Go Back   P2P-Zone > Peer to Peer
FAQ Members List Calendar Search Today's Posts Mark Forums Read

Peer to Peer The 3rd millenium technology!

Thread Tools Search this Thread Display Modes
Old 25-04-07, 08:34 AM   #1
JackSpratts's Avatar
Join Date: May 2001
Location: New England
Posts: 9,928
Default Peer-To-Peer News - The Week In Review - April 28th, '07

Founded 2002

"If you do something on peer-to-peer and do it well, it's marketing on steroids." – Mitchell Reichgut

"The cost reduction that digital-web distribution of music makes possible is so large, that a competitive market for music could leave plenty of room for charging the lawful purchaser of originals for the implicit value of the copies he/she will eventually donate or sell to others, again via the Web." – Michele Boldrin

"[MySpace China] users are told to click a button if they spot any 'misconduct' by other users. This 'misconduct' includes actions such as 'endangering national security, leaking state secrets, subverting the government, undermining national unity, spreading rumors or disturbing the social order' – according to the site's terms and conditions." – Lu EnJie

"Even when I smashed my guitars up, they were like, 'Oh right, Pete's breaking guitars. We know what he means.' Whereas I was saying, 'This is autodestructive art.'" – Pete Townshend

"People want to own their music." – Steve Jobs

"Rarely have so many avoidable problems been created by one man’s obsession with his own image. Then again, this is Steve Jobs we’re talking about." – Joe Nocera

April 28th, 2007

Free Music Downloads, Lawsuit not Included

Peer-to-peer networks are going legit with pop-up ads embedded in MP3s. Business 2.0 Magazine reports.
Michael Myser

The next user to download a song from a peer-to-peer file-sharing service like LimeWire could be in for a surprise. Not a recording industry lawsuit, but a pop-up asking him to look at an ad--either text or video--in return for a free and legal copy of the music.

For that, the record labels, which have been trying to monetize illegally traded music for years, can thank a three-year-old company called Intent MediaWorks. Intent has figured out how to embed pop-ups in music and video files unobtrusively, and the company claims that 60 percent of users are willing to endure the resulting pop-up ads.

"Consumers don't want to rip people off," says Les Ottolenghi, president and co-founder of Atlanta-based Intent. "They just want to get music as easily as possible."

Intent is seeding the peer-to-peer networks at a rapid clip. In February its digital media files were downloaded 1.7 million times. By December it expects that number to grow to at least 10 million.

At a cost to the advertiser of $5.80 per 1,000 ad views for text and $30 or more for video, that's a healthy revenue stream. Intent shares the money with artists and their labels, which can also choose to serve up their own promotions within the pop-ups.
Intent's customers already include Nettwerk Music Group, which publishes Barenaked Ladies, Avril Lavigne, and Sarah McLachlan, and Chuck D's Slamjamz Records; the company also expects to sign at least one of the Big Four music firms by mid-2007. Advertisers thus far have included Audi and Coca-Cola (Charts, Fortune 500).

Since Intent follows users no matter what the latest popular file-sharing service is--FrostWire and Shareaza, anyone?--advertisers will pay to reach the eyeballs.

The peer-to-peer audience is made up of young, affluent, and technically savvy consumers, notes Mitchell Reichgut, a principal at ad firm Jun Group. "That's the kind of person you want to reach," he says. "If you do something on peer-to-peer and do it well, it's marketing on steroids."

Qtrax Offer First Legal Ad-Supported P2P
Rachael Darmanin

Qtrax, an online peer-to-peer music network, has reached an agreement with Sony BMG that will allow them to launch the first legal ad-supported P2P system. Users of Qtrax will be able to access songs from the giant label's catalog for a predefined number of times, now with a click-to-buy purchase option. Qtrax is owned by Brilliant Technologies Corporation, a technology holding company that works with Universal Music Publishing, Warner Music Group, and The Orchard, among others. Their deal with Sony BMG is looked at as a start to finding a middle ground between P2P music networks and anti-piracy laws.

"Some see it as trailblazing the ad-supported model and allowing the possibility that in future music downloading will be paid for, in part or in whole, by advertisers," Allan Klepfisz, president and CEO of Brilliant Technologies said, via press release. "Others see it as an effective means of encouraging consumers to sample and subsequently purchase music. Still others see it as the ultimate tool against piracy."

Qtrax can be downloaded for free and besides its music networking software, it also provides users with a player that can play MPQs (Qtrax's format) as well as MP3 and WMA tracks.

Yahoo Strikes Deal to Catalog Lyrics Online

Web giant partners with Gracenote

Yahoo has teamed up with Gracenote, an Emeryville company, to offer what it is calling "the largest catalog of legal, licensed song lyrics" on the Web.

"It fills a huge, gaping hole out there," said Ian Rogers, general manager of Yahoo Music.

While there are plenty of Web sites offering lyrics, Gracenote is the first company to have gone through the painstaking process of negotiating deals with the thousands of publishers who own copyrights to the lyrics. The catalog offered by Yahoo will include lyrics of 400,000 songs owned by more than 10,000 publishers.

About 9,000 artists are represented, ranging from classic names such as the Beatles and Bob Dylan to more recent stars like Radiohead and Beyonce.

"The problem is music publishing is very fragmented," Rogers said.

Craig Palmer, chief executive of Gracenote, said it took more than two years and nearly 100 deals to forge the legal framework behind the database. Gracenote then had to create standards for publishing lyrics on the Web and put together an automated system for compensating the songwriters. This can include as many as 10 writers on a single hip-hop song.

"The copyrights, the database and the payments issues all had to be solved in order to bring this obvious service to market," Palmer said.

Yahoo's song lyrics are supposed to be the official versions. Under the licensing agreement, Yahoo will share with copyright holders the revenue from the ads that will be displayed alongside the lyrics.

Music publishers such as BMG Music Publishing, EMI Music Publishing, Sony/ATV Music Publishing, Universal Music Publishing Group and Warner/Chappell Music are contributing lyrics.

One advantage Yahoo's library will have over other sites is that it will be clean. Competitors tend to pepper their sites with pop-up ads and spyware.

"Those sites generally aren't healthy places for your computer to be," said music analyst Phil Leigh of Inside Digital Media.

Leigh said Yahoo's lyric database may boost the music industry by creating a new revenue stream for artists and song publishers by making it easier for people to identify a tune they might hear on the radio or on the Web.

"I also suspect this might cause the music industry to step up its efforts to take legal action against these unauthorized (lyric) sites with Yahoo cheering them on in the background," Leigh said.

The National Music Publishers Association, a trade group, didn't respond to requests for an interview about Yahoo's database.

Yahoo is hoping its database stimulates even more traffic on its music service, which is already the most popular on the Web. Yahoo Music attracted 22 million U.S. visitors last month to rank it ahead of AOL music (17.5 million visitors) and MySpace music (14.8 million visitors), according to comScore Media Metrix.

A Jack Hack

What's That Spell?
Jack Spratts

The new Yahoo/Gracenote music site uses lossless png image files to display easy to read lyrics while deliberately making regular mouse-over copying impossible (try it and see). However lyrics can still be saved as text with just a few simple steps.

First, you'll need to capture the image. That's easy to do with a browser like Opera. Then you'll have a copy of the words you can work with, such as this crisp Cocteau Twins png from the site (below).

Next you'll need an OCR ripping program like FineReader. That's it, although there may be some additional DRM or other minor issues to contend with. When I first tried it using an outdated version all it produced were several small green dots but after changing the file ending to ".jpg" my old program was able to convert the above image to text…

…and this is what I finally got using FineReader 4x:

Sugar hiccup, hiccup
Sugar hiccup, makes the earth tough and tumPle
Sugar hiccup. Heavens curtsy and bow
Sugar hiccup, makes a pig soar and swoon
Sugar hiccup, sugar hiccup while she reels
Sugar hiccup, sugar hiccup while she reel5
Sugar hiccup
Sugar hiccup, hiccup
Sugar hiccup, makes the earth tough flna'tumtfle.
Sugar hiccup
Sugar hiccup while she rEEl5 .
Sugar hiccup
Sugar hiccup while she rEEl5 .
Sugar hiccup
Sugar hiccup while she rEEl5 .
Sugar hiccup
Sugar hiccup while she rEEl5 .
Sugar hiccup
Heavens curtsy and bovr, sugar hiccup
Makes a pig soar and swoon, sugar hiccup
Heavens curtsy and bow
Makes a pig soar and swoon now
Sugar hiccup while she reels
Sugar hiccup, hiccup now
Sugar hiccup, hiccup
Makes the earth tough and turntflE

Not perfect as you can see but easily corrected and much faster than transcribing the Twins by ear.

I might add that with FineReader now up to version 8, your rips will no doubt be even better.

- js

Collaboration Tools

3 Online Sharing Solutions for Your Documents
Josh Lowensohn

If you're anything like me, you've got a ton of documents that have piled up over the years. People my age (recent college grads) are some of the worst, with nearly a decade of research papers, projects, and various snippets saved along the way--many of which took hours of hard work and are now relegated to hard archive somewhere in your documents folder or on burnt optical media. Lucky for your files, there are a few places to share them with others who might be interested in reading.

Scribd is one of the most popular solutions, and my personal favorite of the bunch. It calls itself the "YouTube for documents," which is a fairly apt description. Scribd users can share popular document formats like Word, PDF, plain text, PowerPoint, and Excel. Each uploaded document can be made private or public, and is completely searchable. Users can also embed a document on Scribd on any Web site or blog. Users who like what they see can save the file as a PDF, Word file, text or MP3 (spoken by an electronic voice).

What's really neat about Scribd is the built-in statistics tracking. This lets you keep track of when and where people have looked at your work, with some neat charts and a viewing log.

YouScript has been around for a couple of months now. YouScript gives your documents (mainly movie or TV scripts) a social networking spin, with the option to create writing groups to share your files with others online. Each group can schedule meetings, hand out assignments or 'homework', and discuss work in the integrated forums and comments. Unlike Scribd, however there's no built-in reader, and documents are managed in a PDF viewer.

OpenFloodgate is a document sharing service created by a Tina Seelig, Executive Director for the Stanford Technology Ventures Program. We heard about OpenFloodgate this morning, and were pitched with the idea that it could be used to share documents for small companies using its document privacy features. Any uploaded document is displayed in an HTML viewer that converts each page into its own image. What's neat is OpenFloodgate's text size selector. This lets you pick from three sizes, including extra large, which is about the size of a children's book. Also cool are user comments, which shows up as an overlay box on top of the document, not as a separate section.

I'd expect to see more of these sites popping up in the future, although with Google Docs, Thinkfree, and Zoho at work on online replacements for our office apps, we're likely to see file migration moving further and further away from the hard drive.

A Winjammer by Any Other Name

NINJAM is a program to allow people to make real music together via the Internet. Every participant can hear every other participant. Each user can also tweak their personal mix to his or her liking. NINJAM is cross-platform, with clients available for Mac OS X and Windows.

NINJAM uses compressed audio which allows it to work with any instrument or combination of instruments. You can sing, play a real piano, play a real saxophone, play a real guitar with whatever effects and guitar amplifier you want, anything. If your computer can record it, then you can jam with it (as opposed to MIDI-only systems that automatically preclude any kind of natural audio collaboration1).

Since the inherent latency of the Internet prevents true realtime synchronization of the jam2, and playing with latency is weird (and often uncomfortable), NINJAM provides a solution by making latency (and the weirdness) much longer.

Latency in NINJAM is measured in measures, and that's what makes it interesting.

The NINJAM client records and streams synchronized intervals of music between participants. Just as the interval finishes recording, it begins playing on everyone else's client. So when you play through an interval, you're playing along with the previous interval of everybody else, and they're playing along with your previous interval. If this sounds pretty bizarre, it sort of is, until you get used to it, then it becomes pretty natural. In many ways, it can be more forgiving than a normal jam, because mistakes propagate differently.

Part tool, part toy, NINJAM is designed with an emphasis on musical experimentation and expression.

How does NINJAM work?
NINJAM uses OGG Vorbis audio compression to compress audio, then streams it to a NINJAM server, which can then stream it to the other people in your jam. This architecture requires a server with adequate bandwidth, but has no firewall or NAT issues. OGG Vorbis is utilized for its great low bitrate characteristics and performance. Each user receives a copy of other users audio streams, allowing for each user to adjust the mix to their liking, as well as remix later. This uses more bandwidth than having a server encode a single stream, but has numerous benefits (including lower server CPU use and the client having the full multichannel data for later use).

NINJAM can also save all of the original uncompressed source material, for doing full quality remixes after the jam.

Pete Townshend: Next 'Who' Album To Be Inspired By Computer Music

The guitarist, with the help of mathematician and composer Lawrence Ball and software engineer David Snowdon, has created a computer system called 'The Method' which allows users to make unique pieces of music created by inputting personal information, sounds and a rhythm.

Users will 'sit' for the software in the same way a person would pose for a portrait painting, and the compositions created will be posted on the site. Townshend plans to use the music created on the web on the next Who album as long as his bandmate Roger Daltrey gives the project the go-ahead.

Speaking at the launch of 'The Method' yesterday, Townshend told BANG Showbiz: "When I first had this idea John Entwistle and Keith Moon were still alive and in the band. They were very dismissive of it.

"Even when I smashed my guitars up, they were like, 'Oh right, Pete's breaking guitars. We know what he means.' Whereas I was saying, 'This is autodestructive art.'

"But today The Who is just me and Roger Daltrey. If I was going to work with this idea, I would want to do it full on and if Roger was into it then I don't see why we couldn't make an album."

Townshend first had the idea for 'The Method' in 1971 when he wrote a futuristic film script called 'The Lifehouse' in which he prophesised about the coming of the internet, and how it would allow people to "share music, make music and call people together to celebrate".

Despite his passion for computer composed music, the rocker admits he hasn't been able to get singer Daltrey, who is a self-confessed technophobe, to try out the unique software.

He explained: "He hasn't tried it out yet. I suppose he might if I led him to the computer. I think he would need to be let alone to try it out."

Roger Daltrey Biography in the Works

Who singer Roger Daltrey will be the subject of a new authorized biography, titled Behind Daltrey's Eyes.

The book was originally begun by author Jalanne Barnes in 1976, but was scrapped in 1987. A new official site discussing the book's mission and stalled history can be found at rogerdaltrey.blogspot.com.

Barnes says that over the years, the Who's main creative force and principle songwriter Pete Townshend had been adamantly opposed to the project. She posted on her site that, "Years ago, when Pete Townshend discovered I was writing a biography about Roger Daltrey, he told me a book about the Who's lead singer could only be written in one of two ways: a fluff piece from a groupie or a hard-nosed expose that would make Townshend look like a tyrant. He could see no other outcome to such an endeavor."

She added that Townshend has since softened his stance about the book: "(Back then) Townshend truly believed that a book about Daltrey written by someone who knew him well could destroy everything Pete had worked so hard to achieve professionally... It is now thirty-one years later and I no longer care what anyone thinks or says about a woman being the author of a book about Roger Daltrey. His story deserves to be told. I think Pete Townshend now understands that."

There has been no word as to when Behind Daltrey's Eyes will be published. The biography will be the first book to be dedicated entirely to Daltrey's life and career.

Roger Daltrey says that despite the fact that the Who had desperately wanted to devote a portion to their nightly concerts to rarely performed material, there simply wasn't enough room in the context of the band's current show: "There's only tiny bits of it you can change every night and us trying to place a lot of the newer songs, obviously a lot of the older ones have to drop out. So, we're stuck between a rock and a hard place. We do our best, and hopefully we will find other formulas to present the other music that people want to hear in different situations in the future."

The Who kick off their final European leg on May 16th in Lisbon, Portugal.

Warner, Bertelsmann Settle Over Napster
Candace Lombardi

Warner Music Group and Bertelsmann have settled a lawsuit regarding Bertelsmann's involvement with Napster's music service in 2001, both companies announced Tuesday. Bertelsmann will pay $110 million to Warner Music, according to a filing with the U.S. Securities and Exchange Commission. The settlement reached by the two companies did not require Bertelsmann to admit liability. Both Bertelsmann and Warner Music declined to comment on the settlement.

Warner Music and several other music publishers in separate lawsuits accused Bertelsmann of profiting from Napster's enablement of illegal music sharing of published music content from 2000 to 2001. Bertelsmann has maintained that it only invested in Napster after the music service changed its practices to abide by copyright laws. Bertelsmann and EMI Group reached a settlement on Napster in March. Bertelsmann settled with Universal in June 2006 over the same issue for $60 million including reimbursement for legal costs.

Judge Denies RIAA "Reconsideration" Motion in Capitol v. Foster, Calls Plaintiffs' Counsel "Disingenuous", Motives "Questionable"
Ray Beckerman

In Capitol v. Foster, Judge Lee R. West has reaffirmed his decision that Ms. Foster is entitled to be reimbursed by the RIAA plaintiffs for her attorneys fees, rejecting the RIAA's Motion for "Reconsideration".

Judge West emphasized the Supreme Court's holding in Fogerty that

[b]ecause copyright law ultimately serves the purpose of enriching the general public through access to creative works, it is peculiarly important that the boundaries of copyright law be demarcated as clearly as possible. Thus, a defendant seeking to advance meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encouraged to litigate meritorious infringement claims.
Judge West, in reviewing the rationale for his decision, noted that

While the Court stopped short of finding the plaintiffs' secondary copyright infringement claims frivolous or objectively unreasonable, it did find that such claims were "untested and marginal." While the Court did not find the plaintiffs' motives were necessarily improper, it did find those motives to be questionable in light of the facts of the case.

He further held that

contrary to the plaintiffs' assertion, the Court did conclude that the Fogertv factor regarding the need for compensating the prevailing party under the particular circumstances of the case was, in fact, met. The Court noted that where, as here, the prevailing party is the defendant who, by definition, receives no award for damages at the successful conclusion of a meritorious defense, considerations of compensation become particularly important.
In response to the RIAA's argument that their research had turned up no reported cases in which a Court had awarded fees but not listed the "Fogerty factors", the Judge pointed out to the RIAA that his research had turned up a number of unpublished cases in which these same plaintiffs had been awarded attorneys fees, without the Court's having listed the "Fogerty factors":

'The plaintiffs stress that they "they are not aware of a single reported decision where a Court has found none of the Fogerty factors but still awarded fees ... ." See Plaintiffs' Reply in Further Support of Their Motion for Reconsideration of this Court's Feb. 6,2007 Order at p. 3, (emphasis in original). The Court has made no effort to canvass all such cases. Its cursory research has, however, uncovered a number of unpublished cases where courts granted record company plaintiffs, including several of the plaintiffs herein, awards of attorneys' fees without so much as a passing mention of Fogerty or its factors. See e.g, Capitol Records, Inc. v. Lyons, 2004 WL 1732324 (N.D. Tex.); Elektra Entertainment Group. Inc. v. Bryant, 2004 WL 783 123 (C.D. Cal.); UMG Recordings, Inc. v. Davito, 2005 WL 3776349 (N.D. Ind.).

The Judge labeled as "disingenuous" the RIAA's contention that had it not moved to dismiss the case, it could have proved secondary liability on defendant's part:

The plaintiffs assert that had the case continued, they would have proved their secondary liability claims. Specifically, they contend they would have been able to show that the defendant knew or "should have known" that her Internet account was being used by a member of her household to infringe the plaintiffs' copyrights. That may be so. The plaintiffs, however, chose not to pursue the claim. The Court finds disingenuous the plaintiffs' assertion that "had they been given an opportunity, they would have been able to prove vicarious infringement." The plaintiffs were in no way deprived of an opportunity to prove their allegations. They moved, voluntarily, to dismiss their claims after the defendant had already made a substantial investment toward defending against those claims.

The Court also rejected the RIAA's statements about the settlement history of the case as being simply "not true":

The plaintiffs contend that beginning on April 21,2005, they gave the defendant "repeated opportunities to end this litigation without paying anything." Of course, that is not true. By the time the plaintiffs offered to dismiss their claims against the defendant, she had made a considerable litigation investment, and would have been required to pay those expenses already incurred. Furthermore, the plaintiffs offered merely to dismiss their claims without prejudice, thus leaving the defendant exposed to continued litigation in the matter. The plaintiffs also persist in conflating the defendant's daughter's infringement with liability on the part of the defendant.

While the plaintiffs obtained a default judgment against the daughter, there has never been any finding of liability on the part of the defendant. On the contrary, she prevailed against the plaintiffs' claims.

RIAA Secretly Tries to Get ISP Subscriber Info

In an attempt to change the rules of the game, the RIAA secretly went to a federal district court in Denver with an ex parte application. The goal was to get the judge to rule that the federal Cable Communications Policy Act does not apply to the RIAA's attempts to get subscriber information from cable companies. Just to clarify, ex parte means that the application was secret, no one else — neither the ISP nor the subscribers — were given notice that this was going on. They were, in effect, asking the Court to rule that the RIAA does not need to get a court order to be able to force an ISP to disclose confidential subscriber information. The Magistrate Judge declined to rule on the issue, but did give them the ex parte discovery order they were looking for.

RIAA Security Expert's Quest For Reliability

In the ongoing case of UMG v. Lindor, Ms. Lindor has now moved to exclude the trial testimony of the RIAA's 'expert' witness, Dr. Doug Jacobson. Jacobson is the CTO and co-founder of Palisade Systems, Inc, and a teacher of internet security at Iowa State, but in his February 23rd deposition testimony she argues he failed to meet the reliability standards prescribed by Daubert v. Merrell Dow Pharmaceuticals, Inc. and Federal Rule of Evidence 702. The Groklaw and Slashdot communities participated in both the preparation of the deposition questions, and the vetting of the witness's responses.

Music Industry Wins UW IDs in File-Sharing Case
Ed Treleven

As many as 53 UW-Madison students could be slapped with lawsuits by the music recording industry after a federal judge on Wednesday ordered the university to surrender their names and other information for sharing digital music files over the Internet.

On Tuesday, 16 record companies represented by the Recording Industry Association of America filed a lawsuit in U.S. District Court seeking the names associated with 53 Internet connections for copyright infringement. On Wednesday, U.S. District Judge John Shabaz signed an order requiring UW-Madison to relinquish the names, addresses, telephone numbers, e-mail addresses and Media Access Control addresses for each of the 53 individuals.

The lawsuit and decision came as no surprise to the university, which last month declined to send out "settlement letters" from the RIAA to alleged copyright violators among UW-Madison students.

"We had every indication that they were going to be going in this direction," said Ken Frazier, interim chief information officer at UW-Madison. "It's the step the RIAA would have to take to get the identity of a user of our network."

The RIAA's "John Doe" lawsuit asks that users associated with the 53 IP (Internet Protocol) address - a series of numbers given to a computer connection on the Internet - be turned over to the record companies named in the lawsuit.

John Doe lawsuits are a routine step that the RIAA takes to learn the identities of those whom it suspects of illegally sharing copyrighted music over the Internet. Generally, RIAA investigators monitor peer-to-peer file-sharing networks - in the UW-Madison case those were the Gnutella and AresWarez networks - and take down the IP addresses of those who are sharing files.

The 53 UW-Madison IP addresses accounted for 24,977 shared audio files, according to court documents.

The RIAA used to directly subpoena the names of those subscribers from Internet service providers, but in 2003 an appeals court ruled that such information could only be obtained under the supervision of a judge. That led to the use of John Doe lawsuits.

But Frazier said that having IP addresses does not mean that the RIAA can find the individuals who were sharing music files. Students share Internet ports and computers, he said, and it's possible that some IP addresses can lead to common areas such as labs.

"There is a very imperfect relationship between an IP address" and a person, Frazier said.

Third-year UW-Madison student Jacob Dalton said that he often downloads free audio files. He lives off campus, mostly using a laptop, but sometimes uses campus computers and networks.

"I'm interested in whether I'd be affected," he said. "If I am, it's kind of scary."

Once the RIAA has the information that UW-Madison has been ordered to supply, it will likely send settlement offers to people it has identified as having illegally shared music over the Internet, often about $3,000. If those offers fail to settle the cases, the RIAA will sue those individuals in federal court to recover money it claims it is owed for the shared music.

Most of the more than 30 file sharing lawsuits heard in the federal court in Madison have ended in default judgments or stipulated settlements. Judgments have ranged between $5,000 and $15,000.

No doubt that price, and the entire process, will be daunting to students, Frazier said.

"We continue to be really concerned for students," he said. "The prospect of being sued in federal court is a really scary one."

State Journal reporter Deborah Ziff contributed to this article.

Ohio University Announces Changes in File-Sharing Policies

In an effort to ensure that every student, faculty member and researcher has access to the computer resources they need, Ohio University announced today it will restrict the use of all peer-to-peer, or P2P, file-sharing on the campus computer network.

“The network is a shared resource, and we must ensure that it is available to all users,” said Chief Information Officer Brice Bible. “Peer-to-peer file-sharing consumes a disproportionate amount of resources, both in bandwidth and human technical support.”

Beginning at 12:01 a.m. Friday, April 27, the university will begin monitoring its network for P2P file sharing activity and disabling Internet access for computers found in violation of the new policy. Once disabled, a computer’s Internet access will remain off until its user contacts the IT Service Desk (740-593-1222) and agrees to abide by the university’s computer and network use policy. A second violation will result in Internet access being disabled again and a referral to University Judiciaries if a student is in violation or to the appropriate administrator if an employee is involved.

Although P2P file-sharing can sometimes be used for legitimate reasons, any use of P2P software on the campus network may result in Internet access being disabled under this new policy. Individuals who need to use P2P software for legitimate purposes can discuss their needs with the IT Service Desk.

In addition to consuming bandwidth and technological resources, P2P file-sharing also exposes the university network to viruses, spyware and other attacks. It also is frequently used for illegally distributing copyrighted works.

Today’s announcement follows the recent crackdown by the Recording Industry Association of America on illegal music downloading. The RIAA sent more than 1,200 prelitigation letters to colleges and universities, including 100 to Ohio University. It also initiated “John Doe” lawsuits against users of computers on Ohio University’s network. The university estimates staff members have spent nearly 120 hours dealing with the prelitigation letters from the RIAA.

“Left unchecked, P2P applications can consume all available network bandwidth,” said Bible. “In fact this happened at Ohio University years ago when the original Napster file-sharing program became widely available.”

Some file-sharing programs that could trigger action are Ares, Azureus, BitTorrent, BitLord, KaZaA, LimeWire, Shareaza and uTorrent.

Students are being informed of this policy change today through campus e-mail. In addition, IT officials will host an information session at noon Thursday, April 26, in Baker University Center 230 for all interested parties. To learn more, users can check the “frequently asked questions” page.

U.S. Copyright Report More Rhetoric Than Reality
Michael Geist

This week the Office of the United States Trade Representative (USTR), the U.S. government department responsible for international trade, will release its annual report card on intellectual property protection around the world. The "Special 301 report" typically identifies about 50 countries that the U.S. has targeted for legal reform.

This year, it is a virtual certainty that Canada will receive special attention, with the U.S. claiming that the country has neglected to address critical issues and suggesting that it is rapidly emerging as a piracy haven. While the report will generate media headlines and cries for immediate action from Industry Minister Maxime Bernier and Canadian Heritage Minister Bev Oda, the reality is that Canada’s record on intellectual property protection meets international standards.

Moreover, differences between the U.S. and Canadian economies - the U.S. is a major exporter of cultural products and has therefore unsurprisingly made stronger copyright protection a core element of its trade strategy while Canada is a net importer of cultural products with a billion dollar annual culture deficit - means that U.S.-backed reforms may do more harm than good.

In fact, the U.S. claims fail to recognize that the current Canadian legal framework is successfully supporting a rapidly developing digital marketplace featuring digital download music sales that grew by 122 percent last year (nearly double the U.S. rate) with twice as many online music sellers as the U.S. when measured on a per capita basis.

Consider three issues likely to generate criticism in the Special 301 report - the fact that Canada has not ratified the World Intellectual Property Organization's Internet treaties, extended the term of copyright by an additional 20 years, or introduced anti-camcording legislation designed to stem movie piracy.

Notwithstanding the pressure on Canada to act on these issues, even one-time U.S. supporters are beginning to admit that these policies are open to doubt. Last month, Bruce Lehman, who served as the Assistant Secretary of Commerce in the Clinton Administration where he was the chief architect of the WIPO Internet treaties, acknowledged that "our Clinton administration policies didn't work out very well." Meanwhile, Marybeth Peters, the U.S. Registrar of Copyrights has noted that the U.S. extension of copyright was a "big mistake," and the President of the U.S. National Theater Owners Association has advised his members that notwithstanding the introduction of anti-camcording laws, unauthorized camcording in the U.S. is on the rise.

Not only are the policies suspect, but the USTR report should be seen for what it is - a biased analysis of Canadian law supported by a well-orchestrated lobby effort.

Since the mid-1990s, the USTR has placed intellectual property protection at the very top of its priority list. As a result, dozens of countries have entered into trade agreements with the U.S. in which they undertake to implement U.S. style intellectual property protections.

The latest example is this month's free trade agreement between the U.S. and South Korea. As part of that deal, the U.S. demanded that South Korea extend the term of copyright, ratify the WIPO Internet treaties, decrease Korean content requirements, and open Korean broadcast and telecommunications companies to total U.S. ownership.

Canada has not faced similar trade pressures - the North American Free Trade Agreement pre-dates the shift in USTR priorities - yet it has not been spared intense U.S. lobbying.

In recent months, U.S. Ambassador David Wilkins has publicly called on Canada to introduce copyright reform, characterizing our laws as the weakest in the G7 (conveniently overlooking the fact that the G7 no longer exists and references to the G8, which includes Russia, would not be accurate), while U.S. Senators Dianne Feinstein and John Cornyn have written a public letter to Prime Minister Stephen Harper demanding anti-camcording legislation.

Government documents obtained under the Access to Information Act reveal that lobbying pressure is even more intense behind closed doors. During the first nine months of 2006, the documents show meetings focused exclusively on intellectual property were held between U.S. and Canadian officials in January and September in Washington as well as in April, May, and August at the U.S. embassy in Ottawa.

The documents also reveal that even Canadian Members of Parliament have used their positions to promote USTR concerns. In August 2005, then Canadian Heritage Parliamentary Secretary Sarmite Bulte sent a personal request to Frank McKenna, the Canadian Ambassador to the United States, to meet for "a briefing on USTR concerns" with Canadian copyright reform. The private meeting, which took place a month later in Washington, featured the Ambassador, Ms. Bulte, and Canadian Recording Industry Association President Graham Henderson.

While the USTR report and its supporters seek to paint Canada as a laggard on copyright, this rhetoric ignores the fact that Canada is compliant with its international obligations and that Canadian law is consistent with the laws in most countries around the world. For example, of the three highlighted issues (WIPO ratification, copyright extension, and camcording), only three of 192 United Nations members - the U.S., Singapore, and the Czech Republic - have completed all three reforms.

Canada need not become the fourth country on that list. The USTR may give a Canada a failing grade, however, the real failure lies with countries that cave into such bullying by enacting laws that are not in their national interest.

News From The North
The TankGirl Diaries

European Parliament Criminalises Businesses, Consumers, Innovators

Strasbourg, 25 April 2007 -- The European Parliament today accepted the IP Criminal Measures directive after its first reading in a vote of 374 to 278, and 17 abstentions. It left several unexamined rights in the scope, and threatens to criminalise consumers and incriminate ISPs. Recommendations from an alliance of libraries, consumers and innovators were not followed, although Parliament was clearly divided on several issues.

Terrorists illegally copying and selling phone directories will probably not sleep very well tonight. Neither will spare parts makers who, according to Parliament, should risk criminal penalties if they infringe on a part's design right. It is very strange that the rapporteur insisted on having these unexamined database and design rights included in the scope", said Jonas Maebe, FFII analyst.

"Today, 'inciting' is only criminal in some member states, and in exceptional cases such as hate speech. Elevating IPRs to the same level is a scary development. The inciting clause is also reminiscent of the US 'Induce Act', which threatened to make MP3 players such as the iPod illegal", Maebe added.

He continued: "On the positive side, Parliament did decide that abuse of these misguided measures has to be punishable, and that the neutrality of investigations should be safeguarded. It also explicitly mentioned several statutory exceptions to IPRs, where criminal measures should not be applied."

The Commission introduced the Criminal Measures IP directive, also known as IPRED2 or Criminal Enforcement directive, as a way to combat organised crime and terrorism. It would do so by turning all intentional, commercial scale infringements of all IP rights into a criminal offence.

The problem with this logic is that very few infringements have anything to do whatsoever with criminal activities, let alone with terrorism. Furthermore, the TRIPs treaty already requires criminal measures against commercial scale copyright piracy and counterfeiting, and in most other cases civil law is more appropriate.

The directive is also controversial because it is the first time that the European Parliament is co-legislating criminal law in the EU to such an extent. This also means that individual governments lose their veto power when the directive will be treated in the Council.

Source: Foundation for a Free Information Infrastructure

The Swedish Pirate party criticizes the directivy harshly. The directive criminalizes the 'incitement to a copyright infringement' while Piratpartiet sees on the contrary that pirate copying is beneficial to the society, and argues so in its party program. Therefore Piratpartiet sees that the directive would criminalize the party itself, thereby letting the narrow economical interests of copyright industry override the principles of freedom of thought and political democracy.


ISPs are Called on to do More Against "Hate Pages" on the Web
Monika Ermert and Robert W. Smith

Internet providers will be expected to do more against violence- and hate-extolling pages on the Internet. A declaration of the European Parliament, which will be submitted to a plenary session in Strasbourg next week, is designed to give a decisive push in this direction. The draft of the declaration, which heise online has seen, calls on providers in somewhat vague language to make provisions against "hate pages" part of their standard terms and conditions. The ultimate object of the push by five EU Members of Parliament, Glyn Ford and Claude Moraes of the UK's Labour Party, the Hungarian Liberal Party member Viktória Mohácsi and the two German European Members of Parliament Bernd Posselt (Christian Social Union; CSU) and Feleknas Uca (The Left Party), is to banish racism and hate propaganda from the Internet altogether. The preamble to the declaration mentions anti-Semitism, Islamophobia and anti-Romany campaigns. Should the providers refuse to act more forcefully the five initiators of the declaration have vowed to pressure the European Commission into drafting appropriate legislation.

For the document to have its desired effect, however, a majority of MPs, the larger the better, will need to sign it. In their current declaration the Members of Parliament also call on the EU Commission to become more engaged in the fight against racial hatred on the Web. The Commission should, within the framework of the Safer Internet Plus program, do more to have such nefarious content removed, the parliamentarians declare. In addition it would be wise to learn from efforts undertaken in this regard by other countries, such as the United States, the MPs write. It is there, however, that many of the anti-Semitic pages that so upset the Europeans are hosted and where by invoking the First Amendment to the Constitution, which prohibits Congress from making any law "abridging the freedom of speech, or of the press," such pages are able to last. It needs to be said, though, that organizations such as jugendschutz.net have repeatedly pointed out that providers are willing to remove pages from the Web when requested to do so by authorities whose duty it is to protect the young.

The final section of the declaration addresses the member states of the European Union. These are there called upon to ratify, if they have not yet done so, as quickly as possible the Additional Protocol to the Convention on Cybercrime, concerning the criminalization of acts of a racist and xenophobic nature committed through computer systems of the Council of Europe. Germany too has not yet ratified the Additional Protocol.

A question not addressed in the declaration is whether the appeal it contains is primarily aimed at Web hosters or whether entities that offer Internet access services are also thereby to be reminded of their duties. The delicate question of where to draw the line between pages a company should on no account host and those it might find offensive but not be expected to do anything about, the initiators also fail to give an answer to in their short text.

Murdoch Is Taking MySpace to China
David Barboza

Rupert Murdoch’s News Corporation is bringing MySpace.com to China, a latecomer that is betting it can overcome its handicap by competing unconventionally as a start-up.

The News Corporation signed a deal to license the brand for its popular online social networking site and allow local Chinese entrepreneurs who understand their market to pick and choose to build an indigenous business. With this approach, the News Corporation, hopes to succeed where other Western Internet ventures have failed.

The company and two venture capital firms agreed earlier this month to hire a former Microsoft executive to license the MySpace.com brand and technology in China in an attempt to capture some of the business in the world’s fastest-growing Internet market.
MySpace.com is entering China at a time when social-networking and online gaming and entertainment sites are already wildly popular.

“They want to avoid some of the mistakes made by the first and second waves of international Internet companies that came to China,” said William Bao Bean, a partner at Softbank China & India, a venture capital firm. “By putting a local manager in, they give the company a fighting chance. This is a very crowded area with at least 100 companies competing in the same space that MySpace has entered.”

American Internet companies have scrambled to set up operations in China’s booming online marketplace, which already has more than 137 million Internet users, second only to the United States.

But the China operations of Amazon.com, eBay, Yahoo and even Google have all either lost ground or ceded the leading market position that they enjoy abroad to local rivals despite, in some cases, spending hundreds of millions of dollars to acquire established Chinese competitors.

The new company, called MySpace China, will tailor the site to the Chinese market. For instance, while MySpace.com invites newcomers to meet their first friend, Tom, who is a company founder, MySpace China introduces new visitors to a Chinese friend.

Still, it faces stiff competition from China’s home-grown Internet companies, including Baidu, Tencent, Sina and 51.com, as well as dozens of other MySpace.com-like Internet start-ups.

Analysts say that Chinese Internet entrepreneurs like Robin Li of Baidu, Ma Huateng of Tencent and Jack Ma of Alibaba.com, have managed to outmaneuver their Western counterparts, partly because they have a better sense of the needs of Chinese Internet users.

Foreign Internet companies have also struggled to find the right balance between complying with China’s stringent censorship — sometimes having their sites blocked in China — and providing enough interesting content to attract users.

Mr. Murdoch has tried to gain access to the Chinese market for some of his media properties, but has faced difficulties because of tight controls. Now the News Corporation, which acquired MySpace in 2005 for about $580 million, has teamed up with IDG VC, a unit of the Boston-based International Data Group, and China Broadband Capital Partners. In effect, they are financing a Chinese start-up.

Richard Ji, an Internet analyst at Morgan Stanley, said MySpace China might use the News Corporation’s content. “They have a competitive advantage in sports content,” Mr. Ji said. “The Chinese government likes sports content, and so do advertisers here.”

The group, headed by the News Corporation, did not say how much it has committed to investing in MySpace China, but people close to the talks say that the funding is substantial. The strategy and partnership were partly devised with the help of Wendi Deng, Murdoch’s Chinese-born wife, according to people involved in the deal. Ms. Deng is not an officer of the News Corporation, but she has been named to the board of directors of MySpace China, according to people involved in the talks.

According to the deal, the News Corporation, IDG and China Broadband Capital will largely fund the operations of MySpace China. IDG, which is headed in China by Hugo Shong, has more than $800 million under management and has invested in some of China’s biggest Internet start-ups, including Baidu, Tencent, 3721.com and Eachnet.

Luo Chuan, 38, who used to run Microsoft’s MSN portal in China, will be the company’s chief executive. “We want to create a site that allows people to find serious relationships and to share something with new friends,” he said, “to share pain and loneliness.”

MySpace Now Available in China - Minus Politics and Religion
Lu EnJie

MySpace, the world's largest social networking website, has finally come to China, the world's most populous nation. After months of delays, China's 1.3 billion citizens are now able to create their own pages on the Chinese-language version of MySpace. But unlike MySpace in other countries, sensitive topics like religion and politics are nowhere to be found on the Chinese site, and users are asked to report 'subversive' activity.

MySpace, which already has more than 100 million users worldwide, is backed by News Corporation, one of the world's largest media groups. The company formally announced MySpace China yesterday, and the site went live shortly after midnight in China, with a layout which mimics that of its main global site - with a few key differences.

Discussion forums on subjects like religion and politics are nowhere to be found on the new Chinese MySpace site, even though these are popular topics on other international MySpace sites. Instead, users are only offered safer topics for conversation, such as humor, sport and movies.

Users are told to click a button if they spot any 'misconduct' by other users. This 'misconduct' includes actions such as 'endangering national security, leaking state secrets, subverting the government, undermining national unity, spreading rumors or disturbing the social order' – according to the site's terms and conditions.

Attempts to post content containing a variety of sensitive terms, such as 'Taiwanese independence', the 'Fa Lun' religious movement or the Dalai Lama, produce the following message. 'Sorry, the article you want to publish may contain inappropriate content. Please delete the unsuitable content, and then try reposting it. Thank you. '

Yahoo's China Unit is Ordered to Pay Music Companies for Copyright Violations

Yahoo's China unit has been ordered to pay the world's biggest music companies compensation for copyright violations two weeks after the United States sued China at the World Trade Organization to stop intellectual piracy in the Asian nation.

The Web site, operated by Alibaba.com, must delete links to 229 songs on nonaffiliated sites and pay 210,000 yuan, or $27,176, in compensation to companies including EMI Group, according a ruling by the Beijing Second Intermediate People's Court posted Tuesday on the Web site of the Chinese Supreme Court.

About 85 percent of recordings in China are illegal, with sales of pirated music worth $410 million in 2005, according to the International Federation of the Phonographic Industry, the industry group that organized the suit. EMI, Warner Music Group and nine other record companies sued Yahoo China in March on claims that it violated copyrights by allowing users of its search engine to find links to pirated music.

"Chinese Internet companies will face more lawsuits in the future because they've become more profitable and more people are paying attention to them," Tony Chen, a partner at the law firm Jones Day, said by telephone Tuesday from Shanghai.

Yahoo China said it was planning to appeal the ruling. "This is a case that has far-reaching implications for all search engines," it said in an e-mailed statement.

Yahoo and the digital media company Gracenote opened an online lyrics service Tuesday, the first industry-backed effort in a market dominated by unauthorized, rogue Web sites, Reuters reported from Los Angeles.

The Yahoo deal follows an agreement last summer between music publishers and Gracenote, giving Gracenote the rights to lyrics from the North American catalogs of Bertelsmann's BMG Music Publishing, Vivendi's Universal Music Publishing Group, Sony/ATV Music Publishing, jointly owned by Sony and Michael Jackson, peermusic and other publishers.

Terms of the Yahoo deal were not disclosed but officials said it was a variable revenue-sharing agreement based on advertising.

Sony says China Pirated Spider-Man DVDs are Fakes

Sony Pictures Entertainment on Tuesday said DVDs in China that were reported to be pirated copies of widely anticipated "Spider-Man 3" are in fact copies of its predecessor, "Spider-Man 2."

"Contrary to news reports about stolen copies of 'Spider-Man 3' being sold illegally on the streets in China, our investigation in China has revealed no case of the film being pirated to date," Sony Pictures said in a statement.

"After an initial investigation of online sites worldwide, we have so far found no pirated copies of 'Spider-Man 3' on the Internet," Sony added.

Reports of the illegal copies highlight the speed with which some movie pirates work to put fake DVDs on the street, and Sony's response underscores the determination of Hollywood's studios to stop the piracy they say costs them billions of dollars annually in lost revenues.

The movie about a crime-fighting superhero with spider-like powers will not be released to theaters until May 4 after a series of global premieres that began last week in Tokyo.

Earlier this week, news reports from Beijing said illegal, or pirated, copies of "Spider-Man 3" DVDs were selling for roughly $1 in city street bazaars.

Sony said, "We have uncovered examples of 'Spider-Man 2' being sold in 'Spider-Man 3' boxes in China. But thus far, we can find no instance where 'Spider-Man 3' has appeared on DVD."

Sony Pictures, a unit of Japanese electronics company Sony Corp., said similar hoaxes have occurred in the past ahead of the release of other major films.

China Aims to Tame Internet and Spread Party Line

Chinese President Hu Jintao on Monday launched a campaign to rid the country's sprawling Internet of "unhealthy" content and make it a springboard for Communist Party doctrine, state television reported.

With Hu presiding, the Communist Party Politburo -- its 24-member inner council -- discussed cleaning up the Internet, state television reported. The meeting promised to place the often unruly medium more firmly under propaganda controls.

"Development and administration of Internet culture must stick to the direction of socialist advanced culture, adhere to correct propaganda guidance," said a summary of the meeting read on the news broadcast.

"Internet cultural units must conscientiously take on the responsibility of encouraging development of a system of core socialist values."

The meeting was far from the first time China has sought to rein in the Internet. In January, Hu made a similar call to "purify" it, and there have been many such calls before.

But the announcement indicated that Hu wants ever tighter controls as he braces for a series of political hurdles and seeks to govern a generation of young Chinese for whom Mao Zedong's socialist revolution is a hazy history lesson.

"Consolidate the guiding status of Marxism in the ideological sphere," the party meeting urged, calling for more Marxist education on the Internet.

The Communist Party is preparing for a congress later this year that is set to give Hu another five-year term and open the way for him to choose eventual successors. In 2008, Beijing hosts the Olympic Games, when the party's economic achievements will be on display, along with its political and media controls.

In 2006, China's Internet users grew by 26 million, or 23.4 percent, year on year, to reach 137 million, Chinese authorities have estimated.

That lucrative market has attracted big investors such as Google and Yahoo. They have been criticized by some rights groups for bowing to China's censors.

The one-party government already wields a vast system of filters and censorship that blocks the majority of users from sites offering uncensored opinion and news. But even in China, news of official misdeeds and dissident opinion has been able to travel fast through online bulletin boards and blogs.

Authorities have also launched repeated crackdowns on pornography and salacious content. The latest campaign against porn and "rumor-spreading" was announced earlier this month.

The meeting also announced that schools and sports groups would be encouraged to use healthy competition as a way to shape youth, the report said.

"Sports plays an irreplaceable role in the formation of young people's thinking and character, mental development and aesthetic formation," the meeting declared.

Fingerprint Scanners Track Chinese College Students

A Chinese college has introduced fingerprint scanners to stop student truancy, the China Daily said on Tuesday. But not everyone is pleased about it.

Meiya College of International Studies at Hunan University spent 250,000 yuan ($32,360) last year to install the scanners in each of its 30-plus classrooms.

"Students are now required to 'check in' to each class by pressing their thumbs against the scanner," the newspaper said.

Hou Lichen, dean of the college in the central province of Hunan, said that in the past, teachers would record attendances by taking registers. However, these were time-consuming and it was easy to cheat.

Attendance had risen to 95 percent since the scanners were introduced, the newspaper said.

However, not everyone likes the idea.

Gu Yifan, a first-year student, said she would never skip class, regardless of whether there was a scanner.

"We are adults. Is it really necessary to control us in this way?" she was quoted as saying.

Other students said they feared the fingerprint data could be leaked out of the college and used for other purposes.

Hunan University isn't the first educational institution to employ biometrics, however. In 2005, St. Andrew's College, a K-12 school in Ireland, tested fingerprint readers in a bid to stamp out truancy.

A New Twist on Snooping at Wal-Mart
Michael Barbaro

A former Wal-Mart computer technician, who asserted that company employees eavesdropped on board meetings and conducted clandestine surveillance on shareholders, has reversed himself and denied both claims in sworn testimony, the giant retailer said yesterday.

Bruce D. Gabbard, who was fired in March for taping telephone calls between Wal-Mart employees and a reporter for The New York Times, had told The Wall Street Journal that he was part of an elaborate operation that snooped on employees, stockholders and company critics.

After receiving angry letters from shareholders, who demanded an investigation of the accusation, Wal-Mart’s chief executive, H. Lee Scott Jr., took the unusual step of publicly denying several of Mr. Gabbard’s most damaging charges in a statement and released portions of his sworn testimony conducted after the Journal articles were published.

“Some of the most disturbing assertions,” made by Mr. Gabbard, the chief executive wrote, “simply are not true.”

In a transcript of Mr. Gabbard’s testimony, conducted by a lawyer for Wal-Mart on April 18, the former technician said several statements were taken out of context or inaccurately attributed to him in the articles, Wal-Mart said.

For example, Mr. Gabbard denied that he secretly listened in on or taped board meetings, seemingly contradicting his assertion in an article on April 9 when he said, “I’m the guy listening to the board of directors when Lee Scott is excused from the room.”

Wal-Mart said it sought Mr. Gabbard’s sworn testimony after publication of the Journal articles and that he had voluntarily agreed, adding that it had not made any financial settlement with Mr. Gabbard to secure his testimony.

Mr. Gabbard did not respond to a message and his lawyer, W. H. Taylor, declined to comment on Wal-Mart’s claims.

Wal-Mart did not deny several other assertions in the Journal articles — that, for example, company employees conducted surveillance on groups critical of the company, like Acorn, and firms hired by the company, like McKinsey & Company, the consultant.

Mr. Gabbard worked in Wal-Mart’s Threat Research and Analysis Group, a special team inside Wal-Mart’s information technology department. The team is responsible for, among other things, securing the flow of information among senior executives and directors, the company said.

A spokesman for The Wall Street Journal, Robert Christie, said the newspaper was “confident that the information provided to The Journal by Mr. Gabbard, who is being investigated by the criminal arm of the United States attorney’s office for conduct relating to Wal-Mart, was accurately reported.” Mr. Christie noted that Mr. Gabbard made similar statements to The Associated Press.

Wal-Mart said that its own investigation into Mr. Gabbard’s assertions showed that no employee had either secretly listened in on board meetings or conducted surveillance on shareholders.

Wal-Mart did concede, however, that employees have in the past researched the background of shareholders expected to attend its annual meeting in Arkansas. It justified this to prepare for investors with “a history of being disruptive” who “might use this high-profile forum to stage an inappropriate or disruptive protest.”

In one case, for example, publicly available Web sites, found through Google, were searched regarding PETA, or People for the Ethical Treatment of Animals, before a member of the group was scheduled to present a shareholder proposal at the 2006 annual meeting, the company disclosed.

But Wal-Mart said the research did not prevent PETA members from speaking at the meeting.

Chris Kofinis, the head of communications for WakeUpWalmart.com, a union-financed group critical of the company, called for an independent investigation of Mr. Gabbard’s claims “to determine, once and for all, who is telling the truth.”

Wal-Mart fired Mr. Gabbard after discovering that he had taped telephone conversations between this reporter and members of Wal-Mart’s public relations staff and intercepted electronic text messages sent by employees. Wal-Mart said it had not authorized those activities.

For Wal-Mart, Mr. Gabbard’s most inflammatory accusations surrounded the surveillance of shareholders. An internal memorandum dated January 2007, provided to The Journal, suggested that Wal-Mart might conduct “background work on the potential threat assessment” of certain shareholders submitting proposals for its annual meeting in June.

In a statement yesterday, Wal-Mart’s general counsel, Thomas A. Mars, said that the company had never carried out any such research on those shareholders in preparation for this year’s annual meeting — “not even through Google,” he wrote.

Seeing Through Walls

Have you considered that someone could be reading what's on your monitor from a few rooms away? It's unlikely, but possible, as work by Cambridge University computer security researcher Markus Kuhn shows.

A radio antenna and radio receiver - equipment totalling less than £1000 - is all you need. Kuhn managed to grab the image to the left through two intermediate offices and three plasterboard walls.

Back in 1985, Wim Van Eck proved it was possible to tune into the radio emissions produced by electromagentic coils in a CRT display and then reconstruct the image. The practice became known as Van Eck Phreaking, and NATO spent a fortune making its systems invulnerable to it. It was a major part of Neal Stephenson's novel Cryptonomicon.

CRTs are now well on the way to being history. But Kuhn has shown that eavesdropping is possible on flat panel displays too. It works slightly differently. With a flat panel display the aim is to tune into the radio emissions produced by the cables sending a signal to the monitor. The on-screen image is fed through the cable one pixel at a time. Because they come through in order you just have to stack them up. And Kuhn has worked out how to decode the colour of each pixel from its particular wave form.

If everything is just right, you can pick up signals from some distance. "I was able to eavesdrop certain laptops through three walls," says Kuhn. "At the CEBIT conference, in 2006, I was able to see the Powerpoint presentation from a stand 25 metres away." Here's the image he managed to get:

Kuhn also mentioned that one laptop was vulnerable because it had metal hinges that carried the signal of the display cable. I asked if you could alter a device to make it easier to spy on. "There are a lot of innocuous modifications you can make to maximise the chance of getting a good signal," he told me. For example, adding small pieces of wire or cable to a display could make a big difference.

As for defending against this kind of attack, Kuhn says using well-shielded cables, certain combinations of colours and making everything a little fuzzy all work.

When YouTube is a Threat
Eric Pfanner

As YouTube, the Internet video-sharing service, generates millions of new fans in far-flung countries, it is making enemies of some of their governments. Many are putting pressure on the company to tailor, or self-censor, its site to take account of local sensibilities, analysts say.

So far, YouTube, which Google acquired in November for $1.6 billion, has refused to back down in its standoff with the military-appointed government of Thailand, which recently cut off access to YouTube over a video that denigrated the country's king, Bhumibol Adulyadej.

But Thailand is only one of a growing number of countries that are worried about the power of Internet video, which cuts across linguistic borders and allows individuals anywhere to publish dissident tracts, sexually risqué films or other undesirable "user-generated content."

Since April 11, for instance, China has quietly blocked access to DailyMotion, a French video-sharing site, for unexplained reasons, company executives said.

"You've got this explosive growth in the popularity of YouTube, and a lot of countries feel threatened by this," said Ronald Deibert, director of the Citizen Lab at the University of Toronto and a member of the Open Net Initiative, a group of academics who monitor Internet censorship.

"Governments are getting more savvy about the way people use these tools to promote revolutions," Deibert said.

Though YouTube is based in the United States, much of its recent growth has come overseas. According to ComScore Networks, which tracks Internet traffic, three-quarters of the 134 million unique visitors to YouTube in February were outside North America, with the Middle East and Africa recording the most rapid increases.

YouTube says that a big part of its appeal is that it provides would-be video stars, and their fans, with a single, global platform, unlike localized user-generated content sites.

"YouTube remains committed to creating a community where people from around the world can express themselves and share their views," said Julie Supan, head of global communications at YouTube.

But analysts say localization would be a logical step in the wake of Google's acquisition. Google has embraced the idea of local versions for its search engine, introducing separate sites for more than 100 countries.

YouTube declined to comment on whether it was considering such a move, which might not come without criticism. Google's decision last year to censor the Chinese version of its search engine, Google.cn, to placate government concerns drew scorn from some free-speech advocates.

Analysts say there are several ways in which YouTube could be adapted for international markets. The company could, like the Google search engine, create local-language sites, denoted with separate suffixes like .fr for France or .cn for China.

Or the company could keep the single address, www.youtube.com, and automatically send users in different countries to local versions, a process called geographical zoning. These sites could have entirely different content or could simply block access to certain material in some markets, analysts say.

DailyMotion, for instance, uses this approach to send users to any of five different sites, depending on where the users are located, to comply with local laws.

"It wouldn't be that difficult technologically for YouTube to do geographical zoning," said Jonathan Zittrain, a professor of Internet governance and regulation at Oxford University. "But it is partial censorship."

For now, YouTube relies on a two-step editing method to try to ensure that videos comply with the site's "terms of use," which state that material deemed to be pornographic, violent or racist, among other things, is unwelcome.

The site asks users to flag any videos they see as inappropriate; editors at YouTube then review these clips and have the final say on whether they stay up or go.

The problem with this system is that video that seems inoffensive to viewers in San Bruno, California, where YouTube is based, can be incendiary in other places, at least to some individuals or governments.

Supan said YouTube hoped to resolve the dispute in Thailand "in the near future." But Thailand, which called the video of the king "insulting," is not the only country to take action against YouTube.

A Turkish court last month responded to clips that appeared to denigrate Mustafa Kemal Ataturk, the founder of modern Turkey, by ordering Internet providers to block access to YouTube. Iran has been barring YouTube and several other Western Web sites since December, objecting to "corrupting" influences.

In general, Deibert said, Internet censorship is on the rise globally. The Open Net Initiative found that over the past year, more than two dozen countries regularly blocked sites entirely or filtered out content they considered offensive.

As recently as 2002, only China, Iran and Saudi Arabia did so, he said.

Though YouTube has balked at the Thai government's demand that it remove the video of the king, it sometimes gives in to similar requests. It pulled one of the Ataturk clips, for instance, whereupon service was restored in Turkey.

From time to time, YouTube has also removed other videos that might have passed muster in the United States. Last year, for instance, it dropped a clip of a model, Daniela Cicarelli, frolicking on a beach in Brazil with her boyfriend, after a court in that country ordered Internet service providers to block access to YouTube.

Last autumn, YouTube took down videos posted by the National Democratic Party, a far-right group in Germany that wanted to use YouTube for weekly broadcasts.

Other American Internet companies have had to adjust their European sites to take account of laws in several countries prohibiting the display of Nazi imagery.

Analysts say it is unclear what YouTube might have to do about videos dealing with Nazi themes, which are not hard to find on YouTube.

Elsewhere, politicians have spoken out against YouTube for another reason, contending that it encourages "cyber-bullying."

Alan Johnson, the British Education Secretary, called on YouTube not to carry videos of students insulting each other or their teachers, apparently an increasingly popular genre of video in Britain. In several countries, individual schools have blocked access to YouTube over similar issues.

Internet experts are watching closely for any developments in China. YouTube says it has not encountered any censorship there, though the government routinely filters out Internet content about topics like "democracy" and "Tiananmen Square."

For now, that means even the Chinese can still find on YouTube the famous video of a lone dissident standing in the path of a tank during the uprisings in 1989, analysts say.

But Beijing's move to block access to DailyMotion prompted speculation that it might soon apply pressure to Google to adapt YouTube for the Chinese market.

"They are probably saying, 'You censored your search engine - now you have to censor YouTube,' " said Julien Pain, head of the Internet freedom desk at Reporters Sans Frontières in Paris. "If Google agrees to censor YouTube, then the Chinese will have won. We're already on a slippery slope."

Digital Proves Problematic

Industry lacks method to store footage
David S. Cohen

As far as movies are concerned, digital, like diamonds, was supposed to be forever.

No more dyes to fade, no more film stocks to decay or catch fire. Just pristine digital data, preserved for all time, and release prints as clear and sharp as the images caught by the camera.

Just one problem: For long-term storage, digital is -- so far -- proving to be a time bomb, more permanent than sand painting but not much else.

Simply put, there's no generally accepted way to store digital "footage" for more than a few months. After that the industry is using a hodgepodge of improvised solutions, some rather costly, others not very reliable.

That looked like a small problem when digital filmmaking was limited to low-budget indies, animation houses and tech pioneers like James Cameron and George Lucas.

Now, though, that small problem is growing geometrically as the major studios shift away from film to digital capture. Such recent releases as "300," "Apocalypto," "Zodiac" and "Superman Returns" were shot on digital. Their digital masters could be seriously degraded if the problem isn't addressed quickly.

In fact, the problem is so severe that the Academy of Motion Picture Arts & Sciences' Science and Technology Council warned in 2005 that within just a few years films shot with digital cameras could be lost.

Two years on, digital is going mainstream, but "The problem is still there," says Phil Feiner, chairman of the Acad Sci-Tech Council's archiving committee. And those few years the council warned of are nearly up.

It's not that there's no way to store digital data. On the contrary, there are dozens of ways to store it, most of which go obsolete in just a few years. Remember 5" floppies and Zip disks?

And the disks that have stuck around? Not so reliable.

Data tapes are balky and can fall apart. Data DVDs and CDs have a history of "rotting" and can't be counted on to last as long as their commercially pressed cousins.

Plus there's no reason to expect that the computers of 20 years from now -- never mind 100 -- will be able to plug in to today's hard disks.Some private companies are jumping in as awareness of the problem grows, and Feiner's committee will be launching several initiatives over the months to come.

But the amount of digital footage that needs to be archived is growing faster than ever.

More than one tech expert, including the Academy's Sci-Tech Council director Andy Maltz, told Variety they had found archival tapes unreadable just 18 months after they were made.

Feiner, the former longtime prexy of Pacific Title, says when he worked on studio feature films he found missing frames or corrupted data on 40% of the data tapes that came in from digital intermediate houses.

The tapes were only nine months old.

"On certain pictures we had to go into the DI negative and re-scan the data," he says. "You couldn't retrieve it. Gone."

Milt Shefter, who is a team leader on Feiner's digital archiving committee, warns that "Long term, it's possible that we're looking going back to the early days of motion pictures, where films are made, put out for a week or two, then thrown away."

With acetate or polyester film, the typical approach to archiving has been summed up as "store and ignore."

Color film can be turned into black-and-white color separations on polyester stock. Properly stored in cool vaults at low humidity, such film can last centuries. But there's no way to "store and ignore" digital.

Instead, digital data has to be copied, or "migrated," to new storage every few years.

Migration, however, takes computers, an IT staff, software and a lot of labor. In short: money.

While indies may lack the funds to do regular migration, studios are plunging in.

Sony's VP of asset management and film restoration, Grover Crisp, says the studio has put in a program of migrating every two to three years.

"The motion pictures and original material, those are primary assets of the company," says Crisp. "We all want to do whatever we can to protect those assets."

Disney's VP of production technology Howard Lukk, says as the studios' digital archives grow, migration becomes a bigger job.

"It's like painting the Golden Gate Bridge and it getting a foot longer every year."

Not only are more films shot digitally now, but digital filmmaking encourages directors to shoot more footage.

Mel Gibson told Variety, "Here's the horror. In the average film, it's 900,000 feet to 1.2 million to make a film, roundabout.

"('Apocalypto') was the equivalent of 3 million feet, so it's a lot of stuff that you don't use but it's recorded."

"The technological issues here are not going to be solved by the entertainment industry," says Shefter. "It's going to take big business, big science and maybe big government."

In the meantime, the Academy is stepping in to make the motion picture industry's voice heard in any big business initiative to solve the problem.

The digital archive project is the broadest initiative launched since the Acad decided in 2003 to fund the current incarnation of the Science & Technology Council.

Maltz expects a report that will pin down what the industry needs to do to be released in a few months.

Meanwhile, private industry is attacking digital archiving, too, with at least one announcement in the field planned for NAB.

At NAB, Elektrofilm Digital Studios and Sun Microsystems announced a service to manage and archive the vast amounts of video from feature film production.

Many tech experts expect the studios to eventually outsource all their archiving and migration to companies like Elektrofilm rather than try to do it themselves. Feiner says what is happening is, in effect, the birth of a new business: digital archiving.

He speaks from experience. Earlier this year, three companies received Science & Technology Awards for their work on archiving. Feiner and his Pacific Title team were among the winners.

Their solution takes the data from a digital intermediate and turns it into three-color separation negatives.

In other words, they take the digital movie and turn it into good old-fashioned film.

From Many Tweets, One Loud Voice on the Internet
Jason Pontin

“ONLY connect,” the English novelist E. M. Forster admonished mankind. I don’t think, however, that he meant that we should connect exclusively, or continuously.

Habitual users of a new, free communications service called Twitter would disagree. For anyone unfamiliar with the latest trends in technology, “Twitterers” send and receive short messages, called “tweets,” on Twitter’s Web site, with instant messaging software, or with mobile phones. Unlike most text messages, tweets — usually in answer to Twitter’s prompt, “What are you doing?” — are routed among networks of friends. Strangers, called “followers,” can also choose to receive the tweets of people they find interesting.

Tweets are published on a “public timeline” on Twitter’s home page. As I write this column, “54626” in Scottsdale, Ariz., is wondering, “Does anyone else really dig the word ‘Mandible’? I kind of love it right now.” “Opheliac9” in Minneapolis posts, “Guess what? I’m at the CC. Come one, come all.” “Angelamaria” in the Philippines is simply “annoyed.”

David Troy, a software developer in Maryland, has created a Web site called Twittervision that superimposes this public timeline on a Google map. Every few seconds, a tweet appears and vanishes somewhere on the globe. It is an absorbing spectacle: a global vision of the human race’s quotidian thoughts and activities, or at least of that portion of the species who twitter.

Most twitterers communicate with small networks of people they know, but the most popular have thousands of friends and followers. One of the best-loved twitterers, Paul Terry Walhaus, a gray-haired blogger from Austin, Tex., has 9,177 friends and 1,851 followers, according to the tracking site Twitterholic.

At least one politician has tuned into the service. John Edwards, who has 2,001 followers and 2,082 friends, recently twittered that his presidential campaign would be “carbon neutral.”

After Robert Scoble, who writes a popular technology blog called Scobleizer and who himself has 2,985 followers and 3,045 friends, challenged this ambitious vow on Twitter, Mr. Edwards twittered back that he would, as president, offset his campaign’s carbon emissions by financing alternative energy research.

Twitter, which was created by a 10-person start-up in San Francisco called Obvious, is a heady mixture of messaging; social networking of the sort associated with Web sites like MySpace; the terse, jittery personal revelations of “microblogging” found on services like Jaiku; and something called “presence,” shorthand for the idea that people should enjoy an “always on” virtual omnipresence.

It’s easy to satirize Twitter’s trendiness, and cranky critics have mocked the banality of most tweets and questioned whether we really need such an assault upon our powers of concentration. But right now, it’s one of the fastest-growing phenomena on the Internet.

In March, when Twitter was voted “best of the Web” at South by Southwest, the annual multimedia and music festival in Austin, the service had 100,000 members, according to Biz Stone, an engineer at Obvious. The festival prize prompted, or coincided with, a remarkably rapid adoption of Twitter by the international digerati. Although Obvious has become secretive about how many people use Twitter, Evan Williams, the founder of Obvious, told me that there were three and a half times more tweets in the second week of April than there were before South by Southwest.

Celebrity twitterers, Twittervision and the triviality of tweets have dominated early discussions of Twitter on blogs and Web sites. But Mr. Williams argues that critics do not appreciate the true utility of his service.

“It’s understandable that you would look at someone’s twitter that you don’t know and wonder why it would be interesting,” he says. “And celebrity twitterers are really outliers, even though they get a lot of attention.”

Instead, Mr. Williams says, Twitter is best understood as a highly flexible messaging system that swiftly routes messages, composed on a variety of devices, to the people who have elected to receive them in the medium the recipients prefer. It is a technology that encourages a new mode of communication, he contends.

“It adds a layer of information and connection to people’s lives that wasn’t there before,” Mr. Williams says. “It has the potential to be a really substantial part of how people keep in touch with each other.”

MANY twitterers agree. Mr. Scoble, the blogger, wrote to me by e-mail: “Twitter lets me hear from a lot of people in a very short period of time.”

Tony Stubblebine, who founded a social network called CrowdVine, wrote to me: “At some point I got so busy and self-absorbed that I stopped reading or writing personal e-mails. I’d see my sister about once a month and ask, ‘What’s up?’ only to find out, ‘Not much.’ Now I have a much more detailed picture of her life.”

But others who have tried the service are less enamored of the new connectedness. Bruce Sterling, the science fiction writer and journalist, who used Twitter at South by Southwest, wrote to me, “Using Twitter for literate communication is about as likely as firing up a CB radio and hearing some guy recite ‘The Iliad.’ ”

My own experiences with Twitter were mixed. I quickly realized that decrying the banality of tweets missed their point. The only people in the world who might be interested in my twittering — my family, my close friends — were precisely the ones who would be entertained and comforted by their triviality.

But I also strongly disliked the radical self-revelation of Twitter. I wasn’t sure that it was good for my intimate circle to know so much about my daily rounds, or healthy for me to tell them. A little secretiveness is, perhaps, a necessary lubricant in our social relations. I wondered whether twittering could ever have broad appeal.

Mr. Williams, who is 34, doesn’t seem to understand such reservations. “People seem to like it,” he says, adding that he wants to expand Twitter as quickly as possible. He candidly acknowledges that he doesn’t know how Twitter will earn money — although he speculates that direct marketing on the network has commercial potential.

“It’s sort of a classic Internet thing, trying to make something popular,” he says. “I’m not terribly worried about the business, because I’m confident we can extract value, and I’m funding all of it right now.”

He can afford to do so. Mr. Williams is a serial entrepreneur who made his fortune by selling Pyra Labs, the creator of Blogger, a popular blog publishing tool, to Google in 2003.

Sending tweets broadcasts “I am alive!” Reading tweets satisfies the craving of many people to know the smallest details of the lives of those they love. But whether those twin impulses are universal enough to make Twitter really popular — that is, whether Forster’s admonition has an absolute logic — and whether the service can be made into a sustainable business, are quite unknown. I’m skeptical.

It Don’t Mean a Thing if You Ain’t Got That Ping
Matt Richtel

THE BlackBerry network went dark last week — cache-flow problems, apparently. Service stopped for a mere 12 hours, but to bereft users, 12 minutes was too long. Information feeds our lives, they protested, and the BlackBerry provides it. What if we miss the e-mail message that makes or breaks our happiness, or our bank account?

That’s always possible, of course. But what if what the users were missing was more primitive and insidious than uninterrupted access to information?

Experts who study computer use say the stated yearning to stay abreast of things may mask more visceral and powerful needs, as many self-aware users themselves will attest. Seductive, nearly inescapable needs.

Some theorize that constant use becomes ritualistic physical behavior, even addiction, the absorption of nervous energy, like chomping gum.

This behavior is then fueled by powerful social motivators. Interaction with a device delivering data gives a feeling of validation, inclusion and desirability. (It’s no fun to be the only un-pinged person in the room.)

James E. Katz, director of the Center for Mobile Computing at Rutgers University, said the data coming from the devices was really secondary. “Look at a lot of the communication — it’s idiotic in terms of substance,” Mr. Katz said. “But it’s vital in terms of meaning.”

Mr. Katz argues that participation gives people a sense of belonging, one traceable to the atavistic desire to congregate and cooperate for safety and survival. In addition, he said, the constant checking is an exercise in optimism, like being an explorer or a gambler. Eternal hope delivered in tiny bits while you’re on the go.

“It’s random reinforcement,” Mr. Katz said. The fact that you don’t know when important news will come, he said, “means you will quickly engage in obsessive compulsive behavior.”

These social needs and yearnings may drive the use. But at some point, that use becomes an end unto itself — a physical ritual that can take on some of the qualities of actual addiction, said Dr. John Ratey, a clinical associate professor of psychiatry at Harvard, where he specializes in neuropsychiatry.

Several years ago, Mr. Ratey began using the term “acquired attention deficit disorder” to describe the condition of people who are accustomed to a constant stream of digital stimulation and feel bored in the absence of it. Regardless of whether the stimulation is from the Internet, TV or a cellphone, the brain, he said, is hijacked.

“I liken it to a drug,” Mr. Ratey said. “Drug addicts don’t think; they just start moving. Like moving for your BlackBerry.”

When the BlackBerry system faltered on Tuesday night, Steven M. Krausz, a Silicon Valley venture capitalist, was attending an industry dinner at a conference in Washington, D.C. The malfunction didn’t interrupt his habit.

“I checked it at least a dozen times during dinner,” Mr. Krausz said, in part because he was curious about when service would be restored but also because the constant checking was a placeholder for less desirable activities.

“I’d rather reach for the BlackBerry than reach for bread or dessert and put some high-cholesterol item in my mouth,” he said, calling his habit “a reflexive response.” Besides, he added, he checked his device regularly “because it was a boring dinner speaker.”

There were two speakers, actually: Dr. Anthony S. Fauci, head of the National Institute of Allergy and Infectious Diseases, and Dr. Tadataka Yamada, executive director of global health for the Bill & Melinda Gates Foundation. Not the least boring to some listeners, but the threshold for boredom is low these days, say compulsive device operators.

BlackBerry users do half-joke that they have become junkies, insatiable data tokers. But because the tool is tied to productivity, defined by some as essential to modern employment, overusers don’t really regard their habit as the digital equivalent of firing up a Marlboro outside work.

Perhaps they should re-examine the tie to productivity, however. The technology creates the allusion that every moment can be a productive one, said Tara Hunt, 33, a marketing director for a technology consulting company in San Francisco. When you’re not participating, it’s like you’re suggesting that you’re not keeping up, she said.

“I might think I’m missing out if Google bought another company and I wasn’t part of the echo chamber around it,” Ms. Hunt said, referring to the chance she’d miss news of an industry development. “At the end of the day, it doesn’t matter a whole lot.”

B. Marc Averitt, a technology investor, said that on the face of it, his fear was that someone would send him a message, become frustrated and bored if there wasn’t an immediate response, then go look elsewhere for an answer. He keeps up, he said, because everyone else is doing it, forcing his hand.

But on a deeper level, Mr. Averitt said he found a frustrating, even counterproductive, psychological fixation. And one that he sometimes has to satisfy in secret. On vacations, he said, he has been known to check his BlackBerry even after promising his wife he wouldn’t. His wife says the activity takes him out of the real emotions of the present.

And perhaps, for some, that is the point.

Dr. Ratey, from Harvard, likens the problem to a food addiction, which is one of the most beguiling for psychiatrists. After all, he said, food is essential for life, but problematic in excessive doses. And that’s what makes breaking technology addiction so difficult.

Sometimes the habit is there even when the device isn’t. Users talk of phantom urges, like (no kidding) the feeling of a hip vibrating, as if to suggest a belt-hooked BlackBerry is buzzing when, in fact, the person is the shower. Others hear a beep in the night, say from outdoors or an alarm clock, and reach for the device.

“It’s like Pavlov’s dog,” Mr. Averitt said.

To Find the Danger, This Software Poses as the Bad Guys
Michael Fitzgerald

FOR all our dependence on computer software, the truth is, it isn’t very safe. Recent data breaches involving tens of millions of confidential company files have made this all too clear.

Why is software potentially so dangerous to the health of a business? There are scores of reasons. The big one is that software systems are so complex that it is next to impossible to find all the holes.

That can lead to trouble: hackers stealing trade secrets, for example, or customer information. Company servers can also be infiltrated and used to send spam, or data can inadvertently be exposed to anyone with access to a search engine.

The rise of the Web, which encourages companies to connect their programs to those of other companies, creates the potential for even more software problems — most code wasn’t written with sharing in mind.

Then there is the growing practice of releasing unfinished “beta” code to the Web to keep ahead of competitors, which can make it seem as if the software industry prefers to fix products after the fact. Indeed, at times, the software industry appears to be racing downhill while still trying to build its car.

A new company, Veracode, of Burlington, Mass., gives companies a way to help keep the wheels on. In February, Veracode introduced SecurityReview, a service that lets companies automatically test their code, either alone or with other businesses. The goal is to find vulnerabilities that could leave data exposed or that hackers could exploit.

Some of these vulnerabilities are as old as software itself — like the buffer overflow, in which hackers hijack computer systems by interrupting program commands and inserting new ones. Veracode’s tool finds these and other common problems with software by acting as an automatic hacker.

Little wonder, since the company’s founders, Chris Wysopal and Christien Rioux, were members of the L0pht, a security research group. The L0pht spent much of its time looking for security weaknesses in software, and its members were often criticized as finding problems but not solutions, Mr. Wysopal says. In part to address this, the L0pht evolved into a part of the security consulting firm @Stake (later bought by Symantec).

Much of Veracode’s software was written by Mr. Rioux, a prolific programmer who says he writes code to relax. (While working on SecurityReview, he wrote a version of the computer game Quake 3: Arena that would run on hand-held computers using Microsoft’s Windows Mobile operating system — no easy feat, since the chips in such hand-helds don’t include the operations typically needed to run high-level computer graphics.)

Mr. Rioux’s automatic hacking tool grew out of more than a decade of finding software vulnerabilities, and noticing that programmers make the same mistakes over and over again, he says. That led Veracode to develop a patented technique for dealing with these predictable problems. Companies pay for the service by megabytes of code tested, which Veracode says will make it economical for companies to use.

Tools like Veracode’s are useful because companies would otherwise have to hire security consultants to hack into their systems, a process called penetration testing. This is expensive and limited in its impact — most companies can afford to hire such consultants only for a week or two, and the next time a business updates its software, it needs another test.

The company has already signed its first customers, says Matt Moynahan, Veracode’s chief executive. He says they’re attracted to the service partly because it includes a security rating system to assess the risks that software presents to operations.

Veracode isn’t the first company to try to automate elements of hacking. Companies like Fortify, Coverity and Watchfire offer automated tools to help companies test aspects of their software, as does Microsoft. But Veracode is the first to offer a service that tests binary code, produced after a program’s source code has been put through a compiler and converted into the 0’s and 1’s needed to make it work.

Joseph Feiman, an analyst at the Gartner Group, the market research firm, says a service to test binary code is a breakthrough because the Web 2.0 phenomenon is built on the idea of companies sharing their applications with partners, suppliers and customers, adding new security risks with every connection.

Veracode lets companies test much of that code, though it cannot test scripting tools, particularly important in Web development. It also needs humans to check on false positives and negatives. “We can’t say we’re selling a silver bullet,” Mr. Wysopal says.

Business executives may be forgiven for wondering why they’ve spent billions of dollars on firewalls, antivirus software and other security tools, only to find that they need to spend more money.

Simeon Simeonov, a venture capitalist whose firm joined with two others to invest $19 million in Veracode, says that what companies have now is a castle and moat, “but those aren’t going to protect you from the assassin who sneaks in on market day.”

IT is also important to point out that security develops over time. Federal law did not mandate seat belts in cars until 1968, notes Brian Chess, a former hardware engineer who is now the chief scientist at Fortify, which offers a tool to test source code. He says companies like his are a sign that the software industry is maturing.

Michael Howard, a senior security program manager at Microsoft and the author of six books on software security, says he thinks that software can’t be compared to traditional engineering. “Would a car survive attacks every 15 minutes from anywhere in the world?” he asked. “I would say no.”

Microsoft, which as the world’s biggest software company is also the world’s biggest hacker target, stepped up efforts five years ago, when Bill Gates, its chairman and then the chief executive, wrote one of his fabled memos demanding that the company improve the security of its products.

Mr. Howard has been intimately involved in that effort, and says that it is paying off. For instance, the latest version of Microsoft’s Internet Information Server has had one-third of the vulnerabilities discovered in its predecessor.

Microsoft has also developed what it calls the Security Development Lifecycle, which mandates how to create a secure software development culture. Microsoft takes security seriously enough to share these even with rivals like Adobe. Even longtime critics of Microsoft say the company has made progress.

Mr. Howard says that more improvements will always be needed because data thieves will always find new ways to get into systems (some of which, like sweet-talking employees out of passwords, can foil the best software). It is, he says, part of the cost of doing business in the digital age.

50% Good News Is the Bad News in Russian Radio

The Russian government is expanding its control over media companies and demanding more upbeat news.
Andrew E. Kramer

At their first meeting with journalists since taking over Russia’s largest independent radio news network, the managers had startling news of their own: from now on, they said, at least 50 percent of the reports about Russia must be “positive.”

In addition, opposition leaders could not be mentioned on the air and the United States was to be portrayed as an enemy, journalists employed by the network, Russian News Service, say they were told by the new managers, who are allies of the Kremlin.

How would they know what constituted positive news?

“When we talk of death, violence or poverty, for example, this is not positive,” said one editor at the station who did not want to be identified for fear of retribution. “If the stock market is up, that is positive. The weather can also be positive.”

In a darkening media landscape, radio news had been a rare bright spot. Now, the implementation of the “50 percent positive” rule at the Russian News Service leaves an increasingly small number of news outlets that are not managed by the Kremlin, directly or through the state national gas company, Gazprom, a major owner of media assets.

The three national television networks are already state controlled, though small-circulation newspapers generally remain independent.

This month alone, a bank loyal to President Vladimir V. Putin tightened its control of an independent television station, Parliament passed a measure banning “extremism” in politics and prosecutors have gone after individuals who post critical comments on Web chat rooms.

Parliament is also considering extending state control to Internet sites that report news, reflecting the growing importance of Web news as the country becomes more affluent and growing numbers of middle-class Russians acquire computers.

On Tuesday, the police raided the Educated Media Foundation, a nongovernmental group sponsored by United States and European donors that helps foster an independent news media. The police carried away documents and computers that were used as servers for the Web sites of similar groups. That brought down a Web site run by the Glasnost Defense Foundation, a media rights group, which published bulletins on violations of press freedoms.

“Russia is dropping off the list of countries that respect press freedoms,” said Boris Timoshenko, a spokesman for the foundation. “We have propaganda, not information.”

With this new campaign, seemingly aimed at tying up the loose ends before a parliamentary election in the fall that is being carefully stage-managed by the Kremlin, censorship rules in Russia have reached their most restrictive since the breakup of the Soviet Union, media watchdog groups say.

“This is not the U.S.S.R., when every print or broadcasting outlet was preliminarily censored,” Masha Lipman, a researcher at the Carnegie Moscow Center, said in a telephone interview.

Instead, the tactic has been to impose state ownership on media companies and replace editors with those who are supporters of Mr. Putin — or offer a generally more upbeat report on developments in Russia these days.

The new censorship rules are often passed in vaguely worded measures and decrees that are ostensibly intended to protect the public.

Late last year, for example, the prosecutor general and the interior minister appeared before Parliament to ask deputies to draft legislation banning the distribution on the Web of “extremist” content — a catch phrase, critics say, for information about opponents of Mr. Putin.

On Friday, the Federal Security Service, a successor agency to the K.G.B., questioned Garry Kasparov, the former chess champion and opposition politician, for four hours regarding an interview he had given on the Echo of Moscow radio station. Prosecutors have accused Mr. Kasparov of expressing extremist views.

Parliament on Wednesday passed a law allowing for prison sentences of as long as three years for “vandalism” motivated by politics or ideology. Once again, vandalism is interpreted broadly, human rights groups say, including acts of civil disobedience. In a test case, Moscow prosecutors are pursuing a criminal case against a political advocate accused of posting critical remarks about a member of Parliament on a Web site, the newspaper Kommersant reported Friday.

State television news, meanwhile, typically offers only bland fare of official meetings. Last weekend, the state channels mostly ignored the violent dispersal of opposition protests in Moscow and St. Petersburg.

Rossiya TV, for example, led its newscast last Saturday with Mr. Putin attending a martial arts competition, with the Belgian actor Jean-Claude Van Damme as his guest. On the streets of the capital that day, 54 people were beaten badly enough by the police that they sought medical care, Human Rights Watch said.

Rossiya and Channel One are owned by the state, while NTV was taken from a Kremlin critic in 2001 and now belongs to Gazprom. Last week, a St. Petersburg bank with ties to Mr. Putin increased its ownership stake in REN-TV, a channel that sometimes broadcasts critical reports, raising questions about that outlet’s continued independence.

The Russian News Service is owned by businesses loyal to the Kremlin, including Lukoil, though its exact ownership structure is not public. The owners had not meddled in editorial matters before, said Mikhail G. Baklanov, the former news editor, in a telephone interview.

The service provides news updates for a network of music-formatted radio stations, called Russian Radio, with seven million listeners, according to TNS Gallup, a ratings company.

Two weeks ago, the shareholders asked for the resignation of Mr. Baklanov. They appointed two new managers, Aleksandr Y. Shkolnik, director of children’s programming on state-owned Channel One, and Svevolod V. Neroznak, an announcer on Channel One. Both retained their positions at state television.

Mr. Shkolnik articulated the rule that 50 percent of the news must be positive, regardless of what cataclysm might befall Russia on any given day, according to the editor who was present at the April 10 meeting.

When in doubt about the positive or negative quality of a development, the editor said, “we should ask the new leadership.”

“We are having trouble with the positive part, believe me,” the editor said.

Mr. Shkolnik did not respond to a request for an interview. In an interview with Kommersant, he denied an on-air ban of opposition figures. He said Mr. Kasparov might be interviewed, but only if he agreed to refrain from extremist statements.

The editor at the news service said that the change had been explained as an effort to attract a larger, younger audience, but that many editorial employees had interpreted it as a tightening of political control ahead of the elections.

The station’s news report on Thursday noted the 75th anniversary of the opening of the Moscow metro. It closed with an upbeat item on how Russian trains are introducing a six-person sleeping compartment, instead of the usual four.

Already, listeners are grumbling about the “positive news” policy.

“I want fresh morning broadcasts and not to fall asleep,” one listener, who signed a posting on the station’s Web site as Sergei from Vladivostok, complained. “Maybe you’ve tortured RNS’s audience enough? There are just a few of us left. Down with the boring nonintellectual broadcasts!”

The change leaves Echo of Moscow, an irreverent and edgy news station that often provides a forum for opposition voices, as the only independent radio news outlet in Russia with a national reach.

And what does Aleksei Venediktov, the editor in chief of Echo of Moscow, think of the latest news from Russia?

“For Echo of Moscow, this is positive news,” Mr. Venediktov said. “We are a monopoly now. From the point of view of the country, it is negative news.”

In Search of the Man Who May Have Created Jazz
Michael Cieply

New Orleans

NO one is really sure what this city’s first “cornet king,” Charles (Buddy) Bolden, sounded like 100 years ago, much less what made him tick. The lore says a single wax recording of Bolden’s namesake ensemble was demolished with the old shed in which it was stored in the early 1960s. What is probably the most reliable rendering of his trademark tune, “Buddy Bolden’s Blues,” came from Jelly Roll Morton, who had heard it performed and put it on a record years after the master’s death. But even the song’s own lyrics warn against trusting too much. “I thought I heard Buddy Bolden say,” runs the remarkably tentative opening line.

Yet this elusive character, who some aficionados say invented jazz before lapsing into ultimately fatal insanity before the age of 30, has been coming into focus in recent weeks as a troupe of seasoned filmmakers and impassioned amateurs struggle to capture Bolden and his world in not one but two, related, movies.

Eccentric in concept, ambitious in scope and not cheap — backers put the cost at more than $10 million — the twin pictures will probably stretch the limit of what independent film can do by the time they are seen on festival or commercial screens next year.

Dan Pritzker — a billionaire’s son best known as founder of and guitarist for the off-center soul-rock band Sonia Dada, and an important investor in the project as well as its director — has never made a movie. Yet that neophyte status has not kept him from attracting an impressive group of actors and behind-the- camera talent, including members of the Marsalis clan, to tell the story of a man Pritzker likens to “a shaman who flipped on the lights.”

The first picture, currently titled “Bolden,” is a musical biography with Anthony Mackie (“We Are Marshall”) in the lead role and Wendell Pierce (“The Wire”) and Jackie Earle Haley (an Oscar nominee this year for “Little Children”) among the supporting cast. The second is an hourlong silent film called “The Great Observer,” in which a young boy named Louis, recalling Bolden’s more celebrated successor Louis Armstrong, dreams of playing the horn while becoming entangled with the denizens of New Orleans’s red-light district, played by a company of ballerinas.

The films, which have no distributor yet, are meant to make their debuts in tandem. If all goes according to Mr. Pritzker’s plan, the second will play over a live performance by Wynton Marsalis, who is executive producer of the movies and has written original music that is meant to evoke the man Armstrong, Morton, Kid Ory, Sidney Bechet and other early jazzmen described as both influence and shadowy myth.

“There’s a fine line between guts and stupidity,” Mr. Pritzker said of his project last month. At the time, he was simmering in the spring heat with 100 mostly local players on a shoot that will end on locations and sets in Wilmington, N.C. The day’s work took the group to the Carrollton cemetery in an Uptown neighborhood, where a row of small frame houses had been painted blue-gray and modestly changed to stand in for the city of Bolden’s late-19th-century youth.

“This is a city that lives its history but doesn’t always know it,” explained Mr. Mackie, 28, who grew up here before leaving to attend arts school in North Carolina and then the Juilliard School. In character as Buddy Bolden, the actor wore a heavy blue band uniform with red piping and spent much of the day sweating through a scene in which notes from his horn jump the expected musical tracks at the end of a funeral, triggering a boisterous exit parade.

In and out of the clouds, the sun has only slightly annoyed the director of photography, Vilmos Zsigmond, a film veteran (“The Black Dahlia,” “The Witches of Eastwick”) who suggested that weathermen should be as competent to predict cloudy and bright as cinematographers are to deal with uncertain light. As things settled on the bright side, Mr. Pritzker mulled a replay of the funeral parade on the video monitor, then set up another take, this time with Mr. Marsalis’s music blaring from a loudspeaker. Arms started swinging. Handkerchiefs waved. Sun umbrellas pumped in time as locals picked up the Bolden spirit.

“If this music doesn’t make you move around, something’s wrong,” said Mr. Pritzker, 47, speaking later over lunch in his cramped trailer. With long, dark, gray-flecked hair, he wore jeans and green clogs and showed obvious discomfort only when the subject turned to the settling of a family dispute over the Pritzker financial empire, himself among the contentious heirs. “We’re all done with that; relationships are all back together,” Mr. Pritzker said of the wrangle, which had been simmering even before his father, Jay, died in 1999. Among other things, its resolution left Dan free (and with enough money) to pursue a notion that had dogged him since 1995, when a radio executive in Boulder, Colo., happened to ask if he had ever heard about Buddy Bolden and the birth of jazz.

“That he impacted my life so deeply and I didn’t know who he was, that was unbelievable to me,” said Mr. Pritzker, a professional musician who considers himself a connoisseur of American music.

He was to find that hard facts about Bolden are in short supply. That he was born to a working-class family in 1877 is firmly established. By the testimony of others who played with or around him, Bolden was among the first to break through accepted musical forms, pushing his group into the raucous improvisational style that would become known as jazz. In the first decade of the 20th century, he ruled the musical roost in New Orleans. By 1907, however, dementia, probably induced or assisted by alcohol, left him unable to function. That year he was committed to an insane asylum in Jackson, La., where he played his cornet only rarely with ensembles made up of patients, and where he remained until his death in 1931.

Lacking the factual base for conventional biography on the order of “Ray,” about Ray Charles, or “Walk the Line,” about Johnny Cash, Mr. Pritzker and his collaborators — including the writers Derick and Steven Martini (who have written for the television series “South Beach”) — have chosen to develop the myth. Their telling imagines Bolden, in the last year of his life, hearing a radio broadcast in which Armstrong, who became the public face of New Orleans jazz, paid tribute to the music’s supposed birth with Bolden.

That vision, in fact, may be only slightly exaggerated. “If you look at oral histories from the musicians, they all basically talk about Bolden when they talk about where jazz came from,” said Bruce Raeburn, curator of the Hogan Jazz Archive at Tulane University. According to Mr. Raeburn, those who heard Bolden agreed, first, that he was loud, and, second, that his music opened the door to improvisation. “His combination of charisma and playing style is what put it over,” he said.

(Donald M. Marquis, whose “In Search of Buddy Bolden: First Man of Jazz” was first published in 1978, remained cautious enough about claims that Bolden invented jazz to include in a 2005 edition an epilogue noting that his text made no such assertion, and that the book’s title had not been his preferred choice.)

More surprising than Mr. Pritzker’s quest is its contagious quality. The New Orleans-born Mr. Marsalis became involved after a query from Mr. Pritzker’s producer, Jonathan Cornick, a production veteran whose credits range from studio films like “Super Mario Brothers” to independent features like David Mamet’s “State and Main.” Both Ellis Marsalis, the family patriarch, and Delfeayo, Wynton’s brother, have also contributed to the film.

The Marsalis presence may eventually bestow event status on the relatively small films if, as Mr. Pritzker envisions, they play at a major festival or at Lincoln Center, with Wynton Marsalis, artistic director of the center’s jazz program, leading a live musical performance in time with the silent picture. Mr. Marsalis said that such a performance was possible but that he had no firm plan at this point.

Mr. Pritzker said that idea was inspired about seven years ago by a similar show, during which a symphony in Chicago performed behind Charlie Chaplin’s “City Lights.” The experience, he said, was “jaw-dropping.” Mr. Pierce, who plays an important role as a music and events promoter in the movie, has a more than professional connection to the project, as a longtime friend of the Marsalis family and an alumnus of the New Orleans Center for Creative Arts, which has been the spawning ground for local performers, including Mr. Mackie.

“We live culture,” said Mr. Pierce, one of several Louisiana natives who talked of the attempt to recapture Bolden with near missionary fervor. Speaking by phone from Baltimore, where he is in production on the HBO series “The Wire,” he said he found it exhilarating to plumb his hometown’s musical heritage “at a time when we’re kind of questioning American aesthetic values.”

Extending that enthusiasm to a film audience that has never really warmed to jazz biography (movies like Clint Eastwood’s “Bird” haven’t performed that well at the box office) will be tough. Yet Wynton Marsalis is hopeful. “The world is always ready for everything,” he said. “All you have to do is play music with passion and feeling, and people will connect.”

For Mr. Pritzker, perhaps the greater risk lies in going public with a figure many aficionados may have preferred as a more private image. Mr. Marsalis, for instance, has expressed reservations, the director said, about his tendency to lift the street player Bolden to the realm of the mythic, ballerinas and all.

“I don’t want to demystify him,” Mr. Pritzker said. “I think it’s where it should be.”

The Best and Worst Internet Laws
Eric Goldman

Over the past dozen years, the lure of regulating the Internet has proven irresistible to legislators. For example, in the 109th Congress, almost 1,100 introduced bills referenced the word Internet, and hundreds of Internet laws have been passed by Congress and the states. This legislative activity is now large enough to identify some winners and losers. In the spirit of good fun, Eric Goldman offers an opinionated list of personal votes for the best and worst Internet statutes in the United States.

Over the past dozen years, the lure of regulating the Internet has proven irresistible to legislators. For example, in the 109th Congress, almost 1,100 introduced bills referenced the word "Internet." Although this legislative activity doesn’t always come to fruition, hundreds of Internet laws have been passed by Congress and the states. This body of work is now large enough that we can identify some winners and losers. So in the spirit of good fun, I offer an opinionated list of my personal votes for the best and worst Internet statutes in the United States.

Best Internet Laws

With my libertarian leanings, it should not be surprising that my list of good Internet laws is both brief and skewed toward laws that minimize the scope of Internet regulation.

#2: Internet Tax Freedom Act

Many people mistakenly think that this law eliminated sales tax for purchases over the Internet. It didn’t (if you don’t pay sales tax, you owe use taxes on those purchases). Instead, the law placed a temporary moratorium on states enacting Internet access taxes or e-commerce–specific taxes. By freezing new taxes, the law forestalled a tax frenzy during the dot-com boom. The current moratorium expires in November, but Congress is proposing to extend the law permanently (see the Permanent Internet Tax Freedom Act of 2007: S. 156 & H.R. 743). To which I say amen!

#1: 47 USC 230

This law was enacted in 1996 (as part of the Communications Decency Act, discussed below) during the heyday of the cyberspace exceptionalism movement—about the same time as Barlow’s Declaration of Independence and Johnson/Post’s Internet self-governance article. Indeed, this law is one of the most conspicuous examples of how a legislative body has set different rules for physical space and cyberspace. In this case, the law provides websites and other intermediaries a near-absolute immunization from liability for their users’ content—even if offline publishers would be liable for publishing the exact same user content in dead trees.

It’s hard to overstate the importance of this law to the Internet’s evolution. Without this law, all Internet content probably would be subject to a notice-and-takedown regime like we have for copyright law (see discussion about the DMCA Online Safe Harbors below). If websites had to remove user content upon notice to avoid liability, they would act conservatively, quickly pulling down complained-about content without much fuss. So, any company unhappy with negative consumer comments could simply contact the web host, claim that the comments were defamatory (making the web host potentially liable for the content), and expect the web host to scramble to take down the user’s comment.

But in this takedown melee, only negative remarks would be targeted (there would be no legal grounds—or reason—to target positive comments). Thus, notice-and-takedown rules would result in "lopsided" databases in which only positive opinions/commentary would remain, but many negative comments could be quickly excised. This would ruin the capability of the consumer opinion sites (for example, eBay’s feedback forum and Amazon product reviews) to hold people and companies accountable for their choices. Indeed, by undermining the credibility of Internet content generally, a notice-and-takedown scheme could diminish the Internet’s vitality as a mainstream information resource.

47 USC 230 eliminates the notice-and-takedown option for people and companies trying to escape accountability. As a result, 47 USC 230 is a big part of the reason why the Internet has been such a massive success.
Effective but Questionable Internet Laws

Two laws are noteworthy for substantially accomplishing their intended goals, even though I can’t classify them as "good" because of their deficient policy rationales.

#2: No Electronic Theft Act (NET Act)

In 1997, Congress changed the basic paradigm for criminal copyright infringement. Previously, the law required that defendants had to infringe for the money. The NET Act expanded the scope of criminal law to cover both commercial and non-commercial infringers.

Specifically, the NET Act targeted warez traders, a group of hobbyist infringers who aggregate and disseminate copyrighted works as trophies—by finding and publicly presenting a hard-to-get copyrighted work, the warez trader demonstrates his/her prowess as a trader and earns recognition from the community. Warez traders generally subscribe to the "information wants to be free" philosophy, so they never exchange copyrighted works for the money, but their trading can have adverse consequences for copyright owners.

There are many reasons why the NET Act is lousy policy, most importantly because criminal sanctions do not deter warez traders. Yet, it has given the Department of Justice (DOJ) an effective tool to nail warez traders, and a couple of hundred warez traders have been busted using the law. Removing warez traders from the Net, one by one, is a crude but ultimately effective method for curtailing warez trading.

#1: Anti-Cybersquatting Consumer Protection Act (ACPA)

The 1990s saw a frenzy of domain name registrations, often involving the registration of domain names containing well-known trademarks by someone other than the trademark owner (a process called cybersquatting). Courts struggled to apply trademark law to this behavior, so trademark owners appealed to Congress for help. Congress initially hoped that the Internet Corporation for Assigned Names and Numbers (ICANN) would promulgate its own anti-cybersquatting administrative regulations (which ultimately became the Uniform Domain-Name Dispute-Resolution Policy [UDRP]). But ICANN took too long, and an impatient Congress enacted the ACPA.

The ACPA targeted cybersquatting, and in that respect the law has worked well. The classic 1990s cybersquatting "land-grab" registrations of [trademarkowner].[tld] have effectively dried up, and the few cases in which a true cybersquatter has defended an ACPA claim in court generally have resulted in resounding victories for the trademark owner.

A silver lining of the ACPA: It contains an immunization of domain name registrars and registries that completely eliminated them as the targets of trademark owners. Prior to ACPA, domain name registrars (especially Network Solutions, the monopoly .com registrar for most of that time) had been sued repeatedly. Now, plaintiffs don’t even think about it.

However, the ACPA isn’t all good news. From a defense perspective, the ACPA has emerged as a tool to attack gripers and other critics. From a trademark owner’s perspective, the ACPA hasn’t curbed domain name parking, domain tasting and other AdSense-fueled sites using trademarks or typographical versions of them. So no one is really happy with the law. Nevertheless, as a point solution to the cybersquatting problem, I think ACPA is fairly characterized as a solid success.

Worst Internet Laws

I want a little credit for finding four laws that I could say something good about. It wasn’t easy. In contrast, the list of bad laws is much longer, so I limited myself to 10.

What makes a law "bad?" Unfortunately, there are many routes to ignominy, and mere legislative cluelessness isn’t sufficient. Some common themes: poor/ambiguous drafting, unintended consequences, justification bait-and-switch (publicly declaring that the law was intended to accomplish a goal it was never designed to do), and attempts to legislatively manufacture markets or change consumer behavior.

The dishonor roll:

#10: E-Sign

E-Sign generally says that online contracts are not denied enforcement simply because they are in electronic form rather than on paper. Superficially, this sounds positive because it stops courts from underenforcing electronic contracts or overreacting to new communication technologies. The problem? This law was unnecessary. Although there was a little concern that some states would enact a non-standard version of the law, by the time that Congress passed E-Sign, there was a lot of momentum toward adopting the Uniform Electronic Transactions Act (UETA), and a lot of states had already implemented UETA. Worse, E-Sign has a partial preemption clause that makes it difficult/impossible to figure out which state laws survived it. So E-Sign is a prime example of how Congress cannot resist the lure of Internet regulation—even if it adds no value (or even subtracts value) in the process.

#9: DMCA Online Safe Harbors

Another law that looks good on the surface, this law purports to provide safe harbors to protect online intermediaries from copyright infringement caused by other people. However, this law has at least two major flaws. First, it sets up a notice-and-takedown procedure that has led to significant abuse, such as content owners effectively "spamming" online service providers with poorly researched junk notices that impose significant investigatory costs on the provider-recipients.

Second, and perhaps more importantly, the law governs only late 1990s technologies; it doesn’t contemplate P2P file sharing and other decentralized forms of communications. This technological dependency makes the safe harbor increasingly irrelevant as technology evolves. As a stark example, consider that the online safe harbors didn’t get mentioned—not once!—in the most important online secondary infringement case to date: the Grokster Supreme Court opinion.

#8: Unlawful Internet Gambling Enforcement Act of 2006 (see the end of this file)

As I have said elsewhere, this law is "a flagship example of how special interest lobbying combined with legislative mumbling can produce an unreadable mess." First, the law is written in unintelligible Congress-ese. Second, the law is pockmarked with special interest exceptions, clearly showing who has the best lobbyists. Third, and most importantly, Congress did not specify (in this law or elsewhere) what constitutes illegal Internet gambling, yet the law requires third-party money sources to block the flow of money to illegal gambling operations. Thus, just like Kafka might write it, Congress deputizes private actors to block illegal activity without deciding for itself what constitutes illegal activity. As a result, banks and other money sources probably will curtail lots of legitimate activity to be on the safe side.

#7: Digital Millennium Copyright Act (DMCA) Anti-Circumvention

There are lots of reasons not to like the DMCA anti-circumvention law. Most obviously, the law targets "bad" technology rather than bad behavior—a regulatory model that usually fails when technological innovation bypasses such restrictions; or worse, the restrictions inhibit the development of socially beneficial technology.

However, the anti-circumvention laws make this list principally because of their unintended consequences. The law was designed to bolster content protection technology: the purported justification was that content owners wouldn’t feel comfortable putting content online without content protection measures, and this law restricts the capability to bypass those measures.

As it turns out, the hottest area of anti-circumvention litigation has nothing to do with such content protection schemes, but instead involves companies using the DMCA as an anti-competition law. Two flagship examples—Chamberlain, involving the sale of compatible after-market universal garage door openers (a case the EFF calls "mind-bogglingly absurd") and Lexmark, involving refilled printer cartridges—ultimately reached pro-competitive outcomes, but only after significant litigation and some disconcerting early rulings. Even with these rulings, companies now routinely consider anti-circumvention claims as part of a general anti-competitor campaign (for a very recent example, see here). As a result, the law has increased the cost of doing business and given plaintiffs another tool to try to restrict legitimate competition, while doing almost nothing to advance its principal goal of increasing protection for content owners.

#6: Electronic Communications Privacy Act

This law was written in 1986 (amending earlier versions), back when the Internet was an obscure academic network. Although the law wasn’t written with the Internet in mind, it has the heroic responsibility of governing a huge swath of private Internet communications, including email, private chat, VOIP, and others. Even if the law were well-drafted, applying a pre-Internet law to these communications would create plenty of ambiguity and friction. Unfortunately, this is not a well-drafted law; in my opinion, this law is one of the most poorly drafted statutes ever. The result is a tangled convoluted hairball that no one (even privacy experts) can understand or apply.

#5: Utah Digital Signatures Act

In 1995, there was some concern that the lack of Internet authentication would inhibit the development of e-commerce. As a result, VeriSign (and others) advocated that everyone on the Internet—both users and websites—should have digital certificates to validate their identity (the equivalent of an Internet driver’s license) so that websites and users each could figure out who they were dealing with. However, VeriSign and others expressed concern that a digital certificate issuer would face significant liability if the authenticated information was wrong. Thus, the argument went, if only digital certificate vendors could get some liability protection, digital certificate vendors would provide the necessary authentication that would allow e-commerce to explode.

In response to these concerns, Utah enacted the Digital Signatures Act to regulate the process of granting accurate certificates and limit the liability of digital certificate vendors. Utah hoped the law would encourage digital certificate vendors to relocate to Utah to take advantage of its friendly legal climate, making Utah a leader in e-commerce.

As it turns out, digital certificates weren’t needed to catalyze e-commerce, nor did the market materialize for digital certificates in the form contemplated by the statute (as a PKI-based system). As a result, this law was a complete failure, and no companies ever complied with the statute’s formalities. Indeed, the law proved to be so irrelevant that Utah has taken the highly unusual step of repealing the law. At least it owned up to its mistake (this time).

#4: Anti-Kid Spam Laws in Utah and Michigan

Nothing fires up the legislative machine like trying to protect kids from Internet dangers. In this case, Utah and Michigan created "do-not-email" registries, similar to the national Do-Not-Call registries, for the registration of kids’ email addresses. Porn spammers are supposed to check these databases and eliminate any registered kids’ addresses from their porn spam distributions.

While do-not-contact registries are generally popular, I’m in the minority of people of who think they are suboptimal policy (I explain my thinking, by deconstructing the federal Do-Not-Call registry here). In these cases, the do-not-email registries claim to be protecting kids, but they actually don’t try to authenticate registrants’ ages—making them a generic do-not-email registry, something even the FTC doesn’t favor. Most importantly, assuming that the database actually contains kids’ email addresses, it becomes a juicy target for criminal hackers, pedophiles, and other bad actors. Based on this concern, many privacy advocates, including the FTC, have advocated against kid-specific do-not-email registries.

#3: Dot Kids Implementation and Efficiency Act of 2002

As we saw with the Utah Digital Signatures Act, legislators can’t stimulate market demand simply by legislating the market into existence. In my opinion, no legislative act better illustrates this principle than the Dot Kids Implementation and Efficiency Act of 2002. In the name of providing a safe online haven for kids, Congress co-opted the .kids.us domain and decreed that only kid-safe content could reside there. In theory, parents would feel safe letting their kids loose there, and content publishers would have a good place to reach kids. Ultimately, Internet filters could simply enable .kids.us websites and shut off the rest of the Internet to kids.

The problem? Not many content publishers saw the value of creating kid-safe websites and housing them under the restrictive rules of the law. As a result, .kids.us is a virtual wasteland, housing fewer than 20 websites—almost all of which have less-than-compelling content. (You mean to tell me you’ve never been there? Check it out yourself.) Not exactly the most enticing destination for Junior. So .kids.us is a ghost-town-like reminder that legislators should stay out of the business of trying to manufacture markets.

#2: Utah/Alaska Anti-Adware Laws

Have you noticed a trend here? Utah makes my dud-law list three times—a hat trick of legislative incompetence. This is such a remarkable feat that we might consider banning Utah from enacting further Internet regulations until Utah can show that it will use its powers wisely.

This law makes my list because of the deceptive rationales used to justify it. Touted as an "anti-spyware," "consumer-protection" law, it was neither. The law targeted only adware, not spyware, and it gave enforcement rights to trademark owners, not consumers. As a result, the law gave trademark owners the power to take software out of consumers’ hands—even if the consumers actually wanted the technology. Further, by allowing trademark owners to attack competitors for engaging in comparative advertising, the law tried to inhibit beneficial competition rather than promoting it. Thus, despite its billing, this law was a profoundly regressive anti-consumer law.

Given its deceptive nature and adverse policy effects (which I explain in lengthy detail here), it should not be surprising that the law was quickly enjoined. (Disclosure note: I worked on an amicus brief challenging the law.) Chastened, the act’s sponsor subsequently amended the law to make it effectively irrelevant.

However, before Utah amended its law, Alaska implemented its own bastardization of Utah’s initial law. Among the Alaska law’s defects, it expects adware vendors to pop up a notice to potential downloaders, asking them for their geography. With this information, in theory, the vendor can avoid downloading the regulated software to Alaska residents. In other words, in an effort to fight unwanted pop-ups, the Alaska law mandates that software vendors deliver lots of unwanted pop-ups to consumers—even when both the vendors and consumers are located outside of Alaska. Classic legislator logic!


While this article was in press, Utah revisited this area yet again. This time, Utah enacted a law that controls all keyword-triggered advertising, raising serious questions about its effect on Google and other search engines. As I explain here, regulating the use of keywords to trigger advertising is profoundly anti-consumer and is very bad policy.]

#1: Communications Decency Act (CDA)

Based on the discussion above, clearly there was plenty of competition for the worst Internet law of all time. However, I found picking a "winner" surprisingly easy. In fact, in my book, it isn’t particularly close.

The Communications Decency Act, passed in 1996, was Congress’ first comprehensive attempt to regulate Internet content. Not surprisingly, Congress made a lot of rookie mistakes. The CDA tried to keep kids away from Internet porn, a reaction to a sensational 1995 article (the "Rimm Report") published in the Georgetown Law Journal that proclaimed that the Internet was awash in porn. But later examinations thoroughly discredited the Rimm Report—meaning that Congress’ efforts/overreactions were based on bad social science.

Worse, Congress mistakenly assumed that non-porn content could be easily segregated from porn. In defense of this assumption, the government’s expert witness proposed a content-tagging system that would enable browsers to wall off porn. But this exposed a deep flaw in the law: the tagging system didn’t exist, browsers weren’t written to honor the tag, and it turns out that requiring publisher self-tagging for all Internet content is burdensome and cost-prohibitive.

Because web and email content publishers had no easy way to comply with the law, the law threatened to restrict virtually every Internet speaker. Further, Congress imposed punitive and draconian sanctions (including stiff jail time) for breaking the law. Congress really, really wanted to wipe porn off the Internet, but it chose a particularly mean-spirited way of doing so.

Not surprisingly, the law fared poorly in the courts. Within a week, it was enjoined. The next year, the U.S. Supreme Court unanimously struck down the law (although two judges would have found a way to preserve some of the law). For its lack of policy support, its sloppy blunderbuss approach to regulating speech, and its flat-out meanness, I hereby crown the CDA the worst Internet law (to date...).

Blu-Ray Burning its High-Def DVD Rival
Thomas K. Arnold

Of the high-definition discs bought by consumers in the first quarter, 70% were in the Blu-ray Disc format and 30% were HD DVD, according to sales figures provided by trade publication Home Media Magazine.

Blu-ray took the lead in February, and its percentage of total sales accelerated to the point where it accounted for nearly three out of every four high-definition discs sold in March.

What's more, when given the choice, consumers are going with Blu-ray. Warner Home Video released "The Departed" the same day, February 13, in both formats. Between then and March 31, consumers bought 53,640 copies of the film on Blu-ray Disc and 31,590 on HD DVD, according to Home Media's market research, based on studio estimates and Nielsen VideoScan point-of-sale data.

Research also shows that eight of the 10 top-selling high-definition titles in the first quarter were on Blu-ray Disc. At the top of the list was "Casino Royale," which sold through to consumers an estimated 59,680 units in the period. The Blu-ray Disc edition of "Departed" finished second, while the HD DVD version of that Oscar-winning film placed third.

From January 1-March 31, consumers bought almost 1.2 million high-definition discs -- 832,530 Blu-ray units and 359,300 HD DVDs -- according to Home Media Magazine. In March, consumers bought 335,980 Blu-ray Discs and 119,570 HD DVDs.

Since the high-def format's inception -- HD DVD launched in April 2006, while Blu-ray got rolling two months later -- more than 2.14 million discs have been purchased by consumers: 1.2 million Blu-ray Discs and about 937,500 HD DVDs.

Observers aren't surprised by the disparity, noting that Blu-ray Disc enjoys the support of five of the six major studios, while HD DVD is supported by three of them. Three studios -- Sony, Disney and Fox -- are exclusively in the Blu-ray camp, as is mini-major Lionsgate. Paramount and Warner support both formats. Universal is the only major studio to release titles only in the HD DVD format, which backers claim is easier and cheaper to produce.

Music Licensing Comes Late to the Mash-Up Party

Record Industry Clamps Down on DJs Who Sample Other Artists on Mash-Up Albums
Michael Smith

Rock 'n' roll has always been about rebellion. And rebellion sells.

The music industry is well aware of this and has struggled mightily to co-opt most of the hot, countercultural phenomena that bubble up. Record labels now leak their own singles into file-sharing networks and systematically sign nominally indie bands to lucrative deals.

So how do musicians rebel when rebellion itself is a commodity?

A DJ known as Girl Talk is showing us how. Girl Talk (real name: Greg Gillis) has put together an album of "mash-ups" that has taken the world by storm.

To make a mash-up, a DJ splices together the vocal a cappella track from one song over the instrumental track from another. Girl Talk mixes audio tracks from dozens of songs, using artists from the Beatles to Beyonce, in the course of a single song. He has remixed songs for Beck and is opening for him at various European concert dates.

"Initially there's a lot of novelty appeal," Gillis said, on his way back home from his day job as an engineer. "I'm not a music theorist, but it's amazing how many songs are in the same key. A Kansas song will fit over a Chris Brown beat, and it'll sound perfect."

"It's a very punk style," Gillis said. "All of a sudden you can be manipulating these celebrities doing whatever you want."

Mash-Ups Go Back Decades

Though mash-ups may be the ultimate media age statement, the concept is nothing new. As Gillis pointed out, mash-ups, sampling and rock itself all occupy different points on the spectrum of musical borrowing.

As early as the '70s, hip-hop DJs like Grandmaster Flash mixed together hip-hop and house tracks in clubs. In the '90s, aided by technology and a burgeoning DJ scene, especially in the United Kingdom, DJs like Coldcut and DJ Shadow brought mash-ups into the future with full-length studio albums involving heavily sampling and remixing. These albums put Diddy's chart-topping, sample-based singles to shame in terms of sheer complexity.

The true watershed moment came in 1999, when an Arizona DJ named Z-Trip put out an album called Uneasy Listening. This album stitched together a symphony that included such random variables as Kansas' "Dust in the Wind," Madonna's "Like a Prayer," the Beatles' "Yesterday" and just about everything in between.

With the licensing rights unclear, this album was not exactly easy listening for industry executives who saw the potential for DJs to make big profits. Broadband Internet access made mash-up distribution a force that the industry needed to reckon with.

A Legal Gray Area

In 2004, Dangermouse, who is one-half of pop supergroup Gnarls Barkley, released the infamous "Grey Album," a mash-up of Jay-Z's gruffly plaintive "Black Album" and the Beatles soul-searching "White Album."

"A lot of college kids could relate because everyone knew that Jay-Z album," Gillis said of the "Grey Album's" popularity. "It's a sign of the times, that you're messing with these untouchable figures, the Beatles, and mixing them with the most pop thing out there, hip-hop."

But record labels urged that Dangermouse was also messing with the law. Capitol Records, the Beatles' label, sent a nasty cease-and-desist letter to Dangermouse, blaming him for the mass distribution that had resulted from his initial, allegedly limited press of several thousand copies for his friends and interested parties.

But, as Dangermouse seemed to recognize, the alleged illegality of his music only helped to garner attention. Fan sites even hosted a "Grey Tuesday," during which they put the whole album online for free download. With his talents on full display, Dangermouse went on to greater and more mainstream success, even appearing on the Grammys earlier this year.

Making the Copyright Laws Work

Mash-ups may soon be domesticated as well. The first fully licensed, industry legit mash-up album came out in the United Kingdom last month.

DJs are realizing that the copyright laws may actually help their cause. Sophisticated mash-ups that rise to the level of genuinely new art may actually fall into an exception to the usual licensing rules.

Under the fair use exception to copyright law, artists can use someone else's work for free if they fully transform it into something new. It's a high bar to meet this standard of "transformative," rather than merely "derivative" use, but it looks like DJs may be willing to try.

Additionally, courts dealing with copyright suits look at the economic effects of copying: If the unlicensed use wouldn't possibly hurt the market for the original, it's more likely to be deemed as fair use.

And this brings us back to Gillis and his DJ alter ego, Girl Talk, who has thus far evaded legal worries. Though he could not discuss the legal nature of his music, Gillis said the entire concept of a mash-up, or sampling, created a lot of gray areas in terms of art and originality.

"A lot of people are starting to integrate samples with original instrumentation. If you take a track and rearrange the notes, is that a mash-up or are you sampling?" he asked. "'Sampling' is such a vague term, and mash-up is an almost an unfortunate term because it confuses the issue."

Even if the perception of illegality and sticking it to industry giants (labels and artists) is an important part of the mash-up appeal, it also appears that Girl Talk has some friends in high places -- like Capitol Hill. His rabid success drove Rep. Mike Doyle, D-Pa., to testify that music licensing in an age of mash-ups has to evolve.

As a DJ, I can tell you that audiences are far from tired of mash-ups and a simpler system of permissions would only help the genre. But I wonder whether mash-ups will lose some of their edge once the law -- and the industry -- let them be.

Bring it on, iTunes: Amazon Readying DRM-Free Music Service
Jacqui Cheng

Amazon could be the next major name to dive into the world of unprotected music sales. Various rumors have been picking up over the past couple of weeks that the online retailer was readying itself to launch an MP3 download store in May, which some see as one of the only retailers that will be able to truly challenge Apple's ubiquitous iTunes Store.
Apple vs. music labels

According to a report in the UK's Times Online, Amazon has approached "all the music majors in the past fortnight" in order to launch its MP3 store in May but may have some trouble meeting its own deadline. Apple plans to start selling DRM-free music from EMI in May through its own music store, which could be the cause for Amazon's rush. The report speculates that if the Internet giant is successful in launching on time, it may initially launch with unprotected music from EMI as well.

Initial reports about Amazon's MP3 store came from Billboard, saying that that Universal Music Group had partnered with Amazon to sell unprotected music, mostly in the form of classical tracks. Such a move would be crucial to DRM-free music sales, as Universal currently holds the top position among all music labels and would send a strong message to labels who are nervous about following EMI's lead. "If Universal goes [DRM-free], then everyone has to follow," an anonymous music executive told Reuters on Friday. However, today's report in the Times debunks the speculation about Universal as "wide off the mark."

Even if Amazon does manage to launch its unprotected music store with Universal's blessing, it will still have to fight to keep up with Apple. Apple has begun contract renegotiations with various major record labels that will extend into the summer, and industry execs told Reuters that Apple now has the upper hand in pressuring them to go DRM-free due to the company's position in the market. While the labels may keep a strict poker face to the public on the topic of DRM, in private, an industry source hinted that following EMI into DRM-free waters is "only a matter of time."

Thompson Calls for FBI Investigation of Kotaku
Apparently we've unhinged Jack.

After Kotaku dissected Jack Thompson's latest appearance on national television trying to connect the tragedy at Virginia Tech with video games, the attorney started emailing us... again.

First Jack tried to tie us to allegations that a 14-year-old made a threat against the University of California Berkley campus by emailing one of the sergeants of the campus police. After speaking with the sergeant actually handling the investigation (not the one Jack emailed) I was told that there was nothing to worry about.

Next Jack asked us to remove our analysis of his misstatements on national television and when we politely declined he faxed the FBI in Colorado:

Dear FBI:

This web site at the below url is targeting me:


I ask that something be done by the FBI to stop this or prosecute it:
Kyle81 says: Actually the VT shootings are now the biggest mass shooting in US history with 31 dead, not just school shooting. Jack should be shot for taking the opportunity to leech off a tragedy to push his own agenda 04/16/07 03:25 PM

Regards, Jack Thompson

I quickly got on the phone with my friends at the agency (they were among the agencies I covered for five years as a police reporter in Denver) and found out that they hadn't yet processed the fax. I was also told that it was unlikely they would handle such an investigation, if one was even needed, but that the local police might look into it.

Finally, I asked about the fed's policy on pursuing charges for filing a false report... but I'll get to that later. Brian Crecente

How I Went Face-to-Screen with Jack Thompson

I first heard the name Jack Thompson just last June. I was driving from New York to Camp Hill, PA, for a signing of The Plot to Save Socrates at a Barnes and Noble, when my cell phone rang. It was CNBC.

I didn't have Bluetooth then, and my cheap handless gadget wasn't working, so I pulled over to the side of the road to talk.

CNBC: Would you be interested in being on CNBC's Squawkbox the next morning to talk about videogames?

Me: Sure. [I'm always interested in being on television.]

CNBC: And you think there's no connection between violence in videogames and violence in the real world? [I talk about the lack of connection between violence in every medium and violence in the real world in most of my books - such as my 1997 The Soft Edge: A Natural History and Future of the Information Revolution.]

Me: Right. No causal connection at all - studies that say they show that violent videogames cause violence in the real world are confusing correlation and causation [I know, a mouthful from the side of the road in Pennsylvania, but it's gotta be said].

CNBC: Excellent. So we'll have a car for you right outside your door at 5:30am tomorrow. Jack Thompson will also be on the show.


At that time, I was far more unhappy about the 5:30am than I was about Jack Thomspon.

But a sleek car's whisking me over the George Washington Bridge to CNBC's studios in New Jersey early the next morning.

I'm kept waiting longer than usual - though, truhtfully, there is no usual for this - and I'm finally ushered into the studio, miked, and smiled at by the host of Squawkbox, Becky Quick.

I won't rehash the actual interview for you - you can see for yourself.

Suffice to say I was repeatedly interrupted by Thompson, whose style is to talk a blue streak, then break in a few seconds after the other guest starts talking, continue to do that, and then complain that you were hogging the conversation when he gets his chance to talk again.

I've run into people like that before. What was in some ways even more irritating was Becky Quick's moderation style - which consisted of letting Thompson talk first, not doing anything to stop Thompson when he was interrupting, and then giving him the last word.

But here's what bothers me most, and what I understand least: why does Thompson with his nonsense keep getting so much air time? True, the American Psychological Association doesn't help, by sometimes speaking loosely of correlation as causation - confusing A (playing violent videogames) happening at the same time as B (violent episodes in real life) with A causing B, when B could have caused A, etc.

And yet, Thompson all too often appears unopposed on television, or in a conversation in which he is given the upper hand by the host.

After Thompson appeared on Chris Matthews' Hardball last week - where Matthews did ask him some tough questions - MSNBC published an editorial that called Thompson out. Joystick is talking about the "Jacklash" - the media finally waking up about Thompson.
But a lot of this could have been avoided, if the media had not been so worried about offending Thompson in the first place. Next time, either don't have him on your air at all, or try the tried-and-true procedure of giving equal time to opposing opinions.

A Difficult Annual Times Meeting for Sulzbergers
Landon Thomas Jr.

The New York Times Company annual shareholder meeting traditionally has been a tame affair, where the Sulzberger family, which owns a controlling interest in the company, applauds the achievements of its journalists and, in turn, basks in the applause of investors.

But times have changed. With the company’s stock performance lagging, along with much of the newspaper industry, the chairman and publisher, Arthur Sulzberger Jr., and his family are bracing for a contentious meeting today.

Last year, dissident investors, led by Hassan Elmasry, a senior portfolio manager at Morgan Stanley Investment Management, withheld 30 percent of their votes for the election of Class A directors, as a sign of their frustration with the company’s dual ownership structure and performance.

This year, the company and its critics have both lobbied hard. According to people who have spoken with Mr. Sulzberger, the family and the company are prepared for the possibility that the vote withheld might exceed 50 percent.

The vote is largely symbolic: under the dual ownership structure, the family owns 89 percent of Class B shares and elects 70 percent of the board, or 9 of 13 directors. But such an outcome could put additional pressure on family members and independent directors to take more aggressive steps in addressing the dissidents’ concerns.

So far none of the nonfamily directors of the Times Company have stepped down since the battle began and they have told Mr. Sulzberger that they have no plans to resign. Still, the uncomfortable glare of public scrutiny upon them is not expected to diminish soon.

Mr. Sulzberger has said repeatedly that the company would not change the longstanding dual class structure that gives the family control, maintaining that it preserves the independence of the newspaper and protects the company in dire economic times.

In a speech prepared for the annual meeting today, Mr. Sulzberger plans to say, “only the trustees of the Ochs/Sulzberger family have the ability to change that and we are unanimous in our commitment to retain it.”

In his first public response to his unhappy investors, Mr. Sulzberger defended the Times Company’s recent investments, including the net $500 million it has spent on its new headquarters as well as his holding of chairman and publisher titles.

He is expected to describe the current industry climate as “the most dramatic transformation in our long and distinguished history,” and acknowledge that despite strong growth in the company’s digital businesses, the print side continues to decline.

He also plans to credit his grandfather, Arthur Hays Sulzberger, for putting a two-class structure in place, “to get us through times like this.” But “all of us — my family and you, our shareholders — have felt the pain of this disruption,” the prepared text states.

Whatever the outcome of the meeting, it is unlikely to appease the critics, led by Mr. Elmasry, whose portfolio includes a 7 percent stake in The Times.

Both Mr. Sulzberger and Mr. Elmasry declined to comment for this article.

Some other large Class A investors — in particular T. Rowe Price, which owns 15 percent, and Private Capital Management, with 9.3 percent — also withheld their votes last year. They have not made their intentions for this year’s meeting clear.

Brian C. Rogers, chairman of T. Rowe Price did not return calls seeking comment. Bruce S. Sherman of Private Capital declined to comment. Howard P. Milstein, the chief executive of Emigrant Bank, bought a 4.3 percent stake in the company; he has told Mr. Sulzberger that he would support him.

Representatives of Mr. Elmasry have said that he would not attend today’s meeting.

The campaign has grown heated, with both sides making their cases to two corporate advisory firms. The results have been mixed: Institutional Shareholder Services issued a report advising investors to withhold their vote, while Proxy Governance said that investors should vote for the Times directors. A third advisory service, Glass-Lewis, which does not meet with investors, has recommended that investors withhold their votes.

Yesterday, Mr. Sulzberger received support when Donald E. Graham, the chairman and chief executive of the Washington Post Company, urged investors to support the Times Company. Writing in the opinion pages of The Wall Street Journal, Mr. Graham argued that an elimination of the two-class structure would result “in a line of buyers eager to purchase the company” and said that a new owner might not maintain the same news standards.

At the heart of the dispute over the capital structure is a more fundamental tension between the interests of the Sulzberger family, which sees itself as the guardian of The Times newspaper, and its institutional investors, who argue that the company’s dual class structure prevents the company from being fully accountable to all shareholders.

“This is a governance issue,” said Charles M. Elson of the University of Delaware. “If you own 100 percent, you do whatever you want. Once you enter the public, your obligations change.”

For advice on its governance practices, the Times Company’s board has hired Martin Lipton, a lawyer with experience in advising directors. For public relations counsel, the board has hired Paul Verbinnen, president of Sard Verbinnen.

Separately, extended family members themselves had a regularly scheduled meeting on Friday at the Times Company’s headquarters, where they met with executives on the news and business sides of The Times. Over the weekend they gathered in a more informal setting at a conference center in Connecticut to discuss family business, where, according to one person present, there was little discussion about the controversy.

“The family’s identity is caught up in being a steward of The New York Times,” said Alex S. Jones, a co-author of “The Trust,” a book on the Ochs-Sulzberger family. “They would not give up that stewardship for any reason that I could imagine.”

The vehicle for this stewardship is a 1997 trust, which controls the majority of the non-traded Class B stock and which includes Mr. Sulzberger, five of his cousins, a fifth-generation family member and Mr. Sulzberger’s brother in law, Eric M. A. Lax. (Four trustees also serve as directors elected by Class B shareholders.)

It is the trust, not the board, that has the power to declassify the shares, and it would take at least a 6-to-2 vote to do that.

In his meeting with the full board in February, Mr. Elmasry made a broad critique of past investments, including the acquisition of About.com, a Web information service that the Times Company bought in 2005 for $410 million, which he deemed “speculative,” and the company’s new headquarters.

Mr. Sulzberger, in his speech, is expected to defend About.com’s expanding margins, saying they increased to 38 percent in 2006 from 27 percent in 2005, and its contributions to the paper’s digital properties.

Mr. Elmasry also asked the board to separate the chairman and publisher titles that Mr. Sulzberger now holds, according to people briefed on the meeting. Mr. Elmasry did not say which job Mr. Sulzberger should give up.

While the board has the power to ask Mr. Sulzberger to step down as chairman, it does not have the authority to appoint the publisher. Throughout the history of The Times, the title of publisher has been held by a family member.

Mr. Sulzberger, according to the prepared text of his speech, is expected to say that his two titles allow him to “balance the financial and journalistic needs of this institution.”

Mr. Elmasry’s complaint stems from a view that, starting in the late 1990s, attempts by management to diversify into areas like cable television took focus away from the newspaper’s core brand.

“The New York Times had some wonderful years financially and also in terms of how the stock market saw the company,” said Andy Brown, a predecessor of Mr. Elmasry at Morgan Stanley’s fund unit who bought the original stake in the Times Company in 1996 and who now runs his own fund company. “You could argue that this was the result of financial discipline, but you could also argue that management was emboldened by this success to make all these acquisitions.”

Other Class A investors have also questioned the board and management. In February, T. Rowe Price had a conference call with all board members, except for Mr. Sulzberger and Janet L. Robinson, the company’s chief executive, who did not attend at T. Rowe Price’s request. Ms. Robinson also met with Mr. Sherman of Private Capital in March.

Analysts also argue that the transition of advertising to the Internet has hurt all publishing companies.

The Times Company has already reacted to a number of the issues that Mr. Elmasry has raised during his campaign. For example, Mr. Sulzberger and Michael Golden, vice chairman and publisher of The International Herald Tribune, have said they will not accept stock-based compensation for 2006 and 2007.

Additionally, the company has agreed to sell its television stations, raised its dividend and formalized a rotation process ensuring that in the coming years Class A shareholders will be able to vote for directors on the compensation, audit and nominating committees. As part of the plan, the eight independent directors who are not part of the family or management will now be subject to shareholder vote at least once every three years.

42% Withhold Votes for Times Co. Directors
Landon Thomas Jr.

Shareholders of The New York Times Company withheld 42 percent of their votes for board members at their meeting today in a symbolic gesture of protest against the company’s investment strategies and governance practices.

The vote, which was led by the company’s largest institutional shareholders, and Morgan Stanley Investment Management in particular, surpassed last year’s tally of 30 percent. It did not, however, exceed a worst-case scenario of 50 percent that the founding Ochs-Sulzberger family and management had been expecting.

Still, given that the family owns close to 20 percent of the Class A shares, the 42 percent figure represented a majority of nonfamily shareholders and signaled that a growing component of the company’s investors are becoming impatient with its management, financial performance and stagnant stock price.

In a statement, the Times Company said today that its directors would continue to serve, the vote notwithstanding.

“We understand shareholder frustration as reflected in today’s vote,” Arthur Sulzberger Jr., chairman and publisher of the Times Company, said in the statement. “At the same time, many shareholders have expressed to us that we are pursuing the key actions needed to improve performance and returns to shareholders.”

Given the building controversy, the meeting, which was held at the New Amsterdam Theater in Times Square, lacked much in the way of fireworks. While several people expressed dissatisfaction with management, the bulk of commentary centered on unrelated issues, such as lawsuits, environmental policies, The Times’s coverage in the Middle East and why there were fewer stock listings in the newspaper’s business section.

In attendance were the 13 board members, top management from the company as well as members of the Ochs-Sulzberger family, including Arthur Ochs Sulzberger, the previous chairman and publisher.

Last year, dissident investors, led by Hassan Elmasry, a senior portfolio manager at Morgan Stanley Investment Management, withheld 30 percent of their votes for the election of Class A directors as a sign of their frustration with the company’s dual ownership structure and performance. Mr. Elmasry did not attend today’s meeting.

This year, the company and its critics had both lobbied hard. The vote was largely symbolic: under the dual ownership structure, the family owns 89 percent of Class B shares and elects 70 percent of the board, or 9 of 13 directors. But it could put additional pressure on family members and independent directors to take more aggressive steps in addressing the dissidents’ concerns.

Mr. Sulzberger has said repeatedly that the company would not change the longstanding dual class structure that gives the family control, maintaining that it preserves the independence of the newspaper and protects the company in dire economic times.

In his speech at the annual meeting today, Mr. Sulzberger said, “Only the trustees of the Ochs-Sulzberger family have the ability to change that, and we are unanimous in our commitment to retain it.”

In his first public response to his unhappy investors, Mr. Sulzberger defended the Times Company’s recent investments, including the net $500 million it has spent on its new headquarters, as well as his holding of chairman and publisher titles.

He described the current industry climate as “the most dramatic transformation in our long and distinguished history,” and acknowledged that despite strong growth in the company’s digital businesses, the print side continued to decline.

He also credited his grandfather, Arthur Hays Sulzberger, for putting a two-class structure in place, “to get us through times like this.” But “all of us — my family and you, our shareholders — have felt the pain of this disruption,” he said.

The campaign over the vote was heated, with both sides making their cases to two corporate advisory firms. The results were mixed: Institutional Shareholder Services issued a report advising investors to withhold their vote, while Proxy Governance said that investors should vote for the directors. A third advisory service, Glass, Lewis, which does not meet with investors, recommended that investors withhold their votes.

In a statement, Mr. Elmasry of the Morgan Stanley fund expressed his continuing displeasure with management at the company. “Today’s withhold vote by Class A shareholders is a clear mandate for meaningful change at The New York Times Company,” he said. Saying he was disappointed that the company had not implemented his recommendations, he said that the higher vote this year is “an emphatic call for accountability.” And he pointed out that more than “50 percent of the nonfamily Class A shareholders are calling on the board to take action.”

On Monday, Mr. Sulzberger received support when Donald E. Graham, the chairman and chief executive of The Washington Post Company, urged investors to back the Times Company. Writing in the opinion pages of The Wall Street Journal, Mr. Graham argued that an elimination of the two-class structure would result “in a line of buyers eager to purchase the company” and said that a new owner might not maintain the same news standards.

At the heart of the dispute over the capital structure is a more fundamental tension between the interests of the Sulzberger family, which sees itself as the guardian of The Times newspaper, and its institutional investors, who argue that the company’s dual class structure prevents the company from being fully accountable to all shareholders.

“This is a governance issue,” said Charles M. Elson, the director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “If you own 100 percent, you do whatever you want. Once you enter the public, your obligations change.”

For advice on its governance practices, the Times Company’s board has hired Martin Lipton, a lawyer with experience in advising directors. For public relations counsel, the board has hired Paul Verbinnen, president of Sard Verbinnen.

Separately, extended family members themselves had a regularly scheduled meeting on Friday at the Times Company’s headquarters, where they met with executives on the news and business sides of The Times. Over the weekend they gathered in a more informal setting at a conference center in Connecticut to discuss family business, where, according to one person present, there was little discussion about the controversy.

“The family’s identity is caught up in being a steward of The New York Times,” said Alex S. Jones, a co-author of “The Trust,” a book on the Ochs-Sulzberger family. “They would not give up that stewardship for any reason that I could imagine.”

The vehicle for this stewardship is a 1997 trust, which controls the majority of the nontraded Class B stock and which includes Mr. Sulzberger, five of his cousins, a fifth-generation family member and Mr. Sulzberger’s brother-in-law, Eric M. A. Lax. (Four trustees also serve as directors elected by Class B shareholders.)

It is the trust, not the board, that has the power to declassify the shares, and it would take at least a 6-to-2 vote to do that.

In his meeting with the full board in February, Mr. Elmasry made a broad critique of past investments, including the acquisition of About.com, a Web information service that the Times Company bought in 2005 for $410 million, which he deemed “speculative,” and the company’s new headquarters.

Mr. Sulzberger, in his speech, defended About.com’s expanding margins, saying they increased to 38 percent in 2006 from 27 percent in 2005, and its contributions to the paper’s digital properties.

Mr. Elmasry also asked the board to separate the chairman and publisher titles that Mr. Sulzberger now holds, according to people briefed on the meeting. Mr. Elmasry did not say which job Mr. Sulzberger should give up.

While the board has the power to ask Mr. Sulzberger to step down as chairman, it does not have the authority to appoint the publisher. Throughout the history of The Times, the title of publisher has been held by a family member.

Mr. Sulzberger said in his speech that his two titles allowed him to “balance the financial and journalistic needs of this institution.”

Mr. Elmasry’s complaint stems from a view that, starting in the late 1990s, attempts by management to diversify into areas like cable television took focus away from the newspaper’s core brand.

“The New York Times had some wonderful years financially and also in terms of how the stock market saw the company,” said Andy Brown, a predecessor of Mr. Elmasry at Morgan Stanley’s fund unit who bought the original stake in the Times Company in 1996 and who now runs his own fund company. “You could argue that this was the result of financial discipline, but you could also argue that management was emboldened by this success to make all these acquisitions.”

Other Class A investors have also questioned the board and management. In February, T. Rowe Price, the largest investor in the Times Company, had a conference call with all board members, except for Mr. Sulzberger and Janet L. Robinson, the company’s chief executive, who did not attend at T. Rowe Price’s request. Ms. Robinson also met with Bruce S. Sherman of Private Capital Management, another large investor, in March.

Analysts also argue that the transition of advertising to the Internet has hurt all publishing companies.

The Times Company has already reacted to a number of the issues that Mr. Elmasry has raised during his campaign. For example, Mr. Sulzberger and Michael Golden, vice chairman and publisher of The International Herald Tribune, have said they would not accept stock-based compensation for 2006 and 2007.

Additionally, the company has agreed to sell its television stations, raised its dividend and formalized a rotation process ensuring that in the coming years Class A shareholders would be able to vote for directors on the compensation, audit and nominating committees. As part of the plan, the eight independent directors who are not part of the family or management will now be subject to shareholder vote at least once every three years.

Billionaires Start $60 Million Schools Effort
David M. Herszenhorn

Eli Broad and Bill Gates, two of the most important philanthropists in American public education, have pumped more than $2 billion into improving schools. But now, dissatisfied with the pace of change, they are joining forces for a $60 million foray into politics in an effort to vault education high onto the agenda of the 2008 presidential race.

Experts on campaign spending said the project would rank as one of the most expensive single-issue initiatives ever in a presidential race, dwarfing, for example, the $22.4 million that the Swift Vets and P.O.W.s for Truth group spent against Senator John Kerry in 2004, and the $7.8 million spent on advocacy that year by AARP, the lobby for older Americans.

Under the slogan “Ed in ’08,” the project, called Strong American Schools, will include television and radio advertising in battleground states, an Internet-driven appeal for volunteers and a national network of operatives in both parties.

“I have reached the conclusion as has the Gates foundation, which has done good things also, that all we’re doing is incremental,” said Mr. Broad, the billionaire who founded SunAmerica Inc. and KB Home and who has long been a prodigious donor to Democrats. “If we really want to get the job done, we have got to wake up the American people that we have got a real problem and we need real reform.”

Mr. Gates, the chairman of Microsoft, responding to questions by e-mail, wrote, “The lack of political and public will is a significant barrier to making dramatic improvements in school and student performance.”

The project will not endorse candidates — indeed, it is illegal to do so as a charitable group — but will instead focus on three main areas: a call for stronger, more consistent curriculum standards nationwide; lengthening the school day and year; and improving teacher quality through merit pay and other measures.

While the effort is shying away from some of the most polarizing topics in education, like vouchers, charter schools and racial integration, there is still room for it to spark vigorous debate. Advocating merit pay to reward high-quality teaching could force Democratic candidates to take a stand typically opposed by the teachers unions who are their strong supporters.

Pushing for stronger, more uniform standards, on the other hand, could force Republican candidates to discuss the potential merits of a national curriculum, a concept advocates for states’ rights deeply oppose and one that President Bush has not embraced.

The initiative will be announced today in South Carolina, a day before the first Democratic debate. Similar publicity is scheduled for the first Republican debate early next month in Simi Valley, Calif.

Mr. Bush made education a major theme in 2000, paving the way for the No Child Left Behind law and its emphasis on testing. In 1992, President Bill Clinton proposed an array of education initiatives. But this year the issue is overshadowed by the war in Iraq, terrorism and health care.

“Right now it’s too low on the list of priorities for all the candidates,” Mr. Broad said, “and our job is to get it up on the list.”

The project’s first print advertisement addresses the national focus head on, showing a student misspelling “A histery of Irak” on a blackboard. “Debating Iraq is tough,” the advertisement says. “Spelling it shouldn’t be. America’s schools are falling behind. It’s a crisis that takes leadership to solve. So to all presidential candidates we say, ‘What’s your plan to fix our schools?’ ”

The effort will be directed by Roy Romer, the former Democratic governor of Colorado and the recent superintendent of schools in Los Angeles, and by Marc Lampkin, a Republican lobbyist and former deputy campaign manager for Mr. Bush. It will be financed by the billionaires’ respective foundations, which they established with their wives, Melinda Gates and Edythe L. Broad. The Bill and Melinda Gates Foundation is far larger, having disbursed $1.8 billion in education grants compared with $250 million by the Broad Foundation.

Mr. Broad has long been a major political donor, primarily to Democrats, and has been particularly well known as a friend and supporter of Bill and Hillary Clinton. He has contributed personally to Mrs. Clinton’s campaign as well as to other Democratic candidates.

Mr. Gates also gives handsomely, though to campaigns in both parties. The two men emphasized that their education advocacy was nonpartisan.

Supporters of the project also include Bob Kerrey, the former Democratic senator from Nebraska; Ken Mehlman, the former Republican Party chairman; and Louis V. Gerstner, the former chief executive of I.B.M. Several of the presidential candidates yesterday applauded the billionaires’ effort, but some bristled at the notion that they were not paying sufficient attention to education.

“I think 70 days into a campaign that has yet to choose any nominees for either party, to make a sweeping kind of analysis that they are not talking about education is probably a little premature,” said Kevin Madden, a spokesman for former Gov. Mitt Romney of Massachusetts, a Republican. “If anybody goes onto the campaign trail with Governor Romney, they’ll recognize that education is an important issue to him and to voters.”

A campaign spokesman for Hillary Clinton said Mrs. Clinton was pleased that the issue would get “much-needed attention.”

Senator Christopher J. Dodd, a Democratic presidential candidate who has proposed legislation calling for tougher and more uniform education standards, issued a statement praising the Strong American Schools effort. “I look forward to including elements of the Gates-Broad initiative in the current dialogue on how to improve our nation’s schools,” Mr. Dodd said.

Bill Hogan, a senior fellow at the Center for Public Integrity and director of the Buying of the President 2008 project, which is scrutinizing the influence of money in the campaign, said the new effort could prove remarkable in its spending level.

“If we are talking about efforts in presidential campaigns to promote discussion or debate of an issue, there has been nothing like this,” Mr. Hogan said. “This would be off the charts.”

'$100 Laptop' to Cost $175
Brian Bergstein

The founder of the ambitious "$100 laptop" project, which plans to give inexpensive computers to schoolchildren in developing countries, revealed Thursday that the machine for now costs $175, and it will be able to run Windows in addition to its homegrown, open-source interface.

Nicholas Negroponte, the former director of the Massachusetts Institute of Technology Media Lab who now heads the nonprofit One Laptop Per Child project, updated analysts and journalists on where the effort stands, saying "we are perhaps at the most critical stage of OLPC's life."

That's partly because at least seven nations have expressed interest in being in the initial wave to buy the little green-and-white "XO" computers - Uruguay, Argentina, Brazil, Pakistan, Thailand, Nigeria and Libya - but it remains unclear which ones will be first to pony up the cash. The project needs orders for 3 million machines so its manufacturing and distribution effort can get rolling.

The ever-optimistic Negroponte didn't sound worried, however: He expects mass production to begin by October, and he said many other countries, including Peru and Russia, have been inquiring about taking part.

The XO machines will be made by Quanta Computer Inc., the world's leading manufacturer of portable computers. Quanta agreed to take a profit of about $3 per machine, less than what it gets from mainstream PC companies, Negroponte said.

Even so, the machine - which boasts extremely low electricity consumption, a pulley for hand-generated power, built-in wireless networking and a screen with indoor and outdoor reading modes - now costs $175. The One Laptop project takes an additional $1 to fund its distribution efforts.

Negroponte's team has always stressed that $100 was a long-term target for the machines, but recently publicized figures had put it in the $150 range. Negroponte says the cost should drop about 25 percent per year as the project unfolds. He added that Citigroup Inc. (C)'s Citibank division has agreed to facilitate a payment system on a pro bono basis; Citibank will float payments to Quanta and other laptop suppliers, and governments will repay the bank.

Even at $175, the computers upend the standard economics in the PC industry. A huge reason has been XO's use of the free, open-source Linux operating system, tweaked for this project with the help of one of its sponsors, Red Hat Inc. (RHT)

The result is that XO's software is highly original, in hopes of making the computer useful as a collaborative tool and intuitive for children who have never before encountered a computer. There are no windows or folders, but rather an interface heavily reliant on pictographic icons.

However, Negroponte disclosed that XO's developers have been working with Microsoft Corp. (MSFT) so a version of Windows can run on the machines as well. It could be the $3 software package that Microsoft announced last week for governments that subsidize student computers. It includes Windows XP Starter Edition and some of Microsoft's "productivity" software.

Word of Microsoft's involvement was somewhat striking given that the software company and its closest corporate partner, Intel Corp. (INTC), have questioned whether the One Laptop Per Child's computers will do much to stimulate educational gains. Bill Gates once denigrated the machine as not being a "decent computer." And Intel is pushing its own inexpensive computer for developing countries, the $400 Classmate PC.

The ever-optimistic Negroponte turned those criticisms around on Thursday, arguing that Microsoft wouldn't have bothered with its $3 international software package and Intel wouldn't be pushing Classmate unless they had something to fear from One Laptop Per Child's innovations.

Whether the XO machines might someday land in U.S. schools has been an open question. Former Massachusetts Gov. Mitt Romney announced at one point that he wanted to buy the machines for students in his state. Some time later, Negroponte said Thursday, One Laptop Per Child decided not to work with American schools because "we've designed something for a totally different situation" - meaning kids in poor countries.

Now, he added, that might change, since 19 state governors have shown interest. One of them was then-Florida Gov. Jeb Bush. When Bush first e-mailed and casually signed "Jeb," Negroponte needed to ask his brother, former national intelligence director John Negroponte, whether the query was legitimate.

Does Moore's Law Help or Hinder the PC Industry?
Bryan Gardiner

Gartner analysts Brian Gammage and Carl Claunch debated Moore's Law on Tuesday, arguing whether the defining rule that governs today's computer industry should be seen as a force for good or evil—or possibly a mixture of both.

Before launching into their talk, the two noted that its original title was "Why Moore's Law is Evil," which while neither admitted as much, would have been an inappropriate appellation seeing as the two analysts really just took turns playing good cop-bad cop for an hour, alternating between the negative and positive implications attributed to the famous law coined by Caltech professor Carver Mead.

One of the things both men did agree on was that Moore's Law is, and has been, an undeniable driving force in the computer industry for close to four decades now. They also agreed that it is plagued by misunderstanding.

"Moore's Law is frequently misquoted, and frequently misrepresented," noted Gammage. While most people believe it means that you double the speed and the power of processors every 18 to 24 months, that notion is in fact wrong, Gammage said. "Moore's Law is all about the density…the density of those transistors, and not what we choose to do with it."

The actual law—which didn't morph into a governing mandate until Mead described it as such—was first summarized by a young Gordon Moore in an issue of Electronics Magazine in 1965, who said:

"The complexity for minimum component costs has increased at a rate of roughly a factor of two per year...Certainly over the short term this rate can be expected to continue, if not to increase. Over the longer term, the rate of increase is a bit more uncertain, although there is no reason to believe it will not remain nearly constant for at least 10 years. That means by 1975, the number of components per integrated circuit for minimum cost will be 65,000. I believe that such a large circuit can be built on a single wafer."

So basically, under Moore's Law the number of transistors in a processor increase geometrically, typically yielding more performance every 18 to 24 months, but not always. Today, there are billions of transistors on a typical chip, and according to Gammage, with this increased density, replacement cycles for computers and servers have also accelerated in step. This also happens to be where many feel that Moore's Law exerts a negative impact on the industry. Continued...
"If you're spending money on those products, you may feel as though you're constrained against your will," Gammage said, "just to keep up, just to make sure that you're capable of supporting the software that's running within your environment."

Indeed, it is this cost burden, this drive to upgrade, that is most often placed on the shoulders of consumers and companies who fall on the receiving end of this perpetual march towards "improvement." As both analysts noted, this results in a tremendous race just to keep up.

"If we don't need extra performance, can we really choose to pay less for less?" Claunch asked rhetorically. Both Gammage and Claunch said that, for computer suppliers, Moore's Law also tends to squeeze prices and margins, forcing them to "sell more just to stand still."

And therein lies the basic conundrum that emerges from Moore's Law, according to Claunch.

"…Every 24 months, you're doubling the number of transistors, doubling the capacity," he said. "But if you think about the process you're going through—they're taking a wafer, they put some devices on it, they cut it up and sell it to you—the cost of doing that is not doubling every 18 to 24 months."

"So, for about the same amount of effort for them, they're getting twice as many components on [the wafer]. Claunch added that: "if we were to make a PC run at the same speed as the original 8086 PCs, they'd probably cost about 10 cents to make. But nobody could afford to be in the business of selling PCs at 10 cents each. So instead, we have to use a different strategy. That different strategy is this: Pump twice as much stuff into the box, and if you do that, you can at least hold your price flat."

The problem is that there are often sustained periods where, despite cramming more transistors onto a chip, no particular incentive—that is no compelling innovation—exists in the industry to prompt people or companies to upgrade their equipment. Such a period took place, according to both analysts, from 2000 to 2004. And yet, the march forward continues with old hardware being quickly phased out in the industry to make ready for the new.

"It's one thing to replace hardware if the new models offer something valuable the old ones do not…otherwise, why not just sweat those assets?" Gammage said.

Aside from its impact on the business of selling PCs, both analysts spoke briefly about some of the arguments for and against the impact of Moore's Law.

On the positive side of things, Gammage noted that Moore's Law can be seen as at least partially responsible for the vast world-wide job creation in the computer industry. He also argued that the law is occasionally responsible for the innovation and agility within that industry, the leaps we've taken with respect to power (i.e., doing the same tasks with less power consumption), and the fact that it tends to level the playing field—in so far as customers all having the same range of choices today.

But with new models emerging every 18 months, Claunch counter argued that Moore's Law could also be seen as responsible for today's sometimes exorbitant premium price tiers, the industry's lack of replacement parts (due to the fact that PCs become obsolete so quickly), e-waste, as well as embedded CO2 from all the computers we throw away.

Operating under the principles of Moore's Law, the industry is also burdened with the perpetual task of driving up demand in order to preserve revenue, or simply break even, Claunch said.

In the end, however, both men concluded that the law just one of the many forces that operate in today's computer market. While both agreed that, to an extent, the industry has found itself stuck in a vicious spiral, that fact cannot and should not be entirely blamed on Moore's Law.

"The PC industry is certainly challenged today," said Gammage. "It's sick; it's experiencing structural torment. Dell of all companies is having to reset expectations, but those problems have to do more with the relative rates of growth, the law of diminishing returns, and a lack of innovation, and much less to do with Moore's Law."

But while the industry as a whole maybe having troubles, manufacturers are still finding new ways to use the increased transistor capacities that come with Moore's Law, both analysts said.

"We have 64-bit, virtualization, better power efficiency, better management, better security, and improved I/O," Gammage said.

Performance per watt is also becoming more important than price performance for many applications, Claunch observed.

In concluding their talk, Gammage and Claunch both outlined some of the pitfalls to avoid when discussing or thinking about Moore's Law.

"Don't think of Moore's Law as simply good or evil," Claunch cautioned the audience, "but rather a mix of both…" He added that to associate the law solely with performance improvements is to not see the whole picture, or even part of it.

"It's about transistor counts," he said, "and it's important to note that those two things aren't always interrelated."

It is also important to recognize that the path from technology innovation to commoditization is very short in today's x86 markets, Gammage said. Both analysts expect Moore's Law to be leveraged for further technology innovation and automation in the coming 10 years. And perhaps more than anything discussed Tuesday morning, both men also made clear there really are two sides, and perhaps even more, to the Moore's Law argument.

Researchers Break Internet Speed Records
Anick Jesdanun

A group of researchers led by the University of Tokyo has broken Internet speed records - twice in two days.

Operators of the high-speed Internet2 network announced Tuesday that the researchers on Dec. 30 sent data at 7.67 gigabits per second, using standard communications protocols. The next day, using modified protocols, the team broke the record again by sending data over the same 20,000-mile path at 9.08 Gbps.

That likely represents the current network's final record because rules require a 10 percent improvement for recognition, a percentage that would bring the next record right at the Internet2's current theoretical limit of 10 Gbps.

However, the Internet2 consortium is planning to build a new network with a capacity of 100 Gbps. With the 10-fold increase, a high-quality version of the movie "The Matrix" could be sent in a few seconds rather than half a minute over the current Internet2 and two days over a typical home broadband line.

Researchers used the newer Internet addressing system, called IPv6, to break the records in December. Data started in Tokyo and went to Chicago, Amsterdam and Seattle before returning to Tokyo. The previous high of 6.96 Gbps was set in November 2005.

Speed records under the older addressing system, IPv4, are in a separate category and stand at 8.8 Gbps, set in February 2006.

The Internet2 is run by a consortium of more than 200 U.S. university. It is currently working to merge with another ultrahigh-speed, next-generation network, National LambdaRail.

The announcement of the new record was made at the Internet2 consortium's spring meeting, which ends Wednesday in Arlington, Va.

Free Broadband Soon
Joji Thomas Philip

The government proposes to offer all citizens of India free, high-speed broadband connectivity by 2009, through the state-owned telecom service providers BSNL and MTNL. While consumers would cheer, the move holds the potential to kill the telecom business as we know it.

You have heard of free municipal broadband — many cities in the US have drenched themselves in wireless broadband connectivity which is freely accessible to residents. The idea is to boost economic activity in general. The government of India plans to achieve free broadband connectivity at a speed of 2 MB per second across the country, with a similar goal. Senior government officials expect to be able to achieve this goal spending only a portion of the corpus of the Universal Service Obligation Fund (USOF).

All telecom operators contribute 5% of their revenues every year to USOF. It is estimated that the unutilised sum from the USOF has touched Rs 9,194.12 crore by March, 2007-end.

The current technological trend is for voice calls also to shift to the internet, using voice over internet protocol (VOIP). The quality of VOIP calls, patchy to start off with, has been improving steadily over the years and by 2009, is likely to be as good as current analogue calls that establish a circuit between the calling and called parties. When that happens, revenue streams from calls would dry up and telecom companies would need to develop value-added applications to make money from the connectivity they provide for free or virtually free.

The department of telecom (DoT) will be taking a series of steps to make its plans for free broadband a reality. These include, using the USOF to set an extensive optic cable network across the country, opening up the long-distance sectors to further competition, allowing free and fair access to cable landing stations, permitting the resale of bandwidth, setting up web hosting facilities within the country and asking all internet service providers to connect to the National Internet Exchange of India (NIXI).

With international bandwidth rates in India being between two-to-five times higher than the global standards, the DoT will also go all out to break the monopoly of existing national and international distance players in a bid to induce cut throat competition in this sector. “India has only a handful of NLD/ILD operators while small countries such as Singapore and Taiwan have over 30 and 60 long distance operators respectively.

With limited players, they control the bandwidth gateways and form a cartel and this ensures that tariffs remain high. The entry of new players such as AT&T, British Telecom amongst others has started creating an impact,” the government source added.

Importantly, the ground work for this project is already being laid. This comes as telecom regulator Trai had recently proposed that access to submarine cables be made cost-based and independent companies be given free and fair access to cable landing stations. (Cable landing stations connect submarine telecom cables with data and voice networks in the country.) Additionally, Trai had also recommended that bandwidth resale be permitted in India. Industry analysts estimate that these two steps by Trai alone will lead to a 30% reduction in bandwidth costs, when implemented.

In a related move, the DoT will also issue norms which mandate Indian companies, including state-owned BSNL and MTNL to begin large scale web hosting services. “This is because, most of the internet traffic generated in India is currently routed out of the country and re-routed back, resulting in the increased use of international bandwidth,” the government source said.

Additionally, the plan also includes asking all internet service providers to connect their networks to NIXI. This will also ensure that internet traffic, originating and destined for India, is routed within India resulting in optimum domestic bandwidth utilisation. Currently, the very purpose of establishment of NIXI has not been served as only 27 ISPs out of 135 operational ISPs have joined it, the source explained.

Answers Sought for U.S. Broadband Decline
Chloe Albanesius

A U.S. innovation brain drain, coupled with sloppy government handling of subsidy programs and data collection, have contributed to a decline in the country's broadband standing, technology experts told the Senate Commerce Committee on Tuesday.

The committee convened the hearing for a discussion on how the U.S. measures up against other countries in broadband competitiveness.

The hearing was held a day after the Organization for Economic Cooperation and Development (OECD) issued new global broadband per-capita penetration data that saw the U.S. fall from 12th to 15th place out of 30 countries. Some viewed the results as a sign that the U.S. is falling behind its global counterparts, while others said it was unfair to compare the U.S. against the smaller and more densely populated countries that beat the U.S. in the OECD rankings.

The questions that panelists tangled with mainly dealt with issues of geography. In Europe, where per-capita broadband penetration is growing, world powers like the United Kingdom are smaller geographically than California. The person-to-person proximity also allows infrastructure buildouts to serve more people. While this isn't a problem in major cities, serving rural customers with broadband access is still a thorny issue.

One of the issues left undefined was the definition of "broadband". Add to that the lack of reliable government data, and the problem becomes even more complicated, witnesses said.

Sen. Daniel Inouye, D-Hawaii, who chairs the Commerce Committee, said that he would soon introduce a bill to promote innovation and improve the federal commitment to basic research on communications. He is also penning broadband data development legislation that would call for the collection of broadband data collection at the federal and state levels, a complaint that was voiced by several speakers.

The numbers problem

"We need better data" from the Federal Communications Commission (FCC), said Ben Scott, policy director of Free Press, an organization dedicated to media reform. The FCC currently collects data based on ZIP codes, which could be misleading, Scott said. "We need information on a block-by-block basis."

Jeffrey Eisenach, chairman of Criterion Economics, a Washington-based consulting firm, agreed. "Current FCC data is not useful. It doesn't tell us how many households or businesses in that ZIP code have broadband availability. Nor does it tell us anything about quality."

Meanwhile, the last time the national census gathered broadband data was 2003, Eisenach said. "It might as well have been collected in 1903," he said.

Throwing government funds at an issue, however, does not always solve the problem. Sen. Claire McCaskill, D-Mo., questioned why millions that were allocated by the Rural Utilities Service for rural areas were actually being used in urban areas like Houston and Los Angeles. Panelists also tangled over the benefits of the Universal Service Fund (USF), money intended to provide telecommunications service to all Americans.

Brian Mefford, whose public-private ConnectKentucky partnership initiative managed to increase the state's broadband availability by 32 percent in three years, did not rely on USF monies for the project. "It needs some retooling," he says of the fund.

One retooling suggestion is to require broadband ISPs to contribute to the USF. Currently, only interstate telecom providers like phone, long distance and cell phone providers have to put money into the fund. Continued...
"The insertion of broadband into universal service is essential," said Scott. "Bringing broadband to rural areas will require the same kind of progressive idea that [brought] the telephone to rural areas."

Sen. Ted Stevens of Alaska, ranking Republican on the committee, has introduced legislation to insert broadband into the USF. "The problem is basically we can't use the legacy system of cable and wire" for broadband and have to build out across rural areas, Stevens said. "Wireless technology has brought new communication, but it is slower and not adaptable."

DSL, meanwhile, "only works within about 18,000 feet of a central office," said Eisenach. "The copper line lengths in the U.S. are longer than those in Europe. We have much higher cost of copper than in the EU."

The National Cable & Telecommunications Association on Monday penned a letter to Senate and House Commerce leaders that said the OECD's results could be misleading. "Compared to most of the nations that rank 'ahead' of the U.S. in broadband penetration, the U.S. is geographically vast and significantly less dense," NCTA President Kyle McSlarrow wrote. "It is clear that factors like geography, distance, and population concentration and urbanization are critical to the pace ad success or investment in any network, not just broadband."

Technology is the answer – but what?

Even if the problem is as great as the OECD maintains, however, basic research into technologies to solve the national broadband problem is being ignored, Inouye said. "Today we see less of the visionary, long-term research that took place at Bell Labs and resulted in breakthrough technologies that made [the U.S.] the envy of the world," he said.

Bell Labs was driven by telecommunications research, a driver that forced researchers to "think along a certain path," said Adam Drobat of the Telecommunications Industry Association (TIA). It also received ample funding for long-term projects.

Today, the two fields that are fundamental to telecom – electrical engineering and computer science – are seeing fewer and fewer American doctoral graduates, Drobat said. "There have to be some economic incentives – money for education, money for research – that drive people to these disciplines and that funds them well in the future," he said.

"TIA believes that public policies should foster a climate conducive to innovation and investment, avoiding overly prescriptive regulatory regimes," Drobat added.

"The only research that's being done in telecom now outside of universities has a very, very short time frame for work research and it's being done mainly by equipment managers," said Jack Wolf, vice president of technology for Qualcomm.

Universities that do receive federal research funds for telecom get perhaps 10 percent of funds allocated to the National Science Foundation and the Defense Advanced Research Projects Agency (DARPA), Wolf said.

Wolf called for a new research program that would stimulate interest in telecom research across academia and government and recognize the challenges the industry faces in coming up with new research funds.

Wi-Fi? Why Worry?

Scare stories about the dangers of wireless networks lack credibility, argues Bill Thompson

Students at Canada's Lakehead University have to be careful how they connect to the internet because wi-fi is banned on large parts of the campus.

University president Fred Gilbert, whose academic interests include wildlife management, environmental studies and natural resources science, is worried about the health impact of the 2.4Ghz radio waves used by wireless networks

Last year he decided to adopt the precautionary principle and refused to allow wi-fi in those areas that have what he calls "hard wire connectivity" until it is proved to be safe.

Mr Gilbert believes that "microwave radiation in the frequency range of wi-fi has been shown to increase permeability of the blood-brain barrier, cause behavioural changes, alter cognitive functions, activate a stress response, interfere with brain waves, cell growth, cell communication, calcium ion balance, etc., and cause single and double strand DNA breaks".

Unfortunately the science says he is wrong, and his students are suffering as a result.

Smog talk

While the heating effects of high exposures to electromagnetic radiation can be damaging, the power levels of wireless connections are much lower than the microwave ovens and mobile phones which share the frequency range, and treating them in the same way is the worst sort of scaremongering.

Yet Mr Gilbert is not alone.

In 2003 parents sued a primary school in Chicago because it had dared to provide children with easy access to computing resources over a wireless network.

And there are a number of pressure groups, campaigning organisations and ill-informed individuals who believe that wireless networks pose a threat to health and want to see them closed down.

Now it seems they have been joined by the editor of the UK newspaper the Independent on Sunday, which this weekend filled its front page with a call for research into the "electronic smog" that is permeating the nation's schools and damaging growing children's' brains.

An accompanying editorial with the even-handed headline "high-tech horrors" called for an official inquiry, while the article outlining the perceived dangers asked "Is the wi-fi revolution a health time bomb?"

The answer, of course, is "no".

That will not stop the newspaper stoking up a wave of opposition to one of the most liberating technologies to have come out of the hi-tech revolution, limiting children's access to networked computers at schools and even blocking plans to develop municipal wireless networks in our towns and cities.

If the journalists were really concerned about the dangers of radio frequency electromagnetic radiation on the sensitive brains of the young, they should be calling for the closure of TV and radio transmission towers rather than asking us to turn off our wi-fi laptops.

The modulated frequencies that carry Radio 4 and ITV into our homes are just as powerful as the wireless networks, and a lot more pervasive.

And my wireless network is only carrying data when I'm online, while Radio 3 burbles all day long, possibly exciting electrons in my brain and causing headaches.

Then there is the danger from photons of visible light streaming down onto us as we work, since these carry more energy than microwaves and could surely do more damage.

Perhaps we should demand that our children work in the dark.

Test programme

The fuss over wi-fi is the latest manifestation of a general worry about electromagnetic radiation, one whose concerns have ranged over the years from the fields around power transmission lines to the radiation emitted by computer monitors to the microwaves put out by mobile phones.

Campaigners are often supported by those who claim to be so sensitive to electromagnetic radiation that they cannot bear to have a radio turned on in the same room because the fields affect their brains, or those who claim that using a mobile phone gives them headaches.

Unfortunately studies like that of James Rubin from the Institute of Psychiatry indicate that such people are just as likely to get a headache when they believe there is a phone signal present even if it is in fact absent, and other research into electromagnetic sensitivity is equally negative.

There is no evidence that electromagnetic radiation at radio frequencies, where the energy levels are too low to dislodge electrons and affect molecular bonding, can cause health effects except by heating tissues.

While those who want to limit the use of wi-fi argue that they need evidence that is it safe, the problem with trying to prove that something is safe is that you can't.

Karl Popper, the great philosopher of science, helped us to understand that science is about falsification, about setting up hypotheses and theories and proving them wrong, because you can never prove them right.

Any theory can be overturned by new evidence, and any claim that wireless networks are completely safe could be thrown out tomorrow if we find good evidence that it isn't.

We may come up with a hitherto unsuspected mechanism that explains a previously disregarded effect, or the evidence may be statistical and require detailed investigation.

Were that to happen we should take it seriously, but it has not happened and there is no reason to believe it will.

The precautionary principle, of avoiding exposure to unnecessary risk, does not apply here because there is no known mechanism by which wireless networks could cause damage.

We have a sound model of the interaction between electromagnetic radiation and organic matter that gives us little reason to believe that there will be any dangers.

For William Stewart, chairman of the Health Protection Agency and a former chief scientific adviser to the Government, to argue for an investigation on the basis of no real evidence that there is an effect, and in the absence of any plausible physical mechanism, is indefensible.

Cellphones heat the brain and could cause problems. Wi-fi doesn't, and it is safe. My daughter is sitting here as I write, her new wireless laptop beside her, and I'm a lot more worried about the damage she would do if she dropped it on her foot than I am about the impact of the low power radio waves it emits.

Bill Thompson is an independent journalist and regular commentator on the BBC World Service programme Digital Planet.

Wireless: Case of the Disappearing Bees Creates a Buzz About Cellphones
Eric Sylvers

The headlines were catchy, the subject compelling and, in some cases, the newspapers well respected.

"Cellphones linked to honeybee deaths." "To bee or not to be near mobile phones." "German study links cellphones to drop in honey bee population; Radiation said to interfere with homing ability." "Are mobile phones wiping out our bees? Scientists claim radiation from handsets are to blame for mysterious 'colony collapse' of bees."

All rather dire if you try to imagine a world without honey and especially if you happen to have read a quote that has been attributed to Albert Einstein saying that if bees were to disappear, the human race would follow suit four years later because of the important role bees play in pollinating plants.

The bee story had an extra appeal for those people who use their cellphones rather tentatively because they think the privilege to speak on the move may be frying their brain cells one by one. So now, if the headlines are to be believed, we learn that our cellphone and those long calls from mom where she refuses every attempt to cut short the conversation not only are going to lead to our demise, they are killing millions of bees.

Good story for sure, except that the study in question had nothing to do with mobile phones and was actually investigating the influence of electromagnetic fields, especially those used by cordless phones that work on fixed-line networks, on the learning ability of bees. The small study, according to the researchers who carried it out too small for the results to be considered significant, found that the electromagnetic fields similar to those used by cordless phones may interrupt the innate ability of bees to find the way back to their hive.

Those searching for answers for the recent disappearance of millions of bees in the United States - what researchers are calling colony collapse disorder - jumped on the possible explanation though there was one particular, cellphones and cordless phones emit different types of radiation and what you learn studying one type is not necessarily significant to the other, according to the researchers.

"We cannot explain the CCD-phenomenon itself and want to keep from speculation in this case," Jochen Kuhn, a professor in the physics department at the University of Koblenz-Landau in Germany who co-authored the bee study, wrote in an e-mail message. "Our studies cannot indicate that electromagnetic radiation is a cause of CCD."

While beekeepers consider it normal to lose about 20 percent of their bees in the off-season while the bees are hibernating, it has been reported that recent U.S. losses have ranged from 30 to 60 percent on the West Coast to as much as 70 percent in parts of the East Coast and Texas. The bees simply disappear from their hives, apparently having gone one last time in search of pollen and nectar, only never to return.

"If the Americans are looking for an explanation for colony collapse disorder, perhaps they should look at herbicides, pesticides and they should especially think about genetically modified drops," said Stefan Kimmel, a graduate student who co-authored the study last year with Kuhn and other professors.

The speculation about the bees and cellphones heightened when reports that colony collapse disorder had reached Britain and several other European countries. The British Department for Environment, Food and Rural Affairs squashed speculation regarding Britain. The mortality rate among bees has been 22 percent so far this year in Britain, compared with 15 percent last year, though the results are not yet significant because only 2,000 colonies have been inspected out of about 25,000, said Abbie Sampson, a senior press officer with the DEFRA.

"It's not my fault if people misinterpret our data," said Kimmel. "Ever since The Independent wrote their article, for which they never called or wrote to us, none of us have been able to do any of our work because all our time has been spent in phone calls and e-mails trying to set things straight. This is a horror story for every researcher to have your study reduced to this. Now we are trying to force things back to normal."
JackSpratts is offline   Reply With Quote
Old 25-04-07, 08:36 AM   #2
JackSpratts's Avatar
Join Date: May 2001
Location: New England
Posts: 9,928

Rip this

MPAA: We are Committed to Fair Use, Interoperability, and DRM
Nate Anderson

At a LexisNexis conference on DRM this week, MPAA boss Dan Glickman said the movie studios were now fully committed to interoperable DRM, and they recognize that consumers should be able to use legitimate video material on any item in the house, including home networks. In a major shift for the industry, Glickman also announced a plan to let consumers rip DVDs for use on home media servers and iPods.

Unfortunately, this plan is not yet well developed. In his speech to industry insiders at the posh Beverly Hills Four Seasons hotel, Glickman repeatedly stressed that DRM must be made to work without constricting consumers. The goal, he said, was "to make things simpler for the consumer," and he added that the movie studios were open to "a technology summit" featuring academics, IT companies, and content producers to work on the issues involved. He also pointed to the $30 million MovieLabs project that the studios are currently funding as proof of their commitment to interoperability.

Speaking to Ars after the speech, Glickman acknowledged that the plan was still in the early stages. I asked him specifically about DVDs, which are currently illegal to rip under the DMCA, and how the law would square with his vision of allowing consumers to use such content on iPods and other devices. "You notice that I said 'legally' and in a protected way," Glickman responded, suggesting that some form of DRM would still be required before the studios would sign off on such a plan. He noted, however, that no specific plans have been made.

The MPAA does recognize that progress on DRM needs to be made soon, or impatient consumers will increasingly turn to unauthorized sources for content. "We're working on this right now, trying to find ways to make it interoperable," he said, but added that pricing and business models for such a system are "way beyond my pay grade."

Dean Garfield, VP of Legal Affairs for the MPAA, told me that he has confidence in the market to sort all of these issues out. "You have to give some thought to how young the digital distribution market is," he said. "I suspect that the issues confounding people today won't be the issues challenging the industry six months from now."

But will consumers sit idly by, twiddling their thumbs while content owners and consumer electronics manufacturers get their act together? Garfield recognizes that consumers are impatient, which means that "we also have to be impatient."

In his speech, Glickman said that the industry needs "a collective philosophical commitment" to move forward on issues of interoperability and authorized use, and said that the MPAA has now made that commitment. He called on other companies in the industry to sit down and work out a solution. Though he never mentioned Apple by name, it's clear that the Cupertino-based company was number one on the list of companies that need to get involved; whether interoperable DRM and legitimate DVD ripping actually mesh with Apple's own business priorities is another question, though.

Despite the lack of specificity, Glickman's speech marks a step forward for the MPAA, which says it is now committed to allowing content to play on any device, from any manufacturer. As other presenters at the conference made clear, this is largely a result of self-interest: consumers are frustrated with current limitations, and movie studios aren't thrilled about having to sign off on Apple's terms in order to get content onto iPods. Still, hearing Glickman speak with conviction about consumer rights to use material in "fair ways" and to wax eloquent about interoperability was an encouraging sign—even if he views DRM as a necessary "enabling tool" that's not going away anytime soon.

Jack Valenti, a Confidant of President Lyndon B. Johnson, Is Dead at 85
David M. Halbfinger

Jack Valenti, who became a confidant of President Lyndon B. Johnson and then a Hollywood institution, leading the Motion Picture Association of America and conceiving of a voluntary film-rating system that gave new meaning to letters like G, R and X, died today in his home in Washington. He was 85.

The cause was complications of a recent stroke, his family said.For 38 years, Mr. Valenti was the public face of the movie and television production industry and one of its fiercest advocates. He lobbied Congress to protect filmmakers’ intellectual property from piracy and to ease trade barriers overseas. And he fended off lawmakers’ recurring campaigns to curb violence and sex on the screen, arguing for free expression. He devised the film-rating system precisely to avoid censorship by local review boards.

He also remained a starry-eyed fan, cherishing his friendships with Kirk Douglas, Sidney Poitier and Frank Sinatra, falling speechless before Sophia Loren and savoring his seconds in the spotlight as a regular presenter at the Academy Awards.

As a Houston political consultant, he was in the motorcade when President John F. Kennedy was shot on Nov. 22, 1963, and he watched as Johnson was sworn in beside Jacqueline Kennedy aboard Air Force One.

Mr. Valenti soon became known, and for a time mocked, for his unfailing loyalty to Johnson, if not outright idolatry of him. “I sleep each night a little better, a little more confidently because Lyndon Johnson is my president,” he once said in Boston, inviting guffaws nationwide.

Even after leaving a senior post at the White House in 1966, Mr. Valenti remained at Johnson’s service, secretly arranging the president’s surprise detour to the Vatican to meet with Pope Paul VI on the way back from Vietnam in December 1967.

His fidelity was lifelong. Mr. Valenti, a bantam 5-foot-7 who forever looked up to the towering Johnson, picked fights with critical Johnson biographers like Robert Caro and Robert Dallek. When a cable-television documentary suggested in 2003 that Johnson had a role in the Kennedy assassination, Mr. Valenti worked behind the scenes to discredit it.

Mr. Valenti’s forthcoming memoir, “This Time, This Place: My Life in War, the White House, and Hollywood” (Crown), does as much to polish Johnson’s legacy as his own. He was to have begun a six-city tour on June 5 to promote the book.

In 1966 Mr. Valenti took his talents for personal politicking — and lionizing his bosses — to Hollywood, heeding the request of Lew Wasserman and Arthur Krim, then chairmen of MCA/Universal and United Artists respectively, that he take over the Motion Picture Association. “If Hollywood is Mount Olympus,” Mr. Valenti once said of his new liege, “Lew Wasserman is Zeus.”

At the time Hollywood was still officially operating under the Hays Production Code, the industry’s draconian and increasingly outmoded self-censoring rules that flatly barred nudity, profanity, miscegenation and even childbirth scenes from being depicted on film.

Mr. Valenti was soon confronted with two films in 1966 that convinced him that the code had become obsolete. He dealt with one, “Who’s Afraid of Virginia Woolf?,” by negotiating a compromise in which three out of four particular vulgarisms were cut.

Later that year, M.G.M. released Antonioni’s “Blowup” even though that film, showing brief scenes of nudity, lacked Production Code approval. Sensing that other films would also begin flouting the code and in turn create a vacuum into which local politicians and censorship boards might rush, Mr. Valenti decided to act.

“I knew I had to move swiftly, and I did,” he later recalled. “I was determined to free the screen from anything like the Hays Code. But I also emphasized that freedom demanded responsibility.”

So by late 1968 he persuaded the national theater-owners association to buy into a system of voluntary ratings, based on an ascending scale of adult content, that would be enforced at the box office: G, M (later PG), R and X.

The system was not without flaws and detractors, and it required some tinkering. In 1984, after receiving complaints about frightening parts of PG-rated movies (“parental guidance suggested”) like “Gremlins,” the association added the PG-13 category (“parents strongly cautioned”). Though the other ratings were trademarked, the X was not, and pornographers quickly co-opted it. In 1990 the association replaced the X with NC-17 (no one 17 and under admitted), hoping it would be embraced, but distributors have mostly spurned it for commercial reasons, leaving many filmmakers to make wrenching cuts to adult-themed films in pursuit of an R rating.

Mr. Valenti always rebutted critics by citing an annual survey, paid for by the association, showing that parents of young children strongly believed that the ratings were useful.

In 1983, at the height of the Reagan administration’s deregulation efforts, Mr. Valenti led a fight to preserve federal rules intended to protect television producers and studios from the market power of the three major networks. The Federal Communications Commission was considering repealing the rules and allowing the networks to produce programs, thus giving them vertical control over production, distribution and exhibition.

In his memoir, he said he asked Mr. Wasserman, who had once been Ronald Reagan’s agent, and Charlton Heston to urge the president to oppose the repeal. The White House did just that, and the federal rules remained in place until 1995, by which time mergers between studios and networks had rendered them unnecessary.

In Mr. Valenti’s last decade at the association, it became consumed with fighting digital piracy. But one of his bolder strokes, in 2003, blew up in his face. He had learned that half the films being sent to industry people on DVD, known as screeners, for awards campaigns were turning up on sale illegally around the world. So he banned screeners altogether. A storm of protest ensued — loudest of all from the major studios’ own specialty divisions, which rely heavily on awards attention to publicize their films — and the policy was overturned by a federal judge, who said it ran afoul of antitrust laws.

Jack Joseph Valenti was born in Houston on Sept. 5, 1921, to the son and daughter of Italian immigrants from Sicily. He traced his passion for politics to the day his father, a clerk for the city government, took him to a political rally, where the 10-year-old Jack was invited to give his first speech, from a flatbed truck, for the Harris County sheriff. “I never recovered from it,” Mr. Valenti wrote.

As a youth he worked for a chain of second-run movie theaters in downtown Houston, roaming the city putting up posters in storefront windows in exchange for free passes. Hired as an office boy at the Humble Oil Company (an antecedent of ExxonMobil), he attended the University of Houston at night but still managed to be elected class president his sophomore year.

A voracious reader, he devoured everything by Macaulay, Churchill and Gibbon, and his speaking and writing style would mix his native twang with the rhetorical flourishes of his heroes, in a brew of cliché, cornpone, compelling phrases and clunkers that one critic called “a kind of Texas baroque.”

In 1982 Mr. Valenti published a guide to oratory, “Speak Up With Confidence,” which was revised and reissued in 2002. He also wrote “The Bitter Taste of Glory,” a book of essays (World, 1971); “A Very Human President” (W. W. Norton, 1975), about Johnson; and a political novel, “Protect and Defend” (Doubleday, 1992), edited by Jacqueline Kennedy Onassis.

As an Army B-25 pilot in World War II — the Naval air corps had rejected him because of a heart murmur — he flew 51 missions over Italy, but never piloted a plane again after returning his flak-battered bomber to the United States. He went to Harvard Business School on the G.I. bill, then returned to Humble Oil’s advertising department, where he helped its Texas gas stations jump from fifth to first in sales through a “cleanest restrooms” campaign. He co-founded an advertising agency in 1952, with a rival oil company, Conoco, as its first client. He later added Representative Albert Thomas, a Johnson ally, as a client.

It was in 1956 that he met Senator Johnson Johnson at a gathering of young Houston Democrats. As a sideline, Mr. Valenti had begun writing a weekly column in The Houston Post, and he rhapsodized there about the senator’s “strength, unbending as a mountain crag, tough as a jungle fighter.” Their friendship grew, and when Johnson became Kennedy’s running mate, he had Mr. Valenti run the ticket’s campaign in Texas. Mr. Valenti helped stage Kennedy’s televised meeting on Sept. 12, 1960, with a group of Protestant Houston ministers, an event that was instrumental in helping him overcome anti-Catholic bias.

Mr. Valenti cemented his ties to Johnson in 1962 when he married Mary Margaret Wiley, a Johnson secretary. The couple accompanied Johnson to Rome for the funeral of Pope John XXIII, and Mr. Valenti was put in charge of the Houston leg of Kennedy’s 1963 swing through Texas. After a dinner there on Nov. 21, Johnson asked Mr. Valenti to fly on Air Force Two the next day. Moments after learning Kennedy was dead, Mr. Valenti was summoned to Air Force One, where he was hired on the spot as a special assistant.

In his memoir he recalled helping rustle up votes for Johnson’s monumental Great Society legislation; witnessing Johnson’s private browbeating of Gov. George Wallace of Alabama after the attacks on civil-rights marchers in Selma; and being accused (unfairly, he maintained) by Robert F. Kennedy of leaking to the news media stories about Kennedy’s chances of being made Johnson’s 1964 running mate.

But Mr. Valenti may have rendered his most vital White House service by being a source of companionship, public praise and private candor: before leaving the White House, he warned Johnson how much the war was hurting his credibility with voters, Mr. Dallek said Mr. Valenti spent more time socially with the president than any other aide, often bringing along his wife and their toddler daughter, Courtenay Lynda, a Johnson favorite.

In addition to his wife of 45 years and his daughter, now an executive vice president for production at Warner Brothers Pictures, Mr. Valenti is survived by a son, John Lyndon, of Los Angeles, the chief executive of icreate.com, an informational service for the film industry; another daughter, Alexandra Alice, a photographer and video director in Austin, Tex.; and two grandchildren. Mr. Valenti, who was four days shy of 83 when he stepped down from the motion picture association, continued to come to work, nattily dressed, long afterward. “Retirement to me is a synonym for decay,” he wrote in his memoir. “The idea of just knocking about, playing golf or whatever, is so unattractive to me that I would rather be nibbled to death by ducks. So long as I am doing what I choose to do and love to do, work is not work but total fun.”

The Ratings System, Built to Endure
Michael Cieply

As David S. Goyer readied his new movie for release this weekend, he joined the long list of filmmakers who have been frustrated, flummoxed or downright infuriated by what may turn out to be Jack Valenti’s most enduring legacy, the film rating system.

On its first run through the ratings board, Mr. Goyer’s “Invisible,” a supernatural thriller whose central characters are teenagers and that deals with teenage suicide, was assigned an R for, among other things, what Mr. Goyer described as “dark themes.” Some tinkering and a bit of dialogue with the raters eventually got the movie its PG-13 rating, essential if its young target audience were ever to see it in theaters. But not before the director had spent considerable time puzzling over a ratings rationale that seemed ambiguous enough to have put the tale of the sad orphan in “Bambi” at risk of an R.

“The paradox is, the more realistically and more accurately you try to portray something, the heavier it becomes,” said Mr. Goyer, whose film opened on Friday.

Mr. Valenti, who died on Thursday at 85, created what is officially named the Classification and Rating Administration 38 years ago in one of his first policy initiatives upon taking charge of the Motion Picture Association of America. Since then the ratings board has been accused of Star Chamber-like censorship, compared to a fussy church lady tougher on sex than violence, and perennially second-guessed in its decisions.

But the system is almost certain to long survive Mr. Valenti. And that is precisely because of a remarkable fluidity — some would say capriciousness — that would have let it shut the young out of “The Invisible” this year if not for the director’s changes, while having waived such changes two years before, in the PG-13-rated “Batman Begins,” of which Mr. Goyer was a writer.

“In the end, it endures because it works,” Sidney Ganis, a film producer and president of the Academy of Motion Picture Arts and Sciences, said of the ratings system. For the major studios the system has been a bulwark against outside interference, though it has often galled filmmakers and hasn’t done enough for many parents, who increasingly want to know more about what their children are going to see in a picture. When the ratings administration was founded, in 1968, two years after Mr. Valenti joined the movie association, it warded off a threatened surge in locally imposed ratings. In later years periodic retooling — like a 1996 shift in which NC-17 became more restrictive by switching its prohibition from those under 17 to those 17 and under — helped to keep the culture wars and the politicians at bay.

That did not happen, of course, without a thwacking now and then by sophisticates, as in Kirby Dick’s 2006 documentary critique, “This Film Is Not Yet Rated,” or an occasional accommodation of the family-values crowd, like the industry-sponsored Web site pauseparentplay.org, which links to supplemental ratings.

Mostly, filmmakers complain that they must work against muddled or moving boundaries. And parents’ groups grouse about “ratings creep,” a perceived tendency for a category like PG-13 to permit ever more violence, sex and profanity over the years to reach impressionable youth. Yet it was Mr. Valenti’s genius to have devised an apparatus that is not bound by precedent, changes its definitions at will and, ultimately, serves the motion picture industry by becoming, at any given moment, as permissive or restrictive as the prevailing climate seems to demand.

Under Dan Glickman, who in 2004 succeeded Mr. Valenti as the motion picture association’s top officer, the ratings board, which is overseen jointly with the National Association of Theater Owners, has become more generous in explaining itself to the public. In the description now posted on the mpaa.org Web site, the board says its dozen or so raters, all parents, are expected to judge films according to “factors that parents consider when deciding whether to allow their children to view that motion picture.”

Meeting that loose, impressionistic and ever-changing standard has been about as much fun for filmmakers as talking sex with Mom and Dad, and real understanding has just as often been lost in the process. Extreme verbal crudity initially tagged “Clerks” with the dreaded NC-17 restriction in 1994, but more of the same and flat-out bestiality did not keep “Clerks II” from waltzing to an R in 2006.

Mr. Ganis has had his own misadventures with the raters, recalling making six trips to the board in a failed effort to reverse an R rating on his “Deuce Bigalow: Male Gigolo.” Still, Mr. Ganis remains a defender of the system, even with what he called its “strange ways.”

And Mr. Goyer, though frustrated by a standard that is “a moving target,” said he could see the wisdom in letting standards quietly “expand and contract, based on the public acceptance of things.”

Indeed, for nearly 40 years, Mr. Valenti’s raters have largely kept politicians and busybodies out of the film business, even if that meant playing somewhat unpredictable busybodies themselves. They haven’t always been fair, and not entirely pleasant to deal with. But in the end, theirs was no mean achievement.

Blood, Bullets, Bombs, and Bandwidth:

a tale of two California cipherpunks who went to Baghdad to seek their fortune, and bring the Internet to Iraq.

Ryan Lackey wears body armor to business meetings. He flies armed helicopters to client sites. He has a cash flow problem: he is paid in hundred-dollar bills, sometimes shrink-wrapped bricks of them, and flowing this money into a bank is difficult. He even calls some of his company's transactions "drug deals" – but what Lackey sells is Internet access. From his trailer on Logistics Staging Area Anaconda, a colossal US Army base fifty miles north of Baghdad, Lackey runs Blue Iraq, surely the most surreal ISP on the planet. He is 26 years old.

Getting to Anaconda is no joke. Incoming airplanes make a 'tactical descent' landing, better known to military cognoscenti as the 'death spiral'; a nose-down plummet, followed by a viciously tight 360-degree turn, then another stomach-wrenching dive. The plane is dragged back to level only just in time to land, and brakes so hard that anything not strapped down goes flying forward. Welcome to "Mortaritaville" – the airbase's mordant nickname, thanks to the insurgent mortars that hit the base daily.

From above, the base looks like a child's sandbox full of thousands of military toys. Dozens of helicopters litter the runways: Apaches, Blackhawks, Chinooks. F-16 fighters and C-17 cargo planes perch in huge igloo-like hangars built by Saddam. The roads are full of Humvees and armored personnel carriers. Rows of gunboats rest inexplicably on arid desert. A specific Act of Congress is required to build a permanent building on any US military base, so Anaconda is full of tents the size of football fields, temporary only in name, that look like giant caterpillars. Its 25,000 inhabitants, soldiers and civilian contractors like Ryan, are housed in tent cities and huge fields of trailers.

Ryan came to Iraq in July 2004 to work for ServiceSat International, hired sight unseen by their CTO Tyler Wagner. Three months later, Ryan quit and founded Blue Iraq. He left few friends behind. "I think if Ryan had stayed," Tyler says drily, "the staff would have sold him to the insurgents."

- - -

Iraq is new to the Internet. Thanks to sanctions and Saddam, ordinary citizens had no access until 1999. Prewar, there were a mere 1.1 million telephone lines in this nation of 26 million people, and fewer than 75 Net cafés, connecting via a censored satellite connection. Then the American invasion knocked nearly half of Baghdad's landlines out of service, and the local exchanges that survived could not connect to one another.

After the invasion, an army of contractors flooded into Baghdad. Billions of reconstruction dollars were being handed out in cash, and everybody – local Internet cafés, Halliburton, Ahmed Chalabi, the US military itself – wanted Internet access. With the landline service destroyed by war, and sabotage a continuing problem, satellite access was the only realistic option. Among the companies vying to provide this access in early 2003, scant months after the invasion, was ServiceSat International. SSI, a startup founded by Kurdish expats, needed an American CTO: partly to import America's culture of technical excellence, partly to help deal with Western clients and authorities. They called Tyler Wagner. He was 25 years old.

- - -

San Francisco, aka Baghdad-by-the-Bay, July 2003. Tyler Wagner is a typical counterculture California techie: a Cal Poly CS graduate, part of the California punk scene, working for Greenpeace as a network engineer. Then an old friend in London recommends him to SSI. They call him. They need a capable Westerner willing to move to Iraq. Is he interested?

When he hangs up the phone, Tyler is shaking with excitement. The risks of relocating to a war zone are obvious. But it is a lucrative senior management position, offered to a man only two years out of university. "Life doesn't often offer you a hand up like that," he reminisces two years later, "and when it does, you can't afford to turn it down." One big complication: Tyler's girlfriend, Jayme. They have been dating only six months. He doesn't want to lose her. He calls and tells her the news – and they both ask at the same time if she can come with him.

Three weeks later, Tyler and Jayme fly into Amman, Jordan, and take a GMC Suburban taxi across the desert to Baghdad. Once they reach the city, their driver tells them to get beneath window level, to avoid snipers. They stay on the floor of the Suburban until they reach SSI's office in Baghdad's affluent al-Mansour neighbourhood.

- - -

Baghdad, August 2003. Tyler wakes in his house/office, rolls out of bed, walks into his office next door, and begins another fifteen-hour day. The house is full of SSI-employed drivers, engineers, tea-boys, housekeepers, and Kurdish peshmerga guards armed with AK-47s. Generators and air conditioners whir. Outside, the Iraqi summer heat regularly hits 130.

Other than the bicultural Kurdish/British directors, Tyler is the company's only Westerner. He has to build SSI's internal systems, manage the satellite installs, deal with Western clients, and train the team of Iraqi engineers, most of whom are older than he. All the problems of a fast-growing start-up, plus massive culture shock – in a war zone. Bombs and gunfire serenade them nightly. Meanwhile, Jayme is going stir-crazy; she has nothing to do, but cannot leave the house. The first few weeks are rough.

Things get better. Tyler and Jayme adapt to their new lives. If they want to buy Pop-Tarts or root beer, at the nearby shop that sells American delicacies at a 1000% markup, they are driven there in a car full of gunmen. This soon seems normal. Jayme gets a job at Erinys, one of Baghdad's many thriving private security companies. They go to parties in the Green Zone with South African mercenaries, American diplomats, and KBR contractors. Tyler learns new skills: how to install a VSAT satellite system from scratch; how to open a beer bottle with the Browning pistol he carries; how to distinguish between an AK-47 and an M-16 by sound alone; how to use tampons as battle dressings; the fine art of bribery.

Months pass. Business booms. SSI has plenty of competitors, but almost uniquely, they combine Western funding and technical expertise with a team of local engineers – a team who have become a band of brothers. Tyler fosters a community atmosphere, encourages his engineers to stay after work, play Half-Life and Settlers of Catan together, or watch South Park en masse. He attends their weddings, first as an honoured guest, then as a friend. He hires a tutor to teach him Arabic, even though all business is done in English. SSI has become half employer, half family. Iraq isn't just his workplace; it's his new home.

Tyler visits monstrous palaces built by Saddam. He meets native speakers of Aramaic, the language of Biblical times. He travels to Kirkuk, in the north, and installs a satellite dish in an oilfield straight out of Dante's Inferno, surrounded by massive pipes vomiting flame and bright green gas. And he hacks US military security with a digital camera, a $2,000 card printer, and a little social engineering.

Baghdad is a occupied city of walls and roadblocks. Most of SSI's clients are guarded by the US military. Many of them are US military. There are two free passes through checkpoints and gates: white skin, or a Department of Defense ID card. With neither, you line up for hours to be searched. Tyler is tired of his engineers losing days at checkpoints. He constructs SSI's secret weapon: an internal corporate ID that happens to look very much like a DoD card, right down to an empty smart card, a bar code, and a magnetic-strip-like line of black ink across the back. And for months, his engineers are regularly waved past inspection points by US soldiers.

But the insurgency intensifies; security grows tighter, particularly after the Sadr City revolt and the assault on Fallujah; and the US military starts denying SSI's engineers access to military bases. What's more, most Western clients won't take Iraqis seriously, and sales have grown beyond Tyler's capacity. They need another Westerner. SSI briefly hires a friend of Tyler's, but Baghdad is too much for him. One day, Tyler mentions on his blog that he needs a technically skilled Westerner who can handle an extreme environment. Among his readers is Ryan Lackey.

- - -

San Luis Obispo, July 2004. Late one night, Ryan stops his car here, in Tyler's hometown, opens his laptop, connects it to Sprint's network, and caps their months-long email and instant-messaging conversation with an brief IM: he'll take the job.

Ryan is viscerally aware of the risks. He went to high school with Nicholas Berg, the American network engineer beheaded by insurgents only two months earlier. He is led to Iraq by what he calls the "dark calculus" of risk arbitrage; in his judgement, while the perceived risk of working in Iraq has caused prices to rocket, it is still possible to operate without much personal risk. And Ryan is used to intense environments. He dropped out of MIT at age 19 to work at a startup in Anguilla. Two years later he moved to Sealand, an offshore oil rig that claimed independent sovereignty, and cofounded a data haven theoretically beyond the reach of any nation's laws. Ryan is a libertarian cipherpunk, gun aficionado, and free-market purist: the notion of Iraq as the new Wild West, untrammeled by laws and regulations, appeals to him greatly.

By the time he arrives in Baghdad, SSI has outgrown their first house and moved to a walled compound. By now the company numbers about eighty, including a dozen engineers. Ryan moves in. He sells to Western clients, and increasingly is sent with teams of engineers to American military bases; he has no ID whatsoever, but his passport and American accent always gets them through the gate. But Ryan isn't adopted into the SSI family. He oozes ambition and technical skill, but he isn't a people person. Laconic, iconoclastic, brilliant and contemptuous of anyone who is not, he wants to make money, build systems, and grow the business, not train Iraqi engineers or build a community. He is impressed by what Tyler has done, calling him, "probably the best Westerner who's ever managed Iraqis," but he has no interest in doing the same. He does not fit in.

Meanwhile, the insurgency gets steadily worse. Mohammed, one of Tyler's engineers, receives a death threat signed in blood for allegedly working with the Americans. Two other employees are carjacked by an organized ring of car thieves, and SSI has to pay thousands to get their vehicle back. Then Mohammed is kidnapped by insurgents while driving back from LSA Anaconda. Incredibly, Mohammed manages to beat his guard to death with his own AK-47, escape, hitch a ride back to SSI, and stagger shaking and bloody back into the office – just in time for the insurgents, who don't know their captive has escaped, to call and demand his ransom.

August 2004. Tyler and Jayme are married in an Iraqi Catholic ceremony attended by all of SSI. The subsequent party features copious celebratory gunfire. Shortly afterwards, they travel back to the USA for a month-long vacation. Ryan is meant to step into Tyler's shoes while he's away.

One month later, when Tyler and Jayme return, Baghdad is locked down. It isn't safe to go to the Green Zone. It isn't safe to go to the shop around the corner. They are effectively under house arrest, with direct orders from SSI not to leave the compound for any reason short of an emergency.

- - -

September 2004. As the sun sets, Ryan drives back to Baghdad from a job on LSA Anaconda, with two SSI engineers – and no guards. They have to stop for gas on a stretch of road that the US military seems unable to secure, famous for mujahedeen attacks. The gas station is a concrete hut next to a pump. The power is out. Ryan waits, knowing that if any passerby calls his location in to the insurgents, they will be there in minutes. Power eventually returns, the car is refuelled, they continue on – and reach a roadblock with no American supervision, which Ryan believes is a false checkpoint run by insurgents. He huddles in the back of the car, clutching his Browning pistol, ready to try to shoot his way out rather than be taken hostage. They are waved through without inspection. Then the engineers decide to get food, meaning they stop on a busy Baghdad street and wait in the open for 15 nervewracking minutes.

Not long after this experience, Ryan spends a day flying around Iraq in an air ambulance helicopter, installing satellite dishes at five different locations. When they return to Anaconda, the Marine Corps captain who accompanied him offers him a tent to stay in, indefinitely, in exchange for technical support. The US military is rife with these unofficial exchanges of services, widely known as "drug deals"; agreements which, while technically against regulations, bypass the months and reams of paperwork that would be necessary to do them officially. Ryan spends two months living in this tent. He barely sees the SSI compound again.

- - -

October 2004. Tyler and Jayme reluctantly accept that they can no longer safely stay in Baghdad. They move north to Arbil, in relatively free and safe Kurdistan. The departure is wrenching. They are leaving friendships forged by the searing intensity of a year's mutual struggle, and they don't know when, if ever, they might return. Weeks later, insurgents bomb the al-Jazeera headquarters in Baghdad, and Hassan, one of SSI's engineers, the man who chauffered Tyler and Jayme on their wedding day, is killed in the blast. Tyler is devastated. His team, his family, has been struck by tragedy, and he can't be there for them.

In November, Ryan officially leaves SSI. According to Ryan, "It was clear, with the security situation, that there was no way we could continue to operate in the way we were operating." He says, since he was living on Anaconda rather than at SSI, and doing satellite installs rather than sales, while being paid on commission, there was no point in continuing as an employee. Tyler says Ryan alienated the staff, treated the Iraqi engineers badly, and was about to be fired when he left. One thing everyone agrees on is that his exit was for the best.

With Ryan gone, and Tyler in Arbil, SSI is effectively shut out of the military market. Despite a theoretical "buy Iraqi" policy, it is impossible to get Iraqi engineers onto bases. Ryan finds himself living on an American military base, with a few important contacts, a lot of technical knowhow, a large prepaid contract that eliminated any need for startup funding – and a technical advantage over every competitor.

- - -

If you want to call Ryan Lackey in his trailer in Iraq today, you dial a Virginia phone number. The 703 area code just means that it's Virginia where the sound of your voice is packetized into VOIP and shipped via fiber to London, where Blue Iraq's teleport operator is located. This company pops your voice packets off the Internet, encodes them for satellite transmission, and beams them as 14 GHz radio waves from a five-metre dish to a Greek satellite. The signal bounces down to Ryan's own 1.2-metre iDirect dish, on a table weighed down with sandbags just behind his trailer. The iDirect system, robust enough to handle Iraq's extreme heat, dust, and wind, converts the signal back to IP packets and outputs them via Ethernet to Ryan's VOIP phone.

If you talk to Ryan, the conversation will be scratchy, and you'll be aware of a half-second delay, but the amazing thing is that you can talk to him at all. iDirect, the latest generation of VSAT technology, can be difficult to set up, which is why his competitors use older Hughes or Tachyon technology, but it is the first that can manage usable VOIP. When you compare the price Ryan charges – circa $1,000 per month for 1 megabit download and 384 kilobit upload, plus 1-5 cents per minute for prioritized VOIP traffic, for a dish generally shared by 20-30 people – to the dollars-per-minute price of an analog satellite telephone, it's easy to see where Blue Iraq's customers come from.

At its peak, SSI had nearly a hundred employees. Blue Iraq has three, and almost no overhead. They pay no rent for their trailer on Anaconda. They eat for free at military dining facilities, which on Anaconda serve good food prepared by a horde of Halliburton-managed "TCNs" – Third Country Nationals, mostly Filipino and Sri Lankan.

That doesn't mean business is easy. The technical problems are trivial; the logistical problems are crippling. Ryan has to to buy hardware remotely, have it shipped to Anaconda, and then get it to the customer. His clients are official military facilities, private DoD contractors, or units of troops who have all chipped in to pay for their own Internet access. If, as is often the case, they are stationed at one of Iraq's dozens of other American military bases, he flies there on a Blackhawk.

- - -

To book space on a Blackhawk from LSA Anaconda, you flash your DoD ID card and sign up at the space-available tent. There are daily shuttle flights to and from most of the scores of US military bases in Iraq. At your appointed hour, a minibus takes you out to the flight line, where dozens of aircraft await.

Inside the helicopter, there isn't quite enough room to stand. The door gunners sit on padded seats behind the cockpit. Machine guns are mounted on flexible arms in the open windows before them. Everything is painted black. Behind the door gunners are three forward-facing seats; behind them, two facing five-seat benches. The seats are canvas and metal pipe. The safety buckle is circular, with apertures for the belt and two shoulder straps; to release, you twist its propellor-shaped top.

Earplugs are distributed. The aircrew slide shut the windowed side doors and power up the engine. The rotors start to turn. They are like fifteen-foot knife blades with the sharp edge away from the rotation direction, the last foot or so bent back about thirty degrees, forming a vaguely swastika shape. Taxi out onto the runway, and up you go, as if in an elevator, in sync with the other Blackhawk next to you – they almost always travel in buddy-system pairs. The ground falls away. But not too far. Blackhawks fly about 100 feet above the ground, at circa 200 miles per hour.

The area outside Anaconda is much greener, a patchwork of farming fields fissured with canals and pocked with clusters of palm trees. Then villages, big L-shaped concrete blocks and crude brick buildings with thatch/mud roofs. Roads, smooth and modern, well-trafficked. Herds of goats flee from the helicopter noise. Lots of people wave; some keep their arms lowered and stare; some just ignore the noise. There are wide muddy rivers, vast barren brown patches, more roads, towns, farmland. At night, you can see street lights in the larger towns, fluorescent tubes mounted on hockey-stick-shaped poles. The door gunners occasionally drop stuffed animals from their windows, part of a hearts-and-minds initiative.

It's a remarkably smooth ride. The whole aircraft vibrates, but it's a soothing white-noise vibration rather than anything jarring. The journey is exhilirating, landscape zooming past and disappearing under you, like a dream of flying. As commutes go, it can't be beat.

But Blackhawk flights are risky. Passengers are required to wear helmets and body armor. There are a few Forward Operating Bases that space-a flights do not go to; Ryan has to ride to them on convoys, which is even riskier. Then, when the dish is installed and functional, after the paperwork is finally processed and Blue Iraq is paid, Ryan has to hitch a ride to Dubai on cargo planes with unpredictable schedules, and physically carry a large wad of cash into his bank.

Business as usual, it's not. But it suits Ryan. He doesn't plan to ever move back to the USA, except possibly to finish his MIT degree. He is full of ambitions. He wants to build a mobile phone network for Anaconda. If Iraq stabilizes, he would like to build its first ATM network. If not, Blue Iraq has plenty of room for expansion, into Afghanistan and, as he says with a bleak grin, "other markets that the US military opens up for us." He doubts those markets will be saturated any time soon.

- - -

Tyler and Jayme left Iraq in May 2005. The Arbil office failed; there wasn't enough business in Kurdistan. They moved to London, where Tyler still works for SSI. His time in Iraq has transformed him to the extent that, like Ryan, he doesn't think he can ever move back to the USA. His years of living hyperintensely, carrying a gun, building an organization from scratch in a war zone, have distanced him from his home. His friends seem to him to have stagnated. Their concerns seem trivial. And living with real, known, tangible danger has bred contempt for what he calls America's "culture of fear."

- - -

One of the few things Ryan and Tyler agree on is their scorn for America's attempt to secure and rebuild Iraq. Tyler rages that the US military "couldn't bother to protect" the road between Baghdad and Anaconda, or even the four-kilometre stretch between Baghdad International and the Green Zone. And he found that when most other Americans dealt with Iraqis, "they were very insulting, they were often very condescending, and in many cases I felt that they treated them like subhumans."

Both of them lament the sorry state of the electrical system. "Not having power was probably the single biggest problem that created animosity among Iraqis," Ryan says. "The US tried to rebuild it in the Western industrialized-country model. The way Iraqis install a power system is, they put a bunch of small generators on neighbourhood blocks, with power cables running to everyone's house, and just sell them access directly. And it's easy to have a market-driven pricing mechanism. But the US solution was to give large US companies business here … If they'd had electricity working within a month or two of the invasion, there probably wouldn't have been near as much violence."

Iraqis desperately want to work. "You don't see people begging for money. You see people selling gas for money, selling cigarettes by the side of the road," Ryan says. Tyler agrees: "I interviewed a lot of people, and I never met one that wasn't so painfully eager it almost hurt to turn them away." But their economy remains paralyzed.

"The best way to deal with terrorism in the long run is to fix the underlying conditions that create terrorism," Ryan says. "It's difficult to fix their ideology, but it's easy to fix their infrastructure. But the US has done a bad job … It's like a feedback loop. They got on the wrong side of the feedback loop." Iraqi frustration breeds insurgents; insurgent violence cripples reconstruction efforts; and the resulting lack of power, communications, finances, and jobs breeds more frustration.

In the face of this feedback loop, American forces have withdrawn into heavily guarded enclaves. SSI's modern, globalized, best-of-both-worlds strategy, bringing Americans and Iraqis together to help rebuild the shattered country, has faltered. Blue Iraq's neo-colonial approach, living and working exclusively on military bases, continues to thrive. The seeds Tyler has helped to plant – a team of crack engineers still erecting dishes around the country – may someday help drag Iraq into the 21st century, one satellite link at a time. But not until the rain of insurgent bombs and bullets has ended. And neither Ryan nor Tyler expects that to happen for years.

Bill Moyers’ “Buying the War” Exposes the Media’s Failure to do Their Job.
Joanne Ostrow

In some quarters, this week is set aside as “turn off your TV week.”Beyond the fact that it’s a silly enterprise - Pick and choose, people! Pick and choose! - there is one important offering on the nonfiction front that should not be missed.

If we could retroactively pull the plug, say during the saturation coverage of the Anna Nicole Smith saga, that might have been a good week to skip the tube.

But - do-gooders take note - this week a devastating 90-minute documentary should be required viewing. This is the kind of work television can do brilliantly when given time and resources and the talents of a questioner like Bill Moyers.

A point-by-point explanation of how the media failed the public en route to the war in Iraq is carefully assembled and patiently related Wednesday by Moyers on PBS.

“Bill Moyers Journal,” at 8 p.m. Wednesday on KRMA-Channel 6, presents “Buying the War,” an eye-opening view of how the mainstream press got things exactly wrong in the ramp-up to the 2003 invasion of Iraq.

The passing of unchecked information, the fear of appearing unpatriotic in the wake of 9/11, the readiness to join the drumbeat of misinformation about weapons of mass destruction and the willingness of the rest of the media to follow The New York Times - all contributed to the media buying in and failing to help readers and viewers separate fact from propaganda.

Dan Rather, formerly of CBS, tells Moyers, “I don’t think there is any excuse for my performance and the performance of the press in general in the roll-up to the war. Overall … there’s no question that we didn’t do a good job.”

Tim Russert of NBC’s “Meet the Press” has a tougher time admitting complicity, or allowing that his influential program was used by the administration. Russert says he simply followed the lead of the front-page story of The New York Times. Vice President Dick Cheney and Secretary of State Condoleezza Rice went on the Sunday-morning shows and cited the infamous “smoking gun as mushroom cloud” story, which they gave the Times.

Bob Simon of CBS’s “60 Minutes” sums up that performance: “Remarkable. You leak a story, and then you quote the story.”

As in so many phases of the administration’s marketing of the war, the media simply stood by.

Walter Isaacson, former president of CNN, says, “Especially right after 9/11. Especially when the war in Afghanistan is going on. There was a real sense that you don’t get that critical of a government that’s leading us in war time.”

A particularly embarrassing news conference with President Bush two weeks before he ordered the country to war demonstrates the passive state of the press at the time.

“At least a dozen times during this press conference he will invoke 9/11 and Al-Qaeda to justify a pre-emptive attack on a country that has not attacked America,” Moyers narrates.

The president calls on reporters designated by his staff. The questions are friendly to the point of puffy. The press corps wouldn’t awaken until after Hurricane Katrina. They knew the war was going to happen, so they got out of the way.

The work of an investigative team from Knight Ridder newspapers (acquired by The McClatchy Co. last year) is singled out as a rare example of healthy, skeptical reporting. Yet while almost all the Bush claims about WMD would prove to be false, the story citing “lack of hard evidence of Iraqi weapons” got little play.

Among the cheerleaders for the war who refused to talk to Moyers for this report are (no surprises here) columnist Thomas Friedman of The New York Times, conservative pundit William Kristol of The Weekly Standard, president of Fox News and former Nixon and Reagan strategist Roger Ailes, Washington Post columnist and Fox news commentator Charles Krauthammer, New York Times reporter Judith Miller, and Times political columnist William Safire.

It’s easy to campaign in favor of turning off the television. The bumper sticker “Kill your TV” is ever popular. But if more of us were better informed, as this documentary makes painfully clear, the world outside the box would be a better place.

Members of the media will be parsing this historic lapse for years to come, trying to explain how the watchdogs dozed.

Journalism students everywhere should watch and take notes.

Yale Backs off Ban on Weapons in Plays; Audience Will be Notified
Dave Collins

A week after a Yale University official banned prop weapons from school plays in response to the Virginia Tech killings, the Ivy League school has reversed course and said audiences will be notified in advance of the use of fake guns, swords and knives.

The university released a statement Monday, following complaints that Yale was censoring the arts and reacting inappropriately to the April 16 massacre that left 33 people dead.

"As part of our long-standing policy regarding the use of weapons in undergraduate student theatrical productions, the use of real or facsimile weapons has been permitted on a case-by-case basis, with the approval of the dean of students' office," Helaine Klasky, director of public affairs, said in the statement.

"Effective immediately, when a weapon or facsimile is being used, the audience will be appropriately notified in advance," she said.

The issue arose last week when Dean of Student Affairs Betty Trachtenberg informed two student directors that they could not use facsimile weapons in their plays.

"Given the events of a few days ago in Virginia I question, at this time, the use of even a prop hand gun in this (or other productions). I suggest that you find another way," Trachtenberg wrote in an e-mail to Yale sophomore Leah Franqui and others on April 18.

Franqui, 19, is directing "Accidental Death of an Anarchist," which begins on Friday. The satire by Nobel Prize for literature winner Dario Fo is about a police investigation of a bank bombing in Milan, Italy.

Franqui said she had to scrap plans to rent a prop gun for a minor scene in the play.

"I don't have problems in terms of the integrity of my show," the Philadelphia resident said. "But I think it's really terrible in general. It's censoring the arts. It's a completely empty gesture."

Franqui said the scene with the gun has been rewritten to make fun of the university's ban. She said a police officer who takes another hostage and tries to grab his gun is surprised when he can't find it.

"Where's the gun, Josh," the officer asks.

"Didn't you hear? We're not allowed to have one," the other responds.

Telephone and e-mails seeking comment were left Monday with Trachtenberg and Yale President Richard Levin.

Sarah Holdren, a 21-year-old junior majoring in theater studies, directed "Red Noses" last week and learned a few hours before the play opened Thursday that weapons were not allowed.

The play, set in the Middle Ages and featuring several sword fights, tells the story of a group of clowns that brings hope to people suffering during the time of the Black Plague.

Holdren said she met with Trachtenberg before the play began and received permission to use "very fake-looking" wooden swords, instead of metal ones.

"Basically we got to use toys," said Holdren, from Greenwood, Va., about 40 minutes from Virginia Tech. "I resent much less the last-minute changes we had to make rather than the reasoning behind the decision.

"I think attempting to cover up issues of violence in the real world by censoring art is fundamentally wrong," she said. "Especially at a time like this, art and theater have the potential to help so many people and to get them through these very dark situations."

Holdren gave an opening statement to the audience before the play, criticizing Yale for its censorship and telling the crowd that "Red Noses" was about hope, joy and fellowship.

Holdren said that while she has only compassion and sympathy for the Virginia Tech community, she is protesting "the careless manner" in which Yale reacted.

She said it is appropriate that Yale has backed away from banning weapons on stage.

"I hope that this change in the policy heralds further changes and that we can get back to a relative state of artistic freedom," Holdren said.

Russell Simmons: Ban 3 Epithets Consistently in Clean Music

Offensive words often are scrubbed out of rap songs in so-called clean versions, but there is no uniform standard for deleting such words, according to hip-hop mogul Russell Simmons.

Suggesting a start toward creating a standard, Simmons said Monday that the recording and broadcast industries should consistently ban three racial and sexist epithets from all clean versions of rap songs and the airwaves.

Such epithets are currently banned from most clean versions, but record companies sometimes "arbitrarily" decide which offensive words to exclude, Simmons said.

The recommendations drew mixed reaction and came two weeks after some began carping anew about rap lyrics after radio personality Don Imus was fired by CBS Radio and NBC for referring to the players on the Rutgers University women's basketball team as "nappy-headed hos."

Expressing concern about the "growing public outrage" over the use of such words in rap lyrics, Simmons said the words "bitch," "ho" and "nigger" should be considered "extreme curse words."

"We recommend (they're) always out," Simmons, the pioneering entrepreneur who made millions of dollars as he helped shape hip-hop culture, said in an interview Monday. "This is a first step. It's a clear message and a consistency that we want the industry to accept for more corporate social responsibility."

Last week, Simmons called a private meeting of influential music industry executives to discuss the issue. However, no music executives were associated with Monday's announcement by Simmons' Hip-Hop Summit Action Network.

Telephone calls by The Associated Press to Sony Music, Universal Music Group and Atlantic Records were not immediately returned Monday. The Recording Industry Association of America and Warner Music Group declined to comment.

Reaction to the announcement was mixed.

Bakari Kitwana, who has written about rap in books such as "Why White Kids Love Hip-Hop," said it was a step in the right direction. Kitwana said there needed to be uniformity in removing obscenities from music. He pointed out that in some songs curse words are replaced with clean words, while in others, epithets and curse words are merely covered up by silence, allowing listeners to infer from context the edited words.

"It shows that people in the industry are realizing that the pendulum is swinging and that there's a national conversation that they don't want to be on the wrong side of," Kitwana said of the recommendations. "This is further along than we could have expected them to go 10 years ago. But there has to be more. I think they can do more around the question of content."

Writer Joan Morgan said the announcement amounted to "absolutely nothing." She called the recommendations "shortsighted at best and disingenuous at worst." They were, she said, an "anemic, insufficient response" that failed to address homophobia and other issues in certain strains of hip-hop culture and rap music.

Morgan, author of "When Chickenheads Come Home to Roost: A Hip-Hop Feminist Breaks It Down," said calling for the removal of the three epithets assumes "all of the violence, misogyny and sexism in hip-hop is only expressed in" those words.

"It says, 'Let's take the responsibility away from people creating the content and put it back on the corporations,'" said Morgan.

The recommendations also included forums to foster dialogue among entertainers, hip-hop fans and executives and the creation of a mentoring program for entertainers. Another recommendation called for the establishment of a coalition of music, radio and television executives to advise those industries on "lyrical and visual standards."

The announcement cautioned against violating free-speech rights but said that freedom of expression comes with responsibility.

"Our discussions are about the corporate social responsibility of the industry to voluntarily show respect to African-Americans and other people of color, African-American women and to all women in lyrics and images," read a joint statement from Simmons and Benjamin Chavis, the network's executive director.

NYC Radio Hosts Suspended for Racially Charged Segment

Still recovering from the Don Imus scandal, CBS Radio suspended two local hosts after they twice broadcast a racially charged prank call that targeted employees at a Chinese restaurant.

The hosts of the daily morning show, WFNY-FM's "The Dog House With JV and Elvis," have been suspended indefinitely without pay, CBS Radio spokeswoman Karen Mateo told The New York Times in an e-mail Monday. One of the hosts, Jeff Vandergrift, apologized on Monday's show, she said.

Local chapters of the Organization of Chinese Americans, an advocacy group, released a statement Sunday protesting the segment. By Monday, California State Sen. Leland Yee and others joined the campaign.

In the segment, broadcast on April 5 and again last week, a caller to a Chinese restaurant intersperses an order for takeout with lewd language and racial slurs.

The caller tells one female employee he wants to come to the restaurant to see her naked and refers to a part of her body as "hot, Asian, spicy."

The caller attempts to order "shrimp flied lice" and refers to a male employee as "Chinese man" before claiming himself to be a student of kung fu.

At one point he refers to a part of the employee's body as a "tiny egg roll."

The show's hosts, Vandergrift and Dan Lay, have been campaigning online and on the air in support of Imus since his firing for making sexist and racist comments about the Rutgers University women's basketball team.

There was no telephone listing for Vandergrift in the New York metropolitan area. A call late Monday to a Daniel Lay in New York City was not immediately returned.

A CBS Radio spokeswoman did not immediately respond to telephone and e-mail messages from The Associated Press late Monday.

Community advocates pushed for CBS to fire the hosts of the show, which can be heard only in the New York City area and on the Internet.

"If they don't fire the DJ's, it will be a double standard," said Vicki Shu Smolin, president of the New York City chapter of the Organization of Chinese Americans.

Under Fire, an Actor Lashes Back With a Plan
Alessandra Stanley

The fate of “30 Rock” looks dire. Alec Baldwin said on “The View” yesterday that he wanted to quit that NBC sitcom to write a book about “parental alienation.”

For the good of viewers — and readers — Mr. Baldwin must not leave the show.

His performance yesterday suggests that he may need some persuading to stay with the sitcom, in which he is brilliant, and away from talk show couches, where he is anything but.

It’s certainly in the best interest of the child. As bad as all the publicity over her father’s ranting voice-mail message must be for 11-year-old Ireland, she will have to live it all over again if her father quits show business. The book reviews — let alone the stand-up comedy routines — would surely inflict even more emotional damage.

Mr. Baldwin told Barbara Walters and Rosie O’Donnell that he wanted to devote his life to exposing the injustices perpetrated on divorced dads, and that he hoped to publish a book this fall on divorce litigation. Mr. Baldwin’s long-winded, self-obsessed soliloquy on his usurped rights as a father and the fiendish acts of his ex-wife, Kim Basinger, was so impassioned that Ms. Walters had to remind him that his first concern should be his relationship with Ireland. (When he mentioned his daughter, it was to make a point about her mother’s perfidy.)

He was looking to persuade but was mostly painful to watch — a little like Captain Queeg melting down on the witness stand in “The Caine Mutiny.”

And Mr. Baldwin added more fuel to his pyre by lashing out at the celebrity gossip industry, including the journalist who first distributed the phone message, whom he did not identify by name. “Everybody who works in tabloid media are people who are filled with self-hatred and shame,” he said. “And the way that they manage those feelings is that they destroy the lives of other people and reveal your secrets.”

He has a reason to feel ill-used by the press, of course. His hectoring message and the words he used — “thoughtless little pig” — unleashed an almost Don Imus-size national debate over his behavior. Some people want Mr. Baldwin in irons; others wonder how and why on earth his phone message for Ireland found its way to the public. Mr. Baldwin began his interview by saying, “I got a huge bouquet of flowers from Don Imus.”

Ms. Walters looked startled. “Did you really?” she asked. He said he was joking.

If NBC has to gin up an intemperate fathers’ solidarity drive to keep him on the show, so be it. After yesterday’s appearance, Mr. Baldwin may require something along the lines of the scene in “Spartacus,” when the Roman commander demands to know which of a horde of rebel slaves is their leader, and one, two and then all of the slaves step forward, saying, “I am Spartacus.” Perhaps all parents could call their children’s cellphones and simultaneously holler something mean and borderline abusive.

Mr. Baldwin’s defense was unfortunate, and so was his timing. This is not a good moment for middle-aged actors to act out. Richard Gere is a wanted man in India after showering the Bollywood star Shilpa Shetty with kisses at an AIDS awareness rally in New Delhi; Indians frown on public displays of affection. Hugh Grant was arrested in London for throwing a tub of baked beans at a photographer.

Mr. Baldwin, who is known in The New York Post as “the Bloviator,” is not as winning in speeches and on talk shows as Mr. Gere or Mr. Grant.

But Mr. Baldwin’s career matters more, and not just because he neither publicly offended cultural sensibilities (this time) nor physically injured anyone (this time). He is a gifted actor who at the moment is peerlessly funny as Jack Donaghy, a silky-smooth, loony NBC executive in charge of a sketch comedy show.

The show was created by the former “Saturday Night Live” head writer and star Tina Fey, who also plays the fictional show’s head writer, Liz Lemon. The writing is sharp and funny, and so is the cast. But Mr. Baldwin steals every scene and has turned “30 Rock” into one of the best comedies on television. In Thursday’s season finale, which included his fiancée, Phoebe (Emily Mortimer), an art dealer who says she suffers from avian bone syndrome and cannot be touched, Jack is so stressed that he has a mild heart attack.

On his hospital bed he tells Liz that in a near-death moment, he saw his life flash before his eyes.

“In all the time I’ve been on this earth, I have only one regret,” Jack tells her. “I should have worked more.”

NBC Believes They Own Political Discourse, They Are Shameful and Wrong
Kevin Bondelli

Buzz Machine has really been on top of the BS that is MSNBC’s strangle-hold on the Presidential Primary Debates.

For shame, NBC News: Stealing the debate


(The following rules apply to all media organizations that are not part of NBC)

News organizations, including radio, network television, cable television and local television may use excerpts of “The South Carolina Democratic Candidates Debate” subject to the following restrictions (internet use is not permitted):

1. An unobstructed onscreen credit “MSNBC” must appear during each debate excerpt and remain on screen for the entire excerpt.

2. Each debate excerpt must be introduced with an audio credit to MSNBC.

3. No excerpt may air in any medium until the live debate concludes at 8:30 pm ET.

4. No more than a combined total of 2 minutes of excerpts may be chosen for use during the period from the end of the live debate (8:30 pm ET) until 1:00 am ET on Friday, April 27. After 1:00 am ET, Friday, April 27, a total of 10 minutes may be selected (including any excerpts aired before 1:00AM). The selected excerpts may air as often as desired but the total of excerpts chosen may not exceed the limits outlined.

5. No excerpts may be aired after 8:30 pm on Saturday, May 26th. Excerpts may not be archived. Any further use of excerpts is by express permission of MSNBC only.

6. All debate excerpts must be taped directly from MSNBC’s cablecast or obtained directly from MSNBC and may not be obtained from other sources, such as satellite or other forms of transmission. No portions of the live event not aired by MSNBC may be used.

A feed of MSNBC’s telecast of the debate will be provided (details below), additionally limited audio/video mults will be available on site in the media center.

Advice for MSNBC

If MSNBC had any sense, which it doesn’t, it would have taken every one-minute answer from last night’s ping-pong debate and put them up on YouTube themselves. Then, today, we’d be able to watch each one without feeling as if we were trying to count cars on a speeding train. And, more important, we’d be able to comment on them and embed them in our blogs. We’d see which clips are the most popular, the most talked about. We’d get a new sense of what the electorate thinks, which itself would be news. If NBC also made the video files available, we’d see the post-debate commentary not from the same old made-up faces on the networks but from the people who matter, the voters: us. MSNBC would be part of the conversation, in the thick of it, which is exactly where it should want to be. Instead, the network is acting like the bratty and unpopular rich kid who takes him marbles and harumphs home, ruining the game for everyone.

So not only are MSNBC’s draconian usage rules preventing interested American’s from becoming involved in our democracy’s most important decision, it is not even a smart business move.

What bothers me the most is that MSNBC is a cable network channel, which means that only cable subscribers were able to watch the debate. That seems inherently unfair to me. It isn’t like they immediately put the entire debate on the MSNBC website for people to watch, so by the time anyone is going to see any part of the debate they are going to have heard from pundits galore about what they should think about it.

Give me a break. The fact that a corporation owns and monopolizes an important piece of the process of electing a President is un-American. They are much more willing to spread Cho Seung-Hui’s message to the vast majority of the American people than the messages of our Presidential candidates. Then again NBC did get to put their peacock on every frame of Cho’s school shooter recruitment video. Very al-jazeera of them.

Shame on you NBC, you do not own public discourse in this country, the American people do.

We must be free not because we claim freedom, but because we practice it. ~William Faulkner

Hi-Def Over Freeview? The BBC Has a Cunning Plan
Ian Morris

Now the era of the flat panel has arrived, we're all falling in love with high-definition video. We've got games consoles, HD DVD and Blu-ray and some patchy TV services from the likes of Sky and Virgin Media. The problem is that Freeview has never been seen as a viable platform for high definition, because bandwidth is severely limited. What little space there is appears to be stuffed to the brim with cheap shopping channels.

So if we want hi-def via Freeview, what do we do that doesn't involve storming bid-up tv and forcing it off the air? The BBC thinks it has a peaceful solution. Auntie's R&D boffins have published a white paper in which they claim it's possible to double the available bandwidth by using some clever technologies. Doubling the space would mean we could easily have HD channels on Freeview, although everyone would need to buy a new receiver and aerial to pick them up.

So how does it work? Well, Crave skipped some important physics lessons at school, but we've got the gist of it. Pay attention, here comes the science part: the signals are spatially multiplexed. Multiplexing isn't really new, and indeed it's already used in digital television for transmitting multiple channels on one frequency. These channels are multiplexed together into one stream of data, transmitted and then at the receiver they're de-multiplexed and viewed as separate channels.

Spatial multiplexing allows you to send two bitstreams on one frequency. It works by sending the signals at different times. This means in addition to packing several channels into a bitstream, you can pack two bitstreams into one frequency. As long as the receiver can tell which one is which, it will be able to decode them into two separate bitstreams and from there decode them into the various channels.

The key to all this is something called MIMO, which stands for multiple-input multiple-output. MIMO works using two transmitters, and two receivers. The two transmitters mean the two sets of data -- sent on the same frequency -- will arrive at the receivers at different times. Different arrival times are what allow the receiver to differentiate between the two separate signals and subsequently decode them. The process is further assisted using polarisation. One bitstream is sent horizontally polarised, the other is vertically polarised -- this makes the difference between the two bitstreams more obvious to the decoder, and makes separating the two lots of data much easier.

The BBC has conducted a small-scale test of this technology and has found that it does indeed double the available bandwidth. With that much extra space available, transmitting hi-def over Freeview would be a real possibility. Of course, we could still storm the shopping channels and force them off the air -- it would be time and energy well spent.

It’s Not a Sequel, but It Might Seem Like One After the Ads
Michael Cieply

If the Walt Disney Company and its Pixar Animation Studios unit have their way, by the time “Ratatouille” is released on June 29, millions will have learned not only to pronounce the movie’s title — Pixar’s Web site insists on the somewhat un-French “rat-a-too-ee” — but to love the idea of a rodent in the kitchen.

But not without some extraordinary effort. Next Tuesday, Disney will unleash an unusual all-day television advertising campaign, culminating with a 90-second spot on “American Idol,” intended to drive viewers to a nine-and-a-half-minute clip from the film at disney.com.

In effect, the studio is promoting its promotion.

Such bravura is necessary in this case because Disney and Pixar have once again staked their fortunes on a big-budget film that is completely original in concept and execution at a time when ticket buyers have shown a growing preference for repeat performances of known commodities like “Spider-Man,” “Shrek” and Disney’s own “Pirates of the Caribbean.”

“It takes a lot more work,” Richard Cook, chairman of Walt Disney Studios, said of the effort to introduce original films. “The rewards can be unbelievable. But they’re clearly more difficult to market.”

That originality is a dying value on the blockbuster end of the movie business is no secret. In the last five years, only about 20 percent of the films with more than $200 million in domestic ticket sales were purely original in concept, rather than a sequel or an adaptation of some pre-existing material like “The Da Vinci Code.”

In the 1990s, originals accounted for more than twice that share, led by “Titanic,” which took in more than $600 million at the box office after its release in 1997.

Pixar and Disney have enviable name recognition among moviegoers compared with virtually any other studio. But when an original like “Ratatouille” costs roughly $100 million to make and perhaps half that to market in the United States alone, even they cannot trust viewers to show up without a painstaking introduction.

“Wonder takes time,” said Brad Bird, the movie’s director. “You don’t rush wonder. You have to coax the audience toward you a little bit.”

Born of an idea from the animator Jan Pinkava (“A Bug’s Life”) and others, “Ratatouille” is not only original but also a bit subtler than some of its Pixar predecessors. Without superheroes, as in Mr. Bird’s “Incredibles,” or talking toys, as in the “Toy Story” films, it is about a rat who wants to cook in a French restaurant that once had five stars, but has slipped a couple of notches.

The conceit brings with it something of an “ick” factor, Mr. Bird acknowledged. Yet he resisted calls during production to make the lead character, Remy, more human and less ratlike. And he predicted that even the whiff of aversion would become an asset in seeking attention in a crowded season.

“That ‘ick’ is something in our favor,” he said. “It makes the story more interesting.”

(Disney, for its part, has generally done well with rodents, from Mickey and Minnie Mouse through the creatures in “Cinderella” and the “Rescuers” films.)

“Ratatouille” has already appeared in a trailer, attached to “Cars” almost a year ago. And Mr. Bird helped produce an elaborate promotional video that circulated on the Web this spring, even as he scrambled to finish the film, which he took over two years ago from its original director, Mr. Pinkava.

As the release date nears, Disney will add ploys like a scratch-and-sniff book from Random House (“I Smell a Rat”) and a 10-city “Ratatouille Big Cheese Tour.”

Led by its founder, Steven Jobs, and its top officers, John Lasseter and Ed Catmull, Pixar has been ferocious in its insistence on originality through a cycle of hits that has included only one sequel, “Toy Story 2” in 1999. That policy led to a rift with its partner, Disney, which once planned its own follow-ups to Pixar films.

Disney finally backed off when it acquired Pixar last year. According to Mr. Cook, Pixar — which has agreed to make “Toy Story 3” — will now be in charge of its own sequels.

Devotion to freshness can have its price. Since the release of “Finding Nemo,” which had about $340 million in domestic ticket sales, each succeeding Pixar film, first “The Incredibles” in 2004, then “Cars” in 2006, has done less business than its predecessor.

In addition, the entertainment conglomerates that now own studios may only bring their full resources to bear on the second or third in a series of films. Next month, for instance, Disney will unveil a “massive multiplayer” online game keyed to its three “Pirates of the Caribbean” movies. This potentially lucrative enterprise took three years to develop, and would be far more difficult to build around a one-time success like “The Incredibles.”

“Branding is the word of the day and it will remain that way,” Russell Schwartz, president of New Line Cinema’s domestic marketing, said of the growing preference by audiences and the industry for known quantities.

Mr. Schwartz, whose own company had huge hits in recent years both with high-profile adaptations in the “Lord of the Rings” cycle and with an unexpected blockbuster from scratch in “The Wedding Crashers,” noted that executives would rather not depend on the latter sort of success. “There’s a zeitgeist about that kind of movie you can’t control,” he said.

The drift away from pure inventiveness is limited to the industry’s most expensive and commercial films. According to the Writers Guild of America, West, the balance between original and adapted scripts in overall feature film production has remained constant in recent years, with slightly more than half of the screenplays being original.

Old hands in the film business argue nonetheless that the industry cheats itself of something precious when it leaves the creation of its blockbuster bets to a graphic novelist like Frank Miller, whose work was behind this year’s “300,” or a distant predecessor, like the makers of the original “King Kong.”

“It’s tragic,” the screenwriter Bob Gale said of what he sees as Hollywood’s lost inventiveness. Missing, he said, is the nonpareil thrill he experienced in creating, with Robert Zemeckis, the early drafts of “Back to the Future,” a 1985 hit provoked by his own question: Would he have liked his own father if he had known him in high school?

Still, Mr. Bird confessed that pure invention can be “scary” even for those at Pixar. The director pointed, for instance, to a moment in “Ratatouille” when he felt compelled to forgo a climactic action sequence that was demanded by conventional movie logic, but that did not fit the story he and his peers had invented. “You have to let the movie be what it wants to be,” he said.

Yet that can be easier, he added, than trying to follow in the tracks of the audience. “When you just make something you want to see,” he said, “it becomes very simple.”

Sony to Launch Video-Sharing Network Friday

Sony Corp. said on Thursday it will launch a video-sharing site in Japan on Friday, marking the electronics and entertainment firm's first step towards challenging Google Inc.'s YouTube service.

News Corp. and NBC Universal said last month they would also launch a free online video site this year, as traditional media firms scramble to keep up with video sharing.

Sony also hopes to introduce its service, called eyeVio, abroad, but said it first wanted to gauge the reception at home before drawing up an overseas launch schedule.

"This is part of Sony's quiet software revolution," CEO Howard Stringer said at a news conference.

"It's an opportunity to transmit user-generated video anywhere you want to, anytime to anybody, in a protected environment," Stringer said.

Unlike YouTube, which has drawn criticism that it tolerates user piracy and faces a $1 billion lawsuit from Viacom Inc. alleging copyright violation, Sony said it would closely monitor content on the service.

Such a model would appeal to companies looking to release content and to protect their image, said Sony spokesman Takeshi Honma.

"We believe there's a need for a clean and safe place where companies can place their advertisements," Honma said.

Earlier this year Google agreed to display warnings on YouTube in Japanese telling users not to upload copyright materials. Last year it removed nearly 30,000 video files from the site at the request of Japanese media firms.

Users will also be able to select who can view their content, and for how long.

The site will be free to users, but spokesman Honma said Sony hoped it would eventually generate revenue through advertisements and tie-ups with media companies.

Shares in Sony closed up 0.9 percent at 6,460 yen, compared with a 1.12 percent rise in the Nikkei average.


Stephen Colbert Parodies on YouTube = Legal
Pete Cashmore

If you want to parody Stephen Colbert clips on YouTube, go right ahead: Viacom admitted today that it had made an error by pulling a parody clip during its YouTube cleansing, and the lawsuit against Viacom by the EFF was dropped.

Viacom used the DMCA to pull down more than 100,000 clips, but the Electronic Frontier Foundation complained that the takedown had included those clips that are allowed under fair use - including the Colbert parody. Viacom is also setting up an “email hotline” for those who have their clips pulled without merit. Viacom’s release today, meanwhile, was along the lines of “woulda been nice if you’d sent a letter before suing us”. (Essentially that the case wouldn’t have happened if the EFF had been more communicative beforehand.)

The parody is below - it’s pretty funny, and seems to be inspired by Outfoxed, the documentary that highlights the biases of Fox News. The Colbert Report, of course, is largely a parody of Fox News.

New tube

Modernity Drills Through Rock Toward an Alpine Hamlet
Mark Landler

Years from now, if Sarah Leitner ever wants to regale her children with stories about her daily walk to school, she will not have to embellish, even a little: this plucky 8-year-old must hike a mountain to get to her home in this remote Alpine valley.

True, there are 300 wooden steps winding up the steep slope. And her mother, Ursula, waits for her at the top, in a rusty, mud-spattered car that bears no license plates because it never sees a regular road.

The Leitners live in the Kaisertal, one of the last inhabited valleys in the Alps not connected by road to the outside world. In this isolated mountain settlement, food and fuel are carried in on an aerial ropeway. Its few vehicles were winched up the stairs many years ago, and are now stranded there, in an Arcadian landscape of fields and farmhouses, circled by jagged, snow-capped peaks.

For the 30 people who live in the Kaisertal, there has always been one way in and one way out: on foot.

Next March, however, work will be completed on a 2,690-foot tunnel through the mountain, and the valley’s splendid isolation will come to an abrupt end. It cannot end fast enough for Sarah Leitner.

“I’ll be really glad when the road comes,” she said the other day, trudging up the steps, her backpack bobbing like a buoy in a choppy sea. “Finally, my friends will be able to come visit me.”

The decision to build the tunnel was made after decades of dispute over whether to make the valley more accessible, and it is still arousing complex emotions among people in this gentle land of gingerbread houses and onion-domed churches near the German border.

Residents of the Kaisertal generally welcome the connection, citing the ease of shopping, going to a doctor or seeing a movie, without having to put on hiking boots and go on a wilderness walk.

But nature lovers who savor such pursuits say the tunnel will bring taxis and tourists, followed by real estate development — spoiling one of the last truly pristine valleys in the Tyrolean Alps.

To prevent that, Ebbs, the town that includes the Kaisertal, plans to limit access to residents, emergency vehicles and service people. It will issue them a plastic card, with an encoded chip, that will open a gate at the mouth of the tunnel, next to the town.

Over time, however, critics predict that the limitations on access will be relaxed, particularly as the economic incentives of opening up the valley to outside traffic become more tantalizing.

“This region is an El Dorado for people who live in Bavaria; they can drive here in an hour,” said Norbert Wolf, an environmentalist who has campaigned against the tunnel for years. “I’m very skeptical that this tunnel will only be used by the people who live there.”

Today, the 30 residents subsist on farming and running small guesthouses, which also sell beer and apple strudel to passing hikers. The valley’s population was once about 70, but it has dwindled as residents, particularly young ones, have left for opportunities in the outside world.

Josef Ritzer, the mayor of Ebbs, said the remainder would eventually have packed up, too. Showing visitors around the other day, he pointed to an abandoned Alpine house, clinging stubbornly to a hillside.

“Without the tunnel, the rest of the valley will end up like that,” Mr. Ritzer said. “We want people to stay, but to do that, we have to give them the same opportunities as people in the town.”

The project is budgeted at nearly $9 million, of which the province of Tyrol is kicking in roughly three-quarters. Austria specializes in highly engineered tunnels, and this one has its own marvels, including a 180-degree curve in the middle.

Workers are blasting a path through a ridge to connect the tunnel to a dirt road in the valley. Their jackhammers echo noisily off the mountains, something not lost on the project’s critics.

Mr. Wolf does not dispute that the residents needed something more convenient than a winding staircase. His solution would have been to replace the aerial ropeway — a rickety contraption — with a modern gondola that could have carried people as well as provisions.

He noted that other places thrive while banning private cars. The glamorous Swiss ski resort Zermatt, for example, requires visitors to park outside town and take a train or taxi the rest of the way.

In the Kaisertal, however, people have simpler desires. Ursula Leitner said she would like to be able to carry her groceries home, rather than putting them on the ropeway. She would like to go the annual ball in Ebbs without having to hike down with her shoes and gown in a bag.

More important, the family could get prompt access to medical treatment. Last fall, Sarah became violently ill with a stomach virus and had to hike down to a doctor. A group of walkers, not understanding the girl’s distress, poked fun at her as she and her parents hurried past.

There are longer-term drawbacks to life in the Kaisertal. Young people struggle to find spouses willing to move here. Failed relationships are common. Loneliness hangs in the thin mountain air.

Yet there is also romance and idealism to living in this Alpine version of Walden Pond. Neighbors take care of one another. Each Monday, they gather at one of the guesthouses to play cards.

It’s like one big family, though, as Josef Schwaighofer, 43, the owner of the guesthouse, notes, “None of the families is related.” Pausing, he adds with a twinkle, “that we know of.”

Mr. Schwaighofer, who grew up here, has never considered leaving. But he said fewer and fewer people appreciate the valley’s slow rhythm of life. For them, the tunnel is an escape hatch. “They want to get into town quickly,” he said with a hint of sadness. “Life today is getting faster and faster.”

Microsoft Admits Vista Failure

Actions speak louder than PR

Charlie Demerjian

WITH TWO OVERLAPPING events, Microsoft admitted what we have been saying all along, Vista, aka Windows Me Two (Me II), is a joke that no one wants.

It did two unprecedented things this week that frankly stunned us.

Dell announced that it would be offering XP again on home PCs. The second that Vista came out, Microsoft makes it very hard for you to sell anything other than Me II. It can't do this on the business side because it would be laughed out the door, but for the walking sheep class, well, you take what you are shovelled.

This is classic abusive monopoly behaviour, Microsoft wrote the modern book on it. It pulled all the major OEMs in by twisting their arms with the usual methods, and they again all fell into line. Never before has anyone backpedalled on this, to do so would earn you the wrath of Microsoft.

But Dell just did. This means that Me II sales are at least as bad as we think, the software and driver situation is just as miserable, and Dell had no choice but to buck the trend. If anyone thinks this is an act of atonement for foisting such a steaming pile on us, think again, it doesn't care about the consumer.

What happened is, the OEMs revolted in the background and forced Microsoft's hand. This is a big neon sign above Me II saying 'FAILURE'. Blink blink blink. OK, Me II won't fail, Microsoft has OEMs whipped and threatened into a corner, it will sell, but you can almost hear the defectors marching toward Linux. This is a watershed.

The other equally monumental Me II failure? Gates in China launching a $3 version of bundled XP. Why is this not altruism? Well, it goes back to piracy and how it helped enforce the MS monopoly. If you can easily pirate Windows, Linux has no price advantage, they both cost zero.

With Me II, Microsoft made it very hard to pirate. It is do-able, you can use the BIOS hack and probably a host of others, but the point is, it raised the bar enough so lots of people have to buy it. Want to bet that in a country with $100 average monthly salary, people aren't going to shell out $299 for Me II Broken Edition?

What did MS do? It dropped the price about 100x or so. I can't say this is unprecedented, when it made Office 2003 hard to pirate it had to backpedal with the student edition for about $150. This time though, things are much more desperate.

If you fit Microsoft's somewhat convoluted definition of poor, it still wants to lock you in, you might get rich enough to afford the full-priced stuff someday. It is at a dangerous crossroads, if its software bumps up the price of a computer by 100 per cent, people might look to alternatives.

That means no Me II DRM infection lock in, no mass migration to the newer Office obfuscated and patented file formats, and worse yet, people might utter the W word. Yes, you guessed it, 'why'. People might ask why it is sticking with the MS lock in, and at that point, it is in deep trouble.

So, it did the unthinkable, and dropped the price. I won't bother to hunt down all the exec quotes saying how people can't afford clean water would be overjoyed to sell kidneys to upgrade to the new version of Office, but they are out there. This was a sacred cow, and it is now hamburger backed up against the wall.

These two actions by Microsoft are proof of what I suggested three years ago. Microsoft has lost its ability to twist arms, and now it is going to die. It can't compete on level ground, so is left with backpedalling and discounts of almost 100 times.

What we are seeing is an unprecedented shift of power. It is also an unprecedented admission of failure. And the funniest part about the moves made? They are the wrong things to do. Microsoft is in deep trouble.

Macintosh and iPod Drive Apple
Laurie J. Flynn

Apple Inc. surpassed even the most optimistic forecasts for its usually tepid second quarter, delivering an 88 percent increase in profit on strong sales of Macintosh computers and iPod music players.

The company said on Wednesday that its profit rose to $770 million from $410 million in the comparable quarter last year. Apple sold 1.5 million Macs in the quarter, a record for the company.

In an interview, Steven P. Jobs, Apple’s chief executive, called the quarter a “blowout,” and noted that the strong sales and market share gains came even though the company had not made any major upgrades to its lines of portable and desktop computers.

“The Mac is clearly gaining market share, with sales growing 36 percent — more than three times the industry growth rate,” Mr. Jobs said. Overall personal computer sales increased only about 11 percent during the quarter, according to the market researcher IDC.

Apple’s strength was particularly notable in that it came during the quarter in which Microsoft finally released the long-awaited Vista version of its Windows operating system, an event that the PC industry was counting on to spur a wave of computer upgrades.

Mr. Jobs noted that Dell had recently returned an earlier version of Windows to its product line, which he said was an indication that demand for Vista had not been overwhelming.

Apple reported revenue of $5.26 billion, an increase of more than 20 percent over the $4.36 billion in the same period last year. Per-share profit increased to 87 cents from 47 cents.

On average, analysts were expecting earnings of 64 cents a share on sales of $5.17 billion for the quarter, according to a survey by Thomson Financial.

Apple executives said the company benefited from lower component costs, as well as surging demand for notebook computers. Of Apple’s total computer sales, 59 percent were notebooks.

The earnings report sent shares of Apple up more than 7 percent to $102.44 in after-hours trading on Wednesday, topping the $100 mark for the first time. The shares rose $2.11 to close at $95.35 in the regular trading session.

It was Apple’s profitability during the quarter that most impressed Wall Street analysts. Its gross profit margin reached 35.1 percent, up from 29.8 percent in the year-ago quarter. Company executives said it was the company’s most profitable second quarter ever. Sales typically slow in the second quarter as it comes between the holidays and buying for school in the fall.

“They’re defying the laws of gravity when it comes to profitability,” said Eugene A. Munster, an analyst at Piper Jaffray.

Peter Oppenheimer, Apple’s chief finance officer, told analysts +that he expected gross margins to decline during the third quarter, to about 32 percent. Apple tends to sell lower margin computers to school districts in the third quarter, and component prices are also expected to be higher, he said.

In the third quarter the company expects revenue to climb to about $5.1 billion and earnings to reach about 66 cents a share, slightly lower than analysts’ forecasts.

Mr. Munster said the appeal of the Macintosh was clearly expanding beyond its traditional niche. “There’s a global shift in how people see personal computers — for entertainment, creativity and good looks,” Mr. Munster said. “Apple has found that sweet spot, and with almost no competition.”

Apple said Mac sales accounted for 56 percent of revenue during the second quarter, with music-related products, including iPods and iTunes sales accounting for the other 44 percent.

Apple sold 10.5 million iPods during the quarter. Earlier this month the company said it had sold a total of 100 million iPods.

Apple had earlier said it was delaying the release of the next version of its Mac operating system, called Leopard, because it needed to divert resources to its iPhone project. The iPhone is scheduled to ship in late June, through an agreement with Cingular, and cost between $500 and $600. Mr. Oppenheimer said that because Apple planned to deliver periodic software enhancements to the iPhone, accounting rules would require it to book deferred revenue and costs and amortize both over a two-year period.

Apple said it ended the second quarter with $12.6 billion in cash.

Microsoft Reaps Vista's Dividends
Robert A. Guth

Microsoft Corp.'s 65% jump in fiscal third-quarter earnings and an upbeat forecast for the next year point to solid gains from the company's long-delayed Windows Vista operating system.

But a hefty chunk of the third-quarter revenue was deferred from the quarter ended in December, when the company issued coupons to personal-computer buyers that could be redeemed for Windows Vista this calendar year. Questions also remain about the impact of a recent accounting change, which could allow Microsoft to recognize revenue from the new operating system more quickly than in the past.

Russinovich: Malware Will Thrive, Even With Vista’s UAC
Ryan Naraine

Despite all the anti-malware roadblocks built into Windows Vista, a senior Microsoft official is lowering the security expectations, warning that viruses, password-stealing Trojans and rootkits will continue to thrive as malware authors adapt to the new operating system.

Mark Russinovich (right), technical fellow in Microsoft's Platform and Services Division, used the spotlight of the CanSecWest security conference in Vancouver to discuss the implementation of UAC (User Account Control) in Windows Vista and made it clear that the feature is not meant to be a security barrier.

"It's a best effort to raise the bar and stop malware from making changes to the operating system but it's not a security boundary," Russinovich said of UAC, the oft-criticized mechanism that requires that all users run without full admin rights.

In a straightforward assessment of the threat landscape in a Vista world, Russinovich described malware authors as ISVs that will code for a standard user environment.

"There is no guarantee that malware can't hijack the elevation process or compromise an elevated application," Russinovich said after providing a blow-by-blow description of how UAC works in tandem with Internet Explorer (with Protected Mode) to limit the damage from malicious files.

Even in a standard user world, he stressed that malware can still read all the user's data; can still hide with user-mode rootkits; and can still control which applications (anti-virus scanners) the user can access.

"We'll see malware developing its own elevation techniques," Russinovich said. He demonstrated a social engineering attack scenario where a fake elevation prompt can be used to trick users into clicking "allow" to give elevated rights to a malicious file.

He predicted a world where malware authors create programs that elevate rights to jump accounts and disable security or develop general and application-specific elevation hijacking.

"You will see malware spoofing over-the-shoulder credential prompt and even launching a medium integrity level process int he administrator's account," Russinovich said.

At this level, the malware author has access to all the administrators data and can inject itself into the admin's account (e.g. the Runkey) to use additional elevation techniques.

"The malware author will say, 'I can live in a Vista world without needing to take over the entire box'. They will end up thriving in the standard user environment, setting up botnets, grabbing your keystrokes," he declared.

Russinovich stressed that UAC's fundamental contribution is to make it possible (in most cases) to run as standard user to protect the system and other users on the system.

"Elevations are a convenience and not a security boundary," Russinovich reiterated, hinting that Windows will evolve further to promote the standard user concept with things like per-user installations and secure elevations.

Wi-Fi Startup Inks First U.S. ISP Deal
Jessica Mintz

In a big win for a little Wi-Fi startup called Fon, Time Warner Cable Inc. will let its home broadband customers turn their connections into public wireless hotspots, a practice shunned by most U.S. Internet service providers.

For Fon, which has forged similar agreements with ISPs across Europe, the deal will boost its credibility with U.S. consumers. For Time Warner Cable, which has 6.6 million broadband subscribers, the move could help protect the company from an exodus as free or cheap municipal wireless becomes more readily available.

Fon was founded in Spain in 2005 on the premise that people shouldn't have to pay twice -- once at home, then again in a coffee shop -- for Internet access. At first, the company offered software that let members, called Foneros, turn Wi-Fi routers into shared access points, but it took hours to get up and running.

In the fall of 2006, Fon, which counts Google Inc. and eBay Inc.'s Skype among its investors, started selling and sometimes giving away its own branded wireless router, called La Fonera. Since then, it has distributed about 370,000 of them worldwide.

La Fonera splits a Wi-Fi connection in two: an encrypted channel for the Fonero and a public one for neighbors or passers-by. Foneros can decide how much of their bandwidth to share with the public and can log on to any Fon router without charge. "Aliens," as Fon calls nonmembers, can register on a Web page and pay a modest $2 or $3 for 24 hours of access.

In the U.S., where it costs $10 for a day pass to use a T-Mobile HotSpot at a Starbucks, Fon's economics seem particularly appealing.

Joanna Rees, chief executive of Fon USA, said such rates at coffee shops, airports and hotels might work for a business person with an expense account but are too high for people who just want to quickly check e-mail, make a call on a Wi-Fi phone or play on a wireless video game device.

"They're extorting people," Rees said.

Starbucks Corp. and T-Mobile USA Inc. representatives responded that they provide a premium service, and that customers see value in paying for speed, security and reliability.

Fon has about 60,000 Foneros in the U.S. In February, the company launched "Fonbucks," a one-month router giveaway aimed at people who live above or next-door to a Starbucks. It was an amusing way to get more La Foneras into high-density areas, and it worked to the tune of 6,800 free routers.

But until now, ISPs in the U.S. have resisted the Fon model. Most big companies' end-user license agreements prohibit subscribers from sharing their connection outside the home or business. Verizon Communications Inc., for example, can terminate contracts if it finds an ad-hoc hotspot.

Those policies are antiquated and don't mesh with the reality of untold thousands of people using their neighbors' unsecured Wi-Fi connections, Rees argues.

"It's a dirty secret how much leeching" goes on, Rees said. She said ISPs should embrace Fon because the routers, which require that "aliens" enter a valid credit card number before getting online, put a sharp stop to the leeching. And getting free access to the worldwide network of La Fonera routers encourages people to get or keep a broadband connection at home.

In the Time Warner deal expected to be announced Monday, Fon and the cable company will split what "aliens" pay to use the hotspots. Rees said the two companies are still working out details on how the partnership will be marketed. Time Warner Cable spokeswoman Maureen Huff confirmed the broad outlines of the deal but declined to discuss any details.

Time Warner may be looking ahead to the not-so-distant future when some of the 300 or so municipal wireless projects -- featuring free or at least inexpensive broadband -- being considered today become reality.

Godfrey Chua of the research group IDC said the threat is most serious to ISPs that still offer dial-up access, because budget-minded customers who don't need a fast home connection might be swayed by the access-everywhere advantage of municipal Wi-Fi.

Still, that doesn't mean ISPs should start knocking down Fon's door, Chua said. After all, it's unclear whether a revenue-sharing agreement with Fon would offset the added costs of supporting all the additional traffic that Wi-Fi users would bring to a broadband network.

So while Fon's value grows as the number of Foneros increases, so does the burden on the ISPs. Chua compares Fon's situation to two popular Internet phone providers, Skype and Vonage Holdings Corp.

"Both of those folks so far have been allowed to do what they're doing because the traffic loads created haven't been so onerous for the service providers," Chua said. "As soon as that becomes a pain point for the ISPs, they're going to clamp down on it."

Vonage Wins Permanent Stay of Patent Ruling

"Business as usual" for VoIP pioneer as it awaits appeal in Verizon case
Jim Duffy

Vonage this week received a permanent stay of injunction from the U.S. Court of Appeals for the Federal Circuit in Washington D.C. that would have barred it from signing up new customers.

Vonage sought the stay following an April 6 decision by the U.S. District Court in Alexandria, Va. enjoining the company from using certain VoIP technology to add new customers. The court ruled that the VoIP technology Vonage was using infringed on three patents awarded to Verizon.

The permanent stay enables Vonage to add new customers as the company pursues an appeal to that ruling. Existing customers remain unaffected by the company's ongoing patent litigation, Vonage said.

"We thank the appellate court for its thoughtful consideration of the merits of our case," said Jeffrey Citron, Vonage chairman and interim CEO, in a statement. "It's business as usual for us."

Some Vonage users believe they won a stay too -- but only a temporary one.

"It's a breather for Vonage, but only that," says Mark Leahy, a project manager for IBM Global Service's American IT services department.

"I don't see it as the end of the argument -- just a way for Vonage to survive until they resolve the rest of the case (and the Sprint case, too)," he says. "Right now, anything extending Vonage's survival is good news for them, and thus for me."

Vonage will continue to serve existing customers by paying into escrow a quarterly royalty of 5.5% throughout the appeals process and by posting a $66 million bond as required by the court. The company says its current cash position allows it to pay these fees to secure the stay as it continues to make progress on workaround solutions and pursues its legal appeal over the coming months.

Vonage says it remains “highly confident” in the strength of its appeal.

The company said it believes the original verdict defined the patents in an overly broad in a “legally unprecedented way." Vonage said it believes the district court's decisions repeatedly neglected well-established law on claim construction and, as a result, artificially expanded the coverage of Verizon's patents beyond what was intended by the patent trademark process.

Vonage believes the appeals court will interpret the patents correctly.

"We continue to believe we have not infringed on any of Verizon's technology and remain optimistic that we will ultimately prevail in this litigation," Citron stated.

Verizon was not immediately available for comment.

AT&T Riding High on Merger, Wireless Revenues
Katherine Noyes

AT&T doubled its earnings in 2007's Q1. The company's net income was $2.8 billion, compared with $1.4 billion during the same period a year ago. AT&T also reported gains in wireless data revenue, which was up 66.8 percent over the same quarter a year ago, and reductions in subscriber "churn," or the rate at which subscribers drop the service.

Waiting for IEEE 802.11n? It’s not waiting for you. Company-issued notebooks are arriving with 802.11n Wi-Fi built-in. Don’t wait for the final standard to plan your WLAN access point and switch strategy. Plan today. Click here to learn about the latest 802.11n-ready enterprise WLAN architecture.

AT&T (NYSE: T) reported strong financial results for the first quarter of 2007 on Tuesday, including doubling its earnings over those from the same quarter a year ago.

The San Antonio-based company reported net income of US$2.8 billion, or 45 cents per share, for the period ending March 31, compared with $1.4 billion, or 37 cents per share, a year ago.

Behind those rosy results are the acquisition of BellSouth (NYSE: BLS) -- which the company said resulted in savings of about $300 million in the first quarter -- along with growth in wireless revenue, which was up to $10 billion, an increase of more than 11 percent since last year.

Less 'Churn'

AT&T acquired BellSouth last year for $67 billion; this was the company's first full quarter since the merger took place.

"We had an outstanding start to the year," said Edward E. Whitacre Jr., AT&T chairman and chief executive officer. "Merger integration is on track, volumes continue to be solid and we expanded margins in both wireless and wireline."

AT&T also reported gains in wireless data revenue, which was up 66.8 percent over the same quarter a year ago, and reductions in subscriber "churn," or the rate at which subscribers drop the service. Average monthly subscriber churn for AT&T's postpaid wireless customer base was 1.3 percent in the first quarter -- its best rate ever, down from 1.6 percent in the year-ago quarter and 1.5 percent in the fourth quarter of 2006.

"They beat our estimates by 5 cents thanks to cost savings and a faster share-buyback program," Standard & Poor's analyst Todd Rosenbluth told the E-Commerce Times. "We think these trends are going to continue throughout 2007."

Cause for Concern?

The number of new subscribers added to AT&T's wireless service was the one area that caused some widespread disappointment among observers, with 1.2 million added in the first quarter, for a total of 62.2 million. That's up 11.5 percent, but many analysts were hoping for gains more like 1.5 million, Stifel Nicolaus analyst Chris King told the E-Commerce Times.

"Certainly wireless growth disappointed the street, and that had a negative impact," King said, though the numbers were in line with his firm's expectations.

The company's shares were down 56 cents to $39.21 in early afternoon trading on Tuesday.

"Compared with prior periods, the growth was a little more limited," agreed Rosenbluth. However, when growth exceeded the 1.5 million mark in the past, it was generally through prepaid customer growth, he noted, whereas in this quarter's report, much of the growth came from postpaid customers, he said. "We think the postpaid market is the most important for the company. It bodes well that that's where it's seeing gains."

Looking Ahead

AT&T's traditional wireline business is facing challenges, Rosenbluth said. "More important, however, the stock has been an extremely strong performer," he added. Standard & Poor's currently has a hold rating on the stock.

Stifel Nicolaus also has a hold rating on AT&T stock, King said, and that has been in place since before the first-quarter report. "I don't think there's anything that's hugely impactful one way or the other out of these numbers," he stated. "It was largely in line."

Because AT&T has excluded so many costs from its pro forma, however -- amounting to roughly $2 billion, King said -- "It's a company that's difficult for us to get our arms around."

Moving forward, two factors could limit AT&T's top-line growth potential, King added. First, wireless penetration rates in the United States have reached about 80 percent, and could indicate slowing growth throughout the industry. Second, "we're beginning to see a slowdown in IT spending across the board," he said, "and that could pressure the top line even more."

AT&T Chief Who Weathered a Sea Change Is Retiring in June
Matt Richtel

When Edward E. Whitacre Jr. joined Southwestern Bell in 1963 as a facilities engineer, the land-line telephone was the state of the art and the Bell operating companies were dominant.

Yesterday, Mr. Whitacre announced that in June — after 44 years climbing the corporate ladder — he would retire as chief executive and chairman of AT&T.

The industry he leaves is markedly changed from the one he joined, given the breakup of the Bell System, the reconsolidation of the industry and the now-powerful influence of cellphones and the Internet. The land-line telephone business is in its decline.
Mr. Whitacre, 65, has not only survived the changes, but helped drive them by means of an aggressive acquisition strategy that turned AT&T into the world’s largest telecommunications provider.

AT&T said Mr. Whitacre would be succeeded by Randall L. Stephenson, currently the company’s chief operating officer. Mr. Stephenson, 47, began his own career with Southwestern Bell in 1982 in information technology and has held positions in finance, performance assurance and marketing.

Despite Mr. Whitacre’s prominent role in shaping AT&T, Wall Street investors and analysts appeared to take his departure in stride. They said AT&T under Mr. Whitacre’s leadership had been preparing employees and investors for a passing of the torch.

Mr. Stephenson inherits a company with a $240 billion market capitalization, one that Mr. Whitacre has built into a multifaceted telecommunications giant through an aggressive acquisition strategy. Its multibillion-dollar deals — most recently the acquisition of BellSouth — have been in keeping with Mr. Whitacre’s philosophy that his industry demands immense size and scale.

The change in command was announced at AT&T’s annual shareholder meeting in San Antonio, where the company is based.

Industry analysts said Mr. Stephenson tended to be more detail-oriented than his predecessor and had the kind of skills that would be in demand as AT&T sought to focus on execution, not acquisition.

The transition to Mr. Stephenson should be smooth, said Christopher C. King, a telecommunications industry analyst with Stifel Nicolaus.

“I’m not sure you’ll see any grand strategic shift,” he said. Mr. Stephenson “is very well thought of and has been a primary contact with Wall Street over the last several years.”

Mr. Whitacre will leave AT&T with a lucrative retirement package, according to a proxy statement filed last month. He has a pension valued at $84.7 million and has $73.8 million of previously earned pay in a deferred compensation plan.

A native Texan, Mr. Whitacre has been credited with transforming Southwestern Bell, the smallest of the seven Bells when he took it over in 1990, into SBC, a giant that acquired AT&T and took its name.

“No one has done more to reshape the telecommunications industry than Ed Whitacre,” said John Hodulik, an industry analyst with UBS Investment Bank. “He took what was probably the most disadvantaged of the Baby Bells and turned it into the largest telecommunications company in the world.”

For his part, Mr. Whitacre said recently in an interview with The New York Times that he felt comfortable at last with the breadth of his company.

“I’ve always been trying to put all the pieces together,” he said. “We’ve got them now.”

Mr. Stephenson echoed that sentiment in an interview yesterday, after the announcement of his promotion.

“The big building blocks are in place,” he said. “Our task is laid before us: execute. We have to integrate these businesses.”

Wall Street has backed Mr. Whitacre’s acquisition strategy by sending the stock on a steady two-year rise to the high $30s from the low $20s. The stock finished regular trading yesterday on the New York Stock Exchange at $38.64, down 32 cents.

The company still faces considerable long-term challenges in light of fundamental changes overtaking the industry. Thanks in large part to Internet and mobile technology, which is allowing less expensive and more versatile communications, AT&T and its competitors have been forced to find new ways to maintain a growing chunk of the lucrative monthly fees Americans pay to stay connected and entertained.

The fiercest competition now comes from cable companies, which have bolstered their traditional television service with Internet and phone service.

One aspect of AT&T’s response has been the introduction of a television service called U-verse that it has just begun introducing around the country. It has only 20,000 customers and is adding 2,000 a week.

Mr. King said a crucial question facing AT&T and Mr. Stephenson was whether that product, which relies on sending programming over broadband lines, would be an effective competitor in the future.

“One of the major challenges is whether their video strategy, U-verse, will ultimately be enough for consumers five or 10 years down the line,” Mr. King said.

Mr. Stephenson said in the interview yesterday that he saw his own greatest operational challenge as making a success of U-verse. “That’s absolutely critical,” he said. “We have really just begun.”

Mr. Stephenson said he was “humbled” to be following Mr. Whitacre.

AT&T has 66.5 million land-based telephone lines, 61 million wireless subscribers, 12 million broadband lines, and sells local phone service in 22 states. Its market capitalization is double that of the nearest American competitor, Verizon Communications, at $110 billion.

Mr. Whitacre took home about $31.5 million in pay last year, according to the recent proxy filing, about 94 percent more than the $16.2 million that he earned in 2005. AT&T shareholders, on the other hand, saw a total return of about 53 percent, including reinvested dividends.

His compensation has rankled some corporate watchdogs who have said Mr. Whitacre was overpaid during the telecommunications downturn that followed the dot-com bust. Mr. Hodulik, the analyst from UBS, defended Mr. Whitacre’s retirement package, saying it reflected a career of contribution.

“Ed has worked there the majority of his life and done a huge amount to build value for shareholders,” Mr. Hodulik said. “Look at the length and depth of his contribution.”

Harman to Be Acquired by KKR and Goldman Sachs
Jeremy W. Peters

Harman International Industries, the maker of JBL speakers, Harman Kardon home theater systems and Infiniti car stereos, agreed to be acquired by Kohlberg Kravis Roberts and Goldman Sachs in a deal worth about $8 billion, the companies said today.

Owners of Harman stock would receive $120 a share, a 17 percent premium over the closing price on Wednesday. Shares of Harman rose more than 19 percent, above the offer price, suggesting that investors may be anticipating a higher rival offer. Harman can solicit competing bids for 50 days under terms of the agreement.

For Sidney Harman, the 88-year-old founder of the company, who owns about 5 percent of its stock, the sale does not mark the end his long personal stake in the business, which he started in 1953. As part of the deal, which is expected to be finalized this summer, he will remain as executive chairman.

Mr. Harman has sold the company before, once for $100 million in 1977 after he joined the Carter administration as an assistant commerce secretary. (His wife, Jane Harman, is a United States representative from California.) The company performed poorly under the owners at the time, the Beatrice Company, and Mr. Harman bought it back in 1980 for $55 million.

The deal with KKR and Goldman contains a unique provision, known as a stub, under which shareholders of Harman can choose to receive part of their payment in the form of stock in the new company. They would then have a share of any profits if the firm is sold or taken public again. This provision — the first in a major deal in the United States — could result in Harman’s current shareholders owning as much as 27 percent of the new company.

“Our board of directors strongly believes that this transaction will create attractive long-term opportunities for our employees, customers and business partners,” Mr. Harman said in a written statement today.

KKR and Goldman are buying the company while its fortunes are on the rise. Harman reported today that its profits for its fiscal third quarter, which ended on March 31, increased 11 percent, to $71 million. Sales rose across each of Harman’s operating divisions, the company said.

G.E. Should Shed NBC, Citi Analyst Says
Andrew Ross Sorkin

Some Citigroup analysts have big plans for General Electric, the world’s second-largest company by market capitalization after ExxonMobil.

The giant conglomerate, which makes jet engines, provides commercial loans and brings “The Apprentice” to the world each week, should sell its NBC Universal media group as well as other business units, Citigroup analysts said in a research report published Friday. Citi’s Jeffrey Sprague said a string of big divestitures would turn the company into a “focused infrastructure juggernaut” and might fix its lackluster stock performance, which G.E. chairman and chief executive Jeffrey Immelt recently called “frustrating.”

A partial breakup could value G.E. and its offspring at $45 per share, up nearly 26 percent from Thursday’s close, Mr. Sprague estimated.

The Citi report argued that G.E. should focus on its infrastructure-related businesses. That would mean spinning off its GE Money arm and a sale or spinoff of its real estate business as well.

While conglomerates were once in vogue, breakups have become a popular strategy for boosting share prices at companies with diverse businesses. In many cases, the units that are spun off become takeover targets for other companies.

Cendant last year divided itself into four pieces, and Tyco International is in the process of carving itself up. Cadbury-Schweppes, under pressure from activist investors, recently agreed to split into two separate companies: a drinks business and a candy business.

NBC has been the top network in news and late-night programs, but it trails its rivals in prime time. Thanks to recent hits such as “The Office,” however, NBC’s prime-time lineup has started to show some gains.

In February, The New York Post reported that Mr. Immelt might look to sell NBC if it did not significantly improve in the next 12 months. Bob Wright, who in February said he was stepping down as NBC Universal’s chairman and chief executive, told The Post “if the business doesn’t have good prospects, as with any business within G.E., it is going to come under a lot of scrutiny.”

A day later, however, Mr. Immelt called the Post report “made-up stupid drivel.”

“I don’t know how to be clearer. We’re here to stay and here to play,” he said.

If G.E. did sell NBC, it would end a relationship that has lasted more than two decades. General Electric acquired NBC in 1986 as part of its takeover of RCA. Mr. Sprague said the NBC business is a “distraction” for G.E. and “has no meaningful synergy with the rest of the portfolio”. He continued:

Immelt and team have done an excellent job playing the hand they were dealt. However, valuation has been trending lower again reflecting the cumulative effect of investor frustration over earnings quality issues and setbacks at NBC, Reinsurance, subprime mortgages. At the end of the day, G.E. has to deliver shareholder returns.

Based on estimated net income of nearly $1.9 billion in 2007, Mr. Sprague calculates that NBC Universal could have an equity value of about $37.7 billion. He put the equity value of GE Money, which began as a small captive finance company to help consumers buy G.E. appliances, at about $63 billion.

Spot remover

A Commercial Radio Station in Texas, KZPS, is Getting Rid of the Ads
Andrew Adam Newman

Facing increasing competition from satellite radio and iPods, Clear Channel Communications is trying something radically different at a commercial radio station in Texas: getting rid of the commercials.

As of Monday, KZPS in Dallas — on the dial at 92.5 FM or online at lonestar925.com — will no longer run traditional 30- or 60-second advertisements. Instead, advertisers sponsor an hour of programming, during which a disc jockey will promote its product conversationally in what the company calls integration.

For example, the disc jockey will identify Southwest Airlines, one of the station's first advertisers, as the sponsor at the beginning of the program. In a prototype provided by the station, the disc jockey later discusses the South by Southwest music festival, a popular annual event held in Austin, Texas, and concludes, "You know, the best way to get down to Austin for South by Southwest is Southwest Airlines. They have tons of flights. It's the way I travel."

The product-themed chitchat will account for about two minutes peppered throughout the hour, in contrast to the 12 minutes to 16 minutes of commercials that most stations broadcast each hour.

Advertisers will own not just the hour but also their categories. The station has four initial sponsors — Southwest Airlines, AT&T, Coors Brewing and Guitar Center — and will not sell advertising space to other airlines, phone companies, breweries or musical instrument stores.

Clear Channel's move is not unprecedented. In 2005, three stations near New York owned by the Morey Organization experimented with a similar model but eventually returned to conventional commercials.

"At a time like this, it's easier to postulate sponsorships and product placement than actually walk away from your spot-advertising revenue," said Sean Ross, a radio analyst with Edison Media Research.

While commercial radio stations once had automobile drivers' ears all to themselves, competition today is intense. The satellite companies Sirius and XM offer scores of noncommercial stations, and new cars are increasingly factory-equipped to play iPods.

"People are not as willing to listen to the commercials, and soon we'll have the Internet streaming directly into cars," said Robert Unmacht, a radio consultant based in Nashville, Tennessee.

He called the Dallas station's sponsorship approach "an interesting experiment and I applaud them for it. The key is to give it enough time to develop it, which is hard in a world that's judged in 13-week periods."

J.D. Freeman, market manager for the Dallas station, said Clear Channel intended to give the experiment some time to show a profit.

"Corporate has insulated us from having to get everything done in the next 90 days," Freeman said. "It's going to take a while to get the revenue model revved up, but we believe we'll be successful in Dallas."

Success would be most welcome for the station, which according to Arbitron slipped to 17th place in the autumn of 2006, the most recent ratings period, from 7th in the fall of 2000, when Clear Channel acquired it.

Shareholders of Clear Channel are to vote on a $19.4 billion takeover bid from Thomas H. Lee Partners and Bain Capital Partners on May 8. Clear Channel owns about 1,150 radio stations.

The Dallas station is also overhauling its format, switching from classic rock to a Texas-inflected rock-country hybrid. An average hour will include the likes of Lynyrd Skynyrd, Bob Dylan, Johnny Cash and Drive-By Truckers. That, too, is raising eyebrows.

"In a major market, for a classic rock station to change formats is really an anomaly," said Fred Jacobs, a radio industry consultant from Detroit who helped popularize the classic rock format.

Congress May Loosen Noose on Internet Radio

Bill seeks to reverse Copyright Royalty Board decision
Austin Modine

A bill introduced in Congress today could nullify the new rates set by the Copyright Royalty Board (CRB) which advocates say would put webcasters out of business.

Rep. Jay inslee (D-WA) and Rep. Don Manzullo (R-IL) have headed the "Internet Radio Equality Act," which aims to stop the controversial March 2 decision which puts royalty of a .08 cent per song per listener, retroactively from 2006 to 2010 on internet radio.

Advocates have dreaded the CRB ruling, which they say could raise rates between 300 to 1200 per cent for webcasters. Earlier this month, the CRB threw out an appeal by commercial webcasters, National Public Radio and others to review the new rates and postpone a May 15 deadline for the introduction of the royalty schedule.

If passed, today's bill would set new rates at 7.5 per cent of the webcaster's revenue— the same rate paid by satellite radio. Alternatively, webcasters could decide to pay 33 cents per hour of sound recordings transmitted to a single user.

"The illogical and unrealistic royalty rates set by the CRB have placed the future of an entire industry in jeopardy," said Jake Ward of the SaveNetRadio coalition. "This bill is a critical step to preserve this vibrant and growing medium, and to develop a truly level playing field where webcasters can compete with satellite radio."

The bill would also reset royalty rules for non-profit radio such as NPR. Public radio would be required present a report to Congress on how it should determine rates for their internet streaming media.

VJs for the Digital Age
Andreas Tzortzis

Media traditionalists already struggling with the transition to the digital world would not have liked the DVD playing on Wolfgang Stoltz's office computer screen.

It was the first episode of "24 Stunden - My Story," a new series the seasoned television journalist helped to produce for the German private TV channel Sat.1. Filmed by so-called video journalists, each of whom acted simultaneously as sound engineer, camera operator and producer, its first-person narratives take into the news mainstream a format that has been associated until now with reality shows and MTV.

Armed with lightweight cameras and laptops, the video journalists not only film the stories, but report and edit them as well.

Stoltz, a producer at Sat.1 for more than a decade, said he believed that viewers wanted the distance reduced between viewers and journalists. "They have the desire to have the world explained to them not by us, but by the protagonist," he said.

Once the exclusive territory of war correspondents and "parachute" journalists who needed the flexibility of a small camera and a laptop editing suite to file stories from hot spots, video journalism and its close-encounter format are now gaining currency at television stations around the world.

Falling prices for high-quality digital video cameras, the popularity of video streaming on the Web and viewers' apparent thirst for intimate, no-holds-barred television have accompanied the rise of the new approach.

As video journalism grows, unions and television traditionalists are watching with some wariness. The new technology might promise lower costs and higher flexibility, but it also signals the loss of jobs that have been around since the dawn of television.
"For those people who spent their lives as functionaries, dragging equipment around, holding cameras, they are facing the end of their careers," said Michael Rosenblum, president of Rosenblum Associates, his video journalism consultancy based in New York. "And they're not pleased about this."

If video journalists have a chief lobbyist, and critics their pariah, it is Rosenblum. An early advocate of the technology, the former freelance television journalist who took solo trips to some of the world's crisis regions began a new career training radio and television journalists to operate cameras and produce stories by themselves in 1990.

To hear the native New Yorker tell it, the advent of video journalism is comparable to the encroachment of the Web on the newspaper industry or, with a further historical leap, the threat of the Gutenberg press for town criers. The upheaval is as painful as the change is inevitable, he said.

"With Web 2.0, the Web is starting to impinge on broadcasters and they're just where newspapers were 10 years ago - in denial," he said.

In Rosenblum's view, the advantages of video journalism are obvious: Costs drop as three-person teams are reduced to one, a heavy $60,000 camera is reduced to a small one that costs $3,500, and a $5,000 editing room is replaced by a $1,500 laptop. In addition, Rosenblum said, solo video journalists are able to get closer to their subjects and are able to pounce quickly when a story takes a new direction.

He has found a willing audience in Europe, where his clients include the BBC, RTV Utrecht in Holland, the Belgian multimedia broadcaster Concentra and stations in Sweden and Germany.

RTV Utrecht, a regional commercial station and a Rosenblum client, became the first in the Netherlands to retrain their entire staff as video journalists. The editor in chief, Wim Kramer, said that his station wanted to "take television closer to our viewers."

"We don't have hot news items every day in Holland. We're a regional station," Kramer said. "Although I have 24 minutes for news every day, it's not 24 minutes of news - it's 24 minutes of storytelling. And people enjoy it."

Video journalist storytelling for RTV has included following a singer through process of his first stage appearance, but the station has also seen the benefits of video journalists for breaking news.

Within minutes of a riot in early April in which one person died, RTV had footage on its Internet site from a video journalist sent to the scene.

"We had 20,000 viewers on the site at the same time," Kramer said, adding that the station's share of broadcast viewers has increased from 14 percent to 20 percent since it started using video journalists.

The Web might be the eventual home of future video journalists, but for now it is regional broadcasters - with their emphasis on shorter, softer news stories and their limited budgets - that have been the quickest to benefit.

The BBC and other major broadcasters are starting to follow suit. The most well-known BBC video journalist, Mike Kraus, produces "The Golden Pin," a regionally broadcast show telling stories about people he meets on the streets of London.

"I think there will be more and more people who work alone as video journalists," said Stefan Kämpf, who has been training video journalists at Deutsche Welle, the German government-funded broadcaster for foreign markets, since 2003. "But as far as a change of guard, or as Rosenblum says, a 'paradigm shift,' " he said, "that's nonsense."

At the moment, Deutsche Welle sees video journalism more as an addition to its current offerings than as a replacement, though Kämpf said that the cost benefits are persuasive.

"If the quality isn't great, that's fine," Kämpf said of the video stories he receives from freelance video journalists. "They're cheap, and that argument counts for a lot in television nowadays."

Unions have so far taken a measured approach to the new technology. Though concerned about a drop in quality and accuracy when one person does the job of three, the unions ver.di in Berlin and Broadcasting Entertainment Cinematograph and Theatre Union in London have also encouraged their members to get retrained as video journalists.

"All we can do is advise our people to prepare for digitalization," said Ines Kühn, a ver.di spokeswoman. "Job profiles are changing, and that's very normal."

The change is not coming without some difficulty. As reluctant as journalists have been to toting cameras around, so have trained camera people, film editors and engineers found it hard to slip into a journalist's skin.

"Many of them have a very strong division between their private and professional lives," Kämpf said, referring to the round-the-clock demands required of a journalist reporting a story. "I tell them: 'If you want to work as video journalists, then the emphasis has to be on journalist.' "

There are other factors that speak against a future where most television news will be shot by a journalist working solo. Out-of-focus shots and camera wobbles will be on full display as European television stations move closer to replacing traditional TV with high-definition programming.

There are few wobbles in the first episode of "My Story," in which Stoltz follows around a 23-year-old Berlin native taking her first job as a concierge at a hotel in Vietnam. If the occasional shot is out of focus, Stoltz said, viewers "accept it, because you're able to get that close."

Jobs Says Apple Customers Not Into Renting Music
Duncan Martell

Apple Inc. Chief Executive Steve Jobs indicated on Wednesday he is unlikely to give in to calls from the music industry to add a subscription-based model to Apple's wildly popular iTunes online music store.

"Never say never, but customers don't seem to be interested in it," Jobs told Reuters in an interview after Apple reported blow-out quarterly results. "The subscription model has failed so far."

His comments come as the company he co-founded gears up for contract renewal negotiations with the major record labels over the next month.

Since Apple launched iTunes in 2003, it has sold more than 2.5 billion songs and now offers increasing numbers of television shows and movies.

Many in the music industry hope iTunes will ultimately start, in effect, renting music online, so record companies can make more money from recurring income. But Jobs said he had seen little consumer demand for that.

"People want to own their music," he said.

Industry executives and analysts told Reuters last week that they expect Apple to push for further concessions from record companies on selling music without copy-protection software known as digital rights management (DRM).

In February, Jobs urged all four major record labels to drop DRM, a move that some observers at the time said was sparked by the pressure Apple faces from European regulators to open the iPod/iTunes family to other technology platforms.

Already Apple, owner of the market-leading iPod digital media player as well as iTunes, has cut an early deal with EMI Group Plc, the third largest-record company, to sell music without copy protection software.

"There are a lot of people in the other music companies who are very intrigued by it," Jobs said of the move to sell songs without copy-protection software. "They're thinking very hard about it right now."

The Apple/EMI deal leaves Vivendi's Universal Music Group, Sony BMG Music Entertainment -- a joint venture of Sony Corp. and Bertelsmann -- and Warner Music Group Corp. in a tough spot, analysts say.

"We've said by the end of this year, over half of the songs we offer on iTunes we believe will be in DRM-free versions," Jobs said. "I think we're going to achieve that."

(Additional reporting by Yinka Adegoke in New York)

From February

Apple's Bid to end Music Piracy Protection May Signal End to Copyright System

Steve Jobs, chief executive of Apple Computers, has issued a challenge to the music industry, saying Apple would support an open online music marketplace if the four-largest music companies would drop the use of digital-rights management software — the technology that prevents the copying of music sold online.

Jobs' challenge, which some consider shocking, is just the latest brick to fall in the inevitable collapse of a legal wall that since 1999 has been obstructing technological progress and preventing people from enjoying more and better music at a lower price, suggests Michele Boldrin, Ph.D., an economist who studies the hidden costs of intellectual property rights protections.

Boldrin and David K. Levine, Ph.D., both professors of economics in Arts & Sciences at Washington University in St. Louis, are co-authors of a number of academic articles and a forthcoming book arguing that intellectual monopoly — patents, copyrights and restrictive licensing agreements — should be swept away.

Their theories, also deemed controversial, call for the eventual abolition of most intellectual property right protections. They view Jobs' plea for the abolition of the digital rights management (DRM) system as validation of their call for a new approach to intellectual property, one necessitated by the Internet's power to make digital content readily available worldwide.

In an open letter on Apple's Web site Feb. 6, Steve Jobs seems to concur with arguments put forth by Boldrin and Levine, suggesting "DRMs haven't worked, and may never work, to halt music piracy."

Music companies, Jobs argues, receive few benefits from selling 90 percent of their music on CDs, which don't have DRM software built in, and the remaining amount online with DRM technology. Meanwhile, Apple's iTunes Music Store is currently listed as the world top-selling online music store with more than 2 billion songs sold.

Wall is coming down, one brick at a time

Boldrin and Levin argue that there is plenty of money — in fact, probably more money than there has ever been — in distributing and selling digital content via the Web without the obstacles created either by DRM or by any similar attempt to prevent people to do what they want with the digital files they lawfully purchased.

"Digital content can now be sold very efficiently and in very large quantities via the Web," Boldrin explains. "Copies of that same digital content can easily be made and distributed via the Web — hence they should be allowed to be made — without the obstructions that current "anti-piracy" regulations impose upon this economic activity.

"The cost reduction that digital-web distribution of music makes possible is so large, that a competitive market for music could leave plenty of room for charging the lawful purchaser of originals for the implicit value of the copies he/she will eventually donate or sell to others, again via the Web," Boldrin continues.

"Imposing copyright protection and anti-piracy restrictions, such as the DRM software, on this flourishing economic activity is a costly, silly and eventually useless tentative to block economic progress. To preserve the old rents of a few incompetent people who cannot, or are not willing to, adapt to the new ways of doing business is not the goal of a good property rights legislation.

"One brick at a time, the wall is coming down," Boldrin concludes. "It had to come down. Tower Records is gone, and soon the music industry as a whole will realize that distributing music via CDs or similar devices is also gone for good.

"The movie industry is, apparently, slowly learning the same lesson as Wal-Mart is entering a partnership with all of the six major Hollywood studios to sell digital movies and television shows on its Web site," Boldrin adds. "The bricks are being removed, one at a time, but the process is made slow and painful by the silly resistance of vested rent-seeking interests."

Criminalising the Consumer

Where digital rights went wrong

IS IT legal to make a copy of that DVD you’ve just bought so the family can watch it around the home or in the car? In one of the most watched copyright cases in recent years, a judge in northern California ruled last month that copying DVDs for personal use was legal, given the terms of the industry’s licence and the way the copies were made.

The wider implication of the ruling remains clouded—not least because the DVD Copy Control Association, the loser in the case, has 60 days to appeal. But whatever the video industry may like to think, the writing is on the wall for copy protection.

Copyright is a tricky thing. It protects only the way that an author, designer, photographer, film-maker or composer has expressed himself. It does not cover the ideas or the factual information conveyed in the work.

What constitutes fair use or an infringement is trickier still. Much depends on the purpose and character of the borrowed material’s use. Limited reproduction for the purpose of criticism, comment, news reporting, teaching, scholarship and research is considered fair game. But the wholesale repackaging of the content for commercial use is a flagrant infringement.

In America, the Audio Home Recording Act of 1992 made it legal for people to record copyrighted radio broadcasts for personal use. But while the act said nothing about making digital recordings, ripping copyrighted music tracks off CDs and storing them on an iPod has become an everyday occurrence. Despite the number of iTunes downloaded for a fee, Apple would be in trouble if people were prevented from transferring legitimately owned CDs to their iPods. The software Apple gives away to iPod customers is designed to let them do just that.

Most people think it ludicrous that they can’t do the same with the DVDs they own. Now it seems, despite squeals from the movie industry, the law is finally moving in the video fan’s favour.

The issue in the recent case was whether Kaleidescape, a maker of digital “jukeboxes” that store a person’s video and music collections and distribute the entertainment around the home, had breached the terms of the DVD Content Control Association’s CSS (content scrambling system) licence.

A Kaleidescape server stores digital content ripped from CDs and DVDs on its hard drive. The content is then encrypted and fed to various screens and speakers around the home by a secure cable. Kaleidescape claimed that content distributed this way was even safer than it was on the original polycarbonate disks. The judge not only agreed, but couldn’t find any breach of the copy-protection licence either.

If the case ends there, to all intents and purposes the notion of fair use would appear to apply to DVDs as well as CDs. The movie industry, which nowadays depends as much on DVD sales as on box-office receipts, still seems to think that making life difficult for its customers is a recipe for success.

After likewise shooting itself in the foot for ages, the record industry is now falling over itself to abandon DRM (digital rights management) on CDs. A number of online music stores such as eMusic, Audio Lunchbox and Anthology have given up using DRM altogether. In a recent survey by Jupiter Research, two out of three music industry executives in Europe reckoned that dropping DRM would improve sales.

The latest music publisher to do so is EMI, which announced in January that it had stopped producing CDs with DRM protection. “The costs of DRM,” it declared, “do not measure up to the results.”

In an open letter entitled “Thoughts on Music”, even Steve Jobs, Apple’s charismatic boss and chief evangelist, recently called for the elimination of DRM. From this month, Apple’s iTunes will sell EMI’s highest quality recordings (those with sampling rates of 256 kilobits per second) without DRM for a small premium.

Belatedly, music executives have come to realise that DRM simply doesn’t work. It is supposed to stop unauthorised copying, but no copy-protection system has yet been devised that cannot be easily defeated. All it does is make life difficult for paying customers, while having little or no effect on clandestine copying plants that churn out pirate copies.

Now the copy protection on DVDs is proving just as easy to bypass. The biggest flop has been the CSS technology featured in the recent Kaleidescape case. It was first cracked back in 1999 by a Norwegian programmer called Jon Lech Johansen, who showed, in a few short lines of elegant code called DeCSS, just how trivial such lauded protection systems really were. Since then, even the DRM used to protect the new high-definition video disks (the Blu-ray format from the Sony camp and its HD-DVD rival from the Toshiba alliance) have been cracked wide open.

While most of today’s DRM schemes that come embedded on CDs and DVDs are likely to disappear over the next year or two, the need to protect copyrighted music and video will remain. Fortunately, there are better ways of doing this than treating customers as if they were criminals.

One of the most promising is Audible Magic’s content protection technology. Google is currently testing this to find the “fingerprints” of miscreants who have posted unauthorised television or movie clips on YouTube.

The beauty of such schemes is that they don’t actually prevent anyone from making copies of original content. Their purpose is simply to collect royalties when a breach of copyright has occurred. By being reactive rather than pre-emptive, normal law-abiding consumers are then left in peace to enjoy their music and video collections in any way they choose. Why couldn’t we have thought of that in the beginning?

New England Bank Associations to Sue TJX Cos. Over Data Theft
Mark Jewell

Bank associations in Massachusetts, Connecticut and Maine said Tuesday they will sue TJX Cos. over a data theft that exposed at least 45 million credit and debit cards to potential fraud.

Banks have been saddled with costs to replace cards and cover fraudulent charges tied to the theft from TJX, the owner of nearly 2,500 discount stores including T.J. Maxx and Marshalls. Since it disclosed the data theft three months ago, Framingham-based TJX has been hit with several lawsuits filed in the U.S. and Canada by consumers, financial institutions and investors.

The Massachusetts Bankers Association said the Connecticut Bankers Association, Maine Association of Community Banks and at least three individuals banks are joining in a lawsuit to be filed Wednesday in U.S. District Court in Boston. The associations represent nearly 300 banks.

Dan Forte, president and chief executive of the Massachusetts Bankers Association, said his organization will contact other state bank groups nationwide to see if they're interested in joining the lawsuit, which seeks class-action status.

The complaint will make an unfair trade practices claim under Massachusetts law alleging that TJX failed to adequately protect sensitive customer data, and misrepresented how it handled data.

TJX spokeswoman Sherry Lang said the company does not comment on pending litigation, but also said, "TJX will defend itself vigorously."

The Massachusetts Bankers Association said in January its members had been contacted by credit and debit card companies of fraudulent purchases tied to the TJX breach that had been made in Florida, Georgia, and Louisiana, and overseas in Hong Kong and Sweden. Reports continue to come in from "around the world," bankers association spokesman Bruce Spitzer said.

Spitzer said the banks will try to recover "tens of millions of dollars," although the damages the banks ultimately will seek depends on future expenses from replacing cards and covering fraudulent purchases.

On Jan. 17, TJX disclosed a breach of its computer systems by an unknown hacker or hackers who accessed card data from transactions as long ago as late 2002. On March 28, TJX said at least 45.7 million of its shoppers' cards had been compromised. Independent organizations that track data thefts say the TJX case is believed to be the largest in the U.S. based on the number of customer records compromised.

TJX says about three-quarters of the 45.7 million cards had either expired by the time of the theft, or the stolen information didn't include security code data from the cards' magnetic stripes. However, TJX also has said the intruders could have tapped the unencrypted flow of information to card issuers as customers checked out with their credit cards.

The company and the U.S. Secret Service are investigating. The only arrests so far have come in Florida, where 10 people who aren't believed to be the TJX hackers are accused of using stolen TJX customer data to buy Wal-Mart gift cards.

Spy Act Only Protects Vendors and Their DRM
Ed Foster

Here we go again. Congress has decided it needs to protect us from spyware, but - surprise, surprise - the bill they are most seriously considering actually offers no help in that regard. What's worse, the bill seems designed to make it harder for you to legally go after those who spy on you, particularly if they are doing so to determine if you're authorized to use a software product.

Last week a subcommittee of the House Committee on Energy and Commerce approved H.R. 964, the Spy Act, which bans some of the more blatant forms of spyware such as those that hijack computer or log keystrokes. The bill now goes to the full committee for approval, and it's expected to move quickly as it has strong bipartisan support.

But why? There are already plenty of federal and state laws regarding computer fraud, trespass, and deceptive trade practices that make spyware illegal. The existing laws have been sufficient to allow the FTC and/or state attorneys general to even successfully go after some of the nastier adware companies like Direct Revenue and Zango/180 Solutions. So what is the purpose of this law?

A clue can be found in the Limitations section of the Act, which features this rather broad exception:

Exception Relating to Security- Nothing in this Act shall apply to--

(1) any monitoring of, or interaction with, a subscriber's Internet or other network connection or service, or a protected computer, by a telecommunications carrier, cable operator, computer hardware or software provider, or provider of information service or interactive computer service, to the extent that such monitoring or interaction is for network or computer security purposes, diagnostics, technical support, or repair, or for the detection or prevention of fraudulent activities; or

(2) a discrete interaction with a protected computer by a provider of computer software solely to determine whether the user of the computer is authorized to use such software, that occurs upon -- (A) initialization of the software; or (B) an affirmative request by the owner or authorized user for an update of, addition to, or technical service for, the software.

In other words, it's perfectly OK for basically any vendor you do business with, or maybe thinks you do business with them for that matter, to use any of the deceptive practices the bill prohibits to load spyware on your computer. The company doesn't have to give you notice and it can collect whatever information it thinks necessary to make sure there's no funny business going on. And by the way, another exception provision specifically protects computer manufacturers from any liability for spyware they load on your computer before they send it to you. The Week in Review is edited and published by Jack Spratts. Of course, the exception for software companies checking to make sure you're an authorized user is the strongest evidence of what this bill is all about. After all, in terms of function, there's not much difference between spyware and DRM. Too bad for Sony this bill wasn't already the law when its rootkit-infected CDs came to light.

Another disturbing aspect of the bill is its enforcement provisions. The bill very specifically pre-empts all state laws that regulate "unfair or deceptive conduct" similar to that covered by the Spy Act. Now, the state spyware laws are pretty useless anyway, so that may not seem like a big problem. But the bill vests all enforcement power in the FTC and says that "no person other than the Attorney General of a State may bring a civil action" under the law. Private rights of action under state consumer protection laws are eliminated. So if you're victimized by a spyware-like deception and want to sue the perpetrator, you've got to talk the FTC or your state attorney general into taking up your case.

Let's sum up. If the Spy Act become law, hardware, software, and network vendors will be granted carte blanche to use spyware themselves to police their customers' use of their products and services. Incredibly broad exceptions will probably allow even the worst of the adware outfits to operate with legal cover. State attempts to deal with the spyware problem will be pre-empted and enforcement left up almost entirely to the FTC. Gee, what's not to like in that deal?

If Congress' approach on this sounds vaguely familiar, it should. It's basically the same formula Congress adopted four years to deal with spam. As we know, the dreadful Can Spam Act of 2003 proved to be the "Yes, You Can Spam Act." If wiser heads in Congress don't prevail - and who knows if there are any - I fear the Spy Act of 2007 will just prove to be the "Vendors Can Spy Act."

Suspended Deputy Convicted of Felony Eavesdropping

A suspended sheriff's deputy was convicted Tuesday of felony eavesdropping for his unsanctioned investigation with computer spyware of a neighbor.

After a non-jury trial, acting state Supreme Court Justice Stephen Sirkin also convicted Investigator R. Michael Hildreth of misdemeanor official misconduct. He was acquitted of felony third-degree computer trespassing against the man he thought posed a threat to young girls in their suburban Rochester neighborhood.

Hildreth, 45, could face up to four years in prison at sentencing June 26. In 1999, he became one of the first Monroe County deputies assigned full-time to a computer crimes unit.

Prosecutors said Hildreth in 2005 sent Penfield neighbor James Missel an email about potential job prospects with an attachment that, when opened, planted the spyware program Blaster on Missel's computer, allowing the investigator to monitor every keystroke, Web site visited and chat room entered on the computer.

Hildreth also left a computer disk in his neighbor's mailbox, purportedly from the same potential employer, with the same job information. When inserted in the computer's disc drive, it also downloaded the spyware.

Hildreth was been suspended without pay from the sheriff's office since his arrest in June 2006.

Assistant District Attorney Mark Monaghan said a follow-up investigation turned up no evidence of wrongdoing by Missel, who had volunteered for more than 30 years with a private school.

Poison Put Cover Songs Online

Poison is giving fans a sneak peak at its new covers album. The band has posted four songs online -- the Romantics' "What I Like About You," David Bowie's "Suffragette City," Sweet's "Little Willy," and the Marshall Tucker Band's "Can't You See." To listen to the full-length tracks, go to myspace.com/poison.

The tracks are among the 13 that will be included on the new album called Poison'd, which comes out June 5th. The record also features songs originally done by the Cars, the Rolling Stones, Kiss, Grand Funk Railroad, and Loggins & Messina.

Poison hits the road June 12th on a bill that also features Ratt.

In addition to the new album and tour, frontman Bret Michaels will be the star of a VH1 reality show in July called Rock Of Love With Bret Michaels, which will show him looking for his ideal woman.

Nine Inch Nails Releases Tracks on The Pirate Bay
Thomas Mennecke

Releasing Nine Inch Nail material online is an avenue the industrial rock band has been familiar with some time. Many tracks are readily available one the NIN.com website, downloadable via the traditional client/server method. However in a brief announcement made yesterday, a surprising element appeared. Not that new material was available for download, but that it was available via the BitTorrent protocol. Even more surprisingly, the torrents were uploaded to The Pirate Bay.

The Pirate Bay has been a quandary for the entertainment industry, as it has defiantly remained one of the largest - if not most popular - BitTorrent trackers/indexers. Despite a brief shut down in May of 2006, The Pirate Bay continues to remain a symbol of the P2P and BitTorrent community.

Although it has earned the scorn of the US entertainment industry, it appears that not all entertainers feel hostile towards the Swedish BitTorrent site - particularly Trent Reznor. Three audio tracks are currently being indexed by The Pirate Bay, "Capital G", "My Violent Heart", and "Me, I'm Not." This is an interesting move by NIN, and one that lends a hand of legitimacy to The Pirate Bay - as it shows that entertainers realize the importance of reaching out to their target audience.

Can Music Survive Inside the Big Box?

Wal-Mart, Target, Best Buy tighten their grip on CDs as sales, choices, decrease
Ethan Smith

When Wal-Mart Stores Inc. informed record labels it was looking for CDs to include in a promotion of Jewish music last year, executives at Naxos of America Inc. leapt at the chance to get some of their ethnic recordings onto the shelves of the big-box retailer.

But within months of shipping thousands of CDs to Wal-Mart, the classical music distributor's loading docks were swamped with unsold copies of "Klezmer Concertos & Encores" and "Great Songs of the Yiddish Stage." Since they hadn't sold quickly enough to meet the retailing giant's standards, 80% of the CDs Naxos shipped to Wal-Mart were returned. Record stores typically return only 20%.

"In hindsight, if we'd thought about this a little more, we wouldn't have done it," says Naxos Chief Operating Officer Jim Selby. "Jewish classical music, going into a Wal-Mart store, it's pretty farfetched that we'd have 60% or 70% sell through." He adds, "It's niche-y music."

Music executives -- and not just those who traffic in obscure genres -- are in an increasing bind when it comes to selling their wares on CD. As dedicated music stores, including Tower Records, have closed up shop by the thousands, big, generalist chains like Wal-Mart, Target Corp. and Best Buy Co. have tightened their already firm grip on the sale of physical CDs. The chains order huge quantities of some titles, while other releases find it hard to get a foothold.

In past decades, deejays and music critics helped shape musical trends. Today, many music industry executives agree, the big boxes have become the new tastemakers. Even as compact disc sales fall, their choices dictate which CDs are widely available on store shelves across the U.S. Big boxes are the industry's biggest distribution channel -- and the rock, hip-hop, jazz and classical music titles they choose not to carry face drastically reduced chances of reaching mass audiences.

Thanks largely to aggressive pricing and advertising, big-box chains are now responsible in the U.S. for at least 65% of music sales (including online and physical recordings), according to estimates by distribution executives, up from 20% a decade ago. Where a store that depends on CDs for the bulk of its sales needs a profit margin of around 30%, big chains get by making just 14% on music, say label executives who handle distribution. One of these executives describes the shift as "a tidal wave." Despite the growth in online digital music sales, physical CDs still are the core of the recording industry, accounting for about 85% of music sales.

Big-box chains say they're trying to give customers what they want. "We also are making changes to the CD selections in our stores to reflect customer preferences in each market," says a Wal-Mart spokeswoman.

But some labels worry that the big boxes are becoming even more restrictive in what they carry. That's partly because, with CD sales falling steeply, the discs aren't as hot as other products the stores sell. Also in the wake of the Don Imus controversy, the debate over the lyrical content of rap, rock and pop has flared up again. Oprah Winfrey recently has focused on rap lyrics on her talk show.

Wal-Mart, for example, has long refused to carry any album bearing a "parental advisory" label warning of lyrics that are potentially inappropriate for minors. As a result, major record labels typically create sanitized versions of albums for sale there and at other sensitive retailers. People in the music industry, however, say some hip hop and rock albums can be difficult to sell to the big chain -- even if the releases lack controversial content. "Even Target's getting more difficult," says Jeff Rabhan, a talent manager who has pop and hip hop clients. "Especially with everything that's going on right now with Imus and Oprah, it is becoming increasingly difficult to get hip hop records prominently displayed and even in some cases stocked," Mr. Rabhan adds.

Wal-Mart's stores don't sell a number of prominent, popular releases, including the punk band Green Day's best-selling album "American Idiot," the critically acclaimed alternative rock band The Strokes' "First Impressions of Earth," and rapper Mos Def's "Black on Both Sides." A Wal-Mart spokeswoman says these releases aren't carried because edited versions aren't available.

The chains tend to emphasize fast-selling hits that move tens of thousands of units a week. A typical Best Buy stocks 8,000 to 20,000 different music CDs titles, according to Gary Arnold, the chain's senior vice president for entertainment. Some chains carry even fewer titles. By contrast, the biggest of the defunct Tower's 89 locations carried more than 100,000 titles. (Tower still has some online operations.)

It's not just classical music and jazz that have trouble making it into the big boxes. Up-and-coming pop, rock or hip hop acts are unlikely to be welcome until they are proven sellers. And back catalog titles are also feeling the squeeze; even the Beatles are frequently represented in big chain outlets by just one or two albums. That means there are fewer places than ever to buy any CDs but the newest, most heavily promoted titles.

What's more, as CD sales have slipped -- sales have plunged 20% so far this year -- big chains are starting to de-emphasize them. Best Buy's Mr. Arnold says his chain has reduced the square footage allotted to CDs across the chain over the past year, though the size of the reduction varies by store. "Certain businesses are starting to flourish at the expense of others," says Mr. Arnold. "Right now the hottest categories in entertainment are gaming and the movie business."

Recently, Wal-Mart has quietly circulated word to major-label distribution executives that it will reduce the space devoted to music, perhaps by as much 20%, in hundreds of its stores. Some record label executives say they have heard similar warnings in the past that have not materialized.

Managers and lawyers who work with record labels say that partly as a result of the big-box squeeze, labels have become more conservative in the kinds of artists they are willing to sign.

For his part, Best Buy's Mr. Arnold says the blame for waning consumer interest in CDs lies with the record labels, not with stores like his. "Music has become a commoditized item," he says. "The CD is perceived by the consumer to be a $10 item, and the manufacturers continue to release new titles at $15 to $18.98." To remedy that situation, he says he has urged labels to move to a "paperback-book model," with no-frills packages priced cheaply for most customers, and more deluxe presentations for die-hard fans.

Chain retailers are unlikely to eliminate music altogether. Big-box chains often set CD prices so low the retailer loses a dollar or two on the most aggressively priced titles. If nothing else, Mr. Arnold readily acknowledges, music remains cheap bait to lure customers who may end up purchasing, say, a brushed-steel refrigerator. "I couldn't imagine Best Buy without music," he says.

Beyonce Song in Licensing Dispute
Alex Veiga

New shipments of a Beyonce album released earlier this month will not include a remake of the song "I'm Kissing You" until a dispute about legal clearances are resolved, the pop star's management company said Friday.

The company's decision came after a copyright infringement lawsuit was filed against the singer and her record label on behalf of the song's co-writers, Des'ree Weeks and Timothy Atack.

"Unfortunately, there were some misunderstandings regarding whether Des'ree's song '(I'm) Kissing You' was cleared for release in the United States," said Music World Entertainment, which represents Beyonce.

Versions of Beyonce's album, "B'Day Deluxe Edition," released internationally will not be affected by the change, as they did not include the remake of the disputed track, the firm said.

"Kissing You" was originally recorded by singer Weeks and released in 1996.

Beyonce's remake, titled "Still In Love (Kissing You)," was included on versions of "B'Day Deluxe Edition" that were released in the U.S. beginning on April 3. A companion DVD to Beyonce's album also included a music video for the song.

In the complaint, which was filed in U.S. District Court in New York, The Royalty Network Inc., argues that even though Beyonce's version of the song has an altered title and additional lyrics, the singer and her record company failed to get a written agreement to release their remake.

The Royalty Network Inc., asked the court to order Sony BMG to stop distributing copies of the album with the song. The lawsuit also seeks to recover damages in excess of $150,000.

Representatives for The Royalty Network and Sony BMG declined to comment on the lawsuit Friday.

E-mails seeking comment were sent to Beyonce's record label.

Music World Entertainment declined to comment on the lawsuit.

Weighing Jobs’s Role in a Scandal
Joe Nocera

In June 2001, Fortune magazine put Steven P. Jobs on its cover. This, I realize, is not exactly breaking news; the magazine put Mr. Jobs on its cover with shameless regularity.

This time was different, though. The headline read, “Inside the Great CEO Pay Heist,” and Mr. Jobs, Apple’s legendary chief executive, was showcased not because he had some slick new product to peddle, but because in January 2000, he had been granted 10 million stock options.

Fortune valued the grant, disclosed in Apple’s 2001 proxy statement, at $872 million, making it “by far” the largest option grant ever. (Apple’s stock split in June 2000, giving Mr. Jobs 20 million options.)

The reason I remember that cover is because I worked on it. As a Fortune editor, I was part of a team that put together a package of articles about the “highway robbery”— to use our phrase — that executive compensation had become. I also recall being quite happy with the cover.

What a delicious surprise to discover that Mr. Jobs, who had ostentatiously taken only $1 in salary since returning to Apple in 1997, had a stock option package bigger than any ever bestowed on such well-known greed heads as Sanford I. Weill of Citigroup or Michael D. Eisner of Disney.

Mr. Jobs, however, was not so happy. He railed about the “unfairness” of the cover. And he wrote a scornful letter to the editor, asserting that because Apple’s stock had fallen almost $20 a share since the options grant was made, they weren’t worth $872 million — “they are worth zero.”

That is not how options are valued, but never mind. In a tone dripping with sarcasm, Mr. Jobs offered to sell Fortune the options for half their supposed $872 million value.

What we didn’t know at the time was that the article so infuriated Mr. Jobs that he began agitating to have the options package canceled. The options were so far underwater that he felt it wasn’t worth the bad press to hold onto them.

Did that mean that Mr. Jobs was willing to go back to his $1 a year salary? Hardly. At the same time, he and the board began negotiating a new package: 7.5 million stock options this time, at a price of $17.83.

Those options were agreed to by the board in August 2001, barely two months after the Fortune article, but the final negotiations with Mr. Jobs weren’t completed until mid-December.

And although those options also never paid off for him, and were finally replaced in 2003 by a huge restricted stock grant, they had enormous consequences. They were one of two big options grants that ultimately embroiled Apple and its leader in the backdating scandal.

Among other things, an Apple underling created fictitious board minutes, two of Mr. Jobs’s closest associates were forced out of the company and faced charges brought by the Securities and Exchange Commission, and Mr. Jobs’s own actions and ethics were brought into question.

Rarely have so many avoidable problems been created by one man’s obsession with his own image. Then again, this is Steve Jobs we’re talking about.

THIS has been quite the week for Apple shareholders. The company reported an incredible quarter, with profits up 88 percent, blowing past analysts’ estimates. Its stock pushed above $100 a share for the first time ever. (It closed yesterday at $99.92.)

And then there was this week’s options backdating news: The S.E.C. brought formal charges against Apple’s former general counsel, Nancy Heinen, and its former chief financial officer, Fred Anderson.

(Mr. Anderson settled the charges against him for $3.5 million without admitting or denying guilt, while Ms. Heinen’s lawyers vowed to fight the charges against her.)

These were the two executives the Apple board has been pointing the finger at ever since it completed its internal investigation last fall.

The S.E.C. seemed to agree: its body language this week strongly suggested that it had zero interest in pursuing Mr. Jobs.

The agency’s position seems to be that the financial chief and general counsel are the ones who are supposed to ensure that options are handled correctly, and therefore both Mr. Jobs and the Apple board are off the hook.

But almost immediately upon settling the charges, Mr. Anderson pointed the finger right back at his old boss.

Mr. Anderson had been involved in an options grant that Mr. Jobs made to his executive team in early 2001 — it was the second big grant under scrutiny — and he claimed that he told Mr. Jobs there might have to be an accounting charge if the options were not handled correctly.

There is not much doubt that Mr. Anderson made his statement this week because he felt unfairly scapegoated by Apple and Mr. Jobs.

With all the finger-pointing, it is difficult to parse whether Mr. Anderson, a wealthy, widely respected figure in Silicon Valley, did something deserving of government sanction. What is clear, however, is that Mr. Jobs does not deserve the free ride he’s been getting from the Apple board, the company’s investors and government regulators.

I am not saying Mr. Jobs committed a crime. What I am saying is that it is pretty obvious by now that he was extremely involved in both of the options grants that have become such problems.

So it is hard to see how he doesn’t deserve his share of the blame for what happened.

Let’s start with the “executive team” grant that Mr. Anderson was involved in. At the time, Mr. Jobs was under pressure to make large grants to key executives to keep them from leaving. (Remember, this was the tail end of the dot-com bubble.) The board gave him free rein to hand out options as he saw fit.

The directors approved the grants, a total of 4.8 million options, which were set to go into effect on Jan. 2.

So far, so good. But then Ms. Heinen suggested the date be changed to later in January to move it past the company’s MacWorld event. She didn’t want it to look as if Apple executives were taking options in anticipation of a stock bump. Mr. Jobs agreed.

At the end of January, after some back and forth, he chose Jan. 17 as the new date, according to an e-mail message Ms. Heinen sent around at the time.

The board, in turn, approved the Jan. 17 options on Feb. 7. By then, though, Apple’s stock price had indeed bumped up, by $3.94 more than the Jan. 17 strike price. Which meant, of course, the options had been backdated, and should have been both expensed and disclosed. Neither happened.

There are lots of people in Silicon Valley who strongly believe that this sequence of events is hardly worth a parking ticket, much less a big-time S.E.C. investigation. But the S.E.C. clearly viewed it as serious enough to charge Mr. Anderson.

So why not Mr. Jobs? He’s the one who made the grants in the first place. He was clearly involved in choosing the new date — two weeks after it had come and gone. And as chairman of the board, he knew — or should have known — that the grants weren’t final until Feb. 7.

To conclude that Mr. Anderson, but not Mr. Jobs, did something wrong requires some serious mental gymnastics.

Now let’s look at the other grant: the 7.5 million options to Mr. Jobs himself. This was the case in which one of Ms. Heinen’s subordinates drew up fictitious board minutes to make it appear that the Apple board had approved the grant in October when the real date was December.

(The underling says she was instructed to do so by her boss, which Ms. Heinen denies.) Certainly, you can’t blame Steve Jobs for that.

What you can blame him for is creating an atmosphere in which these things could happen in the first place.

Consider, first, Mr. Jobs’s desire to replace the 20 million options with the 7.5 million options. What he was really trying to do was reprice his options without actually admitting that — because repricing would entail an accounting expense. To avoid the expense, he was supposed to wait six months and a day after the cancellation of the first package before Apple gave him the new package.

But he was Steve Jobs, and he wasn’t about to go optionless for six months and a day.

The Apple directors would later claim that they didn’t want him to go optionless either — because then he would have an incentive to drive down the stock price until he got his new options package. (Have you ever heard a nuttier rationale?)

In any case, Mr. Jobs held onto the 20 million options while negotiating at length for a better vesting schedule for the 7.5 million. If he had accepted a normal vesting schedule — he wound up getting a quarter of his options vested immediately — the issue would have been avoided.

Instead, the negotiations went on so long that they bumped into a new fiscal year, causing all kinds of problems for people like Nancy Heinen.

You get the strong impression that nobody dared to say no to Mr. Jobs, a notoriously difficult and abrasive chief executive. One imagines the trepidation of the compensation committee members — or Ms. Heinen — in telling him that he couldn’t get a low option price because the stock had risen during the negotiations.

So instead, they found a date in October that approximated the stock price in August — and an underling created phony board minutes.

What is particularly galling is the double standard. You hear from lots of sophisticated investors that it would be terrible if Mr. Jobs were forced out at Apple. How, they say, would that help Apple shareholders?

But lots of other chiefs have lost their jobs because of options backdating, and several have even been indicted. However indispensable he may be, the notion that Mr. Jobs can’t be touched because he’s Steve Jobs is something terribly corrosive.

If the S.E.C. is coming to the view that options backdating is just a peccadillo, as Silicon Valley has claimed all along, it should say so. But if it believes this is serious stuff, then it shouldn’t be making excuses for Steve Jobs, as it appears to be doing.

As for Mr. Jobs, as hard as he’s worked to convey the image of an above-the-fray visionary, that’s not quite the reality, is it? I recently stumbled across this comment from him, circa 1985: “I’m at a stage where I don’t have to do things just to get by. But then I’ve always been that way, because I’ve never really cared about money.”

Yeah, right.


Todd "Goliath" Goldman's Amazing Art Odyssey

Something very important has come to my attention: Todd "Goliath" Goldman, founder of trendy t-shirt slogan company David and Goliath and the supposed "brains" behind a number of its highly profitable works of art, is a creature of infinite wonder and intrigue! Somehow, through a miracle of time and space, Goldman apparently unknowingly duplicated a piece of art drawn many years previous by SA's resident artist, Shmorky, and then turned around to sell this divine coincidence for profit. How the heck did this happen?! Let's get to the bottom of this crazy mystery!

The story began early in April 2007, when my main man Shmorky received an email from a very nice lady. (The following is an artistic reenactment. Pretend it's just like on "Rescue 911" when the camera is all blurry and jerky and everything is in slow motion.)

Nice Lady: Shmorky, I think you're being ripped off! Oh, my heaaart!!
Cousin Pete: Oh no, Momma's hurt!

The drawing on the left was posted by Shmorky himself on his old webcomic, Purple Pussy, all the way back on September 19, 2001-- a mere 8 days after our nation's first ever tragedy. The familiar looking recreation you see on the right was produced by the art genius himself, Todd "Goliath" Goldman, and made absolutely and entirely out of thoughts from inside his own brain (you can tell this because it has TODD written in really big letters all over the corner of it). Everything down to the witty saying and exact same perspective on the bed and exact same curly squirrel tail came out of that beautiful big noggin of his. Oh Todd, you did a great job! Sign your name, buddy! Work that alphabet!

Around the time he found out, Shmorky went and posted a thread in the forums about this discovery, but at the same time, one must wonder: How did this amazing occurrence happen? How did two men, who both use the Internet and draw things on it, end up drawing the same thing several years apart? Some may say wizardry played a part, or perhaps sorcery. My own personal theory is that a Wiccan sandwich artist may have accidentally sneezed on Shmorky's meatball sub, damning him to a life of unending curses.

Around this time, some of our more observant forum members began to stick their slimy heads into the thread. What they found was an amazing amount of bizarre coincidences between Goldman's works and works from artists around the world. It was around this time that I really began to think... is it possible that we're dealing with a supernatural being?!

With a newfound sense of purpose in my heart, I tallied up the public's theories for as long as I could stand and charted it. Let's go to the graph:

That's really odd, the Wiccan theory didn't even make the cut! What's even more puzzling, is Todd for whatever reason, fired back and called Shmorky names. What the heck??? He's like your soulmate, Todd! You guys drew the same thing! You have a bond! Why would you do this?! TODD, THIS IS A BEAUTIFUL THING, DON'T THROW IT ALL AWAY!! Oh God, why?? WWWHHYYYYY?!

On the 12th of April, and with the odds stacked against our hero, Todd employed the help of a "publicist" to register an account and post an apology on our forums. I really have no clue as to why, since it's so painfully obvious he didn't do anything wrong. At all. Ever. In his entire life.



CLEARWATER, FL, April 11, 2007- Popular post pop-artist, Todd Goldman who has made a career of making fun of the world with his sarcastic commentary and cartoon icons, has mistakenly used the design of an another artist in two of his recent paintings. Todd's painting, "Dear God, Please Make Everyone Die", was inspired from a drawing he received unbeknownst to him belonging to an underground web comic artist David "Shmorky" Kelly.

In addition to painting, Todd designs t-shirts for his clothing company, David & Goliath. Todd and his design team create and receive thousands of design ideas every month. It's no secret that Goldman creates a lot of his painting ideas from his t-shirt designs. Goldman says "I made a judgment error and didn't research the background of this particular submission. "My intention was not to copy Mr. Kelly. I have never seen his work before and would never intentionally knock-off someone else's idea."

Goldman has issued a formal apology to Mr. Kelly and has stated that he will not be using his design again in the future. As a gesture of good faith, Goldman has pledged not profit from his mistake. He will instead donate his proceeds from the painting directly to Mr. Kelly or his charity of choice.

See that, folks? "My intention was not to copy Mr. Kelly." He didn't set out to draw a thing just like that other thing, even down to the cute little animal and the cute little bed and the cute little saying! How could anyone think that he'd stoop as low as to plagiarize a fellow artist so blatantly? It goes without saying how entirely unethical that would be, and you should be ashamed for even dreaming for a moment that Mr. Goldman might be such an unscrupulous fellow! Look, it's all here in this Internet press release which you can believe with every fiber of your being! He says he "would never intentionally knock-off someone else's idea." That means he wouldn't ever sit down and think, "Oh boy, I'm going to draw this cartoon almost exactly as it looks here and sell it for big money!" because he's not the type to do that! We're talking about Todd "Goliath" Goldman here, people! Not some guy who steals stuff from people who work hard to make a living! Todd... "Goliath"... Goldman!

On top of all that, he's offering to give Shmorky the profits from his sale. Not the actual sale price of the painting, just the profits. You know, because Todd never did anything wrong (in his entire life, ever), he shouldn't have to pay out of his pocket! He can just give Shmorky his profits and forget about this unpleasant matter forever without losing a single cent! That spells "Grade A" businessman, right there.

Also, for whatever reason, it would appear to me that there is a rogue lawyer running around telling folks to shut up about Todd Goldman and to stop publishing wild accusations and "libel" regarding him. Certainly there are some trouble-making clowns out there who want nothing more than to put a huge, ever-thinking monster of original abstract thought like Todd Goldman out of business. I don't know anything about that, I'm too busy reading this article about the genius that is Todd Goldman's brain. That same brain that thinks up its own ideas. And I quote:

Goldman attributes his inspiration to his wittiness and weird sense of humor.

"I'm just wacked out of my mind. Things just come to me really quickly. I have complete ADD so I've never finished a book before. I haven't really watched cartoons or read comic books. It's just my witty sense of humor and my love to draw," Goldman said.

"I love my job, I couldn't imagine doing anything else, and I meet so many girls. I just did this to meet girls."

High five one of those chicks for the rest of the hardworking artists out there, Todd. Everyone back here on the ol' Internet is completely envious of your success, which you attained completely fairly and without stealing ideas from anyone else, at all, ever, in your entire life! Ever!

- Johnny "DocEvil" Titanium


Until next week,

- js.

Current Week In Review

Recent WiRs -

April 21st, April 14th, April 7th, March 31st, March 24th

Jack Spratts' Week In Review is published every Friday. Submit letters, articles, press releases, comments, questions etc. in plain text English to jackspratts (at) lycos (dot) com. Submission deadlines are Thursdays @ 1400 UTC. Please include contact info. The right to publish all remarks is reserved.

"The First Amendment rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public."
- Hugo Black
JackSpratts is offline   Reply With Quote
Old 29-04-07, 08:23 AM   #3
Just Draggin' Along
Drakonix's Avatar
Join Date: Apr 2000
Posts: 1,210

Simmons said the words "bitch," "ho" and "nigger" should be considered "extreme curse words."
But apparently he doesn't consider "mother f**ker" makes the list.

Heck, take the three words and one phrase out of many rap tunes and you essentially have an instrumental.
Copyright means the copy of the CD/DVD burned with no errors.

I will never spend a another dime on content that I can’t use the way I please. If I can’t copy it to my hard drive and play it using the devices I want, when and where I want, I won’t be buying it. Period. They can all take their DRM, broadcast flags, rootkits, and Compact Discs that aren’t really compact discs and shove them up their bottom-lines.
Drakonix is offline   Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Peer-To-Peer News - The Week In Review - April 14th, '07 JackSpratts Peer to Peer 1 11-04-07 11:26 AM
Peer-To-Peer News - The Week In Review - December 9th, '06 JackSpratts Peer to Peer 5 09-12-06 03:01 PM
Peer-To-Peer News - The Week In Review - September 16th, '06 JackSpratts Peer to Peer 2 14-09-06 09:25 PM
Peer-To-Peer News - The Week In Review - July 22nd, '06 JackSpratts Peer to Peer 1 20-07-06 03:03 PM
Peer-To-Peer News - The Week In Review - June 24th, ’06 JackSpratts Peer to Peer 1 22-06-06 12:02 PM

All times are GMT -6. The time now is 08:24 PM.

Powered by vBulletin® Version 3.6.4
Copyright ©2000 - 2022, Jelsoft Enterprises Ltd.
© www.p2p-zone.com - Napsterites - 2000 - 2021