County Sheriff's Department in Cooperstown, N.Y., earlier this week and returned to his unit.

Rowe, a veteran of tours to Afghanistan and Iraq with the 101st, helped produce the movie "Loose Change," which alleges a government conspiracy behind 9/11.

In a grainy hand-held video posted online, Rowe suggested being listed as a deserter in a military database was a clerical error.

Oneonta Police Department spokesman Sgt. Dennis Nayor said the U.S. Air Force Office of Special Investigations contacted police asking to have Rowe arrested after people taking pictures were escorted off a military post in New York in a car registered in his name.

Messages were left Friday with the Office of Special Investigations public affairs office and the investigator who initially contacted police.

Cathy Gramling, a spokeswoman for Fort Campbell, said the Army does not actively pursue soldiers who desert but that soldiers who go AWOL are listed in a national database police can access.

An Associated Press examination last month of Pentagon figures found the U.S. military does almost nothing to find deserters, and that just 5 percent of the 3,301 soldiers who deserted in fiscal year 2006 were court-martialed.

Kristina Kissner, a spokesman for Rowe's company Louder Than Words LLC, said filmmakers were at a military installation in New York asking permission to film when they were told to leave.

Kissner declined to comment further.

"We'll comment once we know he's home safe," Kissner said.
http://hosted.ap.org/dynamic/stories...EAST&TEMPLATE=





The Kid Quits the Picture
Allen Salkin

CLAPPY’S people decided to pass.

After seeing a synopsis of a film script for “The Ten,” a comedy based on the Ten Commandments, they decided the part he was up for was not right for him.

They did not think Clappy ought to appear in a sex scene, even one with Winona Ryder, even if it illustrated the commandment forbidding stealing.

Some might call Clappy a dummy for not taking such a high-profile part in a Hollywood movie. But you’re not supposed to call him that.

The proper term is “hard figure,” those in the ventriloquism trade say.

Clappy is a ventriloquist’s doll. Sometimes the smallest detail can illuminate worlds. That the part of the dummy in “The Ten,” which opens Friday, had to be recast is as telling as any about the culture divide between irreverent Hollywood and faith-focused Americans.

The star search began when Duke Scoppa, the film’s property master, was assigned the task of finding a dummy to appear in a vignette about one of the commandments. In it, Ms. Ryder’s character, Kelly LaFonda, falls for a dummy named Gary, steals him backstage and absconds to a motel room with him.

Mr. Scoppa came upon Clappy by searching the Internet and finding the Dummy Works (some of those in the ventriloquism business accept that the public will not stop using the word dummy anytime soon), a maker of ventriloquist characters based in Sherman, Tex. It is Mr. Scoppa’s job to make sure those who own rights to a recognizable product are comfortable with its appearing on film. Generally, dummies are not a generic product and are considered characters with brandable traits.

When Mr. Scoppa told the company’s owners, the husband-wife team of Timothy and Amanda Cowles, that Clappy was up for a part in a movie about the Ten Commandments, they did what a talent agent would do and asked for an outline of the script.

The couple wanted to make sure the part was right for Clappy. The hard figures they make by hand mean more to them than the sum of their parts — urethane, wood and fake hair.

They have created many characters, including Chuckles, a white-haired mustachioed gentleman; Jarvis, a dark-skinned figure with curly hair; and Clappy, who has blue eyes and a round nose. In an average year they sell 20 Clappys, each handmade in their home workshop, for $300 each, Mr. Cowles said. He and his wife are also involved in “creative ministry,” using their art form to spread a Christian message. They lead workshops on puppetry technique and character development at the International Festival of Christian Puppetry and Ventriloquism, an annual weeklong gathering at Olivet Nazarene University in Bourbonnais, Ill., which attracted more than 1,000 participants earlier this month.

Many of their figures are used by missionaries. A Snergi is on a church-founding mission in New Zealand, and a Gilbert is evangelizing in Africa.

“Ventriloquism is just a great tool to share a message,” Mr. Cowles said by phone from Fort Mitchell, Ky., where he was attending another ventriloquism convention.

When he is not doing his other work, Mr. Cowles performs in schools with a character named Hickory McNutt, a little boy figure, delivering a drug awareness message.

“The Ten” is not Charlton Heston’s “Ten Commandments.” The vignette with Gary is pure comedy, not delivering any moral lesson about stealing, or adultery, for that matter, even though Ms. Ryder’s character is supposed to be on her honeymoon before she has her tryst with Gary.

The director David Wain joked in publicity materials that he and his writing partner Ken Marino, with whom he also worked on the film “Wet Hot American Summer,” did “exhaustive research” on the Ten Commandments.

“After 90 long seconds on Google, we’d learned not only what the Ten Commandments were, but what order they were in,” he wrote in a section explaining how the movie was made. “We were thrilled to discover that all Ten Commandments were available — they’d been optioned by Universal but had reverted back to the writer last year.”

In Texas, the Cowleses were spending a lot more than 90 seconds on the script synopsis. “The Ten Commandments are something that’s important for us,” Amanda Cowles said. “We read over it and prayed over it for ourselves, what we should do.”

The couple decided the moviemakers were mocking the commandments, and they did not want Clappy to be part of it. “I just had a hard time building something that was going to be a dummy that was having an affair with someone,” Mr. Cowles said. “Marriage for me and my wife is really sacred.”

The moviemakers had cast an actual ventriloquist, Michael Ziegfeld, to play the role of Gary’s owner, but none of Mr. Ziegfeld’s Muppet-like figures were right for the part: not Willie, the International Bird of Prey; Nadia Coma, the world’s oldest gymnast; nor a talking plate of food.

So Mr. Scoppa turned to Alan Semok, a dummy maker in Somerset, N.J., who has worked quite a bit with Hollywood. Mr. Semok, who calls himself the Dummy Doctor, offered the moviemakers the use of Eugene, a character he’d built and worked with for nearly 30 years. Eugene is a veteran of stage and screen, having appeared recently in commercials for Levitz, Wendy’s and Total Raisin Bran.

The moviemakers were happy with the performance of their second choice. “He did a great job having sex with Winona Ryder,” said Matt Munn, the film’s art director. As racy as the scene with the dummy was, Mr. Semok pointed out that admirers of Ms. Ryder need not be jealous of Eugene.

“He’s just a dummy!” Mr. Semok said, proceeding to break the commandment about taking the Lord’s name in vain.
http://www.nytimes.com/2007/07/29/fa...ml?ref=fashion





FOX Threatens Measures After The Simpsons Movie Leak
MaE

As The Simpsons Movie hits BitTorrent from a Czech source, it’s being claimed that the Czech Republic’s international reputation has been damaged by the leak. At the same time FOX turns up the rhetoric saying that measures will be taken by the ‘tightening up’ of movie distribution in the country.

The Czech dubbed version of The Simpsons Movie made it to BitTorrent trackers a few hours after its world premiere, followed by a Pirate Bay celebration. Due to the Czech Republic screening movie premieres on Thursdays, the Czech fans were amongst the first people worldwide to watch the movie.

The Bontonfilm company - the official Czech distributor of the movie - was apparently a bit surprised when a CAM version of the movie made it to various torrent sites including the Czech tracker MegaTorrent.cz and Sweden’s The Pirate Bay, just a few hours after its premiere.

As for quality, it’s a typical CAM version. People who have already seen this copy are saying that sound quality is satisfying for a CAM version. However, English speaking citizens are likely to be disappointed, its dubbed in Czech and there are no subtitles.

Representative of Bontonfilm Kristina Maixnerová said: “We’ve received an announcement from Czech Anti-Piracy Union that there has been made a recording of this movie directly in the cinema. At this point, it’s still unclear in which cinema, or who made the recording. As far as we know, this is the first case of this type of leak whatsoever in Czech Republic.” She also said that Bontonfilm will make a prosecution against the unknown offender (John Doe) on Monday.

Apparently, the guys at FOX international didn’t like the work of this unknown Simpsons fan either. As Maixnerová said: “Foreign reputation of Czech republic really suffered due this case. As FOX International stated, this will means tightening the security measures in Czech movie distribution.” Night vision goggles, anyone?

This is not the only piracy controversy to hit the Czech republic recently. A DVDrip of Czech film Vratne Lahve (Empties) leaked to the internet a few days ago. The special watermarked copy was originally sent by the Director of the movie to the Czech Culture Department for the purposes of review. Just after this it started showing up on BitTorrent.

As a Czech Homer Simpson might say: “Sáákryš!”
(doh!)
http://torrentfreak.com/fox-threaten...ns-movie-leak/





Industry thriving

Global Theatrical Rental Revenue Rebounds in '06
Hy Hollinger

Revenue from worldwide theatrical rentals -- the bare bones money that returns to the major U.S. studios after the exhibitor's cut and distribution expenses -- soared 20.9% to $7.95 billion in 2006, setting a record for the six MPA companies by beating 2004's $7.48 billion. The returns highlight the industry's comeback from 2005's year of the slump that saw rentals dip to $6.57 billion.

Rental revenue in 2006 was equally divided between the domestic and foreign markets, with the U.S. accounting for $3.970 billion and the international market, including Canada, for $3.976 billion. Foreign revenue went up 25.6% from 2005's $3.16 billion; domestic climbed 16.4% from 2005's $3.41 billion.

The official figures were circulated confidentially this year to major company distribution executives by the MPA, the international arm of the MPAA, and confirm the forecasts of studio honchos that 2006 would be a banner year following the release of such tentpoles as "Pirates of the Caribbean: Dead Man's Chest," "The Da Vinci Code" and "Ice Age: The Meltdown."

The top 25 overseas markets -- with the U.K. at No. 1 to Argentina at No. 25 -- delivered an 86.6% share of the international market, returning $3.44 billion to the major studios last year compared with $2.76 billion in 2005, an increase of $688.19 million, or 25%.

All of the 25 overseas markets showed substantial increases compared with 2005, with Russia (No. 12) moving up 67.2%; Denmark (No. 22), 56.6%; Belgium (No. 17), 47.1%; Poland (No. 20), 47.6% and Norway (40.6%).

An eye-catching statistic concerns Venezuela (No. 13), for which the MPA lists a 312% increase, with a $70 million payout for U.S. imports in 2006 compared with $17 million in 2005.

The U.K., the leading buyer of U.S. films, increased its 2006 imports by 10.5%; Japan (No. 2), 16.9%; Canada (No. 3), 18.3%; Germany (No. 4), 18.3%; Spain (No. 5), 38.6%.

(It has long been the policy of the major studios to regard Canada as a domestic partner, but the MPA lists revenue from the country as foreign income.)

In 2005, pundits in and out of the industry were prognosticating the demise of the international theatrical experience and the wholesale shutdown of movie houses as DVD and the Internet started to flourish. Based on 2006 results, however, there has been a complete reversal, with many of the same pundits now calling attention to the vibrancy of the theatrical industry.
http://www.hollywoodreporter.com/hr/...d13d90644134a8


















Until next week,

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